[Soft_Landing]

Just an observation.

Disclosure: I'm a Liberal (or non-Liberal in the non-US sense).
I have read some comments about peak oil (sorry forget refs) where people claim that one of the problems with peak oil is that the reserves data of companies and countries is so hidden that the free market wont get the signals it needs to prepare in time. Perhaps the free market could handle oil peaking if prices rose early enough, prior to 50% depletion, as a result of scarcity being signaled clearly. But the market is likely to continue assuming oil is not in supply threat until it is obvious (i.e., too late).

I haven't ever been too interested in politics until the last few years. This journey with GWB has made me sick, however. I now freely identify with one side of politics.

GW's administration is perhaps notably two things. One, Laisez Faire. The free market will work everything out. Two, clandestine.

Hey, that's a pretty bad contradiction. How the hell is the free market supposed to get anything right when the government is determind to keep information out of the marketplace?

Just a random idea. Thoughts?

[k_semler]

I would have to say that the conspiracy to the public runs very deep to many different levels. It first starts by petroleum companies mis-reporting the proven extractable reserves, the recent Shell debacle is only an actual example of this. I have no evidence that other companies are misrepresenting their stated proven reserves, but considering the corporatist nature of the modern industrialized world, I have very little doubt that this takes place.

Next, the companies which mis-represent their proven reserves report their figures to the chairman of their country's energy board, which in turn inflates the figures a certain amount to further advance their quota rates for OPEC. Many different countries do this, and report their results to OPEC.

OPEC, assuming that the energy data being reported is valid, decides to inflate their quoted reserves extractable to ease customer relations, and to further delay the transition to alternative fuels. OPEC, in combination with other petroleum producing nations are asked by the IEA about their energy reserves.

Once these figures are reported, the IEA only assumes that the figures reported are factual, and decide to slightly inflate their reserve amounts to make the reserves appear more plentiful then they actually are.

The USGS, inquiring about the amount of oil available worldwide from the IEA, gets the results of their inquiry, and assumes that the stated reserves are actually provable. As a result of this, the USGS decides to slightly inflate the reported data. This is demonstrable by the current difference in IEA figures versus USGS figures.

The DOE chairman inquires about the worldwide reserves from the USGS, and assuming that the rests of the inquiry are factual, decides to inflate the figures slightly. This is to ease the president's mindset about the current looming energy crisis.

The president, when inquiring the DOE about proven energy reserves is given a figure he assumes is factual, and decides to inflate the figures slightly. He then assures the country's populous that we have enough oil to meet current demand for another 60 years at current consumption rates. The DOE and USGS adjust their figures to reflect the reported reserves by the president to maintain some image of consistency.

The average American, believing the accuracy of the president's reporting of the energy situation, fails to seek action to transition to renewable sources because of the "endless supply of oil". Since the public has been appeased, there is little motivation economically to pursue alternative energies, or reduce their consumption. In fact, there is reason to consume even more, with the arrival of the "good news" of the current energy situation. Hence the current situation or Peak Oil.

Although a little fudging of the numbers at only one step is fairly harmless, by the time the figures go up through the reporting chain, the final reported reserves to the public are so inflated that they have very little bearing on reality. As a result of this, the average person is not aware of the impending situation that faces us as a civilization, and takes no action that would result in the continuance of their current style of living.

Once in a while, the actual figures are reported by independent agencies such as the ASPO as closely as possible, yet the public does not believe the "new" data because they are virtually alone in their reported figures. As a result of reporting as close to the truth as possible, and having no major company, organization, or government backing their reported data, the consumers dismiss ASPO as a "scare-mongering fringe group", and ignores the factual data being reported.

Corporatism is a great thing, isn't it?

[tkn317071]

Makes perfect sense to me. The corporate/capitalist lords do whatever they want to get more. More money, more power, more control, more ___. If lassaiz faire is what they need, lassaiz faire is what they do. If secrecy and obfuscation is what they need then that's what they do. It's not like the media or the opposition is going to do anything about it.

[Soft_Landing]

That's a nice tale K, have you considered writing a dark comedy? Alternatively, if you added a love story and some dancing, I'm sure you could turn it into a Bollywood musical

[pip]

I am an engineer involved in long range planning for a major oil company. How long before they let me in on the big conspiracy? How high up do you need to be to be in the conspiracy?

Just asking because I don't see it from where I am and have little experience in conspiracies.

[Aaron]

When you are in charge of interpreting seismic survey data...

[smiley]

$this->bbcode_second_pass_quote('', 'I') am an engineer involved in long range planning for a major oil company. How long before they let me in on the big conspiracy? How high up do you need to be to be in the conspiracy?

[tkn317071]

Smiley, I think what you're referring to is something a professor of mine referred to as systemic distortion of information. Information that flows to the top decision makers is systematically biased to favor the organization, information that could harm the organization is systematically weeded out.

But when it comes to the current administration, I don't think that is all that is going on. I'm sure it does to an extent but everything I've seen suggests something much more sinister.

On second thought, the Project for a New American Century pretty much stated frankly that world domination is the goal to be attained. Maybe they're honestly convinced that that is the best thing for the world and any suggestions to the contrary are just summarily ignored.

[DenisClapstyx]

The pollution emission issue and natural resource depletion rates are inextricably linked and caused by fundamentally the same flaw in the present market structure which causes the current situation.

Free market economics presumes full information, so that the market via the consumer can allocate scarece resources in the most efficient possible manner.

To this point the market does not offer information which correctly values products because of the accounting error / understatement caused by historical cost reporting. Put simply this only attaches value to assets that have a recorded price. Natural resources however, which supply the entire economy, have no creation cost and therefore no recorded value. Where a value does exist it is less than the replacement cost. As a result the rate of consumption exceeds the regeneration rate and you create a market bubble as great as the understated values.

Enough of an accounting / economics lesson.

The only way to overcome this error is to create a second measure of value / cost, that the consumer can use to determine if the resources are being allocated in the best possible way.

This measure is called the resource input : output ratio.

For instance paper has a ratio of 92:1. That is to say that one sheet of wasted paper actually wastes 92 times its own weight in resources that were used in its manufacture. The higher the manufacturing refinement the greater the waste if the product is wasted or wasteful and the greater the amount of energy inputs and emissions involved in its production.

The market solution is to begin labelling products with this information.

This allows the market to choose the most efficient manufacturer therefore rewarding eficient manufacturing technologies and products, and allows the consumer to reduce their emission responsibility by deciding on balance which products really arent worth the cost to the earth ie those with a high ratio that are marginally useless.

By eliminating the most wastefully produced products from the market resource consumption and emissions will begin to fall in an ordered way according to what environmental cost the market will accept.

Natural resource prices will experience lower demand, making the products that people are purchasing out of preference simultaneously cheaper to the consumer and more efficiently produced over the long term.

Efficient manufacturing technology is seen as the answer, this way the market will reward those manufacturers that do thereby utilising the power of the profit motive to speed the pace of change to a sustainable economy, at the rate at which the consumer demands it to happen.

Every product costs the earth..the end consumer needs to know how much so that they can work out if its worth the cost.

Most people can look at a sheet of paper and imagine it as a pile around 90 times bigger.

[americandream]

Oh yeah, and who's going to stand around reading all this windy bumph, with all we have to do to pay the rent. Get real pal.

[Laurasia]

I think it sounds like a good idea, since many of us already read existing labels (at least sometimes!!). The info could be incorporated along with the calorie value, fat content, etc. of the food. It could even be used as a marketing tool to appeal to discerning consumers (and with hard times a-coming, those are probably going to be on the increase).

Thank you for your post, DenisClapstyx, and welcome to the Forum.

Regards,

L.

[emersonbiggins]

Free markets and natural disasters:
CAN they go together?
A $60 hotel room in southern Louisiana might be worth $400/night currently.
A $1 bottle of water might be worth $15 for people who've had nothing to drink for 48 hours.
A simple PB&J sandwich might be worth $25 to a starving man.
$3/gal gas might be worth $30/gal in NO right now.

How would free markets handle disasters? Mass starvation & plagues? Roving masses of bandits and renegades? Price gouging based on what the 'market' will pay?
My guess is all of the above.

[jaws]

The question is how would an unfree market react to the same conditions? There aren't more hotel rooms and p&j sandwiches. How do you select who gets them and who doesn't?

[killJOY]

"Free market"

"Unfree market"

Terms with no clear meanings.

Economics gobbledygook.


Worse than "literary 'theory.'"

[jaws]

Here's an article explaining why price gouging in disasters saves lives. Quoting an example:
$this->bbcode_second_pass_quote('', 'W')ell, let's consider ice. Before Charley hit, few in central Florida had stocked up on ice. It had looked like the storm was going to skirt our part of the state; on the day of landfall, however, it veered eastward, thwarting all the meteorological predictions. After Charley cut his swath through central Florida, hundreds of thousands of central Florida residents were unexpectedly deprived of electrical power and therefore of refrigeration. Hence the huge increase in demand for ice.

Let us postulate that a small Orlando drug store has ten bags of ice in stock that, prior to the storm, it had been selling for $4.39 a bag. Of this stock it could normally expect to sell one or two bags a day. In the wake of Hurricane Charley, however, ten local residents show up at the store over the course of a day to buy ice. Most want to buy more than one bag.

So what happens? If the price is kept at $4.39 a bag because the drugstore owner fears the wrath of State Attorney General Charlie Crist and the finger wagging of local news anchors, the first five people who want to buy ice might obtain the entire stock. The first person buys one bag, the second person buys four bags, the third buys two bags, the fourth buys two bags, and the fifth buys one bag. The last five people get no ice. Yet one or more of the last five applicants may need the ice more desperately than any of the first five.

But suppose the store owner is operating in an unhampered market. Realizing that many more people than usual will now demand ice, and also realizing that with supply lines temporarily severed it will be difficult or impossible to bring in new supplies of ice for at least several days, he resorts to the expedient of raising the price to, say, $15.39 a bag.

Now customers will act more economically with respect to the available supply. Now, the person who has $60 in his wallet, and who had been willing to pay $17 to buy four bags of ice, may be willing to pay for only one or two bags of ice (because he needs the balance of his ready cash for other immediate needs). Some of the persons seeking ice may decide that they have a large enough reserve of canned food in their homes that they don't need to worry about preserving the one pound of ground beef in their freezer. They may forgo the purchase of ice altogether, even if they can "afford" it in the sense that they have twenty-dollar bills in their wallets. Meanwhile, the stragglers who in the first scenario lacked any opportunity to purchase ice will now be able to.

Note that even if the drug store owner guesses wrong about what the price of his ice should be, under this scenario vendors throughout central Florida would all be competing to find the right price to meet demand and maximize their profits. Thus, if the tenth person who shows up at the drugstore desperately needs ice and barely misses his chance to buy ice at the drugstore in our example, he still has a much better chance to obtain ice down the street at some other place that has a small reserve of ice.

Indeed, under this second scenario—the market scenario—vendors are scrambling to make ice available and to advertise that availability by whatever means available to them given the lack of power. Vendors who would have stayed home until power were generally restored might now go to heroic lengths to keep their stores open and make their surviving stocks available to consumers.

[emersonbiggins]

$this->bbcode_second_pass_quote('jaws', 'T')he question is how would an unfree market react to the same conditions? There aren't more hotel rooms and p&j sandwiches. How do you select who gets them and who doesn't?

[jaws]

$this->bbcode_second_pass_quote('emersonbiggins', 'T')he unfree market is currently providing:

Rescue at no cost to end user.
Military protection at no cost to end user.
Aid at no cost to end user.
Medicine at no cost to end user.
Food at no cost to end user.
Lodging via SDome, ADome & 'tent' cities (coming soon) at no cost to end user.

Basically, pure socialism in a nutshell, for better or worse. When I say 'no cost', I mean that the costs are weighed against the entire country's ability to pay through taxes and donations.

[emersonbiggins]

$this->bbcode_second_pass_quote('jaws', '
')If there was more gouging there wouldn't be long lines and shortages in Mobile right now. People would have got barely enough fuel and food they need to move on to the next city and no one would be trapped in Mobile.

[emersonbiggins]

$this->bbcode_second_pass_quote('jaws', 'T')hat's charity, not socialism. Free market charity is also providing the American Red Cross mobilization which will provide massive amounts of aid.

[killJOY]

Isn't it nice when economist bean counters get to set their own parameters?

Who's to say it wouldn't transpire like this:

$this->bbcode_second_pass_quote('', 'R')ealizing that people are desperate to preserve food and ice down their injuries, thus increasing the demand for ice; and also realizing that with supply lines temporarily severed it will be difficult or impossible to bring in new supplies of ice for at least several days, he realizes he can charge any goddamn price he pleases--as long as the cash is in their wallets--say, $15.39 a bag.

Now customers are not only hot, hungry and injured, but pissed. They will do whatever they have to to get available supply. Now, the person who has $6 in his wallet, and who had been willing to part with it for one bag of ice to put on his daughter's swollen ankle, is fucked. Some of the persons seeking ice may decide they have a large enough reserve of dog food in the debris pile where their homes used to be that they don't need to worry about starving to death. They may forgo the purchase of ice altogether, even if they can "afford" it, because they'd eat dog food before they give that son of a bitch their money. Meanwhile, the stragglers who in the first scenario lacked any opportunity to purchase ice will now be able to--except that the automatic teller machines are down, they can't get any cash, and their kid is hyperthermic. but they could always submerse him in the malarial waters outside their door to bring down his body temperature.

Note that even if the drug store owner guesses wrong about what the price of his ice should be, it doesn't matter, as throughout the area he's the only one with a store open, and so he doesn't need to worry about other vendors who would all be competing to find the right price to meet demand and maximize their profits. Thus, if the tenth person who shows up at the drugstore desperately needs ice and barely misses his chance to buy ice at the drugstore in our example, he can beat the vendor to death with a two-by-four, take all the ice, and distribute it to those in need.