The Dawn of the Great California Energy Crash

California, which imports over 25% of its electricity from out of state, is in no position to lose half (!) of its entire nuclear power capacity. But that’s exactly what happened earlier this year, when the San Onofre plant in north San Diego County unexpectedly went offline. The loss only worsens the broad energy deficit that has made California the most dependent state in the country on expensive, out-of-state power.

Its two nuclear plants -- San Onofre in the south and Diablo Canyon on the central coast -- together have provided more than 15% of the electricity supply that California generates for itself, before imports. But now there is the prospect that San Onofre will never reopen.

Will California now find that it must import as much as 30% of its power?

The problem of California’s energy dependency has been decades in the making. And it’s not just its electrical power balance that presents an ongoing challenge. California’s oil production peaked in 1985. And despite ongoing gains in energy efficiency via admirably wise regulation, the state’s population and aggregate energy consumption has completely overrun supply.

Some will say, however, that California doesn’t need to concern itself with domestic energy production. As an innovation economy, in the manner of Japan or South Korea, many have said California can simply import greater and greater quantities of energy in exchange for its intellectual capital and the services and products it provides to the world. But the problem with such a notion is that it extrapolates the trend too far.

Only a century ago, California was an emerging giant of oil and gas production, building much of its wealth from natural resource extraction. It was inevitable that this would change over time. However, given the state’s high priced electricity, its wrongly devised transportation system (which is heavily exposed to oil prices), and its deep financial distress, the nation’s largest economy is having to exchange greater amounts of capital to keep itself running.

Indeed, the latest data shows that California energy production from all sources -- oil and gas, nuclear, hydro, and renewables -- has just hit new, 50-year lows:

California’s Great Energy Crash: State Energy Supply at Fifty-Year Lows

Since 1985 (the year that state oil production peaked above one million barrels a day), the state of California has seen its portfolio of energy production steadily decline, from an all- time high above 3,600 trillion BTU (British Thermal Units) to 2,500 trillion BTU (latest available data is through 2010). Because the contribution from both nuclear and renewables during that period has been either small or simply flat, the steady decay of California’s oil and natural gas production has sent the state’s energy production to 50-year lows.

However, during those five decades from 1960 to 2010, California’s population more than doubled, from nearly 16 million to nearly 38 million people.

Additionally, California built out its freeway system and expanded greatly into counties such as Riverside and San Bernardino. Indeed, in San Bernardino County, population quadrupled from 1960 to 2010, from five hundred thousand to over two million, with the attendant homes, public infrastructure, state highways, and freeways.

This great expansion of California’s residential and industrial topography was a tremendous value proposition back when energy, especially oil, was cheap. But now we are in a new pricing era for oil. Equally, California must also pay some of the highest electricity rates in the country. In counterpoint to the dreams of energy conservation, while California’s population merely doubled, its electricity demand rose nearly fivefold, from 57 million KWh in 1960 to 258 million KWh in 2010.

Essentially, California, like the rest of the country, has built a very expensive system of transport, which is now aging along with its powergrid.

Surely in the forty years that followed 1960, the prospect that California would have to import greater quantities of fossil fuels and electricity was no cause for alarm. However, the capital that is now required each year to maintain its aging highway system and purchase out-of-state oil and electricity, is mounting. While it’s true that California’s GDP is mighty and ranks as the 8th largest in the world, it’s also true that even smaller US states have seen their energy production not fall, but rather advance, in the era of higher-priced energy. Surprisingly, California’s total energy production is now lower than Pennsylvania’s, which is an intriguing contrast given that the Keystone State figures so prominently in the history of early oil and coal production.

Who will produce all the energy that California will need to buy in the future?

Golden State Hit by Nuclear Power's Inherent Complexity

In the wake of the Fukushima disaster, a number of countries and communities are reassessing the risk and the cost of nuclear power. Overall, however, it is the aggregate complexity of nuclear power that is driving the global stagnation and now the decline of this particular source of energy.

The complexity of nuclear power -- its enormous expense, its dependence on government financing, its long construction timeline, and its perceived and actual risk -- means that bringing new plants online is ploddingly slow and aging plants are increasingly likely to see their licenses rejected for renewal. From a recent LA Times article, California energy officials plan for life without San Onofre:

California energy officials are beginning to plan for the possibility of a long-range future without the San Onofre nuclear power plant. The plant's unexpected, nearly five-month outage has had officials scrambling to replace its power this summer and has become a wild card in already complicated discussions about the state's energy future. That long-range planning process already involves dealing with the possible repercussions of climate change, a mandate to boost the state's use of renewable sources to 33% of the energy supply by 2020 and another mandate to phase out a process known as once-through cooling, which uses ocean water to cool coastal power plants, that will probably take some other plants out of service. "Some of the weaknesses we have in the infrastructure [of Southern California] are laid bare by San Onofre," said Steve Berberich, chief executive of the California Independent System Operator, the nonprofit that oversees most of the state's energy grid... Before the current shutdown at the plant, officials had planned only for a scenario in which one of the reactors would be off line. No one had anticipated a complete shutdown. The plant's 2,200 megawatts of power provide electricity to about 1.4 million homes, but the facility also provides voltage support to the transmission system that allows power to be imported from elsewhere to the region San Onofre serves, particularly San Diego.

San Onofre’s processing ability has been damaged by faulty computer modeling, which caused excessive and accelerated wear in its steam generator tubes. The cost and timeframe for a solution may be so great that the return on such an investment may not be worth it. But again, note the complexity involved here, which runs the spectrum from computer programming that guides the reactors' operation to the critical role that this southern California power source plays in the grid. In powergrids, nuclear power plants play an infrastructural role but are also critically dependent on receiving power from elsewhere in the grid. As Japan discovered, its own power plant structurally survived the tsunami but failed when it lost external power.

In 2010, the year for which the latest data is available, California consumed 258,531 million KWh (kilowatt hours). 26% of that total was imported mostly from other US states (54,406 million KWh) and a small amount came from Mexico. California’s two nuclear plants provided 32,200 million KWh, about 12% of the total power that the state consumes from all sources.

Roughly speaking (because supply, demand, and capacity fluctuate from year to year), the loss of San Onofre will increase California’s potential dependency on out of state power by at least another 5%. This will indeed push out-of-state power dependency to 30%.

California’s Soaring Oil Dependency

California, like Texas, has been a giant in the history of US oil production. But after reaching a peak rate of production in 1985-86 at around 1.1 million barrels per day, California now produces half that amount, at 540 thousand barrels per day.

Just as in other post-peak producing regions of the world, such as Mexico and the North Sea, there is a constant flow of hope and theorizing that once again California could increase its oil production. While it’s true that opening offshore blocks to development could eventually stabilize and possibly raise the state’s aggregate production, it is highly unlikely that onshore production can now be moved higher. The reason is that best technology practices are already well-deployed in California's onshore production -- where old, original fields continue to produce, but at much lower rates.

More important is that California now has over 35 million registered vehicles, nearly matching its population. That makes California automobile rich but public-transit poor, as the state remains highly leveraged to gasoline.

Indeed, the post-war buildout of California followed the low-density, urban-sprawl model that was replicated throughout the nation after 1950. Accordingly, cities like Los Angeles are having to make a Herculean effort to resurrect a light rail system (built on the grid of its historic trolley network, once the largest in the world).

But 60 years of automobile-driven development will not be undone easily. The state is already spending a disproportionate amount of capital each year just to maintain the existing highway system (an issue we will explore in Part II of this article). And despite that ongoing investment, Californians drive on roads with some of the poorest conditions in the country.

Let's take a look at the history of California's oil production against its historical consumption of gasoline:

The spread between the quantity of oil produced in California and the quantity of gasoline consumed started to blow out in the mid 1980s, when gasoline consumption rose above oil production as measured in BTUs. Many believed this to be sustainable. But as the rest of the country would discover, a price revolution in oil would eventually hurt the economy very badly -- and, consequently, oil consumption. In BTU terms, the difference between production of oil and consumption of gasoline reached its widest in 2006-2007, when annual consumption was running above 1,900 trillion BTUs and oil production at 1,250 trillion BTUs.

Now consumption, like production, is falling. Will consumption follow production downward, relentlessly?

The prospect that petrol consumption has peaked in California, along with the rest of the United States, is exciting if one is viewing such a transition through the lens of efficiency, sustainability, and post-industrialism. However, the dream of a non-industrial economy, like all good ideas, reaches a terminus when we consider that a majority of human services and products are still delivered and produced through physical processes. The State of California does not deliver state transportation, health care, education, police and fire protection, and public works digitally through the Internet. Instead, energy, delivered through tangible infrastructure, is required to run the Golden State.

In Part II: California: The Bellwether for the Rest of America, we take a look at the severely-pressured state budget of California, as well as other measurements of its economy indicating that the direction of its energy balance is entering dire territory. What exactly is the cost of California's energy consumption? And what does it mean, as companies like Facebook build data centers outside the country to access external sources of electricity, that California cities such as Stockton declare bankruptcy?

There is no miracle solution for California. Even if we assume that the country continues to enjoy cheap natural gas prices, the cost of imported electricity from NG-fired power generation will not fall, because the cost of electricity transmission will continue to rise as the grid ages and requires new investment. Eventually the price level of higher energy and lower quality public services will also catch up even to higher wage employees, because a hollowing-out effect is going to pare down the number of service providers -- teachers, merchants, construction workers, and even health care professionals and lawyers.

Such woes, however, are not unique in any way to California. They are shared by most US states right now; California is simply further down the timeline at this point. The key question here is what are the steps Californians (and the rest of us) should be taking?

Click here to access Part II of this report (free executive summary; paid enrollment required for full access).

This is a companion discussion topic for the original entry at https://peakprosperity.com/the-dawn-of-the-great-california-energy-crash/

 
Californians per capita are the most energy efficient citizens in the United States.  This is due in part to our climate.  But part is due to government regulation (much of which came into being during our current governor's last stint in office) forcing us to conserve energy use.  However, every year our aggregate demand goes up and up and up . . .  California's problem is not energy use per se, it is population.  Even at our current rate of just over 1% growth per year, our numbers will double in the course my three year old nephew's lifetime.  This gets to the heart of our sustainability.  

When Angela Merkel said Germany was going to get off nuclear energy.  She could make that statement with a straight face.  Germany's population growth is currently pegged at -.002%.  Yep, I said it right, negative point zero, zero, two percent.  In 70 years there will be half as many Germans as there are today.  And if you travel there you will see solar on roof tops is ubiquitous as are wind farms.

California will never keep up and yet we could if the politcal will existed.  But to do so would mean taking aim at one of the Democratic and Republican parties sacred cows - IMMIGRATION both legal and illegal an in particular from Mexico. . . .

[quote=lynnke] 
California will never keep up and yet we could if the politcal will existed.  But to do so would mean taking aim at one of the Democratic and Republican parties sacred cows - IMMIGRATION both legal and illegal an in particular from Mexico. . . .
[/quote]
 
Man you got it all figured out! I guess I should start packing and go …
BTW, I’ve been working for High Tech companies in California for 13 years now and believe me remove the immigrants and good luck to find “real” Americans to fill in the left vacant engineering positions.
 

 
I think we are having the wrong conversation when talking about solar energy.  The real reason solar energy is not a viable option right now is because of the way we build our homes and offices.  We have had the technology since the 1970's to build VERY energy efficient housing, but we failed to act. 

A great film to watch on this subject is:  "Garbage Warrior" which documents architect Mike Reynolds' journey of home building.  He builds homes that do not require heating or air conditioning units because the homes stay the same temperature inside year round - whether you live in the deserts of New Mexico or the Colorado Rocky Mountains.

The homes he designs and builds use quite a lot of "garbage"  plastic bottles, cans, and TIRES! in their production.  Each home collects and uses it's own water three or four times over.  And the homes are absolutely beautiful - inside and out… and each home comes with it's own  indoor greenhouse.

Mike Reynolds calls it biotechture and critisizes the home building industry for building homes that are not really designed for people. 

According to Jeremy Rifkin, author of "The Third Industrial Revolution," the top three energy consumers are, in order of use:  1.  Buildings   2.  Meat Production   and 3. Transportation.  It sounds counter-intuitive that buildings use more energy than transportation and who knew industrial meat production was the number 2 culprit for wasteful energy consumption?

So, it's not that solar isn't practical, it's that the way we build our homes isn't practical.  The film Garbage Warrior tracks the great difficulties involved in designing and building homes not up to "code."  There are what Mr. Reynolds calls "pockets of freedom" where you can build your home the way you like, without pesky and outdated city, county and state ordinances getting in the way.

Maybe, it's time to change the way we build!

 

I agree, it's a great film, and you can watch it here:

 
As a lifetime Californian, it was great to see a long term overview and analysis of the energy situation on my home turf here, which has been struggling in the wilderness of political misdirection and delusion for so long.  I just read the book Boomerang, and Michael Lewis' description of his bike ride with Schwarzeneger, after he'd left the Governor office - how utterly impossible it was for him to make real progress by moving either to the right or the left politically - just impossible to get the public and politicians to get real, since denial, catering to focused political interests like the prison system companies and employees, etc. and imagining that you can get alot for a little until the very limit of your ability to borrow money seems to suit everyone as a survival strategy.   I didn't vote for Arnold, but still hoped he would/could do well - and he couldn't do much more than a incrementally failing holding action like all the rest.

I keep thinking - as a society, why don't we see more fundamental, long term attempts to assess what's going on like your report and to come up with intelligent responses - on population, environment, budgets, energy - you name it?   At least in the public media space, society has a denial lobotomy and so, of course, its intelligence and planning capability is gone for now, seemingly for the reasons Chris has noted that being real and talking about limited budgets and limited resources isn't positive for political careers.   And good luck with the notion that the wisdom of unregulated free markets can take over where politicians have created a governmental lobotomy.   We already had a nice dose of that brilliant, market-driven energy policy here in California thanks to Enron's Russian-mafia style energy manipulation/ripoffs, and will have to come up with something a little more difficult and complicated than removing all regulations and putting deluded criminal idiots like Lay and Skilling and an industry-packed Federal Energy Regulatory Commission like existed at that time in charge of managing our resources and planning our future.  Not easy - and like so many things, makes braille-method "crash based steering" more likely.   Like a cheap wind-up car, you keep running high speed in the same direction till you crash, experience major damage, course correct, and careen off in a new direction until more damage is encountered, new direction, etc.  I really hope the light bulb goes on before run out of the energy to power it.   I read recently that frogs in slowly heating water actually do get agitated and try to jump out before they die, counter to the story that they cook before they figure out wassup - let's hope that we can get the equivalent a societal foresight & planning transplant before it's too late as well.

 

That wasn't deregulation, that was just a different set of statist giving lip service to a free market while using the state to seek profits at the expense of everyone else.  So please, don't even attempt to claim any of the energy markets are even remotely free markets.

California (love that State) is so dysfunctional from a political standpoint that energy should be the last of their issues. Offshore wind, solar farms, roof top solar, hydro, dessert, oil leaking from the Santa Barbara waters implying oil there, and if the drilling in the Monterrey is ever figured out then what's the problem? Leadership is the problem as it is on the national level.
No matter, the great reset will finally, hopefully, get things moving with a common sense approach to everything. Imagine, we may even develop plans, and energy plan, and work for the common good. How grand a thought is that. Maybe, hopefully, we finally grid every darn thing and send our waste electricity all around our country. If we could just capture more of what we waste then California would light up, and probably reduce the costs to everyone. Maybe!

Maybe California sends all that sunshine in the form of electricity to us. Maybe.

I still would like to know if "OFF the Cuff" has been abandoned. Maybe I didn't get the memo so if anyone knows please pass it along.

Thank you

Go Tigers

BOB

I think you and I already have gone round about the "free-market" notion before awhile back, rhare, so I won't belabor it again here in detail.  I don't know what "a different set of statist(s)" means, but I assume it's a reference to the usual libertarian view that invariably puts the blame for monopolies, misallocation of resources, theft and corruption of free market capitalism on government alone, instead of letting it claim its fair share, and leaves all that's good about markets, and there's a lot, to remain as a benefit of the supposedly infallible market.   The "true free markets" you're talking about must exist in some nameless place we'll never see, or perhaps you can name some great, long term well-performing free markets that exist or have existed other than in libertarian dream land?   I'm skeptical, but open to taking a real look at what you're saying if you can tell me where to look.   I just haven't seen one, and doubt there's one to be seen.  "Free" markets are eternally subject to corruption just like government.   Claims that one can finally be created that has the divine attributes libertarians attribute to them I don't find believeable, based on long history, any more than I'd believe that centrally planned gov't economies are the way to go for the same reason.  I'm glad that, at least we both apparently agree that what's happened under the banner of free-market capitalism recently is trashy stuff, even if not where to go from here.

A friend "in the know" forwarded this informative article to me about what is happening in CA.
http://is.gd/XQKEub

To those that say that CA may have to start importing Energy, they say that is nothing compared to the "Trillion Dollar Eco-Disaster RISK" that the nuclear reactors pose to both CA and the entire USA!  Note that the NRC has closed the San Onofre reactors down and forbid the operators from restarting them without the NRC's permission… Yes all the lights in CA are still on despite the Utilities "claim" that these reactors are needed, somethig that even the State says is not true:

http://sanonofresafety.org/energy-options/

BTW: The above article also contains whistle blower tech comments for those here that have the expertise to understand them.

Worrying about surviving a downturn in the economy is nothing compared to doing the same thing  AFTER a meltdown has occured upwind from where you live…

Kelvinator said:

 "Free" markets are eternally subject to corruption just like government.".

I say two wrongs don't make a right and IF we prosecuted and sent these crooks to jail then the scales of morality would tip up-word percentage wise to good over evil (whatever happened to Might Mouse and Adam Ant? They would straighten this sh*t out).

Will we eliminate the trash, no we will not but exposing them and putting them in jail gets them back into the rat infested alleys they belong. That I am afraid is the governments fault as no one has been prosecuted, NOT ONE!!!? Crazy stupid as it sends the WRONG message.

Respectfully given.

I am so happy that "Off the Cuff" had just been a scheduling problem, and not set aside. Mish, Chris, and Adam put on the best Podcast around. My Roosevelt fireside chat. A must.

Go Tigers

BOB

Agreed, Bob.   But to take out the trash, you need to actually have someone cleaning up - regulations that aren't written by criminals and their congressional operatives and regulators that aren't owned by the criminals.  
And unbelieveably, a remarkable number of people have bought the corrupt baloney, eternally cranked out by the uber-wealthy PR machine that, after all the corruption that has gone on and is still going on, we shouldn't have any regulations or regulators - that that's what "free" markets mean - free to let connected, institutionally powerful wealthy criminals commit unpunished fraud and theft.  I don't believe that that's what rhare and others who sincerely believe in the real value and power of free markets intend.  And without a doubt, regulations need to be simplified, cleaned up, etc. - in part because they're chock full of loopholes inserted by special interests before passage -  lobbyists often literally write parts of the legislation to make sure they have special, favorable carve outs.   But the "free markets are genius - no regs needed" philosophy was very much the cover story for the giant bankster high leverage, mortgage-backed security rip-off operation that was set up to go under Clinton and Treas Sect Ripoff Goldman Sach Operative "Bob" Rubin, and went into high gear under Bush and Hank the Hammer Goldman Sach Operative Paulson.  If I understand correctly, rhare is saying that that's >not< really correctly operating free markets, but companies using the state to ripoff people, and I agree.  The Treasury Dept should just wear Goldman Sachs tea shirts to work.  The same fawning on the wealthy and drooling over wealth as some supreme ideal as opposed to public accountability and morality accounts for social climber Alan Greenspan, who describes himself as "a lifelong libertarian", refusing to investigate or respond to the FBI Director's warnings in 2004 of massive mortgage fraud with the potential to create a financial crisis.  That's why they put him in charge of the Fed.  This fool was supposed to defend the public's interest.  Instead, he opened the vault, defended nothing, gave free money to the banksters, let them use it to leverage 40 to 1, and rip off, bonus out and retire with as much booty as they could carry off.
http://articles.cnn.com/2004-09-17/justice/mortgage.fraud_1_mortgage-fraud-mortgage-industry-s-l-crisis?_s=PM:LAW
Greenspan later acknowledged in congressional testimony that his lifelong notion that businesses would regulate themselves was wrong.  Ya think?  After a few thousand years of human history and recent billions lost in the early '90's S&L ripoff after Reagan's dereg we might have known that?  What planet do people like that come from?  Anyone wonder why they gave him the job as a key "cop on the beat" for the caper and let him feel like his cryptic, self-important mumblings meant anything?
Government is owned by industry, (regulatory capture), as noted by former TARP General Inspector Barofsky in his book Bailout, that just came out:
"…regulatory capture is the main theme of the book. In a phone interview with TIME, Barofsky said exposing this subtle form of corruption was his main motivation for writing the book. And no official gets it worse than Geithner, who, Barofsky argues, “has shown a remarkable deference to the interests of Wall Street, by protecting them at every juncture through the implementation of TARP and the regulatory reform process.” Throughout the narrative, Geithner and other Treasury officials bristle at and obstruct every attempt to turn up the heat on the banks…"
http://business.time.com/2012/07/24/former-tarp-official-both-parties-are-captive-to-the-big-banks/#ixzz21YCLDgBu
Government and industry are joined at the hip -  it's not two problems, it's one problem.  The trash is not getting taken out because the pocket stuffing is still going on in both directions.  Unfortunately, as is always true in a democracy or a dictatorship, only really mad regular people will throw out the trash when they finally get fed up enough - at this point, both the Dem and the Repub party machines are part of the problem, though the Mitt-bot clearly your corruptoid of choice if you want to put the whole ripoff operation back into gear on the highest industrial scale possible.   For now, it's really just bidness as usual.

"its enormous expense, its dependence on government financing, its long construction timeline, and its perceived and actual risk"
china has cut the expense by over 50% with their modular reactors and has cut the timeline significantly as well. their model is headed west as western nuclear giants like areva are copying them. governments dont have any money and don't finance anything; if anything, solar/wind are more dependent upon subsidies because of their insufficient output. 

decentralization and modularization will help deal with complexity challenges. 

 

There aren't any, and that's the point.  You keep saying free markets are a problem, but there are no truly free markets where there is not coercive force via government.  The primary reason is that our money is not free.  When your medium of exchange is corrupted, every interaction that uses that currency is also suspect.

The closest you can come is to look at areas in the economy that have less regulation and allow free choice by individuals.  Restaurants, hardware stores, electronics,…   If you as a consumer can choose who you want to do business with, then you are much closer to a free market.

In this case, utilities are "regulated monopolies".  What that means is the state grants a monopoly to a private organization in exchange for allowing politicians and bureaucrats to make the decisions.  You as a consumer do not get to use your money to vote for change - so you get none.

You are missing the point.  In a true free market, you make a mistake, you go broke, loose money, loose customers, face consequences.  There is regulation is a free market, much more powerful regulation that we have today.  You can actually loose.  In the corrupt world we find ourselves, if you are powerful and connected, you get guarantees and bailouts by government who confiscates wealth via force from it's citizens in order to provide that benefit.

When you as a consumer have choices, can vote with your wallet, you have power.  That is what free markets bring to the table.  Free markets do not mean "no law".  You seem to equate free markets with lawlessness and that's not the case.  If you believe in strong property rights, then you as the individual have the right to hold companies or individuals that abuse your property accountable via courts and the legal system.  However, many of the regulations so many people claim we have to have do the exact opposite.  Many of the trade offs for regulation include limiting a companies responsibility.  Just look at the BP oil disaster, regulations limited BP liability to $75 million.

This completely ignores the fact that our monetary system is not a free market, and this is an example of the complete opposite.  When you can borrow via thin air money printing at "regulated" artificially low interest rates, guess what - bad things happen.  If we had a sound monetary system in which we have choice to choose money, and the ability to choose money that is much harder to manipulate, then this type of malfeasance isn't possible on this scale, because you have to get others to give you the capital to do so.  The mortgage market also suffered from huge amount of regulation that required lenders to lend to those that could never payback the loans, then the government via Fannie, Freddie, FHA transfer all risk from the lenders and those making money from the practice to the taxpayers.  NOT A FREE MARKET!

Yet here you are complaining about the Libertarians who offer a different choice.

At least if your going to complain about these things, get it right.  Free market principals have little to do with the situation we find ourselves - many of the problems can be easily traced back to government intervention in the markets to favor large corporate entities that benefit from that intervention.

Claiming to be Libertarian is completely different from being one.  I can claim to be a Rock Star but it certainly doesn't make me one.   Greenspan was probably the largest contributor to the mortgage mess because of his role at the Fed.   Use of fiat money forced on consumers via government regulation is as opposite as you can get from Libertarian and free market ideals.   Why would he ever investigate mortgage fraud when he was the root cause?  The mortgage mess was entirely predicatable.  Give people free money and remove risk, what do you think happens? 

You want public accountability - let the public make the choice in money and markets, then you will get true accountability.  Government can't create accountability any more than it can regulate morality.

 

We may agree on more than I might have believed when it comes down to it.  We probably disagree on at least one very key point - how much people-powered law and government there actually needs to be there to maintain a fair playing field for markets.  It's a nice notion to believe that the mighty interests can fall just like the weak ones in a truly free market - that failure is the only needed regulation, and a powerful one.  If that's the choice that libertarians offer, it doesn't seem consistent with history.  You make governments the problem when actually, it's human tendencies that are the problem, whether in governement or business.  The reason your ideal and simple free markets never exist in fact and won't, is because money and power >always< ultimately corrupts and controls the field unless its countered strongly - regardless of money system, IMO.  At the point that the banks should have been let fail in 2008, their operatives "supervising" the market said it was essential that they not fail and that all the criminals remain in place for the benefit of the public.   That's what's happened in Europe, too,- where the Irish banks astoundingly got the Irish public to take over their debt - amazing - and will always be true.  Unfortunately, there's no simple answer or formula, in my opinion, only messy ones that require on-going activism and use of discrimination and intelligence.  I wish it were different, but the powerful will always shove their market failures, environmental trash and thefts onto the weak unless there's powerfully organized opposition - and that means public government of some sort which the powerful interests will always try to own, not an underfunded, industry-owned SEC, etc.  That's the repeated lesson history, for anyone who cares to read it.  That's why we're in such trouble - no set it and forget it solution is possible.  It would be nice if one were.

Totally agree it's human tendency.  When you give someone the power over others or allow them to manipulate currencies, etc, it will happen.  The best you can do is try to limit that power and that ability.  The problem with government is that it allows one stakeholder to use force via government proxy to gain advantage over another.  The only way I can see to limit that behavior is to minimize government as much as possible to protecting individual property rights and have a sound currency and currency choice to protect from currency malfeasance.

The problem we have today is that we teach people that government is the answer, that just a bit more power over our lives given to government will make things better when I believe it will always lead to corruption. There is a belief that some "benevolent" leader or "smart" person will appear and save us.  It's the exact opposite of the lessons from the Crash Course:  self resiliency.

Agreed, but the problem started much much earlier.  As soon as we decided to let bankers and politicians control the money system, the game was lost.  If we didn't have the constant intervention over the years, the system would have collapse long ago and we would have a much smaller mess to deal with.  We have had lots of chances for that to occur: 1929, 1973, 2000, 2008 - but in each case we have been told we must "save" the system and the problem has become worse.  Now we have half the population relying on a giant government for their well being and that government can only survive if the money system is protected - not going to be a good outcome.

Agreed, but that's why you have a system of government who's primary (only job) is the protection of individual property rights.   In that form of government, the basis of our constitutional republic,  is a small minimal government that generally protects the rights of citizens, not abuses them. 

 

Many States are going to be asking a whole lot of question in the coming months and years because the assumptions and system which have been used in the past to keep them afloat, are quickly breaking down. The questions will shift from how do we keep things running, to how do we want to live in a contracting economic environment?
What we desperately lack are realisic and positive visions of what that kind of world could look, feel, and be like. Finally, a realistic, sustainable, and inspiring story has been written that can help many in the mainstream see what is truly possioble. The book is called "From Here to There: A Story of America's Future" and it will leave you both inspired and energize to continue the critical work of this Great Transition.

Well, as I probably said when we talked awhile back, rhare, I actually overlap a chunk with many libertarian views about individual freedoms, and I love to watch Ron Paul take on Wild Ben Bernanke and demonstrate how bought-in the rest of Congress is to leveraged banker ownership of US monetary policy, but I just part ways on a bunch of specific points.
Accepting your statement that a lot of what claims to be libertarian isn't, a huge amount of bad stuff has been done and is still being done under the supposed banner of a libertarian, free market philosophy, including political clowns operating under that banner like Greenspan, and affiliates in the Repub party and elsewhere who appeal for "libertarian" votes. It has been used as a license to open up vast financial assets for rip off and public resources to be trashed without consequence.

I don't agree at all with the idea that we'll have a full fair free market if we only enforce protection of private property.   We already had this discussion, but IMO, again it would be nice if it were that simple, but it's going to always be more complicated than that.   If you live in a town with 5 families, and two generations ago, one family used the laws the town council they controlled, or developed monopoly power (which Adam Smith says is a no-no) to expropriate the property of the other 4 families, or just outright took it at gunpoint, shall we now just say - "okay, now we'll defend private property" and enforce that one family owns everything and will let the other four families work for kitchen scraps as long as they call everyone in the big shot family "sir" or "madam"?  Do you think the rich family might own the only "court" in the jurisdiction?  Or what if you've got one rich family and a bunch of poor families and the rich family "legally" buys up all the water supply within 200 miles, uses the clean water and sells the dirty water causing brain damage at outrageous prices to the poor families renting the gully behind their big house - doesn't care if they live or die, stay or move away.   I'm sure Mubarak's operation was focused on property rights, but that's just one set of rights that need to be respected.

As they found during the Great Depression and in other circumstances in which capitalism and property rights were held high by those with substantial capital and property going in.  Those people forget about or excuse their own greed, favors called in, politicians bought, taken to lunch, etc. and think it's a great system until times get tough and push comes to shove.  Then, they better find a way that >really< tries make things fair - not just imagine that protecting the property of those that "have" from those that don't is a viable plan at that point.  Cause as has happened throughout history, people get fed up and just form up a mob and take the property for themselves - in with the new boss, out with the old boss.  Capitalism wouldn't work without the government programs that cushion the fact that it actually is self-consolidating and doesn't work super well for the masses once the debt the rich loaned them to buy stuff to build bigger empires for the rich collapses - capital concentrates to the point of revolution if those sops aren't given.   The best systems, as far as I can see, are a blend that combine government and capitalism - like the Nordic countries - Sweden, etc - that have a high happiness quotient.   Pure capitalism or pure planned economies don't seem to work, since both succumb quickly to corruption based on unreal idealism and expectations for each system.  The blend is more realistic, since it has two potentially antagonistic forces - gov't and business that, if balanced, can help keep the other honest.  Of course, any human setup is always subject to corruption if not actively cleaned up, and you can get the worst of both worlds if it goes awry, as you can make the case for in the US these days.

Could not have said it better myself…  but, as much as I love them, you don't need to build an Earthship to achieve the same results, AND you can "build to code" to boot.  Our house[hold] consumes less than 10% of the average house, and generates more than three times what we need, turning us into a power station…  we are not only energy self sufficient, we make money from it and are blackout proof to boot!
http://damnthematrix.wordpress.com/2011/09/04/the-power-of-energy-efficiency/
http://damnthematrix.wordpress.com/2010/10/04/powering-up-for-the-collapse/
http://damnthematrix.wordpress.com/?s=passive+mon+abri
Mike