Wednesday, October 31, 2012

Systemic causation

In the world of science and technology, the difference between acceptable and not acceptable can sometimes be measured in parts per billion or a few thousandths of an inch.  As a result, trained scientists tend to be very careful with their proclamations.  This caution tends to create uncertainty when there is little reason for it.  This is especially damaging when the world of politics intersects with science.  A scientist may be 99.9999% certain of his findings—a degree of confidence no politician can or has ever had about anything—yet because the scientist wants to be absolutely accurate, he comes across as having serious doubts in a political argument.

Here Lakoff steps into the fray to explain why a better understanding of the word "causation" may dramatically assist the public's understanding of the climate change phenomena.  This is good stuff and obviously necessary.

Hurricane Sandy—counting the costs

One of the many scandals of this fall's Presidential election is that the two major candidates had three debates lasting 270 minutes and the subject of climate change was not mentioned once.  Not even superficially.  Candy Crowley, one of the debate moderators, was asked how such a thing could happen and she claimed that she wanted to focus on the economy.  Candy baby, in 2012 we burned up 8.8 million acres from wildfires that destroyed hundreds of homes while the corn belt was scorched by an unprecedented drought.  And now New York is being slapped around by the second "storm of the century" in two years.  Kind of hard to imagine anything more relevant to the economy than climate change.

Well, at least they were forced to close the New York stock exchange so even the fools who think economics is only about markets are being forced to admit the new crazy climate reality.  But as you can see from these articles, the thinking is not exactly deep.  I mean, Bill McKibben is one of my favorite writers and he focuses on the damage that has been caused to the subway system.  But when he compares New York to an old growth forest, it becomes pretty clear that he doesn't really understand the function of design and maintenance of infrastructure.  And when insurance companies can only focus on the losses that will accrue to underwriters, it's really clear that no one of "importance" can even imagine the damage that has been done.

But hey, they will put a number on it.  Perhaps it will even be large enough to attract the attention of a dullard like Crowley.

Tuesday, October 30, 2012

Who is eating the higher food prices?

Sunday I went grocery shopping and paid less than $2 for a gallon of milk.  Most other prices were similarly reasonable and close to what I have paid for the last few years.  My point is that the high grain prices caused by last summer's drought are NOT showing up at the retail level.  At least not yet.  It's not for lack of trying.  If anyone raises their prices, all you have to do is wait a couple of weeks and they will have gone back down.  Yes, there is some successful stealth price rises such as reduced package sizes with the old prices, but the overwhelming reality is that nobody in the food industry has pricing power these days.

I don't see higher prices showing up at the local eateries either.  So the lesson seems to be that while someone is eating the higher food prices, it is the food processors, wholesalers, retailers and eateries who are suffering the major margin reductions.  Dairy farmers are obviously losing money.  And I have NO idea how most small restaurants are surviving these days.

Naming hurricanes

Gotta love this idea.  The very least we can do with the deniers of reality is shame them.  Attaching their names to catastrophes would be a fine start.

Monday, October 29, 2012

Austerity is so last month

Now that the damage has been done, we find some of the banking community waking up to the reality that austerity is very, VERY destructive to the ability of an individual or nation to service a debt.  And since performing loans are the only real assets moneylenders have, this is not a good thing.  Once upon a time, bankers actually believed the saying, "NEVER kill your customers!"  Ah! the good old days before the business was consumed by sociopathic greed.

Sunday, October 28, 2012

Wasting youth

This is so precious.  A generation of people has had their hopes dashed and their lives consigned to irrelevance.  But you know, the tragedy isn't real until someone attaches a number to it—it doesn't matter how superficial they might be.  Even so, 153 Billion Euros is a very large number, no matter how much has been left out.

Climate change (again)

If the effects of climate change are most noticeable the further you are from the ocean, the equator, and sea level, Bolivia which is a landlocked country whose capital LaPaz is over 4000 meters (13,300 feet) above sea level should be an ideal example.  It is.

Bolivia has taken it upon herself to warn the rest of us about the impending calamity.  Unfortunately, those who wish to deny climate change are pretty much impervious to evidence.

Saturday, October 27, 2012

Tony's Political Economy Round-up, October 27, 2012

In Neoliberalism Kills, Part One, letsgetitdone (Joe Firestone, who is Managing Director and CEO of the Knowledge Management Consortium International (KMCI), crunches the numbers to compare the Affordable Care Act (ACA or Obamacare), with Romney's plan, the Conyers-Kucinich Medicare for All bill (HR 676), and true universal coverage, to see how many lives of poor Americans our elites are willing to throw away.
The ACA saves hundreds of thousands of lives compared with the benchmark and Romney scenarios; but it still projects an additional 286,000 fatalities through 2022 under the ACA scenario, and a total of 427,000 fatalities from 2010 through 2022. This compares to nearly 800,000 under the Romney scenario and just over 700,000 for the no change benchmark. Certainly, the ACA is much better than the Benchmark or Romney alternatives, but it’s hard to avoid noting that the most striking comparison is between any of these three alternatives, and the Medicare for All alternative. Had that alternative been legislated in 2009 and implemented by January of 2010, we’d be looking at virtually no fatalities due to lack of insurance rather than 400,000 or 700,000, or 800,000.
Then he asks the important question: What Was the Justification for Accepting the Cost of Those Lives? 

Saturday toons 27 OCT 12

Friday, October 26, 2012

The Nordics don't want to bail out anyone

The money boys are doing something very dangerous—they are screwing with their legitimacy.  Now it's one thing for guys like me to question the legitimacy of the high priests of finance who turn paper and electronic information into symbols for wealth that virtually everyone agrees with, it's quite another thing entirely when these conversations migrate out into the general public.  And while it is tempting to describe bankers as these dim mediocrities who not only cannot design or manufacture light bulbs—they are hard-pressed to change one, their claims to Masters of the Universe status are justified simply because they get the rest of us to believe their magic / bullshit.  I consider this perhaps the most interesting sociological fact, ever.

But when you ask someone in Finland or Denmark to cosign for bad loans made by German and French banks made to Spain and Greece, you are seriously taxing the bullshit's ability to describe reality.  After all, why should some monetary information contained on computer chips be used to destroy living standards in Rovaniemi Finland?  And when folks are asked to accept something so fundamentally unjust, they begin to question the mechanisms that allow it to happen.  Now bankster bullshit is very powerful, but it will not stand up to much close inspection.  Because while the bullshit is powerful, it's still bullshit.  As the French nobility discovered in the 18th century, it's a very short ride from Master of the Universe to the guillotine.

We are about to discover if the banksters are smart enough to act in their own interests.  Because if they are, they will act to save their legitimacy—their single most important asset.  They will reverse their austerity agenda, they will clean up the raging corruption in their trading houses / casinos, they will radically restructure debt, and they will dramatically tone down their public presence.  If the banksters wish to survive, they will quietly restore the global economy to health.  And with abundant examples of how this can be done, there is absolute NO excuse for them not to do it.

Thursday, October 25, 2012

Food shortage update

We got a crop here in southeast Minnesota, but September was the driest ever recorded.  
Here a combine stirs up enough dust harvesting soybeans to create a fair imitation of 
ground fog.  Well, at least farmers spent almost nothing for crop drying.

Will USA really elect Gordon Gekko?

Gordon Gekko.  Fictional takeover bandit played by Michel Douglas in Oliver Stone's 1985 movie Wall Street.  In the movie's happy ending, Gekko goes to jail.  Of course, back in the 1980s, folks still went to jail for white collar crimes.  Now they complain if folks merely notice that their activities are extremely destructive.

Building a company that pays its workers a decent wage, that pays its taxes, and delivers a product that customers are happy to pay for—is usually the outcome of genius and the hard work of many, many actors.  It is actually a very rare event.  To destroy such a company so a few thieves can make some quick "profits" ranks as the most odious of economic crimes imaginable.  That those thieves can get away with such crimes is astonishing.  That someone who made his fortune engaging in such theft is now running for President claiming his criminal acts qualify him to run a nation is crazy.

Meet Mitt Gekko—an uber vandal who promises to do to the country what he did to the companies that once provided honest employment to thousands of workers.

Wednesday, October 24, 2012

The Predators are evil AND crazy

In some ways, it is slightly (and I mean slightly) comforting to know the we in USA do not hold a monopoly on people who genuinely hate science.  Of course, this is hardly new.  The Predators think nothing of stealing everything the Producers do, so why should we be so surprised when they demonstrate their demented ignorance by adding cruelty to their palette.  Legend has it that Ivan the Terrible blinded the architects of St. Basil's so they could never build anything more beautiful.  And then there was the Catholic Church that threatened Galileo with torture for the "sin" of observing the moons of Jupiter.

But this is truly insane.  Because of the absurd number of variables, predicting an earthquake to within the accuracy of a century would be an amazing accomplishment.  But the Predators cannot understand that reality and actually think that accuracy can be raised and refined by inflicting punishment.  This is Dark-Ages level of stupidity and was inflicted on working scientists by the Italian legal system—one of the "educated" subsets of the Predator Classes.

Canceling sovereign debt

Last summer I got into a depressing exchange.  The guy wanted to know what I would propose to deal with the massive national debt as he was certain this was the biggest problem facing the country.  He suggested cutting social security.

I explained that yes, we are certainly deep in debt.  We are in debt to the poisoned atmosphere, we are in debt to the depleted oil fields, we are debt to the soils that grow food, etc.  We have MANY real debts!  Then there are the "debts" we owe the electronic storage systems of banks.  Those are the debts the bankers and politicians talk about almost exclusively when they want to sound "responsible."  Yet these are the debts we could eliminate by pressing a few buttons.  Unfortunately, the debts caused by climate change or the end to the age of petroleum cannot be cancelled nearly so easily. But since those debts to storage systems are the only ones anyone can bring themselves to address, they get in the way of even addressing the real debts.  So the FIRST thing we need to do is push those damn buttons.

Because I have been thinking along these lines since at least the 1980s, I am not overly optimistic that we will see a global debt cancellation anytime soon.  But last week, we saw an "important" paper from the IMF (yes!) proposing just that.  The Greenback Party, the Non-Partisan League, The People's Party, etc. have been validated by an organization that has spent decades ruining the lives of billions of people with their austere structural adjustment dictates.

Tuesday, October 23, 2012

Iceland—the best response to 2008

Iceland took a quite different path in response to the financial meltdown of 2008.  For one thing, they actually threw some of their crooked bankers in jail.  But this was far from enough.  They realized that the financial catastrophe was partly the result of a systemic problem and set about to reform their society to prevent it from happening again.  So they decided to write a new constitution.  Even better, they used the tools of the Internet to enable real direct democracy.

Now Iceland has some advantages going into such an effort.  Not only does she have a nearly total literate population, but surprising numbers of her citizens are astonishing well-read.  She also has a 1000+ year democratic tradition.

Here's the story as written just before the vote on Saturday.

Status emulation in a good cause

Thorstein Veblen wrote that status emulation was a very powerful human motivation—second only to the survival instinct and sometimes not even in second place.  I remember when I read his description of folks being "well-dressed but ill clad" and thinking of some of the more extreme examples I had encountered while driving taxis during college.  On bitterly cold nights I would pick up women at places like Orchestra Hall who had on skimpy cocktail dresses and very expensive high-heeled shoes that were not exactly a good match for icy sidewalks.  Cast out in the elements, they probably had a life expectancy of less than five minutes but damn, they looked good.

It was observations like this that made me a lifelong fan of Veblen's.  Not only did he have deep insights into how humans made many of their economic choices, these insight were often extremely prescient.  I have often wondered what Veblen would say if could see what television advertising has done to status emulation.  But if status emulation can sell off-road trucklets to suburban housewives who will never even venture down strange alleys, I would imagine it can be used to sell PV panels.  And now we see that there are studies that show such outcomes can already be demonstrated.

Monday, October 22, 2012

Transaction tax

A lot of the damage done by finance to the real economy is simply a function of speed.  Bad things happen when you can move money around faster than factories and labor.  When I first became aware of this problem, I would make cracks like, "The problem with Wall Street is that they think long-term planning is deciding where to have tomorrow's lunch."  Since the real economy operates at times on a schedule that can stretch into decades, it is obvious that short-term thinking can severely damage long-term projects.

But now we have reduced the trading lag in the financial world to nano-seconds. Even Mark Cuban believes this is madness.  And virtually ALL this useless trading for trading's sake would disappear with a transaction tax.  If it only slows down trading, a transaction tax is worth putting into place.  Unfortunately, a handful of people are making big bucks from useless high-speed trading so a common-sense idea that would benefit virtually all of us becomes this huge political struggle with plenty of money to buy a large pile of corruption.

Sunday, October 21, 2012

Glass Steagall in Europe?

Glass-Steagall worked so well for so many years, folks who believe it a good idea tend to think of it in terms of one of those lightning-bolt moments when genius drifted down.  As an Institutionalist, I must disagree—we believe that good ideas spread between intellectual disciplines.  In this case, the intellectual godfather was ship design.  The idea is if somehow you get a hole in your hull, you have bulkheads and water-tight doors to seal off the damage so you can limp home.  Glass Steagall was simply a plan to keep disasters in one part of the economy from spreading to the whole thing.

I was especially pleased that Charles Ferguson brought up the ships-with-bulkheads example in "Inside Job."  Because since no one is coming up with a better plan for protecting the necessary parts of finance, Carter Glass's great idea will not go away.

The Predator Classes have a Mecca

I have a minor quibble with Petras' use of the term "parasite" and I am not completely convinced that London is all that much worse than New York, but calling what is happening in London a Crime Wave is completely accurate.

Carbon dioxide to fuels?

(h/t to kfathi, thanks)
Normally, I don't pay much attention to stories like this one.  The reason is that over a lifetime of being asked for technological recommendations, I have gotten VERY conservative because if something doesn't work, I am the one who gets blamed.  Hence my "Home Depot rule"—if you can't buy your parts at a regular retail outlet, it's probably too experimental to use on your home.

So here we have a perfect example of an experimental process.  Supposedly some Brits have figured out a way to extract CO2 from the atmosphere and convert it to a liquid fuel.  If the laws governing the conservation of energy mean anything, it will require at least as much energy to run this process as was released by burning the fuel in the first place.  And since atmospheric CO2 is very diffused, it will probably require MUCH more.  Of course, once you have manufactured this precious fuel, there is a mighty incentive to use it—at which point that CO2 goes back into the atmosphere.  So this process conserves no energy nor lowers atmospheric CO2.  So the question becomes, "What's the point?"

Not that we should worry about this much—the inventors claim that they will need 15 years to scale up this process to a refinery-sized operation.  Of course, these "tiny" intrusions of reality don't stop the headline writers at The Independent from claiming this is a "massive boost" in the fight against the energy crises.

Saturday, October 20, 2012

Flash-mobbing Beethoven

Watching the bankster / Predators destroying the great civilizations of Europe with no more motivation than greed and sadism, sometimes it easy to forget just how amazing those civilizations really are. This "flash mob" performing Beethoven on the the streets of Vienna was an excellent reminder for me.

Saturday toons 20 OCT 12

Friday, October 19, 2012

Proper ventilation of high-efficiency dwellings

This is the sort of article that is both enlightening and infuriating.  Of course it is a good idea to keep indoor CO2 levels low.  More evidence that this is true is welcome.  However, there is an assumption in this article that these higher levels of indoor CO2 are an unwelcome side effect of attempts to make a building more energy efficient (see bolded sentence below).

WRONG!  This is true only if you don't do it right.

In 1982, I was fortunate to attend a two-day seminar on Swedish homebuilding methods.  Their industry had been saddled with very ridged energy-efficiency standards following the Arab oil embargo of 1973-74 and now they had newly-developed technology to market.  For me, the most interesting presentation was on why buildings needed to breathe.

Keeping expensively warmed air indoors seemed like a no-brainer.  The idea was that you insulated the structure to minimize radiant heat losses and carefully sealed all joints to minimize infiltration losses.  But the Swedes soon found out that as infiltration losses got near zero, bad things started to happen. The most annoying one was that a dwelling containing bodies exhaling warm moist air created a pressure differential that nature would redress somehow.  So the closer you actually got to creating a weather-tight structure, the harder it was to stop all the leaks.  And when you did get a building down to say, one exchange per hour, the bad air inside would grow nasty molds and other things to make you sick and destroy the house.

The Swedish answer was to create an air exchange system that would equalize the indoor-outdoor air pressure while removing the air that grew molds, etc.  These air exchange systems were fairly complex and really only worked when integrated into the original building design.  But when they worked, the results were magnificent.

In 1996, I spent part of the winter in an exurb of Stockholm in a two year-old condo built by Skanska—one of Sweden's big construction firms.  The air exchange system was remarkable.  There were exhaust pickups in the bathrooms and laundry room, as well as over the stove.  The air-to-air heat exchanger was built into the range hood and was perfectly sized to be washed in the dishwasher.  The warmed outside air was distributed into the living room and bedrooms.  The system ran whenever the kitchen or bathrooms were in use.  The fan was very quiet.  Best of all, since the condo was sited on one of Stockholm's many arms of the sea, the warmed air from outside smelled faintly of the ocean.  It was wonderful—I have never felt so healthy in the winter before or since.

So the answer to the problems caused by CO2 buildup is the same as for all the other nasty things in stale indoor air—design the building to breathe and install first-rate equipment to make it happen.  You cannot make a truly energy-efficient dwelling without actively controlling the location and rates of infiltration anyway, so why not do it right?

Thursday, October 18, 2012

Even mining towns can re-invent themselves

If a beat-up old mining town like Katowice Poland can rebuild itself to be a model of sustainable operations, it is possible that there are solutions to many other nasty problems.  In some ways, these solutions are much easier to implement than say twenty years ago.  This is because humanity has learned what works.  In the bolded section below, we see that Katowice's rebuilders went shopping for good ideas in Sweden, Germany, and Switzerland.  The next group that wants to try something similar will now have Katowice to look at.

And so the sustainable world gets built one great idea at a time.  Now imagine what could happen if predatory criminal banksters could be replaced with community builders.

Wednesday, October 17, 2012

The Right Stuff

As a teenager, I loved the story of Yeager and company and their feats of derring-do in the skies over the high Mohave Desert.  The aerospace insiders are quite careful to pass around the credit for their various accomplishments (unlike the mass media that covers them) and by the 1960s when I caught up with the story, the focus had already shifted to rockets and space flight.  Even so, everyone seemed to love Yeager and on a regular basis, someone would recount his story.  "The Right Stuff" may have been about the Mercury 7 astronauts, but Wolfe would claim that Yeager had invented the stuff.

In some ways, however, breaking the sound barrier would prove to be almost irrelevant in the history of atmospheric flight.  Yes it was possible to go beyond the sound barrier and live, but the effort required so much energy that fighter planes could only fly supersonic for a few minutes before exhausting their fuel and the Concorde was so expensive to fly that even with government subsidies, there weren't enough rich folks to buy those premium tickets.

It turned out that the sound barrier did exist but mostly in an energy and economic sense.  And because the sound barrier is so real, the 1960s subsonic triumphs like the 747 would define the upper practical limit of flight, and the F-15 fighter like Yeager would fly on the 65th anniversary of breaking the sound barrier first flew in 1972.  This story of how aviation grew is the single greatest reason why I believe in the S-shaped growth curve.  From the Wright Brothers to the X-1 only took 44 years—to the 747 66 years.  But because of the economic sound barrier, very little has changed since then.  S-curve!

Whoring around on vacation

One of the more depressing things I can imagine is how European companies that have fine labor relationships and sterling environmental reputations at home become absolute pigs when they open operations in USA.  They claim they are merely complying with the laws of the land, but as this case demonstrates, they are willing to involve themselves with making the laws of the land.

In fact, they do in USA what that cannot do at home in much the same way guys go to whorehouses to get what they cannot get at home.  Nice knowing this country has been reduced to the status of a bunch of cheap whores in the eyes of foreign-based industry.  Of course, this situation has been made possible by the destruction of domestic labor standards made in the name of "competitiveness."

David Stockman on Predatory "capitalism"

David Stockman shares may things in common with Paul Ryan.  He was a rising Republican star from the USA midwest.  He was considered a serious numbers guy—so serious he was made director of Reagan's Office of Management and Budget.  It did not take him very long to realize that the vast majority of the people around Reagan were crooks.  But since they said many of the same things he passionately believed, he had a hard time grasping why the crooks didn't want the same outcomes he did.

Stockman grew up on a farm in Michigan.  19th century farmers invented Producer-Predator class analysis while Michigan industrialists like Henry Ford perfected the idea in the process of creating modern economic thinking.  One can only imagine how far advanced Stockman's thinking would have been if he had been exposed to Producer-Predator class analysis in his youth.  Instead, he was forced to re-invent the wheel.  So now in his 60s, he finally does understand why Mitt Romney is NOT an example of the Platonic ideal capitalism he holds in his head.

So he finally gets it—but it took him far too long and he still is missing subtle nuances. I'd give him at best a C+.  He's still blaming the wrong things like cheap money—see first boldface below.  But because he gets that Mitt Romney the thief does not possess the vision necessary to revive the USA economy—he's made a damn fine start.

Tuesday, October 16, 2012

Solar economics

Been having an interesting exchange with my bother over the response to the small reknown his net-zero house has generated.  The critics came out from under their rocks and he found himself trying to justify his investment in solar panels.  You can see some of the exchange here.  We also had a small gripefest about the problems of explaining a solar investment in an age where the only "legitimate" economic virtue is driving up a stock price.

I was explaining all this to a friend who has been to Germany and is thinking about putting solar panels on his roof.  He was quite interested in my brother's story and started quizzing me about the economics.  Now friend is a pretty committed environmentalist in a 60's worship-mother-earth sort of way.  But he also went to Harvard and was a Barron's newsletter subscriber when we first met.  He knows the difference between a put and a call—along with rest of the managing-your-trust-fund wisdom that you probably pick up by osmosis simply walking across the Harvard Yard.

By contrast, my brother is a real blue-collar hippie.  He owns a pusher motorhome and has long had state-of-the art TV—he had a satellite receiver when they were huge, cost thousands, and sat out in the yard.  He has owned some absurdly fast cars like a Pontiac GTO and a 350 LT1 Camaro.  He owns practically every imaginable power tool related to building construction or vehicle maintenance.  He would have think long and hard to name all the internal combustion engines he has owned.  Yet he is the one who has the solar-powered hot tub.  He's the guy with the net-zero house.  And he's the guy who has to explain why he spent $37,000 for solar panels.

So yesterday, I am scrambling to explain solar issues like feed-in tariffs to a Harvard man who wanted to know if my brother had calculated the missed opportunity to invest the $37k in something else.  It was at that moment that I understood why "educated" economics is so different from the considerations that informed my brother's decisions when creating a net-zero house.  Such as:
  • The payback time for the panels at today's energy prices is something like 14 years (and NO, I haven't asked if he included missed opportunity costs.)
  • $37k isn't the sort of number you even think of as an investment.  As my brother said, "My neighbor paid almost $50k for his last pickup."
  • Going to net zero is part of his retirement planning.  For a modest upfront investment, he is able to predict his energy costs until he dies.  In today's economy, there are damn few investments for old age so reliable and wise.
The point here is that solar economics makes good sense.  It just has different rules and a different vocabulary from conventional economic discourse.  We need to remember that when the dismal science tells us we cannot afford a sustainable future.  They are wrong because they have chosen to be the bean-counters from hell.

Or as my brother might say, "So I spent $37k on something I wanted.  So sue me."  He might also add that his net-zero house gives him credibility as an energy rater—an intangible but very real business asset. It also makes him look smart on the Internet—something good for the old ego.  Right there, his solar panels have a higher payoff than a Beemer.

I am toying with the idea that instead of calling myself an Institutionalist or an Evolutionary Economist—both descriptions almost guaranteed to draw blank stares anyway—I should call my collected economic assumptions "Solar-powered-hot-tub" economics.  I am still working on that.

Germans going solar

The main reason the Germans have built so much green energy infrastructure is that they have been willing to tinker with their energy market.  While folks are willing to go along with such a plan if it produces good results, that support quickly evaporates if the plan starts running into problems and the various actors start blaming each other.

Germany could easily be at the point where their green energy project could unravel.  They have installed a bunch of solar infrastructure in a part of the world that is usually cloudy and lies north of most of the USA.  So they created a situation where their economic assumptions were more optimistic than the physics would indicate.  And so long as they were willing to change the economic debate through subsidies, they decided to use this project to help restart economic activity in the former DDR.  So openings for criticism are there.

ALL big projects go through problems like this.  You get into the project for awhile.  The euphoria of planning and getting going has been forgotten.  Setbacks have been encountered.  If there is inventing necessary, you really don't know how long or expensive the project will be.  You can't remember the beginning and you cannot see the end.

This lost-in-the-middle dilemma makes even the most strong-willed want to give up.  But quitting is an unlikely outcome for the Germans because they have proven to be past masters at pushing through this stage in a project.  Besides, they already have so much invested in going solar it is unlikely they will back down now.

Typically, when folks get "stuck" like this, the best way keep going is to concentrate on the finished outcome.  They need some visionaries to explain that not only are there significant economic advantages to solving these problems, but the effort will create a world folks really want to live in.  This is not to say that this mega-project doesn't need some serious mid-course adjustments.  But ultimately, it must continues because there really is no alternative.  Failure in not an option.

Brazil fills in the corn supply

Not that this will bail out the dairy farmers or any of the other agricultural operations that got blasted by this year's drought, but it looks like the Brazilian crops will save the planet from an absolute food shortage.  In fact, USDA is talking about record corn supplies.  Which is probably a good thing because the USA corn belt is still experiencing serious drought conditions which is already threatening next year's crops.

Monday, October 15, 2012

And the Riksbank Prize goes to...

In the category of, "Are you kidding me?" we see the so-called Nobel Prize for economics has gone to a duo for expanding market thinking into areas like kidney donation and mate-finding.  In an era when primitive, right-wing economic thought has triggered the near-collapse of the global economy and sees rioter in the streets, the Riksbank Prize has been awarded to folks who think that their genius should be used to make more effective.

This sort of aggressive irrelevance is hardly new to dismal science.  After all, John Bates Clark made his whole career out of expanding his understanding of the theory of Marginal Utility into areas such as labor relations.  It's this sort of foolishness that allows the knuckle-draggers to pretend that they can do intellectual rigor too.  Unfortunately, we don't spend our time ridiculing Clark's memory as it so richly deserves but we actually have a economic prize named for him too.

Watching the glaciers melt

This is an incredible video about one of the more obvious effects of climate change.
James Balog, one of the world’s premier nature photographers, joins Bill Moyers to explain how “the earth is having a fever.” At tremendous risk to his own safety, Balog has been documenting the erosion of glaciers in Switzerland, Greenland, Iceland, and Alaska. Now he joins Bill to share his amazing photos, discoveries, and self-discoveries – including his transformation from climate change skeptic to true believer, and his mission to capture footage of these destructive environmental consequences before it’s too late. Balog’s soon-to-be-released film, Chasing Ice, is a breathtaking account of climate change in action.

“What made me a skeptic 30 years ago was that I didn’t have it in my head that it was possible that our species, homo sapiens, was capable of so profoundly altering the basic physics and chemistry of the planet,” Balog tells Bill. “And of course the revelation that we can alter the physics and chemistry so profoundly is something that has just emerged in the scientific community in the past ten or 15 years… It’s a really revolutionary idea.”

James Balog on Capturing our Disappearing Glaciers from on Vimeo.

More on the Peace Prize controversy

Even before the EU was announced as the winner of this year's Peace Prize, folks were leveling serious complaints at the Norwegian committee that awards it.  The critics have a point.  While it s true that humans have been waging war since forever, the efforts to stop this insane practice have been going on for a long time too.  Not surprisingly, the methods for slowing the warlike animus do not include giving prizes to bureaucracies dedicated to enriching the Predator Classes.

Sunday, October 14, 2012

Peace Prize to the E.U.

For a wide assortment of reasons, I have always considered the Nobel Peace Prize to be the most important.  The reason is simple—most of the arts of civilization are only advanced under conditions of peace.  Even exceptions like the massive advances in physics that resulted from the Manhattan Project during World War II occurred a long LONG way from the fighting.  Trust me, no one was doing advanced physics in Stalingrad between 23 AUG 1942 and 2 FEB 1943.  In fact, war usually destroys civilized life—it is estimated that the Thirty Years War (1618-1648) did so much damage to Germany she didn't recover for 150 years.

But ever since the Nobel committee gave their Peace Prize to Henry Kissinger, I have been amazed at the disconnect between Nobel's will and the folks who actually get the prize.  But recently, the committee has descended into cloud cuckoo land.  There was Al Gore who got one for his C- role as spokesman for the problem of climate change.  And then Barack Obama won for merely not being W. Bush.

This year, they have gone the extra mile—giving an award meant for a person to a bureaucracy that has recently stirred up such rage, folks in Greece are dressing up as freaking Nazis.  Damn Norskies have seriously devalued the Nobel Peace Prize.  This is unforgivable!

Saturday, October 13, 2012

Riksbank prize (Nobel) history

Or why an unknown Swede named Assar Lindbeck may be the most influential economist in modern history.  He's the guy who has steered the "Nobel" prize in economics to right-wing crackpots for decades—thereby giving legitimacy to the big names of neoliberalism.

I have been writing about this for some time.  See also

Saturday toons 13.10.12

Friday, October 12, 2012

Pure Predation—High Frequency Trading

In the movie The Sting, Newman and Redford run a scam on an oily gangster by getting him to bet on a horserace that has already been run.  They do this by delaying the ticker feed to their fake gambling parlor.  If this sounds a lot like the scam of high-frequency trading, it's because it IS a lot like high-frequency trading.

And like in The Sting, it's often fun to cheer for the HFT rogues because their marks are such bad guys.  This is a Predator-Predator fight so picking someone to cheer for must be based on something other than who is the bigger crook.  But HFT has the interesting side effect of further demolishing any claims for legitimacy the various stock exchanges may ever have had.  When you are selling a "service" as ephemeral as stock trading, legitimacy is a very important asset.  So when you have lost a guy like Mark Cuban, you have probably lost your legitimacy—an asset crooks never learn to properly value.

Binderup on Franklin and Money

Ignatius Donnelly, the man who wrote the foundation documents of the People's Party in 1892, was also the man who resurrected and popularized the tale of Atlantis.  Why would he do this?  Because the 19th century agrarian progressives were actually inventing a new economics.  This is almost like inventing a new religion.  At some point, you feel the need to demonstrate that you and your ideas have roots—that at some point in the past, folks who think like you ran a society and that society was much more wonderful than the current one.

Here we see a classic example of this kind of thinking.  The author is a Danish immigrant who washed up in William Jennings Bryan's Nebraska where progressive monetary theories were common.  Binderup does not resurrect Atlantis, he brings back Ben Franklin and his theories of paper money.  In the process, he introduces quotes that were heavily edited to appeal to a Twentieth-Century audience.

For us, it isn't all that important to create a mythical past.  We have a real past to reference.  The folks who organized the Great Prosperity took the agrarian monetary theorists seriously in spite of their doctored quotes and in so doing, created a body of evidence that demonstrates why the economics of the Progressive / Populists is so successful.

Anyway, this sort of thing is why people like me tend to claim Franklin as one of our intellectual forebears.

Thursday, October 11, 2012


On a breezy autumn afternoon, wind looks like such good idea.  I took these pictures yesterday (click to enlarge).  You can see from the middle picture how flattened the blades are—a sure sign the wind is blowing very hard.  These two wind turbines are owned by a small liberal arts college and because they provide a significant fraction of the school's energy needs, buying them was an easy decision.  By contrast, Germany's decision to replace the nukes with wind / solar is an enormous challenge—one that is encountering significant problems.

While we renewable fans want the Germans to pull this off, I intend to follow their problems closely.  No sense more than one culture should make the same mistakes.  This Spiegel article is very well written and includes info on grids and the problems of simply repowering wind turbines (the process of installing new, larger, and more powerful generators on known premium wind sites).

Wednesday, October 10, 2012

Oh those Lutes

I cannot describe how much I enjoy this story.  I have no problem understanding why folks are offended by the punk band Pussy Riot staging their protest in a cathedral.  Religious people invest a lot in their buildings and consider them sacred places.

On the other hand, there are many devout Christians who agree with the lyric, "The patriarch believes in Putin / Bastard, better believe in God."  Wittenberg is the place where Luther touched off the Protestant Reformation by nailing his religious "heresies" to a church door.  So when the good folks of Wittenberg nominated Pussy Riot for their (tiny) Luther Prize, they had sound historical basis for their act.

What we have here is a debate between the church ladies (of both sexes) who live to enforce the canons of proper behavior facing off against the folks who believe it is their duty to remind people that protest is the first two syllables of Protestant—and why that is important.

I spent the first 18 years of my life trying to please the church ladies.  So put me down on the side of the historians this time.  I think it a good thing to take on the symbolic behavior of the religious types once in a while.  Because as the Reformation demonstrates, sometimes offending them leads to historic progress.

Oh bliss, oh rapture

Ever wonder why economics is called the "dismal science"?  This little gem from the IMF should explain everything.  In a world where millions have no idea how they are going to survive the next three months, they issue a prediction that due to the damage caused by the financial geniuses, we can expect the current economic disaster to continue for six MORE years.  Those unemployed 26 year-old recent college grads who have $100,000 in student loans are probably overjoyed to read this.

Please remember, this catastrophe was absolutely NOT caused by a force of nature.  Humans caused these problems and humanity has vast experience coping with them.  This human misery is the result of CHOICES made by some phenomenally stupid or evil people.  The resulting pain is totally unnecessary!

Libertarians, Austrian economics, and the gold standard

One of the reasons I don't accept advertising at this site is because I am not certain how these blogads work and the LAST thing I want is having a bunch of gold bug newsletters and investment houses assigned to my blog.  After all, I am at least a fourth-generation opponent of the Gold Standard.

I am also adamantly opposed to so-called "Austrian economics."  After the fall of the Austro-Hungarian Empire following World War I, the lackeys of that lovely regime were suddenly thrown out of work.  The economists were almost comically right-wing and so they found employment at places like the University of Chicago and the London School of Economics.  Friedrich Hayek, who wrote an amazingly silly screed named The Road to Serfdom, is the most famous of the Austrians as a result of his Nobel Prize in 1974—but there were others.

Combine Austrian thinking with the Gold Standard and you pretty much have the economic philosophy of Ron Paul and his followers—who like to call themselves Libertarians.  So no matter how much I might agree with the Paulites on foreign or drug policy, I was never going to become a true believer because I object to almost every statement on economics he has ever made.

So today I discovered this little gem from the battles on the far right.  According to it, Paul is mostly just a stooge for some very ugly big-money boys from England.  I have no way of evaluating this post for accuracy, and quite honestly, I am not sure anything could be written about a gold bug that could possibly discredit him further in my eyes.  Even so, I found it interesting that some old English Imperial money is possibly behind some of the most backward ideas I can imagine.

Tuesday, October 9, 2012

Arctic melting WAY ahead of schedule

For those like me who has believed the science of climate change has been essentially settled since at least the 1980s, I sometimes get impatient that folks still feel the need to prove the point.  But because the denialists have questioned the science, the science keeps coming.  Not surprisingly, it's getting very sophisticated and mature.  11 miles (17.7 km) of core samples indeed.

One of these days

The banksters are going to run out of folks to bully.  It may happen in Spain.  And then who will pay for all those worthless derivatives?  No wonder the Spanish cops are being so brutal.

Yeah, we knew that

It should come as no surprise to anyone that all these "bailouts" of the southern European countries have nothing to do with the well being of the Greeks or Spaniards and everything to do with the health of the German bankers.  Or for that matter, that the privatization schemes designed to "save" Social Security have nothing to do with the care of the elderly and everything to do with giving the moneychangers another pile to play with.

Even so, it is a surprise when folks who stand to gain from these schemes actually come out and admit what they are doing.

Monday, October 8, 2012

Some of the noteworthy econ-finance news of late

Every week there are a number of articles and blogs I would like to comment on, but never do. Here are a few of the most noteworthy from the past two or three weeks.

A tip-o-the-hat to Jesse's Café Américain for posting Financial Fukushima: US Big Bank Derivative Bets Double in Six Years To $236 Trillion, based on a summary of the Sept 2012 report from the Bank for International Settlements, As Stirling Newberry commened about two years ago, all that the Obama administration has really accomplished is to get Wall Street willing to play with itself again.
According to the FDIC, at the end of June 2012 all depository institutions held derivatives with a notational value of $224,998 trillion. However, such bets are not spread across the entire banking system. Banks with at least $10 billion in assets hold virtually all derivatives, securities with a notational value of $224.803 trillion. While the FDIC insures deposits in some 7,200 banks and savings associations, only 59 FDIC-insured institutions have deposits of more than $10 billion. Your little community bank, savings association or credit union likely has no derivatives department.

Derivatives are simply bets. They finance no factories, no research, no colleges, no homes and no cars. Any jobs they produce are incidental and inconsequential relative to the potential risk they represent, the risk that credit exposure has been incorrectly figured by hundreds of billions of dollars if not more. Since big banks hold virtually all derivatives, and since taxpayers can face massive costs if big banks fail, it follows that something should be done to limit taxpayer risk....

Sunday, October 7, 2012

Bankers, repent!

When I first discovered the role of the state church in the history of Scandinavia, it literally staggered me.  My father was a small-town Lutheran preacher who was barely paid enough to feed his family.  He had no power in any meaningful sense.  So to imagine someone who was educated in the same way and believed largely the same things as he did being a well-paid member of a country's power structure was literally mind-boggling.  This rarely happened in USA to any clergyman—what with the legal separation between church and state and all. (It also explained why there are a couple of bishops in the back row of chess—closer to the king and queen than the military as represented by the knights and castles.)

Once I had discovered that state churches are dramatically different than self-organized North American houses of worship, I got interested enough in how they behave to have spent a tiny fraction of my life following the subject of state religions—especially the Protestant variety.  The role of the Church of Sweden in the evolution of their society is quite remarkable.  But no one comes close to the Church of England—which was the official moral voice of British Imperialism.  They have justified a wide assortment of crimes over the centuries.  But the empire is no more and so the state church has been reduced to debating the morality of homosexual clergy and other issues that church-goers in USA would quickly recognize.

But once in a while, the Church of England actually acts like its old self.  This time, however, they are not trying to relabel the Opium Wars as a fight for "free trade" or the plunder of India as a benign example of spreading Christian civilization.  They are actually calling on Bankers to repent.  Not that any of the bankers are lining up to repent, mind you.  But it is interesting that the enfeebled voice of the Church—the voice that spent 300+ years turning imperialism into a humanitarian exercise—has decided that bankers are sinners.  From any meaningful historical perspective, this is breath-taking.

Climate change music video

Debtor's revolt?

In theory, nothing should be easier to organize than a debtor's revolt.  How hard can it be to get people with way too little money to stop paying their creditors?  Turns out, it is damn hard—harder than organizing a slave or peasant revolt.  And why is that?  Because creditors will stop at nothing to collect.  They will corrupt governments and religions, and resort to violence from breaking thumbs to starting wars to get paid.

On the other hand, the claims of the creditors are now more nebulous than ever because their claim on your income is now based entirely on electronic credit information.  Much of the power of creditors is based on the perception that their claims are legitimate.  But as it stands, people are supposed to go hungry so the guys in the towers can rearrange the electrons in their computers.  When people understand this, much of creditor legitimacy is reduced to rubble.

If the world's debtors were to refuse to pay their bills for 90 days, the globe's financial system would collapse.  So in theory, the debtors hold ALL the cards.  The old saying that "if you owe the bank $100,000, you have a problem, but if you owe the bank $100,000,000, the bank has the problem" is now multiplied by dozens of times.

If for 90 days, the world's debtors stopped paying of their mortgages and credit cards, they would have all that extra money to spend in the local economy.  The resulting prosperity would prove, beyond any doubt, that the rules governing debt and credit could be rewritten to ensure a better outcome.

Saturday, October 6, 2012

Building the LFA

In the 1980s, read five different books on how Toyota approached the subject of quality control.  They were very impressive but after five books on the same subject, I figured I got it.  My two lasting impressions were:
  • Either you use Toyota's methods or your build quality will be second best.
  • Humans CAN build perfect things.
This last insight formed much of the emotional and intellectual underpinnings of Elegant Technology.  Because IF we really have figured out how to make perfect things, then the important question becomes, What do we make?

Whatever you think of Leno, he knows his cars.  And when he starts drooling over the LFA unskinned, it is the pure joy of being close to such insanely high levels of build excellence.  It's pretty impressive.

And while you watch this, remember that if we took the economy away from the banksters, we could have a solar-powered society with Lexus levels of build quality.  THIS is the real cost of not throwing the Jamie Dimons in jail.

Saturday toons 10.6.12

Friday, October 5, 2012

On the role of government...

One of the important questions Jim Lehrer asked President Obama and Rmoney Tuesday night was how they conceived the role of government. Rmoney answer was standard conservative swallop about individualism, big bad gubmint, blah, blah. Obama's answer was, to my mind, maddeningly half-hearted. Over on Facebook, Texas Christian University (of all places to find a good heterdox economist!) Professor of Economics John Harvey gets it exactly right:
Oh, jiminy, now the private sector vs. public sector crap. Different goals, different methods. The private sector does stuff that is profitable, much of which is of little social value (pornography, fashion, reality TV, sports, conspicuous consumption and pecuniary emulation of every variety, etc.), while the government does the stuff that is of social value but not profitable (national defense, health care, parks, libraries, education, etc.). Saying the private sector is more efficient because it earns profits is like saying that Peyton Manning is a better athlete than Babe Ruth because he scores more touchdowns. Babe Ruth isn't supposed to score touchdowns.
Another think about the debate Tuesday night: it should be noted that President Obama refused to defend Social Security. Via Facebook again, economist Mike Norman posted this Youtube video of a speech by President John F. Kennedy. It provides a stark contrast to the excruciatingly weak conception of the role of government provided by Barack Obama.

Tesla on solar power

Thursday, October 4, 2012

Explaining the sham(e) of the Presidential "debate"

I could not stomach watching the entire Presidential debate last night, so I might be wrong here as I walked out for about 15 or 20 minutes, but there was no discussion of rescuing our crippled political system from the horribly disfiguring effects of Citizens United. Doubtless, no one in power would agree, but for me the most important issue in the United States today is the erection of a new, corporatist and Wall Street centric oligarchy on the rotting ruin of republican self-government in the United States.

The crippling of republican self-government by this new oligarchy was starkly evident last night, in the stupefying discussion of job creation and tax policies in the first 20 or so minutes of the debate. First, there can never be any sort of real, sustainable economic recovery that benefits average Americans so long as the parasites of Wall Street and the Chicago futures pits are allowed to capture nearly a third or a half of all corporate profits. So the first order of public business must be to kill off the vampire squids. The stranglehold of usury and speculation on the economy must be broken. Period. No significant economic progress can be made until this is accomplished. How many attacks on the banksters, usurers and speculators did you see in the debate? Right – none.

The second sign of how this new corporatist, Wall Street centric oligarchy has smothered republican self-government was the complete absence of the idea of taxing financial market transactions. The dollar amount of trading in the stock, bond, futures, options, foreign exchange and other financial markets has gone from one and one half times gross domestic product in the 1960s, to over sixty times GDP now. That’s right, six zero. 60. This hyper-bloated amount of financial trading is a massive and crippling misuse of the credit and monetary mechanisms of society, and is the primary means by which the United States industrial economy has been not just deindustrialized, but de-capitalized as well.

So what’s more interesting than what was discussed, is what was not discussed. For example, no mention was made a guaranteed jobs program. Or even of a direct government role in creating jobs. We know that such programs can work: to stave off the spectre of widespread hunger and starvation in the winter of 1933-34, Franklin Roosevelt and Harry Hopkins created four million new jobs in just one month.

How can such issues, crucial to the survival of the United States as a self-governing republic, go through a Presidential debate entirely without mention?

George Farah, antitrust attorney at Cohen Milstein Sellers & Toll, and author of the book No Debate: How the Republican and Democratic Parties Secretly Control the Presidential Debates, explains to Amy Goodman on Democracy how large corporations such as Anheiser-Busch, funded the creation of the Commission on Presidential Debates in 1987, to seize control of the debates from the League of Women Voters, which had ignored the demand of President Jimmy Carter to exclude independent candidate John Anderson in 1980.  Under the auspices of the Commission on Presidential Debates, representatives of the Democratic Party and the Republican Party negotiate a multi-page contract for each debate, invariably excluding third party candidates, and the direct questioning of the candidates by each other, to avoid the mention of real issues our corporatist overlords do not want any public discussion of.

China, windpower, and conflict

By far the most important element of a successful wind turbine installation is locating it in a windy place.  But good site selection also means having a handy link to the power grid so the electricity generated has somewhere to go.  The rest, from mast construction to gear box, blade, and generator selection, is mostly just details.  In the case of what gets hoisted to the top of the mast, that decision can even be changed if newer, more efficient generators are designed.

Ultimately, in any green design scheme that includes wind-power, the fight over the "ownership" rights to the best wind sites is the only conflict worth having.  And guess what? The Obama administration has just decided to pick a fight with the Chinese over the rights to develop a prime wind site.  The excuse is "national security" although it might be a new form of protectionism.  After all, the ability to produce "green" electricity may be an argument over national sovereignty itself.  You can be sure the USA politicians of the 19th century would have seen it that way.

On Wall Street, where protectionism is an even dirtier word than inflation, the howls are predictable and loud.  Nothing so trivial as national security or even national sovereignty can be allow to stand in the way of the rights of the international investment community.  My guess we are going to see more of this as folks begin to understand the true value of the prime wind sites.

Wednesday, October 3, 2012

Presidential debate tonight

"If voting changed anything, they'd make it illegal"
Emma Goldmann

Tonight, the two major candidates for the now-largely ceremonial job of President will appear in a "debate" to air their microscopic differences in a forum moderated by perhaps the most irrelevant "journalist" in the land.

I won't be watching (though of course, I will read about it) because at my age, I no longer have the stomach for seeing grown men thoroughly embarrass themselves.  But I am interested enough to speculate on which topics of life and death importance won't even be covered.  I would love to be wrong and I will be the first to admit it if I am.

What won't get covered—my short list

Climate change, and how to respond.
Peak oil and planning for the end of the Age of Petroleum.
Protecting water supplies—saving the oceans.
Wall Street reform—prosecuting Wall Street crime.
Infrastructure deterioration and what must be done to repair / rebuild it.
Monetary reform and debt restructuring.

PV cells keep getting better

There are precious few reasons for optimism these days.  But one that stands out is that photovoltaic cell production keeps making significant improvements.  Not only are they becoming more affordable by the day, their performance keeps improving.  Here we see a story of how the Germans are closing in on the maximum theoretical efficiency for such devices.

Tuesday, October 2, 2012

The use of hyperinflation in economic debates

Anyone who has ever tangled with a well-educated German knows how formidable an opponent he or she can be.  But there IS one area where German intellectuals are notoriously weak—their own 20th century history.  They're not goofy-clueless like the typical Yank who doesn't know that the USSR had a significant role in defeating Hitler's armies.  But they do believe some really crazy things and foremost among them is that the hyperinflation of the Weimar Republic from 1921 to 1924 led to the rise of Hitler.

There are significant problems with this belief.  Most importantly, Hitler came to power in 1933 and the most pressing economic problem facing Germany of that day was not INflation but a nasty encounter with DEflation.  So in order to believe that hyperinflation produced Hitler, one must ignore the workings of the calendar and refuse to acknowledge the difference between up and down.

Monday, October 1, 2012

David Stockman shows how to avoid pointing fingers

Hat tip to Zero Hedge for featuring a thirty-three minute presentation by David Stockman denouncing the September 12 decision by the Federal Reserve’s Open Market Committee to begin a new round of “quantitative easing.” Fed chairman Ben Bernanke announced that the FOMC will buy $40 billion of mortgage-backed securities each and every month, until the employment rate begins to improve. That is really a staggering amount of one particular type of asset class for the Fed to be buying up. Stockman declares that this will being the final death blow to the capital markets and the financial system. I don’t quite agree with him, but I don’t disagree either. In my three decades of watching and writing on the financial manipulations that have come to dominate the economy, I have been repeatedly surprised by inventive and ingenious gimmicks and contortions the Masters of the Universe have pulled out of their butt-holes. Not to mention the unbelievable depths of denial American officials – and the American people – will plunge to in order to avoid admitting that American capitalism is seriously flawed.

Best idea in a long time

This is a great idea for a wide assortment of reasons.  The idea is to replicate a French study that seems to show that some GMO corn actually caused cancers in lab rats.  The twist here is that the whole study would be surrounded by webcams and put online.  So not only would the rest of us get to see how carefully scientific experiments must be run, the researchers must produce some very clean research or the whole world could see them cheating.

Of course, there are possible problems.  They could run out of funds before the experiments are completed.  The web presence could be hacked so there are gaps in the observations. Etc.  But generally speaking, the concept of doing real scientific research in front of the whole world has precious little downside.