An Open Letter to Harry Reid

The Honorable Harry Reid

United States Senate

522 Hart Senate Office Building

Washington, D.C. 20510-2803

Dear Senator Reid,

Nice job negotiating with John McCain and getting an up-or-down 51%-to-win vote on those nominees. You made Mitch McConnell look like a clumsy political dinosaur. Not difficult, was it?

Now nuke the filibuster in its entirety. Till it glows. No loopholes. It’s not the law, it’s just something someone in the Senate thought up back in the 19^th century. You know the history. The Senate had a rule that any senator could talk as long as he wanted on an issue. Eventually people figured out that this was comically impractical and created a cloture rule, where 2/3 of the Senate could stop debate. Then it became 3/5 in 1975. It could become 51% in 2013. There’s nothing sacred about it. And face it, sucker punching McConnell would be justice mixed with joy itself.

Oh, right, the hallowed traditions of the Senate. Collegiality, dignity of the institution and all that. Shall I give you a window on the thinking of people who aren’t in the Senate, the other 300 million minus one-hundred of us? We don’t give a ding-dong-damn about the hallowed traditions of the Senate. What little collegiality you now enjoy does not concern us.

As for the dignity of the institution, well, if wearing clown suits and Groucho glasses would get some movement out of you, then make it so. Big toed shoes all round.

You are giving us all the impression that you guys can store your worldview in a Dixie cup. It’s all about your daily experience, your wealthy donors, and those unpleasant people from K Street who tell you how to vote. Maintaining the illusion that you are more than a bunch of carefully selected butlers for the billionaire class is more important than getting something accomplished for us. Hint: That’s why colonoscopies poll better than Congress. (Also root canals, lice, and Genghis Khan)

Here’s a joke that cracked us up back when I was about twelve. This guy dies and goes to hell. A demon tells him he wasn’t so bad, so he can choose his own punishment. The demon leads him past all these rooms with people being tormented. Some are boiling, some are burning, some are freezing. Then he looks into a room where people are standing around up to their knees in dog shit, drinking coffee. He thinks, “Well, I guess I’ll get used to the smell after a while.” He grabs a cup of joe and wades in. After about five minutes another demon comes to the door and yells, “Coffee break’s over! Back on your heads.”

Ok, Harry, so the Senate will be an unpleasant place to work if you end the filibuster. So sorry, but you chose your room. Coffee break’s over.

Very Sincerely Yours,

The Minor Heretic

Internship

Unpaid internship is yet another thumb on the scale in class warfare. Only those who have family money backing them can afford to make the first step into prestige jobs. Watching the internship phenomenon and the student loan debacle makes me wonder whether the invisible hand is once again picking its own pocket.

Business owners are perfectly happy to get talented and driven young people to work for free. Of course, in the long term this reduces the pool of people available to fill those positions. If only those from well-off families need apply, then there is a vicious generational cycle as fewer families are in a position to help their children up the vocational ladder.

The student loan problem is sheer short-sighted idiocy. The rest of the industrialized world realizes that “subsidizing intellectual curiosity,” as Ronald Reagan so stupidly put it, is a net gain for society. Educating people is one of the highest return investments we make. In various ways our friends across the Atlantic either provide free or virtually free higher education.

Aggravating the situation, higher education costs have been outpacing inflation. Since the 1980s the average college tuition has gone up by over 500%. Most of this rise, as Catherine Rampell wrote in the NYT, is because state aid to state colleges drops with every recession. When the state budget gets tight, aid to education is the first victim pitched over the taffrail. When the economy recovers the aid doesn’t, so tuition costs ratchet up.

However, the banks make money from about three-quarters of student loans, and their interest is, well, interest. They are being loaned money by the Fed at near zero interest rates and making money loaning it out to students at 6.8%. The combination of increasing tuition and interest rates has three major effects. First, it scares off some unknown number of potential students altogether. Second, it directs students towards degrees that should lead to greater personal financial return, as opposed to greater general societal benefit. Third, it tends to keep these new graduates docile in their jobs while they are paying off those loans. It is similar to employer-based health insurance in this way.

As an aside, I am interested to see what happens if/when Vermont gets single payer health care. I am thinking of all the people who are quietly suffering bad bosses and wretched jobs “because we need the insurance.” I imagine that the country song “Take This Job and Shove It” will become a leitmotif in HR departments throughout the Green Mountains.

Back to internships and loans: Back to the future. The general direction of these developments is back to the days before the G.I. Bill, when there were fewer, smaller colleges and universities with fewer, richer students, most destined for the smaller number of elite jobs that required degrees. A college education was as much a marker of class status as an indication of practical knowledge.

Not even the banks want this. At some point the reduced customer population offsets the greater return per customer. The universities, having expanded to accommodate the masses, don’t want to accordion back down to the elite student bodies of the early 20^th century. And, of course, everybody in general wants a reasonable opportunity for higher education. However, by chasing the short term dollar we are heading there.

The opening move is to think about what kind of educational landscape we want as a nation and recognize that our present policies point us in a different direction. Then we need to think about medium to long term consequences and legislate with those in mind.  I like Senator Warren’s proposal to loan students money at the same near-zero rate we extend to big banks. Australia already does essentially this. It’s a start. Absent an economic recovery that refills state treasuries, the feds should redirect some money from various corporate subsidies and military boondoggles to reducing tuition at state universities. Corporate subsidies and taxes are the right place for this because, after all, we are training their future employees.

Whenever I hear about the student loan issue I wonder who is out there, making that decision about going to college or not. I can visualize some intelligent, creative, original thinker, looking at the costs and the job market. Maybe this is the person who will discover the technology that changes our lives for the better, or negotiates the supposedly impossible peace treaty, or creates the work of art that defines an era. Or maybe, lacking the platform for developing his or her talent, this person’s potential is lost. Aside from prospective superstars, how many decent, bright young people will live with their potential undeveloped, and what will that cost us as a society? There are no guarantees, but higher education is one of the best gambles we make.

Spider Webs

Laws are like spiders’ webs: if some light or powerless thing falls into them, it is caught, but a bigger one can break through and get away. Solon

It has been reported and discussed, but I can’t let it go by. James Clapper, Director of National Intelligence, perjured himself in front of a Senate committee, and he is going to get away with it.

On March 12 of this year Clapper appeared in front of the Senate Intelligence Committee, and the following exchange occurred:

SEN. RON WYDEN (D-OR.): “This is for you, Director Clapper, again on the surveillance front. And I hope we can do this in just a yes or no answer because I know Senator Feinstein wants to move on. Last summer, the NSA director was at a conference, and he was asked a question about the NSA surveillance of Americans. He replied, and I quote here, ‘The story that we have millions or hundreds of millions of dossiers on people is completely false.’

“The reason I’m asking the question is, having served on the committee now for a dozen years, I don’t really know what a dossier is in this context. So what I wanted to see is if you could give me a yes or no answer to the question, does the NSA collect any type of data at all on millions or hundreds of millions of Americans?”

Director of National Intelligence JAMES CLAPPER: “No, sir.”

SEN. WYDEN: “It does not?”

DIR. CLAPPER: “Not wittingly. There are cases where they could inadvertently perhaps collect, but not wittingly.”

SEN. WYDEN: “Thank you. I’ll have additional questions to give you in writing on that point, but I thank you for the answer.”

Since then we have seen the revelations by Edward Snowden, a former employee of Booz-Allen-Hamilton and the CIA, which completely contradict this. Yes, in fact, the NSA has been collecting all sorts of data on essentially every American.

Clapper didn’t have to lie. Senator Wyden had given him the list of questions in advance and offered him the chance to modify his answers afterward.

Clapper himself admitted to lying on national television. “I responded in what I thought was the most truthful, or least untruthful manner, by saying no.” “Least untruthful” means “untruthful”, which means he lied under oath to the Senate, which is a crime, as follows.

False Statements (18 U.S.C. 1001)

I. Except as otherwise provided in this section,

II. whoever, in any matter within the jurisdiction of the executive,

     legislative, or judicial branch of the Government of the United States,

III. knowingly and willfully—

IV. a. falsifies, conceals, or covers up by any trick, scheme, or device a material fact;

      b. makes any materially false, fictitious, or fraudulent statement or representation; or

      c. makes or uses any false writing or document knowing the same to contain any

      materially false, fictitious, or fraudulent statement or entry; shall be fined under this title,                   imprisoned not more than 5 years or, if the offense involves international or domestic terrorism (as defined in section 2331), imprisoned not more than 8 years, or both.

In theory, Honest Jimmy is facing up to 5 years in federal prison. Well, if you or I confessed to perjury on national television, it’s likely we would be facing up to 5 years. James Clapper, DNI, however, is a powerful Washington insider. He’s more likely to win the Powerball.

It reminds me of an incident a few years ago when President Bush said on national television that he had authorized 30 cases of warrantless wiretapping. If an ordinary person had admitted to participating in a conspiracy that involved 30 cases of warrantless wiretapping, that person would be looking at prosecution.

And, as MSNBC’s Chris Hayes points out, Snowdon and Glenn Greenwald get vilified for leaking, while journalists who peddle government sponsored leaks get a pass.

It’s not about national security or rule of law. It’s just about power.

Spider webs.

An administrative note: I now have a Twitter account, @MinorHeretic. I swore I would never get one, but, well, it’s complicated. The @MinorHeretic account is the diametric opposite of this blog. So far I seem to be posting oddball things I see in passing, animal pictures, and trivia. Pure amusement value. Everyone needs a break.

Solar Winning

I just found a couple of studies about projected installations of power plants over the next few years. One, by Gerry Runte of Greentech Media Market Research, predicts that there will be between 78 and 91 gigawatts (GW) of nuclear capacity installed worldwide between now and 2020. That accounts for projects with a probability between 10% and 90%. The most probable number is 84 GW.

According to the research firm IHS, 2013 should see the installation of 35 GW of photovoltaic (PV) systems worldwide, up from 32 GW in 2012. The IHS projection through 2017 is that the PV market will rise to 61 GW annually, with a 2013-2017 total of 242 GW.

(Click image to enlarge)

If we project that the 2010-2017 average growth rate of 17.6% continues, annual PV installation would reach 99GW in 2020, for a 2013-2020 total of 497 GW, 413 GW more than nuclear.  Of course, sheer capacity isn't the whole story. Not every power plant runs 100% of the time.

According to the Nuclear Energy Institute, the industry average capacity factor for nuclear power plants is 86%. That is the comparison between how much energy they actually produce in a year and how much they would theoretically produce if they ran 100% of the time. In reality they have fueling and maintenance outages as well as unscheduled shutdowns.

The capacity factor of photovoltaic systems varies according to the local climate. In the continental U.S., the output of a 1,000 watt system might vary from 1,100 kilowatt-hours annually in Seattle to 1,700 kWh in Dagget California, in the middle of the Mojave Desert. Given 8760 hours in a year, this is a capacity factor of between 12.5% and 19.4%. Call it an average of 16%.

Apply that to our projected 497 GW and in 2020 the 2013-2020 PV installations would be producing 79.52 GW-hours annually. Meanwhile, that 84 GW of nuclear at 86% capacity will be producing 72.24 GW-hours annually. That is, if there is enough nuclear fuel at an affordable price. I imagine that the sun will still be shining in 2020.

The Marginal Barrel

I just read an interview with an oil industry analyst named Steve Kopits. He’s the guy who pointed out that 4 of our last 5 recessions happened just after our national expenditures on oil reached 4% of GDP.

Kopits talks about a concept that is new to me – peak oil price.

When we think about supply and demand, we generally think in terms of a simple relationship with price. All other things being equal, if supply goes down, price goes up. When price goes up, demand goes down. Of course, there is such a thing as price elasticity. That is, if you are truly dependent upon something a 10% price rise won’t result in a 10% fall in consumption.

Oil has shown itself to have a very elastic price. Oil cost $25 a barrel back in 2000. Now it costs more than four times that much (Brent price $110), but you don’t see a drastic drop in consumption.

Enter the marginal consumer, the marginal barrel, and carrying capacity. The marginal barrel is that highest priced barrel of oil that blends in with the rest of the world supply and holds up the world average price. The marginal consumer is the world’s poorest consumer, or the consumer for whom there is a less appealing but plausible alternative to oil waiting for use. Carrying capacity, in Steve Kopys’ thinking, is the maximum price that a particular country will tolerate before cutting back on consumption.

According to Kopits, the U.S., Europe, and other western industrialized nations hit carrying capacity at around $110 a barrel. China has another $10 or so to go before it starts losing its taste for the stuff. Some poorer countries have hit their limits already.

The upshot is that although supply is constrained, the price has hit a wall. Enough people, countries, and industries will grudgingly conserve or switch to prevent oil prices from rising drastically. Here in the U.S. gasoline consumption is down 3% from last year. This could be partly due to the recession, but partly because we have hit our carrying capacity.

By Kopitz’s estimation, just as world oil production has hit a bumpy plateau, so too has the price of oil. It will come to rest north of $110, but this will make more consumers retreat from the market.

Nota Bene: Increasing wealth, increasing efficiency, and inflation will all tend to raise the nominal carrying price of oil. The price will creep up along with our efforts to be more efficient, simply because a mile of driving or a day of 68F in a house will cost the same.

This is when, paradoxically, the most energy efficient economies become the greatest users of oil. (The formal term is Jevon’s Paradox) It is a huge advantage. Oil is an unparalleled commodity, as both energy and chemical feedstock. The city, state, or nation with the highest efficiency, and therefore cost tolerance for oil, will be able to take advantage of its conveniences after other entities have been forced to use lower quality compromises. The same holds true for any other energy source.

I’d like to see my home state of Vermont put more emphasis on energy efficiency. Right now we are the fifth most energy efficient state in the U.S. I’d like to see us beat out Massachusetts for the top spot. Then I’d like to see us pour it on and open up an unbeatable lead. It would put us in an enviable economic position as all energy sources approach their limits.

(Just in case you are interested, I now have a Twitter account, @MinorHeretic. Nothing serious, just photos of the natural world and minor absurdities. A break from all the grim stuff.)