Sparkling writing. Very funny. Ladies and gentlemen, if you’ll suspend your sense of propriety for a moment, permit me to introduce Ndumiso Ngcobo, who raises matters of grave import for the future of science and the environment.
The electricity supply crisis that has South Africa’s economy in a mortal grip has been predicted for years. Though these pessimists had only basic arithmetic, elementary economics and common sense as qualifications, they can today claim vindication. That years of regular blackouts and would be this country’s lot, however, was known both within and without Eskom since at least the mid-1990s. If our central planners had analysed things closely, assuming only moderate economic success post-1994, they could have foreseen this even in the 1980s. Doesn’t “power rationing” sound awfully communist?
In many ways, the crisis caught South Africans completely unprepared. In early January, I wrote a column dismissing low-wattage fluorescent light bulbs as an ineffectual and expensive eco-fetish, and that even if some people prefer them, governments should not force such a choice on consumers by doing something stupid like banning incandescents. That column now appears spectacularly ill-timed. Even if the arguments remain valid (which they do), they’re rather beside the point now. I had not considered a catastrophic failure to meet electricity demand very likely. In short, I was too optimistic about the promises and competence of the government. I was naïvely willing to believe the repeated lies we were told by the Eskom fat cats and government bureaucrats that they had things under control.
The government failed its citizens in the most irresponsible, negligent and incompetent manner possible. Eskom directors got paid millions in “performance” bonuses. The shareholder that employs them — government — seems to think telling the media now and again that there is no crisis constitutes due performance.
The shortage of electricity, even if it turns out to be mild in the long run, has the potential to cause extremely grave consequences for economic growth, job creation, poverty reduction, price inflation, small-business survival, and investor confidence both here and overseas. Everyone except the idiots who caused the crisis says so.
Yet nobody has been fired. Our politicians didn’t even feel it necessary to shift the blame by some token dismissals of powerless and innocent underlings. They seem to think that saying sorry will make everything alright.
I was working on an article listing who should be fired over the power crisis and why, while listening to the energy minister explain why nobody should be fired, when my power gets cut and I’m once again reduced to my mobile. Maybe I should have written about why polar bears don’t deserve endangered species status instead. The greens aren’t quite as efficient as our Princes of Darkness. Sponsorships for a notebook computer, UPS and generator will be gratefully accepted. Meanwhile, watch this space. I’m going to go indulge a sense of humour failure at my local. Sing Tom Waits, perhaps: “Warm beer, and cold women, I just don’t fit in…”
Ever since peer-to-peer music downloading became popular, the music industry has been in a deep crisis. Now comes the denouement.
The kid that started all the trouble was 18, a college dropout named Shawn Fanning. He created a piece of software called Napster, which started a peer-to-peer music downloading craze. Record companies were in a flat spin.
Now, eight years later, the game may finally be up for the record companies.
If you’ve followed this blog, you’ll know one reason why these charts are going through the roof. To quote a Reuters article on Friday:
NEW YORK/LONDON (Reuters) - Gold and platinum soared to historic highs on Friday amid a power crisis that shut South African mines, firm oil prices and expectations of more U.S. rate cuts.
South Africa’s three top gold producers and the world’s biggest platinum miner suspended production at all their mines in the country due to a power crisis. […]
Spot platinum hit a lifetime high of $1,697 an ounce.
“Energy is the lifeblood to keep these mines going. South African production is in terminal decline, notwithstanding the five-year bull run in metals, and these outages can only further accelerate their declining position,” Ross Norman, managing director at TheBullionDesk.com, said.
“We hold with our view that gold will hit a high of $1,250 this year,” he said.
Rising prices for precious metals are great for any economy that produces them. Would have been nice if South Africa were mining country.
Update: Replaced the original charts to include data for today, 28 January, courtesy of the excellent little charting tool at The Bullion Desk.
I have advocated turfing out the government whose national socialism got us into this power crisis. It is a grave crisis, after all, which will probably cost this country most or all of its economic growth, all its capacity for job creation, most of its capacity for heavy industry and manufacturing, all the central bank’s admirable work to keep price inflation low, all the treasury’s admirable work to pay down fiscal deficits, all the investment credentials painstakingly built up in the face of skepticism and fear, and all the growth in small- and medium-sized businesses that would have formed the bedrock of our economic and employment growth. I used to be optimistic about our ability to host the 2010 World Cup, but no longer.
In any sensible democracy, such a disaster would precipitate not only a swath of resignations and firings, all the way to the top, but the collapse of the government and its banishment to the electoral wilderness for years to come. That is what should happen here. The ANC used to have a moral right to rule. It has forfeited that right, by failing both its own constituency and the electorate in general, in the most serious fashion.
I haven’t however, advocated an alternative, and will continue to leave such a decision open for now. I think there is space in South Africa for a new party, one that is committed to free people and free markets, rather than paternalistic and unrealistic “government service delivery”. One that is economically conservative but socially liberal, and represents the true non-racial ideals that define the hopes and dreams of ordinary South Africans.
Last year, after being cleaned out by armed robbers, I found myself in a tight financial situation. I had a lot to replace. So it seemed sensible to forgo the convenience of a laptop, in favour of a more powerful but less expensive desktop. Turns out I underestimated the catastrophic consequences of the government’s economic policies. Turns out I now need a laptop after all, just to maintain my income. My attempt at financial prudence has cost me dearly, and all I have to show for it is a treasured presidential apology.
Companies and individuals — those who can afford it, at least — have in the last few weeks spent fortunes recently on diesel generators, uninterruptible power supplies, solar power or water heating units, low-wattage lights, gas lamps and bottled gas, battery-operated electronic devices and batteries. Larger companies may be able to handle such expenses, but M-Net’s news magazine show Carte Blanche reported on one fellow who manufactures curious metal things for the mining industry, who is more typical of the thousands of small and medium-sized businesses that create most of the growth and employ most of the people in South Africa. He estimates that generating his own power will cost him at least a million rand a month, which his business simply cannot afford. Especially when his customers are shutting down operations. He’ll probably set up shop elsewhere, or go out of business. And he’ll be joining thousands of others, employing many more, who’ll shutter the doors as a result of such costs.
So who gets to carry the can for all these expenses? I’m not big into online petitions, and believe that even if they’re sensibly constructed, they carry little or no weight with policy makers. However, the sentiments expressed in this one are worth considering: have the taxman pay for everything. Just deduct all these unexpected and unbudgeted costs from your taxes with your next tax return. It’s a far simpler solution than having everyone sue Eskom and the government for the costs and lost revenue caused by their lies and incompetence.
When US president George W Bush praises Democratic speaker Nancy Pelosi for her leadership, as he did over the “stimulus package” he proposed, you know something bad just happened. When Pelosi beams broadly, and places emphasis on how the measures are “temporary”, you just know she means, “when the election is over, you’ll be paying for it, you gullible fools”. If there’s anything more distasteful than a misguided but principled partisan proposal, it’s a waffly but expensive bi-partisan cop-out.
I couldn’t do a better job of demolishing the latest fiscal abortion than Kimberley Strassel, in Bush’s Economic Surrender. This editorial doesn’t do a bad job either. Bush has failed his citizens. Bush has failed his economic principles. Bush has failed the GOP candidates. Bush has failed the cause of sane tax policy. No stimulus at all would have been a better option than this ill-disguised redistributionist handout. Arthur Laffer, he of the famous Laffer Curve, follows on with an admirable explanation of how tax works in the real world, unpolluted by deal-making politicians.
So, I take back what I said about Bush. He may still have been the sheriff in DC in 2007, but it’s 2008 now, and he’s shaping up to be a lame duck, alright.
The greedy capitalists are once again going to be on the short end of the stick. The reason? Global warming, of course. Why? Because of hurricanes, as Americans call low-pressure system storms also known, depending on where they occur, as cyclones or typhoons.
As everyone knows, global warming is going to make hurricanes worse, so they’re going to increase the payouts insurance companies have to carry. It will, “generate more storms and more intense hurricanes,” says hurricane historian Jay Barnes of Pine Knoll Shores, North Carolina in paragraph two. Paragraph three continues: “Numerous studies in recent years have found no evidence that the number of hurricanes and their northwest Pacific Ocean cousins, typhoons, is increasing because of the rise in global temperatures.”
Nevermind paragraph three. Let’s try this again.
As everyone knows, global warming is going to cause fewer killer hurricanes, so they’re going to decrease insurance premiums insurance companies will be able to charge. “Using data extending back to the middle nineteenth century,” the story quotes physical oceanographer and climate scientist Chunzai Wang of the NOAA, “we found a gentle decrease in the trend of U.S. land-falling hurricanes when the global ocean is warmed up.”
An explanation I’ve heard before for predicting fewer and lighter storms is that global warming will decrease the temperature gradient between the poles and the equator, which is the engine driving the atmospheric circulation that causes disturbances such as low pressure systems that could turn into cyclonic storms.
Wang’s explanation is different. He attributes the historical data to increased vertical wind-shear caused by an increased temperature gradient between low-altitude and high-altitude air. Which also makes sense, if the presupposition that global warming is a long-term trend is true (which, of course, it probably is not).
So one way or another, there will be either higher payouts or lower premiums. Or lower payouts and higher premiums. Nobody knows. Either way, insurance companies are screwed. Or not. But then, I guess that’s why they call their business “risk management”. Who’d be stupid enough to try to manage risk? Them capitalists have it coming.
Whatever the facts, we must act now, before it’s too late. Must act. Must act now!
Can we really risk the future of mankind when even the scientists have no clue what’s going to happen? No! We must make commitments! We must make sacrifices! We must atone for our sins! We must make election promises! We must soak the rich, to buy the votes of the poor! No, wait, that’s old. We must do more! We must soak the sensible, to buy the votes of people who risk living in hurricane-prone states! In fact, let’s soak everyone, to buy the votes of the soaked! With enough taxes and subsidies and government funds and wealth redistribution, everyone’s a winner!
That’s exactly what half the US presidential candidates campaigning in states such as Florida are proposing to do. They promise to transfer the risk to the US taxpayer. And, would you believe it, that’s the Republican half. Imagine what the Democrats could get up to. The only way they could improve on this populist glad-handing and socialist redistribution is to outlaw hurricanes that make landfall without the proper government authorisation.
That’s how it always ends with eco-politics. No matter what the data says, you can be sure someone, somewhere, is setting up to fleece you.
This isn’t funny. From a local paper:
Prosthetic nose lost at The Zone
An appeal has gone out to the public to look out for a prosthetic nose belonging to a 13-year-old burn victim, after it was lost at a mall in
Rosebank in December, according to the Children of Fire charity [link], The Citizen newspaper recently reported. According to the organization, Dorah Mokoena [link] is the most badly burned girl in the world to survive her ordeal. She lost the nose — especially made to match her colouring and face shape — which is valued at R3 000, while on an outing at the Zone in Rosebank. A volunteer who took Dorah and six other burn victims to the cinema noticed that her nose was missing. A search of the area proved fruitless.
I said, this isn’t funny!
A hat-tip goes to regular reader Rory, not to be confused with Rory Emerald, who once placed a classified advert claiming he’d found a prosthetic nose near Michael Jackson’s Neverland ranch in the Iowa City Press-Citizen, which in turn is not to be confused with The Citizen, a South African newspaper.
So, if you’re nosing about Rosebank any time soon, keep an eye out, would you?
No, seriously, click the links I inserted into the quote above for the full story. Dorah’s story is both tragic and amazing, and what Children of Fire does deserves your support. As do their major sponsors, Pick n Pay, Moyo restaurant, Emirates, Jakaranda 94.2 (which needs to update its sponsor link on the site), Kenya Airways (ditto), Air Tanzania, Virgin Active, and the University of Johannesburg.
Respect.
The American Dream, in essence, says that the limits of a free individual’s ambition are not defined by class or social ambition, but by their own skill, ingenuity, hard work and determination. No matter what your economic condition, you are free to better it by applying your own wits and energy, and no royalty, nobility, government, clergy, community or neighbour can take this right away from you. It does not guarantee everyone instant wealth, nor does it guarantee everyone equal wealth, but it does guarantee that everyone has the same opportunities, and that nobody will have artificial ceilings imposed on what they can achieve in life.
So why is it that people like George Soros, and most recently, Bill Gates, feel obliged to spend their lives as poster-boys for the American Dream, proving the grand successes of liberty, free markets and capitalism, and then when they retire, the proceed to whine bitterly about how unfair their achievement is?
The more this power crisis hits home, the harder I find it to see any silver lining to the huge dark cloud that covers South Africa right now. The golden lining, however, you just can’t miss.
I have always resisted pessimism, because I didn’t think that the socialist tendencies of the government were crisis-level serious. I thought they weren’t particularly good at generating growth, or creating jobs, or reducing poverty, but I didn’t think they were going to plunge the country into darkness and economic disaster.
Nevermind the money spent on gas lights, generators, solar panels, batteries, laptop replacements for PCs, fluorescent or LED replacements for light bulbs. Nevermind the money lost to small shops that don’t have generators, or supermarket that are required to turf out frozen foods if their refrigeration is off for more than three hours. Nevermind the the time lost in traffic chaos. Nevermind the hospitals that can’t keep diagnostic machines and surgeries powered. Nevermind the thousands of people with desktop computers that now must switch to laptops (if they can afford to do so) or be rendered useless for a quarter of their office hours.
Every time one sits and thinks about it, new and grave consequences of half a decade or more of regular blackouts come to mind, and all of this is a drain on the economy.
If you think the people who complain are just over-reacting pessimists, consider this:
South Africa’s gold mines, and mining companies in other sectors, were instructed on Thursday night by electricity utility Eskom to shut their mines, possibly for up to between two to six weeks.
A letter signed by Eskom CEO Jacob Maroga said that key industrial consumers (KPI) had to reduce their power loads to “minimum levels”. He added that Eskom could not guarantee power supply.
Same goes for platinum. One mine estimates expected daily losses of R60 million, or almost 10 000 ounces, every single day. Goodbye mining jobs. Goodbye precious metals exports. Goodbye to one of the main stays of the South African economy.
Already, the gold price is spiking. Already, the currency is sliding. Mining stocks are not the place to be right now. The only upside is for the gold bugs. Are they sitting pretty? South Africa recently lost its top position in global gold production to China. Soon, we’ll be fighting it out in the relegation zone.
Goodbye to our prized Global Competitiveness Index rating. Goodbye to boasting about the highest industrial output, producing the most power, and exporting the most minerals in Africa.
And the government’s response?
As you’ve heard from Minister [Alec] Erwin [of Public Enterprises, which is in charge of Eskom, the monopoly power utility], we are facing an emergency situation. However, we are mindful that this electricity emergency cannot be solved by government alone, but will have to be a collective effort by both ourselves and South Africans in general. Let’s all put our shoulders to the wheel to deal with the situation we find our selves in. […]
During our deliberations in Cabinet, it became obvious that the interventions that will provide us with immediate relief will be on the demand side management and energy efficiency. It goes without saying that we therefore, all need to ensure that energy conservation is a way of life.
So what you’re really saying, is that it cannot be solved by government at all. And yet, it is illegal for South Africans in general to do anything other than use less electricity.
Here’s the best bit:
South Africa’s current shortage of electricity, which the government has now conceded is an emergency, will not affect the 2010 Soccer World Cup, according to the government.
And why, pray tell, should we believe that?
Even if it results in an all-new all-singing all-dancing alternative energy industry (which is what the greens are cheering about), our ability to grow the economy, create jobs, and reduce poverty, already marginal thanks to high regulatory burdens and an interventionist government, will soon be a distant memory.
I am not invested in gold. Boy, was I stupid. I’m going to the pub. Even if the beer is warm.
PS: Photographer Philip Mostert wrote to say that Anglogold Ashanti, which offers the imaged used above for download in its media and marketing library, no longer owns the rights to it. Credit for this excellent photograph is, therefore, entirely due to him.
