Tuesday, November 14, 2017

Trump's New Fed Chairman--Meet the New Boss; Same as the Old Boss



Trumpster's choice as next chairman of the Federal Reserve is Jerome Powell, who is not an economist, but a lawyer. Powell, a Republican, has been on the Fed Board of Governors since 2012 when he was appointed by that paragon of unrequited bipartisanship, Barack Obama.

Actually, I myself missed the news: Powell's appointment was on November 2, 2017. I just learned of it via one of today's postings at Naked Capitalism: Powell’s Federal Reserve, a melange of reactions from various economists, including Kenneth "dangerous debt cliff" Rogoff, and Joseph Stiglitz, one of the precious few high-profile but decent economists in the world, who "wonders whether Trump has captured the Fed." The best line in the piece linked to by NC is "Tho Bishop at Mises Wire argues that with the nomination of Powell the “swamp wins again”." This is one time the libertarians get it right: a quick perusal of Powell's profile on Wikipedia shows that Powell is a swamp creature, a Wall Street financial predator, and nothing else.

Powell started his career clerking for a federal judge, followed by joining the big Wall Street law firm of Davis Polk & Wardwell in 1981. This firm was a central legal player in the leveraged buy outs (LBOs) of the 1980s, which laundered hundreds of billions of dollars of dirty money by taking over and asset-stripping thousands of U.S. industrial and other companies.

In 1984, Powell moved to Dillon, Read & Co., one of the most established of the Wall Street establishment investment banks. A few years ago, a former managing director of Dillon Read, Catherine Austin Fitts, made her public mea culpa by posting details of the firm's involvement in dirty money laundering that will make your eyeballs pop. Dillon Read was involved in what was by far the largest LBO of the time, the $25 billion buyout of RJR Nabisco by Kohlberg Kravis & Roberts in 1988. (KKR has been a top funder of the Republican Party and conservative political infrastructure for decades now). Fitts writes that the RJR Nabisco LBO made no business sense at all, since it was impossible for RJR Nabisco to service the buyout debt piled on it within the limits of its stated cash flow. The LBO only made sense after she read a European Union lawsuit against RJR Nabisco, which alleged that RJR Nabisco was engaged in multiple long-lived criminal conspiracies, including business with Latin American drug cartels, Italian and Russian mafia, and Saddam Hussein’s family. There were literally billions of dollars in additional cash flow, but it was all dirty money.

Fitts also provides lots of detail on the role of Dillon Read in launching the private prison industry. It's worth taking an hour or so to read through what Fitts has posted. Save some of it before it disappears from the net as "fake news."

I remember the RJR Nabisco buyout was an inflection point in my own career as a community organizer, when I was compelled to learn that "the left" was a morass of useless airbags who wanted to debate theory rather than deal with reality. Lefty organizations such as the Socialist Workers Party were not interested in hearing about dirty money flows because such obvious criminality simply did not conform with their preferred ideological explanation of capitalist exploitation. The deindustrialization and decapitalization caused by dirty money being laundered through buying control of legitimate industrial companies was not a problem that could be solved simply by building a "workers movement." It would require a thorough application of the police, military, and intelligence apparatus of nation states to investigate, track, apprehend, confiscate, and eliminate -- the very apparatus that lefties argue need to be "overthrown" for the victory of a "workers movement."

Dillon Read chairman Nicholas Brady became Ronald Reagan's Treasury Secretary in 1988. (In hind sight, it's amazing that anyone was surprised the Reagan administration decided to ignore U.S. law and aid right-wing para-military organizations in Latin America by shipping them weapons bought with illicit narcotics money.) Powell followed Brady to Treasury as an Undersecretary. He reportedly had a hand in keeping the Salomon Brothers bond scandal under control.

After Treasury, Powell became a managing director for Bankers Trust in 1993, but left two years later after BT's new fangled financial derivatives almost destroyed a number of clients, including Proctor & Gamble. Apparently, Powell got out before Bankers Trust itself went boom.

Powell went back to work for Dillon Read, before joining another big name in the history of USA's deindustrialization and decapitalization, The Carlyle Group, which specialized in purchasing the services of former heads of state and ministers to peddle their political influence to assist and promote various financial schemes.

In 2005, Powell had enough money and connections to establish his own "investment" firm, Severn Capital Partners, which " focused on specialty finance and opportunistic investments in the industrial sector," according to Powell's Wikipedia profile. There are more details there, including the past few years, when Powell made himself a palatable "bipartisan" choice for Obama to appoint to the Fed board.

Now sit back and look at this guy. Is he qualified to head the Federal Reserve?

Depends on what kind of future you want for society. If you're content to blunder on with the deindustrialization and decapitalization of the USA, and the continued reign of dirty money launderers and financiers, the answer is: "Yes, certainly, Powell is qualified." He has been at or near the center of every major dirty financial development of the past three decades: LBOs, KKR, Dillon Read, private prisons, Bankers Trust, Salomon Brothers. [What's happened to Dillon Read the past couple decades involves a complete roster of the most powerful, and, corrupt, financial entities in the world, with long ties to old European oligarchs: acquired by Barings Bank in 1991; then by Swiss Bank Corporation in 1997, which in turn was acquired by UBS (Union Bank of Switzerland) in 1998. All these outfits have figured prominently in investigative accounts of the world's dirty money flows and secret tax havens.] With Powell, you will definitely get "business as usual," not any "draining the swamp."

But if you want a society that squarely confronts 1) the problem of increasingly concentrated wealth consolidating oligarchical control over nations states that were formerly constitutional republican democracies, and 2) the problem of environmental destruction and climate change, which is going to require at least $100 trillion to build new industries, energy systems, and transportation networks all around the world, then Powell, or anyone like him, is not your guy.

Powell has done nothing constructive in his entire life. He has never designed or built anything useful, and his concept of common prosperity involves only letting the rich get richer so they can pee more on everyone else. But then, you could say that exact same thing about every other major appointment by Trump.

The evidence, including polls, indicates that this truth is even beginning to seep into the crippled consciousness of some Trump supporters. But convincing Trump supporters to see the errors of -- their ways, hell, of their thinking -- is not our path to salvation. Getting Democrats and independents out to vote is the key, and that requires the Democrats put forward a bold vision for building a better future. Like a $100 trillion program to solve climate change. $100 trillion is a lot of jobs. A LOT of jobs. More than enough to make a real, immediate positive difference in the lives of every person on the planet. And there is plenty of money to do it. Problem is, most of it is dirty, and -- as the new Paradise Papers show -- hidden away from the reach of citizens and their governments.

Monday, November 13, 2017

Porsche admits electric car investment to take on Tesla will be very expensive


Anyone who doesn't understand the role of institutional inertia in the foot-dragging that shows up whenever an industrial company must upgrade its offerings to cope with changing environmental circumstances should pay attention to the tears being shed these days at Porsche. This a company that feels it must get into the business of building electric cars but clearly does NOT want to do it.

Porsche's most fundamental problems stem from the fact that no one has a good reason for owning their cars. They are expensive and downright dangerous to drive at their design speeds. Here in Minnesota it is now a FELONY to drive over 100 mph (160 kph). A Porsche is barely warmed up at that speed. So in USA, all the performance action is acceleration. Unfortunately for Porsche, their fastest accelerating cars are not as quick as a 5-passenger Tesla because electric motors produce maximum torque at zero rpm. Absent this fact, it would be highly likely that Porsche would just keep building what they know how to make.

The other obvious reality is that Porsche is just a minor branch of the very large corporate tree that is Volkswagen. The corporate pooh-bahs have decided that little Prosche should meet fixed profit targets as part of the plans to make VW the kind of conservative investment beloved of pension funds. Unfortunately, a decision to make a completely different type of car involves spending big money. In such a situation, Tesla just eats up their capital because it is a company run by someone who understands that an enterprise is never profitable when it is seriously innovating.

Corporate mandates tell Prosche that they cannot go into a temporary loss situation to finance the tooling for a new line of cars. Sounds like an impossible situation. Either Porsche takes the financial hit, or they don't build electric cars. And if they do not build electric, they won't be the fastest cars on the street. And if they aren't the top dog, they pretty much lose their reason to exist.

Thursday, November 9, 2017

Oh goody—another dirty climate conference


Someday soon, humanity must make organizing and attending climate conferences a capital crime. These things are worse than useless but they grind on because the folks who like these sorts of things are convention planners. It's what they do. This year's climate extravaganza is being held in Bonn Germany. No one knows why or what they hope to accomplish. An estimated 23,000 people are descending on a tiny little backwater that is obvious ill-equipped to handle them—belching thousands of tons of CO2 on their sacred journeys of self-importance.

If anyone suggests that anything important could be accomplished with video-conferencing, the face-to-face crowd reacts in horror. According to them, those who would eliminate these conferences are the worms of humanity—the introverts. Since the only legitimate way to call these conferences a success would be the ability to point at falling CO2 levels, and that clearly has not happened after 23 years of conferencing, a sane person would try something else. But these folks cannot even progress to video conferencing. And since few or none of them seem willing to grapple with the problems of progressing from legislating outcomes to funding outcomes, we can assure ourselves that no meaningful progress will happen anytime soon.

Climate change is a Producer Class problem that will only respond to Producer Class solutions. Climate conferences are extreme manifestations of Leisure Class behavior. Pretty much explains why they are useless. After all, useless is the primary goal, the heaven, of the Leisure Class.

Sunday, November 5, 2017

Ein feste burg ist unser Gott—Luther's Reformation at 500


To perform a good deed once or twice is easy. But to avoid becoming bitter from the ingratitude and wickedness of those for whom you have done good deeds, that is difficult.

If I knew the world would perish tomorrow, I would still plant my apple tree today.

One should not dispute with quarrelers. They won't be bettered thereby, but become all the more furious. They are not seeking truth, but glory and triumph.

Martin Luther
My junior year of high school was just incredibly painful. My nominally Lutheran preacher father had relocated the family to an ugly little oil town in northwestern North Dakota. Now there ARE people who are in love with vast and very bleak vistas of the "Peace Garden" state, but there aren't many of them, and I was certainly not one of their club. The wind howled all the time. Temps of -30°F (-35°C) in the winter were routine and while the brief summers were a lot warmer, the season brought clouds of hungry biting bugs.

Monday, October 30, 2017

The end of Wolfgang Schäuble's evil madness?


Wolfgang Schäuble does not have a fan club around here because he is such a perfect neoliberal. (The list of my criticisms can be found here) But he has been accepted / praised in Germany because he has been the enthusiastic face of the German financial establishment. And what an ugly face that has been. Even by German standards, he is especially homely. If someone was casting a play and needed a devil to scare little children, he would be perfect. And I am pretty certain the Greeks whose lives he was destroying had no problem thinking of him as evil personified.

But the neoliberalism he was pitching was certain to be harming the German economy as well because it is an economic philosophy that causes a great deal of collateral damage. So it is with some pleasure I note that one of the more enlightened of the German economists, Heiner Flassbeck, has produced a stunningly accurate critique of Schäuble's crackpot mismanagement. Unfortunately for the Germans, the neoliberal bench is very deep. There are probably thousands of economists spread over all the political parties ready to make Schäuble look like a kindly old man. But the fact that he has been eased out as the FM may mean that there are corners of the German economic establishment who at least have questions about the "wisdom" of neoliberalism. It is 25 years too late but a turnaround must start somewhere.

Monday, October 23, 2017

Ken Burns tries to explain Vietnam


It turns out there IS something worse than being historically illiterate and that is being historically misinformed. Ken Burns is a master of historical misinformation and his latest effort on Vietnam is truly ghastly. What a tragedy! I often claim that this country's failure to come to terms with that horrible and expensive adventure in late-stage colonialism pretty much explains the decline of this once pretty-interesting nation.

Take, for example, the horror that was Agent Orange. Some "genius" came to the conclusion that because the Viet Cong were so good at hiding out in their native jungles, the "solution" was to remove the jungles. And so 21+ MILLION gallons of the most toxic herbicide ever invented was sprayed on that poor nation killing wide areas of native foliage. Agent Orange was so dangerous that the folks who merely loaded it onto the airplanes used for spraying suffered long-term health effects including having children with birth defects.

Of course, compared to the suffering inflicted on those poor people on the receiving end of all that spraying, the damage to the USA troops was trivial. There are areas of Vietnam where serious birth defects are almost "normal." That does not make the pain suffered by the young mothers who must cope with these cruel reminders of some genius's chemical warfare any easier.

There was a small burst of interest in the problems caused by Agent Orange when they began to surface in the affected veterans. But seriously, the subject has not even begun to be treated on anything but the most superficial level. For me, any serious thinking on Agent Orange would include a comprehensive examination of the wasted genius that led to this horrible war crime. In order for Operation Ranch Hand (the cutesy name for the largest deliberate environmental catastrophe in recorded history) to succeed, thousands of engineering hours were spent designing and building a fleet of aircraft that could haul large loads of heavy liquid poison, designing a herbicide so lethal it could kill jungles, figuring out how to manufacture 21+ million gallons of the stuff, and delivering this massive load of poison to the other side of the planet. It took a lot of people who studied very hard to learn difficult and complex subjects to pull off this feat—people who otherwise looked and acted like regular middle-class citizens who would do things like coach Little League baseball.

Think about this for awhile. Star students are taught the most brilliant scientific facts Enlightenment thinking can produce and then are put to work designing and executing an ethical and environmental disaster. You tell me how this cannot seriously degrade a culture. When I discovered how involved my university was with such ventures, I just wanted to run away from the academic world. My epiphany came the day I discovered that my "favorite" PolSci professor had a big contract to help design the Phoenix Program—a nasty little operation of torture and assassination targeting the rural males of Vietnam for the "crime" of being educated.

I sort of understand why Ken Burns is so diligent about telling small stories while ignoring the big ones. Most probably it is because his worldview cannot even comprehend the big stories. And that goes double for the tote-bag crowd that watches PBS. Plus he gets paid large sums of money to create a kiddie version of history. The problem I have with little Kenny's kinderspiel is that people who are historically curious wind up being more ignorant for watching his efforts.

Monday, October 16, 2017

Wiping Out Puerto Rico’s Debt Without Hurting Bondholders


Even before Hurricane Maria leveled the island of Puerto Rico, their economy was already in a world of hurt. They were attempting to refinance $74 billion in debt when Maria inflicted another $55 billion in property damage and caused $40 billion in lost economic output.

But hey, Puerto Rico is part of USA and we just spent the last nine years wiping out the massive banking losses incurred when the financial system crashed in the 2007-8 recession. The method used was a little gimmick called "quantitative easing." If we can bail out a bunch of crooked banksters, we should surly be able to rebuild an island responsible for a significant fraction of global Viagra production.

Below Ellen Brown explains just how this could be done. Of course, this does not mean it will be done. It's one thing to bail out crooked banksters—it's quite another to help poor people struggling to survive.

Thursday, October 12, 2017

The Saker nails it


The Saker has spent a great deal of time in the last decade writing about what it is like to be on the receiving end of USA / Western economic "wisdom"—the various elements of the wholesale destruction of people's lives. I am especially grateful for his insights because I am personally a victim of the neoliberal madness. I lost a business that I had invested every cent I could lay my hands on plus a seeming infinity of hard work to the depression of 1981-82—one deliberately caused by Paul Volcker and his idea that 21% prime interest rates couldn't possibly do structural damage to the real economy. He probably knew this move would hurt real people—he just didn't give a shit. After all, what is a "great" man except someone perfectly willing to sacrifice real people because someone they respect intellectually will assure him that destroying the lives of the peons is understandable and reasonable collateral damage.

Compared to the Russians and what the Harvard gang did to their economy, I got off pretty easy. The disastrous economics were largely the same but the difference was that USA was a lot richer to start with compared to USSR which was still recovering from the monumental damage inflicted by the invading Germans during WW II.

I knew it was especially bad for the Russians. Even so, Saker's description below puts the carnage is especially human terms. And he explains why the Russians are so grateful that Putin put some serious brakes on the neoliberal destruction of his country. Which also explains why the elites in USA are so furious with him. Suddenly, the baseless and mindless Russia-bashing seems to sound almost rational coming from the country's Predator classes. Putin is hated because he partially foiled one of the greatest thefts in history.

Of course, that is also why V. Putin is so beloved. Those constituting the collateral damage classes tend to admire anyone who makes their lives possible again.

Monday, October 9, 2017

America's Russia-gate Obsession - Sign of a Failing Nation


Can the people pushing Russia-gate possibly believe their own BS?? Was anyone so asleep during junior high math that they could believe that a $200,000 Facebook ad buy could swing an election where billions were spent on political persuasion? But the even bigger question is, How much damage can be done by the exposure of such massive stupidity on the international stage? While USA is clearly still the biggest bully in the neighborhood as measured by its willingness to spend so much money on weapons systems and soldiers in uniform, there are a LOT of ways to exercise power. Unfortunately for USA, these alternate methods rely heavily on the ability to convince the rest of the world that competent people are in charge. Between Donald Trump's inability to organize an effective government and the Democrats willingness to push the absurd storylines of Russia-gate, the illusion that USA is run by wise and virtuous people is taking massive hits below the waterline.

The imperial apparatus looks like it is in the process of collapse. The examples of this collapse are numerous but for me, the biggest sign of the loss of imperial power is the overdue attack on the petro-dollar.  So long as petroleum is traded in dollars, the USA can print as many dollars as it wants without fear of inflation because the world is effectively on an "oil standard." With the petro-dollar, multi-billion monthly merchandise trade deficits are essentially harmless. The petro-dollar advantage is so great that oil countries that attempted to opt out of the system—like Libya and Iraq—soon found themselves being destroyed by USA military aggression.

So now the Chinese and Russia have banded together to make war on the petro-dollar. Russia has a massive resource base while China has become an industrial superpower. Both have nukes and neither likes being pushed around. But probably the deciding factor in their decision to move against the petro-dollar now are the obvious demonstrations that USA is being run by badly-educated, misinformed, wildly-incompetent, fools. Ken Galbraith used to say that successful revolutions are usually a matter of someone kicking in a rotten door. Hard to imagine a door more rotten than one composed of Trump and those buffoons who are pushing the hoax that is Russia-Gate.

Tuesday, October 3, 2017

China and India get serious about sustainable development


My interest in developmental economics was first triggered by my Kansas grandfather. He was one of those farmers who thought science was the path to an easier life and greater prosperity. He was big into water management and had contoured his slightly hilly land already in the 1930s and put in two holding ponds (that grew some VERY large turtles). His father was the immigrant from Sweden (1873) who showed up with two years of university-level horticulture instruction (Lund). So my grandfather was very close to ground zero of the project to transform SE Kansas into productive farms. The successful introduction of agriculture into some quite hostile environments is easily the most poorly-told tale in USA history. This is unfortunate because it is probably the most perfect case study in development economics.

One night in the early 1970s, I sat in on a fascinating conversation held by student Indians and Bangladeshis who were my neighbors in that ratty apartment building. What was so interesting is that all the members of this little group were sons of privileged men wealthy enough to send their offspring to foreign universities and quite naturally assumed that they would have a hand in shaping the future of their nations. So mostly they wanted to discuss the best strategies for eliminating the very real pain of underdevelopment even though most of them were computer science majors. I was there because I had shown interest in their pet subject and they hoped I had some expertise on what Minnesota had done right to achieve its level of prosperity. At the time, I really didn't know much, but I have been fascinated by what works ever since so I would gladly revisit some of those bull sessions.

At one point, the most intense of the Indians exclaimed, "Our problem is that we basically have only two sources of energy—nuclear and dung!" Of course, he never even thought of solar because in those days, PV cells were so rare and expensive, only NASA could afford them. Well now they are cheap and India is extremely rich in solar power. And as the video clip below shows, India is becoming very hip to their new reality. My old neighbor is likely overjoyed.

And it looks like China is set to lead the world in fossil-fuel-free transportation. Electric cars seem like a natural fit for them and goodness knows their current automotive fleet is choking her cities so the need is quite obvious. And for my younger readers in USA, you would hardly suspect it by looking around but this country used to routinely create transformative projects like those illustrated below.

Monday, October 2, 2017

A “Meathead” foreign policy?


When the Berlin Wall came down in 1989, I actually celebrated with champagne. I almost never drink anything alcoholic so this was WAY out of character for me. But I wanted to celebrate in a socially conventional fashion because I really thought the Cold War was over and we could FINALLY have "normal" relations with Russia. By that time, I had already begun to understand that USSR was absolutely critical to the history of the 20th century because it was the Red Army that defeated the Germans in WW II—almost single-handedly. Besides, they are, like me, a people of the North and it is quite easy to feel a kinship with such people when it is -20° F—like it gets several times a winter in Minnesota.

So it is with horror that I look on at this latest wave of Russia-bashing. It makes no sense to me at all. This is especially true because Russia is mostly innocent of all the charges leveled at them. In over a year of relentless lying, the backers of the warmongering have offered zero evidence to back their claims. This insanity reached a new low last week when a video, starring Morgan Freeman (the Driving Miss Daisy chauffeur) and produced by Rob Reiner (the guy who starred as the Meathead in All in the Family) appeared on YouTube. In it, Freeman assured us that we are at war with Russia.

Warfare, for the Russians, is a calamity that killed 27 million people and reduced large sections of their country to rubble. Relationships between USA and Russia are strained these days but they are a LONG way from that. The Reiner-Freeman production is so preposterous, that I, like many, considered it a spoof. But since it has become quite obvious that Reiner-Freeman are indeed serious, I probably should start taking these madmen more seriously.

Below are two essays on this current gruesomely evil outburst of Russia-bashing. Both were written by Americans—one from the left and the other the right. I am far from sure either are completely accurate but goodness knows, I am trying to understand this utterly irrational phenomenon. Mostly, I just hope it goes away with the perpetrators feeling shame. That is probably a bit much to hope for because fools who would do this sort of thing define shameless.

Monday, September 25, 2017

Do the Leisure Class pundits know how anything works?


It's a damn chore to keep track of the Predator Class economic arguments. Which is why I am so grateful that Bill Black takes the time and effort to do those ugly chores. That the banksters are a gang of thieves is no surprise. After all, Veblen's core definition of the Leisure Class is that of the people who fasten themselves on the backs of the productive segments of society through force and fraud in the often successful attempt to get something for nothing. These people contribute nothing to society yet fancy themselves extra-smart because by their definition, cunning is the nearest synonym to human genius they have.

The great scene in Wall Street where Gekko gives his "Greed is Good" speech was hardly original. After all, the whole point of Leisure Class intellectualism is to come up with justifications for plunder. But what made that movie moment interesting is the number of movie-goers who actually thought that speech was wise, bordering on profound.

There are many who believe that such as Gekko should be accorded positions of leadership in democratic societies. Wrong! When the casinos are run by greedy crooks, the rest of us don't much care. It we don't want to do business with such people, we simply don't enter their establishments. But when those same greedheads start messing with the affairs of state, then what they do becomes everyone's business. And if these people decide that some easy money can be made by deindustrialization, the whole economy staggers. And if these people decide to rip off the system by deferring maintenance, sooner or later bridges start to fall down.

And if there is a crying need for massive infrastructure upgrades to avoid the calamities of climate change and the greedheads decide this is something we cannot afford, why then the necessary investments will not be made and the planet heats up to the point where human life becomes essentially impossible. Dangerous racket you got there, greedheads.

Saturday, September 23, 2017

Exxon-funded climate science


While most environmentalists tremble in rage over the fact that Exxon knew a very great deal about climate change already in the 1970s yet has funded a serious climate change denial effort since then, I happen to think that this is really a nearly perfect example of what Institutional Analysis can teach us.

IA would postulate that since climate change theory is based on sound science, and since Exxon can afford to hire and pay for the finest scientists on the planet, we should not be at all surprised that their scientists would probably know more about climate change than almost anyone else—including most emphatically the academics. The following is an essay written by one of those super-bright people who had her climate science project funded by Exxon.

Ms. Hayhoe also writes about why Exxon decided to become a climate change bad boy although she spends most of her time grappling with the ethical dilemmas of accepting funding from such a source. This is an interesting question, of course, but I don't believe it is nearly as interesting as the question of why Exxon would publicly deny a science that they deemed so important, it became part of their internal planning.

I have already written on this subject and will probably make several more runs at it. But mostly I believe that Exxon changed their minds when they became aware of how mind-boggling difficult it would be to actually rebuild the world so that finding and burning fossil fuels would become unnecessary (not to mention bad for their core businesses.)

Monday, September 18, 2017

The German auto giants face an existential challenge


A few weeks back, a friend of mine bought himself a used Nissan Leaf. Even though it is fully electric, this car is a long way from being a Tesla—its range is less the 100 miles and quite honestly, it is kind of ugly. Even so, I am pretty sure that no purchase in his life has made him happier. It actually makes him giggle.

Based on this small sample size, I am quite willing to announce the day of the electric vehicle (EV) has arrived. Yes they are still quite expensive although his used 2015 with less than 20k miles on the odometer cost about $11,000. Yes their low range and high recharging times make them still something of a hardship to own. But the upside is a luxuriously quiet ride combined with hiccup-quick acceleration and premium handling due to a very low center of gravity. This is in addition to a seriously reduced need for routine maintenance, lower costs for fuel, and the satisfaction of knowing your vehicle is arguably the cleanest set of wheels around. But just to make sure my friend has plenty to giggle about, Nissan has built in an incredible electronic feature set. His favorite seems to be the announcement of available chargers whenever his range drops below 20% complete with directions for finding them.

But even if EVs are the future, the current reality is that they still constitute less than 1% of cars on the road. And nobody is making money selling them. This leaves the auto giants with a monumental problem. If they spend the big money developing EVs, they will be manufacturing a money-loser that will take sales away from the highly profitable vehicles they already sell—a least for the foreseeable future. And so the temptation to not change anything is very high. This problem is especially acute in Germany where the automakers sincerely believe that they already make the best cars on the road.

Friday, September 15, 2017

Big dirty ships make "free" trade economically possible


Ever since the steam guys figured out that it was possible turn heat into motion, folks have been figuring out the thousands of applications for this possibility. Powering ships was one of the first uses of fire-driven power and it remains an important though small niche market (certainly in comparison to land-based transportation and electrical generation) for fuels. The niche has gotten considerably larger in recent years as traditional manufacturing nations off-shore their industrial base to places like China. All of this has been made possible by building very large ships burning the cheapest petroleum available. And they are astonishingly efficient—1/10 of a horsepower can move a ton of shipping through the water at commercially viable speeds.

Until now, no one has seemed to much care that these mega-ships are filthy when it comes to exhaust because for most of their water-borne lives they are out of sight of land. Unfortunately, it doesn't matter where air pollution originates, it is all being dumped into the same atmosphere. When it comes to building a fire-free world, big shipping will be one of the more difficult problems. Giving up mega-ships burning bunker oil will be extremely hard to do. And one of the problems is that impediments to trade like changing the economics of shipping will be viewed with horror by the serious acolytes of "free" trade.

Monday, September 11, 2017

Who murdered the peace movement?


In the essay below, Paul Craig Roberts asks a damn good question, "Who murdered the peace movement?" when discussing the current runaway warmongering in official Washington. As someone who spent a significant fraction of my life before 30 involved in various forms of the peace movement, I'd like to take a crack at that one.
  • Peace movements are automatically the weaker party. It is a thousand times easier to gin up the warlike animus than to teach folks (especially young men) that no one wins wars and that everything from sex to the economy is much better under conditions of peace. Peace movements are only successful when there are highly intelligent and charismatic leaders (like Bertrand Russel) who can make the peace arguments. It also helps to have religious movements (Quakers, Mennonites) that can do the heavy lifting of training successive generations of young men why the peace arguments are superior.
  • The antiwar activities associated with the Vietnam War were notoriously empty intellectually and ideologically. In my experience, a minimum of 95% of the young men who participated in the antiwar movement were merely trying to keep their own asses safe. The day after the first draft lottery I had occasion to visit the Quaker-run Twin Cities Draft Information Center. The place was empty except for the lone woman who had shown up to unlock the doors. 2/3 of their "clients" had gotten their good news and didn't need the help of the dreary folks who liked to stress the moral illiteracy of the warmongers.
  • After Vietnam, the military types learned their lessons on how to avoid the influence, such as it was, of the peaceniks. With their all-volunteer forces and a well-thought-out strategy of spending their money in every congressional district, they would never again lose a political battle over any war they wanted to start. After the last great unsuccessful peace marches opposing the invasion of Iraq in 2003, the peace types realized their situation was utterly hopeless and pretty much gave up.
That's what murdered the peace movement. Which is sort of ironic when one considers that the peaceniks have ALL the good rational arguments. But in the face of the unrelenting propaganda that the warmongers have at their disposal, even people who know and fervently agree with the outcome-based facts of a peace philosophy find it just a whole lot easier to shut up and fume at the unrelenting stupidity of those who still believe that warfare solves anything.

Monday, September 4, 2017

Stone on USA "intelligence"


As hurricane Harvey dumped up to 52" on parts of Texas, our elected officials ponder the grave and soul-searching question "Is my hatred for Russia pure enough." The latest sanctions bill against Russia passed the Senate 98-2. That folks is the Gulf of Tonkin vote. 2% is also about the percentage of folks with a minimal clue compared to the 98% sheep who will believe almost anything and must follow their emotions because their intellects were never properly developed. I mean, seriously, are their any sentient Americans who want to risk nuclear war over Crimea, or Syria, or Iran. And yet the vote was 98-2.

And of course, while we fight over Confederate-era statues and other forms of utter irrelevance, the big problems like climate change go unaddressed. This is absolutely insane. And Oliver Stone and Paul Craig Roberts cannot figure out why there is so much insanity. Of course, they are part of the awareness 2% so they cannot intrinsically understand.

Monday, August 28, 2017

McCoy on the CIA


McCoy is a Yalie who not especially surprisingly got involved with the intelligence services. Skull and Bones is at Yale and the bright and well connected often join forces to become what has lately come to be called "the deep state." McCoy is not well-connected but as can be seen from his beautiful writing, he is obviously very bright. This combination has often led to some scathing outsider critiques and McCoy's here is a doozy.

I have two comments on his expose:
  • McCoy is appropriately outraged that during the Vietnam War, the CIA moved so much heroin into South Vietnam that an estimated 34% of USA forces became regular users. Well yes, wartime profiteering in hard drugs probably doesn't have a lot of support. But I had a neighbor in St. Paul who was one of those users. He was a poor farm kid from northwest Minnesota who had managed to get a degree in French from a St. Paul college. The army turned him into a translator who was assigned to get information from captured Viet Cong. The guys doing the actual interrogation were South Vietnamese army but he was in the room when the torture took place. He never really recovered from that experience and halfway through his tour, the army realized their mistake and reassigned him to Saigon where he spent the rest of his time making sure the hookers with USA clients got their regular shots. This wasn't much of an improvement as he became witness to another wartime-related form of human degradation. Soon he was consuming the readily available heroin. His favorite method involved a regular cigarette that had been soaked in a heroin bath and dried. He reported that the advantage was that he could consume his drugs in the presence of his commanding officers and no one seemed to notice because they looked and smelled like normal cigarettes. In his opinion, heroin was the only reason he survived Vietnam without going insane and committing suicide. So strange as it may sound, getting smack to USA troops may have been one of the more virtuous acts in CIA history.
  • McCoy has done us all a serious service by telling us what some of our taxpayer money has been spent on. On the other hand, one can only wonder at what might have become of such a talented person if he hadn't wasted his life chasing the bad guys. It is MUCH better than being one of the bad guys, of course, but in the end it is still just mostly Leisure Class silliness.

Tuesday, August 22, 2017

The total triumph of the idiot classes


The absolute WORST feature of Identity Politics is that it trivializes everything. There are BIG problems like climate change, the fact that folks with schoolyard bully mentalities have access to doomsday weapons, the general collapse of the biosphere, and the reality that the global economy is being run by sociopathic lunatics. Yet there are those who believe that I should be most concerned about the sort of statuary found in obscure parks in mainly the Old South. Now I understand that this sort of symbolic posturing is about all most people can muster as a public gesture. And I know it is WAY beyond the abilities of your typical mainstream journalist to write about anything more complex or important than transgender bathrooms. But sooner or later, we must address the big problems or humanity will cease to exist on the third rock from the sun.

Perhaps the best example of a culture run by excessively trivial dimwits is the current outbreak of Russia-bashing. To listen to these cretins, we are supposed to hate the Russians because they annexed Crimea after the anti-Russian coup in the Ukraine. The Crimeans, who have considered themselves part of Russia since Catherine the Great, wanted to rejoin Russia so badly that their vote to become part of the Russian Federation was well over 90%. Crimea was also Russian by virtue of a LOT of spilled blood. Between the Nazi invasion, the siege of Sevastopol, its surrender and the pitched battles to recapture it, the Red Army and civilians, mostly Russian, lost over 500,000 in the battles for Crimea during the Great Patriotic War. That's more than the totals for all of WW II for the French, British, and USA combined. The idea that Russia was going to give up Crimea over a chickenshit coup in Kiev is beyond preposterous. Yet Crimea is reason #1 given for the current round of Russia-bashing.

Monday, August 21, 2017

Neoliberalism—the catastrophic idea that won the day despite being wrong about everything


1973 turned out to be the major economic watershed year for most people alive today. Because that was the year that the pro-growth assumptions of the Keynesians were run out of town.  I was in college when it happened. It was a college known for its Keynesian perspective. The head of the economics department, one Walter Heller, had been JFK's top economic advisor and liked to brag that he taught the principles of Keynes to the President of the USA. In fact, almost anyone who ever had Heller for a class, or had even just met him professionally, had heard this boast. I actually enjoyed his JFK stories because he told them to illustrate the point that even "mere" politicians could understand a set of ideas that had a well-deserved reputation for being difficult.

The University of Minnesota had been "Keynesian" since Alvin Hansen became a full professor in 1923. Actually, calling Hansen a Keynesian is more than a little bit misleading. The USA midwest had only recently been settled so there was a constant stream of political agitation for an economics that represented the world views of people who were attempting to claw a civilization out of some very empty places. Hansen grew up in Viborg South Dakota among people who were attempting to grow row crops and other agricultural pursuits on grassland that had never been plowed. For such people, economic plans that emphasized development were the only ones that would possibly interest them. He studied these ideas under Richard Ely and John Commons at the University of Wisconsin—another new and developing state. So Hansen already was a believer in pro-growth economics long before Keynes ever published his General Theory in 1936.

That Hansen was obviously a "Keynesian" before he ever heard of the man was not unique to him. Marriner Eccles, hands down the best central banker the USA has ever had, was "accused" of being a Keynesian because of his guidance of the Fed during the Roosevelt years. No less a figure than Ken Galbraith called Eccles the most important Keynesian in the land. And yet Eccles claimed to his dying day that he had never read Keynes. For men like Hansen and the Mormon from Utah Eccles, calling them Keynesians was merely a label used by lazy academics and journalists who weren't about to go to the trouble of understanding why folks from frontier settlements might have independently developed pro-growth economic ideas.

Below is a Guardian article that explains how the feudal / imperialist economics came roaring back when the Keynesians faltered in 1973. Their story is about the battle of ideas between Keynes and Friedrich Hayek. My story is that the Keynesians lost because by 1973 their profession had far too many Leisure Class hacks (like Paul Samuelson) and far too few giants like Hansen and Eccles who understood the importance of the Producer Classes and their interests (no matter how they were labeled).

I have written about Hansen and the USA "Keynesians" before:

Wednesday, June 3, 2015
Frances Perkins and the fight for decent working conditions


Sunday, November 6, 2011
Waking up to the relentless idiocy of neoliberalism

Neoliberalism: the idea that swallowed the world

The word has become a rhetorical weapon, but it properly names the reigning ideology of our era – one that venerates the logic of the market and strips away the things that make us human.

Stephen Metcalf, 18 August 2017

Last summer, researchers at the International Monetary Fund settled a long and bitter debate over “neoliberalism”: they admitted it exists. Three senior economists at the IMF, an organisation not known for its incaution, published a paper questioning the benefits of neoliberalism. In so doing, they helped put to rest the idea that the word is nothing more than a political slur, or a term without any analytic power. The paper gently called out a “neoliberal agenda” for pushing deregulation on economies around the world, for forcing open national markets to trade and capital, and for demanding that governments shrink themselves via austerity or privatisation. The authors cited statistical evidence for the spread of neoliberal policies since 1980, and their correlation with anaemic growth, boom-and-bust cycles and inequality.

Neoliberalism is an old term, dating back to the 1930s, but it has been revived as a way of describing our current politics – or more precisely, the range of thought allowed by our politics. In the aftermath of the 2008 financial crisis, it was a way of assigning responsibility for the debacle, not to a political party per se, but to an establishment that had conceded its authority to the market. For the Democrats in the US and Labour in the UK, this concession was depicted as a grotesque betrayal of principle. Bill Clinton and Tony Blair, it was said, had abandoned the left’s traditional commitments, especially to workers, in favour of a global financial elite and the self-serving policies that enriched them; and in doing so, had enabled a sickening rise in inequality.

Over the past few years, as debates have turned uglier, the word has become a rhetorical weapon, a way for anyone left of centre to incriminate those even an inch to their right. (No wonder centrists say it’s a meaningless insult: they’re the ones most meaningfully insulted by it.) But “neoliberalism” is more than a gratifyingly righteous jibe. It is also, in its way, a pair of eyeglasses.

Peer through the lens of neoliberalism and you see more clearly how the political thinkers most admired by Thatcher and Reagan helped shape the ideal of society as a kind of universal market (and not, for example, a polis, a civil sphere or a kind of family) and of human beings as profit-and-loss calculators (and not bearers of grace, or of inalienable rights and duties). Of course the goal was to weaken the welfare state and any commitment to full employment, and – always – to cut taxes and deregulate. But “neoliberalism” indicates something more than a standard rightwing wish list. It was a way of reordering social reality, and of rethinking our status as individuals.

Friday, August 18, 2017

A German (DW) update on climate change


Climate change is a BIG issue around here—not that you would know it from the paucity of reporting on the subject. My excuse is that there is more than enough evidence of climate change—and far too little on the subjects of how we got to this place where almost everything everyone does only adds to the problem. Turns out that the technological problems caused by the total domination of fire-based economies is almost trivial compared to the cultural expressions that support them. So much so that any suggestion that the world must move to fire-free societies is greeted as the most radical form of madness imaginable—even though such an assertion is utterly true.

But since not a lot is getting accomplished towards this necessary goal, we still need reminders of how serious the problems caused by a warming planet really are, and that ignoring these problems will not make them go away. This little reminder from DW must do for today. After all, we simply must get back to the "serious" problem of where we site monuments to Confederate War "heroes." (NOT)