Tuesday, July 29, 2014

Making progress on electric vehicles

Unhooking the world from fossil fuels is, and will continue to be, an enormously complex project.  The reason is simple—if you own a car that requires 89 octane gasoline to run, you must have that exact fuel or your car is merely an overpriced piece of conceptual art.  When you buy a piece of technology that requires energy to operate, you are also buying into the infrastructure that supplies that energy—whether you know it or not.

It turns out that electric vehicles (EVs) are comparatively easy to build—especially compared to those powered by gasoline.  Electric cars do not need 7-speed transmissions or stainless-steel exhaust systems.  Service requirements are minimal. Etc.  But manufacturing simplicity does not sell EVs.  The problem comes when the potential customer asks, "and where do I get the power for my car?"  It's a question the folks selling gasoline-powered cars simply do not need to answer.

Logically, one would expect the electric car folks to address the power problems in order to expend their market beyond the technology innovators.  And so it happens that EV manufacturers and dealers are doing just that.  In Iceland, a country with WAY more renewable energy that they know what to do with, they are setting up recharging stations (bought at a debt auction from Israel) that will cover the country and will recharge EVs for free.  In a land where gasoline runs over $8 a gallon, free will look especially attractive.  Elon Musk's contribution to the power problem comes in the form of a deal he just signed with Panasonic to build powerful batteries cheap enough so he can manufacture his proposed middle-class car.

Keep chipping away at the power problems and suddenly electric vehicles will become the obvious choice.  Of course, it still remains to be seen if we will chose to end our reliance on fire to generate electricity.  But that problem also has realistic solutions.  We have certainly not reached the stage where EVs are the only sane choice, but you can begin to smell it.

I keep writing that ONLY the Producers can save us from the problems of climate change / peak oil.  Well, this is how it will be done—the philosophy of continuous improvement tends to solve problems that no other organization or philosophy can.  And like Peirce's pragmatism, continuous improvement is a core philosophy of the Producers, and right now, we are the only ones who really understand either idea.

Iceland Plugs In (With EV Chargers From Israel)

Jim Motavalli  JUL 28, 2014

Iceland is poised to become the first country in the world fully wired for electric car charging, and it’s happening all at once, with Israel’s misfortune becoming Iceland’s gain. It helps, a lot, that Iceland has abundant clean electricity and is so small—the size of Kentucky, with only 325,000 people.

Huge resources of both hydroelectric and geothermal energy mean that Iceland has generating capacity far beyond what it can use itself. Right now a lot of the excess power is going to making aluminum for export, a dirty process. Since gasoline is very expensive in Iceland (approximately $8 a gallon), fueling with domestic power makes a whole lot of sense. A national effort to run Iceland on hydrogen fizzled out, in part because of the difficulty of getting fuel-cell cars onto the island, but EVs are readily available.

Gisli Gislason, the CEO of Reykjavik-based Northern Lights Energy and EVEN, tells me that he’s bought 200 240-volt charging poles from the flamboyant but now-defunct Better Place, which was to have turned Israel into an electric vehicle paradise. In a deal that splits Better Place’s considerable assets, Iceland gets the chargers and Renault takes back its 359 Fluence Z.E. cars set up for battery swapping. Liquidators have been trying to offload Better Place’s assets since last year, but two previous deals fell through.

EVEN is the main EV vendor in Iceland, selling the Tesla Model S, the Nissan Leaf and the Indian-made Mahindra Reva e2o. Since September 2013, Gislason says, 20 Leafs and 20 Model S have been sold. “We expect to put 250 new EVs on the road in the next 12 months. We’re seeing the same trend as in Norway—sales are booming.”

There aren’t many chargers now, but wiring the country won’t be a huge challenge. “The good thing about Iceland is that we have two thirds of the population in the capital of Reykjavik,” Gislason says. “There’s one 900-mile main road around the island, and only a few small towns off the road, but within 60 miles of it. I think 200 charging poles should do the job.” The company is close to a deal with a fuel retailer that would put chargers in gas station parking lots across Iceland.

“If this works out, EV owners in Iceland will not only be using the cleanest energy in the world, but also driving for free,” Gislason said. “Beat that.” more

Panasonic, Tesla agree to partnership for US car battery plant

July 29, 2014

OSAKA -- Panasonic has reached a basic agreement with Tesla Motors to participate in the Gigafactory, the huge battery plant that the American electric vehicle manufacturer plans to build in the U.S.

Tesla aims to begin the first phase of construction this fiscal year. The plant would start making lithium-ion cells for Tesla cars in 2017. The automaker is shouldering the cost for the land and buildings.

Panasonic likely will invest 20 billion to 30 billion yen ($194-291 million) initially, taking responsibility for equipping the factory with the machinery to make the battery cells. An official announcement on the partnership will come by the end of this month.

Capacity at the Gigafactory will be added in stages to match demand, with the goal of producing enough battery cells in 2020 to equip 500,000 electric vehicles a year.

The total investment is expected to reach up to $5 billion, and Panasonic's share could reach $1 billion.

The Japanese company owns a stake in Tesla and currently makes the batteries for Tesla cars. In a contract reworked in October 2013, the two agreed that Panasonic would supply Tesla with 2 billion battery cells between 2014 and 2017. more

Sunday, July 27, 2014

The German Producers object to sanctions against Russia

Thorstein Veblen was like many of us who grew up in the north-central states like Wisconsin and Minnesota in that we knew many Germans of incredible virtue.  I grew up around German-speaking pacifists who were also superb farmers with beautiful fields and healthy herds of animals.  My Swedish tribe admired the Germans because they skillfully made quality goods.  The neighbor my grandfather most admired was a machinist.  The Germans in Wisconsin also brought with them some of Europe's most advanced political ideas.  In the repression following the Revolution of 1848, some of Germany's finest intellectuals were forced to flee and a significant part of them washed up in Wisconsin.  They were even called the 48ers, and their legacy includes the founding of the Republican Party in Ripon as an abolitionist party, the Progressive movements of LaFollette, and the Socialist governments of Milwaukee.

After graduating from Yale, Veblen spent several years in Madison hanging out with the Wisconsin Progressives and most certainly understood the legacy of the 48ers.  In his world, smart Germans could also be heroic.  So when it became obvious that Germany was at least partly to blame for starting the insanity that was WW I, Veblen wanted to know how this could happen.  And so he wrote a book that is a towering monument to Institutional Analysis called Imperial Germany and the Industrial Revolution.

Veblen's essential argument is that there are two Germanys.  There is genius Germany that makes high-speed printing presses and BMWs, and there is aggressive Germany that is rooted in the warlike animus—think Prussian.  WW I was so insane because genius Germany could produce more efficient ways of killing people than the professional killers could comprehend.  Genius Germany had already come to dominate the world by 1914 but most of that advantage was squandered when Germany went to war.  Two undeniable cultural currents merged to make a dangerous warlike Germany inevitable.  Veblen even argued in 1915 that it didn't much matter how Germany fared in the current conflict, her cultural proclivities meant she was likely to try again if she could only reorganize.

While we don't have the Prussians teaming up with the Krupps to make trouble any longer, the mixture of Predatory Germany and Genius Germany still makes for interesting outcomes.  The banksters of Frankfurt are the new Prussians while the German Producers are still cranking out world-class goods and still defining industriousness.

In this fight over whether Germans should threaten economic sanctions against Russia for refusing to capitulate over Ukraine however, the interests of the Producers and Predators could not differ more starkly.  Predators view the world as friends or enemies, Producers view the world as suppliers and customers.  Big difference—HUGE!  So while the would-be Prussians try to outdo each other for violent, naked, threats, the Producers just want to get on with making their corner of the world a little more prosperous.

Put me down for being on the side of the Producers in this one.  Like Veblen and my grandfather, I happen to admire genius Germany.

On watching the Tour de France

Around here, we have watched the Tour for several years now.  It's a cheap trip to France courtesy of photographers who have the equipment and skills to capture great shots.  This year however, there was something just off about the Tour.  They started it in Yorkshire—a part of the UK that was destroyed by Thatcherism in the 1980s.  They went through Sheffield—a city George Orwell once declared to be the ugliest town in the old world.  It hasn't improved much since 1936.  At least the Brits turned out in their thousands.  Getting three days of the Tour is a rare privilege and the citizens of Yorkshire took advantage.  A start in Cambridge was a reminder that England is at least concerned with the aesthetics of its great university town.  But soon the Tour was on the Continent with the prospect of those cute little French villages, the incredible farms, and the spectacular castles and churches those beautiful farms had helped finance.

Unfortunately for the first week, that didn't happen because the Tour officials decided that the Great War would be honored on the 100th anniversary of its beginning by routing the race through the areas where those savage battles had been fought.  Suddenly the race was several clicks out of kilter.  The few remaining castles and churches had been reconstructed since about 1930, the farmland looked damaged, and the woodlands had that everything-is-80-years-old look about them.

The race actually went through the land contested during the Battle of Verdun.  There they have built a huge white memorial building plus a graveyard with about 16,000 headstones—an impressive array until it is realized the Germans and French lost 700,000 casualties in the 300-day battle.  Because it was a battle fought with artillery, those 16,000 probably represented the few who weren't blown to bits and could be identified.  Nevermind—the Tour blew past the memorial and graveyard in a few seconds and disappeared into a woodland that had been planted on no man's land.  While the trees covered it, it was still no man's land—the race didn't get to the next town for what seemed a very long time.

Unlike the stages in UK, the French seemed disinterested in the Tour this year. Rural France grows ever more depopulated and the battlefield / trench-line areas probably never recovered from the damage of the Great War, but it seemed like there were miles of barricades set up by the organizers to control crowds that just never showed up.  Watching the Tour has always been a frivolous thing to do and this year, the French didn't seem like they were ready for frivolity.  Apparently, I was not the only one to notice—Der Spiegel posted a long piece about how this Tour seemed to demonstrate that France was now the new sick man of Europe.
A deep gloom appears to have taken hold in France. A recent survey showed that two-thirds of the French are "pessimistic" about their country's future. "Viewed from the outside, France under François Hollande is like Cuba, only without the sun but with the extreme right," the newsweekly Le Point recently wrote. The country is "impoverished, over-indebted, divided, humbled and humiliated and finds itself in a pre-revolutionary situation in which anything seems possible."
I think the French have been correct to sit out this year's Tour (if that is in fact what they did). I think it was a huge mistake to involve the Tour with some of the saddest cemeteries on the planet.  There is a damn good argument to be made that humanity has never really recovered from the Great War.  Looking at the physical scars left behind in France showed that some of her wounds are still open.  It is actually quite astonishing that someone thought mixing the memories of the Great War and a bicycle race was a good idea.  I thought it amazingly tasteless.  It is especially tasteless if this decision was made as part of a larger project to rehabilitate the Great War's deservedly lousy reputation.  Anyone who tries to do THAT is clearly insane and genuinely evil.

And as for Spiegel's point about France being Europe's sick man, that's pretty easy to explain too.  France cannot fix her economy because she sold her ability to economically innovate for membership in the EU.  Mix the neoliberalism of Brussels / Frankfurt and Socialism as taught in a Écoles normales supérieures somewhere and you get a ridiculous creature like Hollande.  Because of the intellectual arrogance that comes standard with one of those elite French educations, fixing the economic problems could take some time—time the French really do not have.  I am old enough to remember when the French built amazing trains and did all the heavy lifting that got Concorde to fly.  I was once so impressed by French intellectualism I smoked Gauloises Bleus.  That the French gave up that amazing cultural energy for something as demented as neoliberalism is just tragic.

Saturday, July 26, 2014

Australia, carbon taxes, and the market for solar

Australia's knuckle-dragging prime minister, Tony Abbott, has thrown his lot in with the nation's coal industry.  This in spite of the fact that Australia has been beat up more by climate change than almost any other nation on earth.  In fact, he even managed to roll back her carbon tax.

Personally, I have mixed feelings about carbon taxes.  The basic idea is to tax carbon energy so the price more accurately resembles what burning this stuff actually costs the environment.  Intellectually, this makes sense.  Unfortunately, raising the costs of energy is the surest way possible to screw up the real economy and goodness knows there are already far too many ways to do that. I probably could get behind the idea of carbon taxes IF they were directed into a fund that could only be used to finance projects that actually replaced carbon fuels.  Even better would be if the carbon taxes were used to capitalize one of Ellen Brown's public infrastructure banks so we could leverage up some SERIOUS projects.  You cannot just tax a necessity like fuel—you must promise to provide a meaningful alternative so that people can choose to behave so they can avoid the tax.

In any case, carbon taxes are still 1000 times better than bogus schemes like cap-and-trade.

But getting back to Australia.  She is rapidly discovering that even without carbon taxes, the solar alternatives have become realistic and cost-competitive.  Again, cheap solar cells change a very great deal.  Australian has a LOT of coal but she has even more sunlight.  The whole continent is one big solar site.

Friday, July 25, 2014

The iron law of non-renewable resources

When I took the Energy and Public Policy sequence at the University of Minnesota in the early 1970s, one of the concepts we were taught was the Iron Law of Non-renewable Resources—attributed to Barry Commoner—that stated, "Every unit of oil (or whatever) that is found and extracted makes the next unit harder to find and more expensive to extract."

There is nothing I learned at the university that has held up better than that law.  In fact, this little piece by Drum points out the fact that the Iron Law is still working fine in 2014, thank you very much.

Fix the trade deficit—if you can

Dave Johnson, bless his heart, thinks that there are Democrats who can be convinced that the real problem with the economy is the trade deficit.  Whew!  He is obviously right about the trade deficit being the real problem with the economy.  He is probably not right about the Democrats agreeing with him.

The problem with the trade deficit is that it is structural.  And the main drain is the fact that we must import so much energy to feed the lifestyle we have designed for ourselves.  The census department calculates that petroleum products as a percentage of the deficit has run between 32% and 66% since 2006.  Talk about structural!  Something as obvious as urban sprawl means that petroleum consumption is designed and built into the social order.  Worse, because we have not meaningfully addressed our oil consumption since this problem first became obvious in 1973, we have been forced to sell off the crown jewels of USA industrialization to pay the energy bills.  This has meant that any realistic ability to increase our export industries has been severely crippled.

And so, Mr. Johnson, while I agree with virtually everything you write about the trade deficit, I must protest that without a meaningful reduction in petroleum imports, any talk about reducing the trade deficit is utterly meaningless.

Thursday, July 24, 2014

The real costs of sanctions on Russia

The spat between Russian and Ukraine is enough to make me sick.  I want both countries to succeed and prosper.  And this ginned up fight is going to prevent both countries from prospering as they could and should.  The odious Ms. Nuland claimed USA spent $5 Billion to foment this rumble. One can only hope that the economic damages from those actions do not return a thousandfold.  After all, it is MUCH easier to wreck things than to build.

The biggest issue is that Russia supplies the energy that powers much of Europe.  If this crises gets bad enough so that energy shipments are disrupted, that $5 Billion will soon seem like a rounding error.  Worse, because the energy markets are global, everyone will be hurt.  As anyone in the Producer Classes can tell you, there is simply no better way to crash the global economy than to raise the price of energy.

Wednesday, July 23, 2014

Remembering the moon landing

Sunday night, July 20, was the 45th anniversary of the first time man walked on the moon.  Like most of the people alive when it happened, I can remember vividly where I was.  I was visiting a rural dairy farm in Southeast Minnesota that was set on a hill so the TV reception was superb.  The sun had only been down for a short time and there were hundreds of fireflies in the gathering darkness.

Yes indeed, I was a space aficionado—and had been since the first flight of Sputnik in 1957.  That afternoon, I was riding along with my father as he ran errands.  I got left in the car with the radio running.  I was too young to understand the significance of that basketball-sized projectile that did little more than beep, but I could clearly hear the fear in the voices of the people who read the news.  Those errands took about an hour and a half and it seemed like Sputnik was all they could talk about.  Soon, I would discover that Sputnik meant that every year I was handed a brand new science textbook.  I may have lived in tiny towns with tiny schools that could not afford first-rate science teachers, but I always had textbooks that were as good as the country could produce.

I would graduate from high school in 1967 so I had completed two years at a university by the summer of 1969.  The era between 1957 and 1969 was truly the golden age of USA areospace.  In addition to the manned space program, the industry produced such phenomenal aircraft as the X-15 (first flown in 1959, it still holds the official world record for the highest speed ever reached by a manned, powered aircraft—its maximum speed was 4,520 miles per hour (7,274 km/h), the SR-71 (first flown in 1966, it has held the world record for the fastest air-breathing manned aircraft since 1976) and the incomparable Boeing 747 (first flown in 1969, it is still the fastest subsonic air transport in the skies.)  Anyone remotely interested in the details of powered flight had plenty to follow.  And I did.  I pretended I was sick so I could stay home from school on February 20, 1962.  I wanted to listen to John Glenn orbit the earth on the radio (we did not have a TV and it really wouldn't have made much difference if we had.)

Around here, we celebrated the anniversary of men on the moon by watching the utterly charming (fictionalized) account of Australia's role in getting those amazing TV pictures of the first moonwalk back to earth—called The Dish (2000).  I really like this movie because it depicts this incredible event from the perspective of a small town in the middle of nowhere.  That's as close to my perspective as is likely to be made into a movie—so I have a high-def copy.  I like the characters, the costumes and hairdos, the music selections, the humorous takes on cultural stereotypes, and above all, the excitement the people of Parks Australia felt being a part of an event that would prove that science can be daring.

I need to remember the good parts because while it was happening in 1969, I had begun to sour on the mighty feats of USA aerospace.  I was literally sickened by the idea that a magnificent aircraft like the B-52 was being used to drop high explosive on peasants working rice paddies with the help of water buffalo. I was furious that the nation had in 1968 elected a liar who promised to end the war against the Vietnamese with his "secret plan" and then did no such thing.  Flying may be one of the great aesthetic accomplishments of human history, but the warmongers made certain they could even turn that into a tool for pure evil.

One of the details The Dish does especially well comes in the portrayal of Al, the NASA rep from Houston. Very bright, thorough, and assertive, he initially grates on his Aussie colleagues but eventually wins them over because of his intrinsic honesty, his humility in the face of the big project, his dry humor, but mostly his relentlessly pragmatic problem-solving style.  He sums it all up when he explains that aw-shucks small-town Neil Armstrong was his favorite guy at NASA.

A guy from Ohio, Armstrong was the pluperfect pilot because he was driven to master every tiny detail of flight.  He built models, he soloed at 16, he studied (and eventually taught) aeronautical engineering, he became an accomplished test pilot, and so much more.  When he was chosen to make the first moon landing, he was arguably the best pure pilot to have ever lived.  Good thing, too as that first landing was only seconds away from disaster.  He so thoroughly understood the science of flight, and how aerospace design and manufacturing fits into that science, he was able to get the absolute maximum out of the lunar lander on his first try.

I still find it all quite amazing.  I look back on those days with an utter certainty that in its current configuration, USA absolutely could not return to the moon.  And lots of other things.  We have lost a great deal in the process of deindustrialization.  It is good for people to build difficult things.  That was the heart of Kennedy's great line "We choose to go to the moon and do those other things, not because it is easy but because it is hard."  I miss the science done to make things better, not to make a gazillion.   And I certainly miss the can-do style of the folks who pulled off the moon shot.  And THAT is the quality we must reclaim to survive.  Rebuilding the country to operate without fire is a project that will make the moon landing look like a cheap stunt.

Tuesday, July 22, 2014

June global temp record broken—Lake Mead drying up

We will never be short of evidence for the fact of global warming.  June just set the record for the warmest month in recorded history and Lake Mead, the reservoir behind the Hoover Dam (the project that made possible Las Vegas and much of southern California urban development) is now at its lowest level ever.

You see, the deniers can deny all they want, but that doesn't change anything important.  The globe will go on warming in spite of their ignorant bleatings.  So one by one, they will just have to accept some new evidence that can break through their delusions.  In the end, the only deniers left will be those who deny for hire—and even they won't believe their own useless bullshit.

The only real issue is if the sane folks, who actually have the possibility to do something meaningful, can chart a new course in time.  For years, as the Democratic Party became the Republicans of Eisenhower (I am being generous here) while the Republican Party was philosophically taken over by nutjobs who were getting their political ideas from Limbaugh and Glenn Beck, I assumed that the sane folks were still in the Democratic Party.

I guess that is my form of denialism.  Climate change is mostly a technological issue and the left is actually awash in folks who wear their technological illiteracy proudly and openly.  I know dozens of lefties who believe we could instantly solve our energy / climate change problems if we could only get our hands on those 200 mpg carburetor designs the oil companies bought up on the sly so we would keep buying their products.  Heck, I know lefties who consider the process of assembling something from IKEA as an ordeal (I am NOT making this up.)

It is a LONG journey from admitting that the planet is warming dangerously to having any useful ideas on how to reverse the process.

Monday, July 21, 2014

Fuel cell update

Rob Wile over at Business Insider takes another run at the possibility that fuel cells may be the answer to the question, "Can we make a serious car that produces no carbon emissions?"  If you type "fuel cells" into the search box on the top left, you will see that I have covered this subject before in some detail. And the big objection to a widespread adoption of fuel cells is the fact that hydrogen fueling stations are extremely rare so it doesn't much matter how good any fuel-celled vehicle might be.  I mean, say what you want about the inconvenience of plugging in a battery-powered car, it is almost impossible to be somewhere where there isn't an electrical outlet nearby.

But the landscape IS changing.  Musk really has made a splash with the Tesla S—a car so good that Lexus has noticed that it is losing sales of its flagship LS to its plug-in rival.  Lexus pretends to be unconcerned asking “I think the question remains to be seen how many people will buy a second Tesla.”  Lexus is Toyota's premium brand and it's Toyota that is sending the most serious fuel-celled car to market—so this is obviously the company line.

Honestly, I don't see any way around the problem of zero hydrogen infrastructure.  On the other hand, Toyota didn't become the biggest car maker on earth by making too many big mistakes.  It is also a company that stands by its convictions.  They lost a lot of money on those early Priuses before the market would prove them right.  (I live in a town that is crawling with Priuses so it is especially hard for me to remember when the hybrid car was considered a joke.)

In a duel between little Elon Musk and mighty Toyota, the odds must tilt heavily towards Toyota and its marketing worldview.  On the other hand, Musk has managed to capture sales from the absolutely superb Lexus LS so he and his vision may survive yet.

Sunday, July 20, 2014

Will the new BRICS bank change anything?

The news that the BRICS countries have formed their own development bank is the subject of an interesting debate between Michael Hudson, an Institutionalist, and Leo Panitch, your classic academic Marxist.  Not surprisingly, Hudson believes that if you get the banking arrangements right, a lot of good can come from that one essential improvement.  Panitch, on the other hand, believes that not much will change because just tinkering with the banking arrangements doesn't change the reality that "capitalists" will still be in charge.

Regular readers know I am a big fan of Hudson and Institutionalism while I have very little tolerance for the Marxists who so often confuse industrialization with capitalism and reject the analytic distinctions between Finance Capitalism and its industrial variant.  Of course, Hudson may be getting way ahead of himself.  While there are many examples of how public and democratic banking has accomplished great things, most have been failures because they absolutely need people who understand WHY and HOW public banking should work better.

Considering that none of the five leaders of the BRICS countries that agreed to fund the new bank has much of a track record in explaining or promoting public banking, Panitch may be right.  This probably isn't going to change much.  On the other hand, since Finance Capitalism is one of history's biggest flops, even small improvements would help.  The chance of the new bank succeeding is probably dependent on getting someone who thinks like Hudson to run it.

Full transcript after the break.

Saturday, July 19, 2014

Minnesota is meeting Obama's carbon targets (NYT)

When one lives in the hinterlands, one of the more "exciting" events is to be covered in the national or international press.  It is especially gratifying to be recognized for something that resembles virtue.  So Thursday's story in the New York Times about Minnesota's somewhat successful attempts at lowering our carbon emissions qualifies as a national recognition of local virtue.

And even though the situation looks somewhat different here on the ground, we'll accept the recognition—even though I find it personally depressing that there are other states that are doing so much worse.  Here's why.  Because we are an energy-poor state with an extremely harsh climate that is only livable with regular energy inputs, we are the classic example of a locale that flourished as the direct result of cheap energy.  When we try to lower our carbon footprint, we start from a very high place.  So while we may be doing better than some others, we still have a VERY long way to go.  And the fact that we have done some things well is probably less due to our intrinsic virtue and more to those constant reminders of how much our existence is owed to energy that show up each month as utility bills.

Because arguably the foremost inventor of Institutional Analysis, Thorstein Veblen, spent his most formative years in Minnesota, it is probably appropriate to explain the biggest success in getting private-public cooperation on carbon reduction using that method.

Minnesotans have had a critical opinion of nuclear power for a long time.  Northern States Power (NSP) built two plants at Monticello and Prairie Island before losing a permit battle to political groups in an attempt to build a third.  The arguments of the critics turned out to be right and NSP saved a ton of money not building that third nuke.  So the nuke operators have a wary but respectful relationship with the greenies.  The utility discovered the activists actually know something and the activists found out that their utilities are run by reasonable people.

This relationship led to perhaps the most enlightened political compromise I can think of.  Because no one has ever figured out long-term storage for nuclear waste, spent fuel rods must be kept in pools next to the power plant itself.  Eventually these pools fill up so bigger pools must be built.  This requires licensing and so the utilities and greenies meet at the state capital.  The greenies put up a decent fight but in the end, the decision would favor the facts on the ground—the plants were necessary for continued existence in a cold-weather place and the plants needed bigger pools.  But the greenies insisted they get something too.  And what they demanded was that NSP—now Xcel—would make a good-faith effort to solve the problems of gathering power with renewables based on numerical targets.

What made this legislation such an act of pure genius was that it forced renewable energy to grow up.  Utility companies have exactly zero interest in hippie technology—their stuff must be exceedingly well designed and built and above all, utterly reliable.  Institutionally what happened is that while Xcel was run by people with expertise in nuclear or fossil-fueled power plants, now they had to create a division to make wind and solar work.  This new division is the triumph of that great political compromise.  I have met some of the wind guys from Xcel.  They are excellent at what they do and quite passionate about getting better.

The lesson here is that if a society wants a green outcome, it simply must get the green experts inside where the grown-ups make the big decisions.

Friday, July 18, 2014

Calculating the costs of climate change

Attempts to put a price on environmental disasters have always been pretty cynical—after all, how can one put a price on the priceless?

The closest human efforts come to economically modeling the natural order come during the practices of mass production.  For example, if an automobile has 12,064 parts, all 12,064 must be on hand or the assembly line cannot move.  Under those circumstances, a washer costing a fraction of a cent is as valuable as a driver's seat worth hundreds of dollars.  It doesn't matter one whit how cheap the missing parts may be, if they are missing, production stops.

Unfortunately, when folks start to tote up the price of climate change, they tend to count up the costs of those missing washers and not the costs of a global environmental stumble.  But even at that pathetically inadequate level of "cost analysis" the numbers are beginning to add up...fast.

The costs for doing nothing about our currently unsustainable practices are also beginning to mount up.  This is only to be expected too.  Every step in the wrong direction only makes the journey to a solution longer.  But change is hard—especially when the forces arrayed against change include our old friends ignorance, laziness, and a lack of imagination.

Thursday, July 17, 2014

Finding the money for major infrastructure upgrades

Today, Ellen Brown writes an incredible essay about the investment giants Black Rock and PIMCO suing the major to-big-to-fail banks.  These are the same banks that have run roughshod over elected governments and terrorized the leaders of superpowers in recent years so this suit represents a clash of the titans.

In the midst of the speculation about what might happen if such a suit would lead to a bankruptcy of a major bank that would then bring down the whole financial system, Brown injects a note of reality into such speculation.  The reality is that there is almost no catastrophe easier to contain than one in the credit system.  Since the whole system is nothing more than folks reprogramming each other's computer chips, a credit meltdown can be contained by simply pushing some other buttons.  Compare this to solving the problems caused by Peak Oil—those cannot be solved by pushing different buttons.  Not. Even. Close.

We will need $trillions to climb out of the mess we find ourselves.  And finding those trillions is just a start—they must be spent wisely.  I will leave it to Ellen and other visionaries to find the money—this blog is dedicated to ensuring that all that money doesn't just buy a lot more of the same.
Black Rock and PIMCO Sue Banks for $250 Billion

Did the Other Shoe Just Drop?

by ELLEN BROWN  JULY 16, 2014


Phoenix Rising

In a thought-provoking March 2014 article called American Delusionalism, or Why History Matters, John Michael Greer disagrees. He notes that historically, governments have responded by modifying their financial systems:

Massive credit collapses that erase very large sums of notional wealth and impact the global economy are hardly a new phenomenon . . . but one thing that has never happened as a result of any of them is the sort of self-feeding, irrevocable plunge into the abyss that current fast-crash theories require.

The reason for this is that credit is merely one way by which a society manages the distribution of goods and services. . . . A credit collapse . . . doesn’t make the energy, raw materials, and labor vanish into some fiscal equivalent of a black hole; they’re all still there, in whatever quantities they were before the credit collapse, and all that’s needed is some new way to allocate them to the production of goods and services.

This, in turn, governments promptly provide. In 1933, for example, faced with the most severe credit collapse in American history, Franklin Roosevelt temporarily nationalized the entire US banking system, seized nearly all the privately held gold in the country, unilaterally changed the national debt from “payable in gold” to “payable in Federal Reserve notes” (which amounted to a technical default), and launched a series of other emergency measures. The credit collapse came to a screeching halt, famously, in less than a hundred days. Other nations facing the same crisis took equally drastic measures, with similar results. . . .

Faced with a severe crisis, governments can slap on wage and price controls, freeze currency exchanges, impose rationing, raise trade barriers, default on their debts, nationalize whole industries, issue new currencies, allocate goods and services by fiat, and impose martial law to make sure the new economic rules are followed to the letter, if necessary, at gunpoint. Again, these aren’t theoretical possibilities; every one of them has actually been used by more than one government faced by a major economic crisis in the last century and a half.

That historical review is grounds for optimism, but confiscation of assets and enforcement at gunpoint are still not the most desirable outcomes. Better would be to have an alternative system in place and ready to implement before the boom drops.

The Better Mousetrap

North Dakota has established an effective alternative model that other states might do well to emulate. In 1919, the state legislature pulled its funds out of Wall Street banks and put them into the state’s own publicly-owned bank, establishing financial sovereignty for the state. The Bank of North Dakota has not only protected the state’s financial interests but has been a moneymaker for it ever since.

On a national level, when the Wall Street credit system fails, the government can turn to the innovative model devised by our colonial forebears and start issuing its own currency and credit—a power now usurped by private banks but written into the US Constitution as belonging to Congress.

The chief problem with the paper scrip of the colonial governments was the tendency to print and spend too much. The Pennsylvania colonists corrected that systemic flaw by establishing a publicly-owned bank, which lent money to farmers and tradespeople at interest. To get the funds into circulation to cover the interest, some extra scrip was printed and spent on government services. The money supply thus expanded and contracted naturally, not at the whim of government officials but in response to seasonal demands for credit. The interest returned to public coffers, to be spent on the common weal.

The result was a system of money and credit that was sustainable without taxes, price inflation or government debt – not to mention without credit default swaps, interest rate swaps, central bank manipulation, slicing and dicing of mortgages, rehypothecation in the repo market, and the assorted other fraudulent schemes underpinning our “systemically risky” banking system today.

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Is a larger version of the Bank of North Dakota what the BRICS countries are attempting?  We soon shall see.  As someone who knows more than a little about the operations of the Bank of North Dakota, I would remind people that it works mostly because it is staffed from top to bottom by scrupulously honest people.  All the BRICS countries suffer from persistent and chronic corruption.  And it only takes a little corruption to sink a public bank.  Those who would argue that it would be nearly impossible for a BRICS development bank to do a worse job than the IMF have a point.  But my point is that done right, these new institutions could usher in an era of genuine and sweeping prosperity.

Tuesday, July 15, 2014

BatTram and industrial design

Now this is a story to make your day.  Most visitors to Russia soon notice that the only things that are actually beautiful were built before 1917 and most of this was done by imported artisans (like the spectacular areas of St. Petersburg.)  Much of the rest—especially that built immediately after the Great Patriotic War—is just gruesomely ugly.  Of course, much of this is fairly easy to explain.  Huge areas of USSR were destroyed by the Germans and it had to be rebuilt by grieving widows because millions of young men had perished in the conflict.  Not surprisingly, sound industrial design was not a major priority during the reconstruction.  This is really quite unfortunate.  This is actually an important economic issue because people and societies tend to care for beautiful things.  Maintain enough things carefully and the culture improves dramatically.  A maintenance culture tends to promote other virtues.

But fear not.  It looks like Russian industrial design just might be flickering to life.  The example in question is a new tram and it is quite stunning.  The designer is a young man named Alexei Maslov who looks barely old enough to shave.  Even better, this tram is a project of a tank company named Uralvagonzavod.

Swords into plowshares. A beautiful thing for everyday usage.  What's not to like?  Well a few things, actually.  Those beautiful linoleum floors probably won't look so nice after a few days being trampled with muddy boots, those wood and aluminum handrails will soil and scratch, and that lovely cream-colored felt upholstery will not stand up to drunken, heaving revelers.  But these are easily fixed details—otherwise this is a magnificent effort.  (More photos here)

Sunday, July 13, 2014

Democrats struggle to understand how Bush Tax Cuts wiped out $6.6 trillion in personal income

According to an analysis by Pulitzer-Prize winning reporter David Cay Johnston, the Bush tax cuts, rather than resulting in great general prosperity – as argued by Bush and the Republican Party – cost working Americans a total of 6.6 trillion dollars in lost income over 12 years. For each American taxpayer that is $48,000 in pre-tax personal income.

Johnston is author of the 2008 book Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You With the Bill), and was formerly a correspondent for the New York Times. He has been a pioneer in tracking down, calculating, and revealing to the public the trillions of dollars the very rich and various corporations have hidden in hot money centers around the world to avoid and evade taxes. In January 2009, he presented in Mother Jones magazine a point-by-point plan for dramatically shifting government policies away from favoring the rich and corporations, to working for the general welfare of all Americans. Among his points was a ruthless crackdown on tax havens such as Bermuda and the Cayman Islands, including the use of military force if that was required to overcome the refusal of the authorities of those locales to cooperate.

The discussion on Daily Kos of Johnston’s determination that the Bush tax cuts had essentially robbed each working American of $48,000 in pre-tax personal income reflected the confusion and ignorance that still characterizes thinking about political economy among Democrats and the left generally. A number of tenets and assumptions fostered by movement conservatism were much in evidence. For example, one commenter wrote:
But how do you make that the fault of the Bush tax cuts? For at least the first few years doesn't it make more sense to blame 9/11? In actual fact, I think a big part of the issue is globalization and the knowledge economy…. Globally, incomes are converging…. Secondly, the Internet and the knowledge economy are transforming us into a winner takes all economy.
Leaving aside the glaring contradiction of how incomes could possibly be converging in a “winner takes all economy,” the commenter is asking an important question> What is the causal mechanism by which Bush’s $1.6 trillion in tax cuts resulted in a drop in personal income of $6.6 trillion? This is slightly different than asking why Republican / conservative tax cuts don’t actually pay for themselves, but is closely related. In December 2010, when President Obama was pushing through an extension of the Bush tax cuts, I wrote The Obama tax deal with Republicans is insane, in which I noted, “there have been three grand multi-year national experiments with Republican / Conservative tax cutting over the past century.” These were: the Harding / Coolidge tax cuts of 1921 through 1926; the Reagan tax cuts of 1981; and the Bush tax cuts of 2002. The results of each one of these tax cuts was exactly the same: “all three experiments resulted in the average American becoming poorer, the real (industrial) economy in tatters, and spectacular financial crashes.”

Sachs on climate change

Oh goody.  Jeffrey Sachs has decided to bring his wisdom and expertise to the topic of climate change.  Things are going to get better now, I'll bet.  NOT

Sachs comes late to the environmental debates.  He's been busy.  In 1985, he was the leader of a team from Harvard who decided that Bolivia's economic problems weren't caused by global macroeconomic trends but the fact that her tin miners were making too much money.  So he designed a bundle of programs that openly assaulted the social fabric which he called "shock therapy." (Yes indeed, he really takes credit for inventing that ghastly expression.)

Fresh off his "success" at teaching neoliberalism to the Bolivians, Sachs would take his show on the road to Poland, Slovenia and Estonia.  But his most notorious job was with the Yeltsin government between 1991-94.  His lovely advice set Russia on a downward spiral that made the Great Depression look tame.  Ever wonder how a bunch of corrupt kleptocrats made off with virtually everything of value and triggered an economic catastrophe that saw the Russian middle class destroyed?  Ask Jeff.  He was in the room when most of the decisions were made.  In fact, the corruption surrounding Sachs was so odious, Harvard would eventually lose the contract with Russia and Sachs, who was once the youngest member of the Harvard faculty to have been granted tenure, was asked to leave.  This is how he became a member of the Columbia faculty where he now spends his time defending his role in the Russian debacle and running their Earth Institute.

Unfortunately, since Sachs' first priority is still to defend his role in Russia, he is forced to come up with environmental "solutions" that don't contradict his neoliberalism.  Good luck with that.  (The floggings will continue until morale improves.)  And because his premises are so fundamentally dishonest, his advice on climate problems range from crackpot to goofy.  For example, in his latest efforts, he claims that coal burning can continue because successful methods of carbon sequestration are just around the corner.  His beliefs in saving the planet on the cheap are so bad they actually make Al Gore's look sane by comparison.

Fortunately for the rest of us, Sachs the environmentalist cannot do nearly as much damage as Sachs the economic crackpot has already done.