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Ongoing Investigation

So, it’s funny how this oil derrick just looks like an I-beam with a few other chunks of steel welded to it, connected by a hinge to a sort of gallows. If you spend any time at all examining the picture for its constituent parts, it almost begins to break itself down. What other kinds of things might be made with these materials?

Many more pictures here of what happens to a place when a boom goes bust, especially one based on oil production. The sociological connection to everything required for extraction is not far removed from this idea; but neither is the way we shield ourselves and our tender sensibilities from the extraction costs when they include exploding bodies and flag-draped coffins. It’s scandalous how we permitted the government to ban photographs of soldiers returning home in cargo planes. That’s the extent of our honor right there. Look away, indeed. These are the costs of our dependence strategies, the further externalities, if you will, and if we can’t handle them then we should perhaps think twice about tying our liberty and freedom to gassing up.

These are among the cautionary guidelines we should consult in our decision-making. Without them, we’re just walking in front of cartoon scenery. You can’t section off moral hazard as though it’s a completely separate consideration. Unless you’re able to do that. Then, you’re all set!

I hope they’re making this up. According to wikipedia, the derrick device was named for its resemblance to a hangman’s gallows; the derrick-type gallows was itself named for an Elizabethan Era executioner.

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World’s Longest Undefended Border

Between Canada and the United States? Between clever and stupid? You’re getting warmer. Try the critical dividing line between credit creation and value creation. Seeing these as one in the same is like, well, looking at the huge land mass between Panama and the North Pole and seeing a single, harmonious country. It’s not all the same, though it would change much if some solidarity formed around being North Americans, not all of it good.

There is some good, bad and wrong in this article. The author points to some interesting distinctions that have been missed, or at least underplayed, concerning credit and value.

There are some simple rules for sound banking and sound economies that need to be followed: Whenever credit is created and used to increase the amount of goods and services provided, it will be noninflationary: more money comes about, but also more goods and services. This is boring banking, without excessive bankers’ bonuses. But it is the kind of stable banking that created the postwar German and Japanese economic miracles, and also explains the rise of China and other East Asian so-called miracle economies.

But whenever credit is created and used for unproductive purposes, inflation comes about: more money chases a limited amount of goods or assets. The unproductive credit creation can take two forms: When credit is extended for consumption, it will result in consumer price inflation. When credit is extended for non-gross domestic product transactions (which means mainly financial and real estate transactions), there will be asset inflation. Both cases are unsustainable and if sufficiently large, result in banking and economic crises.

We can be more or less strict about any of this from a regulatory point of view, but what banks create with credit largely defines how we lope from bubbles to busts to bubbles again. Bankers were once (and will be again soon) the stiff, uptight types whose very boringness epitomized financial prudence featuring risk aversion, right down to their Brooks Brothers’ suits. This is the boring banking of low, constant annual returns – you may have heard of it. Though they may have been disparaged from time to time as prudish stereotypes, there was a certain reliance on them as a personification of the confidence we could place in the system. Credit was slow moving for a reason. But when, as the writer points out, credit is created and used for unproductive purposes, all manner of skulduggery becomes possible.

And here’s the civics class section that coach skipped over – when something involving money becomes possible in our system, it’s as good as mandatory.

We get exotic financial instruments and bankers in Zegna and Armani spinning a whole different kind of confidence game. These episodes, if that’s all they are, point back to an economy abandoned of its fundamentals, where people are making money off of money that, it turns out, isn’t real money. Inflated value is not real money, so you should not be able to get easy cash (more debt) in return for not having it.

Q: How can you afford a $789,000 home financed at 5.8% if you’re not an anesthesiologist?

A: You can’t.

There are all manner of warning signs that no one wants to believe (Dow 36,000?) and it’s easy to look back and say well, we should have known, what with all those e*trade commercials during breaks in ‘Flip that House’, you could see greed getting the best of the least among us first*. Yes, we should have and in fact many, many people did refuse the basic temptation to jump in and not get left out of the gold rush, which was based on nothing more than self-conjured pool of suckers-R-us.

* I’m thinking of the conscience-challenged here, first, but there’s a growing body of evidence which suggests some preternatural disposition toward not asking questions if the answers keep coming at a 30% annual rate of return.

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Secret Science Nights

… might make science a little less secret. Imagine going to a rock club (yes, suburbanites, people do actually leave their homes in the evening) maybe a little earlier than a show usually starts. You line up outside the door with generally the same kinds of people you usually see, plus a few others that you might not. You get inside, get a drink, but instead of noticing the first act’s gear set-up on stage, there’s a screen with a podium in front, maybe the little apple is already glowing. Then a bearded fellow comes on stage, fires up his power point and starts bouncing around the periodic table or conjuring Pleistocene megafauna to the all-too-interested gathering. It could happen.

The crowd is young and hip, mostly in their 20s and 30s, eager to gain entry to tonight’s hot-ticket entertainment event. Once the doors open, about 50 lucky people secure chairs, while another 50 stand four-deep around the room, and another 50 are gently turned away at the door.

“This is the third time I haven’t made it in,” a disappointed young woman sighs.

A mixtape of music plays through the speakers and the audience sips drinks from plastic cups while waiting for the featured act to begin. It won’t be the latest indie band, or an up-and-coming comedian. This is not the typical New York club scene. This is the monthly meeting of the Secret Science Club.

Really… what’s the answer to a disinterested/confused populace but making science more available and accessible? Particularly within in the confines of a nightclub. It might turn dull really quickly, but who’s fault would that be? The ‘nerdy’ connection in the article is unnecessary, as is the strict limitation to science (you could just as well sneak in some secret philosophy). But now is when we need to mix it up (in a pugilistic sense) the most, and especially if there is a stock supply of expertise in your town that goes home in the evenings just to sit at home and watch cable. Create a venue and they might come.

Bonus: would there be any side benefits to academicians facing a pop audience? Knowledge-as-power flows in both directions.

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le mensonge dans une bouteille

Bastardized phonyms using a different language that has a close but completely different meaning… draw comparisons where appropriate. Working on this week’s column, I’m seeing a route through to making the point that

Is there any doubt that most of the talking heads on cable, along with an uncomfortable ratio of the professional politicians they report and comment on, do not know what they’re talking about when it comes to the causes for and ways out of our economic recession?

And I come back to the ‘fools or liars’ construct, where your interlocutor (or presidential candidate –  candidate McCain was offering something up seemingly every other day this summer and twice on weekends) offers a point predicated on only one of two possibilities – either he’s a fool or he thinks you are.

And the trends continue, unabated. Krugman today, on the Treasury plans to make low-interest, non-recourse loans to lure private investors into buying bad assets:

And the insistence on offering the same plan over and over again, with only cosmetic changes, is itself deeply disturbing. Does Treasury not realize that all these proposals amount to the same thing? Or does it realize that, but hope that the rest of us won’t notice? That is, are they stupid, or do they think we’re stupid?

I don’t know which possibility is worse.

And this

ABC News reports on “upper-income taxpayers” who are trying to reduce their income so they avoid proposed tax increases on those earning more than $250,000.

According to ABC, one attorney “plans to cut back on her business to get her annual income under the quarter million mark should the Obama tax plan be passed by Congress and become law.”  According to the attorney: “We are going to try to figure out how to make our income $249,999.00.”  ABC also quotes a dentist who is trying to figure out how to reduce her income.

This is stunningly wrong.

The ABC article is based on the premise that an individual’s entire income is taxed at the same rate.  If that were the case, it would be possible for a family earning $249,999 to have a higher after-tax income than a family earning $255,000, because the family earning $249,999 would pay a lower tax rate.

But that isn’t actually how income tax works.

And that’s just today… this morning, actually. Please make it stop. Has anybody seen the bridge?

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Tralalitions

When is a metaphor not just a metaphor?

The tenderness of the delicate American buttock is causing more environmental devastation than the country’s love of gas-guzzling cars, fast food or McMansions, according to green campaigners. At fault, they say, is the US public’s insistence on extra-soft, quilted and multi-ply products when they use the bathroom.

As only in the person of Hugh Person, the metaphysics of the situation keep churning in on themselves. Everything stands for something else until we have to begin literally tagging basic elements again into intelligible units of meaning.

Thanks, JL.

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The coming war of words (hopefully just that) over who is being green and who isn’t

China hits back at US criticism on human rights after the US needles China with human rights criticism, China responds with Human Rights Record of United States in 2008. From its preface: “As in previous years, the [United States’] reports are full of accusations of the human rights situation in more than 190 countries and regions, including China, but mention nothing of the widespread human rights abuses on its own territory.”

From Metafilter.

Ongoing and, as much as it has reached a few crisis flash points in the past, we’re largely aware of it and how to use it to our advantage, as are our 700 million Chinese brothers. But how long before these kinds of international conflicts extend to greenhouse gas emissions? Shouldn’t we lay in some provisions, keep some powder dry, as the sayings go? What would any of that mean?

One reason the Kyoto Protocol was rejected by the US government after being widely ratified worldwide was that it would have forced on us measures to curtail emissions whereas other countries would be able to continue developing/polluting for a while, putting the US at a competitive disadvantage, yada yada. But… what if we began preparing for these days as if they might well come, when we have open conflict with China about carbon emissions?

A further, really nasty question while I’m at it – what will be the Tiananmen Square  of the battle to wrest control of out-of-control greenhouse gas emissions? And to which nation/system will it seed political advantage? Note: (this does not automatically assume that said political advantage from 1989 democracy demonstrations in Beijing accrued in the direction of anyone other than CNN).

You’d be right to ask what we/they might do to lay a few cobblestones on the high road? Mandate and subsidize solar roofing materials for all? Incentivise train taking? Look for ways to flatten out and reduce overall demand for power and energy? Pan really way out and see this not as a conflcit but an opportunity for cooperation and collaboration? Whoa… eyes… blurry.

Inquiring minds should want to know.

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The coming war of words (hopefully just that) over who is being green and who isn’t

China hits back at US criticism on human rights after the US needles China with human rights criticism, China responds with Human Rights Record of United States in 2008. From its preface: “As in previous years, the [United States’] reports are full of accusations of the human rights situation in more than 190 countries and regions, including China, but mention nothing of the widespread human rights abuses on its own territory.”

From Metafilter.

Ongoing and, as much as it has reached a few crisis flash points in the past, we’re largely aware of it and how to use it to our advantage, as are our 700 million Chinese brothers. But how long before these kinds of international conflicts extend to greenhouse gas emissions? Shouldn’t we lay in some provisions, keep some powder dry, as the sayings go? What would any of that mean?

One reason the Kyoto Protocol was rejected by the US government after being widely ratified worldwide was that it would have forced on us measures to curtail emissions whereas other countries would be able to continue developing/polluting for a while, putting the US at a competitive disadvantage, yada yada. But… what if we began preparing for these days as if they might well come, when we have open conflict with China about carbon emissions?

A further, really nasty question while I’m at it – what will be the Tiananmen Square  of the battle to wrest control of out-of-control greenhouse gas emissions? And to which nation/system will it seed political advantage? Note: (this does not automatically assume that said political advantage from 1989 democracy demonstrations in Beijing accrued in the direction of anyone other than CNN).

You’d be right to ask what we/they might do to lay a few cobblestones on the high road? Mandate and subsidize solar roofing materials for all? Incentivise train taking? Look for ways to flatten out and reduce overall demand for power and energy? Pan really way out and see this not as a conflcit but an opportunity for cooperation and collaboration? Whoa… eyes… blurry.

Inquiring minds should want to know.

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The college rip-off

This is exactly wrong, and the writer points out why it’s wrong in the very first graph:

One idea that elite universities like Yale, sprawling public systems like Wisconsin and smaller private colleges like Lewis and Clark have shared for generations is that a traditional liberal arts education is, by definition, not intended to prepare students for a specific vocation. Rather, the critical thinking, civic and historical knowledge and ethical reasoning that the humanities develop have a different purpose: They are prerequisites for personal growth and participation in a free democracy, regardless of career choice.

I think reporters and editors sometimes conspire to concoct counter-counter-intuitive story ideas just to see if we’re paying attention (we’re mostly not). The idea that the dearth of importance given to the liberal arts and humanities didn’t have a great amount to do with the present state in which our society finds itself would be laughable on its face if it wasn’t dispicable by its implications. You can’t know what green means when you’re tangled in the artifice and complexities of business jargon and technical rationales. The extent to which the business and engineering vocations have not been more informed by the humanities defines their finite reach, their very lack of sustainability.

If you went through a four-year college, were awarded a degree and were not required to learn a foreign language, you got ripped-off.

If you went through a four-year college, were awarded a degree and were not required to take any history courses, you got ripped-off.

Same with economics, the social sciences, literature and art history. The whole fascination with value in education has been about as wrong-headed as little towns begging W*l-mart to come in and destroy their downtowns. What’s it worth? You tell me. What’s trading how little you know for all the emptiness that comes with things you can be sure about worth?

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walking, working

Here’s a follow-up to the smallholder farms I mentioned yesterday. Microfinance and it effects on the environment.

I was walking back from doing a radio interview earlier, thinking about some of the conversation. I often talk about walking or biking to work, and it’s become a little bit of a cudgel in some ways. And in some ways, it should be.

But I can walk to work because I live in the small town where my job is. I was thinking about an article I saw recently, about the ever-crowded planet and the difficulty of doing something about over-population without crafting laws that are inhuman. There’s something to that, related to my ‘walking to work’ idea that “we can’t tell people where to live.”

But isn’t that what we’ve been doing anyway? Encouraging people to live in certain places, and selling them houses and cars without including the prices of the negative externalities of living/driving there. That’s how they could live there. Otherwise – and now many are realizing this – they couldn’t live there.

Anyway. As you were.

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Smallholder farms

Smallholders, or smallholdings, refer to small farming operations, usually commercial and usually the work of a single family. According to the Guardian UK, some 450 million smallholder households earn their livelihoods from plots of three acres or less; with their families they make up a third of all humanity.

Most of these enterprises are scattered throughout what we commonly refer to as the Third World. As WE now have several generations between us and growing things, that’s simply not the case for many others and there currently exists a burgeoning economy of smallholder farms across the globe – not in the sense that we typically think of burgeoning or economy – but they are, or are nearly, self-sustaining, a term with which we are becoming increasingly familiar. I have a colleague of African descent who has initiated several excellent sustainable development projects there and elsewhere, targeted at seemingly minor technological innovations (solar powered, small-quantity refrigeration, for ex.) to increase the profits of smallholder farms without changing their way of life in ways that alter the social fabric of their community. It’s a tough line but also the essence of the triple bottom-line idea that gives equal consideration to people, planet and profit.

The connection of many of these farms and enterprises to the larger world is the Fair Trade federation, of which many are familiar. I bring all this up because today is the beginning of Fair Trade Fortnight, as good a time as any to familiarize yourself further with the ideas and practices of smallholder farms, their plights, fates, hopes and destiny. Who knows, there could be some overlap with yours.