The Party of Almost Inevitable Decline

Taken as a whole, the Republican convention had an air of decline. It did not help that the convention had to start a day late, in part because of the party’s own efforts to cut funding for disaster response, or that the natural disaster that brushed past the site of the convention caused damage on a massive scale elsewhere for the duration of the convention. But the feeling of an institution in decline that was so in evidence at the convention was not merely the result of bad luck. It was an expression of the people at the convention, most especially the delegates.

One of the bigger stories to come out of the convention was the expulsion of a group of delegates for harassing a television news employee. The delegates shouted derogatory remarks and threw food. This is not a scene we would have seen in any of the Republican conventions of the previous 40 years. The Republican party is not capable of the level of performance we have expected of it in the past.

The more obvious self-inflicted wound was best symbolized by the cowboy hats, a reference to the last Republican president, George W. Bush. He liked to be seen in a cowboy hat even though he was not a cowboy and did not actually do anything outdoors except when the new cameras were there to see it. Bush wore a cowboy hat to represent his approach to foreign policy, which came to be known as “cowboy diplomacy.” So the cowboy hats that were very much in evidence at the convention were asking for a return to cowboy diplomacy. It is not that cowboy diplomacy was a success. Among its other failings, it got the United States into an inconclusive war that was perhaps as expensive in military terms as World War II. No one at the convention was claiming that cowboy diplomacy was a success. If delegates were celebrating it, it was just because they had nothing newer or better to offer. That is the kind of thing you expect to see in an institution in decline.

Decline characterizes not merely the Republican party organization itself, but also its view of the United States as a country. Big parts of the Republican agenda, which I wrote about yesterday, might be seen as residual anger from the fight against Bill Clinton, president until 12 years ago, who made a point of saying that success was the result of everyone working and that we could not afford to leave anyone behind. The Republican agenda, if you read between the lines, is based on the opposite idea: that we cannot afford to take everyone along; that if we do not start throwing people over the side now, we will all go down together. The rhetoric in the convention speeches returned again and again to the feeling that the less successful people in the country — poor people, those who are unemployed or who fall ill, retirees, soldiers wounded in battle, students, and so on — are dragging down the whole country. That is not the image of a country progressing and expanding, but of one that faces too many burdens to make real progress. This sense of almost unavoidable national decline is not necessarily the view of Republican voters, but it is certainly the current view that comes across from the Republican party as an organization.

The same attitude is reflected in the uglier actions of the delegates at the convention. Their crude behavior and outbursts were not mere racism, as they might have appeared on the surface. The vast majority of people at the convention, obviously not all aging white men, were treated in a polite and civil manner. Republican delegates reserved their threats and abuse for those who they saw as working ineffectively. This was not the view of the whole Republican party, obviously, but there is a faction in the party that believes that the solution to most problems is to get rid of the people whose performance is below average. It is the strategy that corresponds to the military order “Every man for himself,” which in the military is reserved for situations so disastrous that any attempt to coordinate is likely to lead to delay that compounds the disaster. The rest of us in the United States must come to understand that a significant fraction of Republicans see the current condition of the country as one that rises to that level of despair.

This Week in Bank Failures will return next week.

How the Republican Risk-Shifting Agenda Would Cause a Recession

With the national convention winding down, there is a lot of talk about the way the Republican party’s agenda revolves around sex. Initiatives in criminal law, science, health care, culture, and elsewhere seem to have been engineered together with the hidden purpose of making sex more of a problem for the ordinary person. But the Republican agenda is not purely about sex. Sweeping all the sex-related initiatives aside for the moment, you are likely to notice that much of what remains is about shifting risk — specifically, reducing the risks that government and big business take on by transferring most of that risk to ordinary middle-class families and individuals.

The need to reduce the burden of government is perhaps a credible rationale, but it is clear that the whole range of consequences have not been considered. Key among them is that risk-shifting to workers and consumers is recessionary in nature. If Republicans do away with unemployment compensation, for example, this reduces both consumption spending and work force participation. Unemployment compensation covers much of the risk of losing one’s job, and without it, a significant number of people — millions — would be moved to decide that taking a job and joining the work force is too risky. At the same time, everyone who has a job would feel the need to keep additional savings to guard against future income loss. Saving means spending less than you earn, and this reduction in consumer spending translates almost directly to a slower economy.

It is a similar story with the phase-out of Medicare, new restrictions on access to health insurance, repeal of workplace safety rules, eliminating food safety inspections, and dozens of similar proposals in the Republican agenda. In general, forcing workers and consumers to take on new risks leads them to seek ways to reduce their risks in other areas. The perception of excessive risk leads a person to become more reluctant to take or continue with risks. People try to stay in or near their comfort zone or their idea of how risky and chaotic they think their lives ought to be. So how do you reduce risk, once you have decided to do so? People reduce the risks associated with the commercial system mainly by participating less in the commercial system: borrowing less, working less, spending less. Any form of reduced participation tends to lead to reduced economic activity, and reduced economic activity in the aggregate is exactly the defining quality of a recession. Any abrupt shift of risk onto workers or consumers, then, is likely to cause a recession. Attempted on the scale that the Republicans are talking about, it could trigger a depression.

This effect will happen especially easily during the current period of deleveraging, when people are trying to reduce their exposure to risk by reducing their debts. Deleveraging shows that people already worry that their personal risk levels are too high. Load more risk onto them at this point, and the macroeconomic consequences could be severe.

The result is the opposite of what the Republicans are promising. They say they want to expand the economy by turning free enterprise loose. Yet expansion is not the result when you turn free enterprise loose into the teeth of a recession. The “free” in “free enterprise” very much implies the freedom to fire workers, close locations, and move jobs to other countries. Indeed, if the current wave of deleveraging were to be compounded by massive risk-shifting from government and big business to individuals, the resulting economic calamity would give businesses few choices other than to cut back wherever they could, or to shut down wherever they could not cut back.

Post-Traumatic Associations in Hurricane Isaac

Hurricane Isaac is passing just south of New Orleans this morning. There is still a chance that the hurricane could make a direct hit on the city, but there is reason to hope that the worst weather will stay five miles away. Even without a direct hit on the city itself, there is extensive damage in the area, and power will be out and low areas flooded for days.

Isaac arrived on the same day of the year as Hurricane Katrina in 2005, which also narrowly missed New Orleans, though on the other side of the city. That was a hurricane with ten times as much energy, with winds strong enough to knock down buildings. Like today, the area of worst damage was barely five miles away from New Orleans.

Katrina was one of the worst natural disasters in recent memory, and whatever post-traumatic or other associations people have with Katrina will be strongest right now because it is exactly that time of year again. As long as it is another hurricane at the same place on the same day of the year as Katrina, much of what people think of Isaac will be colored by their recollections of Katrina.

This applies also to the speculators who, since yesterday, have driven up the prices of oil and especially gasoline. Some of the worries about supplies are well-founded, but part of the price movement is simply the vague worry that we are seeing another Katrina-like event.

Hurricane Isaac is classified as a Category 1 hurricane because of its wind speed, but it is a larger and stronger storm than that category suggests, and this is reflected especially at the shoreline with waves and surge. From what I am hearing, people are taking the appropriate level of precautions, so I am hopeful that everyone is safe. In spite of people’s worries that the current disaster will turn into a repeat of a past disaster, there are many things to indicate that today’s events will come out differently.

Up On the Ikea Roof

It is one of the most obvious places to put a solar array: on the otherwise bare roof of a large commercial building. Furniture retailer Ikea is two years into a plan to take advantage of its roof space with solar installations on top of most of its U.S. stores. It has just completed a solar array on the roof of the Twin Cities Ikea store in Bloomington, Minnesota store. The rooftop array will generate an amount of electricity comparable to the electricity used to operate the store. (The exact amount, as with any solar installation, depends on each day’s weather.) Last month it was the same story at the Ikea store in Canton, Michigan.

At both Ikea stores, the rooftop array is the largest solar array in the state. The mere fact that Ikea can make this claim in multiple states tells you how much untapped rooftop potential there is. It would make more sense if the U.S. government was doing this kind of proof-of-concept project on its own rooftops, as I have proposed previously, but we can hope that other businesses with large buildings will look to duplicate Ikea’s success.

Arctic Sea Ice Is Dying

There is an exclamation point on today’s NSIDC Arctic sea ice extent map.

It is not just that the ice extent has reached a shocking all-time record low three weeks before the usual end of the ice melting season. You can see the shape of an exclamation point at the top of the ice pack on the map.

The exclamation point is formed by two polynyas, areas of water surrounded by ice. The dot, making its first appearance on the map today, is a new polynya that formed at 86° north latitude. This is an event that is remarkable in itself. Polynyas don’t form easily so far north. If ice is not safe in this spot, 400 kilometers from the North Pole, it is not safe anywhere in the Arctic.

Polynyas also do not usually form this late in August, with the sun so low in the sky, but then, for Arctic sea ice, this is no ordinary August. In the past, we would expect to see rapid ice melt in June and July. Then in August, melt slows, coming almost to a stop by the end of the month. Not so this year. Melt has continued at a July-like pace right through August.

This year is also not a repeat of 2007, the previous record low year. That summer had the kind of sunny weather you would see once in 8 years to promote rapid melting. This summer’s weather was more average and should have protected the ice better. Yet the extent graph shows almost a straight-line descent from the beginning of June to the present.

The ice is thinner than ever, and this is a special irony. This year, we thought we would finally get good data on ice thickness. Alas, the ice is too thin for the radar models to work.

At the beginning of the summer I said that this would not be the year when the Arctic ice would melt out completely, because there was not enough open water in the Arctic Ocean to soak up the sun in May. Open water is key to ice melt because the sun is high in the sky in May (into July) and water, being darker, absorbs at least five times as much solar heat as ice does. I was expecting the ice extent data to follow along the lines of 2007 and 2010, and until July, it did. But it’s easy to see that something new is happening now.

We have reached the turning point where a warmer ocean surface is rejecting the ice. The Arctic sea ice is dying.

The warmer ocean also means a weak fall re-freeze, with perhaps only 11 weeks from January to March for new ice to build up. Some observers believe the volume of ice at the peak in March or April 2013 could be no larger than what has melted already this year. If they are correct, then all the ice could easily melt away next summer, and every summer from then on. And the ice that forms in winter will be more like the ice in the Atlantic Ocean than what we are used to seeing in the Arctic.

Ice takes heat away when it melts, so the loss of Arctic sea ice will affect weather all over the Northern Hemisphere. Of special concern to me:

• Greenland: without sea ice to keep things cool, the entire Greenland ice sheet could melt away in 150 years. This will result in a sea level rise that will swamp most of the world’s coastal cities. There will be thousands of earthquakes along the East Coast of North America.
• The heartland: areas in central North America far from the coasts are likely to get less regular rain, and will likely no longer be suitable for growing crops like corn.

These future consequences are speculative. We don’t have enough historical data to guide us on the specifics. Alas, what the latest sea ice data says is these changes are upon us now, whether we understand them or not.