Copenhagen is concluded.
Hamlet's question has been answered with respect to Global Climate Change policy: not to be.
If Kyoto can justly be ridiculed as commitment without accomplishment, Copenhagen must be considered a step back from that.
I do not blame President Obama for this, as many are more than willing to do. The failure is so large that no one leader or nation can fairly bear it alone. The question is: where to from here?
I happen to look at the global issue from a particularly local perspective as anyone who has followed my earlier blogs may know. In 2004, I co-convened a workshop for municipal officials on the potential impacts of Climate Change on land use policy on the Connecticut shoreline. In 2005 and 2006, I unsuccessfully attempted to convince the State DEP Commissioner, who is now a Cap and Trade Commissar in the Obama administration, to continue at the state level what Guilford initiated. In 2007 I persuaded my Town government to pass a resolution recognizing Climate Change impacts as a subject requiring Town assessment, planning and management. Little has happened since passage of that resolution, but at least we have the paper. After two attempts in the state legislature and with the aid of State Senator Ed Meyer and State Representative Pat Widlitz, the Legislature required the Executive Branch to do what the previous Commissioner of Environmental Protection declined to do at her own initiative: study the possible impacts of Climate Change as they might relate most specifically to the State of Connecticut.
This week, as the world was dithering in Denmark, Connecticut's Governor's Steering Committee on Climate Change released its first draft reports on impacts and adaptation. Although much work remains to be done in developing measurement and reporting regimes to gage Climate Change progression from this time forward, and to define relevant contingency plans and the resources to execute them at the state, regional and municipal levels, these reports are an important first step in the education process that must take place among the general citizenry and its leaders, most of whom remain ignorant or mis-informed by myth and dogma on the issue.
But the utter failure, and I don't think that is too harsh a term, of Copenhagen makes local initiatives all the more challenging, if not impossible. So where do we go from here?
Let's start with the Climate Change contingent's battle cry: 80% by 2050. This benchmark apparently got all but flushed in the Copenhagen Accord and the collateral drafts that have apparently been denuded as badly as our health-care reform legislation. If we do not have a credible and universally understood and accepted goal, how can we possible build a bridge to it from here? Apparently, it is a 'bridge too far'. And in its absence, what?
It has been my contention in previous blogs that 80% by 2050, if credible, imposes daunting challenges to re-engineer civilization as we know it. The proponents of this goal have so far failed to move the great mass of the uncommitted to accept this goal as necessary on the premise that failure to achieve it is unacceptable. And Al Gore doesn't cut it as the cross-over messenger to the uncommitted, no offense meant to Al.
The Deniers and Skeptics have argued that the cost of achieving this goal will be too great, while not effectively calling to question the validity of the goal itself, except by denying the entire premise of Climate Change, which makes them look mildly silly. They are partly correct that the costs of achieving 80% by 2050 will be huge. What they have not done is to identify the costs of Business As Usual, which will likely dwarf the costs of mitigation and adaptation in the intermediate to long term. Again, this truth is more readily grasped at the local level than at the global level.
What both sides have failed to do is to identify the potential benefits on multiple social, economic, health and political fronts of moving the world toward 80% by 2050. Deniers and skeptics are viewing the challenge of 80/50 from the mindset that the status quo is sustainable by some means. Until we recognize the futility of this premise, and the opportunities of an alternative, there will be little mobilization toward that alternative. That is the great failure of Copenhagen, but not its only failure by any means.
* * *
If Copenhagen's communal rancor produced nothing of substance, it did succeed in bringing competing agendas to the fore, perhaps as never before. In so doing, it created the opportunity for future unintended consequences, some of which might actually be beneficial.
Let's take the issue of equity for under-developed countries and the related issue of financial aid for climate and energy transition. Much has been stated of the developed world's obligation to the less developed, but what of the obligation of the less developed to themselves and each other?
Many of the less developed nations that face risks of climate change are in the cross-hairs of the developed and developing economies (China) in a resource scramble that is currently under way. This gives the developing countries with resource base the opportunity to secure their own transition by bargaining wisely in the trade of natural or economic resource for financial resource. To the extent that they are sufficiently endowed with natural or financial resource, as in the case of the Saudis and China, there would seem no rational claim on the developed world.
As for those less fortunate nations without adequate resources but with more than modest environmental challenges, the next hurdle should be one of political transparency and accountability. While on the one hand it would be naive for developed nations to presume to transform other societies, the process of transferring wealth to achieve humanitarian equity should not be a one way, blank check proposition. It should be an explicit condition that the granting of aid to nations for Climate Change survival shall be predicated on their political openness and acceptance of accountability and oversight in applying the funds to the intended purpose. This applies the Rahm Emanuel theory of 'never letting a crisis go to waste' to achieve multiple goals.
China is a special case. While the United States has appeared to approach China as a supplicant rather than an equal (our illusion of 'super power-dom' is ringing a bit hollow these days), the imperatives of Clim-Ergy give us unique bargaining power, if we use it wisely.
The first challenge is to strip China of its pretense of being an under-developed country. On the basis of its accomplishments of the past ten years, its importance in international financial and economic paradigms, and its future potential, it has lost its virginity, so to speak, and its pretense of an underdeveloped country. President Obama made an important first step in his call for transparency and accountability. Next, he must engage all developed nations in 'calling out' China to assume its role of responsibility and accountability in the community of nations.
China is a nation still struggling to find its place and its identity. Ironically, so are we, for different reasons. Clim-Ergy presents us both with an opportunity and an inescapable challenge to reconcile our separate selves with a shared reality.
Meanwhile, back in the US of A, we have daunting challenges and, equally magnificent opportunities.
We have a sprawled environment which is inefficient economically and logistically, and psychologically degrading and counter-productive. If we rebuild our communities to be denser, more amenable to public transportation, we can reduce and substitute the dependency on personal transportation, and suck a lot of the economic overhead out of our costs of living and doing business.
Rebuilding our infrastructure and living structure to be more operationally cost efficient in the long run of an altered climatic and energy future creates a paradigm for economic sustenance and sustainability that our current consumer oriented culture has not and will not provide.
Building a robust internet that can substitute communication for transportation wherever feasible; that can bring the doctor and the teacher to the home; that can allow mother and father to be at home and working when feasible; that can be extended to all to assure universal access and opportunity, and in so doing can create the platform for added economic opportunities. That is an investment, not an expense, in dealing with the challenges of Clim-Ergy that will likely have multiple paybacks.
Downsizing from Mc-Mansions on undersized lots or remote mini-Ponderosas to denser development around parks and open spaces can create for the individual and society a different but better sense of privacy and spaciousness in an economically and environmentally more sustainable paradigm.
It is somewhat surprising that more voices of business have not risen in chorus to sing the opportunities of Clim-Ergy rather than cry its risks to their status quo. Where are the entrepreneurs? Where are the risk takers, besides T. Boone Pickens? They are cowering in their individual silos of uncertainty, rather than collaborating in a consensus of mutual well-being, not only for themselves but for the consumers they profess to serve. We have an incredible opportunity before us to deal with an incredible challenge.
So, once again, where to from here? President Obama must lead in rhetoric and deed. He must first set out for the American people in explicit terms the climatic and energy future we face, and our alternatives in dealing with it. He must propose a 'best alternative' in the same way he did with Afghanistan (irrespective of whether you agree with that decision). He must prepare the American people for that decision through a similar process that he prepared them for Afghanistan, bringing together a high council of economic, energy and environmental interests and authorities to hammer out a sensible consensus, and not a consensus of convenience. He should announce the beginning of this initiative in his State of the Union address, with the intent of addressing the nation on July 1, 2010, before Independence Day weekend. From that point on, he should bend the federal budget wherever possible to supporting the Clim-Ergy agenda, and encouraging business and state government to follow. His stimulus strategy has embodied some of this intent, but without an explicit definition of the need and the goal. This must change.
The alternative is policy entropy: defined by Webster as 'a process of degradation or running down or a trend to disorder', which is already well in progress.
We have choices, and our choices have consequences. But continued dithering will steadily diminish our opportunities to choose wisely.
Onward.
If I were poetically or musically gifted, this blog would glide to the cadence of Arlo Guthrie's 'Ridin On The City of New Orleans'. But I'm not so gifted, so you're stuck with my stilted prose.
Nonetheless my recent ride to New York City from New Haven on Amtrak's Acela summoned the same wistful, mournful tones of Guthrie's ballad, with perhaps a touch of irony borrowed from Peggy Lee's 'Is That All There Is?'.
I normally take the Metro-North commuter line into New York. Slower, but much less expensive. Today I was meeting someone from New London on the way in, so it was the Acela.
The sleek frame glided quietly to the platform at New Haven's Union Station. It's tarnished aluminum skin somewhat diminished its high-tech aura, and suggested the all-too-familiar neglect of routine maintenance that has fostered three trillion dollars of crumbling infrastructure in this country begging for deferred maintenance. Once aboard, the seats were comfortable; the ride, smooth and quiet, but slow. This too was no surprise, as the Acela's performance in the Northeast Corridor was long recognized to be sub-par due to the fact that in many sections the tracks were not modified to support its potential. So, once again, we have the image of high tech masking a culture of managerial mediocrity. No Japanese or French bullet trains for us. We'll just do it on the cheap, yet again, and get by on image.
I did not get to New York much faster on the Acela, but at four times the cost.
* * *
Then, why is it that President Obama wants to build a system of regional express rail lines? Certainly, it is not based on the underwhelming performance of the Northeast Corridor where the need is likely greatest.
I suspect that this is part of the President's 'stealth energy strategy'. I call it 'stealth' because I perceive that he recognizes fully the seriousness of the constrained energy scenario we face in the next few years, and for decades to come; but he is still reluctant to face it directly, or speak to it directly to the American people.
So he speaks of trains, and wind turbines creating green economy jobs, and smart grids freeing us from our 'dependence' on foreign oil. But nowhere does he come right out and say: 'Folks, we're headed into an energy Armageddon, not caused by the Arabs, but by global society's collision of its infinite demands with its finite resources. We're going to have to re-tool our society and our priorities to new realities.'
I can understand why he does not make such a statement at this time. There's only so much bad news the public can take without tuning him out, as so many have the evening news. Still, the problem remains, and a problem ignored will ultimately set its own agenda, as the economy has so dramatically demonstrated.
Where do express trains fit into all of this? As energy returns to $147 within the next five years, but this time for good and not as the result of momentary speculation, one could reasonably expect that the airline industry will become particularly vulnerable. It can sustain itself in the long haul routes for which there are no easy substitutes and sufficient customers to pay the ticket at some level of service. But for the commuter and shuttle routes, substitution will kick in wherever feasible.
You can't make a rubber band big enough or a lithium battery light enough or an extension cord long enough to power a 737 medium range jet in place of fossil fuels, but you can run a bullet train on the grid. And therein lies the Obama high speed rail strategy: not about rail, but about energy, and sustaining some level of economic normalcy through t-economic substitution.
The problem is, he cannot sell this stealth energy agenda to a skeptical, debt weary public. He must educate the public to the real threat, its magnitude, its complexity, and its proximity in time. He must link the reality of economic calamity from a business-as-usual approach to energy and the climate to an alternative strategy of hope and challenge in building a sustainable society with true quality of life, albeit striped of the excesses we have mistakenly come to regards as wealth. Without such a recognition of reality, the best we are likely to see is serial half-hearted, under-funded, mediocre measures much like the Northeast Acela.
* * *
It would be easy to despair of the future, given our society's capacity to embrace our mythology of our past deeds in preference to building a future on present accomplishments. But a few weeks after The Ride, I happened to watch an episode of Nova about the last mission to the Hubble telescope to retrofit it for the last time. Not everyone will necessarily identify their aspirations with a high-tech telescope, but I found in the program a source of hope. Here were a group of people, dedicated, resourceful, intelligent, courageous, committed to something greater than themselves, and succeeding under extremely high risk at something truly meaningful.
We have not lost the capacity for greatness. It is our to regain and grow, if we choose.
Onward.
The assassins are about. They're gunning for the Climate Change Conference in Copenhagen, and their weapon of choice is a 60 megabyte down-loadable file, courtesy of Murdock's Wall Street Journal, of hacked correspondence from the server of the University of East Anglia. Correspondence goes back thirteen years.
I have not read any of the items, nor do I intend to. The news stories reveal little of surprise or interest. It's not news that universities have in their midst high-strung personalities whose egos too often overwhelm their intelligence and professionalism, not unlike business and government. Nor is it surprising that researcher's might be tempted to cleanse the data of those pesky little anomalies that introduce niggling little doubts about their pet hypothesis, not unlike business and government. Nor is it surprising that Climate Change True Believers would want to exclude Deniers from the debate, much as Deniers have wanted squelch advocates. None of this is news, and none of it required an electronic breaking and entering to reveal known and knowable flaws in the debate. But one senses the fit and feel of another Swift-boat assault on the truth by the forces of ignorance and deceit, with the Birthers, the Tea-Partiers and the Palinista's bringing up the rear. The timing of this so close to the beginning of the UN Conference on Climate Change in Copenhagen is more than suspect.
Among the 'Professional' Climate Change community, there appear to be four distinct groups.
There are the True Believers who will find Climate Change in every manifestation of climate variance.
There are the Adherents who believe that accelerating Climate Change induced by human action is a plausible and compelling, if not yet conclusive, scenario; but who are also willing to consider flaws in their theories and process as a part of the scientific process of inquiry and independent verification.
There are the Skeptics who do not accept the premise of human induced climate change as a significant factor but keep an open mind, pending attainment of a compelling threshold of evidence.
And there are the Deniers who close their ears to any discussion of the issue; who seize the least little anomaly that runs counter to the theory and then use it as a club to beat the issue to death.
It might come as a shock to the Swifties that Climate Change was not manufactured by Al Gore. A physical chemist named Svante Arrhenius cobbled together the theory of the greenhouse effect and its likely impact on Climate back in 1908, roughly sixty years after the birth of the oil industry, and over 100 years after the beginning of the industrial revolution. Integrating the work of other scientists, but lacking satellites, ocean buoy monitors and a couple of main-frames, he calculated the probable relationship between CO2 emissions and atmospheric temperature. His projections turned out to be in error based on refinement of new techniques and a broadened based of information. But that's what science is about.
Interestingly, when one reads Arrhenius' biography, one can imagine him being the target of the Swifties for the very kind of professional behavior that they deplore in their opponents but which too many of them exhibit themselves: autocratic, vindictive, biased. Not exactly the traits of objectivity and independence that we like to assume of all professional scientists.
Equally interestingly, Arrhenius, the father of the Greenhouse Effect, anticipated that it would be a boon to humankind, partly because he grossly underestimated the progression of carbon emissions, population increase and temperature rise. In today's climate this would put him at least in the Skeptics camp if not the Deniers.
That leaves us with the 60 megabytes of stolen correspondence. I would not try to defend the apparent pettiness and arrogance that is purported, except to note that it is abundant at both ends of the political spectrum of this scientific issue. But the concerns expressed by some regarding the ability of their data to support a climate change hypothesis deserves some perspective. It must be incredibly difficult for serious scientists to perceive an issue which has a trajectory in time that will impact before we have the tools, the information, and the political consensus to act on it. That is the situation that confronts serious climate scientists of all persuasions. In the earlier days of the purloined correspondence, I imagine that Climate Change advocates thought they might be much closer to a silver bullet of definitive proof than they are now. Ironically, that's progress. They now better understand the true complexity of their challenge, and the inadequacy of their tools and base of information. This does not refute Climate Change; it merely establishes the remaining gap between hypothesis and proof: a gap for which time is not an ally.
The challenge to earth and environmental scientists in Climate Change was brought home to me in Sir Nicholas Stern's defense of his work on the economic impacts of Climate Change before a panel of economists at Yale in 2007, February 6. First, let it be said that Sir Nicholas' work was a heroic first effort to bring top-down perspective to tremendously complex topic. But it was precisely the complexity of the subject that was the Achilles Heal of his effort. As the panel of economists credibly argued, the study rested on tools of such inherent limitations, and assumptions and judgments of insufficient reliability to the conclusion as to jeopardize the structural soundness of the conclusion. A failure? Hardly. A vital first step in what must be an iterative process. I only hope that in a philosophical moment sometime after he descended the stage, Sir Nicholas had the opportunity to take satisfaction that he dared to put himself on the line to take that first step, and that in itself was a worthy accomplishment.
Business executives love plenty of data too. And nifty charts and graphs in Power Point presentations to make it all clear, so that they too can point at the pictures on the wall of their well appointed corporate caves, and grunt at the pictures, and take comfort in an often unfounded sense that they understand their world. But business executives, unlike scientists, are often confronted with the need to make decisions and take action based on partial or unreliable information and economic models; models, I might add, of systems that we have created and should therefore understand intimately, except we don't. (Capitalist True Believers such as Larry Kudlow should reference the financial meltdown of 2008-09 for illustrative examples. Capitalist True Believers such as Alan Greenspan have recently recanted in the face of irrefutable evidence that has been gathered at the price of near-economic disaster. An analogy, anyone?).
* * *
Too often decision makers and scientists take comfort in the precision of their data and the sophistication of their tools rather than the relevance and reliability of both. In auditing, especially in complex situations where one can readily lose the forest for the trees, or where there is no neat precedent for comparison, we often default to what we call a "reasonableness" test (sometimes referred to as the 'sniff test'). When all is said and done, when you take everything you think you know and shake it up and down, does it hang together, or are there still nagging doubts.
When I became chairman of a land use planning committee of shoreline community of Guilford, Connecticut in 2004, I convened a workshop for municipal officials on the impacts of Climate Change on land use policy in the shoreline. At that time I was open to the issue, but neutral. My motivation came from my experience on the Town's Planning and Zoning Commission in which some aggressive developers would seek to skirt environmental regulations whenever possible, and some of the more militant environmental activists would deliberately misrepresent facts to advance their particular environmental policy agenda. I didn't want our particular study to be captive of either faction. Therefore we convened, quite surprisingly, a panel of internationally known experts in a variety of fields to provide reasonable scenarios for Climate Change, and how they might relate to our particular 48 square miles of real estate in Guilford, and the Connecticut shoreline in general.
I emerged from the 5 hour workshop no longer neutral on the subject. I believed it to be a credible issue of sufficient magnitude to demand immediate attention. As a former auditor, my reasonableness test was based on the following information:
1. In the course of 150 years, we have consumed approximately one trillion barrels of conventional crude oil (roughly 1/3 of assumed reserves); half of that in the past fifty years. We have, in essence, released in a nano-second of geological time one third of projected conventional crude that has taken millions of years to sequester and create. A credible argument for human forcing of a system that has achieved its current stasis over thousands of years, with a few violent interruptions.
2. In the course of 100 years, we have pushed a planet beyond the 1.5 to 2 billion of sustainable population during the bulk of human history to 6.5 billion today, and 9 billion in 2050, adding the equivalent of another Ch-India, when we haven't figured out how to handle the two we have.
3. We know the chemistry of burning carbon based fuels. We know the physics of the Greenhouse Effect. There's no mystery to where past trends projected outward will take us in gross terms.
4. From a management perspective, there is no precedent to suggest that at this time we have either the information basis to effectively manage a global issue of this magnitude, complexity, and impact. Therefore, we can safely assume that there are greater probabilities of us dithering toward the more severe implications of the issue than of us taking timely and proactive action.
5. Whether humanity causes or exacerbates this phenomenon is secondary to its reality. When sea level rise consumes your shore-front Mc-Mansion, cause will take second place to effect for the owner and the community at large. Humanity's role, whether in causative or reactive mode, is secondary to the primary premise that the global 'ball' is in fact in play in a very different game.
* * *
Another important test for auditors is 'ground truth'. We are often provided financial representations of various kinds to opine on. An important test is to corroborate the information, the symbolic representation of truth, if you will, with verifiable facts on the ground: examination of inventory and physical plant for existence and condition; corroboration of valuations and balances with independent third parties, and so on.
In the case of Climate Change, my corroboration began three weeks after the workshop when a seasonal high tide of approximately one foot over annual average showed me graphically what my little piece of the planet could look like in 20 to 50 years. Once I saw the reality in proxy form, it was much easier to infer the implications, to project time-lines and possible impacts, to imagine the kinds of responsive action that my community might have to take, and its likely inclination to do so.
I believe in the compelling credibility of Climate Change. But as a former auditor, I also maintain a certain operational skepticism that constantly tests my assumptions for validity in the light of the ever constant flow of new information. Unlike the True Believers who would squelch the voice of the deniers, I often seek out the opinion of Deniers. Their point of view continues to reinforce my belief in the credibility of Climate Change, because their arguments are often so narrow and so weak. This is why I am continually amazed that the True Believers are so adamant in silencing the Deniers. You can't knock them out if you don't let them in the ring for the fight. And if you won't let them in the ring, does it not cast doubt on your own capability?
* * *
So here we are with a classic Swiftboat ad-hominem attack on the Climate Change scientific process by way of exploding the human foibles of a relative handful of participants into a damnation of all and the process they are associated with.
To be sure, the process could use much improvement. Among the changes I would decree if I were king would be the following:
1. The IPCC's periodic reports should separate the scientific assessment from the political assessment. Let the science speak for itself. Let the politicians translate it into achievable public policy. Let's not confuse the two.
2. The reports should report both consensus views and dissenting views. Only in this way can the general public begin to gauge what we truly know, and what remains to be known.
3. We need a more unified and directed approach to research which begins with up-front agreement between skeptics (not Deniers) and Advocates (not True Believers) regarding the priorities and methodology of studies and criteria of assessing results. Only in this manner can we begin to accelerate consensus and begin to focus on what needs to be done.
4. Much of what has been done in research appears to be 30,000 foot views of global processes. This is necessary, but it has limitations as Sir Nicholas' study demonstrated. We need more studies at the micro level that can build credibility from the ground up and demonstrate relevance of the issue to the average person through ground truths that they can more readily relate to. This has been my case in Guilford in the five years since the Climate Change Workshop. I believe it has value, although I must confess that many of our local officials have an incredible capacity for denial, even in the face of the obvious.
* * *
Much has been made of the alleged 'evidence' obtained through the electronic break-in. But apparently little attention has been given to the perps. Who are they? Who do they represent? What's their real motive? Where will they strike next? How much of the alleged evidence have they doctored, assuming the mere volume will minimize risk of detection; and does true evidence give undeserved credibility to the intermingled untrue 'evidence'?
The assassins of truth are about. Their crime is greater than the one they purport to expose. They too must be exposed. Or they will attack again. Until they are exposed, much less credence should be given to the credibility or relative importance of their 'information'. We cannot afford the luxury of being distracted from the Climate Change issue and its cousin, Constrained Energy.
Onward.
"The cynic knows the price of everything and the value of nothing", so spake Oscar Wilde.
Today, it seems, even the cynics appear challenged to put a price on, for example,....real estate, securities of financial institutions, depleting energy resources, food stocks, pro athletes and nursing home attendants, medical care and music, news and reality t.v. If price is the mechanism of rational allocation of resources in a competitive market economy, the collapse of various pricing mechanisms is yet another indicator of the cancer afflicting Capitalism.
Price is supposed to represent an agreement of value between buyer and seller, both of free will, and based on equal opportunity to ascertain the realizable benefit of the exchange. But too often in the current economy, price has become a weapon of deception. The mechanisms for setting price have been so tarnished by recent events that a fundamental tool of capitalism is rapidly being rendered impotent.
Let's consider real estate and other toxic assets in the current banking crisis. One of the many difficulties facing the resurrection of our financial institutions is isolating the toxic assets and exorcising them from the banks with an exchange of value that injects needed capital into the ailing institution and/or properly extracts from its balance sheet the loss reserves attached to these toxic tumors.
There are two problems here. One is the assumption of a static situation in which the tumors are knowable and are not metastasizing to currently healthy organs. The other is assigning a value that generates capital to the bank exclusive of the value of the asset, because the 'market-place' has so utterly mangled the assignment of value that price becomes nothing more than an arbitrary settlement.
We have lost a third of everything. Real estate value, portfolio value, earnings in many cases. Was that 'value lost', or 'value inflated'?
Even now, as employment crawls back, the stock market is attempting to will itself back to its pre-crash heights. Has our economic recovery to date justified the market breaking $10k? A market based on an economy which is 70% consumer based would seem to take its value from the state of employment, which by no means has bounced back to anywhere near the extent of the market. But our capitalist crack-heads will tell us that the market reflects future prospects. A future in which employment is not expected to return to pre-crash levels for four years. A future in which those who have jobs will feverishly de-leverage their personal balance sheets and make up for lost time saving for a retirement that is more distant. They are unlikely to support that 70% consumer economy, and the rest of the industrial economy that hangs off of it.
So fogetabout the US. We're investing overseas, where the real growth is. Yep. We're going to compete in parts of the world where Ch-India's cost structure and technology is a lot closer to their economic profile than ours. We're going into foreign markets with market intelligence equivalent to our intelligence in Iraq and Afghanistan. We'll sell them high tech gear their economy can't sustain, and fast food that's contributing to the growth of our health-care industry at home, which our economy can't sustain.
What can be said of an economic system that pays a pro-athlete $18 million to entertain our fantasies and indulge his own, and pays a nursing home aide $18,000 for work that is more socially meaningful, but not sufficiently valuable to provide a basic living for her family. Or $100 million to a financial crap-shooter who made billions for his organization at the expense of the world economy, and who can now afford to indulge his very own private art collection in his very own special castle. We have a corruption of values that should be criminal by any rational determination. But it's legal, at least for the moment.
As 'reality t.v.' grows in fulfilling our lust for voyeurism, and talk radio fuels our society's indulgence of ignorance and hatred, legitimate news media shrink or evaporate, lacking the necessary 'value proposition' to sustain themselves at an attainable price. Newspapers fold in competition with web based 'free' content, which isn't really free. It's paid for by advertising and loss of personal privacy. But even that business model is beginning to crack as advertisers discover that the Web is not a magic carpet to profitability. The infinite marketplace is littered with infinite distractions. Where will Google's price-multiple be in five years? What happens when people wake up to the fact that it's just another corporation?
Airlines have become subways with wings. Their 'competitive pricing' is little more than crude manipulation of the consumer with ever changing structures designed to confuse the unwitting rather than to compete on value.
Coal is 'cheap' because it is not required to pay for the responsible management of its own waste, and the consequences of its pollution. Its price does not cover its true economic costs. Oil is cheap because we price it to push it through the consumer distribution pipeline in three months, and not to conserve a depleting resource for the long term.
We are seduced to sign up for the cable t.v. package or cell phone service at the special price that lasts for three months; but try to find the website that will tell you the price in month four. Why is that? Does this oft repeated ploy demonstrate anything but overt contempt for the intelligence of the consumer? And yet, we consume, because in truth we have few real choices among the competing purveyors of anything, who seem to compete too frequently only in deception, and not in value.
Capitalism has become like an unruly teenager, discarding any sense of responsibility to anyone but itself, and indulging its excess with no sense of consequence. It has built itself an economic hot-rod, but not the good judgment to operate it responsibility. As too often happens with irresponsible teenagers and their over-powered vehicles, Capitalism could conceivably collide fatally with reality. And, as too often happens with irresponsible teenagers, it could take with it those who came along for the ride, with little thought of the possibility that their fate was at risk.
Concerted Procrastination is an accepted and well worn decision-making practice among senior executives in all venues -- government, business, NPOs. The theory is that, if you can wait long enough, difficult problems will resolve themselves when all options have been reduced to the worst one by default. Then the 'decision' is inevitable, and often unarguable.
I,too, though not a senior executive by any means, have practiced it on occasion, most recently in relation to forming my personal opinion on the efficacy of the Government assisting the US auto industry to a soft landing.
It seemed imprudent, if not irresponsible, to advocate pulling the plug on the US auto companies without having some credible sense of the collateral damage that might ensue, and a strategy to deal with it. Mind you, I am not so concerned about the auto companies themselves as the consequence of their failure to others dependent upon them but not responsible for their self-inflicted wounds.
But today my dilemma was resolved with news that GM has built into its taxpayer financed recovery plan the intent of importing cars to the US from its Chinese plants. Granted, the number of units are immaterial over the first three years. Just as the cost of corporate jets to fly its former CEO to Washington was immaterial to GM's financial situation when it begged Congress for deliverance. But to conceive this as an element of its recovery, while it triggers the demise of its own employee/taxpayers suggests such terminal institutional stupidity that it is clearly beyond rescue.
Pull the plug. Walk away. And be sure to turn out the lights on the way out the door.
R.I.P. G.M.
Onward