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by
charleshughsmith
The Future of Work
by Charles Hugh Smith, contributing editor
Wednesday, November 16, 2011
Executive Summary
- Many of today’s current job positions will vanish as the debt that has made them possible retraces
- Future demand for work will come from non-financial sectors
- Cost management will re-assert it’s importance on par with income growth
- Non-market and hybrid work models will grow to employ many more people than they do now
- Participation in social and capital networks (both physical and virtual) will become increasingly valuable
Part I
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II
The Vulnerability of Our Debt-Dependent Workforce
In Part I of The Future of Work, we examined the future trend of the US economy and found that ever-expanding debt has been the “engine” that has powered growth (as measured by GDP, gross domestic product) over the past 30 years. The productivity of debt has now fallen to zero, or perhaps even less than zero, which means that increasing debt no longer adds to GDP.
The structural weakness of this model is reflected by the diminishing number of jobs, and the declining ratio of payroll and employment to population and per capita measures of the economy.
Simply put, an economy that has become increasingly dependent on debt for its growth no longer creates jobs. Rather, the cost of servicing all that debt acts as unproductive friction.
The Future of Work
PREVIEW by charleshughsmithThe Future of Work
by Charles Hugh Smith, contributing editor
Wednesday, November 16, 2011
Executive Summary
- Many of today’s current job positions will vanish as the debt that has made them possible retraces
- Future demand for work will come from non-financial sectors
- Cost management will re-assert it’s importance on par with income growth
- Non-market and hybrid work models will grow to employ many more people than they do now
- Participation in social and capital networks (both physical and virtual) will become increasingly valuable
Part I
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II
The Vulnerability of Our Debt-Dependent Workforce
In Part I of The Future of Work, we examined the future trend of the US economy and found that ever-expanding debt has been the “engine” that has powered growth (as measured by GDP, gross domestic product) over the past 30 years. The productivity of debt has now fallen to zero, or perhaps even less than zero, which means that increasing debt no longer adds to GDP.
The structural weakness of this model is reflected by the diminishing number of jobs, and the declining ratio of payroll and employment to population and per capita measures of the economy.
Simply put, an economy that has become increasingly dependent on debt for its growth no longer creates jobs. Rather, the cost of servicing all that debt acts as unproductive friction.
by
Gregor Macdonald
How To Position For the Next Great Oil Squeeze
by Gregor Macdonald, contributing editor
Monday, November 14, 2011
Executive Summary
- Why smaller, independent oil companies should thrive as America struggles to increase domestic supply
- A breakdown of often-touted ‘new sources of domestic supply’ (shale oil, kerogen, offshore fields, other Western Hemisphere finds) and why they won’t come close to meeting US demand needs
- How to hedge against the next great oil price spike
- The wisdom of adopting a slower-based oil consumption lifestyle now
Part I – Selling the Oil Illusion, American Style
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II – How To Position For the Next Great Oil Squeeze
Using the latest data from EIA Washington, I made the following chart of actual imports of crude oil against production. This is a simple and direct accounting of what can become a rather complex topic filled with obfuscation and bad math. For example, by counting biofuels, ethanol, natural gas liquids, and the use of our own natural gas inputs to refine crude oil into gasoline, you can produce rather misleading accounts of net imports, such as this piece from EIA Washington titled How Dependent Are We on Foreign Oil?
Just so that we are very clear on the facts, natural gas liquids (NGLs) contain only 65% of the btu of oil, and, of course, they are not oil. As Jeff Rubin likes to say, “NGLs can go straight to your butane cigarette lighter, not your automobile.” But by adding NGLs and ethanol to “oil supply,” we can delude ourselves into thinking that the US produces not 5.596 mbpd of crude oil, but rather 10.037 mbpd of liquids.
Despite any legitimate conversation we could have about the usefulness of various energy resources, it would be silly to say (for example) that “we need not worry about expensive oil and its effect on the economy, because we can just switch to ethanol.” The vastly smaller btu content of biofuel feedstock makes its inclusion in the accounting unhelpful, to say the least. As one Oil Drum commenter said to my previously cited post:
If the goal is to highlight the decline of crude oil production over time then including all other fuel sources is improper. You can’t project a future production trend of one commodity by including other commodities in the analysis.
(Source)
Yes, precisely. To that point, let’s now look at the chart.
How To Position For the Next Great Oil Squeeze
PREVIEW by Gregor MacdonaldHow To Position For the Next Great Oil Squeeze
by Gregor Macdonald, contributing editor
Monday, November 14, 2011
Executive Summary
- Why smaller, independent oil companies should thrive as America struggles to increase domestic supply
- A breakdown of often-touted ‘new sources of domestic supply’ (shale oil, kerogen, offshore fields, other Western Hemisphere finds) and why they won’t come close to meeting US demand needs
- How to hedge against the next great oil price spike
- The wisdom of adopting a slower-based oil consumption lifestyle now
Part I – Selling the Oil Illusion, American Style
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II – How To Position For the Next Great Oil Squeeze
Using the latest data from EIA Washington, I made the following chart of actual imports of crude oil against production. This is a simple and direct accounting of what can become a rather complex topic filled with obfuscation and bad math. For example, by counting biofuels, ethanol, natural gas liquids, and the use of our own natural gas inputs to refine crude oil into gasoline, you can produce rather misleading accounts of net imports, such as this piece from EIA Washington titled How Dependent Are We on Foreign Oil?
Just so that we are very clear on the facts, natural gas liquids (NGLs) contain only 65% of the btu of oil, and, of course, they are not oil. As Jeff Rubin likes to say, “NGLs can go straight to your butane cigarette lighter, not your automobile.” But by adding NGLs and ethanol to “oil supply,” we can delude ourselves into thinking that the US produces not 5.596 mbpd of crude oil, but rather 10.037 mbpd of liquids.
Despite any legitimate conversation we could have about the usefulness of various energy resources, it would be silly to say (for example) that “we need not worry about expensive oil and its effect on the economy, because we can just switch to ethanol.” The vastly smaller btu content of biofuel feedstock makes its inclusion in the accounting unhelpful, to say the least. As one Oil Drum commenter said to my previously cited post:
If the goal is to highlight the decline of crude oil production over time then including all other fuel sources is improper. You can’t project a future production trend of one commodity by including other commodities in the analysis.
(Source)
Yes, precisely. To that point, let’s now look at the chart.
by
charleshughsmith
The Transition to a Post-Friction Economy
by Charles Hugh Smith, contributing editor
Tuesday, November 1, 2011
Executive Summary
- Entrenched interests keep our markets from being free
- We’re living in a fool’s paradise (but for how much longer?)
- The forced choices headed our way
- What the post-friction economy will look like
- 2012-2105: The Era of Transformation begins
Part I – How Much of the US Economy Is Friction
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II – The Transition to a Post-Friction Economy
In Part I, we pursued the idea that much of the US economy is, in essence, unproductive friction that is overcome with vast borrowing — itself a form of friction — and the importing of fossil fuels. We also noted that the Central State/cartel “capitalism” partnership has greatly expanded the unproductive, uncompetitive “friction” segments of the economy and has limited consumer “choice” to purposely-selected menus designed to appear like a “free market” while benefiting State fiefdoms and private-sector cartels.
Entrenched Interests Keep Our Markets From Being Free
Looking at the sources and costs of friction gives us some insight into issues that are often seen as political — for example, the costs and benefits of borrowing trillions of dollars into existence every year and the costs/benefits of State regulation. Once we recognize how rising systemic friction will eventually freeze the system, then we also recognize that the path we’re on is unsustainable, and the political “rightness” or “wrongness” of increasing debt to fund the forces of friction becomes irrelevant.
The same can be said of State regulation. Given that one of the purposes of government is to protect the nation’s “commons” — air, water, public lands, and other shared resources — then some regulation is necessary to limit exploitation and predation of the commons by either private parties or the State itself.
But we have confused productive regulation with regulation that achieves little beyond diverting funds to unproductive segments of the economy. There are hundreds, if not thousands of examples in every sector from criminal justice to farm subsidies to health care.
How about the enormous expense of the “war on drugs” and the resulting prison complex and criminal justice system? Are the benefits being reaped — marginal, or even counterproductive, in many analyses — worth the expense? Those employed in these systems naturally feel the benefits far exceed the costs. But self-interest is simply not an accurate measure of friction; ultimately, only a free market of free citizens can make that assessment.
The Transition to a Post-Friction Economy
PREVIEW by charleshughsmithThe Transition to a Post-Friction Economy
by Charles Hugh Smith, contributing editor
Tuesday, November 1, 2011
Executive Summary
- Entrenched interests keep our markets from being free
- We’re living in a fool’s paradise (but for how much longer?)
- The forced choices headed our way
- What the post-friction economy will look like
- 2012-2105: The Era of Transformation begins
Part I – How Much of the US Economy Is Friction
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II – The Transition to a Post-Friction Economy
In Part I, we pursued the idea that much of the US economy is, in essence, unproductive friction that is overcome with vast borrowing — itself a form of friction — and the importing of fossil fuels. We also noted that the Central State/cartel “capitalism” partnership has greatly expanded the unproductive, uncompetitive “friction” segments of the economy and has limited consumer “choice” to purposely-selected menus designed to appear like a “free market” while benefiting State fiefdoms and private-sector cartels.
Entrenched Interests Keep Our Markets From Being Free
Looking at the sources and costs of friction gives us some insight into issues that are often seen as political — for example, the costs and benefits of borrowing trillions of dollars into existence every year and the costs/benefits of State regulation. Once we recognize how rising systemic friction will eventually freeze the system, then we also recognize that the path we’re on is unsustainable, and the political “rightness” or “wrongness” of increasing debt to fund the forces of friction becomes irrelevant.
The same can be said of State regulation. Given that one of the purposes of government is to protect the nation’s “commons” — air, water, public lands, and other shared resources — then some regulation is necessary to limit exploitation and predation of the commons by either private parties or the State itself.
But we have confused productive regulation with regulation that achieves little beyond diverting funds to unproductive segments of the economy. There are hundreds, if not thousands of examples in every sector from criminal justice to farm subsidies to health care.
How about the enormous expense of the “war on drugs” and the resulting prison complex and criminal justice system? Are the benefits being reaped — marginal, or even counterproductive, in many analyses — worth the expense? Those employed in these systems naturally feel the benefits far exceed the costs. But self-interest is simply not an accurate measure of friction; ultimately, only a free market of free citizens can make that assessment.
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