Oct 192019
 
 October 19, 2019  Posted by at 7:48 pm Finance Tagged with: , , , , , , , , , , , ,  14 Responses »


Rembrandt van Rijn Landscape With the Rest on the Flight into Egypt 1647

 

Hmm, energy. Is it a good idea I be drawn back into the subject? We used to do so much on the topic, Nicole Foss and I, in the first years of The Automatic Earth, and before that at the brilliant Oil Drum, where we had all those equally brilliant oil professionals to guide us on. So why revisit it? Well, for one thing, because a friend asked.

And for another because things -may have – changed over the past 15 years or so. Not that I think the peak oil idea, which is that we reached the peak in 2005 or so, changed. Yeah, unconventional oil, shale, fracking etc., came about, but that has nothing to do with peak oil. Just look at the EROEI (energy return) you get from shale. You go from 100:1 to, if you’re lucky, 5:1. You can’t build a complex society on that.

It’s not an accident that shale oil firms are going broke all over; even ultra low interest rates can’t save them. But all that still doesn’t come close to scratching the surface of our energy -or oil, for that matter.- conundrum.

 

I’ve never understood what the idea behind the Extinction Rebellion is. Or, you know, that they know what they’re talking about. Do they know the physics?

The general idea, yeah, but not how they aim to reach their goals. Far as I can tell, it’s about less CO2 -and methane, supposedly- emissions, but I don’t get how they want to achieve that. I’ve read some but not all of their theories, and it’s not obvious. It feels like they want less of various things, only to replace them with something else. Like they think once oil is gone, you can put wind and solar in its staid, and off we go. Tell me how wrong I am. Please do.

I have the same with the various Green New Deals. What do they want? How do they aim to achieve their lofty goals? I looked at the Wikipedia page for a Green New Deal, and it tells me it’s an American thing, “invented” recently by Alexandria Ocasio-Cortez and some other people. But I know that’s not true, because other people had the same idea with the same name in the UK 10-12 years ago.

And then Yanis Varoufakis also has a thing he labels “Green New Deal”, a global one no less, but in a recent article, I didn’t get many specifics of that either.

Let’s go with AOC and friends’ points as Wikipedia lists them:

“Guaranteeing a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States.”

What’s not to love?

“Providing all people of the United States with (i) high-quality health care; (ii) affordable, safe, and adequate housing; (iii) economic security; and (iv) access to clean water, clean air, healthy and affordable food, and nature.”

I’m in.

“Providing resources, training, and high-quality education, including higher education, to all people of the United States.”

Sure, Why only the US though?

“Meeting 100 percent of the power demand in the United States through clean, renewable, and zero-emission energy sources.”

Now, wait, there are no zero-emission sources. And none that are fully renewable.

“Repairing and upgrading the infrastructure in the United States, including by eliminating pollution and greenhouse gas emissions as much as technologically feasible.”

Okay, yeah. But what does “The Infrastructure” mean? Is that just power lines, or does it include all roads, highways etc.?

“Building or upgrading to energy-efficient, distributed, and smart power grids, and working to ensure affordable access to electricity.”

Right. Great. Sounds good. Where would the electricity come from, though? From so-called zero-emission sources., which don’t exist?

“Upgrading all existing buildings in the United States and building new buildings to achieve maximal energy efficiency, water efficiency, safety, affordability, comfort, and durability, including through electrification.”

Not sure I like the term “Electrification” in there, but yeah, bring it on. The term “Upgrading” is not what we use, however, we say “Retrofitting”.

“Overhauling transportation systems in the United States to eliminate pollution and greenhouse gas emissions from the transportation sector as much as is technologically feasible, including through investment in (i) zero-emission vehicle infrastructure and manufacturing; (ii) clean, affordable, and accessible public transportation; and (iii) high-speed rail.”

Now you’re getting serious. But what does this mean? We already covered the zero-emission thing, that’s obvious nonsense, but how about public transportation? Do you envision closing down cities to cars? Or do you actually think electric cars are zero emission? Alternatively, do you know they’re not but you use the word regardless?

“Spurring massive growth in clean manufacturing in the United States and removing pollution and greenhouse gas emissions from manufacturing and industry as much as is technologically feasible.”

Sure, if you want to clean up your environment, “Spurring Massive Growth” is just what you want to hear. Good lord.

“Working collaboratively with farmers and ranchers in the United States to eliminate pollution and greenhouse gas emissions from the agricultural sector as much as is technologically feasible.”

Call me nuts, and I have no reason to believe you haven’t already, but the no.1 thing that has to vanish from US Ag is not pollution or emissions but the chemicals used to kill all other life so that your lettuce can grow. And don’t get me started on antibiotics or the creatures they are used on.

 

That, Green New Deal, may be your biggest fault line. But you know, overall, you give me the idea that you don’t understand the territory you’re operating in. You’re just saying stuff that you think people will believe in and follow. Like Trump or Hillary or any politicians do.

 

Best rest assured, we haven’t even started yet. There’s still the trifle little matter of how all systems, all organisms, deal with energy (sources). Now, according to Alfred J. Lotka and Howard T. Odum, in what they and others have labeled the 4th law of Thermodynamics, all systems and organisms of necessity (DNA/RNA driven) seek to maximize their use of energy, for pure survival reasons: the one that’s most efficient in its ability to exploit and utilize -external- energy sources will survive. (another word for this is: Life)

And then you say you must use less energy? Or you want to shift from oil to energy sources with less density, like solar or wind? Be careful, because this says you’re putting your odds of survival at risk.

This is what my teacher Jay Hanson, who tragically died earlier this year before I ever had the chance to meet him, said about this in 2013:

Today, when one observes the many severe environmental and social problems, it appears that we are rushing towards extinction and are powerless to stop it. Why can’t we save ourselves? To answer that question we only need to integrate three of the key influences on our behavior: 1) biological evolution, 2) overshoot, and 3) a proposed fourth law of thermodynamics called the “Maximum Power Principle” (MPP). The MPP states that biological systems will organize to increase power generation, by degrading more energy, whenever systemic constraints allow it.

Biological evolution is a change in the properties of populations of organisms that transcend the lifetime of a single individual. Individual organisms do not evolve. The changes in populations that are considered evolutionary are those that are inheritable via the genetic (DNA/RNA, etc.) material from one generation to the next.

“Natural selection” is one of the basic mechanisms of evolution, along with mutation, migration, and drift. Natural selection explains the appearance of design in the living world, and “inclusive fitness theory” explains what this design is for. Specifically, natural selection leads organisms to become adapted as if to maximize their inclusive fitness. The “fittest” individuals are those who succeed in generating more power and reproducing more copies of their genes than their competitors.

You’re in tricky territory, guys. Reversing the history of (wo)mankind or the system that gave birth to her/him is not easy. Perhaps not impossible, but certainly very hard. You’d have to go against the DNA/RNA embedded in you, and then rephrase it at a molecular level. Like you all, I have certain -perhaps illogical- hopes that it can be done, but my hopes are not high. How do you beat nature? And would you really want to if you could?

There’s so much more to say on the topic of energy, but if you’ll excuse me, I’ll leave it at this for now. I’ll get back to it soon. Of course I understand that the jump from Greta and AOC to “Maximum Power Principle” is a big one, but for some people perhaps that’s just what they need. And for others it’s not, I get that. But it’s still what it is.

 

Note: nowhere in the Green New Deal et al do I see that we should do less, use less, move less, but shouldn’t that be the no.1 priority? Build gadgets, cars, homes, cities, that use much less energy? Retrofit everything to use 90% less energy?

The thing about that is, however, that it appears to violate the Maximum Power Principle. See what I’m getting at?

 

 

 

 

May 112019
 


Pierre-Auguste Renoir Riding in the Bois de Boulogne (Madame Henriette Darras or The Ride) 1873

 

Labour Without Energy Is A Corpse; Capital Without Energy Is A Sculpture (Keen)
Traditional Economics Has Absolutely Screwed Us (Tyee)
House Dems To Bundle Numerous Contempt Citations For Trump Advisers (R.)
House Democrat Subpoenas Six Years Of Trump Tax Returns (AP)
FISA Applications Were Illegally Obtained – DiGenova (PJ)
William Barr vs. Eric Holder: A Tale of Two Attorneys General (McConnell)
Fugees Founder, Banker Charged In 1MDB, Obama Campaign Scandal (RT)
Crisis? What Crisis? (Jim Kunstler)
Manning Could Delay US Superseding Indictment Against Assange (Sp.)
Dutch Court Blocks Extradition Of Man To ‘Inhumane’ UK Prisons (G.)
Varoufakis On Eurozone: ‘We Created A Monster’ (Exp.)
70 Migrants Dead After Boat Capsizes Trying To Reach Europe From Libya (G.)
Nearly All Countries Agree To Stem Flow Of Plastic Waste Into Poor Nations (G.)

 

 

First saw this a few days ago, and it slipped from my radar. Now, Steve Keen announced that he got a grant for his work with Tim Garrett and Matheus Grasselli on “developing models of production in which energy plays [a role] in production (and, necessarily, in climate degradation)”. Yes, you read that right: in 2019, economists need to begin the study the role of energy in an economic system, because it’s always been ignored. What a crazy field that is.

Labour Without Energy Is A Corpse; Capital Without Energy Is A Sculpture (Keen)

With the simple insight that “labour without energy is a corpse, and capital without energy is a sculpture”, I realised why economists have failed to properly incorporate the role of energy in production for so long. All previous attempts had treated energy as a third “factor of production”, on an equal footing with Labour and Capital. But that treatment is simply unrealistic. Adding energy on its own to a production process is like letting off a bomb in a factory: it will produce mayhem, not output. Equally, both Labour and Capital are “sterile”, to use the old Physiocratic term: without energy, they can’t produce anything.


Figure 1: The incorrect way to show energy as a factor of production

The correct way to incorporate energy into economic models of production, therefore, is to see energy as an input to both Labour and Capital (in vastly different forms, of course), which enable them to perform useful work. By the Second Law of Thermodynamics, this useful work necessarily results in disorder (waste energy, mainly in the form of waste matter, including CO2). Also by the Second Law, entropy increases globally, even though it can be reduced locally by the application of energy; so the increase in disorder in the waste from production necessarily exceeds the reduction in disorder manifest in output itself (raw materials turned into finished products).


Figure 2: The correct way: Energy as an input to labour and capital, output as necessarily generating waste

This useful work is what we call GDP, though we currently erroneously measure this as the inflation-adjusted sum of all monetary output—which means we add the cost of traffic accidents to GDP. Instead, the true measure of GDP is the sum of all the useful things we produce and consume: in transportation, that is moving a mass from one location to another in a given time, and traffic accidents (and congestion) subtract from it.

Read more …

Palm oil or orangutans? For economists, an easy choice.

Traditional Economics Has Absolutely Screwed Us (Tyee)

Capitalism is killing the planet. That is the gist of an exhaustive United Nations report on the bleak state of the world’s biodiversity. One million species face extinction in what has been aptly called a global murder-suicide, driven by a race to commodify ecosystems and externalize the costs of their destruction. If you were looking for a perky read to start your week, this report was not it. However, the collective efforts of 350 leading experts from 51 countries have resulted in the definitive wake-up call for those still doubting the dire consequences of business-as-usual on our one and only planet. A Noah’s ark of iconic species seems bound for oblivion due to our growing collective consumption and population.

Will your children be able to enjoy a world with wild elephants, orcas, or blue whales? Sixty per cent of primate species are threatened with extinction. The taste of a tuna sandwich may soon be consigned to lore. All of this has been happening in plain view but only recently has this become economically relevant by cutting into the bottom line. Up to $577 billion in global crop production is at risk due to collapsing populations of pollinating insects. One-third of commercial fish stocks are in steep decline with another 60 per cent being fully exploited, leaving only seven per cent of the world’s fisheries under safe management. This is exacerbated by regulatory failure where landings may be 50 per cent higher than reported, and illegal fishing accounts for up to one-third of the global catch.

Expanding agriculture is one of the main drivers of exploding extinction rates. Between 1980 and 2000, about 100 million hectares of tropical forests — roughly the area of France and Germany combined — were converted for grazing, monoculture plantations like palm oil, or short-term subsistence farming. Desperate humans and multinational companies both encroach on remaining rainforests, seeing only as far as the next growing season or financial quarter. Why does economics prioritize palm oil over orangutans? Because palm plantations are profitable, producing almost five times the oil yield per hectare of sunflowers, coconut or soybeans. Consumers too unintentionally contribute to this destruction, driving a market for a ubiquitous ingredient found in everything from lipstick to ice cream.

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McGahn, Barr, Mueller, Mnuchin, are these all the same?

House Dems To Bundle Numerous Contempt Citations For Trump Advisers (R.)

U.S. House Judiciary Committee Chairman Jerrold Nadler said lawmakers may bundle numerous contempt citations from different committees into a single resolution that the full House of Representatives could then vote on. “There obviously are going to have to be, perhaps from our committee and certainly from other committees, other contempt citations to enforce subpoenas,” Nadler told reporters. Asked about bundling citations together, the New York Democrat replied: “It’s a great idea. In fact, I suggested it … It just makes sense, to spend as little floor time as possible, to group them together.”


A consolidated contempt vote is among options Democrats are considering in response to Trump’s stonewalling of congressional investigations into his presidency and business investments. Another option is reviving Congress’s “inherent” contempt authority. Some Democrats say that would allow lawmakers to fine uncooperative officials up to $25,000 per day. Some Democrats are also calling for impeachment proceedings against recalcitrant Trump Cabinet members. Nadler said Congress faces “the unprecedented situation in which the administration is essentially stonewalling all subpoenas – we’ve never had this before in American history, so far as I know.”

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They lost two years on the Russia collusion story. Doesn’t look so smart now, does it?

House Democrat Subpoenas Six Years Of Trump Tax Returns (AP)

A top House Democrat on Friday issued subpoenas for six years of Donald Trump’s tax returns, giving the treasury secretary, Steven Mnuchin, and the IRS commissioner, Charles Rettig, a deadline of next Friday to deliver them. Richard Neal, the chairman of the House ways and means committee, issued the subpoenas days after Mnuchin refused to comply with demands to turn over Trump’s returns. Mnuchin told the panel he wouldn’t provide Trump’s tax records because the panel’s request “lacks a legitimate legislative purpose”, as supreme court precedent requires.

Neal reminded the two Trump appointees in a Friday letter that federal law states that the IRS “shall furnish” the tax returns of any individual upon the request of the chairmen of Congress’s tax-writing committees, and that ways and means “has never been denied” a request. The White House and the Democratic-controlled House are waging a multi-front battle over investigations into Trump, with the administration refusing to comply with subpoenas for the unredacted Mueller report and documents related to testimony by the former White House counsel Donald McGahn. If Mnuchin and Rettig refuse to comply with the subpoenas, Neal is likely to file a lawsuit in federal court.

He indicated earlier this week that he was leaning toward filing a court case immediately but changed course after meeting with lawyers for the House. Neal originally demanded access to Trump’s tax returns in early April. He maintains that the committee is looking into the effectiveness of mandatory IRS audits of tax returns of all sitting presidents, a way to justify his claim that the panel has a potential legislative purpose. Democrats are confident in their legal justification and say Trump is stalling in an attempt to punt the issue past the 2020 election. In rejecting Neal’s request earlier this week, Mnuchin said he relied on the advice of the justice department. He concluded that the treasury department was “not authorized to disclose the requested returns and return information”. Mnuchin has also said that Neal’s request would potentially weaponize private tax returns for political purposes.

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I don’t think John Solomon is done yet.

As for the Papadopoulos $10,000 story, how is that an “explosive revelation”? Have known that for a long time.

FISA Applications Were Illegally Obtained – DiGenova (PJ)

Washington attorney Joe diGenova claimed in an interview last night that the Department of Justice inspector general has determined that “the final three FISA extensions were illegally obtained,” and the first one is still being investigated. For the past year, DOJ IG Michael Horowitz has been investigating the FBI’s 2016 surveillance activities and his report is expected later this month or in early June. Washington power couple Joe diGenova and Victoria Toensing appeared on Lou Dobbs’ Fox Business Network show Thursday night to talk about the latest turns in the “SpyGate” saga. “The only question now is whether or not the first FISA was illegally obtained,” diGenova said.

He told Dobbs that the latest revelations in investigative reporter John Solomon’s piece at The Hill, have prompted further investigation from Horowitz’s team. On Thursday, Solomon reported that newly unearthed memos show that a high-ranking government official from the Obama State Department met with former British spy Christopher Steele in October of 2016, and figured out pretty quickly that his dossier was a political hit job intended to slime Donald Trump on behalf of Hillary Clinton’s campaign. [..] DiGenova said the inspector general was unaware of the memos, which were obtained last week through open-records litigation by the conservative group Citizens United. “The Bureau hid those memos from Horowitz. As a result of that, they are doing some additional work on the first FISA,” diGenova explained, adding: “It may be that all four FISAs will have been obtained illegally.”

[..] DiGenova and Toensing shared another explosive revelation on Sebastian Gorka’s Salem Radio talk show “America First” on Thursday. According to Toensing, the FBI tried to frame former Trump campaign adviser George Papadopoulos by having an informant give him $10,000 in cash during a trip to Israel in the summer of 2017. An individual allegedly talked the then-29-year-old into traveling to Israel to make a deal, and invited him to his hotel room. “And there on the bed is $10,000 in cash in a suitcase,” she continued. Papadopoulos took the money and gave it to his lawyer, who has it still. Toensing said when Papadopoulos returned to the United States, he was greeted by FBI agents at Dulles Airport and they started searching through everything that he had “the second he landed.”

She added, “in fact, they already had his baggage from the plane. He couldn’t believe they had his baggage.” “It was a set up!” exclaimed Gorka. “It was a complete set up,” agreed Toensing. DiGenova explained that the Feds already knew that he hadn’t declared that he had $10,000 and were expecting to find the undeclared cash so they could arrest him and “put the thumbscrews on and make him squeal,” as Gorka put it. Worst of all, according to Toensing, “one of the FBI agents said to him, ‘this is what happens when you work for Donald Trump.’”

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Good read. To a large extent, the Democrats made their own bed. Very far from a black and white story.

William Barr vs. Eric Holder: A Tale of Two Attorneys General (McConnell)

Speaker of the House Nancy Pelosi has declared it a “constitutional crisis” that Attorney General William Barr refuses to divulge the small parts of the Mueller report that contain grand-jury material. By a straight party-line vote, the House Judiciary Committee voted to hold Barr in contempt of Congress. What did Pelosi think when Barr’s predecessor, Eric Holder, refused to divulge documents to a congressional committee and was held in contempt? “Ridiculous!” she said. What did Holder and Obama say? That the House subpoena was a violation of “separation of powers.” To partisans, the difference between the cases is obvious. Barr is defending Trump; Holder was Obama’s self-proclaimed “wing man.”

That is enough for many journalists and most politicians. The rest of us might want to know: What is the legal or constitutional difference between Holder’s refusal to provide documents and Barr’s? Here is the background of the Holder contempt. The Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE), a unit of Holder’s Department of Justice (DOJ), conducted an operation called “Fast & Furious,” intended to track illegal gun sales. In fact it put hundreds of weapons in the hands of Mexican criminal gangs, leading to the death of an American officer. On February 2, 2011, after news of the operation emerged, Holder’s assistant attorney general sent a letter to Congress declaring that the Obama administration had no knowledge of the operation. This letter was false, as Holder later admitted.

A congressional committee wanted to know why it had been misled. BATFE employees leaked to Congress that the department was still suppressing the truth about the operation and retaliating against whistleblowers. The committee wanted to dig into that. It demanded DOJ documents “relating to actions the Department took to silence or retaliate against Fast and Furious whistleblowers,” so that it could determine “what the Department knew about Fast and Furious, including when and how it discovered its February 4 letter was false, and the Department’s efforts to conceal that information from Congress and the public.”

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“..funnelled [over $21 million] personally and through straw donors to President Obama’s 2012 re-election campaign, then lied about it to the Federal Elections Commission in 2015.”

Fugees Founder, Banker Charged In 1MDB, Obama Campaign Scandal (RT)

A founding member of the Fugees is accused of conspiracy to funnel illegal campaign contributions to Barack Obama’s 2012 presidential campaign and lying about it, in a spinoff of the 1MDB corruption scandal. The indictment against Prakazrel “Pras” Michel, 46, was unsealed on Friday, the government says he received over $21 million from Malaysian businessman Low Taek Jho (also known as “Jho Low”) and funnelled it personally and through straw donors to President Obama’s 2012 re-election campaign, then lied about it to the Federal Elections Commission in 2015. Michel was charged with conspiracy to defraud US government, falsifying records, and making a false statement. He appeared before a federal judge in Washington, DC on Friday and pleaded not guilty.


Mr. Michel is extremely disappointed that so many years after the fact the government would bring charges related to 2012 campaign contributions,” said his attorney Barry Pollack. “Mr. Michel is innocent of these charges and looks forward to having the case heard by a jury.” Michel is best known as one of the founding members of the Fugees, an award-winning group that set music charts on fire with ‘Killing me softly’ in 1996 and launched the solo careers of Wyclef Jean and Lauryn Hill. Low, 37, was also charged in the case, adding to the existing indictments against the Malaysian businessman already wanted for conspiring to launder billions of dollars and violating the Foreign Corrupt Practices Act.

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“..he rode on the back of that fraud for two years, as if touring a political landfill on a donkey, leaving the public to stew in anxious hallucinations.”

Crisis? What Crisis? (Jim Kunstler)

Information emerged over the weeks since the Mueller Report’s release that Mr. Mueller and his team knew unequivocally that the Special Counsel’s mission and the FBI operations that preceded it were based on concocted political bullshit supplied by Mrs. Clinton and her network of flunkies and fixers, ranging throughout the permanent DC bureacuracy (a.k.a. the Swamp), to outposts in foreign intel services and the political kitty-litter box known as Ukraine. Mr. Mueller must have suspected this from the outset, but knew for sure by the summer of 2017, and omitted to advise the American public that he had uncovered a fraud. Rather, he rode on the back of that fraud for two years, as if touring a political landfill on a donkey, leaving the public to stew in anxious hallucinations.


What else did Mr. Mueller do, or omit to do? He never engaged US government forensic computer analysts to examine the DNC servers at the heart of RussiaGate story. Rather, he allowed the conclusions to stand of a company called CrowdStrike, hired by the DNC itself to supposedly investigate the theft of emails, especially those of Clinton campaign chairman John Podesta. Mr. Mueller never bothered to interview the one person who might have known exactly who supplied the purloined emails to Wikileaks, namely Julian Assange. Mr. Mueller also did not bother to interview several dozen retired Intel Community computer experts, led by William Binney, former Technical Director of the NSA, who determined that the hack was accomplished by direct download by an insider onto a flash drive.

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This is about what the US wants to add to the Assange charge once he’s been extradited.

Manning Could Delay US Superseding Indictment Against Assange (Sp.)

According to Manning’s legal team, her release was triggered by the expiration of the term of the grand jury that had demanded her testimony. She will be back in court on May 16, trying to convince a new grand jury of what she failed to prove to the last one: that she cannot be forced to cooperate, as she fundamentally disagrees with the concept of a grand jury, which she says use activists’ testimonies against them. “This will go on until they get what they want or she continues to stay in jail,” Joe Lauria, editor-in-chief of Consortium News, told Radio Sputnik’s Loud and Clear Friday. “She’s in a position where she could delay or slow down what the Justice Department wants to do in terms of a superseding indictment against Assange.

Nobody believes that they are going to want to just put him in jail for five years… this initial indictment is a placeholder, and they have a deadline of June 12 to give to British court the charges; the decision has to be made in the UK,” Lauria said. However, there is a way around that, Lauria told hosts Brian Becker and John Kiriakou, called the Doctrine of Specialty, which, according to reference website USLegal.com, is “a principle of international law that is included in most extradition treaties, whereby a person who is extradited to a country to stand trial for certain criminal offenses may be tried only for those offenses and not for any other pre-extradition offenses.” “Once the asylum state extradites an individual to the requesting state under the terms of an extradition treaty, that person can be prosecuted only for crimes specified in the extradition request,” the website notes.

“This doctrine allows a nation to require the requesting nation to limit prosecution to declared offenses.” “In other words, Assange could come to the US based on this very silly charge that he tried to help Chelsea Manning hack into a computer — when she had top secret clearance and total access anyway — clearly he was trying to just help her hide her identity. But, he could come to the US and they could start adding charges there. I suspect that might happen if she doesn’t testify — which she will not do, obviously; she’s made that abundantly clear.” “They clearly need something from her, or they wouldn’t be throwing her back in jail, effectively, because she refuses to testify,” Lauria said. “But she’s not going to say a damn thing; she’s not going to cooperate, at incredible personal expense to herself, and that just goes to show what a person of principle she is.”

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Curious but still..

Dutch Court Blocks Extradition Of Man To ‘Inhumane’ UK Prisons (G.)

Judges in the Netherlands have refused to send a suspected drug smuggler back to the UK because of concerns that conditions in British jails are inhumane. An initial application to extradite the unnamed man, who had been on the run for two years, was refused this week due to the reported state of HMP Liverpool where he would probably be sent.The court of Amsterdam heard how inspectors had found “some of the most disturbing prison conditions we have ever seen” and “conditions which have no place in an advanced nation in the 21st century”, in reference to report on the state of prisons in the UK published last July.


A surprise inspection of HMP Liverpool in September 2017 found it was infested with rats and that inmates lived in squalid conditions, afraid of being attacked because of increasing violence. Similar conditions were found in HMP Birmingham and HMP Bedford. The Dutch judges said on Wednesday they were concerned the man, who was wanted in relation to cocaine and heroin smuggling on Merseyside, was at “real risk of inhuman or degrading treatment” if returned. The man had been made the subject of a European arrest warrant at Liverpool magistrates court in July 2017. His lawyer argued that the extradition should be refused based on the prison inspectors’ reports.

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“.. If you start with a monetary union, you make sure there will not be a democratic political union.”

Varoufakis On Eurozone: ‘We Created A Monster’ (Exp.)

Former Greek financial minister Yanis Varoufakis branded the eurozone “a monster” for allegedly taking away financial oversight from European Union member states. Mr Varoufakis, an outspoken opponent of the European monetary union, claimed the creation of the common currency led to an “undemocratic political union”. Recounting his first meeting with other eurozone Finance Ministers in 2015, Mr Varoufakis said: “When I was in the Eurogroup, Wolfgang Schauble was very clear. The first time he spoke, in my presence, he said –spectacularly and very honestly – ’democracy cannot be allowed to change economic policies.’


Mr Varoufakis continued: “We’ve created a monster. We’ve created a monetary union that has a central bank without a state behind it because the European Central Bank (ECB) doesn’t have a corresponding state. Before the euro, you had the Treasury, the ministry of finance and you had the central banks – correspondence. “The ECB is a gigantic central bank with no state behind it and you’ve got 19 states without a central bank. This is not the way to create a monetary union which is consistent with the political union.” He added: “The fallacy in 1992 with Helmut Kohl and Francois Mitterrand, is that they believed you start with a monetary union and then you move towards a democratic political union. “No. If you start with a monetary union, you make sure there will not be a democratic political union.”

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Not sure the biggest EU monster is a finance one.

70 Migrants Dead After Boat Capsizes Trying To Reach Europe From Libya (G.)

As many as 70 people trying to reach Europe from Libya have drowned after their vessel capsized in the deadliest such incident in the Mediterranean since January. According to survivors, at least 16 of whom were rescued, the boat left Zuwara in Libya, where renewed warfare between rival factions has gripped the capital, Tripoli, in the past five weeks. The vessel capsized 40 miles off the coast of Sfax, south of Tunis, as it headed towards Italy. The survivors reported that a Tunisian fishing boat came to their rescue and transferred them to a Tunisian coastguard vessel.


The incident came as overall number of people reaching Europe has decreased, whilethe journey has become increasingly dangerous. So far this year, 17,000 migrants and refugees have entered Europe via the sea, about 30% fewer than in the same period last year, according to the International Organization for Migration. The IOM said 443 people have reportedly died on Mediterranean crossings since 1 January, compared with 620 in the same period in 2018. The Institute for International Political Studies (ISPI) thinktank said that one person died for every eight people who left Libya from January to April, based on analysis of figures from the Italian interior ministry.

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There’ll always be a dictator somewhere who invites a few million dollars. There’s only one solution: stop producing the stuff. 2 trillion drinks containers were sold in 2018. Cut it out.

Nearly All Countries Agree To Stem Flow Of Plastic Waste Into Poor Nations (G.)

Almost all the world’s countries have agreed on a deal aimed at restricting shipments of hard-to-recycle plastic waste to poorer countries, the United Nations announced on Friday. Exporting countries – including the US – now will have to obtain consent from countries receiving contaminated, mixed or unrecyclable plastic waste. Currently, the US and other countries can send lower-quality plastic waste to private entities in developing countries without getting approval from their governments. Since China stopped accepting recycling from the US, activists say they have observed plastic waste piling up in developing countries. The Global Alliance for Incinerator Alternatives (Gaia), a backer of the deal, says it found villages in Indonesia, Thailand and Malaysia that had “turned into dumpsites over the course of a year”.


“We were finding that there was waste from the US that was just piled up in villages throughout these countries that had once been primarily agricultural communities,” said Claire Arkin, a spokeswoman for Gaia. The legally binding framework emerged at the end of a two-week meeting of UN-backed conventions on plastic waste and toxic, hazardous chemicals that threaten the planet’s seas and creatures. The pact comes in an amendment to the Basel convention. The US is not a party to that convention so it did not have a vote, but attendees at the meeting said the country argued against the change, saying officials didn’t understand the repercussions it would have on the plastic waste trade.

Read more …

 

 

 

 

May 062019
 


Gustave Courbet The man made mad by fear 1844

 

If I’ve said once that those among us who tout renewable energy should pay more attention to the 2nd law of Thermodynamics, I must have said it a hundred times. But I hardly ever get the impression that people understand why. And it seems so obvious. A quote I often use from Herman Daly and Ken Townsend, when I talk about energy, really says it all:

“Erwin Schrodinger (1945) has described life as a system in steady-state thermodynamic disequilibrium that maintains its constant distance from equilibrium (death) by feeding on low entropy from its environment – that is, by exchanging high-entropy outputs for low-entropy inputs. The same statement would hold verbatium as a physical description of our economic process. A corollary of this statement is that an organism cannot live in a medium of its own waste products.”

Using energy produces waste. Using more energy produces more waste. It doesn’t matter -much- what kind of energy is used, or what kind of waste is produced. The energy WE use produces waste, in a medium of which WE cannot survive. The only way to escape this is to use less energy. And because we have used such an enormous amount of energy the past 100 years, we must use a whole lot less in the next 100.

We use about 100 times more energy per person, and a whole lot more in the west, than our own labor can produce. We use the equivalent of what 500 billion people can produce without the aid of fossil fuel-powered machines. We won’t solve this problem with wind turbines or solar panels. There really is one way only: cut down on energy use.

Because it’s exceedingly rare to see this discussed, even among physicists, who should know better since they know thermodynamics, it’s good to hear it from someone else. An article in Forbes today discusses a May 3 article in German magazine Der Spiegel on the problems with the Energiewende, the country’s drastic turn towards renewables.

The Forbes article is written by Michael Shellenberger, President of Environmental Progress and Time Magazine “Hero of the Environment.” (sigh..) Let’s take a walk through it:

The Reason Renewables Can’t Power Modern Civilization Is Because They Were Never Meant To

Over the last decade, journalists have held up Germany’s renewables energy transition, the Energiewende, as an environmental model for the world. “Many poor countries, once intent on building coal-fired power plants to bring electricity to their people, are discussing whether they might leapfrog the fossil age and build clean grids from the outset,” thanks to the Energiewende, wrote a New York Times reporter in 2014. With Germany as inspiration, the United Nations and World Bank poured billions into renewables like wind, solar, and hydro in developing nations like Kenya.

Oh well, perhaps we shouldn’t expect journalists and politicians to understand the world they live in. They’re mostly into feel-good items, that’s a job requirement.

But then, last year, Germany was forced to acknowledge that it had to delay its phase-out of coal, and would not meet its 2020 greenhouse gas reduction commitments. It announced plans to bulldoze an ancient church and forest in order to get at the coal underneath it. After renewables investors and advocates, including Al Gore and Greenpeace, criticized Germany, journalists came to the country’s defense.


“Germany has fallen short of its emission targets in part because its targets were so ambitious,” one of them argued last summer. “If the rest of the world made just half Germany’s effort, the future for our planet would look less bleak,” she wrote. “So Germany, don’t give up. And also: Thank you.” But Germany didn’t just fall short of its climate targets. Its emissions have flat-lined since 2009.

The stage is set: everybody’s favorite renewables producer has fallen flat on its face. And don’t forget, Angela Merkel, the Mutti behind the Energiewende, is a physicist by training. Thermodynamics must have been a class she missed.

Now comes a major article in the country’s largest newsweekly magazine, Der Spiegel, titled, “A Botched Job in Germany” (“Murks in Germany”). The magazine’s cover shows broken wind turbines and incomplete electrical transmission towers against a dark silhouette of Berlin. “The Energiewende — the biggest political project since reunification — threatens to fail,” write Der Spiegel’s Frank Dohmen, Alexander Jung, Stefan Schultz, Gerald Traufetter in their a 5,700-word investigative story (the article can be read in English here).

Germany has already spent $180 billion on its switch to renewables, only to find it doesn’t work. And much much more will be needed. But for what exactly?

Over the past five years alone, the Energiewende has cost Germany €32 billion ($36 billion) annually, and opposition to renewables is growing in the German countryside. “The politicians fear citizen resistance” Der Spiegel reports. “There is hardly a wind energy project that is not fought.” In response, politicians sometimes order “electrical lines be buried underground but that is many times more expensive and takes years longer.”

 

 

As a result, the deployment of renewables and related transmission lines is slowing rapidly. Less than half as many wind turbines (743) were installed in 2018 as were installed in 2017, and just 30 kilometers of new transmission were added in 2017. Solar and wind advocates say cheaper solar panels and wind turbines will make the future growth in renewables cheaper than past growth but there are reasons to believe the opposite will be the case. Der Spiegel cites a recent estimate that it would cost Germany “€3.4 trillion ($3.8 trillion),” or seven times more than it spent from 2000 to 2025, to increase solar and wind three to five-hold by 2050.

A total expenditure of some $150 billion per year, every year from 2025 to 2050. On a rapidly failing project. Note: the numbers are “flexible”: just above, it says “Over the past five years alone, the Energiewende has cost Germany €32 billion ($36 billion)” , and seven times that is much more than $150 billion annually. Later in the article, the author says “Germans, who will have spent $580 billion on renewables by 2025 ..” General rule of thumb: it will cost much more than any estimate will tell you.

Between 2000 and 2018, Germany grew renewables from 7% to 39% of its electricity. And as much of Germany’s renewable electricity comes from biomass, which scientists view as polluting and environmentally degrading, as from solar.

Of the 7,700 new kilometers of transmission lines needed, only 8% has been built, while large-scale electricity storage remains inefficient and expensive. “A large part of the energy used is lost,” the reporters note of a much-hyped hydrogen gas project, “and the efficiency is below 40%… No viable business model can be developed from this.”

Meanwhile, the 20-year subsidies granted to wind, solar, and biogas since 2000 will start coming to an end next year. “The wind power boom is over,” Der Spiegel concludes.

Think Mutti Merkel has read this?

.The earliest and most sophisticated 20th Century case for renewables came from a German who is widely considered the most influential philosopher of the 20th Century, Martin Heidegger. In his 1954 essay, “The Question Concerning Technology,” Heidegger condemned the view of nature as a mere resource for human consumption. The use of “modern technology,” he wrote, “puts to nature the unreasonable demand that it supply energy which can be extracted and stored as such..

But then starting around the year 2000, renewables started to gain a high-tech luster. Governments and private investors poured $2 trillion into solar and wind and related infrastructure, creating the impression that renewables were profitable aside from subsidies. Entrepreneurs like Elon Musk proclaimed that a rich, high-energy civilization could be powered by cheap solar panels and electric cars.

Journalists reported breathlessly on the cost declines in batteries, imagining a tipping point at which conventional electricity utilities would be “disrupted.” But no amount of marketing could change the poor physics of resource-intensive and land-intensive renewables. Solar farms take 450 times more land than nuclear plants, and wind farms take 700 times more land than natural gas wells, to produce the same amount of energy.

Note: these issues only arise when you talk about large-scale projects, but then those are the only ones even considered.

Efforts to export the Energiewende to developing nations may prove even more devastating. The new wind farm in Kenya, inspired and financed by Germany and other well-meaning Western nations, is located on a major flight path of migratory birds. Scientists say it will kill hundreds of endangered eagles. “It’s one of the three worst sites for a wind farm that I’ve seen in Africa in terms of its potential to kill threatened birds,” a biologist explained.

We are incapable of seeing an ecosystem as a whole and functioning entity, because we have never learned to look at things that way. So we see a landscape as containing an X-amount of animals and plant life, and can’t figure out why we must be careful with its balance. Landscapes to us look, first, empty, unless there’s -lots of- human activity.

Heidegger, like much of the conservation movement, would have hated what the Energiewende has become: an excuse for the destruction of natural landscapes and local communities. Opposition to renewables comes from the country peoples that Heidegger idolized as more authentic and “grounded” than urbane cosmopolitan elites who fetishize their solar roofs and Teslas as signs of virtue.


Germans, who will have spent $580 billion on renewables by 2025, express great pride in the Energiewende. “It’s our gift to the world,” a renewables advocate told The Times. Tragically, many Germans appear to have believed that the billions they spent on renewables would redeem them. “Germans would then at last feel that they have gone from being world-destroyers in the 20th century to world-saviors in the 21st,” noted a reporter.

Germany to save the world. Yeah, they would love that. Better find another project for that, though. Germany has an enormous car industry, and electric cars, as this article should by now have shown, won’t save the environment. They can’t. Only not driving a car can.

Shellenberger then finishes with a nice, almost philosophical conclusion, which is also his headline:

Many Germans will, like Der Spiegel, claim the renewables transition was merely “botched,” but it wasn’t. The transition to renewables was doomed because modern industrial people, no matter how Romantic they are, do not want to return to pre-modern life. The reason renewables can’t power modern civilization is because they were never meant to. One interesting question is why anybody ever thought they could.

The reason why anyone ever thought renewables could power modern civilization is the same that Angela Merkel thought that: we all learn from failing education systems and have a very poor understanding of even the most basic principles of physics, including by physicists. We want to feel good more than we want reality.

Schools, universities, media and politics are all geared towards believing in growth and progress, in unlimited quantities. Because we all want to believe that there will be energy in unlimited quantities, it’s in our genes.

But look at it this way: in Nate Hagens’ presentation Earth vs. The Amoeba, which I posted a few days ago, there’s a slide that says fossil fuels provide us with a labor subsidy of the equivalent of some 500 billion people, 100 people (energy slaves) for each of us in the global workforce, and many more in the west. Is there anyone amongst you who thinks wind and solar could ever do the same, even in the most ideal conditions imaginable?

If not, it would seem to be time to reconsider a few things. First of all: stop advocating renewables, start advocating the use of less energy. I’m not saying it will be much use, I have this deep-seated fear that we, as a species, won’t be able to stop until nature itself stops us. What you don’t use, someone else can and will. But renewables are now dead. So there. Thanks for making that clear, Mutti, even if you didn’t mean to.

 

 

 

 

May 042019
 


Raphael The transfiguration 1520

 

 

A few days ago, I received a video of an April 22 (Earth Day) lecture by my longtime friend Nate Hagens. Nate and I both owe a lot concerning our view and understanding of the world to Jay Hanson, who tragically died about a month ago on a diving trip in Indonesia. Many people have written and thought about issues of energy, or economics, or ecology; Jay brought it all together and, crucially, added the human brain and genetic properties to the mix.

Teaching at the University of Minnesota, Nate has greatly expanded on this big picture, and produces -among other things- a lot of video material for his students. Lucky them: a view with so much breadth and depth at the same time is exceedingly rare. What most people don’t get is that you can say: we can do so-and-so, but it’s mostly just in theory. In practice, our brains make us react much different from the theory. Because it’s not our “rational brain” that drives us, it’s our amoeba brain.

We have to work very hard, and be very self-critical, to escape the ‘trap’, that, as Nate formulates it, dictates that:

Thermodynamics, expressed through genetics, creates beings incapable of not maximizing energy consumption.

We can even wonder if we can escape it at all. Nate’s position on this is more positive than mine. So I guess if you follow the theoreticals, you’ll be more inclined to listen to him than to me. Because there’s more dopamine to be gotten there. And denial is our main engine.

Two pics from the video of Nate’s lecture which you can find below give an idea of what is our problem, at least the energy part of it:

One man with a chainsaw (powered by fossil fuels) can do the work of 100 men.

 

 

Which means that with about 5 billion of us in the global work force, our present day consumption of fossil fuels provides us with the labor subsidy of the equivalent of some 500 billion people.

 

 

A lot more of Nate’s video material can be found here and here (5 hours).

You can also visit Nate’s new site, Institute for the Study of Energy and Our Future.

 

And here are a few of his quotes:

• Things that can’t continue usually stop too late.

• Each time history repeats itself, the price goes up.

• While it digs its own grave, all the mind can do is entertain fantasies and create excuses.

• Meaning comes from understanding why we can understand there is no meaning.

• Thermodynamics, expressed through genetics, creates beings incapable of not maximizing energy consumption.

• All 8 billion of us owe our existence to a six-inch layer of topsoil and the fact it rains;
6 billion of us also owe our existence to nitrogen fertilizer created from natural gas by Haber-Bosch factories.

 

 

Dr. Nathan John Hagens worked on Wall Street at Lehman Brothers and Salomon Brothers and closed his own hedge fund in 2003 to pursue interdisciplinary knowledge about the bigger picture of modern society. Nate was the lead editor of the online web portal theoildrum.com, and is currently President of the Bottleneck Foundation and on the Boards of the Post Carbon Institute, Institute for Energy and Our Future, and IIER. Nate teaches at the University of Minnesota.

 

 

Nate Hagens:

Earth Day Talk, Stockholm Wisconsin, April 22, 2019

This is a story about our culture, arriving at a period I refer to as ‘The Great Simplification’. This story explains why things in the environment and social sphere are getting worse not better, and why we won’t en masse do anything meaningful until we get emotional cues to do so. Obviously this is a bit of a buzzkill to hear about – especially on a nice spring day – but imo we have to understand the current game board and rules if we’re to make good ‘game moves’ as future events arrive. The more people who are aware of – and start to engage on – the choreography of these issues in their communities and in their own lives, the higher the chances of a networked, creative response will be. My hope with these and other videos is to change the initial conditions of these future events in a positive way. Because we have a lot to lose -and also gain.

 

 

If the video doesn’t show in your mail, please go to the article on the Automatic Earth site.

 

 

 

 

Mar 152019
 


Raphael The miraculous draught of fishes 1515

 

 

There are days, though all too scarce, when very nice surprises come my way. Case in point: yesterday I received a mail from David Holmgren after a long period of radio silence. Australia’s David is one of the fathers of permaculture, along with Bill Mollison, for those few who don’t know him. They first started writing about the concept in the 1970s and never stopped.

Dave calls himself “permaculture co-originator” these days. Hmm. Someone says: “one of the pioneers of modern ecological thinking”. That’s better. No doubt there. These guys taught many many thousands of people how to be self-sufficient. Permaculture is a simple but intricate approach to making sure that the life in your garden or backyard, and thereby your own life, moves towards balance.

My face to face history with David is limited, we spent some time together on two occasions only, I think, in 2012 a day at his home (farm) in Australia and in 2015 -a week- in Penguin, Tasmania at a permaculture conference where the Automatic Earth’s Nicole Foss was one of the key speakers along with Dave. Still, despite the limited time together I see him as a good and dear friend, simply because he’s such a kind and gracious and wise man.

In his mail, David asked if I would publish this article, which he originally posted on his own site just yesterday under the name “The Apology: From Baby Boomers To The Handicapped Generations”. I went for a shorter title (it’s just our format), but of course I will.

Dave has been an avid reader of the Automatic Earth for the past 11 years, we sort of keep his feet on the ground when they’re not planted and soaking in that same ground: “Reading TAE has helped me keep up to date..”

In light of the children’s climate protests today, which I have yet to voice my qualms about (and I have a few), it only makes sense to put into words a baby boomer’s apology. To have that phrased by someone with the intellect and integrity of David should have everyone sit up and pay attention, if you ask me. And perhaps it would be good if more people would try and do the same: apologize to those kids.

Here’s my formidable friend David Holmgren:

 

 

David Holmgren: It is time for us baby boomers to honestly acknowledge what we did and didn’t do with the gifts given to us by our forebears and be clear about our legacy with which we have saddled the next and succeeding generations.

By ‘baby boomers’ I mean those of us born in the affluent nations of the western world between 1945 and 1965. In these countries, the majority of the population became middle class beneficiaries of mass affluence. I think of the high birth rate of those times as a product of collective optimism about the future, and the abundant and cheap resources to support growing families.

By many measures, the benefits of global industrial civilisation peaked in our youth, but for most middle class baby boomers of the affluent countries, the continuing experience of those benefits has tended to blind us to the constriction of opportunities faced by the next generations: unaffordable housing and land access, ecological overshoot and climate chaos amongst a host of other challenges.

I am a white middle class man born in 1955 in Australia, one of the richest nations of the ‘western world’ in the middle of the baby boom, so I consider myself well placed to articulate an apology on behalf of my generation.

In the life of a baby boomer born in 1950 and dying in 2025 (a premature death according to the expectations of our generation), the best half the world’s endowment of oil – the potent resource that made industrial civilisation possible – will have been burnt. This is tens of millions of years of stored sunlight from a special geological epoch of extraordinary biological productivity. Beyond our basic needs, we have been the recipients of manufactured wants and desires. To varying degrees, we have also suffered the innumerable downsides, addictions and alienations that have come with fossil-fuelled consumer capitalism.

It is also true that our generation has used the genie of fossil fuels to create wonders of technology, organisation and art, and a diversity of lifestyles and ideas. Some of the unintended consequences of our way of life, ranging from antibiotic resistance to bubble economics, should have been obvious, while others, such as the depression epidemic in rich countries, were harder to foresee. Our travel around the world has broadened our minds, but global tourism has contaminated the amazing diversity of nature and traditional cultures at an accelerating pace. We have the excuse that innovations always have pluses and minuses, but it seems we have got a larger share of the pluses and handballed more of the minuses to the world’s poorest countries and to our children and grandchildren.

We were the first generation to have the clear scientific evidence that emergent global civilisation was on an unsustainable path that would precipitate an unravelling of both nature and society through the 21st century. Although climate chaos was a less obvious outcome than the no-brainer of resource depletion, international recognition of the reality of climate change came way back in 1988, just as we were beginning to get our hands on the levers of power, and we have presided over decades of policies that have accelerated the problem.

Over the years since, the adverse outcomes have shifted from distant risks to lived realities. These impact hardest on the most vulnerable peoples of the world who have yet to taste the benefits of the carbon bonanza that has driven the accelerating climate catastrophe. For the failure to share those benefits globally and curb our own consumption we must be truly sorry.

 


David Holmgren

 

In the 1960s and 70s, during our coming of age, a significant proportion of us were critical of what was being passed down to us by our parent’s generation who were also the beneficiaries of the western world system, which some of us baby boomers recognised as a global empire. But our grandparents and parents had been shaped by the rigours and grief of the first global depression of the 1890s, the First World War, The Great Depression of the 1930s and, of course, the Second World War. Aside from those who served in Vietnam, we have cruised through life avoiding the worst threats of nuclear annihilation and economic depression, even as people in other countries suffered the consequences of superpower proxy wars, coups, and economic and environmental catastrophes.

While some of us were burnt by personal and global events, we have mostly led a charmed existence and had the privilege to question our upbringing and culture. We were the first generation in history to experience an extended adolescence of experimentation and privilege with little concern or responsibility for our future, our kin or our country.

Most baby boomers were raised in families where commuting was the norm for our fathers but a home-based lifestyle was still a role model we got from our mothers. In our enthusiasm for women to have equal access to productive work in the monetary economy, few of us noticed that without work to keep the household economy humming we lost much of our household autonomy to market forces. By our daily commutes, mostly alone in our cars, we entrenched this massively wasteful and destructive action as normal and inevitable.

As we came into our power in middle age, the new technology of the internet, workshop tool miniaturisation and other innovations provided more options to participate in the monetary economy without the need to commute, but our generation continued with this insane collective addiction. In Australia, we faithfully followed the American model of not investing in public transport, which moderated the adverse impacts of commuting in European and other countries not so structurally addicted to road transport. By failing to build decent public transport and the opportunities for home-based work, and wasting wealth in a frenzy of freeway building that has choked our cities, our generation has consumed our grandchildren’s inheritance of high quality transport fuels and accelerated the onset of climate chaos. For this we are truly sorry.

In pioneering the double income family, some of us set the pattern for the next generation’s habit of outsourcing the care of children at a young age, making commuting five days a week an early childhood experience. This has left the next generation unable to imagine a life that doesn’t involve leaving home each day.

These patterns are part of a larger crisis created by the double income, debt-laden households with close to 100% dependence on the monetary economy. Without robust and productive household economies, our children and grandchildren’s generations will become the victims of savage disruptions and downturns in the monetary economy. For failing to maintain and strengthen the threads of self-provision, frugality and self-reliance most of us inherited from our parents, we should be truly sorry.

 

Some of us felt in our hearts that we needed to create a different and better world. Some of us saw the writing on the walls of the world calling for global justice. Some of us read the evidence (mostly clearly in the 1972 Limits To Growth) that attempting to run continuous material growth on finite planet would end in more than tears.

Some of us even rejected the legacy of previous generations of radicals’ direct action against the problems of the world, and instead decided we would boldly create the world we wanted by living it each day. In doing so, we experienced hard-won lessons and even created some hopeful models for succeeding generations to improve on in more difficult conditions. That our efforts at novel solutions often created more sound than substance, or that we flitted from one issue to another rather than doing the hard yards necessary to pass on truly robust design solutions for a world of less, leaves some of us with regrets for which we might also feel the need to apologise.

These experiences are shared to some degree by a minority in all generations but there is significant evidence that the 1960s and 70s was a time when awareness of the need for change was stronger. Unfortunately, a sequence of titanic geopolitical struggles that few of us understand even today, a debt-fuelled version of consumer capitalism, and propaganda against both the Limits to Growth and the values of the counterculture, saw most of us following the neoliberal agenda like sheep into the 1980s and beyond.

 

 

After having played with the privilege of free tertiary education, most of us fell for the propaganda and sent our children off to accumulate debts and doubtful benefits in the corporatised businesses that universities became. We convinced our children they needed more specialised knowledge poured down their throats rather than using their best years to build the skills and resilience for the challenges our generation was bequeathing to them. For this we must be truly sorry.

Many of us have been the beneficiaries of buying real estate before the credit-fuelled final stages of casino capitalism made that option a recipe for debt slavery for our children. Without understanding its mechanics we have contributed to – and fuelled with our faith – a bubble economy on a vast scale that can only end in pain and suffering for the majority. While some of us are members of the bank of Mum and Dad, when the property bubble bursts we could find ourselves following the bank chiefs apologising for the debt burden we encouraged our children to take on. Some of us will also have to apologise for losing the family home when we went guarantor on their mortgages. For not heeding the warnings we got with the GFC, we will be truly sorry.

Some of us have used our windfall wealth from real estate and the stock market to do good works, including creating small models of more creative and lower footprint futures that have inspired the minority of the next generations who can also see the writing on the wall. But most of us used our houses as ATMs for new forms of consumption that were unimaginable to our parents, from holidays around the world to endless renovations and a constant flow of updated digital gadgets and virtual diversions. For this frivolous squandering of our windfall wealth we must be truly sorry.

 

While our parents’ generation experienced the risks of youth through adversity and war we used our privilege to tackle challenges of our own choosing. Although some of us had to struggle to free ourselves from the cloying cocoon of middle class upbringing, we were the generation that flew like the birds and hitchhiked around the country and the world. How strange that on becoming parents (many of us in middle age) we believed the propaganda that the world was too dangerous for our children to do the same around the local neighbourhood. Instead we coddled them, got into the chauffeuring business, and in doing so encouraged their disconnection from both nature and community. As we see our grandchildren’s generation raised in a way that makes them an even more handicapped generation, we must be truly sorry for the path we took and the dis-ease we created.

After so many of us experimented with mind-expanding plants and chemicals, some of us were taken down in chemical addictions, but it was dysfunctional and corrupt legal prohibitions more than the substances themselves that were to blame for the worst of the damage. So how strange that when in middle age we got our hands on the levers of power, most of our generation decided to continue to support the madness of prohibition. For this we must be truly sorry: to have seen the light but then continued to inflict this burden on our children and grandchildren. For having acquiesced in the global ‘war on drugs’ that spread pain and suffering to some of the poorest peoples of the world we should be ashamed.

When the ‘war on drugs’ (a war against substances!) became the model for the ‘war on terror’ (war against a concept!) some of us reawakened the anti-war activism of the Vietnam years but in the end we mostly acquiesced to an agenda of trashing international law, regime change, shock and awe, chaos, and the death of millions; all justified by the 9/11 demolition fireworks that killed a small fraction of the number of citizens that die each year as a result of our ongoing addiction to personal motorised mobility.

While the shadow cast by climate change darkens our grandchilden’s future, the shadow of potential nuclear winter that hung over our childhood as not gone away. Many of us were at the forefront of the international movement to rid the world of nuclear weapons and thought the collapse of the Soviet Union had saved us from that threat. Coming into our power after the end of the cold war, our greatest crime on this geopolitical front has perhaps been the tacit support of our generation for first, the economic rape of Russia in the 1990s, and then its progressive encirclement by the relentless expansion of NATO. In Australia we have meekly added our resources and youth to more or less endless wars in the Middle East and central Asia justified by the fake ‘war on terror’. For this weakness as accessories to global crimes wasting wealth and lives to consolidate the western powers’ control of the first truly global empire, we should hang our collective heads in shame.

While some of our generation’s intellectuals continued to critique the ‘war on terror’ as fake, the vast majority of the public intellectuals of our generation, including those on the left, have supported the rapid rise of Cold War 2.0 to contain Russia, China and any other country that doesn’t accept what we now call ‘the rules based international order’ (code for ‘our empire’). This is truly astonishing when looked at in the context of our lived history. Let us hope that sanity can prevail as our empire fades and future generations don’t brand us as the most insane, war-mongering generation of all time. For our complicity in this grand failure of resistance we should be truly sorry.

 


click to order David’s latest

 

On another equally titanic front, the mistake of giving legal personhood to corporations was not one that our generation made. However most of us have contributed our work, consumption and capital to assist these self-organising, profit-maximising, cost-minimising machines of capitalism morphing into emergent new life forms that threaten to consume both nature and humanity in an algorithmic drive for growth. At a time of our seniority and numbers, we failed to use the Global Financial Crisis as an opportunity to bring these emergent monsters to heel. Do our children have the capacity to tame the monsters that we nurtured from fragile infants to commanding masters?

And if they do find the will to withdraw their work, consumption and capital enough to contain the corporations, will the economy that currently provides for both needs and wants unravel completely? This is a burden so great most of us continue to believe we have no responsibility or agency in such a dark reality. We trust that history will not place the burden of responsibility on our generation alone. But for our part in this failure of agency over human affairs we apologise. Further, we should accept with grace the consequences for our own wellbeing.

Most of us feel impotent when thinking of these failures to control the excesses of our era, but on a more modest scale we have mindlessly participated in taking the goods and passing on the debt to future generations. No more so than in our habitual acceptance of antibiotics from doctors to fix the most mundane of illnesses. For our parents’ generation, antibiotics represented the peak of medical science’s ability to control what killed so many of their parents and earlier generations.

For us, they became routine tools to keep us on the job and our children not missing precious days at school. Through this banal practice we have unwittingly conspired with our doctors to rapidly breed resistance to the most effective and low-cost antibiotics. We took for granted that future generations would always be able to work out ways to keep ahead of diseases with an endless string of new antibiotics. For having squandered this gift we are truly sorry.

 

Further, despite the fact that some of us have became vegetarian or even vegan, our generation’s demand for cheap chicken and bacon has driven the industrial dosing of animals with antibiotics on a scale that has accelerated the development of antibiotic resistance far faster than would have been the case from us dosing ourselves and our children. For supporting this and other such obscene systems of animal husbandry we apologise to our grandchildren and succeeding generations and hope that somehow an accommodation between humanity, animals and microbes is still possible.

We experienced and benefited from the emergent culture of rights and recognition for women, minorities and the people of varied abilities, and many of us who fought to extend and deepen those rights have pride in what we did. However some of us are beginning to fear that in doing so we contributed to creating new demands, disabilities, and fractious subcultures of fear and angst unimagined in previous generations. While we might not be in the driving seat of identity politics and culture wars, we raised our children to demand their rights in a world that is unravelling due to its multiple contradictions.

In this emerging context, strident demands for rights are likely to be a waste of valuable energy that younger people might better focus on becoming useful to themselves and others. For overemphasising the demand for rights and underplaying the need for responsible self- and collective-reliance, perhaps we should also be sorry.

And is this escalating demand for rights by younger people itself connected, even peripherally, to the increasing callous disregard for the rights of others? Especially in the case of refugees, this careless disregard has allowed political elites to use tough treatment of the less fortunate to distract from the gradual loss of shared privilege that once characterised the ‘lucky country’. To the shame of those in power over the last two decades (mostly baby boomers) those policies are now being adopted on a larger scale in Europe and the US.

 

 

In our lifetimes religious faith has declined. For many of our generation, this change represents a measure of humanity’s progress from a benighted past to a promising future. But the collective belief in science and evidence-based decision making has now become a new faith, “Scientism”, which seeks to drive out all other ways of thinking and being from the public space. At the same time, religious fundamentalism is now resurgent. Is this too something that our generation unleashed by preaching tolerance while enforcing an ideology we didn’t even recognise as such?

A significant sign of the good intentions of our generation has been our recognition that the ancient war against nature, which has plagued human life since the beginnings of agriculture, and indeed civilisation, must end. One powerful expression of our efforts has been the valuing of the biodiversity of life, especially local indigenous biodiversity. In the ‘New Europes’ of North America and the Antipodes, seeking to save indigenous biodiversity has grown into an institutionalised form of atonement for the sins of the forefathers.

While this seems like one of our achievements, even this we have bastardised with a new war against naturalised biodiversity. Perhaps the worst aspect of this renewed war against novel ecologies is that we have accepted the helping hand of Monsanto in using Roundup as the main weapon in our urban and rural habitats. The mounting evidence that Roundup may be worse than DDT will be part of our legacy. While history may excuse our parent’s generation for naïve optimism in relation to DDT, our generation’s version of the war on nature will not save us from harsh judgement. For this we should be truly sorry.

Of course any public apology in this country invites comparisons to the apology by governments to the stolen generation of Australian indigenous peoples for the wrongs of the past. This unfinished sorry business is beyond the scope of this apology, but it is an opportunity to reflect critically on our common self-perception of supporting indigenous peoples’ rights in contrast to the normalised racism of previous generations.

 

Our generation’s invitation to, and enabling of, Australians of indigenous descent to more fully participate in mainstream Australian society may have been a necessary step towards reconciliation; or could it have been a poison chalice drawing them even deeper into the dysfunctions of industrial modernity that I have already outlined. We can only hope that people with such a history of resilience and understanding in the face dispossession will take these additional burdens in their stride.

In any case, this apology is not one that comes from a position of invulnerable privilege, giving succour to those who are no threat to that privilege. For many baby boomers, now caring for parents and dealing with their deaths, we are more inwardly focused. For some of us, especially those estranged from parents, through this both painful and tender processes we are finally growing up. But a comic tragedy could play out in our declining years if a combination of novel disabilities, the culture of rights and amplified fears lead to our children and grandchildren’s generations mostly experiencing harder times as far worse than they might really be, and deciding we are the cause of their troubles.

We baby boomers will increasingly find that in our growing dependence on young people we will be subject to their perspectives, whims and prejudices. Hopefully we can take what we are given on the chin and along with our children and our grandchildren’s generations we can all grow up and work together to face the future with whatever capacities we have.

We might hope this apology is itself a wake-up call to the younger generations that are still mostly sleepwalking into the oncoming maelstroms. In raising the alarm we might hope our humble apology will galvanise the potential in young people who are grasping the nettle of opportunities to turn problems into solutions.

We hope that this apology might lead to understanding rather than resentment of our frailty in the face of the self-organising forces of powerful change that have driven the climaxing of global industrial civilisation. Finally, the task ahead for our generation is to learn how to downsize and disown before we prepare to die, with grace, at a time of our choosing, and in a way that inspires and frees the next generations to chart a prosperous way down.

 

 

Feb 062019
 


Salvador Dali Portrait of Gala with Two Lamb Chops Balanced on Her Shoulder 1933

 

 

Ilargi: It’s been quite a while since we last heard from Dr. D. He was probably busy growing stuff. But he’s back now, and with something dear to my heart: the craziness of our food production systems. Answers to which are not always what most people think, to put it mildly.

 

 

Dr. D:

Eat less meat to save the planet – report (1)
The new diet that could save the planet (2)
What to eat to save the planet: Report urges ‘radical changes’ to world’s diet – less meat, more veggies (3)

 

These headlines, likely sourced from a recent article from “The Lancet” (4) are a regular feature of our time, in diet, in environmentalism, and in global warming. They are well-researched, sourced by the world’s experts, and put forward with the highest intentions. However, they are also completely wrong – dangerously, ignorantly wrong.

Like most industries, agriculture and food production is a specialty, with its own language and details. I don’t attempt to tell the Lancet how to perform heart surgery, for to do so would be ridiculous, dangerous, outside of my expertise. I wouldn’t tell a geologist how to interpret the magnetic layers of rock, or how oceanographers should properly interpret sea water samples to guide us on fishing or pollution. Yet this is what they do for farmers.

The primary drive of most such articles is that, with so many people, and so much hunger, we find that it takes “2,500 gallons of water, 12 pounds of grain, 35 pounds of topsoil and the energy equivalent of one gallon of gasoline to produce one pound of feedlot beef.” that “64% of US cropland produces livestock feed.” (5) That it takes “20 pounds corn [to make] 1 pound beef.” (6) Or that you can get 15lbs of beef per acre, but 263lbs of soybeans. (7) Also that cattle are the primary reason for deforestation, and a major cause of methane.

From these numbers, it’s simple to see that meat, particularly cattle, is anti-environmental, and even anti-human, and it would be the pinnacle of irresponsibility to encourage or even allow them to be eaten. It is a direct affront to the poor, the hungry, and even other citizens in developed countries like ourselves, even though we may be able to afford such things. Simple. A lock. Slam-dunk. No further research required.

Setting aside that we waste half our food, the food we do have is maldistributed, and that we haven’t tapped a fraction of the land we did in say, WWII Britain, setting aside that the water doesn’t vanish, but returns to the water table to be used again, setting aside that the methane released does not contribute to global warming since it is exclusively carbon captured by the grass earlier that year, setting aside that the argument is the same one Malthus had, 250 years wrong, or that removing cattle would amount to the permanent extinction of more than a thousand breeds of animals with a lineage thousands of years old … even all that aside, their argument shows they don’t know anything about land, food, or the process of creating it.

Some other major concerns of economists and environmentalists are 1) environmental destruction from drilling 2) peak oil, 3) production of toxic waste, 4) plastics packaging, 5) dependence on imported energy, 6) CO2 from cars and transportation, and 7) BTUs per calorie of food eaten, as popularized in Kunstler’s “3,000 mile Caesar salad” (8) and this is where our story starts.

 


Deck Family Farm

 

On a farm, one of the major input costs every year is fertilizer, nitrogen, and this is presently produced almost exclusively from a feedstock of natural gas. That is to say, food in the modern agricultural system is literally the eating of unsustainable oil wells. And it’s even worse than that: agriculture is so dependent on synthesized, centralized petroleum fertilizer that it’s no exaggeration to say that without massive, uninterrupted supplies of cheap oil and gas there would be no food. Yields could easily drop by 30%, causing an unprecedented human catastrophe.

What’s more, another of the environmentalists’ grave concerns, topsoil loss and soil depletion would immediately come to the fore, as the only thing keeping today’s depleted fields in production are the artificial inputs directly from oil fields, mostly imported. –And that’s ABOVE the oil needed for the tractors, for the harvesters, for the delivery, for the centralized plant, for the parts, the buildings, food wrapping, for the creation of pesticides, herbicides, the centralized seed production, centralized grain mills…no. For the purposes of this article, we are only talking about cows.

Of course, mankind didn’t start this way, unable to eat a lettuce leaf without a 10,000-mile chain of energy use from foreign, occupied nations and the unwavering support of the worldwide industrial society that supports it. Originally the cows stood on the very grass they ate, eating contentedly, and were butchered and sent to market locally, using not a drop of oil. They did not disturb the fields but indeed enriched them with their foot-traffic and manure. So how did we go from a 0 mile, 0 grain, 0 cost, 0 oil food source to a food that reportedly starves continents and will destroy the world? That is, if cows were good and worked before, maybe the problem lies not with the meat or the cow, but with rabid industrialism?

If petroleum-based fertilizer is our major weakness, the single import that can be shut off to kill billions, surely it’s our duty — a national security emergency even — to close this weakness and find ecological alternatives. And for fertilizer, we have two: one, you can rotate crops to keep fields fallow in rotation, or two, you can replace synthetic fertilizer with animal manure. In fact, synthetic fertilizer is but a poor, harmful replacement for the manure farmers have used for 5,000 years – it has only nitrogen, potassium and potash, and nothing of the thousand other nutrients required of healthy soil.

 

It has no biosphere, no heat, no water, and no organic matter. The resulting soil depletion is a prime cause of desertification and topsoil loss, to say nothing of constantly lower yields. Its very use destroys the soil in the way steroids destroy health while giving the illusion of strength. They should probably be banned not for environmental reasons, but for long-term efficiency and national security. And there is only one replacement for this toxic, destructive, unreliable, expensive input: animal manure.

Worse, this cannot be chicken, sheep, or pig, adequate as they are. Pig and chicken are too concentrated and toxic and require other petroleum processes to dilute and deliver. Sheep is too mild and not in quantity, for sheep do not favor containment. Home composting could never produce a fraction of the volume needed for the world’s fields without the same massive petroleum inputs in tractors, trucks, chippers, conveyors, and all the factories, railways, and steel mills that create them. That leaves largely one source: cattle.

So in this new ecological world we imagine, we would have to grow cattle simply for the required fertilizer. And these cattle cannot be far! Unlike synthetic fertilizer, manure is wet, heavy, and dilute. It cannot be centralized into today’s poisonous sewage ponds, nor shipped coast to coast: it must be created near the fields that require it. As the world is enormously varied, you must also have breeds attuned to each locality’s weather and needs, perhaps creating a thousand unique varieties.

Tiny Kerry cattle for the bogs of Ireland, bony Longhorns for the deserts of Texas, Alpine Braunvieh for the steep mountains of Switzerland, or a hearty Fjäll for the frozen lands of Sweden. Nor can the farms be concentrated or specialized: without mass inputs of machinery or petroleum, and lacking harmful dry fertilizer, the farms must be small, dispersed, and varied, local in scope, diverse in production, specializing in their region and feeding only people nearby. Once you can’t ship mass quantities virtually for free, from reliable, nearly free energy, there is no other way.

 


Earth Repair Corps

 

Now you can’t get that fertilizer for nothing, and we don’t get it for nothing now. You have to have input costs for our fertilizer factory. And for cattle that input is grass; fields and fields of it, probably near 1-2 acres per cow. Is that bad? Irresponsible? How does that compare to drilling in ANWAR, and delivering via the Exxon Valdez? How is the sourcing from Iraq, transported via Syria, or the digging of tar with a payloader in the freshwater swamps of Alberta?

Now you can get 1, 2, even 3 cuttings a year of hay in temperate climates, and the cow is happily producing this valuable fertilizer all the time, without embargoes, financial disruptions, or delivery costs. But nevertheless, 25% of your fields will be put out of service in order to environmentally, sustainably source this necessary input for next year’s grain.

But not to fear! You know what? You can EAT the components of this essential, life sustaining fertilizer production factory! Yes, you can! Even better, you can eat butter, cheese, yogurt and yes, even ice cream! These very things you would NOT have without running this fertilizer mill that you would be forced to run even if they did nothing at all. Even more, you can down-stream the whey from your milk-preservative process to feed pigs! I’m not making this up!

Yes, by the very fact of creating fertilizer you had to produce in any case, you can also eat bacon! And you essentially have to, because otherwise this valuable milk-byproduct will go to waste. Nor can the pigs be far. You must have farms that are small in scale, varied in production, and local to the community. This will, of course, make them especially resilient to every challenge: financial, ecological, or human, be it from global warming or global warring.

The diverse, smaller-scale of these farms unfortunately require smaller business units to run them, such as the millions of local families presently unemployed, and sadly force cattle and other animals to free-range on the fields in the sunshine, as their ancestors did. But we all make sacrifices.

 

More, this small, diverse, decentralized food production system cannot aggregate mass quantities for mass market. Cows are not all the same, arriving by tens of thousands in the same 100-acre slaughterhouse, but because dissimilarity hampers assembly-line processes, the food would be produced in smaller batches, closer to home, more directly, without the wasting fuel and CO2 to ship them worldwide, and without the 31 flavors of plastics packaging which don’t make economic sense at this scale. –The French market model, as it were, local in the streets of your own town, fresh and unique.

You see, what they didn’t ask and forgot to research is that in order to grow those 263lbs of soybeans, you have no alternative but to have 1:4 of your fields fallow, resting, doing nothing. That’s now 197lbs per acre. Neither can you do that every year without input, so using another field to add this fertilizer, you have 131lbs/acre, really. The fallow land required of a world without oil inputs means 1/2 of the world’s production is offline at any given time, starving people.

What a drag! But you COULD, if you’re very clever, plant a wild, nitrogen-fixing plant on that fallow ground, creating both green manure for next year’s soybeans, AND running your cattle-driven fertilizer factory at no additional cost! Not only do you get the ONE field green-manured, and ANOTHER field cow-manured, but you could, if you’re very smart, get that otherwise useless, fallow field to grow ANOTHER crop of milk and beef, and downstream, chickens and pigs, absolutely FREE! THREE fields for the price of one.

What would you expect to pay for this richness, this agricultural, ecological magic trick? $1 trillion? $5 trillion for our green-energy, planet-saving, CO2-reducing “Green New Deal”? One that’s proven and can actually work because it follows the laws of thermodynamics? Surely it’s worth any cost if it saves the planet and takes a huge chunk off oil drilling, oil wars, and global warming.

Answer is: nothing. What I’ve just described is western agriculture, as developed since the 1500s. Anyone who’s ever looked at a farm, read a wikipedia entry, or took a history class knows this. Every medieval peasant knows this. Every hillbilly farmer from Iowa knows this. Except for all the modern journalists and The Lancet, all of whom all eat these very foods every day without the slightest spark of where they come from.

 


Night Owl Farm

 

You see, it doesn’t matter if cows are less efficient than soybeans, they exist in a SYSTEM, and that system has many inputs and many parameters. Reading a statistic doesn’t grow a plant to market any more than my reading about scalpels makes me a surgeon. There are many other possibilities, requirements, inputs: they speak of overgrazing, such as dry lands in Africa, when in fact, rotational OVERgrazing replenishes the soil and INCREASES the yields.

What’s more, a very great deal of the reported “arable” land on earth is not productive. It is too dry, such as Texas; too steep, such as Colorado; too variable cold, like Montana; or too far from market, like Afghanistan. You can’t grow soybeans or corn there even if you wanted, and you couldn’t ship kale from Kabul to London at cost, so their “statistics” about arable land and production mean nothing. …Worse than nothing, as they are so misleading as to be completely wrong.

Wrong in the way that enormous, world-changing decisions, subsidies, and wars are made, wrong in the way Stalin thought to modernize and mechanize agriculture in the Ukraine to get it out of the 1500s, and killed 7 million people in a single year. Wrong because not every square mile of land is equivalent, and only the crop that grows and has enough value to ship can be produced there. That’s why they make whiskey in the Appalachians and cheese in the Alps: the value to market has to be so much higher, high enough to transport, or no food will be produced at all.

 

That’s why they grow wild pigs in the Dehesa of Spain: because otherwise those forests would feed no one. But scientists and journalists don’t know this, even though it’s on the Food Channel each night.

What’s more, their scientific white-room system is orders of magnitude less efficient than the medieval method. Hundreds of random foods are wasted on the farm. Should they be dropped, as the labor cost/hour is too high to economically recover them? Should we waste the time and petrol to compost them into biogas? No. Farm waste, and waste through every warehouse, rail car, grocer, and restaurant can be eaten by chickens. Then not only do you get the compost anyway, in manure, not only do you also get a lifetime of eggs, for free, YOU GET A CHICKEN. All from the grass, the seeds, the bugs…and the food waste they already abandon.

But this doesn’t come without a cost. Brace yourself for this, people, because in order to achieve this level of bounty and efficiency, you will have to EAT these animals rather than let them die of old age and disease and be eaten by dogs and beetles. You, yes you, if you want an ecological, happy-animal, local-economy, sustainable, anti-CO2, food-producing world, not only CAN eat meat, but you are REQUIRED to. …As did a thousand generations of your ancestors, back to the very first day of man, slashing and clearing a field so the deer would come.

So try to be at least as smart as an illiterate medieval peasant and grow your food the natural way: locally, seasonally, independently, with happy animals in a rich green world of fields, trees and farms enriched with thousands of subvarieties of biodiversity in hedgerows so rich they have yet to be fully cataloged. A far cry from the hardened, drilled, paved, expensive, destructive, unsustainable, dangerous, lethal, impoverished way promoted by the scientific experts and the journalists who cover them.

 

 

Nov 112018
 
 November 11, 2018  Posted by at 10:39 am Finance Tagged with: , , , , , , , , , , ,  2 Responses »


Paul Gauguin Christ in the garden of olives 1889

 

China Can Never Allow Its Housing Bubble To Burst (ZH)
One Thing Unites Britain (O.)
Four UK Ministers On Verge Of Quitting, EU Rejects Latest Plan (R.)
Top Tory Says Theresa May Is ‘Handing Power To EU’ In Brexit Deal (G.)
Khashoggi Murder Fails To Stop Britain Selling Arms To The Saudis (O.)
Saudi Arabia Wants To Cut OPEC Allies Oil Output By Up To 1 Million Bpd (R.)
Court Clears Rome’s Mayor Of Cronyism And Abuse Of Power (G.)
2 Koreas Complete The Disarming Of 22 Guard Posts (AP)
Moorside’s Atomic Dream Was An Illusion. Renewables Are The Future (G.)
Next Generation ‘May Never See The Glory Of Coral Reefs’ (G.)
Why Women Have Better Sex Under Socialism (G.)

 

 

50 million empty apartments. ‘Real’ estate holds 75% of Chinese private ‘assets’. There can hardly be a more dangerous concept for the global economy.

China Can Never Allow Its Housing Bubble To Burst (ZH)

Back in 2017, we explained why the “fate of the world economy is in the hands of China’s housing bubble.” The answer was simple: for the Chinese population, and growing middle class, to keep spending vibrant and borrowing elevated, it had to feel comfortable and confident that its wealth would keep rising. However, unlike the US where the stock market is the ultimate barometer of the confidence boosting “wealth effect”, in China it has always been about housing as three quarters of Chinese household assets are parked in real estate, compared to only 28% in the US, with the remainder invested financial assets. Beijing knows this, of course, which is why China periodically and consistently reflates its housing bubble, hoping that the popping of the bubble, which happened in late 2011 and again in 2014, will be a controlled, “smooth landing” process.

For now, Beijing has been successful in maintaining price stability at least according to official data, allowing the air out of the “Tier 1” home price bubble which peaked in early 2016, while preserving modest home price appreciation in secondary markets. How long China will be able to avoid a sharp price decline remains to be seen, but in the meantime another problem faces China’s housing market: in addition to being the primary source of household net worth – and therefore stable and growing consumption – it has also been a key driver behind China’s economic growth, with infrastructure spending and capital investment long among the biggest components of the country’s goalseeked GDP.

One result has been China’s infamous ghost cities, built only for the sake of Keynesian spending to hit a predetermined GDP number that would make Beijing happy. Meanwhile, in the process of reflating the latest housing bubble, another dire byproduct of this artificial housing “market” has emerged: tens of millions of apartments and houses standing empty across the country. According to Bloomberg, soon-to-be-published research will show that roughly 22% of China’s urban housing stock is unoccupied, according to Professor Gan Li, who runs the main nationwide study. That amounts to more than 50 million empty homes.

Read more …

Britain is shrinking away from not just Europe, but the world, unable to focus on anything other than its domestic squabbles.

One Thing Unites Britain (O.)

[..] Theresa May has always hung on in the belief that, when it came to the crunch moment, when a deal was on offer that would take the UK out of the EU on 29 March next year, her party and the country would unite sufficiently behind her to allow a withdrawal agreement to pass through parliament. The country would rally behind her vision of Brexit. But instead, as people become more aware of what leaving the EU entails, many MPs believe the reverse may be happening. [..] With more Tory Remainers and Leavers now opposing her, May’s task is daunting. Downing Street’s immediate task is to get her deeply split cabinet to unite around the final unresolved element of a potential deal with the EU: the legally complex issue of how to avoid a hard border between Northern Ireland and the Republic after Brexit.

Downing Street knows it is in a race against time. May is desperate to put a motion before the House of Commons before Christmas, in the hope that, somehow, it will pass. No 10 has pencilled in a cabinet meeting for early this week, probably on Tuesday. But disagreements remain among her most senior ministers over how the UK would exit from the so-called “backstop” agreement, under which the whole of the UK would remain in the EU customs union until a final UK-EU trade deal is struck. Several cabinet ministers are unhappy with what they fear will be fudged wording in the withdrawal agreement that fails to chart a clear path to exit the backstop. They want to see the full legal advice and want guarantees that the EU will not be able to prevent the UK breaking free from its system once and for all, so that it can strike its own trade deals.

Read more …

It’s still the Irish hard border. And they’re still no closer to a solution.

Four UK Ministers On Verge Of Quitting, EU Rejects Latest Plan (R.)

Four British ministers who back remaining in the European Union are on the verge of quitting Theresa May’s government over Brexit, the Sunday Times reported, as pressures built on the prime minister from all sides. The newspaper also said that the European Union had rejected May’s plan for an independent mechanism to oversee Britain’s departure from any temporary customs arrangement it agrees. The newspaper sourced the development to British sources, and not sources in the EU team. May is trying to hammer out the final details of the British divorce deal but the talks have become stuck over how the two sides can prevent a hard border from being required in Ireland.

Britain has proposed a UK-wide temporary customs arrangement with the EU to resolve the issue but Brexiteers in her party want London to have the final say on when that arrangement would end, to prevent it from being tied indefinitely to the bloc. A senior cabinet minister was quoted in the paper as saying: “This is the moment she has to face down Brussels and make it clear to them that they need to compromise, or we will leave without a deal.” An EU diplomat told Reuters earlier on Saturday that they were cautiously hopeful that an EU summit could happen in November to endorse the deal but that the volatile situation in Britain made it very difficult to predict.

Read more …

Well, May herself doesn’t appear to know what to do with that power.

Top Tory Says Theresa May Is ‘Handing Power To EU’ In Brexit Deal (G.)

Theresa May was accused last night by a former cabinet colleague of planning the “biggest giveaway of sovereignty in modern times”, as she faced a potentially devastating pincer movement from Tory remainers and leavers condemning her Brexit plans. The day after Jo Johnson, the pro-remain brother of former foreign secretary Boris Johnson, resigned from the government and called for a second referendum on Brexit, former education secretary Justine Greening launched an attack on the prime minister, saying her plans would leave the country in the “worst of all worlds”. Piling yet more pressure on May, Greening – who resigned from the cabinet in January – backed the former transport minister’s call for another public vote and said MPs should reject the prime minister’s deal.

Greening told the Observer: “The parliamentary deadlock has been clear for some time. It’s crucial now for parliament to vote down this plan, because it is the biggest giveaway of sovereignty in modern times. “Instead, the government and parliament must recognise we should give people a final say on Brexit. Only they can break the deadlock and choose from the practical options for Britain’s future now on the table.” Greening added: “Like many of us, Jo Johnson is a pragmatist on Britain’s relationship with the EU. But Conservative MPs can increasingly see that this sovereignty giveaway from No 10 leaves our country with less say over rules that govern our lives … That is not in the national interest, it’s the worst of all worlds and it resolves nothing.”

Read more …

Even as the UK has also received the audio from Turkey.

Khashoggi Murder Fails To Stop Britain Selling Arms To The Saudis (O.)

Britain has pursued its assiduous courtship of Saudi Arabia despite the murder of the journalist Jamal Khashoggi, with diplomats and Ministry of Defence officials meeting their counterparts in the kingdom to discuss closer economic, military and political ties. The discussions have taken place as Britain enters the final phase of negotiations to sell more Typhoon jets to Riyadh. They are similar to those used in the Saudi-led bombing of Yemen in a war that has caused a humanitarian disaster.

Britain sells billions of pounds of weapons to the countries bombing Yemen and is keen to strengthen its ties after Brexit. In July last year, the government confirmed it had created a dedicated Gulf region working group to promote “high-level dialogue with key trading partners to progress our trade and investment relationships”. Since then, civil servants have regularly visited the region for confidential talks to prepare for future deals once Britain leaves the European Union. A delegation from the Department for International Trade visited the Eastern Province chamber of commerce in Dammam in Saudi Arabia on 2 October – the day Khashoggi was murdered.

Alastair Long, the UK’s deputy trade commissioner for the Middle East and director of trade for Saudi Arabia, stressed that Britain was keen to create alternative markets and that Saudi Arabia “is at the head of these markets”. On 31 October, another UK government delegation visited Riyadh for a meeting with the Gulf Cooperation Council secretariat. A press release from the council said the meeting discussed expanding “the horizons of political, security, military and commercial cooperation”

Read more …

Much discussed before: smaller producers have only one reaction to falling prices: produce more (if they can).

Saudi Arabia Wants To Cut OPEC Allies Oil Output By Up To 1 Million Bpd (R.)

Saudi Arabia is discussing a proposal to cut oil output by up to 1 million barrels per day by OPEC and its allies, two sources close to the discussions told Reuters on Sunday. The sources said the discussions were not finalized as much depended on the reduction in Iranian exports. “There is a general discussion about this. But the question is how much is needed to reduce by the market,” one of the sources said, speaking in Abu Dhabi where a market monitoring committee is due to be held on Sunday, attended by top exporters Saudi Arabia and Russia.

Asked by reporters in Abu Dhabi if the market is in balance, Saudi Energy Minister Khalid Al-Falih said: “We will find out. We have our meeting later.” Al-Falih last month said there could be a need for intervention to reduce oil stockpiles after increases in recent months. The United States this month imposed sanctions curtailing Iran’s oil exports as part of efforts to curb Tehran’s nuclear and missile programs as well as its support for proxy forces in Yemen, Syria, Lebanon and other parts of the Middle East.

Read more …

Smearing M5S has become less easy.

Court Clears Rome’s Mayor Of Cronyism And Abuse Of Power (G.)

The Rome mayor, Virginia Raggi, has been cleared of cronyism and abuse of power after a judge ruled that the alleged offence did not constitute a crime. Prosecutors had called for a 10-month jail term over allegations that Raggi, from the anti-establishment Five Star Movement, lied to investigators over the appointment of Renato Marra, the brother of one of her close aides, as Rome’s tourism chief. His brother Raffaele, the former head of staff at Rome city hall, faces separate corruption allegations. The accusations emerged not long after Raggi was elected as Rome’s first female mayor in June 2016. Had she been convicted she would have been forced to resign as mayor, in line with the Five Star Movement’s code of ethics.

She wept upon hearing the ruling, saying afterwards: “This sentence wipes out two years of mud-slinging. We’ll go forward with our heads held high for Rome, my beloved city, and for all citizens.” Luigi Di Maio, the Five Star Movement leader and Italy’s deputy prime minister, celebrated the court ruling while using the opportunity to criticise journalists whom he accused of “attacking Italy’s most massacred mayor” for two years and generating “fake news” to bring her down. “Go Virginia! I am happy for always having defended you and believed in you,” he wrote on Facebook.

Read more …

There are people who genuinely want peace. Get out of their way.

2 Koreas Complete The Disarming Of 22 Guard Posts (AP)

The North and South Korean militaries completed withdrawing troops and firearms from 22 front-line guard posts on Saturday as they continue to implement a wide-ranging agreement reached in September to reduce tensions across the world’s most fortified border, a South Korean Defense Ministry official said. South Korea says the military agreement is an important trust-building step that would help stabilize peace and advance reconciliation between the rivals. But critics say the South risks conceding some of its conventional military strength before North Korea takes any meaningful steps on denuclearization — an anxiety that’s growing as the larger nuclear negotiations between Washington and Pyongyang seemingly drift into a stalemate.

South Korea reportedly has about 60 guard posts — bunker-like concrete structures surrounded with layers of barbed-wire fences and manned by soldiers equipped with machine guns — stretched across the ironically named Demilitarized Zone. The 248-kilometer (155-mile) border buffer peppered with millions of land mines has been the site of occasional skirmishes between the two forces since the 1950-53 Korean War. The North is believed to have about 160 guard posts within the DMZ.


In this Nov. 4, 2018, photo provided by South Korea Defense Ministry, a yellow flag is raised at a guard post of South Korea in the demilitarized zone, South Korea. A South Korean Defense Ministry official said on Saturday, Nov. 10, 2018, the North and South Korean militaries have completed withdrawing troops and firearms from 22 front-line guard posts as they continue to implement a wide-ranging agreement reached in September to reduce tensions. The flag marks the post that is to be dismantled so that each side can observe the work in progress.

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Sorry, but no. Using much less energy of any kind is the future. Voluntarily or forced. That’s what we should prepare our societies for.

Moorside’s Atomic Dream Was An Illusion. Renewables Are The Future (G.)

Toshiba’s decision to pull out of building a nuclear power station in Cumbria last week will cause shockwaves far beyond the north-west of England. The outcome is a disaster for the surrounding area, which is heavily reliant on the nuclear industry for jobs and prosperity. Local politicians admit it is a blow and a disappointment for Cumbrians hoping for roles at the proposed Moorside plant. They say they genuinely believe a new buyer for the site will come forward. But that looks like wishful thinking. To an extent, the demise of Moorside can be attributed to problems with it as a specific project. It has looked doomed since Toshiba’s US nuclear unit, Westinghouse, declared bankruptcy in 2017 and the company ruled out new nuclear investments outside of Japan.

Efforts to woo the South Korean energy company Kepco as a buyer then floundered. The executive leading the sale for Toshiba blamed the failure to find a buyer on being “caught between a series of unplanned and uncontrollable events”. But the end of Moorside is also emblematic of the wider challenges that new nuclear faces. It took a decade from Tony Blair signalling the UK’s renewed interest in nuclear power in 2006 for France’s EDF Energy and the British government to sign a generous subsidy deal and green-light Hinkley Point C, the UK’s first new nuclear plant in a generation. In all likelihood, it will not be generating electricity until 2027. Ministers insist new nuclear power stations are still an essential way of hitting the country’s greenhouse gas emission targets and providing energy security as old plants are switched off in the 2020s.

Losing Moorside means there are just five other new nuclear projects planned, including Hinkley Point C. Eyes will now turn to Hitachi’s proposed Wylfa Newydd plant on Anglesey. The project is the furthest along the line after Hinkley, but it’s far from a done deal. The new nuclear drive was meant to be solely funded by the private sector, but the government has already made a striking exception in the case of Wylfa. Ministers have promised Hitachi they will use public money to take a £5bn stake in the scheme. Such a dramatic U-turn on policy is explained by the fact that Wylfa is about more than the UK’s desire for new nuclear: it is also about cooperation with Tokyo and bringing forth other investment from Japanese firms, such as carmakers, after Brexit.

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We get the drift, but we also know only a small part of 1 or 2 generations of mankind have ever ‘seen’ coral reefs. And most people only do ‘see’ them in pics and movies. You might want to think about that. it’s definitely not about you ‘seeing’ coral reefs or rhino’s or orangutans. It’s about something else.

Next Generation ‘May Never See The Glory Of Coral Reefs’ (G.)

Children born today may be the last generation to see coral reefs in all their glory, according to a marine biologist who is coordinating efforts to monitor the decline of the world’s most colourful ecosystem. Global heating and ocean acidification have already severely bleached 16 to 33% of all warm-water reefs, but the remainder are vulnerable to even a fraction of a degree more warming, said David Obura, chair of the Coral Specialist Group in the International Union for the Conservation of Nature. “It will be like lots of lights blinking off,” he told the Observer. “It won’t happen immediately but it will be death by 1,000 blows. Between now and 2 degrees Celsius, we will see more reefs dropping off the map.”

Obura added: “Children born today may be the last generation to see coral reefs in all their glory. Today’s reefs have a history going back 25 million to 50 million years and have survived tectonic collisions, such as that of Africa into Europe, and India into Asia. Yet in five decades we have undermined the global climate so fundamentally that in the next generation we will lose the globally connected reef system that has survived tens of millions of years.”

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Headline obviously for effect. But interesting theme. Still, is it capitalism that is to blame for suppressing women, or patriarchy?

Why Women Have Better Sex Under Socialism (G.)

This book has a simple premise: “Unregulated capitalism is bad for women,” Kristen Ghodsee argues, “and if we adopt some ideas from socialism, women will have better lives.” Ghodsee is an ethnographer who has researched the transition from communism to capitalism in eastern Europe, with a particular focus on gender-specific consequences. “The collapse of state socialism in 1989 created a perfect laboratory to investigate the effects of capitalism on women’s lives,” she writes. Less regulated economies, she finds, place a disproportionate burden on women. Women subsidise lower taxes through their unpaid labour at home. Cuts to the social safety net mean more women have to care for children, the elderly and the sick, forcing them into economic dependence.

Ghodsee contends that without state intervention, the private sector job market punishes those who bear and raise children and discriminates against those who might one day do so. The government is better at ensuring wage parity across different groups than the private sector, and economies with more public sector jobs tend to have more gender equality, too. Women bear the brunt of capitalism’s cyclical instability, and are often the last to be hired and the first to be fired in economic downturns. They are paid less, they have less representation in government and, she writes, all of this affects their sexuality. The less economic independence women have, the more sexuality and sexual relationships conform to the marketplace, with those who are disadvantaged in the free market pursuing sex not for love or pleasure but for a roof over their heads, health insurance, or access to the wealth or status that capitalism denies them.

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Oct 092018
 


Pieter Bruegel the Elder Two monkeys 1562

 

And there we go again. Another IPCC report, and they all keep getting more alarming than the previous one. And then nothing substantial happens. Until the next report is issued and makes everybody’s headlines for a day, or two. Rinse, spin and repeat. “Now we really have to do something!”. “World leaders have a moral obligation to act!”.

Oh boy. To start with that last bit, world leaders don’t act because of moral obligations. They act to stay in, or get in, power. And they all know that to achieve that goal they must keep their people happy, even if dictators do this differently from ‘democratically elected’ leaders.

The first tool they have for this is control of the media, control of the narratives that define -or seem to- their societies. If a society is in bad shape, they will control the media to show that it is doing fine. if it’s actually doing fine, they will make sure all the praise for this is theirs and theirs alone.

So what makes their people happy? One thing far ahead of anything else is material comfort. If leaders can’t convince people that they’re comfortable, their power is in danger. Once enough people are miserable or hungry, a process is set in motion that threatens to push leaders aside in favor of someone who promises to make things better. There’s never a shortage of those.

 

Leaders, politicians, think short-term. They may see further into the future than the next election, but that is not useful information. If they enact measures aimed at 10 years from today or more, they risk being voted out in 2 years, or 4. It’s not even their fault, it’s how the system works. It is different for dictators, but not even that much.

The general notion is clear. But that means we can’t rely on our leaders to act against the climate change the IPCC keeps warning of. because is has a -much- longer time window than the next elections -or the next coup in dictator terms. Even if every IPCC report depicts a shorter window than the last one, it’s still not inside those 4-year election cycles (numbers vary slightly, 4 is typical).

A typical ‘response’ to the climate threat are the COP meetings and agreements. I have fulminated plenty against COP21, the Paris accord, even named it CON21. Because that was signed by those very leaders tied down in their election cycles. Completely useless. That most of the other signees were business leaders who represent oil companies, airlines and Big Tech with huge server parks seals the reality of the deal.

These are not the people who will solve the problems. They have too much interest in not doing so. The CEO’s have their profits to think about, the politicians their elections. They should be kept out of the decision-making process. But they’re the only ones who are in it.

I still think the issue was never better epitomized than in the December 2016 piece in the Guardian by Michael Bloomberg and Mark Carney entitled “How To Make A Profit From Defeating Climate Change” , about which I said at the time:

These fine gents probably actually believe that this is perfectly in line with our knowledge of, say, human history, of evolution, of the laws of physics, and of -mass- psychology. All of which undoubtedly indicate to them that we can and will defeat the problems we have created -and still are-, literally with the same tools and ideas -money and profit- that we use to create them with. Nothing ever made more sense.

That these problems originated in the same relentless quest for profit that they now claim will help us get rid of them, is likely a step too far for them; must have been a class they missed. “We destroyed it for profit” apparently does not in their eyes contradict “we’ll fix it for profit too”. Not one bit. It does, though. It’s indeed the very core of what is going wrong.

Profit, or money in general, is all these people live for, it’s their altar. That’s why they are successful in this world. It’s also why the world is doomed. Is there any chance I could persuade you to dwell on that for a few seconds? That, say, Bloomberg and Carney, and all they represent, are the problem dressed up as the solution?

This week’s IPCC report says the efforts to keep warming at acceptable levels (1.5ºC) will cost many trillions of dollars every year. But a billionaire publisher and a central bank head want to make a profit?! Hey, perhaps they can, as long as you and I pay… But they won’t solve a thing. if only because not doing that will be too profitable. Still, while they’re at it, maybe they can do us a favor.

You see, what is hardly ever mentioned, let alone acknowledged, is that we have more than one major existential problem, and they exist in such a form of symbiosis that solving only one doesn’t make much difference.

We have a changing climate, we have accelerating species extinction, we have plastics in our fish, and we have a global economy that’s about to topple over. The common thread in all these is an overkill in energy use and therefore an overkill in waste. Thermodynamics, 2nd law. Waste kills. By raising temperatures, finishing off wildlife, plugging rivers and oceans with plastics, making increasing amounts of people economically miserable.

But as I wrote a while ago, our economies exist to produce waste, it’s not just a by-product -anymore-. If we stop making things we don’t need, and things that do harm to our world and our lives, our economies will collapse. We must continue on our path or see our lifetstyles plummet. They will anyway, we’re just delaying the inevitable, but we’re stuck.

And politicians are utterly useless and utterly unfit in situations like this. But ask yourself: are you any better? If you were told that in order to ‘save the planet’, you’d have to cut your energy use in half, which would take away many of your comforts and luxuries, would you do it?

A better question yet is, if you would agree to do that, and then see that your neighbor does not, would you still cut your driving and flying and electricity? That’s hard enough on an individual level, but how about if one nation does, while another refuses? Or when nations that have much lower per capita energy consumption tell the West: you go first?

 

What do you think the odds are that we’ll find a global solution, approach, before the 2030 cutoff date the IPCC provides in its latest report? While the likes of Bloomberg and Carney still talk about climate change as a profit opportunity? I know what I think.

The report says we need to drastically ‘reform’ our economies and lifestyles. Cutting our energy use in the West in half won’t be enough, if only because billions of people demand more energy at their disposal. Will you cut into your lifestyle, will your children, when they see their neighbors increasing their energy use, when they see entire nations increase theirs?

We don’t have ‘leaders’ that can stop species extinction or a warming planet or an economic collapse, because they either are clueless or they will be voted out of power if they tell the truth. Extend and pretend is a term that’s used to describe economic policies a lot, but it actually paints an accurate picture of everything we do.

“Free”, surplus, energy can come in the shape of sugar in a petri dish full of bacteria, or of stored carbon on planet earth. In both cases, the outcome is as predictable as can be. Can we, with our billions of cars and billions of miles flown every year, and billions of phones and computers, return to the energy use of only 100 years ago? Don’t think so.

On the contrary, we’re constantly increasing our energy consumption. Just like the bacteria do in the petri dish. Until they no longer can, until reality, physics, thermodynamics, sets a limit. One of my favorite themes is that we are the most tragic species ever because we can see ourselves doing things that we know are harmful to us, but we can’t stop ourselves from continuing.

The best we can hope for is that tomorrow morning everything will be the same again as where we started today. But no, that’s not sufficient, either, many of the things we’ve unleashed have 20+ year runtimes, and they’re already baked into the cake of our futures. We can’t start afresh every morning, no Groundhog Day for us. Every morning the alarm goes off things have gotten worse. And we can’t stop that.

 

 

Jun 222018
 
 June 22, 2018  Posted by at 8:08 am Finance Tagged with: , , , , , , , , , , , , ,  14 Responses »


Wassily Kandinsky Yellow-Red-Blue 1925

 

Could China’s Next Target Be the US Housing Market? (Forsyth)
Next Central Bank Puts QE Unwind on the Calendar (WS)
Eurogroup Deal For Greece Clinched After Marathon Session (K.)
IMF Welcomes Greek Debt Deal But Has Reservations On Long-Term (R.)
Germany Has Made Over $3 Billion Profit From Greek Crisis (KTG)
Greek GDP Is Low, But Food Prices Are High (K.)
EU Is Getting Ready For No-Deal Brexit – Juncker (G.)
Multi-Decade Outsourcing Boom Comes to Sticky End in the UK (DQ)
Energy Is The Primary Driver Of The Economy (EI)
Italy To Pick Up Migrants, Impound German Charity Ship (R.)
People Donate Millions To Help Separated Families (AP)
2 Koreas Meet To Arrange Reunions Of War-Split Families (AP)
Tourism Preventing Kenya’s Cheetahs From Raising Young (G.)
India Is Facing Its Worst-Ever Water Crisis (ZH)

 

 

They can’t really sell Treasuries. MBS, though…

Could China’s Next Target Be the US Housing Market? (Forsyth)

While so much attention is focused on foreign purchases of Treasuries, the big action has been in U.S. agencies, most of which consist of mortgage-backed securities from government-sponsored Ginnie Mae, Fannie Mae, and Freddie Mac. In April, overseas investors bought $20 billion of agencies, bringing their 12-month total to $186 billion, or over $100 billion more than Treasuries. Asia accounted for $160 billion of those purchases, including $24 billion from China. U.S. corporations also get key support for their borrowing habit from abroad. Foreign investors bought $128 billion of corporate bonds in the latest 12 months, although just $1.6 billion in April. As for equities, overseas investors bought $82 billion ($6 billion in the latest month).

The numbers show that, even more than Uncle Sam, U.S. home borrowers depend on the kindness of strangers. China could retreat from bolstering the American housing market merely not reinvesting the monthly MBS interest and principal payments, resulting in a stealth tightening of mortgage credit. The housing market is already in the doldrums, as May’s weaker-than-expected existing home sales at an annual rate of 5.43 million, 100,000 less than forecast and below April’s 5.45 million annual pace. That disappointing home sales pace comes with unemployment at just 3.8%. But with single-family home prices up 5.2% from a year ago, home sales are sluggish. A further push up in mortgage rates, already at seven-year highs, would further crimp this key sector of the U.S. economy.

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Do we see nerves there?

Next Central Bank Puts QE Unwind on the Calendar (WS)

Markets were surprised today when the Bank of England took a “hawkish” turn and announced that three out of nine members of its Monetary Policy Committee – including influential Chief Economist Andrew Haldane, who’d been considered dovish – voted to raise the Bank Rate to 0.75%, thus dissenting from the majority who kept it at 0.5%. This dissension, particularly by Haldane, communicated to the markets that a rate hike at the next meeting in August is likely. The beaten-down UK pound jumped. But less prominent was the announcement about the QE unwind. Like other central banks, the BoE heavily engaged in QE and maintains a balance sheet of £435 billion ($577 billion) of British government bonds and £10 billion ($13 billion) in UK corporate bonds that it had acquired during the Brexit kerfuffle.

Before it starts shedding assets on its balance sheet, however, the BoE wants to raise the Bank Rate enough to where it can cut it “materially” if needed, “reflecting the Committee’s preference to use Bank Rate as the primary instrument for monetary policy,” as it said. In this, it parallels the Fed. The Fed started its QE unwind in October 2017, after it had already raised its target range for the federal funds rate four times. The BoE’s previous guidance was that the QE unwind would start when the Bank Rate is “around 2%.” Back in the day when this guidance was given, NIRP had broken out all over Europe, and pundits assumed that the BoE would never be able to raise its rate to anywhere near 2%, and so the QE unwind could never happen.

Today the BoE moved down its guidance about the beginning of the QE unwind to a time when the Bank Rate is “around 1.5%.” The Fed’s target range is already between 1.75% and 2.0%. The Fed leads, other central banks follow. And by August 2, the BoE’s Bank Rate may be at 0.75%. From that point forward, the QE unwind may only be three rate hikes away.

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Many headlines talk about debt relief. But that’s not what this is. It’s just another bunch of loan extensions and a €15 billion new loan. There will be many more years of austerity and creditor oversight. No, the bailout has not been completed.

Eurogroup Deal For Greece Clinched After Marathon Session (K.)

After several hours of negotiations, Greek officials and representatives of the country’s international creditors reached an agreement on securing the sustainability of the country’s debt in the early hours of Friday. Greece is to receive a loan tranche of 15 billion euros (3.3 billion euros of which would be used to pay off part of the country’s debt to the ECB and IMF), European officials said. Greece will also get a 10-year extension for the repayment of its European Financial Stability Facility (EFSF) loans and an additional grace period of 10 years on interest payments. The extension of the repayment period of the EFSF loans and the size of the final bailout tranche had been a sticking points in the talks.

These two issues were the focus of several trilateral meetings between Greek Foreign Minister Euclid Tsakalotos and his French and German counterparts, Bruno Le Maire and Olaf Scholz. At a press conference announcing the details of the deal, European Economic and Financial Affairs Commissioner Pierre Moscovici spoke of a “historical moment for Greece” and said a new chapter was beginning for the country. He expressed “great satisfaction” in seeing Greece emerge from eight years of financial support.

“Tonight’s Eurogroup agreement achieves what we have been calling for, a credible, upfront set of measures, which will meaningfully lighten Greece’s debt burden, allow the country to stand on its own two feet, and reassure all partners and investors,” he said. Eurogroup President Mario Centeno struck a similar note. “This is it,” he said. “After eight long years, the Greek bailout has been completed.”

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The IMF has caved on debt relief. Even though it knows it must be accorded.

IMF Welcomes Greek Debt Deal But Has Reservations On Long-Term (R.)

The IMF welcomed on Friday a deal on debt relief for Greece reached by Athens’ euro zone creditors saying it will improve debt sustainability in the medium term, but maintained reservations on the long term. Euro zone finance ministers earlier on Friday offered Greece a 10-year deferral and maturities extension on a large part of past loans as well as 15 billion euros in new credit to ensure Athens can stand on its own feet after it exits its third bailout in August. “The additional debt relief measures announced today will mitigate Greece medium-term financing risks and improve medium term debt prospects,” the IMF managing director Christine Lagarde told a news conference.

But she added that the fund will not join the expiring 86-billion-euro bailout as the time “has run out”, and maintained “reservations” on the long term sustainability of the Greek debt, which runs until 2060. The fund will begin assessing the sustainability of the Greek debt “as early as next week”, Lagarde said, adding that the fund will remain engaged in Greece and will participate to the monitoring of the Greek economic performance and reforms after the end of the program.

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“Contrary to all right-wing myths, Germany has benefited massively from the crisis in Greece..”

Germany Has Made Over $3 Billion Profit From Greek Crisis (KTG)

Germany has earned around 2.9 billion euros in profit from interest rate since the first bailout for Greece in 2010. This is the official response of the Federal Government to a request submitted by the Green party in Berlin. The profit was transmitted to the central Bundesbank and from there to the federal budget. The revenues came mainly due to purchases of Greek government bonds under the so-called Securities Markets Program (SMP) of the European Central Bank (ECB). Previous agreements between the government in Athens and the eurozone states foresaw that other states will pay out the profits from this program to Greece if Athens would meet all the austerity and reform requirements.

However, according to Berlin’s response, only in 2013 and 2014 such funds have been transferred to the Greek State and the ESM. The money to the euro bailout landed on a seggregated account. As the Federal Government announced, the Bundesbank achieved by 2017 about 3.4 billion euros in interest gains from the SMP purchases. In 2013, approximately 527 million euros were transferred back to Greece and around 387 million to the ESM in 2014. Therefore, the overall profit is 2.5 billion euros. In addition, there are interest profits of 400 million euros from a loan from the state bank KfW.

“Contrary to all right-wing myths, Germany has benefited massively from the crisis in Greece,” said Greens household expert Sven Christian Kindler said and demanded a debt relief for Greece. “It can not be that the federal government with billions of revenues from the Greek interest the German budget recapitalize,” Kindler criticized. “Greece has saved hard and kept its commitments, now the Eurogroup must keep its promise,” he stressed.

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And here’s why the Greek recovery story is simply falsehood.

Greek GDP Is Low, But Food Prices Are High (K.)

Greeks may be among the poorest citizens in the European Union, but that does not mean low prices for basic products and services in this country. According to figures published on Wednesday by Eurostat, Greece was the 17th most expensive country among the 28 EU member-states last year, with the general price level standing at 84 percent of the EU average. However, in the most basic category – food – price levels in Greece stood above the bloc’s average, having a significant negative impact on living standards. Eurostat figures had shown on Tuesday that the per capita GDP in Greece in 2017 amounted to just 67 percent of the EU average, while real private consumption stood 23 percent below the EU mean rate.

A key role in food prices remaining at such high levels – in spite of the decade-long crisis – has been played by a succession of hikes in the value-added tax: From a 9 percent rate on food imposed in 2009, many food products now bear a VAT rate of 24 percent, making Greece the 13th most expensive country for food across the bloc. High indirect taxes also explain the particularly high prices in tobacco and alcoholic beverages in Greece, which make this country the 12th most expensive in the EU in this category.

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A hard Brexit will be very unpretty. Airbus talked today about moving 14,000 jobs out of the UK. And they won’t be the last.

EU Is Getting Ready For No-Deal Brexit – Juncker (G.)

The EU needs to be realistic about the dangerous state of the Brexit negotiations and is preparing to deploy its trillion-pound budget to cushion the bloc from the prospect of a no-deal scenario, the European commission president has warned. With the two sides still far apart on the “hardest issues”, just days from a crunch leaders’ summit in Brussels, Jean-Claude Juncker told the Irish parliament on Thursday he was stepping up preparations for a breakdown in talks, and even drafting plans aimed at keeping the peace in Northern Ireland. The problem of avoiding a hard border with the Republic – said by the Irish taoiseach, Leo Varadkar, to be akin to a “riddle wrapped in an enigma” – is threatening to thwart all attempts to make progress on a wider deal.

With Theresa May refusing to countenance what Juncker described as the bloc’s “bespoke and workable solution”, of the Northern Ireland effectively staying in the customs union and single market, it was crucial for the 27 EU member states to prepare for the worst outcome, the commission president said. Juncker told Irish MPs and senators in a joint session of parliament in Dublin: “With pragmatism comes realism. As the clock to Brexit ticks down, we must prepare for every eventuality, including no deal. This is neither a desired nor a likely outcome. But it is not an impossible one. And we are getting ready just in case.

“We will use all the tools at our disposal, which could have a cushioning impact. The new long-term budget for our union from 2021 onwards has an in-built flexibility that could allow us to redirect funds if the situation arose. “We will also earmark €120m (£105m) for a new peace programme which has done so much in breaking down barriers between communities in Northern Ireland and the border counties.”

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More things coming to an end in Britain.

Multi-Decade Outsourcing Boom Comes to Sticky End in the UK (DQ)

The United Kingdom, widely considered to be the birthplace of the modern incarnation of the public-private partnership (PPP), in which private firms are contracted to complete and manage public projects, could be one of the first countries to jettison the model. The collapse in January of 200-year old UK infrastructure group Carillion, whose outsized role in delivering public services earned it the moniker “the company that runs Britain,” has fueled concerns that other big outsourcing groups could soon follow in its doomed footsteps. Last week the CEO of Interserve, another large outsourcing group, revealed that the government has given the firm a red rating as a strategic supplier, meaning it has “significant material concerns” about the company’s finances.

Fears are growing that Carillion was not a one-off episode but rather the swan song of a deeply flawed and dying business model. Those fears were hardly assuaged by the release this week of a damning parliamentary report into the UK government’s practice of outsourcing public projects through so-called Private Finance Initiatives (PFIs). PFI deals were invented in 1992 by the Conservative government and then enthusiastically rolled out by the subsequent Labour government. The schemes usually involved large-scale public buildings such as new schools and hospitals which were previously funded by the UK Treasury. Under PFI they were put out to tender with bids invited from developers who put up the investment to build new schools, hospitals or other schemes and then leased them back.

[..] The Treasury’s incapacity to measure the actual benefits of PFI should be of grave concern to British taxpayers given that the interest rate of private-sector debt — these projects are debt financed — can be as much as 2 to 3.75 percentage points higher than the cost of government borrowing. Even if the government doesn’t enter into any new PFI-type deals, it will pay private companies £199 billion, including interest, between April 2017 until the 2040s for existing deals, in addition to some £110 billion already paid. That’s for 700 projects worth around £60 billion. British taxpayers could clearly “get a much better deal,” the report concludes.

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John Lounsbury posted this talk by Steve from late 2016 again. And why not? Economics denies the role of energy…

Energy Is The Primary Driver Of The Economy (EI)

Economic theory has failed to incorporate the role of energy in production for two centuries since the Physiocrats, according to Prof. Steve Keen. In this video he derives a production function that includes energy in an essential manner. It implies that economic growth has been driven by the increase in the energy throughput capabilities of machinery. Prof. Keen argues that all economic gain can be traced to the use of energy which we receive at no cost from the sun. Capital and labor participate in the economy only by use of this energy.

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The Dutch play a strange role in this.

Italy To Pick Up Migrants, Impound German Charity Ship (R.)

Italy appeared to relent on Thursday after at first refusing to accept 226 migrants on board a German charity rescue ship, saying later in the day it would take them in but would impound the vessel. Anti-immigrant interior minister Matteo Salvini initially said the Dutch-flagged ship Lifeline should take the people it plucked from the Mediterranean to the Netherlands and not Italy. But transport minister Danilo Toninelli, who oversees the coastguard, later said it was unsafe for the 32-metre vessel to travel such a great distance with so many people on board. “We will assume the humanitarian generosity and responsibility to save these people and take them onto Italian coastguard ships,” Toninelli said in a video posted on Facebook.

Earlier this month Salvini pledged to no longer let charity ships bring rescued migrants in Italy, leaving the Gibraltar-flagged Aquarius stranded at sea for days with more than 600 migrants until Spain offered them safe haven. The Dutch government denied responsibility for the vessel, something Toninelli said Italy would investigate. The Italian coastguard would escort Lifeline “to an Italian port to conduct the probe” and impound the ship, he said. Also on Thursday, the German charity Sea Eye which operates another Dutch-flagged ship, the Seefuchs, said in a statement it was ending its sea rescue mission after the Dutch government told them that it was no longer responsible for the vessel.

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Please make sure it’s spent well.

People Donate Millions To Help Separated Families (AP)

In an outpouring of concern prompted by images and audio of children crying for their parents, hundreds of thousands of people worldwide are donating to nonprofit organizations to help families being separated at the U.S.-Mexico border. Among those that have generated the most attention is a fundraiser on Facebook started by a Silicon Valley couple, who say they felt compelled to help after they saw a photograph of a Honduran toddler sobbing as her mother was searched by a U.S. border patrol agent. The fundraiser started by David and Charlotte Willner had collected nearly $14 million by Wednesday afternoon.

The Willners, who have a 2-year-old daughter, set up the “Reunite an immigrant parent with their child” fundraiser on Saturday hoping to collect $1,500 — enough for one detained immigrant parent to post bond — but money began pouring in and within days people had donated $5 million to help immigrant families separated under the Trump administration’s “zero-tolerance” policy that criminally prosecutes all adults caught crossing the border illegally. “What started out as a hope to help one person get reunited with their family has turned into a movement that will help countless people,” the couple said in a statement released by a spokeswoman Wednesday. The couple, who were early employees at Facebook, declined to be interviewed.

“Regardless of political party, so many of us are distraught over children being separated from their parents at the border.” The money collected from more than 300,000 people in the United States and around the world will be given to the Refugee and Immigrant Center for Education and Legal Services, or RAICES, a Texas nonprofit that that offers free and low-cost legal services to immigrants.

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South Korean President Moon Jae-in doesn’t sit still.

2 Koreas Meet To Arrange Reunions Of War-Split Families (AP)

North and South Korean officials are meeting to arrange the first reunions in three years between families divided by the 1950-53 Korean War. Friday’s meeting at the North’s Diamond Mountain resort comes as the rivals take reconciliation steps amid a diplomatic push to resolve the North Korean nuclear crisis. Seoul’s Unification Ministry said the meeting will discuss ways to carry out an agreement on the reunions made at a summit between North Korean leader Kim Jong Un and South Korean President Moon Jae-in. The two summits between Kim and Moon have opened various channels of peace talks between the Koreas, including military talks for reducing tensions across their tense border and sports talks for fielding combined teams at the upcoming Asian Games in Indonesia.

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Even if we don’t shoot them, we find other ways to kill them off.

Tourism Preventing Kenya’s Cheetahs From Raising Young (G.)

High levels of tourism can lead to a dramatic reduction in the number of cheetahs able to raise their young to independence, new research has found. A study in Kenya’s Maasai Mara savannah found that in areas with a high density of tourist vehicles, the average number of cubs a mother cheetah raised to independence was just 0.2 cubs per litter – less than a tenth of the 2.3 cubs per litter expected in areas with low tourism. Dr Femke Broekhuis, a researcher at Oxford University and the author of the study, surveyed cheetahs in the reserve between 2013 and 2017 to assess how the frequency of tourist vehicles affected the number of cheetah cubs that survived to adulthood.

“During the study there was no hard evidence of direct mortality caused by tourists,” such as vehicles accidentally running over cubs, Broekhuis said. “It is therefore possible that tourists have an indirect effect on cub survival by changing a cheetah’s behaviour, increasing a cheetah’s stress levels or by minimising food consumption.” Broekhuis said she has seen as many as 30 vehicles around a single cheetah at the same time. “The most vehicles that we recorded at a cheetah sighting was 64 vehicles over a two-hour period,” she said.

Too many tourist vehicles can reduce a cheetah’s hunting success rate, the study suggests, and even if the hunt is successful, the disturbance from tourists could cause a female to abandon her kill, making her less likely to be able to provide for her young. Broekhuis said it was “crucial that strict wildlife viewing guidelines are implemented and adhered to,” and suggested limiting the number of vehicles around a cheetah to five and not allowing them to get any closer than 30 metres.

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The shape of things to come.

India Is Facing Its Worst-Ever Water Crisis (ZH)

India is facing its worst-ever water crisis, with some 600 million people facing acute water shortage, a government think-tank says. The Niti Aayog report, which draws on data from 24 of India’s 29 states, says the crisis is “only going to get worse” in the years ahead. Around 200,000 Indians die every year because they have no access to clean water, according to the report. And as The BBC reports, many end up relying on private water suppliers or tankers paid for the by the government. Winding queues of people waiting to collect water from tankers or public taps is a common sight in Indian slums. Indian cities and towns regularly run out water in the summer because they lack the infrastructure to deliver piped water to every home.

• 600 million people face high-to-extreme water stress. • 75% of households do not have drinking water on premise. 84% rural households do not have piped water access. • 70% of our water is contaminated; India is currently ranked 120 among 122 countries in the water quality index. India faces more than one problem – all compounding the nation’s crisis: Droughts are becoming more frequent, creating severe problems for India’s rain-dependent farmers (~53% of agriculture in India is rainfed17). When water is available, it is likely to be contaminated (up to 70% of our water supply), resulting in nearly 200,000 deaths each year.

Interstate disagreements are on the rise, with seven major disputes currently raging, pointing to the fact that limited frameworks and institutions are in place for national water governance. And that means massive problems lie ahead… 40% of the Indian population will have no access to drinking water by 2030 with 21 cities running out of groundwater by 2020 – affecting 100 million people which will cut 6% from GDP by 2050. What remains alarming is that the states that are ranked the lowest – such as Uttar Pradesh and Haryana in the north or Bihar and Jharkhand in the east – are also home to nearly half of India’s population as well the bulk of its agricultural produce.

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Mar 302018
 
 March 30, 2018  Posted by at 7:07 pm Finance Tagged with: , , , , , , , , , , ,  8 Responses »


Jerome Liebling May Day Union Square Park New York City 1948

 

 

Dr. D. peels the American political onion to get down to what it’s all about. I’m impressed. He explains America better than just about anyone. Turns out, there ain’t much left. So yeah, what happened?

 

 

Dr. D: The news cycle runs so frenetically it’s easy to lose track of the bigger tide. Let’s go back a week and look at something the Automatic Earth has been talking about since the beginning.

This weekend at a speech in Mumbai, Hillary Clinton said:

“If you look at the map of the United States, there’s all that red in the middle where Trump won. …I win the coast….I won the places that represent two-thirds of America’s gross domestic product. So I won the places that are optimistic, diverse, dynamic, moving forward. And his whole campaign, ‘Make America Great Again,’ was looking backwards.”

There are many ways to look at this: for one thing, by number, over 90% of the counties are Red. Yet over 50% of the population is concentrated in the cities and Blue counties. Clinton officially won the popular vote. Yet the United States has always had a geographical Electoral College system. A compromise of representation between small, weak states and strong, large states, and the rules of the 2016 campaign were no mystery or surprise. Yet that’s only the middle-sized picture.

The Big Picture is Mrs. Clinton saying she’s representing the important people, the right people – even the working people – and that 2/3rds of those people live exclusively in Blue districts on both coasts. While this is arguably true, it wasn’t always true. NYC or San Francisco have always been important, but from their founding until now, places like Dayton, St. Paul, Pittsburgh, or New Orleans were considered vital, important places, places where their own specialty happened: tires or flour, steel or shipping, lumber or mining.

What Happened? In a way the election was a referendum on “What Happened?” What happened to my community, my country, my area, and all the vital work those long-abandoned areas used to do, what happened to the massive GDP those areas used to contribute, and the answer is simple:

 

An organism contracts from the periphery to the core.

 

There’s a lot in that statement. As it took decades, even a century to happen, you can see which peripheries were sacrificed first and next, who had power, who didn’t, and how long they could maintain it; and that’s interesting, because it was not East or West, white or black, rural or urban as they might have you believe. There are as many hopeless, abandoned people in Baltimore as there are in Billings, Montana, possibly more, and possibly started far sooner. But if it’s not ethnic or geographical, then what is it?

 

An organism contracting from the periphery to the core is a consequence of centralization.

 

The Automatic Earth began with discussing the shrinking of the country, of industrialization, in terms of who would receive the ever-dwindling supplies oil and energy, the infrastructure and attention, but that is not necessarily a function of practicality. It is more often a function of political power, and we largely have a political problem and not a practical one.

The Core has been using their power to attract and concentrate more wealth and more power to themselves and their areas until most of the nation’s wealth and power are concentrated in Clinton’s 2/3rds of GDP, the sub-10% of the counties. All top 10 richest zip codes are now in one region: the Washington D.C. area.

Economic wealth and power is used to expand political power, further extracting the wealth of the Periphery to maintain the lifestyle of the Core. While this may seem a practical strategy, it isn’t. At one time the Periphery was creating maybe 2/3rds of the wealth of the nation, costing nothing, and that was with no more infrastructure than remains today.

So when those places are idled, 2/3rds of the nation’s GDP also vanishes, and while the Core can maintain their lifestyle by cannibalizing the remaining energy and attention, the entire nation they are part of only becomes far poorer. So far from the concentration of power making them stronger , it’s making them weaker , as they have a fraction of the former wealth and ability, cohesion and cooperation, men and materials to draw on.

 

This leads to the problem she highlights, which is social and political fracturing. With a majority of the wealth pulled to the Core, the Periphery withdraws its economic and social consent in a sense of unfairness that is only validated by further extractions, concentrations, and non-cooperations.

This can make it more difficult to run even the Core economy as disagreements develop between Core vs Periphery or entitled vs disenfranchised peoples even within the Core itself, leading to a difficulty maintaining compliance, resource supplies, disagreements on how to allocate wealth, support infrastructure, and so on.

This may seem an engineering issue, but this is also Tainter’s “Collapse of Complex Societies”, where cultures weather many storms, many expansions and contractions, but what causes “Collapse” is the attempt to maintain expensive infrastructure built up during the good times, at the expense of one portion of society. If compromise can be reached, Society survives.

If a compromise cannot be reached and the Core attempts to force its will via social and military force, the price of compliance becomes too high and fails, and with it, the cooperation, the social contract that makes a people or a nation one unit. It fractures, and when it does, those pieces break up and become, as he says, simpler, Less Complex societies. Less specialized, less concentrated, and less centralized, or by our modern pejorative view, “Primitive.”

As our American society has measurably less energy since 1974, we have seen the re-allocation and distribution of that energy ring-fenced into an ever-dwindling core of fewer counties, and fewer participants in those counties, and like other complex societies, we have been socially fracturing since that time as well, as fewer and fewer within the system benefit from it.

There’s much more to unpack in this, but let’s just ask some questions:

• What makes a “Core”? What constitutes the “Periphery”?

• Since the Periphery has and could contribute a majority of overall GDP, what inspires the Core to sacrifice it rather than expand their wealth through it?

• As a metaphor for a bodily process, a biological “contraction” occurs during emergencies such as starvation, freezing, or flight. But would the body really survive if it crippled the legs, lost its fingers, or its hearing to save itself? Contrarily, would the body survive and function if the brain, liver, or heart swelled to 3 times their original size?

• What is the resource load of a brain or stomach that is 3x larger than necessary?

• Since from an engineering perspective all parts of a machine must be in working order for it to work at all, what impractical, non-engineering priorities must be established to cause the core and periphery to become so mismatched?

• How are those impracticalities decided? How are they maintained?

• Is the deciding and maintaining of inequity and non-function a benefit to the Core? To the Periphery? Both? Neither?

• Once the Periphery has been sacrificed to the Core, what must happen for them to be re-joined and freely cooperate again?

• Can this be done? What would have to be sacrificed that wasn’t sacrificed before? By which side? One? Both?

 

Mrs. Clinton’s idle quote has meaning. If her places are “optimistic, diverse, dynamic, moving forward” then logically the other , the 90% of Red America is “pessimistic, oppressive, racist, dull, lazy, and backwards.” “Deplorable,” if you will. Aside from how this doesn’t seem to be a good pitch to win votes among 90% of voting counties, you have to ask, “How did they get this way?” and “What is your plan to gather your countrymen and make them optimistic, productive, and to work again, and thus help all?” Yet oddly, that was her opponent’s slogan.

If she’s not asking the question of how to include and elevate everyone, isn’t she really saying “I’m in favor of further enriching my Core at your expense”? And while historically that is indeed a common response to dwindling energy, Tainter warns it may also be one that can collapse both the economy and the society.

Since large, concentrated societies contract to the Core to protect themselves and their critical assets, those in the core historically won’t offer time or resources to help anyone but themselves: the army, the police, the roads, the tax officials. When that is true, you may want to localize, decentralize and maintain your own Core, with your own people, at home. This re-localizing will re-establish the balance of power in the Periphery where most people live.