View 768 Sunday, March 24, 2013

The amazing satellite image which shows how one tiny town (pop. 14,716) has fracked enough oil and gas to light up ‘Saudi America’

http://bit.ly/ZkakPo

Lawrence

There is no real shortage of energy, and the United States does not need to keep large armies in the Middle East to have an energy surplus here. We have the technology and we have the resources. Of course this has been true for a long time, since we have alternatives to oil. Developing domestic oil resources has this advantage: it is politically possible. There are powerful lobby groups very much in favor of developing those resources. This will come out more and more, even in California where the state and local governments are desperate for more revenue: at some point they will figure out that the reason the state is broke although it sits on pools of oil is that we have given ourselves unlimited goodies without providing for ways to pay for them. An oil tax system similar to Alaska’s could solve California’s revenue problems without cutting the inflated salaries and pensions that promise doom for the near future if nothing is done.

Of course there is the risk – some would say certainty – that this is only a temporary fix, and the round after round of raises and pensions and health benefits to state and local employees will continue without end. This amounts to a rejection of the notion that we can have a republic: that we need tutelage from wise rulers who will restrain our unlimited appetites. That, of course, is another discussion for another time. But development of our energy resources would be a lot cheaper than keeping expeditionary forces tasked with keeping order in the Middle East. With domestic energy resources we would have a growing economy – cheap energy and economic freedom will always produce economic growth – and have a chance to build a stable republic. At the moment we face looming economic doom with nothing in sight that can bail us out. That is as true of the US as it is of California. Of course unrest in the Middle East has changed the incentives for the masters of OPEC; if the US is seen as recovering from its dependency on imported oil we may expect other crises.

On the other hand, we have already paid for the Legions who can protect us while we get on with rebuilding the republic.

Things have been slow at Chaos Manor, but they are not stopped.

I have this comment:

Iraq

One alternative would have been to mass the troops at the border and negotiate with Saddam. We do not seem even to have thought of that one, which would have been the first move of the older imperialists.

————————

As I recall Bush Sr. did that. He gave him a deadline – Get out of Kuwait. Saddam pleaded for more time, a delaying tactic. As I recall it was March 15? The deadline passed, we moved in. This shows that gunboat diplomacy won’t work. He would have treated it as a bluff until our guys moved across the border. At that point the fat was in the fire.

Even if it worked it would have been a temporary solution. Once we got him to back off and we went home he would be back to his old tricks, then we would have had to go to all the trouble to do it again, build the coalition, get countries like Egypt to support us. Endless saber rattling, deploying armies and taking them home.

B

I doubt that Saddam would ignore us this time.  Had he done so then it’s on to Baghdad where I would instantly have announced that we are recruiting for the American Foreign Legion: non-citizen soldiers who will never set foot on American soil, but who will receive reasonable retirement benefits after twelve years of honorable service. 

At least my study of history shows this would have had a better chance of good results than bringing in Bremer. 

Fracking our way back to a republic?

Dear Dr. Pournelle,

long time reader, first time writer.

Just a short note, what is actually shown in that image is "flaring". That is, oil is produced by fracking, and the gas that is also produced is flared off as it is not economical to build the infrastructure to bring it to consumers or export it. Domestic US Gas price is currently at $4.

At the same time, LNG prices are around $18 here in Asia, so why is it not economical to build a pipeline to Oregon and a liquefaction terminal there? The economics would work, and there are private companies lining up to to so, but exports are subject to approval by the government, and the government has so far only decided to grant one export license, which I assume was either an oversight or started under the previous administration and could only be delayed, not stopped. Construction (actually conversion of an import into an export terminal) of that terminal in Louisiana is well underway.

There are plans for lots more, including in Oregon to ship out Bakken gas, but none of these plans can go forward, as the Department of Commerce is only going to start the approval process for new export licenses next year. I’m pretty sure they have much more urgent matters to attend to. Note also that government would be legally required to approve exports to all countries with which the US has a free trade agreement (e.g. your friends and allies), so it makes sense not to start the process and drag it out as long as possible. And while they are doing it, natural resources are being wasted to light up North, all because of regulatory uncertainty and intentional foot-dragging.

Keystone got some attention, but really, LNG exports are a much bigger issue, we should watch how this develops. But an example for return to republic it is not.

With best regards from Singapore,

Daniel Gebhardt

No doubt someone has thought of that and is even now lobbying for a way to retrieve that lost energy.  Agreed that it should not go to waste. One does wonder why the current administration is not encouraging such projects.  More revenue, more energy, stable taxes… Thank yuou for the observation. I don’t claim to be an expert on everything, but I can say that my readers collectively know a great deal…

View 767 Thursday, March 21, 2013

Actually this is the Wednesday view but I didn’t get started as soon as I should have, and my automatic dating macro insists that since it’s just after midnight it’s Thursday. I could overwrite it but I don’t intend to write much anyway. I’ve been feeling a bit poorly, and I had to hustle all day doing various things, so I didn’t get much done. I did manage to get to the dentist in time to make myself look good enough to be on the podcast interview with Leo Laporte. That went well, or at least I think it did, and Leo seemed happy enough. I haven’t been able to find it posted yet – at least Google doesn’t seem to find it – but I make no doubt it will appear within a few hours.

[10:30 Reader Dave  says it has appeared as http://twit.tv/show/triangulation/95]

Much of my mail, and Leo for that matter, convince me that I ought to resume my old columns again, and I’ve been mucking about with some of the stuff I’ve been working on. Back in the early days of the computer revolution there was more fun in it, and also the choices were more critical. Now a lot of good stuff has become commodity goods, and it doesn’t matter a lot which brand you buy and use. It’s all pretty good stuff, Good Enough for getting a great deal more work done than people could do before these little machines came into our lives. Everything is cheaper and most of it just works, and Moore’s Law is inexorable: It will keep getting better and better whether we want it to or not. The other day I needed a flashlight. I always keep several flashlights, but I couldn’t find one with good batteries in it, and that annoyed me; so I bought ten of them. They’re generic LED one battery flashlights, and I have seeded them around the house so that they have reached a sort of saturation point, and now I can always find one. Of course they’re as bright as the old multi-battery heavy duty lights I used to have. Makes for great convenience: always be able to find a flashlight. I think I spend twenty bucks on the lot of them batteries and all, and I get free shipping. Sign of the times, and we take it all for granted, as we take for granted that we can get serviceable clothing, pharmaceuticals, fresh vegetables and fruits at any time of the year – I could go on, but I expect the point is clear. Clear to older people, anyway. There will be readers who have always been able to lay hands on a working fountain pen, flashlight, good toothbrush, and uncountable other conveniences that weren’t so easily available even twenty years ago.

Which is to say, Civilization is a blessing, and we should count our blessings when we bemoan what’s happening to the country. Conveniences multiply, and are available to everyone. At the same time civil life becomes less civil, or does depending on where you are. More and more people live in enclaves in which they will never meet anyone not part of a privileged class wealthier than almost anyone I knew when I was growing up – real wealth, that is, with medical care, no uncertainty about food and drink, the ability to fly across the country in hours at need, the ability to communicate with almost anyone anywhere, and get, delivered to your door, clothing which in Biblical days would be called “soft raiment”. What came you to the desert to see? A man clothed in fine raiment? I say to you those wear soft raiment dwell in king’s houses…

How long this will last isn’t so clear. What used to be the necessities of life which kept people working long hours all day are now rights to which all are entitled even if they don’t choose to work at all, what many considered luxuries are now available to all as a matter of right and entitlement, and you don’t even have to be civil to those who provide it to you. Why be polite as a cost of something you deserve as a matter of right?

But I am rambling and it is time for bed, and looking around at all the stuff around me that didn’t exist when I was young, then was the stuff I read about in science fiction novels, and now we can‘t live without it’s sort of overwhelming; and I wonder what those who grew up with it as normal think of this world. I grew up in the Great Depression, and always thought that civilization was fragile. Then came the seemingly unending boom times that began just after World War II and continued, with what now look like rather minor fluctuations, until 2008. But it is now 2013, and it doesn’t look so much like a fluctuation any more. Debt rises, joblessness rises monotonically — I know. I know. Unemployment appears to be falling. Not by much but falling. Alas the number of people without jobs isn’t decreasing. We simply remove from the ranks of the unemployed those who no longer seek work. They’re still jobless. But that’s a matter for another time.

I started counting my blessings, and then started feeling gloomy because the economy isn’t improving – but in a sense it is. Moore’s Law continues inexorably. It can’t last forever. As established in Strategy of Technology, technology grows in S curves, not exponentials. But we don’t seem to have exhausted the potential of the computer revolution yet. Everyone gets a cell phone now. Calculators are essentially free. And that beat goes on. Maybe productivity will grow our way out of all this. We an hope, anyway.

And that really is enough.

For those looking for something meatier to read:

Where Higher Education Went Wrong

http://reason.com/archives/2013/03/19/where-higher-education-went-wrong

A series of essays I thought you might like that pretty much agrees with you. I don’t agree with Nick Gillespie’s essay at all, I think we have had more than enough mind blowing in the last 50 years. I’m for solid scholarship, but if don’t invest in the future generation, then we are truly screwed. The rest of the essays are worthwhile.

Phil

Reforming the education system remains terribly important: at the moment the one thing the rich can give their children that most people cannot is a good education.  Cicero was proud to have educated his children himself rather than entrust it to slaves.  We don’t have time to do that any more and leaving it to the professionals may create long lasting problems. If you have pore-school children, teach them to read yourself. It’s not that hard, takes about 70 half-hour lessons over a period of a few months, and when it is done it is done. Once they can read, the schools can’t take that ability away from them.  Of course at the end of first grade your kids may be the only ones in the class who can read, but that’s a better problem to have than illiteracy. Now a certain percentage of kids learn to read no matter what instruction is given to them, but it’s chancy and they don’t learn systematically; better to be sure they can read before they get to school.

At least we know how to teach the kids to read, even if the schools do not.  http://www.jerrypournelle.com/OldReading.html

And, if you’re looking for something else, try this

 http://www.jerrypournelle.com/reports/jerryp/lays.html

This is one of the Chaos Manor special reports. There are a lot more, some quite obsolete, some still relevant.  I consider Macaulay quite relevant, as is Roman history. I remind you that Macaulay wrote those essays and poems for the general public.

This is a comment on an item from https://www.jerrypournelle.com/chaosmanor/?p=12850. It came in over a week ago when I was in the middle of some flaps that ate my time, and got neglected. I have been going back and trying to clean up.

We learn nothing!

"The government builds a chicken plant " https://www.jerrypournelle.com/chaosmanor/?p=12850

I laughed aloud, and was also ashamed, all over again. Forgive me if I’ve told you this tale before. At the time of my authority in Wasit Province we were encouraged to find ways to increase employment for the Iraqis. Almost in the same breath, I received an order from Ambassador Bremer’s office in Baghdad to cease the grain harvest and let the crops rot in the field. I was incredulous and inquired as to why… the stated answer was that Iraqi grain/flour/bread did not meet UN standards for health reasons. I protested, after all, Iraqi peoples have been growing grain and making bread from the dawn of the earth (after all, the Garden of Eden WAS in present day Iraq and Cain WAS a crop farmer) and the population surely hadn’t died out from eating bad bread! I was admonished and told to follow the edict. Again, I protested – well, how would the Iraqi people get their bread and how would we insure adherence to "UN" standards? Not to worry – Baghdad would supply the people with UN flour (this at a time when distribution of fuel, food, electricity, water was problematic at best) and engage upon an agricultural program to teach Iraqi farmers how to grow proper crops. My Iraqi friends and counterparts wailed aloud! They’d had UN flour before (remember the embargoes and sanctions?) and it was wholly unsuited to making their bread – it just wouldn’t hold together properly. So I made another attempt, this time explaining the job market to Baghdad. If the farmers couldn’t harvest; how would they, and their workers, get paid for their crops? If the truckers didn’t have grain to haul, how would they earn a living? If the warehouses didn’t have grain to thresh, how would they stay open and pay their employees? If the mills didn’t have grain to mill into flour, how would they stay open and pay their employees? If the truckers didn’t have flour to haul to market, how would they earn a living? If the merchants didn’t have flour to sell to bakers and homemakers, how would they earn a living? If the bakers didn’t have flour to bake, how would they have baked goods to sell? What would the children have to eat without bread? I made the point that I was being asked to create jobs, but also to dismantle the complete economic agricultural engine that PROVIDED jobs in the province!

Oh.

I finally got a stay on the edict and let the market go on it’s merry, haphazard way. That I know of, none of the citizens of my province died from tainted bread or flour in the past 10 years. (I did hear of the subsequent agricultural ‘program’ that was largely ignored by Iraqi farmers. I believe Iraq still feeds itself.)

Jeez… in arrogance, we learn nothing!

s/f

Couv

(PS – in my description above, I neglected to point out that the vigorish owed to all the tribal leaders in the economic process would also be severely curtailed; which was another catalyst for Iraqi howling!)

David Couvillon

Colonel, U.S. Marine Corps Reserve, Retired.; Former Governor of Wasit Province, Iraq; Righter of Wrongs; Wrong most of the time; Distinguished Expert, TV remote control; Chef de Hot Dog Excellance; Avoider of Yard Work

It is a perfect example of what I expected from our invasion of Iraq, and one of the reasons I was very much opposed to starting that war, which was estimated to have a cost of $300 Billion.  I didn’t believe the cost estimate (which is now above $2 Trillion as I understand it).  I have long said that I prefer a Republic, but if we must have Empire, let it be competent empire; our interventions in other people’s affairs are almost invariably examples of incompetent empire.  This is a good example.

The best policy for a Republic is the one voiced by John Quincy Adams: We are the friends of liberty everywhere but the guardians only of our own. There are a number of choices for a competent empire, but they all involve keeping Legions which we generally do not commit to long term actions,l and forming auxiliary military forces of non-citizens, generally the subjects of puppet regimes, to use in long term commitments – because any Imperial scheme will involve ruling without the general consent of the governed, and we are not only not good at that, we don’t want our regular forces to become good at governing without the consent of the governed.  But that is another discussion.

Had we invested the $300 Billion that the Iraq War was estimated to cost in energy development in the United States, we would now have plentiful energy, a good start on Space Solar Power Satellites, and some X-projects to develop military and space technology.  We would also be at least $2 Trillion less in debt. 

Blood is the price of Admiralty. We paid it, blood and treasure, but that is only a necessary condition of successful empire. It is not sufficient, and Col. Couvillon’s example, one among many, tells us that we do not have the right stuff for this sort of thing. We sure could have had a great energy and space program, though.

Good Morning,

While reading your most recent letters from Brian P. he casually uses this sentence " Often, we are dependent for targeting on the same intelligence agencies which reassured us Saddam had weapons of mass destruction."

I guess the standard program of denial has worked.

We FOUND the labs and mobile production facilities. Some of them were buried near a munitions factory. There are semi-plausible cover stories, but it seems clear that they were not making aspirin or hydrogen gas…

We KNOW he had WMD as his cousin (Chemical Ali) used chemical agents on the Kurds. Western firms sold thousands of tons of chemical agent precursors to the Iraqis. Saddam publicly boasted that he had them.

So I’m always puzzled when intelligent and informed people casually dismiss the intelligence efforts and the evidence found to support them.

When you repeat something loudly enough and long enough, it really does have a way of getting past the filters and into your brain, becoming part of the zeitgeist.

Best wishes,

zuk

We got that wrong, too. We had right, reason, and interest to go in and put paid to Saddam; but it was not in our interest to convert Iraq into a political vacuum. We gave little thought to what would happen after Saddam was out of power.  I say we, but I mean they: Bush paid no attention to the people I knew and worked with.  He also trusted the career cookie pushers of State, which gave us Bremer, whom we did not deserve. The more incompetent Roman Emperors sent unwise and incompetent proconsuls to Iraq, so I suppose we were continuing in the tradition.

When Bush proclaimed from the carrier “Mission Accomplished”, had he acted as if he believed that and began to arrange for someone to take over from the US, it might even have been true. The problem is, who?  The Brits can’t and won’t do it again. We could hardly replace Saddam with the Kuwaiti royal family, or the Saudis.  Jordan?  Chalabi, sometimes known in Iraq as Chalabi the thief? For some reason we did not think these things through before sending in the troops.

One alternative would have been to mass the troops at the border and negotiate with Saddam.  We do not seem even to have thought of that one, which would have been the first move of the older imperialists. Of course this would have been expensive and might have been made to look like incompetence, marching the men up the hill and marching them down again; but  the purpose of war is to bend the enemy to your will. Once Saddam understood that he faced the army that had destroyed his forces in the first Gulf incident, it is likely that he would have been more willing to negotiate terms we could accept – or that one of his generals would.  But we never tried.

Clinton allowed sentiment to push us into the Balkan affair with the result among others of alienating the historically pro-Slavic Russians in order to gain the favor – well, it’s a bit hard to see whose favor we gained or what we got out of it.  The Balkans got the Danube bridges dropped and economic chaos. 

When one sends in the soldiers it is well to know what it is you want them to get for you.

Competent empire is never cheap, but it is far cheaper

View 767 Tuesday, March 19, 2013

I have most of my teeth, one of the great benefits of living in this modern age – when I was young almost no one kept their own teeth beyond the age of 70. Social Security was designed in a time when life expectancy at birth was fairly low due to infant mortality, but if you lived to age 65 you could expect another ten to twelve years if male and a couple of years longer if female; on the other hand, medical care for the elderly didn’t cost so much because there wasn’t a lot anyone could do to keep people going. There was plenty you could do for yourself, but that’s a different story. I see I am rambling again.

I have had a partial upper plate – what dentists call a flipper – since for more than fifty years, but a couple of months ago I managed to fall flat on my face on the sidewalk at dusk, and while I was able to catch my fall, sort of, I knocked out a front tooth, so another had to be added to my flipper – and Monday at lunch the glue or whatever they had used to attach it to gave way. I’m scheduled to do a video interview with Leo Laporte tomorrow at 3, so we scrambled to get to the dentist, resulting in my having an 0800 appointment today. For the last forty years I haven’t undertaken to be either civil or coherent before ten in the morning, but there was nothing for it. Fortunately I live in a village, and my dentist is in the next village so I had no problem.

All of which is a long tale on why I may be even more incoherent then usual today. I should be in form by tomorrow afternoon. No idea what we will talk about.

I am also trying to work up the energy to get back to doing silly things so you don’t have to. In anticipation of that we have built two rather amazing machines, both in handsome Thermaltake cases; one is Windows 7, and one is Windows 8. I am trying very hard to like Windows 8, but I haven’t really managed to make myself do it. Meanwhile it’s time to replace a couple of my aging main systems, but it’s also tax time: I’m not about to change horses in the middle of that stream. There’s still a lot going on out there in computer land and it’s all getting cheaper. The world of publishing has turned upside down – if you are contemplating getting into my racket writing books, the first thing to understand is that if your work has any legs at all, the eBook rights are likely to be worth a lot more than the print rights, so signing away the electronic rights for an unlimited period may be a terrible idea. I say this because a number of reputable publishing houses have opened new imprints to attract new writers, and the boiler plate language in their contracts is plain horrible. One demands electronic rights “for the life of the copyright”. Others actually accomplish the same thing without quite saying so.

Be careful out there.

I don’t do breaking news and I am trying to stay away from narrow political issues, but some issues illustrate political or economic issues of some importance.

In particular, Senator Elizabeth Warren is saying

"If we started in 1960 and we said that as productivity goes up, that is as workers are producing more, then the minimum wage is going to go up the same. And if that were the case then the minimum wage today would be about $22 an hour," she said, speaking to Dr. Arindrajit Dube, a University of Massachusetts Amherst professor who has studied the economic impacts of minimum wage. "So my question is Mr. Dube, with a minimum wage of $7.25 an hour, what happened to the other $14.75? It sure didn’t go to the worker."

http://www.huffingtonpost.com/2013/03/18/elizabeth-warren-minimum-wage_n_2900984.html

I am sure that the prospect of a $22/hour minimum wage excites a number of voters making considerably less than that. Of course any law that raised the minimum wage to that rate would also have to forbid employers from simply firing workers who don’t produce that much return on investment, which would also require a law forbidding them to go bankrupt; possibly a law requiring the firm’s customers to continue to do business with firms that raised their prices because of the minimum wage law? I realize that seems silly and beyond reason – but I will remind you that as the Roman Empire began its collapse, one desperate attempt to keep the economy going required that each man follow in the profession of his father; which had considerable effect on the economic collapse. Other desperate measures were attempted, most equally as flawed.

Also in the current news was the attempt by the government of Cyprus to bail out its banks by seizing 5 to 10% of all monies deposited in them (accompanied, of course, by a compulsory freeze on withdrawals from the banks). As I write this the Cyprus parliament has refused to give this power to government, and the government is looking for some other means to prevent the coming collapse of the banks. The government has gotten so far into debt that this radical move seemed like a good idea. I haven’t heard any proposals that the United States follow suit, but we have had compulsory bank holidays to prevent runs on the banks, and there certainly have been proposals to finance the US debt by taxing the savings of “the rich” including retirement savings. Some of those proposals have been from people usually taken seriously.

The notion of a “fair” wage is central to many socialist views of proper government. They are usually coupled with schemes to rationalize the economy: why should there be twenty brands of tooth paste? It is a wasteful practice. A rationally planned economy would prevent a great deal of effort wasted in competitive practices, thus leaving more to be paid to the workers. After all, the workers produce the goods: they have a right to a fair share, which should at least include a living wage.

The problem is that often a job cannot possibly produce enough return to warrant a “fair” wage. When the production doesn’t at least equal the cost, there isn’t a job to be had. Many ‘jobs’ are discretionary. You will pay someone to do something so that you don’t have to do it yourself, but if the cost is too high, you will just do it yourself, or go without that service entirely. Clearly there are things I would like to have done for me that I don’t think I can afford. Raising the minimum wage simply moves more jobs from the “I can afford that” to the “Can’t afford it” column. That is, it does in the real world. In Senator Warren’s world, her intentions are what matter: she means well. If her proposal ends up costing a number of people their jobs, that wasn’t her intent, so it doesn’t matter: we’ll just give them more benefits to make up for their loss.

I wish that were a parody, but it is not.

Milton Friedman once said that every economist knows that minimum wages either have no effect or create unemployment, and that this was not an observation, it was a definition. It should also be self evident.

The Huffington Post article on Senator Warren’s views on minimum wage went on to say

It didn’t appear that Warren was actually trying to make the case for a $22 an hour minimum wage, but rather highlighting the results of a recent study that showed flat minimum wage growth over the past 40-plus years coinciding with surging inequality across a number of economic indicators.

Warren went on to argue that raising the federal minimum wage to over $10 an hour in incremental steps over the next two years — a cause championed by President Barack Obama in his State of the Union address and since taken up in the Senate — would not be as damaging for businesses as some critics have argued.

I have not seen any rational argument for $10/hour as opposed to $22/hour other than the obvious statement that $10/hour doesn’t do as much harm as $22/hour would. But if the notion is a fair wage is a living wage, why not determine just what is “needed” by the worker and set the wage to that?

If the goal is to reduce inequality, then we should discuss ways to reduce inequality, including “disributist” schemes in which confiscated property is divided and given out equally to all, or by a lottery, or perhaps to those “deserving” more (to be determined by appointed or elected boards of equalization); but that does not seem to be what is proposed. Yet.

It’s lunch time, and I need to get back to the taxes.

So my question is Mr. Dube, with a minimum wage of $7.25 an hour, what happened to the other $14.75? It sure didn’t go to the worker

——————

My answer? It went for taxes, compliance with regulation, paying bunny inspectors and keeping obsolete military bases open. It went to Red China to service debt.

Ad nauseum?

B

 

Jerry,

Most of the "missing" $14.75 of that productivity-adjusted $22 an hour has gone into lower prices, of course. All manner of things cost far less in constant dollars these days than in 1960, due precisely to those vast improvements in productivity. And this cornucopia of cheap goods benefit most – wait for it – the people making $7.25 an hour. Most of whom Warren’s prescription would both put out of work and price out of much of the modest lifestyle they currently can afford.

Porkypine

We can all come up with places where the money went. The planned economy can always absorb more; there is never a shortage of people in need. Longer discussion in an upcoming mailbag.

“The president looks more and more like a king that the Constitution was designed to replace.”

<http://www.mcclatchydc.com/2013/03/19/186309/obama-turning-to-executive-power.html>

Roland Dobbins

The advantage of monarchy is that often the King is able to study his job rather than spend his life learning how to get the job.  Of course heredity isn’t terribly reliable, so over time we learned to limit the power of kings. Empire doesn’t need kings, and in fact introducing nepotism into imperial selection of officers and advisors usually produces terrible results even form a good emperor; Marcus Aurelius demonstrated that quite well.

It does appear that Mr. Obama favors the liberal interpretation of events: that he should be judged by his intentions not for prudentially predictable results.