Chironex

I found this link in an email sent to me by a friend today. It is neither politically motivated, nor endorsed. I watched the entire series and was amazed by some of the points made. It takes a while to view all of the chapters, but it was worthwhile.

The Crash Course | Chris Martenson

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Scot

bepah

I skimmed the content and read some of the commentary in the website. A couple of things I find questionable regarding the content and attitude in the site.

1) Economics being discussed by a non-economist. The owner of the site acknowedges that he is not an economist, but a microbiologist. His problem with this is that he is trying to solve problems from a scientific point of view. Microbiology is a hard science and is governed by hards rules and scientific facts. Economics is a social 'science' and is not governed by these rules. Economic models are built on assumptions and observations that many times cannot be repeated. I AM an economist and the difference is big. I quit the hard sciences in college (9 units shy of a degree in Marine Biology) because of that exact difference. I ended up with an Masters in Economics (I guess that makes me inferior as the website owner repeats over and over again that he has a PhD).

2) There is a lot of talk with what is wrong and little in solutions. Whining about government (I can do that too) does not solve any problem. Acknowledging that there will be government and working toward a solution that does not involve it might be a better tack.

3) The site seems to attract a lot of environmental types, Luddites (in fact the website owner proudly claims of his downsizing), and those who seem to focus only on how the Western Governments continue to monopolize energy

4) Lots of conspiracy theory here. Ther are those who have an 'inside' contact into OPEC, for example,....(really?.., please) that they artificially raised the price of oil and intend to again.

5) Climate change and global warming is put into the discussion......by non-scientists. Blah, blah, blah.....if they would back up their words by example, I might lower my standard of living, but until then.....

6) Ignorance of how markets work. In economic theory, the assumption of efficient market makes things look good from a modelling perspective, but a practical economist looks at imperfect markets because thats how things work. Information does not flow evenly and not everyone looks toward their best interestsi in the long run, especially if they are scrounging for their next meal.

All-in-all, lots of talk, no action.

Just my opinion, of course.

Thanks,

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John Case
Rookie Gardener, Veteran Drinker

jmoore

Phew...that told me ;-)

Anyway, I thought it was a discussion site not a site that had an axe to grind.

bepah

There are quite a few posts with some very dull axes.....

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John Case
Rookie Gardener, Veteran Drinker

momoese

Some interesting observations. Thanks for sharing.

Chironex

John, Thank you for your post. I knew that you would weigh in on the subject, given your profession, but I would like more specific points/counterpoints from you as an Economist. I sensed more resentment of his credentials than specifically addressing those points that you consider to be presumptive, illogical, untrue or agendized propaganda. The author states early on that this was not written as a solution for how to correct the problems. I didn't see much content in terms of global warming/climate change. Luddite? I did not get the impression that this was his mentality at all. In fact, it seemed that his principle perspective was the decreasing return of energy over the cost to produce it and, how we tend to harvest, mine, fish, etc the largest, best, easiest natural resources first.

I felt that he did a credible job of backing his assertions with hard data and references from economists, the Treasury, Presidents and other significant authorities. Further into the presentation, he does contrast economic modeling and practical economic perspectives - the make-up of real GDP versus reported GDP, manipulations of such economic factors like the changes in what indicators are used to calculate Inflation, many of the "tweeks" used to make the data reflect a rosier picture. Are these untrue?

Getting back to the title of this post, it would be beneficial to have a professional rebuttal for those of us who lack such a deep understanding of the economy. My background is also in science, but I had little formal education in economics - only those classes required for graduation. I need to better understand and comprehend these issues.

In my opinion, only a small percentage of the population really understands the magnitude of the situation. This was the reason for this post, the hope that more people will take an interest in becoming aware and to appreciate the depth of the hole. With this in mind, we can work towards solutions, vote from an informed position and change the things that put us here.

I welcome your (or anyone else's) input and perspective. I found this article disturbing and eye-opening on several levels. Even if half of what was put forth is true, we have a mess that cannot be ignored. It really helps to prioritize my decision making. Again, I ask for specifics and not broad, categorical dismissals. Let's paint with a small brush - not a roller.

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Scot

bepah

Scot,

I must confess that I spent most of my review going through the blogging and this is where my impressions are drawn from.

I get discouraged by reading these things as the tone and tenor is almost always negative.

Economics is, in its essence, the study of scarcity. For everything that you make, buy, or consume, it means that someone else can't. In this country today, too many people (in my opinion) have a sense of entitlement that translates into environmentalism, corporate bashing, and at its worst. government bailouts.

Ther is an old Russian story about a man who has goat and his friend who didn't and he was jealous. A genie appeared to the man who had no goat and told him that he had 1 wish. The man with no goat asked for his wish, "I want you to kill my friend's goat".

This is essentially what is happening in the US today. I work very hard to provide my family with the best quality of life possible. When prices go up, I work harder. But today, with the potential of income capping in place and the demands the government is placing on my tax dollars, my goat is being killed.

I come from a family that did not require that I shared, not expect that others share with me. I quickly realized that if I did not share (of my own free will) I would not have many friends and my brother would end up poisoning my Ovaltine. Today, my nanny governnment is forcing me to share, just as if my mother would have taken my toys and given them to my cousin, just to see them broken.

Discussions like this are best done sitting in easychairs and having a beer. Next time I'm in Vegas, I'll look you up and we'll do just that.

Forthose of you who are wondering, I am not a Republican or Democrat. Philsophically I am a Libertarian, that believes that the government has 3 duties,

1) Defend the shores
2) Keep the peace
3) Get off my back

Awaiting flames......

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John Case
Rookie Gardener, Veteran Drinker

Chironex

No flames here, but accepting your invitation to get together whenever you are in town. At heart, as well as in practice, I am a sharer. But...I don't like being forced to share by my government. I disagree with organized politics and the politicians representing the parties. If Jesse Ventura would have been running for president, I would have voted for him. Admittedly, the way out of this situation is not apparent to me. Perhaps the only 'feel good' reply that can be held by the pols is to look towards exponential growth. But honestly, it makes me wonder what the heck we are going to do. What happens when we default? Does the bar keep getting raised worldwide to accept ever increasing debt? Are there any economies that are on solid ground?
Scary stuff, to say the least!

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Scot

turtile

One big thing he forgot about was the fresh water supply. We're using most of it available. We're going to be in big trouble when we can not get any water to grow our crops.

Think about how much we rely on a few species of plants to feed our population (rice and corn for example). Imagine if a disease wipes out most of the corn or rice throughout the world. Who knows how many would starve.

I don't think anyone knows what will happen. The few hunter and gather societies that are left will come out on top. They spend less time working and have more free time. The carrying capacity of the land is kept in check naturally.

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http://www.unusualplants.net/

bepah

You should be scared. All of the money being pumped into the economy right now will have to be dealt with at some time in the future. Right now, liquidity is important as the bank, who are scared to loan, are using resources to cancel debt or purchase other assets. If no one can borrow (and this is what makes things really scary) then everything comes to a halt. By making interest rates low, the government is betting (with your dollars) that attractive rates will bring people and companies to the loan window and revive the economy. To this point, there is little action but it is not clear to me, at least, if no one is interested in borrowing (credit card usage is way down) or if the financial firms are not lending. The result is the same...no credit in our economy will put us in a massive slowdown.

As a result, we should be seeing prices go down, and we have. You have seen it as a lack of demand in gasoline, housing, and raw materials, the three largest increases we saw in previous years. But with all of the liquidity in the system, we should see an inflationary increase once the business world regains its legs.

Let me share some things that should quell your nerves. Mant people smarted than I are in the market today. For example, Warren Buffett is buying stocks left and right. He looks to the future 10 to 15 years, not 10 to 15 weeks, as many investment 'gurus' have been hawking over the past couple of years. When I get a new listing that is priced to the market, I am getting multiple offers on them. If seven people do not get this house, then you can assume they will go looking for another one. Investors I know are buying real estate as fast as they can.

Another indicator is advertising that shows a change. For the past year, gold has been dropping and there seems to be nothing that is moving it up at this time (wait until we have a little inflation, though). There are more ads on the radio hawking gold as the safest investment around. If gold is such a good investment, why do these firms want you to buy it from them? Simple because they have inventory that they got during the rise and need to dump it now.

Clearly it is seen that success in terms of investment is as simple as 'Buy low, sell high'. If we are not at the bottom now, we are very close, ceteris paribus (Latin for 'if everything else remains unchanged').

World events make things seem like the world is spinning out of control, Somali Pirates, Russian Wargames in Venezuelan waters, Pakistani terrorists in India, do I need to go on? And finally, a government that has taken off any pretense that they want this country to be socialist.

We are our worst enemy here, if you believe in self-accountability and self-responsibility.

Finally, don't get totally discouraged. The media only reports the bad news because that's what sells papers. 94% of the people area still employed, according to the government statistics. In 1981, we had 9% unemployment. Today twice the number of people are working than in 1981. We will get out of this, and if the people in this country want to make a change, they will, as they get a chance every 2 years. Focus on what is important, don't be distracted by issues that are not truly important (you know what they are).

This post is long enough, more will come, I'm certain.

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John Case
Rookie Gardener, Veteran Drinker

damaclese

i found it quite interesting. i have to think that debts in the 40 trillion dollar rang has got to be bad any way you look at it no mater what side of the political spectrum you fall on. and just as a thought has any one been keeping an eye on the M1 money supply is it falling or raising i think that mite be a good indicator of were we are headed in the short term say next 4 quarters just some thoughts?. please don't bash me for raising thees questions. what the name of the number that is higher than a trillion we mite just find out soon!

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Helping to foster understanding for the learning disabled

Chironex

Gazillion

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Scot

Patty in Wisc

Thanks for the education here. I did not read the link posted but read all here. Interesting stuff. I esp. like the "kill my friends' goat" story. How true!
Gazillion!!!??? I'm having a hard time with million!!

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Got a lite?
Patty




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Patty in Wisc has sadly passed away 9/05/11. We will miss you Patty.

bepah

I agree with you.

The amount of debt you quote is very disturbing and it isn't all of the debt we have out there.

I'll bring up what is the most troubling to me thst is not being discussed, MediCare. The unfunded liability in this program is growing daily as the population gets older. The imposition of 'National Health Care' is the only was Congress thinks it can avoid paying the piper. Again, it is on the backs of the taxpayer.

Bringing govenrment into any free market solution always, and I mean always, costs more than it should, is subject to waste and fraud, and never, ever, is reduced from year to year. If you hear that a government program is being cut, what is really happening is that the increase is being cut, but the overall spending increases.

Finally, to respond, the president, no matter the party, is not responsible for the budget overrun. It is the congress, who's major job is to manage the budget. If the congress sends a budget to the president that is not in balance, the president may veto it, the congress can then override the veto. We have elected presidents that have no spine to veto budgets since Reagan (and he had his problems as well), but the congress has the responsibility to balance the budget. Clinton's 'balanced' budgets did not include Social Securtiy or Medicare.

It gets uglier when off-budget programs come into play.

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John Case
Rookie Gardener, Veteran Drinker

modenacart

Clinton's balanced budged and surplus was a joke. I belive the way he was legally able to call it a balanced budget and a surplus was because he and Greenspan redefined SS and federal retirement as intergovernmental debt and didn't include it in the budget, yet the government debt increased every year Clinton was in office. Regardless of what you call debt and bills, they still must be paid. If the government's account practiced was used in the private world, everyone would go out of business.

damaclese

Gazillan wow whoed a thunk it! (not typ-o)

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Helping to foster understanding for the learning disabled

Chironex

Actually the 'Clinton Balanced Budget' is a classic example of how the pol's redefine the components of any statistic to blow happy smoke our way. If you don't like the way a number looks, redefine the basis for it to make it appear better.
So Banana germination rates in my lab have gone to 100%.
(Of course, I redefined germination rates to include only those seeds that sprouted.)

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Scot

Bob

Thanks Scott, I feel a whole lot better about my germination % now too................aaaaaahh happy smoke!

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