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Dr. George Reisman and the Curious Case of the Missing Crony Capitalists, or, Moral Blindness Helps Me to See Clearly

October 28th, 2011 No comments

I refer to Dr. Reisman‘s October 21 post at Mises Daily, “In Praise of the Capitalist 1 Percent “. (The good Dr. and I go back a few years, as some of my readers may recall.)

In face of growing economic dislocation and discontent, Dr. Reisman serves up his usual, disappointing fare of portraying powerful (and provident) ‘capitalists’ as the victim of goverment and of the yammering mob. We all just KNOW it’s those with much less wealth who are corrupting government, socializing losses via the banking system and trying to raise barriers of entry that divide markets and limit competition, right?

Sure, the rabble may not well understand how capitalism is SUPPOSED to work, but they’re damned right that it isn’t , in large measure as a result of deliberate gaming and cynical socialization of risk by our so-called ‘capitalists’.

Rather serving up useful insights – or even appropriate outrage – Dr. Reisman is serving up smoke screens to protect those who bear the greatest blame for destroying laissez faire capitalism and Hayek’s essential “market morals”:

Hayek on the grim threat posed by the erosion of “market morals”; Who, exactly, is leading us down the primrose Road to Serfdom?

Those whom Reisman is actually defending are not pure capitalists, acting under laissez faire competition, but largely rapacious and irresponsible CEOs of large, listed companies, who, freed from any control of their erstwhile shareholder ‘owners,’ use government to crush competition, etc.

In effect, Dr. Reisman is defending the very people MOST RESPONSIBLE for DESTROYING laissez faire capitalism. For shame, George!

I left the following comment (edited lightly):

In his capable defense of our non-existent system of laissez faire capitalism, the good Dr. Reisman is curiously blind to the ways in which the ‘capitalists’ he defends are themselves BOTH the primary drivers and beneficiaries of the destruction of capitalism that he rightly lauds.

In Reisman Land, it’s always the powerful and corrupt ‘capitalists’ who are the victims of the relatively powerless hoi polloi.

Even Dr. Reisman’s throwaway references to ill-gotten gains shift focus and responsibility from powerful men ACTING to use government to the black box of government, which acts mysteriously and punishes as much as rewards firms: “government is permitted to depart from a policy of strict laissez-faire and thereby arbitrarily reward or punish firms”.

None is so blind as he who will NOT see. Dr. Reisman appears to be lacking a theory of Human Action, or rather, a theory in which men with money, in order to mitigate the rigors of laissez faire competition or to get easy money from selling goods and services to government, sometimes ACTIVELY coordinate their action with men more directly controlling the levers of government.

Instead, Dr. Reisman only sees the small man – laborers, officer workers, professionals and consumers – avariciously acting to use government to tie down and confiscate the wealth of the rich, noble, and heroic yet powerless capitalist.

Does the good Dr. not see that his capitalists, far from free and responsible men, act through GOVERNMENT-CREATED and licensed “limited liability” entities that are selected precisely because they shield the owners from personal responsibility for the harms their firms cause to others and the public and large? And that the intimate government role, the resulting harms and the lack of personal accountability are the very reasons why the victims then band together to petition government to “do something!”, rather than simply chasing the owners and their servants with pitchforks?

I agree with Dr. Reisman that ongoing events are a morality play writ large. But unfortunately Dr. Reisman (like many people now fed up with rampant crony capitalism who now blame ‘capitalism’ and the 1%) describes it to us in black and white.

Perhaps his mother took his Kodachrome away, but can’t we at least expect some shades of gray?

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Interesting new research shows that THE key to disaster recovery is the strength of the local community ('social capital'), NOT Government action

June 12th, 2011 No comments

Daniel P. Aldrich is an up-and-coming political scientist who got interested in disaster recovery when New Orleans was hit by Hurricane Katrina a few months after he had moved there with his family.

He has also spent quite a bit of time living and studying in Japan; I ran across him recently in connection with my reading and blogging on post-earthquake, post-tsunami and post-Fukushima nuclear power plant disaster Japan; he’s mentioned prominently in the NYT article excerpted in my preceding post.

According to his bio at Purdue University, Aldrich:

received his Ph.D. and M.A. in political science from Harvard University, an M.A. from the University of California at Berkeley, and his B.A. from the University of North Carolina at Chapel Hill. Daniel has focused on the ways in which state agencies interact with contentious civil society over the siting of controversial facilities such as nuclear power plants, airports, and dams. His current research investigates how neighborhoods and communities recover from disasters. He has published a number of peer-reviewed articles along with research for general audiences. His research has been funded by grants from the Abe Foundation, IIE Fulbright Foundation, the National Science Foundation, the Reischauer Institute at Harvard University, the Weatherhead Center for International Affairs, and Harvard’s Center for European Studies. He has been a visiting scholar at the Japanese Ministry of Finance, the Institute for Social Science at Tokyo University, Harvard University, the Tata Institute for Social Science in Mumbai, the Institut d’etudes politiques de Paris (Sciences Po), and the East West Center in Honolulu, Hawaii. He has spent more than three years conducting fieldwork in Japan, India and France.

His research and writing on disasters and resilience is very interesting and speaks to the importance of strong communities of the type that governments and their corprate agents frequently do their best to seek to erode. Here is his own description and set of links to that work:

Externalities of Strong Social Capital: Post Tsunami Recovery in Southeast Asia forthcoming in Journal of Civil Society


Much research has implied that social capital functions as an unqualified “public good,” enhancing governance, economic performance, and quality of life (Coleman 1988; Cohen and Arato 1992; Putnam 1993; Cohen and Rogers 1995). Scholars of disaster (Nakagawa and Shaw 2004; Adger et al. 2005; Dynes 2005; Tatsuki 2008) have extended this concept to posit that social capital provides nonexcludable benefits to whole communities after major crises. Using qualitative methods to analyze data from villages in Tamil Nadu, India following the 2004 Indian Ocean tsunami, this paper demonstrates that high levels of social capital simultaneously provided strong benefits and equally strong negative externalities, especially to those already on the periphery of society. In these villages, high levels of social capital reduced barriers to collective action for members of the uur panchayats (hamlet councils) and parish councils, speeding up their recovery and connecting them to aid organizations, but at the same time reinforced obstacles to recovery for women, Dalits, migrants, and Muslims. These localized findings have important implications for academic studies of social capital and policy formation for future disasters and recovery schemes.

Social Science Perspectives on Disasters in Perspectives on Politics

In this extended review, I discuss three recent books on disaster: Governing after Crisis: The Politics of Investigation, Accountability, and Learning edited by Arjen Boin, Allan McConnell, and Paul ‘T Hart, Learning from Catastrophes: Strategies for Reaction and Response , edited by Howard Kunreuther and Micheel Useem, and The Next Catastrophe: Reducing Our Vulnerabilities to Natural, Industrial, and Terrorist Disasters by Charles Perrow. All three books invoke the market and state as core forces at work in mitigation and disaster recovery, overlooking the critical role of social capital.

Separate and Unequal: Post-Tsunami Aid Distribution in Southern India published in Social Science Quarterly

Objective. Disasters are a regular occurrence throughout the world. Whether all eligible victims of a catastrophe receive similar amounts of aid from governments and donors following a crisis remains an open question. Methods. I use data on 62 similarly damaged inland fishing villages in five districts of southeastern India following the 2004 Indian Ocean tsunami to measure the causal influence of caste, location, wealth, and bridging social capital on the receipt of aid. Using two-limit tobit and negative binomial models, I investigate the factors that influence the time spent in refugee camps, receipt of an initial aid packet, and receipt of 4,000 rupees. Results. Caste, family status, and wealth proved to be powerful predictors of beneficiaries and nonbeneficiaries during the aid process. Conclusion. While many scholars and practitioners envision aid distribution as primarily a technocratic process, this research shows that discrimination and financial resources strongly affect the flow of disaster aid.

The Power of People: Social Capital’s Role in Recovery from the 1995 Kobe Earthquake forthcoming in Natural Hazards

Despite the regularity of disasters, social science has only begun to generate replicable knowledge about the factors which facilitate post-crisis recovery. Building on the broad variation in recovery rates within disaster-affected cities, I investigate the ability of Kobe’s nine wards to repopulate after the 1995 Kobe earthquake in Japan. This article uses case studies of neighborhoods in Kobe alongside new time-series, cross-sectional data set to test five variables thought to influence recovery along with the relatively untested factor of social capital. Controlling for damage, population density, economic conditions, inequality and other variables thought important in past research, social capital proves to be the strongest and most robust predictor of population recovery after catastrophe. This has important implications both for public policies focused on reconstruction and for social science more generally.

Fixing Recovery: Social Capital in Post-Crisis Resilience in The Journal of Homeland Security June 2010

Disasters remain among the most critical events which impact residents and their neighborhoods; they have killed far more individuals than high salience issues such as terrorism. Unfortunately, disaster recovery programs run by the United States and foreign governments have not been updated to reflect a new understanding of the essential nature of social capital and networks. I call for a re-orientation of disaster preparedness and recovery programs at all levels away from the standard fixes focused on physical infrastructure towards ones targeting social infrastructure. The reservoirs of social capital and the trust (or lack thereof) between citizens in disaster-affected communities can help us understand why some neighborhoods in cities like Kobe, Japan, Tamil Nadu, India, and New Orleans, Louisiana displayed resilience while others stagnated. Social capital – the engine for recovery – can be deepened both through local initiatives and interventions from foreign agencies.

Aldrich Presentation on 25 March 2010 BUILDING RESILIENCE conference

Despite the clear and present danger from disasters, social scientists have yet to provide strong, quantitative evidence about which factors influence the pace of recovery. Using data from four megadisasters over the 20th and 21st century – the 1923 Tokyo earthquake, the 1995 Kobe earthquake, the 2004 Indian Ocean tsunami, and the 2005 Hurricane Katrina – Aldrich argues that social infrastructure is the critical factor in recovery.

The Crucial Role of Civil Society in Disaster Recovery and Japan’s Preparedness for Emergencies in Japan aktuell 3/28

This article is concerned with the empirical puzzle of why certain neighborhoods and localities recover more quickly than others following disasters. It illuminates four mainstream theories of rehabilitation and resilience, and then investigates a neglected factor, namely the role of social networks and civil society. Initial analyses underscore the important role of trust and connectivity among local residents in the process of rebuilding. After examining the role of civil society in Japan’s preparedness for emergencies, the article concludes with some policy recommendations for governments and nongovernmental actors involved in disaster relief.

This paper, entitled the The Need for Comparative Research, was prepared for a conference at the Jamsetji Tata Centre for Disaster Management in February 2008, and sets out some initial ideas which have motivated this project.

Some of Aldrich’s newspaper articles are linked here.

I expect I’ll be commenting further on his work.

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Scrupulosity III: More fun at pretending that nothing about the nature of state-created corporations leads to statism

June 6th, 2011 No comments

 I copy below a few more of my comments on Jeffrey Tucker‘s unhappiness that not all libertarians are cheerleaders for our current model of “capitallism” (see my eariler posts on “scrupulosity“):

TokyoTom June 3, 2011 at 8:35 pm

Thanks for the great Rothbard quote, Rodney.

Unfortunately, it looks like Rothbard never focussed on the special state grants to those forming corporations that institutionalize Moral Hazard and make them such powerful agents of both corrupting/buying favors from government and at destroying commons. The grant of limited liability got the ball rolling, and things have snowballed mightily, as citizens clamor for ever more government control of our government-created amoral agents.



PS: In addition to my comment above,,
there’s more here:

TokyoTom June 5, 2011 at 6:44 am

Anthony, many corporations are very obviously in bed with government and driving the decisions of politicians and bureaucrats. Are we to pretend that this isn’t happening, or that those in corporations trying to buy government favor have no moral responsibility for their actions?

Are we also to just hope government goes away, instead of fighting for greater freedom and less government favors to corporations?

I disagree: Immodest thoughts: To fix capitalism, we must get govt out of corporate risk-management (rent-selling) business and get shareholders to stop playing ‘victim’ & start paying attention to risks – TT’s Lost in Tokyo



sweatervest June 5, 2011 at 1:23 pm

“driving the decisions of politicians and bureaucrats”

The only thing that drives the decision of a politician or bureaucrat is that politician or bureaucrat. They are the ones that are holding the guns, not the corporations. If the corporations ask a favor of the state they must offer something in return, because the operators of the state must voluntarily agree to it (no one case force them). Corporations are by no stretch of the imagination in charge of the state.


TokyoTom June 5, 2011 at 6:25 pm

Incentives, good and bad, drive decisions of all people.

We get poor decisions from politicians and bureaucrats because of moral hazard, the information problem, budgetary incentives, lack of accountability, the information problem and, not least, the pressure and enticements of corporations.

“Corporations are by no stretch of the imagination in charge of the state.”

I think I said: “many corporations are very obviously in bed with government and driving the decisions of politicians and bureaucrats.” Are you denying corporate influence?


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Scrupulosity II: A note to Stephan Kinsella on growing statism. limited liability, deposit insurance, and rampant moral hazard (and moral confusion)

June 5th, 2011 No comments

In addition to the comment that I blogged the other day regarding Jeffrey Tucker’s June 2 post, Scrupulosity and the Condemnation of Every Existing Business, I posed a question to Jeffrey in response to this further comment by him:

But Rothbard was not just an anarchist. He was an anarcho-CAPITALIST. From what I can tell, Rothbard has yet to win THAT victory among libertarians. They have learned from his anti-state writings, but have they learned from his economic writings on the absolute centrality of capital accumulation for the advance of civilization?

My question:

TokyoTom June 4, 2011 at 7:20 am

Jeffrey, are state-created corporations – the ones that embody moral hazard via a gift of limited liability to shareholders, have an eternal life, and in which responsible persons are fairly anonymous and bear little or no direct obligations to the outsiders they affect – are “absolutely central to capital accumulation and for the advance of civilization”?

Did we have no capital accumulation in the days of business partnerships and associations, before governments started giving away the store to their own little Franskensteins? Didn’t all businesses once have a rather clear set of owners, where the buck stopped?

Please clarify.


Stephan Kinsella kindly jumped in; his response to me on June 4 is here.

I use this blog post to copy my response to Stephan:

TokyoTom June 5, 2011 at 5:58 am

Thanks for your comments, Stephan.

1. Calling shareholders “passive” might be a fair representation of the existing, government-created system – especially for listed, “public” companies, but that’s pretty much my point. This is NOT true of partnership or other traditional types of business organization, and the grant of limited liability itself deliberately signals shareholders that they can turn a blind eye to activities that profit the company while posing costs and risks to others.

Sure, it’s probably not now “fair” to passive shareholders to “attribute vicarious liability to them … for torts committed by employees”, but that is both a strawman and besides the point. The point is that the government grant of limited liability MAKES A DIFFERENCE; the strawman is that I am certainly NOT proposing a new rule that shareholders be assigned liability for acts by corporate employees, but simply that the limitation on liability be eliminated – just as other grants by the government of liability limits (nuclear power, offshore oil drilling, and pollution permitting generally) should be eliminated.

Your assertion that limited liability of shareholders “would also be present in a free society in which private contractual ‘corporations’ arose” is totally unsupported. Can you point to where Rothbard, Hessen or Pilon argue that private contracts that limit liability of investors against voluntary creditors could serve to limit their personal liability against INVOLUNTARY creditors, viz., tort victims?

Just as you, surely, have no objection to private agreements between parties to protect the information created by one of them (private “intellectual property”) but simply oppose state-created IP, so too should you (as a lawyer!) be able to understand that in principle, of course, I have no objection to contract-based companies, but oppose the obvious and important favors granted by the state in the case of all corporations?

2. Not to be missed is that the grant of limited liability is extremely important and consequential:

See: The Cliff Notes version of my stilted enviro-fascist view of corporations and government – TT’s Lost in Tokyo

It has allowed owners to divorce themselves from formal reponsibility for the acts of their agents/employees, to divorce themselves from the communities in which their firms act, and to dodge claims of moral responsibility.

So we are left with massive corporations which are massively entangled with government and are powerful buyers of favors, which citizens forever clamor for “more control!”, and which lack any clear locus of responsibility — and in which we find anarchist libertarians like yourself and Lew Rockwell acting as their lawyers, and calling them and their shareholders “the biggest victims” (not the little people on the short end of the stick of projects like Gulf oil drilling, nuclear reactor meltdowns or even mundane health/air/water/soil damage from pollution) whenever bad decisions resulting from government-institutionalized buck-passing results in unfortunate “accidents”.

As Mises long ago noted, moral hazard matters. Mises on fixing externalities: progress along the Kuznets curve is not magic, but the result of institution-building – TT’s Lost in Tokyo

Clearly, our continuing crises in our banking sector are due not simply to money-printing by the Fed, but to massive moral hazard within banks, investment banks and other advisers, all of which can be laid at least in part at the foot of government. Government’s role in guaranteeing deposits has the effect of telling them they get a free lunch, and don’t need to worry about how well the banks invest their deposits – and of shifting to our wonderful government the risk of failure. Government responds by imposing “prudential rules” (like “investment-grade” requirements and capital standards that are always gamed by insiders to put bonuses in pockets, while leaving risks to the banks and thus the government. Somehow – inevitably – the government is always late to diagnose the gaming and to tighten up rules – which, like Sarbanes^Oxley and other rules imposed on super-duper “public” companies, serve to further raise barriers to entry and to distance managers from shareholder control.

Tell me again that the massive games that a fairly insulated managerial class is engaged in at mega-firms are both natural and inconsequential?

3. While in principle any partnership can keep going even when one partner dies or decides to leave and new partners are added, surely you are aware that this is a very cumbersome process, not in small part because of the concerns that the partners and its lenders, suppliers and customers all have about who, precisely, is managing the business and who has liability for potential losses?

Just as for limited liability, the grants of legal entity status, unlimited life, unlimited purposes and the ability to own subsidiaries are all substantial AND consequence-laden gifts from the state.

Show me a partnership that has any of these, without a grant from the state. Precisely because all of these matter, business people of all stripes clamor to incorporate (or to adopt a new, state-created limited partnership form that makes pass-through tax treatment possible).

4. Your long paragraph of the entity theory that “the state has foisted” on us has much I agree with. The state creation of corporations has do much to muddle who, exactly, is responsible for injuries to third parties caused by “the corporation”. In fact, this is one of my points about limited liability and other benefits that the state bestowed on individual investors – and you and Lew exhibited the same confusion yourself last year when you were stumbling over yourselves to feel sorry for BP’s shareholders, executives and employees:

Corporations uber Alles: Conveniently inconsistent on “abstractions” like “the environment”, Austrians overlook their preference for “corporations” over individuals,& their lack of interest in problem-solving – TT’s Lost in Tokyo

Getting rid of limited liability would do much to provide moral clarity, and to end not simply risk-shifting and purchase of government favor, but demands by citizens for preventative regulation by government.

5. I would note that, just as if deposit insurance were eliminated, market actors would step up to advise on which banks are safe and to provide deposit insurance, so too would insurers step up if limited liability were ended.

We are NOT talking about bringing down capitalism.

Thanks for the substantive engagement.



 I note my related earlier posts on deposit insurance and moral hazard:

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Bin Laden dead! Now, "If Only We Could Shoot Climate Change in the Face," too!

May 12th, 2011 No comments

Kate Sheppard’s pithy and wistful observation at Mother Jones on May 4, If Only We Could Shoot Climate Change in the Face, seems wryly correct:

Here are excerpts (emphasis added):

Might the death of Osama bin Laden give President Obama a chance to revive a climate and energy bill? That’s what former New Mexico Gov. Bill Richardson thinks. Via Politico:

“My hope is that from this success in the foreign policy arena two days ago, that he will be emboldened to take once again to the Congress legislation — not just to increase a renewable energy standard — but climate change legislation that this country and the world need,” Richardson said Tuesday at a Climate Leadership Gala hosted by the Earth Day Network in Washington.

It certainly is the case that the bin Laden’s death has put some wind in Obama’s sails. But I don’t think it’s enough wind to change the minds of a House majority that doesn’t even think that the climate is changing, let alone get them to support a bill to deal with it. Unfortunately, passing climate legislation isn’t an issue that American politicians are as unified on as they are about hunting down a terrorist mastermind.

Seems to me that Sheppard is on to something, but fails to really grasp it: citizens are rather easily stirred up by politicians for “defense” reasons to approve extremely costly and counter-productive policies, but not so easily stirred up for other reasons where the threat does not appear as tangible and where it is clear that someone’s ox will be “Gored” (pardon the pun; it fell into my lap here).

Further, the supposed hunt for OBL turned out to be a joyride into Iraq that a wide range of people believe was a failure, but to our defense industry (and  our connected political class) – which has received around a trillion dollars, with the meter still running – and to government itself, which greatly expanded its domestic reach, has been a smashing success.

Sheppard seems to concede that, for the sake of chasing OBL, this was somehow justifiable rather than a scam, and thus is unable to see the hypocrisy of those on the Right who supported the looting and expansion of government power while it benefitted the GOP and friends in the defense industry, but who moan about the “climate scam” because policies proposed will disadvantage their friends while benefitting firms that have politically supported the Left.

One hopes for more people and the left and right who can perceive the rent-seeking games inexorably involved with exercises of power by government. It is only by doing so that problems of collective action be productively and cooperatively addressed.

Radley Balko at Reason Magazine interviews Stewart Rhodes ex-Ron Paul staffer and founder of "Oath Keepers", a group trying to train military and police in the Bill of Rights

May 8th, 2011 No comments

I have earlier commented on the interesting Oath Keepers group. I hope everyone will take a good read through the entire interview of Stewart Rhodes by Radley Balko at Reason Magazine, and give their support to Rhodes, Oath Keepers and others trying to keep the military and police honest.

Here are the first few paragraphs that lead into the interview, and a few other portions of interest to me (emphasis mine)

When you run down the list of issues the Oath Keepers are worried about, it reads a lot like a bill of particulars from the American Civil Liberties Union. The Oath Keepers don’t like warrantless searches. They’re upset that the executive branch has claimed the power to classify American citizens as enemy combatants, detain them indefinitely, and try them before military tribunals. They worry that a large-scale terrorist attack similar to 9/11 could lead to the mass detention of Arabs or Muslims, just as Japanese Americans were detained during World War II. They worry about crackdowns on political speech, protest, and freedom of assembly. They are concerned about the Army 3rd Infantry’s 1st Brigade Combat Team, a military unit that is training to deploy domestically in response to terrorist attacks or other national emergencies. And yet the group is a frequent target of the left.

Oath Keepers was founded in 2009 by Stewart Rhodes, a Yale Law School graduate and a former staffer for Rep. Ron Paul (R-Texas). Rhodes, 44, considers himself a constitutionalist and a libertarian. His organization’s mission: to persuade America’s soldiers and cops to refuse to carry out orders that violate the Constitution. On its website, Oath Keepers lists 10 orders its members will always refuse, including commands to conduct warrantless searches, to disarm the public, blockade an American city, or do anything that infringes “on the right of the people to free speech, to peaceably assemble, and to petition their government for a redress of grievances.” According to Rhodes, the group has about 30,000 dues-paying members.

Unlike the ACLU, the Oath Keepers are staunch defenders of the Second Amendment. They worry about the forcible disarming of American citizens, as happened after Hurricane Katrina, and as they fear could happen again after another terrorist attack or major natural disaster. The Oath Keepers are also federalists, vowing to disobey orders that violate state sovereignty. Most of their members are conservative or libertarian. Some of them espouse conspiracy theories that doubt President Barack Obama’s citizenship or blame the federal government for the September 11 attacks.

These latter positions have drawn suspicion and, at times, outright contempt from liberal groups such as the Southern Poverty Law Center, which lumps Oath Keepers in with militias and hate groups. (The Oath Keepers also have been denounced by some prominent conservatives, including Bill O’Reilly and Michelle Malkin.) Last year Mother Jones accused the organization of promoting treason.

Senior Editor Radley Balko spoke with Stewart Rhodes about these criticisms and more in January.

reason: What is the purpose of Oath Keepers?

Stewart Rhodes: The mission of Oath Keepers is to persuade the guys with the guns not to violate the Constitution. I look at it as constitutional triage. I worked for a congressman; I’ve worked with judges. And it seems clear to me that judges and politicians don’t really care about our rights that the Constitution is supposed to protect. So I’m focusing on the guys with the guns, the ones who ultimately enforce the laws, on educating them about the Constitution. I think most of them are honorable people, but there’s an ethos, especially in the officer corps in the military, that focuses on following orders. It’s almost as if they’re taking the oath to uphold the Constitution to mean that you should categorically defer to the president. Now I think civilian authority is important, but if the president asks the military to do something that isn’t constitutional, their loyalty is to the Constitution, not the president. 

In the police context, some have the mistaken idea that you’re always to enforce the law—leave it up to the politicians, lawyers, and judges to figure out what’s right and what’s wrong after the fact. That’s not what the Founders intended, and that’s not what the Constitution calls for. So the point of Oath Keepers is to remind the military and law enforcement that they are supposed to be thinking about the Constitution, and especially the Bill of Rights, and they need to be thinking about the lawfulness of the orders they’re given. And they actually have a duty to refuse when it’s unlawful or violates fundamental human rights. The military has learned this overseas, with the Nuremberg trials, with My Lai, with Abu Ghraib. And they get training in the laws of war, so they know when to refuse unlawful orders in the context of a foreign battlefield. 

But cops get very little training in the Bill of Rights. And when the military is used domestically—as we saw with Katrina, and as we’re seeing more and more—they’re also now butting up against the rights of American citizens. They need to know what those rights are, and how they can be sure they don’t violate them. They’re not getting that training either. And I find that disturbing.  ….


reason: So are Oath Keepers encouraged to refuse to enforce federal drug laws? 

Rhodes: We try to focus on the sorts of issues that could fundamentally alter our constitutional system. So we’re focused right now on the big picture stuff, the sorts of orders that could lead to the imposition of martial law, for example. So that’s what our “Ten Orders We Will Not Obey” mostly address. But if a member asks, I’ll tell them point blank that the drug war is unconstitutional. Under the concept of enumerated powers, most criminal law should be left to the states. 

reason: Oath Keepers seems to be primarily focused on the federal government. But state and local governments are certainly capable of violating the Constitution. Do you think the 14th Amendment allows the federal government to intervene if, say, a local sheriff is violating the rights of the residents of his county? 

Rhodes: I don’t think it allows it; I think it compels it. But that’s not incompatible with the idea that the states should be left alone to make and enforce their own criminal laws. They should be free to do that. But if a state or local government isn’t respecting the Bill of Rights, then yes, the federal government should intervene and investigate. Take Sheriff Joe Arpaio in Arizona. I think he’s a terrible sheriff. And I think it’s really unfortunate that he’s held up as some kind of a hero in parts of the freedom community. He’s a constitutional disaster, a Bill of Rights disaster. So yes, in that case, you have a sheriff who’s violating due process and who’s violating the Eighth Amendment. There’s definitely a role for the federal government to come in and say no. …


reason: There’s one criticism of your group that’s similar to those directed at the Tea Parties. You’ve said that Bush was just as hostile to the Constitution as Obama has been, indeed that most of the worst executive power grabs began under Bush. So why did Oath Keepers spring up only after Obama took office?

Rhodes: I just hadn’t gotten the idea yet. I got the idea during the 2008 election campaign. I worked for Ron Paul during the primary, and when it became clear that he wasn’t going to get the nomination, I started to think about what I wanted to do next. And that’s when the idea came to me that I wanted to do something involving the military and the police. And that was no matter who became president. At the time we didn’t know if it would be McCain, Obama, or Hillary Clinton

But it’s true. All of this began or really started to get worse under Bush. That’s when you had this wave of unconstitutional federal power. In particular, I was worried about this claim that the president could detain American citizens as unlawful enemy combatants. A president who would make that claim assumes powers that could be used in so many other ways too. I wrote a paper on that issue while I was at Yale Law School, during the Bush administration, which actually won the Yale Prize for best paper on the Bill of Rights. I was an outspoken critic of Bush then. I had a blog at the time that was very critical of Bush and his assumption of unconstitutional powers. I called the neocons in the Bush administration “national security New Dealers.” They expanded the power of the federal government at least as much as the New Deal did, but they did it through the lens of national security. The warrantless spying was unconstitutional. The detention of José Padilla was unconstitutional. The detentions without trial were unconstitutional. Most of the new powers Bush claimed were unconstitutional. 

But now you have Obama, who has not only not renounced those powers but has expanded them. He also now claims the power to assassinate American citizens his administration deems enemy combatants with no oversight. That’s just frightening. 

At this point I do really wish I had started Oath Keepers during the Bush administration. It would have been a good test. My guess is that I’d have started with a lot of liberals joining up, and you’d have seen conservatives and neocons howling that I’m a traitor. I think it’s just human nature and the cycle of politics. When the left is in power, they forget about the Constitution because it limits what they can do. So they characterize people who stand by the Constitution as reactionary or dangerous. But when they were out of power, they were citing the Constitution all of the time.  …

reason: Do you have any leftists or left-libertarians in your membership? 

Rhodes: We have some, but they’re few and far between right now. I wish we had more. And I suspect that when we get a Republican president again, we’ll get more members who identify with the left. I do think more and more people are understanding that neither party has any fidelity to the Constitution, and you are starting to see some honest liberals and some honest conservatives who are more willing to criticize their own side while in power. I think you saw a lot of that in the Ron Paul campaign, where he ran on a platform that was very critical of his own party’s president. On the left, you’re seeing it now with people like Glenn Greenwald. I hope there’s more of that.  …


reason: Let’s talk about a conspiracy theory often batted around on the right that’s more aligned with your mission. Do you think the Obama administration is secretly planning to set up detention camps through the Federal Emergency Management Agency? 

Rhodes: Well, something like that has already happened. Look at the internment of Japanese Americans during World War II. That was done very quickly. All they had to do was string some wire up around old military barracks. So do I think there are detailed plans sitting in an office somewhere? I don’t know, but that really doesn’t matter. I’m concerned about the structures in place that could enable it to happen. So what I am concerned about is the creation of NORTHCOM, which for the first time in our history is a standing military command for the deployment of standing military troops domestically. That’s very dangerous.

And there is reason to worry about FEMA. From its start in the Reagan administration, FEMA was never just about emergency relief. It was about continuity of government, about governing during a disaster. The structures put in place by people like Cheney, Rumsfeld, and Oliver North during the Reagan administration, they contemplate the executive branch taking over all three branches of government during an emergency. I think that’s very dangerous. And we saw later the limitless power Cheney thought the executive should have to fight terrorism. FEMA has always been part of that. And you have things like Garden Plot, which are actual plans to impose martial law in the event of a civil disturbance. 

And remember that during the Bush years we saw prominent conservatives such as Michelle Malkin openly defend the internment of the Japanese Americans during World War II as being necessary—as though that would make it constitutional—with an eye toward doing the same thing with Muslim Americans. Malkin even wrote a book called In Defense of Internment.

So it isn’t really about whether President Obama has specific plans for that sort of thing. It’s about questioning the constitutionality of the structures in place that could allow it to happen, no matter who is president. And for us, it’s about making sure soldiers and police know that if they’re ever ordered to carry out something like the Japanese internment camps again, their duty is not to follow orders but to respect the constitutional rights of their fellow citizens.  ….


reason: The scenarios Oath Keepers are most worried about seem like those that are least likely to happen. If you’re worried about constitutional rights, wouldn’t you do more good to educate police officers about Bill of Rights violations like stop-and-frisk searches, SWAT raids for consensual drug crimes, civil asset forfeiture, and other ongoing, everyday abuses? 

Rhodes: You have to start somewhere. Certainly the long-term militarization of the police, which I know you’ve covered, is a disturbing problem. And I think the drug war in general has been destructive of freedom in America. One thing to remember is that the 10 orders Oath Keepers won’t follow isn’t a comprehensive list. There are countless possible unlawful orders I’d hope our members wouldn’t follow. But when I was thinking about starting Oath Keepers, I tried to think of what sorts of policies the Bush administration could implement that would do long-term, irreversible damage to the Constitution, and what orders officials would have to give to the military to implement them. So I think when we’re talking about where to start, you start with the most potentially damaging policies, things like internment camps, martial law, detaining American citizens without a trial.

It’s part strategy too. These are also the issues where I think it’s easiest to build a consensus. So we should start there. But the bigger idea is to get police and soldiers to at least start thinking about the Constitution, and that their first loyalty is to the Constitution and the rights of American citizens. Their first loyalty shouldn’t be to their commanding officer. It isn’t really about me coming down from the mountain with tablets inscribed with what orders you should and shouldn’t obey. But there some core principles, things that should never happen, and things that the government should know we will never allow to happen. 

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A guest post by investigative reporter & Three-Mile Island gadfly Bill Keisling on "The Fukushima Experiment"

April 7th, 2011 No comments

I’ve run across a very interesting post on problems with nuclear power and the “crony capitalist” nuclear power industry and government interface, by a veteran freelance Pennsylvania journalist/gadfly who started writing about ConEd’s Three-Mile Island facility well before it experienced its famous melt-down.

Bill Keisling is a dogged hunter of local corruption, a prolific author, blogger (at his website and videomaker (see, for example, his expose on how Pennsyvania college students were housed on a former Department if Defense nuclear watse sie).

Bill kindly gave me permission to cross-post his piece below, which I copy in its entirety.from his website, which I encourage readers to visit. I think his views provide very useful context.


 big wave at fukushima by mr. ok cola

The Fukushima Experiment

A nuclear meltdown survival guide

Japan’s Tepco utility executives and government officials are alternately accused of covering-up, withholding information, or downplaying the severity of their nuclear accident.

Truth is, as many of us nuclear meltdown veterans know, those utility executives and officials are as much in the dark as the rest of us.

If you live within two hundred miles of a nuclear power plant, consider this: If the plant suffers a meltdown, no one on earth will be able to tell you what to expect.

Welcome, then, to the Fukushima Experiment …


by Bill Keisling


Posted March 28, 2011 — The nuclear meltdowns at Japan’s Fukushima Daiichi atomic power plant reignited deeply personal memories for many of us in central Pennsylvania who lived through 1979’s Three Mile Island incident.

Some argue that the technological or natural causes of these two nuclear accidents differ greatly. Yet aspects of both are stunningly similar: both events caused world-wide hysteria and panic, followed by general condemnation of utility executives and government officials for their supposed mishandling or misunderstanding of the crisis.


The nuclear accident on Three Mile Island was a life-changing experience for me, and many others. In 1979 I was a young editor of a community magazine. I was actually the first writer/journalist to arrive at the gates of Three Mile Island the morning of the accident, on March 28, 1979. That morning I had both personal and professional reasons for being there.

The community newspaper I edited, Harrisburg Magazine, had, in the months leading up to the Three Mile Island accident, uncovered myriad problems at the nuclear power plant. We’d documented the willingness of state and federal regulators to look the other way so that the substandard and unsafe power plant could operate.

In August 1978 we even published a cover story detailing a possible disaster scenario involving these unresolved problems at the power plant titled, “Meltdown: Tomorrow’s Disaster at Three Mile Island.”

The owner of the power plant, Metropolitan Edison, was not amused. The electric utility responded by seeking a congressional investigation of our small magazine. Met-Ed almost ran us out of business.

Several months later, early on the morning of the accident, I got a call from a friend telling me that there was some sort of leak at the power plant and that a nuclear site emergency had been declared. I threw my camera and tape recorder into the car and drove the dozen or so miles to the gates of Three Mile Island.

There wasn’t much to see. To the naked eye, the two reactors and the four cooling towers sat placidly as ever on the island. From the gate nothing seemed particularly wrong, or out of place. A small amount of stream rose from two of the massive cooling towers.

The guards at the gate did their best to ignore me. I asked a guard what was going on but he brusquely refused to answer any questions. I pointed to a radiation monitor he wore on his jacket — a dosimeter — and asked what the instrument read.

“It doesn’t matter now,” he told me with a nervous break in his voice.

Shortly thereafter I was standing at the gate when scared nuclear workers began evacuating the plant. The guards hurriedly passed hand-held Geiger counters over each employee’s car, checking for radiation.

This, it turns out, wouldn’t be that much different from events at the gates of the Fukushima Daiichi nuclear power plant in March 2011. An American software engineer working at Fukushima witnessed terrified Japanese nuclear workers trying to escape by climbing over the nuclear plant’s fence following the earthquake.

As for myself, back in 1979, at the gates of Three Mile Island, my first impulse was to run. I later wrote about the moment in my novel, The Meltdown:

It made you think this wasn’t such a good place to hang out.

The main gate opened, the cars streamed out. They came one after another to the highway and turned right, wasting no time, tires spinning in the gravel. I heard one of the drivers say to another, ‘We’re all supposed to go to the substation down the road to be tested for contamination.’

Forty or fifty cars streamed from the plant, stopped momentarily to be swept by Geiger counters at the gate, then barreled up the road out of sight. All the while the cooling towers hung in the background.

Some sort of wild frightening premonition swept over me.

The idea came to me to put five hundred miles between me and this place. I turned and started back to my car. I only took two or three steps, then I stopped. Maybe I should call some friends, I thought. Let them know the reactor’s about to melt. It would be a kind, a thoughtful thing to do, a kindness I’d appreciate from a friend. But I wouldn’t be able to reach most of the people I knew.

At that moment I made a fateful decision that, for me, was life changing. I’d realized there was no place in the world to run from a nuclear accident. I couldn’t possibly warn all my friends and family. My life would be destroyed with the people and the town that I knew.

So sorry: American and Japanese utility executives employ different approaches to breaking bad nuclear news. Met-Ed’s Jack Herbein wagged his finger and told us to Talk to the Hand in 1979; Tepco execs offered deep bows (bottom). Herbein photo by Bill Keisling.

I turned to face the power plant, and planted my foot firmly in its path. I decided at that moment to understand what was happening, and to try to understand why it happened.

In the ensuing minutes, hours, and days, I saw it all, much of it first hand.

I followed the procession of cars evacuating the power plant gates to a nearby observation center. There I listened, watched, and interviewed scared workers. Things I saw that morning forever burn my memory.

One middle-aged nuclear worker sat nervously inside the touristy observation center waiting to be screened for radiation contamination. His hands shook violently and uncontrollably. He held his hands out in front of himself and watched them shake. He stared at his own shaking hands as if they were someone else’s hands, and not his own.

It was bedlam all around us at the observation center. Rad-suited crews swept the grounds for radiation leaks. One hyper worker knocked through the pandemonium gasping, “There’s been a mix up somewhere here!”

Helicopters carrying out-of-town newsmen and cameramen spun down from the sky. By the minute, before my eyes, it grew into an international incident.

Before long a helicopter carrying a utility executive landed on the lawn of the observation center. Jack Herbein, Met-Ed’s vice president for generation, convened an impromptu news conference on the back lawn.

Jack Herbein was normally a polished and controlled utility executive. That day he memorably told the television cameras that everything was “under control.”

“There’s nothing to worry about,” Herbein told us. “Just a little water spilt on the floor.”

We followed Herbein inside the observation center. I yelled over the din at him, inquiring whether this was a nuclear core meltdown.

Herbein looked straight at me, but didn’t answer. His eyes betrayed shock, and fright. He turned and hurried back to his helicopter and choppered away.

Within days, Met-Ed’s Jack Herbein would find himself at ground zero of an international uproar.

The accident just wouldn’t go away. Utility executives and government officials tried their best to play things down. Then, a few hours later, more wrenching bad news would leak from the power plant.

The reactor’s 150-plus tons of nuclear fuel might be melting. The governor ordered an evacuation of children and pregnant women. A potentially explosive hydrogen bubble was detected in the reactor. Things clearly weren’t “under control.”

TMI Jack Herbein by Bill Keisling

Met-Ed’s Jack Herbein stands on milk box to scold world press: ‘I don’t know why we need to tell you every little thing that we do!’ Tepco execs in 2011 offer still more apologetic deep bows to evacuees. Jack Herbein photo by Bill Keisling. Click photo or here to enlarge.

Four days after the initial accident on Three Mile Island, on Saturday, March 31, 1979, at a press conference in nearby Middletown, wearing the same rumpled suit he’d been in for days, an exhausted Jack Herbein of Med-Ed stood on a milk carton to boost himself above a mountain of microphones to bray at the immense polyglot mob of the world’s news media, “I don’t know why we need to tell you each and every little thing that we do!”

That one moment of frustrated pique cost Met-Ed, and Jack Herbein, all public sympathy.

But was Jack Herbein covering up, or was he simply as much in the dark as the rest of us?


More than three decades later it’s deja vu all over again, but this time fighting the dark are executives with the Tokyo Electric Power Co., operators of Japan’s runaway nuclear reactors at the Fukushima Daiichi nuclear power plant.

Tepco utility executives are alternately accused of covering-up, withholding information, or downplaying the severity of their nuclear accident.

Truth is, as many of us nuclear accident veterans know, those utility executives are as much in the dark as the rest of us.

Lessons from Three Mile Island in 1979 go a long way to explain what’s happening in 2011 in Japan.

In the years following the Three Mile Island accident much was learned about what the utility did, and did not know at the time of the 1979 reactor meltdown in Pennsylvania.

It became painfully obvious that the control room operators, the utility executives, and the government overseers of Three Mile Island simply did not know at the time what was happening inside their damaged nuclear reactor core.

Why they did not know is really the heart of the matter, and the thing we should consider.

In the event of a runaway nuclear reactor (politely called a “power excursion” by the industry), Tepco executives in Japan, like their counterparts in Pennsylvania, don’t have the foggiest idea what may happen when their reactors melt.

If you live within two hundred miles of a nuclear power plant, consider this: If the plant suffers a meltdown, no one on earth will be able to tell you what to expect.

Having spent decades looking into all this, I thought I might save those interested in researching the Fukushima nuclear disaster valuable time and trouble by providing a short list of the most important points I’ve learned about nuclear power accidents.

Decades of research can be boiled down to a few key observations or rules that until now I’ve kept in the back of my head.

I here offer my list as a time-saving primer to others:

Rule 1:

Commercial atomic energy technology is a pseudo-science and is not based on proper scientific experimentation.

As we recently witnessed during the multiple nuclear accidents at the Fukushima nuclear power plant, a damaged reactor (or reactors) often has broken controls, computers systems, and gauges that make monitoring a runaway nuclear reaction difficult, if not impossible.

Confusion and fright in the control room(s) at the time of emergency create what can almost be called A Fog of War. Indeed, war it is. They’re at war with a runaway nuclear reactor.

At Fukushima, as on Three Mile Island, operators wished they could simply peer into the containment building with their own eyes and dispense with the broken alarms, computers and gauges that tell them nothing, and often mislead them.

‘The nuclear power industry naturally doesn’t think very much of troublesome nitwits like Galileo, Francis Bacon, René Descartes, Isaac Newton, and their ridiculous, old-fashioned ideas about experimentation, reproducible results, and scientific method.’

But that’s only a small part of the problem. Truth is, no one really understands the behavior of tons of melted nuclear fuel in a reactor.

For a variety of reasons, the commercial nuclear power industry and its government regulators never conducted a single experimental meltdown of a full-size nuclear reactor.

So, until one melts, no one knows how a runaway reactor will behave.

As most of us remember from high school, scientific knowledge has advanced over the centuries because of what’s called the Scientific Method.

The Oxford English Dictionary defines the Scientific Method as “a method of procedure that has characterized natural science since the 17th century, consisting in systematic observation, measurement, and experiment, and the formulation, testing, and modification of hypotheses.”

In simple words, real-world experiments must be designed to test a hypothesis, and results must be reproducible.

As we know, cars and planes are rigorously tested and crashed all the time, in all manner of ways, in all sorts of conditions. That’s how designers and regulators learn how these complicated machines behave in real-world accidents, and whether they’re safe.

Not so nuclear reactors. For a variety of reasons, including half a century of financial and political considerations, regulators in the United States side-stepped or outright ignored the issue of full-scale reactor safety testing, and continue to ignore it to this day.

This inescapable and troubling fact is entwined with the history of atomic power regulation in the United States. In brief, here’s the story, with footnotes and references for those who want to follow along at home:

After the war with Japan ended in 1945 with the dropping of atomic bombs in Hiroshima and Nagasaki, the US found itself the world’s sole possessor of the secrets of atomic energy.

To take these secrets from the hands of the military and deliver them to the civilian population, the United States Congress passed the Atomic Energy Act of 1946. This legislation forbade any entity but the US Government from creating atomic energy, and disallowed international cooperation involving any atomic secrets. To oversee the peacetime atom, the Atomic Energy Commission (AEC) was created, and Harry Truman appointed five commissioners. A statute of Congress created the Joint Committee on Atomic Energy on August 2, 1946. This joint committee would police the AEC, and authorize all appropriations to the commission. 1

The EBR-I experimental reactor in Idaho was the scene of both the first atomic generation of electric power and an early reactor meltdown.

History was made almost five years later. Four, 200-watt light bulbs began to glow when 12 control rods were lifted away at the Experimental Breeder Reactor Number One (EBR-I) in Idaho Falls, Idaho. Sixteen technicians signed their names on a wall there, beneath this notation: “Electricity Was First Generated Here From Atomic Energy on December 20, 1951.” EBR-I seemed all the more remarkable because it was a breeder reactor and, it was said, could safely produce more fuel than it burned. 2

Mamie Eisenhower christened the Nautilus, the world’s first nuclear powered submarine, on January 21, 1954. The public loved it. Still, many Americans were anxious to give private industry an opportunity to split atoms. The Atomic Energy Commission was seen as an island of socialism in the sea of free enterprise.

Dwight Eisenhower signed the Atomic Energy Act of 1954 on August 30 of that year. The “Atoms for Peace” program was launched. Private enterprise could now exploit nuclear power, the AEC would begin to award contracts to businesses, and the poor nations of the world were promised atomic power. 3

The bubble burst in November of 1955. The tiny EBR-I reactor had been experiencing power fluctuations and, while trying to discover the cause of the problem, technicians attempted to bring the core to within a few degrees of melting temperature. At half power, fuel rods holding the Uranium-235 fuel began to bow inward, increasing the core’s reactivity. A “power excursion” occurred, and the reactor began to run away, its gauges climbing off scale. With a split second to spare, a technician commanded a “blanket” of U-238 bricks surrounding the fuel rods to drop away, stopping the power excursion.

An explosion was barely avoided, but the core, capable of producing 1.4 megawatts of heat output, had melted. 4

‘Lloyds of London would not write a policy protecting a nuclear power plant’

Insurance companies, which had been trying to assess the feasibility of insuring commercial reactors, were more squeamish than ever. Utilities considering building nuclear power stations discovered their investments could not be insured. Lloyds of London, known for taking risks on just about anything, would not write a policy protecting a nuclear power plant. Insurance companies throughout America began writing nuclear exclusion clauses into homeowners’ policies, preventing insurance payments for any nuclear related loss. The entire insurance industry pooled together would provide no more than $65 million worth of coverage for a nuclear power plant. 5

Hoping to win the insurance industry’s confidence, the Joint Committee on Atomic Energy authorized the AEC and the Brookhaven National Laboratory to prepare a study on the effects of a major accident at a 100- to 200-megawatt electrical output reactor.

In March 1957, the study, entitled “Theoretical Possibilities and Consequences of Major Accidents in Large Nuclear Power Plants,” Or WASH-740, was released. WASH-740 did not make the insurers rest easier. The Brookhaven laboratory estimated that in the event of a worst possible accident, 3,400 people would die, 43,000 would be injured and seven billion dollars worth of damage would be done. Commercial nuclear power production was now at a standstill. 6

Because the private insurance wasn’t enough, the utilities now settled for a bit of socialism. Senator Clinton Anderson and Congressman Melvin Price introduced legislation that provided for $495 million worth of government coverage — an arbitrarily arrived at amount — in addition to the $65 million private insurance pool. The Price-Anderson Amendment to the 1954 Atomic Energy Act became law in September 1957. The last hurdle apparently out of the way, private industry was, again, off and running to create fission energy. 7

In Pennsylvania, Metropolitan Edison and its fellow utilities of the General Public Utilities Corporation, along with the Pennsylvania State University and Rutgers University, created the Saxton Nuclear Experimental Corporation. The AEC approved a construction permit for a 20-megawatt thermally rated reactor in Saxton, Pennsylvania, in 1959. 8

The SL-1 experimental reactor being lifted from its containment building following its deadly 1961 accident.

But tragedy visited another experimental reactor on January 3, 1961. At about nine in the evening, three technicians were performing a maintenance operation on the SL-1 reactor in Idaho Falls, Idaho. The SL-1 was one of 17 test reactors scattered across 892 square miles of Idaho desert at the AEC’s National Reactor Testing Station. The tiny SL-1 was meant to produce electricity for about a dozen homes in arctic military bases. For some time the reactor’s nine control rods had been acting up, as had other reactor functions.

The SL-1 had been shutdown for about a week in expectation of major repair work, its control rods pushed firmly down and disconnected from the mechanical control rod drive. The number nine control rod was the most important. It was the only rod that could start the chain reaction when lifted away. To ensure that the cadmium control rods would not stick or jam, technicians had been “exercising” them, lifting them a few inches, then returning them. That night three technicians were standing on top of the reactor, reconnecting the control rods to the mechanical drive. The number nine control rod had to be lifted four inches by hand to be connected to the machinery.

During this operation the rod was lifted too far. In a fraction of a second the reactor became critical, a power excursion followed, and an estimated 1,500,000,000,000,000,000 atoms split.

By the time help arrived, one man was found dead. A second technician was rushed outside, but was so radiated that he had to be examined by a doctor wearing protective clothing. The second man quickly died. The third technician was found dead on the ceiling of the reactor building. A piece of control rod was jammed through his groin, pinning his corpse to the ceiling at the shoulder.

For twenty days, the bodies were packed in water, alcohol and ice, while scientists tried to cleanse the dead tissues of uranium. Finally the men were buried, but their heads and hands had to be removed and buried with other nuclear wastes. 9

‘A third technician was found on the ceiling of the reactor building. A piece of control rod was jammed through his groin, pinning his corpse to the ceiling at the shoulder.’

The Atomic Energy Commission reached another crossroad in 1964, when construction permits for the first big, pressurized and boiling water reactors were granted. A utility could make an appreciable profit on its investment when smaller reactor designs were made larger, taking advantage of economies of scale. Pressurized water reactors rated at thousands of megawatts of heat output would soon be operating.

To estimate the damage of a serious accident at a large commercial reactor, the Joint Committee on Atomic Energy authorized the AEC and the Brookhaven laboratory to update the 1957 WASH-740. The results were shocking.

Instead of 3,400 deaths, there would be 27,000; instead of 43,000 injuries, there would be 73,000; instead of $7 billion worth of damage, a “worst possible accident” at a new pressurized or boiling water reactor would cause $17 billion in damages. To make matters much worse, Brookhaven statisticians determined that an evacuation would make no appreciable difference in the number of people killed.

The study indicated that a landmass the size of the Commonwealth of Pennsylvania could be rendered uninhabitable; that is, if the reactor were to be built, say, in central Pennsylvania.

Fearing this updated WASH-740 report would create an outcry at a very sensitive time, the AEC withheld this report from the public. 10

A draft of the updated WASH-740 report would not be released until June 1973, after both the Three Mile Island and Fukushima nuclear power plants were designed, considered for licensing, or built.

About the same time the WASH-740 update was being prepared, an “internal report” of the National Reactor Testing Station was also being drafted. This report called for a six-year minimum, intensive testing program to be conducted with the large reactors.

The NRTS report recommended that full-scale destructive testing be included in these reactor tests. The 1964-65 report was not released to the public until 1974; its findings too were ignored by the AEC.

The BORAX-1 experimental reactor seen undergoing a power excursion. When it finally blew up, scientists pointed out ‘uncertainties of extrapolation.’

Power excursion testing previously had been conducted inside tiny reactors. The BORAX-1 test reactor was only 1/500th the size of the larger, commercial reactors approved after 1964. By pulling the control rods of the BORAX-1, power excursions were created, and water was vigorously expelled from the coolant system, causing the reactor to shut down. But when an excursion test designed to melt the core was conducted in 1954, a “somewhat unexpected” steam explosion occurred, destroying the reactor and tossing a one-ton piece of equipment 30 feet into the air. 11

The Argonne National Laboratory reports that BORAX-1 “was deliberately destroyed in July 1954. Fuel plate fragments were scattered for a distance of 200-300 feet… The final test revealed that the predictions of total energy and fuel plate temperatures had been considerably too low. Instead of the melting of a few fuel plates, the test melted a major fraction of the entire core. The discrepancy was attributed to the uncertainties of extrapolation. The results of this energy liberation in the way of peak pressures and explosive violence lie in a region where there had been no previous experimental data.”

In other words, you can’t predict how a big reactor may behave from experiments conducted with much less fuel in a smaller reactor.

‘The National Reactor Testing Station report recommended that full-scale destructive testing be included in reactor tests.

The 1964-65 report was not released to the public until 1974; its findings were ignored by the AEC.’

Additional power excursion tests were conducted in the early 1960s on the Special Power Excursion Reactor Test, or SPERT-1 test reactor. In his book Nuclear Power: Both Sides, physicist Michio Kaku writes, “In some of the experiments we ran on the SPERT reactor we deliberately withdrew the control rods rapidly from the core. Without the control rods to absorb and regulate the neutrons from the fission process, the chain reaction would spin quickly out of control, and power levels would rise from zero to 30,000 megawatts (30 billion watts) in less than one-hundreth of a second. The cooling water would boil furiously, causing a steam explosion. On one occasion in 1962 I had the dubious distinction of deliberately blowing up the SPERT-1 reactor.” 12

The AEC officially reported that the SPERT-1’s core failed to explode during the “severest test that could be performed,” but the AEC did not mention that the SPERT-1 had faulty fuel rods, which terminated the power excursion by expelling fuel powder and coolant. No SPERT-1 power excursion test was then conducted with corrected fuel rods.

Both the BORAX-1 and the SPERT-1 test reactors, moreover, had several design differences from the larger, commercial reactors. When test reactors were built with a similar design to the larger reactors, power excursion experiments that could damage the fuel were deliberately avoided.

Instead, the AEC relied on calculations. “Design basis accidents,” and “worse possible accidents” were computed, but never verified by proper, scientific experimentation.

The AEC assumed sophisticated, though unverified, reactor theory to be fact. One reason for relying on these unproven calculations was that it was much less expensive over the short-run to do so than destroying a commercial size reactor, which could cost hundreds of million dollars, if not more.

Another reason for this unorthodox “un-scientific method” was that power excursion testing with reactors containing 100 tons or more of uranium could have serious environmental consequences.

So the nuclear industry continued to bank on the unproven hypothesis that a large, commercial reactor could be operated with little or no danger of explosion. 13

This deliberate blunder was one of the great scientific errors of twentieth century technology.

In contrast, Albert Einstein’s theories of relativity, the foundation of modern atomic science, continue to be subjected to painstaking experimentation. 14

Still, a good bit of the scientific laziness, lack of curiosity, and outright intellectual dishonesty of the nuclear regulators simply was a ruse to protect the finances of the nuclear industry.

As we see, the illusion of reactor safety and nuclear finances go hand-in-hand. Real-world experimental data which undermines the perceived safety of nuclear power plants is a threat to the insurability, and thus the financial viability, of the power plants. So over the decades real-world experiments that would impeach the safety of nuclear plants simply were never performed, were suppressed, or were played down by nuclear regulators.

Some blamed the problem on the mission and culture of the Atomic Energy Commission to both regulate and promote atomic energy.

Supposedly addressing this problem, Congress passed the Energy Reorganization Act of 1974, which abolished the Atomic Energy Commission. The AEC was replaced by the Nuclear Regulatory Commission (NRC), and the Energy Research and Development Administration (ERDA). The NRC now would supposedly only regulate, while ERDA would promote nuclear energy, especially reactor development.

Yet, in the decades ahead, the NRC would continue to avoid full-scale experimental reactor meltdown tests in favor of costly computer models, fantasy reports, and ivory tower academic studies. There would be Bull Shit, More bull Shit, and bullshit Piled Higher and Deeper (in scientific and academic parlance, BS, MS, and PhD).

Nuclear reactor safety study became a colossal thought experiment. Reactor safely would exist only in the minds of their creators, and not in the real world, supported by reliable, controlled and reproducible scientific data.

Heaven and earth: Inside Fukushima’s Unit 2 control room in late March 2011, where events dismissed by the nuclear industry as ‘highly unlikely’ are an every day real-world nightmare for struggling operators and citizens.

Over the decades (and to this day) the NRC and the nuclear industry continued to cook up their own imaginary projections, involving narrowly defined “likely scenarios” and “analyses” devised by industry cheerleaders wearing tin-foil hats. These fairy tales are then supposedly bolstered with equally imaginary computer models.

In the 1970s, the NRC commissioned, for example, the infamous Rasmussen Report, or WASH-1400, as a follow-up to the discredited and suppressed WASH-740 reports.

The Rasmussen Report, also called “The Reactor Safety Study,” was soon also widely discredited within the scientific community. A subsequent review by the NRC conducted by Professor Harold Lewis of the University of California concluded that, “the uncertainties in WASH-1400’s estimates of the probabilities of severe accidents were in general, greatly understated.”

This led to other imaginary and sugar-coated Candyland reactor safety “studies,” including 1982’s CRAC-II, and 1991’s NUREG-1150.

“CRAC-II is both a computer code (titled Calculation of Reactor Accident Consequences) and the 1982 report of the simulation results performed by Sandia National Laboratories for the Nuclear Regulatory Commission. The report is sometimes referred to as the CRAC-II report because it is the computer program used in the calculations,” Wikipedia relates.

“The CRAC-II simulations calculated the possible consequences of a worst-case accident under worst-case conditions (a so-called “class-9 accident”) for a number of different U.S. nuclear power plants. In the Sandia Siting Study, the Indian Point (NY) Energy Center was calculated to have the largest possible consequences for an SST1 (spectrum of source terms) release, with estimated maximum possible casualty numbers of around 50,000 deaths, 150,000 injuries, and property damage of $274 Billion to $314 Billion (based on figures at the time of the report in 1982)…. CRAC-II has been declared to be obsolete and will be replaced by the State-of-the-Art Reactor Consequence Analyses study.”

The NRC itself would later discredit and issue a disclaimer of both the CRAC and NUREG “studies.” The NRC disclaimer of CRAC-II and NUREG-1150 reads as follows:

‘The U.S. Nuclear Regulatory Commission has devoted considerable research resources, both in the past and currently, to evaluating accidents and the possible public consequences of severe reactor accidents. The NRC’s most recent studies have confirmed that early research into the topic led to extremely conservative consequence analyses that generate invalid results for attempting to quantify the possible effects of very unlikely severe accidents. In particular, these previous studies did not reflect current plant design, operation, accident management strategies or security enhancements. They often used unnecessarily conservative estimates or assumptions concerning possible damage to the reactor core, the possible radioactive contamination that could be released, and possible failures of the reactor vessel and containment buildings. These previous studies also failed to realistically model the effect of emergency preparedness. The NRC staff is currently pursuing a new, state-of-the-art assessment of possible severe accidents and their consequences.”

In other words, after spending tens of millions of dollars in wasted resources to produce sham results, the NRC bureaucracy naturally resolved to spend tens of millions of more dollars to produce even more imaginary and far-fetched sham results. How reliable are these computer models?

In a timely article in the March 28, 2011 New York Times, John H. Broder, Matthew Walk and Tom Zeller point out, “American nuclear safety regulators, using a complex mathematical technique, determined that the simultaneous failure of both emergency shutdown systems to prevent a core meltdown was so unlikely that it would happen once every 17,000 years. It happened twice in four days at a pair of nuclear reactors in southern New Jersey.”

One imagines such a computer model in 2005 also setting the odds as “slim to none” of a black politician with a middle name of “Hussein” being elected president of the United States. The point is, the history of the world is filled with long shots with slim chances of overturning established norms. That in fact is what history is all about.

The NRC’s ‘State-Of-The-Art Reactor Consequence Analyses,’ or SOARCA, doesn’t even consider the consequences of accidents involving spent nuclear fuel pools, like those presumed to be now burning in Fukushima.

As mentioned, the NRC’s current search for a “state-of-the-art” study is called, appropriately enough, “State-Of-The-Art Reactor Consequence Analyses,” or SOARCA. (Not to be confused, gentle reader, with SCROTUM, which, in nuclear parlance, refers to the biological equipment by which operators are held by runaway reactors.)

NRC’s SOARCA website proclaims, “The project uses computer models and simulation tools to conduct in-depth analysis of two operating nuclear power plants, a boiling-water reactor and a pressurized-water reactor,” the types found in Fukushima and on Three Mile Island, respectively.

The SOARCA study further claims to consider “the highly unlikely event of a severe reactor accident.”

But, as Hamlet tells Horatio, “There are more things in heaven and earth than are dreamt of in your philosophy.”

SOARCA, it should go without saying, does not contemplate actual severe, real-world environmental catastrophes like the 9.0 earthquake and tsunami which unexpectedly destroyed multiple reactors and spent fuel pools at Fukushima, or myriad other events which the NRC considers “highly unlikely.”

The NRC’s SOARCA website further explains that the study does not take into account such events as “terrorist acts.” Nor, it goes without saying, does SOARCA consider what happens in the event of war, when one or more of the world’s 400-plus atomic reactors is damaged by combatants, leaving undisciplined Third World operators struggling to control a runaway reactor(s) and spent fuel pools.

Moreover, the SOARCA “study” doesn’t even consider the consequences of accidents involving spent nuclear fuel rod pools, like those now burning in Fukushima.

The NRC’s SOARCA FAQ page states:

Are accidents at spent fuel pools considered in this study?

No. The project focuses on evaluating the very unlikely severe accident scenarios that may occur at operating power reactors and, as such, it does not consider spent fuel pools.

Of course, on the real planet earth, and not the fantasy Game Boy simulations of the nuclear industry, if you are unlucky enough to work as a nuclear control room operator when a fire breaks out in one or more spent fuel pools, as it did in Fukushima, spewing highly radioactive smoke and throwing explosive debris several hundred feet into the air, thus preventing you from controlling your already damaged nuclear reactor(s), you’ve got a problem on your hands not considered by SOARCA. Then again, in the “highly unlikely” event that your reactor(s) blow up, spewing highly radioactive steam and throwing explosive debris several hundred feet into the air, thus preventing you from putting out a fire in your spent fuel pool(s), you’ve got an altogether different “highly unlikely” event(s) on your hands, Pilgrim.

What, me worry? NRC inspectors reported that ‘At times during various shifts, in particular the 11:00 pm to 7:00 am shift, one or more of the Peach Bottom (Pennsylvania) operations control room staff (including licensed operators, senior licensed operators and shift supervision) have for at least the past few months periodically slept or have been otherwise inattentive to licensed duties.’

That’s when, as we see in Fukushima, your SCROTUM is in serious danger, and, like those eminently professional and enlightened nuclear workers seen scaling the fence to escape Fukushima, you better, in nuclear terminology, SCRAM the reactor(s).

If, however, you cannot SCRAM fast enough, you should then consider the time-honored emergency inventory and communications procedure known in nuclear circles as KYSAG, or Kiss Your Sweet Ass Goodbye.

(I realize these terms are complicated and technical to the lay reader, but obtuse technical jargon is important to the nuclear industry.)

Or, if you’d prefer, like the supremely calm, collected, and laid-back control room operators at various American nuclear power plants, you can avoid much of the unnecessary stress of these “highly unlikely” events by simply going to sleep in the control room every night.

One man’s nuclear nightmare, after all, is just another man’s sweet dream, baby.

Which brings us to the next rule.

Rule 2:

Commercial atomic energy is based on voodoo economics.

With the vexing realities of nuclear industry finances, insurance, and what to do with thousands of tons of highly radioactive spent fuel rods, atomic reactor pseudo-science merrily intersects with the voodoo economics of the nuclear industry.

Because spent nuclear fuel must be safety stored for tens of thousands of years, no one can agree where to put it, or how to pay for the storage, and so the spent reactor fuel piles up at nuclear power plants in the U.S. and around the world.

The NRC and the nuclear industry wisely choose to simply ignore this nettlesome problem. Hey, if you can’t solve it, why talk about it?


Call it “highly unlikely,” and move on.

Also in the category of nuclear voodoo economics are the shrewd nuclear industry investors who wisely refuse to themselves finance or insure new nuke plants, and instead insist that taxpayers pick up the tab. President Barack Obama, in fact, has promised the nuclear industry $36 billion for this very purpose in 2011.

These nuclear industry subsidies have been harshly criticized for decades. The bottom line is this: if it came down to risking their own money, nuclear investors would have nothing to do with nuclear reactor technology.

At Three Mile Island Unit One’s licensing hearing way back in November 7, 1973, for instance, Pennsylvania Insurance Commissioner Herbert Denenberg testified about the $560 million ceiling on insurance payments as mandated by the Price-Anderson Act.

“The plant owners will undoubtedly deny that this capping of benefits and liability represents any real material value to them, or conversely, any real cost to the public,” he said.

“They will point proudly to the fact that no member of the public — as opposed to workers in or associated with the activity of the industry — has been killed, and no catastrophic accidents have occurred, in 17 years of experience with nuclear reactors.

“And they will assert that on the basis of this safety record and their continuing zeal to make reactors uncommonly safe, the public would be foolish to worry about the financial consequences of an accident costing more than $560 million or, for that matter, any major accident at all.

‘If pressed, they will admit that a catastrophic accident is both conceivable and possible.

It will be the general public who must bear the cost.’

“All these arguments by the utilities are irrelevant, of course. The utilities do not take their own assurances about safety seriously enough to place their corporate necks on the line by renouncing their exemption from liability for a catastrophic accident, and in fact, they insist on the continuance of this exemption as a condition of their operating nuclear plants.

“If pressed, they will admit that a catastrophic accident is both conceivable and possible. And if such an accident occurs, the fact is that it will be the general public — and not the utilities and the reactor manufacturers — who must bear the cost.”

So let’s all learn a valuable lesson from the shrewd nuclear investor, and let’s be realistic here: endangering millions of lives; permanently polluting hundreds of square miles with uranium fission by-products; squandering billions of dollars of good money after bad: honestly, what else is government for?

These shrewd investors know that the true life-cycle costs of nuclear plants make them economically unviable.

Which brings us to Rule 3.

Rule 3:         

Be thankful the nuclear power industry is doing its level best to destroy the nuclear power industry. These guys are pros at it.

If nuclear industry executives are not scientists, and if they are not economists, what exactly are they?

Would I lie to you, sugar?

They are public relations and lobbying professionals, bullshit artists and bologna merchants, and, thankfully, highly incompetent ones at that.

Rest assured, the nuclear power industry is doing its level best to destroy the commercial nuclear power industry, and nobody does this better than they do.

Over the decades, the nuclear power industry has built a proven track record for ceaselessly working to destroy itself, without the help of a single anti-nuclear activist.

Rule 4:        

You are the experiment: In the event of a nuclear meltdown, use the opportunity to point out that this catastrophe once again proves the inherent safety of atomic energy.

As I’ve previously noted, the nuclear power industry naturally doesn’t think very much of troublesome nitwits like Galileo, Francis Bacon, René Descartes, Isaac Newton, and their ridiculous, old-fashioned ideas about experimentation, reproducible results, and scientific method.

Which is not to say that scientific data from real-world, full-scale nuclear meltdowns are not being collected.

Mountains of data — some useful, much of it not — have been, and will continue to be, amassed from the nuclear accidents at Three Mile Island, Chernobyl and, now, Fukushima.

The Three Mile Island Experiment: graphic of Unit 2 reactor core damage.

Some five years after the meltdown on Three Mile Island, the damaged Unit 2 reactor was finally cool and clean enough to be popped open, like a festive foie gras in a dead Christmas goose.

Giddy industry representatives got to peer inside, like kids who can’t wait for Christmas, and who wonder what Santa brought.

Much to the surprise and delight of the nuclear industry, half the 150-ton core at Three Mile Island was found to have melted before solidifying into radioactive rubble at the bottom the reactor vessel.

And you probably thought that 150 tons of 5,000 degree F. molten uranium might melt through the stainless steel reactor vessel, burn through the concrete floor of the containment building, and give someone a hot foot on the other side of the planet, didn’t you? (This does however beg the question of whether, in China, the uninformed talk about The Pittsburgh Syndrome.)

The well-paid nuclear industry spin doctors wasted no time, of course, pointing out that this embarrassing melted pile of rubble inside TMI’s Unit 2 reactor was “proof” that nuclear plants are safe.

The scientific problem with using data from these real-world accidents — aside from the ethical problem of using uninformed humans in their homes as guinea pigs — is that these “results” are irreproducible, and therefore unscientific.

We’ll never know, for example, precisely how much coolant water was dumped on the damaged Fukushima reactors and spent fuel pools, and in what controlled circumstances, before and after the terrified reactor operators ran for their lives, and tried to jump over the fence, and so on.

In other words, more bad science.

Perhaps we can one day prove conclusively that large, commercial nuclear reactors will not melt down, but merely fizzle and pop for an extended period of time, as did Unit Two on Three Mile Island. Nevertheless, this is not the sort of knowledge we should acquire from experiments conducted with innocent victims in their backyards.

Speaking of ignorant fools, we now come to Rule 5.

Rule 5:

They’re building a better model fool every year.

The ancient Greeks had a single word for all this. It’s a word for what they believed was the greatest of all human follies: hubris.

Hubris, as we use the word today, implies mere arrogance or pride. But to ancient Greeks, hubris was a legal term and, some say, the greatest single crime one could commit in the ancient Greek world, not unlike our own treason or, in religious societies, blasphemy.

In Greek tragedy, a protagonist who acted with hubris foolishly ignored human limitations and challenged the gods and their rules, inviting ruin and retribution at the hands of vengeful gods like Nemesis.

Agamemnon, for one example, was tempted by ruin with the suggestion that he walk on a divine tapestry.

In other words, as the ancients and Charlie Murphy warn us, keep your dirty feet off God’s white leather sofa, unless you want to get your ass kicked.

That it’s sinkable is unthinkable: Like the White Star Line’s Titanic, the Zeppelin company’s promotions prominently boasted that no passenger had ever been injured on one of their airships.

The oceans and junk yards of the world are littered with Titanics, Hindenburgs, Unit 2 reactors, and the scrap of other infallible machines that their creators boasted could not sink, melt, fall from the sky, or otherwise fail.

To get around this historical fact, nuclear engineers are fond of saying that their machines, in fact, are perfect: it’s the human element, the foolish human operator, they’ll tell you, that’s at fault.

The nuclear industry today boasts that it can, in fact, without any proper scientific experimentation at all, produce a fool-proof machine!

Trouble is, those fools are so damned crafty.

And, as one nuclear regulator worrisomely intimated to me recently, “They’re building a better model fool every year.”

Whether the nuclear industry can successfully build a better fool-proof machine to keep up with this year’s better model fool is any fool’s guess.

Fools have been around a long time, and I’m betting on the fool. Hell, in the United States of America fools control not just one, but two political parties, both houses of Congress, and the judiciary.

So let’s be brutally realistic here. You can’t underestimate the fool.

Even the smart money’s betting on the fool. Why do you think nuclear investors don’t want to risk their own damn money? They’re not fools.

I defer to that celebrated nuclear combat veteran, philosopher, action figure, and low-fat hamburger grill marketer, Mr. T:

I pity the fool.

But it would be foolish of us to blame everything on the fool in the nuclear control room.

Contrary to nuclear industry spin, foolish control room operators were not at fault for the Three Mile Island meltdown. Foolish regulators cooperated with foolish utility executives to operate a foolishly complex, leaking nuclear reactor with faulty components and miscalibrated controls that badly confused the already foolish control room operators.

Which brings us to Rule 6.

Rule 6:

People don’t like or understand atomic energy:
E=MC2 is not a recipe for comfort food

More than 30 years later, my thoughts keep returning to the nuclear worker from Three Mile Island whose hands I watched shake uncontrollably on the morning of the meltdown.

Make no mistake, those control operators were scared. But the nuclear worker I watched that day wasn’t scared for the future of the atomic power industry, his job, or even for his life, as far as I could see.

He trembled with the instinctive fear of having encountered an unknown monster, in an unknown country. His was the fear of the Lilliputian running for his life when Gulliver finally wakes up.

D’oh! Fear of over-sized unknown monsters is the oldest story of the western world. It’s Homer, not just Homer Simpson.

It’s Ray Harryhausen’s 7th Voyage of Sinbad meeting the Cyclops. It’s the oldest story of the western world: The Iliad and The Odyssey. It’s Homer, not just Homer Simpson.

These operators were scared, as people always are, by the unknown, and the unpredictability of the unknown they don’t control.

E=mc2, contrary to popular belief, is not a free lunch. It’s a conversion formula, describing the equivalence of energy to mass, and the resulting enormous energies released from the interaction of very small, invisible particles. Enormous also, in commensurate scale, are the consequences, and our responsibilities.

It’s hard for human beings to grasp Einstein’s dreadful formula on any human scale.

Some nuclear industry proponents foolishly compare atomic energy to garden variety chemical reactions, like fire.

But we humans evolved with fire. The taming and handling of fire, it’s believed, helped to make us human. The use of fire, we’re told, began long ago with our evolutionary ancestors, before we humans even emerged as a species.

Writing in Science magazine in 2009, Professor David Bowman and his collaborators tell us, “The spread of highly flammable savannas, where hominids originated, likely contributed to their eventual mastery of fire. The hominid fossil record suggests that cooked food may have appeared as early as 1.9 (million years ago), although reliable evidence for controlled fire use does not appear in the archaeological record until after 400,000 years ago.”

Think about it. Our use and understanding of fire sets us apart from every other animal on the planet. Every other species on earth naturally fears fire. In a forest fire, animals instinctively run or burrow for their lives. We, on the other hand, jump into forest fires from airplanes.

Imagine the horrible cries of our hairy ape ancestors swinging in the trees when the first one of us picked up a burning stick, and felt its warmth, and watched it burn, and brought it home.

Of course, some of our ancestors burned themselves to a crisp playing with fire, as we still do. As the authors of the above paper caution, “the evolution of adaptations to fire remains a difficult topic to explore because traits that increase the rate of occurrence of fire, or of recovery following burning, are not unambiguously the result of natural selection.”

In other words, I suppose, burning yourself and your home to a crisp may decrease your chance of finding a soul mate.

Still, even to this day, what more could one want for one’s man cave than fire, flame-broiled meat, fire-brewed beer, and a fiery, large-screen tv?

Can the same ever be comfortably said for nuclear fission? Will splitting atoms ever match the gentlemanly art of grilling meat or shooting defenseless animals with a fire stick? I sincerely doubt it.

That’s not to say that some of us haven’t tried to jump the evolutionary gulf by constructing our very own backyard nuclear reactor.

Columbus of the Atom: Dave Hahn, The Radioactive Boy Scout, in police mugshot.

Lest we forget that modern day Columbus of the Atom, Dave Hahn, of suburban Detroit, Michigan, better known as the Radioactive Boy Scout. In the late 1980s Mr. Hahn famously sought an Eagle Scout Badge by building an atomic breeder reactor from tin foil and salvaged radium paint in his mom’s backyard garden shed.

Mr. Hahn’s misadventure reads like the American nuclear industry’s answer to Chairman Mao’s Great Leap Forward.

Mr. Hahn, posing as a high school science teacher, phoned up the nuclear industry and the NRC, who were only to glad and happy to offer him invaluable advice on achieving an atomic chain reaction in his own backyard. (Refer again to Rule 5: A better model fool, and Rule 3: The nuclear industry needs no help taking care of its own fools.)

Mr. Hahn’s homemade backyard nuclear reactor indeed started to heat up, and soon badly radiated his neighborhood. His face was left permanently pocked with radiation burns.

In the end, Dave Hahn was forced to tear down his backyard nuclear reactor before it went critical, lest he create His Own Private Fukushima. Unfortunately for the evolutionary progress of mankind, the U.S. Environmental Protection Agency was neither very amused nor supportive, and designated Mr. Hahn’s mom’s backyard a Superfund Cleanup Site.

The point is, and Mr. Hahn’s experiments notwithstanding, we’ve had millennia and more to understand and adjust to fire. Our natural affinity for quotidian chemical reactions like fire has been hard-wired into us by hundreds of thousands of years of evolution.

Not so nuclear energy. Nuclear reactions are largely immune from standard human observations and inhabit a counter-intuitive realm outside our understanding of time and our other natural senses.

Splitting atoms will always be the work of a stranger in a strange land. Our best nuclear physicists understand this, and even use the language of explorers and mystics to announce their mysterious doings.

Enrico Fermi sustained the first atomic chain reaction in 1942. To announce his successful criticality experiment (conducted with Fermi’s trademark meticulous scientific procedure, by the way) one of Fermi’s lieutenants sent a coded message to the chairman of the U.S. National Defense Research Committee:

“The Italian navigator has landed in the New World.”

“How were the natives?” Fermi’s man was asked.

“Very friendly,” came the reply.

We now know that “the natives” simply were pretending to be friendly. In reality, the unstable uranium atoms and their by-products were killing Enrico Fermi.

Fermi died at age 53 of stomach cancer. He developed cancer from radiation poisoning while constructing his large “pile” reactor built from heavy graphite bricks and uranium beneath Stagg Field, the football stadium at the University of Chicago. Several of his assistants would also die of cancer.

Which brings us to Rules 7 and 8:


Rule 7:

There are no ‘safe’ levels of radiation.

The best current thinking about the risks of radiation exposure are expressed by what’s called the linear no-threshold model, first expressed decades ago by the late Dr. John Gofman, and later endorsed by groups as varied as the National Academy of Sciences and the United Nations Committee of the Effects of Atomic Radiation, the latter of which reports:

“the Committee believes that an increase in the risk of tumour induction proportionate to the radiation dose is consistent with developing knowledge and that it remains, accordingly, the most scientifically defensible approximation of low-dose response.”

In simple words, no amount of radiation is good for you. This includes natural background radiation.

This makes lots of intuitive sense. We now realize, for example, that tumors and melanomas can be produced from too much exposure to sunshine, and that a breakdown in the earth’s ozone layer can increase this risk.

So the idea that additional man-made radiation is safe is scientifically unsupportable.

So forget about that favorite ploy of the nuclear industry, comparing doses from nuclear meltdowns to dental or chest x-rays, or MRIs. None of it’s good for you.

Take, for another example, the lessons learned from Rule 8:


Rule 8:

Theoretical physicists live to a ripe old age, experimental physicists die of radiation poisoning. Ergo, stay away from nuclear accidents.

Albert Einstein checks for coated tongue: Hysteria = e = mc2

Students of history and nuclear physics know that theoretical physicists like Albert Einstein and Stephen Hawking, who work with mathematical calculations and who seldom venture near radioactive isotopes, live to ripe old ages.

Experimental physicists, like Marie Curie and Enrico Fermi, on the other hand, who work with the isotopes, have a tendency to die of radiation poisoning and cancer.

The same applies for journalists and landscape oil painters.

Therefore, Sanjay and Anderson, resist the urge to visit the vicinity of a nuclear power plant meltdown. Take it from me: you may get a by-line and a nice story exposing the apparent lies and confusion of the nuclear industry, but you’ll spend years worrying that you may have caused your body real harm.

Is a by-line, a story, or a book worth the risk? No.


The bottom line:
What can we predict from the Fukushima Experiment?

Less than three years after Enrico Fermi succeeded in building a nuclear reactor, physicists working on the first atomic bomb detonation in Alamogordo, New Mexico, on July 16, 1945, placed wagers among themselves about whether the first nuclear explosion, aptly code-named Trinity, might ignite the earth’s atmosphere or otherwise destroy our planet.

Gambling for their clothes and risking a lethal dose: Alamogordo A-bomb test.

J. Robert Oppenheimer, witnessing the awesome horror we mortals brought in the desert that night, famously quoted the ancient Bhagavad-Gita: “Now, I am become Death, the destroyer of worlds.”

And so we humans dare play with the fire of stars, and attempt to calculate inscrutable quantum probabilities, while the great mass of us can’t comprehend the simple 2 + 2 addition of balancing a household, or a national budget.

For me, the nuclear accident in Fukushima, Japan, permitted me to revisit and re-examine the wild, rollercoaster ride of emotions and perceptions I experienced during my own hometown’s nuclear disaster in 1979. I was able to see that my own response and impressions to a nuclear meltdown are universal and natural, and not held by myself alone, or other immediate victims.

Some of the similarities of both nuclear accidents are obvious: the utility executives who seem clueless about what’s going on inside the reactor and who seem unable to provide reliable information to the public or to speak truthfully about it; the government officials who seem equally clueless about what’s going on in the reactor and who send equally mixed signals; and the spectrum of equally posturing talking heads in the media who alternatively predict Armageddon, and then offer the incident as proof that nuclear energy is safe and friendly.

As we see with the ongoing Fukushima incident, a nuclear accident causes the whole planet to go wild with hysteria, not unlike our ancestors must’ve screeched from the trees when one of us first stepped up to a burning stick to curiously stare and wonder at the warmth of its blaze.

It seems to me that all humanity is in the same uneasy predicament I found myself contemplating on the morning of the Three Mile Island accident, when I had to decide in a split second whether to run, or to turn back to face an unknown monster. In so turning, I suppose, we not only confront our feeble humanity, we’re charting our destiny by the stars.

We have no choice but to turn and plant our foot firmly in the path of the horrible thing, and resolve to carefully try to understand it, and truthfully try to explain it to others.

That’s what made us, and makes us, human beings.

A simple uneasy truth remains: when a nuclear reactor melts, we find ourselves in the same unknown country of Fermi, Oppenheimer, and their associates, and the horrified control room operators at Three Mile Island, Chernobyl, and the Fukushima Daiichi nuclear power plants.

There is one haunting fact that is as accurate today as it was on July 16, 1945, when scientists lay in the sand of Alamogordo, New Mexico, protecting their eyes, awaiting the results of the first nuclear bomb test.

No one knows what will happen.








Bill Keisling is the author of two books on the Three Mile Island accident, and one book on solar energy. He covered the Three Mile Island accident for Rolling Stone, The Progressive, and Harrisburg magazines.



Additional notes and references:

1. The Atomic Energy Commission, by Corbin Allardice and Edward Trapnell, Praeger Publishers, 1974, page 32 and pages 163-168.

2. We Almost Lost Detroit, by John Fuller, Reader’s Digest Press, 1975, page 9.

3. The Atomic Energy Commission, by Corbin Allardice and Edward Trapnell, Praeger Publishers, 1974, page 32 and pages 44-77.

4. The Accident Hazards of Nuclear Power Plants, by Richard Webb, The University of Massachusetts Press, 1976, pages 187-189.

5. Nuclear Power: The Bargain We Can’t Afford, by Richard Morgan, Environmental Action Foundation, 1977, Chapter 5, Hidden Costs.

6. We Almost Lost Detroit, by John Fuller, Reader’s Digest Press, 1975, pages 57-61.

7. Nuclear Power: The Bargain We Can’t Afford, by Richard Morgan, Environmental Action Foundation, 1977, page 38.

8. The Blair Press, Blair, Pennsylvania, April 25, 1979, page 13.

9. We Almost Lost Detroit, by John Fuller, Reader’s Digest Press, 1975, pages 104-115.

10. We Almost Lost Detroit, by John Fuller, Reader’s Digest Press, 1975, pages 159-164.

11. The Accident Hazards of Nuclear Power Plants, by Richard Webb, The University of Massachusetts Press, 1976, pages 66-73.

12. Nuclear Power: Both Sides, the best arguments for and against the most controversial technology, by Michio Kaku and Jennifer Trainer, W.W. Norton & Co., 1982, page 21.

13. The Accident Hazards of Nuclear Power Plants, by Richard Webb, The University of Massachusetts Press, 1976, pages 66-73.

14. Einstein: Profile of the Man, by Peter Michelmore, Dodd, Mead and Company, 1962, pages 8-11; see also, Einstein, by Hilaire Cuny, Paul S. Eriksson, Inc., 1962, pages 81-84.

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Post-tsunami radio clip of Jerry Taylor/Cato discussing the past and future of US nuclear power

April 7th, 2011 No comments

In the wake of the troubles at TEPCO’s Fukushima nuclear power plants, on March 18, 2011, Jerry Taylor of the Cato Institute discussed the past and future of U.S. nuclear power on WOR’s The John Gambling Show.

I note that Taylor has really only scratched the surface of the problems relating to nuclear power. For example, far from governments simply shifting the risks of nuclear power cost over-runs to ratepayers and taxpayers, this incentive structure actually compounds financial risks, as the contractors do not have to bear the amount of cost over-runs, and the utilities can put their hands into the pockets of others.

Further, Taylor has not addressed the further subsidies provided in the form of Federal liability caps and by “limited liability” state corporation laws that leave shareholders without ANY liability for damages that nuclear accidents may cause others – as has now materialized in Japan. Just as we have seen in our financial sector, the result is a loss of personal “skin in the game”, a concomitant reduction in critical oversight, unleashed moral hazard, poor decision-making and then hand-wringing and blame-shifting when the “black swans” come home to roost.

Here is the link to 10-minute clip (which Cato has so thoughtfully made easy to share, but unfortunately seems too big to upload here)


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Jerry Taylor/Cato at Forbes: "Nuclear power quite simply doesn’t make economic sense."

April 7th, 2011 No comments

I’m a fan of Jerry Taylor, an even-handed, level-headed guy working out of the Cato Institute who sometimes almost (but not quite) comes across as a radical envirofascist. (My earlier posts referencing him are here.)

Jerry’s Cato bio says he “is among the most widely cited and influential critics of federal energy and environmental policy in the nation … a frequent contributor to the Wall Street Journal and National Review and appears regularly on CNBC, NPR, Bloomberg Radio, the BBC, and Fox News. His op-eds on public policy have appeared in the pages of The Washington Post, The New York Times, The Los Angeles Times and most other major dailies.’

Jerry and his collegaue Peter Van Doren have a new piece out at and Cato Institute on nuclear power; Jerry has kindly given me permission to cross-post it in its entirety here.

[Just added: Allow me to I note that Taylor has really only scratched the surface of the problems relating to nuclear power. For example, far from governments simply shifting the risks of nuclear power cost over-runs to ratepayers and taxpayers, this incentive structure actually compounds financial risks, as the contractors do not have to bear the amount of cost over-runs, and the utilities can put their hands into the pockets of others.

[Taylor also does not address the further subsidies provided in the form of Federal liability caps and by “limited liability” state corporation laws that leave shareholders without ANY liability for damages that nuclear accidents may cause others – as has now materialized in Japan. Just as we have seen in our financial sector, the result of these government interventions is a loss of personal “skin in the game”, a concomitant reduction in critical oversight, unleashed moral hazard, poor decision-making and then hand-wringing and blame-shifting when the “black swans” come home to roost. 

[Nuclear crony capitalism is just the tip of the iceberg of the vast, rotten and still metastasizing crony-capitalist mess that limited liability corporation laws have engendered: Beyond ‘Nuclear Crony Capitalism’: Does state-created corporations mean we are stuck with a wonderfully confused ‘capitalist’ mess of socialized risk?]

This is how the Taylor and Van Doren piece appears at Cato (emphasis added)

Nuclear Power in the Dock

by Jerry Taylor and Peter Van Doren

This article appeared on on April 5, 2011.  [TT: Here’s the Forbes link.]

The unfolding nuclear emergency in Japan has prompted a reconsideration of nuclear power here in the United States. Surprisingly, the political faith in nuclear power appears to be relatively unshaken at the moment, with opinion leaders on both the left and right cautioning against overreaction and politicians in both parties swearing continued fealty to the federal campaign to jump-start new construction orders.

This is unfortunate — not necessarily because nuclear power plants are a catastrophic meltdown waiting to happen — but because nuclear power makes no sense from an economic perspective and the political campaign to ram these plants down the market’s throat threatens catastrophic harm to both taxpayers and ratepayers.

The fact that nuclear power can’t come within light-years of passing a market test is painfully obvious to all who wish to see. Consider the feds are presently telling banks that if they loan money to a utility company to build a nuclear power plant and the loan subsequently goes bad, the U.S. Treasury (that is, you) will compensate the bank for up to 90% of its losses. And yet the banks still refuse to loan. For principled supporters of a free market, that should be information enough about the merits of this commercial enterprise.

There are all sorts of reasons why banks are saying “no” to nuclear. Two in particular, however, stand out.

First, nuclear energy is not even remotely competitive in power markets with gas-fired or coal-fired electricity now or in the foreseeable future. Even the more optimistic projections of new nuclear power plant costs — such as those forwarded by MIT — find that nuclear’s production costs over the lifetime of a new facility are about 30% above those for coal or natural gas-fired generators. So while we can only speculate about new plant construction costs (we haven’t tried building one for more than 30 years) and estimates vary a great deal, all parties agree on one thing: Nuclear is substantially more expensive than conventional alternatives at present.

That’s particularly the case when one figures in the revolution in natural gas extraction, which has significantly lowered the cost of gas-fired power. Exelon CEO John Rowe recently told the press that natural gas would have to cost more than $9 per million BTUs before nuclear power plants could compete — about double its current price and far north of the $5.3 per million BTU price over the next 5 to 10 years that forecasters predict for the future. MIT’s nuclear energy study, by comparison, projects a $7 per million BTU natural gas price (which makes nuclear energy seem more competitive than it actually is), but of course, the MIT study was based on 2007 data that failed to fully reflect the revolutionary advances in hydraulic fracking.

It’s worth noting, moreover, that nuclear’s hefty price tag would be even heftier if government subsidies were to fall by the wayside. One economist calculates that existing nuclear subsidies are equal to one-third or more of the value of the power produced. Tufts economist Gilbert Metcalf estimates that nuclear power plant operators face a negative 49% tax rate. Hence, banks betting on nuclear power are also betting on the longevity of such breathtaking taxpayer largesse — a risky bet indeed.

Second, the risk of cost overruns and, thus, defaulted loans are higher than the politicians would have us believe. Most of the nuclear power plants built in this country have cost three times as much to build as utilities initially advertised at the onset of construction.

While the industry swears that this is a thing of the past, new power plants being built in Finland and France by Teollisuuden Voima and Electricite de France, respectively — the only nuclear power plants being built right now in free-market energy economies — are already coming far above their advertised cost. The Finnish plant — which was supposed to cost only 3 billion euros — is already 2.7 billion euros above cost and is four years behind schedule. The French plant fairing a bit better, only 1 billion euros over budget and two years behind schedule.

The fact that both of these projects deploy state-of-the-art reactors built by French nuclear giant Areva — arguably the most experienced nuclear power company in the world — speaks volumes. Accordingly, both the Congressional Budget Office and the Government Accountability Office expect about 50% of any future U.S. loans to default.

So why are utilities trying to build these things in the first place? Well, most aren’t. Those few utilities that are interested in going ahead do business in states where construction costs are automatically plugged into the rate base. So in theory at least, risks would be transferred from the utility to the ratepayer with utilities at least guaranteed to break even. Even so, the increasing cost gap between nuclear and gas-fired power makes it unclear whether any of these generators will actually get built.

As Peter Bradford, a former member of the U.S. Nuclear Regulatory Commission and former chair of the New York and Maine utility regulatory commissions, puts it, “In truth, the nuclear renaissance has always consisted of the number of plants that government was willing to build.” Regardless, federal attempts to jump-start the industry — as Herculean as they have been — haven’t come even close to closing the competitive gap with gas-fired generation. Events unfolding in Japan are unlikely to change that. And for that, at least, we can all be thankful.

Jerry Taylor and Peter Van Doren are senior fellows at the Cato Institute.

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A guest blogger on 'black swans' and Japan: tsunamis of bad news and ill winds for the US?

April 6th, 2011 No comments

Via an email from “OathKeepers”, I’ve just come across an interesting essay by one Brandon Smith (blogging as “Giordano Bruno”). Smith is the head writer and co-founder of, a website which “specializes in alternative macroeconomic analysis as well as studies in mainstream media disinformation.” His articles are featured regularly at,,,, and G. Edward Griffin’s Smith describes himself as :

a staunch Constitutionalist, free market champion, and proponent of sound money. In 2011, he is launching his new Alternative Market program in tandem with Stewart Rhodes of Oathkeepers with the aim of building gold, silver, and barter based systems in towns and cities across the country that will allow average Americans to finally take a lead role in the movement against globalism, providing for themselves what the current corrupt fiat system does not.

Supporting true, tangible community, enacting State sovereignty legislation, and promoting solid, decentralized local economies will be Brandon Smith’s primary focus in the foreseeable future

Here is the first part of a fairly long essay which I excerpt because of its connection to Japan; the rest of the essay is here. (The emphasis added is mine.). I note that while I find the content interesting, this cross-posting is not an endorsement.

Migration Of The Black Swans

By Giordano Bruno

Neithercorp Press – 3/31/2011

The phrase “Black Swan” is really making the rounds these last few months. Uttering the term a year ago would have earned you a collection of confused looks and a general attitude of disinterest. Now, people behave as if they had learned about economic shockwave events and the global domino effect when they were in kindergarten. The problem is that when this kind of terminology hits the mainstream, in most cases it comes prepackaged with dumbed down and diluted definitions which promote an inadequate, cartoonish understanding of the circumstances.

To be sure, most Americans are well aware that the world’s political and economic foundations are about as stable as fresh pudding under a heat lamp. The problem is that they are now being conditioned by the mainstream media to view the idea of collapse as “cinematic”; a kind of live action fantasy in which we all get to play the part of the audience, watching safely from the dark in our cushy theater seats with a bag of overpriced popcorn, Dolby surround sound, and a hot date to keep us company during the boring parts. Three years ago, even mentioning the idea of a breakdown in society or a financial catastrophe beyond a minor recession earned you the label of “doom monger”; a rather inept and naïve attempt on the part of the MSM to silence any economic analysis that stepped outside the establishment Keynesian framework. Today, I turn around to look at a magazine stand at the airport and right in front of me is Newsweek openly declaring “Apocalypse Now”!

Is the mainstream finally catching up to the alternative media? No. The MSM is merely adopting pieces of our common language and twisting them to fit a more globalist friendly viewpoint. Because our readership is growing exponentially, and our traffic is skyrocketing while corporatized news sources are floundering, the MSM is losing its ability to obscure our fact based journalism with their over funded and highly sterilized adaptation of reality. So instead, they attempt to co-opt our particular vocabulary, and our news focus, while adding their own subtle spin and sensationalism. When people not familiar with the alternative media and the more in-depth information we provide talk about a “Black Swan event”, a depression, hyperinflation, etc., their concept of the implications of such disasters is far different than ours. They are living in the Disney version of financial and social Armageddon.

Of course, when the curtains raise, the previews are over, and the show begins, none of us will be lounging comfortably outside these calamities to simply watch. We will all be inexorably involved, whether we like it or not. So, carry on with the media war we must. Educating the masses on the ENTIRE story behind international events and their consequences continues to stand as a top priority, until that final straw caves the camel’s back and disseminating the truth becomes a needless exercise in pointing out the horrifyingly obvious.

First, let’s examine the veiled reverberations of recent “Black Swan” events, the wider view of the chain that ties them together, as well as what we should expect in the near future in the wake of their aftermath…

Fukushima Mon Amour

If I could choose only one tragedy to be categorized as a textbook example of a Black Swan, it is the earthquake and subsequent tsunami off the coast of northern Japan which led to the current and precarious meltdown of the nuclear reactors at Fukushima. Now, the immediate concerns of Western nations, especially citizens of the U.S., have automatically turned to the threat of radioactive fallout traveling across the Pacific. Unfortunately, radioactivity is the least of our troubles in the face of Japanese nuclear core exposure. Again, Japan is currently the number three economy in the world, and the effects of the Fukushima incident have contributed to the possibility of a full spectrum crisis.

First, we must always keep in mind that incidents in areas like Japan or the Middle East are NOT the direct cause of global economic or social turmoil; they are only trigger points for an avalanche that has been building for the past three to four years. If Fukushima had occurred in 2007, international markets would have easily absorbed the blow, but today, economies everywhere have been so weakened by the implosion of the banker created derivatives bubble and the inflationary fiat measures of private organizations like the Federal Reserve that they no longer have the capacity to shield themselves from unexpected catastrophes. Big banks have been playing a massive game of Jenga with the global economy, pulling one support after another until the whole construct begins to sway and tremble. One gust of wind, one tremor, one wrong move, and the whole thing comes crashing down. If you want to place blame for the chaos we are about to see in the aftermath of Fukushima, be sure to place it where it belongs; on the doorstep of corporate monstrosities like the Fed, Goldman Sachs, JP Morgan, HSBC, etc.

Second, Japan’s official debt to GDP ratio now stands at 225%, way above the limit usually attributed to a country on the verge of complete debt destruction. The cost of rebuilding the areas damaged by the tsunami alone is estimated at around $300 billion. My primary concern in light of Japanese instability, though, is the severe weakening of their export markets. Japan is almost entirely reliant on its export capacity to support its ailing economy, meaning they are dependent on other countries to continually purchase their goods. However, in 2008, Japanese exports were pummeled, and have not improved anywhere near levels reached previous to the credit collapse, at least according to initial numbers for 2010:

The earthquake and nuclear meltdown of 2011 have sealed Japan’s fate. It could take ten, twenty, even thirty years for them to recuperate from this setback. Manufacturing in the Asian nation has already deteriorated at the fastest pace in nearly a decade:

Japanese food exports are being shunned by international markets for fear of radioactive contamination. Prime Minister Naoto Khan [ed. : should be “Kan”] is now pleading with the WTO to urge its members to avoid curbing imports of Japanese goods, claiming that the government is on top of the Fukushima situation:

This hardly appears to be the case though. Reports of radioactive iodine 10,000 times safe levels in the water table below Fukushima have surfaced; reports which the Tokyo Electric Power Company is now vaguely stating “may be incorrect”:

The secrecy surrounding Japan’s nuclear meltdown is highly disconcerting and reminiscent of the Chernobyl incident in 1986, which the Soviet Union also refused to report honestly. Nearby cities were completely uninformed as to the true danger of the meltdown, and the international community was without a clue as to the extent of the radiation until Sweden, nearly seven hundred miles away, discovered radioactive particulates in its atmosphere. The problem with a containment breach in a nuclear plant is that it releases a steady stream of radioactive materials into the environment until the plant is finally buried under tons of concrete, lead, boric acid, and sand, as opposed to a nuclear weapon, which detonates, irradiating surrounding particles, which then dissipate after around two weeks. Fukushima, if left uncontained, could spew radioactivity for decades. The Japanese government does not seem to be providing forthright information about the real jeopardy involved.

Of course, if they were forthright, there would certainly be alarm amongst the citizenry, but even more so, a flight of investment dollars from Japanese industry and stocks. The only equity in Japan which seems to be attracting investment is the Yen itself, which skyrocketed against the U.S. dollar at the onset of the crisis:

The Yen has climbed steadily against the dollar since the early 1970’s, from 300 yen per dollar, to only 80 yen per dollar after Fukushima. I find it interesting that now, during times of financial uncertainty, global investors would rather pour their savings into the currency of a country that is about to be radioactive, rather than put their savings into the U.S. Greenback! What does that tell you about the level of trust the world currently has in our currency?

Being that Japan is a dedicated export economy, the higher the Yen goes, the more strenuous the exchange rate, and the less other countries will buy from them. G7 nations have since attempted to artificially knock down the rise of the Yen, but their efforts have yielded little success. The Yen still stands at around 83 per dollar. Hardly an improvement that will make Japanese exports more viable.

So, where is this all leading…? High speed deflationary depression for Japan. But that’s not all! The ASEAN trading bloc, led by China and fueled by the rising Yuan, has been pushing Japan to join the fold for years. Japan has been less than receptive to the proposition for numerous cultural, political, and financial reasons. But now, with the complete downfall of the country underway, and their export capability crumbling, Japan may go begging to join ASEAN. Already, ASEAN is beginning to offer help in Japan’s rebuilding process:

What does this mean for the U.S.? It means the Japanese will likely begin a progressive dump of their vast reserves of U.S. Treasuries and dollars, replacing them with Yuan bonds. Its means a severe devaluation of the dollar in the near future along with the possible end to its World Reserve Currency status. It means hyperinflation in America. This is the true nature of a Black Swan event. It is not a single incident, but a chain reaction that spreads like cancer through an economic system, leading to broader misfortune than anyone dared imagine.

Once Upon A Time In The Middle East

The effects of the revolutionary fervor in the land of OPEC are a bit more obvious than those caused by Japan, at least, for the most part. Crude oil is now climbing towards $107 per barrel at the publishing of this piece. World markets are swinging wildly like a cheap carnival ride. Political alliances (especially between the U.S. and its primary oil suppliers) are becoming strained. The dollar’s peg to oil is now under threat. But this is really no surprise. As we have discussed in past articles, it is exactly what happened to the British Empire in the early 1950’s when it attempted to strong arm Middle Eastern governments and maintain the oil trade under the Pound Sterling. Eventually, the British became embroiled in Arab conflicts and revolts they could not possibly untangle, and their main debt holders (one of which was the United States) threatened to dump British Treasuries and the pound sterling as the world reserve currency. Sound familiar….?

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