Redesign the Paradigm

Government:

Problem

• Well financed special interests led by large banks, financial institutions, and Multi National Corporations (MNC’s) use high paid lobbyists to acquire and even write their own favorable legislation.
• Special interests provide campaign contributions to get political candidates elected, these candidates become beholden to their
  contributor’s legislative needs. This is especially true for officials who are sitting or will sit in key subcommittee positions (the decision makers).
• This type of political environment creates a lack of fiscal responsibility among politicians that results in deficit spending in order to meet and support those interests.

Cause

• Lack of moral center by politicians  who are more concerned with financial support, re-election, and serving political party
  objectives over doing what is right by the country and its people.
• The incentives for politicians in the current political system are financial contributions for re-election. To acquire this politicians are expected to return support to  individuals or groups that provide the greatest contributions. Unfortunately, that does not include the U.S. public and is being reflected in the laws that are being written and voted on.

Effect

• Continued deficit spending increased the national debt, which has exceeded GDP ($14.3T) with over $50T in total unfunded
  liabilities. This debt is being dumped on the country’s future generations.
• Global investor confidence in the U.S.’ ability to govern and manage its debt is decreasing. These investor countries are
  looking for other investments than U.S. Treasuries which they feel are no longer the world’s safest debt instruments. They are also beginning to actively search for an alternative currency to the U.S. dollar.
• Politician’s protecting special interest and corporate profits are allowing legislation which is acting as a barrier to entry for
  new technologies or is restricting the functioning of current  systems deemed a threat to those profits. This is limiting effective change.
• Distrust for government is amongst the U.S. population is mounting. The population is beginning to realize the depth of corruption that has been legalized. Voter disenfranchisement is growing as citizens realize that money for elections matters more than their votes or the country’s real needs.

• Main Street America– Devaluation of the dollar has and will increasing result in more inflation making imports more expensive from gasoline to products in all those big box stores. This reduces families spending capabilities. Less spending in the economy means prolonged recessions.
• Main Street America – Legislation continues to inequitably favor large corporate and other well financed special interests resulting in polarization of wealth away from the middle classes and towards the wealthiest Americans.

Solution

• The current political system is so entrenched in providing legislation to the highest bidder and there is such a lack of transparency available to the general public that not much can realistically be done to initiate change. Idealistically speaking, U.S. citizens would do well to stop voting for candidates from either of the two main political parties.. Their interests and ideologies are so diametrically opposed that they render themselves incapable of working together or finding solutions. You can’t solve problems with the mindset that created them – Einstein.
• Keep working towards real campaign reform. The current election system has degraded so far that it would be cheaper for the U.S.
  taxpayers if all campaign contributions and individual contributions were strictly abolished and billions in taxpayer dollars were allocated every 2 years for all qualified candidates to share equally.
• Establish strict fact checking guidelines initiated by non-partisan independent groups on all campaigns and for all opinion based media outlets reporting. Penalties would include fines and requires these outlets succumb to be required to correct misinformation in the same time slots as it was originally presented.
• Create an easy to access internet site that display all legislator voting records, who they receive have received contributions from, what special interests benefit from their votong history, and what loobist contacts receive and which help their staffs in writing legislation. Transperency and exposure for public scrutiny is the purpose of the site.
• Electonic voting machine tabulation will be verified by taditional hand count paper ballots to ensure that electonica results are not tampered with.
• Limit terms of office. If the President can serve for no more than 8 years, a Congressman or Senator should not be allowed th either. Term limits decrease both partisan loyalities and special interest control of legislators.

Note – Resistance to such measures is incredibly strong and multifaceted. Any advances will be met with new legislation designed to circumvent those advances. This will be a long struggle that requires vigilance

Monetary System:

Problem

• Rising national debt due to lack of fiscal responsibility in government.
• International debtors are loosing confidence in the U.S. ability to pay its debts and are slowing down their purchasing of debt instruments (Treasury Bills) and seeking alternatives to the dollar
• The Federal Reserve (FED) is printing more dollars to cover increases in government spending and using Quantitative Easing in an attempt to stimulate a weak economy. This practice further weakening the dollar in the eyes of international investors..
• The FED’ has kept interest rates artificially low and implemented Quantitative Easing measures for so long that it is accelerating the risk of sustained inflation.

Cause

• Unrealistic philosophy that indefinite budgetary funding with debt will have no consequences.
• Too many officials in the Treasury and FED are straight from Wall Street with allegiances that appear more interested in protecting large banking and investment banking interests than reigning in debt.
• Lack of fiscal responsibility centered around politicians who are more concerned inj protecting constituent and special
  interests and ensuring their re-elections than limiting deficit spending and reigning in the FED and its propensity to print money.

Effect

• Loss of international debtor confidence is creating a cycle where international debtors / investors purchase fewer U.S. treasuries and dollars. This requires the FED to print of more dollars in order to meet budgetary requirements. This cycle results in an ongoing devaluation of the dollar and U.S. Treasuries.
• Devaluation of dollar gives rise to further inflation as imports (big box stores) and oil become more expensive.

Solution

• Restrict the FED’s ability to expand or contract the U.S. monetary supply without congressional approval.
• Restrcit the FED’s ability to issue or repurchase bebt instruments without congressional approval.
• Require an anual audit of the FED.l
• Protect personal savings and investments portfolios with investments not affected by devaluing dollar  i.e. gold or other precious metals and their mining stocks, more stable currencies, funds such as ETF’s that hedge against inflation, etc.

Banking/Financial System:

Problem

• Financialization of U.S. markets. Derivatives’ investing is tying up almost 1 in 3 investment dollars that could be better spent in the real economy for manufacturing, innovation, etc.
• There is $600T worth of derivatives worldwide, $433T are interest rate contracts and swaps ($223T in U.S.). Most of this amount is notional meaning it will never come due, but if the FED is forced to rapidly raise interest rates to counter growing inflation only a fraction of these interest rate contracts need to be called due before another round of “to big to fail” bank bailouts occurs.
• Large banks are reluctant to invest / lend to startup, small, and medium sized businesses the backbone (85%) of U.S.
  job creation and Gross Domestic Product (GDP), despite assurances to the U.S. government for receiving TARP bailout funds.

Cause

• Wall Street greed (mammon is the more accurate word). Derivatives investment fees and commissions are very lucrative and still virtually unregulated thanks to heavy lobbying and campaign contributions by the financial sector.
• Large U.S. banks penchant towards “safe” lending which involves lending to only big MNC’s with global holdings predominantly in Asian countries. These Asian markets are considered to be emerging markets that have greater opportunities for growth than the mature markets or what some MNC’s consider declining markets of the U.S.
• Incentives on Wall Street reward short term risky investments. Moral hazard is prevalent since the general belief is that there will be another round of “to big to fail” bailouts by a FED and Treasury Department that is made up largely of ex banking executives.

Effect

• Large banks are not investing / lending to startups, small, and medium sized businesses for reasons mentioned above. This is limiting  both job growth and taxable revenue from these businesses and their employees. This revenue is necessary for paying down national debt.
• Large banks are investing / lending to large MNC’s with global exposure. These MNC’s continue to export high paying jobs to reduce labor costs and to get access the emerging markets in Asia. The results are increased profits for the MNC’s and fewer high paying skilled labor jobs for U.S. workers.
• Lack of credit availability to start-ups, small, and medium size businesses results in fewer opportunities for these companies to expand which contributes to stagnant employee wages.

Solution

• Seperate traditional banking from investment banking or from offering speculative investments.  Banks that hold U.S. citizen savings and checking accounts should only be engaged in traditional banking. i.e. providing loans to consumers / businesses and offering savings or transaction accounts.
• Break up the largest four banks into smaller entities. Too big to fail should be too big to exist.
• Large established banks have demonstrated they are not open to any changes that will benefit the general public. Savings and checking accounts are better placed in small to medium sized regional banks who engage in lending to  small and medium sized businesses or in local community banks.

Energy:

Problem

•  Availability of key natural resources and commodities such as strategic metal and material necessary for maunfacturing of manufacturing of high technology components are diminishing.
• Insufficient production capacity necessary to meet global demand in the fossil fuels industry.
• World oil production has plateaued at just over 84.5 million barrels per day for the past five years indicating oil may have reached peak capacity.  Global consumption continues to escalate driven by non-OECD countries, last years consumption outpaced production by 5 million barrels per day.
• The U.S. has large untapped U.S. liquid oil fields that remained in reserve or under limited production and has the world largest concentration of shale oil. However, U.S. production strategy appears centered around using up the rest of the world’s petroleum supply first. There is growing evidence that many of the world’s reserves are depleting faster than reported.
• Natural Gas production is expected to be able to meet growing demand for at least the next 5 – 8 years and production capacity is not expected to be reached until 2025 – 2030. However, this is only possible by utilizing hydraulic fracturing (fracking), horizontal drilling, and extracting natural gas from shale in order to offset the decline of traditional natural gas production
• Coal production is also expected to be able to meet demand at least for the next decade possibly longer and production capacity is not expected to be reached until 2025 but is chief producer of man-made greenhouse gases.
• Regardless of reserves available, production capacities for fossil fuels will soon begin to decline as the easy to access reserves are depleted requiring longer extraction and refinement processes timelines. In addition, costs associated with production are increasing as existing resources become more difficult / expensive to extract.
• New procedures for extracting remaining fossil fuel reserves have greater risks than traditional applications. Deep water drilling spills has done massive environmental damage to local waters and wildlife. Coal mining is very polluting and hazardous to the environment and drinking water. Oil sands are essentially strip mining and also very polluting.  Shale production for oil and fracking for natural gas both represent serious threats to local water supplies.
• Fossil fuel prices will continue to rise as global demand outpaces supply creating geopolitical tension between countries.

Cause

• Profits from fossil fuels are in the billions of dollars a quarter. Fossil fuel companies are in business to make profits and
  generate share holder wealth. Oil, coal, natural gas production accomplishes are accomplishing these goals in record numbers.
• Fossil fuel companies stand to remain profitable even if they are not able to meet demand since prices increases will guarantee profits despite lower production. There is no incentive to develop additional capacities, invest heavily in alternatives to fossil fuels, or push to strongly for legislation that will open local U.S. reserves.
• Millions of dollars spent on lobbying and campaign contributions ensure continued subsidies, tax breaks, and barriers to entry for effective renewable energy projects. Misinformation campaigns have kept the public questioning climate change, world wide reserve capacity, and environmental safety and pollution concerns.
• Lack of political will to take on fossil fuel industry combined with a belief system (promoted by the fossil fuel industry) that
  renewable energy will never have the efficiencies necessary for wide scale production and therefore should not warrant infrastructure investment. This belief still exists despite successful track records in other countries that prove otherwise.

Effect

• As global demand for natural resources begins to outpace supply expect a continuation of price increases in fossil fuels and strategic metals and materials. Price increases in these commodities will drive prices higher throughout the U.S. and global economies.
• Greenhouse gases (CO2, methane, etc) will continue to rise and contribute to climate change that is already occurring naturally as part of the Earth’s heating and cooling cycles. Pollution from fossil fuel exhaust gases will continue to increase contributing to respiratory and other health concerns especially in dense urban areas.
• Successful legislative barriers to entry mounted by the fossil fuel industry guarantee limited federal funding for research, infrastructure development, and the creation of large scale solar thermal, geothermal, tidal, maglev windmill, bio algae, and other renewable energy projects.
• Oil price increases equate to rising inflation since oil is the primary energy source used for almost all transportation purposes, and all consumables travel hundreds of miles to get to their final destinations. Oil is also used extensively in manufacturing processes which contributes to higher prices of both base components and finished goods manufacturers.
• When all energy sources are combined (including projected increases in renewable energy) global energy production peaks just prior to 2020 then begins a steady decline until the end of the century as first oil and then coal fail to meet global demand. This will occur unless a new energy source is discovered with efficiency levels approaching zero point and this source is allowed to come to market. Otherwise, global consumption peaks in 2020 and then begins its steady decline to the end of the century. The population explosion of the past 75 years has been directly correlated to the growth of fossil fuel production. A decline in population can be expected to follow the decline in overall energy production capacity since energy is the catalyst for food production and distribution.

• Main Street America –  An upward trend of rising fuel an electricity costs combined with unpredictable and sometimes rapid price fluctuations.
• Inflation will continue to increases in the U.S. driven by higher transportation costs as products travel hundreds if not thousands of miles to get to manufacturing / processing facilities and eventually the consumer.  Food prices will reflect this trend the strongest since that average food product has to travel almost a thousand miles before it reaches the grocer.
• Rising manufacturing cost will also drive inflation higher and restrict employee wages as manufactures struggle to not pass on price increases to customers.
• Fresh water aquifers are beginning to show evidence of contamination and this will threatening the health of local populations as fracking and strip mining operations escalate.

Solution

• Escalating global demand for fossil fuels and public outcry over rising prices will allow renewable energy solutions greater opportunity to supplement the fossil fuel industry. Private sector renewable energy companies should take advantage of this trend and lobby the federal government for research grants to increase production efficiencies and subsidies for developing infrastructure..
• Grants and subsidies can be acquired by redirecting the fossil fuel industries subsidies and tax breaks towards private sector renewable energy companies.
• Employ a nation wide program to drill arctic, deep water, and the recently discovered deep intercontinental fields. Apply special taxes to industry profits for the rights to drill and use the money for a nationwide renewable energy research and development program designed to wean the country off fossil fuels dependence within the next two decades.
• Cease or severely limit all fossil fuel extraction programs that represent a direct contamination threat to ground water tables.
• Implement public awareness campaigns to inform the local populations of the dangers of new extraction processes like fracking pose to their health. Inform the public of the benefits and limitations of current renewable energy systems and the need for additional research and infrastructure funding.

Healthcare Costs:

Problem

• Healthcare costs in the Unites States are currently at $2.6T and projected to continue rising that equates to $7960 per person and is over twice the average of the 33 economically developed countries. What is even more startling is the rate of cost increases compared to the other countries.  Costs as a percent of Gross Domestic Product (GDP) is at 18% and rising.
• The biggest cost drivers are new patented prescription drugs, expensive new technologies and equipment, inefficient administrative costs, and profit taking in every sector, much of it hidden from public scrutiny, especially in healthcare insurance.
• Healthcare insurance premiums are rising at double digit rates (130% in the past decade) while benefits continue to be reduced and fewer employers are providing coverage (9% drop since 2000).
• Bankruptcies due to healthcare costs represent 30% of all U.S. bankruptcies. Even people with employer provided group plans have discovered they are vulnerable to bankruptcy. While Americans watch their healthcare premiums going up and bankruptcy rates continue to rise the major healthcare insurers are have  enjoyed record profits for the past three years, even in the midst of a lingering recession. This is possible because as monthly premiums and insurance deductibles have increased policyholders are coming to grips with the fact they don’t have the financial resources for expensive operations, testing and medical care.
• The $1T pharmaceutical industry ($300 B a year in U.S. drug sales alone) with its 16.4% profit margins is at the forefront of U.S. healthcare cost. What is disconcerting is not just the revenues that are being generated but the industry’s propensity for expensive  long term patented drug treatments as opposed to actually bringing any cures to market. A cure for any disease would never represent the same level of profits that a long term patented treatment would. Therefore the financial incentive remains focused on providing treatments while any promising research that could lead to potential cures tends to end up getting buried, redirected, or diluted into a treatment.
• Almost every prescription drug provides some level of toxicity to the human body. This means that prolonged exposure to a perscription drug will generally result in that patient developing a future disease from taking the drug. This is componded by the more perscription drugs a patient takes.  This is a very profitable model for pharmaceutical companies since they are essentially creating their next generation of customers, but ithis cycle is significantly driving up the country’s healthcare costs and adding to the national debt.
• The U.S. healthcare industry as a whole has demonstrated an utter lack of interest in preventative care.  Prevention has been proven in nearly all the other economically developed countries to lower costs, but that means it will also lower the healthcare industries’ profits. Of the 33 developed nations only the U.S. is without some level of universal care. Universal healthcare systems are either government backed or non-profit institutions which are more concerned with keeping their costs low than generating profits. Bottom line -  healthy patients don’t generate profits.
• Healthcare costs expectations are projected to rise much more sharply over the next two decades as aging baby boomers,  with increasing rates of obesity and chronic disease, will require more medical treatment and enter the Medicare system.

Cause

• Healthcare insurance companies, pharmaceutical companies,  medical device manufacturers, etc. are in business to make profits and like all for-profit corporations have a fiduciary responsibility to generate share holder wealth by increasing the stock’s price. Profits and rising stock prices are tied directly to executive compensations packages which in some cases have reached into the hundreds of millions of dollars. Greed drives  decision making in the healthcare industry.
• A culture has developed among corporate executives over the past 20 years that is so focused on profit maximization strategies that profits are sought even at the expense of the patients. For example, pharmaceutical companies have become so fixated on the development of blockbuster drugs worth billions of dollars in profits that they will routinely skirt regulations, falsify drug studies, cover up fatal side effects, illegally market drugs, and pay kickbacks to doctors ($200 M last year) for endorsements and prescriptions of their drugs, going so far as to encourage doctors to prescribed drugs for treatments the drugs were never approved or intended for. It is now considered a good business practice to accept the hundreds of million of dollars worth of government fines and private party lawsuits in exchange for the billions of dollars in profits the drugs will generate.
• Corruption and fraud is rampant in the healthcare industry. The pharmaceutical industry continues to have one scandal after another. 9 out of 10 of the largest pharmaceutical companies have either already paid billions in government fines and private party lawsuits or are currently under investigation. Healthcare insurance companies have intentionally created complex and convoluted billing practices designed to discourage customers from pursuing claims while they still engage in practices designed to deny or limit coverage regardless of the Healthcare Reform Act of 2010.
• The healthcare insurance and the pharmaceutical industries have spent hundreds of millions of dollars on the best lobbyists K street have to offer and for campaign contributions to senators and congressmen in order to ensure legislation and regulations remain favorable and do not interfere with revenues.
• The pharmaceutical industry’s massive $60 B marketing and direct to consumer advertising budget mislead the public about the safety and necessity for prescription drugs. Advertising dollars and financial contributions to major medical associations, review journals, and universities have grown to comprise sizeable portions of their operations budgets. This has made prescription drugs the accepted method of treatment while downplaying nutrition and non-patented remedies regardless of research findings. Even the FDA which is suppose to be monitoring the pharmaceutical industry is receiving more than $600 M in user fees from the industry amounting to more than 60% of its drug review funding.

Effect

• Healthcare costs are rising. The rate of the increase is projected to accelerate over the next decade as the baby boomer population goes into retirement. Aging baby boomers are already experiencing increasing levels of chronic disease (heart disease, cancer, diabetes, etc.) which represents 75% of all healthcare costs in the U.S.  The federal government currently spends $.9T (23% of federal outlays) on healthcare and is not prepared for the cost escalations expected in Medicare and Medicaid from an aging population with growing levels of chronic illness. There is no realistic way planned to pay for these rising costs except to print more money which means more deficit spending. Deficit spending adds to the national debt which further erodes international debtor confidence.
• Healthcare cost escalations if left on their current trajectory could threaten to bankrupt the country in a decade or two. Due to aging baby boomers and record levels of chronic disease and obesities related illnesses which will require greater amounts of expensive and toxic drug treatments.
• Powerful lobbying pressures and campaign contributions  ensure that there is little political will left to address rising healthcare costs. Politicians who receive large contributions from the healthcare industry fight diligently to protect those contributor’s profits and the status quo and this limits the chance of reform. As a consequence it is unlikely that the rising Medicare and Medicaid costs will be reigned in, or that competition from a national healthcare program or from non-profit insurance, pharmaceutical, and medical equipment companies will force the for-profit healthcare companies to lower their prices or become more efficient.
• Expect fewer cures and more expensive patented treatments. Half of all Americans are routinely taking some type of prescription drug. Those numbers will continue to rise as Americans find themselves having to take more prescription drugs to counter the toxicity effects of the drugs they have been taking.
• Prevention and lifestyle changes which could appreciably lower healthcare costs by building up the patients immunity will continued to be ignored or downplayed by the healthcare industry to protect profits. This reduces the populations chance at better health requiring them instead to rely on drug treatments and surgery. Prevention consist of a routine monitoring, exercise regimens, and a diet made up largely of raw foods and nutrient /immune building supplements. The diet limits meat protein & fat, dairy all of kinds, processed / refined foods, fast foods, and sugar.
• The U.S. ranks near the bottom of the 19 developed countries in healthy life expectancy (HALE). The U.S. is dead last in the age-adjusted amenable mortality rate before age 75 category, both of which are strong indicators of the ineffectiveness of how the US treats disease. The country is paying more for healthcare than any other country and will continue getting sicker for it.

• Main Street America – Individual healthcare costs will continue to rise while insurance coverage decreases.  More citizens can expect to go into bankruptcy due to lack of insurance, high deductable ($5000 to $10000), or policies reductions that result in insufficient of their healthcare bills.
• U.S. population is becoming more medicated and less healthy.  Life expectancy and quality of healthy life will be lower for this generation than the previous one.
• Quality of healthcare in the U.S. will continue to decline and more Americans will die at the hands of the medical system which has recently surpassed stroke as the number three killer in the U.S.  Each year 225,000 Americans die  as a result of modern medical treatments. The main causes are negative reactions to properly prescribed drugs at 106,000 (this is the conservative number from the CDC), infection at hospital at 80,000, hospital errors at 20,000, unnecessary surgeries at 12,000, and improperly prescribed medication at 7,000.

Solution

• General Option – A nationalized healthcare option which combines Medicare, Medicaid, CHIP, TRICARE and state / local health clinics into one system (the VA and the military’s healthcare system may remain apart) and subsidizes the creation of non-profit healthcare insurance companies, pharmaceutical companies, and medical equipment manufactures.
• Nationalized healthcare option and non-profit healthcare companies should be managed and structured for efficiency i.e. flattened hierarchies, computerized integrative billing, simplified regulations, established pricing etc. The goal is to provide quality healthcare at the lowest possible costs to Americans not profits for corporations or shareholder returns. This will force much needed competition within the industry.
• Fund  independent and university research facilities for pure research WITH NO TIES to pharmaceutical or biotechnology (owned by big pharma) companies. Redirect private sector donations towards these research labs. All research findings would be patented, human trials conducted, and any cures or treatments deemed suitable for public use be made available at cost to both the national healthcare option and to non-profit pharmaceutical companies.
• Remove the pharmaceutical industries influence from the FDA which is suppose to be monitoring the pharmaceutical industry not receiving the majority of the $1.5 B in user fees it supplements its budget with. Do not allow pharmaceutical executives to work in the FDA and require that FDA officials have to wait a minimum of 5 years before they can take high paying jobs with pharmaceutical companies in order to reduce conflicts of interest.
• Establish a nationwide prevention awareness program. Require labeling of adverse reactions and that doctors explain the toxicity risks of prescription drugs.
• Establish a program that allows all university graduates who pass medical school entrance exams the opportunity to attend medical school. State school s would be regulated to keep tuition costs low.  Provide grants to students that pay the costs of medical school in exchange for years of service at hospital in the nationalized healthcare system or at the VA. The goal is to have more doctors in the system and also to encourage doctors to engage in research or trial studies.

Food Production:

Problem

• The U.S. Farm bill subsidizes the country’s four primary crops – corn, soy, wheat, and rice. These crops are sold to food producers for less than costs of production. Third world farmers cannot compete with these subsidized exports leaving those countries susceptible to famine should production levels drop unexpectedly.
• Food production companies use the four primary food crops along with cheap chemicals to create the majority of U.S. food and food components. These foods are almost all heavily refined and processed. The processing causes foods to loose much of its nutritional value. Processed foods are  also heavily laden with addictive levels of fats, salts, and sugars.   Research scientists are discovering that some of the chemical additives have additive qualities of their own such as restricting receptors in the brain and stomach that tell a person when they are full or increasing a person craving certain types of food.
• Long term consumption of  processed food products is causing an obesity epidemic in the U.S. and contributing significantly to the rise in chronic diseases, both of which are driving up healthcare costs.
• Food production in the U.S. is becoming increasingly dependent on genetically modified crops (GMO). These crops usually consist of a monoculture (single) strain which lacks the genetic diversity necessary for crop resiliency against disease. GMO crops do not produce seeds requiring farmers to purchase seeds from the chemical companies who make the GMO crops.
• GMO crops are designed to be resistant to pesticides and herbicides. The chemical companies that produce GMO seeds / crops also produce the very same pesticides and herbicides. The crops are also drought resistant and produce large appealing fruits and vegetables. Unfortunately, they do not possess anywhere near the same nutritional value of their organic counterparts and lack proper long term trials to determine the health risks of prolonged consumption.
• Modern industrialized farming practices are deteriorating the nutrient composition of the soil rendering it almost useless in places and dependent on increasing amounts of fertilizers in order to grow crops. These fertilizers are produced by many of the same chemical companies that provide pesticides and herbicides.  Industrialized farming is also heavily dependent on oil for fertilizer production, fueling farming equipment, and transporting crops to food producers and food products to grocery stores. This makes food prices subject to price increases when oil prices go up

Cause

• Profit margins in the food industry are low and the industry is very competitive. One way that food companies have learned to sell more food and increase their profits is to generate a local population that consumes more of its products. The U.S. diet which consists primarily of processed and fast foods has increased obesity rates to over 34% nationally. Obese people eat more food.
• The food industry is incredibly efficient at providing the world with an abundance of cheap food. To achieve these goals and remain profitable food producers are providing the public with food that is not only nutrient deficient but is also so chemically altered through processing that what consumers are eating is essentially unhealthy.
• Lobbying and campaign contributions from the food and chemical industries have led to the creation of the U.S. Farm Bill and other legislation designed to subsidize industrialized farming. This makes it difficult for traditional and organic farmers to compete and isolates them into niche markets.
• Genetically modified foods (GMO’s) and modern industrialized farming practices serve as profit making machines for chemical companies more interested in selling pesticides, herbicides, and fertilizers than consumer in safety. These companies have successfully overtaken U.S. and European crop markets.

Effect

• The cost of mass produced processed /refined and fast food is significantly cheaper than healthier organic foods. Lower and middle classes who are being hit hardest by a lingering recession and are financially restricted to buying less expensive processed foods are experiencing the fastest decline in health.
• The U.S. population has become largely addicted to process and fast foods which generally taste better due to the high levels of fats, salts, sugars, and chemical additives.
• The U.S. population is becoming increasingly obese and more susceptible to chronic disease which is contributing to rising healthcare costs and the national debt.
• GMO monoculture crops with inferior nutritional value and possible long term health risks are also contributing to healthcare costs.
• Modern industrialized farming and GMO monocultures are producing crops less resilient to disease. Regional food shortages have already occurred due to extended droughts. A crop disease that attacks GMO monocultures could devastate production yields leading to famine in the third and world wide food shortages.
• GMO crops produce no seeds and chemical companies have successfully eradicated the majority of seed production through patent infringement law suits. This limits the farmer’s ability to rapidly recover from a large scale crop disease by planting a variety of each type crop in the hopes that one or two will be resistant to the disease.
• GMO producing companies bring litigation against farmers who don’t use their GMO seeds / crops under the pretense of patent infringement. The lawsuits claim that patent protected seeds blow onto their farms and thus violate their patents. Most farmers have chosen not to go to court and either sell their farms or agree to fines and to farm GMO crops in the future. Those who do go to court find themselves in a drawn out costly lawsuits that they generally win but financially devastate their businesses.
• Modern farming has become heavily dependent on oil for production and distribution that rising oil prices have already caused food prices to increase.
• Lobbying from the food industry is attempting to create legislation designed to limit the ability of organic and local farmers to bring their crops to market under the guise of food safety. While the vast majority of E Coli and other bacterial outbreaks come from large industrialized farms.

• Main Street America – Consumption of processed and fast food are increasing America’s obesity rates, heart disease, cancers, Type 2 diabetes, etc.
• Overall health in the U.S. population is declining due to a lack of proper nutrition and being over medicated. 
• Food prices will continue to be more expensive as oil prices increase and the dollar devaluates.
• Potential food shortages may be on the horizon and the majority of Americans are not prepared.

Solution

• Remove some of the subsidies from large food growers / manufacturers and redirect those  funds towards more sustainable local production that engages in organic or traditional crop rotation farming.
• Remove litigation threat to farmers from chemical companies who can sue farmers using their own seeds when GMO seeds blow onto their farms. Fortify the non GMO seed market and reintroduce seed variety back into mainstream farming applications.
• Tax processed food and especially fast food products in the same way tobacco is taxed.  Create a private sector fund not a government office to manage and distribute  the money to help pay for rising health care costs.
• Create a consumer awareness campaign to inform public of dangers of continued consumption of processed and refined foods. Create legislation that forces food companies to clearly illustrate chemical and additives compounds on labels. Enforce guidelines for what can be labeled as organic.

Growth for the sake of ongoing profits and investor returns is no longer going to be the answer for the majority of Americans. Favorable legislation for large MNC’s and the country’s wealthiest will ensure a continuation of polarization of wealth. Capitalism has propelled us to great heights, but it doesn’t have to mean profit and wealth creation for a few at the expense of the country and the middle classes. It is time to reassess our lack of responsible government, crony capitalism, corporate socialism for the largest MNC’s and realize that our critical sectors are not sustainable and need to be pulled back to their entrepreneurial roots. Sustainable business applications according to the long term needs of the country and a government that is also responsible to the people are what is need at this time.

In the previous blog, A Call For The Transition To Renewable Energy  it was discussed that industrialized nations of the world will soon have to address that a world energy crisis driven by demand from developing countries is looming within the next 25 years. Fossil fuels alone will not be able to meet demand. The easier to extract surface sources are rapidly becoming exhausted requiring more difficult and environmentally damaging drilling and mining procedures that are both more time intensive and expensive. The increased costs of energy and potential shortages can create more geopolitical stresses between countries as they scramble to meet their energy demands. It is beyond time to ramp up existing renewable energy sources (biofuels, solar thermal, photovoltaics, wind, geothermal, tidal, and biomass) to supplement fossil fuels over the next 25 years while actively searching for long term, highly efficient energy systems to transition into beyond 2035.

The liquid fuel transportation sector is dominated by petroleum which is refined into gasoline, diesel, and jet fuel. The transition process in this sector would involve escalating biofuels production in order to supplement future petroleum demand. Cellulosic ethanol can be economically derived from gasification processes and will represent the most cost effective and efficient production means of ethanol production. It also doesn’t compete against food crops, requires much less water, and can be attained from a multitude of carbon based sources including the unusable residue from crops, natural fast growing grasses and plants, disposable wood from logging, and even human waste. Increasing the additive rates of ethanol in gasoline up to E30 (30% ethanol / 70% gasoline) and providing government subsidies for fuel line conversions will contribute significantly to mitigating demand and reduce the chance of rampant  price increases due to regional gas shortages.

Diesel fuel necessary for commercial transportation (large trucks and ships) can also be supplemented by biofuels, in this case utilizing bio-algae, jatropha, and halophytes to create bio-diesel.  Microbial organisms can be used during the processing to increase yield and refinement efficiencies and reduce costs. Diesel blends up to B30 (30% biodiesel / 70% petroldiesel) can be attained without major modification in fuel lines. World governments can then provide similar subsides for fuel line conversions to trucking and shipping fleets. Jet fuel blends can be supplemented with bio-algae; the U.S. military and some commercial airlines have already taken keen interest and developed prototypes for this application.  The goal is to supplement petroleum based diesel and jet fuels with biodiesel which will mitigate demand and reduce the chance of price increases in commercial transportation which adversely affects consumer goods pricing and airline ticket prices.

In addition, supplementing petroleum based fuels should be done in unison with the generation of new hybrid (gasoline/battery) or completely battery based automobiles and light truck production over the next 25 years. Battery technology and high capacitance systems need to be elevated in importance and additional government funding for research and development put in place to provide economically viable batteries and ultra capacitors with greater yields and longer life capabilities. If necessary the patents held by the fossil fuel and aerospace defense industries need to be made available for public use instead of being put on ice as a potential threat of substitution to petroleum, or classified for military uses. Suitable battery technology may very well already exist but the public sector does not have access to it. Utilization of hybrid, battery, or high capacitance system will further reduce future demand for liquid petroleum fuels but will require increased demand in electricity production. Heavy trucks, trains, and ships used for commercial transportation require considerable power to move heavy loads. Battery and high capacitor systems are not currently able to provide adequate power to solely meet commercial transportation needs. They will be more reliant on hybrid systems and will require more energy from the biodiesel / petroldiesel blends than are required for cars and light trucks.

The unspoken and long term strategic goal of many developed countries appears to be to use up the petroleum resources of other countries while saving their own reserves for emergency or to sustain their countries liquid fuel needs decades from now.  This strategy needs to be scrapped and replaced with a new 25 year goal that includes drilling and refining the readily available global petroleum resources in combination with increases in cellulosic ethanol and biodiesel production, government subsidization for replacing fuel lines on existing personal and commercial vehicles,  and creating high efficiency hybrid, battery and high capacitance electric cars and light trucks for personal transportation, and hybrid biodiesel large trucks, trains and boats for commercial uses. Then by 2035, begin the process of transitioning into hydrogen fuel based transportation models for developed countries, while allowing undeveloped countries additional time to become petroleum independent. This means limiting expensive and risky deep water drilling rigs, shale extraction, and production of more oil refineries limited only to petroleum. All government subsidization for the petroleum sector should cease and be transferred to companies generating second (cellulosic ethanol), third (bioalgae), and fourth (high yield genetically modified plants combined with microbial catalysts) generation biofuels, and for the development of biofuel infrastructure. This would include refineries that can be utilized for both petroleum and biofuels.

Resistance from the very profitable petroleum sector will be considerable and OPEC nations will put up a strong fight even going so far as to temporarily drop oil prices in order to draw attention away from the need to transition to renewables and to save the petroleum industry’s future profitability. Excuses for why renewables are a panacea will flourish and will need to be set aside. Our next generation of automobiles may not run as fast, or have the same mileage capability, but they will be clean and reduce our reliance on a polluting fuel source that has created enough geo-political instabilities and wars already. This 100 year old technology is past its prime and the world is certainly capable of doing better. The reason fossil fuels have been held in place this long as our dominate source of energy is because of the massive profitability and wealth generation it provides for a small percentage of the world’s population and not for its current benefit to humanity.

The other half of the fossil fuel equation is electricity production which is provided by coal and natural gas. Electricity production actually requires more fossil fuels than the transportation sector and demand is projected to outpace petroleum and will be further increased by the need for hybrids, electric, and high capacitance vehicles all of which will draw additional power from the grid. The transition of this sector, over the next 25 years, should be a move towards the existing renewable energy sources of solar thermal, photovoltaic, wind, tidal, geothermal, and biomass facilities. Biomass which uses carbon based refuse (forestry, crop, animal, and industrial) and wastes (sewage and municipal solid) will be the only source that requires commodity based replenishment that could be subject to price fluctuations, but this resource will be derived from throw away material.  The transition process itself can begin with the removal of coal and natural gas subsidies and strict limitations on future coal or natural gas power plant production. One such limitation could require no more coal fired plants built without adjacent bio-algae photo bioreactors for algae based biodiesel production and CO2 sequestration. Instead, funds could be allocated to infrastructure development of large solar thermal, geothermal, tidal and wind generation systems. Subsidies should also be provided to business and homeowners to put photovoltaic arrays on their premises.  If regional electricity service providers heavily vested in coal and natural gas production want to continue as public electricity providers they will need to be required to build an increasing number of energy facilities that are completely renewable in nature. Some renewable energy plants are more expensive to construct than traditional coal and natural gas facilities, certainly the case for large solar thermal operations. However, over the 25 year life span of the facility the infrastructure costs become offset within a few years since there are no ongoing requirements for expensive and environmentally damaging drilling, mining, refining, and distribution expenses associated with acquiring oil, coal, and natural gas.  Renewable energy power plants will be cheaper for developed and developing countries in the long run, providing clean energy, and not require purchasing or extracting fossil fuel commodities from potential hostile countries.

Synergies exist between complimentary renewable energy sources and with existing fossil fuel sources. Large megawatt solar thermal facilities can be designed to provide power for cities, or smaller solar thermal power plants can be utilized for neighborhood or suburb electricity generation.  Residential and commercial photovoltaic arrays with government subsidies to assist business and resident affordability can be utilized in conjunction with solar thermal (or other renewable energy sources) to help reduce the regions demand. Solar thermal, geothermal, and wind farms can share space with bio-algae photo bioreactors (PBR’s) to reduce land costs and reduce space requirements.  Biofuels can be generated from sewage, waste material, food crop residue, and wood residues creating fuel sources from material that would otherwise be burned or sent to landfills. Fast growing and drought resistant plants requiring little irrigation can be grown and harvested on lands unsuitable for crops and utilize husks, stovers, and other discardable material from traditional crop harvesting.  All existing coal fire and natural gas plants could have bio-algae PBR’s in place to absorb the CO2 that would otherwise be released into the atmosphere. In developed countries all new power plants should be renewable where possible and only natural gas if not. Coal plants should only be considered for poorer developing countries with large coal reserves.  

A new paradigm for worldwide renewable energy production can be implemented where profitability expectations are removed from future State owned and privately held renewable energy companies.  In countries with a private sector, existing renewable energy companies could be incentivized by their governments to switch to a strictly non-profit model. Another option is the creation of new private non-profit renewable energy companies with infrastructure development and scaling subsidies provided by their governments that would allow them to provide energy at lower costs to consumers and compete directly against for-profit renewable energy (and fossil fuel).  If full government subsidization is not possible then 0% infrastructure and scaling loans could be made available with repayment plans established that assure competitive energy pricing remains available to the public.  State owned energy companies with little incentive to eliminate their profit structure will still be able to provide energy indigenously and to the developing nations but in time will be hard press to remain competitive outside their own borders.

The goal of the non-profit renewable energy provider is to be able to produce and distribute electricity in the most efficient and low cost manner possible and to pass those savings onto their customers. It is also to provide energy sector jobs to replace those jobs lost from the fossil fuel industries.  Favorable government legislation and subsidization for private sector non-profits will be essential to ensure political barriers to entry are removed and to meet infrastructure costs and to develop economies of scale.  Subsidization can come from removing subsidies provided to very profitable oil, coal and natural gas companies and from tax revenues associated with providing clean energy. A non-profit model focused on efficiency and removing unnecessary expenses associated with pay for performance executive compensations, investor ROI expectations, profits for mining and drilling operations, costs related to exporting of fossil fuels, and short sighted profit maximizing decision making will be removed from the future energy equation.  I am not advocating government takeover of the western energy industry, but the establishment of true non-profit private companies in the free market economies. For already established state owned companies heavily vested in fossil fuels my hope is they will eventually operate under the same non-profit guidelines as they to transition towards renewable.  This should also decrease geo-political instability in certain regions of the world that use energy profits to sponsor terrorism or as funds to support military buildup and wars.

It is time for world governments especially those in developed countries with free market to start acting responsibly and considering its citizens. Energy is a basic requirement for all societies and the world has been limited to technology and policies that are outdated and no longer in its best interests. The question of how to pay for the transition to renewable energy is legitimate. Whether governments should increase taxes or use existing tax dollars to subsidize renewable energy infrastructure and provide assistance for companies to scale up production will be debate and heavily resisted from many channels. Interestingly enough, funding didn’t appear to difficult to acquire when it was necessary for bailing out irresponsible financial companies or providing massive subsidies to the ridiculously profitable fossil fuel industry. Fossil fuel based companies know they will eventually have to venture into the renewable market as oil, coal, and natural gas become to scarce or expensive. Why should the world wait until governments are near financial collapse due to high energy costs affecting nearly every sector of their economies, or countries are on the brink of war due to scarcity and conflicts over meeting demand?

Prior to 2035, world governments, academia, and even private sector labs should have been be utilized to search out the most promising energy sources with the greatest efficiencies that will meet the world’s long term energy needs. The push should be to develop free or extremely low cost energy systems such as fusion or kinetic systems for electricity production, and a hydrogen based fuel source for vehicles. We must begin this researching process and planning for this process now.

http://www.eia.doe.gov/oiaf/ieo/highlights.html

How is it that our scientists and technologies have created exponential growth in computing, super colliders, nano-technology, particle weaponry, world-wide satellite coverage, etc. and yet for energy production we are limiting ourselves to a polluting, 100+ year old technology that creates geo-political instability around the world and has most recently become subject to the whims of commodities traders?

Industrialized nations of the world will soon have to address that a world energy crisis driven by demand from developing countries is looming within the next 25 years. The bulk of the energy industry’s production motives which are dominated by fossil fuels and its obsession with profitability are not going to provide the solution for our upcoming energy problems. World energy producers have become very efficient at extracting, processing, refining, and distributing petroleum for transportation liquid fuels, and coal / natural gas for electricity production. However, production will not be able to keep pace with the growing world wide demand expected to rise almost 50% by 2035, much of that coming from the developing countries of China, India and in Southeast Asia. This is not a matter of peak oil or how much fossil fuel remains in the ground, but an issue of simple supply versus demand.

Fossil fuels have served our world’s growing energy needs extremely well, despite the fact that oil and coal use has been around since the turn of the 20^th century, but we are fast approaching the limits in improvements that can be expected from production capabilities. In addition, the easier to extract surface fossil fuel sources are rapidly becoming exhausted requiring more difficult and environmentally damaging drilling and mining procedures that are both more time intensive and expensive. The increased costs will be passed on to end users and when combined with potential shortages will create stresses between countries scrambling to meet their own energy demands,  this may even include going to war to guarantee energy  stability. This scenario can be further complicated by fossil fuel commodities traders who take advantage of regional problems to run up prices. This is an excellent formula for State owned or privately held oil companies interested in ensuring ongoing profits for decades, but not for the rest of the world.

There is also the matter that the regions containing fossil fuels are not only proving to be environmentally difficult to work in but geo-politically hostile as well. Many countries rich in fossil fuels (ie. Middle East and African countries) also divert funds to groups and organizations that sponsor regional unrest and acts of terrorism or can use earnings to build up military capacity and develop weapons of mass destruction.

We are fast running out of time to seriously implement existing renewable energy sources (biofuels, solar thermal, photovoltaics, wind, geothermal, tidal, and biomass) as a supplement to fossil fuels over the next 25 years while actively searching for long term, highly efficient energy systems to transition into beyond 2035. The industrialized countries of the world and their private or state owned energy companies are going to have to set aside their fossil fuel based profitability expectations for energy production and begin thinking in terms of transitioning. This will not be done willingly, these companies and their holdings represent significant infrastructure investments and they are cash cows, in many cases representing the only significant source of income for the region. In countries with capitalism based economies the lobbying stranglehold the fossil fuel industry holds over energy legislation will need to be removed, and campaign contributions that help elect sympathetic representatives curtailed if there is to be any significant infrastructure support from those governments.

This process will have to be driven from the free market economies since State owned companies with large oil reserves will have little incentive to transition on their own since they can meet their domestic demand, and fossil fuels represents a substantial income source for the country and they will profit off of the projected 84% expected increase in demand from developing countries over the next 25 years. This sharp increase in demand will be buffered by developing countries themselves as S. America, China and India are currently taking their own measures to implement renewable energy sources realizing their own vulnerabilities. Even if these developing countries begin the transition process to renewable energy sources, State owned companies will be needed to fill the remaining projected demand. Privately held companies in the U.S., Canada and Europe can then be utilized to meet remaining 16% growth expectation from the developed countries with fossil fuels and renewables.

Existing renewable energy processes need to become more efficient and costs brought down through economies of scale. The purpose for expansion of these renewable sources is to increasingly supplement fossil fuels over the next 25 years.  This must become mandated. In addition, new technologies and system improvements investigated and existing patents that have been shelved to protect fossil fuels from competition should be re-evaluated. Their feasibility and economic viability analyzed, and those with satisfactory efficiencies implemented. World governments cannot immediately dump existing fossil fuel systems since renewable capacity falls far short of meeting demand. In addition, current levels of debt among industrialized countries are already to burdensome due to the irresponsible behaviors of governments and their financial leaders to sufficiently generate new infrastructure in a timely enough manner. We can however begin to aggressively supplement fossil fuels consumption with renewable energy sources in the industrialized worlds. This will allow the poorer developing countries to continue to use predominately fossil fuel sources while they implement renewable energy infrastructure themselves. This may require years of transitioning so it must begin now.

World energy demand can become as significant an issue as the 2008 world wide collapse of the financial markets and generate long term recessions. I would like to emphasize this point once again; regardless of how world fossil fuel producers try to ramp up production they cannot meet global demand. For the transition period over the next 25 years we must utilize all sources of energy and start the process of relinquishing the political stranglehold that the fossil fuel industry holds in the political arenas.

By 2035 renewable energy sources should play significant role supplementing fossil fuels and contributing towards global demand. During this transition period research and development initiatives from world government’s, academia’s, and even government funded and private sector laboratories’ should be utilized to search for new energy sources and refine existing systems for still greater efficiencies. Possibilities for new energy systems include hydrogen, advance fuel cells, new battery or high efficiency capacitors for transportation requirements, and fusion reactors and kinetic energy systems combined with advancements in solar, geothermal, wind and tidal power for electricity generation. 

The goal after 2035 is not to supplement fossil fuels but replace them. The motivation to look for energy systems that provide ongoing streams of company profits and investor return will have to be put aside and a new generation of non-profit energy providers created. Profit maximization will then be replaced with production efficiency and providing free or extremely low cost energy to end users. Research for these next generations of renewable energy systems must begin now with long term plans designed for the transition.

My next blog will discuss procedures necessary to implement the transition process to renewable energy sources in both the transportation and electricity production sectors.

http://www.eia.doe.gov/oiaf/ieo/highlights.html