Are Baby Boomers The Shallowest Generation?

James Quinn, a senior director of strategic planning at The Wharton School of University of Pennsylvania, describes the roots of the financial crisis in America. Excerpts below.

As a Baby Boomer, this is bitter medicine, but I can't dispute his reasoning and evidence.

LinK: THE SHALLOWEST GENERATION | The Big Picture.

The Baby Boom Generation will never be mistaken for the Greatest Generation that survived the Great Depression and defeated evil in a World War that killed 72 million people. I hate to tell you Boomers, but putting a yellow ribbon on the back of your $50,000 SUV is not sacrifice. Our claim to fame is living way beyond our means for the last three decades, to the point where we have virtually bankrupted our capitalist system. Baby Boomers have been occupying the White House for the last sixteen years. The majority of Congress is Baby Boomers. The CEOs and top executives of Wall Street firms are Baby Boomers. The media is dominated by Baby Boom executives and on-air stars. We have no one to blame but ourselves for the current predicament. Blaming Franklin Roosevelt or Lyndon Johnson for our dire situation is a cop out. Baby Boomers had the time, power, and ability to change our course. We have chosen to leave the heavy lifting to future generations in order to live the good life today.

Of course, not all Baby Boomers are shallow, greedy, and corrupt. Mostly Boomers with power and wealth fall into this category. There were 76 million Baby Boomers born between 1946 and 1963. They now make up 28% of the U.S. population. Their impact on America is undeniable. The defining events of their generation have been the Kennedy assassination, Vietnam, Kent State, Woodstock, the 1st man on the moon, and now the collapse of our Ponzi scheme financial system. They rebelled against their parents, protested the Vietnam War, and settled down in 2,300 square foot cookie cutter McMansions with perfectly manicured lawns, in mall infested suburbia. They have raised overscheduled spoiled children, moved up the corporate ladder by pushing paper rather than making things, lived above their means in order to keep up with their neighbors, bought whatever they wanted using debt, and never worried about the future. Over optimism, unrealistic assumptions, selfishness and conspicuous consumption have been their defining characteristics.

When I see “poor” people appearing to live a more luxurious life than myself, I don’t feel jealous. The thought that goes through my head is: Which banks or finance companies were foolish enough to loan these people the money to live this lifestyle? These foolish financial institutions will never get their loans repaid. What does bother me is that the Bush-Paulson-Pelosi Bailout of Stupid Banks will use my taxes to buy these bad loans from the foolish banks. So, who is the fool in this scenario? The “poor” person got to drive a Cadillac Escalade for a period of time, the foolish banks got bailed out, the bank CEOs took home $30 million, and I lived within my means and footed the bill for the reckless actions of others. It appears that the fools are the Americans who lived their lives according to the rules. The anger is building. I don’t think the politicians running this country realize what true anger looks like. They are used to Americans being herded along like passive sheep.

I’ve heard many Republican ideologues blame the current crisis on the people who took the subprime loans for home purchases. I’ve also heard many Democratic ideologues blame the crisis on the regulators. The ideologues are wrong, as usual. If a poor person has no home, no vehicle, and no prospects; then a bank tells them that they can buy a $300,000 home, drive a $55,000 Mercedes SUV, and live like people on TV; why wouldn’t they say yes? What is their downside? If you have nothing and “The Man” offers you the American dream, you’d actually be foolish to say no. Now that they have lost the home in foreclosure and the repo man has taken the Mercedes, they are exactly where they were a few years ago with no home, no vehicle and no prospects.

The regulators were certainly asleep at the wheel. They did not enforce existing rules, foolishly waived leverage rules for the biggest investment banks, and believed that the banks would regulate themselves. They were wrong, but they never made a single loan. The commercial banks, investment banks, auto finance companies, and credit card companies made the ridiculous loans to people who could never pay them back in the search for short term profits. Greedy Wall Street executives created an artificial market for the loans in order to generate billions in fees so they could enrich themselves through stock options and obscene bonuses. They spent their false riches on $2 million NYC penthouses, $100,000 Porsche 911s, and $5 million beachfront estates in the Hamptons. Based on the estimated $2 trillion of losses that our banks have generated, the CEOs certainly deserved annual pay 500 times as high as the average worker. There is no way an “average” worker could possibly be talented enough to lose $2 trillion. You would need to be truly extraordinary to lose that much.

The brutal necessary lesson that should have been learned is that if you loan money to people who can’t pay you back, your bank will go bankrupt. The “poor” people who made a bad decision in buying homes and cars they couldn’t afford have lost those homes and cars. The banks made a bad business decision in making those loans. The taxpayer was not involved in these business transactions. This is where Hank Paulson, Ben Bernanke and George Bush, formerly free market capitalists, decided to commit our grandchildren’s money to bailing out the horribly run financial institutions. Our government has chosen to allow these banks off the hook for their bad business decisions at the expense of taxpayers. Rewarding bad decisions and bad behavior will lead to more bad decisions and more bad behavior. The government has made a dreadful decision that will haunt our country for generations. Now the Federal Reserve has lowered interest rates to 1% again. This is where this horrible nightmare started. The massive printing of currency throughout the world will ultimately lead to a hyperinflationary bust. The law of unintended consequences can be devastating.

…Boomer … spend more eating out than we give to charity. We spend as much on big screen TVs and stereos as we do on education. This may explain why 37 million (12.5%) of all Americans live in poverty and our high school students trail the students of 25 other countries (including Latvia) in science and math knowledge. Our school system processes many more clueless morons who don’t know the candidates for President, versus intelligent, thoughtful, hard working, driven young people. The $160 billion spent on gambling is indicative of the get rich quick without hard work attitude of the Boomer generation. Even worse, households with income under $13,000 spend, on average, $645 a year on lottery tickets, about 9 percent of all their income. Our government feeds this addiction by siphoning off billions in taxes from these gambling revenues to redistribute as they see fit.

What the data proves is that Boomers love to shop and eat, whether they have the money or not. The top 100 retailers in the U.S. have 250,000 stores that generated $1.7 trillion of sales last year. How could America function without 31,000 McDonalds, 35,000 KFCs, Taco Bells, & Pizza Huts, 15,000 Starbucks, 7,000 Wal-Marts, 2,000 Home Depots, 4,000 K-Marts/Sears, and 8,000 Blockbusters? There are 91,000 shopping centers in the United States. The Advertising industry spends $275 billion per year to convince you to spend money you don’t have for things you don’t need. This generation lacks self control, morals, a work ethic, and savings ethic. Based on the recent actions of our government and corporate leaders, we seem to lack any ethics at all. It is immoral for the boomer generation to run up $53 trillion in unfunded future liabilities in Social Security, Medicare and Medicaid to leave as our gift to future generations, while we live it up today. Optimists like to point out that Europe and Japan have much worse unfunded liability problems than the U.S. That is like taking pride in being the best looking horse at the glue factory. In the end, we’ll all still be glue.

The 25 year Boomer borrowing and spending binge is coming to an end. The hangover will be really bad. The Federal Reserve and Treasury are trying to keep the frat party going, but everyone is passed out on the floor. The Case Shiller housing data shows that the 20 largest cities have experienced an average 20% decline in price from their peaks. The futures index predicts a further 10% to 15% loss in value. There are 75 million owned homes in the U.S. One in six, or 12 million homeowners, owe more than the house is worth. With further expected losses, 20 million homeowners will eventually be underwater on their mortgage. In California, where home price declines will be 40% to 50%, half the homeowners in the State will owe more than the house is worth. If you are one of these homeowners and can afford the mortgage payment, time will eventually bail you out. If you can’t afford the mortgage payment, you should lose the house to someone who can make the payment. This is the failure side of the creative destruction that is true capitalism. If the government steps in to subsidize and eliminate failure, the system will ultimately collapse.

The last six months have been a perfect example of laggardship. Our leaders have floundered from crisis to crisis, overreacting and blustering rather than leading. True leaders are proactive, not reactive. After not addressing our energy policy for decades, as soon as oil reached $140 a barrel, Congress lurched into action so their constituents would think they were leading. As our financial system has imploded, government “leaders” have flailed about with one rescue package after another and Congress looks for scapegoats. Meddling, tinkering, and non-enforcement of rules by Congress and other government bureaucracies caused the crisis that they are reacting to. Government creates the problems and then assumes even more power over our lives with their ridiculous “solutions”.

No one in Washington has shown an ounce of leadership in decades. True leadership requires strength of character, clear vision to see the future as it is, the bravery to make unpopular decisions, and the honesty to tell the public the unvarnished truth based on the facts.

David Walker lays out our dilemma:

“The regular order in Washington is broken. We must move beyond crisis management approaches and start to address some of the key fiscal and other challenges facing this country if we want our future to be better than our past. Our fiscal time bomb is ticking, and the time for action is now!”

Ultimately, it is up to the Baby Boom generation to change our country’s course. The oldest Boomer is 62 years old and the youngest 45 years old. It is time for Boomers to take a hard look in the mirror and rethink their priorities. It is time to cast aside the $88,000 Range Rovers, $1,200 Jimmy Choo boots, $5,000 Rolex watches and daily double lattes at Starbucks. It is time to live within your means, distinguish between needs and wants, reduce debt, save 10% of your income, make sure your kids get a good education, not try and keep up with the Jones’, show compassion for your fellow man,  and possibly pay more taxes and get less benefits, for the good of the country. We must support true leaders like David Walker and get rid of the old time corrupted politicians who want to keep the status quo. Texas Congressman Ron Paul gives the blunt truth that a true leader is willing to give:

“Our government has lived beyond its means for decades. We now face a crucial juncture, at which we determine whether to continue down the path of debt, inflation, and government intervention or choose to return to the economics of the free market, which have been ignored for almost a century. Increased debt leads to higher taxes on future generations, while increased inflation diminishes the purchasing power of American families and destroys the dollar. No society has ever been achieved prosperity through indebtedness or inflation, and the United States is no exception. We cannot afford to continue our current policies of monetary expansion and unending bailouts. Unless we return to sound monetary policy, sharply reduce government expenditures, and realize that the government cannot act as a lender of last resort, we will drive our economy to ruin.”

The Baby Boom generation has one last chance to change the course of U.S. history, keep us from wrecking in a storm of debt on the approaching jagged reef and shed the title of “Shallowest Generation”.

The Challenges Not Mentioned in the Election

John Michael Greer describes some issues that are so controversial that candidates don't touch them. But they won't go away quietly and denial is not a viable option. Excerpts below.

Link: The Archdruid Report: History and Hope.

…the major issues of this moment in history were barely mentioned by any party, major or minor, in the presidential campaign. Over the next decade or so, the United States will have to work out a way to stand down from a global military-economic empire it can no longer afford to maintain; it will have to find the money and the means to replace a mostly fictive economy based on the manipulation of baroque financial instruments with a real economy based on the production of goods and services for people; it will have to make good on decades of malign neglect inflicted on the national infrastructure on nearly every level, even as it struggles to convert a suburban landcape viable only in an age of cheap abundant fossil fuels to something that makes sense in the world of scarce and expensive energy ahead of us.

Few of the changes that will be imposed by these necessities will be popular. Many, in fact, will be bitterly resented, and none of them will come cheaply. We have wasted so many opportunities and poured so many of our once-abundant resources into a decades-long joyride that the next few years will almost certainly impose one wrenching challenge after another on a society that the recent past has left very poorly equipped to face them. Our history is among the heaviest burdens we face, because the habits we learned during America’s imperial zenith are among the things that are most necessary to unlearn in the new and far more multipolar world dawning around us.

Still, I find myself feeling a bit more hopeful than before, for the burden of racial hatred was also profoundly rooted in American history and identity, and the verdict of last night’s election suggests that it has turned out to be subject to change. I think of the difference forty years has made, from 1968, when an assassin’s bullet cut down Martin Luther King and inner cities across America exploded in violence, to 2008, when a nation’s ballot sent Barack Obama to the presidency and many of those same inner cities celebrated straight through the night. We live in a different country now, and the possibility that Americans might be able to rise to the massive challenge of the deindustrial transition has become just slightly harder for me to dismiss out of hand. Still, that turn of history’s wheel is still ahead of us, and we will have to wait and see.

Jared Diamond video on Societal Collapse

From TED Talks, Jared Diamond speaks on  Why do societies fail? Taking lessons from the Norse of Iron Age Greenland, deforested Easter Island and present-day Montana, Jared Diamond talks about the signs that collapse is near, and how — if we see it in time — we can prevent it.

Jared Diamond is the author of a number of popular science works that combine anthropology, biology, ecology, linguistics, genetics, and history.

His best-known work is the non-fiction, Pulitzer Prize-winning Guns, Germs, and Steel (1998), which asserts that the main international issues of our time are legacies of processes that began during the early-modern period, in which civilizations that had experienced an extensive amount of "human development" began to intrude upon technologically less advanced civilizations around the world. Diamond's quest is to explain why Eurasian civilizations, as a whole, have survived and conquered others, while refuting the belief that Eurasian hegemony is due to any form of Eurasian intellectual, genetic, or moral superiority. Diamond argues that the gaps in power and technology between human societies do not reflect cultural or racial differences, but rather originate in environmental differences powerfully amplified by various positive feedback loops, and fills the book with examples throughout history. He identifies the main processes and factors of civilizational development that were present in Eurasia, from the origin of human beings in Africa to the proliferation of agriculture and technology.

In his following book, Collapse: How Societies Choose to Fail or Succeed (2005), Diamond examines a range of past civilizations and societies, attempting to identify why they collapsed into ruins or survived only in a massively reduced form. He considers what contemporary societies can learn from these societal collapses. As in Guns, Germs, and Steel, he argues against ethnocentric explanations for the collapses which he discusses, and focuses instead on ecological factors. He pays particular attention to the Norse settlements in Greenland, which vanished as the climate got colder, while the surrounding Inuit culture thrived.

He also has chapters on the collapse of the Maya, Anasazi, and Easter Island civilizations, among others. He cites five factors that often contribute to a collapse, but shows how the one factor that all had in common was mismanagement of natural resources. He follows this with chapters on prospering civilizations that managed their resources very well, such as Tikopia Island and Japan under the Tokugawa Shogunate. (Link: http://en.wikipedia.org/wiki/Jared_Diamond)

In Collapse, Diamond distances himself from the charges of "ecological or environmental determinism" that were leveled against him in Guns, Germs, and Steel [1]. This is particularly evident in his chapter comparing Haiti and the Dominican Republic, two nations that share the same island (and similar environments) but which pursued notably different futures, primarily on the strength of their differing histories, cultures, and leaders.

How US Leaders Have Failed

Ben Stein blasts the policies that have pushed the U.S. into this precarious economic position.

Link: How to Ruin the U.S. Economy by Ben Stein

1) Have a fiscal policy that creates immense deficits in good times and bad, burdening America’s posterity with staggering burdens of repaying the debt.

2) Eliminate regulation of Wall Street and/or fail to enforce the regulations that already exist, instead trusting Wall Street and other money managers and speculators to manage other people’s money with few or no regulations and little oversight.

3) Have an energy policy that disallows producing our own energy and instead requires that we buy energy from abroad, thus making our oil prices highly volatile and creating large balance of payments deficits, lowering the value of the dollar and thus making the problem get progressively worse.

4) Have Congress mandate that banks and other financial entities lend money to persons they know in advance to have poor credit ratings or none at all.

5) Allow investment banks, insurers, and banks to bet their entire net worth and then some on the premise that borrowers known to be improvident will in fact repay those loans.

6) Allow the creation of large betting pools called "hedge funds" that can move markets and control the outcome of trading, thus taking a forum for savings and retirement for families and making it into a rigged casino game that exists primarily to fleece suckers like ordinary working men and women.

7) Have laws that protect corporate officers from being sued for misconduct but at the same time punish lawyers in the private sector who ferret out such misconduct and try to make accountable the people responsible for shareholder and investor losses. If one of those lawyers gets particularly aggressive in protecting stockholders, put him in prison.

8) Appoint as head of the United States Treasury Department a man whose whole life was spent on Wall Street, who became fantastically rich through his peddling of junk bonds at his firm while the firm later sold short those same sorts of bonds.

9) Scare Americans into putting up $750 billion of their hard earned money to bail out the billionaires and their friends who created the market for loans to poor credit risks (The "subprime" market) and the unbelievably large side bets on those loans, promising that such a bailout would save the retirement savings of Americans, then allow the immense hedge funds to make the market crater immediately afterwards.

10) Propose to save the situation by surtaxing the oil industry, which is owned by our fellow Americans, mostly in their retirement plans, thus penalizing Americans for investing in companies that efficiently and legally produce an indispensable product.

11) Insist that the free market requires that banks and insurers with friends of the Secretary of the Treasury be saved but allow other entities not so fortunate to fail, thus creating total uncertainty and terror among financial institutions, and demolishing all of the confidence built up in financial circles since the days of FDR.

12) Then have the Republican candidate say he would keep on the job the Treasury Secretary who facilitated the crisis, failed to protect the nation from the crisis, got the taxpayers to pony up to save his Wall Street buddies, and have the Democratic candidate, as noted, say he would save the day by taxing the stockholders of energy companies.

There, that should do it.

Leaders that Sacrifice the Future

I don’t rant often on this blog, but I had to let this out.

We have many leaders whose great skill is misleading us, by exploiting our fears, dreams, and beliefs. Many untruths and much corruption will be exposed by the financial crisis of 2008.

Economic reality is not altered, in the long term, by the self-serving words of politicians and CEOs. They must have a messiah complex to think that what they say will magically come true when they are just hoping to suspend the natural laws of economics (again).

They use charisma and mass psychology to get trusting people to believe their words. These trusting people are finally seeing that many of our leaders are looking out for themselves, greedily plundering organizations large and small to enrich themselves and their cronies, to the detriment of the electorate and investors.

Voters and stock holders have believed and trusted their leaders (who seem to know how to exploit every crisis for their own personal gain) are depressed by what is happening. When enough people get depressed, the economy will follow.

Do we get the leaders we deserve? I encourage every one to ponder that question.

Do corrupt leaders get what they deserve? Some do, but many don’t. Why? Because often they make the rules or can avoid the consequences.

Let’s all pay more attention to the slogans, excuses, explanations, and scapegoating offered by leaders at every level. We can’t afford to be misled any more.

Leadership in the U.S.

Thomas L. Friedman at the NYTimes.com offers some suggestions for McCain and Obama. Excerpts below.

Link: Op-Ed Columnist – No Laughing Matter – Op-Ed – NYTimes.com. Thomas L. Friedman

We have been living on borrowed time and borrowed dimes. President Bush has nothing to offer anymore. So that leaves us with Barack Obama and John McCain. Neither has wowed me with his reaction to the market turmoil. In fairness, though, neither man has any levers of power to pull. But what could they say that would give you confidence that they could lead us out of this rut? My test is simple: Which guy can tell people what they don’t want to hear — especially his own base.

Think how much better off McCain would be today had he nominated Michael Bloomberg as his vice president rather than Sarah Palin. McCain could have said, “I’m not an expert on markets, but I’ve got one of the best on my team.” Instead of a V.P. to re-energize America, McCain went for a V.P. to re-energize the Republican base.

So what would get my attention from McCain? If he said the following: “My fellow Americans, I’ve decided for now not to continue the Bush tax cuts, because the most important thing for our country today is to get the government’s balance sheet in order. We can’t go on cutting taxes and not cutting spending. For too long my party has indulged that nonsense. Second, I intend to have most U.S. troops out of Iraq in 24 months. We have done all we can to midwife democracy there. Iraqis need to take it from here. We need every dollar now for nation-building in America. We will do everything we can to wind down our presence and facilitate the Iraqi elections, but we’re not going to baby-sit Iraqi politicians who don’t have the will or the courage to reconcile their differences — unless they want to pay us for that. In America, baby sitters get paid.”

What would impress me from Obama? How about this: “The Big Three automakers and the United Auto Workers union want a Washington bailout. The only way they will get a dime out of my administration is if the automakers and unions come up with a joint plan to retool their fleets to get an average of 40 miles per gallon by 2015 — instead of the 35 m.p.g. by 2020 that they’ve reluctantly accepted. I am not going to bail out Detroit with taxpayer money, but I will invest in Detroit’s transformation with taxpayer money, provided the management and unions agree to radical change. At the same time, while I will go along with the bailout of the banking system, it will only be on the condition that the institutions that got us into this mess accept sweeping reforms — in terms of transparency and limits on the leverage they can amass — so we don’t go through something like this again. To help me figure this out, I’m going to keep Treasury Secretary Hank Paulson on the job for a while. I am impressed with his handling of this crisis.”

Who Caused the Financial Crisis?

In a Washington Post article, Eric D. Hovde describes how the greed of Wall Street and their political action committee contributions to elected officials in Washington created the financial crisis.

Link: Calling Out the Culprits Who Caused the Crisis – washingtonpost.com.

…because of the actions of the investment banks, the mortgage industry and the rating agencies, the investment community has now incurred an estimated $1 trillion and more in losses. Even more troubling, housing prices have dropped 20 percent from their July 2006 highs, with the very real likelihood that housing could contract another 15 to 20 percent — essentially wiping out more than $4 trillion in housing values. This would be the biggest hit since the Depression to Americans’ most important asset.

What is even more remarkable is that at the same time, firms such as Goldman Sachs and Lehman not only made billions of dollars packaging and selling these toxic loans, they also wagered with their own capital that the values of these investments would decline, further raising their profits. If any other industries engaged in such knowingly unscrupulous activities, there would be an immediate federal investigation.

Why is Washington so complicit in this intricate and lucrative affair? First, the Fed laid the groundwork for both these asset bubbles by lowering interest rates to historic lows. In an attempt to protect his legacy after the Internet-bubble collapse, Greenspan provided unprecedented stimulus to re-inflate the economy and maintain his popularity with Wall Street. (Remember the "Greenspan put"?) But in doing so, he spawned the largest debt and asset bubble in U.S. history.

At the same time, federal regulatory agencies such as the SEC stood idly by as Wall Street took advantage of the investment public during both the Internet and the housing bubbles. The SEC took almost no action against Wall Street after the dot-com implosion. And in the midst of the housing bubble, in 2006, only the Office of the Comptroller of the Currency pushed for any level of regulation to address subprime lending.

One has to wonder why Treasury secretaries under Presidents Clinton and Bush — Robert Rubin and Hank Paulson, respectively — took no action to curb these abuses. It certainly was not because they did not understand Wall Street’s practices — both are former chief executives of Goldman Sachs. And why has Congress been so silent? The Wall Street investment banking firms, their executives, their families and their political action committees contribute more to U.S. Senate and House campaigns than any other industry in America. By sprinkling some of its massive gains into the pockets of our elected officials, Wall Street bought itself protection from any tough government enforcement.

This is no doubt the same reason why so many members of Congress were consistently blocking attempts to reform and downsize Fannie Mae and Freddie Mac, which are essentially giant, undercapitalized hedge funds. These two entities have been huge money machines for Democrats in both the House and the Senate, many of whom recently had the gall to ask why these companies hadn’t been reformed in the past. Nor should several Republican congressmen and Senators who likewise contributed to watering down legislation aimed at reforming these institutions be let off the hook.

Wall Street’s actions are now profoundly hurting American families, communities and the entire U.S. financial system. People are being thrown out of their homes. Once seemingly indestructible financial entities are succumbing to the crisis they have created and have jeopardized the stability of the global financial system. Isn’t it ironic that the same firms that preached free-market capitalism are now the ones begging for a taxpayer bailout? Many investment professionals operating in my world believe, as do I, that we are facing the greatest financial crisis since 1929.

Fortunately, today we have safety nets, such as federal deposit insurance, that were non-existent during the Great Depression. Yet there has not been a time since the 1920s when Wall Street has enjoyed as much influence over Washington as it has for the last 12 years. Let’s hope that this influence fades rapidly — and that this financial crisis doesn’t end the same way as the one of nearly 80 years ago.

via Chris Kliemt

U.S. Energy Policy: First Face Reality

The U.S. only has about 3% of the world’s oil reserves, but demands 20% of current world production.

Richard T. Stuebi at Cleantech Blog, describes some solutions for the U.S. energy dilemma. Excerpts below.

Link: Cleantech Blog: When In A Hole, Stop Digging.

We complain about high energy prices, and ask the government to do something about it. When, in fact, there’s very little the government can do about energy prices. OPEC makes it abundantly clear that we are price-takers, not price-setters.

According to analysis by the U.S. Department of Energy, opening up new areas to drilling "would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.

Dr. Gal Luft, Executive Director of the Institute for the Analysis of Global Security, recommends moving to Fuel Flexible vehicles, so OPEC would lose its stranglehold on the U.S. economy. (Fuel Flexible vehicles: Gasoline powered vehicles able to run on a limitless variety of alcohol/petroleum blends with the addition of equipment that is about $100 per vehicle.)

Dr. Luft and other luminaries (e.g., James Woolsey, Robert "Bud" McFarlane) have formed the Set America Free Coalition to promote the Open Fuel Standard Act, which would require that 50% of all vehicles sold in the U.S. in 2010 must be fuel-flexible. According to Dr. Luft, the major automakers say this is doable.

The U.S. consumes about 25% of the world’s annual oil production, implying U.S. demand levels of about 21 million barrels/day (almost 8 billion barrels per year), but holds under its territory only about 2% of the world’s proven oil reserves of 1.2 trillion barrels. In contrast, the Oil Producing and Exporting Countries (OPEC) control almost 80% of the world’s oil reserves, yet produce only about 40% of annual oil supplies.

Leaders

Sometimes I wonder whether the world is being run by smart people who are putting us on….or by imbeciles who really mean it.

Mark Twain

via James Quinn in Looming Financial Catastrophe: A Real Inconvenient Truth

Example cited:

The Bush Administration recently announced that the budget deficit for FY09 will be $482 billion. White House spokeswoman Dana Perino said President Bush is determined to enforce greater fiscal discipline while pursuing a pro-growth economic strategy…. He has 4 months left in office and NOW he wants to enforce greater fiscal discipline. The $482 billion doesn’t include the $180 billion per year being spent … in Iraq and Afghanistan.

U.S. Energy Policy: Ignoring Facts

Richard T. Stuebi, BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, has a top 10 list of energy facts.

Link: Cleantech Blog: When In A Hole, Stop Digging.

Top Ten List of Energy Facts:

1. World oil production (which is essentially equal to consumption) is at approximately 85 million barrels per day, or 31 billion barrels per year — and has essentially remained at these levels continuously since mid-2005, even though oil prices have doubled (from about $60/barrel) since then.

2. The U.S. consumes about 25% of the world’s annual oil production, implying U.S. demand levels of about 21 million barrels/day (almost 8 billion barrels per year), but holds under its territory only about 2% of the world’s proven oil reserves of 1.2 trillion barrels.

3. In contrast, the Oil Producing and Exporting Countries (OPEC) control almost 80% of the world’s oil reserves, yet produce only about 40% of annual oil supplies.

4. OPEC production was 31 million barrels/day in 1973, and 32 million barrels/day in 2007, despite the world economy having doubled in the intervening years.

5. OPEC includes among its members the following countries that are unstable, corrupt and/or unfriendly to the U.S.: Saudi Arabia, Iraq, Iran, Venezuela, Nigeria.

6. The Middle Eastern members of OPEC represent over 75% of total OPEC capacity, of which the single largest player (without which the world oil markets would collapse) is Saudi Arabia, alone accounting for 22% of the world’s remaining proven oil reserves.

7. This year, the U.S. will send an estimated $700 billion to the Middle East to purchase oil — more than the U.S. defense budget (about $600 billion).

8. An unknown portion of these proceeds, but widely-agreed to be a significant amount, funds anti-American (and anti-women, and anti-Semitic, and anti-homosexual, and so on) sentiment — including outright terrorist activities.

9. About 99% of the energy consumed by the U.S. transportation sector derives from petroleum.

10. The vast majority of American citizens live and work in a manner requires oil-fueled transportation to maintain their basic lifestyles (commuting, shopping, etc.)