Michael Lind - Fracking

So my buddy Michael Lind is again making the case for a resurgence in fossil fuels.  And I must say he's beginning to convince me.  I'm not won yet baby, I need more sweet talking.  I must say--he almost sounds like he's shilling for the Natural Gas Industry.  I hope not, one political betrayal at a time.  On the topic of WeinerGate (the first gate since Watergate which is truly awesome and appropriate.  Don't we all seek a weinergate after all?)  I might try that one on my wife soon as foreplay.  Sigh.  Ok.  Briefly, I really don't care about what goes on in a politician's bedroom.  None of them, whether or not he's a Republican or a Democrat.  It's the policies that matter, the men, are just men.

On to Fracking.  As you know, Lind is a fan of cars, driving, gas and energy.  He says that the use of "shale" gas, which was previously unrecoverable is six times as much as oil, cleaner and with modern technology easy to refine and produce.  He says that we could be witnessing the rebirth of the fossil fuel energy industry.

"If gas hydrates as well as shale gas, tight oil, oil sands and other unconventional sources can be tapped at reasonable cost, then the global energy picture looks radically different than it did only a few years ago. Suddenly it appears that there may be enough accessible hydrocarbons to power industrial civilization for centuries, if not millennia, to come."

Wow, how exciting!  He then goes on to say how all the reasons for sustainable energy are now irrelevant.  1)  Peak Oil is no longer an issue.  No imminent energy crisis. 2)  No political blackmail.  Shale gas, tight oil, gas hydrates are everywhere!  Wheee!  3)  The effect on the environment is no big deal, Natural Gas is clean, drink up!

This is where he loses me:

"The scenarios with the most catastrophic outcomes of global warming are low probability outcomes [Huh?  says who?]-- a fact that explains why the world’s governments in practice treat reducing CO2 emissions as a low priority, despite paying lip service to it [if by lip service you mean broadly denouncing global warming as a hoax, then yes] . But even if the worst outcomes were likely, the rational response would not be a conversion to wind and solar power but a massive build-out of nuclear power. Nuclear energy already provides around 13-14 percent of the world’s electricity and nearly 3 percent of global final energy consumption, while wind, solar and geothermal power combined account for less than one percent of global final energy consumption." 

Phew, boy am I glad that Lind is here to be rational for all of us.  There's a reason wind, solar and geothermal use less than 1% and Lind knows it.  Governments need to get on board and ask for them, governments are the major purchasers of energy resources afterall.  And then he whitewashes the nuclear disaster in Japan.

"The disasters at Chernobyl and Fukushima have dramatized the real but limited and localized dangers of nuclear energy."

A radiation plume spanning the entire Pacific ocean is a localized disaster?  The problem isn't that nuclear energy is unsafe, it's perfectly safe in controlled environments.  The problem is what to do with the waste, which will be radioactive for centuries, and when it all goes to shit (unlikely, but possible) a few of these "localized" disasters in different parts of the world could make the entire planet unlivable.  Or at least, hopefully medical science will keep up with the rising rate of cancer and will develope Battlestar Gallactica like radiation pills.

But I was serious, Lind really does make a convincing argument for Natural Gas, though his arguments consist almost entirely on debunking "alarmist" "Green" studies about the dangers of NG.  His most convincing arguments are political ones.  Namely that to develop sustainable energy will require an enormous governmental cost--which is true.  Wind/Solar had a tremendous boost in the Roaring Two-Thousandsees, when investment banks were using green companies as tax shelters for millions of dollars, but now that the investment banks are gone, and the economy is still staggering, the cost of propping up green energy to the levels needed to power our communities, might well prove too much.  Not when Natural Gas is knocking at the door with a plate of brownies.

Even so, he has a very dismissive, non fact-substantiated view of Green Energy:

"Eventually civilization may well run out of natural gas and other fossil fuels that are recoverable at a reasonable cost, and may be forced to switch permanently to other sources of energy. These are more likely to be nuclear fission or nuclear fusion than solar or wind power, which will be as weak, diffuse and intermittent a thousand years from now as they are today. But that is a problem for the inhabitants of the world of 2500 or 3000 A.D."
My friend, that's a whole lot of assumptions in one paragraph, I don't need to tell you that.  Let's ask my other friend, Andrew Leonard.  He comments on the exact same paragraph above!

"A better explanation for why the world is treating climate change as a low priority problem might be because the U.S. -- historically the largest producer of greenhouse gas emissions -- has refused to take any action at all."
Another goody of Leonard's:

"I'm not sure what definition of catastrophe Lind is using, but the unprecedented frequency of extreme weather events that we are already witnessing all across our planet is a strong indicator that global warming is already contributing to serious disruptions"
As to the relative safety of fracking, Leonard gives us some interesting tidbits:

"I defy anyone to read the New York Times' massive, exhaustively reported series on pollution problems associated with fracking and still not be concerned with threats to the nation's drinking water supply or the multiple failures of our regulatory system. "

Last but not least, Leonard lays it to Lind with Lind's alternative, nuclear energy:
 
"The more pertinent question to mull is why, if the economics of nuclear power make sense, private industry can't seem to make a go of it. The free market isn't very friendly to nuclear power -- it is most widely implemented, today, in countries where there is a strong state presence in the industry, like France or China. Building enough nuclear power plants to make a dent in climate change will be massively expensive. And if we're going to subsidize new sources of energy why not funnel that government funding toward sectors that do not have waste or potential meltdown issues -- like wind and solar."

Tax Cuts: Apologists in Full Swing

So the first day was anger, and then we skipped two stages of grief and went right to acceptance?  The real tragedy here is that there was never any evidence on the other side of the debate.  The two main arguments for keeping the tax cuts were that they would hurt employment, and that it would decrease overall investment.

The first point was picked apart by Andrew Leonard at Salon yesterday, "that, at best, extending all the tax cuts would lower the U.S. unemployment rate by an additional 0.1 percent by the end of 2012" Add to that the fact that American's tax burden is the lowest its been in 60 years.  American's corporate tax burden is the lowest it's been in 60 years by A LOT.  See the gap between the middle blue hue and the darkest blue, see how it gradually disappears?

The second point is defrayed by the simple fact that corporations are getting the highest profits ever recorded (link to Department of Commerce press release), and are getting the largest pay checks ever reported, and it doesn't matter if 10% of the country is unemployed, because they're obviously the ones who deserve to be, because corporate income taxes are just 11% of 2010's Federal budget receipts, whereas individual and social insurance count for another 82%.  And with all of that money, the Fed still has to grease the wheels with quantitative easing because corporations are hoarding they dolla bills instead of spending them!

And now they're framing this as a New Stimulus bill (link to David Leonhardt's Op-Ed in the NYTimes.)  Right, good frame Democrats, it's not like the Stimulus plan is the most hated American program in the past decade when only 29% of the people think it accomplished anything.  How?  Well, because of the unemployment benefits for starters.  How else?  Because of the 2% cut in the payroll tax.  My prof spoke about this last night, and was completely mystified, couldn't think of any stimulative effect this was going to have.  And in fact, since the payroll tax pays into Social Security is more likely to reduce American's retirement funds than anything else.  My favorite line:  "In exchange, Republicans agreed to extend unemployment benefits, cut payroll taxes and business taxes, and extend a grab bag of tax credits for college tuition and other items." Oh, I'm sure Obama had to suck a couple to get the Republicans to agree to a cut in business taxes.  Puhleeease!

One last point.  I've soliloquised before on why I think tax cuts are the worst kind of stimulus.  I won't belabor the point.  Standard economic theory has proven that the multiplier is much higher for direct government spending than it is for tax cuts.  While stimulus was always a terrible a word, weak, pitiful, indirect, and bureaucratic, this only qualifies as a stimulus in the most threadbare sense of the term.

For the record, I'm told my vernacular is somewhat offensive here.  I have the highest esteem for the President, and there's no shame in "sucking a couple" of lollipops.

Also, I'd like to add a correction to yesterday's post.  I indicated that the expiry of the tax cuts would have an immediate effect come April.  I asked my tax professor about this.  He said that the effects would occur immediately, bringing higher government revenues to bear immediately.  Remember that pay-as-you-go means just that.  Tax Day is just when you find out what, how much, if anything, you may have overpaid.  Also, even if taxes were to go up, if the Republican Congress were to revisit the issue and get a bill passed, it could take effect more or less immediately, and at least all of us would be able to file an amended return.  No harm, no foul.

Salon's Andrew Leonard-How The World Works

I like Salon, and though I've only read a few How the World Work's columns, I'm sort of ambivalent about Andrew Leonard. His post today made front page rotation. It's called, "The Break Up The Banks Delusion" Mr. Leonard, if by some chance you google your name, and this blog comes up, my apologies. I'd have commented on your blog. But I can't bear to get yet another password to sign in.

My issue here is the title is extremely misleading. I don't know if it was Leonard's idea or his editor's, but the title implies that Mr. Leonard is opposed to "breaking up the banks" and feels that those who believe in such are delusional. This is NOT what the post is about. In fact, the post is largely a cynical rant about how little progress has been made on the regulatory front. The "delusion" isn't that the people who believe in strict regulatory policy are delusional because of their ideals, they're delusional if they think Congress will pass it.

I'm just as cynical and I agree. But I hate it when bloggers do this. That title is incredibly misleading. And it's disappointing when any group does this (and Salon's titles are often misleading) but particularly frustrating for me when liberal groups do it.

The raison d'etre for headlines is that most people only read the large type. It's a teaser to make you read the small type--but if it doesn't work, your only impression of the article (blog) is gleaned from the headline. In this case, if you're scanning the headlines for something good to read, and you don't pick Leonard's columnm, all you're getting is that Salon think's it's bullshit to break up the banks. And that type of impression is irresponsible if it isn't the truth.

In the preceeding paragraph I touched upon another issue. Nothing to do with Mr. Leonard. The distance between articles and blogs is closing rapidly. Large reporting outlets would do well to delineate the difference with striking visual difference. And the word's "opinion" should always be nearby. Too many people take their news from columnists without ever realizing that it. I do it myself. Maybe I'm lazy, but I work hard, and I don't have too much time. Making that difference apparent would be really really easy. Salon, Slate, MSNBC, CNN, please do so.