We left Ireland yesterday. The airport was packed. Where are they all going, we wondered. Old, young…fat, slim…we didn’t think COVID had left so many alive.
Airline traffic is returning to normal. Unfortunately, the airline industry is not ready to handle it. Lines were long, with makeshift barriers set up to guide the sheep.
This too is a consequence of COVID lockdowns. An economy is not a machine. You can’t turn it off and then flick a switch to turn it on again. Pilots retire. New ones have to be hired and trained. And air traffic controllers, too. Ticket agents. Stewards. And baggage handlers. How could they be trained when the planes weren’t flying? Now airlines are short-handed…and passengers wait.
Airlines also rely on long supply chains — fuel, caterers, cleaners, parts. How many went broke when the travel industry closed?
The same is true for many other industries. They are living things. You can’t cut off their oxygen for months without causing some brain damage. And now, they have to learn how to walk again…and how to speak.
Unseen trillions
The full costs of the COVID panic have not been tallied. Never will be. All most of us felt was inconvenience. Our favourite restaurants were closed. And we had to wear masks. In our case, we got ‘locked down’ in Argentina, where we spent some of the happiest months of our lives.
But when the final accounting is done the tab will be massive — trillions of dollars’ worth of lost output…millions of poor people who die prematurely because food and energy prices rose…and record levels of suicide, drug addiction, depression, and violence as young people emerge like rats from a flooded basement.
Of course, a similar story could be told about almost all government programs. The benefits are few — and always directed towards a few privileged groups. The costs are spread out…nearly invisible, unpredictable, and incalculable.
In these pages, we’ve been wondering about the collateral damage coming from the most aggressive crusade in history — the attempt to control the world’s weather by reducing carbon emissions. At this stage of human progress fossil fuel use and standards of living are nearly co-terminus. When one goes up, the other goes up too. Over 150 years, as nations used more oil, gas, and coal…they got richer. Still, today, rich people use a lot more energy than poor people. Most energy comes from stored up sunshine, in the form of gas, oil, or coal. And when you reduce your use of it, standards of living go down too.
Could we use less fossil fuel and still live well? Maybe. Were prices for fossil fuel to rise…and those for ‘renewables’ to decline…people would adjust. But can a whole world economy — supporting eight billion people — shift to alternative sources of power — on command? We saw what happened in the COVID lockdowns when key industries were taken off-line temporarily. What happens when you shut them down permanently?
Oxygen deprivation
In that regard, the climate controllers are getting some good news: thanks to their policies — lockdowns, sanctions, war, tariffs, money-printing, inflation, and central banks’ attempts to control it — the world’s industrial economies are showing signs of oxygen deprivation.
Even in Switzerland. Bloomberg: ‘Swiss Inflation Hits 29-Year High on Ukraine War, Supply Chains’:
‘Inflation in Switzerland accelerated to the fastest pace in nearly three decades, hitting 3.4% in June.
‘The pace is up from 2.9% in May, and well above the Swiss National Bank’s 2% target. Based on the European Union-harmonized measure, it was at 3.2%, compared with 8.6% in the surrounding euro area.’
All over the world, prices are on the rise. CNBC:
‘Inflation in Turkey rose close to 79% last month, the highest the country has seen in a quarter of a century.’
Friends in Argentina report that the inflation rate there is now more than 70%…and the peso lost nearly a third of its value — in dollar terms — over the weekend.
And it’s no coincidence that, as governments are becoming more activist, the economies they attempt to ‘manage’ are becoming less efficient, less productive…giving individuals less of what they want when they want it. That goes for the basics, too…like food. Al Jazeera reports:
‘Farmers in the Netherlands have blockaded supermarket distribution centres in continuing protests against new environmental rules on nitrogen emissions that are likely to put many of them out of business.
‘Fishers on Monday blocked ports in a show of support for farmers. The blockade prevented ferries from sailing to almost all the Wadden Islands off the country’s northern coast and caused lengthy delays, shipping companies reported.
‘The action had been announced in advance, with farmers calling for “the entire country to be paralysed”.’
Germany is facing paralysis too. Bloomberg:
‘Top German industries could face collapse because of cuts in the supplies of Russian natural gas, the country’s top union official warned before crisis talks with Chancellor Olaf Scholz starting Monday.
‘“Because of the gas bottlenecks, entire industries are in danger of permanently collapsing: aluminum, glass, the chemical industry,” said Yasmin Fahimi, the head of the German Federation of Trade Unions (DGB), in an interview with the newspaper Bild am Sonntag. “Such a collapse would have massive consequences for the entire economy and jobs in Germany.”’
But at least, under pressure, the US’s leader is still his charming simpleton self:
‘“Companies running gas stations,” tweeted POTUS, should “bring down the price you are charging at the pump.”’
The US Oil & Gas Association responded:
‘Please make sure the WH intern who posted this tweet registers for Econ 101 for the fall semester.’
Put up…or shut up!
And so…the world’s energy engine slows down. The steel furnaces are cooling…autos remain at home. Trucks are idle. Hallelujah…the planet will suffer less damage from C02.
Yes, people will suffer. But maybe ‘we’ should accept a lower standard of living in exchange for freeing us from dependency on fossil fuel. Like the COVID lockdowns, the program will probably be little more than an expensive inconvenience to most of us — healthy people in rich, healthy countries. As for poor people in poor countries, Madeleine Albright may have had the right idea. Asked about the estimated 500,000 children who died because of US sanctions on Iraq, she said it was ‘worth it’.
And maybe, just this once, the feds will lead us, marching over the bodies of millions of starving people, to a promised land — greener, poorer…but more ‘sustainable’, whatever that means.
Wait, you say ‘C02 doesn’t hurt the planet’? You say, ‘plants love it, and crop yields are improved by it’? You say, ‘CO2 levels were once much higher…long before the Industrial Revolution’? You say, ‘trying to control C02 output may do more harm than good’?
Well, you can just shut up! That’s misinformation!
Regards,
 |
Bill Bonner,
For The Daily Reckoning Australia
