The Next Golden Age, Part II

The Next Golden Age will bloom once the high cost structures of the U.S. economy implode in insolvency

By Charles Smith

Yesterday, in The Next GoldenAge, Part I, I laid out why the Savior State and its sprawling fiefdoms (both domestic and global) are unsustainable and thus will inevitably devolve/collapse.

Based on the historical accidents of plentiful cheap energy, global dominance via the destruction or marginalization of competitors and favorable demographics, the Savior State and its global Empire arose to reach the present extremes of marginal return: treasure, blood and effort are thrown at "problems" even as the returns sink to negative territory.

Exponential growth of State revenues and debt (public and private) is unsustainable, yet the status quo will immediately implode without borrowing on a vast and rising scale (the Savior State currently borrows 11% of GDP every year, a sum sure to rise).

We can thus look forward to the demise of the entitlement mentality:

The entitlement mentality is a prison of resentment, self-absorption and complicity in the "project" of enlarging the Central State and its Power Elites' share of the resources, output, wealth and income of the nation and the world.

Now I would like to focus on the pragmatic result of marginal return and protected fiefdoms: an intrinsically high cost structure in the U.S. economy.

I have addressed this many times over the past few years:

Lowering the Cost Structure of the U.S. Economy (August 29, 2008)

Is Higher Education Worth a Lifetime of Debt? (August 26, 2009)

What Won't Be Changing (February 2, 2009)

This Week's Theme: The Coming Great Depression (November 24, 2008)

Has Capitalism Failed? (December 19, 2008)

The key dynamics of high cost structure are:

A. Marginal return: as the returns on investment plummet to zero, the status quo attempts to "solve" the "problem" by borrowing and throwing ever-larger sums of money at the "problem." Thousands of pages of legislation add more complex layers of bureaucracy to systems already groaning under a crushing complexity and resulting inefficiency. Returns soon drop to negative. 

B. Cost of borrowing rises: One way to think of this is to recall the physics of corn ethanol: consume a barrel of oil producing the ethanol and get 2/3 of a barrel of equivalent energy as a result. The 1/3 loss is filled by borrowed money, which masks the loss and shunts the burden forward, but with the added cost of interest. Thus marginal return which is cloaked by borrowing merely doubles the burden going forward: not only is good money being put after bad, but the money is borrowed, leaving futere taxpayers/citizens with an ever-rising burden of interest to service. The economy loses not just in the malinvestment but in capital and national income being diverted to pay interest on the money squandered in the misallocation/ malinvestment.

The Next Golden Age, Part I

The Next Golden Age will blossom without the burden of the Savior State and its Elites and fiefdoms

By Charles Smith

I recently received this insightful challenge to address the positive future that potentially lies beyond devolution and collapse:

Good morning sir, I love your writing I read it everyday. You focus so much on the coming collapse and not at all the inevitable rebirth and the beginning of the next 80-year cycle. Would you spend some time speculating about the new golden age beginning in 2021 or so? Your glass half empty pessimism is sometime overwhelming. Thank you,

                                              - Sgt C., U.S. Marines

Thank you, Sgt C., for suggesting the challenge of imagining not just collapse (all too easy) but a positive rebirth from the ashes of the present unsustainable status quo.

In a way, I've already tried to address this with my books, but with the focus on individual, household and community actions. What I will attempt in this occasional series is to describe future large-scale changes: financial, cultural and material.

1. The reduction of complexity and the end of marginal return. The chief characteristic of the U.S. economy and society is marginal return: ever-larger sums of money, energy, human effort, etc. are dumped into a "problem" while the return on that prodigious investment diminishes to less than zero.

The reasons are not complex: one is complexity itself, fed by entrenched fiefdoms protecting their payrolls and perquisites, the pernicious effects of the entitlement mentality and an organizational bureaucratic sclerosis which can be defined as a focus on process over results.

In the post-collapse-of-the-status-quo future, all the wasted motion will be lost. It will no longer be affordable, so it will go away.

Results will matter, process won't--the reverse of today's cultural worldview. Nowadays, by following procedure you CYA--protect yourself from criticism--and also evade responsibility for the outcome.

My favorite illustration of this may be apocryphal. Someone goes to Thomas Edison's laboratory and asks about the enterprise's regulations. "Regulations?" Edison is said to have retorted. "We're trying to get something done here." Precisely.

The ultimate luxury and waste is a CYA focus on procedure to avoid responsibility for poor results (or negative results). That luxury will be gone.

Let me illustrate the reduction in complexity and process with one example we can all relate to: going to the doctor. In the New Golden Age, everyone will pay for healthcare with cash. There may well be some limited forms of catastrophic coverage, but the entire mindset of entitlement ("healthcare is a right," etc.) will be gone.

You choose the doctor, and he/she agrees to offer care for a sum (just like in the "old Golden Era" of the 1950s). You receive the care/treatment, and then pay the doctor in cash or equivalent.

Currently, it is estimated 40% of the $1 trillion we spend on Medicare/Medicaid is squandered on shuffling paperwork/electronic files and fraud. Another 40% does not actually help the patient or is needless (defensive medicine, tests given for profit only, etc.). The opportunities for fraud in the sprawling bureaucracy are endless.

Now compare it to the Next Golden Age. Where is the opportunity for fraud when care is paid for in cash? A "bad check" slipped in lieu of real money? Perhaps, but in general the staggering waste and fraud of the current system vanishes.

How much of this transaction is "overhead," paper-shuffling, filing of insurance claims, arguing over who pays for what, etc.? Very little. If the doctor overcharges (i.e. charges more than other equivalent services) then his/her business will decline.

What about poor people who can't pay for care? In at least some cases, "poverty" is at root mismanagement, carelessness and perhaps a self-destructive worldview. These people will either learn to manage their money better or they will have to wait for whatever care is offered by charity.

Reinhart and Rogoff Were Wrong Even Without the 'Spreadsheet Error'

They forgot that we’re all individual microeconomists, and so long as governments stay out of our way, we’ll be productive

By John Tamny
Though Kenneth Rogoff has written some fairly obtuse op-eds over the years, the book he co-authored with Carmen Reinhart, This Time Is Different, was very much a worthwhile read. If their Keynesian, Phillip’s Curve ideology is ignored, they offered some really interesting statistics.

Most useful to this reader was their soberly introduced point that Greece has been in default half of its modern existence. About government defaults more broadly, they similarly clarified that they’re rarely an all or nothing thing, rather they generally involve slight ‘haircuts’ for creditors. And while they didn’t tie this to modern times, they made the essential point that the U.S. Treasury has defaulted on its debt before; specifically in the 1930s when the dollar’s gold value was reduced to 1/35th of an ounce from 1/20th.

As many are aware, Reinhart and Rogoff made the news for an unfortunate reason last week, all due to a ‘spreadsheet error’ committed in the writing of their much quoted book. They’d found that when debt rose above 90% of GDP some sort of ‘tipping point’ was reached whereby country growth slowed down after the 90% line was crossed. But now it seems their calculations weren’t correct; that heavy country debts of the 90% variety don’t correlate with ‘malaise’ in any statistically significant way.

Quite predictably, reliably delusional Keynesians have taken the above news and concluded that Reinhart and Rogoff’s calculations needlessly caused massive global unemployment. Despite government spending always occurring at the expense of private sector outlays, Keynesians persist in their juvenile view that it’s more economically stimulative for governments to waste money over it being lent out or invested by profit-motivated individuals. Unsurprisingly, they took the news as vindication of their comically sad belief that politicians can spend us to prosperity with money taxed and borrowed from us first.

Human ingenuity and natural resources

Let’s not forget to celebrate the human resources — knowledge, ingenuity, know-how, creativity, entrepreneurship, and imagination

by Mark J. Perry 

On Earth Day “events are held worldwide to increase awareness and appreciation of the Earth’s natural environment.” As we observe Earth Day this year, it might be a good time to appreciate the fact that Americans get most of their plentiful, affordable energy directly from the Earth’s “natural environment” in the form of fossil fuels (coal, natural gas, and petroleum). It’s largely those energy sources that fuel our vehicles and airplanes; heat, cool, and light our homes and businesses; and power our nation’s factories and raise our standard of living. Shouldn’t that be part of “increasing our awareness and appreciation of Earth’s natural environment” — to celebrate Mother Earth’s bountiful natural resources in the form of abundant, low-cost fossil fuels?

The chart above illustrates the importance of the Earth’s hydrocarbon energy treasures to America — in the past, today, and in the future. Over almost a one-hundred year period from 1948 to 2040, fossil fuels have provided, and will continue to provide, the vast majority of our energy by far (based on Department of Energy data here, here and here). Last year, fossil fuels provided almost 84% of America’s energy, which was nearly unchanged from the 85% fossil fuel share twenty years ago in the early 1990s. Even more than a quarter of a century from now in 2040, the Department of Energy forecasts that fossil fuels will still be the dominant energy source, providing more than 80% of our energy needs. So, despite President Obama’s dismissal of oil and fossil fuels as “energy sources of the past,” the Department of Energy’s own forecasts tell a much different story of a hydrocarbon-based energy future where fossil fuels serve as the dominant energy source to power our vehicles, heat and light our homes, and fuel the US economy.

Energy fact of the day

US CO2 emissions per capita in 2012 were the lowest since 1964

By Mark J. Perry 

It’s been widely reported here and elsewhere that CO2 emissions in the US have been falling pretty dramatically over the last five years, thanks in large part to the substitution of natural gas for coal to generate electricity in the US. Natural gas is much more environmentally friendly than coal, which emits about twice as much CO2 as gas when used for electricity generation. Last year, CO2 emissions in the US fell to an 18-year low, the lowest level since 1994, and C02 emissions from coal fell to a 26-year low, the lowest since 1986. Further, as the WSJ reported this week (“Rise in U.S. Gas Production Fuels Unexpected Plunge in Emissions“) the US now leads the world in reducing CO2 emissions thanks to the shale revolution. At the same time that America is using less coal and more shale gas and reducing C02 emissions, Europe and Asia are becoming more coal-dependent for electricity generation, and increasing C02 emissions.

Compared to the last time that CO2 emissions were at 2012′s levels — back in 1994 — real GDP in 2012 was 55% higher and the US population was 17.5% larger, making the drop in greenhouse gas emissions to an 18-year low in 2012 even more impressive. Adjusted for the population, CO2 emissions per capita last year were the lowest since 1964, almost 50 years ago (see chart above, data here and here). According to Department of Energy forecasts, the decline in per capita CO2 emissions is expected to continue so consistently that within about 20 years, greenhouse gas emissions per person in the US will be below the level in 1949!

Health Be Damned

Denmark Hopes Cheaper Soda Will Boost Economy

High value-added taxes and easy border access have long drawn Danish consumers to German grocery stores. Now, the government in Copenhagen hopes that repealing a tax on soft drinks and beer will reduce cross-border shopping and boost the domestic economy.

The Danish government is abandoning a beverage tax that it says is costing the country millions of euros as consumers cross the border to shop in Germany instead.

The tax on soft drinks is to be halved by July and completely abolished by next year, making a 1.5-liter bottle of soda three kroner (€0.40) cheaper in the end. The lesser tax on beer is to be cut by 15 percent by July.

Finance Minister Bjarne Corydon told public broadcaster DR on Monday that the tax's repeal, which has broad support in parliament, would provide a "powerful growth spurt" to the Danish economy.

Cross-border shopping is nothing new to Denmark, as many goods have long been more affordable in Germany and much of the population lives a short trip away from Schleswig-Holstein, Germany's northernmost state. However, the tax on soft drinks and beer, implemented to encourage healthier drinking habits, dramatically increased the traffic.

A report commissioned by the Danish grocers' association DSK last year found that 57 percent of Danish households had crossed the border into Germany to buy beer or soft drinks over the past year -- the highest number ever measured in the regularly conducted study.

Germany’s Trial Balloon Of A “Plan B”

Each country would be exclusively responsible for its own debts, and not the debts of other countries

By Wolf Richter   

Some prominent Germans have publicly expressed their doubts about the future of the euro. A few politicians have tried to jam anti-euro sound bites edgewise into the evening news. And an anti-euro party, the Alternative for Germany, is forming just in time for the September elections, hoping to garner enough votes to move into parliament.

But those close to the epicenter of power, those near Chancellor Angela Merkel, have to toe the line. And the line is that the euro is far more than just a currency, that it’s a sacred concept, a sort of religion worth saving no matter what the costs. Even much of the opposition toes that line. While the possibility that a small country might exit the euro has been accepted more or less, the euro itself has been inviolable in those circles. Until now.

“I give the euro medium-term only a limited chance of survival,” said Prof. Dr. Kai A. Konrad,Chairman of the Council of Scientific Advisors to the Ministry of Finance, an advisory body to that epicenter of power. In his day job, he is Director at the Max Planck Institute for Tax Law and Public Finance. In an interview published in the Welt, he floated a trial balloon, an alternative, a heresy for Germans, a grand compromise of sorts, an exit strategy if you will, a way out of the crisis for every country in the Eurozone, a Plan B whose very existence the government has strenuously denied.

Could Bitcoin be the money of the future?

Unelasticity is Bitcoin’s greatest strength and true genius

by DETLEV SCHLICHTER

The crypto-currency Bitcoin is still merely a speck on the global monetary landscape. It is young, experimental, and for all we know, it may ultimately fail to break into the monetary mainstream. However, on a conceptual level I am willing to call it a work of genius and arguably the most exciting development in the field of money for more than 130 years. Let’s say since the start of the Classical Gold Standard in 1879. Does this sound like hyperbole? Well, let me explain.

The Decline and Fall of Capitalist Money

The 20^th century was, broadly speaking, a period of almost constant monetary decay. At around 1900 most economists, politicians and bankers would have correctly stated that global capitalism – an international market economy facilitating the free exchange of goods and services across political borders and thus allowing extensive human cooperation through trade – required an international, apolitical, and hard form of money. Such money was gold. It was the basis of the capitalist economy and it imposed strict discipline on all market participants. Crucially, that included governments and banks. Governments had to operate pretty much like private businesses. They had to balance their books, i.e. live within the means provided by taxation, and if they borrowed money in the marketplace their lenders were at full risk of default as no government could print money (gold) to repay loans or even meet interest payments on loans. Banks, of course, issued banknotes or bank-deposits that were not backed by gold but still used by the public as if they were money proper – these were and still are ‘money-derivatives’ – but again they did so at full risk of default as nobody could ‘print’ bank-reserves (gold again) to bail out the banks in case the public tired of the ‘derivatives’ and wanted to hold gold instead.

The Last Man in Russia: The Struggle to Save a Dying Nation

Inside the soul of a drunk and bitter country

By Peter Pomerantsev

Dmitry Dudko wanted to be a priest in a violently atheistic Soviet Union. When the KGB came to arrest him in 1948, they demanded he recant poems denouncing Stalin. “I won’t sign anything,” he told them. “I spoke the truth.” He got 10 years’ hard labor in the freezing mines of the far north. In the gulag he continued to pray, continued to write, continued to insist that Christ’s law was higher than the Kremlin’s. He was given another 10 years. When he was finally released, he began to preach in a cemetery on the outskirts of Moscow. He spoke against the state’s attack on the family, chastised the Orthodox establishment for toadying to the Kremlin, denounced the KGB for destroying communities by making men report on one another, taught Jews and Russians and Tatars to huddle together in faith and hope and overcome their ethnic bitterness.

In the 1970s, in a late Soviet period defined by endless cynicism and conformism, when no one believed in anything (least of all communism) and submission to the Kremlin for the sake of submission became the essence of the system, Dudko became legendary. Thousands would come to his sermons. Foreign correspondents were so inspired by him, they smuggled Dudko’s works out of the U.S.S.R., and his fame spread throughout the world. He became a beacon of anti-Soviet dissidence, a religious Solzhenitsyn, a free man in a totalitarian system. In 1980 he was arrested again. This time the KGB’s approach was more subtle: “we are guilty before you, and the state is guilty before the church,” they told him; they agreed that Russia needed to find faith; they hinted that they were believers just like him; they blamed all the bad bits of communism on the Jews. Wasn’t it time for us Russians to stick together? They said they would give him a chance to preach to a much greater audience if only he would do one tiny, little thing for them.

The Poverty Lie

How Europe's Crisis Countries Hide their Wealth

By SPIEGEL

How fair is the effort to save the euro if the people living in the countries that receive aid are wealthier than the citizens of donor countries like Germany? A debate over a redistribution of the burdens is long overdue.

The images we see from the capitals of Europe's crisis-ridden countries are confusing to say the least. In the Cypriot capital Nicosia, for example, thousands protested against the levy on bank deposits, carrying images of Hitler and anti-Merkel signs, one of which read: "Merkel, your Nazi money is bloodier than any laundered money."

German Chancellor Angela Merkel was greeted by a similar scene when she visited Athens in October 2012. An older man with a carefully trimmed moustache and pressed trousers stood in Syntagma Square. The words on the sign he was carrying sharply contrasted with his amiable appearance: "Get out of our country, bitch."

Despite these abuses, the protesters and all of Merkel's other critics in Rome, Madrid, Nicosia and Athens agree on one thing: Germany should pay for the euro bailout, as much as possible and certainly more than it has paid so far.

They argue that Germany is a rich country that has benefited more than all others from the introduction of the euro, and that it has flooded other European countries with its exports, becoming more prosperous at their expense.

Germans Own Less than Those Asking for Money

But there is also a second image of Germany, one that's based on numbers, not emotions. The figures were obtained by the European Central Bank (ECB) and released last week. This image depicts a country whose households own less on average than those that are asking for its money.

In this ranking of assets, Cyprus is in second place Europe-wide, while Germany ranks much lower, even lower than two other crisis-ridden countries, Spain and Italy.

And this Cyprus, with its affluent households, is now supposed to receive €10 billion ($13.1 billion) from the European Stability Mechanism (ESM), the Euro Group's permanent bailout fund, and the International Monetary Fund (IMF), at least according to the decisions reached after dramatic negotiations, which the German parliament, the Bundestag, is expected to approve this week. But a new question is arising: Why exactly are we doing this? Isn't Cyprus rich enough to help itself?

Why can't the IMF face up to the truth about the failing euro?

How sad it is that in order to get yourself admitted to hospital you have to shoot yourself in the foot first

By Jeremy Warner

I've been in Washington most of this week for the spring meeting of the International Monetary Fund. I wish I could say there was light at the end of the tunnel, but the reality is still deeply depressing. Sorry to use cliches, but two sayings spring to mind: fiddling while Rome burns, and re-arranging deck chairs on the Titanic.

In "The Economic Consequences of the Peace", the British economist, John Maynard Keynes, wrote that his preference in any negotiation or arbitration was for "violent and ruthless truth telling" but there has been very little evidence of that in this week's discussions. Instead of addressing the underlying causes of today's economic funk – the failing euro – debate has focused on marginal fiscal and monetary issues such as whether the UK and the US are consolidating too fast.

That the IMF's chief economist, Olivier Blanchard, and his managing director, Christine Lagarde, could think some minor loosening of the fiscal purse strings in the UK either appropriate or capable of getting growth going again, when there is such a deep seated crisis going on in Europe is not just odd, it is pitiful. I've already written about the wider failings of the IMF in confronting the worst economic crisis since the second world war , but there is a lot more to say about it.

Instead of forcing eurozone leaders to face up to the truth – that their project in its present form is failing not just them, but the whole world economy – the IMF busies itself with irrelevances such as whether the UK has the fiscal space for a little more debt fuelled demand management. Worse, it meakly goes along with attempts to sustain what is plainly in its current form a completely unsustainable endeavour.

One of the big "puzzles" under discussion this week at the IMF is why the massive degree of monetary stimulus applied to advanced economies over the past four years has gained so little traction. I would have thought the answer was obvious. You can have as much demand management as you like, but as long as underlying imbalances in the world economy go unaddressed and unresolved, companies and households are not going to have the confidence to spend and invest.

We are all Alexandrians now

Remembering Lawrence Durrell, Predictor of our Postmodern World

by Peter Pomerantsev 

Not Joyce, not Kafka, not Proust, not Pasternak, not Garcia Marquez, not Bellow. The most important 20th-century novelist for a 21st-century reader could well be Lawrence Durrell. This year celebrates the centenary of his birth. Next to nothing is taking place to celebrate it. But Durrell, whose best work came in the late 1950s and early 1960s, was the first to explore the poetry and puzzles of life in an era of globalization (a clunky term Durrell would have improved on), hyphenated identities, perpetual movement. “I think the world is coming together very rapidly,” he said in an interview in 1983, “so that within the next fifty years one world of some sort is going to be created. What sort of world will it be? It’s worth trying to see if I can’t find the first universal novel. I shall probably make a mess of it—but we shall see.”

The city at the center of his masterpiece, The Alexandria Quartet, is the prototype of the global village, of the smudged meta-city we increasingly inhabit. Published between 1957 and 1960, the Quartet is a series of interlinked novels set in Alexandria preceding and during World War II, but it’s uncanny how its political disorder anticipates our own. The Alexandria of the Quartet is run with an ever-weaker hand by Western powers losing their will to rule, and is ever-more dominated by ambitious but corrupt emerging nations, influenced by deracinated tycoon financiers, stirred on the streets by Islamic “nightmare-mystics, shooting out the thunderbolts of hypnotic personal-ity.” The state of Israel, off-stage but central to the plot, divides loyalties to the point of death and tragedy. The Quartet is an exceptional political thriller: imagine John Grisham rewritten by Joyce.

“Five races, five languages, a dozen creeds: five fleets turning through their greasy reflections behind the harbor bar,” writes Durrell. “Turks with Jews, Arabs and Copts and Syrians with Armenians and Italians and Greeks. The shudders of monetary transactions ripple through them like wind in a wheat-field ... this anarchy of flesh and fever, money-love and mysticism. Where on earth will you find such a mixture!”

What ever happened to France's voice in Europe?

What ever happened to France's voice in Europe?

By Luke Baker and Mark John

A few hours after midnight one Sunday last month, as negotiations over a rescue for Cyprus dragged into a second day, French Finance Minister Pierre Moscovici fell asleep.

Most euro zone ministers in Brussels that night failed to notice, continuing to pore over the details of the multi-billion-euro deal. It fell to Christine Lagarde, French director of the International Monetary Fund, to approach Moscovici and nudge him awake, according to witnesses at the March 24 talks.

The sight of the IMF head waking up France's top finance official in a crisis meeting neatly illustrates a question that is troubling European diplomats: what has happened to France's voice in Europe?

For decades France has been central to the European project that was born out of World War Two and now reaches from Europe's Atlantic coast to beyond the former Iron Curtain.

Straddling north and south, France has a unique perspective on Europe. It is the European Union's largest economy after Germany. One of six founders of the original European coal and steel community in 1951, it has shaped and often led, the institutions that make the EU tick.

The readiness of successive French and German leaders to work together has for decades created a consensus among two former enemies that has steered Europe through crisis and change - from the end of the Cold War and Germany's reunification, to the expansion of the EU to the east and the introduction of the single European currency in 1999.

For much of the past four years, during which the euro zone was nearly torn apart by a debt crisis, the Franco-German axis has held true. But in the past six months, questions have arisen about what France is offering in terms of fresh ideas, and how it is dealing with the rest of Europe.

"You can see a shrinking presence, a progressive disappearance of France on most issues that concern the economic agenda," said Fredrik Erixon, director of the European Centre for International Political Economy, a Brussels think tank.

We've Become a Society of Self-Deluded Children

We've Dug A Pretty Damn Big Hole For Ourselves

by James H. Kunstler

The diminishing returns of technology are insidious, and they are ever with us. By this I mean the slow erosion of the quality of life, despite the impression that technological wonders only make our lives better.

The most obvious example is what happened to the telephone over the past thirty years. We computerized every phone system in America to “improve communications.”  The net effect is that after all that time and expense (billions of capital investment), it is now nearly impossible to get a live human being on the phone, whether you are calling a Fortune 500 corporation, a non-profit charity, or your best friend. Has that improved communication? What you get instead are robots that waste big chunks of your time forcing you to listen to complex call-routing menus – often ending in futility.

Companies and institutions assume that they benefit from the “efficiency” of not having to pay gangs of human receptionists. But they only succeed in annoying their customers and clients, who are treated as pests to be avoided. In effect, phone systems became firewalls, not communication enhancers.

Add to that the more recent phenomenon of cell phones and smart phones, which, for all their charms, 1) don’t work in all locations, 2) drop calls frequently, 3) have lousy sound quality, 4) feature time delays that make people talk over each other constantly, 5) erode real-time social relations with distracting apps and web features, and 6) possibly harm people’s brains by constantly rinsing them in microwaves.

A larger issue of technology’s effect on culture is the erosion of a shared sense of what is going on in the world based on reality. Increasingly and insidiously, the consensus about how the world operates is based on things that constitute unreal cultural constructions, especially TV shows, the daily Web-flow, computer games, and pseudo-informational memes based on gossip, make-believe, and wishes. The self-referential nature of this process, by the way, is what generates the cultural mood of irony, especially among young people, who are the most thoroughly and immersively hostage to a cognitive field of rapidly degenerating show-biz artifacts that become more ridiculous with each iteration, self-reference, or mutation – until daily life seems like little more than a continuous Gong Show of implausible made-up spectacle. You might end up thinking that Federal Reserve Chair Khloe Kardashian is releasing a new cologne which can be used as an alternative fuel one hundred times more powerful than gasoline and exported worldwide to reduce the trade deficit, save Social Security, and make America energy-independent.

This is a time in history when it’s hard to take anything seriously, including our fate.

Confidence in European project slowly destroyed

SaxoBank CEO: "We Must Re-Evaluate The European Union"

by Lars Seier Christensen

I have been interested in politics since I was a kid. That is why I remember Denmark’s European Economic Community (EEC) referendum, although I was only nine years old. Election nights were always exciting and I was allowed to stay up a little longer than I otherwise would be allowed to in our home in Loegstrup, outside of the town of Viborg in the western part of Denmark. Here, we had supper at 5pm, I then did my homework and went to bed at a proper time. It was a bourgeois home; my father was, by most accounts, conservative, but voted for The Liberal Party, as did most people in the countryside.

I remember the referendum on October 2, 1972, in a positive light. Denmark stepped onto the main stage and the support of the people was absolutely clear. Voter turnout was over 90 percent and almost two out of three Danes voted for Denmark’s entry into the EEC.

The EEC was perceived as something positive in our home, as it was in most of bourgeois Denmark. I stayed unconditionally positive for many years to come. Even in the Young Conservatives, we were supporters of a European union and some of us even wore blue and yellow EU socks as a symbol of this attractive, long-term plan. But despite this very positive starting point for our view of the EU, I must confess that, over time, this support and optimism evaporated. Massive central bureaucracy, European arrogance and lack of respect for the independence, history and culture of the national states slowly destroyed confidence in the project.

When I look back, I must admit that it took me too long to recognise what the European project really was. But I also have to state that this recognition came much later to many others and some of our career politicians obviously still do not get it. But the Danes, the citizens, the people have smelled the rat. From this point on, it will just be more and more uphill for the EU supporters when new measures need to be adopted, although there is no reason to believe that they will not be trying over and over again.

Earth Day's good news

We need a dose of realism about real environmental challenges 

By Bjørn Lomborg
Shale gas revolution has curtailed U.S. carbon dioxide emissions.

Year after year, we are treated to a message of environmental doom and gloom and admonitions on Earth Day. On the back of this sentiment in wealthy countries, governments have invested billions of dollars in inefficient, feel-good policies such as subsidizing solar panels and electric cars.
But there are far better ways to improve environmental prospects for humanity and our planet. On Earth Day, we need more fracking, more wealth, smarter investments and fewer inefficient subsidies.

German taxpayers have poured $130 billion into subsidizing solar panels, but ultimately by the end of the century, this will postpone global warming by a trivial 37 hours. The electric car is even less efficient. Its production consumes a vast amount of fossil fuels, and mostly it utilizes fossil fuel electricityto be recharged. Even if the U.S. did reach the lofty goal of 1 million electric cars by 2015 — costing taxpayers more than $7.5 billion — global warming would be postponed by only 60 minutes.

These beguiling policies cost a fortune but make little difference to the environment because the technologies are still not ready. That's why we need to invest more in long-term research and development for green innovation. This would be much cheaper than current environmental policies and would end up doing more good for the climate.

If we could make solar panels 2.0 or 3.0 cheaper than fossil fuels, we could get everyone, including the Chinese and Indians, on board for a greener future.

Moreover, our focus on solar and electric cars diverts us from the world's most deadly environmental problems. In wealthy countries, most environmental indicators are getting better. We have cleaner air and cleaner water, and we suffer fewer environmental risks. But air and water pollution kill 6 million people each year and harm billions worldwide.

Wealthy countries largely solved these problems through economic development.

Poor countries should have the same opportunity to develop — so they, too, can have clean drinking water and switch to cleaner energy sources, instead of using dung and twigs for fuel.

We can also directly intervene in poor countries. Many charitable organizations are involved in solving these problems by improving access to clean water and sanitation. By addressing these challenges, we do far more good for our planet.

Earth Day also presents an opportunity to recognize our own environmental achievements. In spite of decades of political wrangling, which failed to produce a meaningful global climate policy, it was ultimately the shale gas revolution that curtailed U.S. carbon dioxide emissions.

Fracking has caused a dramatic transition to natural gas, a fuel that emits 45% less carbon dioxide than burning coal. Data from the U.S. Energy Information Administration showed that in 2012, carbon dioxide emissions was 12% lower than the peak in 2007. The shift from coal to natural gas is alone responsible for a reduction of between 8%-9% of the entire U.S. CO2 emissions. In fact, it amounts to twice the reduction that the rest of the world has achieved over the past 20 years.

All energy projects have risks, and though the dangers of well contamination from fracking have probably been exaggerated, tighter regulation would reduce risks further. Also, natural gas is not the ultimate energy breakthrough because it is still a fossil fuel. Even so, fracking is likely the best green option of this decade. And if fracking happened worldwide, emissions would likely decline substantially by 2020. Over the coming decades, we need to drive down the cost of green energy through smart investments in green innovation.

This Earth Day, we need a dose of realism about real environmental challenges — such as the air and water pollution that make life so miserable for billions — and the real opportunities that exist for environmental innovation, to make our planet a better place.

Boston: what turns nice guys into nihilists?

It isn't the lure of foreign jihad but rather the confusions and self-loathing of Western society itself that can turn youngsters violent

by Frank Furedi 

Everybody is asking the same question: what turned these apparently ordinary brothers into cold-blooded Islamic terrorists? By all accounts, Tamerlan and Dzhokar Tsarnaev were, as Americans say, ‘regular guys’. They were two young men who grew up in the United States and, in the words of President Obama, lived ‘as part of our communities and our country’.

Like the so-called Times Square bomber, Faisal Shahzad – another nice guy turned terrorist – the Tsarnaev brothers appeared to have flourished in their new home of America, where their family had moved after fleeing Chechnya. Yet these young men harboured a deep-seated hatred towards the American way of life, with Tamerlan in particular making no secret of his contempt towards his adopted home. As far back as 2009, he stated in a local newspaper interview that he was concerned about the breakdown of ‘values’ and the excesses of Americans. ‘People can’t control themselves’, he said. ‘I don’t have a single American friend… I don’t understand them.’

Since the phenomenon of homegrown terrorism was discovered, expert profilers have focused on young, first-generation immigrant men with so-called ‘identity issues’. Unfortunately, this emphasis on individual identity crises provides little insight into what turns young men into nihilistic murderers. In particular, it does not explain why an individual enduring identity crises should become an individual who hates the community in which he resides.

‘Why do they hate us?’

With the rise of so-called homegrown terrorism, the question ‘why do they hate us?’ has morphed into questions like ‘what is it about us that they hate?’ and ‘why don’t they want to be like us?’. Throughout the West, officials and analysts are perplexed to discover that a significant section of Muslim youth has become sympathetic to a radical Islamic outlook. Press reports frequently discuss the way in which young people, living the lives of typical Western teenagers, suddenly become radicalised and turn into bitter enemies of their country; observers always seem confused and alarmed by this speedy process of what they refer to as ‘radicalisation’.

Take the following account of the life of Hasib Hussain, one of the men responsible for the London bombings on 7 July 2005: ‘He liked playing cricket and hockey, then one day he came into school and had undergone a complete transformation almost overnight… He started wearing a top hat from the mosque, grew a beard and wore robes. Before that he was always in jeans.’