Chris Martenson - The Crash Course

[Don]

The Crash Course (http://www.chrismartenson.com/crashcourse) is a video presentation that relates the three E's, Economy, Energy, and Environment, and explains in an engaging and concise manner what we may face over the next few years.

This is an attempt to tie together elements such as Peak Oil, aging demographics, monetary policy, and climate change into a cohesive package, and determine where the convergence of these elements is likely to lead.

A 10 to 15-minute investment in the intro and first three or four sections will let you get your toes wet without drowning. The sections on exponential growth and compounding bring a viewpoint to the table that doesn't get much exposure.

Is anybody familiar with his work? I'm looking forward to digging deeper into some of the issues he's raised.

[Plot Device]

Okay, Don, I will check it out! :)

[/wants to be first poster to reply]

[Don]

Did anybody else ever check this guy out?

[Plot Device]

Don,

I want to apologise for forgetting about this thread. But today I finally watched ALL of the Chris Martenson series. It was an effortless thing to watch if you just set it on "auto-play" and let her rip.

Here's MY preferred link with the "autoplay" built right in.

http://www.youtube.com/watch?v=I0WuQ5-t3xM&feature=PlayList&p=7E8A774DA8435EEB&index=0&playnext=1

Amazing!

This guys is mind-blowing, and we are effed. We're effed beyond all effs. We're so screwed it's dumbfounding.

Screwed, screwed, screwed.

And the thing that's even MORE amazing is that he did this whole series WELL before the current meltdown.

[darkprincealain]

I think a lot of people don't get this mathematical concept of compounding. He's very good at explaining it, and a smart man.

I just hope there are some really smart people that can identify what changes, corrections and adjustments need to be made to adapt us to the things we'll be facing shortly.

[Plot Device]

I think a lot of people don't get this mathematical concept of compounding. He's very good at explaining it, and a smart man.

I just hope there are some really smart people that can identify what changes, corrections and adjustments need to be made to adapt us to the things we'll be facing shortly.


I agree wholeheartedly on all counts.

However, IMO it all comes down to Keynesianism vs. Austrianism.

For anyone who isn't sure what that means, to draw an analogy...

--The world of psychology is (for the most part) divided up into Freudianism vs. Jungianism.
--The world of Christianity is (for the most part) divided up into Calvinism vs. Arminianism.
--The world is Islam is (for the most part) divided up into Shiite vs. Suni.

And ... the world of economics is (for the most part) divided up into Keynesianism vs. Austrianism

The prevailing bias in Ameriacn business AND American government leans heavilly toward Keynesianism --and it has for over 50 years now. And Keynesianism has always been the justification for the fantasy called "endless growth" which has now gotten us all into ths fine mess. But I say the only reason it's all "worked" thus far for the Keynesian camp is the utter coinicidence of 100+ years of a petroleum bonanza. (And that is now ALL coming to an end.)

Meanwhile, when Obama was appointing his staff, I was desperately hoping he would appoint AT LEAST ONE Austrian economist. But no. Every last Obama appointee is a Keynesian. And right now, all of Obama's stimulus goals are driven by these flawed and insane Keynesian assumptions. And no one is drawing the connection (at least publically) between a soon-coming and permanent dearth of oil with a soon-coming and permanent demise of our economy. Instead the Keynesian fantasy will continue under Obama.

We're doomed.





.

[Don]

While Chris Martenson does a good job of summarizing the overall situation, the Austrian view is nothing new, just widely ignored.

It's ignored for good reason, since Austrian economics shows that meddling in the economy always means a loss in net goods to the society, while politics is based, in large part, on meddling in the economy. This quote from Economics in One Lesson (Henry Hazlitt, 1946) explains that stance in a nutshell.

In this lies almost the whole difference between good economics and bad. The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.

Here are links to a number of good reads in PDF format, although you can find HTML versions of most of these as well.

If you haven't read it, I highly recommend I, Pencil (http://www.commonsenseeconomics.com/Readings/I.Pencil2006.FEE.pdf?nid=316) (Leonard Read, 1958) as a very short intro to free markets. It's only 16 pages. For deeper study, I'd recommend Economics For Real People (http://mises.org/books/econforrealpeople.pdf) (Gene Callahan 2002), Economics in One Lesson (http://www.hacer.org/pdf/Hazlitt00.pdf) (Henry Hazlitt, 1946), and What has Government Done to Our Money (http://mises.org/books/whathasgovernmentdone.pdf) (Murray N. Rothbard, 1963).

[GeorgeK]

We're doomed.

.

That's why for decades I've been working toward getting a self sufficient luddite style farm going, and everyone laughs saying the fears are unfounded. I've even devoloped a strain of peppers that will propagate without bees.

[robeiae]

And ... the world of economics is (for the most part) divided up into Keynesianism vs. Austrianism

Uhhh...NO. It's not.

It only seems that way because Austrian school people like to claim any economist that disagrees with Keynes as Austrian.

Right, Don?

[Plot Device]

That's why for decades I've been working toward getting a self sufficient luddite style farm going, and everyone laughs saying the fears are unfounded. I've even devoloped a strain of peppers that will propagate without bees.


Awesome! :)

[Plot Device]

Uhhh...NO. It's not.

It only seems that way because Austrian school people like to claim any economist that disagrees with Keynes as Austrian.

Right, Don?


Two things in defense of the way I chose to word all of that:

1) I wanted to super-streamline the entire analogy, so I went for an admittedly over-simplified yin and yang sort of presenttaion of having JUST two opposing sides in each example, concluding it all with JUST the two opposing camps of Austrianism vs. Keynesianism (leaving out loads of others).

2) I deliberately included the words "(for the most part)" into each example becasue I knew it was all just a over simplicifcation. I could easily have included "--American politics is (for the most part) divided into up into Democrats vs. Republicans," but I choce not to. Maybe I should have. The Libertarians would have been excluded, and yet I still feel that the one qualifyer of "(for the most part)" would have covered me. But maybe I can't win, eh?

Regardless of how imperfect and over-simplified my anaolgy was, I think the overall gist was still successfully conveyed to people who maybe never even knew there was such a thing as opposing philosophies within the world of economics.

[Don]

Uhhh...NO. It's not.

It only seems that way because Austrian school people like to claim any economist that disagrees with Keynes as Austrian.

Right, Don?

Two things in defense of the way I chose to word all of that:

1) I wanted to super-streamline the entire analogy, so I went for an admittedly over-simplified yin and yang sort of presenttaion of having JUST two opposing sides in each example, concluding it all with JUST the two opposing camps of Austrianism vs. Keynesianism (leaving out loads of others).

2) I deliberately included the words "(for the most part)" into each example becasue I knew it was all just a over simplicifcation. I could easily have included "--American politics is (for the most part) divided into up into Democrats vs. Republicans," but I choce not to. Maybe I should have. The Libertarians would have been excluded, and yet I still feel that the one qualifyer of "(for the most part)" would have covered me. But maybe I can't win, eh?

Regardless of how imperfect and over-simplified my anaolgy was, I think the overall gist was still successfully conveyed to people who maybe never even knew there was such a thing as opposing philosophies within the world of economics.
Yes, Rob, you're right in the details. There's a wide spectrum of economic thought, and not everybody falls into the Keynesian or Austrian camps, just as PD mentioned there are more than Democrats and Republicans on the political landscape.

However, for purposes of simplification, I think it's fair to think of Austrians and Keynesians as opposite ends of the spectrum. Perhaps free-market and managed would better express the root concepts, but free-market is so conflated with corporatism today that it immediately raises red flags in many people's minds. The economy has been so drastically altered by regulation that what we have today in no way resembles free markets. Primary case in point: the special powers granted by Big Government to Big Business and Big Labor, all to the detriment of the average citizen.

The bottom line is that the question being asked today, "How should we interfere in the economy?" presupposes that the question "Should we interfere in the economy?" has already been asked and answered. Austrian economists argue very strongly that "Should we interfere in the economy?" is the root question that must be asked, and the answer is we have already interfered far too much in favor of special interests.

As a conceptual intro, is that close enough for government work? :D

[LaceWing]

Quick question: for Austrians, is there a tax mechanism? I ask because political lines are always aligned with who gets to tax whom. And just in case the answer is that taxes are not acceptable, how does one avoid tainted peanut butter, etc., without taxes to fund regulating bodies?

[Don]

Aside from the taxation question, how do we avoid tainted peanut butter, etc., WITH taxes to fund regulating bodies? Regulating bodies paid for by taxpayers have a long history of crawling in bed with the very industries they are charged with regulating. Look at the SEC and Madoff for a blatant example. Arguing that what we have today actually works is arguing from a false premise.

One argument is that competing organizations financed in various ways would act as 'Consumer Report' or 'Good Housekeeping' type organizations, and consumers would watch for those types of certifications. They would actually have meaning, since a company that purported to judge quality and failed to do so would soon find their source of funding running off to more trustworthy organizations.

Underwriter Laboratories is another example of an organization that exists today that performs similar services without being an arm of the government.

[Plot Device]

In defense of governmenetal regulation, I think that the situation back in the late 1950's and early 1960's with the FDA and their refusal to allow the drug called Thalidomide into the USA is a prime example of when regulation works exactly the way it is supposed to work.

http://en.wikipedia.org/wiki/Thalidomide

The FDA inspector named Frances Oldham Kelsey was being hounded by the drug companies to pretty please make Thalidomide legal in the American marketplace. She wouldn't budge on the basis of pure science.

Here she is getting a medal from President Kennedy for her courage.

http://upload.wikimedia.org/wikipedia/en/9/93/Kelsey_01.jpg

Worst case scenario is she really was in the back pocket of SOME OTHER drug company, and was trying to squelch competition for .... whatevr other drug that Thalidamide was competing with. (But such a notion has no evidence, nor even to my knowledge an accusation other than my own hypothetical suggestion of it here.)

But in my estimation, this is government regulation at its finest.

[Don]

The Thalidamide story is a worthy one, but isolated cases don't make an argument for general utility. Given the state of society, I'd say FedGov is doing a damn poor job of doing the things it claims it does. How's it doing with keeping the economy robust? Keeping drugs off the street? Keeping dangers off our dinner plates? Protecting its citizens from predatory business practices? Encouraging peaceful commerce with nations abroad?

As a writer, can't you readily imagine other scenarios where similar protections are found, but that are financed in other ways than by taxes?

Wouldn't it be great to have social services that were actually effective because those charged with providing the protections were accountable for actually performing their duty and would soon be unemployed if they failed to do so? Government financing is a great way to protect the incompetent from the dereliction of their duties.

[LaceWing]

Arguing that what we have today actually works is arguing from a false premise.

I wasn't. I was asking if Austrian economists have a clear position on taxation or its simulacrum.

As for independent regulators, I gave that a little bit of thought, too. If I pay Better Business Bureau to review my business, to whom are they beholden? Or should I as a potential customer pay Consumer Reports, as if they were an insurer of sorts? How about if I go into business as a rival to either or both of these, but produce nothing but PR for a while, skimming off what I can while it lasts?

I don't have a dog in this race, by the way. I'm just prone to chronically asking What If.

[Don]

I'd hate to mis-state the Austrian position, since rob is always watching me. :D Austrian economic theory says that taxes always result in a net lower living standard for society, because production will not be allocated as efficiently as it would have been otherwise.

What percentage of the standard of living to sacrifice to bureaucratic central planning is a decision in the socio-political realm, not the economic one. Economically, it should be clear to anyone that we'd have a much higher standard of living if almost half the population wasn't working for some government entity, redirecting resources, instead of in production, where things that raise our standard of living are produced.

As for how you organize these services in lieu of government, there are literally dozens of books discussing various ideas, most fairly logical.

One example: since insurers and certifiers have the same goal, perhaps those two services merge or become closely intertwined. Perhaps ABC Insurance contracts with XYZ Safety and requires all products sold in stores they insure be XYZ certified. Since ABC stands the risk of loss in case of product liability, they're going to hold XYZ Safety to a high standard of performance, or shift their service elsewhere.

When you come along with PRO Safety (PR Only) you're not going to have many customers until you have a proven track record. Maybe a few small shops that self-insure will take a chance on you early on, and if you prove yourself, you'll increase your customer base. One of those small shops will take you to the cleaner the first time a product you 'certified' hurts a customer, and you'll be out of business.

Just one little example. It would take books to discuss all the possibilities.

ETA: I strongly recommend reading I, Pencil (http://www.commonsenseeconomics.com/Readings/I.Pencil2006.FEE.pdf?nid=316) from post 7. It's short and sweet, and gives a great explanation of the complexity of self-regulating markets. Providing safe products to consumers is a much less complex process than making a pencil, and the market does a fine job of that.

[LaceWing]

Don, thank you.

Austrian economic theory says that taxes always result in a net lower living standard for society, because production will not be allocated as efficiently as it would have been otherwise.

First, please recognize that I understand you've qualified this, with some caution, as an honest effort to paraphrase. I understand you've invested a lot of effort here in defense of AE; I respect that. For the sake of discussion, I'm going to suspend this statement and let it occupy a nebulous space of non-attribution, if I may.

The words in this that put me on alert are: theory, always, living standard, production, allocated, efficiently -- and the assumptions embedded therein.

I don't assume that we "do business" with each other only for the sake of efficiency. I sometimes trade favors for the fun of it, for the mere pleasure of making a connection with someone, because I know in my bones that giving really is its own reward, because having an effect feels like being alive. And yes, I recognize that if I were dumpster diving for my next meal, my only concern would be trading whatever I could in order to eat just about anything at all.

Allocation, hmm. Yes, some resources are finite. Food and shelter, water and air, for instance. Not art, not stories, not play. On the other hand/related: money buys time and time is life; whoever takes my money does a little murder. (An aside here: money is an exchange of PRESENT value; hoard it too long and it rots like corn in a silo.)

Theory and Always: ugh. Does not compute, especially in human sciences. I suspect human "systems" are only able to evolve in competition with the individuals who use them. Complexity, emergent properties and behavioral economics seem to me to be more germane to the discussion. But then, I'm okay with imperfect systems that aren't controllable. Also, I can't quite do that kind of math myself; I have to rely on those who impress me as experts.

ABC and XYZ could too easily figure out a way to collude. Even if every electronic monetary transaction were public knowledge, they could still barter something.

Oh, and about living standards: thank goodness that isn't universally defined. Some can hoard diamonds and I can leave books on a park bench for random others.

~

I haven't taken the time to view the discussions at edge.org on economics, but based on other stuff I've grokked there, I recommend it anyway. Santa Fe Institute has much to say on complexity and emergence.

[Don]

Don, thank you.

First, please recognize that I understand you've qualified this, with some caution, as an honest effort to paraphrase. I understand you've invested a lot of effort here in defense of AE; I respect that. For the sake of discussion, I'm going to suspend this statement and let it occupy a nebulous space of non-attribution, if I may.

The words in this that put me on alert are: theory, always, living standard, production, allocated, efficiently -- and the assumptions embedded therein.

I don't assume that we "do business" with each other only for the sake of efficiency. I sometimes trade favors for the fun of it, for the mere pleasure of making a connection with someone, because I know in my bones that giving really is its own reward, because having an effect feels like being alive. And yes, I recognize that if I were dumpster diving for my next meal, my only concern would be trading whatever I could in order to eat just about anything at all.

Allocation, hmm. Yes, some resources are finite. Food and shelter, water and air, for instance. Not art, not stories, not play. On the other hand/related: money buys time and time is life; whoever takes my money does a little murder. (An aside here: money is an exchange of PRESENT value; hoard it too long and it rots like corn in a silo.)

Theory and Always: ugh. Does not compute, especially in human sciences. I suspect human "systems" are only able to evolve in competition with the individuals who use them. Complexity, emergent properties and behavioral economics seem to me to be more germane to the discussion. But then, I'm okay with imperfect systems that aren't controllable. Also, I can't quite do that kind of math myself; I have to rely on those who impress me as experts.

ABC and XYZ could too easily figure out a way to collude. Even if every electronic monetary transaction were public knowledge, they could still barter something.

Oh, and about living standards: thank goodness that isn't universally defined. Some can hoard diamonds and I can leave books on a park bench for random others.

~

I haven't taken the time to view the discussions at edge.org on economics, but based on other stuff I've grokked there, I recommend it anyway. Santa Fe Institute has much to say on complexity and emergence.
There's a lot more behind all of this, which is why I say it's so simplified, and some of my simplification causes some of your confusion.

Individual choice is at the root of it all, so substitute your definition of the choices you'd make for whatever meaning you're using for words like efficiency, production, and standard of living. If you're free to spend more of your efforts for your own purposes, you are richer. Whether you spend those efforts to amass diamonds or to pass out soup at a soup kitchen, your richness has increased as you define it. Does that help any at all? It's very hard for me to give a quick definition of the whole concept, which means I should probably write a few pieces, or find a few to reference.

Unfortunately, except for I, Pencil, most of the simple tomes seem to be in the 300 page and up range. :D

BTW, I've bolded a statement you made that's at the core of my beliefs as well, and which ties in nicely with the concepts we're discussing.

ETA: Money is currently a store of present value, as you stated. However, it should be a store of value, period. That's one of the three standards of a monetary unit.

[robeiae]

I haven't taken the time to view the discussions at edge.org on economics, but based on other stuff I've grokked there, I recommend it anyway. Santa Fe Institute has much to say on complexity and emergence.
Re complexity economics and Austrian School economics:

1) They are not wholly incompatible
2) Both recognize that choice is primary, in the sense Don just noted
3) Complexity economics--right now--is more about understanding how large economies actually function over time. It's not about policy, at all. This is an important point, imo.
4) Re dividing up economists into Keynesian and Austrian: see, many economists/thinkers have--at various moments--recognized that economics is not systematic in the sense they were led to believe. This is true for economists in both of these groups, as well as economists that do not fit neatly into either group. Both Keynesian and Austrian thinkers (the strict ones, anyway) think there is a systematic basis for the economy as a whole. It's why they both look to policy. They're wrong.

To put this another way: the economy can change in drastic ways that could be beneficial or detrimental for the vast majority of people, as a result of a policy change or government action. A Keynesian approach guarantees nothing. And an Austrian approach guarantees nothing.

[LaceWing]

Actually, Don, I carefully said money is an exchange of present value; valuation as calculated at the time of exchange.

rob, yes, I see all your points, and appreciate their succinctness.