Archive for the ‘Financial melt-down’ Category

America Is Declining at the Same Warp Speed That’s Minting Billionaires and Destroying the Middle Class

Tuesday, May 20th, 2014

Not a single U.S. city ranks among the world’s most livable cities

“The game is rigged,” writes Senator Elizabeth Warren in her new book A Fighting Chance. It’s rigged because the rich and their lobbyists have rigged the rules of the game to their favor. The rules are reflected in a tax code and bankruptcy laws that have seen the greatest transfer of wealth from the middle class to the rich in U.S. history.

The result?

America has the most billionaires in the world, but not a single U.S. city ranks among the world’s most livable cities. Not a single U.S. airport is among the top 100 airports in the world. Our bridges, roads and rails are falling apart, and our middle class is being gutted out thanks to three decades of stagnant wages, while the top 1 percent enjoys 95 percent of all economic gains.

A rigged tax code and a bloated military budget are starving the federal and state governments of the revenue it needs to invest in infrastructure, which means today America looks increasingly like a Third World nation, and now new data shows America’s intellectual resources are also in decline.

For the past three decades, the Republican Party has waged a dangerous assault on the very idea of public education. Tax cuts for the rich have been balanced with spending cuts to education. During the New Deal era of the 1940s to 1970s, public schools were the great leveler of America. They were our great achievement. It was universal education for all, but today it’s education for those fortunate enough to be born into wealthy families or live in wealthy school districts. The right’s strategy of defunding public education leaves parents with the option of sending their kids to a for-profit school or a theological school that teaches kids our ancestors kept dinosaurs as pets.

“What kind of future society the defectors from the public school rolls envision I cannot say. However, having spent some time in the Democratic Republic of Congo—a war-torn hellhole with one of those much coveted limited central governments, and, not coincidentally, a country in which fewer than half the school-age population goes to public school—I can say with certainty that I don’t want to live there,” writes Chuck Thompson in Better off Without Em.

Comparisons with the Democratic Republic of Congo are not that far-fetched given the results of a recent report by Organization for Economic Co-operation and Development (OECD), which is the first comprehensive survey of the skills adults need to work in today’s world, in literacy, numeracy and technology proficiency. The results are terrifying. According to the report, 36 million American adults have low skills.

It gets worse. In two of the three categories tested, numeracy and technological proficiency, young Americans who are on the cusp of entering the workforce—ages 16 to 24—rank dead last, and is third from the bottom in numeracy for 16- to 65-year-olds.

The United States has a wide gap between its best performers and its worst performers. And it had the widest gap in scores between people with rich, educated parents and poor, undereducated parents, which is exactly what Third World countries look like, i.e. a highly educated super class at the top and a highly undereducated underclass at the bottom, with very little in the middle.

The report shows a relationship between inequalities in skills and inequality in income. “How literacy skills are distributed across a population also has significant implications on how economic and social outcomes are distributed within the society. If large proportions of adults have low reading and numeracy skills, introducing and disseminating productivity-improving technologies and work-organization practices can be hampered; that, in turn, will stall improvements in living standards,” write the authors of the report.

– To the Original article:

LANDMARK STUDY SAYS AMERICA IS NO LONGER A DEMOCRACY

Sunday, April 20th, 2014

“What world are the five conservative Supreme Court justices living in?” Sanders said after the McCutcheon ruling. “To equate the ability of billionaires to buy elections with ‘freedom of speech’ is totally absurd. The Supreme Court is paving the way toward an oligarchic form of society in which a handful of billionaires like the Koch brothers and Sheldon Adelson will control our political process.”

Vermont Senator Bernie Sanders commenting after the U.S. Supreme Court’s McCutcheon v. FEC ruling

(NATIONAL) — What Senator Bernie Sanders evidently did not know when he spoke those words earlier this month is that America wasn’t just headed toward an oligarchy – a form of government in which a powerful, dominant class exercises control over the general population – but indeed had stopped being a democracy years ago and has been a full blown oligarchy for a considerable period of time.

It turns out that former U.S. Labor Secretary Robert Reich was also wrong when in late March he wrote, “America is not yet an oligarchy,” but added that’s where a handful of billionaires are taking us.

Both men were flat wrong according to the results of a new study set to appear in the Fall 2014 issue of the academic journal Perspectives on Politics. 

The authors of what appears to be a landmark and historically important study are Martin Gilens and Benjamin I. Page. Their 42-page report is called “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens.”

The study, done at Princeton and Northwestern Universities concludes that the U.S. government no longer represents the interests of the majority of its citizens – meaning average working class men and women – but those of the rich and powerful, of which the 1% are at the top of the heap in the power and control departments.

AVERAGE AMERICANS HAVE LOST CONTROL OF THEIR COUNTRY

In short: the wealthy few and powerful individuals in consort with big business interests now develop, move, manage and control public policy in this country to their wishes and designs while the average American has little power over anything in government anymore.

By extension that infers the average American no longer has control over his or her own life to a large degree or can even control in which direction the country is headed now or will be headed in the future because the act of voting – an act enshrined as the one thing that has always secured democracy in America – no longer works.

According to this study America, to a large degree, now has the type of government that has traditionally ruled Mexico or Russia. 

The DailyKos reports the anecdotal evidence of that has long been there from, “Modest gun control proposals that saw 90% public support, to unemployment compensation, to infrastructure spending, to women’s rights; where a plurality exists even across party lines, the median public interest seems to hold no sway in policy making.”

The same report notes, “We are all losers here. Despite the trappings and tradition of a representative democracy, the truth is those are just theatrics. At this point, even the echos of democracy are becoming faint. Spectacles like GOP presidential nominees making the pilgrimage to kiss the ring of King Adelson now happen with full knowledge, the vampires are out of the shadows and discover it’s fun in the sun. While satirists rightly lampoon it, media practically celebrates it and the Supreme Court in practice has endorsed it as a victory for the 1st Amendment.”

Some Americans, if not many saw the control shift away from democracy developing many years ago.Writing in a Feb. 2010 piece in OtherWords, columnist Donald Kaul penned:

“Democracy has been in decline here for some time…just look at our pathetic voter turnouts…we have traded our democratic republic for a corporate oligarchy on the model of a banana republic.

Americans are fond of saying that we’re the greatest country in the world. Would the greatest country in the world make a trade like that? I don’t think so.

And the corporations to whom we’ve given the keys to the store aren’t even American companies. They’re multi-nationals operating in their own self-interest without regard for the national good.”


The study analyzed extensive data, comparing nearly 1,800 U.S. policies enacted between 1981 and 2002 looking at the expressed preferences of average and affluent Americans as well as special interest groups.

THE RICH + BIG BUSINESS INTERESTS = CONTROL OF U.S.

The results of the peer-reviewed report, say the authors, empirically verifies that U.S. policies are determined by the economic elite, not the democratic process.

“The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while mass-based interest groups and average citizens have little or no independent influence,” say the authors. 

And if that isn’t frightening enough to millions of Americans who are not in that elite group that now runs the country, the authors point out that the data available to them – the numbers they crunched – are probably under-representing the actual extent of control of the United States by the super-rich.

Some items from the study:

~ A great deal of empirical research speaks to the policy influence of one or another set of actors, but until recently it has not been possible to test these contrasting theoretical predictions against each other within a single statistical model. This paper purports to do just that, using a unique data set that includes measures of the key variables for 1,779 policy issues.

Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence. The authors say the study provides substantial support for theories of “Economic Elite Domination” and for theories of “Biased Pluralism,” but not for theories of “Majoritarian Electoral Democracy” or “Majoritarian Pluralism.”

~ Prior to the availability of the data set that the authors analyzed for the study, “No one we are aware of has succeeded at assessing interest group influence over a comprehensive set of issues, while taking into account the impact of either the public at large or economic elites – let alone analyzing all three types of potential influences simultaneously.


THE ILLUSION OF LIFE IN A DEMOCRACY

The authors also point out that despite the seemingly strong empirical support in previous studies for theories of majoritarian democracy operating in this country, “Our analyses suggest that majorities of the American public actually have little influence over the policies our government adopts,” even though average working Americans do enjoy many features central to democratic governance such as regular elections, freedom of speech and freedom of association.

This study is getting a lot of buzz and attention on the Internet but seemingly less so in newspapers – many of which are now controlled by huge media organizations (business interests) that also own and control multiple radio and TV stations as well as other media – and even less play on the nightly news half hour shows on networks like CBS, ABC and NBC which, the study somewhat infers when it refers to intertwined impact of “business interests” in tandem with the elite, may be part of the problem 

So far the results do not appear to have resonated much if at all with America’s Joe and Jill Sixpack who, the study’s authors intimate, may still labor under the delusion they live in a democracy. 

For a many reasons it may be difficult for some Americans to wrap their heads around the idea they no longer live in a democratic country.

“The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while mass-based interest groups and average citizens have little or no independent influence,” says the peer-reviewed study. 

The study purports to be the first-ever scientific study of the question of whether the U.S. is a democracy because until recently it has not been possible to test “contrasting theoretical predictions [that U.S. policy making operates as a democracy, versus as an oligarchy, versus as some mixture of the two] against each other within a single statistical model.” 

The authors say their report is an effort to do so using a unique data set that includes measures of the key variables for 1,779 policy issues.

They conclude the numbers show without ambiguity that the U.S. is not a democracy anymore. It is clearly an oligarchy.

Writing in CounterPunch Eric Zuess sums it up this way:

“American democracy is a sham, no matter how much it’s pumped by the oligarchs who run the country (and who control the nation’s “news” media). The U.S., in other words, is basically similar to Russia or most other dubious “electoral” “democratic” countries. We weren’t formerly, but we clearly are now. Today, after this exhaustive analysis of the data, “the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.” That’s it, in a nutshell.”


HOW THE DATA WAS BROKEN DOWN

The two professors came to their conclusion after reviewing answers to 1,779 survey questions that were asked between the years 1981 and 2002 on public policy issues. 

They broke the responses down by income level, and then determined how often certain income levels and organized interest groups saw their policy preferences enacted.

A proposed policy change with low support among economically elite Americans (just 1 out of 5 in favor) is adopted only about 18% of the time. But they discovered “a proposed change with high support (4 out of 5 in favor) is adopted about 45% of the time.”

But on the other hand when a majority of average citizens disagrees with the economic elites and/or with organized interest groups, they generally lose. 

What’s more, because of a strong “status quo bias” built into the US political system, even when fairly large majorities of Americans favor policy change, they generally do not get it.

Finally, the DailyKos points out what it considers one additional and ominous note to the report that many Americans may have missed:

“The date range for the data set for this study was 1981-2002. Did you catch that? The set of data does not include study beyond 2002, yet the conclusion even then is that we’ve become an oligarchy. Consider all that’s then missing in the equation:

The Iraq War, drones, the 2008 criminally-caused economy crash, the rise of the Kochs, the most obstructive Congress in history, OWS beat down by government proven collusive with the banks, Citizen’s United, McCutcheon, Wikipedia’s leaks & Manning’s torture (arguably), Edward Snowden revelations.

Even without the rigors of research, it would be obvious to conclude that 2002 compared to today was practically a majoritarian paradise. It boggles the mind and fuels the urgency of the issue.”

– To the Original story…

Global Rankings Study Depicts an America in Warp Speed Decline

Friday, April 18th, 2014

– I wrote my friend, Kim, who sent me this article, and said,

“If some of us survive to write history in the future, it will make interesting reading looking back on America during these times.  I expect that many of us (and certainly most Americans) are simply too close now to the situation to see it from a lofty post-event historical perspective but I, sometimes, can imagine what that history book will read like.”

– We are truly embedded in our lives like those long-ago bugs trapped in amber.  Our 60 to 80 years and our short attention spans just don’t let us get a historical perspective on the times we are living in.   Oh, we can pick up history books and read about, say, Italy in the Renaissance or some other time and place and feel a lofty sense of understanding as we read and fly above all of their lives and times.   But for our here and nows we are too close to the forest to see anything but the trees of our daily rounds.

– In the relatively new scientific area of Complexity, there’s an idea that I’ve found to be very persuasive.  It deals with Emergent Properties.  I think it’s a good way to think about what’s wrong with our species and its civilization.

– In a nutshell, it is the idea that many small and relatively simple units acting together can produce something complex that you could never have predicted from just studying the simple units themselves in isolation.   And this something complex that arises does so because of the interactions of the many simple units and what arises is called an Emergent Property.  

– A bee colony is a good example.  You could study the intelligence and the behaviors of individual bees forever and never be able to predict bee hives.  

– A snowflake is another.  You could study the properties of a water molecule for a long, long time and never predict the organizational beauty of snowflakes.

– I won’t belabor the point.  If you are curious, follow either or both of the links, above.  

– My point is that we humans are simple units that  just want what is best for us and our families.  

– We want food, warmth, physical security and love.  Everyone that works, start a business, save for college, loves their child is looking out for themselves and those they love.

– In isolation, and considering all of us one by one, this is all good.  

– But in our world, some get very rich and want more.   Some are security conscious and they seek power to protect themselves and they go too far.

– All of us in our billions are loose in this world looking out for ourselves.  The big oil corporations, the folks that own Wal-Mart, and the dictator running Syria.   They are all just like us – but writ large.

– Read the article, below, and see ‘us’, all of us, just looking out for ourselves there.  The beggars, the CEO’s, the small businessmen and women and the war lords all sharing this stage together.

– There are more and more of us all the time.  

– And all of us want more and more for ourselves and our families.  

– We are like locusts sweeping along.   Every year, there are more of us but the planet and its resources just remain the same size as they were in the beginning.

– We simply can’t have continuous growth in a planet of fixed size.  

– It’s not just my opinion – it’s simple and unavoidable physical logic.  

– We can’t all keep wanting more for ourselves.  In there end, there will only be so much and then, after that, we will all be facing a big disappointment.

– Though in truth, many of the smartest among us have seen these limits approaching now and they’ve begun to collect their wagons into circles to protect themselves.   The rich and the powerful are getting richer and more powerful as a bulwark against the coming shortages, and, while they do this, they are telling the rest of us that things are going to be fine.

– They are not, my friends.   They are not going to be fine.

– Global changes of unimaginable size are coming in the next few decades.  The evidence is lying all around you.  Don’t let yourself be seduced by the “Things are going to be fine” messages.   Think about what’s going on and where you want to end up when the wheels begin to come off.  

– For those of you in America, this article should be a wakeup call though I know most of you will keep on sleeping.  

– Remember those few wise Jews that left Germany just as the anti-Jewish hysteria was beginning?   And remember the fates of those Jews who didn’t believe that such changes were coming?  They didn’t believe that such things could happen.

– dennis

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If America needed a reminder that it is fast becoming a second-rate nation, and that every economic policy of the Republican Party is wrongheaded, it got one this week with the release of the Social Progress Index (SPI).

Harvard business professor Michael E. Porter, who earlier developed the Global Competitiveness Report, designed the SPI. A new way to look at the success of countries, the SPI studies 132 nations and evaluates 54 social and environmental indicators for each country that matter to real people. Rather than measuring a country’s success by its per capita GDP, the index is based on an array of data reflecting suicide, ecosystem sustainability, property rights, access to healthcare and education, gender equality, attitudes toward immigrants and minorities, religious freedom, nutrition, infrastructure and more.

The index measures the livability of each country. People everywhere depend on and care about similar things. “We all need clean water. We all want to feel safe and live without fear. People everywhere want to get an education and improve their lives,” says Porter. But economic growth alone doesn’t guarantee these things.

While the U.S. enjoys the second highest per capita GDP of $45,336, it ranks in an underperforming 16th place overall. It gets worse. The U.S. ranks 70th in health, 69th in ecosystem sustainability, 39th in basic education, 34th in access to water and sanitation and 31st in personal safety.

More surprising is the fact that despite being the home country of global tech heavyweights Microsoft, Cisco, IBM, Oracle, and so on, the U.S. ranks a disappointing 23rd in access to the Internet. “It’s astonishing that for a country that has Silicon Valley, lack of access to information is a red flag,” notes Michael Green, executive director of the Social Progress Imperative, which oversees the index.

If this index is an affront to your jingoistic sensibilities, the U.S. remains in first place for the number of incarcerated citizens per capita, adult onset diabetes and for believing in angels.

New Zealand is ranked in first place in social progress. Interestingly, it ranks only 25th on GDP per capita, which means the island of the long white cloud is doing a far better job than America when it comes to meeting the need of its people. In order, the top 10 is rounded out by Switzerland, Iceland, the Netherlands, Norway, Sweden, Canada, Finland, Denmark and Australia.

Unsurprisingly these nations all happen to rank highly in the 2013 U.N. World Happiness Report with Denmark, Norway, Switzerland, the Netherlands and Sweden among the top five.

So, what of the U.S? In terms of happiness, we rank 17th, trailing neighboring Mexico.

We find ourselves languishing for the very fact we have allowed corporate America to hijack the entire Republican Party, and some parts of the Democratic Party. This influence has bought corporations and the rich a rigged tax code that has redistributed wealth from the middle class to the rich over the course of the past three decades. This lack of shared prosperity and opportunity has retarded our social progress.

America’s rapid descent into impoverished nation status is the inevitable result of unchecked corporate capitalism. By every measure, we look like a broken banana republic. Not a single U.S. city is included in the world’s top 10 most livable cities. Only one U.S. airport makes the list of the top 100 in the world. Our roads, schools and bridges are falling apart, and our trains — none of them high-speed — are running off their tracks.

With 95 percent of all economic gains funneled to the richest 1 percent over the course of the last decade, and a tax code that has starved the federal government of revenues to invest in public infrastructure, America will be a country divided by those who have and those who have not. In The World As It Is, Chris Hedges writes, “Our anemic democracy will be replaced with a robust national police state. The elite will withdraw into heavily guarded gated communities where they will have access to security, goods, and services that cannot be afforded by the rest of us. Tens of millions of people, brutally controlled, will live in perpetual poverty.”

This week the Republican Party rolled out its 2014 Ryan budget. Robert Greenstein, president of the Center on Budget and Policy Priorities, noted that under the Ryan budget, “[affluent] Americans would do quite well. But for tens of millions of others, the Ryan plan is a path to more adversity.” Greenstein pointed out that the plan would leave millions without health insurance through repeal of the Affordable Care Act and changes to Medicaid funding.

Greenstein also criticized the budget for its impact on anti-poverty programs, estimating that it would slash basic food aid provided by SNAP by at least $135 billion and convert the program to a block grant, make it harder for low-income students to attend college and make massive unspecified cuts to domestic non-military spending, which means cuts to social welfare programs.

The countries ranked highest in social progress are doing the complete opposite. They’re investing in schools rather than drones. They’re expanding collective bargaining laws rather than busting unions. They’re providing their citizens with universal healthcare and education rather than selling these basic human rights to the highest bidder.

“Those who care about the plight of the working class and the poor must begin to mobilize quickly, or we will lose our last opportunity to save our embattled democracy. The most important struggle will be to wrest the organs of communication from corporations that use mass media to demonize movements of social change and empower protofascist movements such as the Christian Right,” observes Hedges.

It’s your move, America.

– research thanks to Kim W.

The withering away of America

Wednesday, March 26th, 2014

The other day, I read a story about a Hedge Fund buying up foreclosed homes in Atlanta, Georgia.   They bought up 4000 such homes on a single day and the story said they are buying more all the time.

Their plan, according to the article, is to hang onto these homes until the price of the houses rise and then they will sell them for a nice profit.  In the mean time, they will rent them.

Apparently, these folks have a lot of money so they can afford to buy these houses up at distressed prices and then be patient until the market turns.

This is one of those stories where you could say these folks are pretty smart.   Or not.

On a smaller scale, many of us, if we had a few extra dollars in the bank and if we saw a reasonable house come up on a foreclosure sale, we might just jump on that opportunity.  We would fix it up a bit, rent it out and wait for its property value to go up and then, at some point in the future, perhaps at retirement time, we’d sell it for a tidy profit.  And it would be all to the good.

Indeed, many of you who are doing fairly well with your finances probably already own one or more extra properties as investments that you are renting out just as the hedge fund folks are.

This is the American way, is it not?  We get ahead by working hard, saving our money and by investing it well.

Some of you, as you are reading this now, are waiting for the “gotcha” fish hook to emerge out of this little story of mine, aren’t you?

Well, sorry, it’s not going to happen.  At least not for all of those Mom and Pop investors among you.  I am decidedly on your side in all of this.  The hard working and smart saving American work ethic is one I embrace.

But, if we go back to the opening of this story and think about those Hedge Fund folks buying up thousands of foreclosed homes, I’ve got some problems there.

More is not always better

This Hedge Fund is buying up thousands and thousands of homes and taking them off the real estate market.

That means less homes are available for those people that want to buy.  And that also means that the prices of the homes that are available for sale will rise given the inexorable logic of supply and demand.

Buyers on the lower end of the economic scale will not be able to buy in this situation and they will be forced into renting.

All of us know that renting, while done by many, is surely not the best way to spend your money.  All you get is a roof over your head and as soon as you stop paying rent, the roof goes away and you have nothing.  The best thing you can do as a renter, is to save money as quickly as possible so you can buy a place of your own and start building some equity.

Stacking the deck

So, here we have a case where a very large entity, the Hedge Fund, is driving the market in a way that highly favors them and disadvantages the smaller folks.

From the Hedge Fund’s POV, as they take more houses off the real estate market and put them away into their investment portfolio, they are causing the prices on the remaining houses to rise. As the prices of the remaining houses rise, less people can afford them and more are driven into the rental market.

And look who is there waiting?   Its the Hedge Fund which has lots of houses to rent. Sweet, eh?   It’s not unlike driving sheep into a pen.

Its sweet on all sides for the Hedge Fund beacuse as more folks compete for the available rentals, the price of rents will rise as well.

The Hedge Fund will always do well with this strategy so long as they pick their locations well.

All they have to know to win is that in desirable areas, the population inexorably rises because people want to live there for the environment and/or the work opportunities.  And in such areas, more people means more homes are needed.

The bottom line here is that the Hedge Fund is using its enormous financial clout in a way that benefits them but not necessarily the rest of us.

Now, small folks with some accumulated savings can invest it by buying one or two extra homes and renting them out as we mentioned earlier and that’s just what the Hedge Fund is doing, isn’t it?   Except they are doing it on a vastly huger scale.

And it is precisely this difference between the huge Hedge Funds of the world and the small folks like us which is the point of what this article is about.

The story of bigger and bigger

A small fellow starts a Mom and Pop business in his home town and it goes well.   The local people like what he’s doing and they buy what he’s got.

He’s smart.  He saves his profits and he opens a second shop across town.  He employees more folks in the second shop. The situation is a winner all around.

He opens more shops all up and down the area of the state he lives in.  More people are employed by him.  He gives money to charities and he support the local Boy Scouts and the YMCA.   The story is getting better and better.

At some point, he shifts from being a family owned business to being a corporation because that structure provides better protect for his family by separating their corporate assets from their family assets.  And perhaps it works better for their taxes as well.

Soon, as things continue to grow, the owner opens subsidiaries or franchises and moves into other states.

And for this business and these people, things just continue to go from strength to strength.

Now, the owner knows State Representatives and State Senators on a first-name basis.   He’s invited to sit on various boards for the YMCA and the local hospital.

At some point, his privately owned corporation may go public.  And, if the public offering is successful, he and his family will make a large amount of money and the corporation will get a large influx of cash to fund its further growth.

Now, as a publicly held corporation, it has a board and stock holders and it becomes responsible to more than just the former owner and his family.  Now, it becomes responsible to its stockholders who expect it to make a good return on their investment in the company.

This is all the stuff of magic.   The stuff that every small business owner hopes will happen to his or her business.  It is, literally, the stuff of the American Dream.

Ever onward and upward

The newly minted public corporation continues its growth.  And with the wisdom now of its board of directors and of its corporate officers, (either of which may or may not include the former owner) the corporation becomes a real competitor in the market segment it competes in.

Somewhere along this spectacular rise, it expands out across the nation from its original state and soon it is eying international markets and establishing overseas subsidiaries. And, if the run of success last long enough, it will become an international success.  It will become a global player.

Every national and global corporation you’ve ever heard of has followed this trajectory, unless it was spun off from earlier corporations.  If you trace their roots back far enough, every corporation, or its antecedents, will have begun with one person, one family or a small group’s dream that they too could build something out of their hard work and creativity.  It is a hugely commendable thing to build something like this out of nothing.

But can there be too much of a good thing?

Can there be too much competitiveness?  Too much success?  Too much market dominance?

Yes, there can be, Dorothy.  Absolutely.   Just because bigger seems better here in Kansas, or anywhere else, doesn’t mean it’s always the case.

Businesses can get so big that they becomes monopolies and bullies in their markets And when their competitiveness becomes market dominance, then serious systemic problems can develop.   And those problems mostly affect the small folks.

Remember the U.S. breakup Standard Oil in 1911? Or the U.S. breakup of Ma Bell in 1982?

In both of these cases, the growth of the organizations had led to so much market power that they were in the position to virtually set any price they wanted for their goods. They had grown so strong that they had very little competition left.

So, what limits run away corporate power?

What has always limited corporate power, up until recent times, has been government power.
That was what did it with Standard Oil and Ma Bell.

Now, by many people’s definition, government is suppose to exist to look out for the people’s common good.  See if you recognize this quote:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed….”

The founding fathers of the United States specifically said, “That to secure these rights, Governments are instituted among men….”.

When corporations are small, they are of a net benefit to all of us because of the the products and services they create and provide for us.   But, when they get too large, this net benefit can become a net liability.  And, when things get too far out of whack, corporations need to be controlled and regulated by the government for the common good.

And that’s the way it has worked with our government and corporations in the past.  But things are changing, Dorothy.

To show you how things are changing, let me digress and tell you a short story about the environmentalist movement in the U.S. during the 1960s.

Bear with me, please, even if you are not an environmentalist.  My story is relevant to the overall point of this article which is actually about the corrosive influence of mega corporations and big money on the American Democracy.

In the 1960’s there were numerous movements afoot to get laws passed that would protect the quality of our air and our water. These proposed laws were wending their way slowly through the legislative process at the national level and the corporate world was half attending to all of this but it is probably safe to say they weren’t too deeply worried about it.

Then some things happened that changed the game. There were reports about the utterly disgraceful state of some of the east coast’s rivers.  The Cuyahoga River in particular caught fire in Cleveland.  And the Interior Department was proposing to flood the Grand Canyon.  And then there was the infamous Santa Barbara Oil Spill that occurred in 1969.

Almost overnight the environmental movement, which had been simmering, was galvanized by these events to do something now.   And the bills in the legislature involving clean air and clean water were well positioned to benefit from the public’s new found passion for environmental protection.

As a result, these bills were passed decisively in a strong and undiluted form and became the new laws of the land.

The corporate world had been caught flat-footed by these rapidly moving events.  Things had moved too quickly for them and suddenly there were powerful new laws that put serious limitations on what corporations could and couldn’t do with their waste.

And they couldn’t complain too openly about all of this because, after all, the new laws had widespread public support.  The corporations couldn’t be seen in that political environment as opposing laws that protected the public commons from those who would abuse the air and the water for their own profits.

And about the same time that big business was realizing their vulnerability to such laws, the environmentalists were realizing that passing good environmental laws that just applied to the U.S. wouldn’t be sufficient, if the rest of the world just continued on as before. So, most of the people who were big players in the U.S. environmental movement shifted their efforts from being U.S. centric to being globally focused.

But never again

But, the business world is anything but stupid.   They had learned their lesson the hard way and they resolved to never again be caught sleeping nationally or internationally.

And, indeed, they’ve kept this promise to themselves.   Since those fateful days in the 1960’s and 70’s, when the Clean Air and Clean Water acts were passed, very little else of environmental significance has been signed into law within the U.S. or internationally because of effective and well focused resistance from the world business communities.

The only notable exception to this trend would be the Montreal Accord, which was ratified in 1989.  This international accord limits the production and use of Chlorofluorocarbons (CFC) which were decisively shown by scientists to be the smoking gun that was destroying the world’s Ozone Layer.

For those who might be interested in this type of history, I learned a lot of this from reading the books of James Gustave Speth, Dean of the Yale School of Forestry and Environmental Studies.  Speth is, and has been, one of the foremost actors in the U.S. and International environmental movements for many decades now.

The two books of his which I’ve read are, Red Sky at Morning – America and the Crisis of the Global Environment (2004) and The Bridge at the Edge of the World – Capitalism, the Environment, and Crossing from Crisis  to Sustainability (2008).

But now back to the main plot line

So, here’s how the story continues to unfold after the seminal events of the 60’s and 70’s:

The large corporations, whose bottom line’s were impacted by the new environmental laws, learned their lesson.   Now they could not just dump their industrial wastes into the rivers nor put just anything they wanted to up their smokestacks.  And those changes to what they could and could not do were going to cost them money and lower their profits.

Stung badly once, the corporate world began to pay attention to the environmental laws that were wending their ways through the world’s legislatures on their way to possibly becoming laws. And now, the corporate world began to put on the quiet full-court press to dilute or defeat such laws preemptively to protect their bottom lines.

These battles have mostly been fought in the smokey back rooms of the political world but sometimes they have erupted into public view.

Who doesn’t remember the Tobacco Industry executives testifying in front of Congress in 1994 on TV, no less, that smoking cigarettes was not harmful to public health?

They were prepared to, and they did, lie and say anything they could to deflect congress and the people’s will from diminishing their profits.  The Tobacco Industry spent an enormous amount of money on dis-information campaigns trying to deflect the law makers. But eventually Congress, with the input of scientific data on the effects of smoking, saw through their smoke screen and national laws were passed to lessen the dangers of smoking to the American public.

But the corporations have won many of these battles as well.

For instance, have you ever wondered why we cannot read on the  labels of the food we buy exactly what is in it and where it came from?

I could cite many examples where the corporate world has prevented the passage of laws to protect their own bottom line profits.

For a long time now, corporations have fought via their lobbyists in our legislatures to defeat or to water down bills that will impact their bottom line profits.

And regardless of the PR and the advertisements they put out which attempt to make them all look like our cuddly responsible corporate friends, these mega corporations and extremely high net-worth individuals, like the Koch brothers, are simply all about profits with little or no concern for the public good.

We’ve drifted from what the founding fathers envisioned

Do you remember the idea of one-man-one-vote that we all learned about in school?

We are not all equal voters.  It is obvious that mega corporations or very high net worth people with big money behind them can inordinately influence which laws are passed and which are not through lobbying.

Some of you will say, “Well, it’s always been that way in politics.”    And, probably, you are right.

But I’m not happy about it.  Maybe I was corrupted by watching Jimmy Stewart in the 1939 movie ‘Mr. Smith Goes to Washington‘ too many times.

So, here we have the picture then of why the corporate world exerts so much of its financial muscle on lobbying in our nation’s capital.   And the ugly truth is that it is to protect their own profits.  And all of that power, which is being exerted to shape the nation’s laws, have little or nothing to do with the common good as the fathers of our nation intended it.

Ah, but don’t despair – it gets worse

It gets worse? Yes, it does. This battle between the various forces in our society for who gets to make the laws is an ongoing thing. And like any ongoing battle, the strategies and the rules change as new opportunities are realized.

At some point, the large corporations and the mega high net-worth individuals realized that they could better influence which laws get made and which don’t not by lobbying – but by influencing who gets elected to make the laws in the first place.   Why hack at the branches if you can go for the roots, eh?

So big money has begun to pour huge sums into getting folks elected who will be sympathetic to the needs of business – rather than to the needs of the people.   And lets be clear, again, about what those ‘needs’ are.

The needs of business are to have their way cleared of ‘unnecessary’ laws so they can increase their profits.

This process of gaming the system in American politics with big money has gotten quite advanced.  And amazingly, most of the American public hasn’t noticed.

Big business isn’t stupid by any means. They know that they can still have their gains rolled back at the ballot box if people were to get aware of and upset about what’s going on.

So, you won’t see them promoting their side of this battle by saying things like, “The rich have every right to get richer regardless of the consequence to ordinary citizens.”

Instead, they push themes like, “We need less government regulation and interference.  Such interference prevents small hard working Mom and Pop entrepreneurs all over this great country from reaching their full potential.”

They purposely, and cynically, associate themselves with the small and medium size business community and make it seem like these folks and big business have common cause.

And there’s just enough truth in what they say sometimes to make it plausible.

But the cynicism of why they are doing it is breathtaking. They don’t give a rat’s behind about the small and medium Mom and Pop folks other than to use them as a foil to distract the public’s attention from their devious gaming of the American political system.

Back near the beginning of this piece, I made a point to say that I applaud the Mom and Pop small and medium sized entrepreneurs of America.  And I meant it. The are the engines of creation in this country. They make the country better.

But, the really big corporations, those whose sole motivation is to maximize their profits and minimize their costs, and the really high net worth individuals who never think they’ll have enough money, these folks are of a different breed altogether.

The signs that they are making inroads into controlling our legislative processes for their own benefit are all around us.   But, these signs are largely hidden by the immense PR smoke screens they are putting up to confuse the public.

In this context, the ‘Citizens United‘ decision by the Supreme Court a few years ago to grant corporations the same rights as people was huge.

So, what is a corporation anyway?

I’ll tell you this – they are not our neighborhood fuzzy responsible community friends.

Consider that a large corporation is an entity that exists solely to maximize the investment returns of its stockholders. This is a simple cold hard fact. They have only one motivation and that is profit maximization.

They have zero motivation to consider what’s good for the nation or for the public unless the issue begins to interfere with their profits.

And, if some public concern does begin to impact their profits, they’ll make superficial changes and unleash a storm of PR designed to make us think that they are on our side and they have our best interests in mind and they are part of our community and they share our values and etc. and etc. We’ve seen it all. But few of us have recognized how deeply cynical it all is.

If this was a real person who had such a single minded focus, most of us would think they were a dangerous unfeeling psychopath walking among us.

But now, according to the Supreme Court, these entities can move among us with the same rights as sovereign citizens.

And the limits of how much they can donate to political campaigns have largely been lifted.

So, what causes do you think that these newly minted mega corporate ‘citizens’ donate money to?   The only ones they care about, of course. And that’s getting folks elected who will not pass laws that will interfere with their right to maximize their profits.

Their audacity knows no limits

This corporate philosophy, of not hacking at the branches if you can go for the roots, is expanding in a frightening manner internationally now.

There’s something called the TPPA, the Trans Pacific Partnership Agreement.   It has been under negotiation since 2005 and currently 11 nations from around the Pacific Rim are involved.

The stated purpose of the TPPA is:

… to enhance trade and investment among the TPP partner countries, promote innovation, economic growth and development, and support the creation and retention of jobs.

Whooo-ee.  That sounds good, doesn’t it?

Folks in most of the countries involved in these negotiations have no idea these negotiations are even going on, much less the details of what’s actually being negotiated.

You see, the negotiations are being carried out in secret.  In many cases, they are being kept secret from even from the legislators of the countries negotiating.  Specially appointed government trade negotiators are conducting these negotiations and these folks are appointed people – not elected people.

It gets even more incredible.

In the U.S., which is the most dominate of the countries involved, the vast majority of the House and Senate membership are blocked from knowing the details of what’s being negotiated while representatives from a number of large U.S. corporations are allowed to sit in on the negotiations – as they occur.

Yes, you heard that right. Our elected representative are locked out and the mega corporations are sitting in as advisors to the negotiators.

Why the h*** would that be, you say?

Well, from the few documents that have been leaked from these secret negotiations, it turns out to be evident that only about 30% of these agreements actually have anything to do with free trade.  While the majority of what’s being negotiated has to do with protecting corporate rights and profits!

I know, many of you at this point in this story think that I must have drunk the bad kool-aid on this one right?

Well, you’d be wrong.  This is no straw man.

There’s ample documentation of what’s going on out there and of what’s intended to happen, if the corporations get their way.

Proof?

Here’s a statement by Ron Wyden, a U.S. Senator from Oregon expressing his deep frustration as how little, as a U.S. Senator, he’s been able to find out about what’s being negotiated.

In a floor statement to Congress Wyden said, “The majority of Congress is being kept in the dark as to the substance of the TPP negotiations, while representatives of US corporations — like Halliburton, Chevron, Comcast and the Motion Picture Association of America — are being consulted and made privy to details of the agreement.”

And here’s a recent article that appeared in the New York Times by Joseph E. Stiglitz, a U.S. Nobel Prize winning economist, about what he thinks the TPPA is really about and what’s wrong with it. I encourage you to read this.

http://opinionator.blogs.nytimes.com/2014/03/15/on-the-wrong-side-of-globalization/

This is huge, my friends.  Just Google the TPPA and you will find a ton of commentary on the Internet about it.   And then you might also reflect on why you never hear about this sort of thing on your evening news?

Just a bit more on the TPPA and then I’m going to wrap this up.

One of the worst aspects of what’s being proposed in the TPPA is that corporations will be able to sue sovereign nations – if those nations pass laws that diminish the profits of the corporations.

Yes, you heard that right.

Imagine that a country passes laws mandating that cigarette packs sold in that country have to have plain labeling and carry pictures of what happens to folk’s lungs when they smoke. Such a law would be passed for the good of the people, yes?

Or, perhaps they pass a law that no mining will be allowed in their national parks.  Again, this is a law passed for the good of the people of that country.

But, of course, the profits of the cigarette manufacturers and those of the mining companies would be decreased.

Under trade agreement law, as it would stand post-TPPA, the corporations involved could sue the countries that passed such laws to recover their lost profits.   And these law suits would be not be held in the courts of the countries involved but rather they would be decided by a three man international tribunal which would not be beholding to any country.

Hard to believe, isn’t it?  And all of that is going on around you in secret.   In secret even from your legislators.

When I tell folks that the large multi-national corporate world is infiltrating and taking over the sovereign functions of national governments as their latest strategy to increase their profits, some people look at me like I’m a nut case.

Make up your own mind

Pay attention to the news, now that you are aware of all of this.   Keeping watching and see what you think.

Ask yourself if mega corporations, solely obsessed with profits and utterly indifferent to the welfare of the people or of the nation, should be considered to be people and allowed to walk around unchecked in polite society?

Ask yourself, if a corporation is suppose to be a person, if you’d actually associate with a real person that had such nasty and mercenary personal attributes?

Or even more to the point, given how things are going, ask yourself what you think about living in a country where the “Government of the people, by the people, for the people, shall not perish from the Earth” is, in sad fact, withering away before our very eyes and being taken over by mega corporations and the very greedy.

These are not idle questions in the world today, my friends.

-dennis

Nasa-funded study: industrial civilisation headed for ‘irreversible collapse’?

Monday, March 17th, 2014

“With the enemy’s approach to Moscow, the Moscovites’ view of their situation did not grow more serious but on the contrary became even more frivolous, as always happens with people who see a great danger approaching.

At the approach of danger there are always two voices that speak with equal power in the human soul: one very reasonably tells a man to consider the nature of the danger and the means of escaping it; the other, still more reasonably, says that it is too depressing and painful to think of the danger, since it is not in man’s power to foresee everything and avert the general course of events, and it is therefore better to disregard what is painful till it comes, and to think about what is pleasant.”

– Leo Tolstoy – War and Peace

= = = = = = = = = = = = = = = = =

Natural and social scientists develop new model of how ‘perfect storm’ of crises could unravel global system

A new study sponsored by Nasa’s Goddard Space Flight Center has highlighted the prospect that global industrial civilisation could collapse in coming decades due to unsustainable resource exploitation and increasingly unequal wealth distribution.

Noting that warnings of ‘collapse’ are often seen to be fringe or controversial, the study attempts to make sense of compelling historical data showing that “the process of rise-and-collapse is actually a recurrent cycle found throughout history.” Cases of severe civilisational disruption due to “precipitous collapse – often lasting centuries – have been quite common.”

The research project is based on a new cross-disciplinary ‘Human And Nature DYnamical’ (HANDY) model, led by applied mathematician Safa Motesharri of the US National Science Foundation-supported National Socio-Environmental Synthesis Center, in association with a team of natural and social scientists. The study based on the HANDY model has been accepted for publication in the peer-reviewed Elsevier journal, Ecological Economics.

It finds that according to the historical record even advanced, complex civilisations are susceptible to collapse, raising questions about the sustainability of modern civilisation:

“The fall of the Roman Empire, and the equally (if not more) advanced Han, Mauryan, and Gupta Empires, as well as so many advanced Mesopotamian Empires, are all testimony to the fact that advanced, sophisticated, complex, and creative civilizations can be both fragile and impermanent.”

By investigating the human-nature dynamics of these past cases of collapse, the project identifies the most salient interrelated factors which explain civilisational decline, and which may help determine the risk of collapse today: namely, Population, Climate, Water, Agriculture, and Energy.

These factors can lead to collapse when they converge to generate two crucial social features: “the stretching of resources due to the strain placed on the ecological carrying capacity”; and “the economic stratification of society into Elites [rich] and Masses (or “Commoners”) [poor]” These social phenomena have played “a central role in the character or in the process of the collapse,” in all such cases over “the last five thousand years.”

Currently, high levels of economic stratification are linked directly to overconsumption of resources, with “Elites” based largely in industrialised countries responsible for both:

“… accumulated surplus is not evenly distributed throughout society, but rather has been controlled by an elite. The mass of the population, while producing the wealth, is only allocated a small portion of it by elites, usually at or just above subsistence levels.”

The study challenges those who argue that technology will resolve these challenges by increasing efficiency:

“Technological change can raise the efficiency of resource use, but it also tends to raise both per capita resource consumption and the scale of resource extraction, so that, absent policy effects, the increases in consumption often compensate for the increased efficiency of resource use.”

Productivity increases in agriculture and industry over the last two centuries has come from “increased (rather than decreased) resource throughput,” despite dramatic efficiency gains over the same period.

Modelling a range of different scenarios, Motesharri and his colleagues conclude that under conditions “closely reflecting the reality of the world today… we find that collapse is difficult to avoid.” In the first of these scenarios, civilisation:

“…. appears to be on a sustainable path for quite a long time, but even using an optimal depletion rate and starting with a very small number of Elites, the Elites eventually consume too much, resulting in a famine among Commoners that eventually causes the collapse of society. It is important to note that this Type-L collapse is due to an inequality-induced famine that causes a loss of workers, rather than a collapse of Nature.”

Another scenario focuses on the role of continued resource exploitation, finding that “with a larger depletion rate, the decline of the Commoners occurs faster, while the Elites are still thriving, but eventually the Commoners collapse completely, followed by the Elites.”

In both scenarios, Elite wealth monopolies mean that they are buffered from the most “detrimental effects of the environmental collapse until much later than the Commoners”, allowing them to “continue ‘business as usual’ despite the impending catastrophe.” The same mechanism, they argue, could explain how “historical collapses were allowed to occur by elites who appear to be oblivious to the catastrophic trajectory (most clearly apparent in the Roman and Mayan cases).”

Applying this lesson to our contemporary predicament, the study warns that:

“While some members of society might raise the alarm that the system is moving towards an impending collapse and therefore advocate structural changes to society in order to avoid it, Elites and their supporters, who opposed making these changes, could point to the long sustainable trajectory ‘so far’ in support of doing nothing.”

However, the scientists point out that the worst-case scenarios are by no means inevitable, and suggest that appropriate policy and structural changes could avoid collapse, if not pave the way toward a more stable civilisation.

The two key solutions are to reduce economic inequality so as to ensure fairer distribution of resources, and to dramatically reduce resource consumption by relying on less intensive renewable resources and reducing population growth:

“Collapse can be avoided and population can reach equilibrium if the per capita rate of depletion of nature is reduced to a sustainable level, and if resources are distributed in a reasonably equitable fashion.”

The NASA-funded HANDY model offers a highly credible wake-up call to governments, corporations and business – and consumers – to recognise that ‘business as usual’ cannot be sustained, and that policy and structural changes are required immediately.

Although the study is largely theoretical, a number of other more empirically-focused studies – by KPMG and the UK Government Office of Science for instance – have warned that the convergence of food, water and energy crises could create a ‘perfect storm’ within about fifteen years. But these ‘business as usual’ forecasts could be very conservative.

– To the original article:  ➡

 

The Verdict on Thatcherism Is Clear

Thursday, March 13th, 2014

Simply compare how her UK squandered its oil wealth compared to Norway

Nothing says free market capitalism like Margaret Thatcher. The Iron Lady once proclaimed, “Socialist governments traditionally do make a financial mess. They always run out of other people’s money.”

Thirty-five years after she swept to power as British prime minister, it is ironic that socialist Norway now has $830 billion in the bank and enjoys fully funded social programs that most of us can only dream of. Meanwhile the U.K. is enduring another round of wrenching austerity and owes over £1.3 trillion — about US$2.2 trillion. That massive debt grows by about $3.8 billion each week, while every seven days Norway adds another billion dollars to their bank account.

What happened? Both countries were in dire economic straights in early 1970s. Both countries came into the financial windfall of North Sea oil around the same time, exploiting the same resource — sometimes from the same drill rig. How could they have ended up in such vastly different places?

Rarely in history has there been such a clear-cut opportunity to explore the real world success or failure of competing world-views. Thatcherism has gone on to become an economic school of thought with true believers in positions of power around the world. The doctrine of cutting taxes, privatizing government assets and embracing deregulation continues apace around the globe to this day. But does it work?

First let’s agree on some fundamentals. Wealth flows from resources and oil is a particularly lucrative bounty. The 75 billion barrels of light sweet crude discovered in the North Sea was worth over $8 trillion at 2014 prices. With that much money on the table and the resource roughly evenly split between the U.K. and Norway, let’s see how socialism and Thatcherism fared in this economic cage match.

For starters, Norway isn’t precisely “socialist.” Like other Scandinavian countries, they have a mixed-market economy with relatively high levels of taxation and comprehensive social programs. The main difference was that Norwegians did not have an allergic aversion to public participation in their economy.

One of the first things the Norwegian government did was to incorporate a state owned oil company — Statoil — to ensure they had an equity stake in their own oil production and to act as a repository for oil expertise. Since Norway knew essentially nothing about the oil business, they had to learn fast and having a player on the field helped them do that.

Oil is also a good investment and the Norwegian taxpayer has enjoyed over $23 billion in Statoil dividends from their government’s stake in the company since it was founded in 1972. The equity value of those shares is worth another $64 billion.

Lady Thatcher on the other hand embraced the conservative ideal of minimizing government presence in the marketplace, virtually inventing the process of privatization. One of her first acts on election was to sell 80 million shares of British Petroleum, ending the majority stake the U.K. government had held in the company since 1913 on the advice of Winston Churchill. Thatcher sold the U.K.’s remaining 1.7 billion shares in BP immediately after the stock market crash of 1987. While this raised $20 billion at the time, adjusted for inflation, those same shares would be worth over $87 billion today.

Taxation is of course another yawning philosophical divide between Thatcherism and the Norwegian model. While Norway needed outside expertise and capital to develop offshore drilling operations, they also wanted to tax foreign companies to limits of tolerance — to “squeeze the lemon to the maximum” as one historian told me. An unspoken role of Statoil was to pass on informed intelligence from within the oil industry on costs, prices and players so the Norwegian government could better prevail at the negotiating table.

This was no garden party. With literally trillions of dollars at stake, Norway was playing to win. At one iconic meeting in 1974 the Norwegian government announced to a delegation of oil companies that they were raising the level of taxation on petroleum profits to 90 per cent from 50. After the shouting had died down, the minister expressed disappointment that some of them did not walk away from their offshore leases. “We should have taken more,” he admonished his bureaucrats in full view of the enraged oil executives.

Thatcher on the other hand seemed more enamoured with ideology than money. She told a Conservative conference in 1977, “Our aim is to make tax collecting a declining industry.” She and successive governments succeeded in that dubious goal. Even though the U.K. extracted nine per cent more oil and gas by 2011, they collected $156 billion less in petroleum taxes and royalties than the Norwegians.

– More…

 

– Research thanks to Kierin M.

Untested rape kit backlogs

Wednesday, February 26th, 2014

With possibly hundreds of thousands of rape kits untested across the country, a number of states are proposing legislation to address backlogs that in at least one case dates back nearly three decades.

In Memphis, Tennessee, alone, there are more than 12,000 untested rape kits going back to the 1980s, according to the New York-based Rape Kit Action Project, which has been tracking the backlogs nationwide. In the entire state of Texas, there are about 16,000 untested kits collecting dust in police evidence rooms.

Tennessee is among at least 17 states with proposals that range from requiring law enforcement agencies to inventory their rape kits to analyzing them in a certain amount of time. Three states – Colorado, Illinois and Texas – have passed laws that mandate a statewide accounting of untested rape kits.

Most of the other states’ proposals favor the inventory measure that would require all law enforcement agencies that store rape kits to count the number of untested kits. Rape Project spokeswoman Natasha Alexenko estimates there are about 400,000 nationwide that fall into that category.

“Until we enact this kind of legislation where we’re counting them, we really have no idea,” said Alexenko, a rape victim whose rape kit was finally tested after nearly 10 years, and her attacker arrested after a match was found.

– More…

Robert Reich: Where is the angry middle-class revolution?

Wednesday, January 29th, 2014

Our incomes are shrinking while the 1 percent profits. Change will only happen when the middle class gets mad

by Robert Reich on Salon

People ask me all the time why we don’t have a revolution in America, or at least a major wave of reform similar to that of the Progressive Era or the New Deal or the Great Society.

Middle incomes are sinking, the ranks of the poor are swelling, almost all the economic gains are going to the top, and big money is corrupting our democracy. So why isn’t there more of a ruckus?

The answer is complex, but three reasons stand out.

First, the working class is paralyzed with fear it will lose the jobs and wages it already has.

In earlier decades, the working class fomented reform. The labor movement led the charge for a minimum wage, 40-hour workweek, unemployment insurance, and Social Security.

No longer. Working people don’t dare. The share of working-age Americans holding jobs is now lower than at any time in the last three decades and 76 percent of them are living paycheck to paycheck.

No one has any job security. The last thing they want to do is make a fuss and risk losing the little they have.

Besides, their major means of organizing and protecting themselves — labor unions — have been decimated. Four decades ago more than a third of private-sector workers were unionized. Now, fewer than 7 percent belong to a union.

Second, students don’t dare rock the boat.

In prior decades students were a major force for social change. They played an active role in the Civil Rights movement, the Free Speech movement, and against the Vietnam War.

But today’s students don’t want to make a ruckus. They’re laden with debt. Since 1999, student debt has increased more than 500 percent, yet the average starting salary for graduates has dropped 10 percent, adjusted for inflation. Student debts can’t be cancelled in bankruptcy. A default brings penalties and ruins a credit rating.

To make matters worse, the job market for new graduates remains lousy. Which is why record numbers are still living at home.

Reformers and revolutionaries don’t look forward to living with mom and dad or worrying about credit ratings and job recommendations.

Third and finally, the American public has become so cynical about government that many no longer think reform is possible.



When asked if they believe government will do the right thing most of the time, fewer than 20 percent of Americans agree. Fifty years ago, when that question was first asked on standard surveys, more than 75 percent agreed.

It’s hard to get people worked up to change society or even to change a few laws when they don’t believe government can possibly work.

You’d have to posit a giant conspiracy in order to believe all this was the doing of the forces in America most resistant to positive social change.

It’s possible. of course, that rightwing Republicans, corporate executives, and Wall Street moguls intentionally cut jobs and wages in order to cow average workers, buried students under so much debt they’d never take to the streets, and made most Americans so cynical about government they wouldn’t even try for change.

But it’s more likely they merely allowed all this to unfold, like a giant wet blanket over the outrage and indignation most Americans feel but don’t express.

Change is coming anyway. We cannot abide an ever-greater share of the nation’s income and wealth going to the top while median household incomes continue too drop, one out of five of our children living in dire poverty, and big money taking over our democracy.

At some point, working people, students, and the broad public will have had enough. They will reclaim our economy and our democracy. This has been the central lesson of American history.

Reform is less risky than revolution, but the longer we wait the more likely it will be the latter.

– to the original article:

 

David Simon: ‘There are now two Americas. My country is a horror show’

Sunday, December 15th, 2013

The creator of The Wire, David Simon, delivered an impromptu speech about the divide between rich and poor in America at theFestival of Dangerous Ideas in Sydney, and how capitalism has lost sight of its social compact. This is an edited extract

America is a country that is now utterly divided when it comes to its society, its economy, its politics. There are definitely two Americas. I live in one, on one block in Baltimore that is part of the viable America, the America that is connected to its own economy, where there is a plausible future for the people born into it. About 20 blocks away is another America entirely. It’s astonishing how little we have to do with each other, and yet we are living in such proximity.

There’s no barbed wire around West Baltimore or around East Baltimore, around Pimlico, the areas in my city that have been utterly divorced from the American experience that I know. But there might as well be. We’ve somehow managed to march on to two separate futures and I think you’re seeing this more and more in the west. I don’t think it’s unique to America.

I think we’ve perfected a lot of the tragedy and we’re getting there faster than a lot of other places that may be a little more reasoned, but my dangerous idea kind of involves this fellow who got left by the wayside in the 20th century and seemed to be almost the butt end of the joke of the 20th century; a fellow named Karl Marx.

I’m not a Marxist in the sense that I don’t think Marxism has a very specific clinical answer to what ails us economically. I think Marx was a much better diagnostician than he was a clinician. He was good at figuring out what was wrong or what could be wrong with capitalism if it wasn’t attended to and much less credible when it comes to how you might solve that.

You know if you’ve read Capital or if you’ve got the Cliff Notes, you know that his imaginings of how classical Marxism – of how his logic would work when applied – kind of devolve into such nonsense as the withering away of the state and platitudes like that. But he was really sharp about what goes wrong when capital wins unequivocally, when it gets everything it asks for.

That may be the ultimate tragedy of capitalism in our time, that it has achieved its dominance without regard to a social compact, without being connected to any other metric for human progress.

We understand profit. In my country we measure things by profit. We listen to the Wall Street analysts. They tell us what we’re supposed to do every quarter. The quarterly report is God. Turn to face God. Turn to face Mecca, you know. Did you make your number? Did you not make your number? Do you want your bonus? Do you not want your bonus?

And that notion that capital is the metric, that profit is the metric by which we’re going to measure the health of our society is one of the fundamental mistakes of the last 30 years. I would date it in my country to about 1980 exactly, and it has triumphed.

Capitalism stomped the hell out of Marxism by the end of the 20th century and was predominant in all respects, but the great irony of it is that the only thing that actually works is not ideological, it is impure, has elements of both arguments and never actually achieves any kind of partisan or philosophical perfection.

It’s pragmatic, it includes the best aspects of socialistic thought and of free-market capitalism and it works because we don’t let it work entirely. And that’s a hard idea to think – that there isn’t one single silver bullet that gets us out of the mess we’ve dug for ourselves. But man, we’ve dug a mess.

After the second world war, the west emerged with the American economy coming out of its wartime extravagance, emerging as the best product. It was the best product. It worked the best. It was demonstrating its might not only in terms of what it did during the war but in terms of just how facile it was in creating mass wealth.

Plus, it provided a lot more freedom and was doing the one thing that guaranteed that the 20th century was going to be – and forgive the jingoistic sound of this – the American century.

It took a working class that had no discretionary income at the beginning of the century, which was working on subsistence wages. It turned it into a consumer class that not only had money to buy all the stuff that they needed to live but enough to buy a bunch of shit that they wanted but didn’t need, and that was the engine that drove us.

It wasn’t just that we could supply stuff, or that we had the factories or know-how or capital, it was that we created our own demand and started exporting that demand throughout the west. And the standard of living made it possible to manufacture stuff at an incredible rate and sell it.

And how did we do that? We did that by not giving in to either side. That was the new deal. That was the great society. That was all of that argument about collective bargaining and union wages and it was an argument that meant neither side gets to win.

Labour doesn’t get to win all its arguments, capital doesn’t get to. But it’s in the tension, it’s in the actual fight between the two, that capitalism actually becomes functional, that it becomes something that every stratum in society has a stake in, that they all share.

The unions actually mattered. The unions were part of the equation. It didn’t matter that they won all the time, it didn’t matter that they lost all the time, it just mattered that they had to win some of the time and they had to put up a fight and they had to argue for the demand and the equation and for the idea that workers were not worth less, they were worth more.

Ultimately we abandoned that and believed in the idea of trickle-down and the idea of the market economy and the market knows best, to the point where now libertarianism in my country is actually being taken seriously as an intelligent mode of political thought. It’s astonishing to me. But it is. People are saying I don’t need anything but my own ability to earn a profit. I’m not connected to society. I don’t care how the road got built, I don’t care where the firefighter comes from, I don’t care who educates the kids other than my kids. I am me. It’s the triumph of the self. I am me, hear me roar.

That we’ve gotten to this point is astonishing to me because basically in winning its victory, in seeing that Wall come down and seeing the former Stalinist state’s journey towards our way of thinking in terms of markets or being vulnerable, you would have thought that we would have learned what works. Instead we’ve descended into what can only be described as greed. This is just greed. This is an inability to see that we’re all connected, that the idea of two Americas is implausible, or two Australias, or two Spains or two Frances.

Societies are exactly what they sound like. If everybody is invested and if everyone just believes that they have “some”, it doesn’t mean that everybody’s going to get the same amount. It doesn’t mean there aren’t going to be people who are the venture capitalists who stand to make the most. It’s not each according to their needs or anything that is purely Marxist, but it is that everybody feels as if, if the society succeeds, I succeed, I don’t get left behind. And there isn’t a society in the west now, right now, that is able to sustain that for all of its population.

And so in my country you’re seeing a horror show. You’re seeing a retrenchment in terms of family income, you’re seeing the abandonment of basic services, such as public education, functional public education. You’re seeing the underclass hunted through an alleged war on dangerous drugs that is in fact merely a war on the poor and has turned us into the most incarcerative state in the history of mankind, in terms of the sheer numbers of people we’ve put in American prisons and the percentage of Americans we put into prisons. No other country on the face of the Earth jails people at the number and rate that we are.

We have become something other than what we claim for the American dream and all because of our inability to basically share, to even contemplate a socialist impulse.

Socialism is a dirty word in my country. I have to give that disclaimer at the beginning of every speech, “Oh by the way I’m not a Marxist you know”. I lived through the 20th century. I don’t believe that a state-run economy can be as viable as market capitalism in producing mass wealth. I don’t.

I’m utterly committed to the idea that capitalism has to be the way we generate mass wealth in the coming century. That argument’s over. But the idea that it’s not going to be married to a social compact, that how you distribute the benefits of capitalism isn’t going to include everyone in the society to a reasonable extent, that’s astonishing to me.

And so capitalism is about to seize defeat from the jaws of victory all by its own hand. That’s the astonishing end of this story, unless we reverse course. Unless we take into consideration, if not the remedies of Marx then the diagnosis, because he saw what would happen if capital triumphed unequivocally, if it got everything it wanted.

And one of the things that capital would want unequivocally and for certain is the diminishment of labour. They would want labour to be diminished because labour’s a cost. And if labour is diminished, let’s translate that: in human terms, it means human beings are worth less.

From this moment forward unless we reverse course, the average human being is worth less on planet Earth. Unless we take stock of the fact that maybe socialism and the socialist impulse has to be addressed again; it has to be married as it was married in the 1930s, the 1940s and even into the 1950s, to the engine that is capitalism.

Mistaking capitalism for a blueprint as to how to build a society strikes me as a really dangerous idea in a bad way. Capitalism is a remarkable engine again for producing wealth. It’s a great tool to have in your toolbox if you’re trying to build a society and have that society advance. You wouldn’t want to go forward at this point without it. But it’s not a blueprint for how to build the just society. There are other metrics besides that quarterly profit report.

The idea that the market will solve such things as environmental concerns, as our racial divides, as our class distinctions, our problems with educating and incorporating one generation of workers into the economy after the other when that economy is changing; the idea that the market is going to heed all of the human concerns and still maximise profit is juvenile. It’s a juvenile notion and it’s still being argued in my country passionately and we’re going down the tubes. And it terrifies me because I’m astonished at how comfortable we are in absolving ourselves of what is basically a moral choice. Are we all in this together or are we all not?

If you watched the debacle that was, and is, the fight over something as basic as public health policy in my country over the last couple of years, imagine the ineffectiveness that Americans are going to offer the world when it comes to something really complicated like global warming. We can’t even get healthcare for our citizens on a basic level. And the argument comes down to: “Goddamn this socialist president. Does he think I’m going to pay to keep other people healthy? It’s socialism, motherfucker.”

What do you think group health insurance is? You know you ask these guys, “Do you have group health insurance where you …?” “Oh yeah, I get …” you know, “my law firm …” So when you get sick you’re able to afford the treatment.

The treatment comes because you have enough people in your law firm so you’re able to get health insurance enough for them to stay healthy. So the actuarial tables work and all of you, when you do get sick, are able to have the resources there to get better because you’re relying on the idea of the group. Yeah. And they nod their heads, and you go “Brother, that’s socialism. You know it is.”

And … you know when you say, OK, we’re going to do what we’re doing for your law firm but we’re going to do it for 300 million Americans and we’re going to make it affordable for everybody that way. And yes, it means that you’re going to be paying for the other guys in the society, the same way you pay for the other guys in the law firm … Their eyes glaze. You know they don’t want to hear it. It’s too much. Too much to contemplate the idea that the whole country might be actually connected.

So I’m astonished that at this late date I’m standing here and saying we might want to go back for this guy Marx that we were laughing at, if not for his prescriptions, then at least for his depiction of what is possible if you don’t mitigate the authority of capitalism, if you don’t embrace some other values for human endeavour.

And that’s what The Wire was about basically, it was about people who were worth less and who were no longer necessary, as maybe 10 or 15% of my country is no longer necessary to the operation of the economy. It was about them trying to solve, for lack of a better term, an existential crisis. In their irrelevance, their economic irrelevance, they were nonetheless still on the ground occupying this place called Baltimore and they were going to have to endure somehow.

That’s the great horror show. What are we going to do with all these people that we’ve managed to marginalise? It was kind of interesting when it was only race, when you could do this on the basis of people’s racial fears and it was just the black and brown people in American cities who had the higher rates of unemployment and the higher rates of addiction and were marginalised and had the shitty school systems and the lack of opportunity.

And kind of interesting in this last recession to see the economy shrug and start to throw white middle-class people into the same boat, so that they became vulnerable to the drug war, say from methamphetamine, or they became unable to qualify for college loans. And all of a sudden a certain faith in the economic engine and the economic authority of Wall Street and market logic started to fall away from people. And they realised it’s not just about race, it’s about something even more terrifying. It’s about class. Are you at the top of the wave or are you at the bottom?

So how does it get better? In 1932, it got better because they dealt the cards again and there was a communal logic that said nobody’s going to get left behind. We’re going to figure this out. We’re going to get the banks open. From the depths of that depression a social compact was made between worker, between labour and capital that actually allowed people to have some hope.

We’re either going to do that in some practical way when things get bad enough or we’re going to keep going the way we’re going, at which point there’s going to be enough people standing on the outside of this mess that somebody’s going to pick up a brick, because you know when people get to the end there’s always the brick. I hope we go for the first option but I’m losing faith.

The other thing that was there in 1932 that isn’t there now is that some element of the popular will could be expressed through the electoral process in my country.

The last job of capitalism – having won all the battles against labour, having acquired the ultimate authority, almost the ultimate moral authority over what’s a good idea or what’s not, or what’s valued and what’s not – the last journey for capital in my country has been to buy the electoral process, the one venue for reform that remained to Americans.

Right now capital has effectively purchased the government, and you witnessed it again with the healthcare debacle in terms of the $450m that was heaved into Congress, the most broken part of my government, in order that the popular will never actually emerged in any of that legislative process.

So I don’t know what we do if we can’t actually control the representative government that we claim will manifest the popular will. Even if we all start having the same sentiments that I’m arguing for now, I’m not sure we can effect them any more in the same way that we could at the rise of the Great Depression, so maybe it will be the brick. But I hope not.

David Simon is an American author and journalist and was the executive producer of The Wire. This is an edited extract of a talk delivered at the Festival of Dangerous Ideas in Sydney.

 

– To the original Article:  

– research thanks to Gus H.

 

“Managing Transparency”

Sunday, December 15th, 2013

By George Monbiot of the UK’s Guardian – 2 December 2013

Politicians and officials are desperately seeking to justify their transatlantic assault on democracy.

Panic spreads through the European Commission like ferrets in a rabbit warren. Its plans to create a single market incorporating Europe and the United States, progressing so nicely when hardly anyone knew, have been blown wide open. All over Europe people are asking why this is happening; why we were not consulted; for whom it is being done.

They have good reason to ask. The Commission insists that its Transatlantic Trade and Investment Partnership should include a toxic mechanism called investor-state dispute settlement. Where this has been forced into other trade agreements, it has allowed big corporations to sue governments before secretive arbitration panels composed of corporate lawyers, which bypass domestic courts and override the will of parliaments(1).

This mechanism could threaten almost any means by which governments might seek to defend their citizens or protect the natural world. Already it is being used by mining companies to sue governments trying to keep them out of protected areas(2,3); by banks fighting financial regulation(4); by a nuclear company contesting Germany’s decision to switch off atomic power(5). After a big political fight we’ve now been promised plain packaging for cigarettes. But it could be nixed by an offshore arbitration panel. The tobacco company Philip Morris is currently suing Australia through the same mechanism in another treaty(6).

No longer able to keep this process quiet, the European Commission has instead devised a strategy for lying to us. A few days ago an internal document was leaked(7). This reveals that a “dedicated communications operation” is being “coordinated across the Commission”. It involves, to use the EC’s chilling phrase, the “management of stakeholders, social media and transparency.” Managing transparency should be adopted as its motto.

The message is that the trade deal is about “delivering growth and jobs” and will not “undermine regulation and existing levels of protection in areas like health, safety and the environment”. Just one problem: it’s not true.

From the outset, the Transatlantic Trade and Investment Partnership has been driven by corporations and their lobby groups, who boast of being able to “co-write” it(8,9). Persistant digging by the Corporate Europe Observatory reveals that the commission has held eight meetings on the issue with civil society groups, and 119 with corporations and their lobby groups(10). Unlike the civil society meetings, these have taken place behind closed doors and have not been disclosed online.

Though the Commission now tells the public that it will protect “the state’s right to regulate”(11), this isn’t the message the corporations have been hearing. In an interview last week, Stuart Eizenstat, co-chair of the Transatlantic Business Council, instrumental in driving the process, was asked whether companies whose products had been banned by regulators would be able to sue(12). Yes. “If a suit like that was brought and was successful, it would mean that the country banning the product would have to pay compensation to the industry involved or let the product in.” Would that apply to the European ban on chicken carcasses washed with chlorine, a controversial practice permitted in the US? “That’s one example where it might.”

What the Commission and its member governments fail to explain is why we need offshore arbitration at all. It insists that domestic courts “might be biased or lack independence”(13), but which courts is it talking about? It won’t say. Last month, while trying to defend the treaty, the British minister Kenneth Clarke said something revealing:

“Investor protection is a standard part of free-trade agreements – it was designed to support businesses investing in countries where the rule of law is unpredictable, to say the least.”(14) So what is it doing in an EU-US deal? Why are we using measures designed to protect corporate interests in failed states in countries with a functioning judicial system? Perhaps it’s because functioning courts are less useful to corporations than opaque and injust arbitration by corporate lawyers.

As for the Commission’s claim that the trade deal will produce growth and jobs, this is also likely to be false. Barack Obama promised that the US-Korea Free Trade Agreement would increase US exports by $10bn. They immediately fell by $3.5bn(15). The 70,000 jobs it would deliver? Er, 40,000 were lost. Bill Clinton promised that the North American Free Trade Agreement would create 200,000 new jobs for the US; 680,000 went down the pan(16,17). As the commentator Glyn Moody says, “the benefits are slight and illusory, while the risks are very real.”(18)

So where are our elected representatives? Fast asleep. Labour MEPs, now frantically trying to keep investor-state dispute mechanisms out of the agreement, are the  exception(19); the rest are in Neverland. The LibDem MEP Sir Graham Watson wrote in his newsletter, before dismissing the idea, “I am told that columnists on The Guardian and The Independent claim it will hugely advantage US multinational companies to the detriment of Europe.”(20) We said no such thing, as he would know had he read the articles, rather than idiotically relying on hearsay. The treaty is likely to advantage the corporations of both the US and the EU, while disadvantaging their people. It presents a danger to democracy and public protection throughout the trading area.

Caroline Lucas, one of the few MPs who remains interested in the sovereignty of parliament, has published an early day motion on the issue(21). It has so far been signed by only seven MPs. For the government, Kenneth Clarke argues that to ignore the potential economic gains of the trade agreement “in favour of blowing up a controversy around one small part of the negotiations, known as investor protection, seems to me positively Scrooge-like.”(22)

Quite right too. Overriding our laws, stripping away our rights, making parliament redundant: these are trivial and irrelevant beside the issue of how much money could be made. Don’t worry your little heads about it.

– To the original Article:  

– Research thanks to Piers L.