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The Huffington Post
We're Running Our World Like a Ponzi Scheme!
Bernie Madoff sure made a name for himself, didn't he? First he made a name for himself as a "Wall Street Genius" whose coveted firm not only promised, but consistently delivered, extraordinarily high annual returns on investment, even when the economy was down. More recently he made a name for himself as the architect of the largest and most notorious "Ponzi Scheme" in history, bilking investors out of as much as 50 billion dollars!
So what is a Ponzi scheme, anyways? A Ponzi scheme is a fraudulent investment operation that promises, and delivers (at least for a while) exceptionally high and consistent financial returns to investors. These returns are paid to its investors from their own money, and the money paid by subsequent investors, rather than from any actual profit earned by bona fide income generating investments (such as manufacturing, mining, or rental income). In ways similar to "pyramid schemes" or "chain letters", in order for a Ponzi scheme to work, it must continuously attract an ever increasing pool of investment from unsuspecting customers, in order to provide an ever increasing supply of money to draw upon to maintain payments to its ever increasing pool of investors. The trick is to promise such glorious results that the greed factor overcomes its victim's common sense as they turn a blind eye to the fact that the scheme lacks a solid foundation and can't go on forever. It is absolutely critical to the success of all Ponzi schemes that an aura of respectability and impeccability be maintained for as long as possible, for as soon as suspicions spread concerning the fraudulent nature of the business, new investments dry up and the Ponzi scheme collapses, since it has no source of true earned income with which to maintain payments to investors.
So, is it true that we are running our planet like a Ponzi scheme? And if this is true, does it mean that we must inevitably face collapse, as all Ponzi schemes must eventually end in catastrophe?
The illusion that the "Free Market" is the logical savior of our world has been maintained by the promise of riches and an ever increasing standard of living and lifespan that has been demonstrated by the industrialized world for the past several hundred years. On the surface, who can look at the apparent success of America, and not come to that quick conclusion? However, when you look deeper, you will find that this success is built on a business model based upon exponential growth, and that this growth must be fed by a similar exponential growth in consumption of energy, natural resources, raw materials, and in the continuous expansion to new markets. All of this is well and good when the world has an abundant supply of undeveloped lands and unused resources, but it starts coming apart as that same world approaches its natural limits to growth and consumption.
Our world-wide Ponzi scheme got its start with the industrial revolution in Western Europe, and it was colonialism that provided ever increasing sources for the raw materials and markets that kept this giant Ponzi scheme rolling. It spread to America with the colonial takeover of vast untapped resources and huge tracts of lands previously occupied by Native American hunter-gatherers. As America industrialized, its population grew and its resources were drawn down, the giant Ponzi scheme continued to grow through globalization and it continued to feed its ever growing appetite by drawing down the natural resources in the world's oceans, forests, and more remote areas, and by expanding it markets into the farthest reaches of the globe. We are witness to a five hundred year run on this giant ever-expanding global Ponzi scheme, and unless we change the way we are playing this game, that run is now drawing dangerously close to a natural and catastrophic conclusion.
Read the whole article here.
12 Tips for the Sustainability Shift
From The Huffington Post
Posted July 30, 2008 | 11:04 AM (EST)
These days, most people sense that our world is off balance and that we are sliding steadily towards some dark abyss. It can be hard to keep a cheerful positive outlook when you consider just these three signs of trouble:
1. Recent record high oil prices may be just the beginning of never-ending price escalations as increasing demand for oil (China and India are growing at about 10% per year) collides with global oil production that has been pretty much flat for the past three years, and shows all the warning signs of impending decline (Peak Oil).
2. Even the best-case projections from the IPCC (Intergovernmental Panel on Climate Change) indicate that escalating natural disasters exacerbated by global climate changes may be enough to bankrupt many nations over the course of the next few decades.
3. Roughly 90 percent of the large commercial fish (swordfish, marlin, tuna, shark, etc.) have disappeared from the oceans over the last fifty years and it is projected that current trends will result in the collapse of all commercial seafood species in the oceans by the year 2048.
I hate to break it to you, but simple steps, like changing your light bulbs and driving a hybrid car, though they are good steps in the right direction, will not be enough to save our world from collapse. If we consider "Plan A" to be business as usual, which is currently consuming, depleting, and poisoning the natural systems that maintain life on Earth, then we might call a sustainable alternative "Plan B". It has been estimated that a viable Plan B could be implemented by diverting just 1/6th of the world's current military expenditures to supporting and implementing the sweeping changes needed to shift our world's course from collapse to sustainability. Are we that stupid, short sighted, or selfish that we can't devote this much to saving our planet?
There is no single "right way" to implement Plan B, but the following list (an excerpt from Edition II of When Technology Fails) would go a long way towards insuring that we and our children will have a world worth living in:
1. Change the tax structure. Plan B will only succeed if we shift the tax structure to provide significant support for those materials, processes, industries and investments that contribute towards building a sustainable economy, while penalizing those industries and structures that stick to the "old way" of doing things, continuing to consume our dwindling resources and ecosystems in non-sustainable ways. Funds gained from fees and penalties can be used to pay for rebates and tax incentives that promote the rapid industrial retooling and changeover to energy and resource conserving processes, machines, automobiles, and so on. During World War II, in a matter of just 6 months, the entire US production of consumer automobiles was shut down and converted to production in support of the war effort. If we could do that, We Can Do This!
2. Rebuild our cities. Over one half the human population now lives in cities, and they consume more than one half of our energy and materials. By restructuring our cities for mass transportation, moving away from their current focus centered on the individual automobile, and retrofitting our buildings for energy efficiency and integrated distributed renewable energy power generation (our buildings could generate most or all the power they need using current technologies), we could reduce our cities' fossil fuel consumption by a factor of 10:1 within the next decade or two.
3. Rebuild our railways, waterways, and mass transit systems: A world running short on oil must focus on efficiency rather than simple convenience. If we don't act now, while our economy is still working reasonably well, how will most of us get around, or ship our goods, if gas goes to $10 or $20 dollars a gallon and we have not developed better alternatives to diesel trucks for long distance hauling and private gasoline powered automobiles for local transportation?
4. Rebuild our homes, office buildings and factories. Today's showpiece energy efficient buildings often consume one-tenth the energy of the average building, and some buildings are net energy producers that actually generate more power than they consume. The current crash in the building market could be turned around with zero-interest loans and tax incentives to retrofit buildings for energy efficiency, providing badly needed jobs while cutting green house gas emissions and reducing oil imports and trade deficits. From a resource, energy, and materials point of view, it is far "greener" to retrofit existing buildings than to tear them down and start over.
5. Rebuild our industries. There must be domestic and international financial incentives to revitalize economies while saving energy and materials through junking old inefficient processes and machines and replacing them with state-of-the-art technologies. The Western world has benefited greatly from the use of natural resources gleaned from underdeveloped countries. It is time we repay this debt by sharing renewable and sustainable technologies with the developing world, doing our part to ensure that we leave behind a world that can feed and sustain our children. All of our efforts will be to no avail, if we take care of our own country while doing little to help replace the inefficient processes and industries of rapidly industrializing giants like India and China.
6. Fund and support renewable energy development. Focus on the rapid development of renewable energy sources, such as solar, wind, geothermal, and biofuels. Particular emphasis on wind power, which is already cost competitive with coal. When you level the playing field by eliminating subsidies, wind energy is already more cost effective than coal, nuclear, or oil for the generation of electricity. Develop biofuels from multiple sources (preferably other than corn, which produces just a little more energy than it takes to grow and process), including cellulosics and algae, to provide oil alternatives both in the transportation industries and as material feedstocks for industrial processes such as plastics.
7. Eliminate population growth. Reduce global population growth to the point where the population of our planet levels off, followed by a decline in world population. On a planet where the estimated long-term carrying capacity is on the order of 1 to 2 billion people, if we can't control our own population growth, nature will do it for us. Most people would agree that it is much more humane to provide family planning education and birth control materials for all people on Earth than for the population to find its natural level through starvation, plagues, and wars.
8. Share the wealth. Develop binding multinational regulations and governing bodies to ensure that the world's oceans and forests are harvested sustainably. Develop some form of resource equity-sharing program to reward third-world countries for conserving their resources, such as rainforests, topsoil, and sensitive ecosystems. We must revamp our economic systems which currently reward businesses that are causing great ecological harm, by allowing them to reap higher profits due to the fact that they are not charged for the harmful resource depletion and environmental degradation resulting from their business practices. Simply exporting our polluting heavy industries to the third world, where they are not as well controlled or monitored as in the west, makes the global sustainability problem even worse.
9. Reach out to developing countries. The developing countries of the world all want what the Western countries already have. They must not be left out of the equation. We have the potential to rapidly develop and deploy technologies to shift our economy from a carbon-intensive energy base to one based on renewables. By sharing this technology with the developing world, we can help to significantly improve their average standard of living while at the same time allowing them to leapfrog older coal and oil-based technologies, much as how the cell phone created the opportunity for most of the developing world to bypass line-based phone systems. If we miss this opportunity, our chances of avoiding catastrophic global climate changes, or economic and ecological collapse, are practically zero.
10. Replace coal-burning power plants. If we are to stand a chance for capping greenhouse gas emissions, current coal-burning power plant technology must be replaced. If a successful carbon dioxide sequestering technology proves feasible, we could continue to burn coal, but only when the new technology is in place.
11. Global relocalization: buy local. Economies are bound to relocalize as energy and transportation costs rise, making it once again both environmentally and economically beneficial to live, work, produce, grow, and buy locally. Buying local helps keep our dollars circulating locally in what is known as the "local multiplier effect." When we buy foreign oil, produce, or material goods, these dollars often leave our country for good.
12. Make all decisions based on sustainability. All business decisions should be made while giving serious consideration as to whether that particular decision contributes toward sustainability or takes us farther from the goal of creating a sustainable world.