The End Of The Consumption Economy?

A few weeks ago, I watched a presentation from The Business of Climate Change conference wherein Jeff Rubin (@jeffrubin) articulated with compelling, if anecdotal, evidence that we are going to see $200 / barrel oil and $7/gallon gasoline within the next 12-18 months. Watch the video below:


I don't spend a lot of time studying the oil market, but Jeff Rubin does. Additionally, he has some pretty serious street cred in terms of calling past volatility in the marketplace. He was one of the first economists to predict the last oil spike and it's ramifications. I found several really interesting points to consider in this video:

1. The current global recession has more to do with oil than with the mortgage crisis in the US. Countries around the world were in recession long before the US mortgage market imploded.
   
2. The coming oil price spike will force us to start making very hard choices about where we live. Mr. Rubin predicts the end of the suburb, as an example, because people will no longer be able to afford to drive. These vast suburban wastelands will be converted back to ground that can be farmed and produce food.
   
3. The current economy, built primarily on our proclivity to consume, is about to come crashing down around us, and will be replaced by a newly energized production economy, where we begin to make all of our own stuff again. He predicts the end of the cheap TV and other consumer goods from China, the end of cheap food from South America and so on, primarily because the cost of fuel to move goods around the world will make those goods too expensive.

It all sounds a bit far-fetched when you first listen to it. C'mon Jeff, we aren't really going to park our cars in our driveways, not be able to live an hour from where we work, produce our own food, and start caring about fixing things rather than replacing them! That sounds like a return to the early part of the 20th century. We are supposed to be moving forward, not backward.

On the other hand, there are already a number of signs that indicate that we could be headed back to a production economy. Remember what happened when gas went to $4? We all drove less, lots of people that had to drive scrambled to find hybrid cars, and people started to find ways to live differently. Some examples:

• Telecommuting into work spiked massively during the period of $4 gas
• People started growing their own food
• People went out to eat less
• People bought less because they spent more times in their home.

It is not hard to imagine that if gas really does go to $7 / gallon that our behavior would be affected even more radically. Additionally, in the last edition of Fortune magazine, there was an article about a project underway in urban Detroit to convert a large part of the city that is currently unused to an urban agricultural area. But that's Detroit, you say! That would never happen in my particular slice of heaven. Don't be so sure.

It is interesting to think about the changes that might come about in a world of $7 gas. The short-term inflationary effect on the economy would be staggering. But, I am not so sure that the long term effects would be all negative. You might not be able to get a box of pretzels the size of your car at Wal-Mart for $2, but you might grow your own tomatoes and eat better. You might actually live somewhere where you can walk to almost everything you need. You might focus on creating something that has real value, rather than just working to make enough money to afford the lifestyle you think you need.

We chose to live where we live because it affords us the opportunity to work from our home, educate our kids from our home ( more on that in the coming weeks ), walk to everything we need, grow our own food on a small scale, and live a pretty decent life without HAVING to drive. We still drive everywhere of course, but it's because we can afford to.

Do you think Jeff Rubin is right, and if so, what would it change about how you live?

I Am An Addict, I Wish I Had Not Lived In The Drug Era - A Rant

In the last week, two prominent athletes who were known for their invincibility, strength and will to win have copped to playing the victim card to try and escape the harsh reality that they have failed not only themselves but inflicted severe collateral damage on those around them.

We all know about Tiger Woods. He of the menacing glare and unmatched ability to demoralize opponents through mental toughness. Are we really to believe that someone of his supposed mental strength is a "sex addict?" Come on, Tiger. I am sorry ( not really ) that you are losing sponsorships, I am sorry ( not really ) that you are losing millions of dollars, and I am sorry ( not really ) that you are publicly shamed. But, the only victims here are your family whom you publicly disgraced with your uncontrolled appetite for the ladies, and your wife in particular whom you could have exposed to life-altering disease. Don't call it an addiction. You demean the true meaning of the word for those that have real problems.

Last night I listened to Mark McGwire lay his soul bare regarding his use of performance-enhancing drugs during his career, and more specifically the season in which he broke Major League Baseball's home run record. He apologized to everyone under the sun, including the Maris family, for cheating on his way to breaking the record. What really got me fired up was McGwire saying "I wish I had not played in the steroid era, and I wish there had been drug testing." Excuse me? Did the owner of the St Louis Cardinals, or Tony LaRussa, come to you and tell you that if you did not take these drugs, you would lose your job? Was there some coercion that you did not tell us about? Did your teammates hold you down and shove needles into your rear end? YOU ARE THE POSTER BOY FOR THE STEROID ERA! It existed because of what you did, in large part. You know what I would like to see, Mark? Step up to the microphone, tell everyone you cheated, and insist that your name be taken off of all record books, and remove yourself from consideration for the Hall of Fame. Be more of a man than Barry Bonds or Sammy Sosa, and just own it. Then go on with your life.

Am I way off base here?

Seth Godin - A Modern Day Howard Roark?

I just finished reading Seth Godin's new book, Linchpin, over the weekend. Maybe I am just looking for some way to bring Ayn Rand's Fountainhead into a discussion to sound really intellectual, but I found there to be a striking similarity to the messages contained in each book.

Mr. Godin's new book focuses on how to make yourself indispensable ( a linchpin ) in the current and future economy. The thesis is that the we have built a societal infrastructure to support the mindset of a factory worker, and that the factory worker is disappearing. Mr. Godin defines a factory as any company where the work can be automated, scripted or otherwise clearly defined. We have built schools that do not teach how to think, adapt, and create art, but rather conform to accepted norms. We build companies that enforce policies with thick manuals, have hiring processes that stress fitting to a position, and reward those that follow the company map.

What we need, in contrast, are people that are willing to embrace and create their own personal "art." Art, according to Mr. Godin, is not just music, paintings and other traditional forms, but also anything you do uniquely well. For example, my art form might be the ability to analyze situations and recommend best practices in software development projects. Or, it might be my ability to connect people to a movement or initiative. Whatever the unique gifting an individual possesses, Mr. Godin is imploring us to deploy it instead of taking the safe road already taken, the road that all of us are trained to take.

Here is where Howard Roark comes in, in my way of thinking. Howard Roark was an uncompromising artist. He was willing to build buildings his way, and only his way. He did not seek the approval of others, nor did he build based on the patterns of the past. He saw a piece of land, and built what he thought belonged there. He adapted each and every building to the current situation, with no reliance on past projects or societal norms. Every creation was unique. He was willing to destroy ( via extreme means ) work that was already done to ensure that it was done the way he wanted. It was craft for craft's sake. It was a gift.

Maybe it's an extreme analogy, and maybe I am fishing, but I think this is the essence of Mr. Godin's new book. We need to be willing to blow things up that are not working, that are not done the way we think they should be. We need to be willing to rebuild education, companies and other organizations in a way that rewards the creative forces in each of us. We, as people that create, need to be willing to invest and to give of ourselves with no expectation of reciprocity. If we create something that is of value, the ability to earn a living because of it will be there.

There is a whole section of the book on why we resist taking chances, and why we love maps. It is worth a read unto itself, and I would not do it justice in a review.

I really enjoyed the book, and found it to be both inspiring and practical. It is not a "how to remake yourself in three easy steps" type of message, but rather a call to arms. The days of being average and mediocre are quickly disappearing, so start creating your own map now. Become indispensable.

The Challenge - Live In The Present

How many of us actually live one day at a time? I am not talking about the irresponsible notion of not planning and accounting for the possibility of tomorrow, but I mean living today like it is the only day that matters?

I was reading this morning in Pascal's Penseé #47, which says:

"We never keep to the present. We recall the past; we anticipate the future as if we have found it too slow in coming and were trying to hurry it up, or we recall the past as if to stay its too rapid flight. We are so unwise that we wander about in times that do not belong to us, and do not think of the only one that does; so vain that we dream of times that are not and blindly flee the only one that is...

Let each of us examine his thoughts; he will find them wholly concerned with the past or the future. We almost never think of the present, and if we do think of it, it is only to see what light it throws on our plans for the future. The present is never our end. The past and the present are our means, the future alone our end. Thus we never actually live, but hope to live, and since we are planning how to be happy, it is inevitable that we should never be so."

If the present is all you have, does it change how you make decisions? Does it mean that you are reckless and don't plan for the future?

For me, I think this means doing something important every day. I read an anecdote from Steve Jobs a while back where he says he asks himself every morning if the work he is getting ready to do that day is important. If it isn't, he adapts and changes to ensure he does not string together multiple days of doing things that don't matter.

I am not sure I fully grasp the concept of living only in the present. As part of my More And Less List for this year, I hope to get closer to what this actually means.

What do you think it means to live in the present? Is that a good thing or a bad thing?

For Twenty Ten - More And Less

I have spent some of this Christmas season doing something I have wanted to do for a long time. I have been getting all of our home movies off of my ( now ) ancient Hi 8 tapes and onto my computer. It has been fun learning about making my own movies and messing around with iMovie.

What was unexpected ( at least for me ) was the slug in the gut I have been getting every time I put in a new tape. I have watched video in the last 24 hours that I have not watched in seven or eight years of my kids early Christmases, their preschool graduations, and other really fun stuff. It has made me realize that while I have been sweating about how and when to do the next thing, the time has been flying by at a pace that even I did not recognize. As the saying goes, "The days go on forever, but the years fly by." I found this video by Gretchen Rubin this morning while catching up on Twitter.

I have been thinking the last few days about what I can do to make sure I make the most of my own personal blip of time. I came up with this idea of a More and Less List. I have never done New Year's resolutions, and I like to think of this as something more than that, whether it really is or not. If it resonates with you as a way to express where you want to head in your own life, add your own list to the comments below. I intend to use these bullet points as the guideposts for my decisions this year, and write consistently about whether I am passing or failing.

With that, I present my More And Less List for 2010:

• More doing, less talking about doing
• More time with people I want to spend time with, less time with people I don't
• More thinking about impacting the world, less thinking about impacting myself
  
• More seeing the world, less seeing the inside of my house.
• More in the moment, less in the future and even less in the past
• More gratitude, less complaining
• More appreciation for what I have, less hand-wringing about what I don't have and what that means.
• More energy, less fatigue
• More big, less small
  

What are your Mores and Lesses for 2010?

Here's to a life-altering 2010.