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The elephant (oilfield) in the room

I can't find a major American news outlet that has published what is surely one of the biggest stories of 2008: the International Energy Agency's ominous about-face on the issue of peak oil. The report is admittedly heavy reading. George Monbiot in UK's Guardian cuts through the technocratese and provides essential context. The bottom line, as Monbiot writes, "we're in deep doodah."

The IEA has long soft-pedaled peak oil, saying world supplies wouldn't peak until 2030 (as if that gave us a lot of time to prepare for the transition). For the first time, however, the agency did a more in-depth inventory of the world's oilfields. Now it says peak could come in 2020. I think we're already there. But either way, this is an issue that will dominate our lives more than terrorism, Iraq, Afghanistan, the financial meltdown or even global warming — and it is intertwined with all of those. There is no bigger national security issue. But Americans aren't talking about it.

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Why newspapers matter, still

Seattle's recent snowbound mess offered an object lesson in why newspapers remain essential to communities. With analysts expecting several major newspapers to shut down in 2009, including those in one-paper cities, it's worth noting what happened in the Emerald City.

A little background: On Dec. 18, it began snowing here, even at sea-level downtown. Snow is a rarity in this city of hills — even though enough falls to stick every three years or so. This was reportedly the worst snowfall in a dozen years. We got about six inches downtown, and it was far worse in other parts of Seattle. The city has 27 snowplows. The city was paralyzed.

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The Madoff scandal: More than a Ponzi scheme

Were the damage not so great, it would be amusing to see SEC Chairman Chris Cox running around shocked, shocked, that Bernard Madoff had allegedly pulled off the biggest financial fraud in history — and the watchdog was again caught napping. Or worse. The agency ignored years of warnings about Madoff's activities, and Barron's did an article questioning his returns a decade ago. Madoff reportedly bragged about his influence in D.C., including having an in-law who worked for the SEC.

As the victims of the alleged scheme, including many charities, see their investments wiped out, Madoff is out on bond, having to wear an ankle bracelet and stay home. Had he been a minority/poor kid who stole $100 from a cash register drawer, he'd be in county lockup with hardened criminals. Meanwhile, Attorney General Michael Mukasey has recused himself from the investigation, without giving a reason. This is America in the new gilded age, where government has been essentially handed over to the wealthy and connected — and we're surprised they went wilding?

An older America learned from the frauds and follies of the 1920s, including the legendary collapse of the Samuel Insull monopoly. Regulation of securities and banks was put in place, helping to ensure the success of American business for decades through transparency, competition and fairness. That all began to unravel with the Reagan Revolution — but especially in the 1990s with deregulation pushed by Sen. Phil Gramm (R-UBS) and Clinton Treasury Secretary Robert Rubin, a kingpin from Goldman Sachs.

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The real hole Seattle is digging with the viaduct

The Phoenixes, Tulsas and Fresnos of American can take heart. Sometimes even the most progressive cities make really dumb decisions. Seattle has been agonizing for years about what to do about the earthquake-damaged Alaskan Way Viaduct, which runs through downtown along the waterfront. The decision: replace it with another viaduct, or two surface streets.

Somehow the obvious answer, putting the roadway into a tunnel, which would have opened up the waterfront of Elliott Bay to downtown, never made the cut. Whatever the excuse, it's a potent reminder that America has lost the ability to do great and visionary projects. This didn't happen even in the worst years of the Great Depression. The problem is not lack of funding, but lack of will and hope, another symptom of decadence.

For Seattle, the lost opportunity will be as monumental as another viaduct is ugly. The renderings always show fanciful outdoor dining tables under the spaghetti concrete spans of traffic. But we know what will really be underneath the new monstrosity. At least the old viaduct had a certain 1950s Naked City gritty beauty. The surface street option is bad in its own special way, adding to congestion and placing a barrier of traffic between the city and its waterfront. A people who have lost the ability to dream big are not capable of designing wide Parisian boulevards.

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This is Wall Street

As Republican nihilists carry out their war on working Americans, it's important to understand just how rotten is the industry they rushed to deregulate and bail out. And yes, there…
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Rebalancing our national portfolio

The rich are finally afraid. You can see it in their eyes. They're laying off their nannies. The smart ones are fleeing into Treasury notes, even though the yield is zero. According to the New York Times,

While this will lower the cost of borrowing for the United States
government, economists worry that a widespread hunkering-down could
have broader implications that could slow an economic recovery. If
investors remain reluctant to put money into stocks and corporate
bonds, that could choke off funds that businesses need to keep
financing their day-to-day operations.

Perhaps. But it might, just might, jolt Americans back to reality. That means an economy based on producing things of real value. And a re-valuation of business, which in this country means a re-evaluation of our very lives. It won't be easy, perhaps not even likely, because the dead hand of the past rests oh-so-heavy on everything we do. If it happened, however, it might just save us.

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Worse than the Great Depression?

It's widely acknowledged by economists, and supported by mounting evidence, that we're in for the worst economic contraction since the Great Depression. This is not "negative news" the media are inventing, dear positive-thinkers. It is simply reality. Yet it won't be as bad as the Depression, right?

For months, I have been giving a qualified "no" to that question. First, because the safety nets of the New Deal and Great Society, although badly frayed by Republican misgovernance, are still in place. Second, Americans are more affluent — we don't have a third of the nation "ill clad, ill-fed and ill-housed" and millions lacking even electricity. My "no" was qualified because expert opinion got us into this mess and will continue to hold sway — watch as the proteges of Robert Rubin steer the Obama economic plan. Experts were flummoxed by the Great Depression and in many cases carried out policies that made it worse. Expertise is only useful when it grows, as when a man demanded to know why Keynes had changed his view on an issue. Keynes responded: "When the facts change, I change my mind. What do you do, sir?"

Now, however, I am starting to wonder about my reassurances. Friday's report that 533,000 jobs were lost in November alone, signaling that the pace of unemployment is accelerating fast, was a kick in the teeth. Could this recession turn into a depression to rival, or surpass, the 1930s?

It is possible.

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The chickens come home to roost at Gannett

A reader asks, "how come you have not weighed in on the Gannett bloodbath that is going on with the layoffs all across the board? The Republic, as a big fish, should be pretty hard hit…I know there is no love lost there, on your part, but it is your hometown and your hometown paper and you still are friends with some of the folks there. Anyway, just curious."

I don't know many specifics, but the outcome will be bad. According to Gannett Blog, it is part of the largest mass layoff in newspaper history. The paper has been quietly cutting staff for two years, and the losses have been heavily centered on the most experienced journalists. In other words, the institutional knowledge and highest journalistic skills have been slashed. It's as if Microsoft fired its leading sources of intellectual capital. The result is predictable: a further erosion of the newspaper industry, whose journalism is a practice so vital to the health of the nation that it is enshrined in the Constitution.

I worked for the nation's largest "newspaper" company twice. Once as business editor for the Cincinnati Enquirer and then as a columnist at the Arizona Republic. In general, I was treated fairly, although this was certainly not the case with many employees. I was allowed to commit real journalism, although in both cases after a few years this was made impossible, and so I moved on. I learned a few things, chiefly that Gannett is not really a newspaper company. Yet it will be remembered as the company that destroyed newspapers.

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The death on Black Friday

Everybody seems to have a take on the fatal door-busters sale at Wal-Mart on the first day of holiday shopping, giving a grim meaning to the retail jargon Black Friday (there was also the less-noticed Toys 'R' Us shootout). Here's mine:

Who lines up at 5 in the morning to mob a store, much less waiting all night for the honor, as apparently was the case at the suburban New York mall where the Wal-Mart employee was trampled to death? Apparently they are the same people who required police to be called for crowd control at 3 a.m. And the same people who stomped the victim and walked on, and are now being sought by police. According to the New York Times:

By 4:55, with no police officers in sight, the crowd of more than
2,000 had become a rabble, and could be held back no longer. Fists
banged and shoulders pressed on the sliding-glass double doors, which
bowed in with the weight of the assault. Six to 10 workers inside tried
to push back, but it was hopeless.

Indeed it was. "Jdimytai Damour, 34, was thrown back onto the black linoleum tiles and
trampled in the stampede that streamed over and around him." Mr. Damour was a temporary worker, failing to enjoy even the niggardly "benefits" and wages that Wally's real employees get. Wal-Mart has been criticized for security so poor that a mob could stampede and kill a 270-pound man. What kind of company allows this to happen?

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Death of a salesman nation

Whatever its complicated and ambivalent historical roots, the ideal of Thanksgiving is offering gratitude for the grace of our creator, if you swing that way, or at the very least to others who came together to create even a moment of common purpose and bounty. It's about looking outside ourselves.

The problem of American holidays being ever more commercialized is old. But over the past decade, maybe longer, something else has overtaken us. We've gone from a nation with hucksters to being a nation of hucksters. Suffice it to say that this was not the great commercial republic that Hamilton had in mind. In God We Trust? No. Always Be Selling.

I thought of this as I read a Washington Post piece on how banking regulators were not actually regulating the industry, but rather acting as an advocate for it. Yes, ideology and its handmaiden deregulation are to blame for the financial catastrophe. But so is the perverse mutation of American optimism just as the economy became driven more and more by financial swindles.

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Change? You can’t be serious

Let the excuses begin.

The New York Times leads off:

Just as the world seemed poised to combat global warming
more aggressively, the economic slump and plunging prices of coal and
oil are upending plans to wean businesses and consumers from fossil
fuel.

The Washington Post weighs in:

Many members of Congress believe they know what the car company of the future should look like. "A business model based on gas — a gas-guzzling past — is unacceptable," Sen. Charles E. Schumer (D-N.Y.)
said last week. "We need a business model based on cars of the future,
and we already know what that future is: the plug-in hybrid electric
car."

But the car company Schumer and other lawmakers envision
for the future could turn out to be a money-losing operation, not part
of a "sustainable U.S. auto industry" that President-elect Barack Obama and most members of Congress say they want to create.

That's
because car manufacturers still haven't figured out how to produce
hybrid and plug-in vehicles cheaply enough to make money on them.

Expect to hear more in the coming days and months. We will see a potentially debilitating alignment of old thinking and old, yet still politically powerful, economic interests. If it succeeds, the country will face much worse pain in the years ahead.

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President Hoover and Depression thinking

I feel the need to come to the defense of Herbert Hoover, if for no other reason than this fundamental misreading of history will only set us up for costly mistakes in the future. The left long has labeled George W. Bush "President Hoover" for presiding over a historic economic crisis. Now the meme has been picked up by the right, as well.

Yet to paraphrase Lloyd Bentsen, President Bush, you're no Herbert Hoover. Among the differences: Hoover (1874-1964) was a self-made man, who worked his way through the new Stanford University, made a fortune as a brilliant engineer, then gained international acclaim for coordinating relief for refugees in World War I. Although a Republican, Hoover came from the party's Theodore Roosevelt progressive wing. He was mistrusted by Calvin Coolidge, and for good reason. Hoover wanted to move away from the rapacious capitalism of the 1920s to an ethic that embraced the common good and the obligations of business to society. He was a product of his time of scientific and engineering wonders: The Great Engineer, who could bring pragmatic, fact-based solutions to governing.

Unfortunately, Hoover was elected in 1929, not 1912 — the era in which his worldview had been shaped. After the great crash and with the gathering depression, Hoover was overwhelmed. His administration launched the greatest expansion of government intervention in the economy up to that point, including programs and ideas that would live on in the New Deal. Yet it did little good as unemployment reached a staggering 25 percent and Americans were forced into shantytowns they called Hoovervilles.

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Weekend myth busters

Heard the one about the $70-an-hour autoworker bringing down the Big Three? Read the truth in Jonathan Cohn's New Republic article. Another Big Lie from talk radio -- and I've…
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