Friday, October 31, 2014

Riksbank wanders off the reservation?

Like many, I have some serious problems with Sweden's Central Bank, the Riksbank.  These are the people who pay for and award the "Nobel" prize in economics.  So they have a track record of promoting and rewarding the ideas of some real right-wing loons.  In that role, they are arguably as much to blame for the last 40 years of neoliberalism as any institution on planet earth.  Even the exceptions like Stiglitz and Krugman were serious neoliberals when they got their prizes.  That they have become more enlightened since then is a happy accident.

So when it comes to whether the Riksbank stays "on the reservation" when it comes to monetary policy, such questions are pointlessly amusing because in many ways, the Riksbank IS the "reservation."  Yet here we have Ambrose Evans-Pritchard telling us that the Riksbank just tore up the rulebook when they dropped their interest rates to zero the other day.  As Ambrose Evans-Pritchard basically speaks for the "City," he assumes that anyone not in London is already off the reservation and so his job is to point out the errors in their thinking from that oh-so-lofty height of British arrogance.

The Swedes are a pragmatic bunch so even their doctrinaire neoliberals are probably still open to facts.  Which leads me to believe that the Riksbank insiders have seen enough data to believe that the looming problems facing the global economy are led by the specter of deflation.  Evans-Pritchard seems to think they should be more worried about fueling an asset bubble but of course, that is absurd.  While asset bubbles tend to pop on their own, there are no serious examples of deflations curing themselves.

My guess is that for once, the Riksbank got it right.  Now if they would just discover a few more enlightened economists for their phony "Nobel" prize, they might actually accomplish some good in the world.

Riksbank cuts rates to zero and mulls currency war to fight deflation

Sweden's central bank is having to pick its poison, choosing between deflation or an asset bubble

By Ambrose Evans-Pritchard, International Business Editor  28 Oct 2014

Sweden’s Riksbank has torn up the rulebook of global central banking, cutting interest rates to zero even though the economy is in the grip of a credit boom.

The extraordinary step is intended to stave off deflation but it comes at a time when the Swedish economy is growing at almost 2pc and property prices are rising briskly. The bank has abandoned earlier efforts to curb asset bubbles by “leaning against the wind”.

The Riksbank cut the deposit rate to -0.75pc in what looks like a preparatory move to drive down the krona. Governor Stefan Ingves said the bank has a toolkit of extreme measures in reserve, including use of the exchange rate. The comment is the first hint that Sweden may follow Switzerland and the Czech Republic in imposing a currency floor through unlimited purchases of foreign bonds.

Lars Svensson, the former deputy governor and a world expert on deflation, said the Riksbank is still behind the curve and may eventually have to launch quantitative easing. The bank has been caught off guard by the precipitous fall in inflation, now expected to average -0.2pc this year. The worry is that Sweden no longer has a safe margin against a 1930s deflation trap if hit by an external shock.

The Riksbank faces an acute dilemma, forced to pick between the competing poisons of deflation or an asset boom. It is a variant of the Morton's Fork faced by a growing number of central banks around the world.

“The fact that the repo rate is now being lowered further will increase the risks associated with high household indebtedness. It is therefore even more urgent now that these risks are managed. Reducing the risks requires measures aimed directly at household demand for credit,” it said.

The ratio of household debt to disposable income has jumped from 120pc to 175pc over the past 12 years. It is expected to reach 185pc by 2017. Stockholm house prices have risen 8pc over the past year. “This trend entails a risk that the economy will develop in a way that is not sustainable in the long run,” it said.

The Riksbank has in effect washed its hands of the credit boom, leaving it to government regulators to control household debt with mortgage curbs, liquidity limits for banks and other "macro-prudential" tools as best they can.

“What the Riksbank is doing is something that a lot of central banks around the world are going to have to do: once interest rates approach zero, they are forced to think about far more radical instruments,” said Lars Christensen, from Danske Bank.

The Riksbank - arguably the world’s oldest central bank, with a tradition of bold monetary experiments – carried out a dramatic volte-face in July when it slashed rates and gave up trying to restrain asset prices. Governor Ingves was outvoted in what amounted to a policy mutiny.

The shift over recent months is a triumph for Mr Svensson, who resigned last year in a stormy dispute. He said the bank made a mistake by tightening before the economy had fully recovered, and then compounding the error by allowing itself to be distracted by the noise of asset bubbles. “Low inflation has actually increased the households’ real debt burden. Riksbank policy has been counterproductive,” he said.

“A lower than expected inflation rate increases the real debt burden. This may in turn contribute to the building up of financial risks and make it more difficult for households, firms, governments and countries to manage their balance sheets. As the experience of Japan since the 1990s has shown, such a spiral may be difficult to break out of,” he added.

Nobel Laureate Paul Krugman has compared the Riksbank’s premature tightening with the error made by the US Federal Reserve in 1937. The ECB made an even more serious mistake by raising rates twice in 2011, setting off the second leg of the EMU debt crisis.

The Riksbank is now fully aligned with the Yellen Fed in Washington, which argues that raising rates to stop asset bubbles merely destroys jobs for little useful purpose. Both are pitted against the Bank for International Settlements. The BIS says radical monetary stimulus may help invidual countries but only by displacing the problem onto others, leading to a “Pareto sub-optimal” for the world as a whole. It warns that speculative excess is reaching pre-Lehman levels, and calls on global central banks to take pre-emptive action before the bubbles becomes unmanageable.

What is far from clear is whether the Riksbank can get away with such policies. It may run into harsh criticism from rest of the world if it is seen to engage in "beggar-thy-neighbour" stealth devaluation at a time when the Swedish economy is expected to grow 2.7pc next year, and has a current account surplus above 7pc of GDP.

The institution enjoys a prestige beyond its size, a legacy of the great Swedish economists of the early 20th century: Knut Wicksell, Gustav Cassel, Bertil Ohlin and Gunnar Myrdal. It is watched closely as a pioneer in central bank theory.

The bank famously began “price targeting” in the early 1930s after breaking free from the Gold Standard. The revolutionary policy was the precursor of today’s inflation targeting. It enabled Sweden to escape deflation early in the Great Depression, suffering far less damage than countries that stuck doggedly to failed orthodoxies. more

Thursday, October 30, 2014

Renewable energy and developing economies

One of the truly encouraging stories about the coming Solar Age is that the most immediate beneficiaries will probably be those areas of the world that don't have an existing electrical infrastructure to displace.  That by itself is a critical advantage.  Add to that the fact that the poorest areas are also those that have the best solar sites.

As solar equipment gets cheaper, these facts will dominate.  The report below claims that poor nations are adopting clean energy at twice the speed of rich ones.  Perhaps we should be surprised that the number isn't six times the speed—maybe it's just a matter of time.  After all, solar has only been the low-cost option for a few years.

Whenever one is tempted to give up hope, it is always comforting to remember that we are very close to the day when energy (both its cost and availability) ceases to be the most important problem of economic management and becomes this nearly limitless source of prosperity.  Just remember, the argument that "power is everything" is not only an issue when you are running out, it is also true when you discover that you have an essentially infinite supply.

Wednesday, October 29, 2014

It is always about energy

One of the reasons that Apollo 13 is one of my favorite movies is that there is a scene where the ground crew is trying to figure out a way to get the crippled craft home.  They are talking about the various strategies when John Aaron, (played by Loren Dean) delivers his "power is everything" speech wherein he lists the many things that will fail if the batteries go dead.  It's quite a list and at the end, the crew is dead.  Now I have no idea if this scene is fictionalized but I know several things that make it true to life.  1) John Aaron truly was a man with more than his share of good judgment and phenomenal problem-solving skills.  He was in the room because of his abilities—not because he had a privileged upbringing or an "elite" education (Southwest Oklahoma State, anyone?) 2) The reason everyone paid attention to him was because these were rocket scientists who were forced to consider energy issues every day.  While most folks in the industrial countries live lives of such ease they can treat energy as just another detail, people who designed devices that could transport humans through the cold vacuum of space KNEW that energy is always a matter of life and death.

I have never been in space but I had an experience similar enough to make me shudder whenever I recall it.  It was a very dark February night in North Dakota.  The wind was howling along in the 30-40 knot range—enough to violently shake the car.  The temperature was around -25°F (-32°C) and dropping rapidly.  I was about 30 miles (50 km) from home on a road with almost no traffic or settlements and the gas gauge was in the red.  I was scared shitless.  I only had gotten my driver's license a few weeks earlier so I didn't have a lot of emergency planning experience.  I figured that if I ran out of gas, I might survive for two hours in the car or 10 minutes outside of it.  That was my "power is everything" moment and I have never forgotten it.

The story below is about the Germans contemplating the possibility that Russia could cut off her natural gas this winter.  Officially, the response to this possibility is that it might cause a few inconveniences but that good planning will pull everyone through.  But apparently, there are some John Aarons in Germany who are warning that everything most certainly will not be OK.  Their report was leaked to Spiegel.  Suddenly, the German grown-ups are having their own "power is everything" moments.

Everyone seems to be hoping that Russia will decide that it is in their best interests to keep selling their gas.  As Richter asks so arrogantly below, "What are they going to do with the gas that gets pumped on a daily basis to Europe, and particularly to the largest consumer, Germany? Inhale it?"  No mein Wolf, if they don't sell it this winter, they can always sell it next winter.  Germany will still need energy and replacing the infrastructure to substitute for Russian gas will require years of planning and construction.  In this case, the "power is everything" argument extends to the realms of geopolitical gamesmanship.

And economics.  One of the reasons why I find the economics profession so childishly goofy is that virtually none of them even BEGIN to treat energy seriously.  Perhaps instead of being miseducated at Harvard, Chicago, or Stanford, they might opt for one of those physics degrees from Southwest Oklahoma State.  Because Aaron was right, power IS everything!

Tuesday, October 28, 2014

Waiting for the other shoe to drop

This was a spectacularly beautiful fall here in southern Minnesota.  And last week the trees went out in a blaze of yellows and russets and oranges.  Every tree that can turn color did this year so the show lasted over three weeks.  And then it's done—those stunning leaves are replaced by naked branches shaking in the ever colder wind.  In a month, there will be snow on the ground but right now, winter is just a dull dread.

In some ways, I feel the same way about the course of human events.  We seem to be at an end of an era of flamboyant partying by a tiny elite that is about to crash with no alternatives in sight.  Our elections have become almost meaningless with voters forced to choose between different visions of plundering neoliberalism, but even if they were not and this election produced a mandate for major economic change like the one in 1932, who would be qualified to organize the new "100 days?"  We don't have political movements organized around progressive economic issues, our academic economists are hopelessly right-wing, there are no enlightened bankers in the mold of Marriner Eccles, and our media is historically illiterate so the public mostly is too.

Bad as it is here in USA, it doesn't seem much better anywhere else.  The great lefty awakening in Latin America seems to be running on fumes. China has made almost every developmental mistake possible so now her rickety prosperity rests on an environment so polluted, her cities are almost unlivable.  India has just elected a neoliberal crackpot to revive her economy—well good luck to that.  And the great neoliberal experiment that is the EU has now claimed so many angry victims, it seems destined for the scrap-heap of history.

Of course, the Greeks, Spaniards, and Portuguese etc. have been furious / depressed for years now.  But as is always the case, economic rot at the bottom of the social order tends to spread upwards so now Germany, which accounts for 30% of the activity of the EU, is now feeling the pinch.  Unfortunately, things will have to get very bad before Germans will rethink their organizational ideas.  With few exceptions, this is a neoliberal monoculture.

How long will the naked branches wave at the greying skies?  How cold and deep will be the winter?  And is there any reason to believe that there are shoots of new life waiting for spring to blossom forth?  The only thing that inspires hope is that this misery is the result of believing really, REALLY, dumb ideas.  Humans have progressed out of greater difficulties than this.  This misery is wholly optional—all we need to do is change our minds.  Unfortunately, that is both the good news and the bad news.

Monday, October 27, 2014

Micropower starts to take over

Amory Lovins has been arguably the greatest proponent of energy efficiency that the USA has had in the last 40 years.  A MacArthur "genius" award winner, he not only gave the language the concept of "negawatts", he actually went out and tried to demonstrate his ideas with actual buildings.  His effort in Aspen Colorado was innovative and expensive and probably proved above all that energy efficiency was going to be a LOT harder than it looked.  But for an academic, it was a good solid effort.

My brother also pursued the idea of getting a house to net-zero, but because his budget was so much smaller, he had to rely on the cleverness he had acquired over the years as a builder.  I am not certain if he or Lovins actually got to net-zero first but the fact that it was even close says quite a lot about the changing environment for such projects.  Whereas Lovins set about organizing a political movement that saw him bringing his message to thousands, my brother made the final leap to net-zero when the required solar panels cost less than a new pick-up truck.

So here we see Lovins marveling that the micropower movement is taking off without the big political struggle that so consumed much of his life.  Cheap solar panels will do that.  And maybe that's the big lesson here—all the struggle over who is financing which knuckle-dragging climate change denier may suddenly be rendered moot because solar power is rapidly becoming the low-cost option.

Sunday, October 26, 2014

Ocean warming gets better instrumentation

My favorite professor would repeatedly stress that air pollution was just a temporary stage en route to water pollution.  The big topic in those days was acid rain which was caused by the combination of sulfur oxides and water in the atmosphere.  But the principle is the same.  Anything in the air is almost certainly going to wind up in the water supplies.

In the case of CO2, the fact that oceans are the final resting place of much of it is hardly a surprise.  We are already seeing the oceans becoming much more acidic.  But water is also a FAR more powerful heat sink than air.  It may be that the atmosphere has already reached some upper limit for heat retention.  For someone like me who has lived on the high prairies, this does not comes as much of surprise because I have watched hot days turn into spectacular thunderstorms and tornadoes followed by a sharp cool-down.  It's like the air can only get so hot before it goes berserk and shakes off the excess energy in sometimes violent spasms.

Unfortunately, the limits to how much heat water can absorb is much higher.  And while we seemingly keep bumping up against the the heat absorbing capacity of air, this does not seem like much of a problem with the oceans.  Anyway, it looks like the scientific community is about start conducting serious measurements into the heat being absorbed and retained by the oceans.  With the polar ice melting at unprecedented rates, my guess is that they are about to find that ocean warming is an even more serious problem then atmospheric warming.

Saturday, October 25, 2014

The fracking con

Nothing, but nothing so dramatically confirms the end of the Age of Petroleum like the practice of fracking.  The whole idea is based on the notion that shale formations contain gas and oil deposits that can be liberated if those formations can be fractured.  There is not a lot of petroleum in most shale formations, but there are many them which drives the fracking boosters to proclaim that they are the future of fossil fuel production.

Well, no.  The very idea of fracturing stable underground stone deposits require folks to ignore just how energy-intensive this process is.  So from the git-go, the whole enterprise is hobbled by the reality that maybe fracking will just barely produce more energy than it consumes (on a good day).  Basic rule of energy production—if it is thermodynamically preposterous, the economics will never work out.  And because fracking is so energy-intensive, it is also dangerous, environmentally insane (it can actually trigger earthquakes), and EX-PEN-SIVE!

So far, the various fracking operations have been able to keep going on borrowed money.  Borrowing so much money is usually pretty difficult but because there are so many people who want to believe the fossil fuel party cannot end, the spigot is still on in spite of growing doubts that extracting energy using fracking is ever likely to be profitable using any accepted definition of the term.

So the fracking enthusiasts have been forced into using that old standby whenever the facts contradict the hype—they tell big juicy lies.  When the fracking bubble crashes, the real economy will take a serious hit.  Will it be as serious as when the real estate bubble collapsed under its enormous pile of BS in 2008?  Probably not—but since so much monetary ammunition has been used up to counter the baleful effects of the Crash of 2008, even a small hit could get very serious.

And like the collapse of the real estate bubble, there will be plenty of folks who saw through the fracking hype.  gjohnsit over at Dailykos will be one of those who can say, "I told you so."

Friday, October 24, 2014

Wal-Mart and solar sabotage

The idea that the Wal-Mart clan might not be the most enlightened folks on the planet when it comes to solar power should hardly surprise anyone.  Accidental billionaires are some of the most predictably useless folks alive.  These people are hopelessly careless—the product of a lifetime of folks bailing them out from their mistakes because with enough cash, almost any screw-up can be erased.

So this story is not a tale of some hard-nosed characters out to sabotage roof-top solar through brilliant organization.  Rather the Waltons are just kicking in to fund pet projects of their fellow useless rich-kids.  In this case, it is the utilities who see the handwriting on the wall and want to stave off the bad news as long as possible.  And yes, the utilities probably can delay the inevitable for a while.  But solar has already become the low-cost option in thousands of locales around the world.  It's going to damn tough to stop this juggernaut now that it has started to roll.

The real issue here is that a bunch of mouth-breathers will be able to slow necessary progress for no other reason than they have too much money and they can.  Besides, sabotaging progress towards solar probably meets with approval down at the yacht club.  Solar is the direct opposite of conspicuous waste—the very sort of waste that makes folks buy yachts in the first place.  So this story is not so much about the fact that the Walton heirs are useless, corrupt, and just plain evil, it is rather about the Leisure Class interests they represent.

Thursday, October 23, 2014

Can economic reality abort Cold War II?

All the lies and warmongering we have been subjected to over the plight of the Ukrainians these last few months may come to a crashing halt for one simple reason—the global economy is profoundly threatened by the sanctions placed on Russia.  This is scary.  To even imagine that folks could consider backing down from a potential Cold War II, after all the investment in that buildup of hostilities, over something like economics means quite a few things—none of them very good.  Mostly, it means that the European economy is so fragile that no one in their right mind wants to risk crashing it over something like the government of the Ukraine.

One of the basic beliefs of this site is that the Leisure Classes can do significant damage to the real economy before it starts to backfire on their let's-pretend economy.  In the case of Europe, there has been massive damage to the real economy since the Crash of 2008.  In fact, it could be argued that there has been no meaningful recovery from the damage it caused.  Six years of a brutal depression felt by millions is plenty of reason that a nasty 2008-like collapse could happen again.  In fact, it is almost inevitable.  All it needs is a trigger and the self-inflicted wounds caused by sanctions on Russia could easily become the triggering mechanism.

Soon, the Leisure Classes must ask themselves, "Which do we love more—war or money?"  As much as those folks worship war, my guess is that in the end, they love money more.  This is sort of an unusual question because a true member of the Leisure Class thinks that he will never be forced to choose—he believes that starting wars leads to money and has many historical examples to prove him right.  But this time, something—maybe bad "war karma", means that this utterly needless fight over Ukraine is going to bankrupt some of the very rich too.  This includes some formerly rich nations.

We will see.  The German intelligence services recently released another bogus report on the shoot-down of MH17.  Still nothing on the missing tower tapes, etc.  But they managed to (sort of) absolve the Russians.  Is this the opening to an end to sanctions?  The following end-to-sanctions story comes from UK—a place absolutely awash in bellicose Russkie-bashing for several years now (note, Halligan really wants to blame the French and Germans if sanctions end.)

Wednesday, October 22, 2014

Laissez-faire economics

The claim that economics was a "science" as represented by its elevation to "Nobel" status (and other similar events) was soon followed by an enormous move towards reactionary ideas.  It was if the profession decided that if you threw enough math at economics, soon you would be sounding like J. P. Morgan.  It seems strange that adding powerful computers and high-end math to the investigation of economic behavior would lead to a generation of pre-industrial knuckle-draggers and some of the most primitive thinking since the decline of feudalism, but that is what in fact happened.

Because I was there when the economics department of my university got an IBM 360, I was very much caught up in the excitement of combining powerful computers with economic research.  Unfortunately, I lost interest in econometrics almost as soon as I understood how it was done.  My thinking went through four stages:
  1. Holy shit! Do you see what you can do with a computer's help.
  2. Learning computer modeling puts you in a small class where only other members of the caste can truly understand you.  This opens up huge avenues for fraud:
  3. The main reason to learn stats is to prevent someone else from committing fraud against you.
  4. More and more people will gain access to the power of statistical analysis.  When that happens, the stratification of importance within the profession should be a matter of who asks the best questions.  Very soon, it will not be about who has the biggest computers, it will be about knowing enough to ask important questions.
Disillusionment began to set in.  I began to suspect that all the really interesting economic questions were FAR beyond the ability to reduce them to mathematical formulas.  Watching computers being applied to other pursuits than academic economic investigations over time only confirmed those suspicions.
  1. Precision manufacture is an obvious application for computing.  And for many applications, this worked magnificently.  Any design that combined straight lines and circles could be easily described for computerized manufacture.  Unfortunately, the really interesting design problems can NOT be reduced to formulas.  A car's fender, for example, can not be described using formulas—it can only be described by specifying an assemblage of multiple points.  If math formulas cannot describe something as common and uncomplicated as a car fender, how can it hope to describe human behavior?
  2. When people started using computers for animation, it soon became apparent that human motion was almost impossible to model correctly.  After a great deal of effort, the animators eventually put tracing balls on real humans and recorded that motion before transferring it to the animated character.  Formulas failed to describe simple human behavior—like a toddler trying to walk.
Lately, I have discovered a Swedish economist who did NOT give up on econometrics merely because it sounded so impossible.  In fact, he still teaches the stuff.  But for the rest of us, he systematically destroys the pretensions of those who think they can describe human behavior with some basic formulas.

And here we see what happens when economics substitutes the appearance of scientific rigor for the real thing.  Unfortunately, real lives are destroyed in the process.

Tuesday, October 21, 2014

Free trade versus autarky

Autarky is one of those words that has fallen so far out of favor that it would probably stump a panel of "Jeopardy" champions—even though it means self-sufficient (a virtue that is still widely prized.)  Actually, this contradiction makes a lot of sense.  True self-sufficiency is astonishingly hard to achieve and on a individual level, probably impossible.  There are small groups that make a fine try at being self-sufficient.  The fascination with the Amish is mostly due to their ability to make their way economically outside of the technostructure.  But as the hippies discovered with their back-to-the-land efforts, the freedoms promised by self-sufficiency come at the price of a lot of very hard work.

Autarky as an economic strategy was given a bad name because the Nazis tried so hard to create a self-contained economy.  In this case, autarky was merely another preparation for warfare.  And while the Nazis came quite close to their goals of economic self-sufficiency, there were still plenty of gaps in their desire to limit trade to only allies.  Even (especially?) on a national level, autarky is so hard to achieve that even a totalitarian state cannot pull it off.

Which brings us to today's featured article.  It is from Radio Free Europe so is probably as establishment / CIA / State as these things get.  Normally, I would not bother to read such obvious propaganda, but I am glad I read this one.  Because buried near the bottom is that that archaic and disused term—autarky.  Yes indeed, we now have a believable explanation for the irrational hostility to Russia and Putin.  Not only does Putin's Russia want to reorder the existing, dollar-based, global trading system, it has the possibility through the strategies of autarky to escape the shit-storm such a move has triggered.  And according to this piece, Putin is appointing a new generation of bureaucrats who share his vision.

The neoliberal "free-traders" did an amazing amount of damage to Russia.  That is not so surprising as unfettered trade turns the activity into this glorious opportunity to rip off the Producer Classes.  And that is precisely what happened during the Yeltsin days.  Nobodies with zero relevant skills made off with whole industries and got stinking, filthy, rich by exploiting the weaknesses in the philosophy of "free" trade.  And not so surprisingly, the people who got rich overnight at the expense of the Russian middle classes now worship neoliberalism and try to ensure that likeminded souls have all the important economic jobs.  And this is what Putin is trying to stop in the name of patriotism and national pride.  And he is recruiting his foot soldiers from the provinces where self-sufficiency is still valued.

Just to make sure we understand just how serious this conflict is, there has been a recent exchange between Mikhail Khodorkovsky, one of the neoliberal pirates who almost made off with much of Russia's oil wealth before being sent to Siberia for corruption and fraud, and Igor Strelkov, a man who has a clear sense of the damage Khodorkovsky caused and why Russia must resort to a state of near war to defend itself.  Khodorkovsky's speech was given to the 2014 Freedom House Awards Dinner on October 1.  It is full of the arguments used by all the neoliberal hacks that populate both parties in USA.  Strelkov, on the other hand addresses his Russian readers with pitches to their patriotism, historical Christian roots, and the raw memory of the catastrophe of the Yeltsin days.  Our politicians will certainly not understand—it's probably why none of them have Putin's approval ratings.

Monday, October 20, 2014

The USA military does NOT get it on climate change

Last January, I attended a climate change conference that featured a TV personality who had come to agree with the climate scientists after a lifetime of denial.  Not surprisingly (I guess) he peppered his speech with appeals to deniers like he once was—quoting the Bible, Ronald Reagan, etc.  At one point, he cited some examples of how the Navy was planning for the changes that climate change would bring to their operations.  "The Navy gets climate change," he shouted excitedly.

I thought I was going to be sick.  After a lifetime of passionate interest in the history of USA aerospace, there was one thing I KNEW about the military—almost every bit of their equipment requires massive amounts of premium fuels.  Navy jets, because they must operate off carrier decks, are some of the biggest gas hogs in the air.  Suggesting that these exemplars of conspicuous waste understood the issues of climate change was a bit like suggesting that Hugh Hefner was an expert on growing old gracefully with your lifetime partner.

In fairness I would imagine that the Navy, as part of the USA industrial state, is probably much closer to "getting it" on climate change than the folks who think a solution will come from marching behind large puppets and clever signs through the streets of New York.  Even so, I will not give the military much credit for understanding climate change until they stop using massive displays of waste as a form of chest-pounding.  I mean, considering that 99% of their potential targets are essentially defenseless, why exactly do they need supersonic aircraft?  How much fuel is required to demonstrate readiness or ferociousness?

Sunday, October 19, 2014

Wind power in Scandinavia

A friend who spent a significant part of his childhood with his father—a very successful Mexico City architect / property developer—is someone who can always be counted on to provide the views of the Latin American oligarchical classes.  One day we were discussing the boast made by Hugo Chavez that Venezuela had the investment capital to provide her with the "industrial density of Sweden."  Friend laughed uproariously and then said, "Well, that may be true because she has an almost continuous trade surplus from her oil exports and can buy whatever machines she could possibly want, but what she is missing are the Swedes to run them."  (This is the sort of remark that almost always elicits a nod of approval in Minneapolis so friend was probably being more charming than analytical, but it certainly has a large element of fact built in.)

I thought about that remark today while reading how the Nordic countries plan to manage the VERY tricky transition from coal and gas to wind power as the way to power their societies.  A lot of fossil-fueled electrical generating capacity must soon be mothballed yet this does not seem to cause much distress.  For the Nordics, reducing the national carbon footprint is just another problem to be solved—and these are people who solve complex problems for pure enjoyment.

As my friend would point out, almost everyone has the same set of energy problems.  What they are missing are the Swedes (Norwegians, Danes, Finns).

Saturday, October 18, 2014

Oliver Stone goes to Russia

As someone who thoroughly appreciates Oliver Stone's latest attempts at retelling history, I am quite delighted to see he has gone to Russia to cover the latest episodes in east-west relations.  Apparently, he gave an interview to a big Russian newspaper that is really too good to miss.  So here it is.  At one point in the introduction, the question is asked,
how is it possible, that this man, not a professional journalist or historian, understands what is going on in Ukraine and Russia and the mess the US has gotten itself into, better than the combined western media and Washington policy makers?
As someone who is nearly the same age as Stone, I'd like to give that question a shot.  A couple of years ago, I was talking with a highly educated German who has a major job at the University of California, Berkeley.  As one point he expressed some dismay at the narrow worldviews of many of his colleagues.  I said, "What do you expect?  Even the best-educated Americans know almost nothing about recent history and what they think they know, is usually wrong.  For example, almost no one in USA born after 1945 has any idea that USSR fought the Germans in WW II."  He looked at me incredulously, "What do such people believe?  That World War II was fought only between Germany and UK / USA?"  "That is precisely what I am saying", I replied. "Not only do we not know that almost every important battle of WW II was fought between the Germans and the Red Army, we are taught by omission that they never happened—they don't even come up."

Somewhere along the line, Stone managed to learn the history of the Great Patriotic War.  And that makes all the difference because it is quite literally impossible to know these historical facts and believe the Cold War BS that comes from the State Department.  At this point, it becomes obvious that for the paid liars at State, the near-universal historical illiteracy of the American public is a feature, not a bug.