Several weeks ago I wrote a little about Professor James Lovelock of Great Britain: He is 92 years old, still alert and interested. He was an early hero of "green" science, inventing the device that demonstrated CFCs were damaging the earth’s atmosphere. But he always has been a scientist first, then an environmental activist. I think it is worth revisiting his remarks, given an AP report the U.S. actually has reduced significantly the carbon dioxide it is putting into the atmosphere to 1992 levels.
Lovelock spoke with common sense recently in a lengthy interview with the Guardian newspaper; the activist "greens" have not been thrilled about his remarks, for he has been implicitly critical of their hysteria and impracticality.
Lovelock: “You’ve got to cut back on burning fossil fuels, but you’ve also got to be sensible and reasonable … you’ve got to adapt to each new situation … The environmental ideologues come along and say ‘stop burning all carbon now!’ What you’ve got to avoid at all costs is ideologues ... (they) are harmful. They are never right. We get to our stable position through checks and balances … The problem with ideologues from Marx onwards is that they tend to imagine that human nature is very different from what it actually is.”
He spoke about the discovery of much greater natural gas reserves in the U.S. because of our nation’s new-found ability to extract gas from shale beds. He thought production of shale gas was a perfect example of common sense at work, preserving our necessary use of fossil fuels (which virtually fuel our entire economy) AND of protecting the atmosphere, both objectives served without delivering ourselves to environmental hysteria.
What’s more, he explained why the reduction in carbon dioxide emissions: matural gas burned in turbines making electricity produce power twice as efficiently as does burning coal. Natural gas is 60 percent efficient per unit of energy, while coal is 30 percent efficient burning the same unit of energy. Therefore, natural gas is twice as productive. Further, natural gas releases only half as much carbon dioxide into the atmosphere when burnt as does coal to produce that electrical power.
Therefore natural gas is FOUR times better for the atmosphere as a fuel for the generation of electricity as coal. It is the "perfect bridge fuel," Lovelock maintains, until we can perfect some type of non-polluting fuel to power our economy.
Burning gas was a natural adjustment to market realities by the utility companies; they are abandoning coal, and switching to natural gas – based on costs! Given a competitive price, it becomes a no-brainer, doesn’t it? Use natural gas.
The AP story about the "overall reduction of release of carbon dioxide by the U.S. – down to 1992 levels" was published Aug. 17. This lauded the first significant improvement in numbers by the U.S. since worries about emissions became an issue. Lovelock’s remarks anticipated this very good report. One would think the greens would be thrilled ... but I have seen nothing in the news reports about them applauding this news. (But that figures; they don’t like market stuff. They prefer political committees and bureaucratic decisions ... After all, they are ideologues!)
I think I love this news because it is just pure Americanism: Business as usual. Somehow we have muddled our way to an excellent solution (use natural gas to make electricity, not coal) and do it because it makes common sense and does not radically disrupt our way of life.
And, incidentally, we should extend our thanks to our natural gas industry. I hope you guys make a lot of money producing natural gas!
Friday, August 17, 2012
Thursday, August 9, 2012
Deja vu, European community?
In 1930 and 1931, the United States was sliding over the edge of the chasm into the Depression. Our country would struggle for eight years to get out of that chasm, trying all sorts of policies to do the trick. Finally, the beginning of war in Europe in 1939 and the desperation orders for war materials from Great Britain would make the difference. (She would emerge from WW II bankrupt; the U.S. would emerge as the world powerhouse.)
What I have to say is stimulated by Fabian Lindner, writing for the Guardian newspaper. He draws the eerie parallels in a column on the 25th of July between U.S. actions and German reactions in 1930 — and German actions and Greek, Spanish, Italian and Irish reactions in 2012.
In 1930 the U.S. held German government bonds — denominated in dollars, not marks. We had been providing the credit that had floated the German economy through the Twenties; Germany had begun to recover from the trauma of WWI and was working hard toward prosperity, struggling to be a truly democratic country. Our loans had no doubt helped, and Germany was making some progress.
Then our financial crisis began in the fall of 1929; our government and central bank acted by decreasing the amount of dollars in circulation radically; our Congress insisted on passing the Smoot-Hawley tariffs, closing our borders to foreign suppliers in order to protect domestic manufacturers. Both were poor policy reactions; we shut down the global economy even more!
Now Germany could no longer earn the dollars in international trade to pay her debts. Then our government (and the British and the French) demanded Germany continue to meet her debt payments regardless of these changed circumstances, but they cut off further financing until she demonstrated she could meet those payments.
What could the German democracy do? Cut, cut, cut expenses; cut salaries; increase taxes, and do it without considering the social and political consequences of doing so. Public spending went down 30 percent. Unemployment went up to 30 percent; GNP shrank 8 percent one year, then 13 percent the next. German government officials truly tried to pay up. But as world trade collapsed, as other governments followed the American example and closed their borders with tariff walls, Germany went into bankruptcy.
Social instability increased in Germany; the center parties of the Weimar Republic collapsed, political gangs marched in the streets and the National Socialists grew in power, actually winning genuine elections. Adolph Hitler gained power nationally in 1933 and soon seized absolute control by coup — and the world started down the slippery slope to WWII.
Fast forward to 2011-12: Greece has been riding a huge wave of foreign credit — denominated in Euros — for a number of years: goodies for everybody, paid for by government. So has Italy, so has Spain. But now financial panic — spreading from the U.S. mortgage crisis — shuts down silly, or loose, lending across the globe.
So the fun is over in Greece; she struggles to meet her obligations, begs for help in Brussels and, ultimately, begrudgingly, the economic strong man of Europe, Germany, is forced into developing a program of re-financing. But, as quid pro quo, Germany demands Greece "behave responsibly ... live within her means" ... etc. The Greeks are slammed by German demands for fiscal rectitude as a price for help. Because her debt in denominated in Euros, the old solution of devaluation of the drachma is not possible; she has to earn Euros to meet her debt; she has to meet the German requirements, regardless of consequences.
Now, obviously, Greece can fall into terrible instability, and, equally obvious, she does not have the military muscle to do anyone any harm, so this is not an exact déjà vu. But consider the parallels.
Italy, Spain and Ireland all are in early stages of similar problems. Europe has yet to develop a comprehensive solution for meeting this problem. The old way of dealing with this — devaluation of national currency — no longer works, because the debt is in Euros, a hard currency. But a hard-nosed lender demanding near-impossible terms is not a good solution either. Is there middle ground? No one seems to have a good solution. Can Europe muddle around, preserve her Union and find a solution that works?
Could it trigger more economic woes for the world economy? Could it trigger another wave of recession/depression? Indeed, it could! Germany needs to proceed carefully and look at all aspects of her policies. Let’s hope that she does.
What I have to say is stimulated by Fabian Lindner, writing for the Guardian newspaper. He draws the eerie parallels in a column on the 25th of July between U.S. actions and German reactions in 1930 — and German actions and Greek, Spanish, Italian and Irish reactions in 2012.
In 1930 the U.S. held German government bonds — denominated in dollars, not marks. We had been providing the credit that had floated the German economy through the Twenties; Germany had begun to recover from the trauma of WWI and was working hard toward prosperity, struggling to be a truly democratic country. Our loans had no doubt helped, and Germany was making some progress.
Then our financial crisis began in the fall of 1929; our government and central bank acted by decreasing the amount of dollars in circulation radically; our Congress insisted on passing the Smoot-Hawley tariffs, closing our borders to foreign suppliers in order to protect domestic manufacturers. Both were poor policy reactions; we shut down the global economy even more!
Now Germany could no longer earn the dollars in international trade to pay her debts. Then our government (and the British and the French) demanded Germany continue to meet her debt payments regardless of these changed circumstances, but they cut off further financing until she demonstrated she could meet those payments.
What could the German democracy do? Cut, cut, cut expenses; cut salaries; increase taxes, and do it without considering the social and political consequences of doing so. Public spending went down 30 percent. Unemployment went up to 30 percent; GNP shrank 8 percent one year, then 13 percent the next. German government officials truly tried to pay up. But as world trade collapsed, as other governments followed the American example and closed their borders with tariff walls, Germany went into bankruptcy.
Social instability increased in Germany; the center parties of the Weimar Republic collapsed, political gangs marched in the streets and the National Socialists grew in power, actually winning genuine elections. Adolph Hitler gained power nationally in 1933 and soon seized absolute control by coup — and the world started down the slippery slope to WWII.
Fast forward to 2011-12: Greece has been riding a huge wave of foreign credit — denominated in Euros — for a number of years: goodies for everybody, paid for by government. So has Italy, so has Spain. But now financial panic — spreading from the U.S. mortgage crisis — shuts down silly, or loose, lending across the globe.
So the fun is over in Greece; she struggles to meet her obligations, begs for help in Brussels and, ultimately, begrudgingly, the economic strong man of Europe, Germany, is forced into developing a program of re-financing. But, as quid pro quo, Germany demands Greece "behave responsibly ... live within her means" ... etc. The Greeks are slammed by German demands for fiscal rectitude as a price for help. Because her debt in denominated in Euros, the old solution of devaluation of the drachma is not possible; she has to earn Euros to meet her debt; she has to meet the German requirements, regardless of consequences.
Now, obviously, Greece can fall into terrible instability, and, equally obvious, she does not have the military muscle to do anyone any harm, so this is not an exact déjà vu. But consider the parallels.
Italy, Spain and Ireland all are in early stages of similar problems. Europe has yet to develop a comprehensive solution for meeting this problem. The old way of dealing with this — devaluation of national currency — no longer works, because the debt is in Euros, a hard currency. But a hard-nosed lender demanding near-impossible terms is not a good solution either. Is there middle ground? No one seems to have a good solution. Can Europe muddle around, preserve her Union and find a solution that works?
Could it trigger more economic woes for the world economy? Could it trigger another wave of recession/depression? Indeed, it could! Germany needs to proceed carefully and look at all aspects of her policies. Let’s hope that she does.
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