Shifting centers of balance: trends undermining OPEC, Russia, and (possibly) China!

Equilibria are shifting. One more reason not to let Bushes (or their factotums) back anywhere near where they can mess up these trends. For example:

Ramin Jahanbegloo writes in response to the historic nuclear deal and opening with Iran, "from now on Iran will be a full partner in the big game in the Middle East and the world," including through "intensified sectarian proxy wars" in the region. (From the WorldPost.)

But I like to go behind the news to deeper implications. For example the fact that this deal is likely to open opportunities back home for more than a million Iranian expatriates, whose money and cultural influence could become a tipping factor in that nation's internal Culture Wars.

Moreover, in the wake of the deal to end sanctions on Iran, in exchange for severe limitations on its nuclear program… have you seen all the headlines lumping together two U.S. allies who are strange bedfellows, united in opposition? The Saudis and Israelis are both hyper worried about Iran. Oh really?

In that case, might I suggest that... um... you make peace with each other? 

It would require the Saudis to realize something that you or I would call minor and symbolic, but to them might seem catastrophic... that the "caliphate" brand (their secret dream for 80 years) has been spoiled by the spawn of their own propaganda mills. The word is now unusable -- at least without rousing total alarm in the West. So maybe... just maybe a change in strategy? Instead try on for size  the dream of the Hashemite Faisel -- to unify the Sons of Abraham -- Jews and Arabs – combining their strengths and soothing grievances? Perhaps that might offer greater long range prospects than Ummayid fantasies.

With Saudi money, Palestine could be solved and more friction points eased. The resulting alliances might be spectacularly powerful, calming the entire region. But it would take actual brains and guts to make such a Super-Camp-David swing. Lots and lots of guts.  I'm not holding my breath.

Oh but might there be signs? Here's one hint that higher Arab powers are testing the waters of rapprochement.  

And another hint? Saudi Arabian billionaire – and Fox News co-owner -- Prince Alwaleed bin Talal has said he will donate his entire $32bn fortune to charity. The money would be used to "foster cultural understanding", "empower women", and "provide vital disaster relief", among other things, he said, adding he had been inspired by the Gates Foundation. That amount, alone, could transform Palestine… But no no.  I will believe it when they stop subsidizing Rupert Murdoch’s campaign to destroy America by eliminating politics as a problem-solving skill.

Oh, one more factor. 

== The End of OPEC? ==

Not only was "peak oil" off-base... it was way, way off base. Out in the shale fields, it appears that a new kind of Moore's Law is at work, with incredible new technologies making wells up to 50% more efficient per year! You may not like carbon -- and indeed over the span of a decade, neither do I. But it is in all of our interests that (1) coal be driven out of business by natural gas, (2) American manufacturing be spurred by cheap natural gas, (3) the Middle East lose its compulsory power over our attention, (4) that some powers in the Middle East, especially, come to realize they are not unlimited gods.  

John Mauldin recently ran down a long list of these technologies. And the foolish self-destruction by OPEC that has led to this boom. "OPEC countries have no one to blame but themselves. Those years when they kept prices at $90 and higher gave the fracking industry, as well as solar and other alternatives, time to develop. They can’t put that genie back in the bottle."  In other words, it is a GOOD thing that prices were high for a time. It helped drive us toward efficiency and sustainables, till the latter are starting to really ramp up on their own merits.  Still, we will not cross the next ten years to sustainables-heaven without doing the best we can with the best fossil fuels we can.  And did I mention that domestic methane is a lot better, for many reasons, than coal and Middle-Eastern oil?

Do not get me wrong on this!  We must have politics that emphasizes sustainables, getting them online as fast as possible!  Sustainables and efficiency are core to our survival and the political wing that has opposed and obstructed them deserves to roast in hell. They are no less than traitors.

Still. Try to map and negotiate the transition decade with realism and care.  A healthy economy and energy independence will allow us to think rationally and have the wealth to invest in the sustainables push.

== Who will feel the pain? ==

Mauldin continues: "Saudi Arabia is trapped. If prices go up, US shale producers will uncap some wells and produce more. And if it isn’t the US, it will be Australia, Canada, or even China’s growing shale industry. Argentina has potentially massive shale oil plays. Ditto Mexico. There is oil and natural gas all over Eastern Europe. Oil-producing nations (and not just OPEC members) are losing the ability to subsidize their government spending with oil revenues. Look at this table of the oil price they need in order to balance their budgets."

Mauldin is that rare commodity these days -- a genuinely sane Republican (though delusional in imagining that some of his party's leaders share this trait.) For one thing, he does not deny climate change is urgent, but couches it is safer (for a conservative pundit) terms: "Does cheap shale mean solar, wind, and other alternative energy sources will lose momentum? I don’t think so. Governments around the world still want to reduce carbon emissions. For that matter, so do I. I prefer not to see the air I am breathing, thank you very much." 

Okay John.  Now convince Rupert and the Elders.

The fight isn't yet won. Coal is still cheapest, though part of that is due to cheating subsidies which should be reversed and turned into harm-taxes.  But my friend Ramez Naam shows that solar costs are plummeting so fast that they will cross natural gas soon... though solar's inherent cycle problems mean we desperately need RandD to smooth that out.  RandD that will not happen, if Republicans have their way.

Finally, John offers the following insight on how solar will change economic calculations: "For simplicity sake, let’s say you buy $10,000 worth of electricity a year from your local utility. That is $10,000 of GDP. Now let’s say you spend $40,000 to put in a solar system that allows you to get off the grid. That is a one-time boost to GDP of $40,000. But now you no longer pay $10,000 a year to the utility, so as long as you are on the solar system, you are no longer contributing to GDP. Further, if you buy an electric car and charge it, you are no longer buying gas, and thus the portion of your money previously spent on fuel is no longer contributing to GDP."

Fascinating times.

== An energy-related debacle ==

The sheer magnitude of the Tianjin catastrophe is simply stunning.  It is a war zone.  Movie directors should be rushing in to get footage because no special effects wizardry could emulate the apocalyptic video. And this one.

Though in fairness… it seems similar to the Texas City disaster of April 1947, which involved an explosion of 2300 tons of ammonium nitrate in a ship.  It was the worst industrial accident in US history.  (The worst in world history was at Bhopal, mostly not due to the explosion but poisons released by the explosion.) The Texas City disaster killed 581 and injured 5000.  The resulting fire also led to a later second explosion that broke windows up to 40 miles away, supposedly by "earthshock." Here is a pretty good list of AN-caused disasters.

Then there's the 1917 Halifax harbor explosion -- a munitions ship blew up, leveling half the town. I understand that the Chinese disaster involved a warehouse for storing a variety of dangerous chemicals.  So, does history console us that China, too, will swing over to a rule of law that reduces such calamitous failures of governance to a minimu?  We should hope so and pray that it happens soon.

== Trans Pacific Partnership? Or predation?  ==

Finally, rounding out this international roundup. Asian economics expert Scott Foster on the Strategic News Service offered up the following insights about the Trans Pacific Partnership, unknown by most American (simplistic) political factions:

1) The Trans Pacific Partnership (TPP) emphasizes protection of intellectual property and aims to limit government intervention in the economy - the two biggest problems foreign companies have when dealing with China. China is not part of the TPP now and would not be allowed to join in the future without conforming to its principles. Meanwhile, Japan must -- under stringent TPP rules -- at last abandon its own predatory-mercantilist practices of the past.

Japan will be tying its economy at the hip to one of two industrial behemoths. Do you want that to be China?

2) Worrying about the TPP creating an open road for Asian exporters to the US is a waste of time; that open road already exists. Tell me what your plan is, to crank that back. Greater access for us into the world's largest and fastest-growing market is more important.

3) Japan's Prime Minister Abe has been using the TPP as a tool to weaken Japan's agricultural lobby and other structural impediments to economic recovery - and, by extension, foreign access to Japanese markets. 

There are other aspects.  So many of them. But let’s start from a position that's rare, nowadays -- considering a mentally difficult-to-grasp possibility.  That all the nations who are joining TPP actually may want a positive sum game. They are all scared by (among other things) recent territory grabs in the South and East China Seas.

Perhaps... (and yes, the devil is in the details)... these folks may also be sincere.

Meanwhile, conservative Republicans are trying to shut down the U.S. Export-Import Bank. A completely insane idea with just one aim, to ecconomically harm blue states that make most of our valuable manufactured exports. Gridlock resolved: I'll shoot this foot, you shoot that one.

"Three Laws" of Corporatics? A world war of sabotage? And an end to politics.

For the new year, let me start with Larry Hart’s “Three Laws of Corporatics” which are vital to program into ALL forms of artificial life… and indeed, (with different words) into our kids (including any who will partly or wholly made of silicon):

First Law: A corporation may not impose externalities on others or upon the outside world without fairly negotiated and sufficient compensation and/or restitution to those harmed. (Including future generations.)

Second Law: A corporation must fulfill its chartered and openly vetted mission statement to the extent that doing so does not conflict with the First Law.

Third Law: A corporation must maintain its ability to continue functioning to the extent that doing so does not conflict with the First and Second Laws.

Beyond the obvious homage to Isaac Asimov, I am confident that Adam Smith would approve. In this basic form, it might have even got approval from both Marx and Rand!  It is common sense and it should be fundamental.

Moreover, only by setting such an example will we talk robots into accepting their own, Asimovian versions.

== Alternate Futures ==

In one of the most scary and depressing predictive novels of all time — THE COOL WAR, by Frederik Pohl — we see a highly credible and plausible way that the world could spiral down to hell. Not amid a spasm of mushroom clouds and plagues, but through a tit-for-tat cycle of sabotage, with each adversary easily crippling some vulnerable element of the other’s complex and inter-related economy, resulting in a descent that is gradual, blamed on incompetence, spinning the whole world downward to shabbiness, poverty and loss of confidence.

Could it happen? Well, ask yourself this: does cable news lie, in order to demolish belief in ourselves? Um duh? Now ask: in whose interest is it to do that?

 Read about one example of a known incident where this kind of sabotage is verified.  Moreover it was done trivially and cost free, by a few state-sponsored agents and hackers. 

Oh, and now contemplate the series of air disasters that has struck Malaysia, lately. As Goldfinger said: "Once, Mr. Bond, is happenstance. Twice is coincidence. Three times is enemy action."

== Gerrymandering and Redistricting ==

Running through some items for you... here's a fascinating appraisal of how population density correlates strongly with “red vs blue” leanings in U.S. politics.  

Meet the Fortune 500 Companies Funding the Political Resegregation of America: Mother Jones is unabashedly partisan. So I always damp down what I get from them as a bit polemically exaggerated.  Still, they tend (unlike Fox and pals) not to outright lie.  And this article about the relentlessly aggressive and well-organized campaign by the Republican Party to use gerrymandering to stay politically relevant, is simply stunning.  

Those of you who still cling to loyalty to a movement-gone-criminally-insane… that only stays competitive by rampant cheating... are you truly proud of this?

Hence: are we seeing a miracle?  A state whose legislature is controlled by Republicans, actually cranking back on gerrymandering? Yes, a bill for impartial redistricting has passed in Ohio... by the GOP-run legislature! 

Okay so where's the catch?

It's set up to only make changes after 2021. James Carville put it bluntly, that the Ohio Republicans: “were motivated partly out of fear of a potential voter referendum that could impose an even more sweeping overhaul.”  

Moreover, if they time it right, then Ohio's Congressional delegation won't be reconfigured till 2031! How convenient.  What... you're surprised?

Alas, Carville is far too specific and gentle.  It goes much farther and deeper.  The GOP massively gerried in 2011, after the last census.  And in states where they control the legislatures, the GOP-owned voting machine companies can deliver any results they care to rig, without any paper audit trail. The litany of blatant cheating goes on and on... but no one who would be embarrassed is still reading this, right now.

Does any of this cause a re-evaluation of how best to ensure a healthy, flat-open-fair capitalism?  My next political blog will appraise why dogmatists cling to long-disproved catechisms, expecting different results.  It is something called “insanity.” Look it up.

Why do people vote against their interests? Carville again: “I have no earthly idea why a stock market investor would vote Republican — all you have do is look at the numbers. The numbers are staggering, breathtaking and unimaginable.”  That “the average stock-market gain under four post-Depression Democrats through each one’s 2,000th day in office has outpaced the average gain of the four Republicans in the era by a factor of nearly 4 to 1. Democratic gains have averaged 133%, while Republican market advances have had a mean of 33%.”  (It gets FAR bigger if you just compare both Bushes to Clinton and Obama.

Of course this metric does not stand alone.  Every comparison of national health, from unemployment to small business startups to federal budget deficits, does better across the span of democratic administrations, vs republican ones.  Only a quasi religion of the hypnotized would ignore the titanic disparity of actual outcomes.  Ah, but such is the power of propaganda.

For more on this stunning disparity, see: Do Outcomes Matter More Than Rhetoric? 

== Two Historical Perspectives ==

A fascinating article about how Karl Marx viewed the American Civil War. An excerpt: “The workingmen of Europe feel sure that, as the American War of Independence initiated a new era of ascendancy for the middle class, so the American anti-slavery war will do for the working classes. They consider it an earnest of the epoch to come that it fell to the lot of Abraham Lincoln, the single-minded son of the working class, to lead the country through the matchless struggle for the rescue of an enchained race and the reconstruction of a social world.”

Oh, sure, this is a "socialist rag." And you have heard me inveigh upon lunacies of the far left. But this article is informative and erudite and moderate...and I am happy to refer folks to articles that cogently discuss Adam Smith.  How sad that so many folks nowadays consider themselves to be sophisticated, politically, because they can share “cogent” jpegs on Facebook or repeat a Hannity rant… having never actually read Adam Smith or Marx or even Orwell.  Bigger issues are at stake, Horatio.

So what happened in Russia?  One of the most shameful episodes in U.S. history, when one of our most evil presidents -- George H.W. Bush -- sent over scores of "commercial advisors" to help the Yeltsin government "transform" into both democracy and capitalist paradise.  These advisors, from major US banks and investment houses, urged a series of "privatization" events that were supposed to give every Russian citizen equal shares of privatized state enterprises.  The result, a few years later, was the narrowest oligarchy of blatant theft in the planet. Good job.

No one has ever told this story.  Of the worst president of my lifetime, vastly despicable, even more so than his horrid son.  Oh, please.  More Bushes. Please, sir, may we have another?

== a palate cleaner ==

After that expression of righteous and rightful outrage, let me return to a fellow I admire... whom I mention publicly more than anyone else alive, I reckon.

Here's a brief bit of enlightenment (The Morals of Modern Economics) as yet another moderate person expresses surprised delight over how... LIBERAL... Adam Smith truly was, helping to explain why the right (amid its dive into lunacy) has completely abandoned the Father of Modern Capitalism.

Seriously, you moderate liberals (not leftists), the most powerful political JUDO move you can make is to rediscover Smith, the founder of YOUR movement and no friend of oligarchic lords. Reclaim Adam Smith... and watch the Fox-zoids stammer in confusion as you sewer them with Smith's truth... that the great enemies of flat-open-creative markets have always been owner-oligarch-monopolist lords.

== A roller coaster! ==

Which brings us to those who might actually know what's going on...

Screw the One Percent: I hate the title of this piece. The enemy is not the top 1% (which probably includes your periodontist), but HALF (the feudalists) of the 0.001%.  Still, read this  article about a reform that probably never entered your horizon, even though it probably affects you… the law that used to guarantee most US workers overtime pay. The limiting cap has not been raised but once, since 1975. Apparently (verify this) BHO could raise it himself, without Congress.  Um, what’s he waiting for?

While I'm on the subject. Here's one dystopian scenario, written back in 1908: The Iron Heel, by Jack London, also available on Project Gutenberg. It portrays deepening class divisions, resulting in an oligarchic tyranny of terror arising in the United States. An amazing bit of prescient and earnest (and kinda depressing) sci fi from an early and unusual source.

Oh, heck, let me swerve and show you what a statesman was like... and how we need someone like this now! Here I make the case that George Marshall was the Man of the 20^th Century.