Archive for November, 2009

Shale gas – article yanked and editor fired

November 30, 2009 1 comment

from          Lewis L. Smith

Natural gas can be extracted from a kind of low-porosity rock known as shale. Indeed shale gas is already making a substantial contribution to the US gas supply. Moreover, some very optimistic estimates have been made about the quantity which could be produced in the future, without giving any thought to the  availability of the water required to fracture this rock and release commercial quantities of gas from newly discovered reservoirs.

Indeed some people are even looking to shale gas to “save” the USA from the impact of the coming peak in world crude-oil production. In the meantime, stock in shale-gas producers is being touted to investors as “the greatest thing since sliced bread”.

However, Read more…

Banking on Heaven

November 29, 2009 1 comment

Banking on Heaven: economics as confessional

 Jamie Morgan

‘I should like,’ said young Jolyon, ‘to lecture on it: “Properties and quality of a Forsyte. This little animal, disturbed by the ridicule of his own sort, is unaffected in his motions by the laughter of strange creatures (you or I). Hereditarily disposed to myopia, he recognises only the persons and habitats of his own species, amongst which he passes an existence of competitive tranquillity.”’ John Galsworthy, The Forsyte Saga.

The recent comment in the Sunday Times (8/11/09) by the Goldman Sachs CEO, Lloyd Blankfein, that banks serve a ‘social purpose’ and do ‘God’s work,’ was a controversial one. Reference to the Almighty in business and banking often leads to satirical exegesis. Many might respond that the liturgy of banks is public worship of quite another kind than might be ascribed to a divine being. Others might suggest that Read more…

Oil prices

November 28, 2009 Leave a comment

In the markets for physical petroleum liquids, there is unprecedented speculation in favor of an oil-price increase. The speculative volume is the highest in ten years and the dollar amount involved is the highest ever. Moreover, the speculation involves both crude oil and products, especially  “middle distillates” such as diesel, an important fuel for construction, manufacturing and land transportation.  Read more…

Political documents vs. scientific ones – #2

November 26, 2009 Leave a comment

Comparing the graphs tells the whole story (See Political documents vs. scientific ones). A essential point not made is that the finding, proving, delineating and bringing on line of an oil reservoir takes time, typically three to ten years. So the early stages of the search for much of the production “to be found” should be visible “in the pipeline” already. Only it isn’t, at least not for Dr. al Husseini, former head of exploration and production for Saudi Aramco. As he says, “there aren’t enough projects”, and a lot of us agree with him. Read more…

Is Development Back in the Doha Round? New Policy Brief Questions New-Found “Gains from Trade”

Is Development Back in the Doha Round?
New Policy Brief Questions New-Found “Gains from Trade”

As trade ministers prepare to assemble November 30 in Geneva for further WTO talks, they are hearing another round of new and refurbished projections of how much wealthier the world might be after liberalizing trade.  The upcoming ministerial is no different, and neither, fundamentally, are the projections, notwithstanding one recent claim – cited by WTO director Pascal Lamy – that an ambitious Doha deal could deliver $300-$700 billion in global welfare gains, with the benefits “well-balanced” between developed and developing countries. Read more…

Student protests against the effects of the economic collapse are spreading

November 25, 2009 3 comments

A wave of student protests, reminiscent of the 1960s, has swept across California’s university system.  Students have wagged, teach-ins, class walkouts, rallies, demonstrations and sit-ins after the state government announced Read more…

Reviews of Paul Davidson’s new book

November 24, 2009 Leave a comment

Here are some review comments on Paul Davidson’s new book The Keynes Solution: The Path to Global Economic Prosperity [only $15 from Amazon US]. The first is from The New York Times.

“A true believer, Mr. Davidson lays out Keynesianism in easy-to-understand language and makes a strong case that it is just as relevant today. There are some doubters who fear that Keynesian spending is dangerous because it produces unbalanced budgets. Mr. Davidson responds that deficits in times of crisis lead to prosperity when the economy recovers. The most tantalizing part, however, is the appendix, entitled “Why Keynes’s Ideas Were Never Taught in American Universities.” Mr. Davidson writes Read more…

Frank Ackerman considers “The Economic Case for Slashing Carbon Emissions”

November 24, 2009 1 comment

In a recent article for Yale’s Environment 360, the frequent RWER contributor Frank Ackerman tells how leading climate scientists have come to realize that the current international policy goal of keeping the atmospheric concentration of CO2 below 450 parts per million puts us on course for an ice-free Earth and thereby a catastrophic rise in sea levels.  To avoid this, atmospheric concentrations of CO2 must be reduced to 350 ppm by the end of this century.   Ackerman’s article looks at what the economic costs will be.  He writes: Read more…

Are they predicting a V or a W?

November 19, 2009 3 comments

Over the past six months we hare repeatedly reminded ourselves, as well as non-economists, that although recessions/depressions are usually V-shaped, sometimes they are W-shaped (double-dipped). Time has now come for high-profile economists to give us their predictions as to the shape of the one we are living through.

Yesterday Read more…

US, China Fiddle as Finance and Climate Melt

November 14, 2009 1 comment

Barack Obama makes his first trip to China in the middle of a global financial crisis and just weeks before world leaders meet to try to strike a global climate change deal. Leadership from the US and China is imperative to solving these crises. But rather than tackle them, the two countries are mired in a good old-fashioned trade war and plan to use Obama’s historic visit to negotiate an investment deal that could set the stage for more trade disputes in the decades to come.   Read more…

Political documents vs. scientific ones

November 13, 2009 5 comments

Tuesday the International Energy Agency released its annual “World Energy Outlook” report, in which it forecast that by 2030 world oil production would increase from the current 85 million barrels per day to 105.  But yesterday the Global Energy unit at Uppsala University in Sweden issued a report “The Peak of the Oil Age” which claims oil production is more likely to be 75 million barrels a day by 2030.  The diagrams below, from the Guardian, illustrate the radical difference between these two views of our next twenty years.   Read more…

Kevin P. Gallagher and Ha-Joon Chang

November 12, 2009 1 comment

Stagnationist roots of the current crisis

November 11, 2009 1 comment

Stagnationist roots of the current crisis

Grazia Ietto-Gillies

If a Martian had visited Earth in the last 20 years she would have been pretty puzzled to see a planet where lack of food and infrastructure was endemic in many countries; where even the rich countries had many people in poverty; where there are inadequate levels of basic infrastructures and public services and yet where many resources – including many bright people – were allocated to producing strange financial products that nobody could possibly want and very few people understood among the Earthlings let alone the Martians. Moreover, the people involved in these useless and socially dangerous products were the very ones that were gaining the highest rewards. How had that come about?   Read more…

Reducing unemployment via job sharing

November 11, 2009 Leave a comment

from Grazia Ietto-Gillies   

I agree entirely with the arguments by Dean Baker on job sharing (Nov 3d). The economic advantages of reducing unemployment via job sharing are overwhelming. Government expenditure could be used to keep people in work rather than out of work. In the medium to long term this would also lead to fewer social problems (crime rates; health problems) and thus to lower expenditure to meet those problems. It would be an excellent scheme also for Britain.

However, I fear that politically it may be unacceptable. The anglo-saxon model of capitalism has been for too long based on shifting costs and flexibility to the labour market and the workers for such a scheme to be accepted. Employers and the politicians of the right and centre-right may fear that, once a shorter week is introduced as a remedy for the recession, the employees may get used to it and demand it permanently.

However, we should continue to press for it and insist that economic sense should prevail.

Grazia Ietto-Gillies

The Job Loss from Reducing Greenhouse Gas Emissions and the Job Loss from Defense Spending

November 10, 2009 2 comments

There is a major national ad campaign, funded by the oil industry and other usual suspects, to convince the public that measures to reduce greenhouse gas emissions (GHG) and slow global warming will result in massive job loss. This ad campaign warns of slower growth and the loss of hundreds of thousands of jobs, possibly even millions of jobs, if some variation of the current proposals being debated by Congress get passed into law.   Read more…

Censorship of Critique of Emissions Trading and Carbon-Offsets Schemes

November 7, 2009 6 comments

As the Copenhagen Climate Summit Approaches, heterodox economic analysis of climate change policies needs a bigger profile. The good news is that Edward Elgar Publishing is shortly to release Keynesian and Ecological Economics: Confronting Environmental Issues edited by Ric Holt, Steve Pressman and Clive Spash. The bad news, however, is that, as things currently stand, New Political Economy won’t be publishing an important paper in this area by Clive Spash, that the journal had accepted following normal refereeing processes. The paper is entitled ‘The Brave New World of Carbon Trading’, but Clive’s employer, Australia’s Commonwealth Scientific Industrial Research Organisation (CSIRO) wrote to New Political Economy demanding that it not be published.   Read more…

A question regarding comparability of unemployment rates

November 6, 2009 2 comments

The just announced 10.2% current unemployment rate for the US is one of six unemployment rates, known as U1 – U6, that the US Bureau of Labor Statistics computes.  Today’s 10.2% figure is the U-3 rate – the one that the media almost always uses but never specifies.  U-4 includes, in addition to persons unemployed and currently actively looking for a job, persons who have given a job-market related reason for not currently looking for a job.  U-5 counts, in addition to those included in U-3, persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past.  U-6 includes U-5 persons plus those employed part time who want and are available for full-time work but have had to settle for a part-time schedule.  

At any point in time large differences exist between these rates.  For example, today’s announced unemployment rates for October 2009, in addition to U-3, are U-4 = 10.7%, U-5 = 11.6% and U-6 = 17.5%.  My question is: when we are told that at some point in the Great Depression the unemployment rate was x%, which of the four unemployment concepts that I have described is the most comparable?

Stimulus and Jobs: We Can Do Better

November 3, 2009 13 comments

The Obama administration came out with its first set of numbers on the jobs impact of its stimulus package. It’s pretty much along the lines of what was predicted. To date, the package has created close to one million jobs. That is good news, but in an economy with more than 15 million unemployed workers, it is not nearly good enough. We need to do more, much more.   Read more…

Happy Anniversary Wall Street

November 1, 2009 7 comments

If I was asked to nominate the wisest aphorism of all time, Mark Twain’s “History doesn’t repeat, but it sure does rhyme” would definitely be one of my top two candidates.

On song, today Wall Street is replaying the 1930s, but to a slightly different meter. With the 80th anniversary of  the Great Crash of 1929 falling on October 29th of this year, Wall Street is celebrating in characteristic style–with a euphoria-led bubble that now appears to be crashing up against economic reality. Read more…