Monday, January 26, 2009

Here's An Alternative

A trillion dollars (or two) for the banking industry, a trillion for consumers... pretty soon we'll be talking about serious money. Oh, but I forgot - it's just dollars. Never mind..

Seriously, though: since we are shelling out all this federal bailout and stimulus money, shouldn't we also be making sure it's going to get us the most bang for the buck? Predictably, the Republicans want it to go towards tax cuts. I won't even bother to debate this; tax cuts for the rich have been as effective as the Berlin Wall was in preserving homo Sovieticus. On the other hand, and just as predictably, the Democrats want extended unemployment benefits and job programs.

Both are thinking inside the boxes they built decades ago. Such thinking is singularly unfit for overcoming today's challenges, which include such game-changers as resource depletion and environmental destruction - not to mention an already monstrous mountain of debt. The policy knee-jerks are plainly dusting off and doffing their respective Friedmanite and Keynesian hats, believing that the future is a linear continuation of the past. Unfortunately, it isn't.

Today, we are sitting atop an epochal inflection point in the History of Man, at the crossroads of very different and mutually conflicting future possibilities. Which road we choose to go down is crucial. We cannot willy-nilly assume that the tools of our past will fix the problems of our future.

Here's just one alternative suggestion on how to best invest our trillions, one of literally hundreds we can all think of, once we abandon our beaten-path thought processes.

Have the federal government directly build a few dozen alternative, renewable energy power plants all over the US and then immediately sell them one by one to the highest qualified bidder(s). It's the TVA and Hoover Dam model, but with a twist: the government would not operate them or even own them. Instead, it would be up to new or existing utilities to take advantage of such opportunities, since it is certain the selling price would be below cost.

But here's another twist: the federal government could "boost" the price it would get for the new power plants by legislating strict carbon-emission standards on existing utility companies, perhaps in the form of a carbon tax. This will increase the present value of the new "green" plants.

Yes, it is almost certain that the government would lose money on the deal, at least by conventional accounting rules. But the added gains in R&D, manufacturing and construction employment and the intangible geo-strategic and environmental benefits will definitely outweigh the "loss".

It's a thought..


Debra said...

Hell, one of the problems is that we are refusing to see that money as a symbolic system is already bankrupt.
Why do I say it is bankrupt ?
Because the dollar amounts just keep going up, up and away.
The more they go up up and away, the less we manage to intellectually or humanly connect to them : they render the concept of money more and more abstract, and this is fatal to a symbolic system, I think.
So, the amounts keep going up because money is really WORTH less and less to us, even as it takes front, center, back, and side stage in our societies.
We have wanted to create in it the perfect symbolic system which can totally TRANSLATE, (or be converted into) all the other symbolic systems, with no troublesome remainder to remind us how illusory all this is.
But, this is just not possible. And we collectively know this, even as we bail out the banks...

I know this sounds philosophical to y'all on this blog. But there was a time when philosophy was really WORTH something in our society. When people who had these gifts were socially recognized for contributing something of value to the collectivity for being able to express thoughts.
I don't see much evidence of this being true in our society at this time...

Hellasious said...

Dear Debra,

The philosophical problem with money today is that most peoples' view of it is obsolete - and has been for decades.

Today's fiat money is an article of faith. It is based 100% on trust, i.e. it is essentially a religion. And yet, people's understanding of money is still shaped by history, e.g. bars of gold and bags of silver.

Thus, there is a huge disconnect between what money really IS and what people THINK it is.

One can only imagine what would happen if people cottoned on to this fact...


Cottonbloggin said...


I have lived a good life. I do not have much in the way of knowledge, but I have experienced many of the gems life has to offer. That experience has imparted to me two tidbits of wisdom which I would like to share. And I believe they are higher in the heirarchy than the laws of thermodynamics or anything else. They are as follows:

--Tomorrow will be different than today, so adapting to change is necessary and paramount.


--There is a creative solution to every problem.

Hell, you seem to understand these two statements as well as any I "know", and for that I consider you a wise man.

thank you.

Anonymous said...

I think the government should simply give each American 100,000 dollars.

OkieLawyer said...

I have a problem with selling our collective investment at a loss. That is the sort of thing the Bush Administration wanted to do (and even did) with oil deposits in the Gulf of Mexico, Alaska and in our National Parks.

Why not use the same co-op model they use in the Scandinavian countries and Japan? You can buy shares of stock in StatOil Hydro and Vestas on the stock market.

I think that the true "old thinking" is that government can't do anything right. Government does what private enterprise is unwilling or unable to do. The railroads were built by tax dollars and given to private individuals (now historically known as "robber barons"). We don't need to repeat that past -- even if this time the purported barons will be traditionally Democratic donors.

Joe said...

"Thus, there is a huge disconnect between what money really IS and what people THINK it is.

One can only imagine what would happen if people cottoned on to this fact..."

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." Henry Ford

Joe said...

"We cannot willy-nilly assume that the tools of our past will fix the problems of our future."

Obama has assembled the same gang-bang Clinton group, complete with an alternate Clinton.

He is already on record as saying expect trillion dollar deficits for years and make-work programs involving more debt.

It is more than obvious he is doing the same things that will not solve anything.

As such, at some point soon, we will have a major crisis that will rock the confidence/faith of US Empire and its debt-dog, the USD.

Auto-reset is about to be executed and then we will rebuild from the ashes.

Joe M.

Yophat said...

"our trillions" should be more accurately stated as our grandchildren's grandchildren's trillions!

The world's a stage and all the governments and principalities merely players: They have their exits and their entrances; And each in its time plays many parts...may our demise be quick & swift!

Its a financial roll-up strategy crafted by the schmucks!

bb said...

that's the way to go!
gov't money has to be invested ONLY in productive enterprises that on operational basis turn a profit.

Thai said...

Great post Hell! I particularly like this ideal.

I have always felt that basic research is a particularly well suited use of the collective's resources, as meaningful ROI on basic science is usually on a much longer time scale than the average individual investor can withstand. This does seems a particularly good use of the collective's investment dollars and I commend your stewardship.

But the comments above do raise the issue that I think some people need to remember, that at some level, the very existence of complex chaotic systems is almost 'proof' of the zero sum nature of every decision we make in aggregate. All our decisions have a trade off somewhere in the system and it is our cognitive dissonance which usually prevents us from seeing this fundamental truth. Your repeated concerns over 'perma-growth' are just one expression of this.

It does seems to me that unless we have a discussion around this fundamental truth (and note I AM NOT recommending we all go nihilists), we will not get majority agreement on these larger issues.

So I do sort of agree with Deb, applying more logic to the problem is unlikely to solve it when it is fundamentally unsolvable.

Anonymous said...

Re: nihilism

To paraphrase from The Eagles' Hotel California:

"We are all nihilists here of our own device".

Debra said...

The absolute worst thing that we can individually and collectively do in this situation is to despair.
I think that we all need to remember this.
Despair is for cowards, and we have too much work to do, and too much responsibilty to allow ourselves the luxury of despair (or cynicism, for that matter...)
As for the solutions, I maintain that our society is already looking for them AND finding them, which is not to say that we can sit back on our asses and watch the crisis go by. No one individual, be he Barack Obama, the director of the Fed, or the BCE, or whoever will bring this about.
The solutions are not to be found in the past, but we also need to remember that, since God has no grandsons, only sons, each new generation is faced with the task of finding out for itself what previous generations have learned.
Remember, no pessimism allowed.
I find this all very exciting.
We are truly living in interestiing times.
But then, I imagine that the Elizabethans must have felt like this too.

Debra said...

Cottonbloggin, I have never accepted the idea of being someone who had to adapt to change.
Not if I can bring about change myself.
Why adapt when you can initiate ?

And Hell, I don't agree with your analysis on money here. Whether money is fiat money, or based on a gold standard, this difference doesn't change the fact that it is still a symbolic system, thus arbitrary and based on social consensus. So, faith has always been at the base of the whole system (anything consensual HAS to repose on faith), but with fiat money it is more obvious, that's all.

Thai said...

"The absolute worst thing that we can... do in this situation is to despair"

Thanks for the concern but fear not, I am not in despair. As I think I have said in the past "In the end, you have to chose sides in life".

As anon righfully reminds "We are all nihilists here of our own device".


But I am saying we shouldn't kid ourselves either. It will be a game of musical chairs in the end and someone or something is going to lose out in whatever solution we chose.

I tend to think those who don't want to work will need to 'pick it up' a little more ;-)

We'll see which side wins

Anonymous said...

Étienne de La Boétie has been best remembered as the great and close friend of the eminent essayist Michel de Montaigne, in one of history's most notable friendships. But he would be better remembered, as some historians have come to recognize, as one of the seminal political philosophers, not only as a founder of modern political philosophy in France but also for the timeless relevance of many of his theoretical insights. La Boétie's great contribution to political thought was written while he was a law student at the University of Orléans, where he imbibed the spirit of free inquiry that prevailed there. In this period of questing and religious ferment, the University of Orléans was a noted center of free and untrammeled discussion. La Boétie's main teacher there was the fiery Anne du Bourg, later to become a Huguenot martyr, and burned at the stake for heresy in 1559. Du Bourg was not yet a Protestant, but was already tending in that direction, and it was no accident that this University was later to become a center of Calvinism, nor that some of La Boétie's fellow students were to become Huguenot leaders.
Étienne de la Boétie was born in Sarlat, in the Périgord region of southwest France, in 1530, to an aristocratic family. His father was a royal official of the Périgord region and his mother was the sister of the president of the Bordeaux Parlement (assembly of lawyers). Orphaned at an early age, he was brought up by his uncle and namesake, the curate of Bouilbonnas, and received his law degree from the University of Orléans in 1553. His great and precocious ability earned La Boétie a royal appointment to the Bordeaux Parlement the following year, despite his being under the minimum age. There he pursued a distinguished career as judge and diplomatic negotiator until his untimely death in 1563, at the age of thirty-two.
Career bound to the emoluments of the status quo. To divorce theory from practice it permitted him to be sincerely radical in the abstract while continuing to be conservative in the concrete. His almost inevitable shift of interest from the abstract to concrete problems in his busy career thereby caused his early radicalism to drop swiftly from sight as if it had never existed. Also we understand the way and our advocate which was his also, so other commentary is to ideological bent for interest of fact that the act of submission includes the conveyance that what is social common good and not the proper bent of mind since we must remind ourselves inside as not to be perceived to even forward instruction that it is not the most important things in our life which is willing participation of the current State, but we are hidebound to our needs of the community even if accepted or not.
To step away is not negligence for penance unless we know we stayed to long, and of course context is contract to a framework of reason. Longer term instruction to shake off the dust on our sandals and understand what is in regard to there condition in the sense so that yes, more time may be gauged as his view and never in our view of consideration. Regard to remind only for the state of there conscience is not ours. It is hard to think of anyone having such unexamined faith in government today. Laissez faire means: Let the common man choose and act; do not force him to yield to a dictator.
In such an age as ours, thinkers like Étienne de La Boétie have become far more relevant, far more genuinely modern, than they have been for over a century. Later it was first published, albeit anonymously and incompletely, in the radical Huguenot pamphlet, Reveille-Matin des François (1574), probably written by Nicholas Barnaud with the collaboration of Theodore Beza. *1 The full text with the author's name appeared for the first time two years later, in a collection of radical Huguenot essays compiled by a Calvinist minister at Geneva, Simon Goulard.

Writes Harold Laski, "avowed and academic republicanism was meat too strong for the digestion of the time.

That any State, no matter how ruthless and despotic, rests in the long run on the consent of the majority of the public, has not yet been absorbed into the consciousness of intellectuals opposed to State despotism. Notice, for example, how many anti-Communists write about Communist rule as if it were solely terror imposed from above on the angry and discontented masses. Many of the errors of American foreign policy have stemmed from the idea that the majority of the population of a country can never accept and believe in Communist ideas, which must therefore be imposed by either a small clique or by outside agents from existing Communist countries. In modern political thought, only the free-market economist Ludwig von Mises has sufficiently stressed the fact that all governments must rest on majority consent.
Lysander Spooner, writing over four hundred years after La Boétie, propounded the similar view that the supporters of government consisted largely of "dupes" and "knaves":
The ostensible supporters of the Constitution, like the ostensible supporters of most other governments, are made up of three classes, viz.: 1. Knaves, a numerous and active class, who see in the government an instrument which they can use for their own aggrandizement or wealth. 2. Dupes – a large class, no doubt – each of whom, because he is allowed one voice out of millions in deciding what he may do with his own person and his own property, and because he is permitted to have the same voice in robbing, enslaving, and murdering others, that others have in robbing, enslaving, and murdering himself, is stupid enough to imagine that he is a "free man," a "sovereign"; that this is a "free government"; "a government of equal rights," "the best government on earth," and such like absurdities. 3. A class who have some appreciation of the evils of government, but either do not see how to get rid of them, or do not choose to so far sacrifice their private interests as to give themselves seriously and earnestly to the work of making a change.[
David Hume independently discovered this principle two centuries later, and phrased it with his usual succinctness and clarity:
Nothing appears more surprising to those who consider human affairs with a philosophical eye, than the easiness with which the many are governed by the few; and the implicit submission, with which men resign their own sentiments and passions to those of their rulers. When we enquire by what means this wonder is effected, we shall find, that, as Force is always on the side of the governed, the governors have nothing to support them but opinion. It is therefore, on opinion only that government is founded; and this maxim extends to the most despotic and military governments, as well as to the most free and most popular.

*2 Tolstoy, indeed, in setting forth his doctrine of non-violent anarchism, used a lengthy passage from the Discourse as the focal point for the development of his argument. In addition, Gustav Landauer, the leading German anarchist of the early twentieth century, after becoming converted to a pacifist approach, made a rousing summary of La Boétie's Discourse of Voluntary Servitude the central core of his anarchist work, Die Revolution (1919).
*3 A leading Dutch pacifist-anarchist of the twentieth century, Barthelemy de Ligt, not only devoted several pages of his Conquest of Violence to discussion and praise of La Boétie's Discourse; he also translated it into Dutch in 1933.[20]
*1 See J.H.M. Salmon, The French Religious Wars in English Political Thought (Oxford: Clarendon Press, 1959), p. 19n.
*2 Thus, Tolstoy writes:
The situation of the oppressed should not be compared to the constraint used directly by the stronger on the weaker, or by a greater number on a smaller. Here, indeed it is the minority who oppress the majority, thanks to a lie established ages ago by clever people, in virtue of which men despoil each other....
Then, after a long quote from La Boétie, Tolstoy concludes,
It would seem that the workers, not gaining any advantage from the restraint that is exercised on them, should at last realize the lie in which they are living and free themselves in the simplest and easiest way: by abstaining from taking part in the violence that is only possible with their co-operation.
Leo Tolstoy, The Law of Love and the Law of Violence (New York: Rudolph Field, 1948), pp. 42–45.
Furthermore, Tolstoy's Letter to a Hindu, which played a central role in shaping Ghandi's thinking toward mass non-violent action, was heavily influenced by La Boétie. See Bartelemy de Ligt, The Conquest of Violence (New York, E.P. Dutton & Co., 1938), pp. 105–6.
Etienne de La Boétie, Vrijwillige Slavernij (The Hague, 1933, edited by Bart. de Ligt). Cited in Bart. de Ligt, op. cit., p. 289. Also see ibid., pp. 104–6. On Landauer, see ibid., p. 106, and George Woodcock, Anarchism (Cleveland, Ohio: World Pub. Co., 1962), p. 432. Murray N. Rothbard (1926-1995)

Yophat said...

But I am saying we shouldn't kid ourselves either. It will be a game of musical chairs in the end and someone or something is going to lose out in whatever solution we chose.

Locked 'n Loaded!

Yophat said...

Anonymous - interesting how the 3rd class of constitutionalists doesn't have a name.

Anyways - pure rubbish!

Anonymous said...

The next big crisis will be shortages in liquid transport fuels (95% of which is oil). Of course, the medium and longer term crisis as you mention are the environment and other resource depletion. Unfortunately, humans are so clever that they don't react until crap hits the fan.

Acrimonious said...

As long as we have NIMBY's like Teddy Kennedy vs. wind turbines and the myopic nihilists opposing nuclear power (it still cannot power a car-and who wants an electric NASCAR) we will be irrevocably tied to petrochemicals. And speaking of petrochemicals and to those against them, try doing without plastics hahaha.

Thai said...

I had to smile as I read the following quote from Jeremy Grantham

Interviewer's question: Do you think we will learn anything from all of this turmoil?

Grantham's response: We will learn an enormous amount in a very short time, quite a bit in the medium term and absolutely nothing in the long term. That would be the historical precedent.

@ Anon, quoting David Hume, says "Nothing appears more surprising to those who consider human affairs with a philosophical eye, than the easiness with which the many are governed by the few; and the implicit submission, with which men resign their own sentiments and passions to those of their rulers."

Alas my hero and fellow Scotsman (at least ancestrally) Hume did not understand the language of fractals back then as we understand it today, else he would have know about Kleiber's law. The biologically invariant rule governing complexity, hierarchy and energy consumption which our hospitable proprietor HELLASIOUS periodically reminds us of, even if HELL does not realize this himself, being that biology was his worst subject and all ;-)

And I think you are being mean Yophat as it is not rubbish. It may not be useful but I certainly see his (her?) point.

@ Acrimonious who said "... myopic nihilists opposing nuclear power". Is nihilism the theme of the day or what?

I might suggest to those who propose we widely deploy nuclear power that doing so before we solve the waste disposal issues might require its own defense of nihilism?

We certainly can live without 5000 sq. ft. homes in suburbia (on 2.5 acres), we certainly can live without Hummer H-3s (well maybe some people can't), but we cannot, live with nuclear waste leaking all over our back yard. And since most of the pro-nuclear lobby seems aligned with the very groups that want to kill the very basic science research that might solve the waste disposal issues (being that it is "government" spending and therefore wasteful), I am not sure how to quell this tempest in a teapot.

And on a less philosophical note, I thought you might enjoy the following link a friend sent

Cottonbloggin said...


"I have never accepted the idea of being someone who had to adapt to change.
Not if I can bring about change myself.
Why adapt when you can initiate ?"

I both agree and disagree with you at the same time. The french sociologist Pierre Bordieu seems to have the solution. He sees people being influenced by society (habitus) and society being influenced by individuals (field). They are a pair of mutually reinforcing feedback loops.


Yes. You can influence the world around you. But. In order for your change to be influencial, others must adapt to it.

I suppose it's all a judgement call on where you perceive yourself to be.

and I like where you perceive yourself to be. I'm there with you, and I believe I have a solution. It is a pragmatic metaphysics based on science but ending in ethics.

I just need time to finish writing it. And I'm excited.

fajensen said...

Why not use the same co-op model they use in the Scandinavian countries and Japan? You can buy shares of stock in StatOil Hydro and Vestas on the stock market.

Vestas Wind Systems (VWS) is a privately held business, it may well have the same problem as anyone else how grew their turnover on leverage!

Look how the share price moves - lots of amateurs trading the stock. It runs on pure emotion, totally disconnected from any business reality.

Beware of the majority government shareholders - they WILL screw you!

Recently the Danish government tried to float DONG (danish oil and natural gas).

The deal failed because nobody wanted to buy part of(!) a debt-bloated turd with declining reserves (the gubmint started pumping oil out real fast from 2003 to make the growth figures look good; before they just tracked Danish consumption) and not a penny paid off on the debt they took on in 1980's when DONG was created to build the Danish natural gas distribution net!!

Debra said...

Just a practical question...
How do you tell one "anonymous" from another on this blog ?
Just curious...

Debra said...

Quick grammar primer, for those out there (HA) who are once again becoming UNREADABLE. (Yes, language is a symbolic system too, and there is also a consensual base for it).
There are a certain number of homonyms (words or expressions that sound the same) in English whose SPELLING is nevertheless different.
1) THEIR : possessive pronoun, always comes before a noun, (object or idea). For the Frenchies, and others interested it is translated as LEUR/LEURS.
2) THERE : much more problematic, as it can refer to a place, the place of an object or idea (Là, or Là-bas), but also assume the role of an impersonal subject in a sentence : THERE IS, THERE ARE, elided to form THERE'RE (il y a). (Quick reminder, an apostrophe is a SIGN, an indication that a letter has been dropped, that's all. Hence THERE'RE drops the letter "a" to form the contraction.
And finally the contraction THEY'RE, which sounds almost the same : THEY is a pronominal subject, so must be followed by a verb, my friends, in one form or another, and pretty quickly too. The apostrophe drops the "a" again. For the Frenchies, this is ILS/ELLES SONT.
Amazing how things become so much clearer when you translate from one language to another.
Recommendation : the book "Eats, shoots, and leaves" for more info of this type.

On a totally different note : D-day minus one and counting for the massive French demonstration tomorrow.
The French are still, more than two hundred years after the LAST revolution (which was about a hell of a lot more than taxation without representation, my friends) VERY MUCH AWARE of just HOW MUCH governments depend on the consent and cooperation of the people who are governed.
The French government is VERY APPREHENSIVE about tomorrow. We shall see...

Edwardo said...

I think this scholarly article is pertinent.

Yau-ming's blog!! said...

What about forcing all companies to pay their top managers the bulk of their salaries in terms of non-saleable preference shares. Meaning they get the bulk of their annual pay based on the profits of the company. If the company goes bust - the managers go down with the ship and lose all their entitlements. The problem is that companies are paying top cash for these buggers - and if you are getting a salary of 10 million dollars a year - it won't hurt you if the company goes bust. The current system focuses too much attention on the short-term. It would even encourage them to collude to artificially boost the company's profits so that they can walk away with Golden Midas handshakes at the end of their short tenure. And why would they care? They got the Cash.

If you pay the managers in these special preference shares - you force ALL of them to take a special interest in the long term viability of the company.

mak said...

Keep destroying that credit card balance. Once it's gone, you will have a lot more freedom in your budget.

Debt Consolidation Solutions, Settlement, Debt Consolidation,
Debt Consolidation Solutions, Settlement, Debt Consolidation