big on love, tolerance, and the human potential
It’s said BP captured 800,000 barrels. At the start of the disaster 62,000 barrels of oil a day were escaping, falling slightly to 53,000 barrels per day, reaching a total of about 4.9 million barrels. Saddam’s war time sabotage was about 5 million barrels.
“And where will we hide, when it comes from inside?” — James Taylor
I often wonder if journalism and watchdogs as we know them, and of course our elected in all branches, will ever or can ever blow an alarm or close the gate against marauding and pilfering.
The playing field is a ski run. If there were a Capitol Hill on every hill perhaps we could defend ourselves. Is no government or institution strong against brigades of slavish wit intending to slice our apple?
We will meet and moan in tea parties forever until we solve respect.
Here’s another example pointing out our weakness – standing like corn for combines against banks and usury.
What lies ahead, over the next year and beyond, will require far larger armies of lawyers, economists, finance experts and just plain able bodies and minds to monitor and influence the rulemaking process.
Rumor has it that one bank alone plans to set up 100 teams of employees tasked with particular rule makings. And that is just one bank.
That’s 100 teams clamoring for your pocket. Imagine that? Blackbeard could be so lucky to commandeer boatloads of pirates!
Oh what will we do?
Who puts the lie to Republican pretense?
No no and no. That’s the wrong answer.
Republicans… the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance — vulgar Keynesianism robed in the ideological vestments of the prosperous classes.
This approach has not simply made a mockery of traditional party ideals. It has also led to the serial financial bubbles and Wall Street depredations that have crippled our economy.
Depredations: plundering and pillaging and marauding. Who said Republicans are ‘robed in the ideological vestments of the prosperous classes‘? Reagan’s keynote Budget Director, David Stockman.
While reading his piece at the NYTimes, I think he’s trumpeting. He sells raw fix, a kitchen table simplicity he’s sold throughout his career. Perhaps not more wise but deeply disappointed. And oh so very much blame.
Stockman is gunslinging debt reduction by pricking Wall Street with 0.15% transaction taxes, perhaps to sell the grail of a universal flat tax.
I’ll stay with my opinion that tweaking rates along with ascetic retrenching merely satisfies zealots of balanced books, a loud reply to the sting of exploitation but narrow, and no more able to unwind our errors than the sloppy triumph of Reagan, our Robin Hood in reverse.
Voting belief has not been smooth and its era of opinion not very helpful. A gritty fix is upon us, a nifty trick of humanity, “What are the questions?” instead of “These are the answers.”
There might come something to gain from understanding not money’s theory but where the money went.
Ladies and gentlemen, gold is the only investment to safeguard your livelihoods.
This is about gold, currency, the end of the USA. Everybody needs gold. Glenn Beck is an upstanding man for selling us gold. We need it so badly to protect us from Obama, Pelosi, Bernanke and the Trilateral Commission.
click for ginormous chart of deceit
“Obviously all these new boiler room high pressure sales groups that used to be pushing sub-prime financing are now trying to convince the unsophisticated listeners of right wing talk that they better buy gold before the dollar becomes worthless because of Obama’s reckless spending.”
The Subcommittee on Commerce, Trade, and Consumer Protection will investigate the business practices, fraud, deceit and aggressive sales tactics of Goldline International and Fox News’ Glenn Beck (including Mike Huckabee and Fred Thompson) to sell overpriced gold coins.
Broadcasting to millions to prey upon nest eggs, how do firms like Goldline make money? The average Goldline markup was 90% above the melt value of the coin. The largest markup was 208% above the melt value. The average markup is 47% higher than competitors.
By selling gold at twice the melt value, the price of gold would need to double for suckers to break even on their so-called ‘investment’.
Requiring reasonable behavior is an interesting task. Milton Friedman assumed we would all learn by trial and error. But under an assault of false choices, not one of us will live long enough to learn how to filter out all the crap. (Can we prove that? See pdf here: “Individual Learning About Consumption”).
Education is good. Con requires restraints.
The top 10%
Mountains of cash.
Hyperactive speculation.
Ponzi finance.
Captured government.
Column B – 90% of us
Anemic spending power.
Huge household debt.
Declining real wages.
Fewer jobs, more hours.
Some say laissez-faire markets are a good thing. It’s the ideology we’re sold and the hype we’ve bought.
Some say the economy is better served through pure competition. Here’s a small example, one of thousands, where leaving the marketplace alone is said to be good for the country. A case of corporate fine-print, a clause on the back of a cruise ship ticket says that if you want to sue, you have to sue in Florida. Of course, this is good for consumers!
Forcing people to sue in Florida deters frivolous lawsuits and lowers costs for the company. It can pass those savings onto consumers. Because if Alpha Cruise Lines doesn’t, then Beta Cruise Lines will.
Unhindered by consumer protection, why didn’t the cruise lines pass those savings onto consumers? Because they put that cash into shareholders’ pockets.
What did people at the top do with their money prize?
People at the top – high net worth individuals, investment funds, pension funds and the like – greatly increased the demand for complex financial products as they searched for ways to store their wealth.
The proliferating billionaires around the world pressured organizations like Goldman Sachs and JP Morgan to supply them with complex financial securities.
As long as this external pressure to supply complex financial securities for the super-rich to store their wealth continues, the financial system will remain prone to generate bubbles, followed by crashes.
You’d think we’d have reams of data describing the habits of the top 10%, 1%, .5%, .1%. So what’s the problem? By merely seeking preservation in a frenzy of packaged finance and global leverage, the wealthy and their wealth are significantly under-performing.
Our country’s oldest continually operating family farm is up for sale.
New Hampshire’s Tuttle Farm was founded by English settler John Tuttle with a 1632 land grant from King Charles II. The landmark property has passed from father to son for 11 generations.
“A lot of people won’t drive a few extra miles for fresh vegetables. They are going to Wal-Mart and Target and trying to save whatever they can, and we don’t have the buying power to compete.’’
“Our bodies are just basically worn out. It’s hard to conduct a farm and a business at the same time. It’s more than we can handle at this time.”
The farm was turning a small profit until the recession.
There’s 4 million acres of family farmland in use between 2002 and 2007, an area roughly the size of Massachusetts. After 1982 the nation has lost more than 41 million acres of rural land.
The effects of global warming on water supply in the United States.
More than 1,100 counties — one-third of all counties in the lower 48 — will face higher risks of water shortages by mid-century as the result of global warming. More than 400 of these counties will face extremely high risks of water shortages. – Natural Resources Defense Council
We can argue the accuracy of various models of temperature and precipitation, that likelihood is never science. Or we can agree that business-as-usual is a risk to water supplies.
The net worth of housing has fallen to 1980s levels. Seems as if forty years of free markets, tax jiggering and game theory is a mere Republican frenzy. Hyped and over-generalized ideology has returned us to where we were.
“If I had a machine gun I’d shoot every one of them white sons of bitches.”
Henry Makarka was talking about the executives who came to him and his tribe 40 years ago to purchase their land at Valdez.
They were from the companies now known as Exxon and BP. The Tatitlek were paid the handsome price of $1 for Valdez, which the companies knew was worth billions.
How does BP get away with it? The same way the Godfather got away with it:
BP’s CEO of Alaskan operations hired a former CIA expert to break into the home of a whistleblower, Chuck Hamel, who had complained of conditions at the pipe’s tanker facility. BP tapped his phone calls with a US congressman and ran a surveillance and smear campaign against him.
When caught, a US federal judge said BP’s acts were “reminiscent of Nazi Germany.”
There was a leaking control pod. Equipment to secure the well wasn’t used. Test results indicating danger were ignored. Routine tests weren’t even run. The alarms were jiggered.
Jarvis DeBerry at Times Pecayune:
If the allegations are true, and rampant rule-breaking by BP led to the fatal and ecologically destructive explosion, it doesn’t necessarily follow that every safety rule that’s needed is already in place. But if reports … are true and BP and Transocean were cutting corners on a well with evident problems, then it’s right to ask if those 11 men wouldn’t still be alive if the companies had played it by the book.
Accidents happen. Weather events are acts of God. But greed and recklessness are vices.
Combine that with a seeming disregard for the lives of the workers and the sanctity of the Gulf, and you get a more fitting explanation.
Adjacent comment:
It is the universal greed that we all share. And by the way, the profit motive built America. Individuals working as hard as they can to make as much as they can to enjoy the good life as well as they can.
And we are all greedy: ‘If there is one place in heaven remaining I want God to give it to me not you. If there are only two, I want it to go to my dog. I am greedy that way.’
…the problem is that a great deal of the established media is made up of people who believe very strongly that our wealthy betters really are morally superior…
Alex Pareene at Salon:
It may surprise you to learn that these wealthy elites think the biggest problem facing America today is that the wealthy elite have to pay taxes, while the poor and unemployed sit around collecting Social Security and food stamps and unemployment benefits.
Is there anything — anything! — worse than a bunch of rich idiots telling a bunch of other rich idiots how hard rich idiots like them have it these days, and how everything would be better if only we just put these rich idiots in charge?
More on gross abuse from the rich and mean-hearted:
Specifically, we claim that higher income inequality between executives and ordinary workers results in executives perceiving themselves as being all-powerful and this perception of power leads them to maltreat rank and file workers.
We present findings from two studies – an archival study and a laboratory experiment – that show that increasing executive compensation results in executives behaving meanly toward those lower down the hierarchy.
Jim Harrison said:
I wish there were a hypocrisy index to go along with measurements of cruelty since a huge contradiction is built into a system where the sociopaths who control companies depend on the integrity of their employees…
Maxine Udall asks:
There is more at stake here than our economy. We must, as a nation, decide whether we want to continue on the path we have been on since roughly 1980.
Do we want to continue to reward disproportionately a small fraction of the population that (based on recent performance) seems better at misallocating financial, physical, and human capital through speculative endeavors?
Do we want to continue the trickle down of meanness?
Roger Gathman stomps:
I think, as you trace the amazing split between the income gains of the wealthiest 10 percent and the other 90 percent since the eighties, you will find that the more disposable money the wealthiest have, the more they will use it to ensure their positions. I don’t find this very puzzling.
And a rant from Mick Arran:
We are locked down, locked into a system which gives rights to the rich, the powerful, and the corporate.
And it doesn’t seem to matter to anyone that this only makes things worse and worse.
Believing that giving the rich control of the society will lead to economic prosperity for everyone is now dogma for the Religion of $$$. We’ve decided to take that on faith because the rich told us to.
The largest tent in the world is the Khan Shatyr residential and entertainment center, an indoor city for 20,000 recently opened in Astana, the new capital of Kazakhstan.
Covered in layers of translucent fabric, it’s 650 feet across, over 2 football fields, and 500 feet high.
“We are beginning to see the rise of the mega-building —climatic enclosures enveloping small towns—mainly because they are being built in unpleasant climates.” The roof support is 192 radial 3 inch cables with 16 wrapped restraints. How many cables for Buckminster Fuller’s dome over Manhattan?
• 1% own nearly twice as much as they did 15 years ago.
• 66% income growth after 2001 went to top 1%.
• 83% of all stocks are in the hands of 1%.
• 10% extract 50% of all national income.
• 50% of us own less than 1% of all income.
• 80% of us have only 7% of all cashable assets.
• Banks own more housing than all Americans put together.
• Only 5% of incomes matched rising housing costs since 1975.
• Executive pay jumped to 500 to 1 since 2000.
• Wall Street bonuses were up 17% over 2008.
• %16 more millionaires in 2009, to 7.8 million.
• 61% of Americans live paycheck to paycheck.
• 36% have no retirement savings.
• 43% have less than $10,000 for retirement.
• 24% postponed retirement in the past year.
• ~1.4 million filed bankruptcy in 2009, up 32% over 2008.
• Finding a job has risen to a record 35.2 weeks.
• 40% are employed in low pay service jobs.
• Only federal pay is more than crushed private sector.
• 40 million are on food stamps; up to 43 million in 2011.
• 21% of children live below the poverty line – highest in 20 years.
“We all hate the moratorium, because its going to hurt us badly, but if anyone needs a reason to understand why its been put in place, this is it. This was not a freak accident and the widespread disabling of safety systems was not unusual.” – Mike Williams, Transocean
The rig’s one danger alarm never sounded, was disabled, could not be heard. If it had, workers in the drilling area — the shaker room, the mud room, the pit and pump room — would have immediately evacuated. The rig’s general alarm and indicator lights were set to ‘inhibited’ meaning they would record high gas levels or fire in a computer, but wouldn’t trigger any warning signals.
Experts have said it was a mistake to displace the mud before the well was completely plugged, because the mud weight is the first defense against natural gas or oil kicking up and blowing out the well.
“Maybe they were trying to save time. At the end of the well sometimes they think about speeding up.”
Underwater plumes of oil have been confirmed.
Generally 0.8 miles deep and up to 15 miles from the wellhead, the white dot in this Joint Analysis Group screen shot.
The 50-mile drive to work and 5-mile drive to the supermarket. a crisis in the boomtown mentality of cheap energy, unlimited water, and effortless credit.
Beleaguered communities are now left holding the bag of an economic house of cards come crashing – harbingers of the consequences of an unsustainable economic, energy and development model.
Too often efforts toward sustainability remain just as nebulous and hard to define as the very word itself. Many aspire toward “sustainability,” but most need help in achieving it, especially at municipal or regional scale.
The banks’ contribution to the economy has been overstated.
There’s terrific error that crashed huge engines. Folks are hurting, economists babble, politicians cheek, and we oscillate between suspicion and credulity—blame on one edge, blindness on the other.
Good Grief. Why doesn’t anyone talk about the corruption that’s behind all of this?
Governments are supposed to regulate a whole range of activity to ensure that the public get a fair deal and are protected from naked greed. The problem is that many of the ‘regulated’ industries have so much money behind them that companies simply bribe their way around the regulators.
In this case the financial industry pumped billions into politicians and regulators to buy a regulatory regime that suited them. Look at donations to political parties and individual politicians. Look at regulators and politicians becoming employees of regulated companies, politicians becoming lobbyists, bankers becoming regulators…. Corporate insiders wrote their own legislation. It goes on and on.
What about companies that step out of line? Fines for misbehavior are a joke. Goldman’s fine is equivalent to a couple days profit. Why? That’s the financial industry. Look at oil, pharmaceuticals, agriculture, retail, media, real estate… goes on and on.
Corruption and greed.
The whole thing stinks to high heaven. What is being done about it?
The chief financial regulators of Britain are in the news recently more for their candor than their policy. Andrew Haldane, executive director for financial stability at the Bank of England, says the banking industry is “as much mirage as miracle”. There is something wrong with the calculations.
The financial industry has done so well for itself, in short, because it has been given the license to make a leveraged bet on property.
The riskiness of that bet was underestimated because almost everyone from bankers through regulators to politicians missed one simple truth: that property prices cannot keep rising faster than the economy or the ability to service property-related debts.
The cost of that lesson is now being borne by the developed world’s taxpayers.
Banks increased risk-taking by selling ‘insurance policies’… offered steady returns in good times but disastrous losses in especially difficult times, but these greater risks brought little economic benefit.
And oversold:
We’ve spent decades sanctifying expedients as if they were worthy substitutes for restraint, discipline, justice or common sense.
The debt of G. W. Bush and dishonest Republicans:
2008 $ 10,024,724,896,912.49
2007 $ 9,007,653,372,262.48
2006 $ 8,506,973,899,215.23
2005 $ 7,932,709,661,723.50
2004 $ 7,379,052,696,330.32
2003 $ 6,783,231,062,743.62
2002 $ 6,228,235,965,597.16
2001 $ 5,807,463,412,200.06
2000 $ 5,674,178,209,886.86
Government spending has accounted for about 20% of US GDP. More spending may boost the economy in the short term. Reducing debt is important in the medium term. But fiscal and monetary policy are not universally potent tools, and politically motivated austerity could be an abject failure.
70% of our economy is consumption and 30% is debt and finance. In the aftermath of crisis there’s revulsion to both, but the result might be permanent sluggishness and unemployment. How do we shift from one kind of economy to another?
Steve Ludlum:
Work is the activity that generates the return from capital.
Without work the value of capital by itself is zero.
This is the real hazard of the current world-wide rise in unemployment.
Workers are getting poorer and cannot afford high prices.
The productive work of each wage earner is worth less than the oil each worker requires to do the work.
The only way out of the ongoing economic/energy crisis is for nations to revalue labor upward – by increasing worker productive capacity, skill and capability – and by going off oil as they went off gold 70+ years ago.
The only alternative is to find four or so extra Saudi Arabias.
The structural problem began in the late 1970s when a wave of new technologies reduced the costs of outsourcing jobs abroad. Technologies took over many (remember bank tellers? telephone operators? service station attendants?).
Meanwhile, as the pay of most workers flattened or dropped, the pay of well-connected graduates of prestigious colleges and MBA programs—the so-called ‘talent’ who reached the pinnacles of power in executive suites and on Wall Street—soared.
Companies slashed jobs and wages, cut benefits, shift risks to employees, bust unions, and flee offshore. Regulation shriveled.
The puzzle is why so little was done to counteract these forces.
With increasing fervor over three decades, government deregulated and privatized.
It increased the cost of education and cut public transportation. It shredded safety nets. It halved the top tax rates, boosted sales and payroll taxes, taking a bigger chunk out of the middle class and the poor than of the well-off.
It’s not that our wobbly economy was healthy and suddenly crashed.
We’ve been going nowhere and suddenly crashed. Flat line & chaos.
The easy-peasy-it-hasn’t-been-this-bad-since-the-roaring-twenties question is “Who’s really diluting our prize?” Since wealth is what counts, we can say it’s the 10% that own the United States of America.
The top 10% have about 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. The top one percent have about 40% of all privately held stock, 60% of financial securities, and 62% of business equity.
15 Mind-Blowing Facts About Wealth And Inequality In America.
Pure interests – expressed through lobbying power – were undoubtedly important to several key deregulation measures in the US, whose political system and campaign-finance rules are peculiarly conducive to the power of specific lobbies.
Adair Turner, Chairman of the UK’s Financial Services Authority:
But the belief system of regulators and policymakers … tended to exclude the possibility that rational profit-seeking by professional market participants might generate rent-seeking behavior and financial instability rather than social benefit – even though several economists had clearly shown why that could happen.
Policymakers’ conventional wisdom reflected, therefore, a belief that only interventions aimed at identifying and correcting the very specific imperfections blocking attainment of the nirvana of market equilibrium were legitimate.
…[I]t was beyond the ideology to recognize that information imperfections might be so deep as to be unfixable, and that some forms of trading activity, however transparent, might be socially useless. …
Here, I suspect, is where the greatest challenge for the future lies.
Toolpusher control console at BP Macondo. Installing the new 80-ton valve stack. Free pizza. Panic button.
Deepwater Horizon was a top performing rig. In a wake of scorn, if you can’t drill in the Gulf, where will you drill?
Again and again it’s easy to see the lazy but loud ideology of Reagan Republicans that built this crash. As the NYFed points out too late, “The shadow banking system contributed significantly to asset bubbles in residential and commercial real estate markets prior to the financial crisis.”
Unfettered markets gain heat that too easily burns us. Tax cuts for the wealthy, pork barrel to favorites, and concession to factions are the voodoo that brought us a zombie economy. Much more disturbing, crisis is Republican politics.
“Prosperity comes from everybody working for everybody else.”
Matt Ridley:
Throughout history, the engine of human progress has been the meeting and mating of ideas to make new ideas. It’s not important how clever individuals are.
If we pull back and take a long-horizon perspective, the free exchange between people of goods, services and especially ideas leads to trust between strangers and prosperity for more people.
Think of it as ideas having sex.
Exchange is to cultural evolution as sex is to biological evolution.
Matt Ridley’s TED presentation: When ideas have sex
Matt Ridley’s mating of ideas at Scientific American.
What’s free market laissez-faire left us?
Six people looking for work for every job opening.
Our corps of leaders struggle with intense challenges, yet argue abstract and impotent issues as if to hide under political sophistry. When not pilfering, today’s leaders seem sloppy and generally very very poor-witted.
Of every dollar of real income growth between 1976 and 2007,
58 cents went to the top 1 per cent. – Fault Lines, University of Chicago
Mark Thoma asserts: “I have argued for a long time that one sign that we are finally in a self-sustaining recovery will be private money coming off the sidelines and taking risks without government inducements to do so.
“So far, we aren’t seeing that to any significant degree. The president can talk all he wants about how confident we should be in the economy (perhaps at risk to his own credibility since it’s obvious we still have problems to solve), but confidence won’t build until the private sector takes the lead.
“The mistake has been that the government has not done enough to prime the economic pump so that the private sector can then take over on its own, not that it has done too much.”
Social contracts are breaking down in the US and Europe:
I think of it as the end of ‘The Deal’. What was that deal? It was the post-second-world-war settlement: in the US, the deal centered on full employment and high individual consumption. In Europe, it centered on state-provided welfare.
“Well we can no longer afford that.” But that’s simplistic and misleading. We DID afford it.
What led to the change in the deal was the staflationary 1970, which was driven both by a commodity prices (most notably the oil crisis) and labor bargaining power (workers were able to demand that wages keep pace with inflation, which when inflation got beyond a modest level, stasis became self-reinforcing).
So the new program was to reduce workers’ bargaining power, both by combating unions, and by tolerating un- and under-employment. Rising worker wages that had been seen as crucial to greater prosperity was quietly abandoned as a policy goal. But this has profound implications.
As rising income inequality demonstrates, the benefits of growth accrued substantially to those at the very top. Absent a few wastrels, people with that level of income are not going to spend as much of their income on consumption as those less well off. Thus (in very crude terms) Keynes’ problem of the paradox of thrift, that the understandable desire of households to save can result in insufficient demand, becomes even more acute when it is pretty much only the rich who are getting richer.