Monthly Archives: September 2009

Travel by Airplane

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I was born in 1946, part of the postwar “baby boom”.

As it turns out, I was born into the most privileged society in the world, at the height of its privilege. As a white male born into a middle class family, I was a beneficiary of most of that privilege.

Although it is hard to believe now, by the early 1950s, one man, working full time, at minimum wage, could support a family of four. High quality health care was generally available, and affordable, for most people throughout the nation, urban or rural. Free public education was easily available for most people, and well funded.

To be sure, there were profound systemic problems-it was not Eden.

One man could support a family of four, but not one woman. Women then, as throughout most of human history, did the bulk of the everyday work of households, and their work was little valued, and rarely paid. Education opportunities were best for those of European heritage. While racial oppression was beginning to ease, it was still widespread, although class distinctions were at probably their lowest since the founding of the country.

But this piece is not about these inequities, important though they were, and are. This piece is about technology in our daily lives, and the profound changes that can happen in one lifetime.

I was born before there was television; movies were in black and white. Recorded music was on records, which were large, brittle, inconvenient, and monophonic. There were no electronics to speak of: no video games, no personal computers, no cell phones, no iPhones, no CDs, no DVDs, and no Bluetooth.

And the only people traveling by airplane were the military, businessmen and the wealthy.

It occurred to me the other day that most of us have little concept of what a post-petroleum world will be like. Petroleum is unique as an energy source in that it is energy dense (that is, a lot of energy is contained in a small volume), can be stored and transported safely at normal temperatures and pressures, and is easily converted to usable energy. Each of these qualities is important; which is most important varies depending on the use to which we wish to put it.

In airplanes, the critical quality is energy density. Weight and volume is important in flying. The more the fuel weighs, and the larger the space it takes up, the less the payload can be (fewer people) or the shorter the trip between fueling stops. In practical terms, this means that soon airplane flight will again be rare-a mode of transport used only by the military, some business people, and the wealthy.

It means that in my lifetime I will have lived through the entire time where airplane flight was available to the average person.

I wonder what else will disappear? Since nearly all plastics are petroleum based, what will we do without abundant inexpensive plastics? What about cheap and easy transportation of people and goods?

What do you think?

The Stock Market as a Ponzi Scheme

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The term “Ponzi Scheme” has re-entered the common lexicon, brought to the forefront by the current machinations in the stock market and other financial arenas.

The name comes from an Italian American (named Ponzi) who bilked a number of people in a crooked investment scheme. He claimed to be investing their money, but in reality he paid high returns to early investors with money from later investors. The more people he paid, the more people invested with him, and they, in turn, received payments from subsequent investors.

Eventually, of course, the money ran out, and the whole house of cards imploded.

You may not see the similarity with the recent stock market collapse. After all, in the stock market you actually own stock (or some other “instrument”). This stuff is real, not imaginary. But is it?

Any basic investment training will tell you that there are very specific things to examine when making an investment, and they should be balanced to your needs, and your comfort with risk. Rule number one is that the return reflects the risk, i.e. the higher the risk, the higher the rate of return (earnings).

The reasons to buy stock are: ownership in the company, income stream, and increase in value.

Ownership in the company yields two benefits, a voice in running the company (voting stock selects the Board of Directors) and the security of owning assets if the company dissolves. In a publicly traded company it is unlikely that any individual you or I know will ever have enough stock to make a difference in who is on the Board. Corporations never dissolve when they are solvent, so it is almost a matter of definition that if a corporation dissolves you will never see anything after creditors recover what they can from the sale of assets.

No one who works for a living buys stock for the business ownership.

The income stream from a company is found in the dividends. There are no large corporations that pay dividends anything like any number of other investments that are much more secure.

Almost no one buys stock for the income stream.

That leaves capital gains when the stock is sold. In other words, I can sell the stock for more than I paid for it.

That is the reason virtually everyone who buys stock does so. The expectation that someone else will buy the stock for more than they paid.

But why will someone else pay me more that I paid?

For the same reason I did: They believe that they can sell it for more than they paid. To someone else who thinks they can sell it for more than they paid. And so on, and so on.

So how “real” is the stock. We have all owned the same shares of stock. Has the real value of the company increased over time? Has the company increased production? Cut costs? Increased profits and therefore increased dividends?

A fun thing to do is listen to investment pundits predict what will happen in the market over the next few weeks or months, then scramble to explain what actually happened later.

Stock prices do not regularly reflect P/E ratios, profits, net worth of the company, or any other common predictor.

Stock prices are influenced primarily by belief – a truly faith-based investment.

Now do you see the similarity between the stock market and any other Ponzi scheme?

What do you think?

Learning from Life

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I work a lot with young people. Primarily in gardens and on small farms. We grow food.

I regularly hear from observers and supporters how wonderful it is for the participants to learn to grow their own food, or to take care of the earth, or to learn good work habits, or to be responsible, or…

All of that is true, of course.

What I do not hear about is what I consider the most important lesson: for many “disadvantaged” youth (a disproportionate number of the participants), planting, tending, growing, harvesting and eating food plants is perhaps their first experience that undeniably demonstrates to them that what they do has real life consequences.

Let’s be honest. Most of the people we call “disadvantaged” are pretty much screwed from birth. They are born into poverty, and the poor are pretty much left out of the loop when it comes to opportunity in this country.

In addition, most “disadvantaged” people are not “white”, which is almost a crime in itself. Their access to education and resources is curtailed, their efforts are ignored or denigrated, their lives diminished at every turn.

All because they were born when the were, where they were, and in the society they were, NOT because of their actions or failure to act.

To be sure, many do things that are unacceptable to the rest of society. But when they do, they often suffer consequences that are disproportional to those who are “better off”. For instance, studies are replete with the details of longer and harsher sentences for non-whites in the United States for identical charges in similar circumstances.

In short, their life experiences show them, again and again, that how well they do in life is not related to their actions. How many Caucasian young men do you know who have been pulled over for being white? Yet every young man of color who drives has been hassled by the police for no other real reason than that he was a young man of color.

But nature doesn’t care.

The cycle of life responds to anyone who puts in the effort to plant and tend, yielding a harvest which reflects that care, as well as that of the soil and the season. Every time. No exception, no fast footwork, no evasion, no excuse.

For many of the people in these programs I am so happy to be involved in, this is the first time in their lives that they can proudly say, “I grew that! And it tastes GOOD!” And they know, at a gut level, from personal experience, that their efforts result in a very good thing, and they are undeniably valuable as a human being.

THAT’S the value from the effort that keeps me going.

What do you think?

Buy Local?

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So buying local is the latest progressive thing to do. But what does it mean, to “buy local”?

Here’s what “buy local” means – not just buying from your locally owned store (which is very important), but buying stuff made locally – the closer to home the better, e.g if you live in Portland, in descending order of “goodness”: made in the Portland metro area, made in Oregon, made in the Pacific Northwest, made in the United States, then Canada, then Mexico.

Here is the real challenge: while it is true that there is much to be found that is made more or less locally, there is also much that is not to be found made anywhere in the West. For example, have you tried to buy a wind-up alarm clock not made in China lately? And sometimes the price of locally made things is higher than the alternatives.

I suggest some strategies here: paying more (at the counter) for locally made things is worth it – the benefit to the local economy (our neighbors) outweighs the additional price (at the counter) because when we do not buy locally we end up paying additional costs: higher unemployment, increased crime, poorer health, and declining neighborhoods.

But what to do when there is no local (say within the United States) article? Now the decision is, do I really need this? Is there a substitute I can get that is produced locally?

Please remember, if we want to be serious about sustainable societies we need to recognize that most of us have way too much stuff. There is a basic rule in sustainability: if you consume more than you produce you are being subsidized. The subsidy is always in some form of energy and natural resources. For most of the history of humankind that energy subsidy has been mainly slave labor/peons/indentured servants/peasants. That pretty much came to an end in the United States in the early part of the 20th century, when we shifted to petroleum energy – but now this abundance of high-density, easily portable energy is coming to an end.

Some years ago we began shifting our subsidies to cheap labor in distant economies. The cost has been the loss of control of our economy, which means that we have lost wealth, resources, productivity, key industrial capability and the skilled labor needed to be a productive society. The price we pay is not only at the cash register (which might be better called a “credit register”), but in the loss of the ability to feed, clothe and shelter ourselves. The question we must now face is “Who do we want to be dependent upon/subsidized by?”

How about ourselves? Buy local? Unquestionably, yes!

What do you think?