Wednesday, August 3, 2016

Things break down - Part 2

As I mentioned in my last post, I came across a link during my research for what was going to be a post solely on the U.S. election, I didn't link it then however. The significance of this particular post needs to sit within the context of other, perhaps lesser, but similar events to start to paint the picture.

I titled this series 'Thing break down", as that is really what's happening here. This presidential election (and the scenes outside) combined with the amount of other divisive issues, the Brexit, the civil strife, the wars... the sheer volume of it. The photos of riot police and protesters used to be somewhat rare just 5-6 years ago. It was a big event. Now it's everyday. In more places.

Much of the world has already reached the violent stage of this collapse. We're hearing a lot about Venezuela in the news and their collapse - for instance, but little as to the major contributor of what set it off instead most articles focus on the government's response to a situation they are increasingly powerless to control which is that they are quite near to the point where they will no longer be able to generate electricity due to a drought and haven't built the infrastructure to prepare for this problem. Their currency is hyper-inflating, and their society is falling apart. The corruption in the government means nothing ever gets done and their focus is on maintaining control.

Much as ours will be.

You'll notice no matter how much currency they print, they can't buy wealth. What their electricity shortage hasn't destroyed economically has been by the oil price dilemma.

Venezuela of course is an extreme example. They are much, much further on the curve of decline and much less robust than the advanced western world. However, the same principals apply to us - just as they can't print their wealth into existence neither can we. The oil price is only a problem because the overall cost to produce this oil is much greater than it used to be due to peak conventional oil which means the margins are much smaller or as in the case of a much of our extreme energy production: negative.

This means we have less surplus energy everyday to work with, to apply to sciences, to technology, to improvement, to maintenance. Venezuela squandered it's returns for it's surplus energy. It should have invested in new infrastructure. You don't just dream that shit up overnight it takes time to build it good and build it right.

It's difficult to build good infrastructure when you are in a state of collapse. You need to invest in it before that collapse, when you actually have the wealth. This is something that the western world also didn't do, but our mass of infrastructure is vast, and old and the amount of time it would take to repair it all is frankly, staggering. If we had the money to do it that is.

The scope of the world we live is really astounding when you think about it, isn't it? What we've built in the last 100 years is just mind boggling. That we haven't just built the physical structures, but computing devices which now model in incredible fidelity smaller versions of that same massive scope of a world is mind boggling. That I can play Grand Theft Auto San Andreas, on my phone (which I like to call my "Star Trek pad" - you know, cause they called them pads?) is mind boggling. Unfortunately there are also downsides to this scope and scale... maintenance, which is also mind-boggling in it's scope and scale.

Let's start with a small example and work our way up to the article I was mentioning earlier and in the last post.

Whitemud Drive flooding likely too expensive to fix, city officials say

So the basic premise here is that with the anticipated increase in extreme weather events and the increase in flooding not to mention the potential damage and costs that flooding may do the City of Edmonton is instead opting to look to the cheapest solution which does the bare minimum of the objectives which is to reroute traffic and ensure no one gets stuck under there again. A noble cause, but also shortsighted with it's minimalist objectives as another should be to maintain infrastructure to the highest standard at the lowest cost.

Things always seem to be "too expensive" and yet we exist within a monetary paradigm that *hopes* for inflation - that is, for them to get even more expensive and at the same time we complain about how expensive things are. It isn't going to get significantly cheaper, so the modifications should probably be done now and since we squandered all of our real wealth we will probably have to borrow from the future to do it and hope the wealth we're borrowing actually manages to exist when the bills come due.

This is of course but one overpass in a sea of overpasses. And this is also an example of a decision, deliberately made because of cost. Because of budgets. Whenever political talk of budgets arises two unproductive commentator camps emerge, both militant in their belief. One cares only for 'balanced budgets', the other cares only for 'adequate spending', and neither try to really... understand, each others position. For they are opposites. Aren't they? We act as though they are.

Rarely do I see anyone ask: what if both positions are true, at the same time? I don't see many people asking that question I believe because the answer isn't a very nice answer. It has no light at the end of the tunnel for those that feel they are entitled to infinite growth like the faith in one of those ideologies or the other does. This revelation instead presents a stark mindfuck, a reminder, that what we are doing and how we are living and the resources we are consuming at the rates we are consuming them at, is not sustainable.

Next up we have an interesting little piece on the state of elevators in Canada, lets take a gander.

Broken elevators reaching 'crisis' proportions across Canada

This link not only provides a great example of the scale that I am talking about, it also provides a great example of collusion and corruption, along with general greed for profits, hampering what should be considered to be critical infrastructure to all types of operations across Canada. This situation should hardly be considered to be unique to Canada though I'm sure if similar investigations were conducted in other "advanced" western nations you'd see the same thing. The scale and money required today to fix these problems is simply staggering, but we're not fixing them today and tomorrow doesn't look good either.

You can see it everyday in the discussions about infrastructure and it's pretty hard for anyone to deny the truth that we just can't keep up when every day new cuts are made, the economic situation worsens, and the wear and tear of ill-maintained infrastructure becomes more apparent. From the oil spill in Saskatchewan and our aging pipeline infrastructure, to New York's fragile subway to a collapsing bridge in India to Fukushima to nuclear plants in the U.S. where according to the EIA "Almost all U.S. nuclear plants require life extension past 60 years to operate beyond 2050". Where exactly do people think the "money" to do all this is going to come from? And yes while the maintenance of this infrastructure temporarily creates jobs it doesn't create wealth. We already have a bridge, for instance, and after we deploy the materials, time, and effort to maintain that bridge we still only have one bridge. This is what the death of growth and the reality of that looks like. Until we accept that rebuilding the same things over and over again isn't growth  - and is in fact an expense as the banks like to claim it is - we've got some serious problems on the horizon.

Fort McMurray fire won't devastate economy, says new report
"Overall, we expect the rebuilding efforts to add roughly $1.3 billion in real GDP to Alberta's economy in 2017 — or about 0.4 percentage points to economic growth. Construction will likely remain elevated in 2018, and possibly into 2019 as well until rebuilding is completed," states the report.
 Oh yea, "hardly noticeable". Rebuilding what they once had will even add GDP! Today's growth. You can almost picture the bankers licking their lips at the destruction, some much needed stimulus. And if your entire purpose in life is to employ people in jobs rebuilding the same old 1960s and 1970s tech over and over again while racking in tons of printed currency then all is well. But if your view of a healthy economy is improvement in standard of life and well being, surpluses of energy and time to do what you love, you're shit out of luck.

But here's the big one.

Inside the aging lock that is one breakdown away from crippling North America’s economy
In other words, the Poe is the only link from Lake Superior to the lower Great Lakes and the Atlantic Ocean beyond, and it’s living on borrowed time. In two years, the Poe turns 50, and, with Congress reluctant to fund a new lock, concerns are growing about its reliability. The lock broke earlier this week, blowing an O ring on a hydraulic line that feeds the gate activator. Luckily, mechanics fixed it in 45 minutes. 
It was not a moment too soon. The North American economy needs this lock. The iron ore that passes through here each year becomes more than US$500 billion worth of cars, trucks, fridges, bridges and other things made of steel. A bigger failure would spell catastrophe and it’s an increasing probability. 
This spring, the Detroit Free Press obtained a classified report from the U.S. Department of Homeland Security, which calls the Poe, “the Achilles’ heel” of the North American industrial economy. 
“A six-month shutdown of the Poe Lock … would plunge the nation into recession, closing factories and mines, halting auto and appliance production in the U.S. for most of a year and result in the loss of some 11-million jobs,” the report warns. 
Alarm bells are already ringing for U.S. ship owners. 
“Last year, we had the MacArthur Lock down for two weeks and the Poe Lock went down for an hour,” says Jim Weakley, president of the Lake Carriers Association, whose 17 members own 56 ships. “For the first time in my memory, you had the Army Corps of Engineers unable to move a ship. The scenario of a six-month outage isn’t as far-fetched as it may seem.” 
Canadian steel mills also depend on the lock. More vitally for Canada, eight million metric tonnes of prairie grain travelled by train last year to Thunder Bay, and then loaded onto ships headed to the St. Lawrence Seaway. Much of the grain then moved across the Atlantic to help feed Africa and Europe. 
“What’s concerning me is that the Mac lock is the same vintage as the Poe and has had a noticeable failure,” says Kirk Jones, president of the Canadian Shipowners’ Association and a vice-president at Montreal-based Canada Steamship Lines. (The Mac actually opened in 1943 and the Poe in 1968). “We’re nervous that the same thing could shut down the Poe and shut down shipping in its entirety.”
We're going to leave it here, I want that to sink in. See you in part 3 where we will start to get into the U.S. clownshow as Tom Morello is so elegantly putting it..


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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.