50th Anniversary Reprint of The Tolerant Populists

Regular readers know by now that, 1) any correct definition of populism must include popular control of a society's economic and monetary affairs so that the common good is protected from the excesses of private gain, and 2) the oligarchs and banksters who usually control economic and monetary affairs desire to make populism as unattractive as possible by falsely portraying populists as ignorant, bigoted reactionaries vainly trying to stop the advance of industrial modernization.

The most influential smear of USA populism was Richard Hofstadter's 1955 book, The Age of Reform, which was given the ruling elites' imprimatur of a Pulitizer Prize. (Hoftstadter's best known work is his 1964 book, The Paranoid Style in American Politics.) Eight years after The Age of Reform was published, Walter Nugent tore it apart in his book, The Tolerant Populists: Kansas Populism and Nativism, written as a doctoral dissertation at the University of Chicago. Nugent's relentless rebuttal of a supposed classic by éminence grise Hofstadter was the opening shot in what has been called  “one of the bloodiest episodes in American historiography.” Late last year, a 50th anniversary edition of Nugent's book was released. Here is part of a review of Nugent's book:

The Danes turn Populist

Personal disclaimer: I have fond memories of Denmark.  It is the place where it first dawned on me that aesthetics was a critical element to any realistic understanding of economics.  Not only is beauty essential to any feeling of prosperity, the ability to create beautiful things is a damn good indicator of a superior social organization.  Denmark has beautiful little towns, cities, historical artifacts, street-scapes, furniture and the other details of life to go with stunningly beautiful people.  It took me several days to realize that I wasn't looking at some tourist attraction dolled up to impress the visitors, this was a real country with real people doing real work to make it through life.  The difference was, they had chosen to live beautiful lives and even better, had figured out how to do it.

Lots of lessons to be learned!  So I try to keep track of what the Danes are up to in their efforts to get really green and the social organizations that move their program forwards.  And so I was utterly delighted to see this account of the smashing victory of Danish People's Party.  Naturally, they have been labeled 'populist' by an establishment voice like The Guardian. (Note the condescension in the title.  Trust me, this story is about a LOT more than meatballs.)  But what is truly interesting is the DPP really is Populist and even more interesting is that they evolved through some of the same stages as the People's Party of 19th century USA.  As a self-appointed expert on USA Populism, I give the Danes at least a 9.5 for authenticity.

In the story below, I have boldfaced the sentiments that are so similar to the versions of Populism we had here in Minnesota, it is almost scary.  The most interesting similarity is that in both cases, these movements have produced a highly self-confident citizen who has well-thought-out positions and can explain them simply and effectively.

Populism and the EU elections

The EU just held an election for its parliament and the establishment (neoliberal) parties took a well-deserved beating.  Their mismanagement of Europe's economy is utterly insane and has been since the EU was formed by the Maastricht treaty when reactionary neoliberalism was made part of the founding documents.  After that, it wasn't a question of if, but when the moneychangers would destroy the Europe that had managed to rebuild itself from the wreckage of WW II.  The destruction was made mathematically certain because the banksters actually believed they could extract rents at exponential rates.  And that's before they became hopelessly corrupt.  Now their mad extraction appetites cannot be sated unless they engage in criminality.  If there is a honest banker in London, it would require an intensive search to find such a creature.

And so we see unemployment rates of up to 50% (Greece) and a lost generation of young people who have been thrown on the social scrapheap where they can contemplate their advanced degrees as coffee shop baristas—assuming they have any job at all.  Under such conditions, no one in their right minds would vote for the parties of neoliberalism.  Yet they still get the votes from anyone with an elite education.  I read some of the European press and I am quite surprised at the pure vitriol hurled at anyone who doubts the EU, the Euro, or Maastricht, Nice, etc. treaties.

And one of the more common slanders is to call someone or their party "populist."  This practice drives me crazy because Populism has a historical meaning based on the People's Party.  They left behind documents.  So it is quite easy to know what Populists believed.  And rarely do the people the elites call "populist" have any relationship to the real thing.

But I am changing my mind about the European elites who misuse "populism" so casually.  They are on to something because ONLY Populism, from the menu of historical choices, has the analytical critique and the problem-solving methods suitable for combatting banksterism.  So anyone who comes to believe that the banksters are the problem has sort of become, by definition, a Populist.  The elites know who their most dangerous enemy is.

Anyway, the following is an interesting critique of Europe's political classes and why they lost big in places like GB and France.  Since they are hired to defend the system that produces banksters, they will be instructed to do everything in their power to defame the Populists—real or imaginary.  The following suggests that isn't working so well any more.

Populism from the heart

There was a New Populism Conference last week that brought out some of the very few politicians who have any credentials to discuss the monumental failure of neoliberalism including Sherrod Brown and Elisabeth Warren.  All I can say after nearly 40 years of far-right economics is, "It's about time!"

The final chapter of Elegant Technology is devoted to Populism so I can say that this subject has been dear to my heart for a long time.  There is a reason for this.  I am of the opinion that the only possible way we can get ourselves out of the giant mess we find ourselves is to build a better world.  Populism was one of the better cultural manifestations of the builder's impulse.  At its best, Populism seeks to empower, ennoble, and reward the people who do the community's necessary work.

So while I am utterly delighted that some folks have taken it upon themselves to resurrect the Populist ideas, I was slightly disappointed the no one spoke for the builders we will need to create the sustainable society.  Eventually this must be done or the new Populists will be perceived as just another bunch of politicians.  So I have decided this job falls to me and that is what I intend to do for awhile.

First some highlights from the New Populism Conference and then one of my better introductions to the subject.  One other note: To those fancy intellectuals who have been taught that Populism is some dark force that must be shunned, pleased be informed that the Populism of the 1892 People's Party (the first people who called themselves Populists) was the highest flowering of USA democracy ever.  Citizens of USA who understand this historical Populism have absolutely ZERO reason to tolerate those who would defame the Populist impulse.

Beyond ignorant to crazy

The following post was sent to me by my brother.  It makes the argument that too many PV solar cells will eventually do long-term damage to the SUN!  This is an idea so preposterous that there is probably a good chance that someone is engineering a hoax to determine how goofy one's claim can be and still be believed by the denialist crowd.  The original has pictures of Ted Cruz and Sarah Palin who are, it is possible, the sort who could believe based on other beliefs they have espoused over the years.

Update: Turns out this really WAS a hoax.  That did not stop it from making the rounds (sigh).  Thanks coby for the heads-up!

This is the sort of crackpot thesis that raises the question anew, Can these people even count?  I mean, even though the sun is the source of virtually all energy on earth, only about one Billionth of the sun's output even reaches us.  And of that tiny fraction, it cannot possibly make any difference whatsoever if that energy goes to warm the oceans or grow the crops or tan a sunbather.  The very idea that the sun would behave differently if a PV cell rather than a box of geraniums were placed in the path of its radiation assumes the sun would know the difference.  Anthropomorphism has always been a little batty, but...

Unfortunately, crazy beliefs like the one espoused here actually have a following and there are those who claim it impolite to even laugh at such such folks.  But when the very survival of the species is at stake, ridicule seems like the minimum response.

Northern hemisphere CO2 tops 400 ppm in April

Remember when folks told us that we were essentially doomed if CO2 topped 350 ppm?  Well, those are beginning to seems like the good old days (even though that is just a few years ago.)

Actually, no one really knows what happens next but judging from the major droughts this spring, we can safely assume it isn't going to be good.  And since waiting around on a hilltop somewhere waiting for the world to end seems especially useless, there are actually only two course of action left open—figure out ways to stop pumping more CO2 into the atmosphere, and hardening the infrastructure so we can survive the oncoming nastier weather.  We will need to do both!

Sweden got Borged

One of the amazing "accomplishments" of the neoliberals is their ability to find obscure statistics to justify their madness.  They do it everywhere but the BS just seems deeper in Sweden.  There, the head neoliberal is a vain little twerp who is unfortunately the finance minister.  The guy's name is Borg and he has pretty much destroyed everything about the Swedish economy that was praiseworthy.  Naturally, he is a hero of neoliberal rags like the Economist.

One of the reasons a guy like Borg can get away with his nutso prescriptions is that Sweden has been one of the richest countries of the 20th century with an educated populace and a largely corruption-free government.  Someone can do serious damage to an economy like that and still produce some good numbers.  For a while.  But now it seems like the Swedes are wising up to the sham that is neoliberalism.  Too many folks remember what it was like when times were good.  So now the "Moderate" (right-wing) Party that brought Borg into the government is being blamed for the real distress being felt by most Swedes (no matter what the cooked statistics show.)  And over the weekend, the "Moderates" got slapped around by the voters in the EU elections.

As seen in the article below, the knives are out for Borg.  It was probably inevitable.  Sweden just has too many people who understand the real economy to be fooled by the charlatans forever.

Fracking the Monterey Shale

Regular readers of this blog know that I think fracking is one of the worst ideas in the history of energy policy.  (Type "fracking" into the search box at the top left of this page and see what I mean!)  Suddenly, otherwise sane people have decided that this expensive and environmentally insane method of temporarily extending the life of depleted oil fields is somehow going to lead to the triumphant return of USA as an energy giant that can throw around geopolitical muscle based on excess supplies of oil and gas.

As it turns out, I have missed some of the very flawed studies that have lead people to believe that fracking can accomplish FAR more than its status as a secondary recovery technique would suggest.  This latest example shows that someone decided that the Monterey Shale formation would yield 13.7 BILLION barrels if fracked.  Well, some cooler heads have prevailed and it now looks like Monterey will only yield 600 Million barrels using the technologies we have—a decrease of 96%.

One of the major side effects of fracking is that it can trigger earthquakes.  Fracking for only 600 Million barrels in a geologically unstable place like California seems dangerously stupid. But this alone will not prevent folks from pressing ahead with their schemes to find every last bubble of gas and oil—even if it means some of California's major population centers are leveled by earthquakes.  (sheesh)

Weekend toons

Apparently not even the Pentagon can study climate change

Amazing!  Utterly amazing!  Just last Tuesday, I created a post about how the USA military had discovered climate change and what a good thing that was and would be in the future.  Well, it seems the House Republicans heard the same story—only they were not nearly as excited about it as I was.  So today they voted to deny funding to the Pentagon for any activities that could be construed as planning for the effects of climate change.

I especially love the text of the amendment.

“None of the funds authorized to be appropriated or otherwise made available by this Act may be used to implement the U.S. Global Change Research Program National Climate Assessment, the Intergovernmental Panel on Climate Change’s Fifth Assessment Report, the United Nation’s Agenda 21 sustainable development plan, or the May 2013 Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order.”

The House Republicans seem to believe that the military cannot figure out that climate change is affecting their operations on its own.  This is a remarkable assumption considering, for example, the Navy (which floats on the oceans) simply must know what constitutes sea level if only to know where to put their docks.  Almost every navel installation on earth is a risk if seas begin to rise so they are the folks with the most expensive instruments to measure sea levels.  Telling the Pentagon not to look at the Intergovernmental Panel on Climate Change’s Fifth Assessment Report probably won't change a whole lot.  (thank goodness!)

Got two versions of this story here.  Both are excellent.  The one from RT is more informative but the one from Huffington Post, not surprisingly, understands the politics better.  Me, I am always shocked by such naked displays of aggressive ignorance.  To deny climate change is to deny something that is already happening.  And here's a newsflash to the House Republicans—climate change is NOT happening because the IPCC is writing about it.  All my life I have had a recurring nightmare where everything of value on the planet is destroyed by stupid.  After this vote, I'll probably have another one.

The spring drought situation in USA

Went out into the countryside today. Planting is in full swing in SE Minnesota. Because farm machinery is so large, a lot of planting gets done in a remarkably short period of time.  We have had a cool spring, and late because we had a significant snow pack to melt.  But not nearly as late as last year.  As indicated on the map below, we have plenty of water for now.  The rains must still come this summer but it looks like everything is off to a fine start.

California, on the other hand, is facing an agricultural catastrophe.  Their farming is already dependent on irrigation.  But it's been so dry, they don't have enough water to run the pumps.  Some crops take years to grow—if those dry up, production will not recover for a long time—even after the reservoirs are refilled.


All maps are 1600 x 1200 — click to embiggen
Link to University of Nebraska-Lincoln

Public banking for the 21st century

Easily the biggest frustration with the lack of meaningful action on climate change is that solving such a problem should certainly be within the abilities of the human race.  And why do we know that?  Because we only have to look at the accomplishments of our great-grandparents to understand that we are woefully underperforming.

Here's the deal.  We know what is causing the problem—too many fires.  We have a very good idea of how we could exist without those fires because we understand electricity very well.  But WAH! we cannot change over because it will take a bunch of effort and cost a great deal of money.  Since chronic unemployment is a major problem, that fact the something will require great effort seems like a good thing.  As for the supply of money, we have made it ridiculously easy to create as much money as we need.  The problem is we have ceded the power of money creation to private interests who have no greater goal than enriching themselves and enslaving others.  To call modern bankers thieves with a slumlord's mentality is actually more flattering than it should be.

The options to seize the real economy back from such destructive fools are two:

1. Regulate the hell out of them, or
2. Create a public alternative.

Our pal Ellen Brown is quite convinced the public banks are the answer.  She has a point.  The Bank of North Dakota has been in business since 1917 and has a sterling track record.  She has fought the good fight but has not yet succeeded in getting anyone else to organize a public bank in their state.  The biggest problem she faces is that today's political activists are not nearly as imaginative or effective as they were back in 1917.

The higher education racket

One of the most politically correct points of view among those in the Democratic Party (DFL) here in Minnesota is that the cure for everything is more education.  Part of this stems from the fact that teachers and their unions are easily the most organized faction of the party.  But it is more than that—folks truly BELIEVE that the most certain route to a prosperous society is better schools.

Of course, this belief in the virtue of education is based on facts.  It is quite impossible to run a complex society without engineers, skilled builders, doctors, scientists, etc.  These people require long periods of intensive study to gain the skills necessary to design water treatment systems or operating rooms, etc.  When it comes to supplying the talent to organize the community's necessary tasks, the only reasonable questions address not if, but how to organize the institutes of training and who should pay for them.

But somewhere along the line, education became a much bigger topic than how to effectively organize the community's work.  It became to route to higher self and social esteem.  You spent time and effort learning something with no practical purpose other than to make you feel better about yourself.  As someone who actually took a course in Chaucer in college, I have first-hand knowledge of what an utter waste much of what passes for education really is.  Not only was this a waste of my finite time and money, but it was actually part of a big evil lie.  This obscure 14th century writer was taught in schools because it was necessary to portray the Brits as a civilized people of long-standing and not the plunderers who organized easily the greatest evil of all time—imperialism—and that the obscene war that consumed so much of my time in college was being fought in part because Winston Churchill had assured Robert Strange McNamara that it was our solemn duty to take up the fight in Indochina the French had abandoned.

Not all the Leisure Class nonsense taught in our finest colleges is harmful, in and of itself.  A knowledge of 19th-century French poetry probably makes you a better person if only because learning about other cultures is a worthwhile expenditure of brain power.  The problem comes when this sort of learning starts putting students into debt.  There is nothing you could ever teach a 19-year-old that is worth being exposed to a lifetime of debt peonage.  NOTHING!

But shed few tears for the students caught in the the con jobs of the $60,000 / year liberal arts colleges.  These people should probably know better.  The more serious problem is when retraining and other education scams are used to cover up the failures of neoliberal economics.  I know one quite successful construction supervisor whose job prospects disappeared in the wake on the financial meltdown of 2007-8.  So he retrained to become a LEED consultant-inspector and got certified in every category the LEED folks offered.  He equipped himself to do thorough inspections at a cost of nearly $30,000.  He spent a bunch of money marketing his services—website, logos, joining professional organizations.  Nothing worked—he still could not scare up enough business to pay the bills, much less provide for an income.  Finally he did some serious checking and discovered that LEED had certified over 2500 inspectors in a territory that could, at best, support 15.

LEED portrays itself as one of the good guys.  It is the public face of the US Green Building Council, an organization with many laudable goals and motives.  But what they did to that former construction supervisor is just criminal.  And because the one thing that is no longer taught in the most of our august colleges—the known failures of neoliberalism—education has spun off into a wretched world where ruining the lives of children has become the final organizing principle of what is truly a beautiful impulse.  The desire to educate our children SHOULD be an unvarnished virtue.  It no longer even resembles that.

Climate change science gets some powerful support

The climate change deniers have some big, generous sponsors—most notably the fossil fuels industries and some of their crazier owners / CEOs like the Koch brothers.  And goodness knows, they HAVE screwed up the public debate on climate change.  But in truth, the public debate doesn't matter all that much.  For one thing, climate change is a scientific fact and really doesn't matter one bit what people think about those facts.  Those who actually stayed awake during their science classes will probably understand how climate change works and why it is important to address it.  Those who slept through class won't.

But since most meaningful solutions to this massive problem involve changing how we do very important things like grow our food and heat our homes, these solutions can only come from the efforts of people who understand how things are already done and then make serious suggestions as to how to improve them.  People who cannot build a house will probably have very few helpful suggestions as to how that house should be made differently so that it uses less energy. ETC!  Oh sure, legislation that demands homes use less energy can always be passed and enforcement mechanisms can be put into place to punish offenders who do not build those better houses, but these are of absolutely no use unless methods for building those better homes have been invented and perfected.  ONLY people with skills can get better at something—which is why climate change conferences, marches, consciousness raising, and the other forms of human futility have accomplished almost nothing for over a generation.

On the other hand, people with skills, training, motivation, and resources can make a significant difference.  Someone (or in this case, a large collection of someones) was able to reduce the price of solar cells from $75 / watt to $0.75 / watt.  Someone actually got wind turbines to work.  Considering how utterly pathetic the resources devoted to actual problem-solving have been, these are remarkable accomplishments.

So it interesting to see that some very large actors have entered the climate change debate.  The insurance industry has been at least talking a good line for a couple of decades now.  They haven't used their clout to change the economic assumptions of their business models, mind you, but they are a LONG way from being the Koch brothers.  But the most interesting newcomer, by far, is the USA military.  Considering that they have been arguably the biggest environmental bandits of all time (they have demanded the production of so many dangerous toxins it is rare to find any long-term military operation that is not a superfund site), this IS a big change.

It is fun to speculate on what exactly made the military wake up to the climate change ramifications of their mission, but my vote goes towards the moment when they realized their gas-guzzling weapons systems required fuels that cost $400 / gallon delivered in Afghanistan.  And we can probably bet that the number of folks in the military who actually get it is still quite small.  Even so, it looks like there are small groups who have been officially assigned to the problem.

This is an enormous development.  Not only can folks with guns get their way more often than not, but the military excels at squeezing funds from the government.  Part of those funds go to hiring the elites of the Producing Classes.  One of the interesting arguments made in the 1980s was that Japanese cars were getting better than cars made in USA because the US auto industry had to compete for engineering talent with the military-industrial-complex and the Japanese did not.  The MIC has monopolized the A-pool of technological talent for so long here in USA, hardly anyone alive can remember when this was not considered normal.  What this means is that if the military decides climate change is a serious problem, they have the organizational skills to muster talent and resources into creating solutions that actually work.  Of course, anyone who has watched the debacle that is the F-35 may not consider military technological expertise all that helpful.  But even with that obvious example, it is still far more likely that a motivated MIC will produce more real-world solutions than the PoliSci profs, community organizers, and well-intentioned environmentalists, etc. that attend climate change conferences.

The New Populism conference on May 22, 2014

Populism is probably the most misused political term extant.  But it really does have an actual meaning because it is a term that people applied to themselves as the result of the founding of the Peoples Party in 1891-2.  The 1892 convention adopted a platform that is short and easy to read so there is primary evidence as to what the Populists believed.  Unfortunately, none of this evidence is enough to keep lazy writers, politicians, and academics from applying the term "populism" to almost any political position taken by folks who they perceive as ignorant and uneducated.  This sloppiness is especially acute in Europe.

Fortunately, here in USA, there ARE people who know what the Populists historically believed, who use the term correctly, and understand just how important that political party was.  And because the People's Party of 1892 addressed many of the same political problems that have infected and corrupted today's political parties, you will still see important politicians proudly calling themselves Populists.  And so on May 22, 2014, The Campaign for America's Future is holding an all day New Populism Conference which will feature Massachusetts Senator Elizabeth Warren as the keynote speaker.

As someone who has made the history of agrarian political political movements a serious avocation, I am tempted to be a little critical about anyone who describes themselves as populist who isn't a real farmer.  But of course, that is absurd because farmers now comprise one of the smallest occupational categories in the country and there are plenty of non-farmers who have been excellent Populists over the years.  (My descriptions of Populism can be found at this link.)  This current effort looks like a damn good approximation of the original movement so I will withhold judgement until I see the results.  In the meantime, here are a couple of excellent essays by RJ Eskow and David Johnson explaining why Populism is still one of history's better political ideas.

Is Putin learning economics from Lincoln?

One of the very few good things to come from warfare is that occasionally, wartime economics proves wrong the prevailing economic conventional wisdom.  For example, the idea that balancing the federal budget is so important to many, even the presence of starving people during a depression is not enough to override their principles of fiscal "responsibility."  So when Roosevelt tried some mild stimulus measures between 1933-36 that raised the national debt, the balanced-budget types were so horrified and raised such a stink that he cut short the stimulus which triggered a nasty downturn in 1937 that was embedded inside the bigger Great Depression.  It was not until the much bigger spending stimulus of World War II that the Great Depression finally ended.  It took a war to finally overcome the objections of the fiscal conservatives.

But Roosevelt's experiments in what would be called Keynesian stimulus were quite mild compared to the huge deviations from the convention wisdom undertaken by Lincoln.  When Wall Street informed Lincoln that he must pay 14% for loans to fight the Civil War, Lincoln responded with his plan to roll the presses and issue debt-free Greenbacks.  The Greenback was such a smashing success that when they were cancelled in 1873, the country responded in outrage which included the formation of the Greenback Party whose essential aim was to bring them back.

Lincoln was also a huge believer in the idea that import substitution was essential to building a nation.  At one point, he was faced with a decision as to whether it would be better to import cheaper steel rails from England or buy more expensive steel from the fledgling steel industry appearing in places like western Pennsylvania.  He responded with the argument that if we bought British steel, we would have the steel but the money would be gone.  However, if we bought steel made in USA, even it was more expensive, we would would not only have the steel but the nation would still have the money in circulation.  Not only that, but spending money for domestic production meant we would get better at making steel so that eventually, our steel would become as inexpensive as the imports.

Anyway, Russia has recently realized that having parts of their military hardware made in the Ukraine is not a good idea if matters deteriorate further.  So Putin has decreed that all the parts necessary for the Russian defense industry should be made in Russia.  In the process, he is going to discover why Lincoln's economic thinking was so important, his face still appears on the money.  And if he watches closely, he will soon see that import substitution is a good idea not only for the weapons industry, but for MANY other parts of his economy.  What Russia needs these days is a modern incarnation of Peter Cooper—the inventor / philanthropist who so strongly opposed the Gold Standard, he became the presidential nominee of the Greenback Party in 1876.

Can these people even count?

Innumeracy is a common disorder here in USA.  This causes all sorts of serious problems.  The biggest is probably the inability to judge whether a number is big or small (or in between) whenever politicians or newscasters start citing statistics.  Right behind is that people have a difficult time matching the size of a problem with a proposed solution.  Climate Change is an enormous problem and yet politicians are only brave enough to propose $billion attempts at a solution.  It's like trying to put out a forest fire with a squirt gun.

This means that such nickel and dime solutions are coming from folks who have ZERO concept of scale.  As far as I am concerned, don't tell me you are concerned about climate change and then propose to fix it on the cheap.  You're just embarrassing yourself.

The Antarctic ice sheets are melting.  Time grows short.  And if the merchants of debt keep us from raising the funds necessary to address this impending calamity, it's time to replace them with folks who understand that the first job of the economy is to insure the survival of the folks who are participants.  This means our economy must be organized to provide large financial resources that are scaled to the problem.  This means leadership that can at least count.  But if we want leaders who know how to count, we must have voters who are numerate.  Teaching people to count may have become a revolutionary idea.

Alstom update—France vs financial plunder

The very idea that some entity should be allowed to swoop in and seize the assets of a company using borrowed money and other forms of financial maneuver is reason #1 why finance capitalism is always a catastrophe.  This form of economic thinking is the main difference between business and industry, between Predators and Producers, between the Leisure and Industrial Classes.

Highlighting these differences is the reason why I wrote Elegant Technology and why I work so hard to produce this blog.  The idea that a few moneychanging vandals should be able to steal and destroy the work of thousands is so repellant, it is something worth starting violent revolutions to prevent.

In the case of Alstom, their ownership interests extend not only to the geniuses who have allowed the company to make insanely difficult things, but also to the French taxpayers who have supported and paid for these efforts over the years.  Certainly, any patriotic Frenchman should feel personally assaulted to see such a national treasure fall into the hands of some well-dressed thieves.

So it is with great delight that I see there are still a few patriotic French who understand the issues and have moved to use government authority to prevent the plunder of Alstom.  Apparently, the main economic patriot is named Arnoud Montebourg and if he does indeed save Alstom for France, they should cast a bronze statue of him and find an appropriate spot for it along the Avenue des Champs-Élysées.

The climate has already changed

Last night, there was a hockey game at the Staples Center in Los Angeles.  The teams involved (Kings and Ducks) are both from Southern California and have home arenas less than 30 miles (50km) from each other.  That California has two teams playing in the second round of the Stanley Cup finals is remarkable in and of itself.  But what was really amazing was the condition of the ice.  It might not have been as fast as an ice sheet in Winnipeg in January but there were no problems with soft spots or anything else to remind the onlooker that it was 105°F (40°C) outside at game time.  This pretty much encapsulated all anyone needed to know about climate change and what passes for a response in USA.  L.A. didn't used to have such blazing heat in May but even so, the Staples Center was built with enough cooling to handle such heat when it opened in 1999.

And no, I don't even want to do the calculations for how much electricity it must take to play a cold-weather sport in SoCal in May.

So now we see that the U.S. Global Change Research Program has a new report out that says climate change isn't something in the future but has already arrived.  Well DUH!  The question is, "Will this country (and the rest of the industrialized world) do anything more significant about the problem than crank up the AC?"

What do you think?

Increasing wind power efficiency with better forecasting and AI

Sailing is incredibly fun but one sail sticks in my mind because it was also not so fun.  We had been out getting blown around the water by 15-20 knot winds feeling the surge of power being generated by some large sails.  Sailing gives you a real sense of accomplishment.  There is nothing quite like the feeling of understanding the wind and adjusting your machinery so that you go where you want.  That feeling of being in harmony with some major forces of nature is reason #1 why sailing is still a popular sport long after it ceased to be an important way to move goods around.

As the sun went down along with the wind, we started up a longish channel against a mild current.  We turned on the engine and started the process of lowering the sails.  The day had been incredible but everyone was tired, slightly sunburned, and dehydrated.  Suddenly, after only ten minutes, the engine died.  After many attempts at a restart, it became clear that if we wanted to get home that night, we were going to have to sail up a narrow channel on a very dark night.  We made it but it took until 0300 and required about 60 tacks made incredibly difficult because the breeze was so light.  Sailing the sport had become sailing the hard work.  By the time we tied up, I completely understood why humanity gave up sails as soon as powerplants became reliable.

Living in a state where windpower makes a lot of sense, I celebrate any time I see another wind turbine going up.  But I understand that actually powering a society with wind is going to require innovative thinking, great organization, and a lot of hard work.  Well, it seems like some of the people who are trying to make windpower a serious source of energy have produced a way to make it a whole lot more reliable.  Using advanced forecasting techniques and some truly innovative artificial intelligence, they have shown the way to allow wind and solar to become as much as 40% of the supply.

A profession of the utterly shameless—remembering Rogoff and Reinhart

“Trickle-down theory - the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.” J. Kenneth Galbraith

There are essentially two reasons to study economics.  The virtuous reason is that one is fascinated by a complicated world and sees economics as a good method towards understanding this complexity.  My favorite incarnation of this sort of economic thinking was Thorstein Veblen.  A close second was Galbraith.  Not only did he devote his incredible genius towards understanding how the world works, he could be incredibly funny doing it (see above).  Of course, trying to make sense of incredibly complex subjects is the hobby of geniuses—and geniuses are not all that common.  The rest of the economics profession is made up of folks who have no higher ambition than to be hired by the Wolves of Wall Street, or at least invited to all their good parties.  They're the folks who argue that hookers and blow have higher marginal utility than a comprehensive understanding of the world anyway.

It has already been a year since the dynamic duo of Rogoff and Reinhart were exposed as frauds.  To absolutely no one's surprise, they have suffered nothing for their academic sins.  They were lying in the service of the empire, after all. But imagine the nightmare if one of those two frauds was your teacher.  Of course, it wouldn't actually be a nightmare if your goal was to become a fraud yourself.  But if you goal was a better understanding of how the economy really works, listening to one of those clowns prattle on would be enough to bring on tears of frustration.

Amazingly enough, there is a budding revolt among economics students who are hoping to get more out of life than getting invited to the good parties.  Youthful idealism is still one of the great impulses of humanity.  They don't want to be part of a shameless profession.  I wish them well.

The Germans are in the streets again

One of the things that has impressed me over the years is that in Germany, even the right-wing pro-business parties have an outstanding track record supporting renewable energy.  But unfortunately, neoliberal policy dictates that nothing should be spent on something so necessary and practical as windpower or solar cells when that money could go to buy off the banksters.  Eventually, even the Germans would feel compelled to cave in to such madness.  You could smell it in the air.

So now the CDU / SDP in their grand coalition has decided that the big push for renewables should be scaled back.  And Germany, which has led the way on these issues because so much could be accomplished through conventional political means, is now seeing concerned citizens taking to the streets again.  And when folks take to the street hoping to compel their leaders to do the right thing, the betting odds tilt heavily in favor of those with official titles and well paying jobs doing the wrong thing.

This is NOT good news.  It means that the infinite greed of the Leisure Classes is reasserting itself.

The battle for Alstom

There is one major reason Alstom can make 300 mph trains and you and I cannot—institutional memory.  It is the collective knowledge gained through millions of experiments—both successful and otherwise.  Institutional memory is EASILY the most valuable thing a Producer Class operation like Alstom can possibly have.

Yet when the Predators come calling to secure an ownership position in such a company, the institutional memory is treated like it is worthless.  The takeover artists will gladly shut down operations that took three generations to build, fire key personnel with incredibly valuable and specialized skills, and break up integrated operations that took years to make operate smoothly—all for some quick profits.  The merger guys are literally destroying billions worth of investment.  And while a company like Alstom is privately held so this mindless destruction is probably technically legal, the important investments came courtesy of the French taxpayers who will get nothing save another example of national decline.

Here in USA, taxpayers helped pay to create a hero company named General Electric.  The things GE could build utterly boggled the imagination.  Yet this giant was crippled by a bunch of Wall Street thugs led by a mindless Predator named Jack Welch.  When he was done, mighty GE had been reduced to being little more than a hedge fund.  So now they have the expertise to loot a company like Alstom.

Hollande, the Socialist President, seems unlikely to do anything meaningful to stop the plunder of Alstom.  Why would he?  As a proud member of the Leisure Class, he has absolutely no way to place a value on one of France's crown jewels.  While he would never allow a mere hedge fund to make off with the Mona Lisa, he is standing mute while a hedge fund plots to steal something a million times more valuable.

The reason I am concerned about the plunder of a French company is simple.  Going green will be insanely difficult.  We simply cannot destroy companies that make building the insanely difficult look routine.  Even more important, Alstom is especially good at building something that will be critical to any effort to reduce the carbon footprint of the advanced societies—they make sophisticated electric trains.  This one does 357 mph. (Youtube of this record run) (Stats for the V150)

A new Populism? Robert Reich thinks it's time

Populism has fascinated me for most of my adult life.  Part of this is due to the fact that Minnesota was, along with Texas and Kansas, one of the main intellectual homes of the the Populist impulse.  As a result, I have heard Populist principles my whole life—even though I did not know they had that name until I was in my 20s.  But my main attachment to Populism comes from the fact that it was a political movement invented by the Producing Classes (mostly farmers).  Whenever it gets really cold here in Minnesota, I can easily imagine what it must have been like for those pioneers trapped in their tiny houses out on the prairie trying to imagine a politics that actually served their interests.  And the politics they invented is still more relevant today than any of the alternatives.

The problem these days is that because the Predator Class enemies love to trash populism as a political movement of the ignorant unwashed, it becomes a generic epithet hurled at anyone that the Leisure Classes find distasteful.  This is especially true of the European press and academia.  My best example came when in a conversation with me, a Nordic intellectual called former French President Sarkozy a populist.  Trying to imagine that little twit at the Omaha Convention about gave me a brain aneurism.  Occasionally, however, the Europeans get it right.  For example, Hungary's Viktor Orban is called a populist and he actually has a real Populist economic agenda.

So now we see that Robert Reich, the little neoliberal stooge that Clinton had as Labor Secretary, is now pushing Populism.  Hard to imagine him at the Omaha Convention either.  But the fact that he has embraced Populism in his old age speaks volumes about the enduring appeal of those ideas dreamed up by destitute farmers struggling to survive some of the planet's harshest conditions.

And for those who are confused by the hundreds of bogus descriptions of Populism concocted by the enemies of the Producing classes, there is Lawrence Goodwyn's magnificent The Populist Moment: A Short History of the Agrarian Revolt in America.  Last February, Tony wrote a moving tribute to Goodwyn following his death the previous September.  Well worth reading again.

$2 trillion per year solution

Whenever I suggest that a serious effort to convert the world to renewable energy will cost in the neighborhood of $100 trillion, the reaction is usually one of real anger.  The folks who are struggling to convince the general public that climate change is real (why?) view someone like me as a menace.  Their attitude is nothing will ever get done if the only real solutions are so expensive.  So of course, I should shut up and stop scaring the unwashed.

The IEA claimed in 2008 that replacing 50% of the energy provided by fire would cost $45 trillion so my estimate is hardly crazy.  I came up with the $2 trillion for 50 years (=$100 trillion) in 1987 and that number looks better all the time.  Now, according to the IMF (!!) we are already spending in the neighborhood of $2 trillion annually subsidizing the fossil fuel business.  So it is quite clear that we CAN afford the conversion.

The time really HAS come for the 50-easy-ways-to-save-the-world types to step aside and let the grownups with real skills go to work.  We have wasted WAY too much time already.

That trade deficit

Perhaps, the easiest way to determine if you are holding a conversation with a Producer or Predator is to ask for an opinion on the merchandise trade deficit vs. the federal budget deficit.  Predators are all worried about the budget deficit because the laws and conventions surrounding debt are literally a matter of life and death to them.  If people suddenly realized that the Predator ability to change government policy based on debt arrangements was based on how computer chips are programmed and instructed, their 'power' would be exposed.  This, by the way, was precisely the point that Frank Baum was trying to make in the Wizard of Oz (the book) when he wrote "pay no attention to the man behind the curtain."  The reason we always hear about the government debt is that so long as most people treat it as something real and important, the people who control the money flows are the most powerful people on earth.

On the other hand, the merchandise trade numbers are a real indication of how well a country's Producers are doing.  The basis of nearly all Producer Class understanding is the idea that a society prospers when it produces nearly all the goods and services it needs to operate—but IF there is something they cannot produce for themselves, they should be so good at something (or many things) that they have something to trade with those who clearly produce a superior good or service they need.  There once, not so long ago, was a whole body of economic thinking that believed the clearest road to prosperity for any nation was import substitution.

When Predator Class economics came roaring back in the 1970s, one of the first things to disappear was an official concern for the trade deficit.  Suddenly it just didn't matter in all the important organs of public opinion.  Of course, it still mattered very much to the real economy.  The biggest factor that caused the trade deficit to rage out of control was our need to import oil.  And unlike importing a capital good like improved machine tools that would allow us to produce something superior for sale, oil was just burned.  So oil became this perpetual hole in the trade balance.  Occasionally we would try to rebalance the accounts by selling off the nation's prime real estate and the crown jewels of the industrial infrastructure.

But the Predators had a point.  For the USA, the trade deficit really did NOT matter—at least to the people who 'mattered'.  Why?  Because oil was priced in dollars, we could just "print" more money (reprogram the chips) to cover any shortfall.  So the message to the citizens of the land was: "In the global economy, your sole purpose is to buy stuff.  Making things is for the lower orders and foreigners."  This was comforting to the Leisure Classes in Washington and Wall Street.  It was a disaster for the people who actually made things as a means of survival.

Unfortunately, becoming a society of mere consumers is highly destructive.  People who only shop are missing important lessons in how the world actually works.  The Leisure Class is wrong about a very important fact—it is NOT good to be useless.

Dien Bien Phu plus sixty years

Perhaps the most important date in many a male boomer's life happened 60 years ago today.  In an act of incredible determination, the revolutionary army of Vietnam was able to defeat the French colonial army in obscure town called Dien Bien Phu.  This victory was so astonishing that most of the "Western" geopolitical thinkers simply could not believe or accept that such a thing was possible.  So it became the result of Chinese troublemaking (in spite of the fact that the Chinese and Vietnamese have been enemies for centuries.)  Or it was merely a symptom of French decline (partly true but way less important than General Vo Nguyen Giap's military genius.)

Unfortunately for USA, there were crazy folks who thought that the old world order of colonial exploitation could be restored with a bigger dose of militarism from the mighty nation that had "saved the world" during World War II.  What is especially ironic is that USA became a nation as the result of an anti-colonial revolt and yet was now taking upon itself the organized theft that made colonialism so attractive to those who insist on living off the work of others.  The Dulles brothers, a couple of Wall Street thugs, had become Eisenhower's Secretary of State and CIA Director.  There were others who wanted USA to avenge the white man's embarrassment of Dien Bien Phu, of course, but the Dulles brothers were able to organize this historically insane war from the very top.

The USA was still fighting Giap in 1975 when the last of the USA's puppet governments collapsed in chaos.  And for most of those 21 years, the possibility one could be coerced into participate in this madness hung over the male population of the nation.  But our existential dread was insignificant compared to the pain inflicted on those Vietnamese who still believed colonialism was an evil worth resisting. The USA had butchered millions and literally poisoned the earth doing so.  But in the end, nothing could trump the reality that USA had somewhere else to go and the Vietnamese did not.  As Gandhi told the Brits, "In the end you will have to go home."

The USA never really recovered from this insane attempt to assault our own history.  The overwhelming majority wanted nothing to do with colonialism so those who did were forced to become expensive liars.  Democracy only works with an informed citizenry.  A country run by liars simply cannot have a functioning democracy.  And in the sixty years since USA's Predator Classes refused to believe some little "gooks" had soundly defeated the French, we have have been lied to so often that we will believe almost anything.  People with expensive educations are as pathetically ignorant as the people of the Dark Ages.  Senators from Oklahoma maintain that climate change is a hoax as their state bakes in 97°F heat on a May 6.  The downward spiral is almost out of control.  Turns out massive lying has consequences.

Danish trailblazing with renewables

Regular readers of this blog know that I am very impressed by the organization and skills the Danes demonstrate in trying to build a society powered by renewables.  An example from December 2012 is typical of my posts on this subject.  It was about a Brit who travels to NW Denmark and discovers these clever folks getting on with solving problems.  There is a gee-whiz tone to the whole thing that is sweet if slightly condescending—just look at those surprising Danes go.  The following, on the other hand, is written from a German perspective and takes the POV of a peer trying to solve the same problems.

It CAN be argued that the Germans have accomplished more than anyone in their efforts to power their society with renewables.  So when they look at Denmark to see what can be learned, this says much about what the Danes have already accomplished.  And while not everyone can mimic the Danish efforts, most of the industrialized world certainly can.

Making sense of the Piketty craze

It is hard to understand how a difficult 700-page book, written for an audience of professional economists using their specialized language, can become a best-seller.  It is probably a safe assumption that the VAST majority of these books will never be read.  Of course, almost nobody actually read Marx's Capital or Keynes' General Theory and they became incredibly important so the question really should be, is this one of those economic treatises of substance?

I don't happen to think it is.  But my opinion isn't so very important here.  What is important is that guys like Paul Krugman think it is big deal.  And as nearly as I can tell, Krugman is a booster because this is a book about a subject (economic inequality) that zoomed to the front of everyone's concerns in part because of the 'Occupy' movements.  It is a subject mainstream economists have systematically ignored for over a generation yet here is Piketty using the language and methods of the profession making a bid to put inequality back into the mainstream debate.  Krugman should be excited.

Once the subject of inequality gets back onto the list of appropriate economic topics, folks will soon discover that there is over 3000 years of thinking about this intersection of envy and greed—much of it a lot better than Piketty's analysis.  So it is not surprising that others who have written on inequality are beginning to fill in those serious analytic holes in Capital in the 21st Century.  First up is Michael Hudson reminding us that Piketty leaves out financialization of the economy and the fraud that went with it as a primary cause of the massive current inequality.  Then we have James Howard Kunstler reminding us that the mega-fortunes of the last 100 years are a function of cheap oil—a commodity that only exists anymore in the fading memories of the aging boomers.  Piketty left a LOT of gaps.

Which is fine IF he put the study of inequality back into the economics profession.  We will soon see if he has.

The "economics" of thieves

The events in eastern Ukraine have actually shocked me.  The names of the cities and towns involved ring out like the tolling of a funeral bell.  The fights over the cities of Donbas were the most vicious and intense of any the struggles of World War II save Stalingrad and Kursk.  These are people who truly understand what it took to defeat the great armies of fascism.  And now the fascists are back—only now they are in the service of the freaking IMF.

It is very difficult to understand the pure evil on display here.  I mean, it is easy to dismiss IMF as this gang of bunglers who run around wrecking economies because they are too stupid to know better.  Even more astonishing is the fact that the vast army of faceless bureaucrats who go to work every day at IMF actually believe that they are doing the works of the gods.  Yet if one starts toting up the victims of this seemingly benign arm of finance capital it starts to look like IMF may in fact be the most evil organization in the history of the human race.

In USA where pure historical illiteracy is the norm, the organs of propaganda have somehow managed to convince the ignorati the anyone who would possibly stand up to such evil are in fact the bad guys.  Putin is demonized while Victoria Nuland is portrayed as this fuzzy cookie monster spreading "democracy."  The job of the paid liars is made infinitely easier because an 'Merikun, by definition, believes that we are the country that destroyed fascism in the 1940s—so how could the people of Donbas possibly understand our pure motives and heroic deeds?

And so people who should know better have joined the ugly mob that wants to see those "separatists" crushed at their little blockades made of old tires and massive amounts of bravery.  Unfortunately, we are about to see just what lengths the thieves out to steal the Donbas are willing to go.  We might also get a demonstration of why it was there where Hitler finally lost WW II.  Not that anyone in USA will hear about and understand the raw courage of the people of Donetsk and Kharkov, mind you.  I mean, why start now?

Neoliberalism and the tragedy in Ukraine

The chaos in Ukraine is almost totally the fault of the USA and its crazy economic ideas.  When the Soviet Union collapsed in 1991, we rushed in with some "elite" help to "restructure" their economy.  Unlike the 1940s when American expertise showed up in post-war Japan and Germany with actual help, the neoliberals who went to Russia subscribed to the same economic madness that had turned USA from a towering industrial power into the rust belt.  What they brought Russia (and Ukraine) was not only deindustrialization but the other manifestations of Predator Class economics such as financialization, debt, and rampant corruption.  USA taxpayers actually funded this advice from hell.  The Harvard Institute for International Development (HIID) got the main contract.  It was so corrupt it was shut down in 2000 by a thoroughly embarrassed Harvard.

Unfortunately, neoliberal corruption did more than shame Harvard—it lead to the early deaths of millions of citizens of the former Soviet Union.  Putin stopped the downward spiral in Russia but nothing has arrested the plunging fortunes in Ukraine.  Of course, Russia's stabilized economy has more to do with $100+ / barrel for oil than anything Putin has pulled off.  There's still WAY too much corruption in Russia.  Without oil, Russia would probably be at least as miserable as Ukraine.  But the difference is so stark, the folks in Crimea voted at 95% levels to get out of the economic nightmare that is Ukraine.  There were other issues in Crimea, of course, but the economy was the trump card.

Putin is a long way from being a saint—or even Olaf Palme.  But compared to the rest of the 20th-century Russian leaders, he's remarkably enlightened.  Of course, this is not a high bar—Nicholas II, Stalin, Brezhnev anyone?  After the brutality of WW II, there aren't a lot of pacifists left in Russia.  You try to explain to people who absorbed a real Nazi invasion that you don't need to be tough and cruel once in a while.  The wild-west chaos that came with neoliberalism needed a tough guy to restore the peace.  It is telling that Putin is now wildly popular at home.  My guess is that most of the criticism he faces these days is from people who want him to be even tougher.

Clinton's role in Wall Street's predatory criminality

Zeitgeist is one of those perfect German words because there is something almost spooky about what is fashionable and what is not.  Since "status emulation" is a central concept of Institutionalism, we tend to take fashion (political, social, cultural, etc) and aesthetics FAR more seriously than your typical economists.  In the traditional definition of the word, zeitgeist is a collective spirit driven by the sum of human experience.  The first time I encountered this definition, I was somewhat stunned because the defense included the assertion "you cannot actually change the zeitgeist."  I was so shocked I could only mumble, "every day folks go to work trying to change the zeitgeist—they work in advertising, religion, think tanks, PR, and the other forms of paid propaganda.  These jobs would not exist if someone didn't think these efforts are at least partially effective."

But the traditional definition has quite a bit of validity.  Not all PR works for a reason—it costs a LOT to actually change the zeitgeist but if you have to fight it, it does seem a bit supernatural.

So as neoliberalism wormed its way to respectability in the 1970s-90s, it was easy to attribute this sea-change in thought to changing fashion.  And so it was.  But in this case, this fashion shift was the end result of an elaborate set of lies that served the agenda of those who stood to benefit.  The plan was actually pretty simple—buy the opinions of some established news organ and stand back while the professional butt-kissers piled on.  Status emulation is powerful!

And now we see the evidence from a Clinton Library doc release that shows how how a small circle of advisors convinced Clinton that deregulation like repealing Glass-Steagal was wise.  My guess is that the process was remarkably easy—I mean how hard do you suppose it was to convince a natural libertine like Clinton that the elimination of rules was a good idea?  And I'll bet no one got on his schedule to explain to him why rules like Glass-Steagal were written in the first place.  And there was even a response for that—label the offending regulation "Depression-era" so as to make it sound especially archaic.

With Clinton's important deregulation, the wretched excess of 2000s financial scams were set in concrete.  No one goes through the trouble of eliminating rules if they don't have a plan to exploit the new opening.

Note: There are actual pictures of the offending documents in the original article—go visit if you need further proof.

Cheap solar cells change a LOT

It is still difficult to comprehend the possibilities of affordable solar.  The huge advantages the north has held over the south was mostly a function of the clever uses of energy.  It take a great deal of energy to create a society that can make steamships and jet aircraft and machine guns.  But societies that can make machine guns will tend to bully those who are still fighting with spears.  But now that overuse of fire seems to be one of the worst ideas in human history, those societies that have a lot of direct sunlight have the very real possibility of becoming the newly prosperous.

It is especially enjoyable watching people who have been abjectly poor being lifted out of their grinding poverty.  Amazing what a few solar panels will do for people who have been living their lives in much darkness.  And since most of the planet's populations live in the lands with major solar resources, this is the sort of change of major historical proportions.

Anyway, here is a happy story from Kenya to liven up your May Day.