The Current State of Affairs

By Ed Smallwood

Why would I believe that we are at the brink of a major financial collapse, you may ask? I have a tendency to believe that everyone is on the same page as I am, forgetting that I read much faster than most people, excepting notably my father. While that seems like a joke, it’s also fairly true.

The first reason I believe that we’re at the brink of a financial collapse that I can’t see the end of, is because my father has been saying for my entire life that we’re on the long slide as a civilization. For a significant portion of my life I had to take this on faith. As I got older I saw the signs myself. Here are the ones that I can communicate to most people in summary.

1. Energy. Basically, any geologist who has studied oil reserves and is independent from the oil companies agrees that we are past, at, or soon to be at Hubbard’s Peak—the point where we are no longer able to increase production of oil. From this point on, demand will almost certainly be larger than the ability to meet it through any method of supply. Oil is the basis of the vast majority of our energy production. It is also the raw material used in virtually all plastic production. It is not reasonable to use corn to produce ethanol to replace our gasoline supply. I will go into that more below. Representative Roscoe Bartlett (R-Maryland) made an excellent one hour speech in front of the House of Representatives on February 28^th of this year on the subject of peak oil. I strongly recommend that you watch it at Energy Policy TV, or read the transcript at The House of Representatives. This will act as a primer for those of you unfamiliar with the topic. It’s also very nice to see that a Republican Politician is on the same page as I am. I didn’t think that was the case.

2. Climate and agriculture. Global warming is a part of this equation. So is desert encroachment. The major deserts of the planet are getting larger, and engulfing what was fertile farm land. It doesn’t matter the continent. Everywhere you look, it’s getting worse. This is something that could be stabilized if we’re willing to plant trees at the borders, but it will take work. And right now there doesn’t seem to be much urgency about this, and with a growing population this is going to be a major problem sooner rather then later. Fresh water is also a problem. Water may be one of the most plentiful substances on the planet, but most of it is polluted with salt making it impossible to drink without processing. Much of the fresh water that could be used for agricultural purposes is being diverted for industrial uses instead. In addition, much of the fresh water used in agricultural areas comes from “fossil aquifers,” underground water sources that are not being refilled from natural sources as they are being used. This is the case in the American Midwest, as well as much of China as well.

3. Economy. With an energy supply that is going to become more expensive whatever we do, and an agriculture that is going to suffer from lack of water, our economy is going to shrink regardless. Everything is going to become more expensive to make and transport. It is not reasonable to expect us to use or food supply (corn) to make a substantial amount of fuel (ethanol.) Even if we could, it won’t be cheap enough. This is a classic “Overshoot and Collapse” type economy. Currently, cheap credit is becoming harder to come by. People can’t borrow enough to keep our economy running. The AP is reporting that jobs are being slashed at an increasing rate (Dangerous cracks appearing in job market,) and U.S. News and World Report is reporting that auto repossessions are at their highest level in 10 years (Auto Repossessions Hit Record High).

4. Leadership. We have none on any of these topics. Creditors are running around like chickens with their heads cut off, with no standardization on how to deal with customers who are tapped out on credit. Government is in complete and total denial over peak oil, global warming, the economy, national debt, and pretty much everything else you can think of. The White House would much rather say that things are overstated then actually attempt to lead on any of these issues and prevent what is likely to be a rocky road ahead from becoming a cliff that we will plunge over, sooner rather then later. Mr. Bush is likely to be seen historically much like Herbert Hoover.

If you have further questions about these, or just want more information, I recommend Lester Brown’s Plan B 2.0: Rescuing a Planet Under Stress and a Civilization in Trouble.

We now have a chance to do something about these problems. Time has not run out on us yet, but doing nothing is a choice that we make. A representative from Texas (I can’t remember who, and can’t find him online at this time—I’ll update this post when I find him) compared the idea espoused by Rep. Bartlett of increasing funding for alternative energy to gambling with our future. I would like to say that the Representative from Texas is also gambling, letting it ride on bet we know is bound to bust eventually. Probably sooner rather than later.