Summer in Minnesota

Doesn't last very long.  So we are taking a week off to take in some of the scenery around Gitchi Gummi (Lake Superior.)

Banksters ruin everything they touch

I must confess that I never quite understood the European intelligentsia's enthusiasm for the European Union.  Of course, I wasn't alive for WW II so even though I have read countless accounts of that horror, I can never really understand the passion of those who were utterly determined that such a disaster would never happen again.  And the E.U. was the pet project of many of those committed idealists.

Furthermore, when I finally got to see Europe for the first time in 1970, much of the physical War damage had been rebuilt and so a city like Stuttgart (which was 96% destroyed--39,000+ buildings--by the spring of 1945) was this ultra-modern city with a lot of very new buildings.  The lesson I learned was not so much about the horrors of war, but of the resilience of the human spirit.

And then there was this matter of scale.  By 1970, I was already quite aware that huge countries like USA have their own set of problems caused simply by their large size.  (For example, I grew up in a home where my folks would often complain that sharing the federal government with those backward southerners kept the nation from reaching its full potential--at least by the standards of Minnesota progressives.)  So I was prepared to be impressed by small countries--and I was.  Their young citizens usually spoke many languages and were very curious and knowledgable about the world outside the borders of their own countries.  This stood in marked contrast to the typical USA-educated student who rarely spoke more than one language and rarely knew about anything that had ever happened outside USA.

So my initial conclusion about the European experiment in union was--it sounds like a fine idea but you Europeans should be damn careful that you do not lose the advantages of a smaller / more easily governed country where cultural norms can often substitute for actual laws.  So over time, I mostly applauded from afar every success at European integration because I figured the folks who wished to avoid WW III were probably on the right track.

Until Maastricht.  The idea of a single currency stank of failure from the first moment it was mentioned.  If ever there had been a complete capitulation to a bankster agenda, this was it.  And because it was 1992, the Maastricht Treaty was larded with all sorts of monetarist / neoliberal language.  Example:

The Maastricht criteria 

The Maastricht criteria (also known as the convergence criteria) are the criteria for European Union member states to enter the third stage of European Economic and Monetary Union (EMU) and adopt the euro as their currency. The 4 main criteria are based on Article 121(1) of the European Community Treaty. 

1. Inflation rates: No more than 1.5 percentage points higher than the average of the three best performing (lowest inflation) member states of the EU. 

2. Government finance:Annual government deficit: The ratio of the annual government deficit to gross domestic product (GDP) must not exceed 3% at the end of the preceding fiscal year. If not, it is at least required to reach a level close to 3%. Only exceptional and temporary excesses would be granted for exceptional cases.Government debt:The ratio of gross government debt to GDP must not exceed 60% at the end of the preceding fiscal year. Even if the target cannot be achieved due to the specific conditions, the ratio must have sufficiently diminished and must be approaching the reference value at a satisfactory pace. 

3. Exchange rate: Applicant countries should have joined the exchange-rate mechanism (ERM II) under the European Monetary System (EMS) for two consecutive years and should not have devalued its currency during the period.

4. Long-term interest rates: The nominal long-term interest rate must not be more than 2 percentage points higher than in the three lowest inflation member states.

There it was in black and white--the rule of the moneychangers had been written into a treaty that foreclosed on any economic strategy that had ANY chance of bringing prosperity to anyone but the moneychangers. Flash forward to 2011 and we can see the economic catastrophe that was the inevitable outcome of that fatally flawed document.

What the banksters are doing to Greece

With the utter complicity of politicians who believe the same insane bullshit about money.

Direct conversion from heat to electricity

There are two reasons I really like this story.

First of all, there is this small matter about where this happened--The University of Minnesota.  The state spends a LOT of tax money to support her flagship public school and it nice to know they can still do very smart things over on campus.  This practice is hardly new--it is almost impossible to imagine 3M in its heyday without the chemistry department at U of M, while the large and diversified medical equipment industry in Minnesota simply would not have happened without the labs next to the U of M hospital.  So the idea of throwing a LOT of hard science at problems with potential commercial applications seems built into the school's mission.  Rah! Rah! Rah! for Ski-U-Mah! (etc.)

And then there is my PET argument that environmental problems are usually ENGINEERING problems.  This is especially true when the subject is energy--whether it's finding or extraction, refining or distribution, or the production of the devices that use energy, virtually every problem of importance can only be solved by people who are very comfortable around science and ingenious deploying technology.  ("My people" you understand.)

Just the facts on Social Security and Medical Costs

Responding to the latest lies peddles by New York Times columnist Thomas Friedman, Dean Baker provides a quick summary of the facts regarding Social Security and medical costs on FireDogLake:

. . . The reality of course is that Social Security is fully funded by its own dedicated tax revenue through the year 2036, meaning the program on net imposes no burden on the government.

Under the law, if nothing is done to increase revenues SS will only pay about 80 percent of scheduled benefits in years after 2036. It is prohibited from spending any money beyond what it collects in taxes. The projected shortfall over the program’s 75-year planning period is equal to 0.6 percent of GDP, about one-third of the increase in annual defense spending between 2000 and 2011. It is difficult to see how a program that can only spend what it takes in from taxes could bankrupt the country, but this is Thomas Friedmanland.

There is more of an issue with run-away Medicare costs, but everyone outside of Thomas Friedmanland knows that this is an issue of run-away health care costs. If the United States paid the same amount per person for our health care as people in Canada, Germany, or any other wealthy country we would be looking at huge budget surpluses, not deficits.

This means that if we fix the U.S. health care system, then there will be no Medicare or budget problem. On the other hand, if we fail to fix the system, health care costs will bankrupt the U.S. economy even if we eliminate Medicare and other public health care programs altogether. . .

The Euro--another casualty of failed economic thinking

There are probably a bunch of good reasons for why Europe should have a single currency.  I am pretty sure that if I had to conduct a business on the continent, the expensive hassle of converting currencies every few hundred kilometers would have made me a huge Euro booster.  Added to such practical considerations is an idealism behind a we-are-all-in-this-together notion that probably made people feel all warm and fuzzy inside.

But there are also good reasons for separate currencies and defended borders but the best reason comes from the world of engineering.  The reason a ship is divided into sections with bulkheads that can be tightly closed is that when things go wrong, it is highly advantageous to be able to seal off the problem area.

The Euro would have probably not gotten into so much trouble except that its introduction coincided with a bunch of other whacky neoliberal ideas that practically ensured that catastrophic hole-in-the-hull-style problems would arise.

Gary Becker Skewered and Cooked

Tip o' the hat to Ken Houghton at Angry Bear for this quick and simple dismantling of a prevailing neoliberal shock doctrine "model." Becker is, as related by his profile in Wikipedia, "a professor of economics, sociology at the University of Chicago and a professor at the Booth School of Business. He was awarded the Nobel Memorial Prize in Economic Sciences in 1992, and received the United States' Presidential Medal of Freedom in 2007." Becker blogs with U.S. Federal Judge Richard Posner - one of the most damaging ideologues in the world - and is noted "for his staunch defense of the consequences of neoliberalism in Latin America."

Not So Dumb as Economists, Part 1

. . . Echidne's takedown of Gary Becker is so divine it deserves your attention more:

This argument was initially made by Gary Becker, an economist, a very long time ago.** It is not an uncommon argument from conservatives (or from certain types of anti-feminist sites.) That does not mean that it shouldn't be discussed. So let's do that by looking at what is unrealistic about the specific conclusions....

In [Becker's] first model only owner/managers have a dislike towards workers from a particular group. That, my friends, is the model from which the above conclusion comes, though even then it would only work to eradicate discrimination from the whole industry if the industry was essentially a competitive one. If the industry is not sufficiently competitive, the bigoted owner/managers can hang on and practice discrimination....

Becker argues that if the only problem we have consists of some bigoted owner/managers, while everyone else is just so sweet, sufficiently well-lubricated markets can get rid of those nasty bigots, always assuming that everybody knows everything relevant about everyone else.

There are no misconceptions in the model. Even the bigoted owner/managers of a pizza parlor, say, know that Joe and Jane are equally good pizza-bakers. They just hate Jane and are willing to hire her only if they can get her for less money.

This cannot last if we can find at least [one] non-bigoted nice owner/manager.

That's the background of the old chestnut. Becker, having become immersed in the imaginary world of his simple model, concluded that competitive industries would never exhibit any long-run sex or race discrimination. Only oligopolies or monopolies could survive with at least some bigoted owner/managers. [emphases mine; hers varied]

It is a rare and delightful moment when someone looks seriously at an economic model. Strangely, when you examine the social premises of the mathematics—returning economics to its beleaguered claim to being a social science, as it were—it starts to be clearly why people believe economists are the problem, not the solution. It's progress to see a blogger destroy an economist this thoroughly.

Pravda notices the German economy

The Germans and the Americans largely industrialized using the same playbook.  After WW II, the team of American economists who supervised the reconstruction of Germany and administered the Marshall Plan were thoroughly conversant with the principles of Industrial (Producer Class) capitalism.  So in spite of 35 years of neoliberal triumphs worldwide, the flicker of the industrial thinking still burns in Germany.  Here in USA, it has been so thoroughly extinguished that something like this Washington Post opinion piece is almost shocking.

The ongoing disaster that is neoliberalism

Back in the 1970s, there was an ongoing debate between that giant (literally) of Keynesianism, John Kenneth Galbraith, and Milton Friedman who was toiling at the University of Chicago trying to resurrect the various economic ideologies that had been discredited by the Great Depression.  At one point Galbraith pointed out that "Milton Friedman’s misfortune is that his economic policies have been tried."

Unfortunately, Friedman's policies were tried again--and now we must deal with the chaos created by that mistake.  And the mindless Friedmanite bots continue crash forward with no awareness of their constant error.  Their refusal to recognize their mistakes proves beyond any reasonable doubt that neoliberalism is a religion--NOT a science--and that the practitioners of neoliberalism are Kool-aid drinking cultists.

Why the economics profession gets it so wrong so often

Not long ago, I met a freshly-minted economist who was a perfectly pleasant young man who was unfortunately wrong about just about everything.  The contrast between this otherwise delightful person and his hideous belief structure was just jarring.  In a world where the prescriptions of economists send millions into the streets to protest and millions more into suicidal depression over their impossible circumstances, the certainty with which he held to a core set of disastrous beliefs reminded me of the religious cranks I knew as a child.

It turns out that these heartless scoundrels are actually the designed outcome of the world's central banks.  The so-called "Nobel" prize in economics has actually nothing to do with Nobel at all but is just a prize awarded by the Swedish central bank--which bullied its way into a ceremony designed to honor achievements in the hard sciences like physics and chemistry.  And in places like USA, it has now become impossible to become a member of the economics "profession" without a stint in the service of the Federal Reserve.

Netroots Nation--redefining irrelevance

Netroots Nation (NN), a gathering of "progressives" organized mainly by the Dailykos website has been meeting in Minneapolis since Thursday.  We here in Minnesota believe we know a thing or three about progressive politics and hoped that our guests not only enjoyed our June weather, but could pick up on the vibe that once made us a showcase for the progressive impulse.

Well, that didn't happen.  NN made less of impact on Minnesota and the nation than a convention of chiropractors.  It wasn't always this way.  In 2008, NN was a must-stop for politicians hoping unseat the Republicans and the reign of error that was the W. Bush administration.  This time around, there were no national name politicians--the best NN '11 could provide for keynote speakers was Russ Feingold, the recently defeated former Wisconsin Senator, and Al Franken, the professional comedian who became a Senator from Minnesota only after a months-long recount.

The locals were ignored.  We were left wondered if we had bad breath or something.  Of course, Minnesotans worry when we are associated with failure and with cause.  Our pro sports teams suck so bad they could replace gravity.  In 1968, we had the two major candidates of the Democratic Party hail from here.  This year, there are two Minnesota politicians running for president only this time they are not only Republicans, but are of the most insane variety.  But while we might be worried that the failure of NN 11 might have been our "fault", the real problems can be traced back to problems at Dailykos.

The main reason the Kos site is in trouble is that Obama has turned from this progressive wet dream into this hideous monster who sold his soul to Wall Street and the Defense department. So while the economy collapses, we continue to fight wars without meaning that we obviously cannot afford and divert resources away from important life-and-death issues like climate change and the rotten infrastructure.

The only way this insanity can be associated with folks called Progressive is to shout down rational debate. And that is what happens over at Kos. Point out the failings of Obama’s neoliberalism and you get shouted down by the Obamabots. Criticize the foreign policy and the Zionists will be screaming about anti-semitism by the third comment. And so on. The good writers have mostly fled because WHO needs that sort of abuse? 

I live in a southwest Minneapolis suburb, and I could not find any reason to attend any NN sessions. They were WAY too expensive and irrelevant to the point of goofiness. And to think that as recently as 2008, I thought the left blogosphere was going to change politics in a major way for the better. 

I don’t know whether to think a lame NN lineup that utterly ignores all the big issues like peak oil, the collapsing infrastructure, debt restructuring, long-term joblessness, never-ending wars, climate change, peak food, the lack of a Progressive narrative, etc. is that way because the NN folks aren’t very aware or imaginative, or that this is a deliberate attempt to lead the Progressive impulse into an irrelevant little pen where we can all be safely castrated? 

Anyway, back in the real world, we find problems that are much larger than "Why Organizing around Community Colleges Matters" (Thurs. 10:30 am).  We also find engaged citizens who are trying to address these big problems.  NN might ignore climate change, but that doesn't mean it isn't happening.

Global weirding

The strange weather patterns just keep getting stranger.  Hardly a day goes by anymore that I don't find myself muttering "It's a good thing this climate change stuff is a 'hoax' or I would REALLY be worried."

Of course, the REALLY strange part about the denial of overwhelming evidence that we have seriously screwed with the atmosphere is not that folks must ignore what is happening outside their front door (or ripping off the front door in a tornado), it's that folks simply cannot imagine all the good things that would follow if we actually got serious about addressing this catastrophic problem.  I mean, the denial is fairly easy to explain--confusion caused by paid liars from the carbon industries, faulty memories about past climatic conditions, resistance to change (especially the expensive variety), etc.  But the failure of imagination is harder to explain--especially in USA where not so long ago, folks with vision and inventiveness pretty much dominated the direction of the nation.  Oh there are still remnants of the visionaries that once built a nation--it's just that most of them these days are working on Wall Street trying to figure out ever more innovative ways to cheat people.

While we dither and deny, the time to make significant improvements to the carbon and fire-based infrastructure slips away.  A screwed-up atmosphere is not something that will fix itself.  And meaningful action must happen soon--like ten years ago.  Unfortunately, we aren't going to get action from the institutions created to address these sorts of problems--like government.  It's not bad enough that everyone running for President on the Republican side is a loud climate-change denier, but as I write, a gathering of lefty "progressives" is meeting in Minneapolis and they cannot be bothered to address this life-and-death issue in a four-day convention.

Elegant technology--waste processing

When I wrote Elegant Technology, getting a handle of the global waste stream seemed almost impossible.  Every day, I could see more things becoming "disposable" as in "too much trouble to either maintain or recycle."  Even recycling looked like a lost cause because the energy involved in collecting and reprocessing something like waste glass was so high.

So even though the one-way trip of resources from mines to landfills was by definition unsustainable, coming up with a viable alternative seemed hopeless.  Of course, what was needed was the sort of inventiveness seen regularly in manufacturing applied to waste reprocessing.

A conversion from linear industrialization to a closed-loop alternative pretty much defined Elegant Technology.  A technology is "elegant" if it accounts for all the externalities including waste disposal.  From Chapter Ten: Do Producers have a Plan? (Pages 117-118 of the Elegant Technology pdf online)

In many ways, industrialization has applied the principles of the second law of thermodynamics to everything. From the mines to the junkyards, the materials become less concentrated, more jumbled up with other materials, and spread far and wide over the face of the planet. If energy cannot be destroyed, no material can be destroyed. When an industrial product is thrown away, it only disappears from a common line of sight because in truth, there is no away.

Linear industrialization creates problems at both ends of the industrial process. High-quality resources are being depleted at one end of the process and waste products are piling up at the other. Every industrial problem of importance is a problem either of resources or waste.

What is worse, the economic systems in industrial countries put a clock on the time it takes for a resource to become waste. Gross National Product (G.N.P.) is a measure of how fast natural resources become waste. At the very time when industrialization is confronting the problem of resource limitations and waste disposal, the economists are proposing solutions that only accelerate this process. This will only serve to make the problems worse.

The solution is obvious. The waste outflow must be converted into a resource asset. Sometimes this process is called recycling—a term that should be deliberately avoided because it conjures up pictures of Boy Scouts on newspaper drives. Newspaper drives may be a perfectly fine thing for children who must learn the concepts of waste management, but recycling on that scale is not a win situation from an environmental standpoint when the burning of fuel in the scoutleader’s station wagon is factored in. The ugly truth is that after fifteen years of recycling talk in the United States, the most effective recycling mechanism is the garage sale. Converting the wastes of industrialization into industrial assets is a problem far beyond the grasp of the Boy Scouts or garage sales.

Closing the industrial loop is a project of similar magnitude to the industrial revolution. Undoing the damage is an even bigger problem than industrialization. About one-third of the world’s population has been beavering away at the creation of the industrial infrastructure of the planet for the last 150 years with occasional setbacks from warfare. A problem larger than that should mean one thing: unemployment will cease if the resource-to-waste loop is closed because there is plenty of work that needs to be done—so much work, in fact, that it boggles the imagination. more

So it is with some joy I read that a company in Belgium has now come up with a higher-tech version of waste reprocessing for electronic junk.

USA economy on the verge of collapse

As regular readers know, I was predicting an economic contraction in the very near future last spring.  The reasoning was simple--oil is the most critical component of the modern economy and oil prices were rising.  The oil prices have stopped rising but the damage has already been done.  The only thing left to see is how this disaster plays out.  Since the last spike in oil prices triggered the last economic calamity and we are hardly recovered from that, it is difficult to see how it can be any better this time.

IMF--what a lovely organization (NOT) part xxxx

Once did a thought experiment--what would happen if some hacker managed to cancel some country's external debt?

I am pretty sure that if Keynes could come back from the dead and see what the banksters have done with his humanitarian IMF idea, his heart would fail again.

River Revival--Working Together to Save the Minnesota River

Attended a "watch party" last night for a video documentary I had more than a little to do with creating.  It concerns the efforts that are being made to clean up the Minnesota River.  A good time was had by all.  Turns out the kind of people who take it upon themselves to establish wildlife preserves come with all sorts manifestations of Minnesota Nice as standard equipment.  So a BIG effort was rewarded with a lot of appreciation.  Everyone needs to feel appreciated and this is especially true for someone like me who writes about the various highly depressing economic and environmental catastrophes afflicting our planet.

The Minnesota River is sort of the red-headed step child of the state's waterways.  It is not the legendary monster that dominated the economic development of the state.  That would be the Mississippi.  It is not a scenic river crashing through primal wilderness.  That could be any number of rivers from the Rainey on the Canadian border to the Root in the southeast.  The Minnesota is not a scenic river by any means--in fact, it is pretty difficult to even see from ground level.

The Minnesota is an unpretentious stream that wanders through some of the world's most productive agricultural land.  And not surprisingly, most of the problems facing the river are directly related to the ongoing need to feed a hungry world such as soil erosion and the run-off of the pesticides, herbicides, and fertilizers used to power the high yields of modern agriculture.

My role in the making of this documentary was pretty minor--a least time-wise. I was listed in the credits as a technical advisor which mostly meant that I helped the videographer / editor navigate the transition to high-definition production without spending a ton of money.  But since this production was small, we all had to wear multiple hats so I also wore one that might have been called "spiritual guru."

I grew up near the edge of the Minnesota River watershed.  My father was a preacher but since virtually all the members of his church were farmers, I developed a sympathetic concern for the problems of the people of the land.  This experience was so deeply ingrained in me that when it came time to write the first sentence of Elegant Technology I wrote, "In the beginning, there was agriculture."  It is a sentiment I agree with from my bone marrow outward.

So when I was asked for input into the making of River Revival my suggestions centered on how farmers and their problems should be treated.  I pointed out that:

• Farmers on the northern prairies are a lot of things but "ignorant peasants" is not one of them.  The ignorant peasants were driven off the land a long time ago and those who remain are some of the most creative problem-solvers around.
• The people who will ultimately solve the pollution problems of the Minnesota already live on the farms and small towns out on the prairie.  Outsiders cannot fix these problems--they can only annoy the folks who can.
• Any suggestions that farming is a practice that can be eliminated or even curtailed is simply not appropriate for this area of agricultural production--it is MUCH too important to the global food supply.

The videographer of River Revival found some of these clever, caring, problem-solving farmers to feature in his discussion of agriculture's contribution to the pollution of the Minnesota.  They were great--right out of central casting.  I was pleased but more importantly, during the Q & A after the doc had been shown one big guy piped up and said, "I am a farmer and documentaries like this usually portray us as the bad guys.  So I was especially happy this documentary showed how hard we work to do the right thing by the land and the river that runs through it."

YES!!!

River Revival will be on YouTube probably this week.  In the meantime, this is some video I shot of the harvest not far from where I spent my childhood.  As you can see, I am NOT the professional documentary maker even though I do know how the equipment works.

Netroots Nation: My Minneapolis

The Netroots Nation (a Dailykos affair) is coming to Minneapolis next week.  So like a good host (which I rarely am) I thought I might post some pictoral essays on what makes Minnesota unique and why our politics have been so progressive.  This is the last of my guides. The first three were called:

• My Minnesota: A Netroots Guide; The tourist attraction that partly explains Minnesota politics
• Netroots Nation: My St. Paul
• Netroots Nation: Road Trip-Veblen's Minnesota

If St. Paul was always a city of lawyers, bankers, and bureaucrats, Minneapolis was going to be defined by its industrialists. And while the center of the Twin City metropolitan area economic activity has now actually migrated to a point in a southwest Minneapolis suburb, this is merely an extension of the historical economic domination of Minneapolis over St. Paul.

If anything is happening in Minnesota, it is probably happening in Minneapolis. It is also the home to one of the largest land-grant schools in the nation so there is also academia to balance the spirit of enterprise.

Netroots Nation: My St. Paul

St. Paul is easily the best-kept secret in Minnesota. Yes it is the capitol. Yes is has a bunch of state offices. But generally speaking, even most Minnesotans rarely go there so it has become this quiet and extraordinarily beautiful bedroom community with some very nice colleges.

Netroots Nation: Road Trip-Veblen's Minnesota

Most Minnesotans will tell you that the real scenic state is "up Nort." And they most certainly have a point. Anyone who has the time and miles should certainly go north and look. Unfortunately, the big reasons to venture into the tourist north (North Shore of Lake Superior, Boundary Waters Canoe Area, etc.) are beyond Duluth--which makes this more than a reasonable day trip for most.

Fortunately, there is a day trip out of Minneapolis that combines world-class scenery and a pilgrimage to the childhood home of the political economist who inspired the guys who actually thought up the New Deal. It is an interesting epistemological trip because it sheds so much light on how Thorstein B. Veblen came to know what he knew--and he knew a LOT.

So first an introduction to the fine scenery and then a primer on what to look for when you see Veblen's childhood home.

Whether you take in the Veblen house or Lake Pepin first is probably most dependent on what sort of light you wish to capture if you take pictures. The Veblen farm looks pretty good in the late afternoon but the Lake looks good from many light angles. Both destinations can be seen in a day. There are good roads with scenic vistas that completely encircle the Lake. And it is roughly an hour's drive from the Lake to the Veblen farm near Nerstand.

World Record In Ultra-Rapid Data Transmission

May 26, 2011

Transfer of 700 DVDs in One Second Only – Highest Bit Rate on a Laser

Scientists of Karlsruhe Institute of Technology (KIT) have succeeded in encoding data at a rate of 26 terabits per second on a single laser beam, transmitting them over a distance of 50 km, and decoding them successfully. This is the largest data volume ever transported on a laser beam. The process developed by KIT allows to transmit the contents of 700 DVDs in one second only. The renowned journal "Nature Photonics" reports about this success in its latest issue (DOI: 10.1038/NPHOTON.2011.74).

With this experiment, the KIT scientists in the team of Professor Jürg Leuthold beat their own record in high-speed data transmission of 2010, when they exceeded the magic limit of 10 terabits per second, i.e. a data rate of 10,000 billion bits per second. This success of the group is due to a new data decoding process. The opto-electric decoding method is based on initially purely optical calculation at highest data rates in order to break down the high data rate to smaller bit rates that can then be processed electrically. The initially optical reduction of the bit rates is required, as no electronic processing methods are available for a data rate of 26 terabits per second.

Read more.

Wind Energy News: China vs. U.S. edition

Sorry I have let this news roundup slip for so long. But the latest top news items serve to put the U.S. approach to political economy in stark contrast to China's approach. While China tries to promote projects that will actually build renewable energy sources, the U.S. insists on sticking to the "neo-liberal" Shock Doctrine economic policies of free trade and free markets. These policies have clearly failed: after four decades of widespread and bipartisan agreement that the U.S. should achieve energy independence, the U.S. today is more dependent than ever on foreign energy sources. Unfortunately, in this latest blast of news, China has submitted to some of the U.S.'s insane demands.

103° F in June in freaking Minneapolis

There are farmers here in Minnesota who have barely finished their spring planting because it has been so cold and wet.  And now this.  The key to observing the effects of climate change is to ignore everything that isn't just off the charts.  Unfortunately as today proved, even restricting yourself to what historically have been considered anomalies will still leave plenty to watch.

What frightens me most is the possibility that soon the weather is going to be so strange in so many places, we will lose our ability to feed ourselves.

The ethics of mortgage loan default

There is an incredible article up at ZeroHedge, On The Ethics Of Mortgage Loan Default, in which the anonymous author argues that the past decade's securitization of mortgages has so debased the system of recoding property titles in the United States, that it now makes more sense - financially and ethically - to NOT pay your mortgage, but put the money in an escrow account. The "titles to some 60 million homes in America are badly clouded." But even more compelling is the argument that

encouraging investment in an asset class that has been artificially inflated, then deliberately destroying the price of the asset, as part of a separate profit making scheme is unethical, and any agreement based on this type of fraud is grounds to consider the original debt instrument used in the agreement null and void. Fortunately these grounds are unnecessary, as increasingly US courts are ruling that these mortgages are already invalid for numerous other reasons.

So, the mortgage foreclosure fraud crisis may turn out to be a backdoor way to achieve a "Year of Jubilee" in which debts (or at least a massive chunk of debt in the U.S.) are forgiven, and the people set free from debt peonage. What U.S. political and business elites are struggling mightily at this point to not understand, is that debt forgiveness is inevitable. In Elevator Speech #2--Continuous geometric growth in a finite biosphere is impossible, Jon Larson explained why this is so. In part of that "speech" Larson quotes Michael Hudson:

Wealth and Income Inequalities are Markers of Oligarchy

At the beginning of the American experiment in self-government, concentrations of wealth and large inequalities in income and wealth were viewed suspiciously as dangerously subversive vestiges of the royalty and oligarchies of Europe. But today, conservatives would have us believe, concentrations of wealth and inequalities in income and wealth should be viewed as the natural result of a social Darwinian struggle between those who work hard, and those who do not. Thus are Americans slowly but steadily being led to acceptance of the rise of a new oligarchy,

So much for Plan A. Unfortunately, there’s no Plan B.

President Obama's top economic adviser, Austan Goolsbee, was on ABC This Week. I'm glad I didn't suffer through watching it. According to Scarecrow on FireDogLake:

So Goolsbee was in denial from the opening moment because he didn’t have a decent story to tell even in his own framework. When Amanpour asked him what the Administration could or should be doing to improve conditions, he ticked off items you’d expect to hear from a typical GOP Presidential adviser: we’ve got to get the debt under control; we have a White House effort to identify and get rid of governmental regulations that are preventing the private sector from growing the economy; we should pass “free trade” agreements backed by the Chamber of Commerce; and we should leverage limited public dollars to release billions in private funding for investments.

Goolsbee’s bottom line: “It’s now up to the private sector.” That’s exactly what you’d expect from President Romney’s economic adviser.

It is actually quite a spectacle to watch the administration flounder about on economic policy as the election approaches. As Jon Walker reported on FireDogLake on Friday, Democratic pollsters are finding that Americans have lost patience with the President reminding them that the "recession" began under Republicans, and insisting that the economy is on the mend.

As far as regular voters are concerned there is no recovery and according to Democracy Corps, Democrats need to acknowledge this reality to win in 2012. President Obama needs to stop taking credit for “fixing the problem” simply because most people don’t think it has been fixed.

Mark Thoma at Economist's View notes the same thing:

Austan Goolsbee: It’s Now Up to the Private Sector: remember that the administration has been seeing green shoots just around the corner for some time now, and using this to argue against taking action on the unemployment problem. . . Policymakers have been telling us to have patience for some time now, but patience ran thin long ago. We need action, not excuses to do nothing based upon Republican talking points. We have millions of people out of work, we face the prospect of a five to ten year recovery for employment, yet the administration has no plans to even try to push Congress to do more. I understand that Congress is unlikely to go along, but at least people would realize whose side the administration is on. Because right now -- as the above makes clear -- it's hard to conclude that the unemployed are anywhere near the top of the list.

All of which leaves Brad DeLong wondering: Where's Plan B?

Two and a half years ago I remember asking a couple of newly-chosen Obama appointees: That's fine, but what if it isn't enough and we don't get a strong recovery. What is Plan B? You have to be thinking about Plan B.

Now it is clear: there is no Plan B. There never was a Plan B.

More bad news on the environmental front

For most of my life, I have naively assumed that if some piece of environmental news was bad enough, we would wake up and start getting our acts together.  I'll be 62 this summer--I have seen absolutely ZERO evidence so far in my life that anyone is close to waking up and taking meaningful action in USA.

Who controls the moneychangers?

Because if a democratically elected government does not control its banks, the banks will certainly control the government.

This is by FAR, the most important public policy question.  And I greatly admire those who even attempt to address this most serious dilemma.  I love the purity of this guy's argument--for him this is about the principles of democracy itself.  Me? I get lost a long way before I end up in a room discussing the philosophy of democratic control.  For me the reasons banks should subjected to rigorous social controls are simple--when we let the moneychangers make public policy decisions, they are freaking terrible at it and they cost way, WAY too much for the "services" they supposedly provide.

There is something just wrong about the idea that traders playing video games with electronic money should be allowed to determine the course of health care delivery or whether a country should manufacture its own shoes or a thousand other examples.  These people have no real skills so they resort to the tactics of terrorists, "Give us all your money or we will wreck your economy.  And trust us, we can do it--we regularly crash significant parts of the real economy by accident because lacking important knowledge of the real economy, we resort to primitive ideologies that have no known benefit to life on earth except they DO make US richer."  And for pleasure of getting this naked threat we are told that these vile little creatures should be paid insane multiples of the President's salary for the important job of "allocating capital."

Can the guillotine be far away?

Fukushima disaster fallout spreads to the whole nuclear power industry

Possibly the most conservative government in Europe--Angela Merkel's Christian Democratic Union in Germany--has decided to phase out nuclear power by 2022.  Folks, that is barely ten years from now.

Not surprisingly, the power guys are furious.  They thought they had a deal to extend the life of their reactors are now they are being told the end is near.  Besides, most of the proponents of nuclear power believed that with the necessary adjustments in the atmospheric carbon load to address climate change, they were the future.  Even ultra-sensible Finland had bought into this argument and started building a new nuclear installation (scheduled to go online 2013).

Big Ag and the real economy

The workings of the agricultural marketplace are amazingly invisible considering how often we must shop for food.  The wildfires in Russia last summer caused them to shut down their exports.  This in turn gave the speculators plenty of reasons to bid up the cost of commodities.  Suddenly, people living on the margins have reasons to revolt which first happened in Tunisia but could have happened in any number places.  So it is growing season again in the Northern Hemisphere--how are things this year?

Madison Ave.: mass affluence is over

A new white paper from Ad Age, the advertising industry’s top trade journal, has forthrightly declared that “mass affluence is over” in the United States. According to Ad Age Blogs:

. . . the accrual of wealth among the very few is of great consequence for marketers, since 10% of U.S. households "account for almost half of the consumer spending" and represent about one-third of total GDP, according to the American Affluence Research Council.
Simply put, a small plutocracy of wealthy elites drives a larger and larger share of total consumer spending and has outsize purchasing influence -- particularly in categories such as technology, financial services, travel, automotive, apparel and personal care.

That top advertisers now consider middle class America dead for all practical purposes is no surprise for those who remember the infamous October 2005 Citigroup "Plutonomy" report which considered the investment consequences of the world dividing into two basic blocs: the Plutonomy, or an economy driven almost entirely by the buying decisions of the wealthy, and the rest of the world.

Michael Lewis: The Big Short + Obama’s Mistake

The Big Short: Inside the Doomsday Machine, by Michael Lewis, W.W. Norton & Co., 2010.

Since I spend a lot of time driving around the country, I listen to a lot of audio books. This past month, I checked four out of the library, but ended up listening to just one book - three times: Michael Lewis's history of how the subprime mortgage market transmogrified into a highly leveraged monster of collateralized debt obligations (CDO) and credit default swaps (CDS), which eventually blew up beginning in 2006-2007, leading to the financial collapse of 2008.
Yves Smith of Naked Capitalism, argues that Lewis commits a grievous error by holding up as heroes the people who shorted subprimes using CDOs and CDSs. According to her, the financial collapse would not have been as bad, and possibly even avoided, if the shorts had not been able to place their bets using credit default swaps. Hence, concludes Smith, the shorts are not the heroes, but the villains in this story.

Smith is correct in a strictly technical sense only. Missing from Smith’s critique is her usual outrage over the larger moral issues presented by the financial collapse. I was truly surprised by this, because I deeply admire her for being one of the very few people to have been fully immersed in Wall Street’s financial machinations, and emerge with her soul and moral sense intact. There must have been something about Lewis’s book that provoked an outburst, but I can’t put my finger on it.

In point of fact, Lewis quotes one of the shorts, Steve Eisman, discussing when he realized that the Wall Street subprime monster depended entirely on the demand by the shorts for CDOs and CDS. And in fairness to Eisman, it should be noted that his first reaction on realizing the extent of the fraud in the sub-prime mortgage market was to alert state and federal officials in an attempt to spur criminal investigations.

The latest bad news on carbon emissions

The record consumption of carbon fuels must inevitably lead to a record in carbon emissions.  Turns out USA isn't the only place on earth where folks are in deep denial over the trashing of the atmosphere.