Daily Archives: June 3, 2011

Paul Ryan’s Foreign Policy Lesson From Goebbels – eat Guns not Butter.

Paul Ryan has attempted to boost his foreign policy credentials by making a speech to the Alexander Hamilton Society.

His argument is both breathtaking and based on bad history.

Heres some selected extracts

…defense spending has shrunk as a share of the federal budget from about 39 percent to just under 16 percent [since 1970] – even as we conduct an ambitious global war on terrorism. The fact is, defense consumes a smaller share of the national economy today than it did throughout the Cold War

In The Weary Titan, Aaron Friedberg − one of the founders of the Hamilton Society − has shown us what happened when Britain made the wrong choice at the turn of the 20th century.

At that time, Britain’s governing class took the view that it would be better to cede leadership of the Western world to the United States. Unfortunately, the United States was not yet ready to assume the burden of leadership. The result was 40 years of Great Power rivalry and two World Wars…

A more prosperous economy enables us to afford a modernized military that is properly sized for the breadth of the challenges we face.

Putting aside for a moment the implication that a return to cold war levels of military spending is a good thing Ryan doesn’t seem cognisant with the views of historians of this period, Friedberg included.

Lets start with some facts Britains spending on the military as a % of GDP was steady in the late Victorian period up to 1914.

Source

Britain made no conscious decision to cede power. According to Freidbergs book it simply concluded that eventually the US growth would eventually mean that they would achieve naval supremacy in the Western Atlantic.

It was the cost of military spending in the first world war that began the decline of Britain as a global superpower. Precisely the opposite of Ryans thesis.

There was a crisis of confidence in the British Empire after the Boer War, the parallel with the Iraq war is a good one in some regards. But the main concern was threefold, overstretch, the inability to administer a global empire of many nations, secondly a growing demand for social welfare expenditure by a growing and newly enfranchised working class, and finally a concern that the Canada, India and Anzac both contribute more to the costs of military expenditure and make up for the shortage of population and divisions when facing the great rival Imperial Germany.

Indeed the phrase ‘Weary Titan; comes from a speech by Joesph Chamberlain in 1902 to the imperial conference – ‘The weary Titan staggers under the too vast orb of its fate. We have bourne the burden for many years. We think it is time our children assist us to support it’ Through trying to weld this alliance through his anti free trade tariff reforms he led to the crushing loss of his party in 1906.

Even the Weekly Standard has attacked his bad history.

Ryans argument is essentially the well known Guns V Butter one.

As Joseph Goebbels said “We can do without butter, but, despite all our love of peace, not without arms.’

The few countries, such as North Korea of the late Soviet union that chose guns paid a price for it in loss of economic power.

As Margert Thatcher said ‘”The Soviets put guns over butter, but we put almost everything over guns’

If Ryan really wants to gear up spending to show down china a few more billion dollar and militarily obsolete Gerald R Ford Class carriers that can easily be sunk by new weapons should do the trick.

Hes proposing the same choice Breznev made against Reagan.

Rick Santorum & Wallace – Seperated at Birth

Bahrain Grand Prix – Green Light for Repression or Reconciliation?

The FIA released the following statement today

‘Following a fact-finding mission undertaken at the request of FIA President Jean Todt, FIA Vice-President Carlos Gracia visited Bahrain on 31 May, 2011 to assess the situation in the country. Meetings were conducted with the Ministry of Interior, the Ministry of Culture and Tourism, the Bahrain Motor Federation and Bahrain International Circuit, as well as other national and international organisations including Mr. Tariq Al Saffar at the National Institute of Human Rights. It should be noted that the recent announcement by the King of Bahrain has established a political dialogue and reconciliation process.

‘After considering all the factors and taking into consideration all stakeholders’ concerns, the WMSC unanimously agreed to reinstate the Bahrain Grand Prix in the 2011 FIA Formula One World Championship.

‘This decision reflects the spirit of reconciliation in Bahrain, which is evident from the strong support the race receives from the government and all major parties in Bahrain, including the largest opposition group, all of whom endorse the F1 grand prix and motorsport in the country. ‘

According to Channel 4 News Jasim Husain a spokesman for the largest opposition group said “We at Wefaq support hosting the event. It will force all the stakeholders to come together to find solutions ahead of the event. It would bring indirect pressure on all parties; people could be released from jail in advance.”

Draw your own conclusions.

A cycle of locking people up one year and releasing them the next does not show a continuous process of reform and democratisation. The king needs to show before the Grand Prix a roadmap to democracy and the exit of its unpopular and unlected prime minister, and a move away from a rentier state model, or no-one will be fooled and this could be the last grand prix of the pearl island.

Legal use of Google maps imagery in Arcgis

Big news

It works through Arc2Earths cloud service. Frankly I cant see anyone hosting their own GIS serviers within a year or two – it will all be done through the cloud.

What about OS derived data (i.e. all local government data) on a hosted service? Confusion still rein but with the data not hosted by google but by yourself through a third party could provider it would seem to reduce the issues. See the linked discussion on Ed Parsons blog.

How Greece can avoid its downward spiral

A greek haircut by any other name.

Today a new bailout and cuts package was agreed with Greece. After weeks of posturing with the IMF threatening to pull out after previous conditions were not met, Germany wobbling at the cost, and Greece hesitant about privitisation.

Reports suggest an almost doubling of the current bailout with costs split between the IMF, EU and the proceeds of privatisation.

Banks will be called to swap their short term Greek bonds with new ones maturing 10 to 15 years later.Although this would be ‘voluntary’ to avoid the perceived problems of default they will know that if they dont a haircut will be imposed – so Greece will negotiate preferential terms and the lengthening of maturity will be a haircut in itself. This is default but negotiated in private.

Meanwhile Greek people and cash flood out , as much as the bailout costs in a year, Greeces economy furthers a downward spiral probably inducing another bailout in a few months time.

The market will impose its own solution. With Greece closed to the international debt markets the elasticity of the mouth of the IMFs wallet is vertical. If bondholders hesitate to cut their losses the markets will sniff bullshit from the ECB about the finality of any settlement and no need for defaults. Economic modelling also shows the longer default/renegotiation is delayed the more painful it will be to all concerned.

The IMF preferred solution is ‘internal devaluation’ i.e. Latvia, spending and paycuts hopeing eventually ‘Says law’ will kick in. Well Latvia eventually started to grow again, but only at the cost of losing 25% of the economy, much more than it needed to be because of fixed exchange rates. If the IMF says this is the future then Greeks have seen it and are getting themselves and their money out, so the eventual ‘bottom’ for Greece will be lower. The Greek government know this which is why there are hesitant about the scale of loss of income required – no government could sell that.

We know from history that countries have only ever recovered from such calamities through default and devaluation. Banks argue that because Greek debt is held in Euros default could cause another credit crunch. However these are non-performing assets and payments are only being made through international payments. These countries are squeezing their own people to pay. Credit is already being squeezed through loss of income from the higher government spending to pay for the bailouts. In any event with debts traded between banks and so many European banks state owned these are just transfer payments – not ‘real’ debts – they could cancel out if mutual forbearance is shown. Default will only become contagious if the scale of it causes lack of confidence and contagion. If it became predictable it would be containable.

Their are historical examples. Argentina, Russia and Khazackstan have all recovered from default and devalution crisis in the last dozen years. Argentina is still a dirty word in the IMF because they played by different rules.

If there was compulsory replacement of bonds by Greece by long terms bonds with a heavy discount rate at least it would be predictable in impact. The ECB and IMF could underwrite the long term maturity, in return for a fee paid for by Greek asset sales, effectively a debt for equity swap. These fees could be used to provide a plan b for bondholders, selling now for a much heavier discount.

This is possible without Greece leaving the Euro but would happen much more quickly and less painlessly if it did. No anti euro dogma – just pragmatism. If the long term maturity were in drachmas rather than euros the market would expect short term falls -improving recovery, followed by long term rises, increasing the yield on bonds.

The new currency would need confidence – it would need to be rock solid and stay there. If it commenced at a heavy devaluation (for which Greece might have to impose a weeks bank holiday to print the new currency and prevent cash flight) but then tracked a global export orientated basket – including the Yuan, it would gain market confidence.

National Planning Policy Framework Forensics #4 Consultation and Community Engagement

‘Participation’ appears nowhere in the draft.

‘Consultation’ only in relation to pre-application consultation on masts.

‘Engagement’ twice in relation to pre-application engagement (now to be statutory) and once in relation to preparation of local plans -‘early and meaningful engagement and collaboration’.

Despite the rhetoric about devolving power to neighbourhoods 99% of community engagement on the planning system will involves letters on planning applications and development plans – what role is this to have in the revised planning system?

It is debatable whether or not the current system on engagement works well for any concerned, for the public it seems reactive with most people only learning of controversial proposals late in the day. For developers it seems expensive and a system solely gathering to gathering objections by the skipload for proposals that in some shape or form will one day have to be approved. Their is a Laintons Law of consultation – the more you consult and reconsult the more people will hear about a proposal late in the day and the more therefore people will complain about lack of consultation. Cynic – Yes – but also a frequent Planning Aid Volunteer.

But people expect to be consulted on going day to day casework – they wont all be replaced with neighbourhood plans, not ever, not overnight.

Therefore the NPPS needs to set out minimum ground rules on consultation and the relevance of the findings of consultation as a material consideration. Without such ground rules the suspicion will be that providing minimum statutory requirements are met consultation will matter less because it is perceived as an ‘enemy of enterprise’.

Para 27 of the current general principle statement says

The members of the local planning authority are elected to represent the interests of the whole community in planning matters. When determining planning applications they must take into account planning considerations only. This can include views expressed on relevant planning matters. However, local opposition or support for a proposal is not in itself a ground for refusing or granting planning permission, unless it is founded upon valid planning reasons.

As the general principles will go it is essential that a version of this para is incorporated in the NPPS, as it is the critical issue pointed out to Cllrs on every controversial major application. Dont measure objections by their weight but by their materiality. The omission will be seen as important by many cllrs, as a reason to treat degree of opposition as material. The courts always refer to this para of JR. This could then create risk of future legal challenge, by developers if cllrs do judge by weight, and by opponents if they dont.

The Critical para 29 is also missing.

The planning system does not exist to protect the private interests of one person against the activities of another, although private interests may coincide with the public interest in some cases. It can be difficult to distinguish between public and private interests, but this may be necessary on occasion. The basic question is not whether owners and occupiers of neighbouring properties would experience financial or other loss from a particular development, but whether the proposal would unacceptably affect amenities and the existing use of land and buildings which ought to be protected in the public interest.

A large proportion of objections raise concerns of devaluation. Of course the whole point of building new houses is to devalue – that the whole intention – if not there would be no point doing it. Again we dont want the whole planning system bogged down in the courts.

It is unclear if the past governments general statement of principles on planning consultation remains extant – it has dissapeared from the Depts website where once it had prominence.

National Planning Policy Framework Forensic Analysis #3 Prudent use of Natural Resources

A few shorter ones today.

The term ‘prudent use of natural resources’ appears several times in the draft.

As a general principle, as a requirement for policies on the subject, and as justification for policy on recycling, re-use of existing buildings and on renewable energy.  There is reference to use of resources, but not prudent use, in the minerals section.

Completely lacking is the PPS1 para.17 reference to a high level of protection being given to natural resources.

Also lacking are paras 21 and 22 of PPS1 specifically on this subject.

Para 21 in particular shows an overall philosophy of resource management.

The prudent use of resources means ensuring that we use them wisely and efficiently, in a way that respects the needs of future generations. This means enabling more sustainable consumption and production and using non-renewable resources in ways that do not endanger the resource or cause serious damage or pollution. The broad aim should be to ensure that outputs are maximised whilst resources used are minimised (for example, by building housing at higher densities on previously developed land, rather than at lower densities on greenfield sites).

This is far from perfect but at least it sets out a broad philosophy.

I think it is essential that the NPPS sets out a philosophy of prudent resource management, one that minimises energy, transport and resource inputs, maximises outputs and wherever possible uses outputs as inputs in a cyclical green economy.

If the NPPS sets out such a philosophy then it will not pages reims of text as so much can be deduced from this principle – such as combined heat and power, integrating housing and energy etc. etc.

As a general principle I think the NPPS needs to be technology and methodology neutral, rather simply setting out simple principles of resource management against any proposal can be judged – including unexpected innovations in the future.

I think too we can learn from the experience of planning reform in New Zealand in terms of its attempts to integrate and simply resource management regimes. This has often been painful and bureaucratic, not easy for the planners concerned, and has had to be simplified, but it is possible I think to take the main advantage – of integrating resource management considerations into planning, and discard the baggage.

Take for example the definition of sustainable management from section 5 of the RMA 1991 which defines it as

managing the use, development and protection of natural and physical resources in a way, or at a rate which enables people and communities to provide for their social, economic, and cultural well-being and for their health and safety while-
(a) Sustaining the potential of natural and physical resources (excluding minerals) to meet the reasonably foreseeable needs of future generations; and
(b) Safeguarding the life-supporting capacity of air, water, soil, and ecosystem; and
(c) Avoiding, remedying or mitigating any adverse effects of activities on the environment

The minister had quite specifically emphasised physical constraints, ‘the biophysical bottom line’ in order to move away from the overly broad and unweighted list of socio-economic and environmental objectives in the Town and Country Planning Act it replaced. Although clause (c) was far too restrictively worded – should all adverse effects be fully mitigated?

As drafted the NPPS implies there is no biophysical bottom line – that position is not sustainable rhetorically or scientifically.

Solar Farms in Wales – A Rip off or Energy Salvation?

A Solar Farm given planning permission in Wales, would seem at first sight to make as much environmental and economic sense as Saudi Arabia using oil for desalination to export bottled water.

Over 50,000 solar panels, on 59Ha of land will only power 500 homes.

Why are we seeing a rash of solar farm applications, and not say biofuel plants? Well one reason may be that even the most efficient biofuel in the UK climate micanthus would only generate about an eigth of the output per annum for the same area of land.

The reason for the interest is the introduction of feed in tariffs(fits) of 30.7p/kwh. Apparently the minister is alarmed as fits were intended for microgneration and is conducting a review.

Will a shifted subsidy structure save money or be more energy efficient? Caer Delyn has done the math and the reported savings are illusionary.

If you are going to have feed-in tariffs at all then it makes sense to use them in installations that have economies of scale. Don’t complain about solar farmers taking the main chance in a distorted market if the purpose of market distortion is to pay the full carbon price. Lower susbisides are needed for ground mounted solar than roof mounted solar for this reason in order to reach ‘grid parity’ (the point at which subsidies are no longer needed). Farmers will always suck up what subsidy governments throw at them whether wheat, sun or doing absolutely nothing.

Germany has had feed-in tariffs for many years. At what cost?. 2010 saw a huge growth with an increase in pv efficiency. Germany now generates about 1% of its energy from solar pv at a cost per householder of about 80 euros.

Germany was going to reduce its subsidies, then came Fukashima, and the decision to end Nuclear. There may be a carbon consuming ‘dash for gas’ to prevent the lights going off.

Germany is already expanding wind as fast as it can, solar pv is one of the few renewables that can significantly expand to fill the gap. So will german consumers be paying several thousand euros a year on electricity bills to subsidise feed in tariffs? A similar cost/household as east-west unification?

Notice this excellent diagram from McKinsey

It shows grid parity being reached in Germany before sunnier Spain or Texas.  The cost of manufacturing and installing a photovoltaic solar-power system has decreased by about 20 percent with every doubling of installed capacity. The cost of generating electricity from conventional sources, by contrast, has been rising along with the price of natural gas.  Growing demand for solar power created by feed-in tariffs to achieve grid parity creates more opportunities for companies to reduce production costs by improving solar-cell designs and manufacturing processes, to introduce new solar technologies, and to enjoy lower prices from raw-material and component suppliers competing for market share.

With this backdrop McKinsey have boldly estimated that by 2050 Europe could go 100% non-subsidised renewable.

Critics of the cost and efficiency are looking at short term marginal costs rather than long run average costs. The entreprenuer pays the former, the consumer will pay the latter.

It is like criticising George Stevensons Rocket for losing too much steam. Most of the crazy pioneers in this sector will probably lose money in the medium term as their first generation technology is rapidly superceded. But they will be laying the foundations for cheap clean energy future for all of us.

Follow

Get every new post delivered to your Inbox.

Join 1,714 other followers

%d bloggers like this: