Streetwise Professor

August 21, 2019

Crazy Like an (Arctic) Fox?

Filed under: China,Energy,Military,Politics,Russia — cpirrong @ 5:38 pm

Donald Trump recently unleashed yet another tsunami of ridicule by suggesting that the US should buy Greenland, a Danish possession. There he goes again! The idiot! The fool! What a ridiculous idea!

Trump responded by pointing out that Greenland is a strategic place. And he’s right.

And you know who thinks it’s incredibly strategic?: Vladimir Putin, and the Russian defense establishment. Under Putin, Russia has poured extensive resources into an attempt to dominate the Arctic. It has been building bases in the region at a fevered pace, and is imposing restrictions on ships using the northern sea route. It is attempting to grab as much of the Arctic seabed as possible, because of the potential energy resources it contains. Putin himself has said the Arctic “the most important region that will provide for the future of Russia.” Putin wants to turn the Arctic into a Russian lake.

Further, the strategic importance of this region is greater, the more you believe in climate change, or the stronger you believe it will be. Considerable warming would turn the Arctic into one of the dominant shipping routes in the world.

So by expressing an interest in Greenland, Trump is making a move that poses a direct, and serious, threat to Russian interests. Replacing a geopolitical pipsqueak (Denmark) that has a seat at the table in all negotiations in the Arctic, and which cannot utilize Greenland for any military purpose, with Putin’s bugbear–the US–would be a real blow to him. In Soviet lingo, it would dramatically shift the correlation of forces in the Arctic. That’s a big deal. For Putin especially.

Greenland is also a potential source of rare earths, currently a Chinese near-monopoly (and one of their most powerful “trade war” weapons), so US control would be antithetical to Chinese interests as well.

The irony is just too, too much. I guarantee that those who are ridiculing Trump most intensely also believe absolutely that he is Putin’s puppet, and are also fervent believers in the existential threat of anthropomorphic climate change. Yet they are so blinded by their prejudices and obsessions that they cannot see that the latest object of their ridicule proves how unhinged they are.

I am sure Putin does not think Trump’s gambit is the least bit amusing. But I am equally sure that he takes great solace in the fact that–yet again–he can rely upon a cavalcade of useful idiots who will act in his interest by attacking Trump all the while believing that they are actually fighting against Putin.

The US military has been raising concerns about Russian initiatives in the Arctic for some time. Trump apparently has been listening, and has come up with an out-of-the-box, color-outside-the-lines idea that of course appears ludicrous to the dreary, narrow, conventional minds that inhabit the media, political, and government establishments.

If this indicates that Trump is crazy, all I can say is that we need more crazy. And now.

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August 20, 2019

The 1619 Project: An Idiotic–and Evil–Monocausal Theory of Everything

Filed under: Economics,History,Politics — cpirrong @ 7:45 pm

Over the weekend, the New York Times released its “1619 Project” amidst great fanfare. The organizing theme of the essays is that America’s true founding dates to the arrival of the first African slaves to Virginia in 1619, and that everything–and I mean everything–in the United States today not only reflects the legacy of slavery, but is tainted, warped, and twisted by it. America is evil because it was founded in the original sin of slavery, and nothing that has transpired since can remove that sin.

When reading these pieces, at great risk to my mental health (what I don’t do for you!), the famous 1741 sermon by Puritan preacher Oliver Edwards came to mind:

The God that holds you over the pit of hell, much as one holds a spider or some loathsome insect over the fire, abhors you, and is dreadfully provoked. His wrath towards you burns like fire; he looks upon you as worthy of nothing else but to be cast into the fire. He is of purer eyes than to bear you in his sight; you are ten thousand times as abominable in his eyes as the most hateful, venomous serpent is in ours. 

You have offended him infinitely more than ever a stubborn rebel did his prince, and yet it is nothing but his hand that holds you from falling into the fire every moment. It is to be ascribed to nothing else that you did not got to hell the last night; that you were suffered to awake again in this world, after you closed your eyes to sleep. And there is no other reason to be given why you have not dropped into hell since you arose in the morning, but that God’s hand has held you up. There is no other reason to be given why you have not gone to hell since you have sat here in the house of God provoking his pure eye by your sinful, wicked manner of attending his solemn worship. Yea, there is nothing else that is to be given as a reason why you do not this very moment drop down into hell. 

In place of God, just insert “the New York Times” or The Woke, and you will understand the contempt in which they hold you. In their eyes you are forever tainted by the original sin of slavery, and predestined (except for an elect) to burn in hell for eternity. And there’s nothing you can do about it.

Make America Great Again? Not only was it never great, it was–and is–irretrievably damned.

Enemy of the people? Well, I can say they are enemy of me, and probably enemy of you too.

As for the exposition in the articles themselves, I can best characterize them as farrago of fallacies, logical and historical. The unifying principle of the essays is something akin to “Six Degrees From Kevin Bacon”: Six Degrees From Slavery, if you will. Pick any aspect of American life–any single one, I dare you–and the 1619 authors tie it to slavery.

It’s actually worse than that. Rather than just pointing out (strained) parallels, they attribute causation: slavery caused everything bad in American life. And since America is pretty bad, it pretty much caused everything.

Monocausal theories are the province of cranks and idiots, and this collection of applications of the monocausal theory du jour is no exception. Take the most simplistic, tendentious class-warfare-is-everything Marxist, and he would appear to be a sophisticated and subtle thinker compared to this lot.

I’ll just take a few examples. I’ll focus on the essay by Princeton sociologist Matthew Desmond, titled “In order to understand the brutality of American capitalism, you have to start on the plantation.” I focus on this primarily because it is allegedly about economics, but also because Dr. Desmond is whiter than chalk on Wonder Bread, so by hammering on him I immunize myself to some degree from the cheap-shot ad hominem “you’re a racist!” substitute for argument. Though I’m sure I’ll get that, nonetheless. (For the record–go ahead, IDGAF.)

Dr. Desmond gives himself away with the title, no? “Brutality of American capitalism.” Nope, no preconceptions there. He’s not writing from an extreme leftist perspective, nosiree.

And Desmond picks up speed from there, quoting Martin Shkreli as if he is some exemplar of American capitalism. (If so, Matty, why is Marty in jail?)

Desmond attempts to bolster his case by contrasting some meaningless statistics for the US and other countries. So for example, according to the OECD the US is far worse than say, Brazil or Mexico at regulating temporary work.

How many Americans are swimming to get to Brazil or Mexico, Dr. Desmond? The concept of “revealed preference” mean anything to you?

Also, Brazil had slavery–for over two decades longer than the US in fact. How come that didn’t prevent it from adopting such “progressive” labor laws?

Desmond emphasizes that the US comes out far behind Iceland in terms of unionization, which is supposedly a much more humane economy. At the risk of spoiling later surprises, is Desmond aware that the Vikings were notorious slavers? That some of the Icelandic population descends from slaves (seized from Ireland, mainly)?

So how come the Vikings weren’t forever tainted by their original sin of slavery?

Along these lines, I should note that the Danes, whom I am sure Dr. Desmond considers far superior to Americans, with a far more humane economic system (just ask Bernie Sanders), participated in the Transatlantic slave trade from 1671 to 1803, and that brutal plantation slavery existed in the Danish West Indies until the mid-19th century. Why didn’t a brutal Danish capitalism grow out of brutal Danish plantations?

Insofar as unionization is concerned, it is well-known that union representation in the US has declined inexorably since reaching a peak of around 33 percent (with relatively few in public sector unions) in the 1950s (to around 13 percent today, with public sector unions representing about half of union members in 2018). So did slavery vault over the 1940s-1950s, do a Simone Biles-esque triple double, and land in the 2000s? (Similar observations can be made about other supposed “legacies of slavery,” such as high rates of black out-of-wedlock births and low rates of marriage, which were comparable to whites’ prior to the 1960s.)

The bulk of Desmond’s screed consists of just-so stories showing that pathologies and misfortunes of modern American life trace back directly to slavery. My favorite–mortgages and financial crisis. You see, slaves were collateral in mortgages extended by greedy New York bankers. There was a credit boom in the South in the 1820s and 1830s, fueled in large part by mortgages with human collateral. The boom collapsed with the Panic of 1837.

Just like 2008!–only replacing “slaves” with “houses.” Per Desmond: “C.D.O.s were the grandchildren of mortgage-backed securities based on the inflated value of enslaved people sold in the 1820s and 1830s. Each product created massive fortunes for the few before blowing up the economy.”

As if there have not been other financial crises in other countries with totally different histories that have resulted from a collapse of credit. Indeed, this a hardy perennial of financial history.

Which can bring us back to Desmond’s beloved Iceland, which had a debt-fueled financial crisis that was arguably the worst in the word in 2008. Remember the joke from that year?: “What’s the capital of Iceland? Oh, about twenty bucks.”

Just how the hell does Iceland’s implosion have anything to do with American chattel slavery? And if it doesn’t, how can Desmond claims some sort of necessary causal link between a financial crisis during the slave era (which, by the way, was followed by many other US financial crises in the non-slave era) to a financial crisis 143 years after the 13th Amendment?

And as for mortgages, they’ve been around since Roman times (as the Spanish word for mortgage, hipoteca, indicates, that also being the Roman word for this kind of debt, which also lives on in English as “hypothecate”).

Ridiculous, I know. Oh, but there’s more!

Accounting. Seriously. Slave owners depreciated slaves in their plantation accounts:

They quantified capital costs on their land, tools and enslaved workforces, applying Affleck’s recommended interest rate. Perhaps most remarkable, they also developed ways to calculate depreciation, a
breakthrough in modern management procedures, by assessing the market value of enslaved workers over their life spans. Values generally peaked between the prime ages of 20 and 40 but were individually adjusted up or down based on sex, strength and temperament: people reduced to data points. (Emphasis added.)

Uhm, slave owners didn’t “develop ways to calculate depreciation,” they applied a long standing concept to their capital in slaves. It is horrific that humans were viewed as capital, but this did not spur the development of a universal accounting concept: the concept has been around since people figured stuff wore out. And it is ridiculous for him to say that “scientific accounting” was developed on plantations: it was developed long before, starting with the Renaissance Italians, and plantation owners found it useful. As did Boston merchants and Manchester mill operators and on and on and on.

Desmond also focuses on the meticulous monitoring of slave laborers, and sees it as the forerunner of “unremitting workplace supervision” in the modern American economy. Put aside for the moment that workplace supervision today is at its most unremitting outside of the United States (can you say “Foxconn,” Matt? How the hell does that relate to US slavery?). What the hell do you think Marx and Engels kept going on about when describing the horrors of the English factory system? Manchester mill operators would never have figured out without American plantation slavery?

I could go on. And on. And on. But you get the idea. Desmond observes X (a bad thing) in the modern American economy. He observes something sorta kinda like X in the slave economy. He asserts that sorta X developed sui generis in the slave economy, and then asserts that the slave economy sorta X caused the modern economy X.

Every part of this “reasoning” is false. The plantation economy developed little if anything in the nature of economic practice: it adapted things that long pre-dated it. It did so (and I’m reifying here to simplify the exposition) because these practices tended to increase output and efficiency. These practices were adopted and adapted in myriad other settings for the exact same reason. There is no causal arrow from plantation practices to modern corporate “capitalism.” Both reflected and reflect underlying economic forces and institutional innovations that have occurred and evolved for millennia.

Desmond’s piece–and all of the others in the 1619 Project–are the Fallacy of the Undistributed Middle, writ large. Plantations did X. Modern corporations do something like X. Therefore modern corporations are functionally identical to plantations.

No.

So if you are considering getting economic insight from an Ivy League sociology professor who writes for the NYT, take my advice: find a crackhead instead.

Another piece in the series, Khalil Gibran Muhammad’s on sugar, presents similar just-so stories. Here the kicker is that Americans are obese because they eat too much sugar, which wouldn’t have ever happened absent slavery. Yes, Americans–and pretty much everybody in the world–has a sweet tooth, and once upon a time that appetite was fed by slavery. But the sweet tooth is a universal human attribute that has been been satisfied in ever increasing amounts long after the demise of slavery. Americans didn’t get really fat until well over a century after the demise of slavery, and then, ironically, a sugar substitute (high fructose corn syrup) made attractive by protectionist policies that raised the price of sugar and reduced sugar consumption, is far more culpable.

Again, the causal arrow between slavery and bad stuff happening today is a figment of the 1619 Project’s fervid imagination.

I also await with bated breath Mr. Muhammad’s explication of the pernicious effects of Muslim slavery. (Which continues to this day, by the way, including–I kid you not–in Iceland.)

Here’s another one. Tiya Miles tells us that “New York City’s phenomenal economic consolidation came as a result of its dominance in the Southern cotton trade, facilitated by the construction of the Erie Canal.” Ms. Miles attributes this conclusion to historian David Quigley, but without citation so I cannot check whether she characterizes him correctly, or evaluate his reasoning. All I can say is that any connection between the cotton trade and the Erie canal must have been extremely indirect, and indeed, the Erie Canal undermined the South’s power by spurring the growth of the Northwest. Southern states were generally opposed to “internal improvements” like the Canal, which they believed benefited primarily Northern states, and were funded by tariffs that the South paid disproportionately (precisely because tariffs are a tax on trade, and the cotton export trade was the largest in the US). Further, although there was a triangular trade in which cotton was exported via New York and other Northern ports, New Orleans was a major cotton exporting point and capital center . . . until the Civil War. That is what really juiced the NY cotton trade, as illustrated by the fact that the New York Cotton Exchange did not come into existence until 1870.

One last monstrosity. The piece by the series editor, Nikole Hannah-Jones, contains this gem of anti-history:

Conveniently left out of our founding mythology is the fact that one of the primary reasons the colonists decided to declare their independence from Britain was because they wanted to protect the institution of slavery. By 1776, Britain had grown deeply conflicted over its role in the barbaric institution . . . In London, there were growing calls to abolish the slave trade. This would have upended the economy of the colonies.

She concludes that the colonies “believed that independence was required to ensure that slavery would continue.”

Bullshit from beginning to end. Where to begin?

For one thing, the anti-slavery movement in the UK was hardly a major force in the 1770s. To the extent it existed, it was limited almost exclusively to Quakers–hardly the pillars of the British establishment. The Committee for the Abolition of the Slave Trade did not begin until 1787–the year the US Constitution was written. The Constitution contemplated the elimination of the slave trade in 1808, and the law banning the importation of slaves to the US was passed in March, 1807–the exact same month the British law banning the trade was passed. The British Anti-Slavery Society, which aimed at abolition, did not begin until 1823, and Britain did not abolish slavery until 1833.

So if the British threat to abolish slavery was so threatening to the American colonists, they sure as hell took their time getting around to it. The crown’s grave threat to American slavery is completely a figment of Ms. Hannah-Jones’ imagination.

Further, rather than being the hotheads of rebellion, the southern colonies resisted it because they feared it threatened slavery. Jefferson’s original draft of the Declaration of Independence contained strong language listing slavery as one of Britain’s sins against America that justified rebellion:

He has waged cruel war against human nature itself, violating its most sacred rights of life and liberty in the persons of a distant people who never offended him, captivating & carrying them into slavery in another hemisphere or to incur miserable death in their transportation thither.  This piratical warfare, the opprobrium of infidel powers, is the warfare of the Christian King of Great Britain.  Determined to keep open a market where Men should be bought & sold, he has prostituted his negative for suppressing every legislative attempt to prohibit or restrain this execrable commerce.  And that this assemblage of horrors might want no fact of distinguished die, he is now exciting those very people to rise in arms among us, and to purchase that liberty of which he has deprived them, by murdering the people on whom he has obtruded them: thus paying off former crimes committed again the Liberties of one people, with crimes which he urges them to commit against the lives of another.

The southerners insisted that this be removed from the draft, and it was. The slaveholding elements in Philadelphia, and throughout the revolutionary period, were fearful that their northern brethren would eliminate slavery. The first fifty-odd years of United States political history revolved around Southern insistence on institutional and political protections of slavery against Northern attempts to undermine it or strangle it.

The Revolution happened not because of slavery, but in spite of it.

This would all be bad enough if it was just the province of humanities and X-studies departments at universities. But it is part of a political agenda by the most important media outlet in the United States, and arguably the world. Further, the NYT is flogging the issue of race–and deliberately stoking racial tensions–as part of a deliberate political strategy to unseat Trump, and vanquish the deplorables.

Don’t believe me? Believe the NYT’s editor, and his “news” room staff, the transcript of whose “town hall meeting” was leaked. In it, editor Dan Baquet admitted that the NYT had built its newsroom around the Russia collusion story in order to bring down Trump. When Mueller imploded, Baquet and the wokerati realized that their strategy had come a cropper, and they needed a replacement. Fast.

So what did they seize upon: race, racism, and white nationalism. The 1619 Project is just a facet of what will be a 24/7 effort by the New York Times (no doubt aided by its allies and fellow travelers) to paint the United States as a racist nation led by a racist president who must be destroyed, and his supporters banished from civic life.

This is, for lack of a better word, evil. Yes, slavery was horrible. The nation has struggled with the legacy of slavery, and race relations are strained at best. But it is for precisely that reason that inflammatory–and utterly illogical and counterfactual–campaigns like the 1619 Project are wrong, divisive, and destructive. All the more so when the true objective behind this campaign is venally political.

And that is the original sin of the 1619 Project.

The main solace I can take is that this will persuade only those who are already on the left. It will not move those in the middle towards the left, and indeed may drive many of the mushy the other way. The Project reeks of the same condescension–and hatred, actually–that made Trump, and made his win possible.

Put differently, when your counter to Make America Great Again is America and Americans Are Irredeemably Awful, don’t be surprised if a strong majority of Americans rise up and kick you right in the ass.

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I Call BS on the Russian Explanation for the Severodvinsk Explosion: I’m Sure You’re Shocked

Filed under: Military,Russia — cpirrong @ 2:30 pm

Note: I wrote this Saturday, but was unable to post because of a technical problem at the site. No doubt those damned Russkies were trying to silence me 😛 I’ve only made slight edits, and added the part about Norwegian detection of iodine. Some of what is posted here anticipated discussions in the comments on Sunday and Monday.

In my original post on the Severodvinsk explosion I expressed puzzlement at the Russian explanation that they were testing an “isotope power source for a liquid-fueled rocket engine.”  I did some research to address my ignorance, and found, indeed, that radioisotope rocket engines are a thing.  The problem is that this thing is inconsistent with the closure of nearby waters due to the presence of toxic rocket fuel (allegedly from the explosion) and the mention of “liquid rocket fuel” in the explanation.

Radioisotope rocket engines work by using the energy released from the decay of radioactive isotopes to heat a solid material (the “capacitor”).*  When the capacitor is sufficiently hot, fuel is passed over it.  The capacitor heats the fuel.  The hot gas is vented out through a shaped nozzle, which accelerates it (exploiting the Venturi Effect), creating thrust.

The motor generates a greater pulse (the thrust produced with respect to the amount of propellant exhausted per unit time) than the Space Shuttle Main Engines.  But it generates far less power.  Further, it is fuel limited, and thus does require fuel which limits its utility as a source of continuous propulsion.  Thus, its main application is as rocket thrusters in space, not launching projectiles or powering aircraft or missiles in the atmosphere.  All of the applications of this source of power that I have seen relate to space in some way.

But here’s the thing: whereas conventional rocket engines operate by combustion (i.e., stored chemical energy is released as the result of the burning of the rocket fuel) radioisotope rockets do not.  The fuel is not burned, just heated. Hydrogen has advantages and disadvantages as a fuel for such rockets, but crucially there is no need for conventional rocket fuel, which is nasty stuff—toxic when it isn’t blowing up.

Which is why I call bullshit on the Russian story that specifically mentions “a liquid-fueled rocket engine.”  Conventional liquid rocket fuel combusts—big time.  Even if the Russians were to say that the liquid fuel was liquid hydrogen, that would not explain the alleged release of toxic rocket fuel in quantities sufficient to require the closure of beaches and fishing areas.  And why wouldn’t the Russians say it was a hydrogen explosion? The huge explosion also suggests highly explosive rocket fuel. 

Put simply: a radioisotope propulsion system cannot explain a release of radiation and toxic, combustible liquid rocket fuel. An explosion of a Petrel, or something like it can. The Petrel needs a rocket booster, and hence rocket fuel. The missile’s ramjet is powered by a nuclear reactor.

The Norwegians also reported they detected a release of radioactive iodine. This is consistent with the destruction of a reactor with a fissile fuel source, but not with the explosion of a radioisotope propelled vehicle.

One last thing cements my suspicions.  In their move along, nothing to see here explanation, the Russians said that NASA has developed an isotope power source (“Kilopower”).  Yes, Kilopower is a low power (1kW, with plans to go to 10kW) engine intended to generate electricity for spacecraft. (No rocket fuel, or any fuel for that matter, required!)  So it is almost impossible to imagine it, or anything remotely like it, blowing up, or even being around anything that would blow up, as happened in Severodvinsk. 

But “the Americans do it!” is an excuse right out of the old Soviet playbook. It is a convenient cover story, and one used repeatedly in the past.  Which suggests that they have something the Americans are not doing to cover up.  When this is added to the glaring inconsistency involving rocket fuel and radioisotope rocket engines, the circumstantial case that a Petrel/Skyfall accident is to blame for Severodvinsk becomes very strong indeed.

*It is sickly amusing to note that although the most commonly mentioned power source is Plutonium, Polonium (of Litvinenko infamy) has also been suggested.

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August 11, 2019

Did the Petrel Blow Up Real Good?

Filed under: Military,Russia — cpirrong @ 9:02 pm

In Russia, August, not April, is the cruelest month (though July can be pretty bad too). Recent Augusts have been pretty benign, though: no ferry sinkings or rash of drownings or major fires. This year, however, August (and July) appear to be returning to form, with an explosion at a Siberian ammo dump, raging forest fires (again in Siberia), and last week, an explosion at a missile test in Severodvinsk, in far northern Arkhangelsk. This all followed the sinking of a highly secretive submarine in July.

The first announcement of the Severodvinsk event was puzzling. There was a spike of radiation that had people in the area scurrying to pharmacies to get iodine. There was an announcement of an explosion during the test of a rocket engine. But conventional rocket engines don’t release radiation when they explode, so whence the radiation? Upon reading, the only thing I could think of was that there was a mishap in the testing of Russia’s insane nuclear powered Буревестник (Burevestnik or “Petrel”) cruise missile, of which Putin is so fond.

Since the explosion, the Russians have been telling the truth slowly, and although they have not come out and said it was the Petrel (“Skyfall” in Nato nomenclature) that blowed up real good, everything they have said tends to confirm that suspicion. Oh yeah. Seven people died. Not two. And five of those seven, yeah, they worked for Rosatom–Russia’s State Atomic Energy Corporation. And yeah, there was an explosion in “isotope power source for a liquid-fueled rocket engine.” (Come again?) A nuclear fuel vessel was anchored nearby, and emergency personnel evacuating the injured wore hazmat suits: the ship had been present at the time of a previous test of the Petrel.

The Dvina Bay has been closed due to alleged pollution from rocket fuel, and the Russians claim that the explosion occurred during the testing of a liquid fuel rocket motor, but this does not rule out that the Petrel was involved: conventional rockets would be used to launch the weapon and give it sufficient velocity for a nuclear powered ramjet mechanism to operate. (Though it is interesting that liquid fuel is involved: even the US’s insane nuclear ramjet Project Pluto utilized safer solid fuel rockets for liftoff. Perhaps the use of liquid fuel is not surprising: Russia’s still in development RS-28 Sarmat ICBM is also liquid-fueled.)

Although in a 1 March, 2018 speech Putin touted the missile as having virtually unlimited range, your results may differ. By a lot:

Russia is preparing for a special operation to find a missile that fell into the Barents Sea. This was reported by CNBC. The American television channel refers to intelligence data. Allegedly the missile with a nuclear power plant was lost during the tests in November 2017. The missile launches themselves were conducted four times, from November 2017 to February 2018. In all four cases, it ended in failure. The longest of the tests lasted about two minutes. The rocket flew about 35 kilometers and fell, according to TASS.

There were supposedly “moderately successful” tests (meaning they didn’t blow up, apparently) in late-2018 and January of this year.

In his March, 2018 speech, and in subsequent remarks Putin has betrayed a Hitleresque fascination with wonder weapons like the Petrel and the Poseidon nuclear torpedo. Hitler’s fascination arose from his realization that American and Soviet industrial might and population advantages made the odds against Germany prevailing in man-on-man, plane-on-plane, tank-on-tank combat vanishingly small. Putin’s focus on wonder weapons likely has a similar motivation.

These projects betray an inordinate fear of US missile defenses (if only they were so effective as to negate Russia’s ICBM arsenal–apparently Reagan’s ghost still haunts them), and something approaching panic at the recognition that the gap between American and Russian military potential is widening inexorably. * Falling behind in symmetric competition, Putin and his military establishment are turning instead to competing asymmetrically. These efforts are in the nuclear sphere, because the Russians recognize that nuclear weapons are their only source of strategic power, leverage, and relevance.

Putin’s pets Petrel and Poseidon are thus signals of weakness and doubt, wrapped up in bravado. They are unlikely to change the strategic balance in any serious way, and so far Petrel has evidently been far more dangerous to its developers than its intended targets. Not that you can expect an admission of that anytime soon.

*The use of liquid fuel in the RS-28 ICBM also likely reflects Russian fears of US missile defenses. Defeating missile defenses by using heavy parallel separation warheads requires much greater thrust that is more reliably delivered with liquid-fueled rockets. Reliance on such rockets may also reflect constraints on Russian capacity to produce solid-fueled rockets, due to the lack of critical materials.

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August 9, 2019

Damn That Parson Bayes and His Cursed Theorem: Red Flagging Red Flag Rules

Filed under: Guns,Politics,Regulation — cpirrong @ 3:20 pm

In the aftermath of the El Paso and Dayton shootings, “red flag” rules are all the rage. Identify people who are at high risk of committing such atrocities, and prevent them from buying weapons.

Most of the arguments in favor of this rely on statements like “many mass shooters have characteristic X (e.g., mental illness), so let’s prevent those with characteristic X from buying guns.” As appealing as these arguments sound, they founder due to a failure to understand fundamental probability concepts which imply that for extremely rare events like mass shootings, red flags are extremely unreliable.

Most of the arguments in favor of red flags rely on estimates of P(X|M), i.e., the probability that someone who committed a mass murder (“M“) had characteristic X. For example, “70 percent of mass shooters present evidence of mental illness.” Or Y percent play violent video games or post racist rants online.

But what we really need to know in order to implement red flags that do not stigmatize, and deny the rights of, people who present a low risk of committing a mass shooting is P(M|X): “what is the probability that someone with characteristic X will commit a mass shooting?” Although most people argue as if P(X|M) and P(M|X) are interchangeable, they are not, as Thomas Bayes demonstrated in the 18th century when he demonstrated something now called Bayes’ Theorem.

As Bayes showed, P(M|X)=P(X|M)P(M)/P(X) where P(M) is the unconditional probability someone is a mass shooter, and P(X) is the unconditional probability that someone has characteristic X.

The problem with attempting to determine whether someone with X poses a risk is that mass shooters are extremely rare, and hence P(M) is extremely small.

USA Today estimated there were 270 odd mass shootings between 2005 and 2017. A Michael Bloomberg-funded anti-gun group counts 110. Given a population of around 300 million, even using the higher number a rough estimate of P(M) is 9e-7: a 9 with six zeros in front of it. Therefore, even if P(X|M)=1 (i.e., all mass shooters share some characteristic X) , for any characteristic X that occurs fairly frequently in the population P(M|X) is extremely small.

Consider a characteristic where there is fairly good data on on P(X): schizophrenia. It is estimated that 1 percent of the population is schizophrenic. Plugging .01 for P(X) gives a value of P(M|X) of 9e-5, or about 1 out of 10,000. Meaning that the likelihood a random schizophrenic will commit a mass shooting is .001 percent.

This actually overstates matters, because P(X|M)<1. Indeed, since mass shootings are in fact quite heterogeneous, P(X|M) is likely to be far less than one for most characteristics.

Things get even worse if one broadens the scope of the characteristic used to define the red flag. If instead of using schizophrenia, one uses serious mental illness, by some measures P(X)=.2. Well, if you increase the denominator by a factor of 20, P(M|X) falls by a factor of 20. So instead of a probability of .001 percent, the probability is .00005 percent.

And again, that is an exaggeration because it assumes P(X|M)=1.

Meaning that putting a red flag on schizophrenics or those who have experienced some mental illness will be vastly overinclusive.

Of course, life is a matter of trade-offs. One must weigh the costs imposed on those who are wrongly stigmatized (“false positives”) with the benefit of reducing mass shootings by imposing restrictions based on an overinclusive, but at least somewhat informative signal (i.e., a signal with P(X|M)>0).

For some there is no trade-off at all. For those primarily on the left who believe that guns are an anathema and have no benefit whatsoever, even a 99.99995 percent false positive rate is not at all costly. However, a very large number of Americans do think bearing arms is beneficial, these false positives come at a high cost.

That’s where the debate should really focus: the rate of false positives and the cost of those false positives vs. the benefits of true positives (which would represent mass shootings avoided). What Bayes’ Theorem implies is that for an act that someone is extremely unlikely to commit, that false positive rate is likely to be extremely high. It also implies that debating in terms of P(X|M) provides very little insight. P(M) is small, and for any fairly common characteristic, P(X) is fairly large, so P(X|M) has relatively little impact on the rate of false positives.

Again, what Bayes’ Theorem tells us is that for a rare event like mass shooting, vastly more innocent people than true risks will be red flagged. The costs of restricting those who pose no risk must be weighed against the benefits of reducing modestly the risk of a very rare event. Further, it must be recognized that implementing red flag rules are costly, and in these costs should be included the invasions of privacy that they inevitably entail. Yet further, red flag rules are certain to be abused by those with a grudge. And yet further, many of those with characteristic X will escape detection, or will be able to evade the legal restrictions (and indeed have a high motivation to do so).

In the aftermath of mass shootings, there is a hue and cry to do something. The hard lesson taught by Parson Bayes is that there is not a lot we can do. Or put more precisely, those things that we can do will inevitably stigmatize and restrict vastly more innocent people than constrain malign ones.

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August 7, 2019

If White Supremacists Did Not Exist, the Left Would Have to Invent Them–and It Largely Has For Political Advantage

Filed under: Politics — cpirrong @ 6:14 pm

Are there white supremacists in the United States? Of course there are. There always have been. By every objective measure, however, white supremacism of the type epitomized by the 1920s KKK has declined inexorably since then, and true white supremacists are on the fringes of the fringe. Most are economically and politically marginalized–extremely so. I would surmise that the stronghold of white power is prison gangs. A stark contrast to, say, 1920s Indiana (not to mention southern states) where the KKK was chock full of people in upper social echelons, and was the premier political power broker in the state.

But to follow political commentary today–not to mention Twitter–you’d think that white supremacism is regnant in America, and that everyone to the right of Bernie Sanders is an incipient terrorist, ready to don a hood, pick up a torch, and join a group of night riders. When they are not planning a mass public shooting.

These assertions are at their most lurid in the aftermath of mass shootings. Even when at least one mass shooter is an admitted leftist. And although Trump is blamed for the rise of supremacism, long before Trump the left was in the habit of jumping to the conclusion that mass shootings were the work of their political enemies: remember Brian Ross claiming that the (deranged) Aurora, CO shooter was a Tea Party member?

This is political opportunism of the rankest sort. The left exploits (selectively) human tragedy on the flimsiest of evidence (and often no evidence at all) to tie all of its political enemies to the acts of a person who is almost always deeply mentally disturbed, and to the extent that politics figures into their acts, it is something used to construct an identity that is otherwise lacking, or repellent. Never let a crisis go to waste, you know.

The selectivity is important. The left inevitably draws broad, societal conclusions from the acts of madmen who are colorably racist: the acts of those who are express leftist opinions (such as the Dayton shooter) are passed over in silence, and there is no attempt to project their beliefs on millions of other Americans, let alone insinuate that millions of other Americans are complicit in their actions.

The logic that is employed–and I use the word “logic” guardedly–would do Sir Bedevere (he of the Python witch trial) proud. The left finds a point of commonality (e.g., an expressed opposition to illegal immigration) between a white supremacist and people not on the left, no matter how tangential, and asserts that this implies that the non-leftists share all of the supremacist’s beliefs.

Someone should explain Venn diagrams to these people. Or the difference between necessary and sufficient conditions.

I jest. They are not interested in being logical. They are intent on trampling logic to tar their political opponents.

It is the most despicable kind of McCarthyism, ironically adopted by those who claim to be the heirs of McCarthy’s enemies and victims.

More importantly, it incredibly corrosive and greatly exacerbates social tension and social conflict. Those who are lumped in with the deranged, and who know that even if they are not woke they are not racial supremacists, rightly feel under assault. Particularly because the invective is coming in torrents from those who occupy the commanding heights in media and politics, and because they know the invective is completely wrong and hence is being spewed in a deliberate attempt to intimidate or harm. Perversely (from the leftist perspective) this bolsters support of the left’s bêtes noires, most notably Donald Trump, precisely because he can fight back, and actually relishes doing so.

Yet they continue. No. They continually ratchet up the attacks, oblivious to the fact that their previous attacks have been wholly counterproductive and actually fed the beast they want to slay.

The whole situation is perverse beyond words. Driven to apoplexy by Trump’s election, and since then his survival, the left drives people into his camp and intensifies the support of those already in it with their unhinged attacks and their slanderous equation of anyone who does not endorse their agenda with retrograde racist throwbacks and mass shooters.

This has massively intensified the divisions in the country, and has created what can only be described as pre-revolutionary conditions heavy with the potential for widespread violence.

Two factors are at work here. One strategic, the other more tactical. The strategic one is the left’s will to power, which is the underlying driving force and overarching strategic objective. The more tactical one is identity politics, which the left has routinely employed as a means of rallying support and preventing the loss of key groups of supporters (notably socially conservative blacks and Latinos). Both of these are inherently divisive, and stoke social conflict which is already bad enough but could easily escalate into something far uglier than the ugliness we witness today.

And it’s only 2019. I shudder to think at what the atmosphere will be like a year from now, with an election looming.

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August 6, 2019

Do What I Say or I’ll Blow the Yuan’s Brains All Over This Town: Not a Credible Threat

Filed under: China,Economics,Politics — cpirrong @ 6:14 pm

The recent market tumult was precipitated by Trump’s announcement of new tariffs on China. But the effect of Trump’s action on the markets paled in comparison to the response to China’s retort: allowing the yuan to breach 7/USD. Today the market recovered some, because the yuan appreciated.

A couple of points. First of all, the yuan’s do-si-do demonstrates that it is a managed/controlled currency. Whether you call it a manipulated currency is a matter of semantics. It is not primarily moving in response to market forces, but instead to the dictates of the (laughably mis-named) People’s Bank of China, and hence to the whims of the CCP and Xi.

Second, and more importantly, although the move past 7 was clearly a threat by China to wage a currency war in response to Trump’s tariff gambits (and the market took it as such), this threat is not credible. It reminds me of this classic, but no doubt politically incorrect, scene from Blazing Saddles: “Drop it, or I’ll blow the yuan’s brains all over this town.”*

The threat is not credible, because like Cleavon Little’s cranium in Blazing Saddles, China would be hurt most if it carried through on the threat. Yes, a depreciating yuan would favor Chinese exports and offset (for a while, anyways) the effect of tariffs. But a weak yuan would wreak havoc on many Chinese firms that have borrowed in dollars. Given the dodgy state of the Chinese banking system, this could readily metastasize into a full-blown financial and/or currency crisis. It would also spark inflation and totally undermine the stated (but largely unrealized) goal of moving China towards a consumer-driven economy.

There are no doubt many (perhaps even a majority) in the US (and the West generally) who will be as stupid as the townspeople of Rock Ridge. I doubt Trump is one of them. Or if he is, I doubt he would lay down his guns: he’d be happy to see Xi pull the trigger. So I expect him to call the bluff.

One last thing. Framing the US-Chinese relationship in terms of “trade war” is stupidity befitting Governor Le Petomane. Trade is just one front in a far broader great power contest between a revisionist power and the status quo power. After decades of complacency, interrupted by spasms of romanticism, the US recognizes China as its primary strategic competitor and threat. The contest is being joined on many fronts, analogous to the Cold War. The main distinctions are that China is not nearly the same nuclear threat that the USSR was back in the day, but China is far more formidable economically than the USSR ever was. Hence there is an economic dimension to this competition that was largely lacking 1945-1991.

Trade is not the war. Trade is a weapon in a larger war.

*In fact, most of Blazing Saddles is beyond the pale today. There is no way it could be made in 2019. This is a sad testament on the utter inability of our alleged elite to see past the superficialities in order to grasp the true message of Brooks’ classic film. As a result, IDGAF if anyone gets the vapors over my reference to the most politically incorrect scene in a very politically incorrect–but brilliant–movie.

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August 4, 2019

Pork Wednesday: A Tale of Gilded Age LaSalle Street, With a Heavy Dose of Irony

Filed under: Commodities,Derivatives,Economics,Exchanges — cpirrong @ 7:05 pm

On Friday, someone tweeted a picture of the front page of the Chicago Tribune from 126 years prior–2 August, 1893. It depicts the trading floor of the Chicago Board of Trade when a pork corner collapsed:

Actually, two corners collapsed on that day: the one in pork, and another in lard. The “provisions” markets (as the futures in pork and its products were called) had been successfully cornered repeatedly in the year running up to August, but the corners failed in August because the Panic of 1893 (which began in May of that year) weakened demand and made it impossible to sustain prices. From 31 July to 2 August, the price of pork futures fell from $19.25/barrel to $10.50, and lard fell from 9 cents/lb. to 5.9 cents/lb. The pork price fell $9 in 30 minutes.

The night prior to the collapse, the cornerers (notably John Cudahy, of the Cudahy family of meat packers) tried to hammer out an agreement with their bankers to secure financing to fund the deal, but Cudahy’s brother Michael (who ran the family packing establishment) refused to sign. Lacking the ability to fund their positions, the cornerers had to sell, and prices collapsed. (A la Silver Thursday when the Hunt Brothers ran out of money and had to sell. So perhaps this event should be called Pork Wednesday.)

I have spent a good deal of my professional career studying manipulation, so I find these things of academic interest. They are also fascinating from a historical perspective. Not only was this front page news in Chicago, it was front page news around the country: this paper from Omaha is just one example. This is not surprising, given the importance of agriculture in the economy at the time. Agriculture was the biggest industry and employer in the country, and food represented the largest share of consumption, so the vicissitudes of trading on the CBOT and the New York Cotton Exchange were of deep interest to most Americans. Events like those of 2 August, 1893 were a major impetus behind efforts to regulate (or ban) futures trading. These efforts failed until the post-WWI agricultural depression.

And look how big the pork pit was! It would give the 1990s-era T-bond and T-note pits a run for their money.

Further, the ag futures markets were of such economic importance at the time that they created systemic risks. The collapse of the pork and lard corner, occurring in particular as it did when banks were under suspicion due to the Panic, and when there was no deposit insurance or lender of last resort, caused runs on several banks in Chicago due to fears that they had extended credit to the cornerers or one of the four brokerage firms that failed due to the collapse, and hence were insolvent. Two prominent private banks run by Jews failed. The owner of one, Herman Scheffner, committed suicide by drowning himself in Lake Michigan. The owner of the other, Lazarus Silverman, had staved off a run at the onset of the Panic in May, but could not secure funding in New York in August, and suspended payments on 3 August. The failure of these banks, and the heavy withdrawals at others, contributed to a decline in economic activity in Chicago and the Midwest and exacerbated the prolonged depression that gripped the country from 1893 to 1897.

Lazarus Silverman’s story is of particular interest to me, in part due to a family connection (by marriage) and in part due to the compelling nature of the story itself. Silverman had immigrated from Bavaria before the Civil War, and started a business as a bank note broker which developed into one of the premier private banks in Chicago. His bank on Dearborn Street was quite the edifice:

He advised Senator John Sherman on monetary questions, and was a major financier of the development of iron ore in the Mesabi Range. An early investor in Chicago real estate, he was one of the giants of the Chicago financial community during the Gilded Age.

Although his assets exceeded the liabilities of the failed bank, it could not avoid bankruptcy. Nonetheless, due to his great stature and respect in the community, he was basically allowed to serve as his own bankruptcy trustee. Even though the bank’s debts were discharged in bankruptcy and he was therefore under no legal obligation to do so, he spent the remainder of his life repaying its unsecured creditors. After the failure, he conducted his real estate business out a building he had commissioned and whichA now houses the Standard Club.

I have often wondered if Silverman ever pondered the irony that he, a devout Jew who would not conduct business on Saturday (despite the fact that was a working day back then), whose business had survived the Civil War, the Chicago Fire, and the Panic of 1873, was brought low by the collapse of a corner in pork and lard.

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August 3, 2019

Renewables Are Expensive Because You Can’t Stick ‘Em Where the Sun Don’t Shine (or the Wind Don’t Blow)

Filed under: Climate Change,Economics,Energy,Politics,Regulation — cpirrong @ 4:45 pm

I’m sure you’ve read articles claiming that the cost of renewables electricity generation is approaching that (or even lower than) the cost of traditional thermal generation. I am deeply skeptical of these claims even when evaluated on their own terms (which focus on generation costs alone), but find them particularly misleading because they ignore other costs attributable to the facts that renewables are intermittent and diffuse, and that the siting of renewables generation is sharply constrained because they are energy limited resources; the distribution of energy is dictated by nature; and typically is not closely related to the distribution of load.

In other words, renewables are costly because you can’t stick them where the sun don’t shine (or the wind don’t blow).

Case in point: Australia. As even Bloomberg (a tiresome renewables fanzine) reports:

Australia’s financing of cleaner power is slowing because the country’s aging grid isn’t being upgraded quick enough to accept new, intermittent generation and transport it efficiently to demand centers.

Although Bloomberg attempts to blame an old, creaky transmission system, this is misleading in the extreme. It would be far cheaper to upgrade Australia’s transmission system to accommodate thermal generation than it will be to build transmission to increase the fraction of generation coming from renewables.

This is true for at least a couple of reasons.

First, the energy-limited nature of renewables means that you have to site them where the energy is available–sunny or windy places. This imposes a constraint on the location of generation resources that is not relevant for thermal generation. With traditional fossil-fueled generation, you have more flexibility in trading off transmission costs with generation costs (including the cost of brining fuel to plants) than is the case with wind. This flexibility means that all else (notably the spatial distribution of load) equal, transmission costs are lower with thermal generation than renewable power.

Second, the intermittent and inherently more volatile nature of renewables generation increases the variance in the spatial distribution of generation. This variability in the spatial distribution of generation necessarily requires more transmission capacity per unit of load. This, in turn implies a lower average rate of utilization of transmission resources.

The basic idea here can be illustrated relatively simply. Consider a system with two generation resources. One is highly volatile (e.g., a renewable resource). The other is controllable. There is one load location. The transmission capacity from the volatile location to load must be high enough to carry the power when output is high (because the energy input is high due to the vicissitudes of sun or wind). The transmission capacity from the location with controllable generation must also be high enough to transmit enough power to fill the gap left when the renewable output is low.

Note that when renewable output is high, controllable output will be low and the transmission lines from the latter will operate at low capacity. When renewable output is low, the lines serving it will be operating at low capacity.

It’s possible to expand the example to include multiple variable, energy limited, but imperfectly correlated renewables resources, but the outcome is the same. You need more transmission capacity to deal with the spatial volatility in generation, and given load, higher capacity translates into lower average capacity utilization.

Thus, the problem that Australia is confronting isn’t a function of an old grid: it arises from the fact that increased reliance on renewables requires investment in new transmission capacity even in a system where transmission is optimized relative to (thermal) generation and load.

The need to maintain relatively underutilized transmission capacity to deal with the inherent volatility of renewables generation is mirrored by the need to maintain underutilized thermal generation capacity:

While new clean energy projects struggle to gain access to a congested grid, aging coal and gas-fired generators are being kept running for longer to maintain system stability. AGL Energy Ltd. said Friday it would delay the planned closure of its Liddell and Torrens A plants, both around 50 years old, to help the national energy market cope with peak summer demand, which has seen blackouts in parts of southeastern Australia in recent years.

Who knew?

Yet the renewables industry/lobby continues to flog the dogma that they will inevitably be more efficient:

Despite the challenges facing the industry, it’s not all doom and gloom. A number of coal-fired plants will be retired over the next decade and they will only be replaced by the cheapest cost of energy, which is renewables, Clean Energy Finance Corp. Chief Executive Ian Learmonth said in an interview.
“I’m hoping once some of these issues around the grid and regulations are settled that we’ll see another significant uptick in the renewable energy pipeline,” he said.

What costs is Mr. Learmonth including in his assertion that renewables are the “cheapest” source of energy? His statement that settling “issues around the grid” will lead to increased renewables investment suggests that he is ignoring crucial costs, because settling these issues doesn’t come for free.

It’s not as if the transmission issue is unique to Australia. It is present in every locale that has force-fed renewables. Germany is a prominent example. Wind energy is abundant in the North Sea, but believe it or not, there aren’t a lot of electricity consumers there (despite my ardent wish that Merkel and her ilk get into the sea). Major sources of load are in central and southern Germany, so bringing North Sea wind power to load requires massive transmission investments, which inevitably are not just costly, but politically difficult (Der NIMBY, anyone?). These difficulties inflate the cost.

Renewables boosterism operates in an atmosphere of serious unreality because it consistently glosses over–or ignores altogether–the costs arising from intermittency, diffusiveness, the energy-limited nature of wind and solar, and the caprices of nature that cause a mismatch between where the energy exists and where it is needed. When these facts are considered, sticking renewables where the sun don’t shine makes perfect sense.

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July 27, 2019

It’s Not “The Squad”: It’s the New Gang of Four

Filed under: China,Politics — cpirrong @ 5:31 pm

Someone (@jgibbons74) responding to one of my tweets regarding @AOC’s most recent demonstration of fatuity said that she reminded him of Madam Mao, Jiang Qing. This comparison is very apt. And it set off a series of connections in my mind. Jiang was the leader of the Gang of Four, the hard-core communists who were the driving force behind the insane and evil Cultural Revolution in China. AOC is part of a group of four hard core leftists who aspire at nothing less than a social and cultural revolution in the United States. (Fortunately, I can still use lower case letters.) They call themselves “The Squad,” but given their very real ambitions (about which they are quite explicit), and the historical antecedent in China, this appellation is far too benign and non-descriptive.

No. They really should be called The New Gang of Four.

And here’s the scary thing: I wouldn’t be surprised if they consider that a compliment.

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