From the slack wire:
Sign of the times
Interesting milestone in 2008, according to the BEA. For the first time ever (well, at least since 1947) manufacturing was no longer the largest recipient of US nonresidential investment. The new champ? Mining. $216 billion in new fixed assets in mining (mostly in oil and gas extraction), and only $208 billion in manufacturing.
I don’t remember seeing this written about anywhere, but it seems like it should mean something.
That’s incredible. I never thought that these two were neck-and-neck at any point during my lifetime. If you were to take a completely random day, say December 11th, 2000, the day before Bush v. Gore was decided, you would note that we spend something like 5 times as much on manufacturing than mining. Let’s get a graph of this data set (click to enlarge):
Starting after 2000, we radically accelerated the amount of private fixed asset investment in oil and gas extraction in the United States. Two things:
1) What does this look like in practice? Can anyone recommend good journalism or energy financial analysts to read? This is a lot of money to spend and it feels like there was little in terms of fingerprints or discussion. I’m still reading what these numbers point to specifically, within the mining category especially. But if anyone who follows this knows good writing to explain how we’ve decided to become a third-world nation, changing from a nation that makes things to one where all our energy goes to getting resources out of the ground, I’d be happy to read it. How does this effect labor, or inequality? How does the overnight quality of this investment impact environments and communities?
2) Notice how the narrative of the BP disaster changes when viewed through this data. There’s the David Brooks narrative that “the real issue has to do with risk assessment. It has to do with the bloody crossroads where complex technical systems meet human psychology.” In this narrative, complex systems have always been with us, and as they increase in complexity the ability to detect and deter trail risk becomes increasingly more difficult.
But the data here tells a different story: in 2001 we decided to lift a lot of rules and a massive amount of resource extraction went into place in a very short time span. This was done with the privatization of regulation (deregulation). We thought that the capital markets would be enough to oversee this massive change in our resources and handle the risk appropriately, and we did it in a really short amount of time. Instead of an eternal problem facing human society, it’s about a small group getting power in the White House and shredding the laws, oversight and process concerning how our environment and private companies interact, no doubt making themselves rich in the process. Less Icarus, more Cheney. What does this hold for the future? Notice that the regulators were put into crony sleep mode exactly at the moment where they were most needed.