Archives for category: Economy

“The Texas educational system inundates the children with the almost mythical stories of Sam Houston, Stephen F. Austin, and other Texan heroes. This perpetuates the feeling that Texans are superior to others. Social Identity Theory claims that in-group biases are a direct need to feel superior to another group. By reinforcing such ideals of Texas history at an early age, they are indirectly making Texans feel superior to other states.”

Don’t mess with Texas, Justin R.Erenkranz, retrieved on February 18, 2021

In fact, Texans are so proud of their state, and so confident in themselves, that their power grid, run by ERCOT – Electric Reliability Council of Texas, has no connections linking it to the outside world.
Yes, your eyes are OK. Texas – most of it, anyway, cannot import electric energy. No matter what!

For those who know anything about power management, this is insane.
For the rest of the people, this sounds like gibberish.

Who cares where the power comes from?!?

Until it stops coming… exactly when you need it most!

Texas produces and consumes more electricity than any other state, but it is the only state in the continental United States that runs a stand-alone electricity grid, which was designed to keep the state’s energy system independent and isolated from other markets.

‘OK. But surely, there are also other systems which are independent. And isolated. What about Hawai’i? It’s too far away to connect itself with anybody else and it’s doing just fine.’

True enough. And I can name a few more, easily. Only most of them are independent because they are isolated, not by design.
And, exactly because they are isolated, they are run with utmost care. More precautions are taken than in ‘normal’ situations.

‘Precaution’ meaning, in this case, spare capacity.
The responsible people running those systems make sure that, when push comes to shove, somebody is there to deliver the goods. The megawatts of power.

Since 2010, ERCOT’s reserve margin – the buffer between what it can produce vs. forecasted demand – has dropped to about 10% from about 20%. This has put pressure on generators during electricity demand spikes, making the grid less flexible, NERC said.

NERC stands for North American Electric Reliability Corporation. Which corporation, in December 2020, had released “a long term reliability study” maintaining that “ERCOT’s market and system operations have been successful over the last several years even as demand has continued to rise in Texas“. It was the same study which had mentioned that the grid was becoming “less flexible“….

SEC Rule 156 requires mutual funds to tell investors not to base their expectations of future results on past performance before they invest.

Oops…

Reality is an Acquired Taste.

Past performance is not… John Brown, Forbes, 2016

Maybe we need to reconsider our infatuation with ‘just in time management’.
While ‘just in time management’ maximizes profits by streamlining inventory, it works its magic only when everything goes according to plan. And the stricter the streamlining, the harsher the consequences of anything not going according to plan!

As people in Texas have just learned.

And there’s something else which bothers me ever since I’ve started writing this post.
How much sense does it make to be able to pipe oil all the way down from Canada to the refineries lining the Gulf of Texas when you end up freezing to death because you don’t have enough electricity to operate those refineries?!?

And no, I’m not making fun of the ordinary people who suffer the consequences!
This being the moment when I feel the need to remind you that the author of this blog – that’s me, tries to asses the consequences of our limited consciousness. Of the fact that none of us knows much. And, furthermore, that very few of us admit that!
Which consequences might be – as too often are, tragic.

Specially when those who are not aware that their knowledge is limited happen to be invested with critical decision power.

‘Are you nuts? or something?
Isn’t exactly this what the Europeans had been doing all over the world? For the last five centuries?
And you attempt to ‘nuance’ it?
Aren’t you ashamed of yourself?!?’

Ashamed of what some of my predecessors have done, yes!
Also ashamed of what some of my contemporaries are doing.
Right now, as opposed to back then.

And since there’s nothing to be done about the past, but to learn from it, and everything to be done about the future, right now, I’d rather have at least some of those statues still standing.

In public squares!
Maybe not in the same places, maybe not in the same settings. But still in public!
Hiding them in museums would mean taking them out of the limelight. Out of public scrutiny!
If we are to learn anything from past mistakes we must focus on them. Putting those statues aside because we feel too strongly about them would only serve those who don’t want to admit mistakes had been perpetrated. Who actually don’t want to own our past.

Those who had promoted Jim Crow legislation had erected the confederate statues as a symbol of their regained public influence.
Obliterating the statues won’t make anything suddenly right. The consequences of Jim Crow won’t disappear, as if by magic, along with the statues. They didn’t disappear when the legislation had been abolished and they won’t disappear now.
If we want to put the past behind us, we must accomplish what has to be accomplished. We need to make things right, not hide away the prickliest pieces of evidence.

Demolishing statues won’t help any of those living in still segregated neighborhoods. Won’t help the children going to heavily underfunded schools. And so on…
Demolishing statues will only help those who will certainly ask, in a few short years, if nothing changes in our hearts and minds:

What more do they want?!?

We’ve even dispatched those damn statues!!!

What next?

Crows are deemed to be the smartest birds around.

“Crows are the hominins of the bird kingdom,”
“Like our own ancestors, they evolved proportionally massive brains by increasing both their body size and brain size at the same time, with the brain size increase happening even more rapidly.”
Dr. Jeroen Smaers

Crows have also witnessed our evolution.

All life transforms its habitat.
Living things actually pass ‘segments’ of their habitat through their digestive systems. Digest them. Consume the useful components and discard the rest. And, finally, excrete whatever their metabolism had turned the useful components into. Urea and carbon dioxide, to name but a couple. For us, mammals. Other living creatures contribute something else to their environments.

The blue-green algae of yore are believed to have produced the oxygen we breathe now.
Wolf Reintroduction Changes Ecosystem in Yellowstone“.
Humans alter their ‘nesting’ places in ways sometimes detrimental to their own well being.

So, basically, we – as a society, actually ‘digest’ our planet. Our home… Our only home!

Are we happy with the results?

Are you happy with what you’ve done to your home?
To OUR home?

Two days ago, I did a very stupid thing.
I cleaned it, then I forgot to turn it back on.

A small freezer.

This morning, after throwing everything away and while washing the plastic containers, I realized – again, how much we depend on each-other.

The freezer itself was made by somebody else.
The electric current it uses comes into my home as a consequence of many people cooperating for this purpose.
The food I cooked and stashed away had been grown by an unknown number of toiling individuals and distributed, then sold, by yet another legion.
The garbage I made on this occasion will be disposed of by yet another team of hard working people.

I’m grateful to all these individuals!

All of them make my very life possible.

All of YOU, actually!

Thank you.

Happy Winter Solstice, everybody!

In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.” Milton Friedman, 1970

Between 1776 and 1970 the world had leaped forward. Technologically, economically and socially. Not only that we’ve managed to learn so much about the world and to produce immense wealth but we’ve somehow managed to ‘spread around’ the results. The proportion of people who had improved their fortunes had grown constantly during the entire period.

The majority of Americans share in economic growth through the wages they receive for their labor, rather than through investment income. Unfortunately, many of these workers have fared poorly in recent decades. Since the early 1970s, the hourly inflation-adjusted wages received by the typical worker have barely risen, growing only 0.2% per year. In other words, though the economy has been growing, the primary way most people benefit from that growth has almost completely stalled.” Jay Shambaugh, Ryan Nunn, HBR

Isaac Newton hadn’t invented gravitation. He only ‘noticed’ it. Put it in words.
Adam Smith hadn’t invented the free market. He had noticed how it used to work and opened our eyes about it.
For what ever reasons, enough of us had chosen to close those eyes back. And have reached the conclusion that ‘greed is good’.

Milton Friedman was both horribly wrong and exactly right.

He was right in the sense that he had gouged correctly what the ‘general public’ wanted/was ready to accept. “in accordance with their desires, which generally will be to make as much money as possible

He was horribly wrong in the sense that he had perpetuated Marx’s error. Karl’s, not Groucho’s.

Money isn’t everything. Life beats it to the post.
Profit is, indeed, essential. Only it is nothing but an indicator. About how efficient a corporation is.
Meanwhile the role of a corporation is to accomplish – as Friedman himself had dully noted, the will of the shareholders.

The problem arises from the fact that ‘near mindedness’ blinds.
If/when both shareholders and management have nothing but ‘money’ in their scopes the market actually looses its freedom.

Economic agents no longer converge towards the market to solve each-others problems – like Smith had noticed, but to ‘make money’.

Not the same thing. Not by a long shot.

‘For things to work as intended, there must be a rule’.

Errr…

‘For things to work, there must be at least some consistency involved’.

This is a far better starting point!

An example would be fine?

Then imagine an Earth where the gravitational field was haphazard. In space and time. Where two lumps of dirt, a k a mountains, sometimes pulled at each other while some other times pushed. With no rules involved whatsoever.
Or where sometimes wood needed oxygen to burn while some other times – or in some other places, the presence of nitrogen was enough for wood to burst into flames.
Need some more? Then how about a place where dogs breed with cows. And also with butterflies. Only not always. And not in a constant manner.

Have you stopped laughing?
Well, this was how our ancestors imagined the Earth.
Sometimes after a mutation had provided them with the most powerful brain ever, our forefathers had learned to speak. To ‘trade’ information. Soon after they has started to develop something Humberto Maturana called ‘the ability of an observer to observe themselves while making observations’. ‘Self awareness’ for short. Or ‘conscience’ in everyday parlance.

Imagine a self-aware observer watching the sun go down. A rather smart one. One with a vivid enough imagination to ask ‘what if the sun will not come up tomorrow morning’…
Stonehenge has suddenly acquired a new meaning, right?

That was why God had so much traction. Simply because it gave sense to everything. It lend meaning to everything under the sun. And beyond!

In time, under God’s protection, we invented science. And, slowly but surely, we’ve started apportioning meaning ourselves.
Meaning we’ve started to take for granted.
Meaning which no longer depended on any third party!

Only we’ve gradually forgotten what science is really about.

Why we had developed it in the first place.

We had forgotten that science is wrong by definition.
That, by following this path, we’ll be forever able to find new meaning but that we’ll never be able to find ‘the’ meaning.

And now, that we’ve ‘killed’ God – as no longer necessary, we rely solely on the meaning we’ve already affixed to the things we already know.
To the things we consider to know… conveniently forgetting what science taught us….

Faced with unforeseen crises – unforeseen, not unforeseeable, we are left powerless.
Having taken so much for granted – our knowledge about the world and our ability to overcome everything the nature throws at us, above all, we find ourselves bereaved of our erstwhile powers.

Are we going to rediscover intellectual humility? And the ability to take advice? From the most unlikely teacher?

Or else?

One way to interpret Maslow’s pyramid of needs is to consider that an individual might become a full fledged human only after having climbed to the ‘fifth floor’.

The key word here being “might”!

Because nothing mandates that all those who have overcome the material constraints of this world and have successfully integrated themselves in the social milieu will ever become a ‘better version of themselves’.

Need examples? Have you ever heard about people like Bernie Madoff, Martin Shkreli or Myron Scholes?

‘But the last guy, Myron Scholes, was recognized by the Nobel committee as a world class economist!’
Exactly! What more could a person want? Money, fame, worldwide recognition… he was on the fast track to becoming whoever he wanted…
Yet he had chosen to associate himself with one of the deepest financial black-hole ever… Knowingly, unknowingly… doesn’t matter!

‘But what does it mean to become a full fledged human?’

To be free. To consider them-self a free person and to be recognized as such by their peers.

‘Scholes wasn’t a free person?!? Shkreli?!? Madoff?!?’

Nope. Neither was free from greed!
Greed for money, power, public recognition… or any combination thereof.

‘But “greed is good”!!! Isn’t this the current mantra? Aren’t we all driven by this sentiment?!?’

First of all, greed is not good. Read Adam Smith’s Theory of Moral Sentiment.
But yes, we are bombarded from all sides with this notion. That ‘greed is good. That greed is the engine of capitalism, which capitalism has brought us here. Where it is good.’

Yes, here it is indeed good. Only for fewer and fewer of us. It used to be better but since ‘greed has become good’ every ‘bump’ we encounter along the ‘free market’ road has proven to be quite a challenge. An insurmountable challenge for more and more of us.
An unsustainable arrangement. For us, as a community.
And yes, capitalism is the best economic paradigm to date. Only, as all paradigms, it has to be put in practice. By us, the people. In the right way. In the free market way.
Only we are no longer free! Those who cannot escape their sentiment may not consider themselves free. And too many of us have been enslaved by their greed!

‘But greed is written in our DNA!’

Indeed! So is the urge to have sex!
Only we’ve managed to teach ourselves, community wise, that while sex is good, rape is bad!
Not so long ago, rape was more or less condoned. ‘She must have enticed him’. ‘What was she doing there at that hour?’ And so on…
Nowadays, rape is shunned. By most of us.

Only we still live surrounded by rape culture. Seeped in greed.

Will we ever learn?
Will we, as a community, ‘actualize’ ourselves?

US Initial Jobless Claims, provided by the US Department of Labor, provides underlying data on how many new people have filed for unemployment benefits in the previous week. We can gauge economic conditions with respect to employment. As more new individuals file for unemployment benefits, fewer individuals in the economy have jobs. For example, initial […]

The US Unemployment Situation is Stunning — ASYMMETRY® Observations

This being the most convincing argument that we really need to quit ‘smoking’.

Just think of it.
Inhale, exhale.
Inhale, exhale.
Inhale, exhale…

I know you can do this, breathe, without thinking.
You’ve actually done it since your birth. And you’ll continue doing it after you’ll have reached the end of this post.
But right now you should be fully aware that your lungs have only one opening.

What has to come out – what doesn’t belong in there, needs to exit from where it came in in the first place. Which is rather hard for anything which isn’t air.
That’s why dust, tar, or even microbes, should not go in there at all.

Quit smoking. And quit belching smoke into the atmosphere.

Let’s get to the second part of the post. Presumably, the more interesting one.
Click on the image and read the whole thing.
Now tell me why would somebody attempt to ‘debunk’ such a lie in the first place? Is smoking something worth arguing for?

The anti-smoking industry is happy to carry on misleading people on this subject because that is how they make their money. I would guess that the reason many people who know better do nothing to correct this misconception is simply that they think that if people stop smoking as a result of a little white lie then so be it!
Yes it is myth that smokers have black lungs! They would probably all be very dead long before they could become an organ donor.

Oops… so the whole thing revolves, again, around money…
And, if I understand correctly the point proposed by the author quoted above, a certain Fredrik Eich, there isn’t much of a difference between being duped into giving up and starting/continuing to smoke.

No, I don’t like being duped myself.
That’s why I’m telling it straight.
Lungs have only one opening. Don’t let yourselves be duped into believing that smoking isn’t that bad for you. That some smog is inevitable for a thriving economy.
After all, this is how ‘they’ make ‘their’ money.

Now, after proof-reading this, I wonder.
What do the dupers breathe?
Do they have their, private, atmosphere?
Have they duped themselves into believing everything is as pink as a pair of healthy lungs?

As a species, I mean…

We’ve ‘invented’ mutual respect.
Based on it, we created the two institutions which allowed us to get where we are now. Democracy and free market capitalism.

I’ll make a short detour for those who are not ‘convinced’.

Democracy, the functional kind, starts from the premise that it is impossible for an individual to know everything. And that together we know much more than each of us. This being the reason for any democratic process starting with an intense discussion. Whoever has something to say, takes the stand and whoever is interested in the well being of the community pays attention. To learn where to cast their votes.

Free market capitalism starts, too, from the premise that it is impossible for an individual to know everything. That nobody, be it an individual or a group of people, might be smart enough to call all the economic shots needed for entire society to ‘feed itself’ on the long run.

These two fundamental institutions operate on the basis of mutual respect between those who live within them. The people exchange ideas and goods on the principle that the transactions are done voluntarily and in good faith. That deception is just an exception.

These two institutions made it possible for us to cooperate into building the present reality. We have developed enough technology that we are able to produce enough food for everybody.
We went to the moon
We have enough weapons to destroy the entire planet.
Each of us can communicate, almost instantly, with almost anyone on the planet.

And? What do we do in these conditions?
Although there still are many of us who are starving, we throw away food. For various reasons.
Most satellites are used (and) for military purposes.
Although we could not have ‘arrived’ if we hadn’t ‘invented’ mutual respect, we currently use information technology mainly to spread fake news and ‘consume’ pornography.

Is this really okay?
How much longer is this going to last?

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