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Guest Post: July 4, 2011: The Cycle Of Dependency And The Atrophy Of Self-Reliance

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Submitted by Charles Hugh Smith from Of Two Minds

July 4, 2011: The Cycle of Dependency and the Atrophy of Self-Reliance

The 4th of July marks the birth of the nation, and as such is a good time to distinguish between the nation and its Central government, the Savior State.

The 4th of July is a fitting day to ponder the reality that we are at Peak Government, and the Savior State is unsustainable. This is a matter of accounting: no nation can spend more than it generates in surplus real output forever. What goes unremarked is the intrinsically destructive nature of our rising dependence on a Savior State.

In his book Collapse of Complex Societies, anthropologist Joseph Tainter identified two causes of economic collapse: investments in social complexity yield diminishing marginal returns, and energy subsidies, i.e. cheap, abundant energy, decline. In my terminology, the dynamic he describes is one in which the cost structure of a society continues rising due to “the ratchet effect” but the gains from the added expenses are increasingly marginal.

At some point the additional costs, usually justified as the “solution” to the marginal returns problem, become counterproductive and actually drain the system of resilience as dissent and adaptability (“variation is information”) are suppressed. This feeds systemic instability: on the surface, all seems stable, but beneath the surface, the potential for a stick/slip destabilization grows unnoticed.

Cheap, abundant energy offers a surplus of value that can be invested in social complexity and consumption. Once the cost and availability of energy declines, then that surplus shrinks and can no longer be used to support the high cost structure.

The U.S. economy has clearly been driven to the cliff edge of instability by both dynamics: the cheap, abundant energy which enabled fast growth of consumption and high cost social complexity is vanishing, and the cost structure of the economy has ballooned far beyond sustainability.

To recount two previously mentioned examples: the “best of the best” fighter aircraft that cost $56 million per plane only a few years ago is being replaced by a new aircraft that costs $300 million each. Medicare/Medicaid and other healthcare costs are growing at two to three times faster than the underlying economy, and now consume twice as much per capita as any other developed nation. The "solution" offered by the Status Quo is a horrendously costly layer of additional complexity which doesn't even address the key issue that we spend twice as much as other developed nations for arguably poorer care.

Put another way, the institutions that were intended to solve society’s big problems slip into self-preservation, and thus end up adding to costs and problems alike.

Jared Diamond’s book Collapse: How Societies Choose to Fail or Succeed argues persuasively that environmental mismanagement plays a key role in social instability and collapse. Some of the key factors include the relative fragility of the ecosystem, the human population’s demands on the carrying capacity of the environment, and the ability of social institutions to effectively problem-solve ecological overshoot.

In my analysis, there is a third dynamic that causes societies to cycle through growth, stasis and decline: an unremarked cycle of rising dependency on the Central State for direction, distraction and the essentials of life.

One example of this is the Roman Empire, which experienced an atrophying of enterprise and innovation as the Empire increased taxation on its remaining productive enterprises to fund the Empire’s high cost structure. To quell dissent, the Empire pursued a dual strategy of increased political oppression and placating the increasingly dependent lower classes with "bread and circuses," literally distributing free bread and free entertainment to roughly 40% of the population of Rome. Both of these strategies required additional expenditures of treasure, even as they suppressed the dissent and adaptation (i.e. the information in variation) that might have led to a successful “ratchet down” transition to a much less costly and sustainable decentralized structure.

This "Savior State" also creates a third pernicious dynamic: as dependence on the Central State rises, self-confidence and self-reliance both decline, sapping the populace of the confidence and drive needed to meet the challenges of diminishing returns and higher energy costs.

We can visualize rising dependence on the Savior State and declining self-reliance on a see-saw: as dependence rises, self-confidence and self-reliance must fall.

What ensues is a classic destructive dynamic of co-dependence in which the supplicants demand ever more “bread and circuses” even as their resentment over their dependent status rises unabated. The Central State eventually taxes the productive citizenry into penury, as the poor are now completely dependent on the Savior State and the wealthy escape taxation via bribes and favoritism.

It seems clear to me that the U.S. is in the final stages of just such a dependency cycle that will end in the implosion of the Central Savior State as its obligations far exceed the economy's ability to generate surpluses on that gigantic scale. Though the Central State can always print money, this artifice doesn’t “fool Mother Nature” for long; it doesn’t matter how many zeros are printed on the paper, the product will still cost the same in terms of energy consumed and hours of labor.

The end result of money-printing that is unsupported by actual surplus generated by the economy is the government sends out checks for $1,000 every month in accordance with its obligations but that sum only buys a single loaf of bread. You cannot fool Mother Nature by printing bits of paper and claiming they are a future claim on real goods and services unless the extra money is based on additional surplus being added to the system.

This dynamic leads to an environment in which citizens expect jobs, healthcare, housing, education, etc. from a Central State whose cost has already exceeded the carrying capacity of the economy. As cheap, abundant energy disappears, then the Central State loses a key subsidy of its bloated complexity. As the State’s fiefdoms devote their remaining energy to self-preservation at the expense of taxpayers or other government fiefdoms, the problem-solving potential of these institutions drops below zero: not only can they not solve any pressing problems, their “ratchet effect” efforts at self-preservation actively create new layers of problems and costs which push the State closer to insolvency.

Rather than wait for the Savior State to renege on its impossible promises, this site suggests pushing the see-saw in the other direction: boost self-reliance and self-confidence and lower dependence on a Savior State doomed by unfavorable demographics, high cost structure, failed institutions and rising energy costs.

Rome offers us a plausible model for the devolution of the Savior State.
While a sudden collapse similar to the Soviet Union is always possible, I suspect the U.S. Central State will devolve in parallel with the ancient Roman Empire: as the Empire's costs exceeded the surplus generated by its remaining taxpayers, it issued flurries of edicts to the far-flung provinces, demanding more treasure and imposing ever more regulations.

The edicts from Rome were simply ignored. In Yeats' phrase, the falcon no longer heard the falconer. Enforcement is expensive, and if the gains reaped by costly enforcement are marginal or negative, then soon the issuers of the edicts ignore them, too.

On this 4th of July, the idea that the Savior State could slip into irrelevancy is far-fetched indeed, as the Central State is currently at Peak Government: intrusive, invasive, all-controlling, even as it plays the role of benign Sugar Daddy issuing trillion-dollar bailouts to banks, trillion-dollar props to the stock market, food stamps and Section 8 to the poor, Medicare and Medicaid to the sickcare cartels, Social Security to tens of millions of retirees, unlimited funding to the National Security State and its Global Empire, and all the other programs funded with its $4 trillion budget ($3.8 trillion officially, but don't forget the hundreds of billions in off-budget "supplemental appropriations") and its $1.6 trillion annual deficit, fully 11% of the nation's GDP.

Perhaps it is time to think of the government not as our Savior but as the guarantor of the Constitution. Peak Government is like Peak Oil: most will deny it is even possible until it's happening. We are probably a few years away from a true scarcity of oil and also a few years away from the realization that the Savior State's $100 trillion in promises cannot be met by "fooling Mother Nature" with paper and promises. But that day is coming, and perhaps we will be more cognizant of this reality on July 4, 2015.

 

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Mon, 07/04/2011 - 07:45 | 1423794 AnAnonymous
AnAnonymous's picture

The west is at peak state, this is very likely. It does not mean that other places in the world have met the peak state. These places will be able to benefit from the state more than it is detrimental to them.

This explains in the West all the propaganda about how wrong the State.

Now it has peaked here, it is all about preventing others from benefiting from the State.

Mon, 07/04/2011 - 08:41 | 1423885 BigDuke6
BigDuke6's picture

You're talking shit... as normal.

But i think what you want to say is that democracy falls apart when the plebs realise they can vote themselves more and more benefits.

eg the socialist leaning governments of europe who borrow from china to pay for their pet project nonsense of the day.

there you go - another layer in the onion of problems.

Mon, 07/04/2011 - 09:50 | 1424025 AnAnonymous
AnAnonymous's picture

You're talking shit... as normal.

But i think what you want to say is that democracy falls apart when the plebs realise they can vote themselves more and more benefits.

 

No, useless to put words in my mouth. I meant what I meant.

State efficiency is peaking in the West, as any process, it has found its limits.

For the tale on democracy to be valuable, one has to checked validity of it.

In the US for example, 25~30 pc of the total electorate is enough to secure a position in politics.

If indeed, this is the plebs voting themselves more and more benefits in the US strained logics...

The reality is that the US world order has imposed a consumption game and that benefits are a great way to increase the volume of consumption  and deprive other competitors from opportunities of consumption. This policy, suitable in this framework, has been adopted by US governments from day one.

 

Propagandists should also cut down their own drivel, attrition is nice but hey, they are going to meet attrition like the others.

The US success was a state success as shown through examples like the homestead act, an hand out given to US citizens during the 19th, when the US was already socialist or something (according to shallow propaganda by uninspired propagandists)

Mon, 07/04/2011 - 11:53 | 1424365 gwiss
gwiss's picture

The flaw in your logic here is that your statement that the homestead act was a handout is predicated on the state automatically owning all the land, yes?  Thus inherent to your statement is the automatic presumption that the state should rightfully own all land, and will only let private individuals own land when it suits the state's purpose, and thus if it "gives" land to private owners, this must be a handout.

 

What if, instead, the state takes a minimist viewpoint, and decides that its only responsibility is to make sure that there are no clashes over who owns what, and thus its job is merely to keep a central record of who owns what in order to facilitate orderly interactions between citizens?

Wouldn't that fit with the original ethic of America?  Better than your interpretation, which is ignorant of both history as well as the philosophy behind it?

Don't spout drivel -- it makes you look stupid.

Mon, 07/04/2011 - 12:59 | 1424540 AnAnonymous
AnAnonymous's picture

What is that about?

Casting an hypothetical against reality? And I am the one who looks stupid?

 

The statement that the Homestead Act was a hand out is not based on supposed distorted view on the State (that should be predicated on the State automatically owning all the land).

It is based on what happened. Not on hypothetical function, priviledge the State supposedly has, but on what happened.

Wouldn't that fit with the original ethic of America?  Better than your interpretation, which is ignorant of both history as well as the philosophy behind it?

 

There is no interpretation from me. Projection is definitively a nasty thing for US citizens. You are the one making interpretations. I simply stated things as they are, no interpretation. I did not care to know whether or not it would fit better the US 'original ethic', whether or not the state has this or that priviledge.

The US government took land from the Indians and distributed to its citizenry. It is a hand out. Clear and simple.

Mon, 07/04/2011 - 15:28 | 1424920 gwiss
gwiss's picture

Look, I'm not necessarily arguing that the entirety of your statements are flawed.  Some of your reasoning makes sense.  But, to argue that the entire American enterprise was based on projection of state power is nonsense.  The attrition rate for settlers was very high because they were out in FRONT of state power.  There was no one there except them and the Indians -- they thrived because they existed in a power vacuum, not because they were sucking at government tit.  Sure, every once in a while the cavalry would ride through, but on a day to day basis, the settlers are the ones who displaced the Indians.  They took the land -- not the government.

 

So, if your contention is that the American experiment is an example of state power, then you are dead wrong, and in fact your view of the world will be precisely backwards.  The American experiment took a turn for the worse with the Civil War, because it was at that point that the back of state power was broken, and also at that point that balance of power was lost.  Prior to that, Federal power was weak, and growth was organic, which is the only way growth should be.  The Civil War destroyed the balance of power, and it still took 50 years for the other components of Federal power (income tax and central bank) necessary for the unrestricted growth of central government to take off.  Since then our lifestyle has been built on debt, and that process is only now finally coming to an end.

 

The Homestead act was not an example of government largess, but instead government trying to encourage people to settle a new region with a minimum of interference.

Mon, 07/04/2011 - 16:15 | 1425015 AnAnonymous
AnAnonymous's picture

The Homestead act was not an example of government largess, but instead government trying to encourage people to settle a new region with a minimum of interference.

 

Sure, sure. It wasnt. It could not be.

Could propagandists prepare better propaganda? It is like hiding genetalia behind thin air.

The US state has always been as big as it was possible to be.

 

Sure, every once in a while the cavalry would ride through, but on a day to day basis, the settlers are the ones who displaced the Indians.  They took the land -- not the government.

No. The cavalry was indeed late for one reason: the US played a two level authority game.

The US has had this song called the rule of law and the US signed treaties with the Indians.

So the Indians were caught into playing the rule of law. When settlers illegally settled on their land, the Indians reported to the state authority that kicked the ball away. It was supposedly a federal issue. Indians filing to the federal govermnent: it was supposed to be a state issue. At this point, the Indians took the matter in their hand and the cavalry was called in. But for settlers who settled illegally, it was very late compared to the time they first settled.

Your version could have charm because it would show the total disrespect US citizens had for private property rights, taking the matter in the hands.

But facts are facts: theft was done through a proxy and that proxy was the US government.

Mon, 07/04/2011 - 22:53 | 1425657 gwiss
gwiss's picture

The only way your version works is if you imagine the federal troops clearing a section of wilderness of indigini and then posting "open for business" signs followed by settlers pouring in like ants to sugar.  This ignores the process of settlers encroaching on Indian lands and lands owned by foreign governments, slowly building up a presence, and then applying increasing pressure on government to support them.  It also ignores the process of regions becoming territories and then states, which involved civilian population proaction.

 

You are conflating a persistent pattern of Federal governmental duplicity and promise breaking regarding native American treaties, which certainly existed, with central control and direction of settlement, which barely existed.  Your assertion that US governmental power has always been as strong as could possibly exist is an a priori assumption that colors your entire perspective of American history and blinds you to seeing the difference between the American government that used to exist and the American government that currently exists, which are two completely different beasts.  And, if you can't see the difference, you have no hope in hell of understanding what will inevitably happen when the whole process starts over.

Tue, 07/05/2011 - 05:53 | 1426066 AnAnonymous
AnAnonymous's picture

slowly building up a presence, and then applying increasing pressure on government to support them.

 

Once again, it does not correspond with reality.

One cause of the US war on the King is that the King did not support the settlers' efforts. The King was committed in protecting the Indians' property rights against the efforts of his own subjects.

The government direction is not a given. It can be supportive or can be not.

The US state was supportive.

Your assertion that US governmental power has always been as strong as could possibly exist is an a priori assumption that colors your entire perspective of American history and blinds you to seeing the difference between the American government that used to exist and the American government that currently exists, which are two completely different beasts. 

No, it is an observation based on collection of facts.

The US government is the same beast that has simply been growing over the years.

Tue, 07/05/2011 - 08:37 | 1426131 Sean7k
Sean7k's picture

The US government did not exist in 1763 at the time of the King's order. You have an interesting way of twisting reality. Further, your convenient misuse of time and action attaches the policies of one time (1763) to the actions of government in the early 1800's when the focus was on the Louisiana purchase. This is the timeframe the writer is referring to. 

The US, which had used land sales as a primary means of revenue, gave up this policy to settle an area it did not own or control- and were afraid would be purchased by the British or Spanish from the indians that owned it. The purchase had merely transferred New Orleans and St. Louis and the "right" to travels riverways and treaty with the indians for land. 

Mon, 07/04/2011 - 15:29 | 1424922 chumbawamba
chumbawamba's picture

Instead of these uselessly misdirected threads and the usual hand-wringing, let's now turn our attention towards a more productive pursuit:

HOW DO WE CONVINCE THE AVERAGE JOE AND MARY THAT, NO, THINGS ARE NOT GETTING BETTER AND, YES, YOU ARE FUCKED?

We need critical mass.  Casting aspersions and despising those who need help to break through is counter-productive.  We should be doing all we can at any cost to begin raising the level of awareness of the Truth amongst the "masses".  The time is now ripe; a suspicious air pervades the country.  People want to know what the fuck is going on, and they want to know now.

We need to be there to give it to them, before some charlatan like a talking head on teevee fills in for us.  The revolution is being fought here and now in the minds of people all over America and the Western world in general.  The ammunition is logic and reason.  The other side doesn't have a chance, but YOU must actively take on the fight because victory won't happen by default.

REVOLUTION IS NOT A SPECTATOR SPORT.

Lead, Follow, or GTFO!

I am Chumbawamba.

Mon, 07/04/2011 - 16:19 | 1425022 AnAnonymous
AnAnonymous's picture

REVOLUTION IS NOT A SPECTATOR SPORT.

 

What revolution?

People on this site do not want revolution. They want their position in the US secured or back. They are not against the system, they are against losing their position in the system.

It is very different. And recalling that fact is not casting aspersions.

Mon, 07/04/2011 - 17:30 | 1425123 BigDuke6
BigDuke6's picture

On this day more than others we should remember the constitution of the usa which really was written with the evil banksters in europe in mind.

To me a governments main duties are - 

to protect its people.

to protect property rights.

no need to go on as those as under threat everywhere.

i guess from your comment you don't hold others (not just here - anywhere) in high regard.  that will hold you back.... we never stop learning.

i've seen you talk good stuff in the past - whats going on in the last month? 

Mon, 07/04/2011 - 17:49 | 1425153 chumbawamba
chumbawamba's picture

Don't project onto others what you want for yourself.

Yours is option #3: GET THE FUCK OUT OF THE WAY.

I am Chumbawamba.

Mon, 07/04/2011 - 19:40 | 1425305 JW n FL
JW n FL's picture
by AnAnonymous
on Mon, 07/04/2011 - 16:19
#1425022

 

REVOLUTION IS NOT A SPECTATOR SPORT.

 

What revolution?

People on this site do not want revolution. They want their position in the US secured or back. They are not against the system, they are against losing their position in the system.

It is very different. And recalling that fact is not casting aspersions.

 

**************************************************************

 

NEVER! have truer words been spoken and or typed! God Love You!!

 

I have missed you so very much.

Mon, 07/04/2011 - 21:20 | 1425440 BigDuke6
BigDuke6's picture

You 2 boyz - our regular cop-killing che guevara's.

Yeah, we're all here working for the man... while you get pumped and post stuff... which i mostly agree with... but as the sarge says in platoon.

'Death.. what yall know about death?'

ok , i'm a bit smashed now...

Mon, 07/04/2011 - 22:38 | 1425580 JW n FL
JW n FL's picture

Duke.. I do NOT! want my fellow Brothers or Sisters Dead.. Not now! Not Later!!

But.. and there always is.. if the Police will really equates to Federal Law Enforcement not really Local.. stands in the way of "We the People" Prosecuting the Treasonous Systemic Behaviors.. then they are making themselves Modern Day Pinkerton's. I really have a very Roman view of my Fellow Americans, which is to say that I would go to War over anyone of them, over a Foreign Power causing them harm.

 

But I am getting away from the issues.. at some point "We the People" are going to wake up and look around and say "what the fuck?" have these Lobby Whores and AAA Rated Corporations done to our Country?? and that day will NOT be Pretty! but I make no, NO! Excuses or Apologies for standing with the People who are truly victims of the largest theft in History, NONE! I will not feel bad for those who stand with that kind of outright Evil.

 

So I will say this of "The Fog", "Kill'em All and Let God Sort'em out!"

 

I have to say that in all reality that the sheep are to, too stupid and far to plugged into CNBC ? CNN / and / or add other name here ___________ to Really Give A Flying Fuck About Who Robbed The WORLD BLIND! ya just cant fix stupid, no matter how hard ya try!

Mon, 07/04/2011 - 23:49 | 1425753 BigDuke6
BigDuke6's picture

I see where you are clearer now... and i respect that.

i swing between fury and abject dismay when i think of the above subject matter, which is totally correct.

Tonight of all nights i'm going to think of the good things.

Mon, 07/04/2011 - 19:23 | 1425287 CH1
CH1's picture

Ah, but the minions of the state are here to keep us wasting our time arguing Red v. Blue, or Israel v. Arab, or whatever else they can.

Don't blow time on them.

Mon, 07/04/2011 - 09:07 | 1423947 Urban Redneck
Urban Redneck's picture

It not just the western world.  Non-means-tested fuel subsidies don't even exist in the US or Europe, but they will die too as the price of energy increases.

The rise of the savior State is a product of the industrial revolution, the maximum impact of the decline savior State correlates directly to the level of development reached in an economy.

However, without low savings and current or future operating deficits, or net wealth export, there is actually no reason for the savior State to die.  The issue is that that most developed States run continuous operating deficits and are net wealth exporters, who have become functionally dependent on luxurious infrastructures not financed through their own production.

Mon, 07/04/2011 - 09:52 | 1424032 AnAnonymous
AnAnonymous's picture

The issue is that that most developed States run continuous operating deficits and are net wealth exporters, who have become functionally dependent on luxurious infrastructures not financed through their own production.

 

In Smithian economics, infrastructres are seldom financed by their own production. They are often paid by others who have to accept big losses.

Mon, 07/04/2011 - 10:15 | 1424092 Urban Redneck
Urban Redneck's picture

The financing source of the infrastructure is irrelevant to a society's practical dependence on it.  "Others" also has quiet different meanings when viewed in the context of GDP vs GNP, and Public vs Private financing.  Since classical economics pre-dates chronic daily dependence upon all but the most basic of the infrastructure upon which most societies currently depend- it does not provide an insightful perspective on the current conundrums.   

Mon, 07/04/2011 - 10:25 | 1424114 AnAnonymous
AnAnonymous's picture

It is relevant. Infrastructures in a Smithian economics context can seldom pay for themselves. Therefore it induces a dependency on something that could not have been induced through self reliance.

 

Public vs private, GDP vs GNP are irrelevant in the matter.

Mon, 07/04/2011 - 11:49 | 1424359 Urban Redneck
Urban Redneck's picture

 

Perhaps, since the article is about the US (4th of July and all) you should define exactly what infrastructure you are talking about and who the "others" are who pay for that infrastructure, or go home.

 

Mon, 07/04/2011 - 13:03 | 1424555 AnAnonymous
AnAnonymous's picture

In Smithian economics, infrastructure in general is known to cause problem. While it is straightforward that the exploitation of the infrastructure in such economical context can lead to profit, it is another story when it comes to amortization of the building costs.

The whole 19th century was riddled by events like that:

-calling for capital to build infrastructures

-companies involved in the process are pushed to bankrupcy

-infrastructure is here to stay

Eg: rail road construction.

 

And the trend has kept going everywhere Smithian economics is involved going to stuff like stadiums (financed by cities), high ways, tunnels like the Euro tunnel, the housing inventory in the US increased the very same way as infrastructures are financed in Smithian economics...

Mon, 07/04/2011 - 16:46 | 1425066 Urban Redneck
Urban Redneck's picture

I am perhaps not the most objective when it comes to the Chunnel since I know the American who bitch slapped both the surrender monkeys and wankers into line and actually got the thing built.  To the UK & French investors who took a bath in the bath in the following decade- they got they what they deserved- they privately financed infrastructure run (operated) by the State.  That is similar the the US fools who bought the Government Motors snake oil on IPO day.  In neither case is the underlying venture inherently unprofitable, but both cases demonstrate the potential cost to investors of POOR OPERATING MANAGEMENT.

Returning to the subject of US infrastructure- stadiums simply aren't infrastructure.  They are, however, cash cows for politicians and kleptocrats looking to pilfer the public's pockets. 

As to the US railroads - they were built by the original Robber Barons- whose names now adorn US Banks, Universities, and Fortune 500 companies- so I'd say they profited rather handsomely.

The single largest US infrastructure project was the US Interstate System, which was publicly financed, and despite sloppy maintenance standards in the US, has facilitated massive GDP growth over the past half century despite the high cost of trafficing goods by truck (as opposed to by rail).

In regards to other US infrastructure- ports are cash cows, public utilities (water, power, sewer) only go bankrupt because of State price controls, and the local authorities usually cave on the controls long before it gets to that point.  The fixed telcos took a bath on high speed network expansion, but are have either recovered or merged since then (however, that whole era of expansion was driven by the irrational exuberance of the original dot com bubble).  Network expansion in the wireless space has done a better job of correlating outlays to growth and amortization (which is inherently easier given the smaller footprint).  The moles and beavers works in the US are almost always profitable (except when you hire an incompetent mole for the tunnel or beaver for the dam, or more critically- allow or demand cut-rate performance during E&D).     

Regardless of what economic dogma you subscribe to INFRASTUCTURE FACILITATES ECONOMIC ACTIVITY.  Any given project is either profitable or it isn't.  When costs and profits belong to distinct parties that is a financing or political issue, not an economic issue.  For the person putting up the money it is definitely an investment issue and possibly and economic one- but they are different and unique perspectives into the same project.

I finance, supply, and build infrastructure in various capacities in a number of developing and undeveloped economies- I always know going into a project whether the venture will or won't be profitable and for whom, baring extraordinary events.  Anyone who is experienced and competent in the business knows this.  It comes down to identifying what you know, and more importantly what you don't know, what you can control, and more importantly what you can't control, and planning accordingly.  I take more of a BSD than quantitative approach to risk management, but either can work with experience- it isn't rocket science, the engineers do that.  The developed economies are even easier to profit in. 

Tue, 07/05/2011 - 06:01 | 1426072 AnAnonymous
AnAnonymous's picture

As to the US railroads - they were built by the original Robber Barons- whose names now adorn US Banks, Universities, and Fortune 500 companies- so I'd say they profited rather handsomely.

 

Are US citizens in love with battling wind mills?

I stated earlier in previous posts that in Smithian economics infractures exploitation is profitable and the question was to see if they could pay themselves.

Why come with an example showing that exploitation of infrastructures is profitable, once one had not to foot the bill of the construction cost?

Mon, 07/04/2011 - 12:05 | 1424392 Stuck on Zero
Stuck on Zero's picture

Dozens of economic studies have shown that infrastructure investments are revenue neutral for a state - but wealth building for the public.  This goes for dams, railroads, highways, ports, pipelines, aqueducts, pure R&D etc.  We're in a situation now where the national wealth is not going to infrastructure but to follies: F35s, bankers, wars, handouts, and special interests. For the price of our MidEast follies we could have abundant cheap energy today. 

Mon, 07/04/2011 - 13:08 | 1424572 AnAnonymous
AnAnonymous's picture

Dozens of economic studies have shown that infrastructure investments are revenue neutral for a state - but wealth building for the public.  This goes for dams, railroads, highways, ports, pipelines, aqueducts, pure R&D etc. 

 

You dont need dozens of studies for something that was stated as part of the general framework as it was done by Smith.

The question is not whether or not the infrastructure exploitation is going to be profitable (it is on a short term) but to know if the infrastructure pays for itself.

It usually does not. And building infrastructures has been performed with some entity footing the cost of building.

Same story from the rail road construction in the US to the Eurotunnel stuff in Europe.

Mon, 07/04/2011 - 17:13 | 1425099 Stuck on Zero
Stuck on Zero's picture

In 1933 construction commenced on the Golden gate bridge.  By 1971 it was paid off and the bond holders did well.  Now it is paid off many times over.  The only time that infrastructure investments don't pay off is when they are pork, ill-conceived, or created in an era when financial shenanigans earns more money than solid investments.  Right now there are thousands of infrastructure projects begging for funding.  All would be covered by our war costs.  The history of successful nations is a history of infrastructure building, China, Japan, Korea, U.S., Great Britain, France, and Germany are examples.   When a nation stops investing in infrastructure it inevitably collapses (no pun intended). 

Tue, 07/05/2011 - 06:05 | 1426074 AnAnonymous
AnAnonymous's picture

The history of successful nations is a history of infrastructure building, China, Japan, Korea, U.S., Great Britain, France, and Germany are examples.

 

All these nations are known to apply the recipe told earlier. Like getting the high ways network construction costs absorbed by the public and let private parties pocket the profits due to exploitation.

Euro tunnel, rings a bell?

And no, infrastructure building construction costs is a known issue in Smithian economics.

Mon, 07/04/2011 - 13:06 | 1424570 Silver Shield
Mon, 07/04/2011 - 09:43 | 1424010 i-dog
i-dog's picture

"Now it has peaked here, it is all about preventing others from benefiting from the State."

Arrant gibberish. Troll.

Mon, 07/04/2011 - 09:57 | 1424044 AnAnonymous
AnAnonymous's picture

No gibberish.

US world order is dominated by gang mentality. Gangs do not oppose something on principles, they oppose others benefiting from something.

Gangs do not oppose drugs trafficking. They oppose others making money from drug trafficking.

Similarly, US citizens do not oppose the State for itself (the State has been highly benefitial to US citizens and they were lining up to be recipients in events like the Homestead Act) They oppose the State because it has met its maximal efficiency for them, that the drawbacks associated to the State start to outweight dramatically the advantages and because others are in a much better position to benefit from the State.

The list is long: the US do not oppose nuclear weaponry and the use of. The US oppose others having nuclear weaponry and using it etc

Old saying: the last in closes the door. Suits the US world order.

Mon, 07/04/2011 - 11:02 | 1424216 Oh regional Indian
Oh regional Indian's picture

Not sure why you are getting so much pushback. It's true.

In every country, you can see the trend is similar. Dynastic governments (Thailand anyone???) that relentlessly work to push more and more of their citizenry into the bottom of the pyramid with a waterproof control layer of police/judiciary/military to keep them there.

All leading to top-heaviness strangely enough and thus the coming crash.

ORI

http://aadivaahan.wordpress.com/2011/06/28/thoughts-and-a-heads-up/

Mon, 07/04/2011 - 12:49 | 1424507 Urban Redneck
Urban Redneck's picture

Thaksin was scraping the bottom of the options barrel before he resorted to the dynastic approach- but he has always relied on pushing more and more of their citizenry into the bottom of the pyramid, or at least making sure the wealth pyramid was an ever-increasing inversion of the social pyramid, but since it is sold with a pitch of more handouts, it works when the opposition can't deliver.  The sixty-four billion baht question though is can he pull off a pardon and survive an extended return to Thailand to collect... since the entire public side of politics is Thailand is never anything more than the Junta members rearranging pawns on the chess board.  Paranoid Americans, overconfident in their in ability to identify the members of the TPTB, would have a psychedelic experience with the inner-workings of that set of Powers.

Mon, 07/04/2011 - 11:15 | 1424259 three chord sloth
three chord sloth's picture

The West is not "at peak state"... it passed that point decades ago. We have been hemorrhaging both money and moral authority since at least the late-'60s, when nearly the entirety of the West overshot The Sustainable State.

Mon, 07/04/2011 - 12:14 | 1424411 CH1
Mon, 07/04/2011 - 11:17 | 1424264 CH1
CH1's picture

The state was a scam from its beginnings. It is merely rigid-mindedness that keeps people believing in it.

Imagine: They take your money, order you around, kill you or lock you in cages if you disobey... and they expect you to call them sacred.

Yeah, it really is that nuts.

Mon, 07/04/2011 - 07:56 | 1423809 I am Jobe
I am Jobe's picture

Lets not forget who set the standard that is adopted in the USA.

Long Live Joseph Goebbels

Mon, 07/04/2011 - 11:06 | 1424233 Oh regional Indian
Oh regional Indian's picture

In the current scenario, I'd call him Gobbles.

Somehow the US and gobbling seem to go together. 

ORI

http://aadivaahan.wordpress.com/2011/06/30/desiderata/

Mon, 07/04/2011 - 08:01 | 1423815 ArkansasAngie
ArkansasAngie's picture

And it is our duty to stop this insanity.

You do this by unelecting Washington ... the system's protectors.

 

Mon, 07/04/2011 - 09:40 | 1424000 B9K9
B9K9's picture

LOL. Rightttt.

Charles, nice analysis; however, I believe you should consider yet one more dynamic. Or, to quote Ovid:

“Treason doth never prosper, what is the reason? For if it doth prosper, none dare call it treason. ”

IOW, there's money to be made in treason. Remember that classic line from 'The Graduate'?

Mr. McGuire: I just want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.
Benjamin: Exactly how do you mean?

The point I'm trying to make is there are always opportunities, whether it was Hollywood in the 20s, aerospace in the 50s, or high-tech in the 90s. Guess what the opportunity is today?

I learned early in my career that whenever I had what I thought was a good idea, 20 others had thought of it as well, while 5 had already launched companies. In reference to your insights, while thoughtful, we can assume a host of others share them. But more importantly, we should expect there those way ahead of the curve who not only recognize what is happening, but realize that gunning this system into the ground is the biggest opportunity of the 10s & 20s.

Once you understand the peak oil issue is not shortages, but rather flat production, that spells doom to the perpetual growth ponzi, then you have a couple of options: think about it, complain about it (ZH provides an excellent platform), or do something about it.

The best & brighest, who have the levers of our government & economy in their hands, have decided to do something about it. If you know the sucker is going down, wouldn't it behoove you to grab as much loot as possible?

That's what we're up against - it's not just a passive, 'how come no one will provide solutions'; rather, these are active, open acts of treason.

Mon, 07/04/2011 - 08:02 | 1423819 yabyum
yabyum's picture

Cheap energy via petrochemicals are gone. We are now fighting for the scraps, time3 to rent the road warrior flicks again.

Mon, 07/04/2011 - 10:36 | 1424141 trav7777
trav7777's picture

I would counsel ANYONE who is talking about the irrelevance of "paper claims against nature," as CHS just did, to never, ever put the adjective "cheap" in front of energy.

His mind is caught in the same paper box as everyone else's.  Perhaps he's too scared of what PO means, so he must unconsciously self-affirm with this caveat of "cheap," as if there will still be plenty of surplus energy, growing supplies, just at higher "prices."

There won't be.  The barrels don't care how much we charge for them.  Nature gives not a shit about our value systems.

There is no such thing as cheap oil.

Mon, 07/04/2011 - 08:04 | 1423820 Poor Grogman
Poor Grogman's picture

The collapse will be more rapid this time, more leverage more dependence, faster transmission times and less of an organic economy. With any luck we can get the whole collapse thingo done and dusted, over the Christmas holidays and start a new economic system after the turmoil in the new year....

Mon, 07/04/2011 - 10:37 | 1424144 trav7777
trav7777's picture

it won't make a difference when you wilfully ignore the cause of the collapse.

Mon, 07/04/2011 - 08:10 | 1423832 BlackVoid
BlackVoid's picture

Tainter's book is a must read for anyone who is interested in the big picture.

You will understand then, that collapse is INEVITABLE, unless a new energy source is discovered that is at least as good as oil.

The issue is not just Peak Oil, it is a broad spectrum problem: diminishing returns in everything.

Mon, 07/04/2011 - 08:35 | 1423867 Bicycle Repairman
Bicycle Repairman's picture

"that collapse is INEVITABLE"

No doubt, but a slow collapse over several generations will hardly seem like a collapse.

Mon, 07/04/2011 - 11:40 | 1424331 knowless
knowless's picture

we've been in a slow collapse for nearly 40 years..

Mon, 07/04/2011 - 08:38 | 1423879 Rynak
Rynak's picture

Or unless efficiency is increased, consumption reduced, and energy sources found that are just half as good as oil.

Mon, 07/04/2011 - 10:43 | 1424155 trav7777
trav7777's picture

ROTFL...did you fail to understand what you are replying to?

Diminishing returns are present in everything.  Look at Moore's Law and the cost to decrease the half-pitch to the next node.  And for what performance benefit?

Individual cores aren't significantly faster than 4 years ago despite huge increases in investment cost, time, materials, energy.  They have already bumped up against the limit of what the fundamental material can do (silicon).

Sure, there are doped diamond wafers coming and "nanotechnology," but will the cost of these things in time, energy, etc., be expected to be LOWER?  No; otherwise, they'd have been used all these years instead of the Si semiconductors.

Increased efficiency never lowers aggregate consumption.  A decrease in consumption WILL occur because there will be a decrease in supply.  You make it sound as if this is a salvation outcome when it is merely an inevitable consequence.  Half as good as oil?  Oil schmoil...oil was special for its energy density but primarily its SUPPLY RATE.

Power matters, not energy.

Mon, 07/04/2011 - 11:50 | 1424343 Rynak
Rynak's picture

How typically smallminded....... Rynak mentions once again, that the equation consists of energy production, efficiency and demand.... instead of just energy production.....  and the furthest leap humans are capable to make, is to consider  *ENERGY production efficiency*....

Bleh, no wonder humans are fucked when their average FOV has the diameter of a laser beam.

When have you been outside your 4 walls the last time, and took a look at civilization?

Here's a hint: Your precious "supply rate", is the LEAST important of all, because some variables in the above equation, involve infinity..... and you'll never win against that, no matter the supply. Heck, even if you'd get nuclear fusion to work tomorrow, it in the midterm wouldn't change anything at all.

Mon, 07/04/2011 - 13:25 | 1424610 IAmNotMark
IAmNotMark's picture

Umm...sorry.  You are wrong.

If diminishing returns are present in everything then why is my cellphone so amazing?

I've been working with computers since punchcards and each year is more amazing than the last.  If you think things are slowing down you should try to learn a little more.  And spout a little less.

Mon, 07/04/2011 - 21:54 | 1425479 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

If diminishing returns are present in everything then why is my cellphone so amazing?

thanks for the chuckles. i think i pooped a little.

your cellphone is "amazing" because the telco-opolies are satisfying the requisites of a power establishment desperate to keep the sheeple's minds isolated, and in a bubble of self-selected media and digital friendship bubbles so that they won't look at the real world and realize how dire the situation is.

Tue, 07/05/2011 - 00:14 | 1425792 IAmNotMark
IAmNotMark's picture

Man...I guess I'm just not that deep.  My cellphone is "amazing" because it includes computer functionality,internet access, and GPS.  I first used GPS in the Navy in the 80's and was "amazed" at what GPS could do, and for only $40,000 a unit.  Now it's in my cell phone.  Pretty cool. 

And the telco-opolies are doing this on purpose?  To keep the sheeple's mind's isolated, in a bubble of self-selected media and digital friendship bubbles?  So they won't look at the real world and realize how dire the situation is?  Is that what cellphones are for?  Wow!  Who'd have thunk!

I understand the mindless evil of soulless corporations.  I didn't think they'd stoop to GPS on my cellphone though.  I guess they're trying to keep my mind isolated in a bubble of self-selected media.

Tue, 07/05/2011 - 05:03 | 1426044 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

Wow!

How unpredictable!

You missed my point and continued to live your stupid human existence in your stupid naive bubble!

Unprecedented!

Mon, 07/04/2011 - 09:33 | 1423986 IAmNotMark
IAmNotMark's picture

"Unless a new energy source is discovered that is at least as good as oil".

Go outside.  Look up.  There's a power source.  No.  There is THE power source.

We just haven't gotten smart enough and hungry enough to use it right (to replace oil).  But we will.  Because we have to.

Unless TPTB can stop it.  Or we kill ourselves.

Look at Daniel Nocera's work at MIT as an example.  His work would change the energy equation completely.  Energy would be clean, cheap, and almost limitless.

 

Mon, 07/04/2011 - 10:51 | 1424179 trav7777
trav7777's picture

wow...technocornucopian bullshit.

We're just not trying hard enough?  LOL.

A lot of people around this board are confused.  They think we used oil for dumbshit reasons or whatever.

Many even believe it has the highest EROI or something.  It doesn't.

The EROI is HIGHER from coal and human power!  YES.  EROI is HIGHER for human and horse powered shit than oil.

EROI really doesn't matter either!  What matters is POWER.  RATE.  Oil could be produced at a high EROI rate, a higher rate of aggregate surplus output than coal.

Power is why certain rivers are dammed and others not.  The Mississippi carries 10x the water at least versus the Colorado, yet the Colorado has the dams producing the electricity.  Ditto with the Columbia river.  GC Dam on that latter river produces 6.8GW, the entire Miss River produces perhaps 150.

It isn't about volume, it's about rate- POWER.

Mon, 07/04/2011 - 11:59 | 1424379 InconvenientCou...
InconvenientCounterParty's picture

Breakthrough battery technology can overcome the power density problems with solar, wind, tidal energy. Obviously, there is some work to do there. My money is on hydrogen chemistry at the moment.

It's imperative to replace the use of gasoline for personal transportation. Take a way consumption from personal transportation and things start looking a lot better 20-50 years down the road.

That said, it would probably take some collective thinking/effort. The Libertarian solution is the path of least resistance i.e. getting rid of superfluous humans. I suppose either would work.

Mon, 07/04/2011 - 13:18 | 1424589 IAmNotMark
IAmNotMark's picture

Wow…a self-righteous, smarter-than-thou, holier-than-thou, pompous  asshole.

I didn’t say we’re not trying hard enough.  I said we’re not smart enough yet.  And you prove my point. 

I understood everything that you said.  I don’t think you gave my thought any consideration. 

technocornucopian bullshit?  Wow.  Great statement.  Did you come up with that yourself or did you hear it in a poetry reading?

Mon, 07/04/2011 - 21:56 | 1425492 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

You really got to this technocornucopian fag here, trav.

Look how much he protests!

Mon, 07/04/2011 - 08:27 | 1423833 Ghordius
Ghordius's picture

Uhhh... Roman Empire? Really?

I wonder how people can squeeze the history of a thousand years in a few words...

If the USA were really something like the Roman Empire then the European Allies would receive US Citizenship by now?

At least the Romans had lots of orgies...

-----

WAKE UP! If you really want to compare yourself to the Roman Empire then read the history correctly: there were several times everybody in Republican Rome thought they were fucked. At one time half the male population was dead on battlefields and the invader's army was still rampaging trough Italy. And that was early in Rome's history. There is nothing that a few decades of hard work can't fix with the USofA. Sure, it would mean sacrificing some of the sweet soft comforts.

Happy Independence Day

Mon, 07/04/2011 - 08:28 | 1423855 DKR
DKR's picture

+1 to that. Historic shortcuts should be very carefully negociated. RE/ citizenship, though, it is no longer necessary to motivate colonies by flattery, nor the panem & circenses tool is predominant anymore, nor the great Big Brother 1984 fantasy. The surveillance of decerebrated sheep is not cost effectiv.

Mon, 07/04/2011 - 08:41 | 1423882 Popo
Popo's picture

> "At least the Romans had lots of orgies..."

 

 

So... you haven't been getting invited to the orgies?

Mon, 07/04/2011 - 10:10 | 1424078 Ghordius
Ghordius's picture

NO! I had to organize and pay FOR EACH ONE I ATTENDED! Meanwhile O'Reilly suggests that in the US I would just have to attend university to get invited to something every night...

Mon, 07/04/2011 - 08:56 | 1423922 ReactionToClose...
ReactionToClosedMinds's picture

Largely agree with you Gordo .... 'Rome' is an overwrought & overused analogy.

A classsic most are too lazy to read is Thuuclydides The Peloponesian War. More modern and directly relevant to current circumstances is Joseph Schumpeter's masterpiece Democracy Capitalism and Socialism. But many want to read trendy current 'bestsellers' that often cannot bear the weight of time for weak or useless pointed argumentation. Many deeper & brighter minds have already addressed much of this. The 'facts and circumstances' of the USofA may be 'new' but the essential issues involved are as old as recorded history and humanity's supposed 'rise to rationality'.

Mon, 07/04/2011 - 10:07 | 1424073 AnAnonymous
AnAnonymous's picture

there were several times everybody in Republican Rome thought they were fucked.

 

It does not change the fact that somewhere, some time, they were right to think they were fucked as shown by their history.

Rome was built on various ponzis and it is only when the Ponzis mature than the question of maintaining the system. Expansion is not an issue when you have space to expand. Expansion and the sustainability of the system associated with it are another story when there is no room left to expand.

There is nothing that a few decades of hard work can't fix with the USofA. Sure, it would mean sacrificing some of the sweet soft comforts.

 

Cheap propaganda. Labour is a drain on resources. To enable hard work, one needs the resources to support hard work. Hard work needs large input.

Work is consumption. It is not forcefully something that self perpetuate itself. A baker, no matter how hard worker he is, cant bake bread without the adequate inputs.

Not many Indians these days to support US hard work way of doing this.

During a day, a guy might work 10 hours, entertain himself at home for two hours and the rest sleep.

Issue: this guy might consume more on his work place during one hour, than he consumes during one hour through house entertainment.

Less consumption does not mean working longer hours, it means less activity, less opportunity to support work and it means working 6 hours while staying idle for six (less entertainment)

This is what less consumption means.

Mon, 07/04/2011 - 11:00 | 1424203 Ghordius
Ghordius's picture

I'm sorry, I don't get your argument regarding resources. Yes, bread needs always the same amount of flour, water, etc.
Other things can be done differently, with a better regard to limited resources. Which, when resource prices rise, then makes also economic sense.

I'll make an example: I paid for gas, in the last twenty years, at least five times more (per unit) than a comparable US resident. This made my life, in the last twenty years, different than what it would have been in the US. Not better, not worse, different.

It's not propaganda. Necessity drives invention. No necessity, no invention.

Mon, 07/04/2011 - 11:48 | 1424355 AnAnonymous
AnAnonymous's picture

It's not propaganda. Necessity drives invention. No necessity, no invention.

 

No. People do not invent stuff because they need them. They invent stuff and find uses for them, especially in this US world order with stuff like marketing.

Yes, bread needs always the same amount of flour, water, etc.

 

If you go that way, a hard working baker needs to consume large amounts of flour, water etc to enable hard work. If he receives no inputs, he can not work hard. Only pretend he is working hard.

Mon, 07/04/2011 - 12:23 | 1424441 Uncle Remus
Uncle Remus's picture

If he receives no inputs, he can not work hard. Only pretend he is working hard.

 

The pretend to pay us, we pretend to work. - Soviet Russian joke.

Mon, 07/04/2011 - 11:01 | 1424209 DKR
DKR's picture

. Expansion is not an issue when you have space to expand. Expansion and the sustainability of the system associated with it are another story when there is no room left to expand.

 

 

this statement is not correct. whenever critical mass is reached, expansion processes are facing issues that vary according to their specifics.

Mon, 07/04/2011 - 11:40 | 1424330 AnAnonymous
AnAnonymous's picture

What critical masses? What issues?

Mon, 07/04/2011 - 08:11 | 1423835 BlackVoid
BlackVoid's picture

And no, the East will not rise on the ashes of the west. The same problems apply to them. Collapse will be global.

Tainter also defines collapse: a rapid fall in complexity (the reduction in the number of social roles).

Mon, 07/04/2011 - 08:15 | 1423838 JW n FL
JW n FL's picture

This long winded, wanna be explanation leaves out what we have a stagnate world economy and why America lacks the tax base to support itself.

 

1. http://www.youtube.com/watch?v=wYuLjGQQ-jg there is not enough energy to go around, LET ME REALLY DUMB IT DOWN!! There is not enough cheap Energy to go around. It is not that we are out of oil, the problem is that we have Peaked in Global Production of Lite Sweet Crude. Thusly energy now costs $200bbl a barrel.

 

2. http://blogs.forbes.com/beltway/2011/02/14/intelligence-community-fears-u-s-manufacturing-decline/ 50,000 jobs a month since the year 2000.. have been moved off shore and to china.. and we Paid Corporations to Undermine the Tax Base??????????????????? We Paid Corporations to Undermine our own work force????????????????? This was good for America how?

 

So, all of the long drawn out explanations are sale tools. Now that you know what the problems are you can continue to sit on your ass and do exactly nothing about fixing them.

Mon, 07/04/2011 - 09:03 | 1423939 PPagan
PPagan's picture

Thanks for this bit of clarity.

I would add:

3. The most massive Wealth Transfer since the Roman Empire (or at least, very big). By this I mean the successful Class Warfare run by the Hyper Rich; the Right Wing's cynical and hypocritical reversal of these terms I find beneath contempt.

The use of the terms "Savior State" or "Nanny State" indicates the user has swallowed a propaganda meme. Undoubtedly the entitlement programs need to be reorganized, as does the hugely corrupt military/industrilal complex, but to blame social collapse on the impulse of government to help the least fortunate in society and counter the amoral depredations of Mega-Corporate "people", is, to use a psychiatric term, nuts.

Greed, arrogance, and the lust for power destroy a state; compassion, clarity, and authenticity would, if available, restore it. If only....

Mon, 07/04/2011 - 09:26 | 1423979 Urban Redneck
Urban Redneck's picture

It has nothing to do with the impulse of government to help the least fortunate in society, it has everything to do with the impulse of government to spend more wealth than is created annually and to export wealth overseas. 

The NANNY STATE is a manifestationof the greed, arrogance, and the lust for power by a bunch of non-producing statists who reside in ivory towers and think the laws of nature do not apply to them and they can print money and spend other's wealth with no consequences. 

"Class Warfare run by the Hyper Rich; the Right Wing's..."  should read

"Class Warfare run by the Hyper Statists and Aspiring Statists; the Left Wing's..." 

If you are going to drag partisan politics into it, at least get some facts straight, and look in the mirror- since you are advocating that the State (and hence- state spending) is an appropriate solution to an issue.

Mon, 07/04/2011 - 10:10 | 1424079 AnAnonymous
AnAnonymous's picture

 it has everything to do with the impulse of government to spend more wealth than is created annually and to export wealth overseas. 

 

Wealth is exported overseas? By whom?

The US world order economic system is like a  digestive apparatus with inputs and outputs. Outputs are not wealth.

Mon, 07/04/2011 - 10:23 | 1424109 Urban Redneck
Urban Redneck's picture

Everyone. 

     Oil Consumers.

     WalMart Shoppers.

     Outsourcers.

     Regulators.

     Banks.

I never said outputs are wealth.  Your are implying something linked to your own artificial and faulty construct of the functioning of the US economy. 

Mon, 07/04/2011 - 10:30 | 1424126 AnAnonymous
AnAnonymous's picture

Walmart shoppers do not export wealth. The others probably dont in most cases.

Currently, the US (plus Europe and Japan) are living off the Ponzi fiat currency scheme.

The US imports wealth against exportation of USD. The USD allows receivers to buy wealth from themselves or from other countries caught in the USD reserve currency paradigm. No exportation of wealth other than an allowance to trade with a third party.

The US imports finished goods from China that receive USD. With those USD, Chinese can buy gold from Ghana or oil from Russia.

The US exports no wealth on this scheme, only concentrates wealth on its territory while maintaining the others into an organization that enables the whole scheme.

This is a US world order. The center is the US and the periphery sustains the US.

Mon, 07/04/2011 - 11:42 | 1424333 Urban Redneck
Urban Redneck's picture

Your world view is very naive.  The US exports wealth every day and digs itself deeper into debt.  First it was a fiat recycling scheme for cheap energy after the OPEC embargo, then the means of production traded away in an effort to keep debt cost down (much like Greece today), along the way a steady stream of American blood wealth has been expended.  The US is not the center of the world, and it is selling its soul and wealth every day to a litanyof devils in a desperate attempt to preserve the appearance of the status quo.   

Mon, 07/04/2011 - 13:13 | 1424580 AnAnonymous
AnAnonymous's picture

Your world view is very naive.  The US exports wealth every day and digs itself deeper into debt. 

 

My world view is as naive as basic accounting allows it to be.

So when somebody puts himself into debt, that somebody is not exporting wealth, he is importing wealth.

When somebody has bought a house, three cars, a flat screen and much more on debt, that somebody has not exported wealth every day of his life but has imported wealth.

US citizens are so deep in their propaganda they think they can cover the most obvious facts that exist with extremely small efforts.

Mon, 07/04/2011 - 13:44 | 1424673 nmewn
nmewn's picture

"So when somebody puts himself into debt, that somebody is not exporting wealth, he is importing wealth."

So everyone should quit worrying about Greece.

Got it.

Mon, 07/04/2011 - 14:41 | 1424822 JW n FL
JW n FL's picture

you are smarter than that.. dont play dumb to fit in..

 

the wealth that the U.S. has exported is tech, manufacturing and the jobs / brain drain to go with.. dollars? I guess we could argue that dollars equal wealth but only as long as "We the Sheepeople" believe the Emperor has clothes that need to be pressed.

Mon, 07/04/2011 - 18:47 | 1425239 nmewn
nmewn's picture

"you are smarter than that.. dont play dumb to fit in.."

Don't fucking patronize me boy.

The potential wealth that was exported was manufacturing. You were told up front what they were doing. It was to be a "new economy", a service based economy, recessions were a thing of the past...blah blah fucking blah.

Now the meme is a "green economy"...more horseshit from the finest purveyors of horseshit on the planet.

These are some of the same ones;

http://www.telegraph.co.uk/comment/columnists/christopherbooker/8612716/Proof-that-the-Government-is-tilting-at-windmills.html

Idealogical zealots, crony capitalists and economic half wits. Don't come crying to those who said it was all absolute bullshit and would fail spectaularly.

That large sucking sound you hear is getting louder ain't it?

Mon, 07/04/2011 - 22:53 | 1425658 JW n FL
JW n FL's picture

I am sorry we dont allow those "Sucking" sounds in my neighborhood (any of them).

 

I dont think those matching funds into "Green" (dollar for dollar, unless you tie into Government V/C monies which are matching once again but caped to 10% returns. Unless you are a sucker and you let a group of esquires structure for you and they leverage the Government Funds as Equity Participation on their side, which is what happens more often than not.)

 

any way.. the green push is for power, Sir.. not for bubble.. although I will openly admit if they can balloon a used car they would.. so, skip that argument, save your energy for something worthy. We are out of Lite Sweet Crude or we are more accurately running out of proven reserves. Given the we lack (FUCKING COMPLETELY) the ability to refine sour / heavy crude (10% and I am being nice, very nice saying 10% it was 7% - 8% that last time I really checked. but its been a while.). Our ability to provide for ourselves going forward will be affected directly by our ability to provide for ourselves. The one investment that the Stupid Government is actually making into the Country is Matching Funds for Power Production.

 

So.. I just have a hard time thinking that you dont already know this stuff.. so thanks for the spring board!

Tue, 07/05/2011 - 07:02 | 1426113 nmewn
nmewn's picture

"I am sorry we dont allow those "Sucking" sounds in my neighborhood (any of them)."

;-)

That reference (the sucking sound) of course, goes back to Ross Perot who predicted exactly what would happen to American jobs, thus our potential wealth, should we follow the advice of Wall Street crony's assuming positions of power within our government and the pampered pooches of academia.

//////////////////////////////////////////////////////////////////////////////////////

I'm putting in a place holder here for this evening because we need to discuss the rest in depth...gotta get ready for work...

Tue, 07/05/2011 - 11:28 | 1426563 JW n FL
JW n FL's picture

I am here for you Brother.. lets hope sooner than later that is more than hot air that moves these Treasonous Scum! but happy to chat, I will not have as much fun with you as with my fishing expeditions.. but thats only because I like you and agree with a very, very large segment of your logic. I would be hard pressed to find something to bitch about, but I will grab hold of nothing and run with it! like a sheep with a bell!!

Tue, 07/05/2011 - 20:44 | 1428234 nmewn
nmewn's picture

Ok, thanks for the break...time is a commodity I find myself short of many times.

Lets get this out of the way first. We are both Natives, Florida boys. We know what its like to live in a state like this and share our love and desire for it to not be f'd up enviromentally anymore than it is already, asphalt, condos etc...you know the drill.

Now...

"any way.. the green push is for power, Sir.. not for bubble.."

I understand you think and believe that, but we're dealing with people, all kinds of people, there are some who are altruistic and others who are just in it for the ObamaBucks, its human nature.

"although I will openly admit if they can balloon a used car they would.. so, skip that argument, save your energy for something worthy."

Noted, but it is a large problem whenever government subsidies are involved...and when to withdraw the subsidy seems to never come.

"We are out of Lite Sweet Crude or we are more accurately running out of proven reserves."

Exactly. Proven reserves.

"Given the we lack (FUCKING COMPLETELY) the ability to refine sour / heavy crude (10% and I am being nice, very nice saying 10% it was 7% - 8% that last time I really checked. but its been a while.). Our ability to provide for ourselves going forward will be affected directly by our ability to provide for ourselves."

Its not that we can't, its that we don't. They do it in Venezuela, after Hugo stole the refineries...most of theirs is sour. But I'll defer to you on that point, you seem more up to speed on the oil biz.

"The one investment that the Stupid Government is actually making into the Country is Matching Funds for Power Production."

We're broke, the taxpayers are tapped out. Only half the country pays any taxes at all. But if you're talking about "liability insurance" on nuke plants, then yes.

My thing has always been that oil/gas should be for private transportation not power plant operation. And as we hover around 100 oil, coal gasification becomes an economical option. And we have plenty of that.

I don't have a problem with self sustaining, economically viable "green energy". I'm sick of the "green marketing" though.

Thanks for holding line open.

Mon, 07/04/2011 - 16:22 | 1425028 AnAnonymous
AnAnonymous's picture

The worries in Greece come from the possibility they are no longer allowed in a debt scheme. Which would cease their possibility to import wealth.

Not that difficult to  understand but US citizens are duplicitous and denial of the obvious is natural to them.

Mon, 07/04/2011 - 18:58 | 1425248 nmewn
nmewn's picture

The US has squat to do with Greek debt problems. Its your baby euro queen, enjoy ;-)

Tue, 07/05/2011 - 06:11 | 1426078 AnAnonymous
AnAnonymous's picture

The US has squat to do with Greek debt problems. Its your baby euro queen, enjoy ;-)

 

Waoooo... One guy stating that one peculiarity of human species was the possibility to hold two contrary thoughts at once. This guy was a US citizen of course. But this applies with no doubt to U S citizens.

So because I acknowledged good King Georges the Third worked to enforce liberty and property rights, contrary to the soon to become US, I was deemed to be an english.

Now that I recalled that the Greek debt issue is the removal of the possibility of going even deeper into debt, I somehow support the Euro scheme or something.

Wonderful world.

The US is not the solution. The US is the problem.

Tue, 07/05/2011 - 20:48 | 1428241 nmewn
nmewn's picture

The US is coming to rape your women and eat your babies bwahahahahaha!!!

Mon, 07/04/2011 - 15:25 | 1424914 Urban Redneck
Urban Redneck's picture

You are equating wealth with cars and flat screen TVs?  That is classic propaganda. 

When Americans fill their imported cars with imported fuel they directly the Saudi Government, which turns around and recycles the incoming petro dollars into something tangible like the purchase the purchase GE Plastics from Jeff IBanker by SABIC.  While the S&P was dancing around 666 there was some serious wealth developing some serious shopping lists, and when uncle Sam is bent over a barrel and begging for more, the offer he can't refuse is an easy sell.  That is the ONE reason I don't fault the FED to manipulating the equity markets higher on non-existent volume. 

When Americans patronize WalMart or any similar institution they export wealth by feeding a supply chain which provides jobs and infrastructure overseas extracting raw materials, which are transported to overseas manufacturing facilities, where overseas employees create finished products on a large enough scale and at a low enough price to meet the demands of price and competition sensitive American distributors and consumers.  All this overseas economic activity creates wealth overseas instead of in the US, it finances overseas infrastructure development, creates overseas jobs, tax revenues, tangible assets, and currency reserves which get traded back to the host country (US) to acquire other US assets (wealth) with some utterly worthless fiat derivatives thrown in for good measure. 

Jeff Ibanker (who has the rather unique position of being an outsourcer, banker, and regulator all rolled into one) not only exports wealth when he sells of GE Advanced Plastics/Materials.  He compounds the crime by outsourcing first call centers, then operational white collar jobs- in the process laying off Americans while creating jobs, infrastructure, and tax revenues in India.  While he is doing this is seeks US taxpayer subsidies for both his TBTF banking unit and its fiat frankenstein balance sheet as well as his "green manufacturing" units which conveniently create more jobs, infrastructure, and tax revenues in his overseas havens where is free to act free of the regulatory barriers to entry he has helped to craft in the US, eliminating domestic competition and wealth creation in the process.    

Mon, 07/04/2011 - 16:31 | 1425045 AnAnonymous
AnAnonymous's picture

a supply chain which provides jobs and infrastructure overseas extracting raw materials, which are transported to overseas manufacturing facilities, where overseas employees create finished products on a large enough scale and at a low enough price to meet the demands of price and competition sensitive American distributors and consumers.  All this overseas economic activity creates wealth overseas instead of in the US, it finances overseas infrastructure development, creates overseas jobs, tax revenues, tangible assets, and currency reserves which get traded back to the host country (US) to acquire other US assets (wealth) with some utterly worthless fiat derivatives thrown in for good measure. 

 

You sumed up the US world order, an organization set to allow the US level of consumption.

The end goal is still what it is, allowing the maximal importation of wealth to the US. Production is consumption and is not possible to produce without consuming. In a chain leading to a finished good, these are compulsory steps.

It is like bitching against the fact that farmers have grains to sow while the crop is directed to the castle.

When Americans fill their imported cars with imported fuel they directly the Saudi Government, which turns around and recycles the incoming petro dollars into something tangible like the purchase the purchase GE Plastics from Jeff IBanker by SABIC. 

 

This is very interesting because up to 9,11, this part of the world was caught in a perverse scheme. Their recycling of the USD in the US economy only fueled more activity in the US, therefore more consumption from the US. The more they supported the US, the faster they were consumed by the US.

Again no exportation of wealth here, only importation.

So what now? I followed the area and I noticed they have to make under deals, or acceptance deals.

Like investing massively in football teams, building stadiums and stuff like before being allowed in more potentially profitable deals. Again, no exportation of wealth.

Not only, these guys have to sell their wealth against paper money but  they are now forced into recycling that paper money on activity like buying football players for the entertainment of people in the West.

 

Mon, 07/04/2011 - 17:36 | 1425130 Urban Redneck
Urban Redneck's picture

Your understanding of economics leaves a lot to be desired.

Your understanding of the physical world we live in is downright pathetic and flat out wrong-

"This is very interesting because up to 9,11, this part of the world was caught in a perverse scheme. Their recycling of the USD in the US economy only fueled more activity in the US"

AND THESSINGER'S ARABIA STILL EXISTED ON SEPTEMBER 10, 2001.  Go back to your troll cave.  My Arab buddies will be along soon enough- those private Airbuses don't actually exist, so there are some imported "help" from the subcontinent outfitting dhows with diesel motors to transport back the next round of wealth (but don't worry they aren't interested in your fiat wealth, used cars wealth, or flatscreen TV wealth).   

Tue, 07/05/2011 - 06:17 | 1426080 AnAnonymous
AnAnonymous's picture

Your understanding of the physical world we live in is downright pathetic and flat out wrong-

 

That is possible.

 

Your understanding of economics leaves a lot to be desired.

 

This is also possible.

 

AND THESSINGER'S ARABIA STILL EXISTED ON SEPTEMBER 10, 2001.  Go back to your troll cave.

 

And that is supposed to mean?

9,11 induced a change of pattern in this area.

Up to it, the USD recycling was done by buying U S debt as the main course.

As it affords the US more debt depth, it increased the level of activity in the US, and therefore more demand to fuel this increased of activity.

After 9,11, this part of the world looked for other schemes rather recycling their USD in the US economy.

Like increasingly looking for arable land to lease and buy etc...

Mon, 07/04/2011 - 10:56 | 1424194 trav7777
trav7777's picture

huh?  Women love the nanny state...in fact, you can trace its rise here in the US directly back to suffrage.  The electorate elected people who gave them exactly what they asked for.  The hyperrich get rich regardless

Mon, 07/04/2011 - 10:08 | 1424075 linrom
linrom's picture

+1000

Mon, 07/04/2011 - 12:49 | 1424497 goldsaver
goldsaver's picture

The use of the terms "Savior State" or "Nanny State" indicates the user has swallowed a propaganda meme. Undoubtedly the entitlement programs need to be reorganized, as does the hugely corrupt military/industrial complex, but to blame social collapse on the impulse of government to help the least fortunate in society and counter the amoral depredations of Mega-Corporate "people", is, to use a psychiatric term, nuts.

Wow, did you miss the boat! It is not a matter of reorganizing, it is a matter of ending! You do not reorganize cancer cells that are killing the host, you remove them.

 

I do not care what the impulses of the State might be. All states have impulses that result in less freedom, additional slavery for the citizens and eventual collapse. The purpose of all governments must be limited to the two basic functions: Protection of citizens from physical violence and enforcement of contract laws. The moment you add anything else, whether welfare payments for "the less fortunate" or massive defense spending for invading other countries, You sabotage the system by removing production and malinvesting it in government desires vs. the desires of the producers who earned the wealth and are responsible for the production. It is not a left/right thing. It is a State vs Individual thing.

Whether the State is a huge warfare state or a massive welfare state, the result is the same, too big of a State.

Let me break it down further. You and your buddies decide to have poker night on Wednesdays. Up to this point, the participation in poker night is voluntary. You decided tho put Barry in charge of bringing the beer with the promise everyone will chip in for the beer after. So far, so good. First Wednesday, Barry brings beer. Second Wednesday, Barry brings beer and chips and everyone agrees that chips where a good idea. Third Wednesday Barry brings beer, chips and a security guard to make sure everyone is safe while playing poker. Within 6 months, Barry will tell you when to play, where to play, what to eat, when to eat and you will have to get a second job just to pay for Barry's services. It is not Barry's fault. You did not stop him from going beyond what yo agrreed he would do.

 

To quote another famous Barry: "The constitution is one of negative liberties. It tells the government what it may not do, but it does not tell the government what things it should do on your behalf". Yes, he trully believes that caltrap!

 

Mon, 07/04/2011 - 13:40 | 1424652 Girl Trader
Girl Trader's picture

Thank you for some rationality!

Mon, 07/04/2011 - 08:27 | 1423852 Hobbleknee
Hobbleknee's picture

"Peak oil" is just propaganda to shift blame away from Fed-induced inflation- just like they will blame rising food prices on overpopulation and global warming.

Mon, 07/04/2011 - 08:49 | 1423883 JW n FL
JW n FL's picture

You dumb fucking Republicans that come here from Yahoo running your mouth like a woman with PMS, should spend more time educating yourselves and less time talking, at least until you have some what of a clue.

Mon, 07/04/2011 - 08:55 | 1423918 Bicycle Repairman
Bicycle Repairman's picture

Even if peak oil is real (doubtful), the decline will take place over a long period.  Nevertheless TPTB will use peak oil as an excuse today for all kinds of incompetence and veniality.

Mon, 07/04/2011 - 09:02 | 1423934 Version 7
Version 7's picture

The decline in current producing fields is running at ~9%, and increasing. Check the last IEA report. In case this is not offset by new production, and everything indicates it won't, a 9% decline rate means that present production will drop to half in about 9 years.

Mon, 07/04/2011 - 09:59 | 1424053 JW n FL
JW n FL's picture
by Bicycle Repairman
on Mon, 07/04/2011 - 08:55
#1423918

Even if peak oil is real (doubtful), the decline will take place over a long period.  Nevertheless TPTB will use peak oil as an excuse today for all kinds of incompetence and venality.

***************************************************************

It is NOT! Peak Oil.. it is Peak Lite Sweet Crude.. are you so simple that you can NOT! understand the difference? and considering you refuse to grasp the difference between the two (2).. then comprehending the outcome of such an event most surely is beyond your grasp.

 

Wake! Up!! I am not CNBC.. Peak Lite Sweet Crude, Peak Affordable Oil.. NOT PEAK OIL! there is LOTS and LOTS and EVEN! MORE!! LOTS!!! of Oil!

 

But, Lite Sweet Crude.. here is my definition of lite sweet crude.. lite sweet crude is easy to drill for because it is not that far under ground... (think a few hundred feet under the desert. Texas / Saudi Arabia kind of places) the drill site is not far from a major port / transportation hub.. and it is sweet lite NOT! Sour Heavy Crude.. which means refining the Oil is not a Long drawn out process.

 

We have PEAKED with regard to Lite Sweet Crude.. now what does that mean..

 

well to go to the desert.. drill down 400 feet and pump it up and over to a port 3 miles away is pretty easy.. not very expensive..

 

as opposed to..

 

offshore drilling on a $300 million dollar platform.. that has to run from hurricanes.. sitting in 10,000 feet of water.. to then have to drill down another 2 - 3 miles (sometimes 5 miles) down from the beginning point.. which is once again! is sitting 10,000 feet UNDER WATER!! this Oil is not always sweet lite crude! sometimes it is sour heavy crude.. so! it costs $300 dollars a barrel to pump out of the ground as opposed to being in the middle of the desert with no EPA around.. and if you think the EPA is the expensive part of offshore drilling? you are drunk, stoned or stupid.

 

Watch the video below and then respond. Jeff Rubin was the tip of the spear with regard to financing the Oil Industry in Canada that you now see on CNBC every day, 24 hours a day.. he is not a tree hugger.. he is a retired Executive Banker for Canada's Largest Bank.

 

Jeff Rubin is the former chief economist of the CIBC Bank...

http://www.businessinsider.com/jeff-rubin-iea-recession-2011-6

 

now watch the youtube video and learn something!

 

1. http://www.youtube.com/watch?v=wYuLjGQQ-jg there is not enough energy to go around, LET ME REALLY DUMB IT DOWN!! There is not enough cheap Energy to go around. It is not that we are out of oil, the problem is that we have Peaked in Global Production of Lite Sweet Crude. Thusly energy now costs $200bbl a barrel.

Mon, 07/04/2011 - 11:02 | 1424223 trav7777
trav7777's picture

Uh...no.  It is Peak Oil.  As in OIL.

Light sweet peaked awhile ago.  Aggregate oil appears to have peaked a couple of years later.

Anyone talking about peak who says "there is plenty of oil," as if that somehow mitigates Peak, should really STFU and certainly not be bolding stuff in his posts for emphasis.

Let the people who really understand this topic speak about it.

Peak Oil means a maximum in the rate of production.  Peak is not just for oil; it's for everything including water, which as you know is indestructable.

Mon, 07/04/2011 - 11:19 | 1424267 JW n FL
JW n FL's picture

Travis,

 

getting these idiots to engage the subject is hard enough.. not putting in terms that they can grasp.. not leaving a little meat on the bone so that when they do engage they make discoveries on their own, thusly owning the new found information and ever more likely to go out on a ego high and pontificate about their new wealth of information that they discovered.

 

You can use terms that are endearing to you, you can pretend in your little world that terminology is more important than spreading the word and even one better tricking the idiots into spreading the word that much further.. but in reality your ego means nothing to me or to how much more important it is to get these insects to engage.

 

You can save you ego drivel for someone who gives a fuck about your little dick, do you fucking understand..

 

So leave spreading the word to someone who knows it is more important to spread the word than which terminology is used or how the hook is set.

 

and one better.. of all the shouting matches that you have engaged in.. with lesser than beings.. you in the end.. each and every fucking time.. would rather pretend to be right.. than be helpful..

 

source and site your bullshit and leave your copyrighted drivel and home for a fucking change. 

Mon, 07/04/2011 - 10:59 | 1424200 trav7777
trav7777's picture

Are you a fuckin idiot?  Do you SERIOUSLY believe that the rate of oil production can increase forever?  Because that is what it would mean for peak oil to not be real.

Mon, 07/04/2011 - 08:55 | 1423919 Version 7
Version 7's picture

+1

Mon, 07/04/2011 - 12:45 | 1424496 IAmNotMark
IAmNotMark's picture

You dumb fucking morons that think the republicans are the problem should spend more time educating yourselve and less time talking, at least until you have somewhat of a clue. 

Mon, 07/04/2011 - 08:30 | 1423854 Kreditanstalt
Kreditanstalt's picture

Perhaps it is time to think of the government not as our Savior but as the guarantor of the Constitution.

Scary stuff, Smith!  You really want the government to play referee?  Some sort of guarantor of "fairness" and a "level playing field", eh?  Sounds to me like a plea for MORE REGULATION.

Or maybe you're one of those Greenbacker nuts who, hating the private banks and the Fed so much, want Congress to print U.S. money...out of the frying pan into the fire.

Great article, explaining cogently why this is not so much a financial crisis as a crisis of productivity or of resource scarcity.  But a dubious conclusion...!

Mon, 07/04/2011 - 08:45 | 1423894 JW n FL
JW n FL's picture

what is wrong with corporate welfare?

when corporations dont pay any taxes??

sounds like a win, win for the Corporations to me!

 

Corporations use Tax dollars to Lobby with (that You and I pay for) so that they can receive even Larger Tax Breaks (that You and I pay for) and ever larger Subsidies (that You and I pay for).

 

You have to admit! that is Double or Triple even Winning! Tiger Blood Bitchez!!

 

http://www.banktech.com/articles/229700093?cid=nl_bnk_daily

Top U.S. Lobbying Banks Got Biggest Bailouts

 

1.    [PDF]

A Fistful of Dollars:Lobbying and the Financial Crisis; Financial ...

File Format: PDF/Adobe Acrobat - View as HTML
A Fistful of Dollars: Lobbying and the Financial Crisisby. Deniz Igan ...
www.imf.org/external/np/res/seminars/2009/arc/pdf/Mishra1.

 

Top 10 corporations which paid no taxes

Here is Sen. Sanders’ list of the 10 worst corporate income tax avoiders:

1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. (Source: Exxon Mobil’s 2009 shareholder report filed with the SEC here.)

2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. (Source: Forbes.com here, ProPublica here and Treasury here.)

3) General Electric made $26 billion in profits in the United States over the past five years and, thanks to clever use of loopholes, paid no taxes.(Source: Citizens for Tax Justice here and The New York Times here. Note: despite rumors to the contrary, the Times has stood by its story.)

4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009. (Source: See 2009 Chevron annual report here. Note 15 on page FS-46 of this report shows a U.S. federal income tax liability of $128 million, but that it was able to defer $147 million for a U.S. federal income tax liability of negative $19 million.)

5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year. (Source: Paul Buchheit, professor, DePaul University, here and Citizens for Tax Justice here.)

6) Valero Energy, the 25th largest company in America with $68 billion in sales last year, received a $157 million tax refund check from the IRS and, over the past three years, received a $134 million tax break from the oil and gas manufacturing tax deduction. (Source: the company’s 2009 annual report, pg. 112, here.)

7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department. (Source: Bloomberg News here, ProPublica here, Treasury Department here.)

8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury. (Source: Paul Buchheit, professor, DePaul University, here, ProPublica here, Treasury Department here.)

9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2006 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction. (Sources: Profits can be found here. The deduction can be found on the company’s 2010 SEC 10-K report to shareholders on 2009 finances, pg. 127, here.)

10) Carnival Cruise Lines made more than $11 billion in profits over the past five years, but its federal income tax rate during those years was just 1.1 percent. (Source: The New York Times here.)

http://www.greenpartywatch.org/2011/04/30/top-10-corporations-who-paid-no-taxes/

 

Mon, 07/04/2011 - 09:36 | 1423992 pemdas
pemdas's picture

Garbage!! 

     For XOM you cherry pick the year oil crashed from $140's per barrel to $30's per barrel. Do you think maybe the paid no domestic income tax that year because they made no domestic profit that year?  

     I checked the 10K for 2009. That year XOM paid over $15 billion in income taxes (all foreign) on pretax profit of $27.6 billion. Looks like a pretty steep tax rate to me.

     Why don't you analyze the taxes paid (virtually zero I am sure) vs. tax credits (huge) received by your green companies.  That would really make people sick! 

Mon, 07/04/2011 - 10:04 | 1424067 JW n FL
JW n FL's picture

You have a problem with 1 company.. for one year.. and the subsidies that XOM (whatever the fuck that is) collects is?

 

maybe we should look into how XOM gets those nice tax breaks? I will be right back.. hold that thought!

Mon, 07/04/2011 - 10:12 | 1424086 JW n FL
JW n FL's picture

Exxon! I laughed.. no! I really laughed!!

Here is your 2009 year of choice!

http://online.wsj.com/video/a-waxing-curiosity-for-exxon-earnings-report/2FC2C960-6DD5-4EA7-9DCF-22FC4B0A55FE.html

 

Republican Defends Big Oil Subsidies

http://www.youtube.com/watch?v=x73QJ6-4MQw

 

The Company that says it is Un-American to Not Subsidize them!!

 

http://www.opensecrets.org/usearch/index.php?q=exxon&cx=010677907462955562473%3Anlldkv0jvam&cof=FORID%3A11#817

 

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Mon, 07/04/2011 - 10:27 | 1424118 Sudden Debt
Sudden Debt's picture

posts like this are such a added value to this site...

 

Mon, 07/04/2011 - 14:44 | 1424830 JW n FL
JW n FL's picture

http://www.youtube.com/watch?v=TnJmldXpRRw

 

At Least 42,000 Gallons Of Crude Oil Spills Into Yellowstone River, Exxon To Blame

Mon, 07/04/2011 - 14:45 | 1424837 JW n FL
JW n FL's picture

http://www.youtube.com/watch?v=TnJmldXpRRw

 

Honey we are rich! we have oil on the Property!!

Mon, 07/04/2011 - 14:45 | 1424838 JW n FL
JW n FL's picture

http://www.youtube.com/watch?v=TnJmldXpRRw

 

Honey we are rich! we have oil on the Property!!

Mon, 07/04/2011 - 14:46 | 1424839 JW n FL
JW n FL's picture

http://www.youtube.com/watch?v=TnJmldXpRRw

 

Honey we are rich! we have oil on the Property!!

Mon, 07/04/2011 - 17:40 | 1425141 pemdas
pemdas's picture

So when your facts are shown to be wrong, your response is a flurry of 75 unrelated and irrelevant links?  

Tue, 07/05/2011 - 11:35 | 1426581 JW n FL
JW n FL's picture

You mentioned 2009, not me.. see attached link.

Mon, 07/04/2011 - 16:07 | 1424992 Agent 440
Agent 440's picture

I hear that: he deserves a golf clap.  : )

XOM is living in these guys' heads rent free.

Mon, 07/04/2011 - 11:04 | 1424228 Strike Back
Strike Back's picture

FINISH HIM!!!

Mon, 07/04/2011 - 11:11 | 1424251 trav7777
trav7777's picture

Idiot.

So, there are two options.

1) tax XOM profits.

Those profits then don't get paid to Congressman who then don't pay sales taxes on the things they buy with those donations.  Or they spend less because they get smaller contributions.  They buy less Bentleys, less hookers, less cocaine, less advertising, etc.  XOM also buys back less stock meaning less payola to the executives who also buy less of the stuff the Congress is buying.  If XOM's directors want to maintain their payouts, they will have to RAISE PRICES.  Meaning that YOU PAY THE TAX at the pump.

2) don't tax XOM profits.

This is already explained in #1. 

 

Taxing a corporation is USELESS.  Tax PEOPLE; they are the only ones that work.  The executives, stockholders, Congress, etc. are the ones who should be taxed if you want to tax someone.  You act like there is a PERSON named XOM who is running around with a bunch of free money.  While I'm up, fuck taxation in the first place- idiots like you speak as if this taxation regime is somehow VIRTUOUS, like the revenue side is the problem with budgets or that paying taxes and MORE TAXES is a good thing.

GFD, we can't have anything happening without the VIRTUE of taxation sittin on it, can we?

Mon, 07/04/2011 - 11:23 | 1424285 JW n FL
JW n FL's picture

little man.. I want them prosecuted for treason.. I dont fucking care what the probate is forced to pay.

 

and the subsidies.. never mind stupid.. your little dicked ego gets in the way of helping every time you open your stupid fucking mouth..

 

why dont you get your fat ugly wife out of the house and go jog off a fucking cliff with that bitch.

Mon, 07/04/2011 - 10:14 | 1424090 linrom
linrom's picture

LOL. So you think that FASB statements are the SAME as Corporate Tax Statements. Boy you are more gullible than a clump of wood. FASB statements show book income taxes that are never paid!

Mon, 07/04/2011 - 11:05 | 1424232 trav7777
trav7777's picture

This is irrelevant, misleading GARBAGE.

If we taxed XOM's profits, which PERSON's pocket does that come out of?  Tax the person; corporations are fictions.  People work; corporations do not.

XOM turned around and did something with that $.  So, SOMEONE, somewhere who received it either did or should have paid taxes on it, either via income tax or dividend tax or sales tax or some other tax.

Corporation taxes are the biggest red herring ever.  Stop acting like the corporation is a person; it ISN'T.

Tue, 07/05/2011 - 11:40 | 1426598 falak pema
falak pema's picture

The whole shadow banking system operates on corporate and oligarchs their shareholders parked in off shore havens. Bring some fiscal sanity to the world and a large portion of "hot money" that goes in the "derivative" bubble will come back into the real economy as fiscal revenues or else R&D investment in the real economy by corporates and using regulative measures world wide to stop the "casino royal" derivative naked hedging economy all based on shadow banking money. But who will toll the cat?? Who will tell the mad derivative economy it is a naked emperor heading for collapse?

Mon, 07/04/2011 - 08:33 | 1423859 Rynak
Rynak's picture

What a waste of opportunity, to use an article that is supposed to be about the cycle of dependency, and (ab)use it to write about government, consumerism and socialism instead..... rather than actually writing about the mechanics of dependency, and this way learning something about the root mechanics behind all current society, economics, politics and culture.

Similarily, what a waste to supposedly write about society complexity-bloat, but use it to bash government, consumerism and socialism.... when instead, one could have written about the general consequences of overcomplex societies, and in the process learn something universal that works beyond ideological agendas, and beyond over-governance, over-consumption and unsustainably high social programs.

In a word: Shallow.

Mon, 07/04/2011 - 08:41 | 1423884 BlackVoid
BlackVoid's picture

Read the book by Tainter, it is much better than any article.

The underlying reality is based on Physics and Ecology. Politics and Culture are just a layer on top of that.

And there is a disconnect between the 2. Anything you experience - job outsorcing, falling incomes, debt, insolvency - these are just the symptoms of diminishing returns.

Here is the book, that you MUST read to understand it all.

http://www.amazon.com/Collapse-Complex-Societies-Studies-Archaeology/dp/...

Mon, 07/04/2011 - 11:12 | 1424254 trav7777
trav7777's picture

yep...and interest rates are your indicator of aggregate returns

Mon, 07/04/2011 - 08:36 | 1423873 DKR
DKR's picture

there was nothing "sudden" about the collapse of the Soviet Union. There were about two dozen political and economic tools implemented by the US of A through NATO countries, and it was eventually brought down by the restitutions system combined to what had been called eurobank. I had foreseen it as early as 1982.

Mon, 07/04/2011 - 08:47 | 1423875 Sean7k
Sean7k's picture

This article talks all about effects and never addresses the cause. It presumes that you can fix the system by economizing. This is the worst kind of analysis- because it is an apology that fails to name the perpetrator: Central Banks and their proxies- government.

The State is functioning exactly as its' rulers want it to. It allows for the efficient transfer of wealth, the development of a burgeoning police state and the reduction of labor paid to produce goods.

After draining the pool of contributions to SS, the entitlement fund is now under pressure to be reduced, so the promissory notes will nort have to be repaid. This is theft, pure and simple.

States require the advance payment of taxes and then renege on paying refunds (California and Illinois, etc.) legitimizing theft and fraud by the state.

Protected industries rise at the expense of other less influencial players guaranteeing their ability to survive economic turmoil. Whether by bailouts(banks), subsidies (Agriculture, auto) or outside budget expenditures(military) the State functions as a facilitator- directing the tax payments of all society into the hands of a selected few.

The media pleads and confuses the electorate while placing an emphasis on entertainment and distraction. The free press is restricted to marginalized sites and obscure blogs thus denying the people the opportunity to engage in real, meaningful discourse. Even here, the discourse can become confused with the trolling of professional disinformation attacks.

The fourth of July is supposed to celebrate America's independence and freedom. However, it is presently a sad reminder of the travesty that has befallen us all. This experiment in Republican government meant to limit power and develop liberty has instead turned out like every other proclaimation of a new beginning: Tyranny at the hands of a select, miniscule minority. 

America is a toxic dump. A progressive experiment in eugenics on an extended timeline that allows for the death of its' citizens by maladies too many to name, but effective in their ability to transfer wealth from citizens to a medical community and a few corporations while destroying the quality of life.

Excess youth are consumed in pointless wars, designed to acquire resouces and create new debt for an Elite few. All while the propaganda arm of the State waves the flag and plays upon our patriotism. We all give parades, we appreciate their sacrifices, but fail to see they're nothing more than pawns. Thousands of widgets, used to promote a terrorist agenda.

Parties roll out their candidates and play up their differences, obscuring the fact that the results of leaders are always the same. They trumpet our choices, but as in the old Soviet Union, we are merely voting between candidates from the same ruling Elite.

On this fourth of July, I am celebrating the freedom that results from practicing revolution in my everyday life. The refusal to feed the State. The refusal to obey authority- especially one that has zero credibilty. The guerilla warfare necessary to eliminate and destroy this beast that consumes the lives and dreams of its' worshippers. Bankers be damned-there are NO good bankers. Government be damned- there are no good governments. Authority be damned-there are no legitimate authorities in a police state. I will not eat your poisoned food or drink your toxic water. I will not legitimize your rule by voting, contributing or encouraging politicians. I will boycott the corporations that wreak havoc the world over. 

I will engage my community and commit to defend it from tyranny. I will work to develop its' resources. I will encourage the development of black markets. I will work to create alternative currencies and use those that are available to obscure the workings of the underground economy. I will refuse to support the actions of the military and the domestic police state.

Give me liberty or give me death. 

Mon, 07/04/2011 - 09:11 | 1423955 Kreditanstalt
Kreditanstalt's picture

Great rant!  Yes, the real enemies are the governments themselves.  And as more and more of us - "practicing revolution is our daily lives" - come to make a difference, things will change.  

Mon, 07/04/2011 - 10:14 | 1424091 AnAnonymous
AnAnonymous's picture

The government State efficiency in the US is peaking, no doubt about it.

This said, no jump possible from that observation to the government is the problem stuff since the US government has been efficient prior.

US citizens owe their place, their welfare thanks to the US state. That this state is no longer able to provide an increase in the trend does not mean it has not been efficient before.

Mon, 07/04/2011 - 10:49 | 1424131 Sean7k
Sean7k's picture

Perhaps you can provide a time or example of the State being "efficient". The US citizens are terribly burdened by the state, to the tune of atleast 53 trillion dollars in unfunded liabilities. An amount greater than the GDP of the entire world.

Efficiency peaking? There has never been efficiency. There has only been a slow decay, mired in debt and tyranny, as the Elites have exercised greater and greater control.

You are a typical totalitarian socialist. I owe nothing to the US government nor do my fellow people. The government has only been a drag on the potential for production in America.

To Quote Proudhon: " to be governed is to be watched, inspected,spied,directed,law-ridden,regulated, penned up, indoctrinated,preached at, checked, appraised, sized,censured, commanded;by beings that have neither title or knowledge nor virtue. To be governed is to have every operation, every transaction, every movement noted, registered, counted, rated,stamped, measured, numbered, assessed, licensed, refused, authorized,indorsed, admonished,prevented, reformed, redressed,corrected. To be governed is, under pretext of public utility and in the name of the general ionterest, to be laid under contribution, drilled, fleeced, exploited,monopolized, extorted from, exhausted, hoaxed, robbed; then, upon the slightest resistance, at the first word of complaint, to be repressed, fined, vilified,annoyed, hunted down, pulled about,beaten, disarmed, bound,imprisoned, shot, mitrailleused, judged, condemned, banished,sacrificed, sold, betrayed, and, to crown all, ridiculed, derided, outraged and dishonored".

 

Mon, 07/04/2011 - 11:36 | 1424321 AnAnonymous
AnAnonymous's picture

Perhaps you can provide a time or example of the State being "efficient".

 

From start to now...

Mon, 07/04/2011 - 11:48 | 1424353 Sean7k
Sean7k's picture

I didn't think so.

Mon, 07/04/2011 - 13:17 | 1424588 AnAnonymous
AnAnonymous's picture

Opinion is not everything.

This said, US citizens are so much into their propaganda that they can come to deny that the US has grown richer since the inception of the central banking meme in 1913. The one dollar story. One dollar bought more in the 1920s than it buys in the 2000s and stuff.

So what?

It is not possible to discuss with people who are to deny such obvious stuff.

The US State has been efficient from start to now, providing more and more to the US citizens through a policy of entitlements and hand outs.

Now it is clear that the efficiency of the US state is reaching its limits and is no longer able to fulfill expectations.

Mon, 07/04/2011 - 13:22 | 1424598 Sean7k
Sean7k's picture

The average assets of the American Family equal 100,000 dollars. Their average debt, because of the government and central banking is 250,000. Now, I may not be great at math, but an average debt of 150,000 per family sounds pretty inefficient to me. 

Opinion is not everything, yet, it is all you provide. 

 

Tue, 07/05/2011 - 06:21 | 1426085 AnAnonymous
AnAnonymous's picture

How is it inefficient?

So far, the debt has not been repaid. Until the debt is, the maths tells 100,000 + 250,000, not 100,000-250,000.

Tue, 07/05/2011 - 07:39 | 1426133 Sean7k
Sean7k's picture

But interest on the debt is paid, consuming larger and larger amounts of government expenditures and the taxes that are paid. Nice try. Do you even undertsand accounting? There is a balance sheet.

Your use of the language makes you a very interesting troll. 

Mon, 07/04/2011 - 22:24 | 1425529 mophead
mophead's picture

US citizens owe their place, their welfare thanks to the US state. That this state is no longer able to provide an increase in the trend does not mean it has not been efficient before.

What a stupid comment. That's like saying the sheep owe everything to the farmer for being fed and taken care of right before the slaughter. Dumb fucking comment. Unbelievable.

Tue, 07/05/2011 - 06:25 | 1426087 AnAnonymous
AnAnonymous's picture

What a stupid comment. That's like saying the sheep owe everything to the farmer for being fed and taken care of right before the slaughter. Dumb fucking comment. Unbelievable.

 

Ah, hypothetical again. Denial of reality.

First, slaughter or not, in your example, the sheep owe everything to the farmer for being fed and taken care of.

And the slaughter has not happened (if ever to happen by the way) yet.

The US example would millions of sheep dying their natural death without ever seeing the butcher's hatchet.

Tue, 07/05/2011 - 07:46 | 1426142 Sean7k
Sean7k's picture

Ah, hypothetical again, Denial of reality

First, you assume the people owe the government for their welfare. The people owe the government nothing. It did not bring them into world or in the farmer's case- onto the farm. Therefore, the continued harvesting of the sheep, without their permission is a violation and theft. 

Mon, 07/04/2011 - 22:12 | 1425512 mophead
mophead's picture

This article talks all about effects and never addresses the cause. It presumes that you can fix the system by economizing. This is the worst kind of analysis- because it is an apology that fails to name the perpetrator: Central Banks and their proxies- government.

The State is functioning exactly as its' rulers want it to. It allows for the efficient transfer of wealth, the development of a burgeoning police state and the reduction of labor paid to produce goods.

Exactly and 100% on the mark. I was in the middle of typing something similar showing the cause: bankers/oligarchy/ruling class.

The idea that all this happens because of a disorganized and selfish society is to cover up the crimes by spreading and/or redirecting blame. I rate the article as a fluff piece. This story has been written over and over before.

Mon, 07/04/2011 - 08:38 | 1423880 Bicycle Repairman
Bicycle Repairman's picture

"investments in social complexity yield diminishing marginal returns"

A discussion of this might prove interesting.

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