Thursday, November 20, 2014

The US is a nation built on illegal immigration

Considering the hyperbole flying across the social media space regarding which president took the most unconstitutional action, it is easy to forget that many of our ancestors came here as "settlers" and "immigrants". But it is well documented that Christopher Columbus intentionally gave blankets that were used by the sick among his group of explorers to the native Indians in the hopes of killing them off. That was just the start.

Had the native Indians any notice of the plans of the early settlers of this country and the power to stop them, most surely, they would have prevented the settling of the US by white invaders. If they had newspapers, and an advanced government, almost surely, the white men they saw on their shores would be "illegal immigrants", "invaders" or worse, "white trash".

It should be noted that in recent years, this country hit a 25-year low in birth rate. If we don't let enough immigrants into the country, we're going to be looking to Japan for ideas on how to manage and care for a fast growing elderly population. The solution in Japan is not all that surprising. They want to build robots that will care for their aging population.

Japanese immigration policy is stricter by far than ours. As a result, they have a low birth rate, a slow economy and projections show that they are poised to lose at least 30% of their population within 50 years. Is that where we want to go?

Does anyone remember what it says at the base of the Statue of Liberty?
“Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed, to me:
I lift my lamp beside the golden door.”
Those people come here to the land of opportunity for a reason. To make their lives better, and in so doing, they find ways to make the lives of others better, too. It is a basic principle of life that when you make your life better, the best way to do it is to help others and make their life better. I know this from personal experience.

The current immigration policy and debate suggests that we are being very selfish to the point of self-destruction. There is no evidence that Mexican immigrants are taking jobs that Americans want. They are picking the produce we see at the market, they are keeping house at work and at home where people can afford it, they are doing the menial labor that most Americans don't want to do. Unless of course, you're working on a post PhD thesis, then there is real competition for the janitor space. By the way, I also note that in the landscaping space, white men dominate in Utah. I know this because the landscaper I hired to keep my lawns for the last few years was white. Even his crew was white.

(If you want to bring jobs home, deal withe strong dollar first.)

This country was built by immigrants, from top to bottom. It is not white, black or brown. It is a wonderful mix of everything from everywhere, providing the greatest possibility for our survival. The diversity of our nation is essential to our survival.

Wednesday, November 19, 2014

America ignores thorium at their own peril

Last night, I happened to have found the time and opportunity to listen this podcast, featuring Kirk Sorensen. I was looking for recent news on thorium molten salt reactors and this one came up.

There were a few topics in that podcast that caught my attention that I wanted to bring to yours. First, China is investing hundreds of millions every year into research in this technology. Compare that to American interest: one or two government committees and a handful of private companies actively researching it. You almost certainly won't hear of any news of debate over this topic because there are entrenched carbon fuel interests who don't want us to consider it yet. They'd rather wait for peak oil, peak gas or peak coal to hit for maximum profits.

Fortunately, there is building American interest in molten salt reactors (MSRs). Just a couple of months ago, Forbes ran this article about the growing interest and investment in thorium MSRs and provided some great history on the topic, too. Like Mr. Sorensen, the article expressed concern that we will be left behind as other lead the charge to build a commercial MSR for civilian power production. A young startup from MIT has just scored $2 million in seed money and that is encouraging.

China wants to have an operational MSR by 2017. India claims to have one in operation in 5 years. The Czech Republic and Russia are also working on MSRs. We had two running, one in the 1950s and one built by the Oak Ridge National Laboratory that ran for 4 years with no problems. We started it, but other countries are taking the lead.

Another concern raised by Mr. Sorensen is that there are 23 power plants in the US that are built on the same design as the one that blew in Fukishima. GE, the company that designed the plant says that since then, the plants have been modified based on experience from Fukishima and from decades of experience worldwide. But the bottom line is that all nuclear power plants today use a highly pressurized containment vessel, up to 160 atmospheres of pressure, to contain the water that keeps the core of the reactor cool. This is what we're really worried about, a rupture of that containment vessel.

Thorium MSRs don't have that problem because the fuel is already a liquid. There is no worry about a meltdown and even if there were an accident, the fuel can be safely drained away into a holding tank to stop the reaction. It all runs at one atmosphere of pressure, too. So there is nothing to explode in an accident.

It's good to see that some American companies and investors are taking notice and building the power plant of the future. There are numerous benefits to thorium MSRs which are discussed in the Forbes article. Hopefully, someone in Congress is noticing that for a long time, we've been using a very inefficient nuclear power plant and that we're ready for a change.

But given the composition of the next Congress, we might have to wait until 2016 to see people in Congress who are not funded by carbon fuel interests and are willing to make more rational decisions about energy policy.

Tuesday, November 18, 2014

Changing the terms of the debate between Congress and Obama

While it may not seem like it, President Obama is actually in an excellent bargaining position with Congress. Sure, he's facing solid Republican majorities in both houses. In January, every committee will have Republicans chairing them, which means that almost certainly no bills authored by Democrats will ever see the floor of either house for a vote. Especially if Obama supports that bill. But he still has something Republicans don't have. Veto power, or the power to sign a bill into law.

Unfortunately for the Republicans, they still have to show that they're making a good faith effort to negotiate with the president (they haven't). They will also have to show the nation that president is not playing ball (they haven't). Once Obama casts the Republicans as extreme, unreasonable and offering completely unpalatable and unworkable solutions, just to tease the president, life could get really unhappy at the next major election for the Republicans. Of course, people would have to take time out of their very busy day to notice what's going on.

Republicans may think they have the upper hand in the debate on the economy, but they sure have a hard time explaining what happened to the loss of more than $900 billion in annual economic demand since 2008. Republicans have been keen to point out problems in the economy, but have failed to account for the improvements since the start of Obama's term. Perhaps they aren't as focused on inequality as Obama is.

Some pundits are saying that Obama now has nothing to lose as a lame duck president. While that may seem apparent, he is acutely aware of the prospects for his colleagues in the Democratic Party and is doing what he can to improve them. But he won't have the cooperation of the majority Congress to do it. Who can he turn to for help?

I would say that his biggest ally is his pick for chairman of the Federal Reserve, Janet Yellen. Yellen is, by many accounts, more concerned with unemployment than with inflation compared to her predecessors, Alan Greenspan and Ben Bernanke. She is a Keynesian economist and seems to understand that when demand falls, government can take up the slack and make up demand in the form of government spending. She would be in direct opposition to the position held by many conservative members of Congress: that when government gets out of the way, the private sector will create demand.

Anyone familiar with the history of this country since the Reagan Administrations, can see that the empirical evidence simply isn't there to support the majority in Congress. We've tried their neoliberalism for more than 30 years and it simply hasn't worked. All it has done is given us a bubble economy where wages remain flat for workers while income rises for professionals and capitalists (the people who own most of the capital). If conservatives were right, the wealthiest of us would be spending money to enjoy their wealth and that would increase employment. But that is not what happened now, did it?

There are some economists who have figured out that biggest problem to solve is the trade deficit, not the federal budget deficit. They may have even noticed that China buys our debt to support the dollar, and to support the trade deficit we are running with China. At least one economist has noticed that bringing the value of the dollar more in line with other currencies, to the point that the trade deficit disappears, will bring home about 6-7 million jobs. That is probably enough to fill the $900 billion hole left by the collapse of the housing bubble in 2008.

Obama can change the terms of the debate by showing us how all of this fits together. He can work with Yellen to show how the trade deficit works to send jobs overseas, keeps wages flat and allows CEOs to profit from the delta between the dollar and currencies around the world. Together they can show us that diminishing or eliminating the trade deficit by cutting the value of the dollar will bring jobs back home and increase demand here, at home.

I believe that Yellen is well positioned to act on such a strategy. When demand returns, unemployment falls, and when unemployment falls, employers have to pay more to keep workers around. When unemployment hits 4%, the lowest paid workers will get a raise, whether employers like it or not. You see, I don't think the debate in the minds of Republicans is so much about keeping what you earn. I believe it's about keeping or increasing the distance between the 1% and everyone else.

Once trade balance is restored, if they act on the plan described above, all that Obama has to do is point to a do-nothing-Congress full of Tea Party conservatives who exhibit nary a concern for unemployment, but who will protest, gnash their teeth and whine about how their plan would have worked if we had just given it a try. We did that for more than 30 years. It's time to go the other way. Obama could lead the way in that direction, toward even trade and full employment. Without the help of Congress.

Monday, November 17, 2014

It's time to make corporate political contributions public information

This caught my eye this morning. Maryland is working on a bill that requires among other things:

  • Corporate contributions to any political campaign must be posted on the corporations website within 48 hours of the contribution.
  • Corporations must show that a majority of shareholders approved the contribution.
  • Corporations must show that a majority of their shareholders are permitted to make political contributions.
Such a law would make anonymous political contributions by corporations illegal. Publishing information about political contributions from corporations would allow their customers to see if they're making a purchase that works against customers' interests. It would also allow the employees working for that company to see that management has an interest aligned with theirs, and if not, workers are free to work somewhere else or strike.

Such a law would also subject every political contribution to a vote by the shareholders. This is a big part of corporate governance that is often ignored. Why should the board of directors be the sole arbiters of the value of a political contribution? Everyone who has skin in the game gets a voice in the ultimate fate of the business. Besides, board members have been shown to make mistakes and sometimes, they need parental supervision. You know, better corporate governance.

The last bullet point is very interesting. As the article notes, in most Fortune 500 companies, the majority shareholders are institutions and those institutions are not allowed to make political contributions.

It is telling that Congress refuses to pass any meaningful election reform, particularly with Obama in office. It is also telling that during the last midterm election, many states passed very liberal initiatives while increasing a conservative majority in Congress. Several states raised the minimum wage and legalized marijuana yet returned or added conservatives to Congress. This suggests that gerrymandering played a significant role in building and maintaining a conservative Congress.

90% of Americans believe there is too much corporate money in politics. If big conservative ideas have such broad political support, then having a fair election, without corporate money involved, or even making corporate contributions public information wouldn't be a concern. Unfortunately, for many in Congress, it still is. Imagine what would happen if every state passed such a law as the one being considered in Maryland.

Saturday, November 15, 2014

Wasting the land for fun and profit with fracking

I note with supreme disappointment some of the abysmal images of what the land looks like after oil and gas companies are done with fracking the land (just do a search for images of land after fracking and you'll see what I mean). It's just as bad or worse than mountain removal mining, something that's all the rage here in Utah.

Fracking is a process of using water to force oil and gas out of the ground for collection. Fracking allows oil and gas companies to get at hard to reach, hard to extract, but very large deposits of gas and oil. According to some sources, fracking has increased oil production here in America by 50%.

Unfortunately, fracking is wreaking havoc across our land. Fracking is polluting our water supplies, leaving square miles of wasted land where nothing will grow, land that is ugly, and far beyond remediation. It will take centuries for nature to reclaim that land. Perhaps it's no coincidence that the remake of the television series, Battlestar Galactica used the term "frack" in place of a well known four letter word.

Oil and gas companies defend their practice of fracking and are happy to see a Tea Party Congress not only ready to defend them, but just chomping at the bit to reward them with a regulatory environment that lets them walk away with the profits without cleaning up their mess. To put it differently, the Tea Party is working hard to allow oil and gas companies to privatize the profits of their activities while socializing the costs.

It is unfortunate to see President Obama supporting conservative efforts to allow fracking to continue in the United States. This is particularly vexing when even the the most favorable evidence shows that US domestic oil production pales in comparison to world production and demand, with negligible effects on energy prices.

The natural resources extracted from our land will be sold at a profit and the profit will see very little taxation. Just ask Exxon. The best estimates place their effective tax rate at just 17%.

But I don't think it's just a question of taxation and reparations. After looking at the tremendous abuse that fracking does to the land, I don't think there is any amount of money that can be paid to rebuild the land as it once was. The damage is so horrific that many small towns, cities and even one state have all banned fracking.

We might not be having this conversation save for one president Nixon. In 1971, Nixon gave a speech to Congress to address energy policy in the United States. His speech directed our efforts towards a fast breeder reactor, the same reactor we still use today for producing energy from nuclear fission.

Had he turned another way, we could have had a far more efficient and safer molten salt reactor that runs on thorium and is at least 200 times more efficient in energy production, produces 1% of the waste of uranium and requires a fraction of the mining and processing effort. One ton of thorium can replace about 31 billion barrels of oil. Why? Nuclear fission has an energy density one million times greater than the carbon bond.

If the free market is so rational, why did it pick and stick with two of the most inefficient methods for producing energy, carbon-based fuels and the fast breeder reactor?

There is one more question to ask: who will pay for all of the mess? The Koch Brothers? They have every intention of extracting their profits without cleaning up their mess. Just ask the Tea Party. Lucky for them (and others like them), their anonymous contributions allow them to buy public policy without being responsible for their mistakes. Not so great for the rest of us.

Friday, November 14, 2014

The problem with patent supported drug development - it's slow.

Economist Dean Baker justly notes that patent supported drug development is slow. Not only is it slow, but it is inherently unfair because once a patent issues for a new drug, all further developments around that drug will accrue to the patent holder. No one else will want to work on that drug because they won't get any credit for the work and two, they could get sued for doing so.

This is a winner take all situation. As in so many "races" in technology, the one who gets the patent first wins and then everyone else quits and works on something else. Such conditions stifle innovation and preclude collaboration on new therapies and new technology in general.

This leaves a lone scientist to work at his bench for years and years without much help, unless he is willing to share the glory and the royalties with others. With a patent supported development process, it could take a long time to get all the rent-seekers in the room to agree on how to split the reward.

With open source development, scientists who truly want to save lives can do so, and still find a way to make a living with government or charitable funding. Now that conservatives are running the show in America, we can expect to see our government supported research subject to emaciating funding attacks on the part of the Tea Party. This is just one more reason that open source drug development makes sense. Drug development becomes more decentralized and not subject to the petty motives of any single political faction.

 Open source drug development is a collaborative system that allows many people to research and develop novel new therapies for any disease. Open Source Drug Discovery in India works with governments and non-governmental organizations (NGOs) to collaborate on drug discovery and development using open source models rather than the proprietary patent supported development model. It is first being applied to neglected tropical diseases where there is apparently not enough financial interest or it doesn't affect those who would seem to be in the best position to help.

There is one other problem with patent supported drug development that doesn't get much press, but it is noted by Mr. Baker: inappropriate promotion of a drug for a use not originally intended. With patents comes incentives to promote a drug for an inappropriate use or to exaggerate the efficacy or safety of the drug for a given disease. Removing patent incentives would allow the market to work naturally. Where the drug works, it's applied, where it doesn't work, it's not prescribed or recommended. But as long as the patent spigot is there, they will keep pushing the drugs for uses in ways that could hurt patients.

Open source drug development can reduce the time required to develop new drugs and allow everyone to be a winner with affordable health care. With patent supported drug development, there is one thing we can be sure of: there is only one winner.

Wednesday, November 12, 2014

The use of force in the context of energy policy

When I was a very young man in high school, I was bullied on a fairly periodic basis. I had few friends and could not stand up to the bullies, so I found ways to deal with them in my mind. Like the blond girls who seemed to depend on their looks to get what they wanted, I saw that the bullies depended on their brawn to get what they wanted. I saw a definite correlation between the use of force and intelligent action. The conclusion? The use of force tends to decrease the odds of positive results.

For the man who depends on the use of force to get what he wants, life is boiled down to two simple outcomes: get what you want or violence. There is no in-between. There is no negotiation. There are no alternatives. The consequences of this way of life are staggering and have many subtle effects.

This is not a conservative or liberal argument as both ends have been guilty of using force, and both ends have used force in ways that failed to benefit this nation as a whole. To be more specific, for decades, we have used military force and occupied countries in the Middle East for their oil. We have occupied those countries as a government intervention in the market to make sure that our country has access to cheap oil.

Because we use force by default, we are slow to look at green options. While some other more enlightened countries have replaced much of or nearly all of their dependence on oil with green options like solar, water and wind, we are barely making a dent in that quest. Since at least the 1970s, we've relied upon the use of force first to get what we wanted rather than to seriously try alternatives.

In 2013, 67% of our energy was produced from coal and natural gas. Only 1% was produced by oil. Yet we burn more than 20 million barrels of oil a day in our vehicles. The price of oil, or what we use in our cars, gasoline, is directly determined by our ability to inflict violence on the source of that oil. When our ability to inflict violence goes up, the price of oil seems to come down.

Total energy production by renewables (solar, wind, hydro) is about 13% in the US. In China its about 19%. By contrast Norway and Brazil are about half and half, with half the energy produced by carbon sources and the other half produced by renewables. Note that they don't have standing armies and they don't police the world imposing their will upon others. They don't rely upon the use of force to get what they want to an extent that is even remotely close to China or the US. Even Canada comes in at a close 3rd place to Norway and Brazil. No one associates aggression with Canada.

If, starting in 1973 with the oil embargo, we had relied upon American know-how, rather than force, we might be completely free of our dependence on oil today. We foreclosed that opportunity in 1980 with the election of Ronald Reagan and went with the carbon interests. But, as someone once famously said, you can always change the road you're on.