Tuesday, November 09, 2010

What About 2012? Is There a Disaster Waiting to Happen?

Apocalypse 2012
Thursday, December 2, 2010 at 9 pm on CBC-TV
December 21, 2012 - disaster will strike the planet. The world, as we know it, will end. That is what many people, millions of web sites and international doomsday entrepreneurs predict. Written, produced and directed by award-winning documentarian Cynthia Banks, Apocalypse 2012 presents the leaders, chroniclers, debunkers and the businessmen of this wide-spread certainty of a global cataclysm.
Apocalypse 2012 follows people trying to protect themselves and others from what they believe is coming. Sure we’ve seen a lot of this before. But what’s different and fascinating about all these predictions is that doomsday fear is moving into the mainstream culture at a remarkable scary pace. Apocalypse 2012 examines why this particular doomsday has become so significant.
Developer Larry Hall is converting an Atlas F missile base in Kansas into a heavily-guarded, fully-furnished underground luxury condominium shelter. Half a floor goes for $900,00 (US). Belgian author Patrick Geryl thinks anyone underground will be destroyed so he is building his community’s dwellings on the highest mountain in Spain. Dennis McClung, founder of the world’s largest 2012 supply web-site, rejects the notion that he is a fear-monger preferring to see himself as a supplier of the tools of self-reliance. Visitors from the U.S., India, Australia and Canada can cause McCung’s site to spike at 150,000 hits per day. George Noory is the host of Coast to Coast, the most popular late night radio show in North America, He focuses on 2012 regularly and to an increasingly receptive audience. With the motto: be prepared, not scared, Noory promises to be live on-air on the fateful night. Coast to Coast is carried by stations in 50 American states and five Canadian provinces.
The ancient Mayan Long Count Calendar is the source of the doomsday prophecy but it is our current environment of perceived deadly threats of solar disruption, coupled with almost instant international communications that feeds the movement. According to psychologists, archaeologists and scientists, the idea of an apocalypse reflects and magnifies the turmoil and distress of our uncertain times.
At the NASA Space Agency, Dr. David Morrison replies to daily emails from people suffering anxiety about December, 2012. What will happen? The mythical planet called Nibiru will crash into earth. Or, solar flares will scorch the earth. Or, the magnetic poles will flip or switch. Worried survivalists are convinced that resulting landslides, volcanoes and tidal waves will cut off power and threaten the food supply. Morrison dismisses these theories but not the people who believe them. Lorne Dawson, Professor of Sociology and Religious Studies at the University of Waterloo, says, ‘we live in a very apocalyptic culture because (people) want the cathartic experience of watching the few heroic figures struggle to survive the circumstance.”
What are you doing on December 21, 2012?
Peter Gersten contemplating 'Leap of Faith' off Bell Rock, Arizona, U.S. He believes if he jumps into a portal on December 21, 2012, he'll save the world.
Photo Credit: Gordon Bowbrick
Think this economy is bad? Wait for 2012.
By Greg Ip
Sunday, October 24, 2010; B03
We're barely two years past the banking crisis, still weathering the mortgage crisis and nervously watching Europe struggle with its sovereign debt crisis. Yet every economic seer has a favorite prediction about what part of the economy the next crisis will come from: Municipal bonds? Hedge funds? Derivatives? The federal debt?
I, for one, have no idea what will cause the next economic disaster. But I do have an idea of when it will begin: 2012.
Yes, an election year. Economic crises have a habit of erupting just when politicians face the voters. The reason is simple: They are born of long-festering problems such as lax lending, excessive deficits or an overvalued currency, and these are precisely the sort of problems that politicians try to ignore, hide or even double down on during campaign season, hoping to delay the reckoning until after the polls close or a new government takes office. Perversely, this only worsens the underlying imbalances, making the mess worse and the cost to the economy -- in lost income and jobs -- much higher.
Election-year prevarication has a storied history in the United States. In the summer of 1971, President Richard Nixon imposed wage and price controls in hopes of suppressing inflation pressure until after the 1972 election. He succeeded, but the result was even worse inflation in 1973 and a deep recession starting that fall.
During the 1988 presidential campaign, Vice President George H.W. Bush and Democratic nominee Michael Dukakis largely ignored the mounting losses in the nation's insolvent thrifts for fear of admitting to taxpayers the price of cleaning them up. The delay allowed the losses and the price tag to grow, and the burden of bad loans hamstrung the economy into the early 1990s.
Go back to 1932 for an even more dramatic example: After defeating Herbert Hoover that year, Franklin D. Roosevelt refused during the four-month transition to say whether he'd support the lame-duck administration's policy for fixing the banks and keeping the dollar linked to gold. Depositors fled banks and investors dumped the dollar, resulting in another wave of bank failures that vastly worsened the Depression.
But perhaps the most poignant example of election-year myopia came in 2008. After agreeing to an ad hoc bailout of Bear Stearns that March, then-Treasury Secretary Henry Paulson knew he needed authority and money to deal with such situations. But he didn't ask Congress for either, reasoning that lawmakers would never approve something so contentious just months from a presidential election. (He was probably right.) So when Lehman Brothers foundered that fall, Paulson, with no orderly way to wind the company down, let it fail.
He then proposed the Troubled Assets Relief Program to deal with the resulting chaos, but the House, gripped by an election-year aversion to bailouts, voted it down. The defeat sent markets into a tailspin. Lawmakers changed their minds and passed the TARP, but the intervening panic worsened the economic pain.
Elections are even more of a trigger for crises in other countries. When Greece's national election campaign began in September 2009, the government claimed that the budget deficit was more than 6 percent of gross domestic product, high but manageable. Yet shortly after the socialist government took power, it revealed that the deficit was in fact closer to 12.5 percent. The previous government, it turned out, had been issuing optimistic forecasts and hiding some of its spending. As foreign investors' confidence in Greece evaporated, interest rates on its debt soared. To avoid default, it was forced to seek a bailout from the International Monetary Fund and the European Union. The Greek economy will probably shrink at least 3 percent both this year and next.
Mexico's financial crises regularly coincide with presidential elections. In early 1982, the government knew that its deficit was too large and that its currency was overvalued. Investors were pulling their money out, draining the nation's foreign currency reserves. Government officials hoped to postpone action until after the July election, and the Federal Reserve helped by making short-term dollar loans to Mexico designed solely to make its reserves appear larger.
"We were trying to buy time until the election and new government. We failed," recalls Ted Truman, a Fed official at the time. Money continued to flee, and a month after the election, Mexico announced it couldn't repay its bank loans, triggering the Latin American debt crisis, a severe recession and what many called the region's "lost decade."
A similar dynamic brought on Mexico's election-year "tequila crisis" of 1994, which forced a massive and sudden devaluation of the peso and required tens of billions of dollars in international assistance.
Even when a government tries to do the right thing, electoral politics make it difficult. During the 1997 Asian financial crisis, South Korea negotiated a $55 billion loan from the International Monetary Fund, the World Bank and others to avoid defaulting on its private bank loans; in return, it promised reforms such as closing weak banks. But confidence evaporated and the currency plunged when the leading opposition candidate in that year's presidential election attacked the agreement.
A similar situation occurred in the election to succeed Brazil's President Fernando Henrique Cardoso, who had brought stability to his country during the 1990s after decades of inflation and default. When it became apparent that his handpicked successor would lose in 2002 to leftist challenger Luiz Inácio Lula da Silva, Brazil's stock markets and currency plunged, and the government lost the ability to issue long-term bonds. Inflation and interest rates shot up, hammering the economy.
These countries actually offer an uplifting lesson: The damage wrought by the crises helped build support for solutions. In Korea in 1997 and Brazil in 2002, populist challengers ultimately embraced their predecessors' reform plans. Greece's socialists campaigned last year promising to raise public salaries, invest in infrastructure and help small businesses. But they are now undertaking painful reforms, such as raising retirement ages and injecting more competition into protected industries such as trucking.
Of course, these countries are relatively young democracies with legacies of economic mismanagement. It couldn't happen here anymore, right? Think again. Yes, this year the United States passed the sweeping Dodd-Frank Act, seeking to make financial crises a thing of the past. But there are countless problems that can develop into disasters (think Foreclosure-Gate). And Dodd-Frank is useless if the next crisis involves our tattered government finances.
Which brings us to 2012

Let me take a stab at what the next crisis will be. Our deficit, as a share of GDP, is at a peacetime record, and the debt is climbing toward a post-World War II record. Thoughtful economists agree on the response: Combine stimulus for our fragile economy now with a plan to slash the deficit and stabilize the debt when the recovery is more entrenched.
Yet the approaching November midterms have made it impossible to advance a serious proposal for doing that. Congress has been unable to pass a budget, and the government is operating on a short-term "continuing resolution." President Obama's plan for reining in the national debt consists of appointing a bipartisan commission that won't report until after the midterms. Even if the commission can agree on a realistic plan to chop the deficit, the polarized state of Congress suggests slim odds of adoption.
With neither party able to muster the support to get serious about reducing the deficit, both may prefer to kick the problem down the road to after 2012, in hopes that the election hands one of them a clear mandate.
For now, there's enough risk of Japanese-style stagnation and deflation that U.S. interest rates could remain very low for a while yet. But if that risk fades, investors in U.S. Treasury bonds will want to know how we'll get our deficits and debt under control -- and could demand higher interest rates to compensate for the uncertainty. By then, though, the 2012 campaign may be upon us. The Republican nominee will assail Obama's fiscal record and promise a determined assault on the debt. Obama will respond by blaming George W. Bush and promising to unveil his own plan once he's reelected. Neither will commit political suicide by specifying which taxes they'll raise or which entitlements they'll cut.
Will investors trust them, or will they start to worry that the endgame is either inflation or default, two tried-and-true ways other countries have escaped their debts? If it's the latter, we'll face a vicious circle of rising interest rates and budget deficits, squeezing the economy and potentially forcing abrupt and painful austerity measures.
And if, instead, the markets continue to give us the benefit of the doubt, relieving our politicians of the need to act: Circle 2016 on your calendar.
Greg Ip is U.S. economics editor of the Economist and the author of "The Little Book of Economics: How the Economy Works in the Real World."



Dire warning: U.S. unprepared for massive solar flare storm; could lose power, communications
By Sherry Mazzocchi
Daily News Writer
Wednesday, June 23rd 2010
It may sound like the premise for the next Michael Bay, big-budget action extravaganza -- but scientists say a storm from space could change life on Earth as we know it.
And the United States is woefully unprepared for such a disaster, according to a new report.
The potential threat, detailed in a National Academy of Sciences, Severe Space Weather Events report, said radiation bombarding the planet from powerful solar flares could result in the loss of power, water and communications on a global scale.
"It's very likely in the next 10 years that we will have some impact like that described in the National Academy report," Dr. Richard Fisher, director of NASA's heliophysics division, told the Daily News. "Although I don't know to what degree."
Fisher explained that the sun works on an 11-year cycle, and is now emerging from its quiet period.
The next phase -- the solar maximum -- lasts from 2012 to 2015. During this period of time, massive solar flares and coronal mass ejections (CMEs) can occur which could be strong enough to knock out satellites, disable high-voltage transformers, and cripple communications worldwide.
Doug Biesecker, top solar physicist at the National Oceanic and Atmospheric Administration (NOAA), told the News severe solar storms have occurred in the past. The strongest was in 1859, and rendered telegraph machines useless. Another slightly smaller geomagnetic storm occurred in 1921.
"If the 1921 storm happened today, it would knock out power from Maine to Georgia," Biesecker said. It would affect "130 million people and 350 transformers."
Transformers, he noted, can take over a year to fix and are not made in the U.S.
"This raises all kinds of geopolitical issues," said John Kappenman, a principal of Storm Analysis Consultants and the lead technical expert for a study conducted by the Metatech Corp. on the potential impact of solar storms.
"If the blackout affected more than one country, the U.S. would not necessarily be the first in line to get one," he said, noting that transformers are made in Europe, Brazil, China and India.
In addition, it would take a well-trained crew to install new transformers, which weigh more than 100 tons and would need to be shipped via ocean liners.
Just getting them here "could drag on for several weeks if the transportation sector is compromised," Kappenman said.
Unlike a hurricane, Kappenman said the aftermath of a solar storm could be widespread, with 50% to 75% of the country affected. "We could have a blackout like never before," he said. It took only a few days to get back to normal after the 1977 or 2003 blackouts. "This time, you might not get back to normal at all."
There would also likely be no immediate help from neighboring areas, and big cities such as New York would be hit especially hard "You couldn't evacuate," he said. "Where do you put 8 million people?"
A severe blackout would have rapidly deteriorating effects. Without electricity, there would be a loss of potable water and the ability to pump sewage. Perishable food and medication would be lost.
"There are one million type 1 diabetes sufferers in the U.S.," he said. "Health issues would emerge in just a matter of days."
Telecommunications have a backup for about 72 hours before they degrade. Similarly, hospitals have about
a week's worth of backup power. Nuclear reactors typically have a week of standby diesel fuel. Even if they shut down, they still require electricity to circulate cooling water through the reactor. "This could be a serious problem for 70 or so large reactors," Kappenman said.
"We obsess over oil," said Kappenman, "but electricity is twice as important."
An even a smaller storm could still wreak havoc. GPS satellites are particularly vulnerable to solar flares. Loss of a satellite could lead to problems with airline flights and communications. Computer systems measure time using GPS.
Oil rigs use GPS and water jets to maintain their offshore position as they drill. "They could drop off," said Biesecker, "and break a pipe."
"CMEs are like high-energy electromagnetic pulses [HEMP]," he explained. The use of HEMP - its force equivalent to an atomic bomb - by terrorists was the subject of a recent congressional hearing in Washington. "FEMA and other organizations are also looking at what a possible terror attack could do to the grid," he noted.
On June 10, the House of Representatives unanimously passed the Grid Reliability and Infrastructure Defense Act. It amends the Federal Power Act to protect the nation's power system against "cybersecurity and other threats and vulnerabilities." A similar bill has yet to be taken up by the Senate.