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Lessons in Sustainability

Lessons in Sustainability

Europe is giving the world a long morality play about the economic consequences of consuming beyond reasonable limits. Political unrest is rampant among several southern European countries as many of their citizens passionately reject enduring pain for past excesses. Investment adviser John Mauldin has a free online newsletter, “Outside the Box.” His April 23rd issue had these quotes about Spain, how it got to where it is, and what its economic choices are:

Spain grew a remarkable 8% per year in nominal GDP in the first nine years after the introduction of the euro in 1999. During this time, Spain focused its economy on housing and selling “the Mediterranean lifestyle.” … Hundreds of thousands of homes were built; for two decades, one home was built for every additional person in the population.

New housing can be an environmentally-efficient investment, when it satisfies consumer needs with less net energy consumption than alternatives. That didn’t happen in Spain; euphoria driven by rising prices led to overbuilding, an ongoing market collapse, and many thousands of unoccupied houses. Spain’s excessive consumption has given it what Mauldin describes as “a narrow set of limited options that will require a great deal of austerity and economic pain on the part of Spain and significant help from the rest of Europe….”

I see the housing and debt bubbles, both in Spain and in the United States, as results of bad government policies. Credit was easy, government held interest rates low, and people did what we often do when offered a free lunch – we eat it. The good news and the bad news is that in democracies we the people are ultimately responsible for the actions our governments take – we have elections in America this November and choices. It’s not easy; one of the themes of my 2010 campaign for Congress was that the federal government should not continue spending $1.40 for each $1.00 of revenue. I lost, but it’s an obvious truth, like the more important truth that we will not continue forever consuming more natural resources than the planet can sustain.

Image by Rainer Halama (Own work) [CC-BY-SA-3.0 (], via Wikimedia Commons


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