Theory
If we don't address the problem of energy use appropriately, we will create a more temperate climate in which we experience the extremes of temperature much greater than at present.
Scratches to Sketches
Friday, 5 September 2008
Crunchonomics and the Future World Economy
Crunchonomics is the title of an editorial in the July 19 issue of The NewScientist and refers to the difficulties created by the US economists of the US banking sector that produced the present credit crunch and resulting economic misery around the world.
The US economists are at it again. They are producing a new economic crisis on top of the existing one. We are about to experience a second round of crunchonomics, and one that will be even more painful for everyone than the current crisis and world economic depression.
I call it a depression because it is like a hurricane and not a tropical storm. The next depression to move around the world could be a category 4 or higher. Why do I say this? What is the basis of this surprising statement?
Well, I make this statement because as I watched the National Republican Party Convention in Minnesota go through the rounds of launching the Republican campaign based on bad economic principles and notions of how to get the US economy moving forward. Their prescriptions for the energy sector should get every one's alarm bells ringing.
Mr. Lieberman's back stabbing of the Democrats and McCain's lack of understanding of basic economics suggests that we have a huge population in the US who will buy into very outdated and really bad ideas. Do you want an example?
Well, let me say that a solution to the earth's energy crisis will not come by lowering the price of oil, gas and coal. My how those promoting the exploitation of the economics of these resources were in your face all convention long.
The people who control these resources stand to make billions in economies of scale resulting from doing stuff which is hardly novel. They stand to gain a windfall profit out of know technology, basically doing bugger all other than reusing rehashed techniques for getting oil offshore and out of 'nature reserves'. Do we really want these resources and the fumes from the toxic wastes of these materials to pollute the world's environment?
I say that if they succeed hang on for a really bad depression. We have seen nothing yet, and the next disaster these 'boys' can create will topple anything we have seen to date. Roll on the next killing field of choosing a bad economic and technical solution.
What is my solution?
In my view, the way to avoid a monster depression in 2013-18, is to have a spend our way out of the current depression by creating new energy technologies based on the use of solar, wave, hydro, and wind resources, planting hardwood forests, and growing algae for fuel from CO2 spewing out of energy plants around the world.
We need to spend, spend, spend while we tax, tax, tax. By intelligent spending and taxation, we can steer the world economy away from oil, nuclear, gas and coal methods towards solar, wind, and wave. The taxes are need to balance the budget of spending to develop the new solar and wind technologies rapidly. Lets get our depression right now and avoid the monster republican depression of the next decade. Have these outdated American Republican ideas not already done enough damage to the world economy?
The items we need to tax are uses of gas, oil, coal, and nuclear energy. Put these sources of energy out of business and build our economies on a safer energy foundation that puts solar energy first.
We also must tax the loss of heat from homes by assessing heat pollution for every home that is in a cold climate.
We need to cool our world down even more than it is likely to be cooled. Our goal needs to be a friendly climate rather than an unfriendly climate.
Summary
We need to spend to create need synergies in energy technologies, plant hard wood trees, encourage farmers to create more shade by subsidizing natural shade creating environmental efforts. We need to tax ourselves away from gas, oil, coal, and nuclear energy methods and toxic waste products that these technologies create.
The US economists are at it again. They are producing a new economic crisis on top of the existing one. We are about to experience a second round of crunchonomics, and one that will be even more painful for everyone than the current crisis and world economic depression.
I call it a depression because it is like a hurricane and not a tropical storm. The next depression to move around the world could be a category 4 or higher. Why do I say this? What is the basis of this surprising statement?
Well, I make this statement because as I watched the National Republican Party Convention in Minnesota go through the rounds of launching the Republican campaign based on bad economic principles and notions of how to get the US economy moving forward. Their prescriptions for the energy sector should get every one's alarm bells ringing.
Mr. Lieberman's back stabbing of the Democrats and McCain's lack of understanding of basic economics suggests that we have a huge population in the US who will buy into very outdated and really bad ideas. Do you want an example?
Well, let me say that a solution to the earth's energy crisis will not come by lowering the price of oil, gas and coal. My how those promoting the exploitation of the economics of these resources were in your face all convention long.
The people who control these resources stand to make billions in economies of scale resulting from doing stuff which is hardly novel. They stand to gain a windfall profit out of know technology, basically doing bugger all other than reusing rehashed techniques for getting oil offshore and out of 'nature reserves'. Do we really want these resources and the fumes from the toxic wastes of these materials to pollute the world's environment?
I say that if they succeed hang on for a really bad depression. We have seen nothing yet, and the next disaster these 'boys' can create will topple anything we have seen to date. Roll on the next killing field of choosing a bad economic and technical solution.
What is my solution?
In my view, the way to avoid a monster depression in 2013-18, is to have a spend our way out of the current depression by creating new energy technologies based on the use of solar, wave, hydro, and wind resources, planting hardwood forests, and growing algae for fuel from CO2 spewing out of energy plants around the world.
We need to spend, spend, spend while we tax, tax, tax. By intelligent spending and taxation, we can steer the world economy away from oil, nuclear, gas and coal methods towards solar, wind, and wave. The taxes are need to balance the budget of spending to develop the new solar and wind technologies rapidly. Lets get our depression right now and avoid the monster republican depression of the next decade. Have these outdated American Republican ideas not already done enough damage to the world economy?
The items we need to tax are uses of gas, oil, coal, and nuclear energy. Put these sources of energy out of business and build our economies on a safer energy foundation that puts solar energy first.
We also must tax the loss of heat from homes by assessing heat pollution for every home that is in a cold climate.
We need to cool our world down even more than it is likely to be cooled. Our goal needs to be a friendly climate rather than an unfriendly climate.
Summary
We need to spend to create need synergies in energy technologies, plant hard wood trees, encourage farmers to create more shade by subsidizing natural shade creating environmental efforts. We need to tax ourselves away from gas, oil, coal, and nuclear energy methods and toxic waste products that these technologies create.
Large Trees, Economies of Scale and the Environment
Its difficult to imagine a more pleasant site than a forest of large trees beside a lake teaming with fish and wild life. In my mind, I am especially drawn to an oak or maple forest of large trees beside a lake. The deer, moose, bears and other wildlife roam freely within their natural enironment and enjoy the bounty of what nature in its methods has sustained. Where do humans fit in? How can we retain this world of beauty and strength while creating our own exciting world of man-made structures, sports, and good fun?
For a start, we have to understand the economies of scale built into the natural world, especially the forests of large trees. These economies are storage economies. We can use large trees, the very tall oaks and forests of big trees to store energy coming from the sun. Whenever we store the suns energy this frees us to use some energy from the earth without destroying the delicate balance of total heat on earth. The problem is that if we use too much of the earth's stored energy, as in the case of nuclear energy, gas, coal or oil energy, we create heat greater than the heat the earth can tolerate.
We see the destructive power of sunlight on the earth's atmosphere. We don't want to add to the destruction by creating too much heat from what is already on earth. If we do, we will overheat he planet. We not only create more heat, but we release lots and lots of toxic substances into our atmosphere beyond what the earth's present ecosystems can tolerate. This results in premature deaths of species of living organisms, and perhaps the premature death of humanity. So, we must wake up and see the potential for damage to our precious world.
For the most part, the earth is protected from cosmic rays and the sun's rays by an atmospheric shield. When that shield is weakened as with a solar storm, cancerous mutations and genetic mutations can result as excessive radiation is absorbed into the flesh of living creatures, plants, animals, and other forms of life. Owing to scaling technologies, humans can destroy the shield and life itself, or make it unrecognizable through mistakes, errors and abuses.
Life on earth is sustained by a steady inflow of heat and light from the sun and cosmic rays. We can, but should not add to this inflow. Presently, we are adding heat to the earth at an alarming rate increasing exponentially. If this continues, life on earth will not be nearly as bountiful as it has been, and we could end all life but the most heat resistant forms.
For a start, we have to understand the economies of scale built into the natural world, especially the forests of large trees. These economies are storage economies. We can use large trees, the very tall oaks and forests of big trees to store energy coming from the sun. Whenever we store the suns energy this frees us to use some energy from the earth without destroying the delicate balance of total heat on earth. The problem is that if we use too much of the earth's stored energy, as in the case of nuclear energy, gas, coal or oil energy, we create heat greater than the heat the earth can tolerate.
We see the destructive power of sunlight on the earth's atmosphere. We don't want to add to the destruction by creating too much heat from what is already on earth. If we do, we will overheat he planet. We not only create more heat, but we release lots and lots of toxic substances into our atmosphere beyond what the earth's present ecosystems can tolerate. This results in premature deaths of species of living organisms, and perhaps the premature death of humanity. So, we must wake up and see the potential for damage to our precious world.
For the most part, the earth is protected from cosmic rays and the sun's rays by an atmospheric shield. When that shield is weakened as with a solar storm, cancerous mutations and genetic mutations can result as excessive radiation is absorbed into the flesh of living creatures, plants, animals, and other forms of life. Owing to scaling technologies, humans can destroy the shield and life itself, or make it unrecognizable through mistakes, errors and abuses.
Life on earth is sustained by a steady inflow of heat and light from the sun and cosmic rays. We can, but should not add to this inflow. Presently, we are adding heat to the earth at an alarming rate increasing exponentially. If this continues, life on earth will not be nearly as bountiful as it has been, and we could end all life but the most heat resistant forms.
Managing Beaver and Economies Within the Energy Availability Equations
I come from Canada.
Canada owes its successful past to the capturing and use of its vast resources living in or under forests and lakes. All these resources can be tapped and used by means of technologies that understand and embody the results of economies of scale. In pioneering times, the settlers noticed that beaver were using the forest to create artificial lakes. The pioneers mistakenly killed off the beaver and used their pelts for hats and pouches for gun powder.
Hudson Bay economics
The ancient Lake family, namesakes, who managed the Hudson Bay Company, a firm created to kill off the beaver for their hides for over a century, were responsible for much of this. Fact is that our very own ancestors were pretty damn ignorant of the effect that they were having on the long term prospects for natural life in Canada. Not so the beaver, Canada's greatest resource, but now lost! Well almost!
Beaver technology, profit, and economies of Scale
The beaver were very smart and exploited an technological principle of economies of scale. The beaver realized that they could create a most hospitable environment by means of dams located brilliantly at key points in their environment. Beaver are and were smart, full stop. They are and were industrious, and we can learn a lot about energy use, sustenance and creation from them. The beaver outlasted many prehistoric creatures by creating a wonderful environment which the settlers to Canada have managed to destroy, very effectively destroy.
Dead or dying towns across Canada
I say this as a Canadian raised in a sawmill wood furniture factory and fishing town that no longer has any sawmills, or furniture factories, and almost no fishing. The process of eliminating the furniture and saw milling industry and producing unemployment is an economic process that the neoclassical economic theories do nothing to explain.
Economic growth in my home town killed the golden goose. That is, it killed the main sources of employment in the town which were its lumber, furniture and fishing businesses. Hell! What went wrong? What went right? Somehow fishing was restored, albeit on a more limited basis, but only just restored!
Bad economics destroys economies and natural environments
The real mistake of people in the pioneering environment was that they were out for themselves and did not understand the long term implications of their actions. They were good people, but the effect they had on the world of their own children was destructive of resources and potential through economies of scale built into the natural environment, misunderstood and eliminated by settlers through ignorance. This bad process continues unabated throughout and across Canada, even accelerating in its destructiveness.
The stupidity of all this is that the perpetrators of this misdeed don't even know what they have left behind as a depleted legacy. There is no natural guide in the human brain to explain bad economics. When people form groups they copycat bad and destructive behaviour without knowing that what they are doing is fundamentally misfitting within their natural environment. The natives watched this process and still do, helpless in their struggle to get the 'white' man to understand the bad ideas running through 'his' brain.
It could be very different with just a small amount of real thought.
Canada owes its successful past to the capturing and use of its vast resources living in or under forests and lakes. All these resources can be tapped and used by means of technologies that understand and embody the results of economies of scale. In pioneering times, the settlers noticed that beaver were using the forest to create artificial lakes. The pioneers mistakenly killed off the beaver and used their pelts for hats and pouches for gun powder.
Hudson Bay economics
The ancient Lake family, namesakes, who managed the Hudson Bay Company, a firm created to kill off the beaver for their hides for over a century, were responsible for much of this. Fact is that our very own ancestors were pretty damn ignorant of the effect that they were having on the long term prospects for natural life in Canada. Not so the beaver, Canada's greatest resource, but now lost! Well almost!
Beaver technology, profit, and economies of Scale
The beaver were very smart and exploited an technological principle of economies of scale. The beaver realized that they could create a most hospitable environment by means of dams located brilliantly at key points in their environment. Beaver are and were smart, full stop. They are and were industrious, and we can learn a lot about energy use, sustenance and creation from them. The beaver outlasted many prehistoric creatures by creating a wonderful environment which the settlers to Canada have managed to destroy, very effectively destroy.
Dead or dying towns across Canada
I say this as a Canadian raised in a sawmill wood furniture factory and fishing town that no longer has any sawmills, or furniture factories, and almost no fishing. The process of eliminating the furniture and saw milling industry and producing unemployment is an economic process that the neoclassical economic theories do nothing to explain.
Economic growth in my home town killed the golden goose. That is, it killed the main sources of employment in the town which were its lumber, furniture and fishing businesses. Hell! What went wrong? What went right? Somehow fishing was restored, albeit on a more limited basis, but only just restored!
Bad economics destroys economies and natural environments
The real mistake of people in the pioneering environment was that they were out for themselves and did not understand the long term implications of their actions. They were good people, but the effect they had on the world of their own children was destructive of resources and potential through economies of scale built into the natural environment, misunderstood and eliminated by settlers through ignorance. This bad process continues unabated throughout and across Canada, even accelerating in its destructiveness.
The stupidity of all this is that the perpetrators of this misdeed don't even know what they have left behind as a depleted legacy. There is no natural guide in the human brain to explain bad economics. When people form groups they copycat bad and destructive behaviour without knowing that what they are doing is fundamentally misfitting within their natural environment. The natives watched this process and still do, helpless in their struggle to get the 'white' man to understand the bad ideas running through 'his' brain.
It could be very different with just a small amount of real thought.
Creative Economies of scale
Climate Disequilibrium
and New Energy Resources
Our understanding of economic forces is still very limited
In most economics courses, one will be taught, whether directly or indirectly, that resources cannot be created. They can be discovered, but not created. The inability of an economy to create resources is an assumption that is worth thinking about. Is it wrong, or is there something mysterious about economics remaining to be discovered? Lets rephrase the issue a little. Mining can discover new resources for an economy, but these resources were always there. Researching people, the geologists, miners, and others find mineral and other resources within an economy, but these resources are already present within that economy.
Standard economics fails on the test of being logical
The creation of resources out of non-resources, in fact, happens all the time, but it is not within the standard economics framework. Hold on! The non-resources are already present in the economy, so they must be resources. Everything within an economy must be a resource if one is to be consistent. There does not exist a non-resource within an economy. Perhaps, but this is confusing?
Our problem with economics and economic analysis is that it is inconsistent in fundamental ways. It once was that economic thought followed the mistaken notion that equilibrium is brought about by market forces. Not so! In my view, market forces have very little to do with equilibrium. One is more likely to find disequilibrium arising from fundamentals of economics, and much of this has to do with the creation of resources within economies. The creation of resources is the much neglected force within economies misunderstood for the most part by economic theory, especially neoclassical theory.
The economic notion of free markets producing equilibrium is myth
Market forces enable exchange using money, but rarely enable a steady state of equilibrium, except as short run phenomena. The reason is because of new resources being discovered, used, or created within an economy, and new resources coming from outside the economy, both give the world an economic reality of disequilibrium, if only because of birth and death realities. The fact is that the greatest resource and economy contains are its individual people, and individual people are not a constant resource. The abilities of people are constantly being improved or weakened, waxing or waning because of learning, discovery and health. Most economic models do not capture the processes of human and technical resource creation and destruction going on all the time.
Energy resources must be made, created or discovered through advanced technology
Surprisingly the most advanced technology on earth is natural and consists of photosynthesis. Without photosynthesis we would be dead. There are economies of scale to be tapped using photosynthesis as the engine of energy creation and storage. This natural technology can save the earth from the disequilibrium produced by the bad economic theories of neoclassical economics, those theories that believe in steady state equilibrium and which are totally off the mark, just plain bad economics!
For a start, economies of scale predispose economies towards disequilibrium. No economic model with economies of scale will produce a lasting stable equilibrium. Its just not in the mathematics, and yet most technologies embody economies of scale and most profits of economies are due to economies of scale. The neoclassical economic theories that neglected this or ignored this produced bad results, gross misunderstanding and wasted everyone's time in cloud coocoo land.
A sensible economic of energy assumes that energy can be captured, created and stored with the benefit of economies of scale. These economies mean that there is more than enough potential for the earth to supply the energy needs of everyone to come. The problem with the dynamics of economies of scale are that it will lead to disequilibrium in the earth's climate. The economies of scale of energy creation and storage must, absolutely must, be understood and managed.
In most economics courses, one will be taught, whether directly or indirectly, that resources cannot be created. They can be discovered, but not created. The inability of an economy to create resources is an assumption that is worth thinking about. Is it wrong, or is there something mysterious about economics remaining to be discovered? Lets rephrase the issue a little. Mining can discover new resources for an economy, but these resources were always there. Researching people, the geologists, miners, and others find mineral and other resources within an economy, but these resources are already present within that economy.
Standard economics fails on the test of being logical
The creation of resources out of non-resources, in fact, happens all the time, but it is not within the standard economics framework. Hold on! The non-resources are already present in the economy, so they must be resources. Everything within an economy must be a resource if one is to be consistent. There does not exist a non-resource within an economy. Perhaps, but this is confusing?
Our problem with economics and economic analysis is that it is inconsistent in fundamental ways. It once was that economic thought followed the mistaken notion that equilibrium is brought about by market forces. Not so! In my view, market forces have very little to do with equilibrium. One is more likely to find disequilibrium arising from fundamentals of economics, and much of this has to do with the creation of resources within economies. The creation of resources is the much neglected force within economies misunderstood for the most part by economic theory, especially neoclassical theory.
The economic notion of free markets producing equilibrium is myth
Market forces enable exchange using money, but rarely enable a steady state of equilibrium, except as short run phenomena. The reason is because of new resources being discovered, used, or created within an economy, and new resources coming from outside the economy, both give the world an economic reality of disequilibrium, if only because of birth and death realities. The fact is that the greatest resource and economy contains are its individual people, and individual people are not a constant resource. The abilities of people are constantly being improved or weakened, waxing or waning because of learning, discovery and health. Most economic models do not capture the processes of human and technical resource creation and destruction going on all the time.
Energy resources must be made, created or discovered through advanced technology
Surprisingly the most advanced technology on earth is natural and consists of photosynthesis. Without photosynthesis we would be dead. There are economies of scale to be tapped using photosynthesis as the engine of energy creation and storage. This natural technology can save the earth from the disequilibrium produced by the bad economic theories of neoclassical economics, those theories that believe in steady state equilibrium and which are totally off the mark, just plain bad economics!
For a start, economies of scale predispose economies towards disequilibrium. No economic model with economies of scale will produce a lasting stable equilibrium. Its just not in the mathematics, and yet most technologies embody economies of scale and most profits of economies are due to economies of scale. The neoclassical economic theories that neglected this or ignored this produced bad results, gross misunderstanding and wasted everyone's time in cloud coocoo land.
A sensible economic of energy assumes that energy can be captured, created and stored with the benefit of economies of scale. These economies mean that there is more than enough potential for the earth to supply the energy needs of everyone to come. The problem with the dynamics of economies of scale are that it will lead to disequilibrium in the earth's climate. The economies of scale of energy creation and storage must, absolutely must, be understood and managed.
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Sketches from scratches is a provocative blogspot that has grown out of the Wuh Lax experience. It is eclectic, which means that it might consider just about anything from the simple to the extremely difficult. A scratch can be something that is troubling me or a short line on paper. From a scratch comes a verbal sketch or image sketch of the issue or subject. Other sites have other stuff that should really be of interest to the broad reader. I try to develop themes, but variety often comes before depth.
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