American journey: into the ethanol zone
I'm in the north midwest of America trying to see for myself how bad the economic situation is. What's clear is that subprime has hit America like a rash, picking out with "for sale" signs all the places where predatory lending doomed people to foreclosure. Lehman Brothers is fighting for survival this morning and Newsnight will bring the latest on that if there's a big development. However meanwhile I am right out amid endless fields of corn.
Amid the economic gloom there's also an upside: ethanol is the big new industry here in Indiana. I visited a brand new $117m ethanol plant yesterday: it's impressive - greenfield site, 30 acres of vats and piping, state of the art, and one of those satisfyingly simple processes whereby a lorry load of corn (looking a bit like rock hard versions of what you get out of a can of sweetcorn) drives up, tips into a silo, it gets mashed up with a reagent to make it ferment, then out of huge vats comes 17% alcohol liquid which goes straight into a train full of tankers and on to a petrol refinery to go in your car.
The site, which ground its first corn while we were there, was full of big construction guys in hard-hats and sunglasses. But once it's operational, here's the catch, the entire plant needs only four people to run it.
I've been asking people I meet: who or what is to blame for the economic downturn here in the US. Interestingly, the regular answer I get is not "Bush" "Washington elite" or even the investment banks. It's "greed". This country is still at heart governed by biblical values: it reminded me that when the banking industry pushed for deregulation in the 1970s one of the first things it had to do was abolish state-level "usury laws" limiting interest charged to 10%.
Comment number 1.
At 12th Sep 2008, stayingcool wrote:Ethanol - the perfect industry - state subsidies, a guaranteed market, a product to keep the rest of the profit machine going - and no workers!
More generally, I think it is irresponsible for you to go round giving the idea that neoliberals have seen the light and are swaying back towards Keynsian economics. Nice for the feel-good factor, but dangerously untrue.
Shovelling billions of our cash into a banking system to keep the whole capitalist machine up and running is as Keynsian as the longterm, ongoing welfare payments to the arms industry. Its called free public money.
But does it cause some Road to Damascus change in neolib pressure for investment ops in public services or for getting in with unregulated financial services in developing countries? NO - all that continues, but hidden behind the distraction of money probs.
The Neolib juggernaut is trucking on whether people are watching or not - and in that sense, the international trade agenda, ensuring that it is all a one way street, regardless of recession, is still as dangerous.
It means there can be no New Deal this time - unless its through private contracts.
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Comment number 2.
At 12th Sep 2008, barriesingleton wrote:GLOBAL VILLAGE IDIOCY AND ALL-WEATHER MOONING.
Now that one mans energy generation is demonstrably another mans ruination, and the unit of currency in your pocket is directly connected to Scotch Mist in a virtual vault, half way round the world - energy being equivalent to money - it must be apparent to the tiniest mind (I'll exempt George) that energy supply should be approached globally.
One thing the world does seem to accept, albeit with a variety of nuances, is that climate is changing. My understanding of 'climate' is that it includes sunshine and clouds; the latter obscuring the former. (As I type this, Berkshire has gone very dark and thunder is rumbling.) Is it, therefore, smart to rely on plant growth, generated by photosynthesis, as a future source of fuel?
We have clearly lost the War on Climate and should now set about 'future proofing' (I have been longing to use that) non-polluting energy supply that will sustain us when 90 billion are perched on a few areas of land (that is neither desert nor under water) trying to get on with each other. As I said recently: while the moon stays up, I reckon that orb is what we should harness -through tides. The moon is constant, predictable and works in all weathers. Where is the International Committee on Moon Power? If we get all the CERN geeks out of the hole they are in, this is just the job for them!
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Comment number 3.
At 12th Sep 2008, Blogpolice wrote:Is this a holiday or are you reporting something of interest?
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Comment number 4.
At 13th Sep 2008, threnodio wrote:Paul,
Perhaps those God fearing Americans are right. Lending vast sums of money to people who could not afford the repayments was where the sub-prime crisis began - all for an extra percentage point. Greed. Sold on to the mainstream banking sector for the extra percentage - greed. Repackaged and sold again into the international banking sector - greed. The Colorado River runs low while Vegas spouts fountains everywhere - greed. Gas guzzlers plough up and down the freeways while oil runs short - greed.
OK its all very naive and simplistic but you must admit they have a point.
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Comment number 5.
At 16th Sep 2008, quitedecu2 wrote:Paul and Threnodio
'Greed.'
we can agree about the greed. But then we are into the area of 'values' which is so beset by witch-hunts and hunters and mad yokels.
I suggest that 'How to rescue morality and moral argument' may be our true dilemma this century.
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