Sunday, July 22, 2018

Week-end Wrap - July 21, 2018

Week-end Wrap - July 21, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

When a U.S. citizen heard he was on his own country�s drone target list, he wasn�t sure he believed it. After five near-misses, he does � and is suing the United States to contest his own execution 
by Matt Taibbi [Rolling Stone, via Naked Capitalism 7-20-18]
Not economics, but I'm having a really hard time not listening to the echoes of very old voices in my head: "Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety." And Taibbi has the next one in our wrap.

Taibbi: No, the Mythical �Center� Isn�t Sexy
by Matt Taibbi [Rolling Stone, via Naked Capitalism 7-17-18]
Taibbi provides an unrestrained response to New York Times columnist Frank Bruni's reaction to the surprise primary win of young Bronx Democrat Alexandria Ocasio-Cortez. Bruni channeled TPTB's dismay and alarm that Democratic Socialists have begun to score electoral victories at the Congressional level. A historical note: after the Non-Partisan League won an almost complete sweep of November 1916 elections in North Dakota and began to enact its program, including state-owned grain elevators, and a state bank, the New York Times fulminated about "bolshevism on the prairie."

The notion that Democrats need to look and act more like Republicans to win elections has been practically a religious tenet in Washington for more than 30 years. From the embrace of NAFTA to welfare reform to triangulation to repealing the Glass-Steagall Act to slobbering over Wesley Clark (instead of opposing the Iraq war) to hiring infamous Republican media hitman David Brock, this soul-sucking drift has been sold to voters as an electorally necessary compromise. Now we�re supposed to understand that it�s sexy, too? 
This is the Democratic Party that lost the presidency in 2016 to a crypto-fascist game-show host with near-record negatives � only ex-Klansman David Duke in 1992 was a more roundly-despised candidate than Trump � and legislatively has for a decade now suffered mass losses on the national and state levels
....What actual people are against importing cheap Canadian generic pharmaceuticals? Where�s the group of people intent on protecting our thousand-headed hydra of insurers, so that doctors and hospitals can waste time and money on paperwork? What individual human being is out there who just can�t stand the thought of allowing Medicare to negotiate lower bulk prices
For that matter, where�s that sexy vote-rich crowd of people who are hell-bent on making sure banks have easier stress tests, and don�t have to increase their capital reserves? Where�s the mob that really wants to preserve the payroll-tax cutoff for high-income earners? That wants desperately to remove Malaysia from a list of human traffickers so it can join a free-trade pact? 
There are no such people. These are not human positions. These are the positions of health insurers, pharmaceutical companies, job-exporting manufacturers, defense contractors and other high-dollar donors. 
Nobody sits around the dinner table demanding that we keep derivative exchanges opaque, or retain the carried-interest tax break.
Compare Taibbi's to the very interesting and revealing article in The Washington Monthly by its editor in chief, Paul Glastris, �Winning Is Not Enough: Democrats are focused on takingback power�but our democracy depends on them keeping it. To do that, they haveto start thinking differently,� Glastris was a special assistant and senior speechwriter to President Bill Clinton from September 1998 to January 2001. He wrote over 200 speeches for the President, including the education sections of the 1999 and 2000 State of the Union addresses. Now he is editor in chief of The Washington Monthly. This is as Establishment as it gets. Glastris writes:
To maximize the voting power of its core supporters, the party must get over its squeamishness and aggressively push policies designed to raise turnout among young people and minorities. At the same time, to expand its geographic reach, it needs to introduce new ideas into its agenda that appeal both to the base and to rural and working-class whites�.
Glastris then goes on to suggest a number of new ideas. But there is one idea that Glastris entirely omits, and its omission is very, very revealing. Glastris makes no mention at all of the need to confront Wall Street, reorient banking and finance, and return them to a role of complete subservience to the rest of the economy.

On Class and Climate Change
by Jon Larson, July 15, 2018 [Real Economics]
Back in the day when Marxists preached that they were the friends, advocates, and only true representatives of the Proletariat, there was always something demeaning in their analysis. When someone picks strawberries all day in the hot sun, the Marxist description of the Proletariat and their troubles is still surprisingly accurate. But what do you call an farmer with 2500 acres under cultivation, or an engineer, or a big building contractor, or any number of important and often high paying occupations? They are obviously Industrial Class jobs but they all come with very different problems than face someone doing stoop labor. Obviously, there is an incredible amount of stratification within the occupations that can be found under the heading of �organizing and performing the community�s necessary tasks.� 
Just as the Industrial Classes are stratified, so are the Leisure Classes. There is a large gap in income and status between a pickpocket and a hedge fund manager. But while there are hundreds of differences between the two major classes, many quite profound, the most telling is that when the Leisure Classes engage in conspicuous consumption and waste, their highest calling is uselessness. On the other hand, the goal of the Industrial Class is to be useful. 
This class analysis is almost universally despised by the academic idea police. The right wing hates it because so many of their elites are little more than well-dressed thieves. The �left� (especially the Marxist varieties) hates it because it opens the possibility that there are enlightened, imaginative, and quite necessary �capitalists.� But it continues to be relevant because it describes the existing social order so much better than probably all the competing class descriptions combined.

Trump's gift to the Kochs: names and addresses of 501(c)(4) and 501(c)(6) donors no longer required
by Pam Martens and Russ Martens: July 19, 2018 [Wall Street on Parade]
On Monday, in a brazen nod to Charles Koch, the U.S. Treasury announced it would no longer require the names and addresses of donors to be supplied on Federal tax returns for 501(c)(4) and 501(c)(6) tax exempt organizations, the very kind that the Koctopus has used to funnel hundreds of millions of dollars through the tentacles of their election meddling web of front groups. The public has never had access to those names and addresses but now neither the public nor the IRS will have the information, making it impossible for the IRS to quickly spot patterns of fraud. 
Two of those Koch-related front groups are Americans for Prosperity (AFP) and Freedom Partners. One man who owes his Senate seat to those groups is Ron Johnson of Wisconson, Chair of the U.S. Senate�s Committee on Homeland Security & Governmental Affairs. In his tight 2016 race against former Democratic Senator Russ Feingold, Americans for Prosperity and the Freedom Partners Action Fund ran ad campaigns for Johnson. AFP used its get-out-the-vote machinery to further boost his chances. Last year, Johnson saluted AFP in this ad
According to SourceWatch, as of April, 12 people who previously worked at Freedom Partners are now working in the Trump administration. In addition, the perpetual on-air face of the Trump administration, Kellyanne Conway, formerly consulted for both Americans for Prosperity and Freedom Partners, according to the public watchdog, Public Citizen. Then there was that strange hiring by Trump of an even dozen of Jones Day lawyers on the very day of his inauguration on January 20, 2017. According to Public Citizen, two of the main hires from Jones Day, White House Counsel Don McGahn and Ann Donaldson, Chief of Staff to McGahn, both previously represented Freedom Partners.

North Carolina: The state income tax cap amendment is bad news. Here�s why.
Orange County Democratic Party Progressive Caucus treasurer Lee Nackman wrote a letter to the editor of the Raleigh News and Observer, and it was printed on July 13.
Income tax caps are bad policy because a state�s revenue needs can vary unpredictably over time and income tax caps eliminate flexibility. If income taxes can�t be raised to meet needs, a state�s primary alternative is to raise sales taxes (and various usage fees).
Sales taxes (and usage fees) impact poor people much more than they impact wealthy people: Poor people must spend most of their income, subjecting most of their income to sales tax, while wealthier people spend a much lower percentage of their income.
Moreover, the specific cap passed in SB 75 locks in rates that are lower than recent historical rates and the new flat-rate tax structure shifts more of the income tax burden to lower earners.
USA income inequality now historically worse ever in five states
by Aimee Picchi July 19, 2018 [ Moneywatch, via Naked Capitalism 7-20-18]
Across the country, the top-earning households took home 22 percent of all income in 2015, the latest year for which the IRS has data. That's just 1.9 percentage points lower than 1928's record share of 23.9 percent of income.... But that 1928 peak has been surpassed in New York, Florida, Connecticut, Nevada and Wyoming.... Americans need at least $421,926 in annual income to break into the top 1 percent....
Bernie Sanders: Bold Politics Is Good Politics 
[MIT Technology Review, via Naked Capitalism 7-15-18]

Why going cashless is discriminatory � and what�s being done to stop it 
[Weather Underground, via Naked Capitalism 7-21-2018]

Wind turbine sizes seeing "unprecedented growth,"
[CleanTechnica, via American Wind Energy Association (7/16) ]
....the next-generation of wind turbines are being brought ever nearer to reality, such as 4 to 5 megawatt (MW) onshore wind turbine models with 160- to 175-meter rotors, and offshore models with capacities of 12 to 15 MW and rotors in excess of 200 to 250 meters. We�ve especially seen this play out in the offshore wind energy market, of late, with the recent news that MHI Vestas� 9.5 MW wind turbine has moved a step closer to commercial installation, and the announcement in March made by GE Renewable Energy unveiling its mammoth 12 MW Haliade-X offshore wind turbine, which measures in at 260 meters in height and boasting a 220-meter rotor....
Each region is reliant upon specific types of wind turbines to match the wind resources available: China and India rely on 2 to 2.5 MW wind turbines with power ratings designed for ultra-low wind speeds, whereas the US is dominated by high capacity factor turbines.
Siemens Gamesa Passed Vestas As Leading Wind Manufacturer in 2017
 by Joshua S Hill, April 23rd, 2018  [Clean Technica]

NextEra facility tour highlights compatibility between wind, farming
[The Edmond Sun (Okla.) , via American Wind Energy Association (7/13)]
NextEra Energy Resources recently teamed up with Future Farmers of America to take 16 FFA advisers on a three-day tour across Oklahoma, highlighting the complementary nature of wind and farming. "These advisors are also great role models for our next generation, so it's a wonderful opportunity to show them first-hand what it takes to be a wind technician, which is among the fastest growing jobs in the United States," said NextEra project director of renewable development Casey Moye.
Denver pledges 100% renewables by 2030
[CleanTechnica, via American Wind Energy Association (7/18)
Denver has become the 10th Colorado city to pledge to use 100% renewable energy, and it plans to meet that standard by 2030. "Climate change threatens our people directly, putting our health, environment and economy -- our very way of life -- at risk," Mayor Michael Hancock said.
National Renewable Energy Laboratory's Musial: Floating offshore-wind industry must learn from oil, gas on building offshore platforms
[E and P magazine online, via American Wind Energy Association (7/18)]
The oil and gas industry has valuable insights to share with the floating offshore-wind sector regarding floating platforms and other technologies, says Walt Musial, the National Renewable Energy Laboratory's principal engineer and offshore wind manager. The NREL says 11 floating offshore wind farms with a combined capacity of 229 megawatts are in the early stages of development.
The article includes the graph below. Note North Carolina has greater offshore wind energy potential than all other Atlantic states after Massachusetts and Florida.

Coal, nuclear bailout plan could cost $17.2B annually, study says
[The Examiner (Washington, D.C.), via American Wind Energy Association (7/19)]
It would cost between an estimated $16.7 billion and $17.2 billion annually to bail out the nation's ailing coal-burning and nuclear power plants, according to a Brattle study commissioned by the American Wind Energy Association and other groups. The report, which is based on a Trump administration memo, said annual costs could be as high as $35 billion, depending on the approved payout system.
Energy Dept.: Wind-energy costs fell one-third from 2010 to 2016
[Houston Chronicle (tiered subscription model), via American Wind Energy Association (7/13)] 
Technological advances, better manufacturing processes and declining installation costs resulted in a cost reduction by one-third for wind energy between 2010 and 2016, according to the Energy Department. The domestic production of wind-turbine components also increased during that period, it noted.
ACORE launches renewables investment goal of $1T by 2030
[Utility Dive, via American Wind Energy Association (7/13)] 
The American Council on Renewable Energy has introduced a new campaign through which it hopes to stimulate $1 trillion worth of investments in the US renewable energy industry by 2030. "[Renewable energy] is one of the nation's most important drivers for new investment and job creation," ACORE President and CEO Gregory Wetstone said.
This does not come close to what's really needed. By contrast, two years ago, China's electricity transmission company proposed a $50 trillion program to build transmission lines from new solar energy sites in countries near the equator, to population centers further north.

Chicago beginning to solve nation's worst rail bottleneck
[Railway Age, July 18, 2018]
Chicago�s rail labyrinth sees about 1,300 freight and passenger trains pass through the city on any given day, and planned work aims to simplify traffic for all of those trains, transportation officials said during a tour of rail infrastructure. Full Article
The $4.4 billion plan began in 2003, when transportation officials came together to put an end to bottlenecks in service that halted the flow of goods in and out of the state and interrupted passenger service. CREATE entails 70 rail and highway infrastructure improvement projects. So far, 29 projects have been completed and $2 billion has been spent or funded primarily through railroad and government partnerships.... This June, the U.S. Department of Transportation (USDOT) recommended 26 projects receive a total of $1.54 billion in federal support as part of the FY18 Infrastructure for Rebuilding America (INFRA) grant program.
New York City sets $100M to upgrade freight transportation
[Railway Age, July 18, 2018]
Rail is central to an ambitious plan to streamline freight infrastructure while reducing truck emissions and creating thousands of new jobs in New York City. Plans call for a vast rail-served distribution center in Brooklyn, and transload yards in two boroughs. Full Article
NYDOT sets $19M to transform CSX yard
[Railway Age, July 16, 2018]
New York State awarded $19 million toward construction of Central New York�s first Inland Port in DeWitt, to help move containerized freight between the Port of New York and New Jersey and the existing CSX terminal east of Syracuse. Full Article
China approves Ningxia high-speed line
[Railway Age, July 18, 2018]
China's top economic planning authority, the National Development and Reform Commission, has approved the construction of the western section of a high-speed line linking Baotou, the second-largest city in Inner Mongolia, with Yinchuan. Full Article
[Railway Age, July 17, 2018]
Global mining conglomerate Rio Tinto marked the first delivery of iron ore by an autonomous train as part of its US$940 million AutoHaul program operating to its port facilities in Western Australia. Full Article
STV Inc. about to initiate tunnel boring on 2.6 mile extension of Los Angeles Metro Purple Line
by William C. Vantuono, July 16, 2018 [Railway Age]

Global Aerospace Industry had direct revenues of $838 billion in 2017
by Richard Aboulafia and Kevin Michaels, July 16, 2018 [Aviation Week and Space Technology]
A joint research project of Aerodynamic Advisory and Teal Group found that world aerospace industry produced direct revenues of US$838 billion in 2017. USA was the largest producers, with 49% of world total.
The activity breakdown of the US$838 billion industry reflects the growing importance of maintenance, repair and overhaul, which is just over US$220 billion in output, including �wrench turning� activities, upgrades, and associated parts and components. Much of this activity isn�t captured in conventional aerospace industry estimates. Military aircraft maintenance is a good example. Approximately US$70 billion is spent annually, with a significant portion performed by uniformed personnel for field and depot maintenance, as well as aircraft upgrades. Military maintenance organizations usually don�t belong to national industry associations. 
Civil and military aircraft and engine manufacturing, including extended supply chains, account for 54% of the global aerospace activity. Here, AeroDynamic and Teal analyzed activity the multi-tier supply chains of OEMs. Aircraft OEMs, for example, procure 60-70% of the cost of an aircraft from suppliers. Tier 1 system and aerostructures suppliers, in turn, source 40-60% of the cost of their products from sub-tier suppliers. The same is true for Tier 2 and 3 suppliers. 
Other notable categories include satellites & space (7%) and missiles & UAVs (5%). Despite the growth of UAV fleets, output of these air vehicles comes to just under US$3 billion annually. This is around 10% of the value of crewed combat aircraft.
Boeing CEO was interviewed at Boeing Chicago headquartersby Joe Anselmo and Graham Warwick, July 11, 2018 [Aviation Week and Space Technology]
AW&ST: Is there no more boom-bust cycle in commercial aircraft? We have backlogs measured in 7-8 years of production, not 1-2 years. We have around 5,800 commercial airplanes in backlog, globally distributed. In past decades, it was concentrated in the U.S. and Europe, in hub-and-spoke traffic subject to regional economics. Today, it�s a point-to-point connected world-�more than 180 new 787 city pairs have emerged just since we launched the Dreamliner.

The reality seems to be you can�t build airplanes fast enough to meet demand. That is the bigger challenge right now. On the 737, we�ve ramped [production] to 52 a month and 57 a month next year, and all of the market signals are telling us there is upward pressure [to go higher]. We�re filling slots out in 2023 and beyond. On the widebody side, we�re taking the 787 line from 12 a month to 14 in 2019.

Are we on the cusp of a new space age? I think we are. I�ve been at Boeing more than 30 years, and when I look at the amount of energy, capital and focus that is going into the space business, it has never been like this. We are making investments in our United Launch Alliance, and the amount of focus I see across SpaceX, Blue Origin and a number of other players is great. As more destinations in space grow up�microgravity manufacturing, space tourism�we will need low-Earth-orbit transportation systems.

We also see a lot of momentum in the marketplace for nanosatellites and networked satellites, and an almost insatiable demand for commercial communications bandwidth. We are making investments in things like the Phantom Express [reusable spaceplane] with the ability to do 10 satellite launches in 10 days in a reusable vehicle that will launch and deliver a satellite and return to Earth. We are building that prototype right now.
Astronauts explain why nobody has visited the moon in more than 45 years � and the reasons are depressing
by Dave Mosher and Hilary Brueck July 14, 2018 [Business Insider]
More than 45 years after the most recent crewed moon landing � Apollo 17 in December 1972 � there are plenty of reasons to return people to Earth's giant, dusty satellite and stay there. 
Researchers and entrepreneurs think a crewed base on the moon could evolve into a fuel depot for deep-space missions, lead to the creation of unprecedented space telescopes, make it easier to live on Mars, and solve longstanding scientific mysteries about Earth and the moon's creation. A lunar base could even become a thriving off-world economy, perhaps one built around lunar space tourism.... 
"NASA's portion of the federal budget peaked at 4% in 1965," the Apollo 7 astronaut Walter Cunningham said during congressional testimony in 2015. "For the past 40 years it has remained below 1%, and for the last 15 years it has been driving toward 0.4% of the federal budget." ....A 2005 report by NASA estimated that returning to the moon would cost about $104 billion ($133 billion today, with inflation) over about 13 years. The Apollo program cost about $120 billion in today's dollars. 
From the perspective of astronauts, it's about the mission. The process of designing, engineering, and testing a spacecraft that could get people to another world easily outlasts a two-term president. But there's a predictable pattern of incoming presidents and lawmakers scrapping the previous leader's space-exploration priorities.... In 2004, for example, the Bush administration tasked NASA with coming up with a way to replace the space shuttle, which was set to retire, and also return to the moon. The agency came up with the Constellation program to land astronauts on the moon using a rocket called Ares and a spaceship called Orion. 
NASA spent $9 billion over five years designing, building, and testing hardware for that human-spaceflight program. Yet after President Barack Obama took office � and the Government Accountability Office released a report about NASA's inability to estimate Constellation's cost � Obama pushed to scrap the program and signed off on the SLS rocket instead.... Such frequent changes to NASA's expensive priorities have led to cancellation after cancellation, a loss of about $20 billion, and years of wasted time and momentum. 
...."There's this generation of billionaires who are space nuts, which is great," the astronaut Jeffrey Hoffman told journalists during a roundtable earlier this year. "The innovation that's been going on over the last 10 years in spaceflight never would've happened if it was just NASA and Boeing and Lockheed. Because there was no motivation to reduce the cost or change the way we do it."
Engineers at Sandia National Labs have designed a cleaner, quieter, non-polluting research vessel powered by hydrogen. Will they find funding for it?
by Stephen Mraz, July 12, 2018 [Machine Design]
A hydrogen-powered research vessel has never been studied or proven�until now. Sandia National Labs engineers recently showed that it is technically and economically feasible to build such a vessel that would be consistent with marine regulations. The project team nicknamed the vessel the �Zero-V,� short for zero-emissions research vessel. 
One of the biggest benefits of using hydrogen to power a ship is the absence of ecologically damaging fuel spills. According to Sandia scientist Lennie Klebanoff, it is impossible to have a polluting hydrogen spill on the water. More buoyant than helium, hydrogen rises on its own and eventually escapes into outer space. 
Fuel cells even generate water so pure that the ship�s crew can drink it (with conditioning), or use it for scientific experiments; this reduces the need to desalinate seawater, which currently consumes large amounts of energy. Fuel cells are also electrical devices and, as such, offer a faster power response than internal combustion engines.
New Frontier for Electric Vehicles: Cobalt-Free Car Batteries
by Giles Kirkland, July 16, 2018 [Machine Design]
....The cost of cobalt is also set to rise as an effect of its dwindling supplies. In fact, the Helmholtz Institute Ulm (HIU) in Germany predicted that supply of the metal will hit critically low levels by 2050, leading to an increased need to replace its use with a new technology. 
Finally, from political, ethical, and environmental standpoints, the material is also seen as an ingredient that quickly needs replacing. The mining process is notoriously unhealthy for its workers, with the U.S. Centers for Disease Control and Prevention reporting that �chronic exposure to cobalt-containing hard metal (dust or fume) can result in a serious lung disease called �hard metal lung disease.�� 
....lithium-manganese spinel and lithium nickel cobalt aluminum oxide both use significantly less cobalt, and may be easier to alter in order to remove it all together. Other advances in chemistry, such as lithium-iron phosphate may require zero cobalt.... One of the most promising potential advances is in the creation of a solid-state lithium battery. These may require no cobalt at all and would work perfectly in cars and other electric vehicles. However, the actual production process and potential costs behind these are unproven.

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