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Panning for Gold

According to my sister’s book (yes, that was a plug), the 200,000 tonnes of rock that Kalgoorie’s Super Pit blows up every day yields three or four bars of gold. As each bar weighs 12.4 kg, that’s a yield of about 0.00002%. The Great Confusicator’s ratio of information to words must be about the same.

Trump’s recent AP interview is typical (and a very funny account of reading it is here). Set aside the self-aggrandizement, blaming Obama for everything, and the rambling asides about how he, alone of the previous five Republican presidents, beat the electoral college system (which is a, er, pre-requisite to becoming president), and what’s left are stock phrases – “Great guy, done some wonderful stuff” – “We’re gonna have a plan and it’s gonna be a great plan.” As we never get to learn what wonderful stuff the great guy has done, or what the plan is, the yield of information content thus far is zero.

However, buried in the drivel, this interview does contains two nuggets.

The first is the slow dawning on Trump that the US government “is thousands of times bigger than the biggest company in the world.” Well, duh-uh. As it happens, his numbers are wrong: at UDS3.46tn / year, the federal government is about one thousand times as big as the total probable worth of Trump’s own company, but it’s only about ten times as large as Exxon. And his related statement that the Department of Defense is the second-largest is plain bollocks: the economies of China, Japan, Britain, France, Germany, Russia, California and India are all larger than the DoD.

The second nugget is “you know the human life that’s involved.” We do. He apparently is new to the concept. More telling yet: “Well in business, you don’t necessarily need heart, whereas here, almost everything affects people. … Here, everything, pretty much everything you do in government, involves heart, whereas in business, most things don’t involve heart.” Having had this epiphany, he goes on: “In fact, in business you’re actually better off without it.”

I know of a large number of businesses that take a different view, but that single statement is probably the clearest summing up of Trump’s own way of doing business.

Now, to be fair, our new-found convert to the strange concept of “heart” goes on to say “You have to love people. And if you love people, such a big responsibility…” But do you notice something about the locution? Trump doesn’t say “I love people.” He doesn’t say “I have heart.” No, he says “You have to love…”, “you know that humans life’s involved,” “everything you do in government.”

So heart, after all, is for others, not for President Trump.

I’m sorry, delicate reader, but is more proof needed that President Trump’s not only an idiot, but also a cunt of the first order?

Another Promise Kept

So tweeted, according to the NY Times, Donald Trump Jr as the Motherfucker Of All Bombs was dropped – as if a single bomb and 40 casualties will end the quagmire in Afghanistan or ISIS, and as if 59 Tomohawk missiles specifically targeted at nothing will solve Syria’s intractable problems.

But the President, in his own eyes and I suppose those his supporters, has been keeping his promises. He’s put the Muslim Ban in place (that’s 1) and, when Gorsuch (2) is sworn in, will no doubt take it to the Supreme Court where, if the Republican majority votes with its politics instead of with the law it will be upheld.

Jeff Sessions is ploughing ahead, deporting illegal immigrants (3), Scott Priutt is dismembering the EPA (4), and although TrumpCare was an embarrassment, it meant a lot more to house Republicans than to Trump.

Tax reform is next. As Trump doesn’t do details, he’ll probably be able to claim success no matter what the house agrees, so let’s give him that one (5). And, at least in his own mind and that of his supporters, the Syrian and Afghanistan pyrotechnics will probably count as having made America Great (6). With the military games exercises happening off South Korea this week very likely to end up in a skirmish, which no one involved has the diplomatic skills to prevent developing into a war, that’ll be more Greatness (6), especially as the only outcome if China and Japan get involved is nuclear, thus ending the competition from China (7).

And, as I live in Hong Kong, I’ll be nuked with everyone else on this side of the planet, so that’s one fewer pesky blogger (8 – well, 7.0000000001).

It is difficult to be optimistic under such circumstances. But I am. Short of an all-out nuclear war – which is on the cards – all this exposes what we knew already, which is that the political system in America, while not quite broken, is in need of some serious running repairs. Perhaps a second constitutional congress is overdue?

But I am ultimately optimistic because Imperium Americum, which stopped being a force for good some time back, is coming to a rapid end. That creates a space for a new, and I hope better, world.

Faster than I Thought

You saw it here first a few posts ago, when I predicted that Trump’s madness, folly and incompetence would soon paint his administration into a corner from which war was the only escape. I didn’t think he’d manage it this fast. (However, if you scroll down today’s NY Times here and here and here and here – and that’s only today – which show an administration in tail-spin, perhaps it’s not surprising.)

Let me be clear: chemical weapons are horrid, and Assad deserves a special place in hell. But – after taking almost a week for Trump to move from indifference to moral outrage when the rest of us took about a micro-second – is a sudden, trigger-happy launch of ballistics the appropriate response? Would a phone-call to Trump’s and Assad’s mutual sponsor, Putin, not be a better start? Is there an endgame here, a vision of a Middle East after the Syrian civil war has ended? Is there a path towards peace in the region, a peace that includes Russia, Iran, Iraq and Israel as well as the umpteen factions that vie for political supremacy? Will bombing a few of Assad’s targets weaken his regime thus strengthening ISIS?

I do not know the answer to any of these questions. But, and although it’s early in the piece, there is no evidence that Trump or his administration do either.

The path to rapid escalation and ultimate nuclear conflict is very clear. The path to peace is not. The former has just taken a big step forwards.

ExecuTweeting the Climate

The climate…

Trump said he was going to do it; he did it. As with nearly all the other ExecuTweet orders, this one will be a dud. The reason coal stays in the West Virginian ground is not because of all those environmental regulations, but because it’s too expensive to get out. Even if they can dig it out economically, lift the environmental regulations and the people who suffer ill health because they live next to coal-powered electricity plants will sue them, so it’s hardly going to provide certainty for that end of the business, either.

Oh, and “clean coal”. Yes, you can scrub the particulates (soot), but

C + O2 = CO2

is a fact from very elementary chemistry. It doesn’t matter how few particulates coal produces, what isn’t soot is carbon dioxide.

What’s sad about this is that the interesting and exciting challenge is not how to make coal (and oil, for that matter) pay again, but how to harness all that free energy that pours in, day after day, from the sun. That’s an area where there are lots of jobs, lots of innovation, and lots of ways of creating wealth. And I guess Trump has just opened all those opportunities to the rest of the world.

So, thank you President Trump.

Curry Lamb in Hong Kong

This morning, 777 of Carrie Lam’s best friends voted for her to be Hong Kong’s Chief Executive.

The pronunciation of the word “7” in Cantonese is “chat,” but is also a contraction of “chow height” which is the foul language for stinky (“chow”) female genitalia (“height”). Not a good omen, and the selection committee’s subliminal message is plain for all to see (by the way, I don’t follow any particular system of transliterating Cantonese, I choose whichever seems easiest for an English reader. Chau haait in Sydney Lau system for the purist.)

Curry Lamb started her campaign by receiving a message from God, who told her to “run” for the post. The last time I remember God intervening in politics was when George W. Bush took a walk in the Rose Garden and God told him to invade Iraq – a war that achieved nothing positive, resulted in well over a quarter of a million deaths, and created the circumstances for ISIS/Daesh to flourish.

So, the omens are not propitious.

Hong Kong is a society in which almost no one under the age of 35 who was born here will ever be able to afford a property in the town of their birth. The Chinese Communist Party are intent on making Hong Kong just another city in China, and most Hong Kong people – especially the young –  want Hong Kong to remain distinctive. Although the British colonial government favoured vested interests, they at least kept them in check; today’s Hong Kong is run by vested interests and for them.

Into this divided society, 777 of Curry’s best friends – or 0.01% of the population – foist on us a person who is clueless about normal life, void of original ideas, and in a fundamental way, creepy. I say that not out of abuse, but because someone who claims to be deeply Christian, but who is not only willing to engage with, but embraces an atheist regime that suppresses religion and religiosity, is a creep.

Hong Kong’s property market has only ever crashed in response to non-economic factors: the 1967 riots, the 1983 joint declaration concerns, the 1989 Tiananmen Massacre, the 1997 Asian Financial Crisis followed by a final kick in the teeth from SARS. It’s been on a bull run ever since. I am not alone in being pessimistic about the world economy – listen to this (although it’s rather repetitive and turns out to be a sales pitch) – and I can’t think of a worse person to have at the helm if the worst happens. Unfortunately, it is we Hong Kongers, not Beijing’s masters, who will pay the price.

 

Fact Free Politics

The question is: Can we have a healthy policy without facts?

Truth is scarce and difficult, which is why we value it above lies, which are abundant and easy. In the past few weeks, the administration of the US has been promulgating lies at an unprecedented rate. It takes credit for the recent economic performance despite the fact that Wall St. is far more driven by quarterly returns, and that the current round of quarterly returns are for Q4 2016 which is when Obama was president. It takes credit for new jobs, when none of the policies it has attempted to put in place has had time to take effect (it will be at least a year before they do). It has denied that carbon dioxide is a greenhouse gas when it’s been known for over a century that it is; it has alleged wire-tapping… The list goes on.

Politicians lie all the time. But there is a sense in which this is defensible. We don’t only elect politicians to tell us the way things are – we pay scientists for that – we also elect them to tell us the way things will be: how our society will look a few years from now. And although we all make statements about the future that turn out to be false, or prophesies that turn out to be self-fulfilling, lies concern facts and facts are in the now.

But facts are also about the most likely future state of affairs. The current rate of unemployment in America is about 4.7%. We can say with a high degree of certainty that it won’t be 0% within one month, and that it won’t be 20%. We can project tax revenues and spending. And we can predict – albeit imperfectly and within a wide range of error – mortality rates, birth rates, and the climate.

And here is where Trump is at best lying through his teeth and at worst willfully ignorant of the facts. The future that we elect politicians to give us is constrained by the facts. There is no future in my lifespan where I can travel interstellar distances: it’s the speed of light. There is no future where poverty disappears: it’s part of the human condition. There is no future in which there are no terrorists and no acts of random violence: the best we can do is minimize these acts and minimize their impact.

Or let’s take the favorite whipping boy of all: the climate. Trump, Perry and the ghastly Scott Priutt can deny the reality of climate change all they like, but they cannot change the fact that, by powering our lives with yesterday’s sunshine in the form of hydrocarbons instead of harnessing today’s actual sunshine, we’re boiling the only home we have. They cannot change the fact that coal is no longer mined not because of environmental legislation, but because the cheap stuff already been dug up and what’s left is not economically viable. They cannot change the fact that renewable sources are rapidly closing in on cost parity with hydrocarbons.

Perhaps the more interesting question is why these fantasies gain such widespread currency. The internet is not the only cause, but it has a lot to answer for. I have a friend who is well-educated, very bright, and utterly determined that hydrocarbons are good. He has formed this belief by obtaining a google PhD in climate science – meaning that he spends a few minutes a week on google to find articles by like-minded others.

What he seems blissfully immune to is that he is directed to these like-minded sites by Search Engine Optimisation. This technology is a euphemism for saying that the author of the content pays the search engine (google, bing, whatever) to make sure that her content comes up on the first page of any relevant search.

SOE is a gift to well-funded liars. ExxonMobile can afford SOE to direct my friend to a whole plethora of sites that promote lies; real climate scientists aren’t allowed to use their money this way. The same is true of tobacco companies, and a whole bunch of other vested interests.

The result is that truth is severely under-represented on the web. This is exacerbated by the fact that very few published scientific papers are available on the web because nearly all papers are published in expensive and arcane journals. (There’s a certain irony here as the huge sums being used to do real science are not being used to make it available, but that the huge sums being spent on lies are snuffing out the real science.)

We get the government we deserve and, if we are so mindlessly uncritical of the lies being served up by vested interests in the clothing of facts, there is a sense in which we deserve the result.

But nor does the over-polite nature of public discourse help. It is obvious out that Trump lied about the wire-tapping. But not a single public figure has used the word. It’s described as an unsubstantiated fact, not a lie. And until we as voters are willing to punish our politicians for lying, and for allowing others to lie, we’ll vote for fantasy futures while our societies turn to actual hells.

Entertainment

A friend of mine who’s a journalist hoped Trump would get in because things had been dull under Obama – and that prompted a slow epiphany.

I’ve said in a previous post that it was about change, that Obama delivered steady growth, blah blah blah, but didn’t make any systemic changes; that there seems to be something I’m missing, etc. But, although I didn’t realize it when it was said, my journalist friend nailed it.

One of my great complaints about Obama during his presidency was that he consistently refused to beat his own drum. He got his country out of two unwinnable wars – not a word. He pulled the economy back from the brink – not a squeak. He created ten  million jobs – not so much as a high-five. And he got Obamacare through without so much as a smile. I’m sorry; my friend’s right. Obama was dull. And at least he was a great orator; Clinton offered the dullness without even the oratory. (See Paul Krugman today on the facts, by the way.)

This perhaps is why his record is being so swiftly ripped to shreds by Trump. Forget about the fact that Trump doesn’t blush to take credit for other’s achievements, doesn’t flinch to distract from his own shortcomings with bare-faced lies, and whose gift for showmanship is every bit as effective to his caucus as Obama’s rhetoric was to his. (I mean, remember that absurd photo of supposed business leaders in the Oval Office, some of whom were wearing construction helmets? Bob the fucking Builder’s going to “restore” America’s “greatness”? How stupid do you have to be to believe that that wasn’t staged?) Forget all that: Obama said almost nothing to take credit for his achievements, and that makes it oh so easy for those achievements to be dismissed.

I suppose I should lighten up. After all, despite the hundreds of thousands who’ll fall off health insurance when Obamacare is repealed later this week of whom some will die prematurely because of it, despite the hundreds of thousands of unwanted pregnancies and backstreet abortions that the destruction of Planned Parenthood will cause, despite the censorship of unpalatable scientific results such as Climate Science with the Secret Science Reform Act and the millions who will suffer as our planet warms even faster than it already is, it’s all just theatre, and those people are not victims but CGI animations, expendable so long as we’re all having fun.

And here we come back to the fourth pillar. Yes, Obama was boring. But Trump didn’t run against Obama, he ran against Clinton (and lost, by three million votes). Yet even the supposedly left-wing press published every ludicrous statement, every obnoxious lie, that he made. And this continues today. The “wire-tapping,” the five million “fake votes” are reported not as if they are fun, but as if they are true. That’s because the public still believes that the job of journalists is to serve up checked facts, not entertainment.

Or perhaps it’s because the future’s so dismal that we prefer entertainment to facts.

Toothache

A few years ago, I had double toothache. Within seven days, not one but both of my upper wisdom teeth became inflamed. Pulling the uppers ones was easy – they were dead anyway – but one of the opposing lower ones needed to be pulled too. It was a healthy tooth, and one of the roots was shaped like a fishhook. The X-ray didn’t show this so the dentist found out as he was going along. I have a very high metabolism, so the local anesthetics wore off very quickly. After four hours in the chair, all I wanted was an end to the pain.

It’s barely six weeks into the on-going agony of Trump. He’s killed US servicemen in a raid in Yemen that Obama avoided because… it would kill US servicemen to no purpose; he’s tried twice and will probably fail twice to get all Muslims banned; his Environmental Secretary has just decried that Carbon Dioxide is not a warming gas; it has only just come to Trump’s attention that one of his key advisers, Michael Flynn was a foreign agent; the repeal and replace programme being barged through Congress will defund Planned Parenthood, causing thousands of unwanted pregnancies, while dramatically cutting taxes for the rich and fucking over the poor; and Trump’s own active engagement with Russia is being forgotten under the unsubstantiated claims of wiretapping.

I said in my last post that some constitutional amendments are well overdue. Consider one to stop idiots voting. Americans will suffer first, but this administration’s only way of saving itself is war, and when they take on Iran – which they will – the rest of us will die too when the nukes start flying.

Trump for Change?

Here’s a thing. This link is a list of amendments made to the Constitution of the United States of America since it came into being.

In summary, the first ten and the twenty-seventh amendment were proposed on 25th September, 1789 and, with the exception of the 27th, passed on 15th December, 1791 (the twenty-seventh amendment was to do with congressional salaries, and took 202 years to pass). Two more amendments were passed in 1795 and 1804. There was then a break in constitutional fiddling until the Civil War, which resulted in the emancipation amendments (13th, 14th and 15th amendments), and thereafter a steady trickle of amendments until the civil rights movement of the 1960s.

Then: nothing. In half a century, nothing.

No amendment to limit congressional terms (the most senior eight senators came to office before the median-aged American was born).

No amendment to revoke the second amendment – which is responsible for far more deaths than terrorists – or at least reword the second to limit ownership of weapons. A private citizen has the constitutional right to own a nuke, for goodness’ sake.

No amendment to reform political financing. After the shameful Citizens United, money politics has gone into overdrive.

No amendment to create a right to a decent minimum standard of existence.

No amendment to require legislative clarity of purpose rather than the opaque appropriations bills that carry most of the legislative burden, yet bury important lawlets, most with no legislative history – a lobbyists dream. Which brings me to…

No amendment to limit or regulate access by lobbyists.

It’s as if the Constitution is now regarded as perfect and thus as inviolable as the stone tablets of Mount Sinai. But, unlike the Mosaic law, the Constitution is a human creation and its creators explicitly crafted it to be changed. In the past half century, it’s ossified.

So, Trump, Clinton, Warren, whoever: up to it?

Elective Plutocracies

It seems that I am missing the point.

When Obama came to power, he promised change. The kind of change Obama delivered was not the kind that his supporters thought he was going to deliver. Obama delivered Obamacare and steady progress on a number of mundane problems, but what his supporters wanted was to break the nexus of power between investment banks (“Wall St.”), politics and business.

This is a pretty big call. It’s not an overstatement to say that modern American capitalism not so much facilitated the development of the investment bank, as that investment banking was what enabled modern American capitalism. Here’s why.

The granddaddy of all investment bankers is J. Pierpont Morgan, and his biography (a good summary is here) is a list of one deal after another, and one company after another, that grew because J.P. Morgan arranged cheap debt. This led to a business environment that was not so much a free market as a patchwork of overlapping monopolies. These monopolies are the ones that to this day, so the story goes, pull the strings in Washington, both behind the scenes through lobbying and on-stage through corporate funding of candidates and parties.

To unpack this…

In the old days, the only way to raise money for a business venture was through shares. Those who wanted to put some money at risk for a higher return chose a company, put their money in, and watched as the company went broke, floundered or, in rare cases, succeeded. Typical were the East India Companies (British, Dutch, etc.), where investors invested in individual trading expeditions (see The Honourable Company for more). The investor’s capital was used to purchase the raw goods that were sent East, and they received their profits on the sale of the goods that arrived back in the West. If the ship sunk, the goods were stolen by pirates, or no one bought them, hard luck.

Fast forward to the railways boom in England in the nineteenth century, and the same thing was going on. Investors had to front pretty much the entire construction cost of the railway, and received their money back in the form of dividends if the railway succeeded, or not if it went broke. But there was a difference – whereas in the case of the East India Companies, the investor got a one-shot payout, in the case of the railways, the investors got a recurring income.

The trouble with dividends is that the entrepreneurs who start the companies don’t get anything special. I put in $1, and get a few cents a year, while you put in $19 and get proportionately more cents per year. But I’m the one putting his life on the line, not you. Why should you get proportionately the same? And how come I’m left with a crappy 5% of the company?

Whence came the age of the capitalist robber baron. I have a business idea; I invest $1, I persuade other shareholders to invest $4, and I go to a bank and borrow the other $15. You and I both get better returns, but I now control 20% of the company. That’s enough to shaft most other shareholders. 5% isn’t.

Welcome to modern business capitalism – a misnomer. What we had by the early 20th century in the U.S. was not free-market capitalism, but crony debtism. And thus, albeit with far more sophistication, it remains.

This raises two points: the first is whether there is anything anyone can do about it, and the second is whether Trump is the person to do whatever can be done.

I’m going to set debt aside as a problem. Managing the levels of debt in an economy is something for economists and technocrats, and I’m neither. I’ll just assume a technical solution is broadly available. The problem we can address with politics is cronyism.

Many investment bankers will poo-poo the charge of cronyism, and point out that banks compete for business and that anti-trust laws prevent monopolies, etc. Yes, sometimes, but that’s not the charge. The charge is that one can name the top investment banks on the fingers of both hands, that the people who run them are on a merry-go-round, and that they carve up the world’s money markets in a cartel-monopolistic way.

This rings true. At the people level, getting into investment banking is very difficult but, once you’re in, you’re in Fat City for as long as you choose to be. With barely a dozen investment banks – Goldman Sachs, DeutscheBank, UBS, Credit Suisse, BoA Merrill Lynch, JP Morgan Chase, Nomura, Societe Generale, MacQuarries, RBS, Barclays Capital – dominating the scene, it’s lunacy to think that there isn’t a “gentleman’s understanding” of where they compete and where they don’t. Hence the cartel-monopoly on debt, and hence the control on the world’s financial system.

As to anti-trust laws, they do cover collusion and price-fixing, but again, that misses the point. The point is that the barriers to entry in this field are too huge for other entrants to come in. They all have similar cost-structures, price debt (and other services) the same way, and all know who does what, where they can compete and can’t. Neither price-fixing nor collusion are needed: it’s a carve-up.

Once you have them by the balls, their hearts and minds will follow, and as the investment banks have the world by the balls on debt, politicians hearts and minds follow all too easily. Hence the title of this post: elect who you like, it’s still a plutocracy running the joint.

There is a simple way to fix this: break them up. That is do-able. No privately-held entity should be so large that its failure can crash an economy, and no set of companies should be so powerful that new entrants are for all practical purposes banned.

Will Trump do it? To the extent that he remains interested in his new job at all, he appears more interested in fighting the Seventh Crusade than in fixing America’s political system with its corrupted (not bribed, but corrupted) duopoly of power, un-replaceable senators, and free for all in political finance. But, who knows what the next ExecuTweet Order will be?