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Sunday, September 28, 2008

Recession and The Environment II – Climate Change: Root Causes and Solutions


Here you will find further elements to support the daring- almost presumptuous hypothesis advanced in my previous post "Recession and The Environment I. "

Many of you may have been surprised, as I was myself, (confidentially) by the extent of my uncharacteristic daring leading to the first analysis and opinion, as to the root causes and solutions to the the top "Re-current Affairs" issue of the day: "Economic & Financial Recession" cf. Title above.

Well rather than back-off, I'm sure you will be pleased to read further evidence in support of my previous hypothesis. The urge to further research the issue came rapidly. Evidence came equally rapidly. A couple of Google searches and my experience of good sources turned up a comment on "Recession, Energy <=>Environment, Finite Resources, Climate Change

Contributor whose "alias?" is "MARKANASH" posted this comment 24 Sep 2008, on the Idle Scrawl Paul Mason's blog. Paul is a much travelled Economist and BBC reporter.

"You're totally missing one fundamental point. Our present way of life is predicated on using tomorrow's money to pay for what we want today (debt). This in turn relies on endless economic growth. Economic growth on the scale to which we have become accustomed is based almost entirely on cheap energy - stacked and stored in the earth for millions of years and now having been gorged by humans for the past 100 years. The era of cheap energy ends about now; our Energy Return on Energy Invested will drop precipitously in the coming decade or two. No amount of fancy, debt-fuelled financial products, derivatives and systems will operate without reliable (ie cheap energy based) economic growth. The rates of economic growth we've experienced in our lifetimes are about to cease (or at least fall dramatically) as we figure out how to live within our energy means. So, forget trying to put back into its shell the scrambled egg that is now the Anglo-US financial system. Start figuring out how to live without cheap energy and, so, without unsustainable economic growth. I don't have the answers, but I do know that the transition from us relying on cheap (borrowed) energy to a lifestyle based on the sustainable use of real-time energy is going to be painful. Bankers and financiers have yet to see the problem, let alone figure out solutions. "

My rapid search turned-up complimentary evidence in support of MARKANASH's blunt opinion on bankers and financiers:

There is a very commonly held view and justifiable public outcry on executive remuneration packages-here "Top B's" B short for merchant bankers - and their followers. This is put forward by many as a leading root cause of the present predicament. Here I contend that this fits the "irresponsibility theme" under pinning Pacala's heart felt analyis and disgust, which I share to a large extent and amplify, need I add. (cf. my previous post).

One of my "hero's-mentors", here in France, is Jean Francois Kahn, JFK to the intimates, we have met a couple of times - no kidding. JFK, as he has done for several years now, again lashes out at the irresponsible discrepancy between Top Dog remuneration packages and results, and also to their collective disconnection or memory loss from common reality.
JFK has a very imagery way of situating the levels of such packages. He compares the the top Dog Salaries & remuneration packages to the number of centuries the common worker on minimum wage would need to work. Yes it runs into centuries! From memory this tallies up to something like from the 6th century to the present day (15 centuries)!!!

In the current case he considers that Bankers morality - professional ethics (responsibility) is strongly questionable and a major contributing factor to the current financial crisis and recession. He remarks that the president of Lehmans Bros helped himself to 23M$ salary or package last year while in the same year he recommended that the US admin. refuse a 5M$ budget to help under-privileged - the dirt poor US citizens. This is just one example of many. Kahn calling "a spade a spade" frankly considers this behaviour to be totally immoral, and who can disagree? I wonder how much fresh cash this approach may generate?

Here rests the case for the prosecution!

Source: Paul Mason's blog post "We are not doomed: Discuss" which started the debate among his contributors, eg. "markanash" quoted above amoung others. Paul supplies links to short summaries of underlying economic theory. It's a quick read & well worth a squint which is all the reading necessary - He defends the system concluding: "In short I propose what could come out of this is a highly regulated and more stable info-capitalism." Wonder why it did not come before? Then my experience comes from ... partly through Aeronautic & Nuclear Materials Quality Control, Assurance Standards & Stringent Clients Requirements - no kidding there, at least in the West. No wonder students flee the exigence of science and engineering!

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