tag:blogger.com,1999:blog-176175682024-03-13T05:41:58.132-05:00Edge of ChaosChronicling Chaos' journey to the edge of the world. Architecture, political absurdities, macrotrends in demography, economics, health care,natural resources (the twilight of oil), global warming,immigration,and Imperial collapse.Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.comBlogger447125tag:blogger.com,1999:blog-17617568.post-12843206763141538612010-06-19T16:45:00.003-05:002010-06-19T16:47:48.291-05:00Thoughtful Review of the Bankruptcy of Neoliberal Capitalism<a href="http://nplusonemag.com/intellectual-situation-your-marx">Here's</a> a nice recap of how we got here (from prosperity to bankruptcy), from a rare Marxist perspective:<br /><br />"The first intellectual consequence of the economic crisis was to undermine neoliberalism—or the belief in the sufficiency of markets to secure human welfare—as the age’s default ideology.<br /><br />The second was to prompt a hasty resurrection of Keynes. “We are all Keynesians again!” the ghost of Richard Nixon might have declared as Gordon Brown and Barack Obama, leaders of the nations most squarely behind the neoliberal push of the last thirty years, changed the Anglo-American tune and, this past winter, begged their European colleagues to stimulate the Continental economy with borrowed money. The crisis also made the economists Paul Krugman and Nouriel Roubini into the first Keynesian superstars since John Kenneth Galbraith. Their recommendations, on their invaluable blogs, of still vaster countercyclical spending and the temporary nationalization of banks were not taken up by the Obama administration, but they did confer new respectability on the idea of close state involvement in the economy.<br /><br />But the Keynesian revival, so far, is partial and expedient rather than thorough-going. Keynes’s “somewhat comprehensive socialization of investment” remains taboo, and when Hyman Minsky’s famous reinterpretation of Keynes was rushed back into print last year (Minsky developed through Keynes a theory of bubbles and their bursting), the author of the preface to the new edition assured readers that Minsky’s own advocacy of public-led investment could be ignored. There are at least two Keyneses: the tinkering inspiration for the so-called neo-classical synthesis, who demonstrates the ultimate viability of capitalism in spite of bouts of crisis; and the suave radical whose call for the “the euthanasia of the rentier” doesn’t stop far short of taking the rentier out to be shot. This second Keynes lives next door to the Marx who in the Manifesto insisted on the “centralization of credit in the banks of the state,” and hasn’t been heard from much lately.<br /><br />For the moment, the neo-Keynesian blog posts bear the same relationship to the crisis as cognitive behavioral therapy does to a patient’s troubles. Here is something insightful, helpful; listen carefully and it might save your life. But when the acute pain passes you will be left with the chronic problem of who and what you are. The suffering individual has psychoanalysis to turn to. In economics, the analogous route is Marxism, which like psychoanalysis has a dubious reputation—and an explanatory power and long-term perspective that its rivals can’t touch. With luck, the next intellectual consequence of the crisis will be to pry the lid off Marx’s tomb, since it is only from a Marxian standpoint that the recent credit bubble can be understood in terms of the structural problems it affected to solve as well as those it has created.<br /><br />From the first there were confused signs of a hunger for Marxist thought. Back in the clammy depths of the market’s autumn plunge, Robert Kuttner of the determinedly liberal American Prospect acknowledged that in light of Treasury’s rescue plan the “Marxian cant” designating the government as “the executive committee of the ruling class” sounded perfectly just. And John Lanchester in the New Yorker wanted to know, “Are there any unreconstructed Marxists left, anywhere in the wild? (Universities don’t count.) If there are, now would be a good moment for one of them to publish a book saying that the man in the beard would regard himself as having been proved right.” Here was a call for Marxist ideas that simultaneously reimposed their ban. We might require authors of Marxist tomes—but professors don’t count, only freelancers. (Such a guy would be worth a New Yorker profile: for instance, who loans him his shoes?) <br /><br />Of course there are reasons for being suspicious of Marxism. During the Third International and in the scattered sectarian life it has led outside the universities since the Second World War, Marxism has shown a susceptibility to dogma hardly equaled outside of American economics departments. But the ideological rout that Marxism began to suffer in the ’70s did what periods in the wilderness are supposed to do: it discouraged bandwagon-jumpers and enforced a new seriousness on those who stuck around. The truth is that since the neoliberal era began thirty years ago, Marxism has yielded some of its most formidable monuments of economic thought. Two in particular are David Harvey’s abstract and categorical Limits to Capital (1982), which as the restatement and completion of a great thinker’s project easily outclasses Minsky’s John Maynard Keynes (1975), and Robert Brenner’s narrative and empirical Economics of Global Turbulence (2006), which barely mentions Marx while vindicating, through an analysis of the postwar American, German, and Japanese economies, the idea Marx took from David Ricardo and made his own: the tendency of the rate of profit to fall in a situation of free competition.<br /><br />The need for a Marxist macroeconomics is patent in one small line from Paul Krugman’s Return of Depression Economics: “In the early 1970s, for reasons that are still somewhat mysterious, growth slowed throughout the advanced world” (our italics). And growth had stayed slow, for reasons that to a mainstream economics confessedly “shy of the grandest themes” (as the founder of general equilibrium theory once put it) remain a baffling mystery. <br /><br />The global rate of economic growth has declined from about 3.5 percent annually in the ’60s, to 2.4 percent in the ’70s, to 1.4 percent and 1 percent in the ’80s and ’90s, to 1 percent in this decade—much of which single paltry percentage turns out to have been illusory. Meanwhile, financial services, starting in the early ’80s, took a larger and larger share of total income and total profits in the world’s largest economy, until finally finance had become, by last fall, the largest American industry, accruing to itself a quarter of all US profits. This combination of declining overall growth with burgeoning finance suggests that the connection between finance and investment can’t have been the alleged one: the direction of capital to its most productive uses. So there must be a better way to characterize a situation—that of the last decades—in which vast quantities of overaccumulated capital (the neo-Keynesian’s “excess of desired savings”) circle the globe in search of profits, while the vitality of capitalism as a whole steadily diminishes.<br /><br />Marxists differ in the details of their accounts of the postwar economy, but the story, which ends for now in the cliffhanger of the first contraction of the world economy since 1945, goes something like this: The so-called Golden Age of postwar capitalism from 1950–70—a time of rising wages, profits, and investment—was the product of special and perishable circumstances. The wartime destruction of the Japanese and German productive base meant that, with the resumption of peace and renewed growth in demand for non-military goods, all the major industrial economies could for a time thrive without threat to one another. But the maturation of European and Japanese industry toward the end of the ’60s spelled the return of mutually destructive competition. Firms producing internationally tradable goods (cars, electronics, et cetera) could only survive by reducing prices, which in turn reduced profitability. And yet the capital sunk in manufacturing plants was enough to make capitalists reluctant to exit a given product line in spite of reduced profitability. Besides, governments don’t like to see big firms fail even when they can’t compete. (The Obama administration has lately proved almost as indulgent of GM as the state-directed Japanese banks have always been of Japanese industry.) And the more recent advent of China as a manufacturing power only exacerbated the situation, as the Chinese (to quote Brenner) “continued to expand capacity faster than it could be scrapped system-wide and to rain down torrents of redundant, increasingly high-tech goods upon the world market.”<br /><br />The orthodox story blames declining profitability (and price inflation) during the ’70s on the excessive demands of labor—a plausible enough explanation until you consider that the worldwide defeat of labor since the ’80s has failed to restore prior levels of growth. The high wages of the early ’70s are long gone. What has endured and intensified since then is a systemic bias in favor of short-term financial speculation over longer-term productive investment. The replacement of the gold standard by floating currencies encouraged capital to flit from country to country in search of returns magnified by any temporary overvaluation of this or that national fiat money. At the same time, information technology sped transactions along at a new rate and volume. What in 1983 was a daily mass of $2.3 billion in international financial transactions had become $130 billion by 2001. Only about 2 percent of the same sum would be necessary to maintain international trade and productive investment.<br /><br />Meanwhile production is guided by the search for low wages. The export-led growth of first Germany and Japan, then the “Asian Tigers,” then China with its endless reserve army of labor has flooded the world with cheapening goods; and between 1985 and 1995 the US itself staged a manufacturing revival through the exporter’s proven formula of cowed labor and an undervalued currency. But this is supply: what about demand? The fundamental problem with workers (to whom as much money as possible should be denied if commodities are to be affordable) is that they are also consumers (to whom as much money as possible should be supplied if they are to buy commodities). Marxists aren’t kidding when they talk about the contradictions of capitalism. In the end, as Marx wrote, “the ultimate reason for all real crises always remains the poverty and restricted consumption of the masses.” The result of declining or stagnant real wages since the ’80s has been global industrial overcapacity: too much plant turning out too much stuff for not enough buyers. <br /><br />The structural solution to this dilemma was as ingenious as it was unsustainable. If the global wage-bill couldn’t cover all the world’s gimcrack goods and coastal vacation properties, then consumers—especially American, but also European—had to be extended a new line of credit. They would borrow money to buy houses, and then borrow more money, to buy other stuff, against the rising value of these houses! Of course many new home-buyers plainly couldn’t pay their mortgages; the mortgages were granted on the assumption that someone else ultimately could and would. So present consumer demand was leveraged against a future demand for which there was no plausible source. For mortgage brokers operating under the originate-and-distribute model this didn’t matter; they had already pocketed their commissions. And those bundling iffy mortgages into securities comforted themselves with a rhetorical question: What was the likelihood of homeowners defaulting en masse? <br /><br />The venality and self-deception of the brokers, rating agencies, and bankers are now notorious. By comparison, David Harvey’s most audacious theoretical move, in Limits to Capital, seems sensible enough: How can Marx’s labor theory of value (which identifies value as “socially necessary labor time”) be reconciled with land prices, given that land is obviously not the product of human labor? Harvey’s answer was that under capitalism land becomes “a pure financial asset”; land price is a claim on future revenue treated as a present-day asset. “Mortgages,” Marx said, “are mere titles on future rent.” And Harvey completes his thought: “Land price must be realized as future rental appropriation, which rests on future labor” (our italics). The big risk, naturally, is that you will attribute to real estate far more present-day value than can later on be returned to it by labor (in the form of the portion of total income devoted to housing). A bubble occurs not when people pay for real estate with money they don’t yet have—as always happens, given the availabilty of credit—but when they pay with money they will never have, out of wages they will never receive—out of wages no one will ever receive. This past fall the papers were full of “analysts” wrapping their heads around a new idea: “Home prices,” said one, “are going to have to start reflecting people’s income.”<br /><br />In the world at large, if not always in the bubble-addicted US, recessions have been deeper and longer and recoveries ever more feeble since 1973. Already the recovery after the recession of 2001–02 was the weakest on record, adding virtually no new jobs to the rolls. The main stimulus to consumption was the confection of fantastic, improbable, and finally fictitious paper assets. And as Brenner wrote in 2006—were he not a Marxist he would be counted among the prophets of the crash—“the US Fed’s continuing dependence on cheap credit and asset-price bubbles to provide the subsidy to demand to keep the economy turning over appears to have only delayed, but not really avoided, the economy’s obligatory responses to the over-capacity, fall in profitability, and asset-price crash of 2000–01.” In this way alone—alas—the Bush Administration never happened.<br /><br />The motor of accumulation has been sputtering for nearly four decades, and its coughs can be heard again now that the roar of combusting paper wealth is dying down. This doesn’t mean capitalism or even growth is at an end. Economists of all kinds have pinned their hopes on the transformation of laboring and saving Chinese into hardy consumers. In any case, the US consumer—a ravening appetite in a paper house—appears to be finished as the world’s buyer of last resort. It would add a nice dialectical twist to the future history of our period if it could be said that, around the time the post-Maoist Chinese took up shopping, the post-bubble Americans turned to studying Marx."<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-89752157829611297432010-06-19T16:41:00.002-05:002010-06-19T16:44:54.304-05:00Naomi Klein On GOM GeyserNaomi is one of our favorite writers, doing complete and total justice with The Shock Doctrine, spoken of here at length. Here she is on the Gulf of Mexico oil disaster (quoted in its entirety):<br /><br /><br />Gulf oil spill: A hole in the world<br /><br />The Deepwater Horizon disaster is not just an industrial accident – it is a violent wound inflicted on the Earth itself. In this special report from the Gulf coast, a leading author and activist shows how it lays bare the hubris at the heart of capitalism<br /><br />Everyone gathered for the town hall meeting had been repeatedly instructed to show civility to the gentlemen from BP and the federal government. These fine folks had made time in their busy schedules to come to a high school gymnasium on a Tuesday night in Plaquemines Parish, Louisiana, one of many coastal communities where brown poison was slithering through the marshes, part of what has come to be described as the largest environmental disaster in US history.<br /><br />"Speak to others the way you would want to be spoken to," the chair of the meeting pleaded one last time before opening the floor for questions.<br /><br />And for a while the crowd, mostly made up of fishing families, showed remarkable restraint. They listened patiently to Larry Thomas, a genial BP public relations flack, as he told them that he was committed to "doing better" to process their claims for lost revenue – then passed all the details off to a markedly less friendly subcontractor. They heard out the suit from the Environmental Protection Agency as he informed them that, contrary to what they have read about the lack of testing and the product being banned in Britain, the chemical dispersant being sprayed on the oil in massive quantities was really perfectly safe.<br /><br />But patience started running out by the third time Ed Stanton, a coast guard captain, took to the podium to reassure them that "the coast guard intends to make sure that BP cleans it up".<br /><br />"Put it in writing!" someone shouted out. By now the air conditioning had shut itself off and the coolers of Budweiser were running low. A shrimper named Matt O'Brien approached the mic. "We don't need to hear this anymore," he declared, hands on hips. It didn't matter what assurances they were offered because, he explained, "we just don't trust you guys!" And with that, such a loud cheer rose up from the floor you'd have thought the Oilers (the unfortunately named school football team) had scored a touchdown.<br /><br />The showdown was cathartic, if nothing else. For weeks residents had been subjected to a barrage of pep talks and extravagant promises coming from Washington, Houston and London. Every time they turned on their TVs, there was the BP boss, Tony Hayward, offering his solemn word that he would "make it right". Or else it was President Barack Obama expressing his absolute confidence that his administration would "leave the Gulf coast in better shape than it was before", that he was "making sure" it "comes back even stronger than it was before this crisis".<br /><br />It all sounded great. But for people whose livelihoods put them in intimate contact with the delicate chemistry of the wetlands, it also sounded completely ridiculous, painfully so. Once the oil coats the base of the marsh grass, as it had already done just a few miles from here, no miracle machine or chemical concoction could safely get it out. You can skim oil off the surface of open water, and you can rake it off a sandy beach, but an oiled marsh just sits there, slowly dying. The larvae of countless species for which the marsh is a spawning ground – shrimp, crab, oysters and fin fish – will be poisoned.<br /><br />It was already happening. Earlier that day, I travelled through nearby marshes in a shallow water boat. Fish were jumping in waters encircled by white boom, the strips of thick cotton and mesh BP is using to soak up the oil. The circle of fouled material seemed to be tightening around the fish like a noose. Nearby, a red-winged blackbird perched atop a 2 metre (7ft) blade of oil-contaminated marsh grass. Death was creeping up the cane; the small bird may as well have been standing on a lit stick of dynamite.<br /><br />And then there is the grass itself, or the Roseau cane, as the tall sharp blades are called. If oil seeps deeply enough into the marsh, it will not only kill the grass above ground but also the roots. Those roots are what hold the marsh together, keeping bright green land from collapsing into the Mississippi River delta and the Gulf of Mexico. So not only do places like Plaquemines Parish stand to lose their fisheries, but also much of the physical barrier that lessens the intensity of fierce storms like hurricane Katrina. Which could mean losing everything.<br /><br />How long will it take for an ecosystem this ravaged to be "restored and made whole" as Obama's interior secretary has pledged to do? It's not at all clear that such a thing is remotely possible, at least not in a time frame we can easily wrap our heads around. The Alaskan fisheries have yet to fully recover from the 1989 Exxon Valdez spill and some species of fish never returned. Government scientists now estimate that as much as a Valdez-worth of oil may be entering the Gulf coastal waters every four days. An even worse prognosis emerges from the 1991 Gulf war spill, when an estimated 11m barrels of oil were dumped into the Persian Gulf – the largest spill ever. That oil entered the marshland and stayed there, burrowing deeper and deeper thanks to holes dug by crabs. It's not a perfect comparison, since so little clean-up was done, but according to a study conducted 12 years after the disaster, nearly 90% of the impacted muddy salt marshes and mangroves were still profoundly damaged.<br /><br />We do know this. Far from being "made whole," the Gulf coast, more than likely, will be diminished. Its rich waters and crowded skies will be less alive than they are today. The physical space many communities occupy on the map will also shrink, thanks to erosion. And the coast's legendary culture will contract and wither. The fishing families up and down the coast do not just gather food, after all. They hold up an intricate network that includes family tradition, cuisine, music, art and endangered languages – much like the roots of grass holding up the land in the marsh. Without fishing, these unique cultures lose their root system, the very ground on which they stand. (BP, for its part, is well aware of the limits of recovery. The company's Gulf of Mexico regional oil spill response plan specifically instructs officials not to make "promises that property, ecology, or anything else will be restored to normal". Which is no doubt why its officials consistently favour folksy terms like "make it right".)<br /><br />If Katrina pulled back the curtain on the reality of racism in America, the BP disaster pulls back the curtain on something far more hidden: how little control even the most ingenious among us have over the awesome, intricately interconnected natural forces with which we so casually meddle. BP cannot plug the hole in the Earth that it made. Obama cannot order fish species to survive, or brown pelicans not to go extinct (no matter whose ass he kicks). No amount of money – not BP's recently pledged $20bn (£13.5bn), not $100bn – can replace a culture that has lost its roots. And while our politicians and corporate leaders have yet to come to terms with these humbling truths, the people whose air, water and livelihoods have been contaminated are losing their illusions fast.<br /><br />"Everything is dying," a woman said as the town hall meeting was finally coming to a close. "How can you honestly tell us that our Gulf is resilient and will bounce back? Because not one of you up here has a hint as to what is going to happen to our Gulf. You sit up here with a straight face and act like you know when you don't know."<br /><br />This Gulf coast crisis is about many things – corruption, deregulation, the addiction to fossil fuels. But underneath it all, it's about this: our culture's excruciatingly dangerous claim to have such complete understanding and command over nature that we can radically manipulate and re-engineer it with minimal risk to the natural systems that sustain us. But as the BP disaster has revealed, nature is always more unpredictable than the most sophisticated mathematical and geological models imagine. During Thursday's congressional testimony, Hayward said: "The best minds and the deepest expertise are being brought to bear" on the crisis, and that, "with the possible exception of the space programme in the 1960s, it is difficult to imagine the gathering of a larger, more technically proficient team in one place in peacetime." And yet, in the face of what the geologist Jill Schneiderman has described as "Pandora's well", they are like the men at the front of that gymnasium: they act like they know, but they don't know.<br /><br />BP's mission statement<br /><br />In the arc of human history, the notion that nature is a machine for us to re-engineer at will is a relatively recent conceit. In her ground-breaking 1980 book The Death of Nature, the environmental historian Carolyn Merchant reminded readers that up until the 1600s, the Earth was alive, usually taking the form of a mother. Europeans – like indigenous people the world over – believed the planet to be a living organism, full of life-giving powers but also wrathful tempers. There were, for this reason, strong taboos against actions that would deform and desecrate "the mother", including mining.<br /><br />The metaphor changed with the unlocking of some (but by no means all) of nature's mysteries during the scientific revolution of the 1600s. With nature now cast as a machine, devoid of mystery or divinity, its component parts could be dammed, extracted and remade with impunity. Nature still sometimes appeared as a woman, but one easily dominated and subdued. Sir Francis Bacon best encapsulated the new ethos when he wrote in the 1623 De dignitate et augmentis scientiarum that nature is to be "put in constraint, moulded, and made as it were new by art and the hand of man".<br /><br />Those words may as well have been BP's corporate mission statement. Boldly inhabiting what the company called "the energy frontier", it dabbled in synthesising methane-producing microbes and announced that "a new area of investigation" would be geoengineering. And of course it bragged that, at its Tiber prospect in the Gulf of Mexico, it now had "the deepest well ever drilled by the oil and gas industry" – as deep under the ocean floor as jets fly overhead.<br /><br />Imagining and preparing for what would happen if these experiments in altering the building blocks of life and geology went wrong occupied precious little space in the corporate imagination. As we have all discovered, after the Deepwater Horizon rig exploded on 20 April, the company had no systems in place to effectively respond to this scenario. Explaining why it did not have even the ultimately unsuccessful containment dome waiting to be activated on shore, a BP spokesman, Steve Rinehart, said: "I don't think anybody foresaw the circumstance that we're faced with now." Apparently, it "seemed inconceivable" that the blowout preventer would ever fail – so why prepare?<br /><br />This refusal to contemplate failure clearly came straight from the top. A year ago, Hayward told a group of graduate students at Stanford University that he has a plaque on his desk that reads: "If you knew you could not fail, what would you try?" Far from being a benign inspirational slogan, this was actually an accurate description of how BP and its competitors behaved in the real world. In recent hearings on Capitol Hill, congressman Ed Markey of Massachusetts grilled representatives from the top oil and gas companies on the revealing ways in which they had allocated resources. Over three years, they had spent "$39bn to explore for new oil and gas. Yet, the average investment in research and development for safety, accident prevention and spill response was a paltry $20m a year."<br /><br />These priorities go a long way towards explaining why the initial exploration plan that BP submitted to the federal government for the ill-fated Deepwater Horizon well reads like a Greek tragedy about human hubris. The phrase "little risk" appears five times. Even if there is a spill, BP confidently predicts that, thanks to "proven equipment and technology", adverse affects will be minimal. Presenting nature as a predictable and agreeable junior partner (or perhaps subcontractor), the report cheerfully explains that should a spill occur, "Currents and microbial degradation would remove the oil from the water column or dilute the constituents to background levels". The effects on fish, meanwhile, "would likely be sublethal" because of "the capability of adult fish and shellfish to avoid a spill [and] to metabolise hydrocarbons". (In BP's telling, rather than a dire threat, a spill emerges as an all-you-can-eat buffet for aquatic life.)<br /><br />Best of all, should a major spill occur, there is, apparently, "little risk of contact or impact to the coastline" because of the company's projected speedy response (!) and "due to the distance [of the rig] to shore" – about 48 miles (77km). This is the most astonishing claim of all. In a gulf that often sees winds of more than 70km an hour, not to mention hurricanes, BP had so little respect for the ocean's capacity to ebb and flow, surge and heave, that it did not think oil could make a paltry 77km trip. (Last week, a shard of the exploded Deepwater Horizon showed up on a beach in Florida, 306km away.)<br /><br />None of this sloppiness would have been possible, however, had BP not been making its predictions to a political class eager to believe that nature had indeed been mastered. Some, like Republican Lisa Murkowski, were more eager than others. The Alaskan senator was so awe-struck by the industry's four-dimensional seismic imaging that she proclaimed deep-sea drilling to have reached the very height of controlled artificiality. "It's better than Disneyland in terms of how you can take technologies and go after a resource that is thousands of years old and do so in an environmentally sound way," she told the Senate energy committee just seven months ago.<br /><br />Drilling without thinking has of course been Republican party policy since May 2008. With gas prices soaring to unprecedented heights, that's when the conservative leader Newt Gingrich unveiled the slogan "Drill Here, Drill Now, Pay Less" – with an emphasis on the now. The wildly popular campaign was a cry against caution, against study, against measured action. In Gingrich's telling, drilling at home wherever the oil and gas might be – locked in Rocky Mountain shale, in the Arctic National Wildlife Refuge, and deep offshore – was a surefire way to lower the price at the pump, create jobs, and kick Arab ass all at once. In the face of this triple win, caring about the environment was for sissies: as senator Mitch McConnell put it, "in Alabama and Mississippi and Louisiana and Texas, they think oil rigs are pretty". By the time the infamous "Drill Baby Drill" Republican national convention rolled around, the party base was in such a frenzy for US-made fossil fuels, they would have bored under the convention floor if someone had brought a big enough drill.<br /><br />Obama, eventually, gave in, as he invariably does. With cosmic bad timing, just three weeks before the Deepwater Horizon blew up, the president announced he would open up previously protected parts of the country to offshore drilling. The practice was not as risky as he had thought, he explained. "Oil rigs today generally don't cause spills. They are technologically very advanced." That wasn't enough for Sarah Palin, however, who sneered at the Obama administration's plans to conduct more studies before drilling in some areas. "My goodness, folks, these areas have been studied to death," she told the Southern Republican leadership conference in New Orleans, now just 11 days before the blowout. "Let's drill, baby, drill, not stall, baby, stall!" And there was much rejoicing.<br /><br />In his congressional testimony, Hayward said: "We and the entire industry will learn from this terrible event." And one might well imagine that a catastrophe of this magnitude would indeed instil BP executives and the "Drill Now" crowd with a new sense of humility. There are, however, no signs that this is the case. The response to the disaster – at the corporate and governmental levels – has been rife with the precise brand of arrogance and overly sunny predictions that created the disaster in the first place.<br /><br />The ocean is big, she can take it, we heard from Hayward in the early days. While spokesman John Curry insisted that hungry microbes would consume whatever oil was in the water system, because "nature has a way of helping the situation". But nature has not been playing along. The deep-sea gusher has bust out of all BP's top hats, containment domes, and junk shots. The ocean's winds and currents have made a mockery of the lightweight booms BP has laid out to absorb the oil. "We told them," said Byron Encalade, the president of the Louisiana Oysters Association. "The oil's gonna go over the booms or underneath the bottom." Indeed it did. The marine biologist Rick Steiner, who has been following the clean up closely, estimates that "70% or 80% of the booms are doing absolutely nothing at all".<br /><br />And then there are the controversial chemical dispersants: more than 1.3m gallons dumped with the company's trademark "what could go wrong?" attitude. As the angry residents at the Plaquemines Parish town hall rightly point out, few tests had been conducted, and there is scant research about what this unprecedented amount of dispersed oil will do to marine life. Nor is there a way to clean up the toxic mixture of oil and chemicals below the surface. Yes, fast multiplying microbes do devour underwater oil – but in the process they also absorb the water's oxygen, creating a whole new threat to marine life.<br /><br />BP had even dared to imagine that it could prevent unflattering images of oil-covered beaches and birds from escaping the disaster zone. When I was on the water with a TV crew, for instance, we were approached by another boat whose captain asked, ""Y'all work for BP?" When we said no, the response – in the open ocean – was "You can't be here then". But of course these heavy-handed tactics, like all the others, have failed. There is simply too much oil in too many places. "You cannot tell God's air where to flow and go, and you can't tell water where to flow and go," I was told by Debra Ramirez. It was a lesson she had learned from living in Mossville, Louisiana, surrounded by 14 emission-spewing petrochemical plants, and watching illness spread from neighbour to neighbour.<br /><br />Human limitation has been the one constant of this catastrophe. After two months, we still have no idea how much oil is flowing, nor when it will stop. The company's claim that it will complete relief wells by the end of August – repeated by Obama in his Oval Office address – is seen by many scientists as a bluff. The procedure is risky and could fail, and there is a real possibility that the oil could continue to leak for years.<br /><br />The flow of denial shows no sign of abating either. Louisiana politicians indignantly oppose Obama's temporary freeze on deepwater drilling, accusing him of killing the one big industry left standing now that fishing and tourism are in crisis. Palin mused on Facebook that "no human endeavour is ever without risk", while Texas Republican congressman John Culberson described the disaster as a "statistical anomaly". By far the most sociopathic reaction, however, comes from veteran Washington commentator Llewellyn King: rather than turning away from big engineering risks, we should pause in "wonder that we can build machines so remarkable that they can lift the lid off the underworld".<br /><br />Make the bleeding stop<br /><br />Thankfully, many are taking a very different lesson from the disaster, standing not in wonder at humanity's power to reshape nature, but at our powerlessness to cope with the fierce natural forces we unleash. There is something else too. It is the feeling that the hole at the bottom of the ocean is more than an engineering accident or a broken machine. It is a violent wound in a living organism; that it is part of us. And thanks to BP's live camera feed, we can all watch the Earth's guts gush forth, in real time, 24 hours a day.<br /><br />John Wathen, a conservationist with the Waterkeeper Alliance, was one of the few independent observers to fly over the spill in the early days of the disaster. After filming the thick red streaks of oil that the coast guard politely refers to as "rainbow sheen", he observed what many had felt: "The Gulf seems to be bleeding." This imagery comes up again and again in conversations and interviews. Monique Harden, an environmental rights lawyer in New Orleans, refuses to call the disaster an "oil spill" and instead says, "we are haemorrhaging". Others speak of the need to "make the bleeding stop". And I was personally struck, flying over the stretch of ocean where the Deepwater Horizon sank with the US Coast Guard, that the swirling shapes the oil made in the ocean waves looked remarkably like cave drawings: a feathery lung gasping for air, eyes staring upwards, a prehistoric bird. Messages from the deep.<br /><br />And this is surely the strangest twist in the Gulf coast saga: it seems to be waking us up to the reality that the Earth never was a machine. After 400 years of being declared dead, and in the middle of so much death, the Earth is coming alive.<br /><br />The experience of following the oil's progress through the ecosystem is a kind of crash course in deep ecology. Every day we learn more about how what seems to be a terrible problem in one isolated part of the world actually radiates out in ways most of us could never have imagined. One day we learn that the oil could reach Cuba – then Europe. Next we hear that fishermen all the way up the Atlantic in Prince Edward Island, Canada, are worried because the Bluefin tuna they catch off their shores are born thousands of miles away in those oil-stained Gulf waters. And we learn, too, that for birds, the Gulf coast wetlands are the equivalent of a busy airport hub – everyone seems to have a stopover: 110 species of migratory songbirds and 75% of all migratory US waterfowl.<br /><br />It's one thing to be told by an incomprehensible chaos theorist that a butterfly flapping its wings in Brazil can set off a tornado in Texas. It's another to watch chaos theory unfold before your eyes. Carolyn Merchant puts the lesson like this: "The problem as BP has tragically and belatedly discovered is that nature as an active force cannot be so confined." Predictable outcomes are unusual within ecological systems, while "unpredictable, chaotic events [are] usual". And just in case we still didn't get it, a few days ago, a bolt of lightning struck a BP ship like an exclamation mark, forcing it to suspend its containment efforts. And don't even mention what a hurricane would do to BP's toxic soup.<br /><br />There is, it must be stressed, something uniquely twisted about this particular path to enlightenment. They say that Americans learn where foreign countries are by bombing them. Now it seems we are all learning about nature's circulatory systems by poisoning them.<br /><br />In the late 90s, an isolated indigenous group in Colombia captured world headlines with an almost Avatar-esque conflict. From their remote home in the Andean cloud forests, the U'wa let it be known that if Occidental Petroleum carried out plans to drill for oil on their territory, they would commit mass ritual suicide by jumping off a cliff. Their elders explained that oil is part of ruiria, "the blood of Mother Earth". They believe that all life, including their own, flows from ruiria, so pulling out the oil would bring on their destruction. (Oxy eventually withdrew from the region, saying there wasn't as much oil as it had previously thought.)<br /><br />Virtually all indigenous cultures have myths about gods and spirits living in the natural world – in rocks, mountains, glaciers, forests – as did European culture before the scientific revolution. Katja Neves, an anthropologist at Concordia University, points out that the practice serves a practical purpose. Calling the Earth "sacred" is another way of expressing humility in the face of forces we do not fully comprehend. When something is sacred, it demands that we proceed with caution. Even awe.<br /><br />If we are absorbing this lesson at long last, the implications could be profound. Public support for increased offshore drilling is dropping precipitously, down 22% from the peak of the "Drill Now" frenzy. The issue is not dead, however. It is only a matter of time before the Obama administration announces that, thanks to ingenious new technology and tough new regulations, it is now perfectly safe to drill in the deep sea, even in the Arctic, where an under-ice clean up would be infinitely more complex than the one underway in the Gulf. But perhaps this time we won't be so easily reassured, so quick to gamble with the few remaining protected havens.<br /><br />Same goes for geoengineering. As climate change negotiations wear on, we should be ready to hear more from Dr Steven Koonin, Obama's undersecretary of energy for science. He is one of the leading proponents of the idea that climate change can be combated with techno tricks like releasing sulphate and aluminium particles into the atmosphere – and of course it's all perfectly safe, just like Disneyland! He also happens to be BP's former chief scientist, the man who just 15 months ago was still overseeing the technology behind BP's supposedly safe charge into deepwater drilling. Maybe this time we will opt not to let the good doctor experiment with the physics and chemistry of the Earth, and choose instead to reduce our consumption and shift to renewable energies that have the virtue that, when they fail, they fail small. As US comedian Bill Maher put it, "You know what happens when windmills collapse into the sea? A splash."<br /><br />The most positive possible outcome of this disaster would be not only an acceleration of renewable energy sources like wind, but a full embrace of the precautionary principle in science. The mirror opposite of Hayward's "If you knew you could not fail" credo, the precautionary principle holds that "when an activity raises threats of harm to the environment or human health" we tread carefully, as if failure were possible, even likely. Perhaps we can even get Hayward a new desk plaque to contemplate as he signs compensation cheques. "You act like you know, but you don't know."<br /><br />Naomi Klein visited the Gulf coast with a film-crew from Fault Lines, a documentary programme hosted by Avi Lewis on al-Jazeera English Television. She was a consultant on the film<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-35385154216918261582010-06-11T18:06:00.002-05:002010-06-11T18:09:55.866-05:00Funny, and Yet, So SadIf you'd like a little respite from the "greatest environmental disaster in the history of the United States," check out this Twitter spoof of <a href="http://twitter.com/bpglobalpr">Beyond Petroleum's PR</a>.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-7800555903212233442010-06-11T18:03:00.001-05:002010-06-11T18:06:07.873-05:00Impossible Things...Here's a great set of stats for those who still would love to believe that things here in the Empire aren't really all that bad, at least compared to other, more benighted nations (hah!). Quoted in its entirety:<br /><br /><br />50 Statistics About The U.S. Economy That Are Almost Too Crazy To Believe<br /><br />Most Americans know that the U.S. economy is in bad shape, but what most Americans don't know is how truly desperate the financial situation of the United States really is. The truth is that what we are experiencing is not simply a "downturn" or a "recession". What we are witnessing is the beginning of the end for the greatest economic machine that the world has ever seen. Our greed and our debt are literally eating our economy alive. Total government, corporate and personal debt has now reached 360 percent of GDP, which is far higher than it ever reached during the Great Depression era. We have nearly totally dismantled our once colossal manufacturing base, we have shipped millions upon millions of middle class jobs overseas, we have lived far beyond our means for decades and we have created the biggest debt bubble in the history of the world. A great day of financial reckoning is fast approaching, and the vast majority of Americans are totally oblivious.<br /><br />But the truth is that you cannot defy the financial laws of the universe forever. What goes up must come down. The borrower is the servant of the lender. Cutting corners always catches up with you in the end.<br /><br />Sometimes it takes cold, hard numbers for many of us to fully realize the situation that we are facing. <br /><br />So, the following are 50 very revealing statistics about the U.S. economy that are almost too crazy to believe....<br /><br />#50) In 2010 the U.S. government is projected to issue almost as much new debt as the rest of the governments of the world combined.<br /><br />#49) It is being projected that the U.S. government will have a budget deficit of approximately 1.6 trillion dollars in 2010.<br /><br />#48) If you went out and spent one dollar every single second, it would take you more than 31,000 years to spend a trillion dollars.<br /><br />#47) In fact, if you spent one million dollars every single day since the birth of Christ, you still would not have spent one trillion dollars by now.<br /><br />#46) Total U.S. government debt is now up to 90 percent of gross domestic product.<br /><br />#45) Total credit market debt in the United States, including government, corporate and personal debt, has reached 360 percent of GDP.<br /><br />#44) U.S. corporate income tax receipts were down 55% (to $138 billion) for the year ending September 30th, 2009.<br /><br />#43) There are now 8 counties in the state of California that have unemployment rates of over 20 percent.<br /><br />#42) In the area around Sacramento, California there is one closed business for every six that are still open.<br /><br />#41) In February, there were 5.5 unemployed Americans for every job opening.<br /><br />#40) According to a Pew Research Center study, approximately 37% of all Americans between the ages of 18 and 29 have either been unemployed or underemployed at some point during the recession.<br /><br />#39) More than 40% of those employed in the United States are now working in low-wage service jobs.<br /><br />#38) According to one new survey, 24% of American workers say that they have postponed their planned retirement age in the past year.<br /><br />#37) Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008. Not only that, more Americans filed for bankruptcy in March 2010 than during any month since U.S. bankruptcy law was tightened in October 2005.<br /><br />#36) Mortgage purchase applications in the United States are down nearly 40 percent from a month ago to their lowest level since April of 1997.<br /><br />#35) RealtyTrac has announced that foreclosure filings in the U.S. established an all time record for the second consecutive year in 2009.<br /><br />#34) According to RealtyTrac, foreclosure filings were reported on 367,056 properties in March 2010, an increase of nearly 19 percent from February, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.<br /><br />#33) In Pinellas and Pasco counties, which include St. Petersburg, Florida and the suburbs to the north, there are 34,000 open foreclosure cases. Ten years ago, there were only about 4,000.<br /><br />#32) In California's Central Valley, 1 out of every 16 homes is in some phase of foreclosure.<br /><br />#31) The Mortgage Bankers Association recently announced that more than 10 percent of all U.S. homeowners with a mortgage had missed at least one payment during the January to March time period. That was a record high and up from 9.1 percent a year ago.<br /><br />#30) U.S. banks repossessed nearly 258,000 homes nationwide in the first quarter of 2010, a 35 percent jump from the first quarter of 2009.<br /><br />#29) For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.<br /><br />#28) More than 24% of all homes with mortgages in the United States were underwater as of the end of 2009.<br /><br />#27) U.S. commercial property values are down approximately 40 percent since 2007 and currently 18 percent of all office space in the United States is sitting vacant.<br /><br />#26) Defaults on apartment building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter of 2010. That was almost twice the level of a year earlier.<br /><br />#25) In 2009, U.S. banks posted their sharpest decline in private lending since 1942.<br /><br />#24) New York state has delayed paying bills totalling $2.5 billion as a short-term way of staying solvent but officials are warning that its cash crunch could soon get even worse.<br /><br />#23) To make up for a projected 2010 budget shortfall of $280 million, Detroit issued $250 million of 20-year municipal notes in March. The bond issuance followed on the heels of a warning from Detroit officials that if its financial state didn't improve, it could be forced to declare bankruptcy.<br /><br />#22) The National League of Cities says that municipal governments will probably come up between $56 billion and $83 billion short between now and 2012.<br /><br />#21) Half a dozen cash-poor U.S. states have announced that they are delaying their tax refund checks.<br /><br />#20) Two university professors recently calculated that the combined unfunded pension liability for all 50 U.S. states is 3.2 trillion dollars. <br /><br />#19) According to EconomicPolicyJournal.com, 32 U.S. states have already run out of funds to make unemployment benefit payments and so the federal government has been supplying these states with funds so that they can make their payments to the unemployed.<br /><br />#18) This most recession has erased 8 million private sector jobs in the United States.<br /><br />#17) Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of 2010.<br /><br />#16) U.S. government-provided benefits (including Social Security, unemployment insurance, food stamps and other programs) rose to a record high during the first three months of 2010.<br /><br />#15) 39.68 million Americans are now on food stamps, which represents a new all-time record. But things look like they are going to get even worse. The U.S. Department of Agriculture is forecasting that enrollment in the food stamp program will exceed 43 million Americans in 2011.<br /><br />#14) Phoenix, Arizona features an astounding annual car theft rate of 57,000 vehicles and has become the new "Car Theft Capital of the World".<br /><br />#13) U.S. law enforcement authorities claim that there are now over 1 million members of criminal gangs inside the country. These 1 million gang members are responsible for up to 80% of the crimes committed in the United States each year.<br /><br />#12) The U.S. health care system was already facing a shortage of approximately 150,000 doctors in the next decade or so, but thanks to the health care "reform" bill passed by Congress, that number could swell by several hundred thousand more.<br /><br />#11) According to an analysis by the Congressional Joint Committee on Taxation the health care "reform" bill will generate $409.2 billion in additional taxes on the American people by 2019.<br /><br />#10) The Dow Jones Industrial Average just experienced the worst May it has seen since 1940.<br /><br />#9) In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.<br /><br />#8) Approximately 40% of all retail spending currently comes from the 20% of American households that have the highest incomes.<br /><br />#7) According to economists Thomas Piketty and Emmanuel Saez, two-thirds of income increases in the U.S. between 2002 and 2007 went to the wealthiest 1% of all Americans.<br /><br />#6) The bottom 40 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.<br /><br />#5) If you only make the minimum payment each and every time, a $6,000 credit card bill can end up costing you over $30,000 (depending on the interest rate).<br /><br />#4) According to a new report based on U.S. Census Bureau data, only 26 percent of American teens between the ages of 16 and 19 had jobs in late 2009 which represents a record low since statistics began to be kept back in 1948.<br /><br />#3) According to a National Foundation for Credit Counseling survey, only 58% of those in "Generation Y" pay their monthly bills on time.<br /><br />#2) During the first quarter of 2010, the total number of loans that are at least three months past due in the United States increased for the 16th consecutive quarter.<br /><br />#1) According to the Tax Foundation’s Microsimulation Model, to erase the 2010 U.S. budget deficit, the U.S. Congress would have to multiply each tax rate by 2.4. Thus, the 10 percent rate would be 24 percent, the 15 percent rate would be 36 percent, and the 35 percent rate would have to be 85 percent.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-40515414401807402052010-06-05T17:37:00.007-05:002010-06-05T18:16:01.275-05:00More...<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiu5NxSL63N3GX9cQNRfArYOe4hN65VVSy7HIe6sT0zm8K1tgBiNQqETff3SHtrQG-9Csmmkr8qjUz7vTr7GByaLdSZKnYmWZXhX7qi-KDo_13BVnjsEJ1G5dJlQxcgiKaAAH0xVg/s1600/o08_23682039.jpg"><img style="cursor:pointer; cursor:hand;width: 320px; height: 210px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiu5NxSL63N3GX9cQNRfArYOe4hN65VVSy7HIe6sT0zm8K1tgBiNQqETff3SHtrQG-9Csmmkr8qjUz7vTr7GByaLdSZKnYmWZXhX7qi-KDo_13BVnjsEJ1G5dJlQxcgiKaAAH0xVg/s320/o08_23682039.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5479427236876718370" /></a><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf9cFl9LERSV-WCfgF_thfI36unthwqM6I7Dk9vDu1i5jBJhvSlvZVdz-eOCirTDTfd5KU2ywQQwvjyd-AW9RbWSJJtKpOezCa3e1ixxez9K1PreO6PDEultZAdvda4Ob9EX-YWw/s1600/o07_23681799.jpg"><img style="cursor:pointer; cursor:hand;width: 320px; height: 237px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf9cFl9LERSV-WCfgF_thfI36unthwqM6I7Dk9vDu1i5jBJhvSlvZVdz-eOCirTDTfd5KU2ywQQwvjyd-AW9RbWSJJtKpOezCa3e1ixxez9K1PreO6PDEultZAdvda4Ob9EX-YWw/s320/o07_23681799.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5479427230027357746" /></a><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWgh-MuobGaIQcLN-lhOia9tLeSulrzrxq_UyrYYZpWJhHVOsCrqnPYHSlSPh312xZv-fD-fPoLqi-PSObZrOADESK7QeDlQbcad1s-4lfDfsQktlOjzXxE-0KbmLgkIAkZ_pNFg/s1600/o06_23680647.jpg"><img style="cursor:pointer; cursor:hand;width: 320px; height: 188px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWgh-MuobGaIQcLN-lhOia9tLeSulrzrxq_UyrYYZpWJhHVOsCrqnPYHSlSPh312xZv-fD-fPoLqi-PSObZrOADESK7QeDlQbcad1s-4lfDfsQktlOjzXxE-0KbmLgkIAkZ_pNFg/s320/o06_23680647.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5479427226218709106" /></a><br /><br />Evil stuff...<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-43919667117067232292010-06-05T17:31:00.003-05:002010-06-05T17:37:28.494-05:00Look In the Mirror....<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQTnC_KnkNzTDCLSL1mQudrH_PH4amemIvbk0B4VSm37M_zlt3LHpNOzsXSS5FPn11XhSTSqfOkuhKktoxa9lVN3cOAn-JA89SdHzjEbfS7bpGnNIL1NSahIElnukDfpUuHaTk9A/s1600/o05_23681817.jpg"><img style="cursor:pointer; cursor:hand;width: 320px; height: 215px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQTnC_KnkNzTDCLSL1mQudrH_PH4amemIvbk0B4VSm37M_zlt3LHpNOzsXSS5FPn11XhSTSqfOkuhKktoxa9lVN3cOAn-JA89SdHzjEbfS7bpGnNIL1NSahIElnukDfpUuHaTk9A/s320/o05_23681817.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5479421838569385954" /></a><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjD_wkjA_QXeGt7ltRNhD1y5pTRcMe50VSIPQoqtZRJPE10s0LORvJSQ-lTiKcuH8mzLo6DVFV6xDnP_Hfy7tYFRSInCfEEJE_OjxdAAySRzX_ww-7s4Bb92yhvqGVQuGExyK3Jcw/s1600/o04_23680993.jpg"><img style="cursor:pointer; cursor:hand;width: 320px; height: 144px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjD_wkjA_QXeGt7ltRNhD1y5pTRcMe50VSIPQoqtZRJPE10s0LORvJSQ-lTiKcuH8mzLo6DVFV6xDnP_Hfy7tYFRSInCfEEJE_OjxdAAySRzX_ww-7s4Bb92yhvqGVQuGExyK3Jcw/s320/o04_23680993.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5479421830823782882" /></a><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgc_wWDVod9-UXzoY7csiDPxdVPJ7BLDZFOBUPfjOaAYRUzJsdRVoqk9pmEpkhhPlie2eQHBc8MJGUMDQswO1wHkF21nJuuf9i0wDnW6Y5sF34xnVGwXHJvhUEnsD4mjcRLUho11Q/s1600/o03_23681141.jpg"><img style="cursor:pointer; cursor:hand;width: 320px; height: 148px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgc_wWDVod9-UXzoY7csiDPxdVPJ7BLDZFOBUPfjOaAYRUzJsdRVoqk9pmEpkhhPlie2eQHBc8MJGUMDQswO1wHkF21nJuuf9i0wDnW6Y5sF34xnVGwXHJvhUEnsD4mjcRLUho11Q/s320/o03_23681141.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5479421821290806418" /></a><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGeADyP29j53c3dnb66xzoGu-hS6Xj-tcXcy2SMkvawb2fhPpr9N6497oSCs__9vUZYm72saV2YAO0LGpPKP_iBQBz8xBmLADJSK5yBmmuGSw1r09MH2ObJ3UTkid8BujLwB9d_g/s1600/o02_23681001.jpg"><img style="cursor:pointer; cursor:hand;width: 320px; height: 220px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGeADyP29j53c3dnb66xzoGu-hS6Xj-tcXcy2SMkvawb2fhPpr9N6497oSCs__9vUZYm72saV2YAO0LGpPKP_iBQBz8xBmLADJSK5yBmmuGSw1r09MH2ObJ3UTkid8BujLwB9d_g/s320/o02_23681001.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5479421817963115154" /></a><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhddTJTnaj2jAXAsiYu436s53x9GWs-DI2RwS5SssSHUhICVtvCu7ic6CY_e47PyKDZHy7QqC-QWWSb9J5RLFf7PdT5EJVXNOGGL9vnkBJHKebfmuVFwRblIPvQavt26Vbw3-bUwA/s1600/o01_23681845.jpg"><img style="cursor:pointer; cursor:hand;width: 320px; height: 198px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhddTJTnaj2jAXAsiYu436s53x9GWs-DI2RwS5SssSHUhICVtvCu7ic6CY_e47PyKDZHy7QqC-QWWSb9J5RLFf7PdT5EJVXNOGGL9vnkBJHKebfmuVFwRblIPvQavt26Vbw3-bUwA/s320/o01_23681845.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5479421808749636610" /></a><br />Smell yourselves...we are all complicit.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-27147084629787145762010-05-30T08:49:00.003-05:002010-05-30T08:51:24.081-05:00What Went Wrong? Here's a List...Shamelessly stolen from sage commentator "Numerian" over at The Agonist...posted in response to the question "where's the outrage" among the US public over, oh, the greatest environmental disaster in US history, and the public's blase response. Nicely done, fellow.<br /><br />It all began in 1980<br /><br />Or right around then, with the election of Ronald Reagan and the opportunity for right-wing extremists to begin reshaping society. Undoing this work will take ten years or more, and that is if society has a brutal awakening regarding what has happened. That is by no means a sure thing considering what was done. Here is a list of "20 Theses" showing what the right wing has wrought, and how difficult it will be to undo all this:<br /><br />1) The elevation of the corporation as the supreme social structure in society, superior to the political process, and in possession of rights normally restricted to the people.<br />2) The creation of an oligarchical command structure consisting of prominent and wealthy businessmen, politicians, media figures, military leaders, intellectual and other consultants, and religious entertainers, who can use political, economic and social power to advance their personal interests over those of society.<br />3) The abolishment of the death tax as society's best and last means of preventing dynastic wealth, and the use of nepotism to advance the careers of the children of oligarchical figures.<br />4) The development of crony capitalism, whereby the oligarchy can exert its corporate power to protect their personal wealth.<br />5) The glorification of the markets and mercantile capitalism as a means of allocating society's wealth and resolving social problems, along with data mining and equity extraction as tools to collect rents from the markets for the benefit of the oligarchical class.<br />6) The rise of the cult of the individual, and the use of personal wealth and conspicuous consumption as a measure of individual merit.<br />7) The identification of poverty and want as personal failures.<br />8) The identification of the government as a source of problems, rather than as a protector of the needy and regulator of the powerful.<br />9) The embrace of globalization as a way to open vast new consumer markets to corporations, despite the cost in living standards to the average individual in developed economies.<br />10) The discovery of debt as a means of ensuring economic growth and masking the deterioration in living standards of the people.<br />11) The suborning of the media by placing them under the control of large corporate and oligarchical powers.<br />12) The use of the big lie and hypocrisy as tools to achieve and wield political or economic power.<br />13) The marginalization of the voting process through gerrymandering of Congressional districts, the use of opaque computer vote-counting techniques, the emphasis on candidate personalities rather than issues, and the dramatic escalation of campaign costs so that only corporate-sponsored candidates may compete.<br />14) The establishment of "enemies within" - liberals, minorities, women, gays, immigrants and others - to replace the external enemy of Communism as a vote-getting device, at least until a new external enemy arose in the form of Islamic extremism.<br />15) The abandonment of historic civil rights, such as habeas corpus, protections against illegal searches, or torture, all in the name of providing "security", as well as the relegation of the Constitution to the status of "a piece of paper", and the rule of law as an outmoded legal construct.<br />16) The elimination of the draft, and the use of mercenaries, to allow for the pursuit of war without inconvenience to the people at large, and for the creation of a military empire abroad.<br />17) The use of patriotism to prevent any questioning of military actions, and the introduction of military techniques on domestic soil, including the creation of a surveillance state.<br />18) The attack on science and rationality, in pursuit of religious and political agendas.<br />19) The development of a celebrity culture as a means of distracting the people from real social problems.<br />20) The hijacking of religion to advance the interests of the powerful and wealthy, including use of the "prosperity gospel" to promote mercantile capitalism, and social markers such as abortion and gay marriage to obtain votes from religious sects.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-49851561022017057952010-05-17T18:13:00.001-05:002010-05-17T20:16:00.341-05:00Oil Spill In The Gulf: Chris HedgesWell, it could be the greatest environmental disaster in the history of humans...but even if it's not, it's still worth getting some perspective from Chris Hedges. If you haven't read War is a Force That Gives Us Meaning, you're missing out. Well, here's his latest, quoted in full:<br /><br />BP and the ‘Little Eichmanns’<br />http://www.truthdig.com/report/item/bp_and_the_little_eichmanns_20100517/<br />Posted on May 17, 2010<br /><br />By Chris Hedges<br /><br />Cultures that do not recognize that human life and the natural world have a sacred dimension, an intrinsic value beyond monetary value, cannibalize themselves until they die. They ruthlessly exploit the natural world and the members of their society in the name of progress until exhaustion or collapse, blind to the fury of their own self-destruction. The oil pouring into the Gulf of Mexico, estimated to be perhaps as much as 100,000 barrels a day, is part of our foolish death march. It is one more blow delivered by the corporate state, the trade of life for gold. But this time collapse, when it comes, will not be confined to the geography of a decayed civilization. It will be global.<br /><br />Those who carry out this global genocide—men like BP’s Chief Executive Tony Hayward, who assures us that “The Gulf of Mexico is a very big ocean. The amount of oil and dispersant we are putting into it is tiny in relation to the total water volume’’—are, to steal a line from Ward Churchill, “little Eichmanns.” They serve Thanatos, the forces of death, the dark instinct Sigmund Freud identified within human beings that propels us to annihilate all living things, including ourselves. These deformed individuals lack the capacity for empathy. They are at once banal and dangerous. They possess the peculiar ability to organize vast, destructive bureaucracies and yet remain blind to the ramifications. The death they dispense, whether in the pollutants and carcinogens that have made cancer an epidemic, the dead zone rapidly being created in the Gulf of Mexico, the melting polar ice caps or the deaths last year of 45,000 Americans who could not afford proper medical care, is part of the cold and rational exchange of life for money.<br /><br />The corporations, and those who run them, consume, pollute, oppress and kill. The little Eichmanns who manage them reside in a parallel universe of staggering wealth, luxury and splendid isolation that rivals that of the closed court of Versailles. The elite, sheltered and enriched, continue to prosper even as the rest of us and the natural world start to die. They are numb. They will drain the last drop of profit from us until there is nothing left. And our business schools and elite universities churn out tens of thousands of these deaf, dumb and blind systems managers who are endowed with sophisticated skills of management and the incapacity for common sense, compassion or remorse. These technocrats mistake the art of manipulation with knowledge. <br /><br />“The longer one listened to him, the more obvious it became that his inability to speak was closely connected with an inability to think, namely, to think from the standpoint of somebody else,” Hannah Arendt wrote of “Eichmann in Jerusalem.” “No communication was possible with him, not because he lied but because he was surrounded by the most reliable of all safeguards against words and the presence of others, and hence against reality as such.”<br /><br />Our ruling class of technocrats, as John Ralston Saul points out, is effectively illiterate. “One of the reasons that he is unable to recognize the necessary relationship between power and morality is that moral traditions are the product of civilization and he has little knowledge of his own civilization,” Saul writes of the technocrat. Saul calls these technocrats “hedonists of power,” and warns that their “obsession with structures and their inability or unwillingness to link these to the public good make this power an abstract force—a force that works, more often than not, at cross-purposes to the real needs of a painfully real world.”<br /><br />BP, which made $6.1 billion in profits in the first quarter of this year, never obtained permits from the National Oceanic and Atmospheric Administration. The protection of the ecosystem did not matter. But BP is hardly alone. Drilling with utter disregard to the ecosystem is common practice among oil companies, according to a report in The New York Times. Our corporate state has gutted environmental regulation as tenaciously as it has gutted financial regulation and habeas corpus. Corporations make no distinction between our personal impoverishment and the impoverishment of the ecosystem that sustains the human species. And the abuse, of us and the natural world, is as rampant under Barack Obama as it was under George W. Bush. The branded figure who sits in the White House is a puppet, a face used to mask an insidious system under which we as citizens have been disempowered and under which we become, along with the natural world, collateral damage. As Karl Marx understood, unfettered capitalism is a revolutionary force. And this force is consuming us.<br /><br />Karl Polanyi in his book “The Great Transformation,” written in 1944, laid out the devastating consequences—the depressions, wars and totalitarianism—that grow out of a so-called self-regulated free market. He grasped that “fascism, like socialism, was rooted in a market society that refused to function.” He warned that a financial system always devolved, without heavy government control, into a Mafia capitalism—and a Mafia political system—which is a good description of our corporate government. Polanyi warned that when nature and human beings are objects whose worth is determined by the market, then human beings and nature are destroyed. Speculative excesses and growing inequality, he wrote, always dynamite the foundation for a continued prosperity and ensure “the demolition of society.”<br /><br />“In disposing of a man’s labor power the system would, incidentally, dispose of the physical, psychological, and moral entity ‘man’ attached to that tag,” Polanyi wrote. “Robbed of the protective covering of cultural institutions, human beings would perish from the effects of social exposure; they would die as victims of acute social dislocation through vice, perversion, crime, and starvation. Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, military safety jeopardized, the power to produce food and raw materials destroyed. Finally, the market administration of purchasing power would periodically liquidate business enterprise, for shortages and surfeits of money would prove as disastrous to business as floods and droughts in primitive society. Undoubtedly, labor, land, and money markets are essential to a market economy. But no society could stand the effects of such a system of crude fictions even for the shortest stretch of time unless its human and natural substance as well as its business organizations was protected against the ravages of this satanic mill.”<br /><br />The corporate state is a runaway freight train. It shreds the Kyoto Accords in Copenhagen. It plunders the U.S. Treasury so speculators can continue to gamble with billions in taxpayer subsidies in our perverted system of casino capitalism. It disenfranchises our working class, decimates our manufacturing sector and denies us funds to sustain our infrastructure, our public schools and our social services. It poisons the planet. We are losing, every year across the globe, an area of farmland greater than Scotland to erosion and urban sprawl. There are an estimated 25,000 people who die every day somewhere in the world because of contaminated water. And some 20 million children are mentally impaired each year by malnourishment.<br /><br />America is dying in the manner in which all imperial projects die. Joseph Tainter, in his book “The Collapse of Complex Societies,” argues that the costs of running and defending an empire eventually become so burdensome, and the elite becomes so calcified, that it becomes more efficient to dismantle the imperial superstructures and return to local forms of organization. At that point the great monuments to empire, from the Sumer and Mayan temples to the Roman bath complexes, are abandoned, fall into disuse and are overgrown. But this time around, Tainter warns, because we have nowhere left to migrate and expand, “world civilization will disintegrate as a whole.” This time around we will take the planet down with us.<br /><br />“We in the lucky countries of the West now regard our two-century bubble of freedom and affluence as normal and inevitable; it has even been called the ‘end’ of history, in both a temporal and teleological sense,” writes Ronald Wright in “A Short History of Progress.” “Yet this new order is an anomaly: the opposite of what usually happens as civilizations grow. Our age was bankrolled by the seizing of half the planet, extended by taking over most of the remaining half, and has been sustained by spending down new forms of natural capital, especially fossil fuels. In the New World, the West hit the biggest bonanza of all time. And there won’t be another like it—not unless we find the civilized Martians of H.G. Wells, complete with the vulnerability to our germs that undid them in his War of the Worlds.” <br /><br />The moral and physical contamination is matched by a cultural contamination. Our political and civil discourse has become gibberish. It is dominated by elaborate spectacles, celebrity gossip, the lies of advertising and scandal. The tawdry and the salacious occupy our time and energy. We do not see the walls falling around us. We invest our intellectual and emotional energy in the inane and the absurd, the empty amusements that preoccupy a degenerate culture, so that when the final collapse arrives we can be herded, uncomprehending and fearful, into the inferno.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-32287918522183872072010-05-13T09:01:00.002-05:002010-05-13T09:03:25.887-05:00Complexity and Sustainability: Joseph TainterThis paper, quoted in its entirety, deserves a much larger audience. Too bad Chaos has been so lax lately, that readers have probably fled! Oh well...anyhow, here is the eminent authority of collapse, on sustainability:<br /><br />Human Resource Use: Timing and Implications for Sustainability<br />Joseph A. Tainter<br />Department of Environment and Society, Utah State University, Logan, Utah 84322, U.S.A.<br /><br />____________________________________________________________________________________________________<br /><br />Few questions of history have been more enduring than how today’s complex societies evolved from the foraging bands of our ancestors. While this might seem of academic interest, it has important implications for anticipating our future. Our understanding of sustainability depends to a surprising degree on our understanding of the human past. My purposes today are to show that the conventional understandings of cultural evolution are untenable, as are assumptions about sustainability that follow from them, and to present a different approach to assessing our future.<br /><br />Cultural complexity is deeply embedded in our contemporary self image. Colloquially it is known by the more common term “civilization,” which we believe our ancestors achieved through the phenomenon called “progress.” The concepts of civilization and progress have a status in the cosmology of industrial societies that amounts to what anthropologists call “ancestor myths.” Ancestor myths validate a contemporary social order by presenting it as a natural and sometimes heroic progression from earlier times.<br /><br />Social scientists label this a “progressivist” view. It supposes that cultural complexity is intentional, that it emerged through the inventiveness of our ancestors. Progressivism is the dominant ideology of free-market societies. But inventiveness is not a sufficient explanation for cultural complexity, which requires facilitating circumstances. What were those circumstances? Prehistorians once thought they had the answer: The discovery of agriculture gave our ancestors surplus food and, concomitantly, free time to invent urbanism and the things that comprise “civilization”–cities, artisans, priesthoods, kings, aristocracies, and all of the other features of early states.<br /><br />The progressivist view posits a specific relationship between resources and complexity. It is that complexity develops because it can, and that the factor facilitating this is surplus energy. Energy precedes complexity and allows it to emerge. There are, however, significant reasons to doubt whether surplus energy has actually driven much of cultural evolution.<br /><br />One strand of thought that challenges progressivism emerged in the 18th and 19th centuries in the works of Wallace (1761), Malthus (1798), and Jevons. The economist Kenneth Boulding derived from Malthus’s essay on population three theorems: the Dismal Theorem, the Utterly Dismal Theorem, and the moderately cheerful form of the Dismal Theorem. The Utterly Dismal Theorem directly challenges the progressivist view:<br /><br />Any technical improvement can only relieve misery for a while, for as long as misery is the only check on population, the improvement will enable population to grow, and will soon enable more people to live in misery than before. The final result of improvements, therefore, is to increase the equilibrium population, which is to increase the sum total of human misery (Boulding, 1959: vii [emphases in original]).<br /><br />The implication of this strain of thought is that humans have rarely had surplus energy. Surpluses are quickly dissipated by growth in consumption. Since humans have rarely had surpluses, the availability of energy cannot be the primary driver of cultural evolution.<br /><br />Beyond a Malthusian view, there is another factor that undermines progressivism. It is that complexity costs. In any living system, increased complexity (involving differentiation in structure and increasing organization) carries a metabolic cost. In non-human species this is a straightforward matter of additional calories. Among humans the cost is calculated in such currencies as resources, effort, time, or money, or by more subtle matters such as annoyance. While humans find complexity appealing in spheres such as art, music, or architecture, we usually prefer that someone else pay the cost. We are averse to complexity when it unalterably increases the cost of daily life without a clear benefit to the individual or household. Before the development of fossil fuels, increasing the complexity and costliness of a society meant that people worked harder.<br /><br />The development of complexity is thus a paradox of human history. Over the past 12,000 years, we have developed technologies, economies, and social institutions that cost more labor, time, money, energy, and annoyance, and that go against our aversion to such costs. Why, then, did human societies ever become more complex?<br /><br />At least part of the answer is that complexity is a basic problem-solving tool. Confronted with problems, we often respond by developing more complex technologies, establishing new institutions, adding more specialists or bureaucratic levels to an institution, increasing organization or regulation, or gathering and processing more information. While we usually prefer not to bear the cost of complexity, our problem-solving efforts are powerful complexity generators. All that is needed for growth of complexity is a problem that requires it. Since problems continually arise, there is persistent pressure for complexity to increase.<br /><br />Cultural complexity can be viewed as an economic function. Societies and institutions invest in problem solving, undertaking costs and expecting benefits in return. In problem-solving systems, inexpensive solutions are adopted before more complex and expensive ones. In the history of human food-gathering and production, for example, labor-sparing hunting and gathering gave way to more labor-intensive agriculture, which in some places has been replaced by industrial agriculture that consumes more energy than it produces. We produce minerals and energy whenever possible from the most economical sources. Our societies have changed from egalitarian relations, economic reciprocity, ad hoc leadership, and generalized roles to social and economic differentiation, specialization, inequality, and full-time leadership. These characteristics are the essence of complexity, and they increase the costliness of any society.<br /><br />In the progressivist view, surplus energy precedes and facilitates the evolution of complexity. Certainly this is sometimes true: There have been occasions when humans adopted energy sources of such great potential that, with further development and positive feedback, there followed great expansions in the numbers of humans and the wealth and complexity of societies. These occasions have, however, been so rare that we designate them with terms signifying a new era: the Agricultural Revolution and the Industrial Revolution. It is worth noting that these unusual transitions have not resulted from unbridled human creativity. Rather, they emerged from solutions to problems of resource shortages, and were adopted reluctantly because initially they created diminishing returns on effort in peoples’ daily lives.<br /><br />Most of the time, cultural complexity increases from day-to-day efforts to solve problems. Complexity that emerges in this way will usually appear before there is additional energy to support it. Rather than following the availability of energy, cultural complexity often precedes it. Complexity thus compels increases in resource production. This understanding of the temporal relationship between complexity and resources has implications for sustainability that diverge from what is commonly assumed. I will explore these implications shortly. It is useful first to present a historical case study, the Western Roman Empire, that illustrates these points.<br /><br />The Roman Empire collapsed in the mid 5th century A.D., but its last 200 years of existence had been a reprieve. It had been nearly destroyed in the 3rd century. In the half-century from 235-284 the empire was repeatedly breached by invasions of Germanic peoples from the north and the Persians from the east. When these invaders were not being repelled, Roman armies were fighting each other in the service of would-be emperors. Many cities were sacked and productive lands devastated. For a time, rival empires broke away in the east and the west. It seemed that the Roman Empire would not survive much longer.<br /><br />The Roman government had a clear sustainability goal: the survival of the empire. In response to the crises, the emperors Diocletian and Constantine, in the late third and early fourth centuries, designed a government that was larger, more complex, and more highly organized. They doubled the size of the army. This was very costly. To pay for this sustainability effort, the government taxed its citizens more heavily, conscripted their labor, and dictated their occupations.<br /><br />With the rise in taxes, population could not recover from plagues in the second and third centuries. There were chronic shortages of labor. Marginal lands went out of cultivation. Faced with taxes, peasants would abandon their lands and flee to the protection of a wealthy landowner. The Roman Empire survived the 3rd century crisis and achieved two centuries of sustainability, but at the long-term cost of consuming its capital resources: producing lands and peasant population. When crises emerged again in the late 4th century, the empire lacked the resources to respond adequately and in time collapsed.<br /><br />The Roman Empire is a single case study in complexity and problem solving, but it is an important and representative one. It illustrates the basic process by which societies increase in complexity. Societies adopt increasing complexity to solve problems, becoming at the same time more costly. In the normal course of economic evolution, this process at some point will produce diminishing returns. Once diminishing returns set in, a problem-solving institution must either find new resources to continue the activity, or fund the activity by reducing the share of resources available to other economic sectors. The latter is likely to produce economic contraction, popular discontent, and eventual collapse. This was the fate of the Western Roman Empire.<br /><br />This understanding of complexity and resources has implications for understanding sustainability. Both popular and academic discourse commonly assume that (a) future sustainability requires that industrial societies consume a lower quantity of resources than is now the case, and (b) sustainability will result automatically if we do so. Sustainability emerges, in this view, as a passive consequence of consuming less. Thus sustainability efforts are commonly focused on reducing consumption through voluntary or enforced conservation, perhaps involving simplification, and/or through improvements in technical efficiencies.<br /><br />The common perspective on sustainability follows logically from the progressivist view that resources precede and facilitate innovations that increase complexity. Complexity, in this view, is voluntary. Human societies become more complex by choice. By this reasoning, we should be able to forego complexity and the resource consumption that it entails. Progressivism leads to the notion that societies can deliberately reduce their use of resources and thereby achieve sustainability.<br /><br />The fact that complexity and costliness increase through mundane problem solving suggests a different and startling conclusion: Contrary to what is typically advocated as the route to sustainability, it is usually not possible for a society to reduce its consumption of resources voluntarily over the long term. To the contrary, as problems great and small inevitably arise, addressing these problems requires complexity and resource consumption to increase. As illustrated by the Roman Empire and other cases, this has commonly been the case.<br /><br />Many advocates of sustainability will find it disturbing that long-term conservation is not possible. Naturally we must ask: Are there alternatives to this process? Regrettably, no simple solutions are evident. Consider some of the approaches commonly advocated:<br /><br />1. Voluntarily Reduce Resource Consumption. While this may work for a time, its longevity as a strategy is constrained by the fact that societies increase in complexity to solve problems. Resource production must grow to fund the increased complexity. To implement voluntary conservation long term would require that a society be either uniquely lucky in not being challenged by problems, or that it not address the problems that confront it.<br /><br />2. Employ the Price Mechanism to Control Resource Consumption. This is currently the laissez-faire strategy of industrialized nations. Since humans don’t commonly forego affordable consumption of desired goods and services, economists consider it more effective than voluntary conservation. Both approaches, however, lead eventually to the same outcome: As problems arise, resource consumption must increase at the societal level even if consumers as individuals purchase less.<br /><br />3. Ration Resources. Because of its unpopularity, rationing is possible in democracies only for clear, short-term emergencies. This is illustrated by the reactions to rationing in England and the United States during World War II. Moreover, rationed resources may become needed to solve societal problems, belying any attempt to conserve through rationing. Something like this can be seen in the fiscal stimulus programs enacted recently.<br /><br />4. Reduce Population. While this would reduce aggregate resource consumption temporarily, as a long-term strategy it has the same fatal flaw: Problems will emerge that require solutions, and those solutions will compel resource production to grow.<br /><br />5. Hope for Technological Solutions. I sometimes call this a faith-based approach to our future. Members of industrialized societies are socialized to believe that we can always find a technological solution to resource problems. Technology, within the framework of this belief, will presumably allow us continually to reduce our resource consumption per unit of material well-being. Conventional economics teaches that to bring this about we need only the price mechanism and unfettered markets. The flaw here was pointed out by William Stanley Jevons: As technological improvements reduce the cost of using a resource, total consumption will actually increase.<br /><br />In conclusion, sustainability is not the achievement of stasis. It is not a passive consequence of having fewer humans who consume more limited resources. One must work at being sustainable. The challenges that any society (or other institution) might confront are, for practical purposes, endless in number and infinite in variety. This being so, sustainability is a matter of solving problems.<br /><br />In the conventional view, complexity follows energy. If so, then we should be able to forego complexity voluntarily and reduce our consumption of the resources that it requires. This approach to sustainability implicitly sees the future as a condition of stasis with no challenges.<br /><br />In actuality, major infusions of surplus energy are rare in human history. More commonly, complexity increases in response to problems. Complexity emerging through problem solving typically precedes the availability of energy, and compels increases in its production. Complexity is not something that we can ordinarily choose to forego.<br /><br />Applying this understanding leads to two conclusions. The first is that the solutions commonly recommended to promote sustainability–conservation, simplification, pricing, and innovation–can do so only in the short term. Secondly, long-term sustainability depends on solving major societal problems that will converge in coming decades, and this will require increasing complexity and energy production. Sustainability is not a condition of stasis. It is, rather, a process of continuous adaptation, of perpetually addressing new or ongoing problems and securing the resources to do so.<br /><br />It is useful to think of sustainability in the metaphor of an athletic game: It is possible to “lose”–that is, to become unsustainable, as happened to the Western Roman Empire. But the converse does not hold. Because we continually confront challenges, there is no point at which a society has “won”–become sustainable in perpetuity, or at least for a very long time. Success, rather, consists of staying in the game.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-84834070093599435842010-03-30T07:51:00.002-05:002010-03-30T07:54:28.826-05:00An Interview With Dr. BartlettHere's a nice interview with our favorite Malthusian, Dr. Albert Bartlett, Professor Emeritus, Physics, University of Colorado at Boulder. Enjoy!<br /><br />I have to thank Jeremy Grantham for referencing Albert Bartlett’s talk, “Arithmetic, Population, & Energy”, in his semi annual letter to partners. It inspired me to track down Professor Bartlett and interview him for our readers.<br /><br />Introduction/Background<br /><br />Professor Albert Bartlett Emeritus Professor of Physics at the University of Colorado at Boulder. In the public space Professor Bartlett is most well known for his lecture titled Arithmetic, Population, and Energy. A Lecture he has given over 1,600 times since September, 1969. Bartlett joined the faculty of the University of Colorado in Boulder in September 1950. His B.A. degree in physics is from Colgate University (1944) and his M.A. and Ph.D. degrees in physics are from Harvard University (1948), (1951). In 1978 he was national president of the American Association of Physics Teachers. He is a Fellow of the American Physical Society and of the American Association for the Advancement of Science. In 1969 and 1970 he served two terms as the elected Chair of the four-campus Faculty Council of the University of Colorado.<br /><br />Question & Answers (Copyright 2009-2010 Miguel Barbosa & Albert Bartlett)<br /><br />You have become very famous for your talk, “Arithmetic, Population, and Energy.” What motivated you to create this talk?<br /><br />In the late 1960’s I began to realize that people didn’t understand the large numbers that result from steady growth rates. So, forty years ago I developed the talk; I’ve given it an average of once every 8.7 days for 40 years.<br /><br /><br /><br /><br /><br />Why do you think people have such difficulty understanding (compounding) growth rates?<br /><br />It’s arithmetic; people don’t like arithmetic. You hear it at cocktail parties. People say, “Oh, I’m terrible at arithmetic.” You never hear anyone say “I can’t read or write.” My impression is that after my talk people understand it very quickly. Years ago I gave it very slowly and in two parts to junior high school students. After the second part, two little kids came up and said, “We can understand it, why can’t grownups?”<br /><br />You’re a physicist; how did you become interested in physics? And how did you land a job at Los Alamos?<br /><br />I had a high school physics course that I enjoyed very much. After high school I went to college, but dropped out to work on steamboats in the Great Lakes. After working for a while, I transferred to Colgate University, took my first college physics class, did well, and stuck with it. Richard Feynman once said, “If there was anything more fun than physics I’d be doing it.”…He couldn’t seem to find anything more fun. The same applies to me.<br /><br />Did you meet Richard Feynman?<br /><br />Yes. I was at Los Alamos during the war…whenever he would lecture the entire lab would stop to listen to him. He was simultaneously a great physicist and a great clown.<br /><br />What about Niels Bohr? Tell us about your experiences meeting with him.<br /><br />“I was sitting at the lunch counter and Niels Bohr sat down beside me. I was amazed.” What was it like being around these scientists? I was in constant awe. I’d often ask myself how ended up in such a place. I barely had a Bachelors degree. But that was sufficient to get me into these secret meetings. I went religiously to those meeting and one thing led to another.<br /><br />Do you think most politicians understand growth rates, but prefer to look the other way?<br /><br />These are chamber of commerce types: promoters, builders, architects. Their business is promoting growth. But the single thing to note is that, both at the community level and national level, growth doesn’t pay for itself. The more you grow the greater your debt load. Colorado has had decades of wild and largely uncontrolled growth and is now practically bankrupt. People become fed up with the constant increases in taxes needed to pay the costs of growth and they vote for tax limitation measures. Unfortunately, the growth promoters seem to find ways around these limitations, so the growth continues and the consequent problems escalate rapidly. We can see this happening in California and we have a similar situation brewing in Colorado.<br /><br />What you are implying is that true growth would lead to profitability and thus state governments could accumulate reserves?<br /><br />Rational people (leaders) would have reserves for lean years. In fact this reminds me – there’s a little book called, “Better Not Bigger” by Eben Fodor. He looks at the municipal costs of growth in various communities. He estimates that every new house built in Oregon costs the Oregon taxpayer something in the order of $25,000 in costs not paid by taxes on the construction of the home itself.<br /><br />This reminds us of utilities companies…<br /><br />Utilities right now are fighting around the country to get more coal and nuclear plants around the country. What they are really fighting for, and what they normally get, is the right to tax customers for the costs of planning and construction. . In a more rational world the investors would bear these responsibilities, and when the plant was finished you could figure the cost into the rate system- so that the people that built it would be reimbursed. Now, rather than going out and borrowing money they want to get money from rate payers while they are planning. Often state regulators are allowing utilities to charge payers for planning costs- and it isn’t even clear that the plants will be built. This is a perpetual growth promoting situation.<br /><br />If companies grew for very long periods at high rates (say 15% plus) within a matter of years we would all be working forthem.<br /><br />Some investors fail to realize that growth eventually undoes itself. That is to say growth is mean reverting. For you or me any additional physical growth would either be; obesity or cancer. There’s a time to grow, yet when you reach maturity any further growth is detrimental.<br /><br />Your book titled, “The Essential Exponential for the Future of our Planet,” contains a chapter called, “Democracy Cannot Survive Overpopulation,” in which you argue convincingly that overpopulation, by raising the number of constituents per elected official, makes it harder for individuals to gain access to representatives and have a voice in politics. Also, overpopulation breeds government regulation to cope with problems caused by population pressure.<br /><br />Yes, this is a very important issue. To be exact, I took the title of the chapter from Issac Asimov. Here’s an example: When I moved to Boulder Colorado (in 1950) the population was 20,000 and there were 9 city members on the council. Today the population is 100,000 and there are still only 9 city members on the council. So in effect today we only have 20% of the democracy we use to have in 1950.<br /><br />In essence, it’s harder for the individual to have access to a representative?<br /><br />Of course. In the decade of the 1990’s the US population grew by 13.1%, while the number of members in the House of Representatives didn’t grow at all. So we can say that at the national level, democracy declined by 13.1% Furthermore, the Constitution requires that the government perform what is called redistricting. This happens after every census. Redistricting ensures that the populations of districts are equal across the country. In our example, the average district needed to have 13.1% more constituents after the 2000 census than after the 1990’s census. This means that every district went from approximately 600,000 constituents to approximately 700,000 constituents. Compare that with the first Congress where the makeup was 30,000 constituents per member of Congress. It’s true that women didn’t vote and thus the electorate makeup was different, but you can imagine one person in Congress representing 30,000. It’s much harder to imagine one person representing 700,000 people. Every district in the country had to grow by 100,000 people. There’s no way you can represent that many people. So it’s much easier as a politician to take your ideas from the lobbyist who has plenty of money. As a result we now often get one dollar-one vote versus what use to be one person-one vote.<br /><br />Are you suggesting there’s a crowding out effect? That is to say, in a time of many important issues (global warming, health care, and financial crises) people are alienated?<br /><br />Yes, that’s right.<br /><br />You say the terms “sustainable” and “sustainability” are popularly used to describe “activities that are ecologically laudable,” but unsustainable. How can the average reader interested in learning about sustainability decide whether publications are seeking to illuminate or obfuscate? Slogans are seemingly designed to “sustain” optimistm and vagueness.<br /><br />There are a few organizations devoted to alert people of the dangers of population growth. There’s a group called Californians for Population Stabilization. There’s a real good group in Washington called Negative Population Growth; they have the best series of monographs of any group I’m aware of. You can find them on the web at npg.org.<br /><br />How do you approach reading periodicals that present confusing growth rates?<br /><br />I approach periodicals with skepticism and look for absurdities. Remember that politicians will try to claim that there isn’t a conflict between saving the environment and smart growth. Unfortunately, both smart growth and dumb growth destroy the environment. The only difference is that smart growth destroys the environment with good taste. It’s like buying a ticket on the Titanic, if you’re smart you go first class. But the outcome is the same…the boat still sinks.<br /><br />Well if the outcome is the same, then most sustainable solutions are pseudosolutions. Tells us about pseudosolutions…<br /><br />It’s so discouraging when you see Al Gore’s book & film, “An Inconvenient Truth.” Early in his book he says population growth has changed our whole way of life. With those words he is saying that he understands that population growth is the cause of the problem. Unfortunately at the end of his book when outlining the things you can do to avoid environmental problems (changing bulbs etc), Gore never mentions curbing population growth. This behavior is what Mark Twain would call a “silent lie.” If you have information that would help other people if you shared it, but you kee it hidden. Then you are guilty of what Mark Twain would call a silent lie.<br /><br />In 1994, you wrote “In the manner of Alice in Wonderland, and without regard for accuracy or consistency, ‘sustainability’ seems to have been redefined flexibly to suit a variety of wishes and conveniences.” How are you seeing sustainability used by current politicians and businesses? Has it gotten worse? And what are the most recent clear examples of misuse of sustainability by politicians?<br /><br />I couldn’t quantify it, but I believe so. Everything now is called “sustainable.” It’s the “in” thing to do, whether it’s sustainable or not.<br /><br />According to your interpretation of the Tragedy of the Commons (Hardin 1968) your writings suggest that there will always be large opposition to programs of making population growth pay for itself. Those who profit from (uneconomic)growth will use their considerable resources to convince the community that the community should pay the costs of growth. How does the tragedy of the commons relate to launching wars?<br /><br />The world’s oceans are a perfect example of the tragedy of the commons. By and large they are unmanaged commons and they are destroyed by high tech fisheries. This is tragic for local fishermen who have lived off the oceans for centuries. Small conflicts over resources can lead to wars.”<br /><br />When it comes to war… look at Iraq. The poor GIs getting shot and killed are paying an enormous cost. Bush seems to think there is a law of conservation of terrorists, that is to say, “There are a certain number of terrorists in the world and you kill them all and you solve the problem.” Unfortunately, this doesn’t solve the problem at all. We aren’t reducing terrorism; rather, we are increasing it.<br /><br />Where does the role of economist, Kenneth Boulding, play into the topic of population growth?<br /><br />He’s one of the few economists that I can respect. He was a colleague at the University of Colorado. He is known for saying that, “Anyone who thinks that steady growth can continue indefinitely, is either a madman or an economist.” I once asked Boulding if he said that, he gave me a funny smile and said, “Yes, I think so.” Boulding’s three laws are related to sustainability. In fact, in my opinion, they say it all. The second law is the important one. It says, the solution to problems create more problems. “The main source of problems is solutions.<br /><br />Excerpt of Boulding’s Three Laws:<br /><br />First Theorem: “The Dismal Theorem” If the only ultimate check on the growth of population is misery, then the population will grow until it is miserable enough to stop its growth.<br /><br />Second Theorem: “The Utterly Dismal Theorem” This theorem states that any technical improvement can only relieve misery for a while, for so long as misery is the only check on population, the [technical] improvement will enable population to grow, and will soon enable more people to live in misery than before. The final result of [technical] improvements, therefore, is to increase the equilibrium population which is to increase the total sum of human misery.<br /><br />Third Theorem: “The moderately cheerful form of the Dismal Theorem” Fortunately, it is not too difficult to restate the Dismal Theorem in a moderately cheerful form, which states that if something else, other than misery and starvation, can be found which will keep a prosperous population in check, the population does not have to grow until it is miserable and starves, and it can be stably prosperous. Until we know more, the Cheerful Theorem remains a question mark. Misery we know will do the trick. This is the only sure- fire automatic method of bringing population to equilibrium. Other things may do it.<br /><br />This is reminiscent of Eric Sevareid’s Law – The Chief Cause of Problems is Solutions. In a society as complex as ours is there a way around this issue?<br /><br />I don’t believe there is a way around this issue. In a society as complex as ours it’s impossible to anticipate the interaction of all agents. It’s very much like the operation of the National Electric Grid. No one knows exactly how it operates. So if a squirrel crosses the wrong power line the east coast can go without power. These things do in fact happen. More importantly, because our system is so complex it’s vulnerable. If we are talking about a war on terror we wouldn’t want such a vulnerable system.<br /><br />In preparation for this interview you sent us a book review. My favorite quote from this review is the following: “A society that is totally dependent on high tech for the functioning of every aspect of the lives of its people is vulnerable to disruption by acts of God and acts of people. The complexities of our pres¬ent infrastructure predictably lead to unpredictable failures. More complex infrastructures anticipated for the future will probably experience larger unpredictable failures.”<br /><br />There is big talk in Europe right now about putting large fields of solar collectors in the Sahara Desert and then transmitting the power under the Mediterranean Sea to Europe. It looks good on paper, but the long extended transmission lines will be vulnerable to the forces of nature and to terrorists. A small group of individuals could deprive Europe of a big fraction of its electricity for long periods of time. “Insanity” is the only word I can think of to describe plans to build this incredibly expensive system that is so transparently vulnerable to sabotage.”<br /><br />In other words, complex infrastructure(s) translate into unpredictable failures. When it comes to alternative energy, most solutions are complex. What’s your opinion of alternative energy sources?<br /><br />If alternative energies are to replace existing technologies very sizable investments would be required. I often wonder if there is enough capital in the world to replace this existing energy production, that is, to go from coal & natural gas to geothermal, wind or or solar. I don’t know the answer to the investment question.<br /><br />What I do know is that it’s very difficult to manage wind energy. Currently, coal plants provide base loads and then natural gas (or hydroelectric) turbines are used to meet peak loads. But when you factor wind into your management scheme things become very difficult. You don’t know where the wind is blowing, how much, when, or in what direction it’s blowing. Then you have to factor this into your management. With 5% of your electricity coming from wind this “might” be manageable but to increase it to 50% or 60% it’s very difficult. Most people don’t pay attention to the difficulties of managing electrical demand.<br /><br /><br /><br /><br /><br />Is the culprit of global warming population growth? Are you suggesting that unless we have major breakthroughs in technology population growth will undermine most current energy initiatives?<br /><br />Al Gore understands that population growth is the problem. But he doesn’t recommend doing anything to reduce overpopulation which is the cause of the problems.. It is politically incorrect to talk about population growth. The last US president that worried about population was Richard Nixon. He charted a major study called “The Rockefeller Commission Report.” This study was put together by some very talented people. Their conclusion was simple; they couldn’t see any benefit to further population growth in the US. Unfortunately, the study was put on the shelf and forgotten.<br /><br /><br /><br />This reminds me of the Red Queen…the more she runs the more the walls/scenery catch up. What can we do?<br /><br />This is something Malthus understood years ago. We still have economists and politicians that claim that Malthus was wrong. This is nonsense. I’ve read Malthus three times and he presents population problems very clearly. The message of Malthus, translated to today’s problems would be something like this: “Population growth has the potential to outstrip the growth in production of any of the resources that are necessary to sustain our population. This is as true today as it was a hundred years ago when he wrote his essay.<br /><br />I’d like to ask you a question from the title of your own piece, “Why have scientists succumbed to political correctness?”<br /><br />I don’t know. I think there is a widespread feeling amongst scientists and certainly among the population that science and technology will save us, so why worry about it? Here’s a story… I was once met with a state senator; he said to me “I’m not worried about running out of petroleum, you (pointing to me) scientists will figure out what ever we need.” So I asked him what was the last new source of energy scientists found? He didn’t have an answer,<br /><br />so I suggested nuclear power – the process was discovered in Germany in 1939. Enrico Fermi had a reactor operating in 1942. By 1956 we had first commercial nuclear power reactor in this country. Since then, we have spent billions of public and private dollars and we only receive 20% of our electricity from nuclear power. Innovation on the large scale required by our overpopulated society will take time and costs billions of dollars..<br /><br />Even if science/technology develops the appropriate energy solutions. These solutions would have to be developed and implemented at the same rate as the population growth?<br /><br />What you must realize is that technological improvements by design allow for and encourage more growth. This is like prescribing aspirin for cancer. As for the timing you’re absolutely right: while technology develops populations keep compounding. And because the scale is so large it’s impossible to implement changes quick enough. In other words, it’s very difficult to get 30% of the population using hybrid electric cars in anything short of 20 years.<br /><br />Let’s talk about employment. Does growth solve unemployment problems?<br /><br />If creating jobs reduced unemployment, Colorado would have negative unemployment (or whatever that means). For decades we have been creating jobs and we still have unemployment. No matter how many jobs you create you can’t get off unemployment. This is a consequence of people moving around – a constitutionally protected right.<br /><br />Newly created jobs in a community temporarily lowers the unemployment rate (say from 5% to 4%), but then people move into the community to restore the unemployment rate to its earlier higher value (of 5%). Yet this is 5% of the no larger population, so more individuals are out of work than before.<br /><br />What’s your opinion of national unemployment rates and the recent crisis?<br /><br />For years, we have promoted an insane policy of exporting jobs and importing people. So now it’s catching up with us. Any country that has to import people to do the work of the country is unsustainable. One cannot sustain a world in which some regions have high standards of living while others have low standards of living. All countries cannot simultaneously be net importers of carrying capacity. World trade involves the exportation and importation of carrying capacity.<br /><br />Tell us more about carrying capacity and trade.<br /><br />Carrying capacity is a measure of how many people can be supported indefinitely. Therefore if any fraction of global warming is due to the actions of humans, this alone proves that human populations are larger than the carrying capacity of the earth. Sustainability requires that the size of the population be less than or equal to the carrying capacity of the ecosystem for the desired standard of living.<br /><br />Many economists have raised concerns over countries particularly European countries which have experienced zero population growth rates (or negative population rates). They claim that these rates will burden “entitlements” such as social security… So clearly the answer is to have higher birth rates…unfortunately this only exacerbates the problems of “sustainability.” What’s your take?<br /><br />Social Security and such projects are Ponzi schemes. They depend on having more and more people paying every year or they collapse. In effect, Social Security will collapse when there aren’t enough young workers. Getting the population back on the growth curve isn’t a long term answer. That makes all the other problems more difficult. So what you have to do is refinance social security – by raising taxes, reducing benefits, or altering the retirement age.<br /><br />It’s so sad to see European politicians offering bonuses to couples to have more children because they are afraid of slowing growth rates. What people don’t realize is that declining growth rates are the way to sustainability.<br /><br />You talk about how zero or negative population growth rates translate into higher standards of living. Can you comment on this?<br /><br />Thirty years ago when the Chinese put their one child per family policy, there statement of justification was that population growth interferes with economic development. In 30 years, they have proven this is true. We in the U.S. haven’t learned this lesson – if you spend all your resources to take care of new people you have no resources to take care of existing citizens.<br /><br />That’s interesting; we look at China as an economic miracle. Not many attribute much of this success to controlled population growth. This brings me to my next question: many population problems will not be solved unless Americans are consistently implementing plans for the next 70 years. How do we manage this given our political structures? Does China have an advantage?<br /><br />That’s a great difficulty. Planning horizons in a democracy are based in term years (2, 4, 6 years). Unfortunately, if you change fertility rates it can take 50-70 years before you see the full effects of a change in fertility. This is called population momentum which is a mismatch to our democracy. Politicians implement changes that benefit us in the short term over the long term.<br /><br />Have you ever calculated the required population for all countries to enjoy the standard of living experienced by Americans?<br /><br />I haven’t done that, and there isn’t any specific formula. It depends on the standard of living. The most I can do is quote David Pimentel who is a global agricultural scientist at Cornell University. He says that a sustainable world population living at current US dietary level would consist of two billion people. Furthermore, he suggests that a sustainable US population at current dietary levels would have to be around 130-150 million people, which is the population of the US around World War II.<br /><br />So, how do we get there? My answer is that the government should bring the issue to the forefront and ask; how large do we (as a nation) want to be and what benefit is there from population growth. Then, we need to set goals and plan accordingly. The key is to make family planning available widely throughout the US and the world – with the goal that every child is a wanted child.<br /><br />You’ve written that, “The benefits of population growth accrue to a few; while the costs are borne by all of society.” Let’s enumerate some of the costs borne by society and a potential solution.<br /><br />Individuals who benefit from growth will continue to exert strong pressures supporting and encouraging both population growth and growth in rates of consumption of resources.<br /><br />The individuals who promote growth are motivated by the recognition that growth is good for them. In order to gain public support for their goals, they must convince people that population growth and growth in the rates of consumption of resources are also good for society. [This is the Charles Wilson argument: if it is good for General Motors, it is good for the United States.] (Yates 1983) As for the costs borne by society – with increased growth you have to provide police, fire, schools, waste removal, clean water, and a variety of other infrastructure projects. These services have to be paid for – but they aren’t paid for by growth. Schools in particular suffer. The school systems get their operating expenses from the taxes and to get capital expenses they have to issue bonds. Thus, all tax payers have to pay higher taxes to accommodate schools for new kids.<br /><br />The solution is to tax growth, put a tax on real estate transactions (both at local levels and state levels) and use this tax to fund new projects.<br /><br />Where are most economists confused on this issue of growth rates & consumption?<br /><br />Economists think of infinite substitutability. They cite the example of shifting out of whale oil to petroleum or from wood to coal. Economists suggest that this can continue indefinitely. Unfortunately there are no close substitutes for petroleum. Furthermore, we already know which substitutes exist and they are very costly to access. The substitutability age is no longer as prominent.<br /><br />What books would you recommend we read to understand population growth rate issues?<br /><br />I recommend reading Richard Heinberg’s books, “Peak Oil” and “Peak Everything.” He clearly understands the issues.<br /><br />Is there any hope given the actions of the current administration?<br /><br />I certainly welcome the new administration, but the problem is we have the same Congress. This Congress enjoys the status quo, they are protective of their own interests, and tey listen to lobbyists. So as someone once said, “we have the best government money can buy.”<br /><br />Growth never pays for itself. One of the biggest culprits is the federal government. Almost all states have requirements for a balanced budget. The federal government does not have this requirement. As a consequence the federal government is now paying for state schools, highways, sewage systems, bridges. This has happened because the local economy can’t support local population growth. Therefore, the main responsibility of members of Congress is to bring home federal grants to pay for the results of population growth in their representative district.<br /><br />Another thing to remember is that inflation is a tax on everyone. So if the federal government issues bonds to pay for the consequences of growth (infrastructure, etc) this is likely to result in inflation. Thus, we will all bear the costs. Having looked at our national debt levels, I’m worried that the inflation could be very severe.<br /><br />That said, stopping population growth is a necessary condition for sustainability, but it isn’t a sufficient condition.<br /><br />Let’s assume we could implement population growth constraints. What else must be done?<br /><br />Assuming you can constrain population growth rates, you have to implement every possible efficiency improvement (meaning energy, design, etc). In addition, you would have to create an environmental agency to stop polluters and require existing sources of pollution to be removed. The US population growth rate is the highest of any industrial nation. The US can’t preach for other countries to limit population growth unless we are willing to set an example and do so first.<br /><br />Key Points to Remember: By Albert Bartlett:<br /><br />When applied to material things, the term “sustainable growth” is an oxymoron. (It is possible to have sustainable growth of non-material things such as inflation.) Perhaps this is why inflation rates are sustainable or as some politicians would say hopefully sustainable in moderate amounts. We have seen how major national and international reports misrepresent and downplay (marginalize) the quantitative importance of the arithmetic of population sizes and growth.<br /><br />1. One has to ask if it is possible to have an increase in economic activity (growth) without having increases in the rates of consumption of non-renewable resources? If so, under what conditions can this happen? Are we moving toward those conditions today?<br /><br />2. What courses of action that could be followed to meet the needs of the present, but which, in doing so, would not limit the ability of generations, throughout the distant future, to meet their own needs?<br /><br />3. The size of population that can be sustained (the carrying capacity) and the sustainable average standards of living of the population are inversely related to one another. “This runs counter to most traditional entrepreneurial myths of sustainable growth and rising standards of living”<br /><br />I come back to an Eric Sevareid quote: “The chief cause of problems is solutions.” That is so important. For example, as long as there’s population growth, urban planning is bound to make everything worse. Here’s why. Essentially all the problems planners must deal with are caused by population growth. And planners are trained to solve problems. For a planner, a problem is anything that inhibits population growth. So when you solve the problem you are encouraging more population growth, and this makes everything worse.<br /><br />Professor thank you for taking the time to answer our questions. We will continue to track your progress. I wish you the best of health. For More information about Professor Bartlett visit Albartlett.org<br /><br />Miguel Barbosa<br />Founder of<br />[www.simoleonsense.com]<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com1tag:blogger.com,1999:blog-17617568.post-68164109159871536452010-03-29T07:58:00.001-05:002010-03-29T08:01:17.387-05:00Catholic Church Update, by Matt TaibbiWe've commented before on this prolific and insightful writer. Here he is at his screamingly funny and accurate best, on the recurrent and endless Catholic church molestation scandal:<br /><br />The Catholic Church is a Criminal Enterprise<br />By MATT TAIBBI<br /><br /> The Holy See’s reaction to both stories has been swift. An unsigned editorial this week in the Vatican newspaper L’Osservatore Romano attacked the New York Times by name, accusing the paper of willfully ignoring the “truth” of Ratzinger/Benedict’s record and of attempting “to instrumentalize, without any foundation in fact, horrible episodes and sorrowful events uncovered in some cases from decades ago.” The media, it continued, showed a “despicable intent of attacking, at whatever cost, Benedict XVI and his closest collaborators.”<br /><br /> Earlier in the week, New York’s archbishop, Timothy Dolan, used his blog to dismiss the New York Times reports and defend the pontiff’s record by arguing that authorities outside the church also are culpable. Stories about sexual abuse by priests were “fair” if “unending,” he wrote. But he condemned the media for portraying child sexual abuse “as a tragedy unique to the church alone. That, of course, is malarkey.”<br /><br /> via A pope with a problem – latimes.com.<br /><br />Anyone who’s interested in losing his lunch should read the above-mentioned blog entry by New York archbishop Timothy Dolan in defense of Pope Benedict; the archbishop’s incredibly pompous and self-pitying rant is some of the most depraved horseshit I’ve ever seen on the internet, which is saying a lot.<br /><br />One expects professional slimeballs like the public relations department of Goldman Sachs to pull out the “Well, we weren’t the only thieves!” argument when accused of financial malfeasance. But I almost couldn’t believe my eyes as I read through Dolan’s retort and it dawned on me that he was actually going to use the “We weren’t the only child molesters!” excuse. Dolan must have very roomy man-robes, because it seems to me you’d need a set of balls like two moons of Jupiter to say such a thing in public and expect it to fly. But this is exactly what Dolan does; he bases his entire defense of the Church on the idea that others are equally culpable. The relevant section of his piece:<br /><br /> What adds to our anger over the nauseating abuse and the awful misjudgment in reassigning such a dangerous man, though, is the glaring fact that we never see similar headlines that would actually be “news”: How about these, for example?<br /><br /> – “Doctor Asserts He Ignored Abuse Warnings,” since Dr. Huth admits in the article that he, in fact, told the archdiocese the abusing priest could be reassigned under certain restrictions, a prescription today recognized as terribly wrong;<br /><br /> – “Doctor Asserts Public Schools Ignored Abuse Warnings,” since the data of Dr. Carol Shakeshaft concludes that the number of cases of abuse of minors by teachers, coaches, counsellors, and staff in government schools is much, much worse than by priests;<br /><br /> – “Doctor Asserts Judges (or Police, Lawyers, District Attorneys, Therapists, Parole Officers) Ignored Abuse Warnings,” since we now know the sober fact that no one in the healing and law enforcement professions knew back then the depth of the scourge of abuse, or the now-taken-for-granted conclusion that abusers of young people can never safely work closely with them again.<br /><br />The most revolting part of this response is the last bit about how “no one knew… back then” the depth of the scourge of abuse, or the fact that child molesters cannot be allowed near children ever again once caught. Dolan is trying to get us to focus on the 1962 case, but the truth is that as recently as this last decade, the Church’s doctrinal office elected to proceed with church trials for less than 10% of the 3000 cases of abuse reported to them between the years of 2000 and 2010.<br /><br />And just a few days after this blog entry of Dolan’s, the Times would come out with another story indicating that the current Pope, then a Cardinal named Joseph Ratzinger, seems to have quashed an effort to bring a serial child abuser named Lawrence Murphy to a church trial. The inaction of Ratzinger’s office resulted in Murphy being allowed to die “in the dignity of the priesthood,” which was his wish as expressed in a letter to then-Cardinal Ratzinger in January 1998.<br /><br />So while schools, parole officers, judges, lawyers and therapists may have been deficient in their understanding of child abuse back in 1962 (although I’m sorry — it could have been 1562, if someone molested my child and was allowed back in the priesthood, I’d be reaching for an axe), the Catholic church is alone among all of them in continuing to not get it since then. Despite massive public scandal over the course of what now is decades, they continue to deflect and shield child molesters as a matter of institutional routine. The ugliest part of the New York Times story wasn’t even the involvement of Ratzinger in this mess but the fact that three successive archbishops failed to do anything about Murphy, a man who apparently molested upwards of 200 children.<br /><br />(And not only did he molest these children, but he clearly was not forthcoming about his crimes when examined by experts in sexual abuse . In the notes of one such expert there is a telling notation: “Denies sexual contact with anyone not named in outside complaints, i.e. admits to sexual contact only with those accused of!” The expert included that exclamation point, too.)<br /><br />So this monster who was known to the highest authorities in the church to be a monster was allowed to die an active priest who was allowed to work with children for 24 years even after he was exposed, until the end of his life. For Dolan then to lay all this off on 1962 mores is disgusting all by itself and totally disingenuous.<br /><br />But even worse — what does Dolan’s whiny deflecting and excuse-making say about the church as an arbiter of ethical values? These pompous assholes run around in their poofy robes and dresses shaking smoke-filled decanters with important expressions on their faces and pretending to great insight about grace and humility, but here we have the head of the largest Diocese in America teaching his entire congregation that when caught committing a terrible sin, the appropriate response is to blame the media and pull the “All the other kids were doing it, too!” stunt!<br /><br />I was raised Catholic but stopped going to church at the age of 12. I was a complete idiot at that age with regard to almost every other area of human knowledge, but even I knew back then that the church was a scam. There are good and decent people working as individual priests, but the institution as a whole is a gang of cheap charlatans preying on peoples’ guilt feelings (which of course are cultivated intentionally by the church, which teaches children to be ashamed of their natural sexuality) in order to solicit a lifetime of contributions.<br /><br />When I see a Catholic priest chanting his ridiculous incantations and waving his holy smoke over someone’s gravesite or at a wedding, the vibe I get is exactly the same as the one I get watching a plumber groan and moan and babble gibberish about all the different things wrong with your kitchen pipes, when in reality all he had to do was replace a washer. It’s the same as picking up your car after an oil change and listening to the mechanic rattle off a list of charges totaling thousands for the nineteen extra things he looked at under your hood, just out of concern for your safety… And when you protest, no, there was nothing wrong with my alternator, I’m not paying for that, he tries to bullshit you — oh, yes there was, trust me, if we hadn’ta fixed that, your car woulda died on the highway within a week.<br /><br />That’s all the church is. They’re a giant for-profit company using predatory salesmanship to sell what they themselves know is a defective, outmoded, basically unnecessary product. They’ll use any means necessary to keep their market share and if they have to lie and cheat and deflect and point fingers to keep the racket going, they’ll do it, just like any other sleazeball company.<br /><br />But I think it’s time we started considering that what the church is is even worse than that. It’s possible we should start wondering if the church is also a criminal organization that in this country, anyway, should be broken up using RICO statutes.<br /><br />One of the few areas where I agreed with George Bush was in the notion that a country providing safe haven to terrorists should itself be treated as a terrorist organization. Morally this isn’t a difficult one to figure out; a country that keeps house for a bin Laden and doesn’t assist other countries in trying to catch him is a rogue state, one that should be booted out of the community of nations.<br /><br />We don’t permit countries that harbor terrorists to participate in international society, but the Catholic Church — an organization that has been proven over and over again to systematically enable child molesters, right up now to the level of the Pope — is given a free pass. In fact the Church is not only not sanctioned in any serious way, it gets to retain its outrageous tax-exempt status, which makes its systematic child abuse, in this country at least, a government-subsidized activity.<br /><br />Somewhere underneath all of this there is a root story that has to do with celibacy. The celibate status of its priests is basically the Catholic church’s last market advantage in the Christian religion racket, but human beings are not designed to be celibate and so problems naturally arise among the population of priests forced to live that terrible lifestyle. Just as it refuses to change its insane and criminal stance on birth control and condoms, the church refuses to change its horrifically cruel policy about priestly celibacy. That’s because it quite correctly perceives that should it begin to dispense with the irrational precepts of its belief system, it would lose its appeal as an ancient purveyor of magical-mystery bullshit and become just a bigger, better-financed, and infinitely more depressing version of a Tony Robbins self-help program.<br /><br />Therefore it must cling to its miserable celibacy in order to keep its sordid business scheme going; and if clinging to its miserable celibacy means having to look the other way while children are serially molested by its sexually stunted and tortured employees, well, so be it.<br /><br />If you look at it that way, the church’s institutional behavior is far worse than is commonly believed. It’s not just a matter of an intractable bureaucracy responding too slowly or too insensitively to some scattered accidents of fate. This is more like the situation of a car company that continues selling a cheap but faulty brake system because it has calculated that it stands to make more money selling the cars than it does to lose in lawsuits. The only difference is, a car company can fix the brakes if it wants to. What the Catholic church is selling is by definition faulty. It can’t change, or it will be out of business. So even if not changing means kids will be continue to be molested, it doesn’t change.<br /><br />I think Chris Hitchens said this once, and I agree with him; if I were a person that made that kind of moral choice, I think I’d have to kill myself. But these guys not only don’t kill themselves, they go out in public ranting about how wronged they are and how they’ve been fucked over by the evil New York Times for airing out their dirty laundry. Again, I admire the balls, but seriously, they must know the game is almost up. Sooner or later people are going to catch on, the state is going to make a move, and there’s going to be a hell of a lot of church property going up for auction along with the seized Escalades of DEA-busted drug dealers. Or maybe not in this lifetime — but one can only hope.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-29727222093611613082010-03-10T16:28:00.001-06:002010-03-10T16:28:48.336-06:00A Favorite Quote"The fact that people are poor or discriminated against doesn't necessarily endow them with any special qualities of justice, nobility, charity or compassion."<br /><br />—Saul Alinsky<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-71735456936390690722010-03-01T18:29:00.002-06:002010-03-01T18:32:05.051-06:00"No One Saw This Coming"The next time you hear this, think about the <a href="http://mpra.ub.uni-muenchen.de/15892/">following</a> (wonky, with an economic emphasis, but devastating in its own way). Okay, it's fifty-one pages, but well worth reading, at least the conclusions, and you might want to check out the folks who did actually get it right this time, since so so many got it wrong.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-62316632697108393162010-03-01T18:27:00.002-06:002010-03-01T18:29:02.257-06:00Matt Taibbi's Con Games...Well worth a read. Here's the piece in its entirety:<br /><br /><br />Wall Street's Bailout Hustle<br />Goldman Sachs and other big banks aren't just pocketing the trillions we gave them to rescue the economy - they're re-creating the conditions for another crash<br /><br />MATT TAIBBI<br /><br />Posted Feb 17, 2010 5:57 AM<br /><br />Advertisement<br /><br />On January 21st, Lloyd Blankfein left a peculiar voicemail message on the work phones of his employees at Goldman Sachs. Fast becoming America's pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman's role in precipitating the global financial crisis.<br /><br />The bank had already set aside a tidy $16.2 billion for salaries and bonuses — meaning that Goldman employees were each set to take home an average of $498,246, a number roughly commensurate with what they received during the bubble years. Still, the troops were worried: There were rumors that Dr. Ballsachs, bowing to political pressure, might be forced to scale the number back. After all, the country was broke, 14.8 million Americans were stranded on the unemployment line, and Barack Obama and the Democrats were trying to recover the populist high ground after their bitch-whipping in Massachusetts by calling for a "bailout tax" on banks. Maybe this wasn't the right time for Goldman to be throwing its annual Roman bonus orgy.<br /><br />Not to worry, Blankfein reassured employees. "In a year that proved to have no shortage of story lines," he said, "I believe very strongly that performance is the ultimate narrative."<br /><br />Translation: We made a shitload of money last year because we're so amazing at our jobs, so fuck all those people who want us to reduce our bonuses.<br /><br />Goldman wasn't alone. The nation's six largest banks — all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry — set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007. In a gesture of self-sacrifice, Blankfein himself took a humiliatingly low bonus of $9 million, less than the 2009 pay of elephantine New York Knicks washout Eddy Curry. But in reality, not much had changed. "What is the state of our moral being when Lloyd Blankfein taking a $9 million bonus is viewed as this great act of contrition, when every penny of it was a direct transfer from the taxpayer?" asks Eliot Spitzer, who tried to hold Wall Street accountable during his own ill-fated stint as governor of New York.<br /><br />Beyond a few such bleats of outrage, however, the huge payout was met, by and large, with a collective sigh of resignation. Because beneath America's populist veneer, on a more subtle strata of the national psyche, there remains a strong temptation to not really give a shit. The rich, after all, have always made way too much money; what's the difference if some fat cat in New York pockets $20 million instead of $10 million?<br /><br />The only reason such apathy exists, however, is because there's still a widespread misunderstanding of how exactly Wall Street "earns" its money, with emphasis on the quotation marks around "earns." The question everyone should be asking, as one bailout recipient after another posts massive profits — Goldman reported $13.4 billion in profits last year, after paying out that $16.2 billion in bonuses and compensation — is this: In an economy as horrible as ours, with every factory town between New York and Los Angeles looking like those hollowed-out ghost ships we see on History Channel documentaries like Shipwrecks of the Great Lakes, where in the hell did Wall Street's eye-popping profits come from, exactly? Did Goldman go from bailout city to $13.4 billion in the black because, as Blankfein suggests, its "performance" was just that awesome? A year and a half after they were minutes away from bankruptcy, how are these assholes not only back on their feet again, but hauling in bonuses at the same rate they were during the bubble?<br /><br />The answer to that question is basically twofold: They raped the taxpayer, and they raped their clients.<br /><br />Advertisement<br /><br />The bottom line is that banks like Goldman have learned absolutely nothing from the global economic meltdown. In fact, they're back conniving and playing speculative long shots in force — only this time with the full financial support of the U.S. government. In the process, they're rapidly re-creating the conditions for another crash, with the same actors once again playing the same crazy games of financial chicken with the same toxic assets as before.<br /><br />That's why this bonus business isn't merely a matter of getting upset about whether or not Lloyd Blankfein buys himself one tropical island or two on his next birthday. The reality is that the post-bailout era in which Goldman thrived has turned out to be a chaotic frenzy of high-stakes con-artistry, with taxpayers and clients bilked out of billions using a dizzying array of old-school hustles that, but for their ponderous complexity, would have fit well in slick grifter movies like The Sting and Matchstick Men. There's even a term in con-man lingo for what some of the banks are doing right now, with all their cosmetic gestures of scaling back bonuses and giving to charities. In the grifter world, calming down a mark so he doesn't call the cops is known as the "Cool Off."<br /><br />To appreciate how all of these (sometimes brilliant) schemes work is to understand the difference between earning money and taking scores, and to realize that the profits these banks are posting don't so much represent national growth and recovery, but something closer to the losses one would report after a theft or a car crash. Many Americans instinctively understand this to be true — but, much like when your wife does it with your 300-pound plumber in the kids' playroom, knowing it and actually watching the whole scene from start to finish are two very different things. In that spirit, a brief history of the best 18 months of grifting this country has ever seen:<br /><br />CON #1 THE SWOOP AND SQUAT<br /><br />By now, most people who have followed the financial crisis know that the bailout of AIG was actually a bailout of AIG's "counterparties" — the big banks like Goldman to whom the insurance giant owed billions when it went belly up.<br /><br />What is less understood is that the bailout of AIG counter-parties like Goldman and Société Générale, a French bank, actually began before the collapse of AIG, before the Federal Reserve paid them so much as a dollar. Nor is it understood that these counterparties actually accelerated the wreck of AIG in what was, ironically, something very like the old insurance scam known as "Swoop and Squat," in which a target car is trapped between two perpetrator vehicles and wrecked, with the mark in the game being the target's insurance company — in this case, the government.<br /><br />This may sound far-fetched, but the financial crisis of 2008 was very much caused by a perverse series of legal incentives that often made failed investments worth more than thriving ones. Our economy was like a town where everyone has juicy insurance policies on their neighbors' cars and houses. In such a town, the driving will be suspiciously bad, and there will be a lot of fires.<br /><br />AIG was the ultimate example of this dynamic. At the height of the housing boom, Goldman was selling billions in bundled mortgage-backed securities — often toxic crap of the no-money-down, no-identification-needed variety of home loan — to various institutional suckers like pensions and insurance companies, who frequently thought they were buying investment-grade instruments. At the same time, in a glaring example of the perverse incentives that existed and still exist, Goldman was also betting against those same sorts of securities — a practice that one government investigator compared to "selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars."<br /><br />Goldman often "insured" some of this garbage with AIG, using a virtually unregulated form of pseudo-insurance called credit-default swaps. Thanks in large part to deregulation pushed by Bob Rubin, former chairman of Goldman, and Treasury secretary under Bill Clinton, AIG wasn't required to actually have the capital to pay off the deals. As a result, banks like Goldman bought more than $440 billion worth of this bogus insurance from AIG, a huge blind bet that the taxpayer ended up having to eat.<br /><br />Thus, when the housing bubble went crazy, Goldman made money coming and going. They made money selling the crap mortgages, and they made money by collecting on the bogus insurance from AIG when the crap mortgages flopped.<br /><br />Still, the trick for Goldman was: how to collect the insurance money. As AIG headed into a tailspin that fateful summer of 2008, it looked like the beleaguered firm wasn't going to have the money to pay off the bogus insurance. So Goldman and other banks began demanding that AIG provide them with cash collateral. In the 15 months leading up to the collapse of AIG, Goldman received $5.9 billion in collateral. Société Générale, a bank holding lots of mortgage-backed crap originally underwritten by Goldman, received $5.5 billion. These collateral demands squeezing AIG from two sides were the "Swoop and Squat" that ultimately crashed the firm. "It put the company into a liquidity crisis," says Eric Dinallo, who was intimately involved in the AIG bailout as head of the New York State Insurance Department.<br /><br />Advertisement<br /><br />It was a brilliant move. When a company like AIG is about to die, it isn't supposed to hand over big hunks of assets to a single creditor like Goldman; it's supposed to equitably distribute whatever assets it has left among all its creditors. Had AIG gone bankrupt, Goldman would have likely lost much of the $5.9 billion that it pocketed as collateral. "Any bankruptcy court that saw those collateral payments would have declined that transaction as a fraudulent conveyance," says Barry Ritholtz, the author of Bailout Nation. Instead, Goldman and the other counterparties got their money out in advance — putting a torch to what was left of AIG. Fans of the movie Goodfellas will recall Henry Hill and Tommy DeVito taking the same approach to the Bamboo Lounge nightclub they'd been gouging. Roll the Ray Liotta narration: "Finally, when there's nothing left, when you can't borrow another buck . . . you bust the joint out. You light a match."<br /><br />And why not? After all, according to the terms of the bailout deal struck when AIG was taken over by the state in September 2008, Goldman was paid 100 cents on the dollar on an additional $12.9 billion it was owed by AIG — again, money it almost certainly would not have seen a fraction of had AIG proceeded to a normal bankruptcy. Along with the collateral it pocketed, that's $19 billion in pure cash that Goldman would not have "earned" without massive state intervention. How's that $13.4 billion in 2009 profits looking now? And that doesn't even include the direct bailouts of Goldman Sachs and other big banks, which began in earnest after the collapse of AIG.<br /><br />CON #2 THE DOLLAR STORE<br /><br />In the usual "DollarStore" or "Big Store" scam — popularized in movies like The Sting — a huge cast of con artists is hired to create a whole fake environment into which the unsuspecting mark walks and gets robbed over and over again. A warehouse is converted into a makeshift casino or off-track betting parlor, the fool walks in with money, leaves without it.<br /><br />The two key elements to the Dollar Store scam are the whiz-bang theatrical redecorating job and the fact that everyone is in on it except the mark. In this case, a pair of investment banks were dressed up to look like commercial banks overnight, and it was the taxpayer who walked in and lost his shirt, confused by the appearance of what looked like real Federal Reserve officials minding the store.<br /><br />Less than a week after the AIG bailout, Goldman and another investment bank, Morgan Stanley, applied for, and received, federal permission to become bank holding companies — a move that would make them eligible for much greater federal support. The stock prices of both firms were cratering, and there was talk that either or both might go the way of Lehman Brothers, another once-mighty investment bank that just a week earlier had disappeared from the face of the earth under the weight of its toxic assets. By law, a five-day waiting period was required for such a conversion — but the two banks got them overnight, with final approval actually coming only five days after the AIG bailout.<br /><br />Why did they need those federal bank charters? This question is the key to understanding the entire bailout era — because this Dollar Store scam was the big one. Institutions that were, in reality, high-risk gambling houses were allowed to masquerade as conservative commercial banks. As a result of this new designation, they were given access to a virtually endless tap of "free money" by unsuspecting taxpayers. The $10 billion that Goldman received under the better-known TARP bailout was chump change in comparison to the smorgasbord of direct and indirect aid it qualified for as a commercial bank.<br /><br />When Goldman Sachs and Morgan Stanley got their federal bank charters, they joined Bank of America, Citigroup, J.P. Morgan Chase and the other banking titans who could go to the Fed and borrow massive amounts of money at interest rates that, thanks to the aggressive rate-cutting policies of Fed chief Ben Bernanke during the crisis, soon sank to zero percent. The ability to go to the Fed and borrow big at next to no interest was what saved Goldman, Morgan Stanley and other banks from death in the fall of 2008. "They had no other way to raise capital at that moment, meaning they were on the brink of insolvency," says Nomi Prins, a former managing director at Goldman Sachs. "The Fed was the only shot."<br /><br />Advertisement<br /><br />In fact, the Fed became not just a source of emergency borrowing that enabled Goldman and Morgan Stanley to stave off disaster — it became a source of long-term guaranteed income. Borrowing at zero percent interest, banks like Goldman now had virtually infinite ways to make money. In one of the most common maneuvers, they simply took the money they borrowed from the government at zero percent and lent it back to the government by buying Treasury bills that paid interest of three or four percent. It was basically a license to print money — no different than attaching an ATM to the side of the Federal Reserve.<br /><br />"You're borrowing at zero, putting it out there at two or three percent, with hundreds of billions of dollars — man, you can make a lot of money that way," says the manager of one prominent hedge fund. "It's free money." Which goes a long way to explaining Goldman's enormous profits last year. But all that free money was amplified by another scam:<br /><br />CON #3 THE PIG IN THE POKE<br /><br />At one point or another, pretty much everyone who takes drugs has been burned by this one, also known as the "Rocks in the Box" scam or, in its more elaborate variations, the "Jamaican Switch." Someone sells you what looks like an eightball of coke in a baggie, you get home and, you dumbass, it's baby powder.<br /><br />The scam's name comes from the Middle Ages, when some fool would be sold a bound and gagged pig that he would see being put into a bag; he'd miss the switch, then get home and find a tied-up cat in there instead. Hence the expression "Don't let the cat out of the bag."<br /><br />The "Pig in the Poke" scam is another key to the entire bailout era. After the crash of the housing bubble — the largest asset bubble in history — the economy was suddenly flooded with securities backed by failing or near-failing home loans. In the cleanup phase after that bubble burst, the whole game was to get taxpayers, clients and shareholders to buy these worthless cats, but at pig prices.<br /><br />One of the first times we saw the scam appear was in September 2008, right around the time that AIG was imploding. That was when the Fed changed some of its collateral rules, meaning banks that could once borrow only against sound collateral, like Treasury bills or AAA-rated corporate bonds, could now borrow against pretty much anything — including some of the mortgage-backed sewage that got us into this mess in the first place. In other words, banks that once had to show a real pig to borrow from the Fed could now show up with a cat and get pig money. "All of a sudden, banks were allowed to post absolute shit to the Fed's balance sheet," says the manager of the prominent hedge fund.<br /><br />The Fed spelled it out on September 14th, 2008, when it changed the collateral rules for one of its first bailout facilities — the Primary Dealer Credit Facility, or PDCF. The Fed's own write-up described the changes: "With the Fed's action, all the kinds of collateral then in use . . . including non-investment-grade securities and equities . . . became eligible for pledge in the PDCF."<br /><br />Translation: We now accept cats.<br /><br />The Pig in the Poke also came into play in April of last year, when Congress pushed a little-known agency called the Financial Accounting Standards Board, or FASB, to change the so-called "mark-to-market" accounting rules. Until this rule change, banks had to assign a real-market price to all of their assets. If they had a balance sheet full of securities they had bought at $3 that were now only worth $1, they had to figure their year-end accounting using that $1 value. In other words, if you were the dope who bought a cat instead of a pig, you couldn't invite your shareholders to a slate of pork dinners come year-end accounting time.<br /><br />But last April, FASB changed all that. From now on, it announced, banks could avoid reporting losses on some of their crappy cat investments simply by declaring that they would "more likely than not" hold on to them until they recovered their pig value. In short, the banks didn't even have to actually hold on to the toxic shit they owned — they just had to sort of promise to hold on to it.<br /><br />That's why the "profit" numbers of a lot of these banks are really a joke. In many cases, we have absolutely no idea how many cats are in their proverbial bag. What they call "profits" might really be profits, only minus undeclared millions or billions in losses.<br /><br />"They're hiding all this stuff from their shareholders," says Ritholtz, who was disgusted that the banks lobbied for the rule changes. "Now, suddenly banks that were happy to mark to market on the way up don't have to mark to market on the way down."<br /><br />CON #4 THE RUMANIAN BOX<br /><br />One of the great innovations of Victor Lustig, the legendary Depression-era con man who wrote the famous "Ten Commandments for Con Men," was a thing called the "Rumanian Box." This was a little machine that a mark would put a blank piece of paper into, only to see real currency come out the other side. The brilliant Lustig sold this Rumanian Box over and over again for vast sums — but he's been outdone by the modern barons of Wall Street, who managed to get themselves a real Rumanian Box.<br /><br />How they accomplished this is a story that by itself highlights the challenge of placing this era in any kind of historical context of known financial crime. What the banks did was something that was never — and never could have been — thought of before. They took so much money from the government, and then did so little with it, that the state was forced to start printing new cash to throw at them. Even the great Lustig in his wildest, horniest dreams could never have dreamed up this one.<br /><br />Advertisement<br /><br />The setup: By early 2009, the banks had already replenished themselves with billions if not trillions in bailout money. It wasn't just the $700 billion in TARP cash, the free money provided by the Fed, and the untold losses obscured by accounting tricks. Another new rule allowed banks to collect interest on the cash they were required by law to keep in reserve accounts at the Fed — meaning the state was now compensating the banks simply for guaranteeing their own solvency. And a new federal operation called the Temporary Liquidity Guarantee Program let insolvent and near-insolvent banks dispense with their deservedly ruined credit profiles and borrow on a clean slate, with FDIC backing. Goldman borrowed $29 billion on the government's good name, J.P. Morgan Chase $38 billion, and Bank of America $44 billion. "TLGP," says Prins, the former Goldman manager, "was a big one."<br /><br />Collectively, all this largesse was worth trillions. The idea behind the flood of money, from the government's standpoint, was to spark a national recovery: We refill the banks' balance sheets, and they, in turn, start to lend money again, recharging the economy and producing jobs. "The banks were fast approaching insolvency," says Rep. Paul Kanjorski, a vocal critic of Wall Street who nevertheless defends the initial decision to bail out the banks. "It was vitally important that we recapitalize these institutions."<br /><br />But here's the thing. Despite all these trillions in government rescues, despite the Fed slashing interest rates down to nothing and showering the banks with mountains of guarantees, Goldman and its friends had still not jump-started lending again by the first quarter of 2009. That's where those nuclear-powered balls of Lloyd Blankfein came into play, as Goldman and other banks basically threatened to pick up their bailout billions and go home if the government didn't fork over more cash — a lot more. "Even if the Fed could make interest rates negative, that wouldn't necessarily help," warned Goldman's chief domestic economist, Jan Hatzius. "We're in a deep recession mainly because the private sector, for a variety of reasons, has decided to save a lot more."<br /><br />Translation: You can lower interest rates all you want, but we're still not fucking lending the bailout money to anyone in this economy. Until the government agreed to hand over even more goodies, the banks opted to join the rest of the "private sector" and "save" the taxpayer aid they had received — in the form of bonuses and compensation.<br /><br />The ploy worked. In March of last year, the Fed sharply expanded a radical new program called quantitative easing, which effectively operated as a real-live Rumanian Box. The government put stacks of paper in one side, and out came $1.2 trillion "real" dollars.<br /><br />The government used some of that freshly printed money to prop itself up by purchasing Treasury bonds — a desperation move, since Washington's demand for cash was so great post-Clusterfuck '08 that even the Chinese couldn't buy U.S. debt fast enough to keep America afloat. But the Fed used most of the new cash to buy mortgage-backed securities in an effort to spur home lending — instantly creating a massive market for major banks.<br /><br />And what did the banks do with the proceeds? Among other things, they bought Treasury bonds, essentially lending the money back to the government, at interest. The money that came out of the magic Rumanian Box went from the government back to the government, with Wall Street stepping into the circle just long enough to get paid. And once quantitative easing ends, as it is scheduled to do in March, the flow of money for home loans will once again grind to a halt. The Mortgage Bankers Association expects the number of new residential mortgages to plunge by 40 percent this year.<br /><br />CON #5 THE BIG MITT<br /><br />All of that Rumanian box paper was made even more valuable by running it through the next stage of the grift. Michael Masters, one of the country's leading experts on commodities trading, compares this part of the scam to the poker game in the Bill Murray comedy Stripes. "It's like that scene where John Candy leans over to the guy who's new at poker and says, 'Let me see your cards,' then starts giving him advice," Masters says. "He looks at the hand, and the guy has bad cards, and he's like, 'Bluff me, come on! If it were me, I'd bet everything!' That's what it's like. It's like they're looking at your cards as they give you advice."<br /><br />In more ways than one can count, the economy in the bailout era turned into a "Big Mitt," the con man's name for a rigged poker game. Everybody was indeed looking at everyone else's cards, in many cases with state sanction. Only taxpayers and clients were left out of the loop.<br /><br />At the same time the Fed and the Treasury were making massive, earthshaking moves like quantitative easing and TARP, they were also consulting regularly with private advisory boards that include every major player on Wall Street. The Treasury Borrowing Advisory Committee has a J.P. Morgan executive as its chairman and a Goldman executive as its vice chairman, while the board advising the Fed includes bankers from Capital One and Bank of New York Mellon. That means that, in addition to getting great gobs of free money, the banks were also getting clear signals about when they were getting that money, making it possible to position themselves to make the appropriate investments.<br /><br />One of the best examples of the banks blatantly gambling, and winning, on government moves was the Public-Private Investment Program, or PPIP. In this bizarre scheme cooked up by goofball-geek Treasury Secretary Tim Geithner, the government loaned money to hedge funds and other private investors to buy up the absolutely most toxic horseshit on the market — the same kind of high-risk, high-yield mortgages that were most responsible for triggering the financial chain reaction in the fall of 2008. These satanic deals were the basic currency of the bubble: Jobless dope fiends bought houses with no money down, and the big banks wrapped those mortgages into securities and then sold them off to pensions and other suckers as investment-grade deals. The whole point of the PPIP was to get private investors to relieve the banks of these dangerous assets before they hurt any more innocent bystanders.<br /><br />But what did the banks do instead, once they got wind of the PPIP? They started buying that worthless crap again, presumably to sell back to the government at inflated prices! In the third quarter of last year, Goldman, Morgan Stanley, Citigroup and Bank of America combined to add $3.36 billion of exactly this horseshit to their balance sheets.<br /><br />This brazen decision to gouge the taxpayer startled even hardened market observers. According to Michael Schlachter of the investment firm Wilshire Associates, it was "absolutely ridiculous" that the banks that were supposed to be reducing their exposure to these volatile instruments were instead loading up on them in order to make a quick buck. "Some of them created this mess," he said, "and they are making a killing undoing it."<br /><br />Advertisement<br /><br />CON #6 THE WIRE<br /><br />Here's the thing about our current economy. When Goldman and Morgan Stanley transformed overnight from investment banks into commercial banks, we were told this would mean a new era of "significantly tighter regulations and much closer supervision by bank examiners," as The New York Times put it the very next day. In reality, however, the conversion of Goldman and Morgan Stanley simply completed the dangerous concentration of power and wealth that began in 1999, when Congress repealed the Glass-Steagall Act — the Depression-era law that had prevented the merger of insurance firms, commercial banks and investment houses. Wall Street and the government became one giant dope house, where a few major players share valuable information between conflicted departments the way junkies share needles.<br /><br />One of the most common practices is a thing called front-running, which is really no different from the old "Wire" con, another scam popularized in The Sting. But instead of intercepting a telegraph wire in order to bet on racetrack results ahead of the crowd, what Wall Street does is make bets ahead of valuable information they obtain in the course of everyday business.<br /><br />Say you're working for the commodities desk of a big investment bank, and a major client — a pension fund, perhaps — calls you up and asks you to buy a billion dollars of oil futures for them. Once you place that huge order, the price of those futures is almost guaranteed to go up. If the guy in charge of asset management a few desks down from you somehow finds out about that, he can make a fortune for the bank by betting ahead of that client of yours. The deal would be instantaneous and undetectable, and it would offer huge profits. Your own client would lose money, of course — he'd end up paying a higher price for the oil futures he ordered, because you would have driven up the price. But that doesn't keep banks from screwing their own customers in this very way.<br /><br />The scam is so blatant that Goldman Sachs actually warns its clients that something along these lines might happen to them. In the disclosure section at the back of a research paper the bank issued on January 15th, Goldman advises clients to buy some dubious high-yield bonds while admitting that the bank itself may bet against those same shitty bonds. "Our salespeople, traders and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research," the disclosure reads. "Our asset-management area, our proprietary-trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research."<br /><br />Banks like Goldman admit this stuff openly, despite the fact that there are securities laws that require banks to engage in "fair dealing with customers" and prohibit analysts from issuing opinions that are at odds with what they really think. And yet here they are, saying flat-out that they may be issuing an opinion at odds with what they really think.<br /><br />To help them screw their own clients, the major investment banks employ high-speed computer programs that can glimpse orders from investors before the deals are processed and then make trades on behalf of the banks at speeds of fractions of a second. None of them will admit it, but everybody knows what this computerized trading — known as "flash trading" — really is. "Flash trading is nothing more than computerized front-running," says the prominent hedge-fund manager. The SEC voted to ban flash trading in September, but five months later it has yet to issue a regulation to put a stop to the practice.<br /><br />Over the summer, Goldman suffered an embarrassment on that score when one of its employees, a Russian named Sergey Aleynikov, allegedly stole the bank's computerized trading code. In a court proceeding after Aleynikov's arrest, Assistant U.S. Attorney Joseph Facciponti reported that "the bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways."<br /><br />Six months after a federal prosecutor admitted in open court that the Goldman trading program could be used to unfairly manipulate markets, the bank released its annual numbers. Among the notable details was the fact that a staggering 76 percent of its revenue came from trading, both for its clients and for its own account. "That is much, much higher than any other bank," says Prins, the former Goldman managing director. "If I were a client and I saw that they were making this much money from trading, I would question how badly I was getting screwed."<br /><br />Why big institutional investors like pension funds continually come to Wall Street to get raped is the million-dollar question that many experienced observers puzzle over. Goldman's own explanation for this phenomenon is comedy of the highest order. In testimony before a government panel in January, Blankfein was confronted about his firm's practice of betting against the same sorts of investments it sells to clients. His response: "These are the professional investors who want this exposure."<br /><br />In other words, our clients are big boys, so screw 'em if they're dumb enough to take the sucker bets I'm offering.<br /><br />CON #7 THE RELOAD<br /><br />Not many con men are good enough or brazen enough to con the same victim twice in a row, but the few who try have a name for this excellent sport: reloading. The usual way to reload on a repeat victim (called an "addict" in grifter parlance) is to rope him into trying to get back the money he just lost. This is exactly what started to happen late last year.<br /><br />It's important to remember that the housing bubble itself was a classic confidence game — the Ponzi scheme. The Ponzi scheme is any scam in which old investors must be continually paid off with money from new investors to keep up what appear to be high rates of investment return. Residential housing was never as valuable as it seemed during the bubble; the soaring home values were instead a reflection of a continual upward rush of new investors in mortgage-backed securities, a rush that finally collapsed in 2008.<br /><br />But by the end of 2009, the unimaginable was happening: The bubble was re-inflating. A bailout policy that was designed to help us get out from under the bursting of the largest asset bubble in history inadvertently produced exactly the opposite result, as all that government-fueled capital suddenly began flowing into the most dangerous and destructive investments all over again. Wall Street was going for the reload.<br /><br />Advertisement<br /><br />A lot of this was the government's own fault, of course. By slashing interest rates to zero and flooding the market with money, the Fed was replicating the historic mistake that Alan Greenspan had made not once, but twice, before the tech bubble in the early 1990s and before the housing bubble in the early 2000s. By making sure that traditionally safe investments like CDs and savings accounts earned basically nothing, thanks to rock-bottom interest rates, investors were forced to go elsewhere to search for moneymaking opportunities.<br /><br />Now we're in the same situation all over again, only far worse. Wall Street is flooded with government money, and interest rates that are not just low but flat are pushing investors to seek out more "creative" opportunities. (It's "Greenspan times 10," jokes one hedge-fund trader.) Some of that money could be put to use on Main Street, of course, backing the efforts of investment-worthy entrepreneurs. But that's not what our modern Wall Street is built to do. "They don't seem to want to lend to small and medium-sized business," says Rep. Brad Sherman, who serves on the House Financial Services Committee. "What they want to invest in is marketable securities. And the definition of small and medium-sized businesses, for the most part, is that they don't have marketable securities. They have bank loans."<br /><br />In other words, unless you're dealing with the stock of a major, publicly traded company, or a giant pile of home mortgages, or the bonds of a large corporation, or a foreign currency, or oil futures, or some country's debt, or anything else that can be rapidly traded back and forth in huge numbers, factory-style, by big banks, you're not really on Wall Street's radar.<br /><br />So with small business out of the picture, and the safe stuff not worth looking at thanks to the Fed's low interest rates, where did Wall Street go? Right back into the shit that got us here.<br /><br />One trader, who asked not to be identified, recounts a story of what happened with his hedge fund this past fall. His firm wanted to short — that is, bet against — all the crap toxic bonds that were suddenly in vogue again. The fund's analysts had examined the fundamentals of these instruments and concluded that they were absolutely not good investments.<br /><br />So they took a short position. One month passed, and they lost money. Another month passed — same thing. Finally, the trader just shrugged and decided to change course and buy.<br /><br />"I said, 'Fuck it, let's make some money,'" he recalls. "I absolutely did not believe in the fundamentals of any of this stuff. However, I can get on the bandwagon, just so long as I know when to jump out of the car before it goes off the damn cliff!"<br /><br />This is the very definition of bubble economics — betting on crowd behavior instead of on fundamentals. It's old investors betting on the arrival of new ones, with the value of the underlying thing itself being irrelevant. And this behavior is being driven, no surprise, by the biggest firms on Wall Street.<br /><br />The research report published by Goldman Sachs on January 15th underlines this sort of thinking. Goldman issued a strong recommendation to buy exactly the sort of high-yield toxic crap our hedge-fund guy was, by then, driving rapidly toward the cliff. "Summarizing our views," the bank wrote, "we expect robust flows . . . to dominate fundamentals." In other words: This stuff is crap, but everyone's buying it in an awfully robust way, so you should too. Just like tech stocks in 1999, and mortgage-backed securities in 2006.<br /><br />To sum up, this is what Lloyd Blankfein meant by "performance": Take massive sums of money from the government, sit on it until the government starts printing trillions of dollars in a desperate attempt to restart the economy, buy even more toxic assets to sell back to the government at inflated prices — and then, when all else fails, start driving us all toward the cliff again with a frank and open endorsement of bubble economics. I mean, shit — who wouldn't deserve billions in bonuses for doing all that?<br /><br />Con artists have a word for the inability of their victims to accept that they've been scammed. They call it the "True Believer Syndrome." That's sort of where we are, in a state of nagging disbelief about the real problem on Wall Street. It isn't so much that we have inadequate rules or incompetent regulators, although both of these things are certainly true. The real problem is that it doesn't matter what regulations are in place if the people running the economy are rip-off artists. The system assumes a certain minimum level of ethical behavior and civic instinct over and above what is spelled out by the regulations. If those ethics are absent — well, this thing isn't going to work, no matter what we do. Sure, mugging old ladies is against the law, but it's also easy. To prevent it, we depend, for the most part, not on cops but on people making the conscious decision not to do it.<br /><br />That's why the biggest gift the bankers got in the bailout was not fiscal but psychological. "The most valuable part of the bailout," says Rep. Sherman, "was the implicit guarantee that they're Too Big to Fail." Instead of liquidating and prosecuting the insolvent institutions that took us all down with them in a giant Ponzi scheme, we have showered them with money and guarantees and all sorts of other enabling gestures. And what should really freak everyone out is the fact that Wall Street immediately started skimming off its own rescue money. If the bailouts validated anew the crooked psychology of the bubble, the recent profit and bonus numbers show that the same psychology is back, thriving, and looking for new disasters to create. "It's evidence," says Rep. Kanjorski, "that they still don't get it."<br /><br />More to the point, the fact that we haven't done much of anything to change the rules and behavior of Wall Street shows that we still don't get it. Instituting a bailout policy that stressed recapitalizing bad banks was like the addict coming back to the con man to get his lost money back. Ask yourself how well that ever works out. And then get ready for the reload.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-15192899583652426992010-03-01T18:25:00.001-06:002010-03-01T18:26:59.271-06:00The REAL Unemployment Rate...<a href="http://cwcs.ysu.edu/resources/cwcs-projects/defacto">Here</a> it is...don't pay attention to the horse hockey emanating from the mainstream media.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-40767263162075331852010-02-01T10:40:00.002-06:002010-02-01T10:43:46.837-06:00Blind Spot<script type="text/javascript" src="http://widgets.clearspring.com/o/4837b4759c19ccae/4b67041070ed2068/4837b4759c19ccae/ca5b3138/widget.js"></script><br /><br />Really nice production here, with most of our friends: Heinberg, the Bartletts (Albert and Roscoe), Tainter, Savinar, etc. Puts just about everything in perspective, with easy to understand explanations. In a different culture, works like these would be a wake-up call, but not in the US. Not too hard to realize why, and the film takes a pretty good stab at it.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-2164958091673172522009-12-22T21:56:00.003-06:002009-12-23T20:40:57.185-06:00No Xmas Rant This Year...As longtime readers know, Chaos usually presents at least one seasonal rant. Not this year; Chaos believes (now) that people change only when they have to, and this holiday season is proof of that. Look for less sales, profits, and generally retail activity, just because (and this is so simple and yet so true, one needs to recite it at least a few times a week) <span style="font-weight:bold;">people who don't have jobs are not inclined to buy stuff<span style="font-style:italic;"></span></span>. So, it seems a little unfair to get upset at those few who do have a few bucks, since they are merely repeating the same forms that served them so well in past years. Who knew that the entire way of doing most things changed completely a year and a half or so ago, and that it will affect the way everyone lives for quite some time, if not forever? Well. At this time, Chaos (now changed from the callow person who began this blog over four years ago, see the blogroll) merely wishes good times and fellowship to those readers who still remain. Try and put aside earthly concerns, for just a few moments, and revel in the pleasure of being aware and present at this particular moment.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com2tag:blogger.com,1999:blog-17617568.post-8387870685495421202009-11-09T08:27:00.003-06:002009-11-09T08:33:01.261-06:00Dr. Bartlett's Laws of SustainabilityFew words are as carelessly, ignorantly and malevolently misused as "sustainability." Our friend, Dr.Albert Bartlett, Professor Emeritus of the University of Colorado at Boulder, and star of the classic "Arithmetic, Population and Energy" video referenced on this blog many times, has compiled the following laws of real sustainability (ideally, one would view the video prior to perusing these, but here they are anyway). (Copied from The Oil Drum)<br /><br />LAWS OF SUSTAINABILITY<br /><br />The Laws that follow are offered to define the term "sustainability." In some cases these statements are accompanied by corollaries that are identified by capital letters. They all apply for populations and rates of consumption of goods and resources of the sizes and scales found in the world in 2005, and may not be applicable for small numbers of people or to groups in primitive tribal situations.<br /><br />These Laws are believed to hold rigorously.<br /><br />The list is but a single compilation, and hence may be incomplete. Readers are invited to communicate with the author in regard to items that should or should not be in this list.<br /><br />First Law: Population growth and / or growth in the rates of consumption of resources cannot be sustained.<br /><br /> A) A population growth rate less than or equal to zero and declining rates of consumption of resources are a necessary, but not a sufficient, condition for a sustainable society.<br /><br /> B) Unsustainability will be the certain result of any program of "development," that does not plan the achievement of zero (or a period of negative) growth of populations and of rates of consumption of resources. This is true even if the program is said to be “sustainable.”<br /><br /> C) The research and regulation programs of governmental agencies that are charged with protecting the environment and promoting "sustainability" are, in the long run, irrelevant, unless these programs address vigorously and quantitatively the concept of carrying capacities and unless the programs study in depth the demographic causes and consequences of environmental problems.<br /><br /> D) Societies, or sectors of a society, that depend on population growth or growth in their rates of consumption of resources, are unsustainable.<br /><br /> E) Persons who advocate population growth and / or growth in the rates of consumption of resources are advocating unsustainability.<br /><br /> F) Persons who suggest that sustainability can be achieved without stopping population growth are misleading themselves and others.<br /><br /> G) Persons whose actions directly or indirectly cause increases in population or in the rates of consumption of resources are moving society away from sustainability.<br /><br /> H) The term "Sustainable Growth" is an oxymoron.<br /><br /> I) In terms of population sizes and rates of resource consumption, “The only smart growth is no growth.” (Hammond, 1999)<br /><br />Second Law: In a society with a growing population and / or growing rates of consumption of resources, the larger the population, and / or the larger the rates of consumption of resources, the more difficult it will be to transform the society to the condition of sustainability.<br /><br />Third Law: The response time of populations to changes in the human fertility rate is the average length of a human life, or approximately 70 years. (Bartlett and Lytwak 1995) [This is called "population momentum."]<br /><br /> A) A nation can achieve zero population growth if:<br /> a) the fertility rate is maintained at the replacement level for 70 years, and<br /> b) there is no net migration during the 70 years.<br /> During the 70 years the population continues to grow, but at declining rates until the growth finally stops after approximately 70 years.<br /><br /> B) If we want to make changes in the total fertility rates so as to stabilize the population by the mid - to late 21st century, we must make the necessary changes now.<br /><br /> C) The time horizon of political leaders is of the order of two to eight years.<br /><br /> D) It will be difficult to convince political leaders to act now to change course, when the full results of the change may not become apparent in the lifetimes of those leaders.<br /><br />Fourth Law: The size of population that can be sustained (the carrying capacity) and the sustainable average standard of living of the population are inversely related to one another. (This must be true even though Cohen asserts that the numerical size of the carrying capacity of the Earth cannot be determined, (Cohen 1995))<br /><br /> A) The higher the standard of living one wishes to sustain, the more urgent it is to stop population growth.<br /><br /> B) Reductions in the rates of consumption of resources and reductions in the rates of production of pollution can shift the carrying capacity in the direction of sustaining a larger population. <br /><br />Fifth Law: One cannot sustain a world in which some regions have high standards of living while others have low standards of living.<br /><br />Sixth Law: All countries cannot simultaneously be net importers of carrying capacity.<br /><br /> A) World trade involves the exportation and importation of carrying capacity.<br /><br />Seventh Law: A society that has to import people to do its daily work (“We can’t find locals who will do the work,”) is not sustainable.<br /><br />Eighth Law: Sustainability requires that the size of the population be less than or equal to the carrying capacity of the ecosystem for the desired standard of living.<br /><br /> A) Sustainability requires an equilibrium between human society and dynamic but stable ecosystems.<br /><br /> B) Destruction of ecosystems tends to reduce the carrying capacity and / or the sustainable standard of living.<br /><br /> C) The rate of destruction of ecosystems increases as the rate of growth of the population increases.<br /><br /> D) Affluent countries, through world trade, destroy the ecosystems of less developed countries.<br /><br /> E) Population growth rates less than or equal to zero are necessary, but are not sufficient, conditions for halting the destruction of the environment. This is true locally and globally.<br /><br />Ninth Law: ( The lesson of "The Tragedy of the Commons" ) (Hardin 1968): The benefits of population growth and of growth in the rates of consumption of resources accrue to a few; the costs of population growth and growth in the rates of consumption of resources are borne by all of society.<br /><br /> A) Individuals who benefit from growth will continue to exert strong pressures supporting and encouraging both population growth and growth in rates of consumption of resources.<br /><br /> B) The individuals who promote growth are motivated by the recognition that growth is good for them. In order to gain public support for their goals, they must convince people that population growth and growth in the rates of consumption of resources, are also good for society. [This is the Charles Wilson argument: if it is good for General Motors, it is good for the United States.] (Yates 1983)<br /><br />Tenth Law: Growth in the rate of consumption of a non-renewable resource, such as a fossil fuel, causes a dramatic decrease in the life-expectancy of the resource.<br /><br /> A) In a world of growing rates of consumption of resources, it is seriously misleading to state the life-expectancy of a non-renewable resource "at present rates of consumption," i.e., with no growth. More relevant than the life-expectancy of a resource is the expected date of the peak production of the resource, i.e. the peak of the Hubbert curve. (Hubbert 1972)<br /><br /> B) It is intellectually dishonest to advocate growth in the rate of consumption of non-renewable resources while, at the same time, reassuring people about how long the resources will last "at present rates of consumption.” (zero growth)<br /><br />Eleventh Law: The time of expiration of non-renewable resources can be postponed, possibly for a very long time, by:<br /><br /> i ) technological improvements in the efficiency with which the resources are recovered and used<br /><br /> ii ) using the resources in accord with a program of "Sustained Availability," (Bartlett 1986)<br /><br /> iii ) recycling<br /><br /> iv ) the use of substitute resources.<br /><br />Twelfth Law: When large efforts are made to improve the efficiency with which resources are used, the resulting savings are easily and completely wiped out by the added resources that are consumed as a consequence of modest increases in population.<br /><br /> A) When the efficiency of resource use is increased, the consequence often is that the "saved" resources are not put aside for the use of future generations, but instead are used immediately to encourage and support larger populations.<br /><br /> B) Humans have an enormous compulsion to find an immediate use for all available resources.<br /><br />Thirteenth Law: The benefits of large efforts to preserve the environment are easily canceled by the added demands on the environment that result from small increases in human population.<br /><br />Fourteenth Law: (Second Law of Thermodynamics) When rates of pollution exceed the natural cleansing capacity of the environment, it is easier to pollute than it is to clean up the environment.<br /><br />Fifteenth Law: (Eric Sevareid's Law); The chief cause of problems is solutions. (Sevareid 1970)<br /><br /> A) This law should be a central part of higher education, especially in engineering.<br /><br />Sixteenth Law: Humans will always be dependent on agriculture. (This is the first of Malthus’ two postulata.)<br /><br /> A) Supermarkets alone are not sufficient.<br /><br /> B) The central task in sustainable agriculture is to preserve agricultural land. The agricultural land must be protected from losses due to things such as:<br /><br /> i ) Urbanization and development<br /><br /> ii ) Erosion<br /><br /> iii ) Poisoning by chemicals<br /><br />Seventeenth Law: If, for whatever reason, humans fail to stop population growth and growth in the rates of consumption of resources, Nature will stop these growths.<br /><br /> A) By contemporary western standards, Nature's method of stopping growth is cruel and inhumane.<br /><br /> B) Glimpses of Nature's method of dealing with populations that have exceeded the carrying capacity of their lands can be seen each night on the television news reports from places where large populations are experiencing starvation and misery.<br /><br />Eighteenth Law: In local situations within the U.S., creating jobs increases the number of people locally who are out of work.<br /><br /> A) Newly created jobs in a community temporarily lowers the unemployment rate (say from 5% to 4%), but then people move into the community to restore the unemployment rate to its earlier higher value (of 5%), but this is 5% of the larger population, so more individuals are out of work than before.<br /><br />Nineteenth Law: Starving people don't care about sustainability.<br /><br /> A) If sustainability is to be achieved, the necessary leadership and resources must be supplied by people who are not starving.<br /><br />Twentieth Law: The addition of the word "sustainable" to our vocabulary, to our reports, programs, and papers, to the names of our academic institutes and research programs, and to our community initiatives, is not sufficient to ensure that our society becomes sustainable.<br /><br />Twenty-First Law: Extinction is forever.<br />SO WHERE DO WE GO FROM HERE?<br /><br />The challenge of making the transition to a sustainable society is enormous, in part because of a major global effort to keep people from recognizing the centrality of population growth to the enormous problems of the U.S. and the world.<br /><br />• On the global scale, we need to support family planning throughout the world, and we should generally restrict our foreign aid to those countries that make continued demonstrated progress in reducing population growth rates and sizes.<br /><br />• The immediate task is to restore numeracy to the population programs in the local, national and global agendas.<br /><br />• On the national scale, we can work for the selection of leaders who will recognize that population growth is the major problem in the U.S. and who will initiate a national dialog on the problem. With a lot of work at the grassroots, our system of representative government will respond.<br /><br />• On the local and national levels, we must focus serious attention and large fiscal resources on the development of renewable energy sources.<br /><br />• On the local and national levels, we need to work to improve social justice and equity.<br /><br />• On the community level in the U.S., we should work to make growth pay for itself.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com1tag:blogger.com,1999:blog-17617568.post-25890107377048980652009-10-25T11:56:00.001-05:002009-10-25T11:59:36.621-05:00If You Have Your Money In a Bank...This video should scare the bejesus out of you. When a government official takes time out of her day to say that all deposits are safe...RUN!!!<br /><br /><object width="560" height="340"><param name="movie" value="http://www.youtube.com/v/7BxiEJcOoo0&hl=en&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/7BxiEJcOoo0&hl=en&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="560" height="340"></embed></object><div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com2tag:blogger.com,1999:blog-17617568.post-91245849365933265302009-10-01T08:47:00.001-05:002009-10-01T08:48:56.180-05:00More Nice Moving Pictures...Try this lovely video, if you can't manage to get your head around the economic blowout and the ridiculous insistence of the thundering herd that things are getting better:<br /><br /><br /><object width="560" height="340"><param name="movie" value="http://www.youtube.com/v/lSAqr3GH8PA&hl=en&fs=1&rel=0"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/lSAqr3GH8PA&hl=en&fs=1&rel=0" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="560" height="340"></embed></object><div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-65876851674702089732009-09-23T19:18:00.003-05:002009-09-23T19:34:03.976-05:00Let's Solve The Economic Blowout!Proof that we never lack for good ideas, we just have a shortage of will, here comes the esteemed regulator William Black, with a fine example of what we could do, if somehow, we were not unable to by the capture of the fine American corporations who make up most of the political landscape in this fine nation. Here it is, read and ponder the vast difference between this and our esteemed President's <a href="http://market-ticker.denninger.net/archives/1461-President-Obama,-Hypocrite-In-Chief.html">latest remarks to third world countries</a>:<br /><br /><h3 class="post-title entry-title"> <a href="http://www.washingtonsblog.com/2009/09/william-k-black-banks-posing-systemic.html">William K. Black's Proposal for “Systemically Dangerous Institutions”</a> </h3> <p style="font-style: italic;"><br /></p><p style="font-style: italic;">William K. Black, Associate Professor of Economics and Law at the University of Missouri – Kansas City, and the former head S&L regulator, has written the following fantastic new proposal concerning the giant, insolvent banks. Posted/reprinted with Professor Black's permission.</p><div style="text-align: center;">William K. Black<br />Associate Professor of Economics and Law<br />University of Missouri – Kansas City<br /><br />blackw@umkc.edu<br /><br />September 10, 2009<br /><br /></div>The Obama administration is continuing the Bush administration policy of refusing to comply with the Prompt Corrective Action (PCA) law. Both administrations twisted a deeply flawed doctrine – “too big to fail” – into a policy enshrining crony capitalism.<br /><br />Historically, “too big to fail” was a misnomer – large, insolvent banks and S&Ls were placed in receivership and their “risk capital” (shareholders and subordinated debtholders) received nothing. That treatment is fair, minimizes the costs to the taxpayers, and minimizes “moral hazard.” “Too big to fail” meant only that they were not placed in liquidating receiverships (akin to a Chapter 7 “liquidating” bankruptcy). In this crisis, however, regulators have twisted the term into immunity. Massive insolvent banks are not placed in receivership, their senior managers are left in place, and the taxpayers secretly subsidize their risk capital. This policy is indefensible. It is also unlawful. It violates the Prompt Corrective Action law. If it is continued it will cause future crises and recurrent scandals.<br /><br />On October 16, 2006, Chairman Bernanke delivered a speech explaining why regulators must not allow banks with inadequate capital to remain open.<br /><a href="http://federalreserve.gov/newsevents/speech/bernanke20061016a.htm">http://federalreserve.gov/newsevents/speech/bernanke20061016a.htm</a><br /><blockquote>Capital regulation is the cornerstone of bank regulators' efforts to maintain a safe and sound banking system, a critical element of overall financial stability. For example, supervisory policies regarding prompt corrective action are linked to a bank's leverage and risk-based capital ratios. Moreover, a strong capital base significantly reduces the moral hazard risks associated with the extension of the federal safety net.</blockquote>The Treasury has fundamentally mischaracterized the nature of institutions it deems “too big to fail.” These institutions are not massive because greater size brings efficiency. They are massive because size brings market and political power. Their size makes them inefficient and dangerous.<br /><br />Under the current regulatory system banks that are too big to fail pose a clear and present danger to the economy. They are not national assets. A bank that is too big to fail is too big to operate safely and too big to regulate. It poses a systemic risk. These banks are not “systemically important”, they are “systemically dangerous.” They are ticking time bombs – except that many of them have already exploded.<br /><br />We need to comply with the Prompt Corrective Action law. Any institution that the administration deems “too big to fail” should be placed on a public list of “systemically dangerous institutions” (SDIs). SDIs should be subject to regulatory and tax incentives to shrink to a size where they are no longer too big to fail, manage, and regulate. No single financial entity should be permitted to become, or remain, so large that it poses a systemic risk.<br /><br />SDIs should:<br /><blockquote>1. Not be permitted to acquire other firms<br /><br />2. Not be permitted to grow<br /><br />3. Be subject to a premium federal corporate income tax rate that increases with asset size<br /><br />4. Be subject to comprehensive federal and state regulation, including:</blockquote><blockquote><blockquote>a. Annual, full-scope examinations by their primary federal regulator<br /><br />b. Annual examination by the systemic risk regulator<br /><br />c. Annual tax audits by the IRS<br /><br />d. An annual forensic (anti-fraud) audit by a firm chosen by their primary federal regulator<br /><br />e. An annual audit by a firm chosen by their primary federal regulator<br /><br />f. SEC review of every securities filing</blockquote></blockquote><blockquote>5. A prohibition on any stock buy-backs<br /><br />6. Limits on dividends<br /><br />7. A requirement to follow “best practices” on executive compensation as specified by their primary federal regulator<br /><br />8. A prohibition against growth and a requirement for phased shrinkage<br /><br />9. A ban (which becomes effective in 18 months) on having an equity interest in any affiliate that is headquartered in or doing business in any tax haven (designated by the IRS) or engaging in any transaction with an entity located in any tax haven<br /><br />10. A ban on lobbying any governmental entity<br /><br />11. Consolidation of all affiliates, including SIVs, so that the SDI could not evade leverage or capital requirements<br /><br />12. Leverage limits<br /><br />13. Increased capital requirements<br /><br />14. A ban on the purchase, sale, or guarantee of any new OTC financial derivative<br /><br />15. A ban on all new speculative investments<br /><br />16. A ban on so-called “dynamic hedging”<br /><br />17. A requirement to file criminal referrals meeting the standards set by the FBI<br /><br />18. A requirement to establish “hot lines” encouraging whistleblowing<br /><br />19. The appointment of public interest directors on the BPSR’s board of directors<br /><br />20. The appointment by the primary federal regulator of an ombudsman as a senior officer of the SDI with the mission to function like an Inspector General</blockquote><div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-47182907577440549882009-09-23T19:09:00.002-05:002009-09-23T19:17:00.822-05:00Predatory Health Care, Once AgainA thought-provoking piece in the LA Times reminds us just how tenuous our health here in the US is: in brief, the reporter, a fired health care correspondent, decides to go it alone regarding health insurance, and finds many justifications (rationalizations) to do without, chiefly, that, should he contract a major illness/condition, the insurance company would do everything in its considerable power to deny him the coverage he paid for. A good deal of this article consists of the writer rationalizing his gambling instinct by boasting about his good health, which seems at the least, rash. This, readers, is what we've sunk to, today, in the Predatory Empire we find ourselves in. Here's the article, reprinted in its entirety:<br /><br /><h1>Choosing to not have medical insurance</h1> <h2><!-- P2P_LIVE_EDIT "content_item_subheadline_preview" START -->He covered the healthcare industry for much of his career and realizes the importance of a safety net. But after weighing the risks and benefits, he is going it alone.<!-- P2P_LIVE_EDIT "content_item_subheadline_preview" END --></h2> <div class="articlerail"> <div class="articleRelates module"> <ul><script type="text/javascript"> function showExtras(elm, link, text){ var obj = $(elm); var link = $(link); var elmTop = (obj.getHeight() + 10) * (-1); if(obj.style.display == 'none'){ obj.style.top = elmTop + "px"; link.innerHTML = 'Hide more ' + text + ' »'; new Effect.Parallel([ new Effect.Move(obj, { sync: true, x: link.getWidth(), y: (obj.getHeight() + 10) * (-1), mode: 'absolute' }), new Effect.AppearItems(obj, { sync: true, from: 0, to: 1}) ], { duration: 1 }); } else { new Effect.Parallel([ new Effect.Move(obj, { sync: true, x: link.getWidth() * (-1), y: 0, mode: 'absoulte' }), new Effect.FadeItems(obj, { sync: true, from: 1, to: 0 }) ], { duration: 1 }); link.innerHTML = 'See more ' + text + ' »'; } } // These are customized methods b/c the scriptaculous ones where throwing error. These should be re-evaluated at a later date. Effect.FadeItems = function(element) { element = $(element); var oldOpacity = 0; var options = Object.extend({ from: element.getOpacity() || 1.0, to: 0.0, afterFinishInternal: function(effect) { if (effect.options.to!=0) return; effect.element.hide().setStyle({opacity: oldOpacity}); } }, arguments[1] || { }); return new Effect.Opacity(element,options); }; Effect.AppearItems = function(element) { element = $(element); var options = Object.extend({ from: (element.getStyle('display') == 'none' ? 0.0 : element.getOpacity() || 0.0), to: 1.0, // force Safari to render floated elements properly afterFinishInternal: function(effect) { if(Prototype.Browser.WebKit) { effect.element.forceRerendering(); } }, beforeSetup: function(effect) { effect.element.setOpacity(effect.options.from).show(); }}, arguments[1] || { }); return new Effect.Opacity(element,options); };</script></ul> </div> <div class="googleAd"> </div> </div> <span class="toolSet" style="width: 345px;"> <div class="byline"> <span class="byline"><!-- P2P_LIVE_EDIT "content_item_byline_preview" START -->By J. Duncan Moore Jr.<!-- P2P_LIVE_EDIT "content_item_byline_preview" END --></span> <p class="date"><!-- P2P_LIVE_EDIT "content_item_display_time_preview" START --><span class="dateString">September 21, 2009</span><!-- P2P_LIVE_EDIT "content_item_display_time_preview" END --></p> </div> </span> <!-- sphereit start --> <!-- P2P_LIVE_EDIT "content_item_body_preview" START -->It never occurred to me that I would count myself among America's 47 million uninsured when I passed my 53rd birthday earlier this year. I'm the last person I would have imagined living without a safety net between me and the medical risks of early middle age.<br /><br />Insurance against the unforeseeable, after all, is what makes middle-class existence possible. Yet, as the country debates the merits of reforming the rules around insurance markets, it's worth pondering what value health insurance really adds for individuals under the current system.<br /><br />I have no insurance partly by accident and partly by intent. I'm not freaking out, though. Should I be? I'll tell you what I know. Then you decide.<br /><br />A little more than two years ago, I quit my job. It was, on the face of it, a good job, with a high salary, professional prestige and a luxury health-insurance policy. But I was miserable -- so unhappy, in fact, that I started to worry about myself.<br /><br />I had stopped sleeping through the night. After one particularly grueling 14-hour day, a blood vessel in my nose burst and I had to lie on the floor in the lobby of an office tower while security guards debated calling an ambulance. Without being aware of it, I lost 10 pounds over five months.<br /><br />What was this fearsome job? Writing about health insurance for a news organization. I interviewed top executives at the nation's mega-managed-care companies. I attended investor conferences, covered earnings reports, wrote about clinical trials, explained Medicare benefits. I learned to love the delectable insurance lingo -- medical-loss ratios, adverse selection, moral hazard, the underwriting cycle -- that make normal people feel as if they're stirring concrete with their eyelashes.<br /><br />But the deadline stress was killing me, and I decided not to die before my time. I signed up for the 18-month COBRA extension and began paying $447.12 a month out of my savings for health insurance. I assumed I would find a job, with new insurance coverage, soon enough. I didn't anticipate the economic crisis or the collapse of the journalism profession.<br /><br />When the COBRA coverage was about to expire and I still didn't have a job, I considered the insurance problem from two perspectives: my health status and history -- and what insurance actually buys. The answer I came up with surprised me.<br /><br /><b>Healthy lifestyle</b><br /><br />I've always been a naturally healthy person. I eat right and get plenty of sleep. All my life I've avoided unhealthy behaviors like crack cocaine and yoga. My parents are in their 80s and in great shape. There's no cancer or heart disease in the family history. My Scottish grandparents lived to be 87 and 91.<br /><br />Like a lot of guys who were not especially athletic in their youth, when I hit my 40s I decided to become a stud. I taught myself to swim and started lifting weights. I sold my car 10 years ago and started taking public transit. In warm weather, I ride my bike everyplace I need to go. I've never been overweight. I'm fit, trim, well-proportioned. My body mass index hovers around 24.7. (At 25, you are borderline "overweight," but people with strong bones and lots of muscle mass like me tend to tilt toward overweight in that metric.)<br /><br />If I were going to develop a chronic disease, I'd have it by now. My blood glucose tends toward the low end, so I'm not going to become diabetic. I have some lower back pain and stiffness from a herniated disk 15 years ago, but I manage it with strengthening exercises and stretches. Knee or joint surgery? I don't like to run. Cancer? I never smoked. I had a colonoscopy at 51 and saw for myself on the video monitor that I'm clean as a whistle down there. I did, however, have early signs of a precancerous condition a few years ago.<br /><br />I had some tests, and doctors believe it won't turn into anything serious. We are watching the situation. (According to insurance brokers I consulted, however, that condition could be enough to exclude me from qualifying for an individual policy.)<br /><br />As to heart and vascular risk,I have always had low blood pressure and pretty good, though not ideal, cholesterol. I got my last blood work-up numbers from my doctor and plugged them into the heart attack risk calculator on the website of the National Heart Lung and Blood Institute. My risk score is 5%. Five of 100 people with this level of risk will have a heart attack in the next 10 years. That sounds acceptable.<br /><br />So what does a guy like me need with health insurance? I'm the best risk in town, I thought to myself. Why shouldn't I self-insure? In other words, why couldn't I accept full responsibility for my own health expenses?<br /><br />That's what big companies do. They hire a health insurer to "rent" a network of doctors and hospitals; they also pay the bills for their employees and encourage healthy habits. But the actual medical risk is held by the employers themselves. Companies save a lot of money that way. Risk management is where insurance companies make their big profits.<br /><br />And so I decided: Why shouldn't I create my own network and find providers who would give me a discount for paying cash? I know how to be a savvy medical consumer. Twelve years ago, I needed a gum graft, and was told my insurance wouldn't cover it. I called oral surgeons until I found one willing to give me a firm price for the procedure. Most doctors don't like to cite a price in advance, but as the U.S. health system moves toward asking patients to pay a greater share of the bill, doctors are going to have to become more responsive to their patients' cost sensitivities.<br /><br />About a year ago, when I was looking at the end of my COBRA policy in a few months, I talked to the business manager at my regular physician's office about my options. He said the office offers a standard discount to people without insurance, ranging from 20% to 40%, depending on the service or procedures performed. Diagnostic tests and X-rays are another matter, he said. He advised me to check in advance what sorts of discounts might be available. For hospitalizations, major medical centers in Chicago, where I live, are giving <a href="http://www.chicagotribune.com/news/local/chi-triage-hospitals-26-jan26%2C0%2C3210364.story">pre-arranged discounts</a>, ranging from 15% to 58%, to patients who don't have insurance.<br /><br />A month ago, I went to the doctor for a checkup. My "intermediate" visit, billed at $100, was discounted to $65, and some routine cholesterol tests, billed at $195, cost me $110. I wrote two checks on the spot. There was no paperwork, no correspondence, no phone calls, no arguing about deductibles or co-pays, for me or for the doctor's office. And the doctor got his money immediately.<br /><br />The truth is, I still have money in the bank and can afford to pay most bills myself. A disaster costing more than $50,000 would be a problem, but short of that, I could handle it.<br /><br />A few years ago I worked for a large consulting firm. The head of the healthcare practice used to argue that the U.S. will get a grip on its exploding healthcare costs only if consumers have "more skin in the game," as he put it. Regular people have to face the real costs of their medical options, instead of having them hidden behind employer-sponsored insurance or Medicare, and choose more wisely. I'm prepared to pay those costs, within reason, and consume medical care more sparingly.<br /><br />Most health insurance payments to providers are for routine services that, strictly speaking, are not insurable events. The real purpose of insurance is to protect you against sudden, unexpected, unaffordable events, for instance, a heart attack or cancer diagnosis. Yet that's not how most of us use our health insurance these days. We use it to pay regular, predictable expenses such as office visits, diagnostic tests, dental cleanings and eye exams.<br /><br />Giving up conventional insurance that covers all these routine expenses, however, still leaves people exposed to the risk of unanticipated catastrophe, the expense of which can sometimes force people into bankruptcy.<br /><br />For me, the main medical risk is being hit by a bus or cab, or falling off my bike. But even if I bought a policy, there are no guarantees that the insurance company would pay, that it wouldn't try to weasel out of the obligation.<br /><br /><b>Avoiding payment</b><br /><br />That brings me to the single most terrifying aspect of health insurance in America today: rescissions. This newspaper has published a drumbeat of horror stories -- notably in a 2006 <a href="http://articles.latimes.com/2006/sep/17/business/fi-revoke17">article</a> and many since -- about Californians who had purchased health insurance and paid premiums in good faith, only to find their policies revoked once they made expensive claims for major illnesses, such as cancer, or procedures, such as heart surgeries. This portrait of the health insurance industry has been horrific.<br /><br />Around the same time the articles began, I learned that my music teacher had been hospitalized for two weeks in a coma that he had barely survived. Like many creative types, he was self-employed, with an individual policy. His insurer reneged on the bill, asserting that the coma was the result of a preexisting condition. The hospital is now pursuing my teacher for a six-figure medical bill. It could cost him his house. It's one thing when it happens to anonymous people a thousand miles away, another when it happens to somebody you know.<br /><br />On July 21, the Chicago Tribune splashed across the front page the <a href="http://www.chicagotribune.com/news/columnists/chi-tue-problem-insurance-0721jul21%2C0%2C5666288.column">story</a> of a man who got preauthorization for an expensive back operation. Yet after the $148,000 procedure was done, UnitedHealthcare, his employer's insurer, refused to pay -- even though it had already authorized the surgery. After the patient wrote to the Tribune's "What's Your Problem" columnist, and after the newspaper made inquiries with UnitedHealthcare, the decision was reversed and the insurer paid the bill.<br /><br />The industry's continued use of rescissions to evade bills that companies don't wish to honor eviscerates the value of health insurance. To a person like me, who is on the margin, rescissions are the deciding factor between purchasing and not purchasing insurance.<br /><br />As I indicated earlier, I believe in insurance. Honestly, it is foolhardy for a middle-class person to go without it. Yet as long as the insurers can use medical underwriting to exclude poor risks and redline preexisting conditions -- sometimes retroactively -- insurance isn't worth what we're being asked to pay.<br /><br />I'm looking forward to the day when all of us will qualify for good medical insurance at reasonable prices, with a firm regulatory hand behind it. If we all have to pay into the system in order to make health reform work, so be it. I'll gladly pay if I'm assured of getting the services I contracted for.<br /><br />In October, I'll hit 12 months without insurance, and I will have saved about $6,000 that otherwise would have padded the profits of the insurance companies.<br /><br />Eventually, I will have some serious medical expenses, and I'll use these savings to pay them. Between now and then, I'm going to wear my bike helmet and stay off the rollerblades.<br /><br />Moore is a freelance writer in Chicago and the co-founder of the Assn. of Health Care Journalists.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com0tag:blogger.com,1999:blog-17617568.post-14847877971767258062009-09-09T16:53:00.003-05:002009-09-09T18:37:00.823-05:00An Ominous Sign...Here's a highly interesting video on one person's response to the typical predatory bank and credit card industry; the fact that someone has decided not to pay their credit card bill is not particularly newsworthy, nor the fact that this particular bank (Bank of America) has jacked up the interest rate to 30% or so. Instead, ponder what might happen to the system (well, some are saying that it's happening already, and who is Chaos to disagree?) if more than a small percentage of people starting feeling and acting like this. Hmmm. Well, anyway, check out this tiny snapshot of where we are:<br /><object height="344" width="425"><param name="movie" value="http://www.youtube.com/v/jGC1mCS4OVo&hl=en&fs=1&"><param name="allowFullScreen" value="true"><param name="allowscriptaccess" value="always"><embed src="http://www.youtube.com/v/jGC1mCS4OVo&hl=en&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" height="344" width="425"></embed></object><br /><br />Oh, and if you want more evidence of predatory behavior, look no further than <a href="http://www.nytimes.com/2009/09/09/your-money/credit-and-debit-cards/09debit.html?partner=rss&emc=rss&pagewanted=all">this article</a> on how banks take advantage of people overdrawing their account with debit cards. The bank knows at the instant of the transaction that the amount requested is more than the individual has in their account, but they don't decline the transaction, just assess the victim (uh, Chaos means the customer) a nice, fat fee.<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com1tag:blogger.com,1999:blog-17617568.post-13481171657994604062009-09-09T14:49:00.003-05:002009-09-09T15:15:13.742-05:00The Spiral Downward..."You can't cheat an honest man"---W.C. Fields<br /><br />This <a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/08/03/AR2009080303043.html">fine feature</a>, courtesy of the Washington Post, is an excellent example of both the path downwards that a huge chunk of the US public is about to experience, and a cultural snapshot of the values that have gotten the Empire to the exact place that it now finds itself. It's tragic and pathetic how people who have really no economic understanding of any kind are suddenly hoisted on their own petards by their innumeracy when large forces almost outside their comprehension intrude into their lives (translation: no safety net). Come to think of it, this is an approximation of the economic debacle generally, except that the worst excesses were caused by the largest, most powerful, and smartest (hah!) players. At any rate, in order to preserve the insights for posterity, here it is in its entirety...click on the original link as well, because there is a revealing slideshow which simply must be watched.<br /><h1>For Many Americans, Nowhere to Go but Down</h1><br /><p> <i>MIDDLEBURY, Ind. -- He sinks into the couch, foot jiggling, his gaze traveling from his wife to the television to the darkness outside, broken now and then by the distant glow of passing headlights.</i></p><p><i>His mind settles into another round of "What if?"</i></p><p><i>As in: What if we don't have cash to buy milk, eggs, bread or diapers? What if our unemployment benefits run out? What if we never find jobs?</i> </p> <div id="body_after_content_column"> <p> <i>And then Scott Nichols thinks of the words he doesn't want to say, what for him, a 39-year-old husband and father of two, is the option he has hoped to avoid since being laid off nine months earlier.</i> </p> <p> They already took free food from a church pantry, cardboard boxes filled with Corn Flakes and bologna and saltines, his wife, Kelly, walking in, head down, while he stayed in the car, ashen. They pawned his wedding ring, sold part of her Silver Eagle coin collection and had help from the Salvation Army paying their electric bill. </p><p> Now another cliff approaches: the loss of the home they rent. </p> <p> "Looks like we'll have to go to your mom's," Scott Nichols says to Kelly, 33, who is in a beige recliner, staring ahead. </p> <p>Moving to her mother's would mean returning to the rundown industrial town where they grew up, a place that makes him feel dirty, inside and out. They would sleep in her basement jammed with forgotten furniture, a few steps from a pair of cat litter boxes and below three narrow windows blocked by insulation. </p> <p> Twenty months after it began, what has the American recession come to? </p> <p>There are signs that the bottom has been reached. The stock market is on its way back up. Retail sales are improving. The overall sense of desperation, so widespread at the beginning of the year, has eased. </p> <p> Every day come new reports suggesting some improvement. </p> <p> But underneath all of the reports is this living room. </p> </div><p> "Okay," Kelly says. </p> <p> The people who have just agreed that they are out of options sit in silence, wondering the way out. </p> <div id="body_after_content_column"> <p> "It needs to be paid," she insists. The $40 installment on their Kmart layaway plan is nearly a week late. </p> <p> "That doesn't leave a whole lot of money," he says. If they pay the $40, they will have $31 for themselves, their 2-year-old daughter and his 17-year-old son until their next unemployment checks arrive in five days. </p> <p> "This is why we have no money," she says, irritated, fatigued. </p> <p> These are the conversations that pervade Scott and Kelly Nichols's days. </p> <p>How did they get here? How did their every other exchange evolve into a riddle that includes the refrain "How much?" followed by "How much do we have left?" How did their horizon become a basement in southern Michigan? </p> <p>Nearly four years ago, in search of better pay, Scott Nichols took his older brother's advice and followed him to where he had moved years before: northern Indiana and the flatlands of Elkhart County, the country's largest manufacturer of recreational vehicles. </p> <p> "The RV Capital of the World," as Elkhart's leaders say. </p> <p>Scott got a job on a paint crew at an RV plant, and by the end of 2007 his income had climbed to $53,000, more than he had ever earned. After work he was the man at the bar with the thick roll of bills, the man he had always wanted to be, buying round after round for himself and his friends. The man with "the full pocket," as he liked to say. He took his son on a fishing trip. He took his family out to eat and told them to order whatever they wanted. </p> <p>Then gas prices soared, the economy unraveled and demand for RVs plummeted. Over the course of a year, Elkhart County's unemployment rate rose from less than 5 percent to more than 18 percent. Thousands of workers lost their jobs, the casualties including Scott, and Kelly, who worked in accounts payable at another RV company. The crisis in Elkhart drew the attention of President Obama, who traveled there within weeks of taking office. Obama plans another trip to the county on Wednesday to further focus on the economy. </p> <p>When he lost his job, Scott had no savings, his primary objective always having been to earn enough to cover the rent, eat an occasional steak, feed and clothe their children, ride his dirt bike, fish, golf, play poker, buy lottery tickets, and drink Bud Light.<br /></p><p> For two decades, a robust U.S. economy had allowed Scott a paycheck-to-paycheck life, one in which he was always confident that the next payday was ahead. Lose one job, and soon enough there was another. He flipped burgers at a diner. He was an apprentice at an auto body shop. He drove a delivery truck, was a gofer for an elevator mechanic, mopped floors at a burrito plant, worked as a forge operator, and sanded and buffed and painted truck caps and RVs. </p> <div id="body_after_content_column"> <p>But this time, as weeks stretched into months, Scott found himself not only with no job opportunities but also with nowhere to turn for help. His parents, a retired machinist and truck-stop waitress, still live in the same cramped mobile home in which he grew up. His brother, the one who persuaded him to move to Indiana, has been behind on his own bills since his RV company cut his hours. And Kelly's mother, a retired public school teacher, can offer only her basement. </p> <p> At the kitchen table, Scott opens the newspaper. </p> <p> "Movie Extras Needed Now -- 45 bucks to register, earn $100 to $300 a day," he says, reading aloud. </p> <p> A company needs "employees to assemble products at home, $500 weekly, no experience necessary." </p> <p> Another is looking for people to "earn $3,800 a week working from home, selling information packs." </p> <p> "Here's that one we got burned on," he says. </p> <p> Part-Time Inside Phone Sales. Data Entry From Home. Bodyguards Wanted. </p> <p> He folds the paper and tosses it across the table. </p> <p>" 'Bee Movie?' " asks Hailey, the 2-year-old, climbing into Scott's lap. He loves his children. He tries to be a good father. He dotes on them. </p> <p>"I don't want to watch the 'Bee Movie' right now," he says, rubbing his eyes. He pours cough medicine into a spoon and takes it to her. "I know it doesn't taste good," he says.<br /></p><p> Five weeks before they will have to move unless they find jobs, every day is a slow-motion version of the one before, the soundtrack a mix of sighs and yawns, whatever is on TV, Hailey's laughter, Hailey's crying, Hailey's whining, discussions about which bills to pay, and infrequent, inconsequential chatter. </p> <div id="body_after_content_column"> <p> "That new Camaro is freakin' ugly." </p> <p> "Didn't see it." </p> <p> "It's right across from the library. How could you miss it?" </p> <p>They always sit in the same spots, as they do today, a Wednesday, Kelly in the recliner, tattered at the edges. Scott is on his end of the couch, clutching a jug of Pepsi that he refills when it empties. </p> <p>A photograph from their wedding day sits on a wooden shelf in the corner, "Kelly and Scott, July 10, 2004" in script on the frame. Her smile is wide, her dress bright white. He's in a black tux, grinning, his hair a buzz cut, his goatee neat, the mustache pencil thin. </p> <p>Now, sitting on the couch, 11 months after being laid off, his hair is thick and uncombed, and his mustache full. He has gained 40 pounds since his last day on the job. He needs a refill on his antidepressant but doesn't want to spend money to see a doctor. </p> <p>"C'mon, Karma," he says to the dog, a docile Labrador and Rottweiler mix. "Let's go get the garbage can. Quick trip. Like the wind." </p> <p>Scott walks to the end of the driveway, 87 paces, from where he pushes the bin back to the house, a gray mobile home with a finished basement and a garage on three flat acres. He falls back onto the couch, glancing up at a framed print of three wolves, then at Kelly, then at Hailey. His toes wiggle inside his white socks. He yawns. </p> <p>In the months since his layoff, he has walked into this place or that place looking for work, unannounced visits that resulted in nothing. He went to a factory that makes ambulances. Nothing. To another that sells truck caps. Nothing. Another that produces tops for aerosol cans. Nothing. He heard about an RV plant that might be hiring, but decided he needs more information before he'll get in his car anymore. He refuses to waste gas chasing rumors. </p> <p>Driving anywhere alone is an expense that needs justification. Driving anywhere as a family is nearly impossible, because their two-door Cougar is too cramped and too sagging to accommodate their collective weight. Their second car, an old sport-utility vehicle, is stranded in a mechanic's back yard, needing repairs that Scott says he can't afford. So they stay home, which is another way to avoid spending money. </p> <p>There is time to think: about the laundry he needs to wash. Or maybe he'll save it until tomorrow so he has something to do. He imagines the taunting he's sure he'll hear from his other brother -- the brother who has remained in Michigan -- if he moves back there and into the basement: "So you thought you were gonna go down there and make a ton of money . . . "<br /></p><p> He thinks about his son, Cody, with his C's and D's and no direction or ambition. What will Cody do in a year when he graduates from high school? He thinks about taking classes to learn how to use a computer, aware that a new skill could help him find a job. The idea infuriates him. He has a blue folder filled with certificates: "Scott Nichols has satisfactorily completed the Advanced Auto Body Course." And: Scott Nichols "has completed 460 hours of training in auto glass installation." And: "Scott Nichols successfully completed 1,020 hours of training in auto painting." </p> <p> Why should he have to start all over? </p> <p> "Did you eat all the doughnuts?" Kelly asks. </p> <p> "What do you think I was eating last night?" he answers. </p> <p> She studies Hailey, who is on the floor, gaping at the TV. </p> <p> "She's kind of sedentary," she says. </p> <p> "Why?" </p> <p> "I don't know." </p> <p> "Why?" </p> <p> "<i>I don't know</i>." </p> <p> Scott smiles. "Why?" </p> <p> She rolls her eyes. "I'm going to smack you." </p> <p>For dinner, they eat breakfast -- pancakes and sausages, which is what Scott had scheduled for this night when he mapped out a month's worth of meals to save money. The handwritten menu hangs on the refrigerator. Another night was soup and sandwiches. Another night was Chicken Helper and cottage cheese. Another night was leftovers. This night, Cody washes the dishes, his shoulder-length brown hair concealing his face as he leans over the sink. </p> <p> "Homework?" Scott asks. </p> <p> "No." </p> <p> "Imagine that. If I get another call from school." </p> <p> "You won't." </p> <p> "What'd you do, tell them I don't have a phone?" </p> <p>Cody disappears into his room to play Xbox. The TV is still on, the "King of Queens" fading into "Family Guy," "Two and a Half Men," "The New Old Christine," "Gary Unmarried," and "Seinfeld." As the sky turns black, no one switches on the lights. Kelly and Scott are in their usual places, the living room consumed by the blue glow of the television and an unceasing laugh track. </p> <p>Monday is the day Scott dresses and leaves the house with a purpose that reminds him of the way he felt when he went to work. Only now he's off to collect their unemployment benefits, electronically delivered to their bank accounts by the state of Indiana: $268 for Kelly, $390 for him. </p> <p> "Payday," he says, driving to an ATM. </p> <p>He withdraws $700, which he tucks into a front pocket of his jeans. He buys a Pepsi, four packs of Marlboro Lights and $20 in gas. He pays the electric bill, buys brake pads and a $66 money order for the kids' health insurance, and hoses down the Cougar at a car wash. At the bank, he deposits $500 toward rent. </p> <p> "Five, 10, 12 dollars," he says, counting his remaining cash. </p> <p>He has $100 more coming, his reward for winning the NASCAR betting pool at his bar, a dark, smoky joint called the Winners Circle. He walks in just before noon, hoping to find someone, anyone, who might know something about a job. The place is almost empty. The bartender, gray-haired, gravelly-voiced Valerie, delivers his winnings and a $2 draft. He rarely drinks at home or in front of his kids. He never drank at work. But sometimes he drinks here, beer after beer after beer. </p> <p>"I don't want to end up in a bell tower with a high-powered rifle," he likes to say. "I need to let loose in some way. I'm not going to give up everything." </p> <p>At 1:10 p.m. he orders his fourth Bud. At 1:44 he orders a fifth, then a sixth. His cellphone rings. He knows it's Kelly before he answers. There's that question again: How much does he have left? </p> <p> "We're still fine," he says. "Promise! No I'm not! . . . I've only had six. . . . I'm good. . . . This is it." </p> <p>He downs a seventh beer, then an eighth at 3:04. He drives home slowly. The last thing he needs is a cop pulling him over. He passes Coachmen RV on his left, a plant where he applied for a job six weeks earlier. He passes Evergreen on the right, another RV maker, the sign at the entrance to the long driveway announcing, "Not accepting any applications." </p> <p>In the kitchen, Scott gives Kelly the rest of the money in his pocket, $70, which needs to last until next week's unemployment money arrives. He hands Hailey his loose change for her piggy bank before falling into a chair and losing himself in a game of solitaire. </p> <p> "Mmm." </p> <p> Kelly is the one out of the house now, closing her eyes as she sits in a Subway, savoring a foot-long sandwich. </p> <p>Her thoughts shift to a phone conversation she had that morning with their landlord, when she gave notice that she and Scott would be moving out in a month unless they found work. The prospect of leaving Elkhart makes her think about the place she wishes they were going, a house that exists in her imagination. </p> <p>"A Victorian," she says. "Four bedrooms, two-and-a-half baths, a family room, a living room, a sunroom, what I would call a sewing room, a kitchen, a dining room and a wraparound porch. That's what drew me to it, the wraparound." </p> <p> She takes another bite and wanders around the first floor. </p> <p>"The family room was going to be where I kept my plants," she says. "It was going to be soft green. . . . And the sunroom, that was going to be yellow and it was going to have golden wicker to decorate it. . . . And then upstairs, the master bedroom was going to be mostly white with some blue. . . . And the master bath was going to be purple and white and I was going to have a stained-glass window." </p> <p>She's ashamed that she and Scott have no money. She's embarrassed that they can't find jobs. She didn't grow up this way. In high school, she had a 3.9 grade-point average. She keeps a few old papers in a box, a teacher's "A -- Well Written" scrawled on one, "Very Good!" on another. She got a scholarship to a community college, then lost it after she started partying and stopped going to class. She held a series of forgettable jobs at forgettable places: a bank, a photo lab, a Burger King. She went back to school, finished her two-year degree and continued to work at forgettable places. </p> <p>She thinks about her mother, a divorcée, raising two daughters on her own and taking them on trips to New York and Washington, D.C., and Europe. She and Scott have never taken a family vacation. They were together for eight years before getting married, mainly because Kelly wanted to save up for a catered wedding reception. Scott would have been happy flying to Vegas and mixing in some gambling. He doesn't need a tux. Or a Victorian. </p> <p>"And the first bedroom was going to be Hailey's bedroom," she says. "Soft green with a big Oriental rug with a big rose in the middle. And a big canopy bed. . . . " </p> <p> She takes a last bite of her sandwich. </p> <p> "I know it'll never happen," she says. "But you can still dream. Wish. Imagine." </p> <p> She wipes her mouth with a napkin. </p> <p> "If I made $60,000 and Scott made $60,000, we could probably do it in three or four years." </p> <p> Her voice trails off. </p> <p> "Someday." </p> <p> She tosses her trash in the garbage. The tour is over. </p> <p>An e-mail pops up on Kelly's BlackBerry, which she got when she was working and has kept because of the cost of breaking the contract. The message is from a chiropractor needing a bookkeeper, a job she thought was filled because she had applied two months earlier and got no response. Now the doctor wants her to take what he calls a "personality survey." </p> <p>She drives to the public library to use a computer, because she and Scott don't own one. The survey requires that she rate how a series of 80 statements describes her, "4" being "most like you" and "1" being "least." Next to "I am a winner in most situations," she checks 1. </p> <p>A few minutes after clicking the send button, their landlord calls, asking permission to drop by the next day to see what in the house needs to be fixed. The landlord, also an RV worker, is carrying two mortgages and must rent or sell the place as soon as possible. </p> <p>Kelly hangs up and listens to her voicemail. A message from the chiropractor's assistant: The doctor wants her to come in for an interview, the first callback she has received in more than two months. </p> <p> "Astonishing!" she says, driving toward home. "I wish I could stop and pick some lilacs. Look at all those pretty flowers!" </p> <p>Hailey is sitting on Scott's lap, and Cody in the recliner, when Kelly walks in the house. They're watching "Bee Movie." Kelly tells Scott about the landlord's call. </p> <p> "They want to do a walk-through tomorrow, put an ad in the paper." </p> <p> "When tomorrow?" </p> <p> "Tomorrow afternoon." </p> <p> She mentions the call from the chiropractor. </p> <p> "You're getting a job interview?" Cody asks. </p> <p> "Yeah." </p> <p>Scott coughs. He's fighting a cold. His mind drifts to cleaning up the house and packing. Kelly wonders whether they should trim the hedges. </p> <p> "For God's sakes! That's just pitiful!" he shouts. "The things you worry about!" </p> <p> "It just bugs me, okay?" </p> <p> "Don't get snappy with me!" </p> <p> They're silent for a few moments, his thoughts swinging back to the landlord. </p> <p> "Didn't know she was going to market it that damn quick," he says. </p> <p>The next morning, as she prepares to leave for her interview, Kelly gives Hailey a children's book to take to Scott, saying, "Ask Daddy to read it to you one more time." </p> <p>The book is called "What Dads Can't Do," which Kelly discovered when she took Hailey to story time at the library. She hoped its message might lift her husband's spirits. </p> <p> His voice is a monotone as he reads. </p> <p>"There are so many things that dads can't do, it's a wonder they make it through life at all. But dads can't give up. No matter how tired a dad gets or how hard life gets, a dad never quits." </p> <p>He closes the book and hands it to Hailey, who brings it to Kelly, who walks out the door, saying, "All right, wish me good things." </p> <p> Scott is silent as the door shuts and asks no questions when she returns. </p> <p> "Want me to tell you what happened?" </p> <p> "Uh-huh." </p> <p> He doesn't look up from the wall he's touching up with white paint. The landlord is due soon. </p> <p> "It's 28 hours, eight bucks an hour," she says. No benefits, she adds. </p> <p> "You say, 'Thank you, but -- '?" </p> <p> "Yup," she says. "I make more on unemployment." </p> <p>They sweep and vacuum. As he wipes down the stove, the sink and the counters, Scott thinks about a guy from his home town he loves to tease. He's over 30, has three kids and still lives at home with his mother. What a loser. </p> <p> "I can't make that joke anymore," he says. </p> <p> The landlord arrives with his wife, saying how sorry he is to see them go. </p> <p>"Tell you the truth, I'm broke," Scott says. While Kelly follows them through the house, he wanders the back yard with Hailey and Karma. </p> <p>An hour later, over lasagna, Scott asks Cody if his girlfriend is still trying to persuade him to stay with her instead of moving to Michigan. </p> <p> "I'd rather stay down here," the boy says. </p> <p> "You understand that life happens?" Scott says. "We've got to do something?" </p> <p> Cody nods. </p> <p>Scott goes into the garage, mounts his dirt bike, gunning the engine and standing on the pedals as he speeds across the field behind the house, his face slick with grimy sweat. For the first time all day, for the first time in a long while, he seems happy. </p> <p> "Look at Daddy go!" Kelly says, holding Hailey's hand. </p> <p>The bike hits a bump and Scott tumbles forward, over the handlebars, falling hard on the grass. His shoulder throbs. No job, no health insurance. He can't risk hurting himself any more. He pushes his bike to the garage and heads back to the couch. </p> <p> Twenty-two days to go. </p> <p>A couple of hours north, inside a small yellow house in Jackson, Mich., Kelly's mother walks down 11 dark steps into the basement. She's surrounded by stacks of boxes and milk crates, old chairs shoved against tables and shelves. The ceiling is low enough to touch. </p> <p> Hailey will sleep upstairs, in a toddler bed already occupied by Winnie the Pooh and Mickey Mouse. </p> <p> And Cody? </p> <p> "I don't know what they're going to do," says Diane Lawrence. </p> <p>She shakes her head and walks up to the living room, settling into an easy chair. Her walls are decorated with antique clocks, a painting of a lighthouse and her mother's 70-year-old wedding dress, enshrined in a frame. </p> <p> Lawrence leans back. She has no answers, none that she is sure of, anyway. Only questions. </p> <p> How will three adults, a teenager and a child share a single bathroom? </p> <p> How long will they stay? </p> <p>Jackson is about 80 miles west of Detroit, its only recent distinction being that it made Forbes magazine's list of the country's 10 worst small cities for finding jobs. Elkhart was named, too. It was sixth worst. Jackson? Number one. </p> <p> "There's just nothing available for anyone in this part of the country," she says. </p> <p>Her friend warned her not to take them in. They're adults, let them figure it out. Lawrence scoffs at the idea. Of course they'll live with her. They're her family. </p> <p> "It's not their fault the economy fell through the floor," she says. "It's just too bad it happened." </p> <p> Six days until they have to leave. </p> <p>"You know what he grossed this year?" a woman asks at Scott and Kelly's barbecue, referring to her husband, an RV worker, who grins as he toes the ground. "Under $10,000." </p> <p> "We're three months behind on our mortgage payments," she says. </p> <p>"After I pay all my monthly bills, I've got $40 in my pocket," says a boyish man, a single parent who works two jobs and fixes cars on the side. </p> <p>"Haven't seen it this bad here in 21 years," says another man, in a baseball cap and bowling shirt, leaning against his pickup, gripping a can of beer. "We've all had to make adjustments." </p> <p>No one more so than Scott, the host at his own farewell party, who is grilling burgers and hotdogs and hugging friends. He smiles when he sees Richard Oiler, his buddy, who recently got a job painting RVs after being laid off for 15 months. </p> <p>Soon after he started, Oiler called Scott and told him to get over to the plant to fill out an application. Scott drove over once, then again, but never got a call. Maybe it's worth one last-ditch try before they go, he decides now. He moves closer to Oiler. He says he's going to stop by the plant on Monday to put in another application, and asks if he can deliver it to Oiler. Maybe Oiler could hand it to the bosses. </p> <p> "See if you can?" he asks. He raises his eyebrows. "See what I'm saying?" </p> <p> "Right," Oiler says. </p> <p>Scott wanders away. Oiler sips his beer. He considers himself fortunate to have found a job. But he makes $15 an hour, without the regular bonuses that he and Scott could count on during fatter times. "Made more in high school," he says. Every day, he has to stop himself from talking back to his bosses. </p> <p> "You keep your mouth shut!" his wife snaps. </p> <p>Inside the house, Cody and his girlfriend, Brandy, lie on his bed watching cartoons. He wears a black T-shirt emblazoned with the Grim Reaper's hooded face. Thick black liner circles her hazel eyes. </p> <p>"I have atrocious grades and no money," Cody says, which leaves one option, as far as he can see: the military, although boot camp is not something he'd relish. </p> <p> "I'm not exactly in shape." </p> <p> "You could lose weight," Brandy says. </p> <p> "I'll diet then and if I can't get past that, well guess what? They'll send me home." </p> <p> "No, they won't, Cody." </p> <p>He doesn't want to leave their house, his school, Brandy. He envisions the three of them sleeping in that basement -- Kelly, Scott and himself, no walls between them. </p> <p> "I'm sorry," Cody says, "but this is wrong." </p> <p>Outside, as the sun fades and a bonfire begins to glow, Kelly keeps an eye on Hailey while Scott wanders from friend to friend, bantering as he tilts his head back and chugs another beer. If anyone says anything approaching sentimental, he obliges with a hug and a promise to return. Then he moves on, laughing as he goes. </p> <p>After 12 months of trying to fix his life, there is no more fixing to be done. Scott Nichols accepts that he is a man standing in a back yard of a house that soon won't be his own. He's a man with no way out. He's the man with no option but surrender. </p> <p> Monday: Four days left. He does not go to see Richard Oiler. He does not fill out an application. </p> <p>Tuesday: Kelly packs up some of her things. A clarinet she hasn't played since high school. A Louis Armstrong CD. Two photographs she took at some other point in her life, one of a rose, one of lilacs. A Shakespeare anthology. She shows Scott a wooden keepsake box. "You can yard-sale that," he says, "along with all the damn candles you got." </p> <p> Wednesday: They run a few errands in the sagging Cougar. </p> <p>Thursday: They rent a U-Haul and begin loading, father and son, silent. First the TV, then the couches, their dressers, their beds, the kitchen table, the washer and dryer, his two hunting rifles, then box after box after box, until the house is empty and the truck is full. </p> <p>They arrive in Jackson by late afternoon the next day, Kelly's mother leading them down those 11 dark steps, apologizing not once but twice for the putrid smell of cat urine. </p> <p>Kelly sits on a desk and Cody slumps in a chair. Scott is on the bed, arms folded, his eyes lost in the shadows. Kelly's mother offers to ask the cable company about running another line downstairs for their television. </p> <p> Not necessary, Scott assures her. </p> <p>"I don't plan on being here for long," he promises. He stands and unfolds his arms. The man with no options wonders what to do next, but there is nothing left to do other than trudge upstairs, unload the truck, and come back down to the basement. </p></div> <span id="aptureEndContent"></span> <!-- sphereit end --> </div></div><div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com1tag:blogger.com,1999:blog-17617568.post-65811323896119311942009-08-24T07:53:00.002-05:002009-08-24T07:56:04.508-05:00Hunger Insurance From Dmitry OrlovOur longtime friend, author of Reinventing Collapse and numerous helpful pieces on the differences and non-differences between the collapse of the Soviet Union and the impending collapse of the US Empire, has a screamingly funny post up on the US healthcare system. Here it is in its entirety:<br /><br />"I would like to sell you some hunger insurance. Are you insured against hunger? Perhaps you should be! Without this coverage, you may find it impossible to continue to afford feeding yourself and your family. With this coverage, not only will you be assured of continuing to get at least some food, but so will I. In fact, thanks to this plan, I will get to eat very, very well indeed.<br /><br />Here's how it works. You buy a hunger insurance plan from my hunger insurance company, or from one of my illustrious competitors in the hunger insurance industry. The hunger insurance market is very competitive, offering you plenty of consumer choice. You can even decide to go with a hunger maintenance organization (HMO); that would make a lot of sense if you are on a diet.<br /><br />Whichever company you choose buys up food in bulk on your behalf. Then, should you come down with a case of hunger, you can file a claim, pay the copayment, and get some of the food. Certain feeding procedures, such as breakfast, are considered elective, and are not covered.<br /><br />The company is in a position to demand lower prices for food from the food providers, and can even pass some of these savings on to you. (But the fine folks in the hunger insurance company do have to eat too, you know.) Of course, the food providers try to make up the difference by charging those without hunger insurance much higher prices, but how can anyone blame them? That's just market economics. There may also be some food-related benefits, such as lower rental rates on bowls, spoons, napkins and feeding tubes (check the details of your plan).<br /><br />There is just one more twist: you should try to arrange your hunger insurance plan through your employer. You see, it is much more expensive for companies to do business with consumers directly. It is much cheaper and easier for them to deal with other companies, and this allows them to, again, pass along some of the savings. In fact, many hunger insurers may decide not to sell individual hunger plans because group hunger is much more profitable. This is just Business 101: nothing personal. Plus, how can you afford to pay your hunger premium every month if you are unemployed? It goes without saying that if you want to keep your hunger insurance, you better try to keep your job, whether they pay you or not! And if you are currently unemployed, then, well... why am I still talking to you?<br /><br />I am sure you will agree that this is a damn good system: it offers you consumer choice, a healthy diet, and, most importantly, peace of mind. But, as you may have heard, some people have been clamoring for a so-called "single-feeder system" run by the government. Now, that sort of thing may be very well for those miserable communists, but let me ask you a couple of questions.<br /><br />First: Do you want to get fed the same as everyone else, even if you can afford to pay a little extra? What if you, say, win the lottery; wouldn't you want to upgrade to the premium plan, and dine on filet mignon, foie gras and truffles like I do instead of the corporate-government-provided Happi-Meals?<br /><br />But even more importantly, who do you want your children to be when they grow up: lowly, overworked, underpaid government bureaucrats, or fat-cat capitalists like me? Isn't this compelling vision of hope worth tightening your belt for? To be perfectly honest, those jobs are reserved for <span style="font-style: italic;">my</span> children, but yours might still be able to find work as their personal bathroom assistants, if they are docile and pretty... let's pretend you didn't hear that.<br /><br />But ultimately it is still all up to you, because it is you who, every few years, walks into a voting booth and pulls a lever. And then I have to work with whoever you elect, and bring them around to seeing things my way. We are in this together, you see: you get to pull the lever, but I get to write the checks, with your money. Politicians have to eat too, you know, I am there to help them, and they know it.<br /><br />Is that your stomach growling, or are you just happy to see me?"<div class="blogger-post-footer"><a href="<$BlogSiteFeedUrl$>" title="Atom feed">Site Feed</a></div>Chaoshttp://www.blogger.com/profile/14511045883879753073noreply@blogger.com2