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open thread June 7-13

by on June 7, 2010

Let’s go.

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10 Comments
  1. I spent a lot of time over the weekend in discussions with various kinds of people in Sonoma county: artists, film makers, physicians and merchants.. The general mood is really distressed. The gulf on top of the economy intermixed with the wars..

    But the sense that things have to change is powerful.

  2. There is some concern that the bottom surrounding the well might be the source of new leaks outside the pipe if the pipe is further compromised. The surround is very lose silt and below that lots of salt deposits. A hemorrhage could break out horizontally. The problem with this (and it seems to be the reason BP didn’t stress the pipe trying to close it) is that it would vastly complicate the possibilities of closing the leaks.

    The cost of the gulf, in lost business, jobs, and infrastructures is huge. Can society pay for it, such as relocating the workers and their families (to where?). Tainter’s Collapse of Complex Societies describes this situation of increasing maintenance costs as society gets larger and older.

  3. Meanwhile there is a general consensus that the legislation on banking does not deal with the underlying problems. I find it fascinating to read the literature on the banaking crisis, as it is quite good, and shows the difficulty on getting action where only a very small wealthy minority is opposed. I think looking at finance reform for clues about “climate” might go is a good strategy.

    For example a recent article by Volker sounds familiar

    quotes from http://www.nybooks.com/articles/archives/2010/jun/24/time-we-have-growing-short/?pagination=false>

    Some five years ago, at a conference of the Stanford Institute for Economic Policy Research, I lamented that “the growing imbalances, disequilibria, risks” were giving rise to “circumstances as dangerous and intractable” as any I could recall—intractable not just because of the combination of complicated issues, but because there seemed to be “so little willingness or capacity to do much about it.”

    We are left with some very large questions: questions of understanding what happened, questions of what to do about it, and ultimately, questions of political possibilities. The way those questions are answered will determine whether, in the end, the financial crisis has, in fact, forced the changes in thinking and in policies needed to restore a well-functioning financial system and better-balanced growing economies.

    And of course for MAHB the painful lack of closure in

    The way those questions are answered will determine whether, in the end, the financial crisis has, in fact, forced the changes in thinking and in policies needed to restore a well-functioning financial system and better-balanced growing economies.

    That is, a GROWing economy.

    One basic flaw running through much of the recent financial innovation is that thinking embedded in mathematics and physics could be directly adapted to markets. A search for repetitive patterns of behavior and computations of normal distribution curves are a big part of the physical sciences. However, financial markets are not driven by changes in natural forces but by human phenomena, with all their implications for herd behavior, for wide swings in emotion, and for political intervention and uncertainties.

    Stuff to learn. The equivalent is the overly technical approach avoiding he realities of blowback, apathy in the face of bad odds, and such. The following might work to a MAHB adantage

    Important questions about the governance of businesses and the relationships between principals and their agents are being reexamined. Most obviously and appropriately, the role of regulation and supervision, their necessity, their methods, and their difficulties are being reconsidered.

    but

    The fact is that the exercise of effective regulatory and supervisory authority is always difficult on a national level, and those difficulties are multiplied when dozens of countries are involved. There are large political constraints and industry pressure. Consider the ten-year effort by the G10’s Basel Committee on Banking Supervision to coordinate capital requirements—completed just in time to be largely rendered moot by the financial crisis.

    He proposes

    To me, the lesson is clear. There are deep-seated structural issues that must be dealt with by legislation. Moreover, there should be common elements among nations hosting significant international financial markets and institutions.

    But then, an obvious parallel

    The central issue with which we have been grappling is the doctrine of “too big to fail.” Its corollary is so-called moral hazard: the sense that an institution—its creditors, its management, even its stockholders—will be inclined to tolerate highly aggressive risk in the expectation that it will be rescued from possible failure by official financial support.

    in that many assume that the world economy is too big to fail. and take on the risk because of TINA, the old shell slogan from Margaret Thatcher, “There is no alternative.”

    And, is there a paralel here?

    If we need any further illustration of the potential threats to our own economy from uncontrolled borrowing, we have only to look to the struggle to maintain the common European currency, to rebalance the European economy, and to sustain the political cohesion of Europe. Amounts approaching a trillion dollars have been marshaled from national and international resources to deal with those challenges. Financing can buy time, but not indefinite time. The underlying hard fiscal and economic adjustments are necessary.

    That is, maintaining he currency and maintaining the energy levels, might have structures and dynamics in common. He ends with

    Restoring our fiscal position, dealing with Social Security and health care obligations in a responsible way, sorting out a reasonable approach toward limiting carbon omissions, and producing domestic energy without unacceptable environmental risks all take time. We’d better get started. That will require a greater sense of common purpose and political consensus than has been evident in Washington or the country at large.

  4. example

    “The idea that BP might one day file for bankruptcy, particularly as part of a merger that would enable it to cordon off its liabilities from the spill, is starting to percolate on Wall Street. Bankers and lawyers are already sizing up potential deals (and counting their potential fees).”

    http://www.nytimes.com/2010/06/08/business/08sorkin.html

    shows how any change that requires a shift of assets and opportunities will be gamed from start to .. the next arbitrage opportunity.

  5. Is this significant?

    In St. Pete Beach on Monday, Gov. Charlie Crist sympathized with local business owners who complained that they’re are already registering losses.
    The governor said it was “pretty definite” he would call for a legislative special session as early as July to consider a constitutional amendment that would ban offshore drilling off Florida, coupled with the possibility of looking at renewable energy options, in an effort to move toward “more green” technologies.

    Read more: http://www.miamiherald.com/2010/06/07/1668694_p2/spreading-oil-spill-changes-response.html#ixzz0qEeeNxKn

  6. And the counter dynamic, which is that better econmy means worse climate. But the writer is without irony.

    Can Emerging Markets Save the World Economy?, by Mohamed A. El-Erian and Michael Spence, Commentary, Project Syndicate: Over the past two years, industrial countries have experienced bouts of severe financial instability. Currently, they are wrestling with widening sovereign-debt problems and high unemployment. Yet emerging economies, once considered much more vulnerable, have been remarkably resilient. With growth returning to pre-2008 breakout levels, the performance of China, India, and Brazil is an important engine of expansion for today’s global economy. …

    http://economistsview.typepad.com/economistsview/2010/06/can-emerging-markets-save-the-world-economy.html

  7. From http://www.theoildrum.com/node/6556

    The EIA, the statistics arm of the US Department of Energy, recently released its International Energy Outlook (IEO) for 2010. This is an important document for forecasters, as it represents the EIA’s integrated view of the global energy markets in the years to come and contains a long term forecast on the range of energy sources and CO2. Like it or hate it, the IEO is a touchstone for the energy industry and is treated as the authoritative government forecast in the press and in capital raising documents like prospectuses. It influences policy-makers, the media, public opinion and investors. What it says matters

    And what does it say?

    That peak oil is all but on us. And that’s new.

    But now look at (wall street journal)

    Gulf Coast residents, political leaders and industry officials said delays in releasing the new rules, along with the administration’s six-month halt on deepwater drilling—both issued amid public pressure—threatened thousands of jobs.

    http://online.wsj.com/article/SB10001424052748703303904575292210472764880.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsForth

    where the pressure is on for jobs, and Obama is responsive. This says that economy and jobs trump ecological disaster risk. Tougher standards (administered by who?) and maintaining jobs and output. This is the kind of intense maneuver that will hamper sustainability efforts, and set the tactical landscape.

  8. check out, new site from Gore/ Climate project US
    http://theclimateprojectus.org/index.php

    There has never been a better time than now for making the changes we need to address the climate crisis. This is truly a new era of hope and opportunity for our cause.

    The Climate Project welcomes individuals to contribute their solutions, ideas, words, and images to help solve the climate crisis. At its discretion, TCP will post certain suggestions in the Ideas Gallery.

    The site also has a good news summary page with links
    http://theclimateprojectus.org/climatenews.php

  9. What is the (potential) difference with MAHB?

  10. This is a test of the system.

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