A couple of items in the news today caught my attention as I was thinking about the so-called “recovery” that everybody from Washington, DC to Wall Street seem to assume is ramping up and going strong. For obvious reasons I remain dubious. I still have a lot of friends and associates who are either jobless or nearly so. It’s also clear that in our new globalized world there are plenty of things that can tip the economics of the globe off kilter and cause trouble. The truth is, even if we are in a recovery, we have most certainly not recovered. I think that the most optimistic estimate is that we might–might–be back where we were in terms of employment circa 2007 no sooner than 2013, in my opinion.
Of course, as I said, there are lots of thing that could mess this up. Let’s say that the revolution in Egypt had somehow closed the Suez Canal, through whence about one third of the world’s oil flows. Or some upheaval in Iran does likewise for the Persian Gulf, or some other unforeseen disruption takes place. The recession could stretch on, and perhaps do so much damage that recovery becomes that much harder.
So now we come to the two items in the news. The first was an article in the New York Times about the steep rise in prices that will probably trickle down to the rest of us later this year:
Cotton prices are near their highest level in more than a decade, after adjusting for inflation, and leather and polyester costs are jumping as well. Copper recently hit its highest level in about 40 years, and iron ore, used for steel, is fetching extremely high prices. Prices for corn, sugar, wheat, beef, pork and coffee are soaring. Labor overseas is becoming more expensive, meanwhile, and so are the utility bills to keep a factory running.
So far manufacturers have absorbed these costs, and the experts claim that inflation has stayed low. But without going into detail, the official inflation numbers have been gamed and tweaked so much as to be essentially worthless as a reflection of what real people are paying for things (that’s another post). A few are even looking at the rising costs as evidence that the economy is improving. But what I suspect is that the margin of safety between income and expenses is narrowing and may continue to do so. The thing I find curious is that prices seem to be rising across the board. I’m not sure what it means, but I’m pretty sure it makes me uncomfortable.
The other article was about a report issues by those tree-hugging Pinkos over at Shell Oil that concluded that Peak Oil is either imminent or already here:
In a recent “Signals & Signposts” report by Shell, forecasting energy scenarios through 2050, the oil giant predicted a growing volatility in the price of oil and a coming period of “extraordinary opportunity or misery.”
As the demand for oil buts [sic] up against actual production and remaining reserves, the climbing price of oil will cause the gross domestic product of all nations to decline, they predict.
In another section, Shell calls these economic effects “Depression 2.0.” Though that scenario is introduced as “unlikely,” the rest of the report does not paint a rosy outlook.
Man, talk about a buzzkill. If you take just a few moments and think about just how deeply our lives are entwined with that black goo that sits in the ground, not just for transportation but for plastics, generating electricity and God knows what else, if that becomes more expensive, everything becomes more expensive. Now I think we can get through the Peak Oil crisis; we have the smarts to figure out solutions. The difficulty will be political. We will have to dismantle or somehow co-opt a very strong political power base that was constructed to serve this particular technology, and the people who have that power won’t want to let go of it. But the effects of Peak Oil could definitely Kybosh any nascent economic recovery.
Add to that some utterly insane bills working their way through Congress and many state legislatures that seem crafted especially to do the most damage to those who can least absorb it… well, that’s another rant. Actually, probably several.
So what are the takeaways here? Simply put, it may not be wise to just stall and hope the economy recovers. We are all going to have to become more versatile as communities and as individuals. As a matter of biological history, the greatest cause of extinction is over-specialization. Getting through this recovery, such as it is, will belong to the agile, to the Jacks-of-All-Trades, to the Generalists.
Keep learning. Keep organizing. Stay creative.
