Monday, April 30, 2012

Walpurgis Night / May Day

Because I grew up during the Cold War, May Day was this scary event where the Commies in USSR hauled their missiles through Red Square.  It was supposed to scare their enemies—it certainly scared me.  It wasn't until I got out of college that I discovered that May Day, the international labor day, was based on an event in 1886 Chicago.

The triggering event was a march of unionists who were demanding the 8-hour day.  They assembled in Haymarket Square.  The cops showed up.  There was an explosion.  The cops opened fire and many were killed or wounded.  Naturally, the unionists were blamed and some were arrested and hauled in front of a kangaroo court.  Four were hanged.  By 1893, Illinois had a new governor who was appalled by the miscarriage of justice and pardoned the remaining defendants.

This was the origins of the International Labor Day on the first of May.  Of course, May Day as a rite of spring had been around since pagan times.  In Sweden, the night before May Day is called Walpurgis Night which is still a pagan celebration.  Since it six months from Halloween, it has become a light-weight spring version devoted mostly to getting drunk.  Whether you spend May Day dancing around the May Pole, marching in a union organized parade, or sleeping off a nasty hangover largely depends on your political affiliation.

This year's May Day celebrations in France look especially interesting.  Seems like there is actually something worth marching for.

Happy May Day!

The Predators have discovered farmers are making money

Let the farmers make some money for two years and the scams, old and new, come out of the woodwork.  In the category of new, Jon Corzine and MF Global just ripped off a bunch of farmers who were actually hedging their own production.  The farmers have not gotten their money back and Corzine has not gone to jail.  Perhaps it's because Corzine has raised a lot on money for the re-election of Obama.

Raising land rents and fertilizer costs represent more traditional ways to rip off the farmer.  They're doing that too.

Regulating the right things

I have covered the principles behind what society should regulate and what is clearly a waste of time and money in Elevator Speech #8.  So one more time, YES you regulate the banksters and financial transactions.  And NO, you do not regulate most sex practices or the consumption of recreational drugs.  But here are some hard numbers that demonstrate #8.

Sunday, April 29, 2012

Gas prices and driving

As regular readers know, I believe that energy prices determine more about the economy that any other single factor.  When the price of oil goes up, either we get inflation to cover the tab or everything else slows down.  The only sure-fire way to grow the economy is to cut your energy bills.  And if you cannot control energy prices, the only way to cut your energy costs is to cut usage—either by doing without or getting more efficient.

I must admit that driving is so seductive for many of us, the thought of getting the USA to actually cut down on driving seemed unlikely.  And yet is has happened.  In fact, it has happened for so long that it is beginning to look like a trend.  And the drop is significant!

Some of fall-off in energy consumption can be attributed to an increasingly fuel-efficient fleet.  But buying new higher-mileage vehicles is expensive so not surprisingly, the big cutback in energy consumption shows up as fewer miles driven. Joy-riding has probably taken the biggest hit.  And that triggers an interesting cultural shift.  The young have never experienced "joy" in driving.  Yes it gets them out of the house.  Yes, it provides one more place to have sex.  But the act of driving itself is an expensive experience that is risky, provides plenty of opportunities to be hassled by cops, and leaves you wide open to the slings and arrows of status emulation.  Add in traffic congestion and rotting roads, and driving becomes a very unpleasant chore.

I learned to drive in the 1960s and trust me, it was FUN.  A night's worth of cruising could be done on $2 worth of gas (7 gallons /26 liters).  Even kids could afford muscle cars with 7-liter engines—the tires and brakes sucked but you had enough torque to rotate the earth.  Yes, they were worn out at 100,000 miles but they were VERY easy to fix.  Parts were dirt cheap.  The roads were newer and MUCH smoother.  And there were places where one could go to discover the physics of driving very fast.  My first car was an Austen-Healy Sprite.  So I wasn't in the 7-liter league, but we had driving gloves and Harris tweed sport coats and heel-and-toe downshifting.  I was quite dashing.

Friday, April 27, 2012

Generational warfare?

There's a post from Esquire Magazine that is circulating the web.  I am even including some excerpts below.  It claims that somehow the boomers have sucked all the air out of the economy and have actually waged a war on the young.  Now I take second place to one on earth in my horror at the world we are leaving the young.  At least once a day I feel a twinge of relief that I didn't produce an offspring that will inherit this earth. But to blame this mess on the boomers is pernicious nonsense.

Let me explain.

First of all, I have no problem understanding why Mr. Marche would come to the conclusions he has.  The most obvious reason for his worldview is that he was born in 1976.  He turned 20 the year my car was built.  He was born in Canada.  This fellow has NO idea of what living in a world exploding with new knowledge and job opportunities is even like.  And since the real reasons for that world of real prosperity are never taught in school, there is NO reason—except by sheerest accident—for him understanding why those times up until 1973 were good and why today's most certainly are not.  So it is with concern and affection I would like to straighten him out.

1) There are REAL reasons based in physical reality for this destroyed planet with such a grim future.  A LOT of that prosperity in post-war USA was simply not sustainable.  At some point, you simply cannot build more roads and cars and sprawl.  That life requires insane amounts of oil.  There is not enough oil to fuel the cars we can build and the atmosphere refuses to accept more carbon gasses without becoming extremely violent. That game is over and it will never come back.  There is simply no way all 7+ billion people on earth can fill their garages with Lexus.  What is true for the automotive industry is true for everything else—we may have already reached the limit on how many occupations there are that can support an upper-middle-class lifestyle.  Cranking out more students with expensive degrees hoping to get one of those jobs does NOT increase the number of those possible jobs.

2) The boomers had VERY little to say on how the world came to be arranged as it did.  Let's make one thing perfectly clear.  Being unemployed at 59 sucks just as bad as at 26.  The same forces that are screwing up the lives of the kids are screwing up the lives of their parents.  And don't you kids even DARE bring up Social Security.  There are plenty of boomers who have been paying into that fund for 40+ years.  But let me tell you the big secret—there has NEVER been a way to "save" for the future.  The idea that some money not spent in 1975 will pay for caregivers in 2012 is actually preposterous.  The money that has been paid into Social Security was spent to provide care for our parents—when it was collected.  And whether there will be people to change our drool buckets in 2025 will depend entirely on the economic conditions in 2025—not whether or not some larger or smaller slice of a paycheck is diverted to old-age care in 2012.  While it is quite possible to invest for the future (solar-powered old-age homes, building a stable and prosperous society, etc.) you cannot "save" for one.  And this fact is equally true whether the mechanism is Social Security or privately-funded pensions.

3) Yes the boomers have been incredibly foolish—allowing themselves to be distracted by a host of minor issues while the big issues about how an economy organizes itself to provide for the common survival have just disappeared—even (especially?) in political debates where they should be front and center all the time.  But most of this was not our fault.  We grew up in a culture and were taught in schools utterly cowed by the Cold War, the arms race, political assassinations, and other joys.  So it is not surprising we were taught to enjoy the infinity of toys (waterskiing?) and "alternate" realities (Burning Man?) and ignore the big questions.  Anyone asking serious questions was answered with a curt, "Trust us, you don't want to know" and most of us did NOT want to know.  Anyone who persisted in asking was told, "We can and will throw you into the outer darkness of irrelevance."  And so we were presented with a real-life version of American Graffiti—the idea of cruising main street in overpowered cars while engaging in some primitive version of mating was actually the perfect metaphor for the times.  If you find this preposterous, wrap your mind around the fact that in the culture of perpetual adolescence we have been forced to occupy, there are those among us who thought American Graffiti was DEEP.

4) Trust us young citizens, this really wasn't a war on you.  It was a war waged by thieves against anyone who had, or could produce, something of value.  There is nothing special about your plight—you are just another target of the biggest con games in history.  But we boomers and you young doomed have different roles to play here.  My days in the streets are behind me.  But what I can offer is a link back to the knowledge that produced the Great Prosperity.  And what the young can bring to this table is their energy, their inventiveness, and their spirit.

I can assure you there is plenty of useful work to be done and the tools for survival are incredibly sophisticated.  A meaningful life IS possible.  But we MUST not split into factions on the big issues because our very survival is at stake.

Thursday, April 26, 2012

Oh those job creators

This is pretty good stuff.  If you are a person who needs some good responses to those who are giving you a variation of the "rich deserve to be rich" argument, here is a good place to start.  If course, there are always exceptions.  There ARE Producer Class rich folks and mostly, they earned their money.  Fortunately, the public understands the difference—witness the spontaneous outpouring of genuine grief when Steve Jobs died.  People are NOT so sympathetic when it comes to the ill-gotten gains of the banksters.

Wednesday, April 25, 2012

Are the austerians finally losing?

When my Finnish friend was here last summer, we got into a small debate whether or not the zeitgeist could be "changed."  He argued (probably correctly from a purely educated perspective) that because the zeitgeist is by definition a collective mood outside ourselves, we could not control it.  That's what made it the zeitgeist, after all.

"Bullshit," I argued, "the zeitgeist is the product of whose marketing campaign is working best.  Remember the 60s?  So do I.  And so much of what we thought of as the 'energy' was simply the byproduct of hucksters selling records and blue jeans.  How much of our desire to look at Scandinavia as a model came from watching Bergman movies and how much came from Volvo ads?  You CAN change the zeitgeist—it just takes money and skills and some really good reasons for wanting to do so.

Well, this last weekend, I felt the zeitgeist shift.  This has been building up for a long time.  The rule by the thieving moneychangers has been hated since forever but the opposition has been incoherent and marginalized—Seattle 1999, etc.  My personal experience was to write a book that just vanished into the triumph of neoliberalism.  My views on economics—even though utterly mainstream as late as 1972—had become so marginalized that I wasn't even worthy of being officially ignored.

Of course, the main problem was how to confront the richest opposition in history.  Storming the barricades did nothing except fund more police repression.  Political organizing did nothing, at least in USA, because the same guys with the same ideas that triggered the disasters of 2008 got high-level jobs in the Obama administration.  And so on.

And so I applaud any political movement that is willing to confront the naked evil that is neoliberalism.  Yes I know this crowd includes gay Muslim-bashers, but considering what they are up against, I believe it a sign of political maturity that they can set aside these secondary issues and confront the problem of criminals running the banking system.  So here's to Geert Wilders for bringing down the Dutch government.  (And the French.  And the Czechs.  And all the rest of us before this is over.)  We will know the zeitgeist has officially changed when the Guardian hires a decent Institutionalist to explain the return of the economy to the control of honest people with vision.

Technology in hard times

Look at this beauty.  I mean, just look at it!  Fast and menacing, it is the latest high-speed train to be put into operation.  This time, in Italy.  And if that blood-red color looks vaguely familiar, it's because Ferrari has made it the look of extreme high-performance over the years.  It is being put into service by a privately held company called NTV.  President Luca Cordero di Montezemolo, the Ferrari chairman who founded Nuovo Transporto Viaggiatori (NTV) which will operate the train, organized this venture together with other entrepreneurs and industrialists.

Tuesday, April 24, 2012

The French elections (update 2)

Yesterday, I made a brash observation that the French elections were (at some level) all about neoliberalism and that François Hollande probably won because he had come out against neoliberalism during the campaign.

Well...  This inspired some comments that deserve a serious and thoughtful response.

Hey kid, get a job

Lot of highly motivated, highly talented kids out there without much to do.  They could cause a great deal of social unrest before this is over.

Bad News: Just Half Of Recent College Grads Are Landing Jobs

Monday, April 23, 2012

The French elections (update)

One of the more interesting things Chris Hedges said in his speech at Harvard is that in USA, it is impossible to vote for someone for President who doesn't represent the views of Goldman Sachs.  And except for arguably Ron Paul, (arguably!) he is right.  Both major parties are owned by the Wall Street interests and both are informed by neoliberalism.

So yesterday, we did have an election in France where neoliberalism was on the ballot in the platform of Socialist candidate François Hollande.  He came in first.  Sarkozy, the little neoliberal puppet came in second which is a bit of a shock since he is the incumbent.  And then there is Marine Le Pen, the daughter of France's most notorious right-winger who came in third.

The next election round pits the top two finishers so in order to win, little neoliberal Sarkozy must capture the votes of the right.  But Le Pen's followers are nationalists which means most of them detest neoliberalism in all its manifestations.  And suddenly, left-right doesn't describe as much as it once did.

Nuclear power or dung

When I was a junior at the University of Minnesota, I had a roommate from Bangladesh.  Now I understand there are some serious differences between India and Bangladesh, but when it comes to the problems of economic development, there was much they had in common—lots of people, not much arable land, and a shortage of people with technical skills.  This explained why a young man whose father had a minor cooking oil monopoly in Dacca had sent his son to Minneapolis to study computer design (those were the heady days of Control Data, Honeywell, and big Cray mainframes so it wasn't as preposterous as it now sounds.)

My favorite characteristic of this roommate is that he had absolutely NO doubts in his mind that he and his friends were some day going to run his home country.  This lent gravitas to everything he wanted to learn.  Not surprisingly, we would talk about economic development far into the the wee small hours of the morning.  On one point, he was utterly unconvincing—he thought that his country could leapfrog from a pre-industrial state to a post-industrial one without having to industrialize.  "Why should a country like mine with so much underutilized human power get involved with development schemes that would substitute fossil fuels for muscle power?  After all," he would say, "we really have only two possible power sources—nuclear power and dung."  I am pretty certain he was only wishing for the nuclear power.  But he was right, Bangladesh (and India) did not have much in between.

Bangladesh never did become an industrial powerhouse like, say, Korea.  But every time I see a "Made in Bangladesh" label on a shirt or underwear, I see that she figured out a way to sell her cheap labor to the textile industry.  That's about as close as one can get to early-stage industrialization without actually jumping into the deep end.  Now if she made her own sewing machines and power looms, it would be different but in this form, it is sort of a post-industrial industrialization.  And of course, one of the limiting factors in her economic development was always energy.  Hard to build a modern society run on dung.

But suddenly, everything has changed with the advent of cheap PV cells—the third way between dung and nuclear power has now presented itself as a practical alternative to the Indian sub-continent.  Bangladesh has a LOT of sunlight.  Now if she cannot advance the material needs of her population, the problem is obviously social and cultural in nature.  In some ways, this will be a lot like those countries that never had the resources to wire themselves for telephones.  Now those places go straight to cell phones and it's the rich countries that did have land lines who find themselves catching up.

Sunday, April 22, 2012

Stiglitz at INET

It's great that a guy like Stiglitz has discovered that it is impossible for everyone to simultaneously run a current account surplus.  What he seems to deliberately misunderstand is why everyone seems to be trying to do this.  In his mind, countries like Germany, Korea, and Japan who make a great effort to create these trade surpluses by engineering and manufacturing leading edge goods are, at best, quaintly old fashioned.  Considering how much "easier" it is to create an income stream through financial maneuver, people who want to prosper by doing the very difficult, very well seem almost crazy, or at least hopelessly naive to guys like him.

Just remember, the INET conference was funded by a currency speculator (Soros) so it was VERY unlikely that there would be defenders of Producer economics anywhere in sight.  In the Anglo / American world of neoliberal economics, Producers barely show up on their cultural radar so why would their economic thinking even be allowed to enter into these discussions?  It would be like allowing an air conditioner repairman into a high stakes poker game.  So a Stiglitz is probably the best we can hope for—a reasonably enlightened Predator.  Oh well, you gotta start somewhere.

Stiglitz's Powerpoint slides can be found at the link below—see sample.  Stiglitz is a "recovering" neoliberal—obviously, he still has a way to go.

Energy and Madelia Minnesota

Madelia Minnesota is quite close (50 km. / 30 miles) to where I spent much of my childhood.  In fact, the video thumbnail on the embedded YouTube below is taken at the local fertilizer plant.  Yes this plant is very large.  It is owned by a farmers' cooperative called Crystal Valley Coop that has been around since 1927.  It's members have roughly one million acres under cultivation (400,000 hectares) so they probably use most of the output of this plant.

As you read the story below about the little home-grown energy experiment that appeared in Smithsonian Magazine, try to keep in mind the concept of scale.  This is an area of the world where a relatively small coop owns its own fertilizer plant.  This coop isn't your dirty little neighborhood grocery store run by hippies—these people think BIG because that is the scale of their actions.  And while I am pretty certain the folks in Madelia would be delighted if some biofuel operation could produce the liquid fuels they need to farm, I am also certain they would be surprised and delighted if any of these experiments produced enough energy to run their fertilizer plant for a week.  On the other hand, it is their neighbors who have built the infrastructure I shot that lovely post-harvest day in 2010—so who knows?

Saturday, April 21, 2012

The French elections

It isn't a bit surprising that French President Nicolas Sarkozy is facing serious political trouble.  His election was sort of an accident in the first place.  And his agenda was FAR too Anglo-American.  The idea that every enterprise in the society must be privately owned runs counter to a great deal of French history.  Now we all know that the English-speaking world can barely say the word dirigisme without putting a permanent curl of scorn on the collective lips of the truly educated.  But while entrance into the high society of our financial world masters has been predicated on that sneer, Sarkozy's attempt to get into that club with his enthusiastic embrace of neoliberalism was met with a predictable political thud in the country that invented dirigisme.

Saturday toons 21 APRIL 12

Friday, April 20, 2012

More excellent thinking on the periphery

While Argentina gets all the attention these days for thumbing her nose at neoliberal "wisdom," we must not forget that tiny Iceland stood up to the banksters long before it was easy to do so.  So here's some snippets from two interviews of President Ólafur Ragnar Grímsson, from Business Insider.

New economic thinking?

After 35 years of neoliberal hegemony in the economics profession, a push-back by some other worldview was probably inevitable.  This is especially true since neoliberalism has been such an astounding failure by almost every metric imaginable.

A new organization that calls itself the Institute for New Economic Thinking just held a conference in Berlin from April 12-15.  Some of the old warhorses like Joseph Stiglitz and Amartya Sen are part of this.  And much of the funding is coming from that crooked old currency speculator George Soros.  So folks could be excused for believing that this is one of those safety-valve organizations that make some minor gestures at progressive thinking but is really just an effort to keep the young hotshots (who can easily see the catastrophe that the economics profession has become) from wandering too far off the reservation.

But the following speech is actually pretty exciting.  Dirk Bezemer, Associate Professor, University of Groningen in Holland, is seen speaking at the breakout panel entitled "How Can We Create a Financial System That Is Socially Useful?" at the Institute for New Economic Thinking's (INET) Paradigm Lost Conference in Berlin. April 14, 2012.  Here is a young man who structures his talk around the notion that there is a significant difference between the financing needs of the real economy and that of an economy driven by speculation in property.  My kind of guy!

As for how "new" this thinking is...  I would say that my college professors taught things like this in 1972 and that the ideas go back to at least the 19th century.  But they are certainly new in the sense that they have not been taught for at least 35 years so it IS encouraging to see such a smart young man who gets it—even IF he is reinventing the wheel.  Just remember, re-inventing something is just as difficult as inventing it the first time if the history of the first effort has been lost or destroyed.  Considering this young man has been surrounded by nothing BUT neoliberal bullshit his whole life, his climb out that cesspool of ignorance is even more remarkable.

Thursday, April 19, 2012

Christina Kirchner strikes again

The assaults on neoliberalism, like most assaults on hegemony, are most effective on the periphery.  And while it is damn exciting to see an electoral attack on this most vicious form of stupidity in France, the folks who have been working at this the longest and most effectively are found in South America.

The towering intellectual giant in the battle against neocolonialism / neoliberalism was Nestor Kirchner who stepped in to save Argentina from economic and political calamity in 2003.  I consider him one history's greatest economic thinkers—but then, I have long liked the thinking of the great minds on the periphery.  I noticed that people who rise through the ranks near the centers of power tend to be toadies with serious butt-kissing skills and little else.  The subject of economics CAN be made very complex but most of that complexity is theological high-speed algebra.  If you don't have to impress people with a mastery of the "divine" principles of economics, the subject is actually quite understandable.  Unburdened from economic high holy theological bullshit, the guys on the periphery can concentrate on the problems of making an economy prosper.  Kirchner was one of those people (and goodness knows, I have tried to be one of those people myself.)

But Kirchner died and left behind a widow who has become arguably the most interesting female head of state since at least Queen Christina of Sweden (1626-1689), and maybe ever.  In a country where macho is elevated to a high art form, she has managed get a bunch of men to follow her because she appears to be fearless.  And the secret to her fearlessness is that she was right there when Nestor proved that the IMF and the rest of the banksters were paper tigers.  It took a lot of courage to take on IMF and Christina probably provided more than her fair share.  IMF could huff and bluster but in the end, you really don't have to pay attention to the guys behind the curtain (Thank You Frank Baum).  Folks forget that Nestor also began the rollback of neoliberal privatizations starting with the cancellation of France's Suez takeover of the water supply of Buenos Aires in 2006.

But I would just like to point out one thing to President Christina Kirchner if I could.  It's one thing to point out that neoliberalism is at best idiotic when it is not criminal, or that IMF and the gang of banksters are paper tigers, or that neocolonial predators like Suez have no right to control the drinking water of your biggest city.  Yes indeed, you not only got away with all of this—you gave hope to people around the world whose lives are being stolen by economic gangsters.  But this is tangling with the world of oil.  Yes, this is Repsol—the company many call the most incompetent firm in the business.  Yes, Spain is teetering on the brink of collapse so now is a dandy time to move.  Yes, you have a good friend running an oil country in Chavez so I'll bet you can get an insider's advice.  But it is still the awl bidnus.  Jus' sayin'!

Wednesday, April 18, 2012

The end of an era—the shuttle over DC

When I was in junior high and high school, my fascination for things that flew was a mostly solitary experience.  Of course, that was part of the appeal.  The #1 command to a preacher's kid is, "Behave yourself!" and all those hundreds of hours teaching myself to build flying models probably kept me from doing something scandalous with Suzy Sweetjeans in the choir loft at church.  Not a lot of people are fascinated with the details of flight—if you don't believe me, ask the next person you pick up at an airport what kind of airplane he or she flew in on.

So it never fails to make me smile whenever I read that the most popular museum in USA is, by FAR, the Air and Space Museum in Washington.  Turns out there are others who love things that fly—so I am not alone.  Yesterday, the shuttle Discovery was delivered to the museum staff—after a flyby over the city.

Finally, a politician who makes sense!

Martin Luther had a colleague at the University of Wittenberg named Philipp Melanchthon who was seriously influential in bringing humanism to Luther's thinking.  Melanchthon was heavily influenced by Erasmus, the Dutch Renaissance humanist.  That Luther's Reformation was a humanist endeavor owes much to this close friend.

And while Melanchthon and today's French Presidential candidate Mélenchon do not have absolutely identical names, they are remarkably similar, and better, their thinking is similarly enlightened.  Not surprisingly, the authorities are terrified of them both because thoughts like theirs have and will start reformations and revolutions.  As someone who tends to think of politicians as not especially bright or socially useful, this guy actually gives me some little hope.  And there is a damn good chance his political agenda will change the conversation in Europe—and goodness knows it needs changing.

I found the following description of Mélenchon over at Counterpunch.  I have absolutely NO idea how accurate this description is of the man.  But I am going to respond as if it is accurate.

Tuesday, April 17, 2012

Titanic goes down 100 years ago

Our family has its own Titanic story.  My mother's aunt Astrid was traveling from Sweden to USA but the boat taking her to Southampton was delayed.  So she missed her connection to Titanic.  She was annoyed for a few days, of course, but when the news arrived that Titanic had been lost at sea, she was immensely relieved and spent most of the rest of her life believing that she was somehow God's little pet.

Astrid was hardly alone—many people sought religious explanations for this navel disaster.  Most people thought the main cause was hubris—believing that any ship was unsinkable was tempting fate.  Running a brand new and very expensive ship at full speed through a known ice field on a moonless night was not an exercise in sound judgment.  Not providing the crew and passengers with enough lifeboats was an exercise in mindless cost-cutting and certainly contributed to the significant death toll.  Etc.!  These explanations had one thing in common—they assumed that in the contest between the forces of nature and the ingenuity of man, man was destined to lose.  And something like the sinking of Titanic was God's way of demonstrating who was ultimately in charge and who would die for their sins of pride.  So the preachers have been using this example for 100 years now.

Those of us who require Producer Class explanations for events involving machinery have never been convinced that these religious and near-religious reasons explained much.  The biggest problem is that simply hitting an iceberg should not have resulted in a trip to the bottom.  It would have punched a large hole but in theory, the damage should have been limited to three or four compartments that could have been sealed off.  Titanic should have been able to limp into Halifax.  The passengers would have been greatly inconvenienced but virtually all of them would have survived.

Monday, April 16, 2012

The cruel stupidity that is economic austerity

On Sunday, one of the front page writes of DailyKos, Laurence Lewis, posted a harangue on The cruel stupidity that is economic austerity that is a rich compilation of links to the major economic-financial news stories and issues of that past few months. But Lewis had one major theme that really needs to pounded into everyone's skulls: economic austerity did not work in the 1930s, it is not working now, and it is stupid to think that it will ever work because austerity is so contrary to the economic realities that have been proven by the successful application of Keynesian stimulants to end the First Great Depression.

At some point in the future - hopefully the not too distant future - learned men and women will look back at our time in astonishment and wonder how and why we tolerated the usurpation of basic economic truths by a literal clown-show of wrong-wing clowns, and their misleadingly erudite academic apologists in the economics "profession." If we as humankind survive this onslaught of ideologically driven stupidity and drivel, we will look back on this time as the economic dark ages, when the dark phantasms of Ayn Rand, Friedrick von Hayek, Milton Friedman and their ilk, forced hundreds of millions to suffer needlessly for the unworthy reason of a blind ideological faith in the supernatural powers of "the market."

Getting more desperate

For many years now, small businesses have be lauded as the heroes of the domestic economy—the job creators, the engines of growth.  Of course, this is mostly political horseshit.  Most small business have great difficulty creating an income stream that is above the minimum wage for one person.  Very few small businesses make enough to provide the principles with a large enough income to pay for health insurance.  Yet when these businesses fail, it is absolutely the last option available for the entrepreneur.  They have worked hideously long hours and probably sacrificed every cent of their savings—plus whatever they could scrape together from family and friends.  They have probably stiffed everyone they could—the state sales tax guys, the electrical company that cannot shut them off until spring, etc., all in the hopes of keeping the doors open just a little longer.

And when they finally go under, they discover a wonderful fact—any employees that they had will get unemployment payments but they won't.  In they eyes of the keepers of statistics, they won't even be counted as out of work.  So what you have are some of the most highly motivated, most hard-working, most intelligent people who through circumstances that are often far beyond their control, not only lose everything including their dreams, but become officially non-persons.  Not surprisingly, these business "failures" often suffer acute depression.

So here we see a story in the New York Times about the plight of some of the failed entrepreneurs of Europe.  I can only imagine how those who have lost their businesses here in USA must feel about the self-appointed "paper of record" that thinks it must go to Italy to report on a subject that is likely happening in their own back yard.

So wind turbines don't actually kill birds

My love for wind turbines is no secret.  I once lived in a town where the greenies were wind advocates who got the two local colleges to install a couple of large Vestas v82s in 2005-6.  One school simply viewed this as an investment so hooked theirs into the grid and negotiated a price for their juice with Xcel Energy.  The other one hooked theirs into an internal distribution grid the school had built in the 1930s.  This second approach was a far greater hassle but it was worth it because substituting their own electricity for what they once bought (retail) was a much better deal than simply selling into the grid (wholesale).  It was so successful the first school has rewired its campus to use that approach.

I loved "my" wind turbines.  They were a sign our little college town got it.  I put up a video of one v82 being assembled on YouTube in 2006 that when I last looked, had been viewed 356,965 times—a significant number for a 10 minute piece.  When one of the schools erected theirs, the campus chaplain gave a homily declaring that their wind turbine was an expression of virtue.  And I think they are extraordinarily beautiful.  The blades are these highly sophisticated airfoils that I love to examine from multiple angles.

Then suddenly, from out of nowhere, I begin to hear that hippie environmentalists were organizing to stop these magnificent solutions to atmospheric carbon buildup from being built.  Supposedly they're ugly (??? There really IS no accounting for taste!)  They're noisy (Certainly not v82s which can barely be heard above the sound of the wind blowing around your head!)

And supposedly they kill birds.  Well, I walked under one of them dozens of times and I never saw a bird carcass.  I know birds shrivel up pretty fast when they die so I looked pretty carefully.  By my reasonably scientific observations, wind turbines don't kill birds.  In fact, because these big turbines spin so slowly (14 rpm) it would take great skill for a bird to even fly into one on purpose.  So now I have some confirmation.

Sunday, April 15, 2012

Exponential growth in a finite biosphere

Of all the absurdities of the economics profession, the one that leads everyone astray is the crazy idea that geometric growth rates in a finite biosphere are possible.  They are NOT!  And I have been saying and writing as much for many years now.  So in the conversation I have excerpted below, I want the finite physicist to just crush the exponential economist.  And of course he does (or I would not have have quoted it).

But to be honest with you, I have problems with the physicist's side of the debate as well.  Yes, energy supply and consumption issues will keep us from "growing" in the future at anywhere near the rates seen in say, the 1950s and 1960s.  Yes Mr. Physicist—those days ARE over.  And yes, you are absolutely correct that virtually all the "low-hanging fruit" in the realms of energy efficiency have been plucked.

I understand our physicist is striving to make the point that geometric growth in the real economy is mathematically absurd.  Your modern economists like to think of themselves as math geniuses so it's probably a good idea to go after their self-percieved strengths.  But in doing so, he loses much of his argument.  On a practical level, in a world where folks have trouble planning as far out as one year, describing something that will happen in 1400 years pretty much loses everyone except historians and geologists.  Even worse, while it is great fun to ridicule the real-world bullshit your typical economists must believe to go to work in the morning, the economist was right about one thing—there is a LOT of growth that is not only possible but necessary.
  • If we are really to get serious about climate change, we simply MUST snuff out the vast majority of fires we start every day in order to survive.  Converting from a fire-based to an all-electric economy is a ginormous project that could keep millions gainfully employed for at LEAST two generations.
  • If we are really going to get serious about resource limits, we must stop the practices of linear industrialization—the path from the mine, to a product, to the landfill cannot continue.  A conversion from linear industrialization to a closed-loop variety will be a project at least twice the size and complexity of the whole industrial revolution until now.
  • Many of the possibilities for a more efficient lifestyles are sociological rather than physical.  For example, while it is almost impossible to change the energy efficiency of a car once it has been built, you CAN make it 400% more energy efficient by loading up three passengers in a car pool.

Friday, April 13, 2012

Producers and Predators

Since I have been using the description Producers and Predators since at least 1987, there is a part of me that wants to demand royalties whenever I read something like what is excerpted here.  On the other hand, because there are so few of us that actually have developed this worldview, I feel more like saying, "welcome to the club."  Besides, Lazonick gets it right.

Thursday, April 12, 2012

Obama failure on political economy impacts primary results

Continuing the topic begun by Jonathan below - Obama is not a shoo in - there is an important post at Naked Capitalism focusing on the disastrous results of two Congressional primaries in which progressive candidates were defeated by large margins, Why is the left slice of Democrats getting crushed? Reinforcing Jon's link, that most Americans do not feel there is an economic recovery, the latest study by Emmanuel Saez shows that income inequality is now far worse than it was under George Bush.

In other words, Obama has not only failed to solve the underlying problem of political economy but has made it worse. Obviously, Obama has not yet learned that income and wealth inequalities cripple the economy. This crucial fact of political economy was the foundation of my December 2007 forecast of a major financial crash and economic catastrophe, just months before the collapse of Bare Sterns. Apparently, many progressives and Democrats have yet to understand this fact as well. Matt Stoller writes:
Yup, under Bush, the 1% captured a disproportionate share of the income gains from the Bush boom of 2002-2007. They got 65 cents of every dollar created in that boom, up 20 cents from when Clinton was President. Under Obama, the 1% got 93 cents of every dollar created in that boom. That’s not only more than under Bush, up 28 cents. In the transition from Bush to Obama, inequality got worse, faster, than under the transition from Clinton to Bush. Obama accelerated the growth of inequality.

The data set is excellent, it’s from the IRS and it’s extremely detailed. This yawing gap of inequality isn’t an accident, and it’s not just because of Republicans. It’s a set of policy choices, as Saez makes clear in his paper.

Obama's not a shoo-in

Watching the clown show that has been the Republican Primary, it is easy to assume that anyone can beat whatever emerges from that.  I mean seriously, who would ever actually vote for Mitt Gekko—except perhaps another Gekko wannabe.   Unfortunately, the incumbent Democratic President is a fan of neoliberal Gekkonomics so is in no position to attack Romney's greatest weakness.

There is a long time before the fall election.  Lots of bad things can happen in that time.  The worst for Obama would be another economic downturn, an insane war with Iran, or a serious climate-related crop failure.

And then there is the little problem that most Americans believe that we are still in a major recession.  Elections are damn tough to win during recessions.

Wednesday, April 11, 2012

Iran cuts off the Germans

Calling the reliance on oil an addiction is usually not very helpful.  Addictions are brain changes that drive people to indulge in otherwise expensive and dangerous practices they would logically not do.  Anyone who has tried to quit smoking knows the drill—EVERY logical and rational cell in your body KNOWS this is a expensive, repulsive, smelly habit that will lead to ugly diseases but the addictive brain wants a smoke so badly, your hands start to shake.

So a dependence on oil is not an addiction.  It's a technological requirement.  Your owners manual tells you that you need 87 octane gasoline for your car to run properly.  If you do not have this required fuel, your nice car is just an expensive decoration taking up space.  So getting your hands on this fuel is the logical thing to do if you want your car investment to provide transportation.  So while this is not an illogical craving, in some ways it is actually much worse than an addiction because it IS logical.

I keep wondering when the oil producing nations will begin to figure out just how utterly necessary their go juice is to the international economy.  Or how invested everyone is in getting it.  What this really means is that the oil in the ground will always be very valuable—and that it is highly likely that it will be even MORE valuable in the future.  Even if folks stop burning oil, it will still be valuable as lubricants and feedstocks.  So instead of pumping oil at maximum rates, it is in the interest of the producers to pump a little as possible as is necessary to keep the oilfield machinery working.  After all, the oil fields that still have oil 30 years from now will be extremely valuable.

The climate data for March is in

One wonders what the climate change deniers are going to do to occupy their pathetic lives now that the evidence is so overwhelming.  The shame is that most of the possible solutions that were available in 1988 when the science was already beyond rational debate are no longer available.  Real solutions take time to implement and arguing with fools and charlatans has now sucked up most of that time.

Meanwhile around here, more normal spring temperatures have returned and those fruit trees that behaved as if spring had arrived in March are now seeing their buds freeze.  This may turn out to be a very rough year for growing food.

State of the Climate

National Oceanic and Atmospheric Administration
National Climatic Data Center

Summary Information

U.S. records warmest March; more than 15,000 warm temperature records broken

First quarter of 2012 also warmest on record; early March tornado outbreak is year's first "billion dollar disaster"

Tuesday, April 10, 2012

"A republic. If you can keep it." - Education

Mark E Andersen on DailyKos pointed to recent comments by a wrong-wing economist, Richard Vedder:
Vedder says he wouldn’t mind seeing public higher education disappear completely [...] “I do think we need to re-examine why the government is involved in the higher education business. They’re not involved in the automobile business. They’re not involved in the furniture business.
On the face of it, this is typical anti-statism coming from an Adjunct Scholar at the American Enterprise Institute, one of the more important and prominent fifth-column institutions established and funded by the new oligarchs of America. But I think it is crucial that Americans begin to recognize just how dangerous, and even seditious, such thinking as Vedder's is. But to do that, Americans have to reclaim the acute republican (small "r"), anti-aristocratic sensibilities that created the United States. We must become familiar again with our republic's history, especially the concept of the general welfare, because these are the ideas that guided the establishment of the Union.

In response to Vedder, I present an excerpt from John Adams, who succeeded George Washington as President of our young republic. Adams was most proud of the work he did in creating the 1780 Constitution of the Commonwealth of Massachusetts. Here is what Adams wrote into that Constitution, at Chapter 5, Section 2:

Ellen Brown on Canada and austerity

Since I have lived almost all of my life in two states bordering on Canada, it's been a little harder for me to ignore the Great White North than it is for say, a Texan.  Then I got hooked on hockey while living in North Dakota in 1965-66 so I also keep up with the Don Cherry wing of Canadian society.

(For the rest of the world: Cherry is literally an institution—the designated hockey expert on the very proper CBC's Saturday night's flagship program and runaway ratings champ Hockey Night in Canada.  He's this handsome old guy who dresses like a pimp.  And he is wrong about just everything.  Doesn't matter—Canada's hockey establishment absolutely loves the man.  The downside of this devotion is that too many hockey people actually take Cherry seriously and so there hasn't been a Stanley Cup won by a Canadian city since 1995.)

I have great neighbors!  And some of them are my readers because pageviews from Canada are usually second only to those from USA.  This makes sense in fundamental sort of way.  Let me explain.

When I started becoming interested in the Progressive political movements of the North Dakota, Minnesota, Wisconsin arc, there was a sense these folks had created their politics from their interaction between a harsh environment and the plundering robber barons who made their existence infinitely worse than it had to be.  These political movements owed their philosophical ideas to a LOT of things but their curiosity was directed by their real economic dilemmas.  They were trying to solve the problems of survival at the center of a large continental-sized empire.  These were truly home-grown political philosophies.

As I got my arms around the history of economic development in north-central USA, I started noticing that similar geographical, economic, and climatic conditions spawned similar political movements in other parts of the world.  In Russia, it was the Social Revolutionary (SR) Party—which was a peasant party somewhat like the Farmer-Labor Party of Minnesota.  The SRs were one of the first parties purged by Lenin after the Bolsheviks took power.  In Canada, it was the Social Credit Party.

The theory of Social Credit was developed by a British engineer named C.H. Douglas.  In Canada, it took root in Alberta and spread throughout the western provinces.  In British Columbia, the Social Credit Party actually ran the government between 1952 and 1991 though by the end, the theories of Douglas had long since lapsed into obscurity.  I first learned about Social Credit listening to Saskatchewan radio stations while living in NW North Dakota—on one show, Douglas was referenced often.

I am pretty sure the old Farmer-Laborites, Socreds and SRs would approve this piece by Ms. Brown.  She obviously gets it.

Monday, April 9, 2012

Cristina Kirchner reins in Argentina's central bank

When neoliberals analyze the actions of a confirmed anti-neoliberal like Kirchner, the results are predictably scolding in nature.  The fact that Argentina has recently done MUCH better than most of the rest of the world's economies seems utterly lost on this example.

I happen to think these moves Badker finds so evil will give the Argentine economy an even further boost in the right direction.  So I am certain that the neoliberal establishment will soon cook up some phony stats to show why Kirchner's plan cannot work.

Of course, Kirchner's big "sin" is that these moves will cause inflation.  The real economic reason for inflation these days is the price of oil, and energy price hikes have not spread to the rest of the economy in places like Europe only because of savage austerity measures.  So the real political choice comes down to 1) We allow the prices and wages in the rest of the economy adjust upward to match the increase in energy prices, or 2) We hammer the rest of economy into eating the price increases for energy which can easily lead to a deflationary spiral.

My response is, What is the new money being spent on?  If it is for greater energy consumption, real estate speculation, and sales of imported SUVs, then inflation could easily spiral out of control.  If it goes to stimulate energy efficiency, solar substitution, and local enterprise, then BRING IT ON!  Then new money leads to greater prosperity—NOT runaway inflation.

The Greek tragedy deepens

Politically motivated suicides have an interesting history.  The Buddhist monks who committed ritual self-immolation in 1963 Saigon got a lot of attention but it certainly did nothing to slow down the USA armed attacks on their country.  But on Dec. 17, 2010 a young fruit seller set himself on fire in central Tunisia.  Exactly four weeks later Mohamed Bouazizi's act of desperation was a significant factor in toppling the government.  Different conditions; different places.

This latest act of desperation in Greece seems to have touched a nerve.  Only time will tell if the outcome will be more like Saigon 1963 or Tunisia 2010.  And so far, there is clearly no indication that this will lead to young men toting Kalashnikovs hunting down the political and banking establishment.  One could argue that the banksters are FAR more powerful than the USA military-industrial complex so this will remain a futile gesture.  On the other hand, since bankster power is about 98% illusion, maybe acts like this will change things.

Sunday, April 8, 2012

The promise of a resurrection

Easter is a confused holiday.  It's a movable feast so it never arrives the same day every year.  The symbolism is mostly pagan and includes colored eggs and chocolate bunnies.  Even the religious observances are scattered all over the map.  For example, I only recently first listened to Bach's Easter Oratorio after listening to his Christmas Oratorio and St. Matthew's Passion for decades.  There are hundreds of favorite Christmas carols—most people would be hard-pressed to name one hymn associated with Easter.  And then there are the Easter sermons—most are barely indistinguishable from a typical preacher's funeral sermon.

Since Easter is considered the primary celebration of Christianity, I have often wondered why it gets treated like a minor feast day.  Part of the problem is that while births and deaths are common human experiences, no one has actually seen the resurrection of the dead.  So even though this article of faith is central to much of religious practice, it can never shake the nagging doubts that it just might not be true.

Of course, any decent clergyman should be able to draw a practical lesson from the text of the day.  The texts of the Passion could keep any of them going for years.  My favorite in the context of this blog goes, "Beware the evil power of the moneychangers.  The primary lesson of the life of Christ was that he could go around healing the sick and feeding the multitudes for years with few problems, but he drives the moneychangers out of the temple and the authorities had him crucified within a week."  Try finding a pithy lesson like that in the Easter story.  Yes it is spring.  Yes there are new shoots of life to celebrate.  But you could learn those lessons dancing in the daffodils.

But yesterday I saw a story that indicates that there ARE some Christian clergy who think the promise of renewal means more than recycling funeral bromides about the resurrection of the dead.  And goodness knows, Christianity could use some serious renewal.  For most of my adult life, the public face of Christianity has been that of charlatans on television preaching that Jesus wants us to be ignorant, he wants us to support the colonial outrage that is modern Israel, he wants us to vilify people who concern themselves with the health of the planet, he wants us to praise untrammeled wealth and an economy run by thieves and vandals, but most of all, he wants us to blow all our ethical outrage over our neighbor's sex lives.  This "Christianity" is so historically anti-Christian, these con men had to create their own "translation" of the Bible to retroactively justify their horrible teachings.

If humanity survives much longer, historians will certainly label this period as one of Christianity's Dark Ages.  There have been others, of course, but this has been one of the worst and this one used television to spread its madness.  It could be argued that if Christianity can come back from the absurdities of Jerry Falwall and Michelle Bachmann, it will have made its case for the resurrection of the dead.

Friday, April 6, 2012

Good Friday traditions

One of the stranger practices of Nordic Lutherans is that even hard-core doubters can be found carrying on with one of the finer traditions of the faith—listening to a performance of Bach's St. Matthew's Passion on Good Friday.  Couple of good reasons for this.
  • In a religious practice that minimizes ostentation, choral music is THE most venerated art form.  It demonstrates a determination to learn how to do something very difficult as a group.  In fact just listening to a three-hour concert demonstrates endurance. 
  • Religions often ask their followers to believe the unbelievable.  But there is absolutely nothing about the Good Friday story that is in any way beyond belief—not the cruelty of Roman imperialism, not the craven behavior of political leaders, not the weasel betrayals of friends, not the ugly behavior of mobs, NOTHING!
Oh and one other thing.  The St. Matthew Passion is incredibly beautiful.  And even though I haven't participated in devout observances since I was 18, I still make it a point to find a good SMP and curl up with the score on Good Friday.  I am under the (probably mistaken) notion that this re-ups my Lute credentials for another year.   This year I'll be listening to a live recording of a Belgian group called Choeur de Chambre de Namur with the Children's choir 'Les Pastoureaux' (Waterloo).  I haven't found much about them online but they sound terrific.

I have included the following clips for anyone who doesn't know the SMP.  This first one is by the Malmo Chamber Choir.  It is done in the old-fashoned pace of a funeral dirge.  Almost everyone does this at a much faster tempo these days but there is so much going on (double choir, double orchestra, etc.), sometimes listening at this slower tempo lets the listeners enjoy the complexity.

"A republic. If you can keep it."

An oft-repeated story about the formation of the American republic was that soon after the Constitutional Convention concluded, a lady asked Benjamin Franklin, "Well, Doctor, what form of government will we have?"

Franklin replied, "A republic. If you can keep it."

Franklin's reply is full of portent for what we face today, as the working class lays shattered, the middle class is increasingly pressed, and American oligarchs deploy the full muscle of the "income defense industry" to maintain this status quo of disequilibrium.

Thursday, April 5, 2012

Ferdinand Porsche dies at 76

One of the rarest creatures in industrial history is the accomplished rich kid.  For example, Henry Ford's son Edsel was never trusted to do anything right (according to his father) so he found himself surrounded by company loyalists who saw to it that he couldn't do too much damage.

Porsche Museum Stuttgart-Zuffenhausen
But then there is Ferdinand "Butzi" Porsche—son of the auto giant Ferry Porsche.  As a young man he designed an automobile called the 911 in 1959, that went into production in 1963, and is still sold at your neighborhood Porsche dealership.  The cheapest 2012 will set you back $82k, but has 350 horsepower, goes 179 mph, and can accelerate from 0-60 in 4.6 seconds.  Virtually none of the 911 owners will ever even approach those speeds but just knowing that sort of performance is available seems to help many men through a nasty mid-life crises.

Now it is very likely that not one part from a 1963 911 would fit anywhere in a 2012 model.  Yet the basic design elements are so remarkably similar that both are instantly recognized as 911s by any sports car aficionado on the planet.  Butzi penned a great car—the Schwabians who actually built it over the years did the rest.

In 1970, I found myself at the plant gates of the Porschewerk in Stuttgart-Zuffenhausen hoping to see how the legendary 911 got screwed together.  No problem, I was informed, tours start every hour.  Tour guides are enthusiasts first—mine was from Sweden and spoke flawless English.  No question was too complex.  We saw everything from the stamping shops to the trim line.

1970 911
As the tour neared the end, several in our group left us.  They were the guys taking deliveries and climbed into their new cars for a shake-down cruise riding alongside a factory driver.  The rest of us went on to see the engine shops and when we came out, the test riders were returning.  The drivers were very methodical and businesslike with their clip boards—they probably did this 12 times a day.  The new owners, on the other hand, looked like they had ODed on adrenaline and one was white as a sheet.  It's one thing to want to own a very fast car—it's quite another to ride one at speed driven by someone who knows what he is doing.

I had been on automobile factory tours before.  I saw a Ford plant in St. Paul when I was in sixth grade that impressed me greatly.  I was especially wowed that two door sedans, station wagons, and much in between in a dozen colors came down from the second floor to mate with various chassis that sported small inline 6-cylinder engines all the way to monster V-8s—and these nearly infinite permutations all seemed to have someone that wanted one in just that unique way.

But Porsche was different.  The workpace wasn't SO frenetic and nearly all the workers had an open bottle of beer near their workstations.  They were quite aware we were watching them and actually seemed to enjoy the attention.  And I am certain the test drivers enjoyed scaring the hell out of the orthodontists from southern California who paid extra to have their 911S painted purple.  I thought a great deal about those Porsche factory workers when I first read Veblen's The Instinct of Workmanship because I had seen that instinct alive and well in an industrial setting.

Getting injected with a major dose of auto lust at 21 can be a dangerous thing—especially when that car stays in production your whole life.  But I have gotten over it.  A few years back, I sat in a 911 at the auto show and realized the lust had gone—my LS is PLENTY fast and it doesn't give me claustrophobia.  Even so, I still turn and look whenever a 911 goes by and the sound of one of those air-cooled flat sixes could still probably wake me from a deep sleep.  Great cars are magic that way.

One more thing.  As our tour guide pointed out, it's pronounced Pore-sha.  Two syllables.  I still wince when I hear people get it wrong.

The banksters work their magic

I watched The International the other day.  It is supposed to be about banksters and their nefarious plots.  And while the film has much to recommend it (the choice of architecture as locations and the way these buildings are used and photographed is beyond superb) the plot is pretty thin gruel.  The big problem is that to make the movie "interesting", the big bad banksters must become movie bad guys—gun toting thugs who order assassinations and buy crooked cops.  This thinking belongs in the same category of foolishness that believes bank robbers are like Bonnie and Clyde—not insiders with a computer hacker's abilities and mentality.  Because the power and wealth-snatching capabilities of the banksters are so much more sophisticated than can be enforced with a 9mm Glock, the villains in The International are just the petty crooks.  The real bad guys don't even make an appearance.

By FAR, the single greatest source of bankster power is cultural legitimacy.  They have a story about how banking actually works and even though this story is completely self-serving, they are sticking to it and make concerted efforts to ensure everyone else believes their narrative.  There are many elements to their story but the most interesting concerns fractional banking.  The bankers want us to believe that they joyfully take in the honest savings of the community and then lend that money at interest to promising individuals and enterprises—their take in this transaction is owed them because of their valuable service in "allocating capital."

But what really happens is that banks create the vast majority of the money they lend out of thin air using simple book-keeping maneuvers—they press a few buttons and money appears in your checking account.  They make the appropriate commands to their computer and you get a loan you may spend most of your working life paying back.  It is almost impossible to imagine a more unequal financial arrangement.  A small fraction of the community with control of the banks computers can corner the whole community's economic output.  It's no damn wonder the bankers want everyone to believe their fairy tales.

But just to show how widespread the belief in the banks-as-mangers-of-the-community's-capital story really is, we see a guy named Fullwiler over at Naked Capitalism just destroy Paul Krugman for sticking to the official bankster fairy-tale.  Krugman is the voice of "reason" at the New York Times.  Fullwiler is a professor at a small liberal arts college in Iowa.  He will never write for the New York Times because even though he is absolutely correct, he is an economic heretic making light of banking's most sacred cow.  A summary of the debate Krugman is losing badly can also be found here.

Wednesday, April 4, 2012

Transforming energy supplies

While I was writing Elegant Technology, I became absolutely convinced that building our way out of the energy trap created by our technological dependence on fossil fuels was by far the most logical course for humans to take.  I assumed that folks would understand the magnitude of the problem and conclude that we should all get to work and that all this new construction would propel the economy forward into a new period of prosperity.

Little did I know.  I grew up in a part of the world where running out of gas on a winter night could literally be a death sentence and so I could not comprehend that there were folks who would act on the large questions of the end of the Age of Petroleum as if it were perfectly sane to drive until the car sputtered and died along the side of the road.  While only a tiny handful of people will allow themselves to run out of gas in their cars, lots of folks seem blithely unconcerned or in complete denial about their societies running out of gas.

But even under ideal circumstances, getting along without liquid fuels with very high energy content seemed so difficult as to be nearly impossible.  Try to imagine a 747 flying on battery power and you get some idea how insanely difficult this becomes.  In the case of air transport, a fossil fuel free alternative is probably impossible in any meaningful sense of the term.  The closest real substitute would be electrically-powered high-speed rail (at least on routes over land.)

So 25 years later, we in USA are still stuck in denial about energy matters.  Our lifestyle is so tied to fossil fuels most of us cannot even imagine how we would live without them.  About the best we can do is try to become more energy efficient and even those efforts are pretty lame.  But other cultures ARE trying to cope with the end of the Age of Petroleum and discovering on a daily basis—this is REALLY hard.

Tuesday, April 3, 2012

Unemployment soars in the Eurozone

A bunch of widely-held beliefs are about how the economy works are about to get a major beating this spring.  Is a well-educated population necessary for prosperity?  Well, yes, but that doesn't mean countries won't spend a ton of money, crank out superbly trained scholars, and still find a whole generation of their young without meaningful employment.  Does voting change anything and don't countries with parliamentary democracies have more responsive governments?  Well, no, unless you consider the Greek Socialists a radical party (which it obviously isn't.)  Can't the Europeans organize better "direct actions" like general strikes and doesn't that mean governments respect and fear their citizens?  Well, no, because even prolonged riots changed nothing as shown in England and Greece.

No matter what else happens, a political movement runs on ideas and that is what is so pathetic about today's "left" and movements like #OWS.  They are lucky if they are even able to put their fingers on the real problems, and whatever solutions they propose are at least 98% process and only 2% substance (check out the video at this link).  In the meantime, the crazy ideas that created the mess in which we find ourselves lumber on like some truly ugly zombie.  We are even seeing people trying to resurrect those utterly discredited ideas of Marx.  No folks, the opposite of finance capitalism is NOT Marx.  And until one confronts the major calamity of the banksters, nothing will be fixed.

Monday, April 2, 2012

Getting smacked around with a stupid stick

Spring has come very early to Minnesota and Friday I found myself at a biker coffee house's outdoor space listening to bunch of over-caffienated males adjusting to sunshine and warm air six weeks ahead of schedule.  One guy rode up on a seriously nice Ducatti toting a four-day-old Nikon D-4 DSLR.  I'm not much into motorcycles but I am into cameras that capture great video so we spent time admiring his newest toy.

At one point, I noticed the conversation around us had turned to the high costs of college and I discovered camera guy was also a Harvard grad—the son of a Harvard professor.  Folks started quizzing him about whether he thought there was anything worth learning at $40,000+ a year.  No, he assured us, there probably is nothing worth knowing that costs that much money to learn but added, "You don't go to Harvard for what you learn—you go to meet people."  Considering the long line of publicly embarrassing megafools from William Kristol to W. Bush who got degrees there, it is probably a good thing folks don't go to Harvard to actually learn anything anymore.

Now maybe Harvard has never been anything but an expensive social club.  But as someone who grew up reading J. K. Galbraith, I know for a fact that there was once a time when the Harvard Yard crackled with intellectual energy and economic advice out of Cambridge actually made people's lives better.  So you must excuse me for believing that the Harvard of useless arrogant twerps is new.

Unfortunately, Harvard is not alone in its slide from primo educational institution to its current role as a dispenser of trained incapacity.  The whole country has been sliding downhill for at least 35 years.  I don't wish to sound like an old coot claiming the old days were better but when it comes to measurable intellectual performance, the old days WERE better.  The following story of the F-22 is an especially good example of how far we have fallen.  Keep in mind that the top USA fighter of WW II (the P-51) was designed and built in 102 days after the contract was signed and flew only 48 days later when the engine "finally" arrived.  The F-22 has been under construction for over 25 years, will cost $400 million per copy, and it still doesn't fly very well.

Sunday, April 1, 2012

Oh that awl bidnus

One of the things that turned Standard Oil into a colossus and John. D. Rockefeller into the world's first billionaire was his insight that "free-market" ideology simply did not apply to the oil business.  The upfront capital costs were too high, the lag between investment and payout was too long, and freewheeling competition would ensure that nobody made enough money to stay in business very long.  In fact as a devout Baptist, he believed that free-market competition was a SIN.

The facts on the ground would prove John D. correct.  And this has led to the irony that the primary power source for what came to be called The Second Industrial Revolution would never actually conform to the theoretical dreams of the free marketeers.  Oil would become a business run by cartels and price-fixing would become routine.  Standard Oil would become the target of outraged reformers and trust-busters.  Perhaps the ultimate irony is that Rockefeller's little pet project, the University of Chicago, would become a bastion of the free-marketeers.

All the marketeers' preaching cannot change the facts on the ground.  Finding oil is still a hideously expensive and risky crap shoot.  It takes a long time to materially affect the supply situation—a run-up of oil prices does not automatically mean more producing wells.  Cartels still exist to set a price floor above the costs of production.  Price changes DO lead to supply changes in some small way but it is a factor that comes in about 12th on a list that includes technological changes, political events, greed and war, and even dumb luck.

Giving the fools a free hand

Anyone who has had the unfortunate experience of participating in student government remembers the one main throbbing headache—that we never got to discuss anything remotely serious.  One of my "favorite" moments in high school was sitting through this insanely boring meeting where we held long debates conducted by the strictest interpretations of Roberts Rules of Order over how we were going to decorate the gym for some dance.  Of course, student government NEVER got to debate why we had to learn about British authors instead of Chinese or Russians ones, why so much time was given over to cheering for slow, short, white boys playing basketball, or why we had to learn the history of thugs with almost no relationships to our lives, etc.

College was no better.  We did get to discuss things like why student health should give out contraceptives to women for free, or whether coed dorms were a good idea.  But we NEVER talked about all the Cold War funding that had our best professors designing war crimes, or why only about 10 people out of 7,000 staff could bring themselves to publicly oppose the insanity of Vietnam. Etc!

Any hopes that I was going to get to vote on anything important were quickly dashed as an adult.  Politics had become absolutely narcissistic by the time I was old enough to vote.  I have dozens of examples but the most telling is that at one point, the DFL party took time out from its busy agenda of ignoring the crimes of for-profit medicine, the destruction of owner-operated agriculture, and the sell-out of the party of Farmers and Laborers to the scum of Wall Street, and an assortment of other life-and-death issues, so that they could pass a resolution declaring their state convention to be "fragrance free."  I flashed back to the momentous decision I had once participated in involving the color a crepe paper to be hung in a school gym and came to the conclusion that voting in USA had become permanently stuck in irrelevance.

Democracy means very little if you are never given the chance to vote on anything more important than scent-free political conventions.  Of course, I believe the most important subject is the state of the economy, and the most important economic question is who controls monetary policy.  A meaningful democracy would force the head of the Federal Reserve to get the job in an election.  Then HE could appoint the President.  Considering that the Presidency has been recently occupied by an Alzheimer's patient in Reagan and an utterly incurious buffoon in W., it's pretty obvious that office isn't allowed close to any important decisions anymore either.

And yes, I know that I am suggesting the slaying of perhaps the most sacred cow in all of finance capital's political herd—the completely self-serving notion that the central banks of the world should be "independent"—which means free of democratic controls.  Until conditions of the workplace and the rules of economics are regulated democratically, we are stuck in a situation where elections mean nothing and politics is little more than show business done by people who are terrible at it.