Stan's Rant

There’s a ‘2’ in My Milkfruit Tree

2012-01-16T08:38:00.000+07:00

Every day now for about a week an old-fashioned style 2 appears right around sunset on a lower branch of a milkfruit tree in my yard. (The fruit on my tree has deep purple flesh with a very sweet center; some milkfruit trees have green flesh. Its taste moves towards the chalky as you get close to the skin, and, as you would expect, it exudes a milky white juice.) All other times I’ve tried to see that 2, it’s just a clump of leaves. But then, against a subdued gray twilight background, it’s just above eye level when I’m sitting in my soft chair on my front porch and blares out to me like neon. It can’t last long, at any time a leaf or small branch will fall and my 2 will be history.

What’s doubly remarkable about that leafy message is that 2 is my number. Starting with my birthday which is on the 22nd, it’s been central to my numerical life. I spent a good part of my childhood at house number 20202. My house in Portland where I lived for 18 years was at 722. My Oregon driver’s license, which I’ve had for 40 years, has four 2’s out of a total of seven numbers. The number two signifies duality, the two sides of almost any question or person. Also the two parts that make a whole - positive, negative; male, female; left, right; right, wrong… and I’m as bifurcated as anyone.

About 10 or 11pm last August 21 I stepped out of my car at home after a night out and there was a large spectacular epiphyllum flower in bloom. (Epiphyllum is a spineless hanging cactus with thin flat leaves.) The bud stem had appeared several days before, but never having seen one bloom before (or for that matter since) I had no idea what to expect. Wow, was it showy - It was six inches across with long blue petals radiating in a circle off a white center. And I’m thinking, Great display for the party tomorrow, but alas it didn’t even last till the morning. What a flash of brilliance to erupt and fade in such a short time. Are they - the milkfruit 2 and the epiphyllum bloom - omens that I’m about to abruptly fade away? Or do they mean my life is charmed?

For certain, I lead a charmed life, but equally, at the age of 70, who can say how fast I’m going to fade? Meanwhile, I’m having no trouble loving my life and having the greatest time of it, so I was set a bit off balance when my brother-in-law, being the brunt of my last post’s humor, took umbrage. Somehow in the process of defending himself he took my mention of my meager pension as an indicator that I was whining and feeling sorry for myself, whereas I meant only to contrast how great I feel with how little money I have.

On the other hand, nobody likes being poor. But being as I’ve spent nearly my whole life in that category - minus two short interludes after I sold my house in Portland and received an inheritance - I’m (relatively) very comfortable without money.

During a two year period living on the commune I had a total of $16 in my possession. Food, shelter and fuel were covered and I did my share (usually) of work around the place to compensate for having no dough. It seemed just natural then to extend that moneyless status out to the road where I did about 30,000 miles of hitching without money (out of a total of about 70,000). Amazingly enough, looking back, I survived quite well sans cash and sometimes even today wonder exactly how I managed those weeks at a time on the road, fed and taken care of by the cosmos, as it were. As recompense for going ‘naked’ I had experiences and insights no amount of money could replace. (Read all about it in my new book, The Hitchhiker’s Guide to Enlightenment…forgive the shameless plug.)

At the same time, I always took money with me when I had it. More recently I did a couple of quite long hitches around the middle of the double oughts, but had enough money with me to stay in motels and pay for meals. Meanwhile, if the occasion arose, I’d have no problem sticking out my thumb and going anywhere I needed to (in the states anyway) on the spur of the moment, without cash. But once again, I wouldn’t do it voluntarily, so there’s your duality.

Aside from the odd ascetic or monk, nobody who’s poor ever turns away from mammon. There are people who eschew additional money when they already have enough, but even those are few.

Even living here in Cambodia where everything that’s important - food, shelter, clothing, transportation - is dirt cheap, my $800 per month income (Social Security plus writing) is not living high, though it does provide a good and healthy life and still affords lots of good times.

Bro-in-law pointed out that Social Security is based on what you put in and I had my choice so why was I whining. Maybe there was a little whine there. I worked hard enough when I was working, just didn’t make any money because during the bulk of my working life in the states - 14 years - I was doing recycling, the bastard stepchild of American industry. The US gives a tax break for cutting down a tree but nothing for recycling paper. We also recycled certain materials for the good of it even when they were big losers on the balance sheet. As a result, I never earned more than $11,000 in one year in my life, though for more than half those 14 years, I kept longer than 40 hour work weeks and had a lot of responsibilities. That accounts for my meager pension, which is now, with this month’s raise, $660.

(Don’t tell anyone but Social Security is part of an income-redistribution, communist plot to steal money from the haves and give it to the have-nots. The person who put ten times as much as I did into the system only gets out three or four times as much as I do.)

Had I been willing to wait till the age of 65 years and 8 months, I’d be getting about $800 now. The average pension is about $1200 per month. That would not finance the good life in Portland, say, but it would be just barely livable with enough to pay for the cheapest one bedroom apartment, keep an old clunker on the road, eat healthy but almost never go out or indulge in any of the dearer foods, drink low-down beers and rarely do it outside the house, always be late with bills because you are juggling your limited resources… well, you get the picture. That’s the way I’ve lived almost all my life, it’s second nature and to some extent I’m still doing it now.

But $660 in Portland? Painful. What if I didn’t know how to live outside the US? Well, I’d be whining for sure. Here I’m very comfortable though it’s still not a cushy life, and, as you might expect, I would like a bit more money to spend… another few hundred dollars would do; in fact, $1200 would be just fine. At the same time I still love my life the way it is and I’ll get along with what I have for sure.

In two countries that I’m aware of - The Netherlands, Australia - everybody gets the same amount, in both cases about $1400 per month. That makes sense to me. The whole idea is to keep geezers off the streets and out of the poorhouse. And for we old-timers to be able to maintain a little dignity while our life forces are fading. A state pension is a form of insurance in case you made poor choices, were too lazy, indifferent or indigent to save for retirement or maybe had a run of bad luck. Whatever, it’s hardly the life of Riley.

I chose to work hard for little, and now I’m paying for it, though karma being what it is, you do what’s given to you. It’s your choice but it’s even more a part of the grand plan, so you carry on day to day, month to month, year to year and before you know it you’re 70 years old. If you’re lucky like me you’ve found a place to be comfortable where you can take life easy. Working hard is great when you’re in the prime of life, and it’s good to be able to do it in spurts in your twilight years, but at 70 stress and hard work will only wear down the parts that much faster and shorten your life so once again I’m fortunate to have found my home.

It’s been ten years since I came to Cambodia looking for work. I had tried to figure out a way to survive in the states, but my prospects were dismal. Like many events in my life, I was forced by circumstances to move on only to discover the perfect place for me.

And a charmed place at that.

Guilt Tripping

2011-12-13T08:15:00.000+07:00

I’m beginning to agree with my brother-in-law: My life is too easy, I’m enjoying it way too much. I should be like him: At the age of 80 he’s still working full time doing his part for the American and world economies. There’s not much made in America anymore so the new cars he buys on a regular basis and other trappings of the good suburban life he works so hard for mostly provide jobs for Japanese and Chinese, but what the hell, they need to work too.

Meanwhile, the only endeavor-like activity I can muster lately is a couple hours of writing a day and it rarely involves significant remuneration so my contribution to the world’s economic well-being is mostly limited to my meager pension, so, realistically it’s not much more than negligible. Otherwise all I do all day is putter around with my 250 plus potted plant collection, either gazing in awe at the beauties or fretting about those that look sickly; or riding my bicycle around a pacific tropical countryside or staying informed by reading and listening to lots of news or taking long afternoon naps or hanging out with friends drinking beers in the local bars. Is that any way to live?

I especially feel guilty now that the weather here in Cambodia is as good as weather gets; you know, low to mid-seventies at night - cool enough in the morning for me to want to put on a long-sleeved shirt - and a balmy mid-eighties in the daytime with humidity low enough to preclude perspiration except with serious exertion - I can walk for an hour without working up a sweat. Around April when the temperature here goes up near 100 and barely goes below 85 at night and the sweat pours off of you even when you’re not lifting a finger; well then I wouldn’t feel so bad about old sis and bro-in-law all bundled up against the deep-freeze Minnesota winter, but now I’m just racked with guilt about having it so easy.

Maybe I should assuage my guilt by going back to states and supplementing my $636 per month pittance of a pension by getting a job as a minimum wage Mall*Wart greeter? I’m good at smiling all right, though my weak back might make standing on my feet all day a bit of a challenge. Alternatively, I could always make do in one of the new tent cities that have sprung up around America. I love the outdoors so spending the winter in a tent shouldn’t be all that difficult. Think about hanging around the campfire roasting marshmallows and singing camp songs like Good Night Irene, that’s got to be lots of fun.

I dunno, maybe I should just resign myself to slackerhood and leave the consumerism and concomitant production of CO2 to more upstanding and responsible members of society. I am, after all, an old hippie so it would be kind of fitting to live out my remaining years being counterculturally unproductive, so to speak.

On the other hand, spending my paltry pension here in low-income Cambodia where it actually makes a difference, not to mention provides me a decent standard of living, can’t be all bad, can it? I thought not.

Meanwhile, in the midst of debilitating guilt and remorse while plagued by congenital lethargy and just plain laziness, I have managed to create a blog of news, views and stories from Cambodia: if you’re interested go to http://stanscambo.blogspot.com.

Greek Drama

2011-11-08T07:56:00.001+07:00

The Greek Drama keeps getting stranger by the day. Greece’s prime minister, George Papandreau, after acceding to the financial troika’s (IMF, European Central Bank, European Commission) demands to impose further harsh austerity measures in exchange for the latest in a long list of bailouts decided to put the measure to a referendum. Then he changed his mind; now he wants a unity government, I expect so the people’s wrath can be spread around to all the political parties. No matter what the citizenry actually wanted, all the parties were going to back the deal anyway, so why take the blame himself for his party only?

As part of the deal private Greek bond holders are going to take a 50% haircut; that is, lose half of their investment. The part owned by the big banks will then be covered by bailing them out. That is why there is such heavy pressure and urgency in getting Greece to take on the new debt; better the Greek people pay than France, Germany, etc., having to ‘recapitalize’ their banks with their own money.

In the end result, if everything works according to the troika’s optimistic projections, Greece’s debt to GDP ratio will fall to 120% in 2020. In other words, after eight years of wrenching and painful sacrifice, they will still be hopelessly mired in debt. Part of the problem, it seems to me, is that the leadership is conflating default with leaving the Euro. The two are not necessarily mutually exclusive, because even if Greece formally, technically ‘leaves’ the Eurozone and prints its own money, most transactions there will still be in Euros unless the government specifically prohibits their use, which would be absurd. Go to any European country outside the Eurozone and you can spend Euros as easily as the local currency, at least in the touristy or big city areas.

All the money now in circulation in Greece is Euros; tourism, the country’s number one industry will continue to bring in Euros and all contracts signed since Greece joined the Euro in 2001 are in Euros. The beneficiaries of those contracts will demand payment in Euros.
What’s to stop Greece from continuing to use the Euro after they’ve ‘left’ the Eurozone? For instance, I live in Cambodia in which the US Dollar makes up 80 to 90% of all transactions even though the country also has its own currency. There are no US coins here so everything priced less than a dollar is in riel, the local currency. Also all transactions with the government are made in riels. Cambodia, as well as the several other countries who use the dollar as their own never asked America for its permission to use the dollar.

As long as the Greek people are going to deal with hardship anyway they’re better off defaulting. That way it can be cathartic and the citizenry can come together in a national forum and decide where they want their country to go rather than be forced to accept the nasty, punitive, neo-con economic prescriptions/ultimatums of the elite whose primary goal is to protect their banks and by way of inference, their investments. As I’ve stated repeatedly, there’s too much money at the top. If the 1% aren’t willing to give some of it up in increased taxes they should at minimum lose out for their poor investment choices. If the top are cut down to size, everyone else will benefit.

While Greece, the small potatoes, is in turmoil, Italy, the big cahuna, is teetering on the brink. It’s that old contagion thing: If Greece is having problems, then maybe Italy will be next, so let’s jack up the interest Italy has to pay now. The bywords of the recent international summits is: Calm the Markets; that’s the primary goal of the bailouts and rescue funds. If the financial community, which brought down the world economy with its shenanigans, is the least bit ‘jittery’ then they’ll force up interest rates to the point where countries can no longer sustain them, so that Italy last paid 6.6% on its bonds. It cannot go on very long at that rate before it can no longer meet its obligations.

Italy’s debt is very large, 120% of GDP, but its annual deficit actually isn’t, so it’s not really in the same predicament as Greece which is running very large deficits on top of its extremely high national debt ratio. Nonetheless, because the Markets rule, they decide whether a country passes or fails. Without the ‘Greek effect’ few people would be noticing Italy’s problems, or at least not think they were all that important or imperative. High debt doesn’t matter as long as the lender thinks the loan will be repaid. Witness the US which is currently paying very low interest in spite of its massive debt.

To bail out Greece to the tune of a couple of hundred billion is one thing, but to come up with the trillion or so Italy would need… well, that would be a might more of a challenge, possibly even insurmountable.

Meanwhile in make-believe-land, aka, America, there is great wrangling and hand wringing over cutting the deficit by $400 billion a year - from $1.5 trillion to $1.1 trillion. Even after shafting people who depend on benefit programs - SS, Medicare, Medicaid, as Dumbocrats have proposed - there’s still a $1 trillion plus deficit. A healthy economy would reduce the deficit by $400 billion, but that’s nowhere on the horizon, especially since both parties are intent on taking money from commoners, who spend their money in the economy, rather than taxing the wealthy who hoard it or speculate, either way with no benefit to the society as a whole.

I know Obama has taken out his populist, election-is-approaching, talking points about taxing the wealthy, but it’s nearly all lip service since he’s proposing minute amounts from the very wealthiest; nothing that would remotely get the country’s books in order. Further, Congress’ most liberal members, cowed by the neo-con paradigm, are proposing a .25% financial transaction tax to yield $100 million per year when they should be demanding at least 1%. There’s no legitimate long-term investor who’d be put off by paying 1%.

When Greece’s debt to GDP ratio (under the present optimistic scenario) is down to 120% in 2020, the US’s ratio, without drastic attitude adjustments, will be up around 160%; where Greece stands today. Some argue the deficit is not a great problem, better to borrow to create jobs than be stuck with a faltering economy. I might agree if there weren’t such massive wealth reposited in the elite. If a single one time 8% wealth tax on those with more than a million dollars can cover an entire year’s deficit there’s no reason whatever for any cuts in benefit programs, and lots of economic, as well as moral, reasons to tap into those deep pockets.

The US is experiencing a deer-in-the-headlights moment. Crash and burn is coming but Congress is incapable of responding - except by digging in its heels, and challenging the gods of reality, as it were.

It’s About Time

2011-10-22T08:39:00.000+07:00

After getting mercilessly butt reamed over the past few years after getting royally shafted since Reagan’s time, the people are finally standing up and fighting. What began with a couple hundred hardy souls camping out near Wall Street mushroomed last weekend into 950 demonstrations in 80 countries.

However, just to try to make sure the demonstrators in the US understand that their quest for equity and fairness and a healthy economy for all is futile, the Congress, at the behest of President Obama, passed free trade legislation with Korea, Columbia and Panama. They wanted the people to know that it didn’t matter which party they voted for, they were going to get shafted nonetheless. While free trade areas do create certain types of jobs for Americans, many more are lost, that’s why a large majority of Americans are opposed to FTAs.

In addition, the worst, most egregious aspects of the pacts were left unchanged from NAFTA; that is, the rights given to corporations to sue for damages when environmental legislation, for instance, cuts into their profits. The most famous example was the Metalclad Company’s attempt to build a toxic waste dump in Mexico near the US border. When the local authorities refused a permit, the company sued and forced Mexican authorities to pay $25 million in compensation. What’s more, the trade courts that adjudicate those issues are made up totally of corporate hacks and their deliberations are in secret. While they do lately occasionally judge in favor of the environment, the first 48 cases were all in favor of the corporations and against the people.

Obama campaigned on the promise to renegotiate NAFTA to eliminate its worst aspects, instead, at the behest of corporations who own him and who have no interest in anything but their own profits, he’s carried them forward to taint the new pacts.

Or take the example of Greece. While it was the conservatives who were in power when the world economy started to meltdown, who used the deceitful and charlatanesque talents of Goldman Sachs to hide the true deficit, it’s the ‘Socialists’ who are now in power who are trying to ram austerity down the throats of the people. All mainstream political parties in the Western world, regardless of whether they call themselves conservative or liberal or socialist, have bought into the feed-the-rich, save-the-banks-at-all-costs, economic paradigm.

They say not feeding the banksters will result in catastrophe, but it’s already catastrophe for large numbers of people. In fact, the only people to really suffer in a banking meltdown would be the 1%, those who’ve been sucking on the government’s corporate welfare tit. The trillions of dollars spent to save the banks only went to protect the obscene salaries and bonuses of the banksters, the gifts to the banks did nothing for the economy or the citizenry in need. Much better to let the banks fail, pay off the small depositors, and use the vast sums now being spent to save bloodsucking monster banks to instead create new smaller community oriented banks. One trillion dollars would capitalize 1000 banks at $1 billion each, 10,000 banks at $100 million each, 100,000 banks at $10 mil each.

It would be good for the banks to fail and the 1% to take a big hit to their deep pockets because they are too rich and powerful, they need to be brought down. Those resources held by the few are not good for anyone or anything but themselves. Until they take a real hit, the world’s economy and politics can never be righted.

It’s not going to happen because the banks and the 1% own the government. With the exception of about 70 Democrats who call themselves progressives, there’s no movement in Congress to correct the wrongs of today’s economy and turn it into the right direction. 75% of the American people, including 55% of Republicans want taxes raised on the wealthy to bring down the deficit, but there isn’t a Republican in Congress who would vote for that, and not all that many Democrats either, and only a few Dems who would really fight for it.

We’ve been through this all before, I feel like I’m just repeating myself. I see no light at the end of the tunnel, no dawn on the horizon, no rainbow in a heavy, steely gray, overcast sky.

However, futile or otherwise, I’d love to be out there demonstrating. It’s cool, it’s fun, it’s solidarity, it’s comradeship, it’s a little bit of hope. And it’s about time.

Steve Jobs and the American Way of Capitalism

2011-10-08T16:39:00.001+07:00

Eulogies for Steve Jobs have been coming hard and heavy since his expected but untimely death recently. He is recognized by everyone as a great innovator. To his fans, rather his devotees, he’s a genius, almost a demigod.

The last time I used an Apple product, it was an Apple II, back in the 80s. At a certain point the place I went to to use a computer had Macs, but for some reason I resisted moving to the much better system, maybe I’m just stubborn and slow to change. Over the years I’ve frequently had Mac lovers recommend the Apple system over the PC.

No matter how much better the system might be, adopting it was always problematical for me. In the beginning were the issues of compatibility, access to software and ease of repair, which were especially important as I was in traveling mode starting in 1992. In America, those issues would’ve been minor, in Asia a real bother.

The other, even more decisive reason for shunning Macs is that they’re so damned expensive, double or triple the cost of an equivalent PC. Jobs’ economic philosophy involved doing products so likable that people would be willing to pay a premium for them. It worked out well for him as he left this world with $6 billion in the bank, but it also strictly limited the number of people who could enjoy his ‘great innovations’.

Not only did he make his loyal and dedicated customers pay a heavy price for his products he also subjected them to indignities and rip-offs, such as not allowing purchasers of itunes songs to copy them to use on their other computers, or not making iphone batteries replaceable except by a very expensive process at an Apple store. That’s the gratitude he showed them after they showered him with adoration and fabulous wealth.

So he left with $6 billion in assets. If he had departed with ‘only’ half as much - but still far more than any one person could ever possibly need or legitimately use in one lifetime - because he priced his products more competitively and didn’t seek to soak his customers at every opportunity, a lot more people could’ve enjoyed his products and I’d feel more kindly towards him. He actually might have made even more than six billion if he’d kept a smaller margin, but sold a lot more.

In fact I would’ve loved to have an alternative to Microsoft, since I detest Bill Gates with an unrelenting passion, but Jobs made it impossible for me.

He exemplified the capitalist way, which is to think of innovation and quality only in terms of profit and whatever good might be accomplished by your work as peripheral. He might’ve been a good guy but he was also a greedy bastard.

He had it all but still died young. He had it all in this life but it’s hard to say if his great good fortune will extend to the next as it takes more than fat bank accounts in this life to get through the Pearly Gates to the next.

It’s the Bank’s Problem

2011-09-25T16:10:00.000+07:00

There’s a saying about banks and borrowing: If I borrow $10,000 from the bank and subsequently default, it’s my problem. If I borrow $10 billion from the ban, and default, it’s the bank’s problem.

Greece is on the edge of default. All the money thrown at the country in recent times has been expended in the fervent hope that some miracle will happen to make the country’s debt sustainable. European and international financial institutions are in denial of the inevitable default so are merely delaying the day of reckoning.

They are deathly afraid that Greece’s default will drag several large European banks down with them, because that’ll mean ‘recapitalization’, in other words, another bailout. If they can stave off default by loaning the country lots of money (which it’s very unlikely to ever be able to pay back under any circumstances) then they won’t have to give away lots of money to their too-big-to-fail banks. Either way a lot of good money will be thrown after bad and the citizens of the more frugal northern countries called upon to bail Greece out will be just as irate as the Greeks who are being called on to make sacrifices.

There are three basic reasons why default is inevitable. First is that the country’s debt level is just too high. All of the austerity measures taken and demanded so far by the international financial institutions and Eurozone countries who are loaning the money are only reducing the annual deficit, not balancing the budget, so under the most optimistic scenario, Greece’s debt will continue to rise to even more stratospheric and unsustainable levels. Secondly, many, if not most of the measures undertaken to reduce the deficit are slowing the economy, thus raising unemployment, which then increases social costs and reduces revenue and so turns out to be counterproductive; the more austerity that’s enforced or attempted, the closer the country comes to default.

Finally, the people won’t stand for additional austerity regardless of any consequences that might befall the country. Maybe they truly do not understand the seriousness of the situation or maybe they do, but either way they are fighting back to the point where the government will be powerless to act. Maybe the Greek people think default will be better than trying to meet the country’s crushing debt obligations or maybe not, but either way it won’t be pretty. At least under default the slate will be wiped clean, or at least reduced to a manageable level.

Greece’s economic problems, along with those of Ireland, Portugal, Spain, Italy, UK, US and many more countries, goes back to the fundamental ethos of neo-liberal economics that’s held sway in the financial world since Reagan and Thatcher.

Neo-liberalism has three basic tenets. First is the obsession with growth in all situations regardless of the existential circumstances of each country. Second is the insistence on low taxes on corporations and the wealthy. Third is the demand that the actions of the economic establishment be unregulated.

Japan provides the best example of the absurdity and idiocy of the all-growth-all-the-time paradigm. Economists the world over have lamented Japan’s ‘lost decades’ of stagnant economic growth. But Japan is already a wealthy country and it not only has a declining population but also an aging one. If population as a whole is declining and the proportion of the elderly, who typically have less need or desire to consume, is growing then the economy should be declining, not growing. Moreover, if the economy is ‘stagnant’(I prefer the word, stable) in a declining population then its per capita income is actually growing: shouldn’t that be enough? And yet, in a frantic and ultimately futile attempt to adhere to neo-liberal economics the country has amassed the world’s highest debt to GDP ratio - 220% - building lots of bridges to nowhere. If they hadn’t accepted the obsessive growth paradigm they could’ve shared the available work and taken lots of vacations instead of continuing to work the longest hours of any industrial society. They could’ve rested on their laurels, been content with their already wealthy status and started to enjoy life.

The insistence on low taxes for corporations and the wealthy has two major impacts. One is the excessive and destructive speculation that arises from the wealthy having too much money on their hands. The other is the debt that governments accumulate because tax receipts are insufficient when the fat cats are lightly taxed.

Finally, the demand that the activities of society’s economic controllers be unregulated combined with them having more money than they know what to do with brings wild economic swings with inevitable and debilitating busts coming after giddy and unsustainable booms. It doesn’t have to be that disastrous for an economy or a people. Germany experienced a downturn equal to America’s but its unemployment rate grew only minimally. They accomplished that by setting up a program that encouraged companies to put people on short hours with the government making up the difference.

If we were going for sustainability, the good life, spiritual growth instead of blind, mindless consumerism, there’d be neither booms, nor busts. There’d be neither high unemployment, nor widespread poverty. It wouldn’t take much in the way of income redistribution to insure that no American needed to be hungry or homeless. Meanwhile, the poor and middle classes are called upon to sacrifice so that the wealthy can have more tax breaks. And the Repuglicans call it class warfare when the masses object.

Every tax law is a political statement; one way or another somebody is going to have to pay. Since nobody likes taxes and governments are therefore reluctant to levy them, they’ve relied on huge levels of borrowing to make up the difference in the fervent hope that economies will grow enough to make the additional debt payments tolerable. That works until the burdens get too large for governments to sustain and/or inevitable downturns happen because of deregulation and speculation. Either way you’re in a pickle.

Now Obama, our very own Manchurian candidate, is starting to talk tough about raising taxes on the wealthy. Ah, yes, the campaign is beginning and since raising taxes on the wealthy is supported by more than 70% of the American people, it sure won’t hurt his chances for reelection to throw a little red meat to the angry electorate. However, he also made sure to keep his overseers happy by agreeing to cuts in Medicare and Medicaid, saying he wouldn’t accept cuts in those programs without (minimal) tax rises for the wealthy. In other words, slash away wingnut congress, your dream of starting the evisceration hated social programs has been answered.

The world is slouching towards economic disaster because nothing has changed since the 2008 blowout to rein in out-of-control banksters. Witness a ‘rogue’ trader at Swiss bank UBS losing the bank more than $2 billion. You’d think they’d be watching a little more closely or investing a little more conservatively. The certainty of another crash is also indicated by a recent news announcement from the UK that retail banks, where people have their checking accounts, etc., were going to be separated from investment banking, which is no more or less than speculation, a.k.a., gambling. Separation is an absolutely essential change if future bailouts are to be avoided. The problem is that the UK’s new rule is not programmed to take effect until 2019, giving the banksters all the time they need to create another, even multiple, banking meltdowns. Why 2019? Why not 2050? Sure wouldn’t want to unnecessarily rush the banks, would we?

Anyway, there’s always more money in the coffers for bankster welfare… until there isn’t. There will be until the people rise up and say, No more!, regardless of the consequences.

Uncle Tom + Manchurian Candidate = Obama

2011-09-19T11:10:00.001+07:00

I can’t help thinking Obama is a melding of Harriet Beecher Stowe’s, Uncle Tom with the seminal movie, The Manchurian Candidate. Uncle Tom is the good ‘Negro’ who always cautions patience, compromise and deference towards society’s masters. Speak softly, don’t make waves, never challenge the powers that be. Obama always starts his negotiating from a compromise position and then gives away the store to the opposition. That’s because he’s really the Manchurian Candidate, a plant; the perfect foil sent by the enemy to further their own goals. He’s ideal for the task: he’s a totally likable fellow who’s got the rhetoric of progressivism down even when his policies are exactly opposite. He’s got all the right credentials and background and being of half African descent, nobody would ever guess he’s been programmed to work for the other side.

After three years on the job, governing from the center right, how could it be otherwise. The only thing that distinguishes his impact from that of a theoretical ‘Moderate Republican’ is his federal court picks, on every other score, it’s clear he’s doing the work of society’s controllers. He’s even been offering up cuts in ‘entitlements’ as ways to cut the deficit before the Repugs even demanded it. He’s given up the one best campaign issue for Dumbocrats, the one factor that has always distinguished the party from the opposition. Is he doing it because he believes he’s truly representing the will of the American people?

Not if you believe polling has any legitimacy since more than 80% of Americans say no cuts to Social Security and nearly 80% say no cuts to Medicare. Neither are really ‘entitlements’ since both are totally self-funded programs: to receive benefits requires having put money in. Medicaid, which is an entitlement because low-income people are entitled to benefits based solely on their citizenship, is supported by nearly 70%.

He consistently chooses the worst possible people for his economic team, like Jeffery Imelt, CEO of General Electric, to lead his Commission on Jobs and Competitiveness. GE has created a lot of jobs recently but they’re all outside the US. GE made $14 billion in profits last year but not only didn’t pay taxes on it but received a $3 billion refund. There are half a dozen progressive economists I could name offhand who would actually represent the American people rather than the elite, and do a far better job on jobs and competitiveness than Imelt. That’s Obama’s Uncle Tom coming out; he wants to be one of the guys, to be liked and respected by the bigtimers.

When his base, the people who worked and campaigned for him, try to push a progressive agenda he slams and slanders them as unrealistic, pie-in-the-sky, radical, professional leftists. According to Mr. O, the more than 60% of Americans and 90% of self-identified Democrats who want single-payer health care, the same single-payer he advocated as a candidate, are asking for the impossible. It is much better in his mind to make the despised insurance industry central to his health plan, thus his Manchurian Candidate side. He doesn’t want to upset or incur the wrathful opposition of the big guys so he’s happy to settle for a half-assed plan.

Problem is, you don’t inspire your constituency with half-assism. He’s made it very clear that he thinks insulting his base improves his electoral chances with independents; after all, if you’re a progressive, who’re you going to vote for, Rick Perry? That may be true, except you don’t work for or campaign for someone who shits on you while kowtowing to right wing nuttery. You don’t show any enthusiasm for a leader who stops at nothing to protect and coddle thieving banksters while watching obliviously as millions of Americans are kicked out of their homes by those same heartless fat cats. Okay, he’s not totally oblivious to the plight of average Americans; he does mention them in passing now and then while he’s haplessly, fecklessly betraying them. Anyway, if 80% of Americans are opposed to cuts in Social Security and Medicare, who are the independents he’s trying to appeal to?

His latest jobs plan is another in a long line of policy farces. Sixty percent of the plan goes to tax breaks which will have very minimal effect on jobs. If you give the average American a tax break today, they will most likely pay down debt or buy something made in China; how does that create jobs? And since he has no fight in him, he’ll get the tax breaks because the Repugs like that part and give up the actual job creation part because they don’t.

He’s doing the job his enemy controllers sent him to do, and most American readers of this post will hold their noses and vote for him; but not me, as long as the results are essentially the same then it’s better to have a village-idiot Repug in the job than an enemy plant who talks the talk of empathy and caring while stabbing you in the back.

3rd Grade Antics

2011-08-17T11:00:00.000+07:00

Thanks to the Repugs’ take-no-prisoners approach to governing, and Standard and Poor’s subsequent downgrade of the US’s credit rating, people over the world think America’s in financial trouble and may not be able to meet its commitments. While America’s financial problems are real enough - actually very serious, in my opinion - the real problem is political.

S & P’s report detailing its reasons for the downgrade made very clear that the Repugs intransigence regarding raising taxes was key to its decision (bet you didn’t hear that in the corporate media). The fact that they got the mortgage backed securities debacle totally wrong, giving top rating to every toxic security that came its way, detracts but ultimately doesn’t change the impact of the downgrade. In addition to the need to raise taxes, S & P said $3 trillion in cuts over 10 years wasn’t enough, it should be $4 trillion. However, when you consider this year’s deficit is $1.5 trillion neither $3 nor $4 trillion over 10 years is taking the problem seriously.

Looking at it realistically, considering 40% of the US budget comes from borrowing, there’s no way to bring it into balance only with spending cuts. There’d need to be significant tax rises or a booming economy in addition to the cutbacks to balance the budget. Since neither is on the horizon the situation can only go from serious but tenable to total wipeout. At this point the debt is so large, it’s not enough to reduce the deficit by 25%, the budget has to balanced, and soon, because there’s no longer very much leeway for any significant deficit spending.

If you want to get a close look at the US budget and debt figures there’s a fascinating website called http://usdebtclock.org which gives a running count of debt, income, etc. The total budget is $3.4 t, the deficit is $1.5 t, the top three budget items are Medicare/Medicaid at $800 b, Social Security at about $725 b, and defense at $700 b, so you’d have to totally eliminate two of three to balance the budget without new taxes.

More than 70% of Americans think taxes should be raised on incomes over $250,000 - 3% of the total - and large majorities are against any cuts to Social Security, Medicare and Medicaid, but since neither Obama nor the Congress seek any longer to represent the American people, the only way forward for them, though not enough to actually make a difference to the deficit, are cuts to programs that impact everybody but the rich.

Meanwhile, US corporations are sitting on $1.9 trillion dollars of capital reserves, enough to cover the deficit with $400 billion to spare. As mentioned in an earlier post a one time 10% wealth tax on assets over $1 million would also completely cover the

deficit. The wealthy are untouchable but their greed is going to bring the system down. Tom Toles, political cartoonist for the Washington Post had a great cartoon a while back. It showed a fat cat standing in front of an imposing edifice overflowing with money labeled ‘Corporate Cash Reserves’. He’s talking to the peonage saying, We’ll start hiring again when you find the money to buy stuff. There’s no money to buy stuff because the wealthy are hoarding the resources, or collecting on the massive personal debts owed by the commoners.

Our proverbial fat cat is a ‘job creator’ according to the Repugs, and shouldn’t have to pay any additional taxes or he won’t create jobs… but clearly he’s not interested in creating jobs. If he did care to invest his $1.9 trillion of loose cash in America, the economy would be booming, a lot more people would be paying taxes and the deficit would decrease sharply.

The US debt to GDP ratio now stands at about 97%. Next year it’ll be about 107% even with the cuts now in the pipeline. In five years, it’ll be up between 140 and 150% of GDP. As long as investors are still willing to buy US Government bonds at current interest rates of 3% or less, servicing the debt will not be a great challenge. Japan has the worst debt to GDP of any country - 220% - but since its people are willing to lend it money at rates of 1% or less, the country can carry on racking up debt for at least some years in the future though certainly not indefinitely.

With the world racked with financial insecurity, many investors see safety in US bonds, but with the US government going all out to weaken the dollar with very high deficits and debt, 0% interest giveaways to the banks and large scale money printing, that cannot last. At some point the tide will turn and interest rates will shoot up. That could happen from investors looking at America’s internal problems or it could be triggered by steep inflation in commodities. Either way, the US will be where Greece is today, with the exception that the US can print money to no end. However in that case the cure would be worse than the disease.

Europe’s in trouble again because those investors that governments love to coddle are demanding high interest on sovereign debt issued by Italy and Spain. Neither country would be in serious trouble if not for those high interest rates. Both, like the US, definitely need to get their financial houses in order, but like the US, their problems are political. Deficit spending boosts economies and since growth is the all consuming quest of nearly all countries, and the wealthy are flush with ready cash they need to invest, borrowing has been very easy, too easy.

Several countries, including Spain and Italy have temporarily banned short selling of their debt. A short seller is betting on value going down and when enough short sellers get in the act it becomes a surge which is hard to control. This brings up the subject of Credit Default Swaps (CDS’s) one of those Financial Instruments of Mass Destruction. A CDS is basically an insurance policy on your bond purchase. If the bond issuer defaults, you get paid. This does make a bit of sense, except as we saw in the case of AIG, which sold mountains of toxic CDS’s, when they all went bad at once, AIG couldn’t pay and so the government stepped in with $180 billion of free money to protect the profits of the banks and other biggies who bought the CDS’s.

There’s also something called naked CDS’s. That’s where a third party buys a CDS to bet on the bond defaulting. This is problematical because the naked CDS buyer has a stake in the bond going bust and will act accordingly, trying to cause default through rumors, whatever. This is equivalent to me buying an insurance policy on your life: I have an incentive to see you offed so I can collect.

Essentially nothing has changed since the great meltdown of 2007, except the too-big-to-fail banks are even bigger. They still are on shaky footing and ready to crumble and are only kept afloat by massive subsidies from the Federal Reserve. Only minor tweaking was done, in response to the crash, to the regulatory structure that could prevent a repeat.

You’ve been hearing for two years that the Great Recession is over, that the US has been growing, albeit slowly. What you probably didn’t hear is that 88% of the growth of the past two years has gone to the corporations and the very top of the income earners. The American economy is top heavy, its foundations are weak. Without heavy taxes on the top to bring the economic ship of state into balance, it’s bound to fall of its own weight. With the combination of Obama’s fecklessness (and the bought-out status of most Dumbos in general) and the Repugs mania for protecting the wealth of the upper classes at all costs, nothing is going to change the trajectory of disaster.

Default

2011-06-24T11:01:00.000+07:00

Default

The third topic of thunderous geopolitical import I’ve needed lately to write about after Fukushima, which keeps getting worse, and the regression of American politics, which probably can’t get any worse, is the Eurozone debt crisis which will later, if not sooner, see Greece, as the first of several countries, default on its debts or at minimum force a restructuring of its debt.

The IMF and European Central Bank think they are bending over backwards to help Greece avoid default. In the event, their prescriptions for recovery and the onerous conditions placed on their ‘generosity’, only delay the inevitable. By the time the latest bailout is added to their debt, it’ll equal more than 160% of GDP and debt service an unsustainable 6% plus of GDP. In contrast, US debt is about 100% of GDP and debt service about 1.2%. If the US were paying debt service equivalent to Greece’s that would come to about $1 trillion a year. The total US budget is now about $3.4 trillion.

Part of the problem is the high interest rates – 5.5% - the monetary agencies are charging Greece. The money made available to the ECB and IMF to help countries in distress should be doled out at low interest rates, they are, after all, not commercial banks looking for profits, but public entities financed with public money established for the public good. Why then would the IMF want to make money from a country that is dealing with social unrest, political upheaval and imminent default? Their mindset is so far from humanitarian they don’t even know they’re being assholes and helping to bring the country down instead of saving it.

That is combined with required austerity measures which, ostensibly, are to rein in excess government, but in reality add greatly to unemployment, and thus reduce tax revenue. Since affluent Greeks are adept at avoiding taxes it’s only the commoners that pay and only when they are working. Moreover, with the economy going downhill those who do have jobs aren’t spending in fear they might join the ranks of the unemployed. The finance community is participating in bringing the country down and making it impossible for Greece to ever pay its debt.

When an individual reaches an equivalent level of debt and it’s clear that they’ll never have the ability to pay, they declare bankruptcy. Their remaining assets are divvied up amongst creditors and they start over. Once you’ve gone that route, you’re on your own, you’ve no choice but to live within your means since borrowing is no longer an option.

The head of the ECB said Greek default is unthinkable because that would mean recapitalizing the big banks that have invested in Greek bonds. When the masses face unemployment and poverty, they’re told to buck up and tough it out. When banks and investors stand to lose out because they gambled (that’s what investing is) on the wrong investments, they get money thrown at them. Germans are widely opposed to bailing out Greece, but if they don’t, they’ll be bailing out their banks.

Greek prime minister Georges Papandreou has warned default will be catastrophic. Very true, but sometimes that’s exactly what’s needed to right the ship of state. For the Greek people who’ve been let down by their government and in some ways their culture, whether they go down by way of default or unsustainable debt, it’ll be catastrophe either way. They were let down by their government (the previous conservative administration) because it used Goldman Sachs’ expertise in deceit and underhandedness to hide the amount of debt they were accumulating. Let down by their culture because of a bloated civil service and widespread tax avoidance where doctors are able to claim annual incomes of $25,000 because they’ve bribed the tax authorities to look the other way.

It’s important to note that the Greek government could’ve continued on its merry profligate debtor’s way if the financial crisis of 2008 hadn’t intervened to throw a lightening bolt into the endless growth bubble. That’s why you’re supposed to save for a rainy day, make hay while the sun shines, bury your acorns in fall to get through the tough times of winter. Most people are aware of the half of Keynesian economics which says countries should deficit spend in times of recession to keep their economies going, but few remember the other half where he said they should put money aside during good times to have available during hard times.

The problem of excessive sovereign debt has arisen because dominant bankster economic philosophy over the past few decades requires that taxes on the wealthy and corporations be low which serves to starve government of revenues and simultaneously make it easy for governments to borrow because those with money have a lot of it laying around needing to do something with it. As mentioned previously, it’s a lot easier to use borrowing to make an economy look good than actually raise the necessary money through taxation. The borrowing is justified by assuming that a growing economy will make it easy to service the debt, and to a certain point, it will… until it stops growing, which inevitably must happen since nothing can grow indefinitely.

If world financial institutions actually wanted to help the people of Greece, they’d provide low or no interest loans to consolidate debt and an equivalent amount to finance infrastructure improvements and sustainable energy production to put people to work. They’d also force creditors to restructure their loans by extending their payback dates and lowering interest rates. Instead they are punishing the people with pay cuts, worsening working conditions, very high unemployment and increased taxes, all while the country’s elite continue to shirk their responsibility to help fund government. They are forcing a debt death spiral.

Ironically, default will change Greece in just the manner prescribed by the bankster community. The difference is that a lot of rich people will also share the pain and get hits in their deep pockets. Wouldn’t that be nice. And isn’t it about time. The banking system will be in crisis and lots of investors will get haircuts… well great, there’s too much money at the top, time to cut the elite down to a fairer, more equitable size.

The workers and salarymen and women will get hit hard, but they’ll also be able to start fresh and create a new society. Think about it: If a country is getting 40% of its budget from borrowing and suddenly that money is no longer available (that’s the percentage for America, I don’t know the exact figure for Greece) it will be a formidable challenge to keep the country afloat. The outsized civil service will be pared drastically. All government functions will be sliced to the bare bones. With the public sector starved for cash, the tax collectors will be, or should be, out doing their jobs with a vengeance. At least they won’t be spending a huge portion of their income on debt service.

It’ll be chaos and turmoil in the beginning with mass unemployment and poverty. In two or three years they’ll be back to some semblance of normality. In seven to ten years they’ll be going strong, starting from a much stronger, more equitable base. And it’ll be a warning to other countries to keep their books in order – including the US. And a warning to banksters and investors that they won’t always get bailed out.

GET A BRAIN, MORANS!

2011-06-16T09:25:00.001+07:00

GET A BRAIN, MORANS! or Doubling Down on Crazy

Those of you who frequent progressive websites like commondreams.org, dailykos.com, truthdig.com, alternet.org are familiar with the former statement which appeared on a sign carried by a smug, smiling young Teapartier. It speaks to the abysmal level of political discourse in America today.

The other seminal statement of regressive moranic politics; ‘Keep the government’s hands off my Medicare’, was shouted out by an old geezer at a town hall meeting held by his congressman.

Considering how well-liked Medicare is even amongst Repuglicans, even amongst idiot wingnuts who don’t even know it’s equivalent to socialized medicine, you’d think Repug leaders in congress would tread lightly when considering changes to the program. But no, they’re so full of themselves and giddy from their victory in the last congressional elections they’ve completely lost touch with reality and so Rep. Paul Ryan, head of the house budget committee, has come up with a grand plan to ‘save’ Medicare and reduce government expenditures by thoroughly gutting the program.

His plan, touted by the mainstream media and conservative punditocracy as a bold move to balance the budget involves replacing government guaranteed benefits with a voucher system in which seniors receive a fixed (inadequate) amount of money and are sent out into the private insurance market to get coverage. The fact that the medical insurance companies are widely despised by the population doesn’t seem to register with the Repugs so they voted en masse, in both the House and Senate, to back Ryan’s Medicare disaster.

The reason why they needed to gut Medicare was so they’d have the money to provide additional tax breaks to the corpses and the wealthy, supposedly to create jobs. Considering the many corporations that are enjoying record profits today that are not only not paying taxes but getting refunds, how much lower can taxes go? Moreover, American corpses are sitting on $1.6 trillion of cash reserves they don’t know what to do with because so many of the people who ordinarily buy things don’t have any money. When they do create jobs they’re mostly in other countries.

The US now has the greatest income disparity of any developed country. The wealthy have so much more than they can productively use, that most of it goes to speculation. Americans can thank tax policy that favors the flush for a large portion of high gas and food prices. Whereas in normal times most commodities futures contracts are purchased by end users, today 70% are bought by speculators.

Oh, I forgot, the reason why the Repugs want to slash any program that has anything to do with helping the people at large is because the budget is out of balance and the deficit needs to be tamed. That’s also why they want to reduce taxes on the wealthy… Aha! You don’t get the connection between lowering taxes and balancing the budget? Don’t worry, it’s called Voodoo Economics and thus a bit complicated for those of us non-morans.

In order for the Repugs to play to their dingbat base they’re getting themselves so far out on a limb, it’ll take a heroic rescue on Obama’s part to save them from electoral disaster. But not to worry, Mr. O is so good at compromising principles he either never had or only pretended to have for the purpose of campaigning, he’ll do a fine job at either saving the Repugs’ asses or giving up so much to wingnut fanaticism it’ll be the same as them winning.

Whereas Ryan’s budget doesn’t even pretend to balance the budget for another 50 years or so, there is a plan put forth by the 81 member congressional progressive caucus that would get the country’s books in order in about ten years. It’s simple really; tax stock transactions, capital gains, corporations and the wealthy; reduce military spending; set up a public option for health care and negotiate better prices for prescription drugs and presto, just like magic, the budget is fixed. Chances are, if you get your news from the corporate media, you’ve never heard of it: It doesn’t fit their worldview so gets no air time.

Seems to me the captains of the ship America must have a strong compulsion to run it aground, not to mention trash the world at large, because they can’t all believe the drivel coming out of their mouths, can they? I mean, true morans aren’t that stupid, are they?

Climate Change

2011-06-06T09:35:00.000+07:00

Climate Change

Tepco, the operator of the Fukushima nukes has finally admitted that three of its reactors suffered meltdowns in the aftermath of the earthquake-tsunami. In fact, one of them started melting down from the earthquake alone before the tsunami hit. They keep pouring water into the reactors to try to cool what’s left of the fuel rods but there are leaks so the contaminated water is entering the environment. Radioactivity is 50 times normal in seaweed in the ocean near the plant.

The whole scenario was played up as totally unexpected and impossibly unlikely so not worth considering in the construction of the plants or for that matter in the development of the surrounding urbanized areas. People, unfortunately have short institutional memories. Up on the hillsides facing the ocean in northeast Japan there are stone markers, some dating back to the 1600’s, which clearly state, Do not build below this line. Still, in a densely populated country like Japan, it’s hard to imagine they’d leave large areas of their coastal plains to low-value land uses such as farms, forests and recreation because of events that might happen only once every 300 or 400 years.

But they do happen and all indicators point to them happening with increasing frequency. That includes the frequency and intensity of earthquakes which some scientists believe are exacerbated by global warming. But not to worry, according to the fossil fuel industry, the US Chamber of Commerce and the Repuglican Party, climate change is either a hoax or something that’s a lot cheaper and easier to adapt to than change our lifestyles for. You know, if it gets too hot you just crank up your air-conditioner. If that means burning more coal, well, it’s the cheapest source of energy so we can’t forego its benefits just because it intensifies the effects of global warming.

Last winter America experienced its largest winter storm ever, but what’s the big deal; everybody gets a vacation from school or work and gets a little exercise shoveling snow. It may be blizzarding outside but you’ve got your fossil-fueled heater to snuggle up to.

The Mississippi River is experiencing a 100 year flood but events of that severity are likely to become regular occurrences so maybe the people there should adapt by raising all the buildings in the flood plain up on stilts. There’s probably only ten or twenty million of them. Of course, there’s always the small matter of surviving massive tornados in which houses on stilts wouldn’t fare too well. You’d probably need to rebuild all the structures in tornado prone areas with steel and concrete… hmmm, adapting seems not so simple.

Anyway, in order for the vast majority to live the good, profligate, carbon-rich life a small fraction will have to be sacrificed to the weather gods. It’s probably not worth spending all that money adapting to something that might happen only every 20 or 50 or 100 years, let alone try to reverse the march of global warming, so the answer, I guess, is to pray you’re not counted amongst the unlucky ones… Dear God, If it’s going to happen, please let somebody else get the shaft.

Standard and Poor' Gets Religion

2011-04-25T16:45:00.003+07:00

S & P, one of a handful of international rating agencies, has downgraded America’s status based on its $14 trillion national debt and $1.6 trillion 2011 deficit and the political inability to do anything about it. This is rich coming from an outfit that gave top rating to every toxic, junk-status mortgage backed security that came its way before the crash. It’s to be expected that you give a high rating to someone who’s paying you to rate them, otherwise they’ll find someone else to pay off for their Triple-A. All that aside, being craven and duplicitous most of the time doesn’t totally detract from your voice if you happen to get it right once in a while, so let’s take it from there.

Both parties objected to S &P’s downgrading, insisting they have plans to tackle the deficit. The Repugs want to save $400 billion a year by eviscerating, emasculating and slashing to the bone every federal program that has anything to do with helping anybody but the top few percent of income earners, who in fact get a tax cut. How cutting taxes for people who already have far more than they know what to do with can be part of a deficit reduction plan is something only a true believer Repug can understand. We know they are full of crazy, but that’s who the people elected, so that’s where the US is at.

Obama wants to save $360 billion a year by reinstating income tax rates for everybody earning over $250,000 that were in place before the Bush tax cuts. Either way that only deals with a quarter of the deficit. The Repug plan projects a deficit of $23 trillion in 2021, Obama’s plan about the same. Moreover, both plans are wildly optimistic in projecting a far healthier economy than anybody outside of government and in their right mind would dare to, but that’s part of the game.

Neither side wishes to deal forthrightly with the problem because nobody in politics wants to take credit for raising taxes. It’s not hard to understand why since it’s far easier to borrow to make the economy temporarily look good than tell the truth to the American people and be voted out of office at the next election. Sure, everything will look hunky-dory when you are spending borrowed money, but it’s like heroin addiction. You feel really great when you are high so that in contrast everyday life is hard to deal with so you cannot stop, you have to have more. You also build up a tolerance, so need ever increasing doses. At a certain point, the only thing that can save your life or sanity is cold turkey.

So instead of being realistic or practical it’s all left to the future to sort out. Think about that number, $23,000,000,000,000. Interest rates are relatively low now, but the US government and the Fed are making every possible move in the direction of increasing rates. That isn’t their stated purpose, but when you print shiploads of money and issue vast amounts of debt you lessen its value and increased interest rates is the only logical, possible outcome. So, figure a modest average of 5% interest on the debt and you come up with $1.25 trillion a year in debt service. If the administration’s (seeming) goal of cheapening the value of the dollar jacks up interest rates an additional two or three percent then service of the debt will amount to half of the current budget and an obviously untenable situation.

There are four, more or less equal parts to America’s $1.6 trillion budget deficit. The first is the military. Since 2000 the defense budget has doubled, amounting to about $400 billion. Obama recently announced, to great fanfare, a $78 billion reduction in military spending; except when you looked at the fine print it didn’t actually reduce the amount spent, only the projected increase was less than planned. So clearly not serious about deficit reduction.

A second part is health care spending – Medicare, Medicaid and prescription drug benefits. That one’s easy; single payer would save about $400 billion in overall health spending. Admittedly, not all of that is direct federal savings but a lot of it is.

The third part is Bush’s tax cuts. Obama wants to end the cuts for the wealthiest Americans, that’s another $400 billion. But really, there’s so much money sloshing around at the top, the entire deficit could be erased if corporations and the wealthy were obliged to pay their fair share of the tax burden. A combination of raising the top rate for millionaires and billionaires, a financial transaction tax, taxing capital gains the same as ordinary income, a corporate income tax which corporations actually paid and a wealth tax on the richest Americans would easily and painlessly completely eliminate the deficit. Considering the top 1% is sitting on assets of $19 trillion, just an 8% wealth tax alone would balance this year’s budget deficit of $1.6 trillion.

Finally, there’s the recession which has reduced tax revenue. Yes, corporate profits and the stock markets (headed for soon-to-burst bubble territory) are way up but they don’t pay much in taxes so that doesn’t help the budget much. There’s nothing on the horizon which suggests an end to the recession in the next few years, but at $400 billion that’s a deficit charge that’s relatively easy to sustain. Besides, that’s the only part of the deficit that is legitimate, the rest is all based on a lack of political will and common sense combined with cockamamie wingnut anti-tax insanity.

Instead of actually doing something to rein in the deficit, Obama and the Repugs will take a chainsaw to slash Social Security, Medicare and every program that benefits everybody below the top few percent. Why do I group Obama with the Repugs? Of the two people he chose to head his bi-partisan deficit commission, one, former senator Alan Simpson of Wyoming, positively despises Social Security, the other, Erskine Bowles, the nominal Democrat who served in the Clinton administration, is a fellow traveler. So even though SS has absolutely nothing to do with the deficit, they suggested serious cutbacks to the program. With $2 trillion in the bank, SS has all the money it needs for another 25 years and a little tweaking of tax rates will carry it decades further in the future. Obama talks about taking a stand to protect SS and other programs, but I don’t believe him for a minute. The only things he is good at are oratory and compromise.

The US is blithely and obliviously headed for a morass of its own making that could ultimately destabilize the whole world economy.

Fukushima Casualties

2011-04-20T16:31:00.000+07:00

Fukushima Casualties

There are two socio-economic casualties of the Fukushima aside from the obvious spread of radiation. First a few comments on that. It’s disingenuous to compare CT scans and X-rays to atmospheric radiation since a one time zap is completely different than having a radioactive particle lodged in your body. Once ingested each different element migrates to a specific part of the body – radioactive Iodine, for instance, goes to the thyroid – and continually and cumulatively discharges its carcinogens.

We also often find exposure compared to background radiation, as if it’s no big deal. What they don’t mention is that most background radiation is a result of nuclear testing; it’s not something people have always lived with, and, as mentioned previously, there is no safe level of exposure. All radiation causes cancer; minimal exposure causes minimal cancers, but since it’s all cumulative, every little bit increases your chances of developing the disease.

One casualty of Fukushima is globalization itself. The concept of globalization encourages manufacturers to scour the globe for the cheapest and best possible location for fabricating and/or assembling each individual part of a complex whole. This has caused a lot of grief for Toyota, which has had to stop or slow production of its vehicles in plants around the world because of the earthquake/tsunami. Sometimes a part is manufactured in only one location and if that one plant gets washed away in a giant tsunami, well everything shuts down.

Toyota also pioneered just-in-time manufacturing. Instead of producing and then storing parts in warehouses for eventual use, parts are delivered to the assembly line just minutes before they are to be used. As a result there is no leeway, if any part of the supply chain breaks down the whole edifice shuts down. It’s a very efficient method of manufacturing, but as we see subject to total breakdown when things don’t go exactly according to plan.

The other casualty is the Nuclear Renaissance, the return to the purportedly ‘green’ energy source, which has been dead in the water for decades because of a multiplicity of factors. Fukushima won’t stop China and other countries, rich and poor, from building nukes but it will certainly slow the process. It will also increase dependency on fossil fuels just when we are approaching peak oil crunch time.

As we are now seeing, in the frantic attempt to sustain the endless growth paradigm, ever more delicate, difficult and dangerously placed reserves are being developed. While BP was guilty of gross negligence in the Gulf of Mexico blowout, the proliferation of drilling around the world in those marginal areas will almost certainly result in additional catastrophic pollution events. That’s in addition to the damage done in some processes even when all goes according to plan, as in the poisoning of groundwater that results from using hydraulic fracturing in extraction of gas from shale deposits.

All in all the environment is in for some serious thrashing and trashing.

Obama the Disappointer

2011-04-15T10:37:00.002+07:00

Obama has declared his candidacy for the 2012 elections... and it’s only 18 months before the poll takes place. America’s excruciatingly long and drawn out election season is one of the tell-tale signs of American political ossification. The process is hopeless; I can’t see anything good or reasonable or logical coming out of the congress or the president today. To do it right there needs to be regional primaries so candidates can focus on one area instead of wasting time and energy jetting back and forth across the country. One per month for four months starting in May of election year would allow campaigning to start at the beginning of 2012 instead of spring of 2011. Makes too much sense so can’t happen.

Mr O has three things going for him. For one, he’s a great ambassador to the world. He’s a very calm, steady and likeable guy and, as a representative of a long exploited and repressed minority, a great testament to the potential of American democracy. Compared to Bush in this regard, he’s a minor deity.

He’ll appoint decent people to the judiciary. If a Repug gets elected, it’ll mean another generation or two of feed the rich, starve the poor decisions from the bench.

Finally, most of his competition ranges from the laughable to the risible. The ones that are halfway reasonable and/or competent will have a difficult time getting through the tea-party electoral gauntlet. If a thoughtful, charismatic, moderate Repug showed up he or she’s likely to be toast.

At this point, I can’t see many thinking progressive people voting for Obama; rather, as true of every election for decades, they’ll be voting against the fearsome and/or cartoony right-wing opposition. I can’t think of a single major political initiative or stance that Obama’s taken that meets my standard of forward looking or compassionate. After compromising and kowtowing to the opposition while slamming and slandering his base, the people who worked for and voted for him, the so-called enthusiasm gap is wider than ever. Once again, Democrats, progressives, people who care will have a choice between crap and disaster.

The epitome of Obama’s disconnect from the reality of the common folk, the people who elected him was his choice of Jeffery Imelt, CEO of General Electric, to head his commission on jobs and competitiveness. GE is good at creating jobs, only most are in other countries, not in the US. The one area they have been hiring in is accountants who jobs it is to find legal loopholes to avoid paying their fair share of taxes. And at that they’ve been doing a great job. GE enjoyed profits of over $14 billion last year – five million earned in the US - but not only isn’t pay any taxes but getting a $3 billion refund.

There are all kinds of reasons why the US government thinks it needs to subsidize one of the largest, most profitable corporations in the world, but none of them are good. All of them are based on the wholesale purchase of government by the wealthy and powerful. They have their cockamamie supply-side theories and arguments for feeding the rich – they’ll create more jobs – but that has repeatedly shown to be ridiculously off the mark. Right now the country’s wealthiest citizens are sitting on $19 trillion of assets, while the corporations have nearly $2 trillion of cash reserves. How shoveling more money at them is suddenly going to create jobs is a conundrum only a wingnut teabagger could grasp.

GE also got billions from the bailout money since at one point they were making half their profits from financial services. So, funding for food stamps, Medicaid for the poor, Pell grants to enable more people to attend college, relief for people suckered into taking out mortgages they couldn’t afford to pay back, aid to the states who are in dire financial straits? Nope, we just don’t have the cash. Welfare for the world’s richest corporations and tax breaks for the already fantastically wealthy when the government is running a deficit equal to 12% of GDP; no problem, they obviously deserve it.

If deficit reduction is one’s goal, there is no way any amount of cutbacks on programs for the people at large can make up for the wealthy and corporations not paying their fare share of the cost of government. Neither can any amount of economic growth make up the difference without raising taxes on those who can afford to pay. Moreover, it’s living in Fantasyland to think the US can continue to run huge budget and trade deficits while printing oceans of money without the bill someday coming due.

Since I began writing this post Obama has gotten populist. Just after he declares his candidacy he says we’re going to tax the rich. (Where’s he been since his election in 2008?) We’re going to reduce the deficit by $4 trillion in 12 years, he says. Why stretch it out over 12 years, you ask, why not just say $340 billion a year? Well, I guess, because $340 billion doesn’t sound like much against a $1.6 trillion deficit, not even 25%, in fact.

Obama’s not leveling with the people – he obviously thinks it’s not politically tenable to tell the truth, assuming he does understand the situation – but that’s not anywhere near enough to tackle the deficit. Concurrently, deficits are also good for politicians since they make it seem the economy is doing a lot better than it really is. I mean, if I could borrow ten thousand dollars to gild my lifestyle, I’d be feeling great... until the bill came due. At this point the bill will not only be a crushing debt burden but a wholesale crash of the economy.

The catalyst for the coming financial implosion will come from rising commodity prices. As the value of the dollar slides, the price of commodities, since they are priced in dollars, will rise and increase inflation in America. As the price of oil, the largest component of America’s trade deficit, also moves up because of instability in producing regions combined with resource depletion, those rises will be intensified and the US will run hard up against an intractable, unsustainable situation. Rising inflation, according to current economic thinking, will require rising interest rates which will then increase the burden of servicing America’s huge debt.

Obama’s now only tinkering with the problem when the situation is just dire, which only makes it worse in the long run. When the situation becomes catastrophic, because it wasn’t dealt with when only dire, nothing less than great sacrifice on everyone’s part will make a difference. For every dollar of ease gained from borrowing, there’ll be equivalent pain in paying it back.

There only alternative to repaying loans is printing money and thus cheapening its value, which then brings an inflation death spiral. 2012 will be a tough year economically and an albatross around Obama’s electoral neck, but the Repugs will only have their failed policies of the past to cling to and thus look even worse than Obama.

The one thing the Repugs are good at is stealing elections and since no prominent Dumbocrat has ever had the courage or commonsense to call them to account for their thievery, not even those who’ve had elections stolen right out from under them, you can bet if the election is close the Repug will win.

I’m not optimistic. My cynicallity quotient is in the stratosphere. I’d hardly vote for Obama because he’s a likable guy and will appoint a few judges. Better to give the whole government to the Repugs and hope for a revolutionary backlash. If the people of Yemen can rise up, why not Americans?

Fukushima Going Down

2011-04-04T10:06:00.001+07:00

Excessive radiation has been found 50 kilometers from the plant, the exclusion zone, however, is only 20 k. If they expand to 40 k, 170,000 people will have to be evacuated, probably permanently. The exclusion Zone around Chernobyl is half the size of New Jersey. Moreover that excessive radiation found outside the Fukushima exclusion zone would be over the limit allowed inside the Chernobyl zone. In other words, they are being very lax about their citizens’ safety.

Previously Japan’s sacrificial plant workers were limited to 100 millisieverts of exposure. At that level, one in a thousand will develop cancer. At the new limit of 250, that proportion goes down to one in four hundred. That’s not bad odds, or wouldn’t be if it was the only toxin people were subject to in their daily lives. But add up all the nasties in water, food and air and give them a couple of decades to do their damage and the proportion goes down to 1 in 7. It wouldn’t be such a big deal if cancer was a quick and easy death, rather than the long drawn out and debilitatingly painful one that it is. However, the plant workers are being compensated; previously earning $100 to $200 per day, they are now receiving $4000 per day. Hopefully they’ll live long enough to enjoy their new found riches.

In the process of dousing the stricken reactors with large amounts of water, one thing they are doing is creating radioactive steam, evidently able to spread far and wide. They’ve also been creating contaminated water, part of which they need to store and somehow dispose of safely, another part is seeping into groundwater and a lot of it is draining into the sea.

Three hundred thirty meters from shore the water was, at last report, more than 4000 times over the limit and that number is growing every day. That seems very far from shore to be so contaminated and must entail a gusher of a leak. Radiation twice the limit has been found 40 kilometers from the shore so a massive contamination of the sea. No problem, the authorities say, the ocean will dilute it. Yes but how many mutant fish will emerge in the meantime?

Latest news is they found a crack in one of the containment vessels which might be the source of the leak, or maybe at least one source. They really don’t know for sure where it’s coming from. And it’s too dangerous to be able to spend the time, get up close and really find out why it’s leaking. It may go on for a long time. It may render a large part of the Japanese coast off limits to fishing on a permanent basis.

If a country wished to take a chance on permanently polluting its land, that would be their choice, but radiation knows no national boundaries. If Japan, one of the world’s most technologically advanced nations can’t keep it together, how can the world possibly be safe with a whole bevy of developing countries embracing nukes?

To me, nuclear power is emblematic of the idiocy and insanity of modern corporate life and its sway over government of all stripes. Nukes are now more expensive than wind. It takes five to ten years to bring one on line compared to one year for wind. There isn’t a single privately financed nuke in the entire world, because no deep pocket financial institution in its right mind would put up the money without 100% guarantees from government. There isn’t a single insurance company that will cover the full costs of a nuclear meltdown. There is still no way to permanently dispose of nuclear waste and though the radiation in spent fuel is just as dangerous as that in nuclear cores, the spent fuel is housed in tin sheds rather than the foot thick steel walls of the containment vessel for the nuclear core.

There’s no CO2 produced in a nuke, but a large amount is produced in the mining and processing of Uranium and the people who work in that area have a much greater risk of cancer than the general population.

It doesn’t make any sense and it never has, but still, even after Fukushima, there are a lot of people who’re still pushing for nukes and a lot of countries that’ll continue to pursue the ultimate disaster of nuclear power.

Tsunami Warning

2011-03-21T10:41:00.001+07:00

I haven’t had much time to keep up with the blog lately as I’ve been working on a new book, Hitchhiker’s Guide to Enlightenment, but I had to take a little time off to comment on the earthquake, tsunami and nuclear meltdown in Japan.

It’s ironic that Japan, the country that’s suffered most from radiation has relied so heavily - 30% of its electricity - on nuclear power. It is also, of all countries, most subject to strong earthquakes. Something like 20% of all earthquakes over magnitude 6 on the Richter scale happen in Japan. As you’d expect, with that background, Japan is, relatively speaking, very well prepared for quakes. Forty story buildings in Tokyo swayed like palm trees but didn’t crumble.

However, at 9.0 that was the 4th strongest quake recorded since 1900, and the strongest in Japan in 300 years. It moved the entire country 4 meters to the east. That was not something you’d ever expect, at least not in your lifetime, so not something Japanese officials cared to plan for. But they do happen and with the consequences of nuclear meltdown so grave, even a 1000 year event should’ve been taken into account.

Moreover, with the very word tsunami derived from the Japanese, that’s also something they should’ve considered. There again, this wave was so outsized nobody there would’ve believed it could’ve ever happened. Nevertheless, when dealing with nuclear meltdown, the worst case scenario has to be part of the calculation. It’s not like when a windmill crashes and all you have to do is recycle the metal.

The government had been saying that radiation releases have been small and not dangerous, but now they are admitting spikes of unhealthy levels of radiation. One slick move made by the Japanese government was to lower standards for allowable radiation exposure when workers at the plant were getting over the maximum limit, otherwise they would’ve had to stop working. No big deal unless you’re one of the workers who might die from that exposure. More recently, they announced levels of radiation in food produced in the general area that were over allowable limits, but then said it wasn’t dangerous. Then why have a limit if there’s no harm in going over it? Some people feel there is no safe limit, that any amount is harmful.

The conventional wisdom has it that there was little radiation released at Three Mile Island and nobody died from it, in spite of the fact that cancers in the area spiked for a whole generation. It boggles the mind how the industry and their government enablers either believe their own lies or don’t care as long as there are profits to be made. After all, they have to breathe the same contaminated air as everyone.

Moreover, the industry, aligned with western governments is pushing nukes all over the world. Turkey, China, Pakistan, Vietnam, Indonesia, India, amongst several other countries, are all planning on developing nukes, so further meltdowns are inevitable. Take India for instance, it’s a great country with a lot going for it, but they haven’t been able to figure out how to provide toilets for more than half their population so those people just shit around, even in the big cities, so how the hell could they be trusted to safely operate a nuke?

Fortunately, this will force a rethink of nuclear power plans around the world, though many countries are certain to go ahead with them anyway. Not one single nuke would exist in the world today without government subsidies and exemption from full liability insurance in case of an accident. Not one single bank or investor in the entire world will finance a nuclear power plant without 100% guarantees. They take 6 to 10 years to build and cost a fantasic amount of money and now their power is more expensive than wind power. Still, many countries will continue to build them.

Meanwhile, four different units in the Fukashima complex have experienced serious explosions. The great irony is that the problem stemmed from the breakdown of the conventional pumping systems. The tsunami wiped out the electricity used to operate the pumps as well as the backup diesel generators. Now they are dumping in sea water. These are Hail Mary passes, acts of desperation, last ditch attempts to avoid meltdowns because once the containment vessel is covered in sea water it’s toast as a power facility. Billions of dollars down the drain and the country is experiencing rolling black outs because they now have a shortage of power.

Having four reactors out of control at the same time also seriously complicates matters because it’s hard to work on any one of them with the others so close by spewing their nasty stuff all around you. Moreover, the greatest danger comes not from the reactor cores themselves but the spent fuel rods. They may be spent for the purposes of use in the reactor, but they still contain a lot of radioactivity and generate a lot of heat and require water to be constantly circulating to keep them cool. And further, the spent fuel rods are not enclosed in thick steel containment vessels as the reactor core is and thus in case of overheating will spread their radiation very easily.

There area around those plants will become a permanent exclusion zone. Without protective clothing, nobody will be able to safely go near those plants as far in the future as one can imagine.

There’s been a feeling on the part of climate scientists for several years that global warming could have an impact on earthquake activity. If you remove heavy land ice in places thus lightening up those areas, while adding water to the oceans making them heavier, that may well increase frequency and intensity of quakes. I’m also convinced that withdrawing vast amounts of fossil fuels and water from the earth’s crust has an impact. Finally, the latest natural gas extraction technology – hydraulic fracturing – has shown to be exacerbating earthquake tendencies. The idea is to break up layers of shale to get the gas out. If you take a strong solid shale formation and shatter it into a lot of pieces it has to be destabilizing.

So it can only get worse. The world should prepare, however much it’s possible, for a wave of 100 year, 500 year, 1000 year natural events. And tough luck if you gamble on nuclear power and lose.

Revolution is in the Air

2011-02-21T10:17:00.000+07:00

Revolution is in the Air

Nobody would’ve believed just a couple months ago that protests demanding freedom and democracy would erupt across the Middle East, and that two long time dictators would be driven out of power with more to come. As it happens both were aided in their tyranny and kleptocracy by US approval and assistance but it isn’t just America’s long time ‘friends’ and promoters of ‘stability’ who are feeling the heat.

Changes in Tunisia and Egypt have inspired Libya’s people to try to end their 42-year-long nightmare with Gaddafi and Iran’s theocratic rulers are also facing demands for reform, the institution of fundamental human rights we all purport to believe in. The same freedoms America doesn’t mention much when the despised tyrant is our friend and is willing to do our bidding. Now that the people of Bahrain are clamoring for democracy you have the amazing spectacle of uprising in one of the richest countries in the area. So consider Bahrain, Yemen, Jordan, Algeria, Libya, Morocco, in addition to Egypt and Tunisia, the two who are already down, and you have rich and poor, secular and theocratic, Arab and non-Arab, almost the entire Middle East in flux.

Moreover there should be no doubt that the people of Iraq would also be deposing Saddam if Bush and Blair hadn’t jumped the gun. Instead of the few hundred Saddam would’ve killed trying to maintain power, Western action to stop the threat of non-existent WMD’s cost a million Iraqi lives and displaced another four million. To be fair, one should also take into account the number, probably in the thousands, of Iraqis who would’ve suffered in one way or another over the eight years since Saddam was ousted, but still, that doesn’t compare much to the million who died, or maybe even the numbers who are still dying nearly every day from insurgent attacks and suicide bombers.

Just two months ago the conventional wisdom had it that the Arabs weren’t ready for democracy, or interested in electing their leaders; that they were better off with autocratic rulers. Israel could also tout itself as the only democracy in the area, though that’s not really true since Lebanon is governed by elected leaders and the Palestinians held free and fair elections in 2006. The reason why the Palestinians don’t have a legitimate democratic leadership now is that Hamas, the party they chose back in 2006 by a wide margin, didn’t meet with the approval of the US or Israel, thus began the purposeful economic and political squeezing and strangulating of the Palestinian people.

Moreover, the word democracy can only be applied very loosely to what takes place in Israel. In the first place, while Arabs make up 20% of Israel’s population they hold only 5% of the seats in the Knesset, Israel’s parliament. That’s not to say democracies have to be perfect, as anomalies are frequent. The US Senate in particular is one of the most glaring examples of inequality since a senator from California represents 70 times more people than one from Wyoming. But at least in the US there are some checks and balances. There are also countries like Malaysia where one group, the indigenous Malays, receive a lot of benefits from the state which the Chinese and Indians, though they they’ve lived in the country for more than a century and make up 40% of the population, don’t receive, but that’s not a true democracy, and neither is Israel’s. True democracy absolutely requires that all citizens have equal citizenship rights. It’s not possible for a democracy to have second class citizens as the Arabs are in Israel.

It is not possible, as far as I’m concerned, for any country based on a single religion or race to be a true democracy. America’s founding fathers understood that more than two centuries ago. They put an impenetrable (at least in theory) wall of separation between church and state and placed an absolute prohibition of a religious test for leadership or citizenship. There can be no exceptions: either all human beings are entitled to the same rights or they are not; there’s no such thing as a part democracy or sort of democracy or a democracy for one group while others are discriminated against or subjugated.

Meanwhile in the midst of clamor throughout the Middle East for freedom and democracy, the US once again comes down on the wrong side of history in vetoing a UN Security Council resolution condemning Israel for continued settlement building in the West Bank. The resolution was sponsored by 130 countries; the Council vote was 14-1 against Israel. America’s UN rep said we too condemn settlement construction, we just don’t think this is the place to bring it up. Bullshit. Pure cowardice. Once again a light shining on America’s hypocrisy. We believe in all that human rights and stuff… but only when it suits us politically. As long as we are beholden to and afraid of Jewish donors and the right wing Jewish lobby, then humanity be damned.

What a terrible message to send to all those millions on the streets, all those people putting their lives on the line for freedom to say justice for Palestinians is not important, that protecting Israel from censure for acts that arrogantly flout international law and norms and that are almost universally disdained if not despised around the world is necessary and correct in a craven political calculation even if it’s not politically correct. The US used intense pressure to try to stop the Palestinians from bringing the measure up before the Security Council because Obama didn’t want to be shamed and embarrassed by vetoing it, but at this point the Palestinians have nothing to lose. Every day they see their land being usurped and colonized and their opportunity for a viable state diminished.

It took a long time for Apartheid to be vanquished but it had to end because it was fundamentally unfair, an affront to humanity. Israel is in the process of making a two state solution impossible so its Jews will eventually wind up with a single state they will have to share with the Arabs. It won’t come soon or easy, but there is becoming no other option. Apartheid was brought down by world pressure in the form of sanctions, boycotts and divestment. The same will happen to Israel.

On another topic, I have to bring up the case of Raymond Davis the American ‘diplomat’ who killed two ‘thieves’ in Pakistan and is being held in that country on a murder charge in spite of America insisting he has diplomatic immunity and wide ranging threats if he isn’t released into America’s custody.

In the first place, it is widely known outside America that the two ‘thieves’ were Pakistani intelligence agents who were trailing him. Also, in one account I read he shot them in the back so hardly self-defense. He had lots of spy devices on his person when arrested including a GPS that was used to designate targets for drone attacks. Two days before the incident the US embassy sent Pakistan a list of employees for the record, something they are required to do by law. Davis’ name wasn’t on the list. The day after the incident, the embassy sent Pakistan a revised list with his name on it. So hardly eligible for diplomatic immunity. In fact, he’s a security contractor. Besides, there is no immunity for serious crimes; diplomats don’t get away with murder.

To bring a personal threat from Obama demanding his release into US custody means the US is deathly afraid of what Pakistan will learn from him. So great fun as far as I’m concerned.

Palestine Papers and Arab Revolutions

2011-02-02T14:35:00.000+07:00

The latest revelations to come from Wikileaks involve secret negotiations in the Middle East peace process. Two points in particular were revealed.

The first has to do with a breathtaking and unconscionable betrayal of the Palestinian cause by the leaders of the PLO who are in control in the West Bank. They just about gave away the farm in a futile effort to please and placate the Israelis. They offered to give up the right of return of Palestinian refugees. The right of return is enshrined in international law. Refugees must always have the right to return to their former homes.

They agreed to accept nearly all of the illegal Jewish settlements in Jerusalem. All settlements are illegal in international law. It would be very hard to have their capital in East Jerusalem if it was surrounded by Jewish settlements.

They collaborated with the Israeli secret police in the murder of their own citizens who happened to be their political opponents. The idea, I guess, being that if Israel feels more secure it’d be more likely to agree to an independent Palestinian state.

None of those concessions had the slightest impact on Israeli intransigence. Thus the other half of the revelations gave lie to the incessantly repeated Israeli mantra that they have no partner for peace; that they really want peace but the Palestinians are not interested. The Papers show that no matter how far the Palestinians went it wasn’t far enough for Israel. The reason is simple: Israel cannot agree to a viable Palestinian state because they’ve populated the West Bank with hundreds of thousands of fanatic fundamentalist Jews who will fiercely and violently object to being removed. One has only to look back at what happened in Gaza when Sharon removed the settlers from there. Though Gaza has no significance in Jewish history the 8000 Jews living there acted like their hearts were being ripped out and fed to swine. There were 8000 Jews living on 40% of Gaza, 1.5 million Arabs on 60%; for most Israeli Jews it was a perfectly reasonable and fair division of land.

Just in the last 20 years Israel has built homes in occupied Palestine for nearly 400,000 Jews. Forty percent are economic settlers; they are there because Israel subsidizes the cost of settlement housing to encourage Jews to move there. Why would they purposely want to encourage Jews to settle on stolen land? That construction has taken place under so-called left wing governments as well as right wing. They’ve spent billions of dollars colonizing Judea and Sumeria, Israel’s name for the West Bank, how could they walk away now?

This is all happening because 3000 years ago God said it belonged to the Jews. Presumably, He also implied that in securing the land for Jews it didn’t matter how mean, nasty or ruthless they had to be or how many other non-chosen people had die or have their lives ruined or how far they had to veer from basic human standards of justice or fairness. God must also have stated somewhere in the Old Testament, though I’ve never come across the actual passages, that they could set aside any thought of love, compassion or righteousness in the pursuit of their amassing of real estate.

As far as I can tell what they want Palestinians to accept is either to move to Jordan or some other country, maybe someplace in South America as Secretary of State Clinton suggested in the leaked papers, or to allow themselves to be herded into three small Bantustans in the West Bank where they have no international borders and so can ever remain under the thumb of Israel, not to mention provide a cheap labor source for the jobs Jews don’t want to do. They would effectively be third class citizens of Israel. The 1.2 million Arabs who live in Israel proper are, to all intents and purposes, second class citizens. They are not even equivalent to blacks living under segregation in the American south since in segregation there was at least the pretense of ‘separate but equal’ treatment. I’ve already detailed the institutionalized discrimination of Arab citizens of Israel so I won’t bore you with more repetition.

Meanwhile, Israel exonerated itself in the killing of nine Turks, including one who had dual Turkish/American citizenship, of any wrongdoing in the raid on the Gaza aid flotilla last year. Of course it was a totally impartial investigation. No need for an international commission, they would always be hopelessly biased against Israel. The commandos who participated in the raid were not allowed to testify, but that’s not important since we all know they have the utmost respect for the lives of all people, even the non-chosen.

Meanwhile, America’s best friend and bulwark of stability in the Arab world, Mubarak of Egypt, who’s become adept at Bush-type elections over the past 30 years he’s been in power, is having a few problems inspired by the revolution in nearby Tunisia. It seems in spite of his consistently winning elections by wide margins, the people at large actually despise him. But he’s America’s friend, so what’s a few stolen elections between allies?

A week after the start of protests it looks like Mubarak’s end is certain. The Egyptian army has said it won’t fire on protesters, so there’s nothing to stop the anti-government growth. The Tunisians called their uprising the Jasmine Revolution but a more apt term would be Facebook Revolution because it’s the young, secular and world-minded who made it happen. Same in Egypt. While it’s true that Islamicists will gain power in true democracies in those countries, the major Islamic parties have stated clearly that theirs is a moderate way on the order of Turkey, where a religious party rules but the state remains staunchly secular and democratic.

Protests have also spread to Yemen, Sudan, Algeria and Jordan so we may be seeing a 1989 Berlin Wall movement. Amazing, fantastic, heartening; history in the making.

The biggest loser in these changes will be Israel. Netanyahu has already raised the dreaded specter of Islamic terrorists taking over Egypt and that the world therefore should get behind Mubarak. They are already talking about possible war with Egypt, but the reality is far more mundane. The first thing that would happen in a democratic Egypt is that they would no longer collaborate with Israel in the strangulation of Gaza. There probably aren’t a handful of Egyptians outside of Mubarak’s ruling clique who support that policy. Just the opposite, they’d probably open the border wide so Gazans could start to rebuild their shattered infrastructure and live like human beings again. They wouldn’t start a war with Israel but would no longer be the greatest of friends either. One more plank in the international isolation of Israel. In the past few weeks several South American countries have recognized Palestine as an independent state in defiance of Israeli wailing and gnashing of teeth.

Once again the US has been on the wrong side of history, supporting hated dictatorships for simple craven political purposes. The US Coddles friendly dictatorships, castigates enemies for not being democratic. Hypocrisy at its best.

One last thought on the wrong side of history front. It looks like the Haitian government will let Jean-Bertrand Aristede back into the country. He was elected by landslides twice, deposed and exiled by US backed coups twice. His party wasn’t allowed to stand in recent elections but he would have won in a landslide if it had. There may be hope for Haiti after all.

Polyglot Nation – An Overview of Cambodia Today

2011-01-06T10:03:00.000+07:00

The Cambodian people run the gamut of skin pigmentations from almost lily white to nearly black as African, but in contrast to America where people are hyphenated as African-American, Hispanic-American, Asian-American, etc., here they are all Khmer: there’s never a hint of differentiation. Closer to home, in neighboring Thailand, people of Chinese ethnic background, even those who are only half ethnically Chinese proudly refer to themselves as Chinese, whereas in Cambodia, if the response of an older Chinese-Khmer woman I know is a valid indicator, ethnically Chinese Khmer, when asked if they are Chinese, say no, I’m Khmer.

They also cover a wide variety of facial types. First there’s the round faced, broad nosed, medium dark indigenous Malay people, then the very dark, beak-nosed Indians who started migrating here more than a millennium ago, then the light skinned, slanty eyed Chinese who’ve come here consistently over the centuries. Those three basic racial types have mixed very easily since the first migrations so now most people reflect combinations of types. You see narrow eyes on round Malay faces, long Indian noses on light skinned faces and it’s still possible to see quite a few Khmers who look totally Indian or Malay or Chinese and that’s not referring to recent migrants.

That racial melding hasn’t stopped the general population from looking down on dark skin. They all want to be white which is undoubtedly reinforced by everyone who appears in Cambodian television having almost white skin. A lot of the women use all kinds of concoctions, some clearly toxic, to whiten their skin. The problem is it often makes them look pale and sickly, almost ghostly, as well as a little lighter in complexion.

More recently were the European colonizers who added their genes over the last century to the point where, for instance, you can see dark skinned people with green eyes. Finally, today’s immigrants are now mixing with the Khmer people who are coming at least partly as a result of one of the world’s most open immigration policies. The majority of my expat friends have mixed children.

Anybody who wants to live in Cambodia is welcome, though I have heard that immigration officers sometimes try to extort large sums of money from Africans in the visa process. Officially, anyone in the world who thinks they can make it here is welcome to try, there are no restrictions. Moreover, there are no onerous requirements that you leave the country periodically to renew your visa, you can renew it indefinitely within the country. As a result Cambodia has a very diverse expat community that’s becoming integrated into the larger society. In a sense, this may compensate a bit for the loss of so much of the country’s intellectual community in the Khmer Rouge era: people who wore glasses, for instance, were targeted as enemies of the state.

Also targeted at the time as potentially disloyal were the country’s Cham people who are Muslims. While Cambodia is overwhelmingly Buddhist, other religions are tolerated with very few instances of discrimination or communal violence. As opposed to the situation in most other neighboring countries in which many Muslims have been radicalized and/or are participating in violent insurrections, they are completely at peace here. I’ve never caught a whiff of anger or dissent on the part of the country’s Muslims towards the government or any public action to suppress them. People in leadership positions sometimes complain about Christian evangelizing - Seventh Day Adventists are nearly everywhere, as you’ll not be surprised to learn – but there too, there is no public disapproval of any religion. This is all part of the welcome and tolerance Cambodia has towards all who live here or desire to make it their home.

Easy immigration is one of the several reasons why Cambodia had the seventh fastest growing economy in the world over the past decade. Not many people are aware of that fact because the country is so small and is starting from such a small base it just doesn’t register. There are now, I would guess, between 150,000 and 200,000 foreigners living in the country.

They have several functions within the economy. For one, many provide essential services like English teaching in which native speakers cannot be substituted by local teachers. They also are employed in the many non-governmental organizations trying to uplift the nation. Others invest in the country by opening businesses. It is very easy to start new enterprises and there are no requirements of partial local ownership. That’s created a situation in which there are often more businesses oriented towards the expat community and tourist trade than can be currently supported; they are generally ahead of the curve. But it also can happen that lots of new businesses will attract the customers.

Both sectors, expats and tourists, are growing rapidly so I expect the new entrepreneurs are hoping customers will eventually come. Tourism has increased tenfold since I first arrived in 2001 from 200,000 per year to 2 million. I’m constantly surprised at the number of ordinary looking, middle aged, middle class people wandering around Cambodia in contrast to a decade ago when only the most intrepid traveler would dare to come. In Siem Reap, gateway town to the Angkor temples, that’d be expected since it’s one of the great wonders of the ancient world, but to see them in Phnom Penh and other small towns is still a shock to me.

The majority of tourists in Cambodia come to take in the temples and visit no other part. Angkor Wat refers to the largest and grandest of the temples, which were built between the eighth and twelfth centuries, but there are about half a dozen other temples of breathtaking stature and lots of smaller ones in an archeological park that encompasses about 50 square miles – 125 square kilometers. I spent three days wandering around the area, two days on bicycle, and still did not take in all the major sights.

The problem with having a business in Cambodia is the great difference between high and low seasons. Even if it does well in high season, it might only break even during the slow half of the year. If you’ve ever dreamed of opening a bar, for instance, with five or ten grand you can be in business in no time. If you don’t make a lot of money it also doesn’t take a lot to keep it going, though rents are going up in the more expat/tourist parts of Cambodia.

Finally there are the retirees like myself and others who have independent means so don’t need to work, who only add income to the country. We come for the low cost and ease of living: For as little as $150 or $200 per month one can rent a decent apartment in the heart of Phnom Penh. The other attraction is the very open and friendly nature of the Khmer people. Khmer parents teach their little ones to say hello to every white face they see.

It isn’t just the small timers that are attracted to Cambodia. There are now nine mobile phone companies, though there will soon be some consolidation happening since the market simply can’t support that many. Still, you have a spare $100 million and want to have your very own phone company? No problem, it’s your gamble. If you lose your wad in Cambodia, it’s no loss to the country.

The country now has 31 banks… and, once again, there’s always room for more if you’ve got the wherewithal. Most are internationally based with eight or ten countries represented. It’s hard for me to imagine where the customers will come from - Cambodia itself certainly can’t support that many - but the ease of opening banks may turn the country into an international banking center. Eighty or ninety percent of transactions are in US dollars which I imagine would facilitate banking on a more than national scale.

The recent run-up in property prices until the crash in 2008 was also a major factor in the country’s growth. Property prices went through the roof and helped to create a construction boom, which is continuing, if currently somewhat subdued. Even now with values cut in half, per square meter prices in central Phnom Penh are equal to those in Seoul, a first world city with eight times the population. I too got caught up in the enthusiasm and bought a small plot of land but now, if I could find a buyer, I’d be lucky to get back half of what I paid.

The run up in prices has resulted in a lot of displacement and land grabbing. The Khmer Rouge abolished all private property and then torched almost all the records, leaving land ownership very murky. In addition, whole families were wiped out, leaving many properties without owners. Out of that confusion, laws were passed which give anyone living on land for five years ownership rights. That worked fine when prices were rock bottom, but as soon as land became valuable, conflicts arose. In some cases, after villagers have lived on land for ten or twenty years, a well connected individual appears with paperwork saying he/she purchased the land ten years previously. The peons are powerless against the elite in that event. Urban squatters are booted off land they’ve lived on for a long time and are compensated, but not at anywhere near the current price level. Once the land is cleared, it is sold off to developers at high prices.

The other mainstay of the economy is the garment industry which now has more than 300,000 workers and is responsible for 90% of the country’s exports. That growth was facilitated by a quota system put in place by the US and Europe to insure that several countries could develop garment industries and not allow China take over the entire sector itself.

The entire industry is unionized. Many manufacturers hate that and do their best to harass union reps, as you would find in a lot of places. On the other hand, some retailers, The Gap, for one, purchase from Cambodia specifically to be able to say that their workers have union representation and are treated fairly. That fair-labor part of the industry makes up about 20% of output. Workers are not shy about asserting their rights and strikes and wildcat strikes are not infrequent.

In spite of a recent small increase, wages are still pretty dismal at $61 per month for 60 hour weeks, but for many workers that still provides a much better income than they could otherwise obtain. Even at that paltry sum, many workers send money home to their families. The unions have been fighting for $93 per month, what they calculate is a living wage, but that’s very unlikely to happen soon considering the fierce competition in the sector from other even lower cost countries like Bangladesh. They may, in the end, be able to convince the government to raise the minimum wage to around $75.

Cambodia expects to export nearly 4 million tons of rice next year but the sector is barely developed so almost all of that is in the form of paddy, or unmilled rice. The country is working on upgrading its processing facilities so it can sell milled rice at international standards but that’s still a ways off. Also lots more can be done to increase the harvest. Yeilds are higher in neighboring Thailand and Vietnam, world’s biggest and second biggest rice exporters, because they use a lot more fertilizer. They are also far more advanced than Cambodia in using irrigation so get three crops a year to one here. This is a very watery country so there’s no shortage of resources for irrigation.

While corruption here is all pervasive it seems to have no effect on the country’s pace of development and in some ways facilitates it. There are substantial informal fees involved with starting a business, but they make for a speedy process. In some ways living with corruption makes life easier. For instance, when I went through an agent to get my Cambodian driver’s license I was told I had to pay an extra $5 for an eye test since I was over 60. But, the fellow said, this is Cambodia so you don’t need to take a test only pay the five dollars. Passing an eye test would be no problem, but finding the office, possibly waiting around for service and especially dealing with bureaucrats with limited English language skills could be a real hassle, so a little corruption was a small blessing.

Since I had a valid license from another country I was issued a license without having to pass any kind of test. And if you get caught driving without one a simple bribe of $5 or $10 will get you on your way. Since the license costs $40, it’d probably be cheaper to pay an occasional ‘fine’ than be totally legal. Anyway I prefer having all my paperwork in order.

All in all, in spite of endemic corruption, intense poverty and immense social problems, the country is at peace with less conflict and unrest than almost all surrounding countries. And in spite of many and glaring deficiencies it is also more democratic than most in the region. When polled eighty percent of the people approve the direction the country’s going in. Without getting into politics, the current prime minister, now in power for 24 years, has brought stability and growth in a very free and open economy and the future is looking good.

Wikileaks Under Attack

2010-12-20T10:54:00.001+07:00

The Julian Assange/Wikileaks affair is taking on fascinating and bizarre twists. A couple weeks back it was announced that Assange was wanted on rape charges in Sweden dating back to August concerning two women. Then the chief prosecutor looked at the case and dismissed it out of hand, saying there was nothing there. A week or so later a prominent politician took up the cause, found a lesser prosecutor willing to take on the case and asked the UK to detain him for extradition to Sweden for questioning.

Wanting to play by the rules, considering the dangerous and precarious position he is in, he turned himself in to the police and asked to be released on bail. At first, at Sweden’s request, bail was denied saying he’s a flight risk; which is a bit disingenuous since he had just voluntarily given himself up.

Finally, after a week or so in solitary confinement, he’s granted bail of $320,000. The accusation, as far as I can tell, is that he didn’t use a condom in one case and in the other the condom malfunctioned. Seems like they’re going through a whole lot of trouble and asking a fantastic amount of bail money for an act of unprotected sex with two women who, as it happened, acted like nothing was amiss at the time: one went out to eat with him the same day, the other went to a party with him a day or so later.

At about the same time, the US government – obviously – pressured his web server to shut down the Wikileaks website and Paypal and credit card companies to turn off portals for donations. But this being the internet age, their pressure served to merely to harass Assange rather than actually prevent people from seeing the information since there are now over 1800 web sites that mirror the Wikileaks site. Moreover, an additional five international news organizations have the diplomatic cables and are also publishing the information.

Several prominent American politicians and news personalities have called for Assange’s assassination or that he be brought to the states on treason charges, which in fact doesn’t apply since he’s not an American citizen.

They can’t get back at him for his supposed crime of publishing confidential cables because there’s no law against that. The original leaker can be prosecuted but not Wikileaks or the New York Times which has also published the information.

He could be killed just for spite, but that’s not going to stop the dissemination of information. Assange is holding back an immense 1.5 gigabyte file which will be released automatically if anything happens to him. The file, in a 256 bit encryption and thus impossible to decode, has been distributed to hundreds of people who will receive the encryption key should harm come to Assange. In the words of his lawyer, it’s a thermonuclear device for the internet age - I can’t wait to see that one. Essentially, all the shit the US government is putting him through is just for fun, anger, revenge.

As for the diplomatic cables themselves, they are merely an embarrassment to the government. To anyone who gets their news outside the corporate media, there’s nothing the least bit surprising in the actual information. All the cables do is confirm the wide divergence from what the US government says publicly and what it does and thinks privately.

On another topic: While I’m at my computer I’ve got to bring up some of the austerity measures Greece and Ireland are having to make at the demand of the European Central Bank and the IMF in order to qualify for their bailout money. Greece is being required to water down union rules to weaken collective bargaining. You might ask how that is supposed to help the country balance its budget. In Ireland’s case it has to lower it’s minimum wage. One again you ponder how that can possibly be a solution to the country’s financial woes.

I guess the thinking goes like this. If you lower labor costs, investors will come with new business and the welfare cost of the unemployed will go down. On the other hand the government will also be collecting less taxes from poorer workers, so in reality it might be a wash. Meanwhile the financial overlords will have furthered their real agenda of austeritizing the workers so they can prosperitize the bosses.

Certainly can’t raise taxes on corporations or force bank owners to take a hit for the corruption and malfeasance of their bankster CEO’s or make the the wealthy pay a little more to balance the budget, that’s unthinkable.

Ireland Again

2010-12-06T11:05:00.001+07:00

Ireland Again

An Irish friend on my email list commented on my last post saying he agreed with everything I said except for my position on Ireland’s very low corporate tax rate, saying companies will leave if it is raised.

Shane can correct me if I’m off base but this is how I see the evolution of Ireland’s current economic problems. Ireland’s great boom before the recent crash was based on a combination of the mentioned low corporate tax bringing an influx of industry, an educated English speaking population and being part of the European Union so it’s products had access to a very large market. The country’s 10% tax, which some countries consider to be predatory, created an industrial boom and turned Ireland, which historically was an exporter of people, into an importer of labor.

Lots of new people needing homes and high economic growth – the Celtic Tiger - brought about the housing boom, in which, as I’ve read recently, a small house in Dublin was worth the same as a chateau in northern France. Like in America, speculation ran wild, leading to the inevitable bust.

With a more average tax rate, growth would’ve been slower providing jobs for the Irish but not creating a magnet for immigration and engendering the outsized economic boom. Ireland’s English speaking population was always going to give it an advantage in attracting American investment regardless of its tax rates. In an economic paradigm in which the highest growth is always the primary goal there will always be boom and bust. Moreover, low corporate taxes make balanced budgets impossible without placing heavy burdens on the workers.

Now we have the European Central Bank and IMF saying maybe investors in failing banks and bankrupt countries should take a loss. MAYBE! MAYBE! What a radical thought. Germany and other nations are keen for Ireland to institute severe austerity measures to get its finances together and take big loans to pay its bank’s debts. If Ireland defaults, Germany’s banks will suffer and that country will feel obligated to subsidize its banks directly instead of loaning the money to Ireland, so it’s easy to understand why it wants Ireland’s taxpayers to suffer.

Another facet of the world’s rotten banking system which is intimately aligned with mendacious government complicity has come to light in the past few days. Bernie Sanders, Independent senator from Vermont, who unabashedly refers to himself as a socialist, was instrumental in having a clause inserted into America’s recent banking reform which requires the Fed to disclose where it’s been spending its money. Ben Bernanke, Obama’s appointee to the Fed; sorry, Bush and Obama’s Fed choice, had been fiercely resisting that disclosure.

It’s not hard to understand why. The Fed printed up more than a trillion dollars ($1,000,000,000,000) to buy toxic assets from foreign banks. A German bank got nearly $300 billion, a Swiss bank around $270 billion. When it comes to saving them from their stupid decisions, the Fed will, evidently, go to the ends of the earth to find craven banksters in need.

Another couple trillion of printing press money went to American banks, Goldman Sachs by itself got $600 billion. This of course is all aside from the TARP bailout you all heard about. At the height of the banking crisis in 2008, Goldman was changed overnight from an investment bank to a retail bank (though, of course it really isn’t) in order to get free money from the US government and to protect the wealthy from their own malfeasance and greed. They’ve done so well with all that government money thrown at them, they’re making record profits and giving themselves record bonuses. Well, why not. If you’re conniving and smart enough to finagle vast sums of public money with the collusion of your government, you must deserve it. To the victor go the spoils.

To the rest go the dregs.

Ireland Et All

2010-11-23T10:37:00.004+07:00

Ireland Et All

Now it’s Ireland’s turn to seek a bailout from Europe and the IMF.
Actually it’s not the government that has the problem - though for sure
the country has a very large budget deficit and public debt - but it’s big
banks. Gotta save those big banks and the big money people who are
invested in them. If we just give them all the money they need to be
solvent, then they’ll start lending again and all’s right with the world.
They’ve already gotten $178 billion from the European Central Bank and $48
billion from the Irish government; about $5000 for every person in the
country. But that was not enough so there must be no end to feeding the
banksters. The Irish government is now about to get another $130 million
to help out banksters in need. Considering all the ‘financial instruments
of mass destruction’ - in the words of Warren Buffet, one of the world’s
richest men - floating around the system there will never be enough money
to make them right.

Why not just let them go broke, pay off depositors, the people who had no
role in their recklessness, avarice and malfeasance, and screw the rest.
If you invest in a bank, you are gambling on its value rising. If the bank
is worthless then you lose: It’s very simple, it’s called the free market;
or unfettered capitalism, you know, the kind that makes everybody rich,
except when it doesn’t. In that case, pure capitalism requires that you
make sure nobody on top loses money, otherwise the whole financial edifice
comes crumbling down. And where would we be then?

Well, why not let the greedy bastards go bust and then start some new
untainted banks. The world would still be awash in investment cash, what
with the great transfer of wealth in the past thirty years from the lower
classes to the upper, so there’d still be plenty of money to start new
banks.

Ah, but the greedy bastards own the governments, so that can’t be allowed
to happen. If a little guy runs into a string of bad luck, maybe loses his
job in a market where there is no replacement work, or has his house
foreclosed and winds up on the dole in Europe or on the street in America,
then that’s the breaks; government can’t be responsible for the comfort
and happiness of every citizen, besides, if you help the little guy too
much he’ll lose his incentive to work.
For the fat cats, on the other hand, it doesn’t matter how much you give
them: since they’re already rich, it doesn’t impact their desire to have
more.

We heard the term moral hazard quite a bit back in 2008 when governments
in much of the developed world rushed to the rescue of the banksters. If
you bail out banks that have taken excessive risks, then they’re likely to
do it again. Makes perfect sense. There’re lots of profits when things are
going well and free money from the state when your speculations go awry.

Back in 2008 when Lehman Brothers investment bank went bust without
government help, the media characterized the result as chaotic even
catastrophic for the markets. Chaotic for who? Well, the people who
gambled on the bank and lost and further, there was a loss of confidence
in the markets which caused a lot of stocks to go down and people to lose
money. The magic of the free market again. Is it the responsibility of
government to protect investor money? Evidently yes. So now, to avoid the
turmoil of its big banks failing and causing hardship for their owners,
Ireland is going to borrow tens of billions more to shore them up.
Meanwhile the people are seething with contempt for the banksters and
their government.

Ireland levies very low corporate taxes, which along with property
speculation caused the bubble that has since burst, but is refusing to
consider raising those rates in spite of the country’s terrible financial
straits. However, if you don’t levy taxes where the money is, you’ll never
have sufficient revenues to pay your bills except in extreme bubbles.
Those low taxes have been a problem for other European countries right
along who are now expected to put up the money to rescue Ireland’s banks.
They are demanding changes before they hand over the cash. When you are
out there hat in hand seeking a bailout, you don’t get to keep all your
prerogatives, so it’ll soon be faced with a hard choice.

America’s financial situation; huge budget deficit and national debt, is
equivalent to Ireland’s and its solutions quite similar. Obama’s Deficit
Reduction Commission, aka Catfood Commission – let them eat catfood – is
recommending large cuts in Social Security, Medicare and every program
that helps the people at large, while also recommending tax cuts for
corporations and the wealthy. After nine years of Bush tax cuts not
reviving the economy and not resulting in a balanced budget, it seems pure
insanity to imagine further cuts will now reduce the deficit.

But that’s where the US is at. The American people have just elected a
House of Representatives that has as it’s top priority screwing the
commoners so the wealthy can have more. And the country still has a
president who’s will to fight for you and I is as resolute as a wet
noodle.

Sometimes I look back at what I’ve written in the past and wonder why I
keep doing it. I sound like a broken record and expect maybe you are bored
by now. Over the years I’ve written a succession of times that the
American people won’t smell the shit – that stuff that’s just been
liberally spread around after hitting the fan - until it’s right in their
faces, and yet it still keeps coming and they still can’t smell it. I keep
writing that things won’t change until the situation gets really bad and
yet things keep getting progressively worse and the only real response is
the Tea Party which is proactively dedicated to making things even much
worse. Meanwhile, no matter how bad it gets, I can’t even imagine a
scenario in which the people will rise up to demand real changes.

Moreover, in contrast to Ireland which has instituted severe austerity
measures and raised taxes for many, the US is working on a tax cut. It’s
as if the two countries were not on the same planet. Forty percent of the
US budget now comes from borrowing. Imagine where you as an individual
would be if you earned $60,000 a year but borrowed so you could spend
$100,000. How long would it be before you had to make painful adjustments
and started paying that debt off.

As a government, you have another option, you can print money, though that
too is fraught with peril. If you go too far, your money becomes worthless
and that is especially problematical for a country that’s dependent on the
wealthy and other countries to buy your debt.

Some leftist economists downplay the deficit problem saying it’s most
important to get the economy moving because that brings in additional
revenue and thus brings the deficit down. But without adequate taxation
the deficit can never be brought under control. The other problem with
giving tax breaks to the wealthy, and personally I consider someone making
$200,000 per year to be wealthy, is that they will speculate with part of
it - something which has no redeeming value for society – and since they
already have everything they need, what extra they do spend will
unnecessarily tax the world’s resources and environment.

We need to encourage people who are already wallowing in plenty to work
less, earn less and spend less. This of course is impossible for the
leadership to contemplate since they are locked into endless growth as the
be-all and end-all of civilization. The fact that endless growth is a
theoretical impossibility doesn’t seem to register.

It’s all ass-backwards. You rescue the big banks so they can go on the
business of foreclosing people’s homes and charging outrageously usurious
interest on credit cards even though they are now able to borrow money
from the Fed at zero percent interest. You save them from their own
disastrous and dishonest actions and thus keep them from bankruptcy by
plying them with public money so they can pay themselves record bonuses.

It’s all bass-ackwards and it sounds like I keep repeating myself just to
have something to say. You’ve heard it all before. Why aren’t you on the
streets like the French protesting against sacrificing benefits for
commoners so the opulent class can have more? Why aren’t you all seething
with vitriol at the great bankster ripoff? Or if you are, what are you
doing about it? Why is it that only imbecilic Tea Partiers care enough to
take a stand?

I have no idea: well, maybe I do but hardly anything about American
politics seems to make any sense anymore. The only things that would make
a difference for the American people; single payer health care, true
banking reform, a solid effort to tackle climate change and approaching
resource depletion with a carbon tax and a massive program to convert the
US to sustainable energy are nowhere on the horizon; truly inconceivable,
truly unimaginable. A truly fucked up state of affairs. So be it.

China Acting Up

2010-10-02T10:11:00.000+07:00

China, the proverbial bull in the China shop, is acting petulantly and throwing its weight around.

First there’s the fishing trawler incident with Japan. News accounts refer to the Senkaku Islands as disputed territory, but they’ve been in Japan’s control since the late 19th century, so after a good deal more than a century, ‘disputed’ doesn’t usually include provocations. For all intents and purposes, after that length of time, control by Japan has to be accepted unless or until that country decides to relinquish that territory peacefully. It’s natural then that Japan would take offence when another country’s fishing boat encroaches on its waters. The Japanese patrol boats ordered the Chinese trawler to stop, but instead the Chinese captain directed a sharp turn and purposely rammed the two patrol boats. The trawler was then boarded and the Chinese sailors detained. The crew was released after a few days but the captain held.

China put up a holy stink about the matter and insisted the captain be released or Japan would suffer the consequences of a souring of relations and it would be all their fault. Exports of rare earth metals to Japan were temporarily halted as kind of a warning. As mentioned in a recent post, rare earths are essential in many high tech applications and China controls 97% of the market. Japan released the captain earlier than they wanted to try to placate China but it then demanded compensation from Japan and an abject apology.

This brings up three points. China is currently also threatening Norway over the possibility that a Chinese dissident recently sentenced to 18 years in prison for advocating democracy may be nominated for a Nobel Prize. In China’s eyes that would be interfering in its internal affairs and commercial relations would suffer if he’s given the prize. Now that everybody wants to make money there or use it as a cheap production base, and as a result has made it rich, China feels it can bludgeon its way to dictate other country’s policies, not even realizing or understanding that they are democracies and can’t order events like Chinese leaders.

The second point is the many territorial claims China has staked against other countries’ lands and international waters. China claims nearly all of India’s Arunchal Pradesh state in its northeast, though it’s always been a part of India, because it says it was historically Tibet. The entire South China Sea is claimed by China including areas that are practically in view of Malaysia, Vietnam, Brunei and the Philippines, though the furthest reach of their claim is nearly 1000 miles from the nearest Chinese province. It is an important shipping route for a large part of the world’s commerce and every other country considers most of it to be international waters.

The third factor is the country’s need to feed the nationalism it has been stoking for decades. This helps it deflect criticism of itself. If the government is seen to be weak in the people’s eyes they will feel a backlash. Maybe you noticed that all the recent strikes, which are illegal in China but were allowed this time, were against Japanese owned companies.

The second major front in China’s relationship with the world is its manipulation of its currency. By most estimates it is undervalued by 25% to 40%. That makes Chinese goods far cheaper than they otherwise would be and allows the country to sell a lot more around the world than if their currency was subject to the marketplace, as the currencies of all other major economies are. As a result of pressure last summer, China announced it would allow its Yuan to float more widely. This was a cynical ploy to stall and deflect American action; the currency has been allowed to rise only 2% since that announcement.

As a result, the issue is back on the front burner with the US congress threatening action against China via the WTO. Premier Wen Jia Bao made a speech recently to outline his country’s position. He said three things worthy of note. First he said there’d be widespread job losses and social unrest in his country if the currency was revalued. He went on to say America doesn’t produce anything anymore; and the US would have to buy from somewhere anyway.

On the first point he’s justifying Chinese currency manipulation by saying Chinese jobs are more important than jobs in other countries. China is exporting unemployment as well as goods. On the point of America no longer manufacturing anything, an undervalued Yuan obviously is part of the reason. If the Yuan were allowed to float freely and its value went up 40%, then a lot of US manufacturing would become competitive, especially if/when energy costs rise.

The example of Pendleton Woolen Mills is a telling indicator of America’s potential to be competitive. The company produces high end shirts. Some years back they closed their last factory in America because it cost a dollar more to produce in Oregon than China; that in a shirt that retails for $50. The hundreds of workers affected were very unhappy to lose their jobs, but bottom lines don’t give a shit about people. The Oregon plant was only 10% of their total production and it’s a profitable company so they could’ve easily kept the plant open. America can’t compete on items that are sold cheaply, but clearly could on more expensive quality goods.

While the US is fixated on its huge trade deficit with China, probably the biggest losers from Chinese manipulation are other developing countries, which never seems to enter into the discussion. Why are Chinese garment jobs more important than those in Cambodia, Bangladesh, Turkey or Haiti? Cambodia has a hard time competing with China but the picture would change drastically if China’s money was fairly valued. Last I read, the cost differential was about 23% in China’s favor. I’m much more concerned about Cambodia and the other poor countries that are losing out from China’s actions, than about America, which has the resources to take care of its people if it actually wanted.

America likes to promote democracy around the world, even fight wars in its name, but when it comes to commerce, free-enterprise-loving, conservative businesspeople much prefer producing in one-party, autocratic states. The more the workers are exploited and denied basic human and organizing rights the better the conditions for making money. Meanwhile their personal greed and indifference to the health of American society has bestowed great wealth and consequently power to a country that likes to play by its own rules, throw its weight around and now act the bully.

Hikers and GMO’s

2010-09-22T10:22:00.001+07:00

I haven’t had a lot of time lately for the blog, I’m working on a big project, but here are a couple of quickies.

Hikers Wander Into Iran

Is anybody else a little suspicious about the story of innocent American hikers accidentally wandering into Iran? I’m an avid hiker and I’ve hoofed it in several exotic places – Borneo, Indonesia, Nepal, for instance – but I can’t imagine going to one of the most dangerous countries in the world just to walk in the mountains. I might go to Iraq just for the thrill of being in a dangerous place, but if I’m looking for scenery that’s about the last place I’d go.

The hikers have been in the news lately because of the release of one of the three and I’ve read lots of articles about them but they never give any background. Was it a day hike, or were they backpacking for several days?

And where have they hiked before? If it was the Congo, Yemen, rebel controlled Columbia then I’d believe their story.

Or was it the Appalachian Trail, where there are trail signs every couple of miles and facilities near the trail at regular intervals? There certainly are no signs in northern Iraq. And if there were they’d be in Arabic or Kurdish. One could not possibly go to a place like that without a local guide or at least really good topographical maps. And if you had accurate maps there’s no way you’d innocently wander into Iranian territory, especially if you were on a day hike.

The US has been funneling money into Iranian insurgent groups so maybe they were there to make contact. The idea that they were there only for the scenery beggars belief.

American Consumers Not Allowed to Know if Their Food Contains GMO’s

This is in the news because genetically modified salmon are about to enter the market. The question is whether it should be labeled as such. According to the FDA, the government agency charged with food safety, it would only confuse people to know what’s in their food, and besides, according to the industry, there’s no scientific difference between natural and genetically modified foods.

It’s easy to understand why FDA, which is basically an industry mouthpiece, doesn’t allow producers to label their food as GMO free: if they did, their sales would plummet. GMO’s, also known as frankenfoods, are allowed in Europe and Japan if they are labeled as such, but since nobody in those countries would knowingly buy GMO’s, American exporters don’t even bother trying.

As for there being no difference, someone should tell that to the Monarch butterflies who were subject to a little GMO experiment about ten years ago. In that study, milkweed, the only thing the butterflies eat, was dusted with modified corn pollen. In a short time half the insects died and the other half had serious stomach problems. The control group which ate milkweed dusted with natural corn pollen, suffered no ill effects whatever.

The New York Times published an article at the time which tried to put a little industrial spin on the matter by saying it really wasn’t a problem for the butterflies since they don’t eat corn. Yes, very true, but people do. Now I realize it’s entirely possible that a substance can be toxic to one species while it’s harmless to another, but still the two - GMO and natural – were shown in that research to be obviously, demonstrably different. That wasn’t the only study to show drastic effects on small animals and insects of eating frankenfood, but powerful as it is, Monsanto, the number one producer, has been very effective in burying results that effect its bottom line. No studies have been done on humans.

There has been a large and not easily explainable spike in cases of asthma and other more serious diseases in America over the last twenty years or so, coinciding with the introduction of GMO’s. Personally, I almost never buy processed food from America since anything produced there that isn’t labeled organic, contains GMO corn or soybean or canola. Fortunately we here in Cambodia always have the choice of buying European or from neighboring countries where GMO’s have not yet been introduced.

On a related note, researchers in North Dakota discovered recently that all the wild canola growing along the roadsides in the state was frankenfood. So much for the ability to contain GMO’s or the ability to grow non-GMO’s anywhere in North Dakota.

Repug Response to Doomsday: Bring it On

2010-09-08T10:38:00.001+07:00

Some people in the past have accused me of hoping for Armageddon, like I really want the world to suffer. Admittedly part of me feels like we should just do it, you know, get it over with so we can start fresh. At the rate the world is being trashed, we might even be better off, at least in the long run, if we let the organized world unravel before the entire sphere is poisoned. Only a bad-assed torturer wants to see famine, flood, disease and environmental degradation; I only want the world to wake up.

For years now, I’ve kept thinking it can’t get any worse before the people wise up to challenge the status quo. Now for sure they will demand fairness, equity, intelligence in governance. But then the morass the country is in far surpasses my worst expectations and yet the American people don’t seem to notice but only want to go even more negative, choose the least enlightened path, bring the country back to the glory days of Herbert Hoover. And so it’s not just possible but likely the Repugs will take back the congress. Unbelievable, almost unimaginable, but true.

And what would be top of their agenda? Witch hunts: the search for semen stained dresses and minute personal failings. That’ll show em for totally letting us off the hook for lying about wars and giving us a pass on admitted and egregious crimes against the constitution. Democrats don’t want to bring up the past, they want to just move on and be one big bipartisan happy family. This is like a young doe trying to make nice with a hungry tiger. In fact, cats like to play with their prey before they eat them, so they can have some fun together until lunchtime.

Their second priority is to rein in government spending to tackle the deficit. It’s those entitlements that are the problem. All those lazy Americans depending on government handouts; i.e., Social Security, Medicare, Unemployment, Food Stamps, are going to have to take a hit if the economy is to be righted. According to Alan Simpson, former senator from Wyoming who Obama appointed to the government’s deficit reduction commission, Americans only want to suck off the government’s tits and what they really need is hard lessons in taking care of themselves.

Their other major goal is to continue Bushman’s tax cuts for the wealthy. The fact that tax cuts run counter to deficit reduction doesn’t seem to matter much in Repug theory.

And most amazingly, or maybe not, the people are eating it up. Yeah, bring it on.

One problem the Dumbs have, as a result of their general incompetence and extreme fecklessness, is the enthusiasm gap. The Tea Partiers are fired up about the country being run by a socialistic black man who wasn’t even born in America and is a Muslim besides. They are going to vote.

Professional Leftists - in the immortal words of Robert Gibbs, Obama’s press secretary - on the other hand are going to stay home in droves. What was his big complaint about we, the radical leftist fringe that is never happy with the Obama administration? How about that we’d never be satisfied until we had Canadian-style single-payer health care. The fact that every single poll taken during the health care debate showed large majorities of Americans as a whole – around 60% - and overwhelming majorities of Democrats – around 90% - were in favor of single-payer never seemed to matter or even register… no, universal health care is so far out radical it’s like asking for the moon.

Gibbs’ idiotic outburst wasn’t the first time administration officials had gone out of their way to insult, trample on, stab in the back the people who brought them into office. He thinks the people who elected Obama really wouldn’t be happy until Dennis Kucinich was president. Well, Dennis is certainly one of the very few Dumbs willing to speak truth to power and to actually represent the majority’s wishes, but he never was very electable. No what we really wanted was the Obama we were promised. Instead we got a corporate shill more interested in compromise with the party of NO than actually accomplishing anything of lasting value. One who snatched worthlessness from the jaws of opportunity.

The other major Repug goal is to shut down the government. More power to them, I say, maybe this time they really will be so bad, the people will finally take matters in their own hands and even the Dumbs will have to respond. But I doubt it. If the Dumbs controlled congress by 80% or 90% in place of the 60% they have now, they’d still find excuses to kowtow to the Repugs and ignore the will of the majority of Americans.

No matter how much shit gets thrown in the face of the American people, they still can’t seem to smell it. They still want to elect a government intent on throwing money at the wealthy in spite of the fact that they have a bigger share of American income than any time since 1928. And in spite of the reality that that income disparity is one of the root causes of America’s problems today.

If they can’t smell the shit when it’s thrown in their faces maybe they will when they are buried up to their necks in it. One can only hope. Meanwhile I’m thrilled I don’t have to live there (couldn’t afford to if I wanted on my Social Security) otherwise I’d be ten times as angry and depressed about the US as I am now.

Extreme Weather

2010-08-25T10:08:00.000+07:00

Extreme Weather

Last time I was in the states I splurged and picked up a $200 weather station. It measures temperature and humidity for two locations, barometer, wind, rain and UV. I’ve always been fascinated by the weather and it’s been fun to have even though the weather doesn’t change much here in Cambodia. Right now I can pretty much guarantee it’ll be 77 to 80 at night, around 82 for the high if it’s a very rainy day, 86 or 87 if it’s partly rainy and 90 to 92 if the skies are clear. The humidity will be around 80%: pretty boring in all.

We did, however, have an extreme event here in Kampot last February: almost 5 inches – 12 cm – of rain fell in about 2 hours. (I don’t know what the figures are for Kampot but Phnom Penh, which is about 100 miles distant, gets 12 inches – 30cm – in each of September and October, the wettest months.) Even for a tropical place where precipitation typically comes hard and heavy in short bursts, that was exceptional. What was special about it was not so much the event itself, that probably happens once every four or five years, but rather the timing in the middle of dry season. It might not rain once in two or three months during that time.

For comparison, Portland, noted as being a rainy place, gets about 6 inches of rain each in December and January, its wettest months, but only a trace in July. Imagine getting nearly a whole winter month’s rain in 2 hours in July!

The authorities here were puzzled by the ensuing flood, since floods generally come with an overflowing river. Kampot is on an estuary, a tidal river, and sits right at sea level so the right combination of heavy rain coming down from the nearby mountains and high tide coming in from the sea will cause the river to overflow its banks and that happens every couple of years. With a simple rain gauge they would’ve realized that with that much precipitation in such a short time, there’s no drainage system they could ever imagine that could handle that flow without flooding.

Meanwhile, Pakistan is experiencing its worst flooding in living memory. About 20% of the country is under water. That’s about equivalent to all of Cambodia or Wisconsin. Part of the problem in a developing country like Pakistan is that its mountains have been denuded of trees by people seeking firewood so the slopes no longer hold much water. In any case floods still would’ve been severe with the amount of rain coming down.

When you hear of landslides in China, they’re also largely caused by hillsides that have been deforested. When you’re living on the edge of existence and that last tree is your only source of fuel for cooking, you take it down and worry later about tomorrow. Some landslides will happen naturally regardless of the circumstances, but 90% of what you hear about is directly the result of environmental degradation.

Meanwhile, the heat wave in Russia has broken all records and destroyed millions of hectares (1 hc = 2.4 acres) of crops in the process, which has resulted in a near doubling of the world price of wheat. Moscow, which is at the same latitude as Juneau Alaska, has an average high temperature in summer of 72F – 22C. It gets an average of 5 days a year over 86F – 30C. Last year produced not one day over 86. This year it had 34 consecutive days over that temperature with several over 100 – 38C. Russia was one of 17 countries that have broken national high temperature records so far this year.

Russia has been reluctant to get behind the global warming problem, thinking, So what if it warms up a bit in Siberia, what’s the big deal for us? Problem is the 1.5 degree Celsius rise in global temperature since the industrial revolution doesn’t spread evenly. It’ll be around average, maybe a little warmer, for a time while it’s accumulating heat in one special place or another until the excess heat, when it’s released, bears down all at once.

I’ve got lots of ornamental plants in my place in Kampot, one of the reasons I love being here. I generally keep philodendrons in the shade, it just seems more appropriate for them. Every time I’ve taken one that’s been in the shade and put it in direct sun, several of its leaves are burned in an hour or two. Meanwhile, bicycling around town, I came across one that’s doing fine in direct sunlight. I’m always kind of baffled when I look at it.

You take a place like Russia where it’s almost always cool and blast it with unnatural heat that its land is unaccustomed to and it just burns up. Same with the tendency to flood: The air today holds 5% more moisture than in the past. The excess moisture accumulates in the atmosphere until when it does come down, it comes down in buckets.

Meanwhile, new coal-fired power plants are opening up somewhere in the world every day. China, probably the biggest offender, believes it has the right to reach developed status before it’s required to cut back on coal use, which is all very fine in theory, especially since America, the worst offender on the CO2 front, seems to have no will whatever to curb its excessively gluttonous and destructive lifestyle, but if everybody waits for the other guy to act, there’ll be nothing left of the planet to worry about.

China, to its credit, has also been powering ahead on solar and wind and is now the world’s biggest producer and consumer. Meanwhile the US gives far more in subsidies to the fossil fuel industry - the world’s richest, most profitable and powerful corporations - than it does to boost the alternatives. America should be embarking on a $200 billion per year crash program to convert to sustainable energy and if it takes taxing the wealthy and upper middle class to pay for it then all the better. (Geez, am I supposed to sympathize with the plight of people making $100,000 per year so much that I think it’s a great idea to give them a tax break? Should I applaud feeding the well-off while the whole edifice of government seems to be disintegrating? When so many good, solid, hardworking people in America are being kicked out of their houses, downsized out of their jobs and just generally dumped on, should I approve of throwing money at those people who are already living the good life?)

Sorry, I didn’t mean to get you all depressed and distraught over the matter of global warming but I’m a writer, what else am I supposed to do but lay it all out in words? Unfortunately, we all know the improbability, if not impossibility of any real change coming in America’s direction or the world’s for that matter. We are locked into lemming mode, hoping, once we’ve stepped over the edge, we’ll find a magic means for not crashing ourselves to pieces on the rocks below. LOL

Half-Assed is the New Standard

2010-07-22T09:56:00.001+07:00

Once again, this time pertaining to financial reform, the Democratic congress has chosen half-assed over real reform. Hype over reality. Kid gloves over strong regulation. Though not directly connected, the recent sweetheart deal with Goldman Sachs is indicative of slap-on-the-wrist regulation. Biggest Fine Ever!, dominated the news. To recap, Goldman gave the task to create a mortgage backed security to a hedge fund manager named Poulson, who picked out the worst mortgages he could find because he planned to bet on the security tanking. Goldman then sold the securities to its clients without disclosing that vital information or the fact that they themselves were also betting against the security. They made a bundle on the backs of their own customers.

I’m not in America, nor have I ever had much connection to the drek the comes out of the mainstream media, but I can still state with some confidence that the sordid details were glossed over. The $550 million fine is but 4% of Goldman’s yearly earnings, which, as it happens, were no less than a gift from the American taxpayer. They moreover, were fined for civil, rather than criminal fraud - which it most decidedly was - and did not even have to admit their guilt. So simple, we give them tens of billions of dollars. They lie and cheat and steal like serial offenders. We bust them for one infraction, for which they use a tiny bit of the money we’ve showered them with to pay a paltry fine. Nothing to it, all a matter of the cost of doing business.

So now we have financial reform legislation touted as the biggest change since the Great Depression which has some potentially good parts but which doesn’t address the greatest problems of all. Yes, there’s a long and desperately needed consumer protection agency but it’s housed in the FED, notorious for being a lax regulator in the pockets of industry, instead of being independent. The effectiveness of the agency will depend in large part on who is chosen to head it. Considering the track record of the Obama administration, I wouldn’t be surprised if a former lobbyist for the banking industry were chosen to head it. The best candidate for the post is Elizabeth Warren, a woman who’s been a strong advocate for the agency, but she is considered ‘controversial’, possibly because she might actually be an effective regulator.

Yes, most derivatives will have to go through exchanges where purchasers will have to show sufficient capital. Hopefully they’ll no longer be able to buy $100 worth of derivatives with $97 of borrowed money. However, not all derivatives will be included in the regulations and the banksters have two full years to play before the rules take force.

The banksters will still be able to use their own capital – the money you have on deposit in your checking account, for instance – to gamble in ‘exotic’ securities, though they will be somewhat restricted in the amount they’ll be able to use for that type of speculation.

The problem is that the two most important, most imperative changes necessary to avoid the next too-big-to-fail meltdown did not make the cut. First, of course, the banks that were too big to fail before are even bigger and there’s nothing in the legislation to break them up. Supposedly the legislation sets up a mechanism so that if they get into trouble they will be wound down and closed but if they are still so large, you can bet your little finger they’ll be bailed out again.

Secondly, the Glass-Steigel act of 1933, which created a clear separation between retail banking and investment – read casino – banking and which was gutted on Bill Clinton’s watch in the deregulation fervor of the time was not reinstated. The biggest banksters can still engage in risky behavior knowing they’ll get bailed out.

And since Obama chose to save the banks but leave the peasantry to fend for themselves, the underlying causes of the meltdown are still operative; foreclosures are at an all time high and property prices are still going down. Under the most optimistic likely scenarios unemployment will stay around 10% for the foreseeable future.

The trillions of dollars thrown at the banks has set back the day of reckoning, but not eliminated it. The people who enabled the meltdown by pushing for deregulation and who in their rose-colored blindness never saw the crisis coming are in charge of Obama’s economic team so how are they going to fix the economy? More of the same stupidity?

One additional imperative if America’s economic ills are to be dealt with is to clamp down on speculation. As I’ve said before (sorry if my repetitions are boring you) what’s desperately needed to make a fairer society and end the tendency towards financial bubbles and their subsequent bursting - with devastating consequences for the greater economy - is to adequately tax financial transactions, capital gains and wealth in general.

There’s been a call lately to place a 0.025 tax on financial transactions. A person buying a million dollars of stock would pay a measly $2500 in taxes, which would bring in about $175 billion per year in revenue. That miniscule tax would be enough to abruptly end computerized trading where super computers owned by the likes of Goldman Sachs buy and sell stocks within thousands of a second. That is an important outcome, but that rate is not enough. Buyers of securities who do so for more than speculation would no more be deterred by a 1% tax than a .025 tax. An investor with a million bucks to plunk down in the market for the long haul is not going to be discouraged from buying stocks because of a $10,000 tax. Of course they’d bitch and moan but tough shit, that’s less than what a person earning $50,000 per year pays in income taxes so hardly worth anyone’s sympathy.

So then, figure about $700 billion in revenue from a 1% tax and half America’s huge deficit is wiped out. As stated previously, the rich have too much money: they don’t need it and it’s not good for the country or the world. However, even the quarter percent tax will be a hard sell in the congress since it’s owned, lock, stock and barrel by the banksters.

No, the big push now is to trim the deficit on the backs of Social Security recipients. We’re easy targets, so they think. Getting America’s fiscal house in order is of utmost importance but the idea that the only way that can be accomplished is on the backs of pensioners and Medicare and social services is ludicrous. Supposedly it’s not a good idea to raise taxes in a recession but that really only applies to taxes on lower income people who need and spend every penny they have. Raising taxes on the wealthy does almost nothing to dampen demand (how many yachts and Rolex watches can one person own?) and has virtually no negative effect on economic growth. The extra money you give a millionaire may be fun and games for him but does nothing to stimulate the economy except to engender asset bubbles.

I’m sorry, I can’t rant anymore on this; besides I’ve said it all before. The system is fucked and nothing in the political pipeline is going to change it for the better. So be it.

China Changing

2010-06-28T09:51:00.001+07:00

Strikes, labor shortages, high suicide rates among migrant factory workers are remolding China’s image of itself. Even the president is talking about respecting and improving the lot of the country’s 200 million (17% of China’s population) migrant workers. But it’s not that easy since China’s manufacturers are dependent on cheap migrant labor. Migrant workers are propelled into leaving their countryside homes by bleak living conditions there. There’re many more people in rural China than the land can support.

However, when they leave their homes they are also leaving behind all benefits of citizenship; their kids can’t even go to public schools where they work. They only have rights where their household is registered and it takes a substantial bribe to obtain residence elsewhere. So they drop the kids off at relatives and trudge off to the East Coast. Often they wind up in large dormitories, or ten to a small room, and sometimes under harsh conditions. They generally earn low pay and receive no benefits; simply put, they are second class citizens in their own country and are mercilessly exploited.

For the leadership and the middle class, this works out fine since low pay makes China’s goods cheaper and more competitive in the world market, and the more comfortable class of urban residents gets cheaper consumer goods and construction, thus cheaper dwellings. It’s also good for foreign companies who subcontract their manufacturing to Chinese ones; cheap, cheap, cheap for Western consumers.

Moreover, urbanites don’t have to share their city with rural riffraff. Well, at least not much; migrants are largely isolated from the city at large. Also the government is deathly afraid that loosening up residence requirements will result in large migrations to the big cities, so on all counts (except the humanitarian one, of course) the present system serves their purposes well.

However, the natives are getting restless and believe they have the right to a larger share of China’s new wealth. So workers (but so far only at foreign owned companies) are striking for higher pay and seeing their demands met almost immediately. The fact that strikes are tolerated at all by the Chinese leadership is a breakthrough which is certain to snowball into a much more forceful labor movement.

Migrant workers have social and demographic factors in their favor since China’s big eastern cities are facing labor shortages. The country’s one child policy is beginning to have an impact on available labor in prime working ages for factory work – 18 to 25. There are also more jobs opening up in interior cities closer to home where living costs are much lower so are much preferred by migrants.

This all portends the beginning of the end of China as a cheap place to manufacture. Labor costs are not that great a factor in the production of autos so Toyota and Honda will glad pay extra for labor peace. Cost is also no big deal for Foxconn, a Taiwanese company which manufactures iphones and such, but labor unrest will inevitably spread to other sectors of the economy and overall costs will rise. Minimum wage in eastern China - $130 per month - is already more than twice that in Cambodia, for instance, but China has far superior infrastructure and less corruption so it will still be competitive.

Meanwhile, China is under extreme pressure to free up its currency to more closely reflect its true value. Some say it’s undervalued by 20%. The country of late has been spending $1 billion per day to keep its currency cheap. Since its currency is pegged to the dollar and the dollar has gone down relative to the Euro and Yen, China’s Yuan has also gone down, thus making its goods cheaper on the world market. This not only impacts America’s ability to compete, but also other developing countries. China’s immense trade surplus, a reflection of its cheap currency, is a point of friction and anger among many other countries. A huge trade deficit like America’s essentially means the export of millions of jobs, but also cheap consumer goods for those who are still working. Cambodia is not much affected since it’s currency is also pegged to the dollar, but every other country trying to compete, which has a free currency is being hurt.

China has been making noises about conforming to the international community’s wishes and they will loosen up a bit but the reality will be far less than the rhetoric. In fact, the Chinese leadership has been stoking up nationalist fervor for so long, they can’t be seen bowing to outside pressure or else bring angry criticism upon themselves.

For China, letting its currency appreciate in value would make imported goods cheaper and lessen tension with the rest of the world. Providing full citizen rights to its migrant laborers and allowing wages to rise would also have many beneficial economic aspects. Putting income into the lowest rungs of society always boosts the economy. Letting people migrate with their families would tremendously ease social pressure and make for a healthier society.

Unfortunately, China’s leadership seems addicted to amassing trillions of dollars through huge trade surpluses. They’re having fun buying up natural resources around the world. They could be using some of that immense stash of cash to improve the lot of their peasantry but the country’s peons are just too easy to manipulate and exploit. They’ll make noises about countryside improvements but there too the reality will fall far short of the rhetoric. The only time they will make changes to benefit the poor is when they are cornered and have no choice, which more likely than not, will be coming soon.

Poor BP

2010-06-22T10:24:00.002+07:00

The latest inanity coming from the BP oil spill fiasco was US Representative Joe Barton R-Tex apologizing to BP because of how unfairly the company has been treated by the US government. He called the $20 billion compensation fund demanded by Obama a shakedown, and said even if they were wrong, it wasn’t right for the government to demand the money. The Repug leadership quickly moved to disown his comments.

In the Exxon Valdez case, it took 20 years of legal wrangling to wrest a mere $500 million out of Exxon. A jury originally awarded damages of $5 billion but that judgment was easily overturned by a higher court. After all, five billion is practically 10% of one year’s profit. They did pay some compensation right from the beginning but nowhere, no how did it cover actual loses. There is no corporate weighing of right and wrong regarding legal culpability or claims against it, only a simple bottom line calculation. If the corpse thinks it can avoid a billion dollar judgment by spending $990 million on legal costs, that’s the track it works on.

David Cameron, UK Prime Minister, has cautioned Obama against bad-mouthing BP too seriously out of concern for the corpse’s stockholders and pension funds who hold its shares. Others are comparing it to Britain bashing even though BP is no longer officially British Petroleum, only BP.

I’m not totally without sympathy for pensioners who lose out as a result of BP’s reckless behavior and its casual, even malevolent, attitude toward safety regulations, but that’s the name of the game: investing is speculating, which is just barely, if at all, above gambling.

A lot of people have gotten the idea, from the corporate philosophy that’s been ingrained into the Western mindset that investing is fool-proof and as good as money in the bank. Conservatives have rightly understood that bringing lots of people into investing through pension funds and such, essentially tying them into the capitalist structure, would change their political attitude. What they didn’t count on was stocks going down; they’re only supposed to go up, you know.

It’s too bad so many large developed economies have lowered their interest rates to near zero in frantic attempts to stimulate growth, because that has left many people thinking they had no choice but to invest rather than just put it in the bank.

So why not invest in BP? It’s one of the world’s largest and most stable corporations, it’s always profitable and always pays good dividends. Well, if you were an astute investor, one not totally blinded by the hype, you’d look at BP’s safety record before you put your money into it. If you did, you’d find that BP not only has a sorry record of spills and explosions, but they’ve been cited by the US government for safety violations far more than any other oil company. In the last 3 years BP has received more than 700 citations for flagrant safety violations; all the other big oil companies combined received just 9. Moreover, many of those 700 also had the terms, ‘willful’ and ‘egregious’ attached to them.

The US supreme court has ruled that corporations are persons before the law with all the rights of individuals. Nowhere have they specifically ruled that corporate persons are allowed to get away with murder, but that’s the way it works. Flagrant, willful, egregious safety violations must be the corporate equivalent of drunk driving, yet a human person convicted of drunk driving causing death would be taken off the roads and imprisoned pretty damn quickly.

Not a corporate person, they just get paltry fines levied against them that are cheaper to pay than following safety rules and since the bottom line rules for them, they’ll break the rules as long as they can get away with it. It seems to me that the government in this case is almost as guilty as BP. Corporations are like young children: You can not expect a corporation to act responsibly without strong rules and serious consequences for not following the rules any more than you can expect a two-year-old to know right from wrong; they have to be taught, guided, restrained and disciplined.

Getting back to BP’s gusher, it’s still at least 2 months before one of the relief wells meets its target and the flow can be stopped. However, there’s no guarantee that will happen; both might miss the target. BP could have tried digging three or four relief wells at the same time for better odds but they cost $100 million each and the sea above the well might get quite crowded with that many drill ships working at the same time. So they’re crossing their fingers.

Meanwhile the worst case scenario is so terrifying it disheartens even a doomsdayer like myself. It postulates that BP may never be able to stop the gusher, but rather it’ll continue to flow until the reservoir is emptied of its billion plus barrels of crude. This comes partly from shoddy work to the point where the well was weak and vulnerable to begin with and is now losing its integrity. Leaks are appearing before the blowout preventer and in general the well is eroding quickly - because there are always abrasives in the crude - from the oil gushing out at very high speed and pressure. This scenario may be way off the mark but considering how little anybody really knows about these things, as good as a lot of other possibilities.

In order to stop the flow the relief well has to hit the gushing well far underground, very close to the reservoir, and it has to happen before the well totally degrades; that is, while the well is still intact, otherwise there’ll be no way to ever stop it and this spill will become a nightmare of biblical proportions – literally decades of oil spewing out and contaminating everything.

(If you want to delve into this fiasco on a more technical level I highly recommend adropofrain.net. For really technical stuff theoildrum.com is an excellent resource. I can understand the technical stuff, but only to a limit.)

It’s a race against time. If BP loses, it will certainly cease to exist and may well go down in the annals of corporate infamy as the worst of all time. You can bet that BP is already investigating splitting off its American operation so it can limit its liabilities and go bankrupt without taking the whole company down, which is why Obama’s extraction of $20 billion from BP was a very wise move.

If you are one of the shareholders of BP, pensioner or otherwise, who is due to lose your shirt, I’m sorry but that’s the way the game is played: You gambled, you lost. Which is nothing compared to what the Gulf has lost.

This ongoing eco-tragedy however has not stopped the US government from issuing deep

water drilling permits in spite of Obama mandating otherwise. It also has not stopped Republicans from demanding that Obama not enforce a moratorium on new drilling permits. What the heck, it can’t happen twice in the same area, can it? Those mendacious idiots can’t even wait until the full story is told and serious adjustments are made to drilling rules and procedures that might make another blowout less likely. Drill, baby, drill.

It Ain’t Over Yet

2010-06-06T10:41:00.000+07:00

All three stories I’ve been following recently – BP, Thailand, Israel – are assuredly unfinished, with serious repercussions yet to follow.

In BP’s case, its fouling of the Gulf has barely begun. It’s recent failing gambit to stop the flow of oil, the top kill, which involved pumping large amounts of trash into the well hoping to clog it up, was one more indicator of its impotency. To some it was a publicity stunt. Since plugging an undersea well hasn’t been done much in the past and never at the depth of the Deepwater Horizon blowout, they are just flailing away, trying anything they can think of, hoping it’ll be a magical cure.

It really wasn’t necessary for BP to think ahead and try to plan for possible blowouts or malfunctions since, paraphrasing Barack Obama, the technology is really advanced and so the chances of encountering problems is very remote.

But, as the famous Murphy once exclaimed, if something can go wrong, it will. So now the current Hail Mary is to make a clean cut in the riser, the pipe that leads up from the broken Blowout Preventer, and try to cap it so most of the gushing oil can be siphoned off. It would be impossible to make a tight fit in such a circumstance, so even if they are successful there will continue to be a substantial amount of oil leaking into the Gulf. They are now siphoning off about 30% of the oil and will try to increase that proportion; this is considered a success.

Regardless of the relative success of the latest gambit, it will continue to leak at least until August when one of the two relief wells now being dug is able to intersect with the leaking well so it can then be plugged off. Actually, the August target is a product of BP’s wishful thinking, independent experts think September is far more likely as a best case.

It is actually quite a challenge to drill from a mile above the sea floor and then through two and a half miles of earth and accurately intersect with the well casing. In fact, it’s entirely possible that neither of the two relief wells now being dug will hit the leaking well closely enough to plug it. In that case it would take another 4 months before the next attempts reach the well.

If they’re lucky, they’ll be able to plug the leak in September. That assumes the whole operation isn’t waylaid or seriously delayed by hurricanes, since the official storm season has officially arrived and is predicted to be an active one.

Meanwhile, the 1989 Ixtoc well blowout in Mexican waters took a full ten months to plug and that was only in 150 feet of water where divers could access the wellhead. More recently a blowout in the Timor sea took five tries before a relief well properly intersected the leaking well.

A lot of people, as reported, are angry at BP for failing to stop the leak. That is stupid and nonsensical. Rest assured BP is doing all in its power to try to stop the leak; its profits, not to mention its very existence is at risk.

People are also complaining that Obama is not doing enough to stanch the flow of oil. Here too they are way off base, there’s not much he or the government can do that BP isn’t already doing. As the government has said, it has neither the equipment nor expertise to do the work.

That said, Obama is partly culpable since the public should be directing the effort and controlling the narrative. BP has consistently tried to low-ball the estimate of how much oil is flowing and held back the first release of videos of the leak until pressure from congress and independent researchers was too great for it to refuse. BP made the ridiculous excuse that they were too busy trying to stem the flow to be distracted by showing the pictures… like you can’t scratch your balls and watch TV at the same time.

The US Environmental Protection Agency told BP to use a less toxic oil dispersant, BP arrogantly ignored the EPA directive. The government wasn’t told the top kill had failed until 18 hours after the fact. Cleanup workers are regularly sickened by the spill’s fumes but BP insists they are not to use respirators, probably because it wouldn’t look good. BP is not just trying to plug the leak they are also trying to cover their ass. With the government in control and information flowing more freely, independent experts might have been able to assist the effort.

Best case scenario is that the cap works to divert most of the oil so that the gusher continues at mere disaster level instead of catastrophic level, hurricanes conveniently wait to unleash their fury until after BP lucks out with one of its first two relief wells and the leaker is plugged in August. Equally likely is that the cap doesn’t work very well, fierce storms seriously hamper the relief well effort and it takes another six months to a year to stop the flow. By then the Gulfstream current could take the oil all the way to Europe.

It ain’t over in Thailand either.

Unelected Prime Minister Abhisit probably feels really good about himself for stopping the red-shirt protest. So good, in fact, that he’s forgone seeking reconciliation and accommodation with protestors who represent the majority of Thais and instead is seeking to charge its leaders with terrorism.

All he bought with the death of 88 protesters was a little time. The Red-shirts will be back. They feel the government was stolen from them and are rightly concerned that, even with an election, it will happen again. Since the government, backed by the yellows, believes that the riff-raff that makes up the opposition is not capable of governing – not smart enough essentially - they may well try to institute some form of limited democracy. Otherwise, as mentioned previously, the reds will undoubtedly win the next election.

Back when I first went to Thailand in 1992, it’s tourist slogan, Land of Smiles, was surprisingly true. Just entering immigration the guy behind the desk was as warm, smiley and pleasant as could be. Today, you’d need to look hard to find a smile in the same circumstance, it’s all completely matter-of-fact. Tourism has tripled over the last 18 years and become boring; the immigration officers working the lines probably have limited incomes and are pissed, consciously or otherwise, at the great income disparity in their country, the worst in the region.

Even back in 1992 I was surprised at poverty levels in a place with glittering high-rises and so many cars it had possibly the worst traffic jams imaginable: In many parts of Bangkok, traffic would back up in peak hour to the point where nothing would move for nearly an hour. Meanwhile, large numbers of people were living in hovels more typical of a dirt poor country like Cambodia than up-and-coming Thailand.

At this point the common people of Thailand are tired of seeing the fruits of prosperity residing totally amongst the elite, and livid with rage at how the first Thai government ever to consider their needs was deposed by people who seek to limit democracy so they can maintain their power and status.

So it ain’t over yet, the Red-shirts will be back.

Once again Israel has resorted to brute military force to counter its opponents. Since its continuing illegal and immoral blockade of Gaza (in which items as simple as pencils, notebooks and coriander are forbidden, not to mention the cement and other building materials desperately needed to rebuild the 50,000 homes and other important structures damaged or destroying in its attack on Gaza) is not justifiable either in international law or common human decency, the only response it can make is intimidation and murder.

Israel says it was attacked, but since they confiscated all cameras and cell phones, not to mention laptops, money and all personal effects, the other side of the story can not be shown. According to eyewitness accounts, Israeli commandos started firing even before the reached the Mavi Marmara’s deck, but, of course, there is no way to visually verify that.

While everyone else in the world is calling for an independent investigation of the incident, the Obama administration, in one of the most craven acts of political cowardice every recorded, wants Israel to investigate itself. We all know the outcome of that one.

The Rachel Corrie, the last ship to try to break the blockade just yesterday, couldn’t join the flotilla because of mechanical problems. For those of you unfamiliar with the story, Rachel Corrie was a young American activist who was crushed by an Israeli bulldozer in 2003 while trying to stop the demolition of a Palestinian home. She was in full view wearing bright clothes. The dozer operator chose to kill her. If you think he was ever punished for that murder, you’re living on another planet.

According to Israel the purpose of the blockade is to make life for Gazans so difficult they will turn against Hamas and choose a government more to Israel’s liking; that is, docile and subservient. It ain’t gonna happen. If it takes ten years or fifty years or a century, the Palestinians will not stop fighting for their land and freedom.

Israel likes to say it left Gaza but that’s a lie considering it still controls nearly everything that goes in or out. Israel’s plan for a two state solution to the Middle East would have the West Bank divided into three Bantustans each completely surrounded by Israeli territory thus enabling Israel the same stranglehold on the West Bank it now has on Gaza. A totally untenable non-starter.

Israel’s ongoing theft and colonization of Palestinian land in the West Bank (By the way, it’s not called the West Bank in Israel; there it’s Judea and Samaria, thus an essential part of Greater Israel) makes the two state solution impossible. What it really seeks to do is repress, harass and humiliate Palestinians to the point where they will go somewhere else; exactly where is not specified, though many Israeli Jews want to deport them all to Jordan.

As for the Free Gaza Movement, its leaders say they’ll be back next time with even more boats. They say they have many more people who want to participate in trying to break the blockade. I wish I could go myself, but all I can give is my sympathy.