So far, energy costs have not been central either to the analysis of our current Great Recession or of the recovery now struggling to announce itself.

This article in London’s Guardian pushes the cost of oil back to center stage.  The news: the US government during the Bush administration (should we call it the Cheney-Bush administration?) apparently lobbied the International Energy Agency to underplay peak oil.  Result: IEA estimates show unlikely growth in oil production.  Note how much the forecast production relies on sources not yet known.

We’re not going to have to wait long.  As energy demand grows with economic recovery oil prices will climb, maybe into the stratosphere.

One more reason to expect an “L” of a recovery, one more reason for very cautious government budgets.

Update: study that chart for a minute.  Imagine what happens to us if the ‘not yets’ are not found.  We’re in for hard times soon.

Here’s another ‘tells the whole story’ chart.

Household income, in constant dollars, is now lower than it was ten years ago!

And if we look ahead, the prospects don’t look so good for the next 5 -10 years.  Why?  Un- and under-employment will stay high, meaning incomes will be low.  Our huge federal deficits & debt will depress the economy and hurt buying power.  Our education system is way under performing, meaning large swaths of our citizens have lower earning power.

Not a pretty picture.  Goverment budget writers take heed.

Writing in the prestigious New England Journal of Medicine, two doctors say the current health care reform bills do not do enough for cost control.  They propose an all-payer regulation strategy.  The full text of their short article is below the jump.  The spine of their argument:

Successful health care reform requires effective control of health care spending - without it, rising costs will continue to strain federal and state budgets, businesses, and families, jeopardizing gains in insurance coverage. The reform legislation now before Congress, however, cannot be relied on to control spending.

…

The missing link in reform legislation, then, is any mechanism with the potential for systemwide control of medical spending. One straightforward way to achieve that goal would be to adopt a single-payer plan - but that would displace the private insurance industry and remains politically infeasible.

There is, however, another option that could control spending across both the public and private insurance pools. Other countries that have multiple insurers, such as Germany, Japan, and the Netherlands, use all-payer regulation to control costs. In these countries, insurers come together to negotiate, or the government takes the lead in setting, common payment rules for medical care. With a few exceptions, payments to all doctors in a given geographic area follow a standard fee schedule. Hospitals are also paid on comparable terms.

They see 4 advantages: lower overall costs, less cost shifting, simplicity, and successful coexistence of public and private plans — advantages which ought to appeal to business, citizens and the health care industry alike.   Good thinking, definitely worth considering.  Click below to read the whole article.

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The New York Times carries this chart:

Doesn’t leave much doubt about how import health care cost control is, does it?

fear & anger aplenty

History has plenty of examples of radicalism arising in societies under stress.  A number of countries are showing signs: China, for example, where millions of workers are headed back to rural poverty as the estimable James Fallows reports from Beijing in The Atlantic.  Fallows notes that so far that the public outrage is directed toward corrupt local officials, not the governing regime which he expects to survive, even strengthen.

How about us here in America?  In The New Republic Walter Shapiro reviews the populist-extremist demagoguery of Huey Long (left) and Father Coughlin (right) during the Depression.  Shapiro finds reason to worry that we could see rage crowd into the political arena pushing aside the thoughtful politics we most need right now. One quote:

“What you’re seeing in the public right now is not anger but terror. They don’t know who to believe. They just know it’s bad.” [A pollster] adds, “The political system is still learning how to respond to an electorate that is terrified.”

WASHINGTON BUDGET How about here in WA?  We’re going to find out next week when we publish the first “all cuts” budgets.  I’m working to facilitate some serious dialog about priorities and strategies.  There will be lots to be unhappy about.  Will that turn to anger and paralysis or to creative reflection?  How can we help open the path to collective problem solving?