Decline of the Empire

The iPhone Economy

I subscribe to investor John Mauldin's Outside The Box, a free newsletter which often contains some worthwhile analysis of current trends. A few weeks back, a newsletter called America's Greatest Wealth Creation Engine showed up in my inbox. Sometimes Mauldin presents an article of interest by others. This one was by Alex Daley and Doug Hornig, and the "wealth creation engine" was never-ending technological progress. From Mauldin's introduction—

Those who know me well know that I am in incurable optimist. I think the world is going to be better in ten years than it is today. I thought that 20 years ago and 10 years ago and expect to think that 10 years from now. Part of that reasoning comes from the accelerating pace of change in the technology world. The next 10 years will see more change than the last 20-30 years combined!

And that means opportunity. Yes, with ups and downs and twists, but opportunity nonetheless. This week’s Outside the Box is a short essay from my friend Alex Daley who writes the letter Casey’s Extraordinary Technology...

Mauldin and I don't see eye to eye on many things, and his eternally sunny disposition is one of them. Not only does such an attitude retard our efforts to solve the very real problems confronting us, but it also flies in the face of Reality. Dealing with Reality is always the best choice. In fact, it's our only choice. So I think of incurable optimism as an incurable disease. And there's no way in Hell that the world is going to be "better" 10 years from now. The only remaining question is how much "worse" it's going to be.

Daley and Hornig's presentation turns out to be mostly a pep talk that recounts past technological triumphs. You can read it if you like, and I will quote it briefly below, but the alert observer will note that it's a little short on details about technological miracles which are ready for the marketplace, or even subsidized commercial-scale applications in the Real World. This gives me an excuse to ask a question pertinent to our times—

Where are all the really important technological breakthroughs we've come to expect?

Daley and Hornig praise technological progress, where inevitable advances are impersonal and implacable—

Over the past decade, while the overall market was weakly limping along, these companies have been steadily growing revenues, adding jobs, and spewing profits. At the same time as brash startups were reinventing news, entertainment, communication, medicine, and virtually every other aspect of our work and home lives, promising to deliver still more growth even in this weak economy.

We’re talking about technology, of course. Technological development is impersonal and implacable. It cares not who controls Congress or chairs the Fed. It has been the stuff of American life for a century – from the assembly line to the smartphone. Most importantly, it’s done what a successful segment of the economy is supposed to do, bring about prosperity by adding to the tangible wealth of the country. And it did so the old-fashioned way, by creating things useful to society...

Some look at technology and see only the downsides. The oil spills, the loss of privacy, the ugly machinery of war. But we recognize that technological advances have, for the most part, made our lives longer, better, healthier, more comfortable, and more fun. There’s no reason to believe that that trend won’t continue.

In fact, the biotech and nanotech revolutions now just getting underway promise to usher in a renaissance of such magnitude that it will likely make all our previous techno-magic seem like simple card tricks....

OK, hold it right there. In my 57 years on Earth, I've been hearing about the Impending Revolutions in biotech and nanotech for at least 25 of them. Where are these Revolutions? In the last 30 years, there have been three four major technological developments: 1) personal computers; 2) wireless & fiber optic telecommunications; 3) the internet; and 4) portable gadgets which are mostly glorified smart phones. Indeed, these developments have created a lot of wealth for investors and inventors, which is why Bill Gates and Steve Jobs are among the richest people in the world.

Thus we have what I call an iPhone Economy. But outside this revolution in communications, where's the Really Big Stuff? You know, beam me up, Scotty! Or put another way, why are we still burning fossil fuels? Why are we still driving cars with internal combustion engines?

The sad truth is that without the Really Big Stuff, our iPhone Economy is unsustainable. Consumerism, fed by technological "breakthroughs" like the iPhone, is doomed. From this perspective, all the internet did was increase our need to burn fossil fuels. Our economy is limping along now, but what will it look like in 20 years? Or 30? The prognosis isn't good.

To find out about the Cutting Edge in technology, I go over to MIT's Technology Review. But I don't go over there very often, because the story is always, depressingly, the same. In preparing this post, I went there today, and simply clicked on the headline stories that looked interesting. I quickly found three typical examples.

• Research To Watch: Building Microbial Fuel Factories, filed under Energy.

  Joule Unlimited, a startup based in Cambridge, MA, is genetically altering photosynthetic microörganisms so that over their lifetime, they devote only 5 percent of the solar energy they absorb to growing and staying alive. The rest goes to secreting a steady supply of diesel fuel.The company, which is building a pilot plant in Leander, TX, says its process will generate 15 to 25 times as much fuel per acre as technology for making fuels from cellulosic biomass, but that it will take several years to demonstrate at a large scale. Synthetic Genomics, with funding from ExxonMobil that could exceed $300 million, is taking a similar approach, working with algae.

  To replace all petroleum with biofuels, however, it might be necessary to genetically engineer organisms that get energy through potentially more efficient mechanisms. And the U.S. Department of Energy's Advanced Research Projects Agency-Energy (ARPA-E) is funding 13 projects that are engineering organisms to convert electricity and hydrogen--ideally from renewable sources--into liquid fuels for conventional cars.

  Several years to demonstrate at a large scale. I've been reading these kind of stories for several years, and the demonstration is always several years away. Where's the biotech miracle? Wake me up when you're ready to demonstrate this technology.

• Fungus Genes Help Turn Grass Into Ethanol, filed under Materials.

  Scientists have taken genes from a fungus that grows on grass and dead plants, and transplanted them into yeast that is already used to turn sugar into ethanol. The genes let the yeast ferment parts of plants that it normally can't digest, potentially streamlining the production of ethanol...

  The technique doesn't address much of the processing involved in ethanol production. Ethanol makers would still need to use enzymes to break the cellulose down to an intermediate stage called cellodextrin. But the yeast can work with this, instead of waiting for it to be broken down all the way to glucose, removing steps that cost time and money.

  It could be five years before the modified yeast is ready for use in a demonstration-scale ethanol plant, and perhaps a decade before ethanol made this way winds up in gas tanks, Cate says. Researchers won't know for some time how much of a boost in yield the modified yeast will produce until it is tried in a production setting.

  "We make a 10 to 20 percent improvement, other companies make a 10 to 20 percent improvement in their enzymes, and all of a sudden we've brought down the cost to where it can start to be competitive with oil," says Cate.

  All of a sudden? It's always five (or several) years before this new shit can be demonstrated. See my remarks just above.

• A New Way To Use The Sun's Energy, filed under Energy.

  A new type of device that uses both heat and light from the sun should be more efficient than conventional solar cells, which convert only the light into electricity. The device relies on a physical principle discovered and demonstrated by researchers at Stanford University...

  The breakthrough came when the Stanford researchers realized that the light in solar radiation could enhance energy conversion in a different type of device, called a thermionic energy converter, that's conventionally driven solely by heat. Thermionic converters consist of two electrodes separated by a small space. When the positive electrode, or cathode, is heated, electrons in the cathode get excited and jump across to the negative electrode, or anode, driving a current through an external circuit. These devices have been used to power Russian satellites but haven't found any applications on the ground because they must get very hot, about 1,500 °C, to operate efficiently. The cathode in these devices is typically made of metals such as cesium...

  Even at high temperatures, the photon-enhanced thermionic converter will generate more heat than it can use; Melosh says this heat could be coupled to a steam engine for a solar-energy-to-electricity conversion efficiency exceeding 50 percent. These systems are likely to be too complex and expensive for small-scale rooftop installations. But they could be economical for large solar-farm installations, says Melosh, a professor of materials science and engineering. He hopes to have a device ready for commercial development in three years.

  Apparently, the thermionic converter—that sounds like Star Trek!—is bit too hot to handle. If the stars align just right, we might see a device ready for a very unlikely commercial development coupled to a "steam engine for a solar-energy-to-electricity conversion" in just three years.

It seems that at the end of the 20^th century and the beginning of the 21^st, the problems we need to solve got a lot harder to solve. Extraordinary technological breakthroughs enhanced our ability to extract oil from reservoir rock, but the advances needed now to replace oil seem to be at least an order of magnitude "harder" in some sense.

For Steve Jobs, creating new Apple iStuff is easy. But new iStuff doesn't matter. Creating real breakthroughs that will help us get through the 21^st century—that's really, really hard.

Remedy du Jour -- September 11, 2010

Today we remember the terrorist attack on the World Trade Center and the Pentagon, but this is not the time or place to talk about it. Let's forget our troubles for now.

First up is Ry Cooder doing his amazing rendition of Woody Guthrie's Vigilante Man (a repeat from March 6). After that, we've to Norah Jones doing the Lady Day classic Lover Man. The film clip illustrates how a message can sometimes get Lost In Translation. (The translation was not provided in Sophia Coppola's movie, which starred Bill Murray and Scarlett Johansson.)

Watch And Weep

Right after Labor Day, just like clockwork, the TV was filled with political advertisements. Yesterday evening, as I was sipping on my favorite beverage in my local watering hole, the bombardment was non-stop. One 30-second spot after another appeared and disappeared on the Big Screen above the bar. Here in Pennsylvania, congressman Joe Sestak (Democrat) is duking it out with Pat Toomey (Republican) for a Senate seat.

These ads are very expensive. It costs millions & millions of dollars to run for the Senate. You can be sure that Joe and Pat are collecting bribes from anybody and everybody as their campaigns grind on. Look at my post It's A Kleptocracy. The mid-year election doesn't take place until November 2nd, so we have 52 grueling days to go. 

We are living in Hard Times, and things are bound to get worse. Not since Great Depression have there been so many looming threats to so many ordinary people.

And what are Pat & Joe running on? Pat is in favor of Babies. Joe favors Duty & Service. Don't take this the wrong way—I'm sure Joe also favors Babies, and Pat doubtless favors Duty & Service.

I've included 30-second spots from both candidates. I assume 30 seconds is thought to be the maximum attention span of the average voter. Watch them and weep.

Duty, service, Joe Sestak has lived his life by those values...

Just a few months ago, Chris and I had our third child. There's nothing like the wonder of new baby...

Rearranging The Deck Chairs — Part II

In yesterday's post Rearranging The Deck Chairs, I alluded to the surreal quality of the current debate about Obama's proposed stimulus program to rebuild America's roads & highways infrastructure. But the debate about letting the Bush tax cuts expire is even more bizarre. The entire discussion is taking place without its proper context—the grotesque wealth & income inequality in the United States. Instead, the arguments center around future deficits, stimulating spending to achieve economic growth, the economic effects of taxes, etc. Talk about rearranging the deck chairs on the Titanic!

First, let's get the facts out of way. The Bush tax cuts were enacted in 2001 and 2003, and are due to expire at the end of this year. About 40% of the benefits went to "the tiny sliver of Americans earning over $500,000." If the tax cuts are reinstated, Greg David tells us what will happen—

The issue, of course is the famous or infamous Bush tax cuts, which many charge benefited the wealthy disproportionately and increased the inequality between upper-income tax payers and everyone else. The 2001 Bush plan actually reduced taxes for virtually everyone and eliminated millions of low-income Americans from paying any taxes.

According to the Center for Tax Policy, 47% of Americans pay no federal income tax at all, in part because of the Bush tax cuts. The claim that the wealthy get all the benefits is based on the large amounts in dollars they save under current rates, although if the Bush tax cuts were extended for 10 years, the cost would be $3.8 trillion, with $700 billion or so going to the richest people.

President Obama has proposed extending the cuts for households making $250,000 or less ($200,000 for individuals) and ending the cuts for those making more than that. There is also a red herring to dispose of which has been floated by lying bastard less-than-truthful Republicans—

One of the most common objections to letting the cuts expire for those in the highest tax brackets is that it would hurt small businesses. As Sen. Orrin Hatch (R-Utah) recently put it, allowing the cuts to lapse would amount to "a job-killing tax hike on small business during tough economic times."

This claim is misleading. If, as proposed, the Bush tax cuts are allowed to expire for the highest earners, the vast majority of small businesses will be unaffected. Less than 2 percent of tax returns reporting small-business income are filed by taxpayers in the top two income brackets -- individuals earning more than about $170,000 a year and families earning more than about $210,000 a year.

Republicans also claim to be worried about the deficits, but plainly that's not the case when it comes to tax cuts for their rich friends.

OK, we've got the facts out of the way. Or perhaps I should say we've examined the trees, so now let's look at the forest.

Income share for the top 10% (decile) since 1913, compiled by Emmanuel Saez in his Striking It Richer. Income inequality is at its highest point since 1928 right before the Great Crash. Also note the steep rise after 2003.

From the New York Times based on the work of Saez and Thomas Piketty, a French economist. Look at the income share of the top 1% versus that of the bottom 90%.

This data leaves not doubt that as the rich get much richer, the Middle Class is going down the tubes. Just look at who's got all the money! It's so simple, what could be easier to understand? Yet keeping the Bush tax cuts for the very wealthiest Americans—mostly the top 1%, who made at least $398,900 in 2007—is a political football and nothing more. There's no sense whatsoever that America is going to hell in a handbasket.

It's as though you're not even allowed to talk about wealth & income inequality in America. It's verboten, taboo, off-limits! If you talk about it, you're acknowledging it, and if you acknowledge it, then you might have to do something about it.

Just how fucked up things are in this country really came home to me in a PBS NewsHour video about letting the Bush tax cuts expire (included below). This "policy decision" was talked about in the mostly meaningless terms I listed above (e.g. stimulating the economy). The NewsHour's Jeffrey Brown interviewed Heather Boucher, an economist with the Center For American Progress (pro-Obama) and Jeffrey Miron, an economist at Harvard (anti-Obama). It was these remarks by Boucher that brought the point home—

Boucher — But I think again that the thing we have to remember is that [where] this economy is right now, we are still in a situation where we don't have enough demand. We see in survey after survey of small businesses is that they're not seeing enough sales. They're wondering where are the customers coming through my doors. And so we need to target our policy response to help those small businesses see sales. And extending the tax cuts for middle class families will help put more customers in the door, in a way that targeting them at the top end simply will not do.

Brown — Of course the question is, why not end all the tax cuts, why not end it for the Middle Class as well. And your argument there goes to the deficit.

Boucher — Well, certainly, but we know that folks in the lower and middle classes are more likely to spend every dollar that they get because they don't have a lot of wiggle-room, they don't have a lot of savings, they don't have a lot of excess money, so when they get that dollar, when they get to keep that extra dollar in those tax cuts, they'll be more likely to go out and spend it.

The folks at the very top, they've got a lot of excess resources, so they're not going to spend that full dollar.

That's right! Those folks in the Lower and Middle Classes, the ones without any money, are going to spend every dollar the government lets them keep because they're fucked! They can barely make ends meet! They're two missing paychecks away from abject poverty! They can't save any money because there's nothing to save. So out of sheer desperation, in a likely futile attempt to keep their shit together, these poor schmucks are almost guaranteed to spend that tax cut money, and in doing so, they will stimulate the economy. Because they have no choice!

But of course, that's not what Heather meant. Here's the video.

Rearranging The Deck Chairs

Listening to the "news" and reading the usual sources on the internet has become surreal as the summer winds down. The key word lately is infrastructure. The President and the Democrats launched some initiatives that have no chance of being approved by Congress because they have to run for re-election on something, especially with underemployment the highest it's been since World War II.

With Democrats facing an increasingly bleak midterm election season, Mr. Obama used a speech at a union gathering on Labor Day, the traditional start of the campaign season, to outline his plan. It calls for a quick infusion of $50 billion in government spending that White House officials said could spur job growth as early as next year — if Congress approves.

That is a big if. Though transportation bills usually win bipartisan support, hasty passage of Mr. Obama’s plan seems unlikely, given that Congress has only a few weeks of work left before lawmakers return to their districts to campaign and that Republicans are showing little interest in giving Democrats any pre-election victories.

Central to the plan is the president’s call for an “infrastructure bank,” which would be run by the government but would pool tax dollars with private investment...

The details of the plan will come as no surprise to DOTE readers—

Specifically, the president wants to rebuild 150,000 miles of road, lay and maintain 4,000 miles of rail track, restore 150 miles of runways and advance a next-generation air-traffic control system.

Oh, my! If you require additional proof of the utter bankruptcy of political thinking in the United States, you need not look any further than this. My recent post Ass Backwards America described the tragic state of public transportation in the United States. I wrote it up before Obama's proposal, and here's what I said—

These public transit cuts will likely be permanent in almost all cases. The ongoing recession presented a unique opportunity to rebuild America's public transportation system. We tore down the one we used to have in the 1950s to build roads & highways. And we never stopped building roads & highways. And when it came time to "stimulate" the economy, we poured money into building roads & highways. We built roads & highways as though the oil would never run out, as though gasoline was just another Free Lunch. After all, we are Americans. We are entitled. We deserve that Free Lunch.

And what of the taxes we put on all that gasoline we burn? All the revenue goes toward building or repairing roads & highways. In fact, we've built so many roads & highways since the 1950s that the revenue from the gasoline tax is no longer sufficient to keep them in good repair.

Who said this isn't a Great Country?

I had our precarious oil supply situation in mind when I wrote that. If the global economy ever does return to robust demand growth, we will face another oil price shock. But building public transportation to mitigate a crisis that may occur some years from now requires wisdom and long term thinking, neither of which exists in American politics.

Before I wrote about the crisis in public transportation, I pointed out that basic services in America are literally falling apart in Our Crumbling Infrastructure — Patch & Pray. This problem only recently came to Barry Ritholtz's attention because a civil engineer called up a talk show Barry was on and told him about it. I'm quite sure the only reason they were talking about infrastructure at all was because of President Obama's initiative.

Barry's blog The Big Picture is immensely popular—only the fatuous Paul Krugman and Dealbook at the New York Times get more traffic in the business & economics realm—so I'm glad he's starting to see ... The Big Picture. OK, I'm a little bitter, I admit it. At least Ritholtz made the graphic below, which I didn't have when I wrote my story back in July before the bogus infrastructure proposal.

The report card on America's infrastructure. We need to invest $2.2 trillion over the next five years to get things back to where they should be.

Obama's proposal is just more election year bullshit. As we would expect, there is nothing in his proposal that addresses problems with wastewater, transit, solid waste, public parks & recreation, levees, inland waterways, hazardous waste, energy, drinking water, dams or bridges. 

No! We propose a plan to rebuild 150,000 miles of roads & highways instead.

Only those who were alive during the Great Depression remember times as hard as those we are living in now. For almost all of the people alive today, these are uniquely difficult & dangerous times. But nobody alive today, including those who remember the Great Depression, has ever witnessed such immense stupidity Human Folly on such a colossal scale.

The ocean liner has hit the iceberg, and the ship is slowly but surely sinking into the water. Few notice, and the ones who are proclaiming the ship is sinking, the ship is sinking! are generally ignored. I would like to think that this Surreal Denial will be overcome, but the absurd public discourse in the United States tells me that Reality will not intrude on our Happy World anytime soon.

We will continue to rearrange the deck chairs on the Titanic until one day in the perhaps not-so-distant future, the ship will, in some metaphorical sense, disappear beneath the waves altogether.

Update

I thought you might enjoy this Tech Ticker video For Better or For Worse, "Let’s Get Real!" Says Scott Bleier.  Although Scott has only a limited perspective on the Empire's Decline, he is still willing to call bullshit on green shoots, double dips, recovery summers, and all the rest. Of course, Scott can't use the word bullshit, but I can  

Student Loans — Gateway To Debt Slavery

The view here at DOTE is that American society is rotten to the core. Our Ripoff Economy touches every aspect of American society—no part is immune. I haven't written much about student loans up to now, but that was not because there was nothing to say about them.  Rather, I didn't have detailed knowledge of how the ripoff worked in the student loan world. Now I do, thanks to collegescholarships.org and byJess.net. I am going to describe the student loan scam in two graphs and a large image. This last graphic, which was put together by those two websites, tells the story better than I ever could.

But before I present that story, I have a few things to say. The problems in American society and its economy are structural. A large part of that structural disaster is due to the fact that our economy, especially during the Bubble Era (1995-2007), was "growing" because of an enormous expansion of credit and its obverse, debt. This system benefited creditors (e.g. Wall Street banks, Sallie Mae, etc.) and abused debtors. Laws were passed and regulations abolished to aid creditors. Therein lies just one of the diseases that characterize American society. The fact that many students start their adult lives as debt slaves—this is the "price" of a college education—is just one example of how this rotten system works.

It may appear to you that liberal economist Paul Krugman (left) is your friend. Nothing could be further from the truth. In reality, Krugman wants the economy to grow, no matter how high the cost to you. He is the Pied Piper of Debt. If you have to become a debt slave to get a college education and a job, and as a result the economy "grows," that's OK with Krugman. He currently wants to stimulate the economy to the tune of $800 billion to get us back on the "growth" path and create jobs. This sounds good, but Krugman also wants us to get back to Business-As-Usual as quickly as possible. But as we just observed, and as you will see below regarding student loans, Business-As-Usual is utterly corrupt.

It is a good thing that credit has been contracting for several quarters now. It is a good thing that households are shedding debt any way they can. The collapse of what some have called a 30-year Credit Bubble is going to cause us all a lot of short- to medium-term pain, but that's the price we have to pay get back to something resembling a "normal" society. I think it's too late to "fix" American society, to halt the Empire's Decline, but surely households (and students) racking up impossible amounts of debt only makes things worse. It certainly makes things worse for the debtors.

OK, here's the student loan scam.

College tuitions rise and rise, way above the rate of inflation or growth in average (not median) wages. From Tim Iacono.

As college tuitions rise and rise, so do the amounts of student loans outstanding. Source.

The Student Loan Scheme

Thorium Reactors — The New Free Lunch

A week ago, Ambrose Evans-Pritchard of the UK newspaper the Telegraph demonstrated that he is a staunch advocate of Free Lunches in his Obama could kill fossil fuels overnight with a nuclear dash for thorium—

If Barack Obama were to marshal America’s vast scientific and strategic resources behind a new Manhattan Project, he might reasonably hope to reinvent the global energy landscape and sketch an end to our dependence on fossil fuels within three to five years.

Human beings love the Free Lunch, so there were comments & chatter galore on the internets about Evan-Pritchard's article. He quoted nuclear physicist Carlo Rubbia to make his point, with one easily forgettable caveat—

There is no certain bet in nuclear physics but work by Nobel laureate Carlo Rubbia at CERN (European Organization for Nuclear Research) on the use of thorium as a cheap, clean and safe alternative to uranium in reactors may be the magic bullet we have all been hoping for, though we have barely begun to crack the potential of solar power.

Dr Rubbia says a tonne of the silvery metal – named after the Norse god of thunder, who also gave us Thor’s day or Thursday - produces as much energy as 200 tonnes of uranium, or 3,500,000 tonnes of coal. A mere fistful would light London for a week.

Thorium eats its own hazardous waste. It can even scavenge the plutonium left by uranium reactors, acting as an eco-cleaner. "It’s the Big One," said Kirk Sorensen, a former NASA rocket engineer and now chief nuclear technologist at Teledyne Brown Engineering.

"Once you start looking more closely, it blows your mind away. You can run civilization on thorium for hundreds of thousands of years, and it’s essentially free. You don’t have to deal with uranium cartels," he said.

Not only does small amounts of thorium produce prodigious amounts of energy, but it seems you can't leave your house in the morning without tripping over it—this would be the only sense in which it is hazardous, apparently.

Thorium is so common that miners treat it as a nuisance, a radioactive by-product if they try to dig up rare earth metals. The US and Australia are full of the stuff. So are the granite rocks of Cornwall. You do not need much: all is potentially usable as fuel, compared to just 0.7pc for uranium.

If something sounds too good to be true, it's a good bet it is. There is a joke among economists pertaining to the Efficient Market Hypothesis that goes like this—

Two economists spot a $10 bill on the ground. One stoops to pick it up, and the other advises, “Don’t. If it were really $10, it wouldn’t be there anymore.”

If thorium reactors are that $10 bill, it would be fair to say that no, they're not just lying on the ground waiting for somebody to pick them up. However, there really is an opportunity in these reactors which various groups are pursuing. Carlo Rubbio, being a nuclear scientist, no doubt just waves his hands in the air when confronted with the engineering problems of creating a commercial thorium reactor.

Needless to say, no such reactor exists, and that's not entirely due to the fact that uranium was chosen over thorium decades ago because you can make atomic bombs with it—this story is popular among the usual conspiracy theorists, who probably also believe that the political power of the oil & coal companies is the sole reason we don't the run the whole economy on renewable energy today. Nevertheless, a promising path for nuclear energy was largely abandoned in the past, and is now being picked up again.

Without much effort, I found several credible sources of information about the state of thorium reactor development. I will quote from IEEE Spectrum's Is Thorium the Nuclear Fuel of the Future? 

...several countries are investigating the possibility of thorium-based energy generation: India's working on an Advanced Heavy Water Reactor, Japan has the miniFuji, Russia is working on the VVER-1000 and even the United States has long term plans to experiment with commercial energy generation by thorium. Most of these plans are nebulous, but for some it’s a serious option. The country with the most specific plan is India, which has drawn up a three-stage process to rely almost entirely on thorium by 2030.

[My note: Did you spot an important keyword in that paragraph? — "and even the United States has long term plans..."]

India has been very aggressive about meeting its energy needs with thorium. They are embarked on a multi-stage development which may pay off a few decades from now—

The fast breeder reactor is only the second stage of a long-term project. “There are no defined time lines as lot of technology development, research and demonstration activities need to be completed before commercial deployment of thorium reactors for power,” Thakur told me in an email. “I think it is decades away.” First, he explains, “we need to have a significant capacity of the fast breeder reactors where thorium could be used as a blanket.” (For a good overview on what this means, read this article on thorium reactor physics at the World Nuclear Association.)

The IEEE Spectrum article talks about other designs (e.g. LFTR, liquid fluoride) and provides links to additional information. Here's the bottom line—

... I must note here that there are counter-arguments to these arguments and counter-counter-arguments to boot. If I listed them all it would just be turtles all the way down.

Ultimately, we can argue all we want, but the proof will come in the most basic possible form—someone submitting a credible design to the US Nuclear Regulatory Commission or some analogous body. So far, that hasn’t happened. NRC spokesperson Scott Burnell told Spectrum that there “isn't anything on our radar for a thorium-based reactor at this point.”

As the old saying goes, the proof is in the pudding. Religious disputes about energy from thorium go on and on, just as they always do when one is arguing about something—a commercial thorium reactor providing real power to real people—that does not exist. 

The Free Lunch is not free, and is dangerous besides, because of the cost of opportunities foregone as we engage in single-minded pursuit of it—

The true cost of something is what you give up to get it. This includes not only the money spent in buying (or doing) the something, but also the economic benefits that you did without because you bought (or did) that particular something and thus can no longer buy (or do) something else...

If we did as Evans-Pritchard suggests—marshal America’s vast scientific and strategic resources behind a new Manhattan Project to develop thorium reactors—we would forego the opportunity to develop other sources of energy, to learn how to live with less energy, etc. Since he writes about economic issues for the Telegraph, one would think he knows this already. And if he knows about Free Lunches & opportunity costs, then only shamelessness, combined with willful ignorance, can explain why he wrote such a  misleading sales pitch for thorium reactors. 

Wake me up when there's a commercial thorium reactor up & running somewhere on Earth. Then, and only then, will we know the true costs & benefits of energy from thorium.

A Tutorial For Journalists On Reporting Jobs Numbers

It is Labor Day, so it's a good day to talk about the way the unemployment rate is reported by our hardworking, intrepid media. If you get your news from NBC, ABC, CBS, MSNBC, CNBC, Fox, PBS, NPR, Reuters, the Associated Press, the New York Times, the Washington Post or other bastions of Imperial correctness, you have likely heard that the unemployment rate is 9.6%, and this rate increased a tenth of a percent from July to August. You have also likely heard that this has been deemed a Good Sign because it betokens an economy that will likely not "go back" into recession (i.e. experience a "double dip" as measured by GDP).

The so-called "mainstream media" report the U-3 unemployment rate as calculated by the Bureau of Labor Statistics (BLS), which uses a monthly Household Survey. This is the "official" unemployment rate for the United States used by bureaucrats in the Federal Government and the Federal Reserve, and thus the regular media (among many others) duly report it.

I am not going to get into all of the arcane details of BLS jobs numbers today. Suffice it to say that if you look just a little bit deeper into the BLS data, you will find that the jobs situation in the United States is much worse than officially reported. Mish gives us some of the details today in his Destitute Index.

In so far as the mainstream media are too lazy or simpleminded to tell you the real story about unemployment in America, I thought I would provide a tutorial which teaches them how to dig deeper into the jobs numbers. You DOTE readers can follow along, but the rest of this post is for journalists, especially Morning Edition hosts Renee Montagne and Steve Inskeep at National Public Radio.

A Tutorial For Journalists On Reporting Jobs Numbers

For you mainstream media journalists out there, it's time to learn how to report the jobs numbers in America. I am going to assume you know next to nothing because, apparently, that's the case. You needn't thank me for this, because I want you to be good reporters and I know you want to be good reporters, too. So let's get started!

1. Go to Google and type in the query "BLS jobs" in the top box and press RETURN on your keyboard. I am going to assume from here on out that you know how to use a computer and the internet.


2. Look at the results and click on U.S. Bureau of Labor Statistics.


3. Scan the BLS homepage and click on Employment Situation.


4. OK, at this point, unfortunately, you have to know something. You need to know that the BLS defines a statistical entity called the Civilian Labor Force. Search the page you're on for that phrase. You will find the following text—

   In August, the civilian labor force participation rate (64.7 percent) and the employment-population ratio (58.5 percent) were essentially unchanged. (See table A-1.)

   The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 331,000 over the month to 8.9 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)

   About 2.4 million persons were marginally attached to the labor force in August, little changed from a year earlier. (The data are not seasonally ad- justed.) These individuals were not in the labor force, wanted and were avail- able for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

   Among the marginally attached, there were 1.1 million discouraged workers in August, an increase of 352,000 from a year earlier. (The data are not season- ally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

5. After you have read this text—I assume you know how to read with comprehension—you will see some new terms, like part-time for economic reasons, marginally attached and discouraged workers. These are important terms, so keep them in mind. Equally important, the BLS references some data tables, including table A-1, table A-8 and the table A-16. Search the page you're on—I assume you know how to use your browser to do that—to find the text "A-16". After the reference in the text above, you should wind up at the bottom of the page amidst some links to the BLS table data. Read the names of the tables. You may be tempted to go to table A-16 right away, but don't go there yet.


6. Do you see the link labeled table A-15 called Alternative measures of labor underutilization? Aren't you curious about that one? You are a reporter after all, and curiosity is supposed to be a characteristic of good reporters. You want to be a good one, right? So, click on that link.


7. In the farthest left-hand column of the data table on the page, you will see the labels U-1, U-2, U-3, etc. In the top row, you will see various dates defining the table's columns. Look for the seasonally adjusted August 2010 column, and then follow the U-3 row to that column in the table. It says 9.6! That's the number you've been reporting! Congratulations!


8. Now that we've really got things going, look at the alternative measurements in the other rows, particularly the U-5 and the U-6. Stay with that seasonally adjusted August 2010 column, and read the new data in those rows.


9. You will see that the U-5 number says 11.0. And the U-6 number says 16.7. What's going on there? Those numbers are higher than the "official" 9.6 rate (percentage) you've been reporting! And these new numbers are rates too, so the U-5 should be read as 11 percent and the U-6 as 16.7 percent. Carefully, read the U-5 and U-6 definitions—

   U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force

   U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force

   There are those new terms again—discouraged workers, marginally attached, part-time for economic reasons.


10. OK, now you're allowed to take a look at table A-16. Hit the BACK button in your browser, and click on the link table A-16.


11. You will see that marginally attached (to the Civilian Labor Force)—

    refers to persons who want a job, have searched for work during the prior 12 months, and were available to take a job during the reference week, but had not looked for work in the past 4 weeks.

    and you will see that discouraged worker—

    includes those who did not actively look for work in the prior 4 weeks for reasons such as thinks no work available, could not find work, lacks schooling or training, employer thinks too young or old, and other types of discrimination.

12. Remembering the results you obtained in step #9, you might well ask: shouldn't these marginally attached workers (which includes the discouraged workers) be counted as unemployed too? That's only fair, right? If you're asking these questions, you're on the right track! It is said that a good reporter wants to be an accurate, objective reporter of what's really going on (in this case, according to the BLS). You want to be a good reporter, right?

I will cut it off here. You're on your own now, but just think of the wonders that lie behind the doors we've opened up today! I leave deconstructing the U-6 number and the mysteries of part-time for economic reasons as an exercise for eager learners. And I've got to warn you, investigative reporting can be tricky. The alert among you will have noticed that the Employment Situation page listed table A-15, but did not reference it in the text. Stay on your toes! Were they trying to hide something?

Eventually, if you stick with it, you might even learn to question the numbers the BLS provides! But that is a very advanced skill, and there's much more fun to be had at the BLS, so stick with that for now.

Good Luck!

What Rough Beast?

America is about to enter a time of great economic & social turbulence. America's political system is broken, but this dysfunction, as unbelievable as it sounds, is about to get much worse after November's midterm election and for many years thereafter. The coming state of polarized paralysis guarantees beyond any doubt that no great policy shift will put America on a healthy path of wise investment in the future to slow the Empire's inevitable decline.

The overwhelming majority of Americans think in terms of conventional political categories—Left and Right, Liberal or Conservative, Democrat or Republican. It is quite beyond most people's ability to recognize that these categories no longer apply to our current situation. The required shift in perception and required change in thinking will not be forthcoming—of this, at least, we can be sure. Predictably, the clash of old, obsolete thinking, combined with our worsening circumstances, will lead to greater hardening of mistaken views, which will lead to further polarization and paralysis.

It is easy to imagine that our political system could fall apart entirely as unbearable tensions build in the coming decade. When these tensions are combined with the great ignorance of Americans about their true circumstances, and the great docility, passivity and apathy of America's citizens, and the cherished, imaginary but destructive myths they hold dear, it is easy to see that Crazies could take over the government, whether they are "elected" or not.

I am not talking about mere Imperialists like Barack Obama. Say what you wll about the man, he is not crazy. Obama is a "centrist" in a society that has lost it's bearings, a society that no longer has a moral compass. Obama is surely very intelligent, but his failure, beyond that which follows from the Imperial corruption and negligence which forms the status quo, emerges from clinging to outworn categories. Business as usual, whatever political form it took, was always doomed to fail.

Obama has never leveled with the American people about how bad things have become, but it's not because he's dishonest—it's because he's clueless. Obama is not mean & stupid, but there are many mean & stupid people waiting in the wings, just chomping at the bit, to run this country further into the ground.

In The Second Coming, the Irish poet William Butler Yeats told us that "things fall apart, the center can not hold"—

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the center cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

When the best in a society lack all conviction and the worst are full of passionate intensity, as we see now in America, that society is in trouble. Not only does it appear that American is ripe for Fascism, but we have already traveled well down that road in the last few decades. Thinking of the future of such a society, Yeats meditates on the coming changes—

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

What rough beast, its gaze as blank and as pitiless as the Sun, slouches towards Bethlehem to be born?

Remedy du Jour -- September 4, 2010

It's the Labor Day weekend—have a good one! No screwing around today, it's classics only, no introduction required. Go to YouTube if you want to listen or watch beyond these tribute videos.

Enjoy.