"Everything is new if you are ignorant of history. That is why ideas that have failed repeatedly in centuries past reappear again, under the banner of ‘change,’ to dazzle people and sweep them off their feet." 

~Thomas Sowell

An event of some significance was brought to my attention yesterday, with some ruminations about what it could mean for Americans.

The runs on Bear_Stearns at the end of last week, combined with the teetering solvency of Lehman_Brothers, indicate that the reckless gambling of depositors' monies by these major financial houses is finally catching up with them.  Unfortunately, the depositors, who felt that a bank was a secure place for their funds, will likely lose their money because of irresponsible decisions by bankers. 

The failure of one of these major financial institutions sets a precedent; the failure of two institutions, to be sold for pennies on the dollar, defines a trend.  And a trend in this direction is very dangerous indeed.

Should several of these major financial houses collapse, the American economy could be strongly impacted in a negative way.  It seems likely that, should that happen, the Federal Reserve would dump more currency into circulation to "buy out" these debts, thus rapidly driving up inflation.  For those of you who remember double-digit inflation during the Carter Administration, you know that it can be only a small step from inflationary recession to major economic depression.

Rapidly rising inflation reduces the buying power of wages and savings.  Those on fixed incomes (pensions or Social Security), those who draw government checks (welfare and disability, for example), and those who earn the minimum wage, will all lose buying power, effectively putting them at or near the poverty level.  Minimum wage is not a living wage now--imagine how one would be affected if prices were significantly higher than their current levels.

Rising inflation also brings about layoffs.  Increased labor costs, increased prices for materials, and less market demand means more employers will be unable to make a profit, or so much as break even.  That means rising unemployment, rising welfare and unemployment applications, and rising income taxes on those still employed.

Not everyone will be completely adversely affected, of course.  Those people with fixed-rate mortgages who keep their jobs will come out ahead when wages eventually catch up to the newly inflated price of goods, because their mortgage payments won't increase much, but their wages eventually will increase, and the dollars they owe on their home mortgages will be worth less than those dollars were worth when they bought their homes--so they work fewer hours for the same mortgage payment.

I'm not an economist, and I really don't care to speculate too much on the economic implications of these events. 

The social implications of economic instability are sobering, and I hope to explore a few of those in my next post.

After a brief and wonderful reprieve, we have been dumped back into the deep freeze.  Yesterday's high was 39° F--unseasonably warm for North Dakota in January--but tonight's low will be 26° F below zero, 65 degrees colder in less than 36 hours. 

While the deep freeze represents the more normal conditions of a North Dakota winter, the wide and rapid temperature changes do not.  Generally we get cold--and we stay cold--and the only question is how windy it might be.

North Dakota is capable of dishing out much worse than this weather, however.  Joe Btfsplk tells me that conditions in the northwest corner of the state get far more extreme than the more moderate climate here in the "valley".  (If you haven't heard about this, you should ask him sometime.) 

For example, he tells me that one winter twenty-five years ago or thereabouts, the air temperature in his hometown dropped to 56° F below zero--without factoring in the wind!  Even more surprising is how things behave in cold such as that:

• Gasoline won't vaporize, so cars parked outside won't start.  They can't.
• Tires freeze stiff, and should the car be (driven into) and parked diagonally against a curb, the tire will crack open and break where it is forced to conform to the shape of the curb.
• Bias Ply tires develop flat spots where they contact the road overnight... they cannot flex back as quickly as the car rolls, so the smoothest streets ride as rough as if they were gravel (as you tow it to a heated garage so that they can try to get it started!)
• Vinyl breaks, having lost all its flexibility right along with the tires, leaving the stuffing in car seats exposed and dashes ruined.
• Vehicle exhaust doesn't disperse at these temperatures when the air is still, so drivers can't see the vehicle in front of them at the busy intersections. This is not like temperatures just below freezing where you can see the moisture freezing as it exits the exhaust... the difference is that it just hangs there and doesn't "go away" like it should.
• Skin, nasal passages and lung tissues freeze within seconds from exposure to the cold.

Fifty-six degrees below zero is unusually cold even for North Dakota; nevertheless, it can and does happen.  The western side of the state, particularly in the north, gets much colder than the rest of the state. 

I think the weather patterns that keep the Rapid City/Mount Rushmore area, from which it is almost due north, so warm in the winter, cause the frigid temps by diverting arctic air blowing south through Alberta and Saskatchewan into a southeasterly path directly toward northwestern North Dakota.

Whatever the cause, northwestern North Dakota gets colder in the winters, and often hotter in the summers, than we do here.  As much as I hate to admit it, -26° F is not really that bad, comparatively. 

Don't tell anyone I said that. 

Update:  Northwestern North Dakota is at -35° F right now, with wind chills around -55° F, since there's merely a gentle breeze.  In winter we always seem to pine for summer, forgetting about the gazillion mosquitoes in the back yard and the 98° degree heat with 98 % humidity; in the summer we long for snow and cool breezes, forgetting about the life-threatening wind chills and insanely cold air.  Are we never content? 

I wonder.