Gas Crunch Already Causing Disturbances

Everyone, and I mean EVERYONE, is being affected by the ever skyrocketing price of oil. Obviously, this isn't news; but what IS new is the sudden dip in miles driven this past March.

According to data just released by the Federal Highway Administration (FHWA), 11 BILLION less miles were traveled on highway systems in March 2008 than in March 2007. Just take a glance at the chart above. This is a dip of 4.3% and amounts to 9 million metric tons of greenhouse emissions that were not released into the atmosphere.

This dip in miles traveled correlates with the price of gasoline beginning it's upward ascent above $3.40/gal, reaching an all time high.

This is an impressive statistic, showing that if we really want to modify the behavior of large groups of people you have to strike at their wallets. No amount of education, advertisement, Inconvenient Truths, or guilty consciences could produce this impact. Interesting.... very interesting.

Recession?

It's no news that economists, analysts, and news media have been trumpeting the ebbing American economy for months now. With the ever-crumbling mortgage market and skyrocketing oil prices putting a hurt on wallets, it only seems logical that many are labeling American economic woes a RECESSION.

But are we really in a widespread recession? This Times reporter says no (at least not yet).

The crux of his argument rests upon the definition of recession. According to the National Bureau of Economic Research, "a recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income and wholesale-retail trade."

So how does this apply to the American economy? Employment numbers are indeed falling, but not quite as much as predicted. According to Bloomberg:

Payrolls shrank by 75,000 workers after decreasing by 80,000 in March, according to the median estimate of 82 economists surveyed by Bloomberg News before the Labor Department's report. The jobless rate rose to a three-year high of 5.2 percent, the survey also showed.

While this is troubling, it isn't quite the catastrophe that many were predicting in December.

According to the Times article, what is protecting the American economy from spiraling down the toilet is the fact that most of our troubles are isolated in the housing/mortgage and energy sectors. The strict definition of a recession would require all facets of the economy to be affected and this simply isn't the case (again, not yet).

And the author of the article does not predict a recession either. In short this is due to three reasons:

1. Based on past evidence (Latin American defaults in '84, the market crash of '87, and the devaluation of Mexican and Russian dollars in '95), severe financial crises do not necessarily indicate a recession is eminent.
   
2. The $600-2000 stimulus checks coming to each American household will provide a much-needed kick in the ass for consumer markets.
   
3. Falling house prices and rock bottom interest rates will reinvigorate the stagnant housing market that will help pull itself out of its funk.
   

Will these predictions come to pass? Who knows. But I like this bit of optimism in an otherwise bleak outlook on American economic futures.

Neocon 101

Here is a GREAT video in which Republican candidate Ron Paul (R-TX) gives a brief overview of the neoconservative movement (of which he is not a proponent of).

The neoconservatives are a class of policy-pushers that currently inhabit the upper echelons of D.C. politics (see GWB post 9/11, Cheney, Wolfowitz, and Bill Kristol).

In short, neoconservatives push for big government, an expansive American empire, military muscling of foreign powers, infringement on civil liberties and deception of the people, and a controlling elite that manages the media, policies, and surveillance directed at the general populace.

The neocons are able to justify trampling on the Constitution in order to push their agenda. This is in defiance of the American people and the founding fathers. I don't know about you, but I would like a say in what goes on in Washington. Make your vote count...

A special visit from Washington

On Thursday, yet another example of the ignorance that pervades the political sphere became apparent to me. In fact it came knocking upon my doorstep.

Indiana State University was "lucky" enough to get a visit from Sen. Hillary Clinton's senior health adviser, Andrea Palm. Ms. Palm is a New York native who served as legislative assistant under the late California representative Robert Matsui. She now advises Hillary on matters of national health.

And she does this without a single shred of experience in healthcare. During the Q&A session, my very first question asked, "What are your healthcare credentials?" And would you believe that her answer?

"Absolutely none."

What is Sen. Clinton thinking? Ms. Palm's assignment as health adviser seems to be nothing more than a doling out of advanced position to a "good 'ol gal" from New York. And judging from the political blabbermouthing and sweeping generalizations that Ms. Palm demonstrated during the Q&A, Hillary's health panel is in serious trouble. Luckily, she isn't being paid too much... here is her salary breakdown.

In my opinion, none of the audience's questions were answered satisfactorily. Ms. Palm spent her time talking around issues without addressing them forthright. I guess I shouldn't be surprised, what do I expect from what is obviously a "yes-woman".

But when taking a look at Obama's health adviser, credentials are obviously much more important to this young presidential candidate. In February there was a debate between Ms. Palm and Obama's adviser, Dr. Maxwell Bloche at Case Western U. I only wish I could have seen the fireworks this man (who possesses both an M.D. and a J.D.) threw at her insubstantial platform.

A note to Hillary: if you want to be an effective leader, surround yourself by people that will give you the straight story, not these nodding heads that do nothing but parrot your unfocused platform.

Limitless Chinese ambition...

By now you might have gathered that I have a slight obsession with China. This country is a force that is gaining unprecedented momentum everyday. Their massive manpower combined with ever increasing organization and productivity makes for one very strong nation.

This month in National Geographic the Wenzhou people are profiled. The Wenzhou hail from a province (Zhejiang) on the far eastern coast of China bordering the East China Sea. What is unique about this culture is the EXTREME business sense and entrepreneurship these people demonstrate. I honestly can't believe some of the things I am reading in this article.

"Recently, Wenzhou's Fortune Weekly conducted a survey of local millionaires. One question was: If forced to choose between your business and your family, which would it be? Of the respondents, 60 percent chose business, and 20 percent chose family. The other 20 percent couldn't make up their minds."

This is astounding! It is a culture that upholds industry and production above anything else. In Zhejiang, every town has a specific good that it produces. Instead of the centralized manufacturing that occurs in the rest of the world, China is focusing on specialty factories that dominate entire towns. Take these specific examples from the article:

Qiaotou's population is only 64,000, [note: this is about the pop. of Terre Haute] but 380 local factories produce more than 70 percent of the buttons for clothes made in China. In Wuyi, I asked some bystanders what the local product was. A man reached into his pocket and pulled out three playing cards—queens, all of them. The city manufactures more than one billion decks a year. Datang township makes one-third of the world's socks. Songxia produces 350 million umbrellas every year. Table tennis paddles come from Shangguan; Fenshui turns out pens; Xiaxie does jungle gyms. Forty percent of the world's neckties are made in Shengzhou.

And this increasing industrialization means BIG changes for Chinese infrastructure and population dynamics. What was once a rural and agrarian country is now growing at enjoying economic growth exceeding 11% annually!!! And this juggernaut has had the fastest growing economy for over 25 years running!!! And this is growth is having a profound effect on Chinese migration:

The economy is fueled by the largest migration the world has ever seen: An estimated 140 million rural Chinese have already left their homes, and another 45 million are expected to join the urban workforce in the next five years.

Those are some truly phenomenal numbers. Keep in mind that 140 million is about half of the ENTIRE U.S. POPULATION! And this massive migration has forced the construction of instant "just-add-water" cities that include dormitories for workers, factories, and basic necessities in a just a few months. In some cases, roads are built before manhole covers, streetlamps, or sidewalks are available and workers are moved into a city months before hospitals and clinics are opened.

And the money for these ventures is coming from loans by state-owned banks that are funded through the central government. Normally this sort of growth is slowed by lowered demand for goods, but in China's case there has been no abating the world's insatiable hunger for consumer products. Remember, these are the people that built The Great Wall, a structure that is visible from space and was constructed between 200 BCE and 1600 AD (long before any modern machinery was available). As long as the rest of the world is consuming, China is going to continue growing...

Keeping perspective

One of my interests is keeping track of world population and consumption dynamics. This ties in with the whole idea behind Peak Oil, the rapid acceleration of Asian markets, and American over-consumption. Here in the U.S. we are so used to having what we want, when we want it, I think it can be easy to forget that not everyone in the world has such luxury.

Let's run some numbers.

The entire population of the world is estimated by the UN at 6,671,226,000 (6.6 billion)

Countries ranked by population:
1. China - 1.32 billion (about 19.84%)
2. India - 1.12 billion (about 16.95%)
3. United States - 300 million (about 4.6%)
4. Indonesia - 225 million (about 3.5%)
5. Brazil - 186 million (about 2.8%)

A 2005 study stated that 86% of the world's energy consumption comes from non-renewable fossil fuels (petroleum, coal, natural gas). This is troubling. As a species, humans are ravenously consuming resources that have taken trillions of tons of biomass and millions of years to accumulate. It's like a kegger where everyone is doing kegstands but didn't bring money to buy more beer. And America is the loud, fat obnoxious guy who considers it his personal mission to drink more beer than anyone else IN THE WORLD.

Energy consumption by country (in thousand barrels oil per day):
1. United States - 20,687
2. China - 7,273
3. Japan - 5,159
4. Russia - 2,861
5. Germany - 2,665

Obviously there is a disparity here as China has over FOUR TIMES as many people, yet still consumes less than us. From our perch as the only world superpower, it's easy for us to get away with this. But I don't believe we are going to be the only one for long. The next 50 years are going to be very pivotal in human history as powers are already shifting and tensions between nations are becoming strained as petroleum dwindles.

The only solution I see is wiser energy policy. This includes a two-step approach:

1) Use less energy!
- this is a no-brainer. Efficiency will be our friend once energy prices begin to climb to unmanageable levels. Instead of hulking SUVs and infrastructure built around road travel, take a cue from Europe and consider rail transit (which is another blog post all by itself) or

2) Research new energy sources!
- another obvious one. This whole situation can be made manageable if we look to the future without oil and begin to probe new avenues. This is happening already, but this process could be helped by wiser investing in research (the government investment in biofuel is ridiculous and cost ineffective). If we use fossil fuels as a springboard to advance research in new energy production methods, we could make it out of the crisis yet.

It's trickling down already...

For those of you wondering when/if we are going to see the effects of the current recession and the skyrocketing price of gasoline, it's happening already. Let me tell you a story...

While shadowing today I talked at length with a patient who owns a restaurant. Or I should say currently owns a restaurant, because the future of this small business is in doubt. After over two decades of friendly service, this cozy haven is perilously close to shutting its doors.

When I asked the owner what he blamed for his misfortune he had one simple answer: gas prices. Apparently this man is extremely fastidious with his bookkeeping and can trace the slow decline of his profits as they juxtapose the ever swelling price of gasoline. He explained to me that he recently looked at his records and saw a startling correlation between the cost of gas and his customer base.

According to him, a little over three years ago (2005) the price of gas jumped from ~$2.30/gal to ~$2.90/gal (a 26% increase). After this spike, he saw business at his restaurant drop off by 30%. Well, although the loss was tough he kept trucking ahead. Then gas jumped again, from ~$3.00/gal to the current price of ~$3.35/gal (a 12% increase). Again, he saw business plummet by another 30%. He is now clinging to what little income he is drawing from the restaurant and will likely shut the doors permanently soon.

And gas isn't the only reason people are going out less. There is simply less expendable income for the average person. With rising inflation, the average American budget just doesn't have enough pocket money to go out anymore.

Picture a young newlywed couple. In previous decades they would usually have $20-60 to spend on the weekends (dinner, movie, drinks). Now this money goes to fill a gas tank. And that amount of money couldn't even buy dinner and a movie these days to begin with ($9.00 for a single movie ticket?!?! I'll borrow my buddy's pirated copy, thanks).

And this brings up the issue of previous recessions. "But, but, but, recessions have occured in the past! Look at the early 2000s after the dot-com burst! We recovered from that because of Dubya! Yee-Haw!"

Don't count on that this time. We recovered from previous recessions because we still wielded unparalleled power on the world economic stage. No longer. Where previously we were the biggest oil market in town (and so saturated in cheap oil we might as well have bathed in it) now we are in direct competition with the Big Red Dragon - China. Now, China hasn't yet reached the absurd amounts of consumption we are accustomed to, but they will if given opportunity. This means that when the big swinging dicks of OPEC are looking to shill out their black gold, they can now go with the highest bidder where there was previously only one buyer in the market (US).

So what does this mean in the long run? Well don't expect gas prices to go down, that's for sure. And those days of long car trips, affordable SUVs, and earth-rumbling RV homes are dwindling into the history books. Expect to be living by much more meager means in the future. I'm not saying it's going to be tomorrow, but just know that powers are shifting. And if you think the Middle East and China are significant powers today, well.....

The Wal-Mart Manifesto

As many of my friends know I completely despise Wal-Mart. My hatred began when I was around 18 and I completely stopped shopping there during my freshman year of college.

I haven't spent one dollar at Wal-Mart in over 4 years (except for one emergency oil change before going on a trip). My life is completely normal as I shop for groceries at Kroger and local markets and get household goods at the drugstore or clothing shops. I would be completely happy if I never set foot in a Wal-Mart ever again.

Now comes the tougher part: backing up my hatred. There are numerous reasons Wal-Mart should be viewed suspiciously and even boycotted. The Wal-Mart corporation (and by extension Sam's Club, the Walton family, and board members) is an extremely predatory and profit-mongering operation that could stand a dose of perspective. Here is my personal list of reasons Wal-Mart should be boycotted:

1) Anti-union - Wal-Mart is aggressively anti-union. For one of the largest single employers in the world, this is quite bizarre. But the reasoning is simple; the billion dollar profit margins rely on maintaining the status quo. Power rests with the higher-ups and not with the legions of employees who work long hours for meager pay. Anti-union videos are shown routinely. Those who seek to start unions are fired. Special union-busting laws have been enacted by Congress. Regardless of personal feelings about unions, it seems there should be some form of representation for the Wal-Mart employees.

2) Wages - This is a huge issue. For the largest private employer in the world, wages are insubstantial at best. Some may argue that the jobs provided by Wal-Mart are not meant to be all-encompassing to support a family. Well whether or not they are meant to be, they are. Did you know that Wal-Mart encourages employees to seek out government aid to supplement wages? That's YOUR pocket they are dipping into to help their own employees.

Number time. In 2003, BusinessWeek reported that the average wage for a Wal-mart emplyoee was $8.23 an hour. The work week for a Wal-Mart employee is ~34 hours (to avoid paying out benefits for a 40 hr. week). This amounts to $13,861 a year... the poverty line that year was $14,630.

3) Predatory Business Practices - Ever notice how when a new Wal-Mart opens up many local businesses are quickly shut down? This is unsurprising due to the huge advantage Wal-mart has in prices, variety, and convenience. This sounds pretty nice, right? For the consumer, yes it is, in the short-term. But then when small business owners are shut down, where do they turn? To the local Wal-mart of course! This progressively turns small communities from hosting intimate, personalized small business into a town full of Wal-mart employees groveling for thin wages while the king-shit corporation sits on the throne masterminding it all.

I've even heard stories of Wal-mart sending employees out to buy up stock of high demand items (Shrek DVDs, Xmas toys, video games) from other stores in order to draw customers to their store. That's some real goddamn gestapo shit!

When small business is run out, the money that is spent no longer remains circulating in the small town. Nope, that money is funnelled straight into the bulging pockets of Wal-mart HQ, making the biggest corporation in the world (yes, even bigger than big oil) only more rich.

4) Right-wing politics - It should come as no surprise that the largest private company in the world is also a fan of right wing politics that give tax breaks to the rich. They fund conservative interest groups, oppose abortion rights, and even campaign to block pharmacists from distributing emergency contraceptives and birth control. Remember that every dollar you spend there goes to fund right wing causes.

5) Strong-arm manufacturers - Because of their priviledged position at the top of the retail pyramid, Wal-mart is afforded special consideration when dealing with their manufacturers. They wield unprecedented power when dealing with suppliers.

In a startling example, Wal-mart refused to increase the price of a 3-gallon jar of Vlasic pickles from $3.00 to $3.49 when the supplier was only making pennies per jar. Granted, Vlasic had signed a contract stating that the price per jar was $3, but they did not anticipate that the sales would top 240,000 3-gallon jars per week which led to massive underselling of their more profitable 8 & 16-oz. jars of sliced pickles. With stock plummeting, Vlasic asked Wal-mart for a helping hand and were flatly refused. In 2001 Vlasic filed for bankruptcy.

6) Misc. - As previously stated, Wal-mart does not provide any benefits for the vast majority of its employees.

Look at the products you buy at Wal-mart. Where were they made? Probably China. For a company that claims to be so pro-America, they buy from China as much as humanly possible. This steals even more American jobs and sends our dollar overseas.

The massive buildings and resources these buildings consume make for a huge environmental footprint. Imagine how much energy it takes to heat/cool the huge warehouse-like buildings while people stream in and out through the wide-open doors.


Well, there it is.
That's my soapbox on Wal-mart. I could go on and on with these issues, but if you are really curious to learn more please do. There is a great documentary called "Wal-mart: The High Cost of Low Prices" produced by Robert Greenwald that gives more info. Here are some useful links to give you more insight:

Wal-mart Watch
Criticism of Wal-mart

If you are persuaded by this argument and are wondering what you can do to help, it's easy... just stop shopping there. And tell your friends. The best way we can make our displeasure known is to simply vote with our dollar.

Together we can topple the Goliath.

Getting the ball rolling...

I am fucking fed up. My disgust will remain subdued and impotent no longer. The current state of America is deplorable and I just want to puke every time I read a new report on our inflating dollar, stunningly ignorant dealings both domestic and foreign, rising costs of Iraq, and arrogance/scandals/deception. I have to let it all out somehow and this seems to be the most practical way outside of soapboxing the corners of downtown and printing underground news leaflets.

The title of this blog is "Heavy for the Vintage". This comes from my all-time favorite quote from John Steinbeck and is very appropriate for the tone of this blog. From The Grapes of Wrath the full quote goes: "...and in the eyes of the people there is the failure; and in the eyes of the hungry there is a growing wrath. In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." This quite accurately reflects the discontent that I am feeling in my posts and also pays homage to my favorite American author.

This blog was created as a product of many late-night drunken bull sessions between myself and my good friend Brad. Topics will include mainly politics/economics but will also stray into commentary on movies, music, literature, and popular culture. I plan to include pictures, links, and other cool things as well. I also hope to have guest commentaries from friends; if you have something you want posted on here, send it to me!

It's a work in progress so stick with it! (That message was more for my own benefit really)