In her article at Greentech Media Emma Foehringer Merchant tells the inconvenient truth:

The pieces of a renewable-forward future are falling into place. Wind, solar, and storage are accelerating. Plummeting costs and greater security in investment mean countries are increasingly looking to renewable technologies as a safe bet. And prices for offshore wind and battery storage are dropping faster than expected.

One hitch, though: That renewable future still won’t mean the globe reaches its climate goals.

which anyone with any mathematical or engineering insight could have told you for the last twenty years. Even if fully implemented the measures being proposed won’t accomplish the objectives that supporters say are necessary for the survival of the human species.

Don’t tell me the cost of the first step or the next step. Give me the bottom line. Tell me what will solve the problem.

Doing anything else really makes one think that these advocates have some other agenda in mind.

I continue to think, as I have thought for many years, that we should be building more nuclear power stations and devoting more attention to capture methods than is presently the case.

In a Wall Street Journal article analyzing Volswagen’s full bore commitment to electric vehicles I found this quote from VW CEO Matthias Müller telling:

Mr. Müller said Volkswagen had to have its feet planted firmly on both sides of the field. It had to keep developing the combustion engine until the market for new technology takes off. “That’s why I say the technologies will have to coexist,” he said. “One day, electric vehicles will make up 25% of our sales.”

The emphasis is mine.

Let’s do a quick reality check. EVs presently constitute less than 2% of VW’s sales. If the second largest auto company in the world presently sells fewer than 2% EVs and sees that topping out at 25% “one day” (the largest car company, Toyota, doesn’t produce an EV; hybrids constitute about 25% of its sales), how long will it be before all of the vehicles on the road are electrics?

IMO VW would do better by spending its money rebuilding the trust it’s lost by committing fraud about the emissions produce by its diesels.

At RealClearEnergy Josh T. Smith points out something that hadn’t occurred to me. Fossil fuel producers receive substantial subsidies in the form of the very structure of the energy grid:

According to a report by Management Information Services, Inc., a DC consulting firm, the oil and gas industry has received 54 percent of all energy incentives since 1950. Federal energy incentives and favoritism only recently flipped to favor renewables––and flipped big. From 2011 to 2016, renewable energy got more than three times what oil, natural gas, coal, and nuclear received combined.

A huge form of support for the fossil fuel industry is harder to quantify, however. The electrical grid is built with fossil fuel producers in mind. The system is designed to move power in one direction, from producers to consumers. With the emergence of distributed energy sources,, however, electricity now moves from consumers to be used by others–as well as from large power plants. Many current energy policy debates are artifacts of the grid’s design and represent a conflict between the old model and what may eventually become a new way of powering our lives.

My preferred strategy would be, taking a day forward approach, to start eliminating all subsidies for energy and fuel producers, whether fossil fuels, ethanol, solar, wind, or other. These competing technologies should succeed or fail on their own merits.

The single exception to that would be the grid. If we want a resilient, durable power grid suitable for today’s needs it will need to be built by governments, just as roads are built by governments.

At the Foundation for Economic Education Alston Ghafourifar presents some information which is obvious to anyone who’s actually studied the issue but I’m sure will be bitterly rejected by many. Automation is a net creator of jobs, as true today as in the 20th, 19th, and 18th centuries. The most compelling evidence he offers is from a recent study in the United Kingdom:

A Deloitte study of automation in the U.K. found that 800,000 low-skilled jobs were eliminated as the result of AI and other automation technologies. But get this: 3.5 million new jobs were created as well, and those jobs paid on average nearly $13,000 more per year than the ones that were lost.

Positive, worker-friendly outcomes like this illustrate a more complete range of possibilities for automation. Technology is changing the way we work – that’s not in dispute. These changes can improve people’s lives and lead to a more creative, intellectually engaged workforce. AI often means that employees can spend more time on complex tasks for which they are uniquely suited, like interacting with customers or brainstorming innovative new campaigns.

The other examples he cites, Panera whose experience I’ve written about in the past, and Marlin Steel, whose experience is characterized here:

Drew Greenblatt, CEO and owner of Marlin Steel, credits automation with not only providing a lifeline to the company but to its employees as well. “All of a sudden they’re super productive and it’s because we’ve given them the tools – it’s robotics and automation,” he said. “Thank God for robots. If it wasn’t for robots, these guys would be unemployed.”

Leveraging robotics helped Marlin Steel land major clients by creating higher-quality products. The company’s success suggests yet another positive side effect of automation: the opportunity for companies to enter into higher-margin product lines. Staying competitive means always finding a new edge, a differentiator that inspires people to choose your company over the next.

are both anecdotal but also indicative. The experience of the last 300 years is that automation and efficiency actually produce more jobs than they destroy. That’s why, despite the large number of farming jobs that have been lost over the years, more people are gainfully and productively employed than at any time in human history.

Tellingly, there are no counterexamples over that period. While the people in nearly every country are living better than ever before, no country has experienced persistent massive unemployment due to automation.

That tells us that persistent technological unemployment is a risk to be mitigated rather than an issue. The graver concerns are the factors that are preventing new jobs from being created: governments taking too much money out of the private sector, excessive government regulation, barriers to trade particularly the one way autarkies favored by some of our major trading partners, and protections being given to favored occupations that are prime targets for automation.

What is true is that the sorts of jobs on offer will change. There aren’t nearly as many jobs plowing fields behind a team of mules or hauling loads by driving a team of draft horses as there used to be and I strongly suspect there are few who want to see those jobs return. There are millions more truckers than there ever were of those original teamsters and they’re paid a lot better.

I agree with at least one component of Daniel Castro’s remarks at RealClearPolicy on the data breach at Equifax. It’s time, long past time actually, to abandon the Social Security number system:

We should replace the outdated, paper-based system of Social Security numbers with a secure identity system built for the digital era. To accomplish this, Congress must significantly expand the National Strategy for Trusted Identities in Cyberspace, an initiative led by the Department of Commerce to create secure electronic IDs that can be used both commercially and in government.

These electronic IDs would allow individuals to prove their identities (or attributes about their identities) securely to other systems — a complete replacement of the 80-year-old SSN for the digital era. Individuals could use these electronic IDs for a variety of purposes, from applying for credit and signing legal documents to verifying they are over the age of 21 when ordering wine online. The State Department, which already has systems and processes in place to verify the identity of individuals who apply for passports, could issue these electronic IDs. The IDs themselves could be either physical or digital artifacts, such as a smartcard or digital certificate installed in a mobile app.

The Social Security number system was devised when in all likelihood the system was administered with ledger cards. There was a ledger card for each individual enrolled in the system. In all likelihood each transaction was handwritten in—IIRC the ledger card machine which could imprint ledger cards wasn’t available until 1958.

There were far, far fewer of them, too. I believe the entire cache of old Social Security ledger cards are sitting around somewhere in 500 boxes.

Some form of biometric ID should be adopted. Not only would that make the system more secure it would make fraud a lot more expensive if not impossible.

Most OECD countries other than the Anglosphere countries, Denmark, and Norway have national ID cards, many of them are compulsory, and an increasing number are biometric IDs. It’s an idea whose time came a long time ago.

Update

About 35 years ago I advised a client not to use Social Security numbers as the primary ID for individuals in their computer systems on the grounds that it was insecure and likely to be banned. That’s exactly what has happened in many states but I wouldn’t be a bit surprised if there were still a lot of systems out there which use SSNs as primary IDs.

Charles Lipson makes a good point with respect to Equifax’s data breach: why did neither the company’s Chief Security Officer nor its Chief Information Officer had any background in security, information, or computer science:

At first, I thought this LinkedIn profile for Susan Mauldin, Equifax’s chief security officer, was a joke.

It’s not.

The joke is on us.

Do you think the Chief Information Officer has a stronger background?

Nope. BA in Russian, an MBA, and then some work in a bank.

There are several obvious conclusions that may be taken from this. The first is that Equifax clearly didn’t take security seriously. Frankly, I’m skeptical that it will do so even with recent developments. I guess I should be philosophical about it. The company probably won’t exist in five years.

The other conclusion is that “technocracy” doesn’t mean what you think it means. In theory it means “rule by experts”. What does it mean in practice? My read is that both of these managers were Rolodex hires.

I’m not sure of what to make of this report about China’s economy from Global Security Review:

Over two million Chinese workers have been laid off in recent months due to “over capacity.” Companies have been shut down as employers either sold their businesses or simply disappeared. These layoffs have increased the numbers of unemployed youth in urban areas, increasing the risk of social unrest.

Chinese President Xi Jinping has suggested sending China’s increasingly debt-prone youth to work in the country, in a “Second Cultural Revolution.” Few have taken the offer despite employment opportunities in farming, food processing, and rural tourism.

Let’s put that into some perspective. Two million sounds like a lot but the total number of employed persons in China is around three-quarters of a billion. Two million people represent about a third of one percent of China’s workforce.

I agree with a lot of what’s in the article but China is so large and the economic numbers we receive are so cooked I have no idea how we can discern what’s actually happening at this great distance. I doubt that we could tell that China had collapsed until it had already happened. Maybe not even then.

In his latest essay at RealClearMarkets Jeffrey Snider asks a very simple question: why hasn’t stimulus, pump-priming worked? As is the case with all of his essays I’ve read so far, it’s unexcerptable. I’m not even sure I can really recommend that you read the whole thing. Here’s a taste:

Keynes coalmine parable is incomplete. The Treasury Department can print and bury a whole lot of banknotes in the ground, have private businesses extract them from under the town refuse, and then watch as they are hoarded, too, along with money and cash already in and then out of circulation. The addition of new money is pointless unless it addresses the reason or reasons existing money has failed in the first place.

He has one answer and I have another. My answer is that the Great Recession followed the collapse of a bubble and bubbles are different. As a bubble inflates the increasing capacity is imaginary. It doesn’t really exist. When it collapses, it’s a return to reality. You can’t reinflate the bubble. There’s nothing to reinflate.

The implication of my theory is that our economy has been growing very, very slowly for a very long time. It’s not enough to revert back to 2006 or to 1999. You’ve got to go back much farther back than that (at least to 1993) and remediate the harm that all of the wrong choices that have been made over the intervening period has wrought.

At Forbes Nathan Lewis has a good post about the conundrum facing the United States. We have the highest corporate income tax rates among OECD countries but realize less revenue from corporate income taxes than other OECD countries do:

One of the harder economic concepts to embrace is that tax revenues, as a percentage of GDP, are often lower when rates are higher, and higher when rates are lower. Huh? The reason is that high rates have a multitude of effects, among them: people do not engage in highly-taxed activities; and there is inevitably intense pressure upon the political system to create all sorts of exemptions and exclusions, so that more activity is taxed at a lower rate, or untaxed.

That is why the U.S., with a 38.91% combined tax rate (according to the OECD), has total corporate tax revenue of a meager 2.06% of GDP, while Britain, with a 19.00% combined rate, has revenue of 2.58% of GDP (average over five years 2011-2015).

That’s not a “trickle-down” or “Laffer Curve” argument. It is a statement of fact based on observable behavior.

What are the objectives of corporate income taxes? If they are to ensure that corporations “pay their fair share”, they’re obviously not accomplishing that. If they’re to realize more revenue, they’re not accomplishing that, either.

Are they intended to provide big companies a competitive advantage over small companies? If so, that objective is neither legitimate nor desireable. New companies start small and they hire. Big companies have trimmed payrolls for decades.

Are they intended to show voters that politicians’ hearts are in the right place, that they’re on the side of the little guy? That’s not a legitimate reason, either, and it’s reducing the effectiveness of legitimate objectives of corporate income taxes.

How does 3.5% of a higher GDP realized from the corporate income tax sound?

Probably, the best thing would be to implement a full “flat tax” reform – the corporate half of the “flat tax” proposals that have already been worked out in detail. Personally, I like Steve Forbes’ version, described in The Flat Tax Revolution (2005). This would eliminate huge counterproductive swathes of the tax code, and probably produce much more revenue – perhaps as much as 3.5% of GDP, as demonstrated by Hong Kong, with its 16.5% rate.

Establish priorities. Do what is required to accomplish the priorities. Stop letting politicians campaign at the nation’s expense.