Tuesday, May 31, 2011

The New-Economy Movement

Long-time activist Gar Alperovitz has an interesting article in The Nation about the emerging structure of "The New-Economy Movement.," a mostly uncoordinated group of non-profits companies and foundations, and citizen co-operatives, that have explicitly rejected the central tenet of modern Anglo-American capitalism that the profit motive reigns supreme. These are new, and some old, "institutions whose priorities are broader than those that typically flow from the corporate emphasis on the bottom line."

Among groups mentioned are the The American Sustainable Business Council, an alliance of 150,000 business professionals and thirty business organizations, whose "members are “triple bottom line” companies and social enterprises committed to the environment and social outcomes as well as profits"; the Business Alliance for Local Living Economies (BALLE); and Mondragon, one of the largest and most successful cooperative enterprises in the world, based in the Basque region of Spain, with almost 100,000 workers.

Alperovitz notes that these types of organizations are signs of a growing realization that our current economic system is not sustainable. The financial and economic crisis of the past three years has forced more and more people to question the basic principles of Anglo-American capitalism and its over-weening emphasis on profit.

Unfortunately, Alperovitz does not discuss the ample precedents in American history for these new organizations - such as the cooperatives established by the Farmers Alliances in Texas and other states in the 1870s and 1880s. He does mention the State Bank of North Dakota, but fails to mention the Non-Partisan League, the political organization that seized control of North Dakota in the 1910s and established the Bank.

How far will the banksters go in Greece

The word on the street is that the situation in Greece may deteriorate to the point where a military coup might be an option.  Goodness knows such a thing is possible--Greece actually did have a colonel's coup in 1967 which lasted seven years.

Monday, May 30, 2011

The tourist attraction that partly explains Minnesota politics

Progressives are holding a convention in downtown Minneapolis in the middle of June.  Those attending the Netroots Nation need only walk about 15 blocks from their convention center to see the city's best landmark.  It is a bridge over the Mississippi River built of locally-quarried stone in a series of 23 arches.  Those of us who love bridges often claim that there is no such thing as an ugly bridge but even by the lofty standards of bridge aesthetics, the Stone Arch Bridge is a stunner.

Begun in January 1882, the bridge was open to traffic by November 1883.  Using 100,000 tons of limestone and granite, it took less than 23 months to build at the bargain price of only $650,000.

Upstream to the left--East Bank straight ahead

Sunday, May 29, 2011

Bare knuckle economics

We have generally been highly critical of the Obama administration and its economic policies. However, below I link to an unique and very informative DailyKos diary that examines the little-heralded efforts of the administration to improve the economic lot of average Americans by trying to support the manufacturing sector of the economy.

Now, while I could easily argue that these efforts are "too little, too late," they do constitute evidence that there are some in the Obama administration who have not entirely fallen victim to the Leisure Class (Predatory Class) mentality described by Thorstein Veblen and our own Jon Larson. In this case, the writer identifies the individual: Ron Bloom, former official of the United Steel Workers Union, and currently special advisor to Tim Geithner and White House director of manufacturing policy.

A Memorial Day for the middle classes

As living standards for the Producing Classes stagnate (at best) or decline, it should be remembered that the forces causing these economic problems are global.  The obvious strategy would be for the Producers to fight back with some unity and solidarity.

Solidarity is an especially difficult notion for folks in USA to accept.  They don't understand that the forces which are ruining the lives of people in Spain or Greece are the same ones that have destroyed their communities and made it impossible for their children to get jobs and move out of the house.

Saturday, May 28, 2011

The Euro, the banksters, and Greece

The battle for Greece's income stream will not end anytime soon because so much is at stake.  On one hand, you have the the living standards and even the survival of a whole nation's people. On the other, you have the operating assumptions of a gang of greedy folks who believe they have invented a method of permanently enriching themselves.

Friday, May 27, 2011

Failure to curb oil speculation indicates continued economic failure of Obama administration

Most people on the left in the U.S hailed Barack Obama's election as President as proof of the man's political genius. Here was an African-American, with the middle name Hussein, who defied the political odds, to win the White House. Never mind that the Republicans had mis-ruled the country into the worst financial and economic collapse since the First Great Depression (Krugman is now writing about this period we live in being the third big depression in the country's history), causing an overwhelming number of Americans to demand a radical change in policies. In this wave of euphoria from November 2008 on, those few (such as your correspondents) who warned that Obama's choices of economic advisers and officials were danger signals that Obama was going to error badly on economic policies, were ignored or even shouted down. (See also The Bankers on Obama's Team, from Mother Jones, January 2010.)

Energy and the Producers

Because the public face of the global energy companies is provided by some of the most wicked pirates to have walked the planet, it is easy to forget that energy is mostly a Producer Class matter.  Producers find the oil and design the platforms refineries, and distribution systems.  They built and run the nuclear power plants.  Etc.!

Producers are also the prime beneficiaries of increased energy consumption.  While bankers and lawyers have roughly the same lives they had 500 years ago, the lives of folks like farmers and construction workers have changed so dramatically with the coming of power tools as to barely make comparisons meaningful. For example, construction work was once done mostly by forced labor--now it is a satisfying occupation (when there is work).

And then there is the question of scale.  The energy business is so ginormous that it literally boggles the mind.  Study energy issues long enough and there will be something that just stops you.  For me, it was first a description of the steel used to drill for oil back in 1960s North Dakota. But it could be anything because the minute you start discussing the energy needs of a planet with 6.5 billion potential consumers, the numbers and the technologies get very large, very fast.

Thursday, May 26, 2011

Of course climate change is real

One of the things that really bothers me about folks who argue using Aristotelian logic is that they truly believe that if they can find a flaw in your argument, your argument has been destroyed.  It's the "reasoning" behind the "Al Gore is fat" line so many of the ignorant right like to take.  The mistake they are making is confusing Al Gore, the spokesman, with Climate Change, the issue.

And Al Gore IS a fat target. His movie "Inconvenient Truth" (IT) ends on a childishly optimistic note that suggests fixing the problems will be relatively easy. He jets around in a private airplane. He promotes "Cap and Trade," a Wall Street swindle based on Tetzel's concept of indulgences (as long as you pay--you can keep on sinning.)

Worst of all, Gore took his movie money and built himself a huge energy pig of a mansion.  This final crime against the serious evidence in IT is the one that bugs me more than all the rest because I know how hard my brother has worked to build an energy efficient house and understand what he could have done with more money.  Yet here is Gore with plenty of money and he doesn't even TRY to build a showcase for better energy-saving technologies.

Unfortunately, it IS possible to diminish an argument by making its prime spokesman look ridiculous.  But some of the prime sources of information haven't helped much by making predictions about sea levels, etc. that have been sort of goofy.

Here is what we know about Climate Change.  The atmosphere and oceans are retaining more heat.  Heat is an expression of energy so what we know is that energy has been added to the systems that produce our weather.  That is what we KNOW.  How that plays out is just speculation.  Now some guesses will be a lot better than others and it is likely that our predictive abilities will improve over time, but at no point do the failures of these guesstimates for the outcome of climate change interfere with the basic fact that our atmosphere now has more energy than a few short years ago, and the increasing that energy will probably be a bad thing.

Wednesday, May 25, 2011

How to run an economy

In their 9.26.10 issue, Newsweek magazine discussed a theory of various economic regions and how well they performed.  At the top of their list of economic performers was a grouping they called:

Tuesday, May 24, 2011

The financial elites are in serious trouble

The power of the masters of the universe (MOTU) has managed to withstand some serious battering of late.  Considering how often these folks produce outright disasters, it is a tribute to their magic stories about money that they have not triggered a return of drawing and quartering.

Monday, May 23, 2011

Why are banksters still running things?

One of the questions that seems not to be asked about Dominique Strauss-Kahn is why such a pig gets to make life-and-death decisions about so many people.  Apparently in the world of finance, evil, corrupt, and hopelessly stupid are not enough to discredit you.  Even forcing a hotel maid into sex acts she doesn't want will still not eliminate all of your support--at least not with the chattering classes of France.

Sunday, May 22, 2011

How Newspapers in America are Killing Themselves

Tip-o-the-hat to Avedon for picking this up from somewhere: Michael Moore at the Fairness and Accuracy in Media 25th anniversary conference a month ago.
[13:28] Newspapers are having a hard time. We hear this all the time, right? They're having a difficult time making it these days because of the Internet. The Internet's killing the papers. Really? Really? How many papers are going under in Europe? How come the papers there aren't dying? Why are the papers there still surviving? I think Europe got the Internet, like a year or two ago. Pretty certain that they have the Internet in Europe. Why is it that in country like Sweden they sell a daily newspaper per person for the entire population that's [one for every] man, woman and child every single day; or a city like London has eleven daily newspapers; why newspapers still continue to thrive in Europe but are dying here?
[14:25] Well I'd like to put forth three reasons. Number One, the newspapers in this country and the media in general made a decision some time ago to participate in the dumbing down of our society. And I received a...it's an odd thing to want to make your customers stupid because by making them stupid they won't care to read what's in your paper. You would think you want your customers smart. And - about fifteen years ago I received a memo, a copy of a newspaper and this had gone out from the publisher and the managing editor and it was encouraging writers to try and keep words at three syllables or less, occasionally the fourth syllable word was O.K. It was just the most bizarre thing to read. ...
[15:58] Number Two, in the seventeen presidential elections between 1940 and 2004 the majority of the American daily newspapers, in fourteen of those seventeen elections endorsed the Republican for President of the United States, in fourteen of the seventeen presidential elections in during that time span. So, in other words, let me get this straight, the papers were endorsing the party that wanted to eliminate the Department of Education, that wanted to destroy the teacher's unions, and have funding for education be on the lowest rungs of the ladder. In other words, helping to make people stupid and illiterate.
[17:38] Third reason, the reason newspapers are not having as hard of a time in Europe as they are in this country, and that's not to say they aren't having a hard time because the economy and what has happened globally has affected every business including newspapers no matter where they're at. But their business model is different, for the most part, than it is in this country. Our business model for our papers is the primary source of revenue to fund the newspaper is advertising; circulation is number two. It's the opposite over there.
I am not able at this time to find a link to any other transcript, or to any video of the conference. But Moore's observations strike me as entirely accurate. I have seen a few other analyses of the plight of American newspapers, and they all boil down to the same thing: when newspapers based and managed in one city or town were taken over, big corporate management almost invariably began the process of dumbing down. They cut staff, especially at the investigative reporting desks, lost touch with the local community, and imposed their own mediocre, corporatist-tainted content.

Not content to prove they were stupid by thus destroying newspapers all across America, big corporate managers then proved it again by wondering out loud why their "business model" was failing. Idiots.

Readers of this blog will note how often Jonathan finds interesting material at the websites of European newspapers - and how infrequently in U.S. newspapers.

Avedon's link was to her preceding post, in which she writes:

The media is perfectly happy to be adversarial about what politicians are talking about when it suits them. Unfortunately, these days, "when it suits them" means "when it suits Republicans to be adversarial about what Democrats are saying". Because, of course, these people are just a bunch of millionaire celebrity court scribes, and they don't give a toss about what the rest of the country needs or wants. Which is most emphatically not what a free press is supposed to be about. . . . they're not a free press - they are paid shills for the corporatocracy. . . .
And, here is the FAIR page of links for the question What's Wrong With the News?

Saturday, May 21, 2011

The potential for small-scale power generation

One of the better ways to lose friends is to suggest some sort of energy solution to doesn't work as advertised.  So generally speaking, I don't make recommendations and if asked directly, tend to respond with conservative bromides like, "Don't buy any technology they aren't selling at Home Depot or Target" and "Leave energy matters to qualified professionals."

However, I have seen some recent examples of small-scale energy production technology that has gotten through my formiable resistance to the very idea of such scale.  I am pretty certain that photovoltaics are now reliable and cost-effective.  The jury is still out on small-scale wind.

Friday, May 20, 2011

Will Spain be the next 'Iceland'

It seems like there are plenty of Spanish youth who want an 'Icelandic' outcome.  The war of the banksters against the rest of the planet looks like it about to see another battle.  It is a battle the banksters can easily lose.  After all, the whole concept of a 'paper tiger' seems like it was invented for the creditor classes.

Thursday, May 19, 2011

Remember when this country was inventive?

During the Internet bubble of the 1990s, I used to run business cable news in the background of my day just to listen to the irrational exuberance.  My favorite moment came when CNN's Lou Dobbs asked an executive from Boeing about his Internet strategy.  Now I love the Internet about as much as anyone and it had been very good to me, but it never occurred to me that an exciting website would help Boeing build or sell better airplanes.  The Boeing guy answered politely but it was clear he thought Dobbs had gone insane.  And he was right--not long after, Dobbs left his cushy gig at CNN for an Internet start-up that soon crashed and burned.

I mention this because the main element of the Internet exuberance was the breathtaking insistence that this was the most innovative development in human history.  The Internet boosters had a point--the idea that all of human knowledge would soon be at the fingertips of anyone with the slightest interest WAS pretty exciting.  But the truth was that most of the Internet hype revolved around absurd ideas like Pets.com.  And while the potential for social and technological innovation in the Internet era was real, the actual innovation was far less than with previous developments like rural electrification or the coming of widespread refrigeration.

Wednesday, May 18, 2011

J P Morgan Chase Shareholders Meeting Held Behind a Moat

The recent shareholders meeting of J.P. Morgan Chase, one of the four largest banks in the U.S., and an alleged serial violator of mortgage servicing laws and contracts, was held at J.P. Morgan Chase's property in Columbus, Ohio. According to reports, the entire building is surrounded by a moat. FireDogLake has a video of protesters crossing the moat as they try to approach the building to disrupt the meeting.

FDL also carries an excerpt from a Washington Post Online article, with this instantly classic quote of an exchange within the meeting between a dissident shareholder, and J.P. Morgan Chase CEO Jamie Dimon.
Inside, several shareholders spoke out against the bank’s handling of mortgage foreclosures.

“As a person of faith, my God believes you shouldn’t take advantage of people when they are down,” said Dawn Dannenbring of the community group Illinois People’s Action, addressing CEO Jamie Dimon. “Do you believe in the same God I believe in?”

Dimon answered: “That’s a hard one to answer.”

Yeah, Dimon would be one of those banksters President Obama called, two years ago, a "savvy businessman." Obama's remark was actually about Goldman Sachs' CEO Lloyd Blankfein, which allows us to remind readers that Blankfein infamously argued that he and his bankster chums on Wall Street were "doing god's work."

So, it's quite an important question to determine exactly which god Dimon and Blankfein believe in, and what "work" that god has directed be done.

What a charming time for the IMF

There is a widespread outbreak of schadenfreude over the arrest of Dominique Strauss-Kahn. Unfortunately, he was arrested for assaulting a maid--NOT for his far more serious crimes perpetrated by the IMF on his watch against billions of victims.  Nevertheless, it was deeply satisfying to see a bankster on Rikers Island for SOMETHING!  Now if we could put about 10,000 more of them on Rikers for their crimes against the economy, we would be on to something.

The People vs. Goldman Sachs

(Note: This post of Tony's was lost a week ago in the big blogger crash.  I don't even want to think about the hassle that loses a post for a week.  I guess I am forgiving because I remember when computers would do this crazy stuff ALL THE TIME.  Of course, I can be blase about my blog because almost nothing I write is especially time critical.)

Compared to the billions of dollars Wall Street can spend to deploy thousands of lawyers and lobbyists in its defense, the few people who dare to reveal Wall Street's crimes to us are truly Promethean heroes. Matt Taibbi has been utterly fearless in his complete disdain and scorn for the Wall Street Masters of the Universe. It was Taibbi who memorably wrote that Goldman Sachs is a "great vampire squid wrapped around the face of humanity relentlessly jamming its blood funnel into anything that smells like money."

Taibbi has now given us a list of particulars of the extreme criminality of Goldman Sachs, culled from the 650-page report recently released by the Senate Subcommittee on Investigations, chaired by Democrat Carl Levin of Michigan. As Taibbi writes: "the Goldman section describes an ongoing crime — a powerful, well-connected firm, with the ear of the president and the Treasury, that appears to have conquered the entire regulatory structure and stands now on the precipice of officially getting away with one of the biggest financial crimes in history." Here's the beginning:

Tuesday, May 17, 2011

Elevator Speech #9--The pursuit of clarity

One of my favorite words that I rarely get to use is epistemology.  The term was introduced by the Scottish philosopher James Frederick Ferrier (1808–1864).  Essentially this word covers three subjects
  • What is knowledge?
  • How is knowledge acquired?
  • How do we know what we know?
The word epistemology has fallen out of favor for many reasons but I like to think it is because the Producers came up with the ultimate answer to these questions--experimentation.  Knowledge is what we can demonstrate.  We acquire that knowledge through experimentation.  And we know what we know because the experiments are published and we can either choose to replicate them or believe the original experimenters.

Unfortunately, philosophy has a long tradition of teaching that we "really cannot know anything."  Of course, when most of this philosophical sighing was originally written, humanity actually didn't know much.  When Montaigne, the father of such skepticism wrote in the 16th century, we didn't even know how fire worked.  We knew nothing about electricity, chemistry, or physics either.  The idea that about 1/5 of the gas around us was oxygen wouldn't be known for a couple of centuries.  So a complaint that was once a sign of intellectually honesty has become a sign of profound intellectual laziness in a world were we can measure the gasses in our atmosphere to six-decimel precision using fairly cheap instruments.

But oh what cheap excuses the debates over epistemology provide! "If one can never really 'know' anything, goes the 'reasoning' of the dullards, then why should anyone put forth the effort to learn anything?"  These folks even have an answer for the Producers that goes something like, "Since your information is always open to revision, why should I learn something that will be obsolete in a few years?"  And so the honest debates over epistemological questions become an alibi for lazy students everywhere.

Because the real economy runs on information that not only can be known, but must be known, the tolerance--nay insistence--of a culture for teaching and perpetuating the intellectual cop-out that nothing can really be known can only have dire consequences.  It might be argued that the economic decline of the USA economy since 1973 can be largely explained by this factor.

I settled my own epistemological questions during the early research for what would become Elegant Technology.  I was hunting for a reasonable explanation for the recession of 1981-82 and making little progress.  I had tried reading political economy, business magazines, advertising publications, and philosophy.  I was a good little Liberal Arts graduate so I organized my search like I had been taught.  And while it was probably a good thing to read Marx and Nietzsche and Keynes, I felt I was just getting nowhere.

Then one warm summer night, a friend and I went for a drive.  He had actually gotten his degree in Philosophy and I wanted to talk about the practical epistemological riddles I had to solve to understand a financial calamity that had caused peaceful farmers to shoot their bankers.  By the end of that drive, I had decided that by setting up some simple epistemological "rules", I could eventually answer my big questions.

  • Since I did not know where my answers could be found, I decided that I would evaluate the factoids I discovered with a simple question--is the information beyond reasonable debate?  If it was, it was a keeper even if I had no idea why it would ever be important.
  • From little factoids grow mighty interesting truths.  No information is too small or unimportant so long as it is beyond reasonable debate.

From these two principles, an interesting worldview emerges.  If you limit your pursuit of information to beyond-debate factoids, you tend not to get sidetracked by idle speculation and weird conspiracy theories.  This process is amazingly flexible--if new information arrives, one merely adjusts the relevant factoid and while an altered factoid will affect the edifice built around it, it will rarely destroy the larger truth being constructed.

Of course, piling up information by itself doesn't lead to anything more intellectually stimulating than any other form of collecting.  For a bunch of little truths to become a big truth, there needs to be a theory to guide the assembly.  And there is no better place to find theory than to study history.  Not only do you find a defense of the best experiments of the human race, you also get a superb list of those things that should never be tried again.

Big truths constructed from little truths tend to hold up amazingly well.  Elegant Technology was mostly finished by 1987 and yet if it were rewritten for today, only a very few sentences would need to be changed.  This durability of ideas is a remarkable demonstration of the power of a Producer Class epistemology that is rooted in that most useful command in any language, "Show me!"

Monday, May 16, 2011

Final Testing on Beijing–Shanghai High Speed Rail, While US Dithers

The Chinese have begun final testing of their new 819-mile high-speed rail line between Beijing and Shanghai. They have lowered the speed, to contain costs and to make tickets less pricey. Meanwhile, in the United States, conservatives and economists continue to obstruct efforts by the national and governments to get the country moving forward. In California, the California Legislative Analyst is seeking to prevent funding for actual ground-breaking, arguing that funds should be used only for administrative costs and more studies.

The California situation is especially outrageous, because voters there approved funding for implementation of a state high speed rail network with the 2008 passage of Proposition 1a. Just goes to show that conservatives are more wedded to their destructive anti-government ideology, than the actual processes of democracy.
Testing on Beijing – Shanghai HSL enters final stages

FINAL testing has begun on the new high-speed line between Beijing and Shanghai. For the first time CR380A trains are operating on the entire 1318km route with testing set to continue for a month before the line opens for commercial services at the end of June.

The Chinese Ministry of Railways says that fault simulations and emergency drills will be carried out during the trial period, while the ministry also confirmed that 300km/h and 250km/h services will be offered on the line for a travel time of approximately five hours. An additional stop at Nanjing has also been added to the 300km/h service.

Operating speeds on the new high-speed line, which has been constructed within three years, were originally set at 350km/h. However, the ministry says that due to safety concerns and in an effort to reduce ticket prices, speeds have been cut.

Read more.

Sunday, May 15, 2011

The question of scale

There are many times when I discuss wind power that someone will come up to me and ask whether there is a future in household-sized wind turbines.  Most of them want so badly for there to be a cheap way to generate electricity on their own--it would be their way of saying "f**k you" to The Man.  Hoping for assurance that there are at least a good set of plans out there, they grow visibly disappointed when I tick off the real reasons (aside from male ego) why wind turbines are so large.

  • In most places on earth (and that most certainly includes Minnesota) the wind isn't very strong or reliable until about 100 ft (good round number) above the surface.  By the time you erect a tower tall enough to get to the good wind, you have so much invested that putting a tiny generator up there makes no sense.
  • Owning your own wind turbine is a LOT harder than it sounds.  These things are outside in insanely tough conditions that causes damage to even the best-built mechanical devices.  Most folks barely keep up with the maintenance on their cars--and maintaining a wind turbine would be at least 10 times more difficult (and probably expensive).  

There was a time not so long ago when wind power was touted as a sort of "alternative lifestyle" answer to the evils of burning coal.  But these days wind turbine installations are often opposed by a motley collection of self-styled environmentalists making absurd charges about bird kills or complaining that these graceful creations are ugly.  Because these complaints are so crazy, I am tempted to believe their real problem with modern wind turbines is that they aren't hippy-scaled, but are in fact large industrial projects.

This is a long way of explaining why I think energy projects will always have sound reasons for being some variation on ginormous.  But just because the technology tends to be large and complex doesn't mean citizens cannot do something about who controls the technology.  The Man isn't the Man because powerplants are so large, it's usually because the financial arrangements are too large.
Germany's "Electricity Rebels"
DW BUSINESS | 18.04.2005
Germany's reputation for environmental friendliness may have found its expression in the Black Forest citizens' initiative that won a David and Goliath battle against the local electricity provider.
In April 1986, Ursula Sladek lay at home, incapacitated with a broken thigh after a skiing accident. As fallout from the Soviet reactor Chernobyl rained over Europe, Sladek pleaded with her kids not to go out in the yard. They ignored her, and that got her thinking. 
To counter her feeling of helplessness, Sladek, a homemaker, joined forces with other Schönau residents and formed Parents for a Nuclear-Free Future. Their aim was to put an end to atomic energy. The group did what they could to raise townspeople's energy awareness, running competitions to save energy and even approaching the Black Forest town's electricity provider, hoping that Kraftübertragungswerke Rheinfelden (KWR) would introduce prices that rewarded customers for frugal energy use.
But by showing the parents the door, the stony faces at KWR inadvertently heralded the end of their golden days of providing Schönau with electricity. After 13 years, two town referendums and a successful nationwide campaign to raise funds, the Schönau "electricity rebels," as the press dubbed the citizens' initiative, became the first German community to buy back their own power grid.
"We weren't after the electricity network," Sladek has said. "In the beginning we just wanted a little support for our idea."
The "rebels" started producing the energy their town needed by building block heating stations and installing solar panels, including outfitting the local Protestant church with solar cells. What they couldn't supply themselves they bought. And in 1999, Elektrizitätswerke Schönau (EWS) went national, a year after the German electricity market was liberalized.
With size comes power
Today, the Schönauer initiative heads one of the largest of Germany's half dozen "green" electricity companies and is rapidly on its way to 30,000 customers, according to Sladek, now one of EWS's managing directors.
"We see ourselves as a political energy organization," said Sladek. "The aim isn't to earn more but to have more power." Size is the way to influence, she said. 
In a country of 80 million people, however, EWS Schönau's customer base appears insignificant. The company doesn't advertise, relying instead on word of mouth from satisfied customers to recruit new ones and investing its profits in promoting environmentally friendly electricity sources. To that end, EWS helps customers set up their own environmentally friendly means of producing electricity and pays them for the kilowatts they deliver into the grid. more

Tax havens and the rise of new oligarchies

One of the major bastions of the new financial and corporate oligarchies that have emerged and entrenched themselves the past four or five decades is an international financial system that has usurped many of the powers of the sovereign nation state. Ironically, many nation states are in fact mere tools in the hands of these new oligarchies. These nation states function as tax havens, and there is an interesting new book on the subject, Treasure Islands: Tax Havens and the Men who Stole the World by Nicholas Shaxson. It has been reviewed by David Runciman in the London Review of Books.

Saturday, May 14, 2011

An example of pure economic rent: Disney Grabs ‘SEAL Team 6’ Trademark

One of the key concepts we need to understand is "economic rent." When the big oil companies exercise their political power to keep in place U.S. subsidies for oil exploration, or to prevent an investigation into how they are manipulating and profiting from both futures and physical markets for oil, these companies are acting to protect their "rent seeking" economic behavior: trying to maintain not just the profitability, but the revenue streams, they derive from the trillions of dollars of investment in the oil-based economy that has been created in the past century. They have a vested interest in keeping that century-old investment from having to face competition or replacement.

Summary of the State AGs Case Against Mortgage Fraudsters

Mike Konczal at RortyBomb points to a very informative and eye-opening summary of the state attorneys general case against the mortgage services and banks by Adam Levitin: The Servicing Fraud Settlement: the Real Game. One fun aspect: looking at the actions of Senate and House Republicans, particularly their oppostion to and attacks on the Consumer Financial Protection Bureau (CFPB), it's clear that they are completely depraved and shameless whores for the banksters. His conclusion is also interesting, and repeats a point that I've seen made a few times recently: Republicans and conservatives, because of their blind ideological faith in "market efficiency" just have a hard time accepting that large economic actors have engaged in massive fraud and criminality.

Basically, the banksters made $25 billion in mortgage servicing fraud - the largest consumer fraud qua consumer fraud in world history. The settlement being discussed would have the banksters disgorge almost all of this illegally gained amount. The real fight now is over mortgage principal reductions, which could cost the banks up to $160 billion - wiping out a third of the equity of the four biggest U.S. banks.

Obama's financial reform is "Moderate 1990s Republican"

Mike Konczal at RortyBomb has two interesting observations:

Darrell Duffie on Regulating Foreign-Exchange Swap; Moderate 1990s Republican Style Financial Reform?

This is interesting. Well-respected Stanford University financial economics professor Darrell Duffie comes out in favor of regulating the foreign-exchange swap market:

“There’s as much reason to clear this class as any other class of derivative,” Duffie said in a telephone interview today. The market, which consists of all the largest global banks, for foreign-exchange forwards and swaps is $25.6 trillion in notional value, according to the Bank for International Settlements.

“If those were to suddenly revalue, we don’t know whose ability to pay is threatened,” Duffie said.

Read more.

Konczal then puts the Obama adminstration and Dodd-Frank financial reform in an interesting context:
Ezra Klein had a very good observation a while back: ”President Obama, if you look closely at his positions, is a moderate Republican of the early 1990s. And the Republican Party he’s facing has abandoned many of its best ideas in its effort to oppose him.”

I’ve been meaning to try and develop this argument with regards to financial reform, so please jump in if you’d like. Let’s make three assumptions: (1) I’m not sure how to best describe the political economic default policy outlook of the participants of the Squam Lake working group – people like John H. Cochrane, Darrell Duffie, Frederic Mishkin, Raghuram G. Rajan. Let’s say it’s moderate Right, what we could comfortably call early 1990s moderate Republican.

(2) You can take the Squam Lake report on what financial reform should look like as a kind of moderate Right/moderate Republican view of financial reform post-financial crisis. (3) Dodd-Frank is conceptually similar in theory and very similar in practice to the Squam Lake’s report.

If those pan out, Dodd-Frank financial reform act, like cap/trade and health-care reform and others, would be the equivalent of a moderate Republican approach to finreg in an age where moderate Republicans have become extinct.

Read more.

Friday, May 13, 2011

Peak oil explained

As regular readers know, I don't have a lot of respect for folks who can actually believe that Peak Oil and climate change aren't real problems.  The evidence isn't all THAT hard to understand, but even so, I am always looking for ways to explain these life-threatening dilemmas to folks who slept through eight-grade science class.  This is one of the best I have seen.

The aesthetics of sustainability

"Permanence is a function of design. Design as beauty is essential to permanence. Committees are rarely formed to save eyesores. Design as function can assist in the goal of permanence by making maintenance easier. Design as beauty is the easiest to explain because everyone can think of an example. Builders for centuries have known this trick. Design it to be beautiful and the powerful will insure access to premium materials and labor. Build with good design, premium materials, and skilled labor, and the result is the Acropolis in Athens, the Vatican, or the Eiffel Tower. Apply this principle to a city and you get Paris, Prague, or Copenhagen. The only reason to restate such an obvious notion is that one cure for industrial waste must be permanent structures. No law has been found that says a powerplant, or sewage treatment plant, or waste recovery center must be ugly. Humanity must arrive at the conclusion that this is the only planet for light-years in any direction that will support human life. Structures necessary for human survival will be with us for a very long time and we are going to have to look at them. They may as well be beautiful."

Elegant Technology pp. 121-122  (first written 1986)

Wednesday, May 11, 2011

Food and weather

One of the reasons farmers tend to be more religious than most is because no matter how well they plan or how hard they work, they are still at the mercy of the weather (gods).  Those who use irrigation are insulated somewhat from drought but even they are subjected to all the other natural catastrophes that can fall from the sky.  Here in Minnesota irrigation is very rare.  Farmers around here are utterly exposed to the forces of nature.  Crops can be destroyed by wind, hail, floods, and early frosts. Etc.!

Tuesday, May 10, 2011

Correcting the record

There is a lot blame-the-victim economic "analysis" going around these days.  Here Paul Krugman steps in and swats down the idea that the economic mess we find ourselves in is somehow the fault of the greedy little guy.

Sustainable energy strategies

Ever since I began writing Elegant Technology, I have been convinced that powering civilization was POSSIBLE using renewables.  Not easy.  Not cheap.  But certainly possible--and highly desirable.  That it why Elegant Technology does not concentrate so much on the technologies involved (because these are still evolving) but rather on the sociological and economic dilemmas that make a conversion to renewables so much more difficult than the technological problems alone would indicate (and goodness knows, the technological problems alone are difficult enough.)

Monday, May 9, 2011

Watching the economics "profession" self-destruct

Paul Krugman writes about the absurdity of what he calls VSP economics--the droolings of the Very Serious People who have been getting it utterly wrong for the past 35 years.

Has Peak Food already happened

No less an authority than the Scientific American seems to think so.
Cereal Killer: Climate Change Stunts Growth of Global Crop Yields
A crop-yield analysis reveals that warming temperatures have already diminished the rate of production growth for major cereal crop harvests during the past three decades
By David Biello | May 5, 2011
The people of the world get 75 percent of their sustenance—either directly, or indirectly as meat—from four crops: maize (corn), wheat, rice and soybeans. The world's rising population—now predicted by the United Nations to reach 10.1 billion by century's end—has been fed thanks to rising yields of all four of these crops during the past century. Humanity's predilection for burning fossil fuels, however, is now contributing to the slowing of such rising yields, cutting harvests of wheat 5.5 percent and maize 3.8 percent from what they could have been since 1980, according to a new analysis of yields.
"On a global scale, we can see pretty clearly significant changes in the weather for most places where we grow crops," explains agricultural scientist David Lobell of Stanford University's Woods Institute for the Environment, who led the analysis published in the May 6 issue of Science. "Those changes are big enough to sum up to pretty big losses for wheat and corn."
Using U.N. Food and Agriculture Organization data going back to 1980 for crop yields in all major crop-growing regions of the world, and pairing that with temperature and precipitation data for their growing seasons, Lobell and his colleagues found that warming temperatures were reducing yields—although changes in precipitation did not appear to be having an effect, yet.
Those temperature changes are the result of increasing concentrations of atmospheric greenhouse gases, such as carbon dioxide (CO2), largely as a result of burning fossil fuels and agricultural practices. But CO2 also helps rice, soybeans and wheat grow. In fact, the researchers suggest the extra CO2 boosted yields for these crops by roughly 3 percent during the period studied. Unfortunately, in the case of wheat, that wasn't enough to overcome the loss in yields resulting from warming temperatures. "Temperature effects are already overriding CO2 effects," Lobell notes. more

Sunday, May 8, 2011

Arrogance cubed

Ah the Predators--certainly have an interesting way of viewing the world.
How it works

Elevator Speech #8--The role of regulation

After each round of recent economic deregulation, there has been some form of catastrophe.  While regulations in general are often annoying and counter-productive, it is obvious after 35 years of economic deregulation that the folks who wrote the original regulations were on to something.  The ultimate proof that the economy needs regulating came in 2008 when the richest firms on Wall Street became the biggest national social welfare cases.  $Trillions had to be pumped into a system that had destroyed itself playing games with electronic money.

On the other hand, our government which cannot prosecute some of the most evil people to have ever walked planet earth can find the time and budgets to incarcerate hundreds of thousand of people for the "crime" of smoking pot.

Our government, for whatever reasons, has it completely backward.  The crimes that should have the highest priority are the ones that affect the greatest number. Crashing the economy on 2008 through naked and systemic fraud is certainly more important than finding a more peaceful way to get high.

The principle is simple.  A good government regulates the behavior of those whose actions affect many, while allowing almost complete freedom in personal matters such as sex and drugs.  Big=regulate. Small=deregulate.

Any financial institution that has economic backing from government agencies should be regulated like a public utility.  This is the absolute minimum requirement for a prospering real economy.  Any institution considered "too big to fail" has met all the reasonable definitions of a monopoly and must be regulated as a monopoly or broken up.

Remember when there were sane Republicans?

Once upon a time, there were Republicans who actually represented the Producing Classes.  For example, in Ayn Rand's 1957 libertarian classic Atlas Shrugged, the hero gets frustrated because his plans to build a better railroad are thwarted.  In USA today by contrast, the numbers of Republicans trying to get better railroads built can be counted on one hand and Rand's followers are usually shameless Predators like Alan Greenspan.

German Producer Class environmentalism means that the world's most effective environmentalists are often conservative folks with engineering degrees.  Just by sheer statistical accident, one would expect a USA Republican to stumble onto their example that there are environmental strategies that mesh with the old principles of industrial capitalism.  You know, the idea that a conservative could be for conservation.  Well according to Spiegel, there is such a Republican!

Saturday, May 7, 2011

The problems of Greece haven't gone away

Debts that cannot be repaid--will not be repaid.  But that certainly does not mean that the debt collectors won't try to squeeze some blood out of a stone.

At the behest of the money-changers, the Greek government tried to impose austerity measures that mostly fell on the weak.  But the weak have fought back because MOST of the debts that have ruined their lives were not incurred by them.  Athens has been rocked by almost daily riots for months.  The government has lost whatever legitimacy it once had.

On Friday, a rumor surfaced in Germany that the Greek government was going to leave the Euro.  This would prove catastrophic for the various creditors so the day was spent trying to stuff that rumor back into whatever container could be found.

Friday, May 6, 2011

The economy really sucks this spring

The signs of an economic slowdown were on prominent display my whole trip.  Attendance and spending was way down at the NAMES show.  Tony's brother claimed the food business in Chicago was a disaster as suppliers tried to raise prices to cover their increasing costs only to meet savage price resistance from consumers who will now only buy if something is on sale.  Municipalities trying to close budgetary shortfalls had dispatched every available patrolman to catch the almost non-existent speeders---cops were just everywhere.

The main driver of the economic problems--high petroleum prices--had signs perched on seemingly every available pole reminding everyone how bad the pain would be.  I saw unleaded regular going for $4.79 a gallon at one Chicago station.  While that probably sounds like an incredible bargain to a Dutchman paying over $7.00 a gallon, it is a disaster in someplace like Chicago with vast urban sprawl and virtually no transportation alternatives to the private automobile.

Thursday, May 5, 2011

I'm baaack

Had a good road trip.  No breakdowns or even near misses.  It was cloudy and chilly but I didn't drive in rain.  Gas prices are keeping many off the road--cars are unusually rare on the freeways.  I am still learning my GPS.  It is a remarkable invention.  Imagine telling the guys who figured out the sextant and chronometer that one day, there would be a navigation device that knew what lane you needed to be in while moving at 70 mph.  They would have wept in sheer joy at the prospect.

Saw a lot of interesting things.  Last year, I tried to be useful around Tony's booth. This year, I was a bum who spent most of the time wandering around with a video camera listening to the purest Producer types explain their thought processes while making things.  My favorite was the guy who has discovered the definitive history of the USS Monitor by constructing a scale model from designer John Ericsson's drawings and making it run.  He is a perfect example of how Producers uncover facts and how tenaciously they will defend those facts when proven by experimental means.

Got a tour of the back operations of Ford Museum and Greenfield Village.  Last was there the summer I turned 14.  It was a peak experience then so it was extra fun to meet some of the folks who make the place work.  Visited the shop where the 26 Model Ts that are driven around the Village are perfectly maintained in like-new condition.  It's an amazing world when funds are found for maintenance.

I got quite a bit of video and will soon see what I have actually captured.  It's really hard to mike up anyone under casual situations so I just got the camera as close to the speaker as I could and still get a video shot.  I am sure I got something.  I am just as sure it won't win any awards for excellence in videography.

It was a good time to be away from what passes for news.  Between the modern Tories going "Goo" over the British Royals and the wargasm over the Bin Laden assassination, the reminders that the pirates are still firmly in charge of the agenda were all over the place.  We couldn't have a serious discussion of energy or climate change, you know.  I mean, the implications of $5 gasoline or the largest outbreak of tornados in history are so ugly compared to Will and Kate and the Navy Seals.