Sunday, July 26, 2015

How idiotic is 'market-based economics'?

This idiotic. Joseph Stiglitz has been writing books for nearly two decades now trying to impress upon rightwing economists the idea that if people do not have income they cannot spend.

You would not think it is a hard argument to make. But you would be wrong.

 Whether or not the program is well implemented, it will lead to unsustainable levels of debt, just as a similar approach did in Argentina: The macro-policies demanded by the troika will lead to a deeper Greek depression. That’s why the I.M.F.’s current managing director, Christine Lagarde, said that there needs to be what is euphemistically called “debt restructuring” — that is, in one way or another, a write-off of a significant portion of the debt. The troika program is thus incoherent: The Germans say there is to be no debt write-off and that the I.M.F. must be part of the program. But the I.M.F. cannot participate in a program in which debt levels are unsustainable, and Greece’s debts are unsustainable.
Paul Krugman, also writing in the New York Times, has been hammering this point for years. But faith-based economics is a barrier that no force in the universe can penetrate.

I have to say that the business about the milk makes Lenin's arguments about capitalism's suicidal competition for market share sound good:

Consider the case of milk. Greeks enjoy their fresh milk, produced locally and delivered quickly. But Dutch and other European milk producers would like to increase sales by having their milk, transported over long distances and far less fresh, appear to be just as fresh as the local product. In 2014 the troika forced Greece to drop the label “fresh” on its truly fresh milk and extend allowable shelf life. Now it is demanding the removal of the five-day shelf-life rule for pasteurized milk altogether. Under these conditions, large-scale producers believe they can trounce Greece’s small-scale producers.
In theory, Greek consumers would benefit from the lower prices, even if they suffered from lower quality. In practice, the new retail market is far from competitive, and early indications are that the lower prices were largely not passed on to consumers. My own research has long focused on the importance of information and how firms often try to take advantage of the lack of information. This is just another instance.
Sound familiar? It should if you live in Hawaii and cannot buy fresh milk at any price. (I used to get it sometimes at Foodland -- it cost $10.80 a gallon -- but now it is not available at all. And I can see the remains of Maui's last dairy from my living room window.)

Size matters. If the situation were reversed, and it was little Greece that was well-governed with hig tax compliance and big Germany that was profligate and corrupt, would the "market" make the same moral arguments about who should suffer? No:

 The project’s first complications stemmed from Schwarz and Wowereit’s ever-changing ambitions. With construction under way, Schwarz, seizing on increasing forecasts for air traffic (up to 27 million passengers at that point), had von Gerkan add north and south “piers” to the main terminal, turning it from a rectangle into a “U” and dramatically enlarging the floor space. Schwarz also dreamed of making the airport a Dubai-like luxury mall. Airports earn significant money from nonaviation businesses, the FBB boss noted, so why not insert a second level, jammed with shops, boutiques, and food courts? Von Gerkan derided what he called the Vermallung of the airport—its “mallification”—but he capitulated to Schwarz’s demands.
The whole story about Berlin's unusable $6 billion airport repays reading. Just remember while reading who is the lecturer and who the lecturee when it comes to fiscal responsibility.

The Unite States is not inncent in all this. Our embrace of Greece's corrupt, rightwing dictatorship helped contribute to the lack of faith by today's Greeks in their government. Stiglitz says he believes in democracy.

It is too bad the United States does not.

UPDATE: Not really connected to the issue of Greece but amusing. It appears it isn't that easy to build a flat expanse of concrete.

A RELEVANT UPDATE: Another economist -- Robert Shiller, famous in real estate -- notices a flaw in efficient markets religion. Better late than never, maybe.

Saturday, July 25, 2015

Book Review 350: Stalin and the Bomb

STALIN AND THE BOMB: The Soviet Union and Atomic Energy 1939-1956, by David Holloway. 464 pages, illustrated. Yale paperback.

Except for one astonishing, unbelievable and unexplainable omission, David Holloway’s “Stalin and the Bomb” is a remarkably full account of the first nuclear arms race.

At times, it has the page-turning appeal of a howdunit — we know the reds got the bomb, but which were the turning points, which the key decisions, which the intelligence coups, which the lucky breaks?

There really never were any atomic secrets to steal. Competent physicists everywhere all drew the same conclusions immediately when fission was discovered in 1938. Russia, somewhat surprisingly, had plenty of competent physicists.

The first chapters rehearse the history, how a country where most people couldn’t sign their names managed to have a substantial physics intelligentsia; and how the bleeding, hungry early USSR found the resources to keep training physicists. Many were revolutionary soldiers before being sent to physics institutes or engineering schools. Holloway does not say so, but few would have been educated under the tsar. Whatever else it did, the revolution tapped Russia’s best resources: brains.

In 1940, Russia was in a position to start building an atomic bomb. It had sufficient industrial and intellectual resources, but no uranium.

Until 1938, the radioactive element of interest was radium. The West got its radium from pitchblende ores in Czechoslovakia and Congo; uranium was a nearly useless by-product. Russia got its radium from deep brine, with no uranium. No systematic search for uranium deposits was made until 1944.

More seriously, there was no political commitment to a bomb. Holloway concludes that Stalin and Molotov did not really believe a bomb could work. Thus he reinterprets Stalin’s famously cool response to Truman’s tip at Potsdam that the U.S. had a new bomb of “unusual destructive force.” Stalin was not just hiding his intelligence success; he thought Truman was bluffing.

When it turned out that the U.S. had a way to conclude the Japanese war, Stalin was unpleasantly surprised. He was now unable to pick up easy gains in southern Sakhalin and  Hokkaido, or to have a say in the occupation of Japan. In Europe, he was now open to being outflanked diplomatically. And he was obliged to divert resources desperately needed for reconstruction to a crash bomb program.

When it came later to a decision about the “Super” or hydrogen bomb, that offered Russia a chance to catch up or even leap ahead and make up for the misjudgment of 1940. But here is where Holloway unaccountably gets it all wrong.

He judges that there was never any real chance that Stalin in his fear would have decided against an atomic arsenal, and that there was never any chance for international control. But for Stalin the issue was completely simple: The USSR was under relentless (if weak) armed attack by the United States. Few Americans knew it, possibly not even Truman, but Stalin knew.

Therefore the American proposals for international control or debates about whether to build the H-bomb were interpreted in the Kremlin, correctly, as trickery.  

So much for the politics of nuclear stupidity. Most of the book is about the scientists and how they operated — and why they willingly and earnestly worked to give Stalin (more correctly, Russia) a bomb, even those who were pulled out of prison camps to do it. Americans don’t want to admit it, but Russians who remembered tsarism thought Bolshevism, even Stalinism, was better.

“Those who took part in the project believed that the Soviet Union needed its own bomb in order to defend itself, and welcomed the challenge of proving the worth of Soviet science by building a Soviet atomic bomb as quickly as possible.” They also, he thinks, maintained a certain civic independence that had been eliminated from the rest of society, with implications for the future.  

The key figure was I.V Kurchatov, head of the Soviet bomb effort. Unlike the Americans, the Russians picked a scientist, not a general, to direct their bomb program. Kurchatov was a talented administrator and had a gift for getting men who did not like each other to work together.

Holloway agrees with the general opinion that spying shortened Russia’s trip to atomic weaponry by only a year or so, at most. It appears that having Kurchatov was worth at leastas much as having  Klaus Fuchs.


Wednesday, July 22, 2015

The collapse of Saudi Arabia

It is not far off. Before too long, the rising pan-Islamic movement will make its move, probably starting in the disaffected eastern (and oily) regions, and the Saudi army will refuse to fight, just as the Afghan army will not fight, the Iraqi army will not fight, the South Vietnamese army would not fight, the Guomingdang army would not fight.

As always, the United States will be backing the wrong horse -- horses in the case of the Republic of South Vietnam, where no one wanted to die to preserve Madame Thieu's racehorses.

So the ARVN soldiers lived, many of them. The anticommunist idiots who have controlled American foreign policy since 1914 cluck and moan about the terrible conditions they ended upliving under. Conditions would have been worse below ground.

In Afghanistan, there has been no effective move to present the people with a government worth fighting for, so they don't fight for it:

 The urge to desert is often driven by more than just facing danger, he said. Many soldiers cannot access their pay, because it can be drawn only at a bank branch in the far-off provincial capital. “Your family is calling you and telling you they have run out of food, but you cannot send them money,” Lieutenant Javed said, describing the plight of soldiers who are often the sole breadwinners for large families. “This is depressing.”

Periodically cut off by the Taliban, the soldiers have not always been able to evacuate casualties out of the district. Their dead often decompose under the hot sun for days — a particular source of anxiety, given the Muslim imperative to conduct burials quickly. Sometimes, soldiers have beseeched local men in the town to accept their dead and contact foreign groups like the International Committee of the Red Cross that might be able to get the bodies back to the provincial capital more quickly.
Lieutenant Javed said the prospect of remaining trapped even in death weighed heavily on him.
“I am not afraid of death,” he said. “But I am afraid of this sort of death. Will your body ever arrive safely to your family?”
The people know when they are being oppressed, even if the smarties in Washington cannot figure it out. The Russian Empire, despite its ruthless brutality and economic/military power, fell because the people knew that the tsar had sold the bones of the soldiers who died defending him for fertilizer. (At auction, a very capitalistic enterprise, which helps explain why, when the revolution came, it was anticapitalist.) If individual Russians had not heard of that episode, they all understood, from personal and cultural experience, that the government cared nothing for them.

And governments must actually care. Occasional palliative initiatives, like those sometimes experimented with in Saudi Arabia, will not change attitudes. Especially not in Arabia will the army fight to preserve the princes who overwhelmingly mock and ignore their deepest religious principles.

Why has the United States almost always backed the antipatriotic horse? Because it is easier to deal with corrupt crooks, like Chiang Kai-shek. Because of an unreasoning fear of Bolshevism. And because the power elite in this nation has always (except at times during the New Deal) subscribed to the individualistic, antisocial view of our polity -- and worse, of others' polities.

The belief -- disgustingly explicit whenever you speak to the Tea Partiers but implicit with the rest -- that "if I am doing well, then the whole mechanism is improving and doing well, and therefore whatever benefits me in the short run is the most desirable course of action" makes good government difficult even in stable societies, impossible in societies under stress and attempting to evolve toward modernity.

That is why we choose the crooks and never the true patriots -- people who care more about their country than about themselves, like Ho Chi Minh, and not like Hamid Karzai. That is why the people who oppose us look like socialists, not because they embrace a particular economic theory devised by Marx, Morris or Kropotkin, but because they are social, they conceive of themselves as belonging to a social group -- an organism, in national terms, something bigger than themselves, bigger than their clan.

It can get complicated, particularly in an artificial state likeAfghanistan where ethnic or religious loyalties come first and national loyalties come not at all.

But because the United States refuses to back popular movements, it keeps losing.

Wednesday, July 15, 2015

Tweetle dee-Tweetle dumb

 Dana Milbank in the Washington Post eviscerates the knee-jerk Republican Insta-response to the announcement of the Iran Nuclear deal:
But Graham and his congressional colleagues are not reserving judgment until they know the facts. This is, perhaps, to be expected after 47 GOP senators sent a letter to Iran’s ayatollahs trying to block an agreement even before there was one. Sen. Tom Cotton (R-Ark.), author of that letter, called the new deal “a terrible, dangerous mistake.”
This is legislating by reflex — a mass knee-jerk by the Republican majority in Congress. Those who howled “read the bill” during the health-care debate couldn’t be bothered to read the nuclear agreement before sounding off.
Well put. But let us also shoot the messenger. The Republican leaders did not stand up in the well of the House or Senate to read a statement of opposition. Nor did any of them make a speech to the people in their districts, or, perhaps, sit down with the editor of their hometown paper to explain the nuances of their assessment.

They Tweeted.

It may be that Twitter is effective for getting sound-bite position statements out to a politician's supporters, but it can only encourage simple-minded responses and -- worse -- simple-minded political positions. Some of those twitterers were members of the United States Senate, which in the old days liked to describe itself as "the greatest deliberative body in history."

It never was that, but it was a noble aspiration.

This indictment of Twittledum-Twittledumber political noise applies equally to Democrats when they use it. It just happens that the occasion of a nuclear agreement with Iran is the worst possible issue to resort to simplistic popspeak.

Some journalists -- including some whose work I respect -- have resorted to Twitter, too.

I don't get it. I particularly don't get the Tweets that include links back to earlier tweets. This is not convenient and by shortening the already paltry word count makes it hard to say anything beyond "Me too" or "You're all wet."

I try to keep RtO posts short. For several reasons. One is respect for my readers, whose time could be used for other things. One is to keep my thinking focused.

Some RtO posts would fit into a Tweet, but not many.

When you have something to say, keep it short but make it long enough to show you've got something to talk about. 


Saturday, July 11, 2015

Frozen sashimi

A friend who moved to Maui from New York City used to say he did it because "Maui has a better class of jungle."

Now add another reason: We don't freeze the sashimi. At least, I hope not. I'm pretty sure the fish we buy from pickup trucks by the side of the road have not been frozen, especially not at minus-83 degrees:

“We purposely deep-freeze at negative 83 degrees, and we use one of those medical cryogenic freezers,” said Yuta Suzuki, vice president of Sushi Zen, a popular Times Square restaurant.
So Suzuki-san is not affected by a new regulation that requires most raw fish sold in New York restaurants to be frozen for at least 15 hours.

 Probably our supermarket poke has been frozen. Now that the auction is in Honolulu, on Maui we aren't any closer to the fishermen than we would be in Iowa. But some rstaurants are still buying fish caught locally and sold -- one at a  time -- by the boatmen; who are not, however, leather-skinned sons of the sea but more likely tour boat captains who troll a line and hope to score a mahi for an extra hundred bucks. The marlin in our stores was most likely caught by a charter captain or his customer and not frozen, though.

Now that the collectors and gill-netters have wiped out the reef fish, you don't hear much about ciguatera poisoning. I've never known anybody who got a parasite from poke; not that they admitted to, anyway.

So now if you want a really fresh fish, you'll have to catch it yourself.
“I’m pretty sure our customers are not able to tell,” Mr. Suzuki said

Sunday, July 5, 2015

The big tax

SECOND UPDATE Wednesday, July 15

It's  worse than I thought, Much worse.



HAWAII, July 15th, 2015 - Despite the hard work of the Solar Impulse team to repair the batteries which overheated in the record breaking oceanic flight from Nagoya to Hawaii, the solar powered airplane of Bertrand Piccard and André Borschberg will stay in Hawaii until early spring 2016.

UPDATE Saturday July 11:

The solar plane is an even stupider stunt than I had thought. Not only did it take a month to take off, now it is going to take nearly another month to recover.

* * *

A long time ago -- it was 2008 -- in the early days of RtO, I remarked that time is the biggest tax we place on the poor. That remains true despite efforts by the rich to make the financial tax the biggest (by imposing VAT, for example).

If you are poor, for example, you have to wait for a bus rather than getting in your car when you want to move.

That is why I find the Solar Impulse plane such a weird idea. According to a press release
Solar Impulse’s vision of reaching unlimited endurance without fuel, using solely the power of the sun, was not only a dream: perpetual flight is a reality.
Well, not exactly.  Not mentioned in the statement was the month-long wait for the weather to clear so the plane could take off for Hawaii. Just like in the old days, when sailors had to wait anywhere from weeks to half a year "for a wind."

(Half a year in the case of the Arab and Indian traders who traveled between Africa and India, going one way when the monsoon was favorable from one direction and returning when the monsoons reversed, which happens once a year.)

Travelers by land often had to wait for weather, too.

Fossil-fuel engines changed that. Even before true ocean-going steam vessels were developed, the tyranny of wind was partially defeated by using steam tugs to pull big vessels out of wind-bound anchorages to the open roads.

In Hawaii, we didn't wait for steam. Crews of kanakas hauled sailing ships out of Honolulu harbor, a remarkable feat not tried elsewhere in the world except rarely in cases of military emergency. Many a paddle must have been snapped.

Saturday, July 4, 2015

Sugar and smoke

On Sunday, I blogged about the cane smoke meeting ("Maui Snow job," June 28). One thing that was said there that I didn't mention was a claim that Stop Cane Burning had no intention of shutting down HC&S. But on Wenesday the same group filed suit in 2nd Circuit Environmental Court to shut down the air quality permit system that allows the plantation to burn under restricted conditions.

Which would shut down the plantation.

Lance Collins, the plaintiffs' attorney, told Lee Imada of The Maui News that the suit had been in preparation for a month.

So somebody was lying. Not necessarily Collins, who was not the representative of Stop Cane Burning who made the statement about not intending to shut down HC&S, although he did speak at the meeting without mentioning that he was within less than a week of filing a suit to do just that.

Also not speaking that night was Karen Chun, founder of Stop Cane Burning. She is a named individual plaintiff in the suit, so we can guess she knew on that Thursday that the suit was in the mill.

Let me tell you something about Chun. A few weeks ago, she was running a campaign in favor of shutting down payday lenders on Facebook (and perhaps elsewhere, but that is where I was shown her campaign). Among her claims there was that I had written Rep. Justin Woodson's letter explaining his actions at the Legislature concerning that legislation, a letter published in The Maui News.

She did not ask me whether I wrote it. I don't suppose she asked Woodson, either, since he would have told her I didn't write it. 

A few days later, a mutual friend of mine and Chun's was quizzing me about how payday lending works, and I mentioned that Chun was spreading a lie about me on that topic. She asked if I had contacted Chun.

No, I said, she cannot hurt me and I am used to her trying to harm me. That I considered Chun beneath the consideration of decent people and cared nothing about her, although it angered me that she was also speading tales about other people who might possibly be harmed by her.

My friend asked if I would answer a question from Chun about the letter. Yes, I said. If she wants to know the fact rather than make crap up, I am in the phone book.

 She asked if I would mind if she told Chun I didn't write the letter and would tell her so if she asked me.

I said I didn't care one way or the other. A few days later, she told me she had told Chun I hadn't written the letter and would tell her so if she asked me..

Chun has not called yet. I suspect she is the anonymous author of a new allegation, now in regard to smoke, that I am working in PR for A&B and other developers. It sure sounds like her, and I have learned to recognize her style over the years. (I am not working for any developers and never have.)

If she wants to know whether I am working for A&B, she could ask A&B, or call me. I'm in the book.

Do I care? No, not for myself. But I think people inclined to answer Stop Cane Burning's calls for money or to support its campaign should know about the character of its leader.