Tuesday, February 9, 2016

On the road

Hoping, among other things, to get some new perspectives.  Will still try to post this week but nothing is promised.

Monday, February 8, 2016

Steam-Age solar

Morocco has just opened (probably) the last steam-powered solar energy electrical generating station.  There probably won't be more because these things are ridiculously expensive to build.  It takes a lot of sunlight to turn water to steam but as a country that borders on the Sahara, available sunlight is not the problem for Morocco.  It just that the collectors which must be spread over a wide area are spendy indeed.

The latest high-efficiency PV cells are already far more cost effective than steam.  This situation will probably get more lopsided in the future.  But this doesn't even begin to address the issue of whether large-scale centralized power generation is a good idea.  We'll still need a grid.  But it looks like generation should almost be as dispersed as consumption.  This does not bode well for any centralized solar production including a revival of Desertec--the scheme to harvest power from Saharan solar sites and ship it to Europe.

The bigger lesson here is that solar power is a moving target.  This plant in Morocco was probably the logical, state-of-the-art choice when the decisions to build it were made.  This may be the last such plant but it will probably NOT be the last idea proven excessively expensive or even foolish between the decision to build and the working outcome.

Thursday, February 4, 2016

Syngenta updated

We have been following the Syngenta story around here since last summer.  It turns out that our "local" seed company (owned by a Swiss multinational) has become too valuable to resist.  When I first wrote about them last summer they had come damn close to inking a deal with Monsanto.  I mention this little factoid in my post and within a few days, the Minneapolis Star-Tribune writes a puff piece about what a perfectly lovely company Syngenta is and what an ugly rumor is talk of a sale to Monsanto.

So today, I see this piece about the sale of Syngenta to the Chinese.  It is easy to understand why the Chinese would want to own a company with a proven track record of increasing crop yields.  What makes this deal so jaw-dropping is that their $43billion offer was for a cash sale.  That is a serious pile of money for a seed company but compared to most transactions on Wall Street, this one actually makes sense.  What Syngenta does is so valuable it borders on priceless.

Which is why this "done deal" faces some serious hurdles.  The USA could easily say that plant genetics is a strategic asset—or at least as strategic as the tools used to build chip-fab equipment and deals for things like that have been blocked.  It should also be noted that Monsanto has bought a lot of clout in Washington over the past 25 years or so.  It is likely they still covet Syngenta and could pull strings to block the deal to their own advantage.

Stay tuned.

Wednesday, February 3, 2016

Multiple Regression Analysis

To get my degree from the University of Minnesota, I was required to take four quarters of upper class and graduate-level statistics.  I was NOT happy about this requirement but it only took a couple of classes for me to change my mind from "Do I hafta?" to "This is the future of knowledge expansion—this is probably the most import subject I will take."  So what changed my mind?

The absolute pinnacle of the social sciences at UM was the psychology department.  In 1939, it produced a testing device called the Minnesota Multiphasic Personality Inventory (MMPI) which was soon put to use by the War Department.  It is still in use and copyrighted by the University of Minnesota.  What made the MMPI groundbreaking was that it was the first big test that had used a math method in its design.  That method was called Multiple Regression Analysis.  It was very tedious and labor intensive to use, but a small army of diligent grad students wielding slide rules had been employed to produce the original version of the MMPI.

By the time I got to my stats class in 1972, they still taught the wisdom and power of Multiple Regression Analysis only by now, the social sciences had their very own IBM 360 so no more doing this tedious math by hand.  I was caught up in the excitement.  My teachers not only believed in Multiple Regression Analysis, they believed that using high-powered computing, they were on the verge of a new golden age of human knowledge.  It also helped that for a mere $5 lab fee, I was able to play with one of the most advanced computers on earth.

Along the way, I began to see folks abusing Multiple Regression Analysis.  They would ask almost any questions they could imagine was remotely relevant, run the math, and circle the high statistical correlations on the printout.  Only then would they look to see what had influenced what.  When I saw that happen, I became even more interested in learning statistical methods because it was quite apparent that knowing how stats are generated is perhaps the most important skill one could have in an era where stats would show up in almost every important science and public policy debate.

So now I see a really smart guy point out the abuses of Multiple Regression Analysis and suggest that studies that use this method are probably so flawed, they should come with warning labels.  There is absolutely nothing in my education that would make me believe he is wrong.  In fact, I have long suspected that even the "sainted" MMPI was garbage.  This is a method that probably should have been strangled in its cradle.

Tuesday, February 2, 2016

The invisible poverty of America’s working class

Is the political backlash of poor whites this election the outcome of the decades-long war on the USA Producer classes?

Well, that's one way putting it.  Since the Carter administration, there has been a war on the productive middle of the country.  Some pirate would show up with some hot money, loot a local factory of any loose assets, ship the jobs to China or Vietnam, and escape with his ill-gotten gains.  This often took less than a year.  The folks who worked in that factory faced a slow-motion death sentence.  It doesn't take long before they have lost homes, transportation, spouses and families.  Then they start to lose their health.  In the meantime, they have tried everything they could think of to arrest their falls.  They may have retrained to become a computer repair person or an energy rater.  They drew food stamps or unemployment for as long as that lasted.  Of course nothing that lame can possibly replace the job they recently did so well.

The descent into non-personhood is quite obvious.  When the unemployment benefits run out, they are no longer counted as unemployed.  If they lose their banking services, they are not counted by the world of credit and finance.   Society is sending a VERY strong message—your life is worthless.  So these worthless nobodies are rendered so invisible, not even academics are interested in counting them.

The white males who have been victimized by the deindustrialization of USA face one more sinister attack on their personhood—the accepted party line which claims that white males are privileged and the root cause of the most serious social problems.  That critique may apply to the latest member of Skull and Bones, but it most certainly does NOT apply to someone whose means of existence has been snuffed out by Predators.  It does serve to silence any possible valid complaints in the minds of our august defenders of political correctness, however.  "Your town was destroyed and your life destroyed," argue the lefties who would have once championed the cause of these dispossessed people, "but it was so obviously your fault.  Critical theory says so"

It happens that the invisible people have not just died as planned, but their miserable lives have now shown up in the health and mortality statistics.  This hardly means that our academics and state statisticians are suddenly going to see these people again.  My bet it that this health study will be swept under the institutional rugs.  Can't have anyone questioning why it was OK to destroy the lives of innocent people who only wanted to do a good job, now can we?  The Predator Classes have been hiding the damage their atrocities have caused for a millennia—why would they stop now?

Monday, February 1, 2016

Remembering the shuttle explosion 30 years on

On Jan 28, we passed the 30th anniversary of the Shuttle Challenger exploding 73 seconds after liftoff.  There was an orgy of remembrances as almost anyone who was alive "recalled" where they were and what they were doing when they found out.  An astonishing 17% of the USA public claims they saw it happen live—astonishing because the only network that showed it live was CNN and in 1986, they had nowhere near that sort of market penetration.  But this is really a minor quibble because once the shuttle blew up, the clip was shown endlessly for weeks.  So it is quite easy for someone to "remember" that they saw it live because they were probably only off by a few minutes.  (Here's the CNN footage I never saw—until Youtube.)

I was watching some pre-launch coverage on TV from my home in St. Paul, MN and fuming that I wasn't going to be able to see it live—we certainly didn't have CNN. It was ridiculously cold and I knew the weather pattern that had given us -25°F (-32°C) had pushed all the way down to Florida. When I heard it had gotten below freezing in Cape Canaveral the night before, I just assumed that everyone would have to good sense to wait until everything had properly warmed up.  There were freaking icicles hanging off the shuttle, for goodness sakes.  A youth spent trying to start cars with carburetors in sub-zero temps had taught me a LOT about the behavior of mechanical things in the cold. So I went to have breakfast figuring they would postpone the launch at least an hour.

I came back to the replays of the Shuttle blowing itself to bits. "You idiots," I screamed, and started a curse-laden rant that lasted nearly an hour. Then it dawned on me—the space program is a sun-belt activity. These people know nothing about cold. Besides, even I didn't know the explosion was cold-related. I had just jumped to that conclusion because it was so cold outside my house and had been for days.

Turns out my hunch was accurate. It was an O-ring that failed and it WAS cold-related. Moreover, the Morton-Thiokol engineers back in Utah were warning about that very issue when the launch went off. We weren't geniuses—we merely had experience with the cold. An easily avoided accident had killed the astronauts, traumatized a nation, and dealt the space program a nasty blow.

I had some seriously mixed feelings that day.  Of course, I was stunned to watch seven lives end in an ugly explosion.  On the other hand, I was putting the final touches on my first draft of Elegant Technology and had just spent five years immersing myself in the sad facts of USA's deindustrialization.  Watching a bunch of greenmailers and other economic pirates systematically destroy the muscle and sinews of the USA economy had been a profoundly depressing experience.  This was especially true because I was having a difficult time finding anyone else to believe how serious it had gotten.  So there was this small voice inside of me that went, "YES!  NOW they will understand that it was a huge mistake to turn the USA economy over to the pirates—and their academic whores who were making excuses for why only good could come from deindustrialization.  If a disaster caused by industrial carelessness in rocket science didn't demonstrate the dangers of giving control of an industrial-based society to devout industrial saboteurs, what, pray tell, would?"

It would be difficult to be more wrong.  Little changed—in fact it would get much worse.  Thirty years later, the USA is a country where it is almost impossible anymore to imagine building something so complex as the shuttle.  Listening to the proud-to-be-ignorant folks running for president, it is almost impossible to imagine them passing the science tests we used to get in seventh grade.  The USA as a shining example of Enlightenment thinking is GONE.

Perhaps the saddest outcome of the shuttle disaster was that the engineers who tried to warn NASA that it was FAR too cold to launch basically had their professional lives destroyed.  There's a nasty price to pay for suppressing genius and boy, are we paying it.  What follows are tributes to the engineers who tried hardest to stop the shuttle disaster.  We should remember them as victims of Institutional stupidity—as much as the shuttle crew who died that day.

Thursday, January 28, 2016

Who murdered capitalism?

Earlier this week, Ian Welsh posted The Death of Capitalism, arguing that capitalism "has failed because it failed to deal with climate change." It is not a simple-minded screed by a tree-hugger against the evil capitalist industrialists. There is some deep philosophy behind it, which, as Welsh does better than almost any writer I know, he discusses plainly and very understandably: 
Capitalism’s great claim to being a superior form of organization for production and distribution of goods and services is that it is best able to account for costs and benefits: It produces that for which people are willing and able to pay.

People weren’t willing and/or able to pay to stop climate change. In part, this is because actors with money were able to obfuscate both the science and the situation, spending millions on doing so, and buying the political process. In part, it is because climate change’s worst effects were expected to take place AFTER the death of the people who needed to act to stop it.

If you were 30 in 1980, you are 66 today. If you were 40, you are 76. If you were in the decision making class, overwhelmingly allocated to those who were 50+ in 1980, you are 86 today.

People who were in their prime and during their decision-making days, when we needed to act on climate change, were making a DEATH BET.

They bet they would be dead before the worst results of climate change happened.

They will win this bet.

This was a RATIONAL thing for them to do. I want to repeat that, because too many people think “rational=good.” It does not. It was rational for them to discount a future they would not see.
I do not disagree with Welsh, but I think he is wrong to blame "capitalism." Not that capitalism is blameless in creating the problem of climate change. I mean wrong in the sense that maps of the world in the eighteenth and nineteenth centuries were wrong: they provide a basic idea of certain incontrovertible facts, such as the existence of continents, and oceans, and major rivers, but they simply do not provide all the real details you need to get to where you want to go safely and expeditiously. For example: What kind of capitalism are we talking about here? Industrial capitalism? Or financial / rentier capitalism? American capitalism? Or German or Japanese capitalism?

Because statistics and data show clearly that the United States is becoming less capital intense. It is becoming, in other words, less capitalistic. This is a symptom, as well as a function, of the U.S. economy coming to be dominated by rentiers and usurers, rather than producers. Remember Mitt Romney and Bain Capital? Private equity operations like that—and there are many—force companies to borrow money to pay out fees and dividends, actually de-capitalizing those victim companies. Is that capitalism? And note that such looted companies are under intense pressure, by the financiers looting them, to drive down labor costs as much as possible, perhaps by relocating offshore. And, to skirt environmental and safety regulations, Which of course contributes to the causes of climate change.

Wednesday, January 27, 2016

Denmark and windpower breaking new records

Because Denmark has no fossil fuel resources of her own, every bit of money saved by harvesting renewable energy goes straight to the nation's bottom line.  Besides, the Danes are very good at windmills—Vestas and all.  So it isn't so surprising that Denmark has gotten closer to power her society with wind than anyone else.  If you follow the Vestas link, you can learn all about the fabulous V136—3.45 MW wind turbine.  The 136 is for the rotor diameter in meters which translates into 446'.  That, folks, is a serious piece of machinery

The USA has some primo wind sites.  I lived for a short while in NW North Dakota and I can assure you, there are some fabulous ones out there.  The big problem is that those wind sites are a LONG way from the country's population centers and without better means of electrical transmission, that distance is too far to be economically practical.  So a wind-based infrastructure must necessarily be very sensitive to local conditions.  This is a long way of saying—just because the Danes have gotten damn good at making windpower work doesn't mean their methods are relevant to USA.

In fact, my guess is that because USA has more places with abundant sunlight, PV cells will be much more important to any green energy future than wind.  But who really knows?—green energy is still quite young.

Tuesday, January 26, 2016

The Saker on Putin's neoliberal obstacles

The levels of vitriol directed at Vlad Putin is way out of proportion to any real crimes he may have committed.  I mean, seriously, we want to go to war over Crimea???  Germany is willing to put at risk over six thousand businesses with Russian operations over eastern Ukraine???  The number of USA citizens who could even find Crimea on a map is miniscule.  The latest poutrage from the UK is the official assertion that Putin was responsible for the the death of a rogue secret agent.

None of this makes a lick of sense.  Compared to our drone-assassin Obama, Putin is damn near a saint.  The resurgent Orthodox church in Russia certainly thinks so.  He is astonishingly popular with the voters.  He is, by far, the best leader Russia has had since at least Catherine the Great, and perhaps ever.  Any country that cannot get along with such a leader should probably examine its own foreign policy failures.

So what is the story???  I have been thinking about this for quite a few years now and my pet theory has long been that Putin's real "crime" was that he actually sent one of those thieving oligarchs (Khodorkovsky) to prison.  These were the pirates who ripped off the assets of the Soviet Union during the Yeltsin years.  The rest of the crooks got the message and fled to London with their loot.  For a TINY fraction of their ill-gotten gains, these oligarchs were then able to create the Putin-is-evil-personified story and sell it to the UK and USA press.

In the story below, The Saker argues that the neoliberals who organized the plunder of USSR assets are still alive and well, still very much in power, and screwing up the Russian economy for Putin in a plan to destroy him and his government.  And so we see that once again, the neoliberals will stop at nothing to get their way.  In fact, the Saker argues that if Putin were to do something basic like getting rid of the neoliberal crazy who is running the Russian central bank, the international reaction would be at least as harsh as the response to the annexation of Crimea.

Monday, January 25, 2016

Is Silicon Valley running out of ideas?

Early in his career, (1999) Michael Lewis wrote an excellent book called The New New Thing about the life and times of Jim Clark—the founder of Silicon Graphics, Netscape, and Healtheon, thereby becoming the first denizen of Silicon Valley to have created three billion-dollar companies.  The tale of Silicon Graphics was quite traditional because they were building 3D workstations.  This was a venture into the world of high-tech hardware of the sort that had made Silicon Valley the goto place for the hardware needed by the Defense Department and the space race.  What Clark discovered was that because hardware is so expensive to create, you either needed the deep pockets of the government or a steady stream of patient venture capitalists willing to wait while you make something very difficult actually work.

In truth, patient venture capitalists do not exist in the real world.  Patient people don't become venture capitalists in the first place.  So what Clark discovered was that the greedy demands of the VC community were so onerous, that by the time he finally had produced some Silicon Graphics workstations for sale, he had gone through so many rounds of fund-raising that he didn't own much of anything anymore.  Not long after he was forced out of the company he had invented.  The lesson he drew was that if you wanted to succeed in the world of privately-funded startups, the project had to be short and take advantage of existing technology.  In other words, no hardware.

The project that fulfilled his new requirements was Netscape.  No Hardware involved!  Even better, a prototype web browser had been developed at the University of Illinois by some grad students including one Marc Andreessen.  Clark simply hired Andreessen and together with a handful of coders, created the browser called Netscape.  Essentially, Clark invented a "new" Silicon Valley that required a minimum of capital yet could deliver stupendous results if the product was a "hit."  This is the development model that launched a thousand apps like Facebook.  It is the model that the author, writing below, thinks has essentially exhausted itself.

There are still some brave souls who venture into the world of hardware.  Elon Musk made his grubstake at PayPal before discovering the joys of building something as complicated as an electric car.  I imagine we are about to find out how extremely rare such a move is.

Thursday, January 21, 2016

More worries about debt defaults

Debts that cannot be repaid, will not be repaid.
Michael Hudson

One of the more interesting scenes in the The Big Short comes when the protagonists who have been shorting the housing market are beginning to lose their nerve.  The "cure" is to attend the securitization conference in Las Vegas where they can meet the people they are betting against.  This was a convention of true believers in the conventional wisdom who were making some of the easiest money in history—a sure sign of God's blessing.  Not that these were godly people, understand, they just elevated their arrogance to godlike levels.  Our protagonists are not impressed—when someone has a different belief system than yours, almost everything they do looks crazy.  But in this case, we are talking about people who worshipped at the alter of mortgage-backed securities so to an outsider, they looked quite insane indeed.

Flash forward to 2016 and some sober bankers are warning about the oncoming waves of debt default. (see below)  And since the central banks have been dumping free money on the financial system in the absurd belief that this fluffing will eventually lead to growth in the real economy, they have essentially run out of weapons to fight another 2007-8 economic collapse.  And this time around, the lousy loans are not limited to subprime mortgages.  Anyone looking to short bad loans these days will discover a target-rich environment.

This could be the perfect opportunity rein in the criminality of the banking system and force to central banks to fund the needs of the real economy.  But you watch—the greatest obstacle to a sane system of banking will not be fraud but the insanity of people who are attached to the "conventional wisdom."

Wednesday, January 20, 2016

Neocons don't like being called neocons anymore

As much bashing of neoliberalism that goes on around here, we all would do well to remember that neoliberalism has an ugly cousin—neoconservatism.  If one is worse than the other is a question of theological hair-splitting.  And while neoliberals tend to focus on macroeconomics, neocons have been most public on issues of foreign policy.  Their big public-policy "success" was stampeding the USA into invading Iraq in 2003.  Now that this "triumph" has turned into a debacle for the ages, the neocons are now trying to ditch their name and association with Iraq.  It is easy to understand why.  For complex reasons I don't pretend to understand, most of the big war-mongers still have their jobs.  But their reputations are shot.  For example, look at proud neocon Hilary Clinton—she lost the 2008 primaries to Obama over her support for the Iraq invasion and now in 2016, she might lose to Bernie Sanders for largely the same reason.

Tuesday, January 19, 2016

Will the Fed pay for infrastructure?

The thinking that produced Elegant Technology evolved in three stages.
1) Could the industrial state remake itself so the outcome wasn't always environmental disaster?  After about three years of looking, I assumed the answer was yes.

2) What is stopping us from building the new and improved industrial state?  Answer: It will be very difficult and expensive to improve on what we got and no one seems interested in spending the money.

3) History provides ample examples of when societies faced an emergency, the money would be created to fund a solution.  I assumed the environmental crises was such an emergency.
I had reached stage three by 1985.  I knew it was possible for the central banks to monetize debt because USA had done it as recently as WW II.  So I have been waiting for these geniuses to actually do something about the infrastructure for 30 freaking years now.  But Ellen Brown now assures us that the topic of the Fed paying for infrastructure has finally been reopened.

Be still my heart.  Can we only hope its true?

Monday, January 18, 2016

The pain caused by crackpot economics

The reason the great economic meltdowns are so pernicious is that the vast majority of victims have no idea what hit them. For many, it seems like a natural catastrophe. Worse, none of the solutions they have for coping with such catastrophes seem to help. It certainly doesn't help to pray. It doesn't help much to vote. It doesn't help much to relocate, etc.

I was there for the meltdown in the 1981 and 82 when a deliberate action of the Federal Reserve System caused the prime interest rate to go to 21%. Not surprisingly this action absolutely devastated Midwest agriculture. Pictures of farmers who were losing their farms of four and five generations begin to show up in the media. Significantly, the most common look on the faces of the people losing their land, livelihoods, and homes was confusion. And even if you could tell them that this disaster was caused by greedy bankers performing a crackpot economic experiment, they would have never believed to you. And of course the media and the on-air economic experts, and their politicians, were not about to tell them—even though the facts were out in the open.

My mother just barely survived the Great Depression. Her father was trying to make 58 acres of very marginal farmland provide a living for the family. The poverty in the area where she grew up was almost universal. Her mother died in 1935 from a disease that was quite treatable—but what she really died from was desperation and a broken heart. There was no money in the house to send my mother or her brother to high school so for the rest of her life she walked around with an inferiority complex about her educational deficiencies. She made up for this pain by becoming a prolific reader which had the effect of usually making her the best informed person in the room but this did not compensate for that 8th-grade education that she was so ashamed of. Mostly she never got over the great fear that came from spending a childhood on the thin edge of economic catastrophe.

She's did a pretty good job of spreading that fear to her children. My sister who died last summer certainly went to her death carrying fears she learned from my mother. So economic catastrophes live on in the younger generations. And yet the bad economic theory and naked greed that causes these catastrophes may have only lasted for a few years.

Perhaps the greatest reason I keep plugging away at this blog is that I want to be a source of information to explain what is going on when those great economic disasters fall on the heads of perfectly innocent victims. It's bad enough that they happen. It's much worse when they happen to you and you have no possible explanation for what went wrong. And so, I have spent pretty much every day since 1981 working on better and more accurate explanations.