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June 01, 2010

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Thank you, sir, for yet another great observation and succinct description of the yeasayers of our world, and where we're all headed.

This article indeed comes off a tad bitter and cynical, although I've grown comfortable enough with your tone to accept that. Offering positively framed constructive criticism is only rewarding and worthwhile if you believe your audience hears the message. In this case, I cautiously join you in your doubt as to whether our culture is learning anything from our current state of woe.

But that said, I remain optimistic that we can and will learn from our errors soon enough to right this train before completely derailing it. And I accept your skepticism of such a comment as long as you agree not to completely write me off as yet another doe-eyed opportunist. Let's call it a gentleman's bet details forthcoming.

And by the way, I make no claims about our readiness to fix what's broken on a national level in the immediate future. We're in nearly 100% agreement with regard to the political landscape of the U.S. But I'm still up for a seemingly impossible challenge of finding the political will and resolve to fix something somewhere that appears completely doomed.... Maybe something to do specifically with AZ.....

PT wrote:

"But that said, I remain optimistic that we can and will learn from our errors soon enough to right this train before completely derailing it."

This is exactly the subject of Mr. Talton's column, PT. Your optimism is emblematic of the "brightside" that America has become.

PT, it is too late. We had our opportunities to prepare for what the future will bring us. Instead, we chose to ignore this future on the hope that technology will save us.

The post-partisan, post-racial, technocratic Obama is good at brokering deals but terrible at galvanizing a nation to re-invent itself. Rather, it's his conceit that America can jump start its economy to the status quo ante and then make a leisurely transition to alternative energy as the oil runs out. Paralysis should be enjoyed, not fretted over.

Obama's gift for conciliation notwithstanding, this nation is angry to the point of incoherence. The great bargain of the post-war era - work reasonably hard and be rewarded - is collapsing. There's no one leader or leadership class that can explain the problem. That is, except for the Right and its toxic Dolchstoss theory (liberals ruined America!). In this leadership void, an unspeakable beast is stirring. Let's call him Newt.

It's rhetorical extravagance to call this era American Weimar. But unless America finds the leadership to calm the hysteria, there will be a slow-motion horror replacing civil society. It's already happening in Arizona. We're trapped by bad choices that make future bad choices all but inevitable. It's a nightmare we can't wake from. Our eyes are wide open but we're otherwise paralyzed.

I share your frustration, but I'm tired of arguing with morons. For example, a friend attended the Anti-SB1070 march on Saturday and posted a few pics on Facebook. Immediately there was the usual Kook response (although from NJ). A couple of zonies (myself included) try to explain why it's a bad law, but the posts end with her saying her husband is a Central American immigrant and he supports SB1070 too and has never had a problem travelling thru AZ. And when I look at her photos, her husband is whiter than I am! KOOKS = MORONS! and slavish ones at that.

Those who know history are doomed to watch it be repeated.

I started reading the new Richard Florida book last night "The Great Reset" - and he takes a pretty optimistic view. He compares the current recession to that of the 19th century, which seems to rhyme - it was caused by mortgage defaults due to a housing bubble and financial "innovation". Florida does say, however, that these "great resets" take decades and we are only just beginning this one. Real pain may be around the corner for all of us.

Hey fellas & gals - I hope you will be following Blago's trial in Chicago; it began today and looks pretty juicy, perspective-wise.

Kevin,
though I agree with some of the things Florida has to say about urbanism, in my opinion he is something of a charlatan. He certainly knows about the resource problems we're facing but I don't think he appreciates the scale of the problems and how fundamental and new those problems are to our industrialized society. Instead, he envisions megaregions where more of the creative, highly-educated types cluster to lift off into ever higher spheres of the 'knowledge' or 'service economy'. That's wishful thinking when industrialization, on which the 'service economy' is based on, is coming apart at the seams and will be under ever greater pressure in the coming decades. His reasoning which relies on historical examples of previous 'resets' is flawed insofar as we didn't have a fundamental resource problem in the 1870s and 1930s and not so much built capital to carry around while trying to build something (whatever that is) new. Everything follows a preexisting path until it doesn't. Overall, his theses with their correlative logic don't strike me as particularly scientific. Geography seems even more "dismal" than economics.

There are those videos on The Atlantic website, in one of which he talks about the chances of Phoenix & Las Vegas. One half sensible, one half half-assed:
http://link.brightcove.com/services/player/bcpid73754497001?bctid=86073630001

Here's some optimism for you:

(1) The easiest way to stop sprawl is to eliminate federal roadbuilding subsidies. These account for most local roadbuilding costs and thus are a huge subsidy for local developers.

Do you think that local governments, faced with picking up the tab on their own, will legislate huge new tax increases to finance new suburban and exurban development? No.

Now imagine that the federal roadbuilding funds are instead given to cities to build mass transit and revitalize the city centers. What kind of incentive would this produce?

This is easy, and works from the top down. It doesn't take money away from cities, but simply redirects it. It doesn't depend on 50 state legislatures adopting progressive transportation policies. It doesn't require new taxes. "This is your lollipop." (snatch!) "Want it back? Here's what you need to do: buses, subways, light rail, dedicated bike lanes and urban bike trails, and so forth."

(2) Unemployment can be lowered by creating new jobs relative to the size of the labor pool -- and the near-term prospect for this looks poor; but the little-commented other side of the coin is also possible: if the labor force decreases relative to new job creation, unemployment decreases.

We're looking at demographic trends where the aging of the baby-boomers and the relatively small size of the "baby bust" cohort (those born 1965-1975) means that the labor force is growing slower and slower: in fact, were it not for Hispanic immigrants (largely illegals) there would be widespread labor shortages by 2018.

Instead, the disparity between projected job growth and projected participation in the labor force, will likely reduce unemployment in ways that economic growth probably can't, over that time period. (I'm still looking into this so I'll post some links and further comments when (if) I get it figured out and have the online time.)

(3) Peak-oil doomsters want to have their cake and eat it too. "All this as the developing world's demand for oil is skyrocketing." The developing world is based on export economies (e.g., China). Export economies need developed countries to buy their products. If oil prices go too high, economies slow down, and that chokes off demand for both exported products and for the oil that exporting producers need for manufacturing, and oil prices sink again. We've just seen an example of this.

"...and if oil prices fall temporarily, it is a sign of a worse economy".

Well, first, worse doesn't mean catastrophe or even recession, it means slower growth. Two or three percent a year annual increase in GDP instead of five for the U.S., for example.

Second, it isn't strictly true. Oil prices have been falling recently (down to $72 yesterday, from $84 in April) yet the U.S. economy got no worse during that time.

(4) Solar energy doesn't need to use up enormous amounts of water, provided it relies on solar panels rather than solar thermal and related technologies.

Sunlight is FREE! There is NO COST to generate it. There is a large up-front cost to build solar farms, and a much smaller ongoing maintenance and operations cost for the farms. If these are publicly financed and run, on a non-profit basis, we are guaranteed to reap cheap, green energy that can largely replace coal burning electrical plants.

The biggest hurdles now (other than the political) are storage of solar generated electrical energy, and improving the technical efficiency of collector panels. It probably makes good sense to delay the actual construction of these plants until the details are worked out and solar panel technology develops further, instead of rushing into it now and incurring additional capital costs later when major portions of the network need to be replaced by more efficient products and methods. But when it is built it needs to be done on a scale hitherto unseen in order to enjoy the economies of scale which will bring costs down still further.

I don't see any reason why solar generated electricity (used in lieu of coal-burning plants) can't be adapted to the existing transmission network. Do you?

And don't forget: if oil prices DO skyrocket, alternative energy costs just look more reasonable.

(5) I don't see a great deal of evidence from either side. Those who say that it's "too late" lack good arguments. Pessimism isn't an argument. Those who say that technology will save us are hand-waving, but at least their hand-waving has proven true at every critical point of American history thus far.

P.S. In case I haven't made it clear, when a private solar company invests large amounts up front, its shareholders want to recoup those costs quickly and THIS is what drives high relative costs per megawatt when compared to coal-burning plants.

If the federal government builds huge solar plants, owns them, and operates them on a non-profit basis; and if it finances this creatively (e.g., taxation, long-term borrowing through sales of Treasury securities, "quantitative easing", stop a war or two and divert the funds used over a decade, etc.) then it doesn't have to charge large sums to electricity users right away (or at all). The big cost is up-front. After that, it's all gravy. Sunshine is FREE!

Here's an illustration of local dependence on federal grants and other subsidies for roadbuilding, courtesy of "The Transportation Lobby" (a project of the Center for Public Integrity):

"Just last month, for instance, Congress passed its appropriations spending for 2010, including more than $52 billion for highways and transit. Most of this money flows to states and transit agencies to be spent at their discretion, but hundreds of local governments circumvented that by winning earmarks from their congressional delegations.

"Hawaiian members, for instance, marked more than $3.4 million for the Kapolei Interchange Complex. Dubuque won $389,600 from its Iowa Senators to go towards the construction of an arterial road to help divert truck traffic from its downtown and neighborhood streets; officials there have been trying unsuccessfully to fund the road for more than a decade. Neither earmark will fund the entire project, so local officials will likely be back to ask for more. In both those cases, the state will provide little or no matching funds."

http://www.publicintegrity.org/investigations/transportation_lobby/articles/entry/1911/

Note that local governments get most of their road building funds from state funds, and most state funds for road building come from federal grants and other subsidies; so it doesn't matter whether the loophole of earmarking exists or not: the local sprawl industry continues to depend directly or indirectly on federal funds for its existence.

"It probably makes good sense to delay the actual construction of these plants until the details are worked out and solar panel technology develops further, instead of rushing into it now and incurring additional capital costs later when major portions of the network need to be replaced by more efficient products and methods." - Emil Pulsifier.

Argh. Please read my blog. The solar tipping point has already been impeded for more than a decade in sunny Arizona. Solar today produces less than 1 percent of Arizona's electricity. The technology is proven and durable. Even decades-old, first-generation module designs are still producing significant energy. Conversion efficiency means nothing; life-cycle cost per watt means everything. There is no technological nor economic reason to delay. Delay will only slow further improvements.

"when a private solar company invests large amounts up front, its shareholders want to recoup those costs quickly" - Emil Pulsifer.

Capitalism was the child of a world of ever-increasing energy inputs. In a world in energy descent, Capitalism, as it has been practiced, will instead throttle prosperity.

"Rate Crimes" wrote:

"[Solar] technology is proven and durable. Even decades-old, first-generation module designs are still producing significant energy. Conversion efficiency means nothing; life-cycle cost per watt means everything. There is no technological nor economic reason to delay."

Certainly, conversion efficiency will affect up-front costs (more efficient panels require fewer panel-acres to generate the same amount of electricity). That would affect the price-tag of a public project, but it need not financially stress the public users of its electricity since, once constructed, the cost of the primary production input (sunlight) is free.

But if more watts are produced over the life of the panel, because conversion efficiency is greater, then conversion efficiency IS an input factor in determining life-cycle costs per watt.

Still, you might well be right. And, multiplied over several states and regions, the jobs creation by such a project would be phenomenal. Talk about killing two birds with one stone!

Admittedly, my "nothing" was an exaggeration whose aim was to emphasize that valuation should center on life-cycle costs. To the extent that conversion efficiency reduces materials, manufacturing, and delivery costs; and to the extent that it reduces the probability of failure, conversion efficiency lends value. However, quality design, manufacturing, and installation are much greater factors in such a valuation than is the conversion efficiency of any particular technology. Conversion efficiencies are already high enough to be economical. And while the conversion efficiency of cells has improved at a steady pace in the lab, these incremental improvements have been outpaced by greater improvements in module materials (glass, coatings, contacts, etc.), manufacturing, and delivery. Any additional improvements in conversion efficiencies may allow for more flexibility in design and wider application, but improved conversion efficiency will not necessarily change the economics.

Squeezing another fifteen modules onto an acre has little value: if those modules’ purchase price is twice as high and they need to be replaced twice as often (again, I exaggerate in order to emphasize the issue).

A poor understanding of efficiency is often wrongly used to argue against solar, or to use as a ‘red herring’ in the broader debate of energy policy.

Awinter,

"That's wishful thinking when industrialization, on which the 'service economy' is based on, is coming apart at the seams and will be under ever greater pressure in the coming decades"

True, however, I don't find flaws in geographical analysis. Your own point here rests on geography - that "resource limitations" (by that I'm assuming you mean peak oil primarily) will change the economic landscape of America (e.g. fewer suburbs and large cities). This may well play out - but it all depends on the rate of depletion vs. the rate of response and I don't think anyone really knows the answer to that.

If you think without political boundaries on the map, service economies still rest on top of industry in America. The location of industry has changed, but globalization increases everyday. So those relationship between economic sectors are no longer at the national level, but international.

It's true that we should protect key domestic industries that are vital to our survival - like agriculture - but do we really need the factories of China that produce mainly cheap plastic crap in this country to thrive economically? I doubt it. We'd be better off focusing on building the things that will matter in the future: energy systems and trains. Much more is still needed but I think Obama has made a good step in the right direction with his spending priorities in these areas so far.

Another idea that occurs to me: oil is a key component of transportation costs; goods exported from China to America must be transported here, and then distributed internally as well. If oil prices did manage to reach a much higher equilibrium point than at present (significantly higher than $100 per barrel in fact) then Chinese goods would no longer be such a bargain. Demand for them would drop, and so, therefore, would China's demand for oil for its production, since it would be producing less. That in turn would bring the price of oil down again. Note that this is in addition to the decrease in demand resulting from the economic disruption as higher oil prices slowed the American economy down.

It would also usher in a new era of manufacturing either at home or closer to home (e.g., Mexico, or even the southeast or southwest United States).

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