Low gas prices are not good news

Since Standard & Poor’s downgraded U.S. Treasury bonds last week in the aftermath of the debt-ceiling debacle, financial markets have been whipsawing up and down like a demented yo-yo. In the midst of all the turmoil, there is one seeming (I say, seeming) bright spot you may have noticed: the price of gasoline has gone down. Over lunch hour today I filled my tank at 119.3 cents per liter, a price level lower, by a few pennies at least, than we’ve seen for a while. (My touted e-bike has a flat tire just now, darn it.) Sorry to break it to you, but the price drop isn’t really good news, it’s just another species of bad news.

To boil things down, the price of gas was as high as it was because worldwide demand for oil was near the limits of supply. Things weren’t quite as tight as they were back in 2008, but they were tight enough. Oil isn’t just essential (you can’t run an industrial society on muscle power), it is non-substitutable: it would be a decades-long project both to switch to alternate energy sources for most applications, assuming such sources can be found at all; to rebuild transport and other infrastructure to run on a non-petroleum basis; and to find replacements for the myriad other uses to which petroleum is put. This combination of traits means that demand for oil is inelastic: in the face of supply constraints, the demand doesn’t go down even as the price goes up, up, up. Under these circumstances, the price of oil becomes a brake on the economy, as the increased costs of new productive activity gobble up any possible return. Now, with the financial system roiling from the effects of the downgrade, the game is over: people and institutions with money they could be investing are fleeing instead, looking for safe harbours. Productivity will drop, plants will close, people will be thrown out of work, shipping will shrink, there will be less travel and overall less activity, and demand for oil will go down the hard way – by being destroyed. Paying a few pennies less to fill your tank is a small consolation for all that misery, especially if you’re one of the newly unemployed and a full gas tank is more than you can afford.

That’s the bad news. The worse news is, demand destruction due to supply constraints is just going to keep happening. The magic words are, you guessed it, peak oil. The low-hanging fruit has all been plucked, and what’s left is the half that is most difficult, marginal, and unrewarding to extract. As the supply becomes ever more constrained, it becomes ever costlier to keep up even the same level of activity, much less increase it, until the activity becomes completely unsustainable and collapses to what the available resources will permit. This is what we’re beginning to experience, and will be an increasing part of our lives for the foreseeable future and beyond.

Jim Flaherty says that Canada is well-placed to weather the economic storm, but he would say that, wouldn’t he? Not only is it in his job description to make such optimistic pronouncements, but it’s not clear to me that he could be brought to understand the reality of our situation. As the finance minister of a G-8 country, he should be assumed to be as out of touch with reality as the economics profession is.

The financial crisis we’re in now isn’t new, it’s just a continuation of what started with the collapse of the U.S. subprime mortgage market in 2007 and really hit the fan with the failure of Lehman Bros. in September 2008 and the subsequent bailouts. The Great Recession that followed was partly, but sluggishly, reversed by a round of Keynesian stimulus, which has since petered out. Things might have coasted on a bit longer, but the Tea Party put a stop to that by using the threat of preventing a rise in America’s statutory debt limit as a way to pursue their demands. Absent extraordinary measures (there was talk of President Obama using seigniorage – literally ordering the Mint to produce a platinum coin denominated at TWO TRILLION DOLLARS to deposit at the Federal Reserve), this would have rendered the U.S. Treasury – effectively the cornerstone of the world economy – incapable of meeting its obligations. In other words, America’s Tea Partiers effectively put a gun to the head of Money Itself and threatened to pull the trigger. Small wonder if S&P decided this reflected poorly on the viability of U.S. government debt.

The ratings agencies, Standard & Poor’s not least, still have a lot to answer for. They continued to give residential mortgage-backed securities their top ratings long after it should have become obvious that they were so much toxic waste. In a saner age, the ratings agencies were paid by investors, who would have reason to punish them for such a failure. Nowadays their compensation comes from the other side of the equation, and can expect to be rewarded for letting investors take a bath on the banks’ offerings. The fact that this goes on in full view and no one does anything about it is one strong indication of how corrupt the financial system has become.

In some quarters, S&P is vehemently suspected of having enacted the downgrade not on the merits of the case but as part of a coordinated, ideologically-driven campaign to push the banks’ agenda. The invaluable Yves Smith pursues the story to the next step: a suggestion that another agency, Moody’s, might downgrade certain municipalities inhabited by a large number of high net-worth individuals – even though these municipalities are the least likely to default – in order to prompt the HNWIs to start pressuring their representatives to perform in a bank-approved fashion. Like a series of bad torture-porn films, this stuff just keeps escalating.

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How to use ALL the toner in your laser printer

When I first starting working at The Lance (over twenty years ago now, aack!), they had just burned $6,000 — in 1989 dollars, mind you — on a professional desktop-publishing setup. This included a 1200 dpi laser printer, very high quality for the time. One thing I remember about this printer is that there was no such thing as a toner cartridge for it. Instead, there was a simple hopper: you lifted a lid, scooped up some raw toner with a plastic scoop, dropped it in. Repeat until it was full and then you closed the lid. Easy.

Too easy! How are they supposed to gouge you when you can buy bulk toner and just scoop it in like coffee grounds? We all know that printer ink/toner is a racket… Now here’s video proof.

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Another week, another set of links

Here are this week’s interesting links:

  • The Daily WTF is a website for IT professionals and programmers to share war stories about strange and proposterous things they encounter in their line of work. Most of them require a pretty deep background in IT to be comprehensible… This one is an exception. ‘Four’ reminds me of the stories Melinda used to tell me about her former employer.
  • Okay, why didn’t I think of putting a theremin inside a matryoshka doll and selling it on the Internet? The result is called a matryomin, and if the inventor doesn’t die a millionaire, then we don’t live in a just world.

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Stuff I came across: Week of April 11, 2011

Here follow this week’s ephemera.

  • Things you didn’t know you had to worry about: What to do when your pilot gets sucked out the plane window. Um, I have to sit down now. Oh, I’m already sitting? Ah, I didn’t realize. Well, then. *shudder*
  • Cars, whole houses, and even severed feet in shoes: The vast field of debris from Japan earthquake and tsunami that’s floating towards U.S. West Coast. Wow — you have to see the photos, if nothing else. Spotted by the U.S. Navy’s 7th Fleet, the debris field is predicted to hit the west coast of North America about three years from now. Forget letters in a bottle, picture some poor Japanese family’s entire home washing up on your shore.
  • Growth Rings: Maps of U.S. population change from the 2000 to 2010 census. The continued hollowing-out of Detroit is impressive, but by now that’s only because it’s been going on for so long — the pattern of people moving away from the core to the suburban fringes is universal. They also point out a tiny reversal in the very core of Detroit — for some young people, it’s getting cool to be urban again.
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A buck-thirty a liter… Ouch!

If you drive a car here in Windsor, chances are you noticed that the price of gasoline jumped yet again last night. The gas station at the corner of Wyandotte and Lauzon was selling gas at 129.9 cents per liter. It all seems to be coming true… That’s why I’m pleased to introduce my new baby!


She runs on electricity, gets 50-60 kilometers on a charge, and she’s a fun ride to boot! Not to mention that she’s likely to pay for herself in a matter of months. Admit it: you want one too.

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News from the Catholic Church

It’s official. The demand for exorcists is higher than ever, and a group of priests and assorted hangers-on at a Roman Catholic university in Rome have identified the source of the problem: it’s the Internet’s fault! With modern communications, it seems, it’s easier than ever for at-risk youth to find information on Satanism and thus expose themselves to the cruel threat of diabolical invasion.

One learned hierophant informs us that ‘people who are possessed by Satan vomit shards of glass and pieces of iron, scream, dribble and slobber, utter blasphemies and have to be physically restrained.’ What’s more, he adds, ‘[T]he sex abuse scandals which have engulfed the Church in the US, Ireland, Germany and other countries, were proof that the anti-Christ was waging a war against the Holy See. He said Pope Benedict XVI believed “wholeheartedly” in the practice of exorcism.’

Now, I call that a neat trick: invent an invisible enemy called Satan, then blame him for your own sins. To my mind, what he describes sounds more like a conflation of (a) legitimate mental illness, necessitating psychiatric care, with (b) the entirely justified reaction of a young person at the approach of a Catholic priest. Keep trying, fellas (and they are all fellas): Get enough people to swallow this stuff and your glory days will be back before we know it.

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Things I came across: Week of March 28, 2011

I’m going to start keeping track of cool, fun, interesting, terrifying and/or random things I come across and posting them on a regular basis. Here’s the first collection.

  • An eight-year-long thread (and still going strong) of ER docs, nurses, students, paramedics and others who live in the world of emergency medicine, venting about their mostest favouritest patients. (It’s not heartless, just a coping mechanism.)
  • Infographic: How to have a rational discussion. By itself it’s not going to change anyone’s mind. However, if you’re ever roped into in a conversation with someone who thinks there’s an actual debate to be had about vaccines causing autism (hint: they don’t), or the reality of the Apollo moon landings, it’s a useful way to gauge how badly they’re wasting your time. As a reasonable person, you will, of course, be making a conscientious effort to follow the rules and reach the “Congratulations” box fair and square. If the other person does not follow the rules, you’re fully justified in cutting off discussion and declaring them the loser.
  • From 1905 to 1916, there was a hockey team right here in Canada called the Windsor Swastikas. Not the Windsor I live in, thank God, the one in Nova Scotia. Wikipedia helpfully notes “the Swastikas chose their name as at the time the swastika was a symbol associated with luck and success.” Today, even though the Town of Windsor’s website bills the place as the “Birthplace of Hockey”, the team is mysteriously nowhere to be found on the site.
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Fire in Detroit

Woke up this morning to see a plume of smoke stretching across my entire view:

Apparently it’s a plastics-recycling warehouse on fire in Detroit. That would account for the thick black smoke. As I write, it’s been burning for four hours with no end in sight — low water pressure in the area is making the firefighters’ efforts pretty feeble, seemingly. I just hope nobody’s hurt.

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The cutting edge of beer technology

Guinness drinkers who drink at home will be familiar with the little plastic ball that rattles around in the can after you crack it open and pour out a pint of dark creamy goodness. If you’ve ever wondered what that thing is for, wonder no longer. I’m not sure how I’d feel about it being replaced by a credit-card-sized piece of filter paper, though. Why wouldn’t it turn to mush and make my beer into a cellulose shake?

Bonus: this guy has made a collection of neat YouTube videos about all kinds of everyday technologies and how they work. Here’s one about pop can pull tabs that seems beer-applicable as well.


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To knock some sense into them

Here’s a nice little meme from the past couple of weeks: Motorists, who feel their progress is being hindered by non-motorists, taking matters into their own hands and plowing into crowds of people.

That’s the corner of Tulip and Iris in Summerville, South Carolina, where a couple of weeks ago a mother driving her kids to school encountered a group of students walking in the road who wouldn’t get out of the way and decided to hit the gas. She struck four kids, aged 12 to 14, one of whom was sent to hospital. She was later quoted as saying she wanted to “knock some sense into them”.

Around the same time, in Brazil, a man driving with his 15-year-old son found his car surrounded by a group of slow-moving bicyclists at an event to promote bicycling as a sustainable form of transportation. He was caught on video deliberately accelerating into the group of cyclists, at least three of whom were taken to hospital for their injuries. Mr. Richard Neis said he felt he and his son were threatened as people pounded on the roof and even broke windows.

I agree with Mr. Neis that people should be able to get from one place to another without feeling threatened by their surroundings. Likewise, anyone who’s tried to walk in a car-oriented area without sidewalks, or ridden a bicycle on a six-lane thoroughfare because sidewalks are off-limits, knows how harrowing (and sometimes fatal) it can be, so he has my sympathy. In a lot of ways it would be a relief to live without a car, but if the cost is second-class citizenship, for the moment that’s still too high for me.

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