Elevator 'crisis' as symptom of our infrastructure predicament

I recently noticed that the elevator at my favorite cinema has been out of order for weeks now. The less mobile patrons need that elevator to transport them downward to this underground theater. I then learned of America's "elevator crisis" and my mind wandered to the struggle to maintain the Roman Empire. I'll explain the connection below. But first a refresher on Rome's predicament:

The Roman emperor Trajan brought the Roman Empire to its greatest extent during his reign (98 to 117 A.D.) with his successful conquests in what we today would call the Middle East. Rome's many conquests had been financed by booty taken from the conquered.

But its hold on the sprawling empire—one that reached from northern England to southern Egypt, from Spain in the west to what today is called Iraq in the east—would henceforth have to be financed by rising taxes and inflated currency. The money was needed to pay for armies and naval forces to defend the empire's very long land and maritime borders. Building an empire turned out to be less expensive than maintaining one, including building and maintaining the infrastructure of roads and military and political outposts needed to protect and administer it.

What happened to Rome's maintenance bill happens in any system of infrastructure as it expands. The existing infrastructure must be maintained even as new infrastructure is built. Eventually, it becomes very expensive 1) to pay collectively for maintenance of all existing infrastructure and 2) to pay for increasingly aging infrastructure that requires extra expense.

Taking a break - no post this week

I am taking a break this week and plan to post again on Sunday, January 12.

Bird flu: Will it be the biggest story of 2025?

Amid ongoing wars in Ukraine and the Middle East; the collapse of governing coalitions in Europe; the return of Donald Trump to the presidency of the United States promising to downsize its federal government radically and end or pare down its commitments to Europe and Ukraine; the hottest year on record in 2024 and worse to come including more violent and destructive storms due to relentless climate change; amid all this turbulence, a tiny virus may break through to become the biggest story of 2025.

KFF Health News reports that "at least 875 herds [of dairy cattle] across 16 [U.S.] states have tested positive" for bird flu and that "the virus shows no sign of slowing." As I discussed previously, for obvious self-interested economic reasons, the dairy and beef cattle industries did their best to thwart quick action to contain the virus when it began spreading earlier this year. Now, it seems, it is too late, and the foolish attempt to limit the economic damage to the beef and diary industries has instead turned the bird flu into a major and expanding calamity for both those industries.

There are two developments that could end up making this the biggest story of 2025. First, the availability of beef and dairy products may be curtailed as production declines due to sick and dying animals. So far, most dairy cattle survive the infection—only 2 to 5 percent die—but milk production declines by 20 percent. That kind of decline would be a big hit for the dairy market as the disease spreads to cattle practically everywhere.

When governments speculate: Orange County, British gold and Bitcoin reserves

There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present. Only after the speculative collapse does the truth emerge.

               —John Kenneth Galbraith, A Short History of Financial Euphoria, 1990

All the recent talk about government Bitcoin reserves has gotten me thinking about what happens when governments speculate.

By the time governments decide to take the plunge to make money by speculating, whatever craze they are joining is likely nearing an important and very bad turning point that will lead to regret. This is because in their actions governments are by nature conservative in the ordinary sense of the word and tend to follow rather than lead investment trends after long delays. (Sometimes, as you will see below, the opposite happens: Governments sell assets at the bottom believing low prices signal that such assets are no longer useful or relevant. They thereby miss out on the next bull market proving that their timing is backwards at both market extremes.)

Government employees' conservatism in action comes from being constrained by a web of rules that tell them what to do and when to do it. This is no more the case than in the management of government treasuries. That money is there to be spent on things the elected representatives decide to spend it on. In the meantime, it should be invested in low-risk securities with a very low likelihood of default, and that usually means investing in government securities of short duration. That also means low returns. But accepting such returns is said to be justified by the desire to make sure no money is lost.

Taking a break - no post this week

I am taking a break this week and plan to post again on Sunday, December 22.

U.S.-China trade war: Is the latest battle really tit for tat?

The United States and China moved closer to an all-out trade war as China last week banned export of the key high-tech metals antimony, gallium and germanium to the United States. That was in response to the United States banning exports to China of computer chip-making equipment, software and high-bandwidth memory chips (used for advanced applications).

It should come as no surprise that the three metals listed above are all implicated in the production of high-performance chips of the very type the United States won't send to China. Which leads me to ask: Which is more important for making advanced computer chips, the actual chemical elements needed to make them or the machines required to manufacture them?

More than two years ago I wrote a piece entitled "East vs West, 'Stuff' vs 'Finance'". My premise was that the United States and European countries ("The West") have hollowed out their economies by focusing on the finance, insurance and real estate sectors, the so-called FIRE economy, to the neglect of manufacturing, mining and agriculture.

President of the Titanic

Four years from now Vice President Kamala Harris may be glad she didn't get the promotion she was seeking from the American electorate. In fact, all those vying for high office around the world may find that the going from here on out will be much more difficult. What few of them realize is that global society has not only become a version of the Titanic, but that we're at the place in the story where the Titanic has already hit an iceberg.

Of course, government leaders around the world generally believe that—whatever our current troubles—the technological progress of humanity will continue unabated and our lives will get better. The world system we've created is, well, unsinkable. At least that is what they are conveying to voters; politicians generally know better than to suggest that under their watch people are going to have to make sacrifices. The last politician to do that was U.S. President Jimmy Carter and he was defeated for re-election.

Carter seemed to understand that we live in an age of resource limits and was attempting to prepare us for the necessary transition. But Americans didn't want to turn down the heat and wear sweaters indoors; they preferred gym shorts and T-shirts instead. Thirty-six years after what came to be called Carter's "Malaise Speech" one writer opined that "President Carter made the unforgivable error of treating the American people like adults."

More deglobalization: Russia cuts uranium exports to U.S.

Last week the United States authorized the use of American-made long-range missiles by Ukraine against Russia which the Russian government says risks escalation to a nuclear conflict in the almost three-year-old war. The Russian government reacted by announcing an unnerving shift in nuclear doctrine. It also announced reductions in uranium exports to the United States. By how much and for how long, the government did not say.

In light of what can only be seen as a proxy war in Ukraine between the United States along with its NATO allies and the Russian Federation, it is passing strange that the United States still relies on Russia for 27 percent of its enriched uranium. Oddly, the reaction in the spot market for uranium was a 4 percent slump in prices. Most customers for uranium—primarily nuclear power plants—have stockpiles and long-term contracts, so an immediate effect on spot prices was unlikely. But the price of uranium mining stocks soared in anticipation of greater pressure on mine supply outside Russia, the world's sixth largest producer.

This development highlights a vulnerability among metal importers across the globe. When relations between a large exporter of minerals and a large importer of them goes south, the consequences can be significant. While it's true that the exporter loses some revenue, critical material and energy shortages can have large effects. Inadequate uranium fuel for nuclear power stations could eventually lead to loss of generating capacity.

Falling human fertility can't be reversed by cheerleading for motherhood

Elon Musk told the world three years ago that "civilization is going to crumble" without a reversal in the accelerating decline in human fertility. He believes decisions by couples to have fewer children or no children at all because of environmental harms such as climate change (which is linked, of course, to growing population) are wrongheaded.

In Russia leaders are so concerned about falling fertility rates that health agencies are offering financial incentives for having children and free access to fertility treatment while discouraging abortions (which remain legal). The Russian government even revived the "Soviet-era honour award called Mother Heroine, which recognizes and honours women with 10 or more children."

Other countries with low birth rates are also offering incentives:

In Tokyo, the rates are so low that the government is launching a dating app to help citizens find love and get married.

The Japanese government has also tried to boost fertility rates by offering up to a year of parental leave and even cash incentives.

In South Korea, the least fertile country in the world, Seoul is offering people money to reverse their vasectomies or untie their tubes.

That's on top of South Korean companies offering employees up to $75,000 to have children, and a government allowance system that gives all parents with newborns $750 a month until their baby turns one.

While demographic experts insist it is primarily decisions by couples worldwide to marry later and have fewer children that are the cause of this surprising decline in fertility, they ignore the more ominous explanation, declining sperm counts caused by toxic chemicals and unhealthy modern diets (which are, of course, laced with toxic chemicals).

Donald Trump and the impossible destination of Globalism (revisited)

Back in 2016 a month before Donald Trump was elected for the first time, I wrote a piece that I'm revisiting here. So much of what I said then still applies that I encourage you to read that piece. My thinking was heavily informed by a lecture by the now late French philosopher Bruno Latour entitled "Why Gaia is not the Globe."

Latour made the case that Trump's perplexing popularity could be traced to his ability to give voice to the anger and fear generated by the effects of Globalism. In fact, Latour noticed that the anger and fear were actually widespread and reflected in Great Britain's exit from European Union and the many right-wing movements in European countries that now are all too familiar eight years later.

I am capitalizing Globalism because it really is an ideology and not the "inevitable" reality that so many of us think it is. In fact, as Latour explains, it is an impossible destination. First, let me lay out a definition of Globalism by quoting from my 2016 piece: