Many Working Twice as Long to Fill Gas Tanks -- and Worse Yet May be on the Horizon

Many Now Working Twice as Many Hours to Fill Fuel Tanks -- And There May be Worse Yet on the Horizon...

Compared to 1970, a new article from Sightline Daily finds that low-income U.S. earners are working for 7.5 hours a week to fill their cars with gas compared to 3.3 hours per week.

Median-income earners work 2.5 hours per week, up from 1.4 hours per week in 1970, while the average CEO works just 33 seconds per week, down dramatically from the 3.2 minutes her or she would have had to work in 1970.

One run chart included with the article makes it clear that, as a percentage of income,  middle-class Americans paid more for gasoline in 2008 than they did in the darkest days of the energy crisis.

"Despite skyrocketing prices for fuel and other basic commodities, the very rich are increasingly insulated from the real economy", says the article. "The working poor, in particular, are getting absolutely crushed...[and] for median income-earners -- the middle class, by definition -- things have been getting pretty gloomy".

"Middle class Gen-Xers are watching the lifestyle they grew up with -- the average Baby Boomer purchasing power -- recede over the horizon."  

The Sightlines article is clear that immediate aid to the working poor is necessary to keep even basic transportation within the reach of all Americans, but is less than sanguine that the stimulus package currently working its way through congress will have much, if any, effect.

More important the article says, is a concerted push for relieving America's addiction to oil, which is not totally dissimilar to what newly fledged President Obama is planning.

The Sightline Daily article urges conservation rather than a push toward domestic sourcing. That is, before you seek a new source of supply, take the necessary steps to reduce consumption as much as you can.

President Obama, on the other hand, has said he's committed to "energy sovereignty", which could mean conservation, but could also mean "drill, baby, drill!"

Nevertheless, in his opening moves in the war against oil dependency, Mr Obama is demonstrating a relatively balanced approach, taking steps to allow numerous states to allow tight new standards on emissions, and setting a timeline for improved fuel efficiency.

In the meantime, though, it's beginning to appear that things are more dire than the general public has been led to believe thus far. First of all, if the more pessimistic predictions of the peak oil theorists come to fruition, it's possible that Mr Obama's target of 35 miles per gallon by 2020 will be far too little, and far too late.

Worse yet is the nagging feeling that, even if the hammer-blow of peak oil strikes as hard as the original acolytes of the theory suggest, another shoe or two may still be waiting to drop.

Right on us.

Unless mitigated, beginning now, these additional major economic pressures promise to make peak oil's impact on our lifestyles seem truly trivial. The first of these -- call it "peak water" -- is not exactly new. In fact, the U.S. Southwest is already battling the first harbingers of the crisis.

But there may be a new doom swooping down: one of mankind's oldest scourges, but one against which the United States has been thoroughly insulated against until now. In less buzzword-conscious times, the term famine has been employed, but for the sake of a certain symmetry, we propose the phrase "peak food".\

It turns out this risk is not out of the question, and soon. According to a report just  released by the U.K. think tank Chatham House, skyrocketing food prices, water shortages and climate change may soon combine to cause unprecedented global food shortages that will threaten even the wealthiest nations.

So serious is the situation according to Chatham House that among its 10 recommendations the report suggests the creation of "strategic food reserves" to be used in emergency, and the development of which it urges begin immediately, since "part of the reason for the recent food price spike is that worldwide food stocks had fallen to unsustainably low levels." 

It is beginning to appear that we are facing down the barrel of not one, but three guns.

It is beginning to appear that even the trillions in funding the U.S. is willing to deploy may have finally met a problem more intransigent than the abiliity of mere mountains of cash to resolve.

It is beginning to appear that even Mr Obama may not be enough. 

Study says declining male fertility linked to water pollution

Is this the root cause behind British metrosexuality?

New research strengthens the link between water pollution and rising male fertility problems. The study, by Brunel University, the Universities of Exeter and Reading and the Centre for Ecology & Hydrology, shows for the first time how a group of testosterone-blocking chemicals is finding its way into UK rivers, affecting wildlife and potentially humans. The research was supported by the Environment Agency and Natural Environment Research Council and is now published in the journal Environmental Health Perspectives.

Media-Newswire.com) - New research strengthens the link between water pollution and rising male fertility problems. The study, by Brunel University, the Universities of Exeter and Reading and the Centre for Ecology & Hydrology, shows for the first time how a group of testosterone-blocking chemicals is finding its way into UK rivers, affecting wildlife and potentially humans. The research was supported by the Environment Agency and Natural Environment Research Council and is now published in the journal Environmental Health Perspectives.

The study identified a new group of chemicals that act as 'anti-androgens'. This means that they inhibit the function of the male hormone, testosterone, reducing male fertility. Some of these are contained in medicines, including cancer treatments, pharmaceutical treatments, and pesticides used in agriculture. The research suggests that when they get into the water system, these chemicals may play a pivotal role in causing feminising effects in male fish. 

Earlier research by Brunel University and the University of Exeter has shown how female sex hormones ( estrogens ), and chemicals that mimic estrogens, are leading to 'feminisation' of male fish. Found in some industrial chemicals and the contraceptive pill, they enter rivers via sewage treatment works. This causes reproductive problems by reducing fish breeding capability and in some cases can lead to male fish changing sex. 

Other studies have also suggested that there may be a link between this phenomenon and the increase in human male fertility problems caused by testicular dysgenesis syndrome. Until now, this link lacked credence because the list of suspects causing effects in fish was limited to estrogenic chemicals whilst testicular dysgenesis is known to be caused by exposure to a range of anti-androgens.

Lead author on the research paper, Dr Susan Jobling at Brunel University's Institute for the Environment, said: "We have been working intensively in this field for over ten years. The new research findings illustrate the complexities in unravelling chemical causation of adverse health effects in wildlife populations and re-open the possibility of a human – wildlife connection in which effects seen in wild fish and in humans are caused by similar combinations of chemicals. We have identified a new group of chemicals in our study on fish, but do not know where they are coming from. A principal aim of our work is now to identify the source of these pollutants and work with regulators and relevant industry to test the effects of a mixture of these chemicals and the already known environmental estrogens and help protect environmental health."

Senior author Professor Charles Tyler of the University of Exeter said: "Our research shows that a much wider range of chemicals than we previously thought is leading to hormone disruption in fish. This means that the pollutants causing these problems are likely to be coming from a wide variety of sources. Our findings also strengthen the argument for the cocktail of chemicals in our water leading to hormone disruption in fish, and contributing to the rise in male reproductive problems. There are likely to be many reasons behind the rise in male fertility problems in humans, but these findings could reveal one, previously unknown, factor."

Bob Burn, Principal Statistician in the Statistical Services Centre at the University of Reading, said: "State-of- the- art statistical hierarchical modelling has allowed us to explore the complex associations between the exposure and potential effects seen in over 1000 fish sampled from 30 rivers in various parts of England." 

The research took more than three years to complete and was conducted by the University of Exeter, Brunel University, University of Reading and the Centre for Ecology & Hydrology. Statistical modelling was supported by Beyond the Basics Ltd and the Environment Agency.

The research team is now focusing on identifying the source of anti-androgenic chemicals, as well as continuing to study their impact on reproductive health in wildlife and humans.

Economy in shock: It's failure overload

Tom Petruno, Market Beat, LA Times, January 24, 2009

Any capitalist nation must be willing to embrace some level of economic Darwinism: the notion that the fittest survive while the less robust fall away.

But what America is living through now is a drastic and high-speed wave of Darwinism that reaches every corner of the economy and financial system.

We're on failure overload -- which is why this all feels so frightening and why markets remain in disarray.

Case in point: It's a good thing, ultimately, for sickly banks to be closed and for stronger banks to take their place.

When too many major banks are at risk of failure at the same time, however, the entire financial system is threatened. The fittest might survive systemic failure, but to what end?

Likewise, an economy this size can handle some significant number of companies paring, say, 5% or 10% of their workers in the name of efficiency. But it can't easily contend with plummeting employment across the private and public sectors.

Of course, for companies teetering on the verge of bankruptcy because sales have collapsed, there may be no alternative but to slash expenses by cutting staff.

Microsoft Corp., however, appears in no danger of failure. The company earned $4.17 billion in its latest quarter, a 25% net profit margin on sales of $16.6 billion. Yet even Microsoft is taking the knife to its payroll, with plans to eliminate up to 5,000 jobs, or 5% of its workforce, over 18 months -- the firm's first-ever layoffs.

Had they been let go a couple of years ago, those people might have easily found work elsewhere. Now, amid a deepening recession, they'll join millions of others who face the brutal reality that jobs are extraordinarily scarce.

In California the jobless rate reached 9.3% in December, a 15-year high. And given the dire condition of the Golden State's economy, it's a pipe dream to think that the unemployment rate has peaked.

Technology workers, perhaps more than others, understand the concept of "creative destruction." The term was popularized by the Austrian economist Joseph Schumpeter to describe the forces perpetually at work in a healthy capitalist economy.

The idea is that an economy should be forever renewing itself thanks to innovation, albeit with considerable pain along the way. In other words, new technologies are wondrous -- unless you're stuck selling technologies made obsolete by a smarter competitor.

Here's a thought: One reason we're facing such a large Darwinian wave in the economy may be that the easy money of the last two decades delayed creative destruction that otherwise would have occurred.

As long as credit was more than ample, many businesses and technologies could hang on despite being under heavy attack from more innovative rivals.

Amid the financial-system crisis, credit has evaporated. That's a death knell for weak businesses, large and small, that were over-leveraged and are struggling with plummeting sales as consumer and corporate spending shrinks.

The relative lack of credit, however, also obstructs the "creative" part of the creative-destruction continuum: Many firms that should be survivors of this debacle can't get the basic funding they need to carry on and position themselves for an economic upturn, wherever it is on the horizon.

That's why the Federal Reserve, and the Obama administration, are focusing so intently on trying to reopen the credit spigot.

What they're up against is that lenders remain saddled with so much bad debt from the boom years that many of them are paralyzed with fear. Every borrower is suspect; it's easier for a banker to sit on cash than to lend it and risk more losses. What would you do in their shoes?

Goldman Sachs & Co. economists estimated this month that a total of $2.1 trillion in U.S. debt will have to be written off to purge the system of bad credit.

That includes mortgages, other consumer loans, as well as commercial real estate and corporate loans.

Yet banks and investors have recognized just $1 trillion of loan losses so far, Goldman calculated.

So the Obama administration is considering reviving the original idea of the $700-billion bank bailout Congress approved last fall: Have the government take bad loans off banks' books, freeing them of that dead weight.

But one way or another, the losses from the debt binge will have to be recognized.

That's lost income or principal to someone -- bank shareholders, bond holders, or the taxpayer.

That is more failure that the economy must digest, when it's already choking on the first huge lot of it in this recession.

The only solution for this mess is the one most people don't want to hear: time.

It took 25 years to inflate the U.S. consumer debt bubble. It will take longer than two years to deflate that bubble to a size that no longer threatens the national well-being.

And in the meantime, federal borrowing to support the economy will balloon.

The stock market, off to a lousy start this year after last year's horrendous losses, may simply be recognizing that there is no quick fix.

The market also may be acknowledging that, although there will surely be survivors of this Darwinian shakeout, identifying them remains a high-risk game.

The U.S. and UK Are on the Brink of Debt Disaster

By Ed Kemp, Reuters. Posted January 24, 2009.

The United States and the United Kingdom stand on the brink of the largest debt crisis in history.

While both governments experiment with quantitative easing, bad banks to absorb non-performing loans, and state guarantees to restart bank lending, the only real way out is some combination of widespread corporate default, debt write-downs and inflation to reduce the burden of debt to more manageable levels. Everything else is window-dressing.

To understand the scale of the problem, and why it leaves so few options for policymakers, take a look at Chart 1, which shows the growth in the real economy (measured by nominal GDP) and the financial sector (measured by total credit market instruments outstanding) since 1952.

In 1952, the United States was emerging from the Second World War and the conflict in Korea with a strong economy, and fairly low debt, split between a relatively large government debt (amounting to 68 percent of GDP) and a relatively small private sector one (just 60 percent of GDP).

Over the next 23 years, the volume of debt increased, but the rise was broadly in line with growth in the rest of the economy, so the overall ratio of total debts to GDP changed little, from 128 percent in 1952 to 155 percent in 1975.

The only real change was in the composition. Private debts increased (7.8 times) more rapidly than public ones (1.5 times). As a result, there was a marked shift in the debt stock from public debt (just 37 percent of GDP in 1975) towards private sector obligations (117 percent). But this was not unusual. It should be seen as a return to more normal patterns of debt issuance after the wartime period in which the government commandeered resources for the war effort and rationed borrowing by the private sector.

From the 1970s onward, however, the economy has undergone two profound structural shifts. First, the economy as a whole has become much more indebted. Output rose eight times between 1975 and 2007. But the total volume of debt rose a staggering 20 times, more than twice as fast. The total debt-to-GDP ratio surged from 155 percent to 355 percent.

Second, almost all this extra debt has come from the private sector. Take a look at Chart 2. Despite acres of newsprint devoted to the federal budget deficit over the last thirty years, public debt at all levels has risen only 11.5 times since 1975. This is slightly faster than the eight-fold increase in nominal GDP over the same period, but government debt has still only risen from 37 percent of GDP to 52 percent.

Instead, the real debt explosion has come from the private sector. Private debt outstanding has risen an enormous 22 times, three times faster than the economy as a whole, and fast enough to take the ratio of private debt to GDP from 117 percent to 303 percent in a little over thirty years.

For the most part, policymakers have been comfortable with rising private debt levels. Officials have cited a wide range of reasons why the economy can safely operate with much higher levels of debt than before, including improvements in macroeconomic management that have muted the business cycle and led to lower inflation and interest rates. But there is a suspicion that tolerance for private rather than public sector debt simply reflected an ideological preference.

The Debt Mountain

The data in Table 1 [download here] makes clear the rise in private sector debt had become unsustainable. In the 1960s and 1970s, total debt was rising at roughly the same rate as nominal GDP. By 2000-2007, total debt was rising almost twice as fast as output, with the rapid issuance all coming from the private sector, as well as state and local governments.

This created a dangerous interdependence between GDP growth (which could only be sustained by massive borrowing and rapid increases in the volume of debt) and the debt stock (which could only be serviced if the economy continued its swift and uninterrupted expansion).

The resulting debt was only sustainable so long as economic conditions remained extremely favorable. The sheer volume of private-sector obligations the economy was carrying implied an increasing vulnerability to any shock that changed the terms on which financing was available, or altered the underlying GDP cash flows.

The proximate trigger of the debt crisis was the deterioration in lending standards and rise in default rates on subprime mortgage loans. But the widening divergence revealed in the charts suggests a crisis had become inevitable sooner or later. If not subprime lending, there would have been some other trigger.

Wrongheaded Policies

The charts strongly suggest the necessary condition for resolving the debt crisis is a reduction in the outstanding volume of debt, an increase in nominal GDP, or some combination of the two, to reduce the debt-to-GDP ratio to a more sustainable level.

From this perspective, it is clear many of the existing policies being pursued in the United States and the United Kingdom will not resolve the crisis because they do not lower the debt ratio.

In particular, having governments buy distressed assets from the banks, or provide loan guarantees, is not an effective solution. It does not reduce the volume of debt, or force recognition of losses. It merely re-denominates private sector obligations to be met by households and firms as public ones to be met by the taxpayer.

This type of debt swap would make sense if the problem was liquidity rather than solvency. But in current circumstances, taxpayers are being asked to shoulder some or all of the cost of defaults, rather than provide a temporarily liquidity bridge.

In some ways, government is better placed to absorb losses than individual banks and investors, because it can spread them across a larger base of taxpayers. But in the current crisis, the volume of debts that potentially need to be refinanced is so large it will stretch even the tax and debt-raising resources of the state, and risks crowding out other spending.

Trying to cut debt by reducing consumption and investment, lowering wages, boosting saving and paying down debt out of current income is unlikely to be effective either. The resulting retrenchment would lead to sharp falls in both real output and the price level, depressing nominal GDP. Government retrenchment simply intensified the depression during the early 1930s. Private sector retrenchment and wage cuts will do the same in the 2000s.

Bankruptcy or Inflation

The solution must be some combination of policies to reduce the level of debt or raise nominal GDP. The simplest way to reduce debt is through bankruptcy, in which some or all of debts are deemed unrecoverable and are simply extinguished, ceasing to exist.

Bankruptcy would ensure the cost of resolving the debt crisis falls where it belongs. Investor portfolios and pension funds would take a severe but one-time hit. Healthy businesses would survive, minus the encumbrance of debt.

But widespread bankruptcies are probably socially and politically unacceptable. The alternative is some mechanism for refinancing debt on terms which are more favorable to borrowers (replacing short term debt at higher rates with longer-dated paper at lower ones).

The final option is to raise nominal GDP so it becomes easier to finance debt payments from augmented cashflow. But counter-cyclical policies to sustain GDP will not be enough. Governments in both the United States and the United Kingdom need to raise nominal GDP and debt-service capacity, not simply sustain it.

There is not much government can do to accelerate the real rate of growth. The remaining option is to tolerate, even encourage, a faster rate of inflation to improve debt-service capacity. Even more than debt nationalization, inflation is the ultimate way to spread the costs of debt workout across the widest possible section of the population.

The need to work down real debt and boost cash flow provides the motive, while the massive liquidity injections into the financial system provide the means. The stage is set for a long period of slow growth as debts are worked down and a rise in inflation in the medium term.

This material available in accordance with Title 17 U.S.C. Section 107: This article is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

China fears riots will spread as boom goes sour

As the Chinese New Year dawns and the global economic crisis deepens, the government fears that mass unrest could challenge its control of the country, threatening a communist regime that has embraced capitalism with spectacular results.

Today should be the highlight of the year for migrant workers in the country's southern manufacturing hub, but the hundreds of millions who have travelled home for their annual family reunion have little to celebrate. This is the year of the ox in the Chinese zodiac; a symbol of hard work and tenacity. But no one feels bullish as exports plummet and factories shut their doors.

Officials announced this week that growth fell to 6.8% in the last quarter of 2008. Enviable as that sounds to countries in recession, it follows five years of double-digit growth and rising expectations. Just as crucially, experts believe that China needs 8% growth to provide enough jobs for new entrants to the labour force. But economists predict that the rate could fall as low as 5% this year.

It is figures like these that prompted the state-run magazine Outlook to issue a remarkably stark warning of the dangers posed by rising unemployment.

"Without doubt, now we're entering a peak period for mass incidents ... In 2009, Chinese society may face even more conflicts and clashes that will test even more the governing abilities of the party and government at all levels," said a senior Xinhua agency reporter, Huang Huo.

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