Friday, February 28, 2014

My $0.02 on the situation in Ukraine

I am a long way from the Ukraine and what I know about the situation there is gleaned from three sources, the Internet, history books, and stories told to me in my childhood.

From 4 to 15, I lived in a town that had been settled by German-speaking farmers who had fled Russia between 1874 and 1885 for an assortment of reasons.  There were thousands of such people who settled in western Minnesota and the Dakotas.  In my case, these people were also Mennonites who seriously objected to Tsar Alexander's breaking of the promise that their sons would not be drafted into the Russian imperial army.  This made for an interesting moral dilemma.  On one hand, Mennonites are strict pacifists and have been since 1534 so even during the crazy-time of the Cold War in the 1950s-early 60s, the official teaching was to condemn the extremely prevalent and intrusive war-mongering that was in the air we breathed in USA.  On the other hand, recent historical memory had taught them that the Russians were extremely evil people and the proof lay in their treatment of farmers.  I was in fifth grade (1959) when I heard an old man describe what Stalin had done to Ukrainian agriculture in the name of a madman's crackpot economic theories.  This was a fresh memory for him.

So when Ukrainians claim to me that they have significant historical reasons to hate and mistrust Russians, I hear them—mostly because I first heard those stories as a boy when they truly frightened me.  But the facts on the ground are clear. The Ukrainians and Russians share so many interests that are so important, all the historical hatreds combined are utterly trivial by comparison. Both share weather patterns, for goodness sakes.  I am certain that even without the historical atrocities, both Russians and Ukrainians are damn sick of each other.  Yes, neighbors can be that way.  But there are big fish to fry—example, both countries have to adopt better economic ideas to cope with the requirement of converting their societies to ones that start far fewer fires.

If there is one thing those great farmers that those crazy Russians ran off could tell the angry bomb-throwers during this mess it is this, "The #1 requirement for prosperity is peace!"  To which I would add, it is FAR easier to mend relations with a neighbor that it will be to climb out of whatever economic hole you will fall into if you get involved with the EU or IMF.

Beijing's smog

One of the big advantages that the Germans have in coping with environmental problems is that somehow their environmentalists largely escaped the crackpot label.  (This is also true of any of the countries that have made great efforts to make their living habits as environmentally benign as possible—Scandinavia, Holland, Iberia, etc.)  It makes a BIG difference when your environmental strategy includes inventing new equipment.  If you manufacture a green product that must solve a problem as claimed, you are held to FAR higher standards than if your idea of environmental action is organizing conferences and "raising awareness."  These areas of the world have the most successful environmental organization because they have created a culture which teaches that environmentalism must ultimately be a useful activity.

Which brings us to China.  Beijing has developed a nasty winter-time smog problem.  It has advanced beyond the annoying-dirty-smelly stage to bordering on dangerous.  The direction of winter winds has been known for centuries and yet they sited dozens of coal-fired plants upwind from a city with millions of people.  And virtually all that smog is being generated by brand-new equipment.  One can only wonder, "What the hell were they thinking?"  I don't actually know the answer but let me guess.

The folks who design and build coal-fired plants had a bunch of new orders.  They thought, "Where we build these things is not our decision to make, it is our job to create a structure that turns coal into electricity."  The real estate interests based their thinking on who was able to assemble plant-sized parcels in a very crowded country.  The politicians who approved this were thinking, "If I bring electricity to my constituents, they will build statues to me in public squares."  Anyone who had questioned the wisdom of building these coal-burning plants upwind would have become like Dr. Stockmann in Ibsen's play, An Enemy of the People.  Being an enemy of the people was bad enough in 19th century Norway but is was much worse during China's Great Leap Forward when the big idea was community steel mills.  Social pressure is an awesome force.

So because no one asked basic questions out of fear of social rejection, China has a bunch of brand-new power plants she cannot run without destroying the health of the citizens of her capital city.  This catastrophe was caused by cultural flaws—the kind of flaws that cause you to believe that wind doesn't always blow smoke down-wind or doubt that with enough smoke, you really CAN choke a city.

Wednesday, February 26, 2014

The best examination of the real USA power structure since C. Wright Mills

The following is remarkable and simply must-read.  First-rate Institutional Analysis is extremely rare. But Mike Lofgren has resurrected it in all its glory.  His masterpiece even retains the most common flaw of IA, the clunky naming.  As someone who has wrestled long and hard with this problem—coming up the clunkers like "industrial-environmentalism" and "elegant technology" I deeply sympathize with his idea of the "deep state" even though it wins all sorts of awards for clunkiness.  C. Wright Mills got damn famous writing about the same subject calling his magnum opus The Power Elite.

As a long-time fan of Mills who first read The Power Elite in 1969, I feel qualified to opine that Lofgren has clearly eclipsed the master with his Deep State.  The reason is that for me, he has done a far more masterful job of analyzing the institutions that make up the deep state.  Because for 28 years Lofgren was one of the people who made these institutions run, he has an incredible insiders insight into what makes the deep state work.  One of the more interesting claims he makes is that his descriptions do not rely on anything so whimsical as conspiracy theories because everything he describes is in plain sight.  Well, Mike, it may be to you because you were in the places to observe the phenomena you describe AND you knew what to look for.  The rest of us can only marvel at your attention to detail.

The video is of Lofgren on Moyers.  As you can see, this man is not a bomb-thrower.  The essay Anatomy of the Deep State is reprinted in full below the read-more button.

The Deep State Hiding in Plain Sight from on Vimeo.

Riding the wrong solar technology

Back in the 1970s when I was still in college, solar thermal was considered a very good idea. Photovoltaic cells were still insanely expensive at something like $75 per watt and required so much energy to make, it was highly unlikely they would ever return their energy investment.  By contrast, solar thermal only required simple mirrors to concentrate energy on a tower that collected heat energy into a fluid that turned into steam—thereby powering the sort of electrical generator we had been using for decades.  Compared to PV, it was the soul of simplicity and reliability.

Unfortunately, by the time serious, commercial-grade solar thermal facilities actually got built, the technology began to look hopelessly primitive.  All those "simple" mirrors are not so simple when they have to move to keep the focus of their reflection on the power tower.  These installations require a lot of space.  And compared to PV cells that now sell for $0.75 per watt and trending lower, solar thermal is now almost prohibitively expensive.

In the time it required to scale up the technology to a commercial size, solar thermal went from the most promising to almost irrelevant.  It has become a perfect object lesson in how insanely difficult it will be to replace our mature and highly developed fire-based energy systems with systems barely off the drawing boards.  In fact, it is so difficult, the only reason to try is that we really have no alternative but to succeed if we have any hope for survival.

Tuesday, February 25, 2014

Why do these clueless idiots get paid millions?

Most of you have probably seen the recent news about the Federal Reserve releasing the transcripts of the 2008 meetings of the Federal Open Market Committee.

Almost all commentary has been about how utterly clueless and wrong the bankers who are Fed officials were about the economy. I just wanted to point out that America's vaunted, highly paid, value-creating, job-creating, making-not-taking, corporate executives are just as dumb, clueless, inept, and useless as the bankers. From the New York Times interactive page:
(January 9, 2008, 5 pm conference call)
Mr. Fisher [Dallas Federal Reserve Bank]: "While there are tales of woe, none of the 30 C.E.O.s to whom I talked to, outside of housing, see the economy trending into negative territory.... None of them... see us going into recession."
Tell me again why these guys get paid 200 or 300 times what their janitors and maids and other employees get paid?

I really believe getting overpaid as much as they do makes it impossible for them to see economic reality.

In the middle of an economic meltdown, Fed economists worried most about inflation

When your only tool is a hammer, soon everything begins to look like a nail.  If you believe the only great threat to the economy is inflation, pretty soon that's all you discuss even when it should be blindingly obvious that there are much bigger threats.  I don't understand such people—I don't even want to.  Because I can think of at least a dozen threats to the economy that are WAY greater than inflation.

One of things we have established pretty conclusively around here is that it is almost impossible to become an establishment economist without having to serve some sort of apprenticeship with the Federal Reserve or one of its sister central banks.  This would not be a problem except for one thing—at least since the glory days of Paul Volcker, the only job these institutions believe important is price stability / fighting inflation.

At least in USA, the Fed is also legally required to pursue full employment—something most people do not know because they have not seen the Fed worry about full employment in their lifetimes.  In the essay below, we discover from recently released Fed transcripts that in 2008, inflation was mentioned over 1500 times while the crises that would soon threaten the global economy was mentioned less than 50.  Given the sort of person that is allowed into the Fed's inner circles, it is surprising these numbers aren't even more skewed.

While central banks are obviously handy things to have, organizations that institutionally insane are not.

Sunday, February 23, 2014

WTO and solar

If ever there was an occasion to grab someone and yell at them, "Get a life!" it would be when the officials at the World Trade Organization decided to file a trade complaint against India for nurturing its solar manufacturing as an infant industry.  We should be applauding her attempts to have a solar panel industry—not trying to put it out of business.  ANYTHING that keeps her from building more coal-fired electrical generating plants is in our best interests.  Of course, if your mind has been poisoned by neoliberal nonsense, you probably think that some crackpot ideas about "free" trade are more important that the amount of carbon in the atmosphere.  It is actually pretty hard to come up with an appropriate synonym for idiot to describe such people but they can be found at all our finest universities.

Saturday, February 22, 2014

Climate change and the innocents

The latest reason for mass guilt is the charge by the poor nations of the world who are suffering incredible climate-related damage that they are paying the price for industrialization without ever having gotten to enjoy the fruits.  Obviously, the vast majority of the people who lost everything in Typhoon Haiyan never got to blast down the road in a Porsche or got to sip champaign while soaring aloft in a Gulfstream.  It took a couple of centuries of innovative fire-building to load up the atmosphere with CO2 and MOST of those fires were built in a tiny handful of industrialized nations.

But mass guilt is a tricky subject.  Are the people who lived down the road from some major industrial infrastructure who only got to smell the fumes guilty of anything even though most of the evidence would suggest they are also victims? And what do you tell all those folks who had no idea their fires were harmful before, say, Hansen's climate change testimony in 1988?

My feeling is that it is largely a waste of time to assess blame among the vast majority. The farmer in the Imperial Valley of California who is about to lose everything to drought may have once been a LOT richer than the poor villager who lost everything to Haiyan but in the end, they both stand to lose everything.  We are literally all in this together.  And the only useful solutions involve the great masses changing how they behave.

I make one exception.  The economic sociopaths whose ideas are preventing the rest of us from doing anything meaningful about climate change really ARE guilty.  The neoliberals are not merely swine, they are as evil as anyone who has ever walked planet earth.  And until they stop telling us what geniuses they are, I am not about to cut them any slack for their absurd levels of ignorance.

Goodbye Sweetpea, you were a helluva cat

I am not a cat person but about a dozen years ago I became a minor version of one when I began a relationship with a woman who owned a little grey furball. Since I didn't really understand why anyone would want such a seemingly useless creature, I decided that if I wanted to hang out with this cat owner, I would at least pretend to like her cat.

The pretense lasted less than three weeks before it became abundantly clear that I REALLY liked this cat. She was amazingly affectionate and had decided I was going to be her personal oaf. She was this tiny 8.5 pound creature and I am 6'3" 260+ so I was forced to be incredibly gentle with her. She responded by getting all excited whenever I entered the room and purring loudly enough to wake the dead when I would pet her. She was a shameless flirt who knew she was very beautiful and seemed to understand that I am a sucker for beautiful things. When I had my computer next to my bed, she would curl up on the blankets and quietly watch while I worked. She especially liked it when I played Mozart chamber music but would run off if I started playing something boisterous like Beethoven.

Last weekend, she started getting agitated. She would shake like she was going to cough up a hairball but then would only drool. Sunday night she came into the room with a pained expression. I didn't know how to help her so I wound up petting her for over an hour. She seemed much better—it was as if I had "cured" her with affection. Even so, we had her down to the vet the first thing Monday morning. Of course, she wouldn't have one of her seizures for him so we were sent home with some medications and encouragement. But something was seriously wrong. Throughout the day, her seizures got worse and came closer together. By late afternoon, we were back at the vet's when she had one that looked so painful, we decided the only proper course of action was to put this wonderful cat to sleep.

I am going to miss my sweet and gentle buddy. I have been told many times that highly affectionate cats that like Mozart are rare so I cannot imagine replacing her. So goodbye Sweetpea. You taught me a lot about unconditional affection. And yes, I now understand why people like cats.

Friday, February 21, 2014

The amazing historical ignorance of US business leaders

The Obama administration has boasted that it has brought discretionary spending to its lowest level as a share of the economy since Dwight D. Eisenhower was President. Meanwhile, corporate profits and free cash flow are at historic highs.

This is the economic environment most business leaders and establishment economists tell us is what is required for sustained economic prosperity. But it doesn't seem to be trickling down. Since the financial crash of 2007-2008, America’s wealthiest 1 percent captured 95 percent of economic growth, while the bottom 90 percent got poorer.

There is no economic recovery for working Americans. When will there be? Or, to put a sharp point on the question:

If the all time lowest is not low enough, how much lower must discretionary spending as percent of GDP go?

If the all time highest is not high enough, how much more profit and free cash flow do companies need?

If the most lopsided is not lopsided enough, how much more income inequality do the rich need?

It all reminds me of what I read a month or two ago in Sam Pizzigati's excellent book, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970
"I have never seen," J.P. Morgan Jr. ... exulted, “any president who gives me just the feeling of confidence in the country and its institutions, and the working out of our problems, that Mr. Coolidge does.”

 ....The 1926 tax triumph complete, the 1920s could now roar. America’s corporate movers and shakers had everything they claimed they needed to make American prosper. No powerful union presence. No “regimentation” by regulation. No “confiscatory” taxes. No government spending of any significance that might generate budget deficits. Business leaders had been warning Americans for years not to take any action that could undermine “business confidence.”  Government had now done everything that business claimed necessary to restore their confidence.”

....Chester Bowles, a Madison avenue advertising executive who would become governor of Connecticut in 1949, and would serve President Kennedy as Under Secretary of State, then as Ambassador to India.... wrote in a 1946 book, Tomorrow Without Fear, “that prosperity cannot continue unless enough income is being distributed to all of us—farmers and workers as well as businessmen.”

....The plutocrats had had their opportunity, and they had blown it. America had given them everything they desired. The freedom to do whatever they wanted. The power to bend others to their will. And ever-grander fortunes as both incentive and reward. Americ choked on those fortunes. A maldistribution of income and wealth that severe the American economy simply could not swallow.

“Even with the most business-minded administration in our history, even with falling taxes and a government surplus, even with everything that businessmen thought they needed to insure continued prosperity,” Bowles reflected, “we could not duck that basic issue for more than a few tinsel-decorated years.”

No negative interest rates for developing economies

It isn't just billionaires who are screaming about low interest rates.  Pension funds are scrambling to meet promises that were made in the days (not that long ago) when 8% was considered a "reasonable" or "moderate" rate of return.  There are a LOT of people in the Predator Classes these days.  The problem is that there are WAY too many of them compared the real productive economy.

So now global interest rates are creeping back up and are affecting those least able to afford the added costs.  Even worse, these financial burdens WILL choke off anything that resembles a real economic recovery.  Hey there are reasons why every culture has eventually clamped down on the moneychangers.  Their greed is just too socially expensive.

Thursday, February 20, 2014

Are negative interest rates a possibility?

There are economists, especially those informed by the Chicago School, who still cling to the belief that monetary policy is the only really critical economic lever.  Unfortunately for this crowd, while high interest rates can certainly slow down an economy and remove pressures for inflation, lowering them will not necessarily get a slowed-down economy moving again.  The reason is simple—it is almost infinitely more difficult to build up the real economy than it is to wreck it.

So following the collapse of the real economy in 2007-8, policy-makers have essentially driven the prime rates to zero and five years later, the real economy has not recovered.  Of course, part of the problem is that while interest rates were lowered for many sorts of lending, they didn't go down for many consumer applications like credit cards and student loans,  So for large swaths of the population, those lower interest rates are only something they read about in the papers.  But the true monetarists are not about to suggest the re-introduction of strict usury laws or anything else that would impinge on their sacred markets.  So if zero interest rates for the world's central banks aren't bringing back economic prosperity, they "reason", why not negative interest rates?  And so we see the IMF suggest exactly that monetary policy to the European Central Bank.

Unfortunately for them, if central banks actually go to negative rates, their very existence is rendered absurd.  As the Producer Class giants of the past have understood so well, if we really want to build up the real economy we should consider the whole idea of debt-free money creation.  I have covered the thoughts of Edison and Ford on this subject in earlier posts.  I also addressed the idea of negative interest rate bonds that retired themselves when I covered monetary policy in Elegant Technology.  So while these ideas are hardly new, the reason they have never been seriously considered is because such policies would expose the essential uselessness of the bankster classes.

Wednesday, February 19, 2014

More evidence that TPP is utterly corrupt

The biggest problem with these neoliberal trade deals like the Trans-Pacific Partnership (TPP) is they homogenize evil.  Having local options is not just some quaint hippie idea, it is the very basis of advanced economic development.  So in their naked greed, these trade grabbers outlaw a whole bunch of very useful ideas.  The best example I can think of concerns an Asian nation that was trying to keep it's young from starting to smoke.  Their non-smoking campaign was successfully sued by big tobacco for creating a trade barrier.  In the acutely brain-damaged minds of the neoliberal, this actually makes sense (or so they argue.) That such folks have been dominating the economic argument since the 1970s demonstrates a theological fanaticism that is so extreme it makes the craziest religious nuts of history look like harmless cranks by comparison (and yes, I know about the children's crusades.)

Unfortunately, these trade agreements make it possible to seize the incomes of whole nations so there are serious incentives to get them passed.  This time around, it seems like the big-money folks have bought some extra influence in the corridors of the permanent government.  It might not be enough.  It looks like the pushback from the 97% that are actually harmed by these deals may sink TPP.  Even in a barely-functioning "democracy" such as we have in USA, these kind of numbers can sway even a corporate toady like Nancy Pelosi into announcing her opposition to "fast-tracking" TPP.  (We'll see!)   Of course, until the discussion changes its focus to what is necessary for a survival economics, the neoliberals will just bring back TPP under a new name.  It's what they do.  They have erected a complex institutional apparatus used to corrupt governments into agreeing to their insane greed.

Tuesday, February 18, 2014

Who wants to hear about problems they cannot solve?

It required a long time for me to understand that the BIG dilemma of climate change wasn't caused by the folks who deny its existence but rather by those who passionately believe the science but fail to do anything about it. So I find comfort that an American Sociologist named Kari Norgaard has chosen to look at precisely this problem—even though I am not exactly enchanted with her conclusions.

Norgaard focuses on the psychology of climate change fatigue—which is certainly a very real phenomenon.  Yet my favorite question is, What is possibly served by getting people all worked up about a subject they can do almost nothing about?  Climate change is caused by the production and consumption of energy and folks, that is a BIG topic.  One of the jaw-dropping factoids about the Deepwater Horizon blowout was that they were drilling a 35,050 feet (10,680 m) deep exploratory well in approximately 5,100 feet (1,600 m) of water.  Only a TINY handful of humans have any idea what it is like to drill a seven-mile well in a mile of water.  The oil professionals are attempting technological miracles so that their customers don't have to even wonder from where their power comes.  Hell, most folks think it is an accomplishment to able pump their own gas. These are the direct decedents of people who burned wood without ever thinking about how trees grow.

Replacing the output of the fossil-fuels industries will require some serious technological "miracles".  And about the only thing the average joe can do about this is vote for politicians who will make certain the miracle-workers are fully funded.  And hope.  And pray.  There are no "easy" ways to replace fossil fuels.  Anyone who tells you otherwise is a fool or a charlatan.

Monday, February 17, 2014

Growing food requires water

Lately whenever there are weather-related problems with agricultural production in USA, someone usually pipes up with a cheery comment that Brazil will pick up the slack.  To the horror of many, Brazil has converted enormous tracts of rainforest into cropland so for quite awhile now, the idea that Brazil will provide much of the food necessary to feed a hungry planet has been largely correct.

But climate change is a global phenomenon and sure enough, there will come a time when Brazil simply will not be able to take up the slack.  It's late summer in the Southern Hemisphere and Brazil is being rocked by a nasty drought.  Combined with the drought in California, there are certainly pressures on the global food supply.

Of course, the serious question is, "Is this the new normal?"

Saturday, February 15, 2014

Can desertification be reversed

Sometimes I neglect some of the other great environmental issues in my desire to write something relevant about climate change / peak oil.  So I was especially pleased when one of my readers (thanks JL) turned me on to this exceptional TED talk about desertification—its causes and possible solutions.  Soil fertility is obviously one of the major issues because it is damn difficult to grow food in deserts.

Allan Savory certainly seems to think he has found at least one workable solution to the problems of expanding deserts. Here's his TED talk.

Saturday toons 15 FEB 14

Thursday, February 13, 2014

In memoriam, Lawrence Goodwyn

One of Jon Larson's greatest gifts to me was to introduce me to the history of the US populist movement, and especially to the work of Lawrence Goodwyn, author of the book, The Populist Moment: A Short History of the Agrarian Revolt in America. (Here is a link to the book's Introduction, just to give you a taste of this masterpiece of political economy.)

I was greatly impressed with the book, and when I so informed Jon, he urged me to contact Professor Goodwyn and at least have lunch with him. Goodwyn had retired from teaching at Duke University in 2003.  Duke is in Durham, NC, about 20 miles from me, and Goodwyn still lived in the area. So, a year ago, in February 2013, I called him and invited him to speak to a small book reading group in Chapel Hill. We had been reading Ellen Brown's Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free, and I had caused the group to pause for a longer look at the mid-nineteenth century fight over greenbacks, by telling the group about Goodwyn's book. They were delighted with the idea of inviting Professor Goodwyn to join our little group for an evening. And there was a great turnout, the usual attendamce by a dozen or so people more than doubled to thirty or more. We also had at least three people video recording him, since I had found that there were no YouTube videos of Goodwyn and thought it important we capture him in video. Here's a still shot I took:

All during the summer, as I was out in the hinterland peddling books, I kept thinking I had to call Professor Goodwyn and ask him some questions. I even managed to type up two pages of questions and my own observations that I wanted to share with him. But I'm a terrible procrastinator, and never did try to call him.

And then, last week, I was shocked to learn that Professor Goodwyn had passed on at the end of September: Duke Flags Lowered: Historian Lawrence Goodwyn Dies. But it was gratifying to search the tubez, and read the tributes to the man. Goodwyn was a giant, who influenced the lives of countless people for the better. As the Duke Univesity article above notes, in the 1950s, Goodwn "served as U.S. Senator Ralph Yarborough's advance man during Yarborough's campaigns for Texas governor and the Senate.  As a writer and editor for the muckraking periodical, The Texas Observer, Goodwyn laid bare the corrupt workings of a Texas legislature soaked in oil money during the era that preceded the iconic Observer editor Molly Ivins." In 1971, Goodwyn was hired by Duke to initiate a oral history program chronicling the US civil rights movement.
The graduates of the Duke Oral History program helped rewrite the history of the civil rights movement, focusing on the role of black activists in local communities who created the infrastructure of the civil rights revolution.
A majority of the students who came to Duke as part of the oral history program were African American. They published nearly 20 books, and won numerous national history prizes. Their work helped transform the way civil rights history is written in America, and the way history is taught in universities across the country.  
But, of course, Goodwyn's most important work was his history of populism in the last quarter of the nineteenth century. He showed that the populists were not an unruly mob of bigots and racists with an inchoate rage against ruling elites, but a highly disciplined group of battle-hardened political organizers, armed with a methodical critique of economic and monetary affairs, and a very specific series of proposals to reform the financial and monetary system of the country. Moreover, these reform proposals were carefully designed to fit the purpose of smashing the hierarchical structures of authoritarian power and privilege, and replacing them with structures more in keeping with Jeffersonian aspirations for an democratic economics of egalitarianism. Hence, the title of Goodwyn's magnus opus: Democratic Promise: The Populist Movement in America.  (The  Populist Moment is an abridged and unannotated version of Democratic Promise.)

Goodwyn's work is made all the more remarkable because it included a strong critique of socialism as well. For Goodwyn, the most important human struggle was not capitalism versus socialism, but the people versus the powerful and privileged. Or my terms, democratic republicanism versus oligarchy. Socialism, Goodwyn saw, was just as terribly flawed as capitalism. Quite simply, Goodwyn noted, socialist societies were just as prone as capitalist ones to create oppressive regimes of hierarchical power: "the history of successful socialist accessions to power in the twentieth century has had a common thread-victory through a red army directed by a central political committee. No socialist citizenry has been able to bring the post-revolutionary army or central party apparatus under democratic control..." After the collapse of populism following the 1896 election, Goodwyn wrote, "socialists reacted to continued cultural isolation by celebrating the purity of their 'radicalism.' Thus individual righteousness and endless sectarian warfare over ideology came to characterize the politics of a creed rigidified in the prose of nineteenth-century prophets." Thus, it was naturally Goodwyn's next major endeavor to study, measure, and explain the revolutions of Eastern Europe in the 1980s. And in 1991, Goodwyn gave us Breaking the Barrier: The Rise of Solidarity in Poland.

After our book discussion last February, a number of us gathered at a local tavern along with Professor Goodwyn. I remember being shocked by his rejection of my despondent listing of my disappointments in President Obama. For him, focusing only on what one person, in the office of the President, could or could not accomplish, was missing the more important big picture. As an example, he pointed out that the public's shift from a majority opposing to a majority supporting gay marriage had occurred in a remarkably short period of time, of a decade or less. By that measure, the potential for a truly democratic restructuring of our society and economy was gaining momentum every day.

Which is exactly the theme Jim Hightower sounds at the very beginning of his tribute to Professor Goodwyn.

Seeds of a movement: A 21st century Populist renewal is flourishing at America's grassroots

In November, I spoke to an overflow crowd gathered in Duke University's Lilly Library for Larry Goodwyn's unusual memorial service. Unusual? Well, it was the first memorial I'd ever been to that had to have an intermission!

That was because the "honoree" himself was such an unusual character (pugnacious populist agitator, rebellious scholar, powerful writer, demanding mentor, and passionate protagonist for social justice), so a long line of folks had tales to tell. But what struck me as most unusual was that the attendees were not merely spending three hours looking back at a life well lived, but almost gleefully looking forward.

Goodwyn was the modern-day guru of American Populism. He'd been on the front lines of both progressive academics and activism for more than six decades, blending his work as a renowned scholar of the 19th century Populist movement with his own practice of populism as a strategist and foot soldier in the civil rights, labor, and other grassroots social movements of his time. In 1976, he literally rewrote the textbooks with his path-changing work, Democratic Promise: The Populist Moment In American History. This penetrating volume thoroughly debunked the ivory tower historians of the establishment who had condescendingly dismissed the Populists of the late 1800s as nothing but a bumbling bunch of demagogic, racist rubes in southern backwaters.

Au contraire, as we Texans say. Professor Goodwyn showed that the populist revolt against the unbridled greed of the robber baron era was a highly sophisticated mass movement. It gave downtrodden millions a voice and an empowering sense of themselves as democratic citizens. Through the movement's cooperative structure, grassroots people--who'd been isolated from each other, were mostly impoverished, and were often illiterate--learned how to address their own conditions and created new ways to work together to achieve their aspirations. Radically progressive, the movement included both African-Americans and urban unionists in its ranks and leadership, and it aimed for major structural changes to democratize the economic and political systems. Populism surged across the country into 43 states, from California to New York.  Read more

Have we passed solar's tipping point?

Germany is struggling to cope with the jungle of subsidies and other economic boosts left over from their efforts to get to get their solar society up and running.  Only three weeks ago, I heard someone argue that a major priority was to get our state laws changed to increase feed-in tariffs for renewable energy.  And this stage IS necessary for infant and emerging technologies.

But what if solar and other renewables no longer fit the definition of an emerging technology?  What if all those subsidies and other economic band-aids are not necessary for the technology's survival?

Well, it may a bit soon to declare victory in the drive to actually replace the fire-based civilization, but you can smell it in the air.  And one of the signs that renewables are the future is that they have now become the go-to option for people who have never had access to electricity before.  And like the societies that went from no phones to cellphones and from no TV to sat-dishes, those areas of the world that don't need to displace existing technologies will probably lead the way.

Wednesday, February 12, 2014

The German transition to solar gets more complicated

First, Germany passes a bunch of legislation to subsidize the transition to solar. Some of these subsidies are very generous and have the effect of driving German electricity prices sky-high.  For any enterprise that relies on a lot of electricity to operate, this becomes a threat to its very survival.  But hey, reasons some of those folks, solar panel prices are way down—why not install enough to get off that high-priced grid?

Can't have that—reasons the government which sees a loss of revenue just at a time when it is finding it difficult to pay all those subsidies it promised.  So now we see a proposal to tax the folks who have gotten off the grid.  This is especially ironic because just a few years ago, any company that was willing to finance its own solar conversion without relying on state subsidies would have been considered heroic.

So once again, Germany is confronting the costs of being first with new technology.  In some ways, this is good news because it means the days when governments needed to subsidize solar conversion are behind us.  It means that all those subsidies actually bought what folks wanted—PV cells that have become the low-cost source of electrical generation.  But for the Germans who agreed to spend this money to get the PV industry off the ground, these old arrangements are causing problems of their own.

Tuesday, February 11, 2014

Why is the Fed Pushing Interest Rates Higher?

The Fed is pushing interest rates higher because that is what moneylenders do. The problem is that the globe is essentially in a recession.  There are damn few businesses that have problems filling their orders—the overwhelming majority have way more production capacity than they have customers.  So if one actually believes that central banks exist to promote economic stability, then by their own definition of sound practice, the world is in dire need of extremely low interest rates.  Moreover, those rates should be kept low for a very long time.

Unfortunately for the economy, the low interest rates only seem to apply to saving accounts and home mortgages.  The rates are still ridiculously high for credit cards, student loans, and loans to emerging economies.  So those low rates that apply to lending by central banks to their members are not reaching the real economy.  But rather than correct this problem, the Central Banks have concluded that higher interest rates should be tried—even though all available evidence suggests this plan would be catastrophic.

Monday, February 10, 2014

California's drought

For reasons that have very little to do with reality, I seem to believe that there will be a natural event that will eliminate, once and for all time, any doubts about the fact of climate change.  Something like a drought that triggers an acute shortage of food supplies.  Given the importance of California agriculture, their current drought could be that event.

But probably not.  Folks have amazing mechanisms for denial and eliminating the fresh fruits and veggies that make up so much of California food exports will probably cause little hardship for consumers.  They'll just switch to asparagus and strawberries from Peru and pay the difference.

Eventually, however, the availability of substitutes will dry up as well.  Agriculture is especially vulnerable to climate change.  Think of it this way—a farmer can be having an ideal growing season.  His crops are lush and disease-free.  Everything is pointing to a big harvest when BAM, the whole crop is wiped out in four minutes by a hailstorm.  And that is what has been happening the last couple of decades—small-scale natural disasters quickly wipe out large amounts of food.  Flash flooding seems to be the main culprit but there are others.

Saturday, February 8, 2014

To my Ukrainian readers

One of the really interesting features of this blog is that it is a pretty good barometer of global trouble spots.  If I get a spike in readership from some corner of the earth, it is almost certain that within a week or two, I will discover an economic problem I haven't heard of before or have been neglecting to watch (even with the Internet, you cannot follow everything!)  For example, three years ago when China was full of itself and growing like gangbusters, I never got visitors from China.  In fact, I assumed I was being blocked.  Now that China is beginning to experience the large-scale problems of mass industrialization, I get visitors from China all the time.  Moldova?  Saudi Arabia? Something's cooking, I just don't necessarily know what.

Not surprisingly, my Ukrainian readership is way up.  Good lord, what an economic mess.  Here's a country that with economic leadership that was merely sane, would be one of the richest and most advanced on earth.  And when I say that Ukraine has been subjected to insane economics I am not exaggerating one tiny bit.  After all, Stalin thought it was a good idea to destroy Ukrainian agriculture because those damn Kulaks were so good at it.  That act of madness reverberates to this day.

So now we see another economic fight over Ukraine.  There are folks with big greed who understand what an economic prize she is.  In fairness, the EU effort to get ahold of Ukrainian riches is pretty pathetic.  It is probably more driven by the institutional impulses of the EU partisans.  The USA interests are driven by the ideological madness of neoconservatism.  Victoria Nuland, the "diplomat" who got busted planning the next Ukrainian government is married to Robert Kagan, one of the geniuses who dreamed up PNAC (The Project for the New American Century.)  These people are so evil they make Putin look like a saint by comparison.

The Daily Show method of news reporting has just been used in the fight over Ukraine.  And the USA State department has been exposed in a way they cannot refute—a four-minute Youtube of a couple of over-entitled intellectual flyweights discussing how USA was going to organize the next Ukrainian government.  Of course, the REALLY ugly part about this is that the way those two senior State employees talk on the Youtube is the way they talk all the time—except, of course, when they think the cameras are rolling.  Diplomacy is the art of promoting utterly sociopathic behavior while appearing civilized in public.

The highlight of Nuland's self-important rant was, of course, her "Fuck the EU!" crack.  Diplomats are not supposed to talk like construction workers.  And to dismiss the great EU experiment like that will certainly ruffle feathers.  So Ms. Nuland actually apologized for the comment although I am sure she feels at least that dismissive all the way to her bone marrow.

The funniest part about all this is that the diplomats want no part of the boxing giant Klitschko—after all, they will explain, "strongman" is just a metaphor.  In an area of the world once dominated by Peter the Great, folks understand that giants are just harder to intimidate.  The State Department is looking for folks that know how to carry out orders—not some wild man who hangs out with the large.  This would be worse than Jesse Ventura!

The video that busted the State Department

A State Department spokeswoman trying to deny USA is organizing a putsch in Ukraine

Saturday toons 8 FEB 14

Thursday, February 6, 2014

Environmentalism in India

For a couple of years when I was attending the University of Minnesota, I had neighbors from India.  All of them were studying computer science (don't laugh, in those heady days of Control Data, Honeywell, and Cray, the UM had visions of being a global computer center.)  When I demonstrated my interest in economic development and especially the conditions that led to it, I got to sit in on a bunch of their informal bull sessions.  Several came from important families and held the view that they were going to be in the room when important decisions would be made about India's future.  I haven't kept track but I am sure some of them have been.

Essentially there were three givens in their discussions.
  • India was industrially backwards because that is how Great Britain wanted them to be, and they called the shots for a LONG time.
  • India was already overpopulated by 1850.  There are so many people fighting over scraps that a well-paid industrial middle class was economically highly unlikely.
  • India has two sources of energy—nuclear power and dung (1970-72)
Occasionally, they would also mention a cultural predisposition toward corruption, the lack of religious prohibitions against usury, and a nasty class (caste) system that provided a sort of legitimacy for a society with crazy levels of income disparities.

Forty years later, most of these assumptions are still true—except the population now exceeds a billion folks and they have figured out how to import large piles of coal.  A billion people with upward aspirations with still-historical levels of poverty.  Unfortunately this means that whatever gets built by way of economic development gets built on the cheap.  It is obvious that it will be a long time, if ever, that India is as organized to deal with her environmental dilemmas as say, Växjö Sweden.

Germans still trying to go green

Following the German attempt to go green on energy is sort of an adventure.  The problem is SO large that you wonder who is actually making these multi-year, multi-billion Euro decisions.  I have seen people freeze up trying to choose the new floor tile for their bathrooms so I wonder how decisions this large gets made without everyone trying to cover their tails.

This is a power line we are talking about.  These things cover great distances and so impose themselves on millions of people.  But even without the NIMBYs, we have serious vested interests who don't want to see this built.  At some point one wonders if folks are not ready to just throw in the towel.  So again I ask, who has the economic and political clout to build a 500-mile power line?  There is no one willing to take on such a project here in USA.

Wednesday, February 5, 2014

Shuffling computers

The house was blessed with a new computer last week—a 13" Macbook Pro.  It belongs to the woman who actually knows how to make money with a laptop so whatever she wants, etc.

It is an incredibly nice machine.  It has completely solid-state memory system which makes it very fast while having superb battery life.  Except for the keys, there are no moving parts.  It has no disc drive but it has a minimalist dvd burner / reader that plugs in.  It has two Thunderbolt ports which doesn't mean much because we have nothing that uses that connection.  The HDMI port has been more useful—fun to watch your computer on a big-screen TV.  The video card has no problem running two 1920x1200 monitors.  That a 1.5 kg laptop can plug in and become the engine powering a legitimate page-layout / photo-editing / high-def video editing suite is truly remarkable.

It is something of a chore getting a computer to store your work tools in the way you want them based on 20 years of fussing.  The operating system named Mavericks 10.9 seems to work much better on a current piece of hardware—installing this on my older iMac proved to be a major headache.

So once the new computer was up and running, I inherited the old laptop and since all the software was out, it got a total hard drive rebuild too.  We replaced its hard drive with a solid-state version a few years ago so with a clean software install, it was running very nicely this morning.  But this sort of explains why I have been distracted.  I also hosted a small Superbowl party.

I have big plans for the future of this site.  The tools are working.  Time to get back to work.

Our "crazy" winter

It has been a winter for nostalgia types here in Minnesota.  THIS is the kind of winter an old guy like me remembers—regular snowfalls and extended cold snaps.  The main difference is that the snowfalls are not so heavy and the cold not so cold as in the 1980s.  People tend to forget that bad weather almost ruined Ronald Reagan's inauguration in 1981.

But it has been awhile since we had such a winter and predictably, the deniers are out in force.  As Michael Mann explains (my new go-to guy for this sort of thing) this is still an unusually warm winter—you just have to go to western Alaska to find it.  In the meantime, we are still seeing climate change catastrophes like the incredible drought in California.

And while it seems like this winter is especially savage—particularly for those stuck buying $4.50 / gallon propane—it certainly isn't.  At least not here in Minnesota.  And since we always get the brunt of those Arctic cold outbursts, I think it is probably true for the rest of the lower 48 as well.

Tuesday, February 4, 2014

Denmark vs Goldman-Sachs

Sometimes it is easy to overlook Denmark.  It is quite small and there just are not all that many Danes (5.6 million).  It doesn't punch above its weight in the way Sweden has done since the Scandinavians started figuring out industrialization in the 19th century.

Here in Minnesota, folks talk about how Nordic immigration made politics a mostly Nordic game.  But within that story were clear differences—the Swedes were the progressives, the Norwegians the reactionaries, the Finns were the radicals, and the Danes?  The best story about Danish politics would be the tale of Elmer Benson who became Minnesota's second elected Farmer-Labor governor following the death of Floyd B. Olson.  He won by the largest margin in state history in 1936.  Two years later, he lost by a record margin.  In need of a job, Benson, who had been a fiery critic of the banking industry, went into the banking business for himself explaining that the people had soundly rejected his critique of banking and besides, banking was all he really knew.  And so ended his days as a rich small-town banker.

Back to Denmark itself.  Because of her excellent agricultural land, the Danes have long had reason to organize her agricultural institutions (cooperatives, agricultural extension education, agrarian political parties, etc.) This is a tribe that has been organizing its economy for prosperity for a long time.  And then there is Copenhagen—arguably the most beautiful city on earth that cements her reputation as a cosmopolitan center of trade.  If Vestas or Lego are examples of the sort of enterprise spawned by rural Danish economics, Maersk (the world largest container shipper) is the logical outcome of a people who have been going to sea since at least the eighth century.

So how does a tribe of people who have been making mostly sensible economic decisions for a long time end up with a government populated by the very worst sort of yuppie eurotrash?—the kind who would be shooting selfies at a funeral?  Actually, the answer is pretty simple—neoliberalism is the official doctrine at all the finest institutions of higher learning in Denmark.  Hella Thorning-Schmidt, Denmark's first-ever female prime minister, went to the very best of those schools and THEN she married the son of Neil Kinnock, the former Labor Prime Minister of UK who she met at the College of Europe in Bruges.  He has a neoliberal welfare job at the World Economic Forum—the kind given to Labor princelings as the price of selling out.

So are we supposed to be surprised that the Danish PM sold out the very economic principles that have made Denmark prosperous over the years?  Why?  That is her job—to cut crooked deals with the Goldman-Sachs of this world.

Monday, February 3, 2014

Drought—an oldie but goodie

The drought in California is about to get seriously ugly.  They are in the third year of a severe drought.  Their water systems are almost dry.  California agriculture runs on irrigation.  The rest of us are about discover just how important California agriculture is to the real economy of USA AND the rest of the world.

Sunday, February 2, 2014

The economics of power generation

Germany's renewable energy debate is something one could see coming down the track for years.  Electricity is economically kind of an odd duck.  While it is certainly a product its producers would just as soon charge as much as the traffic will bear, for the vast majority electricity is something that has to be consumed and the less it costs, the better.  In the real economy there is another issue—for many industrial products, electricity is as much an input as ore, chemicals, inventiveness, and labor.  If the cost of electricity goes up, every product that "contains" electricity must get more expensive.

To get around this problem, communities have built their own powerplants, organized generation as a cooperative venture, or most commonly, treated electrical power and its distribution as a regulated monopoly. In all cases, the community was trying to exercise some control over the costs of power.

Flash forward to Germany and its efforts to go green.  By being trailblazers, the Germans have signed up for some high-priced electricity.  The way the government got all those German yuppies to invest in small-scale solar and wind was to provide subsidies and promise a very generous feed-in tariff.  On paper, this arrangement provided a new source of rents.  In practice, it is making electricity outrageously expensive to poor pensioners and high-tech manufacturers alike.  And while it is easy to wonder exactly what the Germans were thinking, the truth is that in the age of neoliberalism, this was probably the only way to accomplish what they have done so far.

Of course, the biggest conceptual problem the Germans faced was a dying spark of craziness left over from the supply-siders—the idea that if they build it, they will come.  Hey, they reasoned, let's start building the windmills and figure out the integration and cost issues when they come up.  In other words, neoliberal craziness is threatening to scuttle the best-organized effort of an industrial society trying to power itself with renewables.  This is unacceptable.  Humanity simply must replace its fires.  The idea that artificial ideas—and really screwy ones at that—could be allowed to wreck such a noble effort, however flawed, is unthinkable. Such results would be nothing less than a blow to human existence.