Positioned for the Future

During August and September — when oil prices were high, Russia invaded Georgia, the financial crisis began unfolding, the doom-and-gloomers were at it. We were told that it was the end of capitalism. We were told that our foreign policy was being controlled by Mikheil Saakashvili. We were told that our choices were a close friendshp with Putin or a new Cold War.

Now it’s clear that such apocalyptic visions were not true.

  • Oil prices were high because of a bubble. They are still too high, but we can manage that.
  • Russia invaded Georgia because it is a Gap state with money and an army. That’s a serious problem, but one we can manage.
  • Our financial system melted down. We are rebuilding it.

Two good articles, one by Tom Barnett and the other by Victor Davis Hanson, help bring some santiy back to the discussion.

High gas prices are — for lack of better words — bad

Do we need a huge resource transfer to handle the 100 million young heading toward non-existent jobs in the Middle Eat? As Tom points out, probably not if it comes from oil: oil (and natural gas) money is a curse because it distorts the economies and political systems of the countries that it touches.

Of course, the non-integrated Gap needs economic development, but it needs to achieve this through wealth creation. Attempts to just give money — whether in the forms of “new Marshall Plans” or oil booms — don’t go anywhere. In one generation you badly damage the countries that have the oil, allowing it to bumble into a future that it can’t sustain on its own.

When you consider that in 1950 Saudi Arabia and South Korea were roufhly comofrtable, the status of one as nearly perpetual Gap (unstable, radical, misogynist, and all the rest) and the other as comfortable new Core, it’s clear how much damage oil can do to a country’s development.

We are seeing a good example of this warping going on in Russia, under its incompetent strongman Vladimir Putin. Catholicgauze points to AmericanShow.ru, a video put out by the Putin/Kremlin group “Nashi” that outlines how (among other things) the Great World War was a plot by Americans to destroy the European people. More info on this is available from Current, though the American Show is also available on youtube:

So how can we save Russia from itself? How can we prevent other Gap countries that have oil from harming themselves as Russia and Saudi Arabia have injured themselves?

Keep the price of oil low.

That is one reason why the reorganizational bankruptcy of VeraSun, one of the nation’s largest ethanol producers, is so disturbing. Ethanol is not some strategically neutral substitute to Gap hydrocarbons, like oil sands are. Rather, technologies like E85 and hybrids allow us to radically move past foreign hydrocarbons, and create alternative infrasturctures to those cursing our consumers and their societies with high oil prices.

For the sake of our people, our security, and their people, and their future, keep the price of oil low.

The E85 Lifestyle

I discovered that our new used car is a flex-fuel vehicle that runs on E-85 (85% ethanol, 15% gasoline). I’ve decided I now need to be smarmy. All those Prius hybrid drivers have been feeling good about themselves by halving their use of foreign hydrocarbons. But I’m walloping them!

Of course, E85 still requires energy to refine from corn. Still, I’m very happy to substitute American coal, American hydroelectricity, etc. instead of importing foreign hydrocarbons from the Gap.

Ethanol has come a long say since E10 first came on the market, and it’s still a growth industry. It’s important that our vehicle fleet get off foreign hydrocarbons, so we stop propping up dangerous regimes such as Russia, Iran, and Venezuela. Plugins like the Chevy Volt, hyrbids like the Toyota Prius, and E85 cars like mine are all part of the solution.

Indeed, if there is going to be any Detroit bailout, the government should use its bargaining power to maximize the number of E-85 plugin hybrids produced.