Financial Shenanigans in the Age of Trump

        In the “They snuck it in while we weren’t watching” category, the big winner is….US Commercial banks. The one paragraph item in question was relegated to the last page of the world and national news section of the local rag, right beside the notice that Chuck E, Cheese has declared bankruptcy. Of course, Mr. Cheese has been bankrupt in numerous other ways, primarily having to do with good taste, for decades.

        The issue at hand was what has been called the “Volker rule.”  For those not intimately familiar with commercial banking regulations (which once included the kid) the news rang no bells …that is until I reflected upon recent history, like, say, the great recession of 2009-13 and the words “commercial banks” rang a bell. First, the sobriquet “Volker rule,” named for former “Fed Head” Paul Volker refers to section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which sets forth rules for implementing section 13 of the Bank Holding Company Act of 1956..

        The Dodd–Frank Wall Street Reform and Consumer Protection Act (commonly referred to as Dodd–Frank) is a United States federal law and an Obama initiative that was enacted on July 21, 2010, primarily as an attempt to stave off, by legislative fiat, further financial sector bleeding from risky use of clients’ money by large commercial banks. The law’s intent was to overhaul and increase financial regulation in the aftermath of the Great Recession. You remember, TARP, bailouts, mortgage foreclosures, unemployment, all that “stuff?”  It made changes affecting all federal financial regulatory agencies and darned near every part of the nation's financial services industry. Much of the act was consumer protection oriented.

        This act was a direct result of proposals by President Obama aimed at helping to prevent another epic economic tanking based on malfeasance at high levels of the US banking industry. Responding to widespread calls for changes to the financial regulatory system, in June 2009 Obama introduced a proposal for a "sweeping overhaul of the United States financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression". That pretty much sums up Dodd-Frank. The bill, based on his proposal, was introduced in the US House by Congressman Barney Frank, and in the Senate by Senator Chris Dodd. As one might expect, Most Congressional support for Dodd-Frank came from members of the Democratic Party, but three Senate Republicans voted for the bill, allowing it to overcome the Senate filibuster.

        One provision, the afore-mentioned Volker rule, restricted banks from making certain kinds of speculative investments. The act also repealed the exemption from regulation for security-based swaps, requiring credit-default swaps and other transactions to be cleared through either exchanges or clearinghouses.

 Understand, these were provisions to protect investors, borrowers, and financial product purveyors and their clients  from the no holds barred banking practices which had crept back in to the  rodeo which was the commercial banking industry after Depression era regulations had been eased by Congress.  The first Trump administration eliminated most of the Volker Rule’s regulatory prohibitions and provisions. Of course, lax supervision and little restraint is fine with the big guys in banking but hazardous to most of the rest of us who have IRAs and other retirement vehicles and accounts.

        For the uninformed, market manipulation, intentional or not resulted from the sheer size of funds involved in questionable securities, chief among them being high risk mortgages, bundled as viable and sound instruments. Proffered by agents for the big commercial banking houses which bundled and sold these dogs, there were easy customers aplenty, such as union pension funds, state employee pension funds, or simply large fund managers, seeking safe (hopefully) and profitable (primarily) places to put their money.

         Added to the mix were credit default swaps. This is bordering on a Grad school economics course, so I’ll just try to describe credit default swaps (CDS) as “I’m buying insurance to pay me if your investment tanks.” Think of it like this: Tom buys a racehorse with money borrowed from Bob. He plans to pay for the horse with its winnings. I don’t know either Tom or Bob, who lent him the money. Bob, the original lender might buy insurance (a CDS) that pays off the loan if Tom defaults. Bob can then, since he feels sure the horse is a winner, sell me that CDS. If the horse wins the triple crown and Tom pays off the loan as promised, the lender, and I, whoever bought the swap, is out the premium we paid the underwriter as well as I’m out the money I paid the Bob, the original lender, to buy the swap.

        However, should the horse break a leg and never run, the owner of the credit default swap (me) will (usually) collect the full value of the loan. Bob, however, gets the asset (the horse), now worth only its glue value. This little gem of an idea is one of many concepts to use money to make money which have no real product or service whatsoever in the mix (derivatives). What it did do, was to entice such insurance giants as AIG to insure these bets against the system with large premiums involved, and investors to buy them.

        When the bundled mortgage housing bubble imploded, and the “tranches” of groups of unsound mortgages were just paper, and worth nowhere close to the literally trillions of dollars pinned on the illusion of their value, everyone lost. Insurers lost, because the amount of massive defaulted credit they had insured via CDS would have bankrupted several of them, so, the buyers of the CDS also lost because the Insurer couldn’t pay (and they had paid the CDS sellers for the swaps) and the sellers of CDS were left with almost worthless bundles of impending foreclosures.  By the end of 2007, the outstanding CDS amount was $62.2 trillion. For a bit of perspective, that figure was over ten times the national debt!

        Commercial banks, like Bear, Stearns, Lehman Brothers and Merrill Lynch were in trouble. Lehman Bros, with $600 billion in bonds outstanding went bankrupt. AIG, having insured individuals world-wide against such defaults via by CDS was saddled with far more claims than the dollars to pay them. As we know, the recovery was long and painful, and many have pointed fingers, each at another, but one salient fact remains uncontested:  CDSs are not traded on an exchange and there is no required reporting of these transactions to a government agency. This has been called a “shadow banking system” by economists. (Think “dark web,” if that helps) This situation is a direct result of unregulated market capitalism. The 2010 financial crisis demonstrated the lack of transparency in this huge “shadow market” which became a concern to regulators as it could pose a systemic risk to the US economy if allowed to function unchecked. This and other issues were prime concerns of the framers of Dodd-Frank.

        Oddly enough, as a candidate, Donald Trump was the most self proclaimed anti–Wall Street presidential candidate since FDR in the 1930s. He attacked Wall Street relentlessly, directly, and explicitly throughout the 2016 campaign and attacked his opponent, Hillary Clinton, nonstop as being “In the pocket of Wall Street.” He even put the then-CEO of Goldman Sachs, Lloyd Blankfein, in his last campaign ad as “one of the biggest threats to the people of the United States!” So, the Donald must have been a fan of Dodd-Frank, huh? Not so much. C’mon, we all know he’s a lying sack of shit, why should this be different?

        Predictably, critics of financial reform have claimed that the law and rules would kill banks' revenue and profits, which would prevent them from lending and would in turn kill economic growth and jobs. They did the same thing when FDR signed the Glass-Steagall banking act 1933. Glass-Steagall was different in that its principal regulatory function was to separate investment banking from retail banking. Repealed in 1999 by another banking act, the Gramm‐​Leach‐​Bliley Act, much of Glass -Steagall survives (separation of commercial and investment banking, FDIC, etc.). Neither would have stopped greedy lenders like Wells - Fargo, Washington Mutual or Indy Mac from making bad adjustable-rate mortgage (ARM) loans to persons willing to borrow today without regard to the inevitable adjustable rate increase next year. Republicans tend to push the blame onto Federal initiatives urging the cessation of red-lining and other discriminatory practices. Likewise, private mortgage brokers in (too) many cases simply threw rational thought and responsibility to the winds, realizing that, the more mortgages sold, the more commission and that the vast bulk of them would be resold to banks before the ARM kicked in triggering, in a lot of such instances, default.

        Understand, once a mortgage broker okays and finalizes a mortgage, they are on the hook for that loan, but in today’s home loan world, most of these loans are then quickly sold to a bank or other professional money lender who is now the recipient of the buyer’s payments or the loser if the mortgage defaults. The mortgage broker then has no further fiduciary responsibility (or risk!)  

So, did Dodd-Frank and the Volker rule damage or stifle the vitality of the commercial banking industry as some have predicted? Hardly. In fact, in virtually every quarter since 2009, including throughout 2018 and the first quarter of 2019, the biggest banks recorded or eclipsed record revenues, profits, and bonuses while at the same time increasing lending.

Even so, at least 115 Dodd-Frank rules remained to be completed when the Obama administration ended, including executive compensation rules, securities-based swap rules, credit rating agency reform, and commodity speculation rules.

        Despite his constant excoriation of Wall as a candidate, after taking office, the Trump administration promptly set about dismantling the core pillars of financial reform by a number of regulatory reductions or eliminations, some of them were: 

Lowering capital requirements (easier, riskier commercial loans, important to Trump, himself heavily leveraged)  

Enabling more unregulated derivatives dealing (you know, like the CDS that triggered the bubble damage)

Rolling back consumer and investor protections by reducing prudential regulation of systemically significant banks (this is critical because it takes Federal eyes off those banks not considered critical, which now is almost every major “non-bank” as these commercial entities are sometimes called.

        Both GE capital and AIG are examples of “too big to fails” which are now off the list. One, AIG, not only failed spectacularly and engaged in egregiously irresponsible conduct, but also required an unlimited bailout, which ultimately amounted to $182 billion. The other was General Electric (GE), which, although with fewer headlines and less egregiousness, would have gone bankrupt without being bailed out as well. removing all of the “non-banks” from scrutiny is insane and even bankers outside that unique arena have said so.

         Neutering the regulation of systemically significant nonbanks and the shadow banking system, stopping enforcing the laws, is actually almost siding with the predators. Goodbye Volker rule.

        From 1929 through 2010 the US experienced a number of recessions. Some have been cyclic adjustments with no singular or specific cause; several were adjustments from wartime to peacetime employment. Three however, and two of these are 21^st century phenomena, were the result of a specific sector of the nation indulging in irresponsible market operations based on that most base of motives - greed, leading to runaway speculation. All three, the great Depression, the Dot-com crash and the great recession are the result of individuals who rarely if ever get their hands dirty, playing fast and loose with other people’s money or betting other’s money on “what ifs.”

        Trump favors loosening responsible observation and regulation of these entities. His sycophants echo that claim. History says he and they are wrong. History is powerful proof that regulation and financial stability don’t stifle growth and prosperity. That is why Dodd-Frank re-regulated the financial industry and why the first Trump administration's deregulation is so reckless and dangerous. The assault on the Volker rule was simply the latest insult.

As discussed, Trump did succeed in weakening Dodd-Frank, especially the regulation and oversight of commercial banks. As a result, in March 2023, Silicon Valley Bank was allowed to become sufficiently mired in poor decisions regarding the spending of investors’ funds that they ended up with low interest investments that left them unable to meet depositor’s demands. This deregulation, specifically due to Dodd-Frank’s emasculation, especially in the area of the Volker rule, exempted banks with assets below $250 billion such as SVB, from “stress tests and tougher capital and liquidity requirements, and in 2019 the regulatory burden was further reduced for all but the largest banks. These decreases in accountability and oversight allowed SVB to take the risks it did with other peoples’ money.

Since Biden was now in office, the predictable and ludicrous Republican response was to blame “Woke banking practices” whatever that might even mean, for the results of Donald Trump’s assault on reasonable and necessary government regulation. While commercial banks and huge debtors such as the Trump Organization whine about it (regulation), the real victims are powerless in many cases.

The housing bubble collapse between 2007 and 2012 resulted in more than twelve million foreclosures in the United States. The crisis was caused by a number of factors, but the main contributor was the substantial number of predatory and unaffordable subprime mortgage loans given out in the early 2000s. This was escalated by lax banking rules allowing high risk mortgages to be graded like currency. RIP Dodd Frank, we hardly knew ye.

One wonders what further financial shenanigans Trump might espouse and abet after he’s done gutting regulations in other areas. One can only hope desperately for a blue tide in the 2026 House and Senate elections.

        

                       

The Speech No One Wants to Give

 

“To attain any success, it is quite clear that the Federal government cannot avoid or escape responsibilities which the mass of the people firmly believe should be undertaken by it. The political processes of our country are such that if a rule of reason is not applied in this effort, we will lose everything — even to a possible and drastic change in the Constitution. This is what I mean by my constant insistence upon “moderation” in government.

        Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things…. a few other Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible, and they are stupid.”

        Sound a bit like AOC speaking?  Perhaps a Socialist candidate? Hardly. This is an excerpt from a letter written by Republican Dwight D. Eisenhower, then POTUS, to his brother Edgar. The gap is where he named several names of those he considered “stupid.” The second paragraph reveals how far the modern Republican party has strayed from Ike’s precepts, having become markedly anti-union, and progressive labor legislation, and threatening Social Security. Of course, since many modern Republicans reap the windfall from farm subsidies, they have actually increased (read RED states).

        However, the title of this essay reflects my belief that we should consider and honor the scientific process, by which I mean mathematics, statistics, and demographics. One of the aspects of science which some political conservatives and an even greater percentage of conservative religionists deny, is that as conditions change (read climate change, here, as one example) so should our expectations and actions.

        One such Conservative objection to some change is the fear that doing the right thing isn’t the “right thing’ if it affects business’s bottom line or electability of partisan hacks. Another thread is voiced by those who are stuck with a creation “story” which is increasingly revealed as creation “myth” by science. The tragedy here is that as we are seeing as I write, the right salesman with the proper snake oil can, seemingly against all odds, unite these seemingly disparate forces.  

        First off we have the claims that Congress is “pilfering the Social Security Trust Fund.  Social Security sometimes collects more money than what is paid out. Between 1937-2009 the Social Security Administration (SSA) received $13.8 trillion in income, but expended $11.3 trillion in benefits, according to the agency. However, for the past 13 years, the retirement program hasn’t taken in enough FICA taxes to pay current year benefits and that's where the Trust Fund, comes into play.

Every year, excess money, if any, is held in the "Social Security Trust Fund" which get invested into Treasury bonds and securities that make a lot of interest. In the Fiscal Year 2018 those investments racked up $3 billion alone, adding to a total of $2.895 trillion then `````currently in the fund. So any money taken in from Social Security isn't being divvied up among Congress, that money is being invested in the most secure way--with U.S. bonds.

"No, [Congress] did not take any funds from SS," Dean Baker, senior economist at Center for Economic and Policy Research, said. "SS funds are credited to its trust fund. Unless Congress changes the law (and it hasn't), any money dedicated to the trust fund is in the trust fund.”

        Having said that, it must be noted that one consistent bugaboo, addressed with varying amounts of arm waving and hot air, to some degree by both parties, has been the continually burgeoning federal budget cost share of social welfare programs, especially Medicare, Medicaid and Social Security programs. Much has been written, some of it mine, regarding health care costs and the significant responsibility for their escalation borne (or which should be borne) by outlandish and extortionary drug pricing by Major Pharma corporations. This isn’t a “fix”, but it would be a hell of a start if Congress had the guts to put lobbyist influence aside and repeal Medicare part D’s prohibition on negotiating drug prices like every private health insurer can and does. That simple action would reduce government drug spending by about $133 billion annually! For comparison, that savings would defray about 30% of the 2020 interest on the national debt. (prior to whatever effects we saw from Covid-19)

        On the other hand, and more directly related to my topic is a set of demographics which requires nothing more than literacy and common sense to interpret. The implications are plain and the “fix” apparent, if unpopular.

Obviously, we live longer, and not just a little longer, but almost 15 years longer. Actually, in 1935 when Social Security was incepted, the average life span was 60.7 years of age. This meant that, as the creators of the concept enacted it, the odds were that the average worker wouldn’t live to collect a dime!

        Looking at the table yields some fairly simple conclusions, but the “big” one is harder to see.  First: in 1940, Ida May Fuller, became Social Security's first beneficiary. She was exceptional because she had lived longer than the average of her peers.  By 1945, at full wartime productivity, for each SS beneficiary, there were 41.9 workers paying into the system (actually building for a while, an excess, the illusory “trust fund”.) Today’s workers, on the other hand, are paying today’s recipients. Yes, they are.

Since this point, the Social Security Board of Trustees has released an annual report detailing the financial health of the program. This includes taking a closer look at the income and outlays for Social Security each year, as well as forecasting the future solvency of America's leading retirement program. In each of the last 40 reports, the Trustees have warned of a long-term funding obligation shortfall. In other words, the Trustees forecast cumulative income received in the 75 years following the release of a report and determined that, inclusive of cost-of-living adjustments (COLAs), outlays would handily outpace income. In the 2024 Trustees Report, Social Security's long-term cash shortfall was estimated at $23.2 trillion through 2098. This was up $800 billion from the projected 75-year funding obligation shortfall listed in the 2023 Trustees Report.

         By 1975, because of the increase in recipients and a 7-year increase in longevity, the “workers to recipients” ratio was down to less than 1/3 of the 1945 figure. Meanwhile, the birth rate in the USA had decreased by about a third. The number of retirees reaching eligibility age was still increasing, primarily due to longer life expectancy. As seen in the table, the Social Security share of the federal budget was blossoming as well. At this point, another factor came into play, that being the numbers of persons receiving disability or survivor’s benefits from the same pot of cash. Surviving spouse with minor children coverage was part of the 1935 law, but disability wasn’t covered until 1956. This may seem cynical, but it seems to me that the availability of SS disability has in many cases created a cottage industry for lawyers willing to “arrange” it for a slight fee.

        The monster lurking under the bed, however, was the post war “Baby Boom”. From 1945 to 1961, the birth rate in the USA was higher than ever before or since, creating a “bubble” in the progression of population growth. The effects of this bubble have been felt by every industry in America from home building to children’s clothing to insurance to health care, and the list is practically endless. Take a child born to Mr. and Mrs. Howard Cunningham in 1948, after Howard returned from his army duties and they settled down. Their son, call him Richie, born in 1948, hit Social Security full retirement age of 67 in 2015, and he’ll draw Social security, assuming he’s got good genes, for at least another 11 or 12 years. 

        Because the baby boom continued into the early 1960s, and because the birth rate dropped to about half of that of the boom’s peak years, there are now even fewer workers contributing to the payments made to the steadily increasing numbers of boomer retirees planning, like me, to live a lot longer than average.  I’m barely a “pre-boomer, born in 1942. The boomer class of 1955 -1960, when the birth rate per 100 thousand was still over 20, is yet to come. The ‘55s hit in 2022, more to follow.

        So, what? The first observation, admittedly in hindsight, is that this issue was completely predictable and avoidable. It was obvious by the numbers between 1945 and 1955. Disability compounded the issue, accounting. now, for about 20% of the Social Security payout. What to do?  Let’s first reflect on what could have been done. This demographic trend was obvious at least 70 years ago (1950) and at that time, considering the increased lifespan, a forward-thinking Congress (yeah, I’m aware that’s an oxymoron) might have passed legislation raising the full retirement eligibility age by a year each of the following three or four decades. At most, that would now have full retirement at age 69. An accompanying increase for the early retirement age would have also been appropriate. Passing this legislation in 1950 to go into effect in 1960 would have “grandfathered” every worker within ten years of retirement. Had this been done, recognizing that the changes occurring were predictable and irreversible, Social Security would be well and good. As it stands, more than a third of retirees take early Social Security benefits, in many cases because they have prepared for retirement in other ways. In other words, foresight could have “fixed” the problem by 1990. Unfortunately, only a smattering of that philosophy was applied, and that was too late.

         What might be done now? This is the part that no politician wishes to address, because any real fix will be unpopular with some. First, recognize that any change that doesn’t grandfather persons with current retirement plans is blatantly unfair, so: pick a time certain, say, at least 5 years from the enacting of legislation, which raises the full eligibility age to 68. Also, raise the early retirement age to 63 in, perhaps, just three or 4 years. Additionally, decrease the initial amount of early retirement to encourage individuals to wait. In another five years plan for another bump to age 69 for full retirement, while leaving early retirement at 63. Increase the reward for waiting. In a “worst-case” scenario, also require employers to include disability insurance equivalent to Social Security disability as a perk. Also enact realistic legislation defining “disability” in meaningful terms. I’m reminded of the Louisiana mother of four sons, all supposedly mentally unable to hold jobs, yet all of whom had cars, but when their disability status was questioned, her rationale was that “Every young man needs a car.” The literature is rife with tens of thousands of well documented cases of SS disability and Medicare/Medicaid fraud as well as simple benefit fraud, such as cashing checks of long dead parents.

        Explain, in simple English, that by probably 2035 the problem will begin to moderate on its own, as the “Bulge” of the baby boomers pass through the system and on to whatever cosmic Karma waits for them. The birthrate began to decrease after a plateau at 1955-57. The class of 1957 would be 81 by that time and total numbers of beneficiaries would be decreasing steadily.

         Do not, however, like former Senator Alan Simpson or ex-Congressman Paul Ryan (himself the beneficiary of Social Security survivor’s benefits), address this issue as if the people who depend on it are “greedy” and are the ones at fault. “Recipient shaming”, when the current issues are the fault of decades of Congressional heads in the sand (or up their keisters), is a sleazy cop-out by those who had the data to see this demographic shift coming sixty years ago yet took no action. 

Yeah, it would have been the speech no one, presidents included, wanted to give but had that happened, with appropriate “grandfathering,” this essay wouldn’t have been written.  Too often this one- dimensional approach, usually including the use of the word “entitlement” somewhere, seems to blame currently eligible recipients rather than address the issue of Congressional unwillingness to tackle unpopular issues squarely.      

 

 

                             He’s Dumb, But Not Alone

        The Orange Dunce of Mar a Lago once told his then media bitch, Sean Hannity, that “Wind energy won’t work because the wind only blows sometimes.” More recently he raved about the "fumes" associated with wind power.  As a science nerd, I could go into some detail about why this is bat shit crazy, but I’d rather have a frank discussion about why the “Green New Dealers” also need to do more homework. I’m reminded of the stoner, interviewed at Woodstock who opined that Woodstock was a “model for the world, man.” It was a great concert, but hardly a model for urban planning, living or (definitely not) sanitation.

        Idealism, untempered by a grasp on the possible, rather than the Utopian. is a lousy framework for getting meaningful things done. This is certainly true in the case of exclusively wind power as part of a nationwide electrical grid. In furtherance of the goal of “all wind all the time,” Green New Dealers almost always (I only add “almost” because someone, somewhere, may have stated factual data but we have yet to see it) grossly understate the true cost of wind in several ways.  Understand this before I begin: I loathe fossil fuel’s negative effects on the environment and public health. What I am referring to here is the amazingly lo-ball numbers we are being fed re: wind as opposed to other possibilities.

        To begin with, energy storage in a “situational” power source situation (Solar, Wind) is critical to maintaining unbroken power supplies to consumers. “Peak” energy consumption across the nation is after dark much of the year. Clearly, solar must overproduce during the day and store energy for the dark hours. This battery technology, while burgeoning is grossly expensive and in its infancy and will cost far more than the solar panels which produce the energy they would have to store. Solar has the advantage of no moving parts, ergo lesser maintenance, however, it also is easy to damage (hail, normal wear and tear) It also wears out and is carbon intensive in both manufacture and disposal.

        Wind, of which the dunce in chief demonstrably knew little, has more and more expensive concerns, generally glossed over by the naïfs who tout the GND as a panacea.

        The two major disadvantages of wind power include initial cost and technology immaturity. First: constructing turbines and wind facilities is extremely expensive for the amount of power generated by each unit- an average about 2.5 to 3 KW per, with 5 KW as a probable maximum. Secondarily, at the current state of technology, maintenance, such as changing oil in rotor bearings at the top of the tower weekly, is periodic, essential, frequent, and expensive. (Ask the Danes!) It is even costlier in offshore installations.  We, too frequently, see cost per kwh listed as production cost, not cost to consumer, which is extremely equivocal. As an example, most cost per kwh numbers we see are misleading because they frequently omit the initial cost of hardware. This “total” cost, which is passed along to consumers is known as levelized cost. 

    What GND’ers cite (in the vicinity of 3.1 cents per kwh) is like citing the cost of a car wash considering only the water, soap and minimum wage imbecile who reminds you to “put the window up!” without adding the cost of the machines, the building, the electricity, etc. This is about like bragging about how many miles per gallon your hybrid gets without considering the initial cost of the vehicle (still a good investment by the way!) Here is a sobering real-world number: Danes pay about 40 cents per kwh, which is 13 times as high as the GND’ers hype states!

       Moreover, it almost always fails to consider energy storage costs for the periods when demand exceeds supply. This seems minor, but in a nationwide grid it is critical. Just to power New York City alone (this is just households, not the far more energy hungry hotels and businesses) would require the installation and constant operation of about 5,700 wind turbines, not to mention energy storage capacity. The cost of the turbines alone, at an average $3.5 million apiece, would run to well over $20 billion.  At an average annual maintenance cost per turbine, add another $270 million annually!

        That cost, passed on to consumers, would be almost punitive. This does not include the far, far higher energy demands of industrial operations.

        In the real world, the cost to non-industrial consumers of electricity fluctuates over the entire nation, from a low of 8 cents per kwh in Idaho, to 18.1 cents per kwh in NY and CT, to a whopping 33.2 cents per kwh in Hawaii. Idaho is relatively cheap because most of the electricity produced and consumed there is generated by the cleanest source on the planet – hydro-electric plants. Idaho also has some geo-thermal (hot underground water) sources and uses the free heat to heat some buildings. According to the Federal Energy Information Administration, the "levelized cost" of new wind power (including capital and operating costs) is 8.2 cents per kwh, essentially in a dead heat with Nuclear. Advanced “clean-coal” (bullshit!) plants cost about 11 cents per kwh but advanced natural gas-burning plants come in at just 6.3 cents per kwh.  Without regard to the environment, this makes gas even cheaper than wind and solar. Of course, there’s that nasty little carbon footprint thingy which remains relatively high. Coal is filthy in all ways and constitutes a well-documented public health hazard.

        None of the above should be construed as indicating a dislike for wind power, but rather as a factual prequel to a discussion of an even better option. 

        What is being overlooked is that there is another “zero carbon footprint” technology, its reputation damaged by a movie and a “no harm/no foul” accident within weeks of each other in 1979. Three Mile Island and “The China Syndrome” scared the hell out of many Americans, the more ignorant, the more scared. The nuclear power industry in the US has still never really recovered, despite the fact that perhaps the most rigorous public health data collection effort ever, concluded in the US after 40 years, announced the total casualties either direct or indirect from the TMI incident as “zero.”  Nuclear power emits no exhausts, discharges no pollutants into streams, has a zero-fatality record over about 70 years of US operation, land based and seaborne, yet some shun it because we fail to understand it.

        Want to be “Green?”  China and India obviously do. They are pioneering liquid salt reactor technology which the US gave up in the late 1960s. Why did we do so? Even though the prototype had a record of over 6000 effective full power hours of incident free operation at the Oak Ridge, TN, facility, it was not capable of producing weapons grade Plutonium, ergo it was scrapped in favor of high-pressure fast breeders (like Chernobyl).

Liquid salt reactors can use Thorium, of which we have literally thousands of years’ worth, and are inherently stable and safe. They even produce fewer waste products to be handled than current pressurized water designs, of which, by the way, I have more than a passing operational knowledge of, at sea, submerged. Interestingly, molten salt fuel comes with an inherent safety feature. If the salt overheats, it naturally expands and makes the fission reaction less effective, which shuts down the reactor. Tech innovators such as Bezos with Amazon, Gates with Microsoft and Altman with OpenAI are united in betting on nuclear energy. And they're not alone. The nuclear sector is experiencing a renaissance, bolstered by climate goals and energy demands, A wind farm would need 235 square miles to produce the same amount of electricity as a 1,000-megawatt nuclear power plant. The nuclear power plant can operate at constant power day/ night, wind or calm, freezing or scorching requiring no massive (and, as yet, non-existent battery) banks. 

        We love to cite Denmark when we discuss Utopian social models which we have been conned into believing. One such is the fact that the Danes are wind powered for all electricity, much of it sea-borne (off shore). So, they must get really cheap electricity, right? Not so much. They pay more (40.5 cents per kwh) than even Hawaii!  apparently the “green” in Green New Deal doesn’t refer to the color of money! I failed to mention the estimated half-million birds of all sorts killed annually in the US with existing wind turbines. Finally, what would all these new turbines cost? Assuming all current non-wind energy production became “wind based” and at today’s prices, merely (roughly) about 15% of the current total national debt! This of course excludes land costs (astronomical) and, yet to be invented storage capabilities. National bankruptcy, anyone?

        Bottom line? Nuclear power is safe, reliable and can be sited anywhere, no matter how remote. Both China and India are already building next generation liquid salt reactors for electric power production. Although China leads the world in terms of total wind generation capacity, they also would seem to realize the advantages nuclear offers, since, this year (2025) they are building a pilot liquid salt electric power station in the Gobi desert which, while only about 9 feet by 7 feet in size, will produce enough power for about 45,000 homes. This is equivalent to 54 wind turbines operating at constant maximum output. Future liquid salt plants will produce far more, in the area of 1100 mw. This would be sufficient to power more than half a million homes. It would require more than 400 wind turbines operating at full capacity, 24 hours per day, to provide the same output.

      Do the homework, be informed, unlike the current occupant of 1600 Pennsylvania Avenue.

 

                              Fascism, a History and a Warning

 

        “Fascism: A form of far-right, authoritarian ultranationalism characterized by dictatorial power, forcible suppression of opposition and strong regimentation of society and of the economy which came to prominence in early 20th-century Europe.”

        “Antifa: a political protest movement comprising autonomous groups affiliated by their militant opposition to fascism and other forms of extreme right-wing ideology.”

        Trump’s first term continued reference to Antifa was primarily aimed at shifting attention from his continued and increasing cult of personality/oligarchy/isolationism. America’s relationship to and with fascism is not, I think, generally very well understood, if at all, by the majority of our population.

        On the simplest level, it is noteworthy that most multigenerational US families have, or have had, family members whose military service they venerate. If this service was in either of the two World Wars, the opposition was Fascist in both. In WWI, Germany was, although a nominal monarchy, in essence fascist in some of the areas as listed in the definition.

        However, the aftermath of that war was, almost predictably, the breeding ground for a far more vicious version: Sven Reichard, in a 2009 book, summed it up thus: “The experience of World War I was the most decisive immediate precondition for fascism.”  In other words, without that war there might well have been neither fascism in Italy nor National Socialism in Germany. “Without the First World War and its consequences, but also without the October revolution and the symbolic strength of Leninism, fascism would have remained a sectarian movement.”

        Although peripheral, it cannot be overlooked that the Versailles treaty, while endeavoring to make things better for colonial subjects, also condemned Germany to post war economic struggle, always a fertile field for a rabble rouser, and Germany certainly spawned one. Additionally, Hitler availed himself of a sort of “reverse” religious zealotry, not the usual muscular support of a specific faith, but the brutal condemnation and demonization of one. Blaming Jews was nothing new to Germans, as German Knights had slaughtered Indigenous Jews before going to the Crusades and even reformer, Martin Luther, had, in his last years become a rabid anti-Semite.

Hitler took it to the next level, blaming Jews, not just for the “denial of Christianity” but for essentially every ill Germany endured in the late 1920 and early thirties, having been devastated by the great depression. Into this misery, Hitler revived every Germanic heroic legend, even some Scandinavian ones, implying that they had been part of a Germanic “golden age” (they hadn’t) and, as Benito Mussolini would in Italy, called for a return to a largely manufactured “heroic age.”            Hitler’s speech, the infamous “prophecy” of 30 January, 1939, is significant: “Today I will once more be a prophet: If the international Jewish financiers in and outside Europe should succeed in plunging the nations once more into a world war, then the result will not be the Bolshevizing of the Earth and thus the victory of Jewry, but the annihilation of the Jewish race in Europe.” I find it noteworthy that Hitler intentionally conflated Judaism with Bolshevism (Communism) even though Marx was baptized Lutheran and Lenin Catholic.

        Subsequent events are well known, as both Germans and Italians succumbed to propaganda and “manufactured histories” to become text-book fascist states. What is less emphasized (by some) in the US is that, while we fittingly venerate those who   landed at Normandy and fought and died valiantly in Italy, North Africa, and Western Europe, we hear far less about how long many Americans stridently opposed US entry into the war.

        The America First movement was amalgam of groups from liberal to conservative, united under the banner of “Stay the hell out of the ‘European war’.”  Underlying this however, and under emphasized, in this writer’s opinion, was the sense of some Americans that the Germans and to a lesser extent the Italians were “Christian folks like us” added to this was the undercurrent of American anti-Semitism, reflected by the refusal of US authorities to allow the 900 passengers on the MS Saint Louis, all Jewish refugees from Nazi Germany seeking sanctuary, to land in America. The vessel was forced to return to Europe where, eventually, about a third of the passengers were executed.

        Even earlier, such prominent Americans as Henry Ford had stoked the fires of anti-Semitism. One business acquaintance recalled that, on a 1919 camping trip, Ford had lectured a group around the campfire. He "attributed all evil to Jews or to the Jewish capitalists," the friend wrote in his diary. "The Jews caused the war, the Jews caused the outbreak of thieving and robbery all over the country, the Jews caused the inefficiency of the navy.” (??) In 1918, Henry Ford acquired a newspaper, The Dearborn Independent. A year and a half later, he began publishing a series of articles that claimed a vast Jewish conspiracy was infecting America. The series ran in the following ninety-one issues. Ford bound the articles into four volumes titled "The International Jew," and distributed half a million copies to his vast network of dealerships and subscribers. "I regard Henry Ford as my inspiration,"(!!!!) Hitler told a Detroit News reporter two years before becoming the German chancellor in 1933, explaining why he kept a life-size portrait of the American automaker next to his desk. Actually, both Ford and GM had readily retooled German plants to build the military machines which were used to invade Poland in 1939.

          In July 1938, four months after the German annexation of Austria, Henry Ford was awarded and accepted the highest medal that Nazi Germany could bestow on a foreigner, the Grand Cross of the German Eagle. The following month, a senior executive for General Motors, James Mooney, received a similar medal for his "distinguished service to the Reich." As one of the most famous (yet markedly undereducated) men in America, Henry Ford legitimized ideas that otherwise may have been given little authority. In Trump world, immigrants and LGBT persons are the new “Jews.”

        Franklin D. Roosevelt realized that the fortunes of the US were tied to a free Europe and tried in several ways (not going into details here for brevity’s sake) to ease the nation farther toward open alliance (and armed participation with) Britain and France. We’ll never know how long that might have taken, because another Fascist/Monarchist state halfway around the world attacked the US Naval base at Pearl Harbor, Hawaii. It was easy to get an almost unanimous declaration of war against Japan since pre-existent anti-Asian racism and religious intolerance fueled the fire. When we declared war on Japan, Germany, and Italy (the Axis Powers) actually honored their treaty with Japan and declared war on the USA.

        I know, “That’s fine Mike, but why the history lesson?” It’s simple really, because as Santayana (a philosopher, not a guitarist) famously said, “Those who forget the past are condemned to repeat it.”

        It could well be argued that a sizable portion of Trump policy and rhetoric reads and sounds like precursors of fascism. Look at those he admires, beginning with Vladimir Putin, who rules Russia with the collusion of a handful of oligarchs, responsible to no elected body, willing to sanction the poisoning of political rivals, controlling all media and glorifying the state above all else. Continue with the Elon Musk bromance. Recall Musk mourned the end of Apartheid in his birthplace, South Africa.

        Then consider Mohammad Bin Salman, Absolutist ruler of Saudi Arabia, whose $1.3 trillions make Trump salivate, while ignoring the brutal dismemberment of a journalist at his (MBS’s) order, (yes the CIA told Trump so, but he chose to disbelieve, because “Hey, he’s rich?”)

Trump has described both of these individuals as “very nice, very fine people.” His closeness to Musk is beyond weird and scary.

        In conclusion, nothing I can write will change the xenophobic, racist, religiously intolerant, economic elitist attitude of Trump’s many supporters, but I would hope they would at some point acknowledge that, by condemning minorities and inclusionary policies  at Trump’s bidding, they are supporting a political philosophy against which some of their relatives almost certainly fought and died in Europe and the Pacific, less than a century ago.