The horizon is not so far as we can see, but as far as we can imagine

Month: July 2023 Page 1 of 3

Quick Takes 5: The Year Climate Change Became Undeniable

Only someone ignorant, stupid or on the payroll could deny climate change before 2023, but this is the year where to remain in denial you have to be 5-sigma stupid or on the payroll.

So, boys and girls, let’s look at some of the highlights of what will be one of the coldest years of the rest of your life.

Let’s start with Antarctic sea ice extent. Remember, this is during WINTER.

For years I’ve said that marine inundation (sea level rises) would happen before most people expect it. And I’ll be right.

Next, we have more winter fun. 35 degrees celcius in Chile.

Well, that seems… bad.

Now for the lovely long-term view:

What’s super about the aboe graph, is that I’ll lay you 4:1 it is over-optimistic. By a lot.

There’s a vast amount of delusion about how bad global warming will be. People talk about 1.5 C, or 2 C, or 3 C.

How about +10C as the equilibrium? This is from a pre-print, but it’s not unreasonable:

Equilibrium global warming for today’s GHG level is 10°C for our central estimate

Now, the guys who made the above estimate are on the gloom side and as they themselves say, blackballed, but everyone who’s been paying attention knows that essentially everything has been coming in sooner and worse than expected. Are you going to bet on the consensus forecasts made for politicians that have consistently under-estimated climate change?


Next we have Farmer’s Insurance leaving Florida. The time when home owners insurance won’t be available anywhere unless the government underwrites it is withing sight.

Ocean water is warming up. In the more tropical areas it’s destroying coral, but it’s damn impressive in the north, too:

Spain, July 7th.

My guess is that most of the Mediterranean area will not be inhabitable during the summer in ten to twenty years. If you don’t have air conditioning, you will die.

Then there’s the whole “jellyfish future”:

Oxygen levels in the world’s oceans have already dropped more than 2 per cent between 1960 and 2010, and they are expected to decline up to seven per cent below the 1960 level over the next century. Some patches are worse than others — the top of the northeast Pacific has lost more than 15 per cent of its oxygen. According to the Intergovernmental Panel on Climate Change’s 2019 special report on the oceans, from 1970 to 2010, the volume of “oxygen minimum zones” in the global oceans — where big fish can’t thrive but jellyfish can — increased by between three and eight per cent.

I for one welcome the ocean’s new Jellyfish overlords.

We’ll talk more about the implications of all this soon, including the implications for you personally.

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Week-end Wrap – Political Economy – July 30, 2023

by Tony Wikrent


A rare opportunity to be heard

Antitrust Guidelines and Overthrowing a Corrupt Priesthood  

Matt Stoller [BIG, via Naked Capitalism 7-23-2023]

Today’s issue is about an obscure but important document on corporate power released this week known as merger guidelines. It is in many ways the overthrow of the corrupt antitrust priesthood…. this particular issue of BIG is important. There aren’t a lot of real actions people can take to influence government, but this one is real, and will make a meaningful difference in whether we truly address corporate power….

Over the past four days, I’ve been watching the business press go crazy about an obscure document that the antitrust agencies put out, known as ‘merger guidelines.’ And like the Catholic Church of the 1500s, or really members of any authoritarian social hierarchy, the antitrust priesthood is very upset.

For instance, Larry Summers, the avatar of Democratic Party economic policymaking under both Bill Clinton and Barack Obama, is in a rage, asserting these represent a “war on business.” Biglaw firms are sending out alerts to clients, saying “investors, boards and C-suites should anticipate significant delays and expenses associated with a far broader range of proposed transactions.” And the House Republicans are even trying to defund the very ability of the government to publish this document in their government funding bills.

Why does this document create such anger? The answer is that it is an attempt to return antitrust back to the rule of law, and away from the corporate revolution of the 1980s….

Nearly every major dangerous social trend today, from wage inequality to regional collapse to social despair to the inability to efficiently shift energy sources, is a result of monopolization, and mergers are the primary mechanism through which firms monopolize. In 1890, 1913, 1950, and 1975, Congress passed various laws to deal with it. The current key law on mergers today is called the Clayton Act, and it is still on the books. Unfortunately, because of the Reagan administration, and the ideological acceptance by the Democrats of what Reagan wrought, under-enforcement has been so poor that, well, Ticketmaster….

Now, here’s where you come in. Two days ago, I asked a question to Antitrust chief Jonathan Kanter at a Federalist Society event about the role of public comments in this process, and he said that hearing from the public is incredibly important in helping the agencies understand how markets actually work. Thousands of people chimed in a year and a half ago, including doctors, writers, truck drivers, nurses, and software programmers. Now it’s time to do it again. These guidelines are in draft form, they will be finalized soon.

There are 60 days to give our feedback. The government has set up a site on where you can tell them about your experience with mergers, or offer thoughts on antitrust law, mergers, big business, or unfair methods of business. It looks like this, click on the comment button in the red circle.

So that’s how you can help. Tell the government about your experience with mergers through this site. There are already over one hundred comments, and you can browse and read them.


Oligarchy — not a republic if you can’t keep it

The Causal Effects of Admission to Highly Selective Private Colleges 

Tyler Cowen, via Naked Capitalism 7-25-2023]

Affirmative Action for rich kids: It’s more than just legacy admissions 

[NPR, via The Big Picture 7-27-2023]

Chetty and his colleagues provide compelling evidence that fancy schools are promoting a kind of neo-aristocracy, with admission programs that help to perpetuate a family’s class privilege from one generation to the next


Climate and environmental crises

Warning of a forthcoming collapse of the Atlantic meridional overturning circulation

[Nature, via Naked Capitalism Water Cooler 7-25-2023]

“The Atlantic meridional overturning circulation (AMOC) is a major tipping element in the climate system and a future collapse would have severe impacts on the climate in the North Atlantic region. In recent years weakening in circulation has been reported, but assessments by the Intergovernmental Panel on Climate Change (IPCC), based on the Climate Model Intercomparison Project (CMIP) model simulations suggest that a full collapse is unlikely within the 21st century. Tipping to an undesired state in the climate is, however, a growing concern with increasing greenhouse gas concentrations. Predictions based on observations rely on detecting early-warning signals, primarily an increase in variance (loss of resilience) and increased autocorrelation (critical slowing down), which have recently been reported for the AMOC. Here we provide statistical significance and data-driven estimators for the time of tipping. We estimate a collapse of the AMOC to occur around mid-century under the current scenario of future emissions.”



Project 2025’: plan to dismantle US climate policy for next Republican president 

[Guardian, via Naked Capitalism 7-29-2023]



Open Thread

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At a Societal Level “Can’t Afford” Is Bullshit

John Maynard Keynes – “Anything we can do, we can afford.”

Money tells you how much of society’s resources you can command. Can you use that building, that land or that person?

It’s more than that, of course, but this is its most fundamental use.

But we are all familiar with the fact that often there are empty buildings, unemployed people and land which is not being used productively. We also know that often what people, land and buildings are being used to do is a bad: a net negative.

99% of Wall Street, for just one example. 85% of the US military, for a second.

We use money so much that we forget that it’s only a proxy. What matters is the actual resources: do we have enough, epople, land, buildings, oil, steel, and other resources to do something or can we get the resources we need, either by moving people and other resources away from bad stuff to good stuff, or by creating more resources.

If we have enough or can create enough or can redistribute enough resources, we can do that thing, whatever it is. The limit isn’t money, the limit is actual, real resources.

Estimates of bullshit jobs are at about 40% or so. I’d personally put it higher: jobs that either are pointless or actively harmful are the majority of what we do.

We can do plenty, any time we really, as societies, want to.

There will come a time, and that time is not so distant, where we can’t. Where real and painful decisions will have to be made, but we are still, in most of the developed world, in a surplus situation, with a lot of resources mis-allocated. Reallocate them and we can fix many of our problems and mitigate almost all the rest, while actually improving human and animal welfare massively.

“Afford” is a word for people, not a word for governments who can print money. For them, the question is “does the country have the resources and can they be mobilized?”

We can make the world and ourselves better when we want to, at least for now.


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The Distributed Nature Of Collapse

When the western world sanctioned Russia they expected Russia to collapse. It didn’t. The first reason is that most of the non-western world didn’t cooperate with the sanctions, but the second is simple: Russia has a food and fuel and mineral surplus.

The world as it stands now is every inter-dependent. The supply networks are dizzyingly complex and a final item like a car is made up of materials and parts extracted, made and assembled in dozens of locations.

The world isn’t always this way: it was like this in the late 19th, but after WWI that changed and the era of free trade ended, collapsing in particular during the Great Depression. The world did not become as “free trade” as it was before WWI again till the early 21st century.

But we are in a period of collapse. The peak, I would guess, will be seen to have been 2020, though different parts of the world economy will peak at different points (peak conventional oil was 2005, fracking and shale oil is not as good.) There will be water peaks, food peaks, peaks for various minerals like copper and so on. There will be a population peak, which will occur after a lot of other peaks. One model, which has been pretty accurate in general terms, is the Limits of Growth model, which regular readers will be familiar with:

Now the thing to understand is that as resources become genuinely scarce rather than simply distributionally scarce (we have more than enough food and have for a long time but people still go hungry) countries will stop trading away what they need and will move to more restricted trade. “We have excess food, you have excess minerals, we will trade with you for this, but we are not selling food generally on the world market to just anyone.”

In periods of genuine shortages, countries stop trading indiscriminately. Food riots are one of the main causes of government collapse and elites losing their lives. Running out of heating or cooling fuel or fuel to run the distribution network (diesel is probably near peak) can lead to fast internal collapse, and so on.

So when there isn’t enough, you stop playing around. You don’t trade unless you’re getting something concrete you need. If you need something, don’t have enough of it and either can’t or would rather not trade for it and still can run your military, you send your military to go get it. (This will become harder and harder though, as modern militaries are resource hogs.)

We’ve had a world economy for a long time now: most of the world since 45, virtually all of the world since the collapse of the USSR (and even before that the USSR, which had food shortages and petroleum to sell, was in the world market.)

Increasingly we will not. Some of this is driven, right now, by competition between the West (which includes S. Korea, Japan and Taiwan) and China, but even much of that is, I suspect, shortages in drag. Soon it will just be “there isn’t enough, who is going to get it?”

Take a good hard look at where you live and what it can make and grow and dig up itself, and how well it can be defended. Because that is going to matter even more in the not-so-far future.

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How To Reduce Inflation And Create A Good Economy

Right now we have central banks attempting to control inflation by crushing wages. But wage-push demand isn’t the primary driver of inflation, it is corporate profit taking (increasing prices much faster than their costs) and some genuine supply bottlenecks.

This cannot be fixed by central banks except by smashing ordinary people flat, and in certain senses not even then, since it will lead to long term maldistribution of resources which will lead to real economic problems in the future: problems not based on distribution or finance, but on lack of physical ability to create what we need.

If we want to fix this we have to make it so that those who control economic decision making can only do well if the population as a whole does well. That means politicians who want to help the population (not 90% of European or American pols) and corporate leaders who need the population to do well.

We’ll concentrate on the corporate/private side.

Take public all natural monopolies. Monopolies and oligpolies can charge more because people have to buy what they have. Private enterprise is only better than government at providing differentiated goods. If everything is the same (and a joule is a joule and a liter of safe water is a liter of safe water and a cheap, fast train trip is a cheap, fast train trip) then government can do it cheaper and better than private enterprise, since it doesn’t have to make a profit.

Excess Profits Tax or Max Profits Tax. You can only make 5% profit + inflation. Anything more is taxed away. Money invested, is not taxed, however.

No Stock Buybacks, No Stock Options. If a company has excess money, it can only increase profits and stock prices by producing more or better.

Executive and Board Salaries Linked to General Welfare. All compensation is treated as wages. Wages above 10x median are taxed at 95%. They are only allowed to increase by the average of the median individual income, and the median income of the bottom 5%.

No Capital Flows To Other Except For Resource Extraction: Comparative advantage does not work with free capital flows. This was noted by Ricardo when he created the comparative advantage. Companies need to reinvest at home. They also need to not be able to run away with capital because they don’t like being only 10X as rich as the rest of the population.

No Free Central Bank Money: The central bank doesn’t get to just give people money, like it has been since 2008. That’s a legislative decision and one which the legislature should not be allowed to give away to other bodies except in relatively small amounts (perhaps a max of 1% of GDP.)

Break Up the Banks and Regulate Them Properly: Banks decide who gets to do what. If you want the advantages of a free market you need lots of them: easy enough, create them by breaking up the big banks. As for regulation, go back to an equivalent of Glass-Steagall.

Break up Monopolies and Oligopolies in General: either it’s a natural monopoly, in which case the government should run it, or it isn’t, in which case it’s broken up. Go back to prices rising in unison being enough evidence by itself of an oligopoly.

Retailers Either Sell Only Their Own Stuff Or Only Other People’s. No store brands, no Amazon basics, none of that. It’s vastly anti-competitive. Nor can retailers mandate that they must get the lowest price or any other such thing.


The general principles here are just to move the market back towards a free market and to “align” incentives so that rich people can’t get richer without everyone prospering.

There’s much more required, of course: these policies require politicians to want to implement them, and for them to last for any length of time, changes need to be made to politics to also make sure politicians self-interest is aligned with the general population. (The other method, which might better is to remove self-interest from these decisions entirely. You don’t always need skin in the game in a material sense—doctors with no financial stake make better decisions for patients than those with and endless measurement aligned with incentives warps measurements.)

None of this is really complicated in the broad strokes. We know what creates good economies and societies, we just rarely do it and those with the most power, whether people or countries, try to keep other countries or people down.

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Week-end Wrap – Political Economy – July 23, 2023

by Tony Wikrent



First major survey of doctors with Long Covid reveals debilitating impact on health, life and work

[BMA, via Naked Capitalism Water Cooler 7-21-2023]

“Around 60% of doctors told the BMA that post-acute Covid ill health has impacted on their ability to carry out day-to-day activities on a regular basis; Almost one in five respondents (18%) reported that they were now unable to work due to their post-acute Covid ill-health; Less than one in three (31%) doctors said they were working full-time, compared to more than half (57%) before the onset of their illness; Nearly half (48%) said they have experienced some form of loss of earnings as a result of post-acute Covid.”


Covid Origins Scientist Denounces Reporting On His Messages As A “Conspiracy Theory”

[Public, via Naked Capitalism 7-21-2023]



‘An Act of War’: Inside America’s Silicon Blockade Against China 

[NYT, via Naked Capitalism 7-16-2023]

Though delivered in the unassuming form of updated export rules, the Oct. 7 controls essentially seek to eradicate, root and branch, China’s entire ecosystem of advanced technology. “The new policy embodied in Oct. 7 is: Not only are we not going to allow China to progress any further technologically, we are going to actively reverse their current state of the art,” Allen says. C.J. Muse, a senior semiconductor analyst at Evercore ISI, put it this way: “If you’d told me about these rules five years ago, I would’ve told you that’s an act of war — we’d have to be at war.”

If the controls are successful, they could handicap China for a generation; if they fail, they may backfire spectacularly, hastening the very future the United States is trying desperately to avoid.

The Looming War Against China

Michael Hudson [On Finance, Real Estate And The Powers Of Neoliberalism, via Mike Norman Economics, July 22, 2023]

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