Thursday, October 29, 2015

Thoughts on immigration

A few weeks back, I was hosting an old college roommate who has Swedish roots like I do.  It was a beautiful early fall day so we elected to drive up the St.Croix valley.  When we got to Taylors Falls, we turned inland on the road to Lindström in Chisago County  This area figured prominently in the Swedish immigration to Minnesota and was immortalized by the legendary writer, Vilhelm Moberg, who wrote what many consider the definitive books on the immigrant experience. His emigrants series of four novels was written between 1949 and 1959 and describes one Swedish family's migration from Småland to Chisago County, Minnesota in the mid-19th century. This was a destiny shared by almost one million Swedish people, including several of the author's relatives. These novels have been translated into English: The Emigrants (1951), Unto a Good Land (1954), The Settlers (1961), The Last Letter Home (1961).  These books were turned into two absolutely stunning films by Jan Troell starring Max von Sydow and Liv Ullmann (The Emigrants and The New Land.)

Tiny Lindström is especially proud of its Swedish heritage.  They have erected a statue to Moberg, they have agreed that the signs along main street will be in both English and Swedish, and perhaps most whimsically, they painted their water tower to look like a Swedish coffee pot.  The highlight of their efforts to remember their heritage is the copy of the statue raised to the emigrants in Karlshamn Sweden. It portrays a couple—the man looking resolutely to the new land while his wife is looking over her shoulder at the home and family she is leaving behind.

When I was a young man, I thought this statue was a message that without male determination, not much would have ever been accomplished.  Yet as I came to know the history of my immigrant grandparents, the statue became more poignant.  My grandfather came to USA in 1899 and found work in the Chicago steel industry.  The work was astonishingly hard and dangerous and by 1921, he was weary enough to try his hand at farming in Minnesota.  His timing could not have been worse.  The Great Depression may have started in 1929 but the depression in agriculture started in 1921 as commodity prices crashed.  So there he was stuck with a near-zero income in a tiny house without electricity or central heating in an area of the world with brutal winters.  Things went from bad to worse in 1929 and my poor grandmother was so miserable that she would often cry herself to sleep from homesickness.  In 1935, she entered hospital for treatment of a gall bladder condition.  She died of a botched surgery but she could have also died of a broken heart.  If she looked back when leaving Sweden, she was probably wise.

By all accounts, my grandfather was a superb foundry man and an excellent farmer.  He quickly learned English and was soon a citizen.  He was very politically active and helped organize several cooperatives and the Farmer-Labor Party.  And he worked himself to death.

original statue in Sweden
In many ways, my tribe were perfect immigrants.  We believe God wants us to work hard.  We believe in education.  We are honest to a fault.  And our politics are so admirable, Sweden was by FAR the most emulated country of the 20th century.  Our societies are essentially corruption-free.  Why even now, Bernie Sanders claims his ideas come from Scandinavian social democracy.  And while it is nice that Bernie thinks we are to be admired, I would be shocked if he knows anything about the evolution of Nordic social democracy.

But the biggest problem we face is that there are not many of us.  Even in good old Protestant USA, our version of Protestantism is different.  Our definition of a good public-private division is far from the dominant culture.  We have radically different ideas about war and peace.  We are not the people who believe in for-profit medicine, etc.  So there many days when I know I am a stranger in a strange land.  A second generation (mother's side) and third generation (father's side) American and I am not even close to being assimilated and the chance my tribe will ever have serious cultural influence is essentially zero.

The drive back from Lindström was quiet as the reality of our cultural irrelevance sank in.  We have struggled so hard and accomplished quite a lot yet for both of us, we are the end of the line—neither of us have children.  USA is not a good place for people like us.  I was really quite sad for at least a week.

Compared to the problems of Syrians now staggering into Germany or Iraqis landing in Northern Sweden, my problems are trivial.  Those people will not have assimilated in 10 generations.  The multiculturalists assure us that this poses no problems—especially if the dominant culture will only be tolerant and accepting.  My experience is that it is almost impossible to get the dominant culture to accept even excellent ideas like net-zero energy-efficient housing.  So I have reached the conclusion that rather than accept or encourage mass migrations of desperate people, it is much preferable to create the conditions so they can thrive where they are.

Wednesday, October 28, 2015

Energy for cooling—another prediction for disaster

When my brother and I used to discuss strategies for building energy-efficient housing, we would always agree on the basic goals but the methods would differ quite radically.  My gold standard was the Swedish housing industry and their methods which were especially appropriate for our Minnesota winters.  My brother who lived in central Florida got most of his expertise from the Florida Solar Energy Center in Titusville.  My problem was how to keep a house warm when it was -20°F and his was how to keep one cool when it was 98°F with 96% humidity at 10:00 am.  Get either problem wrong and it costs a LOT to pay the energy bills.

I've been to my brother's house and it is amazingly comfortable on a hot afternoon even without air conditioning.  So he starts out with a very energy-efficient house.  But even he has to run his air conditioning during the sweltering days of late summer.  Which leads me to believe that everyone who lives in a hot climate, and that includes a very significant percentage of the world's populations, will eventually want air conditioning very badly and will most certainly buy it if they can ever afford it.  And so we are seeing predictions that soon more energy will go towards cooling than heating.

There are some bright spots in this scenario.  Hot locales have amazing solar resources and basic PV cells will generate a lot of energy during the heat of the day.  So if this is done very well, those new customers for cooling could go straight to solar-powered air conditioning.  Unfortunately, emerging economies often try to get by on the cheap.  If all those new customers buy inexpensive air conditioners with inefficient innards, and they put them in housing that wasn't designed to cool easily, and they power them with electricity generated by burning coal, the resulting massive additions of greenhouse gases will NOT be helpful.

Tuesday, October 27, 2015

Pilger on WikiLeaks

John Pilger has written a new book called The WikiLeaks Files. Not surprisingly he thinks that the efforts that Julian Assange has made to spread the documents that most governments wish they could've kept hidden are to be commended.

If this can be called the age of WikiLeaks, and there is certainly an argument that it can be, it s also an age where the mainstream media is often worse than useless. So while the traditional organs of information are no longer socially useful, it has never been easier for the rest of us to find out information about our government, and science, and almost everything else—including military planning. Governments may spend their nights and days lying their heads off, but it is harder to get away with those lies then at any time in history.

And while there is plenty of falsehoods and just plain bullshit on the Internet there's also a lot of hard scientific data and well reasoned arguments, etc. I guess that's the biggest difference between when I was a kid and now. Papers like the New York Times are lying at least as much as they did back then, but these days there are always alternatives for informing oneself.

Unfortunately, Assange is still trapped in the Ecuadorian embassy in London. Telling the truth may be easier these days, but it is still dangerous to one's health and career.

Monday, October 26, 2015

Economics as a science?

It's that time of the year again when the the board of directors of Sweden's Central Bank gather together to honor some economist who validates their worldview.  This Riksbank Prize was created in 1969 and was named after the Nobel prizes.  They award the thing on the same night as the real Nobel Prizes so the patina of a prestigious science award tends to rub off in the minds of the public.  Of course it does—that was the whole point of this fraud.

But economics is hardly a science like physics or chemistry.  Any comparison is laughable.  But the mileage that world's central bankers get from this "misunderstanding" is enormous.  Economics, as it is currently practiced shares much more with theology than science—complete with taboos.  And the biggest taboo of all is: One must never question the right of privately-owned banking to control the issuance of currency.  NEVER.

Lest anyone believe that taboo doesn't exist, consider the fate of one of our favorite economic thinkers—Ellen Brown.  Every sentence she writes is more informed by historical reality than the combined "wisdom" of the various "Nobel" laureates.  But because she advocates government-issued money, she is literally beyond the economic pale.  And so the real economy hobbles along crippled by liars, frauds, and imbeciles.  I personally wouldn't mind if central banking actually was in private hands—IF they could come up someone who wasn't a clueless sociopath to run those institutions.

Thursday, October 22, 2015

ExxonMobil on climate change

The outrage directed at ExxonMobil for knowing that climate change was real but pretending otherwise explains SO much about why the environmental movement has gone nowhere for at least a generation.  Because while Big Oil has acted wretchedly in this matter, institutional analysis pretty much would predict that a company that specializes in selling oil products would hardly be expected to do anything else.

The biggest failure of analysis is caused by the differing perceptions of what oil companies actually do. For much of the environmental movement, oil companies are these evil people who go around starting wars and toppling governments so that they can steal the oil that is not rightfully theirs. The oil companies on the other hand believe that they are providing customers with the critically necessary resources to power their lives. They know what happens to a country when it runs short of oil. Just sitting in fuel lines for a few times in the 1970s made people so angry they were willing to kill each other.  All their customers want is gasoline that burns in their cars for the cheapest price possible.  The way the oil folk see themselves, is "If we didn't work so hard, you ungrateful people would die in the resulting chaos.  We literally bring civilization!  Would it kill you to say 'thank you' once in a while?"

The factoid that has the environmental community in a blood red rage these days is a new report that the top scientists at ExxonMobil knew about the link between burning fossil fuels and climate change as far back as the 1970s. This story is totally believable. When Standard Oil was broken up, the division that got all the high tech scientists and research people was Mobil. The link between burning fossil fuels and climate change was first written about by Svante Arhennius in 1893. So the possibility that someone at ExxonMobil knew about the link between fossil fuels and climate change must be nearly 100% given the high level of chemists and chemical engineers that work in the petroleum industry. My guess is that those glory days of Mobil are long behind us—there's been a lot of cost-cutting in the big oil companies since the 1970s.

What probably happened is that when these papers first came out inside of ExxonMobil, there was probably a bunch of optimism for other energy products besides fossil fuels. We saw that also happen at British Petroleum when they introduced their "BP—Beyond Petroleum" ad campaign. Of course that effort too flickered and died. And the reason is probably pretty simple—an oil company looked at itself carefully and decided it wasn't going to be a solar company or a wind company or anything else because it had billions invested in the skills necessary to find, extract, and refine petroleum.  I'm pretty sure that nobody inside Big Oil expected anything to replace fossil fuels in any reasonable timeframe so the people who thought this was possible probably just retired or quit. Pretty soon these traditional oil companies were all oil once again.

And while it would have been nice if Big Oil had figured out a way to transition to other energy forms, it is really not so shocking they did not.  It would have been wonderful if they had not instead spent money spreading doubt about the reality of climate change when it is pretty obvious that most of their scientific staff probably knew better.  But since the environmental community hasn't figured out what to do about climate change either, it would probably be prudent if we stop dreaming about a world where oil companies spend their days figuring out how to put themselves out of business and figure out realistic ways to come up with fossil-fuel alternatives ourselves.

Wednesday, October 21, 2015

De-carbonization? Never mind

On May 21, 2015, I created a post created around a DW article that introduced (for me) the term de-carbonization.  I LIKED that term.  I have been using it.  The post was about a planning agreement for the Paris Climate Change conference that got Merkel and Hollande to agree that de-carbonization was the goal.  I was pumped!

Yeah, well the de-carbonization goal has been dropped for Paris.  Folks.  The evidence is in.  If an important conference like Paris cannot even get something like de-carbonization right, such conferences are truly are worse than useless.

Tuesday, October 20, 2015

Gates gets real about climate change

For those of us who inhabit the Apple world when computing, Bill Gates has often seemed like a bad guy—especially when MS Word starts to act up.  But the fact remains, he was one of the heavy hitters in the development of the personal computing and has the big pile of money to prove it.  Now it seems he has turned his attention to climate change and what would actually address the problem.  And if the following interview is any indication, he will rapidly become one of the adults in the room—and not just because he has pledged $2 Billion of his own funds to the effort.

In fact he even seems to know that considering the huge change doing something meaningful about global warming will involve, $2 Billion is just a rounding error.  And that realization is one of the reasons to believe that Gates gets it.  Considering the lame suggestions coming from the environmental movement these days, we need all the adults we can find.

Monday, October 19, 2015

CFCs and the Montreal Protocol—a template for solving the problems of climate change?

Anyone besides me wonder why we cannot solve the problem of CO2 in the atmosphere the same way we took care of the problem of CFCs punching an Antarctic-sized hole in the ozone layer?  There are so many things about the two problems that are remarkably similar. Yet there is ONE big reason why the Montreal approach isn't going to work in the world of climate change—too many people (all of them in fact) are able to make CO2 so simple regulation is not going to work.

“the world’s most successful environmental agreement”
Montreal Protocol 1987

In June 1974, a chemistry professor at the University of California at Irvine named F.S. Rowland, along with his talented post-doc assistant named Mario Molina, published a short 2-page paper in the prestigious science journal Nature claiming that Clorofloromethanes were concentrating in the high atmosphere and were destroying the ozone layer. Their exact words were:

“Chlorofluoromethanes are being added to the environment in steadily increasing amounts. These compounds are chemically inert and may remain in the atmosphere for 40–150 years, and concentrations can be expected to reach 10 to 30 times present levels. Photodissociation of the Chlorofluoromethanes in the stratosphere produces significant amounts of chlorine atoms, and leads to the destruction of atmospheric ozone.”

This was a scientific bombshell of the first order. While there were plenty of frivolous uses for these chemicals, such as propellant for hairsprays, there was this enormously important application—refrigeration and air conditioning. Freon, a Chloroflourocarbon (CFC) from Dupont, was already in millions of devices from supermarket coolers to automobiles. The food supply depended on it. The sunbelt boom in real estate doesn’t happen without it. Freon was the poster product for the "better living through chemistry" PR effort.

Needless to say, Dupont was not one bit happy to have a couple of obscure professors write such outrageous things about one of their flagship products, a chemical that had been sold on its reputation for safety since it had been introduced in 1928 and put into production in 1930. Moreover. since Dupont was the premiere chemistry shop in USA, they turned loose some heavy hitters to discredit Rowland / Molina.

One Problem. Rowland and Molina were absolutely right and by 1985 a picture of what the ozone hole over the Antartica looked like had emerged.

By 1987, The Montreal Protocol had been signed by the big countries. Eventually it would become the first international agreement signed by every single nation on earth. The science, and the need to do something significant, were just that overwhelming. Of course, that didn’t keep Dupont from taking one last stand. In 1987, they testified before the US Congress that "We believe there is no imminent crisis that demands unilateral regulation." And even in March 1988, Du Pont Chair Richard E. Heckert would write in a letter to the United States Senate, "we will not produce a product unless it can be made, used, handled and disposed of safely and consistent with appropriate safety, health and environmental quality criteria. At the moment, scientific evidence does not point to the need for dramatic CFC emission reductions. There is no available measure of the contribution of CFCs to any observed ozone change..."

Obviously, this was about pride!

Because replacing the world’s supplies of refrigerants would prove to be an insanely complicated task, the Protocol would be revised 8 times (with probably a couple of more to come.) To a non-scientist, this routine need to upgrade data and methods looked like uncertainty and confusion.

In 1995, Republican Congressman Dana Rohrabacher organized a hearing on “scientific integrity” meant to challenge the ozone science. Representatives of private industry and conservative think tanks began to claim that the science behind the Montreal Protocol was incorrect, that fixing the problem would be devastating to the economy, and that the scientists involved were exaggerating the threat to get more money for their research. Entered into the Congressional Record was the now-familiar claim that there was “no scientific consensus” on ozone depletion.

The Nobel Prize committee looked at these unfolding developments and gave the Chemistry Prize to Rowland and Molina only a few weeks later. They weren’t about to let some hacks attack the methods that have served science so well for centuries. It’s not as if Rowland and Molina didn’t deserve the prize—for what they did was a phenomenal achievement. It’s just that the timing was a little too perfect. This was a big science smackdown. It seems like even a scientific illiterate like Rohrbacher knows enough not to argue with the folks who award the Chemistry Prize.

So how did it go?

The Montreal Protocol was:
  • the first international treaty to address a global environmental regulatory challenge;
  • the first to embrace the "precautionary principle" in its design for science-based policymaking;
  • the first treaty where independent experts on atmospheric science, environmental impacts, chemical technology, and economics, reported directly to Parties, without edit or censorship, functioning under norms of professionalism, peer review, and respect;
  • the first to provide for national differences in responsibility and financial capacity to respond by establishing a multilateral fund for technology transfer;
  • the first MEA with stringent reporting, trade, and binding chemical phase-out obligations for both developed and developing countries;
  • and, the first treaty with a financial mechanism managed democratically by an Executive Board with equal representation by developed and developing countries.
Within 25 years of signing, Parties to the MP celebrate significant milestones; however, the job is not yet done and the current moment could not be more pivotal for accomplishing its vital mission. Significantly, the world has phased-out 98% of the Ozone-Depleting Substances (ODS) contained in nearly 100 hazardous chemicals worldwide; every country is in compliance with stringent obligations; and, the MP has achieved the status of the first global regime with universal ratification; even the newest member state, South Sudan, ratified in 2013. UNEP received accolades for achieving global consensus that "demonstrates the world’s commitment to ozone protection, and more broadly, to global environmental protection".

Can you say “slam dunk?”

The Montreal Protocol is an amazing example of what can be achieved when people with sound scientific training and instincts put aside their differences to solve a common problem.

So why can’t we get a Montreal Protocol-style agreement on climate change?

Lots of reasons but one dominates them all—getting rid of CO2 emissions will be at least 1000 times more difficult than eliminating Ozone-Depleting Substances.

Let’s compare

The reason we were able to eliminate 98% of ODS was that there were only a handful of producers and once industry-leader DuPont figured out a Freon replacement, the rest was just details to be worked out by the affected engineers.

By contrast, every creature with lungs produces CO2 and virtually every sentient being can produce more CO2 by starting fires—or having thousands of fires started in their name.

Obviously, it is much easier to regulate the few producers of the hideously complex chemicals like CFCs than it is to regulate the normal behavior of everyone on earth. It seems almost crazy to expect folks to somehow get along without fire.

Actually, we could get along without fire—it’s that figuring out how to do it will be very difficult and expensive.

Spoiler alert, the difficult and expensive part is the happiest reason to do something meaningful about climate change. After all, if we really are going to build the sustainable habitat, it may as well be nice.

While CFC problem was one that mostly concerned highly educated specialists, the CO2 problem involves almost everyone—even those who are under-qualified to understand it. Some of the brightest minds producing the science that proves the climate is changing have some of the lamest “solutions” for correcting the problem. And if the experts don’t get it, how are we supposed to expect the general public to understand such a complex cultural-political-technical problem?

Thursday, October 15, 2015

Russia forced out of the neoliberal camp

It is remarkable how much corruption oil, and the income it provides, brings in its wake.  It is damn difficult to name any country that has a lot of oil that isn't hopelessly corrupt.  Norway, perhaps.  It's pretty easy to see why.  Oil tends to create a class of people who become ridiculously wealthy without having to work very hard (if at all).  This certainly does not include all of the oil industry.  Most of the people responsible for actually finding, extracting, refining, and distributing oil products work extremely hard in often unpleasant and dangerous conditions.  Many are highly educated in subjects such as 3D underground mapping techniques, design and construction of production platforms that must be operated in extreme locations, or sophisticated chemical reactions such as molecular cracking.  But yes, the public persona of Halliburton is Dick Cheney and not the thousands who help provide the fuels to run a civilization.

And then there is the social corruption and economic distortion that follows in the wake of a significant oil find.  At one point this was named the Dutch Disease.  North Sea oil drove up the value of the Dutch currency.  Imported goods became cheaper.  Exporters faced shrinking markets as their prices rose.  The people in power were mostly Leisure Class whose lives had suddenly become more luxurious.  Why should they care about jobs?  And if taxes fell because folks in export industries were losing their jobs, why a small increase on the new petroleum income could keep the Dutch governments open.  The net effect on the Netherlands was that compared to the thrifty, hardworking, ingenious culture that had achieved remarkable levels of prosperity for centuries, the new oil economy was fat, lazy, and stupid.  (That's the essential theory—there are books on the subject.)

Russia under Putin had at least slowed the brazen corruption but had still contracted a serious case of Dutch disease.  When oil was over $100 / barrel, Russia didn't have to do much else besides export oil.  They could afford damn near anything they wanted.  And for a while, Putin seemed intent on becoming a good little neoliberal stooge.  He tried very hard to join the clubs that advanced the neoliberal agenda such as WTO and G8-7.  And yes, the rest of the economy became quite weak.

And then came the sanctions and the Russians were forced to be reminded about their incredible history of self-sufficiency.  It remains to be seen how much of their basic industry they can revive, but it looks like they are going to give it a serious try.  Vladimir I. Yakunin argues below that sanctions are saving the motherland.  He even cites the great German development economist, Friedrich List (there are moments when he even writes like Tony!)  And then we have Ambrose Evans-Pritchard noticing the same phenomenon only he sees it as a return to Russia's peasant past.  No matter, if Russia can combine a mostly self-sufficient economy with an oil-exporting one, they will have achieved the prosperity everyone imagines when seeing the vast resources of that nation.

Wednesday, October 14, 2015

NOx and pollution control

The fuss over the failure of the auto manufacturers to comply with the diesel standards for nitrous oxides is remarkably telling.  First of all, it should be made completely clear that building automobiles remains arguably the most difficult undertaking the Producer classes ever make.  Car manufacture is more difficult than aerospace because of the sheer volume of units produced.  Building an airliner is much more akin to building a skyscraper because very few are made so many operations are allowed to be relatively inefficient.  Cars are much more difficult to make than medical devices because of the incredible cost constraints.  And of course, cars are more difficult to make than computers because cars also have computers plus everything else.

The reason the complexity of automobile manufacture is so important to remember is that these facts make a mockery of what the technologically illiterate believe about cars.  For example, there are those who think that some day, a lone inventor in a garage will make some stunning breakthrough in emissions control or fuel efficiency.  Obviously, that will never happen but the true believers will explain that is because the big boys hate honest competition and will crush the lone genius.  And now we see the environmental extremists thinking that the only reason companies are failing to comply with emissions standards is because they are greedy or are unwilling to put forth the necessary efforts.

However, when everyone seems to be failing to meet the new diesel standards, the question must be asked, "Are the standards reasonable?"  My guess is that they are not.  But the environmental bureaucrats will never admit they are wrong.  Because they refuse to admit that there are physical realities that are responsible for this outbreak of environmental lawlessness, the possibilities for real progress are likely to degenerate into expensive and pointless lawsuits.  Environmentalists are fond of pointing out that the laws of nature will ultimately trump all other considerations, yet they will not realize that they cannot regulate emissions problems out of existence by issuing mandates that are physically impossible to accomplish.

Unfortunately, there are many people who seem to believe that the problems of climate change can be solved if only we elect politicians who will enact tougher legislation to outlaw greenhouse gasses.  Such people are worse than wrong, they have delayed the possibilities for progress for at least three decades now.

Tuesday, October 13, 2015

Pinochet ordered the Letelier bombing

The piece that Orlando Letelier wrote for the 28 AUG 1976 Nation was part of an ambitious post last July 22 2011 about the link between neoliberal economics as concocted by the University of Chicago and the brutal dictatorship of Augusto Pinochet.  Boom.  On 21 SEP 1976 Letelier was assassinated by car bomb—along with an American political activist Ronni Moffitt.  Many on the left spent the Carter years debating the significance of this event.

Last Tuesday, October 6th, John Kerry turned over the finally declassified documents on the Letelier assassination to the current government in Santiago.  It included a document that directly shows that the dirty deed was ordered by Pinochet himself.  Since many of us lefties suspected this was the case, it is nice to know we guessed right.

Most of the time, I sincerely believe that if people were exposed to the economics that ruled when I was growing up, they would categorically reject neoliberalism and all its many mutations.  It is a fiction that keeps me going.  But I also understand the lengths Predator economics will go to maintain its grip.  While it is often painful to be ignored, it beats the hell out of the kind of attention the neolibs can direct at those who try to get in their way.

Monday, October 12, 2015

Payday loans and usury

One of the primary arguments I made in Elegant Technology was that high interest rates will destroy lives, communities, the global economy, and ultimately, the biosphere.  So the question is asked, why haven't extended periods where interest rates were at or near zero fixed the economy?
  1. The global economy would have been been MUCH worse if interest rates had been high since 2008.  It's why the world's central banks are still reluctant to raise them.
  2. It's easy to slow down the economy.  But it is also easy to slow things down so far it is virtually impossible to restart things—it is always easier to wreck than build things.
  3. Low interest rates do not apply to many loans—credit card debt, student loans, and perhaps the most evil credit arrangement of all—payday loans.
Today we see the arguments made by a woman from South Dakota who is organizing to rein in those crazy payday loans.  She is a Lutheran preacher's daughter who has decided to raise the theological arguments of old Martin himself made in opposition to the practices of usury (lots of Lutes in South Dakota.)  I found this piece interesting because even though I am also a Lutheran PK, I had already written the chapter linked to above before I discovered that the religious teachings of my youth should have agreed with what I discovered when Paul Volcker ran the prime to 21% in 1981.

And the only reason I think these arguments must be restated over and over is that there will be NO possibility to build a green future with high interest rates—or any more indebtedness at all, for that matter.

Thursday, October 8, 2015

Are the big utilities finally waking up?

Of all the contributors to the CO2 in the atmosphere, coal-fired electrical generation is arguably the nastiest—mostly because burning coal not only adds CO2, but also mercury, radioactive particles, NOx, and an assortment of other pollutants.  Fortunately, burning coal is possibly the easiest energy habit to kick.  And now the utility companies are discovering that electricity generated by wind and solar is actually cheaper than burning coal—which has long been considered THE low-cost option.

This could not have happened a moment too soon.  We all should be thankful for little signs of progress—however small or late.  First up we see the the thinking at Bloomberg's New Energy Finance.  According to them, wind is already the low-cost option in England and Germany—and soon the rest of the world.  Then we have a local article from the Minneapolis Tribune about the decision-making process concerning Xcel's big Sherco coal-burners.  They intend to replace them in the 2020s.

Yes it is progress but I would be more impressed if they planned to do it starting five years ago.  I mean, Xcel already has a large and well-run wind division.  What they lack is a necessary sense of urgency.  Yes, it is good to see cautious people operating something as important as electrical generation.  But they seem to confuse caution with foot-dragging.

Wednesday, October 7, 2015

Michael Hudson on the baleful effects of banksterism

Regular readers already know I am a big fan of Michael Hudson.  He is one of the very few economists who has managed to keep his thoughts together in the face of the neoliberal onslaught.  Actually, considering how easy it is to poke holes in the various arguments of financial capitalism, there should be hundreds of Hudsons out there, but there are not.  And that alone tells a huge story of why economics is only minimally aware of the reality of those of us who exist outside their circle of pseudo-theological ideas.

Hudson and I do not agree on everything.  The crowd I call Predators he insists on calling parasites.  This isn't a large argument because we are describing mostly the same people doing the same things.  But even though he has just published what is likely to be an important book called  Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy, I'll stick to my description of Predators.  Why? Because the term 'parasites' usually describes some primitive creature like a tapeworm.  But 'Predators' describe dangerous and cunning creatures like panthers.  And human Predators are nothing if not incredibly cunning.  Parasites may not be especially cunning, but they can certainly be extremely dangerous.

And with that intro, please enjoy this interview with Hudson on Counterpunch Radio about his new book.  He pretty much lays out all the serious arguments against the parasitic / predatory views of the bankster's hirelings.  This is import stuff to know.  Think of it as economic self-defense.

The full interview comes after the jump.

Tuesday, October 6, 2015

Ellen Brown on funding the economic bottom

One of the uglier aspects of supply-side, neoliberal economics is that they took one of the best sayings in economics and completely reversed its meaning.  The phrase is, "A rising tide lifts all boats."  When the New Deal economists used the phrase, they meant that the best way to raise the economy was to pump income into the lower economic strata.  And this worked.  When money goes to the poor, they immediately spend it distributing that money to every landlord and businessperson up the ladder.  When the neoliberals got ahold of the saying, they were selling trickle-down—the idea that if the rich get richer, they will eventually spend enough money to stimulate the whole economy.  (A rising Yacht lifts all tides.  Doesn't work—has never worked!)

So when the financial institutions got into trouble in 2008, their pals decided to reflate those banks who presumably would have extra money to lend.  Big problem—there aren't all that many people who have much room to go deeper in debt.  So the money sits in the banks doing essentially nothing—even when interest rates go to zero.

So with no way to lower interest rates much further, the central banks are out of their ideas.  The only working alternative is revive the bubble-up plans that were embodied in the old saying "A rising tide lifts all boats."  Here Ellen Brown describes such an intellectual change as a "Nuclear Option."

Monday, October 5, 2015

Volkswagen troubles from a German perspective

The story of how Volkswagen's "clean" diesels actually failed the NOx emissions tests continue to unfold.  There hasn't been such a juicy Producer Class story in a very long while.  For while the TDI line of diesels are some of the cleanest ever built, the fines and lawsuits for this environmental crime could top $100 billion.
  1. The number of affected Volkswagen and Audis is around 480,000 sold from 2009-2015 (roughly 80,000 per year).  USA isn't a huge market for VW's diesels (by comparison Toyota sold 428,606 Camrys in 2014 alone).  Worldwide, VW has sold 11 million TDIs.
  2. VW, it seems, is not the only manufacturer to build production diesels that regularly emit more NOx than the vehicles tested for certification.  The other offenders include: Volvo, Renault, Jeep, Hyundai, PSA (Citroen, Peugeot) and Fiat.
  3. In every meaningful way, VW did not cheat its customers.  The TDIs it sold were objectively better (better mileage AND performance) than ones that met the legal NOx limit.  Already Wired magazine explains that VW's USA customers are NOT going to like any of the proposed fixes.
  4. The rest of the German manufacturers are PISSED at VW for endangering the "Made in Germany" brand.  With good reason—it takes decades to build such a brand.
Complicating all this is the very real fact that Germany is the greenest industrialized country on earth with a very effective environmental movement.  Mostly because of their superior mileage, VW was marketing their TDI diesels as a green solution.  And yet these are the people being accused of cheating on emissions tests.  So what went wrong to trigger this possible $100 billion calamity?

All arrows point to one culprit—the NOx standards.  The very thing that makes diesel engines more fuel efficient (higher combustion temperatures) is what causes the formation of NOx.  This means that almost anything that decreases NOx will almost certainly decrease the efficiency of the engine.  Now whether the standards are legitimate is a whole other question but since almost everyone is forced the cheat to make an acceptable car, (2 above) and the customers will hate the legal cars (3), maybe the regulators came up with standards that effectively barred the sale of diesel cars.  VW will almost certainly stop selling diesels in the USA market.  They sell over 10 millions cars a year—they hardly need these problems to sell a mere 80,000.

What really makes this such a fine Producer Class tale is that at Volkswagen, the Instinct of Workmanship triumphed over all other considerations.  VW was simply not about to sell an inferior product just to meet rules that were set by people who don't actually have to make real hardware that conformed to them.  Faced with the prospect of selling less that they could build, they as a huge corporate giant decided to ignore the regulations.

This should be a warning to all those who think that if we can just agree to lower CO2 emissions, the solutions will arrive just like the pizza you ordered.  Well this doesn't work.  If you want to do something very difficult—and trust me, lowering CO2 will be very, VERY difficult—you need to make your plans around what is physically possible.

In the meantime, Germany is beginning to recover from this blow to one of their trophy industries.  The first two articles below come from Deutsche Welle (an official voice of the German government.)  The last is from RI and addresses the question of whether VW's woes will lead to the end of EU sanctions on Russia.

Thursday, October 1, 2015

Council of Foreign Relations and Neoliberalism

When Jimmy Carter first came on the national political scene, I was hardly the only person who wondered, "Who the hell is HE?— A peanut farmer from Georgia?  And why did he choose Walter Mondale as a running mate?  And who, pray tell, is Zbigniew Brzezinski?"

Turns out they were buddies from the Council of Foreign Relations—a nasty little club organized by Rockefeller (David) money.  And in one fell swoop, Wall Street had taken over the Democratic Party.  Soon the process of deregulation took hold—starting with trucking and telecommunications.  Paul Volcker was named to run the Fed and soon the very real sin of usury became respectable.  Foreign policy became very aggressive with generous funding for anyone who could bring the fight to USSR—most notably the creation of Al-Qaeda in Afghanistan.  And when the CFR's pet despot was overthrown in Iran, they made sure that the Shah would be flown to USA to get premium medical care.  That move triggered the 444 day hostage crises that still sours USA-Iran relations to this day.

But nothing the CFR did with their anointed President can ever compare to their biggest triumph—the global marketing of Neoliberalism.  That madness has vanquished all intellectual competition to the point where no other economic school of thought—no matter how rational, historically successful, or currently relevant it may be—is given more than a cursory dismissal.  Today's essay is how they pulled that off.  What is so astonishing is that neoliberalism triumphed, not because it represents the best economic thinking, but because it benefits a powerful minority who are happy to pay for any rationale that can continue to confuse the herd.  In fact, neoliberalism is the most primitive economic thinking in 150 years and is a monumental failure for the vast majority of the earth's inhabitants—not to mention the earth itself.