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May 24, 2004

Kerry's Top-Secret Energy Plan

One of the researchers here at the DymaxionWeb commutes by riding her bicycle across Capitol Hill. She normally goes down the hill on the House side but the other day she was detoured away by an enormous phalanx of DC and US Capitol Police. As a result she was skirted around to Constitution Ave. past one of the main parking lots for Senate staff. As sometimes happens, the chain on her derailleur slipped off and she was forced to get off the bike to stretch it back on. The car she parked next to happened to be one of those large dark windowed SUV's that are used around the capital these days to ferry government functionaries.
As she got started to mount back on the bike she glanced into the car and noticed something on the back seat: it was a thick stack of paper held together by a black clip and entitled "John Kerry's Top Secret Energy Plan". Before a couple of dark-glassed men were able to ferry her away she got a pretty good look at the front page. There were a number of bullet points.
Here, according to her, is possibly what Kerry is going to propose in the not too distant future:

A National Energy Proposal similar in nature to the Kennedy's Manned Landing on the Moon or the World War II Manhattan Project.
Kerry will propose that the US become energy-import independent within a period of 15 years. He will encourage massive government funding in basic research in solar, wind, hydrogen and "other" alternative energy production methods.
All national electric grids will be converted to two-way (buy-sell) delivery systems and the government will "encourage" the use of solar cells on residential and commercial buildings through tax and other subsidies. Similar subsidies will be set up for proven conservation technology and standards like increased insulation and computer-driven efficiency systems.
The CAFE standards, which legislate mileage standards for the fleets of manufactured cars will be extended to cover SUV's , vans and pick-up trucks. The tax loophole that encourages self-employed individuals to purchase cars weighing more than 6,000 pounds will be closed. Manufacturers will also be incentivized "as quickly as feasible" to step up the production of hybrid gas-electric cars to meet the new CAFE standards.
But the program will not stop there: mass transportation projects, HOV lanes and other structural changes will be made on a meaningful scale to diminish low occupancy automobile commuting.
Kerry will not propose any new gasolene taxes.
Admittedly, there is no saying whose limo the report was sitting in and what it might mean. Our researcher obviously got only a quick read of the main bullet points so there is much of the plan that has to be relegated to pure speculation; as, for example, how the new president, if elected, might get the required funding. The plan is also based on the premise that nanotechnology and new manufacturing techniques can greatly increase the efficiency of solar, fuel cell and other energy production methods.
Kerry might get some of the money from programs like the 10's of $billions a year Star Wars missile defense program or even from the cost of the present effort in Iraq if he can succeed in bringing in other countries during the transition phase.
As we have said, there's no verifying the origin of the plan. Maybe it was prepared and labeled "top secret" by some of Bush's own allies in and out of the oil business as a potential nightmare scenario.

Posted by dymaxion at 03:34 PM

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May 19, 2004

Black, Yellow and Green

No, we are not talking about the colors of a new flag for Iraq. But here's a hint: black is way up, green, after a long dip has turned up and yellow has taken a nosedive. Do you need more clues?

Readers of this Blowback column of the Dymaxion Web are familiar with our fascination with the color of money. Last year we began to voice our concern over a number of trends that seemed to indicate nothing less than trouble ahead for the mighty greenback. For one thing, we noted with more than a small degree of repetition, the US trade deficit was growing to historically record levels. What concerned us most was what we perceived, and still view to be something that is structural in nature, or irreversible. US manufacturers have been closing up shop and moving their technology and assembly lines to the Far East and, more particularly, to China. And so, we reasoned, those generally good paying factory jobs would be lost, probably forever. It became ever harder to imagine that Wal-Marts and the other national retail chains would somehow shake their addiction to this now well trodden supply chain of cheap goods.

The other major problem for the US was its huge domestic government debt. Government deficits are, after all, purchases made on borrowed dough. To cover these debts, the government issues treasury bonds that compete with other financial instruments for the attention of investors. In recent years, a system has developed in which the US buys more from abroad than it sells (the trade deficit) and the exporting countries that benefit from the trade imbalance recirculate the dollars they receive back into the US through the purchase of T-bills. This "good deal" allows Americans to live above their means simply by being able to print new money to cover their bottomless appetite for tchotchkes.

What, we wondered, would happen if things started to spin our of control, as they are wont to do. To stimulate the economy, the administration would begin to pull out all the stops. They would, with the help of Mr. Greenspan, force down interest rates and keep them low as long as possible. Greenspan's six year term runs out in the summer of 2004, and although most men at the Chairman's age of 78, might be thinking of calling it a day, it was pretty clear that Mr. Greenspan wanted to keep going. Administration leverage, it seemed, was clearly there, which meant that we were in for a run of inflation, at all costs.

As the dollar fell in the Autumn, the price of gold moved up. At the dollar's nadir, near 1.29 per Euro, gold rose to $420 per ounce. The cheap dollar was supposed to be a tonic that would perk up a lagging world economy and perhaps, as the Americans hoped, would spur the Chinese into raising the value of their own currency, the RMB, spurring minor price rises in the US. A cheap dollar was sure to cause US imports to slow down as exports began to pick up. But, unfortunately, there was more than one fly in the ointment.

First off, there was the little matter of Iraq. Wars, at their best, are costly affairs. In a no-tax political climate, they serve to pile up on top of already high deficits. But its no secret that people get rich in wars since they also serve to stimulate the domestic economy. The military doesn't (yet) shop at Wal-Mart. Goods they order will be made in the US: Guns, tanks, ammunition, flak jackets, armored Humvees, cargo planes, caskets, you name it, all get built in America by Americans. Which leads us first to last month's employment numbers. For the second month in a row the US created nearly 300,000 jobs and for the first time since Bush took office, there was actually an increase in manufacturing jobs, some 11,000. Chalk it up to Iraq, or to an overheating economy, but the US was finally producing more than the minimum 150,000 new jobs needed every month just to meet normal population growth.

Which brings us to the color black. Petroleum is priced in dollars. One side effect of a cheap dollar was a cheap barrel of oil for those countries, representing three quarters of the world's economy, whose currencies grew in value against the dollar. The question arose: would the oil producers hold still and swallow their lost revenues or move the price of oil up against the dollar? We imagined, wrongly, that with the US next door in Iraq getting rid of their greatest state threat and for free, the Saudis might have good reason to ease off a bit.

For the gold bugs, this has been a disastrous turn of events. They were counting on a rush of inflationary pressures in the US to further push up the yellow metal. They were right in one respect, these are very fragile times, economically speaking. The slightest hint of a rise in US interest rates, like the whisper of martini over a glass of pure gin and olive, has been enough to kick the legs out from under both stock and gold markets. The prospect of a costly war without end in Iraq certainly hasn't been a psychological boost but the real downer has been a rise in prices all around.

Sure, you say, official inflation figures are still within control. But take a step outside. Housing and education prices have shot up out of control. People are paying twice as much to fill up that SUV as on the day they bought it. Prices in the supermarket are shooting up. But look, unless we can successfully absorb higher interest rates, we will have squandered all the major tools sure to stimulate: interest rate drops over time to what is now a real number close to zero, currency devaluation and a costly war; all for several months of growth and a total so far of 11,000 new manufacturing jobs after a loss of nearly 3 million.

Interest rates will go up, for sure. And you can expect that expensive oil is here for the duration even if the Saudis give Bush a break right before the election. There is just too much worldwide demand and too few new discoveries. The markets sense this, why else at this early stage in a recovery would they be so gun-shy to what would in effect be a return to more normal interest rate levels. Low interest rates are an aberration that adversely affect savings and yet the Japanese have had to live with them for years. Remember that just a few years after the Japanese crash in 1988 their stock market recovered about half of its losses before entering into a 10 year slide punctuated by ever weaker bear rallies. Everybody said then that Japan and the US are just too different to parallel.

The bulls, it seems have lost their nerve. Let's hope we're wrong and this is all just a temporary "psychological"reaction to a poorly conceived and executed war for black gold.

And now:

Dymaxion Web! A progress report

For months now, we have been talking about expanding the DymaxionWeb project by dedicating a site:, naturally-- that will better tap into the wealth of firsthand information available around the web. The goal is to bring into focus the voices of writers and video reporters associated directly with and in the trenches at some of the critical frontline areas of economic development. Eventually, it is hoped that we can create a 360 degree alternative view of these developments. So far, we've made pretty good progress on the infrastructure needed to launch such a site and will keep you posted as we get closer to live day. At the same time, we plan to continue publishing Blowback at Radio Userland. One of you suggested that we build a kind of impenetrable area on the site where truly anonymous discussions can take place. We think this is necessary and are looking into the feasibility and technology needed. Once we get the newsfeed sides of the project (Reblog and Deep Throat) up and running we will look into putting up the Safe House. Other suggestions are welcome.

Posted by dymaxion at 05:39 PM

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May 06, 2004

The Lesson of Rashoman

There was a spirited group discussion led by Jay Rosen at BloggerCON a couple of weeks ago. The topic "What is Journalism" was meant by the organizers to generate both light and heat. In that sense it more than succeeded. For one thing, more than half of the audience of several hundred defined themselves as "professional" journalists, former or present. Given the wide swath, it would have been hard for anyone to argue that there is some sort of clean line of debarkation between bloggers and journalists that might separate purists in either tribe.

One of the problems that has always seemed to plague the US brand of journalism is the notion that a reporters job is to somehow take a neutral and balanced approach to the events being recorded. The convention, according to the rules of this game, is to tag an article, as does the Washington Post, with a tagline like, "Analysis" , to let us know when we are getting the reporter's personal opinion rather than the "fair and balanced" reporting the paper is dedicated to dishing out.

And, goes the same line of reasoning, if a human being can only achieve a "professional" degree of detachment, surely that is not a problem that carries over to machines. This kind of chatter once had a greater currency in a more parceled world. Competing newspapers or electronic channels might bring a certain point of view to events but there was always an agreed upon wavelength spectrum in which they operated. Most information consumers could relax in the knowledge that in a "free" environment they were getting a pretty good picture of what was really going on. Of course, they were merely being lulled into complacency. This supposedly nonexistent distorting media lens only became a problem when it focused its point of view on you or something you knew about personally.

Then along came hand held video cams, satellite telephones equipped with video and audio recorders, mini-recording devices on the gathering side and phenomena like satellite broadcast and broadband internet on the broadcast side.
Suddenly, the reporting from pivotal events like the current siege of Falluja was not strictly controllable. Sure, there was the embedded reporter getting the point of view of the marines on the outside but there were also cameras inside the city recording a very different picture and mainly from an equally differing point of view.

This is not insignificant. It is hard to imagine the US marines and their military and political bosses settling for a standoff in a part of the world that is known to measure and respect force and to understand the importance of exacting revenge. It is most likely within the context of the crucible of revenge that burns within the Sunni triangle that the military commanders on the ground decided they had to go into Falluja after the four American contractors were so publicly desecrated. But in the face of a situation in which enormous civilian casualties would be a necessary byproduct, the marines were forced to hold back on the enormous fire power they could have mustered. Given, the cultural and political reality of the moment, it is difficult to imagine they would have held back if the cameras and satellite phones weren't in place.

The battle of Falluja will be studied in the future by every military that will be forced to intervene in the role of occupiers. There will be many conclusions but, of course, by that time, we will be fighting the next war and technology will once again have shifted the equation. Still, one conclusion can be drawn immediately: when it comes to issues as important as life and death there can be no neutral eyes.

It is probably useful for most of us in our every day and thus not vital, parts of our lives, to continue with the myth even as it falls apart on its own weight. Note, Vice President Cheney yesterday telling a television audience of party faithful that Fox news is the only "fair and balanced" reporting he knows of. Better, because you would rather get your news from ABC than from Disney (its owner) or General Electric or Viacom in the case of the other major channels.

The point, and yes there is a point to this, within the context of the Dymaxion Web, is that the most valuable new and, yes again, to use a hackneyed phrase, revolutionary, reporting is from the trenches, or cubicles, or backrooms (you name it). The "professional" reporter has her role in turning out a product as seen from the outside and often produced through the collaboration of interested parties carefully feeding attributed and non-attributed morsels to be run through the editorial and competitive media process. Their contribution, so to speak, brings with it all that filtering baggage.

We are growing an electronic world teeming with eye witnesses, spinners, malcontents, principles and various breeds of flies on the wall we don't yet have names for. They have their keyboards, their cell phone cams, and video recorders and fewer and fewer technical and financial constraints in getting what they need to say out there. This is what keeps us going at the Dymaxion Web (soon to launch in a much enhanced forum).


Posted by dymaxion at 03:27 PM

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