Saturday toons 17 DECEMBER 11

Watching the mainstream pretending to comprehend why folks are protesting is still funny.

Bernanke’s 29 Trillion Dollar Fog of Deceit

Bill Totten's weblog carries the most recent article from University of Missouri at Kansas City (UMKC) economist L. Randall Wray, one of the handful of economists worth taking the time to listen to. Two graduate students at UMKC have completed an analysis of the documents pried out of the Federal Reserve's grasp by the Bloomburg Freedom of Information Act request, and found that the actual total amount of emergency lending and other assistance the Fed is actually four times larger than the already staggering figure of $7.77 trillion Bloomburg wrote about two weeks ago.

$29 trillion, if you're wondering. Twenty nine trillion, with a "tee" not a "bee" dollars. That's the entire USA gross domestic product for nearly two entire years.

Wray explains the chain of discovery that began with Sen. Bernie Sander's legislation that forced an audit on the Fed. Of course the Fed tried to provide as little information as possible in that audit. But there was enough information to give Bloomburg financial reporter Mark Pittman the specifics needed to file an FOIA request. (Pittman died soon after of "heart problems" at the age of 52). The Fed tried to make the information in its FOIA release as complicated and as incomprehensible as possible, but, as Wray writes, "Bloomberg helped enormously by putting the data into a usable format." That, in turn, allowed the two UMKC PhD students, Nicola Matthews and James Felkerson, to unzip the Fed's bag of secrets and look inside. Voila! $29 trillion!

Europe's debt crises staggers on

Debts that cannot be repaid, will not be repaid.  But that doesn't keep the grabbing classes from trying to collect from someone, anyone.  And trampling democratic governments is just the tip of what the banksters will try to collect on debts that were mostly incurred playing videogames with money.

Peak oil and food

One of the stories that has happened during my lifetime is the widespread substitution of oil and other energy inputs for human and animal muscle in the production of food.  The food you buy in a supermarket contains a LOT of embedded energy these days.

Understanding the failure of imagination at Durban

Anyone interested in why the Germans lead the world in every meaningful Green category should read this absolutely brilliant essay by Christian Schwägerl in Monday's Spiegel Online about the lessons that could be learned from the fiasco that was Durban.  I encourage everyone to read the whole essay but for me, this is the money quote:

Dec. 13—St. Lucia day

Perhaps one of the more confused celebrations of the people of the north—Swedes celebrating a Sicilian Catholic saint from the pre-Reformation days.  However, the celebration is about light and food so it fits right into the Christmas / Advent traditions.  It is also a wonderful excuse to teach children how to sing.

The delusions of Durban

After 16 days of mostly fruitless negotiations over whether kings or governments can order about the tides, the folks assembled at Durban celebrated their great "success" at hammering out an agreement to set "legal" limits on carbon emissions. It is easy to feel like Antonius Block (Ingmar Bergman's knight in the Seventh Seal) watching the frightened townspeople whipping themselves to ward off the Black Death because what happened in Durban and any reduction in carbon emissions will be as closely linked. I mean, look at those two congratulating each other early Sunday morning.  They actually believe what they did will have something to do with saving the planet.  But who can blame them—this is what the Leisure Classes are taught to believe.

What the vast majority of those who traveled to Durban can't seem to understand is that climate change is overwhelmingly a problem of science and engineering—NOT politics and negotiations.  No matter what gets decided at a UN gathering, people will not give up on fire to warm themselves and cook their food until they have a replacement they know works—all the time.  This isn't about good intentions—this is about hardware.  And the new hardware will not appear until the funds are made available to build and buy that new hardware.  Engineering and economics—the two subjects that will make or break any progress towards solving the problems of climate change were barely on the agenda at Durban.

But that realization was lost on those folks who don't quite understand the huge difference that exists between solving problems and yakking about them.

Yes, the Walmart Fortune Endangers Democracy

You’ve probably seen by now the report from the Center on Wage and Employment Dynamics, picked up by the Huffington Post, that the The Walmart Heirs Have The Same Net Worth As The Bottom 30 Percent Of Americans

It is good that such odious examples of wealth inequality reach a wide audience, but I really would like to see more of national discussion of just how dangerous such inequalities are to our republican form of self-governing democracy. People who gravitate to progressive blogs like this of course have an innate sense of how massive accumulations of wealth have been working to undermine and corrupt our political system: the widespread outrage over the Citizens United decision and the incessant (and well deserved) exposes of how the Koch brothers are funding wrong-wing political organizing including the Tea Party, are evidences of that.

But I want it made even more explicit and more clear that the conservative and wrong-wing defenses of these wealth and income inequalities are completely at odds with the thinking on political economy that created our country. This past year, I've concentrated much of my reading on the formative thinking that resulted in the American Revolution and the creation of the Constitution and federal government. What I have learned strengthened my belief that the conservative belief in "neo-liberal" a.k.a “free market” a.k.a shock doctrine economics is not just alien and un-American, but downright seditious.

In April 2006, Public Citizen and United for a Fair Economy released a report on how just 18 of the richest families in America, including the Kochs, the Waltons (WalMart), Dorrances (Campbell’s soup), and Mars (Mars candy), spent $490 million to secure passage of George W, Bush’s 2001 tax bill which reduced the estate tax and included the one-year repeal of the estate tax in 2010). Bush’s tax giveaway would save just these 18 families an $71.6 billion.

Conservatives, libertarians and Republicans today argue against higher taxes, and even for elimination of the estate tax, which anti-tax ideologue Grover Norquist cleverly rebranded as a “death tax.” But the thinking and arguments of such as Norquist are completely alien to the ideas that created America. In October 1787, Noah Webster – who two decades later would publish his famous dictionary – issued a pamphlet entitled, Examination of the Leading Principles of the Federal Constitution, which was probably the second most influential tract, after the Federalist Papers, arguing in favor of ratifying the Constitution.

Sunday morning

When I was growing up, Sunday was easily the most traumatic day of the week in our house.  For many years, my brother and I had paper routes so there were big heavy papers to distribute in the cold and dark.  Then there was the scramble to get six people into their Sunday clothes in a house with only one bathroom.  Somewhere in the mix would be the hassle to ensure that some music would be performed.  For the preacher's family, Sunday was anything BUT a day of rest.

I hated the chaos of getting to church.  I hated sitting still for two and a half hours.  I hated being the kid who was supposed to be the most well-behaved in the class.  When I left home at 18, I swore I would never darken the door of a church again.  But over the years, I have mellowed a BIT because it turns out that stripped of the pettiness and the beliefs in the unbelievable, religion has some interesting cultural manifestations.  And when it comes to cultural change, religious practice has played many important roles in the history of human development.

So on this second Sunday in Advent, I post some thoughts from a preacher who has participated in some of those important social movements.  Turns out religion may not be THE answer, but it can be ONE of the important answers—especially for those who have a proclivity for religious guidance.

Wind energy news from the past month

Sorry I have not been able to post wind energy news updates regularly. But it certainly is exciting to witness the emergence of a new "real economy" industry!

Global investments in new renewable-energy facilities surpassed those for fossil fuels for the first time last year, according to analysis from Bloomberg New Energy Finance. Wind, solar and biomass power attracted $187 billion in investments in 2010, compared with $157 billion for natural gas, oil and coal, according to the report. "The progress of renewables has been nothing short of remarkable," said Achim Steiner, executive director of the U.N. Environment Program. Bloomberg (11/25)

Saturday toons 10 DECEMBER 11

Why Yes, I have worn a goatee since 1989.  Thank you for asking.

The skunk at the garden party

Under the heading "well doesn't THIS make you prouderthanshit" we are seeing, once again, that USA during the Obama administration has ZERO intentions of getting serious about climate change—a tradition that goes back (at least) to the sabotage of Kyoto during the reign of Bill Clinton and St. Albert of Gore.

Of course, back in the 1990s, we solar optimists thought that climate change would focus everyone's mind on getting that technology to work reliably.  Since then, we have discovered because of the bankruptcy of Solyndra that the USA is not only NOT going to lead the way in solar conversion—we will be damn lucky to be a bit player.

Of course, this missed opportunity will come as welcome news to the knuckledraggers who are trying to become the choice to head the GOP ticket in 2012.  It has been said (often) that if we didn't have fools and ignoramuses in politics, we wouldn't have a representative democracy.  But passing on this ideal opportunity to redesign, rebuild, and re-invent ourselves only makes sense to members of the Leisure Classes and their love of preserved archaic traits.  Unfortunately, these people control both parties so making fun of The Newt or Ms. Bachmann only makes sense if you have a LOT of Dem friends.

Turning a huge ship around

Perhaps the least controversial thing one can say about the global economy is that the banksters run damn near everything and have for several decades.  One of the more interesting things that Chris Hedges said in his speech to the Occupy Harvard folks is that the reason people have moved from traditional politics to direct action is that there is no way to actually VOTE against the agenda of Goldman Sachs.

How one actually opposes a bankster agenda is another problem altogether.  If one believes such things, the Bible reports that the Prince of Peace resorted to violence to drive the moneychangers out of the temple.  Apparently, the Son of God (who had the powers to raise the dead) found the moneychangers so odious, he resorted to knocking over their tables of business (Matthew 21:12-13).  The lesson here is that anyone who can figure out a non-violent way to take on the banksters will have to be more virtuous than Christ.  Good luck with that!

But little by little, people are figuring out ways to fight back against the crazy levels of power wielded by the folks who control the money supply.  Some of these examples are so trivial I might (accurately) be accused of grasping at straws but together, I believe they demonstrate a movement in a new direction.  We shall see.

Even at the heart of Euro "prosperity" in Germany, there is talk about nationalizing a major bank.

Institutional analysis—China and climate negotiations

While one of the goals of Institutional Analysis (IA) is to better predict the future, perhaps the best way to get good at it is to use it to explain the present.  Watching China, one of the perennial bad actors when it comes to climate issues, become the rock star at Durban is an occasion that almost demands a good IA.

Whether one believes that China's route to economic growth is a good idea (or is even "legal") the strategy of becoming the world's workshop is certain to cause a spike in energy use.  Because she has a lot of coal and coal-fired electrical generation is a known technology, China is building a lot of new plants.  For the folks who worry about such things, China's strategy is a route to certain climate catastrophe.

China's response has been basic.  She says "Look, we have suffered for a long time while the industrial West has burned up much of the supply of premium fuels.  If you really want to reduce carbon in the atmosphere, start with the countries that caused MOST of the problem."  But that angry third-world developing nation did not show up at Durban.  So the interesting question is why.  IA would answer:

Climate change and China

With over a billion citizens, anything China does will have enormous implications.  The fact that she is waking up to the wonders of massive energy consumption after centuries of economic under-development ensures that whatever is done about carbon emissions, her role will be huge.

There's battle lines being drawn

Whenever someone dips their toes into the troubled waters of money and the moneychangers, it becomes readily apparent that these issues have been around for most of recorded history.

Elevator Speech econ #2—the economic importance of aesthetics

Aesthetics may be the most important economic consideration of them all

Economics covers a wide assortment of human activity. Because this is true whatever the economic theory, the most relevant discussion is usually, "What was left out?"

Sometimes economic considerations are left out because of human error. In the world of technical documentation, the producers of such documents worry constantly about the steps that get left out—and that usually happens because the folks who know what they're doing just assume that others will fill in the blanks the same way they can. Yet even when professionals obsess about this problem, the biggest single complaint in instruction manuals is missed steps.

Missing economic considerations are also a function of cost and time constraints. Obviously, EVERYTHING cannot be taken into account (although as computers have gotten cheaper and more powerful, this problem diminishes on its own.). In the best case scenario, what gets studied is what is most important. More likely, what gets studied in economics is what is important to the client. If costs can be offloaded to other people or the environment, they tend to be written out of economic considerations.

Of course, the biggest constraint on broader economic inquiry in the past generation was that we limited ourselves to questions that could be studied using complex and sophisticated math. We study what we can count. Of course, this is hopelessly shallow but it was made "legitimate" by the statistician's battle cry—made famous by Robert Strange McNamara, "If you can't count it, it doesn't exist."

Unfortunately, what cannot be counted in a traditional sense is virtually infinite. But my favorite subject is aesthetics. It is easy to demonstrate the economic importance of aesthetics—beautiful prostitutes charge more than ugly ones, seaside property fetches more than land next to the dump, etc. etc. We also know that certain people can create objects of such beauty, people will pay to have them make their own lives more aesthetically uplifting. This can even happen on a mass industrial scale—it can be argued that Apple Computer has been able to charge premium prices over the years because they spent big bucks to make their products beautiful.

Reasonable people could argue that there is NO economic topic more important than aesthetics. And yet, I have yet to encounter any practicing economist who gives more than a passing nod to the subject. In their minds, aesthetics gets embedded into price information and that's all they need to know. And maybe they are right—but I seriously doubt it.

Folks may argue about the nature of beauty but when it comes down to casting a vote, there is astonishing agreement about what is beautiful. One of the things I discovered while I was in the "inner city neighborhoods must be saved" phase of my life was that committees do not get organized to save eyesores. Because a sustainable society will be one that is well-maintained, the most certain way to build a sustainable society is to build a beautiful one.

Saturday toons 3 DECEMBER 11

Today's toons can be found after the jump.

Chris Hedges at Occupy Harvard – feeding plutocracy and why the cops are scared

Chris Hedges spoke to Occupy Harvard three nights ago. There are three vids up of the discussion, and you should carefully and closely watch each one. Hedges lays out clearly the power of Occupy, the process of revolution, and the steps we need to take to get there.

Hedges begins by declaring, “Harvard exists to feed the plutocracy… It is an institution that epitomizes the dead ideas of the one percent.” He discusses the unique responsibility of Harvard students to call to account the world leaders who regularly come to Harvard to speak. Apparently, you cannot even get into Harvard Yard unless you have a Harvard ID card. So outsiders do not have the access to get at the one percent leaders and call their bullshit to their faces.

Hedges then references Crane Brinton’s 1938 book, The Anatomy of Revolution, quickly describing how a revolution is created. First, is the creation of a rapacious oligarchy, followed by the destruction of the middle class. The elites become insensitive to the plight of working men and women, and especially the poor. The oligarchy becomes so entrenched that people who thought they had trained to become part of the system, can find no entry into it. Hedges uses the word “déclassé” to describe these people. And the revolutionary moment always begins with the demand that the elites be removed – which, of course, the elites refuse to even discuss.

Hedges explains that the elites' request for Occupy to issue formal demands is an insidious attempt to drag Occupy back into the dead system and contain it. “The power of the Occupy movement is that it won’t go there. It realizes a fundamental truth about American politics… there is no way to vote against the interests of Goldman Sachs.”

Hedges plainly states that if we continue to allow people like Larry Summers and Robert Rubin to determine our future, “we will be finished. Not just finished economically, but finished in terms of the assault on the eco-system on which the human species depends for survival. This is, quite literally, a fight for life.” Agronomists are warning that for every one degree increase in temperature, there will be a ten percent decline in crop yields.

A serious fight over electronic money

Back in the 1980s when I realized the developing nations of the world were being trashed and looted in the name of reprogramming computer chips, it dawned on me that the MOST revolutionary act possible would be if someone got access to the right computer chips and just cancelled all the third world debt.

Well I wasn't going to do it.  I can barely run a Macintosh and my last crack at programming came when I tried to learn something called Minnesota Fortran in the early 1970s.  I know just enough about computers to know how little I know.

So now we see a real threat emerge to the security of electric money.  I have no idea what these young hackers intend to do if they get access to the right servers. I don't even understand the level of nerd dick-swinging going on.  But I do understand that these kids are fooling with the global money supply and that folks, is the primal source of power in today's monetized world.

So now we know

On Monday, I composed a post that took the world's central bankers to task for not creating enough money to stave off the collapse of the Euro.  And it is a pretty good post.

But surprise, surprise, surprise!  The world's big central banks led, it appears, by the often-maligned Ben Bernanke managed to cobble together a scheme of a coordinated monetary re-inflation of the threatened European Union.  Now the story of who did what to whom and for what reason will probably take a least a year to get right, but there are several things that we know already.

1) This could have been done years ago.  The option was always open.  This sort of thing was done by the Fed during World War II as a normal operating procedure.  But to the "sound money" guys, this is a major sin.  Expect the howling to commence.

2) The banksters managed to get a lot of austerity measures passed before they "caved" and adjusted the money supply.  When the story comes out, we will discover that the triggering mechanism this week was a near-death experience by a major name bank.  Commerzbank has been mentioned but only a handful of people actually know so far.  What we know from this is that banksters are only too happy to watch a society like Greece disintegrate into chaos but if one of their own members gets into trouble, rules written on two tablets of stone CAN be adjusted after all.

3) This action was ONLY directed at saving the financial institutions.  Actually re-inflating the real economy is not even being discussed.  Example: we just found out that the Fed pumped $7 TRILLION into the banking system in the past two years.  As far as anyone can tell, all this "money" did was change some numbers in a bank's computer somewhere.  If $7 TRILLION was pumped into the real economy, it would employ 20 million people at $50,000 a year for SEVEN YEARS.

So I was wrong.  The central bankers of the world CAN push the necessary buttons to save the economy and I thought they were too ideologically confused to do it.  The trick will be if they can perform this magic for someone other than their buddies.  Only if THAT happens will I be convinced that the big moneychangers are something other than pathological greedheads.

But hey, the markets loved it.