The Allegory of Good and Bad Government
I need to read Dr Tim Morgans Analysis through a few more times and slöeep on it. For now, I have posted this as a Question/Comment on Dr. Morgans, Brilliant Blog.
#104. Why Mr Trump can’t raise American prosperity
THE US ECONOMY – A SEEDS APPRAISAL
With SEEDS – the Surplus Energy Economics Data System – nearing public release, this article has two purposes. It assesses the outlook for the American economy, and uses this investigation to demonstrate how SEEDS is applied to economic interpretation.
It concludes that American prosperity is in decline, and has been falling ever since it ‘peaked’ way back in 1999. This doesn’t make America unique – prosperity has long been falling across much of the developed West. But it does mean that the central economic task of President Trump, which is to make the average American more prosperous, simply is not possible.
Two main factors are driving the deterioration in prosperity. First, the underlying economy has been deteriorating, a trend disguised by the spending of borrowed money.
Second, in America as elsewhere, the trend cost of energy continues to increase markedly, even while market prices are trapped in a cyclical low. This cost acts as an “economic rent”, and translates into individual experience primarily through the cost of essentials, which are energy-intensive.
The Reasoning here about Fake growth that is predicated upon borrowed money is slightly confusing in that Almost all Money is Borrowed, That some money is spent on Production or Investment for future consumption and some is spent on Current Consumption is a distinction I can follow both for Money ( Debt Based Money) but would also hold true for Energy Based Metrics, That is if we are spending or investing energy budgets we can Spend available energy on investment or on Current consumption.
If one did a Stocktake of all potential production with existing energy resources, how would that Look? Prosperity for a Single Income minimum Wage Single Parent in Detroit looks a lot different to An Upper Middle-Class Graduate from Connecticut? If Money is reinvented around Energy Realities rather than the realities of Debt Based Money where would we choose to head, and whose measure of prosperity would we adopt?
If we look at The Petro Dollar and its problems based on the old Free lunch ( exorbitant privilege paradigm) Mr. Trump or any US president is faced with the same problems, On EROI measures if Energy is invested on Infrastructure both Transport and Energy surely there is a way out of the current quagmire?
On a business as usual scenario, War seems to be the present Answer from those stuck in the Old Paradigm, and president Trump seems to have been co-opted into that course of action. Should President trump manage to free himself from the PENAC ( Project for a new American Century) Crowd What is the realistic view for an energy based economy?
I thought this Roger Pelke Talk was very good, It would be disastrous to see a marginalisation and Polarisation of the Energy Based Economy debate, in the same way as the Climate Question became so poisoned.
Climate Politics as Manichean Paranoia – Roger Pielke Jr @ The GWPF, July 2017
On a business as usual scenario, War seems to be the present Answer from those stuck in the Old Paradigm, and president Trump seems to have been co-opted into that course of action. Should President trump manage to free himself from the PENAC ( Project for a new American Century) Crowd What is the realistic view for an energy based economy?
I thought this Roger Pelke Talk was very good, It would be disastrous to see a marginalisation and Polarisation of the Energy Based Economy debate, in the same way as the Climate Question became so poisoned.
Climate Politics as Manichean Paranoia – Roger Pielke Jr @ The GWPF, July 2017
David Korten is an economist, author, and former Professor of the Harvard Business School. His political activism has made him a prominent critic of corporate globalization. His 2006 book “The Great Turning: From Empire to Earth Community” argues that the development of empires about 5,000 years ago initiated unequal distribution of power and social benefits to a small portion of the population.
I think And Energy Based View from a Main Street and not Wall Street Perspective could see the #MAGA project gain traction, the Hawkish view which seems to have prevailed will see a great deal of Energy Wasted in all senses of the word Energy.
drtimmorgan
on September 5, 2017 at 6:35 pm said:
Thanks. You raise a large number of issues, some of which I’ll need to follow up before I can comment.
Yes, money is ‘loaned into existence’. But, however created, it is still a “claim” on real economic output. If that claim can’t be met then, by definition, it has to be destroyed. This makes its owner – or the creditor to whom it belongs – poorer.
Part of the problem is that money is accepted as a “store of value” – so, if someone owes me $1, I count that as an asset. If he cannot pay me, then I’m $1 ‘poorer’. No-one has yet demonstrated how we can ‘let off’ debtors without leaving creditors short-changed – and these creditors are often debtors to others.
Some engineering solutions might be possible – but we seem unable to find them. For instance, the WEF report on pension shortfalls couldn’t suggest much more than higher savings ratios, which aren’t practicable, as they would need to be far too high to be affordable. Getting returns on investment higher would “solve” the problem, but only by raising interest rates. And so on……..
rogerglewis
on September 6, 2017 at 4:35 pm said:
Hello Tim, Thanks for the reply.
If we are talking about the existing System the problem is one of Assymetric Risk and lack of moral hazard, Taleb has fully examined these questions and This Interview of his I found very useful.
http://www.econtalk.org/archives/2013/09/taleb_on_skin_i.html#.VaZCuLFowo4.blogger
http://letthemconfectsweeterlies.blogspot.se/2015/07/so-how-much-skin-do-troika-have-in-game.html
http://letthemconfectsweeterlies.blogspot.se/2015/07/on-skin-in-game-interestinf-question.html
I was looking at your Seeds report for Greece earlier and the Curves certainly do not point to the huge disaster that has unfolded there in the last 7 years Which is more properly expressed by the curves in this blog http://letthemconfectsweeterlies.blogspot.se/2015/07/bricks-without-straw-pharoh-merkel.html
The Stock taking point I make is a serious question that needs addressing Both in terms of the existing system but any proposed energy based alternative. Energy Investment Decisions I would argue are better made in local scale up to regional scale levels and not from Supra National down to national levels.It really boils down to a question of Scale and Democracy.
Whether it is Energy Based Exchange Tokens or debt based debt tokens the political question remains the basic one of what is the balance between Subsidiarity and Centralisation a Balance the EU and ECB has badly wrong and which the Fed and US Federal Government have badly wrong and which has also been got badly wrong in the UK,
I live in Sweden where subsidiarity in Local Government is very real it is also true that subsidiarity remains at the core of the Success of Germany. This Interview with Prof Richard Werner is very good on the lessons from the German Model.
https://vid.me/fEw7t
https://www.rt.com/shows/renegade-inc/379579-uk-finance-curse-suffer/
drtimmorgan
on September 6, 2017 at 4:47 pm said:
Roger:
Thanks. I’m glad you mentioned that download for Greece, as I really need to replace these with new ones. Point taken, though.
You’re right, too, about local decision-making. One implication of renewables is that they change the economics, taking away the economies of scale that have hitherto favoured small numbers of large generating sites. This has been called “utility death syndrome”, and has been discussed here before – and it certainly favours localism.
The UK is extremely centralised, as I know becaise I was a local councillor for quite a few years before I emigrated. British energy policy has been inept, putting off nuclear replacement decisions for far too long, ending up with the hugely expensive Hinkley Point(less) project, and spending vast sums subsidising wind.
https://twitter.com/GrubStreetJorno/status/1181048742243377152