The Socialism of Poverty - part the second

If there be any left who doubt that the Empty State folks, who complain that they've been left behind by the rest of us, have made their own ingrate bed, well Eduardo Porter has gathered up much investigation by academics, researchers, and bureaucrats (who provide the socialism to the ingrates). You should read it.

For starters, this is the title in my dead trees version I read this morning: "The Government Check Disconnect". Not too pointed, I think you'd agree. Here, on the other hand, is the title as I just pulled up for the innterTubes version: "Where Government Is a Dirty Word, but Its Checks Pay the Bills". Now, that's a title I can applaud. Ingrates in other words. Note that it is customary in the news biz for byline folk not to write the headline; editorial normally does that. The subject of the article: Kentucky.

"The SNAP card works every month; the kids eat two meals a day, but people don't think about where the food comes from and go vote for Republicans," said Larry King, a Kentucky farmer who is chairman of the Democratic Party in McCreary County, whose residents get 55 percent of their income from federal transfers.

As said here more times than not, they've continued to elect Right Wingnut politicians who revel in grinding them under the boot. But these knuckleheads blame DC Democrats, who've been the only ones attempting to bring them out of their self-inflicted Dark Age. Can't let them wimins and faggots tell them what to do!!! No sirreee!!

Harlan has few answers to its economic tribulations: few roads linking it to the world's markets, few good broadband links, few college graduates, few investors willing to risk their money there. "Most of the kids from here who have a chance to go to university never come back," said Colby Kirk, executive director at One Harlan County, a nonprofit economic development group serving the area.

As stated more than once: you're not going to turn a 55 year old unemployed, uneducated, miner/factory worker/whatever into a 56 year old financial analyst. Either support them directly and humanely, or let them die out naturally. The Right Wingnuts have been on a tirade toward the latter. The rest of us seek some sort of former. I don't have the answer, yet. But knuckleheads have to admit the base truth: they've been electing their overseers for generations, and have to stop doing that. If they don't, nothing will change.

Here is the end of the article, and where Porter manages to go off the rails:

As small towns lag behind prosperous urban centers along the coasts, as rural communities shed businesses and jobs, and as their residents turn to welfare as a last line of sustenance, the more they will resent Washington's inability, or unwillingness, to stem the decline.
[my emphasis]

It's absolutely not Washington to blame. Washington didn't make natural gas cleaner and cheaper than coal. Washington didn't tell Kentucky, or any state, to denigrate education. Most of the difference between coastal, urban development and the dearth of same in the Empty States is that the coastal states' citizens chose to invest in their kids and society. There's a reason that the best schools, public and private, exist in coastal cities. We decided, generations ago, that it mattered. It was, and remains, true that the progressive coastal states have been sending moolah by the boxcar load to the Empty States, by way of Washington. Don't now blame us because the Empty State folks, over those self same generations, didn't give a damn.

My Name is Bond, Junk Bond

We don't need no stinkin data!! That, in a nutshell, is The Manchurian President's view of how the Fed should do its work. Any number of pundits have been taking a swing at such nonsense (although, it has to be admitted that these missives have made the case that Policy isn't driven by data). The one I saw today is from the estimable Neil Irwin. Yes, this could be titled as the next installment in the "I Still Hate Neil Irwin" saga. But, given the nature of his text, it was too much to ignore.

But the most memorable part of the president's tweet — and one that actually is a pretty good guideline for all central bankers — was, "Feel the market, don't just go by meaningless numbers."

What Irwin, and the rest of the pundits, still ignore is that long term interest rate is determined by the worth of physical capital. The CxO class still won't or can't find new and better ways to invest in plant and equipment. So, the opportunity cost to the CxO class, and 1% individuals, (Treasuries) remains in the toilet just because that's where much of that moolah goes. As demand increases, price increases, and interest rate falls. That's Econ 101.

Well, stock buybacks, too.

Florida GOP Senator Marco Rubio said on Twitter last week that the tax code shouldn't encourage buybacks.

"When [a] corporation uses profits for stock buy back it's deciding that returning capital to shareholders is better for business than investing in their products or workers," Rubio said. "No surprise we have work life that is unstable & low paying."

Little Marco!!! How un-Republican of you.

The Asymptote of Progress - part the eleventh

Here's a really funny piece of the roll-out of 5G, at AT&T (note to some: this ain't the company that ran Bell Labs and such). Much of the fun is found in the comments.

One such comment implies that 5G is more or less antique microwave transmission. Well, turns out, could be.

Let's consider 5G access systems at microwave and millimeter wave frequencies. One of the major hurdles in implementing radio access at microwave frequency is overcoming the unfavorable propagation characteristics. Radio propagation at these frequencies is highly affected by atmospheric attenuation, rain, blockage (buildings, people, foliage), and reflections. Microwave point-to-point links have been deployed for many years but these are generally line of sight systems.

Will 5G actually work, at a price and service level that's better than LTE? Doesn't sound like it so far.

The Socialism of Poverty

It gets clearer and clearer that the NYT folks are reading these missives. Not that they'll admit it, naturally. A frequent theme over the last year or so is that the Red State vs. Blue State meme is bogus; and always has been. The political, social, and economic divide is betwixt shitkickers and city dwellers. The divide goes back to the beginning of the Country. Just look at the abominations in the original Constitution and the Bill of Rights; accommodation of Southern (rural) demands. The following stories from the last few days add more testimony from 'experts'. What none of the experts and reporters have the balls to say is that the shitkickers are poor, uneducated, sick, and hopeless because they've always elected fascist politicians to run their local and state governments. Yet, it's also a fact that Washington, particularly under Democratic administrations, has been shifting moolah from Blue States to Red States since at least FDR. The damn Farm Bill alone runs to $20,000,000,000 each and every year. It's proper to yell at them, "you've made your bed now sleep in it. Get out of my face!!" If only we could get rid of the Electoral College which cemented the shitkicker bias in the presidency.

So, let's look at the articles.

First, "Chase for Talent Pushes Tech Giants Far Beyond West Coast". Here's the money quote

Driven by a limited pool of skilled workers and the ballooning cost of living in their home bases of Silicon Valley and Seattle, as well as President Trump's shifting immigration policies, the companies are aggressively taking their talent hunt across the United States and elsewhere. And they are coalescing particularly around a handful of urban areas that are already winners in the new knowledge-based economy, including New York City, Washington, Boston and Austin, Tex.

Austin, it need be noted, is about as Blue as can be (Austin is in Travis County; can't find just Austin numbers, but here's a zoomable precinct map without clear city boundaries you can play with.)

Second, an earlier piece

Tech companies feed on highly educated and specialized workers, specifically dense clusters of them where workers and companies interacting with one another are more likely to produce new ideas. Washington and New York, as it turns out, are two of the most highly educated regions in the country, with already large pools of tech workers.

Third, a rural saga "For Manufacturers, a Complex Mix Can Determine Location"

But the rural labor force is not necessarily less expensive.

Bob Hess, a vice chairman of Newmark Knight Frank, the global real estate company, explained that labor costs were no longer significantly lower in rural parts of the country.

Fourth, another Eduardo Porter piece, "The Hard Truths of Trying to 'Save' the Rural Economy". A few quotes get Mr. Porter.

One thing seems clear to me: nobody — not experts or policymakers or people in these communities — seems to know quite how to pick rural America up.

Well, may be. Or may be not. Just a few graphs later he says,

In a report published in November, Mark Muro, William Galston and Clara Hendrickson of the Brookings Institution laid out a portfolio of ideas to rescue the substantial swath of the country that they identify as "left behind." They identify critical shortages bedeviling declining communities: workers with digital skills, broadband connections, capital. And they have plans to address them: I.T. training and education initiatives, regulatory changes to boost lending to small businesses, incentives to invest in broadband.
[that snippet is somewhat different from the text in my dead trees version. hmmm?]

One need only note that Right Wingnut Red States (mostly) have passed laws prohibiting communities from establishing "socialist" innterTubes services.

Naturally, capitalization of agriculture is what caused the rural flight of the no longer employed farm hands to Northern factories. These days,

There are, to be sure, some rural communities with productivity as high as some big cities. But they rely on heavily mechanized and automated industries that support few jobs: oil extraction or large-scale agriculture, in which tractors talk to satellites and no drivers are involved. The livestock business on the vast pastures of Sioux County, Neb., for example, supports an economy worth $306,000 per worker, according to data from Mr. Muro and Jacob Whiton of Brookings. But only 1,200 people live there.

So, we, this country, have two choices: either let the shitkickers die off in their bitterness and stupidity at what they did to themselves, or implement a program even more generous than what FDR did for them in the 30s or more than the current flood of money from the Blue States. All for a bunch of uneducated ingrates. What a country!

The Socialism of Power

Sunday '60 Minutes' ran a segment about Musk/Tesla.

During the piece, Musk says that it would be OK with him if others used the Tesla patents (which are open source) to make an even better electrical vehicle. His reason: electric vehicles are better for the planet. Now, that's a testable assertion, and it ain't necessarily so. Here's a table of CO₂ by type of power generation. Of most note is the difference between coal with and without scrubber. Compare to:

Every gallon of gasoline burned creates about 8,887 grams of CO2.

So, when electricity comes from wind, hydro, nucular, solar, and my fave, tidal (but, of course, being a New Englander within spitting distance of the Bay of Fundy, one might expect that), then electric transport is better for the planet. Otherwise, may be not so much.

In sum, whether electric vehicles are cleaner, in a birth to grave sense, isn't a slam dunk question. Back before there was an EPA, I was in a class where the notion of air pollution vis-a-vis how to power cars came up. The instructor asks, "what matters?". Your humble servant offered that electric vehicles may be cleaner in use, but the total emissions attributed to such vehicles must include emissions from power plants that provide the leetle electrons to charge the batteries. I got an "atta boy" from the instructor. I always have taken a macro-view of most questions, since winners shouldn't be allowed to foist costs on losers. How often do you hear Musk, et al, delve into that question? It's not in his interest. If you look up the Great Smog of London, you'll see that clean air is mostly a local problem. California did much the same for much the same reason. The Manchurian President braying that China and Russia won't do anything doesn't matter so much.

From the macro-view, electric cars have been around since the late 19th century. Also, about the time that gasoline cars began to push the electric ones aside, electric intra- and inter-city transport on rails grew. Some systems were governmental, most private (at least at the beginning). By the 1950s most had disappeared. Did GM do it? I buy it, but not all do. The fact remains that the energy density of gasoline is far beyond what the best batteries can manage.

gasoline 34.2
Lithium 4.32

Beyond just density is the 'refill' problem. One can drive up to a gas station and fill the tank in a few minutes. Recharging a Tesla:

Five hours is good for overnight charging, but for rapid boosts, it's not that great. Tesla offers a global network of supercharging stations specially designed to provide up to 120 kilowatts of power to its vehicles. The 90kWh Model S can charge from zero to 100 percent in just 75 minutes, or from zero to 80 percent in 40 minutes.

So, in sum: if we, as a country or planet, want to switch to 'clean' electric transport, we're locked into mass transport vehicles connected to dedicated non-coal fired power plants. Electric mass transport equals socialism. Not what the Right Wingnuts want to talk about.

There are a couple of ways to simulate the main advantage of gasoline with electric cars: its portability and ease of fueling. One is build Teslas with exchangeable battery packs, which they sorta, kinda tried but abandoned some years ago. The other is build proximity charging into urban streets, which turns each automobile into a mini-tram, an approach already under study.

But the ultimate solution could involve none of that at all. Wireless charging—the long-simmering solution for charging electronic devices without having to remember to actually plug it in—could solve a variety of problems relating to the complexity and ease of charging networks....while bringing a few benefits of its own, as well.

Not every street in every city need by powered, of course. The point of the network would be to provide enough power to run the "average" car while it is drawing power from the street. The main thoroughfares, but not the many side streets. After all, cars would be recharged when at the house.

Well, I'll be. Not my idea, after all. Those damn Socialist Europeans!! Note, however, that this is age-old contact charging; the street cars in DC decades ago also got their power from conduit in the street rather than the usual overhead wire. Didn't want to spoil the view. Really.

Most streetcar systems use overhead catenary wires for power. However, a very old law prohibits wires of any kind in the L'Enfant City, generally bounded by the Potomac and Anacostia Rivers, Rock Creek, and Florida Avenue. The pre-1962 system had a network of vaults under the road. Wires ran in the road, and a device called a "plow" connected to the streetcar reached under the roadbed and contacted the wires.

You know what's amusing about all of this? One of Tesla's (the man) inventions, we think, was a method of radiated power distribution. Some services, like clean water and dirty sewer, really are social goods.

Topsy Turvy

Well, as predicted some times over the last couple of years, the rate inversion is happening. Cue the disco ball!! Here's a quote:

It passed with little fanfare, but the spread between the 2-year and 5-year Treasury notes went negative yesterday, the first inversion of the yield curve since 2007.

There is a host of other punditry to read. Not seen or heard by Your Humble Servant in these punditries is a discussion of what, exactly, drives such an inversion. Recourse to a banking metaphor, as in the article cited, is misleading. Yes, the description of how community banking works is accurate on its face: borrow short and low; lend long and high. But that's not what drives Treasuries and other such instruments.

Treasuries are instruments of Big Holders, and are the instrument of last resort: when Big Holders, aka corporations and the .1%, can't figure out how to generate real returns on real capital investment, they turn to free money from Uncle Sugar. As the real capital alternatives dry up, either because technology doesn't progress or the CxO class can't find any, Treasuries become the instrument of choice. Of note is the plain fact that corporates took all that extra moolah from the Tax Giveaway and bought back shares, pumped dividends, and chased Treasuries. Same thing as under Dubya.

It's only when real capital generates large real returns that fiduciary returns can climb. That pesky Law of Supply and Demand sends ever more moolah chasing Treasuries when there's nothing else to do. Or, to put it otherwise, it's a matter of opportunity cost. Treasuries looked good for the same reason that an ugly guy looks good at closing time: any port in a storm. The Fed can't manufacture superior real capital investment.

Stupid Is As Stupid Does - part the second

Some days just keep on giving. Here's the latest, so far, from The Manchurian President

....I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN

Of course, the only ones getting rich since he ascended his throne is the l%. Tariffs are TAXES on Americans, not tribute paid by Chinese. When the facts don't fit the propaganda, lie.

Blue States' Wet Dream

OK, not the kind that plague adolescent boys; may be not quite plague. This is the Blue State political version, prompted by the criminal information published for Michael Cohen this week. I can say you heard this first here. At least, I've not read or heard it elsewhere as I type. What seems possible, although speculative of course, is that Mueller is running a spectacular gag on The Manchurian President.

What is clear is that both The Manchurian President and his kids and in-laws are referred in the information and such. Here's the gag. The Nixon expulsion was preceded by the Agnew ousting. A necessary precursor. What of today? Well, we have Pence on the record lying about all the grifting, as well. Mueller will offer them a simple choice: walk away and neither the USofA nor the various states with jurisdiction will try either of them, nor their kith and kin, with mountains of financial crimes. All under seal. The new President, until 2020, is Nancy Pelosi. That's the current order of succession. To change that would require both Senate and House passing new order law. Not going to happen.

Not a high probability event, I'll admit. But such a sweet dream.