11 to 7 on the Paradigm Shift

There are great amounts of quality disparagements of business schools in general (intentional or not), and MBA programs in particular. The singular ethos, such as it exists, or lack of concern beyond profiteering for anything involving people, environments, good governance or even public safety opens a very wide field in which quite little is possible other than the growing of predator industries and the election of frauds.

But the hedge-fund guys and girls have largely gotten a pass for a long while now, though that just will not suffice and they refuse to have their lack of acumen for or understanding of the industries they destroy not properly respected for precisely what it is:

To me, this and so many other closings of quality publications leads to a broader question of whether journalistic outlets can even exist under this current age of capitalism. In short, I think the answer is basically no. Journalism can exist in a capitalist system of course, but only when the people who own these outlets have some higher purposes, at least in part, whether it is some belief in the truth or at least a willingness to accept relatively moderate profits instead of instant gold. But we now live in an era of venture capitalist schemes, where rank idiots stumble into massive wealth and believe that they are rich because they are smarter than everyone else. When this happens, as it did in the initial Gilded Age, these morons run roughshod over the world around them.

Just so. The jump comes from a ledge of dangerous combination: You make a great deal of money – however quickly – and also systematically evade any education that would have given you access to some self-awareness that might save you and others something a little more important than two points below prime. The serial misunderstanding of terms will be the subtext of the best work of many future historians and not-a-few extradition treaties. CRaP, for example, is a re-purposed acronym that should be far more useful that it is.

Green Opposition

Keystone-PipelineIt is enough to say that economics and environmental opposition have made building the Keystone XL Pipeline impractical. What this outcome may portend for the fates of other fossil fuels as the economics change may bare a little more fleshing out:

The company behind the Keystone XL pipeline has asked the US government to put its review of the controversial project on hold.

TransCanada says the pause is necessary while it negotiates with Nebraska over the pipeline’s route through the state.

The move came as a surprise as TransCanada executives have pushed hard to get approval.

Environmental groups oppose the 1,179-mile (1,897km) pipeline, saying it will increase greenhouse gas emissions.

Maybe they’re pulling it until President Carson can approve the travesty project. But perhaps the reckoning is that neither version of green opposition is sufficient to turn the tide against an legacy energy source – that the power of both and maybe every meaning of green is necessary to make the difference

Around to See It

Whether it’s color, cash, inexperience or the ins and outs of renewable energy development in general, I often find myself tacking away from the original intent of the meaning of the essence of this site. But then some new article comes out to bring it all back around:

Another conclave of the global great and good is looking at what should be done in the much trickier area of climate change. The premise of the Global Commission on the Economy and Climate is that nothing will be done unless finance ministers are convinced of the need for action, especially given the damage caused by a deep recession and sluggish recovery.

Instead of preaching to the choir the plan is to show how to achieve key economic objectives – growth, investment, secure public finances, fairer distribution of income – while at the same time protecting the planet.

The author provides us the Kennedy space-race analogy as an illustration of the kind of efforts and leadership needed to curtail the effects of climate change, which is fine and well-meaning enough. But then he drops the second Pop-Tart® by suggesting that we need first to show/guarantee business the long-term benefits of greening the economy. I have one: how about you get to still have an economy?

That’s what the whole question is about: do we have enough greed to stifle the impulse toward self-preservation?

Okay – no one can use Enough Greed as a band name or an album title, because I just thought of it and realized its multitudes. Individual songs are fine as long as WDGM is ID’d in the bridge someplace.



2nd order Skullduggery

I used this phrase once at lunch today (sorry, D) but it came back to mind reading this Felix Salmon review of new books by Tim Noah and the Krug-meister:

Each of these books, in its own way, is an attempt to disabuse the rich of precisely that idea — to explain that while they’re doing perfectly well for themselves, an overwhelming majority of the population, the bottom 80 percent to 90 percent of the country, is struggling hard and has tasted none of the fruits that have been showered on the wealthy.

Take the quarter-century from 1980 to 2005, during which markets soared and America got indisputably richer: over that period, Mr. Noah, a columnist for The New Republic, says that fully 80 percent of the nation’s income gains went to just the top 1 percent. Most Americans’ incomes stagnated, with the middle class getting nowhere. Mr. Krugman takes a shorter view, and demonstrates that the same group suffered dreadfully in the financial crisis, and that its plight continues today. Both of them try to inject urgency back into the national debate, spelling out how unacceptable the status quo is, and calling on the government to do something about it as a matter of the highest priority.

It’s class warfare alright, as surely as this phrase is verboten across the airwaves except as an antidote for any talk about income inequity. It takes journalists with the guts to call this what it is, over and over, and Salmon is one of them. He’s hard on Dr. K, too, but he should be – that’s the point of criticism, even if you agree with the work. We’re not critical enough. We don’t call a spade a spade or a crook a crook when we need to, and this is the skullduggery to which I refer. The corruption runs deep, but our own complicity in overlooking and excusing malfeasance and greed is its chief ally.

More from Less

Nice catch from Klein via Yglesias:

Robert Frank, an economist at Cornell University, is one of the more innovative tax thinkers I know. In particular, I’ve always been partial to his proposal for a progressive consumption tax (pdf). So I ran the plan by him, as well. “The progressive budget proposal is of course an enormous improvement over the bizarre Ryan budget,” he said, “which for all its chest thumping about facing up to the hard choices, does nothing — absolutely nothing — to reduce long-run deficits.” But like Gale and Burman, Frank wanted to see more simplification and reform. In particular, he wanted more attention given to what we tax with an eye toward two-fers: raising more money off of things we want less of. “When we enter congested roadways, or buy heavy vehicles, or drink to excess, or emit CO2 into the air, we impose costs on others,” he says. “Taxing such activities kills two birds with one stone: It generates much needed revenue, and it curtails activities that cause more harm than good. Because these taxes make the economic pie bigger, it makes no sense to object that we can’t afford them.” He recommended this piece (pdf) for more on those ideas.

Emphases from the link. But the key: raising more money off of things we want less of. The whole idea of a two-fer has only yet manifested itself in the heads and hearts of those who want to keep their tax money and penalize the poor, children and the elderly by teaching them some kind of lesson.

But Frank’s is the real way to get to the things that matter, one that also has many corollaries, among them: make sure more people finish school and can go to college, wherever they are from, so that they can get jobs and spend a long productive life of at least intermittent happiness paying taxes. Hello?

Banning certain kids from college is stupid. Not taxing the externalities of energy production, ditto.

Drilling It into Your Head

NPR has apparently found a very sturdy drum and they’ve been beating it night & day. This Morning’s Edition:

President Obama’s approach to domestic oil drilling has shifted over this year. Taken together, those shifts have managed to anger just about everyone in the oil drilling debate at one time or another.

Great. 100% chance of this, right? What an excellent, safe, can’t miss, no interest news story. Dog bites dog. We’ll trot out an oil industry shill and an officer of the Sierra Club and they’ll light up the night with worry. Think I’m kidding?

“It’s risky, it’s dangerous, and there’s a better way to meet America’s energy needs than to engage in a set of activities that are proven to be unsafe,” says Michael Brune, executive director of the Sierra Club.

“Why six months? What does that mean?” asks Rayola Dougher, a senior economic adviser for the American Petroleum Institute.

Well, Rayola, part of what it means, if you must know, is that we’ll call off all drilling for six months and try to find out WTF happened to make all the shellfish have a sad when all they were doing was preparing to become food. It (the story) trudges on and on.

But then, this evening, they were striking up the band again. I mean, I only have a ten-minute drive both ways. This time it was workers from the oil industry, including medical personnel living along the Gulf who treat injured workers. It seems that they are all for not having another accident in the Gulf, and even understand some the malformations the industry itself has performed on the wetlands guarding the land and sea from each other. But

The uncertainty has rippled through the oil services industry, and puts some workers in a difficult position as they consider what the moratorium can achieve.

Lavonne Martin of Baton Rouge works for a company that provides offshore medical care.

“As an environmentalist, as a fisherman, as someone who loves our Louisiana coast, I understand it. … However, as somebody who, you know, makes a living working in the oil industry, I’m very concerned about it and what the future … economic impact may be,” Martin says.

The environment and all that… becomes a blur when connected to livelihoods through the paycheck, especially for those so close to the action. There is truth to this and it is painful and complex – the withering of a way of life, and specifically the means for powering it but not just that, is very difficult to separate from the idea that life will continue. Much less how it will. There are no poetic terms for this, not at first. These are only the first hard questions. But the reporting seems to still hold the outcome in the balance, to still pull for business and people who depend on a paycheck (!) to prevail, as if we can sustain a way of life that is being destroyed by our efforts to sustain a way of life. It’s that or nothing so that it must be.

And the preoccupation with uncertainty is… certainly curious. We’ve come to absolutely depend upon some outlandish by its very premise level of confidence in what to expect – or else panic sets in. This type of caution, need for guarantees, this quest for certainty, especially with regard to large scale endeavors, leads eventually in all the wrong directions.

Maybe we should actually embrace uncertainty for a while. Maybe it could mean many of these same people would be as loyal to and hardworking for schemes that weren’t concentrated on a dwindling resource. Who can be sure?

America: Too American?

If there are two consecutive sentences in this long article one of which does not smack of the utter idiocy of our present epoch, I can’t find them. The whole thing is summed up in this one sentence:

So thousands of companies here remain stubbornly small — all of which means Italy is a haven for artisans but is in a lousy position to play the global domination game.

Game. Set. Match. Because if you’re not trying to do that, why do anything? Positively everything that is wrong with our present trajectory is contained in that one little nugget. Delusions of scale? Check. Outright antagonism toward localized ventures? Got it. Condescension toward quality as value? In spades.

The thing is, this is also perfectly indicative of the tone of all business reporting; anything that can be interpreted as gains for workers is seen as negative, as is anything which diverts revenue from shareholders. It’s all of an anti-human, anti-person scale piece. As if it is inevitable that the high-quality fabric in question would give way to lower-priced faire from elsewhere because, well, that’s how we define things: down.

But it is rich how Italy is castigated for its lack of competition, as if the U.S. was some kind of hot bed. It is true that companies do most anything to drive others out of business, though in the sense freedom is just another word for a race to the bottom. Even the article sites the thousands of small bakeries in Italy vs. Quiznos here. Enough said. I guess the entire meaning of cheap never occurs to anybody.

Coming Soon

Very dour outlook in Nevada.

The decay in Vegas doesn’t stay there: It reverberates throughout the state. “Coming Soon” signs have been pulled down across the city, because nothing is coming soon other than more foreclosures. The Nevada landscape is pockmarked by empty condos and casinos, some of them fully built and sitting there empty, others are shells frozen in time. When analysts talk abstractly about Wall Street sucking capital out of the real economy, these stalled construction projects are the on-the-ground reality. “60% Reduced Prices” promises one empty condo development.

The $3.1 billion Fontainebleau Las Vegas construction project sits nearly complete but the lender pulled out and everybody is suing everybody else. The first Ritz-Carlton in the company’s history to shut down is in Las Vegas.

And as the article title asserts, this is the future for much of the country. I wish I could say or you could think that this is wholly attributable to the economic recession and unrelated to the causes underpinning our crisis of ecology, but we can’t. Unsustainable growth, over-building, mindless reliance on cheap materials and energy, exacerbating resource scarcity… it’s all there. There is greed but also ambivalence about consequences that is too obvious to ignore, that allows for the kinds of rapacious development that built Las Vegas into what it is – which is a gilded yet crumbling metropolis, in the desert, no less. The human toll is tragic and cannot be quantified only by the number of empty subdivisions, but the region’s supposed rebound will be divined in corporate dividends and ephemera like new housing starts. Might as well be reading entrails.

And on top of it all… Fontainebleau? Really?


It always seems like your eyes glaze over before you get to the end of the word. But, hyphenate it… Hey! now we’re talking.

Or they were talking – Washington Post blogger Ezra Klein and James Galbraith.

EK: You think the danger posed by the long-term deficit is overstated by most economists and economic commentators.

JG: No, I think the danger is zero. It’s not overstated. It’s completely misstated.

EK: Why?

JG: What is the nature of the danger? The only possible answer is that this larger deficit would cause a rise in the interest rate. Well, if the markets thought that was a serious risk, the rate on 20-year treasury bonds wouldn’t be 4 percent and change now. If the markets thought that the interest rate would be forced up by funding difficulties 10 year from now, it would show up in the 20-year rate. That rate has actually been coming down in the wake of the European crisis.

So there are two possibilities here. One is the theory is wrong. The other is that the market isn’t rational. And if the market isn’t rational, there’s no point in designing policy to accommodate the markets because you can’t accommodate an irrational entity.

You should read it. So much of the conversation about deficits, recessions, taxes and stimulus that goes on is just wrong. It’s a way to punch a hippie, push an agenda, empower corporations, screw the poor or some combination of all of these. You’d have to understand, very deeply, a lot of this stuff to be able to call bullshit on the faux-populist balderdash that gets most of the play most of the time (for instance, the business page in any newspaper taking a sour attitude toward statistics or policy measures that benefit workers). This guy does. Check it.

Going Away

Not me, this time – malheureusement. But oil refineries. They’re going away. They’re not leaving today. But they’re going away. The article makes for an almost wistful, Christmas Eve nostalgia for how, pretty soon, we’re not going to have them to kick around any more. And boy will we regret that. Except we won’t.

Gasoline demand, which many analysts had long expected to keep rising for decades, is down sharply in the recession. And refiners are increasingly convinced that even after the economy recovers, demand will not grow much in coming years because of the rise of alternative fuel supplies and the advent of tougher efficiency standards for automobiles.

Plagued by boom-and-bust cycles of rapid expansion followed by sharp belt-tightening, refining companies have often struggled to operate at a profit. That is a contrast to the production side of the oil business, long a road to riches.

“Oil production creates wealth, but oil refining has often destroyed it,” said Costanza Jacazio, an analyst at Barclays Capital in New York.

Even so, these are unusually harsh times for oil refiners. The recent drop in gasoline demand could result in more refineries being closed in the coming year.

Talk about shock and… aw. But this has very little to do with eco-anything, really. It’s just an economic situation, itself in transition, and away from where the fossil fuel industry thought they would ever go or be, which is not far from here – or actually about 2007. This is itself a problem with the imagination of your average B-school go-getter, seeing just far enough to be able to carve out their own little piece of the bottom line as it exists as the status quo. Then having the proclivity to channel all remaining energy into protecting that little slice of heaven. Instead of being able to recognize the shortcomings even of a system beneficial to them and foresee workable, if not equitable, adjustments to that system. Imagination fail, like a tractor beam. Like a circle, baby.

And this is transferrable to many issues and realms, including the political and HCR. If you doubt that, check out another op piece today, and witness the depravity that was Phil Gramm circa 1993. Hunted with dogs, indeed.