Archive for the ‘Worst of Times’ Category

The Good All Die Young

Wednesday, October 5th, 2011

Steven Jobs (1955-2011)The White House — Barack Obama writes:

Michelle and I are saddened to learn of the passing of Steve Jobs. Steve was among the greatest of American innovators – brave enough to think differently, bold enough to believe he could change the world, and talented enough to do it.

By building one of the planet’s most successful companies from his garage, he exemplified the spirit of American ingenuity.  By making computers personal and putting the internet in our pockets, he made the information revolution not only accessible, but intuitive and fun.  And by turning his talents to storytelling, he has brought joy to millions of children and grownups alike. Steve was fond of saying that he lived every day like it was his last.  Because he did, he transformed our lives, redefined entire industries, and achieved one of the rarest feats in human history: he changed the way each of us sees the world.

The world has lost a visionary. And there may be no greater tribute to Steve’s success than the fact that much of the world learned of his passing on a device he invented. Michelle and I send our thoughts and prayers to Steve’s wife Laurene, his family, and all those who loved him. (10/05/11)

Too Open for Business

Monday, September 19th, 2011

The Economist — WHY do so many stores in Japan keep their doors open, wasting precious energy by letting air-conditioning spill onto the sidewalk? “It is the culture, for Japanese,” chirps a sales clerk at the Ginza store of Neal’s Yard Remedies, a British chain of organic cosmetics. But the firm is British, I point out; should it not be a matter of British culture as well? “No, no, no,” she rushed to explain: we are in Japan.

“You can see all the shops open their doors—the department store, and next door and next door,” she added helpfully. And she is right: many (though not all) doors are wide open. Rivals like the Body Shop and l’Occitane; brands like Louis Vuitton, Burberry and Hermès; even the country’s classic names like Mitsukoshi.

Normally the practice would be simply wasteful. But these are not normal times. The country is in the midst of a major, nationwide energy crunch. Two-thirds of Japan’s nuclear power plants are offline for safety checks after the disaster that began unfolding at Fukushima after the March 11th earthquake and tsunami. In this context, the Ginza’s open doors are not just wasteful but insensitive and insulting too. They make a mockery of the nationwide ethos for energy savings, called setsuden, that has been praised since that terrible day in March.

The Japanese public has done an impressive job of scaling back its energy consumption. People use less air-conditioning at home, many office buildings leave their toilets’ hand-dryers unplugged, and the entire car industry has shifted its schedule (operating weekends and taking Thursdays and Fridays off). But as the temperatures in August have risen past 35 degrees Celsius (95 Fahrenheit)—and power companies struggle to meet demand—retailers stick to their routine as if it’s business as usual.

At stake is a sense of fairness and shared sacrifice. Ordinary citizens and firms must pause to wonder: why scale back their own comforts and operations only to see the most recognisable brands in the world squandering exactly what everyone else is scrimping to conserve? It seems neither community-minded nor even profitable. Do consumers really buy more when the door is propped open? Shoppers in Japan don’t even need to open the doors themselves: most are automatic. The poshest boutiques with their doors splayed open actually have their own doormen—standing idle, of course. There’s nothing for them to do.

It’s not only luxury brands. In a small neighbourhood in central Tokyo called Azabu Juban, a small bookstore lets rip with the air-con right inside an automatic, sliding-glass door—jammed open. The nearby McDonald’s is ajar too, as is, alas, a small organic health-food store. (There are exceptions. Starbucks’s automatic door stays sensibly closed.)

To their credit, many of the Japanese shop employees who are confronted with the lunacy look ashamed and agree it is wrong. But they can’t change it: it was ordered from above, every one of them says.

Such is the case at the Nissan car showroom in Ginza. Telephoned later, a Nissan spokesperson said this is done for the safety of customers—but also suggests that it was for their comfort, and notes that the carmaker’s competitors also keep their doors open. (09/19/11)


China Taking the Lead Investing in ‘Green Energy’?

Friday, September 16th, 2011

BBC Business — Global investment in renewable energy jumped 32% in 2010 to a record $211bn (£130bn; 149bn euros), according to the Global Trends in Renewable Energy Investment 2011 report. Published jointly by the UN Environment Programme and the Frankfurt School of Finance, it shows that China has become the largest investor in renewable energy projects.

But the country still faces grave cases of pollution despite progress in cutting down on the number of new coal-burning power stations during the last five years. According to Zhang Lijun, vice-minister of environmental protection, coal consumption increased by a billion tons between 2006 and 2010. “And it is likely to see another one-billion-ton rise in the coming five years,” he adds.

Yet the Chinese government is spending tens of billions of dollars every year on so-called clean-tech projects – commonly referred to as green energy. “There is a very clear trend in Asia that people are becoming more and more interested in clean energy and clean-energy investing,” says Vivek Tandon of Aloe Private Equity. “One major reason is the need for energy security, particularly in China, which has an enormous demand for energy,” he says.

At current levels of production, China has coal reserves which should last 40 years, although most reserves are located in the north and north-west – and that poses logistical problems for supplying electricity to the heavily populated coastal areas. Demand for coal is currently outpacing production – a situation made worse by the government’s increasing closure of antiquated and unsafe coal mines.

The public’s perception of the deteriorating ecology and environment around them has been instrumental in the growth of renewable energy. Furthermore, it is also seen as a forum for job creation. “If you create a new industry by bolstering the clean energy sector, you can also create jobs,” says Mr Tandon.

Apart from the Chinese government investing in green technology, money is also coming from outside the country. Some investors are getting a bit nervous about where the global economy is going and whether or not recovery can be sustained. There is the danger therefore, that investment into green technology in Asia might not remain at current levels if the recovery is derailed. (09/16/11)


Poverty in America: Four Lost Decades

Thursday, September 15th, 2011

The New Yorker — John Cassidy writes: The latest poverty and income figures came out this week, and boy are they disturbing. (Amy Davidson responded on Tuesday.) It’s not so much the headline figures, which have been well covered in the Times and elsewhere: 46 million Americans living under the poverty line in 2010, the highest number since the Commerce Department started collecting the figures back in 1959. That’s a horrible statistic. But it’s not too surprising since we’ve been through the deepest recession since the nineteen-thirties, and getting thrown out of work is a primary cause of poverty. (Plus, the population grows every year. If the proportion of people in poverty stays the same, you’d expect the absolute numbers to grow over time.)

It’s not even the fact that median household income—the income of the American household in the middle of the income distribution—is now back to the level it was at in 1996: about $49,500 in inflation-adjusted dollars. To be sure, that is a very alarming fact. But I think most people have already cottoned on to the idea that we have been through a “lost decade.” To get the picture, you just have to look at the stock market or your last paycheck.

Also, the figures for household income need to be treated with a bit of caution, since they aren’t adjusted for changing family sizes. As time goes on, more people are getting married later or not getting married at all. This means there are more single-income households, which obviously earn less than two-income households. This biases the figures somewhat. (The story of where the poverty line came from and how it’s derived is actually pretty interesting. If you want to read more about it, I wrote an entire magazine piece about the subject back in 2006.) Still, even making the necessary adjustments, it’s pretty clear that the typical American family has made little or no progress since the late nineteen-nineties.

But let’s look at the figures for individuals, which aren’t subject to any such distortions, and to eliminate the effects of the economic cycle let’s go back further than the late nineties. (When economic historians come to look at the period from 2000 to 2011, I suspect they will view it as one elongated period of recessions and subpar growth—the end of the great asset price boom.)

To me, what is really, really alarming is this: a typical American male who works full time and still has a job is earning almost exactly the same now as his counterpart was back in 1972, when Richard Nixon was in the White House, O. J. Simpson rushed a thousand yards for the Buffalo Bills, and Don McLean topped the charts with “American Pie.”

The figures, which appear in Table A-5 at the back of the Census Bureau’s report (pdf), are these. Median earnings for full-time, year-round male workers: 2010—$47,715; 1972—$47,550. That not a typo. In thirty-eight years, the annual earnings of the typical male worker, adjusted to 2010 dollars, have risen by $165, or $3.17 a week. (09/15/11)


HIPPO Reveals Little Ice, Lot’s of Methane

Thursday, September 15th, 2011

Science News — A major pollution-mapping program that ends September 9 has turned up startling trends in climate-warming gases and soot. The data it collected over the past five years from a National Science Foundation aircraft show the tropics periodically belch huge plumes of nitrous oxide — a potent greenhouse gas — into the upper atmosphere. Arctic measurements show that the recent record summer retreats of ice cover have allowed seas there to exhale unexpected amounts of methane, another potent greenhouse gas.

Then there’s soot. Parts of the supposedly pristine Arctic skies host dense clouds of these black carbon particles. During some flights, “We were immersed in essentially clouds of black carbon that were dense enough that you could barely see the ground,” recalls Stephen Wofsy of Harvard University, a principal investigator in the program. “It was like landing in Los Angeles — except that you were 8 kilometers above the surface of the Arctic Ocean.”

Until a few years ago, scientists interested in mapping global emissions of climate-altering pollutants had to rely on Earth-based sensors or satellites’ eyes on the skies. Neither could identify at what altitude the pollutants tended to congregate. They also missed many highly localized or seasonal plumes of natural pollutants.

That all changed when a federal-university research partnership got access to NSF’s research plane: HIAPER (for High Performance Instrumented Airborne Platform for Environmental Research). Throughout a number of periodic runs, this aircraft repeatedly swooped up and down — from 150 meters above Earth’s surface to heights sometimes exceeding 13.7 kilometers (45,000 feet). All along the way, its instruments measured more than 50 greenhouse gases and black carbon.

The unparalleled altitude- and latitude- specific data collected as part of this program — named HIPPO (for HIAPER Pole-to-Pole Observations) — will soon be made available to researchers generally, notes Wofsy. He expects scientists will mine its data for many years, looking for additional climate trends.

A primary goal of HIPPO was to investigate how well airborne pollutant concentrations match what computer models had predicted should exist. In some cases, as for soot, HIPPO data pointed to serious problems — oversimplifications — in those models. In other instances, such as for oxygen movement in and out of oceans, the new data generally validated computer predictions.

Currently, land plants and the oceans absorb roughly half of all carbon dioxide emitted, notes Britton Stephens, a scientist with the National Center on Atmospheric Research in Boulder, Colo. But details on which parts of which ecosystems do it, under what circumstances and how efficiently remains somewhat of an open book. Simply put: “We don’t understand their behavior at the current time well enough to predict their behavior into the future,” he says.

So airborne observations have been repeatedly compared to what computer models predict. And one example of where the models need fine tuning involves carbon dioxide, HIPPO indicates.

It revealed “large plumes of carbon dioxide over the Arctic,” Stephens reported Sept. 7 at a news briefing. These plumes didn’t come from the Arctic, he says, but bled into Arctic skies from industrial centers throughout the Northern Hemisphere.

“This was a bit of a surprise,” he says, because models had suggested that much of the carbon dioxide should have been sucked up by plants and seas close to where the gas was being emitted. (09/15/11)



Sunday, September 4th, 2011

Paul KrugmanWhat we need! New York Times — Opinion: Nobel Prize Winning Economist Paul Krugman writes: Friday brought two numbers that should have everyone in Washington saying, “My God, what have we done?”

One of these numbers was zero — the number of jobs created in August. The other was two — the interest rate on 10-year U.S. bonds, almost as low as this rate has ever gone. Taken together, these numbers almost scream that the inside-the-Beltway crowd has been worrying about the wrong things, and inflicting grievous harm as a result.

Ever since the acute phase of the financial crisis ended, policy discussion in Washington has been dominated not by unemployment, but by the alleged dangers posed by budget deficits. Pundits and media organizations insisted that the biggest risk facing America was the threat that investors would pull the plug on U.S. debt. For example, in May 2009 The Wall Street Journal declared that the “bond vigilantes” were “returning with a vengeance,” telling readers that the Obama administration’s “epic spending spree” would send interest rates soaring.

The interest rate when that editorial was published was 3.7 percent. As of Friday, as I’ve already mentioned, it was only 2 percent.

I don’t mean to dismiss concerns about the long-run U.S. budget picture. If you look at fiscal prospects over, say, the next 20 years, they are indeed deeply worrying, largely because of rising health-care costs. But the experience of the past two years has overwhelmingly confirmed what some of us tried to argue from the beginning: The deficits we’re running right now — deficits we should be running, because deficit spending helps support a depressed economy — are no threat at all.

And by obsessing over a nonexistent threat, Washington has been making the real problem — mass unemployment, which is eating away at the foundations of our nation — much worse.  …

I find it useful to think in terms of three questions: What should we be doing to create jobs? What will Republicans in Congress agree to? And given that political reality, what should the president propose?

The answer to the first question is that we should have a lot of job-creating spending on the part of the federal government, largely in the form of much-needed spending to repair and upgrade the nation’s infrastructure. Oh, and we need more aid to state and local governments, so that they can stop laying off schoolteachers. (o9/04/11)


Is China Still Leading Rare Earth Production?

Monday, August 29th, 2011

BBC Business — Rare earth will do for China what oil did for Saudi Arabia. Deng Xiaoping, the former leader of China made this remark two decades ago, but the real extent of its implication is starting to become clear only now.

Rare earths, a group of 17 elements, have become the natural resource of choice in modern-day manufacturing. We may not realise it but they are becoming an increasingly important part of our day-to-day life. Take for example europium, which creates the red colour in televisions. Lanthanum is a key component of hybrid car engines. Other members of the group can be found in DVDs, mobile phones, flatscreen TVs and many other devices that we use daily.

China is currently the biggest producer of these elements, with more than 95% share of the global market. However, it has been playing hardball by tightening its policies in the sector and implementing strict export quotas. Given China’s stand on the issue, one can’t help but wonder if it is missing out on a big opportunity.

Rare earths have been hogging the limelight recently. The reason is simple – demand for these materials has increased tremendously in the past few years and is expected to surge even further in the years ahead. Technological innovation has hit a peak in recent times and the world is producing and consuming high-tech devices more than ever before. The unique magnetic and optical properties of these materials make them a crucial part of almost all modern-day equipment.

Over the past decade the demand for rare earth metals has seen a three-fold increase to 125,000 metric tons a year. According to analysts, the figure could cross 200,000 tons by 2014. With China producing the bulk of global supplies, the majority of this is likely to be supplied by the miners there. However, Beijing has imposed a production cap of 93,800 metric tonnes for 2011 and said it will cut exports of the materials by 10% this year. That means the world is heading for a demand-supply imbalance.

China’s decision to impose these restrictions has seen it being accused of trying to manipulate the prices and help its miners. The spike of as much as 600% in prices of some of these materials recently has only added fuel to the fire. (08/29/11)


Is Capitalism Doomed?

Monday, August 22nd, 2011

Nouriel RoubiniBusinessWorld — Nouriel Roubini writes: The massive volatility and sharp equity-price correction now hitting global financial markets signal that most advanced economies are on the brink of a double-dip recession. A financial and economic crisis caused by too much private-sector debt and leverage led to a massive re-leveraging of the public sector in order to prevent Great Depression 2.0. But the subsequent recovery has been anemic and subpar in most advanced economies given painful deleveraging.

Now a combination of high oil and commodity prices, turmoil in the Middle East, Japan’s earthquake and tsunami, euro zone debt crises, and America’s fiscal problems (and now its rating downgrade) have led to a massive increase in risk aversion. Economically, the United States, the euro zone, the United Kingdom, and Japan are all idling. Even fast-growing emerging markets (China, emerging Asia, and Latin America), and export-oriented economies that rely on these markets (Germany and resource-rich Australia), are experiencing sharp slowdowns. …

Recent popular demonstrations, from the Middle East to Israel to the UK, and rising popular anger in China — and soon enough in other advanced economies and emerging markets — are all driven by the same issues and tensions: growing inequality, poverty, unemployment, and hopelessness. Even the world’s middle classes are feeling the squeeze of falling incomes and opportunities.

To enable market-oriented economies to operate as they should and can, we need to return to the right balance between markets and provision of public goods. That means moving away from both the Anglo-Saxon model of laissez-faire and voodoo economics and the continental European model of deficit-driven welfare states. Both are broken.

The right balance today requires creating jobs partly through additional fiscal stimulus aimed at productive infrastructure investment. It also requires more progressive taxation; more short-term fiscal stimulus with medium- and long-term fiscal discipline; lender-of-last-resort support by monetary authorities to prevent ruinous runs on banks; reduction of the debt burden for insolvent households and other distressed economic agents; and stricter supervision and regulation of a financial system run amok; breaking up too-big-to-fail banks and oligopolistic trusts.

Over time, advanced economies will need to invest in human capital, skills and social safety nets to increase productivity and enable workers to compete, be flexible and thrive in a globalized economy. The alternative is — like in the 1930s — unending stagnation, depression, currency and trade wars, capital controls, financial crisis, sovereign insolvencies, and massive social and political instability. (08/22/11)


The One World Company

Monday, August 22nd, 2011

truthout— Ellen Brown writes: Daniel Estulin, noted expert on the Bilderbergers, describes that secretive globalist group as “a medium of bringing together financial institutions which are the world’s most powerful and most predatory financial interests.” Writing in June 2011, he said:

Bilderberg isn’t a secret society….  It’s a meeting of people who represent a certain ideology….  Not OWG [One World Government] or NWO [New World Order] as too many people mistakenly believe. Rather, the ideology is of a ONE WORLD COMPANY LIMITED.

It seems the Bilderbergers are less interested in governing the world than in owning the world. The “world company” was a term first used at a Bilderberger meeting in Canada in 1968 by George Ball, US undersecretary of state for economic affairs and a managing director of banking giants Lehman Brothers and Kuhn Loeb. The world company was to be a new form of colonialism, in which global assets would be acquired by economic rather than military coercion. The company would extend across national boundaries, aggressively engaging in mergers and acquisitions until the assets of the world were subsumed under one privately owned corporation, with nation-states subservient to a private international central banking system. Estulin continues:

The idea behind each and every Bilderberg meeting is to create what they themselves call THE ARISTOCRACY OF PURPOSE between European and North American elites on the best way to manage the planet. In other words, the creation of a global network of giant cartels, more powerful than any nation on Earth, destined to control the necessities of life of the rest of humanity.

… This explains what George Ball … said back in 1968, at a Bilderberg meeting in Canada: “Where does one find a legitimate base for the power of corporate management to make decisions that can profoundly affect the economic life of nations to whose governments they have only limited responsibility?”

That base of power was found in the private, global banking system. Estulin goes on:

The problem with today’s system is that the world is run by monetary systems, not by national credit systems….  [Y]ou don’t want a monetary system to run the world. You want sovereign nation-states to have their own credit systems, which is the system of their currency….  [T]he possibility of productive, non-inflationary credit creation by the state, which is firmly stated in the US Constitution, was excluded by Maastricht [the Treaty of the European Union] as a method of determining economic and financial policy.

The world company acquires assets by preventing governments from issuing their own currencies and credit. Money is created instead by banks as loans at interest. The debts inexorably grow, since more money is always owed back than was created in the original loans. (For more on this, see here.) If currencies are not allowed to expand to meet increased costs and growth, the inevitable result is a wave of bankruptcies, foreclosures and sales of assets at fire sale prices. Sales to whom? To the “world company.” (08-22-11)


On the Move to Cooler Climates?

Sunday, August 21st, 2011

BBC Animal Science — Animals and plants are shifting their natural home ranges towards the cooler poles three times faster than scientists previously thought. In the largest study of its kind to date, researchers looked at the effects of temperature on over 2,000 species. They report in the journal Science that species experiencing the greatest warming have moved furthest.

The results helped to “cement” the link between climate change and shifts in species’ global ranges, said the team. Scientists have consistently told us that as the climate warms we should expect animals to head polewards in search of cooler temperatures.

Animals like the British comma butterfly, for example, has moved 220km northward from central England to southern Scotland in the last two decades.

There is also evidence that more species seem to be moving up mountains than down, explained conservation biologist Chris Thomas from the University of York, UK, who led the study. But studies had stopped short of showing that rising temperatures are responsible for these shifts in range, he added. Now he and his team have made this link.

Analysing the range shifts of more than 2,000 species – ranging from butterflies to birds, algae to mammals – across Europe, North and South America and Malaysia over the last four decades, they show that organisms that experience the greatest change in temperatures move the fastest. The team found that on average organisms are shifting their home ranges at a rate of 17km per decade away from the equator; three times the speed previously thought.

Organisms also moved uphill by about 1m a year. “Seeing that species are able to keep up with the warming is a very positive finding,” said biologist Terry Root from Stanford University in California, US. She added that it seemed that species were able to seek out cooler habitats as long as there was not an obstacle in their way, like a highway.

But what about the animals that already live at the poles, or at the top of mountains? “They die,” said Dr Thomas. Take the polar bear, it does most of its hunting off the ice, and that ice is melting – this July was the lowest ever recorded Arctic ice cover – it has nowhere to go.

However, the loss of this one bear species, although eminently emblematic, seems insignificant when compared to the number of species that are threatened at the top of tropical mountains. (08/21/11)