Friday, November 20, 2009

Your World is About to Get Smaller

A couple months ago I finished reading Your World is About to Get a Whole Lot Smaller by Jeff Rubin. Which is undoubtedly is a worthwhile read and I think he has his visions of where our economy is going spot on, and aligns with a lot of the thoughts I've mentioned previously. (Also reminds me of the views of Yvon Chouinard touched on in his book Let My People go Surfing a great book on what corporations should focus on to be both social responsible and profitable.) However, I can't say I believe his delivery of the message was in the most effective manner. And unfortunately I believe it may sway some people away from siding with him due to being a little to aggressive and repetitive in some points to convince someone who isn't on side with him already to a certain degree. Here's a quote from the book I'd like to share.
"Despite the steady barrage of climate change news and a growing sense that our affluent lifestyles may have unpleasant consequences for the environment, few of us stop to consider how just about every facet of our lives is built around our energy consumption. Nearly everything we do is inextricably bound to our use of energy.

And by "energy" i mean oil. Yes we use natural gas and some coal to generate electricity; but the world's car and trucks and ships and planes run on oil. That means that the global economy runs on oil, because of the global economy is about moving things around the world. and the reason the global economy has put all its eggs in one basket is that there is no other basket. As of right now, everything - from salmon on your plate to the entire model of a global economy - depends on keeping the oil flowing.

Now what happens when the price of salmon goes up? You buy less of it. and when the price of gasoline goes up, you drive less. when he price of clothes or computers or anything else goes up, everybody buys less. And when everybody spends less we have a recession.

.... History keeps showing that the economy recovers, usually after a few quarters, and life goes on. Markets pick up, factories ramp up production, and eventually you're back to eating all the salmon you want.

But the history of the mordern global economy is not all that long, and it is worth asking whether the patterns we have seen in hte past decades are onse we can expect to go on repeating into the future. we have seen high oil prices trigger recessions before, and in each case the medicine to cure a sick economy has been ready at hand a cheap new supply. It's simple as long as you have a ready supply of that oil.

But if you don't, the whole idea of recovery from a recession has to be redefined - because it's not going to look like it used to. "

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