Monday, February 27, 2012

Is Nuclear Power Powerful?

              For over forty years, I have been an advocate of sustainable energy.   This was in spite of the fact that, as an electrician, I spent most of my working life building powerhouses.  I have worked on coal burners, nukes, and even trash burning powerhouses. But throughout that time, I always felt that there was a better way; a sustainable way.  Whenever I would argue this, people would be skeptical as to whether sustainable energy could ever supply the voracious demands of modern living.  And I never found a simple and convincing way to explain that it easily could.
            Then recently I was driving on I 380 between Waterloo and Cedar Rapids, and off to my right I noticed the white, puffy column of steam and hot air rising from cooling tower of the nuclear power station at Palo, Iowa.   And I also noticed that the sky that day was nearly covered with white, puffy cumulus clouds that had occurred naturally.
            The Palo Nuke has been there 40 years, and is Iowa’s first and only nuke, and the second powerhouse I ever helped to build.   At full power, it produces just under 500 megawatts.  And the steam cloud that rises from its cooling tower is about the size one expects from that size reactor.   You see, for any given set of atmospheric conditions, there is a fixed relationship between the size of reactor and the size of the steam cloud.   A nuke is a heat engine, and its efficiency limited by the Carnot equation.  (Efficiency is equal to the absolute temperature of the heat source, minus the absolute temperature of the heat sink, all over the absolute temperature of the source.)  Since there are limits to the maximum temperature that a steam turbine can withstand, and since a heat sink much colder than ambient air is unlikely, this means that in the real world, no more than about 40% of the heat energy can be harvested as mechanical power.   The heat generated by the nuclear reaction produces steam, which flows through the turbine and is then condensed in a condenser cooled by water from the cooling tower.  This coolant water absorbs heat from the waste steam and becomes warmer, only to be re-cooled as some of it is evaporated in the cooling tower.  In the cooling tower, the warm coolant water flows over open slats, like a huge venetian blind, as ambient air is blown through it.  Evaporation takes place, and that’s where most of the heat goes.  In fact, except for the 40% of the original heat energy that is converted into mechanical power to drive the generator, nearly all of the heat is lost to evaporation. The more heat the nuclear reaction produces, the more heat removed by evaporation in the cooling tower, and the bigger the cloud produced.
            I wrote that rather tedious paragraph to establish one point:  In any heat engine large enough to have a cooling tower, you can tell the size of the heat source by the size of the cloud arising from the cooling tower.  But the atmosphere is also a heat engine, and behaves by the same rules.  As I have stated, on this day the entire sky was filled, from horizon to horizon, with cumulus clouds.  And the solar energy required to boil moisture out of the ground to produce those clouds is precisely the same, for every gram of water, as the heat required at the Palo Nuke cooling tower.   To evaporate a gram of water always takes precisely 540 calories. While the size of cloud produced for any level of power will vary from day to day because of local atmospheric conditions, both the power house and the cloud bank are using the same air on the same day.  I stopped my car on the road shoulder, and as I looked at the clouds I estimated that the small plume rising from the nuke was less that a hundredth of the total cloud mass which I could see, just in the small patch of sky visible where I was standing.  Not all of the solar energy striking the earth evaporates water. Most of it warms the ground, and some of it is reflected back into space.  But just the small amount that was boiling water out of the ground, in just that area, had a hundred times as much energy as the nuke.  And yet people continue to question whether renewable sources can supply our needs.  Are they insane?

Saturday, February 25, 2012

Health Ins Exec Says Single Payer Inevitable

    The 2/23/2012 online edition of Forbes has an interesting piece by Rick Unger.  He quotes Aetna Insurance CEO Mark Bertolini  as saying that the era of profit driven health insurance companies is over. He says that the ban on "underwriting,"  (which is defined in the article as: finding healthy people, selling them insurance, but rejecting customers who are actually likely to get sick) eliminates any chance of making a profit.  A single payer system would solve some of our problems--but not all of them.   Check this out.

Wednesday, February 15, 2012

Abandoned Satellite Ground Stations

            The online edition of The Atlantic posted a piece on Feb 6/12 entitled:  Earth Station:   The Afterlife of Technology at the End of the World.  This piece is about the Jamesburg Earth Station, a now abandoned satellite ground station in California in a remote valley just inland from Carmel.   Except for the empty buildings which once held the tons of electronic equipment required to decode and process the hundreds of channels of telephone, teletype, and TV signals which once flowed through this nerve center, all that remains is a massive, 90 ton, 90ft diameter parabolic dish.  The property is owned by a millionaire who mainly bought it for the land.              Yet this station allowed us to see the Apollo 11 moon landing live, and to receive live Viet Nam War reporting, and Nixon’s visit to China.  And it was the main communications link from North America to the Far East for over 30 years.
             This was a second generation installation.   The first generation rig was built about a decade earlier, a ways further up highway 101 at Camp Roberts.  The world’s first successful synchronous orbit communications satellite was Syncom II, launched from Vandenberg Airbase in July 1963.  The main earth stations to work this satellite were at Ft. Dix, NJ, near the east coast, Camp Roberts, CA, near the west coast, and the USNS Kingsport at sea.  These stations were testing cutting edge communications technology at that time, and were manned by civilian technicians from various contractors, and by a team of military technicians from the U.S. Army Signal Corps.   As a young Signal Corps technician, I was stationed at Camp Roberts and was a member of this team.  In an earlier post, I have described the Syncom project.

            After Syncom had proved that the theory of synchronous communication satellites was sound, (a theory suggested by Arthur C. Clark in 1946) the next step was to build larger satellites and larger ground stations to utilize them.  And with the Jamesburg station, that step became reality.  But the racks of communications equipment that gave us these marvels have long been scrapped, like a old horse hauled off to the knackers after a lifetime of faithful service.  Emotionally, the Atlantic piece is like Turner’s painting of The Fighting Temeraire.  It reminds us that when the noblest technical achievements of a previous generation are being hauled off to the scrap yard, we might at least pause for moment of reflection.  Or perhaps a better metaphor might be the elaborate sand paintings which Buddhist monks ritually construct,  only to be swept up and poured into a bucket—and scattered into the sea.  The monks do this to remind themselves that all material things must pass. 
            I once read that through we still have all the telemetry tapes from our moon shots and even some early interplanetary probes,  we can no longer read them because the computers and software designed to do this have all been scrapped, and we do not even have copies of the codes which would allow  us to reconstruct them.  No one bothered to save a copy. They say that the space race was a contest between East and West, and I always presumed that the “East” in this race referred to the science of the Soviets.  But perhaps we were really trying to compete with the sublime detachment of the Buddhist monks.   Perhaps the space program was the grandest sand painting of all time.

Thursday, February 9, 2012

Workers Share of Productivity Gains

       In the February issue of The Electrical Worker,  the journal of the International Brotherhood of Electrical Workers,  union president Ed Hill makes an interesting point.  He says that in America, from the end of WWII to 1970,  there were across the board income gains for all groups, because gains in productivity were shared by workers.   (Actually,  this trend for broadly shared income growth goes clear back to the 1870s.)   But since 1970, real wages have remained stagnant because though American workers have continued to increase their productivity, they have not claimed a share of that increase.  If they had continued to claim the same share of their own productivity gains as before, then the median household income in America would be about $90,000 instead of $50,000.  That's where the rising inequality is coming from.

Saturday, February 4, 2012

The Real Housing Crisis

            Everyone is now painfully aware that the collapse of a housing bubble has precipitated a market crash that took down the entire economy.  And we are reminded every day that the millions of “underwater” mortgages are a persistent drag on the economy—a drag which still prevents a full recovery.   Yet the same editions of our Sunday papers which cover this story occasionally carry stories of how inflated rent levels in some areas are also dragging down the economy.  For most of the last century, the rule of thumb for housing costs was that a family could not afford to pay more than 25% of its gross income on housing.  Yet in most major metropolitan markets today, it is not uncommon for two-income families to be paying over 50%.  And this is often true across a wide range of income levels, from minimum wage couples paying rent on a slum apartment, to upscale couples with two professional incomes.
            Housing bubbles are a cyclical phenomenon; they have been around a long time.  But price instability in housing and high housing cost are both symptoms of a deeper problem that has been around at least since WWII, which is that  jobs often continue to concentrate in areas where there is no additional land on which to build more housing.  In short, we actually have plenty of housing, and sometimes we even have plenty of jobs—but the jobs are not usually where the houses are.   Why?   Because no one in charge directing the massive capital flows that determine the geographical focus of new industrial or commercial development really cares whether employees have a place to live, nor has anyone ever attempted to hold them accountable for such outcomes.  This was left to the market, and the market couldn’t give a damn whether we live in a paradise or a sewer, even when both options are equally available.
            If you’re pressed for time today and are looking for a good place to stop reading, you’ve found it.  If you’ve read the above paragraph and you understand it, then you may leave with confidence that you already grasp the main idea.    But if you have a few minutes, then read on and I will give you a first person account of what it’s like to live through a regional collapse of the entire economy.

So, You Think You Have a Housing Bust?

            There are a few areas which are not experiencing the current housing bust. In Northeast Iowa, we already had our housing bust in what was called “the farm crisis of the 80s.”  So when housing prices started doubling every few years after 2001, we were still trying to climb out of the hole we fell into twenty years earlier.  In short, we didn’t get in on the bust because we never got in on the boom.
            The interesting thing was that in the 80s, while small towns linked to the farm economy or to manufacturing were utterly devastated, the main commercial centers were almost unaffected. Towns in Northeast Iowa like Waterloo, Cedar Rapids, and Dubuque had the highest unemployment rates in the country while Minneapolis, St. Louis, and Omaha were only vaguely aware of the problem.   In 1989, eight years into the crash, the May/June issue of Utne Reader’s cover article asked, “Is your dream home an impossible dream?”  Utne Reader was printed in Minneapolis, and I got the impression that the people who published it had never lived anywhere else.  The gist of the article was that rising house prices might permanently close the option of ever owning a home to an entire generation.  It claimed that houses were now so costly that there was no way to buy one except by selling one which you already own. The cover art showed a young couple with children stopping to look longingly at an advertisement for an older house.  The house was a typical older two-story house with a big front porch, well kept, and in a nice old neighborhood.
             I wrote a letter to the editor (which they printed) claiming that in some places, including Waterloo, Iowa, the picture would make no sense because anyone who could afford the nice new car in the picture would turn up their nose at the house they depicted.  Not that there was anything wrong with the house.  You got the impression that it was in a pleasant, residential neighborhood—one that was safe, well kept, and close to good schools, shopping  centers, hospitals, and parks. 
            But, I pointed out, in Waterloo, Iowa, such properties were available at prices starting at less than $10,000.  Since I knew the editors would have trouble believing this, I enclosed a current real estate brochure.  And I highlighted at least a dozen such houses with asking prices under $10,000.  I’m sure they were flabbergasted.  Let me quote some of what they printed from my letter.  
            “How did this happen? Mr. Greider and Mr. Kuttner [authors of the articles to which I was responding] both point out that part of the housing problem derives from the vertical redistribution of income wrought about by recent economic policies. This is true. But another part derives from a geographical redistribution of income that has placed the jobs and the people where the houses aren’t.
            As high interest rates threw the Third World into a depression and raised the value of the U.S. Dollar, it reduced our agricultural, mining, and manufacturing exports while making it difficult for manufacturers to compete with cheaper foreign imports. This mainly affected farm areas and middle-sized industrial cities, most of which are located in the heartland. As plant closings forced families to flee the heartland for the coasts and for the larger cities, they left behind boarded–up houses, reduced levels of retail sales, and a declining tax base.  They left behind ghost towns.” 
            I suggested that everyone who reads their magazine probably knows how hard it is to buy a house in a place like Minneapolis, but few have any knowledge of how hard it is to sell one in Waterloo, only 200 miles to the south.  The process I described had affected all middle-sized manufacturing towns in the heartland, but probably none more so than Waterloo, Iowa.              In the 1970s, Waterloo had been a boom town.  Because of the high inflation of the 70s, farmland prices rose because investors from all over the country needed a place to park their money that would hold its long term value.  Few Iowa farmers owned their farms free and clear. Their net worth was figured as equity, that is, the value of the farm, including equipment, minus the debt owed against it. From 1971 to 1981, farmland price went from $400 per acre to $2,400 per acre.   Farmers who had been struggling to eke out a living suddenly became millionaires, at least on paper.  Naturally, they immediately upgraded their equipment.  John Deere Tractor works, which had already started expanding and modernizing their Waterloo plant in the late 60s, built a new, state-of-the-art foundry, engine plant, and assembly plant between 1970 and 1980. This building boom provided steady work for over a thousand skilled craftsmen, and I was one of them. When the rest of the country was having a recession in 1976, I worked overtime every week. The demand for tractors was so intense that after Deere finished their new foundry, they still kept the older, less efficient foundry running because they needed every tractor they could build.  They worked so much overtime that the union threatened to go on strike in an attempt to gain the right to refuse Sunday overtime work.  By 1980, Deere had 16,000 workers in the Waterloo bargaining unit, another 4,000 salaried and steady work for at least 4,000 outside supplier and contractor employees like me.  All 24,000 were well paid, and their discretionary income, when spent, supported a huge retail sector.  The union claimed that because of the excellent wages paid to Deere employees, the county was supporting   more small businessmen per capita than any place in the country.  And the state planning office said that more roads would have to be built into Waterloo, because at its present rate of expansion, “greater Waterloo” in ten years would grow from about 125,000 people to over 250,000, making it the largest city in the state.
            Then came the recession of 1982.  This recession was national in scope, and fairly mild in large commercial cities. But it was horrible in manufacturing towns, and a complete meltdown for places like Waterloo.  Mr. Volker’s attempts to control inflation through high interest rates and tight money threw the entire country into a recession. That was intended.  But this crashed the price of farmland, which went from $2,400 to $1,200.  Some farmers who had been millionaires now had negative net worth, so it would be a long time before anyone bought another tractor. Many farmers went bankrupt, as did some of the banks which had financed them. Deere went from making 225 huge tractors per day went to only 25 per day, and they laid off workers back to 21 years of seniority.  Only about 4% of Iowans were farmers, but the economy of the entire state was almost destroyed.  People who could not have imagined that they had any connection to agriculture found themselves jobless--in towns where everyone else was also jobless.   As a skilled construction worker, I would be the very first to be laid off and the last re-hired.  After all, what would anyone want to build in a ghost town?
            I remember discussing this on the phone with an out-of-state friend.  He advised, “Why don’t you just pull up stakes and leave?”   I asked, “You mean sell my house?”  He replied, “Yes, of course!”   I said, “To whom?”
            At that point, there wasn’t a great exodus—not yet. Although the recession in the rest of the country was much milder, there was no place where there was actually much hiring, so there was really no place to go.  But as jobs of any kind became available in other states, there was an exodus. Some of those who left took minimum wage jobs and lived in their cars; some moved in with relatives. But they still left. There was no choice.  Over ten thousand homes in Waterloo went up for sale.  In most neighborhoods, you would not have noticed this, because the realtors had made an agreement that no “For Sale” signs would be posted. (Having a “For Sale” sign on every house would tend to depress sales even further.)  But if you asked a realtor, “Which of the houses on this block are for sale?” the reply would be, “All of them.  Make an offer.”    With 10,000 sellers and no buyers, the price just dropped, and dropped, and dropped.  By the time the brochure which I sent to Utne Reader was printed, many homes had lost 75% of their value. 
            My cousin bought a house on contract for $2,700.  This house was in bad shape.  But his brother bought a house for $6,000 in the same area that was a solidly built, two story home with nothing wrong with it at all, except perhaps that it could have used a coat of paint. This was in a working class neighborhood, but by no means a slum.
            In 1979, my parents had been living on an acreage on the edge of town. My father had a stroke, so they sold the place and bought a smaller house on a tiny lot in one of the nicer old neighborhoods in town. This was just before the crash.  They sold the acreage for $85,000 on contract, which would be about $200,000 in today’s dollars. They sold it to a Deere worker, who was a 40 year old man with a growing family.  He had owned a small house free and clear, which he sold for $30,000 cash.  He made a $15,000 down payment on my parents’ property, and put the other $15,000 in the bank.  Since he had 15 years of seniority at Deere, anyone would have assumed that had a secure job.   And he made excellent wages. My parents planned to use about half of the receipts of this sale for retirement income, and use the rest to make the payments on the small house they were buying. The asset they were selling was the product of a lifetime of hard work and frugal living. It was their entire life savings, and the sole hope of a comfortable retirement. For about two years, things went as planned.
            Then came the big Deere lay off. And even with 15 years seniority, the buyer was laid off.  And so were 12,000 others, along with another 20,000 who had never worked directly for Deere’s, but who eventually lost their jobs as a direct consequence of the collapse. As industrial workers left the area, teachers who had taught the children of the Deere workers also found themselves without jobs. (My wife was one of these teachers.) And then the car salesmen who had sold cars to the Deere workers and to the teachers also left.  And then the dentists and doctors who had tended the needs of the Deere workers and the teachers and the car salesmen-- also left; etc.   After my parents’ buyer could no longer make payments on the property, my parents allowed him to stay there for about three years anyway.  There would be no point in foreclosing on the house, since there was zero chance of finding a new buyer.  Eventually, the buyer decided that even a house for nothing was of no use in a city with no jobs. So he abandoned the place and moved to Oregon, where I heard he took a minimum wage job and lived in his car for a while.
            The retail sector of Waterloo’s economy was decimated. The main commercial street in old downtown Waterloo was 4th Street and a couple streets either side of it, for about one mile.  In 1983, I drove down this stretch of 4th Street and counted two hundred store fronts.  All except 6 of them were boarded up. The suburban shopping centers did better.  They maintained about 50% occupancy.   But all the stores still open had laid off all but a skeleton crew, and there were few if any customers.  As goods were finally sold, little of it was replaced. Eventually, the stores were nearly as empty of goods as they were of shoppers.
            There was little chance of any of the laid off people ever finding work if they remained in the area.  But there was also no place to go that had enough job openings that there was much chance of an out-of-towner with no local social connections being hired either. At one point a new Target store was to open in Waterloo, and they announced that about 50 minimum wages jobs would be offered.  It boggles the mind why it would occur to a chain like Target to put a store in Waterloo at a time when all the stores in Waterloo were going broke. Perhaps they had started the process earlier, when the boom was still going, and had entered into contracts that were irrevocable. Or perhaps they assumed that the downturn would be a short term problem, and they wanted to build while land and skilled labor could be had cheaply.  Or perhaps it was a bureaucratic bungle by executives who were living in a city so completely unaffected by the problem that they still did not understand what was happening.  In any case, on the morning that applications for these jobs were to begin, there were 500 people waiting in line, and some of them had been in line all night. The company did not have enough application forms to go around, so fist fights broke out over who would get the last forms. So who were these pathetic losers who would fight it out over a small statistical chance of getting a minimum wage job?   They were skilled and semi-skilled Deere workers who until recently could not remember a year when they had earned less than $50,000.  (In today’s dollars, that would be more like $110,000.)  Many of these people had been raised on farms, and all of them had worked hard all of their lives.  They were well-disciplined, competent people had become successful, and they had earned that success. They saved their money, built beautiful homes, and planned to send their kids to college. And for most of their lives, they had assumed that anyone who was homeless or hungry was probably an alcoholic, a drug addict, or lazy beyond description.  But they were to be rudely disabused of this misapprehension.   
            About the time that my parents’ buyer left, my dad died, which left my mother with even less income.  With my father alive, she had her social security, his social security, plus his retirement pension from the packing house where he had spent 25 years. Now there was only her own social security. Eventually, she resold the acreage to a young school teacher for $27,000 on contract.  She had tried renting it out for a few years, but no one ever paid more than the first month’s rent, they usually trashed the place, and legal action was required to evict them. For a few years, she left it sit empty.  I felt sorry for my mother, but at the time, even with only social security, she still had more income than any of her kids.
       My brother had more than 21 years of seniority at Deere, so he would not be laid off. But then there was a lockout (the company called it a strike) that lasted seven or eight months.  Since this idleness was technically due to a "labor dispute," none of the workers were eligible to collect unemployment benefits. My brother's family had always been a one income family; and he still had a mortgage and three kids.  At that point in time, my brother's situation was at least as desperate as mine.
            The only businesses still booming were law practices and law enforcement.  Lawyers were needed for bankruptcies, foreclosures, evictions, and divorces. And there were still jobs in law enforcement, though I can’t imagine that arresting your cousins for stealing food for their children would be a pleasant way to earn a living. It was like a page out of Les Miserables . A couple guys were electrocuted trying to take down a high tension line so they could sell the copper for scrap.
            I was laid off from my job as a construction electrician on Christmas of 1980.   For the next ten years I took whatever electrical work I could obtain through out-of-state IBEW hiring halls. I rarely found work for more than five months per year, and once I went 18 months without a single day of paid employment. In 1982, I put 16,000 miles on my car, traveling the country looking for work, and found none at all. I was in every southern state except Arkansas at least twice. (And the South is where the work was.) 
            My wife was also unemployed.  She had left a teaching job several years earlier to have a baby, and was told that a job would be waiting for her when she was ready to return.  But even before the crash, demographic changes had caused school closings and teacher layoffs, so this was not to be.  From 1981 to 1984, there was a three year period where neither of us actually had a job—at least, not a steady, full time job.  I would pick up a few months work here and there in other states, hoping to work enough hours to remain eligible for unemployment benefits. My wife found occasional work substitute teaching and teaching part time at the community college.  Mostly we lived on my unemployment benefits and on our savings.  Both were exhausted by the summer of ’84.  Then I found an 8 month construction job building a nuke in Illinois.   I made some money and salted it away, and that year my wife’s part time job turned into full time work at the college.   But during the entire decade, from ’81 to ’91, I worked only 6 weeks in Iowa, and none of it in Waterloo.  And when I could find work at all, I had to leave the wife and baby at home and work in some other state, sometimes as far away as Montana.  Fortunately, my wife and I went into this period owning our own home and with no debt, and a small amount of savings.
              As houses went unsold and unoccupied for year after year, hundreds were eventually torn down for wood salvage, or so that the owners could stop paying taxes on them, or just for kindling. And some were deliberately torched by the neighbors after they had become derelicts.  
           So how long did this depression last?  It depends who you ask. By some reckoning, it lasted ten years. By mine, it’s still going on.   If you drive down 4th Street today, you will not see a single boarded up store front.  Each one has a paying tenant. The street itself has been beautified with little trees, and most of the buildings have been sandblasted and made beautiful.  The city fathers are proud of this, and they should be.  But one thing you won’t find there is much retail business. Well, actually there are two, a dress shop and an Army surplus store.  Except for restaurants, all the rest are either government agencies, financial institutions of various kinds, or businesses that offer services to other businesses.  The city made several valiant attempts to lure shoppers back down town. But except for forcible abduction, there doesn’t seem to be a way to do this. Yet the office workers need a place to have lunch, so you can find several pleasant places that will sell you a good sandwich and a beer.  And some are open evenings and have a dinner crowd. And the houses that could be had for $10,000 in the 80s, if they weren’t torn down or burned down, are now selling for at least $50,000.
             Deere had record profits this year, and has become the world’s number one implement maker. But the number of workers in the Waterloo bargaining unit is only about 2,400—not 24,000. And the union gave them a two-tier wage contract a few years back. The “old contract” workers were paid about $30.00 per hour, the new hires get about $15.00.  So instead of 24,000 workers earning very good wages, we have 2,400 workers just earning wages. Yet Deere is selling as many tractors as they did in the hay day of ’79.  Part of the reduction in labor is due to automation—and part due to out-sourcing.  But the net result is that Waterloo can now brag that there are now almost enough jobs for all its inhabitants.  But that is only true because so many of us left.  I suspect that most of the émigrés eventually found a new life. But besides losing their jobs and their homes, they also lost ten years of their lives.
            Yet during all the years that 10,000 houses were for sale for about whatever price anyone would offer, there were firms in Minneapolis whose workers were either struggling to get by because of crushing rent costs, or spending four hours on the road every day on a long commute.  So why didn’t one of these companies move part of their operation to Waterloo? They could have just moved key personnel, offering cheap housing as an incentive, and hired the rest locally.  Or they could have leased a large block of houses and sublet them cheaply to their employees, with an option to buy.  This would have solved some of Waterloo’s problem, solved their employees' housing problem, and made them money in the process.  But they probably didn’t even think of it, because few companies give a damn whether their employees have access to affordable housing.