World Economy May Lose 51 Million Jobs

January 28, 2009

http://www.reuters.com/article/newsOne/idUSTRE50R2VQ20090128

The International Labor Organization (ILO), an agency of the United Nations (UN), has forecast that the best case scenario for the global economy would result in the loss of 18 million jobs in 2009 but, under the worst case scenario, job losses could reach 51 million.  As recently as October, their worst case was a loss of only 20 million jobs.  Clearly, no one really knows how bad things may get, as predictions deteriorate just as fast as present conditions. 

I believe we’re witnessing the very economic “collision” I warned of with Five Short Blasts – a collision between falling per capita consumption, a consequence of worsening over-crowding, and rising productivity – leaving rising unemployment and poverty in its wake.  “Nonsense,” some may say.  “This is just an economic down-turn, another in the long line of inevitable business cycles.” 

Perhaps.    Business cycles have certainly come and gone with regularity over the last century or so.  But there’s something different about this one. It’s the culmination of decades of attempting to hold back the tide of unemployment and poverty by propping up consumption with debt.  As business cycles came and went, there was one parameter of the economy that never stopped its exponential growth beyond all capability to deal with it – the 800 lb gorilla in the economy – population growth. 

In the last 150 years we’ve stuffed six times as many people into the same space, this little terrarium called planet earth, and somehow expected that it would have no effect on our ability to consume products and gainfully employ everyone.  It was so unbelievable that we concocted a “field of science” that we called “economics,” bestowing impressive Phd degrees on its practitioners who promised they could make it work, like Wizards of Oz, fooling us with their bags of tricks. 

And it’s not as though global unemployment took a sudden turn for the worse.  It has been rising steadily for the past few decades, in spite of what those who proclaim the benefits of globalization would have you believe.  Sure, development has flourished in places like China and India, and many have prosperred. But the fact is that dramatic increases in productivity in those countries have put many people, mostly in rural areas, safely out of view of the adoring fans of globalization, out of work. 

And with the world’s population adding a quarter of a million people every single day – a million people added to the available labor supply every single week – it’s easy to predict that matters will get worse.  Oh, sure, the Wizards of this Oz may pull a few more tricks out of their bags – setting up “bad banks,” spending on infrastructure and printing money – but the effects won’t last and we’ll be back in the same boat. 

It’s time to send the wizards and their bags of tricks packing, and it’s time for the field of economics to grow up and get serious about crafting a sustainable economic future.

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Obama’s Opportunity to Kill Three Birds with One Stone

December 19, 2008

The inextricably linked issues of global warming and energy (eliminating our dependence on oil from the Middle East and Venezuela) have been elevated to national security issues by the Obama administration.  So, while consumers have welcomed the plunge in gas prices, they couldn’t have come at a worse time for this administration, for there is nothing that drives down the consumption of fossil fuels (the burning of which contributes directly to global warming) like high prices.  Without high prices, there is no profit potential to provide the motivation for a switch to more expensive alternative energy sources. 

So what is the Obama administration to do?  I see a unique opportunity for Obama to actually kill three birds with one stone here.  “Wait,” you’re thinking.  “You’ve only identified two birds – global warming and energy.”  Stick with me.  We’ll get to the third. 

The key is to drive fuel prices higher, restoring the impetus for improving energy efficiency and for converting to alternative energy sources, without hurting the consumer.  Here’s how that can be done.  It begins with imposing a large federal tax on fuels – oil, natural gas and coal.  Now I can just see your eyes rolling already, so hear me out.  Every penny of this tax should then be rebated to consumers in the form of a tax reduction of some kind – either a reduction in the tax rates or through a tax deduction or tax credit.  This tax reduction should be applied evenly to all individual taxpayers, but not to businesses.  (More on that later.) 

For example, let’s suppose that this tax drives the cost of gasoline back to $4 or $5 per gallon, and that a total of $600 billion is collected from this tax.  And let’s say that there are 150 million taxpayers.  Doing the math, each taxpayer would get back $4,000 at the end of the year.  If, on average, each taxpayer burns 2,000 gallons during  the year, and the tax added $2 per gallon to the price of gas, then that taxpayer comes out even. 

So how does this accomplish anything?  The tax rebate isn’t based upon how much you consume.  It’s based on total consumption by the American public.  So, if you do a better job than average of cutting your consumption, you’re going to come out ahead.  If you cut your consumption to 1,000 gallons for the year while the average remains 2,000 gallons, you’re going to come out ahead by $2,000 at tax time.  In other words, you have an incentive to slash your spending on gas.  At $4 per gallon, we’ve already seen how quickly people begin to use it more efficiently.  The tax rebate at the end of the year is just gravy.  Everyone is going to be highly motivated to cut their spending on gas, just as they were this past summer.  And now the profit potential is still there to motivate a switch to alternative energy sources. 

Why not extend the tax rebate to businesses?  Because, unlike consumers, businesses use vastly different quantities of fuel, depending on the nature of the business.  It’d be an accounting nightmare to try to keep them “whole” in terms of fuel cost vs. tax rebate.  Besides, their products are all consumed by individual taxpayers, so if the fuel tax collected from businesses is also rebated to individual taxpayers, then the latter are kept “whole” in terms of the tax rebate off-setting the higher cost of products.  In addition, with higher fuel costs and no tax rebate, businesses will be super-motivated to improve their energy efficiency. 

But, since businesses will have to add this fuel tax to the cost of their products, won’t this make American-made products uncompetitive with imports?  Ah, this is where the “third bird” comes in!  Imports would also be taxed at a rate that would eliminate this cost discrepancy.  But isn’t that a tariff that violates WTO (World Trade Organization) rules?  Yup!  And this is where it gets really good!  The global community, led by the UN, has been beating us over the head to come up with a plan to address global warming.  So, UN, here’s the plan.  Do you have a better one?  If not, then the global community, led by the UN, needs to sit down with the WTO and demand changes to trade rules that accommodate nations’ efforts to address global warming.  After all, everyone acknowledges that one of the keys to cutting fuel consumption and CO2 emissions is to produce more products locally.  And no one can argue that trade policy takes precedent over the need to fight global warming. 

In fact, that brings up another issue.  Billions of gallons of fuel are burned every year in ships delivering products all over the world.  That’s a lot of oil consumption and a lot of CO2 emissions.  It has to be factored into the equation by someone, in some way, because the cost of dealing with global warming is going to be astonomical.  A good way to account for this is to require each nation to include in its emissions the fuel burned by ships delivering imports, beginning with their point of origin.  What I’m saying is that imports should be taxed based upon the fuel that was burned to deliver them. 

For example, let’s suppose that a ship delivering cars from Japan burns about five million gallons of fuel and delivers 5,000 cars (fairly typical figures).  That fuel should be taxed at the same rate as fuel burned in the U.S.  Again, assuming that the tax adds $2 per gallon to the cost of fuel, then that delivery of cars should be assessed a tax of $10 million.  That would add $2,000 to the cost of each imported vehicle.  In fact, even the delivery of oil in tankers should be taxed in the same way, to mitigate the cost of dealing with the emissions from the oil burned in the ship’s engines.   

This means that imports would have to be taxed twice, or in two ways:  one tax to offset the higher cost of domestically produced products (unless the exporting nation has implemented a similar system of fuel taxes, making the imports equal in cost to domestic products), and a second to offset the cost of mitigating the carbon emissions that came from the ship delivering them.  Of course, all of these taxes or tariffs, whatever you choose to call them, would also be rebated to American taxpayers.  The goal is not to collect revenue, although some additional revenue could go a long way toward balancing the federal budget, but that’s a whole can of worms I won’t open here.  Rather, the goal is to provide incentive for cutting the use of fossil fuels and switching to alternative energy sources. 

The beauty of this is that the higher cost of imports would also go a long way toward restoring a balance of trade, an issue that many experts now agree is at the heart of the global economic melt-down. 

So, with one stone – a tax on fuels – the Obama administration could kill three birds:  reduce oil consumption and greenhouse gas emissions, and even restore a balance of trade, all with minimal impact on American consumers.  He can use the climate change issue to drive a wedge between the UN and the WTO and effect a badly-needed overhaul in WTO rules that would restore some balance to global trade.


UN Climate Conference Notes Role of Population Growth

December 17, 2008

http://www.google.com/hostednews/ap/article/ALeqM5jRgRMGKjgcFxzBGdgvXbKKBul8TgD9515EV01

This linked article offers one more glimmer of hope that the subject of overpopulation is getting more attention.  Although the article reports that the UN is unwilling to take on the issue of population growth as it grapples with global warming, experts in attendance at the UN climate conference in Poland recognize the role of population growth in worsening the problem and see a need to address it on a national level.

“Population is the unmentioned elephant in the living room when it comes to climate change,” said Bill Ryerson, president and founder of the Vermont-based Population Media Center.

“A lot of people say population pressure is a major driving force behind the increase in emissions, and that’s absolutely true,” the U.N.’s top climate official Yvo de Boer said.

“If we don’t address the population issue and population continues to grow the way it is, … we will fail to solve the climate crisis,” Ryerson said.

Brian O’Neill, a population expert with the National Center for Atmospheric Research, said there is substantial evidence showing a strong correlation between a country’s economic growth and its emissions.

Even if it doesn’t come up in Poznan, the Worldwatch Institute’s Robert Engelman said policies to slow population growth will eventually find their way into the climate toolbox for many countries.

“Population doesn’t need to be part (of) international negotiations on mitigation. You don’t have (to) say country X will cap its emissions and population,” he said.

“But countries will begin to see that a more rapidly rising population will make it hard for them to curb emissions,” said Engelman, the author of “More: Population, Nature and What Women Want.”

With the heavy emphasis that Obama has placed upon the issue of climate change, elevating it to a national security issue, how could it possibly escape his attention that it is exacerbated by population growth?  To hope for some kind of national policy aimed at stabilizing our population may be a stretch but, at the very least, one would hope that it will make Obama reluctant to liberalize immigration policy.


Ban Ki-moon: An Intellectual Lightweight?

June 3, 2008

http://www.usatoday.com/money/industries/food/2008-06-03-un-summit_N.htm

I generally refrain from commenting on articles about resource shortages since my book, Five Short Blasts, is focused on an entirely different consequence of overpopulation – unemployment and poverty.  However, at this point it must be obvious to nearly everyone (except, perhaps, the most brain-washed of economists and the CEO’s of global corporations) that we’re reaching or have already exceeded some kind of limit here in terms of our planet’s ability to sustain us. 

It’s very sad that not even the U.N. Secretary General can recognize this fact and devote a few words to the need to stabilize our population, instead of calling for a 50% increase in food production over the next 28 years.  Is he such an intellectual lightweight that he can’t see the problem, or does he lack the courage to confront the misguided, evil pro-growth forces of the world?  I’m afraid that, with a very few exceptions, our world is devoid of leadership on the one issue where we need it the most.  This failure only condemns an ever-growing number of people to a miserable life and an early death. 


Yesterday’s Immigration Rallies Fizzle

May 2, 2008

http://www.reuters.com/article/newsOne/idUSN0146621520080502?sp=true

Here’s an article about the immigration rallies across the U.S. yesterday.  There was a little bit of local news coverage of the rally held in Detroit.  It appeared that there were about 300 people involved.  I saw one American flag and three or four Mexican flags displayed prominently. 

I’d like to comment on some excerpts from the Reuters article:

“Thousands of immigrants marched through cities across the United States on Thursday, but smaller crowds suggested their cause had lost momentum in this election year.”

Perhaps the crowds were smaller because the pool of available participants has shrunk.  Although the issue has thankfully been pushed to the back burner of Congress, it’s still very much alive on the state and local levels, with many, many laws being passed to make it ever more difficult for illegal aliens to function in our society.  Here in Michigan, the law was recently changed to prevent them from obtaining drivers’ licenses, as an example.  Other locales have passed laws to crack down on employers who hire them and on landlords who rent to them. 

“‘This is a very young country built off immigrants. The immigrants of yesterday are citizens today, so immigrants of today should become citizens tomorrow,’ said Jose Rodriguez, who came to the United States from Mexico illegally in 1989 and has since gained permanent residency.”

First of all, this guy is a criminal and should be deported.  Secondly, his logic makes no sense whatsoever.  Just because a nation is built of (not “off”) immigrants, it’s not a rationale for continuing to import more people forever.  It’s like saying that a building made of concrete, once it is finished, should continue to have concrete poured in through the windows just because the building has a history of using concrete.  The guy has no concept of overpopulation (except perhaps the overpopulation in Mexico that he ran from in ‘89).

“‘The police are deporting immigrants because they have broken the law but I think there is a higher law and that is to treat someone in a humane way,’ said Rodriguez, 42.”

Agreed.  All illegal immigrants should be treated humanely during the deportation process.  Did Mr. Rodriguez really come here to champion this “higher law” or did he come here, ignoring our laws, for purely economic reasons?  Then isn’t it really poverty that he considers more inhumane?  If so, then why didn’t he stay at home and champion this “higher law” of humane treatment of the poor in his own country where the need is greater? 

“In Phoenix, no one turned out to march, in contrast to past years when central thoroughfares were packed with protesters.

In Tucson, Arizona, a few hundred pro-immigration supporters walked through the streets carrying placards with messages such as ‘Citizenship Yes! Deportation No!’ That fell short of organizers’ hopes that several thousand would attend.”

I suspect that, not only is the pool of available marchers smaller, but the remainder are laying low out of fear of being identified and deported. 

Activists said the low turnout stemmed from the failure to push a bill through Congress last year that would have given illegal immigrants a chance to legalize their status. An estimated 12 million illegal immigrants, mainly from Mexico, live in the United States.

In one major raid last month, U.S. immigration agents arrested about 400 employees at five Pilgrim’s Pride Corp chicken plants from West Virginia to Texas in connection with immigration-related crimes, including identity theft.

So there’s 11,999,600 to go.  Sounds like the immigration authorities better get busy!

Rampant population growth threatens our economy and quality of life. Immigration, both legal and illegal, are fueling this growth.  I’m not talking just about the obvious problems that we see in the news – growing dependence on foreign oil, carbon emissions, soaring commodity prices, environmental degradation, etc. I’m talking about the effect upon rising unemployment and poverty in America.

Our policies of encouraging high rates of immigration are rooted in the belief of economists that population growth is a good thing, fueling economic growth. Through most of human history, the interests of the common good and business (corporations) were both well-served by continuing population growth. For the common good, we needed more workers to man our factories, producing the goods needed for a high standard of living. This population growth translated into sales volume growth for corporations. Both were happy.

But, once an optimum population density is breached, their interests diverge. It is in the best interest of the common good to stabilize the population, avoiding an erosion of our quality of life through high unemployment and poverty. However, it is still in the interest of corporations to fuel population growth because, even though per capita consumption goes into decline, total consumption still increases. We now find ourselves in the position of having corporations and economists influencing public policy in a direction that is not in the best interest of the common good.

The U.N. ranks the U.S. with eight other countries – India, Pakistan, Nigeria, Democratic Republic of Congo, Bangladesh, Uganda, Ethiopia and China – as accounting for fully half of the world’s population growth by 2050. The U.S. is the only developed country still experiencing third world-like population growth, most of which is due to immigration. It’s absolutely imperative that our population be stabilized, and that’s impossible without dramatically reining in immigration, both legal and illegal.  If we don’t, soon rampant population growth won’t be the only thing we have in common with the third world.

Pete


In Meeting with Guatemalan Leader, Bush Betrays America Again

April 29, 2008

http://afp.google.com/article/ALeqM5i1husekv0SAY-7ALHc63hZXtqj7w

While meeting with Guatemalan President Colom, Bush came down on the wrong side of our two most critical issues again – trade and immigration.  Bush supported free trade with Guatemala and offered hope to Colom of granting “temporary protected status” to Guatemalan immigrants, both legal and illegal. 

With a population density near that of China, Guatemala has nothing to offer Americans in trade for access to our healthy market except another automatic, irreversible trade deficit and loss of manufacturing jobs for American workers. 

And rampant population growth threatens our economy and quality of life. Immigration, both legal and illegal, are fueling this growth.  I’m not talking just about the obvious problems that we see in the news – growing dependence on foreign oil, carbon emissions, soaring commodity prices, environmental degradation, etc. I’m talking about the effect upon rising unemployment and poverty in America.

Our policies of encouraging high rates of immigration are rooted in the belief of economists that population growth is a good thing, fueling economic growth. Through most of human history, the interests of the common good and business (corporations) were both well-served by continuing population growth. For the common good, we needed more workers to man our factories, producing the goods needed for a high standard of living. This population growth translated into sales volume growth for corporations. Both were happy.

But, once an optimum population density is breached, their interests diverge. It is in the best interest of the common good to stabilize the population, avoiding an erosion of our quality of life through high unemployment and poverty. However, it is still in the interest of corporations to fuel population growth because, even though per capita consumption goes into decline, total consumption still increases. We now find ourselves in the position of having corporations and economists influencing public policy in a direction that is not in the best interest of the common good.

The U.N. ranks the U.S. with eight other countries – India, Pakistan, Nigeria, Democratic Republic of Congo, Bangladesh, Uganda, Ethiopia and China – as accounting for fully half of the world’s population growth by 2050. The U.S. is the only developed country still experiencing third world-like population growth, most of which is due to immigration. It’s absolutely imperative that our population be stabilized, and that’s impossible without dramatically reining in immigration, both legal and illegal.

Pete