The Shape of Things to Come

Bear with me, in this edition of the Column, I will be tying together a few loose threads that, when linked together, may help to explain our otherwise inexplicable national situation.

Thread 1: Rasmussen Reports does a weekly tracking poll of whether Americans think our country is heading is the right direction or the wrong direction.  Not surprisingly, in this Federal shutdown month of October, the “right direction” numbers have been registering in the teens, while the “wrong” direction crowd has numbered in the 80’s.

What is surprising is that 17 percent of Americans think we are going in the right direction.  I’m surprised the number is that high because, if pressed, I’m not sure that I can describe what direction we’re headed in.  Not that I think there is any consensus among the 80 percent, who feel otherwise, about what direction we should be headed in.

The European Crisis

Perhaps an unlikely candidate for the "undernews" category, the ongoing European financial crisis has not gotten, in my opinion, nearly as much attention in the media as the gravity of the situation would warrant.  Today, Walter Russell Mead writes about how the Germans may finally decide to stop subsidizing the rest of Europe through these serial bailouts.  Today's UK Guardian reports on how the crisis is producing another "lost generation" in Europe, as young adults are unable to begin careers.

Meanwhile, Fitch Ratings cut the credit ratings of five European countries, including Spain and Italy.  My advice is to follow this story carefully.

EPA Green Book, Part 3

[In this series I examine in depth the Green Book Sustainability and the U.S. EPA, commissioned by the EPA from a committee of the National Academy of Sciences.]

If you, Dear Reader, undertake any part of the Green Book itself, you should, of course, read the Summary.  In six pages it helpfully explains, in fairly clear bureaucrat/scientist language, what the book is about and what role the Academy urges for "sustainability" at the EPA.

The Academy claims that the exercise was not to "address laws pertaining to the EPA" (p. 3).  However, the next sentence reads as follows,

"The committee did, however, examine the benefits, where EPA has statutory and discretion in regulatory and nonregulatory programs, of building sustainability into its administration of these statutes."

But, please, you are not supposed to misinterpret that clear sentence as any sort of "power grab." 

"Sustainability," you see, "is our true north," as the Green Book quotes an agency official.  The committee merely wishes to help EPA "institutionalize sustainability" (p. 2).

You may be tempted to think of "sustainability" as ensuring that future human generations have a quality environment to sustain life.  Or, perhaps, you just associate the idea with the fight against global warming.  It is so much broader than that, according to the committee (p. 2), as it will help tackle "the complex problems,"

"including population growth, the widening gaps between the rich and the poor, depletion of finite natural resources, biodiversity loss, climate change, and the disruption of nutrient cycles."

Keep in mind that--although the word "sustainable" does appear in EPA's mission statement--the words "population," "rich," and "poor" do not.

The Academy urges the EPA to engage with a wide range of stakeholders (p. 5) including the following,

"state regulators, local officials, industry, academia, community and advocacy groups, and the international community."  Voters, citizens, Congress, (or any elected official), business, and the media, need not apply. 

Undernews: Walter Russell Mead on Today's Media

Starting off the new year, Walter Russell Mead dissects everything that's wrong with today's media.

Snatching Environmental Defeat from the Jaws of Victory

Driving around this afternoon, I caught this story on Minnesota Public Radio (MPR).  With great sadness, MPR reports that Minnesota currently meets national air quality standards.  But don't despair, big opportunities are coming to micromanage your lives.

Our victory against air pollution is one of the great untold stories of our time.  On August 1, 2010, the St. Paul Pioneer Press published an astonishing article ("A Not So Dirty Secret in the Air"), which revealed the following,

• Since 1970, Minnesota has slashed air pollution by more than 50 percent
• Air pollution, per capita, has dropped by more than two-thirds
• National emissions of carbon monoxide, down 62 percent
• Sulphur dioxide (acid rain), down 65 percent since 1970
• Ozone emissions, down 9 percent since 1990
• Particle emissions, down 14 percent since 2000
• In Minnesota, emissions from cars and trucks are down 51 percent since 1990

But the Pioneer Press also revealed in 2010 that the metro area was in danger of exceeding new, stricter federal standards for air quality, the development which gives MPR much joy,

"The Twin Cities metro area has so much fine particulate pollution that it could fail to meet the new standards expected from the federal government next year.  And in 2014, a more strict standard for ozone could be issued."

Please note, particulates and ozone emissions are going down not up.  The feds are ratcheting the standards to the point where we no longer can meet them, even with the massive reductions we have made and continue to make.

The culprit?  As MPR reports, "The Enemy...is us."  And by "us" they mean "you," the polluting public,

"another source of pollution goes unregulated and is a big part of the toxic pollution problem: our automobiles, boats and ATVs."

adding,

"Our tailpipes produce the single largest chunk of air pollution that the state sees, both in particulate pollution —a lot of that comes from diesel — and also ozone, which is a big emission from gasoline-powered vehicles."

Wait, the Pioneer Press told me last year that car and truck emissions were down 51 percent in 20 years and both particulates and ozone are decreasing, not increasing.  Let not the facts interfere with a good story and good money.

The MPR pieces quotes a spokesperson for the American Lung Association.  The Association began in 1904 to fight the disease tuberculosis, a fight which was largely won in this country back in the 1950's.  Rather than declare victory, dissolve the institution, and discontinue its lucrative Christmas Seals campaign, the Association reinvented itself in the early 1970's, taking on smoking and air pollution as its causes.  A non-profit, like other corporations, enjoys perpetual life, it can live on long after the founder passes from the scene. 

No matter, next stop social engineering.  MPR reports that regulators will be taking additional steps,

"Not just telling people to stay inside, but don't mow your lawn.  Don't fuel your cars until after sunset, because of the sunlight contribution to ozone...That certainly is a fairly common strategy, and I'm sure one we would be thinking about."

Don't mow my lawn?  So there is good news here.  But wait, won't I get fined by the City for not cutting my grass?  I can't win.

Promoting Yesterday's Industries Today

A recurring theme of this blog is how the conventional wisdom is almost always wrong.  There is no better example of this phenomenon than what passes for cutting-edge knowledge in the field of "economic development."

Driving home this afternoon, I listened to this report on National Public Radio concerning jobs and the economy and interviewing the mayors of Nashville and Grand Rapids, MI.

At the end, the majors give their advice to cities, and it was the usual nostrums about "meds and eds" (the health care and education industries, in particular higher ed) and "knowledge" workers.  One mayor declared that "the days of manual labor and making things in this country is [sic] gone."

If NPR were to have interviewed mayor of cities with low unemployment, they would have gotten very different answers.  New Geography compiles a list each year of cities ranked by growth prospects.  Their 2011 list makes for interesting reading.  Of the top 20 cities, fifteen are from oil patch areas of Texas, North Dakota, Alaska, and the Gulf Coast.  Throw in a couple of farm belt areas in Iowa, Kansas, and Nebraska, and you have quite a bit of demand in industries from the now "gone" manual labor and making things eras.  (I won't embarrass Nashville and Grand Rapids by mentioning where they fall on the list.)

True, you will find health care and education on just about every list of hiring industries or "hot" occupations.  But more than any other industries, health care and education are entirely driven by demographics.   And the demographics are starting to turn away from these fields.  For high school and college age students looking for a career that will take them through to retirement, I suggest looking elsewhere.

Here is a 2010 version of the population pyramid,

The age group that spends the most on health care are those 65 to 75 years old.  The leading edge of the baby boom (1946-1965) is just now entering this golden age of health care spending.  The trailing edge will enter this prime time in exactly 25 years, 2036.   At that point, we should expect the industry to begin shrinking, just as the students of today enter what should have been their prime earning years.

As for education, particularly higher ed, the situation is even less promising.  The current college age (20-24) population is the largest seen since the end of the baby boom and perhaps the largest we will see ever again.  Ten years from now we will have an usually small cohort entering college.

Education and health care look good today, but 20 to 30 years into a career, much less so.

Undernews: Return of Specie Money

Another important story largely flying under the radar is the return of specie money, as distinct from fiat money.

This piece in the Daily Telegraph describes the "Return of the Gold Standard as world order unravels".  In these troubled times, people are seeking money that has intrinsic value:  the value lies in the metal contained within the coin, rather than the value the object represents, like a paper dollar bill.

I see no need to abandon the concept of fiat currency.  But I am interested in the growing movement to have a second currency circulate alongside.  I see it as another early warning signal, like Walter Russell Mead's observation about the Singapore economy begin the canary in the coal mine of the world economy.

Undernews: European Border Crisis Update

The BBC reports on the continuing exodus of boat people from Africa to Europe.  Italy is trying to cope with the landings of craft on a small island off the Tunisian coast. 

Undernews: EPA to Cause Electricity Price Spike

Kudos to the Chicago Tribune for covering an important story that few others will touch:  coming EPA regulations will cause electricity prices to skyrocket.

The headline, "Consumers' electric bills likely to spike as coal plants close" hints at the problem, but the paper immediately fingers the culprit,

"Consumers could see their electricity bills jump an estimated 40 to 60 percent in the next few years.  The reason: Pending environmental regulations will make coal-fired generating plants, which produce about half the nation's electricity, more expensive to operate. Many are expected to be shuttered."

"What 'pending environmental regulations'?", you ask?  The Tribune does not quite dig that deep.  "Who is issuing these regulations?"  A careful reader will go away uninformed.

But it does point out that there is more than your electric bill at stake, everything that uses electricity will cost more, including schools.  Not to worry, as always "energy efficiency" will save us, as long as no one tells William Stanley Jevons.

Undernews: the Real Unemployment Story

Scott Johnson at Power Line explores the under-reported real story of this recession:  unemployment.  We are in the middle of losing two generations of workers:  new entrants (new college grads) who can't find that first entry-level, career-track job, and late-career professionals who were laid off a few years ago and now staff the ranks of the long-term unemployed.  Unfortunately, policies at the federal and state level seem designed to produce this outcome, from which we will suffer for decades.

Undernews: Denmark Closes Borders

Add the Kingdom of Denmark to the list of EU nations re-instituting border controls, according to this report.  Denmark is now monitoring its borders with both Germany and Sweden.

• Mark Steyn's take
• The BBC
• Financial Times

(Via Drudge)

Undernews: France Closes Border, Part 2

Catching up from last week, Daniel Hannan, MEP, writes about the closure by France of its Italian border and the implications of that act for EU unity.

Undernews: Ghost Cities of China

Yesterday, I linked to Brett Arends' MarketWatch column on projections that China's economy will pass America's in the next five years.

Maybe.

Having looked at the demography, I agree with Mark Steyn that China will grow old before it grows rich.

I have been to a number of academic seminars and have read a number of articles on the urbanization of China.  Whole cities will be created out of nothing to accommodate the droves of people leaving the countryside for the promise of a better life in an urban setting.

The Chinese are following the Field of Dreams principal of "build it and they will come."  Whole cities have been built, but stand empty, awaiting the droves to arrive.  Say what you will, at the height of our property bubble, at most a scattering of empty condo towers would scar the landscape.  Not whole cities sitting empty.  What impact will the bursting of the Chinese property bubble have on the larger world economy?

Check out this undated photo essay in Time magazine on the Ghost Cities of China.

Undernews 2: Re-Nationalization of Europe

Picking up on the theme I began in this post, I link to this post by John Derbyshire of National Review noting that the Re-Nationalization of Europe is picking up steam.  It seems that we've gone beyond the closing of the Franco-Italian border to other signs that the European project is running its course.

John reports that Germany is joining France in refusing entry of refugees of the late troubles in north Africa who pass through Italy.

Undernews: France Closes Italian Border

One of our favorite people, Mickey Kaus, is credited with inventing/popularizing the concept the of "the undernews" (stories largely ignored by big media, but explored by alternative media).  My candidate for such a story is this one from today's Wall Street Journal on the closure by France of part if its border with Italy.  (Yes, I am aware that the WSJ is "big media"). 

The border closure has to do with refugees from north Africa, fleeing the recent unpleasantness, seeking to use Italy as a route into France.  What struck me about the story is how this unilateral action by France flies in the face of what I understood to be the raison d'être of the European Union.  If one state feels free to close its border with another member country, then what is the point of the EU, again?

When I saw this article, it struck me on two counts, (1) it won't get much play in the media because of all the other stories in the news this week, and (2) it has the potential to be a major milestone in the disintegration of the EU, one that will only be recognized in hindsight.

Update 4/18/2011--See this post by National Review's John Derbyshire on the topic.