Why I'm frustrated

If life was just about each of us getting by in our own little corners of the world, then personal accountability would be enough. We'd all make our own mistakes and learn from them and move on.

However I must believe bigger things are afoot. Well, like peak oil.
http://www.youtube.com/watch?v=XNjZnRA2m68&NR

It's nice to be an idealist, to think collectively we can make a better world, but that idealism requires something of sacrafice by everyone, at least in the biggest sense.

Take for instance my conviction that higher fuel prices are essential for weening us off from fossil fuels. As long as energy is cheap, people will keep doing what they're doing.

I think of my friends stepping into a mortgage beyond their means or at least beyond their discipline. I mean that's under current circumstances, not under the world I think we OUGHT to be considering, the world we'll face sooner or later regardless of what we want.

How do I save my friends? How do I tell them they ought to pay more for EVERYTHING for their own good?

Democracy doesn't seem to support benevolant inflictions of hardship, much less friendship.

And YES, I know higher prices themselves don't change anything. It only creates new markets for people to get taken advantage through, and may or may not actually improve the long term problems we'll be facing.

Capitalism works as long as most people can get ahead, and in a world of diminishing returns there's going to be a point of diminishing acquiecence to the powers over our lives. When a critical mass find themselves slipping further and further behind no matter how much they do to reverse their decline, what will happen?

Humans like scapegoats. Who shall we blame? Ideally those in power need to find someone to blame besides themselves. Well, unless they have their get-away plan ready and don't need to face the riots against them.

Its perhaps fun to imagine the worst that I can imagine, but really I don't think even my worst is the real worst. I mean I don't even know - is a slow steady failure better or worse that a crisis? A crisis is easier to respond to, easier for people in positions of power to mobilize action in response.

Kunstler's "Long Emergency", by title, suggests something bigger than a crisis, although maybe seen as a long series of crises.

The financial melt down seems the biggie - the one I most fear. If I don't have debt, I can better handle losing my job. My stability isn't worth much, but it can mean a little more I can give to others with more demands on them than me, but money isn't clearly something I'd want to have to make a difference - I don't particularly want to pay off the debt of those who got over their head. I doubt many will step forward. Easier to offer a fish - food for today. Heck that's my philosophy for beggars when I can. At least buying them food I know where its going.

Well, my financial independence day is still far off anyway - not until 2011 if I'm lucky so I must keep plugging away on my own debt and hope for the best.

Are people better off renting? I mean if they're poor? I tend to think yes - at least their budgets are fixed and they can jump ship (move in with parents) as a quick last resort. Having a home you can't defend from creditors - seems too risky.

Sure if the economy falls, everyone fails and the banks'll end up with property they can't sell anyway. The government will end up printing money to pay off the bad debt so better off people can take money from the banks to cover their costs because they lost their jobs. In short maybe it's better to have a house you're going to lose - maybe it's better to have no hope in accumulating equity if the economy crashes.

I wish to see hope in needed change. Mostly I see failed dreams in great need of revisioning - all of us.

Spoiled or prudent?

Hopefully just a quick post to complain about the cruel world we live in, while feeling spoiled rotten myself.

Some friends are closing on a little 3 bedroom house for $188,000, 0% down, and expect to pay $1500/month between mortgage, mortgage insurance and property taxes.

They've been living the last nearly dozen years of being married in the house owned by a mother, and barely getting by on two incomes, but getting pressured to make their own way so the house can be sold. How will they make it if their expenses are going up by perhaps $500/month?

Zero percent down is crazy, and we can all be grateful that banks will only charge $2500/year for mortgage insurance for this cozy deal.

I can think both ways - that the world exploits them, and they fail to take full advantage of their past situation. If their expenses were $500/month LESS before, why haven't they been saving $6000/year? They could have gotten their 20% down with a bit of prudent planning, right? At least 10%, 5%?

Mostly I think they basically they are not capable of taking on this burden of a home and they'd be better of renting. I mean homes are not appreciating like they have been and might even go down! And this $188k house assesses in 2007 at $167k, so they're starting above the claimed value - meaning basically their property taxes will jump with the sale price.

A 30 year mortgage puts a minimal amount of money towards the principle for the first 5 years. AH, but they can deduct their mortgage interest, right? WHAT A SCAM I think - a conspiracy to transfer wealth from people to banks as far as I can tell.

Friends from Canada say they can't deduct their mortgage interest from income taxes.

And the REAL scam of course is not even the imprudent incentive towards home ownership - it's that once they get a better credit record they'll be offered credit cards left and right and in 5 years they could find themselves with $30k in credit card debt AND little equity on their home. STILL, they'll find some 8.4% home equity loan to pay off their new credit card debt just in time to set up a new round of borrowing on their cleared cards.

Its so easy to see from the outside - how money lenders have TOO MUCH MONEY and people without discipline can go years in the red without consequences that demand action.

And multiply my friends by 30% of the population and you have a house of cards, waiting for a little gust of wind to knock them off their feet.

SURE, there are times for taking on debt, and 30-something couples with KIDS deserve their own home SURELY, but But BUT there are risks. There are costs. There OUGHT to be choices besides living the life of slaves, one unfortunate event beyond your control that knocks down the smallest steps.

Do I show my fear? My sense of frailty of their circumstance?

Shall I simply wish my friends would think more strategically at their circumstances and live within their means?

Shall I step back and "let people fail" knowing there's NO FREE LUNCH and people need HARD COLD REALITY to learn prudence and limit their dreams to what they can afford NOW rather than PAYING FOREVER?

Will they learn? Could they learn any more efficiently than to LOSE their home in 5 years? Of course they have family and family will help them - their parents will help cover their shortfalls, and they'll muddle along perhaps for 10 years before failing.

It's strange. I don't want to be a Scrooge, really, but if I ran the world, people would not get mortgages with 0% down - they'd first prove they could save their 20% down. They'd NOT get access to easy credit cards and LOW LOW LOW monthly payments that encourage them to rack of balances for years before facing their short falls.

WELL, not like the government sets any sort of example - STEALING from Social security every year and calling their deficits smaller.

What's a prudent person supposed to do with a world of BIG greedy bastards willing take advantage of LITTLE greedy bastards to sell their futures for a few trinkets?

Who's responsible when the house falls?

Who's going to help out the needy, the homeless?

Give a man a fish, you feed him for a day. Teach him to fish you feed him for a lifetime.

Or the modern approach: Give a man some money, and you'll enslave him for a day. Teach a man to spend on credit, and you'll enslave him for a lifetime!

What a world we live in.

Yes, I do think my friends might just get by somehow. I just imagine they're doing things a very hard way, and I wish they could do better.

I can't even tell what political side I'm on. I'm a bleeding-heart liberal I suppose. I'd be an authoritarian I suppose if I could - BAN people from enslaving their futures for trinkets.

But I'm a fiscal conservative too - a good republican. BANKS ought not lend money imprudently. THEY'LL be hurt (and investors) for their failed decisions. And I despise a government that creates a safety net for banks that allow this excess risk to be carried over all of us.

Hmph! I'd rather be a teacher, rather help people say NO to apparent easy streets. SURE credit cards are evil, but the game CAN be played with care. I can't even tell if my advantage played is part of the problem?

For me "debt" is the real enemy, but that's just my spoiled perspective, being able to save before spending. My dad said I have a depression era perspective, and I believe that. I'll waste more now than I might, but still only a small fraction, and my GOAL is to reduces expenses rather than increase income. I just don't know how to teach when everyone else sees things differently...

State of the Union

I'm a sad sad pessimist that the future will offer anything short of disaster. I offer such an assessment because it seems nothing short of disaster can send us on a different path - i.e. kicking and screaming every step of the way.

Still there are moments of pretend hope - like Gore's "Inconvenient Truth" on Global Warming and CO2 emissions, or President Bush's 2007 State of the Union speech where he calls for a 20% reduction in gasoline use in the U.S. in 10 years.

On the level of probable reality, we'll be FORCED to cut more than that by 2017, whether geology, politics, or world demand, or some combination, but as far as business-as-usual, there's no evidence we'd be cutting consumption at all except by expectations we'll be forced to. That is to say it is pie-in-the-sky to imagine any sort of voluntary effort can do anything but slow the rate of growth, and if oil was still at $15-$25/bbl, Bush wouldn't even be talking about it.

Still, you gotta have some tiny hope a direction has been changed, just a bit. Somehow I disbelieve ethanol from whatever source is going to septuple our current strained production from corn. I mean strained in the sense of modern farming being unviable without fossil fuel based fertilizers and production, even if it can reduce oil in exchange for NG and coal sources.

I'm perhaps foolishly optimistic that electrical production is the fastest substitute for gasoline fuel - plug-in hybrids recharged overnight when electricity demand is smallest, and stored in limited range batteries, but perhaps covering a fair fraction of energy use needed for city driving anyway. I'm only hopeful in the known-technology level, not ignoring the fact that probably overall it'll cost more than now taking the costs people now expect for new cars.

Still I admit when transportation and electicity intersect more, there'll be an increase in electricity rates, and a strain on that system, and some areas might be able to grow electricity fast enough to keep up. AND worse, coal is still cheapest when ignoring environmental costs.

My optimism lasts on a hope that energy prices will keep going up sooner than later and this will force conservation and restructuring and technology to deal with it.

If energy was our ONLY coming crisis, I'd say we'd have a fair shot to get through it. But when you add numerous parallel crises - global warming - natural disasters intensified by climate change - political instability due to high costs - unsustainable debt, the whole world economy is a house of cards ready to fall - so back to pessimism!

So I'll be hopeful for Bush's little steps, but personally I'll just keep trying to pay my debt down (mortgage) sooner than later, and count my blessings as I have many.

Necessity is the mother of invention and we have a motherlode to face!

Surge

Surge is a word heard most in relation to electricity - you know the zap that happens when lightning gets into the grid and blows out electrical equipment.

But, not this time, not this is the pet name for President Bush's plan to increase U.S. troups by 20,000 to help stabilizing the country before we cut and run.

What's a sensible person supposed to believe in here?

I believe in protecting the innocent, so if "surge" means making a safe road for the peace lovers to get out of the way before the civil war, then I guess it sounds like a good plan.

It's crazy. The world can't afford civil war in Iraq and the Middle East, but given BOTH sides have external support, to keep the conflict on the back burner for years if we let it. A "surge" isn't going to save the future stability of Iraq, no sorry, ain't gonna happen.

And the worst thing about civil war is the side that wins is usually the side the most willing to be the most outrageous in their efforts to win the peace. Winning the peace is to convince the other side that'd you'd rather die than surrender, and hope they cut and run at your ruthlessness. WELL, I mean that and having big guns and bombs to back up your view.

Basically what Iraq needs is another ruthless dictator, like Saddam, who has the military power to destroy his enemies and and willingness to do whatever it takes. It needs a dictatorship, since a dictator doesn't need to be responsive to popular opinion. Well, I guess Saddam hung for his ruthlessness, but he could have still been in power for all his "crimes against humanity", if only he had left the Kuwaiti oil alone. But lesson learned, the next dictator will happily cozy up to the U.S., given a few years for our bruised ego to heal, and play good international partner, while keeping the internal resistance under control.

I'm talking jokingly, at least playing a side I don't 100% believe, but can't necesarily argue against. There's no use pretending anything about "democracy" in an economy ruled by oil wealth. I mean democracy is hard enough among people growing up in a land of peace and plenty, but I can't have much hope that good institutions can develop in an instance in a place where violence beats laws.

Well, whatever my views on dicatorships, I admit democracy also must apply limits to individual freedoms when state power is threatened. It sounds horrible, and easy to judge negatively, but must just be accepted. A leader responsible for the safety of the people can not allow a minority of the people to break the laws, however "apparently harmlessly".

Today at the federal courthouse I saw the peace protestors with their signs saying to bring the troups home. I'm all for their idealism, but I have to look at the bigger picture and not say what I don't like, but what I don't like the LEAST. In other words, I have to espouse the smaller of evils.

What I see is:
1) A minority of activist Americans protesting the war.
2) A majority of Americans tired of the war.

What I don't see from either group is a response to the war that addresses our own responsibility for it - namely our dependence upon oil imports to run our economy.

My thought is that we're going to be dependent upon oil for a long long time no matter what we do. However this dependency will end as supplies shrink and demand keeps increaseing. We're going to pay sooner or later for our demand for cheap oil, so why not face those costs now?

We ought to:
1) Demand that government pays for its spending through taxation not borrowing.
2) Demand that oil be taxed at a level that will create an economic incentive for conservation and alternatives to be developed.

These two are actually somewhat complimentary, although I'm afraid the borrowing probably far ought weighs any taxation we could apply to oil. Still, it's one TINY response that can be a part of a larger one.

But NO, not even my smart engineer coworkers will support me. I mean they're not even the ones who will be hurt by gas prices. They'll still drive their SUVs to work when gasoline is $10/gallon. They don't even argue in defense of the poor. No they just say basically that the market will take care of things when prices rise too much. Then on the other side, there's those who have been brainwashed to believe the government is corrupt, that all taxes are evil, and that they'll fight every last dime they can from getting into the belly of the beast.

Now I am characterizing others, easier to say "Joe doesn't want his taxes to go up", while I benefit from Joe's fight as well in my taxes. And of course there's the moral highground - if I BELIEVE I OUGHT TO PAY MORE TAXES then I can write a check and do my part - the old volunteer funded government.

Of course no sensible person would do that. I know my little taxes are spitting into the wind of debt and an unviable future. I'm better of keeping my saved taxes (because of Joe's fight), and invest it somewhere it can make a difference.

I do admit my own insanely confident sense of entitlement, not for a high income even, but mainly the freedom of my time. I thought of that as I heard the Minnesota Guard will spend an extra 125 days in Iraq because of Bush's surge. They're losing their lives, while I am free to do whatever I want, as long as my bills are paid.

I don't wish entirely to be an isolationist, wanting to devolve the global trade system which I so greatly benefit. I accept my dependency upon a system that others do not benefit as much, and whom may one day fight against it, and harm me, whom has nothing against those who now want a better share of the pie.

As an individual, the best I can seem to hope to do is reduce my consumption, or at least that's the part I partially succeed. I expect some 90% of my spending is either necessity, or investment. Both are relative terms, and my biggest luxury is to live alone in a 3 bedroom house, even if I'm not home that much and try to minimize utilities. Anyway, moneywise, I'm just damned fortunate, damned because I feel guilty others struggle more.

But on the guilt, once I get my work hours done, what do I really give back in terms of my time? Sure I can give blood 6 times a year, and vote, and keep my yard mowed and raked, and driveway shoveled and all that. But basically I have about 50 hours week of "discretionary time" that I waste on whatever inspires me in the moment.

Now I mainly bring that up before I follow through with my desire to tell people to "Buck up, and prepare, harder times are coming, and you're responsible for your own needs, and the world in 5 years may not support your current $110,000 household income, and so be prepared for that not to be there."

Well, nice message, but people raising families, and with more demanding careers than me have much less time to try to figure out how to reorganize their lives to consume less, save more, and defend their future.

So, am I responsible for them? If I get my mortgage paid off, and have surplus income someday, what shall I invest it in?

I suppose any silly reader of this blog won't know what I'm talking about - why any of this matters to national policy?

Back to entitlements, basically I admit we're all pretty much spoiled, more or less. I'm spoiled more at least, but whatever struggles you think you have, they're pretty damn small compared to risks if the system as we know it fails us.

Maybe you're an optimist. We've learned how to handle economies. The great depression will never happen again. We can just print money to keep the economy flying through anything, savers be damned. And maybe we've got the technical and natural resources to keep our titanic rammed headlong into the iceberg, without stopping us. Maybe every danger really is too small to seriously hurt our ambitions?

Success is a funny game - the more you win, the more you fight to win more, and the more you learn how to keep winning. Either we're not as smart as we think, and natural limits will hit us. OR we are smart enough to keep the ship flying until we sink the entire biosphere with us. Whichever is true, you gotta say, hold, let's think about this!

We can't bring democracy to the middle east.

We can't make cheap oil last forever.

We can't expect the pyramid game of economic growth to continue indefinitely.

A day of reckoning will come when we'll have to increase our self-sufficiency, increase the power of our communities to meet their own needs.

Anyway, I just don't think you can ask questions about Iraq in isolation. Yes, we need to withdraw sooner or later. Our enemies WILL outlast us.

I must accept the risks exist. It's a funny game - that doing the RIGHT things now likely mean WORSE near future, but doing the WRONG things now mean we can keep going logner without the pain, and then it'll be even harder on everyone.

Addicted to oil.

It is a good phrase.

Addicts don't take advice even as poorly as the average proud soul. Even in their weaker moments when they accept their failings, the alternatives appear unacceptable.

I think there's a political phrase "Never promote a problem that you don't have a solution to."

I think that's where we're at.

There are no acceptable solutions now.

There's little hope acceptable solutions will come.

We will continue until things as-is become unacceptable.

Surge and cut and run - a winning combination?