OK a few sketchy comments on the economy.
First, I think it’s a mistake to think that we live in “an economy”; we live in a collection if economies, which intersect more and less strongly at different connection points. The economy I live in has very little to do with the economy of an immigrant worker who lives in Lima, Ohio and works in a building services company, nor with the economy of a hedge fund manager who lives in Greenwich. The economy is one of ‘layers’ that coexist geographically but really have more to do with a larger, global network of peers – mine in Bangalore or London or Boston. We’ve been living through a decades in which the old industrial economy layer in the US has been eroding while other layers – technology, services, financial services – did great. Now we’re seeing two layers – two critical ones (the housing market and financial services) – get slammed.
And these are getting slammed because the markets are doing exactly what they are supposed to do – slam people who are massively greedy (“pigs get fat, hogs get slaughtered”) and who have been living and investing beyond their means.
And, I’ll suggest we’ve been doing that – somewhat – since the Clinton boom. I think we had two bubbles that started about the same time in the late 1990’s. One was the technology bubble, and one was the financial bubble that we’re just now starting to see deflate.
The financial history of America, remember, is one that was built on bubbles. Read Charles Beard on the economic history around Independence and the financial bubbles and manipulation that surrounded the actual creation of the country. The railroads left European investors with rooms full of worthless paper – and America with a railroad system. Global Crossing and the other tech companies didn’t just make Terry MacAuliffe rich; they left us with an infrastructure that’s valuable today.
I’m asking myself what will be left behind by this bubble, and to be honest, I’m not sure.
I’ll go read ‘Black Swan‘ again.
The current housing bust will enable the entire next generation of immigrants to own homes.
So the affordable housing that first-time buyers will experience for the next 5-10 years will be analogous to the affordable undersea cable.
‘Financial services’ have not ended. They are just losing money on having stoked the housing bubble. They also lost money in the dot-com bubble. Wall Street goes through this with EVERY bubble, as they create the bubbles.
Also, the next bubble has already begun in earnest.
It is the ‘green’ bubble.
Al Gore has a loyal legion of Bush-hating fans who will believe anything he says. He made a movie, and has seized the ‘global warming’ issue.
Having already accumulated a personal fortune of $200M through board memberships at Apple and Google, Gore has now joined Kleiner Perkins, the top VC firm in the world.
Three partners, Gore, Vinod Khosla, and John Doerr, are hyping up green technologies that their firm has invested in. This is a classic ‘pump and dump’ strategy. It is not illegal, but is in a moral gray area, as the institutional bigwigs are hyping up something that average suckers are going to buy into right before it drops.
This will be much bigger than the dot-com bubble, as it has a much more fascist/cult component to it. You are evil if you question Gore, or call the bubble a bubble. Also, because many green companies wil be government-subsidised, which dot-coms where not. Governments will also help in hyping the mood to help pump startup valuations so that VCs can sell to suckers.
Predictions :
a) The ‘green’ bubble will peak in 2010 or 2011.
b) Al Gore will be worth over $1 Billion by 2011
c) Many high-flying alt-energy startups will collapse in a dot-com-like manner, ruining many small investors who bought as Gore, Doerr, and Khosla were selling.
d) Many good technologies, of course, will come of it, just like Web 2.0, Wi-Fi, etc. came out of the dot-com bust.
The warning signs :
a) All sorts of energy stocks are booming.
b) Ads to ‘invest in alt-energy’ pop up everywhere, just like ads for first Real Estate and now gold are everywhere.
c) Middle class people will start talking about how much money they are making in these stocks, and will get visibly angry when anyone compares this to the dot-com bubble.
Let’s distinguish the “bubble” created by rampant financial speculation from actual (and often spectacular) progress in the underlying technologies.
“Moore’s Law”:http://en.wikipedia.org/wiki/Moore%27s_law is a reasonably accurate description of progress in semiconductor manufacturing, generally extrapolated to computers in general. Strictly speaking, it says that the number of transistors on an integrated circuit doubles about every two years. More generally, the power of computers grows, and the cost for the same amount of computing shrinks, at about the same rate. The astonishing thing is that this has been going on for almost fifty years (25 doublings!).
This is a genuine increase in value through scientific and engineering research and creativity. Meanwhile, people have been creating companies, some successful, some not. Speculators have created bubbles, and many of those bubbles have grown and burst. But still, vast wealth has been created and the world has changed.
What should we learn from this?
First, entrepreneurs, speculators, and bubbles come and go, but you have to keep feeding the (relatively modest) needs of the research and development pipeline if you want to keep the wealth flowing. The USA has seemingly lost sight of this important fact. Investment in R+D has dropped substantially over the past decade or two, and this is especially true for the basic research that really feeds wealth creation decades later. Furthermore, our educational and immigration systems are joint disasters, cutting into our former ability to grow and attract the best minds around the world.
Second, information is the basis of Moore’s Law, but energy is the basis for the most important bottlenecks we see in the future. If we want to thrive, we had better pump R+D money into energy, as well as plenty into information and biotech.
Our current wealth as a society is built largely on public research investments in research during the 1940s, 50s, 60s, and 70s.
Yes, it’s a big mess when a big bubble bursts. But if you think the bubble represents the real wealth of the country, you are missing the real story.
GK [#2] thinks the bubble is “green”. Actually, the bubble is “energy”, and he’s right that there will be speculators, and money made and lost on vapor. But there are also real problems to be solved, and real technological progress being made.
What kind of a difference do you think it will make to our country, if these next scientific and technological developments take place in the USA, versus if they take place in Europe and in the Far East? There will be enormously valuable new products created in the next few decades. Should we be buying them, or selling them? Hmmm?
Beard, I don’t know where you were in the late 90’s, but I was consulting to dot-coms who had no feasible business model and were being traded like tulip bulbs. So yes, there was an underlying increase in productivity.
But the financial pyramids erected on that improvement were several orders of magnitude bigger.
A.L.
In the late 90s, I was in charge of a substantial organization, in which several hundred people were developing new basic and applied knowledge in various areas of computing technology. Some of this is already recognized as immensely valuable; some is very promising and will mature over the next decade or two; and some is (apparently) blind alleys (or dry holes, if you like that metaphor).
The bubbles come and go, and it’s shocking how much money some undeserving people make from vaporware, and how much is lost by deserving people when those bubbles burst. But that’s like mourning all the death that comes with evolution. That’s just how it works.
Don’t spend all your time watching the froth blowing from the tops of the waves. Keep track of where the waves are going.
And if those waves are valuable, over the long run, think about what you can do to keep them coming. (Mixing my metaphors horribly.)
In part, that’s the point of my post…so, yes.
A.L.
Any mis-over-valued stock is a mini-bubble, and results from the triumph of hope over experience and (often, obscure) fact. Short of abandoning all hope and getting an instant pipeline into Ultimate Fact, this is inevitable. The trade-off and balance point is the level of acceptable risk of loss and/or crisis that the investing public is willing to tolerate.
It’s interesting that psych and empirical finance experiments seem to show that fear trumps greed: people are more afraid of losing $X than they are eager to gain $X. So illusion intervenes, and is probably a necessary lubricant.
bq. _The railroads left European investors with rooms full of worthless paper – and America with a railroad system. Global Crossing and the other tech companies didn’t just make Terry MacAuliffe rich; they left us with an infrastructure that’s valuable today. I’m asking myself what will be left behind by this bubble, and to be honest, I’m not sure._ [A.L.]
Good point. Rather than sniping at GK, let me address your original, and very good, post.
You do make the important distinction between bubble and underlying value that I tried to highlight.
However, I think it’s important that it isn’t the _bubble_ that leaves behind the genuine value. There is some innovation that creates genuine value. Entrepreneurs and investors get into the process of turning innovation into enterprises, at which serious wealth can be created. Once people see wealth being created, the speculators arrive and try to hitchhike on the rising tide, without either contributing to it, or even really understanding what is going on. Ordinary people, seeing wealth being created, hand their savings over to investors and speculators, not really knowing the difference. Some of them do fine, and others are toast, but their money helps provide the capital pool.
When the bubble bursts, many of the speculators, and lots of people innocent and guilty, who are hitchhiking along with them, get burned. But that’s just evolution in action. Capitalism is just economic evolution.
Whether something is left behind depends on what the bubble was built upon. If it was built on tulip bulbs or chain letters, probably nothing. If it was built on semi-conductors, or telecommunication, or bio-technology, then quite a lot.
This is why GK’s post [#2] got me started. The energy issue has major substance to it, and major wealth will be created. (Why do you think you know the name “Rockefeller”?) Will there be a bubble? _Of course_ there will be a bubble, as sure as sowing seeds draws birds.
But is this a critically important problem, bringing with it astonishing opportunities for wealth creation? Yes.
bq. _I’m asking myself what will be left behind by this bubble, and to be honest, I’m not sure._ [A.L.]
In my previous post, I never responded to this point of yours.
I think the root cause of this bubble is the combination of two things: (1) the housing bubble, and (2) the innovative creation of a set of technical investment instruments that were so inscrutable that they invited both deliberate and accidental abuse.
I’m not optimistic about much underlying value coming from the current bubble burst. Though you could argue that learning a valuable lesson in the School of Hard Knocks counts as value. (But only if you learn it.)
bq. The School of Hard Knocks is the best school around. The problem is that the tuition is so high! Not only can you repeat each course as often as you like (paying the tuition each time around), but you have no choice whether to enroll or not.
So it goes.
#2 from GK at 2:42 am on Sep 19, 2008
GK, It is obvious that you don’t like Al Gore. It is also obvious that you haven’t looked beyond al gore when you talk about alternative energy.
GE has had billions of dollars of wind turbine contracts over the past year. the have been ramping up to this level of production for years, long before Al Gore.
They will invest 6B per year in alternative sources of Energy over the next few years.
British Petroleam BP, now is flooding the media with Beyond Petroleum as the new tag line for BP.
T Boone Pickens appears to be on board in a big way.
I could go on and on, but essentially, their might be a bubble in investment at some point but that is not rare in new and rapidly expanding industries.
Get over the Al Gore thing, it obscures you view.
Disclaimer: I am in no way a finance guy. Or an economics guy. Or a business guy.
So, can anyone explain what happened to AIG, and what’s going to happen to it in the future? The thing I’ve gleaned from the vaunted main stream media is that the government loaned AIG something like $85B in exchange for 80% of the company… at an interest rate of something like 11.5%, if I understand what I read correctly.
So doing some basic math (I am a math guy) that tells me that AIG would then owe the government something very near $10 billion dollars a year… in interest. So to read the basic media and newspaper accounts, I’m led to believe that a sick company has just signed away 80% of itself in perpetuity for the opportunity to be put on a $10B/year treadmill, and it’s called a bail out.
That… can’t be right, can it?
Or at least, that can’t be intended to be the new permanent state of affairs.
Is the basic idea here that AIG uses the cash to cover its debts while it essentially dismembers itself as quickly as possible, for sale on the open market over two year in order to pay back that debt? And at the end of it, the company is either a fifth of its former size, or more realistically is just plain dead?
That’s at least comprehensible to me. I don’t remember it going down exactly the same way during the S&L crisis (I was young) but I got the basic idea back then that the bad debts were assessed, parcelled off, and sold over the course of some years. This seems roughly analogous, but if anything a little more market-based. (Maybe it’s not– maybe the 80% controlling share of the government means the government supervises this like the S&L commissions supervised that.)
But is that properly considered a bail-out?
Likewise, Bear Stearns’ treatment was called a bail-out, but that was really a loan to JP Morgan enabling it to buy Bear Stearns for pennies on the dollar, because JPM had enough capital to cover BS’ positions. It was a “bail-out” so harsh that Bear Stearns actually sued to modify the terms of the deal.
Do I have the basic notion correct, here? Because if I do, well, the whole thing not only makes more sense, but also doesn’t seem nearly as scary and catastrophic. Bad, certainly, very bad, even, yes. But my liberal friends (well, actually one, and I don’t think I dignify him with the term friend, after all these years) has been spending his in three activities, this week:
1) Moaning that we’re all going to die
2) Expressing satisfaction that this happened because it makes a McCain victory less likely, and
3) Yucking it up by making Bush out to be a commie socialist because of AIG, Fannie Mae, and Freddie Mac now belonging to the government.
He gives liberalism a bad name, A.L., and makes me understand why you get so upset at pinheads on your team.
(Now, if someone can explain what happened to Fannie Mae and Freddie Mac, I’d be much obliged.)
“So, can anyone explain what happened to AIG, and what’s going to happen to it in the future?â€
-Marcus Vitruvius
You bet. What follows is a comprehensive essay by Dr. Michael Hudson from back in July just before Freddie & Fannie went over the cliff. EVERYTHING Hudson predicted here has come to pass and then some. I highly recommend that you cut, paste, and save this essay for future reference whenever someone asks your thoughts about the events which sunk America. My apologies in advanced for the length of this piece but there was no way to “properly link it and I just felt it too important not to share.
==
[Coldtype: While I greatly appreciate your desire to respond in a timely and thorough fashion to Marcus Vitruvius, I’m afraid crossposting a huge article that is billed as “A Counterpunch Special Report” almost certainly exceeds fair use (and thus, violates Counterpunch’s probable copyright). Further, it doesn’t constitute original content of substance. As such, it does not respect the comment guidelines — which I think you have already been advised of at least once.
I am deeply puzzled by your inability to find a working link to the text in question, when I was able to do so in a matter of literal seconds.
In a spirit of comity, here is a link to the article you inappropriately dumped here. “(link)”:http://www.counterpunch.org/hudson07152008.html
Nobody’s perfect. So you get a warning, and this is it. Do this again and you’ll need to email AL or Joe Katzman about being reinstated — because I will ban you out of hand for this sort of post in future.
I look forward to your personal, original, substantive content. I regret to say that this post did not qualify.
Cheerio. –NM]
Coldtype,
No, I mean the actual mechanics of what the government did to AIG this week, and the actual results and events that the government (or observers) expects over the next few years as a result. I would have thought that would have been clear from the rest of my post.
Spare yourself the effort of cutting and pasting an essay which will manifestly not answer those questions.
On to such substance as I am able to find in Coldtype’s post:
bq. I highly recommend that you cut, paste, and save this essay for future reference whenever someone asks your thoughts about the events which sunk America.
Ah. Meaning, it seems, you highly recommend that M. Vitruvius makes sure his thoughts are exactly those expressed by Dr Hudson.
And meaning that America is now sunk.
Well! Sure glad you tidied things up for us. Good thing you dropped by. We’d never have been able to think at all, or understand the state of America, if you hadn’t.
Goodness.
[Edited for civility]
My apologies again NM. I tried to link this the usual way but could not. As to Hudson’s points in the essay, were do you agree and disagree?
I just sweep up around here, Coldtype. I am unlikely to find worth in staring at the pile of cigarette butts I just cleaned up.
Maybe someone else will engage you on the substance of Dr Hudson’s essay. I’m not your guy at the moment.
All best, always,
NM
I see now NM. My eyes must be getting tired as I was originally on Hudson’s site when I found the essay–missed the Counterpunch link. Apologies.
Coldtype: All I did was Google any out-of-the-ordinary string of, say, 20 words of the text. Especially text that bridged headers or titles. My Google-fu is only average.
Apology cheerfully accepted.
And so to bed.
“GK, It is obvious that you don’t like Al Gore. ”
I don’t dislike him relative to other Democrats. He is a self-made centimillionaire through creative means, something other defeated Democrats like Jimmy Carter, Walter Mondale, Mike Dukakis, and John Kerry did not manage. Gore is a supreme hypocrite with his jets, mansion, etc. But hypocrisy is not a ctime.
But there is no denial that he is at the center of a pump-and-dump that will be the biggest in economic history. Far bigger than the dot-com bubble. This is not illegal at all, and savvy investors can profit alongside Gore. But it is being done.
Al Gore will be a billionaire by 2011.
“No, I mean the actual mechanics of what the government did to AIG this week, and the actual results and events that the government (or observers) expects over the next few years as a result”
-Marcus Vitruvius
Hope this helps then: “Part 1”:http://globaleconomicanalysis.blogspot.com/2008/09/nationalization-of-aig-treasury-to-get.html, “Part 2”:http://globaleconomicanalysis.blogspot.com/2008/09/aig-bailout-fed-loophole-133.html (comment sections in both are helpful)
“Spare yourself the effort of cutting and pasting an essay which will manifestly not answer those questions”
-MV
It’s a little informal but “I think you’ll get the drift”:http://www.democracynow.org/2008/9/17/us_seizes_control_of_aig_with
“Now, if someone can explain what happened to Fannie Mae and Freddie Mac, I’d be much obliged”
-Marcus Vitruvius
_Now_ my first “Michael Hudson link appliesâ€:http://www.counterpunch.org/hudson07152008.html.
Night all.
_”Al Gore will be a billionaire by 2011.”_
But it all goes into The Lockbox.
bq. _But there is no denial that he is at the center of a pump-and-dump that will be the biggest in economic history. Far bigger than the dot-com bubble. This is not illegal at all, and savvy investors can profit alongside Gore. But it is being done._ [GK, #19]
GK, I think you use language differently from the rest of us.
Saying “there is no denial” about a controversial statement is just silly.
Do you apply “pump-and-dump” to everything that goes up and then down? Would you call the dot-com bubble (which went along with genuine wealth creation) a “pump-and-dump” scheme? Most people restrict that term to situations where the underlying value is not there, like those Internet spams that say, “Fly-by-night Airlines” is poised to go from 0.01/share to 0.09/share! Grab yours while you can!”
The implication of your posts is that there is no energy problem, no problem with global warming, and no genuine value to be created in alternate energy sources. If you actually believe this, I believe you are simply wrong.
As I’ve said before, will there be an energy bubble? Sure. But will real wealth be created in this sector, by solving real problems. Yes to that too.
If Al Gore helps that happen, and becomes a billionaire, what’s wrong with that? Do you begrudge T. Boone Pickens his billions? He’s done less for the country than Gore. How about Bill Gates?
Marcus Vitruvius: _So, can anyone explain what happened to AIG, and what’s going to happen to it in the future?_
No, I’m not sure we know the whole deal yet, but you may be right in considering that the government could make money on the AIG bailout. They eventually made money off of the Chrysler bailout. But the taxpayer is at risk if they don’t.
The government can make money if time and effort can fully realize AIG assets; if not, I expect that the loan will be written-off or AIG will collapse into bankruptcy. (Or more accurately, the unsold remainder of AIG will collapse)
The bailout cost will be determined by the difference between the cost in and cost out. Part of the cost out will be the transactional costs of selling assets. My office worked for the Resolution Trust in the early 90s. Selling assets requires the federal government to hire accountants, lawyers, realtors, etc.
There are other intangible costs too. The federal government ended up sending a lot of work to Chrysler after the bail out. Likewise, government procurement and policy decisions might be affected by the taxpayor stake in AIG. And then there is moral hazzard . . .
_(Now, if someone can explain what happened to Fannie Mae and Freddie Mac, I’d be much obliged.)_
I can understand business; I can understand government. I do not understand these hybrid entities, so I can’t help.
_”If Al Gore helps that happen, and becomes a billionaire, what’s wrong with that? “_
Only if his policies impoverish the rest of us along the way.
PD, #24:
I’m not so concerned about the government making or losing money to the tune of a few tens of billions of dollars. I mean, yeah, ordinarily that’s important, but in context, not so much.
The more I read today, the more I think that I have the general idea of the AIG fix correct– that this isn’t intended as a permanent takeover, but is more that the government is taking it over and keeping it alive until it dismembers itself to the status of being a head floating in a jar.
If the government loses (say) $20B in the pursuit of staving off a liquidity crunch that would lead to a major recession or even a depression, it seems like money well spent. And that seems to be the real systemic concern– a growing panic over a sizeable but not unmanageable chunk of bad debt causes these holding firms to need cash as their assets get devalued. But no one wants to provide that cash, because suddenly everyone needs more.
The trick, I guess, is to prevent the economy as a whole from depending on these interventions by making them as painful as possible for the people relying on them, which is why I think “bail-out” might be the wrong term.
It’s tempting to say something like, “It would be better if we didn’t have to do this at all,” which is true, but I’m not sure how we could reasonably get to that point without draconian regulations. Can we lance economic bubbles? Yeah, I think so. (I’m not speaking with any kind of authority– I think we can.) Do we have a mechanism of knowing the right time to do it?
But again, I am not a finance guy. It’s not even a hobby for me, like international politics is, so if someone else actually knows what they’re talking about and sees something obviously or even not obviously wrong with what I’m saying, I exhort you: Say something!
“The implication of your posts is that there is no energy problem, no problem with global warming, and no genuine value to be created in alternate energy sources. If you actually believe this, I believe you are simply wrong.”
Far from it. I have written many articles about energy technology.
Rather, it is you who think that the ONLY path to energy technological change is following the Gore commandments. If the same issue was seized by, say, Newt Gingrich or Dan Quayle, you would oppose 100% of it.
I say it is quite possible to advance energy technology, even though global warming is a hoax and a dangerous distraction from far more serious risks (ocean pollution, asteriod collision, etc.)
“If Al Gore helps that happen, and becomes a billionaire, what’s wrong with that?”
Nothing is wrong with it as long as laws are followed. Admire him as an entrepreneur in the Steve Jobs mold, but just don’t call him a selfless noble humanitarian in the Gandhi/MLK mold.
bq. _Rather, it is you who think that the ONLY path to energy technological change is following the Gore commandments. If the same issue was seized by, say, Newt Gingrich or Dan Quayle, you would oppose 100% of it._ [GK,#27]
Exactly what have I written that supports either of those conclusions?
bq. _I say it is quite possible to advance energy technology, even though global warming is a hoax and a dangerous distraction from far more serious risks (ocean pollution, asteriod collision, etc.)_ [GK,#27]
We agree on your first clause, but the “hoax” clause certainly doesn’t stand without justification. The National Academy of Sciences seems to think it’s a real problem. Have they been snookered too? How?
I assume your point about the dangers of asteroid collision is sarcasm, though that’s a dangerous thing to do in writing on a blog.
bq. _Admire [Al Gore] as an entrepreneur in the Steve Jobs mold, but just don’t call him a selfless noble humanitarian in the Gandhi/MLK mold._ [GK,#27]
If you look back at what I’ve written, I don’t think you’ll find me calling him a “selfless noble humanitarian”. On the other hand, I don’t see where he has profited from his crusade against global warming. Sure, he has a part-time job as a venture capitalist and (good for him) it pays him really well. How does that reflect badly on him?
The impression I get from your posts is that you disagree with the substance of the argument he is making, so you need to portray him as a hypocrite and a miserable, perhaps criminal, human being. Surely, people can disagree, even fundamentally, without having to trash each other.
(Along these lines, it’s interesting to remember that Ronald Reagan and Tip O’Neill were actually quite cordial friends.)
“I don’t see where he has profited from his crusade against global warming. ”
That is one of the most absurd things I have ever heard.
He earns about $300K per speech on global warming.
He is poised to make hundreds of millions with his greentech pump-and-dump.
He fed a gullible, Bush-hating international left the minimal bait they needed to thrust upon Gore an Oscar and a Nobel ‘Peace’ Prize. All this despite his lifestyle of consuming 20 times the energy of the average person.
You clearly think he is a noble saint, and will gladly buy into some cleantech IPO that enriches Gore, and leaves you hating capitalism.
Actually, his activities don’t reflect badly on him as they reflect badly on the fools that deify him and suspend all logic in the process. Gore is actually a smart one, who has channeled the emotions of millions of low-IQ fools into personal profit.
And yes, Asteroid impact is a bigger threat than ‘global warming’, as an Asteroid can happen at any time, and is an indisputable mathematical probability, unlike GW. An asteroid impact would also change the Earth’s climate suddenly and drastically.
Of course, an asteroid hit cannot be blamed on America/Bush/capitalism/reproducing heterosexuals, so the leftists are not interested in it.
GK, has it occurred to you that various flavors of new energy technology– cellulosic and algaic ethanol production, algaic crude production, electric vehicles and solar electricity production, primarily– are also key components in a good national security policy?
(Because they can both strengthen our economy by insulating it from oil prices, and– especially if shared with India and China as well as Western Europe– suck the price of oil down so far that OPEC and Russia lose a great deal of the economic clout.)
Sheesh.
“GK, has it occurred to you that various flavors of new energy technology– cellulosic and algaic ethanol production, algaic crude production, electric vehicles and solar electricity production, primarily– are also key components in a good national security policy?”
Indeed. And none of the above are being benefited by Al Gore’s campaign of personal enrichment. Al Gore is a costly distraction from such productive pursuits.
You, too, seem to assume that opposition to Al Gore equals opposition to energy technology, when nothing of the sort was said by me.
Double sheesh.
So if they have all this real value, how is what Gore is doing a pump and dump? I’m not a frantic worrier over global warming, but reasonable people can disagree on the impacts; it’s not like there’s not a raft of perfectly respectable scientists chiming in on this, you know.
Basically, I don’t understand the demonization you feel is necessary for Al Gore. (Not to mention, he’s been prett consistent about this since long before he had any ability to take personal profits from it, meaning, while he was still in office and bound by ethics regulations on investments.)
“how is what Gore is doing a pump and dump? ”
Just like Henry Blodget and others did a pump and dump in the dot-com days.
1) Gore is selling a hoax called ‘global warming’ to an eager audience who will believe anything that can be blamed on America/Capitalism/Bush.
2) His cultish followers promptly with an Oscar and the Yassir Arafat Peace Prize.
3) He joins a VC firm that has decades of pump and dump experience.
4) He proceeds to tout greentech companies, so that suckers can buy the shares while he and Doerr/Khosla sell, for billions in profit.
I also see your deafening silence on the point that he charges $300K per speech to spread the global warming hoax.
“Basically, I don’t understand the demonization you feel is necessary for Al Gore. ”
Demonization? I have already said in this thread that he is admirable entrepreneur, and smarter than other defeated Dems like Carter, Mondale, Dukakis, and Kerry. You may want to improve your reading comprehension skills.
I do, however, condemn those who think 100% of energy technology is encompassed within Al Gore’s campaign of personal enrichment. THere is no greentech outside of Al Gore’s definition of such. Thus, I feel disdain for the cultish dupes who buy into such a hoax. For you, it is impossible to conceive that someone can value energy technology while also correctly identifying Al Gore as a costly and dangerous distraction from this goal.
China emits more GH gases than the US. The US is not the highest per capita either (Canada and Norway are). This ‘inconvenient truth’ exposes the hoax of the creepy green left.
Al Gore’s big thing is carbon credits – especially promotion of “carbon neutrality” by paying a tax to his company so it can pay Brazilians to ride bicycles, etc – after taking a small cut for “management overhead”. If they’re done right, carbon credits may actually be useful, but where they’ve been tried on a large scale in Europe, they’ve been a massive boondoggle and corporate welfare scheme.
Also, carbon credits let gazillionaires pretend to be “green” while flying private jets and moving about with their entourages in caravans of Suburbans. They just kick some cash in Al Gore’s direction and they’re officially “offset”!
Al, of course, offsets himself by buying how own credits.
See Catholic Church, Indulgences, Middle Ages…
Personally, I’m all for green energy, but carbon credits in their current form aren’t going to get it done.
“T Boone Pickens appears to be on board in a big way.
I could go on and on, but essentially, their might be a bubble in investment at some point but that is not rare in new and rapidly expanding industries.
Get over the Al Gore thing, it obscures you view.”
When Boone Pickens and Al Gore are on the same team, check that your wallet is still where you think it is.
Boone Pickens is an oil man who has suddenly gotten the “Peak Oil” religion. Just so happens he is building a mega wind farm in Texas and looking for various kinds of public accomodation — help with the transmission lines, perhaps favorable tax or regulatory treatment of what he is doing, and so on.
Wind power. Now that is an unserious answer to whatever energy question you want to ask. Back in the day, I thought the power companies were all a bunch of crabby geezers complaining about the variability of wind power. It stops blowing over here, but it starts blowing over there, and you have an electric power grid to move power around, and it all averages out. Application of the Law of Large Numbers, that the combined influence of a large number of random factors becomes predictable if there are enough of them.
Thing is, we are already getting empirical data from the European experience on wind power. The random factors in the Law of Large Numbers need to be uncorrelated. Turns out that the winds can go calm over continental land masses. For weeks at a time.
The Inconvenient Truth is that building a wind generator adds not one kilowatt to electric generation capacity. Each kilowatt of wind power needs a kilowatt of backup, most likely fossil fuel backup.
The second Inconvenient Truth is that wind power will never amount to enough to avert Global Warming. What wind power can do is subsitute for the fuel you would be burning in a fossil plant by switching off the fossil plant when the wind is blowing. But the substitution you can economically get is low.
Lets say you have 2000 megawatts of Boone Pickens’ mega wind farm matched to 2000 megawatts of fossil power plant capacity. That 2000 megawatts from the Pickens wind farm is the rated capacity under the most favorable wind conditions. When the wind blows less, you get less power; when the wind blow more, you might need to stop extracting power by feathering the blades and stopping them from turning so your wind generator does not self destruct. On average, you might get 30 percent of 2000 megawatts of power out of the wind farm. In the European experience, you might get much less on average, maybe as low as 15 percent.
So if you build wind farms to match the rating of your fossil plants, you are abating 15-30 percent of the fuel you are burning. That level of savings in CO2 emissions is just not going to avert Global Warming if you listen to Al Gore, the IPCC, and everyone else sounding the warning. So do you build wind farms with rated power well in excess of the average electrical demand? What do you do with the excess power? What does this do to the economics of wind power?
GK [#33],
You are correct that Al Gore charges a lot for his speeches. A quick Google search didn’t find anything at the $300K level, but there are certainly several in the 100K-200K level. I wasn’t aware he making quite so much.
I guess he’s almost making enough to carry the bags for that hedge fund manager in New York who got over $1B (that’s Billion) as his bonus for 2007.
But still, it’s a free country (sort of), and people are paying that money voluntarily. Why shouldn’t they pay it if they are willing, and why shouldn’t he charge it, if he can get them to pay it, and it still helps him get his message out.
Would it convince you more if he were Gandhi and Mother Theresa rolled into one? I seriously doubt it.
You have been repeatedly asked to back up some of your claims, but [#33] seems to be mostly name-calling. There is one small set of new facts there:
bq. _China emits more GH gases than the US. The US is not the highest per capita either (Canada and Norway are). This ‘inconvenient truth’ exposes the hoax of the creepy green left._
Exactly how does this “expose the hoax”? Everybody knows that China emits a lot of greenhouse gases, and controlling it will be a problem. But the US can’t lead if it isn’t willing to participate. If there is a problem with global warming, and if we want to ask the other countries to sacrifice, we have to show that we are willing to do it too. Not that we will only sacrifice after everyone else has sacrificed first.
Your primary claim, however, is that the whole global warming phenomenon is a hoax, but you haven’t provided any argument at all for that, aside from calling names.
“Your primary claim, however, is that the whole global warming phenomenon is a hoax”
First and foremost, I think that artificial GW cannot be proven or disproven.
If you dispute this by claiming that you know something about it, I simply counter by stating that in the Roman Era, wine was grown in Britain, which presentely is far too cold for grapes (which now grow in Southern France, Italy, and Spain). British vinyards 2000 years ago are well documented.
So the earth was warmer than than it is now.
“I guess he’s almost making enough to carry the bags for that hedge fund manager in New York who got over $1B (that’s Billion) as his bonus for 2007.”
What does that have to do with anything?
“Why shouldn’t they pay it if they are willing, and why shouldn’t he charge it, if he can get them to pay it, ”
Again, it is not Gore I have a problem with in this regard, but rather the idiots who deify him, happily believing the hoax. I personally intend to profit handsomely from his greentech pump and dump, while the Gore worshippers will be the ones who lost money to Gore. There is a leftie sucker born every minute.
“Would it convince you more if he were Gandhi and Mother Theresa rolled into one? ”
Again, believing that Gore is god. 100% of energy technology has to be contained within Al Gore’s holy texts and films. His hold over you is truly L. Ron Hubbard-like.
Again, I state that Al Gore is a costly distraction from real energy technologies of impact. To you, it is incomprehensible that someone can be both pro-energytech while also finding Al Gore (or rather his worshippers) to be a negative distraction in the whole thing.
_It’s Armageddon!!! The financial markets are crumbling! It will be Great Depression 2, only 10 times as worse! You can still save us, just sign here, here, and initial here. 

Read it?
Debate it?!?!?
THERE’S NO TIME!!! “We’re all gonna lose money & we’re all gonna die!!!”:http://www.nytimes.com/2008/09/20/washington/19cnd-cong.html

-bruiser @ Calculated Risk_
Shades of the unread, hurried-through-at-the-last-moment Patriot Act that made such wonderful confetti of the Constitution. This one is going to be different folks since it entails the greatest wealth transfer in our nation’s history, all in one fell swoop. Perhaps a trillion or more of toxic debt dumped on the US taxpayer.
I thought this quote in the above linked NY Times article was precious:
“…Democrats said they intended to consider measures to help stem home foreclosures and *stabilize real estate values* â€
Stabilize that is real estate values at bubble-inflated prices. Now could someone please tell me how this helps “homeowners†stay in over valued homes in which they are upside down now and forevermore [forever unless they wise up and send the bank some jingle mail]? “Stabilizing†real estate values of course means that the government (read: taxpayer) guarantees mortgage lenders an escape hatch when the “homeowner†inevitably defaults–leaving the hapless taxpayer holding the bag. “Free market†capitalism at its best: privatize the gain, socialize the cost. Gotta love it.
GK [#37],
bq. _Again, believing that Gore is god. 100% of energy technology has to be contained within Al Gore’s holy texts and films. His hold over you is truly L. Ron Hubbard-like.
Again, I state that Al Gore is a costly distraction from real energy technologies of impact. To you, it is incomprehensible that someone can be both pro-energytech while also finding Al Gore (or rather his worshippers) to be a negative distraction in the whole thing._
You seem to be drawing some pretty deep and intimate conclusions about what must be going on within my mind, from some pretty thin evidence.
I can certainly see that Al Gore is a costly distraction _to you_. The way to fight a distraction is to ignore it. Why don’t you tell us about “real energy technologies of impact” that you’ve evidently written a lot on [#27], rather than continuing to fulminate about Al Gore and his presumed acolytes.
What’s going on with these links NM? “Let’s try again”:http://www.nytimes.com/2008/09/20/washington/19cnd-cong.html
It would seem to me that people who truly believe that we must unite to fight anthro-warming would be very concerned that Al Gore is doing the opposite – promoting political division, insulting everybody in the scientific community who disagrees with him, and discrediting real science with hysterical exaggerations.
Of course, if the real objective is to create more division, insult more people, and spread more hysteria, by all means carry on and please excuse the interruption.
Right, GK, you’re not demonizing him, you’re just calling him a liar, a charlatan, nd comparing him to Yassir Arafat.
(“I didn’t compare him to Yassir Arafat? I just said he got the Yassir Arafat Peace Prize!” “Yeah, Don’t insult my intelligence.”)
“Al Gore is doing the opposite – promoting political division, insulting everybody in the scientific community who disagrees with him, and discrediting real science with hysterical exaggerations.”
Indeed. Al Gore is a costly distraction from the real problem. His worshipers, like Beard and Marcus Vitruvius are examples of those who think one cannot be pro-technology without believing 100% of Al Gore’s hoax.
“Right, GK, you’re not demonizing him, you’re just calling him a liar, a charlatan, nd comparing him to Yassir Arafat.”
He did win the ‘Peace’ Prize, didn’t he. The prize is reserved for the likes of Arafat.
You still are merely proving my point, that you cannot comprehend the possibility that one can be pro-technology while still rejecting Gore and his mindless worshippers.
You didn’t rebut any other points of mine, which means you are stumped. You have also conceded that GW is a hoax due to the Roman Era evidence I provided.
In case anyone would like to check GK’s conclusions, here is the list of “Nobel Peace Prize recipients”:http://nobelprizes.com/nobel/peace/.
GK is also very fond of drawing hefty conclusions from a lack of response:
bq. “you cannot comprehend . . .”
bq. “You didn’t rebut . . . ”
bq. “You have also conceded . . .”
I try to avoid drawing _ad hominem_ conclusions, here or elsewhere, but GK is talking me into a special exception, just for him.
“In case anyone would like to check GK’s conclusions, here is the list of Nobel Peace Prize recipients.”
Yes, Yassir Arafat is a recipient. Other tacit approvers of genocide like Kofi Annan and Jimmy Carter are also included.
Beard :
“”you cannot comprehend . . .”
“You didn’t rebut . . . ”
“You have also conceded . . .”
Indeed. You provide me with many instance to point out your inability to back up flimsy claims. I didn’t think you would proudly advertise your own shambolic performance in the argument, however.