Showing posts from August, 2008

Condemning Russia: Western Hypocrisy

Take this recent bit of news:Seven of the world's leading industrialised nations have jointly condemned Russia's decision to recognise Georgia's breakaway regions.

Canada, France, Germany, Italy, Japan, the US and UK said Moscow's recognition of South Ossetia and Abkhazia violated Georgia's integrity and sovereignty.

Earlier, the UK's foreign secretary said Western countries should re-examine their relations with Russia.

David Miliband also warned Russia not to start a new Cold War.No more than a few months ago, similar articles could have read almost identically describing events at that time:Two of the world's largest developing countries have jointly condemned the decision of Western nations to recognize Serbia's breakaway region.

Russia and China said that the Western nations' recognition of Kosovo violated Serbia's integrity and sovereignty.

Earlier, Russia's foreign secretary said Russia and China should re-examine their relations with t…

US bubbles and the global savings glut

I am now of a fairly firm conviction that the U.S. asset bubbles of the recent decade have been caused by the global savings glut.

What's happening is, ever more people around the world have been saving money, putting it into banks. But the banks can't just pull the money needed to pay interest rates out of thin air; it's not supposed to be a Ponzi scheme per se. So banks around the world need to invest their clients' money somewhere where it will generate decent return, so that they can pay the clients some interest, pay for their expenses, and collect some profits in turn.

The problem is, banks in most countries have found it unattractive to invest domestically. A few likely reasons:Taxes and bureaucracy: Most countries in the world don't make it as easy to start and run a business as the United States or, say, Ireland do. Even most developed countries in continental Europe are in this category - e.g. France, Italy, Germany, Spain.Incompetent educational systems: m…

The coming insignificance of the West

I'm only halfway through Physics for Future Presidents, so I haven't yet made it to the part about global warming, but just seeing the energy numbers I quoted in my previous post, and putting that together with the other books I'm reading about the prospects of the American economy and China's, causes me to reach the following conclusions.

The fight against global warming is ridiculous. The fight is being conducted by a minority of the world's population, the West, who currently think that we're the shit, and who think that we have some kind of leadership role and some kind of global responsibilities to uphold.

In reality, we, the West, are 1 billion people in a world that has 6. Our Don Quixotic efforts to counter global warming ignore India and China, who can't be persuaded to give a flying turd about the issue, and who are building coal-fired power plants like crazy. The Chinese add the power-generating equivalent of a large European country in a single ye…

We have enough oil: The Fischer-Tropsch process

I have recently been reading Richard Muller's excellent book Physics for Future Presidents: The Science Behind the Headlines. It covers topics from terrorism, energy, food, radioactivity, to global warming, and does all that with an approach that gets the things you need to know across, without spending a lot of time in equations or difficult details. An excellent read not just for presidents, but for anyone who votes for presidents, as well.

The book relates a lot of facts that are not commonly understood, yet dictate what happens in the world. Did you know, for instance, that coal (just the fuel, not counting the power plant or any air cleanup) is about 20 times cheaper than oil, per unit of energy produced?

China is adding new power plants at a stupendous pace. Guess why most of those plants run on coal?

We also have coal available in substantially larger amounts than oil. And the important difference is, coal is readily available in many countries, such as the United States, that…

Russia strutting the stage

Richard Baldwin on Free Exchange makes an astute observation about the nature and purpose of Russia's forays in Georgia:One tried-and-true glory-restorer is sabre rattling, and here the Georgian crisis was nearly perfect. Russia was reacting. Russia was standing up to the West. The hearts of Russian patriots beat fast and strong. Something like the May Day parade but with much better TV footage. Best of all it was dirt cheap, easily worth the boost in legitimacy it gave the government.

If my conjectures on objectives are right, Russian leaders will milk this crisis for as long as they can. Rattle the west’s cage as many times as possible. But they will avoid real war like the plague. Real war—like the kind that the Soviets fought and the kind that Krugman worries about – is expensive and eventually unpopular. Not at all the sort of thing that will keep Putin’s group in power and in the money.In addition to that, there's also the obvious oil motive. Gazprom has interests in par…