About a week ago, the following story caught my eye:

For the first time on record, bicycles have outsold cars in Spain.

 

Higher taxes on fuel and on new cars have prompted cash-strapped Spaniards to opt for two wheels instead of four. Last year, 780,000 bicycles were sold in the country – compared to 700,000 cars. That’s due to a 4 percent jump in bike sales, and a 30 percent drop in sales of new cars.

And this is not primarily about a wave of government policies promoting cycling, or an outbreak of climate activism among the young … its the result of the crisis. As this NPR story concludes:

“We are learning every day, about the crisis. Maybe it’s not changing the things that we thought at the beginning would change – the politicians, the banks, that kind of things. But it’s changing our minds,” says Juan Salenas, another cyclist at the Bici Crítica rally. “We spend less. We try to live with [what we have, and be] more happy. And we try to keep what we have, because maybe we will lose it tomorrow.”

Spain is experiencing a shift in which both conventional and eBike sales are increasing, but as The Economist reports, in Germany, France and the Netherlands, where transport cycling culture is more entrenched, the shift is within bicycle sales:

In the Netherlands one bicycle in six sold is an e-bike. In Germany the cycle industry expects electric-bike sales to grow by 13% this year, to 430,000 (the most sold in any European country), and to account for 15% of the market before long. In France sales of traditional bicycles fell by 9% in 2012 while those of e-bikes grew by 15%.

 

E-bikes are catching on as people move to cities and add concern about pollution and parking to worry over petrol prices and global warming. Frank Jamerson, who produces the Electric Bikes Worldwide Reports, estimates sales at around 34m this year and perhaps 40m in 2015. China buys most of them and makes even more, with European sales of 1.5m in second place.

So, as events in DC have unraveled to the point were the outcome that the Democrats are fighting for is to fund the government at austerity “sequester” levels, this Sunday Train looks at Electric Bikes.

Just as the GOP Shutdown was getting underway, 2 October, Matt Levine at Bloomberg was calling on the administration to Mint the Premium Bonds!.

The creepy trick that has swept the nation* is the platinum coin option, in which Treasury mints a $1 trillion platinum coin, deposits it at the Fed, and suddenly has an extra $1 trillion of money to spend without incurring any debt (and, thus, without breaching the debt ceiling). This is a good trick as tricks go, and it’s been extensively advocated by Josh Barro, Paul Krugman, Matt Yglesias, Joe Weisenthal, basically every economics blogger really. I am unaware of any good arguments that the platinum coin wouldn’t work, but it does have the problem that it is really really really really obviously a trick. I mean, it’s a trillion dollar coin, come on. So it’s sort of sub-optimal symbolically, and would make people really mad. It’s a crisis-enhancer, although with the benefit of avoiding immediate default.

So there is an alternative that Matt Levine is putting forth:

Instead of just rolling those Treasuries — paying them off at 100 cents on the dollar by issuing new Treasuries at 100 cents on the dollar — it should pay them off at 100 cents on the dollar by issuing new Treasuries at 275 cents on the dollar and using the extra money to pay its bills. The 10-year yield today is around 2.6 percent, so you could sell a 10-year with a 23 percent coupon for 275 cents on the dollar.**** The 30-year is about 3.9 percent, so a 14 percent coupon should get you there. Etc. Math here.

Now, given my previous writing on Fixed Interest Payment Consol Bonds … would this work too?

Yes, in a functional sense, of course it would. Its a similar, though not identical, answer, but it goes through the same loophole. Premium bonds are, by law, counted on their face value. So any bond with a face value substantially below its issue price that is used to roll over maturing long term bonds would “roll back” the debt ceiling count.

Over at Wonkblog Ezra Klein, one of MSNBC’s favorite neoliberals, writes:

The problem with President Obama’s shutdown strategy

…

 

The political theory here is clear: Obama is trying to marshal public opinion against the GOP. If enough Republicans are getting angry calls from their constituents and seeing polls that look disastrous for their party, they’ll find a way to back down.

 

But it can backfire badly. Every second Obama stood at that podium made it a bit harder for the Republican Party to retreat. The more he repeats that this is their shutdown and they need to end it, the more their party suffers if they can’t find a way to prove the president wrong. Obama’s efforts to move public opinion toward  him also moves  Republican opinion against him.

…

 

… the White House is still pursuing a strategy that makes it harder for Boehner and the Republicans to back down. Their gamble is that the power of public opinion will overwhelm the power of presidential polarization. And if the Republican Party loses totally — loses in a way where they can’t tell themselves it was a win — that’ll be the end of these tactics.

The problem with this kind of brinksmanship tactics is that they may lead to an economic collapse ~ and given Europe’s ongoing problems with the scourge of harsh austerity policies in the context of a monetary system built broken, that might be a worldwide economic collapse.

Now, the threat of the economic collapse does not come from the Government Shutdown, it comes from the risk of default on the government debt, due to the US Treasury running out of juggling options before it needs to sell a new issue of Treasury bonds to avoid a default on payment of government obligations.

And the puzzling point is that the Administration insists that the risk of default is real, even though the Administration itself can take the threat of default off the table.

Sacramento Kings fans rejoice! The California State Legislature has passed and Governor Brown has signed a measure paving the way for a new downtown Sacramento Arena, potentially keeping the Kings from high-tailing it to Seattle!

What does this have to do with sustainable transport? More than someone would think who only read the headlines. The bill as passed involves several changes to the evaluation of projects that will benefit sustainable transport projects, including:

Provisions of SB 743 will:

 

–Remove parking and aesthetics standards as grounds for legal challenges against developments in urban infill areas near transit stops.

 

–Modernize the statewide measurements against which traffic impacts are assessed and resolved, allowing developers to offset the impacts by building near mass transit stations.

 

–Expand an exemption from CEQA litigation for mixed residential/commercial projects located within transit priority areas where a full environmental impact review has already been completed.

The first of these three reforms reduces the opportunity to block a project on the grounds that it does not provide sufficient subsidy to motorists in the form of parking. The third of the three reforms reduces one of the disadvantages that mixed-use Transit-Oriented-Development faces compared to greenfield sprawl development.

But it is the second of the three reforms that is the real lede: within a half mile of a transit service that meets a quality of service threshold, it is no longer necessary to prove that the project maintains the same “Level of Service” to automobiles alone as an aspect of “Environmental Quality”.

cross-posted from Voices on the Square

James K. Galbraith in Government Doesn’t Have to Borrow to Spend quite clearly and without economic jargon explains why the debt ceiling debate is puppet theater:

The debt ceiling was enacted in 1917 for one purpose: to fool the rubes back home. Just as Congress started running up debts to pay for the war, they voted in the ceiling to pretend otherwise. And that is why whenever reached, it must be raised.

…

In the modern world, when the Treasury writes you a check, your bank credits your account. That’s how money creation works. The Treasury then issues bonds to absorb that money. Banks like this because bonds pay more interest than reserves. But there is nothing economically necessary about the bonds. This is obvious since the Federal Reserve buys back many of them, leaving the public with the cash it would have had in the first place.

…

Under present law, Jack Lew could even pay off public debt held by the Federal Reserve by issuing a high-value, legal-tender coin – so long as the coin happened to be platinum. A coin is not debt, so that simple exchange would retire the Fed’s debt holdings and lower the total public debt below any given ceiling.

James Galbraith admits that this is a gimmick … but then, so is the debt ceiling, so it would be one gimmick fixing the fact that one faction of one political party is holding the faith and credit of the US government hostage over what was originally and has always been since a gimmick.

One point that constantly comes up when the push to 100% sustainable, renewable power is raised is the problem that “renewable power sources cannot be relied on to deliver power 24/7”. This is a talking point pushed by the propagandists for Big Coal in particular, since the biggest challenge to their long term existence as an industry in the United States is the threat that we begin to get serious about tapping our abundant Wind Power resources on-shore in the Great Plains and Mountain West and off-shore on the Great Lakes and Atlantic Coast. When the wind is blowing, it substantially undermines the market for fossil-fuel “Baseload Power” (see (The Myth of Baseload Power).

After all, consider two scenarios, one in which a power source replaces half of the power from coal by replacing half the power, all of the time, and a second, in which a power source replaces all of the power, half the time. The second is a greater threat to coal-fired power, since it swings the advantage to natural-gas fired power. Natural-gas fired power is presently killing off coal-fired plant construction, and a sufficiently large and volatile supply of Windpower would make that permanent.

So of course Big Coal spreads the idea that all sustainable power is volatile and if its volatile, it can’t provide all of our power.

This present essay is not about answering that argument rationally. That was the topic of The Myth of Baseload Power. This present essay is about attacking the political foundations of Big Coal.

After all, propaganda about “Clean Coal” and spreading the myth that there is this special kind of power called Baseload power that sustainable energy has impact because of the political influence of Big Coal in Coal Country. And this is a particularly pernicious influence, since it runs on a cycle of:

• Coal production provides export base employment in an area.
  
• Coal production also diverts a majority of the value-added from production out of the production area;.
  
• which helps assure that the Coal production areas are, on average, lower income economies than elsewhere in the country;
  
• which undermines the area’s capability to diversify its economy, helping to assure that the jobs in Coal production are valued jobs in the local area, which increases local political support for “supporting” Big Coal;
  
• And with a less diversified economy, there are fewer resources available to contest the political power and influence of Big Coal.
  
• With its political power, Big Coal ensures that the rules in place continue to ensure that a majority of value-added is drained out of the production area

This essay is about undermining that political power at its base, by creating more jobs from a direct rival to coal production than Big Coal can offer. Once a better deal is made available, with more employment, more value-added circulating locally, and no destruction of people’s health through the hauling up of poisonous by-products from underground, the foundation on which Big Coal’s political power is based is in a position to fracture.

What is that direct rival to coal production? Bio-coal production.

cross-posted from Voices on the Square

The Debt Ceiling debate is Yet Another GOP Abuse of the System, but the entire debate runs under the pretense that the Treasury cannot sell new bonds if the Debt Ceiling is not raised.

Look at the history of the debt ceiling, and its easy to see where people get that idea. Way back when, the Treasury went to Congress for each and every new bond issue. Then in 1917, with war breaking out in Europe, Congress reformed the system to give the Treasury more freedom of action, establishing an overall ceiling within which it could issue bonds. It was like moving from a series of individually negotiated loans with a bank to obtaining an approved credit line with the bank.

From 1917 to 2010, the increase of the debt ceiling when required was a routine transaction. But after the radical reactionary wing of the Republican party ran under the successful “Tea Party” branding, a number of radical reactionary GOP Congressmen balked at this routine transaction, and took the full faith and credit of the US Government hostage. This resulted in the “sequester” debacle, in which spending cuts that were deliberately designed to punish the American people in case Congress could not agree on the insane policy of cutting spending in the middle of what is now a five year old Depression. Congress could not agree, and so the brain-dead punitive spending cuts were put in place instead.

After that experience, turning out as badly as progressive populist critics at the time said it would, now there are bold words from the White House demanding a clean debt ceiling vote, without any hostage taking.

The good news is that if the Treasury turns to Consol Bonds, they can win this fight no matter what the radical reactionary wing of the House Republicans decide to do.

cross-posted from Voices on the Square

Last week, I considered the concept of Pedal to the Metal Climate Change policies: the kind of policies that we will now have to pursue if we become serious about Climate Change, because of the 16+ years we will have wasted since 2000 that would have given us the opportunity to pursue a more gradualist approach. At that time, there was a debate that could be characterized as an argument between “incrementalism” and “purism”. However, at present, and therefore by the time the current administration will be completed, we have passed the point of asking “how fast should we go”, and have passed into “how fast can we go” territory. Hence the Pedal to the Metal approach.

Last week, I did not rehash Micheal Hoexter’s overview of a Pedal to the Metal Climate Change policy, but rather looked at the leading edge of that policy package, what I dubbed “front-runner” policies, and looked the Steel Interstate as one example of a front-runner policy for a Pedal to the Metal Climate Change policy package. This week, I am going to turn from Rapid Freight Rail and consider what kind of Rapid Passenger Rail policy would qualify as a front-runner policy for a Pedal to the Metal Climate Change Policy.

Joe Firestone has written an excellent piece at New Economic Perspectives on the phony fear mongering about the risk that the Republicans might not vote to raise the debt ceiling. He uses as his point of departure exquisitely fraudulent framing that Ezra Klein adopted for the proposal to trade a budget continuing resolution without defunding Obamacare, for taking the fight to the debt ceiling.

The reason the Republican leadership is making the case for that trade is that a continuing resolution has to pass both Chambers, and the version that defunds Obamacare is Dead On Arrival in the Senate, which will amend the bill to restore Obamacare funding and refuse to budge in reconciliation. So sooner or later, the House will have to pass a continuing resolution that includes funding for Obamacare, or else shoulder the political blame for shutting down government.

But what Joe focuses on is the framing of trading off a budget fight for a debt ceiling fight, in which Ezra says:

his is terrifying that this is the argument. And the analogy I would use is this is like trading a bad flu for septic shock. it is the worst trade in the history of all trades you could imagine . . .

Trading a bad flu for septic shock might be the worst trade in the history of all trades, but the only thing that makes the debt ceiling dangerous is the administration’s refusal to call the bluff. As Joe lays out, there are not one, not two, not three, not four, but five options, and three of them would succeed in eliminating the threat that the debt ceiling vote can every again be used for political blackmail.