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Yes, But at What Cost?
Yes, But at What Cost?
This is how our entire status quo maintains the illusion of normalcy: by avoiding a full accounting of the costs.
The economy’s going great–but at what cost? “Normalcy” has been restored, but at what cost? Profits are soaring, but at what cost? Our pain is being reduced–but at what cost?
The status quo delights in celebrating gains, but the costs required to generate those gains are ignored for one simple reason: the costs exceed the gains by a wide margin. As long as the costs can be hidden, diluted, minimized and rationalized, then phantom gains can be presented as real.
Exhibit One: the US public debt. If you borrow and blow enough money, it’s not too difficult to generate a bit of “growth”–but at what cost?
Exhibit Two: opioid deaths. One of the few metrics that’s climbing as fast as the national debt is the death rate from prescription and synthetic opioids:
Exhibit Three: student loan debt. Here’s a chart of debt that is federally originated but paid by individual students: the infamous student loan debt that has shot up over $1 trillion in a few years.
You see the point: the cost are skyrocketing but the gains are diminishing. The costs of maintaining the illusion of “normalcy”–for example, that going to college is “still affordable”– are soaring, while the gains of a college education are declining as credentials and diplomas are is oversupply. (What’s scarce are the real-world skillsets employers actually need.)
Americans are in pain, and the cartel-sickcare “solution”–“non-addictive opioids”–is reaping a horrendous toll on all who trusted the sickcare system to deliver non-addictive painkillers. Should the newly addicted sufferer no longer be able to get the synthetic opioid prescribed, the option of choice is street smack (heroin), and this is why heroin deaths are soaring along with deaths caused by synthetic opioids.
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The Cost Basis of our Economy is Spiraling Out of Control
The Cost Basis of our Economy is Spiraling Out of Control
What will it take to radically reduce the cost basis of our economy?
If we had to choose one “big picture” reason why the vast majority of households are losing ground, it would either be the stagnation of income or the spiraling out of control cost basis of our economy, that is, the essential foundational expenses of households, government and enterprise.
Clearly, both rising costs and stagnating income cause households to lose ground, i.e. their income buys fewer goods and services every year.
I’ve often covered the dynamics of stagnating income for the bottom 95%, and real-world inflation, i.e. a decline in purchasing power.
But neither of these dynamics fully describes the relentless upward spiral of the cost basis of our economy, that is, the cost of essentials and the foundations of the economy: education, healthcare, energy and labor.
These expenses are pushing the costs of virtually every good and service, public and private, higher in a self-reinforcing spiral. The costs of education are spiraling out of control, stripping households of income as an entire generation is transformed into debt-serfs by student loan debt. The soaring costs of healthcare are a core driver of higher costs in the education complex (and goverment in general), and to cover these higher costs, counties raise property taxes, which add additional cost burdens to households and enterprises as rents rise.
Rising rents push the cost structure of almost every enterprise and agency higher.
Then there’s the asset inflation created by central bank ZIRP (zero interest rate policy) which has inflated a second echo-bubble in housing that has pushed home ownership out of reach of many, adding demand for rental housing that has pushed rents into the stratosphere in Left and Right Coast cities.
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Our Economies Run On Housing Bubbles
Rene Magritte Memory 1948
The debt levels are not just unprecedented, they would until recently have been unimaginable. When the conditions for today’s debt orgasm were first created in the second half of the 20th century, people had yet to wrap their minds around the opportunities and possibilities that were coming on offer. Once they did, they ran with it like so many lemmings.
The reason why economies are now faltering invites an interesting discussion. Energy availability certainly plays a role, or rather the energy cost of energy, but we might want to reserve a relatively larger role for the idea, and the subsequent practice, of trying to run entire societies on debt (instead of labor and resources).
It almost looks as if the cost of energy, or of anything at all really, doesn’t play a role anymore, if and when you can borrow basically any sum of money at ultra low rates. Sometimes you wonder why people didn’t think of that before; how rich could former generations have been, or at least felt?
The reason why is that there was no need for it; things were already getting better all the time, albeit for a briefer period of time than most assume, and there was less ‘want’. Not that people wouldn’t have wanted as much as we do today, they just didn’t know yet what it was they should want. The things to want were as unimaginable as the debt that could have bought them.
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100% Renewable Energy: What We Can Do in 10 Years
100% Renewable Energy: What We Can Do in 10 Years
But the transition will entail costs—not just money and regulation, but also changes in our behavior and expectations. It will probably take at least three or four decades, and will fundamentally change the way we live.
Nobody knows how to accomplish the transition in detail, because this has never been done before. Most previous energy transitions were driven by opportunity, not policy. And they were usually additive, with new energy resources piling onto old ones (we still use firewood, even though we’ve added coal, hydro, oil, natural gas, and nuclear to the mix).
Since the renewable energy revolution will require trading our currently dominant energy sources (fossil fuels) for alternative ones (mostly wind, solar, hydro, geothermal, and biomass) that have different characteristics, there are likely to be some hefty challenges along the way.
Therefore, it makes sense to start with the low-hanging fruit and with a plan in place, then revise our plan frequently as we gain practical experience. Several organizations have already formulated plans for transitioning to 100 percent renewable energy.
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