Casaubon’s Book

Sharon April 6th, 2008

Most of us raised in a Biblical religion have some vague memory of the story of Joseph and his brothers, if only from the Donny Osmond musical.   Genesis 39-47 will refresh your memory if you are interested in the details.  In the story, Joseph who was sold into Egypt becomes the powerful advisor of Pharoah, who is having bad dreams.  In one of the dreams, Pharoah dreams of seven fat cows, devoured by seven starving cows.  In the second, seven ripe, healthy sheaves of wheat are devoured by seven shrivelled, dry ones.  Joseph correctly predicts that this means,

“Immediately ahead are seven years of great abundance in all the land of Egypt.  After them will come seven years of famine and all the abundance in the land of Egypt will be forgotten.  As the land is ravaged by famine, no trace of the abundance will be left in the land…And let Pharoah take steps to appoint overseers over the land, and organize by taking a fifth part of the land’s produce in the seven years of plenty.  Let all the food of those good years that are coming be gathered and let the grian be collected under Pharoah’s authority as food to be stored in cities.  Let that food be a reserve for the land for the seven years of famine which will come upon the land of Egypt, so that the land may not perish in the famine.”

Joseph’s understanding and forethought enable Egyptians, and ultimately his own family to survive the famine, in which “…there was no bread in all the world.“ 

One of the fascinating things about the way that this story is told is the linguistic linking of land and people here - that is, we are told that we should store food so that “the land may not perish.”  Of course, this means the people of the land, but it also is a reminder that famine is enormously destructive to the land itself - in the face of famine, land that should not be cultivated is brought into cultivation (we are seeing this already in the US as Crop Protection Land is brought into production and elsewhere as the world’s poor are pressed onto increasingly marginal land), and desperately hungry people will eat whatever they can, including protected animals and plants.  Famine isn’t just destructive to the hungry, but to the earth they devastate in the quest for food.  In a real sense, the preservation of the people can be the preservation of the land itself.

Whatever anyone can say about Pharoahs ;-), this one seems to have a laudible sense of obligation to his own populace - a sense of obligation that wildly exceeds the leaders of many nations, who have allowed stockpiles to collapse in times of comparative prosperity.  Right now world grain reserves are well below what is considered to be a “safe” level to keep populations fed in a time of shortage - and this can be seen by the concern that nations are showing about expanding and safeguarding what reserves they do have in the present crisis.  For example, Thailand recently announced it will not consider selling grain from its stockpiles, and the Philippines negotiated a deal with the US and Vietnam to buy a large reserve.

I bring this up not to make you feel like you are back in Sunday school, but because of a Washington Post article I just read, which struck me because while it is perfectly possible that this is an accident, what purports to be a news story about fears of unrest caused by high grain prices, particularly rice, turns out to have what looks like a strong propaganda component, warning people about the danger of stockpiling grain. 

“Cambodian Finance Minister Keat Chhon last week called for people to be calm. He urged them “not to stock up on foods, which could make the situation even harder.”

Some experts say that building reserves to protect against future shortages only makes the problem worse.

‘Of course, if every country, or individual consumer, acts the same way, the hoarding causes a panic and extreme shortage in markets, leading to rapidly rising prices,” said Peter Timmer, a visiting professor at Stanford University’s program on food security and the environment.

For example, he said, “the newly elected populist government in Thailand did not want consumer prices for rice to go up, so they started talking about export restrictions from Thailand, the world’s largest rice exporter. . . . So last Friday, rice prices in Thailand jumped $75 per metric ton. This is the stuff of panics.” “

Now there is some real truth here - if billions of people attempt to build up a food reserve in a time of short supplies, they will make the situation worse, driving up prices and increasing shortages.  It is also true, however, that the root cause of these shortages is not people trying to buy now so that they can be sure that they will have rice to eat if the price continues to jump (it went up by 10% on Friday alone).  The problem is a combination of climate change, aquifer depletion (especially in China) and biofuels growth - with a heavy emphasis on that last one.  

Now the difference between hoarding and stockpiling is this - once you are already in a crisis AND there is a meaningful and rational system for ensuring people have access to food, building up stores can disrupt the existing system and its fairness.  This is hoarding, and it is problematic.  That is, if there’s just enough rice to around, *and it is going around in a fairly just way*  those who are wealthy enough to build up private stocks can disrupt the system, and shouldn’t.  That, however is not the case now.  First of all, there’s more than enough food to go around, and second of all, justice has not been the major concern.

How do we know this?  Well, in 2007, the world produced enough calories to feed everyone in the world half again more calories in grain than they need.  With 6.6 billion people, we could feed 1/3 more people, raising the world’s population up to 10 million on present agricultural yields of grain alone - this excludes all vegetables, fruits, grass fed meats and forageable plants.   That is, right now we are not experiencing shortages of food in any absolute sense.

This, I think is a deeply important point.  When I observe things like this, people usually not that there is no such thing as perfectly fair food distribution, and that is, of course true. It is also true that we are so far away from even a remotely just system of distribution that if we could even approximate a level of concern for the world’s populace that exeeded our concern for our cars, I’d be happy.  The reality is that rich people eat three times - they eat some grain.  Then they eat meat, fed on enough grain to feed an ordinary person many times over, and then they feed their cars, their pets, the birds and occasionally burn some grain and legumes in their stoves.  We entirely lack a system that simply says “humans get the first products of agricultural labor” - that is, that people outrank the cars, dogs, and desire for steak of the average rich world denizen. 

Building up supplies in times of comparative prosperity and surplus is not hoarding - it is simply a wise idea, and has been since Pharoah and Joseph were doing it.  Keeping a solid reserve of food means that you are not as vulnerable to disruptions and crises.  But national stockpiles have been falling steadily for the last decade, with world reserves presently at their lowest since records have been kept.  Just as we’re not saving money any more, we are not presently reserving our staple foods for hard times.   

Not only is building supplies in times of comparative prosperity morally ok, it is not ethically speaking hoarding if there is no system of equitable distribution.  That is, hoarding is the retention of food stores *when things are being distributed fairly* that disrupts an already fair system.  Hoarding is not an accurate way to describe the attempt of desperately poor and hungry people to make sure that they are a little less desperately poor and hungry next week, nor is stockpiling an unreasonable response to a crisis in which there is no just system of making sure that the hungry are fed.  In that case, when governments and larger institutions are not ensuring fair distribution, it is more than reasonable for people to try and make sure they and theirs are fed.  Can this cause problems?  Absolutely.  Is this root cause of present problems, and should those who inadvertantly exacerbate problems with deeper root causes be held up as responsible?  Hell no. 

There are some food sources, notably rice, that are experiencing absolute food shortages.  But food in general is plentiful - so what’s the problem?  Well, Lester Brown announced yesterday that the total amount of US biofuels production could have fed *250 million* people every bite of grain they needed for a year.  Think hard about that fact next time you are in the market for some E10.   Note, however, that the UN and World Bank, both primary enthusiasts of the world biofuels boom, are arguing that we should give more money to the World Food Program (and we should - they are already desperate and things are only going to get worse), but not that we should stop biofuel production.   The one bright spot in what is otherwise a humanitarian and ecological disaster is that Germany seems finally ready to slow the madness - it announced earlier this week that it would remove its own ethanol mandate.  Here’s hoping that that’s the first in a trend!

This is, I think, an important point because articles like the one I cited above suggest that a great deal more of the responsibility rests on poor rice consumers than is just.  Years of being taught to read closely makes me think that the Washington Post article is more than just a piece of reporting - that is, its level of balance on the subject of stockpiling is low - there is no discussion about, for example, how those who bought rice before the price jump are doing in comparison to others, or why government and world reserves are as low as they are - and whether consumers have the right to compensate for absent state stockpiles of staples.  Other than one brief mention of biofuels there is no discussion of rich world hoarding in the form of meat consumption or reduced exports because of biofuels.

The extended discussion of individual hoarding, which takes up nearly half the article, implies that political unrest is primarily caused by governments acknowledging their is a problem, and by people who want to eat trying to continue doing so.  Moreover, while I hate to get all conspiracy-theoryish, I cannot help thinking that such an extended discussion of stockpiling in an article that is supposed to be primarily about political unrest due to food prices (and it isn’t like there isn’t anything to write about on that subject) is also beginning to create an American anti-stockpiling narrative. 

I’ve had several people email me recently about the ethics of building stockpiles during a time of famine.  And I agree, were we really seeing extremely tight supplies of grains, and a system for just distribution, it would be perfectly reasonable to expect to work with it, and limit reserve building right now.  But that is not the case - we are presently seeing a vast excess of grain production - mostly going straight into gas tanks and CAFO meat.  As economist Amartya Sen has observed, famines are usually about access to food, not absolute supply.  Well, for billions of people in the poor world and millions in America can walk into stores filled to overflowing with food - and cannot touch any of it, because they cannot afford it.  It is that experience of hunger in a world of plenty that millions of people are experiencing for the first time now. 

Moreover, the kind of stockpiling most of the people I’m talking about are doing is not only ok, it is great for the development of local food systems.  People are searching out local grain and legume growers, and buying direct, or at worst, buying direct when possible from small scale producers in someone else’s locality.  There are, of course, people who can’t do that - but generally speaking, most of my readers with extra money are essentially investing it in local staple food systems, and that is an extremely good use of money.

Even if you are not able to buy local and organic, you should remember that your use of food is the real purpose of the food - you aren’t buying your grains to feed to feedlot cows, or to burn in your car.  You are buying food to *EAT* it.  Eaters should always have first rights to food. Moreover, those of us who are concerned about the failure of our nations or regions to stockpile food during our fat years have a reason and a responsibility to take on that role for themselves.

The thing is, organizing and keeping grain reserves is one of those “comparatively good uses for government” things.  Thus, moves by nations to stabilize or increase their reserves, while a day late or a dollar short, again, are not the root problem - yes, they are driving short term price rises. But they are also responding, not to an imaginary problem, but to the real danger that people will starve to death and die.  Market analysts who talk about the problem of people holding back food and creating subsidies are ignoring the fact that nations are responding because a substantial portion of their populace is in danger of death from hunger and hunger related disease.

“To calm increasingly concerned Chinese consumers — for whom prices rose 8.7 percent in February from a year earlier, the biggest increase in 12 years — the government froze the prices of some grains, meat and eggs. Premier Wen Jiabao announced this week that China is largely self-sufficient in rice production and has stockpiled 40 to 50 million tons of rice.

The Chinese government also has run picture after picture in local newspapers of its “strategic reserves” of frozen meat, sacks of grain and barrels of cooking oil.”

Today a San Francisco Chronicle editorial argued that “hoarding” only makes things worse for everyone.   In The Times of India, Swaminathan S. Anklesaria argues that “national hoarding” or curbing exports is itself a major problem, and that governments should not try to mitigate hunger by restraining exports.

“The lesson is clear. Curbing exports is a form of national hoarding. If every country tries to hoard food, food prices will naturally rise. Governments would like to believe that hoarding by traders is terrible, whereas hoarding by governments promotes the public interest. But the impact on prices is exactly the same in both cases. Indeed, when governments start to hoard food out of panic, the panic itself stokes further inflationary fears.

That is why I am not optimistic about the Indian government’s anti-inflation package. The government thinks it is improving domestic supplies and hence bringing down prices. In fact the government is adding to the global hoarding problem, and stoking panic too. So, expect food inflation to keep rising in coming months.

When and how will it end? The roots of today’s food inflation are global, and cannot be tackled by the Indian government in isolation. Inflation will come down only when world food production rises, and world prices fall. That cannot happen immediately. “

But implicit in this assumption is the belief that it would be better to let some people starve than to start the cycle of driving up prices, or having governments stabilize them.  This is a form of free market orthodoxy that doesn’t tolerate any dissent - people dropping dead of starvation?  Well, the solution is to let the market handle it, which, of course, it will - in due course.  Pay no attention to the corpses on the side of the road.  Wanting people to eat and worrying they won’t, well, that’s a form of panic!  Crazy, crazy panic.

This orthodoxy  also does not distinguish between forms of national hoarding - storing the food your country produces to feed its population is described as national hoarding - but no such description is given to the production of biofuels, almost always used within nations, to feed the cars of people who are already well fed.  If there is a form of hoarding going on, it can be best seen in ethanol and other grain production - we are hoarding our food for our cars.  We could make the same about meat production - heavy meat consumption results in the removal of potential exports from markets that, in this case, desperately need them.

Worldwide, the costs are already rising in human terms.  The UK Guardian reports:

“Cameroon At least 24 people killed and 1,600 people arrested in February. Taxes slashed on food imports and public sector wages increased by 15%.

Indonesia 10,000 demonstrated outside the presidential palace in Jakarta after soya bean prices rose more than 50% in a month and more than 125% over the past year.

Egypt Seven people have died in fights or of exhaustion queuing for subsidised bread. Dairy products are up 20%, oil 40%.

Burkina Faso Riots in three towns after the government promised to control the price of food but failed.

Guinea Five anti-government riots over cost of living in past 18 months.

Pakistan Thousands of troops have been deployed to guard trucks carrying wheat and flour.”

Earlier this week, the World Food Program head reported in Ethiopia that the problem is not absolute shortages, but growing urban hunger, as urban dwellers, pushed off the land by globalized practices of food dumping and now dependent on imported food, can no longer buy it.  African nations that were once nearly food self-sufficient now depend on cheap imports for 40% or more of their food - and there are no more cheap imports.

So should you stop buying food to store?  No.  What you should stop doing, if you haven’t already is this.  Stop eating CAFO meat - period.  Don’t buy any meat that isn’t grassfed and local, and sustainably raised.  Go vegetarian if you can’t get good local meat.  And everyone who has more than they need needs to both redouble their charitable giving and their advocacy against biofuel growth.  But don’t be ashamed of feeding your family, or planning ahead for tight supplies - instead, donate what you can so that someone in Asia or Africa can buy a little extra for their families.  Let the cars worry about whether there will be enough grain in reserve.  If you want to help stop biofuels growth, consider signing this petition and supporting the work of Food First and other groups trying to stop the conversion of human food to car food.

There is a Mishnah (a Rabbinical expansion of a Biblical Story) that says that after Joseph and his brothers were reunited, Jacob and his sons made their way to Egypt where there was food in the famine.  On the way to Egypt, one day, Jacob awakens and tells his sons to get up and plant cedars in the desert.  They ask him why?  And Jacob answers that someday they will come out of Egypt again at the end of some terrible times, and when they do, their descendents will need those cedars.  “So rise up now and plant seeds.  For you are planting on this day the seeds of your own deliverance”

If you want to help in the world food crisis, give what you can, protest biofuels,  and eat lower on the food chain.  And at the same time,  turn your efforts, the work of your hands and heart and time and energy to doing as Jacob and his sons did - planting seeds, the seeds of our own deliverance.  The time is not so far that we will need them.

 Sharon   

• Food Storage , agriculture , economy , poverty
• Comments(27)

Sharon March 31st, 2008

Nearly every financial report that discusses how bad the economic situation is going to be reports two facts.  1. Ben Bernanke is a student of the Great Depression, which means we’re safe from making the same mistakes twice.  2. Clearly, we aren’t in the same situation as the Depression, because after all, the situation isn’t the same.  Consider today’s essay in “Fortune” which repeats a mantra I’ve noticed over and over again - remember, things aren’t nearly as bad as in the Great Depression.

“No, Meltzer isn’t saying that a Great Depression - 25% unemployment, social unrest, mass hunger, millions of people’s savings wiped out in bank collapses - is upon us. Nor, for that matter, am I. But the precedent is unsettling, to say the least. You can only imagine how unsettling it is to Federal Reserve chairman Ben Bernanke, a former economics professor who made his academic bones writing about the Great Depression.”

This is supposed to reassure us - and, despite acknowledging the danger,  to point up the radical differences between the Depression period and the present.  And I suspect for some people it works.

The problem is, the parallel is a false one.  The statistics that the commentators are citing are statistics from deep in the middle of the Depression from 1933 when unemployment really was 25%, and they are holding them up against our present situation - at the very beginning of a financial disaster.  Observing that the Great Depression isn’t upon us isn’t very helpful, because at the comparable stage of the Great Depression, those things weren’t upon us either. 

For example, when the stock market crashed in October of 1929, a news report observed that “the vast majority of Americans remain unaffected.” Two months after the stock market crash, Secretary of the Treasury Andrew Mellon said, “I see nothing in the present situation that is either menacing or warrants pessimism.” 

Unemployment did not instantly rise to 25% - in March of 1930, it was 3, 250,000 (and this is some months after the crash).  By 1931, however, a year and a half into the crash, it had doubled to above 7,000.  By 1933 it would double again.  But again, at a parallel point in time, unemployment was comparatively reasonable (high by our present standards, but fairly typical for the period).

Meanwhile, those who were lucky enough to keep their jobs found themsleves at first in a decent position - as Don Lescohier reports in Common’s _History of Labor in the United States_ “The first impact of the Depression of the ‘thirties did not affect the wages structure.  It cut the earning of millions through unemployment and part-time work before it affected wage rates.  It was not until the last quarter of 1930 that appreciable downward changes in manufacturing wages occurred.”  Yet again, the first ripples in the financial centers didn’t actually translate right away.  But by 1932, wages in Ohio had fallen by nearly 60%.

In that sense, the current system may be worse than the Depression - while wages haven’t declined, buying power has declined much more precipitously than it did in a parallel period during the Depression.  For example, in the news today, food stamp use is approaching record highs - that is, while unemployment remains comparatively low and wages are still stable.  This is not a good sign. 

On the other hand, there are parallels we might want to look at.  For example, in Harper’s Magazine in 1933, a lawyer from Mason City, Iowa wrote about the housing bubble that preceeded the collapse,

“Farm prices shot sky high almost over night.  The town barber and the small-town mercahant bought and sold options  until every town square was a real estate exchange.  Bankers and lawyers, doctors and ministers left their offices adn clients and drove pell mell over the country to procure options and contracts upon this farm and that, paying a few hundred dollars down and expecting to sell the rights before the following March brought settlement day.  Not to be in the game marked on as an old fogy, while paper profits were pyramided and Cadillac cars and pleasure trips to the cities took the place of Fords and Sunday afternoon picnics.  Everyone then maintained that there was only a little land as fertile as the fields of Iowa, Illinois and Minnesota, and everyone ought to get his part before it was all goine.  Like gold, it was limited in extent and of great potential value.  Prices skyrocketed from $100 to $250 and $400 per acre without regard to the producing power of the land.

During this period insurance companies were bidding against one another for the privelege of making loans on Iowa farms at $90 or $100 or $150 per acre.  Prices of products were soaring.  Everyone was on the highroad, not only to comfort, but to wealth and luxury.  Second, third and fourth mortgages were considered just as good as government bonds.  Money was easy and every bank was ready and anxious to loan money to any Tom, Dick or Harry on the possibility that he would make enough in these trades to replay the loans almost before the day was over.”

I bet you thought we invented housing bubbles ;-).  But again, the bust didn’t happen instantly.  There were foreclosures in 1929 to be sure, but the wave of property taking occurred primarily in 1931 and 1932. 

Right now the media is starting to warn that there “might” be a real Depression.  But they are quick to say that now isn’t much like 1929 - and we are buying it,  because most people’s relationship to historical events is pretty sketchy - when talking on a long historical scale, the fact unemployment really began to get bad 2 years after the stock market crash is a blurry fact, the difference of a typo in numbers.  Who cares whether it happened in 1930 or 1931, the depression is the depression.  But the thing is, if you were living it, watching things unfold, it looked to people just like it looks to us now - a few steps forward, some good news, a few steps back, a bit of bad news.  And in the interval between one piece of history (the stock market crash) and another (unemployment peaking) were four miserable years of life gradually sliding down.   We understand history in chunks, but we live in history day to day, and everyone who lives in history experiences it that way.  We forget that at our peril. 

Telling us that it isn’t as bad as the mid-point of the depression isn’t just useless, it is misleading, and intentionally so.  Compare the worst to the not so bad, and things don’t look that bad.  But compare where we are now to where we were at a comparable period of the Depression, and things begin to look worse - and more accurate.

I can only hope that Ben Bernanke is a better student than the people who write these articles.  But of course, he has even more incentive to tell us that things aren’t really so bad.

 Sharon

• economy
• Comments(14)

Sharon March 28th, 2008

If there is one thing Jim Kunstler deserves all the props in the world for, it is his naming and describing the complex, sweeping and all-encompassing crisis we’re facing.  He called the combination of energy, climate and financial crisis “The Long Emergency” and I think that’s turning out to be just about right.  As a prophet, Kunstler is looking pretty accurate in some respects (I’m still kind of skeptical about the Asian pirates marauding across the northwest coast, but maybe I’m wrong ;-).

I’ve been getting emails from people asking me whether the present crisis is “just” financial and whether/how peak oil and climate change are factors.  And this is a fascinating question - because, honestly, it is awfully hard to sort them out.  In fact, it is really all one crisis - I call it (perhaps not as eloquently as Kunstler) the crisis Ourobouros, the great worm that encircles the globe, and does not realize that he is devouring his own tail - it is impossible to entirely find the beginning or end.  But we can take a stab at it.

 I thought for my own edification, and perhaps for others, it might be worth trying to sort out how all three segments of our present situation are working together, and what parts of the hard times facing us are tied into more than one segment of the crisis.  I make no claims that I can provide a perfect explanation, or that I won’t miss some links, but if nothing else, it is an interesting way for me to clarify my own thought.  So I’m going to list present problems one by one, and describe how (if at all) they are tied into each element - financial crisis, climate change, peak oil.  I’ll try and figure out whether what we’re seeing is a cause or effect, and just how closely related they are.  I doubt I’ll even come close to articulating the whole picture - that sounds like a book in itself, and one for someone more knowledgeable than I.  But here goes nothing:

Crisis # 1: Rising Food Prices

Relationship to Climate Change: Super Direct. Climate change is a direct cause of rising food prices, particularly the rise in wheat prices.  Wheat crops were heavily affected by drought in Australia, the Middle East and the Mediterranean.  Aquifer depletion in China, along with reduced rainfall is also affecting wheat crops.  Massive growth in  biofuel production, was in part motivated by the (completely erroneous) assumption that biofuels would produce fewer greenhouse gasses than fossil fuels.  Climate instability is also a primary motivator as nations become more concerned with feeding themselves, and restrain exports or raise tariffs, as when Russia raised wheat tariffs and Egypt and India announced they will largely stop exporting rice.

Relationship to Peak Oil: Super Direct. Peak oil is a direct cause of rising food prices.  Biofuels are only a feasible project in a world of declining oil availability - their Energy Returned over Energy Invested is simply too small to make any sense when you’ve got plenty of oil and natural gas.  The mistaken belief that we can keep all the cars going and our basic lifestyle intact has led to a rush to biofuels that has helped driving prices of staples, meat, eggs, milk and other foods up by 50%. In addition, rising fertilizer prices (because of rising prices for natural gas and rising prices for rock phosphates) are also driving food prices up, as are the costs of transporting industrial food over long distances. 

Relationship to Financial Crisis: Direct. The financial crisis is in part a result of rising food prices.  Over this winter, we saw more and more people using their holiday gift cards and store credits for groceries - food prices are rising so quickly that they are cutting heavily into consumer spending, which is a substantial part of the economy.   Food price rises have slightly slowed growth in countries whose wealth has been propping up the US economy. This is somewhat speculative, but rising food prices are probably an underlying force fueling the collapse in housing values - the reality is that basic needs like food and housing must both be met, and when you are paying more for one, you can pay less for another.  I’ve written about the relationship between housing and food prices here.

Crisis #2: The Housing Collapse

Relationship to Climate Change: Tenuous.  So far, sea levels haven’t risen enough, and climate change hasn’t been a large enough factor to really motivate large numbers of people to relocate.  Some farmers in Australia, and a few others are starting to see the writing on the wall, but mass migration in the rich world has not yet affected property values.  So far, people are still looking at any given disaster as short term thing.  I don’t expect that to last.  In the long term, climate change will probably dramatically alter housing patterns, and cause some markets simply to collapse.

Relationship to Peak Oil: Substantive.  I’m going out on a limb here, because I’ve seen no research suggesting this to be true, but while the majority of the housing collapse is based on the fact that we had ridiculously overinflated housing prices to begin with, I think that it is also the case that rising energy prices for home heating, cooling, food and other things have begun to eat into not just people’s ability to pay a large chunk of their income towards a mortgage, but also into their belief in housing as a refuge from difficulty.  It isn’t an accident that the housing boom really took off in the US shortly after 9/11, when people turned inwards, hiding from the outside world. Again,  I’m speculating, but I think the outside world has penetrated, and the idea that a home could be a form of protection is wearing off in the face of skyrocketing costs. Also, as energy prices rise, local governments are less able to maintain services -we have seen this with school bus and plowing declines - and thus become lower value regions, although the latter is a tertiary effect.

Relationship to Financial Collapse: Absolutely Direct.  In this case, it operates as both a cause and an effect.  The housing boom and the use of inflated house values to borrow was the cause of the bubble, and the collapse of housing prices is, if there is a single root cause, the cause of the crisis.  But it is also an effect of drying up credit - the less there is to borrow, the smaller the chance people will buy.    The more foreclosed and devalued properties there are, the less reason to buy a new house.  It is vicious circle, and it looks like it has a lot longer to go.

Crisis #3 - Rising Gas Prices

Relationship to Climate Change: Not Much Yet.  We are going to see a strong relationship in both cause and effect here, but so far, the effect has been small.  So far, the major effects of climate change in oil prices are limited to natural disasters affecting refineries, and growing political conflicts over water that threaten economic relationships.  None of these is terribly acute yet.  However, with discussion of carbon taxes in the works and more and more disasters, water shortages and other problems occurring, we may see supply issues more tied to climate change.  More importantly, gas prices have yet to drive off global demand enough to mitigate climate change.  As prices get higher, more effects should be seen - but probably not enough to mitigate things.

Relationship to Peak Oil: Umm…duh!  Do I really have to explain this one?  Yes, peak oil is the root here.

Relationship to Financial Crisis: Significant, but mostly concealed. Growth requires energy - and quite a lot of it. I won’t go into detail here, since Gail the Actuary has just done a great talk on this subject which you can read here that covers anything I would say better.

Crisis #4 - Failing to Mitigate Climate Change

Relationship to Climate Change: Well, yes.  This one seems like it would be a “duh” but it actually isn’t just that.  Yes, our failure to mitigate climate change is causing climate change.  But we are also failing to mitigate climate change *BECAUSE* of climate change.  That is, the rising number of natural disasters are making us react to climate change more and more, rather than addressing it.  We are spending more and more of our money and energies that we might use to adapt our infrastructure repairing it and fixing the damage of climate change.  Moreover, because climate change is happening much more quickly than anyone expected, we are still basing our mitigation efforts on inadequate information - that is, we’re still talking about 450 or 550 ppm limits, when 350 ppm is probably more like it.  We still don’t get what we even have to do - and that weakens our ability to do it.

Relationship to Peak Oil: Very Direct.  The reality is that all the discussions of what we potentially could do to mitigate climate change depend on large scale economic growth and lots of cheap energy to do the initial build out.  As energy prices rise and shortages start showing up (mostly so far in the Global South, but not entirely), we’re going to use more and more money and energy on mitigation. Diesel supplies, which are required for global trade, build outs, mining and other projects are showing shortages even in the rich world.  Moreover, our warmongering is the direct cause of 10% of all emissions, and that, of course, is about the oil.  James Hansen recently released an analysis suggesting that there isn’t enough oil in the ground to get us to the worst effects of climate change - but that would only work if we didn’t use the coal.  But higher oil and natural gas prices are likely to drive us steadily towards coal.

Relationship to Financial Crisis: Direct.  Despite all the hype, the payback time of most renewable energies is pretty damn long, compared to oil.  So in order to build out renewable energies you lots of liquid credit dripping off the walls and down into various new industries.  We need people who are willing not to get their money back for a good long time.  Guess what - those people are increasingly in short supply.  So expensive, long term renewable solutions are also likely to be in short supply.  On the domestic level, while some energy consumption drop is likely to happen, there are also likely to be short-term losses, for example as people priced out of heating oil in the northeast burn coal, or as people rely on existing gas guzzlers rather than buying more fuel efficient vehicles.  In the long term, a depression will cut consumption, but also adaptation, which will mitigate climate change and increase unhappiness.  Poorer cities and towns will likely end efficiency programs, nations may permit coal plants again to keep the grid going.

Crisis #5 - Increasing World Political Instability

Relationship to Climate Change: Absolutely Direct.  Climate change is likely to be a political disaster - up to 1.5 billion people without access to safe water, some without any water at all.  More than a billion refugees.  Growing hunger.  Political conflict over resources, land and borders of all sorts.  Some of these wars are already popping up - the conflict in the Sudan, for example.  And a fair bit of anger on these issues is likely to be directed (quite correctly) at the Global North, probably especially at the US.  We can also expect more internal conflicts within nations over resources, such as the ones the US is already seeing over water.  Political unrest is also likely to exacerbate climate change, as oil fields and forests are burned in conflicts and the war machine, which already produces 10% of all greenhouse gasses, expands.

Relationship to Peak Oil: Direct…And Getting More So. Well, I won’t belabor Iraq, but that’s probably just the beginning.  For example, Saudi Arabia recently announced it will no longer grow wheat, its primary staple - probably due to climate change.  Rice prices rose by 30% in a single day this week - and almost 2/3 of the world’s population depends on rice as a staple food, in large part due to climate change and biofuel production.  The rising price of corn is already causing tortilla riots, and that’s directly tied to ethanol production. 

Relationship to Financial Crisis: Tenuous…for the Moment. Even if you don’t think that any attack on Iran will be partly motivated by the Republican administration’s desire to distract from the unfolding financial crisis, our political relationship to Russia and China (among others), is clearly being shaped by America’s declining economic situation.  So far things are in the early stages, but it seems like the balance of world power is shifting, and how that will play out, we do not know.  The one good thing one can say about the coming financial crisis is that if the economy crashes enough we will probably leave Iraq fairly quickly.

I’m sure I could come up with a whole host of other crises to discuss, but this at least gets us a start! 

 Shalom,

 Sharon

• agriculture , economy , global warming , oil , peak oil
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Sharon March 27th, 2008

Some people say a man is made outta mud
A poor man’s made outta muscle and blood
Muscle and blood and skin and bones
A mind that’s a-weak and a back that’s strong

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don’t you call me ’cause I can’t go
I owe my soul to the company store

I was born one mornin’ when the sun didn’t shine
I picked up my shovel and I walked to the mine
I loaded sixteen tons of number nine coal
And the straw boss said “Well, a-bless my soul”

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don’t you call me ’cause I can’t go
I owe my soul to the company store

- Original Lyrics by Tennessee Ernie Ford, but my favorite version is by the Nighthawks

Ok, we’re at the end of a boom, headed solidly into what is known as a “bust.”  As Richard Heinberg so aptly put it, the party is over.  Most projections suggest that even if we’re not at an oil peak, oil will never be cheap again.  Neither will food.  A lot of people’s houses will never be worth what they paid for them, much less appreciate enough to allow them to keep borrowing money for more home improvements or upgrades. 

I was thinking on this subject as I’ve been known to do (I can just here you saying, “no kidding,  - does she ever shut about it?” ;-)), and it occurred to me to ask you all.  Was it worth it?  That is, do you feel like that last 10 years were good years for you?  Or for the country?  Was it all good enough that it was worth the price - both the one we’re going to pay now, but also the trade-offs we had to make in the process?

That last question might seem unfair - after all, who in their right mind would say anything good about the direction the US has gone in for the last 7 years?  Surely she can’t attribute everything about the Bush administration to peak oil and the boom times?  And as to the first, well, sure, there were good times, right?

But think how much of what we’ve lost you can attribute - that is, it isn’t just a coincidence that we got involved in a vast, endless oil war, that we lost much of our personal freedom, that we consolidated wealth into a narrower strip of the population than ever before, that corporate power grew exponentially.  I think this is one thing that a lot of people still don’t grasp - these things did not just happen - they were the logical cost of what we got in exchange.

That is, it isn’t possible to build an economy dependent on an ever-increasing supply of cheap oil without eventually making evil choices simply to keep the supply flowing.  It isn’t possible to stop taking care of ourselves and paying corporations large sums of our money to meet our most basic needs without those sums translating into political power.  It isn’t possible to increasingly invest in the money economy at the expense of the home and family economy without many people being increasingly priced out of the economy all together - and so on. 

We went shopping for a set of things - more stuff, bigger houses, more energy, endless growth, corporations who will take over any inconvenient jobs for us,  and we didn’t look very carefully at the price tag.  Essentially, we put it all on our credit card, and now we’ve hit our limit, and the payment is coming due.  And most of us had no idea what we were buying.  We did it in ignorance - but partly willful ignorance.  Because the evidence was out there if we had wanted to see it. 

Now I know that most of my readers are not blue collar workers, but I was struck about how apt the lyrics of “Sixteen Tons” are increasingly to all of us.  Yeah, it is presumptuous for middle class white folks to bemoan their fate when there are plenty of other more screwed people around us - except that most of us are going to be just another species of debt slaves - ones who are luckier than some, and less lucky than others.  And I know not all of my readers are all that middle class - and I suspect fewer and fewer will be.

Here’s the thing - we really did sell our souls to the company store.  The company store isn’t a literal spot - it is all the places that the growth economy says “put your money here” - and lookie, the company you just bought your shoes from is probably a subsidary of the same folks you pay your credit card bills to.  The whole growth economy is a company store - you keep the system going by paying in (buying stuff), some of the same money (a little less each time)  rotates around and pays you to buy more stuff, but some of it gets filtered off to go deprive you of access to power and put wealth in the hands of people who already had it. Catherine Austin Fitts calls the growth economy and the political system that goes with it “the tapeworm” and that’s not a bad name.  The thing is, we can never, ever catch up - we’re never going to fix the problem by chasing those dollars around in the circle again, and letting a few more people skim off the top.

So was it worth it?  If you think about what we lost in our democracy, in self-sufficiency, in good health as we ate crappy commercial food and sat in front of the computer all day, in our kids as they came to belong to popular culture and the tv advertisers more than they belong to us, was it really worth it?  For those of us who got them, were the nice clothes and the cool toys and the iPods worth it?  For those who didn’t, was it worth it that some of us got it?  Why the hell aren’t we angrier at ourselves, and those who facilitated these choices?  The reality is that life shouldn’t be “another day older and deeper in debt.”  The company store never has anything so good that it is worth getting to the point we’ve got to. 

Every so often, I run up against someone who is just plain horrified at the idea that in the future they might have to grow gardens, preserve their own, get out use their muscles to grow food, repair their underwear, to get out and do the work of making our own and meeting many of our own needs.  That work sounds too hard, the price sounds too high.  Over on the Oil Drum when I suggested we might need 100 million farmers, someone called me “Pol Pot” and suggested I was going to be driving aging baby boomers out to midwestern cornfields at gunpoint (ok, I admit to thinking that that image was kind of funny, actually ;-)).  That’s an extreme version of this conviction that it would be beyond horrible for us to have to meet more of our needs, but I do think that’s a common reaction - the idea that the work is too hard, that we’re better off now.

But I want to question that.  Are we better off?  Are we really?  Is the level of vulnerability we have to economic crisis better?  Does our food taste better?  Do we have what most parents and grandparents have - a secure future for our kids?  Do we know that they will have “better than we did?”  Do we look forward to a stable, optimistic world where things get better?

Any evaluation of how “bad” it will be to go back to an agrarian society has to have at its root an honest evaluation of what we have now - about what will be better and what will be worse.  And it has to contain an honest evaluation of the price we pay for what we get.  Most people on either side of any debate will pretend that there is no price tied to their “side” and a high one attached to the other.  We’ve gotten so used to the growth economy, and so confused by the sheer scope of what we live in that most of us can’t even see that the price tag was hanging off our company store purchases all along - we just didn’t read it.

 You went to work every day, and you contributed to the party.  You moved your metaphorical sixteen tons, whether you did it with sweat or with the long aching muscles of someone who sits on their ass all day.  And now, the FED will bail out companies, and let them come for your foreclosed house, and the credit card companies turn you into debt slaves.  That party is over - but it is extra over for us, who will not be bailed out.  Unless, of course, we bail one another as best we can, with what we’ve got. 

Time to recognize that we didn’t want half this shit anyway - and that none of us were prepared to pay this kind of a price.  So we need to find a new way - close the fucking store, start rethinking the system, and ask ourselves - what do we really want, and what is the price we’re really willing to pay for it?

And the answer to that is this - stop giving them your money.  Stop buying from the company store when you can.  And start building another economy - one that can hold us up when things fall down.  It isn’t easy.  It will suck.  A lot of us have unused muscles.  A lot of us will suffer.  But no small refinement on the present system will fix the problem - we paid too much for something we didn’t care enough about.  We lost what mattered.  Now, we have to get it back, and we’re going to have pay even more.  The difference is some things are worth high prices.

Democracy. Hope for the future.  A better world for our kids.  Once upon a time they were worth “Our lives, our fortunes and our sacred honor.”  They are sure as hell worth digging some dirt for.

 Sharon

• agriculture , economy , food , future , poverty
• Comments(34)

Sharon March 24th, 2008

 While we seek mirth and beauty and music light and gay,
There are frail forms fainting at the door.
Though their voices are silent, their pleading looks will say
Oh! hard times, come again no more.

Let us pause in life’s pleasures and count its many tears,
While we all sup sorrow with the poor.
There’s a song that will linger forever in our ears,
Oh! Hard times, come again no more.

Chorus.
Hard times, come again no more.
‘Tis the song, the sigh of the weary,
Hard times, hard times, come again no more.
Many days you have lingered around my cabin door.
Oh Hard times, come again no more - Stephen Foster (I particularly like the Nancy Griffith Version)

Wow - while I took a few days off, the FED magically fixed everything and now Bear Stearns is trading at $10 a share.  Which means, of course, that the economy is fixed, there are no worries about recessions, depressions, slumps or collapses.  I hope you are all feeling better now.  Isn’t to just fabulous?  Oil prices are down too - I’m told they’ll hit $30 a barrel anytime now.  Heck, I’m going to pick up a Hummer and some Bear Stearns shares next time I go out!

If, however, you still have a few teensy, eensy, weensy doubts about whether the magic of nationalized debt will fix everything for you, I thought it might be instructive for all of us to sit back and listen just a little to people who have already been through a really bad economic crisis.  I’m not talking about wussy little downturns like the dot.com bust, but real hard times.  After all, it seems just possible that the geniuses who created this mess haven’t quite thought of everything.

And it isn’t like folks who have been through tough times are in short supply - in fact, you don’t have to read accounts from long ago.  Chances are you can find a neighbor or someone in your town who, in spite of the prosperity we’ve enjoyed can tell you what it is like to suck it up and do without, not with an Ipod, but medical treatment, heat or dinner a few times a week.  There are plenty of such folks like my neighbors Dennie and Gwen (names and some details have been changed to protect their privacy),  who have a daughter in college and his child support payments, their inadequate income and a big worry about the fact that they think his cancer may have recurred - but they don’t really have the money, insurance or time off work to go find out - so they just aren’t thinking about it.

But there is a qualitative difference between the rich world poverty we know right now and mass collective poverty - rich world poverty is heavily mitigated by the wealth around the poor.  For example, if Dennie could get his step-daughter in college to teach him to use the internet (or would let me do it for him - trust me, I’ve offered), he could find a program willing to cover his diagnosis and treatment.  If his wife was willing to go on food stamps and to the food pantry and accept the loss of their house they could probably almost survive the loss of his income when the small construction company that employs him dumps him off their payroll.  If they were willing to see her daughter give up college, they all could get along decently.  There are options out there - painful ones, but they exist. 

But in many cases, those backup resources depend on a body of wealth out there - on able to pay consumers who can absorb costs others can’t cover, on the generosity of those who are comparatively well off to fund food pantries and charitable programs, and a tax base able to support other resources.  Being poor in the rich world sucks badly - but it does come with some cushions against some blows.  It does mean that the first time Dennie had cancer, he got treated.  It does mean that while Gwen can’t get the asthma treatments she really needs, she can get a few things through Walmart and drug company programs. They can clothe the kids at goodwill and their daughter is bright and gets scholarships.  Instead of the first bad blow being a death sentence, they get nibbled by ducks for a good long time - and that is better.  Not good, just better.

But what happens if the body of comfortably off taxpayers starts to disappear?  What happens if charitable giving declines because there aren’t that many people left in a position to give?  What happens if you live in a place where most people are struggling to get by, and there’s not much in the way of safety net?  And what happens when the comfortably off are no longer so comfortable or even are truly poor - among thousands and millions of truly poor neighbors?

For all that I make mock of the present situation, it may well be that some combination of actions can avert that kind of crisis.  But I don’t (and let us all express our gratitude to the divinity or absence thereof of our choice that this is the case) govern the FED.  Instead, my work is to look for a way for us all to go on even if salvation doesn’t come and real hard times visit us instead. 

And I think one of the most valuable things we can do is to look - to truly look - at what our lives may be like.  I think knowing how people in other places and times have survived great hardship is essential to understanding that we *CAN* go forward even in hard times and find a future for ourselves.  The tools of getting by are essential - and the best way to learn them is through the people who endured.

One source for American experiences is the Great Depression - and there are some amazing oral histories out there where people speak their own experience, or where such accounts make up a large portion of the available material.  Some internet resources: 

http://lcweb2.loc.gov/wpaintro/intro01.html - wonderful WPA interviews, including some in audio!

Tons of great resources: http://www.oah.org/pubs/magazine/greatdepression/chamberlin.html

Books: Studs Terkel’s _Hard Times: An Oral History of the Depression_ gives us an enormous range of views, from the victims to those who did well.  One of my favorite lines in the book comes from a man named Clyde T. Ellis, who said, “A group of us there decided if we were going to hell, we might as well get active in it.”  Now there’s a slogan for us!

Scoop Landford, who spent a term in prison during the Depression talked about how bad as it was in the prison (and it was bad) the prisoners were in some respects better off than those who guarded them.

“They {the guards} were as bad for it as we were.  A lot of them was eating in there on the sly.  I’ve even actually given to them a piece of corn bread to take out.  Nearly all of ‘em were family men…We eat least had a place to eat sleep.”

in David Shannon’s _The Great Depression_, we get primary source accounts of events written as they were happening.  For example, a 1932 account by the director of a relief agency in Philadelphia describes what things were really like.
“Another family did not have food for two days.  Then the husband went out and gathered dandelions and the family lived on them.

Still another family thinking to get as much as possible with their last food order bought potatoes and for 11 days lived only on them…

I should also like to say that when we talk to people who ask about unemployment they say, “Well, people manage to get along somehow or other, don’t they?  You do not have very many people who really drop dead of starvation?”  That is perfectly true.  Actually, death from starvation is not a frequent occurrence.  You do not often hear about casualties of that sort.  This is because people live in just the way that I have described.  They live on inadequacies, and because they live on inadequeacies, they die of disease not precisely hunger.  The thing doe snot become dramatic and we do not hear about it.  Yet the cost in human suffering is just as great as if they starved to death overnight.”

In _Making Do: How Women Survived the 30s_ Jeane Westin interviews women and reports their recipes, strategies and histories.  The Betty Crocker Company offered a week’s nutritious menu using only foods available to those on the relief lines. 

My favorite story there is by Nice Rodriguez who worked as a housekeeper and in the fields to support her family because her husband was a Mexican citizen and not eligible for most work.  She talks about working long days cleaning for a dollar a day, but of having the ovaries to turn to an employer who demanded too much and say,

 “I mean she wasn’t mean or anything but I didn’t like the way she act.  She says ‘Well, Nico, I want you to clean the whole house, irona dn wash and do the windows and clean the cupboards and put in new paper…’  I just look at her and I say, ‘You a woman…I a woman.  Do you think you could do all that in eight hours?’

She had five kids and a dependent husband.  How many of us could do the same?

Another interviewee talks about making Christmas presents for her three children - from her own only sweater, about the work of picking out the yarn, making new mittens and what it was like to go out to do chores without even a sweater every morning.

In _Women of Valor_ edited by Sternsher and Sealander, Lillian Wald’s account of the time leading up to the famous stock market crash is earily prescient to today.  Somehow, I had alwasy envisioned the crash as unanticipated.  But it was not.

“Increasingly in the winter of 1928-1929, months before the stock-market crash, were were made aware of the foreboding among our neighbors.  In the kindergarten on morening, when the little ones were sitting around the table drinking their milk, I said, ‘What do you think you are going to be when you grow up?’ There was no active response and to prod them I said, ‘when I was a little girl I thought I should like to be carpenter….’  Whereupon a four-year-old who sat there, his head in his hand, a sober expression on his little face answered, ‘Miss Wald, the carpenter that lives in our house ain’t got any work.’

The nurses’ daily records are delicate barometers of conditions.  This was brought home to me once as I watched our statistician sticking her pins in the map that shows the current cases of pneumonia…I was told that the children of the kimono workers then on strike were probably getting less milk and good nourishment and hence their resistance was lowered.

Signs of the growing storm multiplied.  Within a brief period a success of individuals came to ask for work, and that stimulated us to further inquiry.  In January 1928, we discussed this with our intimate circle.  In February 1929, eight months before the “boom” collapsed, we summond our colleagues to a meeting, just as, on the first declaration of war in August 1914, we called a group to come together in solemn conference.”

In Timothy Egan’s superb book _The Worst Hard Time_ we are reminded that environmental disasters integrate with and exacerbate economic crises - in fact, the two cannot be seperated, because in every respect, the loss of our natural resources costs us the basic elements of prosperity, and the price cannot be deferred forever.

Egan tells the story of conservation agricultural expert Hugh Bennet speaking to senators in Washington DC on the day that the dust storms from the plains states made it all the way to the Capitol.  When the sky went black and dirt poured down on Washington during Bennet’s presentation, he turned to the senators and said, “This, gentlemen, is what I’m talking about…There goes Oklahoma.”  

We could look at other places, other times - Britain during and after World War II, Okinawa after the war, Argentina a few years ago, Russia, Cuba, Zimbabwe.  In each case the cause was different, but the hard times came.  In fact that may be the one great truth of history - that eventually, hard times always come back.  Check out Dmitry Orlov’s wonderful book _Reinventing Collapse_ to read about another place that couldn’t possibly fall apart.  Orlov contends we are presently at the first stage of such a collapse, and we had damned well better work to arrest our free fall.

What do we do?  Do we just get scared and depressed?  Well, it is ok to be scared, but in embedded in these stories are ways to go forward.  They show the value of courage, and toughness, honor and love.  They tell stories of women giving birth in a hospital with no place to take a baby home - and the woman next to her who brought her back to her tenement.  Of organizations of black tenants who took evicted people and put them back in their houses, of penny auctions and journalists who fought their editors to tell the truth.  They tell the stories of gardens and working long hours gleaning potatoes and wheat to keep bellies full.  They tell stories of moments of joy and love in the midst of terrible sadness, and most of all, of making do, and thus ensuring that things were better than they could have been.

Hard times will undoubtably come again, if not now, then sooner than any of us would like.  Best we face the future eyes up, with all the courage and all the tricks learned from those who preceeded us that we can muster!

 Shalom,

 Sharon

• economy , poverty
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