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Jeremy Grantham Looks At The Future Of America: "On The Road To Zero Growth"

Tyler Durden's picture


Jeremy Grantham's latest quarterly letter is out, in which he discusses, as the title suggests, the road to zero US growth. From the punchline:

With a little luck, U.S. GDP growth (even after an increasing squeeze from rising resource costs and environmental damage) should remain modestly positive, even out to 2030 and 2050, in the range of 1% at the high down to a few basis points at worst. Increasingly, the growth will be qualitative. Qualitatively, growth is likely to be limited to services as manufactured goods will bear the brunt of the rising input costs. It would certainly help a lot if considerable changes were made in how GDP is measured. It needs to be closer to what we all apparently think it is already: a reasonable measure of the utility of useful goods and services. The key issue will be how much unnecessary pain we inflict on ourselves by defending the status quo, mainly by denying the unpleasant parts of the puzzle and moving very slowly to address real problems. This, unfortunately, is our current mode. We need to move aggressively with capital – while we still have it – and brain power to completely re-tool energy, farming, and resource efficiency. We need to do all of this to buy time for our global population to gracefully decline. It can certainly be done.


  • The U.S. GDP growth rate that we have become accustomed to for over a hundred years – in excess of 3% a year – is not just hiding behind temporary setbacks. It is gone forever. Yet most business people (and the Fed) assume that economic growth will recover to its old rates.
  • Going forward, GDP growth (conventionally measured) for the U.S. is likely to be about only 1.4% a year, and adjusted growth about 0.9%.
  • Population growth that peaked in the U.S. at over 1.5% a year in the 1970s will bob along at less than half a percent. This is pretty much baked into the demographic pie. After adjusting for fewer hours worked per  person, man-hours worked annually are likely to be growing at only 0.2% a year.
  • Productivity in manufacturing has been high and is expected to stay high, but manufacturing is now only 9% of the U.S. economy, down from 24% in 1900 and 15% in 1990. It is on its way to only 5% by 2040 or so. There is a limit as to how much this small segment can add to total productivity.
  • Growth in service productivity in contrast is low and declining. Total productivity is calculated to be just 1.3% through 2030, if we use current accounting methods.
  • However, current accounting cannot accurately handle rising resource costs. Spending $150-$200 a barrel in offshore Brazil in the future to deliver the same barrel of oil that cost the Saudis $10 will result perversely in a huge increase in (Brazilian) GDP. In reality, rising resource costs should be counted as a squeeze on the balance of the economy, as they lower our total utility.
  • Measuring the non-resource balance of the economy produces the correct effect. The share of resource costs rose by an astonishing 4% of total GDP between 2002 and today. It thus reduced the growth of the non-resource part of GDP by fully 0.4% a year.
  • Resource costs have been rising, conservatively, at 7% a year since 2000. If this is maintained in a world growing at under 4% and a developed world at under 1.5% it is easy to see how the squeeze will intensify.
  • The price rise might even accelerate as cheap resources diminish. If resources increase their costs at 9% a year, the U.S. will reach a point where all of the growth generated by the economy is used up in simply obtaining enough resources to run the system. It would take just 11 years before the economic system would be in reverse! If, on the other hand, our resource productivity increases, or demand slows, cost increases may decelerate to 5% a year, giving us 31 years to get our act together. Of course, with extraordinary, innovative breakthroughs we might do even better, but we certainly shouldn’t count on that. (Bear in mind that we don’t even know precisely why the prices started to rise so sharply in 2000.) Excessive optimism and doing little could be extremely dangerous.
  • For a few years fracking will add helpfully to growth: my guess is that the benefit will peak at about 0.5% within fi ve years, but be modest over longer periods. The key concept here for understanding growth is to know when the maximum upward push will occur. (See Appendix A.)
  • Increasing climate damage, reflected mainly in food prices and flood damage, is going to increase. With any luck this will not be severe before 2030 (we allow for a 0.1% setback) but it is very likely to accelerate between 2030 and 2050. A great deal will depend on our responses.
  • The bottom line for U.S. real growth, according to our forecast, is 0.9% a year through 2030, decreasing to 0.4% from 2030 to 2050 (see table on Page 16). This is all done presuming no unexpected disasters, but also no heroics, just normal “muddling through.”
  • GDP measures must be improved so that they begin to measure output of real usefulness or utility. The current mish-mash of costs and of “goods” and “bads” produces poor and even damaging incentives.
  • Accurate measurements of growth must eventually include the full costs of running down our natural assets. True income (said Hicks) is meant to allow for sustained productive capacity, which our current measures clearly do not. If they had done so the developed countries might well have been in reverse for the last 20 years.
  • Investors should be wary of a Fed whose policy is premised on the idea that 3% growth for the U.S. is normal. Remember, it is led by a guy who couldn’t see a 1-in-1200-year housing bubble! Keeping rates down until productivity surges above its last 30-year average or until American fertility rates leap upwards could be a very long wait!
  • Some of the investment implications of this low growth outlook and the Bernanke optimism will be addressed next time (with luck!).

* * *

Full letter (pdf):



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Tue, 11/20/2012 - 14:45 | 2999430 JeremyWS
JeremyWS's picture

Can always trust Jeremy's :)

Tue, 11/20/2012 - 15:07 | 2999501 Michaelwiseguy
Michaelwiseguy's picture

You can't have job creation in the USA because the factories that produce consumer products were removed the country.

The Money Math doesn't work due to Globalization and the Federal Reserve Corporation.

Tue, 11/20/2012 - 15:20 | 2999534 Zap Powerz
Zap Powerz's picture

Oh relax.  There is plenty of low wage, service industry job creation going on.  We always need more leaf blowers, hotel maids and dishwashers imported from South America!

And we will supplement their low wages by giving them free food (EBT cards), free health care (medicaid) and subsidized housing!  This will all be paid for with borrowed money that we will pay interest on forever more.

There is simply no way this can end badly.

Tue, 11/20/2012 - 15:57 | 2999614 Michaelwiseguy
Michaelwiseguy's picture

You can't have job creation in the USA because factories that produce consumer products were removed from the country.

The Money Math for Job Creation doesn't work due to Globalization and the Federal Reserve Corporation.

Globalization = American Wage Arbitrage = Lower Worker Pay

Federal Reserve Corporation = Private Company that Manufactures Paper Money and Sets its Value


P.S. I'm sorry I have to spell this out on a 6th grade level.


Tue, 11/20/2012 - 16:21 | 2999759 MachoMan
MachoMan's picture

You can build those factories here again...  after all, did the countries who got their manufacturing infrastructure destroyed in WW2 rebuild?  Life goes on...  [except, in this case, probably at a lower standard of living for americans]

Tue, 11/20/2012 - 16:27 | 2999769 francis_sawyer
francis_sawyer's picture

Zero Growth = zero readers for your newsletters Jeremy... (because when things grind to a standstill, people FINALLY want to look ahead & not behind)...

I'm not hatin' here ~ just telling you how it will be...

Tue, 11/20/2012 - 17:59 | 3000000 Ratscam
Ratscam's picture

3 and six zeros

Thanks to ZH for getting us involved, thinking, discussing and argueing.
ZH articles are great. The comments of the bloggers are hilarious, at times utterly stupid but mostly highly educating.
I learned so much. Thank you, thank you, thank you!

Tue, 11/20/2012 - 16:56 | 2999881 DosZap
DosZap's picture


You can build those factories here again... after all, did the countries who got their manufacturing infrastructure destroyed in WW2 rebuild? Life goes on... [except, in this case, probably at a lower standard of living for americans]

Yeah, we could, but that is not the plan..............................face it, we have all been fenced in, and you are prisoners of the State.

Tue, 11/20/2012 - 18:08 | 3000094 All Risk No Reward
All Risk No Reward's picture

Everyone needs to do their full research on Debt Money Tyranny..


I'm not yelling with the caps, I'm bull horning.

Society's debt isn't payable in total.  Period.  Look at the Debt Money Tyranny money flow PDF attached above to see exactly why.

The welath of the richest people on the planet IS OUR DEBT.  We can't pay it back UNLESS THE RICHEST PEOPLE ON THE PLANET USE THEIR MONEY TO PAY IT BACK.

God forbid a $20 gets burned in a house fire - then the debt is unpayable no matter what.

We need to stop obsessing over the wealth of criminals like Buffett, Gates, Rockefellers, etc...  because their money IS SOCIETY'S DEBTS THAT *YOU* GET TO PAY BACK WITH INTEREST!

Not because of reality, but because of a criminal, artificial debt based monetary constraint engineered to destroy nation states.  Think along the lines of Death Star 2.0 that destroys entire nations while keeping the wealth largely intact fore the "pennies on the looted dollar" plundering that will commence once the looting operation has run its course.

Since society doesn't have the money to pay back its debts, a steady state society will see its citizens bankrupted and asset stripped - one by one.

PS - refer to the linked PDF and note how wicked bailouts are - the criminal insiders keep all the cash and society gets saddled with the debt BUT NO MONEY TO PAY PRINCIPLE OR INTEREST.

PSS - The real terrorists finance your government and everything else big - including mega drug cartels and even al Qaeda to play the role as Emmanuell Goldstein in 1984...  their isn't enough threat in the world so the military industrial complex has to create its own in order to conforrm to their corporate mandate - maximize profits.

BTW, watch "The Corporation Full" on Youtube or Netflix.  It compares the corporate legal structure to the clinical definition of a psychopath.

My argument is that the people with the wealth and political clout to define the corporate legal structure DID SO IN THEIR OWN IMAGE.

They are soulless, profit making psychopaths - by any means necessary.  Those that pay attention understand law isn't about to get in their way.

Also note the "news" has no legal obligation to tell you the truth.  And they don't.

Other Netflix documentaries worth your time:

1. Taxi to the Dark Side
2. Black Money
3. A Film Unfinished followed by...
3.5. Empire in Africa (Try to define the similarities and differences between the Warsaw Ghetto and how Big Finance Capital runs the governments of African nations.  I see lots of similarities and trivial differences).
4. The American Experience: The Crash of 1929 (Pay attention to who says the crash was inflicted on "suckers")
5. Cocaine Cowboys (The Banksters knew where the drug money being kept and sent their puppet government to overthrow that government, steal the money and then take control of the drug trade).
6. The Panama Deception (make special note of the person who had been melted in the attack).
7. Plunder: The Crime of Our Time (note Kucinish crying out to end debt based money before Congress - THEY ALL KNOW!)
8. Frontline: The Warning (Non criminals were to be excommunicated)

If you want some fiction to drive the point home:

1. Rollerball (James Caan version - and no, this movie is not about Rollerball.  That's just how they packaged it in order to throw reality in your face, Muppets)
2. They Live (Are you glasses on?  Who are the demonic "aliens?"  Do you know any collaborators?)
3. Michael Clayton (motivated by debt, just doing his thing without thinking, corporation killing people, lying about it and pretending they were the source of life - the only thing that saved his life was getting off the treadmill and back to nature and reality. The ending was fake, but exposes why mega corporation MUST SEIZE AND CONTROL GOVERNMENTS AS PRIORITY #1).

Tue, 11/20/2012 - 17:47 | 3000036 D-Man
D-Man's picture

That must be 6th grade from another country because it's certainly not 6th grade for the US government system!

Tue, 11/20/2012 - 21:26 | 3000655 GottaBKiddn
GottaBKiddn's picture

Sorry Mr. Jeremy, "we" aren't doing this to "ourselves". It's being done to us. That's why there is nothing that we do that is going to improve or change it. This will not end well, got it?

Wed, 11/21/2012 - 05:29 | 3001362 stacking12321
stacking12321's picture

so ready to play the part of the victim,  you are.

hope you grow out of it.

Tue, 11/20/2012 - 14:48 | 2999438 the not so migh...
the not so mighty maximiza's picture

"..gracefully decline.."

Yeah that happens all the time.

Tue, 11/20/2012 - 15:22 | 2999541 dwdollar
dwdollar's picture

LOL... yep...

Stick that one with "...beautiful deleveraging..."

Tue, 11/20/2012 - 14:49 | 2999440 Stock Tips Inve...
Stock Tips Investment's picture

The economic crisis in Europe will have a negative effect on the U.S. economy in the short term, but may represent an opportunity in the medium and long term. The U.S. economy is very flexible and highly productive. And American companies have proved very successful agile to meet the needs of its customers. The level of investment in energy being viewed by U.S. and other performance you step outside Europe, can support, easily, a much larger expansion of the American economy.

Tue, 11/20/2012 - 15:02 | 2999484 economics9698
economics9698's picture

Get rid of the NWA and a haircut on the debt and away we go.

Wed, 11/21/2012 - 05:32 | 3001367 stacking12321
stacking12321's picture

why you hatin' on the NWA?

i suppose you think the east coast rappers have a better solution to the debt problem?

Tue, 11/20/2012 - 14:50 | 2999445 QQQBall
QQQBall's picture

I get brown out in Socal. What energy is being referenced?

Tue, 11/20/2012 - 14:53 | 2999453 Quinvarius
Quinvarius's picture

Zero growth would be an improvement over the last 40 years.

Tue, 11/20/2012 - 14:58 | 2999477 Banksters
Banksters's picture



Humans may not exist in 18 years.

Tue, 11/20/2012 - 15:01 | 2999482 Joe Davola
Joe Davola's picture

1-in-1200 year housing bubble  Talk about pulling shit out one's ass.

Tue, 11/20/2012 - 16:42 | 2999845 ZerOhead
ZerOhead's picture

I don't know about that....

Anthropologists now suggest that the Neanderthals were wiped out by a 1-in-10,000 year cave bubble...

Tue, 11/20/2012 - 15:02 | 2999487 Mrmojorisin515
Mrmojorisin515's picture

All of these numbers assume the dollar is still the reserve currancy, thus keeping resources price increases in check..............

Tue, 11/20/2012 - 15:04 | 2999492 rosiescenario
rosiescenario's picture

Certainly the market has priced this in.....

Tue, 11/20/2012 - 15:04 | 2999493 PUD
PUD's picture

Since all money is debt and growth equals more money then there can only be more growth if there is more debt.

Clearly that ain't gonna happen

There is nothing wrong with Zero growth. All things in life do not need to be measured in money units. Progress is not the same as "growth"

10 billion humans are 6 billion too many no matter how clever we think we are.

We have done nothing about climate change, every bio system on the planet is in decline and war is a perpetual endeavor now.


There is no hope. None

Tue, 11/20/2012 - 15:47 | 2999626 Zap Powerz
Zap Powerz's picture

Have some faith in Mother Nature brother.  Have faith in natural, irrevocable laws.  Its all going to work out just fine.  Of course, you and I may not be around to see it, but it will work out.

Tue, 11/20/2012 - 16:50 | 2999865 Mary Wilbur
Mary Wilbur's picture

It's my understanding that the entire evolution of homo sapiens sapiens'  hIas taken place during an interglacial period of approximately 30,000 years. We cannot stop the dynamism of this planet. I have no idea what the future is going to bring except that it won't be anything like it has been (it never has) and I won't be here to experience it. It is next to impossible for the politicians and other elites who are in charge of this country to make effective policy about current problems. Climate change of such an enormous consequence is impossible to stop. The best we could possibly do is to try to adapt to it, with the realization that the extinction of the human race may very well be the end result. The Great Southeast Asian Tsunami of December 26, 2004 made it entirely clear to me in a way I had never internalized before, that we human beings are less than ants. Our self-love deceives us into believing we have importance. All we can do is try to survive, if possible, without harming others. Yet, that is as also a utopian dream. We hurt each other all the time.

Tue, 11/20/2012 - 17:05 | 2999906 SmallerGovNow2
SmallerGovNow2's picture

There is NO, ZERO, NADDA, manmade climate change, global warming, or whatever your political activist "scientists" (who were all caught red handed manipulating data to serve their cause) want to call it these days.  Midevil Warming Period?  Little Ice Age?  Ever heard of these?

Tue, 11/20/2012 - 18:19 | 3000119 Radical Marijuana
Radical Marijuana's picture

I spent thousands of hours attempting to research human driven climate change issues. In the end, I felt like a dog twirling around chasing its own tail. There is almost NO source of information that one can trust! Half the data is missing, and the other half is unreliable.

Humans blamed for climate change

Even WORSE, the basic mainstream understanding of the Sun is almost certainly wrong! Take a look at enough of the Thunderbolts of Gods Web site, and the electric universe theory, and you will be convinced that the orthodox mainsteam theories of a gravity and atomic energy driven Sun are grossly inadequate to deal with the rush of new observations, made possible in the last 10 years, by technology applied to astronomy.

Thus, our models and theories with respect to the primary driver of everything else are woefully inadequate! All of the climate change theories were based on models, using data, that BOTH end up being way too unreliable. Therefore, as far as I can tell, the basic theories about global warming, and ESPECIALLY the human causes of that, are grossly deficient, so much so that nobody can rightly say. That includes those who deny that, as well as those who promote it!

The ONLY thing that I am SURE about, from direct observations, is that human societies are controlled by lies, backed up with violence, and that there is PRIMARILY a hidden agenda behind everything that the mass media and politicians tell us! My all time favourite statements about this topic, so far, come from various versions of Penn and Teller being Green.. However, I find that the links to that keep on breaking, and those shows transformed from their better former versions, ... but nevertheless,

I find the theories about human beings screwing around with weather control experiments and covert manipulations to be more plausible than the overall theories about the climate, etc., since, like I said, the basic ideas are based on half-assed, biased data, plugged into models that do not understand the prime mover of the whole process! Thus, I find it IMPOSSIBLE to trust any of the stuff we are told, including those who say "no" just as much as those who say "yes."

The bigger problem, in the context of this article, is that, IF the established systems finally can not grow, they will NOT sanely adapt, (although that sounds theoretically possible) ... instead, they will collapse into crazy choas.  The PROBLEM is that climate change is probably going to happen in similar ways. Those weather systems will keep on going back to the dynamic equilibria, EXCEPT, if they cross some unknowable threshold, that flip them into chaos, out of which a radically different system of weather patters could emerge!

One thing IS clear, from the study of long-term human history, and that is climate changes played a HUGE ROLE in the longer term rise and fall of civilizations. Therefore, the topic is extremely important, but the TRUTH IS WE ARE BEING MASSIVELY LIED TO, WHILE NOBODY REALLY KNOWS!

Tue, 11/20/2012 - 15:05 | 2999496 centerline
centerline's picture

Always the same key word - "Growth".  Yet no one stops to ask why or address the clear lack of sustainability.

Tue, 11/20/2012 - 15:07 | 2999503 Newsboy
Newsboy's picture

Seneca's Cliff Ahead!

Uh, brake or gas?

Tue, 11/20/2012 - 16:41 | 2999840 Metalredneck
Metalredneck's picture

Hit the nitrous.

Tue, 11/20/2012 - 15:10 | 2999508 machineh
machineh's picture

'Growth in service productivity in contrast is low and declining'

... and is actually negative in government, the value-subtraction sector of the economy.

Tue, 11/20/2012 - 15:18 | 2999527 Being Free
Being Free's picture

CAGW - fail

Tue, 11/20/2012 - 15:19 | 2999531 XitSam
XitSam's picture

Zero growth is a best case scenario.

Tue, 11/20/2012 - 15:25 | 2999535 BlackholeDivestment
Tue, 11/20/2012 - 15:23 | 2999548 JustObserving
JustObserving's picture

Growth is an easy number to manipulate.

If real growth had been zero but I understate inflation by 3%, then, voila, you have 3% growth.

It is quite clear that we have been understating inflation for quite a few years (see Shadowstats - it claims inflation is understated by 6% to 8%).  So, conversely, we have been overstating growth.

If we get 0% real growth, we are doing better than during the last 5 years.


Tue, 11/20/2012 - 15:26 | 2999556 woggie
woggie's picture

the beast is on the gobble and all that matters is we're all headed for it's belly

Tue, 11/20/2012 - 15:27 | 2999562 Brit_Abroad
Brit_Abroad's picture

Just somebody else who fails to join the dots. WTF !

Waste of time reading this junk.

Tue, 11/20/2012 - 15:34 | 2999583 grid-b-gone
grid-b-gone's picture

There is nothing wrong with zero growth. Physically, most of us do little growing after 18 yrs, and few show much growth mentally, socially, or emotionally beyond that age, either.

Why expect a country to exhibit high growth after 236 years of fantastic development?

Quit with the inside closet door tick marks, already. Coast.

The only problem is that we borrowed against future growth. The future is here, but there is little growth, so we are using our fiat to try to produce growth artificially.

Living on artificial growth is like riding a pool wave - action that gets you nowhere.  

Tue, 11/20/2012 - 15:48 | 2999631 ejmoosa
ejmoosa's picture

Yet our growth has not stopped because of natural reasons.  Instead the heavy hand of the Federal government has crushed the economy. 


Those shackles will be thrown off, and growth will resume.

Tue, 11/20/2012 - 16:06 | 2999688 lunaticfringe
lunaticfringe's picture

I cannot imagine the infantile brain of the person that gave you a down arrow...heh. You are a visionary.Often, I have remarked on just how un evolved and static our population is. Bravo.

Tue, 11/20/2012 - 17:38 | 3000005 GernB
GernB's picture

There is one thing wrong with zero growth. We have an economy that is currently structured so it can only function if there is growth.

Tue, 11/20/2012 - 15:59 | 2999609 earleflorida
earleflorida's picture

ya know... as we all know today, that the real drag on the economy starts with energy:

start building 'Thorium Nuclear Power Plants', while simultaneously manufacturing transferable mobile modules throughout the country, period!

don't say it can't be done, for it was prototype'd quite successfully in the late  50's, 60's and early 70's in the good ole usa, but was mothballed for the plutonium breeder reactors. why you ask? too build out our nuclear weapons arsenal!

Thorium doesn't melt Up or Down,'s quite stable using light-water reactor-- while its cost efficiencies are minuscule to service and maintain.

that was ~50 years hence... time to move onward and forward.

Ps. since the mid-90's the DOE has done numerous test analysis --- it seems our stride in nuclear physics makes it abundantly clear that this should and must be the alternative to take having to do with the unusual seismic activities throughout the globe. remember... all it takes is one, lest we forget the still-hot 3Mile Reactor debacle-- America's Chernobyl ?


Tue, 11/20/2012 - 16:02 | 2999677 Winston Churchill
Winston Churchill's picture

The Seven Sisters. and the MIC might not be too happy with that.

Which is why WWIII is the more likely scenario.

Looks like we might all go out with a blaze of light.....

Tue, 11/20/2012 - 16:36 | 2999819 falak pema
falak pema's picture

the nightmare of the Bush clique after what they've done to the world having "liberated" Irak and made USA top dog oil patch :

The seven Sisters of old end up as the Seven dwarfs of Snow White!...

Who changed the damn script on that?

Grantham...Grantham you shill! 

Tue, 11/20/2012 - 20:21 | 3000438 negative rates
negative rates's picture

Don't forget the seven years of feast, and then seven years of famine.

Tue, 11/20/2012 - 15:54 | 2999650 John Wilmot
John Wilmot's picture

The threat to growth is not resource-depletion, it is economic interference by the State which prevents capital formation and investment. Inflationary monetary policy is first on the list of harmful interventions: depressing interest rates and pushing up consumer prices retards capital accumulation. Then, this monetary policy and every other economic intervention (there is not a single market/industry which is not in some way regulated, taxed, subsidized, and thereby distorted by the federal government) distorts the allocation of what capital does form, so that resources are directed to less productive enterprises than they otherwise would have been.

You know the New Deal era policy of destroying milk to raise prices for the benefit of dairy farmers? That is the essence of every kind of State intervention; in most cases the destruction of resources is only less blatant and obvious. Every intervention by the State destroys scarce resources for the transitory benefit of some special interest.

Tue, 11/20/2012 - 16:19 | 2999745 American Sucker
American Sucker's picture

"We can infinite growth on a finite world if we have the right regulatory regime!"

Tue, 11/20/2012 - 17:03 | 2999886 John Wilmot
John Wilmot's picture

I'm sorry, what's your point sucker? Are you informing me that resource are scarce? Ah, yes, thanks for that, I didn't know. /sarc

Resources scarcity is the starting point for economics. If resources were not scarce there would be no need for economics. Economics is the science of using scarce means (resources) to achieve given ends (as determined by consumers). What quantity of resources exists in nature is irrelevant, as it is entirely outside of our control. The question is: how do we best use the resources that do exist? The answer is that resources are allocated to more productive uses by the market than by the State. It's precisely when resources are scarce (i.e. always), that we can't afford to let the State waste them.

This notion that resources are scarce, and therefore the State must intervene to conserve them, is a non sequitur. Ironically, many of the most prominent "peak-everythingers" today are the same people who, a few decades ago, were heralding the immanent arrival of a post-scarcity world, and calling for the abolition of capitalism as a consequence. Funny how the argument took a 180 degree turn (everything is superabundant to everything is almost gone), and yet the prescription (central economic planning by the State) remains the same? Funny how that works...Kind of like how the same people who were saying we need a world socialist government in 1970's to fight global cooling are now saying we need a world socialist government to fight global warming...or swine flu....or alien invasion...or whatever the crisis du jour.

Tue, 11/20/2012 - 22:07 | 3000788 earleflorida
earleflorida's picture

indeed, mr. wilmot :-))

Tue, 11/20/2012 - 17:40 | 3000012 GernB
GernB's picture

Technology changes how fininte a resource is.

Wed, 11/21/2012 - 04:46 | 3000174 Radical Marijuana
Radical Marijuana's picture

Yes, one of the most important points surely is that:

Technology changes how fininte a resource is.

However, the basic parameters of those systems are what are the most surreal in human societies. Human societies are dominated by their biggest bullies, spouting bullshit, which they back up with coercion. All technologies were developed, or not allowed to develop, by those overall considerations. The biggest questions are HOW do we eventually come to some dynamic equilibria, given that endless exponential growth is ABSOLUTELY IMPOSSIBLE! By definition, it is the death controls which limit growth. Sooner or later, those return to being unavoidable, as they have evolved throughout history, to create the society we live in NOW, that was able to grow exponentially during almost that entire history, because we kept on developing new technologies, in the context of a fresh planet that could be strip-mined with those new technologies!

In the end, (and always, to some degree) the murder system is the MOST important technology, which governs all of the rest, through the money system, and therefore, the decisions regarding what gets done, and what does not. The paradoxes there have resulted in us doing almost everything as BACKWARDS as possible, in light of the FACT THAT ENDLESS EXPONENTIAL GROWTH IS ABSOLUTELY IMPOSSIBLE. Therefore, we are probably going to overshoot, by running off a cliff. The USA is primarily being deliberately destroyed, by people who have a global agenda, which includes insane things like that, as parts of its global goals! The failure of the USA to quantitatively grow SHOULD be seen as a good thing, because there should be better qualitative changes made to happen instead. All of that is theoretically possible. However, insane eruptions of mass murder, and collapse into chaos, are way more probable instead, since saner discussions about human ecology, which is still at the center of the emerging industrial ecology, are deliberately denied and suppressed, and practially non-starters within the currently established systems, which are based on triumphant FRAUDS, BACKED BY FORCE.

It is practically impossible to sanely discuss alternative technologies, without the alternative life styles that must go with them, and the central feature to those must be alternative death controls. Since those are almost totally suppressed taboo topics, we rush towards doing way, way too much of the same old things, which will end with more destruction than ever happened before in human history.

MEANWHILE, there will also be more creativity than ever before, happening at the same time, and somewhere in that there may well be something that MIGHT become a game changer beyond our ability to imagine now. There MIGHT be some astronishing new basic science breakthroughs ... However, that would never allow us to escape from the final imperative that there MUST be some murder system, as the central feature of everything we ever do.

Tue, 11/20/2012 - 16:14 | 2999724 q99x2
q99x2's picture

Build a wall around Washington DC and don't any of the traitors into the country. Stop importing anything and everything. Require total self-sufficientcy for the US and watch what happens with GDP. This is America. Throw the traitors out.

Tue, 11/20/2012 - 16:16 | 2999733 Flakmeister
Flakmeister's picture

Hey Jeremy, I will repeat what I said earlier today:

Well, what do you expect if you pull forward demand through financialization and then fail to increase the oil supply to pay for it all??

Tue, 11/20/2012 - 17:22 | 2999794 falak pema
falak pema's picture

hey Flak, you're not buying the current jargon of: "USA, USA! We'll be auto sufficient in 2020 and exporting to China in 2030!

Thanks to frack gas Marcellus and Bakken gone viral, in CA and San Antonio! USA top producer of oil in 2030!"

What's the prob Flak? 

USA has no supply problem !

Eat your heart out Chavez! 

This guy Grantham is a loser; USA now in super cycle commodites! 

What say u to this song of "yes we can!"...

Something tells me you know how to count between the lines.


Tue, 11/20/2012 - 18:23 | 3000151 Flakmeister
Flakmeister's picture

Preaching to the choir...

but many here should check out

Peak, What Peak?

by none other than the chairman of the Department of Petroleum & Geosystems Engineering at The University of Texas at Austin...

Tue, 11/20/2012 - 16:25 | 2999768 Poetic injustice
Poetic injustice's picture

0% growth is optimistic scenario, discounting accounting gimmicks it is unreachable.

Tue, 11/20/2012 - 16:26 | 2999777 The good doctor
The good doctor's picture

 New slogans for the  Obama Administration:      Obama,  Managing our national decline since 2008.       Or:  The Obama Administration, where making Jimmy Carter look competent is what we do.



Tue, 11/20/2012 - 16:30 | 2999783 Missiondweller
Missiondweller's picture

The major problem with measuring growth in GDP is that it doesn't recognize the difference between the productive economy (which creates wealth) and the govornment's portion (which is a use of wealth). Thus:


GDP = private consumption + gross investment + government spending + (exports ? imports), or

GDP = C + I + G + (X-M)

Is a terrible measure of our wealth and productivuty. A more accurate measure would exclude the G, as this is the true tax base.

Tue, 11/20/2012 - 16:31 | 2999796 akak
akak's picture

Missiondweller, that is an excellent point that cannot be made often enough.

GDP is truly a spurious and all-but-meaningless measure of a nation's gross PRODUCTIVE economic activity.

Tue, 11/20/2012 - 16:46 | 2999852 peekcrackers
peekcrackers's picture

Plus 1 Missiondweller

GDP Is the filling in the twinky .. sweet from artificial ingredients.



Tue, 11/20/2012 - 16:52 | 2999867 falak pema
falak pema's picture

you have hit a good philosophical point : is society econocentric or homocentric. Are we putting man first or the economy first, aka the rule of the more productive, as what society is about...

Since the days of Greece and Jesus, man came first...but both Pericles and his hegemony as Caesar and his dictatorship questioned that. The powerful decide to whom Lex Romana practice we are not equal before the law.

As the Enlightment said "in theory"...Justice precedes the Republic, aka the power equation.

In fact, Power has always preceded justice, whence the eternal conundrum. We act differently to what we affirm as our value systems.  

Man is a contradiction. 

To come back to GDP, the government investment is in intangible/qualitative aspects of societal growth that are not immediately productive, like education, health care, infrastructure; but are as ciment of society. Try putting a price tab on that!

WHere is the trade off between short term market index investment and longer term societal index investment? 

Tue, 11/20/2012 - 18:01 | 3000073 GernB
GernB's picture

I would take it as a given that a measure of useful productivity is a measure or the prosperity of the people. If the members of a society can produce 10x as many goods and services tomorrow using the same resources as they used today, then all other things being equal, indivuiduals should be able to afford 10x as many goods and services tomorrow as they did today. Thus they are more prosperous.

This equation holds true as long as the goods and services are things people want, regardless of whether they are eduation, health care, or infrastructure. I don't see any rational basis for thinking these things are somehow special, other than historic precedent. In theory, if people need education, health care, or infrastructure, then they don't need government to provide them, they only need some organizing force to provide them at a price they can afford. The more prosperous they are the more education, health care, or infrastructure they can afford.

The more competitive pressure there is on the producers of education, health care, or infrastructure, the more pressure there is one workers and providers to find ways to be more productive. In being more productive they make more services available to all at a better cost. In relegating health care, education, and infrastrucure to being government functions you are removing the pressure to be competitive and ensureing less prosperioty, which translates directly into higher costs and lower quality for everyone.

Tue, 11/20/2012 - 18:16 | 3000108 falak pema
falak pema's picture

So do you consider that education and infrastructure are a PREREQUISITE to being quantatively and qualitatively productive, or NOT?

Also that quantitative evaluation of value creation can be a mirage per se, as new technology is qualitatively better initially and becomes quantitatively better if there is an environment to encourage direction change. Like starting the race to the moon or seeding Internet. 

Its education and governement fed research projects that often create these openings. Its the short term market reflex that often resists this change as oligarchy structure is for status quo. Enlightenment comes from education in the broader sense. And that has no price tag to it. Its the very essence of civilization. 

The oligarchy market never creates a Galileo, its resistance to status quo that creates a Galileo. 

Tue, 11/20/2012 - 16:39 | 2999830 Chupacabra-322
Chupacabra-322's picture

No more imports.  Destroy the Federal Reserve.  Arrest The Criminal Executive, Criminal Legislative, Criminal Judicial Branches  and Criminal Agencies.  Problem solved. 

Tue, 11/20/2012 - 16:47 | 2999854 geewhiz190
geewhiz190's picture

JG owns a hugh percentage of "growth stocks" in his fund, added to things like ESRX and MCD plus a boatload of HPQ in the 3rd quarter.  no wonder he's" down" on growth

Tue, 11/20/2012 - 16:55 | 2999880 Being Free
Being Free's picture

"We need to move aggressively with capital – while we still have it – and brain power to completely re-tool energy, farming, and resource efficiency. We need to do all of this to buy time for our global population to gracefully decline. It can certainly be done."

Reads like the script to a central planners wet dream.  "We need...while we.  We need...for our..."

What "We" need to do is get "our" fucking hands out of "our" neighbors pocket and stop trying to centrally control every last detail of peoples lives.  "We" need to stop manipulating the economy and in the process destroy "our" wealth, because "we" think "we" know all the fucking problems and answers.  "We" don't.

Be Free. 

Tue, 11/20/2012 - 17:12 | 2999921 enoch_root
enoch_root's picture

Bingo, we have a winner ... whenever someone says "we need to ... " run a mile, no, leave the country. It belies a deep-seated delusion that there is a "we" and they could actually do anything right on behalf of everybody else ...

Pasted from mother of another ....

"We are now entering the long drawn, out years of the Great Stagnantion it will go down in history as an example of folly only achievable by centrally-planned banking and economic hubris equalling the insanity of the emperors of Rome and the arrogance of the Kremlin of USSR.

I'm expecting the Great Stagnation to last until 2030, possibly until 2040 ... central banks have massive resources at their disposal (literally the wealth of nations) but that is not to say that they are capable of directing that wealth efficiently or even for the betterment of humanity. They know enough to be dangerous, in that they can get things right just often enough to remain somewhat credible and maintain power (violent revolution is probably not going to occur). But they cannot, by definition, have the complete knowledge needed to wisely allocate capital, let bankrupt institutions fail, burst bubbles, etc in a manner as effective as a distributed, free market capital system.

So the mistakes will go on, economies will stagnate indefinitely under the grey, stultifying hand of the massive central bank "liquidity for losers" programs. Uneconomic, corrupt entities will be rewarded with great riches, and squander it, while honest, hard-working entrepreneurial activities will never get off the ground, or face destitution under onerous taxation regimes.

The Great Stagnation has arrived.

What's your strategy?"

Tue, 11/20/2012 - 18:16 | 3000117 GernB
GernB's picture

My reaction exactly. If by "we" the author means consumers driving industry then I agree, and the market will take care of it as the cost of these things increases and the pressure to re-tool makes it cost effective for consumers (who will ultimately have to pay the price of the re-tooling).

All central planning of a new energy or farming infrastructure will do is make it more costly for everyone as planners misallocate capital in ways consumer would not support and arrive at less effective centrally planned solutions before the market is perpared to pay for them.

What central planners can't  seem to get through thier thick heads is that there is no more efficient machine at solving problems when they need to be solved and in a cost effective way than truely free markets. Because free markets lets individual consumers decide what they want and when they want it.

Tue, 11/20/2012 - 18:12 | 2999958 Aurora Ex Machina
Aurora Ex Machina's picture


Given that GMO have spent some of their hard-earned money to advertise on ZH, and the rare fact that they're an outfit in the wilds of America that acknowledge climate change [hint: If you deny Climate Change, no-one gives a fuck, the entire security apparatus of the USA has already worked it into the plan, costed it, and is planning for the worst], then I'm willing to give some free serious analysis. Because, to be honest, ZH needs a kick in the ass when it comes to Climate Change (hint: there's no-one who cares where it's coming from, it's coming. Deal with it).


So, a skim read hooked me, I'll put my-money-where-my-mouth-is and actually analyse this report. [15 mins hit, high density]


A) First error: Average working hours between 1970 and 2012 have risen FOR SALARIED WORKERS. Not fallen, not even close. The USA is #1 in hours worked / week / employee, and has been for some time. (Newsflash: Greece is like #5 on the global list). Author got confused about the charts he was referencing. Hint: greater un-employment -> less average / populace hours worked. Doesn't mean your average worker worked less hours and this isn't even getting to the fine tuning of subsidary / temporary workforce and under hours low-level retail scams. (i.e. Never hit 40 hrs work because benefits, which Wallmart and so on exploit to the max).

B) Oil: Brazil over the Sauds? Canada is hitting 2,149 (thousand) imported barrels / day, Brazil is 259. That's less than Angola, you muppet. Yeah, sure it has risen by +1892%, but that's not hard from the pitiful basis point. The USA ain't never paying $150-200 for a Brazillian barrel of oil.

C) Resource costs are based on futures. Guess who has a) the largest subsidies on basic resources and b) the largest market in futures on said resources? Hint: It ain't fucking Angola.

D) Claiming that food prices and flooding damage "won't increase until 2030" is like WUT? Try using Google, mother-fucker. Food prices are slated to rise ~16.7% alone by January in non-protected markets, and I'm looking at $50billion in flooding costs in NW America as we speak. Did you miss the huge fucking drought in the US alone this year? Monsoon miss in Asia?


Ugh. This is like trawling through a schizophrenic's brain. He's correct on the fallacy of "Clean" coal, then wanders off into insanity about fracking ~ the industry isn't anything like he imagines.


And then I was done, as my free 15 minute analysis window ran out, as it was far higher $ cost than the sum paid to ZH for this shit. Don't run Friday night humour early just 'cause of Black Friday. Yes: me looking though this tripe should have cost ZH more than it was paid, but hey ~ that's Pirate Capital for you.

[edit: I apologise for the profanity, but I went into reading the actual report in good faith expecting some kind of decent analysis. My points A-D hit within the first two pages of guff, at which point I was irked. Garbage]





Two men write insane paper and expect investors. Muppets beware.

Tue, 11/20/2012 - 17:46 | 3000034 Grin Bagel
Grin Bagel's picture

SmallGovtnow = obvious troll

Tue, 11/20/2012 - 17:47 | 3000035 Grin Bagel
Grin Bagel's picture

SmallGovtnow = obvious troll

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