THE Second Great Depression Thread (merged)

[Ferretlover]

For the soft landers: the issue of energy density of various alternative energy options has already been well explored in these forums. These alternatives can't match the outstanding energy density of hydrocarbons; and even if they could, it would still require massive amounts of petroleum to build the new infrastructures, accelerating the depletion of oil. But I believe that even if these physical obstacles could somehow be overcome, we still would not have the economic might to launch such a grand project. I believe that we are headed for a second Great Depression, whether Peak Oil hits us soon or not.

The following are exerpts from an article on MSN's Encarta Encyclopedia site. It discusses various conditions leading up to the Great Depression of the 1930s. As I read the article I was struck by similarities to conditions today:

The depression was caused by a number of serious weaknesses in the economy. Although the 1920s appeared on the surface to be a prosperous time, income was unevenly distributed. The wealthy made large profits, but more and more Americans spent more than they earned, and farmers faced low prices and heavy debt. The lingering effects of World War I (1914-1918) caused economic problems in many countries, as Europe struggled to pay war debts and reparations...

Today: this decade appears on the surface to be a prosperous time, but income is unevenly distributed. Many Americans spend more than they earn. United States is paying heavily for the Iraq War (nearly a quarter of a trillion dollars so far – http://www.costofwar.com ).

As is typical of post-war periods, Americans in the Roaring Twenties turned inward, away from international issues and social concerns and toward greater individualism. The emphasis was on getting rich and enjoying new fads, new inventions, and new ideas.

Today: Americans are apathetic about global public opinion, and pay little attention to world news events. The emphasis is on getting rich and enjoying new fads, new inventions, and new ideas.

The self-centered attitudes of the 1920s seemed to fit nicely with the needs of the economy. Modern industry had the capacity to produce vast quantities of consumer goods, but this created a fundamental problem: Prosperity could continue only if demand was made to grow as rapidly as supply. Accordingly, people had to be persuaded to abandon such traditional values as saving, postponing pleasures and purchases, and buying only what they needed... The resulting mass consumption kept the economy going through most of the 1920s.

Today: we're producing vast quantities of consumer goods, but prosperity can continue only if demand grows as rapidly. Personal savings are at nearly zero, impulse purchases for unnecessary items high. Mass consumption keeps the economy going.

But there was an underlying economic problem. Income was distributed very unevenly, and the portion going to the wealthiest Americans grew larger as the decade proceeded... Corporate profits shot up by 65 percent in the same period, and the government let the wealthy keep more of those profits. The Revenue Act of 1926 cut the taxes of those making $1 million or more by more than two-thirds.

Today: income is distributed very unevenly. Tax cuts have been made in the top income-tax brackets. Corporate profits are breaking records.

...This meant that many people who were willing to listen to the advertisers and purchase new products did not have enough money to do so. To get around this difficulty, the 1920s produced another innovation—”credit,” an attractive name for consumer debt. People were allowed to “buy now, pay later.” But this only put off the day when consumers accumulated so much debt that they could not keep buying up all the products coming off assembly lines. That day came in 1929.

Today: credit rules. 'Nuff said.

The rising incomes of the wealthiest Americans fueled rapid growth in the stock market, especially between 1927 and 1929. Soon the prices of stocks were rising far beyond the worth of the shares of the companies they represented. People were willing to pay inflated prices because they believed the stock prices would continue to rise and they could soon sell their stocks at a profit.

Today: there is a nearly universal belief that markets will continue to expand.

The widespread belief that anyone could get rich led many less affluent Americans into the market as well. Investors bought millions of shares of stock “on margin,” a risky practice similar to buying products on credit. They paid only a small part of the price and borrowed the rest, gambling that they could sell the stock at a high enough price to repay the loan and make a profit.

Today: day-traders, many unknowledgeable, are controlling up to 10% of the Nasdaq stock index. Many of them trade on margin.

...But the stock boom could not last. The great bull market of the late 1920s was a classic example of a speculative “bubble” scheme, so called because it expands until it bursts. In the fall of 1929 confidence that prices would keep rising faltered, then failed...

Today: there is concern about a possible housing bubble, the bursting of which could severely impact the economy.

...The credit of a large portion of the nation’s consumers had been exhausted, and they were spending much of their current income to pay for past, rather than new, purchases. Unsold inventories had begun to pile up in warehouses during the summer of 1929.

oday: Americans are spending much of their current income to pay off credit card and mortgage debts. Recent legislation increases the minimum payment and makes filing for personal bankruptcy more difficult.

The article goes on from there, describing life during the Great Depression and the era's eventual conclusion. It's a good read. There are indications of some of what might be in store for us, including an item of special interest:

The depression also played a major role in world events. In Germany, the economic collapse opened the way for dictator Adolf Hitler to come to power, which in turn led to World War II.

Imagine a situation as devastating as the Great Depression... with Peak Oil added as icing for the cake and a few wars thrown in for good measure. I believe that Peak Oil will in fact be the catalyst for the collapse. When the Peak becomes common knowledge, our great economic overreach will become apparent in an instant. But it will be too late. If we were to act now, before the Peak... but obviously, the political leadership just isn't there. Soft landing? I just don't see it happening. We're in for it, guys and gals. Best get ready.

http://encarta.msn.com/encyclopedia_761584403/Great_Depression_in_the_United_States.html

[dissimulo]

I'm actually much more worried about our precarious economic situation than I am about peak oil. I worry about peak oil because I see it either leading into the next depression or significantly worsening its effects.

I'm still mixed on whether or not we will find a way out of our energy problems. The possibilities of much more efficient solar or of nuclear fusion seem to offer a possibility of giving us access to much more abundant energy in the future - but I think we will have to come through a nightmarish economic period before we get there.

Growth without near-term limits is not necessarily impossible if we are able to harness greater sources of energy and expand beyond Earth, but I don't think we will get there without suffering the destruction of the current system first. And, of course, destruction of the current system could well be a permanent set-back. It's a bummer.

[bobcousins]

The problem with this sort of analysis is that you can find many periods in history where there are similiar parallels, but where there was no depression. I think many of the things you identified have always been true. When was wealth in the USA evenly distributed?

I think you need to look a little more deeper to find the causes of recession than just looking for similarities.

[gt1370a]

Have you guys read Jared Diamond's book "Collapse"? It's interesting in that book how some societies can tolerate certain conditions, whereas those conditions cause collapse in other societies. For example, a drought in a large society with a central government and established trade routes might not be so bad since they could share food production from other areas, but a drought in a place like Henderson island would be catastrophic, as a simple example.

Economic imbalance in and of itself may not be enough to cause another Depression in the US. Throw in some environmental variables (like hurricanes maybe, or resource depletion, or pollution of water supplies/soil), conflict with enemies (terrorism, fighting in Iraq, Iran selling oil for Euros), and problems with trade partners (Venezuela and Canada selling oil to China instead of us, and driving the price up for everyone), and you may have a recipe for disaster.

Maybe I haven't identified all of the variables or not the right ones, but you get my point. Another post mentioned the obvious - when has wealth ever been evenly distributed in the US? When hasn't there been a stock bubble? When haven't we been at war? It's a combination of certain variables, and our inability to adequately address those variables, that's a problem. Unfortunately the US is currently experiencing all of the factors for Collapse from Diamond's book, but we are also in a unique situation to deal with them - it will be interesting to see how it plays out.

[GoIllini]

I don't see how this is going to be economic-thought shatteringly devastating. We get a bad case of the '70s mixed in with a depression. So what?

It's nothing we can't get out of with 20 years of hard work. The '70s saw a boom in nuclear energy. The '30s saw a boom in the development of other energy infrastructure. (We didn't have nuclear back then.)

Everyone makes the great depression out to be horrible. My grandparents don't think it was that bad. All of them found decent jobs, fed themselves easily, and one even worked their way through college. My grandpa's a bit annoyed that he got shot in the leg during WWII, but otherwise, doesn't think anything particularly awful happened to him back then.

And every person I've talked to who didn't work in Detroit and wasn't crazily exaggerating tells me that the '70s were just ho-hum. It was hard to make money in the stock market, and occaisionally hard to find gas, but otherwise, things weren't that bad.

And the best part of it is that when we come out of this mess, we'll have the energy infrastructure to experience the prosperity of postwar America and the '80s combined. (Hopefully, we won't have to experience a repeat of '80s music, but that's another story.)

So what if people are making comparisons to the '30s? It really isn't that bad. The U.S. can feed itself, and despite claims that we're importing coal (mostly because foreign labor's cheap right now), we have enough coal to keep the electricity flowing for 100 years. There's enough Uranium in seawater, which we can recover at a very high net EROI, to keep the lights on for ~500, and if we reprocess like France is currently doing, ~20,000. For the matter, we're getting ready to bury enough waste in Yucca mountain to meet all of the country's energy needs for 150 years if we reprocess like France.

Nothing earth-shattering. No paradigm shifts in western economic thought. Just a decent-sized bump in the economy. We Americans will come out of this in 20 years as obnoxious and arrogant as ever (maybe being able to speak some Chinese or Indian), and we'll laugh at your kids when they build bomb shelters over Y2039 (when some computer dates roll over) or claim the world's going to end with Peak Solar.

[Ludi]

Nothing earth-shattering. No paradigm shifts in western economic thought. Just a decent-sized bump in the economy.

No, no paradigm shifts, but they will still have to deal with the issues of global climate change, topsoil loss, mass extinctions, water shortages, etc.

[GoIllini]

Nothing earth-shattering. No paradigm shifts in western economic thought. Just a decent-sized bump in the economy.

No, no paradigm shifts, but they will still have to deal with the issues of global climate change, topsoil loss, mass extinctions, water shortages, etc.

Again, with nuclear energy, we can make topsoil on the molecular level, desalinize ocean water, and even the most pessimistic global warming models claim that if we stop increasing CO2 emissions in the next ten years, crazy predictions of 10 degree temperature increases will be cut by 40-50% in the very worst cases. How do you propose we keep increasing CO2 emissions if 70% of the world's fossil fuel production is going to peak in the next 10-15 years? Quite literally, when we have the technology and the energy to control things on the molecular level, the only thing we have to worry about is war.

Nothing earth-shattering. And 30 years ago, people were claiming that we'd have to deal with toxic waste running through our blood. I see no reason why we're just not seeing a repeat of doomer madness with these dire predictions. Doomers realized they might not get to use their bomb shelters because of detente, and we got shoved into all of these stupid fears about the world being without oil and being a toxic waste dump by 1990. And while they had compelling scientific arguments, the market provided new technology in treating waste and reducing oil consumption and helped us avoid those problems.

If the market could easily help us avoid the "nightmarish and unprecedented problems" the doomers' predecessors were claiming we'd face back in the '70s, I don't see why we shouldn't discount a market solution to peak oil.

[DamienJasper]

"nightmarish and unprecedented problems" the doomers' predecessors were claiming we'd face back in the '70s

Like for instance the Population Bomb.

[Ludi]

Again, with nuclear energy, we can make topsoil on the molecular level,

These are the ravings of a lunatic. I now officially refuse to take you seriously ever again.



You clearly don't know jack poopy about the soil.



You are an idiot.



(Sorry, everyone else, but this kind of absolute crapdoodle makes my head explode).

[Ludi]

And 30 years ago, people were claiming that we'd have to deal with toxic waste running through our blood.

:

"For the first time, researchers have identified an association between pregnant women’s exposure to phthalates and adverse effects on genital development in their male children. The pattern of genital changes seen in these baby boys is consistent with the "phthalate syndrome" previously observed in rodents prenatally exposed to phthalates. It is also suggestive of "testicular dysgenesis syndrome," a human health condition proposed to be linked to exposure to endocrine-disrupting compounds. The adverse effects are seen at phthalate levels below those found in one-quarter of women in the United States, based on a nation-wide survey by the Centers for Disease Control. More..."



"Bisphenol A linked to miscarriage in people. In a small prospective study, researchers in Japan report that bisphenol A levels are higher in women with a history of repeated spontaneous miscarriages. This research was based on proof that BPA causes meiotic aneuploidy in mice. Meiotic aneuploidy is the commonest cause of miscarriage in people. The researchers also followed the pregnancies of the women to completion, and found evidence of aneuploidy in several of the miscarried fetuses. Bisphenol A is widely used in consumer product, including polycarbonate water bottles, epoxy linings for food cans and coatings for papers. Almost all Americans carry measureable levels of BPA, at levels within the range known to cause changes in cellular responses."

http://www.ourstolenfuture.org/New/newstuff.htm


Revel in your near-total ignorance, GoIllini.

[Ludi]

"The human race is living beyond its means. A report backed by 1,360 scientists from 95 countries - some of them world leaders in their fields - today warns that the almost two-thirds of the natural machinery that supports life on Earth is being degraded by human pressure."

http://www.guardian.co.uk/internatio...ticle_continue

"This statement was developed by the Board governing the MA process, whose membership includes representatives from U.N. organizations, governments through a number of international conventions, nongovernmental organizations, academia, business, and indigenous peoples. See full list of Board members.

The statement from the Board identifies 10 key messages and conclusions that can be drawn from the assessment:

Everyone in the world depends on nature and ecosystem services to provide the conditions for a decent, healthy, and secure life.
Humans have made unprecedented changes to ecosystems in recent decades to meet growing demands for food, fresh water, fiber, and energy.
These changes have helped to improve the lives of billions, but at the same time they weakened nature’s ability to deliver other key services such as purification of air and water, protection from disasters, and the provision of medicines.
Among the outstanding problems identified by this assessment are the dire state of many of the world’s fish stocks; the intense vulnerability of the 2 billion people living in dry regions to the loss of ecosystem services, including water supply; and the growing threat to ecosystems from climate change and nutrient pollution.
Human activities have taken the planet to the edge of a massive wave of species extinctions, further threatening our own well-being.
The loss of services derived from ecosystems is a significant barrier to the achievement of the Millennium Development Goals to reduce poverty, hunger, and disease.
The pressures on ecosystems will increase globally in coming decades unless human attitudes and actions change.
Measures to conserve natural resources are more likely to succeed if local communities are given ownership of them, share the benefits, and are involved in decisions.
Even today’s technology and knowledge can reduce considerably the human impact on ecosystems. They are unlikely to be deployed fully, however, until ecosystem services cease to be perceived as free and limitless, and their full value is taken into account.
Better protection of natural assets will require coordinated efforts across all sections of governments, businesses, and international institutions. The productivity of ecosystems depends on policy choices on investment, trade, subsidy, taxation, and regulation, among others."

Link to the report:

http://www.millenniumassessment.org/en/products.aspx

[GoIllini]

Again, with nuclear energy, we can make topsoil on the molecular level,

These are the ravings of a lunatic. I now officially refuse to take you seriously ever again.



You clearly don't know jack poopy about the soil.



You are an idiot.



(Sorry, everyone else, but this kind of absolute crapdoodle makes my head explode).

Well, this is what's getting advocated at the big engineering schools like U of I, MIT, CMU, and Stanford.

The folks in Materials Science are claiming that in 30 years, we'll be able to make anything we want on the molecular level , given the energy. At a recent seminar, researchers were talking about the potentials of something called "atmospheric engineering" and taking CO2 out of the atmosphere. It's really quite amazing, and I'm sorry you don't have the same open mind for solutions to the world's problems as everyone on here seems to have for the seemingly cataclysmic problems associated with modern society.

Of course, I don't count on this to solve all of our problems, but I do believe that given enough energy, we can fix just about anything.

"For the first time, researchers have identified an association between pregnant women’s exposure to phthalates and adverse effects on genital development in their male children. The pattern of genital changes seen in these baby boys is consistent with the "phthalate syndrome" previously observed in rodents prenatally exposed to phthalates. It is also suggestive of "testicular dysgenesis syndrome," a human health condition proposed to be linked to exposure to endocrine-disrupting compounds. The adverse effects are seen at phthalate levels below those found in one-quarter of women in the United States, based on a nation-wide survey by the Centers for Disease Control. More..."



"Bisphenol A linked to miscarriage in people. In a small prospective study, researchers in Japan report that bisphenol A levels are higher in women with a history of repeated spontaneous miscarriages. This research was based on proof that BPA causes meiotic aneuploidy in mice. Meiotic aneuploidy is the commonest cause of miscarriage in people. The researchers also followed the pregnancies of the women to completion, and found evidence of aneuploidy in several of the miscarried fetuses. Bisphenol A is widely used in consumer product, including polycarbonate water bottles, epoxy linings for food cans and coatings for papers. Almost all Americans carry measureable levels of BPA, at levels within the range known to cause changes in cellular responses."

http://www.ourstolenfuture.org/New/newstuff.htm


Revel in your near-total ignorance, GoIllini.

With a website named, "ourstolenfuture.org", I know I can trust it to be unbiased...

But in all seriousness, I don't see the societal affects. Doomers in the '70s claimed the world would be close to devoid of all life by 2000. We're seeing populations of endangered species recover, ecosystems in the Great Lakes make comebacks, and everything that the doomers said would be horrible completely rebound.

Obviously, if these chemicals had 1/10 the affect doomers claimed they would have, we'd see it in society. But we don't. Unless you're alleging a conspiracy theory on the level of aliens trying to terraform the planet, the doomers in the 70s still played one of the world's biggest jokes on us.

The punch line on all of the fears you bring up just won't arrive. Global warming won't be a 10 degree and 200 ft problem, since we'll run out of fossil fuels first, which you also claim. Soil degradation would be an issue if we could have mechanized farming that didn't have all of the erosion protections U.S. farmers have had in place since the '30s.

[azreal60]

So, not having enough energy would then be..Bad?

So, peak oil, which would greatly reduce the amount of energy available would be... Bad?

Hmmm.... i'm seeing patterns.

[frankthetank]

Don't forget fairy dust.

[GoIllini]

So, not having enough energy would then be..Bad?

So, peak oil, which would greatly reduce the amount of energy available would be... Bad?

Hmmm.... i'm seeing patterns.

Exactly my point. You can't have your car stolen from you twice, and some of these claims aren't exactly consistent. Global warming only hits if we don't run out of fossil fuels, first. Funny how so many doomers on these forums claim that both will happen.

[RdSnt]

So, not having enough energy would then be..Bad?

So, peak oil, which would greatly reduce the amount of energy available would be... Bad?

Hmmm.... i'm seeing patterns.

Exactly my point. You can't have your car stolen from you twice, and some of these claims aren't exactly consistent. Global warming only hits if we don't run out of fossil fuels, first. Funny how so many doomers on these forums claim that both will happen.

Well let's see it took us a century or so to get to this point in global warming where we have a very broad concensus that it is a fact, and it will take another century or so to get a clear view of this giant heat engine unwinding, and given that even the most conservative say peak oil is going to occur within the next 20 or 30 years.
I'd say that means we are indeed going to get both global warming and peak oil.

It's called momentum, even if we stopped all fossil fuel use tomorrow, the planet will continue to heat up for some time.

[GoIllini]

Well let's see it took us a century or so to get to this point in global warming where we have a very broad concensus that it is a fact, and it will take another century or so to get a clear view of this giant heat engine unwinding, and given that even the most conservative say peak oil is going to occur within the next 20 or 30 years.
I'd say that means we are indeed going to get both global warming and peak oil.

It's called momentum, even if we stopped all fossil fuel use tomorrow, the planet will continue to heat up for some time.

I don't disagree with you that we will get some global warming. Indeed, we already have gotten some. But most models cover situations where we start conserving and situtations where CO2 emissions increase at 2-3% per year.

Needless to say, there's pretty much a consensus among all of these models that the differences between merely modest reductions from today's CO2 emissions by 2100 and the 10 degree C temperature increases a British environmentalist group is claiming we'll get if we continue increasing CO2 production are very, very significant.

I'm not a climatologist, but I have written a paper or two on global climate change and its impacts on the Great Lakes basin as part of some of the research I did in college. From what I remember of the studies that came out then, I think that maybe 95% of them were saying that we should expect anywhere from a .5-3 degree C average temperature increase by 2100 if CO2 production stopped growing by 2020-2030 and started dropping after that.

I don't think that one or two degrees C is the end of the world. We've already experienced a one degree increase in average global temperatures over the past 200 years.

[ubercrap]

Everyone makes the great depression out to be horrible. My grandparents don't think it was that bad. All of them found decent jobs, fed themselves easily, and one even worked their way through college. My grandpa's a bit annoyed that he got shot in the leg during WWII, but otherwise, doesn't think anything particularly awful happened to him back then.

Don't be ridiculous, of course some people had it just fine during the Depression, what, unemployment was only like 30% at the worst. Of course, we can never know the real figures, but rest assured they are probably worse. Oh, yeah, just don't be that 30%. If my grandfather were still alive, try telling him things were just fine. He would kick your ass. He was an orphan and had to survive on his own. To this day, I don't think anybody really knows how he, together with another of his young brothers, survived. I believe that it was accepted in the family that it was too horrible to speak about.

[GoIllini]

Everyone makes the great depression out to be horrible. My grandparents don't think it was that bad. All of them found decent jobs, fed themselves easily, and one even worked their way through college. My grandpa's a bit annoyed that he got shot in the leg during WWII, but otherwise, doesn't think anything particularly awful happened to him back then.

Don't be ridiculous, of course some people had it just fine during the Depression, what, unemployment was only like 30% at the worst. Of course, we can never know the real figures, but rest assured they are probably worse. Oh, yeah, just don't be that 30%. If my grandfather were still alive, try telling him things were just fine. He would kick your ass. He was an orphan and had to survive on his own. To this day, I don't think anybody really knows how he, together with another of his young brothers, survived. I believe that it was accepted in the family that it was too horrible to speak about.

Exactly my point. There are few people who didn't manage to survive the depression and WWII in this country who didn't get a chance to experience the postwar boom.

I think that for the average experience, it all evened out. When we come out of peak oil with a new energy infrastructure, we'll experience a post-peak boom proportionate to the postwar boom in the same way that the energy shocks will be proportionate to the great depression.

[DesertBear2]

But in all seriousness, I don't see the societal affects. Doomers in the '70s claimed the world would be close to devoid of all life by 2000. We're seeing populations of endangered species recover, ecosystems in the Great Lakes make comebacks, and everything that the doomers said would be horrible completely rebound.

Nobody in the 70s was predicting that the planet would be devoid of all life by 2000. This is just more exaggeration by right-wingers who view all environmentalists as disingenuous power seekers who are using environmental issues as a path to a centrally-controlled socialist state. Not true for most with a concern for environment.

There may be some endangered species making comebacks. However, there is a tremendous loss of species in the order of 3,000 different species/year. As a geologist, I cannot help but agree with those who term the present situation as the "sixth great extinction". And it is not a one-time event but is ongoing, repesenting a tremendous loss of natural wealth and diversity.