Thoughts on the Roof

Car Chargine Power Points

2011-11-25T12:50:00.000-08:00

With electric cars finally beginning to enter the domestic fleets of the world, we are going to need lots of charging points. Everyone with an electric car will have a power point at home. In fact you already do. As long as you don't want fast charging, all you need is an extension cord from the nearest outlet. This will give you somewhere between 10 and 25 amp charging, depending on your individual electrical set up. However, here we are talking about charging away from home.

Commercial charging points will spring up in company parking lots, along streets instead of, or integrated into parking meters, at restaurants, in high rise commercial parking lots and so forth. What characteristics should they have.

You should be able to swipe your card and then choose a number of options. With respect to the amount of power you want you should be able to choose full charge or a given amount of money or a given amount of kWh (kilowatt hours). If, by chance, you chose more than your car can take at the time, you would only be debited for the amount you used; not the amount you asked for.

With respect to the supply options you should be able to choose Charge now (at the full day time cost per kWh) or option 1, 2 or 3. Option 1 would cut in when the power company sends a signal down the line or over a dedicated phone chip that because of extra generating capacity, somewhat cheaper electricity is now available. Option 2 cuts in when the uptake of electricity by offering Option 1 is not enough to balance the load with the supply and option 3 a further reduction in price to bring even more load on line. Each option gives the consumer less expensive electricity than the previous option and allows the power company to sell more electricity.

At home, if you have a dedicated, smart-charging point you might even have option 4. Option 4 is "Charge and Supply". You would use this one when you are not going to be using your car for a while. You might be on vacation overseas or you might only use your car on weekends so the car during your holiday or during the week would be plugged into Option 4. With this option, your car will receive charge when option 3 (the least expensive electricity) is available and will send power back to the grid when the power company signals that it needs some peak shaving (high load and hence a short term need for extra electricity). In this mode, your electric vehicle will generate a small but very welcome revenue for you.

Hopefully, the power companies will be smart enough to realize that if they set up the system to allow the customer to save money and to have options, they gain as well. They gain by being able to sell more of their power rather than letting water flow over the spillway or having to feather their wind turbines. They gain by not having to build a dedicated, very economically wasteful power station just for peak shaving and they gain by having the good will of their customers. They also help their country and the world by putting less carbon into the environment. Systems as described above are ideal for using intermittent renewable power sources such as wind and hydro and if you have a charged battery in your car, charged when excess energy is available, you will demand less power when fossil fuel must be used to generate it.

Selling off our SOE's

2011-10-31T12:46:00.000-07:00

The present New Zealand government (Nov 2011) is proposing to sell off shares in our SOE's (State Owned Enterprises). These include power companies and the State Airline. They propose to keep 51% of the shares in the hands of the government and to give Kiwis the first chance to buy the shares that are 'on offer'. At present, the dividends from these companies go into the government coffers and reduce the amount of tax the citizens of New Zealand have to pay. Their proposal to sell off part of our SOE's is a little like a trucking company selling off a profit making-truck to get money to pave the parking lot. Not a great business move. I have a problem or two with this proposal.

Ownership
My first problem is I can't see how these shares can be sold to us. We already own them. They have been paid for by generations of Kiwis through their taxes. It's like taking empty bottles from the back of a convenience store and selling them back to the owner. Since we already own these shares collectively, surly they could only be sold to a non Kiwi. Then the proceeds should be divided up and sent to each of us - every man, woman and child of us. How silly would that be. Far better that we, the people of New Zealand, keep the ownership of the shares and use the dividends to defray taxes. The present government doesn't own the shares except in-so-far as each member of parliament owns exactly the same amount of these companies as every other Kiwi.

Tax Increase
Of course, if we sell off the shares and reduce the amount of dividends going into the government coffers, taxes will have to increase. Yes, the government will have some extra cash to do it's work from the proceeds of the sale but when this money has been used up taxes will increase.

Taxes will increase for all Kiwis but at least more well off Kiwis who had the spare cash to buy the shares will have some dividends to make up for the extra taxes. Less well off Kiwis will simply pay more. In effect we are taking money from the less well off and putting it in the pockets of the more well off. A typical money-go-round. The one saving grace of this whole sorry event is that we will get back a third of the dividends in taxes from the Kiwis who have bought the shares. A very cute system. We the people of New Zealand will no longer own a large part of our SOE's but we still get a third of the dividends to defray taxes. That is, unless the better off Kiwis have some system to avoid paying taxes. Surly they wouldn't do that!!!!

Final Ownership
Eventually, when the owners of these shares need money or when the shares have increased in value, the owners of these shares will sell them. In fact all we need is another economic crisis (think PIIGS*) to make people desperate to get a little ready cash in their hands. I don't know how you read the economic climate in the world today but I suspect we have only begun to see a series of crashes, each one more serious than the previous one. Who will buy these shares. Who has lots of ready cash from selling cheap goods to the rest of the world. They won't necessarily buy the shares directly. There are plenty of people who are willing to be a front company or a front company for a front company etc. etc. for a share of the profits. The shares will go overseas and we become, to a greater and greater extent, tenants in our own country.

* Portugal, Ireland, Italy Greece and Spain

Banks are lining up to reap the benefits of selling these shares. One estimate I have heard is that they will end up keeping 1% of the value of the companies they sell. Do we really want this money flowing off shore to Australia (most of our banks are owned in Australia)

These banks will likely buy and retain some of the shares. More money in dividends flowing into Australia.

Helping President Obama

2011-10-23T11:57:00.000-07:00

I don't think most Americans understand how the American political system works.

Congressmen and Senators
The only thing these folks fear more than not being re-elected is not being reelected and not getting a cushy job as a lobbyist or as a high paid executive in some part of the corporatocracy. This explains many of their actions when they are in power. We can use this fear.

The President
When you have elected a good one your president is the true representatives of the people and you have one of the best you have ever had in the White House right now. When you elect a lemon, the president is the representatives of the corporatocracy. Guess who reduced controls on big business and the banks and allowed them to regulate themselves.

Don't get me wrong. I'm not against business and certainly not against the so called Capitalism. Business is good, and properly regulated Capitalism is by far the best system we have come up with. In the majority of cases, what is good for business is good for the people but this is not axiomatic. A business that does most of its manufacture overseas is not good for it's country. A business that pollutes the environment and sickens people living nearby is not good. Businesses that do not recycle are not good. A business that builds in obsolescence in its products is not good for the citizens of it's country. I'm sure you can think of other examples.

America has a habit of throwing out their best presidents. Look what happened to Jimmy Carter. For once you elected a highly intelligent president with the needed vision to protect and nurture America and take her into a bright future. If you had elected him for a second term there is a very good chance that you wouldn't be a declining country controlled by the industal-military complex, the banks and the corporatocracy. You wouldn't be dependent on fossil fuels and you would have a decent medical and general safety net. Better yet, you would hardly need this safety net because people would have jobs. If you get in behind Obama you will get the same result.

A president can't go it alone. He needs a mandate from the people and he needs this mandate for everything he does - not just the mandate of being elected. Even if he has a Democratic Party majority in the congress and the senate, it is hard enough for him to get things done. Even the Democrats are hoping for these cushy jobs if they get thrown out of office. If the old reptile ###holds sway in the senate and the congress, the president is truly stymied. What to do.

### This link sometimes doesn't work. If it fails, google Bill Meher thanks Teabaggers and Sarah Palin

Also look at this message that Obama sent Xmas 2011. This is what I mean
"Earlier this week, it looked like Congress would go home for the holidays without preventing a tax increase that would mean millions of American families would have about $40 less in each paycheck.
But then something pretty incredible happened.
It began when we asked everyone to show us how that missing $40 would affect them and their families. In a matter of hours thousands of vivid, powerful stories from Americans of all ages, all backgrounds, from every corner across the country were pouring in. For some, $40 means dinner out with a child who's home for the holidays. For others it means a tank of gas or a charitable donation. In just two days, tens of thousands of Americans were making their voices heard.
You spoke up. Your voices made all the difference.
Thanks to you, Congress reached an agreement to extend the payroll tax cut. On top of that, vital unemployment insurance will continue for millions of Americans who are looking for work."

Demonstrations are good. A good example is the demonstrations of Oct. 2011. "The man" is taking notice of these demonstrations against corporate greed and bank bail outs. Look at how much money the banks are contributing to the police to put down the demonstrations. Incidentally, who's money do you think this is that they are giving to the police. But demonstrations are not enough. And in reply to these demonstrations, the powers-that-be are asking for specific measures that the people want. I don't know why the demonstrators are so reluctant to get down to specifics. What would be wrong with carrying around placards with the following messages.

Maximum pay for a CEO 6X the lowest wage in his company

95% tax on bonuses

Banks that make the loan carry the risk

No speculation by banks

Ban derivatives. They are gambling - not investment

Banks that speculate can not call themselves Banks

Banks invest, They do not speculate.

If you speculate, you are not a bank

Pre-Reagen rules for banks

No more toxic mortgages

A flat tax rate for individuals and business but no loopholes

Jim Hansen's Tax and Dividend

Zero tax up to the poverty level, Flat rate above that

Clean legislation. No attachments.

Banks.
Stop using our money.
To pay the police.
To suppress our demonstration. (Four plackards marching behind one another to do this one)

How about this one. It will really set the cat amongst the pigeons

Creating money is a sovereign right

or

Debt money created by the bank is sinking us

watch the bankers squirm with these two

see this link

and so forth.

But what else is needed. You must bombard your congressman and senators (two per state as I understand it) with letters and e-mails telling him what you expect him to do and how you expect him to vote on every issue. Never make a letter more than one page. Never be abusive. Always get someone you trust to read over your letter before you send it. Give the reasons why you expect him to vote that way. Always run your letter through spell check. Leave it for a day at least and re-read it before sending.

And to someone out there, please put up a web site which has an easily understood list of the voting record of your representatives. Study it and see if he is truly representing you or if he is cow-towing to the corporatocracy.

Use blogs and social media to clearly express why you are for or against this or that policy and why.

And finally, vote with your purchasing power. Buy from businesses that are good for America.

Leagalize Cannabis

2011-10-15T12:46:00.000-07:00

Do I think Cannabis is harmful??

Absolutely

If the research is anything to go on, used in large quantities it can cause psychosis. It is often used by teenagers, just when their brain is undergoing another surge in growth similar but smaller than the post birth surge. It is at this time that they are laying down much of the knowledge of physics, geology, biology, math, literature and so forth that will stay with them for a life time. Instead they are mellowed out. It is like taking a finely honed wood carving chisel and dragging the edge across a stone. The smoking of cannabis is also just as carcinogenic as tobacco. So why do I want to legalize cannabis.

Clearly, the present system is not working. It is resulting in a huge prison population, it is making the drug peddlers rich, it is leading to crime as people steal to get money to pay for their fix and arguably, the use of cannabis is less harmful than the use of alcohol. Making it illegal is having many of the same effects as prohibition and we have to try something different.

What I would propose is letting out of prison anyone who's conviction was only for the use or sale of cannabis. As they leave prison, let them take a 5kg package of confiscated cannabis with them. If the stock of confiscated cannabis is not sufficient, buy in more. Flood the market and trash the price.

At the same time, use all the money saved from not having these people in prison and all the money saved by the police not having to police cannabis, to fund an educational program, similar to the one on cigarettes showing the danger of cannabis. Go all the way with this with freed up police talking about the down side of cannabis at schools and public meetings.

And all the while, make cannabis freely available so that there is absolutely no incentive for anyone to grow or sell the stuff. I know this sounds a little crazy but the present system hasn't worked.

While we are talking about drugs, how about party pills. If you look at any beneficial drug, it has to go through an incredibly expensive, time consuming process to prove that it is safe and effective. Even then, some drugs come on the market that have to be recalled when unexpected side effects come to light. Why can anyone formulate a party pill from anything he wants and sell it without similar checks. Clearly, forcing party pill peddlers to jump through the same hoops would make it far too expensive for them to market their products. Recently here in New Zealand a party pill came on the market that was primarily composed of bovine worming medicine!!! Go figure?

I know there is a conflict between these two messages. Put on restrictions - take off restrictions. At the bottom of the whole problem is why we think we need to alter our minds with all these drugs. Life is such a blast when you are completely sober. It boggles the mind. In the end, I have to admit, I really don't know what the solution is. Personally, I would hang anyone caught making or selling drugs like P and Heroine but that is not PC. I would treat users like alcoholics.

Part, but only part of the problem is the number of people out of work and this comes down to the way governments set up regulations to do with imports, exports, taxes and so forth. To a large extent, if we all had worthwhile jobs that gave us a good living, a lot of us would not turn to drugs to make a crust or to help us forget our troubles.

I suspect the path we should take is to consider growers, producers and dealers, as high end criminals, but users, sick people in need of help.

KiwiBank

2011-10-15T12:18:00.000-07:00

A few years ago, the government started KiwiBank. I may have my facts crossed up here but below is my understanding of how it was set up and how it operates. My information is from bits and pieces in the press and on the radio. And it is brilliant. No, I'm not being my usual sarcastic self. It really is brilliant.

The government provided the seed capital for the bank. I have heard that this was $200m. The bank is therefore an SOE (State owned enterprise). The difference between this SOE and others is that the government doesn't insist on a dividend. KiwiBank is allowed to put her earnings back into the business. This is the first brilliant move. KiwiBank can grow organically by plowing her profits back into increased capitalization.

KiwiBank was set up to operate from existing post shops. If you have gone into banks in many countries you will see that they are the most opulent of any business you are likely to visit. Marble counter tops, paneling of rare and expensive wood etc. Where do you think the money came from. You guessed it. Higher charges to borrowers, lower interest to depositors and so forth. Not in KiwiBank. The shops are already there, the workers already in place and earning their crust, primarily from the post shop. In addition, once you have set up your bank account with KiwiBank, almost everything you have to do can be done online. Once again, very low overheads.

I'm not sure if this is still so but initially, KiwiBank didn't have any other shareholders. This is the third brilliant aspect of KiwiBank. If you have shareholders, you have to give dividends. This a stream of money leaving the bank that could better be used to decrease interest for borrowers and/or increase returns for depositors and/or increase the capitalization of the bank.

The fourth brilliance of KiwiBank is that it is wholly owned by Kiwis. To the best of my knowledge, all our other banks have a majority Australian ownership. Ausi shareholders expect a dividend, and this is a stream of money pouring out of the country. A recent item on Nat Radio suggested that this revenue stream is around $4b. None of this is from KiwiBank.

All is not clear sailing, however. There is talk (perhaps it has already happened) of selling shares in KiwiBank in order to increase its capitalization. In other words, borrowing money. It would be far better to grow KiwiBank organically. As profits are made, they increase the capitalization of the bank and it can loan more money*. I would even go so far as to say that as it grows, KiwiBank should pay back the government seed money. This way it becomes completely independent. It becomes a bank that can serve the needs of New Zealand and not rich shareholders and bosses with expectations of completely unjustified bonuses. Am I worried about an uneven playing field. Not a bit of it. I want our KiwiBank to have an 'unfair' advantage.

*Banks must have a certain legislated level of liquidity. In other words, they must have X amount of money in their vaults in order to be allowed to loan Y.

New Zealand Going Under

2011-10-08T12:19:00.000-07:00

America has finally woken up. (funny way to start a blog on New Zealand). As of early October, 2011 she is talking about bringing back manufacturing from overseas and providing jobs for Americans. This has nothing to do with virtue amongst the American Corporatocracy. They haven't finally started to think about the good of the country that spawned and nurtures them. They haven't suddenly put the good of their fellow citizens above their own highly inflated salaries and bonuses. No, the reason is far more prosaic although I'm sure they will try to claim the moral high ground. The truth is that the Chinese Yuan is beginning to rise with much more 'up' inevitable in the near future and the wages of Chinese workers is rising, by latest reports, at about 15% per year. American firms see the writing on the wall.

By the by, did you ever wonder what happened to that fabulous dream we had a few decades ago that we would all soon be working 30 hour weeks with 5 week annual vacations plus all the other holidays throughout the year. What happened to the story that with automation, fabulous goods would become less and less expensive and we would all be living in the lap of luxury. Well to some extent it came true. Look at this fabulous invention, for instance, thanks to Steve Jobs, that you are using to read this blog. Look how the price has come down from it's first inception. However, the futurists, as they usually do, forgot one part of the puzzle. You have to have a job in order to buy things. In a perverse way, some of us have lots of free time. We are on welfare. As long as our needs are modest and we have somewhere to live, all our time is our own. If we can earn a little money under the radar we are 'sweet'. Not a pretty picture. But this is supposed to be a blog about New Zealand.

New Zealand is just as prone to corporate greed and government short sightedness as any country of the world. We are always decrying our low productivity, complaining about the lack of jobs and even more so about the lack of worthwhile jobs. Our diaspora is somewhere around a million and these million are some of our most enterprising people. We wonder why our young and not so young people search for a better life overseas. Lets look at how we are operating New Zealand Inc. and how we could operate.

Our Lumber Industry
New Zealand has the basis of a great lumber industry. We have slightly more land than the UK and a population of 4.3 million so we have lots of land on which to plant trees............ and we have   lots of trees planted. Our main species is the Monterrey Pine, Pinus radiata and with our fabulous growing conditions, the cycle is from 17 to 25 years. You should see the growth rings on our pine logs. They are typically a cm or two wide. We plant them, prune them (lifts) to ensure clear, value added wood and replant as soon as the trees are cut. Then we send raw logs overseas!!! Our lumber mills have closed in droves. In the mean time, Canada is undergoing a boom in value added timber products. Where does she sell her ply wood, milled timber and even fully made up struts? Answer: To the same markets where we send our raw logs!!! How come Canada can get it right and we can't.

Mean time, our lumber mill workers are either packing super market shelves or leaving for Australia and points North. A skilled lumber mill worker will have a productivity, measured as the value of what he produces divided by the hours he works. Lets call his productivity 'X'. When he changes jobs and starts to pack super market shelves, his productivity will drop to 0.1X. If he goes on welfare his productivity is minus 0.1X. No wonder our productivity stats are low. We are trashing all the high productivity jobs.

Could this trashing of one of our primary industries be due to the nature of our much vaunted free trade agreement. Note that when China felt herself in danger of not having enough Rare Earth Metals, her free trade agreement didn't stop her from curtailing their sale.

Our Fishing Industry
We have lately been bombarded with news items about the terrible treatment meted out to Indonesian fishermen working on Korean fishing boats, fishing in our waters. As usual, our attention is being directed at the right hand while the left hand does the trick. Just a little background first. These fishing boats are contracted to our fishing companies and must land their fish in New Zealand. At least we've got that right. The question we should be asking is why we aren't using our own fishing boats to fish our waters? I'm sure you are way ahead of me. The obvious answer is,,,, that because of the terrible conditions on these foreign boats, they can land the fish cheaper than our own boats, operating under New Zealand labor laws. Thus the shareholders* of the New Zealand fishing companies can make larger dividends and the bosses of the New Zealand fishing companies, larger bonuses. This is the exact equivalent of American companies sending their manufacture over to China were wages are (were) rock bottom. Once again the result is our people are out of work, on welfare, not paying taxes, not shopping at local businesses (who therefore pay less taxes) and ultimately looking for work overseas. Once again, the same story as with our lumber industry. People out of work, negatively productive, fleeing New Zealand, breaking up families and not paying taxes. No wonder we have to borrow money. We have to borrow to make up for the lost tax take and to pay welfare to the out-of-work Kiwis.
*Incidentally, much of our fishing industry is owned and operated by Iwi (Maori Tribes). Here we have the unedifying sight of Maori bosses putting their own people out of work so that they can get higher salaries and bonuses and so that the Iwi can make larger profits.
Fisheries policy - let's change tacks.

Whale Poo

Rolling Stock Manufacture
We are going back into rail and Electrified rail at that. GREAT MOVE. We have seen what is rolling down the turnpike at our stalled car (Kiwi Inc.) and have made a very sensible decision. Then we go and buy our rolling stock overseas despite having a local industry that is perfectly capable of manufacturing them!!! Are we nuts. See:

cost-of-manufacturing-overseas

Energy Policy
I'm not going to type all this again. We show very little imagination. Have a look at:
Solar-electric-government-role
Kiwisaver-and-solar-panels
Excess-energy-what-to-do
Double-metering-its-insidious
German-fit-system-brilliant
Legislation-for-electric-cars
Enabling-wind-farms
Wind-energys-no-good

Our policy on Climate Change
We could be far more innovative here as well. We must be completely selfish here and look after New Zealand. We can't do anything of significance about climate change ourselves but we could:
a) set an example,
b) guard our clean green image,
c) future proof New Zealand against a likely collapse of the ecology and economy of our major trading partners and
d) reduce our financial obligation under Kyoto

global-warming-anthropogenic-or-not
forget-climate-change

Note that our lumber industry should get carbon credits, not a carbon charge. The trees we grow are taking Carbon dioxide out of the air and because our forests are young and growing (not mature forests in which net uptake is zero) they take up a lot of carbon. Very close to 50% of the dry weight of wood is carbon. In so far as part of this wood is built into long lasting furniture and buildings it is a long term sequestration of carbon. Then instead of using the highly polluting lignite coal to manufacture urea, we could equally well be using all the wood waste. More carbon credits to the lumbering industry.

Urea from wood waste

Carbon Tax
Our Cap and Trade policy to control our carbon emissions is designed to make the banks rich, most of them not even Kiwi owned. Australia has just introduced a carbon tax system and the banks are lining up, rubbing their hands together vying for the business. If much of the commentary is correct, Cap and Trade will not even be effective.   Jim Hansen has proposed a far better system called Tax and Dividend which has every chance of being effective and will protect the citizens of any country that adopts it, from the temporary increase in the price of just about everything. Best of all, from the point of view of the political party that proposes it, it would be a real vote catcher.
Jim Hansen's climate change solution

Why are our political parties so reluctant to propose Tax and Dividend instead of cap and trade.

Our Agriculture
We could be producing green urea (sounds like an oxymoron, doesn't it?). Instead we are proposing to use our lignite which is the dirtiest form of coal. Even worse, the company that is proposing to do this is an SOE for heaven sake!!! A government company. Note that Urea only contains the nutrient, Nitrogen but we could also be producing high quality whole (with all the nutrients) fertilizer for our farms at a very low cost. We could also have truly green dairy farms.
fertilizing-new-zealand-natural-way
wood-waste-and-urea
indoor-dairy-farms

Selling off our SOE's (state owned enterprises)
The government is now talking about selling off 49% of our State Owned Enterprises to make up for the money we are borrowing.   This is like a trucking company selling off it's trucks to make the end-of-year books look better. I have four problems with this.

1) We, the citizens of New Zealand, already own these companies. The SOE's are the property of every Kiwi. They don't belong to the government except in the sense than every member of parliament owns just as much of them as every other Kiwi. Selling us our own SOE's is like stealing empty bottles from behind a convenience store and trying to sell them back to the owner. (at the age of 9, I tried this, was caught and this was the end of my career in crime).

2). All Kiwi's will have to pay more taxes because of the reduced dividends coming in from these SOE's

3) Who will buy them. Clearly Kiwi's who have some spare cash. They will then get the dividends*. The rich Kiwis who have bought shares will have some income to make up for the increased taxes. Poor Kiwis will be simply out of pocket. The bottom line..... Money coming out of the pocket of poor Kiwis into the pockets of rich Kiwis. A typical money merry go round that we have, in the past, associated with America, not with New Zealand.

*incidentally, it is very clever on the part of government. They sell us our own property, we get the dividends and then we pay tax at our marginal tax rate on these dividends. The government gets a third of the dividend back even though they no longer own the shares. Very cute.

4) As soon as the buyers of these shares need money or when the shares have gained some value, they will sell them. Who will buy them. Who has lots of American dollars because of their low wages. You guessed it. And they don't necessarily buy up our SOE's directly. There are front companies and front companies for front companies and...... you get the picture. Same result. We end up with 49% of our strategic assets owned overseas. We end up being tenants in our own country.

5. Apparently, shareholders which own 25% or more of a company have quite a few rights in controlling a company. I am not familiar with the inns and outs of this situation but it would appear that owning 51% of a company does not give the control that is implied by the Key government.

KiwiSaver
And finally KiwiSaver. It has the potential to be the most important innovation in our history (OK, that may be a little exaggerated --- but only a little). KiwiSaver is Kiwis investing in their own economy, the dividends coming back to Kiwis to be spent in Kiwi businesses which pay taxes to the Kiwi government etc.    The benefits are far more extensive than sketched above. See:
KiwiSaver - Good for new Zealand

But it is a terrible investment....... and not to put too fine a point on it - a scam. The poorness of the investment is obvious when you see the bribes that the government had to offer to get people to invest in it. To provide these bribes, the government has to a)borrow more money, b)lower services or c)hike taxes. The present government has done all three. Sure, the present world economic situation has a lot to do with our economic woes but KiwiSaver bribes are a contributing factor. Money is simply taken out of Kiwi Pockets in order to bribe other Kiwis to save. Government debt is increased while private debt is decreased. A zero sum game as far as our overall New Zealand debt is concerned. No wonder our credit rating has gone down from AAA to AA. It would be so easy to fix it. (See the above link). Simply stop all the government and employer contributions (another scam) and let us invest before taxes. Go all the way and tax our real (above inflation) dividends rather than our nominal dividends. This way KiwiSaver becomes a viable investment in its own right.

We are asked to put a large proportion of our disposable income into an investment fund for all of our working life for the good of New Zealand. This is not an investment such as we would make when we buy shares or a rental house and should not be treated the same way by the government. It is not an investment that we can cash up when we decide to. Surly we deserve a fair return on this sort of investment. And imaging the money coming into the economy as Kiwis retire and have a decent pension fund. Instead of being a burden, retiring Kiwis become a positive asset to the economy.

New Zealand is a great innovator. We lead the world in so many ways but we could do so much more.

Whale Poo

2011-09-20T03:36:00.000-07:00

It turns out that Whale Poo# is vital to the ecology of the oceans. Or at least it was when we had plenty of whales. The lack thereof may explain part of the decline of our world fisheries. I am not arguing against the devastating effect of our overfishing. I'm not arguing against the destructiveness of our fishing methods. They are clearly trashing our fish resources but, with lots of whales, the amount of fish we could take sustainably would increase.

#Also see New Scientist, 9 July 2011,p36

It turns out that whales pump nutrients from deep water and urinate and defecate them into surface waters. Even better, whale defecation is floculant and tends to float in surface waters where it powers the surface ecology. You probably immediately thought of Sperm Whales who eat giant squid from great depths but some of the baleen whales also pump nutrients. For instance Gray Whales skim the sea bottom collecting bottom organisms and mud. They filter out the mud through their coarse baleen. Humpbacks herd shoals of Krill to the surface where they can trap them against the surface to feed on them. It has been found that Krill, in contrast to what was once thought, often are also found at great depths feeding on the bottom. Undoubtedly, as we learn more about these animals we will find more about how they bring nutrients to the photic zone.

Moreover, whales are part of the trapping of nutrients in surface layers. Let me digress for a moment.

There is often confusion between the observed biomass and the biodiversity of an environment on the one hand and the amount of sustainable harvesting which is possible on the other. The first people who looked at tropical forests and tropical coral reefs saw a huge biomass of animals and an astonishing diversity of animals and plants. It was fairly natural to assume that one could harvest huge quantities of food and other valuable resources from both. Unfortunately, the large biomass relates more to the ability of these environments to hold and recycle nutrients within their ecological system. The incredible diversity of species is partially related to how long they have been stable ecological regimes with huge spans of time for diversity to occur. In the Amazon jungles, for instance, the huge area covered by jungle obtains its nutrients from the weathering of the Andes mountains to the West and from dust blown from the Sahara desert. When parts of the jungle are cleared and farmed, it has been found that after a couple of crops, the soil is exhausted. Similarly, coral reefs when heavily fished are soon exhausted. Coral reefs exist in very nutrient poor water. In fact, they can only live in very clear and hence nutrient poor water. Coral polyps contain zoozanthellae, a type of algae, and they need sunshine to live. Corals polyps have evolved to grow in very poor waters by evolving a symbiotic relationship with internally contained algae and now can not grow in rich, algae filled water as their symbiotic algae will not get enough light. Not a lot of nutrient is coming into coral environments and so not much food can be sustainably removed.

Compare this with any of the upwelling environments off desert coasts such as the coast of Peru or the coast of South West Africa. There, nutrient rich water wells up from below and the productivity and harvestability is astounding. Much of the fish meal for the world, for instance, comes from the anchovy off the coast of Peru. The species diversity is nowhere as great as on a coral reef or in a jungle but the productivity and hence the amount that can be sustainably harvested is huge.

So back to the whales. There are two factors that lead to huge biomass in an environment. As we have seen one is the influx of nutrients and the second is the ability to hold these nutrients in the system. If you only had phytoplankton and krill in a region, the krill would eat the phytoplankton and new phytoplankton would grow at a rate that depended on the amount of nutrient coming from outside of the environment. Feces and dead krill would sink to the bottom of the ocean and nutrients would be lost from the surface. The ultimate limiting factor in the growth of algae is the amount of sunshine falling on the water. With an unlimited supply of nutrients in the water, the maximum amount of sun energy can be used. However, as nutrients are depleted, the total productivity is limited by the nutrients left in the system. In oligotrophic environments, productivity is very low despite the amount of sunshine falling on the water. Whales, feeding on the surface, are continually mineralizing the krill and excreting them in a form that can be taken up by the algae. More sun energy is being used and nutrients are being fixed into whale biomass. Krill grow at a huge rate, fed by the huge primary productivity. Nutrients entering the system are captured and kept at the surface. This is a very simplistic painting of the picture. There are many many other parts to the web of life that capture and use feces from all the surface organisms and mineralize them and all of them conspire to keep nutrients in the photic zone. Add to this the upwelling and the nutrient pumping due to the whales and productivity can be truly astounding. Whales not only pump nutrients from below the photic zone but contribute to keeping the nutrients within the photic zone.

The law of the Minimum Resource

Widening out our horizon a little, the same idea holds true in the ocean when looking at the productivity of an area. Water is no problem as growth is in water. Nutrients can be present in larger or smaller quantities depending on upwelling, biological activity and so forth. The ultimate limit over which we have not control is sunshine. It powers the bottom layer of productivity, the phytoplankton, and determines the maximum productivity that can occur. When looking at a fisheries such as the Anchovy off Peru, it is interesting to note that anchovy are at the third trophic level. They eat zooplankton that in turn eats phytoplankton. The total productivity of Anchovy is therefore only about 1% of the productivity of phytoplankton#.

#as a rule of thumb, 10% of the biomass of any trophic level is passed on to the next level. 100kg of phytoplankton makes 10kg of zooplankton which makes 1kg of penguin which makes 0.1kg of sea lion.

The bottom line is that with their dual function of bringing nutrients from below the photic zone and of keeping the nutrients at the surface, whales greatly enrich the environment for the growth of other organisms, some of which are commercially exploitable fish.

To anyone that doesn't buy the argument that we should not kill whales because they are such magnificent animals, perhaps this is a more hard nosed argument for leaving them alone. Whales increase the productivity of fish.

Carbon Sinks

2011-09-16T13:23:00.000-07:00

Glaciated periods end with a sharp increase in Carbon dioxide. It looks most likely, as odd as it seems, that the rise in CO2 is the result rather than the cause of the melting. The release of CO2 then accelerates melting in a feed-back loop. Carbon sinks then continually reduce the level of atmospheric Carbon dioxide and when Carbon dioxide levels fall sufficiently we edge into another glacial. I'd like to try to catalogue all the potential sinks regardless of their perceived importance. Others can work on sussing out which ones are significant and which not on the road to the next ice period.

Corals
Corals and all other marine organisms that have a Calcium carbonate shell are sinks for carbon dioxide. Every molecule of CaCO3 contains one molecule of Carbon dioxide. Every Kilogram of Calcium carbonate contains 606g of Carbon dioxide. Besides the building of reefs by oysters and corals, some phytoplankton have calcium carbonate shells. There are globigerina, a type of foraminifera, pteropods and so forth. When these die, they sink to the bottom of the ocean and form calcareous oozes. Curiously, at great depth (below about 4500m) the calcium carbonate dissolves so these oozes only form in medium deep water. The white cliffs of Dover are such deposits which gives a visual indication of the extent of sequestration that phytoplankton can effect.

Of special interest with regard to corals is that they are limited in their growth by the surface of the oceans. If you have visited coral reefs you may have seen some of the brain corals which show concentric rings on their tops. This is where very low tides have killed off the top of the coral and then as the diameter of the brain coral has increased a new ring is formed. Rather than recording yearly growth, these rings record king tides. Corals don't grow in air. Following the last (and every other) ice period, the sea rose. At the maximum extent of the last ice period the sea was about 120m below its present level. The last ice period extended for 125,000 years since the end of the Eemian interglacial. With various smallish ups and downs, the sea level steadily dropped to this lowest point of 120m below its present level. Coral reefs, of course, died as they were exposed and then a hundred thousands years of waves pounded on the shore, washing the corals away and leaving cuts into the land. Around 18,000 years ago the ice began to melt and sea level rose quickly (in geological terms) to its present level. During part of the transition to the present interglacial, sea level was rising as much as a meter per century. In tropical areas, corals grew to fill this 120m gap up to the surface of the ocean. It is estimated that the total area of coral reefs, world wide is 284,300 Square Kilometers. This figure times 1,000,000square meters per square km times 120 meters depth times 2.5sg for limestone times 60.6%Carbon dioxide in limestone divided by 1billion gives a figure of 5,174 gigatons of Carbon Dioxide sequestered in corals since the end of the last ice period. To put this into perspective the total Carbon dioxide in the atmosphere today is about 3000 gigatons. Corals are a significant sink for Carbon dioxide during a period of rising sea level.

Swamps
If the water in a swamp is sufficiently stagnant and there is sufficient organic loading to make the bottom of the swamp anaerobic, then all cellulose that falls into it is preserved. This includes all plant material and probably explains the formation of many of our coal measures. If the area is sinking, the organic material is buried, heated, gives up its volatile fraction and mostly carbon and mineral material (ash) remain. This process removes carbon from the atmosphere and slowly sends us toward another ice age.

Growing Forests
A mature tropical forest, at first glance, would seem to be a huge sink for carbon dioxide. After all, the rate of photosynthesis is huge. This is an illusion.   Once a forest has truly reached maturity, the rate at which vegetation dies and is oxidized equals photosynthesis. Mature tropical forests represent a large sequestering of Carbon but have no net effect on removing more carbon from the environment.

The carbon content of organic material, wood included, is about 50% of the dry weight of that material. If an organism is 80% water, 20% dry matter, then it's carbon content is about 10% (of its wet weight). The cutting down of the forests of the world has released a large amount of carbon into the atmosphere and this carbon would be rapidly taken up by letting the forests grow again. The only way a mature tropical forest will continue to sequester carbon is if it contains swamps as detailed above. Of course another way is to selectively log tropical forests (at a rate that doesn't imperil their survival) and to use the wood in long lasting buildings, furniture etc. New trees grow where the old ones are harvested and a tropical forest becomes a carbon sink.

New forests are a whole different ball game. At the maximum extent of the last period of glaciation ('glacial' as opposed to 'interglacial'), ice, estimated to have reached a depth of 3km covered most of Canada and a strip of America down to and extending beyond New York. In Europe, Germany, Poland and much of Russia and the UK were covered. Smaller ice sheets were found on high land right down to the equator (Mt Kilimanjaro, for instance). When the continental glaciers melted all the scraped-clean land was open for colonization (primary and secondary succession). Much of this land ended up clad in forests of giant trees with their sequestered carbon.

While we are at it, temperate forests are a different situation than tropical forests. When Tropical forests are clear felled, it is found that the soil is thin and is exhausted very quickly. This is due to the characteristics of humus. Humus is the final break result of organic material. Amongst it's other characteristics, it holds nutrients. Above about 25 degrees C, Humus breaks down. In temperate forests, the humus builds and builds, depositing more and more organic material in the ground. When temperate forests are clear felled, agriculture can carry on for far longer than in the tropics before the soil is exhausted. Temperate forests can continue to sequester carbon even after they are mature with respect to the total mass of live vegetation they contain.

Permafrost
During the summer, the top foot or so of permafrost melts and a range of dwarf, ground hugging trees, lichens and mosses grow. In the winter this freezes. Each year another small layer is added and the layer of organic material deepens. Permafrost areas are carbon sinks. Of course, the flip side is that thawing them with global warming is a source of carbon. It is estimated that the carbon stored in permafrost today is greater than all the carbon of all living things and is twice the carbon in the atmosphere. This would suggest that permafrost contains enough carbon to make about 6000 tons of Carbon dioxide. A portion of this carbon is in the form of methane clathrate which only needs a little warming to be released.

It is interesting to note (and counter-intuitive) that by covering an area of permafrost with a deep layer of insulating ice, the permafrost would be melted by the heat coming up from the earth. This deep organic soil would break down anaerobically giving up methane. This would likely collect at the bottom of the ice sheet as a methane clathrate, ready to be suddenly released when the ice sheet melted. Of course, the clathrate already stored in the permafrost would give up it's methane too which would seep up and be stored in the ice sheet.

Grasslands
Native grasslands have most of their biomass underground. This is an evolutionary adaptation to fire. Grass fires are intense but short and the heat doesn't penetrate far underground. With the introduction of nutrients from wind-imported-dust, grasslands in their natural state continue to grow upward and add more and more organic material. Organic material is ultimately stored in deep rich humus containing soil. This rich accumulation of nutrients was mined by farmers planting wheat and other crops and the carbon returned to the atmosphere. In pre-agricultural times, grasslands were carbon sinks.

Calcarious Oozes
Many planktonic animals such as foramanifera have calcarious tests. These sink form layers of calcium rich deposits on the ocean bottom up to about 4500m. Below this depth, calcium carbonate is soluable. These oozes get buried and are carried toward subduction zones by the ocean bottom conveyor system. Over geological time, these deposits of lime are recycled by volcanoes as Carbon dioxide. 60.6% of calcium carbonate is Carbon dioxide. When you think of deposits like the chalk cliffs of Dover it is apparent that calcarious deposits are a large sink for Carbon dioxide.

Cement
As cement is produced a large amount of CO2 is released. As it cures the Carbon dioxide is re-absorbed. All cement structures around the world are slowly absorbing some of the Carbon dioxide that was released when they were produced.

Carbon sinks are slow but inevitable. As they proceed, the Carbon dioxide content of the air decreases until snow can begin to accumulate from winter to winter. It would appear that with the amount of sequestered carbon we have introduced into the atmosphere by burning fossil fuels, the next descent into an ice period will be much delayed. It is interesting to think that we will have used up the world supply of sequestered carbon in the blink of an eye. We would expect the present interglacial age to last another 10 or 20 thousand years. With our Carbon output, let's say we have pushed the end of the present interglacial out to 30,000 years. If we still exist then as a species, our descendants will be faced with the onset of a glacial age with no large resources of sequestered carbon left to counter it.

Continental Glacier Meltdown

2011-09-15T13:16:00.000-07:00

Over the past 2.5m year ice age numerous glaciated periods (glacials) and warm periods (interglacials) have come and gone. The most recent continental glaciers melted away about 11,000 years ago leaving ice sheets only in Antarctica and Greenland. The end of glacials appears to be synchronous with one of the Milankovitch cycles; namely the variation in the tilt (obliquity) of the earth's axis. At the beginning of the present ice age which we are in the middle of, the cycle was 41,000 years. However over the past million years of the present 2.5 million year Glacial Age, only every third or so obliquity nudge has resulted in an interglacial. Glacials over the past million years or so have been lasting on the order of 100,000 years. Coincidentally with the melting of continental glaciers there is a sharp rise in Carbon dioxide

_{As suggested in a previous blog it seems unlikely that some sudden source of Carbon dioxide would occur exactly in sinc with the Milankovitch cycle. As odd as it seems it is more likely that the rise in CO2 is somehow the result of the melting. Of course, once sufficient CO2 is released, a run-away melting will occur.}

_{In a previous blog, I suggested that methane clathrates and carbon dioxide clathrates could accumulate under an ice sheet once it had thickened to a few hundred meters. The sources of methane and Carbon dioxide could be from coal measures, liquid and gaseous hydrocarbon deposits and shale beds as well as the decomposition of organic material buried by the accumulating ice. If the ice covered over an area of permafrost**, the methane stored in the permafrost could find its way to the bottom of the ice sheet. Ice sheets cause the depression of the land by about a third of a km for every km of ice added# and this might well act as a natural 'fracting', increasing the escape of such gases. All this carbon would be sitting there at the bottom of the ice sheet ready to be released if the continental ice sheet started to melt. If sufficient was released in a burst, the green house effect could lead to a feedback, melting more ice causing the release of more gas and causing more melting etc. This run-away greenhouse effects would only end when the ice sheet was all melted. Following the melt, the slow ongoing sequestering of carbon in the various carbon sinks would continue until it was possible for the accumulation of snow to start again.}

_{# The basaltic rock on which the continents float has a specific Gravity (SG) of just over 3. Hence a km of ice with a specific gravity of about 1 would push down the continent about a third of a km.}

_{**It is interesting to note that if snow is accumulating on an area of permafrost, the snow will insulate the underlying ground. The 0 degree contour at the bottom of the permafrost will move upward as geothermal heat melts it. Eventually, as the ice sheet deepens, all the permafrost, often rich organic soil and methane clathreate, will be melted.}_{The permafrost undergoing anaerobic break down and any already stored up methane* would be available to combine with the bottom layer of ice and form methane clathrate.}

_{*At present, it is believed that a great deal of methane is stored up in permafrost. As the level of 0 degrees** under the permafrost rose due to the insulating properties of a growing ice sheet, this methane would be released to accumulate at the bottom of the ice sheet. Undoubtedly, permafrost during the Eemain interglacial also contained considerable methane clathrate.}

_{** A slight complication to this scenario is that methane clathrate can exist up to 18 degrees C with sufficient pressure. In any case, once the ice was thick enough and the underlying ground warm enough, the methane would be released into the bottom of the ice.}

_{In this blog, I would like to suggest mechanisms which would explain why every nudge from the Milankovitch cycle does not end an ice age. Lets do a mind exercise.}

_{Consider for simplicity a large continent like Australia. It is shaped like a hockey puck, flat on top with very little slope in any direction. Enough carbon has left the atmosphere and become sequestered in sinks for snow to begin to last through the summer. Each year, some of the snow that falls lasts through the summer until the next winter. The process of going into a glacial is gradual.   The accumulation of snow can only proceed at the rate of precipitation in the area of accumulation minus sublimation and melting. The process is somewhat accelerated by the albedo effect. When a significant area is covered with white snow, incident light is mostly reflected back into space increasing the cooling.}

_{Snow occupies about 10 times as much volume as an equivalent weight of water but as the snow deepens, the weight of overlying snow on the bottom layers increases and air is squeezed out. By the time there is a hundred or so meters of snow, the bottom layers have been squeezed into ice with some inclusions of air. The ice at the bottom occupies about 10% more volume than an equivalent weight of water.}

_{When the ice is only a few hundred meters thick it just sits there getting deeper and deeper. The land is flat so it doesn't move down hill and there isn't enough pressure yet to squeeze ice outward. At about 300m depth, there is enough pressure at the bottom of the ice layer for clathrates to form. Any methane or Carbon dioxide which is coming from the underlying land combines with the ice and is trapped.}

_{When the ice has reached a km or so in depth, the pressure is great enough that ice begins to be squeezed toward the edges. Right in the middle of our hockey puck continent, there is no motion with respect to the underlying land. As you go toward the edges, the motion is faster and faster. Fast is all relative. Even in glaciated continents such as Greenland with 3 or so km of ice at the center, the motion at the edges is only a few to a few tens of meters per year and the motion is mainly in locations where the ice can force itself down a valley where the slope helps the flow. Averaged over the years, ice can only fall off the edges at the rate that it accumulates on top. Since continental glaciers reach depths of at least 3km, clearly, less ice was expelled than has was accumulated over the formation of the 3km deep ice sheet.   At some point, as the ice thickens, the rate of loss of ice will equal the rate of accumulation. It is likely that toward the middle of the continent, the ice doesn't move at the bottom relative to the land but is rather squeezed out of the middle layers of the ice. Toward the edges, ice would be moving over the ground.}

_{Each Milankovitch nudge will probably result in some melting. If it is correct that clathrates have been collecting at the bottom of the ice sheet, this will cause an increase in the output of green house gases and the thicker the ice the faster this might occur due to faster rate of spread caused by the thicker ice. Also, the faster the ice is moving, the further into a melting climate the ice will be pushed. This may be the explanation for the start of an interglacial only every few Milankovitch nudges. Presumably a certain amount of green house gas is necessary to cause a run away melting. The older an ice sheet, the more clathrate could accumulate at the bottom and the thicker the ice sheet, the faster its borders are moving outward. Therefore, the older and thicker an ice sheet and the more clathrate it has accumulated, the greater the chance of a run away melting when an obliquity nudge occurs.}

_{Another factor which might be relevant is the heat coming out of the earth. Although it varies widely from location to location, the temperature increase as you go down into the earth at about 25 degrees C per km. Put a layer of ice on the ground and this heat has to work it's way up to the surface of the ice. I haven't been able to find the factor for heat transmission in rock and in ice in order to compare them but for the sake of the argument let's say it is the same. Let's also assume that the average temperature at the top of the ice sheet is -50C. If the ice is 1km thick, the temperature at the bottom of the ice would then be -25degrees. If the ice is 2km thick it would be 0 degrees. If three km thick, +25 degrees. Of course in this latter case this wouldn't be so. The heat comes in contact with ice which melts at 0 degrees and absorbs a lot of heat doing so (latent heat of fusion). Have a look at this link (maps half way down in the PDF file) which show calculations for the basal temperature of the Antarctic Ice sheet.}

_{The result is that with over 2km of ice depth and given some time to reach equilibrium, there should be water at the bottom of the ice sheet. Here we run into another wee codicil. If as was suggested in a previous blog there has accumulated methane clathrate at the bottom of the ice sheet, it can stay frozen up to 18 degrees centigrade with sufficient pressure. Whatever the actual case, the general principle is that with a sufficiently deep ice sheet, the bottom layer should be melting. This may be another part of the explanation as to why only every three or so nudges by the Milankovitch cycle sets off an interglacial period. A sufficient depth of ice has to first collect to cause heat from the earth to liquefy its bottom and increase its horizontal movement on this lubricating layer . So what sort of evidence would support this hypothesis.}

_Test
_{A) at the bottom of present ice sheets, the temperature should be around 0 degrees.}
_{B) There should be lakes below deep ice sheets where the topography allows.}
_{C) It should be possible in some locations at least, to detect methane and possibly Carbon dioxide being evolved from the edges of ice sheets where they are melting.}
_{D) Where ice sheets exit into the ocean and are at least 30m above sea level (and hence their base is 300m below sea level) there may be clathrates on the bottom layers in some locations.}
_{E) Since the carbon released from the bottom of a 100,000 year ice sheet would be "old carbon" (in other words, carbon depleted in C14) There should be a dating anomaly from the end of the last ice period, 11,000 years ago*. This sudden influx of old carbon into the atmosphere should make wood, growing after the melting, look older. One might see successive growth rings from a tree looking older and older despite the fact that they each successive growth ring is younger than the previous one. A place to find suitable wood might be in tropical swamps where a log had sunk into the anaerobic mud.}
_{F) if the bottom layer of an ice sheet is composed of clathrates, you might find that even though a core found solid ice right to the bottom of the core, the temperature could be above 0 degrees. Clathrates can exist up to 18 degrees centigrade with sufficient pressure. In fact, you might find a liquid layer at the bottom of the ice with a clathrate layer below the liquid layer.}

_{Of course, if the bottom of the glacier is moving horizontally at locations where there is permafrost, it will be scraping off the permafrost layer and carrying it toward the edge of the ice sheet with it's entrained load of clathrates. If the ice sheet is frozen to the base and is only moving laterally by the middle being squeezed out, the clathrates will only be released when that part of the glacier melts.}

_{A last contributor to sudden melt down and release of Carbon dioxide is Moulins. Moulins are vertical shafts which are caused by melt water pouring down fissures in continental glaciers. At present this phenomenon is best observed on the Greenland ice sheet where there is increased melting each summer. Pools of water form on the surface of the ice and if they find a fissure, they pour down to the bottom of the ice sheet. This water has to come out somewhere and presumably it will find its way out at the edges of the ice sheet. It would be expected that it would carry with it the material from the bottom of the ice sheet. Part of this would be the clathrates that have accumulated there. At each Milankovitch nudge there would be expected to be surface melting and a wash out of some of the bottom material. If great enough, this would result in a run away green house effect.}

_{All the above scenarios depend on the supposition that clathrates will accumulate under continental glaciers ready to be released when the glacier melts. The longer the glacier exists, the greater the accumulation should be.   If this is indeed happening, it should be observable under our two remaining continental glaciers on Antartica and Greenland and even possibly Iceland.}

_{*At a pinch, carbon dating can go back 50,000 years. Hence it would be perfectly useful for dating objects from the end of the last glacial but wouldn't extend back to the previous interglacial which was 125,000 years ago.}

_{In summary}
_{The older and thicker an ice sheet, the more unstable it should be. This may be due to:}
_{1) Higher temperatures at the bottom of thicker ice sheets than more shallow ice sheets due to geothermal heat being insulated from escape due to the insulating properties of the ice. At a sufficient thickness a layer of water at the bottom of the ice sheet would accelerate its flow outward.}
_{2) A greater accumulation of carbon in the form of clathrates the longer a glacial lasts and hence the larger available green house effect if the ice sheet starts to melt.}
_{3) A greater speed of spread at the edges of an ice sheet, the deeper the ice is, pushing ice into geographical areas where it will melt. If this ice has got a bottom layer of clathrate, this will be entering the environment. Above some critical amount of carbon added to the atmosphere, a run away green house effect would occur. A nudge by the Milankovitch cycle would release more methane from a thick ice sheet than a shallower one.}
_{4) Outwash of bottom material by surface melt and Moulins at each Milankovitch nudge. The longer the ice sheet exists, the more carbon there should be available to be washed out.}

By by Coral Atolls

2011-09-12T23:59:00.000-07:00

There is much to do in the press about the immanent demise of coral atoll islands due to rising sea level. While global warming could well destroy coral atolls, it won't be due to the rise in sea level. Consider this as a mind exercise.

The present ice age started 2.5million years ago. It has had numerous glaciated periods (glacials) and warm periods (interglacials). The interglacial before the one we are in now was the Eemian.    It was 125,000 years ago. That is 62 times as long as from now back to the Roman empire. At the end of Eemian interglacial, sea level started to fall as more and more water was deposited on the continental glaciers. At its greatest extent, sea level was 120m below its present level. Of course the corals that were growing within 120 meters of the surface of the ocean during the Eemian interglacial were killed as sea level dropped. Without live corals to resist the effect of waves, these islands would have eroded. They may well have eroded down to the level of the low tide mark, 120 meters below present low tide. A lot of erosion can occur in 100,000 or so years.

At the beginning of the present interglacial period, some 11,000 years ago, sea level rose quickly as the continental glaciers melted. Today, coral reefs all over the world are at about the current low tide level and Atoll islands are a few meters above high tide. Clearly, corals have grown as the ice melted and sea level rose. The corals have filled in the 120 or so meters between the low tide level at the maximum extent of the recent glacial to the present low tide level*. The lesson is, as sea level rises, the restraint on coral growth is removed and they grow up to the current low tide mark.

* Incidentally, the Calcium carbonate of which coral skeletons are made are a tad over 60% Carbon dioxide!!

Now if corals are limited by low tide, why are the coral atoll islands meters above the level of the growing corals.

The answer is Parrot fish. Parrot fish eat corals to get at the polyps. They poop out coral sand. A parrot fish typically produces 90kg of sand per year. A thousand parrot fish in a lagoon and you have a production of 90 tons of sand per year. The sand is moved by wind, currents and waves and collects where the total energy is low. Once the sand forms a bit of land above sea level, bird transported seeds can germinate and the resulting plants will dampen the force of the wind crossing the island. This results in an increased catch of wind blown sand on the island and a root system to retain what sand there is. Once there is a bit of an island above the high tide, rain will accumulate in the soil of the island, floating as a lens above the sea water. Varieties of plants, which need fresh water can then grow.

So it is unlikely that sea level rise will destroy the Atolls. In fact some satellite pictures show them growing. The real problem that climate change will cause is primarily due the increase in Carbon dioxide. Two effects are at play here. As the sea becomes more acidic due to the absorption of CO2, it becomes harder and harder for Calcium carbonate depositing animals to extract the calcium from sea water. A bit more acidic than that and the shells and corals will start to dissolve.

The second problem which could come from climate change is temperature rise*. The lethal temperature for corals is only just above the temperature of maximum growth. If either acidification or temperature rise occurs, there is nothing that the people of the coral atolls can do. Without live corals and parrot fish to provide a constant source of coral sand, the islands will erode.

Jason Buchheim reports
As reef building corals live near their upper thermal tolerance limits, small increases in sea temperature (.5 –1.5 degrees C) over several weeks or large increases (3-4 degrees C) over a few days will lead to coral dysfunction and death. Anomalously high sea temperatures have often been reported in the Caribbean-wide series of bleaching events that occurred during 1986-88, leading to hypothesis that global warming was having an effect on the coral reefs in this region.

*If climate change results in an ice free Arctic ocean, it becomes a massive solar panel and could rapidly melt the Greenland Ice Sheet. If fresh water pours into the sea sufficiently fast, this could shut down the ocean circulation system. This system, as it warms northern Europe, cools the tropics. Stop this cooling and tropical waters could reach a lethal level for corals.

However, Short of global acidification or a rise in the temperature of the tropical oceans, the health of the coral atolls is in the hands of the local people.

The three basic principles are
A) do nothing that damages corals,
B) never kill a parrot fish and
C) make sure the islands are vegetated so that any wind born sand across the island will land on the island and the root system will stabilize it.

More specifically:

* Don't use fishing methods that damage coral reefs
* Don't use chemical fertilizers on land. They can damage corals when they seep into the sea. If land sourced nutrients are sufficient they can lead to phytoplankton blooms that shade the zoozanthellae of the corals.
* Don't allow sewage to flow into the sea or into the water table unless it is fully treated so that the nutrients are removed. Primary treatment is not sufficient.
* Don't use pesticides or herbicides as they can harm sea organisms.
* Don't over utilize the fresh ground water. The vegetative cover of the island
depends on this fresh water
* Never ever ever harm a parrot fish
* Leave the rabbit fish (Siganid sp.) alone too. They eat algae that can smother corals. (third fish down in the link)
* Reintroduce the system of Tapu (taboo) in which large sections of the reef are off limits to utilization of any kind for a number of years. Every few years the area is changed. Fishing in areas not under Tapu will be greatly improved as a bonus.

Short of a global situation that kills the corals, the fate of the atolls is in the hands of the local people. The elephant in the room, of course is population control. All the strains on coral atolls mentioned above are exacerbated by over population. Atolls are microcosms of the situation the whole world is in at present. With stable or decreasing numbers of people on coral islands, all the bad effects decrease to manageable proportions.

By the by, an interesting experiment to try would be to plant some mangroves. If they grow, they will catch sand from the currents which will further increase the available real estate and will protect the land during hurricanes. Mangrove areas are also apparently great breeding grounds for fish. Just a thought.

Releasing the assets

2011-09-01T12:58:00.000-07:00

Releasing the assets of Libya. Give me a break. You froze them with a stroke of the pen (or was it with the push of a button). Now you are having trouble releasing them!!! You europeans (small e) have been very comfortable holding huge amounts of Libyian oil money for the Colonel. Propped up your economy, didn't it. Now if you release the money, it will be a run on your bank. Don't have the money, do you. And what about Switzerland - the land of chocolate and coco clocks. When they hold money stolen from the people of a country by corrupt leaders they just sit on it. Just look at the time it took for the people of the Philippines to get any of the money back that Markos stole. I bet Qaddafi has lots of money squirreled away in Switzerland. I bet Libya won't see any of it any time soon.

Continental Glaciers and CO2

2011-08-25T13:44:00.000-07:00

tin
The latest ice age started a little over 2.5million years ago and consisted of numerous glaciated periods (glacials) in which continental glaciers covered greater or lesser parts of Eurasia and North America. These were interspersed with interglacial periods (interglacials). Early in the present 2.5 million year glaciated age (Quaternary), the severity of the icy periods was relatively mild (compared to recent periods) and lasted about 41,000 years. Around a million years ago, ice periods began to be more severe and to last around 100,000 years. The end of the glaciated periods appears to be synchronous with one of the Milankovitch cycles, namely the variation in the tilt of the earth (Obliquity) which has a 41,000 year cycle. The recent, longer glacials we have had for the past million years are still synchronous with the Milankovitch cycle but only every third or so Milankovitch nudge manages to kick the world into an interglacial.

Some exquisite work done by Larry Edwards et. al. of the U of Minnesota using corals and stalactites# has dated the ends of the ice periods much more accurately than previously and allowed a much clearer picture of when the glacials and interglacials within the latest ice age occurred. It is now clear that Carbon dioxide concentration in the air rises steeply as each glacial ends and an interglacial starts. Carbon dioxide then is sequestered, slowly declines in the atmosphere and a new continental glaciers begin to grow.

#See New Scientist 22May 2010 p32

Despite the great improvement in dating, it still isn't clear if the sharp rise in Carbon dioxide precedes the end of an ice age or is a result of it.   It seems unlikely, though, that some source of Carbon dioxide suddenly increases, triggering the beginning of an interglacial exactly in sinc with the Milankovitch cycle. There are, however, a number of feasible scenarios that could explain the rise in Carbon dioxide as a result of the melting. Dating is not precise enough yet to definitely establish which came first This blog explores some of the possible mechanisms by which melting ice could give rise to massive increases in CO2

Another question is why the ice started melting with the second or third nudge from the Milankovich cycle but wasn't triggered by a couple of previous ones. One theory is that as the ice accumulates, it pushes down the land and hence the top of the glacier is at a lower altitude. Since the basalt basement on which the continents float has a specific gravity of about 3, when you add a kilometer of ice with a specific gravity of about 1 on top, it will sink a third of a km down. Put around the other way, every km of ice you add raises the top of the ice by 2/3 of a km. The sinking explanation seems a tad unlikely. The sinking takes time and even now, 11,000 years after the end of the most recent period of continental ice, land is still rebounding. One tends to think that there has to be more to what triggered the end of an ice period and some ideas will be presented in a future blog. This blog is concerned with which mechanisms could have led to a spike in Carbon dioxide once the melting had started. Such sources of Carbon dioxide would keep us in an interglacial period until various sinks had time to remove sufficient carbon from the air to allow snow to once more accumulate.

This blog is speculation. Like any hypothesis, one looks for tests to apply to see if they support or weaken the argument. For instance, one of the predictions of Einstein was that light from a distant star would be bent as it passed by a heavy object like the sun. This was tested during an eclipse of the sun. Stars that were made visible very close to the sun were seen to change their apparent position. The change was consistent with Einstein's predictions. While this was not unequivocal proof of Einsteins theory of gravitation, it did strengthen it. In this blog, after suggesting a result, I will suggest a "test" or "observation" which would strengthen or weaken the hypothesis.

Below are some possible sources of carbon dioxide caused by the melting of the Continental ice sheets.

Volcanoes
It is well known that volcanoes release large quantities of Carbon dioxide. The source of at least some of this carbon dioxide, is the calcium carbonate that is heated when one tectonic plate sub-ducts under another, carrying with it the calcium carbonate that has accumulated on it. The accumulation of Calcium carbonate on the bottom of the ocean is one of the sinks for Carbon dioxide and volcanoes recycle this carbon back into the atmosphere.

The volcanism which has been experienced since man has recorded such things has been relatively mild. However there is ample evidence for giant caldera forming volcanoes such as Yellowstone in America, Lake Toba in Indonesia and Lake Tapo in New Zealand. There is also evidence of massive volcanism of the sort that created the traps in India and South America. There is, however no evidence that any of these giant events occurred in sinc with the end of the numerous glacials over the present ice age.

However the following could have happened. Many magma's contain a lot of dissolved CO2. Just like in a bottle of soda, pressure keeps this gas in solution. Release the pressure and the gas begins to come out of solution. With three km of ice lying on top of the land, the added pressure would have an equivalent weight to about 1.2km of continental rock (sg 2.5). Heat continues to be produced by the earth, rock continues to melt but this added pressure keeps the lid on. Remove this cap and it would be like taking the lid off a pressure cooker just after it had been removed from the stove (don't try this at home). It could be that the melting of the glaciers let loose a lot of bottled up volcanism and with it a lot of carbon dioxide.

Test
Ancient volcanism is visible in core samples from the bottom of lakes and oceans and sulphate from volcanism is captured in ice cores. If there was increased volcanism at the end of the last ice age it's signature might be visible in such cores.    In addition, the carbon that comes out of volcanoes will be old carbon. That is to say, carbon that is poor in C14. If carboniferous samples are available with independent dating from the beginning of the present interglacial, a C14 anomaly might be seen for he end of the recent glaciation.

Suppression of Phytoplankton
Variation in Carbon dioxide in the atmosphere over a year is about 7ppm. At present we have a yearly cycle of 8ppm up and 6ppm down as we add fossil carbon dioxide. Imagine if each rise was not followed by a fall.

Phytoplankton growth depends on sunshine and a supply of nutrients. If it has both, phytoplankton grows at phenomenal rates. Phytoplankton take up Carbon dioxide to build it's substance.To get an idea of the magnitude of this effect, consider the productivity of Anchovy in the waters off Peru in La Nina years when the upwelling of nutrient rich water is in full flow. This fisheries provides much of the fish meal for the livestock trade of the world. When you consider that Anchovy are at the third tropic level (they eat zoo plankton which eat phytoplankton) and that only 10% of the mass from one tropic level is captured in the next level, it is clear that the production of algae is 100 times the production of Anchovy.    At this site, it is noted that the rate of increase in carbon dioxide today depends on the El Nino - La Nina cycle. We are putting masses of Carbon dioxide into the atmosphere and as shown by the analysis from ManaLoa, it increases spasmodically, averaging about 2ppm per year. When there is upwelling off the coast of Peru, carbon dioxide increase is less than when the upwelling is not occurring. This is a small area when compared with, for instance, the whole Atlantic ocean. Imagine the effect of greatly reducing carbon dioxide uptake by phytoplankton over much of the ocean. Here, instead of invoking a source of Carbon dioxide as the ice begins to melt, we have the suppression of a sink. Same effect. So how would it occur.

At present, much water is evaporated in the warm climate around the Gulf of Mexico but the resulting saltier water is warm enough not to sink. It flows on the surface northward in what is called the Gulf Stream. As it travels north, it cools and eventually is heavy enough to sink. Added to this is the effect of the freezing of sea water in the North Atlantic and Arctic ocean. Freezing crystallizes fresh water ice from the sea water leaving behind cold saltier water. This also powers the sinking of cold surface water. The cold salty water from both of these sources flows south along the bottom of the ocean. The flow rate of the Gulf Stream is estimated at about 30million cubic meters per second so the return flow will be if a similar magnitude.

As masses of ice begin to melt the resulting fresh water flows into the ocean and floats on top. This, it is believed, would shut down this system of sinking water and stop the Gulf stream. The flip side of sinking water is that water has to rise somewhere. When the Gulf stream is operating, the heavy water flowing southward along the bottom of the ocean picks up nutrients from the rain of organic material from the surface. Somewhere in the oceanic circulation system, this water surfaces. The primary productivity powered by this system must be enormous and in fact, far greater than the Peru upwelling. Shutting it down would eliminate this primary productivity and hence its absorption of CO2.

In addition to fresh water pouring into the north Atlantic from the St Lawrence and other coastal rivers, the Mississippi system would transfer masses of water into the Gulf of Mexico. It could well be that the melting of the continental glaciers would, to a large extent, stop the overturn of the oceans. A similar situation would occur around Eurasia with the melting of her continental glacier.

Test
Signatures of this may be present in ocean bottom cores. One might find a great reduction in fish scales in mud cores from where the water used to return to the surface. There also might be reduced (chemically speaking) layers of mud if the bottom of the ocean became anaerobic due to the lack of circulation.

Release of Clathrates
Clatrates are curious substances. They form when water and certain gases are mixed under pressure. Here we are concerned with methane clathrates. When methane is mixed with water, it forms an ice. With sufficient pressure (4000m of sea water), a methane clathrate (methane hydrate) can form at up to 30 degrees centigrade. The higher the pressure, the higher the temperature at which they can form. The minimum pressure needed is the equivalent of about 300m of water and at this pressure, methane clathrate will form at a couple of degrees above freezing. Of importance for our purposes is that once a few hundred meters of ice have accumulated, the conditions are created at the bottom of the ice for the creation of clathrates. A clathrate contains considerable amounts of methane. A liter of methane clathrate, for instance, can contain as much as 160l of methane (measured at STP).

The question then becomes, are there sources of methane that would accumulate as clathrates under a forming ice cap, once the ice thickness had reached a few hundred meters deep. If there are, all this carbon would be released when the ice sheets melts. This would put the powerful green house gas, methane, into the atmosphere. The half life of methane is about 7 years. It combines with the oxygen of the air and forms Carbon dioxide. On a geological time scale, the methane is instantly converted to carbon dioxide. However, during this transition period, green house warming could be strongly accelerated by the methane over the period of melting. There are a number of such sources. For instance:

Methane seeps from coal measures, shales and oil deposits. Not only do such formations contain considerable methane but as the ice sheet pushed down on the continent, this pressure would have put strain on underlying rocks and possibly opened up cracks, allowing methane to escape in sort of a natural fracting. Such methane escape happens all the time when there is no ice cover but the carbon is incorporated into the biosphere as it enters the air. However, with an ice cap, all this carbon would accumulated over the duration of the ice cap to be released suddenly when the ice melts. A hundred thousand years of geological methane seep could amount to a considerable amount of carbon ready to be be released rather suddenly.

A second source of methane is the decomposition of organic material. Unlike a valley glacier which is constantly moving down a valley and scraping the rock bare underneath it, a continental glacier just sits on the land until it is so thick that it starts to be squeezed outward. A lake, a swamp or a thick deposit from a tundra can be capped and if the land is reasonably flat, there will be little if any movement horizontal movement of the bottom layer of ice relative to the underlying land. With no contact with the atmosphere, oxygen in these organic rich environments will be quickly used up and anaerobic methanogenesis will start. Over the hundred or so Milena that the ice cap is extant, all this methane should be accumulated as clatrates at the bottom of the ice sheet.

Incidentally, this may explain a possible carbon source to help trigger the melt of the glaciers. Once the ice is thick enough, it flows like taffy. At the outer edges of the ice sheet, the ice would be moving horizontally with respect to the ground. Once the ice is thick enough, there could be considerable outflow of methane from the bottom of the ice sheet.

It is interesting to note that Carbon dioxide also produces a clathrate under similar conditions, so any source of Carbon dioxide being released from the earth under the ice would also likely form a clathrate which would be released as a continental glacier melted. The formula for CO2 clatrate is CO2.6H2O. Sources that could release Carbon dioxide are basically only volcanic action. Any disintegrating organic material would quickly shift to producing methane as soon as the residual oxygen had been used up.

Test
It might be possible to detect methane or carbon dioxide when ice coring in Greenland or Antarctica reaches bedrock. A hole to the bottom of the ice 'transmits' one atmosphere pressure to the bottom of the hole and both methane and Carbon dioxide clathrates break down and give up their gas at atmospheric pressure. It also might be possible to detect methane or carbon dioxide at the edges of continental ice sheets.

A further source would be permafrost. At present is it believed that considerable methane clathrate is stored in permafrost. As odd as it seems, a cover of ice insullates this permafrost from sub zero air and geological heat would then begin to melt the permafrost from the ground up. It would not be expected to find permafrost under an old ice cap. The warming of the permafrost would liberate its store of methane which would then accumulate at the bottom of the ice sheet, ready to be released when the ice sheet melted and thus contribute to a run away feed back loop.

Corals
There is a body of opinion amongst scientists that if the tropical oceans of the world warm up by only a few degrees, corals will eject their zooxanthellae, stop growing and die. Whether or not this will occur remains to be seen (probably fairly soon). If so, it could be a further reason for the observed rise in atmospheric CO2 at the start of interglacials. Just like the suppression of ocean-overturn, the cessation of coral growth is the shut down of a sink rather than the start or increase of a source. The skeletons of coral are made of Calcium Carbonate; Calcium Oxide and Carbon dioxide. Calcium carbonate is 60.6% Carbon dioxide by weight. Corals and any other marine organism that makes a skeleton of Calcium carbonate sequester carbon dioxide from the environment. So why would tropical waters be warming up as an interglacial started.

This is related to the shut down of the ocean circulation. The Gulf stream, which warms Britain and Northern Europe also cools tropical areas. Without this constant flow of heat northward, tropical waters would be expected to become warmer. Oddly enough, this could occur just as the seas are getting deeper and the possibility opens up for corals to undergo a huge growth spurt due to the surface of the ocean no longer constraining their growth.

Test
In the coral record from the end of this latest glacial period, one might see a check in coral growth and possibly a change to species that grow better in slightly deeper water followed by a strong upsurge in growth as soon as the ice has all melted and the Gulf Stream re-established itself.

Note that once the ice has all melted and the growth of corals starts again, the potential uptake of CO2 is immense. The sea will have risen a hundred meters or so and the corals will then grow back up to the surface of the sea. At present corals extend right up to the low tide level. If the 125,000 years of the last glacial resulted in the corals being eroded to sea level, all this top layer of 120m of coral has grown since the last ice age finished 11,000 years ago.

Test
In locations where coral material is more than 120m deep, there should be an age discontinuity at about 120m. This would be visible using the uranium dating method.

In summary, we have Four possible sources of the observed spike in Carbon dioxide at the beginning of an interglacial as continental ice sheets start to melt. These are:
a)the upsurge of ice-suppressed volcanism,

b)shut down of oceanic circulation and hence photosynthesis,

c) the release of accumulated clathrates under the ice and

d)the shut down of coral growth.

Each of these would create a feed back global warming which would further encourage the melting of the ice. Once all the ice had melted, carbon dioxide sinks would slowly remove this gas from the atmosphere and we would gradually head toward another continental ice sheet.

We are now seeing a further act in this saga. It seems likely that within a decade or two, due to man's efforts to put sequestered carbon back into the atmosphere, there will be a virtually ice free Arctic ocean. The Arctic ocean then becomes a huge solar panel absorbing heat from the sun. Just on the edge of this ocean on Greenland is the last remnant of the northern hemisphere continental glaciers. If we have sudden melting of this mass of ice, we may see, in miniature, the repeat of the end of an ice age. It should be interesting.

American Debt Chrisis

2011-08-14T20:58:00.000-07:00

All over the world, with impending economic and ecological crises rolling down the turnpike toward us, people are withdrawing from dependence on outside support systems and trying to localize as much as possible. This is seen in farmers markets, in more and more people putting in vegetable gardens and in groups of people working to revive some of the skills of our grandparents in preparation for what seems inevitable.

All over the world, people are revolting against dictators who have been controlling their lives for generations. Often these dictators have been supported by western powers who used the bribed dictators of these countries to keep their own people under control#. It is an old system used for Milena by empires and perfected by the British. The Americans are now the main proponents of the system with China on a rapid learning curve. If you note which countries are been controlled this way, first are countries with oil resources and then countries with any other resource that the west covets.

#Read John Perkins books Hoodwinked, Confessions of an Economic Hit Man or History of the American Empire.

A new wind is blowing through the world and some form of democracy is in the offing for countries which can throw off their dictators. Already South of the border, leaders are coming to power that are not in the pocket of the USA. Castro was the first and look how pissed of this made America but more and more are following. The Arab world is rapidly following suit. The West must be dreading the result. It is much easier to threaten and bribe a single dictator who then passes some of the largess to concentric circles of sycopanths around him. These henchmen realize that their bread and butter depends on the well being of the central dictator and so support him in suppressing their own people. Democracies, on the other hand, are very unpredictable and result in many more eyes looking at the scams that are underway. They also change their government on a regular basis and the new guys in power can simply change policy. Look how the USA itself behaves. Any agreement made with them is only good as long as the party that made it is in power and sometimes not even then.

Throughout this period of exploitation, the West has got used to an artificially puffed up life style. If any western country only used the resources within their national boundaries, they never would be able to afford to live the way they do. Take just oil in America as an example. Peak oil in America occurred in 1970 Imagine America with access to only a fraction of the oil they use at present. In fact they would only have a very very small fraction of the oil they use today. America made a conscious decision to import oil from overseas to preserve her own stocks. Without overseas supplies, by now she would have sucked her own fields dry. Europe is nearly as bad and of course did the same thing before America took over. You could say that America was the winner of the second world war, England the looser.

In addition, as resources have become scarce, and hence more expensive, the West has borrowed copiously to support the life style to which they had become accustom. Not for most westerners, living within their means. Usually they borrowed from the very countries that they buy their oil from resulting in these countries now owning America. Now they are deep in debt doodoo and the whole edifice is crumbling.

Add to this the intensifying competition for the resources of the world as China, India and a whole host of South American and Asian countries start to develop. Not only do they not part with their own resources so easily any more but they are competing with the west for the resources of the diminishing number of corrupt dictatorships.

The result of all these converging factors is that more and more, countries, especially ones which have become used to exploiting cheap resources from other countries, are going to have to withdraw within their own borders and find the resources they need at home. And............ the greater their excesses, the further they have to fall. (guess who)

Arguably, energy is the most vitally needed resource and you would think that the solution to this problem would be relatively straight forward. This is especially so for countries with huge solar, wind and hydro resources. The USA should have no problem in replacing fossil fuels with wind, hydro and solar generated electrical energy. If she change over to electric cars and electrified public transport, the major part of America's oil use would be eliminated. America's main problem is the strength, sense of entitlement and sheer corruption of her vested interests. The sense of entitlement of individual Americans rivals that of her bankers. Remember the bankers. They are the lovely people who brought us 2008 and then when our money bailed them out, awarded themselves bonuses only slightly less than in 2007. The corporatocracy and the banks show precious little loyalty to the country that spawned them and which provided the infrastructure in which they operate; infrastructure derived from the taxes of mom and pop worker. Have a look at this link. It details just how uneven the distribution of wealth is in America.

Behind all this and underlying it is a big elephant in the room. Throughout the recent economic crisis, many intelligent commentators have stated again and again that the only truly worthwhile way to get us out of our problems is to grow the economy. I'm sorry guys but at some point you have to wake up. As a first approximation, when the GDP of a country increases, the use of resources increases in lock step. In fact, with many of the developing countries, the use of resources, such as water increase faster than the increase in GDP. I'm sure you are way ahead of me by now. Almost every country in the world is running out of water (and other resources) and besides, the more we use, the more we deny this water to the very ecological web of life that supports our life on earth. Eventually, and hopefully before we are forced to, we have to shift over to a sustainable way of life. Many people use this word but ignore that the synonym for "sustainable" is "not growing".

Not a lot of hope for us, is there, without a cataclysm first. Such a pity that our long term self interest doesn't trump our short term self interest. As a group, we are grasshoppers, not ants.

Bonuses

2011-07-22T16:09:00.000-07:00

An item on National Radio NZ yesterday (22/07/11) stated that the sum of bonuses paid in the UK over the past year was 13.6b. That is 13,600,000,000 pounds sterling. This link says that it was 14b, not 13.6, and that this was just to the employees of the banks. It further says that this sector (the banks), which employees 4% of the people in the UK are getting 40% of the bonuses, which are paid in the UK. Doing a bit of math (14/0.4) it would suggest that the total bonuses paid in the UK equaled 34billion pounds sterling. I find it hard to get my head around big numbers like these so I am trying to get a handle on what it means.

Now the population of the UK is just below 62 million and the average wage is 500 pounds per month or 6000 pounds per year. Unemployment is 2.45 million. The GDP of Great Britain is $2.17trillion US or in today's money, 1.33 trillion pounds. That is 1,330,000,000,000 pounds sterling. The national debt of Great Britain is 0.8 of GDP or 1.06 trillion. Lets look at these figures in a few different ways just to gain some perspective. The figures are too large to grasp as they are.

How many of the unemployed could be employed at the average UK wage if we used the bankers bonuses to pay them.

We divide the 14b pounds of bankers bonuses by the average wage of $6000 pounds a year. Answer - 2.3m. That is just short of the 2.45m that are reported to be unemployed.

How many of the unemployeed could be employed at the Average UK wage if we used all the bonuses paid in the UK

We divide the 34b by 2.45m unemployeed. Answer - 13.8m or far more than are unemployeed.

What wage could all 2.45m unemployed be receiving if we used the bankers bonuses.

We divide the 14b by 2.45m. Answer - 5,714 pounds per year - just under the average wage.

If we used the bonuses of the banks to pay off the National debt, how long would it take,

We divide the national debt of 1.06trillion by the 14billion pounds of annual bonuses, Answer - 75 years.

How about if we used all the 34b of bonuses to pay off the national debt.

We divide the 1.06trillion by 34billion. Answer - 31 years.

Now I don't know what you think about bonuses to bankers but here is my take. Firstly, these so called guardians of our economy; these people who produce nothing of intrinsic value and simply transfer money around the place so others can produce; these people who skim off some of the money every time it passes through their sticky little fingers, have shown themselves demonstrably and conclusively to be incompetent.

It would be reprehensible but understandable if they had seen the looming economic crisis and had positioned themselves economically to make a killing from it. Not hard. You liquefy all your assets (turn them into cash) and then buy them up following the crash. They didn't. they didn't even understand the likely results of their actions. They are totally economically incompetent.

Then they are incredibly venal. The very crisis they caused by pushing more and more credit on the public (toxic mortgages, for instance and ever increasing credit card limits) so that they could rake off a commission from every transaction caused the crash. We bailed them out. Money from our taxes was put into the banks so that they wouldn't fail. We ensured that they would continue to have jobs ( we were not so lucky) and what did they do. They used our money to award themselves obscene bonuses just as they did before the crash.

We, the public, at least, showed a modicum of good sense. We stopped buying. That kept inflation from going wild as various countries practiced quantitative easing (printing money). We paid down debt (if we still had a job) instead of buying. While that kept inflation in check, it put the squeeze on our businesses who had to discount heavily in an attempt to get us to part with our cash. Now we face a further insult.

All that quantitative easing is potential inflation; inflation just waiting to happen. In essence the money supply equals the sum of all goods and services. If you have more money and still the same pool of goods and services, the more you print, the less each dollar or pound is worth. That's inflation. Do you have a savings account. The numeric amount of money in the account won't change but it's buying power will. It is a stealthy way of stealing money (buying power) from your bank account without ever touching it. You are being robbed without any need to point a gun.

I haven't yet got the figures for the US of A but I'll do the same calculation for them. I can't help wondering where these jokers get their amazing, unexamined conviction of their own self entitlement. They produce nothing, gamble against each other and against us, bring down the economy produced by hard working people and then in the very year that the whole edifice crumbles, award themselves fat bonuses from the bail out we provided.

Solar Energy Quesions

2011-07-02T14:49:00.000-07:00

The cost of solar panels is decreasing. I have seen advertisements which talk about $1.75US and even $1.50US per nominal watt* (July 2011). We are getting close to the magic, oft-quoted figure of $1.00US per watt which is said to be the figure at which solar becomes competitive with conventional energy generations.

*Solar panels are rated by the number of watts of power# they will generate when the rays of the sun are shining directly at a right angle to the panel from a clear blue sky. This is their "nominal watt rating"

#A Watt is a unit of power. It is the rate at which energy is produced. A 10 watt panel if it produced energy for an hour will produce 10 Watt hours. A watt hour (or a kilowatt hour) is a unit of energy. Some people call a kWh a "unit".

I'm trying to get myself educated as to the inns and outs of solar power in preparation for the magic day when panels sell for a dollar per watt. I'll put down the questions and then put in answers as I get them, either from my own reading or from responses from people who are knowledgeable in the subject. If you want to put in an answer (or a question), put them in comments and I will put them in the body of the text. I'm only considering a grid connected system. The cost of batteries is just too expensive at present.

In no particular order:

Panel Shading
### With early solar panels, if a few cells were shaded, they acted as resistors and were often burnt out by the operating cells in the panel. Diodes inserted in the panels solved this problem but the diodes themselves reduces the power output of the panel. In addition, with present panels, if you have 10% of the cells shaded, you loose much more than 10% of the power. This whole subject has further implications.

Suppose panels become sufficiently inexpensive that it is worthwhile to clad your East and West facing roof as well as your North Facing Roof (I live in New Zealand) with panels. You do this to have power more evenly generated throughout the day. However the three sets of panels are now no longer co-linear. Throughout the day, each set is producing energy at a different rate and a different voltage. What technological solutions are already in place so that you get the full amount of energy which is being produced by all the cells in your various arrays of panels. There is a further implication for electric cars.

At present, you can retrofit solar panels to the roof of your Prius. It is said to produce enough energy for about 10km of driving for each day in the sun. A nice little bonus. Before long, it may be possible to clad all the external surfaces of a car with solar cells. However, on a car, with it's curved surfaces, no two cells will be colinear with each other. Does the technology exist to ensure that you are getting all the power that each cell produces into your batteries.

Generation Without Direct Sun
### What percent of the nominal power of a solar panel do you produce when the panel can "see" a clear blue sky but has no direct Sun shining on it

### Do I still generate power on a bright cloudy day (I know this is like asking how long is a piece of string but I am trying to get a feel for how much energy is produced under different conditions).

Optimum Panel Angle
### How much is my power reduced if my panels are not tilted at the seasonal angle*
*The angle of your Solar panels array can be tilted as a unit throughout the year so that at noon, the panels are at right angles to the rays of the sun. If the panels are fixed at the best yearly average angle for your latitude, they will be producing less power than they otherwise could be if you adjust the seasonal angle throughout the year.

### I'm a little puzzled by the optimum angle at which your panels should be set. Clearly, the very best situation in terms of the amount of energy generated would be to have the panels follow the sun both in the East West direction and in their angle above the horizon. This would ensure that the panels were always normal (at right angles) to the rays of the sun and hence were always generating the maximum possible amount of energy. Incase you are contemplating such a system there are some severe dissadvantages which I won't go into here. Lets have a look at mid summer's day (Dec 23 in the Southern Hemisphere where I live).

My house is oriented toward true North. That is to say, I have a roof surface pointing exactly toward each of the cardinal directions (N,S,E,W). Lets draw an immaginary East West line through my house. In the middle of summer, the sun rises over the horizon about 20 degrees South of that line. It only begins to illuminate my North facing roof at around 9:00AM. Up to that time, I am not getting any direct sun light on the roof. Before 9:00AM, a panel would only be generating electricity from a clear blue sky. The same situation occurs in the afternoon. Somewhere around 4:00PM, the direct sun no longer shines on my panels and the sun sets about 20 degrees south of my East West line.

I wonder how much electricity I would generate, in comparison with panels which are fixed to my roof, if I had my panels fixed horizontally. I wonder how much I would generate if the whole array changed its angle to the horizon during the day. It is much easier to change the angle of the panels in one direction rather than in two directions. The theoretical answer should be obtainable with a little spherical Trig and some slightly more complicated Calculus.

Panel Cooling
### How important is it to allow a free flow of air below my panels to help cool them. What is the effect on power production. What is the effect on the longevity of the panels.

Single or Double Metering
### Is it lawful in my country to simply turn my meter backwards when I am producing more power than I am using or must I have two meters. (I'd like to find what the regulations are in different countries)

Are Meters Reversable
### Are there meters that will not turn backwards if I produce more power than I use or are all meters reverseable.

Protection of Grid Workers
### What sort of device do I need to ensure that if the grid goes off, I am not sending power into the grid (this is necessary so that workers, fixing a fault on the line will not be electrocuted when they think they have turned off the power to the area of the fault but micro generators are still electrifying the grid)

A Few Batteries??
### If I am grid connected, would it be economically worthwhile to have a small array of batteries as a buffer. (note that for a stand alone system, you need enough batteries to store energy to carry you over periods of no sun. For a really reliable system, this involves a lot of expense).

Peak Hours Geographically
### Where can I find information on how many peak hours I have in my area

Answer(s)
http://www.wholesalesolar.com/Information-SolarFolder/SunHoursUSMap.html
http://www.oynot.com/solar-insolation-map.html
http://www.solarcraft.net/sun-hours-map.htm
http://www.eventhorizonsolar.com/map1-global.html

Note that all these sites measure something different. Read the fine print carefully. it is my understanding that peak solar hours are measured with a horizontal detector. Clearly, if that is so, if you orient your panels at the average latitudinal angle of your location, you will generate more power than the peak hour figure would indicate. If you go one step further and adjust the angle of your panels, say, each month to keep them normal (at a right angle) to the sun at that season, you will get more power still and if you go all the way and track the sun throughout the day, more power still. ps. In case you are going all the way with daily tracking, there are some definite dissadvantages of doing so so tread carefully.

Cap and Trade in New Zealand

2011-06-18T14:53:00.000-07:00

My adopted country is New Zealand. I feel very lucky to have been allowed to settle here and very proud to be a Kiwi. New Zealand is a Quixotic little country, a green and pleasant land, and she punches above her weight in many ways. For instance:

#We were the first to give women the vote.

#We opposed nuclear weapons, nuclear ships in our waters and the use of nuclear power. For our efforts we were attacked by France (Rainbow Warrior) virtually ostracized by America and took a severe hit on our economy.

#We have put in a voting system called MMP which is about as close as one gets in the world, to true representative government.

#We refused to be drawn into a war of exploitation in Iraq but sent troops when the war was over to help reconstruct the country.

#During two world wars, instead of fortifying our remote little islands and hunkering down, we sent our best and bravest to help defeat Germany and Japan. We took huge casualties.

#We have eliminated farm subsidies so that now, farmers farm crops rather than subsidies. We went cold turkey from a situation of heavy subsidies and it was traumatic. Now New Zealand competes very well with countries which heavily subsidize their farmers; so successfully that some of these countries; the USA for instance, puts tariffs on our agricultural produce despite their heavily subsidies.

#And we have adopted a financial obligation for our carbon emissions but here we are falling down.   We are either first country or right up there with the firsts few to do so. We have done so despite the fact that on a world scale, our carbon emissions are minuscule. Even if we reduced them to zero it would have virtually no effect on the emissions of the world. And we have adopted Cap and Trade to the detriment of our businesses since a carbon obligation will make our exports more expensive. We have adopted them and included Methane in the mix despite the fact that it rather rapidly converts to Carbon dioxide. That is another story. And we have not insisted on the true value of our tree farming. In so far as a tree is cut down and built into a long lasting house or piece of furniture, it is actually a net remover of Carbon dioxide from the atmosphere. That also is another story and may be fixed soon. However, I can't help feeling proud that we are making the gesture. So how are we falling down.

We have just had (May 2011) James Hansen on tour in New Zealand. For those of you not familiar with Prof Hansen, he is a top climatologist; arguably the top climatologist of the world. He has pulled together the work of many scientists including his own and demonstrated with a very high level of probability that a) the climate is changing b) that it has changed rather suddenly in the past as certain limits have been passed and c) that it is very likely that if we continue on our present path, we are likely to cause a destabilization and a switch to a new climate regime. Why does this matter.

Well it doesn't in the long term -- the very long term. The point, though, is that human civilization has developed during the past 11,000 years in a period of relatively stable climate and our civilization is adapted to it. We have had some mini glitches in our climate since the end of the glacial and even they have had pretty wide spread effects. The point is, that because of the relative stability of our climate and hence our sea levels, many of our cities have been built within 10 or so vertical meters of sea level. Because of the stability and hence predictability of our climate we are just about able to produce enough food for our huge population with our knowledge of how to farm in the present climate regime. If we get a rapid climate change we will have New Orleans type floods in all our coastal cities, our food production will plummet with the change in climate zones and huge numbers of species of animals and plants will go extinct with unforeseen consequences to the support systems that allow us to exist on our planet.

Looked at on a 10million year time scale this won't matter at all. It will be equivalent to one of the great extinctions and possibly include humans. At the very least, we might achieve the Lovelock Number*. The world will recover, new species will evolve and a remnant population of humans might even be left to breed up again and repeat the whole disaster. The point is, that we have a reasonably comfortable, interesting existence and even civilized life in the present climate setting and are very much in danger of trashing it and putting ourselves back into a deep dark age. Just imagine the effect of the world wheat crop failing for even one year, not to mention the failure of the rice, corn barley and rye crops failing as well. Just imagine if the crop failure continued for 10 years or for even for a Milena. Even worse, imagine if the climate flick flacked (flickering) between the two states for a decade or more as many scientists predict so that it is impossible to predict from year to year what the climate will do. So why are we failing here in New Zealand.

*James Lovelock has predicted that within a few decades our world population will be down to a billion or so. (it would only take a single year in which the rice, wheat, corn, barley and rye crops failed to cause epic starvation)

We have adopted Cap and Trade and the consensis is amongst many comentators that the main effect of Cap and Trade will be to make the banks rich.

On the other hand there is Jim Hansen's solution called tax and dividend. Wheras the congressional document in America on Cap and trade runs to some 2000 pages, Jim Hansen's Tax and Dividend can be expressed on one side of a sheet of A4 paper--------------- double spaced. It is highly likely to be extremely effective. It has the added advantage, unlike Cap and Trade, of economically protecting Joe Citizen during the transition to Renewable Energy. What is his system.

As I said, it is called Tax and Dividend and I won't even need one piece of foolscap to describe it. Two short   paragraphs will be enough.

Paragraph 1
Hansen suggests taxing fossil fuel as it comes out of the ground or through your borders. The tax will start low and increase gradually every year. This of course will make everything we use more expensive.

Now here is the good part.

Paragraph 2

Every cent of this fossil fuel tax, however collected, will be returned equally to every citizen by no-cost electronic transfer. Jim has suggested an equal portion to every adult and a half portion to each child up to a maximum of two children per family. I think it might be easier to give an equal portion to every human registered tax payer (people only, not businesses). The income tax data base exists in every country and it would encourage anyone who is not registered to register. There it is.    The downstream effects from this policy, however, take a little more paper to describe.

Incidentally, The New Zealand failure is that we brought Prof Hansen here, sponsored him, listened to him and then ignored what he had to say. Not even the Green Party is proposing Tax and Dividend.    Lets look at the effects of his system. They are many.

Someone who is modest in their energy use, who has an insulated home, cycles to work, has energy efficient appliances etc. will actually end up with a net gain despite the increases in the price of everything.

Someone who drives an SUV, uses resistance electricity instead of a heat pump and has old, inefficient devices will be out of pocket. There will be a great incentive to get efficient and in fact to use this tax money to buy LED light bulbs to replace the existing ones as they burn out, to buy locally, to replace the family car with an electric lizi when the old one is finished and so forth.

Long before renewable electricity becomes cheaper than fossil fuel generated electricity, investment will flee. It will be clear that as the tax on fossil fuel rises steadily year by year, fossil fuel will become more and more expensive and investing in fossil fuel, less and less worthwhile. The shift of investment to renewable energy will accelerate our climb up the learning and technological curves. This will result in less and less costly electricity. Better still. It will be stably priced electricity. All renewable energy systems are fuel free. None of them use a resource that is every increasing in scarcity and cost. Competition will also cut in and achieve the same result. With many countries and many companies competing for the market to sell renewable energy devices, price will inevitably come down.

The pollution from the burning of fossil fuels will decrease and continue to decrease as renewables replace fossil fuel. People will be healthier and medical costs will decrease.

With the decrease in the cost of solar panels, many households will find it worthwhile to have their own home system. Baring a revolution in battery technology, it generally will not be worthwhile to have batteries and instead, the grid will be used as the energy storage system. This will produce diffusely generated energy and the Internet effect will be achieved. The Internet was invented by the military to eliminate the vulnerability of their communication systems to be knocked out by a single strike. Likewise when our energy is generated by wind farms distributed all over our country, from hydro dams at various locations and from the solar panels on the roves of our buildings, the system becomes far more robust in the face of human or natural disasters.

There may also be a psychological effect. If you are generating energy on the roof, it emphasizes your connection with natural processes. There may well be a differential between the cost of energy you buy from the grid and the cost they pay for your electricity. It will be worth your while to vacuum, bake, wash dishes, wash clothes, charge up your electric car etc. when the sun shines and it is your own electricity you are using. A certain awareness of natural cycles is encouraged.

And finally, if New Zealand adopts Tax and Dividend, it just might tip Australia over the edge to doing the same. The Green Party in Australia has the balance of power this year (2011) and they could follow suit. This just might be enough to induce China to follow suit. They are desperate not to fall into the fossil fuel trap they way the western world has. If this happens, the rest of the world has to follow. I don't understand the details but apparently the agreements between countries are such that if you put a carbon tax on your own coal, for instance, and export it overseas, the receiving country doesn't tax it. If you don't put on a carbon tax   the receiving country can. Essentially the receiving country collects your tax for its own use. New Zealand is too small to induce such a change, Australia with her huge exports of coal, may be large enough. China is another story. If she puts this in place the world must follow. This might just be enough to save our sorry selves from ourselves as the specter of sudden climate change comes down the turnpike at us.

Indoor Dairy Farms

2011-05-26T03:44:00.000-07:00

There has been much "to do" about a proposal to have indoor dairy farms down in MacKenzie Country in New Zealand. Many are up in arms about the spoiling of this beautiful environment of desert and bunch grass. Others are concerned about animal welfare and still others about pollution of streams. I haven't much to say about the spoiling of the appearance of the area. I'm not even sure if what we see is the original, pre-human face of this area or it is simply the face that people alive today first saw and hence have become attached to. However, with respect to problems to do with animal welfare and stream pollution, as Porgy said, "It ain't necessarily so".

I worked for more than a year in two dairy farms in Israel. Let me first describe how they work. The cows are housed in huge, open sided sheds. This is necessary due to the high temperatures and almost constant sunshine in the Middle East. Lengthwise, down the middle of these sheds is a raised cement driveway wide enough for a tractor. Along both edges of the driveway there is a shallow cement trough with its upper lip level with the roadway. Outside of the troughs is a fence made of vertical galvanized pipes. It is constructed so that the cows can put their heads through the bars. By moving a lever at the end of the fence, their heads are trapped and the cow has to stay there until released. This is needed because otherwise, dominant cows scoff their own food and then drive weaker cows away and eat their food.

The farmer drives his tractor down the middle of the shed distributing the various feeds that they give the cows. Feeds consists of waste products from vegetable processing, fruit processing and brewery waste (lees)* and grass which they grow nearby and harvest with a special cart that both harvests and, with the press of another button, spreads the grass behind the cart when they drive down the roadway in the middle of the shed. The farmer then sweeps the grass or other feeds into the troughs on both sides of the driveway so that the cows can get at it.

*This is their favorite. You should see the excitement when they know the beer wagon is coming.

They milk 3 times a day and in one of the Kibutzim that I worked at, when I visited last year, they were averaging 45l of milk per cow per day with their prize cow giving 75l. In some of the farms they are now installing methane generators using the manure and can generate more than enough electricity to power the operation with lots of power left over to feed into the grid. The heat from the diesel generator which now uses primarily manure-generated bio-gas, heats the water for the dairy. So what are the advantages of having the cows housed indoors. (I'll leave you to comment on the disadvantages ((yes, I will publish them))).

Protection from the Weather
When the weather is harsh, cows are better off inside. This includes intense heat or cold, flood and deep snow. All these conditions occur at various times in various places in New Zealand.

Control of the manure and Urine
A cow pat kills a largish patch of grass and makes the adjacent grass unpalatable to cows. A full urination in well drained soil can go down through the root zone of the grass into the water table. Manure, urine and spilt milk are full of energy and shouldn't be wasted by simply applying them to the land. After energy extraction through methanogenesis, the waste from the methane generator is excellent fertilizer, some say better than the raw manure. If cows are kept inside, all their manure and urine plus any wastes from the milking process can be used and don't interfere with grass production. The material from the methane generator can be spread evenly on the land at the optimal dose rate. This eliminates environmental pollution. Biogas can be fed directly into a diesel generator. The electricity can be used in the farm and the excess electricity fed into the grid to generate another revenue stream. The heat from the diesel generator is used to directly heat water which is used for cleaning in the dairy and thus saving the electricity for more important uses

.

Less land needed
Because of all of the above, less land is needed to produce the necessary pasturage for the cows. More of the farm can be left in riparian zones*. Cattle do not trample over their food source. During wet conditions, cattle can wreck soil structure. Soil remains healthier and better aerated when it is not trampled by cattle.

*The area adjacent to streams. For the protection of our water, a wide zone along streams should be vegetated and domestic grazing animals should be denied access to this area.

Possibility of using various waste products for food
With the cows in a shed, it is convenient to utilize a wide variety of waste products from other agricultural processing industries. Cows, with their huge bacterial processing vats (rhumen) are the perfect animals to turn otherwise wasted products into valuable milk.

Cows under closer observation
Cows kept indoors are under the observation of the farmer more of the time than cows that are outdoors except during milking. With outdoor farming the farmer only sees the under side of outdoor cows and then only for a short time. One day, while feeding the cows in Israel, it was observed that one of the cows had become asymmetric. The farmer, seeing this, quickly got a hollow needle from the office, punctured the correct place in the rumen between two of the ribs and let off the gas pressure that would have killed the cow if this hadn't been done.

Lack of need for Riparian fences
With cows kept indoors, there is no need to fence off riparian zones. This is a saving to the farmer.

It is clear that cow welfare and environmental protection can gain in many ways when cows are kept indoors. It must be pointed out that this is not always so. It is possible to make the conditions better for cows indoors than outdoors but careful design and operation is necessary.

Goldman Sachs

2011-05-15T13:36:00.000-07:00

I always thought that the American media was in the pocket of big business. If this is true, this article from Rolling Stone is the exception that proves the rule. In it, Tabibbi and Michael Lewis describe the findings of the Levin Report. In this report Senator Levin, who is well known for extremely competent, in depth analysis of business scams, uses Goldman Sachs as an example of the way such companies are rorting the public and by doing so, led to the financial collapse of 2008.

These are the guys that fought tooth and nail to be deregulated, claiming that they were the best guardians of the public fiscal morality (yeh right!!!). I think we have put that bit of fiction to bed.

Despite the ground work having been done and the managers of this company having being hauled before a Congressional hearing, the Justice Department seems curiously unable to take up the job and put these guys in jail. Steal an apple from a store and you will find your sorry ass in jail. Steal millions from your own customers and the general public, bring down the economy of the world and it is business as usual.

I find the inns and outs of high finance very mysterious. The colorful language and analogies of the authors have begun to give me an inkling of how it works.

The final sentence of this article is telling. It says "the law in America is subjective, and crime is defined not by what you did, but by who you are."

The People vs. Goldman Sachs

A Senate committee has laid out the evidence. Now the Justice Department should bring criminal charges

Goldman Sachs CEO Lloyd Blankfein tesifies before the Senate in April 2010

Mark Wilson/Getty Images

They weren't murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it.
Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn't leave much doubt: Goldman Sachs should stand trial.
This article appears in the May 26, 2011 issue of Rolling Stone. The issue is available now on newsstands and will appear in the online archive May 13.
The great and powerful Oz of Wall Street was not the only target of Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, the 650-page report just released by the Senate Subcommittee on Investigations, chaired by Democrat Carl Levin of Michigan, alongside Republican Tom Coburn of Oklahoma. Their unusually scathing bipartisan report also includes case studies of Washington Mutual and Deutsche Bank, providing a panoramic portrait of a bubble era that produced the most destructive crime spree in our history — "a million fraud cases a year" is how one former regulator puts it. But the mountain of evidence collected against Goldman by Levin's small, 15-desk office of investigators — details of gross, baldfaced fraud delivered up in such quantities as to almost serve as a kind of sarcastic challenge to the curiously impassive Justice Department — stands as the most important symbol of Wall Street's aristocratic impunity and prosecutorial immunity produced since the crash of 2008.
Photo Gallery: How Goldman top dogs defrauded their clients and lied to Congress
To date, there has been only one successful prosecution of a financial big fish from the mortgage bubble, and that was Lee Farkas, a Florida lender who was just convicted on a smorgasbord of fraud charges and now faces life in prison. But Farkas, sadly, is just an exception proving the rule: Like Bernie Madoff, his comically excessive crime spree (which involved such lunacies as kiting checks to his own bank and selling loans that didn't exist) was almost completely unconnected to the systematic corruption that led to the crisis. What's more, many of the earlier criminals in the chain of corruption — from subprime lenders like Countrywide, who herded old ladies and ghetto families into bad loans, to rapacious banks like Washington Mutual, who pawned off fraudulent mortgages on investors — wound up going belly up, sunk by their own greed.
Read Matt Taibbi on Goldman Sachs, the 'great vampire squid'
But Goldman, as the Levin report makes clear, remains an ascendant company precisely because it used its canny perception of an upcoming disaster (one which it helped create, incidentally) as an opportunity to enrich itself, not only at the expense of clients but ultimately, through the bailouts and the collateral damage of the wrecked economy, at the expense of society. The bank seemed to count on the unwillingness or inability of federal regulators to stop them — and when called to Washington last year to explain their behavior, Goldman executives brazenly misled Congress, apparently confident that their perjury would carry no serious consequences. Thus, while much of the Levin report describes past history, the Goldman section describes an ongoing? crime — a powerful, well-connected firm, with the ear of the president and the Treasury, that appears to have conquered the entire regulatory structure and stands now on the precipice of officially getting away with one of the biggest financial crimes in history.
Read Taibbi's 2010 piece on how bailed-out banks are recreating the conditions for a crash
Defenders of Goldman have been quick to insist that while the bank may have had a few ethical slips here and there, its only real offense was being too good at making money. We now know, unequivocally, that this is bullshit. Goldman isn't a pudgy housewife who broke her diet with a few Nilla Wafers between meals — it's an advanced-stage, 1,100-pound medical emergency who hasn't left his apartment in six years, and is found by paramedics buried up to his eyes in cupcake wrappers and pizza boxes. If the evidence in the Levin report is ignored, then Goldman will have achieved a kind of corrupt-enterprise nirvana. Caught, but still free: above the law.
To fully grasp the case against Goldman, one first needs to understand that the financial crime wave described in the Levin report came on the heels of a decades-long lobbying campaign by Goldman and other titans of Wall Street, who pleaded over and over for the right to regulate themselves.
Before that campaign, banks were closely monitored by a host of federal regulators, including the Office of the Comptroller of the Currency, the FDIC and the Office of Thrift Supervision. These agencies had examiners poring over loans and other transactions, probing for behavior that might put depositors or the system at risk. When the examiners found illegal or suspicious behavior, they built cases and referred them to criminal authorities like the Justice Department.
This system of referrals was the backbone of financial law enforcement through the early Nineties. William Black was senior deputy chief counsel at the Office of Thrift Supervision in 1991 and 1992, the last years of the S&L crisis, a disaster whose pansystemic nature was comparable to the mortgage fiasco, albeit vastly smaller. Black describes the regulatory MO back then. "Every year," he says, "you had thousands of criminal referrals, maybe 500 enforcement actions, 150 civil suits and hundreds of convictions."
But beginning in the mid-Nineties, when former Goldman co-chairman Bob Rubin served as Bill Clinton's senior economic-policy adviser, the government began moving toward a regulatory system that relied almost exclusively on voluntary compliance by the banks. Old-school criminal referrals disappeared down the chute of history along with floppy disks and scripted television entertainment. In 1995, according to an independent study, banking regulators filed 1,837 referrals. During the height of the financial crisis, between 2007 and 2010, they averaged just 72 a year.
But spiking almost all criminal referrals wasn't enough for Wall Street. In 2004, in an extraordinary sequence of regulatory rollbacks that helped pave the way for the financial crisis, the top five investment banks — Goldman, Merrill Lynch, Morgan Stanley, Lehman Brothers and Bear Stearns — persuaded the government to create a new, voluntary approach to regulation called Consolidated Supervised Entities. CSE was the soft touch to end all soft touches. Here is how the SEC's inspector general described the program's regulatory army: "The Office of CSE Inspections has only two staff in Washington and five staff in the New York regional office."
Among the bankers who helped convince the SEC to go for this ludicrous program was Hank Paulson, Goldman's CEO at the time. And in exchange for "submitting" to this new, voluntary regime of law enforcement, Goldman and other banks won the right to lend in virtually unlimited amounts, regardless of their cash reserves — a move that fueled the catastrophe of 2008, when banks like Bear and Merrill were lending out 35 dollars for every one in their vaults.
Goldman's chief financial officer then and now, a fellow named David Viniar, wrote a letter in February 2004, commending the SEC for its efforts to develop "a regulatory framework that will contribute to the safety and soundness of financial institutions and markets by aligning regulatory capital requirements more closely with well-developed internal risk-management practices." Translation: Thanks for letting us ignore all those pesky regulations while we turn the staid underwriting business into a Charlie Sheen house party.
Goldman and the other banks argued that they didn't need government supervision for a very simple reason: Rooting out corruption and fraud was in their own self-interest. In the event of financial wrongdoing, they insisted, they would do their civic duty and protect the markets. But in late 2006, well before many of the other players on Wall Street realized what was going on, the top dogs at Goldman — including the aforementioned Viniar — started to fear they were sitting on a time bomb of billions in toxic assets. Yet instead of sounding the alarm, the very first thing Goldman did was tell no one. And the second thing it did was figure out a way to make money on the knowledge by screwing its own clients. So not only did Goldman throw a full-blown "bite me" on its own self-righteous horseshit about "internal risk management," it more or less instantly sped way beyond inaction straight into craven manipulation.
"This is the dog that didn't bark," says Eliot Spitzer, who tangled with Goldman during his years as New York's attorney general. "Their whole political argument for a decade was 'Leave us alone, trust us to regulate ourselves.' They not only abdicated that responsibility, they affirmatively traded against the entire market."
By the end of 2006, Goldman was sitting atop a $6 billion bet on American home loans. The bet was a byproduct of Goldman having helped create a new trading index called the ABX, through which it accumulated huge holdings in mortgage-related securities. But in December 2006, a series of top Goldman executives — including Viniar, mortgage chief Daniel Sparks and senior executive Thomas Montag — came to the conclusion that Goldman was overexposed to mortgages and should get out from under its huge bet as quickly as possible. Internal memos indicate that the executives soon became aware of the host of scams that would crater the global economy: home loans awarded with no documentation, loans with little or no equity in them. On December 14th, Viniar met with Sparks and other executives, and stressed the need to get "closer to home" — i.e., to reduce the bank's giant bet on mortgages.
Sparks followed up that meeting with a seven-point memo laying out how to unload the bank's mortgages. Entry No. 2 is particularly noteworthy. "Distribute as much as possible on bonds created from new loan securitizations," Sparks wrote, "and clean previous positions." In other words, the bank needed to find suckers to buy as much of its risky inventory as possible. Goldman was like a car dealership that realized it had a whole lot full of cars with faulty brakes. Instead of announcing a recall, it surged ahead with a two-fold plan to make a fortune: first, by dumping the dangerous products on other people, and second, by taking out life insurance against the fools who bought the deadly cars.
The day he received the Sparks memo, Viniar seconded the plan in a gleeful cheerleading e-mail. "Let's be aggressive distributing things," he wrote, "because there will be very good opportunities as the markets [go] into what is likely to be even greater distress, and we want to be in a position to take advantage of them." Translation: Let's find as many suckers as we can as fast as we can, because we'll only make more money as more and more shit hits the fan.
By February 2007, two months after the Sparks memo, Goldman had gone from betting $6 billion on mortgages to betting $10 billion against them — a shift of $16 billion. Even CEO Lloyd "I'm doing God's work" Blankfein wondered aloud about the bank's progress in "cleaning" its crap. "Could/should we have cleaned up these books before," Blankfein wrote in one e-mail, "and are we doing enough right now to sell off cats and dogs in other books throughout the division?"
How did Goldman sell off its "cats and dogs"? Easy: It assembled new batches of risky mortgage bonds and dumped them on their clients, who took Goldman's word that they were buying a product the bank believed in. The names of the deals Goldman used to "clean" its books — chief among them Hudson and Timberwolf — are now notorious on Wall Street. Each of the deals appears to represent a different and innovative brand of shamelessness and deceit.
In the marketing materials for the Hudson deal, Goldman claimed that its interests were "aligned" with its clients because it bought a tiny, $6 million slice of the riskiest portion of the offering. But what it left out is that it had shorted the entire deal, to the tune of a $2 billion bet against its own clients. The bank, in fact, had specifically designed Hudson to reduce its exposure to the very types of mortgages it was selling — one of its creators, trading chief Michael Swenson, later bragged about the "extraordinary profits" he made shorting the housing market. All told, Goldman dumped $1.2 billion of its own crappy "cats and dogs" into the deal — and then told clients that the assets in Hudson had come not from its own inventory, but had been "sourced from the Street."
Hilariously, when Senate investigators asked Goldman to explain how it could claim it had bought the Hudson assets from "the Street" when in fact it had taken them from its own inventory, the bank's head of CDO trading, David Lehman, claimed it was accurate to say the assets came from "the Street" because Goldman was part of the Street. "They were like, 'We are the Street,'" laughs one investigator.
Hudson lost massive amounts of money almost immediately after the sale was completed. Goldman's biggest client, Morgan Stanley, begged it to liquidate the investment and get out while they could still salvage some value. But Goldman refused, stalling for months as its clients roasted to death in a raging conflagration of losses. At one point, John Pearce, the Morgan Stanley rep dealing with Goldman, lost his temper at the bank's refusal to sell, breaking his phone in frustration. "One day I hope I get the real reason why you are doing this to me," he told a Goldman broker.
Goldman insists it was only required to liquidate the assets "in an orderly fashion." But the bank had an incentive to drag its feet: Goldman's huge bet against the deal meant that the worse Hudson performed, the more money Goldman made. After all, the entire point of the transaction was to screw its own clients so Goldman could "clean its books." The crime was far from victimless: Morgan Stanley alone lost nearly $960 million on the Hudson deal, which admittedly doesn't do much to tug the heartstrings. Except that quickly after Goldman dumped this near-billion-dollar loss on Morgan Stanley, Morgan Stanley turned around and dumped it on taxpayers, who within a year were spending $10 billion bailing out the sucker bank through the TARP program.
It is worth pointing out here that Goldman's behavior in the Hudson scam makes a mockery of standards in the underwriting business. Courts have held that "the relationship between the underwriter and its customer implicitly involves a favorable recommendation of the issued security." The SEC, meanwhile, requires that broker-dealers like Goldman disclose "material adverse facts," which among other things includes "adverse interests." Former prosecutors and regulators I interviewed point to these areas as potential avenues for prosecution; you can judge for yourself if a $2 billion bet against clients qualifies as an "adverse interest" that should have been disclosed.
But these "adverse interests" weren't even the worst part of Hudson. Goldman also used a complex pricing method to turn the deal into an impressive triple screwing. Essentially, Goldman bought some of the mortgage assets in the Hudson deal at a discount, resold them to clients at a higher price and pocketed the difference. This is a little like getting an invoice from an interior decorator who, in addition to his fee for services, charges you $170 a roll for brand-name wallpaper he's actually buying off the back of a truck for $63.
To recap: Goldman, to get $1.2 billion in crap off its books, dumps a huge lot of deadly mortgages on its clients, lies about where that crap came from and claims it believes in the product even as it's betting $2 billion against it. When its victims try to run out of the burning house, Goldman stands in the doorway, blasts them all with gasoline before they can escape, and then has the balls to send a bill overcharging its victims for the pleasure of getting fried.
Timberwolf, the most notorious of Goldman's scams, was another car whose engine exploded right out of the lot. As with Hudson, Goldman clients who bought into the deal had no idea they were being sold the "cats and dogs" that the bank was desperately trying to get off its books. An Australian hedge fund called Basis Capital sank $100 million into the deal on June 18th, 2007, and almost immediately found itself in a full-blown death spiral. "We bought it, and Goldman made their first margin call 16 days later," says Eric Lewis, a lawyer for Basis, explaining how Goldman suddenly required his client to put up cash to cover expected losses. "They said, 'We need $5 million.' We're like, what the fuck, what's going on?" Within a month, Basis lost $37.5 million, and was forced to file for bankruptcy.
In many ways, Timberwolf was a perfect symbol of the insane faith-based mathematics and blackly corrupt marketing that defined the mortgage bubble. The deal was built on a satanic derivative structure called the CDO-squared. A normal CDO is a giant pool of loans that are chopped up and layered into different "tranches": the prime or AAA level, the BBB or "mezzanine" level, and finally the equity or "toxic waste" level. Banks had no trouble finding investors for the AAA pieces, which involve betting on the safest borrowers in the pool. And there were usually investors willing to make higher-odds bets on the crack addicts and no-documentation immigrants at the potentially lucrative bottom of the pool. But the unsexy BBB parts of the pool were hard to sell, and the banks didn't want to be stuck holding all of these risky pieces. So what did they do? They took all the extra unsold pieces, threw them in a big box, and repeated the original "tranching" process all over again. What originally were all BBB pieces were diced up and divided anew — and, presto, you suddenly had new AAA securities and new toxic-waste securities.
A CDO, to begin with, is already a highly dubious tool for magically converting risky subprime mortgages into AAA investments. A CDO-squared doubles down on that lunacy, taking the waste products of the original process and converting them into AAA investments. This is kind of like taking all the kids who were picked last to play volleyball in every gym class of every public school in the state, throwing them in a new gym, and pretending that the first 10 kids picked are varsity-level players. Then you take all the unpicked kids left over from that process, throw them in a gym with similar kids from all 50 states, and call the first 10 kids picked All-Americans.
Those "All-Americans" were the assets in the Timberwolf deal. These were the recycled nightmare dregs of the mortgage craze — to quote Beavis and Butt-Head, "the ass of the ass."
Goldman knew the deal sucked long before it dinged the Aussies in Basis Capital for $100 million. In February 2007, Goldman mortgage chief Daniel Sparks and senior executive Thomas Montag exchanged e-mails about the risk of holding all the crap in the Timberwolf deal.
MONTAG: "CDO-squared — how big and how dangerous?"
SPARKS: "Roughly $2 billion, and they are the deals to worry about."
Goldman executives were so "worried" about holding this stuff, in fact, that they quickly sent directives to all of their salespeople, offering "ginormous" credits to anyone who could manage to find a dupe to take the Timberwolf All-Americans off their hands. On Wall Street, directives issued from above are called "axes," and Goldman's upper management spent a great deal of the spring of 2007 "axing" Timberwolf. In a crucial conference call on May 20th that included Viniar, Sparks oversaw a PowerPoint presentation spelling out, in writing, that Goldman's mortgage desk was "most concerned" about Timberwolf and another CDO-squared deal. In a later e-mail, he offered an even more dire assessment of such deals: "There is real market-meltdown potential."
On May 22nd, two days after the conference call, Goldman sales rep George Maltezos urged the Australians at Basis to hurry up and buy what the bank knew was a deadly investment, suggesting that the "return on invested capital for Basis is over 60 percent." Maltezos was so stoked when he first identified the Aussies as a target in the scam that he subject-lined his e-mail "Utopia."
"I think," Maltezos wrote, "I found white elephant, flying pig and unicorn all at once."
The whole transaction can be summed up by the now-notorious e-mail that Montag wrote to Sparks only four days after they sold $100 million of Timberwolf to Basis. "Boy," Montag wrote, "that timeberwof [sic] was one shitty deal."
Last year, in the one significant regulatory action the government has won against the big banks, the SEC sued Goldman over a scam called Abacus, in which the bank "rented" its name to a billionaire hedge-fund viper to fleece investors out of more than $1 billion. Goldman agreed to pay $550 million to settle the suit, though no criminal charges were brought against the bank or its executives. But in light of the Levin report, that SEC action now looks woefully inadequate. Yes, it was a record fine — but it pales in comparison to the money Goldman has taken from the government since the crash. As Spitzer notes, Goldman's reaction was basically, "OK, we'll pay you $550 million to settle the Abacus case — that's a small price to pay for the $12.9 billion we got for the AIG bailout." Now, adds Spitzer, "everybody can just go home and pretend it was only $12.4 billion — and Goldman can smile all the way to the bank. The question is, now that we've seen this report, there are a bunch of story lines that seem to be at least as egregious as Abacus. Are they going to bring cases?"
Here is where the supporters of Goldman and other big banks will stand up and start wanding the air full of confusing terms like "scienter" and "loss causation" — legalese mumbo jumbo that attempts to convince the ignorantly enraged onlooker that, according to American law, these grotesque tales of grand theft and fraud you've just heard are actually more innocent than you think. Yes, they will say, it may very well be a prosecutable crime for a corner-store Arab to take $2 from a customer selling tap water as Perrier. But that does not mean it's a crime for Goldman Sachs to take $100 million from a foreign hedge fund doing the same thing! No, sir, not at all! Then you'll be told that the Supreme Court has been limiting corporate liability for fraud for decades, that in order to gain a conviction one must prove a conscious intent to deceive, that the 1976 ruling in Ernst and Ernst clearly states....
Leave all that aside for a moment. Though many legal experts agree there is a powerful argument that the Levin report supports a criminal charge of fraud, this stuff can keep the lawyers tied up for years. So let's move on to something much simpler. In the spring of 2010, about a year into his investigation, Sen. Levin hauled all of the principals from these rotten Goldman deals to Washington, made them put their hands on the Bible and take oaths just like normal people, and demanded that they explain themselves. The legal definition of financial fraud may be murky and complex, but everybody knows you can't lie to Congress.
"Article 18 of the United States Code, Section 1001," says Loyola University law professor Michael Kaufman. "There are statutes that prohibit perjury and obstruction of justice, but this is the federal statute that explicitly prohibits lying to Congress."
The law is simple: You're guilty if you "knowingly and willfully" make a "materially false, fictitious or fraudulent statement or representation." The punishment is up to five years in federal prison.
When Roger Clemens went to Washington and denied taking a shot of steroids in his ass, the feds indicted him — relying not on a year's worth of graphically self-incriminating e-mails, but chiefly on the testimony of a single individual who had been given a deal by the government. Yet the Justice Department has shown no such prosecutorial zeal since April 27th of last year, when the Goldman executives who oversaw the Timberwolf, Hudson and Abacus deals arrived on the Hill and one by one — each seemingly wearing the same mask of faint boredom and irritated condescension — sat before Levin's committee and dodged volleys of questions.
Before the hearing, even some of Levin's allies worried privately about his taking on Goldman and other powerful interests. The job, they said, was best left to professional prosecutors, people with experience building cases. "A senator's office is not an enormous repository of expertise," one former regulator told me. But in the case of this particular senator, that concern turned out to be misplaced. A Harvard-educated lawyer, Levin has a long record of using his subcommittee to spend a year or more carefully building cases that lead to criminal prosecutions. His 2003 investigation into abusive tax shelters led to 19 indictments of individuals at KPMG, while a 2006 probe fueled insider-trading charges against the notorious Wyly brothers, a pair of billionaire Texans who manipulated offshore investment trusts. The investigation of Goldman was an attempt to find out what went wrong in the years leading up to the financial crash, and the questioning of the bank's executives was not one of those for-the-cameras-only events where congressmen wing ad-libbed questions in search of sound bites. In the weeks leading up to the hearing, Levin's team carefully rehearsed the moment with committee members. They knew the possible answers that Goldman might give, and they were ready with specific counterquestions. What ensued looked more like a good old-fashioned courtroom grilling than a photo-op for grinning congressmen.
Sparks, who stepped down as Goldman's mortgage chief in 2008, cut a striking figure in his testimony. With his severe crew cut, deep-set eyes and jockish intransigence, he looked like a cross between H.R. Haldeman and John Rocker. He repeatedly dodged questions from Levin about whether or not the bank had a responsibility to tell its clients that it was betting against the same stuff it was selling them. When asked directly if he had that responsibility, Sparks answered, "The clients who did not want to participate in that deal did not." When Levin pressed him again, asking if he had a duty to disclose that Goldman had an "adverse interest" to the deals being sold to clients, Sparks fidgeted and pretended not to comprehend the question. "Mr. Chairman," he said, "I'm just trying to understand."
OK, fine — non-answer answers. "My guess is they were all pretty well coached up," says Kaufman, the law professor. But then Sparks had a revealing exchange with Sen. Jon Tester of Montana. Tester calls the Goldman deals "a wreck waiting to happen," noting that the CDOs "were all downgraded to junk in very short order."
At which point, Sparks replies, "Well, senator, at the time we did those deals, we expected those deals to perform."
Tester then cannily asks if by "perform," Sparks means go to shit — which would have been an honest answer. "Perform in what way?" Tester asks. "Perform to go to junk so that the shorts made out?"
Unable to resist the taunt, Sparks makes a fateful decision to defend his honor. "To not be downgraded to junk in that short a time frame," he says. Then he pauses and decides to dispense with the hedging phrase "in that short a time frame."
"In fact," Sparks says, "to not be downgraded to junk."
So Sparks goes before Congress and, under oath, tells a U.S. senator that at the time he was selling Timberwolf, he expected it to "perform." But an internal document he approved in May 2007 predicted exactly the opposite, warning that Goldman's mortgage desk expected such deals to "underperform." Here are some other terms that Sparks used in e-mails about the subprime market affecting deals like Timberwolf around that same time: "bad and getting worse," "get out of everything," "game over," "bad news everywhere" and "the business is totally dead."
And we indicted Roger Clemens?

Another extraordinary example of Goldman's penchant for truth avoidance came when Joshua Birnbaum, former head of structured-products trading for the bank, gave a deposition to Levin's committee. Asked point-blank if Goldman's huge "short" on mortgages was an intentional bet against the market or simply a "hedge" against potential losses, Birnbaum played dumb. "I do not know whether the shorts were a hedge," he said. But the committee, it turned out, already knew that Birnbaum had written a memo in which he had spelled out the truth: "The shorts were not a hedge." When Birnbaum's lawyers learned that their client's own words had been used against him, they hilariously sent an outraged letter complaining that Birnbaum didn't know the committee had his memo when he decided to dodge the question. They also submitted a "supplemental" answer. Birnbaum now said, "Having reviewed the document the staff did not previously provide me" — his own words! — "I can now recall that ... I believed ... these short positions were not a hedge." (Goldman, for its part, dismisses Birnbaum as a single trader who "neither saw nor knew the firm's overall risk positions.")
When it came time for Goldman CEO Lloyd Blankfein to testify, the banker hedged and stammered like a brain-addled boxer who couldn't quite follow the questions. When Levin asked how Blankfein felt about the fact that Goldman collected $13 billion from U.S. taxpayers through the AIG bailout, the CEO deflected over and over, insisting that Goldman would somehow have made that money anyway through its private insurance policies on AIG. When Levin pressed Blankfein, pointing out that he hadn't answered the question, Blankfein simply peered at Levin like he didn't understand.
But Blankfein also testified unequivocally to the following:
"Much has been said about the supposedly massive short Goldman Sachs had on the U.S. housing market. The fact is, we were not consistently or significantly net-short the market in residential mortgage-related products in 2007 and 2008. We didn't have a massive short against the housing market, and we certainly did not bet against our clients."
Levin couldn't believe what he was hearing. "Heck, yes, I was offended," he says. "Goldman's CEO claimed the firm 'didn't have a massive short,' when the opposite was true." First of all, in Goldman's own internal memoranda, the bank calls its giant, $13 billion bet against mortgages "the big short." Second, by the time Sparks and Co. were unloading the Timberwolves of the world on their "unicorns" and "flying pigs" in the summer of 2007, Goldman's mortgage department accounted for 54 percent of the bank's risk. That means more than half of all the bank's risk was wrapped up in its bet against the mortgage market — a "massive short" by any definition. Indeed, the bank was betting so much money on mortgages that its executives had become comically blasé about giant swings on a daily basis. When Goldman lost more than $100 million on August 8th, 2007, Montag circulated this e-mail: "So who lost the hundy?"
This month, after releasing his report, Levin sent all of this material to the Justice Department. His conclusion was simple. "In my judgment," he declared, "Goldman clearly misled their clients, and they misled the Congress." Goldman, unsurprisingly, disagreed: "Our testimony was truthful and accurate, and that applies to all of our testimony," said spokesman Michael DuVally. In a statement to Rolling Stone, Goldman insists that its behavior throughout the period covered in the Levin report was consistent with responsible business practice, and that its machinations in the mortgage market were simply an attempt to manage risk.
It wouldn't be hard for federal or state prosecutors to use the Levin report to make a criminal case against Goldman. I ask Eliot Spitzer what he would do if he were still attorney general and he saw the Levin report. "Once the steam stopped coming out of my ears, I'd be dropping so many subpoenas," he says. "And I would parse every potential inconsistency between the testimony they gave to Congress and the facts as we now understand them."
I ask what inconsistencies jump out at him. "They keep claiming they were only marginally short, that it was more just servicing their clients," he says. "But it sure doesn't look like that." He pauses. "They were $13 billion short. That's big — 50 percent of their risk. It was so completely disproportionate."
Lloyd Blankfein went to Washington and testified under oath that Goldman Sachs didn't make a massive short bet and didn't bet against its clients. The Levin report proves that Goldman spent the whole summer of 2007 riding a "big short" and took a multibillion-dollar bet against its clients, a bet that incidentally made them enormous profits. Are we all missing something? Is there some different and higher standard of triple- and quadruple-lying that applies to bank CEOs but not to baseball players?
This issue is bigger than what Goldman executives did or did not say under oath. The Levin report catalogs dozens of instances of business practices that are objectively shocking, no matter how any high-priced lawyer chooses to interpret them: gambling billions on the misfortune of your own clients, gouging customers on prices millions of dollars at a time, keeping customers trapped in bad investments even as they begged the bank to sell, plus myriad deceptions of the "failure to disclose" variety, in which customers were pitched investment deals without ever being told they were designed to help Goldman "clean" its bad inventory. For years, the soundness of America's financial system has been based on the proposition that it's a crime to lie in a prospectus or a sales brochure. But the Levin report reveals a bank gone way beyond such pathetic little boundaries; the collective picture resembles a financial version of The Jungle, a portrait of corporate sociopathy that makes you never want to go near a sausage again.
Upton Sinclair's narrative shocked the nation into a painful realization about the pervasive filth and corruption behind America's veneer of smart, robust efficiency. But Carl Levin's very similar tale probably will not. The fact that this evidence comes from a U.S. senator's office, and not the FBI or the SEC, is itself an element in the worsening tale of lawlessness and despotism that sparked a global economic meltdown. "Why should Carl Levin be the one who needs to do this?" asks Spitzer. "Where's the SEC? Where are any of the regulatory bodies?"
This isn't just a matter of a few seedy guys stealing a few bucks. This is America: Corporate stealing is practically the national pastime, and Goldman Sachs is far from the only company to get away with doing it. But the prominence of this bank and the high-profile nature of its confrontation with a powerful Senate committee makes this a political story as well. If the Justice Department fails to give the American people a chance to judge this case — if Goldman skates without so much as a trial —

The People vs. Goldman Sachs

A Senate committee has laid out the evidence. Now the Justice Department should bring criminal charges

Goldman Sachs CEO Lloyd Blankfein tesifies before the Senate in April 2010

Mark Wilson/Getty Images

The Next New KiwiSaver*

2011-05-09T13:58:00.000-07:00

*(like the next new Whole Earth Catalogue)

In New Zealand we have a pension plan called KiwiSaver. It was set up as a long term saving plan. With a couple of notable exceptions, it can only be accessed by the contributor at retirement. You would think that since it is meant to be from when you start work, to the age of 65, there would be great reluctance to change it by successive governments. Of course, no one would object to a change for the better. But No, the present National Government (on the right) has already made a couple of changes, neither of them beneficial to the participant.

National has now announce that at the coming budget they will make some further changes to KiwiSaver. The first part of this blog is being written before these announcements. The second part will be after they come out.

Part 1
I have long argued that KiwiSaver, in its present form is a scam. I define a scam as a system that makes the mark think he is getting something for nothing and hence make him willing to part with his money. My objections to Kiwi Saver in its present form are the following

Firstly, the government contributes a matching amount up to a little over a thousand dollars a year. Sounds good doesn't it. But whose money is this they are giving you. You guessed it. It is your money, previously collected through taxes with the act of collection siphoning part of it off*. If the government incurs this added expense it has three options. It can a) raise taxes, it can b) reduce services or it can c) borrow more money resulting in us and future generations of Kiwis going further into debt. Note that in this connection, we are at present borrowing huge amounts of money sometimes quoted at about $300m per week and our GST has just gone up from 12.5% to 15%.

*People are needed to administrate the collection and distribution of taxes. The more different taxes you collect and the more different ways you distribute it, the more people you need. Lets say, for the sake of argument, tax collection is 90% efficient. That means for every $1000 you collect you only have $900 in the government coffers for doing the government work.

My second objection is the employee contribution. Any CEO worth his inflated salary will simply calculate how much the great privilege of having you work for him is worth and deduct the KiwiSaver contribution from your salary. Again making you think you are getting something for nothing.

My third objection and the way KiwiSaver could be made worthwhile without the bribes is as follows.

At present KiwiSaver contributions are after taxes. If you are in the 33% tax bracket, you have to earn $150 in order to have $100 to contribute. This means you already start well behind the starting line. The interest on your KiwiSaver investment has to get you back up to $150 before you even start to get ahead*.

*I can just hear the critics say, but you are getting capital gains. I don't know what you think but I am a little jaded with the promise of long term capital gains after that events of the last few years.

You are also taxed on dividends and interest and to add insult to injury, you are taxed on the whole amount you earn, not the part that is above inflation. Who controls inflation. There are many outside influences but in so far as it can, the government does. We have about 3% inflation in New Zealand so at the end of the first year with your investment of $100, you have to have $103 in the bank just to have the same buying power. Your dividends are also taxed at your marginal rate so if you get an investment that earns 6%, you have $106 at the end of the year. Since you have earned $6, you are taxed $2. You are left with $104. This is a real earning of only $1 on an investment of $100. It turns out that at this 1% true interest*, it will take you about 40 years to get back to the buying power of the original $150 that you earned.

*It is actually 0.97% interest but let's not quibble

Clearly the solution is a) to let you invest before taxes and b) to be allowed tokeep your earnings or at the very least, pay tax on your true earnings.

End of part 1. We wait in great anticipation for the announcement.

Part 2
We now have the new version. The government contribution is halved and the minimum contribution from the worker and his boss is 3% rather than 2%. The government contribution is still a fiction. They are taking money from us in taxes so that they can give it back in KiwiSaver. The Employer contribution is still a fiction. Your boss will still reduce your salary (or not let it rise as fast as it otherwise would) so he can pay this contribution and for the individual, the scheme is less worthwhile an investment. No reduction in taxation on the portion you contribute has been made and your dividends and interest are still taxed at your marginal rate with no allowance made for inflation. Not a pretty picture.

Eric's Beavers

2011-05-08T22:13:00.000-07:00

One of my favorite books is Three Against the Wilderness, which describes how Eric Collier, his wife Lily and his son Veasy trekked up to the headwaters of Meldrum Creek not far from Williams Lake, BC, Canada and trapped furs for a living. When they got there, the land was desolate and there was not much of fur bearing use except coyotes. It was Lily's ancient Grandmother, a full blooded Indian, who suggested they go to that area. Eric recounts:

    One evening while I squatted by her campfire, studying her wrinkled face, I said, "No trout stop now, Lala. Just suckers and squawfish. And now the Indians never bring beaver pelts to the store to make trade"
     She shook her head. Her scraggy hand sought and found my arm. Her fingers gouged into it's flesh. Lifting her blank eyes to my face, she said swiftly. "No, Not'ing stop now". Her fingers relaxed their grip. Suddenly she demanded.

     "You know why?"
     I pondered this a moment, then hazarded, "Is it because of the beavers?"
     "Aiya, the beavers!" I filled her pipe from the sack of tobacco I had fetched her from the store, passed it over to her and held a faggot to its bowl. She sucked deeply at the stem, imprisoned the smoke in her mouth and then slowly expelled it. "Until white man come," she then went on to explain, "Indian just kill beaver now an' then s'pose he want meat, or skin for blanket. And then, always the creek is full of beaver. But when white man come and give him tobacco, sugar, bad drink, every tam' he fetch beaver skin from creek Indian go crazy and kill beaver all tam'. Again her fingers clawed my arm. Harshly she asked. "What's matter white man no tell Indian -- some beaver you must leave so little one stop next year?. What's matter white man no tell Indian s'pose you take all beaver, bimeby (by and by) all water go too. And if water go, no trout, no fur, no grass, not'ing stop?"
     After a few contemplative moments she suggested, "Why you no go that creek (Meldrum) and give it back the beavers? You young man, you like hunt and trap. S'pose once again the creek full of beavers, maybe trout come back. And ducks and geese come back too, and big marshes be full of muskrats again all same when me little girl. And where muskrat stop, mink and otter stop too. Aiya! Why you no go that creek with Lily and live there all tam', and give it back the beavers."

That ancient Indian lady knew a thing or two that wildlife and fisheries biologists are only just reluctantly coming to terms with now.


Hand built dam is now overgrown with poplars*.

Of course there were no beavers around. They had been exterminated from all but the most remote corners of North America by the fur trappers.   Eric and family got busy rebuilding the beaver dams by hand. The results were spectacular but you will have to read the book to see what resulted. Chapter 18 makes the hair stand up on my neck. It describes how, after 10 years of living in the area, building dams by hand and in so doing, restoring the environment, they acquired their first two pair of beavers which then took over the work of keeping the dams repaired and building new ones. Below is part of chapter 18.

*Click on picture to enlarge

R.M. Robertson, a native of Glasgow, Scotland migrated to Canada in 1910. He homesteaded on the flat plains of Saskatchewan in 1914, owner of one hundred and sixty acres of untiled prairie, his home a small hut with a sod roof. If it had not been for World War I, Mr Robertson might today have been a prosperous prairie farmer, the hut with its sod roof a memory of a day when he hitched his team of horses to the doubletrees of a walking plow and turned the very first furrow in his rich Saskatchewan loam
     But by May 1919, when he stepped out of khaki, all he had in his pocket was a month or two of back pay, plus a hundred or so dollars of gratuity money. He took a two-bit piece from his pocket, flipped it into the air and closed his eyes. Heads he went back to the plow, tails he sought other employment. Tails it was, so with a shrug of the shoulders, the ex-machine gunner turned his back on Saskatchewan's sod and pushed westward into British Columbia. Outdoor life had ever had a magnetic attraction for Robertson's keen mind and in 1920 he joined the staff of the British Columbia Game Department with the rank of game warden.
     Game warden R.M. Robertson never limited his activities to enforcement of regulations alone, or to apprehension and prosecution of offenders under the Game Act. He was more interested in what led a pair of Canada geese back to the few acres of water in which the hen bird had nursed her brood to maturity since first she laid an egg. Of the horns and skull of a bighorn sheep, now crumbling to dust before the indifferent stare of weather, yet still visible on the slope of a hillside that had not been trodden by the species within the memory of living man -- what catastrophe, natural or man -made, had wiped these big game animals from the face of the land? These and a host of similar questions were ever demanding explanation from the game warden, who whenever other duties allowed, was out on moraine-littered slopes or in sombre conifer forests, eyes searching for some clue that might lead him to the answers.

     The divisional inspector followed many a stream bed from source to mouth, examining the foliage that still clung tenaciously to the banks seeking answers as to why they were now dry. And he too sensed that in the prostitution of the beavers lay at least part of the answer.
     Remote though we were in our lonely isolation, not too much touching upon wildlife matters in his division went unheeded by Inspector Robertson. Though no game warden had ever set foot upon it -- at least not since we had come to it -- not only its existence but also something of our activities to do with its beaver dams had reached the inspector's ears. And believing that secondhand knowledge is a sorry substitute for that gained from personal observation, Robertson wrote me that he had decided to visit us and learn of our goings-on for himself.
     One day in late June of 1941 I saddled up my own horse and trailing a spare behind me, rode out to Riske Creek to meet the divisional inspector and guide him back to our cabin at Meldrum Lake. For at that time it never occurred to me that any mechanical vehicle could possibly navigate the rock-littered track.
     He was cooling his heels at the trading post when I arrived with the horses. About five feet nine, graying slightly at the temples, his one hundred seventy-odd pounds of well-knit flesh told of a body well tuned to vigorous outdoor exercise. "He knows what the drag of snowshoes was on a soft day in March.
     Robertson fitted perfectly. His left hand holding the reins was at the cheek strap of the bridle as it should be, his right on the saddle horn and not fumbling with the cantle. When he hosted up he came lightly to rest in the seat, right foot instantly finding the stirrup. The inspector was as used to the unpredictable manners of horseflesh as any cowpuncher working for the ranchers hereabouts.
     Not too much talk flowed between us as now at a trot, now at gallop, with the occasional walking gait between, our horses put the miles behind them. That was another thing I liked about the man; instead of bothering me with small talk, he held his breath and gave all his attention to the countryside, marking a deer track when one crossed the road or the dusting place of a grouse whenever we passed one.
     Before getting back to Meldrum Lake, one minor incident took place that told me much of the mettle of the man who rode thoughtfully at my side. We were skirting a small lake whose shoreline was fringed with a waving growth of foxtail grass, now heading out. I was watching a brood of young ducks swimming parallel to the far shore. Suddenly the ducklings huddled together and in close formation moved in toward the shore and the foxtail grass. there they turned and swam parallel to the shore again for a few yards; then, breaking formation, two of them began moving toward dry land.
     The divisional inspector too had his eyes on the ducks. Suddenly he braced back on his stirrups, brought his horse to a stop and sang out, "
Whoa!"
     After staring intently at the other side of the lake, he breathed softly "over there in the foxtail, fifty feet from those two ducks -- can you see it?"
     Then I did see it, something that might have been a clump of foxtail grass waving in the wind but wasn't. "Coyote", I announced.

     "The tail of one, anyway, " agreed the inspector. "The rest of him is hidden in the grass."
     The bushy tail of the coyote was waving gently to and fro like a flag fluttering in the breeze, as the coyote tails have been waving in the long grass at the waters edge ever since there have been coyotes -- and ducks in the nearby water foolish enough to fall for the trick.
     "Curiosity," observed the inspector, "killed a darned sight more than the cat. The owner of that tail is trying to bring one of those ducks within pouncing distance of its jaws by the simple trick of lying flush on his belly and using his brush as a decoy. Inquisitive things, ducks, especially young ones."
     One of the ducklings was now out of the water perched on one leg, watching the movement of the tail. Then at a clumsy waddle it started toward the grass and the predator that lurked there.
     "This," the inspector murmured "we can not allow." And taking a deep breath, he got rid of it in one noisy shout.
     The Coyote heaved upright and for a split second stood broadside to us, ears in our direction. Then his keen eyes spotted us, and wheeling, he streaked off through the grass.
     Quacking noisily, the inquisitive duckling scrambled for the water and splashed out to the others. And breasts low to the water the brood moved into a clump of bulrushes out of our sight.
    "Ever see that type of hunting before?" Robertson asked.
     "Only once, I replied. "that time it was a young goose, and the coyote nailed it."
     "I wonder," he mused "how many ducks and geese have fallen for that shabby trick since coyotes first got on to using it?"
     The divisional inspector spent close to a week riding out trapline with me. He fitted into the life as a shoe fits the foot of a well shod horse. Come time to wash the supper dishes, he was out of his chair with the dish towel drying a Lillian washed the. He fired questions at Veasy, hot only those relating to muskrats or mink, or deer and moose, but also may others to do with mathematics and geography and history and other subjects, usually talked of in a schoolroom.
And to Lillian he said with a wink, "The adage 'spare the rod and spoil the child' doesn't apply here."
On the final day of his stay with us, while staring thoughtfully out across one of the marshes, he said musingly, "It seems to me you could well use a bit of help in looking after all these dams. Did it ever occur to you that if one happened to go out, the sudden rush of water would likely take a few others out below?'
   The thought of that had been bothering us for quite some time now.
At the time of spring freshet, or indeed when swollen by summer thundershowers, Meldrum Creek now more resembled a young river than any minor creek. A river, moreover, that was barricaded here and there by some twenty-five dams lacking any proper spillway. So far, none of the dams had been badly breached, thanks mainly to the mass of spruce boughs re-enforcing them. But eventually the boughs must rot, and the dams settle, as some were doing already. And if one of the major dams were to give, it was a highly debatable question, whether those below it could withstand the sweep of water that would come pressing in on them.
     As if arriving at some major decision within his own mind, but saying nothing of it to me, he repeated, "Yes, you obviously need some help." But of what such help might consist of or where it was to come from he offered no clue at all. Nor were we to be enlightened for a little while yet.
   Later in the year, writing in the Report of the Provincial Game Commission, Inspector Robertson had this to say: "While on a recent patrol of inspection covering the trapline of Eric Collier, of Meldrum Lake, the potentialities of wildlife propagation were amply demonstrated on this trapline. With use of only a pick, shovel, and wheelbarrow, Mr Collier dammed up some twenty-five of the old disused swamp lands which were once the habitat of beavers, muskrats, and other fur-bearers. These areas ranged in size from eighty to five hundred acres each. The runoff of the winter snows were held and the swamps re-flooded. This was followed by the rapid appearance of muskrats and other fir bearers, waterfowl and big game, as numerous tracks testified. In fact the whole situation and appearance of the country changed from one of apparent stillness and dearth of life to animation and restoration of its pristine condition. The irrigation problems of an area contiguous to the Collier Trapline have been largely solved as a result of the above project. The Collier project on the headwaters of Meldrum Creek is a brilliant example of what can be done in this very fertile field of endeavour."
     These then were the thoughts of Inspector Robertson of the British Columbia Game Department concerning the events that had befallen Meldrum Creek since we came to its headwaters. But not until early the following September was I again reminded of his suggestion that "you could well do with a bit of help in maintaining all these dams."
     It was 10:30 A.M. Lillian was busy with her sewing, stitching her winter mittens. Veasy was hunched over the table, exploring the mysteries of algebra. And I was checking traps to make sure their triggering was alright before we set them out in the woods.
     Suddenly Veasy's back straightened and he sat bolt upright, listening. "What's that?" he exclaimed.
     I too listened a moment, then shrugged my shoulders indifferently as the faint hum of a motor came to my ears. "Only a plane following the Frazer River north." I said. For Canadian Pacific Airlines was now operating a plane service between Vancouver, B.C. and Whitehorse in the Yukon, and their aircraft often passed high over our cabin.
     "That's no airplane," Veasy insisted.
     "Then what the heck is it?"
     "A car."
     "A car? Back here in this neck of the woods!" I shook my head. It was inconceivable.
     "It is a car," persisted Veasy, now from the open door. "It's back there in the jack pines yet, but it's a car and it's coming in here."
     Lillian was at my heels as I heaved out through the door, and together we stood there, gawking in amazement.
     "Veasy's right," I said slowly. "it couldn't be , but it is a car."
     The uneven throb of an automobile motor, hauling its chassis over a track that was far more suited to steel-tired wheels than one moving on rubber, was now certainly no trick of imagination. A car was out there on our road, still perhaps a half -mile or more from the cabin but getting closer by the minute. Soon we caught a flash of its blue body among the jack pines, moving very slowly and cautiously but moving just the same. And we stood there, blinking and wondering.
     The automobile eased to a stop alongside us, and its driver lurched out of the seat, staggering a little as one is likely to stagger who suddenly finds his legs after being seated far too long. He was lean and tall, between forty-five and fifty, his eyes for want of sleep, and yesterday's stubble still on his chin. But who was he, and what was he doing back here?
     The stranger himself quickly answered that question. "Game Warden Mottishaw, Quesnel Detachment, B.C. Game Department," he introduced himself crisply. "You're Eric Collier --- right?"
     I inclined my head. "Himself. And this is my wife and son -- Lillian and Veasy."
     The game warden touched his cap, smiled a little and said. "I've already heard about Lillian and Veasy." Then his eyes went to his car. He frowned. "What a road! Two blowouts, a broken spring, a buckled fender and a leak in the radiator. I stopped that with chewing gum. Why in heck don't you move some of those rocks and roots out of the right-of-way?" he barked.
     We've only been back here ten years," I grinned. "Never got around to fixing up the road yet. Hope to someday, though."
     The game warden dropped down on a block of wood and pushed back his cap with a slow, tired movement. He wasn't wearing any uniform, just an old pair of tweed pants and a coat of a similar material. "Never mind," he said. "I got here even if I did have to drive all night to do it. But they're still breathing, and that's all that counts."
     Veasy's every attention was being devoted to the automobile. he was fascinated by it. He walked slowly around it, examining its tires, fenders and springs. then he went down on his hands and knees, looking at its underbelly. He peeked into the cab, at the instrument panel and the gearshift. Then he stepped away, nodding his head, as if all that he'd seen was good.
     Making wild guesses as to who "was still breathing," I said to our visitor. "Step inside; it'll only take Lillian a jiffy to brew a pot of coffee and to get you a bite to eat." He certainly seemed in need of food and drink.
     But apparently he didn't hear me. He was at the rear of the car, fiddling with the handle of the trunk. "Well, where are you going to put them? he asked sharply.
     I looked at him in bewilderment. "Put what?"
     "Haven't got the faintest idea, eh?" he said. "Here, maybe that'll explain." And he tossed a somewhat soiled envelope over to me.
     I tore open the flap and unfolded the single sheet of paper inside. The words danced at me as I slowly read them, and their full meaning sank in.

     "Guard them and care for them as if they were children. They're worth their weight in gold and if anything happens to these, you'll not be getting any more from us."

That's what the paper said and the brief note was signed R.M. Robertson, I/C C Game Division.
     I dropped down on a fender of the car, trying to steady my voice and my thoughts. You mean they are----" I began falteringly. Then I broke off trying to collect my wits, eyes glued on the open trunk of the car. "Beavers?" I gulped, scarce daring to utter the work.
     "Two pairs," the game warden affirmed crisply. "Live trapped at the Bowron Lake Game Reserve for liberation on Meldrum Creek. And I'd have you know that game reserve is two hundred and fifty miles north of here, and those beavers have been cooped up in the trunk of the car too long now. We've got to get them into the water, and the sooner the better. Where are you going to liberate them?"
     The irrigation dam was the closest and most logical spot in which to set the beavers free. Each beaver had an oblong tin box all to itself,and one at a time we carried the boxes onto the dam.
     "One pair are two-year olds, the other three," the game warden informed us as he opened the drop doors of the cages. Each box had to be tilted on end before its prisoners would come out.
     One at a time the beavers were coaxed away from their containers, and one by one they crouched low to the ground, eyes blinking stupidly at the sudden light, nostrils working. Then the largest one of the lot, a male, I judged, went erect on the webbing of its hind feet, forepaws doubled against its chest, as if in prayer.
     Smells mighty good, doesn't it big boy?" chuckled the game warden. "And it'll feel a darned sight better than it smells. So get going."
     Now that he winded the nearby water, the buck beaver waddled clumsily along the dam a few feet and then slid into the pond. And with scarcely a telltale ripple vanished into its depths. One at a time the others took to the water at the selfsame spot, and in a few seconds, not a trace of them was to be seen.

If you want to read about the effect those beavers had on the area, you will have to get the book but let me assure you the effects were profound. Another chapter that I find particularly amazing describes the flood of 1948 which inundated the Frazer Delta - but I don't want to spoil the story for you.

President Obama's Fiscal Policy speach

2011-04-15T13:29:00.000-07:00

I want to have this were I can find it quickly and read it again so I have posted it on my blog. I've never heard any other politician telling it the way it is in clear straight forward language the way President Obama does and I have never heard such opposition to any other politician. Clearly, he is stepping on the toes that need stepping on. The people of America are not going to get any joy from their Senate or Congress. They must make a pact with their president and force these antidiluvain reprobates to do what is needed. Obama only has one more term to save America from her slide into obscurity and if we are lucky, after that Clinton will take over for 8 years. If the Republicans get back into power any time soon - that is that.

For Immediate Release

April 13, 2011

Remarks by the President on Fiscal Policy

George Washington University

Washington, D.C.

1:48 P.M. EDT

THE PRESIDENT: Thank you very much. (Applause.) Please have a seat. Please have a seat, everyone.

It is wonderful to be back at GW. I want you to know that one of the reasons that I worked so hard with Democrats and Republicans to keep the government open was so that I could show up here today. I wanted to make sure that all of you had one more excuse to skip class. (Laughter.) You’re welcome. (Laughter.)

I want to give a special thanks to Steven Knapp, the president of GW. I just saw him -- where is he? There he is right there. (Applause.)
We've got a lot of distinguished guests here -- a couple of people I want to acknowledge. First of all, my outstanding Vice President, Joe Biden, is here. (Applause.) Our Secretary of the Treasury, Tim Geithner, is in the house. (Applause.) Jack Lew, the Director of the Office of Mangement and Budget. (Applause.) Gene Sperling, Chair of the National Economic Council, is here. (Applause.) Members of our bipartisan Fiscal Commission are here, including the two outstanding chairs -- Erskine Bowles and Alan Simpson -- are here. (Applause.)

And we have a number of members of Congress here today. I'm grateful for all of you taking the time to attend.
What we’ve been debating here in Washington over the last few weeks will affect the lives of the students here and families all across America in potentially profound ways. This debate over budgets and deficits is about more than just numbers on a page; it’s about more than just cutting and spending. It’s about the kind of future that we want. It’s about the kind of country that we believe in. And that’s what I want to spend some time talking about today.
From our first days as a nation, we have put our faith in free markets and free enterprise as the engine of America’s wealth and prosperity. More than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government.

But there’s always been another thread running through our history -– a belief that we’re all connected, and that there are some things we can only do together, as a nation. We believe, in the words of our first Republican President, Abraham Lincoln, that through government, we should do together what we cannot do as well for ourselves.

And so we’ve built a strong military to keep us secure, and public schools and universities to educate our citizens. We’ve laid down railroads and highways to facilitate travel and commerce. We’ve supported the work of scientists and researchers whose discoveries have saved lives, unleashed repeated technological revolutions, and led to countless new jobs and entire new industries. Each of us has benefitted from these investments, and we’re a more prosperous country as a result.

Part of this American belief that we’re all connected also expresses itself in a conviction that each one of us deserves some basic measure of security and dignity. We recognize that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff may strike any one of us. “There but for the grace of God go I,” we say to ourselves. And so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, those with disabilities. We’re a better country because of these commitments. I’ll go further. We would not be a great country without those commitments.

Now, for much of the last century, our nation found a way to afford these investments and priorities with the taxes paid by its citizens. As a country that values fairness, wealthier individuals have traditionally borne a greater share of this burden than the middle class or those less fortunate. Everybody pays, but the wealthier have borne a little more. This is not because we begrudge those who’ve done well -– we rightly celebrate their success. Instead, it’s a basic reflection of our belief that those who’ve benefited most from our way of life can afford to give back a little bit more. Moreover, this belief hasn’t hindered the success of those at the top of the income scale. They continue to do better and better with each passing year.

Now, at certain times -– particularly during war or recession -– our nation has had to borrow money to pay for some of our priorities. And as most families understand, a little credit card debt isn’t going to hurt if it’s temporary.
But as far back as the 1980s, America started amassing debt at more alarming levels, and our leaders began to realize that a larger challenge was on the horizon. They knew that eventually, the Baby Boom generation would retire, which meant a much bigger portion of our citizens would be relying on programs like Medicare, Social Security, and possibly Medicaid. Like parents with young children who know they have to start saving for the college years, America had to start borrowing less and saving more to prepare for the retirement of an entire generation.

To meet this challenge, our leaders came together three times during the 1990s to reduce our nation’s deficit -- three times. They forged historic agreements that required tough decisions made by the first President Bush, then made by President Clinton, by Democratic Congresses and by a Republican Congress. All three agreements asked for shared responsibility and shared sacrifice. But they largely protected the middle class; they largely protected our commitment to seniors; they protected our key investments in our future.
As a result of these bipartisan efforts, America’s finances were in great shape by the year 2000. We went from deficit to surplus. America was actually on track to becoming completely debt free, and we were prepared for the retirement of the Baby Boomers.

But after Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program -– but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts -– tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.
To give you an idea of how much damage this caused to our nation’s checkbook, consider this: In the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.

But that’s not what happened. And so, by the time I took office, we once again found ourselves deeply in debt and unprepared for a Baby Boom retirement that is now starting to take place. When I took office, our projected deficit, annually, was more than $1 trillion. On top of that, we faced a terrible financial crisis and a recession that, like most recessions, led us to temporarily borrow even more.

In this case, we took a series of emergency steps that saved millions of jobs, kept credit flowing, and provided working families extra money in their pocket. It was absolutely the right thing to do, but these steps were expensive, and added to our deficits in the short term.

So that’s how our fiscal challenge was created. That’s how we got here. And now that our economic recovery is gaining strength, Democrats and Republicans must come together and restore the fiscal responsibility that served us so well in the 1990s. We have to live within our means. We have to reduce our deficit, and we have to get back on a path that will allow us to pay down our debt. And we have to do it in a way that protects the recovery, protects the investments we need to grow, create jobs, and helps us win the future.

Now, before I get into how we can achieve this goal, some of you, particularly the younger people here -- you don't qualify, Joe. (Laughter.) Some of you might be wondering, “Why is this so important? Why does this matter to me?”
Well, here’s why. Even after our economy recovers, our government will still be on track to spend more money than it takes in throughout this decade and beyond. That means we’ll have to keep borrowing more from countries like China. That means more of your tax dollars each year will go towards paying off the interest on all the loans that we keep taking out. By the end of this decade, the interest that we owe on our debt could rise to nearly $1 trillion. Think about that. That's the interest -- just the interest payments.
Then, as the Baby Boomers start to retire in greater numbers and health care costs continue to rise, the situation will get even worse. By 2025, the amount of taxes we currently pay will only be enough to finance our health care programs -- Medicare and Medicaid -- Social Security, and the interest we owe on our debt. That’s it. Every other national priority -– education, transportation, even our national security -– will have to be paid for with borrowed money.

Now, ultimately, all this rising debt will cost us jobs and damage our economy. It will prevent us from making the investments we need to win the future. We won’t be able to afford good schools, new research, or the repair of roads -– all the things that create new jobs and businesses here in America. Businesses will be less likely to invest and open shop in a country that seems unwilling or unable to balance its books. And if our creditors start worrying that we may be unable to pay back our debts, that could drive up interest rates for everybody who borrows money -– making it harder for businesses to expand and hire, or families to take out a mortgage.

Here’s the good news: That doesn’t have to be our future. That doesn’t have to be the country that we leave our children. We can solve this problem. We came together as Democrats and Republicans to meet this challenge before; we can do it again.

But that starts by being honest about what’s causing our deficit. You see, most Americans tend to dislike government spending in the abstract, but like the stuff that it buys. Most of us, regardless of party affiliation, believe that we should have a strong military and a strong defense. Most Americans believe we should invest in education and medical research. Most Americans think we should protect commitments like Social Security and Medicare. And without even looking at a poll, my finely honed political instincts tell me that almost nobody believes they should be paying higher taxes. (Laughter.)
So because all this spending is popular with both Republicans and Democrats alike, and because nobody wants to pay higher taxes, politicians are often eager to feed the impression that solving the problem is just a matter of eliminating waste and abuse. You’ll hear that phrase a lot. “We just need to eliminate waste and abuse.” The implication is that tackling the deficit issue won’t require tough choices. Or politicians suggest that we can somehow close our entire deficit by eliminating things like foreign aid, even though foreign aid makes up about 1 percent of our entire federal budget.

So here’s the truth. Around two-thirds of our budget -- two-thirds -- is spent on Medicare, Medicaid, Social Security, and national security. Two-thirds. Programs like unemployment

insurance, student loans, veterans’ benefits, and tax credits for working families take up another 20 percent. What’s left, after interest on the debt, is just 12 percent for everything else. That’s 12 percent for all of our national priorities -- education, clean energy, medical research, transportation, our national parks, food safety, keeping our air and water clean -- you name it -- all of that accounts for 12 percent of our budget.

Now, up till now, the debate here in Washington, the cuts proposed by a lot of folks in Washington, have focused exclusively on that 12 percent. But cuts to that 12 percent alone won’t solve the problem. So any serious plan to tackle our deficit will require us to put everything on the table, and take on excess spending wherever it exists in the budget.

A serious plan doesn’t require us to balance our budget overnight –- in fact, economists think that with the economy just starting to grow again, we need a phased-in approach –- but it does require tough decisions and support from our leaders in both parties now. Above all, it will require us to choose a vision of the America we want to see five years, 10 years, 20 years down the road.
Now, to their credit, one vision has been presented and championed by Republicans in the House of Representatives and embraced by several of their party’s presidential candidates. It’s a plan that aims to reduce our deficit by $4 trillion over the next 10 years, and one that addresses the challenge of Medicare and Medicaid in the years after that.

These are both worthy goals. They’re worthy goals for us to achieve. But the way this plan achieves those goals would lead to a fundamentally different America than the one we’ve known certainly in my lifetime. In fact, I think it would be fundamentally different than what we’ve known throughout our history.

A 70 percent cut in clean energy. A 25 percent cut in education. A 30 percent cut in transportation. Cuts in college Pell Grants that will grow to more than $1,000 per year. That’s the proposal. These aren’t the kind of cuts you make when you’re trying to get rid of some waste or find extra savings in the budget. These aren’t the kinds of cuts that the Fiscal Commission proposed. These are the kinds of cuts that tell us we can’t afford the America that I believe in and I think you believe in.

I believe it paints a vision of our future that is deeply pessimistic. It’s a vision that says if our roads crumble and our bridges collapse, we can’t afford to fix them. If there are bright young Americans who have the drive and the will but not the money to go to college, we can’t afford to send them.
Go to China and you’ll see businesses opening research labs and solar facilities. South Korean children are outpacing our kids in math and science. They’re scrambling to figure out how they put more money into education. Brazil is investing billions in new infrastructure and can run half their cars not on high-priced gasoline, but on biofuels. And yet, we are presented with a vision that says the American people, the United States of America -– the greatest nation on Earth -– can’t afford any of this.

It’s a vision that says America can’t afford to keep the promise we’ve made to care for our seniors. It says that 10 years from now, if you’re a 65-year-old who’s eligible for Medicare, you should have to pay nearly $6,400 more than you would today. It says instead of guaranteed health care, you will get a voucher. And if that voucher isn’t worth enough to buy the insurance that’s available in the open marketplace, well, tough luck -– you’re on your own. Put simply, it ends Medicare as we know it.

It’s a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit. Who are these 50 million Americans? Many are somebody’s grandparents -- may be one of yours -- who wouldn’t be able to afford nursing home care without Medicaid. Many are poor children. Some are middle-class families who have children with autism or Down’s syndrome. Some of these kids with disabilities are -- the disabilities are so severe that they require 24-hour care. These are the Americans we’d be telling to fend for themselves.

And worst of all, this is a vision that says even though Americans can’t afford to invest in education at current levels, or clean energy, even though we can’t afford to maintain our commitment on Medicare and Medicaid, we can somehow afford more than $1 trillion in new tax breaks for the wealthy. Think about that.

In the last decade, the average income of the bottom 90 percent of all working Americans actually declined. Meanwhile, the top 1 percent saw their income rise by an average of more than a quarter of a million dollars each. That’s who needs to pay less taxes?

They want to give people like me a $200,000 tax cut that’s paid for by asking 33 seniors each to pay $6,000 more in health costs. That’s not right. And it’s not going to happen as long as I’m President. (Applause.)
This vision is less about reducing the deficit than it is about changing the basic social compact in America. Ronald Reagan’s own budget director said, there’s nothing “serious” or “courageous” about this plan. There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don't think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill. That's not a vision of the America I know.
The America I know is generous and compassionate. It’s a land of opportunity and optimism. Yes, we take responsibility for ourselves, but we also take responsibility for each other; for the country we want and the future that we share. We’re a nation that built a railroad across a continent and brought light to communities shrouded in darkness. We sent a generation to college on the GI Bill and we saved millions of seniors from poverty with Social Security and Medicare. We have led the world in scientific research and technological breakthroughs that have transformed millions of lives. That’s who we are. This is the America that I know. We don’t have to choose between a future of spiraling debt and one where we forfeit our investment in our people and our country.

To meet our fiscal challenge, we will need to make reforms. We will all need to make sacrifices. But we do not have to sacrifice the America we believe in. And as long as I’m President, we won’t.

So today, I’m proposing a more balanced approach to achieve $4 trillion in deficit reduction over 12 years. It’s an approach that borrows from the recommendations of the bipartisan Fiscal Commission that I appointed last year, and it builds on the roughly $1 trillion in deficit reduction I already proposed in my 2012 budget. It’s an approach that puts every kind of spending on the table -- but one that protects the middle class, our promise to seniors, and our investments in the future.

The first step in our approach is to keep annual domestic spending low by building on the savings that both parties agreed to last week. That step alone will save us about $750 billion over 12 years. We will make the tough cuts necessary to achieve these savings, including in programs that I care deeply about, but I will not sacrifice the core investments that we need to grow and create jobs. We will invest in medical research. We will invest in clean energy technology. We will invest in new roads and airports and broadband access. We will invest in education. We will invest in job training. We will do what we need to do to compete, and we will win the future.

The second step in our approach is to find additional savings in our defense budget. Now, as Commander-in-Chief, I have no greater responsibility than protecting our national security, and I will never accept cuts that compromise our ability to defend our homeland or America’s interests around the world. But as the Chairman of the Joint Chiefs, Admiral Mullen, has said, the greatest long-term threat to America’s national security is America’s debt. So just as we must find more savings in domestic programs, we must do the same in defense. And we can do that while still keeping ourselves safe.

Over the last two years, Secretary Bob Gates has courageously taken on wasteful spending, saving $400 billion in current and future spending. I believe we can do that again. We need to not only eliminate waste and improve efficiency and effectiveness, but we’re going to have to conduct a fundamental review of America’s missions, capabilities, and our role in a changing world. I intend to work with Secretary Gates and the Joint Chiefs on this review, and I will make specific decisions about spending after it’s complete.

The third step in our approach is to further reduce health care spending in our budget. Now, here, the difference with the House Republican plan could not be clearer. Their plan essentially lowers the government’s health care bills by asking seniors and poor families to pay them instead. Our approach lowers the government’s health care bills by reducing the cost of health care itself.
Already, the reforms we passed in the health care law will reduce our deficit by $1 trillion. My approach would build on these reforms. We will reduce wasteful subsidies and erroneous payments. We will cut spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency and speed generic brands of medicine onto the market. We will work with governors of both parties to demand more efficiency and accountability from Medicaid.
We will change the way we pay for health care -– not by the procedure or the number of days spent in a hospital, but with new incentives for doctors and hospitals to prevent injuries and improve results. And we will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services that seniors need.

Now, we believe the reforms we’ve proposed to strengthen Medicare and Medicaid will enable us to keep these commitments to our citizens while saving us $500 billion by 2023, and an additional $1 trillion in the decade after that. But if we’re wrong, and Medicare costs rise faster than we expect, then this approach will give the independent commission the authority to make additional savings by further improving Medicare.

But let me be absolutely clear: I will preserve these health care programs as a promise we make to each other in this society. I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry, with a shrinking benefit to pay for rising costs. I will not tell families with children who have disabilities that they have to fend for themselves. We will reform these programs, but we will not abandon the fundamental commitment this country has kept for generations.

That includes, by the way, our commitment to Social Security. While Social Security is not the cause of our deficit, it faces real long-term challenges in a country that’s growing older. As I said in the State of the Union, both parties should work together now to strengthen Social Security for future generations. But we have to do it without putting at risk current retirees, or the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market. And it can be done.

Emphasis mine

The fourth step in our approach is to reduce spending in the tax code, so-called tax expenditures. In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans. But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can’t afford it. And I refuse to renew them again.

Beyond that, the tax code is also loaded up with spending on things like itemized deductions. And while I agree with the goals of many of these deductions, from homeownership to charitable giving, we can’t ignore the fact that they provide millionaires an average tax break of $75,000 but do nothing for the typical middle-class family that doesn’t itemize. So my budget calls for limiting itemized deductions for the wealthiest 2 percent of Americans -- a reform that would reduce the deficit by $320 billion over 10 years.

But to reduce the deficit, I believe we should go further. And that’s why I’m calling on Congress to reform our individual tax code so that it is fair and simple -- so that the amount of taxes you pay isn’t determined by what kind of accountant you can afford.

I believe reform should protect the middle class, promote economic growth, and build on the fiscal commission’s model of reducing tax expenditures so that there’s enough savings to both lower rates and lower the deficit. And as I called for in the State of the Union, we should reform our corporate tax code as well, to make our businesses and our economy more competitive.

So this is my approach to reduce the deficit by $4 trillion over the next 12 years. It’s an approach that achieves about $2 trillion in spending cuts across the budget. It will lower our interest payments on the debt by $1 trillion. It calls for tax reform to cut about $1 trillion in tax expenditures -- spending in the tax code. And it achieves these goals while protecting the middle class, protecting our commitment to seniors, and protecting our investments in the future.

Now, in the coming years, if the recovery speeds up and our economy grows faster than our current projections, we can make even greater progress than I’ve pledged here. But just to hold Washington -- and to hold me --- accountable and make sure that the debt burden continues to decline, my plan includes a debt failsafe. If, by 2014, our debt is not projected to fall as a share of the economy -– if we haven’t hit our targets, if Congress has failed to act -– then my plan will require us to come together and make up the additional savings with more spending cuts and more spending reductions in the tax code. That should be an incentive for us to act boldly now, instead of kicking our problems further down the road.

So this is our vision for America -– this is my vision for America -- a vision where we live within our means while still investing in our future; where everyone makes sacrifices but no one bears all the burden; where we provide a basic measure of security for our citizens and we provide rising opportunity for our children.

There will be those who vigorously disagree with my approach. I can guarantee that as well. (Laughter.) Some will argue we should not even consider ever -- ever -- raising taxes, even if only on the wealthiest Americans. It’s just an article of faith to them. I say that at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more. I don’t need another tax cut. Warren Buffett doesn’t need another tax cut. Not if we have to pay for it by making seniors pay more for Medicare. Or by cutting kids from Head Start. Or by taking away college scholarships that I wouldn’t be here without and that some of you would not be here without.

And here’s the thing: I believe that most wealthy Americans would agree with me. They want to give back to their country, a country that’s done so much for them. It’s just Washington hasn’t asked them to.

Others will say that we shouldn’t even talk about cutting spending until the economy is fully recovered. These are mostly folks in my party. I’m sympathetic to this view -- which is one of the reasons I supported the payroll tax cuts we passed in December. It’s also why we have to use a scalpel and not a machete to reduce the deficit, so that we can keep making the investments that create jobs. But doing nothing on the deficit is just not an option. Our debt has grown so large that we could do real damage to the economy if we don’t begin a process now to get our fiscal house in order.

Finally, there are those who believe we shouldn’t make any reforms to Medicare, Medicaid, or Social Security, out of fear that any talk of change to these programs will immediately usher in the sort of steps that the House Republicans have proposed. And I understand those fears. But I guarantee that if we don’t make any changes at all, we won’t be able to keep our commitment to a retiring generation that will live longer and will face higher health care costs than those who came before.

Indeed, to those in my own party, I say that if we truly believe in a progressive vision of our society, we have an obligation to prove that we can afford our commitments. If we believe the government can make a difference in people’s lives, we have the obligation to prove that it works -– by making government smarter, and leaner and more effective.

Of course, there are those who simply say there’s no way we can come together at all and agree on a solution to this challenge. They’ll say the politics of this city are just too broken; the choices are just too hard; the parties are just too far apart. And after a few years on this job, I have some sympathy for this view. (Laughter.)

But I also know that we’ve come together before and met big challenges. Ronald Reagan and Tip O’Neill came together to save Social Security for future generations. The first President Bush and a Democratic Congress came together to reduce the deficit. President Clinton and a Republican Congress battled each other ferociously, disagreed on just about everything, but they still found a way to balance the budget. And in the last few months, both parties have come together to pass historic tax relief and spending cuts.
And I know there are Republicans and Democrats in Congress who want to see a balanced approach to deficit reduction. And even those Republicans I disagree with most strongly I believe are sincere about wanting to do right by their country. We may disagree on our visions, but I truly believe they want to do the right thing.

So I believe we can, and must, come together again. This morning, I met with Democratic and Republican leaders in Congress to discuss the approach that I laid out today. And in early May, the Vice President will begin regular meetings with leaders in both parties with the aim of reaching a final agreement on a plan to reduce the deficit and get it done by the end of June.
I don’t expect the details in any final agreement to look exactly like the approach I laid out today. This a democracy; that’s not how things work. I’m eager to hear other ideas from all ends of the political spectrum. And though I’m sure the criticism of what I’ve said here today will be fierce in some quarters, and my critique of the House Republican approach has been strong, Americans deserve and will demand that we all make an effort to bridge our differences and find common ground.

This larger debate that we’re having -- this larger debate about the size and the role of government -- it has been with us since our founding days. And during moments of great challenge and change, like the one that we’re living through now, the debate gets sharper and it gets more vigorous. That’s not a bad thing. In fact, it’s a good thing. As a country that prizes both our individual freedom and our obligations to one another, this is one of the most important debates that we can have.

But no matter what we argue, no matter where we stand, we’ve always held certain beliefs as Americans. We believe that in order to preserve our own freedoms and pursue our own happiness, we can’t just think about ourselves. We have to think about the country that made these liberties possible. We have to think about our fellow citizens with whom we share a community. And we have to think about what’s required to preserve the American Dream for future generations.

This sense of responsibility -- to each other and to our country -- this isn’t a partisan feeling. It isn’t a Democratic or a Republican idea. It’s patriotism.
The other day I received a letter from a man in Florida. He started off by telling me he didn’t vote for me and he hasn’t always agreed with me. But even though he’s worried about our economy and the state of our politics -- here’s what he said -- he said, “I still believe. I believe in that great country that my grandfather told me about. I believe that somewhere lost in this quagmire of petty bickering on every news station, the ‘American Dream’ is still alive…We need to use our dollars here rebuilding, refurbishing and restoring all that our ancestors struggled to create and maintain…

“I still believe.” I still believe as well. And I know that if we can come together and uphold our responsibilities to one another and to this larger enterprise that is America, we will keep the dream of our founding alive -- in our time; and we will pass it on to our children. We will pass on to our children a country that we believe in.

Thank you. God bless you, and may God bless the United States of America. (Applause.)

Dark matter

2011-04-05T13:07:00.000-07:00

There has been much talk about dark matter in the popular scientific press over the past few years. A major reason for having to hypothesize that such a material exists is the fact that galaxies rotate faster than they should based on the estimated amount of visible matter in them. The heavier a galaxy the faster it rotates. The total weight of visible matter in a galaxy is derived by interpreting the amount of matter that must exist in stars in order to produce the amount of observed electro-magnetic radiation (light and wave lengths longer and shorter). From what I can gather from the popular literature, the scientists are not talking about objects such as planets or dust clouds which are made out of ordinary matter or even of black holes which are made of highly compressed conventional matter and all of which are dark. They are talking about some totally different type of material which has weight such as the elusive WHIMPS.

Right at the outset, I have to admit that I am a Newtonian physicist. I taught senior physics in high school and that is the limit of my knowledge of the subject. Quantum mechanics, relativity, string theory and such topics are total mysteries to me. Therefore, take what you read, below, with a pinch or two of salt.

What triggered off this blog was reading an article in New Scientist (reference coming as soon as I can find it again) which reported that by looking at the infra red spectrum from other galaxies, they discovered that there are a very large number of red dwarf stars that had not being taken into account in previous estimates of the weight of said galaxies. The thought struck me: how much less dark matter is it now necessary to hypothesize to explain the rotational speed of these galaxies because of this finding. Then I got to thinking about some other possible sources of conventional dark matter (rather than the hypothesized exotic kind)

How about cosmic rays. Has anyone taken them into account. Cosmic rays are not rays any more than alpha rays are rays*. Cosmic rays are nuclei of atoms, some of them at least as far up the periodic table as iron, traveling through space at relativistic speeds. The flux of these particles out here on the fringes of our galaxy, the Milky Way, is not large but consider that our nearest star is 4.3 light years away. Lets say that cosmic rays from that distance heading our way will reach us in 5 years (they are relativistic meaning that they are traveling at a considerable portion of the speed of light). That is a considerable weight of matter. Add to that, that in the center of the milky way, the flux is undoubtedly much larger and that all of space between the stars have these nuclei whizzing around and it adds up to quite a bit of weight. It might even be that since they are relativistic, they are significantly 'heavier' than a similar nuclei at rest (Einstein relativity) and hence have a greater gravitational effect than the same number of nuclei at rest.

*Alpha rays are helium nuclei emitted during the decay of certain radioactive isotopes. They typically are ejected at about 5% of the speed of light. About a tenth of cosmic rays are helium nucleii (alpha particles) Others are much heavier. Some cosmic rays are traveling much faster than radioactive decay alpha 'rays'.

How about light itself. It has been shown that as a ray of light passes by heavy objects** it bends. This is where lensing, which is used to study distant stars and galaxies comes from. If light bends as it comes near an object, it has weight. Again all the light which is traveling within our galaxy adds weight to it. How many tons per second does even our modest sized sun put out. Much of this weight is in the space between the stars in the form of electromagnetic radiation. How much electro-magnetic energy is there within a galaxy and what is its Newtonian weight equivalent.

**One of Einsteins predictions, proven during an eclipse of the sun. I have a problem with this also. Could it not be that this bending is simply light being bent as it passes through the outer atmosphere (solar/stellar wind) similar to the phenomenon that produces our red sun rises and sun sets.

Then there are black holes. Apparently it is thought that a very large black hole exists at the center of each galaxy. Black holes by definition do not give out light. The only way we can infer the weight of black holes is by the speed of rotation of stars around the hole. The heavier the black hole, the faster the rotation. It is also hypothesized that there are black holes within our galaxy. These are also undetectable and give weight to the galaxy*.

*New Scientist 7 May, 2011, p18

Then we have some more prosaic considerations. How about simple shading. If we observe a distant galaxy, many stars are in front of other stars. The stars behind are shaded by nearer stars so we have to make some sort of estimate of how much of the light output of the galaxy is not visible to us. I wonder what assumptions are made to estimate this factor.

Of course there are all the planets, asteroids, dust, dead suns and so forth. Are we basing the estimates of the total aggregate weight of these on the concentration in our local part of the Milky Way galaxy. If we can't see them because they only show up by reflected light, it is hard to estimate how much there is.

At the bottom of the whole controversy is the fact that we can only factor in what we have already found and we are finding new things about our cosmos all the time (like the red dwarfs). I wonder if, as we find more and more, as yet undiscovered sources of conventional mass, the need for exotic dark matter to explain the rotational speed of galaxies will decrease or disappear.

Remember Ocams Razor.

Rebuilding Christchurch

2011-03-09T00:26:00.000-08:00

Creating the Heritage for our Grand Children*

*While this blog talks about Christchurch, some thought should be given to implementing such measures in all areas of New Zealand. All are prone to earthquakes.

My family and I have been very lucky. We live about 50km north of Christchurch and while any earthquake above about a 4.5 rattles our house, only a few ornaments have been knocked off the shelves and the house hasn't taken any damage. It would probably be a different story if a 6.3, like the recent one under Christchurch happened here. One of our sons was driving in Christchurch during the quake and just missed being flattened by a falling building.

Christchurch, despite the damage and loss of life, fared remarkably well. Old brick buildings came down and a couple of modern ones as well. The suspicion at this point is that the modern buildings collapsed because of the soil they were built on rather than any lack of compliance with the building regulations. Our Prime Minister has ordered a full enquiry to get to the bottom of the situation and to see if the earthquake proofing regulations must be updated. Rescue teams from around the world have said that this is the 'best' disaster they have been to in terms of the organization and support from the entire country. Compliments to our leaders past and present.

Despite fairing "remarkably well" it looks as if around a thousand commercial buildings will have to be demolished and that doesn't include residential properties.

Now we have the task of rebuilding Christchurch. This includes both commercial buildings and at an early estimate, 10,000 dwellings. Some heritage buildings will undoubtedly be saved but overwhelmingly we will have to build anew. So what do we want to see in Christchurch.    Below is a hodge podge of ideas in no particular order - brainstorming if you like. I will keep adding to it and if you want to have your say, please make a comment.

The urgent aim at present is just to get the city up and running. It seems very harsh to ask the planners to use this opportunity to create a better city. However, if we don't do so, we will end up with a patch work and much greater expense if we decide to incorporate any of the following ideas later. It will be far less expensive to incorporate them now while the infrastructure is upside down and a huge amount of energy is being put in to restoring Christchurch.

Solar Power*
Just think of the price reduction for quantity we could achieve if we decided to put solar panels on the rooves of every new building or better still, if the technology is up to it, to use solar panels as the roof (saving the cost of the conventional roof). Here I'm not talking about a few panels per building but rather the north facing slope of every new roof completely clad in panels. Technology is well under way, also, that turns windows into solar panels. Every north facing window which receives the sun could incorporate this technology. The reduction for quantity would extend to all the ancillary equipment such as inverters, grid compatibility electronics and so forth. We should get our best people from Pharmac** on the case.

*In March 2011, Japan announced that it is thinking of requiring every new building in Japan to be clad in solar panels. This follows the decline in generating power due to Fukushima.

**Pharmac is our medicine buying organization which results in the medicines we use in New Zealand costing us as little as a tenth of what other first world countries pay (much to the disgust of Big Pharm in America)

With the huge size of the investment involved, we could afford to send a couple of our best engineers on a world tour, starting with and ending with Germany, to thoroughly investigate the state of Solar technology at present. At the same time, we could introduce smart grids to Canterbury. It has to come sometime, and better sooner than later. The same engineers could examine the state of smart grids in the world. There are many problems for power companies associated with the introduction of smart grids and with the incorporation of large sources of renewable energy. The sooner we get a handle on how to manage smart grids and multiple inputs of energy from small generators, the better. Christchurch could turn into a major net generator of electricity. We would soon be running electric cars which are entering the market this year, with stably priced electricity from our own rooves rather than with ever more expensive petrol and too-valuable-to-burn coal. Doing the introduction of solar on this scale would introduce a high level of standardization which would keep the price down for later introductions of solar. It would decrease the cost for anyone with a house that wanted to retrofit solar.

And how about a solar water heater for every new house. An often heard estimate is that a third of the electricity used by a house is to heat its water. Again, huge economies of scale could be achieved by using a standardized water heater for every new house and we produce these in New Zealand. To the government I say don't you dare even think of buying these overseas. We have our own solar water heater industry.

Roof gardens
On rooves not clad with solar panels, how about roof gardens. Many cities are incorporating these now and they can be decorative, making a pleasant place to sit and sip coffee or can even be growing salad greens, tomatoes and herbs for downstairs restaurants. The technology now exists to use very light rooting medium in combination with hydroponics. In some locations, one could even have walk ways between buildings, eliminating the necessity to even come down to ground level to go from, say a cinima to a restaurant

Wood Construction
One of our MP's, Jim Anderton suggested rebuilding with wood. In case you are thinking in terms of 4 X 2 house construction, this is not what is talked about. Laminated wooden beams are incredibly strong and resilient and wooden buildings can be built many stories high. Ply wood cladding, glued and fastened to structural members adds a huge amount of extra strength. Wood is extremely flexible and has great vibration dampening properties. Wood is a particularly easy medium to use to achieve whatever style is desired. Wood construction can be made virtually fire proof, vermin proof and UV proof. I don't think there is any question that wood construction should be very seriously considered and investigated. However, there is a potential problem.

The hidden cost of contracting such work overseas is immense. Instead of buying overseas, let us become the world center for building reconstruction for the earth quake damaged areas of the world using our considerable wood resources to sell know how and value added products.

Insurability
There will be a temptation to do a patch up job on some buildings, notably some of the damaged dwellings. Come the next earth quake, they will be further weakened or destroyed. Insurance companies would be foolish to insure such buildings. The construction must be carried out to a standard such that any building passed will be re insured for the same premium that a similar building in a different location would attract. This must be the criteria for the necessary standard of repair.

For private houses, one can build, for instance, on floating foundations*. With a floating foundation, if another quake does come and the house tilts, it won't break. Houses built on floating foundations won't have liqufaction coming up through the floor. A floating foundation must be strong enough that if it tilts, it can be releveled.    Above all, any rebuilt houses must be earthquake proof.

* A floating foundation is a reinforced cement slab with reinforced beams underneath, all cast in one pour.

Overhead Power Lines
It is very nice having buried power lines but not very practical for an earth quake prone area. Overhead lines are far less vulnerable to damage and are far more quickly and cheaply repaired than buried lines. Some work might be done to reduce the visual impact of overhead power lines but putting them underground should not be considered. If there was some practical way of having water and sewage above ground, that would also be desirable but unfortunately this is probably out of the question. Keeping the power on after a disaster greatly alleviates the suffering of the effected population. Having electricity can help alleviate the lack of piped water and sewage. With power available, one has cooking, heating, water sterilization, and communication. Power tools can be used to repair damage and water can be pumped if a source is available.

Car Charging Points
Electric cars are coming to the market this year (2011). To attain the considerable benefits from electric cars, there must be convenient outlets to charge them. In the rebuild of Christchurch, much road work will have to be done and streets will be dug up to repair sewage, water and electric lines. This is a perfect opportunity to put in the necessary cables which will allow cars to be charged where there are parking meters today and in the parking lots of businesses. They should be card swipe units which allow you to dial how much charge you want and at what priority. In addition, lots should be set aside for the construction of battery changing stations a la Better Place. Whatever the case, lets get the necessary power lines installed while the roads are being dug up anyway.

Sorting out Road Names
How about, while we are at it, sorting out the names of the roads in and around Christchurch. Some roads change their names as many as 5 times as you drive along them. Work out some system of deciding which of these names is to be used and change all the others to fit. Christchurch is a confusing town to navigate in. The CBD is nicely squared off but outside of there, the roads radiate out in every which way. Knowing, for instance, that when you are on Pages road, Baldwin's road, or Aldwin that you are actually on Ensors would greatly aid navigation.

Thermal Mass in Houses
The insulation of a house is only one factor in making it comfortable to live in. A great deal can also be achieved by increasing the thermal mass inside the house and putting the insulation outside rather than in the walls. This evens out temperature variations and retains cold or heat that you have spent money in achieving. If you are using free heat by allowing sun to shine into windows, this heat is retained overnight. If you are cooling by allowing cool air in at night, this is retained through the day.

Heat Exchange Windows
It is highly desirable to have a high level of air exchange in a house. This, however, wastes heat in cold days or wastes "cold" in hot days. You pay money to heat or air condition your house. Windows exist which transfer heat between outgoing and incoming air. They could be considerable improved by using counter-flow technology. Such windows allow a good exchange of air while maintaining the temperature you are trying to achieve in your house. New Zealand could become the leader in this technology while improving the livability of New Zealand homes which are famous for dampness, mold and poor thermal characteristics.

Large Hats
A house avoids a lot of the problems of leaks simply by having a large overhang on the roof. It is not the whole solution but is an important component. Put in the building regulations the requirement for a minimum required overhang. This might be larger for two floor houses than for one floor houses. While we are at it, legislate for only long run roofing. It is light, strong, easily replaced, only dents if something falls on it and "bridges" rather than collapsing if the whole house falls down. It needs lighter underlying construction than ceramic or cement rooves and hence makes a more earthquake resistant dwelling. Who in their right mind would want a great weight of fragile cement above them when an earthquake hits. Better still, make the roof cladding out of solar panels.

Chimneys
It hardly needs stating that brick chimneys are out. If you must have the style get one of the fibre glass ones with a steel flue inside.   If someone insists on a brick chimney, cancel his insurance. The fire service wasted thousands of hours taking down brick chimneys when they should have been doing far more vital work. While we are at it, brick chimneys should be eliminated from all of New Zealand. No place on our islands is immune from earthquakes. Cut the gorgons knot.

The Christchurch Earthquake

2011-03-04T13:00:00.000-08:00

I'm writing this blog as if it is fact. It isn't. It is pure speculation. Joining the dots if you like and perhaps I am seeing spots in front of my eyes. Below is a tentative explanation of why the recent 6.3, highly destructive Christchurch earthquake occurred.

Many millions of years ago a volcano erupted on the continent of Zelandia. Many years later, despite the fact that the local people called it Te-ahu-patiki* a European explorer would name it The Banks Peninsula.

*Actually, this is the name for one part of the Peninsula but it seems to be the nearest to a name that applies to the whole mountain.

The volcano erupted offshore and grew as more lava poured out of the earth. Erosion moved rock and soil down hill. Eventually the eroded material joined the volcano to the nearby land aided by the material being washed seaward from the young rising mountain range to the west*.

*Because of the huge amount of material shed from the New Zealand Alps, the rivers, when they reach the plains are braided. They fill up their stream beds and jump to a new path spreading new material back and forth across the plains like giant grouting machines.

The huge weight of this new mountain pushed down on the earth and the mountain sunk, trying to become isostatic with its surroundings. Molten sills and dikes and the heat under the volcano helped with this process, making the material supporting the volcano a little less viscous than it otherwise would be.

In time, the volcano died, underground magma cooled and solidified and the volcano was locked into its surroundings. All this time more material was washing off the volcano to be deposited on land to the West and in the sea to the North, East and South. The fast growing mountains to the West continued to wash material down around the volcano. The volcano got lighter and lighter while the ground around it got heavier.

The volcano was no longer isostatic with its surroundings. It wanted to rise but it was locked into the surrounding land.

On Sept 4, 2010 a nearby fault ruptured. This fault had nothing to do with the volcano. It is an east west fault coming off the north south plate-tectonic-fault that runs down the middle of the New Zealand Alps to the West. Unfortunately, this fault points directly towards the north side of the Banks Peninsula right on the southern edge of Christchurch. Following the Sept earthquake, after shocks just kept coming. Between the Sept 4 quake and the Christchurch quake there were just under 5000 aftershocks. Eventually the rock was sufficiently weakened that the volcano could pop up. The break in the rock was shallow so even thought the quake was only a 6.3, it caused huge vibration in the nearby area. The Sept 4 quake was 40km from Christchurch, the 6.3, only 10km away. Because it was a upward break on the volcano side and a downward break on the Christchurch side, it caused huge vertical accelerations. It was akin to someone cracking a whip. Unfortunately, parts of Christchurch are built on a swamp and the closer to the coast, the swampier it gets. Further inland, the Alps have spread layer after layer of shingle (gravel) on top of the land, compressing and stabilizing it.

So far so good. That's a theory but a Scientific theory is measured by how well it can make predictions so what would one predict if the above scenario is correct.

1. The volcano: the Banks Peninsula, should have risen during this quake and will continue to rise as further after-shocks occur. I must admit, I have cheated a little with this prediction. Someone told me he had heard on a radio program that the Banks Peninsula had indeed risen. That was what triggered off this blog. So how about other predictions.

2. The Banks Peninsula should have tilted. While the North North West side should have risen, the South side should have hardly risen at all. In fact as you go across the volcano from North West to South East, the amount of rise should be less and less.

3. The rest of the volcano is still out of equilibrium with the surrounding rock. One would expect more earth quakes which will center on the Western and southern rim of the volcano and possibly to the East. Unfortunately, there is no way of predicting when, but a major earth quake might be preceded by some small ones on the other side of the peninsula from Christchurch as the rocks begin to rupture. All the after shocks we are having, continue to weaken the rock on the other rims of the volcano and the rock on the south rim will have been bent by the rise of the North Western side.

4. Following any major quakes on the other rims of the Peninsula, that side would be expected to rise as well. The shore line of the Banks Peninsula should rise and the harbors become shallower.

5. Communities to the West and South of Christchurch should expect some pretty large quakes, possibly in the near future and Christchurch will continue to experience shocks, some fairly large, as the Banks Peninsula achieves equilibrium with its surroundings. After-shocks should go on for a considerable time interspersed with some pretty large events on other sides of the peninsula.
It is likely that no quakes as devastating as the 6.3 will occur on the Christchurch side.

7. The after shocks from this quake are unlikely to follow the same pattern as aftershocks from the Sept 4 event. I have no idea whether they will be more or less but since the cause is different, the pattern should be different. If they are greater and stronger, this would indicate that the volcano is actively trying to reach equilibrium and might increase the likelihood of large events radiating from other sides of the Banks Peninsula

Postscript. Since writing this blog, I have come across a most interesting site from GNS Science. Click here.
Note that the north part of the banks peninsula moved up and to the west while the land to the North moved down and to the East. If this blog is correct, sometime in the future one would expect to see other parts of the peninsula move upward and probably to the west with energy focused toward the land opposite the risen land. This could be toward the ocean or toward Ashburton.

A floating breakwater - but....

2011-02-26T11:54:00.000-08:00

Where I worked we grew fish in floating cages and we needed to protect them from the waves that weakened the structure and made work difficult. We found a plan for building a floating breakwater out of discarded tires and built up a breakwater large enough to protect the rafts. It was very effective but.... we never did get the fastening system perfected so there was a fair bit of maintenance needed. If someone managed to improve on the fastening, these breakwaters would be a very practical prospect. I'll try to describe them for anyone who wants to have a try.

To make up a module you must start with 9 tires of the same size. (a larger module of 16 tires can be made but if you are using fairly large tires, these can be pretty heavy to shift around). Start by standing three tires on the ground (in the same orientation that they would be in on your car). Put them in a line with the treads touching. Put two tires in the same orientation on either side of the two. They overlap like bricks in a wall. Put a single tire on the outside of the two. Fasten them together (I will go into the fastening below). You now have a diamond shaped unit of 9 tires. If you start with 4, 3-3, 2-2, 1-1, you will produce a unit of 16 tires. Push these units into the water and fasten them together end to end and side to side. You are aiming for a breakwater that is at least as wide as the length of the wave you are wanting to absorb. The way they work is as follows.

The water in a wave doesn't move forward. If you were to suspend something in the water and watch it as a wave goes by, you would see that it moves in a circular path. This floating breakwater connects the rotation of a peak with the rotation of an adjacent trough. They are moving in opposite directions. What happens is that this motion is turned into turbulence and the wave is absorbed. The shorter the wave , the more efficient the system so you remove all the chop and short waves and are left with swell with a wave length which is longer than the width of your tire breakwater.

Flotation is provided by the air trapped in the top of the tire. As long as there is some wave action, the turbulence stirs air into the water and it gets trapped in the tire. A very long period of calm weather can result in the breakwater sinking but it is easily raised by going down with SCUBA gear and letting some air into the tires. A single diamond is quite enough to float a couple of people and once the tires are joined in an array, there is plenty of flotation for anything you want to put on the unit.

For anchoring, there are a number of reasonably inexpensive solutions. Simple 45 gallon drums filled with concrete with a large steel eye at both ends is a good solution. They are joined with lengths of chain, one behind the other. They dig into soft bottoms pretty well and as long as you have a good length of chain at the anchor end of the anchor line, they give good anchoring. You can use polyprop rope for much of the connection to the breakwater. The principle is that the chain, where it meets the first drum in the series, should never be at an angle to the bottom. You need enough chain so that in the worst conditions, it is parallel to the bottom where it connects to the first drum. The leading edge of the drums digs in and provides very solid anchoring.

Actually, while I have been typing this, a thought just came to me. I bet you could get quite an effect from a vertical wave barrier. Simply take some of your diamonds and drill small holes in the top of each tire so they won't float. Fasten them under floating diamonds. The principle here is slightly different although the same at its core. It depends on the fact that for every ninth of a wave length you go down into the sea, the circle of action of a particle decreases by half. Take a wave of 1 metre high and 9 metres long. At the surface, a particle is describing a circle with a diameter of 1 metre. 1 metre below the surface the particle is describing a circle with a diameter of half a metre and at 5 metres, the circle is one thirty second of a metre. In essence, the deep diamonds should anchor the tires and stop them going up and down with the surface waves. The surface waves should break over the unit and change the wave energy into turbulence. Something to try.

So how did we fasten the tires together. We got old conveyor belts and cut them into palm width strips. We then got a couple of winches and pulled the tires together tightly enough to distort the tires. The straps were measured and cut with some overlap and 4 holes in a square pattern was drilled in each one. Brass bolts and brass plates were used to fasten the ends of the belts together. When the winches were released, the belts were nice and tight. The weak spot was where the bolts went through the conveyor belt. Our fastening was lasting a few weeks to a few months but as the barrier got bigger, the amount of maintenance got pretty time consuming. Possibly in a commercial system one could use the same eye and pin system that is used to join conveyor belts together.

We were always amazed how much buoyancy these units had. A single 9 tire unit was plenty to float a person or two. You could make a Kontiki with this sort of raft.

Something else we noticed was the amount of sea life they attracted. They were great protection for little fish and the big fish came along to see if they could get the wee ones.. Lots of organisms settled on them as well.

If you have need of such a breakwater, have a go and let me know how you ended up fastening them together. That is the key to this system. If you are really adventurous, haul one of these into the deep ocean, build a hut on the top and go drifting around the world.

Wind energy's no good

2011-02-06T22:43:00.000-08:00

At least that is what I read in an anti-wind farm article in our local rag. The reason given was that wind energy has to be used as it is produced and can not be stored (I think he actually meant that it can't be stored economically -- lets give him the benefit of the doubt). The commentator is part of a group which has got it's knickers in a knot about a proposed wind farm in their area. The group has been making some pretty wild comments on the effects of wind turbines. I suspect they will say anything that they think might be effective to block the wind farm.

Not knowing the commentator very well (in fact hardly at all) I'm not sure if he was being woefully ignorant or willfully misleading. So let's examine this question of how to get the maximum benefit from the energy from a wind farm; of how you store wind energy.

Most countries generate some of their electricity from Hydro. Here in New Zealand we are one of a very few nations which generates more than 50% of our power from Hydro. Hydro is the perfect partner for wind farms. Every unit (kWh) of electricity which is generated by wind leaves water in the dams to be used instantly when the wind isn't blowing. Now, if you are on your toes, you will immediately ask what happens if the dams are full and the wind is blowing. You see the problem. I'll get to that in a minute.

In addition to saving water for future use, wind displaces the use of coal. In New Zealand we have one large coal fired power station. Every kWh generated by wind leaves approximately 300g of coal in the ground* (energy which is already stored). A single 3mw wind turbine operating at a site that has a 35% capacity factor, leaves approximately 2,700 tons per year of this non-renewable resource in the ground to be used by future generations of Kiwis. A typical 30 turbine wind farm over a 25 year life leaves over 2 million tons of coal in the ground and reduces our (expensive under Kyoto) Carbon dioxide production by over 6 million tons. Hopefully, because of our foresight in building wind farms, our kids won't have to burn this valuable resource but will use it as an industrial feed stock. Thankfully, our grandfathers showed foresight by building hydro-electric dams which is why our generation is in pretty good shape right now. If we tried to build these HydroElectric dams today it would take a decade just to get through the consent process.

*I have used a very conservative figure here which is for the most modern, coal-fired power stations. The average world wide figure is above 400g of coal per kWh. (look at paragraph 7 in the linked article)

Wind also displaces the use of natural gas. Like coal, this is a far to valuable resource to be burnt. In the past we have used natural gas to produce value-added methanol. Both coal and gas can be used as the starting point for the production of a mind boggling range of value added products including fertilizers, parmacuticals, plastics, fine chemicals and so forth. However looking at natural gas as a source of energy rather than as an industrial feed stock, every kWh of wind energy produced leaves either coal or gas energy unused (stored).

Further energy storing opportunities come from demand balancing of our power grid (as opposed to the present, predominantly, supply balancing system). In New Zealand we already have a crude form of demand balancing. Many of us heat water when 'electricity-is-available' rather than 'on-demand'. This is done by the clock rather than when excess power is actually available. In the future, we will have the choice of operating washing machines, turning on heat storage devices, doing our cooking and so forth with cheaper 'when-available' electricity rather than more expensive "on-demand" electricity. The critical development is the introduction of "Smart Grids" which you have been hearing so much about. There are two levels of such applications. If you had set your dish washer to come on when the signal for third level electricity (use now, level 1, level 2, level 3 etc. - each one a bit cheaper than the previous one), you don't want it to go off if there is a switch to level 2. A heat storage device such as a hot water tank or space heater is a different story. It can switch on and off instantly and as often as needed to balance the supply.

And finally, electric cars will begin to appear on our roads this year. Not only can they be charged, for the most part, when electricity is available and hence cheaper, but there is much talk about using them as peak shaving devices to send electricity back into the grid when demand is high. Charging 'when-available' will reduce driving costs (and use energy when the Nor-wester is blowing). Giving back power 'when-needed' will generate a small but much appreciated revenue for the electric car owner. It will also eliminate the need to borrow money to build an expensive peak shaving power station.

In summary, wind energy is stored in a number of ways.
#For hydro dams it is in the form of water in the dam not used and ready to go through the generators on demand.
#For fossil fuels it is stored in fuel not used and available far into the future (very very long term storage).
#For the home owner it is stored in the form of a basket of clothes or a sink of dishes, washed when electricity was in excess, a loaf of bread baked in the bread machine, a tank of water or a heat storage device, heated when electricity was cheap.
#For the retired couple energy is stored in a house vacuumed or a hedge trimmed. (they are at home so they can do these jobs when the sun shines and the wind blows)
#For the owner of an electric car it is stored in a full battery, likewise charged when electricity was most plentiful and hence least expensive.

In none of the above have I touched on methods the industry uses such as pumped storage. That is another story.

Saying that wind farms (or any other form of renewable energy) are not effective because electricity can not be stored shows in insularity bordering on hermitage.

Australian Floods

2011-01-22T12:11:00.000-08:00

After a prolonged gut wrenching drought, large parts of Australia are experiencing epic floods. It seems very likely that such, so called, 200 year floods could now occur every decade or so. I could easily be wrong. Predicting the climate is only slightly more reliable than predicting the weather. The question is whether or not the Australian community is willing to bet on not having such floods over the next few decades. And even if another such flood does not occur in the next few decades, it will reoccur at some time in the future. Are the Ausi Communities willing to leave to their children the legacy of a repeat of the present disaster......

Or are the Ausis willing to bite the bullet and put out the effort to make sure that future flood events bring great benefit instead of great loss to Australia. After all, in a country plagued by drought, arguably, enough water has fallen on Australia to last her for a decade. Most of this manna from heaven has flowed out to sea. What could the Ausis do.

Climate Change
First, forget climate change. Sure many commentators predict that with climate change Australia will have bigger floods and harsher droughts but it isn't necessary to invoke climate change. Just look at history. Australia has had severe floods in 1890, 1893, 1896, 1898 and 1974. This is just a sample. There were many more. The floods of 1893 and 1974 were higher than the present (2011) flood. Brisbane and other towns of Queensland and Victoria have flooded before and will flood again.

Mark the floods
The second item on the agenda is not to forget the extent of the floods which have just occurred. It is an all too human characteristic to forget how bad it was as soon as it is over. Communities need to put up markers showing how high the water came. This can be stakes similar to road mile markers wherever the maximum extent of the flood crosses a road, plaques in sidewalks, markers on walls of buildings which survived and so forth. Every person will know how high the water came in his area but must be made aware of the extent of the inundation in the years to come as they visit or move to other communities. Anyone thinking to buy a house or business must know if the building is in the flood plain. When this is suggested in council, note who objects. Could the objector have a building in the flood zone that he want to get rid of.

Move Buildings or Rebuild Up slope
At present Aus is rich. She is arguably the only country which didn't have a recession in the 2008 'downturn'. She is rich because she is selling off her family jewels (minerals), mainly to China with only the gangue removed but that is another story. The point here is, at present she could afford to take radical measures. In the future this could well change. What I would suggest is this. The government gives full compensation to anyone in the flood zone. The owner of the house or business could opt to simply take the money and bank it or they could use it to rebuild up slope. However, any business or house in the flood zone has a note put in her LIM report that this building is in the flood zone and will not be flood-insured in the future. In addition, if it is flooded again, no government compensation will be given. This is a one-off. Use it as you will.

Clear the Flood Plain
Demolish and haul away every building possible except for businesses which absolutely have to be in the flood plain. Turn the flood plain into parkland, wilderness or farm land and do not build levies. In fact, as soon as a village has been moved up-slope, tear down the levies. Levis increase the height of flood peaks downstream. You want flood waters to be able to spread out as far as possible. This greatly lowers the flood peaks downstream as the water spreads out and than drains back into the channel. Floods also deposit much needed new soil on the flood plain which then doesn't reach the ocean and pollute Australia's coral reefs. Plant deep rooted trees in the flood plain which not only will create very attractive recreational areas but will slow the flow of water when the next flood comes.

Rebuild with Flood Proof Buildings
Any buildings that have to be in the flood plain, rebuild to be flood proof. This can include having very sound deep founded foundations, houses raised on stilts, blow out panels on the ground floor which give way when a flood comes, saving the building and so forth. It will be expensive and should only be undertaken for buildings which absolutely have to be in the flood plain. With respect to buildings, there are two types of location on a flood plain. One is an area where, during a flood, there are strong currents. Generally this is near to the channel but not always. The second is where water simply rises and then falls but without much of a current. Building solutions are different for each of these types of location.

and how about the benefits from such floods

Live with the Environment
Aus may well be entering a period of extreme weather. This means very prolonged drought interspersed with very destructive floods*. Desert people all over the world have learned to live with such conditions. The Nabateans who lived around the time of Christ in the area of Petra

* many would argue that she has always been in this situation

Turn water back into the interior
The Snowy mountain project does this to a small extent. Find every place where it is possible to turn the water which is flowing toward the Tasmanian sea back into the interior. This can include tunnels bored through the mountains so that when the water in a given dam rises to just below full, water pours down a tunnel and comes out to the West of the mountains. This is not a small project but Australia is the leading mining country of the world and has the technology to do it. At present she also has the wealth. The only really good way to store water in a desert is underground and as much water as possible should be put into the interior where it can soak down and replenish the water tables. It might be necessary to flood farms there but it is far less expensive to compensate a few farmers who run a sheep per 10 hectares of land than a to compensate the people of a village or city which is destroyed. Besides, when the waters finally soak into the ground, the farmer in question has an unlimited supply of ground water available to him.

A second method is to use electricity from the down flowing water and using it to pump water to the West. However simple tunnels have to be the first choice where possible. The works necessary to pump a significant portion of the recent floods into the interior would likely be beyond even Australia's resources.

Take advantage of the Rebuild
Rebuilding houses and business premises in new locations can have huge benefits to Australia. All buildings can incorporate high thermal mass, external insulation, built in water heating solar panels and photo-electric panels, insect and fire proof construction and so forth. Aus could end up with houses which are far more ecologically friendly, more comfortable, invulnerable to fire, flood and insects and use far less energy. It would be similar to "The New Deal" in America which left her far better off than before the depression. Aus could end up far better off than before the flood.

Disasters are also opportunities. The greater the disaster the greater the opportunities. Disasters are a bit like death. If there was no death we would still be a bacterial slime. Death clears the way for new forms of life. The great extinctions of the world cleared the way for new ecology's. On a much smaller scale, disasters such as the Australian floods can be opportunities for small leaps forward.

Charcoal Production

2011-01-14T13:24:00.000-08:00

Abstract
Traditional methods of charcoal production are messy, often operate in batches, produce variable yields and only use the volatile fraction of the pyrolysis process to create the heat to char the wood. A higher yield, continuous system is suggested which utilizes the combustion of the volatile fraction of the pyrolysis process to protect already pyrolyzed wood (charcoal) from further oxidation. In a commercial operation based on this system, considerable heat energy will be available for drying the feed stock or for whatever other purpose is required. Continuous production should be easily to mechanize.

Background
Over the last few years biochar/charcoal has become a hot new research topic. A number of factors, some old and some new have led to this situation.

Archaeologists have long known that Charcoal is refractory (doesn't break down easily) since they often find charcoal in ancient sites where fire has been used. This is fortunate for them since at a push, charcoal can be used for carbon dating extending back 50,000 years.

Global warming has come upon us with the villain in the piece being our burning of sequestered carbon in the form of coal and oil and gas. The resulting CO2 is the main suspect.

Some countries, Notably New Zealand, have rushed to sign up to Kyoto and take on a financial obligation for her production of green house gases. This will cost the tax payers of New Zealand considerable money for no gain what so ever. If we can use biochar to sequester carbon, this will reduce this hemorrhage of money.

All of the above were necessary but not sufficient reasons to spark the present interest in biochar. The critical final factor was the discovery of Terra Preta in jungle locations. In an area of very poor soils, these charcoal rich soils are very productive.

Research efforts are underway all over the world to understand biochar. The efforts are concentrating on the effect of different production methods (mainly the temperature at which the charcoal is produced) on its value as a soil enhancer and on its longevity in the soil. In the Appendix, some information is given on the questions being asked.

However, the use of biochar as a soil enhancer will never become commercial if it is expensive to produce. A commercial system should be inexpensive enough to locate at each source of raw material such as lumber mills with their offcuts and sawdust, at forests with large supplies of prunings and forest litter or at an abattoir with a supply of bones. It should be a continuous system rather than a batch system and it should effectively char a wide variety of material from fine sawdust and leaves to large pieces of wood and bark.The advantage of producing biochar on site is that it is reduced in volume and weight and hence is less expensive to transport.

The Learning Curve
As soon as Terra Preta was heard of, we started experiments to produce charcoal. It was thought that if charcoal is a valuable addition to tropical soils which are too warm to retain humus, it couldn't hurt to add it to temperate soils, many of which are humus poor. The hope is that biochar will have the same water retaining and ion exchange properties as humus.

Charcoal Mark 1 consisted of simply making a fire, using material from the branch pile (about 2 meters high) and covering it with dirt once the flames had died down. Anywhere a smoker showed through the dirt, more dirt was added. After a dozen tries, discouragement set in. The morning after the charcoal making exercise, the fire would more often than not still be hot and there were sections of ash where the charcoal had been consumed. The system was laborious, dirty, batch rather than continuous and ineffective. A huge quantity of branches resulted in very little charcoal.

Carcoal Mark 2 consisted of stuffing a 45gal drum with prunings from the branch pile and lighting it. When the flames had died down, the barrel was gently tipped on its side and then upended, open side down. Some dirt was kicked around the rim to seal it. Next morning (many next mornings) we had some charcoal, the material was cold but there was much unburnt material from the bottom of the barrel. However this led to Mark 3.

Charcoal Mark 3 used the same 45 gal drum but this time, a flame was lit in the bottom of the barrel using shavings from the woodwork shop and then branches were fed in to the barrel from the ever growing branch pile. The system worked best if a large branch was propped under one edge of the drum to tilt it a little. Air flowed down the lower side and flame up the upper side. Branches were added until the drum was about half full of charcoal and then for a few minutes, only very fine material was added to to give lots of flame which died down quickly but kept the barrel very hot. This was done to ensure that any large pieces at the top of the charcoal were fully charred. The barrel was then upended as described above.

During the production of one batch, large branches were pushed down into the charcoal layer to avoid them toppling the drum. When the Charcoal was examined next morning, uncharred wood was found. The butts of the branches had been protected from the heat of the fire and from oxygen. It is critical that new material is introduced on or above the surface of the growing layer of charcoal.

In all batches, the next morning the charcoal was cool, no ash was to be seen and everything from leaves to 5cm diameter branches were charred. The only batch with uncharred material was the above one where the branches were pushed into the charcoal layer. An easily identified gum leaf, placed in the palm and rubbed with the thumb disintegrated into powdered charcoal while large chunks of wood, rapped on the edge of the drum to break them were completely charred all the way through. A modest supply of branches gave a good yield of charcoal.

Why Does It Work
What is apparently happening is that as new material is put in the burning drum, it pyrolyzes and give out flammable gases. Nothing new in that. The burning gases use up the oxygen, protecting the charcoal from further combustion. As long as there is a reasonable amount of visible flame, charcoal is produced rather than being consumed.

A Comercial Unit
As a first pilot plant, one could start with a cast iron or steel cylinder with the same proportions as a 45 gal drum. For ease of fabrication it could probably be octagonal, hexagonal or even square. A conveyor belt would bring feed stock to a feed in trough sticking out of the side (like the old trash burners had). The critical part, though, is to turn this into a continuous rather than a batch system. This could be done by having an augur at the bottom to extract the charcoal. The charcoal extraction system would have to be air tight to ensure that air did not enter the charcoal bed. The charcoal would be dumped into steel carts with air tight tops and left sealed overnight to ensure that the charcoal was extinguished.

Combustion air could come from the top as in the simple home system or could be introduced through vents in the side of the retort, above the surface of the charcoal. Having these vents adjustable would give an added measure of control to the operator. The extraction of charcoal from the bottom of the retort would ensure that the top of the charcoal bed was always below the vents. The air could be introduced tangentially to ensure a whirling, well mixed flame.

For the use of biochar to catch on, charcoal production must be inexpensive. It is best if it can be carried out where the feed material is available since turning wood into charcoal greatly reduces its shipping weight and somewhat reduces its volume. Any system which is continuous will be far more productive per retort than a batch system of the same configuration and size and hence more cost effective. Having to cool and harvest a system takes considerable time and greatly reduces the production of a system of a given size. Considerable heat will be produced which can be utilized for whatever purpose needed.

appendix and pictures to come
pilot plant under construction

The reverse super market ploy

2011-01-03T20:20:00.000-08:00

New Zealand is getting great prices for her logs. Great News. We have a very successful lumber industry based, for the most part on Pinus radiata, the Monterey pine. All the forests are planted and as soon as they are logged, new trees are planted in their place. Most of the forests are pruned and this is done three times early in their 17 to 25 year rotation cycle. This produces clear wood with good structural properties. By the way, in case you aren't familiar with the Super market ploy, it goes like this.

A super market chain builds a super market in your town. Prices are great backed up by the huge buying power of the chain and her deep pockets. Main street can't compete. After a year or two, businesses selling the same products as the super market close down. A department store opens up and more of main street goes under. As soon as main street folds their tents, the price rises back to around the national average. So what is the reverse Super Market Ploy.

A large country with a command economy and huge foreign currency reserves gives great prices for a raw material, in this case logs. Little country which was the first to broker a free trade agreement with large country is delighted with the price her raw logs are getting. The price of logs to the mills of the little country go up to the price the big country is paying (remember the free trade agreement). Mills of the small country go out of business*. Any guesses where the prices of logs will go when the milling industry of the little country has been destroyed.

*Three mills went out of business in New Zealand just in the three weeks leading up to Christmas 2010

There is nothing new about any of this. In former times, force was used. Think about all of the colonizing countries of Europe. A good and very recent example is Britain in India. Remember Gandi's campaigns. Britain wouldn't let the Indians make their own salt so Gandi led a march to the sea to make salt. They wouldn't let India make their own cloth from their own cotton so Gandi wove cloth at home. Britain wanted India to stay as a third world supplier of raw materials and for Britain to get all the profits from value added activities.

Now however, economics is used but the aim is the same. Namely to turn other countries into third world suppliers of raw materials. There are ways to fight this sort of economic take over. Recently the USA successfully brought a case to the WTO concerning cheap tires from China flooding her market. She succeeded with some sort of argument which had to do with the effect on the American Tire industry. It took America considerable time and effort but she was successful. Such things might depend on the particular agreement that you have with a specific large country. Of course this example is of product dumping rather than of the Reverse Super Market Ploy but the principle is the same. You can fight at least some of the effects of a free trade agreement if you are willing to go the hard yards. You also need considerable "smarts". The ins and outs of finding a way to avoid economic colonization when you have a free trade agreement with a large country are far too complicated for me to understand.

It is a complex problem involving not selling off your means of production, Generating you own capital rather than borrowing money, either as a nation or as individuals, living more modestly, not buying on credit not contracting big purchases off shore, not sending your industry offshore and so forth. At the very bottom of the problem is human greed.

I hope our politicians show the same cleverness and ingenuity as our inventors. We'll see.

The Cost of Manufacturing Overseas

2010-12-28T10:48:00.000-08:00

In New Zealand we are upgrading our rail system. We have recently contracted the manufacture of new rolling stock to South Korea. I wonder how much cheaper rail cars would have to be to make it worthwhile to buy them overseas. Lets look at the downside of manufacturing overseas.*

*incidentally, we have an industry which says it is quite capable of building our own rolling stock. It needs some expansion and since we are planning to continue to expand rail over the coming years, this would be very worthwhile. The present order from Korea is just the start of our need for new rolling stock.

The Primary Tax Take
First there is the primary tax take. The carriage construction company and all its workers pay taxes, both income tax and GST. Some estimates are that approximately 50%*of a workers salary goes back to the government. This increases the money available to the government to do its work. This revenue has been lost to the New Zealand government. Looked at another way, if the train company is a government company (SOE), which it is in New Zealand, then the price of the rolling stock is automatically reduced by the amount of tax they rake back. Just as a thumb suck, would this be a fifth of the cost. If so, based just on the primary tax take, you would have to be able to buy your rail cars for 80% of the cost of manufacturing them in New Zealand to make it worthwhile to do so.

*33% income tax and 15% Sales tax (GST)

The secondary Tax Take
The carriage building company buys some parts in New Zealand and every person working to build our own rolling stock, shops at local retail outlets. The parts suppliers where the company shops and the super markets, furniture stores, hardware stores etc. where the workers shop, all pay taxes. Their employees all pay taxes. This tax revenue is lost to the government. Incidentally, the extra revenue that super markets furniture stores etc would make from the car building company and its employees is 'on top'. It is after their fixed costs and hence at their marginal tax rate.

Parts bought overseas have various taxes on them as they come through our borders. This goes to the government. Looked at another way, parts from overseas are tax free to an SOE and hence less expensive than to a private business as they pass our borders.

The workers of the super markets, furniture stores etc. also shop and the companies they buy from pay taxes...........*

*The calculation is an infinite series with a finite sum. (remember year 12 math) Give it to your maths boffin. In a back of the envelope calculation, I suspect that the secondary tax take is about equal to the primary tax take.If my initial thumb suck is correct, just based on the primary and secondary tax take, you would have to obtain rail cars overseas for 60% of the manufactured-in-New-Zealand cost to make the purchase worthwhile. We are now at 60% of 80% which equals 48%.

Cost of Borrowing Money
Contracting rolling stock overseas further worsens our balance of payments. A poor balance of payments has a whole range of deleterious effects on our economy including raising our bank interest rates. Sending our manufacturing overseas makes life more expensive for every New Zealander.

The Welfare Cost.
I don't know how many people are out of work because our rolling stock is being made overseas. Say 50 for the sake of argument. Jobs are not just waiting to be filled in New Zealand so these skilled people don't have suitable jobs in their professions they can go to. We have high unemployment so every manufacturing job we contract overseas puts people out of work. This increases the number of people on welfare.

The Lost Technical Capacity
As new technology becomes available, it is incorporated into newly manufactured goods. From the descriptions in the media, there are many innovations in the new rail cars. We have given Korea the chance to keep up to date with these innovations rather than keeping our own industry at the cutting edge. We have degraded our own capacity for future manufacture. This cuts into our prospects for future earnings.

Lost Advertising
If we were to build our own rail cars, tourist who ride our rail will see that our cars are 'Made In New Zealand'. Some of these tourists will be business men. Realizing that our rolling stock is made here, they will realize that they can get us to make similar products for them. Seeing that the rolling stock is made in Korea, they will go to Korea. We are showcasing another country.

The Lost People
When we send manufacturing overseas and put people out of work, we send them overseas to look for work. This is especially so with highly trained people who are not hugely motivated to seek a job stocking Super Market shelves. Many land up in Australia - others further afield. Getting things manufactured overseas not only exports our dollars and our technical capacity but also our best and brightest further degrading our capacity for future earnings.

I suspect I have only just touched the surface. I'll update this blog as more disadvantages of manufacturing overseas come to mind. Can anyone put a figure on all the above. How much cheaper would rail carriages have to be before it would be worthwhile to buy them overseas instead of making them in New Zealand. Would it ever be worthwhile. We must start to look at the true costs of our actions, not just the immediate costs. If a private company contracted manufacturing overseas, you could understand if not forgive it. They have a very narrow focus which only looks at the immediate bottom line of their individual company. For an SOE to do this is myopic to the point of criminal irresponsibility. Of course an SOE operates just like a private company unless otherwise directed by the political party in power. The responsibility for taking a wider view rests, at present, with the National Party.

A Government Argument
One of the arguments by the government for obtaining our rolling stock overseas is that it can be produced faster than our local companies can. This would seem to me to be a disadvantage. We have got along with the present situation for years and now suddenly we need all this new rolling stock within, say, three years. Nonesense. Far better to produce a three car unit and a new locomotive, put them into service, iron out any bugs and incorporate the knowledge gained into the next units. I understand that the first unit to arrive in New Zealand from overseas did not meet our requirements so are we going to get a whole bunch of these units which need fixing because of the speed of overseas manufacture.

There is another consideration. Suppose for the sake of the argument, we could buy all the rolling stock in the first contract off the shelf from Korea on China and they could arrive on the first ship coming our way. I would be willing to bet that this would overwhelm our ability to absorb them and they would take a good deal of time to get into service. How much better to put these units into service one after the other and upgrade the support service as necessary. How much better to be able to give feed back to our own company and upgrade the units as the need becomes apparent.

Appendix
Below is a reply I received from Jim Quinn of the SOE KiwiRail. He has kindly given permission to include his reply in this blog. I am grateful to Mr Quinn for presenting the other side of the argument.

Thanks for your email. I read your blog and understand your point however you seem to have ignored some basic points:

· The gap in the price points between local build and foreign build is far more than the benefits you discuss.

· We have never built electric multiple units in New Zealand so we have little knowledge of the complexity of the build. Using your logic we should build cars, trucks and jumbo jets here- that debate has long been negated.

· There would undoubtedly be some local spin off of any build but the vast majority of the parts would come from overseas if we were to build here and we simply have no scale to buy well and competitively.

· If we were to build here we take all the warranty and cost risk in the build. I have great faith in our capability but projects like these can go wrong & we can’t afford that risk.

· As an SOE our responsibility is the best commercial answer. Other people’s job is to evaluate wider benefits. That is the appropriate split of responsibility.

The worst thing we can possibly do is create manufacturing capability here that cannot be sustained. So long term sustainability and affordability must be our first test if not we are simply making short term bad calls and wasting money.

Postscript
I have been told by an 'informed source' that in Australia the rule is 75%. A product has to be obtainable for 75% or less of the local price or it will be sourced within Australia.

Postpostscript
It has been brought to my attention that a study was commissioned on this subject by the RMTU (Rail and Maritime Transport Union) and the DCC (Dunedin City Council). It was prepared by the economists, David Norman, Dr Ganesh Nana and Kel Sanderson. To see the whole report, click here, go to the bottom and click on the BERL report. In summary:

1. 38 three car multiple units (114 cars) and 13 electric locomotives are to be built in this phase of our rail improvement. They would cost $375m to produce in New Zealand

2. The work would employ 1270 employees for a period of 45 months or 770 employees for 69 months

3. This would add between $232m and $250m to our GDP

4. If you consider just the immediate benefits, we would have to obtain the cars for 29% less than the cost of making them in New Zealand. If we consider the wider benefits (see the start of this blog and note that in the BERL report there are benefits I didn't think of) we would have to be able to purchase them for 62% less than the overseas cost (ie for 38% of the New Zealand cost).

5. The BERL report only deals with the financial side of the question. It doesn't examine the human side of the equation such as the gut wrenching decision families need to make to go overseas to seek decent employment, leaving elderly parents, friends and the environment they love in order to work in a land of floods and drought.

There is much more in the BERL report that I haven't dealt with.

KiwiFruit Canker (PSA) in New Zealand

2010-12-25T10:54:00.000-08:00

An outbreak of KiwiFruit canker has recently been discovered in New Zealand. In fact, genetic studies have shown that we have two varieties. This disease Pseudomonas syringae pv actinidiae (PSA) has destroyed whole KiwiFruit orchards in Italy and caused much damage elsewhere in the world. Many of the farmers are blaming New Zealand bio-security for the problem. I think they should look a little closer to home. Possibly in the mirror.

The KiwiFruit, otherwise known as the Chinese gooseberry is a fabulous fruit. Original stocks were brought to New Zealand from China back in 1924 and something about our climate suits it very well. It has become a major export item and a great help to our balance of payments. You would think we would guard such an industry with great care. For instance, you would think that as soon as it was apparent that a serious industry was growing around the production of KiwiFruit, we would stop importing any new biological material. Even if there were no known diseases or pests of KiwiFruit, you don't endanger such an industry just because you don't yet know of any diseases. How much more important is it then to stop the import of biological material when you do know that PSA, for instance, has decimated KiwiFruit orchards overseas.

New Zealand is absolutely fanatical about blocking unwanted pests from getting into the country and well we should be. We are far enough away from the rest of the world to isolate us from many of the worlds pests and if we can stop people bringing biological material into the country, we are reasonably safe. So why did we not do this in the case of KiwiFruit. I think it must have been a combination of greed, complacency based on familiarity and a lack of foresight.

We have been bringing in KiwiFruit root stock, scions and pollen ever since the industry started and before. One would expect a country like New Zealand we would institute precautions each time a new technique is developed. For instance, if we had need of the genetic characteristics of certain root stock or scions we could have brought them in via plant tissue culture.

In tissue culture, you take minuscule pieces of the desired plant and grow it on agar and later transfer it to soil, producing a whole plant. During the process, various techniques are used to free the material from bacteria and viruses. Two of the uses of tissue culture listed by Wikipedia are:

The production of plants in sterile containers that allows them to be moved with greatly reduced chances of transmitting diseases, pests, and pathogens.
To clean particular plant of viral and other infections and to quickly multiply these plants as 'cleaned stock' for horticulture and agriculture

Of course, this technique is much more expensive than simply bringing in root stock or grafting wood (scions) from overseas.

Another technique one would have expected to be used is as soon as it became available is genetic testing. This has only been possible over, arguably, the last decade or two. When used it will detect if there is any genetic material in imports of biological material other than the KiwiFruit itself. In other words it can detect bacteria and viruses. Used in combination with tissue culture, one can be almost certain that no unwanted 'bugs' are coming in with new genetic material.

The really unforgivable import, though, is pollen. I suppose it must be cheaper to produce pollen overseas than in New Zealand and if you only grow female plants in your orchard and artificially pollinate them, you get more yield from a hectare of plants. No space is wasted with non producing male plants. We could have grown orchards here of only male plants and produced our own pollen or we could have inter-planted male plants amongst the female plants. Instead, we imported pollen from overseas. I can just hear the industry saying "but we have no indication that pollen carries PSA or any other disease". For the love of mike, you don't endanger a whole industry because of negative evidence - because you haven't yet found disease organisms in pollen. This was complacency based on the fact that we had got away with it for so long and pure greed of farmers wanting to make a little more profit. Have a look in the mirror, guys.

I wonder how many other agricultural industries are following a similar course. How many other industries are importing biological material rather than going through the more expensive but far safer system of plant tissue culture and genetic testing. We are very strict on individuals coming through our air ports and well we should be. Why do we not apply the same or more stringent standards to businesses. Our agricultural industries are far too important to allow this to continue.