Author: wrongologist

New OPEC Deal Puts Saudi Arabia On The Sidelines

The new OPEC deal to cut oil output, the Cartel’s first since 2008, gives OPEC what it wanted: higher oil prices. It was difficult for the Cartel to achieve an agreement. Russia, a major oil producer that isn’t even a member of OPEC, brokered a deal between Saudi Arabia and Iran. From Oil Price:

The interventions ahead of Wednesday’s OPEC meeting came…from Putin, Saudi Deputy Crown Prince Mohammed bin Salman and Iran’s Supreme Leader Ayatollah Ali Khamenei and President Hassan Rouhani…According to Reuters, Putin’s role as intermediary between Riyadh and Tehran was pivotal, and is a “testament to the rising influence of Russia in the Middle East since its military intervention in the Syrian civil war just over a year ago.”

Prior OPEC meetings failed to deliver consensus, because nobody wanted to cut production. Tehran argued OPEC should not prevent it from restoring the output lost by years of Western sanctions, but the Saudis wouldn’t agree. The animosity between them didn’t help: Proxy wars in Syria and Yemen have exacerbated decades of tension between the Saudi Sunni kingdom and the Iranian Shi’ite Islamic republic.

The brokering started when Putin met Saudi’s Prince Mohammed on the sidelines of the G20 meeting in China. Both felt they could benefit from cooperating to push oil prices higher, and agreed to work together to cut excess production that had more than halved oil prices since 2014. Lower prices had created large budget deficits for both Russia and Saudi Arabia.

Financial pain made cooperation possible, despite the huge political differences between Russia and Saudi Arabia over the civil war in Syria. But Iran also had to agree. Prince Mohammed had repeatedly demanded that Iran participate in any production cuts. Saudi and Iranian OPEC negotiators had debated the point without compromise for months.

Putin stepped in: He established that the Saudis would shoulder the lion’s share of cuts, as long as Riyadh wasn’t seen as making concessions to Iran. A deal was possible if Iran didn’t celebrate a victory over the Saudis.

Reuters reports that a phone call between Putin and Iranian President Rouhani smoothed the way. After the call, Rouhani and oil minister Bijan Zanganeh went to Iran’s supreme leader for approval. During the meeting, leader Khamenei approved the deal. He also agreed that Iran wouldn’t take a victory lap once the deal was announced.

And so the deal got done. OPEC is trimming output by 1.2m barrels per day (bpd) starting January 1st.

The deal is contingent on securing the agreement of non-OPEC producers to lower production by 600,000m barrels per day. Russia says it will contribute half of that, 300,000 bpd. Iran was allowed to slightly boost its output, while Iraq slightly lowered theirs.

We’ll see if the deal holds, and/or, who cheats.

Pundits like to chalk up winners and losers in this type of deal. Since OPEC now accounts for less than half of all energy output in the world, it is a weakened cartel, dependent on the kindness of outsiders (like Russia) to hold together.

Saudi Arabia looks like the biggest loser. First, it cut production by 500,000 bpd. Second, it has presided over a momentous shift in global power, one that is as stunning as Brexit or Trump’s victory.

Saudi’s capitulation to Russia and Iran ends OPEC’s domination of the world’s energy market. The Saudis also made the US shale oil market more powerful in the global energy market, since US shale will produce more oil whenever oil prices are high. However, Saudi oil remains far cheaper to produce than American shale oil, since it requires far less energy to extract and refine.

Russia emerged as the biggest winner. Its economy did not buckle under the Saudi effort to drive oil prices down via increased production. Putin is now the indispensable power broker in the Middle East, something that was unthinkable even 12 months ago. The Syrian civil war will soon end with Russia winning, Assad staying in power, and Saudi Arabia as the regional loser.

And so, this year truly has seen the death of one world order, along with the birth of another. The US and Saudi now have very little to show for their 50+ year joint effort to dominate the Middle East. The EU looks far from stable as a force in Western Europe.

And Saudi Arabia has just become the third dinosaur to be felled by the asteroid called 2016.

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Are We Facing an Undemocratic Future?

What do you think when Trump appoints so many retired generals to cabinet-level posts in his administration? The positive side of the argument is that these are talented, well-educated individuals who bring a worldview and experience on the global stage that Trump himself lacks.

The other side of the argument is that the authoritarian president Trump risks making his government much more authoritarian than it needs to be. This from Roger Cohen in the NYT:

A quarter-century after the post-Cold War zenith of liberal democracies and neoliberal economics, illiberalism and authoritarianism are on the march. It’s open season for anyone’s inner bigot. Violence is in the air, awaiting a spark. The winning political card today, as Mr. Trump has shown…is to lead “the people” against a “rigged system,”…The postwar order — its military alliances, trade pacts, political integration and legal framework — feels flimsy, and the nature of the American power undergirding it all is suddenly unclear.

We sound like a nation that is ripe for political upheaval. Citizens are not only more critical of their political leaders, they have become more cynical about the value of democracy as a political system, less hopeful that anything they do might influence public policy, and more willing to express support for authoritarian alternatives.

Yascha Mounk, a lecturer in government at Harvard, has spent the past few years challenging one of the bedrock assumptions of Western politics: That once a country becomes a liberal democracy, it will stay that way. That bedrock assumption is called “democratic consolidation” in political science, but Mounk’s research suggests that isn’t correct anymore.

In fact, he suggests that liberal democracies around the world may be at serious risk of decline. Data from Freedom House, an organization that measures democracy and freedom around the world, showed that the number of countries classified as “free” rose steadily from the mid-1970s to the early 2000s.

But since 2005, Freedom House’s index has shown a decline in global freedom each year. According to Mounk and his research partner Roberto Foa, who reviewed the data, early signs of democratic destabilization exist in the US and in other Western liberal democracies. They found that the percentage of people who say it is “essential” to live in a democracy has plummeted, and it is especially low among younger generations. The survey was based on 2014 data. Here is a graph from the Mounk-Foa study:

percent-who-say-democracy-is-essential-us

The graph shows responses by age cohort. Younger Americans have substantially less need to live in a democratic society than do older individuals. (The grey shaded part of graph is the 95% confidence limit for the responses to the survey). Remarkably, the trend toward acceptance of nondemocratic alternatives is especially strong among citizens who are both young and rich.

Mounk and Foa found that support for autocratic alternatives is also rising. Drawing on data from the European and World Values Surveys, they found that the share of Americans who say that authoritarianism would be a “good” or “very good” thing had risen from 18% in 1995 to 35% of rich Americans:

support-for-authoritianism-by-income-us

While citizen support for authoritarian rule remains in the minority, it can no longer be dismissed as a fringe group. They support “a strong leader who doesn’t have to bother with parliament and elections” and they want “experts” rather than the government to “take decisions” for the country. (In the study, “Upper income” is defined as the top 20% of income. “Lower Income” was defined as the bottom 50% of income.)

Overall, the rich are also now more likely than lower income citizens to express approval for “having the army rule.” While 43% of older Americans, including those born between the world wars and their baby-boomer children, do not believe that it is legitimate in a democracy for the military to take over when the government is incompetent or failing to do its job, the figure among millennials is much lower at 19%. In the US, only 5% of upper-income citizens thought that army rule was a “good” or “very good” idea in 1995. That figure has since risen to 16%, so the young rich are much more autocratic than their rich elders.

The clear message is that our democracy is now vulnerable. What was once unthinkable should no longer be considered outside the realm of possibility. This is partially the result of an educational system that does not teach even basic civics, much less the meaning of the Constitution.

Generations have grown up believing that they can casually read the document and understand what constitutional law is. Young Americans have never known the threat of an undemocratic system, so their fear of autocracy is far less than it is in the minds of their elders.

Trump is the prime example of this. And according to Mounk’s findings, he has a receptive audience in the young and the wealthy.

Would that be enough to undermine democracy in the US?

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Monday Wake Up Call – December 5, 2016

We’ve entered uncharted territory. Trump had a phone call with the president of Taiwan. Why is that such an issue? Presidents speak to other world leaders all the time, but American presidents have not spoken to the president of Taiwan since 1979. This studied form of non-recognition is at the core of the One-China Policy.

That policy states that there is only one state called “China”, despite the existence of two governments claiming to be China. This diplomatic dance works precisely because everybody agrees to abide by rules that don’t make complete sense.

We learned from experience in Korea and Vietnam, where we acted with hostility to both “two country” standoffs between a communist and a non-communist government. We learned, and then changed the game when it came to the two Chinas. That is, until President-Elect Trump was lured into the Taiwan call by his advisors, John Bolton and Stephen Yates. This from the Guardian: (strike out and brackets by the Wrongologist)

Bolton wrote in the Wall Street Journal in January: “The new US administration could start with receiving Taiwanese diplomats officially at the State Department; upgrading the status of US representation in Taipei from a private ‘institute’ to an official diplomatic mission; inviting Taiwan’s president to travel officially to America; allowing the most senior US officials to visit Taiwan to transact government business; and ultimately restoring full diplomatic recognition.”

Stephen Yates, a former White House aide to Dick Cheney now advising the Trump transition was in Taiwan at the time of [Trump’s] the call. “It’s great to have a leader willing to ignore those who say he cannot take a simple call from another democratically elected leader,” Yates tweeted.

China reacted by saying Trump needs to be educated about the world. Scott Adams, Trump butt-boy, puts it in about the most favorable light possible:

Trump is “setting the table” for future negotiations with China. He just subtracted something from China’s brand that they value, and later he will negotiate with them to maybe give it back in some fashion. Probably in return for some trade concessions.

It didn’t end there. Trump apparently has invited Philippine President Duterte to the White House. Figuring out how to resolve Duterte’s issues with the US, his embrace of China, and his demonstrated abuse of human rights in the Philippines should be high on the new administration’s list of issues. It would have been smart to have the outline of an agreed joint solution in place before rewarding Duterte with a state visit.

And there was Trump’s phone call with the Prime Minister of Pakistan. According to the Pakistani account of the conversation, Trump told Nawaz Sharif that Pakistan is a “fantastic” country full of “fantastic” people that he “would love” to visit as president.

Just awesome, except for Trump ignoring that India, our real partner in that part of Asia, is Pakistan’s enemy. Trump risks appearing to reward Pakistan at the expense of our relationship with India. Again, the US has maintained a balancing act between these two countries, who have a history of war and skirmishes over their disputed border.

The jury is out on what Trump is trying to do, and whether it is based on strategy, or ideology. Speaking with Taiwan’s and Pakistan’s leaders are potentially dangerous moves, as is his engagement with Duterte.

They are also potentially revolutionary. Every out-of-the-box move by Trump challenges norms and potentially blows up longstanding ways of doing things. If you are gonna shake things up, it’s all-important that you understand exactly why we have done things the way we have, and what the implications are of change. We know Trump is an instinctive guy, and not a willing student. The danger is his willingness to overturn complex situations where governmental institutions have had very good reasons for the policy they support.

This is the dark underbelly of Trump’s populism. He was elected to shake things up by voters who dismiss facts, if presented by journalists.

You start by discrediting what came before. You call it elite failure. You shake things up because you can.

Time to wake up, America! Think about Michael Moore’s calling Trump a human Molotov cocktail on NBC’s “Meet the Press”:

Across the Midwest, across the Rustbelt, I understand why a lot of people are angry. And they see Donald Trump as their human Molotov cocktail…I think they love the idea of blowing up the system.

So, let’s wake up today with the Billy Joel song, “We Didn’t Start the Fire”. The lyrics to this song catalog both personalities and historic events from 1949 until 1989:

We didn’t start Trump’s fire, but get ready, we may very well have to put it out.

Those who read the Wrongologist in email can view the video here.

Sample lyrics:
Harry Truman, Doris Day, Red China, Johnnie Ray
South Pacific, Walter Winchell, Joe DiMaggio
Joe McCarthy, Richard Nixon, Studebaker, Television
North Korea, South Korea, Marilyn Monroe

Rosenbergs, H-Bomb, Sugar Ray, Panmunjom
Brando, The King And I, and The Catcher In The Rye
Eisenhower, Vaccine, England’s got a new queen
Marciano, Liberace, Santayana goodbye

We didn’t start the fire
It was always burning
Since the world’s been turning
We didn’t start the fire
No we didn’t light it
But we tried to fight it

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Sunday Cartoon Blogging – December 4, 2016

Quite the week. Trump makes Cabinet appointments, he tweets about taking citizenship away from US flag burners exercising freedom of speech, he takes a call from the president of Taiwan, and gets a formal protest from China.

That wasn’t all. You missed it, but Congress passed HR 5732, the “Caesar Syria Civilian Protection Act”. The bill sets the stage for the implementation of a no-fly zone (NFZ) over Syria. It requires the administration to submit to the appropriate congressional committees a report:

That assesses the potential effectiveness, risks and operational requirements of the establishment and maintenance of a no-fly zone over part of all of Syria.

These Congressional chicken hawks may not realize that NFZs are a form of limited war. Politicians are usually the first to forget that limited wars only stay limited by mutual agreement. The military will tell you to never declare an NFZ unless you are entirely willing to fight a real air and ground war to enforce it. In the case of Syria, a No-Fly Zone would require the destruction of Syrian aircraft and missile systems from Day 1, probably leading to the death of Russians shortly thereafter. We could have a shooting war with Russia by the end of the first week.

Syria has over 130 air defense systems. A dozen or so are in the Aleppo area. Syria also has over 4,000 air defense artillery pieces and a few thousand portable infrared-guided missile systems. Russia has also located its advanced S-400 anti-aircraft missiles into Syria to protect their bases in Latakia Province. Those missile systems effectively give Russia control over Syria’s airspace, and for the US to impose a no-fly zone would require an air battle with Russia, which would all but guarantee the loss of a large number of US warplanes.

Over the last 25 years, there has been an evolving political infatuation with two pillars of “political airpower”: airstrikes and no-fly zones. Did we get the results our politicians promised?

Onward to cartoons. Trump goes to Indiana, gives Carrier tax breaks:

cow-carrier

It was great political theater, but it is a standard “socialize the losses” GOP play: tax breaks for jobs. The taxes earned from keeping the jobs never pay the cost of the tax credits.

Paul Krugman had a good observation:

cow-krugman-on-carrier

Fidel Castro dies:

cow-fidel-hell

Free speech isn’t well understood by the Orange Overlord:

cow-burn-this

Nancy Pelosi is reelected as Minority Leader. Many are pleased:

cow-pelosi

Mitt wants work, will say anything:

cow-mitt-agrees

 

 

 

 

 

 

 

 

 

 

 

 

Trump still has lots of posts to fill. Word is that former vice presidential candidate and Tina Fey impersonator Sarah Palin is on the list of possible Cabinet appointments.

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Will Erdogan Remain In The Trump Fan Club?

Trump has two towers in Istanbul. In December 2015, his local partner explored legal means to take Trump’s name off the towers after the Orange Overlord called for a ban on Muslims entering the US. In June, Turkish President Erdogan reportedly called for the removal of the Trump name from the towers.

But things have changed. The Economist reports that:

Mr. Erdogan appears to have changed his mind, both about the towers and about the man whose name appears on them. Although polls show that most Turks would have preferred to see Hillary Clinton as America’s new president, Mr. Trump’s election has been greeted in Ankara with a mix of schadenfreude and hope.

In fact, Erdogan has called US protests against Mr. Trump’s election “a disrespect to democracy”. The Economist says that Trump reportedly told Mr. Erdogan over the phone that his daughter, Ivanka, admired him, and flattery works all over the world.

Erdogan thinks that our Orange Overlord may be more amenable to extradite Fethullah Gulen, the Pennsylvania-based preacher whom Turkey accuses of orchestrating the coup attempt in July. Since July, Turkey has pressed the Obama administration to extradite Mr. Gulen. The Turks felt sure that Hillary Clinton would not extradite him, since her campaign accepted donations from his followers.

In November, Trump’s National Security Advisor, former General Michael Flynn, strongly supported Turkish President Erdogan in an op-ed at The Hill, suggesting that Erdogan is under siege by “radical Islam” and desperately needs our help. Flynn said:

The forces of radical Islam derive their ideology from radical clerics like Gülen, who is running a scam. We should not provide him safe haven. In this crisis, it is imperative that we remember who our real friends are.

Flynn also seemed to dismiss Erdogan’s crackdown on political dissidents and the dubious circumstances of the attempted coup which allowed Erdogan to solidify his power. So let’s review Erdogan’s actions since July:

  1. Turkey now has outstripped China as the world’s biggest jailer of journalists. In addition, 150 news outlets have been closed, ranging from TV stations to online enterprises.
  2. Erdogan has suspended or fired 110,000 civil servants, judges, teachers, journalists and soldiers. This has gutted the educated middle class of Turkey.
  3. He has restarted an internal war with Kurds in Eastern Turkey, and has arrested the leadership of the Kurdish minority HDP party, which got more than 10% of seats in the last election.
  4. He has sent the Turkish Army into Syria in what was first described as border defense against ISIS (a group he has long supported), but it has been revealed that his plan is to reach central Syria and depose Bashar Assad.
  5. The EU has suspended negotiations for Turkish membership for civil rights backsliding, but not before they gave Turkey €6 billion to stop sending refugees into the EU.
  6. Erdogan has threatened to reopen the flow of refugees if the EU doesn’t agree to further Turkey’s application to join. Opening the refugee flow is an existential threat to the EU, and thus, to NATO.

Trump is holding a tough hand while playing poker with Turkey. As a NATO member with the largest standing army in Europe, Turkey occupies an important place in NATO’s strategy. Trump has to balance Turkey’s support for the mutual defense of Europe against Turkey’s intentions to go one-on-one against Syria.

He has to balance the shaky EU refugee deal with Turkey against Erdogan’s effort to engage militarily against the PKK, a Kurdish group in Iraq and Syria who are allied with the US against ISIS.

Erdogan has made an overture towards Russia and China. A link with them would destabilize NATO even further. Erdogan seems to be testing Trump’s resolve and his commitment to NATO at the same time. Perhaps he sees an opportunity to garner some good old American baksheesh, so he’s putting a foot in the water to see if it’s comfortable enough to dive in.

That may be a poor play, since while Trump may be sympathetic to Turkish concerns about Mr. Gulen, the cleric’s fate rests with America’s courts. Meanwhile, The Economist reports that Trump’s team wants to list the Muslim Brotherhood as a terror group, roll back the nuclear deal with Iran, and continue arming the PKK’s Syrian wing against ISIS.

Erdogan opposes all of these measures vehemently.

Some of Trump’s new team are not fans of Erdogan. In a tweet, Trump’s CIA-designate, Mike Pompeo, called Turkey an “Islamist dictatorship”.

Mr. Erdogan and Mr. Trump show certain similarities. Both are busy recasting and ruining their countries at the same time.

Let’s hope it doesn’t last.

 

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GOP Plans To Gut Dodd-Frank

Do you trust the banks and brokerage houses to govern themselves? Do you think that reducing banking regulations will help the economy, or your personal financial situation? Before you answer:

  • Remember that the economic meltdown of 2008 was caused by overreach by the financial industry.
  • Remember that it took the next eight years to climb out of the Great Recession and return to pre-2008 employment levels.

Dave Dayen in the Fiscal Times points out that there will be a vote this week in the Congress that will say a lot about how willing the Democrats in Congress will be to fight the deregulation avalanche that’s about to come crashing down on We the People. From Dayen: (brackets and emphasis by the Wrongologist)

As early as Wednesday, the House will take up H.R. 6392, the Systemic Risk Designation Improvement Act. This bill would lift mandatory Dodd-Frank regulatory supervision for all banks with more than $50 billion in assets, meaning those financial giants would no longer be subject to blanket requirements regarding capital and leverage, public disclosures and the production of “living wills” to map out how to unwind [the bank] during a crisis.

The intent of the new regulation authored by Blaine Leutkemeyer (R-MO), isn’t about helping the biggest banks, but the relatively smaller regional players, firms like PNC Bank, Capital One and SunTrust. An estimated 28 institutions would be affected. The eight “global systemically important banks” would remain subject to the standards: Citigroup, JPMorgan Chase, Bank of America, Goldman Sachs, Wells Fargo, Bank of New York Mellon, Morgan Stanley and State Street Bank.

But the so-called regional banks are not small operations. These 28 regionals have combined assets of about $4.5 trillion. It is useful to remember that in the 2008 crisis, regional banks like Washington Mutual and Wachovia also came crashing down.

The American Banker says that the Financial Stability Oversight Council (FSOC), the new super-regulator charged with monitoring systemic risk, will be gutted by the Trump administration: (brackets and emphasis by the Wrongologist)

Because the FSOC is headed by the Treasury secretary…[a cabinet post selected]…by the White House, a Trump administration is unlikely to continue any of the council’s…priorities, including the designation of nonbanks or continued regulation of those firms already designated.

It is obvious that if this bill passes and is signed by President Trump, financial regulation will be relaxed, not by repeal, but through atrophy. Republicans want to replace any mandatory rules for regulation with discretionary ones. That way they can claim that they’re merely improving the system by putting the decisions in the hands of the experts instead of members of Congress.

A next step will be to hire regulators dedicated to turning a blind eye to what the financial industry does. The chair of FSOC is the Treasury Secretary. Trump’s candidates for Treasury Secretary include Steven Mnuchin, Trump’s national finance chair and the most likely choice for Treasury, who sits on the board of directors of CIT, a financial services company with more than $50 billion in assets. The Treasury Secretary will ensure that the rest of the FSOC board is made up of regulators and presidential appointees who share Trump’s laissez-faire philosophy.

President Obama will veto this bill if it passes the Senate before January 20th. But the Republicans plan to roll it out this week, instead of waiting for Trump to enter the Oval Office. They want to gauge just how much backbone Democrats have after their thumping in the election. More from Dayen:

This is really a moment of truth for those Democrats. If Republicans put up a big bipartisan vote in the House for this, the Senate will be more inclined to try to pass it down the road. And it will serve as a test case for Democratic resolve more generally.

Wall Street-friendly Dems have already endorsed tailoring Dodd-Frank rules to eliminate smaller regionals from the rules. This bill is a big change, and the question is whether Democrats play ball with Trump’s deregulation agenda, or will they recognize the harm it will cause?

This is an early test for those Dems whose seats are at-risk in 2018 and 2020.

Financial deregulation has rarely been a partisan political matter. Democrats and Republicans have typically worked together to roll back rules and loosen up the Wall Street casino.

HR 6392 could represent a return to those times, or it could be the moment when Democrats join together and say “no”, forcing Republicans to support the banking industry agenda on their own.

Party line resistance by Democrats could be in their longer-term best interest.

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Smart Guys, Smart Power

When we think of entrepreneurs involved in renewable energy, usually just one name comes to mind, Elon Musk, a smart guy who has given Tesla a new meaning. He just merged Tesla with Solar City.

But smart entrepreneurs in solar are emerging. The NYT wrote yesterday about Nicholas Beatty, a former banker who has covered about 25 acres of his farm in England with solar panels. This isn’t a new phenomenon, lots of farms have solar arrays both in the UK and elsewhere, most of which also use Rooftop Solar Forecast software to plan and manage energy use around solar intermittency:

What’s new in Mr. Beatty’s field is a hulking 40-foot-long shipping container. Stacked inside, in what look like drawers, are about 200 lithium-ion cells that make up a battery large enough to store a substantial portion of the electricity the solar farm puts out.

The battery and its smart software give Mr. Beatty an advantage over other solar panel farmers. Power prices rise and fall depending on the supply and demand. The spread between the high and low price can be dramatic. By storing power in the battery, Mr. Beatty can feed it into the grid when prices are high:

The battery effectively takes power off the line when there is too much and puts it on when there is too little…

Farmers, business owners, and homeowners looking to install a solar power system for their own energy needs and uses may want to consider the services of Gietzen Solar to help set this up.
Improved industrial-sized batteries are a way of achieving that flexibility. Mr. Beatty’s battery storage system cost about $1 million, but could increase revenue for his solar farm by as much as $250k per year. Beatty is one of many entrepreneurs and businesses trying to play the fast-shifting electric power landscape. This is a capital-intensive business:

With about a dozen friends and family members…he spent £6.5 million ($8 .1 million) to build the solar farm in 2014. The solar panels…generate about £650,000 ($810k) in revenue a year…

Improved battery storage and its smart controlling software has been one of the two pillars required to make solar power competitive with non-renewable energy sources, you could definitely say that this is a case where the question Deep Cycle Versus Shallow Cycle Solar Batteries comes into play. The other is the cost of solar panels. Tesla has been working on both axis. They have built a solar demonstration project on the island of Ta’u in American Samoa that generates 1.4 megawatts of energy. The microgrid has 60 Tesla Powerpacks, the company’s large commercial battery with 6 megawatt hours of battery storage. These batteries can be fully charged with only 7 hours of daylight from 5,300 solar panels.

The microgrid facility can fully power the island of 600 residents for 3 days on battery power. It is expected to save the island 109,500 gallons of diesel per year or $8 million in fuel costs. Ta’u previously relied on diesel fueled generators for power.

Cost of solar energy per kilowatt or megawatt hour has been uncompetitive for a long time, but that is changing. And most countries and most US states now are willing to purchase power from independent generators, like Mr. Beatty in the UK. Many in the UK, including in locations like derby, are following suit and investigating how they can benefit from installing solar panels to their properties and harness the renewable power of the sun for themselves. The Economist has this chart of the relative costs of sources of energy:

price-of-solar

All of this means that American farmers could open a new revenue stream by becoming smart solar power generators. Farmers own large acreage in sunny locations. They have a deep understanding of farming, another capital-intensive business. They understand that farming is a climate-dependent enterprise, another factor in common with solar power generation.

A key factor is whether their state allows interconnection with the power grid, and whether the state’s program to pay the independent power generator for power sent to the grid at an economic rate.

Let’s hope that Donald Trump’s fascination with coal doesn’t lead to bad policy. The Economist reports that Trump has promised to make more public land available to miners; but access to coal reserves isn’t their problem. Coal employment peaked in the 1920s, and today, fewer electric utilities want to use coal. If he intervenes on behalf of coal, he will be actively handicapping renewables and natural gas. If Trump’s energy policy is focused on a few unprofitable coal-mines, China will take a commanding lead in batteries, solar panels and wind turbines. That wouldn’t be so smart.

We are at a time when the cost of solar energy has dropped dramatically, and with greater economies of scale, it will fall even further.

It is past time for a few smart entrepreneurs to take up the disruption of the fossil fuel industry and its fellow travelers, the electric utilities.

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Monday Wake Up Call – November 28, 2016

Someone once said that if the Republican Party was a refrigerator, it would say its job was to let ice melt.

Apparently Ben Carson was offered the job as head of Housing and Urban Development (HUD). This is a cabinet-level appointment. Carson had initially turned down a cabinet appointment at Health & Human Services (HHS) because, (according to his staff) he was unqualified. But he’s changed his mind: (brackets by the Wrongologist)

Ben Carson has demonstrated the ability to do two things at a world-class level: perform surgical operations, and run [several] lucrative scams. By his own admission, he is patently unqualified to run a federal agency. Nonetheless, he is apparently on the verge of accepting a job as secretary of Housing and Urban Development…

History tells us that HUD has had just one use in Republican administrations. The agency’s program structure lends itself to profiteering. HUD works closely with private developers to build affordable housing. Without careful oversight, the agency can easily become a slush fund to distribute sweetheart contracts to the administration’s buddies.

Samuel Pierce, Ronald Reagan’s HUD secretary, did just that. Reagan’s HUD regularly handed out loans and grants on the basis of political contacts. Ultimately, some Reagan-era HUD officials were convicted, including three assistant secretaries, for such crimes as accepting illegal loans, obstructing justice, and illegal gratuities.

George W. Bush’s housing secretary, Alphonso Jackson, resigned in 2008 after a series of scandals, including sweetheart deals and inflated salaries for his friends. He instructed his staff to steer contracts to Bush supporters. Jackson was investigated by HUD’s inspector general, the Department of Justice and the FBI, none of which resulted in a conviction.

Since Trump says that he will continue running his real estate empire in office, a loyalist like Carson, someone with no experience in government, but who has relevant experience in bilking, will oversee an agency whose mission lends itself to corruption.

One of the reasons to appoint Carson is because HUD will likely cease its anti-segregation and anti-discrimination activities as soon as the Trumpets assume control. He is on record supporting ending that mission. This from the WSJ:

Under the Obama administration, the department has beefed up enforcement of fair-housing regulations to combat zoning policies that result in segregation, threatening the loss of millions of dollars in federal funding to municipalities that don’t comply. Mr. Carson sharply criticized those policies as “mandated social-engineering schemes” that repeated a pattern of “failed socialist experiments in this country,” in a 2015 op-ed published in The Washington Times.

If there is a bright side to Ben Carson running HUD, it is that he’s not running HHS with the second largest share of the federal budget. Imagine him saying: “I’m a physician. Med school taught me everything there is to know about health care.”

Remember, HUD spelled backward is DUH…

It’s time to wake up America! The writing is on the wall, Trump’s cabinet hires are terrible, and we have to pressure him to do better than Ben Carson.

You can go to social media and complain directly to your Orange Overlord at: #therealDonaldTrump.

To help you wake up, listen to the Crystals from 1962 singing “Uptown”. Phil Spector originally recorded the song with Little Eva, the 19 year-old babysitter to Carole King and Gerry Goffin. The end result didn’t meet Spector’s standards, so he produced it a second time with the Crystals. Here is “Uptown”:

Those who read the Wrongologist in email can view the video here.

Sample Lyrics:

He gets up each morning
And he goes downtown
Where everyone’s his boss
And he’s lost in an angry land
He’s a little man

But then he comes uptown
Each evenin’ to my tenement
Uptown where folks don’t have
To pay much rent
And when he’s there with me
He can see that he’s everything
Then he’s tall, he don’t crawl
He’s a king

Downtown he’s just one of a million guys
He don’t get no breaks
And he takes all they got to give
‘Cause he’s got to live

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Sunday Cartoon Blogging – November 27, 2016

Are you sick of all the winning yet?

You have probably heard that Fidel Castro died yesterday. Wrongo was in college in October 1962, at the time of the Cuban missile crisis. We were glued to TV waiting for a nuclear attack that never came.

That Castro survived JFK by 53 years is remarkable, particularly since at least two American Presidents tried to kill him. At the time, Kennedy offered two things in exchange for Soviet removal of the Cuban missiles: (1) the US would pledge never to invade Cuba and (2) the US would secretly withdraw missiles from Turkey. The removal of the nukes from Turkey was delayed several months, so that the US would not appear weak in the face of the Cuban missile threat. The Soviet Union accepted this offer the next day.

After the fall of the Soviet Union, their archives of the Missile crisis showed that Castro wanted the USSR to fire the missiles at the US. Khrushchev came to regard Castro as a lunatic, bent on war. We came very close to invading Cuba, and the Soviets never fully trusted Castro again.

In most ways, Castro’s death is anticlimactic. He retired, and appointed his brother Raul to head the government years ago, and recently, the Obama administration has been effective in improving relations with Cuba. Had Fidel died during a period of greater tension, it might have signaled the possibility of a positive change in relations between our two countries. Sadly, it is probable that the next great change in Cuban/American relations will move us backward under a Trump Administration.

Onward to cartoons. Thanksgiving and Trump’s staffing plans dominated the week.

Many avoided politics at the family repast:

cow-i-survived

Democrats weigh their strategy with Trump:

cow-turkey-talk

Trump meets with the New York Times, tells them how to cover the news:

cow-trumpy-times

Our Orange Decider has yet to decide a few things:

cow-the-decider

Paul Ryan is locked and loaded for 2017:

cow-paul-ryans-targets

Many who voted for Trump have little or no retirement savings, or regular savings for that matter. Ironically, a majority of them will be reliant on Social Security, Medicare and Medicaid in later life. Sadly, they can’t seem to connect the dots between Ryan’s Ayn Randian dreams of privatization, and how it will affect their lives. It may be too late for many of them.

Deficits are part of the Art of the Deal:

cow-white-house-puppy

Those “responsible Republican deficit hawks” wanted to restore earmarks the week after the election, but Ryan is making them wait until the new Congress is seated. That way, they won’t destroy the PRETENSE of budget deficits mattering.

The GOP really can’t wait to take off the debt girdle:

cow-deficit-girdle

 

 

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Our New Political Majority

(This is the last column for this week. We will resume on Sunday with cartoons. Everyone has reasons to be thankful, so take the time to talk about them with your loved ones, or your close friends this week.)

Last weekend, like most Americans, Wrongo spoke with friends and family about how we got to the disappointing political place where we are today.

Der Spiegel Online asked: If you think back ten years, could you have imagined in 2006 that America’s reality would be Donald Trump as president of the US? Probably not, but ten years ago:

  1. Economic growth and job growth both fell in 2006 as the residential housing boom came to an end.
  2. Wages were the smallest share of national income since the government began compiling the statistic in 1947.
  3. Consumer debt soared to new heights, while consumer debt payments rose to the highest on record.

Those were dispatches from the ongoing war that corporations and neoliberal economic elites made on our citizens. And it didn’t stop there. After 2006, we had the financial meltdown and the Great Recession. Banks had to be bailed out. Millions of people lost their jobs. Debt grew, and faith in government’s willingness and ability to improve the fortunes of their citizens evaporated.

The clear losers were workers in traditional economic sectors, particularly in manufacturing. According to a study by economists David Autor, David Dorn and Gordon Hanson, the increase in imports from China have resulted in the loss of 1.5 million manufacturing jobs since the early 1990s.

But automation had a greater impact: In total, some 6.9 million manufacturing jobs were lost in the US between the early 1990s and 2011. For those who have lost their jobs, it seems that their political representatives have forgotten them. Particularly when establishment Democrats and Republicans continue to push for more trade, by which they mean more imports from our global corporations who continue to export those jobs to lower-wage countries.

In 2016, despite substantially better economic times, many American still worried about losing their jobs and their financial security. They saw themselves as the losers in a game that only helps corporations and the elites. This domination of our politics by the economic elites has produced a defacto disenfranchisement of everyone else.

A new political map has emerged, one that doesn’t neatly fit into the Left vs. Right model of our politics. The new dividing line is between those who support, and those who oppose, America’s economic elites and their neoliberal policies. Those on both sides of the old ideologies who distrust the elites are connected by their fear of being left behind. This was clear in 2016 in those precincts where Trump outperformed Romney, and where Clinton underperformed Obama.

This is today’s landscape, but in 1998, Richard Rorty, an American philosopher who died in 2007, wrote “Achieving Our Country” which predicted our current political situation. According to the NYT, the following fragment of the book has been retweeted thousands of times since the election:

Members of labor unions, and unorganized unskilled workers, will sooner or later realize that their government is not even trying to prevent wages from sinking or to prevent jobs from being exported. Around the same time, they will realize that suburban white-collar workers — themselves desperately afraid of being downsized — are not going to let themselves be taxed to provide social benefits for anyone else.

At that point, something will crack. The nonsuburban electorate will decide that the system has failed and start looking around for a strongman to vote for — someone willing to assure them that, once he is elected, the smug bureaucrats, tricky lawyers, overpaid bond salesmen, and postmodernist professors will no longer be calling the shots.

One thing that is very likely to happen is that the gains made in the past 40 years by black and brown Americans, and by homosexuals, will be wiped out. Jocular contempt for women will come back into fashion…All the resentment which badly educated Americans feel about having their manners dictated to them by college graduates will find an outlet.

Rorty’s basic contention is that the left abandoned its core philosophy in favor of a neo-liberal worldview that promoted globalism and corporatism. Rorty said in a lecture in 1997:

This world economy will soon be owned by a cosmopolitan upper class which has no more sense of community with any workers anywhere than the great American capitalists of the year 1900.

Mr. Rorty’s most prescient words:

The cultural Left has a vision of an America in which the white patriarchs have stopped voting and have left all the voting to be done by members of previously victimized groups.

Rorty said that in 1998. And in 2016, it was Hillary Clinton’s failed election strategy.

What’s so striking about “Achieving Our Country” is Rorty’s argument that both the cultural and political left abandoned economic justice in favor of identity politics, ignoring too many economically disadvantaged Americans.

According to voter turnout statistics from the 2016 election, 58.4% of eligible voters actually voted (135.2 million). Clinton received about 63.7 million votes (27.5% of eligible voters) to Trump’s 62 million, (26.8%) while 9.5 million votes went to others.

This means that 41.6% of America voted for nobody, far outweighing the votes cast for Trump or Clinton.

That the majority of Americans did not vote is not because they don’t care. They voted no confidence in a political system that forgot about them a long time ago.

A minority elected Trump. The majority voted against our neoliberal political system.

 

(BTW, Tuesday was the 53rd anniversary of JFK’s assassination. While it remains fresh in Wrongo’s mind, it hardly registers in the minds of the press or the public. A new idea on Oswald’s motives appeared in the LA Times. Take a look.)

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