Peak Oil is You
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Page added on September 7, 2012
Fracking the U.S. economy isn’t working
The concept of peak oil holds that at some point the maximum recoverable supply of fossil fuels will be reached, and production will then enter a dramatic decline.
Recent technological advances in fracking have pushed back the peak, and future improvements in production may make peak oil it irrelevant to any living politician or regulator. After all, naysayers have been predicting the end of oil since at least the middle of the 20th century.
In contrast, efforts of central bankers and politicians to frack the U.S. economy to yield more jobs are failing miserably.
As Miller Tabak’s Andrew Wilkinson noted Friday, the number of employed Americans is down 4.7 million from the payrolls peak in Dec. 2007.
And at the current rate of 94,000 jobs a month, reported in Friday’s non-farm payrolls data, it will take until the 2016 elections, just to replace those 4.7 million jobs. That won’t even account for increased population. Add to that that the replacement jobs are on the whole of lower quality and pay and it appears that the “new normal” of extended under-performance in the U.S. economy is here to stay.
But even worse, the amount of time it takes to recover the jobs lost in each recession is increasing. The 1980 jobs recovery took less than a year from the start of the recession, according to Wilkinson. The 1981-82 job recovery took about 30 months. The 2001 jobs recovery took 4 years.
So we’re very likely to start our next recession without even having recovered all the jobs lost in the last one, making for another big ratchet down in the number of employed Americans.
So, to torture the metaphor, unless someone figures out how to frack the U.S. economy better than with serial quantitative easing and targeted temporary tax relief, we’re likely to continue to see fewer and fewer Americans employed.
4 Comments on "Fracking the U.S. economy isn’t working"
BillT on Fri, 7th Sep 2012 11:03 pm
We have reached peak debt. The ‘growth’ of the last 30 years was put on the national credit cards. We are maxed out. We are now using one card to pay the payments on the others. The Fed is printing money and loaning to the banks to buy Federal paper. What a farce!
SOS on Sat, 8th Sep 2012 2:26 pm
Leadership failed, thats all. Facking the economy would be to open vast, and very rich, areas of Federal lands to development of the conventional resources there.
Fracking the American economy means building the Keystone pipeline.
Fracking the American economy means heavy investment to use the huge, generational supplies of NG. for electrical generation, transportation and manufacturing including steel. A lot of specilyt steel for oil development is now made in the US at brand new high tech steel plants.
Use all sources of energy sensibly. Dont use governement agencies as weapons against development, use them as partners.
Fracking the economy would mean a sensible approach to paying off the debt. If some want the rich to pay more so be it. Increase taxes in the middle and cut benefits for the lower end too. Everybody should bear this burden, or, we could develop our energy resources and pay the bill with no tax increases and full employment.
Use the enormous energy wealth now in the ground to fund the economy including social security and the national debt.
There is a proposal out there for energy independence for North America by 2020. That is the best way to frack the american economy.
Savvas on Mon, 10th Sep 2012 5:10 am
The comment from SOS above points to a number of very worthy initiatives and approaches to the challenge that the US economy faces. The real question however is not about doing what seems sensible. The real question is, what will such very sensible actions accomplish? I’m not at all sure that ‘energy independence’ is even remotely realistic for a country of 300M souls, all used to living pretty high on the hog compared to the rest of the world and now reliant on geologically ‘tight’ energy resources which, ‘though abundant have a serious problem with energy return rations! I’d really like to see a realistic plan rather than just fracking-based expressions of faith and hope! I’m in Australia when the ‘fracking phenomenon’ is just taking off and where we’d also benefit from such a plan…
Savvas on Mon, 10th Sep 2012 5:12 am
The comment from SOS above points to a number of very worthy initiatives and approaches to the challenge that the US economy faces. The real question however is not about doing what seems sensible. The real question is, what will such very sensible actions accomplish? I’m not at all sure that ‘energy independence’ is even remotely realistic for a country of 300M souls, all used to living pretty high on the hog compared to the rest of the world and now reliant on geologically ‘tight’ energy resources which, ‘though abundant have a serious problem with energy returns! I’d really like to see a realistic plan rather than just fracking-based expressions of faith and hope! I’m in Australia when the ‘fracking phenomenon’ is just taking off and where we’d also benefit from such a plan…