Taibbi on Hunter S. Thompson

Moving day.  Posting will be sporadic for the next few days—I am not sure how or when my new internet hookup will be operational and I am just crazy tired.

And of course I have signed up to put in a new bathroom right away.  It will be mine and since I am a large man, I intend to have some elbow room.  I want plenty of handholds—I am getting to the age where falls can literally kill you.  But most of all, I want it to be ridiculously easy (even fun) to clean.  I am never going to have servants so if my bathroom is going to be clean, I am going to have to do it myself.  A design problem.  It's what we Producers do.

Meanwhile, here's a link to the Village Voice interview of the guy who, IMHO, is the best writer this country has at the moment.  Not only has he chosen to wade into the most relevant topic going (whether it's a good idea to allow vandals, thieves, and con men have a say in how the nationwide economy is run) but he gets his facts right and makes complexity look easy.

More on the bankster mob

It is impossible to run a meaningful economy when crooks are charge.  IM.POS.SIBLE!  Whether a system controls the moneychangers or the moneychangers control the system is in the final analysis, the only truly interesting economic question out there.

Blaming the victim

The math is obvious.  There is simply no way folks can prosper under a scheme that is as heavily skewed towards strengthening the currency at the expense of all other considerations.  And that is the formula baked into the Euro.  These crazy ideas will obviously first destroy the weak but no one should get complacent—they will eventually do in everyone.  Smart policymakers will ignore the noise and concentrate on what is getting everyone get into trouble.  They should also see that the current crises could be easily seen from the very beginning of the Euro's existence.  Many of us did in fact see it coming.

Introducing new technology

In spite of the fact that change is pretty common, it is nevertheless extremely difficult to displace an existing industrial practice.  Even when the new technology is vastly superior such as when the transistor took on the vacuum tube, there is still a lot of resistance.  The new technology may have infinite advantages but it is untested, usually expensive, sometimes unreliable, and it is up against a mature, highly developed, well-entrenched competition.

Over time, several methods have been tried.  For example, there is emulation.  Plastics gained market acceptance by looking like their more expensive competition such as wood, leather, and stone.  Now that plastics have gained acceptance in their own right, these substitutes like Naugahyde or wood-grained Formica look utterly cheesy—but they once served a valuable purpose in gaining acceptance for a new material.

And so we turn to the electric car.  Such vehicles have been very expensive, not very reliable, and inconvenient to own.  So Tesla has ripped a few pages out of the old playbook by introducing an electric car that looks and is priced like a premium vehicle while having ridiculous performance specs.  The idea is that if an electric car can be made that appeals to the status trend-setters, the rich will help pay to develop technologies that can be used for more down-scale efforts.  Of course, catering to the rich has its own set of problems but this strategy has been widely used in the electronics industries so there is a possibility it might work with electric cars.  In any case, it has been a lot of fun to watch Elon Musk try.

Ever wonder why "liberal" organizations are so economically useless?

Yes!  I have covered the subject of how the Democratic Party in USA went from running the country as a party of economic progress to being an irrelevance that regularly loses elections running on identity politics—a party that has been ignoring important economic issues and enthusiastically throwing labor unions under the bus while drawing a HARD line in the sand over abortion rights (etc.)

So now we have reverted almost to a state of economic feudalism that sells its young into debt peonage in the name of "higher education."  Millions have been unemployed for longer than a year and that doesn't even include the millions more who have dropped out of the job market entirely.  And so on.

Mark Ames has also noticed this trend and has pointed out how for some of the main "liberal" organizations, the abandonment of progressive economics for narrow identity politics has been a decades-long process.  It's a good read.  I have also included a short list of my efforts to describe this process here at real economics.

Monday, May 28, 2012
The Democrats abandon progressive economics

Friday, December 2, 2011
Chris Hedges at Occupy Harvard – feeding plutocracy and why the cops are scared

Thursday, September 29, 2011
Taking it to the streets

Friday, November 18, 2011
This is how reformations begin

Banking as organized crime

Matt Taibbi is doing incredible work trying to explain to the rest of us just how criminal the banksters have become.  I tend to think of the moneychangers as being engaged in practices that most religions have long ago defined as sin, so I tend to rhetorically wonder what's new about this crime wave.  But Taibbi is right—the sociopathic behavior of the banking community has gotten so destructive, and so brazen that in some ways, this really is quite new.

First up, we have an excerpt from his Rolling Stone article on some moneychangers who were actually caught bid-rigging in the municipal bind market.  Then we have him joined by Yves Smith in a Bill Moyers interview.

Japan answers her wake-up call

There is a serious amount of arrogance associated with nuclear power.  The thinking goes something like this: Of course nuclear power is hazardous and difficult which is why only we Americans (French, Russians, Swedes, etc.) are qualified to do it.  When Chernobyl melted down there was a lot of "Well what did you expect?  Russians—especially Russians confused by Marxism—could screw up a two car parade.  So why did they believe they could try their hand at nuclear power?  Of course, we French (Americans, Swedes, Japanese, etc) would NEVER screw up like they did because we are better educated, use better powerplant designs, have a more stable social organization, and are FAR more technologically superior to those bumblers."

The Japanese were especially qualified to make that assumption.  After all, they ARE technologically very gifted—to the point where they began to eat most of USA's industrial lunch.  Moreover, if there was ever a country that had good reasons to embrace nuclear power—it was Japan.  She has almost no fossil fuels.  She has a large population crowded onto a small island that can only survive by being industrially sophisticated.  And compared to some of the technological miracles that happen in Japan on a regular basis, nuclear power generation is actually pretty easy.

And then came Fukushima.  Yes it required a perfect combination of disasters to cripple that plant.  One wag reminded us that the second largest earthquake ever recorded was only the third most serious problem to hit the northern coast of Japan in a 24-hour period.  The Japanese awoke to an ugly truth—a disaster much worse than Chernobyl could befall their nuclear infrastructure!

So now the Japanese have decided to get VERY serious about renewables.  They are going to invest trillions of Yen in easily the MOST difficult renewable scheme—floating wind turbines.  As someone who has developed a serious affection for Japanese technology over the years, I have enormous respect for their abilities.  But Damn!

Well good luck!  If anyone can pull this off, it must certainly be the Japanese.

Saturday toons 23 JUN 12

Another freaking MEETING on the environment

Although Veblen didn't include large conferences in his list of preserved archaic traits, I'll bet he would have if he were still around.  The idea of flying a bunch of people to Rio to tell each other what everyone already knows (or should know) is in itself an environmental obscenity.  But since mass meetings and pilgrimages are what the Leisure Classes do, why should we be surprised that is what Leisure Class environmentalists think will actually solve problems.  I would much rather that resources would go to inventing and perfecting better ways to transmit and store solar energy—but that's just me, I guess.

There was another mega-conference on climate change in Durban South Africa just last December with many of the same participants but I guess some folks need regular booster shots to keep up their enthusiasm for what exactly—meetings?  Thankfully, I am no longer alone in my disgust with these things.

Arresting the banksters

The MOST important step in bringing the wicked bankers to justice is to rise above the barriers of status that the bankers surround themselves.  Those high ceilings and stone columns are there for a reason—they are there to intimidate people.  And they work magnificently.  Try an experiment.  Walk into a bank and begin to point out the architectural features that were installed to intimidate you.  Then begin to laugh uproariously.  See how long it takes before someone calls security to throw you out of the building (for laughing.)

Bill Black has been saying for quite awhile now that we cannot recover from the global financial crises until we throw the crooks in jail.  Banking is too important to be run by hucksters and thieves.  And the politicians who have been corrupted by these crooks have become worse than useless.

Anyway, I wish every country was doing what Iceland is doing.  This must be very hard to do—it seems impossible that only the Icelanders are this upset with their crooked moneychangers.  Or maybe they are just not as intimidated by angry architecture.

The Danes and renewable energy

Once you understand the science of energy and what it can do, the decision to run your society on the most abundant source is a no-brainer.  As it noted below, the Danish decision to convert to renewables is hardly limited to the hippies in Christiana but is supported throughout the whole political spectrum.  A superb education will lead to such an outcome.

Global solar update

Inexpensive solar cells have proven to be extremely popular.  I am of the opinion that the PV industry is now-self-sustaining.  PV (and other renewables) adoption will be slowest in the countries that already have existing electrical generation.  Going from nothing to PV will be a whole lot easier than going from always-available / instant-on convenience to PV.  But just remember, humans throughout most of history have worked with what mother nature provided as in "make hay while the suns shines."  And while these skills have gone missing in the industrialized states for several generations, they probably can be relearned.

Ghawar

The world will be a VERY different place when Ghawar is pumped dry.  When it comes to evaluating the real economy, the state of Ghawar is arguably the most important story of all.

The Great Latvia Success Story - Austerity Works, NOT

Hat tip to Yves Smith at Naked Capitalism for featuring this gem of a video today.

Krugman must be loving this

Paul Krugman sounds like a lot of my old econ profs. This is what someone who taught at a major land-grant institution in Minnesota HAD to sound like to get a job in 1972. After all, the head of the department was Walter Heller—the guy who liked to brag that he taught Keynesianism to Kennedy. But folks, these guys are VERY rare these days so Krugman has an almost uncontested monopoly on sane economics. Give him a Nobel and a column at the NYT, and this guy has turned his most recent book tour into a victory lap. Of course, life has been made infinitely easier because his intellectual opponents are forced to defend calamities of their own making. Krugman just toys with these clowns.

Watch Krugman's Solution to Fiscal Stimulus? It Involves Aliens on PBS. See more from PBS NewsHour.

More on Iceland's economic recovery

This is truly amazing.  Iceland is in the process of emerging from one of the sharper depressions in her history.  Yet while she is still staggering to get to her feet, her central bank somehow believes that fighting off inflation is still a high priority—if not priority #1—EVEN when inflation is probably the last worry they have.  It sort of reinforces Paul Krugman's description of central bankers in action (see his last answer).  Of course, this is pure Institutional Analysis—central bankers will act like central bankers.

Bankster cultural magic at work

Over at Zerohedge, Tyler Durden has calculated that J.P. Morgan gave members of the Senate Banking Committee a total of $877,798 in campaign contributions / bribes.  Folks, that isn't even a million bucks.  In J.P. Morgan's world, that isn't even a rounding error.  After all, the hearing had been called to ask Jamie Dimon what happened to the $2-20 billion that a London-based trader lost during the performance of his job.  For the purposes of this example, let's say Morgan lost $10 billion.  If we are to assume Durden's info is correct, that means Morgan bought the Senate Banking Committee for considerably less that 1 / 10,000th of the trading losses.  And Dimon was using the hearing to reassure everyone that $10 billion was nothing to worry about.

My contention is that this example of money in politics really is as trivial as Dimon (and the math) suggests.  Dimon was accorded this ridiculous amount of respect because he is one of money's popes and the guys on the committee are just lowly acolytes who were in the presence of the presence of their God substitute.  The power of money most certainly IS manifest by a sheriff's sale—but the REAL power is cultural.

The Greek vote—now that was depressing

The Greeks, faced with the choice that could have brought down the whole bankster edifice, chose to vote for the folks who seem in charge of the magic that makes money worth having.

Now it might seem like this would be the time to beat up on the Greek lefties and the Syriza Party for failing to offer the voters much of a choice.  But history tells us, even when the voters actually DO have a valid choice they tend to go with the banksters.  I mean, look what happened to the Greenback and Peoples Parties.

Even more to the point, look what has happened to poor Ellen Brown and her campaign to get states to copy North Dakota and establish a state-owned bank.  She has an example with a nearly 100-year run of success.  The benefits are substantial.  There is literally NO reason why folks shouldn't try this.  And yet for all her trying, North Dakota stands alone as the only state with a state-owned bank.

Too bad the Greeks were not as brave as the Icelanders—which reminds me, there are a substantial number of Icelanders in North Dakota.  Takes more than a bankster to scare a real Viking, I guess.

Oh, and one other thing—just because the banksters won an election in Greece does NOT in any way solve the problems faced by the world's big banks.  And their problems will not go away for a simple reason—their operating assumptions are mathematically insane.  Debts that cannot be repaid, will not be repaid.  Hate to break the bad news to you banksters—math works!

An Institutionalist take on the Greek elections

I am about to move again.  Moving is always difficult but this time, I will wind up living closer to the childhood home of Thorstein B. Veblen than at any time before in my life (less than 10 miles).  So I have been thinking about the political and social forces that shaped his worldview and speculating on how he would view the upcoming Greek elections.

The BIG economic calamity of Veblen's life was the decision in 1873 for USA to go back on the Gold Standard.  Veblen, who had been born in 1857 would have turned 16 that summer.  This monetary decision would devastate midwestern agriculture and his father, who had grown quite prosperous by then would see his economic situation deteriorate over the next 20 years so that by 1893, he would leave agriculture altogether and NONE of his children were interested in the farm. In those twenty years, virtually ALL political activity in the agricultural areas of USA was directed towards reversing the "Crime of '73."  This included the formation of political parties such as the Greenback Party and the People's Party and organizations like the National Farmer's Alliance and the Knights of Labor.  So unlike the Marxists, Veblen's political thinking was formed in the crucible of monetary arguments.

So it has been damn interesting to watch a lefty alliance in Greece with deep historical ties to Marxism attempt to formulate policy responses to a banking crises.  It has also been fascinating to watch how a genuine Institutionalist like Michael Hudson reacts to the various "Socialist" responses to the Euro crises.  Like me, he considers them hopeless—which they sort of are.  Up until now, the Socialists have not (to my knowledge) questioned the basic assumptions that govern the creation of money and who should be paid for that act—the very question that drove a zillion passionate debates in rural USA during Veblen's most formative years.  So whether or not a modern Marxist like Alexis Tsipras wins the election on Sunday is only half of a very interesting question.  The other half is whether he understands the issues clearly enough to do anything meaningful about the terrible situation in which Greece finds itself.

Saturday toons 16 JUN 12

Wind is FAR from dead

Wind projects will continue because wind works.  Get the right site, and a well-maintained wind turbine will make someone very prosperous.  In the case of Vattenfall, they also invest in wind projects because they are FAR more green than their brown coal generation and the aging fleet of nukes.

There is also in institutional influence.  Vattenfall has a corporate division called Vattenfall Renewables.  The company has already accumulated a vast store of expertise in wind—an investment in institutional memory that only pays off if they keep doing wind projects.