Income mobility and income structure

A chewy piece from Professor Perry about the widely-held perception that the American middle class has essentially gotten nowhere since 1980. The research he discusses purports to show that large numbers of individuals have moved up and down between income brackets.

Elsewhere, I've read that the middle earning bracket as a whole has not advanced, and the top end has become wildly richer. But if individuals can progress up this ladder, does it matter that the gap between the rungs has stretched?

A heavy golden straw in the wind?

Many deride "gold bugs" and their increasing insistence that for safety's sake one should have the tangible stuff and not trust third parties; but the Chinese have now called in their gold from London and parked it in Hong Kong.

(htp: Max Keiser)

Evolutionary Dead End?

Please forgive the digression, but all of this discussion of financial and social breakdown, overpopulation and impending water and energy shortages, lead me to make the following observations.

As a scientist with interest in just about everything, I have come to the conclusion that the underlying cause for most, if not all, of these problems is that our psychology and cultures have not caught up with the Scientific Revolution.

I will begin with that statement that science has emerged as the most useful method of determining fact, if not truth.

However, like our cousins the Great Apes, we still waste resources when they are plentiful, with no thought of the future. We still generally pick our leaders as the most virile male, i.e. the silverbacks, rather than their ability to actually solve problems.

And we still insist on pre-Enlightenment thinking, as is demonstrated by this piece from DC's Improbable Science 'blog:

A recent report by the King's Fund in the UK on complementary medicine contains the following passage:

“This report outlines areas of potential consensus to guide research funders, researchers, commissioners and complementary practitioners in developing and applying a robust evidence base for complementary practice.”

In other words, if we spend enough money, we will find the stuff that works, and best way to use it.

However, the US National Institutes of Health has spent over $1 billion in the past decade on carefully researching these practices. Not a single one was found to be of benefit. This was so distressing to some there, that each new report resulted in a slew of resignations.

Water wars

James Quinn raises another critical resource issue, namely, water.

Taking his list "Total Renewable Freshwater Supply, by Country" (which excludes Australia, though the situation there could easily become much more challenging), I divided the figures by population size to obtain a per capita water supply, as follows:

From this we note that Canada may have something to offer the USA (Al Capone would be into mineral water now, I guess), and that India may face an even more desperate shortage than China, unless and until desalination plants take off. And parts of South America may have their attractions.

But the Congo: no. I once taught a lad whose family trekked 1,000 miles to the coast to get away from the civil war, and he very nearly didn't make it, because of a blood-thirsty armed patrol. His father nominated him for the chop rather than the favourite son, but they eventually relented.

Any views from survivalists as to where to move the family for a long-term future?

Don't save the planet, save the country

A couple of days ago, the Daily Telegraph reported on threats to our energy supply. "There will be huge reliance in the short term on gas, with up to 50 per cent of electricity coming from gas fired power stations. "

Instead of challengeable pi-jaw about global cooling/warming/okay-let's-compromise-and-call-it-change, why don't we look to reducing our energy use for the sake of liberty? No more dirty deals with Putin, Gaddafi, the Saudis et al. And less chance of another industry-crippling 1974 energy price hike.

An initiative that I think will run long and grow big is "transition towns", started by a man called Rob Hopkins in Totnes, Devon. Out from among the patchouli-scented crystal-wavers and hare-worshippers will yet come ideas to help us adapt to Peak Oil.

The Fourth Horseman

Michael Panzner's prescient book "Financial Armageddon" listed four major threats to the economy: debt, retirement and healthcare benefits for the elderly, government bailouts, and financial derivatives. So far, three have exploded into public consciousness; but the fourth is still to come.

Some say that the derivatives market is now worth over $1 quadrillion, as compared with gobal GDP of some $55 trillion. For most people, these numbers mean nothing, so here's a graphic representation:

Supposedly, this shouldn't matter, since every bet involves two parties and so the sum total is zero. This ignores counterparty risk, i.e. the chance that the other person will fail to deliver when the time comes. It's the sort of thing that busted the UK's oldest bank, Barings.

From what little I understand, the derivatives market suffers from much the same complexity and obscurity as the packaged mortgage mess - the dealers are making loads of bets with loads of other people - so the misery could get spread around rather than just take down one or two incautious players.

If just 1% of the derivatives market fails, this equates to some 18% of global GDP. We in the UK are dealing with an economic contraction of less than 6% year-on-year, and that's causing paroxysms.

An argument for holding some emergency cash, away from the banks?

Fight back against self-organisation

A lovely contrarian piece from Lifehacker: dump your to-do-list. Just do one thing at a time.

I can see the logic in this: when I've listed all I have to do, the heart sinks and then I rebel against the lot. When you've planned your life too systematically, the life-impulse within you is driven to smash the system. A degree of disorder, of randomness, of openness to change, is like opening a window in a stuffy room.

"Delight in Disorder" by Robert Herrick:

A sweet disorder in the dress
Kindles in clothes a wantonness:
A lawn about the shoulders thrown
Into a fine distraction--
An erring lace, which here and there
Enthrals the crimson stomacher--
A cuff neglectful, and thereby
Ribbands to flow confusedly--
A winning wave, deserving note,
In the tempestuous petticoat--
A careless shoe-string, in whose tie
I see a wild civility--
Do more bewitch me than when art
Is too precise in every part.