GLOBAL WARMING BRINGS CHINA INTO OUR BACK YARD WHILE REPUBLICANS CONTINUE TO DENY ITS REALITY

The recent thrust of China into the North Atlantic (in Iceland) has people wondering. Why would the second largest economy in the world, located in far away Asia, be interested in a tiny island-nation on the lip of the Arctic Circle? If our leaders were actually focused on the here and now, dealing with the real world as it exists, conversant with modern science, and not in the pocket of special business interests...they might just be interested in Iceland too--a place whose future in a much warmer world will look much different in a few short decades.

Mitt Romney, and the modern Republican Party's view of global warming (what the GOP, when they addresses the issue at all, calls:"climate change") is clouded by many factors. The Republicans are conflicted. Romney and his Republican allies must satisfy the oligarchs in the oil industry who in effect control elections by their largess. They must also mollify their radical right--wing base who are mindlessly and rabidly anti-science, anti-global warming and anti-government. Yet Romney and his allies must surely be aware of the FACT of global warming and its implications for the future of US industry and the well-being of the nation as a whole. But he can not enunciate these (likely) ideas....and would certainly not be able to act on them were he to be elected to the Nation's highest office. Our political system makes him and other Republican candidates (and some Democrats too) compliant tools of the powerful oil industry.

According to Mitt Romney himself, as quoted in the National Journal October 28, 2011: "My view is that we don’t know what’s causing climate change on this planet. And the idea of spending trillions and trillions of dollars to try to reduce CO2 emissions is not the right course for us. My view with regards to energy policy is pretty straightforward. I want us to become energy secure and independent of the oil cartels. And that means let’s aggressively develop our oil, our gas, our coal, our nuclear power.”

Romney ignores the issue. The companies of his corporatist supporters generate vast amounts of CO2 which cause the greenhouse effect, and the warming of the earth's atmosphere. Can he ask his prime supporters to cease and desist? No! He attempts to change the subject rather than discuss the real problem, the fossil fuel energy sources that are used and how much CO2 we add to the atmosphere. He tries to pivot to "energy security" which has nothing to do with this problem. Romney attempts to obfuscate and apparently has no intention of addressing this critical global issue. He does not mention wind or solar power or any alternate sources of energy. Why? Such comments would roil the cozy relationship Romney has with the politically powerful corporatists who in turn support him with their deep pockets and who scheme to advance the sale and expansion of oil and gas. Why would they encourage competition with other energy sources? Their focus is their corporate bottom-line--the price of gas and oil--and who could fault that? But our nation's potential leader's focus should be on the best course for the US in a changing world not how to sell more oil, refrigerators, automobiles or widgets.

On the other hand, we see China as a different case, its leaders are not burdened by cozy relationships with specific corporate interests and the political and policy control which that entails (there is no oligarchical class in China, or political parties, for that matter). China's leadership is free to make sensible, forward-looking decisions, as for instance on this issue of global warming and alternate power sources. According to Wikipedia (See:"Solar Power in China"), today China has over 400 photovoltaic (PV) companies making solar panels which generate electricity from incident solar radiation. In 2007, China produced nearly half of the world's supply of solar panels with a capacity estimated at @ 4 Gigawatts (GW) of potential electrical energy. As of 2011, China produced about 3.1 Gigawatts of solar-derived electrical energy for power generation in China. In 2011 China added another 2.2 GW of solar panels and are planning to add 4-5 GW of solar photovoltaic panels in 2012. In addition non electrical, direct solar water heating is very common in China. Why are we so far behind them in this matter? We can blame that on the too-close ties of gas and oil interests with decision makers in Washington.

By comparison, in the US, solar power projects are described and measured, not on the gigawatt scale but in the (1000x less) megawatt range. Our production of solar panels is minimal,the Chinese have cornered that market. (The Solyndra incident illustrates the competitive challenge solar panel corporations in the USA face from the Chinese. In 2011, Solyndra, an American solar panel corporation, which had received a half a billion dollar Federal loan through the $800 billion dollar Obama stimulus package, went bankrupt and had to close its doors. President Obama, who correctly attempted to support this vital "green" industry which would have provided well-paying jobs long into the future was vilified and attacked for providing the loan). In terms of photovoltaic generation of electricity,California leads our nation. In that sun-drenched state there is only a one-half GW (550 MW) solar plant located at the Desert Sunlight Solar Farm, and several others in that state of smaller size. In the east, the largest is a 32 MW recently completed solar farm at Upton, New York on Long Island, and a smaller facility in Desoto County Florida. Sadly we are not competing in this vital area and need more government-supported investment, for viable firms, to make us more competitive.

China's reaction to the challenge of global warming is entirely different, than global warming denial we experience here in the USA.

In March of 2008, Chinese Premiere, Wen Jiabao was appointed to a second five-year term. Wen is a scientist and a professional geologist by training, so unlike the recent crop of Republican Presidential hopefuls who have their well-coiffed heads buried deeply in the sand, he accepts, understands and makes use of basic modern ideas such as Darwinian evolution, and the climatic data which supports-human generated global warming. Wen who graduated from the Beijing Institute of Geology is one of the top figures in formulating China's economic policy. He is known as the "people's premier" and has pushed for the development of China's hinterlands and advocated for the welfare of farmers and migrant workers. In the Politburo, the nation's de-facto top political organ, Wen is ranked third in importance out of nine members. Of course, for Wen to reach the premiership, he did not have to pass through a political gauntlet of "flat-earthers, Darwin-deniers, creationists, anti-feminists, radical anti-abortionists, anti-environmentalists, contraception opponents, and deniers of global warming. He of course, was appointed, not elected.

Our system of presidential campaigns and elections has become so controlled by special interests, corporatists, the plutocrats and the oligarch class that the nation's vital needs and best interest have been left ignored. What is best for America, as a nation, has become subordinated to the interests of large corporations, special interests and the powerful and politically well connected, and the motives of these players are not necessarily good for the nation as a whole. That old saw by President Calvin Coolidge which I often quote, "The business of the USA "

'is' business." is unfortunately too much of a verity. It's corollary, "What's good for business is good for the US." which may have been mouthed by Sinclair Lewis' character, George F. Babbit in his novel "Babbit" set in the USA of the 1920s, but it does not hold true in the 21st Century. Important decisions regarding our national needs and best interests have for too often been set in the top floor offices of corporate office buildings and not in the halls of the people's representatives in Washington. One example of that is how we have dealt with the energy sector in general and global warming in particular in this nation. Decision making has been for too long dominated by the oil and gas industry.

However, when we examine how the Chinese function, we find that Premier Wen is not controlled by any particular entrepreneurial group or special interest. Recall that he is appointed to his job. No messy elections in China. Furthermore, his major focus and and purpose as Premier is the well-being of China, not the benefit of some particular industry or special interest or other. In the USA our government leaders are forced to "make deals" with the powerful. To stay in office they must collect huge sums to stuff their "war chests" and to keep the "big guys" happy so as to prevent a election primary-challenge from a well-heeled, corporate-supported alternate candidate. That's how the wealthy heads of large corporations such as the big oil and gas industry--among others--maintain control of their boys in Congress. Decisions about legislation concerning oil and gas, our national power sources, electrical generation and similar questions are made with the representatives of those industries at our Senator's and Congressman's elbows and sometimes in the Whitehouse Oval Office.

What has this cozy relationship with the oil and gas industry gotten us--the average citizen and taxpayer? Over the last half century our nation has made various decisions either instigated or modified for the betterment of the powerful oil and gas industry. For example, the decision to expand our interstate roadways and maximize our dependency on gasoline-driven trucks at the expense of our (now outdated) rail system, is one decision made during the Eisenhower Administration. More recently we have put the development of solar power, wind, geothermal, tidal, and hydroelectric on the back-burner while we support politically, by foreign policy and with financial aid and tax incentives an industry which imports and exploits expensive and increasingly scarce and expensive oil and gas. The decisions made were with the major oil industry magnates and their political power brokers in mind. Wen Jiabao, the Chinese Premier, does not have such restrictions,controlling his decision making process when he must plan for China's future on a warmer globe.

Perhaps that is why, if we were looking for the Premiere of China last week, we would have found him in Iceland! Iceland? What in blazes was he doing there?

Iceland is a Nordic European nation, about the size of modern day Austria, located in the North Atlantic about six hundred miles northwest of Scotland (and about 1300 miles east of Quebec),it is situated about 64 degrees north latitude or just two degrees south of the Arctic Circle. It was originally settled by Europeans in the 9th century AD and now has a population of about 320,000. The Icelanders are settled mostly on the southern coast of this volcanic island which formed on the crest of the underwater Mid-Atlantic Ridge. The island covers an area of about 40,000 square miles (103,000 sq km). Iceland has a (estimated 2011) GDP of about $12 billion dollars, and a per capita GDP of about $38,000.

Of what interest could Wen Jiabao have in icy cold, isolated, dark-in-winter, snowy Iceland? Since Wen is not forced by his supporters or his competitors to deny and denigrate global warming, or climate change concepts, he can actually plan for these exigencies for China and embrace the idea. He can ready China for the change in the global weather and climate of the coming decades. His head is not buried like Pliny's Ostrich in the African sand, with the other Republican science-deniers. So he can go to Iceland, with his checkbook in his vest-pocket which, to an island in an increasingly warmer and ice-free North Atlantic Ocean which will likely play a larger role in world trade.

Yes on April 20, 2012 Wen Jiabao arrived in Reykjavik, the capital of Iceland. Wen is the first Chinese premiere to visit that island-nation in 41 years. According to the Communist News Service, Xinhuanet, China is Iceland's biggest trade partner in Asia. China sells coke (a form of soft-coal), textiles, and manufactured goods to Iceland, while China imports Iceland's excellent and abundant marine fish. According to the China News Service, Wen is interested in bilateral ties and exchanges with Iceland as well as cooperation in geothermal energy, scientific research, polar studies and other matters. One of the "other matters" he might wish to discuss is the controversy regarding the acquisition of a huge chunk of coastal land by a "private Chinese citizen". The sale is presently "on hold" due to legal objections raised by some in Iceland. But the wealthy Chinese investor is continuing to pursue the sale and may have enlisted the Chinese Prime Minister in his plans. Some say the acquisition is for a future Chinese naval base. Some of the Icelanders and other North European countries are curious, suspicious and worried. What plans do the Chinese have for the North Atlantic and the Arctic?

What plans indeed? According to Reuters (See "China's Wen in Iceland", by Mia Shanley, April 20, 2012) Iceland certainly can use an infusion of China's copious cash horde. Iceland's banks were deregulated in 2000, and then were privatized. They invested heavily in American collateralized debt obligations (CDOs) and went into default with many failing after September 15, 2008 when Lehman Brothers collapsed, followed by the rest of the world. Perhaps Wen is there to underscore the fact that China was not affected by the Great Recession initiated by greed, malfeasance and excesses of the American banking and financial sector of 2007-2008. Perhaps it is the Icelanders weak financial position, a circumstance that cash-rich China might profit from. Then there is the suspicions of Beijing's hunger for natural resources. According to author Shanley, Icelanders see a wider strategy in Wen's visit, perhaps to gain a foothold in the Arctic. Wen is also interested in developing geothermal energy for domestic and industrial use. In this regard, Iceland's Orka Energy and Sinopec Group signed a deal to develop this "clean green" source of geothermal energy in China for house heating and production of electricity.

According to the Reuters piece, climate change is causing the Polar ice to thin remarkably fast in the region, suggesting to the Chinese that there may be opportunities in the Arctic and North Atlantic for the alert and savvy. Present estimates by polar scientists and climatologists, foresee an ice-free summer-season in the Arctic by 2040, or less than three decades away. Not a bad lead time to set up a base of operations in available, financially needy, Iceland. An Arctic which is free of the polar ice cap in summer or simply ice-free enough for shipping, could slash the time it takes to move Chinese manufactured products from the Asian mainland to ports on the east coast of North America by well over a week. Raw materials could just as easily move the other way from North America to China via the same short Arctic route. That would enormously reduce transport costs, and eliminate expensive transit fees and fuel costs for going the long way through the Suez Canal.

Global warming could be a boon to Chinese industry, opening up whole regions and shortening travel times to existing client ports.

For those national leaders, with minds open to modern science and the real world, who are free of control by reactionary special interests, the future can look bright. China has seen an opportunity in our own back yard which some of our leaders have ignored, or resisted as contrary to their Party's existing ideology, or they simply decided to do what was politically expedient. As a great nation, we need great leaders to direct our path toward what is good, not just for the connected, well-heeled few, but for our nation as a whole.

Sadly, here in America we are still fighting over cultural issues generated to obfuscate and divide the electorate, such as contraception, abortion, women's rights to control their own bodies and even global warming. These are issues other industrial western democratic nations have settled long ago, and they have now set out to reap the future. Are we going to remain in the 1950s while the rest of the world passes us by? While the Chinese move into our own backyard and set up house?

Is our political system so outdated and hidebound that we are no longer flexible enough to meet the challenge or able to effectively deal with new circumstances and threats to our well-being? Is the Chinese system better? I think not. Let us not give credence to the political dinosaurs in our midst, who would call us back into the Mesozoic Era. That Era is gone and the saurians who had adapted to it are all extinct too--since those times and conditions have changed. We must change too or face extinction with them.

Get the picture?

rjk

LOST IPHONE FOUND

When I went for my iPhone holster and found it empty, I panicked. Whoa? "Where's my iPhone?"

I asked, speaking to myself, as I frantically grabbed at my belt, and punched my hands deep down into my empty pant's pockets several times-over as I unsuccessfully felt for a small, flat rectangular object. My iPhone was missing. I literally eat, sleep, rest, bathe, and do most everything else with this modern marvel of technology near at hand. The iPhone has taken the place of my radio, TV, small computer, dictionary, encyclopedia, thesaurus, language translator, news source, camera, jogging-route recorder, pedometer, compass, and besides that it is a communicator extraordinaire, and of course, a hand-held telephone too! This general electronic marvel is always at hand. It has become something between a mechanical robotic "Jeeves" and a third hand. It is always on my belt, or if not there on my night-stand. (PS, I would not want to see a bacteriological report on swabs taken from its surface. It must have a complete and thriving colony of body germs and viruses. I do give it a scrub-off every now and again with an antiseptic wipe. But I do it carefully.)

It was a busy unusual day, when I attempted to pull my IPhone 4 from its hard-box holster to begin my exercise for the day. I use my "Map-my-run" app to record each walk and run. But it was was not there. Mentally, I quickly ran down my early-morning schedule. I recalled taking it downstairs to the breakfast table where I read the morning news. The NY Times, UK Guardian, le Monde, Huff Post and Real-Clear Politics. I remembered some of the morning stores about the Romney candidacy, Afghanistan and the economy. So I knew I had it in my possession at home. I also recalled being disturbed from my morning electronic-read at that time by the frantic barking of our Jack Russell terrier, Milo. Milo is a ten-inch high canid with the temperament and self-image of three foot high, 90 pound Pit Bull-Mastiff-cross breed. My fear was that his vocalizations were the consequence of him chasing the mailman or a delivery man across the lawn. He has been known to chew at the ankles of these "interlopers" into his domain, which more than once has resulted in financial and legal difficulties for me and pain for the mailman. So I clearly recalled pushing off from the table, and with night-clothes and bath robe flying in my slip stream, I ran off to intercede on behalf of the mailman and protect him or her from torn trouser-bottoms and bloody ankles.

Outside, the barking had stopped. But I spotted the little brown and white dog slowly and silently stalking a delivery-man who had parked his truck near our house. The unwary person had stopped and turned around to face his pursuer. Aware of what was going to happen, I raced across the lawn, caught up with the tiny dog, scooped him up just as he was ready to bite down into the proffered hand of the innocent painter-contractor who was unthinkingly attempting to befriend this miniature canid whose evil intentions were to draw blood. I smiled at the man, waving with one hand, as I tucked the snarling and growling little beast under my robe with the other, then marched off back across the lawn.

That was just the beginning of a hectic day. Our regular schedule including a leisurely morning three-mile walk, home for breakfast, a few hours of writing and paperwork, light chores, lunch and relaxation prior to light entertainment and preparation for an early dinner, had deteriorated on this day into collecting grandkids for school, shopping, a short stopover in the barbershop, then picking kids up from school, and general transportation and baby sitting services. By late afternoon my wife and I were tired and cranky. I needed a good walk to clear my head. That's where I was when I discovered the iPhone was missing.

I unpacked all the contents of my "marine ditch bag" which is where I keep all my valuables between "docking" in at home at night and rising from the bunk in the morning. A thorough search of bedroom, kitchen, family room, etc., etc. revealed no IPhone. Calling the iPhone from our home telephone resulted in no corresponding ring from the missing instrument. We investigated the car, the basement the attic, the clothes dryer, the clothes hamper, the toilets. No iPhone. I checked for it in my workshop in our back yard. While I was out there F.... called the iPhone and I listened for it. No response...no instrument. I retraced my steps of the entire morning to the time I had returned. Then thinking of my movements out side of the house, I recalled my short visit to Giovanni's to have my hair cut.

I called the barber. "Giovanni, did you see a phone in the shop today?"

"Yeah, I gotta the phone."

"You found the phone there?" I asked excitedly.

"No, I gotta da phone. Número 638-7768. You call me to make appointsament."

"No, no, no. I lost my phone."

Finally, realizing his confusion, I tried speaking loudly into the receiver, saying slowly "Ho----perduto----mio telefono."

"Ahaa, "gats in goul," cursed the barber, sorry for time wasted and embarrassed he did not understand all at the same time.

"No, sorry, I seen no phone here, Mista Bob."

"In desperation F.... tried calling the IPhone again. We listened carefully, for it's ring. Expecting the sound to be faint and far off, perhaps buried under some pillow, in some dusty dark place in the house, as it rang, I tallied the rings up, one,.....five.....six. I strained my ears to listen for the faint ring. But then some one answered!

"Hullo?"

"Who's this?" demanded F....sternly.

"Hullo?" It was a confused gruff voice.

"Look, whoever this is, if you found this phone, you better return it to...." retorted F forcefully.

The person on the other end did not reply. The only sound was the clatter and click of the receiver as it was slammed down on the other end.

"Someone found it and is planning to wipe its data off and use it for themselves," concluded F.... angrily as she sat down heavily in the chair next to me.

"I bet you lost that phone in the barber shop, and some creep from Port, instead of turning it in, picked it up and now they are planning to use it."

"I don't know about that...I'm not so sure..." I stammered, thinking of the spartan metal chairs in Giovanni's shop and the hard tile floor.

"I know, I'll call K..., (our youngest, most tech-savvy daughter) she will know what to do when some one steals your phone."

"Wait! We don't know yet if the phone is stolen."

"Didn't you hear that call?"

"Yeaa ....yes."

"It 'was' lost. Now it's stolen."

F called our daughter K, who advised us that we should immediately call AT&T to cancel the phone account, so that no one could use it to make long distance calls and run up our bill. F duly made the call and cancelled the account.

At this point, I began trying to think positively about the loss. After all, the case was scratched. A fine hairline crack appeared in the back cover after that fall I had in the winter. I could use more memory. The new iPhone five was coming out soon. Good reasons for a change were piling up. I was actually not too sad about the loss. Of course I didn't know at that time of the $300-$500 tab for a replacement.

K called back. "Dad, you do have the "Find My Phone" app on that phone don't you?

"Yes, I do, but don't worry so much about it. I'm sure it will show up soon."

I was thinking now about the new IPhone 5, and was becoming inured to the idea of my loss.But she did not seem to believe me.

"I'll call back," she said determinedly.

We sat around gloomily for a little while. I was thinking of how I was going to replace all the contacts and other data I had lost, and F.... began thinking of the replacement costs.

Just then the house-phone rang again.

It was my daughter K.

"I texted your phone, and sent this message," she said. The message read: "This telephone does not belong to you. Return it immediately to where you found it and call this number......"

"Oh that's a good idea, but Mom has just cancelled the account on that phone."

"Good, I'm glad she did that. But I've got another idea. I'll get back to you right away."

Some time passed as we waited.

The house-phone rang again. It wa K again. "I contacted your phone using my computer and your "Find My IPhone" app." said excitedly.

"Dad, the map I see here on my computer indicates that your phone is at your home address! It is somewhere in your house or on your property."

"So no one took it? We didn't have to cancel the account number?" I asked incredulously. What about the guy who answered the call?"

"No! Mom probably called the wrong number and got someone confused. Gotta go, call you back."

A few minutes later the home phone jangled again. It was K.

" I have a 'Find My IPhone map' of your place on my computer now," she said excitedly. " The map shows that the phone is in the backyard near your fence."

F grabbed our home phone from my hand and excitedly scuttled out into the backyard with the receiver pasted to her ear. As she walked, she spoke to K, who directed her toward the corresponding place where the little blue dot was glowing on K's computer screen.

From the kitchen, I watched F move toward a big clump of our emerging day-lillies near our back fence. I had actually been there earlier in the day and that fact raised my hopes of finding the phone. F pressed the tangled leaves apart, but could find nothing. She came back into the kitchen waving the house phone at me.

"Just a false alarm! It's not there. I still think someone took it."

We sat down at the kitchen table. By this time we were exhausted physically and mentally. We had missed our dinner and had been actively searching for several hours. I was ready to give up.

The home-phone rang again. "You want to get that?" I begged, burying my head in my hands and resting my elbows on the table.

" It's K! She has a better map, and has found a way to make the phone ring." said F.

"But the signal is turned off. We shut that number down," I responded. To myself I sounded like a quitter and non-believer in advanced modern technology. But I was real tired now.

"She says that doesn't matter, as long as the battery is charged."

She handed the phone over toward me. I backed away. "I'm too tired. Please, you do it," I said, resignedly.

With the telephone at her ear again, F returned to the task of taking directions. K moved her now toward the front yard, but on the same side of the house as she had been searching before. I wearily watched through the front window as K indicated where the little blue dot was appearing on her map at her computer station as she directed her mother this way and that toward that spot on the ground.

With the phone at her ear, I realized that F was slowly walking toward the grassy path that I had been over earlier in the day when I chased Milo to protect the deliveryman. A light went onin my head. Perhaps that was when and where I dropped the IPhone?

"Wait, I hear something," said F, excitedly. " It's a steady humming sound," she said into the receiver. "Make it louder," she requested.

K responded over the phone."Oh, you can't, I thought 'you' were controlling the sound."

A pause in the conversation occurred here, as F crept along the grassy path.

"The ring is louder," she called out.

"Oh there it is, right on the grass."

My iPhone was recovered!

AT&T quickly and easily restored my number and in a few minutes I was back in operation.

I learned a few things. It might be a good idea to have (and use) your security code. It can prevent loss or compromise of our personal data in case you loose your iPhone someplace where it can be found by some unscrupulous sorts. The "find my iPhone app" works. So it should be installed on your iPhone too. Finally, one must marvel at our modern technology which we have available on hand.

Get the picture?

rjk

When I went for my iPhone holster and found it empty, I panicked. Whoa?  "Where's my iPhone?" I asked, speaking to myself, as I frantically grabbed at my belt, and punched my hands deep down into my empty pant's pockets several times-over as I unsuccessfully felt for a small, flat rectangular object.  My iPhone was missing.    I literally eat, sleep, rest, bathe, and do most everything else with this modern marvel of technology near at hand.    The iPhone has taken the place of my radio, TV, small computer, dictionary, encyclopedia, thesaurus, language translator, news source, camera, jogging-route recorder, pedometer, compass, and besides that it is a communicator extraordinaire, and of course, a hand-held telephone too!   This general electronic marvel is always at hand.   It has become something between a mechanical robotic "Jeeves" and a third hand.  It is always on my belt, or if not there on my  night-stand.  (PS, I would not want to see a bacteriological report on swabs taken from its surface.  It must have a complete and thriving colony of body germs and viruses.  I do give it a scrub-off every now and again with an antiseptic wipe.  But I do it carefully.) It was a busy unusual day, when I attempted to pull my IPhone 4 from its hard-box holster to begin my exercise for the day.  I use my "Map-my-run" app to record each walk and run.   But it was was not there.  Mentally, I quickly ran down my early-morning schedule.  I recalled taking it downstairs to the breakfast table where I read the morning news.  The NY Times, UK Guardian, le Monde, Huff Post and Real-Clear Politics.   I remembered some of the morning stores about the Romney candidacy, Afghanistan and the economy.  So I knew I had it in my possession at home.  I also recalled being disturbed from my morning electronic-read at that time by the frantic barking of our Jack Russell terrier, Milo.  Milo is a ten-inch high canid with the temperament and self-image of three foot high, 90 pound Pit Bull-Mastiff-cross breed.  My fear was that his vocalizations were the consequence of him chasing the mailman or a delivery man across the lawn.  He has been known to chew at the ankles of these "interlopers" into his domain, which more than once has resulted in financial and legal difficulties for me and pain for the mailman.  So I clearly recalled pushing off from the table, and with night-clothes and bath robe flying in my slip stream, I ran off to intercede on behalf of the mailman and protect him or her from torn trouser-bottoms and bloody ankles. Outside, the barking had stopped.  But I spotted the little brown and white dog slowly and silently stalking a delivery-man who had parked his truck near our house.  The man had stopped and turned around to face his pursuer.  Aware of what was going to happen, I raced across the lawn, caught up with the tiny dog, scooped him up just as he was going to bite into the proffered hand of the innocent painter-contractor who was unthinkingly attempting to befriend this mighty-miniature canine whose evil intentions were to draw blood.  I smiled at the man, and waved with one hand, as I tucked the snarling and growling little beast under my robe with the other and marched off back across the lawn. That was just the beginning of a hectic day.   Our regular schedule including a leisurely morning three-mile walk, home for breakfast, a few hours of writing and paperwork, light chores,  lunch and relaxation prior to light entertainment and preparation for an early dinner, had deteriorated on this day into collecting grandkids for school, shopping, a short stopover in the barbershop, then picking kids up from school, and general transportation and baby sitting services.  By late afternoon my wife and I were tired and cranky.  I needed a good walk to clear my head.  That's where I was when I discovered the iPhone was missing. I sought out my "marine ditch bag" which is where I keep all my valuables between "docking" and rising from the bunk in the morning.  A thorough search of bedroom, kitchen, family room, etc. etc. revealed no  IPhone.  Calling the iPhone from our home telephone resulted in no corresponding ring from the missing instrument.   We searched the car, the basement the attic, the clothes dryer, the clothes hamper, the toilets.  No iPhone.  I checked for it in my workshop in our back yard.  F....  called the iPhone while I was out there.  No response...no instrument.    I retraced my steps all morning to the time I had returned.  Finally I called my barber.  "Giovanni did you see a phone in the shop today?" "Yeah, I gotta the phone." "You found the phone there?" I asked excitedly. "No, I gotta da phone. Número 638-7768.  You call me to make appointsament?" "No, no, no.  I lost my phone.". Then I tried speaking loudly into the receiver, saying slowly  "Ho----perduto----mio telefono." "Ahh gats en goul," cursed the barber, sorry and embarrassed he did not understand all at the same time.  "No  sorry, I seen no phone here." In desperation F.... tried  calling the IPhone again. We listened carefully, for it's ring.  Expecting the sound to be faint and far off, perhaps buried under some pillow, some place in the house I tallied the rings up, one,.....five.....six.  I strained my ears to listen for the faint ring. But then  some one answered!   "Hullo?" "Who's this?" Demanded F....sternly.  "Hullo?" "Look, whoever this is, if you found this phone, you better return it to...." retorted F forcefully. The person on the other end did not reply.  The only sound was the clatter and click of the receiver as it was slammed down  on the other end.  "Someone found it and is planning to wipe its data off and use it for themselves," concluded F.... angrily.   She sat down in the chair next to me.  "I bet you lost thats phone in the barber shop, and some creep from town, instead of turning it in,  someone picked it up and now they are going to use it." "I don't know about that...I'm not so sure..." I stammered, thinking of the spartan metal chairs in John's shop and the hard tile floor.   "I know, I'll call K..., (our youngest, most tech-savvy daughter) she will know what to do when some one steals your phone." "Wait!  We don't know yet if the phone is stolen." "Didn't you hear that call?" "Yeaa ....yes." "It 'was' lost. Now it's stolen." F called our daughter  K, who advised us that we immediately call AT&T to cancel the phone account, so that no one could use it to make long distance calls and run up our bill.   F duly made the call and cancelled the account.  At this point, I began trying to think positively about the loss.  After all, the case was scratched.  A fine hairline crack appeared after that fall I had in the winter.   I could use more memory.  The new iPhone five was coming out soon.  Good reasons for a change were piling up.  I was actually not too sad about the loss.  Of course I didn't know at that time of the $300-$500 tab for a replacement. K called back.   "Dad did you have the "Find My Phone" app on there?  "Yes, but don't worry, so much about it. I'm sure it will show up soon." I was thinking now about the new IPhone 5, and was becoming inured to the idea of my loss. But she did not seem to believe me.  "I'll call back," she said determinedly We sat around gloomily for a little while, I thinking of how I wass going to get around replacing all the contacts and other data I had lost, and F.... began thinking of the replacement costs.  Just then the house-phone rang again. It was my daughter K. "I texted your phone,  and sent this message," she said.  The message read: "This telephone does not belong to you.  Return it immediately to where you found it and call this number......"  "Oh that's a good idea, but Mom has just cancelled the account on that phone." "Good, I'm glad she did that. I've got another idea. I'll get back to you right away." Some time passed as we waited. The house-phone rang again. "I contacted your phone using my computer and your "Find My IPhone" app." she said excitedly.  "Dad, the map I see here on my computer,  indicates that your phone is at your home address!  It is somewhere in your house or on your property." "So no one took it?  We didn't have to cancel the account number?" I asked incredulously.  What about the guy who answered the call?"  "No! Mom probably called the wrong number.  Gotta go, call you back." A few minutes later the home phone jangled again.  It was K.  " I have a 'Find My IPhone map'  of your place on my computer now," she said excitedly. " The map shows that the phone is in the backyard near your fence." F grabbed the home phone from me and excitedly scuttled out into the backyard with the receiver pasted to her ear.  As she walked she spoke to K, who directed her toward the corresponding place where the little blue dot was glowing on K's computer screen.    From the kitchen, I watched as F move toward a big clump of emerging day-lillies near our back fence.  I had actually been there earlier in the day and that fact raised my hopes of finding the phone.   F pushed the tangled leaves apart, but could find nothing.  She came back into the kitchen waving the house phone at me.  "No, just a false alarm!  It's not there. I still think someone took it." We sat down at the kitchen table.  By this time we were exhausted physically and mentally.  We had missed our dinner and had been actively searching for several hours.  I was ready to give up. The home-phone rang again.  "You want to get that?" I begged, burying my head in my hands and resting my elbows on the table. "It's K! She has a better map, and has found a way to make the phone ring." said F.  "But the signal is turned off. We shut that number down," I responded.  To myself I sounded like a quitter and non-believer in advanced modern technology.  But I was real tired now. "She says that doesn't matter, as long as the battery is charged." She handed the phone over toward me. I backed away.  "I'm too tired.  Please, you do it," I said, resignedly.  With the telephone at her ear again, F again began taking directions.  K moved her now toward the front yard,  but on the same side of the house as she had been searching before.   I wearily watched through the front window as K described where the little blue dot was appearing on her map at her computer station as she directed her mother this way and that toward that spot on the ground. With the phone at her ear, . I realized that F was slowly walking toward the path that I had been over earlier in the day when I chased Milo down.  A light went on.  Perhaps that was when and where I dropped the IPhone? "Wait, I hear something," said F, excitedly. " It's a steady humming sound," she said into the receiver.  "Make it louder," she requested.  K responded over the phone. "Oh, you cant, I thought 'you' were controlling the sound." A pause in the conversation occurred here, as F crept along the grassy path. "The ring is louder." "Oh there it is, right on the grassy path." My iPhone was recovered!  AT&T quickly and easily restored my number and in a few minutes I was back in operation.   I learned a few things.  It might be a good idea to have and use your security code.  It can prevent loss or compromise of our personal data in case you loose your iPhone someplace where it can be found by some unscrupulous sorts.   The "find my iPhone app"works.  So it should be installed on your iPhone too.  Finally, one must marvel at our modern technology that we have available on hand.   H " "No, you, loosa someting?" "Yeah, John, it was a small telephone, an IPhone." "No soreee, I see no ting?"

YOU CAN'T SHRINK THE ECONOMY OUT OF EXCESSIVE DEBT

So stated George Soros, at a discussion on the economic crisis in the EU in Copenhagen, Denmark on Monday ( April 16, 2012). The billionaire Hungarian-born, US citizen, hedge-fund operator, philanthropist, author and economist, was born in Hungary in 1930, and is a graduate of the London School of Economics. He is chairman of the Soros Management Fund, and developer and proponent of the economic concept of "reflexivity" used to predict responses of markets to various stimuli. Soros is also the 46th richest man in the world (at $22 billion US dollars) and the author of many books on politics and economics.

As reported in Reuters (April 16, 2012) Soros believes the crisis in the Eurozone is deepening. The financial crisis is sadly the cause of tension within the zone that may ultimately fracture the cohesion that formerly was a characteristic of inter Eurozone national relations. He indicated that the policy makers in Europe see the problem as a fiscal crisis caused by spending profligacy and failure to keep firm fiscal balance. The wealthy, stolid Germans who abhor inflation above all, mostly blame the "fringe nations" of the zone such as Spain, Portugal, Greece and Ireland. They argue that their spending habits, and taxing timidity has resulted in burdensome national deficits and rising interest on debt...making further borrowing almost impossible. But Soros insists the policy makers are misapprehending the problem. According him, this crisis was caused not by the Europeans, but by a failure of the American banking system and the collapse of the housing bubble in the USA.

The way this author sees it, the problem seems analogous to the situation in the 1930s when most western nations were enmeshed by the gold standard. When the economy tanked, a government response was needed, but with gold backing their currency there were few options. At the present time, the problem lies with the euro. The global crisis has exposed the divergent levels of competitiveness within the EU, and the inability of the less competitive states to control the value of the European common currency-the euro. The compact among the 25 EU members obliges them to balance their budgets and reduce indebtedness, but this is the wrong time for that solution. Shrinking government expenditures to deal with debt just shrinks the economy. The problem now for the Euro zone is low demand, scarce jobs, and decreasing cash in circulation. A growing economy is needed. George Soros states succinctly:"You can GROW out of excessive debt, but you cannot not SHRINK out of excessive debt". Thus with the reduced demand for goods and services as characterized by the present economy..the prescription of austerity and forced debt-reduction is only making the problem worse..deepening the recession, expanding joblessness and shrinking the economies of the 25 member nations. But since fiscal stimulus was ruled out--he said--monetary policy remained the only tool available.

Today as I write this, I learned that Suffolk County has for the first time in its history, laid off 450 full time workers at one time. Later in the day, I passed in front of my favorite fresh fish store in lower Port, it was closed. Its front windows pasted up with big red "For Sale" signs. A little further down the East Main a favorite watering hole, "Lenny's" cafe and pub has closed its doors. The people here in the USA are struggling as the economy sputters rising and settling by fits and bursts. But our government's response HS been confused and ineffective.

Soros' warning and prescription for the EU is directly related to the present situation with the US economy. Neither can WE shrink out of our indebtedness. We can only grow our way out. But the Republican Party's only plan is to cut spending on "entitlements" and cut taxes for the wealthy (they like to misrepresent these elites who stash funds overseas as "the job creators") and slash government spending and services for the rest of us. Some of their prescriptions are draconian. (See the much Republican-touted proposed Ryan budget which cuts government spending by trillions of dollars over the next decade. Those trillions of dollars will not be "saved" for private investment in the USA, since the private sector is not generating new jobs. Those dollars are sucked directly out of the US economy, at a time when private sector growth is weak and demand is low. The result is, layoffs, business failures, closed stores which are snuffing out job-growth and staunching economic stimulus just at a time when we need it most. Nelson the fishmonger in lower Port is now out of work, he is not putting any new funds into circulation. Those 450 now-unemployed Suffolk County workers will not add to our local economy. They will not buy a new car, a TV, or contract for services from our local small businesses. In these circumstances government must act to prime the pump when the private sector can not. Government must help us grow out of our nation's excessive debt...with appropriate lending and spending (as now, when interest rates are near zero).

This idea that we must grow out of excessive debt, is not new knowledge. Economists have used the past to study the causes and effects of the Great Depression for the last seven decades. Soros as well as most Republican economists know quite well what should be done. So why do the Republicans in Washington persist in pursuing a policy of slash and burn on spending, emphasizing a frugality they never had or espoused when G. W. Bush was spending profligately (on unnecessary, unwise and unfunded wars of choice) as he grew our debt and deficit? These Republicans surely know (cutting spending and lowering taxes on the corporatists) will not improve our economic situation.

Could it be that they really do not want the economy to improve? Perhaps this policy suits their perverse political goal of unseating President Obama at all costs. An alternate insidious strategy may may be that they see the economic situation as a useful means to advance their long-term goal of dismantling the meager social security safety-net we have in this country. Having taken to heart Rham Emanuel's utterly pragmatic (nay Nicolo Machiavellian) quote: "Never let a good crisis go to waste." They are acting on it to use the present crisis as an excuse to dismantle the vestiges of the old FDR, Fair Deal and New Deal they so hate.

Or are they continuing to pursue the policy of late Republican strategist Lee Atwater's infamous "southern strategy" where-in during election campaigns the Republicans substituted innocent sounding "code words" for other actual malicious concepts. According to Atwater (loosely quoted here) : "You can't use the "n" word no more ( in the south) because it hurts you politically. So now you have to use words and terms that get the same emotional response like 'cuts to food-stamp spending', and 'decrease to medicaid' and other threats to similar social welfare spending because your southern electorate knows it hurts the blacks more than the whites."). So could it be that these recent Republican "talking points": "cut spending, "decrease government size", "cut the deficit", "cut entitlements" are simply the new code-words for the old "n" word. Thus, the Republicans who are after-all a political party which serves the interests only of a very small but powerful and wealthy minority in this nation have had to misrepresent themselves to Americans who have little to gain from the actual agenda of the Republicans. To this end, they have used the same old methods of division, bigotry, misrepresentation and untruths they have used for the last many decades to garner from the mass of the American electorate an electoral majority. The sad truth and a tribute to their duplicity is that they have been so successful over the years in duping the American people.

Get the picture?



rjk

SPRING WALKS, PILES AND FIG BUTTERCUPS

On our early spring walks here in Miller Place, New York, we have been admiring the lovely Fig Buttercup, (Ficaria verna, formerly Ranunculus ficaria) an invasive species of the Buttercup (Ranunculus) family which in early spring often forms a continuous carpet of green speckled with bright yellow flowers. This European native arrived here as an escape from commercial potted plants, and has established itself in much of the northeast USA. It has interesting and unique names such as Lesser Celandine, Celandine Poppy, Smallwort, and Pilewort. The names associated with this plant are varied, some are related to its early flowering, or habitat, others with its flower colors, and some with its potential as a medicinal plant. For example, the term "celandine" is derived from the Latin "chelidonia" which means "swallow". The early-blooming plant was probably associated with the arrival of swallows in spring. While "ranunculus" its genus name (Ranunculus) is a Late-Latin term for "little frog" derived from the Latin "Rana" the frog, a likely reference to the fact that many of this species prefer wet areas where small frogs might be encountered. I suggest that the "fig" reference may be to the shape of the pale gray or white tubers on the roots which look to some like small elongate figs. The term "pilewort" suggests the plant may have been thought to have medicinal qualities, as a treatment for hemorrhoids or piles.

The Pilewort appellation is no doubt derived from the fact that when the plant is unearthed it's root ball appears to consist of a cluster ball of pendant, pale-colored tubers. While some saw these fleshy root-like structures as "figs" others (perhaps some who were suffering with this painful condition) saw them as engorged hemorrhoids. In the early days of plant discovery, but particularly in the 15th and 16th centuries, herbalists, physicians, and alchemists sought medicines to cure illness from substances and plants in nature. The thinking of these early natural scientists was that God created man to sit at the pinacle the terrestrial pyramid and places all of Nature's bounty for man's betterment and use at his or her feet. They reasoned too, that God had created both human diseases and their cures! Thus the medicine to treat human ailments would be found in Nature's bounty. One of those who believed this, and wrote most effectively,and at the time comprehensively, about plant medicines was a German physician and herbalist, one Theophrastus Von Hohenheim (1491-1549) who was best known by his pen name "Paracelsus".

Paracelsus, who was not the first to suggest this idea, coined the term "Doctrine of Signatures" which stated that the shape, color, fragrance, taste, etc., etc., of a plant may be a sign from God of that plant's usefulness as a treatment for a disease. In the case of the Fig Buttercup, or Pilewort, the hemorrhoid-shaped root tuber was the sign or indicator that this plant would be useful in treating that ailment.

Modern science does not agree. Though there are some plants, such as the Fig Buttercup (Pilewort) that do appear to have some salutary effects on the ailments which they were named after. In the case of the Pilewort, decoctions and poultices of this plant are claimed to have a measurable beneficial effect on hemorrhoids, probably due to high concentration of tannins which act as an astringent to shrink the engorged veins. Science tells us that this effect in the Pilewort is happenstance and coincidence, and many other plants without the little tubular roots but high tannin concentrations would do just as well. But try and convince someone of that.

The Fig Buttercup is a low-growing attractive, spring ephemeral which sprouts late in winter or very early spring then blooms in March and April around here. It brightens patches of roadside and barren lawns with its glossy green, heart-shaped or rounded basal leaves and bright yellow flowers. Each flower consists of eight or twelve intensely-yellow shiny petals with a central cluster of darker yellow anthers and stamens. The flowers start out more orangey-yellow, then change to a bright intense yellow. Some exhibit white or blanched petals. The petals close at night and tend to open in the bright sunlight. The Fig Buttercup completes its life cycle early in the spring before the leaves on the trees under which it lives have sprouted and block out intense sunlight. This habit of early and expansive rapid growth tends to inhibit competition from other spring plants. The devotees of native species such as Dutchman's Breeches, Bluebells, Bleeding Hearts etc. see this new-comer as a pest and invasive to be exterminated. But since this hardy plant prefers sandy soils so common here on Long Island, it often occupies barren areas which without this "pest" may have no growth at all. So perhaps for that reason we are a bit more tolerant of its rampant growth. Though I do pluck it out of my own flower garden when I find it there.

Pulling the plants up when they appear in the early spring to control them, one will notice the small pale-gray or white tubers within the root ball as noted above. These are the "figs" which likely give this plant its common name. The small finger-shaped tubers are its means of vegetative reproduction and thus the source of the new plants of this species which appear again and again in your garden after you have labored to pull many others up. To prevent the Fig Buttercups from returning, you must get all of the little tubers. In nature, the plant is dispersed by soil disturbances and by the budding off of new plants from the tubers. The digging activity of small animals which unearth the tubers no doubt spread the plants too. The unearthed tubers perhaps, as a result of rain, wash down to other lower levels where they sprout to form new plants next season.

The Fig Buttercup may be easily confused with the Marsh Marigold Caltha palustris which it resembles closely. The latter plant is a native of the northeast and prefers low-lying wet places, as it's common name and Latin, species-name both suggest. It leaves are less glossy than the Fig Buttercup and have more indented irregular margins. C. Palustris has yellow glossy flowers but with five "petals" (which are really sepals) which form at the terminus of a branching stem.

As noted above the plant has been used as an antihemorrhoidal for the treatment of piles. The dried plants are commonly sold in Russia for its astringent qualities and this species has even been recently reintroduced into the British Pharmacopoeia for that purpose. Other uses are said to be antifungal and antibacterial. None of these uses have been scientifically evaluated.

rjk

ON CHINESE BUBBLES AND EMPTY LOTS

One of my main memories as a child living in Brooklyn's New Utrecht area was the large number of "empty lots" in our neighborhood. In those days, with few formal parks these unused spaces became our unofficial playgrounds. The block-sized parcels were an archaeological-site-in-formation with weathered, partly-built foundations, old concrete footings, rotting construction materials and piles of excavated soil, all evidences of a building boom gone cold. Here and there were leveled areas, perhaps planned as basement floors, a few of which were taken over by the old men in the area to serve as Bocci courts. In all of the parcels were found the high mounds of excavated red-brown Brooklyn earth, which in summer was covered in a growth of rank weeds. The old foundations and footings became our imaginary battlegrounds where my young friends and I transported ourselves to some of the famous WWII engagements our citizen-soldier fathers, sometimes hesitantly, spoke of. Undreamed of to us at the time, were that these "our empty lots" were the physical remains of a great economic downturn: the pre-Depression housing boom. Most of the abandoned parcels had been planned as sites for houses and stores and remained empty lots for nearly two decades. The growth on the red-dirt mounds progressed from weeds into patches of small trees, until finally, when I was well on into high school in the early '50s, construction finally resumed on some of the parcels. Thus lingered on the effects of the housing bubble of the Great Depression.

The great housing bubble of our times-2007-2008--the one I term the "Chinese Bubble" is a still collapsing. It has caused enormous pain and disruption to the middle class and changes in our economy and our society, with ramifications beyond mere house prices. And based on past events this housing bubble, like the one of the 1930s will likely take nearly a decade to run its course.

I read today in the news that housing prices are still falling in all areas of the nation. Prices of homes reached their peak in 2005 and since then have declined continuously, loosing on-average about one-third of their value. According to John Schoen, in a piece broadcast late last month ( Feb 22, 2012) on "The Bottom Line" (MSNBC), home sales are down below the "healthy level" by one and a half million units. Prices were down again in January by 2.2 % . Though the economy is showing some tentative signs of rebound, the housing market has not shown much change.

The reasons for this are several. First, there is apparently no-end to home bank-foreclosures, which have been steadily rising since 2009 and rose again in January to 35% of the market, from 32 % the previous month. Of course, as these distressed properties are offered for sale they tend to push prices down. The reason for the slow roll out of these homes, referred to as "delayed foreclosures", is that the banks are purposefully controlling the number of foreclosures and the homes they offer for sale so as not to depress their own market and decrease profits on the backlog of homes on which borrowers have defaulted and they have on the books. Put too many houses out for sale at once and the prices fall precipitously.

While the main cause of declining prices is the excess supply of foreclosed homes, there are other reasons for the low demand. According to MSNBCs Schoen, the fall of home prices has left some 12 million owners "underwater" and many of these are young-buyers who are stuck where they are, unable to sell their home for what's they paid for it and so unable to move up to a larger home.

The MSNBC piece also points out that another factor in the decline of house prices is the significant drop in formation of new households over this period. Prior to the Great Recession in 2007, new households were being formed at a rate of about one million a year. That pace has dropped by nearly one half to only about 600,000 new households each year. The reason is falling marriage rates, unemployment rates in the 18 to 34 year old cohort, and the fact that many of these Americans choose rather to double up with friends or remain at home with their parents, and are not buying a home. Then too many of these young people are unemployed or underemployed.

Thus we see the drastic results of the housing bubble: social disruption, economic deprivation, crowding, young-lives altered irrevocably for the worse, years of potential growth lost or wasted. And when will it end? I was born in 1940 while the last housing bubble of the 1930s was still deflating. It took nearly two decades for that cycle to come full circle.

But perhaps if we can establish why this last housing bubble occurred we and our policy makers in Washington might plan to avoid or ameliorate a similar event in the future. (But don't depend on it. Most of our economists, historians, and academics were well-versed in the history of the last Great Depression and subsequent housing bubble of the 1930-1950s. They were certainly capable of warning our banks, investors and government of the threat. But the long stretch of financial expansion in the late 20th century, fueled by low interest rates occasioned by Chinese monetary policies and FED policy, blinded most of those who were too young to have lived through the Great Depression. Myself, I did finally put together the image of the abandoned building lots in my boyhood home-town with the 1930s collapsed housing-bubble and failed economy which produced them. But, I could not sway my partners and business associates. Beside ignorance, greed and an inability to believe history, there were other more powerful causes too, in the form of low interest rates which encouraged excessive and unwise spending. In 2007 my business friends ignored and ridiculed my (doomsday) warnings, being held captive by the happy but erroneous thought that the old rules of "boom-and-bust" were banished by the "new economy" of cheap loans, high profits, controlled risk, bundled mortgages and hedge funds. They were so wrong. I only wish I could have been more persuasive.

But how did it happen? There are a few culprits. But one that hardly ever gets fingered is China. We often blame China for the trade deficit...but not the Great Recession of 2007 -2008 and the housing bubble I call the "Chinese Bubble".

Today China holds some one trillion dollars worth of US Treasury Bonds. Our balance of trade with China is almost all one-sided. The annual trade deficit has grown to about $300 billion annually. The Alliance for American Manufacturing claims that we have lost nearly three million jobs over the last decade. Where did those jobs go? To China. We get their junk goods. They get the jobs.

Here is how it all began and how China was a contributor to our our housing bubble and the continuing house-price decline.

Twenty-five years ago when we opened up trade with China we believed that our industries would profit enormously by selling anything--even shoestrings or toothbrushes to China's 1.3 billion individuals. But somehow that never happened. The Chinese had little money to spend, little desire to spend any they had, a great desire to save, and a possrful appetite for hard work. They turned the tables on us. Their government geared up to export products to expand their economy. They targeted us as one of their main export markets. The Chinese got the trade, we got nothing. They just store their money in our banks.

China has a huge population, and historically it is a potentially restive one. It's Communist government, which plans its economy in detail, has an imperative: keep everyone working and leave politics to the Party apparatchiks. Their plan for maximum employment, economic well being and internal peace and tranquility is called the Chinese model of "export driven economic growth". To maintain political control, the Communist Party simply has to keep every one employed--making things, many, many things and selling these products abroad. Their government is in fact as addicted to manufacturing and exporting, as ours is addicted to huge "defense" budgets, fighting unnecessary and expensive wars abroad, and running big deficits by spending more than we receive in taxes. We are in fact a form of binational duopoly, two very different countries but one hand-in-glove economic unit which controls large parts of the world economy.

But to keep everyone employed they must sell goods and to do so they must keep the prices of their products competitive on the open market. Their products must be cheaper, and nearly as good, as the products of other manufacturing nations. To achieve that goal the Chinese control their currency, pegging it to a value low enough to satisfy their goal. Today one Chinese yuan equals about 16 cents. That low value keeps Chinese goods looking very attractive to companies like Walmart and Target who buy them cheap and resell them at much higher but still competitive prices. This is one good reason why we have such a high trade imbalance with China. We buy their products but how can they buy ours? Imagine our "dollar" being worth only 16 cents when we attempt to buy something in a foreign country. We can not sell most of our our products there because they would be too expensive. The Chinese like it that way, and presumably many of our large businesses like it too. These concerns can maximize profits to shareholders by using cheap Chinese labor and avoiding certain taxes and labor laws they would be subject to were they to manufacture their products here. Of course, American labor, and American communities dependent upon those businesses lose out big time. But our government seems not to care and continues to shower tax benefits on these off shore companies. Why? Perhaps the reason is that these concerns may not pay as much taxes or generate benefits to their local communities, but they still make hefty political donations, which count greatly.

In China a typical firm produces its product for export to the US and other nations, not for the domestic market. A recent podcast on NPR described the finances of a large flooring company --(I'll call it) Jack Woo Floors Inc.--which produces plastic flooring for export. Plastic based flooring is rot-proof, termite proof, fire resistant and easily cleaned and polished. Woo Floors sell in bulk to large US firms. The US dealers pay the Woo Flooring Company in US dollars. But Jack Woo the proprietor can not use US currency to pay his employees' salaries, buy gasoline, rice, or vegetables at the market. Woo brings his bags of US currency to the Chinese Central Bank which accepts it and gives Jack Woo Chinese yuan in return. For every dollar Jack Woo, the flooring magnate, gives the Chinese Central Bank, he gets back 6.25 yuan or RMB. With all the companies in China doing business with the USA, large amounts of American dollars accumulate in the Chinese Central Bank. It must keep the dollars in some secure form. Just hoarding dollars (or other currencies) is not safe or wise, for they may lose value through inflation. What does the Chinese Central Bank (CCB) do with all those foreign funds? The best most secure investment in the world today is US Treasury bonds or "T bills". China's CCB converts much of its foreign cash into US treasury notes. To date, that amount is estimated at some $1 trillion dollars worth of T Bills (some estimate this as higher, more like $1.2 trillion dollars.) The Chinese earn interest on that investment to the tune of about an additional 74 million dollars a year.

What affect does Chinese addiction to export and our addiction to spending at home and abroad have on us here in the USA? For one thing we can buy many cheap products, fill our homes with inexpensive furniture and knick knacks. But it also has an effect on our our central bank--the FED and our economy. Since China is so ready to buy our T bills, because right now they are the safest and best place in the world to put their excess cash, our FED simply has to hold its hand out and accept money. No need to raise interest rates and attract bond buyers. China is right there each year with money in hand. Thus the FED can keep interest rates low because they have a regular customer in China (though US retirement funds, US investment companies, etc. also purchase large numbers of bonds). The US FED has been able to keep interest rates low due to China's need for T Bills as a result of its addiction for export sales.

Low interest rates makes borrowing cheap for the US government, to fund wars without raising taxes for example, but they have their impact here in the US too. It tends to encourage indebtedness and suppresses saving. Why save when you can purchase now and pay later with slightly inflated money? Low interest rates tended to fuel the housing bubble of 2007. With the low interest rates prevalent during the run up to 2007, any Tom, Dick, or Harriet could compete for a house in the open market, not using funds that they had saved, but with funds that a big bank was going to lend them. Thus not only were committed savers, the truly well-off or affluent competing for a property up for sale, but there were hosts of other people (it now turns out many were unqualified purchasers) who were using, not their own money, but a banks promise to lend them money at a low interest rate, competing for the same house. The result was that the prices of homes skyrocketed. That's how a bubble starts and is sustained. The low interest rates encouraged by business interests and business friendly Presidents as well as the steady annual purchases from China kept our interest rates low and tended to fuel the housing bubble. The house-related economy, the construction industry, Jack Woo's flooring, cheap Chinese furniture, and imported building materials all aided and abetted the process, and by 2005-2007 prices of properties were sky high and the peoples' debt burden was massive. That's when the end came.

Thus China's huge population and its need to keep its factories purring, its strategy of keeping the yuan cheap relative to other currencies, and its need to park its huge profits in safe US banks have kept US interest rates artificially low and contributed to the recent housing bubble here--the Chinese Bubble--and encouraged the rise of empty lots where houses might have been built.

Get the picture?

rjk