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Guest Post: Bailout Lost Opportunity Cost

Tyler Durden's picture




 

Submitted by Alfred Collins

Bailout Lost Opportunity Cost

This Bloomberg article about German utilities giving away power got me thinking what our world would look like if the trillions in bailout money had instead been spent to build alternative energy infrastructure.

From Bloomberg:

“The 15 mile-per-hour winds that buffeted northern Germany on July 24 caused the nation’s 21,600 windmills to generate so much power that utilities such as EON AG and RWE AG (RWE) had to pay consumers to take it off the grid.”

“You’re looking at a future where on a sunny day in Germany , you’ll have negative prices,” Bloomberg New Energy Finance chief solar analyst Jenny Chase said about power rates in wholesale trading. “And a lot of the other markets are heading the same way.” source link

I will use only simple round numbers and calculations to make my point.

Let’s say the bailout money (remember, we have not finished bailing yet) is about $20T, and alternative energy infrastructure costs $10 per watt (it has been getting cheaper recently).  That represents potentially 2TW (TerraWatts) peak of electrical energy generation capacity.

Building an infrastructure this large would provide employment for millions of people for several decades.  Again, using very rough numbers, this would provide employment for perhaps as many as 20 million people for twenty years.

Don’t get me wrong; I am not saying I support the government imposing taxes on us to pay for this.
I am just expressing the cost of the bailout in terms of jobs and the amount of energy infrastructure this amount of spending (preferably by private sector enterprise) would provide. Consider this as the lost opportunity cost of the bailout.

Which would you rather have done with the bailout money: 1) propped up zombie banks for three years, or 2) provide 2 TerraWatts peak electrical generation capacity and employment for 20 million people for 20 years?

This is the lost opportunity cost of the bailouts.

 

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Sat, 10/01/2011 - 20:30 | 1729889 zorba THE GREEK
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I vote for choice #2 Monte.

Sun, 10/02/2011 - 00:53 | 1730230 LowProfile
LowProfile's picture

Annnnd...  Choice number 2 is..!

THORIUM!

Imagine if we had spent those trillion$ on thorium fueled power plants...

Sun, 10/02/2011 - 01:16 | 1730243 nachtliche
nachtliche's picture

You can't get money unless there is a military application like depleted uranium.

Sun, 10/02/2011 - 01:40 | 1730263 bid the soldier...
bid the soldiers shoot's picture

Don't you mean Thorazine? :o)

Sun, 10/02/2011 - 03:58 | 1730363 AldousHuxley
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They don't want you to see that the revolution can be real.

 

Occupy Maine - rain or shine

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

 

Occupy Asheville, NC

http://www.youtube.com/watch?feature=player_embedded&v=8xTDvopzRIU

http://www.mountainx.com/article/35891/Occupy-Asheville-opens-with-assem...

 

Occupy Seattle

http://www.youtube.com/watch?v=my0-m2_apZ8

 

Occupy Denver in front of Federal Reserve

http://www.youtube.com/watch?v=1Ap6KEfVoZM

http://www.youtube.com/watch?v=lop4HllGKcU

 

Occupy Austin, TX

http://www.youtube.com/watch?v=53lsRCn4FHg

 

Occupy San Antonio, TX

http://www.youtube.com/watch?v=INgl_jHkfm0&NR=1

 

Occupy Portland

http://vimeo.com/29899204

 

Occupy Los Angeles

http://www.youtube.com/watch?v=FZr5NS19mw0

 

Occupy San Francisco - Marines joining in

http://www.youtube.com/watch?v=QPQOU1KNF0U

http://www.youtube.com/watch?v=qIgP1FlqRnA

 

Occupy DC in starting protest against corporate personhood

http://www.youtube.com/watch?v=uABmme8C_7c&feature=player_embedded

 

Occupy Chicago in front of the Federal Reserve

http://www.youtube.com/watch?v=luON3CNuq3A&NR=1

 

Occupy Boston - "Fuck the Fed"

http://www.youtube.com/watch?v=0fV0YjQQzYk

 

Occupy Wall Street New York   500 arrested on Brooklyn Bridge

http://www.youtube.com/watch?v=yULSI-31Pto

 

More launching near you: http://www.occupytogether.org/

 

 

It is a class war. 1% vs 99%. Make banksters pay!

Sun, 10/02/2011 - 12:30 | 1730870 MiddleMeThis
MiddleMeThis's picture

I happened to mention the Occupy movement to one of my friends/co-workers.  I consider her to be fairly intellegent and aware, but she had absolutely no idea what I was talking about.  It just goes to show, she is only intelligent and aware about those things which the MSM feeds to her. 

As John Mayer so eloquently put it...

"And when you trust your television
what you get it what you got
Cause when they own the information
they can bend it all they want."

Sun, 10/02/2011 - 17:05 | 1731413 bid the soldier...
bid the soldiers shoot's picture

You mean like stock, metal and currency traders? :-) < sarc >

Sun, 10/02/2011 - 17:09 | 1731400 bid the soldier...
bid the soldiers shoot's picture

Aldous, You better keep out of trouble. It's not 1776 any more. The King had horses, we had horses. The king had muskets, we had muskets. The king had powder, we had powder. The King had balls, we had BALLS.

Flash forward to 2011. The PTB has nerve gas, we have automatic weapons. TPTB have drone missiles. we have molotov cocktails. TPTB have an army in training for 10 years with experience in Iraq and Afghanistan, we have training in pick-up basketball and touch football on Saturdays in the Commons.

I fear for the Bloomsbury Light Brigade, Aldous. Here they are outnumbered.
:-)

Sun, 10/02/2011 - 19:03 | 1731636 UBIGDummy
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UHM,  choice number 2 all ready happened, its failed company called SOLYNDRA.

Sat, 10/01/2011 - 20:34 | 1729890 RobotTrader
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Wow. I guess that totally debunks the "blackouts" all the Peak Oilers were predicting.

No wonder the solar industry is imploding.

Way too much power to go around, to the point where consumers are getting paid???

Sat, 10/01/2011 - 21:35 | 1729971 illyia
illyia's picture

Exactly - I think about this all the time.

And, Report From Iron Mountain...

Sun, 10/02/2011 - 01:30 | 1730253 That Peak Oil Guy
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Believe it or not, if you harvest too much wind then you risk disrupting the weather cycles of the planet.  Indeed, there is no free lunch in an entropic universe.

Here is a summary of a paper which estimates that our limit for wind production on the planet is 1 TW:

http://www.theoildrum.com/node/8322

Sun, 10/02/2011 - 01:53 | 1730272 bid the soldier...
bid the soldiers shoot's picture

The Bible said that a jillion years ago:

"For they sow the wind, and they shall reap the whirlwind" Hosea. (whoever he was.) :-)

Sun, 10/02/2011 - 02:02 | 1730276 agrotera
agrotera's picture

That is perfectly logical.  Do you know if oil and gas acquisition affects technonic plates?  If a substance similar to what was removed from the ground doesn't go in to replace the withdrawal, it would seem that this would cause disruptions.  I see that Exxon commercial for gas exploration and it makes me wonder about the New Madrid fault and the Fayette discovery? 

Sun, 10/02/2011 - 06:03 | 1730430 Hurdy Gurdy Man
Hurdy Gurdy Man's picture

I agree.  I keep thinking of "Lives of a Cell" and how the macro & micro mirror each other.  I was wondering what the human-bilogical equivalent of joint fluid would be to the Earth.  Oil seems like a candidate, but not sure... for the earth it could be like a certain density or kind of rock that allows sliding, for all I know.  Oil seems like a candidate, but I don't know for sure.  If that's the case, perhaps the Earth makes the oil (non-biological oil), in which case there's no tipping point, could go on forever messing things up, and the scarcity of oil is something that is not real, like Gold, but just controlled by Big Oil the way deBeers controls diamonds.

 

Sun, 10/02/2011 - 02:05 | 1730279 agrotera
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.

Sun, 10/02/2011 - 11:35 | 1730780 gmrpeabody
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That goes without saying.

Sun, 10/02/2011 - 19:06 | 1731643 UBIGDummy
UBIGDummy's picture

UHH, so on that logic we should knock down all 4 story and higher buildings because they are disrupting the airflow of the trade winds.  

THAT S JUST F IN DUMB

Sat, 10/01/2011 - 22:07 | 1730000 DormRoom
DormRoom's picture

You're using a strawman argument.  He's saying that trilliions of dollars invested into alternative energy technologies, innovation, and infrastructure, would give consumers more low cost energy days, as more electricity is created from alt-sources, and put into the smart grid.

 

Low cost energy would help consumers, and businesses, and remove US dependency from petro-terrorist states, like Iran.  It would be a public good, like the US National Highway System.

 

I'd rather have cheap energy than saving an overbloated banking system that over-leverages, doesn't help the real economy, but props up the debt economy, using financial engineering to obscure risk, so more debt can be applied.

 

China is already orienting its economy towards a green tech revolution, so it can climb up the value supply chain, and dominate this multi trillion dollar market.

Geography is destiny.  The British industry revolution was faciilitated by the over-abundance of cheap coal.  Steel was foundational to the  American industrial revolution.  China has the largest deposits of Rare Earth Elements, that are used to make super-magnets ,necessary for wind tubine, and electric engines.  It also has some of the largest solar fab plants in the world.

 

If you want to understand the Chinese mind, here it is:

"I don't care if the cat is white, or black.  As long as it catches mouse"

America is paralyzed between Democratic ideologies, and Republican ideologies, and this has created a huge deadlock, and bottleneck in the political system, that it's underminding the economic super-structure.

Sat, 10/01/2011 - 22:15 | 1730025 CharlieSDT
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Excellent post and true.  The Chinese will do whatever it takes to rule the world.  Will America continue to do so?  That can only lead to war.

Sat, 10/01/2011 - 22:54 | 1730080 Libertarian777
Libertarian777's picture

hahaha. what a funny comment. paralysed between repub and democrat ideologies. newsflash, it's the same ideology. they will debate cutting 50 vs 100 billion in spending but both will vote yes on a $850bn pentagon budget.

Sat, 10/01/2011 - 23:25 | 1730119 Ahmeexnal
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Giving trillions to alt energy would have resulted in thousands of Solyndra ponzi energy outfits.

Since we all know, that when it comes to handouts, "they" choose who the recipients are.

 

 

Sun, 10/02/2011 - 03:29 | 1730342 AnAnonymous
AnAnonymous's picture

Wow. I guess that totally debunks the "blackouts" all the Peak Oilers were predicting.

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

How? This US cheap propaganda simply parts between people who wish to believe in it, want others to believe in so they can monetize it and people who see it for what it is: US cheap propaganda.

First, until the conditions are met, it is generally stupid to draw any inferment contradicting logical conclusions (Occam's razor)

Currently, the world is still abundant in oil. Drawing conclusions that an unneeded, surplus energy source might compensate for a lack of oil is stupid because the lack of oil is not actual.

Germany is still awashed with oil and anything coming additionally is just that: surplus. And abundance is that. But abundance is not scarcity.

When reading the article, one piece of advice imposes itself: US citizens should stop pushing Indians and force them into a programmed extinction because in a near future, the world will require experts in wind and sun dances.

Cause drawing inferences from a specific climate on a given day has nothing to do with the continuous flow given by oil extraction. Storing electricity...ummmh... Not that efficient.

So when your energy consumption depends on a windy or a sunny day, well, better to have experts capable of calling the wind or the sun.

Sat, 10/01/2011 - 20:35 | 1729891 BigDuke6
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For this fantasy to have been realised a default would have been necessary.


When Argentina defaulted, not only did the government default but they forced a private default. If you had a debt in US dollars in Argentina prior to the default, you were forced to pay it back in peso.

It was illegal to make payment in US dollars.

Likewise if you had a US dollar asset you got back peso. A dollar deposit in Citigroup in Buenos Aires became a peso deposit. If you really wanted to keep your dollars you needed to make your Citigroup deposit in New York.

The forced private sector default was necessary for Argentina. The Argentine banks all had lots of US dollar funding. If you devalued without forcing their default then they would all have uncontrolled defaults (disaster) and the country would lose its institutions. 

The same applies in the USA or even Greece. If the Greek government were to devalue the new drachma (to perhaps one-third of the value of the euro) then the banks (which are loaded with Greek sovereign paper) would default. 

The Argentine economy was doing ok after the devaluation. The lesson was that devaluation worked – provided you simultaneously forced private sector default.

So making this article another opportunity that went by due to greed and corruption.

Sat, 10/01/2011 - 21:11 | 1729939 Old Poor Richard
Old Poor Richard's picture

The banksters wouldn't have defaulted on me.  Or on anybody else I know.  The giant banks would have imploded together, being wiped off the map, leaving behind responsible banks to step up.  They could have spent nothing on bailouts, let the chips fall, and Paulson and Bernanke could have provided necessary liquidity to the solvent banks left over to keep businesses in business.  Instead  they bailed out the criminal banks, the criminal banks refused to lend out the bailout money, and the economy further contracted.  Those cascading defaults would have been vastly preferable economically, and would have been morally just to boot.

 

Sun, 10/02/2011 - 00:55 | 1729983 BigDuke6
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i agree thats what they should have done but it wasn't. people should be mad.

so the road ahead and how to travel it is important.

its important to realise that the usa elite realise that they can spend as much as they like while the usa can keep borrowing... until you run out of dollars and can't pay anyone.

the politicians in order to hold onto power will keep borrowing enough to kick the can down the road while they sell assets to kick it further.

expect more bad decisions to be made...maybe my point is obvious.

Sun, 10/02/2011 - 12:16 | 1730845 Central Bankster
Central Bankster's picture

 It is very probable the financial crisis would caused a wave of public and private defaults (IE deflation/credit contraction) beyond the scope that you are imagining.  FDIC would have needed a bailout, pensions would have been destroyed, insurance companies collapse, and obviously complete chaos in the equity/bond markets so those 401ks might lose 80-90% of their value.  All of these things I am OK with, as I do not pass judgement about the market pricing in reality (eventually).  However, I think it is grossly optimistic to think you and those you know would not be grossly impacted in many ways that are unknown and unknowable at this time.

Sat, 10/01/2011 - 20:45 | 1729893 bob_dabolina
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Cue the left wing enviromentalists. 

Don't forget we couldn't build an oil pipeline in Alaska because it disrupted the mating grounds of the caribou.

But for just as long, massive fiberglass blades on the more than 4,000 windmills have been chopping up tens of thousands of birds that fly into them, including golden eagles, red-tailed hawks, burrowing owls and other raptors.

http://www.usatoday.com/news/nation/2005-01-04-windmills-usat_x.htm

That article was from 2005 so the death toll must be in the hundreds of thousands if not millions by now. This is like the Auschwitz for birds.

These wind turbines have Hank Paulson in tears.

Sat, 10/01/2011 - 21:07 | 1729935 Seize Mars
Seize Mars's picture

Cue the left wing enviromentalists. 

Don't forget we couldn't build an oil pipeline in Alaska because it disrupted the mating grounds of the caribou.

Environmentalism in the domestic case is for one good reason: the USA needs to export dollars to keep the fiat money shit-show going. That's what oil is, a big facilitator of the export of dollars. It's all about exporting inflation in big size. So they can't allow domestic drilling, and they need a good excuse. Cue the hippies and the spotted owl.

Sat, 10/01/2011 - 22:57 | 1730083 snowball777
snowball777's picture

They run into skyscrapers, bridges, and airplanes too...should we stopping building and using them?

Sat, 10/01/2011 - 23:25 | 1730121 bob_dabolina
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We'd save a lot in energy costs ;)

Sat, 10/01/2011 - 23:02 | 1730088 barnabeg
barnabeg's picture

You're ridiculous. So you would rather live in a world where corporations can pollute at will, where we choke on the air we breath, poison ourselves with the food we eat, and biodiversity is a thing of the past? Environmentalist are trying to preserve the inhabitability of our planet. I think we have done enough damage for future generations to despise us. Nature is our most important resource. We should treat it with respect. We clearly cannot live without it. It, however, will carry on quite well without us. Moron. 

Sun, 10/02/2011 - 00:25 | 1730201 sun tzu
sun tzu's picture

The sky is falling you fucking moron

Sat, 10/01/2011 - 23:29 | 1730127 Ahmeexnal
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... massive fiberglass blades on the more than 4,000 windmills have been chopping up tens of thousands of birds that fly into them, including golden eagles, ....

 

Why would anyone in their right mind toss thousands of gold coins onto the wind turbine blades??

Sun, 10/02/2011 - 06:06 | 1730435 Hurdy Gurdy Man
Hurdy Gurdy Man's picture

I bet there's a technological answer that hasn't been produced yet for birds - like, magnetic fields that steer them away from fields, or something.  I hope something like that comes along.

 

Sat, 10/01/2011 - 20:40 | 1729896 Id fight Gandhi
Id fight Gandhi's picture

The whole point of going renewable was to get off foreign power. Throwing all that money to china to manufacture windmills and solar panels and lightbulbs defeats this purpose.

So instead of the USA paying as it goes for fossil fuels, it goes deep into debt to replace working infrastructure to cut a check to china.

If they want to do renewable, the condition should be made in USA only, or it's just another scam.

Sun, 10/02/2011 - 00:26 | 1730203 sun tzu
sun tzu's picture

0bama = scam

Sat, 10/01/2011 - 20:44 | 1729900 pauhana
pauhana's picture

Not happening if money continues to go to well-connected friends of the political class who waste it on fancy factories.  But maybe tilting at windmills is more cost effective than manufacturing solar panels.   

Sat, 10/01/2011 - 21:01 | 1729925 Old Poor Richard
Old Poor Richard's picture

How 'bout the taxpayers keep that money for ourselves, instead of either giving it to fucktard banksters or giving it to the "green" energy racket?

Sat, 10/01/2011 - 21:03 | 1729928 Seize Mars
Seize Mars's picture

Which would you rather have done with the bailout money: 1) propped up zombie banks for three years, or 2) provide 2 TerraWatts peak electrical generation capacity and employment for 20 million people for 20 years?

This is a very important point to make. This is exactly the underlying theme of the Austrian economists' theory of the structure of capital. Issuing paper money, Keynesian borrowed money / stimulus / bailouts cannot possibly create new wealth, all they can do is falsely motivate people to misdirect their investments.

In other words, this is what they call "malinvestment." What's needed is for people to liquidate all the malinvested assets and get back to work. Big brother, however, keeps on trying to prop up the prices of housing and related paper securities by manipulating the cost of money. More wasted time, resources, heartaches and pain.

End the Fed, and we would see an economic boom.

And it would ensue immediately.

Sat, 10/01/2011 - 21:16 | 1729949 bob_dabolina
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You would not see an economic boom at least if using history as the compass. 

 

 After a titanic struggle, Jackson succeeded in destroying the Bank by vetoing its 1832 re-charter by Congress and by withdrawing U.S. funds in 1833. (See Banking in the Jacksonian Era)

The bank's money-lending functions were taken over by the legions of local and state banks that sprang up. This fed an expansion of credit and speculation. At first, as Jackson withdrew money from the Bank to invest it in other banks, land sales, canal construction, cotton production, and manufacturing boomed.[34] Then, in 1836, Jackson issued the Specie Circular, which required buyers of government lands to pay in "specie" (gold or silver coins). The result was a great demand for specie, which many banks did not have enough of to exchange for their notes. These banks collapsed.[34] This was a direct cause of the Panic of 1837, which threw the national economy into a deep depression. It took years for the economy to recover from the damage.[35
]

 

Sat, 10/01/2011 - 23:07 | 1730097 snowball777
snowball777's picture

As stupid as monetary stimulus is in a debt-deflation spiral, Austrian pipe dreams outmatch it in their sheer ability to ignore economic reality.

What would be the origin of your economic 'boom'?

Unemployment would skyrocket, businesses would close instead of merely hoarding cash, and every financial asset on the planet would be completely destroyed for decades, but you've got the "ensue" part right. You'd replace 'malinvestment' with NO investment.

 

Mon, 10/03/2011 - 20:51 | 1735327 Seize Mars
Seize Mars's picture

Austrian pipe dreams outmatch it in their sheer ability to ignore economic reality.

Human beings have needs. We would go to work each day, making and doing things for other people. No bank or government standing inbetween us, taking our stuff. That activity alone is the central source of wealth. (Not pieces of paper, mind you, but actual wealth).

Your take on the Austrian school is a little puzzling. It is drastically more subtle, complex and powerful of a method than Keynes. Why would you ride a bicycle when you can drive a car? In other words, I think if you read some things about the theory of business cycles and the structure of capital, you would say, "Ah hah, this is exactly correct."

Sat, 10/01/2011 - 23:42 | 1730146 cramers_tears
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Ron Paul wants to END THE FED.

Sat, 10/01/2011 - 21:42 | 1729978 Manthong
Manthong's picture

Hey, what if the government started right away handing out billions for the manufacture of electric cars, solar panels, and other kinds of alternative energy?

That would create jobs and  jump start our becoming more efficient and less dependent on foreign sources to ..  uh..  what?

Oh, that's what the government has been doing all along?

Nevermind.   

Sat, 10/01/2011 - 21:46 | 1729987 illyia
illyia's picture

There is something fundamentally missing in this discussion: What if energy becomes - essentially - free? What happens if relatively few manufacturers are able to produce almost all goods with ever decreasing human laborers?

What about the cloud? Paper pushers, receptionists, insurance agents?

What if everyone goes to school on the web? If manufacturing a gizmo can be done from your 3D printer??

What happens to "the economy" if traditional productive work becomes irrelevant? 

Sat, 10/01/2011 - 21:48 | 1729992 illyia
illyia's picture

And, what does this have to do with debt and national wealth destruction?

Sat, 10/01/2011 - 22:10 | 1730007 sitenine
sitenine's picture

Agreed.  What exactly does suggesting that $20T should have been spent on windmills have to do with anything? Considering how absurd the notion is to begin with, I'm a little surprised that ZH chose to post the story at all.

I guess the author sort of tried to tie it in with, "Building an infrastructure this large would provide employment for millions of people for several decades."  But that statement is totally unverifiable fantasy as well.

The whole post is akin to Krugman's call for alien invasion.  I wasted 2 minutes of my life reading it, and I lost another 5 minutes posting this comment.

Sun, 10/02/2011 - 13:16 | 1730919 AE911Truth
AE911Truth's picture

You might want to waste a little more of your time reading this:

China to invest 2 trln yuan in green economy in next 5 year plan.

Source: http://news.xinhuanet.com/english2010/china/2011-07/17/c_13990879.htm

I think it is verifiable reality that this will provide jobs for millions of employees for many years.

Sun, 10/02/2011 - 16:19 | 1731281 sitenine
sitenine's picture

Thank you for the link - time not wasted.  It is good to see that good projects and forward thinking are still being implemented in economies that can still afford it.

But seriously, 20T Dollar != 2T Yuan, and China doesn't have to borrow the money to do it either.

Also, Americans are so NOT Chinese.

Sat, 10/01/2011 - 23:58 | 1730167 alan.turnate
alan.turnate's picture

Illiya could well be describing a technocracy - which at it's core is to do with removing debt and "wealth destruction". IMNSFHO part of the problem is forgetting that maybe democracy & capitalism are not the path forward, and socialism is not the only alternative.

Sat, 10/01/2011 - 23:37 | 1730138 merchantratereview
merchantratereview's picture

Couple of theories:

The BURNING MAN concept. Spend 6 months of the year building a wooden pyre and 60 minutes burning it down.

The VIRGIN SPACE concept. Go off and tour Mars and Venus.

Or how about MORE TOURISM and ENTERTAINMENT?

If houses, cars and appliances are built to last 100 to 200 years or more, the productivity saved by "the cloud", "3d printers", etc, can also be shifted to CRAFTSMANSHIP AND HIGH QUALITY.

Anything is better than just propping up Goldman and Rothschld for another quarter, that HAS TO STOP NOW.

Sat, 10/01/2011 - 23:40 | 1730143 cramers_tears
cramers_tears's picture

Kurt Vonnegut becomes more relevant.

http://en.wikipedia.org/wiki/Player_Piano

Sun, 10/02/2011 - 09:31 | 1730584 Diogenes
Diogenes's picture

"What happens to "the economy" if traditional productive work becomes irrelevant? "

It already has. Look around.

Sun, 10/02/2011 - 10:11 | 1730643 Debugas
Debugas's picture

this is the way it will happen but what it means is that:

1) main source of income for most people will be dividends from stocks of mega corporations that employ very few people or even none at all (full automation)

2) those who own no capital will die-off or will have to live on welfare provided by the megacorps out of mercy (or to have a reserve stock of labour just in case)

Sat, 10/01/2011 - 21:59 | 1730004 Tunga
Tunga's picture

Plus the First National Bank of Exxon/Mobil has no service fees on their debit card! Plus you get the RFID tattooed right onto your hand!

Oh what a wonderful future we shall have!

Sat, 10/01/2011 - 22:05 | 1730012 Selah
Selah's picture

 

 

"Which would you rather have done with the bailout money: 1) propped up zombie banks for three years, or 2) provide 2 TerraWatts peak electrical generation capacity and employment for 20 million people for 20 years?"

If I was part of the power structure elite, I'd prop up the banks that keep me in power.

Funny how it worked out that way...

 

 

 

 

Sat, 10/01/2011 - 22:06 | 1730015 New_Meat
New_Meat's picture

"what our world would look like if the trillions in bailout money had instead been spent to build alternative energy infrastructure."

It would be equally fubar.

But, as an alternative universe, how about a) no debt to fund this trash and b) no tax collections to do same, while c) stopping the stupid FY end of the year "use it or lose it" contract signings (for "loan" "guaranteez") that have happened this week.

of course, if the tax situation, the rebates, the total market distortion, etc. were relieved, then one might see what a closer-to-efficient market might look like.

ain't holdin' my breath.

- Ned

{Steevie Chew ought to take the honorable road to  perdition}

Sat, 10/01/2011 - 22:09 | 1730019 David99
David99's picture

My feeling is that FED has launched OT with a purpose similar to QE programmes but with a different name. The ultimate objective of FED would be to jack up the Casinos.
Your comments on OT, whether the markets will go up or down are invited please.

Thanks

David

Sat, 10/01/2011 - 22:15 | 1730023 Steroid
Steroid's picture

The deeper we dig (ourself) the bigger the wind(bags).

Sat, 10/01/2011 - 22:50 | 1730071 bankruptcylawyer
bankruptcylawyer's picture

get ready for nawapa...north american water and power association. 

 

it's going to be a huge project to move water from alaska and canada all over the u.s. and it's going to send a bunch of money to the major banks in the name of jobs programs. 

 

 

Sat, 10/01/2011 - 22:53 | 1730078 TulsaTime
TulsaTime's picture

Well, with no bailout, electrical demand would be about 60% of what we normally see. Plus there would be many fewer financial organizations to make the loans for the build out that nobody needed. But we would be closer to a better economy after destroying one layer of sclerotic corporate waste.

Sun, 10/02/2011 - 14:47 | 1731012 AE911Truth
AE911Truth's picture

Viewed differently; instead of sucking $20T out of the economy to pay for the bailout, that amount could be moving through the real economy paying salaries and building retirement accounts while creating locally produced alternative energy infrastructure. Infrastructure which will provide energy more cheaply than oil and coal priced 20 years hence.

Sat, 10/01/2011 - 22:58 | 1730084 tkinfo
tkinfo's picture
  1. Imagine simply canceling the US debt, alone. $220 billion in freed up cash versus paying on the Notes would build a lot of colleges, hospitals, roads, and a heck of a lot more...
Sat, 10/01/2011 - 23:07 | 1730095 SeventhCereal
SeventhCereal's picture

Wouldn't be surprised at all if some of that 2 trillion ended up in those german windmills, lets say $300 million for a low-ball guess. This federal redistribution of wealth whether its in spending programs or bailouts is nothing but thinly-disguised money laundering.

Sat, 10/01/2011 - 23:35 | 1730136 Rodent Freikorps
Rodent Freikorps's picture

Why does our govt. want to destroy us?

Feds go after big oil for 28 bird deaths; ignore 400K deaths from wind turbines

http://hotair.com/greenroom/archives/2011/10/01/feds-go-after-big-oil-for-28-bird-deaths-ignore-400k-deaths-from-wind-turbines/

 

Sat, 10/01/2011 - 23:49 | 1730137 e2thex
e2thex's picture

x

Sat, 10/01/2011 - 23:52 | 1730155 Rodent Freikorps
Rodent Freikorps's picture

From the article.

"The maximum penalty for each charge under the Migratory Bird Treaty Act is six months in prison and a $15,000 fine."

"None of which has deterred U.S. Attorney Timothy Purdon from pressing forward, despite criticism that the case is a targeted effort to advance the Obama administration’s war on fossil fuels. Even the presiding judge has observed that violations of the Migratory Bird Act, which dates to 1918, are normally treated as Class B or C misdemeanors."

A double standard legal system is tyranny. Nothing else.

Sat, 10/01/2011 - 23:53 | 1730156 UnpatrioticHoarder
UnpatrioticHoarder's picture

If trillions had been printed out of thin air and spent on actual goods and services the inflationary impact would have been uncontrollable.

By instead giving it to banks to spend on paper financial products, the inflationary impact is limited. But it also achieves absolutely no tangible benefit for anyone but bankers and their servants.

Sun, 10/02/2011 - 06:48 | 1730463 Tic tock
Tic tock's picture

Or a substantial part of the transfer may have gone on paying down personal debt.

Sat, 10/01/2011 - 23:55 | 1730160 rokka
rokka's picture

Yeah, let make green energy bubble insted of banking-mortages bubble!

(key word - "windy day") .

Sat, 10/01/2011 - 23:57 | 1730166 Stuck on Zero
Stuck on Zero's picture

And think.  Transfer the $3 trillion spent on the war on terror to energy development and we wouldn't have to make war in the Middle East.  Then think that eliminating 50% of all the Federal employees would put 10 million people back to work.  Think about getting rid of income and property taxes and using a VAT only tax.  Another ten million jobs gained.  Eliminate restrictive labor laws and another ten million would go to work.  It's easy.  Vote for Ron paul.

Sun, 10/02/2011 - 00:07 | 1730177 Rodent Freikorps
Rodent Freikorps's picture

What action of our federal government leads you to believe they want to solve anything?

They seem to want nothing more fail.

Why would that be?

Sun, 10/02/2011 - 06:11 | 1730438 Hurdy Gurdy Man
Hurdy Gurdy Man's picture

Sounds great, except the electorate is what's the problem.  The US is like Chechnya.  When there's a light war and local skirmeshes, it's easy to be stolen from.  US politics is the bread and circus of our age.  How can Ron Paul be elected when now for 12 years people have actually "come of age" in a Rovian political discourse model, us vs. them?  a) he can't win because he won't be as good to vested interests (Obama HAS to win, he's been so good to the banks) and b) if he did win, US politics would crush anything that looked like progress.  As a people, we're just plain lost, and it will take at least a generation to unwind this horseshit-wagon of bad thinking that we have learned.

Sun, 10/02/2011 - 14:55 | 1731137 AE911Truth
AE911Truth's picture

I don't think it will take a generation to unwind the bad thinking. We can do it now. It will take a revolution by the people, for the people, of our way of thinking.

Sun, 10/02/2011 - 06:11 | 1730439 Hurdy Gurdy Man
Hurdy Gurdy Man's picture

Sounds great, except the electorate is what's the problem.  The US is like Chechnya.  When there's a light war and local skirmeshes, it's easy to be stolen from.  US politics is the bread and circus of our age.  How can Ron Paul be elected when now for 12 years people have actually "come of age" in a Rovian political discourse model, us vs. them?  a) he can't win because he won't be as good to vested interests (Obama HAS to win, he's been so good to the banks) and b) if he did win, US politics would crush anything that looked like progress.  As a people, we're just plain lost, and it will take at least a generation to unwind this horseshit-wagon of bad thinking that we have learned.

Sun, 10/02/2011 - 00:24 | 1730197 agrotera
agrotera's picture

Other lost opportunities: national security and our country's currency  jeapordized by heavy debt from bailouts that were really legislatively sanctioned HEISTS ( banana republic style fiscal policy)...the failed banks COULD have been unwound and purchased by small/local banks to correct the system...instead we all have to suffer and pay for the myth that was imposed about TBTF and the TRILLIONS LOST in the black hole that is our country's debt now...

imagine if the honest unwinding of the corrupted failed banks had happened, and there was a temporary treasury  facuility--not socialism, temporary unwinding.  And instead of the trillions going into the banks to pump up the market, small businesses could have borrowed at 3% (instead of the 0% banks get) and tell me if THAT wouldn't have created jobs and probably no deficit problem.  Truth goes a long way to heal a nation.

ALL YOU CANDIDATES OUT THERE, END THE FED, AND NAME, CORRECT AND PUNISH EVERYONE WHO INSISTED BY LOBBING FOR AND PASSING LEGISLATION TO,  KEEP THE TBTF BANKRUPT BANKS ALIVE.

Sun, 10/02/2011 - 00:50 | 1730227 AR15AU
AR15AU's picture

I work for a green energy company and we have experienced negative prices in the pacific northwest recently.  Record snow melt combined with high winds combined with a drop in end-user demand.  However, the utilities have opted to simply spill water over the dams and to try to reneg on power purchase agreements rather than to give retail customers price incentives to use more power.  I could go on about the insanity in the green energy space, but the fact is its a very lucrative business to those on the inside and I'm going to milk it for all its worth.

Sun, 10/02/2011 - 01:00 | 1730233 James T. Kirk
James T. Kirk's picture

ZH stupid question of the week: "Which would you rather have done with the bailout money: 1) propped up zombie banks for three years, or 2) provide 2 TerraWatts peak electrical generation capacity and employment for 20 million people for 20 years?"

Reply: If you masturbate long enough using this kind of Keynesian economic pornography, you will eventually go blind (like the bankers and politicians already are). Knock, knock, Neo. If 20T of printed money were spent on such an infrastructure project, we would have very, very serious inflation and catastrophic economic dislocations. This is because the funny money would actually be spent into the real economy, instead of left sloshing around on the gargantuan balance sheets of a few dozen corrupt, terminally ill financial entities.

I have a question for the "Saturday night" Tyler who coughed up this hairball. Does daddy Tyler know where you are?

Sun, 10/02/2011 - 06:13 | 1730442 Hurdy Gurdy Man
Hurdy Gurdy Man's picture

I agree... this is very ideological and bad financial.  Not the real TyDur bowl man.

 

Sun, 10/02/2011 - 15:45 | 1731165 AE911Truth
AE911Truth's picture

Mr. Kirk, Mr. Gurdy,

Perhaps you missed the part of the article that stated: "Don’t get me wrong; I am not saying I support the government imposing taxes on us to pay for this.
I am just expressing the cost of the bailout in terms of jobs and the amount of energy infrastructure this amount of spending (preferably by private sector enterprise) would provide."

China will be spending 2 Trillion Yuan over next 5 years on alternative energy infrastructure. See my post elsewhere for the source link. This money will be flowing through their real economy driving material prices up globaly. If we fail to make similar productive capital investments, we will be priced out of the global energy and materials markets.

If we do not make these productive capital investments (agreed, using private enterprise in a free market) we will "have very, very serious inflation and catastrophic economic dislocations".

Sun, 10/02/2011 - 16:47 | 1731383 James T. Kirk
James T. Kirk's picture

Mr. 911 - 2 trillion Yuan is about 312 billion dollars, or about 1/60th of the 20 trillion dollar figure being tossed around in this article. When spread over 5 years, the China energy project is about 62 billion dollars a year "flowing through the China real economy." Since China has 4-5 times as many people as the US, this would be the equivalent of a 15 billion dollar per year stimulus pork project in the US. For comparison, this would be about the size of NASA's budget.

Just putting things in perspective. The bottom line of your response is that if we don't print and spend funny money at the same rate as the Chinese, we will be "priced out of the global energy and materials markets." Engaging in this behavior is also called a "trade war," and it is not a sustainable way of running our economy. And, we are already doing this anyway. You are therefore quite mistaken in all points you raised.

Sun, 10/02/2011 - 02:05 | 1730277 pineyard
pineyard's picture

Yeah ... calculations are .. calculations .. and not action                                                    

The author forgets one crucial thing and that is                                                

He is up against a powerful lobby apparatus                                                                 The OIL-GAS- ENERGY INDUSTRY  which wants to make MONEY !

They dont want YOU to make money cause they think money                                        is better placed in their own pockets

Besides ... the Polit Bureaucratic Complex ruling Your and my life are not interested either because decentralized private energy creation by individuals is difficult to Control and TAX ... so the fascist Politbureaucratic  Complex  is on the side of aforementioned OIL - GAS Industry

The argument about where money has to reside equally applies for the Politbureaucratical complex too ...

 

Sun, 10/02/2011 - 02:13 | 1730289 jmac2013
jmac2013's picture

Someone is starting to get it.

Sun, 10/02/2011 - 02:13 | 1730290 jmac2013
jmac2013's picture

doh!

Sun, 10/02/2011 - 04:29 | 1730383 ZDRuX
ZDRuX's picture

Can he now go and do a calculation of how much richer we'd be if there were NO government investment into alternative energy with "public" money? I'd rather keep my money, thank you very much than fund your adventures in altruism.

Sun, 10/02/2011 - 06:44 | 1730459 Fix It Again Timmy
Fix It Again Timmy's picture

"Everything government touches turns to crap" - Ringo Starr.  This is worthy of a Noble Prize.

Sun, 10/02/2011 - 07:11 | 1730469 MarketWatchTerrorist
MarketWatchTerrorist's picture

Alternative energy is a great thing because it allows one to go "off grid" without the constant monitoring of their daily activities by the "smart meters."  They can tell exactly what you are doing inside your home by analyzing your electrical usage in real time.  When you turn on a TV, when you're taking a shower, what kind of TV you have, what kind of appliances you have.  It's actually quite simple to do all of this.  Simply develop a baseline power consumption per appliance chart and compare against the flucuations in your home use.

 

If you use enough electricity the cops can get a warrant on that basis alone because they assume you're growing pot.  The electric companies, due to the PATRIOT Act, must report high usage and spikes in useage to the police/FBI/others.  They've stormed, with ever dangerous dog-killing SWAT Teams, multiple people that were simply running server farms inside their home.

 

I'd rather put a little money into solar panels than be murdered by a SWAT Team because I was farming Bit Coins with 10 servers in my home.

Sun, 10/02/2011 - 08:35 | 1730525 Broomer
Broomer's picture

Bitcoins crashed pretty hard after sites like My Bitcoin and Mt. Gox got hacked.

Users are the culprits. They should store the coins with themselves - who told them to trust banks?

It serves them well.

Sun, 10/02/2011 - 10:05 | 1730632 Debugas
Debugas's picture

$10 per watt is too expensive - oil and gas are cheaper to get.

at $10 per watt ROI is between 10 and 15 years

Sun, 10/02/2011 - 15:55 | 1731251 AE911Truth
AE911Truth's picture

First Solar is producing (not selling) product for less that one dollar per watt, however a finished system still costs about $6/watt, plus or minus a few dollars depending on options.

Sun, 10/02/2011 - 10:09 | 1730640 zombiebank
zombiebank's picture

I wrote an e-mail to my congressman when they started throwing around the $700 billion number and said that they should let the banks fail and put it towards placing a solar panel on every home in the US.  Of course I got no reply.  This was a lost opportunity indeed - would have created jobs and made us energy independent.  Instead we have banksters who get to keep their multimillion dollar homes and private aircraft when in reality they should be sitting in a jail. Massive fail for elected officials!

 

Sun, 10/02/2011 - 10:34 | 1730688 bugs_
bugs_'s picture

Oh....if they'd only let ME spend the trillions that were stolen from the serfs!

Sun, 10/02/2011 - 11:30 | 1730774 Beendare
Beendare's picture

Great premise in the article, but you make one incorrect assumption; Politicians would have done whats best for the country....

 

In reality the  "line their pocket" politicians would have squandered the $$ into another Solyndra type heavily lobbied, nepotistic, special interest project that would only help their fund raising bro in law [or campaign bundler] more $$

 

The CHANGE we need is a contract with all politicians to be 1.fiscally responsible and,2. be criminally liable for peripheral benefit to themselves or special interest. What have we created when our existing presidents goal is to "Raise a billion dollars" for his re-election campaign? Stinks, I tell ya.....

 

Tom Coburn, help us please!

Sun, 10/02/2011 - 11:46 | 1730797 Central Bankster
Central Bankster's picture

This is a false choice.  You cannot choose to keep things as they are and have no bailout.  The system as we knew it would have imploded, pensions bankrupt, runs on the banks, FDIC insurance failing, all major banks and insurance companies and their promises failing: millions of people's savings wiped out (don't get me wrong, I still think its going to happen, just through inflation-- not the deflation that would have occured through an honest default).  So its not as if we had a choice about whether to bailout the banks or spend money on infrastructure.  The choice we were given was: bailout the system to pretend things are OK, or let the system fail now instead of later.

Sun, 10/02/2011 - 12:51 | 1730899 RSloane
RSloane's picture

I have no interest in fabricating money for another project that the government believes they can manage. Expecting the government to be productive is naive. Ultimately it would have worked just as well as the bailouts. Instead of a couple of Solyndras we would have had thousands of them. No thanks.

Sun, 10/02/2011 - 12:55 | 1730902 DeathCabfoKulaks
DeathCabfoKulaks's picture

Monte,

I Want Door #3 - Hookers, coke, and a Bucket of Kettle One.

Sun, 10/02/2011 - 13:44 | 1730954 Tunga
Tunga's picture

You think wind power grows on trees? Fact is; it only costs 5 dollars to dig it out of the ground.

Sun, 10/02/2011 - 19:13 | 1731658 Papasmurf
Papasmurf's picture

The money would be best spent on sturdy rope.

Mon, 10/03/2011 - 02:37 | 1732371 jason01
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