Thursday, December 23, 2010
The article says: "But this argument seems especially inopportune now, since whatever happened in the past, there is broad agreement about what should happen in the future: The old "government-sponsored enterprise" model is a proven failure. Fannie and Freddie should be gradually dismantled and replaced with a new system of mortgage finance that does not permit ostensibly private companies to profit from an implicit federal government guarantee. To be sure, there is no consensus between, or within, the two parties as to how much - or how little - government involvement to retain, and how precisely to structure a federal role. But all serious proposals emphasize a greater role for private capital than it currently has."
A brief history lesson will be of help here, and it will NOT make the anyone happy who thinks that a. the free market would have corrected this or b. that the mission of Fannie Mae and Freddie Mac was inherently flawed. Both agencies were directly controlled by the government until the mid-1970's. Then, the process of their privatization began. They were sold off to help pay for the debt accumulated during the Vietnam War. Had they been left alone, we probably wouldn't have this situation now. Since privatization is primarily a Republican "solution" I am more inclined to fix blame on that side. It is clear that both parties were whooping it up during the bubble and were too afraid to look at the dark underbelly. Because I am a former mortgage loan officer, I soon realized that the mortgage companies had abandoned tried and true underwriting principles. I could see it coming, and I am a nobody. Why couldn't all this high-priced help stop it?
Wednesday, December 22, 2010
December 22, 2010
Recently, I have been amusing myself by posting to the Wall Street Journal online community regarding select Questions of the Day. Today, the WSJ asked us how we graded the Lame Duck congressional session. I gave it a "D" for bad political theater. The only decent work of the session was passing the START treaty and repealing "Don't Ask, Don't Tell." What an embarrassing policy!
In response to: He continues to lead the country from the far left and will push just as hard as he can in this direction as long as he is in office. The notion that President Obama is more centrist than Nancy Pelosi and Harry Reid is ludicrous - though a useful fiction for him. They are all cut from the same socialist cloth.
I replied: I find myself boggled by people who still think that the lowest taxes support the best society. Taxes are the price we pay for civilization. (I gave the lame ducks a D.) The goods that you have, the education you received, the roadtrips you take, the fire department nearby, and so on, were at least partially subsidized by the taxes that your parents and grandparents paid. Furthermore, most of the stories told about how lowering taxes will help the US aren't quite what actually happens. Please take a look at this article for examples.
The 9 Biggest Conservative Lies About Taxes and Public Spending
And in answer to the same man who asserted that Obama was a socialist, I talked about the TWO political axes: right-left, and authoritarian-libertarian. You can take the fun quiz too!
I am far left. I know so because I took a test at http://www.politicalcompass.org. I score at -10, -9.875. I am a libertarian socialist. People get confused about political orientation because we think that there are only two directions to go; left, or right. That constitutes one political axis. There is another, though. It is the authoritarian/libertarian axis. Obama is no more of a socialist than say, Evan Bayh or Bill Clinton. His political acts place him in within the right/authoritarian corner of the political compass. So, it makes no sense to call Obama a socialist or a Marxist when he clearly isn't either one. Here's another example: people can be left/authoritarian like Mao Ze Dong or Joseph Stalin. Or they can be right/authoritarian like Hitler, Mussolini, Hosni Mubarak, Benjamin Netanyahu, Hugo Chavez, etc. Ron Paul is the most prominent example of a right/libertarian. Take the fun quiz and see for yourself where you stand, alongside major historical figures.
In response to this post:
One of the biggest conservative lies is that money simply grows on trees. Taxes can be lowered to zero and the economy will benefit. Borrow from the Chinese to pay for huge deficit spending and pay off the bonds by printing money (quantitative easing). The result will soon be hyperinflation.
Conservatives don't seem to care. But some people do, like many Tea Party activists, who seem to realize what a downward spiral our country's in.
I replied: The Tea Party knows that something's wrong, but they don't know what it is. They have been captured by bumper-sticker politics. If the answers are simple, then we are not talking about the problems of human beings. Sad to say, the Tea Party movement simply plays into the hands of the political agenda of transnational corporations. The political agenda of transnational corporations is to corrupt governments for the sake of profit, as their charters provide. I wish that the Tea Partiers would interrogate their basic assumptions. We need GOOD government, not what we have now. It's impossible to manage a nation of 300 million people without decent people managing the day-to-day business of keeping America together. You don't get that result by ranting about bureaucrats or term limits. You get that result by educating folks on what it really takes to run a pluralistic democracy.
Thursday, December 16, 2010
By Joe Bageant
Sitting in a trendy wine bar, one of those that brings out food to match your particular choice of wine, mystified by the table setting. What was that tiny baby spoon for? Cappuccino surely, at some point, but why no big spoon to go with the knife and fork? The things a redneck American does not know grow exponentially in Bella Italia, starting with the restaurants -- not to mention several civilizations beneath one’s feet. Being in a house that has been continuously occupied for over 1000 years -- resisting the temptation to piss in the hotel room bidet, that sort of thing.
One thing the Italians can never be accused of is being a culture given to vinyl sided sameness, fast food franchises. Another thing is lack of a good educational system, given that Italy’s is among the very best in the world. So here I am sitting with some college kids trying to hang onto my end of a discussion of evolutionary consciousness, and whether Italy can withstand the cultural leveling of globalism.
“And Mr Bageent, what do you think of Pierre Teilhard de Chardin’s concept of the hive mind and the noosphere? Can monolithism and totalitarianism possibly be resisted in the cybernetic age?”
“Il regno mondiale dei computer, global computerization. Do all those disassociated shards of human input constitute an overarching hive intelligence? Or are they the emergence of further evolutionary structures?”
“Ahem, uh, well, Timothy Leary once convinced me that they are,” I said. “But after the drugs wore off, I was not so certain. And now I’m certain again that he was right. But, with a far more chilling outcome than he or Chardin could have ever predicted.”
Which was pretty good for pulling it out of my ass.
In any case, it seems that 40 years in retrospect, the human hive enjoys monolithism and totalism far more than anyone would have ever guessed back in the sixties. Most of industrial humanity, as it turns out, is, or would be, quite happy to come home from a hard day in the mines and settle down to Facebook or Twitter or hive broadcast “news” and passive entertainments, distributed by unseen “corporate entities.” I dunno, I think I liked dope and live music and sex better. But as all three diminish in my life with age, I’ve learned to settle for the Larry King Show and/or a lot less at times.
Big Al and the Tuscaloosa sprinkler man
On the other hand, this whole business of the new hive cybernetic connectivity, could be just a swarm of data bits with no particular significance, in and of themselves, other than the magical thinking belief that they do. Which ain’t no small thing, given that what we agree upon as reality is achieved by social consensus. Hell, to some people Beelzebub still stalks the earth. To others, America is a free republic, not a company town. We all have our hallucinations.
One thing for sure. Most people in the (over)developed world think the connectivity and speed of the algorithms behind the cyberhive are worth it. Even teachers teach to a standardized test so students will conform to an algorithm, and if that ain’t hive mind, I don’t know what is.
Besides, if the worship of algorithms is not worth it, it does not matter. Whether we be Tanzanians à la Darwin’s Nightmare, or some Stanford professor writing economic algorithms, the people who control all our lives in the globalized economic world believe they are.
For example, bankers and investment houses believe intelligent algorithms (Big Al) can calculate human risk in making loans. That an algorithm can predict whether a 35-year old lawn sprinkler installer in Tuscaloosa will be able to steadily make $2,300 monthly payments on his $220,000 twice refinanced “snout-house” (so-named because of the four-car garage sticking out the front) for 30 years. Most of us would be more than happy to make that prediction for them, and with far greater accuracy, for a fraction of what they paid the pinhead to write the algorithm.
In the pre-digital hive era there were limits to what the organic human brain, and therefore the mind, plus past experience, could calculate, then evaluate. At some point, one was forced to recognized the limits of a financial proposition or investment. Famliarity with the actual basis of an investment was necessary. (Hmmm. Lawn sprinklers, huh? And yer paying on a new Dodge Ram too?”) But there was no stopping such things as computer-assisted hedge funds, and the techno nerds’ faith that you could remove the human risks through complex algorithmic structures. So mythical financial instruments such as derivatives and layers of bets on derivatives, and bets on those bets, bloomed out there in the “virtual economy,” sending out algorithmic spores that spawned even stranger financial flora. The whole of it could not be understood by any single human participant. Even the individual parts were understood only by their specific designers. As in, “Just trust me on this Marv. This instrument even creates its own collateral” (which many of them did). Information, of course, is not reality, not even close to the juicy anecdotal stuff of which our daily lives are made. In essence, investment is reduced to an algorithmic Google search for debt, which is wealth to a banker, then mathematically rationalizing that debt as wealth for the rest of us.
Life is lived anecdotally, not algorithmically. And anecdotal evidence is not allowed in the new digital corpocracy. As one poster on Democratic Underground put it, “Anecdotal now has this enforced meaning such that no one is supposed to believe what they experience, what they see, hear, taste, smell, etc. The Powers That Be have basically extinguished the notion of inductive reasoning. Everything has to be replicated in a laboratory and since 90% of all the labs in this nation are operated by Corporate Sponsored monies, not much truth comes out of them.”
The trouble with the algorithmic age is that life is not a finite sequence of steps that define and contain the algorithmic concepts used. Even when created with the best of intentions -- and we can all agree by now there were few good intentions at Goldman Sachs when they were creating and bundling these mutant investments -- they cannot account for our uninsured sprinkler installer getting cancer, or divorcing the other half of the household income -- or the end of America’s residential construction orgy.
The digital folly is never ending. The knock-on effect just keeps rolling. The latest is the rising scandal of millions of illegal foreclosures created by MERS (Mortgage Electronic Registration Systems), which enabled the big financial firms to securitize and swap mortgages at super high speed. But not to worry. Nancy Pelosi and Christopher Dodd are on the case, and there is sure to be a Congressional committee appointed. Whoopee! Have one on me.
Meanwhile, we have our social networking software to better weave us into the hive. Social networking software, now there’s a term that should scare the piss out of anyone with an IQ over 40. It means the database as hive reality. Facebook, online banking, shopping, porn, years of one’s life playing electronic games or whatever, online dating and reducing romance and companionship to fit the software. Or 4,000 Facebook “friends,” data on 4000 Americans voluntarily collected for Facebook corporation. The concept of “friends” is cheapened, rendered meaningless as it passes through a database. In fact, all human experience is cheapened by that process. Information is not reality.
As my second wife, who was a mathematician, can tell you, I know as much about algebra as a flatworm. So I turn to experts when I write this stuff -- or sometimes just make it up as I go. But even a dumb person can ask questions. And one of my questions as I sit here background Googling the subject is this: Does a search engine really know what I want, or am I dumbing down to fit its hive algorithms? If the latter is the case, then why don’t we just bring back PCP?
Anyway, allegedly, the hive does many things better than paid experts. Wikipedia is an example of this assertion. Most web content is generated by hive inhabitants for free, profiting the new elite cybernetic ownership class, which is to say some corporation or other. This also means that content becomes worthless. That the efforts of skilled and devoted journalists, artists and others become valueless, unsellable, just more info-shards in the hive. Only advertising has value in the cyberhive. In a nation whose social realism has been represented by advertising for three quarters of a century, that was to be expected.
Of course the real global economic problem is seven billion people in increasing competition for ever scarcer vital resources. But capitalism loves competition, as long as, A: it is the people’s capital involved, and B: it is not the capitalists doing the competing. Either way we’re talking money here and what most people consider to be “economics.” Economics equals money. Right?
But the actual world revolves around meeting our genuine needs, which may or may not involve money. In the big picture, money is just one small, much abused abstract tool. Money has been abused from the beginning, probably about fifteen minutes after the first shekel was minted, but now the abuse has reached such levels that the entire notion of money is collapsing in on itself. Our concept of money needs to be reevaluated and probably abandoned in the distant future.
The bottliberia waiter comes with something on a plate I can actually -- by pure luck -- identify. Octopus gnocchi. The conversation rolls on.
“What do you believe allowed such abuse and calamity?” I ask.
An intense young woman leans across the table, all black hair and red lips, making an old man moan and sigh inwardly.
“Fossil fuels, of course,” she says. “An unnatural supply of energy. But once that is gone, we're going to have to go back to a whole different way of doing everything. Everything.”
“Spot on,” I agree. At that moment she could have gotten me to agree that the earth is flat.
But the truth is that each gallon of fossil fuel contains the energy of 40 man-hours. And that has played hell with the ecology of human work, thanks mostly to the money economy. For instance, a simple loaf of bread, starting with the fossil fuels used to grow the wheat, transport, mill, bake, create the packaging materials and packaging, advertise and distribute it, uses the energy of two men working for two weeks. Yet this waste and vast inefficiency is invisible to us because we see it only in terms of money, jobs and commerce. Cheap oil allowed industrial humans to increasingly live on environmental credit for over a century. Now the bill is due and no amount of money can pay it. The calorie, pure heat expenditure as energy, is the only currency in which Mother Nature trades. Period.
Despite that America produced such thinkers on the subject of living simply as Thoreau, modern hydrocarbon based civilization has driven expectations of material goods and convenience, and the transactions surrounding those expectations, through the stratosphere. Money has abstracted the notion of work to the point where, I dare say, there are not 100,000 people in America who truly understand that, although there are at least a few million trying to understand and liberate themselves.
I’m gonna take a wild shot here and say that understanding and liberation, come through self-discipline and self-denial, and that it’s nearly impossible for Americans to practice self-discipline. They cannot imagine why self-discipline, and a more ascetic life, becoming less dependent on the faceless machinery of algorithm driven virtual money, is necessarily liberating.
If there can be a solution at this late stage, and most thinking people seriously doubt there can be a “solution” in the way we have always thought of solutions, it begins with powering down everything we consider to be the economy and our survival. That and population reduction, which nobody wants to discuss in actionable terms. Worse yet, there is no state sanctioned, organized entry level for people who want to power down from the horrific machinery of money. There are too many financial, military and corporate and governmental forces that don’t want to see us power down (because it would spell their death), but rather power up even more. That’s called “a recovery.”
When viewed from outside the virtual money economy, and from the standpoint of the planet’s caloric economy, probably half of American and European jobs are not only unnecessary, but also terribly destructive, either directly or indirectly. Yet what nation or economic state acknowledges the need for a transition away from jobs that aren't necessary. None, because such an economy could not support the war machines or the transactional financial industries that dominate our needs hierarchy for the benefit of the few. Loaning us money we have already earned, stuffing us with corn syrup. And I won’t even go into the strong possibility that everybody does not need to be employed at all times for the world to keep on turning.
Like the Reagan Years on speed
One of the Italian students, Mariarosa, asks, “Is it true that so many Amerians are struggling and suffering right now?”
“No,” I reply, “not in the real sense. If they are suffering, most of them are suffering from commodities withdrawal. What they really are is people oppressed by metastasized capitalism. Which is its own form of suffering, I guess. They are squeezed hard for profit every moment of their waking lives. They’ve got families and dare not make a move, even of they knew how.”
Everyone nods in agreement.
“It’s coming to Italy too,” says one young man. Again, all nod in agreement.
Yet, despite Berlusconi, despite the rigthtist takeover in progress in Italy -- which I am guessing will be successful, because I’ve seen it all before in America through globalization -- so many are still able to ask the right questions. They seem able to filter what they need and what is best for the majority, from what they want. But looking at the overall country is like watching the Reagan era unfold again before your very eyes. Only faster. All of these kids probably own an iPod or cell phone, the only difference being that they do not let them interrupt a good meal.
The third bottle of wine arrives and the topic turns to global competition, and the EU charges that “Italy is not competitive enough.” A student named Cristiano, sits directly across form me, sporting one of those fashionable three-day beards (I tried that once -- people just asked me: “How long have you been depressed, Joe?) Cristiano offers that cooperation would get us all a lot farther than competition.” Applause from everybody on that one. I raise my glass in salute. I’ve raised a few too many glasses in salute in my life, but what the hell.
Societies such as Italy, Greece and many others are viewed by global capitalism as inferior economies. Especially agrarian societies: different rates of exchange and economies of scale, are set for them because capitalism benefits from the bonuses of synergies in scale and the virtual economy. Never do global capitalists want to see regional food security, energy security, or any other kind of security for that matter.
And I look at the faces of these young men and women, who are among the brightest, best educated and common good oriented the world has to offer. A taxi’s headlights flash through the window of the darkened bottiliberia. Each face is illuminated for a moment, then golden dimness again prevails. And I am saddened.
I do not expect that the world they have inherited will show them one ounce of mercy. But it is heartening to see clear competent minds drawing the right conclusions.
And I ask myself, what chance does America’s far less informed, and purposefully misled public stand against all this?
Tuesday, December 7, 2010
His facile conclusions never fail to disappoint. This December 7, 2010 column in the New York Times is no exception.
Social Science Palooza
Ask any Republican or other member of the right wing what he thinks about the social sciences. You will receive either a blank stare, or a sneer. So, when David Brooks wrote an article about the social sciences, I wondered why.
The first thing I learned is that he finds such studies "bizarrely interesting." Which indicates to me, a social scientist, that he finds it difficult to grasp the scientific methods used to conduct these studies. Results based on the Scientific Method are not bizarre.
When I review social science studies, I always verify the underlying data before I apply it to new information. It doesn't take long. Really. It's a non-starter when the person writing the article quotes himself or the organization who paid him to write the article as far as maintaining objectivity.
This observation will explain what I mean. "For an article in The Review of Economics and Statistics, Mark Duggan, Randi Hjalmarsson and Brian Jacob investigated whether gun shows increase crime rates. They identified 3,400 gun shows in Texas and California and looked at crime rates for the areas around the shows for the following month. They found no relationship between gun shows and crime in either state."
Hypothesis: Gun shows increase crime rates.
Underlying science: Economics and Statistics
The problem: 1. Statisticians always allow for a margin of error in their analysis. 2. Therefore, the statement that "no relationship between gun shows and crime" could not be based in fact. 3. Because there HAS to be a variation in the data, just because we are human beings and inconstant. Therefore, Brooks should have stated the margin of error. 4. And, crimes that occur around gun shows are not always violent, and can involve fraud or misrepresentation.
For example, one of my friends bought a gun at a gun show, to be delivered later. He paid his money, but the gun never came. It took research and a trip to the town where the gun dealer lived to involve the police for my friend to get his gun months later. That counts, eh?
So, when one of these rational-sounding people cannot come up with a rational explanation for normal phenomena, one must assume that they are just a few bricks shy of a load. Or perhaps just Social Science Palookas.
Monday, December 6, 2010
You didn’t get mad when Cheney allowed energy company officials to dictate energy policy and push us to invade Iraq.
You didn’t get mad when a covert CIA operative got ousted.
You didn’t get mad when the Patriot Act got passed.
You didn’t get mad when we illegally invaded a country that posed no threat to us.
You didn’t get mad when we spent over 800 billion (and counting) on said illegal war.
You didn’t get mad when Bush borrowed more money from foreign sources than the previous 42 Presidents combined.
You didn’t get mad when over 10 billion dollars in cash just disappeared in Iraq.
You didn’t get mad when you found out we were torturing people.
You didn’t get mad when Bush embraced trade and outsourcing policies that shipped 6 million American jobs out of the country.
You didn’t get mad when the government was illegally wiretapping Americans.
You didn’t get mad when Bush didn’t catch Bin Laden.
You didn’t get mad when Bush rang up 10 trillion dollars in combined budget and current account deficits.
You didn’t get mad when you saw the horrible conditions at Walter Reed Hospital.
You didn’t get mad when we let a major U.S. city - New Orleans - drown.
You didn’t get mad when we gave people who had more money than they could spend, the filthy rich, over a trillion dollars in tax breaks.
You didn’t get mad with the worst 8 years of job creations in several decades.
You didn’t get mad when over 200,000 US citizens lost their lives because they had no health insurance.
You didn’t get mad when lack of oversight and regulations from the Bush Administration caused US Citizens to lose 12 trillion dollars in investments, retirement, and home values.
No…..You finally got mad
When a black man was elected President and decided that people in America deserved the right to see a doctor if they are sick.
Yes, illegal wars, lies, corruption, torture, job losses by the millions, stealing your tax dollars to make the rich richer, and the worst economic disaster since 1929 are all okay with you, but helping fellow Americans who are sick … Oh, Hell No!!
Sunday, December 5, 2010
(Historical Note: Pressure on state governments began in the 1970s as a part of the right-wing plan to weaken the political clout of cities by shifting costs of government from the Federal budget to the State budget. The Right, in pursuing its goals, does not care that our cities, the crucibles of innovation, are struggling, dying, or dead. ~Deb)
The State of Illinois is still paying off billions in bills that it got from schools and social service providers last year. Arizona recently stopped paying for certain organ transplants for people in its Medicaid program. States are releasing prisoners early, more to cut expenses than to reward good behavior. And in Newark, the city laid off 13 percent of its police officers last week.
Marco Garcia for The New York Times
Yuki Scott, right, watched her daughter and other children one Friday last May in Hawaii, because the school year was shortened by 17 days.
While next year could be even worse, there are bigger, longer-term risks, financial analysts say. Their fear is that even when the economy recovers, the shortfalls will not disappear, because many state and local governments have so much debt — several trillion dollars’ worth, with much of it off the books and largely hidden from view — that it could overwhelm them in the next few years.
“It seems to me that crying wolf is probably a good thing to do at this point,” said Felix Rohatyn, the financier who helped save New York City from bankruptcy in the 1970s.
Some of the same people who warned of the looming subprime crisis two years ago are ringing alarm bells again. Their message: Not just small towns or dying Rust Belt cities, but also large states like Illinois and California are increasingly at risk.
Municipal bankruptcies or defaults have been extremely rare — no state has defaulted since the Great Depression, and only a handful of cities have declared bankruptcy or are considering doing so.
But the finances of some state and local governments are so distressed that some analysts say they are reminded of the run-up to the subprime mortgage meltdown or of the debt crisis hitting nations in Europe.
Analysts fear that at some point — no one knows when — investors could balk at lending to the weakest states, setting off a crisis that could spread to the stronger ones, much as the turmoil in Europe has spread from country to country.
Mr. Rohatyn warned that while municipal bankruptcies were rare, they appeared increasingly possible. And the imbalances are so large in some places that the federal government will probably have to step in at some point, he said, even if that seems unlikely in the current political climate.
“I don’t like to play the scared rabbit, but I just don’t see where the end of this is,” he added.
Resorting to Fiscal Tricks
As the downturn has ground on, some of the worst-hit cities and states have resorted to fiscal sleight of hand to stay afloat, helping them close yawning budget gaps each year, but often at great future cost.
Few workers with neglected 401(k) retirement accounts would risk taking out second mortgages to invest in stocks, gambling that the investment gains would be enough to build bigger nest eggs and repay the loans.
But that is just what Illinois, which has been failing to make the required annual payments to its pension funds for years, is doing. It borrowed $10 billion in 2003 and used the money to invest in its pension funds. The recession sent their investment returns below their target, but the state must repay the bonds, with interest. The solution? Illinois sold an additional $3.5 billion worth of pension bonds this year and is planning to borrow $3.7 billion more for its pension funds.
It is the long-term problems of a handful of states, including California, Illinois, New Jersey and New York, that financial analysts worry about most, fearing that their problems might precipitate a crisis that could hurt other states by driving up their borrowing costs.
But it is the short-term budget woes that nearly all states are facing that are preoccupying elected officials.
Illinois is not the only state behind on its bills. Many states, including New York, have delayed payments to vendors and local governments because they had too little cash on hand to make them. California paid vendors with i.o.u.’s last year. A handful of other states, worried about their cash flow, delayed paying tax refunds last spring.
Now, just as the downturn has driven up demand for state assistance, many states are cutting back.
The demand for food stamps has been rising significantly in Idaho, but tight budgets led the state to close nearly a third of the field offices of the state’s Department of Health and Welfare, which take applications for them. As states have cut aid to cities, many have resorted to previously unthinkable cuts, laying off police officers and closing firehouses.
Those cuts in aid to cities and counties, which are expected to continue, are one reason some analysts say cities are at greater risk of bankruptcy or are being placed under outside oversight.
Next year is unlikely to bring better news. States and cities typically face their biggest deficits after recessions officially end, as rainy-day funds are depleted and easy measures are exhausted.
This time is expected to be no different. The federal stimulus money increased the federal share of state budgets to over a third last year, from just over a quarter in 2008, according to a report issued last week by the National Governors Association and the National Association of State Budget Officers. That money is set to run out next summer. Tax collections, meanwhile, are not expected to return to their pre-recession levels for another year or two, given that the housing market and broader economy remain weak and that unemployment remains high.
Scott D. Pattison, the budget association’s director, said that for states, next year could be “the worst year of this four- or five-year downturn period.”
And few expect the federal government to offer more direct aid to states, at least in the short term. Many members of the new Republican majority in the House campaigned against the stimulus, and Washington is debating the recommendations of a debt-reduction commission.
So some states are essentially borrowing to pay their operating costs, adding new debts that are not always clearly disclosed.
Arizona, hobbled by the bursting housing bubble, turned to a real estate deal for relief, essentially selling off several state buildings — including the tower where the governor has her office — for a $735 million upfront payment. But leasing back the buildings over the next 20 years will ultimately cost taxpayers an extra $400 million in interest.
Many governments are delaying payments to their pension funds, which will eventually need to be made, along with the high interest — usually around 8 percent — that the funds are expected to earn each year.
New York balanced its budget this year by shortchanging its pension fund. And in New Jersey, Gov. Chris Christie deferred paying the $3.1 billion that was due to the pension funds this year.
It is these growing hidden debts that make many analysts nervous. States and municipalities currently have around $2.8 trillion worth of outstanding bonds, but that number is dwarfed by the debts that many are carrying off their books.
State and local pensions — another form of promised debt, guaranteed in some states by their constitutions — face hidden shortfalls of as much as $3.5 trillion by some calculations. And the health benefits that state and large local governments have promised their retirees going forward could cost more than $530 billion, according to the Government Accountability Office.
“Most financial crises happen in unpredictable ways, and they hit you when you’re not looking,” said Jerome H. Powell, a visiting scholar at the Bipartisan Policy Center who was an under secretary of the Treasury for finance during the bailout of the savings and loan industry in the early 1990s. “This one isn’t like that. You can see it coming. It would be sinful not to do something about this while there’s a chance.”
So far, investors have bought states’ bonds eagerly, on the widespread understanding that states and cities almost never default. But in recent weeks the demand has diminished sharply. Last month, mutual funds that invest in municipal bonds reported a big sell-off — a bigger one-week sell-off, in fact, than they had when the financial markets melted down in 2008. And hedge funds are already seeking out ways to place bets against the debts of some states, with the help of their investment banks.
Of course, not all states are in as dire straits as Illinois or California. And the credit-rating agencies say that the risk of default is small. States and cities typically make a priority of repaying their bond holders, even before paying for essential services. Standard & Poor’s issued a report this month saying that the crises that states and municipalities were facing were “more about tough decisions than potential defaults.”
Change in Ratings
The credit ratings of a number of local governments have improved this year, not because their finances have strengthened somewhat, but because the ratings agencies have changed the way they analyze governments.
The new higher ratings, which lower the cost of borrowing, emphasize the fact that municipal defaults have been much rarer than corporate defaults.
This October, Moody’s issued a report explaining why it now rates all 50 states, even Illinois, as better credit risks than a vast majority of American non-financial companies.
One reason: the belief that the federal government is more likely to bail out a teetering state than a bankrupt company.
“The federal government has broadly channeled cash to all state governments during recent recessions and provided support to individual states following natural disasters,” Moody’s explained, adding that there was no way of being sure how Washington would respond to a bond default by a state, since it had not happened since the 1930s.
But some analysts fear the ratings are too sanguine, recalling that the ratings agencies also dismissed the possibility that a subprime crisis was brewing. While most agree that defaults are unlikely, they fear that as states struggle with their growing debts, investors could decide not to buy the debt of the weakest state or local governments.
That would force a crisis, since states cannot operate if they cannot borrow. Such a crisis could then spread to healthier states, making it more expensive for them to borrow, if Europe is an example.
Meredith Whitney, a bank analyst who was among the first to warn of the impact the subprime mortgage meltdown would have on banks, is warning that she sees similar problems with state and local government finances.
“The state situation reminded me so much of the banks, pre-crisis,” she said this fall on CNBC.
There are eerie similarities between the subprime debt crisis and the looming municipal debt woes. Among them:
¶Just as housing was once considered a sure bet — prices would never fall all across the country at the same time, conventional wisdom suggested — municipal bonds have long been considered an investment safe enough for grandmothers, because states could always raise taxes to pay their bondholders. Now that proposition is being tested. Harrisburg, the capital of Pennsylvania, considered bankruptcy this year because it faced $68 million in debt payments related to a failed incinerator, which is more than the city’s entire annual budget. But officials there have resisted raising taxes.
¶Much of the debt of states and cities is hidden, since it is off the books, just as the amount of mortgage-related debt turned out to be underestimated. States and municipalities often understate their pension liabilities, in part by using accounting methods that would not be allowed in the private sector. Joshua D. Rauh, an associate professor of finance at Northwestern University, and Robert Novy-Marx, an assistant professor of finance at the University of Rochester, calculated that the true unfunded liability for state and local pension plans is roughly $3.5 trillion.
¶The states and many cities still carry good ratings, and those issuing warnings are dismissed as alarmists, reminding some analysts of the lead up to the subprime crisis.
Now states are bracing for more painful cuts, more layoffs, more tax increases, more battles with public employee unions, more requests to bail out cities. And in the long term, as cities and states try to keep up on their debts, the very nature of government could change as they have less money left over to pay for the services they have long provided.
Richard Ravitch, the lieutenant governor of New York, is among those warning that states are on an unsustainable path, and that their disclosures of pension and health care obligations are often misleading. And he worries how long it can last.
“They didn’t do it with bad motives,” he said. “Ninety-five percent of them didn’t understand what they were doing. They did it because it was easier than taxing people or cutting benefits. We’re getting closer and closer to the point where we can’t do that anymore. I don’t know where that is, but I know we’re close.”
A version of this article appeared in print on December 5, 2010, on page A1 of the New York edition.
Friday, December 3, 2010
The links lead to book reviews at the NYT. Membership at the site is free. (Not any more. -ed) I have set up my account with the NYT so that I get no spam from them.
ALL THE DEVILS ARE HERE: The Hidden History of the Financial Crisis. By Bethany McLean and Joe Nocera. (Portfolio/Penguin, $32.95.) More than offering a backward look, this account of the disaster of 2008 helps explain today’s troubling headlines and might help predict tomorrow’s
CHANGING MY MIND: Occasional Essays. By Zadie Smith. (Penguin Press, $26.95.) The quirky pleasures here are due in part to Smith’s inspired cultural references, from Simone Weil to “Buffy the Vampire Slayer.”
COMMON AS AIR: Revolution, Art, and Ownership. By Lewis Hyde. (Farrar, Straus & Giroux, $26.) Hyde draws on the American founders for arguments against the privatization of knowledge.
CLEOPATRA: A Life. By Stacy Schiff. (Little, Brown, $29.99.) It’s dizzying to contemplate the ancient thicket of personalities and propaganda Schiff penetrates to show the Macedonian-Egyptian queen in all her ambition, audacity and formidable intelligence. I saw the author on The Daily Show. She said that Cleopatra was Greek-Macedonian, and looked semitic, if one goes by the images on her coins.
WILD CHILD: Stories. By T. Coraghessan Boyle. (Viking, $25.95.) In these tales, Boyle continues his career-long interest in man’s vexed tussles with nature
THE BOOK IN THE RENAISSANCE. By Andrew Pettegree. (Yale University, $40.)A thought-provoking revisionist history of the early years of printing.
EMPIRE OF THE SUMMER MOON: Quanah Parker and the Rise and Fall of the Comanches, the Most Powerful Indian Tribe in American History. By S. C. Gwynne. (Scribner, $27.50.) The story of the last and greatest chief of the tribe that once ruled the Great Plains.
FINISHING THE HAT: Collected Lyrics (1954-1981) With Attendant Comments, Principles, Heresies, Grudges, Whines and Anecdotes. By Stephen Sondheim. (Knopf, $39.95.) Sondheim’s analysis of his songs and those of others is both stinging and insightful.
THE HONOR CODE: How Moral Revolutions Happen. By Kwame Anthony Appiah. (Norton, $25.95.) A philosopher traces the demise of dueling and slavery among the British and of foot-binding in China, and suggests how a fourth horrific practice — honor killings in today’s Pakistan — might someday meet its end.
KOESTLER: The Literary and Political Odyssey of a Twentieth-Century Skeptic. By Michael Scammell. (Random House, $35.) Scammell wants to put the complex intelligence of Koestler (“Darkness at Noon”) back on display and to explain his shifting preoccupations.
LAST CALL: The Rise and Fall of Prohibition. By Daniel Okrent. (Scribner, $30.) A remarkably original account of the 14-year orgy of lawbreaking that transformed American social life.
SCORPIONS: The Battles and Triumphs of FDR’s Great Supreme Court Justices. By Noah Feldman. (Twelve, $30.) A group portrait of Felix Frankfurter, Robert Jackson, Hugo Black and William O. Douglas.
SUPREME POWER: Franklin Roosevelt vs. the Supreme Court. By Jeff Shesol. (Norton, $27.95.) Contention over Roosevelt’s proposal to transform the court nearly paralyzed his administration for over a year and severely damaged fragile Democratic unity.
Thursday, December 2, 2010
Extend Only Middle Class Tax Cuts
With the top 1% of the country now in possession of 30% of the wealth of our economy, and with the federal deficit completely out of control, it is time to let the misguided tax cuts for the wealthy expire.
In the first place, they did not work. We were told that they would stimulate the economy and create jobs. They did not. All the rich did was hoard more and more of their money.
Secondly, what really stimulates the economy is when people who are NOT rich have money to spend on the things they need. Yet the most heartless members of Congress propose balancing the budget on the backs of people who cannot make ends meet as it is.
Worse yet, the Republicans are threatening to shut down the business of Congress until their most greedy constituents, the only ones they represent at all, get to keep their reserved seat at the pig trough. And it is the road to utter economic collapse and disaster. The last time distribution of wealth was so unequal was just before the Great Depression, and we all know how that turned out.
So let the overgenerous tax cuts for the wealthy expire. Enough is more than enough.
Read The FAX Petition
The one click form below will send your personal message to all your government representatives selected below, with the subject "Extend Only Middle Class Tax Cuts." At the same time you can send your personal comments only as a letter to the editor of your nearest local daily newspaper if you like.
Friday, November 26, 2010
In case you missed it on 60 Minutes, this is what Andy Rooney thinks about women over 50. (whether Andy Rooney said it is immaterial, although I hope he did.) ~Deb
60 Minutes Correspondent Andy Rooney (CBS)
“As I grow in age, I value women over 50 most of all.
Here are just a few reasons why:
A woman over 50 will never wake you in the middle of the night & ask, 'What are you thinking?' She doesn't care what you think.
If a woman over 50 doesn't want to watch the game, she doesn't sit around whining about it. She goes and does something she wants to do, & it's usually more interesting.
Women over 50 are dignified. They seldom have a screaming match with you at the opera or in the middle of an expensive restaurant. Of course, if you deserve it, they won't hesitate to shoot you, if they think they can get away with it.
Older women are generous with praise, often undeserved. They know what it's like to be unappreciated.
Women get psychic as they age. You never have to confess your sins to a woman over 50.
Once you get past a wrinkle or two, a woman over 50 is far sexier than her younger counterpart.
Older women are forthright and honest..
They'll tell you right off if you are a jerk or if you are acting like one. You don't ever have to wonder where you stand with her.
Yes, we praise women over 50 for a multitude of reasons.
Unfortunately, it's not reciprocal.
For every stunning, smart, well-coiffed, hot woman over 50, there is a bald, paunchy relic in yellow pants making a fool of himself with some 22-year old waitress.
Ladies, I apologize.
For all those men who say,
'Why buy the cow when you can get the milk for free?’
Here's an update for you.
Nowadays 80% of women are against marriage.
Because women realize it's not worth buying an entire pig just to get a little sausage!”
Andy Rooney is a really smart guy!
Send this to fine, fun, fabulous, fancy-free female friends over 50,
Men who have a great sense of humor they might appreciate it too.
Eating the Irish
By PAUL KRUGMAN
Published: November 25, 2010
What we need now is another Jonathan Swift.
Fred R. Conrad/The New York Times
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Most people know Swift as the author of “Gulliver’s Travels.” But recent events have me thinking of his 1729 essay “A Modest Proposal,” in which he observed the dire poverty of the Irish, and offered a solution: sell the children as food. “I grant this food will be somewhat dear,” he admitted, but this would make it “very proper for landlords, who, as they have already devoured most of the parents, seem to have the best title to the children.”
O.K., these days it’s not the landlords, it’s the bankers — and they’re just impoverishing the populace, not eating it. But only a satirist — and one with a very savage pen — could do justice to what’s happening to Ireland now.
The Irish story began with a genuine economic miracle. But eventually this gave way to a speculative frenzy driven by runaway banks and real estate developers, all in a cozy relationship with leading politicians. The frenzy was financed with huge borrowing on the part of Irish banks, largely from banks in other European nations.
Then the bubble burst, and those banks faced huge losses. You might have expected those who lent money to the banks to share in the losses. After all, they were consenting adults, and if they failed to understand the risks they were taking that was nobody’s fault but their own. But, no, the Irish government stepped in to guarantee the banks’ debt, turning private losses into public obligations.
Before the bank bust, Ireland had little public debt. But with taxpayers suddenly on the hook for gigantic bank losses, even as revenues plunged, the nation’s creditworthiness was put in doubt. So Ireland tried to reassure the markets with a harsh program of spending cuts.
Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts.
Or to be more accurate, they’re bearing a burden much larger than the debt — because those spending cuts have caused a severe recession so that in addition to taking on the banks’ debts, the Irish are suffering from plunging incomes and high unemployment.
But there is no alternative, say the serious people: all of this is necessary to restore confidence.
Strange to say, however, confidence is not improving. On the contrary: investors have noticed that all those austerity measures are depressing the Irish economy — and are fleeing Irish debt because of that economic weakness.
Now what? Last weekend Ireland and its neighbors put together what has been widely described as a “bailout.” But what really happened was that the Irish government promised to impose even more pain, in return for a credit line — a credit line that would presumably give Ireland more time to, um, restore confidence. Markets, understandably, were not impressed: interest rates on Irish bonds have risen even further.
Does it really have to be this way?
In early 2009, a joke was making the rounds: “What’s the difference between Iceland and Ireland? Answer: One letter and about six months.” This was supposed to be gallows humor. No matter how bad the Irish situation, it couldn’t be compared with the utter disaster that was Iceland.
But at this point Iceland seems, if anything, to be doing better than its near-namesake. Its economic slump was no deeper than Ireland’s, its job losses were less severe and it seems better positioned for recovery. In fact, investors now appear to consider Iceland’s debt safer than Ireland’s. How is that possible?
Part of the answer is that Iceland let foreign lenders to its runaway banks pay the price of their poor judgment, rather than putting its own taxpayers on the line to guarantee bad private debts. As the International Monetary Fund notes — approvingly! — “private sector bankruptcies have led to a marked decline in external debt.” Meanwhile, Iceland helped avoid a financial panic in part by imposing temporary capital controls — that is, by limiting the ability of residents to pull funds out of the country.
And Iceland has also benefited from the fact that, unlike Ireland, it still has its own currency; devaluation of the krona, which has made Iceland’s exports more competitive, has been an important factor in limiting the depth of Iceland’s slump.
None of these heterodox options are available to Ireland, say the wise heads. Ireland, they say, must continue to inflict pain on its citizens — because to do anything else would fatally undermine confidence.
But Ireland is now in its third year of austerity, and confidence just keeps draining away. And you have to wonder what it will take for serious people to realize that punishing the populace for the bankers’ sins is worse than a crime; it’s a mistake.
Front-Line City in Virginia Starts Tackling Rise in Sea
By LESLIE KAUFMAN
NORFOLK, Va. — In this section of the Larchmont neighborhood, built in a sharp “u” around a bay off the Lafayette River, residents pay close attention to the lunar calendar, much as other suburbanites might attend to the daily flow of commuter traffic.
If the moon is going to be full the night before Hazel Peck needs her car, for example, she parks it on a parallel block, away from the river. The next morning, she walks through a neighbor’s backyard to avoid the two-to-three-foot-deep puddle that routinely accumulates on her street after high tides.
For Ms. Peck and her neighbors, it is the only way to live with the encroaching sea.
As sea levels rise, tidal flooding is increasingly disrupting life here and all along the East Coast, a development many climate scientists link to global warming.
But Norfolk is worse off. Situated just west of the mouth of Chesapeake Bay, it is bordered on three sides by water, including several rivers, like the Lafayette, that are actually long tidal streams that feed into the bay and eventually the ocean.
Like many other cities, Norfolk was built on filled-in marsh. Now that fill is settling and compacting. In addition, the city is in an area where significant natural sinking of land is occurring. The result is that Norfolk has experienced the highest relative increase in sea level on the East Coast — 14.5 inches since 1930, according to readings by the Sewells Point naval station here.
Climate change is a subject of friction in Virginia. The state’s attorney general, Ken T. Cuccinelli II, is trying to prove that a prominent climate scientist engaged in fraud when he was a researcher at the University of Virginia. But the residents of coastal neighborhoods here are less interested in the debate than in the real-time consequences of a rise in sea level.
When Ms. Peck, now 75 and a caretaker to her husband, moved here 40 years ago, tidal flooding was an occasional hazard.
“Last month,” she said recently, “there were eight or nine days the tide was so doggone high it was difficult to drive.”
Larchmont residents have relentlessly lobbied the city to address the problem, and last summer it broke ground on a project to raise the street around the “u” by 18 inches and to readjust the angle of the storm drains so that when the river rises, the water does not back up into the street. The city will also turn a park at the edge of the river back into wetlands — it is now too saline for lawn grass to grow anyway. The cost for the work on this one short stretch is $1.25 million.
The expensive reclamation project is popular in Larchmont, but it is already drawing critics who argue that cities just cannot handle flooding in such a one-off fashion. To William Stiles, executive director of Wetlands Watch, a local conservation group, the project is well meaning but absurd. Mr. Stiles points out that the Federal Emergency Management Agency has already spent $144,000 in recent years to raise each of six houses on the block.
At this pace of spending, he argues, there is no way taxpayers will recoup their investment.
“If sea level is a constant, your coastal infrastructure is your most valuable real estate, and it makes sense to invest in it,” Mr. Stiles said, “but with sea level rising, it becomes a money pit.”
Many Norfolk residents hope their problems will serve as a warning.
“We are the front lines of climate change,” said Jim Schultz, a science and technology writer who lives on Richmond Crescent near Ms. Peck. “No one who has a house here is a skeptic.”
Politics aside, the city of Norfolk is tackling the sea-rise problem head on. In August, the Public Works Department briefed the City Council on the seriousness of the situation, and Mayor Paul D. Fraim has acknowledged that if the sea continues rising, the city might actually have to create “retreat” zones.
Kristen Lentz, the acting director of public works, prefers to think of these contingency plans as new zoning opportunities.
“If we plan land use in a way that understands certain areas are prone to flooding,” Ms. Lentz said, “we can put parks in those areas. It would make the areas adjacent to the coast available to more people. It could be a win-win for the environment and community at large and makes smart use of our coastline.”
Ms. Lentz believes that if Norfolk can manage the flooding well, it will have a first-mover advantage and be able to market its expertise to other communities as they face similar problems.
But she also acknowledges that for the businesses and homes entrenched on the coast, such a step could be costly, and that the city has no money yet to pay them to move.
In the short run, the city’s goal is just to pick its flood-mitigation projects more strategically. “We need to look broadly and not just act piecemeal,” Ms. Lentz said, referring to Larchmont.
To this end, Norfolk has hired the Dutch firm Fugro to evaluate options like inflatable dams and storm-surge floodgates at the entrances to waterways.
But to judge by the strong preference in Larchmont for action at any cost, it may not be easy for the city to choose which neighborhoods might be passed over for projects.
Neighborhood residents lobbied hard for the 18-inch lifting of their roadway, even though they know it will offer not much protection from storms, which are also becoming more frequent and fearsome. Many say that housing values in the neighborhood have plummeted and that this is the only way to stabilize them.
Others like Mr. Schultz support the construction, even though they think the results will be very temporary indeed.
“The fact is that there is not enough engineering to go around to mitigate the rising sea,” he said. “For us, it is the bitter reality of trying to live in a world that is getting warmer and wetter.”
Millions Are on the Brink of Disaster, as Extended Unemployment Benefits Are in Doubt
By Lindsay Beyerstein, TruthOut.org
Posted on November 26, 2010, Printed on November 26, 2010
According to official statistics, nearly 15 million Americans are unemployed. Between 2 and 4 million of them are expected to exhaust their state unemployment insurance benefits between now and May. Historically, during times of high unemployment, Congress provides extra cash to extend the benefits. Congress has never failed to do so when unemployment is above 7.2%. Today's unemployment rate is above 9% and the lame duck session of Congress has so far failed to extend the benefits.
Congress has until November 30 to renew two federal programs to extend unemployment benefits, as David Moberg reports for Working In These Times. Last week, a bill to extend benefits for an additional three months failed to garner the two-thirds majority it needed to pass in the House. The House will probably take up the issue again this session, possibly for a one-year extension, but as Moberg notes, it's unclear how the bill will fare in the Senate. The implications are dire, as Moberg notes:
The result? Not just huge personal and familial hardships that scars the lives of young and old both economically and psychologically for years to come. But failure to renew extended benefits would also slow the recovery, raise unemployment, and deepen the fiscal crises of state and federal governments.
But Wait! There's More:
The Paycheck Fairness Act died in the Senate last week, as Denise DiStephan reports in The Nation. The bill would have updated the 1963 Equal Pay Act to close loopholes and protect employees against employer retaliation for discussing wages. All Republican senators and Nebraska Democrat Ben Nelson voted not to bring the bill to the floor, killing the legislation for this session of Congress. The House already passed its version of the bill in 2009 and President Barack Obama had pledged to sign it.
Economist Dean Baker talks with Laura Flanders of GritTV about quantitative easing (a.k.a. the Fed printing more money) and the draft proposal from the co-chairs of the deficit commission. Baker argues that we're facing an unemployment crisis, not a deficit crisis.
Charles Ferguson's documentary "Inside Job" is a must-see, according to Matthew Rothschild of The Progressive. An examination of how Wall Street devastated the U.S. economy, the film details the reckless speculation in housing derivatives, enabled by crooked credit rating schemes, that brought the entire financial system to the brink of collapse. The film is narrated by Brad Pitt and features appearances by former Governor and anti-Wall Street corruption crusader Eliot Spitzer, financier George Soros, and Prof. Nouriel Roubini, the New York University economist who predicted the collapse of the housing bubble.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Lindsay Beyerstein is an investigative journalist in Brooklyn, NY. Her reporting has appeared in Newsweek, Salon, Slate, In These Times and other publications. She was the recipient of a 2009 Project Censored Award.
© 2010 TruthOut.org All rights reserved.
View this story online at: http://www.alternet.org/story/148982/
I almost spit up my coffee. Per TPM:
"We had the greatest generation," Simpson said. "I think this is the greediest generation."
Where to begin.
Simpson doesn't apparently understand the program that it has been his life's mission to destroy. Collecting Social Security isn't a gift. You pay into it all your life, and then when you get old, you get your turn to collect. But his perspective indicates something even more vile: a belief that people's sole source of income, their very livelyhood, is some sort of mass generosity. It isn't. Social Security is a deal. A new sort of deal that didn't exist before FDR created it. Instead of working all your life and then spending your elder years destitute, why not take care of the old people now and then when you get old, you'll get yours. It's a deal, not a handout.
I don't see how you can reach consensus with someone like this. There is no middle ground between people who think Social Security is a government handout and reality. To malign people who have worked their entire lives and kept their end of the bargain, he says to them, essentially "you're beat." You cant negotiate with a guy like that. He doesn't believe in keeping his end of the deal. In fact, there is a word for people who take money and then don't hold up their end of a bargain: a thief. I say it is that person who is truly greedy.
From a link provided by Scarce:
Simpson said he's spent about $25,000 of his own money on travel and hotel expenses on behalf of the debt commission -- an expense he said he doesn't mind paying.
Simpson might appear cynical about politics these days. But he said he hasn't lost heart.
"I really believe that there are more patriots in America than selfish, selfish people," he said.
Can you believe this guy? He's got 25 grand to throw around to go cut your social security, but he says YOU are selfish. Hey Alan, how about you pay some higher tax on all that wealth you have? Then the problem Social Security has 27 years from now will be put off for another 75 years.
By Brooklynbadboy | Sourced from Daily Kos
Posted at November 25, 2010, 9:14 am
Saturday, November 6, 2010
I was the first one done out of 400 test takers. I read at 99% comprehension, so I could have aced it. On the other hand, I could have not understood one dang thing I read when studying.
To turn my triumphant day into a luxurious, relaxing evening, I popped open a bottle of Steelhead Zinfandel 2007, Quivira Vineyards, Dry Creek Valley. It is at Trader Joe's at $6.99 a bottle. It is as smooth as wines costing twice as much, and deliciously redolent of cherries and berries.
Friday, August 13, 2010
GOP Candidate Calls for Internment Camps
I responded thusly:
Italian-Americans were interned in the US during WWII. See: http://en.wikipedia.org/wiki/Italian_American_i...
It's just business as usual.
Here's more: http://www.lewrockwell.com/north/north71.html Latin-American Germans were interned.
Japanese-Mexicans lost their lands during WWII.
Thursday, July 22, 2010
RIP Charly Gittings: We’ve Just Lost One of the Good Guys
I suggest going to Andy's site and reading the entire article.
’m saddened to report that on the night of July 14, Charly Gittings, the most tenacious opponent of the Bush administration and its crimes, passed away at the age of 57. I had never met Charly, but we had been in email contact since November 2008, and I had been aware of his work before that time. No one who has ever researched Guantánamo can have failed, at some point, to have come across Charly’s extraordinary “Project to Enforce the Geneva Conventions” (PEGC), a vast archive of documents relating to the Bush administration crimes, consisting of legal opinions, memoranda, press statements, from the courts, the White House, the DoD, the DoJ, the State Department — all the evidence required to convict senior officials of war crimes.
At the foot of this post, I reproduce Charly’s “Political Biography,” in which he explained how his project began on November 13, 2001, when President Bush issued his original “Military Order – Detention, Treatment, and Trial of Certain Non-Citizens in the War Against Terrorism,” a vile document that, years later, I too realized was central to the administration’s plot to shred every law that protected us from ourselves, and that protected our enemies — or random strangers — from torture, arbitrary detention and murder. Charly, however, was there at the beginning, urging his fellow Americans to uphold the laws they claimed to admire.
When I first struck up contact with Charly, he sent me a wonderful email that, on re-reading, captures his dedication to the law, and also sheds light on how, like many sensitive people in a world that has become increasingly coarse, violent and uncaring, he found it hard to dwell too much on the stories of the men — and boys — subjected to the Bush administration’s lawless and brutal experiment in unfettered executive power, and focused instead on law and policy, and his unwavering belief that America was led by war criminals.
Glad to meet you! I’ve heard of you and your book … I was very glad that you wrote your book, because I’d been studiously avoiding the idea of trying to write it myself for five years or so but definitely thought it would be good for someone to do it. My main focus has always been the legal and policy issues, and much as I sympathize with the detainees on a human level, the details of individual cases tend to overwhelm me a bit. I remember how I felt in early 2002 when I saw the pictures of the first detainees being transported to Gitmo — that told me everything I needed to know about Gitmo right then and there. I do pay attention, but have to keep a balance lest I drown in details … you probably get what I mean better than most would.
Wednesday, July 21, 2010
Naaaaaaaaah! I was going to go for Frank Galvin, but Paul Newman’s face in the article was so compelling that I decided to be a bit more thoughtful in my choice. I am applying the Atticus Finch doctrine here. Jake Brigance in A Time to Kill showed me how to be a lawyer. He led the jury into a position where they could empathize with a man who murdered his daughter’s torturers by flipping the argument on its head.
Here it is: http://www.youtube.com/watch?v=C7f-BgDgpmE
Tuesday, July 20, 2010
The Bhopal gas tragedy was the worst industrial disaster in human history. Twenty-five thousand people died, 500,000 were injured, and the injustice done to the victims of Bhopal over the past 25 years will go down as the worst case of jurisprudence ever.
The gas leak in Bhopal in December 1984 was from the Union Carbide pesticide plant which manufactured “carabaryl” (trade name “sevin”) — a pesticide used mostly in cotton plants. It was, in fact, because of the Bhopal gas tragedy and the tragedy of extremist violence in Punjab that I woke up to the fact that agriculture had become a war zone. Pesticides are war chemicals that kill — every year 220,000 people are killed by pesticides worldwide.
After research I realised that we do not need toxic pesticides that kill humans and other species which maintain the web of life. Pesticides do not control pests, they create pests by killing beneficial species. We have safer, non-violent alternatives such as neem. That is why at the time of the Bhopal disaster I started the campaign “No more Bhopals, plant a neem”. The neem campaign led to challenging the biopiracy of neem in 1994 when I found that a US multinational, W.R. Grace, had patented neem for use as pesticide and fungicide and was setting up a neem oil extraction plant in Tumkur, Karnataka. We fought the biopiracy case for 11 years and were eventually successful in striking down the biopiracy patent.
Meanwhile, the old pesticide industry was mutating into the biotechnology and genetic engineering industry. While genetic engineering was promoted as an alternative to pesticides, Bt cotton was introduced to end pesticide use. But Bt cotton has failed to control the bollworm and has instead created major new pests, leading to an increase in pesticide use.
The high costs of genetically-modified (GM) seeds and pesticides are pushing farmers into debt, and indebted farmers are committing suicide. If one adds the 200,000 farmer suicides in India to the 25,000 killed in Bhopal, we are witnessing a massive corporate genocide — the killing of people for super profits. To maintain these super profits, lies are told about how, without pesticides and genetically-modified organisms (GMOs), there will be no food. In fact, the conclusions of International Assessment of Agricultural Science and Technology for Development, undertaken by the United Nations, shows that ecologically organic agriculture produces more food and better food at lower cost than either chemical agriculture or GMOs.
The agrochemical industry and its new avatar, the biotechnology industry, do not merely distort and manipulate knowledge, science and public policy. They also manipulate the law and the justice system. The reason justice has been denied to the victims of Bhopal is because corporations want to escape liability. Freedom from liability is, in fact, the real meaning of “free trade”. The tragedy of Bhopal is dual. Interestingly, the Bhopal disaster happened precisely when corporations were seeking deregulation and freedom from liability through the instruments of “free trade”, “trade liberalisation” and “globalisation”, both through bilateral pressure and through the Uruguay Round of General Agreement on Tariffs and Trade (GATT) which led to the creation of the World Trade Organisation.
Injustice for Bhopal has been used to tell corporations that they can get away with murder. This is what senior politicians communicated to Dow Chemical. This is what the US-India Commission for Environmental Cooperation forum stated on June 11, 2010, in the context of the call from across India for justice for Bhopal victims. As one newspaper commented, Bhopal is being seen as a “road block and impediment to trade… the recommendations include removing road blocks to commercial trade by (India), and adoption of a nuclear liability regime”.
Denial of justice to Bhopal has been the basis of all toxic investments since Bhopal, be it Bt cotton, DuPont’s nylon plant or the Civil Nuclear Liability Bill.
Just as Bhopal victims were paid a mere Rs 12,000 (approximately $250) each, the proposed Nuclear Liability Bill also seeks to put a ceiling on liability of a mere $100 million on private operations of a nuclear power plant in case of a nuclear accident. Once again, people can be killed but corporations should not have to pay.
There has also been an intense debate in India on GMOs. An attempt was made by Monsanto/Mahyco to introduce Bt brinjal in 2009. As a result of public hearings across the country, a moratorium has been put on its commercialisation. Immediately after the moratorium a bill was introduced for a Biotechnology Regulatory Authority of India —the bill does not only leave the biotechnology industry free of liability, but it also has a clause which empowers the government to arrest and fine those of us who question the need and safety of GMOs.
From Bhopal to pesticides to GMOs to nuclear plants, there are two lessons we can draw. One is that corporations introduce hazardous technologies like pesticides and GMOs for profits, and profits alone. And second lesson, related to trade, is that corporations are seeking to expand markets and relocate hazardous and environmentally costly technologies to countries like India.
Corporates seek to globalise production but they do not want to globalise justice and rights. The difference in the treatment of Union Carbide and Dow Chemical in the context of Bhopal, and of BP in the context of the oil spill in the Gulf of Mexico shows how an apartheid is being created. The devaluation of the life of people of the Third World and ecosystems is built into the project of globalisation. Globalisation is leading to the outsourcing of pollution — hazardous substances and technologies — to the Third World. This is at the heart of globalisation — the economies of genocide.
Lawrence Summers, who was the World Bank’s chief economist and is now chief economic adviser to the Obama government, in a memo dated December 12, 1991, to senior World Bank staff, wrote, “Just between you and me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the less developed countries?”
Since wages are low in the Third World, economic costs of pollution arising from increased illness and death are least in the poorest countries. According to Mr Summers, the logic “of relocation of pollutants in the lowest wage country is impeccable and we should face up to that”.
All this and Bhopal must teach us to reclaim our universal and common humanity and build an Earth Democracy in which all are equal, and corporations are not allowed to get away with crimes against people and the planet.
Dr Vandana Shiva is the executive director of the Navdanya Trust
The main website and research repository is located at www.pegc.us, which I have been hosting for five years. Charly assigned all his intellectual property to me before his death.
I have created the PEGC Facebook group and a blog to handle communications in the interim while I prepare for an important event to occur next week. I will hard at work on the Project after that.
Friday, July 2, 2010
I had just changed into an old top, to do a messy household job, when I felt the first sharp prick of a flea bite on my upper right arm. I am never sure about the first bite. Maybe it could be a straw in my clothing or a forgotten tag holder. But I commenced to get little rashes that itched fiercely. I doffed all my clothing and put it in the washing machine. Then, I felt the little bastard in my hair. I knew I had to go take a shower. That old top had come from my closet…
Whew, that’s better! I put back on the bathrobe I had used before the shower, then it started again. I am headed back to the washing machine, then out to the kitchen to smear myself with diatomaceous earth. I don’t like doing that; the powder is bad for my lungs. It’s worth it, though, to be free of the pain and itch. A life full of this kind of pain isn’t worth living.
How do I know it isn’t a figment of my imagination? I asked my psychiatrist, Dr. R., who said I did not have this disease, insect phobia, nor this one, Delusions of Parasitosis. Those are the only two conditions that would cause one to feel assaulted by imaginary bugs. I do not have those conditions.
Prequel: The Pearl Harbor attack against the fleas
After Harris left for a trip of indeterminate length, I knew I had to get right on a housewide eradication program. Besides the flea bombs and flea spray, the kind that retards their growth into adulthood, I ordered 5 pounds of food-grade diatomaceous earth (DE).
I vacuumed every vacuumable item in the home. I washed the floors.
I checked with Harris to make sure that using flea bombs would not blow up the house due to exposure to lit pilot lights. Turned out they were in the garage. Great place for the birds! I put them in the garage, with a blanket under the garage door to keep fumes from entering.
I sat the bombs on raised platforms. I held my nose and took a deep breath, then set off the bombs. Previously, I had gathered all the bedding in the house to wash at the Laundromat…too voluminous to wash in our modest home washer.
Then I set off to the Laundromat, productively killing off the two-hour wait while the deadly chemicals dispersed with productive activity. I loaded the washing machines. It took 5 triple-capacity monster machines at $4.25 per pop, to hold the comforters, sheets, blankets and pillows from two bedrooms and the living room.
While everything washed, I treated the empty van with flea spray.
You get the picture.
After the bombing and the DE application, which took the better part of two days, I still have fleas.
I just smeared my body with DE.
One Week After: a flea
I had just changed into an old top, to do a messy household job, when I felt the first sharp prick of a flea bite on my upper right arm. I am never sure about the first bite. Maybe it could be a straw in my clothing or a forgotten tag holder. But I commenced to get little rashes that itched fiercely. I doffed all my clothing and put it in the washing machine. Then, I felt the little bastard in my hair. I knew I had to go take a shower. That old top had come from my closet…
Whew, that’s better! I put back on the bathrobe I had used before the shower, then it started again. I am headed back to the washing machine, then out to the kitchen to smear myself with diatomaceous earth. I don’t like doing that; the powder is bad for my lungs. It’s worth it, though, to be free of the pain and itch. I recognize that staving off this affliction will shorten my life. I am past caring about that.
How do I know it isn’t a figment of my imagination? I asked my psychiatrist, Dr. R., who said I did not have this disease, insect phobia, nor this one, Delusions of Parasitosis. Those are the only two conditions that would cause one to feel assaulted by imaginary bugs. I do not have those conditions.
Thursday, June 17, 2010
And Big Oil-led study earlier suggested that safety procedures were overdone. Noooo, we don't need effective regulation! That's for sissies.
Just stop to think for a moment whether the privatization of the oil industry is a good thing for humanity overall. BP, ExxonMobil etal are obscenely rich. What if we had that money to support our education system and infrastructure?
Government regulators have said that the failure of the Deepwater Horizon's blowout preventer April 20 was unforeseeable. But studies conducted for federal regulators in MMS or with their participation show that blowout preventers were known to have 'safety critical' vulnerabilities.
Go to the original to see illustrations and photos.
Robot submarines vainly attempted to activate the shear rams on the Deepwater Horizon's blowout preventer on April 22 to close off the flow of oil from the Macondo well. Federal regulators from MMS set the standards for blowout preventers, but several studies suggest the agency took no action to tighten safety measures even when 'critical' vulnerabilities became apparent.
US Coast Guard/AP/file
he federal agency charged with setting safety standards for offshore oil exploration failed to act on at least four warnings about vulnerabilities in subsea blowout preventers, the critical safety device that failed to shut down the Gulf oil spill when the Deepwater Horizon oil rig exploded April 20.
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In this diagram of a blowout preventer, the hydraulic rams are the horizontal, piston-like protrusions. The rams are designed to cut and seal the pipe in an emergency, shutting off the flow of oil. They failed during the Deepwater Horizon blowout.
* Before BP oil spill, Big Oil-led study urged feds to cut safety testing
* US rig inspectors received gifts from oil companies, report says
* Obama to sever ties between drilling cops and Big Oil
Each of those four design flaws – detailed in three studies conducted for the US Minerals Management Service (MMS) during the past decade – threatened the ability of blowout preventers in deep water to function in an emergency.
Yet the flaws did not result in federal safety alerts or tougher standards for blowout preventer (BOP) manufacturers, say experts familiar with the MMS response to such findings.
RELATED: Before BP oil spill, Big Oil-led study urged feds to cut safety testing
With investigators still seeking to determine the cause of the Deepwater Horizon explosion, it remains unclear whether any of these vulnerabilities played a role in the failures that led to the Gulf oil spill. But MMS’s lack of action in spite of warnings about the flaws, three of which have not been previously reported, points to a long pattern of ignoring rather than fixing known safety threats, the experts say.
“Were BOPs designed to fail and did MMS know this? Yes, some of their key people knew,” says Robert Bea, an engineer at the University of California, Berkeley and one of the expert reviewers of President Obama’s 30-day offshore oil-exploration safety review. “Did BP know?” he adds. “Yes, some of their key people knew. Did the industry know? Yes, some of their key people knew.”
So what exactly did the MMS and industry officials know about the BOPs’ vulnerabilities and when? Government and industry officials have said the Deepwater Horizon disaster was unforeseeable – that BOPs were previously regarded as a virtually infallible “last line of defense” against a catastrophic blowout in deep water.
But a deeper look into three engineering studies from 2004, 2006, and 2009 commissioned by MMS – or done with MMS participation – tells a different story. The 2009 study, for instance, identifies 62 instances of BOP failures, four of which were deemed “safety critical.” The study was a joint industry-MMS venture and included the participation of at least four senior MMS officials. Each study sounded warnings about BOP vulnerabilities that, if heeded, could have given the agency years to fix them.
Officials at West Engineering Service, the consulting company and BOP specialist that conducted all three of the studies referenced in this article, did not return e-mails or phone calls. MMS officials, along with the Department of Interior, responded to e-mailed questions but refused requests for an interview.
“We are looking at everything, from what happened on the rig that night and the equipment that was being used, to the safety, testing, and backup procedures that are in place for that equipment,” Kendra Barkoff, Interior Department press secretary, wrote in an e-mail. “It’s also clear that we need a stronger oversight and enforcement agency to police the industry.”
The four design flaws highlighted by the three studies are as follows. The first three have not been previously reported.
No. 1: deep water pressure
In the fall of 2006, West Engineering Services of Brookshire, Texas, turned over to MMS officials a study on the effects of pressure on BOPs. Among its key findings: High deep-water pressure could severely damage the critical gaskets and seals on BOPs’ hydraulic ram valves, causing them to leak and fail in an emergency.
One type of hydraulic ram valve, called a shear ram, is designed to prevent a situation like the one in the Gulf. In the event of a catastrophic failure, the shear rams are supposed to stop the flow of oil by cutting and crumpling the pipe between them. The Deepwater Horizon’s shear rams failed, though it’s not yet clear why.
Read more at the site.
Monday, May 31, 2010
Not everything we humans do is amenable to repair.
May 28, 2010
Our Fix-It Faith and the Oil Spill
By ELISABETH ROSENTHAL
“IF we’ve learned anything so far about the deepwater Gulf of Mexico, it is that it contains surprises. And that means an operator needs depth — depth in terms of resources and expertise — to create the capability to respond to the unexpected. ”
These prophetic words came from a 2005 presentation by David Eyton, who was then vice president for BP’s deepwater developments in the Gulf of Mexico. Reprinted that year in a journal of the Society of Exploration Geophysicists, the speech acknowledged that oil companies “did somewhat underestimate the full nature of the challenges we were taking on in the deep waters of the gulf.”
Still, Mr. Eyton expressed buoyant optimism that BP’s risk management expertise, as well as its new technologies, would play a “critical role” in allowing the company to triumph over nature’s daunting obstacles.
As the world now knows, it did not turn out that way.
As BP struggled last week to stanch the flow of spewing oil at the Deepwater Horizon rig, it has become clear that the pressure to dig deeper and faster from what Mr. Eyton then called a “frontier province” of oil exploration has in some ways outpaced the knowledge about how to do that safely. (And there is still the question of whether BP used all the tools and safety mechanisms available.)
Americans have long had an unswerving belief that technology will save us — it is the cavalry coming over the hill, just as we are about to lose the battle. And yet, as Americans watched scientists struggle to plug the undersea well over the past month, it became apparent that our great belief in technology was perhaps misplaced.
“Americans have a lot of faith that over the long run technology will solve everything, a sense that somehow we’re going to find a way to fix it,” said Andrew Kohut, president of the Pew Research Center for the People and the Press. He said Pew polling in 1999 — before the September 2001 terror attacks — found that 64 percent of Americans pessimistically believed that a terrorist attack on the United States probably or definitely would happen. But they were naïvely optimistic about the fruits of technology: 81 percent said there would be a cure for cancer, 76 percent said we would put men on Mars.
Our experience of technology has been largely wondrous and positive: The green revolution ameliorated the problem of world hunger (for a time at least) with better seeds and fertilizers to increase harvests. When childhood diseases were ravaging the world, vaccines came along and (nearly) eliminated them. There are medicines for the human immunodeficiency virus and AIDS. There is the iPad.
Many experts in the field of undersea oil exploration believe that technology can also resolve the risks of operating tens of thousands of feet under the seabed, despite BP’s current problems.
“We’re pushing the envelope, but I personally believe that the technology, in terms of equipment and processes, will be able to keep up with what we’re doing — though this experience may slow things down,” said Stefan Mrozewski, a senior staff associate at the Lamont-Doherty Earth Observatory of Columbia University, whose research involves projects like drilling boreholes in deep water to study chemicals under the seafloor.
He previously worked as an engineer in the oil industry on deepwater rigs in the Gulf of Mexico.
He said the blowout on the rig and the apparent failure of the blowout preventer was “beyond the realm of expectation,” most likely a combination of unimaginable human and mechanical error. Noting that rigorous planning precedes deepwater drilling, yet “the risk is still not zero,” he said the accident last month would encourage designers and engineers to improve the technology and procedures, so that a disaster like the Deepwater Horizon explosion could not happen again.
Still, as he watched a live feed of drilling mud being pumped into the leaking well on the seabed, he acknowledged that the science of repair and cleanup seemed lacking. “My impression is that we were unprepared for this,” he said. “There were not a lot of good technologies and techniques ready.”
William Jackson, deputy director general of the International Union for Conservation of Nature in Gland, Switzerland, said abstract devotion was misguided: “At this time in history we have great faith in having the technological ability to solve problems, and that faith has proved incorrect in this place.”
He said that even good new ideas needed funding and testing to make sure they worked. He pointed out that pledges by the coal industry and some countries to curb future carbon dioxide emissions often assume the successful evolution of technologies that are as yet unproven or have never been tried on a large scale.
“There is this belief that an engineering solution can be found as you move along,” he said, noting that carbon capture and storage — which involves pumping CO2 emissions underground rather than releasing them to the air — may be “there” as a science, but the costs prevent it from being a practical answer.
By all accounts, the oil industry is infused with this “can do” attitude: Oil running low? “Oil wells will run dry, but advances in technologies can put off the inevitable,” said a 2006 article in a newsletter of the American Oil and Gas Historical Society. In his 2005 talk, Mr. Eyton, now BP’s group head of research and technology, was not so cavalier, discussing the need for vigilant risk management.
“We find ourselves designing floating systems for 10,000 feet of water depth before the lessons of working in 6,000 feet have been fully identified,” he said.
He sang the benefits of technology while acknowledging its danger, expressing hope that fail-safe features and computer modeling could decrease the risk: “We know the premium associated with hardware reliability is high, but at this stage, operators still have a limited failure database for forecasting the required levels of intervention in ever-deeper and more remote environments.”
Technology, he added, “becomes both an enabler, while at the same time being itself a source of risk.”
In the beginning of May, a few weeks after the rig explosion, the Pew Research Center asked 994 Americans about the oil spill: 55 percent saw it as a major environmental disaster, and 37 percent as a serious problem. But at that time, at least, 51 percent also believed that efforts to prevent the spill from spreading would be successful. Hundreds of thousands of barrels of oil later, federal officials last week released a new estimate of the spill — 12,000 to 19,000 barrels a day — establishing it as the largest in American history. As Richard Feynman, the physicist, once observed, “For a successful technology, reality must take precedence over public relations, for nature cannot be fooled.” Sometimes ingenuity may not help us.
Indeed, think of all the planes grounded for nearly a week in northern Europe last month, as a volcano poured ash in the atmosphere. There was no technological fix, and many passengers couldn’t believe it. Said Mr. Kohut, of Pew Research, “The reaction was: ‘Fix this. Fix this. This is outrageous.’ ”