It Sounded So Good When They Promised To Solve All Of Our Problems

The people who sold the American voters on having the government assume collective responsibility for major societal problems all seemed at the time to be fundamentally decent (if flawed) men.  Men like Franklin Roosevelt, John F. Kennedy, Lyndon Johnson, and Jimmy Carter.  If only we gave control over the big problems to the federal government -- headed at the time by them -- then shortly everyone would have a secure retirement, low income people and old people would have free medical care, poverty would be reduced and then eliminated, and so much more.  All significant down side risk of life, gone!  And it would all be run by caring, decent people like themselves.  Then finally along came the ultimate saint, Barack Obama, selling Hope! Change! affordable healthcare for all, and the healing of the planet.  Of course we would give this great man the reins (and massive new legislation) so he could save the country and the world.

Well, guess what?  With the voters' blessing these guys have created a gigantic apparatus of government that swallows some $4 trillion every year and is supposed to solve every human problem, and as of January 20, 2017 it's all going to be run by one or the other of Donald Trump or Hillary Clinton.  Forget your image of the warm and fuzzy caring mother government and take your pick:  give control of your annual $4 trillion to a crazed, self-absorbed ego-maniac, or alternatively to a crazed, self-absorbed crooked ego-maniac.  Isn't government great?

And, after 80 or so years of promises and tens of trillions spent, have any of the major problems been solved?  Of course, it's the opposite.  Indeed, it's fair to say that all of the big government redistribution programs are in crisis.  A trillion dollars of annual spending on "poverty" and there are close to twice as many people today said to be in poverty than the day the War on Poverty started.  Medicaid, supposed to be a temporary thing for a few years until poverty was eliminated, instead explodes bigger and bigger every year (now at over $550 billion per year and still rapidly growing).  Social Security and Medicare are ponzi schemes careening toward a Madoff-like crash one or two or three decades out.  Obamacare, only a few years old, is widely reported to be well into an insurance death spiral.  And now we're going to get one or the other of crazy Donald or crooked Hillary to take it all over.

Lord knows I have my differences with Trump on policy (see for example here and here) and I have no comprehension at all of his "me, me, me" campaign strategy.  But there is at least some reason to believe that -- maybe? -- he has a little idea how private business works. 

Hillary?  Her deep thoughts about economic policy are more or less the same as those of your typical African potentate, say a Robert Mugabe or a Mobuto Sese Seko.  Get all the taxpayer funds you can get your hands on, and direct them to "economic development" projects run by your friends and relatives.  Those people will then kick back substantial portions to yourself.  The government-directed economic development projects all fail.  Your relatives and friends get rich.  You retire a billionaire.  The people starve.

Don't believe me?  Then you haven't been paying attention to what's gone on in Haiti.  Trading Economics reports the entire GDP of Haiti at under $9 billion per year -- an almost impossibly small amount for a country of over 10 million people.  That makes annual per capita GDP under $1000.  (Granted, the economic statistics that come out of Haiti are iffy; but they are the best we've got.)  In 2010 they had a big earthquake in Haiti.  Hillary Clinton was the Secretary of State.  Bill Clinton became head of something called the Interim Haiti Recovery Commission. Bill's Commission got billions of dollars in funding for Haiti via both the State Department and the Clinton Foundation. 

Breitbart News here has a figure for the funding that the Clintons directed to Haiti from 2010 to date as about $6 billion.  Recognize that that is [the majority of an entire year's worth] of Haitian GDP.  In the classic pattern of the tin-pot dictator, the Clintons saw to it that much to most of the money went to contracts to enrich their friends and relatives.  Although some of this had come out before the recent email revelations, the new emails have been yet another eye-opener.  For example, just five days ago ABC News analyzed a new dump of emails from the time of the 2010 quake involving businesspeople soliciting government-funded contracts to help with the relief effort.  State department staffers segregated the emails into those that came from "FOBs" (Friends of Bill) and not; the former got first priority:

In a series of candid email exchanges with top Clinton Foundation officials during the hours after the massive 2010 Haiti earthquake, a senior aide to Secretary of State Hillary Clinton repeatedly gave special attention to those identified by the abbreviations “FOB” (friends of Bill Clinton) or “WJC VIPs” (William Jefferson Clinton VIPs).  “Need you to flag when people are friends of WJC,” wrote Caitlin Klevorick, then a senior State Department official who was juggling incoming offers of assistance being funneled to the State Department by the Clinton Foundation. “Most I can probably ID but not all.”

And who ultimately got the big lucrative contracts?  From Breitbart:

Hillary Clinton’s brother, Tony Rodham, landed a lucrative and historically rare Haitian “gold exploitation permit,” while Clinton Foundation donors, including Digicel mobile phone company founder Denis O’Brien, were winning multi-million dollar contracts that would siphon massive profits from the poorest country in the Western Hemisphere.               

Perhaps most significant, Hillary backed the very dubious election in 2011 of corruptocrat President Michel "Sweet Mickey" Martelly, and allowed basically all aid to Haiti to go through official government channels.  The result:  after six years, there is still essentially no meaningful private business in Haiti.  No sane person would invest any significant sum there.  The $6 billion has completely disappeared.  The country is just as poor as it was before.  But many friends and relatives of the Clintons have done very well, and the Clintons themselves have used the donations to the Clinton Foundation to support their lifestyles and their permanent staff.  It truly is the Mugabe model.  (Martelly left office a few months ago.  Nobody knows how wealthy Martelly became, but it's highly likely that he is the richest man in Haiti.  Hey, that's how it's done!)

But the United States does not run on this crony model of economic development, do we?  Can anyone say "green energy"?  It's exactly the same thing: investment schemes that cannot compete in a competitive market, and that everyone knows will fail.  But they are subsidized by the government and awarded to cronies of those in power.  The cronies take a cut of the government subsidies and get rich.  The politicians who award the subsidized contracts also get rich, whether by "speaking fees" or donations to a "foundation," or whatever.  The development projects inevitably fail, but that's a few years from now, and who will remember?

UPDATE:  A commenter pointed out an obvious math error with regard to the comparison of Clinton-directed aid to Haiti to Haitian GDP.  Now corrected.   

Saints? . . . Or Monsters?

Of all the sweltering places on planet Earth, one of the most sweltering has to be India.  Here in the U.S., we think that Washington, D.C. has brutal summers, where average daily highs get up to over 85 degrees F in July and August, and often 30 or more days a year go over 90.   Or there's Houston, where an average of almost 100 days per year hit 90 or above.  But we are small time compared to India, where many of the major cities like New Delhi, Mumbai and Bangalore have high temperatures consistently above 90 for close to half the year.  And, given that India has been a poor country, up until now few have had air conditioning to give them any relief from the heat.  The poor Indians have just suffered the heat in silence for all of human history.

That is, until now.  Suddenly, starting about 20 years ago and accelerating more recently, India has been experiencing real economic growth and transformation.  Indian people by the tens of millions have been moving into the middle class.  And, you will not be surprised to learn, one of the first things that many of them want to acquire with their new-found wealth is air conditioning.  Thus air conditioning is sweeping through India.  The New York Times reports on the story in its October 12 edition:

DELHI — A thrill goes down Lane 12, C Block, Kamalpur every time another working-class family brings home its first air-conditioner. Switched on for a few hours, usually to cool a room where the whole family sleeps, it transforms life in this suffocating concrete labyrinth where the heat reached 117 degrees in May.  “You wake up totally fresh,” exulted Kaushilya Devi, a housewife, whose husband bought a unit in May. “I wouldn’t say we are middle class,” she said. “But we are closer.”

Well, we mustn't have that!  The worldwide progressive project to keep the poor poor has now caught on to the uppity Indians, and has swung into action to throw them back down into poverty and suffering.  At the forefront, as you would expect, are the UN, together with the U.S., led by our President Barack Obama and Secretary of State John Kerry.  Don't believe me?  Keep reading in that same New York Times article:

[I]n Kigali, Rwanda, negotiators from more than 170 countries gathered this week to complete an accord that would phase out the use of heat-trapping hydrofluorocarbons, or HFCs, worldwide, and with them the cheapest air-conditioners that are just coming within reach of people like Ms. Devi. Millions of Indians might mark the transition from poverty with the purchase of their first air-conditioner, but as those purchases ease suffering in one of the planet’s hottest countries, they are contributing profoundly to the heating of the planet. . . .  President Obama has sent Secretary of State John Kerry and Gina McCarthy, the Environmental Protection Agency chief, to Kigali to push for a rapid global phaseout. Mr. Obama hopes to lean on the friendship he has carefully cultivated with Prime Minister Narendra Modi of India and to create one final major piece of his climate change legacy.

Somehow, Obama, Kerry, McCarthy, et al., have convinced themselves that they are saints on a sacred mission to "save the planet."  Hey, HFCs are "heat-trapping gases"! 

HFCs function as a sort of supergreenhouse gas, with 1,000 times the heat-trapping potency of carbon dioxide. While they account for just a small percentage of greenhouse gases in the atmosphere, scientists say a surge in the use of HFC-fueled air-conditioners would alone contribute to nearly a full degree Fahrenheit of atmospheric warming over the coming century. . . . 

You ask, can anyone show us the actual empirical proof that these "HFC" coolant gases actually "warm the planet" as much as these "scientists" hypothesize, before we compel another generation of a billion or so Indians to a lifetime of sweltering?  Of course there is no such empirical proof.  Why do we need empirical proof when we are on a holy mission to save the planet? 

According to the Times article, there is another generation of coolants now on the market.  But unfortunately they are much more expensive than the HFCs, as well as more volatile and more difficult to handle.  The effect on India of requiring air conditioners to use only the new coolants will be to price many hopeful members of the middle class out of the air conditioning market for some years or decades.  But hey, what does their suffering count for in this equation?  They are just poor, stupid Indians.

Meanwhile, back in Washington, we may have air conditioners that use mostly the new coolants, but they also draw plenty of electricity produced by those evil fossil fuels, that produce their own "heat-trapping gases."  Do you notice a single government functionary in Washington, from the lowest bureaucrat up to and including the President, going without air conditioning, ever, even for a day?  I didn't think so.  My proposal is, if they think it's OK to take air conditioning away from the Indians, then they should do without it themselves.

Somehow, they think they are saints.  But they are not.  They are monsters.

The Fuzzy Math Of Renewable Energy -- Part II

In the progressive project to remake humanity and civilization, nothing counts but good intentions, and the details will all be worked out by the experts, using the infinite credit card.  And thus we get $1 trillion or so of annual "anti-poverty" spending that never makes a dent in poverty. As hard as that one is to top, nothing can top the delusional thinking on the subject of renewable energy, particularly the idea that it will be easy and costless to transition over a few years to a world where fossil fuels have been banished and yet we still have all the electricity we want and need.

The current renewable energy fad among progressive politicians goes by the name "80 by 50."  This is the idea that, by 2050, we shall have reduced our emissions of CO2, and thus our use of fossil fuels, by 80%.  President Obama set that goal for the United States in a speech to the National Academy of Sciences in 2009, and in 2015 he urged the country to double the rate of "decarbonization" of the economy, and to “keep the United States on the pathway to achieve deep economy-wide reductions of 80% or more by 2050.”  Most everybody who's anybody on the progressive side is on board with "80 by 50."  Mayor Bill de Blasio has adopted it for New York City, joining officials in other cities that include Atlanta, Boston, Houston, Los Angeles, Portland, San Francisco, Seattle, and Washington, D.C., among others.  I haven't found Hillary explicitly uttering the words "80 by 50," but her rhetoric is full of the "millions of good, high-paying green energy jobs" that she is going to "create."  (Do you remember Obama also promising those?  Where are they?)

In several recent posts, I have pointed out that as intermittent renewables become a bigger and bigger part of the supply of electricity, the electrical system becomes far more expensive and also a far more difficult engineering problem to run constantly and efficiently.  In this post from August, I reported on a demonstration project from South Korea where they set out to have enough wind and solar power to provide all or nearly all of the electricity for some 97 families.  But they needed lots of extra wind and solar capacity (to account for low wind and dim sunlight conditions), plus massive amounts of storage, plus full fossil fuel back (just in case), and by the time they were done they had spent some $128,000 per family for the system -- and still only managed to get about 40% of the electricity from wind and solar.

But if you're a good progressive on a mission to "save the planet," you don't need zillions of engineers and real-world demonstration projects.  Instead, you turn to those really, really smart guys with the best credentials from the best institutions.  Like for Obamacare, you turn to Zeke Emanuel and Jonathan Gruber; and for government "stimulus" policy, you turn to Paul Krugman and Olivier Blanchard.  So who's the guy for renewable energy?  And the answer is, the go-to guy is Mark Jacobson of Stanford University.

Jacobson is really the perfect illustration of how dumb the seemingly "smart" are.  He has BA, BS and MS degrees from Stanford, another BS and a Ph.D. from UCLA, and makes his living as a Professor of "Civil and Environmental Engineering" at Stanford.  His big thing is writing papers on how an advanced economy -- like the United States -- can convert over to a pure-renewables system, without any noticeable costs.  Indeed, he says the pure renewable system will be cheaper.  Here is his big April 2016 paper giving his "roadmap" for how the U.S. can get all its power from what he calls "WWS" (water, wind and solar) by 2050.  No nuclear either!  There are endless charts, graphs, formulas, calculations.  It sure looks like this guy is smart and has thought of everything!  Is it any wonder that the likes of Sanders and de Blasio (and probably Clinton as well) lap up everything he says?

It's funny how easy it is to apply just a little critical thinking to something so seemingly complex.  For example, at page 33-34, he has a chart showing costs of power from different sources for 2013 and 2050.  There are no details on where he gets these 2050 costs, other than this very general text:

[T]he drop in [the WWS] costs over time is due primarily to technology improvements. WWS costs are expected to decline also due to less expensive manufacturing and streamlined project deployment from increased economies of scale. 

Great!  And thus, according to this chart, wind and solar power will be considerably cheaper in 2050 than things like coal and natural gas are today.  But then, here are a couple of other things from Jacobson.  First, the all-renewable electricity system is expected to require 5800 gigawatts of capacity.  Our current system has only about [1000] gigawatts of capacity.  The difference is to deal with the fact that solar and wind don't operate at full capacity all the time.  Six times the capacity and the cost will be less?  Perhaps you are getting a little skeptical.  And then there's a chart on pages 46-49 that projects additional jobs to be had in construction and operation of power facilities from this conversion to renewables.  He does net out job losses in the fossil fuel industries.  And the result is 2.6 million additional net jobs in the U.S., and 23.7 million additional net jobs worldwide.  Oh, and Jacobson regards this as a good thing.  Anyway, just for the U.S., 2.6 million additional "jobs," which is approximately in the same range as all jobs in the fossil fuel industry today -- and it will cost less???  You are starting to get a picture of a guy who has no clue what he is talking about.

But how about the problem of intermittency?  What happens on calm nights when wind and solar don't work?  We get one short half page at page 32.  Here is the key paragraph:

Wind and solar time-series are derived from 3-D GATOR-GCMOM global model simulations that accounted for extreme events and competition among wind turbines for kinetic energy and the feedback of extracted solar radiation to roof and surface temperatures. Solutions are obtained by prioritizing storage for excess heat (in soil and water) and electricity (in ice, water, phase-change material tied to CSP, pumped hydro, and hydrogen), using hydropower only as a last resort, and using demand response to shave periods of excess demand over supply. Additional simulations show that grid reliability is maintained even without demand response by increasing electricity generation, but at a slightly higher cost.   

Hey, he has a "model"!  He's done "simulations."  It's all no problem.  Trust me!  All I know is, here in New York City during the Christmas season, we use a lot of power from about 5 to 8 PM -- and at those hours at that time of year, the sun has gone down.  Sometimes the wind is calm as well.  What's the plan?  10 million Teslas of batteries?  No answer to that here.

Another issue you might think of is, how much of the U.S. will need to be covered with wind turbines and solar cells to get to that 5800 gigawatts of capacity?  In a chart on page 10, Jacobson has a figure of about .68% of land area to be devoted to onshore wind turbines, and another .42% to be devoted to offshore, and about .18% to solar.  That may sound like not much, but it's actually quite a lot.  But Jacobson provides little detail on how he got these estimates.  Meanwhile, over at the Manhattan Institute, Robert Bryce does his own independent calculations, with plenty of backup on how many wind and solar facilities you can fit in a given amount of land, and comes up with dramatically higher numbers: almost 10% of the land area of the continental U.S., the size of Texas plus West Virginia.

And we haven't even started talking about storage capacity yet!  Believe me, the basic characteristic of the progressive is inability to do simple addition and multiplication.

UPDATE, October 14, 2016:  A commenter pointed out a typo as to the number of gigawatts capacity in the current U.S. electrical system.  It is approximately 1000, not 1.  Now corrected.

Missing Everything Important About The Racial Wealth Divide

The current issue of The New Yorker has an article by James Surowiecki on the subject of "The Widening Racial Wealth Divide."  Surowiecki's article is in turn substantially based on a recent (August) Report from a couple of left-side think tanks, the Institute for Policy Studies and the Corporation for Enterprise Development.  In addition to Surowiecki's New Yorker article, the IPS/CFED Report got substantial coverage over the past couple of months from many of the usual "mainstream" sources.    

The headline out of both the Article and Report is that the "racial wealth divide" in the United States is not only large, but growing.  Note that this is about "wealth" rather than "income" -- a variation on the usual "income inequality" theme that gets the lion's share of the attention from the likes of Obama, Clinton and de Blasio.  According to the Report, the average black household in the U.S. has wealth of $85,000, while the average white household has wealth of $656,000.  That's a difference of almost a factor of eight, and is indeed large -- far larger than the approximately 40% income differential between the races.  IPS/CFED choose a 30-year period for comparison -- 2013 against 1983.  Back in 1983, they report that the average black household wealth was $67,000, while average white wealth was $355,000.  Thus, while both have grown, the gap has "widened."  

The numbers, say IPS/CFED, are derived from the Surveys of Consumer Finances (SCF) for 1983 and 2013.  These surveys, done only once every three years, come not from my usual whipping-boy the Census Bureau, but rather from the Federal Reserve Board, of all places.  Here's the 2013 version.  Just checking to see if I can find one headline number from the IPS/CFED Report in its stated source, it quickly emerges that the think tanks have made a large and rather debatable adjustment in order to maximize the size of the reported wealth divide.  A chart on page 12 of the 2013 SCF gives "mean net worth" in 2013 for "White non-Hispanic" and "Nonwhite or Hispanic" as $705,900 and $183,900 respectively -- rather different from the $656,000 and $85,000 from IPS/CFED.  The Fed's reported "divide" is a factor of under 4, rather than the almost 8 from IPS/CFED from the same data.  Still large, but how did it get doubled?  Looking for an explanation I go all the way to the end of the Report and find this in a brief paragraph headed "Methodology":

The main difference in this framing from the standard SCF definition of net worth is the exclusion of consumer durable goods (i.e., automobiles, electronics, furniture, etc.). This definition is rooted in the idea that wealth should be readily converted to cash (i.e., fungible), and durable goods are not.    

With that Surowiecki and the think tanks then turn to what they believe to be the causes of the wealth disparity.  Note that the FRB's Survey of Consumer Finances reports do not address the issues of causation in any way -- the SCFs are just dry collections of data.  In other words, when Surowiecki and IPS/CFED start talking about causes, they are purely making it up.  

So, guys, what are the causes?  You won't be surprised to learn that the causation theories of these people consist largely of blaming the evil successful people, while completely missing obvious recent policy changes -- like the explosion in food stamp and Medicaid usage during the Obama administration -- that have intentionally driven down the already modest wealth of relatively low-wealth people. From Surowiecki:

[T]he wealth gap between black and white Americans is much bigger than the income gap, thanks to a toxic combination of institutionalized discrimination, persistent racism, and policies that amplify inequality. . . .  [D]iscrimination, though no longer legal, is still pervasive. It holds down black incomes and has a huge impact on homeownership—which Shapiro identifies as “the largest driver of the racial wealth gap.” Only forty-one per cent of black Americans own their homes, compared with seventy-one per cent of whites, and black homeowners earn a much smaller return on their property.

But after talking so confidently about this "pervasive" "institutional discrimination," Mr. Surowiecki does not provide a single significant current example.  He does, however,  talk of long-ago federal policies that were in place from about the thirties to the sixties:

Beginning in the New Deal and on into the postwar years, the federal government invested heavily to help ordinary Americans buy homes and go to school, via programs like the Federal Housing Administration and the G.I. Bill. That fuelled an economic boom and fostered the growth of a prosperous middle class. But black Americans received little of this assistance.

The closest Surowiecki comes to giving a present-day instance of real racial discrimination comes with this howler:

As Asante-Muhammad [one of the authors of the IPS/CFED Report] told me, “White people still do not generally want to live in a neighborhood that’s more than twenty to twenty-five per cent black.” That means fewer buyers, which holds house prices down. Shapiro has found that housing segregation costs black families tens of thousands of dollars in home equity.   

Really??  This guy writes for the New Yorker and yet seems unaware that whites are currently, and have for a decade and more, been moving in large numbers into formerly majority-black neighborhoods in New York City like Harlem in Manhattan, Fort Greene, Bedford-Stuyvesant and Bushwick in Brooklyn?  That process of "gentrification" has made millionaires and near-millionaires out of thousands of formerly not-well-off black homeowners -- a process that the official New York groupthink somehow finds to be evil.  See Spike Lee's rant on the subject at my post here.  Well, which is it -- gentrification is happening and is evil (Lee and NY groupthink), or gentrification is not happening but would be good if it happened (Surowiecki)?  This much I know:  gentrification is happening, at least in large swaths of New York City.  Surowiecki seems to know neither the facts nor the official party line.

Now, turn your attention away from both Surowiecki and the IPS/CFED Report and look at the underlying 2013 SCF survey.  You will be struck by one very noticeable thing that neither Surowiecki nor IPS/CFED discuss:  net worth for blacks and Hispanics, and indeed for the entire bottom 20% of the wealth distribution, has been declining dramatically in the most recent years.  This isn't just a widening of the "divide" between wealthier and less wealthy even as both see growth in wealth; no, the levels of wealth at the bottom, already low, have actually dropped in absolute terms.   

We know this because the 2013 SCF shows the results of both the 2013 survey and the prior version of same, which was three years earlier in 2010.  And in that three year interval there was a dramatic worsening of the wealth situation not only for blacks and Hispanics, but also for the entire lower 20% of the wealth distribution.  According to the 2013 SCF, during the 2010-2013 interval, the mean net worth for Nonwhites and Hispanics went down from $189,000 to $184,000; the median net worth for Nonwhites and Hispanics went down from $22,000 to $18,000 (almost 20%!); the mean net worth for the bottom 20% of the wealth distribution went down from $82,000 to $65,000 (more than 20%!); and the median net worth for the bottom 20% of the wealth distribution went down from $7,000 to $6,000.

Thus while the IPS/CFED Report shows black and Hispanic wealth increasing somewhat in the 1983-2013 period (although more slowly than the rate of increase for whites), they don't mention that even that modest progress stopped and went into reverse in 2010-2013.  These were three years of supposed economic recovery.  Now, what occurred in the the three-year interval 2010-2013 that might have such noticeable negative effects on the modest wealth of people at the bottom of the wealth distribution, including blacks and Hispanics?  The G.I. Bill?  The FHA mortgage program?  "Pervasive institutional discrimination"?  

These were of course the early years of the Obama administration.  And the thing that happened in those years that obviously had a dramatic effect on the wealth of those at the bottom of the wealth distribution was the explosion in means-tested government handout programs, most notably food stamps and Medicaid.  The Obama administration set out aggressively to increase the enrollment in food stamps, and drove it up from about 27 million in 2009 to 48 million in 2013.  But enrolling in food stamps requires a family first to get its assets down to near zero.  Here is the USDA's page on eligibility requirements for the "SNAP" (food stamp) program, which states off the bat that someone seeking the benefit must get so-called "countable resources" under the very low figure of $2250.  

Medicaid enrollment also rose dramatically from 2010 to 2013 (although not as dramatically as enrollment in food stamps), going from 50.5 million to 55.0 million according to data from KFF here.  (The bigger explosion in Medicaid occurred after the full implementation of Obamacare began in 2014.)  Medicaid also requires prospective beneficiaries to come close to zeroing out their assets.  Here is a government website describing the (highly complex) eligibility criteria.

So in the 2010 to 2013 period, the government was aggressively luring some tens of millions of new beneficiaries into handout programs that required prospective beneficiaries to somehow spend down or get rid of whatever assets they had.  Is this enough to swing the numbers for reported wealth of the bottom 20% of the wealth distribution -- consisting of only about 30 million total households?  Absolutely it is.  

A couple of questions:

• Did nobody realize that hugely expanding programs like food stamps and Medicaid with very low asset criteria for eligibility was going to have a strong negative effect on the already modest wealth of the less wealthy?
• How can people like Surowiecki and these think tanks talk about alleged "causes" of the racial wealth divide like the G.I. Bill and alleged refusal of whites to move into largely black neighborhoods, while at the same time completely missing the hugely obvious fact that the main cause of widening and perpetuating the wealth divide is gigantic government handout programs that have the decreasing of the wealth of the less wealthy as a principal feature of their design? 

Pay Attention To South Australia

In a post on Monday, I advised readers to "pay attention to the news out of South Australia."  The prior week, on September 28, the entire state of South Australia was plunged into a power blackout in the midst of a major rain and wind storm.  Those who follow the subject know that South Australia has made a big thing in recent years of turning itself into the world leader of "renewable" energy, principally from the wind.  Immediately prior to the blackout, SA was getting some 50% or more of its electricity from its wind farms.  I have written several posts here (for example, this one) about how difficult it will be to make a fully-functioning 24/7/365 electricity system for a modern economy when production from intermittent sources like wind gets above about 30% of total electricity supply.

So was SA's blackout caused by over-reliance on the unreliable wind, or did it have other causes?  In my post on Monday, I merely raised the question, and did not attempt to answer it.  Instead, I linked to a source with information on all sides of the issue.  Others were less cautious.   The religious promoters of wind power immediately came forward to say that SA's dependence on wind had nothing to do with it.  For example, we had Karl Mathieson at Climate Change News on September 29 ("No, South Australian blackouts were not caused by renewables") and Josh Butler at the Huffington Post also on September 29 ("No, Renewable Energy Didn't Cause South Australia's Blackout").  The alternative cause put forward for the blackout was that high winds had knocked over several transmission towers.

Well, yesterday the Australia Energy Market Operator (AEMO) came out with its first preliminary report.  Here is the press release, and here is the full report (pdf).  Key quote:

Generation initially rode through the faults, but at 16:18hrs, following multiple faults in a short period, 315 MW of wind generation disconnected, affecting the region north of Adelaide. The uncontrolled reduction in generation increased the flow on the main Victorian interconnector (Heywood) to make up the deficit and resulted in the interconnector overloading.

Translation:  nearly all the wind generation conked out all at once as high winds made it dangerous for the turbines to keep operating; and the back-up sources could not kick in quickly enough, let alone that the transmission lines to bring in the back-up power promptly got overstressed.  So the whole system went down.

Did the felling of a few transmission towers contribute in some way?  I'm not sure that that has yet been completely ruled out.  But the real question is, how much extra back-up (fossil fuel or nuclear) capacity do you need to have, and how much extra transmission capacity do you need to have, if you are going to have an electricity system getting half or more of its power from wind and hope that it will withstand major storms?

Here's a further substantial post from Australian blogger Joanne Nova.  Key quote:

The bottom line is that wind energy comes at a very high cost and makes the system either very expensive or horribly fragile or both. Given that wind farms aren’t providing cheap electricity — when the infrastructure and the costs of having back up “spinning reserve”  and baseload is taken into account — what’s the point of adding all this risk to the system? To change the weather?

Meanwhile, back home here in New York, we just committed in August to a new "renewable portfolio standard" of getting 50% of our electricity from "renewables" by 2030.  Brilliant!  Has anybody even considered the question of whether or how this thing is actually going to work?  The good news is that between places like South Australia, and others like Germany and Denmark that haven't had a big disaster yet but are operating very much on the edge, we are likely to have some bad experience of others to learn from before we dig ourselves too far into this hole.   

The Face Of "Deep Poverty" In America

The famous line, attributed to Mark Twain, is, "There are three kinds of lies: lies, damned lies, and statistics."  Readers here know that I have been a frequent severe critic of the federal government's statistics on the subject of poverty.  At the time of their creation, these statistics may have borne some relationship to real poverty as you think of it -- physical deprivation, including lack of enough to eat or adequate clothing -- but any such relationship that may have once existed has long since gone away.  Today the "poverty" statistics fairly fit Twain's description -- they are far worse than mere "damned lies."  

The reason is that all kinds of people whom you would never think of as poor, and who are not poor in any real sense or suffering from any sort of physical deprivation, are lumped into the statistics.  In calculating the "poverty" rate, Census counts only "cash income" in the current year, a statistical artifact that arbitrarily excludes substantial resources that people have available to them to live comfortably.  Large categories of obviously non-poor people counted in the "poverty" statistics include retirees living on ample savings or home equity, students living on scholarships and fellowships (do you know that affluent Ithaca, New York, has a reported "poverty" rate exceeding 40%?), twenty-somethings living off resources of affluent families, and otherwise successful businesspeople having a bad year -- and that's before we even get to the vast population of government dependents living on government handouts, nearly all of which are also systematically excluded from the artificial definition of "cash income."  (This does not mean that there are no bona fide poor people included in the poverty statistics, but only that the reported numbers are wildly overstated, and we are given no meaningful information on the real state of poverty in the country.)

But of course the fake Census statistics are useful for advocates of more government spending and programs, who can use the inflated numbers to tug on the heartstrings of the uninformed.  For example, here we have Clyde Haberman, writing in the New York Times on May 1 and using the fake government poverty statistics to advocate for more government spending to alleviate the suffering of the poor:

Nationwide, the Census Bureau counts 46.7 million Americans as living in poverty, which for a family of three (typically a mother and two children) means annual earnings of less than $20,160. About 20 million people live in deep poverty, with earnings below $10,000 a year for a family of three.

Twenty million in "deep poverty" -- that sounds bad, a lot worse than mere "poverty."  Are your heartstrings tugged?  How bad must the sufferings of these people be?

Well, consider one of them:  Donald Trump!  

His "cash income" in 1995 is now reported to have been a negative $912 million.  Talk about "deep poverty"!  It's way less than $10,000 -- and he had a family of five to support at the time.  He could well have been the "poorest" person in the whole United States in 1995 -- at least if you define "poor" the way the geniuses at our Census Bureau define "poor."  And the suggestion is that Trump then used the negative $912 million to zero out his "cash income" for up to eighteen years after 1995.  He was likely in "deep poverty" all the way up to 2013!  Is it any wonder that our "deep poverty" rate is so high?  

You are probably wondering, could it really be possible that the U.S. Census Bureau, in calculating the "poverty rate," could count a businessman like Trump in "poverty" for almost two decades just because he had a bad year in which he took a write-off that zeroed out his income and then some?  And the answer is, absolutely he would have been counted in "poverty" in 1995 and all the way until the negative was exhausted.  It's just the way the "cash income" numbers shake out.  Trump fell in one of the many categories of non-poor that are used to gin up our fake statistics.  (Note that it is unlikely that Trump was personally surveyed by the Census.  But the Census sample is plenty big enough that it will inevitably include numerous members of Trump's "businesspeople with write-offs" category.)

But, you say, Trump is just a fluke, and flukes like that can't really skew the numbers much.  Not at all.  Lots of businesses have periodic losing years, even though overall they are successful.  How many instances are there in any given year of businesspeople with a negative year who get counted in poverty?  And the answer is, you will never find that out from the Census statistics or any other information that they put out.  Nor will you find out how many said to be in "poverty" are actually students from affluent families, or retirees living comfortably on savings or home equity loans or proceeds from sale of a house, or people taking a year off from successful careers, and so forth.  Sorry, but those are state secrets.  If we let that information out, how would people like Clyde Haberman be able to tug at your heartstrings with cries of tens of millions in "deep poverty"?