Category Archives: Economy

Deflation is everywhere. So what? It’s another crack in the wall.

Concerns about deflation are becoming widespread.  Deflation is unwelcome because it makes loans more difficult to pay off and dampens economic vitality by encouraging hoarding of cash (some banks offer negative interest for deposits).

There were concerns about the spectre of inflation back in 2008/9 but they were held at bay until the recent drop in oil prices.   Now it is difficult to encourage the optimism required to stimulate economies because the fundamental dynamics have not been addressed.

Job growth has not delivered livelihoods to people at the bottom of the pyramid.  Growth in part time jobs has occurred as businesses  fill needs without committing to the full cost of employment.  This means people have a job but can barely save cash at the end of the week, if at all.

While people in big cities might feel more optimistic the fundamental activity of economies around the world continues to be impacted by natural resource constraints and a top heavy, over-extended economic system.  The recognition of deflation is another sign that global systems have not been repaired since the financial crisis.  It is worrying.

As a sustainability advocate, I also see things from another angle, which is that deflation is exactly what the world needs.  The science of the biosphere is that there are too many people consuming too much for natural systems to bear.  It has been possible because of oil (millions of years of sun’s stored energy) but the consequence has been deterioration of ecological systems leading to climate volatility, species loss, water shortages and the impending vicious cycle of habitat loss.

We need success without growth.   That is possible, but we must all choose.  Policy makers must be bold if they are to see the new paradigms that are possible.  We must do more with less.  We must respect and enjoy our connection with nature.  As far as the banking system goes, it must continue to deleverage and become more transparent.  The biggest unspoken hindrance to positive change is corruption which increases the higher up the pyramid you go.

What to do?  Vote for change with your wallet – buy clean food and other goods, eschew packaging and dross.  Support people who make things.  Educate everyone.  Enlighten culture by supporting the values that everyone knows are right.  And if you are at the top, turn your organisation upside down – that will make the world a better place.  Good luck.

The Economist published three articles on deflation this week, so it must be serious.  Here they are:

The high cost of falling prices

Worse than nothing

Feeling down

1% own more than everyone else by next year: a decadent milestone in the implosion of civilisation.

 Oxfam research shows that the share of the world’s wealth owned by the richest 1% increased from 44% in 2009 to 48% last year.  Each adult on average has $2.7m.  On current trends the wealthiest 1% will own more than 50% of the world’s wealth by 2016.

Today the 80 richest people have the same wealth as the poorest 50%.  20% of people (including you – sorry!) own 94.5% of wealth.  The average wealth of the poorest 80% is only $3,851 (€ 3,320) per adult.

The wealth at the top is not just from hard work and prudent asset management.  That would at least be honest.  Much of it has been accrued through tax avoidance (even tax evasion), collusion, corruption and confiscation by force.  It’s not just the wealthy that cheat – many people game the system and take housing and unemployment benefit while having jobs – though of course they are not the bulk of the problem.  And overall, humanity has taken too much from nature.

The imbalance will not last.  The longer it takes for fairness (not equality) to dominate our systems, the more likely that rebalancing of wealth will occur by violent revolution, destroying much of the wealth, rather than humane evolution which might preserve wealth.

Systems are clearly breaking down.  Economic systems remain confusing and stagnant despite at least 6 years of patching.  Employment opportunities are shrinking as technology continues to automate production from food, to cars to banking.  Everyday there is another report of environmental disintegration, whether from climate volatility, species loss, or water shortage.  And people are not any more fulfilled.

System change is still possible and increasingly urgent.  Everyone can make a difference by choosing how they invest and spend their money.  But those at the top must lead change or expect to be swept away in violence as society disintegrates in the coming decades.  This is becoming more certain.  The Limits to Growth have been passed.

BBC: Richest 1% to own more than rest of world, Oxfam says

Astraea: Data shows global growth now past tipping point. Global collapse occurring. Whole systems change imperative.

Wikipedia: Limits To Growth

DMI: A Synopsis: Limits to Growth: The 30-Year Update

Club of Rome: Limits To Growth

 

“The Facts” about sustainability, the environment and your future.

Below are the facts stated in the film Cowspiracy and their references.  Which ever side you’re on it’s good to know them.   For example, one takeaway from the ideas presented is that we can resolve environmental problems, reform economic systems and still keep our cars, if we change our diet.  If you take that with a pinch of salt (ha ha) it actually sounds quite interesting.  Anyway that’s a conversation for another day.  Here are the facts:

Animal agriculture is responsible for 18% of greenhouse gas emissions, more than all transportation combined. [i]

Fao.org. Spotlight: Livestock impacts on the environment.

http://www.fao.org/ag/magazine/0612sp1.htm

Transportation is responsible for 13% of all greenhouse gas emissions.

Greenhouse gas emissions from this sector primarily involve fossil fuels burned for road, rail, air, and marine transportation.

Environmental Protection Agency. “Global Emissions.”

http://www.epa.gov/climatechange/ghgemissions/global.html

Livestock and their byproducts account for at least 32,000 million tons of carbon dioxide (CO2) per year, or 51% of all worldwide greenhouse gas emissions.

Goodland, R Anhang, J. “Livestock and Climate Change: What if the key actors in climate change were pigs, chickens and cows?”

WorldWatch, November/December 2009. Worldwatch Institute, Washington, DC, USA. Pp. 10–19.

http://www.worldwatch.org/node/6294

Methane is 25-100 times more destructive than CO2.

“Improved Attribution of Climate Forcing to Emissions.” Science Magazine.

http://www.sciencemag.org/content/326/5953/716.figures-only

Methane has a global warming power 86 times that of CO2.

NASA. “Methane: Its Role as a Greenhouse Gas.” Jet Propulsion Laboratory.

http://www.jpl.nasa.gov/education/pdfs/podest_ghg.pdf

Continue reading “The Facts” about sustainability, the environment and your future.

COP out? Yes! Sadly as expected, but what else could happen …

The 20th Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change treaty ran over by a couple of days as delegates from over 190 countries “negotiated” the language of resolutions to control carbon emissions.  Rich countries don’t want to pay for past emissions; emerging economies don’t want their opportunity for the luxuries enjoyed by rich countries to  be jeopardised.  The consensus was that results were unsatisfactory.

The confrontational nature of discussions means they will not develop new systems that save humanity from growing environmental pressure and related economic problems.  No viable solution can be found until everyone recognises the common goals which are underpinned by the interconnectedness of people to planet and its biosphere.

Can you do anything?  Yes!  It never seems to be enough but taking a step in the right direction does make a difference.  Changing consumption habits and changing what you say to your friends is what changes culture and behaviour of a population.  Every little bit you do to make a difference, DOES make a difference.  The more people that take a step in the right direction, the sooner we’ll have more attractive options than environmental implosion, economic volatility and social violence.

So even if they don’t “cop on”, we can all make a change for good.

At a recent book signing for Common Sense, I was asked questions about what can be done.  The consensus was to cut back on beef consumption because it’s simple and has a huge impact.  Once you’ve done that it’s easier to cut back on other gratuitous consumption like packaging, cosmetics, detergents, and travel and easier to spend more time with friends and family.  Enjoy them and the planet while you can.  🙂

We’re ALL living next to slaves. 36 million of them.

Walk Free published the 2014 Global Slavery Index which makes for sad reading.  167 countries have them, including some which really shouldn’t:

Japan 240 thousand
South Africa 110 thousand
Singapore 5 thousand
USA 60 thousand
Italy 11 thousand
Germany 11 thousand
France 9 thousand
UK 8 thousand
Ireland 300

The report defines slaves as people subject to forced labour, debt bondage, trafficking, sexual exploitation for money and forced or servile marriage, none of which sounds like it should be acceptable in the countries above.

What can you do?  Be aware that it happens.  Don’t turn a blind eye.  And if you see signs of it, tell someone in authority.

Global Slavery Index Report – findings

Walk Free

BBC: Almost 36m people live in modern slavery – report

 

 

Malnutrition costs the global economy over 3 years’ GDP growth

The Global Nutrition Report said that  globally, malnutrition led to “11% of GDP being squandered as a result of lives lost, less learning, less earning and days lost to illness.”

And the numbers are made more appalling by the fact that they cut both ways: not enough food and too much food.  Every nation except China (whose regions could probably be included if you separate urban and rural) had crossed a “malnutrition red line”, suffering from too much or too little nutrition.

On the sad side of the spectrum the UN World Food Programme estimates that poor nutrition causes nearly half of deaths in children aged under five, that’s- 3.1 million children each year.  In addition lack of food restricts brain and immune system development.

_78913064_overweightwoman2paAt the fat end of the wedge the problems include obesity, diabetes, vascular disease.

Ironically half of the countries are grappling with under-nutrition and also over-nutrition problems!

You would think that bi agribusinesses and food companies would have helped but they seem to exacerbate the problems by pushing sugar to the overfed and pulling livelihoods from the underfed.

The global nutrition report.

BBC: World is crossing malnutrition red line, report warns

Data shows global growth now past tipping point. Global collapse occurring. Whole systems change imperative.

Economic research published by the University of Melbourne analysed the predictions made in the ground breaking 1972 book Limits to Growth, and notes that the actual trajectory followed in the four decades since has followed the worst case scenario.

The 1970s computer model has proved remarkably accurate in predicting developments in the world economy, population and resource consumption, according to the study published by the Melbourne Sustainable Society Institute.

The Limits To Growth business-as-usual scenario foresaw the beginning of “overshoot and collapse” in about 2015, predicting a death rate rise would start about 2020, with the half-billion-per-decade population declines kicking in from about 2030.

As average standards of living fall at rates faster than they have historically risen due to disruption of normal economic functions (note the global financial crisis) enormous social tensions will rise, especially where wealth inequality is greatest.

Recent data shows that the life span in developed countries is already declining, principally because of diseases caused by over eating.  Surely that is decadent.

Sadly, cynics, like me, can point to a silver lining – that reducing the population is the cure for a planet being consumed by humanity.

The opportunity to enlighten global management systems is waning.  I strongly urge leaders to adopt integral and holonic thinking in renovating systems and policies.  Common Sense must be applied.

University of Melbourne: “Is global collapse imminent? An updated comparison of The Limits to Growth with historical data”  PDF

EU- Environment: “Limits to Growth” predictions borne out, analysis finds

Population and wealth – a picture of the sad, obvious inequality.

This graphic from The Economist sums up what we all know but don’t like to face (as @RustyRockets just pointed out).

globalwealth20141018

So 0.7% of the people have 44% of the wealth, and 68.9% of the people have 2.9% of the wealth.  That doesn’t sound fair, or like democracy, or Christian/Islamic/Bhuddist, or … anything to be proud of.

Yellen about the benefits of education.

Fed Chair Janet Yellen said in a speech yesterday that “public education spending is often lower for students in lower-income households than for students in higher-income households.”

The Fed’s unusual comment on education came in a speech, delivered at the Conference on Economic Opportunity & Inequality sponsored by the Federal Reserve Bank of Boston, and named education as one of the four “building blocks of opportunity” that could help reduce inequality, with the other three being parents’ financial resources, starting a business, and inheritance.   Of the four areas, education is where the state can make the greatest impact.

The focus on education is timely, as new techniques, facilitated by IT, are evolving rapidly and offer a chance to rejuvenate learning.

BloombergBusinessWeek:  Janet Yellen on the Broken Way America Pays for Public Schools

Asset prices down, money chasing security. What’s the problem?

While there has been enthusiasm for a recovering global economy, optimism is being dampened by market movements.

There are some fundamental concerns about projected consumption levels and production costs.

There are a number of geopolitical risks festering around the world:

The strife in Hong Kong is being calmed by force.  That will be re-assuring now, but has shown the inability of Xi to lead a new path and China to manage the inevitable progression to maturity.  Hong Kong is China’s best testing ground for political innovation, which must manifest in China soon otherwise social tension will disrupt economic strength.

The middle east …!  Syria and IS are immediate and top of the list, but they are set to be a decades long drama of death.  Iraq, Afghanistan, Iran., Libya, and more.  Israel/Palestine … so sad.  These are are drain on the consciousness, but are inconsequential as long as the oil flows.  Phew.

Ebola is gaining momentum rather than being contained.  That might change.  But it’s scary to imagine a wierd disease like that becoming a global epidemic.  Managing a cataclysm like that might bring people together.

Everything’s going to be fine, in the short term.  But the underlying systemic risks, economic, social and ethical,  remain.

A holonic prescription for success without growth beckons.  Will our leaders lean in that direction?

BBC: Global shares slide on growth fears

BloombergBusinessWeek:  U.S. Oil Producers May Drill Themselves Into Oblivion

 IMF: World Economic Outlook (WEO) Legacies, Clouds, Uncertainties