Sunday, October 30, 2016

Howard Odum, transformities and the urban/rural divide in America

It's hard not to see the urban/rural divide in the United States--unless you just don't look. Perhaps the most iconic image representing that divide is a map of presidential election results by county. The map below is from 2012.

U.S. PRESIDENTIAL ELECTION RESULTS BY COUNTY (2012)
RED = Romney (Republican) BLUE = Obama (Democrat)



Most of the land area of the United States represents Republican territory. But, of course, dense urban areas taking up much less land, but having far more voters per square mile, proved decisive for the incumbant Democratic presidential candidate, Barack Obama.

It might seem that this is merely a cultural divide, hicks versus city slickers. But it is also an economic divide. Rural areas have been pummeled economically by the globalizing economy. That economy rewards the innovations and technology invented and deployed in cities more than the commodities that come out of the countryside. Hidden beneath these cultural and economic factors is an energy imbalance that Howard Odum, the great pioneer in understanding energy flows in nature and society, first identified in his work on what he called transformities.

Sunday, October 23, 2016

Campaign melodrama: As the world burns

In the melodrama that passes for the U.S. presidential campaign, Donald Trump got practically all the post-debate headlines last week when he hedged on whether he would accept the outcome of the upcoming presidential election. But for those most concerned about genuine sustainability, what both candidates agreed on should be far more troubling. And yet, it elicits nothing more than a yawn these days in political discourse.

The candidates agreed that the U.S. economy needs to grow more rapidly. What they argued over is whose economic plan will make it grow faster.

The push for economic growth has become sacrosanct in modern political discourse. Growth is the elixir that heals all social and economic divisions and makes possible the solidarity that comes from the feeling that the path to wealth is open to everyone.

For the vast majority of people on the planet that path was never really open. And, since the so-called Great Recession, it has been closed off completely for all but those at the top of the income scale.

Sunday, October 16, 2016

Deepwater Horizon and our emerging 'normal' catastrophes

While watching the recently released film "Deepwater Horizon" about the catastrophic well blowout in the Gulf of Mexico that caused the largest oil spill in U.S. history, I remembered the term "fail-dangerous," a term I first encountered in correspondence with a risk consultant for the oil and gas industry.

We've all heard the term "fail-safe" before. Fail-safe systems are designed to shut down benignly in case of failure. Fail-dangerous systems include airliners which don't merely halt in place benignly when their engines fail, but crash on the ground in a ball of fire.

For fail-dangerous systems, we believe that failure is either unlikely or that the redundancy that we've build into the system will be sufficient to avert failure or at least minimize damage. Hence, the large amount of money spent on airline safety. This all seems very rational.

But in a highly complex technical society made up of highly complex subsystems such as the Deepwater Horizon offshore rig, we should not be so sanguine about our ability to judge risk. On the day the offshore rig blew up, executives from both oil giant BP and Transocean (which owned and operated the rig on behalf of BP) were aboard to celebrate seven years without a lost time incident, an exemplary record. They assumed that this record was the product of vigilance rather than luck.

Sunday, October 09, 2016

OPEC production cut: Just another Saudi head fake?

What do you do when everyone is bugging you to do something, but you don't want to do it? The simple answer is that you make it look like you are doing something in order to get others off your back.

It is not always easy to tell what people's intentions are. But we can look at what they have done in the past. The main thing that the Kingdom of Saudi Arabia has done over the past year in response to pressure from other OPEC members is talk about steps it would take to raise oil prices. But in the end the kingdom doesn't actually do them, or it does things which have no practical significance. (Saudi Arabia, the world's largest exporter, is the OPEC member with the greatest flexibility in its production. Any OPEC production cut without Saudi leadership would lack credibility.)

We should keep all this in mind when evaluating the latest reports that OPEC has agreed to cuts. Bloomberg tells us right up front that OPEC has merely agreed to the "outline of a deal" that will be taken up at its November meeting.

One of Saudi Arabia's partners in its yearlong public talkfest has been Russia, the number one or number two oil producer in the world depending on what month it is. The Russians said in early October 2015 that they were ready to discuss oil prices with OPEC. Later that month it was leaked that the Russians had no intention of cutting their own production. In late January of this year, the oil price catapulted after Russia's energy minister said he was "ready to meet with OPEC and Saudi Arabia to discuss a production cut," the Financial Times reported.

Sunday, October 02, 2016

Donald Trump and the impossible destination of globalism

In a recent column, The New York Times columnist Thomas Friedman shows himself to be as good a spokesman for the world's elites (with whom he often communes) as anyone on Earth. He asks one simple question about Republican presidential candidate and billionaire real estate magnate Donald Trump: How?

Friedman's column-length answer is a catalogue of Trump's puzzling views about NATO and ISIS, his poor command of the major issues, his contradictory statements and his strange embrace of tax avoidance.

What's missing, of course, is the centerpiece of Trump's appeal: his criticism of major trade deals which have devastated entire industries in the United States and destroyed the middle-class jobs that go with them. To the defenders of globalism--and Friedman is one of globalism's fiercest defenders--Trump's criticism is nothing short of heresy.

But the billionaire's bluster embodies the anger that people affected by those deals feel every day. Not a few of them have previously been consistent Democratic voters. Of course, there are plenty of Republicans who are voting for Trump because he is the party's candidate. And, there are plenty of evangelicals and so-called "values voters" supporting him (despite his profligate ways) because his party has traditionally opposed abortion, supported prayer in schools, and fought same-sex marriage.

Sunday, September 25, 2016

Taking (another) a short break - no post this week

I'm taking another short break. A temporarily overwhelming workload has prevented me from writing a post this week. I expect to post again on Sunday, October 2.

Sunday, September 18, 2016

Sunday, September 11, 2016

Why 'overregulated' California is leading the way

Ideologues hate it when the facts get in the way of their theories. California's Gov. Jerry Brown signed trailblazing legislation last week that commits the state to audacious greenhouse gas emission reductions by 2030 of 40 percent below 1990 levels. Not surprisingly, longstanding critics from the business community were howling once again about how California's business climate will deteriorate as a result.

The law extended efforts under California's previous cap-and-trade bill which set emission targets for 2020 to match 1990 levels.

Predictions of doom for the California economy are a perennial staple of California politics. But is there any truth to them?

First, here are the bald facts. Growth of California's 'overregulated' economy has frequently exceeded the U.S. economy as a whole since 1998. Annual growth in gross domestic product shown in the linked graphs is not a perfect measure of economic vitality, but it shows that fears that California is somehow stunted by its so-called excessive regulatory and tax burden isn't supported by the growth numbers.

Sunday, September 04, 2016

Hanjin shipping bankruptcy: 'Efficient' just-in-time delivery not so efficient after all

We are about to learn once again that lack of resilience is the flip side of efficiency. The world's seventh largest shipping firm, Korean-based Hanjin Shipping Co. Ltd., failed to rally the support of its creditors last week and was forced to file for bankruptcy.

Retailers and manufacturers worldwide are in a bit of a panic as the fate of goods on Hanjin ships shifts into the hands of courts and lawyers for creditors intent on seizing Hanjin assets in order to ensure payment of outstanding bills. Much of Hanjin's fleet is chartered, that is, owned by others, and those owners want to make sure they get paid their charter fees or get their ships back pronto.

The result has been that half of Hanjin's container vessels are currently blocked from the world's ports for fear that the ports will not be paid for their loading and unloading services. Other shippers which include trucking companies which carry containers to their final destination are reluctant to take on Hanjin freight for fear of not getting paid. (You are perhaps seeing the main theme here.) Meanwhile, the sudden drop in available shipping containers and ships has caused shipping rates to soar as businesses scramble to make other arrangements for items still to be shipped.

U.S. retailers are so panicked that they have asked the U.S. Department of Commerce to step in to help resolve the breakdown which is likely to hurt those retailers during the upcoming Christmas shopping season.

Sunday, August 28, 2016

Monsanto, temptation and some 'adolescent' farmers

"I can resist everything except temptation," one of playwright Oscar Wilde's characters tells us. But, the management of Monsanto, the agribusiness giant, must not be fans of the theater. As a result Monsanto has done the equivalent of giving a teenage boy the keys to the family car and then telling him that he can't drive it. We know what comes next.

The way this has manifested itself is widespread damage to soybeans, peaches and other crops from drifting herbicide. The problem has gotten so bad that the U.S. Environmental Protection Agency (EPA) has issued an advisory reminding farmers that the offending herbicide, dicamba, is not yet approved for spraying on dicamba-resistant soybeans and cotton (produced by Monsanto). That approval is under review, but only for a special dicamba formulation from Monsanto which supposedly reduces drift.

In the meantime, state agricultural officials in Arkansas have become so alarmed they've banned dicamba for use on row crops.

To understand how this happened, first we need some background. Monsanto is famous for its genetically engineered crops that resist its Roundup Ready brand herbicide. The herbicide can be sprayed on a resistant crop such as soybeans or cotton, and it kills unwanted weeds in the field while sparing the crop.