Friday, May 1, 2009

New Meaning to “The Economy is in the Dumper”

I’ve written in a couple of previous blogs that one of the revelations of the current economic meltdown is that we have created an economy that depends on ever greater spending and borrowing by consumers. Specifically, if we don’t buy more and more goods – and borrow the money to do so – the system collapses. A recent Associated Press report by James Hannah shows that we must also throw away the stuff we buy.

It seems that an unexpected negative (yes, negative) consequence of the downturn is that people are throwing away less trash, with dire economic consequences: “With consumers cutting back on new purchases, there is less packaging to throw away. The downturn in new housing means less waste from construction materials such as insulation and from discarded drywall and lumber. Restaurant waste is down because people are eating out less...Landfills in Ohio received 15 percent less waste from August to January than they did for the same period a year earlier. The waste stream at Miramar Landfill near San Diego has dropped 35 percent over the past year. Waste at Puente Hills Landfill near Los Angeles is down from 12,500 tons of trash a day to about 8,500.”

Although this might be a good thing for the environment it turns out that in our waste-based economy it’s downright tragic: “To deal with the drop-off in dropoffs, landfills are laying off workers, reducing hours of operation and hiking disposal fees, with the increases passed along to cities, businesses and consumers...About 82 temporary workers have been laid off at Puente Hills and its two sister landfills, shrinking the work force to about 280 and forcing permanent employees to take over traffic control, windy-day litter pickup and landscaping. Several landfills operated by Waste Management Inc. - which runs about 270 active landfills in 47 states - have gone from operating six days a week to five or have reduced hours of operation, said spokeswoman Lisa Kardell.”

Clearly, this may mean we will need a government bailout of the trash industry. “Waste Management's fourth-quarter profit slid 29 percent on declines in its recycling business and one-time charges. But in its earnings report, the Houston-based company also mentioned declines in the collection of industrial waste.” Companies such as Waste Management are bravely coping with this problem in a good old capitalistic way – raise prices. As Hannah explains, “Landfill operators rely on disposal fees to fund operations. If the amount of waste decreases, operators have to cut costs, dip into reserve funds or increase the fees, which are passed along to consumers. In the Columbus suburb of Grove City, the Solid Waste Authority of Central Ohio landfill- with 10 percent less waste - has raised disposal fees by $2 a ton to $35.50 and dipped into its reserve fund. The landfill also is considering accepting trash from out of the district.”

There you have it. We have economy based on consuming, borrowing, and disposing. Can this really be sustainable?

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