Per Capita Energy Consumption

May 30, 2008

http://ap.google.com/article/ALeqM5ilnVSjW7eBQv4-nQNaPLjMmUMEjwD90V2TGG1

This story got a lot of coverage in the news yesterday.  To make a long story short, the Brookings Institution (one those “think tanks” that thinks what its corporate sponsors pays it to think), released a study that shows that per capita energy consumption (and corresponding “carbon footprint”) is lower in big cities than it is in more rural areas. 

While cities are hot spots for global warming, people living in them turn out to be greener than their country cousins.

Each resident of the largest 100 largest metropolitans areas is responsible on average for 2.47 tons of carbon dioxide in energy consumption each year, 14 percent below the 2.87 ton U.S. average, researchers at the Brookings Institution say in a report being released Thursday.

This seemed to come as a surprise to the study’s authors.

Those 100 cities still account for 56 percent of the nation’s carbon dioxide pollution. But their greater use of mass transit and population density reduce the per person average. “It was a surprise the extent to which emissions per capita are lower,” Marilyn Brown, a professor of energy policy at the Georgia Institute of Technology and co-author of the report, said in an interview.

 This shows a fundamental lack of understanding of the role of population density in driving down per capita consumption.  People in cities aren’t “greener” because out of any conscious effort to reduce energy consumption.  It’s due entirely to the fact that they’re forced to crowd together.  More live in smaller dwellings, like apartments and condos, have shorter commutes and are forced to use mass transit due to traffic congestion.  Would residents of Los Angeles prefer the more wide open quality of life enjoyed by people living in Lexington, Kentucky?  Most surely would, but it’s not an option for them.  They’ve been crowded out of that kind of life style. 

Now, obviously, this is a good thing from the perspective of conserving natural resources and minimizing impact on the environment.  But this declining per capita consumption is a very bad thing for employment.  Falling per capita consumption, in the face of rising productivity, results in rising unemployment and poverty. 

You have to ask yourself, what was Brookings’ motivation for doing such a study?  It seems clear to me:  Brookings’ corporate sponsors want to defuse concern about global warming and especially want to cast doubt on the growing suspicion that a growing population is an environmental threat.  To suggest that energy consumption is lowest in our most densely populated locales is to also suggest that we can solve the global warming crisis by actually increasing our population density. 

Don’t buy it.  There’s no greater threat to our environment, our limited supply of natural resources and especially to our economy, as rising unemployment and poverty take their toll, than further population growth.  No amount of technological solutions can be effective if population growth wipes out any improvements in efficiency.  It’s time to focus on the one and only solution that offers any hope of a sustainable high quality of life in the future – stabilizing our population. 

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Population Decline: Threat or Solution?

May 30, 2008

http://www.washingtonpost.com/wp-dyn/content/article/2008/05/29/AR2008052903576.html?hpid=moreheadlines

This Washington Post article criticizes Japan’s leaders for not acting more quickly to head off a decline in population by increasing immigration.  It simply astounds me to see seemingly intelligent people wringing their hands over a decline in human population, even if it’s about to begin in one of the most overpopulated nations on earth, a nation who cannibalizes manufacturing jobs all over the world to support its bloated work force. 

Yet, they worry about a shrinking work force – that they won’t have enough workers to support their industries’ grand plans for never-ending sales volume and profit growth.  They worry too that they won’t have enough young workers to support an aging population.  Never mind that growing the population only makes matters worse in the future, since population growth must end eventually one way or another.  That’s too long term thinking.  All anyone cares about is the short term. 

Such focus on perpetual growth is self-destructive.  As explained in Five Short Blasts, once an optimum population density has been breached (as it was long, long ago in Japan), further growth becomes cancerous, destroying our standard of living and quality of life.  Beyond that optimum population density, over-crowding begins driving down per capita consumption.  But since per capita output – productivity – always rises, the inevitable consequence of these colliding factors is rising unemployment and poverty.  Not understanding this, our leaders continue to pin their hopes on growing ourselves out of our economic ills when it is this cancerous “growth” that is causing our problems in the first place.  When will our leaders ever come to understand that corporate plans for never-ending growth are unsustainable and contrary to the interests of their citizens and the common good?  They’d better understand it soon or the “patient” – our economy and quality of life – will soon succumb to the cancer.   


U.S. Government Assists Outsourcing to China

May 29, 2008

http://uk.reuters.com/article/technologyNews/idUKN2739209520080529?sp=true

I bring this article to your attention because I could hardly believe what I was reading.  The U.S. government has filed a complaint with the WTO (World Trade Organization), complaining that the EU (European Union) has raised tariffs against Chinese exports of high-tech products.  Why is the U.S. government involved?  Because these products are being made by the Chinese under American brand names like Hewlett Packard.  (Japan has filed a similar complaint against the EU.) 

At first glance, this appears to be a case of America defending its manufacturers against unfair trade practices by the EU.  It isn’t until you get further into the article that these are actually products made in China and shipped directly from China to the EU.  Thus, our government is wasting its time helping the Chinese support their huge trade surplus with Europe and helping American manufacturers with their outsourcing of manufacturing to China. 

The United States and Japan said they were taking action at the World Trade Organization aimed at overturning European Union tariffs on computer screens, multifunctional printers and TV set-top boxes capable of accessing the Internet.

U.S. technology heavyweights such as Hewlett Packard Co (HPQ.N: Quote, Profile, Research) argue that EU tariffs on the products violate the spirit and the letter of the WTO’s Information Technology Agreement (ITA), which eliminated duties on a wide range of high-tech goods beginning in July 1997 to spur trade.

So, up to now, you’re probably cheering the U.S. for having the gumption to stand up to unfair European trade practices, right?  But wait:

 

 

U.S. industry officials said the EU imported $11 billion worth of the three products each year.

 

The goods are manufactured mostly in countries such as China and Malaysia but are based on U.S. design and engineering and sold under U.S. brand names.

 

Profits from exports of the three goods also return to the United States, Schwab said.

So that’s the real concern – propping up the profits of American companies that have outsourced manufacturing to China.  Frankly, I’m on the side of the EU on this one.  I can’t blame them for imposing tariffs on imports from China to protect their domestic industries.  More power to them.  The EU is using some common sense in setting their trade policies.  If the U.S. had any sense, we’d also impose tariffs on the same products, regardless of whether or not they’re made under “American” brand names. 

 

 


The Start of a New Asian Financial Crisis?

May 29, 2008

http://www.reuters.com/article/reutersEdge/idUSSP14158120080529

One of my predictions for 2008 regarding the global economy was that another currency devaluation war would erupt in Asia, as intensifying competition for the export markets of Europe and the U.S. leads Asian nations to turn to currency devaluation to gain an upper hand on their Asian rivals.  This wasn’t on anyone’s radar back in November of last year but, with an understanding of what a high population density does to per capita consumption, it seemed clear to me that this would be inevitable as Asian nations became ever more dependent on exports to sustain their bloated work forces.  Now it appears to be starting:

… Some observers are even pointing to a potential currency crisis, given Vietnam’s growing current account deficit, weakening fiscal position and limited foreign exchange reserves, on top of 25 percent annual inflation, the second-worst in Asia.

Some of Asia’s largest economies are also grappling with the same risks. Although none look as vulnerable as Vietnam, some are set for their sternest test since the Asian financial crisis of 1997.

The article goes on to blame the price of oil for increasing trade deficits in Vietnam, the Philipines and other Asian nations.  But another way of looking at their trade deficits is to focus not on their imports of oil but on their exports – their inability to sustain exports at a high enough level to fund their oil purchases.  By the way, why is that a trade deficit is a bad thing for every economy in the world except the U.S.?  When the U.S. complains of its trade deficit, Asian nations are the first to deride us for not seeing the imaginary benefits of free trade with them and to admonish us for any thoughts of a return to protectionist tariffs.

This is something that bears watching.  Currency devaluation among Asian nations would be proof positive that we can’t rely on currency valuation as a means of reversing a trade deficit that is rooted in a gross discrepancy in population density between the U.S. and these nations, and has nothing whatsoever to do with currency evaluation.  I’ll keep you posted with further developments on this.


One Less Globalization Cheerleader on the Federal Reserve Board

May 29, 2008
Federal Reserve Gov. Frederic Mishkin said Wednesday that he would resign from the central bank at the end of August to return to his Columbia University teaching post.

With Mishkin’s departure, the seven-member Fed board of governors could be pared down to four. The Democratic-controlled Senate for nearly a year has refused to vote on President Bush’s nominees to fill several open Fed slots. If the Senate delay continues, whoever is elected president in November will have a chance to quickly shape the policymaking arm of the central bank through new appointments.

The Senate is right to hold off on approving any more of Bush’s globalization cheerleaders. We need Fed governors who are willing to take the administration to task (whether it’s the Bush administration or the coming Obama administration) for continuing unsustainable trade deficits and federal budget deficits. It’s time for a return to common sense management of this nation’s finances.

The Latest Turn in Ford’s Death Spiral

May 29, 2008

http://www.usatoday.com/money/autos/2008-05-28-ford-cuts_N.htm

This artice details a plan released by Ford Motor yesterday to lay off 2,000 salaried workers.  Ford actually acknowledges that this is an unexpected departure from their “turn-around” plan, necessitated by rapidly falling sales volume. 

With U.S. auto sales expected to drop to around 15 million this year, down from 17 million as recently as 2005, Ford needs to cut costs to help pay for new technology and stay afloat until the market recovers, said Kevin Tynan, an auto analyst with Argus Research in New York. Ford and other automakers are investing in costly hybrid and electric vehicle technologies but won’t see the benefits for several years, he said.

Tynan said Ford wouldn’t be able to reach its layoff targets without involuntary layoffs. But he also noted the company and its U.S. competitors have weathered downturns in the past.

“If history is a guide, we’ve been through it before. You get to these points where you restructure, then you start to recover,” Tynan said. “It’s at least an industry and a group of companies that have proved they can get pretty creative when the back’s against the wall.”

It’s absolutely amazing to me that these executives just don’t get it.  After decades of this slow downward spiral, they still cling to hope of a big turn-around.  But without a dramatic shift in U.S. trade policy – the implementation of the tariff structure on manufactured goods, indexed to population density, which I outlined in Five Short Blasts – American auto manufacturers are doomed to continue their descent into bankruptcy and oblivion.  Check out my “2008 predictions” in which, back in November of 2007, at a time when the “experts” were hailing Ford’s turn-around plan, I predicted the bankruptcy of either Ford or Chrysler in 2008.  It’s an easy call when you understand the role of our misguided trade policies in destroying our economy. 

It’s going to get worse instead of better as the U.S. sinks deeper into recession.  The “experts” are now forecasting an early end to a shallow recession.  Don’t believe it.  This isn’t just a normal business cycle.  Overpopulation and an idiotic trade policy that imports the effects of overpopulation even faster are all coming home to roost. 

 


Word of U.S. Immigration Crackdown Spreading Through Central America

May 27, 2008

http://www.wjla.com/news/stories/0508/523045.html

Here’s some really good news about illegal immigration.  ABC has found that word is spreading across Central America that anyone thinking of trying to cross the border illgally should stay home.  The first paragraph would lead you to believe that this is due to the “sagging economy,” but read on and you’ll find that it’s really due to the broad-based crackdown on illegal immigration by the federal government, states and municipalities. 

“What I want to say to all the people from El Salvador or other countries, the situation in this country is not easy. It’s very difficult and it’s not worth it to risk your life,” said day laborer Jose Manuel Munoz through a translator.

From suburban Washington to rural El Salvador, ABC 7 heard from many immigrants that they are warning their friends and relatives to not come to America. “I say to the rest, this is not a good time to come to the United States. If you are okay, over there, in El Salvador, stay there,” said Rosa Nativi.

Carlos Diaz’ sister lives in Manassas. “She has told me that a lot of people is afraid to get out of their houses, to walk in the streets, because they’re getting caught by immigration department and they’re getting deported,” he said through a translator.

“If somebody pays me one million dollars, I will never do it again. Not ever,” Diaz said.

I encourage all of you to write to your senators and congressmen, including your state representatives, and tell them to keep up the pressure and enact legislation that makes it ever more difficult for illegals to function in our society.  The efforts are paying off and having an effect.  Let’s keep it up!