THE UK RETURNS TO A “GLASS-STEAGALL-LIKE ACT” TO PROTECT THEIR BANKS--THE USA DOES NOTHING.
One major cause of the Great Recession of 2007-8 was the deregulation of banks, successfully pushed by Republicans during the Clinton administration. A Republican mantra since before the Goldwater nomination in the 1960s has always been "too big government" and "too much regulation". They couldn't get their wish to gut federal banking regualtions with wiser, earlier Presidents from both parties. But it was wily, (and politically comprimised) President Clinton who eventually signed the Gramm-Leach-Bliley Act in 1999, a bill that freed investment commercial banks and financial institutions (which issued and sold securities) to own and interact with savings banks (which accepted citizen deposits). The resulting free-for all in our banking and financial sector is often sited as a prime cause of the Great Recession of 2007. (In fact, Nobel Economist Paul Krugman called Senator Phil Gramm, main architect and sponsor of the act, “the father of the Great Recession”).
The Gramm bill overrode most of the safeguards of the 1934 Glass-Steagall Act, a bill written just after the bank failures of the Great Depression to prevent the recurrence of collusion and interaction of high risk, unregulated, financial institutions with retail and savings banks. It was that legislation which over the intervening decades had prevented risk-prone financial institutions from using bank depositor’s savings to make high risk investments. The Gramm bill unraveled those restrictions…providing banks and investors access to vast quantities of savings money to invest in questionable securities and enterprises. There is little doubt that the free-wheeling, no-holds barred, casino-like and risky behavior unleashed by US bankers and their financial collaborators fed the housing bubble and ushered in a near-decade long period of greed and excess which most economists concede was a major factor contributing to the collapse of 2007-8.
But not only did we stupidly let Senator Gramm undermine our banking system's stability, but after the collapse, we added insult to injury by bailing-out those corporations responsible (or irresponsible) for the disaster! Yes, the big banks, financial institutions, and investment houses that generated the problem were awarded bail-out funds to the tune of more than three-quarters of a trillion dollars. Money which came from the pockets of the middle-class taxpayers of this nation--the very ones who have taken the brunt of the economic downturn.
As President Bush (and later President Obama) handed over that money, they foolishly demanded no quid pro quo in return. At that low point, a wise government should have required the system to accede to a reinstatement of those sensible regulations of the 1933 Act. But we did nothing, and since then there has been no appetite for re-regulation of our banking system from either Republicans or Democrats. We continue to remain in dire financial jeopardy of a similar event reoccurring. Furthermore, the lack of confidence in our banking system may even be a contributory factor in our stuttering recovery.
However, even if we didn't learn from our mistakes, others have. Today I read in the UK “Telegraph” (September 15, 2011) that Sir John Vickers (economist at All Souls College, Oxford, and Chair of the UK's Independent Commission on Banking (ICB) has released that august group's report on a recent investigation into British banking. “Sir John Vicker's ICB published its final report on Monday, recommending that banks should protect their retail operations from riskier investment banking units and raise capital levels to protect taxpayers from future crises.”
The ICB has concluded that they need more protection from the possible collusion of banks and financial institutions and have published a report that in effect reproduces a form of the US 1933 Glass Steagall Act for the British banking system. Aware that in the future, “high street” savings and retail banks (read “Main Street banks”) and the citizen’s savings upon which the local economy is based, must be protected from risky investments, the ICB wisely recommended "ringfencing" the retail banks.
Some of the prime provisions of the ICB report: The need is immediate and widespread with the new regulations to take effect as soon as 2019. Retail banks should be “ringfenced” to be isolated and protected from interaction with financial institutions. Services such as stock trading, market activities and especially use or sale of derivatives are excluded from the retail banks. One third of banks would be placed within the ringfence. Ringfenced banks must have separate boards with independent directors. Ringfenced banks shall have higher equity capital requirements.
These ICB proposals are very sound ones. It is a sad commentary that the USA pioneered this very idea nearly eighty years ago, and it operated successfully for more sixty years (with only minor revisions) but succumbed to greed, hubris, bad politics and simple stupidity in 1999 only eight years before it was really needed. Like Germany, Australia, and several other nations which had strong banking regulations, were it not for Senator Gramm and his ilk we too might have missed the "Great Recession bullet".
I recommend that we either dig up the old Glass Stegall Act and reintroduce that legislation, or follow the British lead on "ringfencing" our banks. We will all feel a lot more confident about our savings, our future and our children's futures. That confidence may help buoy this faltering economy as well.
Get the picture?
Thursday, September 15, 2011
Monday, September 12, 2011
PAUL KRUGMAN SAID IT, WE ARE ALL THINKING IT
I reprint Paul Krugman's Blog from the 9-11-11 NYT below.
September 11, 2011, 8:41 am
The Years of Shame
Is it just me, or are the 9/11 commemorations oddly subdued?
Actually, I don’t think it’s me, and it’s not really that odd.
What happened after 9/11 — and I think even people on the right know this, whether they admit it or not — was deeply shameful. The atrocity should have been a unifying event, but instead it became a wedge issue. Fake heroes like Bernie Kerik, Rudy Giuliani, and, yes, George W. Bush raced to cash in on the horror. And then the attack was used to justify an unrelated war the neocons wanted to fight, for all the wrong reasons.
A lot of other people behaved badly. How many of our professional pundits — people who should have understood very well what was happening — took the easy way out, turning a blind eye to the corruption and lending their support to the hijacking of the atrocity?
The memory of 9/11 has been irrevocably poisoned; it has become an occasion for shame. And in its heart, the nation knows it.
I’m not going to allow comments on this post, for obvious reasons.
.
September 11, 2011, 8:41 am
The Years of Shame
Is it just me, or are the 9/11 commemorations oddly subdued?
Actually, I don’t think it’s me, and it’s not really that odd.
What happened after 9/11 — and I think even people on the right know this, whether they admit it or not — was deeply shameful. The atrocity should have been a unifying event, but instead it became a wedge issue. Fake heroes like Bernie Kerik, Rudy Giuliani, and, yes, George W. Bush raced to cash in on the horror. And then the attack was used to justify an unrelated war the neocons wanted to fight, for all the wrong reasons.
A lot of other people behaved badly. How many of our professional pundits — people who should have understood very well what was happening — took the easy way out, turning a blind eye to the corruption and lending their support to the hijacking of the atrocity?
The memory of 9/11 has been irrevocably poisoned; it has become an occasion for shame. And in its heart, the nation knows it.
I’m not going to allow comments on this post, for obvious reasons.
.
Wednesday, July 13, 2011
WHY WE ARE IN AFGHANISTAN AND WON'T LEAVE
July 13, 2011
I can’t seem to make sense of our policy in Afghanistan. Each month we read reports of the loss of our soldiers to treacherous IEDs. The men who do survive such attacks may come home as broken shells of their former selves, often with need for long-term medical care. But that is only one part (a hear-rending one) of the tragedy. The cost of fielding troops in that distant mountainous land is staggering--one million dollars per trooper. With our present (post-Obama) troop surge- we spend over 10 billion dollars a month or 120 billion dollars annually in far off Afghanistan. But the real costs are much greater. A recent, detailed study by the Eisenhower Research Project at Brown University revealed that the war on terror (of which the Iraq and Afghanistan wars are part) has cost the US economy so far about 4 trillion dollars. Another trillion dollars is estimated for the long-term interest payments on the loans we took out to finance the wars. Oh yes, these “Bush” wars were “on the cuff” affairs. And by the way, while we were borrowing for these wars our leadership in the Bush White House also decided to cut taxes on the wealthy. Those polices, borrowing for the war on terror and cutting taxes at the same time, were the sinister plans of the Republicans to drive the Democrats against a rock and hard place and try to undo the 80 years of FDR progressive domestic spending that reactionary Republicans so loathed.
But back to our reasons for being in Afghanistan. Why are we there? President Obama’s stated reason is to neutralize al-Qaeda—an alleged threat to our security. But since it is well established (CIA and Pentagon reports) that there are perhaps one-hundred (100) al-Qaeda operatives in that nation. One finds that reason incredulous. Or one must conclude that he al-Qaeda (and the Pashtun Afghans who associate with them) must be supermen—if indeed they can be worth the cost of 1.2 billion dollars each to take down. Think of it. One-hundred-twenty thousand (120,000) modern American troops armed to the teeth, with the latest technical devices for dealing death and destruction chasing one-hundred towel-headed men in rags and sandals armed with home-made A-K47 rip-offs and a belt of cartridges. If the al-Qaeda and Taliban had some expertise in movie making they could produce some block-buster comedies out of that scenario. Sadly, it is not a comedy.
Does our government really expect our US citizenry to believe such nonsense? Apparently they do. But by making use the old rule of “follow the money” may help clarify the situation.
By the way: These annual costs for the Afghanistan war should be viewed in context. This fiscal year (14 trillion dollar national debt, a 1.4 trillion dollar deficit) the President has proposed a nearly 4 trillion dollar budget, but tax receipts are expected to be only less than 3 trillion dollars (for a cause of this short-fall think back to the Bush tax cuts on the wealthy of 2001 and 2003). To quiet his detractors Obama has proposed spending-cuts in many entitlement programs (health, education, etc) but has not dared cut the military and Pentagon budgets. They all got a 1.6% raise and there were no cuts. Furthermore, the promised reduction of troops in Afghanistan has been only a nominal drawdown-- some ten thousand are expected to depart but these are mostly support and training men and women. Thus in a situation where our revenues only cover 75% of our expeditiures and we are now spending about a third more than what we take in. Beside the horrible waste of life on both sides, we must ask ourselves, can we afford to blow away 120 billion dollars a year? I think not.
But back to Afghanistan and our costs there. When we ask, “who is profiting from this spending?” We find the bloated Pentagon (the real largest cost element of our annual Federal budget), and the military industrial companies with which the Pentagon has such a cozy relationship. I believe it was President Eisenhower who first used the term "military-industrial complex" and fingered it as a problem for our democracy. Today, the MIC are even bigger and more powerful. They are the US companies who make huge profits out of war-spending (we euphemistically call them “defense contractors”) and those in the banking and financial sector that finance and invest in these companies with close ties to the military, and the facilitator members of Congress and the Senate (mostly Republicans--though the Democrats are in there too).
Pepe Escobar the roving correspondent for the Asia Times has a theory. (Contact: pepeasia@yahoo.com ) He states “The notion that the US government would spend $10 billion a month just to chase a few "al-Qaeda types" in the Hindu Kush is nonsense. This is a war between a superpower and a fierce, nationalist, predominantly Pashtun movement - of which the Taliban are a major strand; regardless of their medieval ways, they are fighting a foreign occupation and doing what they can to undermine a puppet regime (Hamid Karzai's).”
I can’t seem to make sense of our policy in Afghanistan. Each month we read reports of the loss of our soldiers to treacherous IEDs. The men who do survive such attacks may come home as broken shells of their former selves, often with need for long-term medical care. But that is only one part (a hear-rending one) of the tragedy. The cost of fielding troops in that distant mountainous land is staggering--one million dollars per trooper. With our present (post-Obama) troop surge- we spend over 10 billion dollars a month or 120 billion dollars annually in far off Afghanistan. But the real costs are much greater. A recent, detailed study by the Eisenhower Research Project at Brown University revealed that the war on terror (of which the Iraq and Afghanistan wars are part) has cost the US economy so far about 4 trillion dollars. Another trillion dollars is estimated for the long-term interest payments on the loans we took out to finance the wars. Oh yes, these “Bush” wars were “on the cuff” affairs. And by the way, while we were borrowing for these wars our leadership in the Bush White House also decided to cut taxes on the wealthy. Those polices, borrowing for the war on terror and cutting taxes at the same time, were the sinister plans of the Republicans to drive the Democrats against a rock and hard place and try to undo the 80 years of FDR progressive domestic spending that reactionary Republicans so loathed.
But back to our reasons for being in Afghanistan. Why are we there? President Obama’s stated reason is to neutralize al-Qaeda—an alleged threat to our security. But since it is well established (CIA and Pentagon reports) that there are perhaps one-hundred (100) al-Qaeda operatives in that nation. One finds that reason incredulous. Or one must conclude that he al-Qaeda (and the Pashtun Afghans who associate with them) must be supermen—if indeed they can be worth the cost of 1.2 billion dollars each to take down. Think of it. One-hundred-twenty thousand (120,000) modern American troops armed to the teeth, with the latest technical devices for dealing death and destruction chasing one-hundred towel-headed men in rags and sandals armed with home-made A-K47 rip-offs and a belt of cartridges. If the al-Qaeda and Taliban had some expertise in movie making they could produce some block-buster comedies out of that scenario. Sadly, it is not a comedy.
Does our government really expect our US citizenry to believe such nonsense? Apparently they do. But by making use the old rule of “follow the money” may help clarify the situation.
By the way: These annual costs for the Afghanistan war should be viewed in context. This fiscal year (14 trillion dollar national debt, a 1.4 trillion dollar deficit) the President has proposed a nearly 4 trillion dollar budget, but tax receipts are expected to be only less than 3 trillion dollars (for a cause of this short-fall think back to the Bush tax cuts on the wealthy of 2001 and 2003). To quiet his detractors Obama has proposed spending-cuts in many entitlement programs (health, education, etc) but has not dared cut the military and Pentagon budgets. They all got a 1.6% raise and there were no cuts. Furthermore, the promised reduction of troops in Afghanistan has been only a nominal drawdown-- some ten thousand are expected to depart but these are mostly support and training men and women. Thus in a situation where our revenues only cover 75% of our expeditiures and we are now spending about a third more than what we take in. Beside the horrible waste of life on both sides, we must ask ourselves, can we afford to blow away 120 billion dollars a year? I think not.
But back to Afghanistan and our costs there. When we ask, “who is profiting from this spending?” We find the bloated Pentagon (the real largest cost element of our annual Federal budget), and the military industrial companies with which the Pentagon has such a cozy relationship. I believe it was President Eisenhower who first used the term "military-industrial complex" and fingered it as a problem for our democracy. Today, the MIC are even bigger and more powerful. They are the US companies who make huge profits out of war-spending (we euphemistically call them “defense contractors”) and those in the banking and financial sector that finance and invest in these companies with close ties to the military, and the facilitator members of Congress and the Senate (mostly Republicans--though the Democrats are in there too).
Pepe Escobar the roving correspondent for the Asia Times has a theory. (Contact: pepeasia@yahoo.com ) He states “The notion that the US government would spend $10 billion a month just to chase a few "al-Qaeda types" in the Hindu Kush is nonsense. This is a war between a superpower and a fierce, nationalist, predominantly Pashtun movement - of which the Taliban are a major strand; regardless of their medieval ways, they are fighting a foreign occupation and doing what they can to undermine a puppet regime (Hamid Karzai's).”
Thus Washington is fighting a Pashtun nationalist insurgency. But why? According to Escobar, Afghanistan must be “neutralized” i.e. the Pashtun tribal elements must be either bribed, exterminated or beaten into submission so that we can keep our bases in an area we deem essential for our plan of world domination of natural resources. Yes! The Pentagon’s plan called “Full Spectrum Dominance” is designed to encircle our competitors in the east:Russia and China…and prevent them from getting resources that we and our client-states may want or need. That plan has of course led to the wars in Iraq, Afghanistan, Sudan, Yemen, Pakistan-borderlands and now in Libya and who knows where else?”
According to Escobar, that is only the strategic reason. There is tactical and proximate reason as well. This is what Escobar calls “Pipelinestan”. This reason for war in Afghanistan is heard very little of in the timid and controlled US and Murdock press. And when it is discussed, it is described as the west’s attempts at “democratizing” the east. According to Escobar Pipelinestan is his term for the Trans-Afghan Pipeline, a gas line proposed early in the Clinton Administration and which is still on the “planning table” books. The gas line would connect Turkmenistan, Afghanistan and Pakistan and would permit a flow of natural gas from landlocked and isolated Central Asia to global markets in the west, bypassing both Russia and Iran and siphoning off gas reserves from areas which China might have considered in its own sphere of influence.
Escobar states: “Washington has badly wanted TAP since the mid-1990s, when the Clinton administration was negotiating with the Taliban; the talks broke down because of transit fees, even before 9/11, when the Bush administration decided to change the rhetoric (an offer) from "a carpet of gold" to "a carpet of bombs".”
But to accomplish “Pipelinestan” the US needs a totally pacified Afghanistan and the acquiescence of a Pakistan which must give up using Afghanistan as a vassal state in its confrontation with India. Escobar sees the US and Pakistan’s relationship as two nations both bent on nullifying Pashtun nationalism. This correspondence of goals may explain why the Pakistani Army and the Pentagon enjoy such a close working relationship. (Which is only now showing some signs of strain and diversion after the US’s killing of Osama Bin Laden in Pakistan.) Both Washington and Pakistan see Pashtun nationalism as a thorn in their sides.
The way Escobar sees it: “The 2,500-kilometer-long, porous, disputed border with Afghanistan is at the core of Pakistan's interference in its neighbour's affairs.
Washington is getting desperate because it knows the Pakistani military will always support the Taliban as much as they support other hardcore Islamist groups fighting India. Washington also knows Pakistan's Afghan policy implies containing India's influence in Afghanistan at all costs.
Just ask General Ashfaq Parvez Kayani, Pakistan's army chief - and a Pentagon darling to boot; he always says his army is India-centric, and, therefore, entitled to "strategic depth" in Afghanistan.
It's mind-boggling that 10 years and $5.4 trillion dollars later, the situation is exactly the same. Washington still badly wants "its" pipeline - which will in fact be a winning game mostly for commodity traders, global finance majors and Western energy giants.
From the standpoint of these elites, the ideal endgame scenario is global" (that the US will continue to be) "Robocop NATO - helped by hundreds of thousands of mercenaries - "protecting" TAP (or TAPI) while taking a 24/7 peek on what's going on in neighbours Russia and China.”
Escobar adds: “Sharp wits in India have described Washington's tortuous moves in Afghanistan as "surge, bribe and run". But Escobar redefines it as rather "surge, bribe and stay". He adds that "This whole saga might have been accomplished without a superpower bankrupting itself, and without immense, atrocious, sustained loss of life, but hey - nobody's perfect.”
According to Escobar, that is only the strategic reason. There is tactical and proximate reason as well. This is what Escobar calls “Pipelinestan”. This reason for war in Afghanistan is heard very little of in the timid and controlled US and Murdock press. And when it is discussed, it is described as the west’s attempts at “democratizing” the east. According to Escobar Pipelinestan is his term for the Trans-Afghan Pipeline, a gas line proposed early in the Clinton Administration and which is still on the “planning table” books. The gas line would connect Turkmenistan, Afghanistan and Pakistan and would permit a flow of natural gas from landlocked and isolated Central Asia to global markets in the west, bypassing both Russia and Iran and siphoning off gas reserves from areas which China might have considered in its own sphere of influence.
Escobar states: “Washington has badly wanted TAP since the mid-1990s, when the Clinton administration was negotiating with the Taliban; the talks broke down because of transit fees, even before 9/11, when the Bush administration decided to change the rhetoric (an offer) from "a carpet of gold" to "a carpet of bombs".”
But to accomplish “Pipelinestan” the US needs a totally pacified Afghanistan and the acquiescence of a Pakistan which must give up using Afghanistan as a vassal state in its confrontation with India. Escobar sees the US and Pakistan’s relationship as two nations both bent on nullifying Pashtun nationalism. This correspondence of goals may explain why the Pakistani Army and the Pentagon enjoy such a close working relationship. (Which is only now showing some signs of strain and diversion after the US’s killing of Osama Bin Laden in Pakistan.) Both Washington and Pakistan see Pashtun nationalism as a thorn in their sides.
The way Escobar sees it: “The 2,500-kilometer-long, porous, disputed border with Afghanistan is at the core of Pakistan's interference in its neighbour's affairs.
Washington is getting desperate because it knows the Pakistani military will always support the Taliban as much as they support other hardcore Islamist groups fighting India. Washington also knows Pakistan's Afghan policy implies containing India's influence in Afghanistan at all costs.
Just ask General Ashfaq Parvez Kayani, Pakistan's army chief - and a Pentagon darling to boot; he always says his army is India-centric, and, therefore, entitled to "strategic depth" in Afghanistan.
It's mind-boggling that 10 years and $5.4 trillion dollars later, the situation is exactly the same. Washington still badly wants "its" pipeline - which will in fact be a winning game mostly for commodity traders, global finance majors and Western energy giants.
From the standpoint of these elites, the ideal endgame scenario is global" (that the US will continue to be) "Robocop NATO - helped by hundreds of thousands of mercenaries - "protecting" TAP (or TAPI) while taking a 24/7 peek on what's going on in neighbours Russia and China.”
Escobar adds: “Sharp wits in India have described Washington's tortuous moves in Afghanistan as "surge, bribe and run". But Escobar redefines it as rather "surge, bribe and stay". He adds that "This whole saga might have been accomplished without a superpower bankrupting itself, and without immense, atrocious, sustained loss of life, but hey - nobody's perfect.”
On another front: Iraq where we see a very similar endgame playing out. The last news reports I read seem to suggest that the Iraq troop pull-out, scheduled for the end of this year, forged in a formal agreement by the Bush presidency, is now considered to be on shaky ground under Obama(the "peace president" who was elected on his stated objection of initiating the Iraq fiasco). It seems that the military types close to the Obamians in Washington are angling for some way to keep their massive bases and a sizable troop deployment there permanently! The number they bandy about seems to be about 10,000 battle ready troops. Their stay would be long term. PS 10,000 times a million dollars/troop/year = ten thousand million or ten billion annually! Ten billion dollars that will come out of our tax payer’s pockets, and will not be available for our schools, our infrastructure, our broadband, our transit, our nation’s health, or the development of energy industries for the 21st century.
If Washington’s real goal is a pacified Afghanistan for the benefit of the oil and gas cartels and for a strategy of global domination…..that should have been brought into the open and debated. It never was. This is supposed to be a DEMOCRACY. The people should have a say in major decisions of war and peace. But what appears to be the case now is that our government has been usurped by the powerful corporations who simply make up the story they want. It seems they have no interest in bettering our nation but want only to use this geographic location as a base of supply, a good place for corporate headquarters, as a source of cheap manpower, and a staging ground for their business activities, and those of the world’s other giant corporations, its global media, and elite clients---and perhaps for its plan of world domination. But as citizens of such a nation we do not get the benefits which accure to their success, such as decent health care, a working and up-to-date infrastructure, clean water and safe food, education and others). Do we want that kind of nation? Let’s ask ourselves, “What’s in it for us?”
Get the picture?
Friday, June 17, 2011
US GOV CUTS SOCIAL SERVICES AT HOME AND SPENDS 3 BILLION A WEEK IN AFGHANISTAN
WHAT MAKES US DO IT?
Why do we continue to fight wars? Even when there is no reason, no threat, no purpose? Even when we can not afford them anymore? What makes our government spend three billion dollars every week in Afghanistan and Iraq? Why do we spend on guns and bullets when we are closing schools and libraries here at home and where the "cut the deficit" hawks are trimming away at the minimalist social saftey-net we have here in the USA? And as they argue in Washington over the deficit and what social service to cut next, we continue to be faced with the horror of the dead and mutilated which come home either in body bags, or as terribly hurt and deformed young men and women. What makes us do it?
When I would voice questions of this sort in the past, they were often addressed to my good old friend, Professor Mort Strassberg, who sat across from me in our office, his grey head just barely visible over a pile of dusty geology books, mineral samples, and a pile of blue-test-booklets waiting to be marked. My former Department Head, and respected colleague at Suffolk College, would often respond with his favorite answer, "Bob just follow the money. Some big shot, some elite, an oligarch is making good dough on the war. He has plenty of money and him and his big company have a host of "rabbis" in the Senate and Halls of Congress. The big shots get what they want from this government and us, the 'schlemiels', we pay for it in taxes and blood."
So now that old Mort is no longer here, and I can't muse with him about such things anymore, I often think of him and what his response would be.
I imagine his progressive spirit(he was not afraid to call himself a "liberal" ), wafting through his old haunts, the geology prep room, the mineral lab, and the physical science racks in the depths of the college-library basement, and possibly near that tree we planted in his name (a healthy sycamore, now a hefty six or eight inches across) uneasy with what is going on today in Washington. Mort abruptly left the political scene sometime in the George H. W. Bush era, (an administration which irked him greatly) and since then, political matters have deteriorated drastically moving rapidly alon a steep, right-hand slope.
Mort was a true progressive of the George McGovern era. I have to admit, at the time his brand was too strong for me. Perhaps I was too young or naive and it was early in my political development. Then I was a non-politcal scientist. My head was deep in sediment, both figuratively and literally. But time to read and study, and a political awakening occasioned by the GW Bush presidency changed my thinking drastically. Perhaps I can not quite take up Mort's mantle, but a bit of that cloth covers my shoulders now too. I think he would be happy to know that..in some way he did have an influence on my "erroneous" thinking. There would have been less hot air and lots more agreement over that pile of books and papers on our desks these days.
So asking that question again, why do we persist on fighting when it makes no security, political or monetary sense? Mort would have been sure to have underscored that it is certainly not to further democracy, or improve the lives of the poor. But mostly for the warmonger's profit, the general's pride, and the politicians glory. Those reasons were considered immoral ones by Mort, and today I must agree with him. I have had some experience with wars myself. I lived through World War II, the Korean "Conflict", the Vietnam War (I was fortunate to serve two years as a student ROTC cadet during that era), countless Reagan-Bush military actions around the hemisphere, in Lebanon the Middle East, Africa, and around the world, and more recently Geroge Bush's Deceit (Iraq War), Afghanistan War, the secret wars in Yemen, Ethiopia, and Pakistan, and now most recently Obama's illegal war in Libya (where he tries to suggest is not a 'hostility'. Where will it end?
Not having my old friend to puzzle over these matters with, I often resort to a variety of publications to seek answers to my queries. Today, I sought solace with (The Guardian) which ran this piece: Eisenhower's Worst Fears Came True by Simon Jenkins ( June 16, 2011) I excerpt part of it here. See below for the full site.
"It is not democracy that keeps western nations at war, but armies and the interests now massed behind them. The greatest speech about modern defence was made in 1961 by the US president Eisenhower. He was no leftwinger, but a former general and conservative Republican. Looking back over his time in office, his farewell message to America was a simple warning against the "disastrous rise of misplaced power" of a military-industrial complex with "unwarranted influence on government". A burgeoning defence establishment, backed by large corporate interests, would one day employ so many people as to corrupt the political system. (His original draft even referred to a "military-industrial-congressional complex".) This lobby, said Eisenhower, could become so huge as to "endanger our liberties and democratic processes".
I wonder what Eisenhower would make of today's US, with a military grown from 3.5 million people to 5 million. The western nations face less of a threat to their integrity and security than ever in history, yet their defence industries cry for ever more money and ever more things to do. The cold war strategist, George Kennan, wrote prophetically: "Were the Soviet Union to sink tomorrow under the waters of the ocean, the American military-industrial complex would have to remain, substantially unchanged, until some other adversary could be invented."
The devil makes work for idle hands, especially if they are well financed. Britain's former special envoy to Kabul, Sherard Cowper-Coles, echoed Kennan last week in claiming that the army's keenness to fight in Helmand was self-interested. "It's use them or lose them, Sherard," he was told by the then chief of the general staff, Sir Richard Dannatt. Cowper-Coles has now gone off to work for an arms manufacturer.
There is no strategic defence justification for the US spending 5.5% of its gross domestic product on defence or Britain 2.5%, or for the Nato "target" of 2%.
These figures merely formalise existing commitments and interests. At the end of the cold war soldiers assiduously invented new conflicts for themselves and their suppliers, variously wars on terror, drugs, piracy, internet espionage and man's general inhumanity to man. None yields victory, but all need equipment. The war on terror fulfilled all Eisenhower's fears, as America sank into a swamp of kidnapping, torture and imprisonment without trial.
The belligerent posture of the US and Britain towards the Muslim world has fostered antagonism and moderate threats in response. The bombing of extremist targets in Pakistan is an invitation for terrorists to attack us, and then a need for defence against such attack. Meanwhile, the opportunity cost of appeasing the complex is astronomical. Eisenhower remarked that "every gun that is made is a theft from those who hunger" – a bomber is two power stations and a hospital not built. Likewise, each Tomahawk Cameron drops on Tripoli destroys not just a Gaddafi bunker (are there any left?), but a hospital ward and a classroom in Britain.
As long as "big defence" exists it will entice glory-hungry politicians to use it. It is a return to the hundred years war, when militaristic barons and knights had a stranglehold on the monarch, and no other purpose in life than to fight. To deliver victory they demanded ever more taxes for weapons, and when they had ever more weapons they promised ever grander victories. This is exactly how Britain's defence ministry ran out of budgetary control under Labour.
There is one piece of good news. Nato has long outlived its purpose, now justifying its existence only by how much it induces its members to spend, and how many wars irrelevant to its purpose it finds to fight. Yet still it does not spend enough for the US defence secretary. In his anger, Gates threatened that "future US leaders … may not consider the return on America's investment in Nato worth the cost". Is that a threat or a promise? .
http://m.guardian.co.uk/ms/p/gnm/op/sNxtF6R1rdy0Q8zfHlow4wg/view.m?id=15&gid=commentisfree/2011/jun/16/eisenhower-fears-invent-enemies-buy-bombs&cat=commentisfree
Get the picture?
rjk
Why do we continue to fight wars? Even when there is no reason, no threat, no purpose? Even when we can not afford them anymore? What makes our government spend three billion dollars every week in Afghanistan and Iraq? Why do we spend on guns and bullets when we are closing schools and libraries here at home and where the "cut the deficit" hawks are trimming away at the minimalist social saftey-net we have here in the USA? And as they argue in Washington over the deficit and what social service to cut next, we continue to be faced with the horror of the dead and mutilated which come home either in body bags, or as terribly hurt and deformed young men and women. What makes us do it?
When I would voice questions of this sort in the past, they were often addressed to my good old friend, Professor Mort Strassberg, who sat across from me in our office, his grey head just barely visible over a pile of dusty geology books, mineral samples, and a pile of blue-test-booklets waiting to be marked. My former Department Head, and respected colleague at Suffolk College, would often respond with his favorite answer, "Bob just follow the money. Some big shot, some elite, an oligarch is making good dough on the war. He has plenty of money and him and his big company have a host of "rabbis" in the Senate and Halls of Congress. The big shots get what they want from this government and us, the 'schlemiels', we pay for it in taxes and blood."
So now that old Mort is no longer here, and I can't muse with him about such things anymore, I often think of him and what his response would be.
I imagine his progressive spirit(he was not afraid to call himself a "liberal" ), wafting through his old haunts, the geology prep room, the mineral lab, and the physical science racks in the depths of the college-library basement, and possibly near that tree we planted in his name (a healthy sycamore, now a hefty six or eight inches across) uneasy with what is going on today in Washington. Mort abruptly left the political scene sometime in the George H. W. Bush era, (an administration which irked him greatly) and since then, political matters have deteriorated drastically moving rapidly alon a steep, right-hand slope.
Mort was a true progressive of the George McGovern era. I have to admit, at the time his brand was too strong for me. Perhaps I was too young or naive and it was early in my political development. Then I was a non-politcal scientist. My head was deep in sediment, both figuratively and literally. But time to read and study, and a political awakening occasioned by the GW Bush presidency changed my thinking drastically. Perhaps I can not quite take up Mort's mantle, but a bit of that cloth covers my shoulders now too. I think he would be happy to know that..in some way he did have an influence on my "erroneous" thinking. There would have been less hot air and lots more agreement over that pile of books and papers on our desks these days.
So asking that question again, why do we persist on fighting when it makes no security, political or monetary sense? Mort would have been sure to have underscored that it is certainly not to further democracy, or improve the lives of the poor. But mostly for the warmonger's profit, the general's pride, and the politicians glory. Those reasons were considered immoral ones by Mort, and today I must agree with him. I have had some experience with wars myself. I lived through World War II, the Korean "Conflict", the Vietnam War (I was fortunate to serve two years as a student ROTC cadet during that era), countless Reagan-Bush military actions around the hemisphere, in Lebanon the Middle East, Africa, and around the world, and more recently Geroge Bush's Deceit (Iraq War), Afghanistan War, the secret wars in Yemen, Ethiopia, and Pakistan, and now most recently Obama's illegal war in Libya (where he tries to suggest is not a 'hostility'. Where will it end?
Not having my old friend to puzzle over these matters with, I often resort to a variety of publications to seek answers to my queries. Today, I sought solace with (The Guardian) which ran this piece: Eisenhower's Worst Fears Came True by Simon Jenkins ( June 16, 2011) I excerpt part of it here. See below for the full site.
"It is not democracy that keeps western nations at war, but armies and the interests now massed behind them. The greatest speech about modern defence was made in 1961 by the US president Eisenhower. He was no leftwinger, but a former general and conservative Republican. Looking back over his time in office, his farewell message to America was a simple warning against the "disastrous rise of misplaced power" of a military-industrial complex with "unwarranted influence on government". A burgeoning defence establishment, backed by large corporate interests, would one day employ so many people as to corrupt the political system. (His original draft even referred to a "military-industrial-congressional complex".) This lobby, said Eisenhower, could become so huge as to "endanger our liberties and democratic processes".
I wonder what Eisenhower would make of today's US, with a military grown from 3.5 million people to 5 million. The western nations face less of a threat to their integrity and security than ever in history, yet their defence industries cry for ever more money and ever more things to do. The cold war strategist, George Kennan, wrote prophetically: "Were the Soviet Union to sink tomorrow under the waters of the ocean, the American military-industrial complex would have to remain, substantially unchanged, until some other adversary could be invented."
The devil makes work for idle hands, especially if they are well financed. Britain's former special envoy to Kabul, Sherard Cowper-Coles, echoed Kennan last week in claiming that the army's keenness to fight in Helmand was self-interested. "It's use them or lose them, Sherard," he was told by the then chief of the general staff, Sir Richard Dannatt. Cowper-Coles has now gone off to work for an arms manufacturer.
There is no strategic defence justification for the US spending 5.5% of its gross domestic product on defence or Britain 2.5%, or for the Nato "target" of 2%.
These figures merely formalise existing commitments and interests. At the end of the cold war soldiers assiduously invented new conflicts for themselves and their suppliers, variously wars on terror, drugs, piracy, internet espionage and man's general inhumanity to man. None yields victory, but all need equipment. The war on terror fulfilled all Eisenhower's fears, as America sank into a swamp of kidnapping, torture and imprisonment without trial.
The belligerent posture of the US and Britain towards the Muslim world has fostered antagonism and moderate threats in response. The bombing of extremist targets in Pakistan is an invitation for terrorists to attack us, and then a need for defence against such attack. Meanwhile, the opportunity cost of appeasing the complex is astronomical. Eisenhower remarked that "every gun that is made is a theft from those who hunger" – a bomber is two power stations and a hospital not built. Likewise, each Tomahawk Cameron drops on Tripoli destroys not just a Gaddafi bunker (are there any left?), but a hospital ward and a classroom in Britain.
As long as "big defence" exists it will entice glory-hungry politicians to use it. It is a return to the hundred years war, when militaristic barons and knights had a stranglehold on the monarch, and no other purpose in life than to fight. To deliver victory they demanded ever more taxes for weapons, and when they had ever more weapons they promised ever grander victories. This is exactly how Britain's defence ministry ran out of budgetary control under Labour.
There is one piece of good news. Nato has long outlived its purpose, now justifying its existence only by how much it induces its members to spend, and how many wars irrelevant to its purpose it finds to fight. Yet still it does not spend enough for the US defence secretary. In his anger, Gates threatened that "future US leaders … may not consider the return on America's investment in Nato worth the cost". Is that a threat or a promise? .
http://m.guardian.co.uk/ms/p/gnm/op/sNxtF6R1rdy0Q8zfHlow4wg/view.m?id=15&gid=commentisfree/2011/jun/16/eisenhower-fears-invent-enemies-buy-bombs&cat=commentisfree
Get the picture?
rjk
Monday, June 6, 2011
THE POSSIBILITY OF QE3
OF STOVE CLEANERS, CHEESE, AND MAKING MONEY EX NIHILO
On a recent tour of our local stores Mrs. K. has been annoyed to discover that one of her favorite house hold products, normally stocked on the “soap and cleaner’ shelves of several local stores is no longer available. The product--a stovetop cleaning agent-- was only recently easily procured and widely available, but not so now.
“Why can’t I find this items any longer?” she asked.
“Well that product may not have a lot of demand, so Green’s, Walmarts, CVS, True Value, etc. do not wish to have to replace the stock so quickly, when they are gone. They are reducing their stock of a product that they must pay for, but may not be able to sell so easily….”
“So this is just a response to the bad economy then?”
“Yes, it’s a sign of low demand.”
”Yes,” I agreed, “low demand may be the result of the fact that a good portion of the population is under employed or unemployed. Less money out there…less demand for stove-top cleaners and other stuff.”
Right now it is jobs, jobs, jobs that are on everyone’s mind. Today, I read in Portfolio.com, with some alarm that there are five applicants for every job that opens. Also, that there are some 15 million Americans out of work right now, and that nearly half a million have quit trying to find work. The formal joblessness rate is recorded as 9.6%, but that would be much worse were it not for the, nearly 500,000 who simply just quit looking.
Also the inflation rate has dropped down to 1.1% and has been holding steady at this rate for some months. That is well below the 2% rate that is considered desirable.
“That doesn’t sound too threatening. Why should I be concerned with the fact that prices are not rising much?”
“Well the problem is that such a low rate of inflation is and indicator of low consumer demand for goods and services.
“So that’s why I can’t find that “cook-top spray-cleaner, I like to use”?
“Exactly!“
“Some products which are not your big sellers are in lower demand anyway…are simply eliminated off the shelves, as a way to reduce costs and raise profits by the stores.“
“That’s one way to control expenses, but it makes me mad!“
“But more importantly, these circumstances of low demand may develop into what the economists call a “vicious deflationary cycle” in which low consumer demand causes product prices to fall, (or they may be simply eliminated as your cook top cleaner), this causes shoppers (like you and me) to retard purchases since they anticipate the continuing fall in prices (Why should you pay more for some product today when you can get some product cheaper tomorrow?). Then the store-owner, responding to low demand, may decrease prices further, while the products manufacturer or producer who is faced with less orders for his product, sells his stock at lower prices since he has too much of it, and, as well, may decide to slow production. These results exacerbate the problem and result in lower demand for labor in both the production end and in the sales end of the economy, resulting in lay offs, and firings. But job losses and reduced employment only tend to decrease money in circulation, and thus depress demand even further. The end result is a continual spiral downward of demand, as prices fall and employees are laid off. This deflationary spiral can be described as a classic “vicious cycle” or a process, which tends to exacerbate the cause or causes that generate it.
What can the Fed do? I read recently that Ben Bernanke is planning to decrease long-term interest rates (again) and stimulate growth by having the Fed purchase (“soak up”) Treasury Bonds. Treasury Bonds are safe, but they generally do not provide much interest on investment at maturity. So to encourage buyers, the government has to keep interest rates at a level high enough to encourage sales. But that impacts us down the line. So if the Fed were to buy up Treasury Bonds, that would put a cash-infusion into government coffers. It would save some dough too, by keeping interest rates lower. Since the government would have less urgency to sell bonds, they need not encourage buyers by raising interest rates. The down side is that this action would tend to decrease the value of the dollar. So we all have less buying power, particularly those on fixed incomes--like the elderly. That’s why the price of English Stilton cheese and Italian Parmigiana Reggiano have gone through the roof and the markets don’t stock them anymore.
There are times when just dropping the interest rate to zero, doesn’t help. Perhaps that might occur in those times when there is so little demand for stovetop cleaners and expensive cheese. Then there is the option of just printing more money. The government bankers don’t like to use those terms. They are too explicit and revealing. No matter that is what they are really doing. So they have developed the term “quatitative easing”, (QE). QE is a monetary policy used by central bankers to increase the supply of money. (they don’t simply dump the money on some corner on Main Street and let everyone come get it. Though that would be about what is happening. They simply write a check to themselves and drop that into their reserve account and voila! They have more money available created literally out of nothing (ex nihilo). They then use that account to buy government bonds, those awful mortgage-backed securities that no one really knows what they are getting or what they are worth, and corporate bonds or other financial instruments. That puts money into circulation, and hopefully stimulates the economy.
That takes care of the big shots and the bankers on Wall Street. Now if they could only find some way to get the unemployed back to work!
A few months later.....
Well here we are in June 6, 2011 and QE1 and QE2 have not done the trick. Oh the fat cats are doing fine…my neighbor...... who works on Wall Street and bought a home here at the height of the market FOR CASH is still tooling around with a 80G sports car. But some of his neighbors remain out of work. Others are scared silly about losing their jobs. And the latest data for last month (May 2011) shows that in May the US generated only 58,000 new jobs…not nearly enough to off set population growth (nearly 200,000 per month). So we are still going backward. The unemployed rate jumpped back up to 9.1 (from 9.0). Some are whispering about a new QE3! The plutocrats are happy with that idea, but what will it do for jobs for the average wage earner? It will only make the dollar cheaper and with cheap dollars to buy foreign oil we must shell out more dollars for each barrel—so that ploy is a punch in the eye for the common guy and gal. They will have to pay more for gasoline and that is the life blood of the economy our here on LI.
Get the picture?
On a recent tour of our local stores Mrs. K. has been annoyed to discover that one of her favorite house hold products, normally stocked on the “soap and cleaner’ shelves of several local stores is no longer available. The product--a stovetop cleaning agent-- was only recently easily procured and widely available, but not so now.
“Why can’t I find this items any longer?” she asked.
“Well that product may not have a lot of demand, so Green’s, Walmarts, CVS, True Value, etc. do not wish to have to replace the stock so quickly, when they are gone. They are reducing their stock of a product that they must pay for, but may not be able to sell so easily….”
“So this is just a response to the bad economy then?”
“Yes, it’s a sign of low demand.”
”Yes,” I agreed, “low demand may be the result of the fact that a good portion of the population is under employed or unemployed. Less money out there…less demand for stove-top cleaners and other stuff.”
Right now it is jobs, jobs, jobs that are on everyone’s mind. Today, I read in Portfolio.com, with some alarm that there are five applicants for every job that opens. Also, that there are some 15 million Americans out of work right now, and that nearly half a million have quit trying to find work. The formal joblessness rate is recorded as 9.6%, but that would be much worse were it not for the, nearly 500,000 who simply just quit looking.
Also the inflation rate has dropped down to 1.1% and has been holding steady at this rate for some months. That is well below the 2% rate that is considered desirable.
“That doesn’t sound too threatening. Why should I be concerned with the fact that prices are not rising much?”
“Well the problem is that such a low rate of inflation is and indicator of low consumer demand for goods and services.
“So that’s why I can’t find that “cook-top spray-cleaner, I like to use”?
“Exactly!“
“Some products which are not your big sellers are in lower demand anyway…are simply eliminated off the shelves, as a way to reduce costs and raise profits by the stores.“
“That’s one way to control expenses, but it makes me mad!“
“But more importantly, these circumstances of low demand may develop into what the economists call a “vicious deflationary cycle” in which low consumer demand causes product prices to fall, (or they may be simply eliminated as your cook top cleaner), this causes shoppers (like you and me) to retard purchases since they anticipate the continuing fall in prices (Why should you pay more for some product today when you can get some product cheaper tomorrow?). Then the store-owner, responding to low demand, may decrease prices further, while the products manufacturer or producer who is faced with less orders for his product, sells his stock at lower prices since he has too much of it, and, as well, may decide to slow production. These results exacerbate the problem and result in lower demand for labor in both the production end and in the sales end of the economy, resulting in lay offs, and firings. But job losses and reduced employment only tend to decrease money in circulation, and thus depress demand even further. The end result is a continual spiral downward of demand, as prices fall and employees are laid off. This deflationary spiral can be described as a classic “vicious cycle” or a process, which tends to exacerbate the cause or causes that generate it.
What can the Fed do? I read recently that Ben Bernanke is planning to decrease long-term interest rates (again) and stimulate growth by having the Fed purchase (“soak up”) Treasury Bonds. Treasury Bonds are safe, but they generally do not provide much interest on investment at maturity. So to encourage buyers, the government has to keep interest rates at a level high enough to encourage sales. But that impacts us down the line. So if the Fed were to buy up Treasury Bonds, that would put a cash-infusion into government coffers. It would save some dough too, by keeping interest rates lower. Since the government would have less urgency to sell bonds, they need not encourage buyers by raising interest rates. The down side is that this action would tend to decrease the value of the dollar. So we all have less buying power, particularly those on fixed incomes--like the elderly. That’s why the price of English Stilton cheese and Italian Parmigiana Reggiano have gone through the roof and the markets don’t stock them anymore.
There are times when just dropping the interest rate to zero, doesn’t help. Perhaps that might occur in those times when there is so little demand for stovetop cleaners and expensive cheese. Then there is the option of just printing more money. The government bankers don’t like to use those terms. They are too explicit and revealing. No matter that is what they are really doing. So they have developed the term “quatitative easing”, (QE). QE is a monetary policy used by central bankers to increase the supply of money. (they don’t simply dump the money on some corner on Main Street and let everyone come get it. Though that would be about what is happening. They simply write a check to themselves and drop that into their reserve account and voila! They have more money available created literally out of nothing (ex nihilo). They then use that account to buy government bonds, those awful mortgage-backed securities that no one really knows what they are getting or what they are worth, and corporate bonds or other financial instruments. That puts money into circulation, and hopefully stimulates the economy.
That takes care of the big shots and the bankers on Wall Street. Now if they could only find some way to get the unemployed back to work!
A few months later.....
Well here we are in June 6, 2011 and QE1 and QE2 have not done the trick. Oh the fat cats are doing fine…my neighbor...... who works on Wall Street and bought a home here at the height of the market FOR CASH is still tooling around with a 80G sports car. But some of his neighbors remain out of work. Others are scared silly about losing their jobs. And the latest data for last month (May 2011) shows that in May the US generated only 58,000 new jobs…not nearly enough to off set population growth (nearly 200,000 per month). So we are still going backward. The unemployed rate jumpped back up to 9.1 (from 9.0). Some are whispering about a new QE3! The plutocrats are happy with that idea, but what will it do for jobs for the average wage earner? It will only make the dollar cheaper and with cheap dollars to buy foreign oil we must shell out more dollars for each barrel—so that ploy is a punch in the eye for the common guy and gal. They will have to pay more for gasoline and that is the life blood of the economy our here on LI.
Get the picture?
Sunday, June 5, 2011
A WORKS PROGRAM TO INVEST IN AMERICA
I have been listening to the debate in Washington with an uneasy feeling. Both parties are simply arguing over how much of a deficit they favor. The Republicans favor draconian cuts in all of their favored budget targets, health care, child assistance, anything to do with the environment, in fact anything that might make life better for the vast majority of their co-countrymen and cost their clients, the super-wealthy, some small increase in taxes. While on the other hand, the Democrats parry these violent thrusts to the well being of the nation's poor and middle class with ineffective “feather-duster” parries which have as a goal not to defang and deflect the threat, but only to limit its effects or minimize the disaster which would envelop us all if these one-sided, mean-spirited, politically inspired and shortsighted proposals were ever to see the light of day.
Our Washington legislators are all too young to have experienced the effects of the Great Depression of the last century, as I am. But they should be familiar with our nation's history and the solutions that finally enabled this nation to raise itself out of economic stagnation. It was not deficit reduction that pulled the nation of my parents and grandparents out of the Great Depression, but the onset of WWII, which put the economy on a war-footing and provided full employment for nearly everyone. Money flowed into the hands of the poor and middleclass. That was the leavening which supported the economic revival. It only makes common sense. Would a farmer get a better crop if he concentrated his fertilizer on only a few plants in the center of his thirty-acre wheat field, or would he have a better crop by providing each plant with a tiny bit of that fertilizer? It seems plain that it is the multiplying effect of the money in the hands of the many, which will provide the most economic stimulus.
I'm not proposing here a new world war to boost the US economy. (Far from it, we are fighting two senseless and useless wars right now. In fact the billions spent on those wasteful enterprises could be invested here at home to do the economy some good.) But by placing the US on a war-footing, President Franklin Roosevelt, had reason to spend heavily. He did not cut expenditures. He increased the national debt, investing huge sums to start up industrial enterprises to support the war effort. Those works-projects were the direct stimulus which generated the economic rebound during and after the war.
Today, one need not look far to find things that need to be done here in the US, areas where our government could spend money to stimulate the economy now, and have a long-lasting effects on our over-all long-term competiveness and economic welfare. One need only to travel in western Europe to compare us to modern nations such as France or Germany to understand our weaknesses. Our infra-structure is outdated, decaying or inadequate for a modern nation. Our public buildings, sewer systems, water supply, roads, bridges, highways all need repair and or upgrading. Our train systems are antiquated, our wireless and broadband access is inadequate for a modern industrialized nation. There is little modern infrastructure such as smart-grid power, access to green energy sources or nation-wide universal broadband.
Today there are millions of Americans unemployed (the formal figure is 9.1% but estimates of the actual un-and under-employed or no-longer-looking put the figure at 15%. These individuals could be put to work here, were the American government to institute a massive works program. That would put money where it is needed in the hands of people.
Where can these funds come from? Let's begin by defunding the wasteful and counter-productive wars we are fighting abroad. No one in government of out has been able to explain what purposes the Afghanistan, Iraq and Libyan wars serve. They have cost us and continue to cost hundreds of billions of dollars annually in only direct costs. An additional source of funds could come from taxes on the upper echelons of the income brackets who now pay lower taxes than they ever did since the 1950s. At present the major tax burden falls onto the working middle class wage earners who pay 35% of their wages and have no loop-holes and deductions...while the oligarchs, elites, entrepreneurs all pay a small fraction of that amount --or none at all. Let us defund these worthless war expenditures increase taxes on the wealthy and use those funds to focus on rebuilding America. Improve our nation so that it will be able to compete with other modern nations in the long run and all of us can share in its affluence, not only a small minority at the top.
Our Washington legislators are all too young to have experienced the effects of the Great Depression of the last century, as I am. But they should be familiar with our nation's history and the solutions that finally enabled this nation to raise itself out of economic stagnation. It was not deficit reduction that pulled the nation of my parents and grandparents out of the Great Depression, but the onset of WWII, which put the economy on a war-footing and provided full employment for nearly everyone. Money flowed into the hands of the poor and middleclass. That was the leavening which supported the economic revival. It only makes common sense. Would a farmer get a better crop if he concentrated his fertilizer on only a few plants in the center of his thirty-acre wheat field, or would he have a better crop by providing each plant with a tiny bit of that fertilizer? It seems plain that it is the multiplying effect of the money in the hands of the many, which will provide the most economic stimulus.
I'm not proposing here a new world war to boost the US economy. (Far from it, we are fighting two senseless and useless wars right now. In fact the billions spent on those wasteful enterprises could be invested here at home to do the economy some good.) But by placing the US on a war-footing, President Franklin Roosevelt, had reason to spend heavily. He did not cut expenditures. He increased the national debt, investing huge sums to start up industrial enterprises to support the war effort. Those works-projects were the direct stimulus which generated the economic rebound during and after the war.
Today, one need not look far to find things that need to be done here in the US, areas where our government could spend money to stimulate the economy now, and have a long-lasting effects on our over-all long-term competiveness and economic welfare. One need only to travel in western Europe to compare us to modern nations such as France or Germany to understand our weaknesses. Our infra-structure is outdated, decaying or inadequate for a modern nation. Our public buildings, sewer systems, water supply, roads, bridges, highways all need repair and or upgrading. Our train systems are antiquated, our wireless and broadband access is inadequate for a modern industrialized nation. There is little modern infrastructure such as smart-grid power, access to green energy sources or nation-wide universal broadband.
Today there are millions of Americans unemployed (the formal figure is 9.1% but estimates of the actual un-and under-employed or no-longer-looking put the figure at 15%. These individuals could be put to work here, were the American government to institute a massive works program. That would put money where it is needed in the hands of people.
Where can these funds come from? Let's begin by defunding the wasteful and counter-productive wars we are fighting abroad. No one in government of out has been able to explain what purposes the Afghanistan, Iraq and Libyan wars serve. They have cost us and continue to cost hundreds of billions of dollars annually in only direct costs. An additional source of funds could come from taxes on the upper echelons of the income brackets who now pay lower taxes than they ever did since the 1950s. At present the major tax burden falls onto the working middle class wage earners who pay 35% of their wages and have no loop-holes and deductions...while the oligarchs, elites, entrepreneurs all pay a small fraction of that amount --or none at all. Let us defund these worthless war expenditures increase taxes on the wealthy and use those funds to focus on rebuilding America. Improve our nation so that it will be able to compete with other modern nations in the long run and all of us can share in its affluence, not only a small minority at the top.
Tuesday, May 31, 2011
THE END FOR NUCLEAR POWER IN GERMANY
Nuclear power, always considered environmentally challenging by the average informed person, as its long and expensive planning and approval processes have consistently indicated, has finally come to the end of its short life--at least in Germany and Switzerland. Here too, in the US it was essentially a dead issue up to recently (with no new plants approved in decades, after the disasters of Three Mile Island and Chernobyl sunk home into the public consciousness). That is until President Obama raised it from the dead with his plan to build new plants in response to the oil crisis. But that was at a time when the country was reeling from a reactionary groundswell, fed in part by a gut-response to the election of a black president, and economic issues such as the collapse of the housing and financial bubble, the resulting Great Recession, a huge government layout to save the banks, a monster deficit, three wars going at once, and a government that now borrows 40 cents on every dollar it spends. My opinion was that Obama just wanted to keep his head above water as he dodged the rotten fruit being tossed his way by the discontented right, and even some of us in the middle. His decision was in part the political reality of a weak president having to throw a few bones to the yelping dogs on his right.
As has been the case for the last eleven years, under the administrations of G.W Bush and Obama (who seems to have taken on the political identity one may characterizes as a more elegant and erudite "dark phase Bush"), the rest of the cognizant, rational world has attempted to forge ahead into the 21st Century to face the problems visible and foreseen on the horizon, while here in the USA under Obama's leadership we appear to be leading the charge back into the 19th century! To understand that statement let's look at one aspect of our government's decision making history in recent years relating to nuclear power.
The devastating images of the tragedy in Japan have flooded the airwaves in recent months, daily underscoring the helplessness of one of the world's most technically proficient and socially structured societies as they attempt to face one of the most mindboggling, set of multifaceted technical, social, biological and economic crises ever to affect that nation. the images and the facts have pushed decision-makers around the world to properly rethink their dependence on nuclear power. In the crisis in Japan, they see a modern nation faced with myriad problems unleashed by this man-made disaster which will haunt that nation for generations to come and leave parts of it scarce land-area as nuclear exclusion zones for thousands of years. What sane leader would want have his or her nation take the same chances? Which nations could calm their fears by stating: "that can't happen here!" Can they claim: it would not happen here because: we are better prepared, or more technically savvy, or have a more homogeneous and compliant society? No, there are none which can make those statements honestly. Japan is (or was) all of those things as well as the third largest economy in the world. If it can happen to Japan--who built the very same GE-designed nuclear plants we use today here in the USA--it can and will happen here and elsewhere too. Just give it time.
So the world's reaction against nuclear is only a rational response to the recent fallout, both figurative and actual, from the disaster at the nuclear plant at Fukishima, as well as the history of past disasters in that accident-plagued industry (though they will deny it and claim thousands of years of continual safe use). Some of the world's thoughtful and well-informed leaders have rightly put the cap on the foolish and dangerous flirtation with nuclear energy (begun here in USA during the Eisenhower administration only as a public relations ploy). Not so in the USA, where, for a large segment of the ill-informed population, a two-thousand year-old (plus) Judeo-Christian tract holds sway as a the font of all factual information (even regarding nuclear power which could not have been dreamt of by the authors), others decry modern science, and some place their confidence in a form or pseudoscience, termed "revealed science" while the masses are uninformed, or too busy trying to make ends meet to care.
Those who actually try to evaluate facts have added up the threats from the Chernobly disaster, Three Mile Island, and now the Fukishima accident and have concluded that there is a necessity for reevaluation of our dependance on nuclear power. On the other hand, the Obama administration and the reactionary USA, remain adamantly against change and modernity, and unable to disengage from the money and sway of the nuclear power industry. They refuse to alter plans for expanding our dependency on a source of power now deemed too dangerous to allocate to the geenrations of our children and grandchildren by most of the world's thoughtful leaders.
Today, May 31, 2011, I read in the NYTimes that Germany, under the center-right government of Angela Merkel, fourth largest economy in the World after USA, China, and Japan, has decided to close its 17 nuclear power plants permanently by 2022. They will have eleven years to accomplish that goal. Angela Merkel, a PhD in physics, who knows the science of nuclear power, has concluded that nuclear power is "too dangerous and too unpredictable to put our faith in long term". Germany, which is dependent upon about one-fourth of its power from nuclear (as is the US)has decided to turn to renewables, solar power, hydroelectric, and conservation to make up the difference. The decision,states Merkel, will make the Germans more capable of dealing with the coming energy shortages and disruptions, increase jobs, and give that nation a technical edge in the mid and latter part of the 21 century when other nations will be struggling to survive oil shortages and nuclear exclusions zones which last for thousands of years. Switzerland which also is dependent upon a substantial percent of nuclear derived power is also abandoning these plants by 2035. So goes the attitudes in the more progressive, logical and objective-thinking parts of the modern world. Here in the USA were are still proceeding in the opposite direction.
As has been the case for the last eleven years, under the administrations of G.W Bush and Obama (who seems to have taken on the political identity one may characterizes as a more elegant and erudite "dark phase Bush"), the rest of the cognizant, rational world has attempted to forge ahead into the 21st Century to face the problems visible and foreseen on the horizon, while here in the USA under Obama's leadership we appear to be leading the charge back into the 19th century! To understand that statement let's look at one aspect of our government's decision making history in recent years relating to nuclear power.
The devastating images of the tragedy in Japan have flooded the airwaves in recent months, daily underscoring the helplessness of one of the world's most technically proficient and socially structured societies as they attempt to face one of the most mindboggling, set of multifaceted technical, social, biological and economic crises ever to affect that nation. the images and the facts have pushed decision-makers around the world to properly rethink their dependence on nuclear power. In the crisis in Japan, they see a modern nation faced with myriad problems unleashed by this man-made disaster which will haunt that nation for generations to come and leave parts of it scarce land-area as nuclear exclusion zones for thousands of years. What sane leader would want have his or her nation take the same chances? Which nations could calm their fears by stating: "that can't happen here!" Can they claim: it would not happen here because: we are better prepared, or more technically savvy, or have a more homogeneous and compliant society? No, there are none which can make those statements honestly. Japan is (or was) all of those things as well as the third largest economy in the world. If it can happen to Japan--who built the very same GE-designed nuclear plants we use today here in the USA--it can and will happen here and elsewhere too. Just give it time.
So the world's reaction against nuclear is only a rational response to the recent fallout, both figurative and actual, from the disaster at the nuclear plant at Fukishima, as well as the history of past disasters in that accident-plagued industry (though they will deny it and claim thousands of years of continual safe use). Some of the world's thoughtful and well-informed leaders have rightly put the cap on the foolish and dangerous flirtation with nuclear energy (begun here in USA during the Eisenhower administration only as a public relations ploy). Not so in the USA, where, for a large segment of the ill-informed population, a two-thousand year-old (plus) Judeo-Christian tract holds sway as a the font of all factual information (even regarding nuclear power which could not have been dreamt of by the authors), others decry modern science, and some place their confidence in a form or pseudoscience, termed "revealed science" while the masses are uninformed, or too busy trying to make ends meet to care.
Those who actually try to evaluate facts have added up the threats from the Chernobly disaster, Three Mile Island, and now the Fukishima accident and have concluded that there is a necessity for reevaluation of our dependance on nuclear power. On the other hand, the Obama administration and the reactionary USA, remain adamantly against change and modernity, and unable to disengage from the money and sway of the nuclear power industry. They refuse to alter plans for expanding our dependency on a source of power now deemed too dangerous to allocate to the geenrations of our children and grandchildren by most of the world's thoughtful leaders.
Today, May 31, 2011, I read in the NYTimes that Germany, under the center-right government of Angela Merkel, fourth largest economy in the World after USA, China, and Japan, has decided to close its 17 nuclear power plants permanently by 2022. They will have eleven years to accomplish that goal. Angela Merkel, a PhD in physics, who knows the science of nuclear power, has concluded that nuclear power is "too dangerous and too unpredictable to put our faith in long term". Germany, which is dependent upon about one-fourth of its power from nuclear (as is the US)has decided to turn to renewables, solar power, hydroelectric, and conservation to make up the difference. The decision,states Merkel, will make the Germans more capable of dealing with the coming energy shortages and disruptions, increase jobs, and give that nation a technical edge in the mid and latter part of the 21 century when other nations will be struggling to survive oil shortages and nuclear exclusions zones which last for thousands of years. Switzerland which also is dependent upon a substantial percent of nuclear derived power is also abandoning these plants by 2035. So goes the attitudes in the more progressive, logical and objective-thinking parts of the modern world. Here in the USA were are still proceeding in the opposite direction.
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