California Free Press

Off the Top of My Head

Rudy Giuliani Was Wrong and He Was Made a Fool Of

by John Lawrence

Why are half the people in the country, in which half the people consider Trump a fascist, still willing to vote for him? Rudy Giuliani said the following at Trump's January 6, 2020 rally:

“Over the next 10 days, we get to see the machines that are crooked, the ballots that are fraudulent, and if we’re wrong, we will be made fools of, but if we’re right, a lot of them will go to jail,” he told the crowd that day. “So, let’s have trial by combat.”

Well, Rudy was wrong, and he was made a fool of. Rudy Giuliani must give control of luxury items and his Manhattan apartment to the Georgia election workers he defamed, a judge has ruled. He must feel pretty foolish by now.

So why are so many people still supporting Trump? Because they are complicit in his lies, and, if he is made a fool of, they all collectively will be made fools of. This is why so many will vote for Trump. They think that by doing so, they will be vindicated and not made fools of. If Trump is elected, history about January 6 will be rewritten. He will free all the "hostages" currently serving jail time because of their role in the insurrection. They will be honored as heroes. All the lawsuits against Trump will magically disappear. All the Trump supporters complicit in his lies will be exonerated. However, if Trump is not elected and Kamala wins, he will face the consequences of several lawsuits and could go to jail. All his supporters collectively, in addition to Rudy Giuliani, will have been made fools of, and none of the January 6 rioters will get out of jail, much less will they be honored.

The 2024 US Presidential election in many ways will be a watershed moment. The whole nation in effect will have to live a lie if Trump is elected, and, if he's not, half the nation who believed in Trump will have been delivered a blow to their collective egos. If Trump is elected, the whole world will be changed. Instead of the US being the world's primary leading power, the one that the whole world looks up to, it will instead be only in it for itself making itself great again by withdrawing from the world community. The American empire with 750 military bases in 80 countries around the world would presumably be shut down and the resultant savings be allocated elsewhere presumably to make America great again.

The American Empire will probably come to an end if Trump is elected. Our European allies wouldn't trust us any more. Vladimir Putin would be vindicated and Ukraine partitioned. Russia would have a free hand in Ukraine. Netanyahu would have a free hand in the Middle East. Republican whip Tom Emmer said on CNN that "the American people are only interested in the economy" or words to that effect. That's all the German people were concerned about in the 1930s, and Hitler delivered on that. I doubt if Trump could be as clever. Trump's tariffs would destroy the American economy and possibly land the whole world in a Depression. The American experiment in democracy would be over. As Benjamin Franklin said, "It's a republic if you can keep it." In order to keep it, Kamala Harris must be elected. The alternative is fascism.

Off the Top of My Head

The US is Similar to Weimar Germany

by John Lawrence

In the 1930s the democratic government in Weimar Germany couldn't get much of anything done. It was largely because of this hapless democratic republic that Germany went for an autocrat that actually got a lot done because an autocracy doesn't have to deal with feckless bureaucrats in a democratic republic. The Weimar Republic came into being after Germany lost World War I. Germany suffered hyper inflation partly as a result of the large reparations Germany was required to pay as a result of having lost the war. Wikipedia says: "The Great Depression of October 1929 severely impacted Germany's tenuous progress; high unemployment and subsequent social and political unrest led to the collapse of Chancellor Hermann Müller's grand coalition and the beginning of the presidential cabinets. From March 1930 onwards, President Paul von Hindenburg used emergency powers to back Chancellors Heinrich Brüning, Franz von Papen and General Kurt von Schleicher. The Great Depression, exacerbated by Brüning's policy of deflation, led to a surge in unemployment. On 30 January 1933, Hindenburg appointed Adolf Hitler as Chancellor to head a coalition government; Hitler's far-right Nazi Party held two out of ten cabinet seats." Inflation? Unemployment? Is there anything in common here with the US circa 2024. Hitler got rid of the reparations and other undesirable terms of the World War I peace settlement. The point is that autocrats can get things done that democratic governments may quibble over due to their not being in agreement as to how to proceed.

One of the impediments to a truly democratic election in the US this year is the same thing that has affected elections since 2000: the electoral college. This makes the US not a true democracy in terms of electing a President. A true democracy would be one in which every vote of every American counted. With the electoral college pretty much only the votes of certain swing states or battleground states mean anything. In fact the winner of the popular vote in 2000, Al Gore and 2016, Hillary Clinton, lost the US Presidency due to the electoral college. What a different country the US would be if those two would have been elected Presidents. There would have been no January 6, for instance. And the US would be much further ahead and in more of a leadership role in terms of climate change. In addition to the electoral college destabilizing the election for President in the US, we have a Congress that is dysfunctional. In the Senate opposing parties keep filibustering legislation efforts by the opposite party, and in the House, they don't seem to be able to agree on a budget until the last minute to keep the government in business.

So autocrats offer a way out of the morass of democratic dysfunction. Hitler did it in 1930s Germany albeit with disastrous results for the Jewish population in particular and the world in general. For democracy to work, voters have to be relatively knowledgeable and sophisticated. Autocrats will misrepresent and lie about the opposing party and the state of the nation. Voters have to have the mental wherewithal to see through the lies and evaluate the situation with some degree of intelligence. Autocrats offer simple solutions to difficult problems. If elected they don't need the agreement of Congress especially if Congress is dysfunctional and can't come to any agreement about anything. They get things done because they don't need agreement from a representational body.Things often function more smoothly because you don't have to compromise between opposing parties. The US has to reform certain aspects of the US system or be in jeopardy of an autocrat taking over. Those aspects in particular are the electoral college and the filibuster.

Off the Top of My Head

"Spare me the bullshit about mental illness"

by John Lawrence

In sane countries abortions are legal and assault rifles are illegal just the opposite of the US. Italian women are eligible to request an abortion for health, economic or social reasons, including the circumstances under which conception occurred. Abortions are performed free of charge in public hospitals or in private structures authorized by the regional health authorities. Assault weapons are not legal in Italy, nor are any fully automatic rifles or handguns. Noise suppressors, or silencers, are also illegal, along with any kind of military or police-grade weapons. Abortion in the United Kingdom is de facto available through the Abortion Act 1967 in Great Britain, and the Abortion (Northern Ireland) (No. 2) Regulations 2020.The following are generally prohibited: Fully automatic or burst-fire weapons, which may include some air guns. Semi-automatic or pump-action rifles that fire centre-fire ammunition (e.g. Ruger Mini-14, L1A1). The Swedish Abortion Act came into force in 1974, giving women the right to decide for themselves whether they wanted to end a pregnancy in the first eighteen weeks. Since then, abortion procedures have become more effective, safe, accepted and accessible. Current Norwegian legislation and public health policy provides for abortion on request in the first 12 weeks of gestation, by application up to the 18th week, and thereafter only under special circumstances until the fetus is viable, which is usually presumed at 21 weeks and 6 days. In Norway there is a total ban on automatic firearms for civilians, unless they fall into the collector category. Modification of semi-automatic guns into fully automatic without the consent of the police is a felony crime. The EU already bans all automatic weapons, plus some semi-automatic guns widely available in the United States.

Apart from the very few European nations that retain highly restrictive laws on abortion — Andorra, Lichtenstein, Malta, Monaco and Poland — no other European country “bans” abortion after 15 weeks of pregnancy. Instead, almost all European countries allow abortion throughout pregnancy on a range of grounds, including where there are risks to a patient’s physical or mental health, and in situations involving severe or fatal fetal impairment. According to the Center for Reproductive Rights, 95% of European women of reproductive age live in a country where abortion services are available on demand.

NBC reported:

[Connecticut Senator] Murphy said the shooting deaths of 19 students and two teachers in Uvalde, Texas, on Tuesday was a uniquely American problem.

"This only happens in this country and nowhere else. Nowhere else do little kids go to school thinking that they might be shot that day. Nowhere else do parents have to talk to their kids as I have had to do about why they got locked into a bathroom and told to be quiet for five minutes just in case a bad man entered that building. Nowhere else does that happen except here in the United States of America. And it is a choice. It is our choice to let it continue," Murphy said.

In comments to reporters afterward, Murphy took aim at the Republican talking point that mass shootings are a problem of mental illness, not easy access to guns.

"Spare me the bullshit about mental illness. We don’t have any more mental illness than any other country in the world. You cannot explain this through a prism of mental illness, because we don’t — we’re not an outlier on mental illness. We’re an outlier when it comes to access to firearms and the ability of criminals and very sick people to get their hands on firearms. That’s what makes America different,” he said.

There are only three countries that have a constitutional right to keep and bear arms: Mexico, Guatemala, and the United States. The US quibbles while the earth burns and floods due to global warming. Nations are immersed in conflict while they need to be cooperating if the human species, despite all its vaunted high technology, is to survive. Earth itself will survive. The survival of the human species is doubtful unless every nation goes all out to prevent global warming which is not happening. What is happening is that nations are trying to prevent the release of greenhouse gasses on the margins without interfering with economic growth. It's a recipe for disaster.

Off the Top of My Head

The Glory of War

by John Lawrence

Throughout history men have gone to war to cover themselves in glory and prove their masculinity. In World War I, many young British men were gung ho for going to war. They intended to cover themselves in glory and be home before Christmas. Instead many of them died face down in muddy trenches or were impaled on barbed wire. According to historycrunch.com: "...one of the main reasons for the excitement of the war was that many viewed it as an adventure. They read stories about soldiers bravely marching into battle and dying heroically on the battlefields for their countries. For many of these young soldiers, they viewed the Great War as their opportunity to play a role in the ‘glory of war’ and follow in the path of earlier soldiers in earlier European conflicts. To them, war seemed adventurous and a show of bravery that many claimed they ‘did not want to miss’." It was forever so but in general only the victors were able to cover themselves in glory.

War, I would contend, is primarily a masculine pursuit. It represents an attempt by men to prove their manhood. Even some American Indian tribes cultivated a warrior tradition. Their women would have nothing to do with men until they had proved themselves in war. According to Wikipedia: "What evolved among the Plains Native Americans from the 17th to the late 19th century was warfare as both a means of livelihood and a sport. Young men gained both prestige and plunder by fighting as warriors, and this individualistic style of warfare ensured that success in individual combat and capturing trophies of war were highly esteemed." Not for nothing were they called Braves. Martina Sprague in her book The Glory of War: The Way to Historical Immortality writes:  "What motivates men to go to war? The answer is the desire for recognition and the opportunity to gain eternal fame. War is perhaps the most common way in which a man can become a hero. We tend to romanticize war. War is portrayed as a daring adventure for a sacred cause, where the soldier will ultimately reach the highest level of self-actualization. As demonstrated by the great military figures in history, the promise of honor and heroism can help a man conquer the world."

Covering oneself in glory, proving one's masculinity, becoming a hero, these are ultimately traps which cause the perpetuation of war. Some men become addicted to war, the excitement of war. If one war ends, they will seek out the next one. Life is never so dull as life without war. It is the ultimate football game because the stakes - life or death - are so high. Witness the volunteers from other countries who are putting their lives on the line in Ukraine. The problem is that the pursuit of peace is never as exciting as the pursuit of war. Until peacemaking becomes as noble and glorious a pursuit as war, there is no hope for the human race to live peaceably and cooperatively side by side with each other. Until they give out as many medals and honors for peace heroes as they do for war heroes, the human race will go down fighting and ultimately extinguish each other.

I'm afraid that the war in Ukraine is only the latest example of people preoccupied with the excitement of war. Sure it was a clumsy and ignoble thing for Russia to do to so overtly invade Ukraine. They should have taken a page out of the CIA's book and been more subtle and covert about it. For example, the CIA undermined the democratically elected regime of Salvador Allende in Chile because he was a socialist and a Marxist ushering in the regime of Augusto Pinochet and his reign of terror. "According to the Chilean government, the number of executions and forced disappearances was at least 3,095 [under Pinochet]. Operation Condor, a U.S.-supported terror operation focusing on South America, was founded at the behest of the Pinochet regime in late November 1975, his 60th birthday." I'm afraid that Zelensky is following the same playbook of promoting the war based on 'glory for Ukraine' and his David and Goliath symbolism. His insatiable lust for American artillery shells and other advanced weaponry is duly granted by President Biden and the European allies with the goal of "winning the war." No one except the Chinese seem the least interested in creating a peaceful solution to the war. Instead the war will only be escalated when Ukraine gets F-15 fighter jets. Then they will be able to hit Russian targets in Russia escalating the war even further. Until now tragically it's only Ukrainian civilian lives and property that are being destroyed.

It seems like revenge, hatred for Russia and glory for Ukraine are the ultimate factors at work here not a search for compromise which both sides can live with. Does Russia have any legitimate national security interests in Ukraine's not becoming a member of NATO? Did the US have any legitimate national security interests in Chile nor becoming a socialist and Marxist state? There are always many reasons for war, but few for peace. Meanwhile, a lack of cooperation among the world's nations is hastening the day in which global warming will put an end to human civilization unless we can wake up and see that peace and cooperation are more glorious than war.

Off the Top of My Head

What Are the Implications of Russia's Pariahdom for Global Warming?

by John Lawrence

All western politicians and pundits (with the possible exception of Tucker Carlson) agree that Russia is and shall ever be a pariah state. Putin is a pariah who should be tried for war crimes. So how is the world and the community of nations going to combat our truly mortal enemy - global warming? As a major producer of fossil fuels, in order to get off the fossil fuel bandwagon, we would need Russia's cooperation. If Putin is to be a pariah, he could care less about global warming. He's probably thinking about all the resorts he could build in Siberia! Besides that, as the world warms, the tundra in Siberia is thawing releasing tons of methane, a far more potent greenhouse gas than carbon dioxide. In recent years, climate scientists have warned thawing permafrost in Siberia may be a “methane time bomb”. But now a study by three geologists says that a heat wave in 2020 has revealed a surge in methane emissions “potentially in much higher amounts” from a different source: thawing rock formations in the Arctic permafrost. Russia and Putin could have the last laugh as the rest of the world goes up in flames and Russia adapts to a more moderate climate.

The Washington Post reported:

"The difference is that thawing wetlands releases “microbial” methane from the decay of soil and organic matter, while thawing limestone — or carbonate rock — releases hydrocarbons and gas hydrates from reservoirs both below and within the permafrost, making it “much more dangerous” than past studies have suggested.

"Nikolaus Froitzheim, who teaches at the Institute of Geosciences at the University of Bonn, said that he and two colleagues used satellite maps that measured intense methane concentrations over two “conspicuous elongated areas” of limestone — stripes that were several miles wide and up to 375 miles long — in the Taymyr Peninsula and the area around northern Siberia.

"The study was published by the Proceedings of the National Academy of Sciences. Surface temperatures during the heat wave in 2020 soared to 10.8 degrees Fahrenheit above the 1979-2000 norms. In the long stripes, there is hardly any soil, and vegetation is scarce, the study says. So the limestone crops out of the surface. As the rock formations warm up, cracks and pockets opened up, releasing methane that had been trapped inside."

Have the western politicos miscalculated or are they just playing into the Russian playbook in which the Russians are thinking 3 moves ahead on the chess board? The politicos and pundits all agree that Russia's financial lifeline is the sale of oil and gas and that the west must do everything it can do to shut off those sales starving Russia financially. But wait a minute. What they fail to understand is that Russia does not need the sale of gas or any other commodity to survive financially because the ruble is a fiat currency. The Russian central bank can print as many rubles as it likes with the only constraint being inflation. The US dollar is also a fiat currency and the US Federal Reserve can print as many dollars as it likes, the only restraints being political and again inflation which the US is now experiencing to a greater degree than Russia is. In fact the printing of Russian rubles will only tend to balance their economy and prevent it from going into recession. Meanwhile, the west, Germany in particular, struggles with replacing Russian gas and oil with gas and oil from other sources in a futile attempt to starve Russia financially. Ellen Brown has pointed out why sanctions may even be good for Russia because it forces Russia to develop sectors of its own economy rather than relying on imports from the west.

Besides Russia has a lot of friends in the world, some of them like Hungary who are even NATO members. Viktor Orban, Hungary's authoritarian leader and key Putin ally, calls Zelensky an 'opponent' after winning reelection. So while the US and Britain mainly fulminate over Russia's Putin being a pariah, not everyone in the non-western world agrees. Russia still has plenty of friends, just not in the US or Britain. Which brings is back to our original question, how can we solve the problem of global warming without Russia's cooperation even if we are not friends with them? Is it worth it to destroy the whole planet earth because of two countries engaging in a war no matter how brutal and ill founded? The west must eventually come to terms with Russia and with Putin if Putin is still the Russian leader when the war ends or watch while planet earth, not just Ukraine, goes up in flames.

Off the Top of My Head

There are Two Ways War in Ukraine Could Have Been Prevented

by John Lawrence

One, Ukraine could have been made a member of NATO before war began, and (2) Putin could have been given a guarantee that Ukraine would never become a member of NATO. So why didn't either one of these two possibilities prevent a destructive war which has brought death and destruction to the people of Ukraine? The fact is that NATO didn't want Ukraine as a member. Ukraine didn't meet NATO's high standards especially with regard to corruption. According to Wikipedia:

""Corruption is widespread in Ukrainian society. In 2012 Ernst & Young put Ukraine among the three most-corrupt nations of the world—alongside Colombia and Brazil. In 2015 The Guardian called Ukraine "the most corrupt nation in Europe". According to a poll conducted by Ernst & Young in 2017, experts considered Ukraine to be the ninth-most corrupt nation in the world. According to Transparency International's Corruption Perceptions Index (a scale of least to most corrupt nations), Ukraine ranked 122nd out of 180 countries in 2021, the second most corrupt in Europe, ahead of Russia. United States diplomats described Ukraine under Presidents Kuchma (in office from 1994 to 2005) and Yushchenko (in office from 2005 to 2010) as a kleptocracy, according to WikiLeaks cables."

Who knew? So NATO didn't want Ukraine as a member at least until it had cleaned up all the corruption. That gave Putin an open door to invade because Biden had declared that there would be no American involvement in terms of boots on the ground in Ukraine because he didn't want to start World War III. Plausible enough. However, Putin probably would never have invaded Ukraine if it had been a member of NATO which would mean that Russia would have to have been subjected to the collective wrath of all the European countries plus the United States. So instead of starting WW III, we would sanction the hell out of Russia. This, however, is not preventing Russia from wreaking havoc on the Ukrainian people.

Putin's chief demand was that Ukraine never become a member of NATO. Sweden and Finland are non-aligned so why couldn't Ukraine have agreed to the same status thus meeting Putin's main demand and prevented an invasion. All NATO had to do was offer Putin a piece of paper which was signed and dated and contained words to the effect that Ukraine would never become a member of NATO, and, furthermore, if Putin invaded Ukraine, the treaty would be abrogated. Instead the NATO negotiators would not even consider Putin's main concern. His logic was that the US would not allow missiles to be placed right on its border or anywhere in the western hemisphere for that matter. The US had been involved in the overthrow of democratically elected governments in all the Americas. According to Wikipedia:

"In Argentina, military forces overthrew the democratically elected President Isabel Perón in the 1976 Argentine coup d'état, starting the military dictatorship of General Jorge Rafael Videla, known as the National Reorganization Process. Both the coup and the following authoritarian regime was eagerly endorsed and supported by the United States government with US Secretary of State Henry Kissinger paying several official visits to Argentina during the dictatorship.

"After the democratic election of President Salvador Allende in 1970, an economic war ordered by President Richard Nixon, among other things, caused the 1973 Chilean coup d'état with the involvement of the CIA due to Allende's democratic socialist leanings. What followed was the decades-long US-backed military dictatorship of Augusto Pinochet."

In 1981, President Ronald Reagan authorized the Central Intelligence Agency to support the Contras, a right-wing Nicaraguan political group to combat the influence held by the Sandinistas in the Nicaraguan government. Various anti-government rebels in Nicaragua were organized into the Nicaraguan Democratic Force, the first Contra group, at the behest of the CIA. The CIA also supplied the Contras with training and equipment, including materials related to torture and assassination. There have also been allegations that the CIA engaged in drug trafficking in Nicaragua.

The US even sold weapons to its purported enemy, Iran, and used the money to fund the contras after the US Congress refused to do so. So while the US saw fit to protect its hemispheric interests, No one in the present US administration can see why Putin could possibly view Ukraine as a potential member of NATO as a threat even though geographically Ukraine can be seen as a dagger into the midsection of Russia. As a member of NATO, missiles might be stationed right on Russia's border with Ukraine, but why should Russia be concerned about this? NATO are, after all, good guys who wouldn't even let Ukraine join their club unless it cleaned up its act. While the US used the covert operations of the CIA to overthrow democratically elected governments and replace them with brutal military dictatorships, Russia has used its own military troops to do the same thing to protect its interests. That's the only difference.

The heart of the matter goes back to the end of the Cold War. According to The Untold History of the United States:

"Though willing to allow for the radical transformation of eastern Europe, Gorbachev hoped the end of the Cold War would lead to the dissolution of NATO as well as the Warsaw Pact. Recognizing that that might not happen, he insisted that NATO at least not expand farther to the east. He was even willing to allow for reunification of the two Germanys as long as NATO troops and weapons were not permitted on former East German soil. But he and other Russian leaders, who believed they had received ironclad U.S. and German promises that eastward expansion by NATO would never be permitted, were in a for a rude awakening when the Clinton and second Bush administration continued expanding right up to Russia's doorstep. Russian leaders expressed outrage and a sense of betrayal. Although U.S. officials, over the years, have insisted that no such promises were ever given, recently released documents appear to substantiate Russian claims."

So NATO could have proffered a treaty to Putin which guaranteed that Ukraine would never become a member of NATO or they could have negotiated a time period when Ukraine would not be permitted to join. Instead they refused to even negotiate that demand with disastrous results. A hundred years from now NATO might not even exist. It may have been replaced with a new organization that better takes care of the security interests of all European countries including Russia. But the memory of the war in Ukraine will persist a hundred years from now. It represents in the final analysis a total failure of NATO to protect the security interests of all Europeans and not just a select few.

Off the Top of My Head

Russia's Assurance that NATO Would Not Expand an Inch Eastward After the Cold War

by John Lawrence

Does Putin have a point? It is something no western leader will even acknowledge. The fact is that assurances were given to Gorbachev in return for his agreement to let Germany reunify that NATO would not expand an inch eastward. The New York Times reported:

"The biggest obstacle [to the reunification of Germany] was, of course, the Soviet Union. Despite economic hardship at home, the Soviets maintained 380,000 troops in East Germany and still held legal rights of occupation emanating from the unconditional German surrender in 1945. Bonn and Washington thus wanted Moscow to remove its troops and to renounce its claims, without forcing NATO troops out as part of the bargain.

"What would Mr. Gorbachev demand in return? To learn the answer, Mr. Baker [U.S. Secretary of State] and Mr. Kohl [German Chancellor] journeyed to Moscow within a day of each other. On Feb. 9, 1990, Mr. Baker asked Mr. Gorbachev, “Would you prefer to see a unified Germany outside of NATO, independent and with no U.S. forces or would you prefer a unified Germany to be tied to NATO, with assurances that NATO’s jurisdiction would not shift one inch eastward from its present position?” Mr. Gorbachev, according to Mr. Baker, answered that “any extension of the zone of NATO would be unacceptable.” Their meeting ended without any final deals made. Mr. Baker left behind a secret letter, detailing what he had said, for Mr. Kohl in Moscow.

Back in the U.S. President George H W Bush was not happy with Baker's assurances to Gorbachev, and he formulated his own letter to Mr. Kohl that didn't contain the assurances Gorbachev requested. However, in talks with Gorbachev Kohl chose to emphasize Baker's assurance that "NATO would not move an inch eastward" which resulted in Gorbachev agreeing to the reunification of Germany. The New York Times article continued:

"Mr. Kohl chose to echo Mr. Baker, not Mr. Bush. The chancellor assured Mr. Gorbachev, as Mr. Baker had done, that “naturally NATO could not expand its territory” into East Germany. The documents available do not record Mr. Kohl using the presidential phrase — “special military status” — that the National Security Council had rushed over to him. Mr. Kohl’s foreign minister, Hans-Dietrich Genscher, visiting the Kremlin as well, assured his Soviet counterpart, Eduard Shevardnadze, that “for us, it stands firm: NATO will not expand itself to the East.”

"Crucially, the Gorbachev-Kohl meeting ended with a deal, as opposed to the Gorbachev-Baker session the previous day. After listening to Mr. Kohl, Mr. Gorbachev agreed that Germany could unify internally. Mr. Kohl and his aides publicized this major concession immediately at a press conference. Then they returned home to begin merging the two Germanys under one currency and economic system."

No U.S. President or leader has ever acknowledged the truth of this situation that, despite the fact that no formal treaty or agreement was ever made, informal assurances were given to Gorbachev that NATO would not expand an inch eastward. So today Russia and the US are on the brink of war in Ukraine because, basically, the U.S. will not acknowledge that Putin has a point. They refuse to concede even that and instead choose to demonize him. This is not how to create peace in the world - by heaping bad intentions on a foreign leader without acknowledging that he has a legitimate complaint. One of the pundits on CNN had the right idea. He said that the west should acknowledge the legitimacy of Putin's position and agree to pull back NATO forces from eastern Europe for at least 25 years or so. Making some sort of concession like this could avoid war and create some manner of peaceful relations between Washington and Moscow. Instead the U.S. - even under Biden! - takes a hard line and insists that Ukraine has a right to choose to be part of NATO. By formally putting off the date at which that could happen, Putin's legitimate concerns could be acknowledged. Instead the U.S. has essentially double crossed Russia on the deal Gorbachev made that "NATO would not expand one inch eastward."

Off the Top of My Head

The Shortcomings of Democracy

by John Lawrence

What other countries are concerned about is the specter of Trump coming back in 2024 and reversing everything Biden will have accomplished specially with regard to climate change. An American government no matter how well intentioned and competent cannot maintain itself in power for a long time. It can be replaced by a malevolent and incompetent one in relatively short order. It almost makes you look on other forms of government with envy. Angela Merkel was in power in Germany for 16 years. She was a steady hand on the tiller. Trump tried to rip the tiller out of the ship and he may come back to try and do it again. It's not only China which has long term stability, but China has been pretty consistent in delivering for the Chinese people over a fairly long term. Their government is stable no matter what else you want to say about it. They also promote the best and the brightest to high positions in the government. Trump put in place agency heads that were dedicated to destroying the agencies they were in charge of and many were incompetent political cronies to boot.

Coherence, cohesion - these are values that do not apply to the American people. The American people are freedom fanatics, freedomaholics. In most other advanced societies the value of freedom is balanced by the value of social responsibility. When freedom is way out of proportion with other values, you have a society that can come apart at the seams which is what is happening to American society. The American system engenders a two party system by its very nature, and almost inevitably it develops into two parties which are diametrically opposed to each other. A parliamentary system of government gives rise to  many parties, and that is less likely to devolve into a major societal divisions.

The other thing that contributes to the divisiveness of American society is the American predilection for guns. The supposed right of every American to own and use a gun creates a situation where angry people with a penchant for freedom are more likely to use their gun if they don't get their own way. If they sense that some people are on the other side of a divided society, they feel justified and entitled to use their guns to demand that society conform to their values much in the some way that a divided society resorted eventually to a civil war in America's past. Right now militias and paramilitary units roam the streets similar to the situation in Germany that predated World War II. If a society can't control or prohibit the private accumulation of guns, if it even encourages it, nothing good can come from this situation. All the preliminary conditions are in play for eventual uprisings which, if organized and controlled from above, can have disastrous consequences for civil society.

'This Summit Was a Failure': Biden-Merkel Meeting Ends With No Deal on Vaccine Patent Waiver

U.S. President Joe Biden and German Chancellor Angela Merkel hold a joint press conference in the East Room of the White House in Washington, D.C. on July 15, 2021. (Photo: Saul Loeb/AFP via Getty Images)

Biden's inability to persuade Merkel to drop her opposition to the patent waiver "delivers a punishing blow to efforts to end the pandemic," said one critic.

 

Jake Johnson

July 16, 2021

The brief bilateral summit between U.S. President Joe Biden and outgoing German Chancellor Angela Merkel ended Thursday without any commitment from the European leader to drop her opposition to a temporary patent waiver for coronavirus vaccines, a result that public health campaigners dubbed a major failure as infections continue to surge across the globe.

"Tens of millions of lives and livelihoods worldwide are left in peril, including here, given that raging Covid outbreaks anywhere increase the chances for a vaccine-resistant strain emerging."
—Lori Wallach, Public Citizen

Lori Wallach, director of Public Citizen's Global Trade Watch, said in a statement that Biden's inability to move Merkel on the patent waiver "delivers a punishing blow to efforts to end the pandemic."

"People around the world dying for lack of vaccines were relying on Biden to get Merkel to stop blocking the waiver given that he promised that if elected president, he wouldn't allow Big Pharma monopolies to block global vaccine and treatment access," said Wallach. "Tens of millions of lives and livelihoods worldwide are left in peril, including here, given that raging Covid outbreaks anywhere increase the chances for a vaccine-resistant strain emerging. We urge the president to redouble his efforts to get the waiver enacted."

While Biden reportedly raised the patent waiver during his private meeting with Merkel on Thursday, it's unclear to what extent he pressed the German leader on the issue—and the president did not mention the proposal during a news conference following their discussion.

Merkel, who was also silent on the patent waiver during the media briefing, said that "we are convinced... that overcoming this pandemic is only possible if as many people as possible are vaccinated in our countries."

"We have to also support the rest of the world with vaccines. We work together with COVAX," the German leader said, referring to the World Health Organization-backed global vaccination initiative that has struggled to meet its goals due to supply shortages.

Experts and public health advocates have argued that the only way to ensure the speedy production and equitable distribution of at least 11 billion vaccine doses—the number believed to be necessary to end the pandemic worldwide—is to temporarily suspend intellectual property protections that are allowing major pharmaceutical companies to maintain a vice grip on vaccine formulas and key technology.

Activists amplified that message outside the White House and across the nation during Merkel's U.S. visit, lining up body bags in the nation's capital to symbolize the preventable deaths caused by the European leader's continued obstruction of the waiver proposal, which India and South Africa first introduced at the World Trade Organization (WTO) back in October.

Proponents argue that a suspension of certain intellectual property protections for the duration of the pandemic would help facilitate the production of generic vaccines, which could then be distributed to low-income nations that have struggled to obtain doses thanks in part to hoarding by wealthy countries.

"As long as Germany withholds its approval of the TRIPS waiver, it threatens the lives of millions of people around the world and our ability to crush the virus."
—Rep. Pramila Jayapal

According to Our World in Data, just 1% of people in low-income countries have received at least one vaccine dose. Haiti—in the midst of a political crisis following the assassination of its president—had yet to administer a single vaccine dose as of Thursday, when 500,000 doses donated by the U.S government through COVAX arrived in the country.

Jean Gough, UNICEF's regional director for Latin America and the Caribbean, said in a statement that "thanks to this donation, hundreds of thousands of Haitians will receive their shots against Covid-19."

"Yet, despite the collective efforts to kickstart the vaccination campaign soon, most of the Haitian population is at risk of remaining unvaccinated due to the limited availability of doses currently in the country," Gough warned.

Biden garnered widespread applause after he voiced support for the temporary patent waiver in May, but the president has since come under fire for not doing enough to convince other world powers—including Germany, Canada, and the United Kingdom—to follow suit. Because the WTO operates by consensus, a handful of rich countries have the power to block a proposal backed by more than 140 countries.

"This summit was a failure," Wallach said Thursday, "and we urge Biden to prioritize getting the WTO waiver enacted ASAP so more Covid vaccines and treatments can be produced worldwide."

With Germany and other rich countries stonewalling the patent waiver, the ultra-contagious Delta variant of the coronavirus is running rampant in undervaccinated regions of the world, including Africa, South America, and pockets of the United States. The World Health Organization said Thursday that Africa reported a million coronavirus cases in just the past month, the fastest surge of new infections on the continent thus far.

"As long as Germany withholds its approval of the TRIPS waiver, it threatens the lives of millions of people around the world and our ability to crush the virus," U.S. Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus, said in a statement Thursday, referring to the Trade-Related Aspects of Intellectual Property Rights agreement.

"The pandemic isn't over until it's over everywhere," Jayapal added.

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Off the Top of My Head

The Toxicity of True Believers

by John Lawrence, December6, 2015

People believe things for a variety of reasons. If there are no facts, people will believe whatever they want probably with no or few consequences. But people will also believe the opposite thing even when facts are available. Sometimes this is harmless, and sometimes it's dangerous. For instance, Hitler spread the conspiracy theory that in fact Germans had not lost the First World War. Instead they were sold out by Jews and Social Democrats. Germans could be losers in contradistinction to the facts. Likewise, Donald Trump could not have lost the election despite the facts. What is scary is that a lot of Germans believed Hitler, and a lot of Americans believe Trump. There are also similarities with the Spanish Civil War which happened because Franco didn't accept the outcome of a democratic election, and a lot of Spaniards went along with him.

The problem is that Americans have not been taught by their educational system to think critically, to not accept something that isn't fact based as the truth. Instead, many people, especially those that are religious, are taught that it is more important to believe things which are unknown rather than take the attitude of skepticism until all the facts are in. How many times do the votes in Georgia need to be recounted before Georgians will accept the fact that Trump lost the election in Georgia? It's not hard to understand why the right wing of the Republican party is willing to believe Trump's lies in contradistinction of the facts. They are by and large the true believers of evangelical Christianity which maintains the belief that the essence of the Gospel consists of the doctrine of salvation by faith or correct belief. Evangelicals believe in the centrality of the conversion or "born again" experience in receiving salvation, in the authority of the Bible as God's revelation to humanity, and in spreading the Christian message. In other words right wing religious Christians who are mainly Protestants, have firmly rooted belief systems. They have been taught that believing in something is more important than a rational consideration of the facts.

Max Weber's book The Protestant Ethic and the Spirit of Capitalism is a study of the relationship between the ethics of ascetic Protestantism and the emergence of the spirit of modern capitalism. Protestantism represented a shift from the social Gospel of Catholicism which maintained that doing good for others was the pathway to salvation to an ethic that believing was the way. Thus, if you believed correctly, you were more likely to get into heaven than if you believed incorrectly. Your salvation had nothing to do with helping other people. Therefore, you were free to profit financially without responsibility to anyone else. This is the essence of capitalism. But also it inculcates the belief that beliefs in and of themselves are more important than a rational assessment of facts.Some people would call this brainwashing. Brainwashing is the concept that the human mind can be altered or controlled by certain psychological techniques and is said to reduce its subjects' ability to think critically or independently, to allow the introduction of new, unwanted thoughts and ideas into their minds, as well as to change their attitudes, values and beliefs.

People that are subject to brainwashing in the religious sense are also vulnerable to being brainwashed in the political sense. There have been true believers in communism, for example, as well as true believers in capitalism. When people haven't been taught how to think critically, they are vulnerable to becoming true believers in whatever some charismatic leader tells them whether it's a charismatic evangelist or a charismatic political figure such as Hitler, Mussolini, Franco or Donald Trump. The fact that many of Trump's true believers numbering perhaps in the tens of millions believe him when he says that the election was rigged and that he really won the election and that the election results should be overturned represents a dangerous retreat from democratic values in the same way that Hitler's rise overturned the democratic values of the Weimar Republic. It is important to remember that Hitler came to power within the constitutional framework of the democratic Weimar Republic.

Hitler stood for Germany first just as Trump stands for America first. In Hitler's framework only true Germans, meaning non-Jews and non-immigrants should be allowed to exist in Germany. Similarly, Trump represents white Americans who are against immigrants and non-Americans who in their mind are everybody who is not a descendant of white Europeans. Trump is not giving up. His true believers have a profound belief that the election was rigged and that Trump really won despite the factual reality that he lost. Trump and his followers cannot accept defeat and losing. He has always disparaged losers of which, arguably, he is now one of them. Trump's strategy was to get his case considered by the Supreme Court of which he has appointed three of the Justices in the belief that they would remain loyal to him and overturn the results of the election. He has even broached the idea of declaring military law while appointing Trump loyalists in critical positions within the Pentagon. He is attempting in every way possible to create a coup d'etat which would result effectively in a Trump dictatorship and the end of democratic constitutionalism in the United States.

Off the Top of My Head

Trump's Götterdämmerung

by John Lawrence, November 20, 2020

As Russian troops were entering Berlin in the last days of WW II, Hitler, deep in his bunker in Berlin, issued his final orders that all German bridges and roads were to be blown up. Anything of value in Germany was to be destroyed. He didn't want anything but a destroyed Germany turned over to the Allies. Fortunately, the German Generals ignored his orders. Similarly, Trump, still the most powerful man in the world, for the next two months, is taking his revenge for losing the election, as Hitler did for losing the war, by destroying as much of the US as possible before handing it over to Joe Biden. Hitler had lost faith in the German people because they had betrayed him by losing the war. Trump is showing his total disregard for America for turning him into a loser.

Götterdämmerung is the last in Richard Wagner's cycle of four music dramas titled Der Ring des Nibelungen in which Valhalla is destroyed by flames. It can be interpreted as a death wish for society if the leader himself must die. It has been interpreted as Hitler's wanting to destroy German society if he himself must be destroyed. If he could not prevail, he wanted to totally bring Germany down with him. Trump is acting in a similar manner. He is presiding over the worst pandemic in US history while steadfastly refusing to do anything about it. He will not do anything at this point to help the American people. There will be no stimulus or relief package as long as Trump remains as President. He has ordered an end to the Federal Reserve's emergency relief funds just today. Neil Bradley, US Chamber of Commerce VP & Chief Policy Officer said, "A surprise termination of the Federal Reserve's emergency liquidity programs ... prematurely and unnecessarily ties the hands of the incoming administration, and closes the door on important liquidity options for businesses at a time when they need them most." Of course Trump's main goal is to "tie the hands of the incoming administration." He wants to make Joe Biden's job as the next President as difficult and hamstrung as possible. Why do you think he won't let the GSA give access to the normal transition funds and office space? Why do you think he won't cooperate with the incoming Biden administration in any way?

As a LOSER, Trump is becoming the most dangerous man in the whole world. If he can't be America's Führer, he wants to destroy America just as Hitler issued orders to destroy Germany. It is the American Valhalla. Just as in Trump's America, Hitler's Germany was rife with conspiracy theories. The historian John Roberts suggested that the killing of Siegfried by Hagen with a stab in the back gave inspiration for the myth that the German Army did not lose World War I, but was instead defeated by a treasonous "stab in the back" from civilians, in particular Jews and Socialists. So Trump did not actually lose the election, but a vast conspiracy was concocted to overturn its results. How else could Joe Biden win? Richard Wagner himself was a notorious anti-Semite. In America circa 2020. there are too many conspiracy theories to shake a stick at, the flames of which are fanned by numerous conservative talk show hosts and passed around on social media, one of the biggest of which is that George Soros, a Jew, is responsible for the fact that the Democrats have defeated Donald Trump.

The New York Times reported:

On both sides of the Atlantic, a loose network of activists and political figures on the right have spent years seeking to cast Mr. Soros not just as a well-heeled political opponent but also as the personification of all they detest. Employing barely coded anti-Semitism, they have built a warped portrayal of him as the mastermind of a “globalist” movement, a left-wing radical who would undermine the established order and a proponent of diluting the white, Christian nature of their societies through immigration.

In the process, they have pushed their version of Mr. Soros, 88, from the dark corners of the internet and talk radio to the very center of the political debate.

As in Germany, so in America: conspiracy theories, the entertainment value of hate and anger purveyed by vitriolic blowhards including Hitler and Trump themselves, the blaming of "the other" for their problems. Trump could make his Götterdämmerung complete by launching a military strike on Iran thus starting World War 3. It has just been reported that Iran is stockpiling more fissile material than it was supposed to although Trump vacated the JCPOA nuclear agreement with Iran so he left them free to do so. Trump seems determined to leave Joe Biden an unholy, unmanageable, ineffably destructive mess. His determination to tie Joe Biden's hands as much as he possible can before he leaves office is apparent. If he cannot overturn the results of the election, Trump will pull America down with him.

Off the Top of My Head

Trump's Scattershot Foreign Policy

by John Lawrence, November

Trump never had a foreign policy per se just a lot of disconnected impulses and hunches some of which might have borne fruit if there had been some coherent plan for following up. Take Kim Jong Un for instance. I think it was a good thing that he managed to have a personal relationship with him. But nothing came of it because there was no attempt to continue the relationship with any concrete plan. Trump's latest move is to withdraw more troops from Iraq and Afghanistan. But he should have gone ahead and withdrawn them all and ended those ongoing disasters once and for all. Instead he leaves a "token" force there. This is the US military establishment's basic problem; they want a token force in every country of the world. If Trump wanted to be consistent, he would have removed the 50,000 troops from Germany and the 30,000 troops from South Korea. There is no need to occupy all these countries - at great expense to American taxpayers, I might add - since the US has excellent intelligence of all kinds including satellite and human intelligence so that it knows what's happening anywhere in the world and can react almost instantaneously if the need be. A troop presence is unnecessary. Remember the drones?

Trump made a point that NATO - meaning basically Germany - was not paying its fair share. They should have been paying more and doing more to defend themselves and not relying so much on the US. So far, so good. He did get Germany to increase its defense budget, but then he turns around and increases the US defense budget instead of reducing it commensurately. Plus he could have withdrawn the 50,000 US troops from Germany saving a ton of money. Trump's inconsistency is the hallmark of his foreign policy since to call it even a policy is a stretch. A policy connotes some kind of intelligent forethought and planning neither of which were in Trump's skill set.

As far as becoming friends with Vladimir Putin, I think this was a good thing. It is better to have warm personal relationships with the leaders of countries with whom we have potentially tense or adversarial relationships. It is important also not to let those leaders take advantage of or manipulate the US by means of these relationships. It's not clear if this was what was happening. Trump started out with China on the same wavelength which was also a good thing until he decided that it was in his interests to blame China for the "China virus" and start another cold war with China. It is extremely important to have good relationships with Russia and China at this point because cooperation on global warming is essential. Also China is going to come out of the pandemic with the world's leading economy. America will be relegated to number 2. It was more or less tied before the pandemic, but China got the pandemic under control and reopened its economy several months ago.

Trump's attitude towards Iran is not constructive. He withdrew from the JCPOA, and is now contemplating evidently a strike on Iran which would be disastrous. Despite Trump's possible personal business interests in Russia and/or China which led him to be initially more friendly towards those countries, I still think that his detente with them was a positive thing. The Democratic leadership on the other hand seems intent on demonizing Vladimir Putin instead of working with him in a more friendly fashion. I suspect that a Biden administration will try to have a more constructive and positive relationship with China than the Trump relationship devolved into. The boneheaded attempts by Trump to compete with China by demonizing Tik Tok and Huawei will come to an end, I hope. Again the importance of cooperation with regard to global warming between the world's two largest economies cannot be overstated.

Trump's delight in selling billions of dollars worth of weapons to Saudi Arabia was just abhorrent. Fanning the flames of war because it's good for the economy is reprehensible. Let us hope that the Biden administration takes a more constructive approach to reducing the US' occupation forces in many countries of the world, reducing the US footprint, ending finally by means of a total troop withdrawal the wars in Iraq and Afghanistan and working cooperatively with the major countries of the world with whom somewhat adversarial relationships have been developing unfortunately. Cooperation and diplomacy should be the watchwords as we try to repair the harm that that US military forces have inflicted in the Middle East and elsewhere putting more emphasis on constructively rebuilding those countries and resettling the millions of refugees that these wars have caused.

Off the Top of My Head

Let's Talk About the Communist Bogieman

by John Lawrence, October 8, 2020

After the vice Presidential debate last night Trump called Kamala Harris a communist. Let's be clear: communism is a system in which the government owns all property and makes all economic decisions. Let's also be clear about this: nowhere in the world today does communism exist. Not in Russia. Not in China. Not in Cuba. In Russia private ownership of enterprises and property had essentially remained illegal throughout the Soviet era, with Soviet communism emphasizing national control over all means of production. In the 1990s, during the Presidency of Boris Yeltsin, there was  large-scale privatization of Russia's state-owned assets, particularly in the industrial, energy, and financial sectors. Privatization shifted Russia from the Soviet planned economy towards a market economy, and resulted in a dramatic rise in the level of economic inequality. It facilitated the transfer of significant wealth to a relatively small group of oligarchs.

In China private property and state owned enterprises co-exist. According to the NY Times: "Today, the private sector contributes nearly two-thirds of the country’s growth and nine-tenths of new jobs, according to the All-China Federation of Industry and Commerce, an official business group." In fact the reason why China has pulled 800,000 people out of poverty in the last 40 years is that the economy has been partially privatized. There are more billionaires in China than in the US. Many people in China went from being poor to middle class due to the privatization of the housing market. So although China is still ruled by the Chinese Communist Party, its government is communist in name only. They should probably eliminate the word "Communist" from the party's name.

Now consider Cuba. In 2010, Cuban leaders Fidel and Raul Castro made the decision to abandon the old Soviet model of centralized planning. In 2011, new laws were enacted to expand the right to private property. In 2019, a new Constitution was approved which officially recognizes the right to private property, while also reconfirming the central government's authority over the regulation of production and land.

So if the accusation that Kamala is a communist is ridiculous, what about socialism? There is not one definition of socialism. Many of the western democracies like France, Germany, the UK and Sweden, which are US allies, have been governed by democratic socialist parties. These societies have market economies including the encouragement of entrepreneurialism, but also have a government provided social safety net including universal health care, free or inexpensive education from pre-K through college, allowances for child care, elder care etc. Sweden's government even owned a hamburger chain until recently and owns Sweden's state-run alcohol monopoly Systembolaget. The democratic socialism advocated by Bernie Sanders and others is nothing more than a model based on Sweden where there are high taxes on the wealthy which provide a government sponsored safety net for the middle class and the poor. Today there is one more reason why there should be a strong social safety net: global warming. It is clear that private enterprise is not up to the job of reducing greenhouse gas emissions to zero within a reasonable amount of time, reasonable meaning before the earth becomes uninhabitable.

Today in the US we  have a nominal capitalist or free market economy, but even in this economy the government institutes the rules within which the economy operates. The rules are set up and tweaked by those in power, those who have the money to hire lobbyists to convince legislators to write the rules in their favor, namely large corporations and the very wealthy. Don't be fooled by the meme that the powerful don't want government regulations. They do want regulations, but regulations that favor their interests and not the interests, necessarily, of the average person who doesn't have the resources to influence legislation by hiring lobbyists.

Today Kamala Harris and other Democratic progressives are really taking the realistic middle ground when they advocate for government policies which will mitigate and reduce climate change and provide a social safety net for the American people. This goes against the interests of the oil and gas industry to be sure. To advocate for universal health care is to advocate for the health care system that Canada and all our allies already have in pace. To advocate for policies that reduce the out of bounds economic inequality by taxing the rich and spending the money on raising the economic level of the poor and lower middle class only makes sense. None of these policies make Kamala Harris a communist since communism doesn't even exist in the world today. Formerly communist countries have given way to hybrid economies in which private enterprise and state owned enterprises coexist with, in the case of China, private enterprise having been the significant factor in improving the lives of the Chinese middle class.

Today, the US has gone way overboard towards an economy controlled by the rich and powerful in their own interests. Economic inequality has gotten way out of hand. The balance needs to be redressed and only a government which uses its authority to diminish the economic power of the wealthy and augment the power of the poor and middle class can provide the necessary change. Good paying jobs can be created which address infrastructure and climate change needs. So more or less a Green New Deal or whatever else you want to call it is necessary. Too bad that Republicans have gone out of their way to demonize that name as they've gone out of their way to demonize Obamacare or any other initiative progressive Democrats put forth. That is their stock and trade - not discussing the merits but demonizing the name.

Off the Top of My Head

About Lying

by John Lawrence, September 16, 2020

To be blunt lying is as American as cherry pie. Lawyers lie even if they know their client is guilty. Prosecutors lie even if they know the defendant is innocent. In fact the best lawyers are the ones who can lie with the straightest faces as if they were telling a profound truth. Ads on TV lie all the time. About the only thing you can't claim for a product is that it will cure cancer. That's a no no. But for anything else it's caveat emptor - buyer beware. The same holds for politics. I'm not a fan of President Trump, but I find it naive that some newscasters are astounded that Trump lies routinely. Political ads lie routinely. Facebook posts lie routinely. If you did away with lying, you would do away with half or more of public discourse. That's why fact checking is so important. Some people want to believe lies because they are sexier than the truth.

Then we get to conspiracy theories. Basically they are whole congeries of lies. They are lies upon lies that somehow manage to create a story. This isn't hard to do. Works of fiction are by definition not reality, but they make sense because they tell a story. So do conspiracy theories. They just do not represent reality. They are lies based upon lies. They are whole multilevel structures of lies. Getting to the basis of what's true, what's factual, what represents reality is the work of all of us. American culture does not make it easy when so much of it is based on lies. There are a few people we can trust to tell the truth. Dr Fauci is one. So is Bill Gates. But when there is a truth teller among us, the first thing that some people want to do is to cast doubt on their veracity. They want to make up conspiracy theories about them. It seems that some people find the truth to be too bland, too unsexy.

What this boils down to is the Nazification of American culture. Hitler supplied the conspiracy theories that the Germans needed to assuage their feelings of defeat over the First World War. It was not your fault, Hitler told them. You were betrayed by the Jews.Hitler gave them pageantry, campaign rallies complete with torchlight parades, symbols like the Nazi flag, a rationale why they found themselves in such miserable circumstances. He created a culture that was fun and sexy, one that gave Germans something to look forward to after they became immersed in their Germanness and rid the world of certain nonGermans. Hitler gave them entertainment; he gave them something to cheer about. He was an exiting public speaker.

American demagogues have done much the same thing. They have taken their approach right out of Hitler's playbook. Concoct a reality that is more entertaining than factual reality. Give them someone to blame for their lack of success. Whether it was Father Coughlin, Joe McCarthy, George Wallace or Donald Trump, their tactics and techniques are similar. They cater to a downtrodden group which has seen better days and is resentful of the fact that they have landed up where they are. They are highly entertaining. They give their followers something to cheer about. Entertaining crowds is their forte. They encourage conspiracy theories especially about their perceived enemies, the ones responsible for their being where they perceive they are. They look forward to a future utopia when their enemies have been vanquished and they will take their true place in history, the place they were destined to achieve. Destiny is theirs once they rid the world of undesirables.

Which brings us back to lying and Donald Trump. Since he lies so consistently, it's easy to discern the truth. It's usually the opposite of what he says. A good liar will tell the truth about 50% of the time. Then you never know whether he is telling the truth or lying. Lying usually works with people who have no critical thinking ability. They can't tell truth from fiction because they just accept unquestioningly what their leader tells them. A free society demands fact checking. Facebook, Instagram and all the social media should employ watchdogs to fact check posts so they don't get out of hand. Hate speech should just be taken down. The First Amendment doesn't apply to private property so Facebook can do whatever they want with posts on their platform. Twitter is taking a more aggressive approach with fact checking even fact checking the President. This will throw cold water on the cult like atmosphere Trump and other right wingers are trying t create.

Off the Top of My Head

Is Police Reform Enough?

by John Lawrence, June 10, 2020

The people in power, the status quo, thinks they can contain the Black Lives Matter movement to just police reform. They just don't want any profound changes to the system that go beyond police reform. So let black football players kneel all they want, but they just need to keep playing so the profits keep coming. Remove a few Confederate statues, rename a few military bases, but don't challenge the trillion dollars a year spent on the military. Defund the police, but, whatever you do, don't defund the military. Don't remove any of the US military bases that exist in almost every country of the world. The United States maintains nearly 800 military bases in more than 70 countries and territories abroad. Do we really need military bases in Germany and Japan?

So pass a few laws about police reform, but don't threaten the power structure in this country. Throw black people a few bones, and maybe the whole BLM movement will quiet down and just go away. Then we can get back to business as usual and rich people can get on with the job of getting insanely richer. Inequality will remain the same. Those in power will stay in power. Legal bribery in terms of lobbying will remain in effect. That's the way business is done in this country. Needless to say poor people can't afford to hire lobbyists. Political reform will be off the table as will economic reform.

The American version of capitalism will continue to reap rewards for the billionaires while the Chinese version of capitalism will continue to bring people out of poverty and build infrastructure in many parts of the world. While the US polices and sanctions, the Chinese are winning friends and influencing people, much as Dale Carnegie suggested. It's no longer a question of capitalism vs communism. Every country in the world, including the US is some combination of both. Some countries just implement their version more effectively. The US implements its economic system in such a way that it favors the rich and condones the rest to debt servitude including middle class people strapped with student loan debt which they don't have a prayer of paying off. Don't worry payday lenders are only reaping 400% interest.

So will the BLM movement just die away satisfied with the result of police reform - no more chokeholds, no more no knock warrants, a few other things if Republicans go along which they probably won't at the Federal level. The Democrats can pass all the legislation they want. It is meaningless if it never passes the Senate and gets enacted into law. It is just spinning their wheels. It's gridlock; it's not democracy. It's democracy hamstrung; it's democracy rendered impotent. It's a political system which will patronize the BLM movement and give it a few ineffectual reforms, more lip service than anything. The real profit making infrastructure will not change. Perhaps they will absorb a few black people into the power structure by giving them a few more positions on corporate boards, but the power structure itself will not change. Poor and homeless people will stay poor and homeless. even if a few escape their dire situations. The media will highlight some black person who escaped poverty and made a million dollars. See you too could do it if you only had the gumption. This is the message they will send. Just pull yourself up by your own bootstraps as so many others have done. Systemic inequality will still remain even if systemic racism doesn't. The only mistake the recent looters made was not forming a hedge fund before they started looting.

Off the Top of My Head

US Alienating European Allies by Sanctioning Nord Stream 2 Natural Gas Pipeline

by John Lawrence, December 15, 2019

The US is getting prolific in its use of sanctions. It is now targeting a Russian pipeline, the Nord Stream 2, which is set to deliver natural gas to Germany. This is irritating the hell out of German Foreign Minister Heiko Maas who tweeted, “the European energy policy will be decided in Europe, not in the U.S. We fully reject external interference and extraterritorial sanctions.” So the US is pissing off not only its supposed enemies but also its friends and allies all over the world by its use of sanctions, which sanctions in Russia's and Germany's case will not do much to stop the almost completed pipeline. The sanctions — crafted by Senators Ted Cruz, Republican of Texas, and Jeanne Shaheen, a New Hampshire Democrat — have been attached to the 2020 National Defense Appropriations Act, which already has been approved by Congress.

The sanctions will also apply to to the TurkStream pipeline from Russia to Turkey which runs under the Black Sea. It seems everyone wants to get their natural gas from Russia and the US is doing a last ditch effort to slow down that progress although the effort will be futile in the long run and the only legacy will be that the US has pissed off its allies. The Nord Stream 2 runs under the Baltic Sea and allows Russia to by pass Ukraine which has become a sore spot for everyone concerned there. According to Bloomberg:

Congress could have been much harsher with its sanctions, though. It could have hit Nord Stream 2’s financial investors, all major European energy companies: Engie SA, Uniper SE, OMV AG, Wintershall Dea GmbH and Royal Dutch Shell Plc. It could have sanctioned Russian debt. It could have made it impossible to import equipment for the construction of Russian pipelines and do repairs and maintenance on them. All of these measures have been considered at various times, but struck down in order to avoid a major confrontation with the European Union and an upheaval in financial markets.

The US is rapidly isolating itself from the rest of the world by its use of sanctions and by Trump's stated goal of America First which amounts to the same thing. America is losing friends and losing its influence as a world leader something that it had taken for granted in the past. The US' use of sanctions has forced the rest of the world, allies and enemies alike, to come up with an alternative means of doing business without the use of the US dollar. This doesn't bode well for the US dollar which up to now has held sway as the world's reserve currency. Trump has set about destroying all those relationships which gave the dollar a privileged position among the world's currencies.

The US is already borrowing about $100 billion a month to fund its budget deficit. It relies on other countries to soak up most if not all of this debt, but other countries are buying less US debt each month especially in light of how the US has weaponized the US dollar by the use of sanctions. Barron's reported in May 2019:

Last week’s sale of 10-year Treasury notes was met with lackluster demand. Investors entered just $2.17 of bids for every $1 of notes sold, the lowest for any 10-year auction since 2009. Some analysts guessed that foreign buyers were retreating in the face of an escalating trade war with China, the largest single holder of Treasuries other than the Federal Reserve. The fear is that China will start dumping its holdings, driving the price of Treasuries down.

In the first four months 2019, foreigners bought 12% of the Treasuries auctioned, down from 2011’s average of 22%. Wall Street banks and hedge funds have had to step in to soak up the Treasuries that foreign governments are increasingly unwilling to buy. What happens then is that the Federal Reserve takes these Treasuries off Wall Street's hands and buries them on its balance sheet. The Fed announced in October 2019 that it would buy $60 billion worth of Treasuries a month, which amounts to Quantitative Easing (QE) although they're not calling it that. Basically, the Fed is eating $60 billion of US debt per month after Wall Street regurgitates it since it can't by law buy Treasuries directly. Wall Street is just the middle man. This, of course, is enriching Wall Street banks, but not the people of the US who would prefer QE for the people. The other angle is that the US needs to keep interest rates low because it has $23 trillion in national debt on which it has to pay interest. If interest rates rise, that means that the US will be going into debt at an increasing rate just to pay interest on its debt.

As Treasuries decline in value, US foreign creditors may not only buy less US debt, but they may also dump the US debt they now own on the market. This would lead to the fact that holding US Treasury debt may become less desirable as that debt becomes worthless, and as other currencies step up to replace the US dollar - at least in part - as the world's reserve currency. That may happen also as the US minimizes its relationship with Saudi Arabia which had agreed to price its oil only in terms of dollars in return for military support. With global warming upon us, the use of oil needs to decrease as fossil fuels in and of themselves become less desirable while other alternatives such as natural gas become preferable in terms of greenhouse gas emissions. All this presages a Federal Reserve that must step in to eat and bury more and more US debt tending to make the dollar less worthy and less effective as the world's reserve currency.

Off the Top of My Head

Italy Defies US. Makes Deal With China

by John Lawrence, March 18, 2019

Italy has become the latest EU country (there are 13 others) to sign a deal to become a participant in China's Belt and Road Initiative as Xi Jinping gets ready to visit Italy March 21. The US and the EU fear that China is taking over the world, not by military force, but by being a do gooder, increasing trade and building ports, highways, roads and bridges. The US has cautioned its allies that it will not stand idly by and let this happen.

Reuters reported:

The Belt and Road project lies at the heart of China’s foreign policy strategy and was incorporated into the ruling Communist Party constitution in 2017, reflecting Xi’s desire for his country to take a global leadership role.

The United States, locked in a trade war with Beijing, worries that Xi’s initiative is designed to bolster China’s political and military influence, and could be used to spread technologies capable of spying on Western interests.

“No need for Italian government to lend legitimacy to China’s infrastructure vanity project,” a spokesman for the White House’s national security advisers said on Saturday in a rare public rebuke for one of Washington’s staunchest allies.

Refusing to back down, Italy has nonetheless tried to reassure the United States, releasing a draft of the MOU to show it offers up no firm commitments and makes no reference to the sort of technology transfers feared by Washington.

Likewise eager to show that its pro-China policy is bearing fruit, the government has leaked reports that 50 agreements might be signed during Xi’s March 21-23 visit, including deals with oil company Eni, gas infrastructure firm Snam and shipbuilder Fincantieri.

Italy also hopes to unveil projects to develop trade through its ports of Genoa, Trieste and Palermo. Although China’s COSCO Shipping has bought control of the largest port in Greece, Italy says it offers better entry points into Europe.

Germany has already defied the US by going ahead with the NORD II pipeline connecting Germany with Russia. The US has threatened to sanction Germany over the pipeline. So now the US is threatening not only its supposed enemies and the weaker countries in the world, it's threatening its allies. Probably not a good policy or the US won't have any friends left in the world. It has already broken with the EU and the rest of the world over the climate change agreement and over Iran. What next?

Reuters reported:

U.S. sanctions against the Russian-backed Nord Stream 2 pipeline would be the wrong way to solve a dispute over energy supply, German Foreign Minister Heiko Maas said on Thursday.

U.S. President Donald Trump has accused Germany of being a “captive” of Russia due to its energy reliance and urged it to halt work on the $11 billion, Russian-led gas pipeline that is to be built in the Baltic Sea.

“Questions of European energy policy must be decided in Europe, not in the U.S.,” Maas said. “To impose unilateral sanctions against Nord Stream 2 is certainly not the way to go.”

Meanwhile US Secretary of State Mike Pompeo is threatening to deny visas to any member of the International Criminal Court who is investigating US war crimes in Afghanistan and elsewhere. "The United States will revoke or deny visas to any International Criminal Court (ICC) individuals investigating alleged war crimes by U.S. forces or allies, including in Afghanistan, Secretary of State Mike Pompeo has said." Is US policy towards the rest of the world spinning out of control as it seems like the US is making enemies and losing friends? The US is continuing to threaten allies, enemies, the United Nations and everyone and anyone who disagrees with it. Is this any way to run a foreign policy? Before you know it the US will be going it alone in a world united against it.

Off the Top of My Head

Fighting the Imperial Presidency

by John Lawrence, January 23, 2019

The President's powers are supposed to be limited. Congress is supposed to haver the bigger role in setting policy for the country at least in domestic affairs. However, Congress is dysfunctional, and the dysfunction continues even though or perhaps because of the recent elections in which Democrats took over the House. But now they can cause all sorts of problems for Donald Trump, the man who was never supposed to be President. He got elected with the help of right wing hate mongers like Rush Limbaugh, Ann Coulter, Alex Jones and Fox News. When people absorb so much hate from the media they expose themselves to, they become little hatemongers too.

The Democrats are buzzing around Trump's head like a swarm of busy mosquitoes, never giving him a moment's rest. They don't want him to succeed with his agenda despite the issue of border security. It's not about border security; it's about defeating Donald Trump and his attack on the status quo. His attack on the environment and support of the fossil fuel industry is unforgivable.The fate of the earth for our grandchildren is at stake. Getting rid of fossil fuels need to be done post haste. The US needs to lead in this regard, but under Trump it has abandoned its leadership.

As far as shaking up the foreign policy status quo, Trump has done some good things and suggested others. As a result of at least figuratively withdrawing from NATO, France and Germany have come closer together. The Guardian reports:

France and Germany have renewed their vows of postwar friendship, aiming to show that the traditional engine powering the EU project is still strong, but drawing strong criticism from nationalist and populist parties advancing across the continent.

The French president, Emmanuel Macron, and German chancellor, Angela Merkel, signed the 16-page update to the 1963 Elysée treaty on Tuesday in the German border city of Aachen, the residence of Charlemagne, the “father of Europe” who managed to unite much of the western part of the continent in the ninth century. ...

Macron said those “who forget the value of Franco-German reconciliation are making themselves accomplices of the crimes of the past. Those who ... spread lies are hurting the same people they are pretending to defend, by seeking to repeat history.”

The text promises enhanced economic and security cooperation, including the aim of a “German-French economic area with common rules” and a “common military culture” that Merkel said could “contribute to the creation of a European army”.

So France and Germany at least are taking Trump's suggestion to heart that other rich countries should provide for their own defense and not depend on the US to foot the bill. This is a good thing. The US needs to close down the thousand or so military bases it supports in almost every country of the world. The trillion dollars the US spends on defense each year could be better spent on supporting the American people.

Nancy Pelosi and Chuck Schumer are reasserting the rights of Congress to control the direction of American policy making by saying "no" to Trump over his border wall despite the fact that, in some parts of the border at least, some sort of wall is needed. But let's have a more sophisticated plan for border security than just a 30 foot concrete wall from sea to shining sea.

Off the Top of My Head

Does Trump's Challenging NATO Allies to Spend More on Defense Mean that the US Will Spend Concomitantly Less?

by John Lawrence, July 13, 2018

I would be all for Trump's jawboning our NATO allies to spend more on defense if that meant that the US would decrease its defense budget by the same amount as the total increase by our NATO allies. If it just means that the US will spend the same amount, then it's a bunch of poppycock. The EU should take over their own defense with minimal help from the US. Then there would be little reason for the US to spend such huge amounts on defense. The money could be spend on improving infrastructure here at home. If Trump wants to make America great again, he better start thinking about reducing the US defense budget which, all told, amounts to over a trillion dollars. He better start thinking about using the savings from a reduced defense budget to help the American people. In order to Make America Great Again, Step 1 would be to reduce the defense budget, which purportedly is for defending other countries around the globe, and use the money saved here at home. The defense budget should reflect that money which is necessary to defend just the US and not every other country in the world especially the EU countries which have plenty of money. We don't need to be the world's policeman.

Whatever happened to the idea that, if you make friends with your enemies, you won't have to spend so much money defending yourself against them? The US modus operandi is predicated on the fact that there will be permanent and ongoing wars. The military-industrial complex needs war and the threat of war in order to justify its existence and in order to justify all the money they're making off of war. Therefore, they have to gin up the threat. If peace broke out, large corporations like Lockheed Martin, Boeing and Northrop Grumman would lose business. Their stock price would go down. CEOs and executives wouldn't be able to justify their huge salaries. Therefore, it's in their interests to have a cottage industry thinking up reasons for even more defense expenditures. Besides it appeals to the macho nature of many men, civilian and otherwise.

As William Hartung points out, the defense budget , when you take into account all the hidden costs, is over a trillion dollars. Department of Defense: $639 billion. War Budget (outside the DoD budget): $64.6 billion. Nuclear Warheads (Department of Energy): $20 billion. Other Defense (Money that goes to defense related activities in departments other than DoD): $8 billion. Homeland Security: $50 billion. Military Aid at the State Department: $7 billion. Intelligence (16 separate agencies including CIA and NSA): $70 billion. Veterans Administration: $186 billion. Military retirement: $80 billion. Defense share of interest on national debt: $100 billion.

When you add it all up, pretty soon you're talking about real money - over a trillion dollars worth. Clearly, this situation is not sustainable. But the current mentality on Wall Street and elsewhere is make all the profits you can in the short term. When the whole edifice collapses, take your money and get out to whatever part of the world welcomes you and your money. Clearly, all those profiting from the current corporate culture do not have to stay here. Only the poor have to stay put and suffer the consequences of profligate defense spending.

The world needs realignment. Russia should be a friend, not an enemy. In these respects, Trump is right. The US and the Democratic Party should get off this kick about demonizing everyone that is Russia's friend like Iran, Syria and China. As Trump has suggested, to his credit, the US should accept Russia's annexation of Crimea. The US and the West should get over it - their horror of what Russia has supposedly done, much of it made up to support the military-industrial complex. And Germany is so horrified by Russia, but as Trump points out, they are building a major pipeline with Russia so they can get Russian natural gas. Quelle horreur!

Thanks to Trump, a peaceful world is at least thinkable. But the Democrats won't let go of their support of the status quo which supports Saudi Arabia.Their motto is that the ally of the enemy of my friend is my enemy too. Russia is the ally of Iran which is the enemy of Saudi Arabia so, therefore, Russia must be our enemy too or the whole world based on Nixon's petrodollar deal with Saudi Arabia would collapse. It will collapse anyway as the world goes more and more to recyclables and the value of oil plummets.

The Past is a Launching Pad for the Future

Dear friends,

   One of my favorites passages in Emerson’s essay, Circles is this: “every action admits of being outdone.” He goes on to say “life is an apprenticeship to Truth.” We can never reach our highest potential. There is no ceiling on what we can become. Old time metaphysicians would say “we cannot out-give God”. What all of this adds up to is Never Give Up! It is never too late. Furthermore, the best of our achievements will one day be seen as a beginning. I remember when runner Roger Bannister broke the four minute mile barrier. That is easily achieved and surpassed by most trained runners today.

     Knowing that our endings are beginnings can help us stay centered and optimistic. After all, we are in charge of what we do with the results of past choices.   So we aimed a little low? That’s fine, let’s raise our sights and do what it takes to activate a higher level of our own potential. A relationship ended badly? What would we like instead? Can we see our part in it and do what we need to change in our own self-image? We will always be somewhere on that circle, either moving into new territory or dragging the past along with us.

     Another image to consider a personal experience is the spiral. The circle rises up and continues on a higher level.  This is what it feels like to look back at your own story and see just how much you have changed or improved or evolved. It was all necessary, all part of an unfolding life, all Good when seen in that light. But you are not that person any longer, in the sense that who we are is our current awareness.   You can look back and down the spiral seeing how it is all connected, one thing leading to another.

Try this: “I am in the beginning of a new life. My past is nothing more than a launching pad for what I am now to do.”

Stay tuned in,

Carol Carnes    

www.mvcsl.org   www.californiapress.net

Off the Top of My Head

Peace is Not the Absence of War

by John Lawrence, May `19, 2018

Peace is the active construction of a better world. Sort of like what China is doing with its Belt and Road initiative. The rest of the world is just waiting for the US Empire to finally collapse. The signs of an empire in decline are everywhere. From electing a clown and fool as President to sending children to school in an unsafe environment where any day they could be killed to a sick movie, TV and video game gun culture to a solipsistic, me first economic system which produces a growing class of homeless people.

The EU is seeking to do an end run around the American dollar so as to avoid being in the position of having to obey Trump's bullying commands about sanctions. US influence is waning, it's moral and ethical leadership a thing of the past. France is plotting to finance exports to Iran, and aims to sidestep U.S. sanctions.

Reuters reported:

France will start offering euro-denominated credits to Iranian buyers of its goods later this year, a move to bolster trade while keeping it outside the reach of U.S. sanctions, the head of state-owned investment bank Bpifrance said

France and other European countries have been looking to increase trade with Iran since Paris, Washington and other world powers agreed in 2015 to lift many economic sanctions in exchange for controls on Iran’s nuclear program.

The plan is to offer dedicated, euro-denominated export guarantees to Iranian buyers of French goods and services. By structuring the financing through vehicles without any U.S. link, whether to the currency or otherwise, the aim is to avoid the extraterritorial reach of U.S. legislation.

The move could anger U.S. President Donald Trump, who has threatened to pull out of the Iran nuclear agreement reached by his predecessor Barack Obama. Washington has maintained some financial restrictions, leaving private banks - even those based outside the United States - wary of financing deals.

“We put a lot of preparation into this in 2017 and we keep on working, every single day, on the conditions of our entrance into Iran,” Bpifrance’s chief executive Nicolas Dufourcq said on Wednesday, referring to the new loans.

“This is a completely separate flow (of money),” he added. “There is no (U.S.) dollar in this scheme... no one holding a U.S. passport.”

There is a pipeline of about 1.5 billion euros in potential contracts from interested French exporters, Dufourcq told lawmakers on Wednesday.

France, which has had close business ties with Iran since before the fall of the Shah in 1979 and still operates several large factories there including Renault and PSA plants, is not alone in Europe in seeking to deepen trade ties.

A French banking source said Italy, Germany, Austria and Belgium were also working on mechanisms that would shield their companies from the risk of U.S. sanctions. It was not immediately clear how closely coordinated the efforts are.

The dollar became the world's reserve currency because of oil when the Saudis agreed to trade oil only for dollars. But the days of oil being the world's primary commodity are over. Solar and wind energy are cheaper, and their price is going down each and every day. Now oil is becoming the world's most expensive form of energy. So oil's days are numbered. Besides oil can now be traded using the Chinese yuan. So US sanctions will soon be moot, and Trump can fuss and fume all he wants. The rest of the world wants to conduct peaceful business and not be subject to US bullying.

America is destroying itself with its insane gun culture. Guns are ubiquitous on TV, in the movies, in video games. Criminal activity becomes America's form of enjoyment. The thrill of killing becomes America's entertainment whether vicariously or for some in actuality. School shootings are becoming an everyday occurrence. Americans are so bored with life that violence is the only way to perk themselves up. That and drugs. Drugs have become a way of life. They are prescribed in TV commercials, and there is a drug just right for you from cradle to grave.

There is no peace as long as the US surrounds the world with 1000 military bases. The American economy is predicated on war. Major US corporations would go bankrupt unless they could produce Tomahawk missiles and drones. War has been automated to resemble a video game. It's conducted remotely. Kids brought up on violent video games can go right into the military having acquired the necessary set of skills.

While the US sinks deeper into a morass of violence, war and gun culture, the rest of the world is disentangling itself and disengaging from the bankrupt US leadership and the US dollar.

Off the Top of My Head

US May Bully World to Enforce Sanctions on Iran

by John Lawrence, May 14, 2018

The other signatories to the Iran nuclear deal don't want to pull out of it. Only Trump wants to reneg. He has pulled the US out, but the other countries want to stay in and want Iran to continue complying with the terms of the deal. In order for the US to reapply sanctions to Iran which are financial and economic prohibitions that will make Iran's economy even worse than it now is, the other nations such as France, Germany, Britain, Russia and China have to cooperate with the US in not doing business with Iran, but, since they want to do business with Iran and now the US is an outlier, they may continue doing business with Iran, defying the US. Then the US would be put in the position of applying sanctions to them including US allies Britain, France and Germany.

National Security Adviser, John Bolton, has threatened US allies with sanctions if they don't go along with the US. In effect the US has become the world's bully even toward Europe, our erstwhile ally. "I think the Europeans will see that it's in their interest ultimately to go along with us," Bolton said. It's in nobody's interests to abrogate the Iran deal which will not only cause hardship in Iran but yo the US allies which trade with Iran. Europe, for example, depends on Russian gas. Europeans have billions of dollars in business with Iran at stake. If they are forced by the US to stop doing business with Iran, it's not only Iran that will suffer.

The Guardian reported:

US sanctions on Iran reimposed following Trump’s withdrawal not only block American firms from doing business in the country, but also bar foreign firms that do business there from accessing the entire US banking and financial system.

Mike Pompeo, Trump’s secretary of state, said on Sunday wealth created in Iran under the terms of the nuclear deal “drove Iranian malign activity” in the region. He declined to rule out sanctions against European firms.

“The sanctions regime that is in place now is very clear on what the requirements are,” Pompeo said on Fox News Sunday.

Trump’s decision to scrap the nuclear deal was sharply criticized by European leaders, who have pledged to uphold their side of the agreement.

Alarm has been particularly high in France, whose energy giant Total last year signed a $5bn deal to extract Iranian natural gas. Airbus, the French-based plane manufacturer, has already begun delivering jets to Iran Air under a multibillion-dollar contract.

Volkswagen, the German automaker, has resumed exporting cars to Iran. Richard Grenell, the new US ambassador to Berlin, warned this week in a tweet: “German companies doing business in Iran should wind down operations immediately.”

Some European leaders have called for measures to nullify the US sanctions. Bruno Le Maire, the French finance minister, said last week: “We have to work among ourselves in Europe to defend our European economic sovereignty.”

Iran has said it will stay in the deal if the other five countries that signed the deal remain in it. That would expose those five countries to US sanctions. This amounts to a game of chicken and we'll see who backs down first - the US, US allies or Russia and China? Even if the European allies eventually buckle and give in to Trump, Russia and China might defy him. Trump is making the US the bully of the world. Will the rest of the world stand up to the US bully? As Trump says, we'll see.

Germany, California to Tackle Climate Change Together

ENVIRONMENT | Sat Jun 10, 2017 | 6:26am EDT from Reuters

 

 

FILE PHOTO - California Governor Jerry Brown attends International Forum on Electric Vehicle Pilot Cities and Industrial Development in Beijing, China June 6, 2017. REUTERS/Thomas Peter

Germany is teaming up with California to cooperate on tackling climate change following the U.S. government's decision to withdraw from the 2015 Paris agreement.

Europe's largest economy and the biggest U.S. state in economic terms will back the work of the "Under 2 Coalition," which includes cities, regional governments and states, German Environment Minister Barbara Hendricks said on Saturday.

"We cannot achieve our climate goals without the engagement of local and regional communities. That has become even clearer after the U.S. withdrawal from the Paris climate agreement," Hendricks said after agreeing on the joint approach with California Governor Edmund Brown in San Francisco.

"California and Germany unite the world leaders in the fight against climate change, the existential threat of our time," Brown said in a statement released by the German ministry.

U.S. President Donald Trump's decision to pull the United States from the landmark 2015 Paris agreement drew anger and condemnation from world leaders and industry.

German Chancellor Angela Merkel last week pledged her country's continued commitment to the agreement, calling the U.S. decision "very regrettable."

Hendricks said the German government would ensure that cities, communities and regions played an important role in the U.N. climate change conference in Bonn in November.

(Reporting by Andrea Shalal; editing by Alexander Smith)

Germany Sets Record for Solar Power Use: Shows Uselessness of Petro-Dollar

by Christina Sarich

from Nation of Change, July 9, 2013

According to statistics from the US Energy Administration, or EIA, Americans use more than 4,000 billion kilowatt hours in electric energy every year. Only 12% of this energy is created using renewable energy – from geothermal plants, water (hydroelectric plants), organic waste and the sun. Meanwhile, Germany is now creating a record 23.4 gigawatts daily, and all with solar power.

This incredible solar power success is being attributed to more than 1.3 million solar systems spread across the country. More than 8.5 million people either live or work in buildings that use the sun to power their electricity needs entirely or in part.

Germany has held the solar-power creation record for years now, with the Czech Republic and Bulgaria just trailing behind them. Germany was able to beat the new solar-power record as of April of this year due to the installation of more than 33.5 GW of photovoltaics (PV). It proves an industrialized nation can produce massive amounts of clean, non-petroleum based energy through strong government policies and incentives for stimulating the use of solar panels in private homes and businesses.

Even if you haven’t bought into the global warming advisories, the petroleum based money that we normally run the world on – utilizing diesel fuels, gasoline, etc. needs to stop. In 2000, Iraq converted all its oil transactions under the Oil for Food program to euros. When the U.S. invaded Iraq in 2003, it returned oil sales from the euro to the USD. Over $1 trillion dollars was spent on that singular war. Oil money is the reason behind many wars, and countless ecological and environmental travesties.

Oil is toxic to almost every form of life. Crude oil is full of carcinogens, which cause cancer and other diseases. Crude causes birth defects, leukemia (due to the presence of Benzene, a volatile organic compound) and lowered white blood cell count, which is indicative of a compromised immune system. 

The combustion of crude oil or petroleum contaminates the air with cancer-causing particles and the high temperatures required to burn crude oil also creates acid rain, or nitrous oxides which also harm human and animal health. Many of our coral reefs have been damaged by the acid rain caused by nitrous oxides, along with sulfur dioxide from the sulfur in the oil, combining with water in the atmosphere to create acid rain.

Numerous oil spills including the Kuwaiti Oil Fires, the Lakeview Gusher in Kern County, California, Gulf War Spill, and Deepwater Horizon(also known as the BP oil disaster) have damaged countless forms of aquatic life and ruined pristine beaches. Three of these spills are considered to be among the worst environmental tragedies of our time.

The question is – why do oil companies continue to have a hold on our energy supply? Sickeningly, oil companies even thrive during economic down turns. Exxon, Chevron and ConocPhillips are among the richest companies on the planet, while they continue to kill human beings, turn an immaculate planet into a sludge pile, and poison ocean life. Further, oil and gas drillers who pollute groundwater, spill toxic chemicals or break other rules have little to fear from the inspectors and agencies regulating the continued surge in American petroleum production. Only the smallest percentage of violations result in any meaningful fines for oil companies.

Perhaps a class action law suit will drain the pockets of oil companies. There is plenty of evidence that alternative energies could have been well-implemented by this time, as Germany so perfectly demonstrates.

Update on the Eurozone

by Frank Thomas

 

The European Central Bank (ECB), European Commission, and IMF some time ago pledged €240 billion in rescue loans of which Greece has already received €150 billion. Without these bailout funds that have been keeping the country afloat since May of 2010, Greece would be forced out of the eurozone. Many now see this possibility as having a disastrous domino effect on other financially troubled eurozone nations.                                    

EU Finance Ministers and the IMF have just agreed to:  release the next €44 billion ($57 billion) installment of loans to Greece, lower the interest rate, and return €11 billion in profits from ECB purchases of Greek government bonds. The Ministers have also agreed to help Greece buy back its own bonds from private investors. These actions are more than enough to enable the government to pay wages and pensions in December. In return, Greece is bound to more rounds of austerity measures and to submit its economy to tight scrutiny. 

The current package aims to cut public debt now at 175% of GDP to 124% by 2020. Greece is seeking a two-year extension of this deadline. However, Germany and the Netherlands are against this as well as further writeoff of Greek debt. It is felt such actions will only weaken the country's resolve to go foreward on painful structural reforms. The IMF believes more fresh capital and even debt writeoff relief will be necessary to get proper control of Greece's debt situation over the next decade.                                                   

Both Chancellor Angela Merkel and the Dutch Prime Minister, Mark Rutte, are leary of more debt relief. In fact, Premier Rutte has called for a change in EU laws to allow a country to leave the euro. But Chancellor Merkel has been trying to quell demands from her own coalition for Greece to leave the eurozone. She feels the consequences of this step are far more ominous than giving more financial loan assistance to Greece.

So solutions to the debt crisis are a step-by-step process made more unnerving by heavily-indebted situations in Spain, Italy and Portugal. But I do have confidence the EU Ministers -- at a slow but steady, reflective approach in concert with the IMF -- will do what is structurally needed to stabilize the debt crisis, boost confidence, and positive growth. This may include  some easing of austerity measures that are obviously worsening a multi-year contraction of the Greek and Spanish economies. A few months ago, most European northern nations, Germany included, were indicating a willingness to sacrifice Greece. That has changed as Germany now appears determined to deter a broader eurozone crisis that could be precipitated by a Greek exit.

In contrast, the British would likely decide to leave the eurozone if a referendum were held today. More and more British people feel that the excessive austerity to save the euro and debt-laden nations is creating destructive, destabilizing fragmentation, economic retrogression, and toxic internal politics. Many British see a US of Europe with one currency as simply unrealistic ... unlike the United States which is a country of immigrants providing a far more general cohesiveness. Vastly different EU country cultures and traditions make a cohesive, harmonized EU federal state impossible. So goes much UK public opinion of late.

Interesting European times of critical change on so many fronts! But the eurozone has passed another test of its credibility to take decisions on dire financial issues ... without the US option of printing money through "quantitative easing." 

How Germany Is Getting to 100 Percent Renewable Energy

Published on Thursday, November 15, 2012 by TruthDig.com

by Thomas Hedges

There is no debate on climate change in Germany. The temperature for the past 10 months has been three degrees above average and we’re again on course for the warmest year on record. There’s no dispute among Germans as to whether this change is man-made, or that we contribute to it and need to stop accelerating the process.Solar panels cover the rooftops of a German farming village. (InsideClimate News/Osha Gray Davidson)

Since 2000, Germany has converted 25 percent of its power grid to renewable energy sources such as solar, wind and biomass. The architects of the clean energy movement Energiewende, which translates to “energy transformation,” estimate that from 80 percent to 100 percent of Germany’s electricity will come from renewable sources by 2050.

Germans are baffled that the United States has not taken the same path. Not only is the U.S. the wealthiest nation in the world, but it’s also credited with jump-starting Germany’s green movement 40 years ago.

“This is a very American idea,” Arne Jungjohann, a director at the Heinrich Boll Stiftung Foundation (HBSF), said at a press conference Tuesday morning in Washington, D.C. “We got this from Jimmy Carter.”

Germany adopted and continued Carter’s push for energy conservation while the U.S. abandoned further efforts. The death of an American Energiewende solidified when President Ronald Reagan ripped down the solar panels atop the White House that Carter had installed.

Since then, Germany has created strong incentives for the public to invest in renewable energy. It pays people to generate electricity from solar panels on their houses. The effort to turn more consumers into producers is accelerated through feed-in tariffs, which are 20-year contracts that ensure a fixed price the government will pay. Germany lowers the price every year, so there’s good reason to sign one as soon as possible, before compensation falls further.

The money the government uses to pay producers comes from a monthly surcharge on utility bills that everyone pays, similar to a rebate. Ratepayers pay an additional cost for the renewable energy fund and then get that money back from the government, at a profit, if they are producing their own energy.

In the end, ratepayers control the program, not the government. This adds consistency, Davidson says. If the government itself paid, it would be easy for a new finance minister to cut the program upon taking office. Funding is not at the whim of politicians as it is in the U.S.

“Everyone has skin in the game,” says writer Osha Gray Davidson. “The movement is decentralized and democratized, and that’s why it works. Anybody in Germany can be a utility.”

The press conference the foundation organized with InsideClimate News comes two weeks after one of the biggest storms in U.S. history and sits in the shadow of the Keystone XL Pipeline, which would unlock the world’s second-largest oil reserve in Canada. The event also comes one day after a report that says that the U.S. is on track to become the leading oil and gas producer by 2020, which suggests that the U.S. has the capability to match Germany’s green movement, but is instead using its resources to deepen its dependency on fossil fuels.

Many community organizers have given up on government and are moving to spark a green movement in the U.S. through energy cooperatives.

Anya Schoolman is a D.C. organizer who has started many co-ops in the district although she began with no experience. She says that converting to renewable energy one person at a time would not work in the U.S. because of legal complexities and tax laws that discourage people from investing in clean energy.

Grid managers in the U.S., she explains, often require households to turn off wind turbines at night, a practice called “curtailment.”

“It’s a favor to the utility companies,” she says, which don’t hold as much power in Germany as they do in the United States.

Individuals and cooperatives own 65 percent of Germany’s renewable energy capacity. In the U.S. they own 2 percent. The rest is privately controlled.

The largest difference, panelists said, between Germany and the U.S. is how reactive the government is to its citizens. Democracy in Germany has meant keeping and strengthening regulatory agencies while forming policies that put public ownership ahead of private ownership.

“In the end,” says Davidson, who spent a month in Germany studying the Energiewende, “it isn’t about making money. It’s about quality of life.”

This article was made possible by the Center for Study of Responsive Law.

© 2012 Thomas Hedges

Thomas Hedges works for the Center for Responsive Law in Washington, DC

Greece as Victim

Published on Monday, June 18, 2012 by The New York Times

by Paul Krugman

Ever since Greece hit the skids, we’ve heard a lot about what’s wrong with everything Greek. Some of the accusations are true, some are false — but all of them are beside the point. Yes, there are big failings in Greece’s economy, its politics and no doubt its society. But those failings aren’t what caused the crisis that is tearing Greece apart, and threatens to spread across Europe.

No, the origins of this disaster lie farther north, in Brussels, Frankfurt and Berlin, where officials created a deeply — perhaps fatally — flawed monetary system, then compounded the problems of that system by substituting moralizing for analysis. And the solution to the crisis, if there is one, will have to come from the same places.

So, about those Greek failings: Greece does indeed have a lot of corruption and a lot of tax evasion, and the Greek government has had a habit of living beyond its means. Beyond that, Greek labor productivity is low by European standards — about 25 percent below the European Union average. It’s worth noting, however, that labor productivity in, say, Mississippi is similarly low by American standards — and by about the same margin.

On the other hand, many things you hear about Greece just aren’t true. The Greeks aren’t lazy — on the contrary, they work longer hours than almost anyone else in Europe, and much longer hours than the Germans in particular. Nor does Greece have a runaway welfare state, as conservatives like to claim; social expenditure as a percentage of G.D.P., the standard measure of the size of the welfare state, is substantially lower in Greece than in, say, Sweden or Germany, countries that have so far weathered the European crisis pretty well.

So how did Greece get into so much trouble? Blame the euro.

Fifteen years ago Greece was no paradise, but it wasn’t in crisis either. Unemployment was high but not catastrophic, and the nation more or less paid its way on world markets, earning enough from exports, tourism, shipping and other sources to more or less pay for its imports.

Then Greece joined the euro, and a terrible thing happened: people started believing that it was a safe place to invest. Foreign money poured into Greece, some but not all of it financing government deficits; the economy boomed; inflation rose; and Greece became increasingly uncompetitive. To be sure, the Greeks squandered much if not most of the money that came flooding in, but then so did everyone else who got caught up in the euro bubble.

And then the bubble burst, at which point the fundamental flaws in the whole euro system became all too apparent.

Ask yourself, why does the dollar area — also known as the United States of America — more or less work, without the kind of severe regional crises now afflicting Europe? The answer is that we have a strong central government, and the activities of this government in effect provide automatic bailouts to states that get in trouble.

Consider, for example, what would be happening to Florida right now, in the aftermath of its huge housing bubble, if the state had to come up with the money for Social Security and Medicare out of its own suddenly reduced revenues. Luckily for Florida, Washington rather than Tallahassee is picking up the tab, which means that Florida is in effect receiving a bailout on a scale no European nation could dream of.

Or consider an older example, the savings and loan crisis of the 1980s, which was largely a Texas affair. Taxpayers ended up paying a huge sum to clean up the mess — but the vast majority of those taxpayers were in states other than Texas. Again, the state received an automatic bailout on a scale inconceivable in modern Europe.

So Greece, although not without sin, is mainly in trouble thanks to the arrogance of European officials, mostly from richer countries, who convinced themselves that they could make a single currency work without a single government. And these same officials have made the situation even worse by insisting, in the teeth of the evidence, that all the currency’s troubles were caused by irresponsible behavior on the part of those Southern Europeans, and that everything would work out if only people were willing to suffer some more.

Which brings us to Sunday’s Greek election, which ended up settling nothing. The governing coalition may have managed to stay in power, although even that’s not clear (the junior partner in the coalition is threatening to defect). But the Greeks can’t solve this crisis anyway.

The only way the euro might — might — be saved is if the Germans and the European Central Bank realize that they’re the ones who need to change their behavior, spending more and, yes, accepting higher inflation. If not — well, Greece will basically go down in history as the victim of other people’s hubris.

© 2012 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, The Return of Depression Economics, and his most recent, End This Depression Now!.

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Those Revolting Europeans

Op-Ed Columnist

By PAUL KRUGMAN

Published: May 6, 2012 in the New York Times

The French are revolting. The Greeks, too. And it’s about time.

Both countries held elections Sunday that were in effect referendums on the current European economic strategy, and in both countries voters turned two thumbs down. It’s far from clear how soon the votes will lead to changes in actual policy, but time is clearly running out for the strategy of recovery through austerity — and that’s a good thing.

Needless to say, that’s not what you heard from the usual suspects in the run-up to the elections. It was actually kind of funny to see the apostles of orthodoxy trying to portray the cautious, mild-mannered François Hollande as a figure of menace. He is “rather dangerous,” declared The Economist, which observed that he “genuinely believes in the need to create a fairer society.” Quelle horreur!

What is true is that Mr. Hollande’s victory means the end of “Merkozy,” the Franco-German axis that has enforced the austerity regime of the past two years. This would be a “dangerous” development if that strategy were working, or even had a reasonable chance of working. But it isn’t and doesn’t; it’s time to move on. Europe’s voters, it turns out, are wiser than the Continent’s best and brightest.

What’s wrong with the prescription of spending cuts as the remedy for Europe’s ills? One answer is that the confidence fairy doesn’t exist — that is, claims that slashing government spending would somehow encourage consumers and businesses to spend more have been overwhelmingly refuted by the experience of the past two years. So spending cuts in a depressed economy just make the depression deeper.

Moreover, there seems to be little if any gain in return for the pain. Consider the case of Ireland, which has been a good soldier in this crisis, imposing ever-harsher austerity in an attempt to win back the favor of the bond markets. According to the prevailing orthodoxy, this should work. In fact, the will to believe is so strong that members of Europe’s policy elite keep proclaiming that Irish austerity has indeed worked, that the Irish economy has begun to recover.

But it hasn’t. And although you’d never know it from much of the press coverage, Irish borrowing costs remain much higher than those of Spain or Italy, let alone Germany. So what are the alternatives?

One answer — an answer that makes more sense than almost anyone in Europe is willing to admit — would be to break up the euro, Europe’s common currency. Europe wouldn’t be in this fix if Greece still had its drachma, Spain its peseta, Ireland its punt, and so on, because Greece and Spain would have what they now lack: a quick way to restore cost-competitiveness and boost exports, namely devaluation.

As a counterpoint to Ireland’s sad story, consider the case of Iceland, which was ground zero for the financial crisis but was able to respond by devaluing its currency, the krona (and also had the courage to let its banks fail and default on their debts). Sure enough, Iceland is experiencing the recovery Ireland was supposed to have, but hasn’t.

Yet breaking up the euro would be highly disruptive, and would also represent a huge defeat for the “European project,” the long-run effort to promote peace and democracy through closer integration. Is there another way? Yes, there is — and the Germans have shown how that way can work. Unfortunately, they don’t understand the lessons of their own experience.

Talk to German opinion leaders about the euro crisis, and they like to point out that their own economy was in the doldrums in the early years of the last decade but managed to recover. What they don’t like to acknowledge is that this recovery was driven by the emergence of a huge German trade surplus vis-à-vis other European countries — in particular, vis-à-vis the nations now in crisis — which were booming, and experiencing above-normal inflation, thanks to low interest rates. Europe’s crisis countries might be able to emulate Germany’s success if they faced a comparably favorable environment — that is, if this time it was the rest of Europe, especially Germany, that was experiencing a bit of an inflationary boom.

So Germany’s experience isn’t, as the Germans imagine, an argument for unilateral austerity in Southern Europe; it’s an argument for much more expansionary policies elsewhere, and in particular for the European Central Bank to drop its obsession with inflation and focus on growth.

The Germans, needless to say, don’t like this conclusion, nor does the leadership of the central bank. They will cling to their fantasies of prosperity through pain, and will insist that continuing with their failed strategy is the only responsible thing to do. But it seems that they will no longer have unquestioning support from the Élysée Palace. And that, believe it or not, means that both the euro and the European project now have a better chance of surviving than they did a few days ago.

Call for Growth to Counter German Push for Austerity

By NICHOLAS KULISH

Published: April 23, 2012 by the New York Times

BERLIN — With political allies weakened or ousted, Chancellor Angela Merkel’s seat at the head of the European table has become much less comfortable, as a reckoning with Germany’s insistence on lock-step austerity appears to have begun.

“The formula is not working, and everyone is now talking about whether austerity is the only solution,” said Jordi Vaquer i Fanés, a political scientist and director of the Barcelona Center for International Affairs in Spain. “Does this mean that Merkel has lost completely? No. But it does mean that the very nature of the debate about the euro-zone crisis is changing.”

A German-inspired austerity regimen agreed to just last month as the long-term solution to Europe’s sovereign debt crisis has come under increasing strain from the growing pressures of slowing economies, gyrating financial markets and a series of electoral setbacks.

Spain officially slipped back into recession for the second time in three years on Monday, after following the German remedy of deep retrenchment in public outlays, joining Italy, Belgium, the Netherlands and the Czech Republic. In the Netherlands, Prime Minister Mark Rutte handed his resignation to Queen Beatrix on Monday after his government failed to pass new austerity measures over the weekend.

The political upheaval drove stock markets on the Continent sharply lower, with Germany’s DAX index finishing the day down 3.4 percent. The sell-off in Europe dragged American indexes down around 1 percent. A survey of European purchasing managers showed an unexpected plunge in confidence this month.

The Netherlands, a staunch supporter of the German position, became the latest European country forced into early elections by the European crisis, just one day after the first round of presidential voting in France raised the possibility that the incumbent, Nicolas Sarkozy, would be unseated by his Socialist challenger, François Hollande, in a runoff election.

From trading floors to polling stations to the streets of cities across Europe, the message appears increasingly to be that countries cannot cut their way to fiscal health. They need growth, too. In recent months, powerful voices have joined the chorus, including those of the managing director of the International Monetary Fund, Christine Lagarde, and Italy’s prime minister, Mario Monti. Treasury Secretary Timothy F. Geithner has called repeatedly for Europe to defer budget cutting in favor of some form of stimulus spending.

Pressured by the presidential campaign, even Mr. Sarkozy, once Ms. Merkel’s most prominent ally, has begun to talk of the need for growth.

Despite the rising criticism, Berlin did not seem ready to concede defeat for its austerity plan.

“We certainly still have many difficult reforms, measures and times ahead of us,” said Martin Kotthaus, spokesman for the Finance Ministry. “But the path appears to be correct. At least that is what the development of the last weeks and months proves, and also — as far as I can tell — the surveys of the populations of the European Union.”

It was only in March that leaders from 25 of the 27 European Union countries gathered to sign the fiscal compact championed by Ms. Merkel. Her plan, combined with $1.3 trillion in cheap loans injected into the banking system by the European Central Bank in December and March, raised hopes that the worst of the crisis had passed.

But those hopes have been dashed as growth has faltered and interest rates on the debt of struggling countries like Spain and Italy have shot up to dangerous levels again.

“If significant numbers of the coalition wobble or fall, then Berlin has a problem,” said Constanze Stelzenmüller, a senior fellow in Berlin with the German Marshall Fund of the United States.

However, while there is a growing consensus on the need for new growth policies, it is far from obvious what those policies should be, particularly for the heavily indebted countries already having trouble selling government debt.

“You have this dilemma because you have to borrow more money to finance growth measures, but that is also likely to stir up the financial markets,” said Tanja Börzel, a professor of European Union politics at the Free University in Berlin. “Then the money you need will be more expensive to borrow.”

The European Central Bank cannot be counted on to deliver major monetary stimulus in the manner of the United States Federal Reserve because the bank is required by treaty to combat inflation above all else. One option is to allow debtor countries more time to bring their deficits under control, but that is seen more as damage control than as a way to foster growth.

Another possibility, which Germany will be under renewed pressure to accept, is some form of common European debt, generally referred to as Eurobonds, which any member of the currency zone could tap. It is a step that Ms. Merkel’s conservative bloc has opposed forcefully, but with more than 17 million people in the euro zone out of work and the unemployment rate at 10.8 percent, the need for urgent steps is growing.

Marie Diron, an economic adviser to the consulting firm Ernst & Young, said Germany could slow down its own drive to balance its budget and do more to encourage domestic consumption. Other European states would benefit if Germany bought more of their goods.

“Austerity has to fit into a wider policy context,” Ms. Diron said.

Taking advantage of growing voter outrage, fringe parties like the Greek ultranationalist group Golden Dawn and France’s far-right National Front, which won nearly one in five votes Sunday, are gaining strength, evoking comparisons to the Weimar era, which ushered the Nazi Party into power. That has only added urgency to the push for programs that would create jobs.

“You see an incredible public uproar against the strict austerity measures,” Ms. Börzel said. “It’s mostly the populist parties that now become ever more critical of the austerity policies.”

Even in Germany, where unemployment is low and the crisis seems a faraway phenomenon, the political landscape has grown unpredictable. The computer hackers of the Pirate Party, which supports Internet freedom, have emerged from relative obscurity to challenge the Green Party as the third most powerful faction in opinion polls.

Ms. Merkel’s coalition partners, the pro-business Free Democrats, have been the most prominent victims of the political instability. In trying to stave off its total collapse, the party has become a less and less reliable partner, especially when European rescue packages are up for votes in the German Parliament.

“In a nutshell, you need growth and employment or else debt reduction doesn’t work. We’re seeing that right now in Spain,” Sigmar Gabriel, the head of Germany’s opposition Social Democrats, said on German public radio, adding that Ms. Merkel’s policies had failed in southern Europe. “The success of Hollande was in sending a signal beyond France that the politics of Merkel and Sarkozy are not without alternatives.”

Over the years of the euro crisis, Ms. Merkel has moved on the problems at a deliberate pace, a tactic of brinkmanship meant to achieve debt reduction across the euro zone while limiting German exposure to other countries’ liabilities and, therefore, minimizing political damage at home. So far it has largely worked in Germany, and her support in Europe is broader than it appears, with smaller countries like the Baltics, Finland and Austria — and even the larger and increasing supportive Poland — content to stand quietly behind her.

Ms. Merkel has proved herself a masterful tactician time and again. She was adept at working with the Social Democrats as her partner in the previous German government, and Mr. Hollande might be even more amenable than Mr. Sarkozy to ceding French sovereignty in economic policy in exchange for help on growth, Mr. Vaquer from the Barcelona Center for International Affairs said.

“She will have to backtrack on austerity anyway,” Mr. Vaquer said. “Germany can now extract a much more unified Europe in terms of economic governance than it ever could have before.”

 

The Public Option in Banking: Another Look at the German Model

Friday 14 October 2011

by: Ellen Brown, Truthout | News Analysis

Norddeutsche Landesbank, a public corporation by the federal states of Lower Saxony and Saxony-Anhalt. (Photo: dierk schaefer)

Publicly owned banks were instrumental in funding Germany's "economic miracle" after the devastation of World War II. Although the German public banks have been targeted in the last decade for takedown by their private competitors, the model remains a viable alternative to the private profiteering being protested on Wall Street today.

One of the demands voiced by protesters in the Occupy Wall Street movement is for a "public option" in banking. What that means was explained by Dr. Michael Hudson, professor of economics at the University of Missouri in Kansas City, in an interview by Paul Jay of the Real News Network on October 6:

[T]he demand isn't simply to make a public bank, but is to treat the banks generally as a public utility, just as you treat electric companies as a public utility.... Just as there was pressure for a public option in health care, there should be a public option in banking. There should be a government bank that offers credit card rates without punitive 30% interest rates, without penalties, without raising the rate if you don't pay your electric bill. This is how America got strong in the 19th and early 20th century, by essentially having public infrastructure, just like you'd have roads and bridges.... The idea of public infrastructure was to lower the cost of living and to lower the cost of doing business.

We don't hear much about a public banking option in the United States, but a number of countries already have a resilient public banking sector. A May 2010 article in The Economist noted that the strong and stable publicly owned banks of India, China and Brazil helped those countries weather the banking crisis afflicting most of the world in the last few years.In the US, North Dakota is the only state to own its own bank. It is also the only state that has sported a budget surplus every year since the 2008 credit crisis. It has the lowest unemployment rate in the country and the lowest default rate on loans. It also has oil, but so do other states that are not doing so well. Still, the media tend to attribute North Dakota's success to its oil fields.However, there are other Western public banking models that are successful without oil booms. Europe has a strong public banking sector; and leading it is Germany, with 11 regional public banks and thousands of municipally owned savings banks. Germany emerged from World War II with a collapsed economy that had degenerated into barter. Today, it is the largest and most robust economy in the eurozone. Manufacturing in Germany contributes 25 percent of gross domestic product, more than twice that in the UK. Despite the recession, Germany's unemployment rate, at 6.8 percent, is the lowest in 20 years. Underlying the economy's strength is its Mittelstand - small to medium sized enterprises - supported by a strong regional banking system that is willing to lend to fund research and development.In 1999, public banks dominated German domestic lending, with private banks accounting for less than 20 percent of the market, compared to more than 40 percent in France, Spain, the Nordic countries and Benelux. Since then, Germany's public banks have come under fire; but local observers say that is due to rivalry from private competitors rather than a sign of real weakness in the sector.As precedent for a public option in banking, then, the German model deserves a closer look.From the Ashes of Defeat to World Leader in ManufacturingGermany emerged phoenix-like from its disastrous defeat in two world wars to become Europe's economic powerhouse in the second half of the 20th century. In 1947, German industrial output was only one-third its 1938 level, and a large percentage of its working-age men were dead. Less than ten years after the war, people were already talking about the German economic miracle; and 20 years later, its economy was the envy of most of the world. By 2003, a country half the size of Texas had become the world's leading exporter, producing high quality automobiles, machinery, electrical equipment and chemicals. Only in 2009 was Germany surpassed in exports by China, which has a population of over 1.3 billion to Germany's 82 million. In 2010, while much of the world was still reeling from the 2008 financial collapse, Germany reported 3.6 percent economic growth.The country's economic miracle has been attributed to a variety of factors, including debt forgiveness by the Allies, currency reform, the elimination of price controls and the reduction of tax rates. But while those factors freed the economy from its shackles, they don't explain its phenomenal rise from a war-torn battlefield to world leader in manufacturing and trade.One overlooked key to the country's economic dynamism is its strong public banking system, which focuses on serving the public interest rather than on maximizing private profits. After the Second World War, it was the publicly owned Landesbanks that helped family-run provincial companies get a foothold in world markets. As Peter Dorman describes the Landesbanks in a July 2011 blog:

They are publicly owned entities that rest on top of a pyramid of thousands of municipally owned savings banks. If you add in the specialized publicly owned real estate lenders, about half the total assets of the German banking system are in the public sector. (Another substantial chunk is in cooperative savings banks.) They are key tools of German industrial policy, specializing in loans to the Mittelstand, the small-to-medium size businesses that are at the core of that country's export engine. Because of the landesbanken, small firms in Germany have as much access to capital as large firms; there are no economies of scale in finance. This also means that workers in the small business sector earn the same wages as those in big corporations, have the same skills and training, and are just as productive. [Emphasis added.]

The Landesbanks function as "universal banks" operating in all sectors of the financial services market. All are controlled by state governments and operate as central administrators for the municipally owned savings banks, or Sparkassen, in their area.The Sparkassen were instituted in Germany in the late 18th century as nonprofit organizations to aid the poor. The intent was to help people with low incomes save small sums of money, and to support business start-ups. The first savings bank was set up by academics and philanthropically minded merchants in Hamburg in 1778, and the first savings bank with a local government guarantor was founded in Goettingen in 1801. The municipal savings banks were so effective and popular that they spread rapidly, increasing from 630 in 1850 to 2,834 in 1903. Today the savings banks operate a network of over 15,600 branches and offices and employ over 250,000 people, and they have a strong record of investing wisely in local businesses.Targeted for PrivatizationThe reputation and standing of the German public banks were challenged, however, when they emerged as competitors in international markets. Peter Dorman writes:

[T]he EU doesn't like the landesbanken. They denounce the explicit and implicit public subsidies that state ownership entails, saying they violate the rules of competition policy. For over a decade they have fought to have the system privatized. In the end, the dispute is simply ideological: if you think that public ownership should only be an exception, narrowly crafted to address specific market failures, you want to see the landesbanken put on the auction block. If you think an economy should be organized to meet socially defined needs, you would want a large part of capital allocation to be responsive to public input, and you'd fight to keep the landesbanken the way they are. (There is a movement afoot in the US to promote public banking.)

The vicissitudes of German banking in the last decade were traced in a July 2011 article by Ralph Niemeyer, editor in chief of EUchronicle, titled "Commission's Dirty Task: WESTLB Devoured by Private Banks." He notes that after 1999, the major private banks left the path of sustainable traditional banking to gamble in collateralized debt obligations, credit default swaps and derivatives. Private German banks accumulated an estimated €600 billion in toxic assets through their investment banking branches, for which German taxpayers wound up providing guarantees. Deutsche Bank AG was feeding its record profits almost exclusively through its investment banking division, which made a fortune trading credit default swaps on Greek state obligations. When this investment turned sour, the German government had to bail out the financial institution into which Deutsche Bank AG dumped these toxic assets.While the large private banks were betting on the casinos of the financial markets, lending to businesses and the "real" economy was left to the public Sparkassen, which were more efficient in serving average citizens and local business because they were not stock companies that had to satisfy shareholders' hunger for ever-larger dividends. Today, the market share of private banks in Germany is only 28.4 percent, and Deutsche Bank AG dominates the segment. But with its 7 percent market share, it is still well behind the public banks owned by municipalities and communities.Neimeyer says the private banks wanted to break up the market dominance of the public banks to get a bigger piece of the pie themselves, and they used the European Commission to do it. The Commission had been lobbied since the early 1990s by German private banks and by Deutsche Bank AG in particular to attack the German government over the country's "inflexible" public banking sector.The International Monetary Fund, too, had long demanded that any competing public monopolies in the German banking market be broken up, citing their "inefficiencies." When the German public Sparkassen and Landesbanken were reluctant to turn to investment banking with its skyrocketing profits, they were branded as bureaucratic and "unsexy." When they were pressured to increase their returns for their government owners, the German Landesbanken did get sucked to some extent into derivatives and collateralized debt obligations  (fraudulently rated triple A). But while they "lost billions in the Goldman Sachs, Deutsche Bank and Lehman Brothers Ponzi scheme," Niemeyer says the extent to which they became involved in highly speculative transactions was "laughable in comparison with the damage done by private banks, for whom taxpayers are now providing guarantees."It was the public banks and Sparkassen that supplied the real economy with liquidity, and that stepped in for the private banks when they withdrew to bet in the financial casino; but it was on the failings of the Landesbanken and Sparkassen that the media focused their attention. The real motive, says Niemeyer, was that the large private banks wanted the public banks' market share themselves:

In order to win back this important market share, it has become a prerogative to destroy public banking in Germany completely. This unpopular move could never come from the German government itself, so that's why the [European] Commission is being employed for this dirty job.

The Price of SuccessThe German public banks were brought down by knocking their public legs out from under them. Previously, they had enjoyed state guarantees that allowed them to acquire and lend funds at substantially better rates than private banks were able to do. But in 2001, the European Commission ruled to strip the Landesbanks of their explicit state credit guarantees, forcing them to compete on the same terms as private banks. And today, the European Banking Authority is refusing to count the banks' implicit state guarantees in their "stress tests" for banking solvency.The upshot is that the German public banks are being stripped of what has made them stable, secure and able to lend at low interest rates: they have had the full faith and credit of the government and the public behind them. By eliminating the profit motive, focusing on the public interest and relying on government guarantees, the German public banks were able to turn bank credit into the sort of public utility described by Professor Hudson.The example of Germany shows that even success is no guarantee in the face of a relentless onslaught of propaganda by large privately owned banks interested only in making money for their CEOs, wealthiest clients and shareholders. But peering behind the propaganda, the public banking model that helped underwrite Germany's economic success might be the fast track to a US banking system that serves Main Street rather than Wall Street.

Ellen Brown

Ellen is an attorney and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are webofdebt.com and ellenbrown.com. 

Economy: The German Example

by David Leonhardt

New York Times, June 7, 2011

Germany has been a frequent cudgel in recent fights over the American economy. When Germany has grown faster than the United States, stimulus skeptics like to point across the Atlantic Ocean and say that austerity works. When it has grown more slowly, people who think the American stimulus made a big difference — including me — return the favor.

But the full story is more interesting than any caricature. In the last decade, Germany has succeeded in some important ways that the United States has not. The lessons aren’t simply liberal or conservative. They are both.

With our economy weakening once again — and with Chancellor Angela Merkel of Germany visiting the White House this week — now seems to be a good time to take a closer look.

The brief story is that, despite its reputation for austerity, Germany has been far more willing than the United States to use the power of government to help its economy. Yet it has also been more ruthless about cutting wasteful parts of government.

The results are intriguing. After performing worse than the American economy for years, the Germany economy has grown faster since the middle of last decade. (It did better than our economy before the crisis and has endured the crisis about equally). Just as important, most Germans have fared much better than most Americans, because the bounty of their growth has not been concentrated among a small slice of the affluent.

Inflation-adjusted average hourly pay has risen almost 30 percent since 1985 in Germany, the kind of gains American workers have not enjoyed since the ’50s and ’60s. In this country, hourly pay has risen a scant 6 percent since 1985.

Germany also managed to avoid a housing bubble, unlike the United States, Britain, Ireland, Spain and other countries. German children have stronger math and science skills than ours. Its medium-term budget deficit is smaller. Its unemployment rate is like a mirror image of ours: 6.1 percent, well below where it was when the financial crisis began in 2007. Our rate has risen to 9.1 percent.

I’m not saying that the United States should want to become Germany. Americans remain considerably richer. We have the innovative companies — Wal-Mart, Google, Apple, Facebook, Twitter — that make other countries swoon. We remain the world’s immigration Mecca.

Yet for all the strengths of the United States, almost nobody claims that the economy is in especially good shape. It so happens that our current out-of-town guests could teach us a few things.

•

The first lesson is that it’s really possible to make government more efficient. Like much of Western Europe, Germany long had a unemployment benefits system that discouraged work. But almost a decade ago, it began to make some changes.

It cut many benefits, in both duration and level, and it reduced the incentives to retire early. It also began trying to move the long-term unemployed into the labor force.

Specifically, the government took a fresh look at people who had not worked in years to determine who could and couldn’t work. The able and healthy were matched with potential employers. If they took a low-paying job, which was often the case, they would still receive a small portion of their benefits for a time. If they refused to work, their benefits were reduced anyway.

“The incentives to take up work were strengthened,” says Felix Hüfner of the Organization for Economic Co-operation and Development, “and also the sanctions were strengthened.” Sure enough, the reforms have nudged more people back into the labor force — and work tends to beget more work, as people develop skills and have more money to spend.

In the United States, short-term jobless benefits are not generous enough to be a major problem. But the Social Security disability program, which is one reason nearly 20 percent of working-age American men are not working, would benefit from some German-like reforms. So would those public sector pensions that encourage people to retire at 55 or 60.

Beyond the job market, Germany has also made a big effort to improve its education system. Eric Hanushek, a Stanford University economist, notes that Germany’s performance on the main international math, reading and science tests have become such a matter of national concern that the name of the tests — Pisa — is now a household word. “In the U.S.,” he says, “Pisa is still a bell tower in Italy.”

The math scores of German students have risen significantly since 2000, extending their existing lead over American students. Germany’s national average is now higher than the average in Massachusetts, this country’s top-performing state. And there is obviously a connection between strong technical skills and a strong manufacturing sector.

But the German story is not merely about making government more efficient. It’s also about understanding the unique role that government must play in a market economy.

That role starts with serious regulation. American regulators stood idle as the housing bubble inflated. German banks often required a down payment of 40 percent.

Unlike what happened here, German laws and regulators have also prevented the decimation of their labor unions. The clout of German unions, at individual companies and in the political system, is one reason the middle class there has fared decently in recent decades. In fact, middle-class pay has risen at roughly the same rate as top incomes.

The top 1 percent of German households earns about 11 percent of all income, virtually unchanged relative to 1970, according to recent estimates. In the United States, the top 1 percent makes more than 20 percent of all income, up from 9 percent in 1970. That’s right: only 40 years ago, Germany was more unequal than this country.

Finally, there are taxes. Germany does not have a smaller budget deficit because it spends less. Germany, you’ll recall, is the original welfare state. It has a smaller deficit because it is more willing to match the benefits it wants with the needed taxes. The current deficit-reduction plan includes about 60 percent spending cuts and 40 percent tax increases, Mr. Hüfner says. It’s like trying to lose weight by both eating less and exercising more.

As I suggested before, the American economy’s strengths may still be greater than the German economy’s. But Germany sure does seem more serious about dealing with its weaknesses.

And us? Well, lobbyists for the mortgage bankers and the N.A.A.C.P. have recently started pushing for less stringent standards for down payments. Wall Street is trying to water down other financial regulation, too.

Some Democrats say Social Security and Medicare must remain unchanged. Most Republicans refuse to consider returning tax rates even to their 1990s levels. Republican leaders also want to make deep cuts in the sort of antipoverty programs that have helped Germany withstand the recession even in the absence of big new stimulus legislation.

There is no getting around the fact that financial crises wreak terrible damage. It’s too late for us to prevent that damage, and it will take a long time to recover fully. It is not too late to learn from our mistakes.

How Germany Manages to Have an Export Economy and Provide Plenty of Jobs While the US is Engaged in a Race to the Bottom

by John Lawrence

Germany's economy is doing just fine while the US economy languishes. There are many reasons for this, but one that predominates is the Value Added Tax (VAT). At each stage in the production process, when a product or service changes hands, it is taxed at 19%. So if you're manufacturing a car, for example, when you buy a component like a transmission from another manufacturer, that manufacturer has to pay the VAT before that product can be sold to you. Some products and services like food and doctors pay a lower VAT.

The VAT must be paid on all imports in one fell swoop as they enter the country whereas the VAT was paid in stages by different business entities at each stage along the supply chain within the country. This tends to discourage imports, and make it more profitable to manufacture and sell (and thus provide jobs) within the country of Germany itself. Contrast this with America in which there is no tax on imports (thanks to free trade) so it is cheaper to manufacture abroad and import products into the US thus creating jobs abroad. The VAT acts as a tariff on imports and also provides a loopholeproof source of revenues for the government. In the US many major corporations like GE and Exxon Mobil, for example, pay no income tax even though they make tens of billions of dollars in profits. In fact many of them actually get tax refunds or subsidies! This process defunds the government, frays the safety net for the middle class and the poor and results in the budget being balanced, to the extent that it is, on the backs of the poor and middle class.

For German exports, the VAT is refunded thus encouraging exports at the expense of imports. No wonder Germany has a healthy export economy. This acts like a tariff in reverse. So imports are subjected to a 19% VAT at the border and exports are given a 19% refund at the border. American exports are given no such incentive. In short the US is letting foreign countries eat their lunch and running up their trade deficit in the process because of an antiquated approach to taxation which favors American multinationals while shortchanging American taxpayers.

The following is from an article, "The Foreign Value Added Tax: Making Our Exports Uncompetitive:"

Unknown to most Americans, the United States is losing the ability to compete in global trade because of the little known foreign Value-Added Tax (VAT). Foreign governments use this tax against United States producers as a means to prevent the importation and consumption of U.S. goods, while providing incentives for their countries to export their goods to the U.S. The foreign VAT was a subsidy created after World War II to speed up beneficial other countries' recovery. However, it is still used today by 149 countries to exploit this advantageous position against American trade. We have not used it domestically to off set theirs as a benefit to ourselves. The foreign VAT gives the companies of other nations and their exports the upper-hand by providing incentives in the form of rebates equal to the indirect tax on the exported product. For example, the VAT rate is 19 percent in Germany; therefore the Germans receive a 19 percent rebate from their government on each product exported to the U.S. This acts as a subsidy for a product while encouraging the exportation of products to the U.S. However, the VAT imposes a punishment on U.S. exports by placing a VAT equivalent to the Value Added Tax rate of the importing country. This means all U.S. exports that enter into Germany are taxed 19 percent on top of another 19 percent for the transportation fees of the goods into the country. The VAT destroys American industries’ ability to promote exports, while encouraging foreigners to sell their products to Americans – it must be amended or eliminated. In 2001, European countries had a VAT rate of 19.2 percent. By 2005, 94 percent of U.S. exports received a VAT. In the same year, foreign governments received rebates of $239 billion from the tax while collecting $131 billion from U.S. producers of goods and services. It is not surprising that the U.S. has become a nation promoting imports over exports under these unfair and harsh tax conditions. It can be seen why some companies choose to move overseas to produce their product abroad to avoid this monstrous tax and gain the advantage of it in some cases. Because of this detrimental tax, American firms cannot compete worldwide. Numerous attempts have been made by Congress to offset the tax – in 1974 the Nixon administration was urged to negotiate the tax during the Tokyo Round of global trade talks – only to be ignored by the other countries. In 1972 and 1984, Congress changed the tax system to exempt between 15 and 30 percent of an exporter’s income from U.S. taxes to offset the disadvantage of the VAT. The European Union (EU) complained to the World Trade Organization (WTO) in 1998, saying the U.S. tax exemption, acting as a tax subsidy, was a direct violation of the WTO agreement. In 1999 the WTO ruled in favor of the EU, giving the U.S. one year to change its tax exemption law or face penalties from the WTO. Again in 2000, Americans enacted new tax legislation to offset the VAT, which resulted in yet more EU complaints and another WTO case. The WTO decided in favor of the EU, leading to a ruling in 2002 allowing the EU to impose retaliatory tariffs of $4 billion each year on U.S. imports. By this time 25 European nations enacted the VAT to usurp America’s ability to trade. In 2004 Pres. Bush created new legislation again to offset the VAT. This again led to complaints from the EU – again filing a case with the WTO – arguing export subsidies were provided by the new legislation. In 2006 President Bush and Congress stopped enacting the tax provisions to U.S. exporters, demonstrating how the EU and WTO had successfully usurped the U.S. of its power to promote fair and free trade. During the battle between the WTO and the U.S., all nations were provided full VAT privileges, usurping the U.S. of fair trade. The WTO and EU do not serve in the best interest of the U.S. They are acting to support and promote continuance of this debilitating tax. The only way the WTO will allow us to offset the VAT is to have one of our own. We could feasibly do this if we were to lower our income tax. Until we do get a VAT of our own, our companies and our nation will continue to suffer against this unfair disadvantage.

While the US is straitjacketed by partisan bickering and paralyzed by insane trade policies, Germany and other countries are surging ahead with enlightened, rational thinking which gets translated into effective policies that keep the German government in a position of solvency and keep German factories humming. Meanwhile, the US engages in a race to the bottom encouraging the export not of products but of jobs and defunding the government by giving tax breaks to corporations and the rich.  Another informative article is the following:

In a June 28, 2010, economist Ian Fletcher said “Germany, like the U.S., is nominally a free-trading country.  The difference is that, while the U. S. genuinely believes in free trade, Germany quietly follows a contrary tradition that goes back to the 19th-century German economist Friedrich List …  So despite Germany’s nominal policy of free trade, in reality a huge key to its trading success is a vast and half-hidden thicket of de facto non-tariff trade barriers.” Fletcher quoted from a report by the Heritage Foundation: “Non-tariff barriers reflected in EU and German policy include agricultural and manufacturing subsidies, quotas, import restrictions and bans for some good and services, market access restrictions in some services sectors, non-transparent and restrictive regulations and standards, and inconsistent regulatory and customs administration among EU members.” Another opinion of Germany’s export success as reported in The New York Times, is “the roots of Germany’s export-driven success reach back to the painful restructuring under the previous government of Chancellor Gerhard Schröder.  By paring unemployment benefits, easing rules for hiring and firing, and management and labor’s working together to keep a lid on wages, ensured that it could again export its way to growth with competitive, nimble companies producing the cars and machine tools the world’s economies – emerging and developed alike – demanded.” The same article reported that Germany’s Chancellor Angela Merkel resisted the use of government stimulus spending that the United States and some European partners used to handle the recession.  Instead of extending unemployment benefits like the United States has done several times since the recession began, Germany “extended the “Kurzarbeit” or “short work” program to encourage companies to furlough workers or give them fewer hours instead of firing them, making up lost wages out of a fund filled in good times through payroll deductions and company contributions.  At its peak in May 2009, roughly 1.5 million workers were enrolled in the program,” and the Organization for Economic Cooperation and Development estimated that   “more than 200,000 jobs may have been saved as a result.” As a result, Germany’s unemployment rate at the height of the global recession was 9.0 percent in contrast to the 10.2 percent of the United States.  The German jobless rate in October 2010 was down to 7.0 percent in contrast to the 9.6 percent of the United States.  Germany is one of the few economies experiencing a solid recovery and one of the even fewer economies without a substantial deficit crisis on its hands.  Germany’s exports surged month by month in 2010, but year-end data hasn’t been released yet.

The US model of free trade has largely worked to create a trade deficit in the US, encourage a consumer based economy based on cheap imported products and undermine American workers. While the US encourages the offshoring of US corporations and unlimited imports into the US economy, it gives no incentives for corporations based in the US to export to other countries. As a result it is at a competitive disadvantage, and is losing out in the struggle to supply its government with cash and its workers with jobs. But instead of a rational assessment of this situation and a resolve to do something about it, the US argues about the President's birth certificate and engages in pointless, meaningless culture wars tantamount to arguing about how many angels can dance on the head of a pin.

America in Decline: Why Germans Think We're Insane

A look at our empire in decline through the eyes of the European media.

by Democrats Ramshield, December 26, 2010

from Alternet

 
As an American expat living in the European Union, I’ve started to see America from a different perspective.

The European Union has a larger economy and more people than America does. Though it spends less -- right around 9 percent of GNP on medical, whereas we in the U.S. spend close to between 15 to 16 percent of GNP on medical -- the EU pretty much insures 100 percent of its population.

The U.S. has 59 million people medically uninsured; 132 million without dental insurance; 60 million without paid sick leave; 40 million on food stamps. Everybody in the European Union has cradle-to-grave access to universal medical and a dental plan by law. The law also requires paid sick leave; paid annual leave; paid maternity leave. When you realize all of that, it becomes easy to understand why many Europeans think America has gone insane.

Der Spiegel has run an interesting feature called "A Superpower in Decline," which attempts to explain to a German audience such odd phenomena as the rise of the Tea Party, without the hedging or attempts at "balance" found in mainstream U.S. media. On the Tea Parties:

Full of Hatred: "The Tea Party, that group of white, older voters who claim that they want their country back, is angry. Fox News host Glenn Beck, a recovering alcoholic who likens Obama to Adolf Hitler, is angry. Beck doesn't quite know what he wants to be -- maybe a politician, maybe president, maybe a preacher -- and he doesn't know what he wants to do, either, or least he hasn't come up with any specific ideas or plans. But he is full of hatred."

The piece continues with the sobering assessment that America’s actual unemployment rate isn’t really 10 percent, but close to 20 percent when we factor in the number of people who have stopped looking for work.

Some social scientists think that making sure large-scale crime or fascism never takes root in Europe again requires a taxpayer investment in a strong social safety net. Can we learn from Europe? Isn't it better to invest in a social safety net than in a large criminal justice system? (In America over 2 million people are incarcerated.)

Jobless Benefits That Never Run Out

Unlike here, in Germany jobless benefits never run out. Not only that -- as part of their social safety net, all job seekers continue to be medically insured, as are their families.

In the German jobless benefit system, when "jobless benefit 1" runs out, "jobless benefit 2," also known as HartzIV, kicks in. That one never gets cut off. The jobless also have contributions made for their pensions. They receive other types of insurance coverage from the state. As you can imagine, the estimated 2 million unemployed Americans who almost had no benefits this Christmas seems a particular horror show to Europeans, made worse by the fact that the U.S. government does not provide any medical insurance to American unemployment recipients. Europeans routinely recoil at that in disbelief and disgust.

In another piece the Spiegel magazine steps away from statistics and tells the story of Pam Brown, who personifies what is coming to be known as the Nouveau American poor. Pam Brown was a former executive assistant on Wall Street, and her shocking decline has become part of the American story:

American society is breaking apart. Millions of people have lost their jobs and fallen into poverty. Among them, for the first time, are many middle-class families. Meet Pam Brown from New York, whose life changed overnight. The crisis caught her unprepared. "It was horrible," Pam Brown remembers. "Overnight I found myself on the wrong side of the fence. It never occurred to me that something like this could happen to me. I got very depressed." Brown sits in a cheap diner on West 14th Street in Manhattan, stirring her $1.35 coffee. That's all she orders -- it's too late for breakfast and too early for lunch. She also needs to save money. Until early 2009, Brown worked as an executive assistant on Wall Street, earning more than $80,000 a year, living in a six-bedroom house with her three sons. Today, she's long-term unemployed and has to make do with a tiny one-bedroom in the Bronx.

It's important to note that no country in the European Union uses food stamps in order to humiliate its disadvantaged citizens in the grocery checkout line. Even worse is the fact that even the humbling food stamp allotment may not provide enough food for America’s jobless families. So it is on a reoccurring basis that some of these families report eating out of garbage cans to the European media.

For Pam Brown, last winter was the worst. One day she ran out of food completely and had to go through trash cans. She fell into a deep depression ... For many, like Brown, the downfall is a Kafkaesque odyssey, a humiliation hard to comprehend. Help is not in sight: their government and their society have abandoned them.

Pam Brown and her children were disturbingly, indeed incomprehensibly, allowed to fall straight to the bottom. The richest country in the world becomes morally bankrupt when someone like Pam Brown and her children have to pick through trash to eat, abandoned with a callous disregard by the American government. People like Brown have found themselves dispossessed due to the robber baron actions of the Wall Street elite.

Hunger in the Land of the Big Mac

A shocking headline from a Swiss newspaper reads (Berner Zeitung) “Hunger in the Land of the Big Mac.” Though the article is in German, the pictures are worth 1,000 words and need no translation. Given the fact that the Swiss virtually eliminated hunger, how do we as Americans think they will view these pictures, to which the American population has apparently been desensitized.

Perhaps the only way for us to remember what we really look like in America is to see ourselves through the eyes of others. While it is true that we can all be proud Americans, surely we don't have to be proud of the broken American social safety net. Surely we can do better than that. Can a European-style social safety net rescue the American working and middle classes from GOP and Tea Party warfare?

 

Obama's Tax Cut Plan: Will it Create Jobs?

by John Lawrence

The recent bill that passed Congress that extended the Bush tax cuts for two years, funded unemployment insurance and did a few other things will undoubtedly create more "economic activity." But will it create jobs? That's the 64 trillion dollar question. Economic activity is not synonymous with job creation although that's the theory Obama is gambling his Presidency on. Economic activity is synonymous with positive GDP growth, but GDP growth has been positive since the third quarter of 2009. GDP growth has been positive for 5 straight quarters and hence by definition the US is officially not in a recession and hasn't been for the entire year of 2010. However, there is still an official unemployment rate of about 10% and an unofficial unemployment rate of 17%. At the same time job growth has been anemic. About a million jobs have been created in 2010 which is more jobs than were created during the entire Bush Presidency, but that isn't even enough to cover new entrants into the work force. About 100,000 new jobs per month are required just to stay even. That's 1.2 million jobs a year. Therefore, taking new entrants into the job force into consideration, there has actually been net negative job growth for the last 10 years including Obama's Presidency!

Something like 8 million jobs were lost during the Great Recession. Currently, there are over 400,000 initial claims for unemployment insurance every week. The statistics are ominous but, what is worse, government officials don't seem to have a clue as to why this is happening. There is no explanatory narrative, and their only theory is that increased economic activity will lead to job creation. Not necessarily so. What is certain is that the Obama tax cut plan will drill another trillion dollar hole in the national debt. And it will likely create jobs not in the US but in China and other Asian countries where labor is much cheaper than in the US. It's called labor arbitrage. When barriers to trade fall as they have with the current free trade penchant, businesses will move jobs to whatever country has the cheapest labor force and in today's world that means China. One is hard put to purchase a product not made in China. Consequently, increased economic activity will mean that GDP will increase as consumers buy more products MADE IN CHINA. That translates into few, if any, jobs created in the US.

The Obama administration is also trying to increase exports to serve the growing consumer markets in the developing countries of the world. That would arguably create jobs in the US. Only problem is that the transnational corporations, which are eager to serve those markets, prefer to locate their production plants not in the US but in those countries next to the emerging consumer markets. That way they get the best of both worlds. They get cheap labor AND they are close to the markets they want to serve. This leaves the US at a huge disadvantage. Corporations are eager to serve the US consumer market which is 70% of US GDP, but they don't want to locate production plants in the US because the cost of labor is too high.

So where does this leave the Obama administration. In a hole, likely, having added greatly to the national debt without having created many jobs, certainly not even enough to accommodate new workers entering the labor force. The Fed's attempts to get people to borrow and spend by lowering interest rates and by quantitative easing have been an abysmal failure when it comes to job creation. The money has been borrowed and invested primarily in emerging markets where profits are greater - not in the US. Government officials and the punditry seem to think that, if only they could get Americans to consume more, all would be well, but all would not be well as consumption is not correlated with job creation as long as everything Americans consume is produced elsewhere.

Automation, computerization and robotization have also decreased the need for much skilled labor. As a result the only jobs left are for those with a minimum of skills and those workers can be acquired cheaply in other countries. Professional jobs are also being outsourced to India and elsewhere as cheap internet connections make it profitable to outsource any jobs whose output is primarily paper which can be transmitted electronically to its final destination. Legal and engineering jobs, therefore, have been essentially outsourced to countries with college educated work forces which can handle professional job tasks. This makes it highly unlikely that the US can educate its way out of this dilemma. There has been much handwringing over the pitiful state of the US educational system which is inferior to those of many other countries of the world. But even improvements in education will not fix the problem that results from the fact that educated professionals in other countries will work for one tenth of the expected salaries in the US.

So what can be done about American jobs? What have other countries done? Germany, for example, has a healthy economy based largely on exports and also on the fact that German consumers buy products mainly produced in Germany. For all intents and purposes Germany has healthy tariffs although they don't call them that. Germany has a VAT tax which must be paid not only by companies producing products in Germany, but also, to be fair, by products entering the country as imports. The imports must pay the entire VAT tax in one fell swoop whereas German producers merely pay at each stage of production which spreads the tax over several companies. So imports are discouraged and German producers are encouraged. Other successful countries have in one way or another encouraged domestic producers. Government subsidies have given certain industries an edge, and, consequently, have sustained jobs in country. The US should learn from the example of other countries.

Obama and others hope that jobs will be created indirectly as a result of tax breaks. But this policy has historically proven to be a failure. It's a continuation of Reaganomics and supply side economics which was practiced by the Bush administration with the result that no net jobs were created in the entire Bush Presidency. The only jobs created by Bush were in the military and with private defense contractors. So Obama is gambling his Presidency on a failed Bush policy. One doesn't need a crystal ball to predict what the outcome will be: anemic job creation and a one term Presidency for Obama.

Other countries have industrial policies in which government works with industry in such a way as to create products both for internal consumption and for a successful export economy. This may involve intelligent subsidies instead of the lobbyist sustained subsidies in the US for malignant industries like oil and agricultural products. Other countries manage to place tariffs on imported products which compete with industries which they are trying to promote. The US penchant for free trade is only shooting itself in the foot. The US government funded itself entirely by by means of tarrifs from its founding up until the First World War - over 100 years. In short, US supply side economic and free trade policies are working to its disadvantage and to the advantage of its competitors. Meanwhile, US workers are being left out in the cold. They are being hung out to dry.

Finally, the one thing that is anathema to Republicans and Tea Partiers is direct job creation by the US government, but that may ultimately be the only alternative left to it after all the monetary and supply side economic policies have been exhausted. Franklin Roosevelt created the Civilian Conservation Corps and the Works Progress Administration which put millions of Americans to work during the 1930s. The US Congress became the country's largest employer. Much needed repairs to infrastructure were carried out as well as other beneficial projects. Today infrastructure is badly in need of repair and there are many useful potential jobs which private enterprise is loathe to undertake because they are not deemed to be profitable. Instead of just giving money to long term unemployed, they could be put to work in ways which would not only benefit the economy but would provide a source of labor for infrastructure improvement and beautification.

American Multinational Corporations Have No Interest in Creating American Jobs So Let's Take Another Approach

by John Lawrence

President Obama's trip to Asia was billed as one to increase American exports. But American multinational corporations aren't interested in increasing exports because they have built manufacturing facilities in China, South Korea, Thailand and other places where labor is cheaper than American labor. Their preferred modus operandi is to export to the American market and sell directly to the local market abroad, hence, exports from the US are a non-starter.  For consumers in foreign countries who want an American product, there is no need to import it from the US. They can buy it from a US corporate manufacturing facility located in their own country. That's why President Obama is barking up the wrong tree. He should be more interested in getting multinational corporations, American and otherwise, to locate manufacturing facilities in the US in order to create American jobs even if their only goal is to sell to the American market and not to export. The only way to do this is to change the import tax laws to encourage companies to locate production facilities here. President Clinton threatened a 100% import tax on luxury vehicles and Toyota promptly started locating manufacturing facilities in the US to protect the market for their Lexus.

It doesn't really matter whether foreign multinationals or American corporations build manufacturing facilities in the US. It's all about providing jobs. With current policies successful start-up companies will provide American jobs temporarily until they grow to a certain size, and then they will offshore those jobs in order to increase profits. So small business start-ups will not be the salvation for American job-seekers except in the very short run. Some worry that profits from Toyota's US manufacturing operations, for example, are repatriated to Japan. But so what? Profits from American corporations operating abroad are held offshore where they aren't taxed. So for all intents and purposes they are not repatriated to the US and, even if they were, they would only end up in rich investors' pockets. By encouraging foreign corporations to locate here, they can at least be taxed before their profits are repatriated. That makes them more desirable than American multinationals who neither provide jobs in the US nor pay taxes in the US. Their sole relation to the US is the fact that they originated here and are registered here, but that can be quickly changed as we saw with Halliburton which moved its registration to Dubai. And even "American" companies have subsidiaries in places like the Cayman Islands, the better to take advantage of lax tax laws. From the average middle class American's point of view, if a corporation doesn't provide American jobs or pay American taxes, what good is it? And if a foreign multinational corporation does provide American jobs and pays American taxes, it is preferable to an American multinational.

The only way to get muiltinational corporations to build production facilities in the US is to make it relatively unprofitable for them to import into the US market. This can only be done by an import tax or tariff of some sort. I'm sure there are sophisticated ways to accomplish the same thing without mentionaing the dreaded word "tariff." Tariffs, by the way, were the largest source of federal revenue from the 1790s to the eve of World War I, a period of some 124 years or more than half the country's history. Ideologically at the present time, tariffs are anathema to the US because of its rhetoric and espousal of free trade. But the US is being played by other countries who effectively take advantage of American open markets while effectively closing their own markets. South Korea is a good example. It exports its cars here while closing its markets to cars from the US. However, it is open to the idea of American car corporations building production facilities in their country. Why? Because that provides jobs for their own citizens and local taxes. Thus there is no need to import those cars and other products from the US.

Globalization is not going away. Each country needs to respond to it in such a way as to protect its own interests. So far the US has failed to do so. President Obama's attempts to invoke rules to even out the trade imbalances so far have gotten him nowhere. Trying to jawbone China to revalue its currency is an excercise falling on deaf ears. Even quantitative easing, the Fed's latest attempt to make American exports more competitive only breeds resentment among our foreign competitors and represents taking a club to kill a gnat. The only effective response is one which unilaterally changes American laws and policies to create a benefical trade policy, not going around trying to get a bunch of other nations to cooperate in doing something beneficial to American interests. The only solution is to take a page out of the other countries' books. It's not exports that matter. It's the location of production facilities in the US that matters. That's what will provide jobs and increase tax revenues. So importing into the US market from abroad has to be made more onerous for the importers. Only then will they decide that locating production facilities and hence providing American jobs within the US is the way to go. Over half the imports into the American market are from American corporations which have located production facilities abroad in order to take advantage of cheap foreign labor.

The US taxpayers bailed out General Motors. We actually own a good percentage of GM, but what is GM doing? It's building production facilities abroad. It is not providing American jobs in gratitude for being bailed out. This is from the Detroit News:

Washington -- General Motors Corp. will shift more production of vehicles bound for the U.S. market to China, Mexico, South Korea and Japan, but will keep total imports at roughly one-third of all sales here. In a confidential 12-page presentation to members of Congress, obtained by The Detroit News on Friday, GM said it will boost U.S. sales of vehicles built in those four countries by 98 percent -- or about 365,000 vehicles -- while shrinking production in Canada, Australia and European countries by about 130,000 vehicles. GM also disclosed it will start importing vehicles made in China in 2011, reaching 51,546 vehicles in 2014. Imports from South Korea to the United States will jump from 36,967 vehicles in 2010 to 157,126 in 2014. The automaker said it is canceling expansion projects in Russia, India and Mexico. GM's plan to import more vehicles from low-wage countries raises questions about whether it should beef up its foreign operations as it is relying on federal money to stay afloat. It also puts the automaker at odds with the United Auto Workers, which is trying to protect U.S. jobs amid a dramatic restructuring of the domestic auto industry.

So GM has no effective allegiance to the US despite being bailed out with taxpayer money. The same goes for Ford. Ford is planning to build a $450 million car plant in Thailand.

Ford Motor Co. is investing $450 million in a new passenger car plant in Thailand, cementing the country's status as an Asian manufacturing base for the automaker despite prolonged political unrest. The plant with an annual production capacity of 150,000 vehicles will begin assembling the next-generation Ford Focus from 2012, the company said Thursday. Some 85 percent of cars produced at the facility will be sold overseas and the rest in Thailand. Ford said up to 2,200 people will be employed at the factory slated for construction in the eastern seaboard province of Rayong that serves as a base for automakers and other industries.

It's all about the jobs. How does Germany, a high exporting nation, manage to keep high paying jobs in its own country? That's maybe something Obama and the Democrats should study and try to emulate. One way they do it is that most German companies build their products in Germany and then export them while US corporations build plants near their markets and produce for the local foreign market so their sales do not count as exports. Coca Cola has production and marketing facilities in over 200 countries. Germany has powerful trade unions and an extensive vocational education program. Every manufacturing facility is unionized unlike in the US where unions have a vastly smaller role than they did just 30 years ago. Work councils in Germany put workers and management together in a decision making capacity. All industrial imports into Germany are subject to an "Import Turnover Tax" of 19%, which is charged on the duty-paid value of the import article plus the customs duty, which varies by item. The Import Turnover Tax is designed to place the same tax burden on imported goods as goods produced domestically, on which is levied a 19% "Value-added Tax" (VAT). The German customs authorities collect both customs duty and Import Turnover Tax. Germany's regulations and bureaucratic procedures can be a difficult hurdle for companies wishing to enter the market and require close attention by U.S. exporters. Complex safety standards, not normally discriminatory but sometimes zealously applied, complicate access to the market for many U.S. products. U.S. suppliers are well advised to do their homework thoroughly and make sure they know precisely which standards apply to their product and that they obtain timely testing and certification. Selling into the American market should be considered a valuable privilege. Therefore, according to free market principles, it shouldn't be given away for free. The US government needs revenue. A VAT tax and a corresponding import turnover tax would not only replenish US government coffers but would tend to equalize the profitability of companies manufacturing abroad and those manufacturing in the US. Reunionization of US workers would also contribute a voice in favor of keeping production and, therefore, jobs local and in country.

It's true that Honda and Toyota only located plants in the US because they were worried about import duties that might come into being. But their US plants were just used for assembly operations. They still imported most of the parts from foreign cheap labor countries. What the US needs is an industrial policy that is concerned with providing jobs for American citizens. This means that the US has to be seen as an attractive place for multinational corporations to locate or it has to be seen as an unattractive place to import into a desirable consumer market. In the past tax breaks and other perks have been given to auto companies by states in competition among themselves to get plants located in their state. A national industrial policy needs to be put in place that would prevent the states from competing against each other in order to get plants located within their state.  That way the states can't be played off against each other by foreign or domestic corporations.

The US will not be successful in cajoling its trading partners to "equalize" trade balances or to revalue their currencies. Only unilateral policies that seek to get multinational corporations to locate production plants inside the US can hope to change the status quo. Trade policy and industrial policy can effectively provide incentives to create jobs here and to discourage imports. The US needs to renounce its policy of free trade in favor of fair trade, and fair trade can only be established if the US changes its policies from within.

China Accuses US Treasury Secretary of Recommending Communism as Solution to Trade Imbalance!

China and Germany belittle U.S. actions before G20

By Zhou Xin and Annika Breidthardt

BEIJING/BERLIN, Japan | Fri Nov 5, 2010 7:34am EDT

(Reuters) - China rebuffed on Friday a U.S. plan to set target limits for trade imbalances and Germany dubbed the Fed's money-printing policy "clueless," setting the stage for what could be a fractious G20 summit next week.

Washington believes an undervalued yuan is a major cause of economic imbalances and has pressed Beijing, largely in vain, to let the currency rise more swiftly to reflect the strength of what is now the world's second-largest economy.

The waters of the debate have been muddied by the Federal Reserve's decision to buy $600 billion in long-term bonds with new money in an effort to revive the flagging U.S. economy.

Resentment is rumbling worldwide that the initiative will generate even more instability by ramping up currencies against the dollar, inflating asset bubbles and increasing inflation.

"With all due respect, U.S. policy is clueless," German Finance Minister Wolfgang Schaeuble told a conference.

"(The problem) is not a shortage of liquidity. It's not that the Americans haven't pumped enough liquidity into the market and now to say let's pump more into the market is not going to solve their problems."

Policymakers from the world's new economic powerhouses in Latin America and Asia have said they would consider fresh steps to curb capital inflows after the Fed's move.

Zhou Xiaochuan, China's central bank governor, said while Beijing could understand that the Fed was implementing more monetary easing in order to stimulate the U.S. recovery, it may not be a good policy for the global economy.

NO BALANCE

Efforts to reduce imbalances that are destabilizing the global economy will top the agenda of the November 11-12 summit of the Group of 20 forum of leading economies in Seoul.

But China and Germany have now both opposed a plan floated by U.S. Treasury Secretary Timothy Geithner last month to cap current account surpluses and deficits at 4 percent of gross domestic product.

"Of course, we hope to see more balanced current accounts," Chinese Vice-Foreign Minister Cui Tiankai told a news briefing. "But we believe it would not be a good approach to single out this issue and focus all attention on it. The artificial setting of a numerical target cannot but remind us of the days of planned economies." (Ed. Note: What a twist - China accuses US of doing something reminiscent of the bad old days of communism!)

German Economics Minister Rainer Bruederle dismissed the proposal at the time as smacking of old-style central planning.

Cui, China's chief G20 negotiator, also rejected any attempt to set target ranges for the yuan to appreciate.

"That would indeed be asking us to manipulate the ... exchange rate, and it is something that we will of course not do," Cui said.

ASEAN, the 10-nation group of southeast Asian countries, will also raise concerns at the G20 over the U.S. proposals.

"We would like to work with G20 to correct imbalances," Thai Finance Minister Korn Chatikavanij said in the Japanese city of Kyoto where Asia-Pacific finance ministers are meeting.

"But we are concerned that the U.S. plan about current account balances might lead to trade protectionism."

The Asia-Pacific Economic Cooperation (APEC) forum in Kyoto, which Geithner will attend, will also provide an opportunity for emerging economies to voice their views of the Fed's action.

INTEREST RATES

Japan's central bank on Friday gave details of its own asset-purchase programme, announced last month. Worth 5 trillion yen ($62 billion), it is just a tenth the size of the Fed's scheme.

By pointing out the difference in scale, Economics Minister Banri Kaieda suggested that the Bank of Japan might face calls in the future for an expanded scheme.

Cui said he was worried at the prospect of a flood of money pouring into global markets in search of higher yields. As the issuer of the world's main reserve currency, the United States needed to adopt a responsible position.

"They owe us some explanation," he said. "I've seen much concern about the impact of this policy on financial stability in other countries."

An official newspaper said China needed to respond by raising interest rates again following a surprise increase on October 19.

Inflationary pressures prompted both India and Australia to raise interest rates this week.

Thailand's Korn said he accepted that the country's currency, the baht, would appreciate due to strong economic fundamentals, but he wanted to avoid damage from a sudden reversal in speculative money.

"We are willing to take whatever measures when necessary," he told Reuters before the start of a meeting of the APEC finance ministers.

Thailand has imposed a 15 percent withholding tax on interest and capital gains earned by foreign investors on Thai government bonds. Brazil has also taxed foreign buyers of its bonds.

(Writing by Alan Wheatley and Mike Peacock; Editing by Ruth Pitchford)