Wednesday, March 14, 2018

Even the Paris 2015 climate accords won't solve the problem

Robert Hunziker is perhaps the politician that best understands climate change—and has for some time. He is running for a seat in Washington's 8th Congressional District. I certainly hope he wins.

Whenever I stumble across someone who has a profound and deep understanding of a subject, I am immediately curious as to how he came to be that way. I am especially curious if that person is young. His campaign literature sort of explains his enlightened worldview. Turns out that there CAN be some significant advantages to learning a society from the bottom up. So here's to someone who has had enough exposure to Producing Class virtue to understand that no matter how enlightened a Leisure Class actor, that person cannot build the sustainable future.

Fixing Global Warming is Bigger Than Paris ‘15


The worldwide effort to harness, slow down, lessen, reduce, remove the threat of global warming is epitomized by the Paris ’15 climate accord. This agreement calls for nations of the world to implement plans to slow down greenhouse gas emissions, specifically CO2 from fossil fuels, and to take other remedial actions necessary to hold global temps below 2°C but preferably 1.5°C relative to the start of the industrial revolution over 200 years ago.

That task may be an overwhelming one, more so than realized, due to the simple fact that, according to YaleEnvironment360: “Frighteningly, this modern rise of CO2 is also accelerating at an unusual rate. In the late 1950s, the annual rate of increase was about 0.7 ppm per year; from 2005-2014 it was about 2.1 ppm per year.” (Source: Nicola Jones, How the World Passed a Carbon Threshold and Why It Matters, YaleEnvironment360, January 26, 2017).

“If humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted… CO2 will need to be reduced… to at most 350 ppm,” according to Columbia University climate guru James Hansen. We sailed past that target in about 1990, and it will take a gargantuan effort to turn back the clock,” Ibid.

Meanwhile, year-over-year CO2 numbers continue a relentless march upwards, unimpeded.

Monthly average CO2 Readings in Parts Per Million (“PPM”)
1850 (Ice Core Data) 285.20
1959 (Mauna Loa readings start) 316.18
February 2017 406.42
February 2018 408.35
March 2018 409.97
A return to 350 ppm is looking very distant.

For perspective on the challenge ahead, Wally Broecker (Columbia) aka: the Grandfather of Climate Science, discussed the outlook in a July 2017 interview:

“In 1950s, when I was in graduate school, we got 15 percent of our energy from renewables and nuclear, and 85 percent from fossil fuels. Today it’s the same. Both of them have been increasing at 3 percent a year.” (Source: David Wallace-Wells, The Man Who Coined the Term ‘Global Warming’ on the Worst-Case Scenario for Planet Earth, Daily Intelligencer, July 10, 2017).

Remarkably, according to Broecker, the ratio of renewable-to-fossil fuel energy has not changed one iota in almost 70 years. That’s all the more remarkable because, since the 1980s, global warming has been pinpointed as an existential threat. Yet, the renewable-to-fossil fuel energy ratio stays the same. According to Broecker, that ratio needs to change or all bets are off.

“Renewables and nuclear are not changing in their percentage share. And in order to stop the CO2 from rising we have to go to a factor-of-ten reduction in fossil fuel burning — at least a factor of ten. And that means changing all the world’s infrastructure,” Ibid.

The world relies upon trillions of dollars worth of infrastructure to source, create, and deliver energy. However, if renewables take over as the primary source of energy creation, a lot of fossil fuel infrastructure will be worth zero. So far, based upon the record over the past seven decades, fossil fuel infrastructure looks solidly in place, in fact, growing in size, and there are some powerful forces in the world that want to keep it that way, which, in turn, makes it doubly difficult to achieve Paris ’15.

One problem in confronting the global warming issue is participation, by whom and to what extent? Scientists such as James G. Anderson of Harvard states it takes a WWII type of effort to overcome the global warming problem, which implies all hands on deck, as well as within 5 years in a substantive way.

But, there are major obstacles: One year ago President Sauli Niinistö of the Republic of Finland met with President Putin of Russia at the International Arctic forum in Arkhangelsk, Russia, March 29-31, 2017.

In his opening remarks, President Niinistö stated: “My starting point today is the growing threat of climate change. Tackling this challenge is crucial if we want to ensure that the Arctic remains the place it is today. But the issue is of global significance: If we lose the Arctic, we lose the whole world.” (Source: Opening Remarks by the President of the Republic of Finland Sauli Niinistö at ‘The Arctic: Territory of Dialogue’ Forum, Arkhangelsk, 30th March 2017).

He continued: “This catastrophe will not be limited to the Arctic. There will be enormous consequences worldwide. As the ice melts, sea levels will rise. As the ice melts, solar radiation will not be reflected back – instead, its energy will further warm the water and accelerate global warming,” Ibid.

He mentioned Russia’s 7,000 methane-infused pingos that have suddenly popped up throughout Siberia, in his words: “A further concern is the recent report made by Russian scientists that in Siberia there are some 7,000 methane-filled pockets waiting to release content. This will create danger and disruption to infrastructure and humans in the area. What is worse, once released, methane is a much more potent greenhouse gas than carbon dioxide,” Ibid.

At latitude 66°33′47.1″ N, the Arctic Circle intersects Finland at its midpoint. President Sauli Niinistö knows the Arctic. He lives it.

Thereafter, President Putin’s speech at the same forum emphasized: “Russia, which makes up almost a third of the Arctic zone… includes over 150 projects with estimated investment of trillions of roubles… and creation of so-called development support zones… and the development of offshore deposits… we devoted special attention to the Northern Sea Route… almost a year-round artery….” (Source: Vladimir Putin’s Speech at the ‘Arctic: Territory of Dialogue’ International Arctic Forum, About the Forum, International Arctic Forum, March 2017).

No mention of global warming. However, Russia can’t wait for open blue waters in the Arctic for development of fossil fuels and open sea routes over the North Pole for transportation purposes.

Furthermore, in interviews following the forum, Putin stated his opinion that humans are not responsible for climate change: “Icebergs have been melting for decades, started in the 1930s” when, according to him, “there were no serious anthropological factors at work.” He says global warming cannot be stopped because “it’s tied to global cycles on Earth. The issue is to adapt to it.”

Russia adapts by spending trillions of rubles to explore for fossil fuels. Similarly, the United States follows in lockstep by opening up national parks all across the country to big oil, including Arctic Wilderness refuges.

Climate change deniers lead the world’s largest economy (United States) and Russia, the sixth largest. They are at the top of the pyramid of fossil fuel production at the very moment when the infrastructure of the Arctic, i.e., multi-year ice, is crumbling apart right before everybody’s eyes. Therefore, the question is whether a disintegrating Arctic is good or bad. Obviously, by their actions alone, both America and Russia want collapsing Arctic infrastructure. They are banking on it!

President Niinistö succinctly summed up the risks of a collapsing Arctic, on January 2nd 2018 when he was sworn in for a second six-year term, after a landslide victory at the polls: “Combating climate change is the most important issue in the coming years. That’s just how it must be, so that humankind won’t have to endure the destruction of the planet.” (Source: President Niinistö Emphasizes Climate Change at Inauguration, UUTISET News Jan. 2nd, 2018).

At that swearing-in ceremony, Maria Lohela, Speaker of the Parliament, praised President Niinistö’s first-term and specifically mentioned his initiatives to combat the use of coal, which accelerates the melting of polar ice caps.

Meanwhile, the Trump administration’s frantic delirium over coal, oil and gas exploration/production is only surpassed in exuberance by an historical event, John D. Rockefeller’s heartfelt passion for turning nature’s bounty into a fortune, growing Standard Oil Company from the world’s largest refinery in 1870 into the world’s first and largest multinational in 1911, indeed, a record pace for capitalistic development.

But, with America’s national parks opening up carte blanche to big oil, Trump has a shot at exceeding Rockefeller’s record pace. His emphasis, like Rockefeller of 100 years ago, is drill everywhere, far and wide, pole to pole.

Meanwhile, it’s nearly unimaginable/unbelievable contrasting Middle Eastern ethos to American and Russian, all major oil producers. As for example, the Kingdom of Saudi Arabia’s biggest solar farm currently in operation covers the parking lot of the National Oil Company, Saudi Aramco.

“The Saudi government wants not just to reshape its energy mix at home but also to emerge as a global force in clean power. (Source: Stanley Reed, From Oil to Solar: Saudi Arabia Plots a Shift to Renewables, The New York Times, Feb. 5, 2018).

By the end of the year, Saudi Arabia aims to invest up to $7 billion to develop seven new solar plants and a big wind farm.

In September 2017, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Prime Minister of the UAE and Ruler of Dubai, launched plans for the world’s largest Concentrated Solar Power project, including the world’s tallest solar tower.

In August 2017 Kuwait launched a $1.2B solar power plant project.

As of January 2018, Oman completed its feasibility plan for a huge solar park of 500MW.

The Kingdom of Bahrain is making plans to build a 100MW solar plant as part of its renewable energy agenda.

OPEC is turning green for practical purposes, but more importantly, they’re demonstrating an intellect and foresightedness above and beyond boorish accretion of oil as a way of life. They see the future.

Meantime, similar to John D. Rockefeller’s race to oil glory 100 years ago, the U.S. and Russia are in a trillion-dollar race competing for newly exposed riches of oil and gas but in frigid waters sans ice and in Arctic wildlife refuges, pounding on the door of the final frontier where a mistake magnifies ten-fold. It’s a dicey future.

Back in the day Rockefeller was a visionary. Today, the Rockefeller Family Fund is divesting all of its holdings of fossil fuel companies. more

Monday, March 12, 2018

Infrastructure funding

Whenever I discuss possible solutions to climate change, it isn't long before someone demands, "How much will this cost??!! And how do you propose we pay for it?" These are in fact excellent questions because the MAIN reason why this civilization-threatening problem doesn't get seriously addressed is the sticker shock that occurs whenever someone gives a realistic estimate for a fix.

Then there's Ellen Brown who reminds us that the problem of not enough money should be the easiest problem to solve of all.  Then she gives us historical examples of why democratic money creation suggest the perfect solutions to the funding problems. Unfortunately, folks who saw the world like Ellen does mostly disappeared by the early 1950s so she has become an almost lone voice for a sane monetary and banking organization.

Which is all the more reason why she should be read.

Friday, March 9, 2018

Climate Tipping Points

Like many college students, there has been a sense when the subject was climate change that we could always "cram for the final" when things got really serious. Now I feel a shift in tone—there is a sense of urgency. Below are two short pieces that address why this may be so. The first addresses the new and truly frightening data the great scientific measurements can provide. While second talks about the disappearing paradise that was Santa Barbara California. Two different looks at impending doom and how close it may be.

Monday, March 5, 2018

The power of conventional wisdom

One of the smartest men I know once assured me that the "Zeitgeist cannot be changed—that's what makes it the Zeitgeist." OK. Except I know better. I grew up in the world created by the Keynesians of the Ken Galbraith variety. I watched it just disappear in the wake of the 1973 Arab oil embargo to be replaced by people who believed in ideas that supposedly had been forever discredited by the Great Depression. I still gasp at the sheer audacity of it all. It helped immeasurably that we had become a land of historical illiterates (The United States of Amnesia--Gore Vidal) so forgetting economic history was a trivial problem. And so the Zeitgeist changed from the Keynesians to the Monetarists in an historical eye-blink. Maoists become central bankers. And no, I most certainly do NOT believe all this happened by accident.

Even so, this was much easier than anyone could have imagined (or at least me.) The family business was running a church where I learned just how difficult it is to get folks to change their minds. Turns out well-funded think tanks can change quite a few minds. Jason Hirthler lays out a believable explanation for how and why this happened. Interesting reading.

Tuesday, February 27, 2018

DW examines what the oil giants knew about climate change

DW has produced an excellent documentary on the subject How much did the major oil companies know about climate change? Turns out they knew a very great deal. People who actually did some of the research are interviewed for the first time. This is quite remarkable.

The video has been pulled down from YouTube but can still be seen here.

Monday, February 26, 2018

Last Year Hottest ‘By Far’: World’s Oceans Top Temperature Records Again

Remember, air pollution is just a step on the way to becoming water pollution. This was the most memorable one-liner in a class on Energy and Public Policy I took in 1974. Of course, the big subject in those days was acid rain but the policy holds true for global heat retention. Whatever heats the atmosphere will eventually heat the oceans. 2017 was a record year for warming oceans. It was also a record year for damaging hurricanes with Harvey's damage to greater Houston at over $125 billion leading a $300+billion total in natural disasters.

Wednesday, February 21, 2018

A sense of urgency

Quite honestly, I do not know a great deal about Robert Hunziker. But on Monday, he wrote a piece that was special because it injected urgency into the climate debate. Urgency is a quality I often forget to stress both in my life and this blog. So I really appreciated his effort. If we are to escape the fire and energy trap we have built for ourselves, time is rapidly running out—if the goal is to build a post-fire civilization, we should have gotten serious about it in 1973. Projects take time. BIG projects take BIG time and effort. So rebuilding complete civilization, which is the biggest project I can imagine, will require trillions and a global effort.

In addition to reposting him below, I wrote him an email.
Your There is no time left was magnificently crafted—not to mention scary as hell.

As I see it, the fact that no one wants to talk about genuine climate change solutions is that the problem is SO large, very few can comprehend even a tiny segment of the big picture.

The basic problem is fire—that’s where most of the excess CO2 is generated. Making things worse, we are burning carbon that is millions of years old (coal, petroleum). And making this catastrophic, civilizations were designed to run on fire. This took humanity at least 6000 years to accomplish. If your essay is even partially correct, we have about 5 years to replace this incredible investment.

Part two is cultural. This sort of solution will absolutely depend on the kind of people who build the extremely difficult. While the idea of covering a cloudless hunk of the Gobi with solar cells is imaginative, it doesn’t work unless people figure out how to move that massive energy to China’s great cities. Since this has never been done before, it rivals the moon shot in complexity. (Five years, huh?) And yet, we live in a culture whose closest portrayal of the scientific and technological literate is The Big Bang Theory. Yet it is precisely these sorts of persons who have ANY chance of building the new and necessary world. At least we could stop making fun of them and learn what they must accomplish.

Rebuilding complete civilizations will be expensive. We need the world’s central banks to change policy so that the end-fire project is properly financed. Unfortunately, the people who pull the large levers of monetary policy share a fatal flaw—they are scientifically and technologically illiterate. Yet they can either ensure a new civilization or watch the one we have burn to a crisp. Time to make a new qualification for potential central bankers—they MUST be able to demonstrate an understanding of what it means to live in a fire-based civilization.


Monday, February 19, 2018

Peak Fracking

Kunstler has a habit of speculation about the future with at best, partial information. But on this subject, he is spot on! Shale oil is a mirage. It is a secondary recover scheme that only works when there is plenty of money financing this crazy difficult / expensive scheme. In many cases, shale exploration does not even cover the investment in purely energy terms so eventually, even the hot money boys will find something else to do.

Of course, none of this is especially new. I knew folks in 1960s oil patch North Dakota who could have predicted that the long-term outcome for such scheme was non-producing wells.

Enjoy Kunstler at his most informative.

Sunday, February 11, 2018

HAWB 1816-1834 - West Point Foundry and Steam Power for the Navy

How America Was Built

HAWB 1816-1834 - West Point Foundry and Steam Power for the Navy

The following is an excerpt from my book Admiral Benjamin Franklin Isherwood and the Scientific Study of Steam Power (which will hopefully be published later this year), detailing how the U.S. government helped create a private enterprise in 1816, how that enterprise became a leading center of metal working and steam engine building, and how 18 years later the national government turned to that company to help the Navy adopt the new technology of steam propulsion. This is not the mythical laissez faire, "free market" capitalism that supposedly built the United States. It is a deliberate policy of nation building, originated by first Secretary of the Treasury Alexander Hamilton, and carried out by his successors. 

By the early 1830s, there were some people beginning to worry about the more rapid development of naval steam power in Britain, but not much was done. Some Navy Secretaries briefly summarized known developments in the Royal Navy their annual reports, but Congress was not inclined to act on the matter.[1] Things began to change in July 1834, when U.S. Senator from New Jersey Mahlon Dickerson was appointed Secretary of the Navy. Dickerson had been chairman of the Senate Committee on Commerce and Manufactures for the 16th through 18th Congresses and the Senate Committee on Manufactures from the 19th through 22nd Congresses, and no doubt was familiar with the state of steam engine design and manufacture in the country. The Board of Navy Commissioners was already in contact with engine builders, and was trying to obtain plans from the West Point Foundry.[2] In June 1835, President Andrew Jackson ordered Navy Secretary Dickerson to direct the Board of Naval Commissioners to actually begin building a steam battery. This would become the 181-foot, 1,200-ton Fulton II, based on Humphreys’ plans of 1831, with an additional 41 feet of length.

But the Navy had not a single officer or sailor with a solid knowledge of the design and operation of steam engines.... by the end of the year the Board was forced to admit it simply did not have the knowledge and expertise to carry it into effect. In a remarkable letter to Secretary Dickerson, dated December 30, 1835, the Commissioners frankly confessed “their ignorance upon the subject of steam engines” and doubted they would be able to even provide “necessary information to enable persons to make proper offers” to design and build the engines. “They [the Commissioners] are satisfied that they are incompetent themselves, and have no person under their direction who could furnish them with the necessary information to form a contract for steam engines that may secure the United States from imposition, disappointment, and loss…”[3]

Fully aware that they lacked the expertise to make any decisions regarding procurement of steam engines, the Board of Commissioners, requested assistance from Gouverneur Kemble, president of the West Point Foundry, at the time perhaps the largest iron foundry and engine builder in the country. The West Point Foundry was established in 1816 at one of four strategic locations selected by Secretary of War James Monroe and Secretary of the Treasury Alexander J. Dallas for the construction of iron foundries to produce cannon and shot for the Army and Navy. It was located in Cold Spring, New York, on the Hudson River opposite West Point. (The other foundry sites were Georgetown, D.C., Richmond, Va., and Pittsburgh, Penn.) To begin construction, $25,000 in direct funding was given to Gouverneur Kemble, a New York businessman “who had served Commodore Stephen Decatur's fleet as an assistant navy agent in Cadiz, Spain during the Barbary War in 1814,” and who therefore was “no stranger to the Navy Department's method of procuring supplies or doing business.”[4] 

The foundry’s first engine for a steamboat was built in 1823 for the James Kent. It was a very successful design, securing the company a leading reputation for building engines and other machinery. Over the next two decades the foundry built engines for a number of other boats, including Victory (1827), DeWitt Clinton (1828), Erie (1832), Champlain (1832), Highlander (1835), Swallow (1836), Rochester (1836), Utica (1837), and Troy (1841).[5] Beginning in 1830, West Point Foundry built three of the first four steam railroad locomotives made in the United States. The first, Tom Thumb, was designed, built, and operated by Peter Cooper, and was only an experimental machine, intended not for revenue service, but to convince the directors of the Baltimore and Ohio Railroad that steam was a viable source of power for railroads (it must be recalled that at the time, there were widespread doubts about the feasibility of applying power to iron wheels on iron rails, especially up a grade.) The next three locomotives built in the U.S. were all intended for revenue service, and all were built by the West Point Foundry: Best Friend of Charleston (1830), and West Point (1831), both for the South Carolina Canal and Rail Road Company, followed in 1831 by the DeWitt Clinton, for the Mohawk & Hudson Railway. These was followed a few years later by the locomotives Phoenix and Experiment, the last reportedly capable of reaching 80 miles per hour.[6]

It must be noted—especially now, when the economic role of government is under constant attack as dangerous “statism”—that the shift by a government-funded establishment into a leading role in new technologies was entirely in accord with the intent of first President George Washington, and his Treasury Secretary, Alexander Hamilton, and their plans to have the new government actively foster and promote economic development. In his 1791 Report on Manufactures, Hamilton wrote:

To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients by which the wealth of a nation may be promoted…. Experience teaches, that men are often so much governed by what they are accustomed to see and practise, that the simplest and most obvious improvements, in the most ordinary occupations, are adopted with hesitation, reluctance, and by slow gradations…. To produce the desirable changes as early as may be expedient may therefore require the incitement and patronage of government… it is of importance that the confidence of cautious, sagacious capitalists, both citizens and foreigners, should be excited. And to inspire this description of persons with confidence, it is essential that they should be made to see in any project which is new—and for that reason alone, if for no other, precarious—the prospect of such a degree of countenance and support from government, as may be capable of overcoming the obstacles inseparable from first experiments.[7]

When the Navy Board of Commissioners requested his assistance, Kemble in turn sought the advice of Robert L. Stevens, son of the builder of the first steam battery in 1814. He had helped his father design and build the steamboats Phoenix (1807) and Julianna (1811), and mastered them on the Delaware River, servicing Philadelphia. The Phoenix had been built in Hoboken, New Jersey, and her transit from thence to Philadelphia in June 1809 made her the first steamboat to sail the open ocean. Robert Stevens had also traveled to Britain to examine railroads and locomotives there, and had brought the locomotive John Bull to the U.S. in 1831 to operate on the Camden and Amboy Railroad, of which Stevens was president.

When Kemble’s brother, William—who was West Point Foundry’ agent in New York City and presumably was dealing with Stevens—sent drawings for engines to Navy Commissioner John Rodgers in January 1834, he included a note stating “Robert Stevens feels the engines above 30 inches cylinder should not be vertical due to wear in the underside and in vessels because of the length taken up by the engine.”[8]

The plans and accompanying explanations must have further perplexed the board. In June 1835, the Board requested it be allowed to again contact Stevens, plus others who had designed and commanded steam vessels. Secretary Dickerson readily agreed. Three board commissioners traveled to New York, and began gathering information. At some point, they concluded that the Navy simply needed to secure the services of someone with the training and skills required to supervise the acquisition and building of steam engines, and installing them in a hull. In July 1836, the Commissioners accepted the offer of Charles H. Haswell, a skilled worker at the West Point Foundry, to design a steam engine and supervise its construction. Haswell had been schooled in the classics, but in 1828, at the age of 19, he began working at the New York City engine works of James P. Allaire, one of the first major builders of steam engines and boilers in the United States. The brass hardware and fittings for the engine of Robert Fulton’s North River / Clermont were built by Allaire.

At first, Haswell was a temporary employee of the Navy Board of Commissioners, but it quickly became apparent that his lack of rank was a serious disadvantage in dealing with naval officers, so Haswell was given the official title of “Chief Engineer” of the Fulton II. This had little actual effect; obstruction and delays continued; and the steam battery was not ready for launch until May 1837.

With the hiring of Haswell, the virtuous economic circle designed by Alexander Hamilton was completed. The government had “cherished and stimulated the activity of the human mind,” and “multiplied the objects of enterprise,” and now was harvesting the wealth of mechanical knowledge which had thereby been promoted. The national government had provided direct funding for the creation of West Point Foundry, and within two decades it had become a center of the nation’s most advanced metalworking and machine-making capabilities. Now the government was reaching out to enlist the skills and capabilities of the Foundry to help the nation’s Navy transit into the modern era of mechanized power. 

[1] Sprout, Harold and Margaret, The Rise of American Naval Power, Princeton, NJ, 1966, Princeton University Press, pp. 112-113.

[2] Tomblin, Barbara, From Sail to Steam: The Development of Steam Technology in the United States Navy, 1838-1903 (unpublished History PhD dissertation, Rutgers University, 1988, pp. 14-15.

[3] Bennett, Frank M., The Steam Navy of the United States; A History of the Growth of the Steam Vessel of War in the U.S. Navy, and of the Naval Engineer Corps, Press of W. T. Nicholson, Pittsburgh, Penn., 1896, p. 18.

[4] Tomblin, pp. 15-17.

[5] Buckman, David Lear, Old Steamboat Days on the Hudson River; tales and reminiscences of the stirring times that followed the introduction of steam navigation, New York, 1907, The Grafton Press, pp. 137-138.

[6] “Archaeological Research at West Point Foundry Preserve,”, accessed November 7, 2017.

[7] Hamilton, Alexander, Report on Manufactures, Communicated to the House of Representatives, December 5, 1791.

[8] Tomblin, p. 21.

Wednesday, February 7, 2018

Donald Trump isn't the only solar power protectionist

The Chinese really DID cheat on solar panels. The chain of events goes something like:
  1. The Germans, even though blessed with very few good natural solar sites, decide to forge ahead with solar cell development anyway. To make this all work, they create an industry from scratch and cover the upfront capital costs with subsidies. They justify this public expense by claiming it is a jobs program for the old DDR.
  2. Solar cells are very sophisticated products. To make them successfully, they required the creation of very sophisticated tooling. The folks who figured out how to make these tools, naturally looked for new customers beyond the Germans that bought them first. So when the Chinese got into solar cell manufacture, they could purchase excellent tools off the shelf sold to them by folks who knew what they were doing. Ah yes, the advantages of being second.
  3. Suddenly, the Chinese could build solar panels for a fraction of what it cost to invent the methods in the first place. In fact they created a glut on the market that could could only be cleared by dramatically lowering prices. They lowered them so much, that the Germans (and others) actually won some trade rulings in WTO. 
  4. The EU slapped tariffs on Chinese solar panels in 2013, which were renewed in 2017. So when Trump got into the act in 2018, he was not being especially innovative. There seems little to make one believe that he acted to protect infant solar industry in USA—the most common defense of tariffs. Rather, he did it to burnish his America-First credentials. We will see how that goes.
My guess is that these tariffs will have very little impact. The reason solar is growing by leaps and bounds is that the industry has perfected some very efficient and low-cost methods of manufacture. Solar is already cheaper than any of the alternatives and new methods will probably lower costs even more. And if the Chinese government is already subsidizing their solar industry, they can probably plug a few sales holes caused by tariffs.

Tuesday, January 30, 2018

Protectionism in the age of solar cells, Part 2

When the Trump administration announced last week that it was imposing tariffs on solar cell panels mostly coming from South Korea and China, it appears that the progressive blogosphere was almost unanimous in condemning the action as an attack on solar energy.

I was dismayed that the neoliberal lies about free trade had apparently been accepted by so many. As Jon Larson wrote on Real Economics, “In certain corners of the economic world, this is a major story—mostly because it flies in the face of neoliberalism's first commandment—Thou shall not condone protectionism!”

The tariffs should be attacked, but not because they are tariffs, not because they are protectionist, not because they may lead to less imports of panels and therefore the loss of jobs of people installing them.

The tariffs should be attacked because they are not accompanied by a robust industrial policy that will help USA manufacturers replace panels no longer being imported, by panels of domestic manufacture.

Protectionism is an issue on which the Democratic Party and the left in general are very vulnerable. Basically, they have forgotten the actual history of industrial development: every single country that successfully industrialized did so behind trade barriers. Many readers may not believe me, but it is historical fact. For a relatively short but full explication of the fact that protectionism works, I point you to James Fallows’ December 1993 article in The Atlantic, “How the World Works.” For an entire book on this topic, the best is probably South Korean economist Ha-Joon Chang's 2007 book, Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, available as a large pdf file here. An excellent review of Chang’s book, by Chalmers Johnson, is here.

For a brief discussion of how this history was purposefully and deliberately eradicated from American universities and economics courses a century ago, read “Prophet of Prosperity” in a recent issue of The Pennsylvania Gazette of the University of Pennsylvania. The motive? “...landlords and other rentiers were reclassified as capitalists, just ones who invested in land and raw assets rather than machinery, and thereby earned “the increments of value attaching to land,” thus removing the social opprobrium of being exploiters, parasites and usurers. And, more importantly, to allow “money to make money.”

We like to taunt our conservative and libertarian opponents that you are entitled to your own opinions, but you are not entitled to your own facts. Well, the same applies on this issue, and to the neoliberals amongst us: you are entitled to your own opinions, but you are not entitled to your own facts. The facts are clear that historically, countries that successfully industrialized did so behind trade barriers that protected their infant industries, and protected the earning power of their working people. The facts are equally clear that since the imposition of economic neoliberalism and free trade on developing countries, and their enforcement by the World Bank, the International Monetary Fund, and other international NGOs, not to mention the USA government and others, the growth rate of the national economies of developing countries has been LESS than it was before neoliberalism and free trade. Those are the facts, and all the crap you were taught in college economics courses will not change them.

But protectionism alone does not work. There must be a national industrial policy to promote and encourage the development and growth of new industries. As originally developed by George Washington and his Treasury Secretary, Alexander Hamilton, and later in the 19th century by Henry Clay, Henry Carey, Abraham Lincoln (on Lincoln, see one of the best overlooked books on historical political economy, Lincoln and the Economics of the American Dream, by Gabor S. Borit, Memphis State University Press, 1978)., and others, protectionism was one pillar of a three-part program for national economic development. The other two were a national banking system, and internal improvements (what we today call infrastructure).

Saturday, January 27, 2018

Protectionism in the age of solar cells

The Trump administration has annouced its intention to slap some tariffs on products mostly coming from S. Korea and China. In certain corners of the economic world, this is a major story—mostly because it flies in the face of neoliberalism's first commandment—Thou shall not condone protectionism!

As two guys who are serious students of industrialization in general and USA industrialization in particular, Tony and I are pretty supportive of some sort of economic protectionism. Tony's approach is very straight-forward—he looks at the historical record and sees that every nation that successfully industrialized did it behind tariff walls.

My take is that because the financial markets are hopelessly corrupt, shortsighted, and technologically illiterate, they are unable to properly value the infrastructure of industrialization. When financialization first started, there were a few protests at the ability of real scoundrels to seize and then cash in on assets they rarely understood, who in the process of their plunder, squandered a system of wealth creation that had taken decades to create. They pissed away USA's industrial crown jewels for a tiny fraction of what they were worth with their get-rich-quick schemes. These protests probably crested with Oliver Stone's movie Wall Street—an effort so excellent, I suspect Stone didn't even know how good it was.

Along with the plunder came the justifications for why this did not matter. Around here, these loony economic expressions for how the world should work, but doesn't, are lumped under the garbage pile we call neoliberalism. And in the world of the neoliberals, there is no greater sin than "protectionism." Yet here we are with a president who believes that tariffs and such are probably a good thing. He's about 30 years too late, but he seems to think USA industry should be protected. One other thing, the Asians have been about as brazen in their theft of intellectual property as anyone—including USA from GB. The Chinese were caught red-handed dumping solar panels. The party injured by this was actually Germany but a couple of USA manufacturers won some settlement with the Chinese. Ironically, both USA victims are foreign-owned—one German, one Chinese.

I have included four essays on this subject after the break:
  1. The Asians seem to think this is a major shift in USA trade policy. My guess is that they will figure out ways to adjust to new market realities.
  2. Lindorff seems to think these tough new trade rules are a manifestation of an unhappy empire that wants to slap around China and Korea for the crime of wanting a different foreign policy than the folks from Foggy Bottom.
  3. Reuters, which always believes protectionism is a bad thing, argues that tariffs on solar panels will most hurt the solar panel installers.
  4. The folks at Rolling Stone just assume this is Trump's way of throwing some roadblocks in the way of new green technologies.
All of these folks have a point. And we will probably hear a lot more on this subject. This is a protectionist proposal in a neoliberal world—a world with thousand of economists well-trained and motivated towards shooting this thing down. As someone who participated in the debate over NAFTA, I am very interested to see how this debate will differ.

Saturday, January 20, 2018

Bids to build renewable energy in Colorado point to a bright future

In Colorado, an electric utility's request for proposals to build new generating capacity resulted in stunning evidence that renewables are now cheaper than fossil fuels--even with storage capacity included for when solar and wind are "down."

This merely confirms that there is a boom in renewable energy underway, but judged from the perspective of the task at hand--putting the entire global economy on a renewable energy basis and eliminating the burning of fossil fuels altogether--this boom is merely a blip. Bloomberg New Energy Finance, which has been tracking global investments in the sector for the past ten years, reported that renewable energy investment in 2017 totaled $333.5 billion worldwide, up three percent from 2016. The 2017 numbers were the second highest yet recorded, and brought cumulative investment in renewables since 2010 to $2.5 trillion.

This may sound like a lot of money--and it is--but it should also be viewed in the context of fossil fuels being subsidized $1.9 trillion a year. And that number is from five years ago. According to a report from the International Monetary Fund in March 2013, governments around the world give $480 billion a year in direct subsidies. This is a worldwide amount, and it is not structured as you might expect: most of these direct fossil fuel subsidies are by governments in the developing world and are designed to make petro-products affordable for poor people. The remaining $1.4 trillion, according to the IMF, is the “externalities” cost of  “the effects of energy consumption on global warming; on public health through the adverse effects on local pollution; on traffic congestion and accidents; and on road damage.” A writer summarizing the IMF report noted that by "failing to make fossil fuel companies pay" for these externalities, "governments are implicitly subsidizing those companies. IMF calls this under-taxing of fossil fuels “mispricing,” but it’s easier to think of them as indirect subsidies."
But the amount actually needed to shift the entire world to renewables is $100 trillion. We could achieve that in 15 years with a slightly less than ten percent increase in annual world economic output--which would create the largest and most sustained economic boom in human history. That is an investment of just under $7 trillion a year. So, the $333.5 billion worldwide in 2017 needs to be increased twenty-fold.

This shows that a reliance on the conservative/libertarian/neoliberal ideology of free markets and private enterprise is woefully inadequate to what needs to be done. We need the activist role of national governments promoting and supporting economic activity that promotes the General Welfare, and discourages economic activity that is useless and often predatory, such as speculative trading in stock, bond, futures, currency and derivative markets. Contrary to the myths of conservatives and libertarians, this issue of the government actively steering the national economy in a positive direction was the central focus of the U.S. Constitutional Convention of 1787. The U.S. Constitution, its mandate to promote the General Welfare, and the entire history of How America Was Built, clearly shows that government of, by, and for the people, must supervise the building of an economy  of, by, and for the people.

Thursday, January 18, 2018

The decline and fall of neoliberalism in the Democratic Party

If you are snow-bound in USA today, and want something to read, I highly recommend Ryan Cooper's excellent short summary of USA political and economic history since the New Deal, posted last week, The decline and fall of neoliberalism in the Democratic Party
Nations took various roads out of the Great Depression. Every one involved ditching liberal orthodoxy — deficit spending and the abandonment of the gold standard being the key two policies in most instances, which had to overcome resistance from business. In Germany, fascism removed "capitalist objections to full employment," wrote economist Michal Kalecki, by routing all deficit spending into rearmament and by keeping labor quiescent with political repression and permanent dictatorship. 
In the United States, the replacement ideology was the New Deal. After some initial failed experimentation with planning, New Dealers settled on a framework of stimulus, regulation, unionization, progressive taxation, and anti-trust, heavily influenced by Louis Brandeis (to be covered in the next article in this series). To get people back to work and prime the economic pump, vast new public works were built, and millions were directly employed by the state. Business — especially finance — was regulated, above all to prevent concentration. Unions were protected under a new legal regime created by the National Labor Relations Act. Taxes on the rich were sharply increased, both to raise revenue and to deliberately prevent the accumulation of vast fortunes. Finally, world trade was managed under the Bretton-Woods system.
These two paragraphs are an excellent summary of what the New Deal was -- and what was dismantled in a joint project of conservatives, libertarians, and neoliberals. This dismantling is why neoliberals are as much to blame for the rise of neofascism around the world. While conservatives, libertarians and the Republican Party, the past half century, constantly stoked bigotry by "feeding meat to their base," neoliberals joined them in destroying the "welfare state" policies that were enacted after World War Two to ensure that never again would fascism be incubated in a cauldron of economic misery and inequality. 

Cooper includes all the most important points of this history, with the exception of the race to the bottom initiated by NAFTA and free trade. Also, Cooper does not fully grasp that the prosperity of the tech boom under Clinton was mostly the result of the phase shift in the national economy resulting from the 1950s through 1980s build-out of the new technology of computers, which -- like all phase shifts in the economy -- began with government support and promotion of new technologies (in this case, computers are developed in military research programs during World War for ballistics calculations, fire control, aircraft simulation, radar, code breaking, and physics calculation for the Manhattan Project, as covered in my chronology HAWB 1940s-1950s Timeline of computer development shows crucial role of government.)

Cooper's article is the first of a four-part series examining the four major factions in the Democratic Party and American left today. This first part considers the neoliberals, which of course is the faction which currently dominates the Democratic Party leadership, though it is in a dwindling minority. It dominates because it has money, but not votes. 

The second part is The Return of the Trust Busters, the faction around Elizabeth Warren, which Cooper brilliantly traces back to Louis Brandeis. 

The third article is Bernie Sanders and the Rise of American Social Democracy.

The fourth and final installment is The Dawn of American Socialism, which focused on the faction led by the Democratic Socialists of America.

There is no consideration of the historically crucial role of the American School of political economy, which helps explain why Cooper does not include the disastrous "race to the bottom" initiated by NAFTA and free trade.

I also highly recommend Cooper's How to Crush Trump from December 27, 2017, especially this paragraph:
Then in 2020, Trump must be crushed at the ballot box. His corrupt administration must be thoroughly investigated, and any criminal acts punished. More importantly, the economic base of Republican plutocracy — Wall Street, monopolist corporations, and idle rich heirs and heiresses — must also be crushed. Monopolies must be broken up, taxes on the rich and corporations dramatically increased, and the size, profitability, and power of Wall Street sharply reduced with cricket bat regulations.
None of Obama's "don't look back, only forward," pursuit of bipartisan unicorns. Criminal activity must be ruthlessly targeted and vigorously prosecuted, ESPECIALLY by our political enemies.

Wednesday, January 17, 2018

Even the Germans are dropping climate goals

The Germans have been world leaders in pursuing ambitious environmental goals by improving hardware. But their efforts are showing signs of fatigue. The commitment to "clean diesel" has shown pretty conclusively that a vehicle with reasonable fuel economy and performance cannot be built. So everyone started to cheat. Turns out it is easier to raise environmental standards than to comply with them. Especially if the new standards cannot be met because of hard scientific laws.

In addition, the Germans paid for much of the heavy lifting necessary to make solar panels on a commercial scale. And then the Chinese ran off with their markets using the same production technology. This tends to be disheartening. So they are not especially enthusiastic about meeting the climate targets they set in Paris 2015. Throw into the mix that the Germans do not have a government these days and it looks like the targets for 2020 are about to be kicked down the road.

DW takes it from here:

Tuesday, January 9, 2018

Student Debt Slavery

My little town is home to two liberal arts colleges that cost over $60,000 / year to attend. Both have stellar reputations for what they do. One is more of a music conservatory with solid departments in math and science. The other is a place where high achievers like National Merit Scholars go to see what its like to be in rooms full of high school valedictorians. But $60,000??

In one of the college's student center, I got into an interesting conversation with a 19-year-old who was reading Kerouac and wondering why his professor had assigned the thing. Now I have a bit of sympathy for the professor who probably, like me, read Kerouac on his own initiative back in the day. I read On the Road and was amazed that Kerouac was able to describe anything at all considering the serious drug and booze haze he was in most of the time. Looking back, this book is mostly a tribute to the casual rootlessness that was possible owing to the general prosperity of the times and $0.26 per gallon gasoline. There was so much prosperity that whole subgroups of people like the hippies could survive on the what fell from prosperity's table. There is probably nothing wrong with having the young read Kerouac if only to discover what their grandparents found cool. But $60,000???

Anther encounter with a product of a quarter-million dollar's worth of enlightenment was amazing in another way. This sparkling-sharp young man had gotten his degree in video production who when faced with the task of how to use the sun to light his scene, got completely befuddled because, I am pretty sure, he had never noticed the different times and positions of the setting sun based on the calendar so could not predict where his subjects should be placed if he wanted to shoot them in golden-hour light. Think of that—this guy did not learn something that humans have known about for at least 6000 years, something that was of practical value if he wanted to be a good cinematographer, and he had just spent a $quarter-million on an "elite" education. $250,000! For that sum of money, he could have traveled the world for a couple of years so he wouldn't have that typical "Merikun parochialism, equipped himself with professional-grade cameras and audio gear, and still have plenty left over to fund his video ventures for a couple of years while starting up. $250,000 is a LOT of money.

I have neighbors who have tenure—which these days is an amazing accomplishment. There's probably at least 50 highly qualified PhD s for every tenured position available. And because being a professor is a pretty cushy job, a lot of them don't retire at 65 and open up the job for someone younger. One neighbor finally got tenure at 50. Hard to find fault with them as people. On the other hand, they are part of a system that consigns children into a lifetime of debt peonage / slavery.

Nasty business.

Monday, January 8, 2018

The Shale Oil promise of abundant new petroleum supplies will not be kept

The following from Bloomberg is possibly the least surprising development imaginable. The idea that shale oil was going to supplant oil from traditional wells was just bonkers. For whatever reasons, discovery of oil in traditional formations has been declining—the believers in peak oil have be predicting this for a long time (since about 1970 in my awareness.) Bloomberg does not cite peak oil as the reason for a collapse in oil discoveries—they are true believers that if oil prices would rise, new oil would be found. But then, they are people who worship at the altar of "free" markets—they MUST believe this or they will be drummed out of the economic clerisy for heresy.

The promise of a sustainable energy future was predicated on the hope that humanity would be wise enough to spend some significant fraction of its declining fossil fuel supplies on building the replacement for them. I fervently hope that we have not already screwed up this possibility too.

Friday, January 5, 2018

Graphene—a tribute to Industrial-Class virtue

A big-picture look at the requirements for meaningful action on climate change will always come back to the subject of energy. The human need for energy is what drives the problem. Plus no matter what problem you are trying to solve, from plastics recycling to increased clean-water supplies, the solution WILL require energy.

Running the world on solar supplies alone is probably possible but it will be ridiculously difficult to pull off. Of course, I spent most of my life believing that solar cells would always be so expensive that it would require social subsidies to get countries to make the conversion. And I was mostly right—both wind and solar technologies have been aided by social / political demand and subsidies until now. But now when it comes to solar cells, they have become the low-cost option for electrical generation.

But because they don't work at night, solar cells need a storage system to make them conventionally reliable. Electrical storage has been a primary interest of mine since the 1950s. I had a flywheel phase and a super-capacitor phase along the way. But mostly I ignored the battery stage because of personal experience with their costs and unreliability combined with a series of lavish claims for improved performance that seemed to fizzle on closer inspection.

This time, the key to storage will probably be graphene—a substance first theorized by P.R.Wallace in 1947 while a new hire at Canada's McGill University. This stuff is amazing but ridiculously hard to produce. Not so surprisingly, it's the Koreans who are figuring out how to make commercial quantities—they have set their sights of being world leaders in battery technology and there are a multitude of arguments suggesting they are already there.

The YouTube below will explain the role of graphene in a possible sustainable future. Spend 6:02 of your life to understand this almost miraculous material.

And here is a little 3 minute clip showing graphene research results from academia. These folks think the a threefold increase in energy density from current lithium-ion battery technology is a conservative number. Who knows, maybe, just maybe, someone will really make a breakthrough is this mostly breakthrough resistant product. Get a 5x improvement and we can start talking about battery-powered flight and serious grid-level storage. Just remember, technological improvement is not automatic even though the computer example has taught a whole generation to believe that next year, the new computers will be cheaper and faster. Battery technology has gone for quite awhile without a breakthrough. So in this sphere, the progress almost everyone seems to believe is automatic has been anything but. Of course, it was never automatic in computers either but rather the outcome of very smart people working very hard.

Wednesday, January 3, 2018

The Political Economy of Seymour Melman

A reader (KF) sent me the following link about Seymour Melman—which is a good thing because I probably would have just blown it off otherwise. Because when I was first exposed to Melman, I wasn't all that impressed. I had a sociology professor that made us buy one of his books which soured me on the man before I had read a word. But those of us who were anti-war activists knew about him because he was one of the very few professors who were public with their anti-war stance. But because he was an academic, he came off as oddly stiff to those of us for whom being against the war was an exercise in fluctuating between being scared to death and being absolutely furious.

So it is with some pleasure I see that Jon Rynn has penned this excellent description of why Melman embodied that sort of thinking we in Minnesota were supposed to learn. And surprisingly enough—did. The Melman he describes and I share a great deal of thinking. And this is NOT because I read his book—I did not. That was the quarter I started my fight with my local draft board, and almost died from a ruptured appendix—spent three weeks in the hospital with an antibiotic drip and 104°F fever. So Melman and I came to similar conclusions on political economy by really different roots (routes).

There is another possibility here. Rynn may be punching up Melman's ideas because he is such an admirer. That's cool by me. I do the same thing to Veblen. Anyway...enjoy. And thanks again to KF

Monday, January 1, 2018

Dr. Strangelove on climate change

Bill McKibben is one of those who are especially furious about the fact that the oil industry knew about CO2 and climate change as far back as the 1970s. Turns out that they knew far longer than that. As told below, Edward Teller, the father of the hydrogen bomb, the guy who figured out how to make nuclear warheads small enough to be loaded into submarines, the model for Stanley Kubrick's Dr. Strangelove, THAT Edward Teller, gave a speech to the American Petroleum Institute outlining the risks posed to the atmosphere by the burning of fossil fuels in November of 1959. McKibben should absolutely love that because the speech was given a little over a year before he was born.

The reason this story is totally believable is that the people associated with nuclear power have been warning us about climate change in apocalyptic terms for a long time. The guy who taught me how to sail was an electrical engineer who spent his career making critical pieces for nuclear power plants. Not long before he died, he told me, "Climate change is the biggest threat facing the human race...ever. If newspapers treated the threat with the importance it deserves, they would have 144 point headlines on the subject above the fold every single day."

So while it would be possible to dismiss the Teller speech as just another sales job by someone representing nuclear power (which is how the API probably treated it) it is remarkably accurate and prescient.

Friday, December 29, 2017

Protect the Petrodollar

The second most important story after the catastrophe of climate change is the quite related story of: What is the end game for the Age of Fire and Fossil Fuels?

This is no small question. The incredible energy density of fossil fuels has made possible a huge population that will be fighting over the table scraps as these fuels become more rare and expensive. Just remember, any fuel that is not renewable is by definition running out. The role of fuels like gasoline in the food supply is beyond important. And while activities like freezing food for preservation can powered by solar or wind with a few changes, the idea of a battery-powered tractor or combine is still mostly a fantasy.

Here in USA, the end of the Age of Petroleum promises to especially difficult. We have been a net energy importer since about 1970 and while we sold off the country's industrial crown jewels and some prime real estate to help pay the bills, such actions were but a drop in the bucket compared to the massive oceans of oil we import every day. In 2012, the trade deficit in oil was over $300 billion and while fracking has recently lowered that amount to less than $15 billion in 2016, fracking is a secondary recovery technique designed to extract the last remnants of a depleted oil field. Of course, selling off the industrial crown jewels means that we make less of our needs every year—we now make less than 2% of our shoes for goodness sakes.

But the pain has mostly been rendered invisible because of the agreements USA managed to get agreed to in the 1970s when Richard Nixon closed the gold window. The most important plus the USA got by being the superpower was the agreement that the medium of exchange for the petroleum trade would be the dollar.

But we should remember a few fundamentals about money so we can understand why the petrodollar is so important.

The form money takes seems important to some, but in fact this is the most irrelevant issue (sorry goldbugs). The important question is: What makes money valuable?
  1. Money is valuable if it can be exchanged for something else you want or need. Monetary cranks insist that paper or electronic money should be able to converted into something more intrinsically valuable like gold. Problem is, gold has very little intrinsic value compared to something like oil so the petrodollar is a FAR more stable store of value than gold could ever hope to be.
  2. Money is valuable if you need it to pay off persons who can make your life miserable. As Peter Cooper, the Greenback Party Presidential candidate, would say, "If you can pay your taxes with it, the money is good." Of course, the same can be said for money used to pay off mortgages, etc. Creditors use police powers to enforce their currency rules.
  3. The third way money is made valuable is when it is a monetization of human genius. When Japan's PM Abe tried to drive down the value of the Yen in 2012, he discovered that the factors usually blamed for driving down the value of a currency by the monetary pundits didn't work for the Yen. Turns out that if you can trade Yen for a Lexus (or thousand of other perfectly good examples), by gum it is worth something.
Bitcoins meet none of these criteria. Therefore its value is quite ephemeral. On the other hand, the petrodollar IS backed by force. The big problem is that it isn't easily-bullied pipsqueaks like Iraq or Libya challenging petrodollar supremacy. This time it's Russia and China. And while the Petrodollar is so powerful that it can withstand a bunch of shocks, it also has a bunch of enemies. Bringing down the petrodollar would make much of the world's population very happy. So while it is still powerful and backed by murderous people with insanely destructive weapons, the petrodollar is no longer invulnerable. We should all keep an eye on this story. There isn't a LOT of good writing on this subject but I found three articles worth reading.