Thursday, January 28, 2010

No Nukes is Good Nukes

There’s a big push lately to revive the corpse of nuclear power, especially using global warming as an rationale since no CO2 is emitted in the production of electricity. There are lots of reasons why that is a terrible mistake.

While it’s true that no CO2 is produced at the end of the cycle, a tremendous amount is emitted in the construction of the plants; they are massive edifices. Containment vessels are typically one foot – 30cm - of steel surrounded by 12 feet of concrete. Copious amounts of energy are used in the construction of cooling towers.

The mining and refining of uranium also requires large amounts of energy and is toxic to miners and everybody involved in the process. It’s also a non-renewable resource. A large increase in uranium extraction will see it depleted in a couple of decades.

No country in world has yet created a permanent facility for the disposal of radioactive waste. The huge cost of locating and constructing permanent waste repositories is not included as part of plant cost. A US repository is twenty years behind schedule even after tens of billions of dollars expended in the search. And assuming one is built, who will pay the cost of maintaining those facilities thousands of years in the future?

Most waste is stored in temporary cooling ponds at the plants themselves. Temporary in this case can also be thought of as not very secure and therefore a great target for terrorists.

One simple reason why no nuclear plant has been ordered in the US since 1973 is that no investor in their right mind would ever commit a dollar of their own money for a nuclear project. The only way any new plant can be built is if loans are 100% guaranteed by the government; Congress is now trying to slip in $50 billion in such guarantees. One problem for investors is the extreme length of time it takes to bring one on line; in the states about 10 years. Since they now cost about $10 billion to construct, it would take some really deep pockets to invest billions now without a return for a decade.

And how is it that Congress is so quick to subsidize nukes and fossil fuels but can never commit more than a pittance for renewables? In the pockets of industry maybe? Money invested in wind power brings a return in a year or two. Except for those few people who are offended by the presence of windmills marring their scenic views and those living in close proximity who are bothered by the low hum they emit, windmills are totally benign. Yes the wind is intermittent, but if you have a large number of installations scattered around a large area, say the US, there will always be some producing power and evening out the load.

No plant would ever have been built in the US if Congress had not exempted nuclear plants from carrying full liability insurance coverage. No matter how much damage might be caused by a meltdown, the operators are shielded from full liability. It’s the community that pays. And don’t buy the hype that nobody died from Three Mile Island; the incidence of cancers in that area is far above the norm.

We hear how France, which gets 80% of its power from nukes has a cookie-cutter, boiler-plate design which is cheap and speedily constructed. Finland bought that line and ordered one which is now years behind schedule and double over budget.

In my mind the most frightening aspect of the nuclear push is where new plants are being built; in countries like India, China, Vietnam. These are third world countries that haven’t begun to get their social trip together.

India can’t figure out how to provide toilets for more than half of its people so even in Mumbai, the country’s financial center and richest city, you see people shitting on the sidewalk, so how’s it going to properly maintain nukes? Chinese dairies are still adulterating their milk with melamine, a toxic industrial chemical, a year after a major scandal that killed several children and sickened hundreds of thousands. Whose going to enforce safety standards in a place where environmental campaigners are considered enemies of the state? If any country produces shoddier goods than China it has to be Vietnam; how can they be trusted with an industry in which mistakes can impact the entire world?

Don’t get me wrong, all three are great countries destined to take their rightful place in the modern world; they just aren’t ready for an industrial process that involves such an inherent, fundamental danger.

Add it up, that’s the future of nuclear power… and it ain’t pretty.

Friday, January 22, 2010

Cadillac Health Plans

A central means of paying for the US Senate’s version of Obama’s health care plan is a very high tax (40%) on high-cost, so-called Cadillac Plans. The whole debate over that tax goes to the heart of the question of whether health care is a universal right, as it is in every other developed country, or a commodity, thought of the way you purchase a car.

Would you prefer a Caddy or a Chevy? The assumption is that the Caddy, in order to justify its higher cost, has a lot more in the quality and comfort department than a Chevy. The Chevy, however, will get you there just the same so the added cost is entirely in non-essentials. An old rust bucket would also get you there the same… usually, but you might sometimes have to contend with questions of reliability and safety. And some people have no wheels at all so have to get there any way they can. Ultimately, your choice will, with rare safety lapses, or the slightly greater risk of small cars, have little or no bearing on life or death.

Health care, I would think, must be different. It seems axiomatic that every government would want its citizens to be as healthy as possible and yet the excise tax on high-cost health plans could only serve to lower standards of care for large numbers of people.

The idea behind the tax, in addition to raising money, is to get employers to offer lower cost coverage. And just how might those insurance cost reductions be achieved? Doctors taking a pay cut? CEO’s offering to work for less? Stockholders asking management to make less profit so they can have lower dividends?

Probably first would be elimination of dental and eyesight coverage. Next would be increases in deductibles and co-pays. All of which would inevitably lead to a less healthy population.

If health care is a basic right then all would be treated equally – is one person’s health or life less important than another’s? – though if it’s a right and government is thereby necessarily involved, there will always be fiscal restraints. For instance, health care in the UK is absolutely free and available to all but it doesn’t always provide Cadillac quality, so if you need a hearing aid the National Health Service will provide you with a big old style one because they are cheap rather than the tiny little $5000 ones that fit nicely in your ear and are entirely unobtrusive. Seems fair to me. Everybody gets to hear; all have basic coverage. If your vanity can’t deal with big hearing aids you put out your own money for a small high-tech one.

If it’s a commodity then some, who have the wherewithal, will be healthier than others who can’t pony up in the extremely high cost American system. That includes the many who do have insurance but their income is so low and it’s such poor quality coverage that high deductibles keep them from going to the doctor, or they can’t pay for adequate medicine in the one country where drugs are most expensive. Others will have coverage with co-pays that are so high they are forced into bankruptcy even with insurance. The majority of people who file for bankruptcy for medical reasons actually had insurance.

The Senate plan seeks to lower the quality of health care for large numbers of Americans, a counterproductive program if there ever was one. But par for the course for a government owned by industry.

On a related note Democrat Martha Coakley managed to lose an election to fill the late Ted Kennedy’s seat in Massachusetts, one of the most liberal states in the country. It wasn’t easy; she had to be so overconfident that she barely campaigned. The national Democratic Party helped by ignoring her pleas for money. It was, however, easy for the Republican to raise money all over the country to try to make a point of defeating her.

The real culprit though is probably the enthusiasm gap between Republicans and Democrats. When asked if they were certain or very likely to vote 80% of Republicans said yes, 65% of independents replied in the affirmative, but barely more than half of Democrats did. Obama is reportedly angry about the outcome, as well he should, but he has only himself to blame. At least he’s starting to show some emotion; it’d be good if he could get himself fired up about something.

I’m personally glad it happened, now there’s no need to compromise everything good out of the health care bill, or any legislation, just to get a few right wing Dumbs on board to reach the magic sixty vote number. The Repugs have made it clear they have no intention of voting for anything put forward by the Dumbs no matter how reasonable or even conservative it might be. No matter how much Obama coddles the banks, insurance companies or other corporate darlings of the Repugs, he’ll never get a single vote out of the opposition.

So very simple, you throw away the garbage bill voted by the Senate and the better, but still not very good one moving through the House and put forward a Medicare-for-all bill. Everyone in, nobody out. Even right wing morons like their Medicare (for many, because they don’t know it’s actually run by the government otherwise they’d hate it) so let’s throwaway uninspiring words like single-payer and public option and just say MEDICARE. It is liked by seniors and most Americans have a good impression of it.

Even using those dullish words, in every poll I’ve seen a majority of Americans - almost always over 60% - were in favor, so using the word Medicare could only enhance those numbers. It’s not a radical idea, it’s mainstream. It’s what the people want, it’s what they voted for in the last election.

The Dumbs are so steeped in cowardice every time the Repugs only mention the word filibuster, they cave. Majority leader Harry Reid won’t even bother with bringing up legislation if he doesn’t already have 60 votes in his pocket. Well, why not bring it up and let the Repugs actually filibuster, you know, try to talk the bill to death? Let them spend endless hours telling the American people why Medicare-for-all is such a terrible idea. If they managed to defeat the bill, it’d be their downfall in the next election. To repeat, it’s not a radical leftwing idea, it’s what the people have repeatedly said they want.

There’s also a procedure in the Senate for measures that involve the budget called reconciliation which only requires 51 votes for a bill to pass. All the talk about bipartisanship is worthless tripe. You are elected by the majority, you know what they want (and surely remember what you campaigned on) so fight for it. It doesn’t matter if it doesn’t pass the first time, at least the electorate know where you stand when it comes to the next election. Ah, but easy for me to say; the Dumbs, unfortunately, can’t disappoint the fat cats who financed their campaigns; without the bankster money, the pharma cash, where would they be?

I keep hoping that Obama will receive an epiphany, that he’ll suddenly realize how stupid he’s been and start to think of the people first and finally that he should stand for something. He’s such a decent, likeable guy, something is bound to click, to turn him around, to finally point him in the direction he promised to take the country.

I’ve been turned off to the Democratic Party for so long, I harbor only the slightest glimmer of hope that they will do the right thing. But miracles do happen.

Wednesday, January 20, 2010

China Restricts Exports of Rare Earth Elements

A fascinating article appeared recently on my favorite web news site,, that was reprinted from the Independent newspaper in the UK. The article detailed China’s near monopoly on the production of rare earth elements.

Ever hear of neodymium, cerium, lanthanum, terbium, dysprosium? They are among 17 elements referred to as rare earths, which are not only hard to find, as their name implies, but they have unique qualities that are essential to many high-tech and alternate energy products, including cell phones, low energy light bulbs, windmills and advanced electric motors. Their use is expanding rapidly. The Toyota Prius, for instance, uses 16kgs of rare earths.

The gist of the article is that 97% of the world’s supply of rare earth ores are produced in China, almost all, in fact, at a single mine in Inner Mongolia province, and that China is beginning to restrict the export of that production to insure that its own industries have the metals they need. Manufacturers are scouring the planet to find alternate sources of raw materials for products that are the growth nexus of the future.

One of the dumbest things Thomas Friedman, New York Times columnist ever said was in conjunction with a Chinese company’s bid to purchase an American oil company. He commented that it wasn’t important who owned the company because it was part of a world market so the oil would go to whoever was willing to pay for it.

He was unfortunately blinded by his immersion in American corporate philosophy. Multinational corporations may have their headquarters in the US but they operate everywhere, in vicious totalitarian regimes as well as democracies, and have no allegiance or loyalty to anywhere. A multinational would never voluntarily set aside a product for its home market that was in high demand out of a sense of patriotism or concern for workers or local economies. The only thing that matters in the ethos of a corporation is the bottom line.

China has a much different take on the matter and is smart enough to know that its industries will have a great advantage with access to those metals. Export restrictions only come about because of shortages and that inevitably leads to price differentials; in other words, those metals will always be cheaper in China than outside. China will also have more of the value added jobs of processing the ore inside the country.

With world demand for rare earths set to spike with the move to alternate technologies a serious crunch is in the offing, with China holding nearly all the cards.

Friday, January 1, 2010

China on a Roll

China’s been in the news lately, very little of it benign or promising.

One story of note has to do with illegal logging in Russia’s far east that is being organized by Chinese and fueled by Chinese demand for hardwoods. Century old Oaks and Ashes are being felled to produce flooring and furniture mostly for western markets.

The Chinese, not surprisingly, are good at capitalism and generally don’t call on many scruples in their dealings in the commercial world. They aren’t the world’s only buyers that encourage illegal loggers and hardly the only crooked capitalists vying for filthy lucre, but the same economic philosophy, based on the mania for short term gain, that has driven Western capitalists to produce in Communist China, has given China free reign to exploit its advantage in any way it can.

Enforcement of environmental rules is bad enough in America but the one party state and its fostering of corruption makes its environmental record far worse. Since no demonstrating or protesting or any sort of challenge to the state is allowed, individuals seeking redress for tainted food, as in the melamine scandal, or answers as to why so many schools crumbled in the Sichuan earthquake, are targeted and harassed as enemies of the state.

However, as long as Western consumers get their hardwood products cheaply then there are no complaints from capitalist democracies. If Chinese industry gains a cost advantage by absence of environmental rules then it’s the problem of the Chinese people who suffer from the pollution, not Mall-Wart’s customers. Of course, it isn’t only their problem: environmental degradation anywhere affects everyone, but in the mind of the capitalist; out of sight, out of mind… and, if you can save money by trashing the environment, then you do it until you get caught and then use your high-powered lawyers to try to avoid responsibility.

A second event is the recent prison sentence of 11 years to a prominent dissident for advocating freedom of expression, human rights and democracy. Trade and capitalism automatically brings an open society and democracy, or so we’ve been endlessly told. Obviously, demonstrably there’s no inherent connection between the two.

While China still likes to characterize its system as socialism, it’s really much more akin to fascism or state socialism. It’s economy is designed to benefit its rulers and upper classes. This is perfectly illustrated by the great gulf between the urban and rural in society.

In China you only have citizen rights where you are registered. If you move across a boundary line, even if it’s just a kilometer, you cannot send your kids to school or receive any benefits of citizenship unless you are willing and able to pay a substantial bribe. Even back in the mid-nineties it cost $3000 to purchase citizenship in Kunming where I lived. I thought back then that the registration system was an anachronism, a throwback to the time when Chinese weren’t allowed to leave their home districts without official permission. I’m almost shocked that it’s still around, or would be if I had any faith in the country’s leadership. It’s a convenient way to exploit the peasantry for the benefit of the better classes, so they are clinging to it.

In the Chinese countryside there are near desperate conditions for hundreds of millions of people. There are few jobs and the land cannot support the number of people who live there. (China, with 22% of the world’s people has only 7% of its arable land.) The only option for many is to leave their families behind and seek work in the cities, mostly the booming cities of the East Coast. As a result, there are an estimated 150 million migrant laborers in China. When they do find work they may also find themselves mercilessly exploited. Construction workers, for example, often do not get paid until the project is finished. No Chinese workers have rights, but the migrants are especially looked down upon.

Last year there were a reported 80,000 ‘mass incidents’ - what we would call demonstrations or protests – in the Chinese countryside, some which turned violent. All demonstrating is harshly repressed but rural people know they are getting the shaft and have reached the boiling point. They pay heavy taxes and suffer corrupt officialdom. Until recently they had to pay school fees that were prohibitive for many. Now, with more than $2 trillion dollars of foreign currency in the bank, the country’s rulers are just starting to consider the needs of the rural poor.

Recent events in Thailand provide a possible indicator of what democracy would mean for China. Taksin Shinawatra, Thailand’s richest person and former prime minister, was elected on a populist platform. His government was the first ever to give a damn about the poor. He provided, for example, nearly free health care for everybody and allocated money to the village level for civic improvement. He was hounded out of office by the Bangkok elite but he’d win an election today in a snap because developing countries have disproportionate numbers of subsistence farmers and lower classes in general.

By virtue of having 800 million rural poor, China is still a developing country in spite of its emerging power. In a democracy their numbers would easily counterbalance the country’s 500 million urbanites.

India has largely neglected its poor in spite of being a democracy, but recently a more populist government established a program which guarantees subsistence farmers 100 days of work a year. I’m sure it makes a world of difference for those people to have steady incomes; and unsurprisingly, they are sure to have a strong loyalty to that party for a long time, even if it means supporting a leader who is fundamentally corrupt. And Thailand’s Taksin is a case in point: just before he sold his $2 billion telecommunications company he had the Thai legislature exempt the sale from taxes. Being the richest person in the country was not enough.

It’s hard to say definitively what a Chinese democracy would look like but it’s certain the peasantry would have substantial power and at least some of the money going to fantastically expensive projects like the Olympics and high-speed rail would be redirected to the countryside. Eighty thousand demonstrations in a country that doesn’t allow demonstrating is an indicator of extreme distress and anger. It’s axiomatic that the longer you wait to provide relief from the pressure the greater the explosion when it happens.

Chinese leaders have said that democracy won’t come to China for 100 years. At least among urbanites they have done their job well by creating a compliant population. One man recently quoted on BBC said if the government didn’t want him to know something then he didn’t care to hear about it. They know their news is censored but think the power of the state is more important than their personal freedom.

Nationalism in China is pervasive, but it won’t be able to compete with hardship or exploitation when conditions get bad enough. Time will tell.

China provides a large amount of development money to Cambodia in the form of grants and soft loans and is financing many infrastructure projects so when China pressured Cambodia to return 20 Uighur asylum seekers it almost had to comply. They came to Cambodia because it’s one of the few countries in the area that is signatory to an international treaty on refugees. They are sure to be mistreated in China.

Before the UN had sufficient time to process their refugee claims and just two days before an official Chinese visit in which a large amount of development money was pledged they were sent back. Widespread objections by international NGO’s and Western governments had no effect on the Cambodian government when balanced against a billion dollars of development money. China is not the only large country that likes to throw its diplomatic weight around but as a one party state where just a few people hold almost all the power there are no checks on that power. For sure, the country is going to be increasingly hard to handle as illustrated by the below example.

The cropper of these four news events is China’s trashing of the Copenhagen summit and its humiliation of Obama in the process. While Obama sat with world leaders trying to hammer out an agreement, inadequate and voluntary though it was, China absolutely refused to even allow the mention of any numbers that had to do with targets for CO2 reductions or a minimum temperature rise.

Chinese premier Wen Jinbow did not even deign to attend the meetings, instead sending a second tier official who had to check with his superiors on every minor question while Obama, Brown, Merkel and many other world leaders were left to cool their heels in frustration. China succeeded in having the blame for the failure of the climate talks placed on the West while it deflected any sort of restrictions on its own growth, which is largely based on coal: the country opens a new coal-fired power plant every week. It is also investing heavily in renewables but still expects to increase its CO2 emissions by 60% by 2020.

China’s new power was a gift from the West and will come back to haunt the capitalists and their democratic countries. While it’s true that, as a friend who has spent a long time in China pointed out to me in response to a previous post, the country was always destined to be a great power because of its culture and the energy and determination of its people, the wholesale transfer of industry from the West has tremendously accelerated the process.

There are quite a few developing countries that are also democracies where Western industries could’ve transferred their production but that might have meant slightly less profit and maybe more hassle dealing with authorities and workers. There’s nothing like a repressive authoritarian government to keep workers in line.

With two trillion dollars of foreign assets in the bank, about 75% in dollar assets, the US in particular and the West in general have precious little leverage with China. For America especially, it’s kowtow time to the Middle Kingdom.