Saturday, July 19, 2008

How many crises?

There is a great line from Woody Allen’s essay “My Speech to the Graduates”.

“More than at any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly.”

Let’s see if we can accurately count the different crises facing the US.

There is a housing/banking crisis, caused because during the housing bubble, banks made loans to people with out checking to see whether the income they said they had was in fact the income they had. Then those loans were sold upstream to funds for investors, and again the fund managers took the word of he banks that they had done due diligence.

There is a new energy crisis; the price of gas spiked for literally no apparent reason. OK, some people blame Asia for increasing demand, some people blame speculation, some people say it is our own fault (mostly cranky environmentalists).

There is a related crisis, the risk of recession. That is related to the banking crisis in that too many banks or investment firms going under doesn’t help the economy. But maybe more important, the price of gas affects all transported goods, which these days is everything. So there is a risk of the same kind of inflation we saw in the ‘70’s and early ‘80’s. That inflation (named stagflation at the time because it was linked to higher unemployment) was bad enough to induce Congress to agree to higher fuel economy numbers for cars, and to the infamous 55 mile an hour speed limit. The inflation was probably broken when the OPEC cartel was unable to keep its members from breaking their agreements to sell at a certain price. Their price agreement feel apart and the price of oil/gas dropped like a stone. Ironically it probably had something to do with the 55 speed limit and people’s personal efforts at conservation that helped break the cartel.

Finally, there is the global warming crisis. This has to do, apparently, with the fossil fuels we burn to light and heat our homes, to drive to and from work and in general to make our lifestyle what it is. This is the crisis Al Gore was looking at when he called for us to switch our electricity production to 100% renewable in ten years.

Now some of these crises are linked, feed on each other. Some of the ways we address the different crises are in fact the same, others solutions for one crisis make another worse.

We have the sorts of problems where the solutions could propel us into science fiction land; a place where we drive electric cars, our energy comes from wind and solar power, where our farming is a low tech sustainable organic sort, where we travel by rail, not plane (except perhaps zeplins), but mostly we use the internet to interact, so that we keep the critical mass of intellectual thought going to contnuously look for new solutions.

Or we live in a giant mix of downtown Pittsburgh and downtown Detroit.

The banking crisis will have a considerable negative effect on solutions for global warming and some of the solutions for high gas prices. The capital for new solar, nuclear and wind installations just may not be there. We may want the new solar/wind/nuclear not even to replace coal fired plants, but to power a new group of vehicle that use electric power and batteries. Of course, hybrids are not going away, and gas stations are already here, but unless people are buying golf carts for city driving, they may have full size electric cars that they may want to drive more than two hundred miles. If they have to wait three hours just to go another two hundred miles ....

But the idea of replacing our power plants with wind, solar and nuclear is attractive. Whether as a supplement to power new vehicles or to reduce green house gas producing coal and natural gas plants, it is a step in the right direction and may produce a desirable sort of momentum. Another positive step is that people are looking at their transportation options. They are taking the bus, commutuing with a bicycle, combining their shopping trips and have managed to reduce US demand for oil for the first time in a long time. I assume these things are being done in other countries too. This, in turn, appears to be exerting a downward pressure on the price of oil. Of course, the last time the price of gas feel, we soon went back to our old ways of wasting gas. Now we are really good at it. to help us waste more gas, there are the proposals that we drill off the coastal US, and in the ANWR. That would likely also exert a downward pressure on gas, and so we might be able to drive like we always have, for about five, maybe ten years. Burning even more gas, emitting more green house gases.

I don’t know what is going to happen. I’m about halfway through the Omnivore’s Dilema, but I can already see that a lot of what we are doing in terms of obtaining food at the lowest price possible depends on using oil, which will run out eventually, and on allowing considerable pollution and soil erosion (kept in check with ever more chemicals). In other words, unsustainable methods. We could follow Al Gore’s call to action, do things like encouraging local farms that use sustainable methods and switch to bikes and electric cars.

Then I remember the film Idiocracy, by Mike Judge. It chronicles the triumph of the lowest common denominator. Owen Wilson ends up as the smartest man on earth (!). You should check it aht.

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