California Free Press

A New Definition of Freedom

In capitalist societies freedom has been defined as the right to amass unlimited wealth. I would like to propose a new definition of freedom. Freedom is the right to have control over one's work. Beneath the rhetoric of freedom is a fundamental disagreement over whether freedom allows a person to get in a position in which one's income and wealth is a function of control over other people or whether one's income and wealth is a product of one's own labor. Those who believe income and wealth should be a product of one's own labor will probably appreciate my new definition of freedom; others will not. The parameters of freedom would be control over the quantity and quality of one's work. For instance, the amount of work, the nature of that work and the timing of that work would be under individual control and not the control of others as in the traditional employer-employee relationship. The more that is the case, the more free one would be. It is assumed that income would be derived from actual work and not from rent, dividends, interest and other financial manipulations.

Inherent in any discussion of work and freedom is the question of what is work worth. Is a CEO's work worth 1000 times what a ditch digger's work is worth? Was Bill McGuire's 1 billion plus takehome pay in 2006 attributable to the fact that his work ethic exceeded that of the average middle class worker by a factor of 10,000. I think not. Then what was it attributable to? Basically to manipulations of the financial system in which money is created by driving up the stock market and then cashing in via stock options. So any discussion of freedom in terms of one's work would presuppose that money earned as a result of financial manipulation and not from actual work would be curtailed. Freedom would be the right of an individual to have control over his or her work, but not the right to amass unlimited wealth due to manipulations of the financial system.

But what about entrepreneurs? Shouldn't they be entitled to make an unlimited amount of money due to their innovations? Just as patents have a limited lifetime, innovators who provide legitimate products and services should be amply rewarded by any economic system, but their rewards should not be unlimited. In a capitalist society rewards are limited in the case of patents, for example, by competition from other manufacturers once the patents expire. Similarly, there should be mechanisms that prevent any enterprise from amassing so much financial power that it can pay CEOs billions of dollars. Entrepreneurship is one thing; CEO pay driven by stock manipulation is quite another. A society has to decide whether it is in the overall society's interest to have a work based society or a finance driven society.

But what if most of the work is done by robots, automatons and computers? How is it possible to have a work based society if not that much human labor is even required? Then it's a question of ownership. Who owns the machines? If private interests own the robots, then consumers will have to pay whatever those interests charge. But where will they get the money to consume if their labor is not required in production; where will they get the money to consume if no jobs are available? They could form co-ops and purchase their own robots which would produce products for their own consumption at lower prices if the market is controlled by monopolistic or oligopolistic corporations. But where will they get the money for the capital investment? This seems like a dead end street for the majority of the world's poor and lower middle class. Private corporations will seek to maximize profits which means that they will promote policies which protect their position in the marketplace and extract the maximum revenue from the collective buyers of their products even if it means that their factories will sit idle because no one has the money to buy their products.

Depressions occur when factories sit idle because consumers don't have the cash to spend. Enlightened producers should seek to insure that consumers have cash to spend on their products. But if there are no jobs due to automation where will this cash come from? It would seem that producers should be willing to be taxed and have the money redistributed through government programs just so consumers would have the money to purchase their products. Henry Ford paid his workers enough so that they could buy his cars. Today cars are produced by robots so that the only way to get money into consumers' hands is by redistribution of some of the profits. That is to say that the culture of work, that a person should have to work and earn their living, needs to come to an end. While many are only too willing and able to work, they are not able to do so if there are no jobs. And the owners of capital receive their income not from their own labor but from the return to capital which they own. Perhaps they did a lot of work at one time to get themselves into a position of ownership, but once there, they derive their income from rent, dividends, interest and manipulations of the financial system such as are embodied in stock options. In other words, for them, it's a culture of income and wealth derived not from work but from ownership. Private ownership should not be sacrosanct and inviolable.

So capitalism inevitably leads to depressions especially if there are technological advancements that result in a situation in which less and less labor is required to produce the products that consumers want and need. Government redistribution would serve to make everyone in the society effectively part owners of every private corporation and would allow everyone to derive at least a part of their income from ownership of assets. This would take place in lieu of government competing with private ownership in producing consumer products although that is at least a distinct logical possibility. When government gets involved in the means of production, then we would have what is called socialism. Government, after all, is the ultimate co-op. But that would be preferable to the situation in which nobody can afford the products produced by private enterprise with the result that there is mass deprivation. One way or another the average person must become an owner of the means of production and derive part of his or her income that way instead of in the traditional way which is either to work or to be an owner.

So one dimension of a new definition of freedom is a reduction in the total amount of work required from each citizen and a corresponding increase in ownership just by virtue of one's citizenship or membership in that society. Another dimension of freedom is control over the parameters of that work including time and amount. Another dimension is ownership either in terms of redistribution or in terms of collective ownership of the means of production with public and private enterprises in competition with each other. When one works and how much one works as well as the rewards from that work should be under the individual worker's control and not under an employer's control. Those who choose to work less should reap fewer rewards, of course, and vice versa. That empowers the worker and the more empowered he or she is, the more free he or she is. This should take place in such a way as to maximize equality in society. Otherwise, the owners of capital assets will be free and all others will be effectively enslaved. 

Is GDP as an Economic Indicator Passe?

Published on Thursday, September 24, 2009 by The Capital Times (Wisconsin)

Radical Economic Restructuring Needed, But Not Just Any Version Will Do

by John Nichols

PITTSBURGH - The G-20 Summit that opens today is unlikely to achieve much when it comes to restructuring the global economic order. That's good news for workers, farmers, consumers and citizens.

What's good about inaction on the part of the leaders of the world's wealthiest nations? While there is no question that a radical restructuring is needed, it must be the right restructuring.

In the midst of the nastiest economic downturn since the Great Depression, and with so many unaddressed social and environmental challenges weighing on the planet, the necessity of finding new ways of organizing and managing the economic affairs of nation states and global trading and regulatory regimes should be evident to even the most nearsighted neo-liberals.

But multinational bankers and corporatists that contributed so mightily to the current crisis are busy peddling more-of-the-same "solutions" that could actually make matters worse. For instance, one of the great debates going into this week's meeting of leaders from wealthy nations such as the U.S., China, Germany, Japan and Great Britain has been over how to develop an international framework for what the powers that be define as "sustainable development."

The thing to remember is that, in the world of the global economic elites, "sustainable" has a different meaning than in does at a Friends of the Earth rally or Madison's "Food for Thought" festival.

The high fliers at the G-20 want to manage international trade and competition in a manner that keeps banks and corporations on steady growth trajectories - no matter what that means for working families, small farmers and the poor of the planet.

In fact, one of the prime debates going into the summit had to do with a plan to set up a new system to manage trade between countries that would have what the Financial Times describes as "a powerful enforcement mechanism … to fine or punish countries that built up the sort of large trade surpluses or deficits that contributed to global trade imbalances."

Reducing trade deficits, like those experienced by the United States since this country bought into the free-trade dogmas of the 1990s - via the North America Free Trade Agreement, our embrace of the World Trade Organization and the enactment of permanent most-favored-nation trading status for China - has great appeal.

But the big problem with NAFTA, the WTO and other existing schemes for managing regional and global trade is that they limit the sovereignty of nation states and thus undermine the ability of citizens to democratically define the direction of their national economies.

A new international program, established by the G-20, to pressure countries with regard to trade surpluses and deficits would further erode democracy at the national level.

For this reason, G-20 officials fretted on the eve of the summit that "no country would cede sovereignty on core economic decisions."

That means that the G-20 won't produce the "new world order" that many mandarins of the old economic order would have preferred.

Instead, what's likely to be agreed to is what British Prime Minister Gordon Brown describes as "a compact" that might develop what G-20 negotiators imagine as "a process of annual peer review overseen by the International Monetary Fund, (which) would nudge countries into pursuing policies that (create) more balanced economic growth."

From a democracy standpoint, nudging is better than the surrender of sovereignty.

But it would be foolish to presume that peer review will, in and of itself, produce more balanced economic growth.

If the IMF uses traditional measures to assess whether the economic growth of a particular country is sound, we're still in trouble.

This summit should be about establishing new standards for measuring growth, and for "nudging" countries to develop along lines that are genuinely sustainable.

French President Nicolas Sarkozy plans to propose that the G-20 consider employing metrics that better measure the well-being of nations. Economic indicators such as the gross domestic product (GDP) of a country would still be considered (along with trade surpluses and deficits). But quality-of-life indicators, including measures of social, democratic and environmental progress, would also be considered in determining whether a country was advancing along sound and sustainable lines.

Nobel Prize-winning economic Joseph Stiglitz refers to "a balance sheet of society" in describing this broader notion of what should be measured.

"In many cases, the GDP statistics seem to suggest that the economy (of a country) is doing far better than most citizens' own perceptions," explains Stiglitz, a key member of the international Commission on the Measurement of Economic Performance and Social Progress that Sarkozy established with an eye toward developing broader measures of national progress. "(The) focus on GDP creates conflicts: political leaders are told to maximize it, but citizens also demand that attention be paid to enhancing security, reducing air, water and noise pollution, and so forth - all of which might lower economic growth. The fact that GDP may be a poor measure of well-being, or even of market activity, has, of course, long been recognized. But changes in society and the economy may have heightened the problems, at the same time that advances in economics and statistical techniques may have provided opportunities to improve our metrics."

Stiglitz and the team assembled by Sarkozy have proposed those improved metrics. The extent to which they are discussed and embraced by the G-20 will go a long way toward determining whether this summit will play a role in shaping a genuinely sustainable global economy - one that serves all the world's people, not merely CEOs and speculators - or be one more missed opportunity.

© 2009 The Capital Times

John Nichols is Washington correspondent for The Nation and associate editor of The Capital Times in Madison, Wisconsin. A co-founder of the media reform organization Free Press, Nichols is is co-author with Robert W. McChesney of Tragedy & Farce: How the American Media Sell Wars, Spin Elections, and Destroy Democracy - from The New Press. Nichols' latest book is The Genius of Impeachment: The Founders' Cure for Royalism.

Volcker Says China’s Rise Highlights Relative U.S. Decline

By James Tyson and Michael McKee

 

Sept. 29 (Bloomberg) -- Former Federal Reserve chairman Paul Volcker said the rise of China and other emerging economies has underscored a decline in the comparative economic and intellectual leadership of the U.S.

“I don’t know how we accommodate ourselves to it,” Volcker, an economic adviser to President Barack Obama, said in an interview with PBS’s Charlie Rose taped yesterday in New York. “You cannot be dependent upon these countries for three to four trillion dollars of your debt and think that they’re going to be passive observers of whatever you do.”

The former Fed chairman also said unemployment at 9.7 percent will slow the pace of recovery from the U.S. recession as Americans default on mortgages and consumer loans. Moreover, commercial real estate loans are likely to cause further losses for banks.

“This recovery will be slower,” he said. “We can’t just pump up consumption and pump up housing again.”

Group of 20 leaders, meeting in Pittsburgh last week, announced plans for more durable economic growth, including reducing U.S. dependence on overseas capital and cutting the reliance of emerging nations such as China on exports.

World leaders decided that the G-20, which includes emerging economies such as China and Brazil, will replace the Group of Eight as the main forum for global economic coordination. The shift illustrates how the excesses that led to the financial crisis have compelled industrial nations to share governance of the world economy.

Less Dominant

The growth of emerging economies is “symbolic of the relative, less dominant position the United States has, not just in the economy but in leadership, intellectual and otherwise,” Volcker said.

The G-20 accounts for about 85 percent of global gross domestic product and was created after a spate of currency devaluations plagued emerging markets from Russia to Thailand in the 1990s. The G-8, which comprises the most advance industrial economies of Europe and North America plus Japan and Russia, accounts for about half of global GDP.

China has overtaken Germany to become the world’s third- largest economy and may soon become the biggest exporter. It passed Japan a year ago as the main foreign investor in U.S. government debt. China, Russia, Brazil and India together hold about 42 percent of international reserve assets, excluding gold.

Herding Cats

“I would like to think that given the history of the past, given the strength, actual and potential of the American economy, we can still provide a kind of indispensable element of leadership here,” Volcker, 82, said. “But it’s not going to be dictatorial, I’ll tell you that. It is very hard to herd these cats together.”

Volcker repeated that under a new regulatory structure the Fed should be given primary responsibility for supervising banks rather than a council of regulators led by the U.S. Treasury.

The Treasury has “no professional background and no traditions in the area of banking supervision,” Volcker said.

“In the distribution of authorities among regulatory institutions, it’s really the Federal Reserve that naturally should to be surveying the whole world, so to speak,” he said.

Volcker has criticized the Obama administration’s plan to give the Fed authority to supervise “systemically important” financial firms. Such a designation would imply government readiness to support the firms in a crisis, encouraging excessive risk-taking, he said in said in testimony to the House Financial Services Committee on Sept. 24.

Independent Agency

The central bank should instead oversee bank regulation carried out by an independent agency, Volcker has said. The chairman of that agency could also be a vice chairman of the Fed, to increase accountability and ensure the Fed is fully informed.

Volcker is chairman of the Economic Recovery Advisory Board, a body created by Obama in February to recommend responses to the crisis.

Since January, Volcker has advocated that regulators prohibit financial companies whose collapse would pose a risk to the economy -- those considered “too big to fail” -- from engaging in certain types of trading and investing. The administration wants stricter oversight for such companies and tighter capital and liquidity requirements.

Volcker said the Fed and the White House “were right in providing massive support” to financial markets after the collapse of Lehman Brothers Holdings Inc. Sept. 15, 2008, and to bail out American International Group.

“Faced with those emergencies, they did what they had to do at the time,” he said.

Giving Succor

While more might have been done ahead of time to prevent Lehman’s demise, “I think if it had been rescued somehow and kept alive, I still think you would have had an attack on the other institutions,” he said. The government’s actions give “succor to the next institution that gets in trouble and to their creditors in particular,” Volcker said.

Is GDP A Relevant Metric?

Emphasis on Growth Is Called Misguided

By PETER S. GOODMAN
Published: September 22, 2009

Among the possible casualties of the Great Recession are the gauges that economists have traditionally relied upon to assess societal well-being. So many jobs have disappeared so quickly and so much life savings has been surrendered that some argue the economic indicators themselves have been exposed as inadequate.

In a provocative new study, a pair of Nobel prize-winning economists, Joseph E. Stiglitz and Amartya Sen, urge the adoption of new assessment tools that incorporate a broader concern for human welfare than just economic growth. By their reckoning, much of the contemporary economic disaster owes to the misbegotten assumption that policy makers simply had to focus on nurturing growth, trusting that this would maximize prosperity for all.

“What you measure affects what you do,” Mr. Stiglitz said Tuesday as he discussed the study before a gathering of journalists in New York. “If you don’t measure the right thing, you don’t do the right thing.”

According to the report, much of the world has long been ruled by an unhealthy fixation on swelling the gross domestic product, or the quantity of goods and services the economy produces. With a singular obsession on making G.D.P. bigger, many societies — not least, the United States — failed to factor in the social costs of joblessness and the public health impacts of environmental degradation. They allowed banks to borrow and bet unfathomable amounts of money, juicing the present by mortgaging the future, thus laying the ground for the worst financial crisis since the 1930s.

The report is more critique than prescription. It elucidates in general terms why leaning exclusively on growth as an economic philosophy may yield unhappiness, and it suggests that the incomes of typical people should be weighed more heavily than the gross production of whole societies. But it sidesteps the thorny details of slapping a cost on a ton of pollution or a waylaid career, leaving a great mass of policy choices for others to resolve.

Some Americans may reflexively reject the report and its recommendations, given its provenance: it was ordered up last year by President Nicolas Sarkozy of France, whose dissatisfaction with the available tools of economic assessment prompted him to create the Commission on the Measurement of Economic Performance and Social Progress. Tuesday’s briefing was held in an ornate room at the French consulate. The official French statistics agency is already working to adopt the report’s recommendations. Mr. Sarkozy plans to bring it with him to the G-20 summit meeting in Pittsburgh this week, where the leaders of major countries will discuss a range of policy issues.

But whatever one’s views on the merits of European economy policy, and wherever one sits on the ideological spectrum, these appear fitting days to re-examine how economists measure vital signs — particularly in the United States.

By most assessments, the American economy is now growing again, perhaps even vigorously. Many experts expect a 3 percent annualized rate of expansion from July through September. As a technical matter, the recession appears to be over. Yet the unemployment rate sits at 9.7 percent and will probably climb higher and remain elevated for many months. In millions of households still grappling with joblessness and the tyranny of bills, signs of health served up by the traditional economic indicators seem disconnected from daily life.

This was precisely the sort of contradiction Mr. Sarkozy sought to unravel when he created the commission, tasking it with pursuing alternate ways of measuring economic health.

To head the panel, he picked Mr. Stiglitz, a former World Bank chief economist whose best-selling books amount to an indictment of the Washington-led model of global economic integration. Mr. Sarkozy also selected Mr. Sen, a Harvard economist and an authority on poverty.

The resulting report amounts to a treatise on the inadequacy of G.D.P. growth as an indication of overall economic health. It cites the example of increased driving, which weighs in as a positive within the framework of economic growth, as it requires greater production of gasoline and cars, yet fails to account for the hours of leisure and work time squandered in traffic jams, and the environmental costs of pollutants unleashed on the atmosphere.

During the real estate bubble that preceded the financial crisis, the focus on economic growth helped encourage overbuilding and investment in real estate. Mr. Stiglitz argues that the single-minded focus on growth gave American policy makers a false sense of assurance that their policies were virtuous, as they allowed financial institutions to direct virtually unlimited sums of money into real estate and as consumer debt levels built with unrestrained momentum.

Credit enabled spending, and spending translated into faster growth — an outcome that was intrinsically good, and never mind how long it might last or the convulsions that would accompany the end of easy money.

A growth-oriented policy encouraged homeowners to borrow as if money need never be repaid, and industry to produce products as if the real cost of pollution were zero, Mr. Stiglitz added.

“We looked to G.D.P. as a measure of how well we were doing, and that doesn’t tell us whether it’s sustainable,” he said at the briefing. “Your measure of output is grossly distorted by the failure of our accounting system. What began as a measure of market performance has increasingly become a measure of social performance, and that’s wrong.”

Instead of centering assessments on the goods and services an economy produces, policy makers would do better to focus on the material well-being of typical people by measuring income and consumption, along with the availability of health care and education, the report concludes.

Many of these prescriptions will no doubt resonate with policy makers and ordinary people.

Indeed, the difficulty comes in turning these general principles into new means of measurement. The report notes that its authors concur on the big picture, but diverge on the methodologies to be employed when it comes to factoring in the value of a better education and cleaner skies.

The old mode of measurement has taken a beating, and yet the new one, it seems, is still a work in progress.

Does "Freedom" Mean the Right to Amass Unlimited Profits?

The following comments were posted on Robert Reich's blog post entitled "Why the DOW is Hitting 10,000 Even When Consumers Can't Buy and Business Cries 'Socialism'."

Wall St also loves American job losses. When "Chainsaw" Al Dunlap took over a company and laid off tens of thousands of workers, Wall St cheered and the company's stock went up. Is any more proof needed that Wall St's and the investor class' interests are utterly opposed to the interests of the average work-a-day middle class American?

There is a negative correlation between job creation and Wall St. which is to say that there is a positive correlation between job loss and Wall St. When 1% of the people has more wealth than 95% of the people, there is a total divergence between the economic ruling class and the rest of the population. Sure the average person may be middle class, but they are losing more and more control over their own destinies while being reduced to peonage by the plutocrats that represent the monied interests.

The middle class, no longer indentured servants, are becoming instead indebted servants - in hock to banks that trick people into paying more and more fees. Now debit cards can be overdrawn thus resulting in more fees to the banks. Not only that but if several charges are made on a particular day, the last one being an overdrawal, the bank can reorder the purchases so that every one results in an overdrawal fee. It's not illegal and, as we know, anything that's not illegal is ipso facto legal. The banks are not wasting any time in outwitting the middles class especially the ones who are not continually on top of their situations.

So what does freedom mean? Is it the right to amass unlimited profits? If that's your definition of freedom, then you would be for no government interference in the "free" market, no regulation. If your definition of freedom concerns the rights and privileges of American workers or anyone who works for a living as opposed to people who make their living off of rents, interest, dividends, commissions and fees, then government control of the investor and financial sector and government which seeks to enhance the lot of the working class including high and low tech workers, can actually increase your freedom as opposed to the freedom of those who only seek to amass unlimited amounts of money.

The Peasant Mentality Lives On In America

Article in The Smirking Chimp by Matt Taibbi:

It took a good long while for news of the Teabag movement to penetrate the periphery of my consciousness — I kept hearing things about it and dismissing them, sure that the whole business was some kind of joke. Like a Daily Show invention, say. It pains me to say this as an American, but we are the only people on earth dumb enough to use a nationwide campaign of “teabag parties” as a form of mass protest, in the middle of a real economic crisis.

What’s next? The Great Dirty Sanchez-In of 2010? A Million Man Felch? (Insert Rusty Trombone joke here).

This must be a terrible time to be a right-winger. A vicious paradox has been thrust upon the once-ascendant conservatives. On the one hand they are out of power, and so must necessarily rail against the Obama administration. On the other hand they have to vilify, as dangerous anticapitalist activity, the grass-roots protests against the Geithner bailouts and the excess of companies like AIG. That leaves them with no recourse but to dream up wholesale lunacies along the lines of Glenn Beck’s recent “Fascism With a Happy Face” rants, which link the protesting “populists” and the Obama adminstration somehow and imagine them as one single nefarious, connected, ongoing effort to install a totalitarian regime.

This is not a simple rhetorical accomplishment. It requires serious mental gymnastics to describe the Obama administration — particularly the Obama administration of recent weeks, which has given away billions to Wall Street and bent over backwards to avoid nationalization and pursue a policy that preserves the private for-profit status of the bailed-out banks — as a militaristic dictatorship of anti-wealth, anti-private property forces. You have to somehow explain the Geithner/Paulson decisions to hand over trillions of taxpayer dollars to the rich bankers as the formal policy expression of progressive rage against the rich. Not easy. In order to pull off this argument, in fact, you have to grease the wheels with a lot of apocalyptic language and imagery, invoking as Beck did massive pictures of Stalin and Orwell and Mussolini (side by side with shots of Geithner, Obama and Bernanke), scenes of workers storming the Winter Palace interspersed with anti-AIG protests, etc. — and then maybe you have to add a crazy new twist, like switching from complaints of “socialism” to warnings of “fascism.” Rhetorically, this is the equivalent of trying to paint a picture by hurling huge handfuls of paint at the canvas. It’s desperate, last-ditch-ish behavior.

It’s been strange and kind of depressing to watch the conservative drift in this direction. In a way, actually, the Glenn Beck show has been drearily fascinating of late. It’s not often that we get to watch someone go insane on national television; trapped in an echo chamber of his own spiraling egomania, with apparently no one at his network willing to pull the plug and put him out of his misery, Beck has lately gone from being a mildly annoying media dingbat to a self-imagined messiah who looks like he’s shouldering more and more of the burdens of Christ with each passing day. And because he’s stepping into a vacuum of conservative leadership — there’s no one else out there who is offering real red meat to the winger crowd — he’s begun to attract not professional help but apostles, in the form of Chuck Norris (who believes we have to prepare for armed revolution and may prepare a run for “president of Texas”) and pinhead Midwestern congresswoman Michelle Bachmann, a woman who is looking more and more like George Foreman to Sarah Palin’s Joe Frazier in the Heavyweight Championship of Stupid. Down goes Frazier! Down goes Frazier!

This new Holy Trinity of right-wing basket cases has been pushing all sorts of crazy hallucinations of late, from Bachmann warning that the Americorps program would eventually be turned into a regime of forced re-education for American youth, to Beck’s meanderings about Obama creating FEMA-run concentration camps to warehouse conservative dissidents, to Norris and Beck stirring up talk of secessionist movements. And a lot of people are having fun with this, because, well, it’s funny. It’s like a Farrelly Brothers version of right-wing political agitation. But it’s also kind of sad.

After all, the reason the winger crowd can’t find a way to be coherently angry right now is because this country has no healthy avenues for genuine populist outrage. It never has. The setup always goes the other way: when the excesses of business interests and their political proteges in Washington leave the regular guy broke and screwed, the response is always for the lower and middle classes to split down the middle and find reasons to get pissed off not at their greedy bosses but at each other. That’s why even people like Beck’s audience, who I’d wager are mostly lower-income people, can’t imagine themselves protesting against the Wall Street barons who in actuality are the ones who fucked them over. Beck pointedly compared the AIG protesters to Bolsheviks: “[The Communists] basically said ‘Eat the rich, they did this to you, get ‘em, kill ‘em!’” He then said the AIG and G20 protesters were identical: “It’s a different style, but the sentiments are exactly the same: Find ‘em, get ‘em, kill ‘em!’” Beck has an audience that’s been trained that the rich are not appropriate targets for anger, unless of course they’re Hollywood liberals, or George Soros, or in some other way linked to some acceptable class of villain, to liberals, immigrants, atheists, etc. — Ted Turner, say, married to Jane Fonda.

But actual rich people can’t ever be the target. It’s a classic peasant mentality: going into fits of groveling and bowing whenever the master’s carriage rides by, then fuming against the Turks in Crimea or the Jews in the Pale or whoever after spending fifteen hard hours in the fields. You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit. Whatever the master does, you’re on board. When you get frisky, he sticks a big cross in the middle of your village, and you spend the rest of your life praying to it with big googly eyes. Or he puts out newspapers full of innuendo about this or that faraway group and you immediately salute and rush off to join the hate squad. A good peasant is loyal, simpleminded, and full of misdirected anger. And that’s what we’ve got now, a lot of misdirected anger searching around for a non-target to mis-punish… can’t be mad at AIG, can’t be mad at Citi or Goldman Sachs. The real villains have to be the anti-AIG protesters! After all, those people earned those bonuses! If ever there was a textbook case of peasant thinking, it’s struggling middle-class Americans burned up in defense of taxpayer-funded bonuses to millionaires. It’s really weird stuff. And bound to get weirder, I imagine, as this crisis gets worse and more complicated.
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Bankers' Pay Threatens to Bring Down the System Again!

Published on Monday, September 21, 2009 by The New York Times

Reform or Bust

by Paul Krugman

In the grim period that followed Lehman's failure, it seemed inconceivable that bankers would, just a few months later, be going right back to the practices that brought the world's financial system to the edge of collapse. At the very least, one might have thought, they would show some restraint for fear of creating a public backlash.

But now that we've stepped back a few paces from the brink - thanks, let's not forget, to immense, taxpayer-financed rescue packages - the financial sector is rapidly returning to business as usual. Even as the rest of the nation continues to suffer from rising unemployment and severe hardship, Wall Street paychecks are heading back to pre-crisis levels. And the industry is deploying its political clout to block even the most minimal reforms.

The good news is that senior officials in the Obama administration and at the Federal Reserve seem to be losing patience with the industry's selfishness. The bad news is that it's not clear whether President Obama himself is ready, even now, to take on the bankers.

Credit where credit is due: I was delighted when Lawrence Summers, the administration's ranking economist, lashed out at the campaign the U.S. Chamber of Commerce, in cooperation with financial-industry lobbyists, is running against the proposed creation of an agency to protect consumers against financial abuses, such as loans whose terms they don't understand. The chamber's ads, declared Mr. Summers, are "the financial-regulatory equivalent of the death-panel ads that are being run with respect to health care."

Yet protecting consumers from financial abuse should be only the beginning of reform. If we really want to stop Wall Street from creating another bubble, followed by another bust, we need to change the industry's incentives - which means, in particular, changing the way bankers are paid.

What's wrong with financial-industry compensation? In a nutshell, bank executives are lavishly rewarded if they deliver big short-term profits - but aren't correspondingly punished if they later suffer even bigger losses. This encourages excessive risk-taking: some of the men most responsible for the current crisis walked away immensely rich from the bonuses they earned in the good years, even though the high-risk strategies that led to those bonuses eventually decimated their companies, taking down a large part of the financial system in the process.

The Federal Reserve, now awakened from its Greenspan-era slumber, understands this problem - and proposes doing something about it. According to recent reports, the Fed's board is considering imposing new rules on financial-firm compensation, requiring that banks "claw back" bonuses in the face of losses and link pay to long-term rather than short-term performance. The Fed argues that it has the authority to do this as part of its general mandate to oversee banks' soundness.

But the industry - supported by nearly all Republicans and some Democrats - will fight bitterly against these changes. And while the administration will support some kind of compensation reform, it's not clear whether it will fully support the Fed's efforts.

I was startled last week when Mr. Obama, in an interview with Bloomberg News, questioned the case for limiting financial-sector pay: "Why is it," he asked, "that we're going to cap executive compensation for Wall Street bankers but not Silicon Valley entrepreneurs or N.F.L. football players?"

That's an astonishing remark - and not just because the National Football League does, in fact, have pay caps. Tech firms don't crash the whole world's operating system when they go bankrupt; quarterbacks who make too many risky passes don't have to be rescued with hundred-billion-dollar bailouts. Banking is a special case - and the president is surely smart enough to know that.

All I can think is that this was another example of something we've seen before: Mr. Obama's visceral reluctance to engage in anything that resembles populist rhetoric. And that's something he needs to get over.

It's not just that taking a populist stance on bankers' pay is good politics - although it is: the administration has suffered more than it seems to realize from the perception that it's giving taxpayers' hard-earned money away to Wall Street, and it should welcome the chance to portray the G.O.P. as the party of obscene bonuses.

Equally important, in this case populism is good economics. Indeed, you can make the case that reforming bankers' compensation is the single best thing we can do to prevent another financial crisis a few years down the road.

It's time for the president to realize that sometimes populism, especially populism that makes bankers angry, is exactly what the economy needs.

© 2009 The New York Times

Paul Krugman is professor of Economics and International Affairs at Princeton University and a regular columnist for The New York Times. Krugman was the 2008 recipient of the Nobel Prize in Economics. He is the author of numerous books, including The Conscience of A Liberal, and his most recent, The Return of Depression Economics. 

Gross National Happiness Should Replace GDP

Happiness as the Greatest Human Wealth

FRANK BRACHO

“From joy I came, for joy I live, in sacred joy I melt”

-Paramahansa Yogananda

Definition of Happiness

Happiness has been defined as “a state of well-being and

contentment”. The “well-being” component would carry a more external

dimension whereas the “contentment” component a more internal one. The

defining characteristic of happiness being the latter though: a feeling of

inner joy of satisfaction.

Another way to put it would be that “well-being” would address

grosser and less profound aspects of our nature as living beings whereas

“contentment” would address subtler and more profound aspects.

Yet both dimensions refer to basic aspects of our nature as human

sentient beings since we are flesh and spirit, body and soul; in one single

unit where the state of one dimension is dependent upon the other. In fact,

if the body is “the temple of the Spirit”, the Spirit is “the high energy of the

temple”.

Happiness has been ultimately the most cherished goal of any

conscious human being in any endeavor to better his or her condition. In the

founding of the republics of the Americas leaders such as Simon Bolívar and

Thomas Jefferson spoke about the importance of happiness in the purpose

of the new nations. Bolivar said “The best political system is the one that

assures the greatest sum of social happiness” and Jefferson placed the

pursuit of happiness next to life and liberty as one of the three fundamental

pillars enshrined in the American Constitution. Of course, much earlier

predecessors, philosophers and sages have referred to the notion of

happiness as the defining yardstick of human realization. Terms such as

“ananda”, “samadhi”, “nirvana”, “maripa”, “oriwaka”, in diverse spiritual

and native traditions have been used to refer to the ultimate bliss brought

about by Enlightenment as “the greatest state of happiness”.

Concerning Primarily The Well-Being Dimension

Well-being, Health and the GDP

But how can we further pin down the practical meaning of happiness ?

Back to the “well-being” component, this may be related to the concept of

health. The World Health Organization (WHO) defines “health” as “a state

of complete physical, mental and social well-being and not merely the

absence of disease or infirmity”. The latter tem, “infirmity”, comes from the

The Atlantic Monthly

in October 1995, concluded that: “By the curious

standard of the GDP, the nation´s economic hero is a terminal cancer patient

who is going through a costly divorce.. ” ( ! ) None of the former examples,

of course, are very conducive to happiness.

Of course, this kind of health or life-careless approach of the whole

GNP notion would be openly at odds with one of the most important tenets

of all major spiritual traditions, namely the one of Not Causing Harm (in

deed, word or thought): the “Primum non nocere” of Hipocrates, “Ama

guaña” of the Incas, “Ahimsa” of Hinduism and Buddhism-and in

particular the “Right livelihood” tenet of this (“to be careful to have an

occupation that does not involve destroying life or hurting people”).

Health in its broadest conception is the indispensable doorstep to the

deeper aspects of Happiness. Because only with a pure body and soul will

we be able to see the light, be the light; in other words be wise, and, with it,

attain peace and happiness.

Economic Growth, Development and Sustainability

The GDP notion has been a corollary of other broader economicist

and materialistic concepts such as “national economic growth” or

“development”. Both of these are intent on endless growth (an

unnatural notion since the ideology of growth for growth´s sake is the

ideology of the cancer cell) as well as imitation of supposedly advanced

or already developed countries –namely the industrial countries (a

notion increasingly called into question as the unsustainability of the

ruling industrial model becomes more apparent and glaring). Moreover,

the term “development” was first coined after World War II by

American President Harry Truman, under the influence of promotersadvisers

such as Nelson Rockefeller, who in those days cherished the

idea of a worldwide economic expansion in search of markets and

resources; which may further explain the economic bias of the concept.

No amount of adjectivizing such as adding the term “sustainable” to

“development” will change the picture unless a true paradigm change is

undertaken to address the deep-seated flaws of the present dominant model

of wealth and progress. As S. Cunnighan ironically has commented:

“Sustainability is a great concept, but the world needs restoration first. After

all, who really wants to sustain the mess we live in now?” (Cunnighan,

2003).

In the latter light, the official definition of “sustainable

development”, put forward by the Brundtland Comission, in 1987 lends

itself to some questioning. The Brundtland Commission defined

sustainable development as “being able to meet the needs of today ´s

generation without compromising the ones of future generations”.

Although a relative progress over previous notions, this definition in

our view still falls quite short. Both the biological and spiritual

deterioration of today´s generation itself are of such magnitude that its

own survival may also be compromised. Thus if “sustainable

development” is to be a realistic notion it must be focused also on the

immediate threat to the present generation and the “Here and Now”.

Those who may view with skepticism the prospect of a total human

collapse during the present generation need to be reminded of the fate

met by pre-Columbus America: in one single generation a formerly

thriving population was erased from the map as a result of all the

diseases, destitution and uprooting caused by its abrupt subjection to

European conquest. There is no reason why present-day humanity, so

much immersed worldwide in a growing quagmire of disease,

destruction and environmental contamination and uprooting, may not

meet the same fate; if the same unsustainable and suicidal course

persists. Of course, the self-nullifying of the present generation, no

matter how much material legacy it may leave behind, would

automatically imply the nullifying of the succeeding generations. An

early end of the game. A forewarning of this may be the alarming drop

on men’s sperm count and increase of infertility we’ve been witnessing,

as a result of the present biological and spiritual human deterioration,

which have brought about the so called “empty cradles” phenomenon, a

population drop in most of the industrial world. This “lock up” in the

“demographic wheel”, with serious consequences on the sustainability

of the economic, social and public policies in general.

If the concept of sustainability is to make it into the tools of a true

paradigm change we would suggest rather the following broader and

more relevant definition: “A human productive or creative endeavor is

sustainable when it doesn´t exceed the capacity of assimilation or

regeneration of an ecological-social system. ” The assimilation

dimension would be concerned with what such system can tolerate: for

instance, a “development” that disrupts the social equilibrium, because

it is unjust or oppressive, cannot be sustainable, just as it could not if it

keeps on producing piles of toxic waste which are unmanageable or

non-recyclable (which likewise would be akin to a constipation situation

in the human body, a root-cause of a myriad of diseases). The

regeneration dimension would concern itself with the replenishment

capacity of what consumed: a “development” that disrupts the

regeneration flow or balance of the natural order, when irrationally and

irreparably destroying or contaminating a forest, water sources, the soil,

or the complex interrelationships between these, could hardly be

considered sustainable.

In fact, an interesting measurement of the GDP adjusted to account

for factors such as income inequality and resource use, named Genuine

Progress Indicator (GPI), found that when these kind of factors are

brought to bear the GDP picture in a country like the USA shows a

steady decline since the 1970s – not an increase as the official views

claims (Haggart, 1999).

Returning to the notion of the balance of the Natural Order, how much

more sustainable and happier would human societies be if they adhered

fully to its fundamental laws of functioning! These have been particularly

honored by native cultures of the world (the ones that have lived in close

communion with the Earth). Chiefs Seattle´s internationally renowned

manifesto is an embodiment of these laws. Its passage: “The Earth doesn´t

belong to man but man belongs to the Earth…Man did not weave the web

of life; he is merely a strand in it. Whatever he does to the web, he does to

himself” is memorable in that regard. But the natural laws in fact have been

honored too in all major religious traditions, because they are another way

to refer to the divine laws.

Among the laws of the Natural Order stand out the following: The Law

of the Unity of Life or “All is one and all is alive” (akin to the law of

emptiness or interdependence of the Buddhist, which gives ground to

compassion as ultimately “enlightened self-interest”), The Law of Cause

and Effect (akin to the law of karma of Buddhist and Hindus), The Law of

Impermanence (particularly highlighted in Buddhism), The Law of

Analogy, The Law of Life Moving in Spiraled Cycles, and The Law of the

Complementarity of Antagonisms. If all human endeavors could be framed

within these laws they would indeed naturally lead to healthy and happy

human communities.

A recent interesting contribution to the furthering of the concept of

sustainability from an ecological viewpoint is the one of “the ecological

footprint” (EFP). This compares renewable natural resource consumption

with nature’s biologically productive capacity. A country’s footprint is “the

total area required to produce the food and fibres that country consumes,

sustain its energy consumption, and give space for its infrastructure”

(WWF, 2002). According to this index, humanity´s ecological footprint is

already exceeding significantly earth´s biological carrying capacity, and a

planetary imitation of the consumption pattterns of a country like the US

would require of three planets earth –which would make such model

inherently unsustainable. The EFP, on the other hand, overlooks two

important factors which, as said early, cannot be separated from the

physical natural domain: the internal social sustainability of humanity itself

(including its possible own collapse before the one of the planet´s) and the

intricate ecological services or inter-flows (like the water, wind and

temperature “cycles”) which go beyond any demarcated physical areas.

Ultimately any true well-being should be inherently “sustainable”,

“social”, “fair”, etc; or otherwise it wouldn´t make much sense.

On the limits of measurement as well as the importance of qualitative

aspects and people´s empowerment.

On the other hand, the ruling GDP and macro-economic account

system is overly-biased towards valuing everything in money terms, and

disregarding what cannot be translated into these. Money has been made an

overpowering end unto itself within the GDP mind-set, rather than a means

to reflect real and sustainable value. The former ultimately stemming from

the “original sin” of capitalism namely being born out of the charging of

interest over loaned money, which made money acquire a value in itself that

earlier lacked. The mighty power “to create money out of nowhere” with

which society has endowed bankers has become self-propelled and

entrenched in vested interests. In fact, as it has been has noted, worldwide:

“almost all the money we use (i. e. except the notes and coins which today

are only 3% of the total) came into existence as a result of a bank agreeing to

make a loan to a customer, at interest. This is why it is called “debtmoney”,…

the true purpose of the Global Monetocracy is that of money

growth in order to maintain the current debt-based money system”

(Madron and Joplin, 2003).

In fact, the most important things in life such as health, love, peace and

happiness, do not lend themselves to being bought or sold, nor depend

fundamentally on money-priced material goods. In spite of this, the

dominant “development” or “well-being” conception has clearly tended to

emphasize the quantitative over the qualitative, the monetary over the non

monetary, income over a decent and fulfilling occupation, competition over

cooperation, and the material over the spiritual.

The blatant disregard of the GDP for social and environmental costing,

the contribution of the “underground economy” (the economy of love,

reciprocity and solidarity), the qualitative aspects of human well-being,

makes it indeed a very limited and flawed expression of the well-being of a

nation or community.

Concerning the bias of the ruling paradigm towards quantitative

measurement, the shortcomings of this to assess something as complex and

qualitative as human well-being cannot be over-emphasized; in order to

avoid distortions or delusions in this endeavor. In fact, interestingly enough,

the sanskrit word “Maya”, referring to “that which causes delusion to

understand reality” also means literally “the measurer” ( ! ).

On the other hand, it may be said on behalf of the GDP that the handful

of economists and statisticians that created it perhaps never had in mind

that the GDP should become the paramount yardstick of human well-being

which powerful economic and political interests later made, nor the

universal projection that the UN blessing imparted to it. In fact its early

technical creators designed it primarily to deal with the specific needs

arising from World war II both for the facing of the war and post-war

reconstruction efforts; in retrospect something achieved with remarkable

success. In the light of this, the American economist Simon Kuznets who,

under the ideas of his British colleague John Maynard Keynes, first brought

about the application of the GDP system in the USA itself, noted later on

with concern the pretense of converting it into a measurement of full human

well-being and devoted the rest of his life to caution against the

shortcomings of the GDP in this regard (Haggart, 1999).

In light of the former, the responsibility for GDP´s outgrowth and

hegemony would more a consequence of the misplaced priorities of

governments, business and societies, unable to uphold more meaningful

human well-being indexes. But in terms of the past or present responsibility

of technicians, to leave it at this, would be too evasive or self-indulgent. In

the face of an accounting system such as the GDP not only having ceased to

be part of the solution but having as well become part of the problem

because of its head-on collision with true well-being and sustainability, in a

world threatened with collapse, statisticians cannot rest indifferent but

should take an ethical stand for truth and life, denouncing the flaws of the

GDP and actively joining the movement towards alternatives. In fact, the

GDP hegemony has also held down technical material resources to foster

alternative accounting systems of well-being (reflected for example on the

utter under-staffing or under-equipping of the public agencies charged with

the monitoring of social, environmental and health indicators).

Now all the above is not to suggest that the powerful economicist

Central Banks or similar institutions that dutifully calculate every year

national GDPs should now be mechanically replaced by some kind of new

social central banks that should come up with some sort of “social GDP”.

The transformation called for requires not only a change in the tools and

methods but on the very premises of the present system.

In this latter regard, two key aspects are the enhancement of quality

and the advancement of people´s empowerment–both addressing two major

shortcomings of the dominant system.

Some International Efforts to Redefine Well-being and Progress

Many initiatives have been proposed internationally to address

concerns such as the formerly stated. In retrospect, a particularly groundbreaking

and pioneering one was the one of the International Meeting on

More Effective Development Indicators, held in Caracas in 1989, with the

attendance of a number of the leading experts on the issue from diverse

corners of the world, a meeting which the author of this presentation was

instrumental in convening in his capacity of Coordinator of the Office of the

South Commission in Venezuela. The findings of the meeting highlighted

some key concerns that would become central to the subsequent agenda for

change. In view of this, we reproduce

in extenso the following summary

about the its conclusions:

"The meeting noted the limitations to the advisability of the

Gross Domestic Product (GDP) continuing to be the main

reference for measuring development and pointed to formulas for

correcting or improving it in order to obtain a more integral and

effective means of measuring the socioeconomic condition of

peoples. This in turn was complemented by the proposal for

parameters to measure the quality of life in such aspects as

poverty, the biological condition of infancy, health, education,

nutrition, employment and income, pollution and the destruction

of natural resources; and how this measurement could be

harmonized at the international level, as was once the case with

the GDP, so that countries might have a “common language” and

make a better job of channeling the collective effort in favor of

development. In turn this was related to the discussion of whether

the new forms of measurement should be reflected by a composite

(GDP type) index or a broken down index or set of separate

indicators (to avoid the oversimplification of the GDP); opting in

the end for a healthy middle-of –the-road formula which proposes

a list of basic indicators at the international level, leaving open the

option for countries to continue to try more ambitious formulas–

including composites indexes-national circumstances and

information gathering capacity permitting. Likewise, considerable

importance was given to the need for the indicators proposed to

be easily understood by the population and have significance at

the local level and the level of social groups, so as to ensure

authentically participatory and decentralized types of

development” (Office of the South Commission in

Venezuela/TOES Books, 2000).

 

Two years after the Caracas meeting, in 1990, The United Nations

Development Program (UNDP) launched The Human Development Index

(IDH). In fact, among the attendees of the Caracas meeting there had been a

prominent participation from the in-the-offing HDI initiative. The HDI,

unlike the GDP, concerns itself with the social performance on issues such

as health, education and purchasing power, that is quality of life issues

primarily. Its chief architect, late former Minister of Planning of Pakistan

Mahbub Ul-Haq, used to highlight that “a healthy and long life” should be

the ultimate yardstick of human well-being, a goal kept by the HDI up to

the present time. Its simplifying composite or bundled nature (as the GDP it

basically sums it all up in a single number), has been complemented with

wider “external themes”-focused annual reports. With its annual ranking

and reports as well the long-reach UN institutional clout, the HDI has

challenged the short-sighted GDP ranking and made a significant

international contribution to stimulate a change of vision on the issue of

well-being indexes. On the other hand, just like the GDP, its primarily

simplifying composite-quantitative character has made it prone to miss out

important qualitative dimensions as well as to keep the Index only as

territory of the qualified technicians who can make its complex calculation –

to the detriment of people´s empowerment in both the compilation and

monitoring of their own well-being. One illustrative case is the emblematic

issue of longevity on which we´ll elaborate later.

The targets and indices of The Millennium Plan, adopted by the UN in

2000, have been another effort in the right direction, even though they are

still too much influenced by the monetary income-related notion of poverty

as well as they have not brought about a sufficient mobilizing echo (the

Plan´s chief laudable concern)-particularly at the level of national policies.

The World Bank itself, in spite of all its stakes in the dominant system,

has put forward the need to widen the concept of capital with a view to

include: “natural capital” (natural resources), “construction capital”

(infrastructure), “human capital” (quality of life), and “social capital”

(family, community, solidarity, etc), in order to achieve “a more holistic

approach to development”. Nevertheless the former proposal still keep

certain bias to continue to consider human and other living beings, as well

as the natural environment as “inputs” or means for the productive process,

rather than end in themselves to which, on the contrary, the productive

process should be subservient. Of course the seeming change of stand in the

WB position is an acknowledgement of the increasing pressure of world

public opinion to check the contemporary versions of the blind economicist

paradigm: “neoliberalism” and “globalization. These were given impetus by

the so-called “Washington Consensus” and have been promoted by

international organizations like the International Monetary Fund, the World

Bank itself and the World Trade Organization. The popular challenge has

been led from the grass-root of peoples and civil societies, but has also

counted on thinkers coming from the system itself like Joseph Stiglitz, a

Nobel Prize in Economics and former Chief Economist of the World Bank.

Stiglitz has denounced the insensitivity and blindness of the “economic

adjustment programs” or “economicist reforms” of recent times, and in

particular its devastating effects on populations, the environment and the

dismantling of national economies, citing in particular the telling example of

the ill-fated experience of Latin America in that regard. Interestingly

enough, in his analysis on the reach of the adverse effects of the reforms in

the Latin American region Stiglitz has noted on the on other hand that: “..

the subsistence farmers isolated from the market economy were among the

less affected by these”, an evidence that would lend further weight to the

merits of self-reliant communities, even if on austere standards, to guard

against the perilously misguided policies of the international economy.

It is apparent that there could be and must be another type of free

market: one with ethics, social and environmental responsibility, as well as

on a more human scale to facilitate accountability. Just as there could be and

must be another type of globalization: the globalization of responsibility and

solidarity. Another world is possible-as the motto of the contesting World

Social Forum has proclaimed !

More recently, in October 2003, the ICONS meeting in Curitiba, Brazil,

was another encouraging initiative. ICONS was convened by an alliance of

Brazilian civic society organizations and businesses, with the concurrence of

sectors of the new Brazilian government and the support-inspiration of

international partners such as noted alternative indices pioneer Hazel

Henderson (Henderson, 2003). The meeting drew an attendance of about

700 hundred participants, in order to boost in particular the cause of

alternative people´s-based well-being indicators in Brazil and, on a broader

plane, to encourage further international efforts in this regard.

Of course Brazil is just one of a number of countries world-wide where

leading initiatives have or are being tried or proposed, both from the

government and non-governmental side. Among them, we could also

mention by way of example the cases of Costa Rica, Canada, Iceland, The

Netherlands, Denmark, Sri-Lanka, Mongolia and, of course, the case of the

country that has motivated the Meeting for which this paper has been

prepared: Bhutan, about which we´ll comment more later. Even in USA

some interesting attempts have been made, mostly from the nongovernmental

side, such the Calvert-Henderson Quality of Life Index, an

unbundled set of indicators aimed at encouraging communitie´s

mobilization and self-affirmation, and the earlier mentioned Genuine

Progress Indicator (GPI), an attempt on the composite side to reform the

GDP.

continued here...

America the Decadent

Published on Friday, September 18, 2009 by CommonDreams.org

Can America Be Salvaged?

by David Michael Green

I really don't know what to say anymore, about a country in which proposing a new and better version of corporate-plunder masquerading as national healthcare gets you burned in effigy for being a socialist stooge by gun-toting angry mobs.

I really don't know what to say anymore, about a country in which the same people who hate you for being a socialist simultaneously hate you for being a fascist.

I really don't know what to say anymore, about a country in which angry mobs of supposed anti-socialist demonstrators scream at their congressional representatives to "keep your government hands off my Medicare".

I really don't know what to say anymore, about a country in which claims that the government is going to start killing off seniors are taken seriously by tens of millions of people.

I really don't know what to say anymore, about a country in which people are all worked up about government czars, but sat silently while the Bush administration destroyed the Bill of Rights and used a thousand signing statements to write Congress out of the Constitution.

I really don't know what to say anymore, about a country in which deficits have all of a sudden become the source of enormous anger among people who said nothing about them previously, as the tax cuts for the wealthy, off-budget wars based on lies, and unfunded prescription drug Big Pharma giveaway transmogrified the biggest surplus in American history into the biggest deficit ever.

I really don't know what to say anymore, about a country in which politicians can rant incessantly about other peoples' sexual morality, get caught screwing prostitutes, and then still be reelected to the highest ranks of government by trashing the president.

I could go on and on, but what would be the point? The positions of so many Americans on so many policy questions are truly inane - yes, for sure. I wish that was all that concerned me. But it all goes so much deeper than that.

The entire premise of a self-ruling democracy rests on some reasonable degree of rationality and some reasonable degree of an ability to discriminate between real information and falsehoods. Today's American democracy seems to lack these qualities in increasingly abundant amounts.

And yet it goes deeper than that still. The entire premise of a society - any society, democracy or not - is that it possesses a certain degree of shared community, a ‘we-ness' that transcends narrower tribalisms and self-interest in critical ways and at critical moments. That too has unraveled of late. Think of the nice white men with shotguns blocking the exit from flooded New Orleans during the worst moments of Hurricane Katrina.

Looking at America today, it all feels so very past tense to me.

In some very profound ways, this is not the place nor the time you'd expect the implosion of an established democracy and society. To be an American is to be a member of the richest and most powerful nation on Earth. If they're not whining so much in Botswana these days, who the hell are we to?

On the other hand, though, it makes a lot of sense. The moment correlates precisely with the peaking of the empire several decades ago, now further exacerbated as the deep wells of remedial pillaging - our credit cards, our mortgages, our children, a rising Chinese middle class, brown people everywhere, the environment - have disappeared entirely, with nothing but despair and moral dessication left in their place. Moreover, the folks most aggrieved and most estranged from their senses of late are precisely the people who were bought off of their sanity at every turn with the latest form of bigotry du jour, used to assuage their ever-diminishing sense of relative social status. Over and over again, the people I see on my television screen acting absolutely and incoherently stupid in their senseless rage seem to be little more than fat, white, Southern, sixty-something racist good ol' boys.

Well past their sell-by dates, they've of course gotten tremendous help cranking it up again. That's no surprise. I'm not sure these crackers are smart enough to even be stupid without coaching. As Lyndon Johnson used to say: "Couldn't pour piss out of a boot if the instructions were written on the heel". Lucky for them, those marching orders come from a host of politicians and media whores who, in an even moderately just world, would receive a wee taste of Abu Ghraib in repayment for the reckless destructiveness they've fomented upon the always precarious edifice of liberal democracy. There's special place in Hell reserved for these shouters of "Fire!" in crowded theaters, these bloodsucking bottom-feeders, especially since they are being paid so handsomely for their faithful service as prolocutors for predators.

I doubt anyone has ever reminded us of this ongoing danger more eloquently than did the famous American diplomat, George Kennan, when he wrote: "The counsels of impatience and hatred can always be supported by the crudest and cheapest symbols; for the counsels of moderation, the reasons are often intricate, rather than emotional, and difficult to explain. And so the chauvinists of all times and places go their appointed way: plucking the easy fruits, reaping the little triumphs of the day at the expense of someone else tomorrow, deluging in noise and filth anyone who gets in their way, dancing their reckless dance on the prospects for human progress, drawing the shadow of a great doubt over the validity of democratic institutions. And until peoples learn to spot the fanning of mass emotions and the sowing of bitterness, suspicion, and intolerance as crimes in themselves - as perhaps the greatest disservice that can be done to the cause of popular government - this sort of thing will continue to occur."

Hear, hear. Sorry to say it, George, but you're lucky to have died when you did. It's only gotten so much worse in just the last few years.

And while the O'Reillys and the Reagans of our time have joined forces to turn "the counsels of impatience and hatred" into an entire political party and more, they are, of course, mere conscious tools of the Big Green Greed that ultimately drives the system. They know they are prostitutes, but the money's good. And so is the fame and adulation - no small thing for these sorry critters. Look at the Becks and Limbaughs and Gingriches of this country. Were there ever people in this world with so much self-esteem ground to be made up from the transparent ostracization of their younger days? Were there ever individuals so obviously motivated by retribution against everyone who treated them like the jerks they were in their formative years? Was there ever a walking warning sign more brightly flashing about the costs to society of youthful bullying? I'm sorry Glenn, I'm sorry Rush, I'm sorry Newt. I know when you were younger you were pudgy fast-talking smart-ass petulant pricks who made up in wedgies from bigger guys what you never got in attention from attractive women. But isn't about time you stopped taking it out on America? I'm sorry you got your ass kicked on a weekly basis, but I didn't do it.

Though I'm thinking about it now.

It takes a willful act of ignorance (something we see a lot of these days) not to perceive the United States as the latest in history's falling empires. Like Rome, the true contribution of its sometimes great ideas has ultimately been substantially buried under the rubble of its ill-fated decision to greedily grasp the nettle of empire. Unlike Rome, this puppy is taking decades, rather than centuries, to collapse.

Empires come and go, of course. Rising and falling is what they do. It's their job in life. What is truly frightening to contemplate, however, is what happens when an empire falls in the era when technological capacity absolutely dwarfs political maturity? And what happens if that occurs not just anywhere, but in arguably the most immature, self-serving and self-indulgent of developed societies on the planet?

The only model we have for this so far is the Soviet implosion of two decades ago, though even that is only a partial representation, since the Soviet bear was no match for the American boor in piggishness. Even so, that history does not bode so well, outward appearances notwithstanding. We should all collectively be walking on eggshells thinking about the tens of thousands of strategic and smaller tactical nuclear warheads that may or may not be accounted for. Nor is the renascent and rather irredentist new Russia necessarily a pretty picture either, a fact that may become increasingly relevant in the coming decades. Still, all this noted, the Russian imperial collapse has to be said to have been relatively uneventful, closer to the post-war British and French experiences than to any cataclysmic end of days scenario.

I wish I could be so sanguine about the implosion of the American empire. In one sense, it was probably a good thing for the Russians to go through this experience with only a fake democracy and repressed civil liberties in place, and some serious if undemocratic quasi-dictators running the show. It might have saved the country from the worst elements seizing control. I don't much care for the product of American democracy and political discourse as things now stand. Imagine how it might all turn out under real duress, with the Glenn Becks and Rush Limbaughs further egging on both the angry rabble on the ground and the Sarah Palins in the political sphere.

I'm tired of overused Nazi references these days, but the most salient analogy has to be to 1930s Weimar Germany. The economy is broken, the political system is broken, the public is struggling, angry and full of nationalistic rage at their country's failure to possess all the riches and glory it and they deserve. And so say bombastic demagogues, backed by a small army of street thugs, and offering both a scapegoat and a solution. Given a democratic election in which voters can choose between a dynamic, assured and energetic salvation figure, on the one hand, and an enervated, inept and passionately passionless status quo government, on the other, it's not hard to figure what will happen. And what did.

Above all, what is wrong with this country (and what therefore inevitably becomes the world's problem too - just ask the people of Iraq), is not so much the vicious thugs who would just as soon vacuum it free of any piece of wealth they can get into their hands as take their next breath. Nor is it the existentially petrified Confederate Crackers for Jesus who find that hate and violence is a pretty decent emollient to mitigate for the moment their otherwise completely debilitating fears.

That stuff always happens, though admittedly not often quite like this.

What's really wrong is the near total absence of prominent political figures willing to sacrifice much of anything to protect their country from these depredations.

It's been so long now that I've forgotten for sure, but didn't they used to call that patriotism?

David Michael Green is a professor of political science at Hofstra University in New York. He is delighted to receive readers' reactions to his articles (mailto:[email protected]), but regrets that time constraints do not always allow him to respond. More of his work can be found at his website, www.regressiveantidote.net.

Cow Manure Biggest Polluter of America's Rivers, Streams

From Scientific American:

Runoff from agriculture is the biggest polluter of the country's river and stream water, according to the U.S. Environmental Protection Agency (EPA), and it has been fingered for hypoxic dead zones and toxic red tide algae blooms.

But how much of that runoff makes it into people's drinking water closer to home? In agricultural areas, it can be enough to cause persistent health problems, including diarrhea and other infections, according to a report today in The New York Times.

"Sometimes it smells like a barn coming out of the faucet," Lisa Barnard, a Wisconsin resident told the Times. Barnard's well water tested positive for various contaminants and bacteria, including E. coli—which point not just to any runoff, but that coming from excess manure, according to the Times piece.

Beef and dairy farms often dispose of manure and other waste by shipping it out as fertilizer for crops, but "there just isn't enough land to absorb that much manure," said Bill Hafs, a Wisconsin county official who is angling for more stringent rules and enforcement, in an interview with the Times. When heavy rains or early spring melts come, excess waste can find its way into rivers and streams and also into groundwater—and into wells.

Brown County, where Hafs works, has about a quarter of a million people, according to the U.S. Census Bureau, and about 41,000 dairy cows, which is about six people per cow. And as Hafs noted, "one cow produces as much waste as 18 people."  And that is plenty of poo, according to many residents whose wells have been contaminated.

"More than 30 percent of the wells in one town alone violated basic health standards," Hafs told the Times. "It's obvious we've got a problem." But he and others who have raised a stink about the contamination have been met with powerful agricultural lobbies. "We don't have the laws to force people to stop" dumping it, Hafs added. Dairy farms in Brown County create about a million gallons of waste a day, the Times reports. 

For the most part, biological contaminants from farms that runoff into rivers or filter down into groundwater are regulated only by local laws. The Clean Water Act's jurisdiction is constrained largely to pollutants in water that is moving through manmade water supplies, such as aqueducts or pipes. The EPA does regulate farms that have more than 700 cows, but enforcement has been lax, the newspaper noted.

"The challenge now is for EPA and Congress to develop solutions that represent the next step in protecting our nation's waters and people's health," Lisa Jackson, the EPA administrator, said in an interview with the Times.

Image courtesy of canadianfamily via Flickr

Canadians Prefer Their Health Care System to US'

Published on Tuesday, September 15, 2009 by Globe and Mail

An Inconvenient Truth for the GOP: Canada's System is Better

by Eugene Lang and Philip DeMont

It is rare for Canada to get noticed in the United States. In fact, it is almost unprecedented for anything Canadian to be the focal point of debate in Washington. Yet we have seen just that in recent months during the congressional wrangling over U.S. President Barack Obama's attempts to reform health insurance.

Canada's medicare system has suddenly been thrust into the spotlight south of the border. It has been pilloried by the Republicans in Congress, the subject of derisive and distorted television advertisements, described variously as a system of medicine by bureaucrat, a statist form of health care afflicted by gross inequities and inefficiencies, one that pales in comparison to the U.S. model. The hysterical tone of the anti-medicare rhetoric among Republicans would make one think Canada is North Korea.

But there is an inconvenient truth that the Republican ideology cannot dispute. Canada's approach to providing citizens with universal health insurance is superior to the U.S. model of private insurance. When we get beyond the anti-medicare ideology and histrionics on Capitol Hill, we can establish this by reference to four basic numbers that give a good sense of our system versus the system in the United States.

Life expectancy is a basic measure of the quality of health care. In the U.S., a citizen will live 77.8 years on average. In Canada, you can expect to live two and a half years longer (80.4 years). Infant mortality is also a vital indicator of health care. In the United States, 6.37 infants die out of every 1,000. In Canada the number is 5.4 out of a 1,000.

But what about the cost differences of the two approaches to health care? Surely our Leviathan-like system, which produces such enviable results, must cost a fortune relative to the U.S. model.

The best measure of health care costs is the percentage a country spends relative to the size of its economy, or its gross domestic product (GDP). Canadians spend about 10 per cent of GDP on health. Americans spend 16 per cent to achieve inferior results on life expectancy and infant mortality.

Finally, it is estimated that there are somewhere around 40 million Americans – about 12 per cent of their population, well in excess of the total population of Canada – who have no medical insurance whatsoever. These unfortunate people are literally on their own in paying for any and all medical treatments they require. That gap in coverage is staggering, making the United States an outlier among all advanced Western nations.

One might ask how many uninsured citizens exist in Canada? The answer is zero – all Canadians are insured. In this country, good-quality, universally accessible medical care is regarded as a basic element of citizenship, kind of like owning a gun is in the U.S.

So to sum up. We live longer than the Americans do. We are less likely to die at or soon after birth than the Americans are. All Canadians have medical insurance, whereas a huge number of Americans don't. And we pay less as a society for health care than they do in the United States. Four numbers paint a stark picture. And when you strip away the anti-medicare ideological rants and falsehoods on display in Washington, Canada's approach to health insurance would probably sound pretty good to many Americans.

To their credit, by putting public insurance on the table as a supplement to private plans, the Democrats in the U.S. Congress are trying to drag the United States into the club of civilized nations when it comes to health care. We've been in that club since the establishment of medicare more than 40 years ago.

Don't get us wrong here. We are not saying medicare is perfect; it is far from that, and it requires constant improvement, as most Canadians understand. But it is not a bad deal for citizens of this country.

The Republican-led anti-medicare lobby in Congress knows these numbers and facts. But they are regarded as inconvenient truths that must be ignored in the crusade to discredit the Canadian approach to health insurance, to ensure no public option creeps into the U.S. system. Anti-government ideology is running amok in Washington, trumping facts and rational debate, distorting one of the most important public policy issues the United States has grappled with in decades.

Ultimately, the U.S. public will pay the price for that.

© 2009 Globe and Mail

 

Eugene Lang is a former senior economist at Finance Canada. Philip DeMont served as a senior policy adviser to Ontario's health minister.

There's More to Life Than GDP; Just Ask Sarkozy

Published on Tuesday, September 15, 2009 by The Nation

Sarkozy Wants G-20 to Reject 'Cult of the Market'

by John Nichols

When the G-20 meets in Pittsburgh next week, French President Sarkozy will urge world leaders to make two moves -- one immediate and one long-term -- that have the potential to temper capitalism's worst abuses and reassert human values at the national and international levels.

Sarkozy's aides say he will walk out of the summit of presidents and prime ministers from the world's most developed countries if the leaders fail to endorse a plan to curb bonuses for bankers.

That's the immediate demand. And it is an important one, as it could put the G-20 in the unusual position of trying to tame -- rather than cheer on -- the banksters and corporate CEOS that have so unsettled the global economy.

But even more important will be the French president's push to "revolutionize" international definitions of development, progress and achievement.

In recent decades, those measures have pretty much begun and ended with the bottom-line details of economic growth and wealth accumulation.

But Sarkozy says he wants to use the G-20 gathering as the launching point for a "fight" against what he describes as the "cult of figures" and the "cult of the market."

"A great revolution is waiting for us. For years, people said that finance was a formidable creator of wealth, only to discover one day that it accumulated so many risks that the world almost plunged into chaos," argues the French leader. "The crisis doesn't only make us free to imagine other models, another future, another world. It obliges us to do so."

Sarkozy's "revolution" would still use measures of economic growth and contraction in the analysis of a nation's success. But the definition would be expanded beyond traditional gross domestic product (GDP) models to include measures of well-being and what Sarkozy describes as "the politics of civilization." These include environmental sustainability, the quality of public services and the amount of time citizens of a country have to meet family responsibilities -- which the French leader values as "personal services provided within a family circle."

Sarkozy, a conservative who was elected on a platform that promised to make the French economy more efficient and workers more productive, is not proposing some new-age fix for what ails the global economy. Rather, he is arguing that it is time to "refound" capitalism within what he describes as "moral" parameters in response to the now year-old global economic downturn and an equally serious decline in public confidence about the direction of nation states.

The broader measures are outlined in a report Sarkozy commissioned almost two years ago from a team of Nobel Prize-winning economists who have been critical of standard approaches to measuring the progress of nations, including American Joseph Stiglitz and Indian Amartya Sen, as well as Jean-Paul Fitoussi, the internationally-respected president of the French Observatoire des Conjonctures Economiques (OFCE).

The report from France's Commission on the Measurement of Economic Performance and Social Progress proposes a global "statistical system which goes beyond commercial activity to measure personal well-being..."

That's what Sarkozy will be talking about in Pittsburgh next week, as the G-20 gathers. And he won't be alone. Stiglitz will be in the city, as well, joining civil-society leaders and activists to discuss the development models and measures at a September 23 forum sponsored by The Nation, the Institute for Policy Studies and a coalition of grassroots groups.

Says Stiglitz, "GDP is an attempt to measure one part of what is going on in our society which is market production. It is what I call GDP fetishism to think success in that part is success for the economy and for society."

Stiglitz, the former chief economist of the World Bank, argues that, "While there is no single indicator that can capture something as complex as our society, the metrics commonly used, such as gross domestic product, suggest a trade-off: one can improve the environment only by sacrificing growth. But if we had a comprehensive measure of well-being, perhaps we would see this as a false choice."

Getting beyond false choices, contends the winner of the 2001 Nobel Memorial Prize in Economic Sciences, will allow for sounder policy-making on the parts of governments and global groupings such as the G-20.

"What we measure affects what we do," explains Stiglitz. "If we have the wrong metrics, we will strive for the wrong things."

Using sounder measures will also increase the legitimacy of governments in the eyes of citizens, says Sarkozy.

That's a message that could resonate with at least some G-20 leaders, especially if the French president delivers it in the terms he used in Paris Monday.

"For years, the official figures have boasted of more and more economic growth," Sarkozy said at the Sorbonne. "It now appears that this growth, by placing the future of the planet in danger, destroys more than it creates? All over the world, people are convinced that we are lying to them, that the figures are false, or worse, faked. Nothing could be more damaging to democracy."

© 2009 The Nation

Bush Left the Economy in Shambles

Published on Sunday, September 13, 2009 by CommonDreams.org

Bush’s Economic Performance: A Final Tally

by Robert Freeman

Five years ago, Forbes magazine performed a worthy public service. The right-leaning business publication that dubs itself, "Capitalist Tool," published a set of criteria by which to judge the economic performance of 10 post-war presidencies. It then evaluated each presidency against that set of criteria.

The criteria themselves are straightforward. They include GDP growth, real disposable personal income, employment, unemployment, inflation, and deficit reduction. All are mainstream metrics of economic performance. Data for each are readily available from public sources and are regularly updated.

It is a measure of Forbes' integrity that it let the chips fall where they may. The top three performers were all Democrats: Clinton, Johnson, and Kennedy. The bottom three were all Republicans: Nixon, Eisenhower, and Bush I. The middle was a mixture of Republicans and Democrats: Reagan, Carter, Ford, and Truman.

Interestingly, however, Forbes didn't use the criteria to evaluate the candidate it was supporting for President at the time, George W. Bush, even though the article was published in July 2004, in the middle of a presidential election. Surely they ran the numbers. One can't resist suspecting that their boy fared poorly for the comparison.

But now, with his two terms ended, it is worthwhile evaluating Bush's performance and comparing it with that of the last Democratic president, Bill Clinton's. The reason for choosing Clinton is that his is the only two-term Democratic presidency since the 1960s and the two are adjacent, sharing similar post-Cold War contexts.

A comparison is also needed because Republicans have taken to criticizing anything Obama, without offering alternatives. But Bush's economic policies were of the exact same ilk as Ronald Reagan's and his father's, George H.W. Bush. They are classic, trickle down economics whose principal purpose is to shift ever more of the nation's wealth to the already wealthy. Bush's policies ARE the Republican alternative so it's important to know the results they produce.

So what do the data show?

The first metric Forbes offered was real growth in Gross Domestic Product. GDP measures all the goods and services produced in the economy in a single year. The "real" part factors out the effects of inflation. It is the most encompassing of all measures of economic performance.

During Bush's eight years in office, real GDP grew by 2.0% per year. Over Clinton's eight years, it grew 75% faster, 3.5% per year. The difference is so great that Clinton actually added more to the GDP in his eight years than Bush did in his, despite having started from a much lower number. Clinton 1: Bush 0.

Forbes' second metric was real disposable personal income. As noted above, the "real" part factors out the effects of inflation. The "disposal" part adjusts for taxes. So real disposable personal income tells us what a person's income actually buys, after inflation and taxes. It is one of the most meaningful measures of economic well-being.

As with real GDP growth, the numbers differ greatly. Bush grew real disposable personal income by 19.6 % over his term. Clinton grew it more than 40% faster, by 28%. And this comparison is understated because the vast bulk of income growth under Bush went to the very wealthiest of income earners. Between 2000 and 2007 two thirds of all the growth in the entire economy went to the top 1%. If average incomes were considered, the difference in performance would be far more stark. Clinton 2: Bush 0.

With employment, the third measure of economic performance commended by Forbes, the differences between Bush and Clinton become monumental. Clinton's economic policies created 23 million new jobs over his eight-year tenure. It was the greatest number of jobs ever created under one presidency.

Bush's record on employment was equally legendary, but for the opposite reason. Despite inheriting an economy that was one third larger than the one Clinton inherited, Bush created a mere 5 million new jobs, one fifth the number created by Clinton. It is the lowest percentage level of job growth ever recorded for any eight year period outside of the Great Depression. Clinton 3: Bush 0.

Employment, of course, is closely related to the fourth of Forbes' measures of economic performance: unemployment. When Bill Clinton took office, in January 1993, unemployment stood at 6.9%. When he left office, it was at 4%, the lowest level since 1969.

When George Bush took office, he inherited Clinton's unemployment number, 4%. When he left office, in January 2009, the unemployment rate stood at 7.2% and was skyrocketing. The economy was hemorrhaging 600,000 jobs per month. Today, unofficial unemployment stands at 9.7%, the second highest rate since the Great Depression. Clinton 4: Bush 0.

Inflation is the fifth measure in Forbes' overall evaluation framework. Inflation can create the illusion of prosperity but it does so by debauching the purchasing power of money. So, it is routinely considered one of the most important gauges of economic performance. Lower numbers are better. Inflation averaged 2.54% per year under Bill Clinton and 2.83% per year under George Bush. Clinton 5: Bush 0.

The final measure of economic performance recommended by Forbes is reduction in the federal budget deficit. Deficits occur when the government spends more than it takes in in taxes. Like inflation, deficits create the illusion of prosperity by spending money borrowed from the future. They are a favored ruse of Republican presidents which have used them relentlessly to deliver fake prosperity over the past three Republican administrations. When the borrowing has to be repaid, which we're coming up on now, the effect will be devastating.

Here, the comparison is off the charts. Clinton inherited a $290 billion deficit from George H.W. Bush. He reversed Bush's and Reagan's trickle down economic policies, raising taxes on the wealthy, and reducing them on the working and middle classes. As a result, he was able to reduce the deficit every single year of his presidency. By 1997, the government was running budgetary surpluses, the first since 1969. He delivered a $230 billion surplus in 2000.

Bush reversed Clinton's policies, lowering taxes on the very wealthy - his "base" as he called them - and effectively raising them on everyone else. In his first full year at the helm of the economy, he delivered a $157 billion deficit, and he never looked back. By 2004, the deficits were topping $400 billion a year. While Clinton delivered surpluses, Bush's deficits totaled some $3.7 trillion over his eight-year term. Clinton 6: Bush 0.

There is no subtlety, no ambiguity about the data or the economic performance they reveal. By every single measure, Bush's policies and tenure were worse - much worse - for the American economy and the American people than those pursued by Bill Clinton. And we are still living today in the aftermath of the destruction they have wrought.

We could add any number of other measures as well, measures not offered up by Forbes but which are still straightforward indices of economic performance. Clinton reduced poverty, from 15.1% when he took office to 11.3% when he left. Bush increased it, from 11.3% when he started to 12.5% at the end of 2008.

The stock market more than tripled under Clinton's tenure. The Dow Jones Industrial Average went from 3,241 when he took office to 10,587 on the day he left. It actually declined under Bush's tenure, from 10,587 on the day he took office to 8,281 on the day he left. Between the recent stock market collapse and the housing crash, Bush destroyed more than $14 trillion in consumer wealth, a staggering, almost incomprehensible legacy of devastation that will haunt Americans for decades to come.

Confronted with such data, Republicans routinely cavil that the comparison is stacked to favor Democrats. But it can hardly be said of Forbes that it is a left-leaning publication. Quite the contrary. Forbes' framework is persuasive precisely because it comes from an unimpeachable Republican source.

And knowing all too well Bush's abysmal record, Republicans try to weasel away from it by claiming that presidents really don't have that much to do with economic performance. Forbes addressed this as well, stating directly, "Fairly or not, each president is judged by how much prosperity is delivered on his watch."

Donald Rumsfeld was fond of saying that people are entitled to their own opinions but they are not entitled to their own facts. The facts are undeniable: Bush's economic policies lose by every measure. He fails not just one but every single comparison. And the differences could not be more dramatic. His policies were a catastrophe for the American people, leaving them poorer, more indebted, and less economically secure.

As Republicans continue to bash Barack Obama it is important to remember that Obama is still trying to clean up the mess left by Bush. It's equally important to keep in mind that they almost never propose any alternative - witness the do-nothing whining about health care.

But when it comes to the economy, the alternative is known. It is specific, it is documented, and it is undeniable. It is the legacy of Bush II, the same enrich-the-wealthy policies that Bush I and Reagan pursued. They are a proven prescription for disaster. Let the buyer beware.

Robert Freeman writes on economics, history and education. He can be reached at [email protected].

The Foreclosure Crisis

Published on Sunday, September 13, 2009 by The Nation

Resisting Foreclosures

by Katrina vanden Heuvel & Greg Kaufman

In Georgia, the ease with which someone can lose a home is staggering.

A foreclosure-eviction can occur without judicial review in just 35 days, and at 10 a.m. on the first Tuesday of every month, the state's 159 counties hold a sheriff's auction of foreclosed homes.

That translated to 1,500 homes for sale in Atlanta on September 1. Reverend Jesse Jackson and the Rainbow PUSH Coalition--including 125 ministers from throughout the south--were in town to try to stop the auction.

They appealed to both Citibank and Wells Fargo to withdraw homes from the sale. Citi pulled thirty of its forty properties and will restructure those mortgages. Wells Fargo is still considering its response. Jackson commended Citi for taking "courageous action" but also noted that there is a need for a "massive restructuring" to truly stem the tide of foreclosures.

"The systematic hemorrhaging of foreclosures is outdistancing by far the loan modifications," Jackson said in a recent interview. "We've given a massive blood transfusion to the banks, but it's not linked to stopping the hemorrhaging at the bottom. We're taking care of a head wound...but the aorta is gushing."

Indeed, as of June 30, 1.5 million homes had gone into foreclosure and 2.4 million are expected to foreclose by the end of the year. Thirteen million foreclosures are projected over the next five years. The crisis has also spread to prime loans-- they now represent 27 percent of foreclosed loans, "up from 17 percent during the comparable 2008 period," according to McClatchy Newspapers. Nationwide, 23 percent of homeowners are now "under water" --owing more on their mortgages than their homes are worth. Meanwhile, only about 10 percent of homeowners eligible for relief under the Obama administration's anti-foreclosure plan have received help.

"That leaves 90 percent to the bankers without an incentive to restructure loans rather than repossess homes," Jackson said. "Right now, the government is going house by house by house by house--like dipping a spoon in the ocean. There's a structural abnormality...that will not work. It's like if you're going for the right to vote--going city by city by city by city...or do you have a federal restructuring of the right to vote? Period." Jackson is outraged that the banks--even subprime lenders, some of whom engaged in "redlining and targeting, steering and clustering"--received a bailout, and are now profiting, with "no linkage to use the bailout to modify loans."

"Banks are sending out press releases saying they are recovering, but they are being stimulated to recover," he said. "Meantime, we're still losing jobs, and houses, and student loans...and the same banks that are getting 0 percent interest on loans are unwilling to reduce the homeowner rate. They're getting 0 percent money and charging students 16 percent....They're taking a stimulus and getting a fee for free money."

Rainbow PUSH has embarked on an ambitious and focused campaign--to restructure people's loans en masse--to stem the tide of foreclosures. It involves calling on the Federal Reserve Bank to institute an across-the-board interest rate reduction on all residential mortgages (Jackson proposes a 6 percent cap); Congress to give bankruptcy judges the power to modify mortgages (the House passed such legislation but it failed in the Senate); the Department of Justice to enforce fair lending and civil rights laws and prosecute those involved in predatory and discriminatory lending practices; and banks and the private sector to participate in the Obama administration's anti-foreclosure programs in order to modify 75 percent of troubled home mortgages.

The campaign plans foreclosure actions this month in Los Angeles, Antioch, CA, the Federal Reserve in San Francisco, and again in Atlanta. Meetings will be held between key staff of Rainbow PUSH and the Federal Reserve, FDIC, Senate Banking Committee Chairman Chris Dodd, and House Financial Services Committee Chairman Barney Frank.

"We're taking our case to the streets, directly to the people," Jackson said. "An aroused people can make things begin to happen."

The need for these actions at both the local and national level is clear. The foreclosures impact not only the people being thrown out of their homes, but also their neighbors. The Center for Responsible Lending projects that in 2009 alone nearby houses will suffer a $502 billion decline in property values. That means an even greater hit to state and city budgets already devastated by the recession.

"When you lose the homes to foreclosure your neighbors homes lose value," Jackson said. "You shrink the tax base, then money for education, police, teachers, firemen, libraries and right down the river...."

Jackson believes taking on the foreclosure crisis is only part of the equation.

"I really can't separate jobs--the need for stimulation, incentives to reinvest in the infrastructure, reinvest in America--and housing and healthcare and education," he said. "People with jobs can better afford health premiums, and house premiums, and school premiums. We need a targeted stimulus at job creation and we cannot [ignore] the need for revisiting our trade policy....Trade must be fair to be free. And organized labor can't compete with slave labor....When you are dismissive of human rights--workers', women's and children's rights-- you're dismissive of [our] capacity to compete and to grow. I know the trade thing is a harder and higher mountain to climb, but it's a mountain that has to be climbed."

Jackson is right. There is indeed a clear connection between these basic struggles for jobs, homes, health, and education--and a need to address it as a whole. But it's also true that taking on the foreclosure crisis alone will require a herculean effort--he kind of inside-outside strategy we've seen (win or lose) in the health care debate. Jackson and other progressives who understand the power of organizing, mobilizing, and agitating have a vision for how to take on the status quo.

"Begin to resist these auctions en masse and publicly. Make resistance an issue, not just the auction an issue," Jackson said. "Demand bankruptcy reform laws. Fight for a structural change in the mortgage rates. Target a given bank in your area--which may involve civil disobedience, or litigation, or a demonstration--but it does require action. That's what we have to do. Activists cannot be silent in their protest. Our silence betrays our quest for justice."

© 2009 The Nation

Katrina vanden Heuvel is editor and Greg Kaufman is reporter and researched for The Nation.

Tea Baggers in Uproar Over Swedish Socialism Have No Problem With Chinese Communism

While they try to stoke fear of socialism of the variety our NATO allies embrace, right wingers have no problem with the fact that most of our manufacturing jobs have moved to communist China and that we have indebted ourselves to China for $2 trillion mostly by running huge trade deficits. China has veritably become our banker. But the tea baggers have been carefully channeled to protest socialized medicine while conveniently forgetting about the more serious problem of letting ourselves go into debt to a communist country. And US manufacturers have sold out American workers in order to hire cheaper Chinese labor. So it's a double whammy - loss of jobs and indebtedness to a communist country. But it would be absolutely horrible and unthinkable if we became more like Sweden.

The scenario is relatively simple. Chinese workers work for less than US workers. So American companies set up factories in China and ship the goods back to be sold into the US market. So the US is left without jobs - in fact no new jobs have been added in 10 years - and, not only that but the US is left indebted to China who is becoming an economic powerhouse while the US economy withers.

ITHICA, NY—At one time, most manufacturing jobs that left the United States for China were concentrated in relatively low-skill, low-wage jobs in light manufacturing industries, such as apparel and textiles. However, an increasing percentage of jobs that are now leaving this country for China are in industries producing goods such as bicycles, furniture, motors, compressors, generators, fiber optics, clocks, injection molded parts and computer components. According to a report produced for the U.S.-China Security Review Commission, more than 760,000 U.S. manufacturing jobs have been lost to China since 1992. Most of those jobs were in eight industries: electronics and electrical equipment, chemicals and petroleum products, household goods, toys, textiles, plastics, sporting goods, and wood and paper products. The report also found that U.S. companies that are shutting down their domestic operations and moving to China and other countries tend to be large, profitable, well-established companies, such as Mattel, International Paper, General Electric, Motorola and Rubbermaid. “There is a myth out there that direct foreign investment into China is for production for the big Chinese market and that U.S. companies are just moving their low-paying jobs in toys and textiles to China,” says Kate Bronfenbrenner, Ph.D., a professor of industrial and labor relations at Cornell University and the report’s author. “But our data show that it’s not true at all. These are highly skilled and good-paying jobs...that are not serving the Chinese market. Companies are moving to China to serve the U.S. market in auto parts, electronics, high-tech components, electrical machinery, chemicals and sporting goods.” In fact, contrary to the expectation that China’s 1.2 billion population would provide an ever-expanding market for U.S. goods, the value of goods imported to this country from China in 2000 exceeded the value of U.S. goods exported to China by a factor of more than 6-to-1. This resulted in a bilateral trade deficit of $84 billion, the report says. And, the trade deficit with China comprises almost 20% of the total U.S. trade deficit.

Be this as it may, we can't have health care reform because that would be socialistic. Heaven forbid we should become like western Europe, our NATO allies. Of course public education is OK, but public health insurance is not even as one option among many private health insurance options. It's OK for landlords to pay outrageous property taxes so their tenants can go to public school for free - a system that resembles communism more than it resembles socialism - but it's not OK to tax the wealthy so that poor people can have health insurance. Which is more important - your life or your education? Which is more important - losing everything you have to pay a medical bill or your education? You can get all the education you want by using free public libraries and the internet. MIT and other colleges have put their entire curriculums online. You can get a free education equivalent to any MIT graduate. You just don't get the diploma, that's all. But there is no hue and cry over public education, only over public health care.

And there is no huge hue and cry over the fact that a large portion of our national debt is owed to communist China. Why is that? Because it serves the interests of giant US corporations, the same corporations whose interests the right wing wing nut cases, the astroturfers, the birthers and the tea baggers serve. Whether or not these right wing demonstrators are complete dupes or are only too willing to join any cause that purports to give them an outlet for their incipient anger and bring down a black man to boot, the fact is that their anger and outrage is totally misplaced. They should be angry at the corporations who have sold them out in terms of job migration, and they should be angry at health insurance corporations who are the biggest cause of bankruptcy and denial of medical services leading to death in the world while making tons of profits and paying CEOs billions of dollars.

Bill McGuire, CEO of United Health Care, took home over a billion dollars in one year. Other CEOs are paid tens if not hundreds of millions of dollars while employing entire departments whose function it is to deny you health care or to cancel your policy altogether if you get sick. So between unemployment due to jobs moving to China due to corporations seeking the lowest cost labor input and rising health care costs due to health insurance corporations seeking to maximize profits, the right wing loonies have seen fit to protest that the US is becoming more like Sweden, France and Canada. Have they gone completely bonkers? The US was founded and settled by people from western Europe. So now we're going to side with China, a communist country, and not with the countries of western Europe whose denizens settled most of the US? It's totally nuts.

Most of the developed world has a rational, cost effective, humane health care system. But for the US to become more like the rest of the industrialized world, that would be socialism. We proclaim our extreme right wing privatization fetish at the same time we embrace our indebtedness to a communist country. That makes a lot of sense. It's not like we're going into hock to Sweden. At the same time we embrace a public school system that is more communistic than socialistic. It truly represents "to each according to their needs; from each according to their ability to pay." So if a landlord has a house he rents to a family with 10 children, the children all get to go to school and gain a public education for free while the landlord pays for it through property taxes. If it were truly a "free" educational system, the parents would pay a fee for each child regardless of their ownership of real estate, and the landlord would see a huge reduction in his property taxes. Similarly, our police and fire departments are socialized. This only makes sense as a fire in a house that is not protected by privatized fire insurance - that is insurance that would pay for a private fire department to come - could easily spread to one that is. Similarly, diseases that people who don't have health insurance carry and spread can infect people that do have health insurance. Isn't it better to prevent the spread of disease in the first place by covering everyone?

Socialism, communism and capitalism are only labels. In the final analysis they mean nothing. Every society existing today is some amalgam of all three. The important thing is to do what works, what is humane and what is rational. Socialized medicine makes sense just as socialized education does. What does not make sense is shipping jobs to China and then allowing them to gain economic hegemony over the US.

China Heaps Scorn on U.S. Tire Duties

Mon Sep 14, 2009 4:52am EDT 

By Chris Buckley

BEIJING (Reuters) - Chinese media and officials have heaped scorn on a U.S. decision to impose special duties on Chinese-made tires, extending Beijing's warnings that the move may fuel trade friction as global growth struggles to revive.

U.S. President Barack Obama announced the safeguard duties on tire imports from China on Friday, a decision the White House said was meant to stifle disruption from cheap Chinese imports.

Experts said the dispute appeared likely to intensify sparring between the world's biggest and third-biggest economies, but was unlikely to spark a full-scale trade war.

China responded swiftly and vehemently to the decision, saying it may complain to the World Trade Organization and then announcing its own anti-dumping investigations of motor vehicles and chicken products from the United States.

On Monday, Chinese state media issued fresh denunciations of Obama's decision, which will launch the additional duties of 35 percent on Chinese-made tires from September 26, a day after the G20 summit of big rich and developing nations ends in Pittsburgh.

"Obama has undoubtedly chosen a dangerous gambit," said the International Business Daily, a Chinese-language daily issued by China's Ministry of Commerce.

"The Chinese business world that has been wronged by this will not sit still on this, and even tougher contention between China and the United States may be looming."

Mei Xinyu, a trade expert with a think-tank under China's Ministry of Commerce, said Beijing wanted to warn Washington against making the two countries' huge trade flows more uncertain.

"The trade retaliation initiated by China was not intended to launch a full trade war in a fit of anger, but to contain protectionist tendencies in our trade partner, so that there is a stable and more predictable environment for developing international trade," Mei told the China News Service.

After the U.S. decision, share prices of Chinese tire makers plunged in early trade on Monday, led by major producer Double Coin.

Double Coin shares fell by their daily 10 percent limit to 19.01 yuan, while Guzhou Tire dropped 7.4 percent to 14.84 yuan.

CONTINUED TRADE FRICTION

Washington and Beijing have vowed to cooperate in seeking to revive global economic growth, but the tire dispute and Chinese counter-moves have exposed friction over trade, which could spill into the G20 summit that Chinese President Hu Jintao will attend, as well as Obama's scheduled visit to China in November.

The tire duty was the first time Washington has applied special "safeguard" provisions that Beijing agreed to before joining the World Trade Organization in 2001.

Over the weekend, the Chinese Ministry of Commerce said the U.S. tire duties could spark a "chain reaction of trade protectionist measures that could slow the current pace of revival in the world economy."

The Chinese Foreign Ministry, which usually keeps an arm's length from trade disputes, echoed that warning in a statement on Sunday.
"This is going to damage financial and trade cooperation between China and the United States," spokeswoman Jiang Yu said in a statement posted on the ministry website (www.fmprc.gov.cn).

Economists and experts said the dispute may add uncertainty to trade between the United States and China, but not threaten the economic underpinnings of their relations.

"While the impact of this trade-restricting measure by the US on the tire-making industry is serious, its macroeconomic impact is not enough to ... threaten the strategic relationship between the two countries," Qing Wang of Morgan Stanley Asia said in a research note.

"Any potential reaction on China's part would likely be an isolated move, the purpose of which is to register China's dissatisfaction with a view to pre-empting potential similar actions in other industries in the future."

The new duty of 35 percent will take effect on September 26 and adds to an existing 4 percent duty. The extra duty would fall to 30 percent in the second year and 25 percent in the third year.

The United Steelworkers union, which represents workers at many U.S. tire-making plants, filed a petition earlier this year seeking the protection. It said a tripling of tire imports from China to about 46 million in 2008 from about 15 million in 2004 had cost more than 5,000 U.S. jobs.

Mei, the Chinese trade expert, said the U.S. chicken and motor vehicle products targeted by Beijing's anti-dumping inquiries were roughly equal in value to China's tire exports to the U.S. -- about $2 billion a year.

The U.S. trade deficit with China totaled $103 billion in the first half of 2009, down 13 percent from last year but still a source of much ire in Washington. (Reporting by Chris Buckley, Ben Blanchard, Simon Rabinovitch and Kirby Chien; Editing by David Fox)

© Thomson Reuters 2009 All rights reserved

 

Livestock Responsible For More Greenhouse Gasses Than Cars, Trucks, Planes

Spotlight / 2006

	The livestock sector is undergoing a complex process of technical and geographical change

Livestock impacts on the environ-
ment

The challenge is to reconcile two conflicting demands: for animal food products and environmental services...

A new report from FAO says livestock production is one of the major causes of the world's most pressing environmental problems, including global warming, land degradation, air and water pollution, and loss of biodiversity. Using a methodology that considers the entire commodity chain, it estimates that livestock are responsible for 18 percent of greenhouse gas emissions, a bigger share than that of transport. However, the report says, the livestock sector's potential contribution to solving environmental problems is equally large, and major improvements could be achieved at reasonable cost.

Based on the most recent data available, Livestock's long shadow takes into account the livestock sector's direct impacts, plus the environmental effects of related land use changes and production of the feed crops animals consume. It finds that expanding population and incomes worldwide, along with changing food preferences, are stimulating a rapid increase in demand for meat, milk and eggs, while globalization is boosting trade in both inputs and outputs.

...

At the same time, the livestock sector has assumed an often unrecognized role in global warming. Using a methodology that considered the entire commodity chain, FAO estimated that livestock are responsible for 18 percent of greenhouse gas emissions, a bigger share than that of transport. It accounts for nine percent of anthropogenic carbon dioxide emissions, most of it due to expansion of pastures and arable land for feed crops. It generates even bigger shares of emissions of other gases with greater potential to warm the atmosphere: as much as 37 percent of anthropogenic methane, mostly from enteric fermentation by ruminants, and 65 percent of anthropogenic nitrous oxide, mostly from manure.

...

The sheer quantity of animals being raised for human consumption also poses a threat of the Earth's biodiversity. Livestock account for about 20 percent of the total terrestrial animal biomass, and the land area they now occupy was once habitat for wildlife. In 306 of the 825 terrestrial eco-regions identified by the Worldwide Fund for Nature, livestock are identified as "a current threat", while 23 of Conservation International's 35 "global hotspots for biodiversity" - characterized by serious levels of habitat loss - are affected by livestock production.

Two demands. FAO says "the future of the livestock-environment interface will be shaped by how we resolve the balance of two demands: for animal food products on one side and for environmental services on the other". Since the natural resource base is finite, the huge expansion of the livestock sector required to meet expanding demand must be accomplished while substantially reducing its environmental impact.

Greater efficiency in use of resources will be "the key to retracting livestock's long shadow". Although a host of effective technical options - for resource management, crop and livestock production, and post harvest reduction of losses - are available (see box below), current prices of land, water and feed resources used for livestock production do not reflect true scarcities, creating distortions that provide no incentive for efficient resource use. "This leads to the overuse of the resources and to major inefficiencies in the production process," FAO says. "Future policies to protect the environment will therefore have to introduce adequate market pricing for the main inputs."

Is the Recovery a Bernankian Fantasyland?

Published on Thursday, September 10, 2009 by CommonDreams.org

Whose Economic Recovery?

Has The US Economy Really Been Pulled Back From The Brink?

by Danny Schechter

President Obama's highly anticipated health care speech started on a totally different subject: The economy.

"When I spoke here last winter, this nation was facing the worst economic crisis since the Great Depression," he told Congress and the people at home. "We were losing an average of 700,000 jobs per month. Credit was frozen. And our financial system was on the verge of collapse."

"But," he went on, "thanks to the bold and decisive action we have taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink."

Applause. Applause. Applause.

Are we back from the brink? And what brink is that? On Labor Day, HBO featured a powerful documentary about a GM Plant in Ohio that was shutting down. It showed the workers, teary eyed and forlorn, making the last truck on "their" assembly line. Their faces told the rest of the story as they asked themselves and each other, "What do I do now? What happens to my family and my life?"

They had no answers, and neither, alas, does Barack Obama.

A "jobless recovery" will not give these workers the money to buy into even the cheapest health care coverage, public option or not.

Look around Mr. Obama: the unemployment rate in real terms is over 16%. The consumer economy is shattered. The commercial real estate market is imploding, and, yes, more foreclosures are on the way according to the Washington Post:

A new report foresees another wave of foreclosures, as option adjustable-rate mortgages -- an entire class of specialized home loans -- will soon reset to higher payments. Estimated to jump by 63 percent on average, the higher rates will likely push many of the already-strained loan recipients over the brink. The loans, also called pick-a-pay loans, are a prime example of the risky lending techniques that created the housing crisis: Borrowers were allowed to pay back the loan with as little as they wanted each month, though that meant many paid less than the interest due...the report says the fallout from the loans could be felt for years, especially in states already hit hard by foreclosures.

Just who is back from the brink?

If you listen to the Fed, the glass is more than half full.  If you listen to economists like Simon Johnson, it's way more than half empty, as he wrote on Baseline Scenario:

In the absence of effective financial regulation - i.e., both during the 1920s and again since 1990 - the Fed has operated in a manner that encourages the formation of sequential bubbles. This destabilization of our financial system is not a minor matter; the damage caused - human, financial, social - is already enormous.

And we are very far from being done.

Don't take my word for it. Lou Jiwei, the chairman of China's sovereign wealth fund said recently, "It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we're just taking advantage of that. So we can't lose."

Yes, We Can... Lose, that is, Mr. Lou. And Yes We Are, Mr. Obama. The problem is that we are still in some Bernanke fantasyland, thinking that if we keep saying everything is ok, it will be.

Here's Washington's blog on real unemployment as opposed to what the Bureau of Labor Statistics is saying:

... Paul Craig Roberts - former Assistant Secretary of the Treasury and former editor of the Wall Street Journal - and economist John Williams both said in December 2008 that - if the unemployment rate was calculated as it was during the Great Depression - the December 2008 unemployment figure would actually have been 17.5%.

Williams says that unemployment figures for July 2009 rose to 20.6% According to an article summarizing the projections of former International Monetary Fund Chief Economist and Harvard University Economics Professor Kenneth Rogoff and University of Maryland Economics Professor Carmen Reinhart,... unemployment could rise to 22% within the next 4 years or so.

Hello, Mr. President? Why can't you bring to the discussion of the economy the same passion and fact-based arguments that you brought to the health care debate?

Why can't you propose serious reforms on the financial sector? Why can't we jail the financial criminals?

The answer seems to be that Wall Street will be a far more tenacious and resourceful enemy than the health care industry perhaps because they already own much of the Congress.

Remember Senator Dick Durbin's comment, ‘the bankers run the place."

Alan Blinder a former vice-chairman of the Fed fears that pressure for financial reform is losing steam in part because of the power of what he calls "The Mother Of All Lobbies." He writes, "in the case of financial reform, the money at stake is mind-boggling and one financial industry after another will go to the mat to fight any provision that might hurt it."

Obama acknowledged we are not out of the woods yet. (What woods?) But what are the likely consequences? How long can people live without anything coming in? How long can we live on upbeat projections?

"There is no doubt class antagonism is stewing," says the editor of the blog Naked Captalism. He expressed a fear of a reaction that will go way beyond flag-waving tea parties:

... I am concerned this behavior is setting the stage for another sort of extra-legal measure: violence. I have been amazed at the vitriol directed at the banking classes. Suggestions for punishment have included the guillotine (frequent), hanging, pitchforks, even burning at the stake. Tar and feathering appears inadequate, and stoning hasn't yet surfaced as an idea. And mind you, my readership is educated, older, typically well-off (even if less so than three years ago). The fuse has to be shorter where the suffering is more acute.

One is reminded of the title of that movie, There Will Be Blood. Rather than show contrition or compassion for its own victims, Wall Street is hoping to jack up its salaries and bonuses to pre-2007 levels. The men at the top are oblivious to the pain they helped cause. They are getting away with the crime of our time.

And the people - The People - who potentially can challenge all this by action on the ground are being mesmerized by the false hope that recovery is here or right around the corner. How long before they realize you can't eat optimistic speeches?

Mediachannel’s News Dissector Danny Schechter investigates the origins of the economic crisis in his new book Plunder: Investigating Our Economic Calamity and the Subprime Scandal (Cosimo Books via Amazon). Comments to [email protected] 

Banks Robbing Peter to Profit Paul

Published on Monday, August 31, 2009 by The Guardian/UK

Reverse Bank Robbery

No wonder America's banks are making profits again: the US government is bribing them to borrow its own money

by Dean Baker

Most of us work for a living, the rest are bankers. These days the news is filled with great tales about how America's banks are coming back.

Even that giant corpse Citigroup is showing signs of life. Its stock is now selling for more than five times the lows it hit earlier this year. Its market capitalization is up near $57bn, a bit more than the $45 billion that the government lent them through the Troubled Assets Relief Program, or Tarp. Some are even expecting that the government will make a profit on its Citigroup investment.

These hopes are probably somewhat premature. Citigroup still has many bad assets on its books which it has not yet written down. Furthermore, the government is directly on the hook for $300bn of these bad assets, having offered a guarantee as part of its "December Citigroup Rescue Special".

In this case, Citigroup may be able to prevent losses and boost the value of its government-owned stock because the government is picking up its bad debts. This is a case of money going into one pocket but out of the other one; that's not the way that most investors make money.

In fact, much of the story of the return of bank profitability has this character of money in one pocket and out the other pocket. To make the story as simple as possible, banks can now borrow money short-term at near zero cost from the US Federal Reserve. The Fed has pushed rates to near zero in order to boost the economy. On the other side, banks can buy up US government bonds that are currently paying around 3.5% interest.

This means that we lend the banks the money that they lend back to us, albeit at a considerably higher interest rate. To take round numbers, let's say that the banks have borrowed $1 trillion from the Fed's various lending facilities. (The Fed's total loans are now over $2trn.) Suppose they pay an average interest rate of 0.2% on this money. If the banks then buy up government bonds that pay a 3.5% interest rate, they can pocket the difference of 3.3 percentage points. On a trillion dollars of lending, this will give the banks $33bn a year in net interest or profit. This is the extra money that the government is paying the banks to borrow back the money that it lent them through the Fed.

Of course this is not the whole story of the banks' return to profitability. We also have the shrewd traders like the Goldman Sachs crew. They take the money that they borrowed, either directly from the government or with the government's guarantee, and use it to speculate in items like oil and other commodities.

These folks are betting that they can outguess the markets. For example, the Goldman boys might catch oil on the way up, so that consumers pay higher gas prices somewhat sooner to cover Goldman's trading profits. Alternatively, they might short a commodity like oil. This will cause the price to drop more quickly than would otherwise be the case, leaving producers with somewhat less money than if Goldman hadn't stepped into the market.

In either case, Goldman's gains come at the expense of other actors in the market. There is not anything necessarily wrong with speculation; informed speculation can provide useful information to the markets. However, in this case the taxpayers are financing it, and taking the risk if it goes bad.

It turned out Goldman's bets were winners in the second quarter, so this means that the taxpayers paid for Goldman's profits with the higher gap between the prices paid by gasoline buyers and other consumers and the money received by oil companies and other producers. Of course, if Goldman's bets had gone badly, taxpayers would have been forced to cough up the money to make up the losses directly through the Treasury. Either way, the taxpayers get to pay.

That is the basic story of the banking industry. These folks have the system set up so that they should be able to make money pretty much regardless of what happens, with the risk of bad outcomes all placed on the taxpayers.

Many people are outraged that the banks intend to pay their top executives large bonuses. But these unthinking populists simply don't recognize these people's extraordinary talent. After all, it is not everyone who can get the government to subsidize them to the tune of several billion dollars a year. These people may not fare very well in a market economy, but these bank executives get huge rewards in an economy like the one we have in the US.

© Guardian News and Media Limited 2009

Dean Baker is co-director of the Center for Economic and Policy Research.

A Culture of Cruelty

 Here in part is an article by Henry A. Giroux in Truthout:

The celebration of hyper-violence, moral sadism and torture travels easily from fiction to real life with the emergence in the past few years of a proliferation of "bum fight" videos on the Internet, "shot by young men and boys who are seen beating the homeless or who pay transients a few dollars to fight each other." The culture of cruelty mimics cinematic violence as the agents of abuse both indulge in actual forms of violence and then further celebrate the barbarity by posting it on the web, mimicking the desire for fame and recognition, while voyeuristically consuming their own violent cultural productions. The National Coalition for the Homeless claims that "On YouTube in July 2009, people have posted 85,900 videos with 'bum' in the title [and] 5,690 videos can be found with the title 'bum fight,' representing ... an increase of 1,460 videos since April 2008." Rather than problematize violence, popular culture increasingly normalizes it, often in ways that border on criminal intent. For instance, a recent issue of Maxim, a popular men's magazine, included "a blurb titled 'Hunt the Homeless' [focusing on] a coming 'hobo convention' in Iowa and says 'Kill one for fun. We're 87 percent sure it's legal.'" In this context, violence is not simply being transformed into an utterly distasteful form of adolescent entertainment or spectacularized to attract readers and boost profits, it becomes a powerful pedagogical force in the culture of cruelty by both aligning itself and becoming complicit with the very real surge of violence against the homeless, often committed by young men and teenage boys looking for a thrill. Spurred on by the ever reassuring presence of violence and dehumanization in the wider culture, these young "thrill offenders" now search out the homeless and "punch, kick, shoot or set afire people living on the streets, frequently killing them, simply for the sport of it, their victims all but invisible to society." All of these elements of popular culture speak stylishly and sadistically to new ways in which to maximize the pleasure of violence, giving it its hip (if fascist) edginess.

    Needless to say, neither violent video games and television series nor Hollywood films and the Internet (or for that matter popular culture) cause in any direct sense real world violence and suffering, but they do not leave the real world behind either. That is too simplistic. What they do achieve is the execution of a well-funded and highly seductive public pedagogical enterprise that sexualizes and stylizes representations of violence, investing them with an intense pleasure quotient. I don't believe it is an exaggeration to claim that the violence of screen culture entertains and cleanses young people of the burden of ethical considerations when they, for instance, play video games that enabled them to "casually kill the simulated human beings whose world they control."  Hollywood films such as the "Saw" series offer up a form of torture porn in which the spectacle of the violence enhances not merely its attraction, but offers young viewers a space where questions of ethics and responsibility are gleefully suspended, enabling them to evade their complicity in a culture of cruelty. No warnings appear on the labels of these violent videos and films, suggesting that the line between catharsis and desensitization may become blurred, making it more difficult for them to raise questions about what it means "to live in a society that produces, markets, and supports such products." But these hyper-violent cultural products also form part of a corrupt pedagogical assemblage that makes it all the more difficult to recognize the hard realities of power and material violence at work through militarism, a winner-take-all economy marked by punishing inequalities and a national security state that exhibits an utter disregard for human suffering. Even the suffering of children, we must note, as when government officials reduce the lives of babies and young children lost in Iraq and Afghanistan to collateral damage. Tragically, the crime here is much more than symbolic.

    The ideology of hardness and cruelty runs through American culture like an electric current, sapping the strength of social relations and individual character, moral compassion and collective action, offering up crimes against humanity that become fodder for video games and spectacularized media infotainment, and constructing a culture of cruelty that promotes a "symbiosis of suffering and spectacle."

Marx and His Ideas Rise From the Dustbin of History

From the Toronto Star:

Profound understanding of capitalist dynamics has come to the fore during the current crisis

Sep 07, 2009 04:30 AM
by Leo Panitch

Research chair in comparative political economy and distinguished research professor of political science at York University

Workers of the world unite! A new message for Labour Day 2009?

What is the significance of the way not only John Maynard Keynes but even Karl Marx has been brought back into fashion amidst the global economic crisis? This is a question well worth pondering on the day that is officially designated to celebrate the class that Marx saw as carrying the promise – and the responsibility – of creating a better world.

Twenty years ago, many cast Marx's ideas into the dustbin of history along with the statist Communist regimes that collapsed in 1989. Yet Marx, who more than any 19th century liberal economist or philosopher insisted that the state was an imposition on society and looked forward to it "withering away" after a proletarian revolution, would have been the severest critic of those regimes. As Joseph Schumpeter once said, there was as little in common between Marx and Stalinism as there was between Jesus and the Inquisition.

In any case, as the globalization of capitalism quickened through the 1990s, it actually became more fashionable than ever to quote Marx, especially on how "the need for a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe," creating in the process "a world in its own image." But what was usually left out when the Communist Manifesto was quoted in this way in the 1990s was Marx's prescience on capitalist globalization "paving the way for more extensive and exhaustive crises."

It has been this aspect of Marx's profound understanding of capitalist dynamics that has come to the fore in the current crisis. It does indeed seem to confirm that capitalism is like "the sorcerer who is no longer able to control the powers of the netherworld whom he has called up by his spells." But what is especially important to bear in mind on Labour Day is that Marx, unlike many of those Marxist economists who make it their business to predict economic crises, would have had no illusions that the purely economic contradictions of capitalism would bring about a better world.

Marx knew very well that capitalism, by its nature, fosters social isolation, leaving "no other nexus between man and man than naked self-interest, than callous cash payment." This creates passivity in the face of personal crises, from factory layoffs to home foreclosures. So, too, does this isolation impede communities of active, informed citizens from coming together to advance radical alternatives.

Marx would look at this crisis from the perspective of what it would take for workers to overcome this all-consuming social passivity. He saw the trade unions developing in his own time as a step forward in relation to the "immediate aim" of "the organization of the proletarians into a class" whose "first task" would be "to win the battle for democracy." And Marx would today encourage the formation of those types of collective identities, associations and institutions through which people could redefine their needs and develop their ambitions and capacities to fulfil them by winning the battle for economic democracy. This is something no capitalist society can ever become.

No such vision for enacting change has arisen from the labour movement in this crisis, at least not so far. Nor is it likely to emerge from the primarily defensive way trade unions are currently constituted. They do need to resist employer pressures to make workers bear the burden of the crisis in the public as well as the private sector. But their lack of ambition to organize and represent all workers in all facets of their lives, not only in terms of a narrow orientation to collective bargaining, is proving increasingly debilitating.

It is significant that the Labour Day we celebrate today, legally established in 1895 to occur on the first Monday of September, involved Canada abjectly following what the U.S. government had done to avoid workers there joining in the celebration of May Day as the international workers holiday. This practice had been established in 1889 when the first congress of the Second International (the successor to the First International organized by Marx in the 1860s) called on workers everywhere to join in an annual one-day strike on May 1. This date was chosen to coincide with the timing of international protests against the bloody repression of workers in Chicago in 1886 who had been campaigning for an eight-hour working day.

Unions in Canada, like those in the U.S., went along with politicians who sought to replace the May Day that symbolized labour's insurgent history and revolutionary potential with a state-sponsored "official" Labour Day holiday in September that symbolized the recognition of labour's search for respectability.

This was epitomized by the free admission to the Canadian National Exhibition at the end of Toronto's annual Labour Day parade. But the global economic crisis once again points to why labour needs to move in the other direction. If the fashion of quoting Marx today is going to amount to much, labour will need to "recover the spirit of revolution," as Marx himself once put it, rather than "to set its ghost walking about again."

Essential Jazz Albums

Here is my list of 25 jazz artists that represent my essential jazz collection and one I would recommend to any newcomer to jazz who wants to get a representative flavor of what the music is about as well as listen to the milestones of jazz' golden era. I have included albums which are essential to the history of jazz as an art form as well as jazz albums that have gained relative popular success, and, therefore, are considered to be more accessible. Also I have included albums which by their sheer beauty are a pleasure to listen to and also very accessible for the neophyte listener. Duke Ellington said, and I paraphrase, there are only two kinds of music: good and bad.

No list of 25 artists or albums can ever be exhaustive. Some of the omissions from this list are big band albums although I've included a few as well as some more on the orchestral side as opposed to the straight ahead big band style. I haven't included a lot of jazz vocalists but Ella Fitzgerald, Mahalia Jackson and Billie Holliday are nothing to sneeze at. Most of the albums are small groups, but this is where most of the action has been since the advent of the Charlie Parker-Dizzy Gillespie Quintet recordings of the mid 1940s.

In my humble opinion Charlie Parker was the greatest innovator and creative musician in jazz history. Most of so-called modern jazz flows from his creativity and inspiration. Unfortunately, he died at an early age (35) due to alcohol and drug abuse. Clifford Brown was the greatest trumpet player, in my opinion. His life was cut all too short by an automobile accident at the age of 24. Miles Davis was always trying to invent the next new thing and he was responsible for several of the seminal developments in jazz from the modal tunes of "Kind of Blue" which was also the all time best selling jazz album, to the chamber music of the "Birth of the Cool" album. His collaborations with Gil Evans produced "Porgy and Best", "Sketches of Spain" and "Miles Ahead." These albums used orchestral instruments such as french horns and oboes to get a distinctly different sound from the typical big band sax section. Several of the recommended albums, including Ella and Louis' "Porgy and Bess" and Roy Hargrove's "Moment to Moment", use full orchestral string sections.

Art Pepper's "Great Jazz Standards" is included because (a) it's a great album and (b) it introduces a novice listener to some of the essential jazz literature.

Another of my biases is that most of the recommended albums are from the post-swing era starting around 1945 although Art Tatum was definitely a player preceding that era as arguably was Duke Ellington and Billie Holliday in terms of her accompaniment. I don't include any "free" jazz because I don't consider it essential to jazz history nor do I personally enjoy it. Wynton Marsalis includes Ornette Coleman among his jazz essentials. I disagree with him there. I also don't include any "lite" jazz or "smooth" jazz as I consider it essentially watered down and diluted. There are enough albums in this list that should be accessible even to the jazz neophyte including some of the best selling albums of all time: Dave Brubeck's "Time Out," the aforementioned "KInd of Blue," Lee Morgan's "The Sidewinder," and John Coltrane's "My Favorite Things."

In addition there are albums of familiar content such as Oscar Peterson's "West Side Story," Ella and Louis' "Porgy and Bess," Dave Brubeck's "Dave Digs Disney" and Errol Garner's "Concert By The Sea" that are very accessible to anyone with even a modicum of musical let alone jazz appreciation. For sheer orchestral beauty I would include Ella and Louis' "Porgy and Bess," Roy Hargrove's "Moment to Moment," Duke Ellington's "Black, Brown and Beige with Mahalia Jackson," Miles Davis and Gil Evans' "Porgy and Bess," and George Russell's ambitious project, "New York, NY," which includes John Hendricks poetical musings.

The two vocal group albums considered here, "Silver and Voices" and "Sing a Song of Basie" deserve special mention, the former for the great writing of Horace Silver and the great trumpet solos of Tom Harrell as well as excellent group singing, the latter for the pioneering arrangements of John Hendricks who put words and vocal arrangements to great Count Basie instumental arrangements including all the horn solos.

Finally, a word about the greatest jazz composer of all time, Billy Strayhorn, whose music can be heard on Duke Ellington's "And His Mother Called Him Bill." In addition to writing Ellington's signature tune, "Take the A Train," he also wrote some of the most beautiful music of all time, jazz or otherwise, including "Lush Life (which he wrote when he was a teen living in the Pittsburg slums!)," "In a Sentimental Mood," "Upper Manhattan Medical Group," "Prelude to a Kiss," and "A Flower Is a Lovesome Things."

Here, finally, is the list:

1. Ella Fitzgerald and Louis Armstrong - Ella and Louis Sing Porgy and Bess

2. Duke Ellington - Black Brown and Beige with Mahalia Jackson, And His Mother Called Him Bill

3. Art Tatum - Masterpieces

4. Billie Holliday - The Unforgettable Lady Day

5. Charlie Parker - The Essential Charlie Parker

6. Clifford Brown - Clifford Brown and Max Roach

7. Charles Mingus - The Clown, Mingus Ah Um, Tijuana Moods

8. Dave Brubeck - Time Out, Dave Digs Disney

9. John Coltrane - My Favorite Things, Giant Steps

10. Bill Evans - Everybody Digs Bill Evans

11. Miles Davis - Kind of Blue, Round About Midnight, Porgy and Bess, Birth of  the Cool

12. Roy Hargrove - Moment to Moment

13. Art Blakey - Free For All

14. Wayne Shorter - Night Dreamer

15. Thelonious Monk - Brilliant Corners, Monk's Music

16. Oscar Peterson - West Side Story

17. Herbie Hancock - Maiden Voyage

18. Lee Morgan - The Sidewinder

19. Art Farmer - Modern Art

20. Art Pepper - Modern Jazz Classics

21. Modern Jazz Quartet - Odds Against Tomorrow

22. Errol Garner - Concert By the Sea

23. Horace Silver - Silver and Voices, Song for My Father

24. Lambert, Hendricks and Ross - Sing a Song of Basie

25. George Russell - New York, NY

Humanity Fiddles, Earth Burns

Published on Thursday, September 3, 2009 by the Associated Press

‘We Are Heading Towards an Abyss’

U.N. chief tells 150 governments that time running out on climate change

GENEVA - U.N. chief Ban Ki-moon told a meeting of some 150 governments on Thursday that time is running out for a new climate deal to cut greenhouse gas emissions.

UN chief Ban Ki-moon (2nd right) talks during a press conference in Longyearbyen, Norway, September 2. The world is accelerating towards a climate catastrophe, Ban has warned, urging rapid progress in talks to cut emissions and tackle global warming.(AFP/Jacqueline Pietsch)

The Copenhagen talks in December are looming and little real negotiating time is left "to resolve some of the most complex issues," the U.N. secretary general told the World Climate Conference. "We need rapid progress."

Only limited progress in the climate talks has been made for the meeting to hammer out a new accord to replace the 1997 Kyoto Proto

Meanwhile, climate change is advancing.

"Our foot is stuck on the accelerator and we are heading towards an abyss," said Ban, warning that climate change could spell widespread economic disaster.

He noted that he had just visited the Arctic and was alarmed by what he saw.

"The Arctic is warming faster than anywhere else on Earth," Ban said. "It may be ice-free by 2030."

Not only is the Arctic serving as a warning, the warming there is accelerating global climate change, he said.

"Instead of reflecting heat, the Arctic is absorbing it as the sea ice diminishes, thus speeding up global warming," Ban said. "Methane, trapped in permafrost and on the sea bed, is escaping into the atmosphere. Methane is a greenhouse gas 20 times more powerful than carbon dioxide."

He said the increased melt from the Greenland ice-cap threatens to raise sea levels and alter the flow of the Gulf Stream, essential to keep Europe warm.

The climate conference in Geneva is aimed at providing ways for the world to cope with global warming that will occur because of greenhouse gases already in the atmosphere, regardless of what the Copenhagen meeting achieves.

Frank Thomas on Health Care

As you know, I attribtute the major causes of our exceptionally high provider costs primarily to the following:

(1)  According to Joel A. Harrison´s 2007 study, over 1,500 different companies spread over 50 states are offering a multiple of private heath insurance plans with high deductibles and premiums for less than 100% Basic health care coverage.  Each firm has its own marketing program, advertising, CEO salaries, sales commissions, enrollment procedures, paperwork and policies, medical procedure coding techniques, and other non-clinical costs ... on top of state-by-state regulations disallowing the insured or to-be-insured to go outside the state for a better deal. When you add to this an ineffective, non-transparent, non-standardized  Performance Metric reporting state-by-state and locally, and no common coding-definition of medical procedures /drug prescriptions, you have a multi-faceted FRACTIONALIZED system that is wasting over $250 billion annually just in Administrative costs. You have a system where an appendix operation may have a myriad of different prices in any one state and certainly a huge price variation over 50 states (not improved in any way by an effective exchange of comparative best practices).                                                                                                                                

Granted, as you say, that of the 1500 insurer firms, the top 20 probably dominate directly/indirectly over 50% of the business (haven´t seen any good data on this). This means two things are happening (a) the large insurers are closely copying each other´s premiums regionally and state-wide -- thus acting as an oligopoly. The larger firms are not using their leverage to lower provider costs-improve provider quality but focus instead on the better-insured and purge the sick-prone, and (b) the hundreds of smaller insurer firms do not have a balanced actuarial base, i.e., a sufficiently broad group of people for a proper risk pool of relatively healthy vs. more unhealthy enrollees, thereby driving up premiums/deductibles.  Or, alternatively, they purge the sick-prone leaving a very favorable balance of less-sick enrollees to whom they can offer relatively more costly Basic-plus plans and premiums. As mentioned in last post,  the large Non-Profit hospitals are in the Profit business in a BIG way. They are doing less and less for the relatively poor Uninsured and Underinsured and for the Community as required under their Tax Exempt status. 

All this nation-wide, in effect, compounded Uncompetitive system dysfunctions have been Driving Up costs for quite some time and grossly Disincentivizing the over 2700 non-governmental hospitals and related doctor professionals from becoming more cost and quality effective. So odds are stacked against Households and Individuals ever having competitive, reasonable health insurance premium charges (in recent years escalating unsustainably annually at 5 times the rate of inflation). As you and I and others have been saying so often on this blog, only a  Public-Medicare option (ideally a Decentralized Single/Payer system similar to Canada´s decentralized organizational setup)  will Shake Up the corrupt, uncompetitive Private-insurer industry sufficiently to become much more cost-quality effective concerning a Basic standard health care package. This might require More Private-insurer consolidations to achieve cost economies-of-scale and especially the proper actuarial balance in risk pools of healthy vs. unhealthy for each insurer. Of course, this will also require Tight state and central government oversight controls/sanctions for price collusion and monopoly practices. As you have noted, discontinuance of state prohibitions on local residents-employers to purchase health care coverage across state lines is a necessity to stimulate competitive forces now practically systemically non-existent in our private health care programs.

Chemically Induced Happiness

Published on Wednesday, September 2, 2009 by The Toronto Star

Pills and America's Pursuit of Happiness

by Mitch Potter

WASHINGTON – Of all the bitter pills Americans are swallowing nowadays, from joblessness to home foreclosures to runaway national debt, it might come as no surprise that a pill of another sort is flying off the shelves at a recession-defying pace – the antidepressant.

(flickr photo by Antanith used and adapted under Creative Commons license)

It's an easy jump to conclude that hard times are turning the country comfortably numb, as the Washington Post suggested in a weekend report on the sales of the drug Cymbalta, up 14 per cent since the summer of 2008 and now among America's most popular happy pills.

Drill deeper and you will find that the U.S., though far and away a world leader with its $10-billion-a-year antidepressant habit, is not alone.

Over the summer, British politicians fretted over the impact of recession on mental health amid data showing a spike of 2.1 million antidepressant prescriptions last year, when the downturn took its first precipitous dive.

Same in India, where pharmaceutical firms reported a 20 per cent expansion of the antidepressant market in the year ending December 2008. And in New Zealand, where the global plunge was linked to reports of a near doubling in antidepressant prescriptions between 2002 and 2008.

But drill down deeper still and the story behind the flurry of cause-and-effect headlines is far more nuanced.

While many researchers acknowledge there is likely an uptick in med sales as a consequence of the poor economy, most say it is driven as much or more by trends decades in the making.

There is no question America loves its happy pills, but consumption was skyrocketing long before the Dow melted down.

The real story, in fact, may be that the link between recession and mental health points in precisely the opposite direction – the possibility that people in the most dire straits today are also the most likely to be suffering depression but without access to any medical help.

That is what Dr. Craig Pollack of the University of Pennsylvania discovered during a study of 250 Philadelphia homeowners on the brink of foreclosure. Pollack's findings, published last month, showed 37 per cent of the distressed homeowners suffered from major clinical depression. But nearly half of his study group said they were too poor to buy prescription drugs.

"Clearly for some, poor health leads to foreclosure. And for others, foreclosure may be leading to poor health," Pollack said.

Dr. Ronald Dworkin, a Maryland anaesthesiologist and senior fellow at the Hudson Institute, warns that to make too much of the recession's role in prescription drug-taking is to wildly underplay the larger story of how the country has swarmed toward the pill bottle every since the 1970s, when Valium hit the scene.

"America is all about the gratification of pleasure. We are the kings of pleasure and proud of it," said Dworkin, author of Artificial Unhappiness: The Dark Side of the New Happy Class.

"But the other side of it is that we're not very good at preparing for or dealing with unhappiness, which of course is an inevitable part of life. And what we've done since the '70s is to transform into a culture that treats unhappiness as a disease."

Dworkin says primary-care doctors wrote about 75 per cent of the more than 164 million antidepressant prescriptions dispensed in 2008 in the U.S., a fact he says gainsays the notion that psychiatrists and big pharma are to blame.

But however one tracks the evolution, Dworkin contends the practice of "stupefying ourselves to cure everyday unhappiness" treats the symptom, not the cause.

And that is a bigger problem today than it used to be, given the surfeit of unhappiness associated with recession.

"There is a paradox: taking antidepressants makes people feel better, thereby reducing their interest in actually doing something about the things in their life that cause the unhappiness," he said.

"Research indicates that people in bad dept or a bad relationship stay where they are on the medication. The urgency of change fades away."

© Copyright Toronto Star 1996-2008

Power From Space?

From Scientific American:

The Japanese government is prepared to spend some 2 trillion yen on a one-gigawatt orbiting solar power station—and this week Mitsubishi and other Japanese companies have signed on to boost the effort. Boasting some four kilometers of solar panels—maybe of the super-efficient Spectrolab variety but more likely domestically sourced from Mitsubishi or Sharp—the space solar power station would orbit some 36,000 kilometers above Earth and transmit power in a microwave or laser beam.

The benefit? Constant solar energy production as the space-based power plant never passes out of sunlight. The downsides? Only enough power for roughly 300,000 Japanese homes at a price tag of $21 billion, according to Japan's science ministry (about 127 million people live in Japan in some 47 million households, according to Wikipedia and CIA Factbooks). The Japan Aerospace Exploration Agency (JAXA) aims to have a system in space by 2030.

The first step will be launching a test satellite that will gather solar power and beam it back to Earth, probably in 2015. Already, ground tests show that some solar power (180 watts) can be beamed successfully.

In the U.S., where space solar has been on the drawing board since at least the 1960s, California's Pacific Gas & Electric has pledged to buy power from a planned 200-megawatt space solar station put together by Solaren that is still on the drawing boards.

But the U.S. government has mixed feelings about space solar. Despite some $80 million spent over decades by NASA, the alternative energy source is no closer to fruition using public funds. And other government agency estimates put the price tag for space solar at $1 billion per megawatt—making this the most expensive power source identified to date in any solar system.

Image: Artist's rendering courtesy of USEF

 

Time to Get Out of Afghanistan

From the Washington Post:

By George F. Will
Tuesday, September 1, 2009

"Yesterday," reads the e-mail from Allen, a Marine in Afghanistan, "I gave blood because a Marine, while out on patrol, stepped on a [mine's] pressure plate and lost both legs." Then "another Marine with a bullet wound to the head was brought in. Both Marines died this morning."

"I'm sorry about the drama," writes Allen, an enthusiastic infantryman willing to die "so that each of you may grow old." He says: "I put everything in God's hands." And: "Semper Fi!"

Allen and others of America's finest are also in Washington's hands. This city should keep faith with them by rapidly reversing the trajectory of America's involvement in Afghanistan, where, says the Dutch commander of coalition forces in a southern province, walking through the region is "like walking through the Old Testament."

U.S. strategy -- protecting the population -- is increasingly troop-intensive while Americans are increasingly impatient about "deteriorating" (says Adm. Mike Mullen, chairman of the Joint Chiefs of Staff) conditions. The war already is nearly 50 percent longer than the combined U.S. involvements in two world wars, and NATO assistance is reluctant and often risible.

The U.S. strategy is "clear, hold and build." Clear? Taliban forces can evaporate and then return, confident that U.S. forces will forever be too few to hold gains. Hence nation-building would be impossible even if we knew how, and even if Afghanistan were not the second-worst place to try: The Brookings Institution ranks Somalia as the only nation with a weaker state.

Military historian Max Hastings says Kabul controls only about a third of the country -- "control" is an elastic concept -- and " 'our' Afghans may prove no more viable than were 'our' Vietnamese, the Saigon regime." Just 4,000 Marines are contesting control of Helmand province, which is the size of West Virginia. The New York Times reports a Helmand official saying he has only "police officers who steal and a small group of Afghan soldiers who say they are here for 'vacation.' " Afghanistan's $23 billion gross domestic product is the size of Boise's. Counterinsurgency doctrine teaches, not very helpfully, that development depends on security, and that security depends on development. Three-quarters of Afghanistan's poppy production for opium comes from Helmand. In what should be called Operation Sisyphus, U.S. officials are urging farmers to grow other crops. Endive, perhaps?

Even though violence exploded across Iraq after, and partly because of, three elections, Afghanistan's recent elections were called "crucial." To what? They came, they went, they altered no fundamentals, all of which militate against American "success," whatever that might mean. Creation of an effective central government? Afghanistan has never had one. U.S. Ambassador Karl Eikenberry hopes for a "renewal of trust" of the Afghan people in the government, but the Economist describes President Hamid Karzai's government -- his vice presidential running mate is a drug trafficker -- as so "inept, corrupt and predatory" that people sometimes yearn for restoration of the warlords, "who were less venal and less brutal than Mr. Karzai's lot."

Mullen speaks of combating Afghanistan's "culture of poverty." But that took decades in just a few square miles of the South Bronx. Gen. Stanley McChrystal, the U.S. commander in Afghanistan, thinks jobs programs and local government services might entice many "accidental guerrillas" to leave the Taliban. But before launching New Deal 2.0 in Afghanistan, the Obama administration should ask itself: If U.S. forces are there to prevent reestablishment of al-Qaeda bases -- evidently there are none now -- must there be nation-building invasions of Somalia, Yemen and other sovereignty vacuums?

U.S. forces are being increased by 21,000, to 68,000, bringing the coalition total to 110,000. About 9,000 are from Britain, where support for the war is waning. Counterinsurgency theory concerning the time and the ratio of forces required to protect the population indicates that, nationwide, Afghanistan would need hundreds of thousands of coalition troops, perhaps for a decade or more. That is inconceivable.

So, instead, forces should be substantially reduced to serve a comprehensively revised policy: America should do only what can be done from offshore, using intelligence, drones, cruise missiles, airstrikes and small, potent Special Forces units, concentrating on the porous 1,500-mile border with Pakistan, a nation that actually matters.

Genius, said de Gaulle, recalling Bismarck's decision to halt German forces short of Paris in 1870, sometimes consists of knowing when to stop. Genius is not required to recognize that in Afghanistan, when means now, before more American valor, such as Allen's, is squandered.

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