Avoiding Insanity

By Dave Anderson:

Via Calculated Risk:

Unemployment hit a record high in the first quarter of 2012, data showed on Thursday ... The jobless rate hit 22.6 percent in the first three months of the year - double the euro zone average ... The statistics service said the number officially unemployed reached 1.12 million in the first quarter, up 57.3 percent year-on-year

Kevin O'Rourke:

The first is that the extremes are gaining in Europe because centrist parties are offering voters no meaningful choices. Pasok and ND are an egregious example, but the same is true in all the other programme countries, and to a lesser extent in other countries as well. So if you want to vote against the status quo policies, you have no alternative but to vote for Syriza, or whomever.

Second, right now in Europe, support for international institutions means, de facto, support for the current policy mix, 

More of the same, as Spain is in the process of showing is insane.  

Property value heterogeneity and taxation

By Dave Anderson:

For every problem, there exists a simple and elegant solution which is absolutely wrong.

One of the big and stupid political food fights locally is the re-assessment of property values in Allegheny County.  These assessments were ordered by the local courts because the Pennsylvania state constitution mandates "uniform" taxation.  The judge ruled that the divergent value change rates between properties in the communities that make up Allegheny County since the last assessment led to de facto non-uniform tax rates.  Communities and home owners whose property values either lost market value or gained market value at a lower rate than county average gain rates are paying a de facto much higher tax rate on their property than individuals whose property has gained value at a faster than average rate.  Frequent reassessment minimizes the differential between de jure tax rates and actual fair market value tax rates. 

The County hired a firm to do the reassessments and the reassessment  has been a political football as it threatens to raise taxes on politically influential constituencies while lowering taxes on poor(er) communities and individuals.  The reassessment has cost the county $11 million dollars to develop the model and to get the baseline data. 

More and more people in the peanut gallery think that they have a simple, elegant and far cheaper solution.  That "solution" would be to have temps look at the recent sales prices of homes in a given community, take the price and divide the price by square footage. Do that for all recent sales, and voila, that is the average price per square foot in a borough.  Apply that number to each housing unit in the town, and all of a sudden, there is no need for a complicated forumala, expensive data collection, complex models or anything else complicated. 

The solution is simple, easy and elegant. It also makes the original injury that led to the lawsuit which has resulted in the court ordered re-assessment look like a minor flesh wound. 

Let's look at a real world situation.  The neighborhood of Garfield is in the city's East End.  It is also one of the poorest and most rapidly depopulating neighborhoods in the state.  The housing stock ranges from mediocre pre-war rowhouses, to should be condemened shells, and then Hope-6 public housing.  One can buy a small rowhouse for $10,000 (no, I am not missing a zero) in Garfield. 

At the same time, staying in the city, and just going a mile south, that same row house in the same condition will cost a buyer $175,000 in Shadyside off Ellsworth Street. The Shadyside purchaser is paying for proximity and neighborhood externalities. 

Taking an average between these two neighborhoods will lead to the Shadyside owner being assessed at slightly more than half fair market value, while the Garfield owner would see his assessment be 9 times his fair market value. 

This is an extreme example, but it shows that communities have high local variability in property values and simple solutions are not good solutions.  Complex and expensive approaches are sometimes the only way to actually make a problem tractable. 

 

Prepping to bomb Iran

By Dave Anderson:

Via Gahlran at Information Dissemination:

Today, mentioned in passing in front of the Senate Armed Services Committee - without a word or question on the topic from any supposedly well informed Senators - Chief of Naval Operations Jonathan Greenert told the Senate committee that the US Navy is going to deploy 4 minesweepers to the Persian Gulf (which will double the number of US Navy Minesweepers in the Persian Gulf) and also send additional mine hunting helicopters to the region. This comes following news earlier this year that the US Navy is working on the USS Ponce to deploy to the Persian Gulf to be a full time Mine Warfare Command Ship....

And here is the charter. Note the timeline. Basically we seem to be in a hurry to get everything in place by summertime.

Other indicators that the US is anticipating a major military campaign by either the US or Isreal in and against Iran would be the deployment of more anti-missile batteries to Bahrain, salvage and naval construction units to multiple points on the western shore of the Persian Gulf, and additional E-8 JStars and E-3 Awacs that would be used to coordinate the anti-ship missile battery hunt. 

Pay attention to those moves as the precursors to a major operation against Iran. 

It Could Happen Here

Commentary By Ron Beasley

Could the catastrophe that caused the nuclear disaster at Fukishima been predicted?  It not only could have it was. But Japan's nuclear regulators and utilities not only ignored the predictions but supressed them.

But some insiders from Japan�s tightly knit nuclear industry have stepped forward to say that Tepco and regulators had for years ignored warnings of the possibility of a larger-than-expected tsunami in northeastern Japan, and thus failed to take adequate countermeasures, such as raising wave walls or placing backup generators on higher ground.

They attributed this to a culture of collusion in which powerful regulators and compliant academic experts looked the other way while the industry put a higher priority on promoting nuclear energy than protecting public safety. They call the Fukushima accident a wake-up call to Japan to break the cozy ties between government and industry that are a legacy of the nation�s rush to develop after World War II.

�March 11 exposed the true nature of Japan�s postwar system, that it is led by bureaucrats who stand on the side of industry, not the people,� said Shigeaki Koga, a former director of industrial policy at the Ministry of Economics, Trade and Industry, or METI, which both promotes and regulates the nuclear industry.

One of those whose warnings were ignored was Kunihiko Shimazaki, a retired professor of seismology at the University of Tokyo. Eight years ago, as a member of an influential cabinet office committee on offshore earthquakes in northeastern Japan, Mr. Shimazaki warned that Fukushima�s coast was vulnerable to tsunamis more than twice as tall as the forecasts of up to 17 feet put forth by regulators and Tepco.

Minutes of the meeting on Feb. 19, 2004, show that the government bureaucrats running the committee moved quickly to exclude his views from debate as too speculative and �pending further research.� None of the other 13 academics on the committee objected. Mr. Shimazaki�s warnings were not even mentioned in the committee�s final report two years later. He said the committee did not want to force Tepco to make expensive upgrades at the plant.

�They completely ignored me in order to save Tepco money,� said Mr. Shimazaki, 65.

But it's different here in the US, right?  Wrong! (via The Agonist)

Transcript available at The Center for Investigative Reporting.  The same story, the regulators are captives of the nuclear industry placing millions of Americans in danger.

Cross posted at The Moderate Voice.

Keeping people out

By Dave Anderson:

The summer of 1998 was a great time for me.  I had just graduated high school, I was in great shape as I was still lifting five days a week and swimming two or three miles a day, I had a car that (usually) got me from Point A to Point B, my friends and I had very reliably access to affordable and good beer, and chasing girls was almost always fun no matter the result.

I also had some serious cash in my pocket as I was working for the fourth year for my city.  That year, I had been promoted to water safety instructor/riverfront lifeguard.  My base pay was $12.00 an hour, and I could usually count on at least a couple of hours of overtime each week as we were short staffed because any kid with a pulse could find an above minimal wage job then. 

Most of my check was going into the bank as I was preparing to go to an elite university where the annual cost of attendance (tuition, room and board) was roughly the expected first year salary of a humanities' student.  But even with a 70% savings rate, I had a blast that summer.  My 1981 Toyota Tercel's tank could be filled for an hour of take home pay

Now, I am the referee coordinator for my school district's recreational soccer league.  I have spent most of the past week talking to my teenage referees because I need to start making the spring schedule.  I also want to push several of the better kids into doing medium level competitive games as it is an appropriate challenge and those games pay better at roughy $20/hour.

Older teens have it rough today. 

One of the kids I spoke with was interested as he is a smart kid but has not been able to find a job that pays above minimal wage for the past six months.   Filling the tank to his 1994 Mazda Protege will cost him at least two soccer games, perhaps a touch more if he does not have any grocery store loyalty/affinity points lined up.  He just got accepted to the same university I did.  Today, that university charges its freshman roughly the expected starting salary of a computer programmer with a top-3 program BS in CS.  He's hoping to make enough money between March 10 (the start of the preseason) and freshman orientation to pay his car and health insurance and then eke out a living on work study and refereeing the fall season to eat for the rest of the year. 

I'm sure he'll do fine.  He is a very smart kid with a good family able to provide a safety net, and he has both the hard skills and the softer (and far more valuable) people skills to do well for himself. But that conversation brought to mind this recent post by Ian Welsh on the economic trends of the next couple of years irregardless of who wins in November:

What has happened is that the general circle of prosperity has been reduced.  Less people now live in the �good� US economy.  When they drop out of that economy they also use a lot less oil and gas, and even electricity.

I'm just old enough that the cost of entry into the "good" US economy was not too high for most of my high school graduating class.  Tuition was rising but enough financial aid was actually grants or cheap ass fixed rate consolidation loans that college is not a complete backbreaker.  Gasoline was cheap enough that it did not constrain too many actions.  Economic life has not been golden for my high school cohort as we got out of college during the job-loss recovery of 2002-2003 and many of us spun our heels in several McJobs until something that vaguely resembles a career could be built.  And by now, most of the kids who did not attend or complete college have had enough time in their fields to actually be worth hiring due to their learning by doing as well as tacit knowledge.   

My brother is five years younger than me.  His cohort graduated high school in 2003/2004 and college just as the economy imploded from the housing bubble and Wall Street looting via the big shitpile.  Housing is too expensive anywhere the gas costs won't kill you, and student loan debt skyrocketed in just five years. 

Today's high school seniors are looking at educational bills that are ridiculous but are neccessary in order to buy the lottery ticket that might promise entry into the "good life" where even the good life means more of a paycheck goes into quasi-fixed energy costs because there is almost no place where the gasoline/time versus density trade-off favors density too strongly.  Even after they take on massive debts to get an education and probably another year or two of working/interning at subsistence wages to gain experience, there still are not jobs available for them that utilize their training.  They'll be competing for one more McJob against people who are more desperate (as they have kids/a mortage/no more student loan deferrements left) and have five years of similar McJob experience.  

The young referee who wants to do more and better games will probably scratch off an entry ticket, but more of his classmates won't.  And that trend will continue. 

The Costs of War

By BJ Bjornson

Some recommended reading for everyone from McClatchy on an issue that usually doesn�t get much press coverage when it comes to paying for wars, the costs of treating the veterans after the war has ended.

Some choice quotes:

The wars in Iraq and Afghanistan may be winding down, but the long-term costs of caring for those wounded in battle is on path to rival the costs of the Vietnam War.

. . .

According to VA and Department of Defense information compiled by the advocacy group Veterans for Common Sense, 2.2 million service members have deployed to one of the wars since Sept. 11, 2001; 942,000 have deployed two or more times.

Of those, 6,300 service members have died, and 46,000 have suffered non-fatal wounds in action. But more than 600,000 veterans have filed for VA disability benefits, and more than 700,000 have been treated in the VA's medical system.

"Right now, VA is getting about 10,000 new Iraq and Afghanistan claims and patients per month," said Paul Sullivan, executive director of the National Organization of Veterans' Advocates, which helps veterans file their disability claims. "The numbers are devastating."

. . .

Veterans today are applying with greater frequency and greater urgency than in years past.

Part of that, Bilmes said, is the nature of these wars. In previous wars, a general seeing a brigade under stress might have pulled it back � putting the soldiers on kitchen duty for a while, she said. Now, those functions are being handled by contractors, eliminating that relief valve.

"The guys who are out in the field are relentlessly out in the field," she said.

Beyond that, far more soldiers in this all-volunteer military have been back for two, three, four or five tours, and the long-term impact on hearing and on traumatic brain injuries caused by improvised explosive devices will be felt for years.

That last point is one that speaks to me, as it has come up many times before, though I hadn�t made the distinction regarding the use of contractors for non-combat work interfering with the means to give troops some down time before this.

The U.S., and the other countries involved in Iraq and Afghanistan, have been fighting these wars with their armies still more or less at peacetime levels, so as to not inconvenience the voting public too much, or make the more direct costs of the war all that visible beyond the relatively small population of those serving and their families. The burdens of these wars are being felt disproportionately on a very small group, and their limited size is concentrating that stress and burden to a degree it never would otherwise.

This is part of the arguments used by those looking for a reinstatement of the draft, a means of sharing the sacrifice far more equally as well as making starting such wars a lot more politically difficult.

The main point, however, is that the U.S. will be feeling the effects of these wars at home, and paying for them, for a long, long time.

Paying for services

By Dave Anderson:

A shocking event happened in Pittsburgh last night. Its citizens decided that they actually wanted to pay for public services. A special tax levy of $25 per $100,000 of taxable property was passed in order to partially fund the library system.

The Post Gazette has details:

By a margin of more than two to one, Pittsburgh voters Tuesday approved a binding referendum to add 0.25 mills to the tax on all real estate in the city, and steer the proceeds to the fiscally challenged Carnegie Library of Pittsburgh. The levy could bring more than $3 million a year to the library system for operations and maintenance.

In 2009, the Carnegie Library administration decided that branches...should be closed,... merged... and moved. Administrators said declining population, cuts in public funding, inflation.... Stopgap funding from the city and state forestalled the moves. The referendum drive sprang from that crisis.

That is almost un-American, being willing to pay for public services that are available to everyone including people like me, non-residents who are fairly heavy library users.

Policy versus Party

By Dave Anderson:

The Daily Kos morning election round-up has a piece up on PA-4, currently represented by Rep. Jason Altmire (D-Douchebag). And it is an analysis that portrays the difference between a party cheerleader and an ideological/policy orientated perspective:

Two environmental advocacy groups, the League of Conservation Voters and the National Resource Defense Council, are out with a pretty substantial ad buy against Democratic Rep. Jason Altmire ($350K). I've gotta wonder, though, whether it's a good investment dropping major cash on a Blue Dog in a smokestack-industry district where the charges aren't likely to resonate with his constituents, when there are faux-environmentalist Republicans in districts that are very receptive to environmental appeals who need softening up (cough, cough, Dave Reichert, cough...).

Altmire is a douchebag, there is minimal dispute there. If there is a barely contentious issue that polarizes on partisan lines, expect him to vote with 98% of the Republicans. It is what he has always done. The only area where is he is not a reactionary is on labor and pensions, and there he is a gettable vote.

A Party cheerleader will say that the value of Altmire is a single vote for the Speaker, and everything else is gravy. And there is validity from a specific policy implementation viewpoint as control of the Speakership means control of the agenda and a Democratic Speakership and thus majority would get a decent chunk of the super special counter-productive off the agenda. 

However, an organization that has policy goals has a different objective. Their objective is to get policy passed and/or fundraise off their inability to get an agenda passed due to a boogeyman of the month. Control of the agenda and thus the single partisan vote criteria mentioned above is important, but fear is also important.

The NRA is extraordinarily effective at achieving its policy goals because all Republicans and a good chunk of Democrats fear them. They know that if the NRA wants to make an example out of a "bad" vote, there is a at the minimum a very nasty, expensive, and exhausting electoral win, and a decent chance of an electoral defeat. And more importantly, the NRA will claim the scalp. Politicians will not cross the NRA unless they are coming from a D+10 or better district where a pro-gun candidate is not a viable primary or general election threat. And thus, the only gun debate in this country is what laws should be repealed.

Knocking out a theoretically partisan friend who has consistently voted against your desired policy outcomes induces fear and increases compliance with a policy agenda, and thus a $350K drop by nominally Democratic leaning group against a Democratic incumbent makes a good deal of sense.

The unthinkable is the way to go

By BJ Bjornson

Following up on Dave�s post about the financial world�s shocked reaction to a country stooping to democratic means to determine its fate, it appears that the conversation is turning in the direction of bowing to the inevitable, defaulting on their debt and leaving the Euro to return to their former currency, the drachma.

Such a move is still officially anathema in Athens. But a growing body of economists argues that it would be the best course, whatever the near-term financial and economic implications. And now, with a referendum on the European-led bailout facing Greek voters, a vocal minority that has long called for a return to the drachma might find itself with a growing group of listeners.

A return to the drachma is unlikely to offer a quick cure for Greece�s ills. Default on the nation�s $500 billion in public debt would become a certainty, depositors would take their money out of local banks and, with a sharp devaluation of as much as 50 percent, inflation would loom. A return to the international credit markets would take years.

But drachma defenders contend that these worst fears are overdone. Yes, there would be disruption and panic initially. But, they say, pointing to Argentina�s case when it broke its peg with the dollar in 2002, the export boom ignited by a cheaper currency and the ability to control the drachma would eventually work in Greece�s favor.

All of which pretty much matches what I�ve been hearing for quite some time. There is of course more than a little fear that returning to the drachma will be painful, and that fear is not unfounded. But the harsh truth is that getting Greece�s books in order is going to be painful whatever way they go, and at least returning to the drachma and regaining control of their currency, offers a far more plausible way out of the mess than remaining with a currency they don�t control and whose value is based on far healthier economies than its own.

Of course, Greece has other problems that won�t be solved by simply returning to the drachma, such as the reason that they found themselves needing to borrow so heavily beyond their capacity to repay in the first place. Thanks to a link John provided in the comments to Dave�s post, we can safely say that the issue isn�t actually the favourite bugbear of conservatives everywhere, namely over-generous spending on benefits for poor people, but an all-too-common failure to look at the revenue side of the equation, particularly for a certain class in a way that looks all too familiar to the debates on this side of the Atlantic.

Historically, Greeks have been very good at constructing myths. The rest of the world? Not so great, if the current burst of commentary on the country is anything to go by. Reading the press, one gets the impression of a bunch of lazy Mediterranean scroungers, enjoying one of the highest standards of living in Europe while making the frugal Germans pick up the tab. This is a nonsensical propaganda. As if Greece is the only country ever to cook its books in the European Union! Rather, the heart of the problem is in the antiquated revenue system that supports that state, which results in a budget shortfall consistently about 10% of GDP. The top 20% of the income distribution in Greece pay virtually no taxes at all, the product of a corrupt bargain reached during the days of the junta between the military and Greece�s wealthiest plutocrats. No wonder there is a fiscal crisis!

So it�s not a problem of Greek profligates, or an overly generous welfare state, both of which suggest that the standard IMF style remedies being proposed here are bound to fail, as they are doing right now. In fact, given the non-stop austerity being imposed on Athens (which simply has the effect of deflating the economy further and thereby reducing the ability of the Greeks to hit the fiscal targets imposed on them), the Greeks really are getting close to the point where they may well default and shift the problem back to those imposing the austerity. This surely can�t be much worse than the slow execution they are facing today.

Emphasis mine. I�m beginning to see a certain inevitability to this solution. And as to the fears that doing so will cause the rest of the financial world to shun the country and cause its total collapse, the same was said of Iceland when they refused to socialize the gambling losses of their banks. The decision did hurt them, but they are recovering nonetheless.

Greece�s sovereign debt is a different matter, but as the quote above notes, whatever short-term pain a default may cause, suffering through a slow execution under the current regime is likely to be worse. Get it over with already.

The Ogallala Aquifer

By BJ Bjornson

I hadn�t heard of Charles Pierce until a couple of days ago when he was referenced a couple of times over at Balloon Juice, but I am glad that I�ve started reading him.  There is an excellent, if somewhat long read on his blog now regarding an issue that I�ve seen mentioned every now and again, and which will become far more important in the very near future, the Ogallala Aquifer.

Under the high plains of the midwest, there is a resource called the Ogallala Aquifer, which is a subsystem of a huge underground mega-system called the High Plains Aquifer. It is made of permeable layers of sand, sandstone, and gravel within which are contained billions and billions of gallons of water. The nature of the aquifer geology makes the water easy to pump. The system covers 174,000 square miles beneath eight different states, ranging north-south from North Dakota to Texas, and from Nebraska in the east all the way west to parts of New Mexico. Nebraska depends most vitally on the water found in the aquifer. And there are two concerns about the aquifer that ought to be serious concerns in our politics, but that aren't. One of them isn't being treated as a concern at all. The other is not being treated seriously, but instead as a slogan and one more litmus test by the Republican presidential candidates, and as some sort of nuisance complaint by a Democratic administration that appears to be falling down on the job.

The first problem is that portions of the aquifer are running dry. The second is that Trans-Canada, the Canadian oil giant, wants to run a pipeline through a portion of the aquifer in Nebraska. How you feel about that depends entirely on how much you trust oil companies these days, because your State Department appears to be taking a dive on the question, and your Environmental Protection Agency is dodging it entirely.

Make no mistake. You screw with the Ogallala Aquifer and you screw with this nation's heartbeat. Twenty percent of the irrigated farmland in the United States depends upon it. Pumping the water from it is all that has kept the Dust Bowl from coming back, year after year. Any damage to it fundamentally changes the lives of the people who depend on it, their personal economies, the overall national economy, and what we can grow to feed ourselves. Absent the aquifer, and the nation's breadbasket goes back to being a prairie, vast grasslands that the people who first crossed them referred to as a desert. You end up with dry-land corn and some dry-land wheat. And the aquifer is far easier to empty than it is to fill. The technology to fully exploit it has existed only since the 1950's, and portions of it are already dangerously low. It won't be fully recharged until the next Ice Age.

The whole thing is worth reading, and it is worth remembering that this is a subset of a much larger problem that�s becoming more common everywhere.  Water is only renewable to the extent that you don�t take more out a system than can be replenished by it, and in far too many cases, we�ve been doing just that, not just for drinking and bathing, but to cool our power plants and water our lawns (okay, no lawns where I live, but you know, in general).  Even worse is how it gets used for things like fracking and processing bitumen from the tar sands, which doesn�t just suck up the water resources available, but contaminates it so it can�t be recycled for other uses later.

This is already the source of actual armed conflict in many places, and it is an issue that will only spread as climate change shifts rainfall patterns.

Slash and Burn Politics

By BJ Bjornson

I should preface this post by noting that I was opposed to Canada�s long gun registry when it was introduced. Not that I am an opponent of gun control in general or anything, but the registry as it was proposed seemed a far too expensive program with nowhere near enough benefits to justify it. The rather remarkable cost overruns and issues with its implementation did nothing to change my mind on that point. For the first several years of its life, the long gun registry was little more than a costly boondoggle we could have done without.

That said, once the registry was up and running, the cost of maintaining it is far from onerous and, despite some other issues I�m aware of, seems to have been of considerable value in a lot of cases.

"The long-gun registry has made a significant difference in the safety of women in Canada since its inception in 1995. The rate of spousal homicide by gun has gone down 69 per cent and we attribute most of that to the impact of the gun registry,"

According to the CBC article, and quoting Conservative spokespeople at that, the registry has cost $2 billion total, but operation and maintenance of the registry is less than $22 million/year, since that figure includes the restricted weapons database that is being kept. Basically, almost all of the cost was in the setup and implementation, operating the registry is actually quite cheap. As such, getting rid of it now seems like as much of a waste as its original implementation was, with the added nuisance of the near certainty that some form of the registry will be brought back, again at considerable cost, at some point in the near future. Still, it is no surprise that the Conservatives would be looking to get rid of the registry to keep the Canadian wing of the NRA happy.

What has come as a surprise, and what shows just how pathological the Conservatives are now that they have unquestioned power, is the decision to not just scrap the registry, but to completely destroy all of the records so far collected.

Bloc Quebecois MP Maria Mourani said it makes no sense to get rid of the data that's already been collected and that it shows that Prime Minister Stephen Harper doesn't value the opinion of Quebec.

"It's not a fair attitude," she said.

Liberals also weighed in on the new bill, calling it an "ideological attack on facts and evidence" and objecting to the government's intention to destroy the database.

�The data collected over the last 16 years must be preserved, so that provinces can salvage this important policing tool,� interim leader Bob Rae said in a statement.

[Public Safety Minister Vic] Toews stood firm on the decision to destroy the records in the database, leaving other jurisdictions on their own if they want their own registries.

"We've made it very clear we will not participate in the recreation of the long-gun registry and therefore the records that have been created under that long gun registry will be destroyed," he said Tuesday.

It isn�t enough for the Conservatives to simply end the registry, they have to take the added step and cost to completely obliterate the 16 years of record gathering already done and purposely hobble any attempts by provincial jurisdictions to continue a version of it, even if the program happens to enjoy widespread support there. (This is, of course, the exact opposite tack to the one conservatives took when the registry was first debuted, when they claimed it was something that should be up to the provinces rather than the federal government.  Much like their southern brethren, "states' rights" only apply when they can't get the federal government to implement their desired policy option.)Pathological is really the only word I can think of that describes it.

The Energy Trap

By BJ Bjornson

In a comment to my post regarding electricity use and cars, Bill H. said the following:

Well it doesn't really matter whether a car, electric or internal combustion, uses more or less electricity, but whether it uses more or less energy. Electricity is, for the near future, generated almost entirely with fossil fuel, but even when that eventually is no longer the case, the consumption of energy in any form is detrimental to some degree.

And there is still the matter of the amount of energy and natural resources consumed in manufacturing the car, the type and availability of resources needed to make the energy storage devices for the car, and the disposal of worn out cars and, in particular, expired energy storage devices for the cars.

We don't need to be thinking in terms of cars that use a little bit less energy, we need to make a quantum change in the way we interact with our planet, such as thinking of a way to live without cars at all.

The comment brought to mind this rather excellent post by Tom Murphy on the Energy Trap:

In brief, the idea is that once we enter a decline phase in fossil fuel availability�first in petroleum�our growth-based economic system will struggle to cope with a contraction of its very lifeblood. Fuel prices will skyrocket, some individuals and exporting nations will react by hoarding, and energy scarcity will quickly become the new norm. The invisible hand of the market will slap us silly demanding a new energy infrastructure based on non-fossil solutions. But here�s the rub. The construction of that shiny new infrastructure requires not just money, but�energy. And that�s the very commodity in short supply. Will we really be willing to sacrifice additional energy in the short term�effectively steepening the decline�for a long-term energy plan? It�s a trap!

He proceeds to lay out a pretty good analysis of the issue, and I encourage you to read through it. For my purposes, it is important to note that a major part of the reason for this trap is the significant upfront costs in energy for most renewable sources such as solar and wind. To use solar or wind power, you need to build all of the components and energy storage devices ahead of actually getting any energy out of it, and that upfront cost counts against what you have left over to use.

Best way to avoid having to deal with such an issue would be to invest in those upfront costs while enjoying a surplus, which on the energy front has been the case for most of the last several decades. The only problem being that we haven�t really worked all that hard in preparing for fossil fuels� replacement, and we�re now getting to a point where the trap starts to limit our decisions.

Even more fun from a policy standpoint is the fact that fossil fuels don�t tend to fall into the same kind of trap.

For resources that do not require substantial up-front cost in the form of infrastructure, the trap does not apply. Fossil fuels tend to be of this sort. The energy required to deliver a barrel of oil or a ton of coal tends to be specific to the delivered unit, and is not dominated by up-front cost. It is similar for tar sands, which requires substantial energy to heat and process the sludge. Even at 5:1 EROEI, filling a 2-unit gap can be achieved by producing 2.5 units of output while losing 0.5 units to investment. Thus it is possible to maintain a steady energy supply. The fact that fossil fuels don�t trap us encourages us to stick with them. But being a finite resource, their attractiveness is the sound of the Siren, luring us to stay on the sinking ship. Or did the Sirens lure sailors from ships?  Either way, fossil fuels are already compatible with our transportation fleet, strengthening the death-grip.

Two things of further note. We are already at peak production of oil, which is why we�re seeing such wild swings in prices with major upswings whenever the economy starts to show signs of life and people start driving and using more energy again. While sinking our resources into new and improved ways of extracting the resource (and continuing the doom that is climate change and just plain old pollution) will help in flattening out the decline, it won�t stop it, and will likely assist in our reaching the peaks of other fossil fuels even faster.

The second point is that the analysis in Tom�s post assumed a constant energy need or usage, at least in respect to fossil fuels. Even at that point, we�re looking at painful shortages if we want to replace the source of that energy with renewables, but the situation is in some respects even worse.

The reality is that we�ve been increasing our energy needs year by year, even despite greater efficiency is our use of said energy. This is mostly due to more people using that energy, as living standards in even the Third World start increasing, but the end result is that the coming crunch will be worse due to the fact that we won�t just be trying to maintain a constant amount of energy for our use, but trying to find a way to continue increasing the energy available.

This is where you run into the reality that such a solution is just plain impossible. As the economist Graeme Maxton noted in a video Ron posted last week, �on a finite planet, the only people who believe we can grow forever are the mad, or economists.�

All of which brings us back to Bill�s point that we need a quantum leap in the way we deal with our planet. We are, and have been for some time, living well beyond our means, pilfering the planet�s inheritance at an astonishing and ever accelerating rate. This holds most obviously with fossil fuels, but also includes nominally renewable resources such as aquifers, forests, fish stocks, and numerous others, and it simply cannot last.

One way or another, we are going to be forced back into balance with nature, either through some incredibly tough choices or our effective self-destruction. Given our history, I wouldn�t put very good odds on the former, which means your best hope is probably something along the lines of John Robb�s resilient communities idea, where you hope you can leverage local surpluses now to create places that can survive the coming disruptions intact.

Any way you look at it, the future isn�t looking to be all that bright a place for humanity.

Trends and Auto Fleet sizes

By Dave Anderson:

Karl Smith at Modeled Behavior argues that the short term destruction of American vehicle capital stock is an aberration and is a primer for a boom in the intermediate future:

Well, because as of the last few years the auto fleet in the United States has begun to shrink. That is, we are scrapping cars at a faster rate than we are producing them. Unless something changes in the next 18 months, our scrappage rate will begin to exceed new cars sales by the millions of units per year. In a country that is still growing in population and still adding drivers every year its hard to explain why the optimal path is suddenly for the vehicle fleet to shrink.

This analysis assumes long term trends are still the relevant comparison. That usually is a good bet.

However the other option is to assume that we are in an error of austerity. The Reagan and post-Reagan era economic paradigm has assumed that the non-elites have had it too easy, and that whenever there is any inflationary pressure of any sort in any sector, the key is to exclude more non-elites from consumption. 

American teenagers are delaying their first driving licenses and more Americans do not own cars. A car is an expensive capital investment and an even more expensive ongoing expense. In a few areas in this country, it is quite plausible for an adult to fully function as a citizen, an employee and an adult without one car per adult. However most areas of the country are not dense enough nor interconnected enough for carlessness to not be a major ongoing expense.

This interpretation would say that more Americans are being forced out of the fully involved middle class because they can no longer access cars. Without a car, non-urban core employment opportunities are severely restricted, consumption opportunities are restricted, and energy consumption, which is the limit on American economic growth, is minimized. 

It is from this interpretation that the 99ers demands that the American Dream that we have been sold on, and we have been indebted to either be made to work for most of us, or the debts forgiven as we had been sold a bill of counterfeit goods. 

Peak Oil - Geologists VS Economists

Commentary By Ron Beasley

You may have noticed that I don't refer to Peak Oil but Peak Cheap Oil. Our economy is dependent on cheap oil for transportation.  Eaun Mearns explains that Peak Oil is more about economics than geology but that the economists don't get it right either.

For a number of years there has been an arid debate between economists and geologists about Peak Oil. The geologists maintain that Peak Oil (maximal production) is a geological imperative imposed because reserves are finite even if their exact magnitude is not, and cannot be, known.

In contrast many economists maintain prices will resolve any sustained supply shortfalls by providing incentives to develop more expensive sources or substitutes. The more sanguine economists do concede that the adaptation may be slow, uncomfortable and economically disruptive.

They are both correct.....

.....but that Peak Oil is, in fact, a complex but largely an economically driven phenomenon that is caused because the point is reached when: The cost of incremental supply exceeds the price economies can pay without destroying growth at a given point in time.

So what is that price?  WTI has been in a range between $80 and $90 bbl.  We have seen at best anemic economic growth.  Any thing above $90 will result in stagnation or even negative growth - recession.

The economists say that we can adapt to higher oil prices.

As adaptive responses come through in terms of more efficient vehicles, social and organisational changes such as more home working and the improving economics of energy alternatives, economies will become better able to cope with higher oil prices and suffer less economically.

But it's not happening nearly fast enough in large part because of successful resistance by big oil and coal and I'm not sure it even applies to transportation.  The result is oil the economy can't afford and low or no growth.  What you won't hear from the politicians or CNBC:

Since there will never be a return to low oil prices during periods of sustained economic growth, the chance of there ever being sustained economic growth is approaching zero.

You won't hear this from the politicians not because it's not true but it's not what the voters want to hear.  Some of the politicians are in denial but many know what we face.  They also know there is little we can do about it.  So all we get from the politicians are attempts to blame the other tribe. 

Talking About Solutions

By Steve Hynd

Over at his own blog, my Polizeros radio co-host Keith Boyea observes that we do too much kvetching.

We�ve noticed that our discussions have sometimes degenerated into �bitch sessions,� so instead of complaining about things, we wanted to do an episode where we talked about potential solutions.

He and I have both blogged this week about the kind of wide randing solutions that we believe this country needs to implement to dig itself out of its self-made hole. There's more than a couple of shows in the list, for sure, but we'll make a start on discussing it tonight.

Political reforms

• Campaign finance reform so access becomes fair and equal for all, This is crucial


• Genuine access for third parties. Level the playing field


• More members in the House (and maybe the Senate too.)


• Ending officials abusing journalistic stenography

Domestic reforms

• Cut unemployment drastically, probably by a real job plan they employs millions.


• View Energy, Transportation, and Housing as an integrated issue by simultaneously:
  1) Investing in nationwide freight rail and high-speed rail in regions where it is best suited.
  2)Investing in nuclear energy now, even though it has a long development time because breakthroughs in alternative and clean energy are probably decades away.
  3) Encouraging the development of higher density housing and zoning policies which make communities walkable and ride-able. This allows the development of work/eat/sleep communities that require shorter commutes, less energy consumption, and better utilization of mass transit.

• Budget changes so that the big spenders like Defense don�t eat all the pie and the national debt doesn�t just grow forever, tax reforms so that everyone pays their fair share instead of the share an army of tax-dodging experts can get them, ending the too obvious culture of privilege � where laws get ignored for specific sets of people (banking fraudsters, government torturers and government gun-runner to name but a few), infrastructure spending to repair American competitiveness, long-term thinking about climate change, energy, education and innovation.


• Smart grid, conservation, decentralizing power distribution (and political power.)

Foreign Policy reforms

• A resurgent Peace Corps so that practical things can again be done by people who don�t carry guns, ending wars and occupations that don�t address core interests, realistic �future threat� and �core interest� assessments, not always reaching for the bigger hammer as soon as possible.


• Divest ourselves of �ownership� of the Middle East in part by developing the energy policies listed above. It is no secret that much of our interest in the region derives from its abundance of oil. Especially divest ourselves of our relationship with the Saudi monarchy�the same one that makes all our claims of caring about human rights hypocritical.


• Make a sustained and serious effort at encouraging reconciliation between Israel and Palestine. If, after 2 or 3 years of sustained effort, progress cannot be made, divest ourself of support of BOTH sides.


• Don�t view China�s rise as zero-sum. It is not something we can �manage.�

Listen to the show live, at Polizeros Radio on BlogTalkRadio. You can also listening by dialing in at 626-414-3492. The show is tonight at 8:00 PM PT (9:00 PM MT, 10:00 PM CT, 11:00 PM ET.) You can download it or listen to the archive on BlogTalkRadio after it�s done.

Now that's a progressive agenda, and a populist one - but it's not a Democrat one. Folk like Matt Yglesias and Ta-Nehisi Coates are entirely missing the big point as they wonder why many of the elite Dem political class are attacking Obama's weak-tea, but still better than nothing, jobs bill from the right. It's like the old joke about the tourist who gets lost and asks a local for directions, where the local replies "well, first - I wouldn't start from here!"

You can't get more than a fraction of a populist and progressive agenda out of a party run by Whigs; by which I mean members of the rich elite who on occasion let their consciences bother them. When really pushed, they'll always vote the interests of the rich elite. And the "need more and better progressives in the Democrat Party" line has not and will not ever work because that party is entirely owned by Whigs and Whig financial backing.

Progressives, up to and including the President if he's as liberal as Obama boosters would have he is, should desert the Dems en masse and create a new Populist Party that could activate and energise the 25% of Americans - always the poorer ones - who don't vote at present because neither party of the rich elite has any concrete positive change to offer them. That'd be a good start to a solution, because between the progressive wing of the Dems and mobillizing even half of the disenchanted, a Populist party would already be the electoral frontrunner.

Still, building a new party does not happen overnight. It'd take a decade, maybe more, during which Republicans would have the electoral upper hand. But they've had that upper hand before and America is still here. The nation won't die with a bang, but it might with a whimper if progressives continue to listen to the "most important election EVAH" spin that keeps them supporting the Whigs.

American Dreaming

By Steve Hynd

Harlan Ullman does some "real talk":

Sometimes, delusion, self-deception and outright denial can dominate the public's psyche. As the U.S. economy stutters, unemployment refuses to budge and the 10th anniversary of September 11th looms, many Americans question or challenge the notion of the American Dream. For too many, that vision is, today, elusive or unobtainable. In compensation perhaps, America's past successes are often exaggerated or distorted.

Realism is vital in addressing tough issues. Unfortunately, realism brings the hint, not of objectivity, but pessimism. And, in politics, optimism, no matter how far-fetched usually trumps pessimism.

Ronald Reagan's "Morning in America" defeated Jimmy Carter in 1980 and four years later Walter Mondale. While Carter never used the term "malaise," his pessimism, along with exceedingly high inflation and interest rates, termed the misery index, and the failed Iranian hostage raid, assured Reagan's victory. Mondale was forthright in predicting that despite the rhetoric, Reagan would increase taxes. Reagan vehemently denied that charge; won and raised taxes nearly a dozen times during his tenure.

Realism is also important in remembering history as it was, not as we would like it. Despite the intent to perceive even past crises as halcyon days, that simply was wrong.

The reasons why the United States managed to accede to greatness weren't because of its so-called exceptionalism, given that most countries believe in their own uniqueness. In part, America was lucky. In part it had huge resources. And, in part, its founding fathers were unique in history.

...The United States is indeed a very fortunate country. It is the wealthiest and militarily strongest state in the world. Unfortunately, that power isn't automatically fungible in resolving most of the problems and crises it faces. And, as long as the country fools itself by reinterpreting or forgetting the past, it is difficult to see how those same distortions can be prevented from wrongly affecting the manner in which it deals with the present and the future.

If the American Dream is to be sustained, and we shouldn't delude ourselves believing that this is an eternally destined right, only the American people can ensure that objective. Americans must demand of their elected officials mature, objective and competent government, absent as much as possible, ideological extremes and the bitter partisanship infecting the nation. And, sadly, this might be the most extreme form of Americans dreaming.

Sadly, as I quipped on Polizeros Radio last night, the realist picture of America's woes reminds me far too much of the old joke about a tourist, hopelessly lost, asking a local for directions and getting the answer "Well, I wouldn't start from here."

 Two weeks ago, I posted a piece wondering what could be done to find the elusive solutions the nation needs.

Ask anyone and they'll have some ideas - then on further thought they'll say "but it wouldn't work because..." and the following will be some reasons that at base are a mixture of apathy and elite manipulation of the political process. The same base problems we so desperately need to deal with.

What's to be done? Is this just the way it is, something people shouldn't struggle against? Or is there a way out of the apathy trap?

Today, Ron suggests that there's probably no help for the situation - that America and the Western/capitalist model of civilization have just become too complex to self-sustain.

 Taiinter attempts to explain why civilizations fail. In short Tainter thinks they collapse because they become too complex. The only solution to over complexity is simplification but complex systems are unable to voluntarily simplify. Collapse is nothing more than involuntary simplification.

Is that it? Is it truly the case that, as Ullman writes, "realism brings the hint, not of objectivity, but pessimism", or are there solutions to the Gordian Knot? Next week on Polizeros Radio we hope to look at some possibilities. Those include but are not limited to:

Political reform: making campaign finance about equal access to power for both rich and poor, increasing third party access so that everyone can have a share in the conversation, using referendums to bypass bipartisan intransigence, ending officials abusing journalistic stenography and more.

Domestic Policy Platform: Budget changes so that the big spenders like Defense don't eat all the pie and the national debt doesn't just grow forever, tax reforms so that everyone pays their fair share instead of the share an army of tax-dodging experts can get them, ending the too obvious culture of privilege - where laws get ignored for specific sets of people (banking fraudsters, government torturers and government gun-runner to name but a few), infrastructure spending to repair American competitiveness, long-term thinking about climate change, energy, education and innovation.

Foreign Policy Platform: a resurgent Peace Corps so that practical things can again be done by people who don't carry guns, ending wars and occupations that don't address core interests, realistic "future threat" and "core interest" assessments, not always reaching for the bigger hammer as soon as possible.

It'll be a busy show - we may not have time for it all. But I'd really like for readers to give their own ideas on how to "get there from here", or write their own piece and give us the link in comments.

Why should a couple of tiny blogs and tiny radio show try to do something as ambitious as this? Why the hells not.

Update, Monday Sept. 12th: Keith Boyea has some thoughts too.

This isn�t a list of everything I think needs to be done, just a few that are either creative, overlooked, or achievable.

Political Reforms:

• Increasing the number of Representatives in the House of Representatives to bring the Reps closer to constituents, encourage the growth of �third parties,� and encourage cooperation between Members.

Domestic Reforms:

• View Energy, Transportation, and Housing as an integrated issue by simultaneously: (1) investing in nationwide freight rail and high-speed rail in regions where it is best suited. (2) Investing in nuclear energy now, even though it has a long development time because breakthroughs in alternative and clean energy are probably decades away. (3) Encouraging the development of higher density housing and zoning policies which make communities walkable and ride-able. This allows the development of work/eat/sleep communities that require shorter commutes, less energy consumption, and better utilization of mass transit.

Foreign Policy Reforms:

• Divest ourselves of �ownership� of the Middle East in part by developing the energy policies listed above. It is no secret that much of our interest in the region derives from its abundance of oil. Especially divest ourselves of our relationship with the Saudi monarchy�the same one that makes all our claims of caring about human rights hypocritical.


• Make a sustained and serious effort at encouraging reconciliation between Israel and Palestine. If, after 2 or 3 years of sustained effort, progress cannot be made, divest ourself of support of BOTH sides.


• Don�t view China�s rise as zero-sum. It is not something we can �manage.�

Hopefully we will get a chance to talk about some of these this Thursday.

On not stopping the skim

By Dave Anderson

Matt Yglesisas passes along an interesting technocratic proprosal from Dean Baker on opening up the federal employees' Thrift Savings Plan to anyone with a 401(k) or a 403(b).

why not a public option for retirement savings? Baker points out that 401(k) management fees average 1.0 percent of the the value of assets while the federal Thrift Savings Plan has a mere 0.15 percent fee average fee. Why not open the TSP up to workers and employers in the private sector?

Besides which, the fees aren�t giant relative to any particular worker. But in the aggregate, the combination of the subsidy with the indirect selection of fund mangers creates a gargantuan sum of money available for skimming.

This is a good proposal. It would save lots of money for lots of people over a long time frame. It would improve savings, and it would improve retirement security for most Americans.

It won't pass.

The skim goes to our Galtian overlords, and they will buy off at least 1.75 political parties to protect their pointless revenue stream. It is the same reason why a public option for health insurance was never a serious option as it would put pressure on elite revenue streams. In either case, the federal government's ability to absorb and distribute massive amounts of intertemporal risk, cut frequent checks and negoatiate with massive leverage in order to improve the well-being of the bottom 95% of the income distribution would make the top chunk of the income distribution a little less rich. And we can't have that at all, not in America, praise be Galt.

And it's one, two, three

Commentary By Ron Beasley

And it's one, two, three,
What are we fighting for ?
Don't ask me, I don't give a damn,
Next stop is Vietnam;
And it's five, six, seven,
Open up the pearly gates,
Well there ain't no time to wonder why,
Whoopee! we're all gonna die.

Country Joe and the Fish

Those of us who are old enough to remember Vietnam - yes that includes me, although I was never in Vietnam I was in the military from 1968 to 1971, can easily replace Vietnam with Afghanistan in the lyrics above. 

James Joyner asks: Should we Honor Fallen SEALs by Questioning Their Mission?  He quotes our friend Joshua Foust who says this:

The real scandal in Afghanistan isn�t that Americans are getting killed. The real scandal is that we don�t know why we�re there. President Obama�s goal of disrupting, dismantling and defeating Al Qaeda has been largely accomplished. The Afghan government has a sufficiently large enough military to prevent a total Taliban takeover, and with a political reconciliation there is every likelihood that Al Qaeda will be denied access to Afghanistan.

Tragic as the loss of those soldiers is, without a clear strategy articulated by our leadership, it�s difficult to say what grander purpose they served. Rescuing other troops is a noble mission, and those that died in service to this mission all deserve our profound thanks. But if the war they�re fighting has no purpose and no definable end state, we should be questioning why they have to perform such heroic acts in the first place.

We should � we must � mourn the dead. But after we mourn, we should also ask why they�re being asked to sacrifice so much for a war that�s being propelled solely by inertia. The war is as incomprehensible post-crash as it was pre-crash. Despite our grief at this loss, our questions about why we�re there remain the same.

What Joshua is saying is we have accomplished  the mission so why are we still there?  For an answer we turn again to Country Joe:

Come on Wall Street, don't be slow,
Why man, this is war au-go-go
There's plenty good money to be made
By supplying the Army with the tools of its trade,
But just hope and pray that if they drop the bomb,
They drop it on the Viet Cong.

Different decade, different enemy but same purpose - the military industrial complex is making a lot of money.  We really should have listened to this guy:

I agree with James Joyner:

It�s an age-old cliche that we should honor the fallen by ensuring that the didn�t die in vain. To the extent that this motivates their comrades, it�s a great part of the warrior code. But if the fight is unwinnable�or has been as close to won as we�re likely to get for years�it�s also a recipe for getting more good men killed.

So it's not just us dirty f**king hippies anymore.

The Reinvention of the World Economy

Commentary By Ron Beasley

The politicians of both parties, the Federal Reserve and the Treasury Department keep telling us that at some point economic growth will return to rates we have seen in the past.  They are:

1. In denial


2. Idiots


3. Lying

This is what makes debt, both government an non government, a serious problem.  The economic growth much of the world has experienced for several decades was unsustainable and has come to and end.  A credit based economy is dependent on economic growth to pay the interest. The economy is going to be reinvented and we have two choices:

1. We can let it reinvent itself


2. We can guide it

If history is a guide we will chose number one.  So why the end of growth?  Richard Heinberg  explains:

Many financial pundits point to profound problems internal to the economy�including overwhelming, un-repayable levels of public and private debt, and the bursting of the real estate bubble�as immediate threats to the resumption of economic growth. The assumption generally is that eventually, once these problems are dealt with, growth can and will pick up again. But the pundits generally miss factors external to the financial economy that make a resumption of conventional economic growth a near-impossibility. This is not a temporary condition; it is essentially permanent.

Altogether, as we will see in the following chapters, there are three primary factors that stand firmly in the way of further economic growth:

• The depletion of important resources including fossil fuels and minerals;


• The proliferation of environmental impacts arising from both the extraction and use of resources (including the burning of fossil fuels)�leading to snowballing costs from both these impacts themselves and from efforts to avert them and clean them up; and


• Financial disruptions due to the inability of our existing monetary, banking, and investment systems to adjust to both resource scarcity and soaring environmental costs�and their inability (in the context of a shrinking economy) to service the enormous piles of government and private debt that have been generated over the past couple of decades.

In short we are running out of resources we can afford.  Peak Oil gets most of the attention.  We are already at peak cheap oil - yes there is plenty of oil left but can we afford it?  If we are talking about maintaining our consumption based global economy the answer is no.  It's not just oil.  It's water, phosphorus, tin and nearly every other mineral resource.  It's still there but we have picked all the low hanging fruit and the cost of discovery, production and delivery will continue to increase.

A simplified explanation:

When the politicians tell you they can make things just they way they were in the 50s, 60s, etc don't believe them. 

Come gather 'round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You'll be drenched to the bone
If your time to you
Is worth savin'
Then you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'.

~Bob Dylan

Boring but persistant fantasies

By Dave Anderson:

Kevin Drum has the quote of the week:

It's [budget deal and the super duper Congressional committee's cuts] a shit sandwich no matter how you look at it. And it's a shit sandwich in at least two very specific ways: (1) It means we'll continue to live in a fantasyland that says we don't need any tax increases even though our population is aging and we're plainly going to need higher revenues to support this demographic reality; and (2) we'll continue to live in a fantasyland that says our problems are primarily caused by discretionary spending. This is, of course, exactly the opposite of reality, which means we're going to screw the poor and do nothing serious about the long-term deficit. Nice work, adults.

Ignoring reality is a dangerous game as reality will overwhelm the best PR spin over the intermediate to long term.