One day, all our computational abilities will flow, as electricity does, into every home, carrying with it the full force of the entire orchestra of functionality on the Internet — it will cease to be the Internet and become the Grid.
A prediction inspired by this...
His art has been linked here always as a staple on the sites blog roll. In this video though, Chris Jordan, is in his own words able to bring new life to his work (from TED, Chris Jordan: Picturing excess).
Huxley, Friedman and Roosevelt
Perhaps the deepest truth I know of, is an utterance that comes to us long lost from an English novelist of the 19th Century by the name of Aldous Huxley, who said “That men do not learn very much from the lessons of history is the most important of all the lessons that History has to teach.” Today we live in a literal proof of a society misunderstanding of the profound nature of this observation, at least economically speaking. In 1929, on the day the stock market crashed, the headline of Variety read, Wall Street Lays an Egg. Thats timid compared to whats already been said about today’s circumstances. The fact is though, Variety like today’s media, has it all wrong.
It was the economist Milton Friedman who best summed up the cause of our present-day economic woes with his thoughts on what caused the Great Depression, saying “The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy,” Change came from an usher as desperate as were the times. Just four short years later, in his 1933 campaign speech, Roosevelt said, “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.” And try they did.
Day in the Life
Such brute force as proposed there, howsoever, will serve ill the very different America of today. How different is it? In some ways very different, in others respects not at all.
- Food Shortages: The Tri-State Observer reports that the US has no remaining grain reserves…
According to the May 1, 2008 CCC inventory report there are only 24.1 million bushels of wheat in inventory, so after this sale there will be only 2.7 million bushels of wheat left the entire CCC inventory,” warned Matlack. “Our concern is not that we are using the remainder of our strategic grain reserves for humanitarian relief. AAM fully supports the action and all humanitarian food relief. Our concern is that the U.S. has nothing else in our emergency food pantry. There is no cheese, no butter, no dry milk powder, no grains or anything else left in reserve. The o°©nly thing left in the entire CCC inventory will be 2.7 million bushels of wheat which is about enough wheat to make 1?2 of a loaf of bread for each of the 300 million people in America.”
Here is a direct link to that report.
- Energy Crisis: Fox News asks, “Are We at Risk of a Global Recession Because of Oil?”
- Environmental and Natural Disasters: Some of these Oil spills, Ozone depletion, Earthquake related Tsunamis, a European heatwave that killed over 37,000 in 2003, and Hurricane Katrina just to name a few.
It sounds as if I’m describing doomsday but I’m not. I’m describing today, the 1930s, the 1970s, and I might as well be describing any day at random. The fact is these things happened before and will again. And Huxley’s lesson will continue to escape most of us just as it has done and will continue to do.
Not everyone comes as late to History class fortunately, some realize this and try and find new, more useful ways to look at the past. And some manage to apply what they learn. Current Macroeconomic theory suggests consumers and businesses of Great Depression era relied on cheap credit. Consumers did so purchasing goods, while businesses did so investing in production. This economic behavior fueled rapid, short-term economic growth, creating swells of debt. When prices deflated, growth essentially collapsed. As the corporations and consumers both defaulted on loans, unclaimed, full inventories further deflated prices. The corporations laid off workers reducing consumer spending, eventually creating a kind of self-sustaining cycle, and later the wave of defaults shook banks. Confidence plummeted in corporations, the markets, and finally the banks themselves, creating a ‘run on the bank.’ This suggests a way to look at today.
Today, we face very alike conditions. A systemic networked banking system creates investment banks such as Bear Stearns, called “too big to fail”, that require 30 billion dollar rescues when the same debt-fueled growth cycle causes just their collapse. And while that may have plugged one very apparent hole, the overall cycle will continue.
Starting in 2003 until sometime in 2007, the economy saw the same sort of rapid, short-term growth across a majority of markets, favoring housing, equities and derivatives, relying on the same kind of cheap, plentiful credit used prior to the Great Depression. Today different from the 1930s, that cheap credit has been delivered by sharing the debt amongst banks and further wrapped up as derivatives securities — this, and inter-bank lending creates the systemic connection between banks potentially making them too big to fail.
Before long though, debt-fueled growth causes confidence scares; loans come to term and defaults drive the flow of money out of lenders and spenders and into things like commodities, where the cycle enters the next phase. The new and higher commodity prices push down the equities and other securities and raise costs. The whole tree begins to poison, spreading one branch at a time.
Back to the Future
The future cannot be known but the past is not as limited. Thus, I feel confident in the future I see ahead, so mindful of the past. I say next, we’ll begin to hear about other lenders, spenders and connected investment vehicles; as CNN has only just put it, there are more perils ahead. Problems will crop up with automobile loans and students loans as well the securities that are related. The government may step in or reduced auto sales might help ease certain energy prices; the oil bubble might burst, leaving just food and other inflation to deal with. The student loan market is already drying up though and the government is already getting involved.
Despite the panic in the markets and all the volatility, I’m confident, though I realize quite sadly, to know our future, we needn’t look into any sort of crystal ball, but instead right where Huxley would suggest, using eyes focused backward in time.
As any writer worth his salt might reflect, we each are characters in a plot-line too big to comprehend. Or, put another way, we are each unique snowflakes thrown across the stormy sky. However you put it, this reality can sometimes make seeing change difficult. This aspect of human life while enjoyable, dynamic and mysterious also means, the actions we take are what make our environment; a place that might be as different without us as that storm without snowflakes.
Voltaire spoke in these exact terms only about people, noticing one way that the impossibly tiny connected with the impossibly massive. For people especially, and maybe with all things, this specific domain where an intersection of scale seems to take place ought to be referred to as the Scale of Truth. When Voltaire pinned down this Scale he did so saying, “No snowflake in an avalanche ever feels responsible.”
There is a hidden truth revealed in personifying snowflakes this way — perhaps only about people and societies, perhaps about all of nature. It is this: small things make big things; small things happening make big things happening; at least one very small event (like a molecule of air interacting with a molecule of water of a snowflake) must occur as the “responsible” cause of much more massive events (like a whole snowflake moving and causing an avalanche) or else no such larger events are ever able to take place. We call this logical ordering of things, causal thought — for humans it seems it has to due mostly with frame of reference and blame.
Remarkably unlike most, Voltaire, was not pointing out frame of reference, nor looking to blame. That’s probably because Voltaire possessed different knowledge, having realized much earlier than most, how rarely it is about who done it in nature’s court, instead how it was done. This idea of the responsible snowflake in an avalanche, points out how people do not view their own impact when that impact involves big, landscape-changing events. Voltaire observed how human beings over-quantify the fairness of their own assessment — I sense therefore must be correct, as it were; how we inflate ourselves as individuals, yet underestimate ourselves, dismissing the impact we have as groups. In short, on the Scale of Truth, what Voltaire found was, humans have a kind of blind-spot. They are only so considerate or aware (?) of those other people and things happening around them. As Al Gore pointed out, we have all the sense of a frog slowly set to boil.
Using this view of our individual impact, I can provide some realization about technologies or changes which already exists that have solved nearly impossible problems: a) Change must always occur first on the smallest of scales to ever be evident on larger ones and there it may look different (a realizaion that lead to Quantum Mechanics) b) Every change no matter how seemingly insignificant in any particular frame of reference resonates throughout all scales and all frames of reference (a realization called the Butterfly Effect). This suggests we need even newer forms of technology though. Technology not unlike the Internet which capitalizes on this problem within human design to create new ways to communicate on larger scales, decreasing the blind-spot.
If we go on though, each a little at a time, unable, unaware or simply discounting each other as we go, than we are that thing, that avalanche of change, and we are responsible for its consequences. In fact, if we continue to treat the world as we have, all the generations that come to follow us will have no such thing and not understand a snowflake in order to relate such ideas. Imagine, Voltaire’s wisdom will, along with all other wisdom, fall back into the abyss.
I’ve written about this topic before. And though I type on it, stare at a laptop screen framed of it, and am utterly surrounded by it, the idea is still provocative even to me, that plastic (an innovation so subtle yet ubiquitous) is also at the core of a potential threat to life on Earth. I took a real interest in this idea because it seemed obviously urgent, but because one particular aspect seemed totally, and a bit ironically neglected. The irony I find is, so many people fall back on the topic of the weather. Evidently, not so much when it counts. To help myself and others understand my somewhat radical thoughts about the environment, and to discuss such ironically neglected aspects, I present as preface three very real, very relevant facts about our planet and life, followed by obvious speculation about how these phenomena might be inter-connected and in such a way as to to change life as we know it.
Summer, 2008. You can’t seem to buy a headline that doesn’t remind you that the price of gasoline is at a record high. Everyone is coming out of the wood-work talking Peak oil. Articles stapled to the same headlines fall back on the same, now tiring, discussion about rising demands, shrinking supplies, and the myriad speculative strategies playing out on the open energy market — they talk about anything except solving the problem. Thats because we’re not only at a peak in oil production (which generally drives all other production), we’re at a peak in our production of educated problem solvers. We’ve got a nation of pontificates (at times, myself included).
While Congress questions Big Oil hoping markets can police themselves (lasting it’s tie to capitalism), the opposite only seems obvious and true to consumers and the American people, leaving some of the best analysts wondering, “Is speculation or fundamentals driving the price of oil?” I prefer my question, is it Need or Greed? But, there should be no surprise so little has gotten done, Americans always worry first about who is to blame despite whats opportunities are lost in the meantime — thats the terrifying reality that landed us in Iraq: the need to blame. But, even as we grow nearer to what may amount to the largest energy crisis in American history (perhaps the history of all of our species), and America spirals downward, I realize I have a greater fear, one worse than expensive commodities: my fellow Americans.
Besides the pointless chatter surrounding oil that fills the media — which wastes more energy (in the form of oil, et al) than anything else given its return value — I hear a common notion threaded across the perspective of average Americans: Americans believe George W. Bush, our current President, did all this with a simple policy of “drill and veto.” But, and this is what scares me most, they also believe conversely, that when Bush leaves office these problems will go with him. They believe somehow through Bush’s ties to Big Oil, he was capable of masterminding this global economic shift at the most fundamental level: commodities pricing. Our President alone is not that powerful, thankfully. However, the American people are when they can be united.
So, my poor, undereducated Americans, so down-turned by bad policy, despite your instinct, please forget your dire need to blame. Realize that holding a belief that any such problems will vanish overnight is in fact a form of greed itself, and not need, and is an idea that is plain stupid. We as a society, must exercise the discipline we lacked prior to this, leading us here, in order to find the way out.
Beyond that, personally I feel, George W. Bush, our President, couldn’t mastermind a few elegant English statements in the form of complete English sentences given chair, desk, ink, pen and good reason to do so. And that my friends… is the problem with America, forget oil, we’re at Peak education.
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Peak education is the point in time when the maximum rate of distribution for global education, training, and knowledge is reached, after which the rate of that production and distribution enters its terminal decline. If global consumption is not mitigated before the peak, an education crisis may develop because the availability of conventional education, training and knowledge will drop and the population will rise, perhaps dramatically (Hubbert peak theory).
Not since the likes of Zan & Jayna have twin powers activated as they have with the joint appearance of CEOs for IBM & 
Google at IBM’s PartnerWorld conference this year. As they put it in the Computer World article entitled Google and IBM are bonding in a serious way, “The two CEOs bantered like old golf buddies, praising each other’s organizations and rarely giving moderator Pankaj Ghemawat, a professor of global
strategy at the IESE Business School in Barcelona, Spain, a chance to ask questions.” Schmidt said, “Cloud computing is the story of our lifetime.” Concluding, “Eventually all devices will be on the network.” Schmidt was joined onstage by IBM CEO Sam Palmisano, who said the relationship marks a new territory “It is the first time we have taken something from the consumer arena and applied it to the enterprise.” So, whats with the the oldest computer giant pairing with the latest? Maybe its just that the industry is growing up and its become something new.
Google: Shape of 600 lb. Search Gorilla
Google continues to take shape with things like updating its Finance site, giving Google Video a face lift, and 
continued production of solutions helping others go green. While IBM, the hardware giant of the pair seems in step, this is possible largely because of the dancing space Google’s created; causing Microsoft and Yahoo to consider a merger, analog advertising to fall apart, cell phone networks to become open, and especially bringing a new advertising domain to the table in the form of its massive YouTube audience. These days, nothings too far from the reach of this 600 lb. Googrilla that grew up dominating the tech-world. Google-inspired engineering is especially apparent at IBM with services like Many Eyes and History Flow.
IBM: Form of Enterprise Cloud
The created space hasn’t gone to waste. In all of 2007, IBM reported sales of $98.8 billion, up 8 percent from 2006, 
leaving most sure of its stranglehold on enterprise service and hardware sales for the time being. The line is blurring between the two companies — Google and IBM — and its making these power twins much more identical these days. Even Google CEO Eric Schmidt had made some admissions to that point. “There’s not that much difference between the enterprise cloud and the consumer cloud,” Schmidt said. Later the CEO even offered a distinction which displays the two companies shared reasoning, “The cloud has higher value in business; that’s the secret to our collaboration,” Schmidt added.
The Greater Story: The Grid
The fact is, theres a greater story to be told. It has to due with all these players and a metamorphosis taking place in the industry. It started with the Internet and continues with the creation of the “Cloud” — a generic name for a platform for utility computing that hopes to eventually process, store and transfer every bit of information on Earth. Its a changeover whereas time passes and giants collide in sometimes peaceful ways as with Google and IBM, and sometimes violent ways as once forced together Microsoft gives up its bid for Yahoo. The metaphors of a Gorilla creating space invokes a more forceful saying as well: Lead, follow, or get out of the way. And as once before humanity saw the local energy provider take shape to become the power company, then become regional, and then global — from a network to a grid — so digital information processing, storage and transfer will go from the unit of the PC, to a network, to an Internet, to a Cloud, later becoming an equally, finely, more tightly bound and integrated Grid of utility computing devices (perhaps it’ll even run on International Google Machines).
This chart, released April 10th, 2008 by the American Geological Institute, shows oil by the barrel priced over the last seven years in the US dollar, the Euro dollar, and gold by the ounce. Oil on the commodities market is only ever priced in US dollars, so to get a clearer picture of how the price of oil trends, it is important to include and compare other units such as currencies and even other commodities as is done here. This is because, the dollar pricing itself could be having the most significant impact on the price of oil units. This seems to be the case today.
This data very clearly confirms this idea as it indicates that for about the last 7 years (at least) oil trend has been sideways. In other words, oil valued in gold hasn’t moved in 7 years. Yet, that same oil has become dramatically more expensive when priced in both of the currencies.
There are some reasons why this inflation is abnormal; for instance those same US dollars are backed by gold. As of March of 2008 priced in US dollars, the United States held 261.5 billion in gold. One of the reasons the US has this reserve is to prop up the value of US dollars. Given the value and nature of these gold reserves and the obvious relationship with the US currency, this chart seems to suggest other, very powerful inflationary influences are diminishing the US dollar. Contributing to this may be the 100s of billions of US dollars pumped into the banking system and the consistent downward spiral of the various Fed controlled rates.
But in what seems like a quietus of the dollar, one wonders how speculators will price-in the Fed’s new TAF auctions and new discount window for investment banking entities in the months and years to come.
It was Marcus Aurelius who said “Each thing is of like form from everlasting and comes round again in its cycle.” Looking toward our future in this age of industrial and technological super-boom, maybe whats looming just ahead, is the justice of a balance only nature must keep. In other words, the eventual, equally unrelenting… Super-bust. Its a topic I’ll continue to discuss from a variety of perspectives going forward. The content shown below is mostly reiterated from here, it describes how something just like this can happen, only with our financial structure.
Financial speculator and billionaire, George Soros states in his FT.com commentary: “the current crisis is the
culmination of a super-boom that has lasted for more than 60 years.” In June’s Higher Rates Reflect Default Risk we described the end of the last credit boom: “In 1928, the U.S. Treasury Bond similarly broke out of the channel and rose to a higher yield. This coincided with the end of ‘easy’ money which forced the deleveraging of the economy and concluded with the financial crisis of 1929-1932.” Compare the two Treasury Bond Yield charts below. In 2005-2006 higher bond rates “broke out of the channel” and inflicted damage on the housing market. This marked “the end of ‘easy’ money.” Similarly since 2006, there has also been a flight to quality.
George Soros explains what happens next: “if federal funds were lowered beyond a certain point, the dollar would come under renewed pressure and long-term
bonds would actually go up in yield. Where that point is, is impossible to determine. When it is reached, the ability of the Fed to stimulate the economy comes to an end.” As we described last June, we expect 10 year Treasury Bonds to be sold for cash in the panic, just as occurred at the end of the last credit cycle. Billionaire investor Julian Robertson agrees. As he revealed to Fortune: “the biggest bet that Robertson has in his own portfolio at the moment” is “long the price of two-year Treasury and short the price of the ten-year Treasury.”
http://www.cbsnews.com/stories/2008/02/03/national/main3783425.shtml
President Bush on Monday will release a $3 trillion budget for 2009. Here is a look at some of its elements:
DEFICITS: The plan will claim deficits in the $400 billion range for this year and next. For the 2009 budget year covered by the Bush plan, deficits are likely to rise higher than Mr. Bush predicts after additional war costs are added in.
DEFENSE: The Pentagon would get a $35 billion increase to $515 billion for core programs, about 7 percent, with war costs additional. Another $21 billion would go to the Energy Department for nuclear weapons programs. A $70 billion “bridge fund” for the wars in Iraq and Afghanistan would give the next president time to consider options, with tens of billions of dollars more needed regardless of any strategy shift.
DOMESTIC APPROPRIATIONS: These would be essentially frozen at current levels, with most services being cut after inflation and population growth are factored in.
HOMELAND SECURITY: Overall, the budget for homeland security programs will increase by almost 11 percent, with a 19 percent increase for border security and immigration enforcement efforts, including new money to secure the border with Mexico.
MEDICARE AND MEDICAID: The programs will see almost $200 billion in cuts over the next five years, about three times the savings proposed last year but rejected by Congress. Much of the savings would come from freezing reimbursement rates for most health care providers for three years and from cutting payments to hospitals serving large numbers of the uninsured poor.
HEALTH: Health and Human Services Department funding would be cut by $2 billion, amounting to a 3 percent reduction. Funding for the National Institutes of Health would be frozen. The Food and Drug Administration would receive a 6 percent boost to $2.4 billion to ramp up food and drug safety efforts.
EDUCATION: Education programs would be frozen at $60 billion, with no increase to keep pace with inflation. Bush is pushing to restore $600 million lawmakers cut from Reading First, which serves low-income children. Title I grants, the main source of federal funding for poor students, would rise about 3 percent. Special education would receive $11.3 billion, a $330 million increase.