Links 12/29/08

Storing the Breeze: New Battery Might Make Wind Power More Reliable Scientific American

An Eye For An Eye Makes The Whole World Blind Hizoy

Fifty Herbert Hoovers Paul Krugman, New York Times

Deficit or Depression? Robert Kuttner, Huffington Post. Some good ideas on how to achieve fiscal stimulus quickly. MIght be worth noting if ideas of this sort are prominent in what finally gets passed next year.

Demand for oil will fall by largest margin in 25 years Guardian (hat tip reader joe c)

Europeans see euro trumping dollar Financial Times

Discounts Not Enough to Revive Online Retail Sales Wall Street Journal

The collapse of financial globalization … Brad Setser

Antidote du jour:

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  1. Zeke

    Krugman wants FedGov to bailout the states, or at least the ones that are broke, like New York. He doesn’t like Arnold (he’s a Republican) but apparently sees nothing wrong with any other Governor.

    He says we are just as able to pay for stuff as we were (except that we’re not, which is why the states are broke to start with).

    I guess the part of the recession where we all learn to live within our means doesn’t include State Government.

    In the last 5 years the population of California has increased about 8%. The California budget has increased 35%. 400% faster than the population growth. The number of state employees has increased 15%, 2 times faster than the population growth.

    As the leading New Deal II promoting hyper-Keynesian I guess facts like this are meaningless.

    One suspects that if Obama decides to follow this advice (I suspect he will) that New York will be a big beneficiary of the bailouts, while fiscally responsible states will essentially be subsidizing them.

    Funny, I thoght that the $4 Trillion flowing to mostly NY based firms from various financial ‘bail outs’ might satisfy the rapacious thirst of NY to bugger the rest of us. How silly of me.

  2. Andrew Bissell

    Mish has a good post up today debunking Krugman’s “hangover theorists” article. Krugman’s idea that significant real economic losses can somehow be avoided in the wake of the largest asset bubble in history is absurd on its face. Throwing the term “liquidationist” around adds little or nothing of value to the public debate.

  3. Max

    The hangover piece by Krugman is puzzling. I mean, for an economist of his statue not to see how the housing bubble affected broader economy is unforgivable.

    Either that, or he is BS-ing, and having an agenda.

  4. Anonymous

    Israel seems intent to mark the end of its 60th year of existence the same way it has established itself — perpetrating massacres against the Palestinian people. In 1948, the majority of the indigenous Palestinian people were ethnically cleansed from their homes and land, partly through massacres like Deir Yassin; today, the Palestinians in Gaza, most of whom are refugees, do not even have the choice to seek refuge elsewhere. Incarcerated behind ghetto walls and brought to the brink of starvation by the siege, they are easy targets for Israel’s indiscriminate bombing.

    Prof. Richard Falk, the UN Special Rapporteur for Human Rights in the Occupied Palestinian Territory and international law expert at Princeton University, described Israel’s siege of Gaza last year, when it was still not comparable in its severity to the current situation, as follows:

    Is it an irresponsible overstatement to associate the treatment of Palestinians with this criminalised Nazi record of collective atrocity? I think not. The recent developments in Gaza are especially disturbing because they express so vividly a deliberate intention on the part of Israel and its allies to subject an entire human community to life-endangering conditions of utmost cruelty. The suggestion that this pattern of conduct is a holocaust-in-the-making represents a rather desperate appeal to the governments of the world and to international public opinion to act urgently to prevent these current genocidal tendencies from culminating in a collective tragedy.

    The most brutal episode of this “collective tragedy” is what we have seen today.…7,142559,142559

  5. Anonymous

    Zeke–According to Census data, New York and California consistently pay more to the federal government than they receive back. Many “red” states are big recipients.

    Anonymous 1:48–I’m sure this was just an oversight, but you forgot to mention the rockets fired out of Gaza into Israel.

    But these are both intractable problems. Happy New Year.

  6. AThinkingAmerican

    “Funny, I thoght that the $4 Trillion flowing to mostly NY based firms from various financial ‘bail outs’ might satisfy the rapacious thirst of NY to bugger the rest of us. How silly of me.”

    Also unconstitutional for that exact reason. But no need for an old piece of paper to get in the way of the masters of universe….

  7. Anonymous

    Israeli violations did not cease during the six-month “truce” which was mediated by Egypt on June 19 with the hope that, six months later, the truce would be extended to include the West Bank. Yet, during this period, the Israeli army killed 22 Palestinians, wounded 62, and kidnapped 38 residents in the Gaza Strip. The truce deal stated that Palestinian factions would halt the firing of homemade shells into adjacent Israeli areas and that the Israeli Army would halt its military offensives, and lift the siege on Gaza. Although the truce was met with skepticism, resistance factions in Gaza accepted it, but the situation in Gaza did not improve as the siege was only intensified, and the assaults and military incursions reoccurring. During six months of declared truce, Israel carried out 193 violations until December 18, 2008.

  8. Anonymous

    Lets not forget the bombing of a civilian hotel (filled with westreners), back in the beginning by the Israeli “home land” terrorists. Did I just say teroists, I meant “just freedom fighters”.

    Who is reacting to who again.


  9. alexblack

    Krugman wakes up every morning and puts on his Democratic Party T-shirt before he begins writing. And before this last moronic rant he must have finished off the last of the rum and egg nog. “States need to spend money they don’t have and can’t borrow unless they pay usurious rates!” Huh? Oh, there’s his solution – get Democratic governers to get newly printed money.

    The Huffington Post piece takes it even further, and into an economic Orwellian nightmare – but one that may be prescient. Print new money, and let Obama/Reid/Pelosi give it ALL to the usual Democratic base – Unions, both public- and private-employee, “community groups” (Obama – “I am giving $1 billion to ACORN to keep us from falling into a Depression!”) This is a Democratic wet dream, and I suspect this is exactly how it will play out. Take from everyone (print new money) and give to your supporters.

  10. Anonymous

    Hope Springs Eternal…

    Treasury to Buy $5 Billion GMAC Stake, Expand GM Loan

    Dec. 29 (Bloomberg) — The U.S. Treasury said it will purchase a $5 billion stake in GMAC LLC, the financing arm of General Motors Corp.

    Treasury will also lend an additional $1 billion to GM so the automaker can participate in a rights offering at GMAC to support the lender’s reorganization as a bank holding company, the Treasury announced today. The loan is in addition to $13.4 billion the Treasury agreed earlier this month to lend to GM and Chrysler LLC.

  11. Anonymous

    Following the links within the links at I find this.

    “….The Summerview wind farm, which Baerwald studied, kills hundreds of bats every year, particularly during the fall migration period that has just begun. But bats that find their way via sonar should have no trouble detecting fast-moving objects like the 200-foot- (60-meter-) long blades on the 300-foot- (90-meter-) tall turbines that spin as quickly as 160 miles (255 kilometers) per hour. And before the installation of these new, taller turbines bat kills had been practically nonexistent.

    Pressure drops of as low as 4.4 kilopascals kill common lab rats and all the bats autopsied showed internal damage and bleeding consistent with this type of death, known as barotrauma. “If bats have a lungful of air as they fly through the air-pressure change, there’s nowhere for the air to go,” Baerwald explains. “The small blood vessels around the lungs burst and fill the lungs with fluid and blood.”

  12. Anonymous

    So you know, bats are just as important as bees.

    Also from the bat article.

    “The full impact of these bat-killing pressure zones extends far beyond the wind farm, however. Such migrating bats travel from Canada as far as Mexico, eating thousands of insects en route, including crop pests such as moths and beetles. “They are one of the only things that fly around at night and eat bugs,” Baerwald notes. “Bats killed in Canada could have a detrimental impact in America or Mexico. It’s not local. It’s an ecosystem-wide issue.”

  13. Anonymous

    In the current cycle of Israel/Palestinian violence, the US press pretty consistently portrays the Israel attacks as retaliation for Hamas rocket fire. While technically accurate, it ignores the fact that Israel threw the first punch after the truce, oh, and by the way, on the day of the US elections, when it would be either not covered at all or relegated to a tertiary placement.


  14. Anonymous

    Mme Smith,
    The Setser article is provocative. Interested to see some of your thoughts here at NC, as well as those of the better members of the commentariat.

    PS Having server problems at 130. Goes well with enticements to view Jesica Alba naked. Way to go Google!

  15. River

    I think the Setzer article deserves a much closer look. The implications are very serious but, as usual, Brad’s tone is understatement but he is onto something big.

    Jessee saw the implications of Setzer’s post and followed up with some comments worth reading, ammo for inflationistas:

    ‘My explanation is pretty straightforward.

    Central banks were the main source of financing for the US deficit all along. Setting Japan aside, the big current account surplus countries were all building up their official reserves and sovereign funds — and they were the key vector providing financing to the deficit countries.”

    The implications of this are rather profound. The much touted notion that the US is the preferred destination for private wealth, thus sustaining an out of balance trade deficit through a financial services economy, is rubbish at best, and propaganda at worst. It is rooted in the Dick Cheney nostrum that “Reagan proved that deficits don’t matter.”

    What we have today is a very lopsided vendor financing arrangement, wherein the US is largely supported by China and Japan whose industrial policy currently recommends their support of a US debt that is increasingly unpayable.

    If and when China and Japan are no longer able to support the continued growth of US deficit financing, the dollar and the bonds will contract (decrease) in value, and perhaps precipitously, like a house of cards. It is much worse than we had imagined, and more concentrated on these two countries, along with Saudi Arabia, than we had thought.’

    and the money lines…

    ‘Japan and Saudi Arabia are understandable as virtual client states under US military protection, but we struggle with how China was taken into this arrangement which is so potentially destabilizing of their internal political and economic stability.

    This is why the world has not developed a sound replacement for the dollar hegemony. It is because if they do, they must navigate around the probability, not possibility, of a collapse of their dollar reserves, and a dislocation of their own export driven economies, much worse than we might have imagined. It is not a matter of economic inventiveness; it has become a matter of will.

    Who will be the first to flinch? History shows it is rarely a conscious decision, but rather some incident, an accident, some trigger event, even one so small, that it creates astonishment at the size of the avalanche it unleashes.

    To make it clear and simple, this is the first evidence we have seen to suggest that hyperinflation is in fact possible in the US. As you know, we have been strongly adverse to the extremes in outcomes, both in terms of a sustained deflation and a significant hyperinflation.

    That has now changed. The dollar is a Ponzi scheme, the waters of debt are overflowing the dam of artificial support, and only a few countries, two of them somewhat unstable, are holding back the deluge.’

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