February 2009

More #uksnow

Pics taken not long ago...

Worcester cathedral through the snow:

White stuff settling in the street:

(click on pics to enlarge)

Photos Copyright © 2009 Phil Randal

#uksnow

@benmarsh has done a wonderful Google Maps overlay of the #uksnow snow reports.

Fabulous!

Twitter at its best.

Climate Wars

Excellent CBC radio three-parter:

Global warming is moving much more quickly than scientists thought it would. Even if the biggest current and prospective emitters - the United States, China and India - were to slam on the brakes today, the earth would continue to heat up for decades. At best, we may be able to slow things down and deal with the consequences, without social and political breakdown. Gwynne Dyer examines several radical short- and medium-term measures now being considered—all of them controversial

Part 1 (mp3 file: runs 55:14)

Part 2 (mp3 file: runs 54:17)

Part 3 (mp3 file: runs 55:04)

Get them quick, they're archived for 4 weeks only, which means part 1 will soon vanish.

Scrap the Government

It's time to trade in our tired, over 9-year-old government for a new model. Do you think Mandy will give us a cash incentive?

Reuters reports today that Mandy's great car scrapping scheme may not work (does anything that Gordo's gang does work?).

The government is studying car scrapping schemes introduced in other European countries to boost demand for new models, but is not certain they would work, a spokesman for Prime Minister Gordon Brown said on Friday.

German dealers have reported an upturn in business after the government announced plans to issue certificates worth 2,500 euros (2,180 pound) for all new car buyers who scrap vehicles that are at least nine years old.

Business Secretary Peter Mandelson said in a speech on Thursday night that he was studying the initiative as he tries to revive Britain's struggling car industry.

"We have said scrapping schemes are an interesting idea," Brown's spokesman said. "But we are not convinced how a scrappage scheme would provide a stimulus for demand."

New car sales in Britain fell by almost a third year-on-year in January to register their worst performance for that month since 1974, according to figures from industry body the Society of Motor Manufacturers and Traders (SMMT).

The SMMT urged the government to adopt car scrapping schemes similar to those in Germany and other European countries.

The government last week pledged to guarantee up to 2.3 billion pounds of car loans to help the car industry to battle a slump in demand that has cost thousands of jobs.

It is also discussing measures with the banks to boost the flow of credit to the finance arms of the car sector.

Insanity.

Postscript

Karl Denninger reminds us today that we already use creative financing to prematurely obsolete cars:

It didn't take long before people realized that credit could be used to finance consumption too.  That is, your desire to own a car can be realized through the provision of credit.  But this credit doesn't self-liquidate; the car is consumed as you drive it, and when you're done with the car its value is greatly diminished instead of remaining constant or being enhanced.  This sort of credit effectively "pulls forward" demand - that is, it allows one to play "Wimpy" and have a hamburger today for which one will pay next Tuesday.

When this sort of financing becomes embedded in an economy there is a very real risk that it will expand almost without limit, based only on the optimism of the people involved.  This in turn will create distortions in supply that are irrational and cannot be "worked off" with short layoffs and labor cutbacks.

Automobile demand is a good example.  The last few years we've built 14 million cars a year.  But our inherent demand to replace destroyed cars (rusted away, crashed, etc) is only 11 million or so.  The other three million were "pulled forward" with creative financing - for a while.

We employed hundreds of thousands of people building cars that cannot be sold on a permanent basis.  That's a problem.

"Economists are Guilty"

"Academics - and their mad theories - are to blame for the financial crisis. They too deserve to be hauled into the dock", wrote Anatole Kaletsky in yesterday's Times. Thank's to Steve Keen's Debtwatch for drawing our attention.

It's worth a read, but neither Keen nor Kaletsky get the real picture.

The failing of "Classical Economics" is that it completely ignores the laws of physics and ecology.

It is a house built on the sands of political ideology.

The way out of this mess has to be based on an understanding of fundamental physical and biological principles.

As Garrett Hardin says, we need to abandon our fossil-fueled drunken brawl.

Recommended reading:

Wikipedia's write-up on Thermoeconomics.

Nicholas Georgescu-Roegen's ground-breaking "The Entropy Law and the Economic Process" (1971). Heavy-going but important.

Georgescu-Roegen's 1975 essay "Energy and Economic Myths". A fabulous demolition of both the cornucopians and steady-state economy advocates. He has a way with words which puts most native writers of the English language to shame.

And of course, the Club of Rome's "The Limits to Growth". Classic. Best read in original edition, and best read in 1972, lest we waste 37+ years pursuing the impossible. Oh, hang on....

LOL

Life imitates the net. Someone defaced the pristine snow on my car this morning.

(click on pic to enlarge)

Photo copyright © 2009 Phil Randal