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.

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.

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.

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.

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.

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 

[BBC, via Naked Capitalism 8-11-18]


Court Slams EPA For Allowing Pesticide With Known Side Effects 

[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.

Producer v Predator—a battle of Titans

The news that Elon Musk wants to take Tesla private has provided us with a further confirmation of Veblen's class theories. Musk is such an excellent example of a Producer Class Superstar, we should probably be selling a Musk bobble-head doll around here. And he has just pulled off a production miracle. And honestly, he looks terrible—120 hour workweeks will do this to a now middle-aged man. And so he looks up from that effort and discovers that a bunch of Predators are trying to suck out the energy from Tesla by shorting the stock.

My pioneer forebears discovered this grim reality while trying to farm in Minnesota. It was like going on a camping trip to hell. With small children in tow. Winters featuring -30° temps, summers with incredible heat and swarms of biting insects, the problems of breeding animals and sowing crops, and 100 other similar annoyances. And when you had survived that, you had to deal with crazy shipping fees by a railroad monopoly, crooked grain grading systems, usurious money-lenders, and the corrupt politicians bought by those thieves. The producing classes had to organize politically. In Wisconsin it was LaFollette and the Progressive Republicans, in North Dakota is was the Non-Partisan League, and here in Minnesota, it was the Farmer-Labor Party. In fact, nearly all the prairie farm states had  political movements to protect the interests of the Producing classes.

Musk vs the Wall Street crooks will be a titanic showdown. Wall Street is on at least a 45-year winning streak. Musk has been taunting the shorts for several years. Musk does not have a political movement backing him—in fact what he does know about the Producer-Predator conflicts seem to be self-taught. But Musk has a LOT going for him. He has that ultimate Producer skill—vision and the organizational abilities to turn his visions into reality. That skill is so rare that people who possess it attract followers. And Musk has a bunch of them. Does he have enough to take Tesla private at $420 per share? We will see.

Julian Assange to testify before Congress?

Well certainly not in person unless there is an immunity deal.

Assange is to the internet what Luther was to the printing press. These are folks who grasp the implications of spreading the light and are willing to risk some serious privation to do it. Not many of those folks in history.

If congress wants to know the role Assange played in the 2016 US election, a few minutes on YouTube should give plenty information of his position on this question. (It's not like no one has thought to ask him about this before.)

Thoughts on the trials of Elon Musk

These days, the most uplifting story concerns the Tesla automotive project. I find it interesting because I have been something of a car nut since grade school. Our next-door neighbor was the local Ford dealer just when Edsel Ford decided to make his company dominant in racing. This was a no-holds-barred land-based space race—the first use of aluminum honeycomb outside of NASA went into Ford's LeMans enduro racers. My neighbor, who was mostly selling trucks and tractors to his farmer customers, would give me the chest-pounding literature of Ford Racing because he found it irrelevant to his business. Then I added to that knowledge base in college working for an auto parts store where I first became aware of the incredible size and complexity of the USA on wheels.

My initial reaction to Musk entering that world was, "Elon baby. Stick to software. Cars are an amazingly difficult and expensive proposition. This a world that eats upstart competition for breakfast." And yet, Tesla still stands as an ongoing concern and its most recent brush with death—the mass production of an affordable EV—seems to be most significant for how much money the "shorts" lost the other day. So what have we learned?

1) There seems to be sufficient expertise in bleeding-edge production techniques so that an upstart can be world-class on its first try. I was pretty sure this could not be done but it was. Tesla has some amazing millwrights.

2) Building electric cars apparently is a lot harder that it looks. The Model S has now been out for 7 years and there is still no realistic competition. Those who were warning, "just wait until Volkswagen (Toyota, the Koreans, etc.) gets serious about EVs, then Musk will fail" have been given a pretty strong demonstration that it was easier for Tesla to solve its production problems than for traditional car makers to overcome their own internal bias towards continuing to make what they already make.

3) Tesla is proving that the switch to EVs is a complex cultural change that relies on software development, direct to customer retailing, and supercharging networks as much as innovative production expertise. The legacy car makers are notoriously deficient in these areas. On the other hand, Tesla's leads on this cultural arena are still quite susceptible to technological diffusion (what they know will soon be common knowledge.)

In other words, stay tuned.

(update 9 AUG 2018)

The shitstorm that Musk created by announcing his desire to take Tesla private is a sight to behold. Musk is hardly the first high-end Producer Class figure to discover that the world of finance is filled with bloodthirsty Predators who do NOT have his, or his company's best interests in mind. To them, he is a cipher whose only interest to them is how much money does he have to rip off.

Here in Minnesota, we had a guy named William Norris who ran a significant computer company called Control Data. During the 60s and 70s, he would get into constant fights with the shareholders. Trust me, Musk is hardly the first to notice that shareholders often get in the way of successful business operations. In fact, Henry Ford once replied to questions about taking Ford public, I would rather take down Rouge brick by brick with my bare hands than let a gang of speculators get their hands on Ford Motor. (or similar) In fact, old Henry had been dead for 9 years before Ford finally went public.

I see the shorts are threatening to sue.

“He Fears For His Life”: President Trump Trying His Best to Not End Up Assassinated Like Kennedy

The following is a excerpt from Russia's most popular political program. They are discussing the Trump-Putin summit in Helsinki. The main character holding forth is a film / theater director who see the world as huge dramas. And to him, Helsinki is where Trump exposed himself as someone who like most Americans, is sick to death of the Empire. No wonder nearly everyone in DC was screeching treason.

Karen Shakhnazarov, director, People's Artist of Russia: "The most striking thing about that meeting is that it was organized not for the sake of Syria, Ukraine or Crimea, but for Mr. Putin to tell the American electorate: "Trump isn't our agent, trust me, you have my word." That's what Trump actually wanted from the meeting because the press conference revealed this underpinning."

Week-end Wrap - August 4, 2018

Week-end Wrap - August 4, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

How America Was Built, 1954-1976: NASA's Richard Whitcomb, the Area Rule, Supercritical Wings, and Winglets

by Tony Wikrent, July 25, 2018 [Real Economics]

The irony, of course, is that many of the rich people who are jetting around the world using aerodynamic design principles developed and introduced by the government, are conservative and libertarian ideologues who insist that government can't do anything right!

Capitalism Killed Our Climate Momentum, Not “Human Nature”
by Naomi Klein, August 3, 2018 [Intercept, via Naked Capitalism 8-4-18]

Klein is responding to the full-magazine article, "Losing Earth," by Nathaniel Rich, in the Aug. 5, 2018, issue of the New York Times Magazine. 

According to Rich, between the years of 1979 and 1989, the basic science of climate change was understood and accepted, the partisan divide over the issue had yet to cleave, the fossil fuel companies hadn’t started their misinformation campaign in earnest, and there was a great deal of global political momentum toward a bold and binding international emissions-reduction agreement. Writing of the key period at the end of the 1980s, Rich says, “The conditions for success could not have been more favorable.” 

....My focus is the central premise of the piece: that the end of the 1980s presented conditions that “could not have been more favorable” to bold climate action. On the contrary, one could scarcely imagine a more inopportune moment in human evolution for our species to come face to face with the hard truth that the conveniences of modern consumer capitalism were steadily eroding the habitability of the planet. Why? Because the late ’80s was the absolute zenith of the neoliberal crusade, a moment of peak ideological ascendency for the economic and social project that deliberately set out to vilify collective action in the name of liberating “free markets” in every aspect of life. Yet Rich makes no mention of this parallel upheaval in economic and political thought. 

....what becomes clear when you look back at this juncture is that just as governments were getting together to get serious about reining in the fossil fuel sector, the global neoliberal revolution went supernova, and that project of economic and social reengineering clashed with the imperatives of both climate science and corporate regulation at every turn.

This is exactly the point I tried to make in response to another New York Times story, in my Facebook feed, The Democratic Party Picked an Odd Time to Have an Identity Crisis. This is also why I disagree with those on the left who argue that the present bigotry and inequality of USA was "baked in" from the start because of the intent by the founders was to create a new nation based on the rule of wealthy elites such as themselves:

What is maddening about most MSM articles and opinion pieces like this is that they completely ignore the 3/4 century effort by concentrated wealth to change the ruling philosophy of political economy in USA. Did the Foundation for Economic Education accomplish nothing? Has there been no effect from the billions of dollars poured into the Heritage Foundation, the American Enterprise Institute, the Reason Foundation and other conservative / libertarian apparatus? Was the Mont Pelerin Society a mere debating club? Accept the view that the reactionary rich have engaged in a war of ideas - in cultural warfare, to put it bluntly - to destroy the ideas of good government and collective action, and our current condition of soaring wealth inequality and collapsing social investment begins to look much different.

Alliance for Economic Justice holding three workshops in Charlotte to train activists

A year ago, Democratic progressives in the Wilmington area joined with local labor unions to host three presentations by labor activist, Les Leopold, author of Runaway Inequality: An Activist's Guide to Economic Justice (the first chapter is available in pdf here). State caucus member George Vlasist writes,

Hudson on the current economy

Watching the business news these days is truly to look into advanced irrationality. Apple worth a $1 Trillion? I have been a reasonably loyal Apple customer since 1985 and think some of their offerings a have redefined genius but even I believe this is absurd. Elon Musk should be having songs written about him for the accomplishment of making electric cars cool and desirable but a car company that is still not profitable should probably not be valued in the same territory as GM.

On the other hand, the tattered remnants of the once robust USA middle class is hanging on by their fingernails. They cannot afford houses, they are still paying off student loans in their 40s, energy prices are up, they are a small medical step away from bankruptcy, agriculture hasn't seen a profit in four years, etc. And the businesses that would otherwise rely on their spending are wondering where their customers went.

Meanwhile, the financial sector has abandoned any pretense of honesty or responsibility. You can hardly blame them—with the real economy staggering along, there is hardly any reason to even try honest banking. So they don't. And so economic conditions seem even more hazardous than they were in 2007. Why would anything else be true? After all, none of the problems of 2007 were meaningfully addressed.

So here we have Michael Hudson, who seems to have the stomach to look at the bankster community, explaining where we stand.

The “Next” Financial Crisis

THE HUDSON REPORT, AUGUST 3, 2018

In this episode of The Hudson Report, we speak with Michael Hudson about the implications of the flattening yield curve, the possibility of another global financial crisis, and public banking as an alternative to the current system.

‘The Hudson Report’ is a Left Out weekly series with the legendary economist Michael Hudson. Every week, we look at an economic issue that is either being ignored—or hotly debated—in the press that week.

Paul Sliker: Michael Hudson welcome back to another episode of The Hudson Report.

Michael Hudson:It’s good to be here again.

Paul Sliker: So, Michael, over the past few months the IMF has been sending warning signals about the state of the global economy. There are a bunch of different macroeconomic developments that signal we could be entering into another crisis or recession in the near future. One of those elements is the yield curve, which shows the difference between short-term and long-term borrowing rates. Investors and financial pundits of all sorts are concerned about this, because since 1950 every time the yield curve has flattened, the economy has tanked shortly thereafter.

Week-end Wrap - July 28, 2018

Week-end Wrap - July 28, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

"...we had come to the stage where for our people what was needed was a real democracy; and of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy." - Theodore Roosevelt,  An Autobiography, 1913

[Posted by someone on Facebook]

The Missing Profits of Nations
Posted on July 23, 2018 by Thomas Tørsløv, PhD student, University of Copenhagen and Ministry of Taxation, Denmark, Ludvig Wier, PhD candidate, University of Copenhagen, and Gabriel Zucman, Gabriel Zucman.
[Originally published at VoxEU, via Naked Capitalism]

Between 1985 and 2018, the global average statutory corporate tax rate fell by more than half. This column uses new macroeconomic data to argue that profit shifting is a key driver of this decline. Close to 40% of multinational profits were artificially shifted to tax havens in 2015, and this massive tax avoidance – and the failure to curb it – are in effect leading more and more countries to give up on taxing multinational companies. 

Perhaps the most striking development in tax policy throughout the world over the last few decades has been the decline in corporate income tax rates. Between 1985 and 2018, the global average statutory corporate tax rate fell by more than half, from 49% to 24%.
Why are corporate tax rates falling? The standard explanation is that globalisation makes countries compete harder for productive capital.... 

But is it well founded empirically? Today’s largest multinational companies don’t seem to move much tangible capital to low-tax places – they don’t even have much tangible capital to start with. Instead, they avoid taxes by shifting accounting profits. In 2016 for instance, Google Alphabet made $19.2 billion in revenue in Bermuda, a small island in the Atlantic where it barely employs any worker nor owns any tangible assets, and where the corporate tax rate is zero percent. 

....Overall, we find that close to 40% of multinational profits – defined as profits made by multinational companies outside of the country where their parent is located – are shifted to tax havens in 2015. Our work provides transparent, easy-to-compute metrics for policymakers to track how much profits tax havens attract, how much they gain in tax revenue, and how much other countries lose.... Our findings have implications for economic statistics. They show that headline economic indicators – including GDP, corporate profits, trade balances, and corporate labour and capital shares – are significantly distorted.

Monetary Theory and the Left

Tony (probably correctly) believes that I should write more about monetary theory.

Good point. Without monetary reform, there is simply no way the the world can pay the huge bills that will be incurred running an effective program to combat climate change. So in no particular order, here are my excuses for not writing about the subject every damn day—like it probably deserves.

1) I have written extensively on money and the economics of development. I still consider the chapter on Money to be the most well-thought-out chapter in Elegant Technology. But over the years, I have sort of run out of things to say.

2) The "left" is notoriously uninterested in monetary debates—lord knows I have tried. I have heard money debated in barber shops, gas stations, feed mills, church basements—sometimes (rarely) even in political forums. I grew up in the corn belt. My grandfather was an active member of the Farmer-Labor Party. But I haven't heard anyone from the "left" discuss the money subject since I started at U Minn in 1967. And the few people I have tried to engage either get lost in the math or the fact that fractional banking is not as established / legitimate as the big myths of banking and finance. The fact that the evidence is beyond rational debate does not sway minds—especially those who believe that "the personal is the political" and so shun the notion that something as impersonal as money may be the most important political subject of them all.

3) That leaves the "right." There are people like Ron Paul who are very good critics of the Federal Reserve. But his "solution" is the Gold Standard. Now the Fed has fallen into the hands of some serious fools, but on their very worst days, they are still a superior alternative to the Gold Standard.

4) Ellen Brown. Enter her name in the search box of this blog and you will find dozens of posts related to some well-written argument she is making. She loves the Bank of North Dakota—easily the best idea Progressives ever had. Strange how no one has duplicated that institution in other states, but she has done a nice job of lighting the fire that may lead to a California version.

5) There are a lot of crackpots out there. Because the nature of money is a subject that is virtually absent in the mainstream financial press, most people who develop any theories at all are usually self-taught. Now because there are a wealth of good books written about money and folks like Franklin, Edison, and Ford took an active interest in the subject, it IS possible to get your arms around this sprawling subject by reading alone, but it is difficult. It's the folks who aren't willing to do the necessary homework that end up as cranks.

Anyway, I promise to try to address legitimate monetary questions directed my way.

HAWB 1954-1976: The three major developments in aerodynamics

How America Was Built
HAWB 1954-1976: NACA, NASA, Richard Whitcomb, the Area Rule, Supercritical Wings, and Winglets

Do you like to look at aircraft? Have you ever wondered about the forward, second-deck hump of the Boeing 747? What about winglets, those vertical tips at the end of wings?

These are all the result of the U.S. government's active intervention into the economy. When Republicans, conservatives, and libertarians insist that nothing good comes from government, remember winglets and the 747's hump and realize that they are either lying shamelessly, or are embarrassingly ignorant, about the role of government.

By the end of the Second World War in mid-1945, aircraft design was on the verge of breaking the sound barrier. But aerodynamicists and aeronautical engineers were finding that achieving Mach speeds was much more difficult than anticipated. What we now know is that as an aircraft approaches Mach One in velocity, the aircraft's body generates shock waves in the air, which causes a huge spike in aerodynamic drag. The then accepted equations mathematically describing the aerodynamic behavior of aircraft just did not account for shockwaves formed at the speed of sound.

In 1943, the National Advisory Committee for Aeronautics (NACA, the forerunner of NASA) Langley Research Center in Hampton, Virginia hired a young aerodynamicist  who had just graduated from the Worcester Polytechnic Institute in Massachusetts. His name was Richard T. Whitcomb, and he was originally assigned to the Flight Instrument Division. This was not an area that held any interest for Whitcomb. He wanted to work in aerodynamics, and made himself enough of a nuisance that he was soon assigned to Langley's Eight-Foot High-Speed Tunnel, under the supervision of John Stack. 

How are you going to pay for it? Why Understanding Monetary Theory and Policy Is Critical For the Left

We now have the technology in hand to solve all our problems. The only real obstacle moving forward is the thinking of all those people who ask: How are you going to pay for it? 

Fortunately, Jon and I are not alone in trying to answer that question. Even more fortunately, there are many people who have much more patience than Jon and I in trying to explain our answer repeatedly. Or, perhaps, more accurately, we have the technology in hand to record and replay at our convenience people doing a splendid job answering that question, How are you going to pay for it? Early in June 2018, it was at a symposium held by the Next System Project, an initiative of The Democracy Collaborative. The panel was moderated by Gar Alperovitz and included Stephanie Kelton, the key economist on Bernie Sanders’ presidential campaign, now professor of public policy and economics at Stony Brook University; Michael Hudson, professor of economics at University of Missouri, Kansas City; Pavlina Tcherneva, an associate professor and chair of the department of economics at Bard College and a research associate at the Levy Economics Institute; and Raúl Carrillo, staff attorney at the New Economy Project and a director of the Modern Money Network.

There is a YouTube video plus a full transcript at the NSP's website at Money Matters! Why Monetary Theory and Policy Is a Critical Terrain For the Left. The video is also on Michael Hudson's website.

Below the embedded YouTube are extended excerpts from the transcript.

Week-end Wrap - July 21, 2018

Week-end Wrap - July 21, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

When a U.S. citizen heard he was on his own country’s drone target list, he wasn’t sure he believed it. After five near-misses, he does – and is suing the United States to contest his own execution 

by Matt Taibbi [Rolling Stone, via Naked Capitalism 7-20-18]
Not economics, but I'm having a really hard time not listening to the echoes of very old voices in my head: "Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety." And Taibbi has the next one in our wrap.

Taibbi: No, the Mythical ‘Center’ Isn’t Sexy
by Matt Taibbi [Rolling Stone, via Naked Capitalism 7-17-18]
Taibbi provides an unrestrained response to New York Times columnist Frank Bruni's reaction to the surprise primary win of young Bronx Democrat Alexandria Ocasio-Cortez. Bruni channeled TPTB's dismay and alarm that Democratic Socialists have begun to score electoral victories at the Congressional level. A historical note: after the Non-Partisan League won an almost complete sweep of November 1916 elections in North Dakota and began to enact its program, including state-owned grain elevators, and a state bank, the New York Times fulminated about "bolshevism on the prairie."

Synthetic Photosynthesis

When I first started writing about climate change and the environment back in the 1980s, the atmospheric CO2 levels stood at approximately 340 parts per million. We are now firmly past 400. We are so far into uncharted territory, that all predictions are at best, educated guesses. However, very few of these guesses are encouraging. Anyway, I like this fictional account below.

Because it points out an obvious fact. Not only are we going to have to spend big bucks replacing the fire-based infrastructure, we must do something to return the CO2 levels to let's say, 310, or even 275. What we need is a synthetic version of photosynthesis. And we need it immediately because say we did invent a process that could capture atmospheric CO2 and turn it into O2 plus a very pure carbon, we are going have to put up probably 250,000 installations to start moving the needle down. Even Elon Musk wouldn't promise this in five years. We are talking a Manhattan Project-size effort x 50.



Compared to the effort to make inexpensive solar cells, the synthetic photosynthesis business is still pretty primitive. But at least there are folks who are producing hardware who also have a good idea how important this is.

Lots of folks dare call it treason

Trump really laid a turd in the punch bowl when he announced to the world that he trusted the word of Vladimir Putin over his own "intelligence" experts on Russiagate. The defenders of the conventional wisdom will be shaking with rage over that one for a long time—with "Progressives" leading the charge. Robert LaFollette (one of the founders of the Progressive movement) had his political career destroyed because he voted in the Senate against the USA entry into WW I. Pretty sure he would not have approved of the current war-mongering lynch mob.

For a guy with a reputation for lying, this was as close to the unvarnished truth as we have heard from a USA president since at least Carter. The Empire runs on lies—can't let any honesty creep into the conversation. And I am not sure what came over Trump but I'll chalk it up to Finland—the Nordics are notoriously honest and uncorrupt so maybe the air helped.

Because there is absolutely no hard evidence to back up the Russiagate claims, I always assumed that the backers of the narrative would eventually see the light and sheepishly re-enter a world where evidence still means something. But it hasn't happened yet and the unfounded accusations have been going on for almost two years.

On Class and Climate Change

In 1899, Thorstein Veblen would publish perhaps the most interesting, and misunderstood, book ever. It was called The Theory of the Leisure Class. Many, perhaps most, of the readers of this scintillating tome consider it a wonderful work of satire that highlights the foibles of the idle rich, and those who would emulate their lifestyles. And while I would agree that many parts of Veblen’s analysis are screamingly funny, we miss the point if we assume that Veblen was merely trying to entertain. Because beneath the chuckles, there is a deadly serious class analysis that goes a very long way towards explaining why a problem like climate change doesn’t get treated as seriously as it should be.

In Veblen’s world, there are two basic classes. The Industrial Class organizes the community’s necessary work. The Leisure Classes fasten themselves on the backs of the industrial classes “through force and fraud” in the often successful attempt at getting something for nothing. The Marxists then ask, “Aren’t your industrial classes merely another name for the proletariat?” This is important—the answer is NO.

Back in the day when Marxists preached that they were the friends, advocates, and only true representatives of the Proletariat, there was always something demeaning in their analysis. When someone picks strawberries all day in the hot sun, the Marxist description of the Proletariat and their troubles is still surprisingly accurate. But what do you call an farmer with 2500 acres under cultivation, or an engineer, or a big building contractor, or any number of important and often high paying occupations? They are obviously Industrial Class jobs but they all come with very different problems than face someone doing stoop labor. Obviously, there is an incredible amount of stratification within the occupations that can be found under the heading of “organizing and performing the community’s necessary tasks.”

Just as the Industrial Classes are stratified, so are the Leisure Classes. There is a large gap in income and status between a pickpocket and a hedge fund manager. But while there are hundreds of differences between the two major classes, many quite profound, the most telling is that when the Leisure Classes engage in conspicuous consumption and waste, their highest calling is uselessness. On the other hand, the goal of the Industrial Class is to be useful.

This class analysis is almost universally despised by the academic idea police. The right wing hates it because so many of their elites are little more than well-dressed thieves. The “left” (especially the Marxist varieties) hates it because it opens the possibility that there are enlightened, imaginative, and quite necessary “capitalists.” But it continues to be relevant because it describes the existing social order so much better than probably all the competing class descriptions combined.

Week-end Wrap - July 14, 2018

Week-end Wrap - July 14, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus


Bill Mitchell — Elements in a strategy for the Left

[via Mike Norman Economics 7-10-18]

In my recent book (with Thomas Fazi) – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017) – a central organising concept is that a progressive future is only possible if progressive citizens do two things: 

1. Learn how the monetary system operates and understand the capacity of the currency issuer and the opportunities and constraints that the government has. In other words, educate ourselves so that we have the capacity to refute the neoliberal lies that sustains the current system that has seen progressive outcomes diminish markedly. 

2. Take control of the political process and expunge neoliberal factions from progressive political parties (like the Blairites in the British Labour Party, almost all the Australian Labor Party, the Wall-Street embedded elites in the US Democrats, much of the traditional machinery of the European Socialist parties etc).Reclaiming the state is about reclaiming the legislative and regulative capacity of the nation state so that it is directed at advancing well being for the many rather than the few, to steal Jeremy Corbyn’s so excellent catch-cry....

Mitchell is a proponent of Modern Monetary Theory, which argues that money can be created out of nothing, by either a bank, the banking system, or by government, and that since governments can create money just as well as banks, there is no need to worry about budget deficits, so long as the money created is used for productive purposes.  MMT explained, Sept. 8, 2015, and Wray on MMT, January 13, 2015

When North Dakota Farmers Blew Up Partisan Politics: the Nonpartisan League: By Focusing on Economic Cooperation, Early 20th-Century Small Landowners Pushed Back Against Crony Capitalism, by Michael J. Lansing, May 18, 2018 [Zocalo]
Jon Larson writes: "Last Thanksgiving, Tony produced a short post on the Nonpartisan League. Think of this as an update. I happen to think the history of the NPL is important because it shows how effective a movement can be if they have a workable agenda. Instead of running against parties and personalities, an agenda-driven party wins because they are FOR something. Even better, an agenda usually outlives even the best supporters. And the State Bank of North Dakota is arguably the best political idea Progressives ever had—the signal accomplishment that lives on to this day."