Well, you could say that American bankers, empowered by a quarter-century of deregulatory zeal, led the world in finding sophisticated ways to enrich themselves by hiding risk and fooling investors.And wide-open, loosely regulated financial systems characterized many of the other recipients of large capital inflows. This may explain the almost eerie correlation between conservative praise two or three years ago and economic disaster today.
Stolen from the middle class
Artur P. Schmidt, a well-known economist and economic journalist in Switzerland:
If a country’s income disparity has become so large as it has in the United States, economic leverage must be applied for it to be reduced again. Even the Great Depression of the 30s had its starting point in an incredible shift of wealth to a few.
Recent surveys reveal that some 300,000 Americans together earn as much income as that obtained by 150 million Americans in the lower income stratum. Per person, breadwinners in the top group earned 440 times the salary of an average person in the lower income class. As a result, these figures have almost doubled since the year 1980.
It certainly has nothing to do with socialism, if one recovers the money stolen from the middle class from the so-called elites through higher taxes.
You are Enron. We are Rising
You – politicians and CEOs huddled at some trade summit – are like the reckless scamming execs at Enron (of course, we didn’t know the half of it). We – the rabble outside – are like the people of Argentina, who, in the midst of an economic crisis eerily similar to our own, took to the street banging pots and pans. They shouted, “¡Que se vayan todos!” (“All of them must go!”) – and forced out a procession of four presidents in less than three weeks.
What made Argentina’s 2001-02 uprising unique was that it wasn’t directed at a particular political party or even at corruption in the abstract.
The target was the dominant economic model: this was the first national revolt against contemporary deregulated capitalism.
Rethinking Up
If I were aggressive, would I restart promoting monorail? It wasn’t ‘hi-tech’ enough during the last few decades, but it’s practicality might be more achievable in a recession.
Too many look for ideal transportation and current proposals are costly.
I believe that a ‘true’ monorail is an overlooked option. Most proposals require elevated and engineered roadbed but a simple steel-on-steel track over existing routes is the most effective option available.
The right of way is already amortized.
An iron wheel on an iron rail is proven and efficient. Track and beams are both inexpensive and common.
Suspending weight costs less. Too many transit ideas, such as BART or Maglev, lift a costly roadbed into the air, but suspending weight over existing roadway requires far less investment.
A monorail is simple corridor and easy engineering – cargo and passengers, containers or cars, moved over ordinary routes.
Monorail capitalizes unused rights of way, whether over existing roadbed or new point-to-point conveyance. There’s the savings, and the prosperity.
The air value over our roads is a trillion dollar frontier.
Monorail & monobeam links here at the University of Washington.
Texas Transportation Institute offers a 136 page .pdf study here.
Europe Lurks
Insight is hard, and worse, it tires, and dangerously, we’re not always willing to pile bad news atop bad news. It’s best if we know a crisis ends, but sometimes we must endure.
We truly need to know. History is turning now.
Let’s begin our journey by pointing out a regulatory ‘anomaly’ which has allowed European banks to take on much more leverage than their American colleagues and which now makes them far more vulnerable.
In Europe, unlike in the US, it is only risk-weighted assets which matter to the regulators, not the total leverage ratio. European banks can therefore apply a lot more leverage than their US counterparties, provided they load their balance sheets with higher rated assets, and that is precisely what they have been doing.
That is fine as long as you buy what it says on the tin.
But AAA is not always AAA as we have learned over the past 18 months.
Tube Breathing
Studies pile up. We call it research.
The Science blog at Australia Broadcasting says:
Young children who watch television for more than two hours a day double their risk of developing asthma.
Enough to take your breath away.
Cool names make cool foods
Big news for parents of young kids: 186 four-year olds given carrots called ‘X-ray Vision Carrots’ ate nearly twice as much as they did when simply labeled as ‘carrots’.
Trees Matter
Why strong policy is important:
Tropical trees in undisturbed forest are absorbing nearly a fifth of the CO2 released by burning fossil fuels.
The 40 year study shows that tropical forests remove a massive 4.8 billion tons of CO2 from the atmosphere each year.
“It’s well known that about half of the ‘missing’ carbon is being dissolved into the oceans, and that the other half is going somewhere on land in vegetation and soils, but we were not sure precisely where.”
About half the total carbon ‘land sink’ is in tropical trees. ScienceBlog
Challenging Corruption
From the blog of the Global Governance unit of the World Bank Institute:
The global financial crisis, triggered by the mortgage and financial derivatives debacle in the US was not just a failure of dogmatic ideology, or of know-how, or of a technical regulation.
As illustrated at the outset, powerful vested interests, at the intersection between politics and business, and corruption, did play a role in shaping the extent and type of oversight, the absence of transparency, the regulations, and their implementation.
Enter now the problematic field of study of corruption, which has many challenges nowadays. One of them is having underplayed for too long the study of misgovernance in the financial sector.
The basics first: the way corruption is defined is flawed…
The interpretation of the traditional definition of “abuse of public office for private gain” is often ‘legally’ biased towards unearthing evidence that an egregious illegal act has been committed, and, further, biased towards pointing a finger at a public official as the main culprit.
I thought this definition was inadequate years ago…
…the focus on corruption needs to move away from exclusive focus on the ‘abuse of public office’ and squarely acknowledge that corruption often involves collusion between the public and private (and at times outright capture by the private potentates).
Further, corruption ought to also encompass some acts that may be legal in a strict narrow sense, but where the rules of the game and the state laws, policies, regulations and institutions have often been shaped in part by undue influence of certain vested interests for their own private benefit (and not for the benefit of the public at large).
I want to focus on one factor that has often been kept under wraps: the regulatory and policy capture by vested interests. This has been years in the making.
A frank and open debate about this issue, grounded on sound analytics and data, is overdue.
Therefore, it makes sense to have a neutral and broader definition of corruption, akin to “the privatization of public policy”.
More here: Why Does Corruption Thrive?
The Bulging Pocket and the Rule of Law…
Corruption acts as an extra tax on citizens.
Corruption leads to lower levels of economic growth and to ineffective government.Corruption amounts to an attack on the everyday quality of life of everyday people. [summary] [author’s free book]
DanaGarrett at Clipmarks says:
The FBI is conducting more than 530 investigations of corporate fraud amid the financial meltdown; 38 involve fraud directly related to the economic crisis.
“A thinner line than we acknowledge divides “self interest” and fraud. When no one is watching, “self interest” will blur the difference. But when someone is minding the store, self interest can be a engine of innovation and prosperity. That only occurs when the government realizes that its proper role is to get on, not off, the backs of big business.”
Darn near Shakespeare:
“Enter now the problematic field of study of corruption… “A thinner line than we acknowledge divides self interest and fraud…
By the wealthy few
Michael Hudson, Distinguished Research Professor, University of Missouri, points out the “rhetorical smokescreen organized by financial lobbyists seeking to muddy the ideological waters sufficiently to mute popular opposition to today’s power grab by finance capital and monopoly capital”.
Enjoy. It’s an eloquent exposé and a rant as easy to read as the cadence above.
How is it that Alan Greenspan, free-market lobbyist for Wall Street, recently announced that he favored nationalization of America’s banks…?
The answer is that the rhetoric of “free markets,” “nationalization” and even “socialism” (as in “socializing the losses”) has been turned into the language of deception to help the financial sector mobilize government power to support its own special privileges. Having undermined the economy at large, Wall Street’s public relations think tanks are now dismantling the language itself.
…
Doublethink and doubletalk with regard to “nationalizing” or “socializing” the banks and other sectors is a travesty of political and economic discussion from the 17th through mid-20th centuries. Society’s basic grammar of thought, the vocabulary to discuss political and economic topics, is being turned inside-out in an effort to ward off discussion of the policy solutions posed by the classical economists and political philosophers that made Western civilization “Western.”Today’s clash of civilization is not really with the Orient; it is with our own past, with the Enlightenment itself and its evolution into classical political economy and Progressive Era social reforms aimed at freeing society from the surviving trammels of European feudalism. What we are seeing is propaganda designed to deceive, to distract attention from economic reality so as to promote the property and financial interests from whose predatory grasp classical economists set out to free the world. What is being attempted is nothing less than an attempt to destroy the intellectual and moral edifice of what took Western civilization eight centuries to develop, from the 12th century Schoolmen discussing Just Price through 19th and 20th century classical economic value theory.
Any idea of “socialism from above,” in the sense of “socializing the risk,” is old-fashioned oligarchy – kleptocratic statism from above.
The result is a regime of insider dealings and oligarchy – rule by the wealthy few.
Streams have been wasted
Roughly 7,000 square miles off Louisiana is dead – not enough oxygen to sustain fish or fauna.
Except oxygen-devouring algae.
There are more than 450 dead zones around the world.
An increase in macroalgae or phytoplankton is usually the first ‘visible’ sign that a system is dying.
Shutting down fisheries soon follows, but of all things, reviving our streams can prevent dead oceans.
America is blessed with many, many streams, but we need to pay attention. In too many cases, our streams have become ditches and canals that we use merely to drain urban runoff or channel irrigation.
We’ve forgotten that a stream is also what lives nearby – trees, brush, grasses and abundant life in the soil. These capture fertilizers and phosphorous from soaps and urban chemicals and process pollutants before it travels to lakes, rivers and coastlines.
“Protecting drinking water and preventing harmful coastal “dead zones”, as well as eutrophication in many lakes, will require reducing both nitrogen and phosphorus as well as toxic pollution.
“Because streams and rivers are conduits to the sea, management strategies should be implemented along the land-to-ocean continuum. In most cases, strategies that focus only on one pollutant will fail.
“By focusing only on minimizing phosphorus in our fresh waters, and ignoring nitrogen inputs, existing management strategies are exacerbating the decline of coastal ecosystems.”
Instead of millions of raw channels and pipes forcing dirty water into lakes and oceans, our streams must become living corridors in order to capture and reduce pollutants before they reach the sea.
Fix-A-Ditch might be another jobs engine we need. Our localities and farmlands have ignored streams for too many decades and it’s time for a national repair. There’s much research and support for healthy stream corridor.
We may not eat well unless we stop passing the problem downstream…
