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Quality Improvement - Huck Finn on Estradiol

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Июнь 15, 2010

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10:06 am - Quality Improvement
In November of 2007, I wrote an entry making a number of predictions about the future. I periodically see it archived and linked on the internet as a "realistic" alternative to some of the doomsaying that was popular at the time, and since several of my claims were testable, I'm interested in revisiting them to see how realistic they ultimately were. To take you back, the post was written when Lehman Bros was a viable company, crude oil had never been over $100/bl, and the phrase "too big to fail" was a month old. The president was a man named George, but polls were showing a likely democratic victory the following year by frontrunner Hillary Clinton over her probable opponent, Rudy Giuliani.

I wrote in prose form, which makes it harder to extract specific predictions, but the strongest statement I made was that "we're probably, in the long view, two years into a five year collapse of the United States as a viable economic and political entity." Given the dates, that would set the timeline for decline from November 2005 (right after I read James Fallows' Countdown to a Meltdown which I've ripped off brutally ever since) to November 2010, which at the end of this coming long, hot summer. Obviously, four-and-a-half years into it all, we haven't come apart yet. But there are some more detailed claims I made that can be enumerated:

1) "The global shortage of petroleum is mostly going to unfold in the next decade" [Nov 2007 - Nov 2017] Whether this is true depends on how you define "shortage." Since 2005, global production has been pretty much flat. However, other than a wild spike in the summer of 2008, prices have remained fairly stable, suggesting that increased demand in some areas has been balanced by demand destruction in others. This means that although Chinese imports have gone up by 33%, someone in the developing world has given up their dream of delivering vegetables by truck. Or, more likely, building a new municipal water system or iron foundry. That this has happened without boosting prices is a result of the global economic recession, since no money to build that water system means no competition for oil deliveries. Overall I gave myself an enormous margin on this one (2017?) and the jury will have to remain out until then. For now: looks like a win

2) "Jobs will be harder to find" Unemployment in 2007: 4.6% Unemployment this month: 9.7% So, double. win

3) "Money will be scarce" Actually, US discretionary income is up slightly, from just under $30k per capita per year, to just over. And that's in 2005 dollars, too. Credit may be scarcer, and most of what actually functions in this economy as "discretionary income" is actually credit, but I didn't specify credit, I said money. fail

4) "Everything will cost more" Yes, prices have risen on virtually everything, but less so that you'd think. In fact inflation is down from where it was in late fall, 2007: 2.2% vs 4%. I'm going to call this a fail.

5) "People will have to move more frequently, often in with each other" I'm going to balk on analyzing this one for two reasons. First, this has been a trend for forty years, second we will get much better data in a few months once the 2010 census comes out. Not gonna guess.

6) "Population movement into cities that maintain close economic ties with other economies" I blew this one completely. Major international trade hubs aren't the big draws: tech hubs are. Austin, Charlotte, Raleigh, Denver and Dallas seem to be the big winners. fail

7) "Lesser concern for worker rights" The story here seems to be that there is no story here. Minimum wage is finally up, and a number of new industries (medical professionals, for instance) have won the right to unionize, but overtime is up too. So, who the heck knows. If anyone can find a good synopsis I'll post a link to it.

8) "Worse nutrition" Yup. Hunger and food insecurity are dramatically worse than they were. I won't wade into the obesity-as-malnutrition flamefest, though. Win.

9) "Lower life expectancy" Most recent data are from 2006 when it was still creeping upwards. Again, the census will make this much clearer. Still too soon to say

10) "More provisional local power structures" I'll come back to this for #14, but when I saw Idaho start minting its own currency even I was shocked. The presence of an enormous "states' rights" movement supports me as well. Win

11) "Gas could double in the US" It didn't. According to GasBuddy gas was $3.10 a gallon in November 2007, peaked at $4.12 in July of 2008, and fell back to today's $2.72 Fail

12) "Food prices will probably go up too... the corn, wheat and soybeans that form the basis of the American diet- and processed foods derived from these commodities will probably go up soon as well." Very much wrong. It isn't a single link but play around with this chart and you'll see. Corn and soybeans are significantly above their 2005-6 prices, but other than a spike in 2008 (that also affected beef and wheat) ag commodities in November 2009 were more or less where they were in November 2007. You have to use the same month, though, because annual harvests create predictable patterns, so I can't include the most interesting data point: since the start of 2010, beef has been going up enormously. If you start in 2005, this is a big win, but starting in 2007 its a Fail

13) "If you're considering growing your own complete diet, may I recommend buying in bulk, planting a couple hundred square feet with leafy greens and using the time you save to run for the school board?" Thank you, Texas Board of Education. You may have screwed up the education of a generation of American schoolkids, but you gave me a big win.

14) That question of the US collapsing as a viable economic and political entity... Look, so far I'm at five wins, five fails, and three I don't want to call. This subject, though needs a lot more detail.

The Big Question
First of all, the obvious. The US has not collapsed as a viable economic and political entity by any measure that, say, my dad would agree with. Our economy is mobile. Although the volatility index on the Dow Jones is up "in the red," its nowhere near where it went on October 2008. There's probably a bit of air in the lines, but nothing is occurring right now as dramatic as the big crash. Treasury bonds are still a hair lower than they were in November 2007, and nowhere near where they spent most of the Clinton years or Bush' first term, but again, in 2008 t-bond rates went way, way down, and are now on the road to redemption. (Treasury bonds are usually a null hypothesis for finance- where investors park their money when they don't trust profit-making corporations. When T-bond rates go up, it means the government is having trouble attracting buyers because there's other ways to make money.)

You can ask whether this represents the real US economy. Of course it doesn't- the stability in food and gas prices, and the vague increase in discretionary income are averages. When you combine them with high unemployment, you can infer either absolutely killer unemployment benefits (ha!) or else a growing wealth disparity where the unemployed have stopped eating well or driving very much. In economic terms, this is called "demand elasticity"- if there's less of something, and prices edge up (or your income zeroes out in a layoff) you decide to buy less of it, which brings the price back down again. Economically speaking it looks like stability, but if the "something" is healthy food, well, you're not exactly as stable individually as maybe you'd like to be.

The extreme form of demand elasticity is demand destruction, which I mentioned in the intro, where the poor actually get pushed off a cliff- sell their cars and top driving altogether. Primarily a factor in international markets, demand destruction is devil take the hindmost- the countries least able to compete economically for scarce resources, like oil or investment, reach a point of internal domestic turmoil, deindustrialize, and sell their infrastructure- factories, machines, old microscopes- for salvage. Like demand elasticity, demand destruction reduces the number of bidders at the table, and keeps prices down for the survivors. So far, the part of the US that is still employed is among the economic survivors. Sorry, Greece, Pakistan and Argentina.

Politically, also, we're doing somewhat shakily at home and abroad, and while the US continues to have an identity for itself in the worl, the US Democracy Brand doesn't mean as much as it used to. The riots in Thailand showed that an endorsement from Uncle Sam no longer outweighs the value of domestic legitimacy- Abhisit came to power in a coup, he's convenient to us, and thirty years ago that would've been enough. Now, its undermining the stability of a major industrial client state. Conversely, Hamas won an election but we refuse to recognize them- and yet no-one can make them go away. There have been a number of cocked-up elections since I wrote the predictions- Kenya, Ukraine, Russia, Zimbabwe, Georgia, Afghanistan- where Brand Democracy has been unable to shame the less-plausible victors into anything weaker than a power-sharing arrangement. Again, thirty years ago this would have been due to the countervailing influence of Team Communism, but today there's no superpower enemy- we're losing these fights to gangsters and community organizers.

I expect this will be a long, hot summer, bad between the solstice and the equinox, then desperate between the equinox and midwinter. There are a number of burgeoning issues- municipal bond instability, instability in the EU, that nasty little cataclysm in the gulf- piling into a system that is already a bit wobbly from the past three years of trouble. I will reevaluate in November, to be absolutely precise (and to give myself the longest possible opportunity to come right) but to be honest, I doubt this prediction will be literally true, even by then. not looking good

However, I plan to write a new prediction too...

Also, to re-underline what was probably the point of the original essay, the "collapse of civilization" isn't the coolest six months ever, followed by utopia- that's a video game. Nor is it when everyone you despise drowns in their inadequacy- that's antisocial personality disorder. The "collapse" is the sort of thing that shows up in anxieties and statistics for years before anyone realizes that their world has significantly altered, and when they do realize, they've already learned how to get by and take the new normal for granted. We're already there, we're already living it, and still our values don't allow us to stockpile shotguns and blow away any neighbors who look too long at our garden patch. Its a good thing.

Also, I'm considering a move to wordpress, and if I go, I'll probably import all the most important posts I've written. Do people have nominations? I will also probably come up with a new position paper, synthesizing all the ideas I've had since beginning this journal a gazillion years ago. I feel like I still come up with new perspectives and things to get curious about, so nothing should be considered My Final Manifesto, but it would be interesting to get it all in one place.

(3 комментария | Оставить комментарий)


[User Picture]
Date:Июнь 16, 2010 03:29 pm
When did your career as a futurist begin, and when can we get you a tweed jacket to wear during your Discovery Channel interviews? I particularly liked the show where they said that relatives of octopi would be living in trees in a million years. Tree octopus.

No but I am being silly. Still love reading your work!
Date:Июнь 16, 2010 04:02 pm
Uh, that's a huge hydrostatic problem there. They don't have, like, skeletons.

So, about futurists:

1) Ray Kurzweil fears his own mortality, and is crazy

2) Everyone else is projecting their own fantasies onto a screen called "truth"

3) Yes, that includes me.
[User Picture]
Date:Июнь 16, 2010 04:05 pm
Oops! My bad!

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