Your conclusion that the government must be efficient because the hasty DOGE exercise was a flop is hasty. Maybe DOGE was incompetent and unserious. Was it even trying to achieve efficiency, as opposed to just politicizing the government, which is likely to do the opposite?
A much more plausible hypothesis is that government has a lot of inefficiencies, but they come from democratically passed statutes and slow adoption of tech.
Everyone has experience of transacting with government vs. transacting with private companies, and the latter being far smoother. And the reason is pretty clear: of a private company is a pain to do business with, you walk away and go to its competitors, but you can't do that with the government. It's a monopoly. If you worry about monopoly, you should worry about government.
I agree it's naive to think there's lots of simple waste, fraud and abuse in government, and that a DOGE can find trillions of painless cuts. Rather, government people are locked by law into doing things in inefficient ways, and you don't have the pressure of the profit motive permanently shaping the culture in the direction of efficiency. That's why capitalism is better than socialism.
See Klein and Thompson's *Abundance* for a liberal friendly take on government underperformance.
> Everyone has experience of transacting with government vs. transacting with private companies, and the latter being far smoother
This isn’t true in general. There’s a mix. It’s hard to transact with phone companies or cable companies or insurance companies, or to cancel your gym subscription. It’s easy to go into a shop and buy something. It’s easy to register to vote or send a package at the post office or ride the bus or subway, but it’s hard to deal with the government services that are more like utilities or subscriptions.
The amount of waste and fraud due to incompetence is monumental…and sometimes not accidental.
California paid out $20 billion in fraudulent unemployment claims. Are their control systems and checks that could have greatly reduced this level
of fraud and prevented overseas residents from receiving payments? Of course. Banks use them all the time. Imagine someone in private industry ignored simple protocols in order to fraudulently disburse $20 billion. Would they still have a job? Would there boss still have a job? Would the CEO still have a job? Might there be criminal investigations into the company?
Ultimately it may be that someone decided that wasting $20 billion in taxpayer funds was better than a few people potentially having their unemployment claims delayed. In other words, deliberate theft.
Similarly, the amount of refundable credits the IRS payouts out to individual “tax ID” holders (almost always immigrants ineligible to apply for social security cards) is insane. No private company would let you his level of fraud perpetuate year after year. Their CEO would be long gone. I can only assume the IRS/Treasury wants these people to have the money. There are tax advisors serving the illegal immigrant community who advise claiming your children back in your home country for child tax credits. My Honduran house cleaner and her friends were doing this. Word gets out about these “opportunities”.
Look at Arabella Advisors and many political campaigns. It is very easy to add more checks to credit card donations (address matching, etc). They choose not to implement those standard checks. Anyone think this is an innocent oversight?
Overall I tend to believe the GAOs estimate about the volume of improper payments the treasury, social security, Medicare and Medicaid make rather than the impressions of one employee who has swooped in and worked for a few months.
Fraud really in USA, EU is of course extant but really is not the core problem
Everyone focusing on that is an enormous error. It's the proverbial drunk looking for his keys under a street lamp...
the real huge dead weight loss is not fraud or corrupt waste as waste
It's enormous inefficiencies in mandated process (oft written to attack some minor fraud or waste, and without any sense of Cost / Benefit)
Regulatory streamlining - and modernisation - the real need is efficiency gains, not chasing the mirage of fraud (this is about High Income [and not however ignoring Greece, Italy cases], developing countries where I also work... another matter, although I generally have sense that control less but better, smooth and simplify for more actionable real control, rather than Control Theater)
GAO estimated there were $232 billion in improper payments made in 2023 alone. $100 billion in improper payments to Medicare and Medicaid in 2023, $22 billion in EITC, etc etc
$200 billion a year might just be worth going after.
We are talking about government competence on this thread. An improper payment is a direct failure of government- a crime in my view, stealing from taxpayers.
Underreporting of taxable income is a crime committed by someone else. Much easier to stop your own mistakes than someone else’s. Nobody is arguing the IRS should not investigate tax fraud- they already do this, obviously though not so well.
Of course, I don’t expect cops to catch every criminal. And we probably wouldn’t want to live in the police state that would make a 100 pct solve rate (nor a 0 percent tax fraud rate) possible. An improper payment, though, is like the cops distributing guns to criminals.
I entirely agree: drawing the conclusion US Gov is efficient in and of itself due to DOGE is a non-sequitur. DOGE of course is a complete and utter fiasco, ill-concieved, ill-executed and itself wasteful and inefficient (of this as professionally I have direct exposure to it through sad exposure to the USDFC and an associated and nuked USAID support [green infra], plus some other USG back related items, very investment focus, the DOGE interactions were comically stupid, answering idiotic DEI and Gender Qs about goddamn elec. grid investment studies, etc - There is really nothing touchy feely about existing distribution and transmission grid upgrading/modernisation via improved tech...)
However I think the inefficiencies run wider than the otherwise base hypothesis on "democratically passed statutes and slow adoption of tech"
- fundamentally USG procurment and funding rules are (and I have EU and international comps) insanely counter-productive, archaic and badly badly in need of modernisation and reform. Massively inefficient. I reference as an outside reference Steven Koltai who was in the Bush admin (in fact I knew him personally as I worked on a contract that he had some touch on): his comment on USAID inefficiency is useful https://stevenkoltai.substack.com/p/usaid-and-government-inefficiency - like myself he has a PE/VC background.
While I might not agree with every detail, his overall obsservation summarised in this paragraph is to me spot on
"After my government work, I wanted to understand what was going so wrong. What I learned is that a big part of the explanation (as with most things) was in the details. The vast majority of the actual work of government, whether domestic or foreign, is carried out by contractors, not by government employees themselves. These contracts, totaling trillions of dollars each year, are awarded according to a truly medieval set of regulations known as the Federal Acquisition Regulations or FAR. The FAR runs to over 50 volumes, each written on tissue-paper thin pages, with each volume often running over a thousand pages. There is a different volume for each major Federal agency, except for the Defense Department which merits two volumes. Every other volume says if anything is not spelled out here, “consult the DOD volume” for guidance. When auditing a course at a major DC law school on Federal Contracting and Procurement, our professor began by telling the class, about half of whom were experienced, mid-career procurement practitioners, “the key to success in this course and this subject is to forget everything you ever knew about how contracting, procurement and purchasing work in the private sector.” I quickly realized this was the most important lesson in government contracting. The Government doesn’t work according to the same rules as the private sector."
This ground-up observation from a Tech entrepreneur / VC fellow who both was in State and then tried doing Entrepreneurship programming w USGov rather well aligns with the domestic oriented Klein - Abundance Agenda critiques of USgov hamstringing itself.
Equally Niskanen Center has good commentary delving into how accumulated cruft of now archaic "Paperwork Reduction" act and accumulation of regulation barnacles is paralyses
Regulatory streamliing and modernisation would aligns well with both private sector non-ideological desires in re regulation (in general, incumbants - big Labor Unions and Big Corps however rather actually love it, it's semi-hidden incumbant protection).
Of course Bungled DOGE efforts were just entirely staggerinly ignorant (the need was real enough but as most things Trump, even when he's hit on a real issue, it then is attacked in the most incompetent and stupid way possible).
Quoting additional from Koltai as it is quite relevant to the thread originator re Gov as monopoly (but also Gov as transmitter / enabler of hidden monopoly [or more properly cartels / oligopolies):
“Essentially,” a long-time colleague of mine tat USAID explained, the FAR has become a morass of “barnacles growing on barnacles.” Every member of Congress for decades has inserted what are often very narrowly defined rules designed to favor a specific local industry (or often, one company), so that by the time you could issue a request for proposal, it is so constrained by these requirements as to make the order virtually impossible to fill. The vast majority of these rules come from Congress, not the agencies in question. The agencies just follow the rules. What’s more, many of the largest contractors (aka “beltway bandits) have muscular legal departments whose sole purpose is to contest unsuccessful bids. In the small world in which I operated, this was graphically demonstrated by the private contracting firm, Chemonics. Chemonics has for many years been USAID’s largest contractor. It was almost universally reviled by both USAID staff and local country officials. Yet Chemonics won a preponderance of bids for which it competed. Why? Because Chemonics had a policy of contesting every bid it lost. If you were a typical GS 9-13 level civil servant (making $85,000-$140,000) per year, how much of your time did you want to spend (or could you spend since you had a quota of how many dollars to get out the door each year) going up against a platoon of $250,000+ salaried lawyers, whose law suits required you to retrieve every email and shred of paper documenting every bid that was denied? Hence the secret to Chemonics success – and the failure of so many programs to achieve their stated goals - litigation based on minutiae. Death by a thousand cuts.
To make matters worse, the “role model” of US Government procurement practices in the economic development space were “shared” with organizations in which the US had an outsized voice because of its financial importance like the World Bank, the Inter-American Development Bank and much of the UN system. The barnacle disease spread around the world.
I'd always assumed that laws proliferate in the US because of the proliferation of lawyers hired to get around them. Hence the need for more laws to patch the loopholes they uncover - or might uncover - and so on.
The US has 75% of all the world's lawyers, the number having increased more than fourfold since the 1970s, from 300,000 to 1,350,000.
I agree that government is much more difficult than private enterprise: you have to cover all areas of the economy and society with far fewer resources than the multiple, specialist, private-sector players in each of those areas; government is generally more transparently accountable, with it's top managers and administrators being sacked every 4-8 years; and government can't cherry pick its customers or decide that whole groups of customers can be deprioritized because they don't align with its core competences (well, it shouldn't, but it did in the 90s and noughties and we're living with the consequences of that now).
The the number of Federal employees has remained static since the 1970s at around 2.9 million.
That "number of lawyers" stat is a bit misleading. The number of workers has more than doubled. Also, the complexity of the world and thus the need for lawyers has also increased. This doesn't diminish your argument that the U.S. dominates the world in lawyers but it does weaken the specific claim (increase since 1970).
The total number of employees in the US has only doubled since 1970 (from 78.7 million to 161.3 million) whereas the number of lawyers has more than quadrupled over the same period. The population has increased by two thirds and the economy is now 25 times larger! The growth in government employment has happened at the State and Local level where staff numbers have doubled and increased by 70%, respectively. And the budgets for all three levels of government have increased about 30-fold. So everything has gone up except for the number of Federal employees, which is unchanged. Federal inefficiency, at least in terms of over-staffing or unnecessary jobs, really doesn't seem to be the problem. I think Noah's right that DOGE scapegoated Federal workers to his anti-woke agenda. Musk is taking his chainsaw to a fairly fit and healthy patient.
The US has always been a rather litigious society. I think Tocqueville identified the legal profession as a core part of the American elite (he thought it was a good thing, I'm less convinced despite being a law student myself). One of the great reforms of the Progressives and the New Deal was taking whole areas of public policy (macroeconomic policy, labor regulation, etc) out of the judiciary's scope of authority.
Everything even good things have Diminishing Returns effects
And even Diminishing to Negative Returns.
As like in natural world, where at an approriate level a vitamin like vitamin A is a health positive, but too much and it becomes a poison (just to take the simplistic silly example, but plenty of natural world examples)
At a private company someone is ultimately accountable. There is little or no accountability and little or no urgency in most government bureaucracies. Moreover, it is essentially impossible to fire lower level employees.
Of course there are huge numbers of lazy girl/lazy boy jobs in industries like tech and banking and these unproductive, non-essential and poorly managed types can usually hang around until the next cutback. Ask former Twitter employees. Every private company, though, really depends on an core of hard workers, problem solvers, producers and change agents. Those sorts of people are generally not found in bureaucracies as their frustration level goes through the roof. They either give up and become drones leave for a job where they can have an impact.
Just my opinion based upon small sample sizes of friends and relatives working in government.
>At a private company someone is ultimately accountable. There is little or no accountability and little or no urgency in most government bureaucracies.<
Accountability in the federal government (and many state governments) is hard to achieve, if only because there are so many parts of the government that are working at cross purposes with one another (often on purpose). Top-level bureaucrats are appointed by the executive but are overseen by legislative authorities; in parliamentary societies this is a nonissue, but in presidentialist ones like ours its very easy for gridlock and acrimony to reign (with the public eventually looking for a "Great Man," often a businessman, to slash red tape and "get things done.").
>Moreover, it is essentially impossible to fire lower level employees.<
Working in the federal government =/= working the private sector. The government is basically an insurance company with an army, so efficiency gains are much harder to achieve. Mass layoffs are bound to make things worse, mainly because public-sector workers have different preferences/motives than their private-sector counterparts (which explains why they take the lower pay/high benefits package) and layoffs are likely to tank morale without guaranteeing any improvement (since the government can't just hire a bunch of people all at once, and since many skilled people would rather make more money in the private sector).
Great point. I guess you could say the government is "efficient" in the scope of the idiotic processes and ancient technology it uses. e.g, if you fire ATC employees this will lead to a degradation in service, but that's because because in 2025 we are still using a system where collisions happen because we use a system of humans radioing pilots "do you see that plane" and pilots saying "yeah I see that plane" but meaning a different plane. This could obviously be done accurately and in milliseconds by computer, but that's not how we do it.
The conclusion of DOGE is only that the government is "efficient" in terms of there not being a bunch of lazy idiots doing nothing and collecting a paycheck. But it's insanely inefficient by the fact that it does things in an extremely slow, expensive, and low quality manner, which is what most people think of when they say "inefficient."
The DOGE story misses one important point, the damage done to the science agencies. As an NSF funded scientist, I am concerned that the NSF has lost its Director and nearly all its senior admin, is in the process of reorganizing its science directorates, etc. As I understand it, NSF is currently being run by BigB@ll's 22 yo second cousin, and when it reopens with 1/3rd its former budget, it will only fund Crypto and Quantum Computing related projects.
Dark joking aside, firing the agency admins was always the point. Trump doesn't have the power to impound funds... the only way to drown the baby in the bathtub is just to fire ALL the senior admins and replace them with lackey's who will happily 'arrange deck chairs' with a puny budget (to mix metaphors).
I also know one senior scientist at a national lab who retired early after he got two Elon letters asking for bulleted lists. Now he regrets being retired.
That does seem to be the plan. Check out this post by former DOE Loan Programs Office head Jigar Shah saying that Energy Secretary Wright has to personally approve each and every Inflation Reduction Act direct pay check for solar/battery/efficiency projects.
For solar and battery power, the challenge is making a stable grid without the inertia of big turbines. Inverters do not naturally stabilize frequency, and no one has yet proposed a viable solution to solving that on a large power grid.
On household wealth from housing, the country is at an odd spot. Rising household wealth from higher property values is good in one way, but it is also devastating in that in many areas of the country house prices exceed what is affordable for most Americans. As I live in one of those areas, I think about that and wonder how we can solve the housing shortage without causing a financial crisis from underwater mortgages.
IMO, the inertia problem isn't nearly the show-stopper many people seem to think it is. It's mostly just another b.s. talking point the anti-renewables crowd uses to throw shade on renewables.
First, there are now grid forming inverters that can provide robust synthetic inertia and these are starting to get deployed. Grid following inverters already can provide some frequency response and soon will take over markets for many other ancillary services. Unlike large spinning masses, inverters can respond to changing conditions in milliseconds instead of seconds or minutes. They actually can do a much better job with fine-tuning than those lumbering gas turbines.
Where mechanical inertia is needed, grids can use devices called synchronous condensers to get the job done. These are already widely deployed on grids to keep things stable, so they're nothing new. The inertia challenge can be real on grids with lots of renewables, especially as grid operators get up to speed on how grid dynamics are different with renewables. But solutions are already here. Mostly it's a learning curve thing. Once operators get past the learning curve, they usually find they have better tools than they did before to keep things stable.
Grid forming inverters remain to have issues on all grid interaction - will develop but I would not myself want to be a grid operator relying on such at this time.
Maybe we'll just have to agree to disagree, but I really think you're stuck in the past. What you're describing is how things were five or tens years ago.
Here's a more technical article from Tesla that delves into the current state of the art:
As my literal job is investing in this, at scale, real hard cold capital in the hard assets, I am most assuredly not stuck in the past, rather I am stuck in "currently solid realibility not Tech Co puffery" - which is not in any way to say that 'synthetic' is not a real thing and not going to play large role - however neither is the overall systems interaction mastered.
Unit level is not my comment, system interaction of overall grid (as Texas found out and unexpected cascade of responses of multiple algos suddenly reacting [ETA clarifying -in unexpected interactions which individual instal level was not the issue but system wide interaction] to a wide instablity)
(the video is interesting enough but not news to me, this is my sector although Cammiscera has certain specific views altough I don't disagre overall)
Is your disagreement with him mostly on timeline and on the current state of tech/grid best practices, or do you disagree with his overall world view on this and where we're likely heading?
In particular, what do you think of his claim at 29:04 in the video that "renewables are becoming the backbone of any generation system of a modern country."
I know he's talking his book somewhat here, but otoh I believe he is directionally correct. Of course, reasonable people can argue what the exact timeline will look like.
As I said, my literal actual job is financing RE. Not silly rooftops for houses, industrial. I am more or less in the same business except on financing not ops. I finance his stuff [ETA: not him literally to clarify but generally].
His estimations on certain things are overly optimistic (example where challenge re storage [one cycle convo]). But he's a developer, that's going to be his nature, to push for it.
Whether RE becomes the backbone of modern country generation systems is dependant on the country BUT are RE the future on a price basis and will any modernising country with sense seek to build the grid system and installations that are a logical RE / decarbonised mix (as in e.g. their nuclear disc.) Yes.
I would not be working on hundreds of millions for this (RE investment, industrial again not silly crunchy granola houses feel-goodery) if that were not the case, my job however is to place this in a risk managed fashion. We have an eye on the dollars and cents.
For this reason during Biden Admin I was climbing the walls about how wrong-headed their priorities were as
A. not clearly believing deep down in the market price beating potential of RE
B. more concerned (segments of Biden Admin, the Lefty Prog greenies) with strangling hydrocarbons than taking the enabling route to accelerate RE (and non-hydrocarbon based). Showed deep down they don't actually believe - stuck in 1970s logic. (oddly rather like the righty opponents... it's painful. I am most certainly not "backwards' looking, however when one is doing utility / industrial scale installation (for profit and long-term asset financing, not short flipping) one has quite the risk-adjusted view and a prudence on the technology interactions, as besides the known-unknows, there are the unknown-unknows to bite you.
C. Grid grid grid grid grid grid.... for God's sake Grid. US grid is a godddamn archaic backwards mess, it's a 1960s relic. And Biden Admin rather than focusing on accelerating real upgrade of that
(as I have a cousin in a E. Coast power major whose job is also in this area, he was near panic on some ideas as nothing actually was being genuinely planned and pushed on the required transmision and distribution upgrades, expansions, this before AI started to help drive more - electrification of industrial processes, of household heating etc is major strategic investment - long term efficiencies are clear but needs urgent up front focus as hard intra takes time. and God in US does it take excessive ridiculous time.)
US needs to fucking get in gear on grid modernisation (and KLein & Co. are spot on about the reform need or this will cost 100x what it need and take 10x the time)
The Cleaning Up podcast had a long discussion about this with the CEO of one of the world's largest independent power producers. Lots of good information throughout the podcast, but here's the key part:
I was going to bring up the same point about solar/battery and the increasing need for conventional plants to provide frequency and regulation services.
The other issue is that we are nowhere close on the battery front. All of these high renewable penetration studies make ridiculous assumptions about the ability for us to scale batteries.
What do you think the delta is between the need and the ability?
The interview below is with a BESS expert from Modo energy in the UK. It covers battery deployment goals versus reality in the UK specifically, but the issues and challenges are similar around the world.
The Modo guy thinks the UK's 2030 goal of 22-27 gigs of battery storage is too optimistic, but his guess is they end up with somewhere in the high teens or low 20s. So not really that big of a delta in the grand scheme of things. BTW, this is from a company that makes its living selling estimates on where this stuff will be in the future, so their credibility is on the line with each published prediction.
I have several relatives and a number of friends who work for the government in DC, and I could have told Elon that they are serious people who work hard, but I don't think he would have believed me. After all I'm a woman, and not a single DOGE agency invader was a woman.
I'm a fed (and a woman) and totally agree with you about our ranks working hard and wanting to make an impact. One weird thing about DOGE to point out, though, is that their acting administrator is a woman--Amy Gleason. It's not clear how much she agrees with Elon and *his* mission, though.
“The “One Big Beautiful Bill Act” Eliminates the Office of Financial Research—Threatening the Stability of the Treasury Market”
Nathan Tankus writes that the Trump Administration is eliminating a small office gathering information on the sale of treasuries that can help detect instability in that in very important market.
An excellent piece. So scary that Trump et al are busy removing parts from a machine they don't understand (and have little interest in understanding).
Re: Importance of batteries for smoothing out peak demand
I loved that Brian Potter post on how batteries plus solar are game changers for keeping the cost of the energy transition down. One thing he didn't mention is that batteries can enable huge cost savings on the distribution/delivery side of the cost equation as well. Batteries and other new peak shaving technologies like VPPs aren't just about saving costs on the generation side.
On many grids, distribution costs are actually higher per kwh than generation costs. For reliability, distribution infrastructure has to be built to handle once in a decade peak loads. Most of that capacity is unneeded most of the time. Distribution grids typically run at a 30% average utilization rate.
Deployment of batteries, either behind the meter, or near choked distribution assets could significantly increase this avg. utilization rate. Couple this with better demand side load management for things like EV charging and other large loads and it's very likely we could double utilization rates on current distribution grids. That would result in halving he per kwh distribution charge.
The vast majority of the distribution cost is the wires, transformers, and telephone poles/underground piping. All that remains even if batteries are very close for exceptional peak usage.
What you could save on a bit is transmission line capacity. That would no longer need to be able to deliver exceptional peak power.
With the increase in demand as we go all electric, this could delay where we need to upgrade some transmission lines.
Sure, but if batteries and other peak shaving tech let distribution utilities push twice as much energy through the same infrastructure, it will literally cut the per kwh delivered cost in half. EVs alone could drive a lot of this as long as end users have the right incentives (and tech) for time shifting flexible load.
Here's a real world example from Texas (this deal is driven mostly by wind overcapacity, but they're covering distribution costs since there's guaranteed excess capacity during the window when charging is free:
In relation to solar using batteries and local gas generation is fine for short periods hours to maybe a day or so. However in Eu a recognised issue is ‘dunkelflaute’ where high pressure system for a few weeks is combined with a lack of sun, so that levels of pv and wind generation are very low over large area ie multiple countries. This means that interconnectors are only useful for transfer of fossil or nuclear powered electricity, which are likely already required for local use.
So the situation as you get to very high levels of renewables the issue of dunkelflaute will be a problem - it means a near complete lack of electricity for society for several weeks, which would be intolerable.
In reality the solution long term would be to produce and store hydrogen and then burn this in generators to produce power. These could. Be colocated with renewables where suitable grid connections already available and where they could also be used for grid stability.
Pending availability of hydrogen LNG generation could be used initially and later hydrogen could be burnt instead.
Batteries would be uneconomic and impractical as an alternative as they could not be recharged during dunkelflaute.
Having LNG/H2 generation installed for dunkelflaute may also reduce need for larger batteries as such generation would
This doesn't become a huge challenge until renewable generation gets higher than 80-90%. Up to that point, peakers that grids already have can be redeployed to handle this new scenario. Going from 90% renewables to 100% does require some new tech, but we won't hit that wall for a decade or two in most places. By then hopefully we'll have geothermal, cheaper nuclear, or some other new tech to help with that last 10%.
The post Noah linked alluded to this, but batteries are a key here. They not only help with demand peaks, they also can absorb excess generation at a nice steady rate over longer periods of time during a dunkelflaute. This means a relatively small number of peaker plants can run steady 24/7 to satisfy grid load and to keep batteries charged for when peak demand hits. Things like flexible demand will also help smooth out the loads so we can get the most out of the "peakers" that'll actually be running 24/7 for days at a time. Obviously having some steady generation like nuclear in the mix helps a lot, but really, it's the low capacity factor peakers that'll do most of the heavy lifting, at least for now.
Anti-renewables folks talk about the cost of needing all these extra peakers standing by just to handle a couple of brief dunkelflaute periods, but that's not that different from today. Most grids have several peakers in the fleet that run at single digit capacity factors (eg they run less than 10% of the time). They run for 2-3 hours a day on maybe 80-100 days a year. The economics of this works out ok because most of the cost of these plants is fuel cost. On top of this, our existing CC gas fleet has an average utilization of 52%, so there's lots of extra capacity there as long as peaks can be managed. They have somewhat higher non-fuel opex than peakers, but could probably run profitably at 10-30% capacity (the plants are already built so it's just an opex question).
On a grid with mostly renewables, instead of a couple hours a day on 80-100 days, these plants will run 24/7 for a few days for maybe a total of 20-30 days a year. So likely the same capacity factor as today, just a totally different run profile. As new plants get built, they'll be a lot cleaner and more efficient because they won't need the fast-start-short-run capability that today's peaker plants require. In the future, we'll likely be able to schedule runtime hours or even days in advance the plants will have much longer run times. This means plant designs can be optimized and we'll see more gas instead of diesel that's cleaner and more efficient.
Easiest point to clear up initially is on Hydrogen.
I think at this stage the concept of generating and distributing hydrogen using modifications to existing gas networks to provide domestic and industrial/commercial heating has been completely dismissed in Michael Liebrich’s excellent series of ‘Cleaning Up ‘podcasts and his concept of the ‘Hydrogen ladder’ which indicates where Hydrogen use is most suitable.
As a rule of thumb it takes more than three times the input energy to generate 1 unit of output energy, so whilst the input energy (Wind/Solar) may be free, the capital cost of the electrolysis plant and the generators themselves are high because they have to be sized to deal with three times the quantity of output energy actually required.
The point made about using batteries and existing peakers is sound for periods outside ‘dunkel flaute’ – but the nature of ‘dunkelflaute’ is that there is NO Wind or Solar Generation for several weeks – the amount of existing peakers would be wholly inadequate for such extended periods as you would have to cover 100% of the load for 100% of the time from existing fossil/nuclear generation.
This is the kernel of the problem – you must have enough alternative generation and storage to cover this period with active generation. The amount of generation needed will depend on how high the load is and how long in weeks ‘dunkelflaute’ lasts. You might reduce load somewhat by banning EV charging during this period and only allowing people to use what is already stored in their batteries. Similarly DataCentres would have to only run on stored energy or more feasibly just have mirror sites outside ‘dunkelflaute ‘ areas deal with the data during this period.
For domestic heating form electricity, it would have to be minimised, so need to rely on good house insulation.
Services and Industry up to the level which had been planned to be covered from Active generation using stored fuel could still operate, but the higher the load allowed for and the longer the period, the greater the cost of the generation required.
To a certain extent it would also be possible to grossly oversize renewable generation so that at low levels of wind and solar it could still contribute something, but this is likely to be minimal and uneconomic, although probably feasible to some extent on offshore wind where increases in blade size can increase generation disproportionally. As an illustration. I remember being at a lecture about the Faeroe islands trying to go 100% renewable as funding available from Denmark and they found that 95% was feasible, but to cover the remaining 5% would require a duplication of all the plant installed for the 95%, so instead they just opted for fossil fuel generation to cover the remaining 5%.
The existing ‘peaker’ or indeed traditional generation plant already installed is unlikely to meet more than a fraction of the load in the next 10 years as what is happening is that EXISTING energy usage from fossil fuels for heating and Transportation, is being replaced by renewables, and new generation is coming from new Solar and Wind installations. Existing traditional generation is being retired and little extra plant is being built. So there is no uncertainty as to the requirements for electrical demand in future as it is not dictated by new loads (except Datacentres) but instead by the electrification of existing power usage. Additionally, the existing demand for electricity is increasing by a multiple of 2-3 times the existing demand, so that any existing fossil generation will be wholly inadequate for the future.
Dealing with temporary mismatches between renewable generation and load demand is relatively straightforward in comparison – shift load, use batteries etc and the shorter the period to be covered the easier and cheaper it is.
Pumped Storage was traditionally only used to deal with frequency control cause by near instantaneous mismatches on power grid, and is excellent for this, but only actually stores small
amounts of MWh although it’s rate of out put can be very high in terms of MW, so has no impact on ‘dunkelflaute’ issues.
A Brief Climatology of Dunkelflaute Events over and Surrounding the North and Baltic Sea Areas
So the essence of the issue is what does society do in a region, where, because of the ‘dunkelflaute’ effect there is NO electricity available from renewables in these countries, neither wind nor solar, for several weeks, and it is not physically or economically possible to build batteries to cover this period?
Minimising ‘dunlkelflaute’ within a region is possible through much reinforced network interconnection so that if a country itself has ‘dunkelfalute’ it can import from bordering countries, and this would minimise the effects of less extensive ‘dunkelflaute’ events, but when the dunkelflaute’ occurs over a larger area them this is no longer a solution e.g. the area examined for ‘dunkelflaute’ in the paper cited above.
Importing electricity from outside these countries from areas where ‘dunlkelflaute’ occurs is feasible if sufficient generation to cover the missing renewable generation is available, and if the interconnected network is suitable for carrying such high levels of power.
So in theory HV DC cables from Morocco etc could be brought by sea to parts of Europe to help mitigate ‘dunkelflaute’ and also to provide cheaper generation. However it would not be wise to rely entirely on such solutions as deliberate disruption of the cable by (say) a submarine, would be an unacceptable risk.
Also, in cases where ‘dunkelflaute’ occurs it can also be taken that nations will look after their own needs first, so relying on imported electricity when insufficiency generation plant in home country is also risky.
Recognising ‘dunkelflaute’ as an issue means that :
(a) Much greater and more robust interconnection between countries is required
(b) Long distance UHV and HVDC interconnection from outside the region is worth serious consideration
(c) Greater use of nuclear as a backup is also a requirement
(d) Low cost generators using stored fuel (such as LNG/H2) sited at locations with strong grid connections can also help mitigate ‘Dunkelflaute’.
In relation to (d) it must be accepted that burning fossil fuel for short periods at long intervals is a ‘quid pro quo’ for using renewables for very long periods near continuously.
In cases where philosophically it is unacceptable to burn any fossil fuel for any reason, then Hydrogen generated and stored from surplus renewables could be used. As such generation will require to be burnt in a generator, it might be a good policy to provide initial cover using LNG generators which can be converted to Hydrogen in the longer term, sited at renewable generator sites which already have strong grid connections.
This would also have the short term benefits of stabilising the power system and mitigating any mismatches between demand and generation in the interim, and also avoid the impossible task of trying to install huge amounts of active generation in a short period at a later date.
The laws of thermodynamics don’t say hydrogen won’t work. They just say you need lots of spare energy at some points in time to produce moderate amounts of hydrogen for use at other times.
As was pointed out, hydrogen is an energy storage and distribution technology, not an emergency distribution technology. And I know you're exaggerating to make a point, but I doubt that synthesizing hydrogen is as energy inefficient as feeding animals to use their muscle power. (The pre-industrial world actually was stuck using animals, although they used horses, cattle, and humans instead of hamsters.) Storing electricity in batteries instead of making hydrogen from water (or methane from water + carbon dioxide) is significantly more efficient in terms of energy lost, but batteries have a much worse energy density per unit weight and per unit volume than combustible gases, so it's a matter of tradeoffs - it's probably better to run jet airplane engines on hydrogen or methane than batteries, and methane in particular has a lot of already existing infrastructure dedicated to storing, distributing, and using it.
Whether or not using solar energy to make hydrogen or methane will make financial sense depends a lot on both future technology (how much the cost of solar energy drops, how good future batteries are, how close to the thermodynamic limit we can get combustible gas synthesis, etc.) and government incentives. For example, if, in 2070, the law requred that *all* energy generation and use were required be carbon neutral, synthetic gas would presumably be used a lot more than it is today. I don't have anything more than vague guesses as to what the cost curves for the various ways to generate and store energy are going to look like in twenty to fifty years, and unless you're an engineer or scientist in a relevant field, I don't think you have the relevant numbers to make more than make a vague, hand-wavy guess either. (Can you tell me what percent efficiency you would need to make it financially viable? It's obviously not 100%...)
Being at 60% renewables without any heavy inertia is the Spain/Portugal issue. At present they have nothing that will make up for a 1GW physical spinning turbine.
They also find that as renewables get over 30% the cost of power from the backup generators skyrockets. So ratepayers see increasing bills.
Hydrogen .... EU/German obsession with hydrogen is so many levels of wrong from A to Z it'se hard to understand how they sold themselves on this. On other hand they sold themselves on Desertec for the longest time...
Hydrogen is not a path, cost, metal embrittalement, fundamental physics make it just utterly completely dumb.
I understand your point and I'm happy that DOGE didn't uncover anything too crazy, but just because they didn't uncover fraud and abuse doesn't mean that the government is efficient or a good use/steward of taxpayer money. Providing government services efficiently will require legal reform. If the IRS already knows what I owe them, then why not just bill me? Why is it so hard to get a permit to do anything or open a business? Where is my ID and app for accessing government services? Etc. There's significant room for improving government efficiency at all levels, but that will require legal reform and is much harder to do. I'm happy we didn't see large scale corruption and fraud though. Thanks for making the case.
> If the IRS already knows what I owe them, then why not just bill me?
Because Intuit and Quicken lobby the government to ban this sort of action by the IRS. They don’t even allow IRS forms to automatically do addition for you.
> Why is it so hard to get a permit to do anything or open a business?
This is a local government issue that varies a lot from place to place. We need to get localities to streamline their laws. Some are making progress on this front but others are not.
> Where is my ID and app for accessing government services?
Privacy advocates get upset anyone proposes a national ID, so we are stuck using social security numbers and passports. Login.gov has improved things somewhat but is still clunky.
The large, chronic goods trade deficits that have hollowed U.S. manufacturing are the result of "the reserve currency curse." We made the USD the world reserve currency and then we made it so that the only way that the rest of the world can get net USD is to sell us stuff and not buying anything in return. The Fed should supply the world with USD directly by buying foreign assets. Swap lines are one way to do this.
The banking system is supposed to handle this, but it started to need more actual USD. We have run >$30T ($2024) in goods trade deficits since 1980 and the trade-weighted foreign exchange value of the USD is 3.5X higher than it was in 1980.
You are correct that it's been negative for awhile and has also been getting worse.
While unlikely to make it positive, there's a lot of games large corporations pull to move their profits to countries like Ireland. And it can get weird allocation services bought in the U.S. but used where?
why not rebrand from anti-ice protests to "kill bill" protests. there is ice funding in the bill and some well placed posters picked up in media coverage would do the trick. (thank elon and tick off trump as a bonus).
Great stuff as usual, Noah. I also liked Brian Potter’s solar article. One really important thing he acknowledged not analyzing was the transmission network. Making our electricity grid more robust & efficient would further improve the solar/ battery value proposition. It’s hard to overstate how fragmented our grid still is, despite several solid years of upgrades over the past decade or so. It’s still much closer to highways in 1949 than today’s internet - and no one is arguing that making the information network even more robust is a bad investment. Like batteries, a robust, national electric grid increases the value of every generation resource connected to it.
On Solar Power & Renewable Energy (RE) [& Decarbonised Energy (DE)]
First, by context, my actual job is the financing of industrial RE, at scale, like hundreds of millions $$.
The information there is decent enough however... erroneous in part in its framing (although at end it is noted that the analysis is simplified as it is ignoring Transmission and Distribution [aka, The Grid])
This is fundamentally off-base for Solar or RE generally as both Texan and Iberian issues have shown as the problem of RE is not merely intermittancy, it is also Frequency Services - grids are dynamic mechanisms and Frequency services which are critical to grid stability (and avoidance of collapse, see Iberian blackout where current best hypothesis is some kind of cascade error in frequency regulation engendered perhaps by system faults similar to what happened in Texas a few years ago - where solar connection moderators (computer controlled, emulating 'self-frequency' regulation that hard physical turbines naturally provide) interacted in unexpected ways and cascaded shut-downs.
So simplistically looking at Solar and Battery in that lens is quite wrong and dangerous - dangerous because massively more attention needs to be paid to the critical issue of GRID UPGRADE. Otherwise RE can quickly can become stability problematic. It is as well better to have it Solar, Wind Hydro, & some non-intermittant Base and Frequency Regulation/Service (nuclear for full gen level decarbonisation, bonjour la France)
None of this is to give credence to the foolish Reactionary Right attacks on RE, on solar - onshore wind, utility scale or industrial scale solar PV is cost-beating hands down and with Grid upgrades (needed anyway to address the AI explosion) are unbeatable, notably if the US finally starts to create a genuine unified grid (the US has such a bizarre hodge-podge that even on regional level it's not really optimum efficient - whereas a genuine integrated continental grid allowing power wheeling trans-continentally would open huge potential economies of scale.
But absolutely 100% more attention is needed to Grid Infra upgrading ASAP as hard infra is - even in places where you can build efficiently (Hello -Not USA) time consuming.
Solar cell and battery price/efficiency are leveling off. Will we see a big improvement someday? Probably. Will we see it soon? Unlikely.
Which means being even 70% solar & wind is incredibly expensive, takes up a ton of and will require HVAC (or HVDC) lines crisscrossing the country to a much greater extent than now.
There’s a reason Denmark, Sweden, etc. are returning to nuclear and even Germany is considering it. Pretty much the only entities still going for all/mostly renewables are Australia and blue states in the U.S.
Solar + Batteries is a wonderful fantasy. I wish it could work. But it’s just a fantasy. And anyone who goes down that road is going to deliver power that is expensive, unreliable, and still emitting CO2 from the gas backup.
I would not say Solar plus Batteries is a fantasy - pure solar and battery strategy yes, but not in itself (but then all the purist single solution approaches on energy tend to be fantastical).
Of course indeed yes, nuclear return is fundamental.
I agree. Solar + batteries is great as part of the summer peak power solution. And to the extent that middle of the day pulls more power than middle of the night, again great.
Preventing China shock 2.0 makes a ton of sense and seems more aligned with what is good for tech, health tech, and high-skill employers in general. It seems like something both sides of the aisle should theoretically be able to support….
Your conclusion that the government must be efficient because the hasty DOGE exercise was a flop is hasty. Maybe DOGE was incompetent and unserious. Was it even trying to achieve efficiency, as opposed to just politicizing the government, which is likely to do the opposite?
A much more plausible hypothesis is that government has a lot of inefficiencies, but they come from democratically passed statutes and slow adoption of tech.
Everyone has experience of transacting with government vs. transacting with private companies, and the latter being far smoother. And the reason is pretty clear: of a private company is a pain to do business with, you walk away and go to its competitors, but you can't do that with the government. It's a monopoly. If you worry about monopoly, you should worry about government.
I agree it's naive to think there's lots of simple waste, fraud and abuse in government, and that a DOGE can find trillions of painless cuts. Rather, government people are locked by law into doing things in inefficient ways, and you don't have the pressure of the profit motive permanently shaping the culture in the direction of efficiency. That's why capitalism is better than socialism.
See Klein and Thompson's *Abundance* for a liberal friendly take on government underperformance.
> Everyone has experience of transacting with government vs. transacting with private companies, and the latter being far smoother
This isn’t true in general. There’s a mix. It’s hard to transact with phone companies or cable companies or insurance companies, or to cancel your gym subscription. It’s easy to go into a shop and buy something. It’s easy to register to vote or send a package at the post office or ride the bus or subway, but it’s hard to deal with the government services that are more like utilities or subscriptions.
I agree. I think a serious look at government efficiency would have looked more at regulation and rent seeking activities than at waste or fraud.
The amount of waste and fraud due to incompetence is monumental…and sometimes not accidental.
California paid out $20 billion in fraudulent unemployment claims. Are their control systems and checks that could have greatly reduced this level
of fraud and prevented overseas residents from receiving payments? Of course. Banks use them all the time. Imagine someone in private industry ignored simple protocols in order to fraudulently disburse $20 billion. Would they still have a job? Would there boss still have a job? Would the CEO still have a job? Might there be criminal investigations into the company?
Ultimately it may be that someone decided that wasting $20 billion in taxpayer funds was better than a few people potentially having their unemployment claims delayed. In other words, deliberate theft.
Similarly, the amount of refundable credits the IRS payouts out to individual “tax ID” holders (almost always immigrants ineligible to apply for social security cards) is insane. No private company would let you his level of fraud perpetuate year after year. Their CEO would be long gone. I can only assume the IRS/Treasury wants these people to have the money. There are tax advisors serving the illegal immigrant community who advise claiming your children back in your home country for child tax credits. My Honduran house cleaner and her friends were doing this. Word gets out about these “opportunities”.
Look at Arabella Advisors and many political campaigns. It is very easy to add more checks to credit card donations (address matching, etc). They choose not to implement those standard checks. Anyone think this is an innocent oversight?
Overall I tend to believe the GAOs estimate about the volume of improper payments the treasury, social security, Medicare and Medicaid make rather than the impressions of one employee who has swooped in and worked for a few months.
Eh...
Fraud really in USA, EU is of course extant but really is not the core problem
Everyone focusing on that is an enormous error. It's the proverbial drunk looking for his keys under a street lamp...
the real huge dead weight loss is not fraud or corrupt waste as waste
It's enormous inefficiencies in mandated process (oft written to attack some minor fraud or waste, and without any sense of Cost / Benefit)
Regulatory streamlining - and modernisation - the real need is efficiency gains, not chasing the mirage of fraud (this is about High Income [and not however ignoring Greece, Italy cases], developing countries where I also work... another matter, although I generally have sense that control less but better, smooth and simplify for more actionable real control, rather than Control Theater)
Way more fraud in people underpaying their taxes owed than what you are talking about.
GAO estimated there were $232 billion in improper payments made in 2023 alone. $100 billion in improper payments to Medicare and Medicaid in 2023, $22 billion in EITC, etc etc
$200 billion a year might just be worth going after.
Agreed. And uncollected taxes due are far more significant (and should also be pursued,) which was my point/observation.
We are talking about government competence on this thread. An improper payment is a direct failure of government- a crime in my view, stealing from taxpayers.
Underreporting of taxable income is a crime committed by someone else. Much easier to stop your own mistakes than someone else’s. Nobody is arguing the IRS should not investigate tax fraud- they already do this, obviously though not so well.
Of course, I don’t expect cops to catch every criminal. And we probably wouldn’t want to live in the police state that would make a 100 pct solve rate (nor a 0 percent tax fraud rate) possible. An improper payment, though, is like the cops distributing guns to criminals.
I entirely agree: drawing the conclusion US Gov is efficient in and of itself due to DOGE is a non-sequitur. DOGE of course is a complete and utter fiasco, ill-concieved, ill-executed and itself wasteful and inefficient (of this as professionally I have direct exposure to it through sad exposure to the USDFC and an associated and nuked USAID support [green infra], plus some other USG back related items, very investment focus, the DOGE interactions were comically stupid, answering idiotic DEI and Gender Qs about goddamn elec. grid investment studies, etc - There is really nothing touchy feely about existing distribution and transmission grid upgrading/modernisation via improved tech...)
However I think the inefficiencies run wider than the otherwise base hypothesis on "democratically passed statutes and slow adoption of tech"
- fundamentally USG procurment and funding rules are (and I have EU and international comps) insanely counter-productive, archaic and badly badly in need of modernisation and reform. Massively inefficient. I reference as an outside reference Steven Koltai who was in the Bush admin (in fact I knew him personally as I worked on a contract that he had some touch on): his comment on USAID inefficiency is useful https://stevenkoltai.substack.com/p/usaid-and-government-inefficiency - like myself he has a PE/VC background.
While I might not agree with every detail, his overall obsservation summarised in this paragraph is to me spot on
"After my government work, I wanted to understand what was going so wrong. What I learned is that a big part of the explanation (as with most things) was in the details. The vast majority of the actual work of government, whether domestic or foreign, is carried out by contractors, not by government employees themselves. These contracts, totaling trillions of dollars each year, are awarded according to a truly medieval set of regulations known as the Federal Acquisition Regulations or FAR. The FAR runs to over 50 volumes, each written on tissue-paper thin pages, with each volume often running over a thousand pages. There is a different volume for each major Federal agency, except for the Defense Department which merits two volumes. Every other volume says if anything is not spelled out here, “consult the DOD volume” for guidance. When auditing a course at a major DC law school on Federal Contracting and Procurement, our professor began by telling the class, about half of whom were experienced, mid-career procurement practitioners, “the key to success in this course and this subject is to forget everything you ever knew about how contracting, procurement and purchasing work in the private sector.” I quickly realized this was the most important lesson in government contracting. The Government doesn’t work according to the same rules as the private sector."
This ground-up observation from a Tech entrepreneur / VC fellow who both was in State and then tried doing Entrepreneurship programming w USGov rather well aligns with the domestic oriented Klein - Abundance Agenda critiques of USgov hamstringing itself.
Equally Niskanen Center has good commentary delving into how accumulated cruft of now archaic "Paperwork Reduction" act and accumulation of regulation barnacles is paralyses
Regulatory streamliing and modernisation would aligns well with both private sector non-ideological desires in re regulation (in general, incumbants - big Labor Unions and Big Corps however rather actually love it, it's semi-hidden incumbant protection).
Of course Bungled DOGE efforts were just entirely staggerinly ignorant (the need was real enough but as most things Trump, even when he's hit on a real issue, it then is attacked in the most incompetent and stupid way possible).
Quoting additional from Koltai as it is quite relevant to the thread originator re Gov as monopoly (but also Gov as transmitter / enabler of hidden monopoly [or more properly cartels / oligopolies):
“Essentially,” a long-time colleague of mine tat USAID explained, the FAR has become a morass of “barnacles growing on barnacles.” Every member of Congress for decades has inserted what are often very narrowly defined rules designed to favor a specific local industry (or often, one company), so that by the time you could issue a request for proposal, it is so constrained by these requirements as to make the order virtually impossible to fill. The vast majority of these rules come from Congress, not the agencies in question. The agencies just follow the rules. What’s more, many of the largest contractors (aka “beltway bandits) have muscular legal departments whose sole purpose is to contest unsuccessful bids. In the small world in which I operated, this was graphically demonstrated by the private contracting firm, Chemonics. Chemonics has for many years been USAID’s largest contractor. It was almost universally reviled by both USAID staff and local country officials. Yet Chemonics won a preponderance of bids for which it competed. Why? Because Chemonics had a policy of contesting every bid it lost. If you were a typical GS 9-13 level civil servant (making $85,000-$140,000) per year, how much of your time did you want to spend (or could you spend since you had a quota of how many dollars to get out the door each year) going up against a platoon of $250,000+ salaried lawyers, whose law suits required you to retrieve every email and shred of paper documenting every bid that was denied? Hence the secret to Chemonics success – and the failure of so many programs to achieve their stated goals - litigation based on minutiae. Death by a thousand cuts.
To make matters worse, the “role model” of US Government procurement practices in the economic development space were “shared” with organizations in which the US had an outsized voice because of its financial importance like the World Bank, the Inter-American Development Bank and much of the UN system. The barnacle disease spread around the world.
I'd always assumed that laws proliferate in the US because of the proliferation of lawyers hired to get around them. Hence the need for more laws to patch the loopholes they uncover - or might uncover - and so on.
The US has 75% of all the world's lawyers, the number having increased more than fourfold since the 1970s, from 300,000 to 1,350,000.
I agree that government is much more difficult than private enterprise: you have to cover all areas of the economy and society with far fewer resources than the multiple, specialist, private-sector players in each of those areas; government is generally more transparently accountable, with it's top managers and administrators being sacked every 4-8 years; and government can't cherry pick its customers or decide that whole groups of customers can be deprioritized because they don't align with its core competences (well, it shouldn't, but it did in the 90s and noughties and we're living with the consequences of that now).
The the number of Federal employees has remained static since the 1970s at around 2.9 million.
That "number of lawyers" stat is a bit misleading. The number of workers has more than doubled. Also, the complexity of the world and thus the need for lawyers has also increased. This doesn't diminish your argument that the U.S. dominates the world in lawyers but it does weaken the specific claim (increase since 1970).
The total number of employees in the US has only doubled since 1970 (from 78.7 million to 161.3 million) whereas the number of lawyers has more than quadrupled over the same period. The population has increased by two thirds and the economy is now 25 times larger! The growth in government employment has happened at the State and Local level where staff numbers have doubled and increased by 70%, respectively. And the budgets for all three levels of government have increased about 30-fold. So everything has gone up except for the number of Federal employees, which is unchanged. Federal inefficiency, at least in terms of over-staffing or unnecessary jobs, really doesn't seem to be the problem. I think Noah's right that DOGE scapegoated Federal workers to his anti-woke agenda. Musk is taking his chainsaw to a fairly fit and healthy patient.
The US has always been a rather litigious society. I think Tocqueville identified the legal profession as a core part of the American elite (he thought it was a good thing, I'm less convinced despite being a law student myself). One of the great reforms of the Progressives and the New Deal was taking whole areas of public policy (macroeconomic policy, labor regulation, etc) out of the judiciary's scope of authority.
Everything even good things have Diminishing Returns effects
And even Diminishing to Negative Returns.
As like in natural world, where at an approriate level a vitamin like vitamin A is a health positive, but too much and it becomes a poison (just to take the simplistic silly example, but plenty of natural world examples)
At a private company someone is ultimately accountable. There is little or no accountability and little or no urgency in most government bureaucracies. Moreover, it is essentially impossible to fire lower level employees.
Of course there are huge numbers of lazy girl/lazy boy jobs in industries like tech and banking and these unproductive, non-essential and poorly managed types can usually hang around until the next cutback. Ask former Twitter employees. Every private company, though, really depends on an core of hard workers, problem solvers, producers and change agents. Those sorts of people are generally not found in bureaucracies as their frustration level goes through the roof. They either give up and become drones leave for a job where they can have an impact.
Just my opinion based upon small sample sizes of friends and relatives working in government.
>At a private company someone is ultimately accountable. There is little or no accountability and little or no urgency in most government bureaucracies.<
Accountability in the federal government (and many state governments) is hard to achieve, if only because there are so many parts of the government that are working at cross purposes with one another (often on purpose). Top-level bureaucrats are appointed by the executive but are overseen by legislative authorities; in parliamentary societies this is a nonissue, but in presidentialist ones like ours its very easy for gridlock and acrimony to reign (with the public eventually looking for a "Great Man," often a businessman, to slash red tape and "get things done.").
>Moreover, it is essentially impossible to fire lower level employees.<
Working in the federal government =/= working the private sector. The government is basically an insurance company with an army, so efficiency gains are much harder to achieve. Mass layoffs are bound to make things worse, mainly because public-sector workers have different preferences/motives than their private-sector counterparts (which explains why they take the lower pay/high benefits package) and layoffs are likely to tank morale without guaranteeing any improvement (since the government can't just hire a bunch of people all at once, and since many skilled people would rather make more money in the private sector).
Great point. I guess you could say the government is "efficient" in the scope of the idiotic processes and ancient technology it uses. e.g, if you fire ATC employees this will lead to a degradation in service, but that's because because in 2025 we are still using a system where collisions happen because we use a system of humans radioing pilots "do you see that plane" and pilots saying "yeah I see that plane" but meaning a different plane. This could obviously be done accurately and in milliseconds by computer, but that's not how we do it.
The conclusion of DOGE is only that the government is "efficient" in terms of there not being a bunch of lazy idiots doing nothing and collecting a paycheck. But it's insanely inefficient by the fact that it does things in an extremely slow, expensive, and low quality manner, which is what most people think of when they say "inefficient."
The DOGE story misses one important point, the damage done to the science agencies. As an NSF funded scientist, I am concerned that the NSF has lost its Director and nearly all its senior admin, is in the process of reorganizing its science directorates, etc. As I understand it, NSF is currently being run by BigB@ll's 22 yo second cousin, and when it reopens with 1/3rd its former budget, it will only fund Crypto and Quantum Computing related projects.
Dark joking aside, firing the agency admins was always the point. Trump doesn't have the power to impound funds... the only way to drown the baby in the bathtub is just to fire ALL the senior admins and replace them with lackey's who will happily 'arrange deck chairs' with a puny budget (to mix metaphors).
I also know one senior scientist at a national lab who retired early after he got two Elon letters asking for bulleted lists. Now he regrets being retired.
That does seem to be the plan. Check out this post by former DOE Loan Programs Office head Jigar Shah saying that Energy Secretary Wright has to personally approve each and every Inflation Reduction Act direct pay check for solar/battery/efficiency projects.
https://x.com/JigarShahDC/status/1932266389974430005
Yeah I was going to say - killing USAID *and* trying to kill all academic research.
im sorry to have to ask this but when you say "BigB@ll's 22 yo second cousin" you are joking or exaggerating, right..?
For solar and battery power, the challenge is making a stable grid without the inertia of big turbines. Inverters do not naturally stabilize frequency, and no one has yet proposed a viable solution to solving that on a large power grid.
On household wealth from housing, the country is at an odd spot. Rising household wealth from higher property values is good in one way, but it is also devastating in that in many areas of the country house prices exceed what is affordable for most Americans. As I live in one of those areas, I think about that and wonder how we can solve the housing shortage without causing a financial crisis from underwater mortgages.
IMO, the inertia problem isn't nearly the show-stopper many people seem to think it is. It's mostly just another b.s. talking point the anti-renewables crowd uses to throw shade on renewables.
First, there are now grid forming inverters that can provide robust synthetic inertia and these are starting to get deployed. Grid following inverters already can provide some frequency response and soon will take over markets for many other ancillary services. Unlike large spinning masses, inverters can respond to changing conditions in milliseconds instead of seconds or minutes. They actually can do a much better job with fine-tuning than those lumbering gas turbines.
Where mechanical inertia is needed, grids can use devices called synchronous condensers to get the job done. These are already widely deployed on grids to keep things stable, so they're nothing new. The inertia challenge can be real on grids with lots of renewables, especially as grid operators get up to speed on how grid dynamics are different with renewables. But solutions are already here. Mostly it's a learning curve thing. Once operators get past the learning curve, they usually find they have better tools than they did before to keep things stable.
Grid forming inverters remain to have issues on all grid interaction - will develop but I would not myself want to be a grid operator relying on such at this time.
Maybe we'll just have to agree to disagree, but I really think you're stuck in the past. What you're describing is how things were five or tens years ago.
Here's a more technical article from Tesla that delves into the current state of the art:
https://x.com/Tesla_Megapack/status/1930248215489851669
Finally, I fixed the link in the video below so the time is set correctly and it takes you right to the meaty part about inertia:
https://youtu.be/BBu0h2OfjYY?t=1588
As my literal job is investing in this, at scale, real hard cold capital in the hard assets, I am most assuredly not stuck in the past, rather I am stuck in "currently solid realibility not Tech Co puffery" - which is not in any way to say that 'synthetic' is not a real thing and not going to play large role - however neither is the overall systems interaction mastered.
Unit level is not my comment, system interaction of overall grid (as Texas found out and unexpected cascade of responses of multiple algos suddenly reacting [ETA clarifying -in unexpected interactions which individual instal level was not the issue but system wide interaction] to a wide instablity)
(the video is interesting enough but not news to me, this is my sector although Cammiscera has certain specific views altough I don't disagre overall)
But i should say I agree with both of them on their hydrogen comments more than fully - hydrogen to power scandal is a good phrase.
Thanks for the feedback/dialog.
Is your disagreement with him mostly on timeline and on the current state of tech/grid best practices, or do you disagree with his overall world view on this and where we're likely heading?
In particular, what do you think of his claim at 29:04 in the video that "renewables are becoming the backbone of any generation system of a modern country."
I know he's talking his book somewhat here, but otoh I believe he is directionally correct. Of course, reasonable people can argue what the exact timeline will look like.
As I said, my literal actual job is financing RE. Not silly rooftops for houses, industrial. I am more or less in the same business except on financing not ops. I finance his stuff [ETA: not him literally to clarify but generally].
His estimations on certain things are overly optimistic (example where challenge re storage [one cycle convo]). But he's a developer, that's going to be his nature, to push for it.
Whether RE becomes the backbone of modern country generation systems is dependant on the country BUT are RE the future on a price basis and will any modernising country with sense seek to build the grid system and installations that are a logical RE / decarbonised mix (as in e.g. their nuclear disc.) Yes.
I would not be working on hundreds of millions for this (RE investment, industrial again not silly crunchy granola houses feel-goodery) if that were not the case, my job however is to place this in a risk managed fashion. We have an eye on the dollars and cents.
For this reason during Biden Admin I was climbing the walls about how wrong-headed their priorities were as
A. not clearly believing deep down in the market price beating potential of RE
B. more concerned (segments of Biden Admin, the Lefty Prog greenies) with strangling hydrocarbons than taking the enabling route to accelerate RE (and non-hydrocarbon based). Showed deep down they don't actually believe - stuck in 1970s logic. (oddly rather like the righty opponents... it's painful. I am most certainly not "backwards' looking, however when one is doing utility / industrial scale installation (for profit and long-term asset financing, not short flipping) one has quite the risk-adjusted view and a prudence on the technology interactions, as besides the known-unknows, there are the unknown-unknows to bite you.
C. Grid grid grid grid grid grid.... for God's sake Grid. US grid is a godddamn archaic backwards mess, it's a 1960s relic. And Biden Admin rather than focusing on accelerating real upgrade of that
(as I have a cousin in a E. Coast power major whose job is also in this area, he was near panic on some ideas as nothing actually was being genuinely planned and pushed on the required transmision and distribution upgrades, expansions, this before AI started to help drive more - electrification of industrial processes, of household heating etc is major strategic investment - long term efficiencies are clear but needs urgent up front focus as hard intra takes time. and God in US does it take excessive ridiculous time.)
US needs to fucking get in gear on grid modernisation (and KLein & Co. are spot on about the reform need or this will cost 100x what it need and take 10x the time)
The Cleaning Up podcast had a long discussion about this with the CEO of one of the world's largest independent power producers. Lots of good information throughout the podcast, but here's the key part:
https://youtu.be/BBu0h2OfjYY?t=1588
I was going to bring up the same point about solar/battery and the increasing need for conventional plants to provide frequency and regulation services.
The other issue is that we are nowhere close on the battery front. All of these high renewable penetration studies make ridiculous assumptions about the ability for us to scale batteries.
What do you think the delta is between the need and the ability?
The interview below is with a BESS expert from Modo energy in the UK. It covers battery deployment goals versus reality in the UK specifically, but the issues and challenges are similar around the world.
The Modo guy thinks the UK's 2030 goal of 22-27 gigs of battery storage is too optimistic, but his guess is they end up with somewhere in the high teens or low 20s. So not really that big of a delta in the grand scheme of things. BTW, this is from a company that makes its living selling estimates on where this stuff will be in the future, so their credibility is on the line with each published prediction.
https://youtu.be/dOoRRMblD-g?t=836
I would not say "ridiculous"
Excessively naively optimistic on possible timeframes for scaling
Frequency regulation; I would not say however that no one has proposed a viable solution.
There are quite a number of solutions that are entirely feasible economically.
A. flywheels (see UK)
B. Frequency servicing from turbine base generators (of which nuclear can provide entirely decarbonised)
C. Grid forming inverters - although the problematic issue is unexpected mass level interactions
I have several relatives and a number of friends who work for the government in DC, and I could have told Elon that they are serious people who work hard, but I don't think he would have believed me. After all I'm a woman, and not a single DOGE agency invader was a woman.
I'm a fed (and a woman) and totally agree with you about our ranks working hard and wanting to make an impact. One weird thing about DOGE to point out, though, is that their acting administrator is a woman--Amy Gleason. It's not clear how much she agrees with Elon and *his* mission, though.
I've been paying very close attention, and she hasn't made a single public statement about her role in DOGE. Window dressing if I ever saw it.
It’s hard to be window dressing if you aren’t making public appearances!
The last item is not true; they certainly were Bro heavy but there were women.
Genderising the problem doesn't really actually answer it.
Hard work doesn't mean efficient, it just means not lazy.
On the theme of economic statistics:
“The “One Big Beautiful Bill Act” Eliminates the Office of Financial Research—Threatening the Stability of the Treasury Market”
Nathan Tankus writes that the Trump Administration is eliminating a small office gathering information on the sale of treasuries that can help detect instability in that in very important market.
https://www.crisesnotes.com/the-one-big-beautiful-bill-act-eliminates-the-office-of-financial-research
An excellent piece. So scary that Trump et al are busy removing parts from a machine they don't understand (and have little interest in understanding).
Total, complete, utter incapacity to understand!
Re: Importance of batteries for smoothing out peak demand
I loved that Brian Potter post on how batteries plus solar are game changers for keeping the cost of the energy transition down. One thing he didn't mention is that batteries can enable huge cost savings on the distribution/delivery side of the cost equation as well. Batteries and other new peak shaving technologies like VPPs aren't just about saving costs on the generation side.
On many grids, distribution costs are actually higher per kwh than generation costs. For reliability, distribution infrastructure has to be built to handle once in a decade peak loads. Most of that capacity is unneeded most of the time. Distribution grids typically run at a 30% average utilization rate.
Deployment of batteries, either behind the meter, or near choked distribution assets could significantly increase this avg. utilization rate. Couple this with better demand side load management for things like EV charging and other large loads and it's very likely we could double utilization rates on current distribution grids. That would result in halving he per kwh distribution charge.
The vast majority of the distribution cost is the wires, transformers, and telephone poles/underground piping. All that remains even if batteries are very close for exceptional peak usage.
What you could save on a bit is transmission line capacity. That would no longer need to be able to deliver exceptional peak power.
With the increase in demand as we go all electric, this could delay where we need to upgrade some transmission lines.
Sure, but if batteries and other peak shaving tech let distribution utilities push twice as much energy through the same infrastructure, it will literally cut the per kwh delivered cost in half. EVs alone could drive a lot of this as long as end users have the right incentives (and tech) for time shifting flexible load.
Here's a real world example from Texas (this deal is driven mostly by wind overcapacity, but they're covering distribution costs since there's guaranteed excess capacity during the window when charging is free:
https://www.txu.com/electricity-plans/free-ev-miles
In relation to solar using batteries and local gas generation is fine for short periods hours to maybe a day or so. However in Eu a recognised issue is ‘dunkelflaute’ where high pressure system for a few weeks is combined with a lack of sun, so that levels of pv and wind generation are very low over large area ie multiple countries. This means that interconnectors are only useful for transfer of fossil or nuclear powered electricity, which are likely already required for local use.
So the situation as you get to very high levels of renewables the issue of dunkelflaute will be a problem - it means a near complete lack of electricity for society for several weeks, which would be intolerable.
In reality the solution long term would be to produce and store hydrogen and then burn this in generators to produce power. These could. Be colocated with renewables where suitable grid connections already available and where they could also be used for grid stability.
Pending availability of hydrogen LNG generation could be used initially and later hydrogen could be burnt instead.
Batteries would be uneconomic and impractical as an alternative as they could not be recharged during dunkelflaute.
Having LNG/H2 generation installed for dunkelflaute may also reduce need for larger batteries as such generation would
be required regardless.
This doesn't become a huge challenge until renewable generation gets higher than 80-90%. Up to that point, peakers that grids already have can be redeployed to handle this new scenario. Going from 90% renewables to 100% does require some new tech, but we won't hit that wall for a decade or two in most places. By then hopefully we'll have geothermal, cheaper nuclear, or some other new tech to help with that last 10%.
The post Noah linked alluded to this, but batteries are a key here. They not only help with demand peaks, they also can absorb excess generation at a nice steady rate over longer periods of time during a dunkelflaute. This means a relatively small number of peaker plants can run steady 24/7 to satisfy grid load and to keep batteries charged for when peak demand hits. Things like flexible demand will also help smooth out the loads so we can get the most out of the "peakers" that'll actually be running 24/7 for days at a time. Obviously having some steady generation like nuclear in the mix helps a lot, but really, it's the low capacity factor peakers that'll do most of the heavy lifting, at least for now.
Anti-renewables folks talk about the cost of needing all these extra peakers standing by just to handle a couple of brief dunkelflaute periods, but that's not that different from today. Most grids have several peakers in the fleet that run at single digit capacity factors (eg they run less than 10% of the time). They run for 2-3 hours a day on maybe 80-100 days a year. The economics of this works out ok because most of the cost of these plants is fuel cost. On top of this, our existing CC gas fleet has an average utilization of 52%, so there's lots of extra capacity there as long as peaks can be managed. They have somewhat higher non-fuel opex than peakers, but could probably run profitably at 10-30% capacity (the plants are already built so it's just an opex question).
On a grid with mostly renewables, instead of a couple hours a day on 80-100 days, these plants will run 24/7 for a few days for maybe a total of 20-30 days a year. So likely the same capacity factor as today, just a totally different run profile. As new plants get built, they'll be a lot cleaner and more efficient because they won't need the fast-start-short-run capability that today's peaker plants require. In the future, we'll likely be able to schedule runtime hours or even days in advance the plants will have much longer run times. This means plant designs can be optimized and we'll see more gas instead of diesel that's cleaner and more efficient.
Hydrogen won’t work. Look at the efficiency limits due to the laws of thermodynamics.
add in fundamental issues like metal embrittalement...
It is a complete pie in the sky dead-end.
Interesting points and happy to respond!
Easiest point to clear up initially is on Hydrogen.
I think at this stage the concept of generating and distributing hydrogen using modifications to existing gas networks to provide domestic and industrial/commercial heating has been completely dismissed in Michael Liebrich’s excellent series of ‘Cleaning Up ‘podcasts and his concept of the ‘Hydrogen ladder’ which indicates where Hydrogen use is most suitable.
As a rule of thumb it takes more than three times the input energy to generate 1 unit of output energy, so whilst the input energy (Wind/Solar) may be free, the capital cost of the electrolysis plant and the generators themselves are high because they have to be sized to deal with three times the quantity of output energy actually required.
The point made about using batteries and existing peakers is sound for periods outside ‘dunkel flaute’ – but the nature of ‘dunkelflaute’ is that there is NO Wind or Solar Generation for several weeks – the amount of existing peakers would be wholly inadequate for such extended periods as you would have to cover 100% of the load for 100% of the time from existing fossil/nuclear generation.
This is the kernel of the problem – you must have enough alternative generation and storage to cover this period with active generation. The amount of generation needed will depend on how high the load is and how long in weeks ‘dunkelflaute’ lasts. You might reduce load somewhat by banning EV charging during this period and only allowing people to use what is already stored in their batteries. Similarly DataCentres would have to only run on stored energy or more feasibly just have mirror sites outside ‘dunkelflaute ‘ areas deal with the data during this period.
For domestic heating form electricity, it would have to be minimised, so need to rely on good house insulation.
Services and Industry up to the level which had been planned to be covered from Active generation using stored fuel could still operate, but the higher the load allowed for and the longer the period, the greater the cost of the generation required.
To a certain extent it would also be possible to grossly oversize renewable generation so that at low levels of wind and solar it could still contribute something, but this is likely to be minimal and uneconomic, although probably feasible to some extent on offshore wind where increases in blade size can increase generation disproportionally. As an illustration. I remember being at a lecture about the Faeroe islands trying to go 100% renewable as funding available from Denmark and they found that 95% was feasible, but to cover the remaining 5% would require a duplication of all the plant installed for the 95%, so instead they just opted for fossil fuel generation to cover the remaining 5%.
The existing ‘peaker’ or indeed traditional generation plant already installed is unlikely to meet more than a fraction of the load in the next 10 years as what is happening is that EXISTING energy usage from fossil fuels for heating and Transportation, is being replaced by renewables, and new generation is coming from new Solar and Wind installations. Existing traditional generation is being retired and little extra plant is being built. So there is no uncertainty as to the requirements for electrical demand in future as it is not dictated by new loads (except Datacentres) but instead by the electrification of existing power usage. Additionally, the existing demand for electricity is increasing by a multiple of 2-3 times the existing demand, so that any existing fossil generation will be wholly inadequate for the future.
Dealing with temporary mismatches between renewable generation and load demand is relatively straightforward in comparison – shift load, use batteries etc and the shorter the period to be covered the easier and cheaper it is.
Pumped Storage was traditionally only used to deal with frequency control cause by near instantaneous mismatches on power grid, and is excellent for this, but only actually stores small
amounts of MWh although it’s rate of out put can be very high in terms of MW, so has no impact on ‘dunkelflaute’ issues.
A Brief Climatology of Dunkelflaute Events over and Surrounding the North and Baltic Sea Areas
So the essence of the issue is what does society do in a region, where, because of the ‘dunkelflaute’ effect there is NO electricity available from renewables in these countries, neither wind nor solar, for several weeks, and it is not physically or economically possible to build batteries to cover this period?
Minimising ‘dunlkelflaute’ within a region is possible through much reinforced network interconnection so that if a country itself has ‘dunkelfalute’ it can import from bordering countries, and this would minimise the effects of less extensive ‘dunkelflaute’ events, but when the dunkelflaute’ occurs over a larger area them this is no longer a solution e.g. the area examined for ‘dunkelflaute’ in the paper cited above.
Importing electricity from outside these countries from areas where ‘dunlkelflaute’ occurs is feasible if sufficient generation to cover the missing renewable generation is available, and if the interconnected network is suitable for carrying such high levels of power.
So in theory HV DC cables from Morocco etc could be brought by sea to parts of Europe to help mitigate ‘dunkelflaute’ and also to provide cheaper generation. However it would not be wise to rely entirely on such solutions as deliberate disruption of the cable by (say) a submarine, would be an unacceptable risk.
Also, in cases where ‘dunkelflaute’ occurs it can also be taken that nations will look after their own needs first, so relying on imported electricity when insufficiency generation plant in home country is also risky.
Recognising ‘dunkelflaute’ as an issue means that :
(a) Much greater and more robust interconnection between countries is required
(b) Long distance UHV and HVDC interconnection from outside the region is worth serious consideration
(c) Greater use of nuclear as a backup is also a requirement
(d) Low cost generators using stored fuel (such as LNG/H2) sited at locations with strong grid connections can also help mitigate ‘Dunkelflaute’.
In relation to (d) it must be accepted that burning fossil fuel for short periods at long intervals is a ‘quid pro quo’ for using renewables for very long periods near continuously.
In cases where philosophically it is unacceptable to burn any fossil fuel for any reason, then Hydrogen generated and stored from surplus renewables could be used. As such generation will require to be burnt in a generator, it might be a good policy to provide initial cover using LNG generators which can be converted to Hydrogen in the longer term, sited at renewable generator sites which already have strong grid connections.
This would also have the short term benefits of stabilising the power system and mitigating any mismatches between demand and generation in the interim, and also avoid the impossible task of trying to install huge amounts of active generation in a short period at a later date.
The laws of thermodynamics don’t say hydrogen won’t work. They just say you need lots of spare energy at some points in time to produce moderate amounts of hydrogen for use at other times.
We can also feed hamsters and then have them run on those little wheels connected to generators. That too will work. But neither makes economic sense.
But you are right, it can be done. But aside from the hamster approach it's difficult to think of an approach that makes less sense financially.
As was pointed out, hydrogen is an energy storage and distribution technology, not an emergency distribution technology. And I know you're exaggerating to make a point, but I doubt that synthesizing hydrogen is as energy inefficient as feeding animals to use their muscle power. (The pre-industrial world actually was stuck using animals, although they used horses, cattle, and humans instead of hamsters.) Storing electricity in batteries instead of making hydrogen from water (or methane from water + carbon dioxide) is significantly more efficient in terms of energy lost, but batteries have a much worse energy density per unit weight and per unit volume than combustible gases, so it's a matter of tradeoffs - it's probably better to run jet airplane engines on hydrogen or methane than batteries, and methane in particular has a lot of already existing infrastructure dedicated to storing, distributing, and using it.
Whether or not using solar energy to make hydrogen or methane will make financial sense depends a lot on both future technology (how much the cost of solar energy drops, how good future batteries are, how close to the thermodynamic limit we can get combustible gas synthesis, etc.) and government incentives. For example, if, in 2070, the law requred that *all* energy generation and use were required be carbon neutral, synthetic gas would presumably be used a lot more than it is today. I don't have anything more than vague guesses as to what the cost curves for the various ways to generate and store energy are going to look like in twenty to fifty years, and unless you're an engineer or scientist in a relevant field, I don't think you have the relevant numbers to make more than make a vague, hand-wavy guess either. (Can you tell me what percent efficiency you would need to make it financially viable? It's obviously not 100%...)
Yeah but all the hamsters would look so cool 😊
The best storage mechanism remains pumped hydro. Something we've had for a long time. Unfortunately, like regular hydro, it requires mountains.
My issue with Hydrogen is say it's 65% cracking the water and then the CCGT is 65% efficient. That's .65 x .65 = 42% efficient. At best.
Maybe for ships or planes where energy density and weight really matters. But I'm not wild on getting on something like the Hindenburg to travel.
Being at 60% renewables without any heavy inertia is the Spain/Portugal issue. At present they have nothing that will make up for a 1GW physical spinning turbine.
They also find that as renewables get over 30% the cost of power from the backup generators skyrockets. So ratepayers see increasing bills.
Hydrogen .... EU/German obsession with hydrogen is so many levels of wrong from A to Z it'se hard to understand how they sold themselves on this. On other hand they sold themselves on Desertec for the longest time...
Hydrogen is not a path, cost, metal embrittalement, fundamental physics make it just utterly completely dumb.
Nuclear servicing, bonjour la France
I understand your point and I'm happy that DOGE didn't uncover anything too crazy, but just because they didn't uncover fraud and abuse doesn't mean that the government is efficient or a good use/steward of taxpayer money. Providing government services efficiently will require legal reform. If the IRS already knows what I owe them, then why not just bill me? Why is it so hard to get a permit to do anything or open a business? Where is my ID and app for accessing government services? Etc. There's significant room for improving government efficiency at all levels, but that will require legal reform and is much harder to do. I'm happy we didn't see large scale corruption and fraud though. Thanks for making the case.
> If the IRS already knows what I owe them, then why not just bill me?
Because Intuit and Quicken lobby the government to ban this sort of action by the IRS. They don’t even allow IRS forms to automatically do addition for you.
> Why is it so hard to get a permit to do anything or open a business?
This is a local government issue that varies a lot from place to place. We need to get localities to streamline their laws. Some are making progress on this front but others are not.
> Where is my ID and app for accessing government services?
Privacy advocates get upset anyone proposes a national ID, so we are stuck using social security numbers and passports. Login.gov has improved things somewhat but is still clunky.
The large, chronic goods trade deficits that have hollowed U.S. manufacturing are the result of "the reserve currency curse." We made the USD the world reserve currency and then we made it so that the only way that the rest of the world can get net USD is to sell us stuff and not buying anything in return. The Fed should supply the world with USD directly by buying foreign assets. Swap lines are one way to do this.
We were the reserve currency as we ran a trade surplus for decades.
The banking system is supposed to handle this, but it started to need more actual USD. We have run >$30T ($2024) in goods trade deficits since 1980 and the trade-weighted foreign exchange value of the USD is 3.5X higher than it was in 1980.
You are correct that it's been negative for awhile and has also been getting worse.
While unlikely to make it positive, there's a lot of games large corporations pull to move their profits to countries like Ireland. And it can get weird allocation services bought in the U.S. but used where?
why not rebrand from anti-ice protests to "kill bill" protests. there is ice funding in the bill and some well placed posters picked up in media coverage would do the trick. (thank elon and tick off trump as a bonus).
Great stuff as usual, Noah. I also liked Brian Potter’s solar article. One really important thing he acknowledged not analyzing was the transmission network. Making our electricity grid more robust & efficient would further improve the solar/ battery value proposition. It’s hard to overstate how fragmented our grid still is, despite several solid years of upgrades over the past decade or so. It’s still much closer to highways in 1949 than today’s internet - and no one is arguing that making the information network even more robust is a bad investment. Like batteries, a robust, national electric grid increases the value of every generation resource connected to it.
On Solar Power & Renewable Energy (RE) [& Decarbonised Energy (DE)]
First, by context, my actual job is the financing of industrial RE, at scale, like hundreds of millions $$.
The information there is decent enough however... erroneous in part in its framing (although at end it is noted that the analysis is simplified as it is ignoring Transmission and Distribution [aka, The Grid])
This is fundamentally off-base for Solar or RE generally as both Texan and Iberian issues have shown as the problem of RE is not merely intermittancy, it is also Frequency Services - grids are dynamic mechanisms and Frequency services which are critical to grid stability (and avoidance of collapse, see Iberian blackout where current best hypothesis is some kind of cascade error in frequency regulation engendered perhaps by system faults similar to what happened in Texas a few years ago - where solar connection moderators (computer controlled, emulating 'self-frequency' regulation that hard physical turbines naturally provide) interacted in unexpected ways and cascaded shut-downs.
So simplistically looking at Solar and Battery in that lens is quite wrong and dangerous - dangerous because massively more attention needs to be paid to the critical issue of GRID UPGRADE. Otherwise RE can quickly can become stability problematic. It is as well better to have it Solar, Wind Hydro, & some non-intermittant Base and Frequency Regulation/Service (nuclear for full gen level decarbonisation, bonjour la France)
None of this is to give credence to the foolish Reactionary Right attacks on RE, on solar - onshore wind, utility scale or industrial scale solar PV is cost-beating hands down and with Grid upgrades (needed anyway to address the AI explosion) are unbeatable, notably if the US finally starts to create a genuine unified grid (the US has such a bizarre hodge-podge that even on regional level it's not really optimum efficient - whereas a genuine integrated continental grid allowing power wheeling trans-continentally would open huge potential economies of scale.
But absolutely 100% more attention is needed to Grid Infra upgrading ASAP as hard infra is - even in places where you can build efficiently (Hello -Not USA) time consuming.
Solar cell and battery price/efficiency are leveling off. Will we see a big improvement someday? Probably. Will we see it soon? Unlikely.
Which means being even 70% solar & wind is incredibly expensive, takes up a ton of and will require HVAC (or HVDC) lines crisscrossing the country to a much greater extent than now.
There’s a reason Denmark, Sweden, etc. are returning to nuclear and even Germany is considering it. Pretty much the only entities still going for all/mostly renewables are Australia and blue states in the U.S.
Solar + Batteries is a wonderful fantasy. I wish it could work. But it’s just a fantasy. And anyone who goes down that road is going to deliver power that is expensive, unreliable, and still emitting CO2 from the gas backup.
https://liberalandlovingit.substack.com/p/maybe-im-wrong-about-nuclear
I would not say Solar plus Batteries is a fantasy - pure solar and battery strategy yes, but not in itself (but then all the purist single solution approaches on energy tend to be fantastical).
Of course indeed yes, nuclear return is fundamental.
I agree. Solar + batteries is great as part of the summer peak power solution. And to the extent that middle of the day pulls more power than middle of the night, again great.
The only way to tell if solar power is economic is to eliminate all mandates and subsidies and let the markets do what they think is best.
Preventing China shock 2.0 makes a ton of sense and seems more aligned with what is good for tech, health tech, and high-skill employers in general. It seems like something both sides of the aisle should theoretically be able to support….
your chart says middle 40% but i assume you mean the next 40%, i.e., the 50th-90th percentiles, not the 30th-70th percentiles