Fracking for our energy: A legacy of decline

In the USA, the process of hydrofracturing (fracking) for oil and gas has produced astounding results in terms of energy produced per day from the major geological regions where petroleum and natural gas are extracted. These are the shale oil and gas fields. The oil coming out of fracked shales is called “tight” oil because it is tightly bound up with the rock formation, and the fracturing releases it and allows it to flow to the well head.

The chart below shows how rapidly U.S. oil production ramped up beginning at the end of 2008 when it stood at just 5 million barrels a day. At the time of this post, the Energy Information Agency is reporting U.S. daily production of 12.3 or 12.4 million barrels a day in total. Throughout this post we’ll refer to this period of January, 2009 – present as the “fracking frenzy.”

USoilProd2005-2017tightVSconv

Both presidential administrations since 2008 have claimed that the USA is achieving “energy independence” or “energy dominance” because of the fracking frenzy. Leaving aside the validity of such claims for now, the main point of this post is to examine the downside of the fracking frenzy, which is reported in oil and gas reports as the “Legacy Wells Decline” or legacy decline.

Each month, the Energy Information Agency publishes a report called the Drilling Productivity Report, which will appear in a new window if you click the link. Because the report focuses on productivity in drilling new wells for oil or gas, you see in the right column a list of the seven shale fields where almost all new oil or gas is being extracted. The report doesn’t cover “conventional” oil regions, which are covered elsewhere and not the point of this post, either.

Each Drilling Productivity Report shows “New oil well production per rig,” on a timeline, and the count of rigs operating for that resource in that field. Below that chart is the topic of this post, Legacy oil production change, thousand barrels per day.

At this point let’s briefly touch on how much energy we are talking about.  This will be important in establishing how many solar-panel equivalent megawatts, gigawatts and terawatts (trillion watts) would be needed to replace the same amount of energy, if it were even feasible. In some applications, this may never be feasible.

“The U.S. Internal Revenue Service defines a BOE as equal to 5.8 million BTU.[1] (5.8×106 BTU59°F equals 6.1178632×109 J, about 6.1 GJ [HHV], or about 1.7 MWh.)
Wikipedia entry on “Barrel of Oil Equivalent.”

So, a barrel of oil gives you 5.8 mega-BTU of energy, about 6.1 Gigajoules, or in terms familiar in renewable energy discussion, 1.7 megawatt-hours of energy.

Here are the legacy-decline charts for the shale oil fields reported out by the EIA:

AnadarkoOil-Aug2019BakkenOilLegacyAug2019
EagleFordLegacyAug2019NiobraraLegacyAug2019
PermianLegacyAug2019
Summed together, these charts show that the total legacy-well decline of these five largest shale regions (Appalachia and Haynesville shales are not significant for oil, but rather natural gas) amounts to 556,000 barrels of oil per day of decline.  Or, to put it in solar-panel terms, 945,000 Megawatt-hours energy decline per day.

So, the only way for U.S. oil production to be out-running the legacy decline rate of fracked wells is for new wells to bring on production at a higher rate. Which has been happening since the fracking frenzy began, as we say in this post, with the New Year 2009.  The EIA reports each field’s “Production change” in a chart like this. Unfortunately, in the August report, the Anadarko field (Oklahoma) did not have a net gain:

AnadarkoOil-Aug2019prodChange

How many oil rigs are there operating now (almost all in the shale regions)?

“Crude Oil Rigs in the United States decreased to 738 in September from 742 in the previous week. Crude Oil Rigs in the United States averaged 503.79 from 1987 until 2019, reaching an all time high of 1609 in October of 2014 and a record low of 98 in August of 1999.” -Recent report from Baker Hughes company.

If we “drill down” into the dominant narrative of “energy dominance” and “energy independence” being offered by the oil and gas industry and parroted out by the Cabinet-level Energy Department since the fracking frenzy began, we discover there are additional fatal flaws in this narrative, besides the legacy decline rate.

First, there is the question of what the total amount of resource being drilled and fracked actually is.  We can recall seemingly endless stories going back to about 2010 which attempted to define the size of, for example, the Bakken oil field in North Dakota. Various estimates were published, in terms of Gigabarrels (billions of barrels) the field might contain. Estimates ranged from just 4 billion, up to sky’s-the-limit billion. However, at the current rate of pumping 1.4 million barrels per day, if the rate is maintained all 365 days of the year, then we see that there is a half-gigabarrel per year being drawn down. Assuming the size of the Bakken is between 4 billion and sky’s-the-limit billion, eventually the resource will be half-depleted, which is normally called the “peak production point” in an oil field, of whatever size.

With respect to the size of the Permian Basin oil resource, it appears that in Energy Info. Agency reports, “Sky’s the Limit” appears to be the size.  In recent reports, the EIA shows the Permian region producing on a steady, upward, linear graph, amounts of oil that appear to have no upper limit. This contradicts the old concept of “Limits to Growth” which the Club of Rome attempted to introduce to Americans back in the 1970s, without success.

The oil and gas industry consultantant Art Berman is less giddy about the Permian Basin and the other major Texas shale “play,” the Eagle Ford region of south Texas. See pp 12-16 in his major presentation here:  Texas Energy Council 30th Annual Symposium,  Dallas, May 20, 2018.

Whatever the resource size of the Permian Basin, which appears to be the Great Hope of U.S. energy dominance, eventually the legacy decline of already-drilled wells will exceed the production from new wells, no matter how many new are being drilled.  On this blog, we will henceforth refer to this point in time as the “Fracking Bust,” which will mark the point of permanent U.S. fossil-fuel energy production decline.  There are not enough “conventional” (non-fracked) oil reserves remaining to the USA to be drilled and produced.  Even the ANWR reserve in Alaska would not replace for example, one million barrels a day of Bakken (North Dakota) light-tight oil once the decline rate reaches that 1 million mark.

Another aspect of the giddy claim of U.S. “energy independence” that bears debunking is the quality of the petroleum being produced. Many recent articles have been written about the U.S. fracking fields producing “the wrong kind of oil.” The oil is too light, as measured on the API specific-gravity scale. Here is a signature article briefly touching on this problem:  “America is producing the wrong kind of oil,” Bloomberg, Javier Blas, February 1, 2019. The fact that this is published on Bloomberg rather than a Leftist rant on Jacobin, or the ever-gloomy Post-Carbon Institute website, indicates that there is a problem:

Tight oil production actually makes the USA more energy-interdependent, not independent.  Likewise, it absurdifies the notion of U.S. energy dominance, since the source of the heavy crudes needed to blend with the light, tight oil to make products such as diesel fuel, jet fuel, or the heavy fuel oil used in container ship engines come from “enemy states” in OPEC.

From the viewpoint of folks trying to push the USA toward a Green New Deal and to “get off fossil fuels,” the problem of the future is what to do when the fracking bust occurs.

We discussed how 556,000 barrels per day is already lost to legacy decline rates, and the fact that this is .95 Terawatt-hours of energy equivalent per day which has declined.  That is about 344 Terawatt-hours per year, or about 1/12th of electrical-equivalent energy consumption per year for the whole USA (given as 4,000 Terawatt-hours or 4 trillion kilowatt-hours).

Total U.S. solar electricity generation for 2018 is given as 1.6% of total, or 64 Terawatt-hours annually, or .175 Terawatt-hours daily. That total is 18% of the amount of daily energy-equivalence LOST already to fracked oil wells in decline, over a 10-year span.

I think you can see the scope of the problem ahead.

Next post will examine the legacy of decline in fracked natural gas fields’ production.

The 6-D: Dollar-Denominated, Debt-Default, Deflationary Death spiral of our economy, Part II

Part II: Contributing factors to the Great Recession, and why “The Fix” fixed nothing.

In Part I, we defined the characteristics of a “deflationary economy” as derived from the inadequate wages and other income of the “non-elite workers” in the economy, those being 90% of our workforce in the USA.  In this Part II, we’ll see if we can make the case that this set of conditions is what led up to the “Great Recession” which is said to have begun in December, 2007 and “officially ended” in June, 2009 (New York Times headline, Sep. 20, 2010.

(See Part 1 here)

Let’s call this a “working hypothesis” and see if we can dig up evidence from the financial press, mass media in general, alternative economics (alt-econ) and other sources. Perhaps even some studies from academia.
Wikipedia seems as good a place to start as any on “Causes of the Great Recession,” wherein the entry describes a “balance-sheet recession or debt-deflation.

One narrative describing the causes of the crisis begins with the significant increase in savings available for investment during the 2000–2007 period when the global pool of fixed-income securities increased from approximately $36 trillion in 2000 to $80 trillion by 2007. This “Giant Pool of Money” increased as savings from high-growth developing nations entered global capital markets. Investors searching for higher yields than those offered by U.S. Treasury bonds sought alternatives globally.[1]

The temptation offered by such readily available savings overwhelmed the policy and regulatory control mechanisms in country after country, as lenders and borrowers put these savings to use, generating bubble after bubble across the globe.

While these bubbles have burst, causing asset prices (e.g., housing and commercial property) to decline, the liabilities owed to global investors remain at full price, generating questions regarding the solvency of consumers, governments, and banking systems.[2] The effect of this debt overhang is to slow consumption and therefore economic growth and is referred to as a “balance sheet recession” or debt-deflation.[3]

The fall in asset prices (such as subprime mortgage-backed securities) during 2007 and 2008 caused the equivalent of a bank run on the U.S., which includes investment banks and other non-depository financial entities. This system had grown to rival the depository system in scale yet was not subject to the same regulatory safeguards.[3] Struggling banks in the U.S. and Europe cut back lending causing a credit crunch. Consumers and some governments were no longer able to borrow and spend at pre-crisis levels. Businesses also cut back their investments as demand faltered and reduced their workforces. Higher unemployment due to the recession made it more difficult for consumers and countries to honor their obligations. This caused financial institution losses to surge, deepening the credit crunch, thereby creating an adverse feedback loop.[4]

Kimberly Amadeo had this article, “What was the bank bailout bill?” updated on Aug 22, 2019 on The-Balance-dot-com, which gets to the heart of why the “Fix” for the credit crisis did not “fix” the credit crisis but only set the stage for a much greater crisis down the road. It did nothing to “bail out” the non-elite workers who we discussed in Part I. Everything was geared, in autumn 2008, towards rescuing the rentier capitalist class.

Why the Bailout Bill Was Necessary

On September 16, 2008, the $62.6 billion Reserve Primary Fund was under attack. Investors were taking out money too fast. They worried that the Fund would go bankrupt due to its investments in Lehman Brothers. The next day, businesses pulled a record $140 billion out of money market accounts. They were moving the funds to Treasury bills, causing yields to drop to zero. Money market accounts had been considered one of the safest investments.

To stem the panic, the U.S. Treasury Department agreed to insure money market funds for a year. The SEC banned short-selling financial stocks until October 2 to reduce volatility in the stock market.

The U.S. government bought these bad mortgages because banks were afraid to lend to each other. This fear caused Libor rates to be much higher than the fed funds rate. It also sent stock prices plummeting. Financial firms were unable to sell their debt. Without the ability to raise capital, these firms were in danger of going bankrupt. That’s what happened to Lehman Brothers. It would have happened to the American International Group and Bear Stearns without federal intervention.

(Kimberly Amadeo has 20 years economic analyst experience and is the U.S. Economy Expert for The Balance)

Once Barack Obama had been inaugurated, he set to work on the “stimulus package” which became known as the ARRA, American Recovery and Reinvestment Act of 2009.  Did this Act do anything to address the actual foundational causes for our economy to have become “deflationary?” There are a number of voices in the sphere of economics and alt-economics (the “Global South of economics”) who say,  No, not it did not.

Larry Beinhart contributed this piece in Huffington Post–

Why the Stimulus Package Failed

The stimulus package failed because it consisted mostly of tax cuts. Tax cuts are among the very worst ways to create jobs and certainly the most expensive.

The stimulus package authorizes 787 billion dollars. According to the official website (recovery.gov) $565 billion has actually been spent or credited. There are three categories of “stimulus.” Citing amounts spent, they are:

    1. $243.4 billion in tax cuts.

    2. $154.5 billion in contracts, grants, and loans. This is what we actually think of as a stimulus, construction and research projects.

    3. $166.8 billion in entitlements. This is mostly money to the states to help with unemployment insurance.

The whole story is here (click for link)

What the Stimulus Package did not do, and wasn’t intended to do, was to raise the real wages of the non-elite working class, as we described in Part I, nor to put substantial income into the hands of the non-working class, nor labor-force nonparticipants, either.  The demand destruction process ushered in with the onset of the Great Recession in December 2007 continues to this day, as the real wages of workers continue to stagnate.  If you’ve been following the non-progress of the nation’s labor force out of the recession, you’ve probably seen a number of charts that look like this one below:

ProductivityRealWages

The yellow line on the graph shows productivity gains. This is where you can clearly see the growth of wealth inequality, as productivity gains contributed to the incomes and the wealth of the wealthiest, the “1%”, the capitalist class, while the income (and resulting wealth) of the “99%” have stagnated.

This begs the question: if real wages remained stagnant, how were consumers able to keep driving the GDP higher, assuming that consumer spending indeed contributes 70% of the measured GDP?  Once again, let’s look at Wikipedia’s entry on “Cause of the Great Recession.”

Consumer and household borrowing

U.S. households and financial institutions became increasingly indebted or overleveraged during the years preceding the crisis. This increased their vulnerability to the collapse of the housing bubble and worsened the ensuing economic downturn.

  • USA household debt as a percentage of annual disposable personal income was 127% at the end of 2007, versus 77% in 1990.[66]
  • U.S. home mortgage debt relative to gross domestic product (GDP) increased from an average of 46% during the 1990s to 73% during 2008, reaching $10.5 trillion.[67]
  • In 1981, U.S. private debt was 123% of GDP; by the third quarter of 2008, it was 290%.[68]

Several economists and think tanks have argued that income inequality is one of the reasons for this over-leveraging. Research by Raghuram Rajan indicated that: “Starting in the early 1970s, advanced economies found it increasingly difficult to grow…the shortsighted political response to the anxieties of those falling behind was to ease their access to credit. Faced with little regulatory restraint, banks overdosed on risky loans.”[69]

Given that the “Stimulus Package” did not elevate the real wages of the non-elite American workers, and that the Great Recession had been caused by over-leveraging (taking on too much debt relative to income) by consumers, how would we expect the economy to have looked six years after the supposed ending of the Great Recession and the beginning of “recovery?”

Ilargi, writing in The Automatic Earth in August, 2015, offered this rather gloomy assessment of the condition of the working class in the global economy  (using the case of Greece in the EU as the horror story/dystopian warning signal to a better-off nation such as the USA).

The reason why Greece is where it is today, and why we will all be there tomorrow, we can by now for good reason call ‘deceptively simple’. That is to say, the global banking system that orchestrated the financial crisis refuses to take the losses on its extravagant bets, and it has the political clout to get its way, all the way. That’s all you need to know.

The losses are therefore unloaded upon the citizens of our respective nations. But the losses are far too massive for those citizens to bear. They, or rather we, will see our societies stripped of most things, most of the social fabric, that hold them together. Any service that costs money will be cut, progressively, until there’s very little left.

It happened in Greece, and it will happen all over the world. Mind you, this is nothing new; third world nations have undergone the same treatment for decades, if not forever. Disaster capitalism wasn’t born yesterday. What’s new is that it now takes place in the supposedly well-off part of the world, in this case the European Union. And it will spread.

The successive Greek bailouts that have now ruined the entire nation were “needed” to stem the losses on wagers, derivatives and other, incurred by global banks, French, Dutch, German, Wall Street, the City. The first bailout in 2010 also served the purpose of allowing the banks time to shift away from their exposure to Greek debt.

All bailouts, be they directly for banks, or indirectly through a country like Greece and then for the banks, have been set up according to the exact same MO. Greece’s economic reserves just happened to be a bit tighter, and moreover, the country was a convenient lab rat and scarecrow to prevent others from protesting the bailout system too loudly.

The whole system of bailouts, be it in Greece or in the US, was never anything else than a transfer of public money to private interests, with the express aim of making good on the lost wagers of that private sector. With impunity, no less.

And no, the losses have not disappeared. Nor have they been written down. They have instead been transferred to fester in dark vaults, hidden behind swaps and other derivatives, and on central bank balance sheets. But that won’t last either.

The Automatic Earth has warned of the imminent deleveraging and deflation for years, and now everyone is talking about deflation. No worries, guys. As you were. But do please try and understand how this works.

There’s all these losses, with no-one prepared to write down any of them (see Germany vs Greece), and the elites behind the banks unwilling to absorb any -the elites instead insist on getting richer even in a depression-. There is only one outcome left then: that you and me will have to become much poorer. They are our losses now.

The only way the rich can keep getting richer is if the rest of us keep getting poorer. Economic growth is a thing of the past. Deleveraging has started for real. Huge amounts of zombified ‘money’ are disappearing as we speak.

The quote is from the piece “Deflation, Debt and Gravity” appearing on the compilation The Automatic Earth Primer Guide 2017.

So we’ve reached a dead-end stage in our economic system, where the people in economic and political power are determined to maintain and increase the wealth and income inequality disparity to levels which are surely setting the stage for the next collapse.  Let’s call the next one, the Much Greater Recession.

None of the “Fixes” or “bail-outs” offered in the Much Greater Recession to come, will be aimed at “bailing-out” the working class with a much higher wage scale, nor the not-in-the-labor force population with a much higher social welfare payments scale. The 2020 elections round is bound to bring to the fore the Austerity Juggernaut which has been on hiatus while the Congress wrestled with the question of the President’s fitness for office, over the past 30 months. Austerity will be back, and it will bring on the next round of the Dollar-Denominated, Debt-Default, Deflationary Death spiral of our political economy.

In Part III we’ll examine the problem of the hyper-productivity gains in the economy which have left real wages flat. We’ll cast a nervous eye towards the sky and wonder when the Fragment of the Machines, the Robotics and A.I. Asteroid, will strike our working and non-working populations, and how this will contribute to a much faster economic death-spiral.

Stay tuned, and cheer up, won’t you?

StimulusPackage

6-D: The Dollar-Denominated, Debt-Default, Deflationary Death spiral of our economy-Part I

Part I:  What is a “deflationary economy?” What is the role of the “non-elite workers” in such a contrarian economy?

In order to have this discussion we need to define what a “deflationary economy” is. What are its features. What it looks like.

Before discussing why the “fixes” to the banking & credit system were wholly inadequate to address the depth of the 2008-2009 financial crisis, it’s important to look at the conditions that create a “deflationary” economic situation, as opposed to the conservatives’ constant bugaboo, “hyperinflation.”

The blogger “Stoneleigh” (Nicole Foss) began a series of Primers on deflation back at the time of the crisis. She explains–

“As we have consistently explained here at The Automatic Earth, inflation is an increase in the supply of money and credit relative to available goods and services, while deflation is the opposite. Deflation, moreover, is aggravated by a collapse in the velocity of money. Price movements are lagging indicators of monetary changes, but are also subject to a number of other drivers, such as scarcity and substitutability (or lack thereof).

“For this reason, price movements alone have no explanatory or predictive value. For instance, we have lived through a highly inflationary credit expansion over the last couple of decades, but prices have not reacted consistently. Some have risen, as one would expect, but others have fallen, due, for instance, to the effects of global wage arbitrage. For prices to fall in nominal terms during inflationary times, they must be going through the floor in real terms.

“Deflation would be associated, at least initially, with prices falling across the board, as the collapse of purchasing power would drastically reduce price support for virtually everything. In a deflation, people sell anything they can, in order to pay down debt, to meet margin calls and to cover the cost of living, once access to credit is cut off and earning an income becomes very much more difficult. This is a recipe for prices falling by perhaps 90% in nominal terms, but for goods and services to become simultaneously much less affordable, as purchasing power would be falling even faster. In other words, in real terms, prices rise (i.e. affordability decreases).”

Full explanation of the deflationary economy by “Stoneleigh” (Nicole Foss) from the depths of the Great Recession period: “The unbearable mightiness of deflation

In other words, deflation can be seen as a generalized fall in commodity prices “across the board,” and this includes the “price of labour-power,” or wages, as Marx explained:

“Marx believed that the long-run tendency of wages is downward. In the Poverty of Philosophy, he stressed the substitution of cheap, inferior goods for better, more expensive ones in the workers’ consumption. Bread gives way to potatoes, and linen to cotton. In Wages and Wage-Labor and Capital, Marx insisted that while the prevailing minimum wage in different countries varies, the tendency is toward equality at the lowest level. When wages fall after having risen somewhat during the boom, they never again recover their old level.” -Ashmit Sirohi

Marx spoke of the conundrum of workers thus–
“When society is in a state of decline, the worker suffers most severely. The specific severity of his burden he owes to his position as a worker, but the burden as such to the position of society.
“But when society is in a state of progress, the ruin and impoverishment of the worker is the product of his labour and of the wealth produced by him. The misery results, therefore, from the essence of present-day labour itself.
Society in a state of maximum wealth – an ideal, but one which is approximately attained, and which at least is the aim of political economy as of civil society – means for the workers static misery.

“It goes without saying that the proletarian, i.e., the man who, being without capital and rent, lives purely by labour, and by a one-sided, abstract labour, is considered by political economy only as a worker. Political economy can therefore advance the proposition that the proletarian, the same as any horse, must get as much as will enable him to work. It does not consider him when he is not working, as a human being; but leaves such consideration to criminal law, to doctors, to religion, to the statistical tables, to politics and to the poor-house overseer.”
See “Wages of Labour, Economic and Philosophic Manuscripts of 1844”

Insights from Our Finite World: When wages of non-elite workers are inadequate to drive economic growth

Retired actuary Gail Tverberg was a constant contributor to the peak-oil theory blog The Oil Drum, which is now discontinued. But she maintains her own site under the title Our Finite World.

In Gail’s finite world, the wages of the base-level working class, what she calls the “non-elite workers” are also of prime concern when examining the current “growth economy” orthodoxy and its failures.

Tverberg typically begins an essay with a discussion on the energy situation in the economy–whether there is adequate cheap, easy-to-get energy to continue powering growth forward. But then she inevitably turns toward the problem of the wages of the lowest segment of our working class:

“The wages shown on Slide 24 have already been inflation adjusted. Thus, in the period before 1968, wages for both the lower 90% of workers and for the top 10% of workers were rising rapidly, even considering the impact of inflation. Many families were able to afford a car for the first time. After 1980, the wages of the top 10% rose much more quickly than the wages of the bottom 90%.”

Gail-WagesOfBottom90pct

Tverberg offers a different way of defining “what is an economy?” or what is an economic system, in her piece “The world’s weird self-organizing economy” (click link for the whole piece):
The world’s weird self-organizing economy

The economy is one of many self-organized systems that grow. All are governed by the laws of physics. All use energy in their operation.

“Gail the Actuary” offers this introduction–

I am not an economist; I am a retired actuary. I have spent years making forecasts within the insurance industry. These forecasts were financial in nature, so I have had hands-on experience with how various parts of the financial system work. I was one of the people who correctly forecast the Great Recession. I also wrote the frequently cited academic article, Oil Supply Limits and the Continuing Financial Crisis, which points out the connection between the Great Recession and oil limits.

Today’s indications seem to suggest that an even more major recession than the Great Recession may strike in the not too distant future. Why should this be the case? Am I imagining problems where none exist?

In constructing this multi-part alternative-economics blog series, we thought it best to seek out the ideas of those who are specifically not orthodox economists, or not economists at all, but rather, astute observers of the real goings-on in the real world we inhabit.

Further on in the “Weird Self-Organizing Economy” post we find that Gail the Actuary has acquired a deeper understanding of the problem of inequality of income and wealth, than you might expect to find from someone who has worked for large property-and-casualty insurance companies. She writes:

[5] Part of the world’s energy problem is a distribution problem; the world becomes divided into haves and have-nots in many ways. It is this distribution problem that tends to push the world economy toward collapse. 

There are many parts to this distribution problem. One is the distribution of goods and services (created using energy) by country. Over time, this tends to change, especially as commodity prices change. Oil exporters are favored when oil prices are high; oil importers are favored when oil prices are low. The relative values of currencies can change quickly, as commodity prices change.

Another part of this distribution problem is growing wage and wealth disparity, as more technology is added. If there is too much wage disparity, low-paid workers often cannot afford adequate food, homes, and transportation for their families. Their lack of demand for goods made with energy products (because of their low wages) tends to work through the system as low commodity prices. This happens because (a) there are so many of these workers and (b) these workers tend to purchase a disproportionate share of goods and services that are highly energy-dependent.

Gail Tverberg further shows what young folks would call a more “woke” awareness of the impact of income and wealth inequality upon not only the economy, but the whole society as the prospect of “collapse” is introduced. Gail:

When I talk about non-elite workers, I am talking about workers who are in the bottom 90% of the wage distribution. Elite workers will always have enough income for the necessities of life. There are so many non-elite workers in the world that they, indeed, do make a difference.

Also, the forces that adversely affect non-elite workers tend to have several effects:

  1. They tend to send a larger share of wages to elite workers, as the economy becomes more complex and more specialized.
  2. They tend to send more unearned income to elite workers, through capital appreciation, because elite workers can afford to buy shares of stock and expensive homes.
  3. The wealthy spend their income differently from non-elite workers. Non-elite workers tend to spend the bulk of their discretionary income on devices made using commodities, such as cell phones and automobiles. The wealthy are likely to spend their discretionary income in less energy intensive ways, such as investing in shares of stock and buying services such as private college education for their children.

History shows that economies tend to collapse when wage and wealth disparity becomes too great. Collapse can take various forms, including revolutions by the disgruntled underclass, increased susceptibility to epidemics, or the financial collapse of governments. Wars become more likely, as one country tries to aid its citizens at the expense of citizens of other countries.

What is the foundation of the deflationary cycle of our economy? It’s the destruction of the wage-labor system itself. Fighting for Jobs Jobs Jobs! will be useless if the jobs don’t pay enough to support the workers. And if increasing numbers are displaced and left out of the Jobs Jobs Jobs picture–by the Automaton, a full complete system of “the machine” described by Karl Marx in his notebooks entitled “Grundrisse.”

To venture further into non-orthodox political economy, let’s close this post with a Marxist view, offered by the League of Revolutionaries for  New America.

“Capitalism came to dominance during this leap from agriculture to industry as a stage in the development of private property. Now, like all the other stages before it, capitalism is facing its own demise. The capitalist system first developed upon, and in compatibility with, the new industrial means of production. With the introduction of the qualitatively new means of production – the new laborless technology – into the industrial system, a new leap has begun.

“The intricate network of all the various means of buying and selling is being disrupted as wage-labor, the source of all wealth, falls in value and price.”LRNA, “Revolution and the Tasks of Revolutionaries”

May/June 2018 Vol28.Ed3
This article originated in Rally, Comrades!
P.O. Box 477113 Chicago, IL 60647 rally@lrna.org
Free to reproduce unless otherwise marked.
Please include this message with any reproduction.

Part II is here

 

A Common Trait Among Mass Killers: Hatred Towards Women

Women’s Liberation Front  

15 hrs

A Common Trait Among Mass Killers: Hatred Towards Women
Misogyny and mass shootings in the United States are closely intertwined.

“The man who shot nine people to death last weekend in Dayton, Ohio, seethed at female classmates and threatened them with violence.

The man who massacred 49 people in an Orlando nightclub in 2016 beat his wife while she was pregnant, she told authorities.

The man who killed 26 people in a church in Sutherland Springs, Tex., in 2017 had been convicted of domestic violence. His ex-wife said he once told her that he could bury her body where no one would ever find it.

The motivations of men who commit mass shootings are often muddled, complex or unknown. But one common thread that connects many of them — other than access to powerful firearms — is a history of hating women, assaulting wives, girlfriends and female family members, or sharing misogynistic views online, researchers say.

As the nation grapples with last weekend’s mass shootings and debates new red-flag laws and tighter background checks, some gun control advocates say the role of misogyny in these attacks should be considered in efforts to prevent them.

The fact that mass shootings are almost exclusively perpetrated by men is “missing from the national conversation,” said Gov. Gavin Newsom of California on Monday. “Why does it have to be, why is it men, dominantly, always?”

While a possible motive for the gunman who killed 22 people in El Paso has emerged — he posted a racist manifesto online saying the attack was in response to a “Hispanic invasion of Texas” — the authorities are still trying to determine what drove Connor Betts, 24, to murder nine people in Dayton, including his own sister.

Investigators are looking closely at his history of antagonism and threats toward women, and whether they may have played a role in the attacks.

Since the killings, people who knew Mr. Betts described a man who was offbeat and awkward; others recalled his dark rages and obsession with guns.

Those rages were frequently directed at female acquaintances. In high school, Mr. Betts made a list threatening violence or sexual violence against its targets, most of whom were girls, classmates have said. His threats were frightening enough that some girls altered their behavior: Try not to attract his attention, but don’t antagonize him, either.

“I remember we were all distant, like maybe we should just shy away from him,” said Shelby Emmert, 24, a former classmate. “My mom wanted me to just not associate. She said to stay away from Connor Betts.

Shannon Watts, the founder of Moms Demand Action for Gun Sense in America, cited a statistic that belies the sense that mass shootings are usually random: In more than half of all mass shootings in the United States from 2009 to 2017, an intimate partner or family member of the perpetrator was among the victims.

(The study, by the gun control advocacy group Everytown for Gun Safety, defined mass shootings as those in which four or more people died, not including the gunman.)

“Most mass shootings are rooted in domestic violence,” Ms. Watts said. “Most mass shooters have a history of domestic or family violence in their background. It’s an important red flag.”

Federal law prohibits people convicted of certain domestic violence crimes, and some abusers who are subject to protective orders, from buying or owning guns. But there are many loopholes, and women in relationships who are not married to, do not live with, or have children with their abusers receive no protection. Federal law also does not provide a mechanism for actually removing guns from abusers, and only some states have enacted such procedures.

Judges can consider an individual’s history of domestic abuse, for example, under red-flag laws adopted in at least 17 states. Such laws allow courts to issue a special type of protective order under which the police can take guns, temporarily, from people deemed dangerous.

The National Rifle Association, the nation’s largest gun lobby, has opposed efforts to expand the situations in which individuals accused of abuse can lose the right to own guns, saying that doing so would deny people due process and punish people for behavior that is not violent.

But Allison Anderman, senior counsel at Giffords Law Center to Prevent Gun Violence, said measures that facilitate the removal of guns from abusers “are a critical step in saving the lives of abuse survivors.” And given the link between domestic abuse and mass shootings, she said, these laws may also help prevent massacres.

The plagues of domestic violence and mass shootings in the United States are closely intertwined. The University of Texas tower massacre in 1966, generally considered to be the beginning of the era of modern mass shootings in America, began with the gunman killing his mother and wife the night before.

Devin P. Kelley, who opened fire on parishioners at a Sunday service in Sutherland Springs, on Nov. 5, 2017, had been convicted of domestic violence by an Air Force general court-martial, for repeatedly beating his first wife and breaking the skull of his infant stepson. That conviction should have kept him from buying or owning guns, but the Air Force failed to enter the court-martial into a federal database.

In attacking the church, Mr. Kelley appeared to be targeting the family of his second wife.

In a case that highlights the so-called boyfriend loophole, in 2016, a man who had been convicted of stalking a girlfriend and had been arrested on a charge of battery against a household member shot Cheryl Mascareñas, whom he had briefly dated, and her three children, killing the children. Because the man had not been married to or had children with the woman he was convicted of stalking, his conviction did not prevent him from having or purchasing guns.”

A professed hatred of women is frequent among suspects in the long history of mass shootings in America.

There was the massacre in 1991, when a man walked into Luby’s Cafeteria in Killeen, Tex., and fatally shot 22 people in what at the time was the worst mass shooting in modern United States history. The gunman had recently written a letter to his neighbors calling women in the area “vipers,” and eyewitnesses said he had passed over men in the cafeteria to shoot women at point blank range.

“Even some of the incidents that people don’t know about or aren’t really familiar with now or don’t come to mind, there definitely is a thread of this anger, and misogyny,” said James M. Silver, a professor of criminal justice at Worcester State University who has worked with the F.B.I. to study the motivations of mass gunmen.

In recent years, a number of these men have identified as so-called incels, short for involuntary celibates, an online subculture of men who express rage at women for denying them sex, and who frequently fantasize about violence and celebrate mass shooters in their online discussion groups.

Special reverence is reserved on these websites for Elliot O. Rodger, who killed six people in 2014 in Isla Vista, Calif., a day after posting a video titled “Elliot Rodger’s Retribution.” In it, he describes himself as being tortured by sexual deprivation and promises to punish women for rejecting him. Men on these sites often refer to him by his initials and joke about “going ER” — or a murderous rampage against “normies,” or non-incels.

Several mass killers have cited Mr. Rodger as an inspiration.

Alek Minassian, who drove a van onto a sidewalk in Toronto in 2018, killing 10 people, had posted a message on Facebook minutes before the attack praising Mr. Rodger. “The Incel rebellion has already begun!” he wrote. “All hail Supreme Gentleman Elliot Rodger!”

And Scott P. Beierle, who last year shot two women to death in a yoga studio in Tallahassee, had also expressed sympathy with Mr. Rodger in online videos in which he railed against women and minorities and told stories of romantic rejection. Mr. Beierle had twice been charged with battery after women accused him of groping them.

Federal law enforcement officials said the F.B.I. was looking at whether the gunman in Dayton had connections with incel groups, and considered incels a threat.

Experts say the same patterns that lead to the radicalization of white supremacists and other terrorists can apply to misogynists who turn to mass violence: a lonely, troubled individual who finds a community of like-minded individuals online, and an outlet for their anger.

“They’re angry and they’re suicidal and they’ve had traumatic childhoods and these hard lives, and they get to a point and they find something or someone to blame,” said Jillian Peterson, a psychologist and a founder of the Violence Project, a research organization that studies mass shootings. “For some people, that is women, and we are seeing that kind of take off.”

David Futrelle, a journalist who for years has tracked incel websites and other misogynistic online subcultures on a blog called “We Hunted the Mammoth,” described incel websites as a kind of echo chamber of despair, where anyone who says anything remotely hopeful quickly gets ostracized.

“You get a bunch of these guys who are just very angry and bitter, and feel helpless and in some cases suicidal, and that’s just absolutely a combination that’s going to produce more shooters in the future,” Mr. Futrelle said.

Psychiatrists, however, say that the attention on mental health generated by mass shootings, and the common argument that mental illness is the explanation for these massacres, cannot explain the link between misogyny and mass shootings. Misogyny — or other types of hatred — is not necessarily a diagnosable mental illness.

Instead, said Amy Barnhorst, the vice chair of community psychiatry at the University of California, Davis, who has studied mass shootings, what ties together many of the perpetrators is “this entitlement, this envy of others, this feeling that they deserve something that the world is not giving them. And they are angry at others that they see are getting it.”

Some components of a Badger Green New Deal

Let’s urge the Governor’s office to do outreach to the local governments, to help re-set the relationship between local governments and our Wisconsin State Legislature.

In order to have a sustainable Wisconsin, we need to have our own Badger Green New Deal. I think you can Look to the Locals for ideas and visions of what this system might look like. Beyond Medicaid expansion, there’s three components that we need right now.

The first of these is to re-enable Regional Transit Authorities for a statewide system of renewable-energy, regional mass transit. In each County we have Mobility Managers, and they are stressed and strained by lack of funding to try and deliver mobility for our elderly, our poor people, disabled persons and young students and young workers getting their first jobs. All of these folks will benefit from a robust system of regional mass transit.

SolarBus

The second part of a Badger Green New Deal is an Affordable Housing System. Developers have told me that you can’t make money building affordable housing units. That may be true. The market is not the solution to our problem; the market IS the problem, to paraphrase Ronald Reagan correctly. Government is the solution. We need a State-owned bank to make loans to local governments to own/operate their own affordable housing systems locally.

AffordableHousingRenewable

Third component of a Badger Green New Deal is to address our agricultural crisis. Another function of a State-owned bank will be to help prevent further bankruptcies by changing to a more sustainable agriculture. This bank could fund new start-up agricultural ventures based in local communities. Build on the successes of local food movements. Fund local start-ups of smaller-scale, cooperative, regenerative agriculture farms based in organic no-till practices, specialty high-value crops, more biodiversity, small scale locally-owned cooperative food processing ventures, fewer CAFOs and more grazed animal ops.

RegenAg

Conservatives may object, where will you find the money for all these free ponies?

Well, we’re not broke,
we need to get woke.

We know where the money is at. It’s hoarded behind the tallest wall of wealth inequality the nation has ever seen. We need to break down that wall. It’s our workers, farmers, and consumers who created that hoarded wealth. Let’s use the power of taxation to…

Jailbreak that wealth
to restore communities’ health.
WealthInequalityWallmeme

WI- Local Government Resolution to Enable Regional Transit Authorities

Abbie Hofmann had written a book in the 1960s humorously-titled “Steal This Book.”

The author of this Resolution to be introduced in Counties, League of Municipalities members, Towns Association members and even Wisc. Association of School Board members, urges you to totally plagiarize (claim authorship) of it and introduce it to the local governmental body of which you’re an elected member. This might have some odds at least of becoming part of State Statutes again if the largest number of the widest assortment of governments from the widest geographic dispersal will pass the resolution (or similar ones).

Regionalizing mass transit will be only the first, minor, step towards sustainability for Wisconsin. Without this step, odds of achieving sustainability in time to avert rather dire consequences, are small.

AbbieHofmann

Resolution: Demand on the WI Legislature to Re-enable Regional Transit Authorities (RTAs)

To be Submitted to all levels of local governments throughout Wisconsin during 2019.

WHEREAS, In 2009 the Wisconsin Legislature passed legislation included in Act 28, enabling the formation of Regional Transit Authorities, complete with the power of taxation necessary to fund their start-up and operations;

WHEREAS, In 2011, as part of Act 32, the Wisconsin Legislature passed legislation disabling the same Regional Transit Authorities, with no rational explanation or narrative for undoing what had been done two years earlier;

WHEREAS, the Wisconsin Association of Mobility Managers (WAMM) said, introducing their 2016 Legislative Priorities, “Wisconsin is the only Midwest state without enabling legislation to create these authorities. Regional Transit Authorities (RTAs) are a quasi-governmental entity that provides a governance structure for a unified transportation system and has taxing authority, therefor offering a funding alternative to property taxes;”

AWRPCs

WHEREAS, WAMM added, “Regional Transit Authorities allow for a regional and comprehensive look at transportation. They encourage connectivity and multimodal approaches since the planning takes place with one body for the whole region. A multimodal and coordinated system improves the mobility, connectedness, and quality of life for those who are unable to drive themselves, particularly older adults, individuals with disabilities and those with low incomes;

WHEREAS, WAMM further noted that “Medical centers, employers, job centers, educational facilities are very often regional in nature; why should transportation be any different? Developing transportation systems requires flexibility to create innovative services that can cross municipal and county borders and account for communities of different sizes. RTAs enable this to be done in a more efficient, effective and sustainable manner;”

WHEREAS, WAMM concluded the 2016 document, “Transportation systems are a part of the infrastructure that helps people get to jobs, medical appointments, and remain active and engaged members of the community and local economy. Where there are strong systems and meaningful mobility choices, there are strong communities. People want to live and work in these communities and are seeking them out; and,

WHEREAS, Our County places great importance on our system of mobility for the populations most in need of the services that a Regional Transit Authority could provide our residents, and residents of lower-income counties in our immediate region; and

WHEREAS, Our County places high value on the principles of “sustainability,” and

WHEREAS, lack of mobility for low-income workers and retired persons is a factor contributing to their lack of “sustainability,” while Regional Transit would allow easier access to jobs, schools, health care, and basic needs;

THEREFORE, Our County calls upon the Wisconsin Legislature to quickly craft and pass Legislation once again enabling Regional Transit Authorities in Wisconsin, and “making an appropriation” to fund such;

FURTHER, that there be no limitations placed on the number of such Authorities, barring duplication of services or geographic overlap;
SolarBus

FURTHER, that Legislative obstacles to proceeding with near-100% renewable energy power for such RTAs be removed, keeping in mind future tightening of petroleum and natural gas supplies; and,

FURTHER, that agencies and Legislative Committees charged with overseeing transportation needs, make the creation and link-up of these RTAs into one seamless working statewide system a top priority.

ALICE in Marathon County, WI (County Seat, Wausau)

Politicians are all excited about the “super low unemployment” in Wisconsin, and of course, north-central Wisconsin politicians are excited too.  What is the reality for Marathon County’s working-class people?

The concept is called “ALICE,” and it comes from the United Way of Wisconsin’s two-year and four-year studies of Asset – Limited, Income-Constrained, Employed persons (A.L.I.C.E. is the  acronym, and it doesn’t stand for ALICE in Wonderland for sure).

Here’s a couple graphics from the United Way ALICE Wisconsin Report:

ALICE-MarathonCountyP2-bALICE-MarathonCountyP2-a

The question we should be asking ourselves — whatever our role in the community, whether elected official, or grassroots activist, or struggling worker — is this:

What good is “the lowest unemployment ever, when almost every city or large village in every Wisconsin County, has over 40% of its working people living under stress, unable to “make ends meet” adequately so as to be financially stable?

That is the question. Not, “what number can we report to the media to make our political regime look good?”

 

Non-conspiracy theory: Robotics/AI really IS about eliminating workers

The Hidden Automation Agenda of the Davos Elite

This year’s World Economic Forum in Davos, Switzerland, where business leaders’ public positions on automation’s impact on workers did not match the views they shared privately.

By Kevin Roose

Jan. 25, 2019 New York Times
Click to read the whole story

DAVOS, Switzerland — They’ll never admit it in public, but many of your bosses want machines to replace you as soon as possible.

I know this because, for the past week, I’ve been mingling with corporate executives at the World Economic Forum’s annual meeting in Davos. And I’ve noticed that their answers to questions about automation depend very much on who is listening.

In public, many executives wring their hands over the negative consequences that artificial intelligence and automation could have for workers. They take part in panel discussions about building “human-centered A.I.” for the “Fourth Industrial Revolution” — Davos-speak for the corporate adoption of machine learning and other advanced technology — and talk about the need to provide a safety net for people who lose their jobs as a result of automation.

But in private settings, including meetings with the leaders of the many consulting and technology firms whose pop-up storefronts line the Davos Promenade, these executives tell a different story: They are racing to automate their own work forces to stay ahead of the competition, with little regard for the impact on workers.

All over the world, executives are spending billions of dollars to transform their businesses into lean, digitized, highly automated operations. They crave the fat profit margins automation can deliver, and they see A.I. as a golden ticket to savings, perhaps by letting them whittle departments with thousands of workers down to just a few dozen.

“People are looking to achieve very big numbers,” said Mohit Joshi, the president of Infosys, a technology and consulting firm that helps other businesses automate their operations. “Earlier they had incremental, 5 to 10 percent goals in reducing their work force. Now they’re saying, ‘Why can’t we do it with 1 percent of the people we have?’”

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video: https://www.youtube.com/watch?v=xFeMyuGt0mw

Few American executives will admit wanting to get rid of human workers, a taboo in today’s age of inequality. So they’ve come up with a long list of buzzwords and euphemisms to disguise their intent. Workers aren’t being replaced by machines, they’re being “released” from onerous, repetitive tasks. Companies aren’t laying off workers, they’re “undergoing digital transformation.”

A 2017 survey by Deloitte found that 53 percent of companies had already started to use machines to perform tasks previously done by humans. The figure is expected to climb to 72 percent by next year.

The corporate elite’s A.I. obsession has been lucrative for firms that specialize in “robotic process automation,” or R.P.A. Infosys, which is based in India, reported a 33 percent increase in year-over-year revenue in its digital division. IBM’s “cognitive solutions” unit, which uses A.I. to help businesses increase efficiency, has become the company’s second-largest division, posting $5.5 billion in revenue last quarter. The investment bank UBS projects that the artificial intelligence industry could be worth as much as $180 billion by next year.

FoxconnRobots-betterThanFoxconnRobots-normalPeople

Kai-Fu Lee, the author of “AI Superpowers” and a longtime technology executive, predicts that artificial intelligence will eliminate 40 percent of the world’s jobs within 15 years. In an interview, he said that chief executives were under enormous pressure from shareholders and boards to maximize short-term profits, and that the rapid shift toward automation was the inevitable result.

FoxconnMKEoffice

The (proposed) Milwaukee offices of the Taiwanese electronics maker Foxconn, whose chairman has said he plans to replace 80 percent of the company’s workers with robots in five to 10 years. (TMJ4 photo)

“They always say it’s more than the stock price,” he said. “But in the end, if you screw up, you get fired.”

Other experts have predicted that A.I. will create more new jobs than it destroys, and that job losses caused by automation will probably not be catastrophic. They point out that some automation helps workers by improving productivity and freeing them to focus on creative tasks over routine ones.

But at a time of political unrest and anti-elite movements on the progressive left and the nationalist right, it’s probably not surprising that all of this automation is happening quietly, out of public view. In Davos this week, several executives declined to say how much money they had saved by automating jobs previously done by humans. And none were willing to say publicly that replacing human workers is their ultimate goal.

“That’s the great dichotomy,” said Ben Pring, the director of the Center for the Future of Work at Cognizant, a technology services firm. “On one hand,” he said, profit-minded executives “absolutely want to automate as much as they can.”

“On the other hand,” he added, “they’re facing a backlash in civic society.”

For an unvarnished view of how some American leaders talk about automation in private, you have to listen to their counterparts in Asia, who often make no attempt to hide their aims. Terry Gou, the chairman of the Taiwanese electronics manufacturer Foxconn, has said the company plans to replace 80 percent of its workers with robots in the next five to 10 years. Richard Liu, the founder of the Chinese e-commerce company JD.com, said at a business conference last year that “I hope my company would be 100 percent automation someday.”

One common argument made by executives is that workers whose jobs are eliminated by automation can be “reskilled” to perform other jobs in an organization. They offer examples like Accenture, which claimed in 2017 to have replaced 17,000 back-office processing jobs without layoffs, by training employees to work elsewhere in the company. In a letter to shareholders last year, Jeff Bezos, Amazon’s chief executive, said that more than 16,000 Amazon warehouse workers had received training in high-demand fields like nursing and aircraft mechanics, with the company covering 95 percent of their expenses.

But these programs may be the exception that proves the rule. There are plenty of stories of successful reskilling — optimists often cite a program in Kentucky that trained a small group of former coal miners to become computer programmers — but there is little evidence that it works at scale. A report by the World Economic Forum this month estimated that of the 1.37 million workers who are projected to be fully displaced by automation in the next decade, only one in four can be profitably reskilled by private-sector programs. The rest, presumably, will need to fend for themselves or rely on government assistance.

In Davos, executives tend to speak about automation as a natural phenomenon over which they have no control, like hurricanes or heat waves. They claim that if they don’t automate jobs as quickly as possible, their competitors will.

“They will be disrupted if they don’t,” said Katy George, a senior partner at the consulting firm McKinsey & Company.

Automating work is a choice, of course, one made harder by the demands of shareholders, but it is still a choice. And even if some degree of unemployment caused by automation is inevitable, these executives can choose how the gains from automation and A.I. are distributed, and whether to give the excess profits they reap as a result to workers, or hoard it for themselves and their shareholders.

The choices made by the Davos elite — and the pressure applied on them to act in workers’ interests rather than their own — will determine whether A.I. is used as a tool for increasing productivity or for inflicting pain.

“The choice isn’t between automation and non-automation,” said Erik Brynjolfsson, the director of M.I.T.’s Initiative on the Digital Economy. “It’s between whether you use the technology in a way that creates shared prosperity, or more concentration of wealth.”

RobotABB-helpYouAbolish
Kevin Roose is a columnist for Business Day and a writer-at-large for The New York Times Magazine. His column, “The Shift,” examines the intersection of technology, business, and culture. @kevinroose • Facebook
A version of this article appears in print on Jan. 25, 2019, on Page B1 of the New York edition with the headline: The Automation Agenda Hidden by the Davos Elite.