Saturday, December 31, 2011

Most interesting events of 2011

Michael Moore in Madison

The political legacy of the great Wisconsin Progressive Robert LaFollette meets the Flint sit-down strike in the person of an Oscar-winning documentarian on the steps of the state capital.   On a winter afternoon—March 5.  And there are those who say the Midwest has no culture.

Thursday, December 29, 2011

The real lesson of Martin Luther

When you spend the first 18 years of your life spending nearly every waking minute involved in some facet of religious practice, you spend the rest of your life recovering.  Religion was the family business.  Preachers regularly got fired from their congregations because their children misbehaved—a fact that was brought up often in our house.  So even though I was pretty much the perfect little choir boy, I had 200 "mothers" in church who would instantly remind me of my failings.  The reasons most people have tales of the preachers kids being the wildest ones around include exaggerations based on higher standards, and because often kids in that situation will rebel spectacularly.

So while I pretty much behaved myself, I HATED the experience.  I tolerated the "God and the church ladies are always watching" pressure.  I endured the utter tedium of sitting though the 26th Bible study lesson on Psalm 1.  But what really infuriated me was the idea that if you didn't believe the unbelievable, you were really on your way to eternal damnation.  Listening to your parents pray for your soul because you have concluded that Noah's Ark didn't happen is highly troubling.  Unfortunately, there was no way to finesse this issue because even if you agreed that Jonah's whale was a fiction that ignorant people told each other to make a larger point, there was still the problem that the two most important beliefs of Christianity were God made man and the resurrection of the dead—Christmas and Easter—and neither were especially believable as told.

So while I grew up in something of a golden age of science in teaching and public policy that happened when the Sputnik scare had provided world-class science texts to even the smallest and poorest school districts in the nation, I found my love for scientific rationality in direct conflict with the family business.  In fairness to my father, even though he preached the miracles of Christ from the pulpit, he also bought me an expensive set of encyclopedias when I started to ask how airplanes fly, took us children outside on some seriously cold nights to observe astronomical events—especially those having to do with the artifacts of the space race, and took his sons to the library once a week to reload the household supply of the popular science publications.  So maybe his religious persona was largely influenced by his need to please the Jesus-wants-you-to-be-an-idiot crowd that seemed to attend his churches.  That is not to say he wasn't a true believer—it's just that he also understood that scientific investigation is an honest pursuit of the truth and if his son was a science geek, he might as well encourage the behavior.

So the unfortunate reality of my childhood is that I had to deal with a lot of absolutely artificial issues like "can I love my parents if I want to believe that no one ever converted water into wine by magic?"  Worse, these artificial dilemmas ate up an astonishing amount of time and energy.  So when I could get away from this absurd religious repression I was absolutely determined that I would never again be in a situation where someone could emotionally blackmail me into pretending to believe something unbelievable.

Beyond that, I had to deal with the bitterness over all the intellectual investment (memorizing Bible verses) and the sheer amount of time I had been required to spend learning about something I thought was hokum.  So since then, I have sought to mine something of worth from that investment.  And what I have discovered is that stripped of the mumbo-jumbo, religion is actually an incredibly important subject that affects everything from artistic expression to economic development.  I actually had a head start in my religion-is-just-another-manifestation-of-culture analysis courtesy of something my father did to celebrate Reformation Sunday on several occasions.  He would rent this movie that told the story of Martin Luther's role in the great division of western Christian practice.  He would set up the 16mm projector in the church sanctuary and we would watch brave / devout Martin fight the corruption, sin, and evil of the Roman church.  I remember being terrified the first time I saw the portrayal of the gang on horseback who took Luther off to the Castle of Frederick the Wise in Wartburg.  But then the lights would come up and my father would give a little sermon highlighting the movie's portrayal of Roman corruption or Luther's struggle to define God's love.

But one of the more fascinating scenes for me were those where the 95 thesis were printed.  I believe the film-makers had used historically authentic printing presses which showed their dedication to demonstrating the link between Luther and his printer-admirers.  As my father explained to me, without those printers, Luther would have been just another man of conscience burned at the stake for heresy—like Jan Hus.

Luther's close relationship to the emerging German printing industry was not especially surprising since Luther was a prolific author who churned out best-sellers including a German translation of the Bible that is still used to this day.  Even better for the printers, Luther made literacy a demonstration of devotion and having a family Bible a sign of a good Christian home.  This was an excellent basis for a relationship, actually—the printers saved Luther's life and he helped them prosper.

I soon discovered that a deep understanding for why and how religious people were motivated explained a very great deal indeed about the economic development of Northern Europe.  For example.  Lutherans made music their preferred artistic expression.  As a result, Lutheran churches of even modest means bought pipe organs.  Pipe organs cannot work unless built to incredibly fine tolerances.  Therefore, the requirement of music in Lutheran churches led to a large market for precision manufacture.  So today we find that wherever there have been Lutherans, there is also widespread precision industry.

Beyond the practical examples, there is this little matter that the study of economics itself is rooted in the discipline of moral philosophy.  At some point, it dawned on me that compared to how the vast majority of youth is wasted, my dreary religious upbringing had at least provided me with some valuable insights.  I just wish that I hadn't had to extract them from these enormous piles of purest ignorance.  Oh well, we don't choose our childhoods—we just try to make the best of them.

Anyway, I offer this long explanation for why I am about to do something I have not done before on this blog and may never do again—post an extract of something written in The Economist.  I tend to look on that rag with contempt because it is a smug, arrogant Brit-twit version of neoliberal thinking published in London—the global epicenter of financial corruption.  But I make this exception because they are writing about my longest-term intellectual passion—the relationship between Luther, the printers, and the Reformation.

One of my favorite intellectual pastimes goes like this—if printing led to the Protestant Reformation, and it did, what will be the social outcomes of other revolutions in communications?  I remember how excited I became the first night I got Final Cut Pro 1.0.1 to run on an Apple G3 and capture footage from a Sony VX2000 over Firewire.  The idea that television was no longer exclusively in the hands of the insanely rich and their warped worldviews had me literally dancing with joy.  Of course, I thought the resulting social change would happen overnight.  I forgot that it took 78 years from Gutenberg's press until the 95 Thesis got printed.  Well, about that much time has passed since they really got television to work and for most of that time, it has done little more than industrialize envy and virtually eliminate literate discourse from the marketplace of ideas.  But now that millions of people can capture and edit high-quality video on their cellphones, a Reformation-sized change seems almost inevitable.  And all of this goes triple for the Internet so in combination with people-powered video, humanity is getting a vastly more interesting view of themselves and their institutions.

Monday, December 26, 2011

About that mini-mill in South Carolina

Last Tuesday, I embedded a video clip that shows a mini-mill in Georgetown South Carolina cranking out giant spools of wire as an example of Producer achievement. Well it is certainly that but like everything that touches the steel industry, there is a lot of interesting complexity to this story.

Steel is insanely difficult to make.  It is derived from iron which itself is difficult to make because it requires such high temperatures to extract from ore.  Steel is produced when tiny amounts of impurities are introduced into pure (wrought) iron. Add .5% to 1.5% carbon to iron and the result is steel.  Pure iron is soft while iron containing too much carbon is brittle.  Getting that recipe right happened so rarely that for much of history, the little steel that was produced wound up in the manufacture of swords.

By the 19th century, folks were beginning to figure out how to make quality steel in large batches.  The mass-production of steel changed everything.  This once extremely precious metal that was used to arm the nobility now could be used to make rails and ships and building structures.  Tough-guy politicians like Stalin took to calling themselves "men of steel."  Leaders who preached egalitarianism like Mao Zedong promised a steel mill for every village (a suggestion so technologically insane it helped discredit Marxism forever).  USA tycoons who grabbed control of the steel-making machinery like Andrew Carnegie became some of the richest men in history.  Countries that mass-produced steel tended to win wars—at least until they met each other in battle.

By the 1960s, so many men of steel in so many countries had gotten into steel production, the profit margins of the older plants began to collapse—especially when competing with steel from countries where development strategies made profits unnecessary.  In places like USA, new plants with lower cost structures became necessary and the mini-mill, which only needed recycled steel for its raw material, became a preferred strategy.

While making steel from ore is extremely difficult and energy-intensive, recycling waste steel is a LOT easier.  Basically, all you do is melt the scrap, rake off the impurities, and reform the molten steel into something new.  While this process rarely produces the high-quality steel needed for automobiles or surgical instruments, there are thousands of applications where this recycled steel works just fine.  This is especially true in the construction industry where millions of tons of steel are used every year to reinforce poured concrete.  And given the fact that abandoned automobiles have become a blight on the landscape, the raw material for mini-mills seems almost limitless.

In 1969, a German steelmaker and engineer named Willy Korf (pg 157) opened one of those low-cost mini-mills in Georgetown South Carolina.  It used electric arc furnaces built by Danieli of Italy and rolling machinery from Sund Birsta of Sweden.  While the plant worked just fine, the financial storms battering the steel industry in USA raged on.  Korf overextended himself so the Georgetown facility always had debt problems.  In 1984, the government of Kuwait purchased an ownership position and in 1995, it was purchased by none other than Bain Capital—the vulture firm associated with Mitt Romney.  It is now owned by ArcelorMittal, the giant steelmaker headquartered in Luxembourg.  They shut the place down in 2009 but have reopened it as of Jan 2011.  (This is a demonstration of another of a mini-mill's advantages—blast furnaces that make steel from ore can never be shut down and restarted.)

There's a lot of history embedded in that mini-mill and it's only 42 years old.  The Producer story is especially interesting—Danieli has been in the steel business since 1927 while the Swedes have been making steel since Gustavus Vasa and seriously since the 19th century.  Korf was a genius.  On the other hand, the Predators have been making things extremely difficult for anyone who makes things since the late 1970s so the fact that Georgetown is even open is something of a miracle.

Friday, December 23, 2011

Merry Christmas

Posting will be very light until the New Year.  In the meantime, here's a little gem for Christmas.  It is the opening of the Bach Christmas Oratorio done by the Thomanerchor in Leipzig.  The Thomaskirche was JS Bach's employer from 1723-1750—most of his major works were written while there.

Thursday, December 22, 2011

The Economic Impact of USA's Failure to Invest in Infrastructure

Last week, Financial Armageddon posted an article that included hard numbers on the decline in spending on infrastructure as a percentage of GDP.
Total public spending on transport and water infrastructure has fallen steadily since the 1960s and now stands at 2.4% of GDP. Europe, by contrast, invests 5% of GDP in its infrastructure, while China is racing into the future at 9%. America’s spending as a share of GDP has not come close to European levels for over 50 years. Over that time funds for both capital investments and operations and maintenance have steadily dropped.
Even more interesting, a brief summary of a new report by the American Society of Civil Engineers, "Failure to Act: The Economic Impact of Current Investment Trends in Water & Wastewater Treatment Infrastructure" This is the first time I can remember that someone has ventured a projection of the negative impacts of our failure to invest adequately in our infrastructure.
By 2020, the predicted deficit for sustaining water delivery and wastewater treatment infrastructure will be $84 billion. This may lead to $206 billion in increased costs for businesses and households between now and 2020. In a worst case scenario, the U.S. will lose nearly 700,000 jobs by 2020. Unless the infrastructure deficit is addressed by 2040, 1.4 million jobs will be at risk in addition to what is otherwise anticipated for that year.

The impacts of these infrastructure-related job losses will be spread throughout the economy in low-wage, middle-wage and high-wage jobs. In 2020, almost 500,000 jobs will be threatened in sectors that have been traditional employers of people without extensive formal educations or entry-level workers.23 Conversely, in generally accepted high-end sectors of the economy, 184,000 jobs will be at risk.24 Unless the infrastructure gap is addressed, by 2040 its impacts will put at risk almost 1.2 million jobs within basic sectors, while a relatively stable net amount of 192,000 jobs in knowledge-based industries may be jeopardized. In this latter grouping, approximately 415,000 jobs will be threatened; however, medical services are expected to grow between 2020 and 2040 due to increasing outlays to fight water-borne illnesses.

The impacts on jobs are a result of costs to businesses and households managing unreliable water delivery and wastewater treatment services. Between now and 2020, the cumulative loss in business sales will be $734 billion and the cumulative loss to the nation’s economy will be $416 billion in GDP (Table 3). Impacts are expected to continue to worsen. In the year 2040 alone, the impact will be $481 billion in lost business sales and $252 billion in lost GDP.26 Moreover, the situation is expected to worsen as the gap between needs and investment continues to grow over time. Average annual losses in GDP are estimated to be $42 billion from 2011 to 2020 and $185 million from 2021 to 2040.

Read more.

More music fun

Yeah, I know.  Most of you probably could not care less about my brush with music.  But these days, only the interaction with the wondrous gift that is music-making keeps me reasonably centered while I observe and write about the various disasters facing my civilization.  Unfortunately for me, subjects like the deindustrialization of USA involves victims I know, am related to, or live lives very much like mine.  So not surprisingly, I take this subject personally—perhaps even more than I should.

Adding to this problem is my hard-won awareness of the ever growing gap that exists between what is possible and what is being accomplished.  I have moments when I imagine a world with a financial system that instead of being devoted to fraud and ripping people off, was instead meeting with the Productive members of society saying, "You folks find the solutions to the problems threatening our very survival and we will provide you with the money you need to get the job done.  Don't worry about what something costs, just worry about finding an effective outcome."

You know, if we did THAT, I would stop being such a grump and shut up.

Anyway back to the tunes.  2012 marks the 100th anniversary of the founding of the St. Olaf Choir by a young Norwegian immigrant named F. Melius Christiansen.  The Norwegians have been extremely poor for most of their history and so he brought with him the tradition of a cappella singing—mostly because it was the least expensive music-making possible.  And because he was a Lutheran, he had a long tradition to draw on.  It also made him deadly serious about the quality of music he intended to make.  He was the sort of person who believed that music was only really fun if you did it well.

Wednesday, December 21, 2011

Nine (well, eight) Reasons that Progressive Policies Deliver Prosperity and Freedom

Steve Roth is a rare oddity - a conservative who actually looks at the evidence and changes his thinking accordingly. These days, that is an accomplishment worthy of note. DailyKos's Hunter had an excellent article on Sunday about the overwhelming evidence that austerity economics has failed and is failing, but the wrong-wing ideologues and political hacks who believe in it remain steadfast in their obdurate stupidity:

This speaks to the very core of conservative distrust of science. A fundamental of science is that once something has been conclusively disproved, you ought to stop believing in it, and certainly ought to think twice about using it as the foundation for building your own supposedly "scientific" notions. You can believe that if you feed a horse a penny, it will poop out a dime, but once the experiment has been tried and has failed you probably should cancel your plans for a horse-based retirement fund. 
This is roughly what has happened in Europe, as every nation that has attempted contractionary polices has found itself faced with, glory be, contraction. Austerity has resulted in austerity and has not magically morphed into expansion via the power of Told You So. We should probably stop expecting the horse to crap out dimes, at this point. We should also probably reflect on what this means for our own "austerity" policies here in this country, but that would require several hundred politicians, thousands of lobbyists, and a hundred thousand ideologues to cop to being proved wrong on something, which will never, ever happen. The mere suggestion is always met with fury. The point is not what reality proves or disproves, the point is the ideology, and if the reality conflicts with the ideology then it is reality that can go to hell.
That is a populist diatribe against orthodox economic thinking, so for you folks who are more into the nerdy, brainy sort of hard-core economics theorizing, Naked Capitalism has been serializing a paper by economist Philip Mirowski that is both ruthless and funny (for example, after describing how leading economists had enjoyed a decade of self-congratulatory boasting of how they had finally defeated the boom and bust business cycle during the, as they called it, "Great Moderation" of the 1990s and 20-aughts, Mirowski starts his next paragraph, discussing how the financial crash embarrassed these orthodox economists, with the title "The Great Mortification."

The return of the light

December 21 was always interesting around our house when I was growing up.  It was my parents' wedding anniversary and the family joke was that they had selected that date because it was the longest night of the year.  (That was a pretty racy joke for a parsonage.)  The promise of the light's return always meant a lot to those of us who grew up where winter is a serious matter.  Living in Minnesota, we knew that there was still a LOT of snow and cold ahead of us but at least the days were getting longer.

These days, there isn't a lot of light shining in any meaningful sense.  Our economics have been hijacked by the criminally insane, our politics are in the hands of folks who have zero respect for the concept of representative democracy, and our schools are run by people who do not care that children need useful information to survive.  LOTS of darkness out there.  And while we know the sun's light will start its return today in the Northern Hemisphere, there isn't much realistic hope that the light will return to the human spirit anytime soon.

In the meantime, we can still enjoy the cultural artifacts that have grown up around the light's return.  For me, one of the best is the singing of Handel's Messiah.  By the time I had become a freshman at the University of Minnesota in 1967, both of my parents and my two older sisters had sung it so I was delighted that the U chorus was going to perform it that fall with the Minnesota Orchestra.  I had been admitted into the chorus with the understanding that I would only be allowed to stay if I could pass the mid-quarter exam—which was being able to sing the bass line from For Unto Us a Child is Born.  This was no small hurdle because this is about as difficult as bass parts get.

Here we see Robert Shaw lead the Atlanta Symphony in a performance of that bass-killer.  Since I first heard his Messiah, there have been many performances deemed superior to his, but in those days, he was widely admired and we freshmen had his recording we used to help us learn that insanely difficult part.

Here's to the return of the light!

Tuesday, December 20, 2011

Producers vs Predators

Writing about the banking crises, or the Republican primary, or any other manifestations of Predators at work is a depressing experience.  There are many reasons why this is true but one stands out—outside of animal cunning, these are profoundly stupid people doing and saying dangerously stupid things.

There is no future with such folks.  They have no solutions to the problems of climate change because they cannot even understand the eight-grade science that explains why it is happening.  They have no solutions for the economy because the only thing they can imagine is some new version of usury, feudalism, human slavery, and the other manifestations the barbaric traits.  If you try to talk politics with them, they will argue that any necessary innovations to ensure the survival of the human race cannot even be contemplated because the founding fathers could not imagine such problems in the 18th century.

So enjoy this amazing video.  It is of a steel mill.  It runs on electricity so in theory, it could be powered by windmills or PV cells.  Its main raw material is scrap so it is an important cog in any necessary recycling infrastructure.  All of this is in addition to the awe-inspiring human genius that is the mass production of steel.

And no, Michele Bachmann nor Newt Gingrich nor any of their brain-dead comrades running for president did not—nor could not—figure this out.  In fact, they cannot even comprehend such infrastructure when they are looking right at it.  And ultimately that is the point—it will not be possible to solve the large problems facing humanity until the Predators shut up and get out of the way.

Monday, December 19, 2011

Two choices

The world's economies will not survive much longer in their present form.  No one actually knows what will give way first—the collapse of the Euro, the collapse of the absurd Chinese economic contradictions, another crash of the Anglo-American banks, whatever.  The point is that the way the financial business is currently being run, there is no chance for anyone (with the POSSIBLE exception of the .01%) prospering in any meaningful sense.

So either the financial system must reform itself or it must be reformed from the outside.  Personally, I seriously doubt the banksters are going to have some come-to-Jesus moment and decide they would rather be the vanguard of change to finance the peoples of the planet to build the sort of societies that can power themselves on the solar capital they can collect.  The banksters I see in public are absurd, narrow-minded greedheads who think that progress is charging 33% interest on credit cards or selling children into debt slavery in the name of "education." Nevertheless, it would be MUCH preferable if the banksters could reform the system themselves—they know how things can work and besides, reforms from the outside in the form of revolutions are so messy, they take a lot of time, and rarely accomplish much of importance.

Just to prove that the Chinese learned nothing from the housing bubble in USA, here is a picture of China's biggest ghost city: Zhengzhou New District.  Roads without cars or bicycles—houses without people.  Proof that no matter where in the world, if lenders lend, builders build.  China has hundreds of such developments.  By some estimates there may be up to 64 million vacant homes.  The mind reels at the notion that a country that put itself through decades of revolutionary upheaval would wind up copying probably the worst ideas of bankster "capitalism."  So now in a country with millions of people badly housed, there are millions of brand-new empty houses.

It wasn't like Keynes was a 19th free-silver USA farmer with his back to the wall. He was a very establishment (wealthy) Brit investment banker. And yet he saw with utter clarity the problems caused by retarded economics and now another generation will have to learn his insights after 35 years of neoliberal madness.  Of course, he predicted that too in perhaps his most famous quote.

" The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than it is commonly understood.  Indeed the world is ruled by little else. Practical men, who believe themselves quite exempt from any intellectual influences, are usually slaves of some defunct economist."

Sunday, December 18, 2011

Amazing Tchaikovsky

A new way to dance with the sugar plum fairies.

Saturday, December 17, 2011

OccupyWallStreet sharpens the message by de-foreclosing

Hat tip to Naked Capitalism for including the following Village Voice article in its round-up of links. This past Tuesday, Occupy Wall Street marched into Brooklyn and "de-foreclosed" a house that has been vacant and unkempt for the past three years, after the residing family was evicted by Countrywide Financial. The house was carefully chosen by researchers going through city records. Occupy is calling on homeless families to come take up residence in the houses Occupy de-forecloses. I'm going to start the quote in the middle of the article, instead of the beginning.
This new strategy presents a much tighter fit between tactics and message than was seen in OWS 1.0. When Occupy Wall Street was in Zuccotti Park, the media seized on the drum circles and sleeping-bag lifestyle to paint a picture of aimlessness and chaos—Woodstock tipping over into Altamont. But the occupied homes present a much clearer narrative: previously homeless families and young children, put into homes that the bankers' broken system had left vacant and rotting for years.

"The foreclosure crisis is where the rubber hits the road with the financial sector and the real economy, the 1 percent and the 99 percent," says Mike Konczal, a finance-reform expert at the Roosevelt Institute who attended the East New York occupation. "If you really want to challenge the banks' power and the way they're stripping wealth out of communities, leaving wreckage behind, foreclosures are a key point to go to."

Read the entire article (it's short).

Saturday toons 17 DECEMBER 11

Watching the mainstream pretending to comprehend why folks are protesting is still funny.

Friday, December 16, 2011

Bernanke’s 29 Trillion Dollar Fog of Deceit

Bill Totten's weblog carries the most recent article from University of Missouri at Kansas City (UMKC) economist L. Randall Wray, one of the handful of economists worth taking the time to listen to. Two graduate students at UMKC have completed an analysis of the documents pried out of the Federal Reserve's grasp by the Bloomburg Freedom of Information Act request, and found that the actual total amount of emergency lending and other assistance the Fed is actually four times larger than the already staggering figure of $7.77 trillion Bloomburg wrote about two weeks ago.

$29 trillion, if you're wondering. Twenty nine trillion, with a "tee" not a "bee" dollars. That's the entire USA gross domestic product for nearly two entire years.

Wray explains the chain of discovery that began with Sen. Bernie Sander's legislation that forced an audit on the Fed. Of course the Fed tried to provide as little information as possible in that audit. But there was enough information to give Bloomburg financial reporter Mark Pittman the specifics needed to file an FOIA request. (Pittman died soon after of "heart problems" at the age of 52). The Fed tried to make the information in its FOIA release as complicated and as incomprehensible as possible, but, as Wray writes, "Bloomberg helped enormously by putting the data into a usable format." That, in turn, allowed the two UMKC PhD students, Nicola Matthews and James Felkerson, to unzip the Fed's bag of secrets and look inside. Voila! $29 trillion!

Europe's debt crises staggers on

Debts that cannot be repaid, will not be repaid.  But that doesn't keep the grabbing classes from trying to collect from someone, anyone.  And trampling democratic governments is just the tip of what the banksters will try to collect on debts that were mostly incurred playing videogames with money.

Thursday, December 15, 2011

Peak oil and food

One of the stories that has happened during my lifetime is the widespread substitution of oil and other energy inputs for human and animal muscle in the production of food.  The food you buy in a supermarket contains a LOT of embedded energy these days.

Wednesday, December 14, 2011

Understanding the failure of imagination at Durban

Anyone interested in why the Germans lead the world in every meaningful Green category should read this absolutely brilliant essay by Christian Schwägerl in Monday's Spiegel Online about the lessons that could be learned from the fiasco that was Durban.  I encourage everyone to read the whole essay but for me, this is the money quote:

Tuesday, December 13, 2011

Dec. 13—St. Lucia day

Perhaps one of the more confused celebrations of the people of the north—Swedes celebrating a Sicilian Catholic saint from the pre-Reformation days.  However, the celebration is about light and food so it fits right into the Christmas / Advent traditions.  It is also a wonderful excuse to teach children how to sing.

Monday, December 12, 2011

The delusions of Durban

After 16 days of mostly fruitless negotiations over whether kings or governments can order about the tides, the folks assembled at Durban celebrated their great "success" at hammering out an agreement to set "legal" limits on carbon emissions. It is easy to feel like Antonius Block (Ingmar Bergman's knight in the Seventh Seal) watching the frightened townspeople whipping themselves to ward off the Black Death because what happened in Durban and any reduction in carbon emissions will be as closely linked. I mean, look at those two congratulating each other early Sunday morning.  They actually believe what they did will have something to do with saving the planet.  But who can blame them—this is what the Leisure Classes are taught to believe.

What the vast majority of those who traveled to Durban can't seem to understand is that climate change is overwhelmingly a problem of science and engineering—NOT politics and negotiations.  No matter what gets decided at a UN gathering, people will not give up on fire to warm themselves and cook their food until they have a replacement they know works—all the time.  This isn't about good intentions—this is about hardware.  And the new hardware will not appear until the funds are made available to build and buy that new hardware.  Engineering and economics—the two subjects that will make or break any progress towards solving the problems of climate change were barely on the agenda at Durban.

But that realization was lost on those folks who don't quite understand the huge difference that exists between solving problems and yakking about them.

Sunday, December 11, 2011

Yes, the Walmart Fortune Endangers Democracy

You’ve probably seen by now the report from the Center on Wage and Employment Dynamics, picked up by the Huffington Post, that the The Walmart Heirs Have The Same Net Worth As The Bottom 30 Percent Of Americans

LinkIt is good that such odious examples of wealth inequality reach a wide audience, but I really would like to see more of national discussion of just how dangerous such inequalities are to our republican form of self-governing democracy. People who gravitate to progressive blogs like this of course have an innate sense of how massive accumulations of wealth have been working to undermine and corrupt our political system: the widespread outrage over the Citizens United decision and the incessant (and well deserved) exposes of how the Koch brothers are funding wrong-wing political organizing including the Tea Party, are evidences of that.

But I want it made even more explicit and more clear that the conservative and wrong-wing defenses of these wealth and income inequalities are completely at odds with the thinking on political economy that created our country. This past year, I've concentrated much of my reading on the formative thinking that resulted in the American Revolution and the creation of the Constitution and federal government. What I have learned strengthened my belief that the conservative belief in "neo-liberal" a.k.a “free market” a.k.a shock doctrine economics is not just alien and un-American, but downright seditious.

In April 2006, Public Citizen and United for a Fair Economy released a report on how just 18 of the richest families in America, including the Kochs, the Waltons (WalMart), Dorrances (Campbell’s soup), and Mars (Mars candy), spent $490 million to secure passage of George W, Bush’s 2001 tax bill which reduced the estate tax and included the one-year repeal of the estate tax in 2010). Bush’s tax giveaway would save just these 18 families an $71.6 billion.

Conservatives, libertarians and Republicans today argue against higher taxes, and even for elimination of the estate tax, which anti-tax ideologue Grover Norquist cleverly rebranded as a “death tax.” But the thinking and arguments of such as Norquist are completely alien to the ideas that created America. In October 1787, Noah Webster – who two decades later would publish his famous dictionary – issued a pamphlet entitled, Examination of the Leading Principles of the Federal Constitution, which was probably the second most influential tract, after the Federalist Papers, arguing in favor of ratifying the Constitution.

Sunday morning

When I was growing up, Sunday was easily the most traumatic day of the week in our house.  For many years, my brother and I had paper routes so there were big heavy papers to distribute in the cold and dark.  Then there was the scramble to get six people into their Sunday clothes in a house with only one bathroom.  Somewhere in the mix would be the hassle to ensure that some music would be performed.  For the preacher's family, Sunday was anything BUT a day of rest.

I hated the chaos of getting to church.  I hated sitting still for two and a half hours.  I hated being the kid who was supposed to be the most well-behaved in the class.  When I left home at 18, I swore I would never darken the door of a church again.  But over the years, I have mellowed a BIT because it turns out that stripped of the pettiness and the beliefs in the unbelievable, religion has some interesting cultural manifestations.  And when it comes to cultural change, religious practice has played many important roles in the history of human development.

So on this second Sunday in Advent, I post some thoughts from a preacher who has participated in some of those important social movements.  Turns out religion may not be THE answer, but it can be ONE of the important answers—especially for those who have a proclivity for religious guidance.

Saturday, December 10, 2011

Wind energy news from the past month

Sorry I have not been able to post wind energy news updates regularly. But it certainly is exciting to witness the emergence of a new "real economy" industry!

Global investments in new renewable-energy facilities surpassed those for fossil fuels for the first time last year, according to analysis from Bloomberg New Energy Finance. Wind, solar and biomass power attracted $187 billion in investments in 2010, compared with $157 billion for natural gas, oil and coal, according to the report. "The progress of renewables has been nothing short of remarkable," said Achim Steiner, executive director of the U.N. Environment Program. Bloomberg (11/25)

Saturday toons 10 DECEMBER 11

Why Yes, I have worn a goatee since 1989.  Thank you for asking.

Friday, December 9, 2011

The skunk at the garden party

Under the heading "well doesn't THIS make you prouderthanshit" we are seeing, once again, that USA during the Obama administration has ZERO intentions of getting serious about climate change—a tradition that goes back (at least) to the sabotage of Kyoto during the reign of Bill Clinton and St. Albert of Gore.

Of course, back in the 1990s, we solar optimists thought that climate change would focus everyone's mind on getting that technology to work reliably.  Since then, we have discovered because of the bankruptcy of Solyndra that the USA is not only NOT going to lead the way in solar conversion—we will be damn lucky to be a bit player.

Of course, this missed opportunity will come as welcome news to the knuckledraggers who are trying to become the choice to head the GOP ticket in 2012.  It has been said (often) that if we didn't have fools and ignoramuses in politics, we wouldn't have a representative democracy.  But passing on this ideal opportunity to redesign, rebuild, and re-invent ourselves only makes sense to members of the Leisure Classes and their love of preserved archaic traits.  Unfortunately, these people control both parties so making fun of The Newt or Ms. Bachmann only makes sense if you have a LOT of Dem friends.

Thursday, December 8, 2011

Turning a huge ship around

Perhaps the least controversial thing one can say about the global economy is that the banksters run damn near everything and have for several decades.  One of the more interesting things that Chris Hedges said in his speech to the Occupy Harvard folks is that the reason people have moved from traditional politics to direct action is that there is no way to actually VOTE against the agenda of Goldman Sachs.

How one actually opposes a bankster agenda is another problem altogether.  If one believes such things, the Bible reports that the Prince of Peace resorted to violence to drive the moneychangers out of the temple.  Apparently, the Son of God (who had the powers to raise the dead) found the moneychangers so odious, he resorted to knocking over their tables of business (Matthew 21:12-13).  The lesson here is that anyone who can figure out a non-violent way to take on the banksters will have to be more virtuous than Christ.  Good luck with that!

But little by little, people are figuring out ways to fight back against the crazy levels of power wielded by the folks who control the money supply.  Some of these examples are so trivial I might (accurately) be accused of grasping at straws but together, I believe they demonstrate a movement in a new direction.  We shall see.

Even at the heart of Euro "prosperity" in Germany, there is talk about nationalizing a major bank.

Wednesday, December 7, 2011

Institutional analysis—China and climate negotiations

While one of the goals of Institutional Analysis (IA) is to better predict the future, perhaps the best way to get good at it is to use it to explain the present.  Watching China, one of the perennial bad actors when it comes to climate issues, become the rock star at Durban is an occasion that almost demands a good IA.

Whether one believes that China's route to economic growth is a good idea (or is even "legal") the strategy of becoming the world's workshop is certain to cause a spike in energy use.  Because she has a lot of coal and coal-fired electrical generation is a known technology, China is building a lot of new plants.  For the folks who worry about such things, China's strategy is a route to certain climate catastrophe.

China's response has been basic.  She says "Look, we have suffered for a long time while the industrial West has burned up much of the supply of premium fuels.  If you really want to reduce carbon in the atmosphere, start with the countries that caused MOST of the problem."  But that angry third-world developing nation did not show up at Durban.  So the interesting question is why.  IA would answer:

Tuesday, December 6, 2011

Climate change and China

With over a billion citizens, anything China does will have enormous implications.  The fact that she is waking up to the wonders of massive energy consumption after centuries of economic under-development ensures that whatever is done about carbon emissions, her role will be huge.

Monday, December 5, 2011

There's battle lines being drawn

Whenever someone dips their toes into the troubled waters of money and the moneychangers, it becomes readily apparent that these issues have been around for most of recorded history.

Sunday, December 4, 2011

Elevator Speech econ #2—the economic importance of aesthetics

Aesthetics may be the most important economic consideration of them all

Economics covers a wide assortment of human activity. Because this is true whatever the economic theory, the most relevant discussion is usually, "What was left out?"

Sometimes economic considerations are left out because of human error. In the world of technical documentation, the producers of such documents worry constantly about the steps that get left out—and that usually happens because the folks who know what they're doing just assume that others will fill in the blanks the same way they can. Yet even when professionals obsess about this problem, the biggest single complaint in instruction manuals is missed steps.

Missing economic considerations are also a function of cost and time constraints. Obviously, EVERYTHING cannot be taken into account (although as computers have gotten cheaper and more powerful, this problem diminishes on its own.). In the best case scenario, what gets studied is what is most important. More likely, what gets studied in economics is what is important to the client. If costs can be offloaded to other people or the environment, they tend to be written out of economic considerations.

Of course, the biggest constraint on broader economic inquiry in the past generation was that we limited ourselves to questions that could be studied using complex and sophisticated math. We study what we can count. Of course, this is hopelessly shallow but it was made "legitimate" by the statistician's battle cry—made famous by Robert Strange McNamara, "If you can't count it, it doesn't exist."

Unfortunately, what cannot be counted in a traditional sense is virtually infinite. But my favorite subject is aesthetics. It is easy to demonstrate the economic importance of aesthetics—beautiful prostitutes charge more than ugly ones, seaside property fetches more than land next to the dump, etc. etc. We also know that certain people can create objects of such beauty, people will pay to have them make their own lives more aesthetically uplifting. This can even happen on a mass industrial scale—it can be argued that Apple Computer has been able to charge premium prices over the years because they spent big bucks to make their products beautiful.

Reasonable people could argue that there is NO economic topic more important than aesthetics. And yet, I have yet to encounter any practicing economist who gives more than a passing nod to the subject. In their minds, aesthetics gets embedded into price information and that's all they need to know. And maybe they are right—but I seriously doubt it.

Folks may argue about the nature of beauty but when it comes down to casting a vote, there is astonishing agreement about what is beautiful. One of the things I discovered while I was in the "inner city neighborhoods must be saved" phase of my life was that committees do not get organized to save eyesores. Because a sustainable society will be one that is well-maintained, the most certain way to build a sustainable society is to build a beautiful one.

Saturday, December 3, 2011

Friday, December 2, 2011

Chris Hedges at Occupy Harvard – feeding plutocracy and why the cops are scared

Chris Hedges spoke to Occupy Harvard three nights ago. There are three vids up of the discussion, and you should carefully and closely watch each one. Hedges lays out clearly the power of Occupy, the process of revolution, and the steps we need to take to get there.

Hedges begins by declaring, “Harvard exists to feed the plutocracy… It is an institution that epitomizes the dead ideas of the one percent.” He discusses the unique responsibility of Harvard students to call to account the world leaders who regularly come to Harvard to speak. Apparently, you cannot even get into Harvard Yard unless you have a Harvard ID card. So outsiders do not have the access to get at the one percent leaders and call their bullshit to their faces.

Hedges then references Crane Brinton’s 1938 book, The Anatomy of Revolution, quickly describing how a revolution is created. First, is the creation of a rapacious oligarchy, followed by the destruction of the middle class. The elites become insensitive to the plight of working men and women, and especially the poor. The oligarchy becomes so entrenched that people who thought they had trained to become part of the system, can find no entry into it. Hedges uses the word “déclassé” to describe these people. And the revolutionary moment always begins with the demand that the elites be removed – which, of course, the elites refuse to even discuss.

Hedges explains that the elites' request for Occupy to issue formal demands is an insidious attempt to drag Occupy back into the dead system and contain it. “The power of the Occupy movement is that it won’t go there. It realizes a fundamental truth about American politics… there is no way to vote against the interests of Goldman Sachs.”

Hedges plainly states that if we continue to allow people like Larry Summers and Robert Rubin to determine our future, “we will be finished. Not just finished economically, but finished in terms of the assault on the eco-system on which the human species depends for survival. This is, quite literally, a fight for life.” Agronomists are warning that for every one degree increase in temperature, there will be a ten percent decline in crop yields.

Thursday, December 1, 2011

A serious fight over electronic money

Back in the 1980s when I realized the developing nations of the world were being trashed and looted in the name of reprogramming computer chips, it dawned on me that the MOST revolutionary act possible would be if someone got access to the right computer chips and just cancelled all the third world debt.

Well I wasn't going to do it.  I can barely run a Macintosh and my last crack at programming came when I tried to learn something called Minnesota Fortran in the early 1970s.  I know just enough about computers to know how little I know.

So now we see a real threat emerge to the security of electric money.  I have no idea what these young hackers intend to do if they get access to the right servers. I don't even understand the level of nerd dick-swinging going on.  But I do understand that these kids are fooling with the global money supply and that folks, is the primal source of power in today's monetized world.

So now we know

On Monday, I composed a post that took the world's central bankers to task for not creating enough money to stave off the collapse of the Euro.  And it is a pretty good post.

But surprise, surprise, surprise!  The world's big central banks led, it appears, by the often-maligned Ben Bernanke managed to cobble together a scheme of a coordinated monetary re-inflation of the threatened European Union.  Now the story of who did what to whom and for what reason will probably take a least a year to get right, but there are several things that we know already.

1) This could have been done years ago.  The option was always open.  This sort of thing was done by the Fed during World War II as a normal operating procedure.  But to the "sound money" guys, this is a major sin.  Expect the howling to commence.

2) The banksters managed to get a lot of austerity measures passed before they "caved" and adjusted the money supply.  When the story comes out, we will discover that the triggering mechanism this week was a near-death experience by a major name bank.  Commerzbank has been mentioned but only a handful of people actually know so far.  What we know from this is that banksters are only too happy to watch a society like Greece disintegrate into chaos but if one of their own members gets into trouble, rules written on two tablets of stone CAN be adjusted after all.

3) This action was ONLY directed at saving the financial institutions.  Actually re-inflating the real economy is not even being discussed.  Example: we just found out that the Fed pumped $7 TRILLION into the banking system in the past two years.  As far as anyone can tell, all this "money" did was change some numbers in a bank's computer somewhere.  If $7 TRILLION was pumped into the real economy, it would employ 20 million people at $50,000 a year for SEVEN YEARS.

So I was wrong.  The central bankers of the world CAN push the necessary buttons to save the economy and I thought they were too ideologically confused to do it.  The trick will be if they can perform this magic for someone other than their buddies.  Only if THAT happens will I be convinced that the big moneychangers are something other than pathological greedheads.

But hey, the markets loved it.

Wednesday, November 30, 2011


A Facebook friend credits this powerful graphic to Mike Treder, Managing Director of the Institute for Ethics and Emerging Technologies, at Trinity College in Hartford CT.

And how about an infinitesimally small dot? Actually, no dot at all - because now our corporate overlords expect us to work for nothing. Hat tip to TBogg for his quick takedown of Stanford / Hoover Institution's preeminent oligarchical butt licker, Richard Epstein. TBogg linked to this hair-raising article from The Guardian: Young jobseekers told to work without pay or lose unemployment benefits.

Goin' on down to Durban

In the world of the educated Leisure Classes, there are two "approved" methods for "problem-solving."  One is to build an organizational bureaucracy (whose primary function is fundraising) that includes a headquarters—complete with an interpretative center for "educational outreach."  The other is to hold regular conferences.  Both approaches demonstrate an utter lack of imagination so we can safely assume both will last forever as the top two strategies of the unimaginative.

And so we see gathering in Durban South Africa of the folks charged with formulating a "solution" to climate change.  It would probably be out of order to suggest such heresy, but perhaps one way of demonstrating seriousness about climate problems would be to cancel a meeting in one of the more remote cities of the world where delegates from nearly 200 countries must fly to attend.  Except for the opportunities to schmooze, there is nothing that will happen in Durban that couldn't have been as easily accomplished on the Internet.  But hey, no one's going to miss jet fuel when it's gone so let's burn it up going to a party for the professionally grim—amirite folks?

Institutional Analysis suggests that the most likely "triumph" at Durban will be an agreement to hold another conference.  After all, if your primary skillset is organizing and attending conferences, it is a pretty sure thing you will try to keep them happening forever.

Apparently I am not the only person who grows tired of partying as a substitute for actual progress on a serious problem.  Note the tone of the questions in the interview of the German Environment Minister below.  The Germans are probably the most environmentally aware folks on the planet.  The responses of Norbert Röttgen are often pretty damn thoughtful considering he is a member of a Conservative government.  Close your eyes and try to imagine the Newt of Gingrich saying something remotely as interesting—and he gets the big money for his intellectual advice.  (sigh)

I am also including a couple of stories that are good examples of how people behave when they are actually solving problems.  There IS a difference!

Tuesday, November 29, 2011

Ideological blinders

The main thing about this current economic debacle that is so maddening is the fact that we live in a world where money can be created and destroyed in nanoseconds with a few keystrokes and yet the conversation about money hasn't progressed much, if at all, since the post-1873 fight over the gold standard.  In the real physical world this means the Greenbackers and Populists won all the battles.  In the cultural battle over how we think about money, however, the goldbugs and other hard-money types are still winning—even though their ideas are absurd when describing the reality of electronic money.

So we have the possibility of serious destruction to the real economy of Western Europe because the culture cannot absorb the ideas behind the new money.  I mean, how depressing is that?  What can possibly be gained by anyone—ESPECIALLY the mega-rich—by plunging the world into chaos because they can't handle the fact that money isn't gold anymore?

I find myself amused because people refuse to admit that money is just rearranged electrons in a memory chip somewhere.  The funs only lasts until the realization returns that this misunderstanding is literally killing people.  So I am gratified to see whenever the economic thinkers whose opinions I respect write about this problem.  After the jump, I have included parts of essays by Dean Baker, Paul Craig Roberts, James K Galbraith, and Michael Hudson.  Good stuff!

One other note.  Because I have been writing about monetary matters since the late 1980s, I tend to be a bit superficial in comments like this.  However, if you want the long version of a thoroughly researched monetary position, you can find it here.

Monday, November 28, 2011

Central bankers vs humanity

The big banksters are toying with an economic catastrophe.  There is really no other way to view the current crises in Europe.  And why do we know this is true?  Because the whole mess could be resolved by pushing a few buttons.  Unfortunately, the folks who could push those buttons are not inclined to do it.

Sunday, November 27, 2011

Scientists in Sweden Create Light From Vacuum

Scientists at the Chalmers University of Technology in Gothenburg, Sweden have succeeded in proving a major hypothesis of quantum physics by capturing photons that appear out of nowhere in a vacuum.
Scientists at Chalmers have succeeded in creating light from vacuum – observing an effect first predicted over 40 years ago. The results have been published in the journal Nature. In an innovative experiment, the scientists have managed to capture some of the photons that are constantly appearing and disappearing in the vacuum.

The experiment is based on one of the most counterintuitive, yet, one of the most important principles in quantum mechanics: that vacuum is by no means empty nothingness. In fact, the vacuum is full of various particles that are continuously fluctuating in and out of existence. They appear, exist for a brief moment and then disappear again. Since their existence is so fleeting, they are usually referred to as virtual particles.

Chalmers scientist, Christopher Wilson and his co-workers have succeeded in getting photons to leave their virtual state and become real photons, i.e. measurable light. The physicist Moore predicted way back in 1970 that this should happen if the virtual photons are allowed to bounce off a mirror that is moving at a speed that is almost as high as the speed of light. The phenomenon, known as the dynamical Casimir effect, has now been observed for the first time in a brilliant experiment conducted by the Chalmers scientists.

"Since it's not possible to get a mirror to move fast enough, we've developed another method for achieving the same effect," explains Per Delsing, Professor of Experimental Physics at Chalmers. "Instead of varying the physical distance to a mirror, we've varied the electrical distance to an electrical short circuit that acts as a mirror for microwaves." Read more.

Elevator Speech econ #1—a rising tide lifts all boats

In 1963, President John Kennedy said in a speech defending his economic policies that "a rising tide lifts all boats."  His speechwriter, Ted Sorenson has assured us that it was a widely used phrase in New England long before Kennedy took it national.  It eloquently sums up a widely held economic view that the more the folks at the bottom prosper, the more the classes above them prosper.

And of course, this economic strategy works.  But when Ronald Reagan's economic guru Arthur Laffer started to use the phrase, he was selling tax cuts for the rich.  Make the rich richer, he argued, and the wealth will trickle down to everyone.  In Laffer's rephrasing, JFK's idea had been turned on its head.  According to Laffer's economic agenda, a rising yacht will lift all tides.

That didn't happen because such an outcome is impossible.  It doesn't happen in the real world and it doesn't happen in economics.  And since the days of Reagan, the rich have gotten wildly richer while the rest of the income earners have seen their wages stagnate or fall.  This outcome is what powers #OWS.

So whenever you hear someone say "a rising tide lifts all boats," you must make sure that the speaker is quoting JFK correctly.  Otherwise you are probably hearing the bastardized version first popularized by Laffer.  It makes a BIG difference.  One leads to successful outcomes—the other does not.

Saturday, November 26, 2011

Saturday toons 26 NOVEMBER 11

I believe #OWS is beginning to understand what they are up against.

Friday, November 25, 2011

Watching the housing meltdown

Recently I discovered a Finnish blog devoted to the dynamics of their housing prices boom.  If you took the details of their story and moved them to USA, it would be 2007 all over again with some not-so-minor adjustments.  For example, Finland has managed its affairs so carefully that they are currently the only Euro-zone country that still conforms to the original Maastricht guidelines.  As a result, she is being asked to co-sign a ton of bad debt for the rest of the EU—something that annoys a lot of Finns.  So there is that big difference.

Because they are so cautious and sensible in most economic areas, the Finns might be forgiven for thinking that their housing bubble is somehow different than the rest of the housing bubbles that have collapsed in the past five years.  They may be right—but I doubt it.  I heard a major-league Finnish Ph.D. make all the same bubble noises last summer and they sounded pretty much like the crazy talk I heard in USA back around 2007.  Here's how it works. (simplified)

Someone buys a house for $40,000 in 1977.  In 2007, some eager real estate booster tells this homeowner his house is worth $400,000. The fool thinks he's rich and can easily borrow against his increased equity. The real house is 30 years older and now needs some expensive maintenance. No problem, just borrow against the equity and while you are at the bank, get enough for two months in the Caribbean and some more for that new Audi.

So he now gets to buy his house again—only now repairs are much more expensive than new construction (did I mention the house needed a new $100,000 kitchen because the owners believe they have become gourmet cooks?)

So now we have a guy with a $40,000 house who spent $40,000 in maintenance to get it back to original condition. So the real house has been returned to its original value. And assuming it was done well, the new kitchen may have added $100,000 of value to the real house.

So even though he might have paid off the original mortgage, our owner is now $250,000 in debt (remember the super vacation and Audi). He finds the new debt service onerous but, hey, someone told him his house was worth $400,000 so he still feels rich even though he is in hock up to his eyeballs.

Of course, if the median family income in USA is $50,000, the most a reasonable young couple should be able to pay for a house is $150,000 ($100,000 would be a lot better). This means that unless incomes rise, nobody can afford that house at $400,000 and the prices must eventually crash back to affordable levels.

What friggen mess this is. It doesn't take much to turn a mortgage upside down. Get a bunch of foreclosed properties in the same neighborhood, and those inflated property values crash down pretty fast. My nephew recently bought a house near Orlando Florida for $110,000. It had been sold previously for $385,000. And the values would come down even faster if folks didn't cling to the crazy idea that high prices will return.

So now the construction industry has 50% unemployment and the real estate business is worse.  Thousands of folks with serious skills have been essentially unemployed for four years.  Meanwhile, beautiful houses sit vacant and deteriorate from weather to vandalism.

And all this pain came about because otherwise intelligent people came to believe that their homes were an investment. They are not—homes (the real ones we live in) are like cars. They start depreciating the minute we buy them. They wear out. And they need regular maintenance.

I should tell you, I repeated the above paragraph at a party in 2007 in front of some academics who were delighted by their new-found wealth courtesy of their rising home prices. (When these folks started feeling rich, they began reading the Economist which only confirmed their greedy fantasies.) They looked at me in surprise and anger for telling this obvious truth. I could not have made a bigger social error if I had shit in the punch bowl. Trust me on this—when folks get caught up in a property boom, the madness is nearly universal.

Thursday, November 24, 2011

Come ye thankful people come

There is an argument which claims that gratitude is the virtue from which all other virtues descend.  I am not especially good at these sorts of philosophical debates but this sounds about right.  And I believe it's good to set aside a holiday that is dedicated to gratitude.  Not surprisingly, this was the brainchild of Lincoln who had more than his share of good ideas.

When I was growing up we had a Thanksgiving tradition.  Before we could eat, my father would have all of us around the table explain the one thing we were most grateful for.  There was a six-year age difference between my oldest sister and my little brother so there was some variation in the sophistication of the answers, and there was pressure to come to the point because the food was getting cold, but my family often came up with some great things to be grateful for.  I'd start thinking about my answer several weeks in advance so I wouldn't sound lame.  It was an excellent mental exercise.

So herewith my reasons to be grateful this thanksgiving.

Wednesday, November 23, 2011

When banksters crash the real economy

I have dozens of reasons for detesting the de-industriaization of USA.  I often cite the ongoing impoverishment of the nation caused by a persistent trade deficit as my pet beef but I think it is more than that.  I happen to enjoy spending time around people who can build complex and very difficult things.  I am related to many of them and one of the main reasons my tribe came to USA was to build the more interesting parts of this nation.

Because I know how difficult things are built, I am especially sensitive to what is being destroyed when the capacity to build takes a hit.  A production facility represents thousands of man-hours devoted to solving a nearly infinite array of problems.  Getting everything to work smoothly is a process that can take decades.

That we allow banksters to sweep in and close down a factory that can represent four generations of distilled creative genius, is a crime that actually horrifies me.  In the 1980s when these sort of hostile raids were common, banksters would destroy in weeks the wealth generated by sometimes thousands people working their entire lives.  And having seized a few millions for themselves, they would move on without a thought in the world about the carnage they left in their wake.

Anyway, this is a topic both Tony and I could probably discuss for weeks without notes and without repeating ourselves.  What I find so amazing is that I have hundreds of examples of bankster crimes against the Producers and so does Tony—and they are NOT the same list.  And this is the economic ruin that traps us today.  Ironically, the reason Predator banksters are failing around the world is they have run out things to snatch and grab—so complete has been their destruction of the real economy.

Monday, November 21, 2011

Constitutional Foundation of the US Economy: Powers are Implied Not Enumerated

Almost every major advance of the US economy has been nurtured or facilitated at some point by the active involvement and encouragement of the national government. It's been a partnership - sometimes uneasy, sometimes close, but a partnership - between government and free enterprise, that has led the development of the US economy. This role of the national government was deliberately written into the Constitution, and touches directly on Constitutional issues that the left has ignored, but which the wrong-wing has long waged a smear campaign against. These issues go to the heart of the question: What is the role and purpose of government? They include such specific issues as the General Welfare clause, states rights, implied versus enumerated powers, and the reach and scope of the Commerce clause.

Contrary to the idealized wrong-wing myth of the U.S. economy being founded on the principles of laissez-faire, the framers of the Constitution deliberately set out to create a central government strong enough to force the thirteen states into one national economy. To do this, the national government undertook a number of programs and policies to build and strengthen the national economy by encouraging and protecting manufactures and commerce, establishing a national banking system, and promoting and directly assisting the development of transportation.

Climate Change, denial, and suicide

Ah yes, the hard evidence just keeps piling up about climate change.  Meanwhile, here in Minnesota it snowed (a little) over the weekend but we are being promised 51°F (10°C) by Friday so this was just our "warning" snowfall.  So after a late and very wet spring and an incredibly dry fall, we are now treated to a late winter start.

Sunday, November 20, 2011

Institutional analysis and #OWS

I have long believed that there is no intellectual invention more interesting than Institutional Analysis (IA).  The second I saw how it worked, I was just stunned by its potential.  But while it is easy to describe IA, it is pretty hard to actually do it.  But we have a moment in history that calls out for forecasting methods that have proven effective and IA is one of the few intellectual exercises with a track record of actually predicting things.

Saturday, November 19, 2011

Saturday toons 19 NOVEMBER 11

Making an old point.  Turns out Americans don't much care for hypocrisy.

Friday, November 18, 2011

This is how reformations begin

Probably because I once had to write a paper on the subject, I am convinced that Luther's Protestant Reformation was the first large-scale social transformation powered by that wonderful new invention—the printing press.  Without the printers, it is highly unlikely the Reformation would have happened.  And the first relevant thing they printed was Luther's 95 Thesis.  This act had major historical implications even though the content of those 95 Thesis is rarely discussed.

I keep wondering what the modern equivalent of the 95 Thesis will be.  The invention of the Internet is at least as significant as the printing press.  So I believe it is almost certain we will see something game-changing as the Reformation powered by the Internet.  #OWS may be it.  It's too early to tell.  But it is interesting to see Italian students come up with a new 95 Thesis.  They're pretty good too.

Thursday, November 17, 2011

Winter is almost here

Going through a bunch of autumns (knowing that you are about to deal with a winter where in spite of your best-laid plans, mother nature WILL try to kill you at least once) has taught me to become pensive, fearful, cautious, and downright gloomy this time of the year.  This feeling is like being depressed except it is based on reasonable expectations and hard-earned lessons.  Even if you have moments of joy, you wonder if you aren't missing something obvious.  Oncoming winter WILL do this to you!

Yesterday's post is the perfect example of what comes of that feeling.  Tonight Keith Olbermann was interviewing Michael Moore and the subject of the Adbusters suggestion (that was part of my post) came up.  Moore was much amused by the suggestion that
we clean up, scale back and most of us go indoors while the die-hards hold the camps. We use the winter to brainstorm, network, build momentum so that we may emerge rejuvenated with fresh tactics, philosophies, and a myriad projects ready to rumble next Spring
Moore reminded us that Adbusters was a Canadian outfit and suggested that they were far too worried about whether we Yanks could handle winter.  Moore, who delights in the youthful energy and creativity of #OWS was quite sure the kids were just going to press on as if NYC cops existed to motivate people.

Of course, winters are much milder in NYC than in much of Canada so Moore has a point.  But so does Adbusters / me.  One of the primary reasons cold-weather people tend to build technologically sophisticated societies is that they have developed a whole alternative lifestyle that allows them to survive winter.  Adbusters was suggesting that much good comes from switching to a winter mode. But unless you have learned how to make the most of winter from experimentation, this act of switching to a cold and dark existence is going to be treated the way Moore treated it.  Of course, he is from Michigan so knows how to switch but he was not about to step on anyone's youthful exuberance.

Anyway, winter is long and I'll have plenty of time to worry whether the Europeans are going to crash their financial systems because their ideological blinders prevent them from doing otherwise or that the kids in #OWS will a provoke a hypermilitarized police force to murder.

So as I awake to temps in the teens (°F) this morning, I would rather write about music and Producer play.  Because the very best antidote for the evil and insanity in this world has for me always been Bach.  Yesterday I discovered an extremely clever commercial made in Japan for a cellphone.  It has been seen by over 7 million on Youtube.  No matter where you are in the world, if you want to make a statement about your seriousness and refined taste—the soundtrack is Bach. USA even put Bach on the first record we sent out of our solar system.

And this makes me happy. As a very strictly raised preacher's kid (no movies, rock music, cards or games of chance, dancing, etc.) I left home about the most un-cool person to walk the planet. But I did have music. My mother loved the opera and listened faithfully on Saturday afternoons, my sister played the pipe organ so well she played for a wedding in 5th grade and had a teacher-student genealogy that went back to Bach, and I was in so many choirs I finally made it to the Minnesota Bach Society—got to sing St. Matthew's Passion, the B minor Mass, the Magnificat, etc.

The piece in this commercial was chosen by my mother to march down the aisle of her wedding to my father. I'll bet I have heard it 500 times on everything including kazoos. But this was especially sweet—the Japanese do Bach extremely well and this was a remarkable tribute.

Wednesday, November 16, 2011

What next for #OWS?

As a creature of the North, I am all for suspending operations in winter.  Most of the crazy things I have done in life were done when I was cold (tired and hungry).  Cold is an insidious foe—it simultaneously slows you down and makes you impatient.  Now IF you can get your enemy to suffer the same conditions and you are better prepared, you can win battles you might otherwise lose—see Zhukov at Stalingrad or Bud Grant when the Minnesota Vikings used to play outdoors.  But a cold, disorganized, poorly-fed group of protesters are no match for well-clothed, well-fed, well-organized police.  If they had not been swept from the park last night, it would have been soon.

And #OWS actually needed a reason to regroup.  Things were getting a little scabby at the various venues, the initial victories needed to be consolidated, and some serious thinking needed to be done about the "what next?" question.  No less than than Adbusters (the guys who invented #OWS) suggested that:

Tuesday, November 15, 2011

Ripping off the Producers

The story of MF Global has mostly been a cautionary tale of Democratic Party Predators that are just as bad as any Republican variety.  The fact that MF's president Jon Corzine was Obama's top fund-raiser gives those of us who believe that the distinction between Producer and Predator is MUCH more interesting than the difference between Democrat and Republican another fresh infusion of intellectual ammunition.  And the fact that Corzine is a former vampire squid (Goldman Sachs) boss is an occasion for major schadenfreude.

What's not to like?  Well, as it turns out, quite a bit.  MF Global actually had honest customers doing useful work—work that is now in danger because MF Global turned out to be just another bunch of evil Predators.

Monday, November 14, 2011

Why Keynesian solutions don't solve much anymore

Besides the existential problems caused when folks stop making things, there is another problem—if you don't make something for yourself, you must get someone else to make it for you.  This principle scales—it applies to individuals as well as nations.  When you get to the national level, deciding to stop manufacturing shows up as a trade deficit.

So what happens here in the land of de-industrialization?  We basically stopped taking about trade deficits.  Makes sense in an idiotic sort of way—if the Predators on Wall Street were going to get away with the shameless plunder of our industrial base, the best thing to do is not notice it.

Sunday, November 13, 2011

Last sparks from a dead star

I am a creature of the Left.  My parents were New Deal Democrats whose critiques of Franklin Roosevelt were usually informed from the Left.  For example, Henry Wallace, who was FDR's vice president until 1944 when he was replaced for being too radical by Harry Truman, ran for President in 1948.  Naturally, my parents voted for him.  Turns out Wallace only got two votes from the little town where my parents lived at the time.  So they understood how unusual their politics were.  But in the weeks leading up to their radical vote, I was conceived.  My mother would kid me whenever I acted like I had discovered Progressive politics that I had been born to be a good radical.

The Left of my parents' generation was already losing momentum by the time I came of age.  I got to college in time to be exposed to the glories of the "New" Left.  No more would the fight be to make the country safe for the poor, the "new" left would concentrate their fire on cultural issues.  Workers were no longer the "vanguard of the revolution," minorities that had been historical victims of legal repression were.  Having "correct" opinions on modern art was much more important than how pensions were organized.  Math was too ridged.  Science was just another religion.  Technological literacy was for the great unwashed.  There were no facts beyond rational debate—just opinions and both informed and uninformed had equal standing.

The whole agenda of the "new" left was validated in a way when in 1970, 200 construction workers beat up some anti-Vietnam War protestors in what would be called the "Hard Hat Riot."  "See we told you—workers will never be of the left" become their slogan.

Of course, what is clear in hindsight certainly wasn't clear at the time.  At least not to me.  In fact, I was confused for years.  I would go to my DFL caucuses and sit through three hour meetings wondering why economic issues would never come up even though serious time would always be devoted to the gonad issues.  In fact, the ONLY time I remember economics being discussed by the what now passed for the "left" in Minnesota, was in September of 1993 when some labor guys teamed up with small farmers to organize a meeting with our DFL Representative Tim Penny hoping to convince him to vote against NAFTA.  Penny showed but wouldn't even shake our hands.  The fix was in.  We were talking to a wall.

The new definition of a "liberal" was someone who could embrace some of history's most anti-Producer legislation so long as they could check off most of the cultural and political correctness boxes.  For several years, I lived in a college town where academics who wouldn't THINK of using an offensive term for protected minorities found it respectable to embrace all the madnesses of neoliberalism.  When it became trendy to read the Economist, I almost threw up.

Since I could not understand the "new" left and their non-economic agenda, I found refuge in spending thousands of hours trying to find out anything I could about Midwestern progressive movements—back when economics dominated the political debates.  It was a wonderful experience but it had an unfortunate side effect—every time I would read a book on something like how the Social Security legislation was first written, I would become even more aware of how absurdly trivial the "new" left agenda was.  But 35 years of trivialization of the "Atlantic left" has taken its toll.  Now that economics has barged back onto center stage in USA and the EU, the left has almost no intellectual horsepower available.

The essay below is originally from LeMonde Diplomatique.  It is superb—read it all.  Halimi points out that the left in Latin America is poised to become more important because they have been dealing with economic issues for at least a decade.  As someone who is especially impressed by Argentina's refusal to cave to the neoliberals since the Kirchners came to power, I think this is a remarkable insight.

Saturday, November 12, 2011

Saturday toons 12 NOVEMBER 11

Neoliberalism takes another beating this week.  It is an economics so absurd that making fun of it should be EASY.  Too bad it took so long to get around to it.

Wind turbines to overtake aerospace in use of composite materials

A new industrial sector - wind energy - is rapidly arising in the USA. According to the American Wind Energy Association, wind-generated electricity accounted for almost exactly a third of new U.S. electrical power capacity built since 2005 Wind energy's growth rate was an impressive annual average of 35%. At the same time, the domestically made content of wind turbines rose from about one third, to two thirds. Now, a report for the composite materials industry forecasts that wind energy will be a larger market for composite materials than the traditional market of aerospace.
The market for advanced composite materials is set to grow by 16% annually to $25.8 billion in 2020 - from just $7 billion in 2011.
But, according to a study by US-based Lux Research, while aerospace has traditionally been the biggest consumer of new structural materials, wind turbines will replace the industry as the leading advanced composites market, owing to the growth of offshore installations.
According to Lux's study - Carbon Fiber and Beyond: The $26 Billion World of Advanced Composites - by 2020, wind will account for $15.4 billion in advanced composites use, compared to just $6.3 billion for aerospace. Read more.
The history of the development of composite materials shows once again the early role of government in helping develop and assisting to market new technologies that eventually create entire new industries. In this case, it was the government's concern over the availability of metals for aircraft production in World War 2, then the demands of the Cold War aerospace programs, that facilitated development of large scale industrial production of composite materials.
This is the true historical pattern of USA economic development, from the Army's role in mapping out routes for settlers going west, to the Coast Geodetic Surveys, to the river navigation improvements of the mid 1800s, to the Navy's role in promoting wireless telegraphy during World War 1, to the Good Roads movement for government paving of roads to made possible widespread use of the automobile in the 1910s to 1920s, to the 1960s seed ARPANET provided for development of the internet. The conservative myth of rugged entrepreneurs is mostly a lie. It's been a partnership - often uneasy, but a partnership - between government and free enterprise, that has led the development of the USA economy.

Friday, November 11, 2011

While we deal with the banksters

There are already angry crowds in the streets and those job creators, those bringers of prosperity, are about to make things MUCH worse.  Oh bliss! Oh rapture!

Thursday, November 10, 2011

Umm, you missed these results from Tuesday voting

In all the discussion of Tuesday’s election, two notable results have received much too little attention. In Cincinnati, an admittedly slim majority of voters -- 51.5% -- rejected a ballot measure that would have banned the city from spending any money on building new passenger rail infrastructure and services. The referendum had been promoted by people opposed to Cincinnati’s current plans to reintroduce streetcars rail service to the Queen City. In Durham County, NC, 60.1% of voters approved a one-half cent sales tax increase to be dedicated to expanding bus service and beginning construction of a light rail transit and regional commuter rail passenger service in the Triangle metropolitan area.

More than the simple Democrat vs Republican sports scores, these results are a clear rejection of the usual conservative claptrap about taxes and the role of government.

In neighboring Orange County (where I live and hope of at the University at Chapel Hill), 60.7% of voters approved a one quarter of one cent sales tax increase, half of which will go to county schools, and the other half to economic development.

I think these results are notable because they contradict the wrong-wing mantra that voters don’t want tax increases on themselves, and don’t want to fund any alternatives to the private automobile as a means of surface transportation.

In other words, the majority of Americans actually want government to do something. Like, build new infrastructure, to help move our society away from its dependence on burning fossil fuels. Completely opposite to what conservative Koch-suckers say Americans want.

Interesting videos on the fight against banksterism

No one has a clue how #OWS will turn out.  At least, I don't.  After years of politics without economics, we now have a situation where economics has become the dominant subject.  This is not without significant risk.  After all, economics is really the only subject worth starting a revolution over.

Wednesday, November 9, 2011

#OWS, pop culture, and Populism

There are probably many people protesting in Liberty Park who believe that they invented protests against financial institutions and glory in the fact they they have inspired copycat #Occupy movements around the world.  Sorry, but the folks who have been protesting neoliberalism at events like The 1999 Battle of Seattle, the Yes Men, ATTAC, and dozens of groups like them, all have legitimate claims to what the patent world calls "prior art."

These seasoned vets have been remarkably indulgent of the newcomers.  As well they should be—after all, trying to get outsiders to understand what they were protesting has been their biggest problem for years.  The main link between anti-neoliberalism (anti-globalization) protests of the 1980s and 90s, and #OWS, is a Canadian outfit called Adbusters whose bright idea it was.

And it will take awhile for #OWS to catch up to the folks in Spain who were already camped out in public places last spring.  Spanish youth even organized a march on Brussels hoping that their plight just might get a better hearing from the arrogant Euro bureaucracy if they showed up after a 1500 km hike.

Occasionally, these protests will be labeled "populist."  As measured against the real historical Populists of 1892, the term "populist" is one of the most misused terms ever.  Most academics, politicians, and journalists now use the term to describe anything they find vaguely icky about the scary masses.   However, with #OWS, the term actually applies.  I am reasonably certain that the historical Populists would feel quite at home with the various social and economic critiques advanced by #OWS (mixed in with an occasional "We could have told you THAT in 1892.")

The reemergence of real Populism partly explains why the cultural manifestations of #OWS have been so breath-takingly excellent.  Of course, this is one of the main reasons why the elites are so terrified of Populism.  They have seen the power of pop culture—in fact, many of them got rich off of it.  One of the great sayings of Populism was, "There is as good in the ranks as ever came out of them."  Folks scrawling signs on pizza boxes have produced gems that rival anything produced by the big New York ad agencies.  That is not so surprising considering that real Populism will always be better than the fake variety they use to sell car insurance.

Tuesday, November 8, 2011

Will #OWS ever make progress towards reform?

After watching neoliberalism destroy societies (and now finally itself) over the past 35 years, I guess it should not be so surprising that #OWS has made precious little progress against such an evil juggernaut in just a little over seven weeks.  After all, neoliberalism has withstood riots opposed to their agenda as a matter of course and has corrupted such figures as Boris Yeltsin, Vaclav Havel, and Nelson Mandela.  It has caused guys like Bill Clinton and Barry Obama to utterly sell out the voters that got them the Presidency.

Yes, bankster capitalism has a lot going for it—money, power, influence.  Yet sometimes I wonder if their real power doesn't really reside in the idea that they run a casino where anyone can play and everyone has at least a theoretical shot at winning.  But it is also teetering on the edge of collapse.  Every day I wake up wondering if the Greeks (or the Finns, or Icelanders, or the Italians, etc.) have done something that finally brings down the crooks who have come to run our financial institutions.

So while I get frustrated at times, I still must commend #OWS for getting at least ONE thing right—they are targeting the guilty parties.

Monday, November 7, 2011

Bad year for carbon dioxide emissions

Climate change deniers are not especially hard to explain in a largely scientifically illiterate society like USA.  If you don't understand the science yourself, you must rely on someone who you believe does.  And because one scientist looks essentially like another, folks start making judgments using very unscientific criteria.

The "Al Gore is fat" talking point is a perfect example.  First of all, Gore is merely a politician who has seized on an issue that appeals to him.  He is not a trained climate scientist so it isn't particularly important what he says on the subject.  Discrediting Al Gore doesn't change the findings of the climate debate one iota.  And commenting on his physical appearance really doesn't have anything to do with whether the planet is warming.  In fact, it doesn't matter what anyone says on the subject—the planet keeps warming anyway.

The other talking point the deniers like to bring up is that because many of the early predictions of the climate science community has been wrong, their science is also wrong.  Again, this point is irrelevant to the question of whether the planet is warming.  We can measure the warming and so we know that energy is being added to the atmosphere.  What this actually means is another subject and it is the speculation on this topic that has any controversy attached to it at all.

Fortunately, it has been a bad year for deniers.  And as the evidence becomes more undeniable, it will get worse.  Unfortunately, scoring debating points with fools is time wasted that could be spent addressing serious problems.  Even worse, once the crude climate deniers have been vanquished we still must deal with the moneychangers who are already telling us we are so deeply in debt, we cannot possibly spend the funds necessary to make a meaningful dent in this building catastrophe.