But here's the truth. I do not read Smith's Naked Capitalism because it doesn't help me write my blog. Smith writes about the crimes in the financial world and the failures of neoliberalism. Now I have considered neoliberalism an utter failure since the early 1980s and need no further convincing. I actually try to avoid the topic anymore (yeah I know, I still post about it) because it depresses the hell out of me that folks could EVER believe such absurd rubbish.
The crimes of Wall Street (and the rest of the moneychangers) pose a more complicated dilemma for me. While I will admit enjoying descriptions of the shadier characters of the world of finance (especially when written by Matt Taibbi) I find the distinction between legal and illegal in their world to be pretty meaningless. For example, during the 1980s, thousands of companies were destroyed by hostile takeovers. A bunch of Predators would show up with borrowed money to buy controlling shares of a company. Once in control, they would loot anything not nailed down such as the company nest egg set aside for future product development or the pension funds. They would then pay themselves huge "management fees" and put the firm into hopeless debt. The looted companies would barely last until the Predators got out of town with their ill-gotten gains. So companies that required a hundred years of hard work and the support of the community to be able to create a going concern were destroyed for the personal benefit of a few vandals. And this was all legal. In fact, one of those looters ran for president in 2012 and his sociopathic economic crimes were not mentioned in the overwhelming majority of the political coverage.
In fact, virtually ALL of the activities of the world of finance have been considered a sin by almost all religious groupings in history at one time or other. Outlaw everything condemned in the Bible and finance would shrink to 1/100th of its current size. The problem with writing about the crimes of finance is that it presumes there are activities in the world of finance that are legitimate. Very VERY few are.
Anyway, I want my blog to be about what can replace this love-of-money madness with something more productive. I want to write about how we adjust to the end of the age of fire and still survive—fire being a very useful and often necessary invention and all. I want to write about building a new world—and how to pay for all that construction. I want to recall the best thinking humanity has ever done on the economics of the common provision.
I don't want to write about neoliberalism or the crimes of finance unless it makes a bigger point. And this is why I don't link to Naked Capitalism.
However, I DID mention that blog and I DID call Yves Smith a bond trader last Sunday. This is the email I got:
On Aug 25, 2013, at 8:46 PM, Yves Smith wrote:A little stern but she had a point. So I correct the blog post and write:
I am not, nor have I ever been, a bond trader, nor have I ever been in the bond business.
It might behoove you to know something about a blog before you make statements about it.
On Aug 25, 2013, at 10:36 PM, Jonathan Larson wrote:I think I got ahead of myself—pulling out the Veblenian dichotomy between business and industry and all. But here's the deal—I wrote Smith was a bond trader from memory. I just wanted to know is she had ANY industrial, non-Leisure Class credentials. I was willing to admit I was wrong about her being a bond trader—I just did not want to be wrong about her lack of Producer Class cred (if she had any.)
Sorry
But have you ever actually made something for sale or engaged in ANY Producer Class activity?
You write like someone who dealt in some sort of securities.
So if it wasn't bonds, what was it?
On Aug 25, 2013, at 9:39 PM, Yves Smith wrote:Notice she ducks the question of whether she has any Producer Class cred. So I try again.
I never held any securities licenses and never worked on a trading desk or floor.
Anyone who sells to customers, be they retail or institutional, has to have at least a Series 7 license.
On Aug 25, 2013, at 10:57 PM, Jonathan Larson wrote:Turns out that not only does Smith have no Producer Class cred, she attempts to borrow some from relatives. But obviously she does not think such cred is terribly important because she then dismisses the possibility that our escape from fire will need Producer Class skills. This, in spite of the fact that the Leisure Class was clearly warned about climate change by James Hansen in 1988, and have had a multitude of opportunities to do something about it since then, they have accomplished nothing because in the end, climate change is most certainly NOT something that can be solved using Leisure Class methods.
Thanks for the clarification.
I have tried to change the post—while still keeping the meaning that while I thoroughly enjoy your anger at the Wall Street crooks, I certainly do not believe you are coming at the world like say, an engineer. And since engineers and their design skills are our only hope for solving a problem such as climate change, I want to report on what they do and how they think.
I have never noticed you have ever linked to my blog and I am pretty sure I have never linked to yours. We cover different stories. I do not feel a need to cover Wall Street and the FIRE businesses because they get covered all the time.
I am sorry if I came off as casually rude and uninformed. But I most certainly do not view the world as you do and I THINK our differences come from how we got our worldviews in the first place. I have never even walked into an investment office in my life and I am pretty sure that moneychangers will NOT solve any of the important problems we face—end of the age of petroleum, death of oceans, and the climate catastrophe, etc.
On Aug 25, 2013, at 10:07 PM, Yves Smith wrote:Well folks, I tried. I seriously doubt Smith will so much as acknowledge my existence ever again. And I seriously doubt if I will make so much as a minor dent in the legitimacy or audience for her blog. After all, folks really LIKE crime stories—much more than stories on the progress of microwave-assisted pyrolysis. But if the goal is building a sustainable future, my boring stories are much more likely to advance the art than those sexy stories of crime in finance. Just a thought.
I have engineers on both sides of my family. My father started up and ran paper mills.
And I must beg to differ with your premise. "Solving" climate change" is not an engineering problem.
Climate change is first and foremost a political problem.
On August 26, 2013 7:39:41 AM Jonathan Larson wrote:
Climate change is caused by too many people burning carbon. The ONLY way we can shut off all those billions of fires that are started each day is to provide other ways for folks to warm themselves, cook their food, and transport their goods, etc. If they don't have an alternative, folks will simply ignore whatever rules that say they must stop burning things.
Now IF you believe that a bunch of lawyers sitting in a fancy room can actually find a way to replace fire, I can understand why we disagree. Conferences in Durban and Copenhagen won't help either.
As far as I can understand it, politics is about as effective at addressing the problems caused by fire as prayer or drum circles—or Bill McKibben organizing marches on the White House.
Climate change is a physics problem. The only real solutions will come from folks who stayed awake during their physics classes. I have met almost NO politicians who stayed awake.
And no, being related to engineers is NOT the same as having a sound understanding of science.
Hello Jonathan, though I've been quiet lately, I've valued every posting you've done. This posting though unsettled me, and I've struggled to find words to share with you and Yves (as I value her writings too) to explain how I feel reading this.
ReplyDeleteFirst, let me say your explanation the other day as to why you do not follow her blog makes sense...it is a form of specialization for you both to focus on your own areas of interest and expertise; and you explained that clearly helping readers to gain the knowledge of how to use both your and Yves' writings to the best advantage.
But then the 'bond trader' issue unfortunately flared up and runs the risk of undermining this value by distracting readers from the better message.
In a world with better intellectual embrace (and this is my cry as I yearn for this world in my lifetime), a moderating voice would enter to calm the arena and refocus attention to the progressive voices you two both bring to society.
Maybe coincidentally, I found one this morning--
http://www.ianwelsh.net/the-intolerance-of-genius/
--as Ian calls for an understanding of the need for tolerance of genius.
As I pondered my response yesterday, I imagined you and Yves sitting separately in a European cafe when some hedge funder seated at a table between you would loudly spout off about how his fancy derivative scheme made so much money for the local economy that day.
And in my mind, you and Yves would both join the conversation to acquaint him with the lack of value derivatives are from your two different perspectives...and he would be quieted having his braggadocio die from a thousand cuts from both sides of the argument.
I find you and Yves both to be strong voices for progress beyond this 'financial economy uber alles' era the world has fallen into. We need Yves writing emphasis to shine lights on monetary/political problems and you shining lights on real economic investment alternatives.
You are both genius in your own rights that I hold dear and so I can tolerate the distraction to embrace the genius. Many thanks and best regards.
Thanks for this mike!
ReplyDeleteI didn't want to pick a fight with Yves either. MANY of my friends read her regularly. And for what she does, she is damn good at it.
But what really set me off was her claim that solutions to climate change are essentially political. This really chapped my butt. Take Germany, a country where climate change denialists are treated as dangerous loons, where the political will to do something about it stretches across all political parties, and they have passed legislation in abundance to encourage (fund) renewable energy. There is hardly anyone in this country that is concerned about climate change that wouldn't love such a political environment.
And yet, Germany is still FAR from being a zero-carbon-emissions society. Many of their most ambitious projects, Desertec, North Sea windpower, etc. are stalled. Consumers are quite concerned over the high electric bills for "green" electricity, etc. And why is this happening? Because even the Germans don't have all the answers in spite of working on the problems for over two decades. Hence my conclusion that even with good politics and the best of intentions, this is a problem that is a LONG way from being solved. Hence my further conclusion that anyone who thinks this is merely a political problem is ignoring the best evidence on the planet. Hence my conclusion that it boils down to whether the engineers can solve basic energy problems. And since energy is sort of subject #1 in Physics, I tend to think of climate change as essentially a physics problem.
So yes, I have issues with folks who tell me that climate change is a political problem. I try to be patient but there's a voice inside that makes me want to scream "Look at the facts! and Grow the F Up!" I also want to know exactly what legislation they would propose. Do they have some crazed notion that all they must do is outlaw or tax carbon emissions and everything will turn out all right? Seriously?
But keep reading Yves Smith if that makes you happy. She is excellent on covering the misdeeds of the financial community.
Let's discuss this a bit Jonathan. Again I suppose, since you post elegantly on it often and I've commented on this topic similarly on past postings. But today is a new day, things have changed a bit in the market/economy/world.
ReplyDeleteLet's guess why Yves would lean on political movement as the answer--
--the need for large scale change?
--the frustration with the lack of private/free market advancements without political greening regulations?
--the inside knowledge of financial capital co-opted or tied up in investing in dirty energy speculation?
And there is always the sheeple effect, where masses of people sit idle instead of progressively pursuing/demanding green energy initiatives even now with growing evidence of frakking gas/oil, nuclear, and coal not being energy solutions combined with staggering water and climate concerns mounting--
--so is she searching in hope for a political star to claim this as a plank on a political platform given the lack of private market solutions?
That is how I'd explain my feelings on green energy...maybe it mirrors hers. She has a blog to wage her campaign; but what any of us little folks do individually, and it will ever be enough until we somehow do it together.
Then, if I'd compare this to your comments above--you also are frustrated with the lack of movement in green energy, and seems unlike Yves you have given up on politics ever leading us into green energy. In that I'm with you, after the failures of Durban and Copenhagen and of course stagnant US politics I see no political leadership.
So, this leaves us hoping Germany solve green energy for us--
--but frankly I believe the Germans are being deliberately slowed down by special interests, including the financial capital markets strangling their attempts at raising the capital needed for their huge transmission line projects. Why--to extend the energy-based financial casino games and existing dirty energy investments (making money on hedges is easier than building success, which is the main problem with the financiers having too much money and control, they throttle progress in the name of their hedge).
Therefore, we are stopped in all major efforts; but we are not stopped from small efforts, efforts that do not require the major financial markets--that is individuals like your brother who go ahead and green their own homes.
Solar has never been more efficient and never been cheaper. People interested in engineering progress and sticking-it-to-the-man (and in this case the 'man' includes all kinds of Goldman-Sachs-like banks, oil companies, coal companies, Koch Bros, GE, both political parties, the local utilities, et al, worldwide) have rarely been given a clearer choice.
Go small and go it alone without waiting for some gov't tax break that ain't coming. Don't wait for Xcel or some future Minneapolis Muni power, go for it now; then if and when they decide to move, you as a customer have a true negotiating stance in the debate. Set up a community grid, set up your rental building, show the energy company you don't need them and they will take real notice instead of sending you puff pieces with your next bill.
People worry about the end of cheap energy when actually it is the beginning of the era of cheap energy, the energy of the sun! But only if they get fired up to do something about it. That's my two cents on this issue. And as for you and Yves, I imagine you two to be more on the same side of wanting green energy than not.
My problem these days is with what I call the Tea-Party Liberals. McKibben's "March on Washington" damn near killed me. I like his writing. I am glad he is devoting so much time and energy to the climate change issue. I am glad he is willing to get arrested (or at least watch beautiful women get arrested.) But to encourage folks to burn up some more fuel to come to DC to stand in the cold to hear speeches they could see much better on YouTube means that McKibben DOES NOT GET IT. If we are going to do anything meaningful about climate change, we must shut down as many fires as possible today, and figure out how to shut down more of them tomorrow. We must replace the most significant invention of human history. We must rebuild the civilizations that are here because of fire into ones that do not need fire.
DeleteThis is serious!!
It's a $100 to 500 TRILLION job and even that figure might be low. If the world of finance weren't so fucking stupid, they would see an opportunity in this beyond any dreams of avarice. But in face of such a necessary project, we are told by educated and highly literate people that the solution to everything is to think small. Of course, if we actually do that, we are doomed—and very soon. Even the Navy seems to get that time is short when the seas begin to rise.
But because this is a project for the Producing Classes, the Leisure Classes don't begin to understand it. So instead of actually dealing with our existential crises, we get distracted by trivialities. I have not had a serious conversation with a Liberal in 30 fucking years. They are not serious because they take pride in being technologically illiterate, historically illiterate, and are actually embarrassed if their minds can distinguish large from small or up from down. Tea-Party Liberals. You know, the folks who admit the climate is changing but believe the solution is to bring back clotheslines? (yes, Al Gore, I am looking at you!)
There are times when I believe my life as a liberal has been a mistake. Whenever the discussion of climate change comes up, those beliefs are usually reinforced.
The Chinese have a saying that a journey of a thousand miles begins with but a single step.
ReplyDeleteAmerica has expanded its leisure class every generation in its existence, to the point today where there are too few people able to act to solve their problems. The leisure attitude itself often makes them unable to face the existence of the problem, and even when acknowledged they can only talk about how someone else needs to solve the problem for them.
Some energy company, some techie corporation, some government action, some military scientists, some other country's engineers, some neighbors should use less energy, etc...and this leisurely approach exists across every political spectrum that people self-identify themselves to be.
America is truly ruled by the one party system--we are all in the Do-Nothing Party now.
I read recently that going back in time in America only in the year 1970 did the percentage of energy used productively exceed 50% (50.3% I believe it was in 1970) and the rest was wasted energy. Some day I'll be better at keeping track of sources so I can cite them, but the point I'm driving at is the same, which is that over 50% of energy is uselessly wasted and thus these fires are available to be snuffed out without impacting anyone's quality of life (or even clothes drying approach) other than changing our energy use habits/business processes to be more efficient.
This means the fires to focus green technology on are already cut in half. And existing solar technology already exists to start the green revolution, people could buy and install it today.
Action is needed. It should be like starting a run on a bank--a bank with millions of assets can closed by a line of 100 people taking out their savings in one day.
Same thing with kicking off the green revolution, you don't need $500 trillion today, you need enough people spending $10000 to cause the local energy companies to realize the market is speaking with their dollars and escaping the energy monopoly possibly forever, then they will step up or go bankrupt if they don't.
But all this is just talk until someone starts the populist movement. Back in the day, there was a guy who got fired up, printed up some leaflets and drove around the country speaking to every farmer and civic group that would let him in the door.
Back when we were kids, maybe those speeches were given and leaflets were dropped at universities.
Maybe now with the internet it just needs a YouTube video that goes viral? Something that can somehow reach into the souls of the leisurely and cause them to stop waiting for someone else to solve their problem for them...something with hot kittens maybe.
And you are correct...McKibbon became tangled up in the old Washington political scene instead of continuing his appeal to the masses. He (and many others like Gore et al) tried to cut corners--going on TV to talk to Moyers thinking that would reach people--and it does reach them, it makes them nod their head and shake it at the appropriate places in the discussion.
Then they turn off the TV happy to know the two Bills are there to save them; while they themselves can't be bothered to change anything in their leisurely life. Lemmings of leisure. LOL! Gallows humor.
God bless those Bills, and you too, and all those others who struggle so mightily to move the American people off their widening asses. God's work...and who knew how very tough it would be!
Here it is--
--for conservatives, this is the biggest business opportunity of our lifetime,
--for libertarians, this is the biggest opportunity to reduce the energy monopoly's control of us all,
--for liberals, this is the biggest environmental opportunity of possibly all human existence.
And yet no one wants to act upon it?
This goes beyond leisure and into full-on sloth. Is it an unspoken yearning for death? In the absence of logic or understanding, I'm unable to grasp any answer to explain our inability to act.
Nice discussion guys. The dispute is a little silly to me. I find great value in both blogs and the different perspectives each brings.
ReplyDeleteActually we do have a replacement for fire. It's called nuclear fission. And yes, the primary issues with it today *are* political, not technological. We have enough fissile materials, and have learned enough about how to safely handle them (and build technologically fail-safe facilities that don't require human intervention to be safe) that we could replace the majority of our current fossil fuel infrastructure fairly rapidly without any technological innovations beyond what we currently have. But politics keeps intervening. The fossil fuel lobby doesn't want to retire their 60-year-old coal powered power plants because they were paid off during the Eisenhower administration, the loony lefties whine that safe nukes are an oxymoron(despite having no understanding at all of things like, say, pebble bed reactors or single fluid fluoride molten salt reactors), and the politicians dither because there's no constituency. France is getting over 90% of their electricity from nuclear power plants so it's certainly possible where there is political will (as there was in France), but too many vested interests are too interested in their own profit at the expense of everybody else.
ReplyDeleteAs much as I like solar power as peaking power in sunbelt areas, and wind power as peaking power in windy areas, they aren't really suitable as baseband power. That whole energy density thing again. The laws of physics simply *are*. It takes a *lot* of energy to maintain industrial society, and the fact that you can run your household off a bank of solar panels and batteries is irrelevant to that. But people today have no idea how things are produced, and assume that running things like a semiconductor foundry uses no more energy than running a house. Erm, no. AMD saved GIGA-watt-hours on their foundry in Dresden by changing a few things that reduced energy usage by less than 5%. That foundry uses more energy per year than 50,000 houses. And to a certain extent *can't* be made more efficient -- it takes a certain amount of energy to melt silicon into wafers, it takes a certain amount of energy to move wafers through processing steps, and you can attempt to make the process more efficient but at a certain point you run into fundamental laws of physics. If you don't put enough energy into the silicon, it doesn't melt. If a wafer masses a certain amount it will take a given amount of energy to accelerate it to the next processing stage and then decelerate it to a stop there regardless of how low of a coefficient of friction your conveyor belt ends up having. Just physics. Not amenable to change.
But then, I'm an engineer, and I've run manufacturing operations before, so I have an idea what it takes. The vast majority of people today... not so much :(.
Nuclear Fission is the height of human folly. The world put our greatest engineering minds of 3+ generations to work, and created the greatest pollutant in the existence of mankind.
DeleteSixty years on, these greatest minds still have no plan for handling either nuclear accidents or 'normal' nuclear waste products other than encasement and prayer. Yet we are supposed to latch onto it as our great green hope. I am under-impressed. Pfffft, is the best summary I can offer you who value nuclear, who live on the nuclear fringe.
If mankind still needs to put engineers to work to solve the nuclear issues needed to make nuclear as our green energy option--requiring trillions in public (since the private sector relies on burying the problem) investment in research and infrastructure replacement (if a solution is ever even found)--Why instead wouldn't that engineering investment be placed in solar and wind and any of the dozens of emerging truly green technologies?
Nuclear is a proven loser...go to Fukishima or Chernobyl and learn why nuclear is dead.