![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
The Economic Consequences of Peak
Feb. 4th, 2011 02:52 pmA bit ago, I posted in The Gas Ceiling that, since energy is our economy, and since unfrenzied, more-or-less natural increases in extraction rates may have come to an end in 2005, we should see unprecedented times ahead regarding our economy.
A recent Calculated Risk post came with an interesting way of graphing the impact of recessions:
Click for Statistical Embiggenation
This lets casual observers note the gap between the start and the end of various recessions. Some are longer in duration; other deeper; but most, as you can see, follow a fairly symmetrical bell curve progress with as much time between the beginnings and ends of the recessions. Since we're definitely not out of it yet, it's too soon to say whether or not this recession will follow that pattern, but. . . .
Just glancing at this graph, I noticed that most of them happened in the teeth of -- and probably as a result of -- temporary fuel shortages caused by supply disruptions both intentional and incidental. 1974's recession definitely started with the 1973 OPEC Embargo; 1980's with fuel shocks likely caused by Iran's 1979 revolution (and all the drama attendant thereto); 1981's downturn came soon after the start of the Iran-Iraq War.
Notice also that with the exception of 1969, all of the recessions previously ended with employment levels either at or higher than the previous peak of employment at the start of the various recessions. That 1969 exception is interesting; I've read in more than one book recently that our Western standard of living for a majority of people rose almost steadily from about 1820 to 1970; I have a theory why this happened, but will expound on it another time.
Back to the foreboding ellipsis above. I don't think the rebounded employment level will ever reach the pre-Great Recession mark, or if it does, that the curve will less resemble a symmetrical bell curve and more a cliff plunge followed by a much longer, gently rising slope upward to the "recovery." Why? It's that darned Gas Ceiling. We can't expand the economy without burning fuel, and fuel will be the one commodity that fails to materialize no matter what we try.
Oh, and I put "recovery" above in scare quotes simply because I very much doubt the jobs of tomorrow will in any way resemble the jobs of yesterday. They will not pay as well (adjusted, of course, for inflation or the lack thereof). That's why I think it will be a longer, slower recover this time around; too many will despair of the wages offered verses their wage expectations, and put off employment until the absolute last minute.
I'm not bragging, or reveling here in a Doomer Porn-gasm. Rather, I see this graph as an easily testable benchmark. The other fuel-shock induced recessions recovered after fuel supplies were recovered or secured elsewhere; if that can't happen due to Peak. . . .
We'll see what happens in, according to the graph, about 15 months. If we're back to pre-recession employment, I was wrong.
A recent Calculated Risk post came with an interesting way of graphing the impact of recessions:
Click for Statistical Embiggenation
This lets casual observers note the gap between the start and the end of various recessions. Some are longer in duration; other deeper; but most, as you can see, follow a fairly symmetrical bell curve progress with as much time between the beginnings and ends of the recessions. Since we're definitely not out of it yet, it's too soon to say whether or not this recession will follow that pattern, but. . . .
Just glancing at this graph, I noticed that most of them happened in the teeth of -- and probably as a result of -- temporary fuel shortages caused by supply disruptions both intentional and incidental. 1974's recession definitely started with the 1973 OPEC Embargo; 1980's with fuel shocks likely caused by Iran's 1979 revolution (and all the drama attendant thereto); 1981's downturn came soon after the start of the Iran-Iraq War.
Notice also that with the exception of 1969, all of the recessions previously ended with employment levels either at or higher than the previous peak of employment at the start of the various recessions. That 1969 exception is interesting; I've read in more than one book recently that our Western standard of living for a majority of people rose almost steadily from about 1820 to 1970; I have a theory why this happened, but will expound on it another time.
Back to the foreboding ellipsis above. I don't think the rebounded employment level will ever reach the pre-Great Recession mark, or if it does, that the curve will less resemble a symmetrical bell curve and more a cliff plunge followed by a much longer, gently rising slope upward to the "recovery." Why? It's that darned Gas Ceiling. We can't expand the economy without burning fuel, and fuel will be the one commodity that fails to materialize no matter what we try.
Oh, and I put "recovery" above in scare quotes simply because I very much doubt the jobs of tomorrow will in any way resemble the jobs of yesterday. They will not pay as well (adjusted, of course, for inflation or the lack thereof). That's why I think it will be a longer, slower recover this time around; too many will despair of the wages offered verses their wage expectations, and put off employment until the absolute last minute.
I'm not bragging, or reveling here in a Doomer Porn-gasm. Rather, I see this graph as an easily testable benchmark. The other fuel-shock induced recessions recovered after fuel supplies were recovered or secured elsewhere; if that can't happen due to Peak. . . .
We'll see what happens in, according to the graph, about 15 months. If we're back to pre-recession employment, I was wrong.