the Great Misallocation

Tuesday 2012.05.15

The world goes around, things roll on, and I find myself looking at something getting very stale. In this space, I’m acutely aware that I have been using this space for almost nothing about me and my life and what I’m doing and things that interest me. Some of this is alright, just to make sure I’m not misunderstood about this. I’m not particularly narcissistic. I do hope that now and then some of what interests me and what I’m up to might be of some interest to some people. More importantly, I hope some people might take an interest in some things that are of interest to me because it’s relevant to them, too.

So, I’ve found myself devoting much of the space here and my time writing on subjects that are not about so much about me personally, although they certainly mean something to me, because they tend to be about trying to look at and sort out “big picture stuff”, things that don’t just matter to me, they matter to you, regardless of whether you’re even paying attention and thinking about it. That sounds a little presumptuous, but it’s true.

Now, as I sit here, I’m finding myself pondering what these subjects are, what the story is about them, and, right at the moment, how much there is a common theme among them. The common is a combination of major disruption of many people’s lives, in all kinds of ways, and realizing how much there is in common of some problem that can be regarded as some form of serious misallocation of something of value and importance.

Well, that sounds like a pretty grand statement, does it not? I know. But then every time I start thinking about the batch of interwoven subjects I’ve been writing about here, this comes to mind. It’s too recurrent to dismiss, whether it’s resources of the planet, money, human energy, time, attention, name it.

Astonishing numbers of people have been tossed overboard over a period of years, now, obviously getting much worse in the past few years as the financial disaster has wrecked things, and it’s worthwhile to have another look at something I referred to just days ago, the article in USA Today, Shortage of tool and die workers could crimp manufacturing growth.

In an era when working people have come to be called by the euphemistic terminology of “Human Resources” and regarded as disposable objects, skilled, experienced, useful people like tool and die makers, among many other kinds of work suffering this, are tossed aside and regarded as some sort of obsolete anachronism, while you’re supposed to be golden if you are, say, a currency trader, or in some sort of business marketing.

The federal government of the United States finds itself in massive, incomprehensibly huge debt, after decades of massive amounts of money poured into the giant bucket of “national security” and “defense” with most of it going into nothing realistically about maintaining a defense of the country. Instead, the people in charge of the allocation of all this money have poured the wealth of the nation into a worldwide military empire. Now, after all this madness, politicians are pushing hard arguing that we still can’t touch that, and instead, need to hack away at things serving the citizens of the country. Read some commentary about this madness.

I’ve repeated myself enough about how many people still can’t, or refuse, to grasp the petroleum situation. People are arguing all over the place that “peak oil” is an idea to ignore, with all kinds of nonsense about it. A large chunk of the nonsense and fiction revolves around arguments that completely misunderstand, or deliberately obfuscate, what the term means. It’s about hitting limits of rate of oil extraction, and heading into diminishing returns, while people talk about it as if it means “the oil is almost all gone”, when it’s about no such thing. Then they proceed, in the usual cases like this, to point out some numbers about how much is supposed to remain, ignoring what the numbers mean in context, and usually talk about “unconventional oil” and “new technologies” that are supposed to ride in to the rescue and make it unnecessary to even think about there being a problem.

I’ve been over all of this many times here, but it still just blows my mind how it can be that people either don’t see, or just refuse to acknowledge, and obvious point in that. The very fact that people are now into the realm of scrounging for any remaining petroleum, of any quality, in places where the oil is low quality, or in places making it difficult and expensive and even dangerous, and even petroleum substitutes like bitumen feom tar sands, or kerogen trapped in porous shale, is clear evidence that we’re now into the diminishing returns phase of the Oil Age.

At this point it still appears that most people don’t want to talk about how we’ve squandered petroleum and continue to do so. They would prefer to buy into misguided ideas that talk about how to blow through what’s left even faster.

The incomprehensibly complex insanity and plain banditry of the financial disaster we find ourselves in is an entire world of its own. People will be trying to sort this out for a long time, and it’s almost certain that however this all works out over the near future and more long term course of things, it won’t be how many people think it will be. Why that is pretty certain, and just one part of the puzzle of what has happened, is the gnarled, tangled, messy subject of sorting out all kinds of bad choices, warped sense of value, and misallocation.

Matt Taibbi, who is one of the rare people who seem to have a good clear grasp of what has happened, and is happening, and shining a little light on the mess, wrote a fine article (one of many) just recently, prompted by the recent elections in Europe. It’s an article that addresses a broad picture of how the financial and banking clusterfuck has affected governments and citizens of nations, but one particular bit of text absolutely nails the essence of a very fundamental necessity for us going forward:

…all of this is unsustainable. But if pain’s coming, it can’t just be regular people who pay. Bankers have to find new ways of making money that don’t just involve betting the hot table and taking out instant billion-dollar profits. They have to go back to building real businesses and being content with gradual returns over time. If there’s going to be austerity, it has to be for everybody.

Linking together the broad subject of energy resources and money, an interesting post by Dmitri Orlov this week about shale gas elaborates on something I’ve been thinking for a while. Much of the excited cheerleading chatter and hype about natural gas over the past couple of years is bullshit.

It isn’t just that a huge portion of the claims about abundant natural gas resources is somewhere between overoptimistic and fictional (I’m sure you’ve heard the now standard meme about “a hundred years of natural gas supply”), and the source of major disappointment and disillusion in the not so distant future. It’s how much of this hype seems very highly probable to be mostly about people in business related to this trying to build up a charge of people toward them and their enterprise, throwing capital investment at them in some sort of latest wave of “the hot big investment opportunity”, and it seems fairly probable to me that this is, to some degree that’s uncertain to me, largely a way to gather cash because these people have a pretty good idea that their actual business viability is not really looking as good as it’s cracked up to be.

Things like this provide an almost nonstop catalyst for wonder and puzzlement for me, as I keep having a general overriding thought occurring to me, going something like; I don’t think I’m any sort of visionary genius, and I’m certainly not imagining this stuff, so how do so many people at least appear to not see all this, and really get it?

The thing is, there are quite a few people who do get it, in all the different areas I’ve been talking about in this blog. The ugly fact of the matter is that we’re looking at a minority obscured by all the noise, between people who want to paint a picture of things the way they want people to think they are, playing (or pandering) to large audiences wanting very badly, for whatever reasons, to believe it. One perfect example was something I observed and mentioned in a previous entry. That was looking at a story on the web where the writer went through quite a detailed, specific, documented run through of the dire situation of the future of petroleum, and the following reader comments featured multiple comments from somebody saying “.. there’s the crazy talk, there’s the delusion..”, and proceeding to write things that made it grotesquely clear how deluded they are about the situation. As I pointed out when I mentioned that, it was not even particularly subtle, how far off in the weeds that commenting reader was, as they were responding to an article entirely about petroleum, to object, and then launched into a bunch of chattering about natural gas (which was right in line with the current happy bullshit propaganda about natural gas resources).


It’s almost impossible to seriously address an assortment of big, serious, urgent large scale long term problems without attention inevitably being sucked back into the swirling vortex of surrealism of contemporary American politics, and that rolls on and on. The current form of the Democratic Party is often a story of dysfunction and increasing detachment from reality, but even getting into serious examination and critique of those guys is more and more overwhelmed by the steadily worsening horror show of the recent era Republican Party, which is becoming more and more of an entity taken over by lunatics, bandits, and morons.

An editorial piece popped up on the CNN website a few days ago, addressing this worsening problem, and one of the interesting things about this piece, Fear fueling Republican extremism, is that it was written by David Frum, a former Republican political speechwriter and general Republican-supportive pundit, who suddenly found himself in the position of outcast not so long ago in some kind of purge as the result of having the audacity to say that there were some very very serious problems developing in the Republican Party.

It’s getting worse and worse, and it’s been obvious for quite a while that all this ugliness is growing and perpetuated in some form of pseudo-reality feedback loop, as a segment of the population latches on to Fox News, a batch of AM radio mouthpieces, and selected websites, who lock in their audiences (I should say “victims”) by continuously telling them some form of “all others are false”, being what they’re told is that “liberal media” they must avoid.

The results of all of this kind of lunacy and manipulation have been bad and getting worse long enough now that for me it has reached a stage where some latest bit of lunacy is likely to have a weird kind of characteristic in which it might still be shocking at some level, but simultaneously no longer surprising. All sorts of examples of stupid, devious, and just plain batshit crazy no longer make me think “you have got to be kidding!”, because it’s all way past the point where it became apparent that, no matter how bizarre, how blatantly false, how deranged something might be, the people involved were not kidding, they are actually serious.

Just today, after I had begun writing this post, I happened to come across a guest editorial piece in a weekly paper published in the district that has been represented in Congress for many years by Rep. Marcy Kaptur. Marcy Kaptur is a member of the Democratic party, and this op-ed piece in the weekly rag was written by the person who is the Republican party candidate running for election this year against Kaptur for that congressional seat, Samuel Wurzelbacher.

You probably are not, but, perhaps, you might ask, “alright, who is Samuel Wurzelbacher?”. Maybe “Joe the Plumber” might trigger instant recognition, which, all on its own, really says something. I figure that the odds are likely that the name Samuel Wurzelbacher meant nothing, did not register, but “Joe the Plumber” clicked instantly. The pseudonym of instant celebrity registers.

Yes, boys and girls, one Samuel Joseph Wurzelbacher is the Republican party’s candidate for election to the US House of Representatives, seeking to take the seat from Rep. Kaptur. In another time, an earlier era, before the present madness took hold, this would have been instantly and universally regarded as comedy exploring the limits of absurdity. In 2012, this guy won a primary election to become the Republican candidate seeking election to the House of Representatives.

God only knows what his primary opponent was like, but, then, in light of things in general in events of American politics, it seems highly probable that he might not have been really all that bad, but people voted for “celebrity name recognition”, not by recognition of a candidate’s name, even, but rather knowing his slilly pseudonym (which, to be fair to him, I don’t think was his invention, other than apparently going by the name “Joe” in day to day life).

The op-ed piece he wrote was a subject all its own, and impressively awful stack of nonsense that would waste too much time to even bother going through it to dissect everything wrong with it. Seriously. Nearly every sentence has a serious problem that could be a couple of paragraphs to examine the problems in full. It’s almost a textbook classic case of logical fallicies and specious argument. I wouldn’t recommend reading it, but if you’re really curious, go read it yourself and see if you think it makes any sense.

I don’t want to spend much more time on this area, but, if you go back to the previous election for Congress, Rep. Kaptur was running against Republican candidate Rich Iott, who actually became a focus of some national notoriety of his own in the 2010 campaign because of his photographs posing in his Nazi uniform as part of his World War II reanactment hobby. This doesn’t, it should be obvious, mean Iott was a Nazi, but it does make you wonder what sort of guy found this a good way to spend your time. More to the point, his activity previous to running for Congress was as head man of what had been his family’s business, a long established regional grocery store chain, until it was sold out when he was CEO and ceased to exist, leaving a large collection of grocery store employees as new unemployed. You can probably see it coming; he campaigned as someone whose “private sector” business experience as a job creator meant that he would be the guy to have in government to make way for job creation.

These guys are what you get for candidates for public office now from the Republican party.

The editorial from Citizen Wurzelbacher was, as I said, bad enough, but along the way in there, it was no surprise to find a bit in there saying, “Congress and the federal bureaucracy also need to stop wasting taxpayer money on worthless fake-energy wind, solar and algae schemes — and start letting companies drill again for oil and gas that power our economy and create real jobs and revenues.”.

And so it goes back to that again. Bad choices for public office in mindsets determined to double down on bad choices of the past.

It also swings us right back around to considering again what Orlov was writing about in the blog post I referred to earlier. He was talking about people rooting around for investments of other people’s money to feed their natural gas operations in fracking adventures, whatever the consequences, the Earth be damned, even though a realistic look at the situation makes it rapidly start looking like the payoffs are nothing like the cheerful claims. We have more or less the same kind of situation regarding petroleum and what we should more accurately call something like “pseudo petroleum” (see: tar sands/bitumen, oil shale/kerogen).

In short: more and more misallocation of capital, in futile endeavors to scrounge up more and more limited hydrocarbon fuels, so that we can misallocate more and more energy supply to all the things we’ve blown our finite hydrocarbon resources on at a furious and determined pace for the last 60 years or more.


There are, however, people who understand what has been happening, what is happening, thinking honestly about it, and trying to do the right things and everybody possible to understand.

The latest edition of James Kunstler’s blog Clusterfuck Nation recounts a brief glimpse of his past few days spent at a gathering of the Congress for the New Urbanism. There are people working hard to get us to a state where we once again have functionally integrated cities where life can function in places that are worth living in, without burning massive amounts of fuel for transportation, as it always had up until about 60 years ago in the United States, and still does in most places in the world.

The tragic abandonment, decay, and destruction of enormous portions of American cities, replaced by the vast resource squandering sprawl of suburban zones surrounding what used to be vital, functioning places, is something that these people understand, and they know a great deal about what to do about it. How much attention people pay to them is another matter. The fact that hardly anyone among the general American citizenry even know about them is a compound tragedy. It’s past time for that to change.

Where we build the places we occupy is one big issue. How we design and build them is another, still in the domain of the resources we consume for energy, in this case, to keep buildings warm in cold weather and cool in hot weather. This is something I already pointed at in the last entry here. Building in America has become an exercise in sealed boxes using massive amounts of energy derived mostly from finite hydrocarbon fuels.

So, what are we going to do next?






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