Red relations and green water

So what’s new in the world?

Big news: Theresa May says its time to repair relations with Russia. That’s sticking it to A LOT of people, here and especially in the US. How the UK right wing media, who’ve been dutifully following the neocon line these past years, will take it remains to be seen.

Little news: The Olympic diving pool in Rio turned soupy green overnight. Global warming? Bad plumbing? A spell?

Bad news: Trump ‘jokingly’ hints that good ol’ boys might exercise their gun rights to ‘stop’ Hillary. As The Donald is the candidate most likely to be ‘stopped’ that way by Dark Forces from deep in the state, it’s hardly a funny line. Anyway, everyone knows that Clinton couldn’t and wouldn’t do anything to upset gun owners.

Chew news: Dogs in Britain are getting less fertile for the same reason as Californian condors are. It’s their diet, which is increasingly laden with toxins from the environment. Who’s next? People? That’s what the stories are saying.

Painful news: A hospital in Lincolnshire may have to close its A&E at night. One in Liverpool is planning to stop routine operations and axe its IVF programme. Staffing and funds are at the root of the problems. Actually, that’s more or less the same thing. No money, no staff. No-one’s saying so but the hot money would have to be on PFI repayments sucking the life out of the Trusts running them. No wonder those shadowy financiers gratefully funnel so much money to Tony.

Saucy news: HP Sauce is the favourite brand of Brexit voters. They also like Bisto, Birds Eye, Cathedral City and Richmond sausages (is the last one a brand?). Remain voters like BBC.co.uk, iPlayer, Instagram, Spotify,  London Underground, AirBnB, Virgin Trains and EasyJet. Obvious conclusion: Brexiteers are salt of the earth types, though probably somewhat prone to body odour. Remainers are masochistic, narcissitic  metropolitanites with their heads in the Cloud. Less obvious conclusion: remainers’ brand choices are ”progressive, up to date, visionary, innovative, socially responsible [EasyJet???], intelligent.”  You’d never have guessed that the conclusions were drawn by a bunch of metropolitan ad-men and the story appeared on BBC.co.uk

Tippy-toes news: Will Young is the second celebrity to make the line up for Strictly Come Dancing. No, I don’t know what any of that means. Nor the name of the first celebrity.

Repent at leisure news: More than a third of recent graduates regret having gone to uni. Reason? A bucket-load of student debt to pay off (average £44,000) and jobs that give them an average monthly disposable income of £160. Funny how the media that’s endlessly cheered for universal student debt, sorry, degrees for all, is all of a sudden discovering what a complete crock Tony’s companion debt-wheeze to PFI was bound to turn into.

Quis custodiat? news: Yesterday all the stories were about the Competition and Markets Authority giving the banks a hearty slap over their treatment of customers. Today, everyone’s suddenly discovered that it amounts to little more than a loud ‘tut’. Needless to say, the job of policing banks’ better behaviour has been left with … the banks.

Who that? news: Charles W Sweeney. Now, if I’d written Paul Tibbett, people would have got it easily. Yesterday was the anniversary of the atomic bomb attack on Nagasaki. It would have been tomorrow but the weather forecast was apparently bad. Sweeney flew the plane –  whose name no-one remembers either.

Shouty Americans news: Trump is reckless and not qualified to be a US president, say republicans. Apparently that means he’s not a complete two-faced puppet of corporate interests who’ll go back on all his promises as soon as he’s elected. Anyway, aren’t all the Republican high-ups promising to vote for Hillary?

We’ll never hear the last of this news: Tesla driver gets chest pains. Puts car in ‘auto pilot’ mode and it drives him 20 miles to hospital. He’s treated for a dangerous blood clot. Fans of autonomous cars will be all over that one like a rash. Anyone want to give me £60k to buy a Tesla?

Turn back 10 pages news: Tomorrow’s graduates will be applying for jobs working in virtual worlds and outer space, according to ‘experts.’ Future careers will include Virtual Habitual Designers, Ethical Technology Advocates, Space Tour Guides (I kid you not, these people will “use their knowledge to construct visits to the more interesting parts of Earth’s orbit”), and Personal Content Curators. The latter will manage software-brain interfaces, organising thoughts and memories for fellow graduates who are too busy spending their meagre £160 monthly disposable income and worrying about their student debt to think for themselves.

Advertisements

Debt junkies pile in again

UK new car registrations hit a decade high in September. So everything is lovely on God’s green Earth and all is well with the Blessing of Material Progress bequeathed by Him unto His favourite experiment creation.

How does that work, you ask. Where are Brits getting the money from to go piling into car showrooms when the rest of the retail world, from mighty Tesco to the humblest corner store, is suffering enforced withdrawal from their spending habits?

The Society of Motor Manufacturers and Traders knows. It says:

“Demand for the new 64-plate has been boosted by intensifying confidence in the UK economy, with consumers attracted by a wide range of exciting, increasingly fuel-efficient, new cars.”

But watch out, children. Whenever you see the word ‘consumer’ you need to know that they mean ‘debt junkie’. The bit about the economy is irrelevant context, or what it is more commonly called ‘balls’. Nor are these consumer debt-magnets especially attracted by ‘exciting’ cars. Half of them couldn’t tell you their new ride’s engine capacity. The deal clincher is availability of finance. And who provides the loans? Well, it is the industry that makes the cars. It’s like getting a special offer on drugs from your local pusher.

Crazy though the banks are, though, they tend to draw the line at throwing money at total deadbeats. So traditional unsecured loans are off the table. Luckily, the Gummint has ways of diverting QE into the hands of zombies when the need arises. Ladies and gentlemen, we give you Payment Protection Insurance pay-outs – neatly gauged to match the average deposit on a new car from your friendly auto finance company (which gets the car back if when the borrower can’t keep up the payments).

But shouldn’t these poor folks be persuaded to do something more useful with the unexpected cash windfall they were cold-called relentlessly into accepting? Like pay off one of their credit cards or reduce their mortgage or pay down some of the kids’ tuition fee loans? Dream on suckers. The best they get is new guidelines from the financial authorities, which go something like this:

  1. Put on serious face
  2. Say: ‘You really can afford this, can’t you.’ (Tip: If you like, you can make it sound like a question)
  3. Point to the dotted line for them to sign on.

Meanwhile, deficits increase in spite of austerity. The NHS totters. The pension funds these mostly late-middle-aged auto buyers count on get shakier by the day. Oil’s insidious death spiral notches down again as falling prices chase decreasing affordability, killing-off investment in high-cost resources like shale and polar formations.

It’s sub prime all over again, tailored to an economy where mere mortals can’t even begin to think about playing the housing market. And it looks like it’ll end the same way as 2007.

Car-boom!

Yesterday’s Guardian G2 section led with the somewhat self-consciously juvenile word, ‘Vroom!’.

Subtitled ‘Why Britain can’t stop buying new cars‘, the cover story tried to answer why car sales are rising in the UK while stagnating everywhere else in Europe.

It provided a handy platform for assorted industry mouthpieces to congratulate Britons on being clever little consumers. Apparently we are becoming adept at signing personal leases and/or rushing into car dealerships to blow PPI payouts on deposits on car loans.

And to be fair, £69 a month for a brand new Skoda Citigo runaround isn’t a lot more than a his’n’hers iPhone/iPad contract. Assuming of course that you can chop your old car in for the £2,500 deposit.

And to be fairer than fair, the writer did ask some awkward questions. Why are fewer and fewer young people bothering to learn to drive? Why are annual mileages dropping?

Naturally, the industry came back with ready-prepared answers. Young people just need the right kind of ‘marketing’ to turn them back on to car ownership: cue ‘cool’ car ads that are so painful you want to stick needles in your eyes. Mileages are really falling only in London and the south east, because public transport is quite good there and executive-level company car users all use Skype or the phone these days.

To be honest, it all sounded rather defensive. The overall picture painted by the article was that of an industry whose existing customers are happy to use alternatives when they become available while potential new customers are increasingly disinclined, not to mention financially unable, to contemplate buying its products.

Cheap credit and the fact that Britain is not in the euro are behind this mini boom in UK car sales. The article pointed out that carmakers are assiduously pumping production into the UK to try to keep their factories humming as demand in the eurozone collapses.

The big risk to the UK car business is that it is storing up big problems further down the road. Sales are being bought expensively through wafer thin margins, heightened credit risks and discounts that end up depressing second values and thus hurting the all important fleet sector, which makes up half the market.

So the answer to the Guardian’s question appears to be: ‘Because British car buyers are easily-influenced novelty-seekers with an underdeveloped sense of consequences. Rather like four-year-olds.

A much more interesting question, which hopefully the Guardian will get round to investigating, is why so many Europeans have apparently broken themselves of the new car habit?

What do they see that we don’t?

University education: priceless or valueless?

One of the best things I’ve listened to in the past few days was Charles Hugh Smith talking about his new book, The Nearly Free University, on the Resilient Life podcast.

The costs of running universities and attending them have sky-rocketed since 2001, while the outcomes for most graduates are increasingly negative: a mountain of debt and often no conspicuous skills advantage over someone who went out to work at 18.

Hugh Smith addresses what he calls this ‘factory model’ of higher education, which seems finally about to implode under the pressure of its own, well, uselessness.

“In the good old days of the factory model, and I mean both the factory model in education and the factory model of production, you could get a degree in underwater basket weaving – or in my case, philosophy – and then you go work for an insurance company or some white-collar job in which whatever you were supposed to learn they would teach you on the job. So your degree literally was sort of like a stamp on a passport; you were not claiming to know anything of value to that business.

“Well, that worldview and that economy is dying. The idea that you can just show up and an employer is going to lavish a bunch of on-the-job training – that is no longer efficient for the employer. They want somebody that can produce value on Day One. We need to create and teach the value system that is needed in the real economy, and values, of course, are not taught at college at all.”

I can relate to that. Friends’ children are coming out of university with degrees in fashion design, creative writing and modern dance. The ‘lucky’ ones are working full time in the bar and hotel jobs they did at weekends before they went to Uni. Others are simply unemployed.

Given a few more years and several unpaid internships each, all of them will hopefully be in full-time work. But they will be, in their mid to late twenties, only where they would have been if they’d gone straight into jobs when they left school. The only winner was the higher education system.

Seeing my daughter getting swept into her school’s GCSE-A Level-Uni process like a leaf falling into a running gutter, I can see how hard it is for kids to imagine an alternative. Only three out of 50 A-level leavers from her school went into employment this year.

Meanwhile, one of her older cousins (history degree, Oxford) is slowly working his way up from a grunt job in NHS data management – formerly his holiday earner. His girlfriend (biochemistry degree, Oxford) is in teacher training after working for a year as a basic-waged teaching assistant. Between them, they have many tens of thousands of pounds of student loans to repay.

And those were real degree courses at on of the world’s best universities. Think of all the young people plodding through three years of glorified babysitting on courses cobbled together to take advantage of the loan system – sorry, cater for the ‘demand’ for degrees.

Another of my daughter’s cousins, also in his early 20s, has just bought his first house. But then he went into an apprenticeship at 16. Of course, he now has a hefty mortgage but so too, eventually, will the graduates … on top of their student loans.

One can argue that student debt is an investment in your future. Borrow now, earn more later. Charles Hugh Smith disagrees:

“Statistically, half of all recent college graduates have either no job at all or they are severely underemployed. This speaks to an enormous disconnect from the higher education system and the economy that it is supposed to be serving.”

“What is the pay-off for our society of saddling college students with a trillion dollars in debt? A huge study, one of the few that has actually tracked the results of a college education – like, how much do people learn in getting a four-year degree – … found roughly a third of all college graduates had no increase in critical thinking skills.

“Another third had marginal improvements in the kinds of skills that we would consider critical in what I call the emerging economy, the parts of the economy that are actually growing and expanding instead of shrivelling and fading.”

For the moment, the tide is still just about running in favour of the university cartel. But kids are catching on to the worthlessness of degrees that mean nothing to employers.

Hugh Smith proposes a combination of apprentice-style on-the-job skills training for work and employment, combined with online courses and tests to develop critical thinking ability. It’s the kind of fitter, cheaper alternative we need.

 

An evening of hypocrisy and moral cowardice in front of the gas fire

“It doesn’t take much to see that the problems of this little world don’t amount to a hill of beans to all these crazy people” – Collapsablanca

It’s Friday night and what John Michael Greer often calls ‘the predicament’ is in full swing over at the QuadRanting place.

Ma and Pa QuadRanting are sipping a chilled New Zealand white and nibbling pistachios. QuadRanting Jnr is watching YouTube on his tablet. He’s got headphones on but his helpless giggles keep cutting across Monty Don on BBC2, who’s looking ravishing in HD against the backdrop of a French millionaire’s recreation of a XVIIth century potager.

As it’s Friday, we’ve got the coal-effect gas fire on in addition to the central heating. And the wood/coal stove in the kitchen is still alight too – although to be fair, the stove is the only heater we use during daylight hours.

Cables and pipes radiate out from this cosy little scene to the Great Unsustainability Support Machine. For the avoidance of doubt on that subject, my role in the drama is to toggle my attention between Mr Don on the telly and the coffee table edition of the Post Carbon Institute’s “Energy – Overdevelopment and the Delusion of Endless Growth“, which is open on my lap.

A bit of context here. QuadRanting’s gross income puts us narrowly into the highest/luckiest/most spoilt or whatever you want to call it quintile of UK earners. It was not ever thus, though. No silver spoons in our family. Nevertheless, the chain of lucky accidents that began with where and when I was born has borne me blindly along, atop a rising tide of pillaged common natural inheritance, to the point half a century later where I’ve washed up amidst the most materially-privileged 2% or 3% of humanity.

One wonders what my great-grandfather – a Sierra Leone-born black slave in Ghana who bought his freedom from his local owner by joining first the British army in Accra and later the Navy, which brought him to England after a decade spent patrolling the Caribbean – would have thought of where his lineage was headed.

Fluke

Great-granddad was a fluke of history. Timing and chance as much as character and determination got him from up country Ghana to the East End of London, from where his children and grandchildren headed west and south to leafy middle class suburbs.

Of course the lifestyle now enjoyed by his descendants was equally a fluke of history. Seventeen years after he was born, the modern oil age began in Pennsylvania. Thirty years after he landed in London, Spindletop inaugurated the explosive draw-down of the Earth’s energy inheritance that brought us to where we are today.

Which is at or near some kind of epochal peak in human history. For I’m in complete agreement with the PCI, and James Howard Kunstler, Nicole Foss, JMG, Tullet Prebon, the New Economics Foundation and many others, that the curtain has come down on the era of turbocharged growth bookended by my great-grandfather and his great-great-grandchildren.

What’s left to us is weak growth. For a while anyway. And even that can’t last for long as declining net energy sucks us on to its inexorable glide path. Stasis isn’t an option either. It’s as if the laws of thermodynamics are having their revenge: we can’t win; we can’t break even, and we can’t get out of the game. The PCI’s coffee table tome bleakly exposes the incredible cost of maintaining the gigantism that underpins high-energy civilisation. That civilisation is a precondition of my way of life, as described up top, (which is materially affluent by UK standards but decidedly average by American ones).

One obvious question is what am I going to do about this? Well, nothing, obviously. But surely one should do something when one realises that humanity is skipping, twirling and limping up a deadly cul-de-sac?

My dear fellow, welcome to the predicament.

Around six years ago, when I was beginning my mental journey into the ramifications of peak oil, I saw a clip of Michael Ruppert urging an audience of college kids to get out of (or stop going further into) debt. We’d been paying down our mortgage faster than necessary anyway – because it seemed vaguely like a good thing to do. Peak oil awareness sank sharp teeth into the backside of our good intentions, so we boosted our efforts and got out 10 years early.

Backyard chickens

We already lived in a small country town but, even so, we put chickens in the garden for eggs and the table, and started growing more of our own fruit and veg. Resilience and community matter: we got stuck in and helped to prevent half the town’s small number of allotment gardens going under houses. I could go on.

According to chaos theory, any of those gestures could have been the butterfly’s wing-beat that set off a chain reaction that culminated in a hurricane that would sweep away all the rotten, fossil-fueled overgrowth threatening the planet. Quite a violent image, of course, and only really a charming little fantasy (though a surprisingly popular one).

What has actually happened? Six years on, another 400 million humans have been born. Complexity and energy-dependency have risen massively everywhere. The financial breakdown predicted and chronicled for the past five years at The Automatic Earth has already taken one massive lurch forward with the financial crisis and is now coasting on something of a false flat before the next great spasm.

Our civilisation is doing what all civilisations do: outgrowing its resource base and morphing into something else through a phase of unstable contraction. But as JMG and a few others keep trying to point out, it’s quite likely that the process will take hundreds of years to work itself out. Along the way, there are bound to be some pretty impressive moments – after all, ours is by an order of magnitude the hugest civilisation to reach this point.

Such a moment could hit us in the next six months, in a couple of years or not for another decade or more. Like markets that can behave irrationally for longer than investors can remain solvent, collapse can easily take its own sweet time. Much as I’d love to be the brave little boy holding his finger in the dyke until the cavalry arrives (gaily blowing mixed metaphors on their burnished bagpipes), realistically nothing I do will change anything, even though I kept on doing whatever it was for years.

The energy-waste economy

There’s you could call the Paradox of the Inflection Point. It’s about being the first to walk away from over-consumption. Phrases like “we all need to make do with less” abound in the peak oil-o-sphere and they are no less true for being endlessly repeated. But we need to remember a couple of things about overconsumption. One is that it is merely the flip side of overproduction. Focusing on consumption makes us feel as though we’re in control but the truth is that the most of the impetus is “push” from the production side. As long as small fraction of stuff makes a buck, the rest can go straight to landfill as long as there’s surplus energy to market the next ship load of waste

Walking away from over consumption (bearing in mind that even a modest Western lifestyle would overload the planet if every human lived it) solves nothing at an individual level. My individual decision to be more slowly wasteful than someone else has no measurable impact on the tar sands operation, or the rate of coal fired power station construction or the sales of new cars in the UK. It cannot affect the decision of a Brazilian rancher to clear x more hectares of forest because the touch-points between her and me are utterly tenuous.

I could go off grid, I could starve, I could die. It wouldn’t make an iota of difference to the big picture. In the 50-odd years since I was born, I’ve gone from being one two-and-a-half-billionth part of the human machine to one seven-billionth. I live like a king. I consume as much energy as 200 pre-industrial workers. Yet if my existence blinked out tomorrow, the future trajectory of history wouldn’t deviate by a micron.

Involuntary simplicity

The paradox is that if voluntary simplicity really did have societal, as opposed to individual or small-group, effects, then collapse would happen all the sooner. The involuntary simplicity being forced on nations from Greece to the UK and US, because oil is now too expensive to waste, is promoting descent at an increasingly smart pace.

So I sit in our comfortable, well-insulated, warm home with fast broadband. It is cold outside. The economy has begun its long term contraction. The great pensions collapse of the late 20-teens is gathering pace behind closed doors. We know what is happening and why. Surely I should be trying to do something. Make sacrifices. Cut back. Or get out and warn people that the world they’ve believed in for a lifetime is coming to an end.

What’s stopping me? Is it hypocrisy? Moral cowardice? Or is that there is really not a lot to be done. We’re in extreme overshoot as a species. Collapse is coming – probably catabolically. It cannot be avoided or realistically pre-empted. So I’m going to cross that bridge when it comes to me.

As it surely will.

The Ponzification of pension finance

Today’s Tory DailyGuff reports that the number of people paying into UK workplace pensions has fallen to its lowest level since 1953.

For some reason, the story makes the front page of the print edition but isn’t linked from any of the main sections of the web site. Nor does it show up if one searches the site for ‘pensions’. You have to search for James Hall, the writer, and look for the piece in his story list.

Anyway, it quotes Joanne Segars, the chief executive of the National Association of Pension Funds, who says:

“… squeezed household budgets and the weak economy mean that many people see a pension as a luxury rather than a necessity”.

Yes, having enough money to live on after you stop working is now a luxury. Better die before you get old.

Lost faith and trust

Ros Altman, director-general of the Saga over-50s group, puts it plainly:

…people are leaving pension schemes because they struggle to afford the monthly payment.

“People have lost faith and trust in pensions. It is clear that workers are valuing pensions less and less, and companies are offering them less and less.”

Paying into a pension calls for tons of faith and trust by the payer. The biggest leap of faith is to believe that the fund managers will be able to earn 8% or more on their investments. Because the fund won’t pay out anything like what was promised if they don’t.

Eight per cent? Year in and year out when central bank interest rates are negative and the US, EU, UK and Japan are printing money like mad? Ha bloody ha.

No safe investments

One of the primary drivers of the great financial meltdown was the banks’ need to dress up massively risky derivative bets and subprime loans as ‘safe’ enough for pension funds to buy. Sure they reeked of rotting offal but, as long as they were unaccountably rated Triple-A, the institutions happily loaded up with these investments. They were the only way of getting the notional returns they need.

Worse, the banks then sold them ‘super safe’ Credit Default Swaps that also promised high returns as long as the debts the funds were insuring through these CDS didn’t go bad.

But they did go very bad. Now the funds aren’t able to make returns, aren’t able to recruit workers and are still technically on the hook for billions of pounds if they have to honour the CDS.

None of this is news to readers of The Automatic EarthEconomic Undertow or Jim Kunstler’s blog but even the least-switched-on punter can’t help detecting the aura of unreality and desperation that surrounds the whole business.

Goodies to insiders

The pensions industry obviously realises that its only remaining function is to wind itself up while making sure the remaining goodies go to the insiders. I know one guy who was the financial director of a division of a big name company who retired early years ago because he could see the writing on the wall.

“I felt really guilty,” he told me. “But what could I do? The fund’s first duty is to pay its members who are already drawing their pensions. When it all goes wrong, those still working are the ones who end up losing most or all of the pay-out they anticipated. I got out while I was still ahead.”

Peak oil killed the growth fairy

As far as the Western economies are concerned the pensions bubble burst when peak oil killed the growth fairy a few years ago. Big fat pensions were possible for a few glorious decades while fossil energy was, to all intents and purposes, limitless and virtually free and while the old wealth-funnels coming in from the rest of the world were still in place.

Now there are billions more human beings chasing their slice of the shrinking pie. They prefer to keep their wealth for themselves, thank you very much. Meanwhile the returns on setting fire to 500-million-year-old plants and plankton are diminishing steadily as the remaining reserves become ever-more difficult and expensive to exploit.

Cynical

All this makes the UK Government’s scheme to auto-enrol workers into workplace pensions look even more breathtakingly cynical. These schemes don’t have a hope of paying out much, if anything, to those required to pay into them.

Instead, they will be yet another manifestation of the Ponzification of finance: taking money from increasingly impoverished workers and shoveling it to the people now retiring at the end of the era of gold-plated pensions: ready to spend the next 30 years shopping in John Lewis, going on cruises and complaining about the price of petrol and the habits of younger people.

It’s highly unlikely that such an unequal arrangement will last long in a liberal democracy. But then who’s to say that liberal democracies themselves are not merely artefacts of the age of fossil-fuelled growth in the same way that fantastically generous final salary pensions once were?

Racing new car retailers towards the cliff edge

The global market for fleet vehicles  is “flourishing” says the Financial Times.

 Companies that deferred renewing their fleets during the credit crunch are now making up for lost time, and ordering record numbers of company cars, vans, and heavy trucks .

Looks of puzzlement and mutters of ‘I wish’ greeted this clip during an auto industry meeting attended by QuadRant yesterday.

To be fair to the FT, the clip was not news or comment but their ad department attempting to drum up support for a forthcoming fleet supplement.

Fleet sales down

In fact UK fleet registrations were down by 0.7% between January and August this year. Business sales (to small companies and sole traders) were much worse – plunging by 15%.

Only private sales look good. But much of the 10% rise reported by the SMMT is deceiving.

Nearly new cars languish on dealer forecourts,” reported Motor Trader last week.

 Despite the market being supported by the private sector Glass’s reports that franchised dealers do not recognise this strengthening in retail demand.

Adrian Rushmore, Managing Editor of Glass’s, said: “What is recognised is the growing number of nearly new cars that have started to languish on forecourts.” Between June and July the number of 1212 plated cars advertised increased by 50 per cent.

In other words, the market is loaded up with cars registered by the industry to itself, just to keep its numbers up.

Manufacturing used cars

It’s true that ‘manufacturing’ nearly-new cars actually accounts for a big chunk of the auto trade. Employees of the car makers and retail outlets are given brand new cars every six to nine months.

Then the cars go to the forecourts with a few thousand miles on the clock as ‘ex demonstrators’ or suchlike, at a substantial discount. Hundreds of thousands of ‘nearly news’ are made this way every year.

‘Fleet’ sales also include new cars registered to finance firms but driven by punters on personal leasing deals, and cars bought by daily rental companies.

That helps explain how the industry chalks up a million such registrations every year when genuine company car drivers currently need fewer than 300,000.

Stuffing the market with unwanted cars

But even this convoluted system isn’t always enough. Sometimes some manufacturers simply stuff the market with thousands of new registrations that nobody has any use for.

That’s what the Motor Trader article is highlighting. There are 50% more brand-new, plated cars with delivery mileage on the clock on forecourts. That will bugger up prices and margins throughout the house of cards that is the ‘new’ car market.

Sure, this sort of thing happens fairly regularly. But this time around there’s less chance of the market bouncing back to absorb the excess. The auto makers’ cushion is wearing thin.

The industry has a massive problem with fuel costs. I don’t mean high pump prices (although they are affecting demand). I mean the fact that the oil price needed to bring fresh supplies of liquid fuels to the global market is simply too high for Western economies to bear.

High-priced black stuff

Western economies, designed for $25 oil, don’t grow when the black stuff costs $100. But if crude sells for less than $100, there’s no justification for producers to invest in expanding expensive tar sands, shale, deep sea and polar sources.

So OECD growth stalls, household incomes stagnate and personal debt becomes disabling rather than enabling. People are forced to conserve. But conservation supports the high oil price at the root of the problem by killing the incentive to exploit the remaining, hard-to-get-at, resources.

Simply cutting retail fuel prices won’t help much. A few people will use their cars a bit more, or change them. But many would use cash saved at the pumps to pay down the loans, credit cards and mortgage debt that are crippling household finances.

Even so, the auto industry’s reaction is to repeat what it’s always done in the past. It’s stuffing unwanted units into a shrinking market. And hoping the surfeit won’t choke too many dealerships to death before growth returns ‘as it always does’.

Oil and energy prices say growth won’t return. So the car industry needs to find a smarter way to manage declining demand. Because doing what it has always done will turn a hazardous descent of a rocky slope into a full blown plunge over a cliff edge.