The “Green Agenda” is already killing the energy industry.

Recently, we have read of energy shortfalls in Germany, the UK and even China. The Chinese energy problems may be contributing to the supply chain issues. What all these stories have in common, with the possible exception of China, is the “Green Agenda.”

Germany’s problems were predicted. The country decided to shut down nuclear power and rely on wind and solar. Relying on solar in Germany’s climate was ludicrous.

Germany’s Energiewende, or energy transition to renewables, is leading to an insecure supply of energy and is affecting the nation’s economy. Germany plans on phasing out all its nuclear plants by 2022 and its coal plants by 2038 in favor of renewable energy, primarily intermittent wind and solar power, which is causing electricity prices to spike and its electric grid to falter. If Germany continues to phase out both coal and nuclear, it will lose the equivalent of 43 percent of 2018 secured output. German electricity prices are already 45 percent above the European average (and 3 times U.S. average residential prices) with green taxes now accounting for 54 percent of household electricity prices.

The Greens are taking down the German economy.Russia and the new pipeline for natural gas cannot supply enough power.

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Battle of Britain + 81

This month marks the 81st anniversary of the Battle of Britain.  It was the first major battle that was fought entirely in the air, and it pioneered the use of radar as a force multiplier. The history of this battle is very interesting from the military and technology standpoints–but those things are not the focus of this post.

With the fall of France (June 22, 1940), many people believed that further resistance by Britain was hopeless.  The French writer Georges Bernanos, living in exile in Brazil, wrote (in December of that year) about how many establishment figures had been willing to despair…and how epic a story Britain’s survival in fact was:

No one knows better than I do that, in the course of centuries, all the great stories of the world end by becoming children’s tales. But this particular one (the story of England’s resistance–ed) has started its life as such, has become a children’s tale on the very threshold of its existence. It mean that we can at once recognize in it the threefold visible sign of its nature. it has deceived the anticipations of the wise, it has humiliated the weak-hearted, it has staggered the fools. Last June all these folk from one end of the world to the other, no matter what the color of their skins, were shaking their heads. Never had they been so old, never had they been so proud of being old. All the figures that they had swallowed in the course of their miserable lives as a safeguard against the highly improbable activity of their emotions had choked the channels of circulation..They were ready to prove that with the Armistice of Rethondes the continuance of the war had become a mathematical impossibility…Some chuckled with satisfaction at the thought, but they were not the most dangerous…Others threatened us with the infection of pity…”Alone against the world,” they said. “Why, what is that but a tale for children?” And that is precisely what it was–a tale for children. Hurrah for the children of England! 

Men of England, at this very moment you are writing what public speakers like to describe in their jargon as one of the “greatest pages of history”….At this moment you English are writing one of the greatest pages of history, but I am quite sure that when you started, you meant it as a fairy tale for children. “Once upon a time there was a little island, and in that island there was a people in arms against the world…” Faced with such an opening as that, what old cunning fox of politics or business would not have shrugged his shoulders and closed the book?

But only a two years earlier, Britain had signed the Munich agreement.  General Edward Spears, along with many others was overcome by despair:

Like most people, I have had my private sorrows, but there is no loss that can compare with the agony of losing one’s country, and that is what some of us felt when England accepted Munich.  All we believed in seemed to have lost substance.

The life of each of us has roots without which it must wither; these derive sustenance from the soil of our native land, its thoughts, its way of life, its magnificent history; the lineage of the British race is our inspiration.  The past tells us what the future should be.  When we threw the Czechs to the Nazi wolves, it seemed to me as if the beacon lit centuries ago, and ever since lighting our way, had suddenly gone out, and I could not see ahead.

Yet it was only two years after Munich that Britain demonstrated its  magnificent resistance to Nazi conquest.

The Battle of Britain has been, fairly, called a battle that saved civilization. But the saving of civilization is not a one-time thing, and there are today very serious threats to individual liberty and the rule of law..really, to civilization itself…in Britain as well as in the US. There are many dark clouds overhead and on the horizon. But the Battle of Britain should inspire us with the thought that battles that seem to be hopeless may, in fact, be winnable through sufficient determination and skill.

Important People–People Who Matter

The UK government has decided that senior executives can temporarily leave quarantine in England if they are undertaking business activities which are likely to be of significant economic benefit to the UK.

(Hopefully, the virus will be informed and will conduct itself accordingly)

I suspect that many of the activities which in reality could benefit the UK economy greatly do not meet the requirements of this ruling by the Department for Business, Industry, and Industrial Strategy and hence are not viewed by the government as truly important.

An extremely successful startup CEO once remarked to me that ‘the secret to startups is that you have very smart people working on very small things.”  By ‘small’, he definitely did not mean ‘unimportant’, rather, that the activity…whatever its future potential…was still not yet large enough in revenue and perhaps also in public awareness to get proper attention at the senior levels of a typical large corporation. (And by ‘smart’, he didn’t mean just IQ, but the whole range of business skills)

Governments will always tend to focus on things which are large, or fashionable, or both, and will more often than not act as inhibitors toward true innovations.

Corruption rules our country today.

I am succumbing to temptation to repeat a post from 4 years ago. The reason is that the problem is now far worse. We do not have just a Principle agent problem, the country is run by corporate renegades and those on foreign payrolls.

The principal–agent problem, in political science and economics, (also known as agency dilemma or the agency problem) occurs when one person or entity (the “agent”) is able to make decisions on behalf of, or that impact, another person or entity: the “principal”.[1] This dilemma exists in circumstances where agents are motivated to act in their own best interests, which are contrary to those of their principals, and is an example of moral hazard.

The Founders were well aware of this problem and tried to protect the citizens with certain provisions of the Constitution.

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”

This provision was violated by Barack Obama who spent billions to subsidize insurance companies to support his “Affordable Care Act” which was not successful.

Of course, the Amendments were intended to protect the rights of the people but the one that has been ignored for 100 years is the Tenth.

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

The Civil War largely ended Federalism.

In recent years, political parties have mislead their voters, the worst offender being the Republican Party. The Democrats posture as the party of the working man but it has become a party with two wings, the rich who want social liberties, and the poor who want to be taken care of. Jay Cost has written a good book about the Democrats Party called, “Spoiled Rotten, which explains the current policies of the party that has adopted “Identity politics” in which race and victim status has become a principal focus. My own review of the book is here.

The Republicans have gradually become the party of small business but the interests of small business are not being considered as paramount as the party seems to be evolving into another party of professional politicians whose personal interest trumps (so to speak) the interests of the voters. The result has been the rebellion of the Tea Party and more recently the election of Dave Brat, an economics professor, to Congress defeating Eric Cantor, a member of the GOP leadership, in 2014.

The election of Donald Trump has presented the GOP Congress with a crisis to which many have responded by retiring. One wonders what the next step of their career will be. Few, I suspect, will return home to the district that elected them. Most will remain in DC as Cantor has done.

Immediately thereafter, Cantor accepted a position as vice chairman of investment bank Moelis & Company. and,

In February 2015, the firm opened its Washington DC office, following the hire of Eric Cantor, former House Majority Leader, in September 2014.

That was bad enough in 2017 but we now have President Ron Klain, elected by no one, with Joe Biden as a prop when he can read his cue cards.

I think Angelo Codevilla’s piece about “The Ruling Class” has the best explanation.

When this majority discovered that virtually no one in a position of power in either party or with a national voice would take their objections seriously, that decisions about their money were being made in bipartisan backroom deals with interested parties, and that the laws on these matters were being voted by people who had not read them, the term “political class” came into use. Then, after those in power changed their plans from buying toxic assets to buying up equity in banks and major industries but refused to explain why, when they reasserted their right to decide ad hoc on these and so many other matters, supposing them to be beyond the general public’s understanding, the American people started referring to those in and around government as the “ruling class.” And in fact Republican and Democratic office holders and their retinues show a similar presumption to dominate and fewer differences in tastes, habits, opinions, and sources of income among one another than between both and the rest of the country. They think, look, and act as a class.

Now, we have a ruling class whose loyalty seems to be to other governments, China, Russia, The EU ? Who are they working for? Biden attacks BREXIT, Supporting the EU over the UK, infuriating the British ruling party. Labour has already ridiculed Biden for his dementia. Who is writing Biden’s speeches ?

Thinking, Making, Profiting

256 years ago this month, James Watt made the conceptual breakthrough that enabled a much more efficient steam engine…an engine that would play a major role in driving the Industrial Revolution.  He had been thinking about possibilities for improving the coal-hungry Newcomen engine, then the best available, which lost huge amounts of heat every cycle through the successive heating and cooling of the cylinder walls:

It was in the Green of Glasgow.  I had gone to take a walk on a fine Sabbath afternoon…I was thinking upon the engine at the time…when the idea came into my mind, that as steam was an elastic body it would rush into a vacuum, and if a communication was made between the cylinder and an exhausted vessel, it would rush into it, and might be there condensed without cooling the cylinder.

But in addition to the many details involved in reducing this idea to practice, there was another problem inhibiting the creation of reasonably-efficient steam engines.  The boring of the cylinders…even when the best tools and the highest skills of the day were applied…was so imprecise that considerable quantities of steam escaped around the piston, greatly lowering the overall efficiency of the engine.

Enter Matthew Boulton, who became Watt’s partner, and John Wilkinson, a Boulton associate and foundry operator who was obsessed with all things cast iron.  Boulton and Wilkinson wanted a steam engine to provide the blast for Wilkinson’s foundry, and they wanted an engine with especially-large cylinders…which made the problem of tight cylinder/piston fit even harder to solve.

Wilkinson saw that the technology he had already developed for the very precise boring of cannon could, with some modifications, be adapted to the boring of steam engine cylinders.  Amid “searing heat and grinding din,” he achieved a cylinder, four feet in diameter, which “does not err the thickness of an old shilling at any part.”  With the combination of Watt’s separate condenser and Wilkinson’s improved boring process, the steam engine was ready for the starring role that it was to hold for the next century and beyond.

Key point: It wasn’t only the design of the improved steam engine that mattered, but also the process for making it.

What if Britain had been offshoring its foundry operations, with their “searing heat and grinding din” to another country?  Spain, let’s say.  Given the importance of the interaction between the design talent and the manufacturing talent, would the improved steam engine have been developed in the 1770s timeframe at all?  And whenever it had been developed, to which individuals and countries would the financial benefits of steam power have accrued?

The present-day parallel is the relationship between microchip designers and microchip manufacturing facilities…foundries, as they are actually called.

More about John Wilkinson, here.