Tag Archives: economy

No One is talking about the Economy

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2016 Presidential Election

It’s been a long, long campaign. Odd that neither party has a candidate who lifts the spirit of voters – with the exception of the hard core base for each candidate. For them, what their candidate says can do no wrong. It is a campaign without policy – especially economic policy. One candidate is full of character assassination; the other is full of detailed objectives not bound by policy. In each case, we’ll have to discover policy after one is elected President.

The press, too, has done a poor job. We should be used to it; they have done a bad job since Murrow, Huntley and Brinkley were news anchors. Unfortunately, the on-the-ground news journalists really would like to do a better job but they are constrained by bosses who want only news that brings viewer share. Not only should big money be removed from the politicians, it should be removed from news rooms as well.

Many voters the mariner has spoken with have placed their hopes on the Congressional races. It will take nothing short of collusion between voters to replace a decadent and bought Congress with a modern, statesmanlike one.

Lack of economic plans for the next ten years and beyond.

Neither Donald nor Hillary has had a sit-down with the American voter to discuss the realities of US economics. To quote economist Robert Gordon[1]:

“Even if innovation were to continue into the future at the rate of the two decades before 2007, the U.S. faces six headwinds that are in the process of dragging long-term growth to half or less of the 1.9 percent annual rate experienced between 1860 and 2007. These include demography, education, inequality, globalization, energy/environment, and the overhang of consumer and government debt. A provocative “exercise in subtraction” suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades.”

In a past post, the mariner took a thread of thought from Gordon’s paper published in August 2012, Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds. Gordon’s logic is a central pillar in the mariner’s economic perspectives. The topic in the post was whether rapid product versions were actually growth. In a recent interview on PBS’ News Hour, Robert touched on this thread, covering his entire presumption about future growth – the six headwinds.

Given the nation’s current state of affairs – especially an election offering a rich narcissist or a richer establishmentarian, Gordon’s concern about restoring an historically robust economy is real. To paraphrase Gordon, We invented cars – no more horse manure to clean in the streets; we invented electricity – no more drudgery for housewives and services; we invented air conditioning and heat – no more coal to shovel or sweaty homes; we invented airplanes – transforming travel; we invented Interstates – now everyone can travel coast to coast; we invented radio and computers and speed of light communication. What is the next “new” phenomenon that will change the world and provide huge numbers of jobs for generations?

This requirement for a new direction in the daily life of 300 million Americans is a stiff requirement. Already, the US has reported that ‘there are no more jobs.’ Unions are driven out of existence, salaries continue to drop precariously as a percentage of GDP, and oligarchy is entrenched in the American culture. Rebuilding the nation’s infrastructure, from potholes to fiber optics, will not be a permanent reprieve.

Gregory Clark[2], an economist as well, challenges Gordon’s view by suggesting a computerized future is the new economic force. The mariner agrees with Gordon: Already we have invented computers; Gordon sees computers as a dividing force in economics – making the rich richer and the other 99% poorer.

Well, Donald and Hillary, what say ye?

[1] Robert Gordon is a renowned economist who has published many books and papers challenging many economic assumptions. Liberal in thought but conservative in assumptions, he is a leader in predicting future economic conditions.

[2] Gregory Clark, a professor of economics and department chair until 2013 at the University of California, Davis is most well known for his theory of economic history related to the change in behaviors that enabled the Industrial Revolution, discussed in his book, A Farewell to Alms: A Brief Economic History of the World.

A Farewell to Alms discusses the divide between rich and poor nations that came about as a result of the Industrial Revolution in terms of the evolution of particular behaviors originating in Britain. Prior to 1790, Clark asserts, man faced a Malthusian trap: new technology enabled greater productivity and more food, but was quickly gobbled up by higher populations. In Britain, however, as disease continually killed off poorer members of society, their positions in society were taken over by the sons of the wealthy, who were less violent, more literate, and more productive. This process of “downward social mobility” eventually enabled Britain to attain a rate of productivity that allowed it to break out of the Malthusian trap.

Ancient Mariner

Cuba – Center Stage for a Match Between Capitalism and Socialism

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The mariner is intrigued by the likely integration, or perhaps conflagration, of capitalism and socialism in Cuba. In pure philosophical form, the two economic cultures are totally opposite to one another. In the broadest terms, capitalists believe in free enterprise, unbridled entrepreneurship, and fast-profit markets. Socialists believe in cooperative enterprises where the economic engine primarily provides profits for the good of the citizens.

Essentially, capitalists desire to keep the government out of its affairs unless government legislation is helpful in increasing profit. For example, Monsanto lobbied Congress successfully to pass legislation making Monsanto unaccountable for any form of liability; in other words, Monsanto cannot be sued for damages. This legislation slipped through as part of another bill. Monsanto pressed for this bit of favoritism to counter a significant number of citizens who believe gene-modified products are bad for them. If one is an American, one must not be angry with Monsanto. It is the way of capitalism to make every conceivable effort to improve and protect profit. Virtually every sector of private business garners special advantages of one kind or another. Many advantages are simply prevention of regulations and oversight which may be to the betterment of society but reduce profit margin. The reader knows the popular aphorism: “What are the three most important things to a corporation? Profit, Profit, and Profit!”

To one degree or another, socialists desire a classless society where the government assures that everyone is treated the same and in a fair manner. Socialists believe the government is responsible for shaping economic prospects for the nation; usually this means that key enterprises are owned by the government to assure continued prosperity for the citizens. For example, the reader may remember when Hugo Chaves, President of Venezuela, nationalized all foreign oil companies and other parts of the fossil fuel industry. He did this in an effort to keep more profit in Venezuela for use by the government. It also took Venezuela from a minority ownership with foreign owners to a 60% majority ownership. Unlike capitalism, which virtually forbids government ownership of profit-making companies, socialism builds a national business model across three sectors: state-owned, cooperatives, and self-employed.

Hugo Pons Duarte, director of Cuba’s National Economist and Accountant Association, says, “The policy is not to open up the country to just anybody who wants to come, the government has a strategy for guiding investment.”

To have a cultural view of the differences between capitalism and socialism, consider the following examples:

Capitalism – Airlines. Using buy-outs, bankruptcy and mergers, US airline corporations have reduced the number of airlines by more than half. Today there are only four large airlines left. In the process of merger, labor unions are shut out or, at best, are forced to take reduced salaries and benefits. Regularly, fees for every conceivable service increase. Remembering that power corrupts, four airlines make collusion much easier than 12 or 13 airlines. That many airlines will increase competition whereas only 4 can mimic one another easily, coordinate hub flights to assure every flight is full, and, in order to keep profits high, slip down the slippery slope to collusion.

In a capitalist culture, a portion of airline profits goes to individuals who own a share(s) of the corporation’s worth and receive dividends based on profit. This is perceived as a “sharing” of economic wealth. However, in the US today media tells us that 1% of the wealthiest citizens own 37% of all stock on American stock exchanges. In capitalism, money makes more money. “No money? Tough luck. You need to pull yourself up by your bootstraps.” In a purely capitalist economy, there would be no public schools, no state owned or maintained roads and highways, public works, welfare, unemployment insurance, workers compensation, Social Security benefits etc.

Technically, the government structure of the US is a constitutional democratic republic, that is, the ultimate authority over government is vested in the citizens who exercise their authority by voting. Certain rights, ideals and civic protection are within the constitution. It is the constitution that prevents the US from being a pure capitalist government.

The private sector strongly objects every time the government imposes on profit to support the lower classes that will never have sufficient income to sustain healthy lifestyles or afford to have financial security. This disparity has become so extreme in the US that the middle class, the vital component and profit maker in consumer-based capitalism, is badly damaged.

Capitalism depends on its class system to foster desire, commitment, creativity, efficiency, competition and profit. CEOs of the largest U.S. companies made 354 times what the average worker was paid in 2012 — the widest pay gap in the world — according to a new analysis by the AFL-CIO. At S&P 500 companies, CEOs received an average income of $12.3 million, while ordinary rank-and-file workers took home around $34,645 – clearly an example of enforcing a class system. See more information at: http://www.shrm.org/hrdisciplines/compensation/articles/pages/ceo-to-worker-disparity.aspx#sthash.WhZJXNTi.dpuf 

Socialism – Almost too simplified, there are two types of socialism: communist and democratic. Communist socialism is run by a political party (Russia and China are the two largest examples); there may be some limited voting by the proletariat but any undesired outcomes are dealt with by the Communist Party changing rules of order and shifting authority. Further, the ruling class has a tendency toward totalitarianism or authoritarianism.

Most generally, socialism refers to state ownership of common property, or state ownership of the means of production. A purely socialist state would be one in which the state owns and operates the means of production. The private sector would be very small and would not determine market objectives. However, nearly all modern capitalist countries (“the West”) combine socialism and capitalism. Interestingly, the word “socialism” is a bad and scary word in the United States – much more than in any other full-function nation. Partly it is a bad word because the US by far is the most capitalistic nation in the world. Other than the dominance of capitalism, there is more to the plight of socialist representation in politics and why it is ostracized – but that’s for another post.

Ancient mariner

Topic: Environment

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Just a day or two ago, the mariner wrote that environmental issues and their solutions will be the largest contributor to new approaches and standards for the economy, jobs, new business opportunities, tax adjustments and infrastructure.

Already the mariner has benefitted from improvement of the environment in his home town. The City Council, as part of funds available from a larger project dealing with soil erosion and pollution in local streams and drainage ditches, eliminated several Ash trees.

In just a year or two, dying Ash trees will be an economic burden on this town and its citizens. The Emerald Ash Borer, a green beetle, kills Ash trees by burying eggs in the cambium layer of the tree. When the eggs hatch, the grubs destroy the cambium layer, eventually girdling the tree. This town has many, many stately old and very large Ash trees.

The mariner had six Ash trees on his property. In front of the house by the street, three Ash trees were within the path of the larger project to upgrade surface drainage ditches. The trees were removed by the City Council. The mariner estimates that each tree would have cost him $1,500 when the time came to remove them. He will attempt to save the three remaining trees with a new root drench product. With luck, maybe the trees can be saved. They may already be infected.

Other homes along the proposed drainage upgrade had Ash trees removed as well.

Of course, the mariner is pleased at the unexpected savings. He also saw the experience as a classic example of how environmental improvement creates unexpected benefits for many people, businesses and ecosystems beyond the specific goal of the improvement.

Taxes can be modified by the many tax rebates available for home improvements designed to reduce energy usage, e.g., improved insulation, renewable energy solutions and weatherized windows. The city will have tangential benefits because road surfaces and shoulders will not erode as quickly – an improvement in infrastructure.

Now on to natural resources and higher standards for their utilization.

Ancient Mariner

 

Todayland

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Some readers of the mariner’s blog are discomforted by the negative tone that often creeps into the mariner’s posts. He admits that sometimes he does not need to share his dissatisfaction with every day nuisances like rabbits and Midwest weather. Grant him the excuse of personal therapy.

Some readers feel the mariner is simply depressed. This is too bad because the reader shoots the messenger and discounts the information. The truth is that the mariner is depressed by the content of his posts – as the reader should be as well. Nevertheless, the mariner has an ethic about the quality of information and the important, though sometimes abstract, revelations put forward.

He knows he is more the skeptic than the poet. The mariner chooses to comport himself with the likes of Gandhi, King, Amos, Joshua, Geronimo and Jane Fonda. Something is grotesquely wrong with the United States today. Every one of us lives defensively – not noticeably day-to-day for most of us but we huddle under the shrub like my friend the rabbit, hoping no predator will pounce on us.

In this post, rather than go on and on about the details of this grotesqueness, the mariner will list topics followed by the primary issue and how it may affect us rabbits. He asks the reader to bookmark these mentally so the reader will notice activity in the news that is related to these topics. In later posts, perhaps he will expand the detail as he did with the bribe money paid to greedy Congressmen by corporations to fast track the TPP. (Incidentally, he just mentioned the primary predators of us rabbits: government and corporations.)

 

Private money in government. This topic has more snakes than Medusa. At the top, legislation must be enacted that prevents financial contributions from any private source and limits campaign financing to the governments holding elections. We are affected by money in government because it displaces democracy. Adding insult to injury, the Supreme Court recently declared money as speech. Therefore, it’s not one person one vote; it’s one dollar one vote.

Gerrymandering. Mandatory to resolution of redistricting abuse is to remove this function from political influence primarily by removing elected officials and party leaders from the process. The size and population of a district is intended to be based entirely on census data and equal distribution among the districts. There is a new issue that threatens one person one vote: The Supreme Court agreed to hear a case that would determine district population only by registered voters, not the census. Since the Court threw out the Civil Rights Act supervision of election procedures, thirteen states have been purging voter rolls without verification – eliminating many who have been voting for years but are the wrong race, too poor or disruptive to local politics, e.g., college students. Adding this new interpretation will enable gerrymanderers to ignore whole neighborhoods as if they didn’t exist. Gerrymandering is the root cause for needing the term “silent majority.”

Voting. Updating the way we vote is long overdue. We should consider Australia’s model. Voting is mandatory; if a voter fails to vote, he/she is fined. Further, votes should be cast by a mailed ballot. Internet voting opens a completely different set of problems and would be even easier to manipulate (Your vote is supposed to be secret for several reasons; does the reader think Google will respect your privacy? New ads will appear on your computer obviously based on the way you voted.) Mandatory, mailed voting will help with the gerrymandering topic.

 

The topics listed above must be repaired before we can expect any changes to the way corporations treat employees, the environment, and international business practices. On the government side, the topics must be repaired before there will be citizen-centric policy for entitlements, infrastructure, military objectives, developing new markets using modern technical solutions, and economic policy – just to name a few. Topics that will have the most profound impact are listed below.

 

Environment. Deceptively, addressing the environment will have a profound effect on every topic on this list. Briefly, many dramatic disasters will be avoided along the coasts, destructive weather, and across all the species of life; reset the domestic economy with new jobs, new policies affecting the oil and gas industry versus other energy sources – creating new areas of industry and development; a massive upgrade of the infrastructure to require less energy and less costly materials, including a resurgence in shipping via rail – a rail that will be based on new, more efficient technologies; all this only skims the surface of what solving the environment issue will generate.

Government control of natural resources. Today, corporations invade, misuse or destroy many kinds of resources from oil spills to backfilling sensitive estuaries to grazing cattle for free on protected land. The issue of control could be seen as a subset of the environment topic. However, government control of natural resources has a strong element of economic policy that is more to the point. It will have a much greater impact on corporate behavior. For example, how livestock is raised, what chemicals are allowed on any natural resource from golf courses to chickens to fish farms. Good examples in today’s food production are the issues of labeling and artificial additives. Holding up the Keystone pipeline because of ancillary US cost, political interference, tax revenue, and a host of local objections related to the disruption of local businesses is another example. If US governments, Federal, State and Local, had more influence and were backed by citizen-centric political power instead of corporate payoffs, the use and development of natural resources would be fair, improve production and be rational.

International control of multinational corporations. This is a scary topic for the mariner. As corporations move into the international markets made possible by computerization and telecommunication, they are moving into an area void of regulations, national law, and human rights. The multinational corporations will create a faux “government” presence that nations will have great difficulty controlling. An EXCELLENT example is the Trans-Pacific Partnership (TPP) agreement. Generally, it grants freedoms to corporations to operate in several nations as they see fit; they can ignore work related regulations because the multinational corporation is not under the jurisdiction of any one nation or, as the mariner suspects the TPP is written, all the nations collectively. They can move profit around to avoid taxes (that already happens often). The structure of international agreements, as they are written now, almost guarantee a culture of skimming, bribes and payoffs. Never forget the purpose of any corporation: profit, profit, profit, and no liability.

US tax structure. Taxes are the tool with which government has the ability to execute its functions. Today, as everyone knows, the tax code has more holes than a screen door. Most of the holes, similar to the TPP payoff, are inserted by interests who own the Congressmen, or Governors, or state legislators. The tax code, along with suppressed payroll practices since 1985, has created the imbalance of personal worth such that 90% of the population does not share in GDP profits. All the profits go to the 10% who own 37% of the country’s stock market shares. Fixing taxes will take lots of time and wheeling and dealing. It won’t begin until the current antagonistic atmosphere surrounding elected officials is normalized.

Don’t be depressed. The mariner feels better already!

Ancient Mariner

Economic Warming

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The mariner has been posting www.iowa-mariner for a couple of years. If you are a regular reader, you know he sees impending chaos on all sides. The mariner will follow in the footsteps of his favorite prophet Amos (a country fellow who raised sheep and had fleas) and the prophet’s fictional counterpart, Chicken Little.

The storm clouds are visible on the horizon and bad economic weather is predicted by conservatives and liberals alike. When the solution from each side is redundant, that in itself suggests chaos.

The mariner has read books by two expert authors each of whom starts from a different premise and arrives at similar conclusions.

The first book, The Colder War by Marin Katusa, (John Wiley and Sons, 2015) follows along the line of economic prophets who fear the Brazil-Russia-India-China (BRIC) alliance and the use of non-US dollars in world trade. Katusa predicts a slow demise for the US because of its seventeen trillion dollars in bond debt and, more importantly, because BRIC production of fossil fuels easily will dominate the US Petrodollar market. What will happen slowly (Katusa uses the decline of the British pound over thirty short years, finally yielding to the American dollar at the end of the Second World War) is that holders of US treasury notes will cash them and buy rubles, reals, yuán or some worldwide derivative based on BRIC dominance. In simple terms, this means the US is headed for at least 15% inflation of the dollar and will lose the float advantage of using US dollars around the world.

Katusa spends a lot of his book on Vladimir Putin’s plans to encompass the entire Euro-Asian land mass in a “Common Economic Space.” In other words, replace the US dollar-supported euro, the oil-rich something-stan countries, the Middle East, Asia and most of Africa into a giant free trade zone – all without using US dollars.

Katusa suggests the following remedies – which he doesn’t guarantee will be successful:

  • “Stop runaway government spending. If the growth in government debt is held below the growth rate of the economy, the dollar’s ability to withstand attack will strengthen mightily.
  • Stop accepting everyone’s invitation to participate in everyone’s conflict.
  • Stop everything – especially tax rules and handouts.
  • Stop allowing superstition-based regulation to interfere with the development of domestic energy resources.”

For each of us, Matusa suggests:

  • “Trade some of your dollars for gold and silver and don’t store it in a bank.
  • Open an account with a non-US bank to make it easier to obtain cash in foreign currencies.”

Obviously, Marin Katusa is a fiscal conservative. His underlying strategy does not include economic transition away from fossil fuels but rather suggests ways to put sandbags around the US economy. His perspective can’t be totally faulted; he is one of the world’s top fossil fuel negotiators.

 Now on to the second book, This Changes Everything by Naomi Klein (Simon and Shuster, 2014). As prolific a writer and advocate as Katusa, Klein challenges the fossil fuel profit model. She suggests the greedy pursuit of oil-based economies will collapse under the hidden costs of global warming, costs related to health, fragility of depending on one economic resource, and the profound shift of weather patterns that will impact most temperate zone nations dependent on crops – the northerly ones like Canada and Russia will have improved crop opportunity while those in lower latitudes like the US and Southern Europe will have more extreme weather conditions, frequent droughts and flooding.

Similar to Matusa’s book, Klein spends the first third of her book identifying the antagonist: not Putin but the conservatives who deny global warming. The following quotes set the tone for the entire book, which is heavily footnoted:

“And for many conservatives, particularly religious ones, the challenge goes deeper still, threatening not just faith in [capital] markets but core cultural narratives about what humans are doing here on Earth. Are we masters, here to subdue and dominate, or are we one species among many, at the mercy of [geophysical] powers more complex and unpredictable than even our most powerful computers can model?”

The author cited a statement from Yale’s Cultural Cognition Project:

“The Yale researchers explain that people with strong egalitarian and communitarian worldviews (marked by an inclination toward collective action and social justice, concern about inequality and suspicion of corporate power) overwhelmingly accept scientific consensus on climate change. Conversely, those with strong hierarchical and individualistic worldviews (marked by opposition to government assistance for the poor, strong support for industry, and a belief that we all get pretty much what we deserve) overwhelmingly reject the scientific consensus.”

Klein then moves her focus to the disastrous liaisons between “environmental” organizations and corporate partnerships. Many examples are cited not only in the United States but in virtually every country including the United Nations Environment Program. One example involved the Nature Conservancy (NC), the largest and richest environmental organization in the world and 2,303 acres along Galveston Bay in Texas. The acreage was donated to the NC by ExxonMobil in 1995.

This acreage was important to environmentalists because it was the last habitat for the Attwater Prairie Chicken. The bird population, estimated at over one million before the twentieth century, due to oil exploration had dropped to threatened extinction by 1965. The Nature Conservancy proclaimed recovery of the Attwater Prairie Chicken as its highest priority. Four years later the NC drilled its own oil well in an area that would have direct consequences on critical habitat. When this oil well was discovered by NC members, it attracted national press coverage. NC said they could drill without hurting the bird population.

By 2003 only sixteen birds remained. Still, when the first well ran dry, the NC drilled a second well. In 2012, the Attwater Prairie Chicken was extinct.

The Nature Conservancy had succumbed to the desire to make millions of dollars to be used in behalf of worldwide conservancy. Klein’s point is that the NC had good motives but capitalist solutions do not solve a global problem. In fact, capitalism accelerates climate change.

Klein makes this point across several similar examples. In every case, capitalist solutions failed. Cultures are so bound to profit as a solution for everything that global issues like carbon emission are a distant second and have no chance to transition to non-fossil fuel. Global warming is caused by fossil fuel profit. Any progress must be collective in nature and further must reduce the petro economy to a scant size of what it is today. In the US, petrodollars keep the wealthy growing wealthier and allow the US government to borrow 46% against its gross domestic product.

Benevolent billionaires offer little hope for a genuine shift in economic culture. Among others mentioned by Klein are Bill Gates, Warren Buffet, Michael Bloomberg, Richard Branson and T. Boone Pickens. In every case, these billionaires advocate solutions that will benefit their corporate investment in alternative solutions. Again, these endorsements use a capitalist model as a solution – first, there must be profit.

Global issues like carbon emissions and warming oceans are not part of any profit model. The expense must be covered but not by opportunistic means. This is a new phenomenon in economics: profit is not part of the financial model. Global warming is neither a national issue nor a GDP issue nor a profit versus loss corporate issue. It is pure overhead that must be dealt with collectively by 7 billion humans in 196 countries.

It is this very kind of solution, fraught with corporate restraint, government regulation and spending, and suppression of the largest profit sector in the world that frightens capitalists and advocates of individual freedom.

In the mariner’s opinion, Klein’s book roars like a lion until the part where solutions are offered. Klein cites a growing number of blockades where the local people literally stood in the way of fossil fuel operations. The author feels that growing civil interference will continue to have more influence with those who must deal with the overhead of fossil fuel extraction. An example to watch is the Keystone XL pipeline intending to move sand tar oil from Alberta to Texas. There have been several protests along the path of that pipeline; Obama does not support it. We will see how much influence blockading will affect a republican congress.

Naomi Klein is not an economist. Unlike Matusa, she does not provide financial detail about the impending crisis. Still, one can image what will happen to corporate profit and national GDP if the petrodollar is greatly diminished. On this point – the tremendous shift in priorities as well as economic models – Matusa and Klein agree: financial instability is something everyone will face in this century.

Finally, Klein cites a truism:

“It is often said that Mother Nature bats last, and this has been poignantly the case for some men who were most possessed by the ambition of conquering her.”

 Did someone mention that the sky is falling?

Ancient Mariner

Dismantling the Petro World

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The last post implied, if the reader did not take the content as factual, that the future for the western coalition of nations faced a collapse of its economies and would be fortunate to be called second tier nations. The reason that the BRIC (Brazil, Russia, India and China) nations will overwhelm the western economy is because they have the oil, gas, and the population growth to take over the world economy – somewhat like Walmart, Target and CVC moving into a neighborhood. Any local retail outlets that survive will be less than robust for sure.

Aside from nations, the petrochemical industry is the largest set of global organizations in the world. Asking them to go out of business or scale down to ten percent of what they were is not a winning strategy for global warming. Yet this is the fear that those who deny scientific information hear – that the petro economy is a common source of wealth and making the changes in corporate behavior, the way neighborhoods are built, the way every person consumes food, energy, space and nonrenewable minerals must undergo a transformation that challenges capitalism and suggests something more akin to socialism. So, global warming doesn’t exist.

While searching the Internet, the mariner came across an article in the Nation Magazine for November 2011. The article was written by Naomi Klein, a Canadian author who writes books on the climate and its confrontations with capitalism, human nature, and disappearing resources, including the disappearance of national economic policies. Klein’s current book, “This Changes Everything, Capitalism versus the Climate,” is on the best seller list at the moment.

The entire article is available at

http://www.thenation.com/article/164497/capitalism-vs-climate?page=0,2

 

In the Nation article, Klein makes a six point case that makes a reader think it is easier to climb a cliff covered in ice than to change the petro paradigm:

  1. Reviving and Reinventing the Public Sphere

…Traditionally, battles to protect the public sphere are cast as conflicts between irresponsible leftists who want to spend without limit and practical realists who understand that we are living beyond our economic means. But the gravity of the climate crisis cries out for a radically new conception of realism, as well as a very different understanding of limits. Government budget deficits are not nearly as dangerous as the deficits we have created in vital and complex natural systems. Changing our culture to respect those limits will require all of our collective muscle—to get ourselves off fossil fuels and to shore up communal infrastructure for the coming storms.

  1. Remembering How to Plan

…Every community in the world needs a plan for how it is going to transition away from fossil fuels, what the Transition Town movement calls an “energy descent action plan.” In the cities and towns that have taken this responsibility seriously, the process has opened rare spaces for participatory democracy, with neighbors packing consultation meetings at city halls to share ideas about how to reorganize their communities to lower emissions and build in resilience for tough times ahead.

  1. Reining in Corporations

…But we are also going to have to get back into the habit of barring outright dangerous and destructive behavior. That means getting in the way of corporations on multiple fronts, from imposing strict caps on the amount of carbon corporations can emit, to banning new coal-fired power plants, to cracking down on industrial feedlots, to shutting down dirty-energy extraction projects like the Alberta tar sands (starting with pipelines like Keystone XL that lock in expansion plans).

  1. Relocalizing Production

…Climate change does not demand an end to trade. But it does demand an end to the reckless form of “free trade” that governs every bilateral trade agreement as well as the World Trade Organization. This is more good news —for unemployed workers, for farmers unable to compete with cheap imports, for communities that have seen their manufacturers move offshore and their local businesses replaced with big boxes. But the challenge this poses to the capitalist project should not be underestimated: it represents the reversal of the thirty-year trend of removing every possible limit on corporate power.

  1. Ending the Cult of Shopping

…This growth imperative is why conventional economists reliably approach the climate crisis by asking the question, How can we reduce emissions while maintaining robust GDP growth? The usual answer is “decoupling”—the idea that renewable energy and greater efficiencies will allow us to sever economic growth from its environmental impact. And “green growth” advocates like Thomas Friedman tell us that the process of developing new green technologies and installing green infrastructure can provide a huge economic boost, sending GDP soaring and generating the wealth needed to “make America healthier, richer, more innovative, more productive, and more secure…”

The bottom line is that an ecological crisis that has its roots in the overconsumption of natural resources must be addressed not just by improving the efficiency of our economies but by reducing the amount of material stuff we produce and consume.

  1. Taxing the Rich and Filthy

…That means taxing carbon, as well as financial speculation. It means increasing taxes on corporations and the wealthy, cutting bloated military budgets and eliminating absurd subsidies to the fossil fuel industry. And governments will have to coordinate their responses so that corporations will have nowhere to hide (this kind of robust international regulatory architecture is what Heartlanders mean when they warn that climate change will usher in a sinister “world government”).

Most of all, however, we need to go after the profits of the corporations most responsible for getting us into this mess. The top five oil companies made $900 billion in profits in the past decade; ExxonMobil alone can clear $10 billion in profits in a single quarter…

Naomi Klein pulls no punches in this article in the Nation. The quotes provided here by the mariner provide an insight into her perspective but a great deal of reasoning remains in the article. He recommends that his readers go to the link provided above and discover the whole painting and all the colors in it.

Ancient Mariner

Chaos Grows Among Financial Analysts

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The following chart by Tom DeMark from the McClelland Market Report shown in a right-of-center financial magazine, Money Morning during an interview with Peter Schiff. Schiff feels the US fiscal policy is heading toward a financial collapse similar to the crash in 1929. The following chart was shown during the interview. It compares the behavior of the stock market leading up to the 1929 crash (blue) with current stock behavior red) from September 2007 to today. The parallel lines are eerily similar.

parallel

In an earlier post, the mariner alluded to a great shift in wealth that must occur before the US culture can move on. Apparently Schiff feels the chaotic moment will occur very soon.

The issue in 1929 was public debt far beyond what the public has today. Investors had as much as 90 percent margin (unpaid purchases). The effect was very much like the housing collapse in 2008 when there were tens of thousands of mortgages being sold on the stock market (remember derivatives) that had no cash to back them. Eventually, the banks faced a grim future if the US Treasury didn’t step in.

This time, however, conservatives like Peter Schiff and Donald Trump are attacking the Federal Government for having too much debt. Sooner or later, someone must pay the bill. Will the wealthy take a hit on their investments? Yes, says Schiff.

Scare tactics are thrown everywhere. The mariner believes there has been an imbalance for a long time. Two circumstances reflect the entire situation: the Federal Government indeed is in debt because tax laws have not changed and the wealthy are getting wealthier. Beyond that, the current economy hasn’t responded as well as it should. This is blamed by the right on Obama not allowing jobs to be created, and by the left that businesses are sitting on their profits and not investing in new jobs.

Whatever the cause, that chart is a bit scary. Perhaps we should do what was recommended in another post: ”…. get rid of credit card debt fast. Use as much cash for daily expenses as you can; pay cash for gasoline; pay cash for groceries; pay cash at supermarkets, Walmart, Target, and Farm and Home. In other words, live well within your means and do not use the Wall Street banks in lieu of any other option. And save, save, save. The taxes to pay for change are coming….” and you know who will be taxed.

Ancient Mariner

The Common Working Person

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Debate about the spread between the wealthy and the rest of the country is receiving increasing attention by media. Better news channels like PBS and Aljazeera have held on air debates about unions, minimum wage, making the school system more competitive so more graduate high school and college and get better jobs and make more money (so that wealthy folks can make more money and those not-so-competitive students are weaned out of the “new” work force). Further, there have been discussions about the computerization age being the second half of the industrial age.

From dockside, the mariner observes that the first industrial age created millions of new jobs for the common working person while the second industrial, computerized age, takes jobs away from the common working person. The comeback by those advocating robotization of the workplace is that the common working person will be retrained for new kinds of jobs. Like what? For the mariner’s taste, there’s too much hemming and hawing at this point.

This is a broad, swampy subject. There are those, usually conservative or aggressively futuristic who are willing to do anything except assure a good life for the common working person. There are those on the other side that say there will be no progress until the wealthy are taken down a peg or two and government will oversee distribution and accumulation of wealth. While the latter team may have a heart of gold in behalf of the common working person, strategies are every bit as vague as that of uncaring conservatives and likewise doesn’t demonstrate a secure future for the common working person. The government is as good as the next election. From all past indicators, this is a bad bet.

Having set opposing shorelines, the swamp in between is not mapped, has murky water and poisonous snakes. It may be of interest to the reader to know that the current description of what a job is and how wages relate to that job was formulated in the 19th century – yes, the 1800’s. Government has tinkered with the edges until 1985 when government cut strings to any historic or traditional definitions. Nothing has evolved since so the 19th century definition of a job is still around but often ignored – especially worker rights and benefits that were applied early in the 20th century.

If the reader makes Big Macs or bacon burgers today, that is unfortunate. Computerization of burger production will be done by robots within five years (working models already exist). Stopping at a fast food restaurant will be exactly like stopping at a Redbox machine. Minimum wage may not be the big issue everyone thinks it is. Is there anyone who can describe a job environment for the common working person five years from now? For tens of millions of common working persons? Is there anyone who can describe an economic platform that assures a decent lifetime for the common working person?

What mariner hears from both shorelines are self-serving fake solutions. To extend the swamp metaphor, all the decision makers from both shores are wandering around the swamp in flatboats while the common working person is dragged behind in the murky water and poisonous snakes.

Helping assure quality of life for millions of common working persons will take a complete, high-powered team representing every quarter of the debate and, the mariner is saddened to say, that will not come for some time. Our society still is on a downslide, riding on the lives of the common working person.

Ancient Mariner

 

Cities

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Books on cities present a view of how future economies will be organized. The following two books in particular see through today’s international chaos and give the reader a glimpse past the event horizon, where nations and corporations will be disassembled and brought back from the world of “too big to fail.”
The Metropolitan Revolution, How Cities and Metros are fixing Our Broken Politics and Fragile economy. Katz and Bradley, Brookings Institution Press, ISBN: 978-0-8157-2151-2

An uplifting read that exposes a new energy in cities that are going broke under the current Federal system. The key attributes for cities are planning for the future instead of the election cycle, finding local funding outside the Federal structure and cooperation between political parties, major institutions and unions.

Chapter 7, Toward a Global Network of Trading cities, expresses a rise in city power and economy. What we tend not be aware of is that cities, particularly in China, India and Brazil, are exploding in population, are centers of commerce, and have assets that make them independent of national monetary policy. Increases in international trade will make cities independent leaders in GDP.

In the United States, not a population powerhouse, cities like Denver, New York and regional agreements in Ohio are taking the lead in a sociological revamping of what a city means to its citizens. Citizens are willing to raise taxes to pay for infrastructural improvement. Denver, a complex group of smaller cities, has the largest public transit project in the country. Large cities in the US go abroad to increase trade without the help of the Federal Government and, largely, not even their own states.

If Mayors Ruled the World, Dysfunctional Nations, Rising Cities. Benjamin R. Barber, Yale University Press, ISBN: 9780300164671

This is another book about the emerging role of cities in ways that displace national and international relationships. Barber poses the question, “Is the nation-state, once democracy’s best hope today democratically dysfunctional? Obsolete?” The answer, says Benjamin Barber in this provocative book, is yes. Barber says cities and the mayors who run them can do and are doing a better job.   He says cities worldwide share pragmatism, civic trust, participation, indifference to borders and sovereignty, and a democratic penchant for networking, creativity, innovation, and cooperation. Throughout the book, Barber demonstrates how city mayors, singly and jointly, are responding to transnational problems more effectively than nation-states mired in ideological infighting and sovereign rivalries.

The mix of growing population in cities around the world, including the US, the fact that “the buck stops here,” with respect to day-to-day operations, and an ability to generate income through trade with different nations, make cities the political and economic power for the future.

The danger for social justice issues lies in the independent nature of cities. There are important objectives for national governments: sustained democracy, human rights, equitable income for workers, health practices and safety.

The mariner has mentioned before that a trade agreement among Pacific Rim countries called The Trans-Pacific Partnership (TPP) attempts to override all precedents associated with the above list. TPP is a dangerous “trade” agreement and should be vetted publically. At the moment, the President is trying to fast track the agreement, which essentially takes Congress, media and citizen opinion out of the picture. TPP is the exact opposite of the national role needed for the future.

Ancient Mariner

A Blissful Place

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Like many of you, the mariner feels a need to respond to greater tragedies in the world. However, there are two points to be made. First, he will solve not one great tragedy no matter how hard he tries. Second, No matter how much the mariner learns through personal education about a great tragedy, his knowledge inflames only his own soul.

A similar opinion is reflected in a few responses to posts. The mariner must agree with the general premise. True, he will not live long enough to see many great tragedies resolved – if they ever will be resolved. So find something pleasant to do until he dies.

However, a look backward through written history shows that tragedies have been overcome not by one or two powerful individuals but by hoards of people who took matters into their own hands. Discounting the contributions of science and technology, this has been the case most of the time. Further, no set of population has agreed to the last person that a given premise is absolute. Without elaborating, freedom marches could not have occurred with Martin Luther King alone. He had a few companions. Also note that both racism and “paid” slavery still abound. Still, the freedom movement made changes to American culture. One must, over the millennia, take one step at a time.

Occupy America and Tea Party movements are more evidence that it takes more than one person’s angst to change culture. To quote a great American phrase, “E Pluribus Unum.” It takes one hundred pennies to make a dollar. Consider yourself a penny – can’t make a dollar without you. To be more absolute about individual responsibility, be a citizen who votes – a power for change few citizens have had in history. 48 percent of eligible Americans do not vote. The mariner would recommend voting in caucuses and primaries as well. Further, when was the last time you shared your opinion with an elected representative?

The counterpoint is made. Yet, there is truth in the first paragraph. This modern age requires more than a millstone and corn to make breakfast. Although each of us is only one person, we as individuals are super-engaged in every level of local, national and global society. Our lifestyle is dependent on every level of local, national and global society. Our personal lives face daily confrontations that simpler times did not require. Further, in simpler times, tasks generally did not require much stress on the deeper machinations of our personalities.

In the United States, given a few exceptions for the wealthy and starving artists, having a job most of our life is an absolute requirement for survival. That means working steadily all day five days a week (a fairly recent limitation created by collective bargaining – but I digress). It means doing more than that if one needs to assure job security and lasting success. Virtually every job is stressful because time, not our own, is of the essence.

In the United States, children and parents and grandparents and cousins and friends disburse all over the world, leaving less of an envelope of unspoken comfort and protection. It is both blessing and curse in our American culture. As we have moved from an agricultural society to a post-industrial, technology driven society, a new festival has emerged – the family reunion. Used to be every day was a family reunion, though too much of a good thing can sometimes be too much. The mariner is reminded of a good friend he knew during the 1960’s. The friend said, “Never been more than 54 miles from home.” Queried about why, he said he never felt the need. He was an older farmer; he and his wife had four generations of family nearby.

So while we are more involved in our society than ever before, we tend to find less in the way of curative family and friend activities. In effect, were it not for a spouse, a great many individuals literally would live more than a day’s travel to a family member. Those without family or spouse emotionally have a harder life and tend to shape their lives in a way that guarantees curative time with friends and in solace.

The Western World is captivated by the noise and innovation of democratic capitalism. We tend to forget the healing aspects of religions that never experienced a Puritan-driven reformation, never heard of James Smith or John Maynard Keynes. One of my favorite anthropologists, Joseph Campbell often spoke of the need for each of us to have a blissful place. His definition of bliss was for religious purpose as well as emotional. Nevertheless, it takes training to sustain a blissful place. Perhaps that is why yoga and new age movements are growing in popularity – these movements reflect a need solved long ago in Hinduism and Buddhism – two religions that never faced western influence until the world grew too small. Still, as religions, they do not fare well in Western culture. Find solace in Pilates or Tai-Chi.

The mariner concedes we need solace. He also advocates that the world needs our constant attention because of human, chemical, planetary, and equality dynamics – but he digresses.

Ancient Mariner