Outrun Change

We need to learn quickly to keep up with the massive change around us so we don't get run over. We need to outrun change.

Archive for the category “Economics”

More economic and environmental fails from wind energy

Still about 4 or 5 miles away from the turbines. Many of the towers are visible from highway 2. Photo of wind turbines north of Tioga, N.D. by James Ulvog

The bad news from slicer-and-dicers just keeps rolling in.

  • Article describes lack of CO2 benefit while running up cost of electricity in Minnesota
  • Description of environmental cost of building a wind tower

10/15/17 – Powerline – “Green” Energy Fails Every Test – Minnesota is touted as a model of green energy. With around $15 billion poured into wind power, the state is a good example of the damage from green.

More wind is produced in spring and fall, which does not correlate to when more electricity is needed, which is summer and winter.

So how has that $15,000,000,000 dumped into bird chopping turbines turned out?

CO2 emissions from the state, according to a new study, have only declined slightly. The drop during 2 years was due to an accident that took a coal plant off-line. Other than that, the drop is CO2 has been minor; nothing like what was supposed to happen with all that wind power.

Main reason is wind is very unreliable. When those slice-and-dicers aren’t producing, the energy comes from backup coal plants. So when there is little wind and high demand in the summer and winter, where does the extra electricity come from?

Read more…

Venezuela continues to collapse

Oil platform in Venezuela. A view of what used to be and could have been now. Image courtesy of Adobe Stock.

The bad news from Venezuela just doesn’t stop:

  • Protests have stopped because of lost hope
  • Professionals become prostitutes just to get enough food to keep the family life
  • Elections for state governors finally to be held on Sunday
  • Former executive of Brazilian construction company admits to paying $35 million to Venezuelan president’s election campaign
  • Guess on inflation rate for 2018 is over 2,300%

8/31/17 – Wall Street Journal – “Hope Is Gone” as Venezuelan Protesters Vanish From Streets – The protests have faded away. The ongoing massive arrests, torture of detainees, widespread human-rights abuses, and frequent shootings seem to have broken the protest movement. A number of senior leaders of the opposition have fled the country in fear for their life. Reports indicate 125 people have been killed and somewhere around 2000 have been wounded, with many of those people with permanent injuries.

One outside observer, who is safe because he is an American living in the United States, observers the president has gained effective control of the entire government. I think if we look at the typical definitions that makes him a dictator.

In the meantime the oppressed people of the country continue to scramble for food, trying to find enough so they don’t starve to death.

9/22/17 – Miami Herald – In Venezuela, they were teachers and doctors. To buy food, they became prostitutes. – A large portion of the prostitutes in Columbia are women who escaped Venezuela. Before transitioning to the world’s oldest profession, many of them were teachers, doctors, professional women. One brothel even has a petroleum engineer.

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Radical drop in cost of lighting as indicator of how much better our lives are today

From really expensive candles to cheap electricity for brighter light bulbs. What luxury we now have!  “Trip the Lights Fantastic” by Anne Worner is licensed under CC BY-SA 2.0

One measure of how radically life has improved over the centuries is how much nighttime illumination can be purchased from a certain amount of labor.

For example, George Washington calculated that it cost him £5 a year to provide himself five hours of reading light every evening. That is the equivalent of about $1,000 today.

Imagine spending $83 a month to light only one lamp in your entire house.

We are amazingly rich today.

This insight provided by Human Progress on 2/15/17:  How the cost of light has fallen by a factor of 500,000.

Here are some reference points provided by the article:

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Rapid economic growth of the American colonies before the revolution.

Take a look at how rapidly the colonies developed over the many years in advance of the successful American revolution. Comments are from An Empire of Wealth: The Epic History of American Economic Power by John Steel Gordon.

One part that is astounding to me is certain geographies were very conducive to a certain type of crop. That is why tobacco, or corn, or cotton, or fishing for cod thrived in certain areas.

Consider: export of tobacco from Virginia to England:

  • 1618 – 20,000#
  • 1622 – 60,000#
  • 1627 – 500,000 #
  • 1629 – 1,500,000#
  • 1638 – 3,000,000#

let’s look at the annual increase and compound rate of growth:

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Why has there been such astounding economic success in the United States?

How to illustrate the super-abundance produced in the U.S.? Perhaps this view of a corn field, knowing there are huge fields of corn for a hundred miles in every direction. “An Iowa Summer Carpet” by cwwycoff1 is licensed under CC BY 2.0

Why these is so much economic output in the U.S. is a valuable question because once you can explain why the U.S. has seen such powerful growth for such a long time, there is a possibility, remote though it may be, for others to have the same prosperity.

Each of us has to search for the answer by yourself. I suggest you seriously consider the first chapter of An Empire of Wealth: The Epic History of American Economic Power by John Steel Gordon if you want to get your arms around the answer.

It is not just that the US is a large country that goes from coast to coast.

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More explanations of virtual currencies and possible applications

bitcoin” by komersreal is licensed under CC BY 2.0

Several recent articles provide more background on Bitcoin and other blockchain tools. For your daily brain stretching:

  • Blockchain as a possible tool for fast and cheap international payments
  • China is working to restrict blockchain transactions
  • Central banks ponder issuing of their own virtual currencies
  • Tax status of blockchain transactions and the IRS is out fishing for tax evaders
  • Description of blockchain as being the internet of money, comparable to how the internet moves and stores information

8/28/17 – Journal of Accountancy – Blockchain opens new era for cross-border payments – Moving money from one country to another is time-consuming and costly. There are fees at both ends. It takes several days for the money to arrive. An error in one digit of the routing or account information means the transfer will go astray and take more time and money to locate.

Blockchain offers the opportunity to make international transfers near immediate and at a fraction of the cost.

For an illustration, picture a company paying international vendors. Or an international worker sending part of his paycheck back to his parents in his home country. Or a mission organization moving funds to its many field offices.

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Retail brick-and-mortar stores continue their slide

The near future for a lot of Sears stores. Image courtesy of Adobe Stock.

I read but did not keep track of a WSJ article describing e-commerce companies moving into otherwise dead shopping malls and converting them into fulfillment centers. Sounds like a good way to recycle vacated malls.

Some other articles on the deteriorating retail market. Also, an explanation why sales of vinyl records have slowed.

7/7/17 – USA Today – Sears to close 43 more stores as retail crisis continues – This is in addition to the 66 closings I mentioned on June 16, which is in addition to 180 announced since January 1st.  Article says this brings the year-to-date total to over 300. I obviously missed 20 recently that were mentioned in the article.

Article says J.C. Penny is closing 138 stores, Macy’s is closing 68, and Radio Shack has shuttered over 1,000 stores since Memorial Day.

Read more…

Venezuela continues moving toward dictatorship

Shipwreck standing on the beach with the sea in the background. Margarita Island. Venezuela. Photo courtesy of DollarPhotoClub.com

What little that remained of democracy in Venezuela continues to crumble.

8/4/17 –France 24 – Venezuela’s currency crumbles at dizzying speed – The value of the bolivar is shrinking fast.

On Thursday the bolivar dropped to 17,000 to 1 U.S. dollar.

The official exchange rate is 2,870:1.

The reporter interviewed an executive in a reinsurance business. That would be a professional level position. His salary is 800,000 bolivars a month. A year ago that was worth $200 and now it is worth $47.

Two pounds of rice costs 17,000 bolivars.

8/5/17 – Wall Street Journal – Venezuela’s New Assembly Fires Attorney General – Well, the slow-motion coup continues to roll forward.

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Drop in transportation costs from Erie canal

Erie Canal, Newark. Date: circa 1910. Image courtesy of Adobe Stock.

Infrastructure such as canals, interstate freeways, and the internet provide a foundation that enables the economy to boom.

This is one of many ideas I’m enjoying as I look at John Steel Gordon’s explanation of An Empire of Wealth: The Epic History of American Economic Power.

In the 1790s, the road system in the US was so poor that farmers in western Pennsylvania could not afford to ship their grain to the east coast. To make a living they had to distill their grain into whiskey so they could afford the shipping costs. A new thing I learned is how to describe that situation: value-to-weight ratio.

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Elections in Venezuela

Image courtesy of Adobe Stock.

An unofficial plebiscite was held to oppose the end of democracy. The vote for a constitutional convention to re-write overthrow the current constitution has been held, with uncertainty as to the actual turnout.

 

7/15/17 – Reuters – Venezuela opposition hold unofficial plebiscite to defy Maduro – The opposition holds an unofficial vote on 7/16 as a protest against the upcoming official vote which many consider to be the last votes ever in Venezuela as a new constitution will essentially put the legislature under the thumb of the president.

Read more…

Continuing devastation in Venezuela – #29

What economic system produces this result? Image courtesy of Adobe Stock.

The political and economic conditions in Venezuela continue to deteriorate.

7/3/17 – Bloomberg – Venezuela’s Poor Rebel, Roiling Maduro’s Socialist Strongholds The power base for the leaders of the socialist country is poor people.

From previous reading I’ve done, massive subsidies to the poor successfully bought their allegiance. The collapse of services including water outages, random outages of electricity, and empty store shelves are rapidly undermining support from the poor. Protests has spread to many of the poor communities in Caracas. There have been nightly protests in a number of communities for several weeks.

7/5/17 – Wall Street Journal – Maduro Supporters Storm Venezuela’s CongressRead more…

While on a long road trip, what economic system provided the goods and services I needed, when and where I wanted them?

How is it that services are available on the interstate highway system when and where I need them? Image courtesy of Adobe Stock.

I took a road trip from the Los Angeles area to Williston last week. My wife and I drove there with our son and his family.

A few questions came to mind on the trip

Questions

1. What economic system provides a gas station within a few miles of the point that we decided we wanted to fill up the tank?

With four drivers in the car,  we were planning to drive on through the night. We were too tired to do that so we decided to stop for the night.

2. What economic system provides multiple hotels and motels half an hour down the road from where we changed our mind?

3. Furthermore, when we wanted to stop, what economic system provided motels at multiple price points so we could pick the one that fit our price range and taste?

4. Why is it that the motel we choose included a full breakfast for all of us in the price?

5. Why did the motel even have two upgraded lamps on the night stands each with 2 USB charging points and two electrical outlets on the base of each lamp?

Answers

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More on the downside of unreliable wind power: paying for decommissioning costs

I count 64 turbine towers in that view. Photo by James Ulvog, somewhere southwest of Williston, en route to Denver.

There will be major costs involved in decommissioning wind turbines. Who will pay?

3/8/17 – Stop These Things – Farmers “Hosting” Wind Turbines Faces Massive Clean Up Bills & Other Legal Liability – Legislation is under consideration which would force wind power companies to set aside money to decommission the turbines. At the moment the corporate shells holding the producing assets have nothing set aside. Without some requirement for accumulating reserves, neither the holding company nor the entity’s parents will have any responsibility to clean up the site. There will be no recourse by landowners or regulators to force the then-empty shells to clean up the sites.  That will leave the landowner or the local government or the national government holding the bill for decommissioning.

Disposing of a wind turbine means finding some way to get rid of the toxic blades, the generator containing large amounts of rare earth metals, and 1000 metric tons of buried concrete.

Situation is similarly bad in Australia. Read more…

More on the downside of unreliable solar power: Paying to get rid of excess electricity.

Photo by James Ulvog.

There is so much excess electricity from solar power that sometimes California has to pay utilities in other states to take it. Also, what will we do with all those panels when they wear out?

6/22/17 – Los Angeles Times – California invested heavily in solar power. Now there is so much that other states are sometimes paid to take it – There are two non-negotiable physical laws that undercut the value of solar power.

First, electricity must be used the instant it is generated. Second, solar power is generated when the sun is bright not necessarily when the electricity is needed.

Some days, there is so much solar power in California that “we” have to pay utilities in Arizona to take the electricity in order to keep from overloading the grid in California.

Read more…

Bleak outlook for Venezuela

Image courtesy of Adobe Stock.

With the supreme court compromised, the president outmaneuvering the congress, all members of the military under the watchful eye of Cuban zampolits (political officers), and the most loyal members of the military allowed to enjoy the spoils, there doesn’t appear to be much hope for either a peaceful solution or near-term end to the massive, intentionally caused humanitarian suffering in Venezuela.

Here are two short comments on the escalating violence and a long discussion of a feature article on the collapse of democracy and the economy.

6/16/17 – AFP at Yahoo News – Venezuela mobs kick, burn thieves in lynching epidemic – What happens when governments take actions that prevent the economy from working and as a result people are starving? Thieves start robbing people of food at gunpoint (money isn’t worth stealing).

What happens when robberies get out control because there is so much disruption and the government can’t do anything to maintain peace and there is widespread suffering? Mobs start lynching robbers.

There were 20 reported mob driven lynchings in 2015, 126 in 2016, and 60 in the first five months of this year.

In one attack on an armed robber, the police were able to pull the near-unconscious man into a police car as the mob cheered having beaten him. Another reporter filmed a robber being set on fire.

Read more…

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