Category Archives: china

We are all High Risk now

I’ve heard it all about Trump. I agree with much of it. He is all the bad things you think he is. He is a whirlwind of incompetence. All true. Not in dispute on my end. And yes, we should be very vigilant and very involved, because what he seems to be doing, primarily, is making people very uneasy about the future. But enough of the hot-takes and put-downs and emperor-has-no-clothes memes. It is time to put away the childish things. All the rants, all the ridicule, all the facepalm… all of it. Even if it is just for a minute.

 

Try this: Think about Trumpworld like you were having it explained to you by a financial advisor. Maybe your financial advisor, if you have one. He/She is likely very serious, very focused, and not a political blowhard. He can chat about either party with equal ease. He knows that filtering out the political background noise is essential to making good financial decisions. What would the Trump administration look like if you filtered out the stadium-volume politics? That is what good financial advisors do. The good ones are good because they can look at a proposition without getting too wrapped up in the writ-large politics of it. Trump is not a politician. He has no political background, skills, or even firm political beliefs. What he has done with his life is amass a personal fortune, and a key part of amassing a fortune is learning to lay off risk. If you play with big numbers and you can get someone to reliably take more risk than you take, you will reliably amass wealth at their expense. That’s how a guy who couldn’t make a casino work; who rolled craps on bottled water, vodka, and steaks (I guess American’s couldn’t get on board with those things); a guy who has cratered and declared bankruptcy at least four times (plus other sell-offs and bail-outs); managed to become the President of The United States of America: Laying off risk on potential voters.

 

That’s not all of it, of course. The other part of the Trump mystique is getting people to ignore or minimize the risk he are asking them to take. To make this sleight-of-hand work you have to either misdirect them about the degree of the risk, or you have to get them very focused on some other risk. The mark has to be so focused on that other risk that they overlook the obvious risks they are being asked to take by Trump. That is how you get investors to buy in, and it extends executives, staff, regulators, and whole governments. Reading the room and having a feel for what token of misdirection will be most effective is probably the one thing Trump is really good at. He proved it during the 2016 campaign. He routinely clobbered people with better, or better-formed, political platforms because he could play an arena full of potential voters in a way they couldn’t dream of. Prairie Home Companion, meet Tony Montana fronting Led Zeppelin.

 

The last tie-in to Trump’s success in 2016 is evangelism. Not just Christian Evangelical evangelism, but also the idea of a true believer who is all-in. Apple was showing their understanding of the concept’s power when they added “Mac Evangelist” to their org chart. Trump is a Trump Evangelist. The Best. The Smartest. The King of Deals. And so on… And that nauseating passage aside, Trump is pulling from both flavors of the word, almost equally. In a religious setting the risk is always outside, facing in, threatening the audience. The unbeliever. The heavy metal music. The gangsta rap lyrics. The [insert your favorite secular pleasure here]. The reward the religious evangelist offers is the safety of being inside, away and apart from the external menacing force. Trump knows this play like he knows the buttons on his TV remote. All he had to do is sprinkle in the barest soupçon of old time religion and the audience understood. Inside Good. Outside, Bad. Prosperity Gospel Politics brought to the Presidency.

 

And yet again, there is a huge risk component in Religious Evangelism. [“Again with the risk?” you ask? Yes. Stick with me for a sec] Think about it like your somewhat boring and outwardly apolitical finance guy would. Guys like Joel Osteen are just laying off huge amounts of risk on their flocks, and the house always wins. Trump is doing the same thing, but in his case the flock absorbing the risk is 350 million US citizens who are now finding out that the risks are high, they are real, and there is no way to mitigate them.

You want an example of what kinds of risk I am thinking of? Here ya go: You have rank amateurs running the departments of Housing, Energy, and Education. How do you feel about those three things? Pretty strongly, I’d imagine. If there is a bedrock to western civilization it is housing, energy and education. So who were “the best people” to guide these bedrock agencies? You have a guy who initially refused the job because he admitted not having any pertinent experience (aside from having lived in a house, I shit you not), running Housing. You have a guy with an Ag degree [full stop] in charge of our nation’s nuclear weapons and fissionable materials over at DOE. And lastly you have a woman with no professional education or education policy background in charge of Education… but who’s brother (Eric Prince of Blackwater fame) made a cool billion(z) leveraging the US population’s concept of risk in Iraq and Afghanistan. And, oh yeah, this: did anyone notice that her husband is the founder of Amway. Amway is basically a peak-risk-distribution effort. The company always takes on less risk than their franchisees. Always. The house always wins. Always.

 

So stop thinking about what a braying jackass Trump is. He was one before all of this started. Nothing will change. He will always be a braying jackass. Get over it.

 

I am making the case that we start thinking about Trump as the guy who sees the entire US population as a risk-soak. His presidency is just like every other Trump deal: The less equity you have at buy-in, the more risk you gotta take. And over 95% of the US population does not have the required equity to hedge against Trump. We are faced with the prospects of backsliding on worker protections, civil rights, air and water quality, Social Security, healthcare, foreign relations, foreign economics, domestic economics, and the feeling that a world war is imminent. At the same time we are seeing Wall Street deregulated, energy corporations take over the EPA, and a massive increase in military posture and spending. The payoff is supposed to be a period of sustained economic resurgence. Last I checked the DOW was over 20,000. That was pre-Trump. At the end of eight years of G W Bush it was around 6,500. Talk about selling ice cubes to eskimos! There has been plenty of economic growth in the past 10 years, but it all stayed out in shareholder-land. The money was not used to create jobs, build factories, build coal-fired power plants, and club baby seals for fun and profit. It was used to pay the guys who had been exposed to the least risk in the first place. They are the people who bear the least risk of being without good housing, good healthcare, good education, clean water, affordable energy and good nutrition.

 

While the US Senate deliberates in secret over what version of Trumpcare can get 51 votes, think about the risk you are being asked to take on. Guys like Trump use risk as the basic measuring stick for every major decision. Maybe it’s time we all started doing the same.

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America gets a real-time IQ test

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I’m going to assume that some moderate percentage of the US population could either describe an oligarchy or identify one if they saw one. I don’t think it is anywhere near 50%, but let’s say it is greater than 25%. (But read the Wiki. It’s a good primer on what tipping-point we just crossed)

Now what percentage of them could identify an emerging oligarchy? It would be like saying you can ID an oak tree, but not an oak sapling. Lots of people fall into that category.

What just happened in the US is that an oligarchy sapling just broke through the forest floor, is getting lots of nutrients and sunlight, and before you know it, son, you got yourself a mature oligarchy growing right there in the front lawn. And the bigger it gets the harder it will be to get rid of. How do we know if we have a real oligarchy, and not just a playboy-type with delusions of grandeur? The dichotomous key to political systems will get you close:

You have a billionaire as president-elect. He became a billionaire by extracting moderate sums of money from thousands of people at a time, and then doing it again, and again. What billionaires care about it not whether the Dallas Cowboys are looking good (That’s Jerry Jones’ issue, and he is “special”), or whether their bills are getting paid. They mainly care about other billionaires, their money, and how they stack up against them. So we can check that box. They play “Fantasy Billionaire” the way Joe Six Pack plays Fantasy Football. But with piles of other people’s money. No other billionaires have been elected to the presidency of the US. That is a big bragging point right there. That goes over real big when he gets on the phone with other billionaires AND with other heads-of-state. It’s a win-win. And don’t he know it? It’s Trump, Putin, and a few guys in the UAE. That, as they say, is the list of billionaire heads-of-state. Don’t go looking for their free press or their sterling record on human rights.

And in the case of our current president-elect, Donald Trump, he is demonstrating his incuriosity, thin skin, and sub-par intellect at every damn turn. We don’t have a super-genius billionaire, or even a really smart billionaire. We have a whiny douche from Queens who inherited more money from his daddy than the average American makes in a lifetime. He is accustomed to outsourcing virtually everything. He hires “the best”. (More on that, and how he only hires the best for himself and hires the worst when it comes to protecting the American citizenry, later.) How does a guy like this plan to run a country?

Glad I asked! First, you put military lifers in positions where you want chain-of-command respected, not a bunch of smart-ass sass-back. You only want to hear “how high?” when you yell “Jump”. So you stock Defense, Homeland Security, and Intel with guys who will throw their mother in front of the L-train in the name of chain-of-command. It helps if you have conspiracy theorists with itchy trigger-fingers and an axe to grind. Less motivational work and coercion to waste Trump’s time.

Next, you recruit fellow billionaires who you know will put other billionaires (like the president-elect. just sayin’) first, and pretty much fuck the little guy all day long. That is how they got there. When you find anyone who ever called Rex Tillerson “human rights champion” please let me know. Trump himself has *never* gone on the record regarding human rights (I looked, and if you find something I am all ears). It is safe to say he has never though about the concept other than as a way to tar a “loser” who put humanity over making a dollar. Go find the country that Rex Tillerson has staked out where you have a thriving middle class, lots of manufacturing jobs, cheap top-flight health care… Good luck. If that model was successful they would be like Johnny Appleseed, as opposed to Joey Goebbels.

And Trump has Bannon, who jerks off to photos of Goebbels, so another base covered. This guy is a “strategist” in only the broadest way. He seems to be the worst kind of political apparatchik. The kind who will never be seen in public, or grant interviews, or take any real responsibility. He has his hand up Trump’s ass and it looks like Trump is talking, but you are really hearing Bannon throwing his voice. THAT is this dude’s “strategy”. And as usual, when “strategy” is next separated from “propaganda” it will be the first time.

Next, Lackeys. You cannot have a functioning oligarchy without lackeys. You need dopes who are so far over their skis that they will take whatever direction they get because what the fuck does Rick “Dancing with the Stars” Perry know about nuclear warheads? Nothing. And he ain’t gonna learn anytime soon. The steady stream of agency heads who are incompetent or outright hostile to the charters of the agencies they are being tapped to head is not a coincidence. You want a nice mix of incompetence and hostility. Both is nice.

Like an exterminator examining the mud casings in the footings of your democracy, I hate to tell you this, friend: you got a colony of oligarchs, military stooges and lackeys setting up shop in your house. The fix is to get at it early and maybe in short order you’ll have a problem you can fix with a can of RAID. But for now you gotta be ready to do the hard work to knock this oligarch colony down to size.

 

The Only Thing Changing is the Climate

Bold move by President Obama this week, getting all kind of stabby on greenhouse gas emissions and “carbon”. I will bow to BikeSnobNYC and tell you that “crabon emissions” are what I have on enchilada night…

In a major way, I am not imprressed. Not because the ideas aren’t good, or because they are rehashed, or because they have zero chance of being implemented… but it is that the reason they have zero chance of happening is because the United States is still a wholly owned subsidiary of the petrochemical industry. And don’t you forget it. Setting prices of gasoline, uh, that is their turf. If you want to play that game they will double down on your pathetic carbon tax with $150/bbl crude faster than you can say “gouge me”. The public won’t care who did it, they will pillory the guy who they believe caused gas to top $5/gal. If they wanted that shit they would move to Europe and pay $6/gal, and get healthcare for the troubles.

I’ve probably related this before but here goes: on my first full day in a job dealing with climate and energy policy I joked “fix gasoline at $5 and we can declare victory tomorrow”. And then it happened. Gas hit $5 in almost all major markets in 2007 and the top blew off. SUV sales cratered, economy cars were flying out of showrooms, people were carpooling, public transit saw a ridership spike (even the bad systems)… and you can go check the math with the EIA, gasoline sales and deliveries took a major hit. BUT, that was due to wehat I believe to be massive futures manipulation in energy markets, facilitated by a lenient SEC under the Bush II administration. If there had been a carbon tax driving that pricing you would have the social changes, the consumer changes, and the tax revenue to start building real next-gen infrastructure. Throw in the income tax swap and you would have more money in consumer’s pockets and a nice economic boost in all the other sectors. But instead all we got were record-breaking profits over at Big Oil.

The problem is that every climate scientist, economist, back bencher, tree hugger, knows or should know that carbon tax policy is sound policy. You can swap it against income tax, and it is a win-win. Even nutjob supply-siders on the right nod in agreement. The trick is to make sure you are spending the revenue on leveling the playing field for competing technologies. And doncha know that Daddy Petrobucks hates that shit all day long. It isn’t enough for him to get Billions of USD in free money at the taxpayer expense, and have a captive market, and legalized pice fixing… no, he certainly will not allow sales of his product to fund his competition.

So enjoy the show, but feel free to leave early because… SPOILER AlERT!  The Bad Guy Wins in the End.

At least the guy knows how to start a conversation….

Mitt “Mittens” Romney, that is.  I know, the statement made to those $50,000/plate donors last May is being dissected like it was the long lost second Zapruder film.  And rightly so.  I tried to find some kind of thread of sanity to Mitt’s little rampage on half the Nation as teat-sucking layabouts.  Really, I did.

Fot those of you under a rock, or in China, where this news may not have sufficiently penetrated your child-protection filter:

“There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what…

“Our message of low taxes doesn’t connect…so my job is is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives. What I have to do is convince the five to 10 percent in the center that are independents, that are thoughtful….”

And yes, it turns out that those freeloading Social Security recipients, active duty soldiers, working poor, low income families with children… all those freeloading yobbos who spend every last fucking red cent on food, clothing, housing and transportation and maybe have enough to spend something on education, but certainly aren’t stashing wads of Benjamins in their mattress… THEY are the problem.  Got that?

If you see one of the myriad copies of the fundraiser video, notice how vociferously the pillars of finance and industry shout down poor uninformed Mittens the Clown!  They can’t sit still while he runs an ideological bulldozer over their lives! NOT.  This is a high priest of “trickle down” preaching to the choir.

While Mitt scoffs at “redistribution” as a code for calling Obama a “socialist”, what exactly would Mitt be doing with the taxes received from those 47% of the Nation? Obama voters or not, wouldn’t those taxes be, by definition, redistributed?  Most likely upward, by my calculation.

I’ll stop trying to make sense of this Möbius Strip of Fuckwit VooDoo.  Someone else did a better job that i could ever do…

As is becoming disturbingly regular (and hilarious) John Stewart beat me to the more obvious points in this, the most awesome video EVER:

Chaos on Bullshit Mountain

It hits on a lot of the things that struck me as particularly baffling:

  • What about corporations that pay no taxes *at all*?  Freeloaders, failing to take “corporate person” responsibility?
  • Since when does paying income tax = personal responsibility for anyone?
  • Don’t most/all of those fine ladies and gentlemen paying $50,000/plate (to listen to Mittens put a boot in the ass of the poor) put a lot of effort into paying as little income as possible?
  • Does Mittens himself not enjoy a massive dose of tax relief by virtue of living off investment income?
  • Does this douchebag really think that the only people who vote for Obama are completely dependent on Government assistance and take no responsibility for themselves at all, ergo, all Romney voters must be paying income tax whether they owe it or not and refuse any assistance from the U.S. Government, on principle?

And this is really just the tip of the iceberg.  Dissecting the words of this captain on industry is bound to become a cottage industry, and I am sure there is someone breaking down a transcript *right now* and you will see that book on Amazon before November 2012.

The sad part of this is that it is completely predictable.  I put a lot of weight on what people say when they are riding high.  After winning the Iowa caucus, Mittens flew directly to New Hampshire to gloat and cement his stature as frontrunner.  When asked about “profiteering” Mitt didn’t even blink, mainly because he thinks profiting and profiteering are a singularity.  He went on to praise “profit” as the driver of the little people’s 401K’s and pensions… proving that he has never even glanced at a 401k or pension because both of those instruments got raped as a result of the exact kind of market de-reg that Mitt thinks will “make America great again”.  Who runs this guy’s campaign?  Monty Burns?

Beijing F(SM)OG – Part 2

When I travel I am kind of a nut for air pollution and atmospheric stuff. Sandy thinks I’m nuts, but when we visited LA for the first time I was like a kid in a candy store. From being able to smell the “burning tire” signature as we come over the basin rim from the north (before becoming desensitized about 2 minutes later), to seeing that big, fudgy, textbook inversion over downtown… it was pretty damn cool. Coughing up a big black chunk of LA’s finest when we pulled in to a rest stop in Joshua Tree… less damn cool.

(Warning: Air Pollution Geekery Ahead)

So China was something I really looked forward to. First, the flight to Beijing meant flying over the North Freaking Pole. That was worth it right there. Then came the air quality nerdvana experience. Some people taste fine wine… I taste air! In Beijing it was pretty straight forward: very forward sulfate acidity, dark nitrate overtones, and a lingering punch of particulates that just won’t quit! The deal with China is that their air pollution is not urban, like we are accustomed to in the US. Theirs is regional… and often continental. Huge areas of the country are smothered in smog. There are a lot of sources, but one that might be missed is charcoal.

Air pollution sources can be aggregated and into an “inventory”. You develop one by trying to account for the different activities that contribute to pollution. Fossil fuel combustion is easy because fossil fuels are a well-managed commodity. It gets used in electric power generation, transportation, industrial applications, and home heating, to name the big ones. The “Beijing Plan” was to cut back on transportation and electric generation, and try to restrain some manufacturing emissions. We could argue that cutting back on electricity and transportation while hosting the olympics is a bad idea, or impossible, but who would listen? In the US we cook our food primarily with electricity or natural gas. We have a lot of infrastructure to deliver that energy to our homes. Very little of that infrastructure exists outside of the modernized central Beijing. When you are talking about a population of 15 million, a huge amount of them are on the outside looking in on electric and gas stoves. What you see is the “charcoal man” with a wheelbarrow full of these fuel cartridges that are about the size of a coffee can. That fuel is the core of the typical Beijinger’s kitchen. They fit into a concrete, metal, or ceramic “stoves” and generate the blast of concentrated heat needed for traditional wok cooking. Cooking fuel can be a huge factor in air pollution. It doesn’t sound like much until you do the math, and try to feed about 10 million (I’m being kind) people from charcoal burners. All of those storefront, neighborhood, night market, and fly-by-night food joints… they are not cooking with gas. They are cooking on charcoal, coal, or maybe wood. This is the definition of an “area source”. A power plant or factory is a “point source”. Regulating point sources is effective if you don’t have massive area sources. Beijing has massive area sources.

So while the “Beijing Plan” is well intentioned, it is (IMO) a complete waste of effort. A lot of pollution is “secondary”, meaning that it forms in the atmosphere as opposed to being emitted directly. Secondary pollutants are notoriously hard to reduce because the starting materials are so abundant. Ozone is the king of secondary pollutants, and as the Chinese know so well, ozone is the primary constituent of smog. It forms when volatile organics (VOC) and oxides of nitrogen (NOx) combine under UV light. China has all three in SPADES, brotha. You could shut the whole country off, cold turkey, and you would still have plenty of smog for quite a while. To their credit, the Chinese government did *something* to try to mitigate their air pollution issues. But it is basically window dressing. The underlying air pollution sources have not been attenuated.

Beijing F(SM)OG – Part 1

…statement by the committee [IOC] president, Jacques Rogge: “The fog you see is based on the basis of humidity and heat. It does not mean to say that this fog is the same as pollution. It can be pollution, but the fog doesn’t mean necessarily that it is pollution.”

I find this patently offensive. Even if I hadn’t spent two weeks in China last year, and seen this “fog” firsthand, it would reek of bullshit. But I was, and I did, and ambient air quality is my bag, baby. Fog is a dew point event, relative humidity vs temperature to be specific. The gray miasma that you see enveloping Beijing, and don’t get to see enveloping the other regions of China, is not just smog, it is beyond smog. It is a heavy cocktail of all the major air pollutant groups, and it can and does have devastating effects on living creatures.

All of the public information regarding air pollution monitoring in China suggests an extremely cynical approach. They only monitor for coarse particulate matter (PM10), they don’t monitor fine particulate matter (PM2.5), ozone, nitrogen oxides, sulfates, or volatile organics. When their PM10 measurements let them down, they either moved the monitors to cleaner areas, or simply shut them off. When asked if they planed on improving their air monitoring, the response was “Yes, after the olympics”. What is ironic is that most air pollution monitoring gear is very low-tech by modern standards. Heck, they Chinese actually make some decent air monitors that are used in the west.

I don’t want to be misunderstood on this. I am pro-China, in that I see the potential for their role as a positive force on the planet. The people I met in China were genuine, warm, and giving. Their culture is rich and diverse. Their food is astonishing if you can find the real stuff and stay out of tourist joints. But damn, there is a strong undercurrent of purposeful foot-dragging and feigned ignorance that undermines the current state of their culture. That is largely a government function, but it permeates the culture at large. Big Bother is not a derogatory concept in China. More bluntly: Beautiful people, diverse culture, shitty government… just like the USA!