Posts Tagged ‘Economy’


February 4, 2010

Let’s start at the beginning. Caveman days. No wealth. A guy had to work 14 hour days to gather food and build shelter and he had nothing to show for it. When he couldn’t work 14 hours a day, he died.

Then came tools. These were the first wealth builders. They allowed man to do the same thing in less time. He was still poor, but he was wealthier. He didn’t have to work 14 hours so his wealth took the form of leisure time.

Jump to the dark ages when Monarchs had castles and leisure time while the people toiled in poverty.

Jump to the industrial revolution.  People harnessed energy and transformed it into wealth. People who knitted by hand got fired, but wealth was created.  This progressed to the 1970’s where everyone had a TV and leisure time to use it. Everyone in this nation shares in the wealth whether they produce or not.

Then we had the 80’s and wealth began to stagnate. The GDP was on a plateau. The savior? The 90s started to realize the potential of Computers. A computer could do the job of 5 people. Architects and engineers replaced 6 draftsmen with one draftsman and a CAD station. Accountants replaced 3 bookkeepers with a computer and turbotax. Clinton claimed credit for the increased efficiencies and Gore claimed credit for inventing the internet.

Now we are at a crossroads and we are being told that the new energy economy will save us the way computers or other technical advances did. I have one question though. What are the increased efficiencies? Is it easier to build a windmill or burn a lump of coal? The answer is simple. It is easier and more efficient to burn the coal. That is proved by the cost. It is cheaper to burn coal therefore it is more efficient.

It might be cleaner to build the windmill. The CO2 produced constructing the windmill is astounding and reflected in the cost. Even so, new energy is currently less efficient. In the future it will be more difficult to extract coal and oil and it will become more efficient to use new energy, but even then it will be less efficient than what we have now. therefore do not expect a boost to the economy.

So don’t look to the new energy economy to get us out of the recession. In fact it is just the opposite. The new energy economy is doublespeak for “Forced inefficiencies by the government” These inefficiencies can only hurt the economy.

If there were economic benefits from the “New Energy Economy,” the current government would be wise to do nothing but sit back and take the credit for it.