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>A shattering moment in America’s fall from power

2008/09/30 1 comment

>The global financial crisis will see the US falter in the same way the Soviet Union did when the Berlin Wall came down. The era of American dominance is over

by John Gray

The Observer (September 28 2008)

Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.

You can see it in the way America’s dominion has slipped away in its own backyard, with Venezuelan President Hugo Chavez taunting and ridiculing the superpower with impunity. Yet the setback of America’s standing at the global level is even more striking. With the nationalisation of crucial parts of the financial system, the American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated. In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed.

Ever since the end of the Cold War, successive American administrations have lectured other countries on the necessity of sound finance. Indonesia, Thailand, Argentina and several African states endured severe cuts in spending and deep recessions as the price of aid from the International Monetary Fund, which enforced the American orthodoxy. China in particular was hectored relentlessly on the weakness of its banking system. But China’s success has been based on its consistent contempt for Western advice and it is not Chinese banks that are currently going bust. How symbolic yesterday that Chinese astronauts take a spacewalk while the US Treasury Secretary is on his knees.

Despite incessantly urging other countries to adopt its way of doing business, America has always had one economic policy for itself and another for the rest of the world. Throughout the years in which the US was punishing countries that departed from fiscal prudence, it was borrowing on a colossal scale to finance tax cuts and fund its over-stretched military commitments. Now, with federal finances critically dependent on continuing large inflows of foreign capital, it will be the countries that spurned the American model of capitalism that will shape America’s economic future.

Which version of the bail out of American financial institutions cobbled up by Treasury Secretary Hank Paulson and Federal Reserve chairman Ben Bernanke is finally adopted is less important than what the bail out means for America’s position in the world. The populist rant about greedy banks that is being loudly ventilated in Congress is a distraction from the true causes of the crisis. The dire condition of America’s financial markets is the result of American banks operating in a free-for-all environment that these same American legislators created. It is America’s political class that, by embracing the dangerously simplistic ideology of deregulation, has responsibility for the present mess.

In present circumstances, an unprecedented expansion of government is the only means of averting a market catastrophe. The consequence, however, will be that America will be even more starkly dependent on the world’s new rising powers. The federal government is racking up even larger borrowings, which its creditors may rightly fear will never be repaid. It may well be tempted to inflate these debts away in a surge of inflation that would leave foreign investors with hefty losses. In these circumstances, will the governments of countries that buy large quantities of American bonds, China, the Gulf States and Russia, for example, be ready to continue supporting the dollar’s role as the world’s reserve currency? Or will these countries see this as an opportunity to tilt the balance of economic power further in their favour? Either way, the control of events is no longer in American hands.

The fate of empires is very often sealed by the interaction of war and debt. That was true of the British Empire, whose finances deteriorated from the First World War onwards, and of the Soviet Union. Defeat in Afghanistan and the economic burden of trying to respond to Reagan’s technically flawed but politically extremely effective Star Wars programme were vital factors in triggering the Soviet collapse. Despite its insistent exceptionalism, America is no different. The Iraq War and the credit bubble have fatally undermined America’s economic primacy. The US will continue to be the world’s largest economy for a while longer, but it will be the new rising powers that, once the crisis is over, buy up what remains intact in the wreckage of America’s financial system.

There has been a good deal of talk in recent weeks about imminent economic armageddon. In fact, this is far from being the end of capitalism. The frantic scrambling that is going on in Washington marks the passing of only one type of capitalism – the peculiar and highly unstable variety that has existed in America over the last twenty years. This experiment in financial laissez-faire has imploded. While the impact of the collapse will be felt everywhere, the market economies that resisted American-style deregulation will best weather the storm. Britain, which has turned itself into a gigantic hedge fund, but of a kind that lacks the ability to profit from a downturn, is likely to be especially badly hit.

The irony of the post-Cold War period is that the fall of communism was followed by the rise of another utopian ideology. In American and Britain, and to a lesser extent other Western countries, a type of market fundamentalism became the guiding philosophy. The collapse of American power that is underway is the predictable upshot. Like the Soviet collapse, it will have large geopolitical repercussions. An enfeebled economy cannot support America’s over-extended military commitments for much longer. Retrenchment is inevitable and it is unlikely to be gradual or well planned.

Meltdowns on the scale we are seeing are not slow-motion events. They are swift and chaotic, with rapidly spreading side-effects. Consider Iraq. The success of the surge, which has been achieved by bribing the Sunnis, while acquiescing in ongoing ethnic cleansing, has produced a condition of relative peace in parts of the country. How long will this last, given that America’s current level of expenditure on the war can no longer be sustained?

An American retreat from Iraq will leave Iran the regional victor. How will Saudi Arabia respond? Will military action to forestall Iran acquiring nuclear weapons be less or more likely? China’s rulers have so far been silent during the unfolding crisis. Will America’s weakness embolden them to assert China’s power or will China continue its cautious policy of ‘peaceful rise’? At present, none of these questions can be answered with any confidence. What is evident is that power is leaking from the US at an accelerating rate. Georgia showed Russia redrawing the geopolitical map, with America an impotent spectator.

Outside the US, most people have long accepted that the development of new economies that goes with globalisation will undermine America’s central position in the world. They imagined that this would be a change in America’s comparative standing, taking place incrementally over several decades or generations. Today, that looks an increasingly unrealistic assumption.

Having created the conditions that produced history’s biggest bubble, America’s political leaders appear unable to grasp the magnitude of the dangers the country now faces. Mired in their rancorous culture wars and squabbling among themselves, they seem oblivious to the fact that American global leadership is fast ebbing away. A new world is coming into being almost unnoticed, where America is only one of several great powers, facing an uncertain future it can no longer shape.

_____

John Gray is the author of Black Mass: Apocalyptic Religion and the Death of Utopia (Allen Lane, 2007)

http://www.guardian.co.uk/commentisfree/2008/sep/28/usforeignpolicy.useconomicgrowth/

Bill Totten http://www.ashisuto.co.jp/english/index.html

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>The Patron Saint of Charlatans

2008/09/29 1 comment

>How does Christopher Booker get away with it?

by George Monbiot

Published in the Guardian (September 23 2008)

Does Moore’s Law now apply to human civilisation? In 1965 Gordon Moore predicted that the density of transistors on integrated circuits doubles every two years or so. Similar laws now seem to apply to every aspect of computing. And, perhaps, to rest of the world. The information available, the scale of human interactions, the detail involved in financial deals, trading relationships and political decisions appear to be growing exponentially. We are drowning in complexity. To be good citizens we must understand what is done in our name. But how?

We lean ever more heavily on experts. But who can we now trust? Corporate PR campaigns have become so sophisticated that it’s almost impossible for most people to tell the difference between genuine science and greenwash, or real grassroots campaigns and the astroturf lobbies concocted by consultants {1}. Public relations companies set up institutes with impressive names, which publish what purport to be scientific papers, sometimes in the font and format of genuine journals {2}. They accuse real scientists of every charge that could be levelled at themselves: junk science, hidden funding, undisclosed interests and inflated credentials.

If journalists have any remaining function, it is to help people navigate this world: to try to understand the crushingly dull documents that most people don’t have time for, to smoke out the fakes and show how to recognise the genuine article. But we mess up too. The most we can promise is to try not to make the same mistake twice.

So what can you say about a man who makes the same mistake 38 times? Who, when confronted by a mountain of evidence demonstrating that his informant is a charlatan convicted under the Trade Descriptions Act, continues to repeat his claims? Who elevates the untested claims of bloggers above peer-reviewed papers? Who sticks to his path through a blizzard of facts? What should we deduce about the Sunday Telegraph’s columnist Christopher Booker?

This week Richard Wilson’s book Don’t Get Fooled Again is published {3}. It contains a fascinating chapter on Booker’s claims about white asbestos. Since 2002, he has published 38 articles on this topic, and every one of them is wrong.

He champions the work of a man named John Bridle, who has described himself as “the worlds foremost authority on asbestos science” {4}. Bridle has claimed to possess an honorary professorship from the Russian Academy of Sciences, to be a consultant to an institute at the University of Glamorgan, the chief asbestos consultant for an asbestos centre in Lisbon, and a consultant to Vale of Glamorgan trading standards department {5}. None of these claims is true. Neither the institute at the University of Glamorgan nor the centre in Lisbon have ever existed {6}. His only relationship with the Glamorgan trading standards department is to have been successfully prosecuted by it for claiming a qualification he does not possess {7, 8}.

None of this deters Mr Booker. Armed with Bridle’s claim’s, for the past six years he has waged a campaign against asbestos science. White asbestos cement, he maintains “poses no measurable risk to health” {9}. He contends that “not a single case” of mesothelioma – the cancer caused by exposure to asbestos – “has ever been scientifically linked with asbestos cement” {10}. A paper commissioned by the UK’s Health and Safety Executive, he says, “concluded that the risk from white asbestos is “virtually zero” {11}.

Booker tells me he has read this paper. Oh yes? The term he quotes – “virtually zero” – does not appear in it {12}. It does show that white asbestos (chrysotile) is less dangerous than brown or blue asbestos. But, while there is uncertainty about the numbers, it still presents a risk of mesothelioma, which depends on the level of exposure. People exposed to a high dose (between 10 and 100 fibres per millilitre per year) have a risk (around two deaths per 100,000 for each fibre per millilitre per year) of contracting this cancer. Only when the dose falls to 0.1 fibres per millilitre per year does it become “probably insignificant” {13}. But Booker’s columns contain no such caveat. He creates the impression that white asbestos is safe at all doses. The paper he misquotes also cites five scientific studies of exposure to asbestos cement, which record “high levels of mesothelioma mortality” {14, 15, 16, 17, 18}.

Two years ago, John Bridle’s misleading CV and dodgy record were exposed by the BBC’s You and Yours programme {19}. So the BBC immediately became part of the conspiracy: in Booker’s words “a concerted move by the powerful ‘anti-asbestos lobby’ to silence Bridle” {20}. He suggested that the broadcasting regulator Ofcom would clear John Bridle’s name {21}. In June this year it threw out Bridle’s complaint and published evidence even more damning than that contained in the programme {22}. So has Booker changed the way he sees “Britain’s leading practical asbestos expert”? Far from it. He tells me that “my view of Ofcom has plummeted” {23}: it too has joined the conspiracy.

We are not talking about trivia here. This is a matter of life and death. How many people might have been exposed to dangerous levels of asbestos dust as a result of reading and believing Mr Brooker’s columns?

For several years Booker has been waging a similar war against “warmist alarmists”, by which he means climate scientists. Nine days ago, for example, he attacked Michael Mann for publishing a paper which shows (alongside scores of other studies) that global temperatures do indeed follow the famous hockey-stick pattern: a moderate long-term cooling trend terminating in a sudden upwards bend. Mann, Booker told his readers, had been “selective … in his new data, excluding anything which confirmed the Mediaeval Warming” {24}. But Mann’s paper, published in the Proceedings of the National Academy of Sciences, uses every uncluttered high-resolution proxy temperature record in the public domain {25}. How did Booker trip up so badly? By using the claims of unqualified bloggers to refute peer-reviewed studies.

Under their guidance he routinely mistakes weather for climate and makes claims about the temperature record which bear no relation to the studies he cites. My favourite Booker column is the piece he wrote in February, titled “So it appears that Arctic ice isn’t vanishing after all”. In September 2007, he reported, “sea ice cover had shrunk to the lowest level ever recorded. But for some reason the warmists are less keen on the latest satellite findings, reported by the US National Oceanic and Atmospheric Administration … Its graph of northern hemisphere sea ice area, which shows the ice shrinking from 13,000 million square kilometers to just four million from the start of 2007 to October, also shows it now almost back to thirteen million square kilometers” {26}. To reinforce this point, he helpfully republished the graph, showing that the ice had indeed expanded between September and January. The Sunday Telegraph continues to employ a man who cannot tell the difference between summer and winter.

But for the Wikipedia Professor of Gibberish, this patron saint of charlatans, even the seasons are negotiable. Booker remains right, whatever the evidence says. It is hard to think of any journalist – Melanie Phillips included – who has spread more misinformation. The world becomes even harder to navigate. You cannot trust the people who tell you whom to trust.

www.monbiot.com

References:

1. See Chapter 2 (The Denial Industry) of my book Heat: how to stop the planet burning. 2007. Penguin, London.

2. See for example Arthur B Robinson, Sallie L Baliunas, Willie Soon, and Zachary W Robinson, 1998. Environmental Effects of Increased Atmospheric Carbon Dioxide. Oregon Institute of Science and Medicine and the George C Marshall Institute. http://www.oism.org/pproject/s33p36.htm. This paper was printed in the font and format of the Proceedings of the National Academy of Sciences.

3. Richard Wilson, 2008. Don’t Get Fooled Again: a sceptics guide to life. Icon Books, Cambridge.

4. Ofcom, June 2008. Broadcast Bulletin No 111. Complaint by Professor John Bridle brought on his behalf by Fisher Scoggins LLP. http://www.ofcom.org.uk/tv/obb/prog_cb/obb111/issue111.pdf

5. You and Yours, BBC Radio 4, 18th October 2006.

6. ibid.

7. ibid.

8. I wrote to John Bridle twice seeking to put questions to him, but though – according to Christopher Booker – he is aware of my emails, he has not replied.

9. Christopher Booker, 25th May 2008. Farmers face GBP 6 billion bill for asbestos clean-up. Sunday Telegraph.

10. Christopher Booker, 31st January 2004. The BBC helps to sex up the asbestos threat. Sunday Telegraph.

11. Christopher Booker, 12th January 2002. Billions to be spent on nonexistent risk. Sunday Telegraph.

12. John T Hodgson and Andrew Darnton, 2000. The Quantitative Risks of Mesothelioma and Lung Cancer in Relation to Asbestos Exposure. Annals of Occupational Hygiene, Vol 44, No 8, pages 565–601.

13. ibid, Table 11.

14. M Albin, K Jacobson, R Attawell, L Johannson, and H Wellinder, 1990. Mortality and cancer morbidity in cohorts of asbestos cement workers and referents. British Journal of Industrial Medicine. Vol 47, 602–610.

15. M. Albin, L Johansson, F D Pooley, K Jakobsson, R Attawell, and R Mitha, 1990. Mineral fibres, fibrosis and asbestos products in the lungs from deceased asbestos cement workers. British Journal of Industrial Medicine. Vol 47, 747–774.

16. M M Finkelstein, 1984. Mortality among employees of an Ontario asbestos-cement factory. American Review of Respiratory Disease. Vol 129, 750–761.

17. M M Finkelstein and J J Vingilis, 1984. Radiographic abnormalities among asbestos cement workers: and exposure response study. American Review of Respiratory Disease. Vol 129, 17–22.

18. M M Finkelstein, 1989. Mortality among employees of an Ontario factory manufacturing insulation materials from amosite asbestos. American Journal of Industrial Medicine. Vol 15, 477–481.

19. You and Yours, ibid.

20. Christopher Booker, 14th October 2006. The BBC falls for the asbestos scam. Sunday Telegraph.

21. Christopher Booker and Richard North, 2007. Scared to Death. From BSE to global warming: why scares are costing us the earth. Page 319. Continuum, London.

22. Ofcom, ibid.

23. Christopher Booker, 22nd September 2008. By telephone.

24. Christopher Booker, 14th September 2008. Climate change chicanery. Sunday Telegraph.

25. Michael E Mann et al, 9th September 2008. Proxy-based reconstructions of hemispheric and global surface temperature variations over the past two millennia. PNAS. Vol 105, No 36, pages 13252–13257. doi: 10.1073/pnas.0805721105.

26. Christopher Booker, 4th February 2008. So it appears that Arctic ice isn’t vanishing after all. Sunday Telegraph.

Copyright (c) 2006 Monbiot.com

http://www.monbiot.com/archives/2008/09/23/the-patron-saint-of-charlatans/

Bill Totten http://www.ashisuto.co.jp/english/index.html

Categories: Uncategorized

>Reply to Tom Blees

2008/09/28 1 comment

>by Bill Totten (September 28 2008)

I received the following comment today from Tom Blees on my “Comment to Mark Lynas on Nuclear Energy” posted here on September 26 2008:

“Bill,

“Having seriously practiced Zen meditation for years, I can appreciate austerity, even asceticism. But expecting the public at large to embrace attitudes even remotely resembling that would be a herculean struggle that can only succeed if people are forced into what you andmany others see as sensible behavior.

“So what happens if we build the infrastructure to provide all the energy that everyone wants? If that can be done economically, and if that energy can be provided without mining anything at all for several hundred years, and if that energy would be free of GHGs and allow us to eliminate fossil fuels, would that be a bad thing?

“Today many of us get a feeling of virtuousness from recycling, using fossil fuels as little as possible, or driving a Prius and buying twisty lightbulbs. Yet the only reason we have to do these things is because our political leaders have yet to make the necessary decisions that could free us from dependence on behavior modification in order to reduce greenhouse gas emissions.

“The fact is that many people couldn’t care less about green issues, and aren’t about to make any effort in that direction. Yet we have the technologies to make such human behavior immaterial. We can recycle everything, even if people throw old drain oil and car batteries and asbestos in the dumpster along with their poopy diapers. We have the technology to provide unlimited energy for every country in the world without mining or drilling a thing.

“Please check out my book, Prescription for the Planet. It’s not about how you can change your behavior to help reduce your carbon footprint. It’s about international policy decisions that can make dependence on behavior unnecessary and solve some of the world’s most intractable problems. That’s WAY more important than lamenting the attitudes of those who are heedless of their energy use.”

______

Here is my reply to Tom:

Tom:

Thanks for your comments.

I agree that it would be a herculean struggle to persuade the pampered pigs in the world’s richest nations to settle for using as little energy as the vast majority of Earthlings use today and as those even in the richest nations used until a generation or so ago. But, as John Michael Greer points out {1}, perhaps a serious economic depression might provide the necessary persuasion.

Your book, Prescription for the Planet: The Painless Remedy for Our Energy & Environmental Crises (2008) apparently focuses on so-called fourth-generation nuclear technology – better known as fast-breeder reactors {2}. I’d love to believe in fourth-generation nuclear technology, but I am not willing to “bet the farm” on unproven technology and this seems no more proven than the Golden Fleece, Philospher’s Stone, Fountain of Youth, or Perpetual Motion Machine.

And from what I’ve read {3}, current problems even with second-generation nuclear energy are too immense to give much hope for fourth-generation nuclear energy in the foreseeable future.

I’ll be happy to consider fourth-generation nuclear technology or fast-breeder reactors when a few have been built and proven safe and economic for several years. In the meantime, I’ll place my hopes on reducing energy consumption in the very richest nations toward as little as the vast majority of Earthlings use today and as even those in the richest nations used until a generation or so ago. We know this works in the vast majority of the world today and did work in the richest nations until a generation or so ago.

Bill Totten

Notes:

{1} “Rx: Depression” by John Michael Greer The Archdruid Report (September 24 2008), posted here earlier today.

{2} “Why greens must learn to love nuclear power” by Mark Lynas, New Statesman (September 18 2008), posted here on September 26th in “Comment to Mark Lynas on Nuclear Energy”.

{3} “The NRC’s Warning” by Harvey Wasserman, Z Magazine (September 01 2008)
http://www.zcommunications.org/zmag/viewArticle/18705 (See below)

_____

The NRC’s Warning

by Harvey Wasserman

Wasserman’s ZSpace page

Z Magazine (September 01 2008)

A devastating blow to the much-hyped revival of atomic power was delivered by an unlikely source, the Nuclear Regulatory Commission (NRC), which revealed in June that the “standardized” designs on which the entire premise of returning nuclear power to center stage is based have massive holes in them and may not be ready for approval for years to come.

Delivered by one of America’s most notoriously docile agencies, the NRC’s warning essentially says that all cost estimates for new nuclear reactors – and all licensing and construction schedules – are up for grabs and have no reliable basis in fact. Thus, any comparisons between future atomic reactors and renewable technologies are moot at best. And any “hard number” basis for independent financing for future nukes may not be available for years to come, if ever.

These key points were raised in searing testimony before state regulators by Jim Warren of the North Carolina Waste and Awareness Reduction Network (NCWARN) and Tom Clements of the South Carolina Friends of the Earth (FOE) – and by others now challenging proposed state-based financing for new Westinghouse AP-1000 reactors. The NRC gave conditional “certification” to this “standardized” design in 2004, allowing work to continue. But as recently as June 27, the NRC issued written warnings that hundreds of key design components remain without official approval. Indeed, Westinghouse has been forced to actually withdraw numerous key designs, throwing the entire permitting process into chaos.

The catastrophic outcome of similar problems has already become tangible. After two years under construction, the first “new generation” French reactor being built in Finland is already more than two years behind schedule and more than $2.5 billion over budget. The scenario is reminiscent of the economic disaster that hit scores of “first generation” reactors, which came in massively over budget and, in many cases, decades behind promised completion dates.

In North and South Carolina, public interest groups are demanding the revocation of some $230 million in pre-construction costs already approved by state regulators for two proposed Duke Energy reactors. In both those states, as well as in Florida, Alabama, and Georgia, Westinghouse AP-1000 reactors have been presented to regulatory commissions to be financed by ratepayers as they are being built.

This astounding pro-utility scheme forces electric consumers to pay billions of dollars for nuclear plants that may never operate and whose costs are indeterminate. Sometimes called Construction Work in Progress, it lets utilities raise rates to pay for site clearing, project planning, and down payments on large equipment and heavy reactor components, such as pressure vessels, pumps, and generators that can involve hundreds of millions of dollars, even before the projects get final federal approval. The process gives utilities an incentive to drive up construction costs as much as they can. It allows them to force ratepayers to cover legal fees incurred by the utilities to defend themselves against lawsuits by those very ratepayers. And the public is stuck with the bill for whatever is spent, even if the reactor never opens – or if it melts down before it recoups its construction costs, as did Pennsylvania’s Three Mile Island Unit Two in 1979, which self-destructed after just three months of operation.

According to Warren and Clements, Duke Energy and its cohorts have “filed some 6,500 pages of Westinghouse’s technical design documents as the major component of applications” to build new reactors. “Of the 172 interconnected Westinghouse documents”, say NCWARN and FOE, “only 21 have been certified”. Most of what has been certified, they add, relies on systems that are unapproved and that are key to the guts of the reactor, including such major components as the “reactor building, control room, cooling system, engineering designs, plant-wide alarm systems, piping and conduit”.

In other words, despite millions of dollars of high-priced hype, the “new generation” of “standardized design” power plants actually does not exist. The plans for these reactors have not been finalized by the builders themselves or approved by the regulators. There is no operating prototype of a Westinghouse AP-1000 from which to draw actual data about how safely these plants might actually operate, what their environmental impact might be, or what they might cost to build or run.

As the NRC’s June letter to Westinghouse noted, the company has been forced to withdraw key technical documents from the regulatory process. The NRC says this means design approval for the AP-1000 might not come until 2012. The problem extends to other designs. According to Michael Mariotte of the Nuclear Information & Resource Service, the “Evolutionary Power Reactor” proposed for Calvert Cliffs, Maryland “is way behind in certification” causing delays in the licensing process. Similar problems have arisen with the “Economic Simplified Boiling War Reactor” design proposed for North Anna, Virginia and Fermi, Michigan. “All of these utilities seem to want standardization for the other guy not for themselves, so most of them are making changes to the ‘standardized’ designs”, says Mariotte. “Even the ABWR”, being planned for a site in south Texas, which has been built before, “has design issues” that have caused delays.

Nevertheless, public service commissions like the one in Florida have given preliminary approval to reactor proposals whose projected costs have more than doubled in one year. Florida Power & Light’s two proposed reactors at Turkey Point on the border of the Everglades National Park are listed as costing somewhere between $6 billion and $9 billion. FP&L refuses to commit to a firm price and is demanding south Florida ratepayers foot an unknowable bill for gargantuan projects whose costs are virtually certain to skyrocket long before the NRC approves the actual reactor designs. By contrast, the “huge” preliminary deal just reached between Florida, environmentalists, and US Sugar to buy some 180,000 acres of land to save the Everglades is now estimated at less than $2 billion, less than one-sixth the minimum estimated cost of the two reactors proposed for Turkey Point.

In the larger picture, the depth of this scam is staggering. With no finalized design and no firm price tag, a second generation of nuclear power plants is now being put on the tab of citizens whose rates have already begun to skyrocket. These reactor projects cannot get private financing and cannot proceed without either massive federal subsidies and loan guarantees or a flood of state-based giveaways. They also cannot get private insurance against future meltdowns and have no solution for their radioactive waste problem. Current estimates for finishing the proposed Yucca Mountain national waste repository, yet to be licensed, are soaring toward $100 billion, even though it, too, may never open.

By contrast, firm costs for proposed wind farms, solar panels, increased efficiency, and other green sources are proven and reliable. Some $6 billion in new wind farms are under construction or on order in the United States alone. They are established and, in many cases, can be up and running in less than a year.

The high-profile campaign to paint atomic energy as some kind of answer to US energy problems has hit the iceberg of its economic impossibilities. The atomic “renaissance” has no tangible approved design and no firm construction or operating costs to present. There are no reliable new reactor construction schedules, except to know that it will be at least ten years before the first one could conceivably come on line and that its price tag is unknowable. In short, the “nuclear renaissance” is perched atop a gigantic technical and economic chasm that looms larger every day, and that could soon swallow the entire idea of building more reactors.

_____

Harvey Wasserman’s Solartopia! Our Green-Powered Earth is at www. solartopia.org. This article was originally published by freepress.org.

http://www.zcommunications.org/zmag/viewArticle/18705

Bill Totten http://www.ashisuto.co.jp/english/index.html

Categories: Uncategorized

>Rx: Depression

>by John Michael Greer

The Archdruid Report (September 24 2008)

Druid perspectives on nature, culture, and the future of industrial society

By the time you read these words they will have been sitting on my computer for most of a week; the chance to attend the annual ASPO peak oil conference in Sacramento was too good to pass up, and I’ll be on the road during the window of time I normally use to compose these essays. It’s an interesting time to be second guessing the future, too, for as I type these words, the world’s financial markets are in chaos. The collapse of Lehman Brothers, one of the longest established brokerage houses in the New York market, followed by the forced sale of Merrill Lynch and the near-collapse of insurance giant AIG, seem finally to have made it clear to the world’s investors that the mountain of unpayable debt weighing on the global economy is a problem that can no longer be ignored.

Just how bad that problem will become is anybody’s guess. Stock markets worldwide are down steeply but, at least as of this writing, not yet in freefall, and massive government intervention in the credit markets has staved off a liquidity crunch. Over the longer term, though, investments supposedly worth trillions of dollars are going to have to be written off, and companies that padded their balance sheets with those investments are now facing a scramble for survival that many will fail. An entire economy built around the exchange of exotic IOUs is coming apart at the seams, and the economic structures that will replace it are not yet in sight.

A growing number of voices are proclaiming that the current crisis marks the beginning of a major economic downturn; the word “depression”, until recently taboo in polite financial company, is even being heard. Now it’s worth pointing out that we have as yet no way of knowing whether or not things will get that bad. The 1987 “Black Friday” crash, which saw the Dow Jones Industrials lose 22% of their value in a single day of trading, was followed by the same sort of proclamations; so was the unraveling of the tech boom in 2000. Both slumps, severe as they were, led to relatively modest recessions. It’s possible – though admittedly not very likely – that the same thing could happen this time.

Yet it also has to be remembered that not too long ago, economic depressions were simply a fact of life. In the 19th century, before government regulation restrained the excesses of the business cycle, major economic depressions happened every twenty or thirty years on average; most people could expect to live through two or three of them. The New Deal reforms of the 1930s, which restricted the vagaries of the business cycle, made depressions a thing of the past; still, those reforms were tossed aside in the deregulatory frenzy of the 1980s and 1990s, and unless they get put back in place, we will all likely have to get used to depressions again.

Counterintuitive though it may seem, furthermore, a serious depression right now may just be the best thing that could happen to the United States. I don’t say this by way of passing judgment, or in the spirit of schadenfreude that seems to surround so many predictions of social catastrophe. Rather, a good many of the dysfunctions that are dragging America to ruin will be immediately unsustainable in a time of depression, and a certain amount of economic suffering now could spare the American people a far worse experience later on. Here are some examples.

1. The End of American Empire

Right now America is as addicted to empire as any inner-city crackhead to cocaine. We support the world’s most bloated military, with troops and bases in more than a hundred countries, in order to enforce a global economic order that allows the five percent of the world’s people who live in the United States to use roughly a third of the world’s resources. At the same time, empires are costly pets, and ours – like every other empire in history – is becoming an economic burden our nation can no longer support; at the same time, the drastic decrease in US living standards that would follow the end of American empire is a political time bomb nobody wants to touch. Caught in that dilemma, the United States seems determined to follow the usual course of past empires, allowing its imperial commitments to drag it down.

A depression, however, would force the issue. In the midst of economic collapse, the United States would be no more able to maintain a global military presence than Russia was after its own collapse. The troops would have to come home – not just from Iraq and Afghanistan, but from the whole far-flung web of US military bases – and resources now being drained by the incubus of empire would be available for more constructive tasks, such as preparing for the onset of peak oil.

2. Energy Availability

A serious depression would also have predictable effects on energy use. The economic troubles of the 1970s and early 1980s, mild as they were by depression standards, played a noticeable role in causing energy use to drop sharply during those same years; when people don’t have money, they don’t spend it on unnecessary energy, and they are also likely to take conservation measures that cut into energy use even further.

By many estimates, we are only a few years from serious decreases in world petroleum production. Any significant response to this crisis will, ironically enough, require more fossil fuel energy – it takes energy, after all, to manufacture insulation, rebuild railways, and make wind turbines, and most of that energy will have to come from existing sources. If energy prices spiral out of sight, many such projects will be out of reach. A depression, on the other hand, will force down demand, keeping prices from rising and making it possible to build for the post-fossil fuel era. Public works projects such as the Depression-era Civilian Conservation Corps could also be directed toward energy conservation and renewable resources.

3. From Offshoring to Onshoring

Another likely result of a serious depression would be the rebirth of a domestic manufacturing economy in America. Right now the US economy produces very little but debt; that’s the way the tribute economy of America’s global empire works. The results have been profitable not only for the political classes but also for the middle class, which gets to buy all the consumer goods it wants without having to pay what it would cost to hire Americans to make them; the poorer two-thirds of the population, by contrast, has been hammered by predatory economic policies that replace well-paid factory jobs with minimum wage positions flipping hamburgers.

The global economy that made offshoring possible, though, will be an early casualty of a serious depression, and when the US either defaults on its national debt or hyperinflates its currency – and it will have to do one or the other of these, sooner or later, to get out from under the burden of unpayable debt – the unraveling of the global marketplace will be complete. Once that happens, goods and services for the American market will have to be produced here, and the rebuilding of domestic manufacturing capacity will follow. This will make it much easier for America to survive the transition to the age of scarcity industrialism now dawning around us.

4. Decreasing Income Disparities

Meanwhile, the huge disparities in income that separate the upper third of Americans from the rest of the population will unravel. Economic boomtimes are always periods of increasing social inequality, because investment income is concentrated in the upper income levels; depressions are income levelers for the same reason. In the 1920s, income disparity soared to levels that were not reached again until the Reagan years; in the 1930s, as investments of all kinds plunged in value, the gap between the rich and the rest dropped to historic lows. The same thing is true today; essentially all the exotic investments that drove the recent boom were available only to the rich, who thus have earned the privilege of losing their shirts as those investments unwind.

The narrowing of income disparities isn’t simply an issue of class jealousy; it powerfully affects the functioning of the economy. When the working classes have money, they spend it on goods and services, helping to maintain economic well-being. When the rich have money, they are more likely to invest it in speculative instruments that contribute much less. Speculation is a parasite on the economy, and it is quite capable of killing its host; that’s essentially what’s going on right now. An economy with lower income disparities is more stable and productive than one with the drastic disparities we have now, and we need a more stable and productive economy in order to deal with the instabilities that will follow the end of the age of cheap fossil fuels.

5. We’re Headed There Anyway

The most important impact depression could have is also the one that most people will enjoy the least: most of us will have to learn to make do with fewer of the comforts, conveniences, and opportunities that we have all learned to expect. For the last sixty years most Americans have enjoyed lives of relative opulence, even as the resource base and manufacturing economy that made that opulence possible has trickled away. The last few decades have seen desperate attempts to replace these losses with exotic financial instruments and an increasingly strident imperial policy overseas. These measures worked for a while, but now the bill is coming due.

At the same time, the end of America’s age of opulence comes as the world’s ability to supply itself with cheap abundant fossil fuels is becoming steadily more problematic. In a world of scarce energy, the opulence of the recent past will no longer be in reach for anybody. The sooner we begin retooling our lives to deal with that reality, the better off we will all be in the future. A depression would thus bring about changes that are going to happen anyway, and would do it at a time when the world could still devote significant amounts of energy to the transition.

No matter what we do, the way there won’t be easy. Hard times are hard times, and it’s a waste of time trying to sugarcoat that fact. Still, an economic contraction beginning now – before peak oil has a chance to force the issue – could give us a crucial margin of lead time.
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John Michael Greer has been active in the alternative spirituality movement for more than 25 years, and is the author of a dozen books, including The Druidry Handbook (2006) and The Long Descent (2008). He lives in Ashland, Oregon.

http://thearchdruidreport.blogspot.com/2008/09/rx-depression.html

Bill Totten http://www.ashisuto.co.jp/english/index.html

Categories: Uncategorized

>What’s Really Bankrupt

>The Wall Street Model: Unintelligent Design

by Pam Martens

www.counterpunch.org (September 20/21 2008)

Wall Street is collapsing not because of bad mortgage debt or lack of capital or over-leverage. Those are merely symptoms. Wall Street is collapsing because it deserves to collapse; it needs to collapse in order for America to survive. The economist Joseph Schumpeter called it creative destruction, a system where outdated models collapse to make room for new innovation.

Wall Street of the past decade never really had a business model as much as it had a business creed: greed is good; leveraged greed is even better.

The fact that Wall Street is collapsing is a given. How it survived as long as it did under its corrupted model is the question that will be debated in history books for the next generation.

For example, imagine a business model that bases remuneration to brokers on how much money they make for their Wall Street employer and not one dime for how well their customers’ portfolios perform. A Wall Street broker receives remuneration that rises from approximately thirty to fifty per cent of the gross commission based on their cumulative trading commissions with zero regard to how well the clients’ accounts have done. There is no acknowledged internal mechanism in any of the major Wall Street firms to gauge the overall success of the accounts the broker is managing.

The industry has been irreconcilably incentivized to corruption just as brokers have been socialized to silence. The reason we are seeing a stampede this week into US Treasury securities is that much of this money belonged there in the first place, not in esoteric mortgage backed securities, junk bonds, commodity funds or annuities backed by AIG. Brokers put their clients’ “safe money” in these unsuitable investments because their Wall Street employer dangled a seductive financial inducement. A broker receives less than $1,000 in gross commissions (“gross” meaning before their firm takes their fifty to seventy per cent cut) on $100,000 of longer dated Treasuries. Putting that same $100,000 in a junk bond or mortgage-backed security or annuity could generate $3,000 or more. In other words, the financial incentive has created an artificial demand. And, as must inevitably happen, the true state of that demand is just now catching up with the true glut of supply.

What would be the incentive for Wall Street firms to offer higher commissions for some products over others? Because on top of their cut of the brokers’ commissions, they receive origination and syndication fees for the more esoteric investment products. These firms so despised the low-paying Treasuries that they replaced Treasuries with Freddie Mac and Fannie Mae paper in mutual funds bearing the name “US Government Fund”. (This misleading practice and the fact that billions of dollars of public money resided in these misnamed funds has certainly played a role in the government’s decision to nationalize Freddie Mac and Fannie Mae.)

Then there is the insane model of bringing flim-flam new businesses to market. If we look at the people who are at the helm of today’s collapsing Wall Street, they have shifted in their chairs, but they are mostly the same conflicted individuals who brought America the NASDAQ bust that began in March 2000 and evaporated $7 trillion of American wealth. There is no longer any incentive on Wall Street to bring about initial public offerings of only companies that will stand the test of time and create new jobs and new markets to make America strong and globally competitive. There is only an incentive to collect the underwriting fee and cash out quickly on private equity stakes.

Next is the corrupted model of housing a trading desk for the firm inside the same company that is supposed to issue unbiased research to the public. For example, let’s say that XYZ Brokerage buys a big stake in ABC Company on its proprietary trading desk (the desk that trades for profits for the firm) on Wednesday afternoon. On Thursday afternoon, it could almost guarantee profits for itself by issuing a research report upgrading the stock. Conversely, it could short the stock on Wednesday and issue a negative report to drive down the price on Thursday, also guaranteeing itself a profit. Other than a fictional Chinese Wall, there is absolutely nothing to stop this type of public looting.

Now, ask yourself this. With the multitude of other ways that Wall Street has to make money, why are they allowed to have their own trading desk while simultaneously issuing conflicted research to the public? After the NASDAQ scandals that revealed Wall Street issuing biased research for personal profit, why weren’t proprietary trading desks and public research issuance shut down at these firms? There are plenty of boutique research firms to fill the void. The only conclusion to be drawn is what Europe is calling “regulatory capture” here in the US. That’s a phrase similar to what Nancy Pelosi was calling “crony capitalism” on Wednesday, September 17 before she decided to join the crony capitalists at a microphone on Thursday, September 18 to promise bipartisanship on the mother of all bailouts to Wall Street.

This unintelligent design business model would have cracked and imploded long ago but for one saving grace: it came with its own unintelligent design justice system called mandatory arbitration. Gloria Steinem once called mandatory arbitration “McJustice”. It’s really more like Burger King; Wall Street can have it their way. In a system designed by Wall Street’s own attorneys, arbitrators do not have to follow the law, or legal precedent, or write a reasoned decision, or pull arbitrators from a large unbiased pool as is done in jury selection. Industry insiders routinely serve over and over again. Had there been ongoing trials in open, public courtrooms, the magnitude of the leverage, worthless securities, and corrupted business model would have been exposed before it brought America to the financial brink.

That Wall Street and its Washington coterie are still embraced in regulatory capture and unintelligent design is most keenly evidenced by the recent merger of Merrill Lynch, the brokerage/investment firm, with Bank of America, the commercial bank, and ongoing discussions to merge Morgan Stanley, the brokerage/investment firm with a commercial bank. (Memo to Enemy Combatants Against Taxpayers aka Wall Street/Washington: this new model is the failed model of Citigroup. Why do you hate America?)

Make no mistake that whatever the dollar amount announced next week to funnel into an entity to buy bad debts from banks and Wall Street firms, it won’t be enough. It’s a Band-Aid on a malignant tumor. That tumor is Credit Default Swaps (CDS) with over $60 trillion now owed through secret contracts in an unregulated market created, financed and owned by the unintelligent design masters, Wall Street firms themselves. (See “How Wall Street Blew Itself Up”, CounterPunch, January 21 2008.)

There is no sincere plan by this administration to help America or Americans. There is only a plan to slow the financial collapse until after the November elections by throwing a politically palatable amount of money at it and a plan to continue to blame it on a housing bust.

If we, the American people, allow this to happen, we’re enablers to the unintelligent design model. Before one more penny of our taxes are spent on this ruse, we must demand a seat at the table (I think Ralph Nader should occupy that seat) to discuss breaking up Wall Street, crushing this model, innovating a sensible model that serves the individual investor and deserving businesses, and promises our children a future of more than a banana republic.

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Pam Martens worked on Wall Street for 21 years; she has no securities position, long or short, in any company mentioned in this article. She writes on public interest issues from New Hampshire. She can be reached at pamk741@aol.com .

http://www.counterpunch.org/martens09202008.html

Bill Totten http://www.ashisuto.co.jp/english/index.html

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>The Great Crash of 2008

>The world’s financial institutions are gripped by fear, yet policymakers can do nothing. They are ignorant of how banks now work and have to take poacher-turned-gamekeeper Henry Paulson at his word.

by James Buchan

New Statesman (September 25 2008)

Of all the phantoms conjured from the financial depths in the past ten days, the most ghastly appeared on the dark Wednesday, 17 September, when interest on the short-term obligations of the United States government, the one-month Treasury bill, turned negative and became a penalty. Such terror had overtaken the markets that they were willing to suffer a loss on their money in the hope that, in the deep bosom of the US Treasury, some of it would be kept safe.

Yet the terror of that day was not just to do with loss: money lost, job gone, wife fled, house foreclosed, sailboat beached. It was an elemental panic, such as overran the financial markets on 19 October 1987, the day the Dow Jones Industrial Average fell 23 per cent. It was a recognition that the world is not as we have been told and that the conception of value that lies at the root of modern society is, and has always been, a fiction.

In this panic, there is no reality in the sense of actual existence to prices and Lehman Brothers Holdings can be worth $15 billion on Monday and nothing at the weekend. The world is held together only by instances of agreement between two or more people. It is an education that everybody should pass through, and my generation has done so twice, in 1987 and 2008. It is as if the gods of financial markets have been reading Hegel, and learnt that “through repetition, that which at the beginning appeared as merely accidental or possible, is confirmed as a reality”.

Not that governments are thinking much about Hegel. Like generals fighting their grandfathers’ wars, policymakers are haunted by the Depression of the 1930s, where a crash in financial markets was transformed by selfish national policies into a collapse in world trade, and unemployed men walked in droves from Sydney to Melborne, shooting rabbits for food.

Andrew Mellon, the former investment banker who was US treasury secretary at that time, thought to break value down to a sort of puritan or moral core. He is said to have burst out to President Hoover: “Liquidate labour, liquidate stocks, liquidate the farmers, liquidate real estate! It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”

His reincarnation, Henry Paulson (also once a star investment banker), has opted instead for expediency in which pure fear cuts through all moral entanglements. He has won over the administration and some supporters in Congress to his colossal plan to take $700 billion or more of bad loans on to the Federal government’s books. It is the equivalent of the entire US budget for social security. In promoting his plan, Paulson said: “I am convinced that this bold approach will cost American families far less than the alternative – a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion. The financial security of all Americans … depends on our ability to restore our financial institutions to a sound footing.”

Ben Bernanke, chairman of the Federal Res erve, was crisper: “There are no atheists in foxholes and no ideologues in financial crises”.

In effect, the US public will recapitalise the silly bankers at a cost of perhaps $2,000 per American adult and child, maybe much more, maybe much less. In Britain, the authorities are reluctant to wield what Paulson calls the “bazooka”, trying to ensure instead that the banks continue to do business with one another. Banks, under the so-called special liquidity scheme, can shore up their creditworthiness by exchanging their questionable mortgage securities for Treasury bills, securities that carry the faith and credit of the UK, which has never failed.

Already, GBP 100 billion has been drawn and nobody knows how much more will be required for both schemes. In truth, bankers have little clue now what they have (assets) or what they owe (liabilities). AIG, the insurance group that all but bankrupted itself insuring bank loans against default, asked the US authorities at the weekend of 13-14 September for $20 billion, then for $40 billion and finally $85 billion.

What are we to make of a banking business that must be recapitalised by the public every generation? That, like the nuclear power industry, holds a gun to the public head two or three times each lifetime? And in the intervening periods treats the public like poor relations?

In all the commentary on the crisis, certain facts have been thought too elementary for consideration, so I shall consider them. The first is this: the business of banking is not profitable (as you have been told) but miserably unprofitable. It is this unprofitability rather than the idiocy or wickedness of bankers that makes the enterprise so unstable. The arrogance of bankers, their extravagant rewards and public philanthropy, are the abstract counterparts of the massive architraves and pediments of the old bank architecture, such as the Barclays Bank headquarters in Norwich. How could they not be safe as houses?

The fundamental business of taking in money and putting it out again earns a wafer-thin interest margin and will only keep bankers in luxury if it is conducted on a colossal scale. Even the most prudent banks borrow ten times their own capital, while investment banks (who do not take deposits from the public) borrow very much more: Lehman Brothers thirty times, and even the respectable Goldman Sachs 22 times. At that extent of what is known in the US as leverage, a small fall in values wipes out the bank’s capital, leaving its lenders exposed to loss, and their lenders likewise in a daisy chain of failure. Commercial banks are not well-managed institutions and investment banks (with the exception, it is said, of Goldman Sachs) are not managed, in the industrial sense, at all. An unsupervised trader can wipe out a bank’s entire capital, as in 1995 at Baring Brothers, or so terrify management that they reverse his trades at fire-sale prices, as at Société Générale last February.

Even at that level of leverage, profitability is still too low and banks have sought ways to expand their lending through various legal and quasi-legal means. (J K Galbraith used to say that as the speculative waters subside, all manner of crimes are revealed to an astonished public view.)

In a regulatory filing, AIG made no secret that some of its credit insurance instruments were designed to help banks evade restrictions on their lending. Another tactic was to combine packets of loans into interest-bearing securities and sell them on to other investors. This allowed banks to replenish their funds and originate more loans, but at the risk of spreading the default far and wide – which is why bad debts in run-down cities in the Midwest affected investors in London, Frankfurt and Tokyo.

Too many banks

The second point follows from that. The banking system is not undercapitalised for the ordinary purposes of trade, as Paulson would have us believe, but overcapitalised to the point of obesity. A brief walk down the high street of a county town reveals that. It was the genius of the short-sellers, or bears, to recognise that there are far too many banks and bankers for the use of the public – and for this insight, like Cassandra, they are hated and shunned. Paulson wants to maintain the banking industry in its bloated condition for fear that an orderly reduction in banking will turn into a rout. We will then be plunged back into the days of the Hoover administration, when 11,000 banks closed their doors for ever and business simply stopped. Yet Paulson’s attempt to maintain the banking system at the extent or level of 2005 or 2006 may not be successful.

The reason is that the run on the banks which started at Northern Rock in Newcastle in September 2007 has unfolded at a time of rising, not falling, incomes and profits. The last phase of mortgage lending in the US and UK, and also in countries such as Spain and Ireland, was never likely to be repaid even in golden days. In the ordinary rhythm of trade and business, business activity will eventually contract or already is contracting. As industrial companies fall into loss and individuals lose their jobs, debts of a more solid character than 110 per cent loan-to-value mortgages will fall into arrears. Unable to raise capital in the markets, banks will once more need public support, or will fail. The Paulson “bazooka” and the swap arrangements at the Bank of England may expand to the point when they impair the credit of the nation, expressed in its currency’s exchange-rate. And what of poorer or less sophisticated countries who are also unable to borrow? While all eyes have been on London and New York, the Russian stock market has halved. This is the nightmare of the 1930s where the engine of world trade simply peters out.

Yet policymakers are constrained by their ignorance of financial markets, have no ideas of their own, and must take the poacher-turned-gamekeeper Paulson at his word. In Britain, new Labour shed its ancestral scepticism of the City more comprehensively than, say, the reformed German Social Democrats. As the intoxication recedes, Labour must recall in hot flushes its excruciating naivety. Peter Mandelson’s “We are intensely relaxed about people getting filthy rich” is as embarrassing as Gordon Brown’s hero-worship of the US central banker, Alan Greenspan, whose stock has fallen faster than Lehman Brothers common.

Yet if the financial chaos spreads out into the tangible world of job centres and shuttered factories and empty office blocks – a world where men and women, unlike bankers, must live with the consequences of their folly – politicians will demand their pound of flesh. In the US, both presidential candidates Barack Obama and John McCain are mining a popular hatred of the East Coast money men that goes back deep into the 19th century. They will place restrictions on bank lending and securities underwriting just at the point where there is no lending or underwriting of securities. Bowing to the winds of change, both Goldman Sachs and Morgan Stanley have abandoned their privileged position as investment banks and submitted to regulation by the Federal Reserve, right there alongside First Farmers & Merchants of South Succotash with its 600 checking accounts.

William McChesney Martin, the Federal Reserve chairman in the 1950s and 1960s, used to say that the job of the central banker is “to take away the punch bowl just as the party gets going”. Greenspan, who at two decades at the Federal Reserve accommodated the banks in all they required, conspicuously failed to do so. In these circumstances, there will be a call for returning central banks to political control. Margaret Thatcher always opposed independence of the Bank of England, because it seemed to her an admission of political failure. She also doubted – and even her enemies would not disagree – “whether we had people of the right calibre to run such an institution”. These central banks, once returned to political control, will find it hard to resist a little inflation to lighten the burden of public and private debt.

The melancholy aspect of the crisis lies not in the humbling of proud men such as Dick Fuld of Lehman Brothers or Greenspan himself, but in our ignorance. An entire epoch of finance passes in which we lived, but did not understand. Truly, as Hegel said, philosophy comes too late to teach the world how it should be, and Minerva’s owl begins her flight into gathering darkness.

James Buchan is the author of Frozen Desire: an Inquiry into the Meaning of Money (1997)

http://www.newstatesman.com/business/2008/09/banks-financial-paulson-public

Bill Totten http://www.ashisuto.co.jp/english/index.html

Categories: Uncategorized

>Comment to Mark Lynas on Nuclear Energy

2008/09/26 5 comments

>September 26 2008

Dear Mark:

I read with surprise and dismay your “Why greens must learn to love nuclear power” in last week’s New Statesman {see below}. Your unstated premise seems to be that those of us in the very richest nations must find ways to continue using as much energy as we’ve grown addicted to using during the past few decades, which is many times greater than the vast majority of people living in the poorer nations use now and also many times greater than people in the very richest nations used until a generation or so ago.

Based on that premise you claim we “must learn to love nuclear power”.

If you are truly an environmentalist, and not a shill for the nuclear industry, you should be proposing ways those of us in the very richest nations can learn to live sustainably on far less energy than we’ve become addicted to using. Physics tells us that the energy required by any activity varies with the square of that activity’s speed: twice the speed requires four times more energy, thrice the speed requires nine times more energy. Slowing economic activity (aka GDP or GNP) by half would cut our energy needs by 75%!

Are most of today’s air and automobile travel, video games, round the clock air conditioning, neon signs, “just in time delivery”, and the vast amount of other things that consume most of the energy used by the very richest Earthlings really necessary for our health and happiness?

Bill Totten

_________________________

Why greens must learn to love nuclear power

Global warming and finite resources mean our way of life is more threatened than ever, and it’s time for the environmental movement to face up to some hard truths

by Mark Lynas

New Statesman (September 18 2008)

“If nuclear power is the answer, it must have been a pretty stupid question”, went an oft-cited slogan of the 1970s environmental movement. But the question was not stupid, and it is even less so today when the challenge is even blunter: how are we going to provide for our energy needs in a way that does not destroy, via global warming, the capacity of our planet to support life? The hard truth is that if nuclear power is not at least part of the answer, then answering that challenge is going to be very difficult indeed.

Unfortunately, just by writing the sentence above, I will already have prompted many readers to switch off. Being anti-nuclear is an article of faith (and I use that word intentionally) for many people in today’s environmental movement and beyond, just as it was during the 1970s. That the Green Party, Friends of the Earth and Greenpeace have held the same position on the subject for thirty years could show admirable consistency – but it could also be evidence of dogmatic closed-mindedness.

When I first broached the issue in these pages three years ago, the reaction was extraordinary. A close acquaintance sent me a tearful email saying that I had “destroyed” her motivation for environmental campaigning. Other friends here in Oxford accused me – jokingly, of course – of having formed a romantic liaison with BNFL’s spokeswoman. Just last week, after tackling the subject once again, I received a one-line email from a well-known environmentalist accusing me of having “done a considerable disservice to the cause of combating climate change”.

So why does the nuclear issue evoke such strong reactions? For answers, I think we need to look to nuclear’s past, when today’s entrenched positions were first formed. Civil nuclear power began life as a heavily state-subsidised industry largely designed to produce plutonium for bombs. Civil nuclear power was part of the military-industrial complex and shrouded in secrecy. An association with the mushroom cloud has tainted the nuclear industry ever since – and clearly continues to be an issue in countries such as Iran, North Korea and Pakistan.

Then there is radiation. Most people are terrified of radiation precisely because it is invisible, making it all the more threatening, and because of its potential to cause cancer and genetic deformities. (Many other cancer-causing agents such as food or smoke seem innocuous by comparison.) Nuclear accidents and near-meltdowns – such as Three Mile Island in 1979 – provoke scary headlines throughout the media, as did popular treatments such as the film The China Syndrome (released, by an extraordinary stroke of luck for the film-makers, just twelve days before Three Mile Island), in which a sinister nuclear cabal covers up evidence of an accident.

It is undeniable that nuclear fission generates radioactive by-products, some of which will inevitably enter the environment. It is also undeniable that exposure to radiation increases the risk of cancer (though radiation can also be employed to treat cancers). But it is the level of risk that counts, and here the story is less fearsome than many would have us believe. Take Three Mile Island, which exposed local populations to one millirem of radiation on average. This equates to roughly what we all receive from natural sources (cosmic rays and naturally occurring radioactive elements in the ground) every four days. The number of deaths from Three Mile Island – the worst civil nuclear accident ever in a western country, and one that ended the US nuclear programme (not a single reactor has been built since) – is therefore officially estimated to be zero.

Even Chernobyl, surely the worst-imaginable case for a nuclear disaster, was far less deadly than most people think. In the immediate aftermath of the explosion, 28 people died due to acute radiation sickness – all firemen and power plant workers, some of whom had been exposed to radiation doses as high as one million millirems. By comparison, 167 men were killed during the Piper Alpha disaster on a North Sea oil rig in 1988. But it is the long-term effects from Chernobyl that tend to scare people most. In a 2006 report, Greenpeace claimed that “60,000 people have additionally died in Russia because of the Chernobyl accident, and estimates of the total death toll for the Ukraine and Belarus could reach another 140,000”.

These figures, if correct, would make Chernobyl one of the worst single man-made disasters of the last century. But are they correct? The United Nations Scientific Committee on the Effects of Atomic Radiation reports 4,000 cases of thyroid cancer in children and young people in Belarus, Russia and Ukraine, but very few deaths (thyroid cancer is mostly treatable). Indeed, it concludes, “There is no evidence of a major public health impact attributable to radiation exposure twenty years after the accident”, and no evidence of any increase in cancer or leukaemia among exposed populations. The World Health Organisation concludes that while a few thousand deaths may be caused over the next seventy years by Chernobyl’s radioactive release, this number “will be indiscernible from the background of overall deaths in the large population group”. Without wishing to downplay the tragedy for the victims – especially the 300,000 people who were evacuated permanently – the explosion has even been good for wildlife, which has thrived in the 30 kilometer exclusion zone.

A plentiful supply of free fuel

One way of statistically assessing the safety of nuclear power versus other technologies is to use the measure of deaths per gigawatt-year. This technique is cited by Cambridge University’s Professor David MacKay in his book Sustainable Energy – Without the Hot Air (available free on the web), and shows that in Europe, nuclear and wind power are the safest technologies (about 0.1 death per gigawatt-year), while oil, coal and biomass the most dangerous (above one per gigawatt-year).

A focus on statistics is also useful when assessing the financial costs of nuclear power. The high price for nuclear waste disposal and decommissioning – with a hefty chunk always payable from public funds – is surely one of the environmental lobby’s strongest arguments, particularly if any subsidy from taxpayers means taking money away from investment in renewables. Helen Caldicott’s book Nuclear Power is Not the Answer discusses the finances of nuclear under a chapter subheaded “Socialised Electricity”, quoting figures for nuclear’s subsidy in the US over recent decades of $70 billion. To make a direct cost comparison, the International Energy Agency in a 2005 study looked at life-cycle costs for all power sources – including construction costs, operations, fuel and decommissioning – and concluded that nuclear was the cheapest option, followed by coal, wind and gas.

But how about nuclear power’s potential contribution to mitigating global warming? One persistent myth is that once construction and uranium mining are taken into account, nuclear is no better than fossil fuels. However, according to the Intergovernmental Panel on Climate Change (IPCC), total life-cycle greenhouse-gas emission per unit of electricity is about 40g CO2-equivalent per kilowatt-hour, “similar to those for renewable energy sources”.

But why not ditch nuclear and focus only on renewables, as the greens suggest? MacKay calculates that even if we covered the windiest ten per cent of the UK with wind turbines, put solar panels on all south-facing roofs, implemented strong energy efficiency measures across the economy, built offshore wind turbines across an area of sea two-thirds the size of Wales, and fully exploited every other conceivable source of renewables (including wave and tidal power), energy production would still not match current consumption.

This is rather different to Britain being the “Saudi Arabia of wind power” as many in the environmental movement are fond of asserting. Indeed, MacKay concludes that we will need to import renewable electricity from other countries – primarily from solar farms in the North African desert – or choose nuclear, or both. Indeed, it is vital to stress the neither I nor MacKay nor any credible expert suggests a choice between renewables and nuclear: the sensible conclusion is that we need both, soon, and on a large scale if we are to phase out coal and other fossil fuels as rapidly as the climate needs. As MacKay told me: “We need to get building”.

The UK’s Sustainable Development Commission, in its 2006 report on nuclear power, argued that new plants should be ruled out until the existing waste problem could be solved. But what if a new generation of nuclear plants could be designed that, instead of producing more waste to leave as a toxic legacy for our grandchildren, actually generated energy by burning up existing waste stockpiles? This is the solution proposed by Tom Blees, a US-based writer, in his upcoming book Prescription for the Planet. Blees focuses particularly on so-called fourth-generation nuclear technology – better known as fast-breeder reactors. While conventional thermal reactors use less than one per cent of the potential energy in their uranium fuel, fast-breeders are sixty times more efficient, and can burn virtually all of the energy available in the uranium ore.

This gives these fourth-generation reactors a big advantage. As Blees puts it: “Thus we have a prodigious supply of free fuel that is actually even better than free, for it is material that we are quite desperate to get rid of”. Moreover, fast-breeder reactors can also run on the “depleted” uranium left behind by conventional reactors, and help reduce the proliferation threat by burning up plutonium stockpiles left over from decommissioned nuclear weapons. Blees estimates that supplies of nuclear waste and depleted uranium are sufficient to “provide all the power needs of the entire planet for hundreds of years before we need to mine any more uranium”. Although these reactors produce plutonium – which might be used for nuclear weapons, and could therefore pose a proliferation threat – weapons-grade material is never isolated in the fuel-cycle process, making fast-breeders less dangerous to international stability than conventional reactors, and relatively simple to inspect.

But what about the waste these reactors themselves produce? Since the by-products of fast-breeder reactors are highly radioactive, they have much shorter half-lives – rendering them inert in a couple of centuries, instead of the longer time over which conventional nuclear waste remains dangerous. (Once again there is a powerful myth here – that high-level waste from reactors remains dangerous for enormous lengths of time. Greenpeace states that “waste will remain dangerous for up to a million years”. In fact, almost all waste will have decayed back to a level of radio activity less than the original uranium ore in less than a thousand years.) Fourth-generation nu clear technology is also inherently safer than earlier designs. The Integral Fast Reactor (IFR), discussed at length by Blees, operates at atmospheric pressure, reducing the possibility of leaks and loss-of-coolant accidents. It is also designed to be “walk-away safe”, meaning that if all operators stood up and left, the reactor would shut itself down automatically rather than overheat and suffer a meltdown.

So why, given the purported advantages in safety and fuel use, have fast-breeders not been developed commercially? The US Integral Fast Reactor programme was shut down in 1994, possibly – Blees suggests – because of political pressure levied on the Clinton administration by anti-nuclear campaigners. (Even so, fourth-generation nuclear power plants are being built in India, Russia, Japan and China.) Ironically, the Clinton administration may have inadvertently killed off one of the most promising solutions to global warming in an attempt to please environmentalists. Even if the decision were to be reversed immediately, twenty years has been lost.

It is worth remembering the contribution that nuclear power has already made to offsetting global warming: the world’s 442 operating nuclear reactors, which produce sixteen per cent of global electricity, save 2.2 billion tonnes of carbon dioxide per year compared to coal, according to the IPCC. Blees agrees that “the most pressing issue is to shut down all coal-fired power plants” and urges a “Manhattan Project-like” effort to convert the world’s non-renewable power to IFRs by the thousand. This sounds daunting but it is not unprecedented: France converted its power supply to eighty per cent nuclear in the space of just 25 years by building about six reactors a year.

An anti-nuclear report published by the Oxford Research Group in 2007 concluded that an additional 2,500 reactors would need to be built by 2075 to significantly mitigate global warming. The report’s authors suggested that this was a “pipe-dream”. But it sounds eminently achievable to me, given that it is only a five-times increase from today. The question is this: are those who care about global warming prepared to reconsider their opposition to nuclear power in this new era? We are no longer living in the 1970s. Today, the world is more threatened even than it was during the Cold War. Only this time nuclear power – instead of being part of the problem – can be part of the solution.

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Mark Lynas is a climate change writer and activist, author of the acclaimed book High Tide (2004) and fortnightly columnist for the New Statesman. He was selected by National Geographic as an ‘Emerging Explorer’ for 2006, and blogs on www.marklynas.org .

http://www.newstatesman.com/environment/2008/09/nuclear-power-lynas-reactors

Bill Totten http://www.ashisuto.co.jp/english/index.html

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