A Contrarian Post on the Keystone XL Pipeline

I'm going to say some things in this post about the Keystone XL Pipeline that are likely to irritate liberals and conservatives. So let me begin with some premises about what's going on in the world.

1) Global warming is a real threat. Exactly what will happen in the next 100 years is not certain at this time. Maybe global warming won't be so bad. Maybe it will be our worst nightmare. The potential downside, however, is enormous if we do not take steps to control global warming. I'm reminded that we were told by industry experts and hotshot conservatives that nuclear energy poses no significant problems. The accident at Fukushima was supposed to be a once in a thousand year incident. It's rather odd how once in a hundred year events or once in a thousand year events keep happening. The worst case scenarios for global warming are too dangerous not to be taken seriously.

2) The fossil fuels we're using today are not only more expensive, but they are much dirtier and more prevalent than they were sixty years. Even if global warming were not an issue, it is pretentious to think that pollution from fossil fuels is not an issue. The growing acidification of the oceans is a major issue. The sulfurous clouds hanging over Asia are also an issue. These issues concern everyone, particularly the U.S.

3) The exploitation of tar sands, despite many measures taken to address environmental concerns, is proof that we're in trouble if we have to turn to such a dirty and expensive fuel. Light sweet crude is in decline and has been for several years.

4) The oil industry has convinced millions of Americans that global warming is not real, that alternative energy is a job killer and that oil can continue indefinitely to solve our energy needs. All three assertions are lies and are propaganda paid for by the oil industry, with considerable help from the people who control the Republican party.

5) The hour is late. We have put off the inevitable since the 1970s. Given the lateness of the hour, it will take an enormous amount of investment and work to create an economy based on alternative energy. And it will take time. I have seen very little that puts a number on how long it will take to cut our use of fossil fuels worldwide by 50%. Here I do not have the facts, but my guess is that it will take 15-30 years.

6. To power the transition, we will need a strong economy. It very likely will take the burning of more fossil fuels to power the transition to that economy. If we abruptly stop burning fossil fuels, the transition probably will not happen. Of course, as the use of alternative energy goes up, the use of fossil fuels can go down, but the consumption of fossil fuels cannot decline too fast.

7. The use of fossil fuels may possibly drop rapidly due to declining reserves of usable fossil fuels. Though the oil industry is beginning (just barely) to admit that fossil fuels other than coal will soon become much more difficult to bring to market, we again have wasted decades by not turning to alternative fuels sooner.

8. If by chance, or through incompetence of the far right, the economy of the U.S. collapses, or even if it simply declines, it is likely more fossil fuel will go to power the economy of Asian countries. Countries like India and China show no signs that they will be cutting the use of fossil fuels any time soon. The leadership role, by default, goes to the United States. It's true that Europe can be helpful but the continuing monetary crisis in Europe shows how difficult it can be for the Europeans to lead. Keep in mind, however, that over the last thirty years, Europeans have done a much better job than the U.S. of turning to alternative energy. But they are vulnerable to swings in the oil and natural gas markets. Europe has twice the population of the U.S., and if one does not count Russia, their oil reserves are considerably less.


Okay, here it goes.

I have very mixed feeling about the Keystone XL pipeline. Despite everything, we may need it. Republicans have handled our energy problems with such extraordinary incompetence that they have threatened our future.

I find it curious that some proponents and critics of the pipeline say the building of the pipeline won't significantly bring down the price of oil. Actually, the pipeline will bring down the price a small amount—not necessarily something to cheer about. It is politically not feasible, but I believe we need to make sure the price doesn't come down too far. Better yet, we need to slowly raise prices to match the real cost of oil, including clean up and CO2 emissions. We need to stop passing on the real cost of fossil fuels to our children and grandchildren. And Republicans need to stop indulging in the fantasy that some scientist will come up with some magic solution—this is ironic given how little Republicans have faith in science and how little they are willing to pay for major buildup in research. Right wingers cannot keep cutting the budget for science while expecting miracles.

Republicans have been bad-mouthing Detroit for almost four years, but Detroit is actually moving more and more toward efficient cars. What Republicans fail to understand is that Americans need both jobs and more efficient cars and transportation (don't anyone pretend that the pipeline will create a huge number of jobs; they will create some, but that's all). That the current Republican leadership would let Detroit go under says a great deal about the incompetence of Tea Party Republicans and other right wingers.

It is ridiculous, as some 'experts' have argued, that the building of the pipeline will make us dependent on Canada. Oil from Canada is a far safer bet than depending on keeping the Straits of Hormuz open. Yes, our navy can keep the straits open and probably will have to continue to do so. But having a secure supply of oil should not be discounted. There are going to be energy disruptions in the next twenty years. I despise the tar sands, but we may need those reserves to fuel the transition.

Now I'm going to really be contradictory. To a large extent, I support the protests against the pipeline. It is disgusting that we are relying on tar sands and talking as if oil is forever and that global warming is of no concern. The protests are a sign that Americans are at last waking up to concerns about our future. The obstructionism and incompetence of Republicans will continue for some time to come until somebody starts rebuilding the party on more pragmatic lines. In the meantime, I would like to see the protests geared more towards actually getting more green energy projects installed. But no one should pretend that we can quickly go without oil.

In some respects, I find it more urgent to start going after coal. Coal is tar sands in its worst form. If Congress had any sense, no more coal plants would be built. Again, it will take time to transition, but coal plants that go offline should not be replaced. This is where green organizations should be focusing. Not just closing coal plants, but replacing them with green energy. The money is potentially there. If progressives can raise money for political causes, they can raise money to build windmills, solar roofs and other forms of alternative energy.

UPDATE:    Jan. 21, 2014

It's two years later and much has change. The only thing useful about the tar sands is that it's proof that the fossil industries are dying. The energy return on the tar sands is criminal. Why? A high energy return on fossil fuels generates wealth for society as a whole. A very low energy return, as is the case with tar sands, only helps the very rich.

The other problem is that fracking is a bubble, nothing more. One can already see major problems in North Dakota. Production will continue to climb, in some months, but the number of months when production actually falls is continuing. North Dakota is simply running into a wall. Every land owner receiving money from the oil companies should look seriously into wind turbines and the necessary power lines to send electricity to out of state markets.

Secretary of State John Kerry should not approve the pipeline. That pipeline is not in the interest of our future.

President Obama should be doing as much as he can to get alternative energy moving along as quickly as possible. Prices in alternative energy are falling. As they continue to fall, alternative energy is America's best hope for an energy future and a healthy economy.

The Sociopaths on Wall Street

The ideal corporation through most of the 20th century was one that pursued profits while being reasonably responsible toward workers, the community, and consumers. Since about the 1960s, corporations have also, at least in theory, been more responsible when coming to the environment.

However, since the 1980s—some would argue sooner—there has been a deterioration in corporate ethics in many sectors. Certainly the S & L crisis, the ethical failures of the Exxon Valdez episode and the deaths and lack of financial responsibility associated with the Union Carbide Bhopal disaster—all three occurred in the 1980s—makes it clear that the interpretation of deregulation in that era was far too often synonymous with ethical lapses in the executive suite. From the end of the Reagan era until the end of George W. Bush's time in office, the interpretation has only gotten worse. Actually, in very little time, deregulation went from a need to adjust regulations to make them fairer and more sensible to becoming an outright license to break the law and defraud people in various sectors of society.

There have always been lapses among corporation and there has been debate about how much or how little a corporation should do. There have also been corporations, all along, that cut corners in order to gain an advantage over other corporations. A general rule of thumb in business is that competent people can always make money as long as everybody plays by the same rules. Unfortunately, people who are not very honest or competent or both are generally the first to look for short cuts, including favors from politicians.

The reality is that both parties are susceptible to influence peddling. Unfortunately, Republicans have pretty much made deregulation, as well as other ethically challenged ideas, pillars of their political philosophy. In addition, if an ethically-challenged business executive makes enormous profits, many Republican politicians, are notoriously slow to recognize that there is a problem (e.g., Kenneth Lay and George W. Bush). The most telling sign is that when a rational and honest Republican prosecutor tries to uphold the law, that prosecutor may find himself without a political future in the Republican party.

One of the problems with today's business world is the number of ethically challenged people who are allowed to rise to the executive suite in the first place. In Bloomberg, William D. Cohan has an article that discusses a theory by Clive R. Boddy about Wall Street psychopaths:

Clive R. Boddy, most recently a professor at the Nottingham Business School at Nottingham Trent University, says psychopaths are the 1 percent of [people who] ... "lack a “conscience, have few emotions and display an inability to have any feelings, sympathy or empathy for other people.”

(snip)

He says [psychopaths] seem "to be unaffected" by the corporate collapses they cause. These psychopaths "present themselves as glibly unbothered by the chaos around them, unconcerned about those who have lost their jobs, savings and investments, and as lacking any regrets about what they have done. They cheerfully lie about their involvement in events, are very convincing in blaming others for what has happened..."

It worth recalling that John Dean has written a book called "Conservatives without Conscience." Dean was not talking specifically about psychopaths, and certainly not corporate psychopaths, who are basically a class of very smart criminals who are much more sophisticated than ordinary criminals without conscious (who in any case frequently end up in prison). But Dean was very much talking about people who are authoritarian by temperament. I would also add that people like Newt Gingrich and George W. Bush strike me as extraordinarily narcissistic and are clearly among the type of people Dean talks about. For both Bush and Gingrich, life is all about them.

But today's Republican party has other other problems as well. What is it about the Republican political class that they look the other way when a Republican politician obviously lies? And why is it that they refuse to set the record straight when others obviously lie about Barack Obama (birthers) or lie about John Kerry (swift boaters)? And why is it that the Republican political class failed to notice the obvious economic disaster we were heading for as Wall Street and the banks were allowed to engage in reckless behavior?




Here's the scholarly link to Boddy's paper.

And here's a link that provide a more accessible version to Boddy's paper.

The Three Words That Define 2012: Jobs, Jobs, Jobs

At the end of the day, in most years, Americans are pragmatists. I say most years because it's not always certain that pragmatists win the day. For example, one definition of a pragmatist is that if something doesn't work, you try something else. A classic example in the last thirty years is trickle down economics, which argues that if you give more money to the rich, they'll create more jobs. Reagan tried trickle down economics in the 1980s. No matter what you think of Reagan, trickle down doesn't work. It never has. But, for some reason, Republicans keep trying it. They try trickle down economics this way, that way and every which way—and it still doesn't work.

Whoever becomes the Republican nominee is virtually guaranteed to try trickle down economics if elected. Cutting taxes and doing cute favors for the wealthiest Americans is more important to Republican politicians and lobbyists in Washington than creating jobs. That is a fact. One only has to look at their record. No doubt business as usual Republicans will put a good spin on it and tell a good story but it'll be trickle down economics. Trickle down sounds a lot better than what Republican economics really is: protecting the wealthiest Americans at all costs, regardless of how much it hurts our country, our democracy and millions of our fellow Americans.

Of course, there have always been four kinds of wealthy people: the kind who really know what they're doing (Jobs, Gates), the kind who inherit wealth (Paris Hilton as well as oil, lumber and tobacco heirs), the kind who are basically crooks in business suits surrounded by lawyers (Michael Milken and Bernie Madoff), or those who sort of stumble into it (Sarah Palin and any number of failed CEOs given golden parachutes of millions of dollars despite a dismal bottom line). Keep in mind that the first kind knows how to make money and doesn't need help creating wealth. And keep in mind that most wealthy people of the other three types usually don't help the economy much.

There's also a special fifth category that achieves wealth initially through the other routes mentioned but that guarantee wealth for themselves and their heirs through any number of devices that can only be defined as protecting privilege. They pay a lot of money to state legislatures and Congress to guarantee their wealth, and year after year the payoffs for their "investments" are lucrative. As just one example, one of the most lucrative scams during the Bush years was very low taxes on stock market, real estate and commodities speculations. Sorry, but speculation, to a large extent, is simply a legal way of skimming billions of dollars from tens of millions of Americans without actually producing healthy economic activity. (There is some need for prices to find their level but the massive gyrations of the markets have become a hindrance rather than a help to the economy. Count me in as one of those who think all such transaction should include a very modest tax).

Does anyone really doubt that Republicans are dominated by the 1%? Does anyone doubt that the 99% (which include tens of millions of ordinary Democrats, Republicans and independents) has legitimate reasons to be concerned about a power structure in this country that leaves so many people behind? Look, there are many responsible people among the 1%. We all know that. As some commentators point out, we're often talking about the .1% and generally those who abuse our economy to enrich themselves in ways that are unhealthy and unsustainable in the long term.

One of the things I personally have disliked over the last twenty years is the idea that many businesses seem to have that I am just a consumer, a human cow to be milked, bled and sometimes skewered. But I'm not a consumer. I'm an American. I'm sure millions of people feel the same way.

I know, I know, "consumer" is a word that sometimes has to be used in economics to explain how things work. I accept that on a certain level. But the politicians, aggressive sales people and the bottom line corporate takeover artists make a huge mistake of forgetting that consumers are Americans. People who lose their homes or jobs because of big biz financial shenanigans are usually decent people who have been treated as if they don't exist. Nothing is more disgusting to me than a corporation that buys a company with a good reputation and bleeds every dime out of that corporation and forgets the consumers, employees and the community and then, to add insult to injury, sells a product no longer worthy of the company's reputation. That is not the kind of capitalism that made America great.

Nick Hanauer is technically a member of the 1% and has written an article suggesting that taxes need to be raised to ensure that consumers, the real job creators, have money to spend:

Since 1980, the share of the nation’s income for fat cats like me in the top 0.1 percent has increased a shocking 400 percent, while the share for the bottom 50 percent of Americans has declined 33 percent.

(snip)

[But]...there can never be enough superrich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the average American, but we don’t buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men.

(snip)

If the average American family still got the same share of income they earned in 1980, they would have an astounding $13,000 more in their pockets a year. It’s worth pausing to consider what our economy would be like today if middle-class consumers had that additional income to spend.

Raising taxes on wealthy Americans is only one step that needs to be taken. Much will have to happen to move our country in the right direction. Americans are unlikely to have that extra $13,000 any time soon. Mistakes have been made. Not enough has been spent on scientific research, one of the key activities that has always stimulated our economy. Not enough has been done to fix bridges, streets, hospitals and schools. Too many jobs have been sent overseas.

In the end, what Americans need are more jobs, not more budget cuts that do nothing more than cut jobs. For two years, Republicans have been complaining about the economy and for two years they have hardly lifted a finger to create jobs. Not in Washington. And not in state capital after state capital. Already, at the election approaches, Republican politicians, Republican pundits and even Republican think tanks are changing their rhetoric to tell Americans what they want to hear. But keep in mind that to date the only thing Republicans have done is cut jobs and ignore the poor and even the middle class. The recession started in early 2007. Where have the Republicans been? At least Democrats have been trying. They would have accomplished a great deal more if not for Republican obstructionists in Washington and in state capitals.

Nick Hanauer is a member of the 1% but not exactly in the sense that has been discussed in recent weeks. The 1% (or .01%) that everybody is talking about are people like Mitt Romney (who's comfortable making $10,000 bets) and Newt Gingrich (who pretends he's not a lobbyist). One was born into the 1% and is making it clearer day by day what his values really are. And the other became wealthy by shilling for the 1% for the last 30 years.

At the end of the day, we need to reelect President Obama and put more Democrats in Washington. But we also need two parties in this country. The Republicans in the GOP leadership need to become pragmatic again.

The Occupy Wall Street Movement and the Decline of the Republican Party

Republicans have a hard time accepting responsibility for their blunders. Charles Krauthammer, for example, is still trying to justify the war in Iraq years after it became obvious that the war was a perpetrated fraud, a war that was utterly unnecessary and irrelevant to the capture of Osama bin Laden and the dismantling of al Qaida. The United States wasted hundreds of billions of dollars in Iraq, with billions quite often unaccounted for. That does not include the ultimate cost of the war.

And Republicans wonder how we got into the deepest economic slump since the 1930s.

Years of deregulation by Republicans and a few of their Democratic friends left the financial sector as about as unregulated as a gambling saloon in 1880s Tombstone, Arizona. The reckless beneficiaries of Republican deregulation were investment bankers on (gasp) Wall Street. Do Republicans really not know what Occupy Wall Street is about? To this day, most of the people responsible for the meltdown have not been held accountable.

The phony rage of the Tea Party movement, largely financed by the 1%, and for the 1%, is largely a resurrection of the John Birch Society (one of the founding members of the John Birch Society is the father of the ultra-conservative billionaire Koch brothers who own Koch Industries). In the 1960s, the John Birchers saw communists under every rock and were radically right wing. Like the John Birchers, the Tea Party folks also have trouble dealing with facts. For example, the debt the U.S. has run up in the last 11 years was not because of welfare, medicare, social security, or student loans. The debt was the result of Republicans refusing to fund two major wars. In twenty of the last thirty years, it has been Republicans not Democrats who have recklessly driven up America's debts. For eight years, Clinton had a surplus. Republicans who consult sources other than Fox News and Rush Limbaugh know this.

Look, I know plenty of hardworking Republicans who vote for Republican politicians—those same Republican politicians are glad to take their votes and money without giving much back. It's a weird world. What people need to remember about the power brokers of the Republican Party is very simple: the Republican Party is the party of bankers and privilege. There aren't that many people who are bankers and who have sweet heart deals courtesy of Congress, state legislatures, and Republican presidents. So in the spirit of P. T. Barnum, Republican leaders cajole a lot of people with odd promises that they half-heartedly keep.

People like Charles Krauthammer work hard to make us miss the obvious. In a recent column, he wrote:

To the villainy-of-the-rich theme emanating from Washington, a child is born: Occupy Wall Street. Starbucks-sipping, Levi’s-clad, iPhone-clutching protesters denounce corporate America even as they weep for Steve Jobs, corporate titan, billionaire eight times over.

These indignant indolents saddled with their $50,000 student loans and English degrees have decided that their lack of gainful employment is rooted in the malice of the millionaires on whose homes they are now marching — to the applause of Democrats suffering acute Tea Party envy and now salivating at the energy these big-government anarchists will presumably give their cause.

Krauthammer lays it on thick—stereotypes, mythologies and all the rest. I'm almost sorry that he doesn't work for our side. Except that over the years he's become a little loose with the facts. It's the only way a conservative can operate these days. There was a time when a conservative could be rigorously factual and argue effectively. William F. Buckley was such a conservative. But Buckley, despite all the debates he so infuriatingly won—at least on debating points—had a weakness, and he knew it. But he exploited the decency of his opponents who either didn't think in certain terms or were too classy in that era to point out the obvious weakness in Buckley's arguments. That the underpinning of Buckley's philosophy was a shameless selfishness. William F. Buckley did not care if the system that so benefited the rich was unfair. He was, however, a little embarrassed by the underpinning of his philosophy. When cornered, he would admit that selfishness was essential to his type of conservatism, but he would say it quietly, in few words and move on quickly. That is the underpinning of the philosophy that dominates the Republican Party. Remember: I'm not talking about Republicans who are farmers, fire fighters and shopkeepers, etc.; I'm talking about high-powered bankers and the privileged, the people who game the system (I'm not talking about George Baily who ran a decent savings and loan; I'm talking about the other guy). The reality is that the Republicans who control the Republican Party care a great deal about the law, as long as it benefits them, and includes a lot of zeroes in the checks they receive.

Krauthammer truly doesn't understand what he's saying. He invokes Steve Jobs, an entrepreneur and job creator (though Jobs loses points in recent years for sending a fair number of jobs overseas). No Democrat I know has a problem with real job creators. Republicans relish creating mythologies about make work projects by Democrats, but Republicans are the ones who create phony jobs for party hacks like 'heckuva job' Michael Brown of Katrina fame and the private contractors in Iraq and Afghanistan.

Ironic that Krauthammer rails against an English degree. He himself began with a political science degree (though he moved on). That kind of silly name calling doesn't get us anywhere. In any case, isn't name calling an old-fashioned method for changing the subject?

The subject is that Wall Street not only screwed up the economy but no one has been held accountable for the fraud that was committed with the financial derivatives that were based on mortgages and ultimately the fraudulent system of bonuses, commissions, and paybacks for pushing as many home loans on Americans as possible regardless of the creditworthiness of the home owners or the credit worthiness of the banks, investment bankers and mortgage companies peddling the worthless derivatives. The financial collapse did not have to happen. It was not a product of an economic cycle. It was purely a product of lax government control, greed and fraud.

What was pathetic is that in early 2007, when it was clearly possible to do something, reasonably responsible Republicans—who nevertheless bought into the conservative economics of the last 30 years—stood like deer in the headlights, hapless, clueless and incompetent. The Tea Party Republicans are clearly not an improvement.

The people paying for the financial fiasco on Wall Street are not the banks, not the 1%, not the people with privileged government connections, and certainly not the Republican lobbyists doing all they can to protect their wealthy clients. The people paying for the fiasco are the 99% trying to earn a living.

If All the Earth's Population Could Fit into Texas...

Sometime this year, according to National Geographic, the number of humans on our planet is expected to reach 7 billion. The prediction, of course, assumes it hasn't already happened. Now I'm perfectly aware that when one drives across Nevada or eastern Oregon or west Texas, it sure doesn't feel like a crowded planet. But I'm also aware that 7 billion people are a lot for a planet to absorb, particularly as more and more societies try for an American lifestyle, as China is so quickly learning to do. One obviously cannot object to such lifestyles if one has been personally benefiting from such economic ascendancy for a number of decades. But one can notice trends, and increasing difficulties that are dangerous to ignore.

In National Geographic, writer Robert Kunzig doesn't exactly ignore population issues but one could argue that he may be a little too much on the optimistic side. Given predictions since the time of Malthus, the odd are actually in Kunsig's favor. To ease the reader's mind, however, he offers an illustration that supposedly puts things into perspective (pg. 61-62; January 2011):

At the PAA [Population Association of America] meeting, in the Dallas Hyatt Regency, I learned that the current population of the planet could fit into the state of Texas, if Texas were settled as densely as New York City. The comparison made me start thinking.... If in 2045 there are 9 billion people living on the six habitable continents, the world population density will be a little more than half that of France today.

The part about France is a bit warm and fuzzy but it's complicated to explain why it's so wrong. So let's stick with the Texas side of it. Of course, Kunsig is in no way advocating some kind of sci-fi removal of the Earth's population to Texas. But to see what the image means or doesn't mean, let's take it seriously and have some fun with it.

In our sci-fi depiction of the world of humans, we'll skip the absurdity of how to talk 7 billion people into jamming themselves into a mega-mega city in Texas with the density of New York City. First, let's look quickly at New York. No farms and very few manufacturing plants can be found these days in New York City. Everything is virtually brought in. And every night tons and tons of material is taken out, including everything such as waste products from shredded Wall Street documents and wrappings for hot dogs sold by street vendors. No major power plant within city limits fuels the heat, air conditioning and electricity for the city. And by the way, I don't know how true it is of other cities but a number of books have been written about how New York would literally fall apart within days if the infrastructure were not constantly repaired, maintained and in some cases fueled. If the power goes on the blink in some suburbs around the U.S. for a week a two, it's very inconvenient but the suburbs wouldn't necessarily fall apart. Unfortunately, without backup generators and significant technological help, New York would.

And then there's Texas. The western third is mostly desert. The middle third has some rain but is mostly on the dry side. The eastern third is wet (see a rain map here). And no matter where you are in the summer, it gets hot. New York City already has a knack for being hot in the summer despite being somewhat in the north. Imagine what a citified Texas would be! Now the fact is, no matter where you put a Texas-sized home for the human population, no location is likely to be perfect. But keep some of these factors in mind as we imagine some serious problems:

1. Where is all the steel and cement going to come from for all those skyscrapers? China is currently in the middle of a big building boom but even the Chinese could never find the cement and steel to cover all of Texas. And you can't take that material from existing buildings. Not all that many people on Earth live in high rises.

2. Where is the water going to come from? Particularly in west Texas, there isn't that much water for the population that already lives there. In fact, no place on Earth has enough water closeby to slake the thirst of 7 billion people in a place the size of Texas. Alas, you need pipelines—lots of them. And that still might not be enough. Special shipping ports would have to be built on the coast of Texas just to accommodate the tanker ships filled with water.

3. Farmers are going to have one hell of a commute. Somebody has got to grow the food. I suppose in our sci-fi adventure we could invent some robots but—except in the movies—robots are not that cheap to make or run, and not that good. And oh, by the way, where do we get all the extra metal and parts for them? Once again, special ports will have to be built along the Texas coast to accommodate all the food shipments. I suppose some fresh truck farm produce can be grown in Oklahoma, Louisiana, Kansas, New Mexico, Missouri, and maybe a dozen other states (and maybe part of Mexico) and put on trains to the mega-mega city, but one faces the same problem all over again: how are humans going to get to all the truck farms and back home in one night? And where are the refrigerator cars going to come from and how are you going to get them in that big city of Texas?

4. The same problem goes for fisherman, loggers, miners, oil riggers, etc., etc. Mind you, it's cheating the illustration if everybody lives near where they work. If coal miners need to go to Manchuria, they're going to need supersonic jets every night. And those jets are going to need super-airports because there's going to be a lot of commuters to fly and one hell of a rush hour in the skies. Oh, wait a minutes, the states surround the mega-mega city are being used for truck farms. Where would we put the airports?

5. And exactly where would all the manufacturing plants go? And who mans them? Well, we could once again conjure those magic all-purpose robots we find in so many sci-fi movies, but where are the metals, parts, computer chips and fuel going to come from for those things? And aren't robots cheating, anyway? And how would we get human workers to those plants without more supersonic jets? Or at least hi-speed rail? Maybe we need to build those manufacturing plants before we build the truck farms (not to mention all the other farms for not so fresh food).

6. Where would the energy come from for the mega-mega city and the manufacturing plants? If we use coal and natural gas, who's going to make sure the power plants get fed? And how are you going to feed the electricity from the Yangtze River energy project all the way to Texas? How do we hook up all those nuclear power plants from France? And that's an awful lot of power lines around the world zeroing in on our mega-mega city in Texas.

7. If we were to turn on 7 billion air conditioners on a hot Texas afternoon, what would that do to the grid?

8. I want to keep this polite but what would happen to all the dog poop in a city of 7 billion? And the cat and parakeet poop? And what would happen to all those flushed toilets and all that leftover food dumped into the garbage disposal? Sooner or later, it would end in the Gulf of Mexico. Would anyone along the Texas coast go into the water? Or any river more than twenty miles south of the Oklahoma or New Mexico border? Would we need sewage pipelines to California and the Great Lakes?

9. Just where would everybody go in a hurricane? Or a tornado? Or a flood? Actually, how would we keep the mega-mega city and all those asphalt streets from flooding during a spring time shower? Hey, where would we get all the asphalt for that city landscape, anyway?

10. And sometimes strange things just happen in a mega-mega city. Over the last number of years, Texas has been developing sinkholes. That brings us back to National Geographic and a story about a 600-wide sinkhole. How wide at the base is the Empire State Building again? Isn't Yankee Stadium about the size of that sinkhole? Not to be overly macabre or anything, but where exactly would the people of the mega-mega city be buried? And if 195 countries were crammed into the mega-mega city of Texas, how many countries would you have to cross before saying goodbye to your relatives? Actually, how would the living residents of 195 countries get along? Would you need a visa to take out the garbage?

The absurdities as one can see pile up. If any reader can think of other problems with 9 billion people in an area the size of Texas, feel free to add them in comments. To be honest, I don't know how much longer the Earth's population can continue to grow. But whatever carrying capacity the entire world might have for a human population with the kind of technology and affluence generally found in the west, that capacity was probably passed some time ago.

Many in the West believe technology can always find a way to keep the world population growing. Many of these same believers once talked about hover cars and fusion being just around the corner. But the task of dealing with an ever larger population is becoming more complex, and complexity carries with it a risk that is becoming more and more difficult to ignore.

Pessimistic experts have been wrong about population for decades. I hope they continue to be wrong. But the odds are not good. Actually, if the pessimists ever turn out to be right, we're going to need optimists, lots and lots of them in the times that follow.

Thanks to Republicans, U.S. Leadership Is Eroding

China continues to make smart economic moves while the U.S., even with a Democratic president, continues to dither. In other posts I have discussed some of China's problems, including human rights failings, corruption, pollution and its growing nationalism. But, for twenty years, China has been making savvy economic moves that go beyond the cheap labor it supplies for the production of many products that once were produced elsewhere, including in the United States.

No one can argue that China's acquisition of oil has been one of its top priorities. The rise of China's economy is one of the reasons oil went up to $147/barrel in the summer of 2008. But China is also focusing on alternative energy, so much so that it is leading in areas where the U.S., by all rights, should be dominant. We are the inventor nation but we are no longer the industrial superpower we once were. For pennies on the dollar, we have been selling our ingenuity to the Chinese and others.

And it continues. The price of alternative energy is falling while the cost of producing fossil fuels is getting more expensive. Include the cost of pollution and climate change and the real cost of fossil fuels has been prohibitive for the last three decades. But facts hardly get in the way of know-nothing Republicans. Here's a story from Arizona:

Arizona was one of the healthy energy states, with a requirement for 15% renewable energy by 2025. But now a Republican state representative in the Arizona state legislature is challenging the right of the Arizona Corporation Commission to set a requirement that utilities add more renewable energy, with a bill that would strip them of the responsibility.

(snip)

The legislation the state lawmaker Carl Seel introduced is the next step in an anti-renewable energy campaign mounted by the conservative think tank; the Goldwater Institute, on behalf of several customers of the state’s largest utility, and is aimed at overturning the ruling on renewable energy.

Keep in mind that Republican policies have little to do with free enterprise. They love their no-bid contracts, monopolies, cartels and cronyism too much to practice what they preach. In reality, neither the Chinese nor Americans are practicing anything like true free markets. But there is thinking behind the moves the Chinese are making as opposed to the bizarre notions of Republicans and, unfortunately, a few Democrats. Although the Chinese will have to install conventional power plants for some time to come, they clearly have a long-term vision of not only using alternative energy but being the leading builder of such equipment:

Renewable energy industries in China are adding jobs rapidly, reaching 1.12 million in 2008 and climbing by 100,000 a year, according to the government-backed Chinese Renewable Energy Industries Association.

Yet renewable energy may be doing more for China's economy than for the environment. China is on track to pass the United States in total power generation in 2012 — and most of the added capacity will be from coal, which is forecast to represent two-thirds of China's capacity in 2020.

As China seeks to dominate energy-equipment exports, it has the advantage of being the world's largest market for power equipment. The government spends heavily to upgrade the electricity grid, committing

$45 billion in 2009 alone. China's top leaders are focused on energy policy: On Jan. 27, the government announced the creation of a National Energy Commission composed of Cabinet ministers as a "superministry" led by Prime Minister Wen Jiabao.

Regulators have set mandates for power generation companies to use more renewable energy. Generous subsidies for consumers to install their own solar panels or solar water heaters have produced flurries of activity on rooftops across China.

China's biggest advantage might be its domestic demand for electricity, which is rising 15 percent a year. To meet demand in the coming decade, according to statistics from the International Energy Agency, China will need to add nearly nine times as much electricity generation capacity as the United States will. As a result, Chinese producers of generating equipment enjoy enormous efficiencies from large-scale production.

There's no guarantee that China's economic growth will continue at its current pace or that China can avoid a number of pitfalls in the next 20 years related to other problems it has. But given the behavior of politicians in Washington and our increasing reliance on China's products as well as its loans, I wouldn't bet against Beijing.

In category after category, U.S. leadership has been eroding for some thirty years. It's ridiculous that some 40% of our economy now depends on financial services that in turn largely depend on little more than our good name. Financing the purchase of fossils fuels from oil producing countries or financing alternative energy equipment built elsewhere only succeeds in killing American jobs. That pattern cannot be sustained.

The American Crisis Deepens

The Supreme Court decision that essentially gives corporations unlimited power through campaign spending is a danger to American democracy and a danger to every citizen. It is no joke.

I was tempted to title this post: The GOP Sells the United States to the Chinese Communist Party. The consequences of unlimited campaign spending by corporations means the person with the most money wins. Since anyone outside the United States can invest in our corporations, it will now be legal for the Chinese, Saudis and Russians to influence American elections. Even Osama bin Laden, if he uses enough corporate shells, can now influence American politics directly.

George W. Bush appointed two corporatist judges to the Supreme Court. If we're not careful, the legacy of the worst president in our nation's history will now be intact.

I expect many posts around the country to focus on today's judicial fiasco. Here's a post from Firedoglake:

If you had any doubt about the corruption that has infected the very bloodstream of American politics, look at today’s ruling from the U.S. Supreme Court. The Court said corporations can spend unlimited amounts to influence the outcome of elections.

(snip)

Teabaggers, do you get it now? You are outraged by your powerlessness. Can you now see the real source of that powerlessness? It is not government. Government has been turned into the handmaiden of the corporate oligarchs.

I’m compelled to repeat something else: I’m a fan of entrepreneurship and responsible capitalism. But it’s not the so-called heavy hand of government that is the enemy. It’s the corporate monopolists.

Here's a post from Kevin Drum who almost always has some of the most thoughtful posts:

I confess that I've become more sensitive to First Amendment concerns about the McCain-Feingold campaign finance law over the years. But treating corporations as mere "associations of citizens"? Color me skeptical. That's just not what they are, and this is a decision that we're probably going to live to regret. After all, it's not as if lack of ability for corporations to influence the political process has historically been a major problem in the United States.

I've been saying it for some time now and I'll say it again: something has to change.

Obama, China and the American Press

George W. Bush left the White House a failure. He also left the nation in free fall. There are many things I wish Obama would do and many things I wish he would do faster. But he faces problems. First, he faces an obstructionist Republican Party. Even within his own party, there are moderates who have fallen behind in their understanding of how much things have changed and how much we need to do.

Day after day, Obama must deal on the one hand with millions of Americans who are angry at what happened in the last eight years and on the other with millions who are angry period. He also faces an American press that is barely in touch with what is going on out in the real world.

The truth is that the United States has not faced so many problems since World War Two. Another truth is that many of those problems are of our own making or have worsened from years of neglect. Bush's go-it-alone foreign policy was based on fantasy but it was pursued for eight years and cannot be undone in a matter of months, though Obama has done much to repair the damage done by Bush.

I was disgusted this week that so many news sources spent more time talking about Sarah Palin and her book than Obama's trip to Asia. Sarah Palin knows nothing and has accomplished nothing but her tour trumped Obama's tour.

Now I realize that for the last twenty years news stories on foreign policy trips usually start out with the phrase, "Although producing no breakthroughs on key issues...." But talking eventually does lead to results and not talking usually leads to deterioration in relations. The reality is that private talks always clear away misunderstandings and facilitate future cooperation. The above quote, by the way, is from an AP story about our ambassador to China, a reasonably rational Republican. Here's what Jon Huntsman said:

"I attended all those meetings that President Obama had with Hu Jintao and Wen Jiabao," Huntsman said, referring to the Chinese president and premier.

"I've got to say some of the reporting I saw afterward was off the mark. I saw sweeping comments about things that apparently weren't talked about, when they were discussed in great detail in the meeting."

Although the Chinese stagecraft their news, one important aspect of Obama's visit is that it was the top story in China. Obama's visit was taken seriously by the Chinese even if many American journalists preferred to minimize what happened or prefer to say that Obama isn't effectively dealing with China, whatever that means.

I have no illusions about China. It is still an empire, it has a poor human rights record, it is nationalistic (one shouldn't ignore the symbolism of its pageants at the last Olympics), it is often plagued by corruption and it is still an autocratic system even if it is more benign than it once was. In addition, China is sometimes paternalistic toward its minorities, sometimes indifferent but there is never equal footing for minorities. At the end of the day, however, through deliberate policies, blunders and inattention, we are tied to China as never before. For one thing, they own a significant portion of our debt. And they make a great number of our goods, often through contracts with American manufacturing companies.

But at the end of the day, the United States is still the most powerful country in the world. Some quick graphs can be found at the BBC comparing the U.S. and China. Note, for example, that U.S. military spending is more than 5 times what China spends.

James Fallows at The Atlantic has a series of posts on Obama's visit. In one post, he talks about Chris Matthews who seems too often to follow the mood of grumpy pundits rather than finding out what actually happened:

...people have sent clips of today's talk show by my friend and former colleague Chris Matthews, which went in super-heavy for the "Obama humiliated in Asia" line. With all good will to Chris, I fear that this show today, notably the comments by the Washington Post's reporter from the Asia trip, will be the new symbol of exactly the kind of instant-analysis that, in my view, fundamentally misrepresents what happened on the trip.

In another post, Fallows writes:

...the before-and-after analyses from a private client newsletter by Damien Ma, Divya Reddy, and Nicholas Consonery of the Eurasia Group, reinforcing the idea that what actually happened on the trip was almost exactly what informed observers expected to happen, and not some humiliating disappointment.

It shouldn't be overlooked that the operative word in Fallows post is: informed.

To be honest, Obama could do a better job of courting the press—one of the many books of Roosevelt's press conferences would make great night reading. But the press has a responsibility to get out of the 24 hours news cycle and actually do news. Our country is sagging in large part because too many people simply don't understand what's going on. Let's face it, it's easier and cheaper to follow Sarah Palin around than to keep up on foreign policy and do some behind the scenes reporting.

It's ironic that there are writers who write because they want to better understand the world around them. It takes attention, a bit of reading and experience, lots and lots of practice and a bit of thought to use writing as an analytic tool. When I was younger I thought I noticed journalists that operated that way. Certainly Edward R. Murrow was like that.

Murrow was probably the last major journalist who could effectively analyze and explain things to Americans; he did an amazing job during the crises of the 1930s and 40s. We have journalists who can do that but they're not always in a position to be heard. Even very good journalists like Rachel Maddow can sometimes get distracted putting out fires instead of explaining the world, though I'm happy to see that she's getting better at that on her program. (I'm not a journalist, by the way, though I've been writing for forty years and have been working of late to add more tools to my utility box.)

I'm going to borrow from Fallows one more time but it's just a quote from Obama—from his opening statement at the controversial Shanghai Town Meeting:

...America will always speak out for these core principles around the world. We do not seek to impose any system of government on any other nation, but we also don't believe that the principles that we stand for are unique to our nation. These freedoms of expression and worship -- of access to information and political participation -- we believe are universal rights. They should be available to all people, including ethnic and religious minorities -- whether they are in the United States, China, or any nation. Indeed, it is that respect for universal rights that guides America's openness to other countries; our respect for different cultures; our commitment to international law; and our faith in the future.

Contrary to the opinions of the usual pundits, this does not sound like a "humiliated" or "humbled" president. We are in interesting times. I write often of the American Crisis. That crisis did not begin last year with the economic meltdown. It's been building for years. It was blatantly apparent during Hurricane Katrina on multiple levels from the effect it had on oil supplies to the dismal response to fellow Americans in distress.

Like many Democrats, I worry about how Obama is doing. From time to time, he surprises me and I realize, okay, he is paying attention. I'm going to stick my neck out and say maybe there's more to the Asia trip than meets the eye. Consider the following story from Bloomberg:

Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said Chinese growth is likely to be hurt by an absence of consumer demand from trading partners such as the U.S.

“The Chinese, I suspect, will have a bubble of their own to confront,” Gross said...

At the moment, the fates of the United States and China are tied together. China has been hearing conflicting advice from around Asia but they recognize that they and the U.S. have mutual interests. Whether we like it or not, we need each other. Let's see where events lead in the next few months. I'll have more to say.

A Thought Experiment on Global Warming

Hard numbers tend to put people to sleep. But numbers can tell a story. Imagine a warlord of some faraway country who's awakened in the middle of the night and told his enemy has sent 100 soldiers across the border. "You awakened me for a hundred soldiers? Take care of it and don't bother me!" says the warlord before falling back asleep. An hour later, another aide comes in and wakens the warlord to tell him 500 soldiers have crossed the border. "What? Can't my pitiful generals take care of 500 soldiers? Wake me when a real army comes or I'll have your head!" Three hours later a third aide comes in. "How many?" growls the warlord. "One million, sir." The third aide finally has the full attention of the warlord.

The scenario, by the way, has happened in the past. It pretty much happened to Stalin in 1941 when Hitler sent his troops across the border. Stalin first refused to believe the early reports and pretty much panicked hours later when he realized how big the invasion was. Stalin eventually threw the Germans back but without the help of the United States, it is highly probable that Hitler's invasion would have succeeded.

Today many people can't believe global warming is real. One part of the problem is that numbers are clearly putting people to sleep. But another part of the problem—besides coal and petroleum companies with vested interests—is that there are people who can't believe humans can have that much impact on the environment. I find this odd since there are plenty of examples of human impact if one simply takes a good look around. I've seen, for example, large deforested areas that once held logging communities back in the 1930s. Those communities are now ghost towns so old and neglected there isn't much left of them.

My grandmother many years ago showed me any number of areas in Southern California that used to be wetlands before they were drained and turned into large housing developments. It takes willful ignorance to pretend that we haven't had a major impact on biological life. We have driven many species to extinction or near extinction. We have now been over-harvesting the world's oceans for a number of years. But even by the 1960s, the average person ought to have known we were having an impact on fish populations. Why? Because many types of fish people were catching were considerably smaller than the ones caught in the 1920s.

In California, it's almost startling to realize that many of the mining areas famous during the Gold Rush haven't produced significant ore for over a hundred years.

Actually humans have been having an impact for a very long time. The pyramids have been visible from space for thousands of years. Today, from space, one can see smog covering many large areas around the world.

For some reason, many examples of human impact get ignored. So I'm going to suggest a thought experiment that might suggest just how much influences humans have on the earth. Thought experiments are just illustrations and after I present the following thought experiment, I'll add some sensible qualifications.

First, we have to start with some numbers. In 2008, humans consumed at least 474,000,000 terajoules of energy. Other estimates are in the same ballpark but this number comes from various published sources (though it does not include minor sources of energy such as burning firewood). The important thing to know is that 80-90% of the consumed energy has come from burning various kinds of fossil fuels. It's not a quaint metaphor to say we live in the age of oil.

Now there are 6.8 billion people in the world and maybe it's not all that amazing that so many people would produce so many terajoules. But consider this: the atomic bomb that was dropped on Hiroshima in 1945 produced some 60 terajoules of energy. That's a tiny fraction of the energy humans now produce in a year. The largest hydrogen bomb the United States exploded was a bit more than 45,000 terajoules but that's still a very tiny percentage of yearly energy production.

Let's look at this another way. At the height of the Cold War, the U.S. and Soviet Union had in excess of 20,000 nuclear weapons. The yield of the weapons ranged from 1 kiloton up to something like 15-45 megatons of dynamite. If we assume an average size of 100 kilotons, the destructive yield of 20,000 nuclear weapons is 6,000,000 terajoules. That is still less than 2 percent of the energy humans produce and consume in a year.

Now many global warming naysayers say humans don't have enough impact on the climate to affect global warming. So now for the thought experiment. It's actually just the reverse of a thought experiment that was done some thirty years ago. Scientists asked what if 20,000 nuclear weapons were released in a massive all-out nuclear war. The affect on the climate was interesting. It was argued at first that all-out nuclear war would lead to a nuclear winter lasting two years. The reason was diminished sunlight as a result of all the dirt and debris from the explosion thrown up in the air as well as all the smoke from the ensuing fires. However, later calculations showed that the result would only be a kind of nuclear autumn lasting a few months. Nuclear war of such size of course would create an unimaginable level of destruction. Notice that exploding 20,000 nuclear weapons would not raise the temperature of the earth in the ensuing days (at least not at first). That's because most of the heat would be radiated into space but the debris would have the effect of blocking out sunlight.

As it happens, heat is also supposed to escape into space when we release all that heat from burning fossil fuels. To a large extent that's exactly what happens even now. Except that greenhouse gases are trapping a certain percentage of escaping heat and reflecting it back to earth.

There is a possible though far-fetched way that humans could accelerate global warming with only a tiny percentage of our annual energy production—not that anybody in their right mind would do it. But we're talking about a thought experiment. If 20,000 nuclear weapons were sent to Greenland for use in late spring or summer, a geologist with knowledge of glaciers and the specific underlying drainage basins working together with a demolition expert could probably figure out where to explode the weapons to release somewhere around a third of the ice pack. This would be sufficient to raise the world's sea levels by seven feet. Even if the released radiation is discounted—which of course it can't—the result of the higher sea level alone would be devasting within days, if not hours. In addition, there would be very little in the way of fires and most of the material that would enter the atmosphere would be water. It is probable that the remaining ice would melt at an accelerated rate thus eventually raising sea levels even further.

Now this is just a thought experiment to show how just a tiny fraction of the energy we use every year could be channeled so that the physically world would dramatically change. Just as no one in their right mind would launch an all-out nuclear war, no one in their right mind would send 20,000 nuclear weapons to melt a third of Greenland ice sheet. When we understand the possible consequences of our actions, there are certain things human beings do not do. Let me repeat that: there are certain things human beings do not do.

Every year the evidence of global warming grows stronger, not weaker. When any corporation talks about cleaning up the environment, find out if they're simply exporting their excess carbon dioxide or even their pollution to a third world country. Most global warming naysayers are funded by coal companies and the oil corporations. These are the same people who have taken years and years to clean up their own pollution in other areas involving their operations. When there are oil spills, the first response of many oil companies is to call the lawyers before they call the clean-up specialists. The climate doesn't pay much attention to lawyers. If humans do certain things, there are consequences. That's just the way it is. It is the early 21st century and it's time for all of us to bite off some responsibility. It begins by agreeing there are certain things human being do not do.

Curious Swift Boat Article about Cato Economist

If the United States had spent the last thirty years converting to alternative energy and maximizing energy efficiency, we would now be in excellent shape. But a majority of American voters in 1980 decided Ronald Reagan and his emphasis on deregulation and laissez faire economics were the answer to our problems.

Of course there were many contradictions in Reagan's policies. As an example, Reagan pretty much ignored enforcement of antitrust laws, which in turn dampened competition. As a result, we saw a feeding frenzy of mergers and monopolistic behavior in the 1980s. Needless to say, a number of companies "too big to fail" were created (though more of that came later).

Of course Reagan's policies could never change the fundamental fact that America's oil reserves are finite. Despite a boost from Alaska's North Slope, oil production in the United States continued to fall and these days we now pay an onerous premium for foreign oil. Somehow it rarely gets mentioned that 99% of our taxes stay at home but the same can't be said of our payments to foreign oil producers.

Some Republicans who ought to know better suggest we ought to "drill, baby, drill." It's now 2009 and we have considerably less oil than in the early 1970s when our domestic oil output reached its maximum. We can't significantly reduce our payments to foreign oil producers by trying to increase our own oil production. Even if it were technically possible to increase our production significantly, that would simply delay for a few years a dramatic increase in payments to those same foreign oil companies.

The only way we can ensure our future energy security is to launch a massive number of solar and wind projects on a scale somewhat comparable to the number of planes and ships we built during World War II. We can certainly manage in ten to twenty years what we managed during five years of wartime.

It's pathetic that we insist on developing tar sands when most wind turbines now being manufactured provide far more energy on initial energy invested than do tar sands. Not only are Republicans insisting on extending the horse and buggy age, but the horse and buggies they're protecting are expensive. In fact, oil continues to have a double cost: the expensive cost we pay today, and the expensive cost we'll be paying in the years ahead to clean up the mess left behind.

In 2009, conservatism is dead as far as having any significantly useful ideas but Republicans still have a noise machine and there are still millions of Americans with short memories. Swift Boaters like Jerome Corsi take advantage of people who either don't (or can't) do their homework or who want very much to engage in wishful thinking.

On the conservative site, World Net Daily , Corsi has an article about Julian Simon, an economist at Cato (nowadays that's not much of a recommendation). I'm just going to quote two paragraphs which give the gist of what passes for serious thinking:

Oil remains so abundant that it is unlikely the world will ever run out, Jerome Corsi's Red Alert reports.

(snip)

"Simon's energy resource analysis essentially maintains that we will be running automobiles with nuclear batteries long before we run out of oil," Corsi wrote. "Another point consistent with Simon's analysis is that technologies have been developed permitting the clean burning of coal, while coal resources in the United States yet remain among the most abundant on the earth. In the final analysis, nuclear power is the final inexhaustible energy resource.

Right-wing thinking never takes long to contradict itself. Oil will last forever. Uh, if it doesn't, we'll have nuclear batteries.

Needless to say, we need real energy policies, not fantasies.

Making Sure Green Technology Is Green

We already know that it's becoming harder and harder to satisfy the world's thirst for oil. In addition, with the rise of China's economy, the world is rapidly becoming aware that resources for all the new technology being developed, including some parts of green technology, may not be adequate to meet demand in the coming years. Today's technology often requires rare earth metals that are not easy to come by. New sources of such metals, at a reasonable cost, are going to be needed. In some cases, old sources need to be revived.

Now in this post I'm pursuing a slightly odd story that requires a little background. Here's a story from last month in The New York Times:

Chinese officials said on Thursday that they would not entirely ban exports of two minerals vital to manufacturing hybrid cars, cellphones, large wind turbines, missiles and computer monitors, although they would tightly regulate production.

China produces more than 99 percent of the world’s supply of dysprosium and terbium, two rare minerals essential to recent breakthroughs in high-technology industries.

Although it's good that China is not going to tighten restrictions as much as originally thought, it should be noted that they are using their hard cash to acquire all kinds of resources throughout the world, including shares in various mines and oil facilities. The United States, Europe and other countries can hardly afford to be caught flat-footed. Fortunately, for the United States, there is an economically viable source for some of the rare minerals that are needed. Here's a story in the Los Angeles Times about a mine in California:

Fear of a shortage of rare-earth metals used in high-tech military and industrial products has spawned global efforts to reopen abandoned mines, including the formidable Mountain Pass Mine in California's Mojave Desert.

(snip)

...Molycorp Minerals in Colorado, has just begun a two-year effort to restore Mountain Pass to its former role as a leading global producer. Those plans were given a boost recently amid fears that China was poised to ban exports of some of the scarcer rare-earth metals and to sharply limit shipments of others.

Effort to restore? Uh-oh. In such cases, it's best to read the rest of the article. Down further we learn that Mountain Pass Mine was closed in 2002 for environmental reasons. Before we go further, let's stop and think for a moment. If 99% of some of these minerals are mined in China and the price on those minerals is acceptable to various corporations, what are the odds that China's famous mine has environmental problems as well? And what are the odds that at least some companies who buy from the Chinese are aware that the Chinese mine has environmental problems? Ah, but we still, for the most part, live in an era of laissez-faire capitalism. Anything goes.

Fortunately, there are people concerned about the environment in the U.S. (and more so in some states). So what was the problem with Mountain Pass? Here's an informative article from David Danelski in February 2009:

...while the mine was producing vital elements, it also was polluting the soil and groundwater.

Wastewater from processing the rare earths was pumped to unlined evaporation ponds, where nitrates and other salts leached into underground water on both sides of Mountain Pass...

(snip)

Unocal owned the mine from 1976 to 2005. In the 1980s, the company began piping wastewater as far as 14 miles to evaporation ponds on or near Ivanpah Dry Lake, east of Interstate 15 near Nevada.

The pipeline repeatedly ruptured during cleaning operations to remove mineral deposits called scale. The scale is radioactive because of the presence of thorium and radium, which occur naturally in the rare earth ore.

(snip)

In all, about 600,000 gallons of radiological and other hazardous waste flowed onto the desert floor, according to federal authorities.

Again, visualize what is probably happening at that mine in China! But, hey, their prices are good. Now it appears that the previous owner Unocal and the new owners of Mountain Pass decided to clean up the mining operation. They have passed environmental inspections. They have made various improvements, etc., etc. This is all to the good. Rare earth metals have a role to play in green technology and it's that much less embarrassment if Mountain Pass is cleaned up.

But I keep thinking of that radioactive pipeline. Obviously it has to be taken apart and disposed of and that apparently is happening. Pipelines interest me because I had a great-uncle who built a natural gas pipeline from Wichita, Kansas to Chicago back some eighty years ago. A lot of Eurasia politics now revolve around pipelines running from Western Europe to Russia and from Russia to China and along many other routes as well. Who cleans those pipelines? Who cleans the spills? Anyone?

If you're still with me, bear with me a little longer. I know, it's an odd subject today! But I also keep thinking of the British Petroleum pipeline in Alaska that became a major polluter along its route because of improper maintenance. At the time, the news was a bit ironic since the then president of British Petroleum, what's his name, had a major reputation for being green. The green tag turned out to be more hype that reality.

Of course those of us who have noticed ads by the oil companies since the first oil shortages of the 70s have always been skeptical of their claims of how green and environmentally concerned they are. Sometimes, there's some truth to their claims, but most times whatever little good oil companies do for the environment has been more than offset by so many other things they do that are not good. The Exxon Valdez obviously comes to mind. Even if global warming were not a concern, pollution by companies dealing with fossil fuels has been a reality long before Rachel Carson's Silent Spring.

The oil companies of course are not alone. Over this past weekend, ads have been appearing for Clean Coal. As it happens, there currently is no such thing as clean coal. If one tweaks definitions and ignores how much cleaner natural gas and even light sweet crude are (not to mention solar and wind energy), there is such a thing as cleaner coal—barely. And there is a potential, at considerable expense, for perhaps sequestering the carbon dioxide and other pollutants put out by coal. But coal is the dirtiest fuel there is. Here's what Greenpeace says:

“Clean coal” is the industry’s attempt to “clean up” its dirty image – the industry’s greenwash buzzword. It is not a new type of coal.

“Clean coal” technology (CCT) refers to technologies intended to reduce pollution. But no coal-fired power plants are truly ‘clean’.

“Clean coal” methods only move pollutants from one waste stream to another which are then still released into the environment. Any time coal is burnt, contaminants are released and they have to go somewhere. They can be released via the fly ash, the gaseous air emissions, water outflow or the ash left at the bottom after burning. Ultimately, they still end up polluting the environment.

The article continues on making other points against clean coal. Ah, yes, Greenpeace is that leftist whale-hugging environmental group. So, what does a moderate-conservative magazine like Time magazine say?

If you paid any attention to last year's Presidential campaign, you'll remember ads touting the benefits of "clean coal" power, sponsored by the industry group American Coalition for Clean Coal Electricity. (The ads featured lumps of coal plugged into an electrical cord.) Designed in part to respond to the growing green campaign against coal power — which accounts for about 30% of U.S. carbon emissions — the ads promised high-tech and eventually carbon-free power, emphasizing coal's low cost compared to alternatives, its abundance in America and its cleanliness.

The "clean coal" campaign was always more PR than reality — currently there's no economical way to capture and sequester carbon emissions from coal, and many experts doubt there ever will be. But now the idea of clean coal might be truly dead, buried beneath the 1.1 billion gallons of water mixed with toxic coal ash that on Dec. 22 burst through a dike next to the Kingston coal plant in the Tennessee Valley and blanketed several hundred acres of land, destroying nearby houses. The accident — which released 100 times more waste than the Exxon Valdez disaster — has polluted the waterways of Harriman, Tenn., with potentially dangerous levels of toxic metals like arsenic and mercury, and left much of the town uninhabitable.

I guess the coal industry didn't place enough ads in Time. I shouldn't be sarcastic though. Coal has a friend in oil and it might not be much to ask for Exxon or Aramco to buy a major share of Time Warner.

I started this post by mentioning China. When people talk about limiting coal by turning to alternative energy, the cynics point to China. How will China's use of coal be limited? The statistics, in fact, are grim. According to Worldwatch, China's consumption of coal has more than doubled in the last nine years and now exceeds that of the United States.

I suspect, however, that the more the U.S. switches to green technology, the more China and other developing economies will follow. There are signs that this may already be happening. Unlike many members of Congress, the Chinese leadership seems aware that the age of abundant fossil fuels is coming to an end sooner than expected. We will continue to use fossil fuels for some years to come. It's unavoidable because of the time it will take to build an infrastructure based on alternative energies. But, if we're smart, healthy change will come, though not without troubles that we have already set in motion. If we continue to blunder and put off what needs to be done, we will undoubtedly face catastrophes we cannot fully appreciate at this time.

In the end, much will depends on the American people and how much they're truly paying attention. For now, I keep thinking of those pipelines and how much work it takes to keep them functional. I saw a program recently on the Monterey Aquarium in California. The aquarium brings in sea water by pipeline from Monterey Bay. It takes work to keep things from growing at the entrance to the pipeline as well as inside its walls. Is this relevant? It depends. The world's population exceeds 6.6 billion people and water is another resource that is getting scarce as populations increase and as many areas of the world turn into desert from overuse. Where will future water come from? From the sea through desalination?

In California, such a desalination facility has opened in Carlsbad, a city a few miles north of San Diego. Such facilities will need pipelines and they too will have to take environmental concerns into consideration if we are to avoid even further problems. Even green technology is going to require careful environmental thinking—but the promise of green technology is real.

And the alternative, as we are finding, has probably already set in motion catastrophes that will take enormous resilience and resourcefulness to overcome. It is only the year 2009 and the tasks for the rest of the 21st century are already difficult. Today, the task immediately at hand is to avoid making the problems insurmountable. A small step in that direction is making sure green technology is green.

Paul Krugman and the Politics of Reform

Before I get to Krugman, I've been thinking about the person who shouted, "You lie!" to President Obama when he was giving his health care speech last night. For a moment, I assumed the person calling out was probably in the gallery above the members of Congress. I was wrong. A Republican representative from South Carolina did the shouting. It's apparent that 90% of the Republicans in Congress these days have nothing to contribute on any number of fronts concerning the problems our nation is facing.

By the way, it's generally accepted that if you like what the president is saying, you applaud and maybe cheer. If you don't like what he says, you sit quietly and glower. Republicans know this and the representative was dealt with, even if people like Limbaugh are too ignorant and authoritarian to understand.

I don't know how relevant it is, but it's been pointed out that the conservative representative who did the shouting is from a safe district. Safe? As in what? Is ignorance now safe? Is being politically safe supposed to be a good thing? The problems facing our nation face everyone, not just people outside of 'safe' districts. Republicans unable to face our problems only aggravate those problems.

In a roundabout way this is all relevant to Krugman's long magazine article in The New York Times; in a sense, Krugman's point is that the old economics was never as sound as many had led themselves to believe and the proof was the failure to foresee last year's meltdown of the economy. Here's an excerpt:

...in the wake of the crisis, the fault lines in the economics profession have yawned wider than ever. [Economist Robert] Lucas says the Obama administration’s stimulus plans are “schlock economics,” and his Chicago colleague John Cochrane says they’re based on discredited “fairy tales.” In response, Brad DeLong of the University of California, Berkeley, writes of the “intellectual collapse” of the Chicago School, and I myself have written that comments from Chicago economists are the product of a Dark Age of macroeconomics in which hard-won knowledge has been forgotten.

What happened to the economics profession? And where does it go from here?

As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn’t sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets, this time gussied up with fancy equations.

I remember an article from two to four years ago that discussed how certain types of fancy equations didn't last very long in the investment sector. Nevertheless, for more than a decade a class of fancy equations would sometimes prove useful for around a year or two and were lucrative for big firms like Goldman Sachs. Eventually, though, the equations begin to break down, partly because competitors can figure out the same formula, thus taking a slice of the pie until there isn't much money for anyone to make; sometimes conditions simply change until the formulas break down. So the financial whizzes are busy all the time coming up with new formulas. Some formulas work well. Some don't. But the general trend in the last few years is that the fancy equations work for shorter and shorter periods of time. If that wasn't a danger signal, I don't know what is. We're facing several dangers but one of the dangers that these fancy formulas point to is a growing complexity to the world economy that no one seems to fully understand. One way to get the world economy to be a little less complex is to rein in people like Goldman Sachs who have so much activity going on that is hidden from the public. The sliced and diced mortgage derivatives were a classic example of increased complexity that was dangerous and unnecessary. But that requires reform.

So that brings us to the health care issue which is simply just one of the pressing issues that are being handled at the moment. As I've been watching developments over the past few months, my biggest concern is not how much health care the government can somehow bring to the American people, but whether we can truly have reform in the first place. So far, I don't see all that much reform coming out of Washington on any front. I see adjustments. But adjustments are not reforms. We can adjust goal posts, change the uniforms, get better clocks but that's not reform. In many ways, the same games are still being played. It's business as usual. If too many blue Democrats, or weather vane Democrats fail to see the need for reform, we have a problem. It's a problem the progressives might overcome, if they understand how badly we need reform. But if there are too many compromises and the 'reforms' are too watered down, the next Republican president will be free to push the reforms aside. In some respects, that's what George W. Bush did on a number of policy fronts.

In the end, even the Republicans have to come to grips with the fact that their economic policies of the last thirty years have fundamentally failed. We can no longer count on cheap energy and we can no longer afford to believe that the Saudis, Japanese and Chinese, along with others, will prop up our economy looking for safe havens for their dollars.

Health care will make sense only if everyone has to have health care and if every business is somehow involved with providing health care. Businesses need to be put on an even playing field. At the same time, however, health care will still remain an expense for corporations so we need to make sure jobs aren't outsourced as a way of avoiding health care payments. There are a number of ways to deal with both problems, but the only solution that I know of that will work for sure is national health insurance that simply bypasses corporations. Insurance companies might still have a role but that route is only likely to work if we have something that's set up like medicare. So the health care debate, while not a final view of things to come, may say a lot about reform across a wide spectrum during the next couple of years.

If the American people think turning to Republicans is the way to deal with our nation's problems, the United States will probably begin an economic slide that will be difficult to stop. Actually, we've been sliding for most of the last thirty years.

The curious thing about Krugman's study of the current state of macroeconomic theory is that he notes most of the neoclassical economists come from the Midwest. Let's see, Republican governors appoint college heads or create an environment leading to more conservative college heads. Those who lead colleges start looking for economists who fit their own economic views or at least economists who seem to be in their ballpark. Suddenly we have too many economists quoted by journalists who scratch around Washington in places that find jobs for those economists who leave the Midwest: the Heritage Foundation, the Cato Institute, etc. Oh, and as Krugman noted, the Hoover Institute. Hoover was a nice guy who used classical economics to deal with the Great Depression. As my grandfathers taught me, one Republican and one Democrat, that didn't work out too well.

Lack of Foresight and Imagination in Washington

First things first: let's stop pretending that American business can still think about the future ten to twenty years down the road. One of the ironies in our era is that the oil industry is one of the few areas of the business sector that can think ten years down the road, at least sometimes.

If there is to be change, it has to come from our government. Capitalism, free enterprise, competition and all of that will continue to play a role for many years to come but our current economic structure simply cannot deal with problems that have a long timeline such as global warming, declining fossil fuel production and the long neglected problem of world population.

To deal with problems that will play out over the next decade or two, the American government has to get involved. Unfortunately, our government has been ineffective for the last thirty years. There is some hope that the Obama Administration can renew our capacity to make things happen again. Sometimes I feel that Obama is a little behind the growing understanding of the American public but, for the most part, it's a truism that the president cannot move too far out in front of public opinion. Public opinion, of course, has very little to do these days with the American people. Public opinion is largely a fiction of the media, particularly in Washington and New York.

In the last post I wrote how the Chinese seem to have an energy policy while we continue to pretend that Wall Street experts are on top of things. We have been deluding ourselves for thirty years that free enterprise someday, somewhere, in some magical manner, will somehow take care of our energy needs and invent dreamosol, the universal energy solver. The nation that for a hundred years showed what practical men and women can do is now engaging in fantasy.

Of course some people are beginning to notice that we just may have a problem. Tern Norris and Jesse Jenkins of the San Francisco Chronicle have some very useful figures that may startle business people who like to crunch numbers:

As Congress debates climate and energy legislation, Asian challengers are moving rapidly to win the clean-energy race. China alone is reportedly investing $440 billion to $660 billion in its clean-energy industries over 10 years. South Korea is investing a full 2 percent of its gross domestic product in a Green New Deal. And Japan is redoubling incentives for solar, aiming for a 20-fold expansion in installed solar energy by 2020.

In contrast, the United States would invest only about $1.2 billion annually in energy research and development and roughly $10 billion in the clean energy sector as a whole under the Waxman-Markey bill - less than 0.1 percent of U.S. GDP. A group of 34 Nobel laureates recently wrote a letter to President Obama decrying the lack of investment and calling on him to uphold his promise to invest $15 billion annually in clean-energy R&D.

The other guys get it. How is it that we don't?

It's a given that the current generation of Republicans sent to Washington have become useless know-nothings. The thing to keep in mind is that there are also machine Democrats in Congress. 'Machine Democrats' is my catchall phrase for both Democrats from conservative states who get nervous when the status quo is threatened and Democrats in blue states who are put up by various people who know a Republican can't win but who need someone who is likely to continue business as usual. These Democrats are nearly as useless as the Republicans. The only way for our nation to move forward is for more progressive Democrats to be elected. Republicans and machine Democrats are supposedly pro-business. What they actually are is pro-privilege, pro-insider and pro-monopoly. What we need are progressive Democrats who believe that free enterprise and real competition is important while also believing that capitalism needs to work for people and not against people. Until that happens, the economy and power of the United States will continue on what is obviously becoming a downward spiral.

Energy: China and U.S. Take Different Approaches

The Chinese seem to get it. It will take energy to convert to alternative energy. The Chinese are aggressively protecting their conventional energy supplies. The U.S., on the other hand, is largely just winging it without thinking through what needs to be done.

As one example we're still acting as if ethanol will be a major factor in alternative energy. Ethanol will be a factor in places but it's hardly a major solution. We simply burn too much fossil fuel to make ethanol. And the return on energy input is still very poor.

If anybody ought to be for ethanol, it's George Monbiot of The Guardian. But he writes:

The EPA has to decide whether or not to allow more ethanol to be blended with gasoline. At the moment the limit for ordinary motor gas (petrol) is 10%. The agency is inclined to raise this to 15%. The Alliance of Automobile Manufacturers is trying to prevent or postpone it. I'm with the car makers, though not for the reasons they cite.... Since 2004 I've been banging on about the impact of biofuels on the environment and global food supplies, and I've been horribly vindicated. In 2008 the expansion of biofuel production was directly responsible for the decline in global food stocks, which caused grain prices to rise, catalysing famines in many parts of the world.

(snip)

In almost all cases, biofuels made from grain or oil crops create more greenhouse emissions than petroleum. This is partly because they lead to an expansion in total crop production, which means that forests must be cut down, unploughed pastures must be tilled and wetlands must be drained to accommodate it. The carbon stored in both the vegetation and the soil is released and oxidised.

(snip)

But while other countries are starting to re-assess their biofuel programmes, the US is still ploughing ahead.

China on the other hand isn't doing much with corn ethanol. It's investing in different countries to grow biodiesel. Here's a story on China's strategy:

China for example, driven by the projected energy demand of more than a billion increasingly affluent people and the reality of (financial, technological and geological) constraints to future crude oil production has embarked on elaborate biofuels and renewable energy development programs.

The country has acquired on long leases, vast tracts of land for cultivation of biodiesel feedstock: a record 2.8 million hectares in the Congo for oil palm and 2 million in Zambia for jatropha among others.

Now there are things I don't like about the Chinese strategy. I suspect, for example, that countries growing biodiesel for China may find their soil depleted in twenty or thirty years and then what? China will have gotten it's money back on the investment while protecting itself as the world transitions towards other alternative energy forms. Of course the other issue is geopolitical: China is going after countries at the equator with high sun concentration. This could mean something of a monopoly for China (and maybe a new form of colonialism) while everyone else tries to recover from the current economic mess. But it's a clear sign that China recognizes the energy problem facing the world. There are two part parts to the problem: The need for conventional energy sources and the need to use those energy sources to fund the infrastructure and transition to alternative energies. China is working on both parts (see the second half of the above article).

And the U.S.? Well, here's another example of wasting time. Energy Secretary Chu wanted to cut funding for hydrogen research but Congress wants to restore it. Here's the story from the New York Times:

Congress appears close to restoring the $100 million in funding for hydrogen research that Steven Chu, the energy secretary, had cut from his budget in May.

The House of Representatives voted 320-97 last Friday to approve $26.9 billion for the Energy Department, including $153 million for hydrogen and fuel cells in the Energy Efficiency and Renewable Energy program, plus $40.45 million for hydrogen from coal.

Notice the last three words: hydrogen from coal. It's simply a waste of time. It takes energy to create hydrogen. Creating hydrogen from coal does nothing for our energy future. I'm sure the coal companies love it and I'm sure politicians from coal producing states love it. And I'm sure the Chinese are shaking their heads and chuckling at our increasing stupidity. There is probably a future for hydrogen but only after we start creating true alternative energy. Hydrogen technology does not, in no manner or form, create surplus energy. Some day hydrogen may become a convenient carrier of energy but that's all. We don't get energy from power lines but power lines can carry energy from coal plants and gas plants as well as from hydroelectric dams, wind turbines and solar cells. Hydrogen would serve a similar function.

Okay, last story but it has two parts. The first part is from Platts but I've been reading about the problems of small energy companies for several months:

Small and medium-sized energy companies' ability to raise capital is shrinking as banks consolidate their lending on established customers with large asset bases. (See related chart: Banks' shrinking market optimization ($ billion).)

It's largely small and medium-sized American companies that are having trouble raising loans for energy projects. One place American companies have been working in is Canada but that appears to be dropping from lack of loans. Yes, oil and gas consumption is down. But this puts the Chinese in position to take advantage of market conditions. Here's a story from The Globe and Mail about Chinese involvement in Canada's energy sector:

It's being driven by two or three outlooks on behalf of the Chinese. The first, and most obvious, is energy security. On a comparative basis, relative to the size of their economy, they are not blessed with that many natural resources themselves, so they want to get access themselves to the physical barrels, if possible.

The second thing, which drives the importance to the Chinese, is their own view that the industry is running short of natural resources and so it would be a good long-term investment, in and of itself.

The third thing that is really driving the importance of the Chinese market is the fact that that they've got the money They can finance these deals and, particularly in today's marketplace where raising capital is more difficult than it was a year ago, this ends up being a critical factor in deciding if you're a seller that we want to do business with.

They've got the money. Ouch. The people in Washington and on Wall Street need to get real. For that matter, the know-nothing wing of the Republican Party and the business-as-usual wing of the Democratic Party both need to sit down. If they still exist, it's time for the adults to return to the table. Given the condition the world is in and what the solutions are likely to be, those adults had better have a progressive view of things. We need change and it isn't happening fast enough.