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The Wrongologist

Geopolitics, Power and Political Economy

Sunday Cartoon Blogging – December 15, 2019

Paul Volcker died last week. It’s likely that few readers know who he was, or what he did. He was one of the most important persons in finance in the last 50 years.

Volcker was Chairman of the Federal Reserve under Carter and Reagan, until Reagan fired him in 1986. He is widely credited with having ended the high levels of inflation in the US during the late 1970s and early 1980s. Earlier, he was an important part of Nixon’s team that took the US off the gold standard in 1971.

In that time of red-hot inflation, Volcker’s goal was to stop the growth of prices, while keeping the dollar strong globally. Back then, Americans saw inflation as our most pressing economic problem. Volcker’s goal was to reduce wages as a way to reduce price inflation. As an example, during his time as Fed Chair, Volcker carried a card listing the wages of unions in his pocket to remind himself that his early goal was to crush the unions.

When Reagan and his people complained that interest rates were too high, Volcker would pull out his card on union wages and say that inflation would not come down permanently until labor “got the message and surrendered.” Volcker said that the prosperity of the 1950s and 1960s was a:

“hall of mirrors”, and that the…”standard of living of the average American must decline.”

Volcker’s jacking up of interest rates eventually purged inflation from the system. Along the way, it hurt small businesses, farms, banks, and home owners who needed a mortgage. Mortgage rates reached a peak of 18.63% in October 1981.

While Wrongo briefly worked for Volcker at the big bank in the early 1970’s, we had no relationship.  Wrongo reported to a guy, who reported to a guy, who reported to Volcker. Despite that (minimal) connection, Wrongo knows that Volcker’s stint at the Fed helped to shatter the American middle class. It might not have been his intent, but it was what he did. On to cartoons.

Trump outdoes Obama:

McConnell says he’ll take his instructions from the defendant:

 

Trump’s Xmas list:

The people would rather have a lump of coal:

21st Century Wise Men:

Greta vs. the Rest:

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More Thoughts on Climate Change

The Daily Escape:

Frenchman Bay, viewed from Cadillac Mountain, Acadia NP, ME – 2019 photo by pmek99. Note the cruise ships lining up to visit Bar Harbor.

Following up on our post about climate change, many responded by attacking the premise that climate change is happening or, that it is due to human causes.

There have always been deniers. For example, a survey conducted by the YouGov-Cambridge Global Project in partnership with the Guardian, found that 13% of Americans believe that humans are not at all responsible for climate change. Another 5% of Americans don’t even believe the climate is changing. So, 18% think we shouldn’t worry about climate change.

Then again, 20% believe that extraterrestrials live amongst us.

Wrongo isn’t sure that we are focused correctly when we talk about climate change. It’s not the planet that’s in trouble, its humans. Humans thrive within a specific range of availability of water, air, and food, as do all animals. If one of the critical inputs is compromised, humans will fail to thrive, our habitable locations will shrink, and the human population will also shrink. The planet will survive.

For much of human history, humans have lived in hotter, dryer locations. They also survived in colder places, and in both, were able to live hard, but reasonably happy lives. Do we want to regress to that?

Peak human experience requires surpluses of food and livable space if the population is to grow. How can that happen on an overpopulated, resource-constrained planet?

Focus on this: Global population is projected to reach approximately 10.9 billion by 2100. If that is true, we will require 10X today’s electricity output by 2100. When you think about it, even if today, we had already reached the (unrealistic) level of 50% of power sourced from renewables, that would equal only 5% of the power we will need 100 years from now.

So, where will all that energy come from? Can Silicon Valley invent a different form of electric power generation? Will the world go fully into nuclear power?

The same is true for water. Where will the increased water resources come from? Desalination?

Suppose there is no climate change. We are still facing peak oil and peak other resources. We live on a finite Earth. Think about energy: We’re in a world of expanding energy demand. This will mean substantial shortages in the medium-term, which means immense and unavoidable energy price increases.

Politically, the higher prices should be used to defray the energy costs of the majority of the population that isn’t rich enough to pay them. Doing that will take a different economic system than we have today.

Can deniers also wish these problems away?

  • We live in a world where the big polluters, corporations, are dedicated to maximizing short term returns for a relatively few wealthy beneficiaries.
  • We still live in a Neoliberal world where government works for the few, where government largess continually transfers income to the wealthy, while our infrastructure is allowed to decay.
  • We still live in a world where economic growth cannot be sustained forever without collapse.

It will take a global mobilization that is massive, disruptive and smart to deal with the resources constraint, even if there wasn’t any climate change. What we really lack is the SOCIAL technology to mobilize corporations and politicians to bring about change.

Concern about the twin problems of finite resources and climate change hasn’t brought about any particular political, social or spiritual commitment on the part of the power elites in finance, corporations or politics.

For all of our superiority at the apex of the animal kingdom, we seem unwilling to solve what surely lies ahead. That’s why we see Greta Thunberg, a 16 year old scolding world leaders, with 4 million kids standing behind her. To adapt, we will require a Manhattan Project-level of effort, but we’ll have to do all that work in the face of depleted resources, an unstable climate, and a contracting economy.

We have choices. We can continue as we are, or we can stop now, take a moment to reassess, and then put ourselves on an alternative path, as the younger generation says we must.

Thunberg challenges us to stop being selfish, to care about the future, to care about living things and recognize that we are all part of the natural world, and that our commitment to continuing economic growth is killing the planet.

We should listen, organize, and act.

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Wake Up Call – Climate Edition, September 23, 2019

The Daily Escape:

Greenland shows its melting glaciers – September 14, 2019 photo by Steve Mueller. Mueller gives a personal testimony, describing similar flights over Greenland in the 1970s, 80s, and 90s when ice & snow covered most of it. Sadly, that’s no longer true today.

Wrongo rarely writes about climate change, because he’s had very little hope that the world will act to solve, or delay the reality in front of us.

Until now.

There is something very hopeful when young people around the globe are calling out those in power and calling out the rest of us who have exacerbated the warming problem through our commitment to economic growth at any price. That price includes income inequality and the ever-accelerating use of our planet’s resources to fuel that economic growth.

The emergence of young people as activists adds a different dimension to the argument. They are worried about what kind of world we’re leaving them. The movement is personified by the 16-year-old Swedish teenage activist Greta Thunberg. On Monday, she spoke to the UN Climate Change Summit, and did not mince words. She implored world leaders to act urgently:

“I shouldn’t be up here. I should be back in school on the other side of the ocean. Yet you all come to us for hope. How dare you. You have stolen my dreams and my childhood with your empty words.”

Anger is an energysaid the Sex Pistols in 1972. And we’re seeing both anger and all of its kinetic energy on display by these kids. It’s reminiscent of teenagers in the 1960s and 1970’s in the US, first with the Civil Rights movement, and later, with less effect, in the Vietnam War protests.

Time will tell if this social movement ends up helping to create big policy change, or if it’s just another footnote, a bit like Occupy Wall Street. But, It’s given Wrongo some hope that it is still possible to battle against entrenched money interests, at least on the question of climate change.

Returning to the climate consequences as shown in Steve Mueller’s photo, The Economist’s cover story this week is about climate. They point out that temperatures in the Arctic are warming twice as fast as the global average:

When floating sea ice vanishes, it exposes deep blue waters, which absorb more solar energy than the white ice does. In turn, this speeds up melting: it’s a classic positive-feedback loop. The ice recedes to an annual minimum extent every September. The record low was set in 2012.

Some sceptics point to cold snaps in North America as evidence that concern about global warming is overblown. They should be told that such days are caused by chilly air escaping polar latitudes. Which in itself, may be another consequence of a warming Arctic.

A good analogy is the problem supertankers face if they try to make a U-turn. It takes a tremendous amount of energy and time to overcome the ship’s momentum, to slow the tanker from cruising speed to a point where a u-turn can begin.

For climate change, we must overcome our momentum, reversing how we create energy, how we manufacture our goods, how we travel, how we heat and cool our homes, and how we provision our foods.

The next challenge is if this can be done while continuing to expand the global economy, keeping in mind that the global population may be 50% larger by 2100.

Back in corporate life, Wrongo used to talk about things that could be fixed “If your life depended on it” and those that couldn’t be fixed even if your life did depend on it.

If the problem can be fixed if your life depended on it, you fix it or die, no excuses. This is where we are today. Maybe it’s not our lives that depend on it,  it’s those of our grandchildren. They are counting on us to rise up now, in a global movement to make change.

Wake up America! The kids couldn’t be clearer:  They do not want pats on the head, where we tell them how “inspiring” they are.

For Boomers and Millennials, the climate problems posed in the second half of the 21st century can still seem largely hypothetical. But for those born after 2000 like Greta Thunberg, and 2.6 billion others, it’s more like half their lives. This gives a huge moral weight to their demands.

But it will take more than political activism. The kids want our leadership, our votes, and most importantly, our action to confront this crisis.

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