“Now remember, when things look bad and it looks like you’re not gonna make it, then you gotta get mean. I mean plumb, mad-dog mean. ‘Cause if you lose your head and you give up then you neither live nor win. That’s just the way it is.” – Josey Wales – Outlaw Josey Wales
To hell with them fellas. Buzzards gotta eat, same as worms. – Josey Wales – Outlaw Josey Wales
There is a war underway in this country. The working middle class that built this country from the ground up are being systematically eliminated by a small cabal of super rich powerful elite. The middle class was much like Josey Wales, a peaceful Missouri farmer just working his land trying to make an honest living. Then a band of lawless thugs come along and kill his wife and son and burn down his farmhouse. A man can only take so much before he gets mean and vengeful. The rich and powerful, the corrupt Wall Street bankers, the banker controlled Federal Reserve and the bought off politicians in Washington D.C. have been pillaging the middle class for decades.
They’ve killed the middle class and in 2008 they essentially burned down the worldwide financial system. Somehow, they convinced the American public the war was over. A small band of super wealthy individuals on the boulevard of greed, Wall Street, and in the putrid swamp of Washington D.C. blackmailed the American middle class taxpayers by threatening to bring down the financial system unless they were handed $700 billion, saved from bankruptcy by the Federal Reserve buying $1.2 trillion of toxic mortgage debt, and provided free money by their sugar daddy at the Federal Reserve. The politicians then absconded with another $800 billion of taxpayer funds and handed it out to their corporate political cronies in the name of shovel ready projects and adding 3 million new jobs.
At the end of the Civil War, the Confederate guerrillas that Josey Wales had joined agree to lay down their arms with a promise of freedom. Instead the Union thugs began to mow them down with a Gatling gun. This is perfect symbolism for what the ruling elite have perpetrated in the last three years. Within months of nearly destroying the worldwide financial system, the Wall Street desperados were paying themselves hundreds of billions in bonuses for a job well done plundering and sacking the American middle class taxpayer. They certainly earned the bonuses, considering they could borrow from the Fed at 0% and earn 2.5% on Treasuries or pile into stocks and commodities, knowing Uncle Ben would guarantee profits with QE2.
Jim Grant, in early 2009, described the excessive response by those in power to a crisis caused by them:
“To try to exorcise the Great Depression, President Herbert Hoover deployed fiscal and monetary stimulus equivalent to 8.3% of gross domestic product. To banish the demons of 2008-9, successive administrations have spent, or encouraged to printed, the equivalent to 28.9% of GDP. A macroeconomist from Mars, judging by these data alone, would never guess how much more severe was that depression than this recession. The decline in real GDP from August 1929 to March 1933 amounted to 27%; that from December 2007 to date, just 1.8%… so for a slump 1/15 as severe as the Depression, our 21st-century economy doctors administered a course of treatment more than three times as costly.”
Ultimately, GDP fell 3.1% between the 3rd quarter of 2008 and the 3rd quarter of 2009. The government response has amounted to throwing $7 trillion ($4.2 trillion increase in national debt, $700 billion of TARP bailouts, $200 billion of losses taken by Fannie Mae & Freddie Mac, $100 billion of losses taken by the FDIC, and the Federal Reserve increasing their balance sheet by $1.8 trillion) of your tax dollars at the problem. As a side benefit, they have thrown senior citizens under the bus by paying them 0% on their savings, not providing a cost of living increase to their social security for two years, and hitting them over the head with 10% levels of inflation on food and energy.
At this point it looks bad for the working middle class and it looks like they aren’t going to make it through the next banker made financial crisis. The middle class just wants the chance for a new beginning. They want jobs. They know the country has been hijacked by the banking corporatocracy, supported by the corrupt political class in D.C. It is time for the middle class to channel their inner Josey Wales and get plumb mad-dog mean. It is not time to lose your head and give up. The middle class are being pursued by Wall Street bounty hunters and government crooks trying to finish them off. It is time to make a stand and fight. It is essential that we know our enemies and how they achieved their power. It all began in 1913 with the creation of the Federal Reserve and the implementation of the personal income tax. I’ve previously detailed how the baby boom generation contributed to our fiscal plight in Part One – For a Few Dollars More, how the actions of the Federal Reserve’s over the last few decades have impoverished the middle class and placed the country at the brink of collapse in Part Two – Fistful of Dollars and addressed the nefarious creation of a central bank in Part Three – The Good, the Bad, and the Ugly.
How to Buy a Tax Break
“There’s another old saying, Senator: Don’t piss down my back and tell me it’s raining.” – Fletcher – Outlaw Josey Wales
When the Federal government spends more each year than it collects in tax revenues, it has three choices: It can raise taxes, print money, or borrow money. While these actions may benefit politicians, all three options are bad for average Americans. – Ron Paul
The Senator pissing down the backs of Americans while telling us it was raining was named Nelson Aldrich, from Rhode Island. He was a Republican lackey of J.P. Morgan who was the driving force behind the creation of the Federal Reserve and the passage of the Sixteenth Amendment, creating the personal income tax. His daughter married John D. Rockefeller, Jr. and his son became the Chairman of Chase National Bank. I wonder how beholden he was to the banker class. A decade before 1913 Aldrich had declared an income tax as communistic. He was right. Karl Marx published his Communist Manifesto in 1848. It included ten planks. Two of the ten planks were as follows:
- A heavy progressive or graduated income tax.
- Centralization of credit in the hands of the State by means of a national bank with State capital and an exclusive monopoly.
The United States had tinkered with an income tax during the Civil War and the 1890’s, but the Supreme Court declared it unconstitutional. Until 1913, the Federal government was restrained from overspending because it was completely reliant on tariffs and duties to generate revenue. Without the ability to print money and tax its citizens, politicians could not roll out new programs and fight foreign wars of choice.The Sixteenth Amendment changed the game forever.
“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”
Politicians pulled the old bait and switch on the American people. The initial tax rates of 1% to 7% were low. That did not last long. By 1918, the top marginal rate was 77%, as Woodrow Wilson needed to fund his war of choice. The top tax rate reached 92% during the Eisenhower Administration and today rates are still 500% to 1,000% higher than they were in 1913. The government is addicted to tax revenue. In 2009, they absconded with $1.2 trillion in taxes from American individuals. Does anyone think the bloated government bureaucracy spends these funds more efficiently or for a more beneficial purpose than its citizens could have? The income tax distorts financial planning and business investment, and it encourages tax avoidance and evasion.
| Partial History of U.S. Federal Income Tax Rates Since 1913 |
||||
| Applicable Year |
Income brackets |
First bracket |
Top bracket |
Source |
| 1913-1915 | – | 1% | 7% | IRS |
| 2003-2009 | 6 brackets | 10% | 35% | Tax Foundation |
Source: Wikipedia
The average American thinks income taxes are essential because politicians tell them so. The only discussion is about what the rates should be. But, the country grew tremendously between 1789 and 1913 without a personal income tax. Income taxes do not benefit the average American, they drain wealth from the citizens and hand it to politicians who then use them to bribe constituents for votes with handouts and fund foreign wars of choice. The IRS tax code has progressively been utilized by the rich and influential class to skew it in favor of those with the most lobbyists. Politicians get elected by promising benefits to the masses while being funded by rich people and big corporations. A tax code of 60,000 pages, with over 600 IRS tax forms, and filled with tax breaks for influential constituents (farmers, oil companies, homeowners, foreign corporations, etc.) is not designed to benefit the average American. The tax code is used to pay off those who “contribute” to the politicians that control the tax code.
Congress frequently holds hearings on tax simplification so members can denounce the tax code’s complexity. Congressional experts and impartial think tanks provide useful simplification ideas. When the TV cameras are turned off, Congress swiftly ignores them and votes for more special interest breaks for their biggest contributors. The storyline that is pounded into the minds of all Americans is that 50% of the population pays no taxes and the rich pay an inordinate amount of taxes. The Republicans and Democrats fight a battle of false talking points to confuse and obscure the truth.
The Republican mantra since the Reagan era has been to cut taxes and allow the “free market” to work its magic. They have succeeded in convincing a vast swath of Americans that lowering the highest tax rates have benefitted the masses. This is completely untrue. An unfunded tax cut today is just a tax increase on future generations. Democrats went along with tax cuts as long as the Republicans went along with spending increases. The Democrats hit the jackpot, with a supposedly fiscal conservative president signing a Medicare D bill that added trillions of unfunded liabilities to our national balance sheet. The Republicans are on cloud 9, as a supposedly liberal anti-war president has increased war spending to $1 trillion per year while ramping up our foreign wars of choice. Everyone gets what they want in Washington D.C. This is called bi-partisanship.
The Big Lie
As the chart above shows, at least before Reagan the top marginal rates were kept high to pay for the social programs instituted by Congress and the wars of choice fought by our Presidents. After 1980, in some sort of warped Twilight Zone episode, politicians across the land convinced themselves and the masses they could have lower taxes, more entitlement goodies, never ending war, and an unlimited heaping of material goods, with no adverse consequences. Well, it was a lie.
- The GDP in 1981 was $3.1 trillion, today it is $14.7 trillion.
- The National Debt in 1981 was $907 billion, today it is $14.4 trillion.
- The amount of annual Federal income tax revenue in 1981 was $347 billion, today it is $1.1 trillion.
- The amount of annual Federal spending in 1981 was $678 billion; today it is $3.8 trillion.
- Total consumer debt in 1981 totaled $353 billion, today it is $2.4 trillion.
- Total mortgage debt outstanding grew from $1.5 trillion in 1981 to $14.6 trillion by 2008.
- Median household income was $17,710 in 1980 and is now $49,777.
These facts reveal an empire spiraling out of control, delusional and living on borrowed time with borrowed money. The output of the country has grown by 474% in the last 30 years, while the National Debt has grown by 1,588%. Those two facts alone paint a picture of eventual collapse. The lesson of allowing politicians and bankers unfettered access to unlimited amounts of fiat currency backed by nothing but a hollow promise to pay is clear, in the divergence of income tax revenue and spending. The dramatic slashing of top marginal rates from 70%, which had been in place for a fifty year period when the U.S. economy boomed, was supposed to invigorate the economy and unleash the free market spirit of our entrepreneurs. A funny thing happened on the way to prosperity for all. Federal income tax revenue has only grown by 317% in the thirty years since the Reagan Revolution. The CPI has grown by 289% over this same time frame. Therefore, tax revenue is essentially flat with 1980 on an inflation adjusted basis. This wouldn’t be a problem, except that the politicians we elected ramped up spending by 560% over these same thirty years. Federal spending has grown at almost twice the rate of income tax revenue. Bug meet windshield. I guess this is called supply side economics.
Politicians of both parties have promised the American public they could have low taxes, unlimited social welfare benefits, a house that always appreciated in price, electronic gadgets galore, and the true American dream of getting something for nothing. And it was all made possible by your friendly Wall Street banker and their friends at the Federal Reserve. The data above already paints a dire picture for the American Empire, but the next ten years will finish the job. GDP is stagnant as Federal government spending props up the teetering edifice of economic activity. The National Debt will reach $20 trillion by 2015 and is on course to reach at least $25 trillion by 2019. Both the Republican and Democratic “plans” to “reduce” the deficit are a joke. They don’t reduce anything. They add to the debt.
The citizens of this country should be outraged by such fiscal irresponsibility, and marching on Washington D.C. with pitchforks and torches. But, there is no outrage across the countryside. This is because the vast majority of Americans followed the example of their beloved government leaders and lived far beyond their means in a delusional attempt to borrow their way to material prosperity. The median household income has risen by 281% since 1981, less than inflation over the same time frame. The median household is taking home less than they did in 1981 on an inflation adjusted basis. The McMansions, BMWs, computers, 52 inch HDTVs, and 15 other essential electronic gadgets that represent the current American Dream were financed. Consumer debt, used to buy (rent) luxury automobiles and essentials like 4 TVs and 3 computers, grew by 680%, more than twice the rate of median household income. Mortgage debt grew by an astounding 973% in the last thirty years.
![[Mortgage+Debt+Outstanding+1952-2007.bmp]](https://2.bp.blogspot.com/__V1GJlBadyE/SZRz3kTxSfI/AAAAAAAAAag/Za3ExRYRDK8/s1600/Mortgage%2BDebt%2BOutstanding%2B1952-2007.bmp)
The last thirty years have been a faux American Dream. The madness of crowds has been replaced by the sober reality that the material goods purchased with debt steadily depreciate day by day, while the debt stays firmly in place. Who benefitted and who lost during these thirty years of delusion? There is only one beneficiary from the issuance of trillions in debt – Wall Street bankers. The ten biggest banks in the country hold more than 50% of the mortgage debt and 80% of the credit card debt in the U.S. The poor never had much, and they still don’t. Politicians have averted riots and social unrest by pouring trillions into welfare, social security disability, SNAP programs, earned income credits, and hundreds of other transfer payment bribes to the poor. The middle class has borne the brunt of the banker plundering and pillaging.
The Super Rich Storyline
There are three storylines that are pounded home repeatedly by the mainstream media and the Republican Party ideologues.
- More than 50% of Americans don’t pay any taxes.
- The top 1% pays 38% of all the Federal income taxes.
- Increasing the highest tax rate above 35% would destroy jobs and kill small business owners.
The misinformation spewed forth by the super rich, who control the media, politicians, and media message, to disguise their continued looting of the American middle class, is unrelenting. There are 117 million households in the United States with a median household income of $48,000. Data from the Tax Foundation shows that in 2008, the average income for the bottom half of taxpayers was $15,300. The first $9,350 of income is exempt from taxes for singles and $18,700 for married couples. Politicians of both parties also provided credits for children, earned income credits, mortgage tax deductions, property tax deductions, and a myriad of other tax goodie payoffs for votes. When half the households in the country make less than $48,000 per year in income, of course they won’t be paying any Federal income taxes. There are approximately 151 million Americans earning income. Almost 73 million, or 48%, make less than $25,000. As Wall Street enriched billionaires are interviewed by millionaire journalists on CNBC, scorning those who don’t pay their fair share of taxes, they outsource the blue collar jobs of those on the lower income scale to China and India. Without good paying jobs, the middle class uses debt to maintain their American dream, further enriching the billionaire class in a circle of death.
This chart reveals the true nature of who controls our country. It is a battle between a few thousand of the richest people in America versus the other 150 million. The facts are the middle class and poor pay a much higher percentage of their income in taxes than the rich. The Social Security tax cuts off at $106,800. Therefore, the median household pays 6.2% of their income, while the rich household making $5 million per year pays .13% of their income. This applies to sales taxes, property taxes, state taxes, local taxes and the thousand other taxes and fees charged on utility bills, etc. William Domhoff notes that the top 1% who make $1.3 million per year only pay 30.9% of their income in taxes, while those making $141,000 per year pay 31.5% of their income in taxes. I guess their tax lawyers aren’t as well paid. Even those making $34,000 pay 27% of their income in taxes.
Source: Citizens for Tax Justice
The top 1% does pay 38% of the Federal income tax because they have a 23.5% share of the national income. The last time the top 1% reached this level of income was in 1928, just before the Great Stock Market Crash and the Great Depression. During the glory years of the American Empire, between 1946 and 1971, the top 1% of households’ share of the national income ranged between 8% and 13%. With the era of unbridled greed and debt that began in the 1980s, the inequitable distribution of wealth has risen to new heights. This level of pillaging by those in control of the finance sector of the economy, supported by their mouthpieces in Congress, and championed by their controlled media pundits, has reached a level that will eventually lead to revolution.
The biggest lie pushed forth by the powerful super rich in this country is related to the top marginal tax rate, which is currently 35%. The Republican agenda includes a further cut in the top rate to 25%. It is sold to the American public as a good thing for them. It has nothing to do with them. The 35% rate applies to only taxable income over $379,000. Of the 151 million Americans earning a living, this rate would apply to about 200,000 people. The top marginal tax rates during the glory years of the American Empire (1946 – 1971) were between 70% and 90%. These rates only applied to taxable income above $400,000, when the average income was less than $10,000 per year. These were the best years for the American middle class.
The IRS issues an annual report on the 400 highest income tax payers. In 1961, there were 398 taxpayers who made $1 million or more. Today there are over 78,000 taxpayers who make more than $1 million. The loopholes written into the tax code over decades by lobbyists paid for by the super rich, plus much lower tax rates on the largest sources of income of the wealthy (capital gains taxed at 15%), explain why the average federal income tax rate on the 400 richest people in America was 18.11% in 2008, according to the IRS, down from 26.38% when this data were first calculated in 1992. Among the top 400, 7.5% had an average tax rate of less than 10%, 25% paid between 10% and 15%, and 28% paid between 15% and 20%. The average American’s share of their income going to federal taxes increased from 13.1% in 1961 to 22.5% in 2008. William Domhoff explains how the super rich have paid off Congress to rig the system in their favor:
“According to another analysis by Johnston (2010a), the average income of the top 400 tripled during the Clinton Administration and doubled during the first seven years of the Bush Administration. So by 2007, the top 400 averaged $344.8 million per person, up 31% from an average of $263.3 million just one year earlier. How are these huge gains possible for the top 400? It’s due to cuts in the tax rates on capital gains and dividends, which were down to a mere 15% in 2007 thanks to the tax cuts proposed by the Bush Administration and passed by Congress in 2003. Since almost 75% of the income for the top 400 comes from capital gains and dividends, it’s not hard to see why tax cuts on income sources available to only a tiny percent of Americans mattered greatly for the high-earning few. Overall, the effective tax rate on high incomes fell by 7% during the Clinton presidency and 6% in the Bush era, so the top 400 had a tax rate of 20% or less in 2007, far lower than the marginal tax rate of 35% that the highest income earners (over $372,650) supposedly pay.” – Wealth, Income, and Power – William Domhoff
As an added bonus, hedge fund managers like John Paulson, who made $9 billion over two years, paid no income taxes on his windfall. In 2007, Republicans and a key Democrat, Sen. Charles Schumer of New York, fought to keep the tax rate on hedge fund managers at 15%, arguing that the profits from hedge funds should be considered capital gains. Schumer, the ultra-liberal champion of the poor, knows who butters his bread – Wall Street. But it gets better. As long as they leave their money, known as “carried interest,” in the hedge fund, their taxes are deferred. They pay taxes only when they cash out, which could be decades from now. These upstanding citizens access their jackpot winnings by borrowing against the carried interest, often at rates as low as 2%. I’m sure every youngster in America dreams of becoming a hedge fund manager so they can use system risking leverage to make bets on derivatives, reap billions in profits, pay no taxes, and produce no value for the country. The new American Dream.
It is plain to see by anyone without an ideological agenda that a few thousand corrupt individuals have managed to gain control of the American economic system. The introduction of the personal income tax and creation of the Federal Reserve in 1913 have provided the means for the few to dominate the many. Over the last century, a rich super class has created their wealth through issuing debt to the masses, writing the tax code in their favor through their captive politician protectors, using their own private bank to issue trillions in fiat currency and create inflation, and used their control of the mass media to convince the average American that this was beneficial. Chris Whalen in his brilliant economic history of the United States – Inflated – How Money & Debt Built the American Dream sums up what has happened:
“Once the two functions, controlling the amount of currency in circulation, and second the government’s fiscal operations, are housed under the same roof, inflation and a decrease in the value of money are the inevitable result. It is always easier to borrow than to raise taxes. Politicians who have access to the printing press will invariably use it.”
The small cabal of banking elite committed the crime of the century between 2001 and 2008. They used their power over the Federal Reserve and political class to reap hundreds of billions in ill-begotten profits and crashed the worldwide economic system in 2008. They then held the country hostage as they extorted trillions more in bailouts from the taxpayers. As a reward for their chutzpah, they have paid themselves billions in bonuses. While 44 million people try to make ends meet with food stamps, these criminals continue to pillage the countryside attempting to steal the remainder of middle class wealth. As the middle class sinks further into despair, anger is building. The political class has tried to pay off the poor with entitlement payments, but it is the middle class that will revolt when their hope for a better life is destroyed by the moneyed class. With debt in the system expanding at hyper-speed, the American Empire will not decline with a whimper but with a bang. All previous Fourth Turning’s in U.S. history have resulted in tremendous bloodshed. The next ten years will follow this pattern. I’ll address the coming revolution against the criminal banking element in the last part of this five part series – Unforgiven.
Surly1 – I take the position that we are all visitors to Admin’s house. He puts alot of work into the site, and even allows us to motherfuck him without banning us. I think it is common decency that we, whether we agree with him on an issue or not, show some respect. RE doesn’t understand the term and doesn’t believe in common decency – a perfect example is how he feels he is “contributing” to the site by posting, and so rejects the need to click any ads in support of offfsetting costs of running it. I have no problem with RE posting, but he is wont to hijack threads in pursuit of his own personal agenda. He cannot control his “look at me look at me tendencies”, as is evidence by his vote me on/off the island posts, his 800 word posts about how smart he is, his descriptions of what a burden it is to have been left enormous wealth as inheritance, etc. etc. When he avoids that stuff he makes a reasonable contribution, but too often he simply cannot help himself. And common courtesy, in my opinion, demands he does not commandeer a thread like this from the opening words given the Admin’s efforts. I think this is an issue that we TBPers need to help address. Some agreed with me, some not. Same as always.
English Rose – you ignorant slut.
ConfederateH – are you a cousin of DP’s?
llpoh
When we have common decency on this site, it will be time to hang it up. But the Administrator wouldn’t be unhappy if a few more people checked out those awesome ads.
“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis. Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”
Mark Mobius, Bloomberg
Keep it up Jim! I have been a fan of your writing for quite some time now, this series is an all time classic, can’t wait for “Unforgiven”.
If you need a title for an epilogue to your brilliant work might I suggest “Hang Em High”
EE
@llpoh
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RE
Lets talk power to power.
Congress shall pass no bills of attainder or ex post facto laws.
The 14th Amendment is a Bill of Attainder and was passed Ex Post Facto.
No Attainder of Treason shall work forfiture except for the lifetime of the person so attained, nor shall am Attainder of Treason work Corruption of Blood.
The value od the Slaves is Constitutionally bound to be returned to the Southern people. Also, the Attainder known as the 14th Amendment cannot be applied to living Americans. We are not attained by the Amendment. It does not apply to us!!!
I see there’s talk of how a revolution, or uprising, can happen. I see people are yearning for part 5, even part 6.
Well, let me oblige!
Part 6 – Sudden Impact
==================
The fiscal, economic and social stress becomes unbearable. Yet things get more confusing, more contradictory, more urgent. Things are simply not getting resolved. Suddenly, like some kind of cruel 9/11, Vermont declares initiation ‘Federal tax free’ legislation. The residence of Vermont will no longer pay any tax to the federal government. All revenue will go to Vermont treasury, who will no longer bank with any Fed member bank. The Vermont State Bank will be created. Freed from the heavy federal burden, state experts are convinced unresolvable problems will finally get solved. This Sudden Impact shock the country, but Arizona hinted they are also looking into the same ‘re-balancing’ of taxation and fiscal responsibility. Declaring the state must solve state problems first, Arizona politicians declare it must take full charge of its massive unemployment problem by redirecting tax revenue. And by controlling business, trade, border security and immigration agenda.
When Congress scolded the states daring to secede federal control, Vermont and Arizona threatens to recall their US Senators.
And so, begins in earnest the Fourth Turning, where states take charge of a real paradigm shift to solve unbearable problems. And thus is born the Confederated Independent States of America.
Outlaw Josey Wales is on Financial Sense. They know great .
excellent essay, admin. again.
ain’t gonna be no revolution anytime soon. as DJ so eloquently phrased it, not even a blowtorch to the balls will get most americans off their fat ignorant asses to change the fucking channel if the remote batteries died, much less revolt.
and so many with the anger and spirit to do something don’t even know who the enemy is. they think it is the other political party. or mexican immigrants. they will actually get off their ass and shoot someone. the wrong fucking people.
let me say something about the FSA. and this does tie into the income tax. the FSA was created by the elite. they did not spring forth spontaneously, demanding FS or else.
the power elite (and i do not want to fucking hear how it was only one political party, because the other political party grew it even more, despite the rhetoric to shrink it. ‘ownership society’. ‘medicare part d’.) the entirety of the political/banking/power elite installed, nurtured and nourished the FSA.
when the time come, they will turn segments of the FSA upon one another. they will allow the natural animosity of the great noble middle class to be turned against the FSA, instead of against Wall Street, K Street and Capitol Hill. they will even destroy segments of the FSA, to the amusement and delight of other segments.
somewhere recently i read a predictive scenario, of how the snap card allowance gets cut, or some other program is sliced, and the brown and black urban FSA soldiers take to the streets and commit violence.
and TPTB respond with overwhelming force. and the majority of america cheers.the puppets who ‘make the decision’ to restore order become incredibly popular (especially if it is a black ‘decider in chief’). the army moves in and establishes the peace.
and they don’t leave. they deploy ‘preemptively’ in middle america. in suburbia. and by army, i include the militarized local and state police, with large caliber automatic weapons, body armor, assault vehicles. they’ll even be able to provide some jobs as necessity enlarges their ranks.
this scenario sounds real damn plausible to my ears. the principles behind such a scenario are practically baked into the cake. uprising and revolt, is not.
america is too fat, ignorant, lazy, narrow minded, locked into familiar emotional hatreds that long ago substituted for critical political thought, too set in its ways of not using the meager brainpower not distracted by dwts, idol, the nfl on fox and twitter/text/fb.
while i agree the folks in charge are panicking, they really shouldn’t be so worried. they picked the right country to fuck up the ass and collapse it’s economy. cause their getaway will be quick, clean and with all the loot they stole.
well, that is one way to look at it. the fun part; no one knows wtf is gonna happen, or how, or when. but it ain’t staying the same; that’s for damn sure.
Bounty hunter to Josey — “A man’s gotta make a living.”
Josey Wales, says “Dying aint no way to make a living boy.”
Truer words were never spoken!
Howie, please read Richard Duncan one more time. The rich cannot “leave with the money”. The actual capital base has been CONSUMED. Its all about per capita energy, and there is nowhere on earth to run with the “money”. Wealth is not contained in Fiat or in Gold, wealth is contained in Commerce and in Energy. the system will level.
RE
———————
THE PEAK OF WORLD OIL PRODUCTION
AND THE ROAD TO THE OLDUVAI GORGE
Richard C. Duncan, Ph.D.
Pardee Keynote Symposia
Geological Society of America
Summit 2000
Reno, Nevada
November 13, 2000
Collapse, if and when it comes again, will this time be global. No longer can any individual nation collapse. World civilization will disintegrate as a whole. Competitors who evolve as peers collapse in like manner.
Joseph A. Tainter, 1988
INTRODUCTION
The Olduvai theory is a data-based schema that states that the life expectancy of Industrial Civilization is less than or equal 100 years. We shall develop the theory from its early roots in Greek philosophy down to respected scientists in the 20th century. This approach is useful because, although the theory is easy to understand, it is difficult (i.e. distressing) for most people to accept — just as it was for me.
The Olduvai theory deals neither with the geology or the paleontology of the Olduvai Gorge. Nor is it prescriptive. Rather, the theory simply attempts to explain the historic world energy production (and use) and population data in terms of overshoot and collapse. I chose the name “Olduvai” because (1) it is justly famous, (2) I’ve been there, (3) its long hollow sound is eerie and ominous, and (4) it is a good metaphor for the ‘Stone Age way of life’. In fact, the Olduvai way of life was (and still is) a sustainable way of life — local, tribal, and solar — and, for better or worse, our ancestors practiced it for millions of years.
No doubt that the peak and decline of Industrial Civilization, should it occur, will be due to a complex matrix of causes, such as overpopulation, the depletion of nonrenewable resources, environmental damage, pollution, soil erosion, global warming, newly emerging viruses, and resource wars. That said, the Olduvai theory uses a single metric only, as defined by “White’s Law.” But now it comes with a new twist — (((a will-o’-the-wisp))) — electricity.
Most of my industrial experience is in electric power networks and the energy management systems (EMS) that control them. Electricity is not a primary energy source, but rather an “energy carrier”: zero mass, travels near the speed of light, and, for all practical purposes, it can’t be stored. Moreover, electric power systems are costly, complex, voracious of fuel, polluting, and require 24h-7d-52w maintenance and operations. Another problem is that electricity is taken for granted. Just flip the switch and things happen. In short: Electricity is the quintessence of the ‘modern way of life’, but the electric power systems themselves are demanding, dangerous, and delicate. All this suggests that permanent blackouts will be strongly correlated with the collapse of Industrial Civilization — the so-named “Olduvai cliff,” discussed later.
This paper is the backup for the accompanying slide show titled “The Olduvai Theory: An Illustrated Guide” (see Duncan, 2000c).
Definitions: ‘Oil’ (O) means crude oil and natural gas liquids. ‘Energy’ (E) means the primary sources of energy — specifically oil, gas, coal, and nuclear & hydropower. ‘Pop’ means world population. ‘ô’ means oil production per capita. ‘ê’ means energy production per capita. ‘G’ means billion (10^9). ‘b’ means barrels of oil. ‘boe’ means barrels of oil equivalent (energy content, not quality). ‘J’ means joule. ‘Industrial Civilization’ and ‘Electrical Civilization’, as we shall see, mean the same thing.
Industrial Civilization is shown as a pulse-shaped curve of world average energy-use per capita (ê). The ‘life expectancy’ (i.e. ‘duration’) of Industrial Civilization is defined as the time (in years) between the upside point when ê reaches 30% of its peak value and the corresponding downside point when ê falls to the same value (Figure 4). The new twist is that the Olduvai theory now focuses on the mounting problems with the high-voltage electric power networks — worldwide.
Civilization and Ready Kilowatt: Although the fossil fuels are still very important, electricity is the indispensable end-use energy for Industrial Civilization. To determine its importance, it is essential to distinguish between the primary energy consumed to generate electricity versus the primary energy consumed for all other (i.e. non-electric) end-uses, such as work and heat. Consider the following. We estimate that 42% of the world’s primary energy in 1999 was consumed to generate electricity. This compares to oil’s contribution to all non-electric end-uses of 39%; gas’ contribution of 18%; and coal’s contribution of a mere 1%. Moreover: When energy quality is accounted for, then the importance of electricity becomes very, VERY clear. For example, if you want to heat your room, then 1 joule (J) of coal is ‘equal’ to 1 J of electricity. However, if you want to power up your TV, then 1 J of electricity is ‘equal’ to 3 J of coal! So if you’re going to worry about energy, then don’t loose sleep over oil, gas, and coal. Worry about the electric switch on the wall!
2. ENERGY AND CIVILIZATION
Other factors remaining constant, culture evolves as the amount of energy harnessed per capita per year is increased, or as the efficiency of the instrumental means of putting the energy to work is increased. … We may now sketch the history of cultural development from this standpoint.
Leslie White, 1949
“White’s Law”
Oil is liquid, power packed, and portable. It is the major primary source of energy for Industrial Civilization. (But not the major end-use source!) We have developed a new method of modeling and simulation and then used it to make a series of five forecasts of world oil production — one new forecast every year. Figure 1 shows the main results of our most recent forecast, i.e. Forecast #5. (Duncan, 2000b)
Figure 1. World, OPEC, and Non-OPEC Oil Production
Notes: (1) World oil production is forecast to peak in 2006. (2) The OPEC/non-OPEC crossover event occurs in 2008. (3) The OPEC nations’ rate of oil production from 1985 to 1999 increased by 9.33 times that of the non-OPEC nations.
Figure 1 shows the historic world oil production data from 1960 to 1999 and our forecasts from 2000 to 2040. Note that the overall growth rate of oil production slowed from 1960 to 1999 (curve 1). In detail: The average rate of growth from 1960 to 1973 was a whopping 6.65 %/year. Next, from 1973 to 1979 growth slowed to 1.49 %/year. Then, from 1979 to 1999, it slowed yet further to a glacial 0.75 %/year. Moving beyond the historic period, Forecast #5 predicts that world oil production will reach its all-time peak in 2006. Then from its peak in 2006 to year 2040 world oil production will fall by 58.8 % — an average decline of 2.45 %/year during these 34 years.
The OPEC/non-OPEC crossover event is predicted to occur in 2008 (Figure 1, curves 2 &3). This event will divide the world into two camps: one with surplus oil, the other with none. Forecast #5 presents the following scenario. (1) Beginning in 2008 the 11 OPEC nations will produce more than 50% of the world’s oil. (2) Thereafter OPEC will control nearly 100% of the world’s oil exports. (3) BP Amoco (2000) puts OPEC’s “proved reserves” at 77.6% of the world total. (4) OPEC production from 1985 to 1999 grew at a strong average rate of 3.46 %/year. In contrast, non-OPEC production grew at sluggish 0.37 %/year during this same 14-year period.
The oil forecasting models, the application program to run them, and a User’s Guide are all available free at http://www.halcyon.com/duncanrc/. (Duncan, 2000a)
The peak of world oil production (2006) and the OPEC/non-OPEC crossover event (2008) are important to the ‘Olduvai schema’, discussed later. But first let’s have a look at the ratio of world oil production and world population. Figure 2 shows the historic data.
Figure 2. World Average Oil Production per Capita: 1920-1999
Notes: (1) World average oil production per capita (ô) grew exponentially from 1920 to 1973. (2) Next, the average growth rate was near zero from 1973 to the all-time peak in 1979. (3) Then from its peak in 1979 to 1999, ô decreased strongly by an average of 1.20 %/year. (4) Typical response: “I didn’t know that!” (5) The little cartoons emphasize that oil is by far the major primary source of energy for transportation (i.e. about 95% of the oil produced in 1999 was used for transportation).
Figure 2 shows the world average oil production per capita from 1920 to 1999. The curve represents the ratio of world oil production (O) and world population (Pop): i.e. ô = O/(Pop) in barrels per capita per year (i.e. b/c/year). Note well that ô grew exponentially from 1920 to 1973. Next, growth was negligible from 1973 to the all-time peak in 1979. Finally, from its peak in 1979 to 1999, ô decreased at an average rate of 1.20 %/year (i.e. from 5.50 b/c in 1979 to 4.32 b/c in 1999). “You’ve gotta be kidding!”
The 1979 peak and decline of world oil production per capita are shown on page 11 of BP Amoco (2000), http://www.bp.com/centres/energy/ . Not to be missed.
Bottom Line: Although world oil production (O) from 1979 to 1999 increased at an average rate of 0.75 %/year (Figure 1), world population (Pop) grew even faster. Thus world oil production per capita (ô) declined at an average rate of 1.20 %/year during the 20 years from 1979 to 1999 (Figure 2).
The main goals in this study, as was mentioned, are to describe, discuss, and test the Olduvai theory of Industrial Civilization against historic data. Applying White’s Law, our metric (i.e. indicator) is the ratio of world total energy production (E) and world population (Pop): i.e. ê = E/(Pop). Figure 3 shows ê during the historic period.
Figure 3. World Energy Production per Capita: 1920-1999
Notes: (1) World average energy production per capita (ê) grew significantly from 1920 to its all-time peak in 1979. (2) Then from its peak in 1979 to 1999, ê declined at an average rate of 0.33 %/year. This downward trend is the “Olduvai slope”, discussed later. (3) The tiny cartoons emphasize that the delivery of electricity to end-users is the sin quo non of the ‘modern way of life’. Not hydrocarbons.
Observe the variability of ê in Figure 3. In detail: From 1920 to 1945 ê grew moderately at an average of 0.69 %/year. Then from 1945 to 1973 it grew at the torrid pace of 3.45 %/year. Next, from 1973 to the all-time peak in 1979, growth slowed to 0.64 %/year. But then suddenly — and for the first time in history — ê began a long-term decline extending from 1979 to 1999. This 20-year period is named the “Olduvai slope,” the first of the three downside intervals in the “Olduvai schema.”
Bottom Line: Although world energy production (E) from 1979 to 1999 increased at an average rate of 1.34 %/year, world population (Pop) grew even faster. Thus world energy production per capita (ê) declined at an average rate of 0.33 %/year during these same 20 years (Figure 3). See White’s Law, top of this section.
Acknowledgments: As far as I know, credit goes to Robert Romer (1985) for being first to publish the peak-period data for world energy production per capita (ê) from 1900 to 1983. He put the peak (correctly!) in 1979, followed by a sharp decline through 1983, the last year of his data. Credit is also due to John Gibbons, et al. (1989) for publishing a graph of ê from 1950 to 1985. Gibbons, et al. put the peak in 1973. But curiously, neither of the above studies made any mention whatever about the importance of the peak and decline of world energy production per capita.
The 1979 peak and decline of world energy production per capita (ê) is shown at http://www.bp.com/centres/energy/ . Have a look.
3. EVOLUTION OF AN IDEA
And what a glorious society we would have if men and women would regulate their affairs, as do the millions of cells in the developing embryo.
Hans Spemann, 1938
The seeds of the Olduvai Theory were planted long ago. For example, the Greek lyric poet Pindar (c. 522-438 BCE) wrote, “What course after nightfall? Has destiny written that we must run to the end?” (Eiseley, 1970)
Arabic scholar Ibn Khaldun (1332-1406) regarded “group solidarity” as the primary requisite for civilization. “Civilization needs the tribal values to survive, but these very same values are destroyed by civilization. Specifically, urban civilization destroys tribal values with the luxuries that weaken kinship and community ties and with the artificial wants for new types of cuisine, new fashions in clothing, larger homes, and other novelties of urban life.” (Weatherford, 1994)
Joseph Granvill in 1665 observed that, although energy-using machines made life easier, they also made it more dependent. “For example, if artificial demands are stimulated, than resources must be consumed at an ever-increasing pace.” (Eiseley, 1970)
But, as far as I know, it was the American adventurer and writer Washington Irving (1783-1859) who was first to realize that civilization could quickly collapse.
Nations are fast losing their nationality. The great and increasing intercourse, the exchange of fashions and uniformity of opinions by the diffusion of literature are fast destroying those peculiarities that formerly prevailed. We shall in time grow to be very much one people, unless a return to barbarism throws us again into chaos. (Irving, 1822)
The first statement that I’ve found that Industrial Civilization is likely to collapse into a primitive mode came from the mathematical biologist Alfred Lotka.
The human species, considered in broad perspective, as a unit including its economic and industrial accessories, has swiftly and radically changed its character during the epoch in which our life has been laid. In this sense we are far removed from equilibrium — a fact that is of the highest practical significance, since it implies that a period of adjustment to equilibrium conditions lies before us, and he would be an extreme optimist who should expect that such adjustment can be reached without labor and travail. … While such sudden decline might, from a detached standpoint, appear as in accord with the eternal equities, since previous gains would in cold terms balance the losses, yet it would be felt as a superlative catastrophe. Our descendants, if such as this should be their fate, will see poor compensation for their ills and in fact that we did live in abundance and luxury. (Lotka, 1925)
Polymath Norbert Wiener (1894-1964) wrote in 1950 that the best we can hope for the role of progress is that “our attempts to progress in the face of overwhelming necessity may have the purging terror of Greek tragedy.”
[America’s] resources seemed inexhaustible [in 1500] … However, the existence of the new lands encouraged an attitude not unlike that of Alice’s Mad Tea party. When the tea and cakes were exhausted at one seat, the natural thing … was to move on and occupy the next seat. … As time passed, the tea table of the Americas had proved not to be inexhaustible … What many of us fail to realize is that the last four hundred years are a highly special period in the history of the world. … This is partly the result of increased communication, but also of an increased mastery of nature which, on a limited planet like the earth, may prove in the long run to be an increased slavery to nature. (Wiener, 1950)
Sir Charles Galton Darwin wrote in 1953:
The fifth revolution will come when we have spent the stores of coal and oil that have been accumulating in the earth during hundreds of millions of years. … It is to be hoped that before then other sources of energy will have been developed, … but without considering the detail [here] it is obvious that there will be a very great difference in ways of life. … Whether a convenient substitute for the present fuels is found or not, there can be no doubt that there will have to be a great change in ways of life. This change may justly be called a revolution, but it differs from all the preceding ones in that there is no likelihood of its leading to increases of population, but even perhaps to the reverse. (Darwin, 1953)
Sir Fred Hoyle in 1964 put it bluntly.
It has often been said that, if the human species fails to make a go of it here on the Earth, some other species will take over the running. In the sense of developing intelligence this is not correct. We have or soon will have, exhausted the necessary physical prerequisites so far as this planet is concerned. With coal gone, oil gone, high-grade metallic ores gone, no species however competent can make the long climb from primitive conditions to high-level technology. This is a one-shot affair. If we fail, this planetary system fails so far as intelligence is concerned. The same will be true of other planetary systems. On each of them there will be one chance, and one chance only. (Hoyle, 1964)
4. WORLD MODELS, ETC.
Perhaps the most widespread evil is the Western view of man and nature. Among us, it is widely believed that man is apart from nature, superior to it; indeed, evolution is a process to create man and seat him on the apex of the cosmic pinnacle. He views the earth as a treasury that he can plunder at will. And, indeed, the behavior of Western people, notably since the advent of the Industrial Revolution, gives incontrovertible evidence to support this assertion.
Ian McHarg, 1971
Jay Forrester of MIT in 1970 built a world model “to understand the options available to mankind as societies enter the transition from growth to equilibrium.”
What happens when growth approaches fixed limits and is forced to give way to some form of equilibrium? Are there choices before us that lead to alternative world futures? … Exponential growth does not continue forever. Growth of population and industrialization will stop. If man does not take conscious action to limit population and capital investment, the forces inherent in the natural and social system will rise high enough to limit growth. The question is only a matter of when and how growth will cease, not whether it will cease. (Forrester, 1971)
The basic behavior of Forrester’s world model was overshoot and collapse. It projected that the material standard of living (MSL) would peak in 1990 and then decline through the year 2100. Moreover, measured by the MSL (i.e. the leading and lagging 30% points), the life expectancy of Industrial Civilization was about 210 years. (Forrester, 1971, Figure 4-2). He used the world model to search for social (i.e. cultural, “conscious action”) policies for making the transition to sustainability.
In our social systems, there are no utopias. No sustainable modes of behavior are free of pressures and stresses. … But to develop the more promising modes will require restraint and dedication to a long-range future that man may not be capable of sustaining. Our greatest challenge now is how to handle the transition from growth into equilibrium. The industrial societies have behind them long traditions that have encouraged and rewarded growth. The folklore and the success stories praise growth and expansion. But that is not the path of the future. (ibid., 1971)
He found that sustainability could be achieved in the modeled world system when the following five social policies were applied together in 1970:
· Natural-resource-usage-rate reduced 75%
· Pollution generation reduced 50%
· Capital-investment generation reduced 40%
· Food production reduced 20%
· Birth rate reduced 30% (ibid., 1971)
Critics (mostly economists) argued that such policies were e.g. “blue sky” and “unrealistic”. Fortunately, the project team was just then completing a two-year study using the more comprehensive ‘World3’ model. They too searched for social policies that might achieve sustainability in the world system. However, the World3 ‘reference run’ (like Forrester’s in 1971) also projected overshoot and collapse of the world system.
This is the World3 reference run, …. Both population POP and industrial output per capita IOPC grow beyond sustainable levels and subsequently decline. The cause of their decline is traceable to the depletion of nonrenewable resources. (Meadows, et al, 1972, Figure 35)
The World3 ‘reference run’ (1972, above) projected that the industrial output per capita (IOPC) would reach its all-time peak in 2013 and then would steeply decline through 2100. Moreover, the duration of Industrial Civilization (as measured by the leading and lagging IOPC 30% points) came out to be about 105 years.
I first presented the Olduvai theory to the public in 1989.
· The broad sweep of human history can be divided into three phases.
· The first, or pre-industrial phase was a very long period of equilibrium when simple tools and weak machines limited economic growth.
· The second, or industrial phase was a very short period of non-equilibrium that ignited with explosive force when powerful new machines temporarily lifted all limits to growth.
· The third, or de-industrial phase lies immediately ahead during which time the industrial economies will decline toward a new period of equilibrium, limited by the exhaustion of nonrenewable resources and continuing deterioration of the natural environment. (Duncan, 1989)
In 1992, twenty years after the first World3 study, the team members re-calibrated the model with the latest data and used it to help “envision a sustainable future.” But —
All that World3 has told us so far is that the model system, and by implication the “real world” system, has a strong tendency to overshoot and collapse. In fact, in the thousands of model runs we have tried over the years, overshoot and collapse has been by far the most frequent outcome. (Meadows, et al., 1992)
The updated World3 ‘reference run’, in fact, gave almost exactly the same results as it did in the first study in 1972! For example: Industrial output per capita (IOPC) reached its all-time peak in 2014 (v. 2013 previously) and the duration of Industrial Civilization came out to be 102 years (v. 104 years previously).
Australian writer Reg Morrison likewise foresees that overshoot and collapse is where humanity is headed. In his scenario (i.e. no formal model), the world population rises to about 7.0 billion in the 2036. Thence it plunges to 3.2 billion in 2090 — an average loss of 71.4 million people per year (i.e. deaths minus births) during 54 years.
Given the current shape of the human population graph, those indicators also spell out a much larger and, from our point of view, more ominous message: the human plague cycle is right on track for a demographically normal climax and collapse. Not only have our genes managed to conceal from us that we are entirely typical mammals and therefore vulnerable to all of evolution’s customary checks and balances, but also they have contrived to lock us so securely into the plague cycle that they seem almost to have been crafted for that purpose. Gaia is running like a Swiss watch. (Morrison, 1999)
The foregoing discussions show that many respected professionals have reached conclusions that are consistent with the Olduvai theory, to which we now turn.
5. THE OLDUVAI THEORY: 1930-2030
The earth’s immune system, so to speak, has recognized the presence of the human species and is starting to kick in. The earth is attempting to rid itself of an infection by the human parasite.
Richard Preston, 1994
The Olduvai theory, to review, states that the life expectancy of Industrial Civilization is less than or equal to one hundred years, as measured by the world average energy production person per year: ê = E/(Pop). Industrial Civilization, defined herein, began in 1930 and is predicted to end on or before the year 2030. Our main goals for this section are threefold: (1) to discuss the Olduvai theory from 1930 to 2030, (2) to identify the important energy events during this time, and (3) to stress that Industrial Civilization = Electrical Civilization = the ‘modern way of life.’ Figure 4 depicts the Olduvai theory.
Figure 4. The Olduvai Theory: 1930-2030
Notes: (1) 1930 => Industrial Civilization began when (ê) reached 30% of its peak value. (2) 1979 => ê reached its peak value of 11.15 boe/c. (3) 1999 => The end of cheap oil. (4) 2000 => Start of the “Jerusalem Jihad”. (5) 2006 => Predicted peak of world oil production (Figure 1, this paper). (6) 2008 => The OPEC crossover event (Figure 1). (7) 2012 => Permanent blackouts occur worldwide. (8) 2030 => Industrial Civilization ends when ê falls to its 1930 value. (9) Observe that there are three intervals of decline in the Olduvai schema: slope, slide and cliff — each steeper than the previous. (10) The small cartoons stress that electricity is the essential end-use energy for Industrial Civilization.
Figure 4 shows the complete Olduvai curve from 1930 to 2030. Historic data appears from 1930 to 1999 and hypothetical values from 2000 to 2030. These 100 years are labeled “Industrial Civilization.” The curve and the events together constitute the “Olduvai schema.” Observe that the overall curve has a pulse-like waveform — namely overshoot and collapse. Eight key energy events define the Olduvai schema.
Eight Events: The 1st event in 1930 (see Note 1, Figure 4) marks the beginning of Industrial Civilization when ê reached 3.32 boe/c. This is the “leading 30% point”, a standard way to define the duration of a pulse. The 2nd event in 1979 (Note 2) marks the all-time peak of world energy production per capita when ê reached 11.15 boe/c. The 3rd event in 1999 (Note 3) marks the end of cheap oil. The 4th event on September 28, 2000 (Note 4) marks the eruption of violence in the Middle East — i.e. the “Jerusalem Jihad”. Moreover, the “JJ” marks the end of the Olduvai “slope” wherein ê declined at 0.33 %/year from 1979 to 1999.
Next in Figure 4 we come the future intervals in the Olduvai schema. The Olduvai “slide”, the first of the future intervals, begins in 2000 with the escalating warfare in the Middle East. The 5th event in 2006 (Note 5) marks the all-time peak of world oil production (Figure 1, this paper). The 6th event in 2008 (Note 6) marks the OPEC crossover event when the 11 OPEC nations produce 51% of the world’s oil and control nearly 100% of the world’s oil exports. The year 2011 marks the end of the Olduvai slide, wherein ê declines at 0.67 %/year from 2000 to 2011.
The “cliff” is the final interval in the Olduvai schema. It begins with the 7th event in 2012 (Note 7) when an epidemic of permanent blackouts spreads worldwide, i.e. first there are waves of brownouts and temporary blackouts, then finally the electric power networks themselves expire. The 8th event in 2030 (Note 8) marks the fall of world energy production (use) per capita to the 1930 level (Figure 4). This is the lagging 30% point when Industrial Civilization has become history. The average rate of decline of ê is 5.44 %/year from 2012 to 2030.
“The hand writes, then moves on.” Decreasing electric reliability is now.
The power shortages in California and elsewhere are the product of the nation’s long economic boom, the increasing use of energy-guzzling computer devices, population growth and a slowdown in new power-plant construction amid the deregulation of the utility market. As the shortages threaten to spread eastward over the next few years, more Americans may face a tradeoff they would rather not make in the long-running conflict between energy and the environment: whether to build more power plants or to contend with the economic headaches and inconveniences of inadequate power supplies. (Carlton, 2000)
The electricity business has also run out of almost all-existing generating capacity, whether this capacity is a coal-fired plant, a nuclear plant or a dam. The electricity business has already responded to this shortage. Orders for a massive number of natural gas-fired plants have already been placed. But these new gas plants require an unbelievable amount of natural gas. This immediate need for so much incremental supply is simply not there. (Simmons, 2000)
As we have emphasized, Industrial Civilization is beholden to electricity. Namely: In 1999, electricity supplied 42% (and counting) of the world’s end-use energy versus 39% for oil (the leading fossil fuel). Yet the small difference of 3% obscures the real magnitude of the problem because it omits the quality of the different forms of end-use energy. With apologies to George Orwell and the 2nd Law of Thermodynamics — “All joules (J) of energy are equal. But some joules are more equal than others.” Thus, if you just want to heat your coffee, then 1 J of oil energy works just as well as 1 J of electrical energy. However, if you want to power up your computer, then 1 J of electricity is worth 3 J of oil. Therefore, the ratio of the importance of electricity versus oil to Industrial Civilization is not 42:39, but more like 99:1. Similar ratios apply to electricity versus gas and electricity versus coal.
Au Courant King Kilowatt!
Question: Where will the Olduvai die-off occur? Response: Everywhere. But large cities, of course, will be the most dangerous places to reside when the electric grids die. There you have millions of people densely packed in high-rise buildings, surrounded by acres-and-acres of blacktop and concrete: no electricity, no work, and no food. Thus the urban areas will rapidly depopulate when the electric grids die. In fact we have already mapped out the danger zones. (e.g. See Living Earth, 1996.) Specifically: The big cities stand out brightly as yellow-orange dots on NASA’s satellite mosaics (i.e. pictures) of the earth at night. These planetary lights blare out “Beware”, “Warning”, and “Danger”. The likes of Los Angeles and New York, London and Paris, Bombay and Hong Kong are all unsustainable hot spots.
6. SUMMARY AND CONCLUSIONS
The theory of civilization is traced from Greek philosophy in about 500 BCE to a host of respected scientists in the 20th century. For example: The ‘reference runs’ of two world simulation models in the 1970s put the life expectancy of civilization between about 100 and 200 years. The Olduvai theory is specifically defined as the ratio of world energy production and world population. It states that the life expectancy of Industrial Civilization is less than or equal to 100 years: from 1930 to 2030. The theory is tested against historic data from 1920 to 1999.
Although all primary sources of energy are important, the Olduvai theory postulates that electricity is the quintessence of Industrial Civilization. World energy production per capita increased strongly from 1945 to its all-time peak in 1979. Then from 1979 to 1999 — for the first time in history — it decreased from 1979 to 1999 at a rate of 0.33 %/year (the Olduvai ‘slope’, Figure 4). Next from 2000 to 2011, according to the Olduvai schema, world energy production per capita will decrease by about 0.70 %/year (the ‘slide’). Then around year 2012 there will be a rash of permanent electrical blackouts — worldwide. These blackouts, along with other factors, will cause energy production per capita by 2030 to fall to 3.32 b/year, the same value it had in 1930. The rate of decline from 2012 to 2030 is 5.44 %/year (the Olduvai ‘cliff’). Thus, by definition, the duration of Industrial Civilization is less than or equal to 100 years.
The Olduvai ‘slide’ from 2001 to 2011 (Figure 4) may resemble the “Great Depression” of 1929 to 1939: unemployment, breadlines, and homelessness. As for the Olduvai ‘cliff’ from 2012 to 2030 — I know of no precedent in human history.
Governments have lost respect. World organizations are ineffective. Neo-tribalism is rampant. The population is over six billion and counting. Global warming and emerging viruses are headlines. The reliability of electric power networks is falling. And the instant the power goes out, you are back in the Dark Age.
In 1979 I concluded, “If God made the earth for human habitation, then He made it for the Stone Age mode of habitation.” The Olduvai theory is thinkable.
Apollo being from the South I love anything with the word Confederate in it. You yankee’s can be part of the “New South” but in order to be a Southerner you’ll have to eat a bowl of grits first !
RE
Jesus, that’s a long post.
Re Olduvai–
“The earth’s immune system, so to speak, has recognized the presence of the human species and is starting to kick in. The earth is attempting to rid itself of an infection by the human parasite.” I have often wondered if human activities might not provoke a response from the earth itself. I am amazed that others have thought this and actually written about it.
Currently reading “The Last days of Ancient Sunlight” by Thom Hartmann in which he outlines differences between younger “dominator” cultures v. older tribal cultures that lived in harmony with the earth and consumed “current” sunlight v. stored sunlight (coal, oil, etc.) Many echoes of that in your post.
Am wondering if the plague vector referred to above (but not really explained) might not correspond with the 4T event so much anticipated by the Admin and others? No doubt that when the grids go dark and Ready Kilowatt doesn’t come smiling, all bets are off. Which brings us back to do, or, uh, doom. Doom now, full doom, or doom lite? And when?
Admin: Your writing and metaphors are terrirific. I too wonder why the initial focus on the source of the crisis being the creation of the Fed and the 16th Amend., and placing your conclusion there, but with the middle part of the article really arguing that the rich are getting off too easy (which is very true) and it was better in America when those top tax rates were higher. Seems to be we should be arguing about how to throw financial criminals in jail, not about how to bring back the glory days of their higher taxation. It very well could be that we need to consider various ways to make the tax code more equitable (flat tax on a couple of levels, eliminating loopholes) if only in transition to doing away with it and turning to other means of funding the government, while we at a more basic “source of our problems” level, eliminate the Fed and take control of our money supply.
Was the glory of the American Empire 1941 (I include WWII) to 1971 or was it the period you also refer to before the income tax and Fed – 1789 to 1913?
@Surly
Last time I only dropped on the abstract and a link. People are more likely to read the stuff if you actually paste it in though.
As to when? According to Duncan, the blackouts should begin around 2012. However, he doesn’t say where it will begin first. We look to be completely in the dark by about 2030.
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RE
shit, RE. that is longer than one of your missives. sure, i’ll get right on it!
(actually i will when i have a free minute or 60. over the weekend maybe.)
but the first sentence of the introduction reads:
“The Olduvai theory is a data-based schema that states that the life expectancy of Industrial Civilization is less than or equal 100 years.”
um, by any reasonable definition of ‘industrial civilization’, it has lasted somewhat longer than 100 years.
i get your point, that no one gets out of this alive, including the elite at the top. i can’t disagree, but the timeframe is unknown. over ten, twenty, thirty more years, perhaps the rich and powerful can escape. or, if you are right, it collapses much further much faster. i sure don’t know, and i respect you have studied and thought about this much more than i have; your opinion is much more informed than mine would be if i had one. which i really don’t. (i have a bias, since recent events have played out much more slowly than i expected, but i’m just waiting to see, prepared with an open mind.)
what’s with you and llpoh getting along all buddy-buddy? and smokey still lives on the internets? i gotta check in here more often.
Yesterday was 2nd highest visitor count day in TBP history. We had over 16,000 visitors yesterday versus our daily average of 6,300.
Well said. Great analogy. place of refuge 2012 dot com
Howard: I had to read a book for a Cal History class, with a raving black-booted Marxist professor called “Racial Fault Lines” by Eric Almager. It was basic communist garbage, but was insightfulll in observing how the Union Populists, insead of going for the “Riich White Capitalist” owners, they instead turned theirangst against the Chinese, Mexicans and of course Japanese.
If you take the racial element out, your 10:58 on 5/31 post reflects a recurring phenomenon… that more often than not, the Middle Class is played against the poor and each other and any demand for change is stifled should it be correctly directed…
Violence would undoubtedly be carried out against innocents should this revolution nonsense boil, and the result would be a thunderous roar of boots in response, all to the cheers of middle folk everywhere while business as usual carries on at the top.
Preview of Unforgiven
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Not a moment too soon.
Colma–
“Violence would undoubtedly be carried out against innocents should this revolution nonsense boil, and the result would be a thunderous roar of boots in response, all to the cheers of middle folk everywhere while business as usual carries on at the top.”
I take a different path to reach the same conclusion, but you are spot on. Not for nothing have elites used “divide and conquer” as a strategem. Now with a complete monopoly on deadly force, control of the communications infrastructure and the mass media, you can see the pieces being moved into place, and the almost deliberate provocation of the working and middle classes, it’s as if they are waiting for an “August 1914” event to put boots on the ground.
And then all bets are off. Meanwhile, as RE would say, “get out of the big shitties” and gather your potatoes.
“what’s with you and llpoh getting along all buddy-buddy?”-Howie
Occassionall we make it through 2 or 3 posts where LLPOH will demonstrate some lucidity before he begins foaming at the mouth again.. Never lasts long. Its like anyone who has had a long term Syphillis infection, they will have brief moments of sanity but most of the time they are stark raving mad.
RE
Not for nothing…but I don’t consider someone making $1 million rich anymore. That is a middle class income nowadays. If you need to go into debt to make it through life – you are not middleclass. And if your luck you be able to save some money to retire like a city fireman.
who in the hell wasted the time to write this mush-minded BS! Some interesting points, but the logic level of the writer is about that of 14 yr old and shadows any good points made.
keno
I guess they didn’t teach you how to capitalize in the school for the mentally retarded.
Keno: Funny you should mention logic. WhenI saw your skank needling my condoms before I hollowed her out, she was devastated when I ripped it off and sprayed her with throat yogurt. As I dismissively tossed her a rag to clean up, she was saying “why? Isn’t that what condoms are for?”
To which I replied “Get me a beer and pizza. I don’t wish to discuss logic”. Then, after a second’s thought I kindly asked her to leave. Don’t say I don’t do favors for random assholes.
Another socialist! Blaming everything on the republicans. Why not the entitlement programs, socialized medicin, allowing illegal aliens every benefit and the liberal stimulus? Why not the federal benefit programs and the printing of money? QE 3 and 4 are on the way. I know…..it’s George’s fault! America deserves what’s coming. I’m ready!
The main reason for progressive taxation is that it is the only means by which the very wealthy, who otherwise can buy anything they like, can by a government. Its how an oligarchy is created out of a republic or a democracy. In the USA today, 1% of the population pays 50% of the income tax; 10% pays over 70% of th eincome tax. That 1-10% of the country us the ruling oligarchy.
Instead of bitching. Get the masses to pull their funds from the big banks. no business no bonus.
Then start a campaign where people become embarassed to buy chinese crap, and only buy made in America goods. This will take down the stock market and the funds. They have tried to tell you protectionism is bad. It’s bad for the rich. That’s all. Local shopping would create business, and strong communities and less reliance on oil
Cheers
http://talk.newagtalk.com/forums/thread-view.asp?tid=237592&mid=1803037#M1803037
JQ makes the farmer chat room.
efarmer
I’d rather be in the farmer chat room than on Seeking Alpha. It’s the real people doing the real work in the country that are getting screwed. The Wall Street douchebags wouldn’t stand a chance in a confrontation with the real people.
Admin, this is a fantastic read. Really.
“Congress frequently holds hearings on tax simplification so members can denounce the tax code’s complexity. Congressional experts and impartial think tanks provide useful simplification ideas. When the TV cameras are turned off, Congress swiftly ignores them and votes for more special interest breaks for their biggest contributors”
Remember the joke… How do you know if a politician is lying? His lips are moving. Its been told for how long, and still we fall for it every time?
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Why?
The Federal Reserve is a private bank. No more ‘federal’ than FedEx!
The members of the Federal Reserve:
http://deanhenderson.wordpress.com/2011/06/01/the-federal-reserve-cartel-part-i-the-eight-families/
Jefferson knew a thing or two.
“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.”- Thomas Jefferson
And folks think their vote actually counts? Ha! It’s a well planned “illusion of choice”.
It’s time to unite and take back our beloved Country my friends. Are there any Patriots left?
Take it back?!?!
What a novel idea, sir. But, for the sake of clarity, how are you envisioning this action? Is the proletariat going to grab pitchforks & torches and rally against the state? …Not likely. Are we, as a people, going to elect some sort of saint to the highest elected office who will be able to reverse decades worth of jackassery? …Doubtful..at best..
What’s a ‘patriot’ to do, Baron? What sort of wet dream shall I knock around my head? Palin 2012? Do tell.
Irrationalizer:
Sounds like Ron Paul 2012.
Duh.
RE – I am always lucid. I just sometimes forget that you are satan’s spawn. Good v evil – as it ever was.
Hey – you 15950 people that visited yesterday and didn’t post anything – you are all yellow pussies.
Put something up here. We will be gentle – at least at first. Simply finding the site means you are probably smart enough to hand tough around here.
So grow a set and get started.
“The few who can understand the system will be either so interested in its profits, or so dependent on its favours, that there will be no opposition from that class, while, on the other hand, that great body of people, mentally incapable of comprehending the tremendous advantage that Capital derives from the system, will bear its burden without complaint and, perhaps, without even suspecting that the system is inimical to their interests.” -Rothschild Bros of London communique to their New York agents introducing their banking method into America
llpoh,
Prolly the reason the farmers didn’t comment is the ag chat room won’t allow swearing including *%&#$)* and they might have been a little taken aback.
We lead a more simple life out here 🙂
EF
Hey, LLPOH, I`m still here. Silverites will have their fingers burned by farmers.
Jim, you wrote above ” I’ve previously detailed how the baby boom generation contributed to our fiscal plight in Part One – For a Few Dollars More,. . . ”
And above that you wrote ” The rich and powerful, the corrupt Wall Street bankers, the banker controlled Federal Reserve and the bought off politicians in Washington D.C. have been pillaging the middle class for decades.”
And, ”
The median household income has risen by 281% since 1981, less than inflation over the same time frame. The median household is taking home less than they did in 1981 on an inflation adjusted basis”
Well, who do you think has made up the majority of the getting screwed middle class during the last thirty years? It was the much maligned (in your part one) “baby boomers”.
I like your idea of using the Clint Eastwood classics as a scenario for your collating of information from various sources. It is helpful to put things together for folks.
However I was ready to hang it up ( high?) with you after your Part One junior high level tirades about the baby boomers ( as if ANY of us decide when we were going to be born or where). Especially because in your comments section of part one you trash mouthed anyone who tried to bring up anything amounting to reason which stood against your intellectually dishonest blanket condemnation of a generation; a generation which was subjected in grade school to practicing hiding under their desks in the event of an imminent nuclear war, having the best bright hope of their national future ( John Kennedy) murdered before their eyes, then Martin Luther King, then Bobby Kennedy, and having to be subjected to the power of their parents’ generation under the military draft or conscription to become cannon fodder in an undeclared war while not even being allowed to legally take a drink or vote!. ( Then we began to learn the hypocrisy of many who taught us the words “land of the free and home of the brave”) etc. etc. etc. Then having to risk prison to resist the draft, or because of protesting until the US had to pull out of ‘that dirty little war’. Yeah we were screwed up in a lot of ways, and there were/are predatory segments of our generation ( just as in all generations) that joined with the predators of the previous generation in the back rooms of Wall Street and Washington, and corporate offices elsewhere. But the majority have been the most responsible generation in the history of the USA,, ( largely because they wanted to know and make sense of the insanity that they were brought up into and were the best educated mass generation in the history of the world to that time). They/we have been sponsoring monumental changes in human rights, environmental responsiblity and social justice, beneficial science and technology, and just taking responsibility for our kids and our parents, that you have completely taken for granted,.
And all the while that responsible working majority of baby boomers have been financially preyed upon as the working middle class, and struggled to deal with it, as you have described. Do not forget that it was the baby boomer generation that first was made subject to the vast devaluation of their savings through inflation, and they were the first where many families had to have both parents working in order to make ends meet because of the flat lining of real income as price inflation kept on increasing to feed the debt sponsoring parasites in Washington and New York.
Sure quite a few have been co-opted, and others have been foolish. Stll, I think you have some back tracking to do.
If you think that the working ( or now non-working) middle class is going to rise up eventually, you should know it is going to be the boomer generation that to a large extent you are talking about, they and the children that they raised and cared for and educated as to personal responsiblity and respect and justice. And you might acknowledge also that almost all of the understanding and information that you possess and publish came via the digging that many in the boomer generation have done before you came along, in their search for truth and serious questioning of authority, following on the few before them who also refused to think in only in terms of ” America, love it or leave it” or “America, right or wrong”.
@F.C.
Hey you can cool it, from a Boomer. Admin has been dumping on the Boomer generation for quite a while. I don’t get offended. Deep inside, Admin admires the Boomer generation, albeit we certainly have the usual bad apples. See, that’s what Gen X does – they admire the previous generation who have created so much, give the Gen X/Y so much, totally changed the world in every aspect. It is impossible for Gen X to do half as greatly. That’s why they dump on the Boomers.
Wait for the Gen Y finally figuring out they’d be lucky to to accomplish 1/10th as the Boomer generation. Then they will dump on the Boomers ten times as hard. :))
Apollo
We’ll really appreciate Baby Boomers in 2030 when they are all dead.
Admin’s main problem is his Inferiority Complex with respect to Boomers, along with Jealousy.
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RE
Well written article. I really enjoyed. One point of consideration, though, is that had the stimulus not been as large, we would likely be in a depression at least as severe as what we experienced in the 30’s. Now, don’t get me wrong. i didn’t agree with the stimulus, or the transfer of wealth from the middle class to the rich, or the backwardsass response to the crisis that rewarded those who caused it. I would much prefer an old fashioned cleanse in which those who have been frugal and saved and managed their finances would be ok, and those that took on excessive risk would be in pain, but I do believe we will see a depression in the next few years that somehow will take most Americans by suprise.
Not gonna be pretty.
Oh, and I have seen The Outlaw josey Wales at least 100 times. Great metaphors and symbolism!! Really enjoyed the epic lines, too.
Eugen66 – I keep a lookout for your posts. Time differences make it hard to respond at times. Keep em coming.
Most people reading this article already know what’s going on. The article provides no way out of our predicament. Remember, the Fed Gov and its assorted police add ons have all the weapons. Nerve gas, anthrax, riot guns, tanks, planes, drones, armored cars. If you fight the Fed Gov, you lose. All this talk about revolution is asking for us to commit suicide. The only way any of the PTBs will suffer nooses or guillotines if their bodyguard’s checks start bouncing and they turn on them.
If it’s not too late to save us, it must come peacefully. The best way is to repeal legal tender laws and allow people to use whatever they want as money. If Federal Reserve Notes have value, then people will continue to use them. If they lose their value, people will use something else. At the beginning, most people will still use FRNs. Only the well informed will use gold, silver, or some other means of commerce. Only when FRNs lose their value will the rest of Boobus Americanus abandone them. This will put a brake on the money printing of the Fed Reserve, because if they continue to print money, it will be worthless and no one will use them. I admit it is a small chance. It is much more likely that the collapse will come before we get to use anything other than FRNs as money.
This excerpt from an AP article confuses me.
“The government has hit its current borrowing limit of $14.3 billion. Treasury Secretary Timothy Geithner is removing investments from two government employee pension funds to clear room to continue with regular debt auctions. However, he has warned that by around Aug. 2 he will have exhausted the bookkeeping maneuvers he can make.”
Can someone tell me how and why the treasury is still selling bonds? Are old treasury bonds being cashed in, or retired, or whatever the term is, leaving room under the debt ceiling to issue more? I thought the treasury was spending pension funds in place of the money it would get from debt auctions, but that does not seem to be the case.
How does pulling cash out of retirement funds allow for more debt to be issued?
Jews are the enemy. Those who do not name the enemy by name are complicit in their crimes.
This article seems to imply Republicans are at fault. However, I have seen other graphs and charts that clearly indicate that the percentage of money from the rich doesn’t vary much regardless of the tax rate. This clearly makes sense to me because Congress makes the laws and Congressmen are either rich or want to be rich. Therefore they leave loopholes for themselves. A pure flat tax, and repleal of the progressive income tax, is the only way to reform this process. This must be closely followed by a gradual elimination of the FED. Finally, a limitation on both income that the Federal Government can steal, errr take, from us along with a balanced budget are necessary. Then return the election of the senators to the State Legislators; term limits, and require elimination of 3 pages of regulation for every one new page, would go a long way to restoring America to greatness and allow the middle class to once again blossom.
Diein’ ain’t much of a livin’, boy. Go ahead, try and make my day.
If what the admin is writing is bothering you, there is ONE MAN in Washington trying to put an end to it all.
There is no.doubt.that we are heading towards the largest financial crisis the worlds ever seen.
Dr. Ron Paul is having a money bomb today.
Go to ronpaul2012.com and donate.
Save the Republic!
The individual states are the only ones that can curb the incresing excesses of the federal government. A Constitutional convention will need to be called.
The real problem is Mystery Babylon and witchcraft. Until we realize who the real enemy is we won’t even know who to fight. It is way too far gone to ever beat it. The Illuminati and the witches own everything. All we can do now is prepare and give our hearts to God. And that’s the God of the King James Bible, the Creator and merciful God who gave us His only begotten son Yeshua Ha Mashiach (Jesus The Messiah) so He can live in us and we can live in Him through FAITH AND OBEDIENCE.
Regarding the economy, we were doomed when we abandoned Physiocracy, The Real Bills Doctrine, Say’s Law of Markets and the proceeds of the Marginalist Revolution, namely the Austrian School. Ron Paul may be our best choice but he is one of them and please don’t be fooled. The Hegelian Dialectic is where they own both sides; or all sides in this case.
Put professor Antal Fekete (professorfekete.com) in charge and we might have some hope for saving us from the coming worldwide banking and currencies crisis that is going to bring in the new world order and the one world government and probably the microchip in a cashless society. Look for the 666 and don’t take it or there is no way out