Natural resource scarcity and the global debt crisis: exploring the connection

From Gail the Actuary, one of the top peak oil bloggers, comes an analysis of the interplay among resource depletion, pollution, global finance, and economic growth. Or lack of growth, as the case may be. The essay is well worth checking out.

Its bottom line? Physical resources are intimately connected to current economic and political crises. Not someday, in a nebulous worst case scenario, but now, today. Example: feedback loops among oil prices, food availability, and debt levels. Gail the Actuary notes:

[H]igher oil prices tend to be associated with higher food prices... When prices of oil and food rise, consumers (except for those making more money because of higher oil and food prices) tend to cut back on discretionary spending. This cut-back in spending leads to lay-offs and recession in discretionary segments of the economy. Some laid-off workers default on their debts, and businesses scale back their plans for expansion, because of the “bad economy”. As a result, they too need less debt.


So debt works well in a growing economy, but once an economy hits high oil prices and recession, debt works much less well. An economy has positive feed back loops from debt in a growing economy, but once oil limits (in terms of high prices) start to hit, feedback loops work in reverse–consumers and producers see less need for debt, and in fact, may default on past loans. Shrinking debt levels make it increasingly difficult for GDP to grow.

Implication: foreign policy gurus who think about the current global economic crisis without reference to natural resources are getting it completely wrong.

It would be like trying to understand the risks of a forest fire without looking at the current heat, temperature, and humidity, focusing instead only on the drunken dumb-asses who leave smoldering fires all over the place. If you focus purely on the human factors related to fire causation -- e.g. prohibiting intrusion of campers into the forest, closely policing the behavior of human visitors -- you'll miss other causes that have more to do with the broader natural resources context. So while you're busy inspecting a Winnebago for fire hazards, you'll miss the fact that a normally harmless lightning strike on the other side of the forest is setting off a conflagration. Normally, the lightning would have ignited only a nuisance brush fire, if the climate conditions were more benign. But now the random bolt of electricity sets a fire that will be ignored in its early stages, escalating unimpeded to catastrophic dimensions, because you were too busy focusing on the goddamn Winnebago.

Heck of a job, Brownie.

Letters from Occupy Eugene

Hi folks,
   No pictures today, I'm afraid, I've only been able to make it out to the protest after dark, and my camera is teh suxxor at night, with a flash range of approximately ten centimeters. Anyway, Occupy Eugene is still going strong, and has actually grown significantly since Saturday night; last night, I estimate that at least three hundred people were encamped on a small city block two hundred feet on a side. The medical tent is well stocked, and was being attending by an honest-to-Einstein MD when I dropped in. The food tent continues to dish up free, hot meals thrice a day for anyone who is hungry, thanks to generous donations from the larger community. And every two minutes or so, a car passing on busy downtown streets honks in solidarity at the camp.
   This is all very cool, of course, and testifies to the staying power of the protest, logistically. But what is really impressing me about it is the way that the Occupation is being governed.
   See, I was deeply skeptical about the idea of "consensus government" at the start. I've had a lot of interaction with democracy, as a voter at national and state levels and a direct participant at local levels, and I have not in general been impressed by the ability of large groups of people to Get Shit Done. When I heard that the Occupation in Eugene, like those in other cities, was adopting consensus, whereby any single person in an arbitrary assembly has effective veto power over any proposal, I thought "well, this'll last about a day." Consensus worked great for organizing meetings that were at least half pep-rally, I though, but as soon as this is being utilized at twice daily town hall meetings in an actual village (and at this point, no other word captures what is going on down in Park Blocks), it'll fall apart.
   I'm delighted to report that I was wrong. Four days into the Occupation, consensus is being used very effectively to do everything from establish talking points for media contacts, to determining quiet hours for the settlement (a pair of issues that came up last night while I was crawling around in the generator tent trying to figure out where the hell Engineering had put the ground fault interrupter, but I'm getting sidetracked). Which is not to say that there was never dissent; people did block proposals, initially, but this precipitated discussion and amendment of the proposal at hand, rather than killing it outright.
   At this point I should lay out the mechanics of a consensus-based meeting. Like Robert's Rules of Parliamentary Procedure, there is a system to consensus. Basically, a consensus meeting proceeds very similarly to other Robert's Rules sorts of situations, with an agenda, a speaker's list, old and new business. Rather than a single chair person, however, there is a group of "facilitators," who have a sort of informal social authority to run the meeting, but do not have the authority to deny speakers the floor; excessive violations of speaker's order or rules of conduct are enforced by the entire body, not the "chair." Anybody can put forth a motion, and the following discussion strongly resembles a standard parliamentary session, with points of information and procedure, direct responses, and speakers for and against taking the floor. When someone calls the question, however, the voting gets interesting: voting is by display of hands, with hand signals for three votes: "agree," block," and "stand aside."
   Since consensus requires no dissenting votes, a single "block" stops a resolution from passing. However, as I mentioned before, this does not mean that a proposal dies; it gets kicked right back into discussion. In my experience, after a decent amount of conversation most "blockers" were appeased, and the few that weren't would "stand aside." "Standing aside," I found out, is one of the ways to "vote" in a consensus system, and it operates something like abstention; the voter is saying that they are not completely happy with the proposal as it stands, but will not block its passage. This is a key point, as it allows someone to register their displeasure with a measure, without hanging up the process. Unlike a standard majority rule system, this places enormous social pressure on someone genuinely voting "No" by blocking. By exercising a power of veto, you are pretty much required to explain your reasoning. This makes it much harder for people to exploit the veto than I had originally thought.
   I'm not suggesting that consensus is superior to majority rule as a democratic system. In fact, in any situation where every voting member is not sitting in the same room and voting openly (not in secret), it would be completely unworkable. But it IS, evidently, a workable system for a community of some hundreds of people. And given the speculations here and elsewhere about the impact peak oil and climate change are going to have on the mean size of human settlements in the future, I think it is interesting to consider alternative democratic mechanisms for small communities. As I continue to cover the Eugene Occupation, I'll be paying very close attention to its development at a municipal system.

Occupy Eugene: Occupation Begins

If I was in charge, this picture would worry me. Photo by Tracy Sydor, occupyeugenemedia.org

So I marched with Occupy Eugene yesterday.

The Eugene police department estimates that between 1,500 and 2,000 people marched through downtown yesterday; that would be the protest in the history of a city famous for them. The march terminated at the Park Blocks, four blocks of plaza and garden in the heart of downtown that usually play host to craft and farmer's markets.

We're marketing a different kind of crop here.

I was amazed at how quickly a tent city sprang up in the Park Blocks; I helped the build crew a bit, but I had no idea what all they had up their sleeves. Part of the advantage of being a group with unprecedentedly broad social appeal is that we had everyone on hand, from a teenage apprentice carpenter to a boomer general contractor with a crane on his truck. In less than three hours, we'd erected a stage for the general assembly, a children's play area, a kitchen, an information booth, and a first aid station, and wired them all for electricity with a heavy duty generator (not even sure where we got that one).

Naturally, there was even a vegan menu.

A volunteer medic from Whitebird Clinic organizes donated medical supplies in the "mash."

The first general assembly of the Occupation.

This Occupation has no permit, but we've established friendly contacts with the markets that usually utilize the site, the mayor's office, and the police, who are "taking things on a daily basis," but don't foresee disrupting the protest as long as it remains clean and peaceful. For now, the Occupation is off to a great start, and I expect it will only grow larger as the site is developed and more people join in as it becomes apparent that the police will not disrupt the event, at least in the short term. I'll continue to report on this as I am able.

Park Blocks Fountain, October 15, 2012, 9PM. Day One of the Occupation.

One of the best quotes I've seen about Ayn Rand

"There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs."

--quoted from Paul Krugman's blog (http://krugman.blogs.nytimes.com/2010/09/23/im-ellsworth-toohey/)

Occupy Eugene

Occupy Eugene protestors organize at the U of O campus.

So, the Occupy Eugene General Assembly was last night.

Jillian and a friend show off signs we made the night before.

I've been to a lot of demonstrations and community organizing events, but never to something with quite this sort of energy. At maybe 200 attendees (not everyone was there at once, there was some turnover), it wasn't the biggest mass event I've seen, but it was the most active of its size I've encountered. The event wasn't very well organized initially, but there was much more spontaneous organization happening than I am accustomed to at these sorts of things. The organizers obviously intended to do committee breakouts, but what those comittees would be and who would "chair" them was decided on the spot, organically. People who obviously were not associated with the original planners took up leadership roles right away, directing people to the committee breakouts, talking to new arrivals, and passing out literature that they had brought or swapped with others.

Resarch Committee in action.

The committee breakouts actually accomplished many of the things they set out to discuss; I attended the "Research" breakout, tasked with developing a plan for gathering information about other Occupations around the country, what works for them, problems they've encountered, and how to make that information available to the rest of the group. Talk centered heavily on the website being developed by a handful of techie volunteers on donated server space, with special emphasis on installing an anonymous forum system to allow free sharing of information. Other breakouts included Public Relations, who were already fielding questions from the press who had beguin to show up in sizeable numbers, Sanitation, Morale, and Legal Concerns. Throughout I was impressed with how decentralized the leadership of everything was; an important characteristic for a group that can expect to run afoul of local law enforcement shortly.

The occupation itself is planned to begin on October 15, at a location to be determined. I am continuing to participate in this group, and will update as soon as I know more.Meanwhile, visit Occupy Eugene's website!