Today, members of "Blockupy" have effectively blockaded the ECB. This won't last long before the storm troopers are called out but it is a hopeful sign that folks in Europe are at least targeting the most evil of the bad guys.
Friday, May 31, 2013
Protesters target ECB
With some notorious exceptions like the Bank of Japan, central banks are the very essence of today's economic mismanagement. They tend to be staffed almost exclusively by austerians—folks who believe the crises spawned by the banksters should be the perfect opportunity to make life more miserable for the rest of us. And of the world's central banks, the ECB headquartered in Frankfurt Germany is arguably the most reactionary.
Today, members of "Blockupy" have effectively blockaded the ECB. This won't last long before the storm troopers are called out but it is a hopeful sign that folks in Europe are at least targeting the most evil of the bad guys.
Today, members of "Blockupy" have effectively blockaded the ECB. This won't last long before the storm troopers are called out but it is a hopeful sign that folks in Europe are at least targeting the most evil of the bad guys.
Shoddy Solar Panels From China
Sorry folks, but this story sucks so bad it could replace gravity. It's bad enough when honest producers are driven out of business by dumping tactics, it's even worse if those crooked "low-cost" producers are cheating in their methods of production. Dumping is a Predator sin—cutting too many corners is a Producer sin (which is much worse.) Just remember, Predators steal because they have no other options but when Producers cheat (in this case by knowingly making shoddy goods) they are sinning against their class advantage. When Producers cheat by cutting corners, they create an atmosphere where others must now also cheat just to stay in the game.
Of course, dumping should never be confused with public support for infant industry. Difficult tasks have long learning curves. The micro-second financial dealings on Wall Street simply will not support long learning-curve projects. So if a society wants something like solar panels, they must subsidize the development costs. There is a huge gap between inventing and perfecting solar panels and simply setting up a factory to produce them. Cultures that invest in development understandably resent competition that skips these development costs—and cannot even be bothered with turning out a first-rate product.
To make things worse, we have economist / bureaucrats who actually think that government subsidies provided to companies engaged in long learning-curve projects should be treated the same as government-supported dumping. Understanding this absurd confusion is critically important because if cultures are not permitted to subsidize the development of the difficult (in order to appease the neoliberal gods), then there are NO problems we can solve. This isn't simply a matter of industrial stagnation—we already have that here in USA—this is actually about the survival of a planet that supports human life.
Of course, dumping should never be confused with public support for infant industry. Difficult tasks have long learning curves. The micro-second financial dealings on Wall Street simply will not support long learning-curve projects. So if a society wants something like solar panels, they must subsidize the development costs. There is a huge gap between inventing and perfecting solar panels and simply setting up a factory to produce them. Cultures that invest in development understandably resent competition that skips these development costs—and cannot even be bothered with turning out a first-rate product.
To make things worse, we have economist / bureaucrats who actually think that government subsidies provided to companies engaged in long learning-curve projects should be treated the same as government-supported dumping. Understanding this absurd confusion is critically important because if cultures are not permitted to subsidize the development of the difficult (in order to appease the neoliberal gods), then there are NO problems we can solve. This isn't simply a matter of industrial stagnation—we already have that here in USA—this is actually about the survival of a planet that supports human life.
Thursday, May 30, 2013
Euro energy update
North America and Europe have both seen declines in their output of greenhouse gasses. Normally, we would think this is great news around here. We are going to restrain our glee for the simple reason that virtually all of these declines can be attributed to slower economies and a warm winter in 2011 while only a little (if any) can be chalked up to introduction of new technologies.
Tuesday, May 28, 2013
Solar dumping update
The Chinese are about to discover what the Japanese automakers learned before them—Europe is not the USA when it comes to giving up industrial turf. It actually looks like EU Trade Commissioner Karel de Gucht is willing to trigger a trade war over solar panels. You can hardly blame him. After all, the Europeans have put a lot of public money into the development of their Green industry—why should they give that up for a cheap trade-war trick like dumping?
I find this dispute fascinating and have covered it in the past. See also:
- July 20, 2012 The solar industry is now officially "mature"
- November 8, 2012 Solar panel trade war heats up
- August 21, 2012 Solar-panel "oversupply"
Monday, May 27, 2013
Zombie theories
The evidence the climate is changing is literally overwhelming. And yet there is doubt. This seems especially acute in English-speaking world. So the following from Australia is probably relevant in USA too. It is really quite depressing to realize just how shallow the roots of scientific understanding actually are. This is especially unfortunate when the subject is climate change because our understanding must be based on scientific reasoning. Don't understand how science works and you can literally believe anything.
Now it is highly unlikely we can convince everyone who slept through science class to upgrade their understanding, but we should be able to insist as a society on some minimal scientific literacy in journalism and other forms of public communication. I would be hugely entertained watching the local TV newsreaders take some basic science tests on-air.
Now it is highly unlikely we can convince everyone who slept through science class to upgrade their understanding, but we should be able to insist as a society on some minimal scientific literacy in journalism and other forms of public communication. I would be hugely entertained watching the local TV newsreaders take some basic science tests on-air.
Building on the cheap—Moore, Oklahoma
Oklahoma was a strange place to visit when I was kid. My dad's brother lived in Bartlesville which was a company town for Phillips 66 in those days. This was a town where some of the oil business's intelligentsia lived. Folks who are not especially familiar with oil tend to be surprised when I tell them just how many highly educated specialists (geologists, refinery designers, chemists, engineers, etc.) it takes to get that dino juice to your neighborhood gas station. When my uncle retired from Phillips, they presented him with a leather-bound collection of the patents that had been granted to Phillips with his name on them. There were 12 and some were quite significant.
I once mentioned to my cousin how impressed I had been by that collection. He laughed and said, "One of our neighbors invented styrene which pretty much reduced the rest of the neighborhood to peasant status." And there was a significant difference between the technological wizards that made Phillips the go-to company for innovation, and the folks at the top who ran things—as was made painfully clear when T. Boone Pickens blackmailed Phillips in a hostile takeover attempt that essentially destroyed lovely little Bartlesville. As I discovered from Pickens' raid, the oil business is like that—some of the most talented members of the Producer Classes are working for some of the most ruthless Predators (think Dick Cheney) on earth.
Producers—even those with the most skills—are often (usually?) painfully naive politically. And when you work for companies that are run by the utterly ruthless, your politics will often mimic the company line. My uncle's politics were so extremely right-wing, my father would mumble about them for hours on the drive back to Minnesota. And as I discovered over the years, the political agenda set by the Predatory oil company executives has come to absolutely dominate the whole state. As proof, Oklahoma is currently represented by two of the most extreme Senators in the land. James Inhofe seems absolutely convinced that Climate Change is a hoax—much to the approval of the top executives of big oil.
But denying the reality of Climate Change in Oklahoma can be hazardous to your health—as residents, including children, discovered when a monster F5 tornado flattened a suburb of Oklahoma City and killed them. What is especially interesting about this tale of madness is that the 2013 tornado followed almost exactly the same track of an F5 tornado that destroyed a lot of the same town in 1999. So even though people knew they were living in a tornado alley, they could not be bothered to build safe rooms in elementary schools—or even follow the state's building codes. Such anti-regulatory extremism likely came from on high—from the oil executives who buy anti-regulatory politicians. And so schools in a known tornado alley were built without enough rebar in the concrete. Starving public infrastructure is so politically acceptable in Oklahoma they will cut corners on something as cheap as freaking rebar! (You cannot make this stuff up.)
I once mentioned to my cousin how impressed I had been by that collection. He laughed and said, "One of our neighbors invented styrene which pretty much reduced the rest of the neighborhood to peasant status." And there was a significant difference between the technological wizards that made Phillips the go-to company for innovation, and the folks at the top who ran things—as was made painfully clear when T. Boone Pickens blackmailed Phillips in a hostile takeover attempt that essentially destroyed lovely little Bartlesville. As I discovered from Pickens' raid, the oil business is like that—some of the most talented members of the Producer Classes are working for some of the most ruthless Predators (think Dick Cheney) on earth.
Producers—even those with the most skills—are often (usually?) painfully naive politically. And when you work for companies that are run by the utterly ruthless, your politics will often mimic the company line. My uncle's politics were so extremely right-wing, my father would mumble about them for hours on the drive back to Minnesota. And as I discovered over the years, the political agenda set by the Predatory oil company executives has come to absolutely dominate the whole state. As proof, Oklahoma is currently represented by two of the most extreme Senators in the land. James Inhofe seems absolutely convinced that Climate Change is a hoax—much to the approval of the top executives of big oil.
But denying the reality of Climate Change in Oklahoma can be hazardous to your health—as residents, including children, discovered when a monster F5 tornado flattened a suburb of Oklahoma City and killed them. What is especially interesting about this tale of madness is that the 2013 tornado followed almost exactly the same track of an F5 tornado that destroyed a lot of the same town in 1999. So even though people knew they were living in a tornado alley, they could not be bothered to build safe rooms in elementary schools—or even follow the state's building codes. Such anti-regulatory extremism likely came from on high—from the oil executives who buy anti-regulatory politicians. And so schools in a known tornado alley were built without enough rebar in the concrete. Starving public infrastructure is so politically acceptable in Oklahoma they will cut corners on something as cheap as freaking rebar! (You cannot make this stuff up.)
Saturday, May 25, 2013
Skipping economic development steps
When I was at the University of Minnesota, I had a roommate from Bangladesh for a year. He used to say something I thought preposterous, "We will advance from pre-indistrialization to post-industrialization and just skip the problems that come from industrialization." The reason I thought this so preposterous is that I was one of those creatures who thought if you wanted to do industrialization right, you simply had to take all the necessary steps—especially those like making machine tools that came with the lessons of precision. "Not possible!" I would sputter.
I still advise against taking shortcuts. Learning all the steps produces an economy with a near infinity of possibilities. Contrast South Korea—a country that carefully learned all the steps of industrialization and China which skipped a bunch and still relies heavily on runaway "screwdriver" industrialization. The result is that Korea has companies that can build things no one else on the planet can build—China seems like it is decades from that stage.
But my friend from Bangladesh was right in one respect—there ARE perfectly sterling example of skipping stages that have worked very well, thank you very much. The story is told of how Frank Zappa met with Vaclav Havel not long after the collapse of the Eastern Bloc. Czechoslovakia was left with an utterly pathetic telephone system. Zappa's advice was not to even try to fix those land lines and go straight to cellular. (Remember, in the early 1990s, this was still pretty radical advice.) And so it happened. Czechoslovakia went from having one of the worst phone systems to one of the best in less than a decade. And one of the things that facilitated that process was the fact that there was nothing about the old system worth saving.
Now that solar cells have reached the semi-commodity stage, the economic benefits of solar are now so easy to prove, and installation nearly routine, we should see big-time "stage-skipping" in those lesser developed nations that don't have a bunch of installed energy infrastructure to displace. Many of these countries have spectacular solar collection sites. Here we see a piece by France's 24 about Morocco's commitment to solar. They have a lot of solar energy to collect. If they do this right, they will significantly change their lives—I believe for the better.
I still advise against taking shortcuts. Learning all the steps produces an economy with a near infinity of possibilities. Contrast South Korea—a country that carefully learned all the steps of industrialization and China which skipped a bunch and still relies heavily on runaway "screwdriver" industrialization. The result is that Korea has companies that can build things no one else on the planet can build—China seems like it is decades from that stage.
But my friend from Bangladesh was right in one respect—there ARE perfectly sterling example of skipping stages that have worked very well, thank you very much. The story is told of how Frank Zappa met with Vaclav Havel not long after the collapse of the Eastern Bloc. Czechoslovakia was left with an utterly pathetic telephone system. Zappa's advice was not to even try to fix those land lines and go straight to cellular. (Remember, in the early 1990s, this was still pretty radical advice.) And so it happened. Czechoslovakia went from having one of the worst phone systems to one of the best in less than a decade. And one of the things that facilitated that process was the fact that there was nothing about the old system worth saving.
Now that solar cells have reached the semi-commodity stage, the economic benefits of solar are now so easy to prove, and installation nearly routine, we should see big-time "stage-skipping" in those lesser developed nations that don't have a bunch of installed energy infrastructure to displace. Many of these countries have spectacular solar collection sites. Here we see a piece by France's 24 about Morocco's commitment to solar. They have a lot of solar energy to collect. If they do this right, they will significantly change their lives—I believe for the better.
Friday, May 24, 2013
The economic absurdity of fracking
James Kunstler over at Clusterfuck nation may be excessively cranky about the current social-political order and sometimes given to speculations on motives that might seem a little wild, but when it comes to his main subject—the end of the age of petroleum and the need to ponder what this will mean—the man is brilliant. This week he provided an excellent example.
If you want to live with old infrastructure...
you better be a bunch of compulsive maintenance freaks.
Jus' sayin'!
The Interstate 5 Bridge over the Skagit River in Washington state collapsed around 7 p.m. on Thursday, dumping cars and people into the water.
This, folks, is embarrassing.
Jus' sayin'!
The Interstate 5 Bridge over the Skagit River in Washington state collapsed around 7 p.m. on Thursday, dumping cars and people into the water.
This, folks, is embarrassing.
Thursday, May 23, 2013
Why cap-and-trade is failing in the E.U.
As regular readers know, I think cap and trade is a stupendously bad idea. I have brought this up before. Here are two recent examples.
- April 4, 2013 Cap-and-trade is still a bad idea
- April 19, 2013 Selling indulgences for carbon emissions does not work
Wednesday, May 22, 2013
Wagner—on his 200th birthday
When I was singing with the Minnesota Bach Society, we were asked to provide the chorus for a symphonic performance of Wagner's Tannhäuser with the Minnesota Orchestra. To be perfectly honest, I was not exactly thrilled about this. I had signed up to sing the delicate polyphonic melodies of Bach—not the heavy and oh-so-serious operas of Wagner. Not surprisingly, I discovered that singing Wagner was a real hoot and Tannhäuser was not the endurance contest of the Ring Cycle. I also discovered that there are SERIOUS Wagner fans. I am still mainly a Bach fan, but I have read some of the scholarship, seen the Festspielhaus in Bayreuth, and visited the Herrenchiemsee—one of the more lavish palaces of Ludwig II, Wagner's main patron—in an attempt to understand what all the fuss is about.
Wagner's politics have been discussed in minutest detail over the years—mostly because one of his biggest fans was Hitler. This is probably a mistake because as I have discovered in life, outside of music it's probably a bad idea to discuss any other subject with a musician. The reason is simple—music is such a complex subject and requires so much practice in order to do well, anyone who gets good at music hasn't had a lot of time to master much else. When the musician is Wagner, the music itself is so complicated, discussions of his politics is usually just a distraction for those who cannot or will not deal with the complexities of his music.
Me? I intend to celebrate the occasion by listening to Tannhäuser one more time and wonder again if the mere act of asserting that the essence of love is lust is such a serious crime, it requires acts of redemption. Really?
Wagner's politics have been discussed in minutest detail over the years—mostly because one of his biggest fans was Hitler. This is probably a mistake because as I have discovered in life, outside of music it's probably a bad idea to discuss any other subject with a musician. The reason is simple—music is such a complex subject and requires so much practice in order to do well, anyone who gets good at music hasn't had a lot of time to master much else. When the musician is Wagner, the music itself is so complicated, discussions of his politics is usually just a distraction for those who cannot or will not deal with the complexities of his music.
Me? I intend to celebrate the occasion by listening to Tannhäuser one more time and wonder again if the mere act of asserting that the essence of love is lust is such a serious crime, it requires acts of redemption. Really?
This time I won't wag my finger
"How do you stop people who will stop at nothing?"
For me, this was the most interesting question from the 2008 film Battle in Seattle about the 1999 anti-WTO protest that successfully halted (for a few minutes) the forces of globalization. Now Chris Hedges addresses the same problem. This is a man who once had a platform at the New York Times. He was someone who actually had a little influence in a world where almost no one has any. He looks at the plans the bad guys have for the rest of us and comes to the conclusion that we must either "rise up or die."
As a practical matter, the interesting question must be, "Rise up to do what?" I have been trying to answer this question for almost 30 years and trust me on this, there are NO easy answers and all the useful ones absolutely require conditions of peace to implement. So I am not one to beat the drum of revolution. I am in agreement with John Lennon who wrote in Revolution that he wanted "to see the plan" from those advocating toppling the system. So I have spent my adult life looking for a plan that would have at least a minimal chance of actually improving the human condition.
Even though I believe I have found most of the elements for a good post-revolutionary plan based on a combination of historical research and an enduring belief in the powers of human innovation, I am a LONG way from signing on to any change scheme that involves explosions (no matter how pleasant it may be to contemplate the head of Lloyd Blankfein on a pike.) Even so, I am also a long way from condemning Hedges for his call for a revolution. There have been a bunch of bad guys in history but the crowd destroying the planet these days makes even guys like Genghis Khan look pretty harmless. If Hedges can slow down these evildoers, more power to him.
For me, this was the most interesting question from the 2008 film Battle in Seattle about the 1999 anti-WTO protest that successfully halted (for a few minutes) the forces of globalization. Now Chris Hedges addresses the same problem. This is a man who once had a platform at the New York Times. He was someone who actually had a little influence in a world where almost no one has any. He looks at the plans the bad guys have for the rest of us and comes to the conclusion that we must either "rise up or die."
As a practical matter, the interesting question must be, "Rise up to do what?" I have been trying to answer this question for almost 30 years and trust me on this, there are NO easy answers and all the useful ones absolutely require conditions of peace to implement. So I am not one to beat the drum of revolution. I am in agreement with John Lennon who wrote in Revolution that he wanted "to see the plan" from those advocating toppling the system. So I have spent my adult life looking for a plan that would have at least a minimal chance of actually improving the human condition.
Even though I believe I have found most of the elements for a good post-revolutionary plan based on a combination of historical research and an enduring belief in the powers of human innovation, I am a LONG way from signing on to any change scheme that involves explosions (no matter how pleasant it may be to contemplate the head of Lloyd Blankfein on a pike.) Even so, I am also a long way from condemning Hedges for his call for a revolution. There have been a bunch of bad guys in history but the crowd destroying the planet these days makes even guys like Genghis Khan look pretty harmless. If Hedges can slow down these evildoers, more power to him.
Monday, May 20, 2013
Electrical storage alternatives
Outside of discovering new and more efficient ways to move green power around, the holy grail of renewables is storage. And in some ways, I am not convinced the storage problem will ever be solved. In fact, I am more or less convinced that with renewables, we must "make hay while the sun shines." In other words, we use the energy when it is available and get along without when it is not. Of course, this unreliability is pretty much what doomed sailing except for fun. It is obvious that given a choice between an intermittent power source and a reliable one, folks will chose reliability in a heartbeat.
So no matter how unpromising, folks will pursue electrical storage because it will most certainly have a ready market if anyone actually makes some scheme work. So with another hat tip to K. Fathi, here is a damn good look at the various storage technologies and a guess at how likely any of them are to succeed.
So no matter how unpromising, folks will pursue electrical storage because it will most certainly have a ready market if anyone actually makes some scheme work. So with another hat tip to K. Fathi, here is a damn good look at the various storage technologies and a guess at how likely any of them are to succeed.
Sunday, May 19, 2013
Penny Pritzker as an example of the criminality of our elites
Le secret des grandes fortunes sans cause apparente est un crime
oublié, parce qu' il a été proprement fait." - Honoré de Balzac, Le Père Goriot
"The secret of a great success for which you are at a loss to account is a crime that has never been found out, because it was properly executed," more dramatically rendered in English as "Behind every great fortune lies a great crime."
President Obama is nominating his top fund raiser, Penny Pritzker, to be Secretary of Commerce. Incredibly - perhaps I should write, sadly - the announcement is causing hardly a stir among the liberal and progressive blogosphere. At the very least, Greg Palast's May 4, 2013 post at Smirking Chimp, Billionaire Bankster Breaks into Obama’s Cabinet, should be going viral. Palast wrote:
Even President Obama rushed to show that he was likewise uninformed, ignorant, and unaware, though at this point I'm not about to attach the labels "liberal" or "progressive" to him.
"She's built companies from the ground up," Obama said. "She knows from experience that no government program alone can take the place of a great entrepreneur."
There once were, in most every city, old labor and socialist organizers, veterans of the labor strife of the 1920s and 1930s, you could sit down with in a neighborhood tavern, and during the course of an evening, well lubricated by a few pitchers of beer, tell you more than you really wanted to know about who was actually running your town. How the police chief's kids got really good paying jobs because the chief would not make too many inquiries about (in other words, would remain deliberately uninformed, ignorant, and unaware) the prostitution on the West Side; or the numbers racket along the riverfront; or the freight pilferage at the airport. How the mayor's wife was able to drive around in a brand new Cadillac because a certain tract of land had been quietly rezoned, to the advantage a mayoral crony. Such petty corruption used to be the stock in trade of good local investigative reporters at big metropolitan newspapers, back in a nearly forgotten era when FCC rules made it nearly impossible for one or two corporate behemoths to own every major newspaper, radio station, and television station in one city.
Many of you already know that I used to be an economics correspondent, and that I burned out and became depressed watching Wall Street have its way in the early 1990s in what was called, back then, "off balance sheet liabilities" (what we today call "financial derivatives" - the stuff, like credit default swaps, that blew up in 2007 through 2008, and left a dismaying amount of the world's economy in ashes). Well, that's not really the whole truth. About what got me depressed, that is. So, tonight, you're going to learn a bit more of the truth. You're going to learn some of the dark, frightful secrets hidden away in my memory; stuff I usually don't mention, because it makes a lot of people very uncomfortable.
In a word, the mob. Organized crime. The syndicate. In Chicago, it was called the Outfit. But every major city had its own crime family, or branch thereof. You see, part of what I researched and wrote about in that depressing period of nearly a quarter century ago was how the billions of dollars, nay, hundreds of billions of dollars that were fueling what was politely called mergers and acquisitions, most especially including leveraged buy outs, came from, not entirely, but in large part, organized crime. That included hundreds of billions of dollars that the Wall Street banks laundered from illegal narcotics trafficking, including heroin and cocaine. The beginnings of financial derivatives were closely tied to the mob going legit.
So, the Reagan regime of deregulation was really a double whammy. It basically decriminalized the worst behavior of banks and corporations, at the very time that some of the most immoral, ruthless, indeed murderous, people in America were buying legitimacy for themselves and their heirs by seizing control, through brazen manipulation of debt and stock markets, of America's industrial companies.
The story of the hour is Penny Pritzker becoming Secretary of Commerce. So, tonight, you're going to learn about the Pritizker family and its fortune. I suspect that it's probably more than you want to know.
The origins of the Pritzker family fortune was her grandfather's mob connections when he was a tax attorney for a lot of people in "The Outfit," the Chicago mob, beginning under Al Capone, and continuing through the 1980s. This connection to organized crime was reportedly what financed the creation of Hyatt Hotels by Penny's father. There was no crime involved, but the financial backing came from organized crime, plain and simple. The details are in Gus Russo's 2006 tome Supermob: How Sidney Korshak and His Criminal Associates Became America's Hidden Power Brokers. Russo's book is crucial reading for anyone trying to understand why America's ruling elites are, well, so bad. It's not really a matter of incompetence or ineptitude. Rather, it is a case study in how the republican (small "r", not capital "R" as in the Republican Party, or GOP - greedy old pricks) ideals of public virtue, the general welfare, and economic and political equality, are forgotten and eventually undermined by allowing a criminal class to become legitimate and amass political and economic influence. The story of the Pritzker family is an all-American story, of how a family with ties to organized crime amasses a great fortune while striving relentlessly for legitimacy, and arrives at the pinnacle of economic and political power in America. Chris Hedges is not exaggerating when he states that "the criminal class in this country has seized power."
This ascent to America's summits is an oft-trod trek, pioneered by Boston and Newport maritime merchants who parlayed opium and millions of ruined lives in China into wealth, respectability, and power in the 1800s. Many of the mercantile banks established along the way are still with us, brightened and prettified by numerous changes in corporate branding. The one constant is the ruthless concentration on private gain. The extent to which that concentration on private gain is tempered and ameliorated by fleeting notions of public service provides the cracks and crevices in which the ebb and flow of history eddy and swirl.
Now, you can point to the Kennedy family as an example of ill-begotten gains leading to some very good minded public service. But Penny Pritzker's roles at Hyatt and Superior Bank are, to say the least, highly troubling, and cast doubt on the idea that she may be anywhere near as mindful of the general welfare as John, Bobby, and Edward Kennedy were. Instead of public service, the tradition in the Pritzker family seems focused on economic exploitation of others, skirting the law as much as possible, and shady dealings. There is a strong tradition in the Pritzker family of outright money laundering and offshore tax evasion.
oublié, parce qu' il a été proprement fait." - Honoré de Balzac, Le Père Goriot
"The secret of a great success for which you are at a loss to account is a crime that has never been found out, because it was properly executed," more dramatically rendered in English as "Behind every great fortune lies a great crime."
President Obama is nominating his top fund raiser, Penny Pritzker, to be Secretary of Commerce. Incredibly - perhaps I should write, sadly - the announcement is causing hardly a stir among the liberal and progressive blogosphere. At the very least, Greg Palast's May 4, 2013 post at Smirking Chimp, Billionaire Bankster Breaks into Obama’s Cabinet, should be going viral. Palast wrote:
Pritzker’s net worth is listed in Forbes as $1.8 billion, which is one hell of a heavy magic wand in the world of politics. Her wand would have been heavier, and her net worth higher, except that in 2001, the federal government fined her and her family $460 million for the predatory, deceitful, racist tactics and practices of Superior, the bank-and-loan-shark operation she ran on the South Side of Chicago.There were also a couple diaries on DailyKos, including by front pager Laura Clawson, who called attention to Pritzker's and her family's role in Hyatt Hotels, which has compiled what may be the worst records of labor abuses in the hotel industry. Incredibly, just to prove, I suppose, how hopelessly uninformed, ignorant, and unaware liberals and progressives can be, someone posted in one of the first comments, "She's not the monster you think she is."
Superior was the first of the deregulated go-go banks to go bust – at the time, the costliest failure ever. US taxpayers lost nearly half a billion dollars. Superior’s depositors lost millions and poor folk in Sen. Obama’s South Side district lost their homes.
Even President Obama rushed to show that he was likewise uninformed, ignorant, and unaware, though at this point I'm not about to attach the labels "liberal" or "progressive" to him.
"She's built companies from the ground up," Obama said. "She knows from experience that no government program alone can take the place of a great entrepreneur."
There once were, in most every city, old labor and socialist organizers, veterans of the labor strife of the 1920s and 1930s, you could sit down with in a neighborhood tavern, and during the course of an evening, well lubricated by a few pitchers of beer, tell you more than you really wanted to know about who was actually running your town. How the police chief's kids got really good paying jobs because the chief would not make too many inquiries about (in other words, would remain deliberately uninformed, ignorant, and unaware) the prostitution on the West Side; or the numbers racket along the riverfront; or the freight pilferage at the airport. How the mayor's wife was able to drive around in a brand new Cadillac because a certain tract of land had been quietly rezoned, to the advantage a mayoral crony. Such petty corruption used to be the stock in trade of good local investigative reporters at big metropolitan newspapers, back in a nearly forgotten era when FCC rules made it nearly impossible for one or two corporate behemoths to own every major newspaper, radio station, and television station in one city.
Many of you already know that I used to be an economics correspondent, and that I burned out and became depressed watching Wall Street have its way in the early 1990s in what was called, back then, "off balance sheet liabilities" (what we today call "financial derivatives" - the stuff, like credit default swaps, that blew up in 2007 through 2008, and left a dismaying amount of the world's economy in ashes). Well, that's not really the whole truth. About what got me depressed, that is. So, tonight, you're going to learn a bit more of the truth. You're going to learn some of the dark, frightful secrets hidden away in my memory; stuff I usually don't mention, because it makes a lot of people very uncomfortable.
In a word, the mob. Organized crime. The syndicate. In Chicago, it was called the Outfit. But every major city had its own crime family, or branch thereof. You see, part of what I researched and wrote about in that depressing period of nearly a quarter century ago was how the billions of dollars, nay, hundreds of billions of dollars that were fueling what was politely called mergers and acquisitions, most especially including leveraged buy outs, came from, not entirely, but in large part, organized crime. That included hundreds of billions of dollars that the Wall Street banks laundered from illegal narcotics trafficking, including heroin and cocaine. The beginnings of financial derivatives were closely tied to the mob going legit.
So, the Reagan regime of deregulation was really a double whammy. It basically decriminalized the worst behavior of banks and corporations, at the very time that some of the most immoral, ruthless, indeed murderous, people in America were buying legitimacy for themselves and their heirs by seizing control, through brazen manipulation of debt and stock markets, of America's industrial companies.
The story of the hour is Penny Pritzker becoming Secretary of Commerce. So, tonight, you're going to learn about the Pritizker family and its fortune. I suspect that it's probably more than you want to know.
The origins of the Pritzker family fortune was her grandfather's mob connections when he was a tax attorney for a lot of people in "The Outfit," the Chicago mob, beginning under Al Capone, and continuing through the 1980s. This connection to organized crime was reportedly what financed the creation of Hyatt Hotels by Penny's father. There was no crime involved, but the financial backing came from organized crime, plain and simple. The details are in Gus Russo's 2006 tome Supermob: How Sidney Korshak and His Criminal Associates Became America's Hidden Power Brokers. Russo's book is crucial reading for anyone trying to understand why America's ruling elites are, well, so bad. It's not really a matter of incompetence or ineptitude. Rather, it is a case study in how the republican (small "r", not capital "R" as in the Republican Party, or GOP - greedy old pricks) ideals of public virtue, the general welfare, and economic and political equality, are forgotten and eventually undermined by allowing a criminal class to become legitimate and amass political and economic influence. The story of the Pritzker family is an all-American story, of how a family with ties to organized crime amasses a great fortune while striving relentlessly for legitimacy, and arrives at the pinnacle of economic and political power in America. Chris Hedges is not exaggerating when he states that "the criminal class in this country has seized power."
This ascent to America's summits is an oft-trod trek, pioneered by Boston and Newport maritime merchants who parlayed opium and millions of ruined lives in China into wealth, respectability, and power in the 1800s. Many of the mercantile banks established along the way are still with us, brightened and prettified by numerous changes in corporate branding. The one constant is the ruthless concentration on private gain. The extent to which that concentration on private gain is tempered and ameliorated by fleeting notions of public service provides the cracks and crevices in which the ebb and flow of history eddy and swirl.
Now, you can point to the Kennedy family as an example of ill-begotten gains leading to some very good minded public service. But Penny Pritzker's roles at Hyatt and Superior Bank are, to say the least, highly troubling, and cast doubt on the idea that she may be anywhere near as mindful of the general welfare as John, Bobby, and Edward Kennedy were. Instead of public service, the tradition in the Pritzker family seems focused on economic exploitation of others, skirting the law as much as possible, and shady dealings. There is a strong tradition in the Pritzker family of outright money laundering and offshore tax evasion.
Japan—here we go
The news out of Japan is not surprising to anyone remotely interested in the economics of development. Just remember, the great outburst of development economics here in USA was most embraced (some say invented) by those closest to the frontiers where folks were attempting to turn virgin soils into farms and towns. The only state bank is in North Dakota. The People's Party was formed in Omaha. Thorstein Veblen grew up in Minnesota the son of an actual pioneer. Our people have been thinking about the economics of development since at least 1873 so we have a pretty clear-eyed view of what works under adverse conditions. And since Abenomics is a more or less an A+ incarnation of everything we believe about how societies grow and prosper, it's not surprising it's beginning to succeed. We are usually right about these things.
Of course, just because Abenomics is off to a rollicking start does not mean it will be a long-term success. The most important factor will be just how long the Japanese are willing to stick to their expansionary plans. Here in USA, we have a perfect cautionary take. FDR began his Keynesian expansion in 1933 but lost his nerve in 1937 when he started listening to the budget-balancing devils in his head. It only took a few months before the nasty Depression had returned and would continue until USA started gearing up its war machine in advance of its entry into WW II (1941). Only when FDR became consumed with war fever did his government approve of a Keynesian stimulus large enough finally end the Great Depression.
What is especially interesting about the following article from Business Insider is that it relies on what in the old days was that most trusted of economic indicators—machine tool orders. I am certain Tony would approve—I know I do.
Of course, just because Abenomics is off to a rollicking start does not mean it will be a long-term success. The most important factor will be just how long the Japanese are willing to stick to their expansionary plans. Here in USA, we have a perfect cautionary take. FDR began his Keynesian expansion in 1933 but lost his nerve in 1937 when he started listening to the budget-balancing devils in his head. It only took a few months before the nasty Depression had returned and would continue until USA started gearing up its war machine in advance of its entry into WW II (1941). Only when FDR became consumed with war fever did his government approve of a Keynesian stimulus large enough finally end the Great Depression.
What is especially interesting about the following article from Business Insider is that it relies on what in the old days was that most trusted of economic indicators—machine tool orders. I am certain Tony would approve—I know I do.
Saturday, May 18, 2013
Friday, May 17, 2013
Climate change and Peak Oil—the evidence is overwhelming
One of the main reasons why I have such a short fuse around folks who deny Climate Change or Peak Oil and then expect you to treat them seriously is that I never know whether they are just incredibly lazy or hopelessly ignorant—and neither trait is especially flattering. The science that backs both concepts is not only overwhelming, but is especially easy to understand—we're not talking about the "holes" that migrate through semi-conductors or dark matter, after all.
I remember my first impressions of Marion King Hubbert and his descriptions of the life cycle of oil fields writ large he called Peak Oil. I mean, not only did the guy have a name one could easily associate with the awl bidnuss, his descriptions of the yield curve sounded like the sort of thing all the oil guys I had ever known would say. So I have been waiting for a real oil guy to come to Hubbert's defense. Thanks to K. Fathi, I just read a good one. It is a pretty clear description of the frustrations encountered by the Producer Class subset of the oil industry when trying to describe their reality to an "investment strategist."
Following that we have a study that counts up the percentage of peer-reviewed science papers on Climate Change. Spoiler alert: Of more than 4,000 academic papers published over 20 years, 97.1% agreed that climate change is anthropogenic. What makes this article especially interesting is that it speculates about a world where even 97% scientific agreement won't change a lot of minds—especially in the general public where the issues have become so muddied—and suggests that efforts be concentrated on working the decision-making elites.
I remember my first impressions of Marion King Hubbert and his descriptions of the life cycle of oil fields writ large he called Peak Oil. I mean, not only did the guy have a name one could easily associate with the awl bidnuss, his descriptions of the yield curve sounded like the sort of thing all the oil guys I had ever known would say. So I have been waiting for a real oil guy to come to Hubbert's defense. Thanks to K. Fathi, I just read a good one. It is a pretty clear description of the frustrations encountered by the Producer Class subset of the oil industry when trying to describe their reality to an "investment strategist."
Following that we have a study that counts up the percentage of peer-reviewed science papers on Climate Change. Spoiler alert: Of more than 4,000 academic papers published over 20 years, 97.1% agreed that climate change is anthropogenic. What makes this article especially interesting is that it speculates about a world where even 97% scientific agreement won't change a lot of minds—especially in the general public where the issues have become so muddied—and suggests that efforts be concentrated on working the decision-making elites.
Thursday, May 16, 2013
Solar has definitely arrived
Over the years, there have been thousands of community-activist types who have marched and demonstrated in favor of using solar power. What is ironic about this sort of activism is that the serious advances in the solar-collecting art were accomplished by boring nerds who went to work in their labs every day trying to extract tiny amounts more efficiency from their cells, and their pals in production technologies who took successful lab experiments and turned them into reliable consumer products. At least 99% of the success in solar is due to the good work habits of the Producing Classes.
I point this out because even though solar is still in many ways an infant industry, it has matured enough to compete head to head some dirty old stalwarts like coal. Yes, even coal with its 200 year head start. And as the technology matures, people are just beginning to understand the economic implications of a technology that you put out on the lawn or up on a roof and it provides useable energy. To say this is a game-changer is to court the outer limits of understatement.
I point this out because even though solar is still in many ways an infant industry, it has matured enough to compete head to head some dirty old stalwarts like coal. Yes, even coal with its 200 year head start. And as the technology matures, people are just beginning to understand the economic implications of a technology that you put out on the lawn or up on a roof and it provides useable energy. To say this is a game-changer is to court the outer limits of understatement.
Wednesday, May 15, 2013
Rev. Dr. William Barber NC NAACP demands: WHERE ARE YOU NOW?
Rev. Dr. William J. Barber, II, President of the North Caroline NAACP, speaking at Martin Street Baptist Church, Raleigh, NC, Tuesday evening, May 7, 2013.
The past two election cycles have been political catastrophe in North Carolina. In 2010, Republicans won control of both houses of the state legislature and got very, very busy, preparing to seize total control of the state in 2012. Which they did. State legislative and state senate and U.S. Congressional districts were wildly gerrymandered, with the result that last year, though nearly half a million more Democrats than Republicans voted, the Greedy Old Pricks party won even larger majorities in the state House and Senate, took the governorship, and won seven of 10 seats in the U.S. Congress. The new Speaker of the North Carolina House, Thom Tillis, is a national board member of ALEC, and former Rep. Fred Steen, the past state ALEC chairman, is now Gov. Pat McCrory’s legislative lobbyist.
The legislation introduced and passed by the Republicans has been stunningly swift and breathtakingly awful, and all based on ALEC templates. Unemployment benefits have been cut back to among the stingiest in the nation. Funding for pre-school education has been slashed. Private school vouchers have been enacted. College students who dare to register where they go to college are having their parents penalized to the tune of $2,500 by the Republicans legislating that such students are no longer dependents, and cannot be claimed as a dependent on parents' state income taxes. A voter ID law is in the works that is so draconian that even some Republicans are warning it needs to be changed. Just a week or two ago, the Republicans introduced legislation to make it illegal for anyone to sell a Tesla, the hot-new all-electric car that was named Car of the Year by Motor Trend magazine, except through an in-state Tesla dealership – of which there are exactly zero. (One of the GOP leaders is the legislature own a few car dealerships.)
Their blockbuster effort is to abolish the state income tax, and replace it with a state sales tax. Including on food and medicine. In other words, outlaw any semblance of a progressive tax system, and impose one that totally favors the rich at the expense of the poor.
The agenda of North Carolina Republicans is so extreme, and the pain being imposed on the poor and disadvantaged so overwhelming, that the first sparks of civil disobedience have been ignited. Under the leadership of North Carolina NAACP president Rev. Dr. William J. Barber II, about 100 to 200 protestors have congregated in the halls of the General Assembly on each of the past three Monday afternoons, with about a score arrested each time. They have used the methods of non-violent resistance during their protests and arrests, and teams of supporters, including lawyers, have stood vigil each time until bond was set and the protestors released. At around four in the morning, each time.
Rev. Dr. Barber is calling this Moral Monday, and he is about to begin a speaking tour of twenty other counties in the state, to begin organizing similar resistance. In his speech on the Tuesday after last week’s Moral Monday, Rev. Dr. Barber laid down the gauntlet to our conservative brothers and sisters of faith.
The past two election cycles have been political catastrophe in North Carolina. In 2010, Republicans won control of both houses of the state legislature and got very, very busy, preparing to seize total control of the state in 2012. Which they did. State legislative and state senate and U.S. Congressional districts were wildly gerrymandered, with the result that last year, though nearly half a million more Democrats than Republicans voted, the Greedy Old Pricks party won even larger majorities in the state House and Senate, took the governorship, and won seven of 10 seats in the U.S. Congress. The new Speaker of the North Carolina House, Thom Tillis, is a national board member of ALEC, and former Rep. Fred Steen, the past state ALEC chairman, is now Gov. Pat McCrory’s legislative lobbyist.
The legislation introduced and passed by the Republicans has been stunningly swift and breathtakingly awful, and all based on ALEC templates. Unemployment benefits have been cut back to among the stingiest in the nation. Funding for pre-school education has been slashed. Private school vouchers have been enacted. College students who dare to register where they go to college are having their parents penalized to the tune of $2,500 by the Republicans legislating that such students are no longer dependents, and cannot be claimed as a dependent on parents' state income taxes. A voter ID law is in the works that is so draconian that even some Republicans are warning it needs to be changed. Just a week or two ago, the Republicans introduced legislation to make it illegal for anyone to sell a Tesla, the hot-new all-electric car that was named Car of the Year by Motor Trend magazine, except through an in-state Tesla dealership – of which there are exactly zero. (One of the GOP leaders is the legislature own a few car dealerships.)
Their blockbuster effort is to abolish the state income tax, and replace it with a state sales tax. Including on food and medicine. In other words, outlaw any semblance of a progressive tax system, and impose one that totally favors the rich at the expense of the poor.
The agenda of North Carolina Republicans is so extreme, and the pain being imposed on the poor and disadvantaged so overwhelming, that the first sparks of civil disobedience have been ignited. Under the leadership of North Carolina NAACP president Rev. Dr. William J. Barber II, about 100 to 200 protestors have congregated in the halls of the General Assembly on each of the past three Monday afternoons, with about a score arrested each time. They have used the methods of non-violent resistance during their protests and arrests, and teams of supporters, including lawyers, have stood vigil each time until bond was set and the protestors released. At around four in the morning, each time.
Rev. Dr. Barber is calling this Moral Monday, and he is about to begin a speaking tour of twenty other counties in the state, to begin organizing similar resistance. In his speech on the Tuesday after last week’s Moral Monday, Rev. Dr. Barber laid down the gauntlet to our conservative brothers and sisters of faith.
Watching Japan
Japan's economic experiment is barely under way and already the self-annointed experts are passing judgement. Part of the problem is that for those steeped in the conventional wisdom, no country would actually TRY to drive down the exchange value of its currency. Must be to please their exporters, muse the wags.
Yes, the declining Yen has made a lot of currency dealers rich—with no risk because the Bank of Japan told everyone what they intended to do well ahead of time. Yes, I am sure that the exporters are delighted the Yen is back above 100 to the dollar. And yes, the Nikkei is back above 15,000 so those who believe this is the only metric worth taking seriously are happy. But as I see it, this is merely the sideshow to the big event—Japan intends to get into the business of massive infrastructure upgrades and they intend to issue the funds rather than issuing new debt. The spirits of Edison and Ford are dancing with delight. Yes! Precisely!
And in the meantime, just the suggestion that Japan has changed course is spilling over into the economic debates in Europe. Stay tuned—this could get very interesting.
Yes, the declining Yen has made a lot of currency dealers rich—with no risk because the Bank of Japan told everyone what they intended to do well ahead of time. Yes, I am sure that the exporters are delighted the Yen is back above 100 to the dollar. And yes, the Nikkei is back above 15,000 so those who believe this is the only metric worth taking seriously are happy. But as I see it, this is merely the sideshow to the big event—Japan intends to get into the business of massive infrastructure upgrades and they intend to issue the funds rather than issuing new debt. The spirits of Edison and Ford are dancing with delight. Yes! Precisely!
And in the meantime, just the suggestion that Japan has changed course is spilling over into the economic debates in Europe. Stay tuned—this could get very interesting.
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