Sunday, December 30, 2018

Week-end Wrap - December 29, 2018

Week-end Wrap - December 29, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

A Short Crash Course in American Political Economy
Tony Wikrent, November 25, 2016 [Real Economics]
...Economic equality is basic to a republic because, the idea was, no person can be fully independent and be a good citizen if their livelihood depends to some extent or other on another person’s largess, benevolence, or tolerance. This was the basis of the fight between the Hamiltonians and the Jeffersonians. Jefferson believed that only farmers who owned their own land were independent enough to honestly exercise the duties of citizenship. Jefferson wanted to delay the advent of industrialization and subservient factory labor as long as possible. This is why Jefferson acceded to the Louisiana Purchase, which he would otherwise have opposed on the grounds that the federal government has no express power to acquire so vast territory. [2] With the Louisiana Purchase, yeoman squeezed out of the established eastern seaboard would be able to cross the mountains, and buy, steal, or somehow take the land of the native Americans and set themselves up as independent farmers, thus extending in both space and time Jefferson’s ideal agrarian republic.\ 
Hamilton, by contrast, understood that the economy could not be frozen in time and remain entirely agrarian. Industrialization HAD to not only proceed, but be encouraged [3], for the USA to have any chance of resisting the intrigues and hostility of the European powers – which remained committed to eradicating the American experiment in self-government until the US Civil War. (France and Spain landed troops in Mexico and Caribbean at the beginning of the war; the Mexican republic was eliminated and Maximilian, younger brother of Austrian emperor Francis Joseph I, was installed as puppet emperor. The British government of Lord Palmerston was preparing to land troops in Canada in 1862, but was deterred by the pro-USA street fighting in London and elsewhere which was led by the British allies of Italian revolutionary Giuseppe Garibaldi.) 
Hamilton’s great insight was that economic development depended entirely on improving the productive powers of labor. This meant the development of science and technology, and the spread of machinery to replace muscle power, both animal and human. The correct view of Hamilton must be precise: it was not that Hamilton sought to encourage and protect wealth, but to encourage and protect the CREATION of wealth. (Read Section II, Subsection 2, “As to an extension of the use of Machinery...” in Hamilton’s December 1791 Report to Congress on the Subject of Manufactures, if you want something to read today.) 
This is where Marxist analysis fails catastrophically. Yes, much of economic history is that of elites accumulating wealth through exploitation, fraud, and violence. BUT: how was that wealth which is stolen created in the first place? Thorstein Veblen, and his discussions of industrial organization versus business organization, are far more useful in understanding the COMPLETE economic story, not just the exploitation side of it....

Sunday, December 23, 2018

Week-end Wrap - December 22, 2018

Week-end Wrap - December 22, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

How Britain stole $45 trillion from India
[Al Jazeera, via Naked Capitalism 12-18-18] 

2,000 Years of Economic History in One Chart
Barry Ritholtz [The Big Picture 12-19-18]

Sunday, December 16, 2018

Week-end Wrap - December 15, 2018

Week-end Wrap - December 15, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

The French Protests Do Not Fit a Tidy Narrative
Matt Taibbi, Rolling Stone, via Naked Capitalism 12-13-18]
No one excels Taibbi at staccato jabbing the powers that be with the facts of their own arrogant incompetence. The protests in France are spreading, not because of a carbon tax on gasoline, but for the same reasons Occupy spread, before it was crushed by Obams's Domestic Security Alliance Council.
The vest movement, a.k.a. gillets jaunes, began as a localized French grievance about a fuel tax and has spiraled into an international phenomenon. In Europe, there have been yellow vests in Sweden, Germany, Belgium and the Netherlands. There are vesters marching in Alberta, Canada (these seem more right-wing and anti-immigration), but also in Basra and Baghdad, where protests are directed at poor living conditions. Egypt banned the sale of yellow vests to stem protests against the al-Sisi dictatorship. 
The common thread seems mostly to do with class. However, since we’re more comfortable covering left-versus-right than rich-versus-poor in America, the journalistic response here has been a jumble. 
The New York Times editorial “Macron Blinks” recognized the battle lines were between the “marginalized” and the “pro-business program” of “the rich and powerful.”

....When an online commenter suggested “centrism” was just another word for “elitism,” Boot was again puzzled.... 
Over and over, a daft political class paternalistically implements changes more to the benefit of donors than voters, then repeatedly is baffled when they prove unpopular....
These policies came gift-wrapped in assurances. NAFTA was to produce one million new jobs* in the first five years. The WTO was supposed to add $1,700 to every family’s income, every year. The 2004 tax holiday, which slashed taxes on $299 billion in offshored profits, would create 500,000 jobs, corporate leaders (and the George W. Bush administration) promised.

Wednesday, December 12, 2018

We chose not to fly

It's about freaking time. In my humble opinion, the most harmful climate change deniers are not the knuckle draggers who can bring themselves into believing that nothing is happening and this is one giant hoax. Rather, it's the serious scientists who claim that greenhouse gasses are about to destroy the ecosphere and then fly 100,000 miles a year to conferences where they back-slap with their buds while peddling their wisdom. NO ONE will ever live down such behavior, such hypocrisy.

Here are three people who have decided to set a better example. Although reducing one's travel from 100k to 30k isn't all that much of an improvement. Perhaps some day before the Greenland ice sheet melts, maybe these folks will realize that if they have anything important to say, they can do it by videoconferencing. Well, we can hope.

Sunday, December 9, 2018

Week-end Wrap - December 8, 2018

Week-end Wrap - December 8, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Lawler: US Death Rate Up, Life Expectancy Down in 2017
[Calculated Risk, via Naked Capitalism 12-5-18]
“What is especially striking about this table is the sharp increase in death rates among 25-44 year old over the last five years.”
One part of the U.S. yield curve just inverted; what does that mean?
[Reuters, 12-6-18]
....yield curve inversions - when shorter-dated securities yield more than longer maturities - have preceded every U.S. recession in recent memory by anywhere from 15 months to around two years. “The yield curve has sent a chill down investors’ spines in regard to the future outlook of the U.S. economy,” said Chad Morganlander, senior portfolio manager at Washington Crossing Advisors in New Jersey.
13% Of Americans Will Boycott Christmas Spending 
[Safe Haven, Naked Capitalism Water Cooler 12-3. 
“The 2018 Bankrate Holiday Gifting Survey showing that 13 percent of American shoppers are planning to completely boycott holiday spending…. Despite growing consumer resistance, 45 percent of shoppers will still spend beyond their comfort zone, says Bankrate’s survey. And in this race to show their love by gifts—where larger gifts apparently mean more love–Americans are prepared to plunge themselves into heavy debt."
If that percentage tripled, to over a third of USA shoppers boycotting holiday shopping, it would wreak havoc in the boardrooms of hundreds of really large corporations.

Sunday, December 2, 2018

Week-end Wrap - December 1, 2018

Week-end Wrap - December 1, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Worldwide the suicide rate is down by 29% since 2000. In America it’s up by 18%
[Washington Post, via Naked Capitalism 11-29-18]

Report: Death Rates Increase for 5 of the 12 Leading Causes of Mortality 
[Pharmacy Times, via Naked Capitalism 11-29-18] A useful summary.

[Washington Post, via Naked Capitalism 11-26-18]

Household debt hit a record high of $13.5 trillion last quarter
[Time, via Avedon's Sideshow 11-23-18]

Thursday, November 29, 2018

Developing Nations Are Stepping Up Into Global Clean Energy Leadership

The importance of "sunk costs" looms larger by the day. Turns out it is really, REALLY hard to replace old technology with new. And it only makes sense even IF the only consideration is how much money has been invested over the years in the electrical grid, filling stations, etc—things that by rights should be rotting in technology graveyards by now. Of course, it isn't just the interests of pension and hedge funds at stake here—there is also matters of pride in technology, etc. We have successfully made the transition from one technology to another: tubes to transistors, film to digital photography, fax to email attachments, etc. but nothing on this scale.

So now we see that the people with the least infrastructure to displace happen to live in areas with the most sunlight. So it is really no surprise that the least developed countries in the world are embracing solar power with the most enthusiasm. It is the cheapest energy solution by far.

World faces 'impossible' task at post-Paris climate talks

Now comes the fun part. As the evidence for climate change continues to pile up, some of the more enlightened among us are beginning to wonder, "Just how big is the problem? And how much will this really cost to fix?" Of course, these are exactly the questions that should have been asked in 1988 when James Hanson provided us with his rocket science version of how bad it already was. Too bad the evidence had to be overwhelming to get to where we should have been in 1988.

Sunday, November 25, 2018

Week-end Wrap - November 24, 2018

Week-end Wrap - November 24, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

NASA Seismic Probe Insight to Land on Mars
[Machine Design 11-20-18]
After a six-month space flight, Insight is poised to land on Mars for a two-year mission exploring the planet’s geology.
NASA is providing live coverage of the landing, scheduled for Monday. November 26, at about 3:00 p.m. Eastern time.  Scores of viewing events and parties are planning to take advantage of the live feed.
Major viewing events at museums include "Countdown to InSight" at the Smithsonian National Air and Space Museum's Steven F. Udvar-Hazy Center in Chantilly, Virginia; a "NASA Mars Insight Landing Livestream" at The Museum of Flight in Seattle ; a 6-hour pop-up Landing Event at the Adler Planetarium in Chicago; an "InSight Lands on Mars" simulation at the American Museum of Natural History in New York; and many more.
In North Carolina, there are two events:

North Carolina Museum of Natural Sciences
11 W Jones St, Raleigh, NC 27601
November 26, 2018 
2:00 PM - 3:30 PM Local Time

Robeson Planetarium
210 E. 2nd St.
Lumberton, NC 28358
November 26, 2018
6:00 PM - 8:00 PM Local Time

A Grave Climate Warning, Buried on Black Friday
Robinson Meyer, November 23, 2018 [The Atlantic, via Naked Capitalism 11-24-18]
In a massive new report, federal scientists contradict President Trump and assert that climate change is an intensifying danger to the United States. Too bad it came out on a holiday.

Oh those Vikings

One sparkling August morning in 1970, I awoke in the small town of Roskilde Denmark. I was hitchhiking to Copenhagen but had been warned that the youth hostels were full so I stopped short. So that morning I knew I was 30 km from downtown Copenhagen and absolutely nothing else about Denmark. By the end of the day I had become a serious fan of things Viking because of a 1962 find of five ships of various sizes in the mud near the main harbor. The good people of Roskilde had built a museum in 1969 to house these finds that from the looks of things, has grown in size and sophistication since then.

I have a sister who has compiled a thorough genealogy of our family. All eight of my great-grandparents came from the Viking "belt" that extends from Denmark in the south to Uppsala / Birka in the north. Because of geography, the explorations / raids / settlements of the Danes and Norwegians went west. These are the best known Vikings because of their importance to British history—William the Conqueror was a Norman (northman / Norwegian), after all. The Swedish Vikings went east and influenced the history of Russia and the Ukraine. Between a great-grandfather from Bergen Norway and two great-grandparents from Gotland, I have the range of Viking roots well covered.

In 1970, I knew none of this. In fact, the universe of Viking historians was pretty damn tiny. As my interest in the subject grew, I discovered I had latched onto a very obscure topic. For example: I found my way into a relationship with a woman who was half Norwegian. Since I was still a redhead, tall, and pretty good with a hammer, I thought that as a romantic gesture I would make her a Mjolnir (Thor's hammer) as a piece of costume jewelry / good luck charm. I made it of wood and leather and it turned out quite nice. It might have worked as romantic gift except that 1) She had never heard of Mjolnir. 2) She had never heard of the Viking pantheon of gods. 3) She had no idea what this gesture was supposed to mean. This was 1994. Amazingly, pop culture has caught up with my obscure hobby. I was watching an episode of Jeopardy not long ago (a guilty pleasure indeed) when they had a category on Viking mythology—all three contestants could have gotten them all right.

These are my people. I have lived in Scandinavia on two occasions. No one I know acts remotely like a Viking raider. So the question that has fascinated me for the last 48 years has been—how did the Vikings become Scandinavians? My Lutheran preacher father claimed that because the Viking Age mostly ended with the coming of Christianity to the north, this was the defining event. I always had a lot of problems with that explanation because goodness knows, there have been plenty of bloodthirsty Christians in history.

My pet explanation is those Viking boats. No longships, no Viking Age. These were amazing craft. Able to travel long distances over open and often stormy oceans at high speed, shallow enough to navigate narrow rivers, and light enough to be hauled over portages. At the height of the Viking Age, their influence stretched from North America to Constantinople because of those boats. The folks who went out in raiding parties could be violent thugs—the folks who built the boats had to be highly skilled, in love with precision, and supported by other skilled trades like steel making. It requires a sophisticated society to float a navy that can conduct overseas raids. The peaceable producing classes had to stay home and build boats. The young bucks went a-Viking—mostly to get a grubstake so they could buy a boat. None other than Thorstein Veblen thought Viking raiders were mostly young men out having fun with dad's boat.

A recent find in Ribe Denmark gives new evidence for what simply had to be true—that Viking settlements had to be communities of skilled people. Those boats did not emerge from thin air. A boat demands a boatbuilder. Anyone who has ever built or maintained a boat will emphatically explain just how difficult this is to do.

Wednesday, November 21, 2018

Catching up to Producer Class innovation

The only truly successful "revolutions" in human history have been brought to us by the Producer Classes. Think about it. A Leisure Class occupation like politics hasn't progressed much, if at all, for hundreds of years. George W. Bush was most certainly not an improvement over Abraham Lincoln even though both were Republican Presidents. In that same time, the Producing Classes completely changed transportation, communications, chemistry, manufacturing expertise, metallurgy, etc!

So when I insist that climate change is a Producer Class problem that can only be solved with Producer Class solutions, I am not wrong. The so-called climate activists didn't change anything when they marched or chained themselves to the White House fence. It's the guys who were beavering away at making solar cells affordable who have changed everything. And like the good Producers of the past, they have discovered they still have to drag the mindless idiots of politics and finance into accepting their new and improved tools. Somewhere the ghosts of the Non-Partisan League are smiling knowingly.

And while insisting that they are only asking for "market" solutions, today's renewable energy revolutionaries might do well to look at what those North Dakota farmers were demanding in 1916. They could demand a great deal more. After all, they hold the only answers for the very survival of human civilization.

Sunday, November 18, 2018

Week-end Wrap - November 17, 2018

Week-end Wrap - November 17, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus+

To say that Michael Hudson’s new book And Forgive Them Their Debts: Lending, Foreclosure, and Redemption from Bronze Age Finance to the Jubilee Year (ISLET 2018) is profound is an understatement on the order of saying that the Mariana Trench is deep. To grasp his central argument is so alien to our modern way of thinking about civilization and barbarism that Hudson quite matter-of-factly agreed with me that the book is, to the extent that it will be understood, “earth-shattering” in both intent and effect. Over the past three decades, Hudson gleaned (under the auspices of Harvard’s Peabody Museum) and then synthesized the scholarship of American and British and French and German and Soviet assyriologists (spelled with a lower-case a to denote collectively all who study the various civilizations of ancient Mesopotamia, which include Sumer, the Akkadian Empire, Ebla, Babylonia, et al., as well as Assyria with a capital A). Hudson demonstrates that we, twenty-first century globalists, have been morally blinded by a dark legacy of some twenty-eight centuries of decontextualized history. This has left us, for all practical purposes, utterly ignorant of the corrective civilizational model that is needed to save ourselves from tottering into bleak neo-feudal barbarism. 
This corrective model actually existed and flourished in the economic functioning of Mesopotamian societies during the third and second millennia B.C. ... It is the necessary and periodic erasure of the debts of small farmers — necessary because such farmers are, in any society in which interest on loans is calculated, inevitably subject to being impoverished, then stripped of their property, and finally reduced to servitude (including the sexual servitude of daughters and wives) by their creditors, creditors. The latter inevitably seek to effect the terminal polarization of society into an oligarchy of predatory creditors cannibalizing a sinking underclass mired in irreversible debt peonage. Hudson writes: “That is what creditors really wanted: Not merely the interest as such, but the collateral — whatever economic assets debtors possessed, from their labor to their property, ending up with their lives” (p. 50). 
And such polarization is, by Hudson’s definition, barbarism. For what is the most basic condition of civilization, Hudson asks, other than societal organization that effects lasting “balance” by keeping “everybody above the break-even level”?
“Mesopotamian societies were not interested in equality,” he told me, “but they were civilized. And they possessed the financial sophistication to understand that, since interest on loans increases exponentially, while economic growth at best follows an S-curve. This means that debtors will, if not protected by a central authority, end up becoming permanent bondservants to their creditors. So Mesopotamian kings regularly rescued debtors who were getting crushed by their debts. They knew that they needed to do this. Again and again, century after century, they proclaimed Clean Slate Amnesties.”
Hudson also writes: “By liberating distressed individuals who had fallen into debt bondage, and returning to cultivators the lands they had forfeited for debt or sold under economic duress, these royal acts maintained a free peasantry willing to fight for its land and work on public building projects and canals…. By clearing away the buildup of personal debts, rulers saved society from the social chaos that would have resulted from personal insolvency, debt bondage, and military defection” (p. 3). 
Marx and Engels never made such an argument (nor did Adam Smith for that matter). Hudson points out that they knew nothing of these ancient Mesopotamian societies. No one did back then. Almost all of the various kinds of assyriologists completed their archaeological excavations and philological analyses during the twentieth century. In other words, this book could not have been written until someone digested the relevant parts of the vast body of this recent scholarship. And this someone is Michael Hudson. 
....For us freedom has been understood to sanction the ability of creditors to demand payment from debtors without restraint or oversight. This is the freedom to cannibalize society. This is the freedom to enslave. This is, in the end, the freedom proclaimed by the Chicago School and the mainstream of American economists. 
....Hudson quotes the classicist Moses Finley to great effect: “…. debt was a deliberate device on the part of the creditor to obtain more dependent labor rather than a device for enrichment through interest.” Likewise he quotes Tim Cornell: “The purpose of the ‘loan,’ which was secured on the person of the debtor, was precisely to create a state of bondage”(p. 52)
The entire review should be read carefully: what Hudson has written utterly annihilates the legitimacy of modern theory and practice of finance, banking, and government. 

Saturday, November 17, 2018

Technological diffusion

Thorstein Veblen probably never used the term "technological diffusion" but he accurately portrays an early manifestation when he recounted how Germany raced past England in industrial expertise and power in the decades leading up to WW I. In his towering use of Institutional Analysis in Imperial Germany and the Industrial Revolution (1914), Veblen describes the many advantages of being second (or third, etc.)

What Veblen was describing is the industrial learning curve. The path from an idea to a "finished" product, to something people want to buy is long and treacherous. Of course, the more complex it is and the more ideas must be combined into the final product, the longer and more expensive the learning curve turns out to be. It can be argued that it required at least 80 years before cars really became reliable and comfortable. The road to the $.75 per watt solar panels took minimum of 70. These things are HARD to do. Because the learning curve is a fact of life, I have become fascinated by how it plays out.

When asked about solar, I have long advised to wait until panels could bought at a Home Depot / IKEA store. These people just want to sell goods—they don't need hassles from irate customers who want their money back because the product somehow failed. (If you are a serious DIYer, and trouble-shooting incomplete technology is one of the joys of your life, jump in with both feet. After all, early adopters are important too. If you are one of those people, you really don't need my advice.)

Another sign of technological sophistication and maturity is the adoption of new parts into old settings—in this case, Tesla (and other) parts into a 1949 Mercury. This is hot rodding 101. In this example, they made it look box stock to an untrained eye while grafting some serious EV parts underneath. When the hot rod crowd goes looking for your parts, this is a very clear sign that the EV revolution has matured.

Tuesday, November 13, 2018

Sunk costs

In 1972, I talked my dad into buying a Saab 99. Saab was mainly an aircraft company financed by the Wallenberg Bank in the late 1930s to build fighters for the defense of Swedish neutrality. After the War, they decided to take their skills into automobile manufacture. They hired the rising star of Swedish industrial design, Sixten Sason, who would go on to design the Hasselblad camera that NASA sent to the moon on Apollo 11. So a company full of aircraft expertise built a car they believed would be better with a little airplane built in. The 99 was brimming with innovation. For example:
  1. The structural integrity of the passenger compartment was superb. Monocoque, stressed-skin design combined light weight with a crazy-strong roof. Saab's early promotion included winter rallying. Their driver rolled his car so often while continuing the race he got the nickname Carlsson på taket (Carlsson on the roof).
  2. The cockpit was the first real manifestation of sound ergonomics. The seating and driving position was excellent. The instruments were clear and easy to understand.
  3. Four-wheel disc brakes had multiple backup systems.
  4. It was versatile with a fold-down rear seat.
  5. And it was the only sorted-out front-wheel drive car sold in USA. (In snowy Minnesota, that was a big deal.)
Saab is no more. by 1990, every car-maker on earth had a version of the Saab 99. Some, like the Toyota Camry, had taken all those good ideas and refined them significantly. Cheaper and more reliable is a winning combination.

Right now, Tesla is at least as far out in front of the EV pack as was the Saab 99. Below is an excellent description of the institutional problems facing the established car companies. They have BIG bucks invested in a way of producing a product that is rendered obsolete by fun, comfortable, exciting, electric cars. Yes, they are dragging their feet. But giving what they face, you would too.

The cautionary tale of Saab is a reasonable outcome for Tesla. Yes, its competition will lag. The Germans, Americans, and Japanese may well be hindered by the Institutional inertia. But that leaves the Koreans and the Chinese. Either one has the potential to swamp Tesla.

The Germans have the largest amount of Institutional inertia. But this may be changing. According to DW, they are finally realizing that the future of transport will be electric and are beginning to make serious investments in batteries, etc.

Sunday, November 11, 2018

Week-end Wrap - November 10, 2018

Week-end Wrap - November 10, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

2018 Election Night Live Blog/Open Thread
Lambert Strether, November 6, 2018 [Naked Capitalism]
Now, we might ask ourselves what we’re going to get out of all this, should the Democrats win the House (or even the House and the Senate). This question interests me far more than the horserace, and I believe that I’ve shown the answer: “Not much.” This is true for at least two reasons: First, as I have shown, 2018’s left hasn’t got enough institutional power to force the Democrat Party to change direction; indeed, all signs point to a reactionary liberal Democrat desiire for restoration of the November 7, 2016 status quo ante ancien regime(perhaps with an admixture of new faces, as aspirational identity politicians assume new positions). This is clearly true if you make #MedicareForAll your litmus test on policy. Second, as I have shown, the composition of Democrat candidates in key districts is heavily weighted (25%) toward MILOs (Military, Intelligence, Law Enforcement, Other). Further militarizing the Democrat Party says nothing good about policy, domestic or foreign. Now, as usual given the choices on offer, gridlock is our friend, so there’s nothing wrong with Democrats controlling the House; but as far as using or even reconceptualizing government to convey universal concrete material benefits, especially to the working class…. Well, we won’t be seeing anything like that, thank you very much. Which is unfortunate, because if you wanted to arrest the country’s decades-long rightward slide, that would be the way to do it. See under Roosevelt, Franklin Delano.
The Resistance Is Not a Call for Restoration
Robert L. Borosage, November 5, 2018 [The Nation, via Naked Capitalism 11-7-18]
After the midterms, Democrats must embrace the insurgencies that have reenergized the people and the party....

Sunday, November 4, 2018

Sustainable developments from Dubai, Australia, and Estonia

I have recently shifted my living arrangements. I now live in a very small Minnesota town that borders on the Mississippi. There is not of energy left at 69 and the move used up what I have. I am regaining my footing but these things take time.

I have also decided that I want to take this blog in a slightly new direction. My core beliefs have not changed but I want to attempt to be more uplifting. Goodness knows, the problems are scary enough without retelling the horrors. But as I sincerely believe that only the Producers have ANY chance whatsoever of providing a path out of the catastrophe that is climate change, I intend to focus on what they can accomplish and how they will do it. I also intend to rely more heavily on video production. One side effect of my move is that I now have a fiber optic connection to the internet so video does not mean crazy-long waits any longer.

To demonstrate where I am going, I have included three examples of Producer Class, well-executed sustainable development. The first is from Dubai where a small city has incorporated a veritable wish list of green technologies to make living possible in a climate where 40°C (104°F) is routine in summer months.

Week-end Wrap - November 3, 2018

Week-end Wrap - November 3, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Mike Norman

Seven Rules for Running a Real Left-Wing Government
Ian Welsh [ 10-31-18] 
These are the fundamentals of effective progressive governance. Judge for yourself how far the Democratic Party is from these fundamentals.

Humanity has wiped out 60% of animals since 1970, major report finds
[Guardian, via Naked Capitalism 10-30-18]

Record Low Water Levels Are Causing Chaos in Germany
[, via Naked Capitalism 10-29-18]

The great Himalayan thaw
[Nepali Times, via Naked Capitalism 10-29-18]

Changing climate forces desperate Guatemalans to migrate 
[National Geographic, via Naked Capitalism 10-29-18]

[Guardian, via Naked Capitalism 11-1-18]

How anti-clean energy campaigns create a mirage of public support 
[Grist, via Naked Capitalism 11-2-18]
[Vox, via Naked Capitalism 11-2-18] 
“[M]ost of those [rosy] scenarios rely heavily on “negative emissions” — ways of pulling carbon dioxide out of the atmosphere…. The primary instrument of negative emissions is expected to be BECCS: bioenergy (burning plants to generate electricity) with carbon capture and sequestration. The idea is that plants absorb carbon as they grow; when we burn them, we can capture and bury that carbon. The result is electricity generated as carbon is removed from the cycle — net-negative carbon electricity. One small complication in all this: There is currently no commercial BECCS industry….. Plenty of people reasonably conclude that’s a bad idea, but alternatives have been difficult to come by.”

Sunday, October 28, 2018

Week-end Wrap - October 27, 2018

Week-end Wrap - October 20, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Trump’s Continued Collision With the Federal Reserve
by Ian Welsh, October 22, 2018 []
Yes, Trump is the source of all evil and anything and everything he does should be opposed, I know, but bear with me: the Federal Reserve should not be insulated from pressure from elected officials. 
I know that orthodoxy says it should, but the fact is that since 1979 the Federal Reserve has raised interest rates whenever it looked like wages were going to rise faster than inflation. The Federal Reserve, in other words, has crushed wages. 
This is bad. It is at the heart of why we have the rise of the right, and so many other problems. Vast inequality, in democracies, always leads to political instability, and in democracies the purpose of the economy should be to create a good life for everyone anyway. 
Trump ain’t a good guy, but wages aren’t increasing for ordinary people. That means that whatever the nominal unemployment rate is, the US isn’t actually at full employment. If it was, there would be rising wages. It is that simple. To raise interest rates before there are even significant wage increases is malpractice, even by the usual standards of monetary policy—and the usual standards are malpractice. 
Just because one despises Trump, one should not allow the major part of economic management be run by people who despise ordinary people having wage increases, or, indeed, by “independent bodies.” Democracy means elected officials having control over real policy. 
So I hope Trump fires a bunch of Federal reserve members, I hope it goes to the Supreme Court, and I hope that those firings are upheld.

Sunday, October 21, 2018

Week-end Wrap - October 20, 2018

Week-end Wrap - October 20, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Dutch court rules that government must help stop climate change
by Quirin Schiermeier, October 10, 2018 [Nature, via Naked Capitalism 10-14-18]
A court of appeal in The Hague has upheld a precedent-setting judgment that forces the Dutch government to step up its efforts to curb greenhouse-gas emissions in the Netherlands. In 2015, a district court in The Hague had ruled in favour of the Urgenda Foundation, a Dutch citizens' climate-change group that filed the lawsuit on behalf of 886 plaintiffs.
The idea that action against climate change will ‘destroy the economy’ couldn’t be more wrong 
by Jared Bernstein [Washington Post, via Naked Capitalism 10-16-18]

Microplastics found in 90 percent of table salt 
[National Geographic, via Naked Capitalism 10-19-18]

Sunday, October 14, 2018

Week-end Wrap - October 13, 2018

Week-end Wrap - October 13, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Key Global Bond Index Suffered $916 Billion Loss Last Week
By Sid Verma, October 08, 2018 [, via John Claydon]
The value of the Bloomberg Barclays Multiverse Index, which captures investment-grade and high-yield securities around the world, slumped by $916 billion last week, the most since the aftermath of Donald Trump’s election victory in November 2016. 
American high-grade obligations are down 2.53 percent in 2018 — a Bloomberg Barclays index tracking the debt has dropped in just three years since 1976. 
“Bond investors have rarely seen losses like this over the past 40+ years,” Ben Carlson, director of institutional asset management at Ritholtz Wealth Management, wrote in a blog post. “Any further moves higher in rates could lead to the worst year since 1976 in terms of overall bond returns.”

By Pam Martens: October 5, 2018 [Wall Street on Parade]
A big drop in Dow Jones Industrial Average futures typically portends a negative open for the stock market. That’s what happened yesterday. When the Dow opened at 9:30 a.m., it initially fell modestly and then tanked by 200 points in less than an hour. At its low of the day, it had lost 356 points and by the closing bell was down 200.9 points. The S&P 500 Index was also negative from the opening bell, closing down 23.90 points.
The big losses in the stock market were predominantly attributable to a big spike in interest rates – particularly the benchmark 10-year U.S. Treasury note. That unusual interest rate spike should have meant that the big Wall Street bank stocks would have led the decliners from the get-go of trading. Instead, in the strangest action I have seen in 32 years, the shares of Citigroup, JPMorgan Chase, Morgan Stanley and Goldman Sachs spiked upward at the opening bell and that spike lasted for almost the next half hour. Then, as if someone had pressed another button, all four of the bank titans began to lose ground within minutes of each other. Citigroup and JPMorgan Chase entered their downward trajectory at exactly 9:48 a.m.; Morgan Stanley and Goldman Sachs began their slump four minutes later at 9:52 a.m. (Goldman Sachs closed modestly lower on the day while the other three banks closed modestly higher.) 
And here’s where things really got interesting yesterday. We took a look at two of the insurance companies that were singled out in the 2017 Financial Stability Report from the U.S. Treasury’s Office of Financial Research for having derivatives exposure to big Wall Street banks: MetLife and Prudential Financial. Those stocks not only also spiked at the open but both companies closed in the green yesterday.

A $1 Trillion Powder Keg Threatens the Corporate Bond Market
[Bloomberg, via Naked Capitalism 10-12-18]
“Bloomberg News delved into 50 of the biggest corporate acquisitions over the last five years, and found: By one key measure, more than half of the acquiring companies pushed their leverage to levels typical of junk-rated peers. But those companies, which have almost $1 trillion of debt, have been allowed to maintain investment-grade ratings by Moody’s Investors Service and S&P Global Ratings…. ‘The rating agencies are giving companies too much wiggle room,’ said Tom Murphy, a money manager at Columbia Threadneedle Investments. ‘There’s been some pretty heroic assumptions around cost savings and debt repayments laid out by some borrowers involved in mergers.””

Wednesday, October 10, 2018

Rev. William Barber - We need to change the moral narrative

Barber delivered a powerful history lesson, explaining that Trump is not a problem, but a symptom of the bigotry and cruelty of the richest and most powerful who counterattacked against the first Reconstruction after the Civil War.

Barber then read a passage from Ezekiel 22: God was angry because priests covering up for politicians who were devouring the poor.

“Your politicians have become like wolves — prowling and killing and taking whatever they want.
And your preachers are covering up for the politicians by pretending to have received visions and revelations; they say this is what God says and I God have not said a thing. And because your politicians are like wolves, and your preachers are covering up for your politicians; extortion is rife; robbery is epidemic; the poor and the needy are being abused; and the immigrants and the strangers are being kicked around at will with no access to justice.”

Sunday, October 7, 2018

Week-end Wrap - October 6, 2018

Week-end Wrap - October 6, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

The Era of Near-Zero Interest Rates Is Over
[Bloomberg, via Naked Capitalism 10-2-18]
The era of zero interest rates in the world’s major economies ended with the Federal Reserve’s decision to raise borrowing costs last week. The average interest rate in developed economies weighted for output passed 1 percent for the first time since 2009, according to JPMorgan Chase & Co. 
Europe Finally Has an Excuse to Challenge the Dollar
Bloomberg, via Naked Capitalism 9-30-18] 
A new plan by Germany, France, Britain, China and Russia to create special financial infrastructure to work with Iran could be a credible challenge to the U.S. dollar’s long global dominance.

A new wave of agitators in the realm of monetary systems has emerged.
By Brett Scott, September 15, 2018 [Huffington Post]

1. Government Money Warriors - Modern monetary theory
2. Bank Money Reformers - Bank money reform groups include the American Monetary Institute, Positive Money, and the International Movement for Monetary Reform.
Commercial banks create new money when they issue loans. The moderate wing of the bank reform movement argues that, because the government grants them this privilege, banks should be subject to greater democratic scrutiny over their lending. The hard-line wing believes bank creation of money should be banned altogether.

Sunday, September 30, 2018

Week-end Wrap - September 29, 2018

Week-end Wrap - September 29, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Simulcasting The Second International Conference of Modern Monetary Theory (#mmtconf18), Friday-Sunday, Sept 28-30, The New School, New York City [via Naked Capitalism]

[BBC, via Naked Capitalism 9-25-18] 
“Judges in Seattle have decided to quash convictions for marijuana possession for anyone prosecuted in the city between 1996 and 2010. City Attorney Pete Homes asked the court to take the step ‘to right the injustices of a drug war that has primarily targeted people of colour.’ Possession of marijuana became legal in the state of Washington in 2012.”

Can the US win a trade war?
By Marshall Auerback, September 22, 2018 [Asia Times, via Naked Capitalism 9-23-18]

The Democratic Party response to Trump's trade war so far has been straight out of an Economics 101 textbook, or a briefing paper by the Council on Foreign Relations. Unfortunately, this response is basically a defense of the economic status quo, which has been disastrous for the living standards of working class Americans.
....the US president is probably right in his implicit assumption that the US, not China, is likely to come out ahead in its steadily intensifying trade conflict with Beijing – at least in the short term, until China can wean itself off its export-led mercantilist growth model.
Here I think Auerback is wrong: China has already weaned itself "off its export-led mercantilist growth model." Just look at how far advanced is China's high speed rail system or how aggressive is China's program of building new electric power generating capacity -- which includes coal fired power plants as well as renewables. This is an aspect of national economic development most economists and USA policy makers simply do not understand: at some point in a country's economic development, it is exporting goods not because it is following an "export-led mercantilist growth model" but simply because it has become the producer of the best, most advanced, and/or most cost effective machinery and technology. Alexander Hamilton, the first USA Treasury Secretary, who designed the basic structure of the USA economy, understood this thoroughly. This is the reason South Korea remains, after China, the world's largest shipbuilder, or that Toyota is now a larger car maker than General Motors or Ford.
Trump’s goal is to disrupt this “Chimerica” nexus and induce bringing supply chains back to the US. However, one potentially adverse outcome is that this policy may be inflationary, by creating short-term bottlenecks as the flow of cheap Chinese imports is disrupted. Furthermore, a tariff, like a devaluation, is expansionary as it diverts demand from foreign to home producers, thereby further contributing to potential inflation. 
For Trump, this might be a reasonable trade-off. But if the president is successful in securing these objectives, he might well find himself winning a trade battle with China, but losing the inflationary war.

Tuesday, September 25, 2018

Oil bites back

Well, the laws of oilfield "gravity" are finally kicking back in. They are:
  1. In spite of small motor-efficiency gains, the demand for oil continues to soar. Those people in China and India who finally got a nice car are not about to park it in the front yard and look at it.
  2. It has been a long time since the discovery of a major oil field. At some point, maybe soon, demand will significantly outstrip supplies. The scramble will be on.
  3. Fracking was a diversion. It cannot succeed because the energy gathered through fracking barely exceeds the energy it takes to frack. It's not easy to rearrange underground rock formations.
  4. The sanctions on Iran may prove a significant boost to their national prospects. Keep it in the ground. By the time sanctions are lifted, the price of oil may have doubled or more. In real economic terms, the price of oil can only go up.
The position of USA is very precarious. For over a generation, this nation has waged war on the middle-east oil nations. Spilled a LOT of blood in the process. Mostly to prove that oil was forever. Well, it's NOT. And the people who can control the global production of oil come from places where people seethe with anger at the very mention of our name. No one owes us any favors. And even with fracking, we are still net importers of petroleum products.

Now IF we had put this problem—one that was already well-defined by 1973—on a WWII footing as Jimmy Carter suggested when when he called the energy problem "the Moral Equivalent Of War," the coming events would be so much easier to manage. Instead, official Washington took to calling his quite reasonable suggestion MEOW. Oh Jimmuh! you were such a pussy. Carter discovered that rational argumentation just wasn't butch enough.

Sunday, September 23, 2018

Week-end Wrap - September 22, 2018

Week-end Wrap - September 22, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

The Spider’s Web: Britain’s Second Empire
[Naked Capitalism 9-22-18]
Until I saw this new film on Saturday, I had the following story -- on how the effects of climate change is now causing an increase in global hungry -- as the lead. But I long ago concluded that it is the financial and economic pressure imposed on companies and countries by predatory financiers -- including but not limited to budget austerity -- that is the fundamental obstacle to solving climate change, and most other problems. Thus, the number one task must be confronting the banksters and financial powers that be. The USA was originally founded in opposition to the economics of the British empire, but American School economics has been almost entirely repressed and replaced by its British free trade nemesis. This also corroborates the lead of the Sept 9. wrap, How the City of London created Eurobonds, destroyed the Bretton Woods world financial system and saved crooks, criminals, and dictators from the rule of law.

The theme of the fight between the British and American schools of political economy is whether a national economy should be controlled by the richest economic elites to suit whatever ends they select, or by the people, to promote the General Welfare. You will see echoes of this theme in most of the stories below.

See also Mainstream Economics Has Become a Celebration of the Wealthy Rentier Class, by Michael Hudson.

Global hunger is no longer decreasing, and is now increasing, because of the effects of climate change
By Charles Benavidez, September 19, 2018 [, via Naked Capitalism 9-20-18]

Sunday, September 16, 2018

Week-end Wrap - September 15, 2018

Week-end Wrap - September 15, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

“Best Ever” Economy? How much credit does Trump deserve for the current state of the economy?
by Invictus, September 10, 2018 [The Big Picture]
Conservative windbag Eric Bolling cited six economic indicators that purportedly show how great the USA economy is doing under Trump:  Unemployment Rate, GDP, Wage Growth, Number of Blacks Employed, Number of Hispanics Employed, and Number of Women Employed, but provided no graphs nor data.
Well, let’s have a look at all six of the items Eric Bolling chose to highlight — all in one handy chart. The St. Louis Fed’s FRED service let’s us do this very easily. We can index all six metrics to 100 at January 2009, when Obama took office, and see how they’ve been doing since. If there’s been a significant improvement (or even reversal of a undesirable trend) since January 2017, it should be easily visible....

Have a look at this chart — it’s un-doctored, except I hid the x-axis labels showing the years. Can you determine when Trump took office? When his policies went into place? Where the Trump economic surge is? ....
The claim that Trump Economy is all that different from the Obama economy — for Civilian Unemployment, for Employment levels of Blacks or Hispanics or Women, for Real GDP or for nominal hourly wages — is unsupported by the actual BLS and BEA data. For the budget deficit, on the other hand, CBO reportsthe deficit is noticeably wider under Trump than what he inherited from his predecessor, and likely to get even worse.

Tuesday, September 11, 2018

Elevator Speech econ #3—Producer vs Predators

I have been reviewing my old posts based on number of pageviews. The readers of this blog are exceedingly perceptive. I also found a potential post that never got the publish button. Interesting because the "elevator speeches" got significant hits. In fact, they will be included in a minor page redesign.

If you are of the mind that the study of economics should concentrate on the actions within a society that provide for the material needs in life, eventually it becomes clear that the most important distinction in life is that there is an enormous difference between talking about a problem and solving one.  Understand this, and the rest of life is details.

(note about this illustration) I came across Thorstein Veblen's famous distinction between business and industry in 1982 and was just dazzled by the implications.  I was living in the American Midwest where the examples of the difference between industrial genius and financial maneuver were just everywhere.  While collecting all these examples, I discovered that this blinding flash of insight wasn't even Veblen's—it belonged to the agrarian radicals who were trying to solve the problems of settling previously untilled lands.  Veblen's father was a particularly fine example of one of those pioneer agrarian problem-solvers so he came by understanding as a child.  (Sure am glad I discovered this idea via Veblen, however!) For a more detailed explanation of the history of Producer-Predator thought, see Chapter Three of Elegant Technology.

But dividing the world into the problem-solving Producers and the Predators who make things worse by talking things to death while cornering the community's resources is much more than a cute parlor trick.  Turns out that the biggie problems facing the planet such as peak oil and climate change exist because of former problem-solving efforts gone wrong.  ANY meaningful plan to address these enormous dilemmas must understand HOW the Producer Classes solve problems so that our next attempts can yield a better outcome.

This idea that only a more enlightened breed of Producers could ever solve the BIG problems would drive the writing of Elegant Technology.  That's what Elegant Technology is—the social and economic support necessary to train and employ the Producers who can solve things like the end of the Age of Petroleum.

Sunday, September 9, 2018

Week-end Wrap - September 8, 2018

Week-end Wrap - September 8, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

How the City of London created Eurobonds, destroyed the Bretton Woods world financial system and saved crooks, criminals, and dictators from the rule of law
by Oliver Bullough, September 7, 2018 [The Guardian, via Naked Capitalism 9-8-18]

Bullough is the author of an interesting new book, Moneyland: Why Thieves And Crooks Now Rule The World And How To Take It Back. It appears that Bullough confirms that it was, once again, the British empire, that imposed massive pain on millions of people worldwide. It is always important to recall that in the 19th century, the political economy of Britain was seen to be a hostile competitor to to the political economy of the United States.

Note also that the British have historically specialized in the banking, hiding, and use of dirty money, with the role of the Hong Kong and Shanghai Bank in the 19th century opium trade particularly notorious. The Hong Shang is today HSBC, which has been fined a number of times by USA and other authorities for assisting and directing the laundering of dirty money for a seemingly endless list of shady clients. Among the directors of HSBC is Jonathan Evans, Lord Evans of Weardale, former Director-General of the British Security Service, the United Kingdom's domestic security and counter-intelligence service, proving that the domination of the world's financial system by criminal means is a matter of state policy for the Brits.

The article is an excerpt from the book, and may be a bit of a slog at first, but this is really crucial information for anyone who wants to know who really runs the world, and how.

Wednesday, September 5, 2018

Are the Saudis

In the fall of 1974, I took what was easily my most interesting course at the University of Minnesota. It was named Energy and Public Policy and was taught by the infinitely curious, snoose-using, balding Minnesota-Swede named Dean Abrahamson. He was a Physics Ph.D., medical doctor, and had also collected a degree in public policy from the soon-to-be Humphrey Institute. He had been pursuing the question "just how dangerous are nuclear power plants?" He thought at first it was a physics question, then a medical question, and finally came to the conclusion that it was a collective public policy question. Along the way, he realized that if nuclear power really was too dangerous to use, he would have to know about the competing energy alternatives. Acid rain dominated the environmental news those days and he judged coal burning as a close second to the dangers of fission. But since the Oil Shock of 1973 was fresh in everyone's memory, Dr. Dean spent a lot of time lecturing on middle east oil.

If that wasn't enough, we had a genuine Saudi student in the class. I paid special attention to his remarks. He rigorously defended the Saudi oil embargo and had a pretty legitimate list of grievances against the oil imperialists. He wasn't overly happy about the cultural imperialism that resulted in young Saudi men imitating the pickups, belt buckles, and boots of the Texas / Oklahoma oil guys. And he thought that oil prices were far too low.

Oops. NOW we are talking. Since the Industrial Revolution had produced a million clever things that needed petroleum to run, folks could get really desperate if they got cut off from their sources of energy. In some applications, such as the fuels needed to run the machinery of a harvest, diesel fuel is extremely time-critical. In real-world terms, that fuel is priceless. Before oil shock #1, such diesel fetched about $0.25 at the pump. Because while this fuel is priceless, the farmer wants to pay as little as possible. Our Saudi student may have had no inkling just how valuable oil is to folks who live in cultures where nearly everything has become powered. But he did know that Saudi Arabia deserved a bigger slice of the pie.

The following story tells the tale that the Saudis are still trying to come to grips with their big but dwindling oil deposits. Those who wanted to take Aramco public still thought it was a good idea to trade oil for paper or reprogrammed computer chips. Those who block this move obviously have different thoughts about the value of oil. Personally, I think it would have been insane for the Saudis to take Aramco public.

Sunday, September 2, 2018

Week-end Wrap - September 1, 2018

Week-end Wrap - September 1, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

The trans-Atlantic elites appear to have settled, in the past few weeks, on their response to Trump's simple minded trade protectionism. The elites' core argument is that protectionist measures threaten the "global value chains" -- the complex web of world suppliers that provide parts and components for almost all manufactured products.

Conspicuously missing from this core argument is the question, "value for whom?". The USA working class did quite well, thank you very much, when USA industrial companies made everything "in house." The most famous example was Ford's River Rouge plant, which old Henry designed and built to swallow ship loads of taconite, coal, limestone and other raw materials at one end, and spew forth each day a gusher of fully assembled automobiles out the other end.

Of course, it was not a bed or roses for the working class. But making everything "in house" gave organized labor a single -- hence very vulnerable -- pressure point to lean on and threaten. Break up the assembly process into a "global value chain" of four or five hundred or more suppliers scattered about the globe, and the United Auto Workers can only make semi- informed guesses as to where is the best place to picket and strike.

Lambert Strether, in his "Water Cooler" each weekday at Naked Capitalism, has done a great job of rounding up news and articles about Trump's trade war. LS's Sept. 1 front page report on the Council of Foreign Relations report was especially excellent, with some pointed comments.

Trade wars won’t fix globalization. Here’s why 
[Council on Foreign Relations, via Naked Capitalism 9-1-18] 

Saturday, September 1, 2018

And a child shall lead them

The wolf also shall dwell with the lamb, and the leopard shall lie down with the kid; and the calf and the young lion and the fatling together; and a little child shall lead them.
Isaiah 11:6 King James Version (KJV)

Most of the scientists I rely on for climate change news are old codgers like myself. They are folks who have devoted their lives to finding the most accurate information their precision instruments can reveal. Great people but there is a bit of "whew, we aren't going to have to deal with the end game ourselves—but folks, it will be really ugly" in their approach. So to read about the young Swedish activist who believes that she has most of her life ahead of her and doesn't want fools to screw up her possibilities, is like breath of fresh air.

I have boldfaced the parts I believe are especially perceptive. There may be hope for the next generation, after all. It is the job of us old codgers to give the young the best roadmap possible for what has, and has not, worked in the past when it comes to social change. And yes, I take this as a mandate. Go Greta!

Thursday, August 30, 2018

Sweden's waste to energy, and other advanced problem-solving

The various schemes to make societies less carbon intensive fall into two categories—conservation of resources, and capture of alternative energy sources. When I wrote Elegant Technology, I was quite enchanted by Sweden's waste disposal system that provided most of the heat necessary to warm their homes during those long dark winters. So it is interesting to see how things have turned out—as seen through the eyes of an Australian documentarian. I am not so enchanted by this waste-to-heat solution as I was 30 years ago—I am pretty much down on fire these days. OTOH, I have not seen a better scheme anywhere else.

Aug 20, 2018

This documentary was done during the run-up to the Copenhagen Climate Change Conference. The most interesting part of this doc is probably the claim that Denmark did not decide to reduce their need for fossil fuels as a reaction to climate change, but as a response to the 1973 oil embargo. This means they have a 45-year head start on most countries—esp.USA.


This is from PBS. It concentrates on Samsø island in Denmark—which has nearly reached the target of complete sustainable energy generation. You will notice there are  tractors in use so they are still importing some petroleum.

Dec 12, 2015

Tuesday, August 28, 2018

Going up the Country

Spent time in Edgar Wisconsin seeing Tony in action. I really like his customers. The majority are probably working farmers or were when they retired. These are the people of my childhood and it is fun to get back into that long-unused social milieu. Since I only interact with these folks rarely, I usually haul out the practices of the Non-Partisan League organizers. They were attempting to politically organize farmers who had a lot of other demands on their time. They were strangers selling a farmer agenda to people who generally agreed that all politicians were crooks. So these were the "rules" of engagement:

1) Realize the farmer you have just met has a bundle of problems—almost all economic. Prices for their products are too low, the cost of their inputs are too high, and the railroads are cleaning up on the traffic both ways. Ect. Discover his story and modify accordingly. Show some empathy.

2) Make sure you cover the social importance of farmers. They are most certainly NOT stupid peasants. If you can grow grain in North Dakota or run a dairy farm in Wisconsin, you can certainly run your own government. A government run by farmers in their own interests is not only possible, but highly desirable. Show genuine interest in how the farmer attempts to solve his particular set of production problems and file them away for future reference.

3) Have a well-thought-out agenda. Explain what a farmer-run government could do to better his economic lot. NPL had a laundry list of things they intended to accomplish including, most importantly, a state-run bank. Amazing how much farmers know about credit problems so this was always an idea that demonstrated daring. And since that bank is still being touted as the runaway success that it is by Ellen Brown to the point where California and LA among a host of others is considering one, the NPL can rightly be considered as this country's most successful progressive movement ever. EVAH!

To anyone who despairs at the rotten state of USA politics, these methods still work. My favorite encounter was with a soon-to-be-retired dairy farmer. He milked 80 cows and sold to, yes, a cheese factory. When I was a child, dairy herds were considered substantial at 40. So he has a lot of work twice a day. His wife is over being a dairy farmer's spouse and wants him to quit. But he claimed that both he and his father plowed back everything in upgrading his farm—lots more than money invested here like pride, effort, planning. This is what we imagine when we hear of the virtues of "family farming." Not many of these folks left. And they are getting old. And if there were still 40% of people farming instead of 2%, I could get elected to high office using the NPL methods exactly the way they used them 100 years ago.

Of course, these methods DO work outside of agriculture. Ask any student about the importance of debt reform. Ask anyone who was left to rot when some Wall Street scam artists bought the town's main factory, looted the pensions, and shipped the machinery to China. Ask someone who got a heart attack and for-profit medicine handed him a $100,000 bill to ensure his heart problems got worse. Ask anyone who despairs at meaningful progress on climate change. And have an agenda that makes sense.

Sunday, August 26, 2018

Week-end Wrap - August 25, 2018

Week-end Wrap - August 25, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

We can still avert climate disaster with a “wartime footing” of switching to renewable energy, but neoliberal economics stands in the way 
by Kate Aronoff, August 14 2018 [The Intercept, via Naked Capitalism 8-19-18]
BY SHIFTING TO a “wartime footing” to drive a rapid shift toward renewable energy and electrification, humanity can still avoid the apocalyptic future laid out in the much-discussed “hothouse earth” paper, a lead author of the paper told The Intercept. One of the biggest barriers to averting catastrophe, he said, has more to do with economics than science.... (The actual title of the paper, a commentary published in the Proceedings of the Natural Academy of Sciences, is “Trajectories of the Earth System in the Anthropocene.”)
....Asked what could be done to prevent a hothouse earth scenario, co-author Will Steffen told The Intercept that the “obvious thing we have to do is to get greenhouse gas emissions down as fast as we can. That means that has to be the primary target of policy and economics. You have got to get away from the so-called neoliberal economics.” Instead, he suggests something “more like wartime footing” to roll out renewable energy and dramatically reimagine sectors like transportation and agriculture “at very fast rates.” 
....Contra much of the apocalyptic coverage around “Trajectories,” runaway climate change of the kind described in Steffen and his co-authors’ paper is very likely preventable. The ways to prevent it just happen to go against the economic logic that has dominated the world economy for the last half-decade, to scale back regulations and give major industries free reign. 
....The paper itself put it in fairly direct terms. “The present dominant socioeconomic system,” the authors wrote, “is based on high-carbon economic growth and exploitative resource use. Attempts to modify this system have met with some success locally but little success globally in reducing greenhouse gas emissions or building more effective stewardship of the biosphere. Incremental linear changes to the present socioeconomic system are not enough to stabilize the Earth system; these include changes in behavior, technology and innovation, governance, and values.”

Exclusive: Some Arctic Ground No Longer Freezing—Even in Winter
[National Geographic via Naked Capitalism 8-23-18]

Germany Has Proven the Modern Automobile Must Die
by Emily Atkin, Augiust 21, 2018 [Wired, via Naked Capitalism 8-22-18]
In 2007, the German government set a goal of reducing Germany's greenhouse gas emissions by 40 percent by the year 2020. So far, Germany has reduced its emissions by 27.7 percent. That is one of the most significant reductions in the world, but it now appears Germany will not achieve the goal set in 2007 in the next two years. The major obstacle that has emerged is the reliance on automobiles for transportation and mobility.

Monday, August 20, 2018

Climate Grief

Below is a pretty good description of what the author calls "climate grief"—the crushing realization that everything at all lovely about this world of ours is dying. I can certainly empathize with his feelings although for myself, grief would be a vast improvement over the the feelings that wash over me whenever I allow myself to think deeply about our rapidly changing climate. In no particular order they are:

Naked Terror. When a person grows up on the high prairie, the idea that mother nature is this incredibly beautiful, benevolent, life-sustaining force is tempered by the reality that mom can easily kill you with tornadoes, howling blizzards, sleet, brutal heatwaves, or tennis-ball-sized hail. When I was 16, I nearly froze to death changing a flat tire less than a half mile from our house in North Dakota. Add a few experiences like this together, and the idea that this will all get a lot worse very soon because humanity conducted an arrogant chemistry experiment in the atmosphere is enough to make me very, very afraid.

The wrath of natural laws. Science teaches a bunch of natural laws that work every time, all the time. Raise the temperature of water to 100°C and it will turn to steam. Step off a cliff, and you will fall to the bottom. This is a world where there is no appeal. This is the world of climate science. Pump excessive CO2 into the atmosphere and the planet will get hotter—of this there is no rational debate.

Head-pounding frustration. I have been writing about environmental matters since the 1980s. Almost all of it can still stand close scrutiny. When I think about the vast possibilities of the sustainable society, I can have feelings close to elation. When I consider that very little has been accomplished compared to the problems, the frustration can be overwhelming.

Disgust at useless symbolism. Nothing upsets me quite like a climate change enthusiast who outlines the sordid tales of woe followed by some lame suggestions of raising consciousness and political organizing, or more conferences followed by targets and carbon taxes. This is the biggest calamity ever faced by humans. Most of us in the "developed" world live in societies powered by fossil fuels at every turn. Without them, we have no drinking water, weather-sheltered housing, food, medicine, or mostly anything else. This infrastructure must be redesigned and rebuilt. Since it required hundreds of years to build what we have—building the new world will take a least a few decades. And that's if we immediately embark on an organized crash program.

The builder's perspective. I have been building things since I can remember. Some of my favorite memories are of industrial tours. I can hardly look at at anything without speculating how it was constructed. And what this has taught me is that everything, and I mean everything, is more difficult to build than anyone can possibly imagine without actually doing it. And even if one has carefully planned out all the relevant operations, it always goes much more quickly in one's head than in the real world where real-world problems show up on a daily basis. Of all the reasons for my despair over not accomplishing anything meaningful about climate change, the saddest fact for me that even those with the necessary credentials to build the new sustainable world will take more time than their worst guesses.

Sunday, August 19, 2018

Week-end Wrap - August 18, 2018

Week-end Wrap - August 18, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

USA Conservatives Calling for New Constitutional Convention to Kill Off the "Welfare State"
by Jamiles Lartey, August 11, 2018 [The Guardian, via Naked Capitalism 8-12-18]
This should be taken very seriously, despite the usual conservative idiocy of equating socialism with a lack of "free dumb." If conservatives, libertarians, and Republicans actually get a convention, they are sure to target the General Welfare mandate for elimination, though they dare not openly talk about it now. Randall G. Holcombe, who served on Governor Jeb Bush's Council of Economic Advisors. in the 2016 campaign, wrote a 1992 article arguing that the major improvement of the Confederate Civil War constitution was the elimination of the General Welfare mandate. They will also enshrine their doctrine of enumerated powers, which has been repeatedly rejected by the Supreme Court until now. They could then proceed at leisure to have the courts, packed with their Federalist Society ideologues, declare programs such as Social Security unconstitutional.
It’s been more than 230 years since America’s last constitutional convention, but there is growing confidence in some conservative circles that the next one is right around the corner – and could spell disaster for entitlement programs like medicare and social security, as well court decisions like Roe v Wade. 
“I think we’re three or four years away,” said the former Oklahoma Senator Tom Coburn on Friday, speaking at the annual convention for American Legislative Exchange Council (Alec) – a powerful rightwing organization that links corporate lobbyists with state lawmakers from across the country. 
Coburn, a veteran Republican lawmaker, now works as a senior adviser for the advocacy group Convention of States, which seeks to use a little known clause in article V of the US constitution to call a constitutional convention for new amendments to dramatically restrict the power of the federal government. 
“We’re in a battle for the future of our country,” Coburn told the assembly of mostly conservative state lawmakers meeting in New Orleans. “We’re either going to become a socialist, Marxist country like western Europe, or we’re going to be free. As far as me and my family and my guns, I’m going to be free."

What you probably don’t know about Social Security
by Alessandra Malito, August 17, 2018 [MarketWatch, via Naked Capitalism]
Social Security works. In fact, in works really well. 
Nancy Altman: The truth about Social Security today is that it works extremely well. It is completely consistent with the founder’s vision and in fact, although some revisionist historians today say the founders wouldn’t recognize it, not only would FDR recognize it today but they’d be shocked that it wasn’t larger and didn’t include Medicare for All, or paid parental leave, or medical leave, because those are all aspects they envisioned. They were very pragmatic, so they wanted to start there. FDR said he didn’t want to start extravagantly because he wanted it to be a success but it was a cornerstone on which to build.

Friday, August 17, 2018

What happens with the new round of sanctions aimed at Russia

Regular readers already know the party line around here is that sanctions have proved very beneficial to the Russian economy because they cut off the country from the worst of the neoliberal economic advice that shows up with integration into the global Washington Consensus institutions. The economics of self-sufficiency has again produced superior results.

One of the details about Russia I learned in 1972 on a tour of Leningrad was that she had within her borders commercial supplies of every element on the periodic table. When I heard that, the thought crossed my mind "if this country could get rid of their economic crackpots, it would be easily the richest country on earth."

Alexander Mercouris presents an informed argument for why Russia is well-prepared for another round of USA sanctions.

Wednesday, August 15, 2018

Is climate change finally going to get proper news coverage?

About ten years ago, I was conversing with a friend whose most interesting characteristic was, IMHO, that he was the only person who had been granted a PH.D in electrical engineering in 1943 from the Massachusetts Institute of Technology. USA was geared up for a major war effort but they also wanted breakthroughs in EE. That he was allowed to finish a degree put him roughly in the same company as the guys who got military deferments to work at Los Alamos. Smartest guy I ever met. Early on that evening, he leaned over and said very seriously, "There is one subject that is so important that every day there should be headlines in 144 pt type in every newspaper in the land. What do you think I am talking about?"

My response of "the only thing I can even think of is climate change" seemed to make him happier. The man is now dead for seven years. And only now do I see that there are a few glimmerings of wider serious interest in the subject. But the conversation, such as it is, is still pretty superficial. This morning I watched Chris Hedges interview none other than James Hansen on climate change. Hedges, ever the divinity student, kept searching for the bad guys, while Hansen pitched carbon taxes and a lawsuit filed in the name of the children who are inheriting our screwed-up atmosphere. While both had somewhat compelling arguments, neither seemed to understand that none of their suggestions would actually move the needle on atmospheric CO2. This was a conversation between a Harvard-educated, Pulitzer-prize-winning former NYT writer and one of USA's great astrophysicists. Too bad they never met my friend.

Below are two samples of what I consider the new awareness spawned by this crazy-hot summer with multiple wildfires including arctic Sweden. We will see what happens. The subject of climate change is just scientific enough so that if someone slept through basic high school chemistry, their judgment must be second-hand—your expert against my expert. In my experience, every climate change denier shows obvious signs of goofing off in science classes—or skipping them entirely. Which means you cannot convince that person with a scientific argument.

Tuesday, August 14, 2018

It's harder than it looks (part...)

Amid the soap opera of Tesla, Musk, and whether the stock market is "properly" valuing the EV car market, it is easy to lose sight of the fact that what Tesla is attempting to accomplish is nothing short of miraculous. Because an electric car can be built by a hard-working shade-tree mechanic, the idea that any established car company should be able to build an EV if they just put their mind to it tends to become a sort of conventional wisdom. Tesla shorts repeat this mantra until big money is involved.

It turns out that an EV is a dramatically different sort of animal because many of the skills required to make an ICE car are simply not relevant. Literally millions of hours have been spent over the years to make a smooth-shifting, reliable, transmission. An EV usually doesn't even need a transmission—or a fuel pump, or a bunch of other things that make cars so complex. But what they do need are reliable batteries—LOTS of them. And the problem of buying enough batteries for a backyard EV conversion do not scale up to the problem of producing thousands of battery packs for long-range vehicles every week.

So all the issues surrounding Tesla's driven, grumpy, charismatic leader are way less important than whether the company can produce enough batteries. And that makes Tesla's boring Nevada gigafactory important enough to (almost) justify its market capitalization—which is higher than GM which makes and sells more than 2.6 million vehicles per year compared to Tesla's goal of 250,000.

Sunday, August 12, 2018

Week-end Wrap - August 11, 2018

Week-end Wrap - August 11, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Trump Tax Cuts Having Significant Impact - On Corporate Profits
August 6, 2018 [Yuxing Sun, via Mike Norman Economics]
Latest financial results from Warren Buffet's Berkshire Hathaway:
Net income rose to $12.01 billion, or $7,301 per Class A share, from $4.26 billion, or $2,592 per share, a year earlier. 
Results also reflected a decline in Berkshire's effective income tax rate to 20 percent from 28.9 percent, following last year's cut in the federal corporate tax rate.

Zero Hedge — Ten Bombshell Revelations From Seymour Hersh's New Autobiography
[Zero Hedge, via Mike Norman Economics 8-8-18]
From a recent The Intercept interview and book review — If Hersh were a superhero, this would be his origin story. Two hundred and seventy-four pages after the Chicago anecdote, he describes his coverage of a massive slaughter of Iraqi troops and civilians by the U.S. in 1991 after a ceasefire had ended the Persian Gulf War. America’s indifference to this massacre was, Hersh writes, “a reminder of the Vietnam War’s MGR, for Mere Gook Rule: If it’s a murdered or raped gook, there is no crime.” It was also, he adds, a reminder of something else: “I had learned a domestic version of that rule decades earlier” in Chicago.
“Reporter” demonstrates that Hersh has derived three simple lessons from that rule:
  • The powerful prey mercilessly upon the powerless, up to and including mass murder.
  • The powerful lie constantly about their predations.
  • The natural instinct of the media is to let the powerful get away with it....

Monsanto ordered to pay $289m damages in Roundup cancer trial 
[Newsy, via Naked Capitalism 8-11-18]

Wells Fargo says hundreds of customers lost homes because of computer glitch
[CNN, via Naked Capitalism 8-5-18]

Trump Is Giving Protectionism a Bad Name
by  William G. Moseley, August 9, 2018 [TripleCrisis , via Naked Capitalism 8-9-18].
As a development geographer and an Africanist scholar, I have long been critical of unfettered free trade because of its deleterious economic impacts on African countries. At the behest of the World Bank and the International Monetary Fund, the majority of African countries were essentially forced, because of conditional loan and debt-refinancing requirements, to undergo free market–oriented economic reforms from the early 1980s through the mid-2000s. One by one, these countries reduced tariff barriers, eliminated subsidies, cut back on government expenditures, and emphasized commodity exports. With the possible exception of Ghana, the economy of nearly every African country undertaking these reforms was devastated.