Perspective

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!

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.

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.

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 toons 26 NOVEMBER 11

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

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.

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.

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.

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.

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 toons 19 NOVEMBER 11

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

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.

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.

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:

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.

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.

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 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.

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!

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.

#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.

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.

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.

Waking up to the relentless idiocy of neoliberalism

When it comes to economics, Harvard has lost the once lofty perch it once held in its glory days when guys like Alvin Hansen and John Kenneth Galbraith helped it rise above the teachings of Alfred Marshall and the rest of the Classical / Neoclassical traditions.  These days, Harvard has fallen back into the cesspool of neoclassical ignorance only now it tends to call it neoliberalism.

The problem with neoliberalism is that almost any sentient being with a slight interest in economics can find dozens of fatal flaws with the thinking that produced it.  Its major flaw is that it comes from a time when economics meant farming with draft animals, slave plantations, and colonialism.  Applied to the problems of an energy-intensive industrialized society, neoliberalism is hopelessly mismatched—a problem it deals with by calling itself "post-industrial."  Turns out as a practical matter, pre-industrial and post-industrial thinking are nearly identical.  The deindustrialization of USA over the past 35 years was the inevitable outcome of the pre-(post)-industrial thinking that is neoliberalism.

Being dumber than a box of rocks is certainly helpful if someone wants to learn the crazier tenants of neoliberalism.  Unfortunately for the schools, the students at elite institutions are not stupid.  So every once in a while, they will protest.  In 2000, the students at the Sorbonne in Paris revolted at the teaching of neoliberalism—calling it autistic economics.  Last week, the spark of intellectual pushback came to Harvard in the form of a walkout of Greg Mankiw's Econ 10 class.  Makiw was the "brains" behind the economic disaster that was the W. Bush administration so it not especially surprising that smart kids might find his classes odious.  Because Econ 10 is the gateway to the economics department at Harvard, the politic thing would be just to shut up, spit back the foolishness on the tests, and move on.  So it is a sign of the times that students would raise hell in a setting where a jerk like Mankiw can just flunk them for their temerity to object to his foolishness.

Saturday toons 05 NOVEMBER 11

Class warfare? We’re late to that party, but we’re here now.
sign seen at occupy LA

We as a nation may have forgotten how to make difficult things and our education is largely a joke, but no one in the history of the human race, has ever done pop culture better. As an historically accurate, capital P Populist, I believe that pop culture is our home turf.  So it is not at all surprising that the pop culture of #OWS is breath-takingly good.

Hudson on Greece—Black on banksters

Michael Hudson: There is nothing democratic about sending Greece into a decade of depression.

Proctor & Gamble, Wal-mart scramble to adjust to Americans' declining incomes

Back in September 2008 I warned that the standard of living was going to plummet as the nation's elites stupidly struggled to save the banking and financial system by sacrificing everything and everyone else. So now breakfast at a not-chain restaurant costs nearly ten dollars, lunch is over $15, and you can't get a steak for dinner for less than $18 or $20.

It used to cost $75 to fill up the cargo van I haul my wares in. Now it costs nearly $100, and sometimes a bit more.

Yet, official government statistics show that inflation is cruising along at a mild 3.87% annual rate.

It's a big lie.

What we need is a study that takes some product or service, like a dozen eggs, or a full-size Chevy sedan, or the cost of a college education, and shows how many hours of average wages are required to purchase them. The result, I'm certain, would show that inflation since the financial crash has been at least three or four times worse than the official statistics suggest. The exercise would also show that that working class and middle class earnings in America have done more than merely stagnate - they have collapsed precipitously.

At the beginning of June, I relayed the news that the trade journal for the advertising profession had declared America's middle class dead. As Sam Pizzigati sub-headlined an article, "The American middle class, concludes a new study from the ad industry’s top trade journal, has essentially become irrelevant. In a deeply unequal America, if you don’t make $200,000, you don’t matter."

Revealed – the banking network that runs the world

I've been wanting to get this on the blog for the past week. The original title is Revealed – the capitalist network that runs the world, but that assumes that what these massive banks have been doing is capitalism. As readers who have followed this blog for a while know, the banksters are not practicing capitalism at all - they have actively and greedily de-capitalized companies and industries for decades now. If you want to call it "capitalism" truth-in-advertising demands that you use a phrase, such as "pirate capitalism" or "financial capitalism" to distinguish it from industrial capitalism.

Three complex systems theorists at the Swiss Federal Institute of Technology in Zurich used a database of 37 million companies and investors worldwide to construct a picture of the most powerful by analyzing managerial and cross-ownerships link to reveal

a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What's more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world's large blue chip and manufacturing firms - the "real" economy - representing a further 60 per cent of global revenues. When the team further untangled the web of ownership, it found much of it tracked back to a "super-entity" of 147 even more tightly knit companies - all of their ownership was held by other members of the super-entity - that controlled 40 per cent of the total wealth in the network. "In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network," says Glattfelder.

Especially interesting is that almost all of the top 100 entities identified as controlling the world's economy are financial institutions, proving further evidence that a new, powerful oligarchy of rentiers and usurers has arisen. The most important entities is Barclays plc, which I know from work I did in the mid-1990s is one of the most important institutions in the carefully concealed still extant British Empire. Included in the top ten are investment vehicles Capital Group Companies Inc., FMR Corporation (which runs Fidelity Investments), the French global insurance group AXA, State Street Corporation, JP Morgan Chase & Co., the British firm Legal & General Group plc, Vanguard Group Inc., and Swiss banking giant UBS AG.

Listening to the best

Last night, I had a real treat.  I got to hear an old teacher.  I know, I usually complain about how lame most of my educational experiences were.  But this guy was anything BUT lame.

Dean Abrahamson taught a two-quarter graduate-level sequence entitled Energy and Public Policy at the University of Minnesota.  He was a consummate generalist.  After getting his undergraduate degree in mathematics, he got a Ph.D. in Physics.  He then worked for the nuclear power industry before becoming concerned by the various exotic emissions those plants throw off.  But before condemning them, he decided he needed to understand their effects on humans and so wrangled a spot in the medical school—becoming a doctor.  But soon he discovered that the real action when it came to understanding and mitigating the effects of nuclear power was not in physics or medicine, it was in public policy.  So it was back to school and soon he had another degree in public policy.

Peak oil in USA was in 1970 and the Arab Oil embargo was in 1973 so when I took his classes in 1974, energy issues were fresh on my mind.  I felt damn lucky to get into his class.  Because the big energy events were so recent, there were no textbooks Abrahamson found suitable—so the reading material was handouts of reprints.  Because energy is a huge sprawling topic, he had everyone try to get their arms around a small part and report back our findings.  One quarter, I wrote on the problems associated with increasing the energy efficiency of existing dwellings (my latest effort) and the other I wrote on the hazard associated with ocean shipping of oil products in VLCCs or Supertankers.

Because energy touches and is in everything, discussing it can really only be well-done by a serious generalist.  And while Dr. Dean did not tolerate fools gladly, he was warm and funny and utterly fascinating.  The best part is, he was right about so much.  Nearly forty years later, I have not discovered anything that has contradicted what he taught—and I follow energy matters pretty seriously.

As I walked out the door, my S.O. warned me not to expect too much.  "Old guys get frail and stupid.  Just remember, you haven't seen or heard him in almost 40 years."  Well, Dr. Dean hasn't lost much.  He was on a program with two other speakers and intellectually, he just towered over them.  But yes, he is getting frail and walks with a cane.  My comrade-in-video was there last night and later we decided that we should figure out a way to get this phenomenal genius in front of a camera before he is felled by a stroke or worse.

Last night he spoke on Climate Change and Energy Policy.  Not surprisingly, he was pretty unforgiving about climate change deniers and was caustic about cheap solutions like corn-based ethanol.  Someone asked about some of the exotic biomass experiments and Dr. Dean informed us that compared to the size of the problem, they wouldn't amount to "diddley-squat."  I LIKE my intellectuals to get to the point!  Ask a mathematician a silly question...  Dean doesn't necessarily expect folks to be able to do high-level math, but he does think they should be able to count.

One other thing.  I am occasionally kidded about how often I use the word "folks" in both my writing and conversation.  Picked up that little habit from Dr. Dean those many years ago and refuse to get rid of it because I admired so much else about the man.  Whenever I get frustrated about how this country absolutely refuses to deal with such an obvious problem as energy consumption, I should think of what it must be like to have Dr. Dean's vision and intellectual clarity—and he has had it far longer than I.

Our National Energy Options: Simple in Theory, Difficult in Practice
BY DEAN ABRAHAMSON   November 3, 2010

I've been a long-time trustee of the NRDC, and am professor emeritus of the University of Minnesota, where I began teaching energy and environment policy in the early 1970s. I'm retired since 1998 (I prefer to think of it as being unemployed), but still teach energy policy at the University of Iceland and in Sweden. 

A summary of my views on U.S. energy policy has just been posted here:"Sustainable Development and Energy Options" [PDF, 3.46 MB]. 

Our energy policy options are simple in theory -- decrease demand or increase supply -- but extrememly difficult in practice. Small, incremental changes, each with a time horizon of around 20 years are not going to be enough to avoid very serious, probably devastating adverse impacts. more

The big issues

Got a phone call from Tony tonight.  He's been a busy boy.  He had to do a show in Vermont and managed to fit in stops at Occupy Washington, Boston, and New York.  I hope he will write an account about this soon and it will be considerably more detailed, but the central thrust of what he told me was that while these protests are quite creative and innovative, they really haven't gotten around to economic discussions yet.  He encountered lots of community organizing types—very few with an agenda for banking and monetary reform.

Fortunately, it turns out that it is quite easy to understand the economics from the outside.  Some of those issues are over 5000 years old, after all.  But social movements are also cultural and speaking for myself, I am amazed at how well this part is being handled.  In the end, this might be critical.  But economics will still be the subject both the powerful and powerless will be willing to fight over.

Henry Blodget wrote this back on Oct. 11 when #OWS had moved from being a fringe novelty act to something the Street would worry about.  He couldn't find a list of demands so he formulated this list of what #OWS should be angry about.  It is a very good list.  And if you click on the link, you will see that he has a graph for virtually every point he makes here.