If we attempt to divorce ourselves from our human points-of-view and look on dispassionately, it can be seen that 99%+ of existence is simply working its way towards what is called the ‘heat-death’ of existence. Which can also be expressed as the end-game of the Second Law of Thermodynamics.
But there is a much, much smaller part of existence which is moving the other way. I.e. towards amassing greater complexity and concentration of energy and organization. I’m referring to life. Life can arises in goldilocks zones of excess energy through processes we don’t fully understand. But, arise it does. Life on Earth is the proof.
Indeed, I once expressed this in a cryptic bit of writing a few years ago:
“Energy evaporates down gradients and little creatures arise in the backwash.”
So, do we and the backwash arising of life have a purpose? If so, I cannot see it implied anywhere. But, in spite of that, it is a truly amazing thing that natural processes within existence should be able to create and evolve bits of itself (us) which are aware of itself.
Are we, the pinnacle creatures on this planet, likely to be the pinnacle creatures throughout existence? Given the size of existence, that seems an extremely dubious notion.
I like your idea about what a next intelligent species might be like:
“Maybe the next intelligent species won’t even care about tech. They’ll just float around, eat fish, sing songs, have sex, and raise their babies, happy to be alive on this planet.“
There’s nothing impossible about it. All it requires is the manifested intent of the new species be to live within the limits of the biosphere around it.
We humans could do that now and live on this planet for many hundreds of thousands of years more. Evolving our intelligence up and up and patiently enjoying our lives and seeing what awaits us.
But I strongly doubt we will change and follow that path. I think we are taking the current biosphere into a big reset. After that, life will slowly build again and maybe those who come after will outgrow this inherent self-destructiveness that we seem to have.
Archive for the ‘Financial melt-down’ Category
Prognosis
Tuesday, March 8th, 2022Posted in Biodiversity Loss, Climate Change, Conflict, CrashBlogging, CyberChaos, Deforestation, Desertification, Extinctions, Financial melt-down, Food Shortages, Pandemics, Social Breakdown, The Perfect Storm, Wealth Disparity | No Comments »
The state of the U.S
Thursday, July 23rd, 2020Your asked if I have better suggestions?
- If he would just back off and govern for the good of the people.
- If he would stop with all the conservative against liberal agitation.
- If he would start doing whatever it takes for the U.S. to beat the virus as New Zealand has.
- If he would start rolling back all the laws that benefit the rich against the poor and middle classes.
- If he would block the loopholes that allow the wealthy to avoid taxes and hide their money offshore.
- If he would work to bring manufacturing back into the country.
- If he would stop unlimited campaign financing so that the elected representatives represent the voters who elected them rather than those who donated massive amounts of money too their campaigns.
- If he would revoke the law that says corporations have the same rights as people.
- If he would establish universal health care like every other major nation the the world.
- If he would see to it that the primary ethic of the U.S.’s national government is to maximize the quality of life for all of its citizens.
Well, anger doesn’t help. It just clouds our judgment. Getting a clear idea of how things got to where they are improves our ability to predict where they might go next and that has good survival value. But becoming part of one hostile faction or the other doesn’t lead to clarity. It just leads to anger and blaming again.
Posted in Capitalism & Corporations, Conflict, Corruption, CrashBlogging, Financial melt-down, Human Rights, Pandemics, Politics - The Wrong Way, Social Breakdown, The Perfect Storm, Wealth Disparity | Comments Closed
Neoliberalism – the ideology at the root of all our problems
Tuesday, January 2nd, 2018Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?
Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises: the financial meltdown of 2007?8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of Donald Trump. But we respond to these crises as if they emerge in isolation, apparently unaware that they have all been either catalysed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name. What greater power can there be than to operate namelessly?
So pervasive has neoliberalism become that we seldom even recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological law, like Darwin’s theory of evolution. But the philosophy arose as a conscious attempt to reshape human life and shift the locus of power.
Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.
Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.
We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.
Never mind structural unemployment: if you don’t have a job it’s because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you’re feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it’s your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.
Among the results, as Paul Verhaeghe documents in his book What About Me? are epidemics of self-harm, eating disorders, depression, loneliness, performance anxiety and social phobia. Perhaps it’s unsurprising that Britain, in which neoliberal ideology has been most rigorously applied, is the loneliness capital of Europe. We are all neoliberals now.
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The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.
Posted in Capitalism & Corporations, Climate Change, Corporate takeover of Government, CrashBlogging, Culture - How not to do it, Financial melt-down, Human Rights, Social Breakdown, Wealth Disparity | No Comments »
About the Panama Papers
Wednesday, April 6th, 2016In a second article I am publishing today on Samadhisoft (see: NASA Claims: Dozens of advanced ancient civilizations collapsed before us), you can find the following quote:
The study came to the conclusion that there are two key social features that contributed to the collapse of every single advanced civilization from the past: “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.”
After reading this quote, consider that the gathering of massive amounts of wealth by the few, as illustrated by the leaks revealed in this article, is highly indicative of the probable demise of our own civilizations as analyzed and discussed in the other article.
Can you see why people want change – profound change – now? And why they are unwilling to endure more of the same, more of the status quo?
dennis
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Over a year ago, an anonymous source contacted the Süddeutsche Zeitung (SZ) and submitted encrypted internal documents from Mossack Fonseca, a Panamanian law firm that sells anonymous offshore companies around the world. These shell companies enable their owners to cover up their business dealings, no matter how shady.
In the months that followed, the number of documents continued to grow far beyond the original leak. Ultimately, SZ acquired about 2.6 terabytes of data, making the leak the biggest that journalists had ever worked with. The source wanted neither financial compensation nor anything else in return, apart from a few security measures.
The data provides rare insights into a world that can only exist in the shadows. It proves how a global industry led by major banks, legal firms, and asset management companies secretly manages the estates of the world’s rich and famous: from politicians, Fifa officials, fraudsters and drug smugglers, to celebrities and professional athletes.
A group effort
The Süddeutsche Zeitung decided to analyze the data in cooperation with the International Consortium of Investigative Journalists (ICIJ). ICIJ had already coordinated the research for past projects that SZ was also involved in, among them Offshore Leaks, Lux Leaks, and Swiss Leaks. Panama Papers is the biggest-ever international cooperation of its kind. In the past 12 months, around 400 journalists from more than 100 media organizations in over 80 countries have taken part in researching the documents. These have included teams from the Guardian and the BBC in England, Le Monde in France, and La Nación in Argentina. In Germany, SZ journalists have cooperated with their colleagues from two public broadcasters, NDR and WDR. Journalists from the Swiss Sonntagszeitung and the Austrian weekly Falter have also worked on the project, as have their colleagues at ORF, Austria’s national public broadcaster. The international team initially met in Washington, Munich, Lillehammer and London to map out the research approach.
Making of The data
The Panama Papers include approximately 11.5 million documents – more than the combined total of the Wikileaks Cablegate, Offshore Leaks, Lux Leaks, and Swiss Leaks. The data primarily comprises e-mails, pdf files, photo files, and excerpts of an internal Mossack Fonseca database. It covers a period spanning from the 1970s to the spring of 2016.
Moreover, the journalists crosschecked a large number of documents, including passport copies. About two years ago, a whistleblower had already sold internal Mossack Fonseca data to the German authorities, but the dataset was much older and smaller in scope: while it addressed a few hundred offshore companies, the Panama Papers provide data on some 214,000 companies. In the wake of the data purchase, last year investigators searched the homes and offices of about 100 people. The Commerzbank was also raided. As a consequence of their business dealings with Mossack Fonseca, Commerzbank, HSH Nordbank, and Hypovereinsbank agreed to pay fines of around 20 million euros, respectively. Since then, other countries have also acquired data from the initial smaller leak, among them the United States, the UK, and Iceland.
The system
The leaked data is structured as follows: Mossack Fonseca created a folder for each shell firm. Each folder contains e-mails, contracts, transcripts, and scanned documents. In some instances, there are several thousand pages of documentation. First, the data had to be systematically indexed to make searching through this sea of information possible. To this end, the Süddeutsche Zeitung used Nuix, the same program that international investigators work with. Süddeutsche Zeitung and ICIJ uploaded millions of documents onto high-performance computers. They applied optical character recognition (OCR) to transform data into machine-readable and easy to search files. The process turned images – such as scanned IDs and signed contracts – into searchable text. This was an important step: it enabled journalists to comb through as large a portion of the leak as possible using a simple search mask similar to Google.The journalists compiled lists of important politicians, international criminals, and well-known professional athletes, among others. The digital processing made it possible to then search the leak for the names on these lists. The “party donations scandal” list contained 130 names, and the UN sanctions list more than 600. In just a few minutes, the powerful search algorithm compared the lists with the 11.5 million documents.
The research
For each name found, a detailed research process was initiated that posed the following questions: what is this person’s role in the network of companies? Where does the money come from? Where is it going? Is this structure legal?Generally speaking, owning an offshore company is not illegal in itself. In fact, establishing an offshore company can be seen as a logical step for a broad range of business transactions. However, a look through the Panama Papers very quickly reveals that concealing the identities of the true company owners was the primary aim in the vast majority of cases. From the outset, the journalists had their work cut out for them. The providers of offshore companies – among them banks, lawyers, and investment advisors – often keep their clients’ names secret and use proxies. In turn, the proxies’ tracks then lead to heads of state, important officials, and millionaires. Over the course of the international project, journalists cooperated with one another to investigate thousands of leads: they examined evidence, studied contracts, and spoke with experts.
Among others, Mossack Fonsecas’ clients include criminals and members of various Mafia groups. The documents also expose bribery scandals and corrupt heads of state and government. The alleged offshore companies of twelve current and former heads of state make up one of the most spectacular parts of the leak, as do the links to other leaders, and to their families, closest advisors, and friends. The Panamanian law firm also counts almost 200 other politicians from around the globe among its clients, including a number of ministers.
The company
The company at the center of all these stories is Mossack Fonseca, a Panamanian provider of offshore companies with dozens of offices all over the world. It sells its shell firms in cities such as Zurich, London, and Hong Kong – in some instances at bargain prices. Clients can buy an anonymous company for as little as USD 1,000. However, at this price it is just an empty shell. For an extra fee, Mossack Fonseca provides a sham director and, if desired, conceals the company’s true shareholder. The result is an offshore company whose true purpose and ownership structure is indecipherable from the outside. Mossack Fonseca has founded, sold, and managed thousands of companies. The documents provide a detailed view of how Mossack Fonseca routinely accepts to engage in business activities that potentially violate sanctions, in addition to aiding and abetting tax evasion and money laundering.
About Süddeutsche Zeitung
Headquartered in Munich, Süddeutsche Zeitung (SZ) is one of Germany’s leading newspapers. SZ has a total readership of 4.4 million for its print and online media. Its investigative journalism team counts five people, three of which are members of the International Consortium of Investigative Journalists (ICIJ). The Süddeutsche Zeitunghas won a number of prestigious awards for its research work. Its team has cooperated with other media organizations on a number of projects, including Offshore Leaks, Swiss Leaks, and Lux Leaks, which ICIJ coordinated. At the beginning of 2015, an anonymous source began sending the Süddeutsche Zeitung data from Mossack Fonseca, a provider of offshore companies. This marked the beginning of the Panama Papers project.
The Süddeutsche Zeitung, in cooperation with the International Consortium for Investigative Journalists, sent Mossfon several written requests for comment. In response Mossfon sent two general statements, which can be viewed here.
To the original article: ➡
Posted in Capitalism & Corporations, Corporate takeover of Government, Corruption, CrashBlogging, Financial melt-down, Fundamentalism, Social Breakdown, Terrorism, The Perfect Storm, Wealth Disparity, Weather deterioration | No Comments »
The Revenge of the Lower Classes and the Rise of American Fascism
Monday, March 28th, 2016- Not sure I have a lot to say about this other than it makes me feel that where it says “Futurist” on my business card is not unjustified.
- dennis
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By Chris Hedges
College-educated elites, on behalf of corporations, carried out the savage neoliberal assault on the working poor. Now they are being made to pay. Their duplicity—embodied in politicians such as Bill and Hillary Clinton and Barack Obama—succeeded for decades. These elites, many from East Coast Ivy League schools, spoke the language of values—civility, inclusivity, a condemnation of overt racism and bigotry, a concern for the middle class—while thrusting a knife into the back of the underclass for their corporate masters. This game has ended.
There are tens of millions of Americans, especially lower-class whites, rightfully enraged at what has been done to them, their families and their communities. They have risen up to reject the neoliberal policies and political correctness imposed on them by college-educated elites from both political parties: Lower-class whites are embracing an American fascism.
These Americans want a kind of freedom—a freedom to hate. They want the freedom to use words like “nigger,” “kike,” “spic,” “chink,” “raghead” and “fag.” They want the freedom to idealize violence and the gun culture. They want the freedom to have enemies, to physically assault Muslims, undocumented workers, African-Americans, homosexuals and anyone who dares criticize their cryptofascism. They want the freedom to celebrate historical movements and figures that the college-educated elites condemn, including the Ku Klux Klan and the Confederacy. They want the freedom to ridicule and dismiss intellectuals, ideas, science and culture. They want the freedom to silence those who have been telling them how to behave. And they want the freedom to revel in hypermasculinity, racism, sexism and white patriarchy. These are the core sentiments of fascism. These sentiments are engendered by the collapse of the liberal state.
The Democrats are playing a very dangerous game by anointing Hillary Clinton as their presidential candidate. She epitomizes the double-dealing of the college-educated elites, those who speak the feel-your-pain language of ordinary men and women, who hold up the bible of political correctness, while selling out the poor and the working class to corporate power.
The Republicans, energized by America’s reality-star version of Il Duce, Donald Trump, have been pulling in voters, especially new voters, while the Democrats are well below the voter turnouts for 2008. In the voting Tuesday, 5.6 million votes were cast for the Democrats while 8.3 million went to the Republicans. Those numbers were virtually reversed in 2008—8.2 million for the Democrats and about 5 million for the Republicans.
Richard Rorty in his last book, “Achieving Our Country,” written in 1998, presciently saw where our postindustrial nation was headed.
Many writers on socioeconomic policy have warned that the old industrialized democracies are heading into a Weimar-like period, one in which populist movements are likely to overturn constitutional governments. Edward Luttwak, for example, has suggested that fascism may be the American future. The point of his book The Endangered American Dream is that members of labor unions, and unorganized unskilled workers, will sooner or later realize that their government is not even trying to prevent wages from sinking or to prevent jobs from being exported. Around the same time, they will realize that suburban white-collar workers—themselves desperately afraid of being downsized—are not going to let themselves be taxed to provide social benefits for anyone else.
At that point, something will crack. The nonsuburban electorate will decide that the system has failed and start looking around for a strongman to vote for—someone willing to assure them that, once he is elected, the smug bureaucrats, tricky lawyers, overpaid bond salesmen, and postmodernist professors will no longer be calling the shots. A scenario like that of Sinclair Lewis’ novel It Can’t Happen Here may then be played out. For once a strongman takes office, nobody can predict what will happen. In 1932, most of the predictions made about what would happen if Hindenburg named Hitler chancellor were wildly overoptimistic.
One thing that is very likely to happen is that the gains made in the past forty years by black and brown Americans, and by homosexuals, will be wiped out. Jocular contempt for women will come back into fashion. The words “nigger” and “kike” will once again be heard in the workplace. All the sadism which the academic Left has tried to make unacceptable to its students will come flooding back. All the resentment which badly educated Americans feel about having their manners dictated to them by college graduates will find an outlet.
Fascist movements build their base not from the politically active but the politically inactive, the “losers” who feel, often correctly, they have no voice or role to play in the political establishment. The sociologist Émile Durkheim warned that the disenfranchisement of a class of people from the structures of society produced a state of “anomie”—a “condition in which society provides little moral guidance to individuals.” Those trapped in this “anomie,” he wrote, are easy prey to propaganda and emotionally driven mass movements. Hannah Arendt, echoing Durkheim, noted that “the chief characteristic of the mass man is not brutality and backwardness, but his isolation and lack of normal social relationships.”
In fascism the politically disempowered and disengaged, ignored and reviled by the establishment, discover a voice and a sense of empowerment.
As Arendt noted, the fascist and communist movements in Europe in the 1930s “… recruited their members from this mass of apparently indifferent people whom all other parties had given up as too apathetic or too stupid for their attention. The result was that the majority of their membership consisted of people who had never before appeared on the political scene. This permitted the introduction of entirely new methods into political propaganda, and indifference to the arguments of political opponents; these movements not only placed themselves outside and against the party system as a whole, they found a membership that had never been reached, never been ‘spoiled’ by the party system. Therefore they did not need to refute opposing arguments and consistently preferred methods which ended in death rather than persuasion, which spelled terror rather than conviction. They presented disagreements as invariably originating in deep natural, social, or psychological sources beyond the control of the individual and therefore beyond the control of reason. This would have been a shortcoming only if they had sincerely entered into competition with either parties; it was not if they were sure of dealing with people who had reason to be equally hostile to all parties.”
Fascism is aided and advanced by the apathy of those who are tired of being conned and lied to by a bankrupt liberal establishment, whose only reason to vote for a politician or support a political party is to elect the least worst. This, for many voters, is the best Clinton can offer.
Fascism expresses itself in familiar and comforting national and religious symbols, which is why it comes in various varieties and forms. Italian fascism, which looked back to the glory of the Roman Empire, for example, never shared the Nazis’ love of Teutonic and Nordic myths. American fascism too will reach back to traditional patriotic symbols, narratives and beliefs.
Robert Paxton wrote in “The Anatomy of Fascism”:
The language and symbols of an authentic American fascism would, of course, have little to do with the original European models. They would have to be as familiar and reassuring to loyal Americans as the language and symbols of the original fascisms were familiar and reassuring to many Italians and Germans, as [George] Orwell suggested. Hitler and Mussolini, after all, had not tried to seem exotic to their fellow citizens. No swastikas in an American fascism, but Stars and Stripes (or Stars and Bars) and Christian crosses. No fascist salute, but mass recitations of the pledge of allegiance. These symbols contain no whiff of fascism in themselves, of course, but an American fascism would transform them into obligatory litmus tests for detecting the internal enemy.
Fascism is about an inspired and seemingly strong leader who promises moral renewal, new glory and revenge. It is about the replacement of rational debate with sensual experience. This is why the lies, half-truths and fabrications by Trump have no impact on his followers. Fascists transform politics, as philosopher and cultural critic Walter Benjamin pointed out, into aesthetics. And the ultimate aesthetic for the fascist, Benjamin said, is war.
Paxton singles out the amorphous ideology characteristic of all fascist movements.
Fascism rested not upon the truth of its doctrine but upon the leader’s mystical union with the historic destiny of his people, a notion related to romanticist ideas of national historic flowering and of individual artistic or spiritual genius, though fascism otherwise denied romanticism’s exaltation of unfettered personal creativity. The fascist leader wanted to bring his people into a higher realm of politics that they would experience sensually: the warmth of belonging to a race now fully aware of its identity, historic destiny, and power; the excitement of participating in a wave of shared feelings, and of sacrificing one’s petty concerns for the group’s good; and the thrill of domination.
There is only one way left to blunt the yearning for fascism coalescing around Trump. It is to build, as fast as possible, movements or parties that declare war on corporate power, engage in sustained acts of civil disobedience and seek to reintegrate the disenfranchised—the “losers”—back into the economy and political life of the country. This movement will never come out of the Democratic Party. If Clinton prevails in the general election Trump may disappear, but the fascist sentiments will expand. Another Trump, perhaps more vile, will be vomited up from the bowels of the decayed political system. We are fighting for our political life. Tremendous damage has been done by corporate power and the college-educated elites to our capitalist democracy. The longer the elites, who oversaw this disemboweling of the country on behalf of corporations—who believe, as does CBS Chief Executive Officer Leslie Moonves, that however bad Trump would be for America he would at least be good for corporate profit—remain in charge, the worse it is going to get.
- to the original: ➡
Posted in Capitalism & Corporations, Corporate takeover of Government, Corruption, CrashBlogging, Culture - How not to do it, Financial melt-down, Fundamentalism, Human Rights, Politics - The Wrong Way, Social Breakdown, The Perfect Storm, Wealth Disparity | No Comments »
Why are houses so expensive? (UK article)
Friday, September 18th, 2015- As time passes, my ideas about what and where our problems are shifting too.
- Currently, I’m focused on the idea that our representative democracies, which are primarily a balancing of self interests; one against each other, are, by their very nature, incapable of dealing with problems affecting our ‘commons’.
- The housing cost problems described in this Guardian article make this point particularly well.
- It is in the majority’s common interests that most of us should be able to find and afford reasonably priced housing. But a minority of us, well positioned to take advantage of the situation, have elevated their minority self interests over the majority and, in their greed, they are making a bad situation worse.
- This has happened because ‘we’ the people have never decided to implement governments which look out for our common interests as their top priority.
- And you can be sure that those who are looking after their self interests and wealth are never going to support this. They will, in fact, actively suppress the idea.
- dennis
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There’s a sizeable chance that many people born before me in the late 1980s – and far more who were born after me – will never own their home in the UK. The goal for most people is now to get on “the housing ladder”: buy a small house or flat, and gradually move to a nicer area and bigger home as your profits increase. This wasn’t always the case. Back in the early 1980s, around half the population of the country owned their own home, and half rented – 30% in social housing, from their local council, and 20% from private landlords.
Margaret Thatcher’s introduction of right to buy meant that those who bought their council home saw the value of their subsidised purchase rise rapidly, meaning housing was seen less as a permanent home, more as an investment. At the same time, councils stopped building homes partly due to economic constraints, and partly due to the ideological shift away from renting and towards home ownership.
But now we’re in a crisis. Homes cost an awful lot in many places in the UK, and wages haven’t kept pace with inflation, or risen as much as house prices, post-recession. The young, in particular, find their earning potential and borrowing allowances have been harder hit than most. Meanwhile, the vast majority of new private-sector jobs are in the capital, where house prices are exorbitant.
The average house price for the UK was £282,000 in July according to the Office for National Statistics, which, if you live in London, sounds like nothing – the average house price there nudged £525,000 this month. But the average UK earner, who takes home £24,648 gross, including bonuses, can only afford a house worth around £110,000, if you imagine them taking out a mortgage worth 4.5 times their salary. To find a job paying that much and a house that costs that little isn’t easy – saving for a deposit while paying market rents is even harder.
Part of the problem is scarcity. Britain simply isn’t building enough housing to meet the demand for homes. Part of that is due to a brick shortage that began before the recession, and a skills shortage: British workers predominantly don’t want to be builders, and the rhetoric against hiring in skilled workers from the EU and beyond also stymies attempts to build more.
But many people profit from rising house prices: landbanking is a huge problemthat exacerbates the housing crisis. In areas where homes are needed, it works in private companies’ interests to sit on land that could be developed, inflating its prices, and in turn inflating house prices.
Where housing expansion has happened is in private renting, the sector least likely to increase the home ownership rate in Britain. If you ask most people what is the biggest barrier to raising the capital necessary for a deposit, most will say that it’s high rents. It’s in landlords’ interests to keep people renting, rather than buying. An interest-only mortgage lets you cream off a considerable profit while buying more properties.
And once profits rise in houses, and people see property not as a home but as an investment opportunity, outside investors pour in. Concerns have been raised at the proportion of new-build properties in London being bought and treated as asset lockers in the capital – left empty, while appreciating in value at very little risk for the predominantly foreign buyers. Meanwhile, families flounder on the housing waiting lists, or are forced out to far-flung towns, away from their children’s schools or support networks.
Houses aren’t expensive simply because of supply and demand. As long as houses are expensive, people will work to keep them expensive – buy-to-let landlords with far more capital can buy up houses and rent them out at high costs, wealthy British and foreign investors can buy up land and new-build luxury property knowing that the likelihood of profit is a far better bet than with any other investment. Keeping families and individuals locked out of home ownership for a lifetime works as a financial racket, which is precisely what we’re dealing with.
There’s also the massive regional disparity – growing up, I remember working out exactly how much I’d need to earn to afford a mortgage on my own home. It seemed achievable, because I foolishly hadn’t assumed a global recession would cause stagnant wages while house prices continued rising unhindered. And to get a mortgage on a property where I grew up in Newport, at an average of £115,828I’d need to earn around £29,000 per year. I’ll admit to earning far more. But to buy the average home where I currently live near Clapham, I’d need to earn £182,809. I earn far less. Why do I stay, rather than returning home and snapping up a four-bed house? The same reason anyone does – friends, work opportunities, and an emotional investment in the local surroundings.
But across England and Wales, the average home costs 8.8 times the average salary. In Westminster, it’s 24 times the local salary, compared to 12 times a decade earlier. Everywhere in England and Wales, the house price/local salary ratio has risen since 2002. Part of the reason so many people want to buy is because renting conditions can be so poor, while rent is so high. Those hoarding properties can hike up house prices as people become increasingly desperate to get on “the ladder”.
Scarcity causes a number of responses: firstly panic – watch any queue outside a house in Walthamstow, or try to rent a room in London or Oxford, and realise how many people are scrabbling for any opportunity to solve their personal housing crisis. But it also encourages hoarding: the financially solvent notice an asset’s sharp increase in value and hoard that asset, inflating the price and their profits at the same time. One in five homes in the UK is now owned by a private landlord, yet landlords only account for 2% cent of the adult population.
But crises reach a head: at the moment, house prices are so expensive, many people will be unable to afford to buy at all, which impacts on birth rates, encourages people to move abroad, and affects the economy, both because people are spending more on rent and less on goods that boost the economy, and because housing is a precarious market to rely on to prop up GDP. It’s because the market has been allowed to grow unchecked, and landlords and investors allowed to distort and inflate the market, that houses are expensive. But to bring prices down, some homeowners have to lose out and end up in negative equity. It depends on who politicians value most – homeowners, or Generation Rent. Or, we can all sit tight and wait for the bubble to burst.
- To the original in the Guardian: ➡
Posted in Capitalism & Corporations, Corruption, CrashBlogging, Culture - How not to do it, Financial melt-down, Human Rights, Politics - The Wrong Way, Social Breakdown, The Perfect Storm, Wealth Disparity | No Comments »
How Trade Deals Boost the Top 1% and Bust the Rest
Saturday, February 21st, 2015by Robert Reich – Chancellor’s Professor of Public Policy, University of California at Berkeley
Suppose that by enacting a particular law we’d increase the U.S. Gross Domestic Product. But almost all that growth would go to the richest 1 percent.
The rest of us could buy some products cheaper than before. But those gains would be offset by losses of jobs and wages.
This is pretty much what “free trade” has brought us over the last two decades.
I used to believe in trade agreements. That was before the wages of most Americans stagnated and a relative few at the top captured just about all the economic gains.
Recent trade agreements have been wins for big corporations and Wall Street, along with their executives and major shareholders. They get better access to foreign markets and billions of consumers.
They also get better protection for their intellectual property — patents, trademarks, and copyrights. And for their overseas factories, equipment, and financial assets.
But those deals haven’t been wins for most Americans.
The fact is, trade agreements are no longer really about trade. Worldwide tariffs are already low. Big American corporations no longer make many products in the United States for export abroad.
The biggest things big American corporations sell overseas are ideas, designs, franchises, brands, engineering solutions, instructions, and software.
Google, Apple, Uber, Facebook, Walmart, McDonalds, Microsoft, and Pfizer, for example, are making huge profits all over the world.
But those profits don’t depend on American labor — apart from a tiny group of managers, designers, and researchers in the U.S.
To the extent big American-based corporations any longer make stuff for export, they make most of it abroad and then export it from there, for sale all over the world — including for sale back here in the United States.
The Apple iPhone is assembled in China from components made in Japan, Singapore and a half-dozen other locales. The only things coming from the U.S. are designs and instructions from a handful of engineers and managers in California.
Apple even stows most of its profits outside the U.S. so it doesn’t have to pay American taxes on them.
This is why big American companies are less interested than they once were in opening other countries to goods exported from the United States and made by American workers.
They’re more interested in making sure other countries don’t run off with their patented designs and trademarks. Or restrict where they can put and shift their profits.
In fact, today’s “trade agreements” should really be called “global corporate agreements” because they’re mostly about protecting the assets and profits of these global corporations rather than increasing American jobs and wages. The deals don’t even guard against currency manipulation by other nations.
According to Economic Policy Institute, the North American Free Trade Act cost U.S. workers almost 700,000 jobs, thereby pushing down American wages.
Since the passage of the Korea-U.S. Free Trade Agreement, America’s trade deficit with Korea has grown more than 80 percent, equivalent to a loss of more than 70,000 additional U.S. jobs.
Since China’s admission to the World Trade Organization, the U.S. goods trade deficit with China increased $23.9 billion (7.5 percent) to $342.6 billion. Again, the ultimate result has been to keep U.S. wages down.
The old-style trade agreements of the 1960s and 1970s increased worldwide demand for products made by American workers, and thereby helped push up American wages.
The new-style global corporate agreements mainly enhance corporate and financial profits, and push down wages.
That’s why big corporations and Wall Street are so enthusiastic about the upcoming Trans Pacific Partnership — the giant deal among countries responsible for 40 percent of the global economy.
That deal would give giant corporations even more patent protection overseas. It would also guard their overseas profits.
And it would allow them to challenge any nation’s health, safety and environmental laws that stand in the way of their profits — including our own.
The Administration calls the Trans Pacific Partnership a key part of its “strategy to make U.S. engagement in the Asia-Pacific region a top priority.”
Translated: The White House thinks it will help the U.S. contain China’s power and influence.
But it will make giant U.S. global corporations even more powerful and influential.
White House strategists seem to think such corporations are accountable to the U.S. government. Wrong. At most, they’re answerable to their shareholders, who demand high share prices whatever that requires.
I’ve seen first-hand how effective Wall Street and big corporations are at wielding influence — using lobbyists, campaign donations, and subtle promises of future jobs to get the global deals they want.
Global deals like the Trans Pacific Partnership will boost the profits of Wall Street and big corporations, and make the richest 1 percent even richer.
But they’ll bust the rest of America.
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High Risk Investment That Brought Down The U.S. Economy Returns, With A New Name
Tuesday, February 10th, 2015When a restaurant fails a health code inspection, sometimes the easiest thing to do is to close up shop, let people forget what happened, then slap a new sign on the door and reopen under a new name. That’s essentially what the world’s biggest banks are doing with a complex, high-risk investment product that helped destroy the global economy less than eight years ago.
Goodbye, “collateralized debt obligations.” Hello, “bespoke tranche opportunities.” Banks including Goldman Sachs are marketing that newfangled product, according to Bloomberg, and total sales of “bespoke tranche opportunities” leaped from under $5 billion in 2013 to $20 billion last year.
Like other derivatives, these “BTOs” allow investors to place wagers on the outcome of various loans, bonds, and securities in which they are not directly invested. Hedge funds and other sophisticated financial industry actors use derivatives both as a form of insurance to manage the total risk they are exposed to across their whole investment portfolio, and to gamble on real-world economic events such as mortgage payments, municipal bonds, and the price of physical commodities. The resulting web of complicated contracts can be very difficult to untangle, and can involve impossible-sounding amounts of money. The Financial Crisis Inquiry Commission concluded that derivatives “were at the center of the storm” and “amplified the losses from the collapse of the housing bubble by allowing multiple bets on the same securities.” In 2010, the total on-paper value of every derivative contract worldwide was $1.4 quadrillion, or 23 times the total economic output of the entire planet.
Collateralized debt obligations (CDOs) are a form of derivative that breaks one pool of financial assets — either direct loans or securities that are based on groups of loans — into multiple layers of riskiness. Those layers care called tranches, and investors who buy the least-risky tranche of the derivative will get paid before those who buy the second tranche, and so on. Banks selling traditional CDOs had to create these multiple risk tranches based on a given set of loans or securities, and then hope that someone would buy each of them.
The new “bespoke” version of the idea flips that business dynamic around. An investor tells a bank what specific mixture of derivatives bets it wants to make, and the bank builds a customized product with just one tranche that meets the investor’s needs. Like a bespoke suit, the products are tailored to fit precisely, and only one copy is ever produced. The new products are a symptom of the larger phenomenon of banks taking complex risks in pursuit of higher investment returns, Americans for Financial Reform’s Marcus Stanley said in an email, and BTOs “could be automatically exempt” from some Dodd-Frank rules.
This is not the first time that large banks have tried to reboot the CDO machine since the financial crisis made those products a much-reviled household name. In early 2013, JP Morgan Chase and Morgan Stanley tried and failed to find buyers for a new set of CDOs. The nature of that failure helps illuminate the rationale behind the new version of the product. Finding buyers for the various different layers of risk was “like trying to line up boxcars,” one investor told the Financial Times after the 2013 reboot effort fizzled. Many of the firms that used to buy such products prior to the crisis “no longer exist, and those that survive have very bad memories” of the experience, another analyst said.
Since then, those same old characters seem to have found a way to get back into the business. In addition to Goldman, which narrowly avoided criminal chargesafter a Senate investigation revealed its shady pre-crisis mortgage dealings, sellers of “bespoke tranche obligations” now include Citigroup and the french banking giant BNP Paribas. BNP’s recent notoriety doesn’t relate to the financial crisis, but rather to the bank’s violation of various U.S. sanctions against Iran, Cuba, and Sudan. And while Citigroup’s past leadership now says financial deregulation was a mistake and that megabanks like Citi should be broken up to protect the economy, its current leadership is chipping away at key Dodd-Frank reforms. Citi was also heavily involved in the “robosigning” scandal that lead to hundreds of thousands or even millions of unjust foreclosures.
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The Davos oligarchs are right to fear the world they’ve made
Tuesday, January 27th, 2015Escalating inequality is the work of a global elite that will resist every challenge to its vested interests
The billionaires and corporate oligarchs meeting in Davos this week are getting worried about inequality. It might be hard to stomach that the overlords of a system that has delivered the widest global economic gulf in human history should be handwringing about the consequences of their own actions.
But even the architects of the crisis-ridden international economic order are starting to see the dangers. It’s not just the maverick hedge-funder George Soros, who likes to describe himself as a class traitor. Paul Polman, Unilever chief executive, frets about the “capitalist threat to capitalism”. Christine Lagarde, the IMF managing director, fears capitalism might indeed carry Marx’s “seeds of its own destruction” and warns that something needs to be done.
The scale of the crisis has been laid out for them by the charity Oxfam. Just 80 individuals now have the same net wealth as 3.5 billion people – half the entire global population. Last year, the best-off 1% owned 48% of the world’s wealth, up from 44% five years ago. On current trends, the richest 1% will have pocketed more than the other 99% put together next year. The 0.1% have been doing even better, quadrupling their share of US income since the 1980s.
This is a wealth grab on a grotesque scale. For 30 years, under the rule of what Mark Carney, the Bank of England governor, calls “market fundamentalism”, inequality in income and wealth has ballooned, both between and within the large majority of countries. In Africa, the absolute number living on less than $2 a day has doubled since 1981 as the rollcall of billionaires has swelled.
In most of the world, labour’s share of national income has fallen continuously and wages have stagnated under this regime of privatisation, deregulation and low taxes on the rich. At the same time finance has sucked wealth from the public realm into the hands of a small minority, even as it has laid waste the rest of the economy. Now the evidence has piled up that not only is such appropriation of wealth a moral and social outrage, but it is fuelling social and climate conflict, wars, mass migration and political corruption, stunting health and life chances, increasing poverty, and widening gender and ethnic divides.
Escalating inequality has also been a crucial factor in the economic crisis of the past seven years, squeezing demand and fuelling the credit boom. We don’t just know that from the research of the French economist Thomas Piketty or the British authors of the social study The Spirit Level. After years of promoting Washington orthodoxy, even the western-dominated OECD and IMF argue that the widening income and wealth gap has been key to the slow growth of the past two neoliberal decades. The British economy would have been almost 10% larger if inequality hadn’t mushroomed. Now the richest are using austerity to help themselves to an even larger share of the cake.
The big exception to the tide of inequality in recent years has been Latin America. Progressive governments across the region turned their back on a disastrous economic model, took back resources from corporate control and slashed inequality. The numbers living on less than $2 a day have fallen from 108 million to 53 million in little over a decade. China, which also rejected much of the neoliberal catechism, has seen sharply rising inequality at home but also lifted more people out of poverty than the rest of the world combined, offsetting the growing global income gap.
These two cases underline that increasing inequality and poverty are very far from inevitable. They’re the result of political and economic decisions. The thinking person’s Davos oligarch realises that allowing things to carry on as they are is dangerous. So some want a more “inclusive capitalism” – including more progressive taxes – to save the system from itself.
But it certainly won’t come about as a result of Swiss mountain musings or anxious Guildhall lunches. Whatever the feelings of some corporate barons, vested corporate and elite interests – including the organisations they run and the political structures they have colonised – have shown they will fight even modest reforms tooth and nail. To get the idea, you only have to listen to the squeals of protest, including from some in his own party, at Ed Miliband’s plans to tax homes worth over £2m to fund the health service, or the demand from the one-time reformist Fabian Society that the Labour leader be more pro-business (for which read pro-corporate), or the wall of congressional resistance to Barack Obama’s mild redistributive taxation proposals.
Perhaps a section of the worried elite might be prepared to pay a bit more tax. What they won’t accept is any change in the balance of social power – which is why, in one country after another, they resist any attempt to strengthen trade unions, even though weaker unions have been a crucial factor in the rise of inequality in the industrialised world.
It’s only through a challenge to the entrenched interests that have dined off a dysfunctional economic order that the tide of inequality will be reversed. The anti-austerity Syriza party, favourite to win the Greek elections this weekend, is attempting to do just that – as the Latin American left has succeeded in doing over the past decade and a half. Even to get to that point demands stronger social and political movements to break down or bypass the blockage in a colonised political mainstream. Crocodile tears about inequality are a symptom of a fearful elite. But change will only come from unrelenting social pressure and political challenge.
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As inequality soars, the nervous super rich are already planning their escapes
Monday, January 26th, 2015Hedge fund managers are preparing getaways by buying airstrips and farms in remote areas, former hedge fund partner tells Davos during session on inequality
With growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people’s mind, the world’s super rich are already preparing for the consequences. At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said.
Johnson, who heads the Institute of New Economic Thinking and was previously managing director at Soros, said societies can tolerate income inequality if the income floor is high enough. But with an existing system encouraging chief executives to take decisions solely on their profitability, even in the richest countries inequality is increasing.
Johnson added: “People need to know there are possibilities for their children – that they will have the same opportunity as anyone else. There is a wicked feedback loop. Politicians who get more money tend to use it to get more even money.”
Global warming and social media are among the trends the 600 super-smart World Economic Forum staffers told its members to watch out for long before they became ubiquitous. This year, income inequality is fast moving up the Davos agenda – a sure sign of it is poised to burst into the public consciousness.
Jim Wallis, founder of Sojourners and a Davos star attraction after giving the closing address in 2014, said he had spent a lot of time learning from the leaders behind recent social unrest in Ferguson. He believes that will prove “a catalytic event” which has already changed the conversation in the US, bringing a message from those who previously “didn’t matter”.
So what is the solution to having the new voices being sufficiently recognised to actually change the status quo into one where those with power realise they do matter?
Clarke said: “Solutions are there. What’s been lacking is political will. Politicians do not respond to those who don’t have a voice In the end this is all about redistributing income and power.”
She added: “Seventy five percent of people in developing countries live in places that are less equal than they were in 1990.”
The panellists were scathing about politicians, Wallis describing them as people who held up wet fingers “to see which way the money is blowing in from.”
Author, philosopher and former academic Rebecca Newberger-Goldstein saw the glass half full, drawing on history to prove society does eventually change for the better. She said Martin Luther King was correct in his view that the arch of history might be long, but it bends towards justice.
In ancient Greece, she noted, even the greatest moralists like Plato and Aristotle never criticised slavery. Newberger-Goldstein said: “We’ve come a long way as a species. The truth is now dawning that everybody matters because the concept of mattering is at the core of every human being.” Knowing you matter, she added, is often as simple as having others “acknowledge the pathos and reality of your stories. To listen.”
Mexican micro-lending entrepreneur Carlos Danel expanded on the theme. His business, Gentera, has thrived by working out that “those excluded are not the problem but realising there’s an opportunity to serve them.”
He added: “Technology provides advantages that can lower costs and enable us to provide products and services that matter to the people who don’t seem to matter to society. And that’s beyond financial services – into education and elsewhere.”
Which, Danel believes, is why business was created in the first place – to serve. A message that seemed to get lost somewhere in the worship of profit.
– To the original: ➡
– Research thanks to Kierin M.
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