Jun 2 2009

The free market will solve all your problems and save all your sins

Kal @ 02:58

The planet is warming up, there is no debate on that.

People have polluted the planet, there is no question of that.

Should we clean things up and stop polluting as much as we have, probably a pretty good thing.

Is Global Warming caused by human pollution, and to what extent? That, is still up for debate, despite what many people want to say. If you have an open mind and look around you'll find out that a lot of the arguments are not really substantiated. How you react to it is your choice, but like a lot of other things, don't be shoving it down other peoples throats. I do what I can to try and lessen my impact on the planet, it's not what hard core green types would be impressed with, but it's also a lot more than most people do.

In the end some things might have to be legislated by the government, but most things should be handled by a free market economy. Help things get close to break even a lot of people will spend their own money to fill in the rest.

From Alan in an email exchange in response to Pied Piper Tunes - But the tunes may change

Congratulations on your green efforts! Every little bit helps. And, yes, Alan, there is debate, that is true, but from what I can see the folks who think Global Warming is caused by anything other than human pollution are mostly limited to those for whom the truth is too inconvenient.

Alan is a lot more rational than some of the others in that email exchange were, but he is apparently willing to wait around another thirty or forty years for the "free market" to solve the problem before letting some things be legislated by the government. Never mind that we have no time to spend dithering about whether to call the fire department. The house is already burning. According to an article in Nature, International weekly journal of science:

More than 100 countries have adopted a global warming limit of 2 °C or below (relative to pre-industrial levels) as a guiding principle for mitigation efforts to reduce climate change risks, impacts and damages.

... less than half the proven economically recoverable oil, gas and coal reserves can still be emitted up to 2050 to achieve such a goal.

More than 100 countries, seems like the debate is pretty much over. So waiting around for even one year before doing something seems pretty stupid to me. Or maybe the truth is just too inconvenient?



Category: Climate Change | Resource Depletion | Steady-State Economics | Sustainability

May 30 2009

BlogEngine Version 1.5 Upgrade

Kal @ 23:17

I upgraded this site from version 1.4.5 to 1.5 and the theme I was using went poof. This one works but is pretty generic.

Sunday night update -

There are a lot of good themes out there, but I wanted one that looked much like the previous one, so I have now customized a theme called Stardust. It still has a few strange elements, but it is at least semi reasonable.


Category: Rss Basics

May 30 2009

Pied Piper Tunes - But the tunes may change

Kal @ 12:48

This somewhat whimsical drawing of the Pied Piper was sent to me in an email without credit to the artist.20090530 pied pipe I blew it up to 800% in an attempt to read the signature, but when it was big enough to read, the characters were too broken to decipher. I believe the first name is Bill, so thanks Bill, I will give you a link if I find out who you are.

The email itself used this drawing to depict Obama as ruining the good old US of A by his proposals to limit the distance between the masters and the slaves wage slaves. It was a clever, nasty, hit piece circulated under the guise of humor.

There were a couple of good points hidden in there, although the anonymous author missed the problem because of focusing on the relief to poor people aspects.

We'll just print more money so everyone will have enough! But our foreign trading partners said, "Wait a minute. Your dollar isn't worth what it was. You'll have to pay more."

Between Bush and Obama administrations, the financial elites have been bailed out to the tune of something like three trillion dollars. And all the indications are that more trillions are in the works. So yes, the market for US backed securities is drying up and the costs will go up. But it has little to do with the somewhat wimpy energy and social programs proposed by the Obama administration.

Meanwhile - The planet is getting warmer.

Potsdam Institute For Climate Impact Research discussing an article in Nature, International weekly journal of science.

On the way to phasing out emissions: More than 50% reductions needed by 2050 to respect 2°C climate target

The Obama administration has lots of good ideas and lots of good and clever people. This administration would have been a vast improvement over Reagan in that time. That was before the impossibility of perpetual growth became so obvious to so many. But the reality is that "restarting the economy" is not such a great strategy for this time. Instead we need to totally restructure the economy to take account of the newly obvious reality that compound growth for ever is not possible.

A friend responded to the pied piper email as follows:

> the heat is rising out there
The heat is rising in the midwest for the same reason it is rising in Darfur and the Caribbean (a little storm over New Orleans, remember?): Global warming. And getting worse because no American politician has had the guts to take on the coal, oil and car industries. At least Obama understands the problem and is talking about it.
Reagan cozied up to Margaret Thatcher (she had the oil at the time), Bush 1 knocked heads in Kuwait/Iraq, Clinton fought a Republican Congress and Bush / Cheney turned a deaf ear, squandering 8 precious years. Where was Jimmy Carter when we needed him?!
Monetary "wealth" won't be worth much when ice slides down off Greenland and Antarctica, and the Amazon goes poof. Physical ecosystems are what make life possible, and we've been ripping them off for centuries. Soon we're going to pay the piper, and he won't look very much like the character in your cartoon.


Category: Climate Change | Economics | Population | Resource Depletion | Steady-State Economics | Sustainability

May 23 2009

Real Economics - Prosperity Without Growth

Kal @ 11:59
There is a report (136 page pdf) out by the Sustainable Development Commission, a British organization, "is the Government's independent advisory body on sustainable development." prosperity I found the reference in The Oil Drum.

According to the report, the current economic system, based on continuous growth is unsustainable. This is because the planet has limits. Resources, including energy, are exhaustible and because of medium-term environmental imbalances caused by growth will make human life more difficult or even impossible.

Therefore, contrary to all that is being advocated in the present crisis, we must find an economic and social system that should is not based on growth. At this time, prosperity is based on “consumption”, and on “property”. But happiness is not necessarily linked to the possession of material goods. The concept of “prosperity” must be reconsidered.

... Returning the economy to a condition of continual consumption growth is the default assumption of Keynesianism.

… that provide the means for people to flourish, and particularly to participate fully in the life of society, in less materialistic ways. And the chances of extending this behavior across society are negligible without changes in the social structure.

In summary, we are faced with an unavoidable challenge. A limited form of flourishing through material success has kept our economies going for half a century or more. But it is completely unsustainable and is now undermining the conditions for a shared prosperity. This materialistic vision of prosperity has to be dismantled.

... Summary in the review:

Growth is unsustainable – at least in its current form.

De-growth is unstable – at least under present conditions. (rising unemployment, falling competitiveness and a spiral of recession.)

The failure to solve this dilemma is the single biggest threat to sustainability that we face.



Category: Climate Change | Economics | Population | Resource Depletion | Steady-State Economics | Sustainability

May 19 2009

The Price of Being Poor

Kal @ 09:55

Think about it.  This is by Ian Welsh.

Washington Post hits on how much it costs to be poor - the way that the poor are forced to pay more, not less, for virtually everything; if not in money, then in time.

A friend of mine put it most simply.  Poor people spend time to save money.  Well off people spend money to save time.  That’s how you know where you are, assuming you aren’t living beyond your means.

The WP article isn’t bad, but it doesn’t really get the full flavor of poverty.  When you look poor, and if you’re poor long enough you will, you just get treated worse by virtually everyone.  They know you don’t have money, know you don’t have power, and thus know they can push you around, disrespect you or just ignore you.

My favorite story along this line is when I was barely making ends meet by doing odd jobs helping people move, doing yard work and painting houses.  One day after painting a garage, I walk into a bank with the check from the day’s work (this is in the eighties).  I’m disheveled, covered in dried paint, and look awful.  The teller wants to hold the check for two weeks.  I can’t wait that long, I need the money for rent.  I walk out of the bank.

I go back to the rooming house I’m living in. I shower, shave and comb my hair.  Then I go find my last set of good clothes - gray flannels, dress shirt, blazer, tie.  I put them all on, and I head back down to the bank.

Unlike a lot of people who are poor, I haven’t always been poor.  I went to one of the most elite private schools in Canada (ranked second at the time, after Upper Canada College).

I wait in line, and irony of ironies, I get the same teller.

She cashes the check.


But I don’t say anything, because I know she could capriciously change her mind.  I just walk out.

A couple years later, during the same extended period of poverty, I get to the point where I can’t even pretend to be middle or upper class.  And on occasion I get rousted because, while I’m clean, I look pasty, my clothes are threadbare and my glasses are literally taped up.  One time a security guard throws me off the property of a hotel I went into to use a pay phone.  In another case, I get tossed off the University of Ottawa campus: I’m beyond the point where I can fake being a student, even though I’m the right age, and was one just a few years before.

In the last ten years, since I ascended back into the middle class, I’ve never had any such situation come up.

Odd that.

The worst thing about being poor is the way you are treated.  There is no rule more iron, in my experience, that the less you get paid, for example, the worse you will be treated at work.  Clerks in stores treat you worse.  Government bureaucrats can often barely conceal their contempt.  And so on.

The upside, I suppose, is that people show you who they are.  The rare person who treats you exactly the same as they do everyone else is revealed as the shining gem they are.  In particular the friends who stick by you even when you’re down and out show themselves to be real friends, as opposed to those who follow the rule given in so many self-help books to cut off less successful friends, and thus reveal their complete moral bankruptcy to the world.

You learn who you can actually trust, who actually cares about you, and who is actually a decent human being who doesn’t enjoy being able to kick down on someone they figure can’t kick back.

It changes how you see people.  Oddly, before I was poor I thought practically everyone was scum (I was a cynical teenager).  Being poor convinced me that there were some truly good people in the world–people who would help you, be kind to you, or just treat you respectfully, even when there was nothing in it for them.

In ugliness and deprivation, beauty and kindness are much much more obvious.  All the more so, because so few meet this test and pass.


Category: Conventional Economics | Economics | Employment | Guaranteed Wage | Morals | Politics | Recession

May 9 2009

Reality Strikes Again - The time for climate action is now!

Kal @ 20:29

  Potsdam Institute For Climate Impact Research discussing an article in Nature, International weekly journal of science.

On the way to phasing out emissions: More than 50% reductions needed by 2050 to respect 2°C climate target


Illustrative Figure for free use:

Meinshausen_etal_SimpleFigure_big.jpg   Two possible futures: One in which no climate policies are implemented (red), and one with strong action to mitigate emissions (blue). Shown are fossil CO2 emissions (top panel) and corresponding global warming (bottom panel). The shown mitigation pathway limits fossil and land-use related CO2 emissions to 1000 billion tonnes CO2 over the first half of the 21st century with near-zero net emissions thereafter. Greenhouse gas emissions of this pathway in year 2050 are ~70% below 1990 levels. Without climate policies, global warming will cross 2°C by the middle of the century. Strong mitigation actions according to the blue route would limit the risk of exceeding 2°C to 25%.


April 30, 2009 - Less than a quarter of the proven fossil fuel reserves can be burnt and emitted between now and 2050, if global warming is to be limited to two degrees Celsius (2°C), says a new study published in the journal Nature today (1).



Category: Climate Change | Politics | Solar | Steady-State Economics

Apr 25 2009

Graphic Statistics

Kal @ 20:43

I think these are fun. I wonder how accurate they are?  I found these through a long article at the Peak Energy site named The Fat Man, The Population Bomb And The Green Revolution. In it Big Gav is somewhat disparaging about The Limits To Growth projection. However I saw an article just a couple of days ago at The Oil Drum that paints a somewhat different picture: Limits to Growth Model Worth Another Look.




Category: Climate Change | Politics | Population

Mar 13 2009

Dead Banks Walking

Kal @ 20:31

Once again I turn to the straight talking folks at The Institutional Risk Analyst, Stress Test Zombies: Not Too Big Too Fail? Tough Tootsies Little Banks!

Apparently, banks that fail the Supervisory Capital Assessment Program stress test will not be broken up as required by law, but instead given more capital at taxpayer expense.


If you include the subsidy required for the GSEs and AIG, the US Treasury could face a collective funding requirement of $4 trillion through the cycle. Do Ben Bernanke and Tim Geithner really believe that they can sell such a program to the Congress? To put it in perspective, the $250 billion in the Obama Budget for additional TARP funds will not quite cover Citigroup (NYSE:C).


The way you end the need for public subsidy is by resolving these firms via a restructuring and forcing the bond and equity holders of the bank's public parent company to absorb the cost of marking assets to market. If we establish a hard rule regarding solvency and break up rather than recapitalize zombie firms, then we have started to apply a real solution.


Fact is, the Sell Side dealers have leveraged the real economy via OTC derivatives to such a degree that bailing out toxic waste sites like AIG, several large Euroland banks and the world of structured finance could cost trillions of dollars. That is the true cost of the crisis. The only issue is whether we recognize it directly, via a public resolution, or hide the costs via public subsidies and future inflation.


Category: Accounting | Conventional Economics | Economics | Politics

Mar 9 2009

Born Again America - I am my country’s keeper

Kal @ 12:48

By Keith Carradine       

Just a workin’ man without a job
It got shipped off to China via Washington, D.C.
And I know I’m nothin’ special, there are plenty more like me
Just the same
I thought I knew the rules of the game

I stood up for this country that I love
I came back from the desert to a wife and kids to feed
I’m not sayin’ Uncle Sam should give me what I need
My offer stands
I’ll pull my weight you give me half a chance

I went up to a congressman and said to him “you know
Our government is letting people down”
He said he’d need a lot of help to buck the status-quo
I said there was a bunch of us around

I’m a Born Again American, conceived in Liberty
My Bible and the Bill of Rights, my creed’s equality
I’m a Born Again American, my country ‘tis of me
And everyone who shares the dream from sea to shining sea

My brother’s welding chassis at the plant
He’s earning what our granddad did in 1948
While CEOs count bonuses behind the castle gates
How can they see
When all they care about’s the do re mi

It’s getting where there’s nowhere left to turn
Not since the crash of twenty-nine have things been so unfair
So many of our citizens are living in despair
The time has come
To reaffirm that hope’s not just for some

The promise of America’s surrendering to greed
The rule is just look out for number one
But brace yourself ‘cause some of us have sown a different seed
A harvest of the spirit has begun

I’m a Born Again American conceived in liberty
My Bible and The Bill Of Rights
My creed’s equality
A Born Again American, my country ‘tis of me
And everyone who shares the dream from sea to shining sea

It’s clear my country’s soul is on the line
She’s hungering for something that she lost along the way
The principle the framers called upon us to obey
That in this land
The people’s will must have the upper hand

I felt the calling once before and took a sacred vow
And faithful to that vow I have remained
I hear the calling once again, my country needs me now
And to her cause I have been re-ordained

I’m a Born Again American conceived in liberty
My Bible and the Bill Of Rights, all people living free
A Born Again American, my country ‘tis of me
And everyone who shares the dream
From sea to shining sea
And everyone who shares the dream
From sea to shining sea

These are the words that you will hear if you go to the Born Again America web site. I like the song and also the call to action.

Tags: ,

Category: Morals | Politics

Mar 8 2009

Derivatives Revisited

Kal @ 19:50

A couple of days ago I posted a piece, Follow the Money  about the overhang of derivatives and said: "By many accounts there are outstanding over 60 trillion dollars in outstanding Credit Default Swaps and other derivatives." I missed the real number by so much it is embarrassing. Today I saw a N.Y. Times article that gives a much clearer picture.

In recent years, a bewildering variety of derivatives have been developed. Two types that have played a central role in the recent turmoil are mortgage-backed securities, whose value depends on the value of the mortgages, which depends on how many of them are being paid off, and credit default swaps, which are in essence a form of insurance policy, and whose value swings with the fiscal health of the transaction or asset it is written to cover.

The derivatives market today is $531 trillion, up from $106 trillion in 2002 and a relative pittance just two decades ago. Theoretically intended to limit risk and ward off financial problems, the contracts instead have stoked uncertainty and actually spread risk amid doubts about how companies value them.

The contracts allowed financial services firms and corporations to take more complex risks that they might have otherwise avoided — for example, issuing questionable mortgages or excessive corporate debt. The fact that they can be traded in one sense limited risk but also increased the number of parties exposed when problems emerged.

Throughout the 1990s, some argued that derivatives had become so vast, intertwined and inscrutable that they required federal oversight to protect the financial system.

[emphasis mine]

Fortunately, these will not all have to be paid by the taxpayers, both here and abroad. But it seems pretty obvious that it is time for some serious regulation.


Category: Economics | Politics