A coup d'état of the banksters

We are soon going to find out if the concept of democracy has any meaning at all in USA or are the self-appointed financial Masters of the Universe going to continue to run things (badly).

Obama Must Assert Democratic Control Over Economic Forces

Michael Sandel, Political Philosopher, Harvard University

Posted: August 30, 2010 07:14 PM

From the Spring Democracy: A Journal of Ideas symposium, "What Happened?": Obama can still redefine liberalism, but he must bring economic power to heel.

Imagine a president, or a presidential candidate, taking on Wall Street in blunt language such as this: "We have been dreading all along the time when the combined power of high finance would be greater than the power of the government. Have we come to a time when the president of the United States or any man who wishes to be the president must doff his cap in the presence of this high finance, and say, 'You are our inevitable master, but we will see how we can make the best of it'?"

Or this: "The supreme political task of our day is to drive the special interests out of our public life."

Or this: "Through new uses of corporations, banks, and securities," a privileged economic elite has "reached out for control over government itself," rendering political equality "meaningless in the face of economic inequality. A small group [has] concentrated into their own hands an almost complete control over other people's property, other people's money, other people's labor -- other people's lives."

Today, mainstream commentators and editorial writers would disparage such talk as irresponsible populist rhetoric. But American political leaders have not always been as deferential toward economic power as they are expected to be today. The statements quoted above were not made by far-out radicals, but by Woodrow Wilson (1912), Theodore Roosevelt (1910), and Franklin D. Roosevelt (1936).

It is striking to notice the difference between their liberalism and ours. For these icons of twentieth-century liberalism, the first question of politics was how to subject economic power to democratic control. more

Coup d'Etat: Standard & Poor's Is Now Giving Orders to Congress ... and the American People

Richard (RJ) Eskow, Consultant, Writer, Senior Fellow with The Campaign for America's Future

Posted: August 30, 2010 03:05 PM

There's been a lot of talk recently about the enormous power that's been given to the Deficit Commission, which is co-chaired by Alan "Social Security recipients are milking it" Simpson and dominated by people who have advocated cuts to Social Security and Medicare. But here's an aspect of the story that's gone unremarked: Standard & Poor's, the credit rating agency whose reputation should rightfully have been shattered by the economic crisis, is now dictating policy to the United States government. S&P just put our elected officials on notice: Submit to the proclamations of the Deficit Commission or we'll downgrade our rating of government debt.

That's blackmail, plain and simple. This threat comes from a privately-owned company whose rating process is riddled with conflicts, and which has gotten virtually every critical assessment of recent years spectacularly wrong. Enron? Lehman? Subprime mortgages? They were zero for three. Yet rather than reining back their penchant for reckless proclamations, the chairman of S&P's "sovereign rating committee" said that our elected officials' response to the Deficit Commission would be crucial to its analysis of US debt. John Chambers said last week: "It is very important for the credit standing of the United States that the Congress considers very carefully what the fiscal commission proposes." Just in case his intent wasn't clear enough, he added: "It is very important for Congress to take the required steps." more

The Revenge of Main Street 

by gjohnsit  Mon Aug 30, 2010 at 11:48:24 AM CDT

"You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time." - Abraham Lincoln

Wall Street has a problem.

You see Wall Street functions much like Las Vegas. Their immense wealth depends on the continuing myth that their games aren't rigged, and the willful denial of reality by the suckers. 

Just like Vegas, no one wants to talk about the money they lost playing the stock market. Instead, all you here about is how everyone is getting rich at the blackjack table. If you aren't getting obscenely wealthy betting on interest rate spreads then there must be something wrong with you. 

In reality, the reason why you lost money is because the game is rigged. The House always wins in the end. The suckers are the ones who think there are rules. Like Wall Street, Vegas exists to separate you from your money.

Wall Street may seem all powerful, but like Vegas it has an Achilles Heel - if the people don't feed the beast it will starve. 

If the greed of The House gets too extreme, and the rigging of the games becomes too obvious to ignore, people will stop gambling at the casinos and in the stock market. The House goes broke.

That tipping point, where the willful denial of Main Street starts to break down because the game rigging is so blatant, may have finally been reached. more

 

We need a MAJOR stimulation package

First, we must come to grips with the realization that THIS is the big economic catastrophe the doomsayers have predicted.  We destroyed much of the real economy or just left it to rot and the results are finally showing up on Wall Street.  We can keep bailing out that casino and pretend we have fixed things but the economy won't recover until we fix the underlying problem.

Even the guys in the trading capitals are seeing the evidence.

We're Underperforming The Great Depression

Doug Short, DShort.com | Aug. 23, 2010 

In real (inflation/deflation-adjusted) terms, when did the US market permanently regain the high reached in 1929? The first chart illustrates two answers to the question. One uses the real price and the other uses the real total return.

The remaining charts compare market performance since 2000 with the equivalent elapsed time following the peak in 1929. As the final chart shows, the current real total return over the past decade is worse than the performance over the equivalent timeframe during the Great Depression.

I've used the S&P Composite for this exercise — a splicing of the S&P 500, which was created in March 1957, and the earlier S&P 90 Stock Composite Index, a daily index that dates from January 1928. The chart is based on daily data for the price and the estimated total return calculated with daily interpolations based on quarterly dividends).

For the S&P Composite, the price didn't permanently remain above the 1929 peak until December 1985 — over 56 years later. The total return, with dividends reinvested, took nearly 20 years to achieve the same distinction. more

This next article is interesting mainly for where I found it--an english-language Chinese online newspaper.  The idea isn't especially new--I have been calling the free marketeers low-brow theologians since the days of Reagan.  And Chomsky has been banned from the commercial press for so long most folks have never heard of him in USA.  So here the Chinese give him space to call for the death of Anglo-American finance economics.

Bury the free market religion 

English.news.cn 2010-08-26 09:44:25

by You Nuo and Zhang Zhouxiang

BEIJING, Aug. 26 (Xinhuanet) -- Almost two years into its worst financial crisis since the Great Depression, where is global capitalism heading? "A lot of people have asked me what I think about it," says Noam Chomsky. "Frankly, I don't have an answer." But one crisis will follow another if the existing economic system, in which predatory financial institutions gobble up more than 40 percent of the total profits, is not dismantled.

Chomsky is all of 82 years; a linguist, philosopher, cognitive scientist, political activist and prolific writer rolled into one. He was in Beijing to deliver a lecture on "Contour of world order: Changes and continuities" at Peking University, after which he shared his views on global issues with China Daily.

The economic crisis needs time to subside, and the search for its remedies could be overshadowed by two other crises threatening the world: nuclear proliferation and climate change. It is not possible for just a few intellectuals to tide over the crises, says the author of the famous essay, "The Responsibility of Intellectuals". It needs the involvement of the greater body of the world population.

Known for his research in and radical criticism of capitalism, Chomsky says the collapse of the Bretton Woods system was the beginning of a change that led to the financialization of the economy. Large financial institutions were allowed to make profit greedily and create bubbles all over the world. more

Of course, articles like this make the world's greedheads explode.  When the official press starts quoting Chomsky, it's a good bet the Chinese government wants incomes to rise.

U.S. Execs "Extremely Worried" about China Pay Hikes 

by Sarge in Seattle

Sun Aug 22, 2010 at 11:13:58 PM PDT

Seriously! South China News reports that the dirty rotten greedy heartless scoundrels that are U.S. and Europe's corporate executives are lamenting slave minimum wage pay increases in China.

The prospect of workers in China making a whopping 900 Yuan per month ($132 U.S. Dollars), for God knows how many hours of work and under what conditions, has actually frightened the overpaid, undertaxed greedy bastards otherwise known as CEO's.

First they outsource most of the middle class wage manufacturing jobs to China in order to exploit the most desperate people in the world by rendering them slaves while pretending to employ them for their own benefit. Then, when pay starts to creep up above bare subsistence levels, they become "extremely worried".

These executives, at least a large portion of them, must be sociopaths. They simply do not care about human beings. They do not care about the environment. They do not care about the future for our children. They do not care how many people die by way of starvation, industrial accidents, cancer, lung disease, etc, so long as it serves their intersts. They care about two things: Their own personal exorbitant compensation, and profits for their shareholders.

Upton Sinclair's "Jungle" is alive and well, although it has mostly been outsourced to Asia.  According to a survey of major US and European corporations published this week by Credit Suisse, 40 per cent of executives are either "very worried" or "extremely worried" by rising wages in China. more

Which leads to an interesting question.  Suppose the economics of greed and austerity were replaced by the economics of growth and prosperity and it became cool to talk about economic stimulus packages again, what would you do?  This guy talks about spending a $trillion.  Keep in mind you can hire 20,000,000 people a year at $50,000 for a trillion.  Keep in mind that we just gave the banksters as much as $20 trillion (depending who is counting--$13 trillion below) to bail out the mad video games played with electronic money.  That's 20 million middle-class jobs for 20 years.  There is hardly anything wrong with the USA economy that wouldn't be cured with that many new jobs.

Putting People Back to Work

How Would You Spend a Trillion Dollars?

By STANLEY HELLER

It’s up to the Left to construct a program to put people back to work. The captains of industry can’t do it. Obama won’t do it and the labor movement leadership hasn‘t got a clue other than to buck up the Democrats.

The 500,000 new applicants for unemployment insurance last week surprised all of the “experts” who endlessly repeat the mantra of “slow improvement”. What a croc! 20 million without full time work is the New Normal and that will jump higher in the looming “double dip” recession. Signs of desperation are impossible to ignore. At the start of the month the New York Times wrote about the 1.4 million people who had exhausted 99 weeks of unemployment insurance payments and now were eyeing their new residence … their car. NPR did a story on homeless college students.

For the people on unemployment it’s a bitter path of job fairs, job counseling, Craig’s list scanning, occasional interviews and aimlessly passing the time. And think of the immense waste: millions of work hours that could be used for production or preserving the planet all gone down the drain. There’s also the eight million underemployed going from one dead end temp job to another or working a slew of part time jobs.

Wall Street and the entire U.S. corporate economy have been brought back from the precipice by $13 trillion in subsidies and guarantees. Profits have recovered nicely. And with all this money the corporate world has done zilch when it comes to jobs. The Washington Post reports that non-bank companies are sitting on $1.8 trillion in cash. What they don’t keep in the money market they’re using to buy back their own stock or to gobble up other companies like the digesting of Connecticut’s New Alliance Bank by First Niagara Bank. Bloomberg business news notes that “more productive” companies are buying up less productive ones and that means it might be efficient to fire “employees” at the companies that have been consumed.

We do have a President who talks about jobs all the time and he does have a program. It’s made up of several parts, enormous welfare to the banks and Wall Street in the hopes they’ll start lending, gargantuan weapon sales to fortresses of democracy (like Saudi Arabia) and various stimulus programs from unemployment benefit extensions to cash for clunkers. And the best this has gotten us is the New Normal. more

And so what happens when country's take care of their real economy?  Read how the Krauts sugar-coat their success while there are so many economies around the world in REAL trouble.

Boosting the Euro Zone

How Germany's Export Strength Helps its Neighbors

By Christian Reiermann

Germany has often been accused of threatening its neighbors' economies by relying too heavily on exports and not doing enough to stimulate domestic demand. But it is not the German upswing that is deepening divisions in the euro zone, rather the bloc's common monetary policy.

It has been a long time since Germany could be described as the "sick man of Europe." In terms of economic growth, Germany is now playing in a league of its own, compared to the other members of the euro zone. The country saw growth of 2.2 percent during the second quarter of 2010, compared to the first three months of the year -- more than any other major country in the monetary union.

For German Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble, there is only one thing that worries them about the new development. Germany's new dynamism could revive an old debate which was only recently put to rest: Is Germany growing at the expense of its neighbors?

Statistically speaking, the answer is a clear no. On the contrary, Germany is boosting growth in the euro zone as a whole. Second-quarter growth in the 11 euro countries which have so far presented their figures totaled 1 percent. Without Germany, the other countries' growth would only have been half as high. more

But the official press seems determined to defend a German austerity package (can you say Zeitgeist?)

Germany 'Has Done Everything Right' on the Economy

The German economy is strong but the deficit is soaring.

A soaring budget deficit on the one hand, the strongest growth in years on the other: The news on the German economy is both good and bad. On the whole, commentators say, the politicians seem to have got things right. There are still tough times ahead, however.

The news on the Germany economy in the last few days has been both good and bad. While public borrowing has almost doubled since last year, economic growth is at its strongest in decades and business confidence is on the rise. It seems the costly measures that the German government took to stave off a deeper recession may have worked, but they have punched a massive hole in the state finances.

The Federal Statistical Office on Tuesday announced that the deficit rose sharply to 3.5 percent of GDP in the first half of 2010, putting it on track to break the European Union's budget rules. Net borrowing came in at €42.8 billion ($54.4 billion) -- more than double the €18.7 billion ($23.6 billion) for the first half of 2009. The EU requires its member states not to surpass budget deficits of 3 percent of GDP, but German government officials had already admitted in July that the overall figure for the year is likely to be 4.5 percent, as the bills for financing the country's massive stimulus packages finally come in.

However, recovery from the deep recession of 2009 seems to have come faster than even the most optimistic analysts had forecast. And Germany is hoping its massive austerity package will help it slash the deficit and soon bring it back into line with the EU rules.

On Tuesday the Federal Statistical Office also confirmed earlier numbers that showed the German economy had grown by an impressive 2.2 percent in the second quarter -- the fastest pace of growth since reunification 20 years ago. Consumer spending is also growing, up 0.6 percent in the second quarter -- the first rise in a year -- and there is also an increase in investment by businesses. more

If you raise incomes in Asia, they're going to want to eat better

Eclectica’s Hendry warns of food crisis risk

by James Phillipps on Aug 24, 2010 at 13:26

Eclectica’s Hugh Hendry has warned that the world faces further commodity price rises and a potential food shortage if Asian economic growth continues unchecked.

In a discussion on Newsnight yesterday, the hedge fund manager said the effect of years of underinvestment in agriculture and rapid population growth are now being keenly felt.

‘Asia is putting on fantastic economic growth and if China or Asia does not have a great recession, we will have pressure on the food supply,’ he said.

‘For 30 years, the price of agriculture has collapsed it fell by 90% in real terms so we haven’t invested in the sector. As a world society, we are now acutely vulnerable in the business of feeding ourselves because we have not spent enough and organised the production of agriculture in a manner that is appropriate.’ more

And of course, you just know someone will step in to make a bad situation worse.

The Dangers of Agricultural Speculation

'Price Increases Are Costing Millions of People their Health'

Financial speculators have discovered agricultural commodities, and the result has been skyrocketing prices for wheat, barley and other grains. SPIEGEL spoke with agricultural economist Joachim von Braun about how to curb such speculation and the dangers for the world's poor.

SPIEGEL: Professor von Braun, wheat is now 40 percent more expensive than it was in early July, and the price of barley jumped by almost 20 percent in only one week. Do you think prices will continue to skyrocket?

Braun: In general, we have to be prepared to see prices rise -- and fluctuate heavily at the same time. The situation is very precarious at the moment.

SPIEGEL: Is it already as serious as it was in 2008, when prices shot up resulting in food riots around the world?

Braun: The structural problems remain unresolved. Climate change is advancing. The fires in Russia and the flooding in Pakistan are warning signs. The world's population is growing, land and water are becoming scarce, and people are eating more meat. All of this drives demand and limits supply. In addition, the events of 2008 have politicized global markets to a greater degree than in the past.

SPIEGEL: You are alluding to Russia, which recently imposed a ban on wheat exports.

Braun: The Russian decision has made the markets extremely nervous. The failure of markets in a crisis, as occurred in 2008, leads to a tremendous loss of confidence in global trade, and to hording and old-fashioned autarchy. This harms the poorest of the poor and benefits speculators. more

Yay! off to hang with Tony

At a show in Wisconsin.  So I won't be posting for a few days.  I'll return full of piss and vinegar--pretty sure that will happen.

Jumped a friend's car tonight.  It's kind of a Minnesota skill--I am pretty sure I jumped my first car at around 12.  Always extra fun at night.  But the moon was nearly full, it was 72°F (22° C) with a light breeze, and the dead car was in an otherwise empty but well-lit parking lot.  Trust me, I have performed this task in MUCH worse conditions like minus 25°F (-32 C) and a 25 mph (40 kph) wind in pitch-black darkness.  It's one of those incredibly simple tasks that is amazingly easy to do wrong and I am getting extra cautious in my old age.  If you get it wrong you can actually blow up the battery--happened to a friend and getting battery acid in your eyes is NOT cool!

Anyway, with a bit of fiddling the jumped worked and my friend got his car running.  He had started his day going to the Minnesota State Fair and was beyond exhausted.  Wasn't especially happy the jump didn't work on the first try and was really unhappy a 3.5 year-old battery had left him stranded.  Yes, modern cars beat up batteries but that's pretty young.

Reason gazillion and one for usury laws

As some of you may know, usury is a pet hobbyhorse of mine because if interest rates go too high, loans become mathematically impossible to pay back.  And if there is a legal way to charge usurious rates, then it become legally possible to destroy another human economically.  Usury has been considered a sin in most cultures for thousands of years for GOOD reasons.

Credit Card Companies Jack Up Rates Despite Flagging Economy, Super Low Funding Costs

The banks giveth and the banks taketh away, big time.

Even though banks are getting all kinds of bennies from the Fed and regulators, such as a nice steep yield curve and lots of regulatory forbearance (econ-speak for extend and pretend), they are still out to extract a pound of flesh from the retail borrower. Since that has been a core element of their business model for the last decade, it is probably not so surprising that they are loath to give that practice up.

 Now some will argue, correctly, that consumers need to delever. But guess what? They are paring debt levels, including credit cards. The number of open accounts has fallen by over 20% since the peak, as has the balance outstanding (over 6%). And not all of this has been voluntary. Banks have been shutting accounts and cutting credit lines.

But (drumroll) increasing interest rates, particularly when the banks are getting very sizeable subsidies, means that more of the money consumers pay to credit card companies goes to interest, less to reducing principal (of course, the banks will maintain that they are merely recouping lost income from penalties, since new credit card rules have curbed abusive practices).

A more serious issue is that not all consumer debt is consumer debt. Credit cards have long been an important source of funding for small businesses. Generally speaking, banks will lend only to relatively large, established “small” businesses, or against assets. For instance, Amar Bhide, in his landmark book on new venture, found that the biggest sources of funding for new enterprises were savings, friends and family, and credit cards. Small business owners often use credit cards to contend with temporary cash flow shortfalls or seasonal borrowing needs. And I’ve known some who have maxed out their credit cards to save their companies. more

Sometimes "bankster" is just too mild a word

Shock Doctrine and Fire Sales 

Monday, 08/23/2010 - 12:06 pm by Joe Costello  

How the banks are reaping profits off the misery they created.

Foreman was a panic about to go in the insane

Trying to get the workers out the way of the train

Engineer blowing the whistle long and long

Can’t stop the train had to let it roll on

– Let It Rock, Professor Chuck Berry of St. Louis, Mo

A couple years ago, Naomi Klein wrote a book called The Shock Doctrine. She documented the global pattern of the last few decades where a nation hit with a crisis — natural, financial, political — would become open game for Randian, Friedmanite, University of Chicago sociopaths. They would insist on fire sales for public assets, placing society further under the control of mega-corporations and the local looting class. Asia, Russia, South America, and Africa: the paradigm and documentation was distressing. Today’s Wall Street Journal article on the fire sale of local government assets across the US demonstrates that the Shock Doctrine remains alive and well, while the dominant economic doctrine of the past three decades, the worship of sociopaths, remains firmly entrenched.

The Journal’s story begins:

Cities and states across the nation are selling and leasing everything from airports to zoos — a fire sale that could help plug budget holes now but worsen their financial woes over the long run.

California is looking to shed state office buildings. Milwaukee has proposed selling its water supply; in Chicago and New Haven, Conn., it’s parking meters. In Louisiana and Georgia, airports are up for grabs.

About 35 deals now are in the pipeline in the U.S., according to research by Royal Bank of Scotland’s RBS Global Banking & Markets. Those assets have a market value of about $45 billion — more than ten times the $4 billion or so two years ago, estimates Dana Levenson, head of infrastructure banking at RBS. Hundreds more deals are being considered, analysts say.

Let’s not forget who is in the middle of all these deals — Wall Street. Here you have a list drawn up by the Royal Bank of Scotland, one of the biggest pigs in the pen, recipient of one of the largest bailouts in history, now listing US public assets on the block for cheap. Follow the whole storyline. Wall Street, with a great deal of criminal fraud, tanks the US and global economy, gets bailed out by your tax dollars, and continues to survive largely through cheap Fed money and other public subsidies. Instead of anyone going to jail, they go on a shopping spree with your money, buying your public assets made cheap by the economic collapse they engineered. There you go folks, that is the US economy in 2010. If you can tell me how its any different than mob activity, aside from the fact that no one goes to jail and it’s much, much more lucrative, let me know. Don’t forget, all this is aided and abetted by YOUR elected officials. more

The preservation of archaic traits

Of all the evil notions the Predator classes hold dear, the idea that it is a good thing to get someone else to work for free is the MOST evil.  The manifestations of this belief include usury, slavery, and the one for the "big" boys, empire building.

Our empire builders include a military that is a Leisure Class wet dream.  It will enforce the ECONOMIC wishes of the top Predators.  They will bully ANYONE who gets in their way.  Of course, an imperial military must exhibit all the other great Leisure Class virtues--especially wastefulness and uselessness.  Military golf courses on land-starved Okinawa will have to serve as a perfectly good example of Leisure Class excess in these most corrupt days of the American Empire.

Of course, all this comes crashing down when the costs of empire greatly exceed any possible benefits their plundering ways can snatch.

And of course, there IS another way!  Producers like cross-border interaction as well.  But the whole idea is different.  You want your neighbors and trading partners to prosper.  The best foreign relations triumph you can imagine is turning a former enemy into a happy customer for what you make.  Instead of dehumanizing others so you may some day feel entitled to kill them, you want to learn those best things that other cultures offer so you can make your own life better.

The list of how to manage one's affairs with others without resorting to theft and violence is actually quite long.

Chalmers Johnson, Portrait of a Sagging Empire

by Tom Engelhardt | August 17, 2010 - 9:57am

— from TomDispatch

In September 1998, I was handed a submission for a proposed book by Chalmers Johnson. I was then (as I am now) consulting editor at Metropolitan Books. 9/11 was three years away, the Bush administration still an unimaginable nightmare, and though the prospective book’s prospective title had “American Empire” in it, the American Empire Project I now co-run with my friend and TomDispatch regular Steve Fraser was still almost four years from crossing either of our minds.

I remembered Johnson, however. As a young man, I had read his book on peasant nationalism in north China where, during the 1930s, Japanese invaders were conducting “kill-all, burn-all, loot-all” operations. Its vision of how a revolution could gain strength from a foreign occupation stayed with me. I had undoubtedly also read some of Johnson’s well-respected work on contemporary Japan and I knew, even then, that in the Vietnam War era he had been a fierce opponent of the antiwar movement I took part in. If I didn’t already know it, the proposal made no bones about the fact that he had also, in that era, consulted for the CIA.

I certainly turned to his submission -- a prologue, a single chapter, and an outline of the rest of a book -- with a dubious eye, but was promptly blasted away by a passage in the prologue in which he referred to himself as having been a “spear-carrier for empire” and, some pages in, by this passage as well:

“I was sufficiently aware of Mao Zedong’s attempts to export ‘people’s war’ to believe that the United States could not afford to lose in Vietnam. In that, too, I was distinctly a man of my times. It proved to be a disastrously wrong position. The problem was that I knew too much about the international Communist movement and not enough about the United States government and its Department of Defense. I was also in those years irritated by campus antiwar protesters, who seemed to me self-indulgent as well as sanctimonious and who had so clearly not done their homework [on the history of communism in East Asia]… As it turned out, however, they understood far better than I did the impulses of a Robert McNamara, a McGeorge Bundy, or a Walt Rostow. They grasped something essential about the nature of America’s imperial role in the world that I had failed to perceive. In retrospect, I wish I had stood with the antiwar protest movement. For all its naïveté and unruliness, it was right and American policy wrong.” more

How Close is America's Demise?

The Ecstasy of Empire

By PAUL CRAIG ROBERTS

The United States is running out of time to get its budget and trade deficits under control. Despite the urgency of the situation, 2010 has been wasted in hype about a non-existent recovery. As recently as August 2 Treasury Secretary Timothy F. Geithner penned a New York Times column, “Welcome to the Recovery.”

As John Williams (shadowstats.com) has made clear on many occasions, an appearance of recovery was created by over-counting employment and undercounting inflation. Warnings by Williams, Gerald Celente, and myself have gone unheeded, but our warnings recently had echoes from Boston University professor Laurence Kotlikoff and from David Stockman, who excoriated the Republican Party for becoming big-spending Democrats.

It is encouraging to see some realization that, this time, Washington cannot spend the economy out of recession. The deficits are already too large for the dollar to survive as reserve currency, and deficit spending cannot put Americans back to work in jobs that have been moved offshore. 

However, the solutions offered by those who are beginning to recognize that there is a problem are discouraging. Kotlikoff thinks the solution is savage Social Security and Medicare cuts or equally savage tax increases or hyperinflation to destroy the vast debts. 

Perhaps economists lack imagination, or perhaps they don’t want to be cut off from Wall Street and corporate subsidies, but Social Security and Medicare are insufficient at their present levels, especially considering the erosion of private pensions by the dot com, derivative and real estate bubbles. Cuts in Social Security and Medicare, for which people have paid 15 per cent of their earnings all their lives, would result in starvation and deaths from curable diseases. more

The TOTAL failure of Predator Class economics

Let me start out with a pitch for one of my more popular papers on the difference between Finance (Predator) Capitalism and Industrial (Producer) Capitalism.

Essentially the take-away message is this: Highly regulated economies wildly outperform the "deregulated" ones because well-written rules allow, protect, and encourage honest enterprise.  This matters because a fascination for the facts is utterly essential in building the parts of a high-quality, environmentally sustainable society.  Dishonest people build shit if they even try, or more likely, destroy the efforts of those who would do it right.

Alan Greenspan And His Disciples Are Intrinsically Terrible Regulators

William Black, Benzinga | Aug. 16, 2010, 4:01 PM 

Neoclassical economists have long been convinced that they would make exemplary regulators – and that the unique advantage they would bring to the task is their knowledge that those that regulated the least would regulate the best.

Consider two crises in which economists controlled regulation – the S&L debacle and the U.S. nonprime crisis. Dick Pratt (Federal Home Loan Bank Board Chairman in 1981-83) and Alan Greenspan (Federal Reserve Chairman in 1987-2006) failed because of bad theory, methodology, and crippling ideology. These deficiencies interacted and led them to adopt regulatory policies that were intensely criminogenic.

Dick Pratt and Alan Greenspan shared an ideological hate for regulation. They both pushed deregulation in circumstances where even neoclassical economic theory predicted would be disastrous. Pratt deregulated at a time when virtually every savings and loan (S&L) was insolvent on a market value basis – which neoclassical economics predicts will maximize “moral hazard.” Greenspan refused to regulate at a time when it was becoming the norm for mortgage lenders to engage in deliberate “adverse selection” – which meant that the “expected value” of their loans was negative.

Deliberate adverse selection is a hallmark of “accounting control fraud” (those that control a seemingly legitimate entity use accounting as their fraud “weapon”). The FBI warned publicly in September 2006 that there was an “epidemic” of mortgage fraud and predicted that it would cause a financial “crisis” if it were not stopped. Greenspan took no meaningful action against the fraud. He was the prisoner of the “efficient market hypothesis.” more

When Wall Street Rules, We Get Wall Street Rules

Dean Baker

Co-Director of the Center for Economic and Policy Research

Posted: August 20, 2010 09:47 AM

The middle class is getting whacked by the Great Recession. Fifteen million people are out of work, another 9 million workers can only find part-time jobs, and millions more have given up looking for work altogether. Those lucky enough to be employed are unlikely to see any substantial wage gains for years to come.

Millions of homeowners are facing the loss of their home and more than ten million are underwater in their mortgage. Most of the huge baby boom cohort is approaching retirement with little other than Social Security to support them, now that the collapse of the housing bubble has destroyed their home equity and much of the rest of their savings.

This pain is infuriating for two reasons. First, this was an entirely preventable disaster. The housing bubble was easy to see. Competent economists had long warned of its dangers.

The second reason why the current situation is infuriating is that we know how to get the economy out of this mess. We just need to boost demand. This can be done either with much more government stimulus, more aggressive monetary policy from the Fed, or pushing the dollar down to boost exports.

If this disaster was preventable and we know how to get out of it, why didn't our leaders try to stop it before it happened? Why don't they take the steps necessary now to get the economy moving again?

The answer to both these questions is simple; the politicians work for someone else. more

And then there is the tragedy of David Stockman, a farmboy from Michigan who should have understood that his role in the Reagan administration was to turn loose the Predator classes so they could more viciously prey on the productive people of Michigan.  He is still with us.  Still as confused as ever.  Taibbi writes in Rolling Stone:

David Stockman and the GOP Welfare State 

I'm a little late in taking notice of this hilarious and extraordinary piece of punditry, but it strikes me that not enough attention has been paid to the recent self-crucifying New York Times editorial written by Ronald Reagan's former budget chief and economic Svengali, the notorious Richie Rich weasel David Stockman. 

Stockman, if you remember, was the perfect Picture of Dorian Gray Republican counter-persona hiding behind the broad-shouldered, muscular cowboy image Reagan projected when he was lecturing the world about how poor people had to give up the welfare tit and do their own damn work. The self-reliant tough-guy act was the public face of Republican economics, but laboring quietly behind the facade was Stockman, a rail-thin bean-counting geek with giant glasses who preached the supply-side lunacy of giving the rich a helping hand in the ostensible hope that wealth would magically trickle downhill. 

Stockman was once the arch-priest of supply-side economics, but he's had a conversion over the years. In a piece blasting the legacy of Republican economic policy entitled "The Four Deformations of the Apocalypse" Stockman essentially argues that Reaganomics evolved into a policy that fused the worst aspects of the traditional economic strategies of both the right and the left: 

Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But 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. 

The line about "Keynesianism robed in the ideological vestments of the prosperous classes" is a truth that is both brutally accurate and unfortunately a little too subtle for the Tea Partiers and disaffected Republicans who ought naturally to be struck by it with the most violence. Stockman here is on to a basic truth about the direction in which the economy has evolved in the last decades: a seemingly endless campaign of reckless borrowing and money-printing, undertaken with the aim of propping up an Atlas class whose prosperity under Randian/Greenspanian dogma must be guaranteed at all costs. This goes far beyond the original supply-side thinking of cutting taxes to give the employer class an incentive to create jobs. Instead, this is a welfare state on crack, indulging in massive public borrowing to fuel what Stockman calls the "vast, unproductive expansion of our financial sector." more

End Free Trade

by Peter G. Cohen  

"Under free trade the trader is the master and the producer the slave"

--Pres. William McKinley

America is in crisis. According to a recent Rockefeller Foundation report, in 2009 more than one in five American families without a financial cushion experienced a 25% or greater loss of household income over the preceding year. The Economic Security Index is a new measure of security developed by Professor Jacob Hacker of Yale University.

"More than 14 million people are out of work and many more are either under employed or so discouraged they've just stopped looking. Big corporations, sitting on fat profits even as the economy continues to struggle, have made it clear that they are not interested in putting a lot more people back to work any time soon."

--Bob Herbert in a N.Y.Times op-ed July 27, 2010.

Obviously, something is terribly out of whack in our economic system and is causing widespread suffering. There are two major causes of our current lack of jobs. One is automation, which has vastly increased the productivity of average workers, though not their income. The second is Free Trade, which has shipped our jobs overseas making products cheaper to produce, while eliminating millions of American jobs.

Free Trade has an interesting history. The New Republican Party under Lincoln opposed free trade and protected American industry with a 44% tariff during the Civil War. Opposition continued to be the position of the Republican Party until the Eisenhower administration and the onset of the Cold War. Since then the U.S. government has become a strong proponent of free trade supporting GATT, NAFTA and other trade agreements.

Today free trade is being challenged by the increasing chaos of global warming, while the cost of shipping products back to the U.S. has tripled in the last year. At the same time, China is beginning to lose some of its customers to lower labor costs in Bangladesh, Vietnam and Cambodia.

The result of this out sourcing has been to provide lower costs and increase corporate profits, while American labor has fewer jobs and less real income. No wonder the increasing profits of our economic growth in the last decades has gone almost exclusively to the wealthy. Why do we persist in a policy that has so obviously failed the majority of Americans? more

The problems of climate change have NOT disappeared

In fact, had not the change denialists been on something of a roll, this summer would have certainly finished them off.

Why has extreme weather failed to heat up climate debate?

The world is experiencing the hottest weather on record but politicians have failed to respond. They need a wake-up call

Bill McKibben

guardian.co.uk, Wednesday 18 August 2010 15.30 BST

We've had so much record heat around the world lately that the records themselves are setting records: 17 nations have reached new temperature highs, a new record for records in a year. Pakistan hit (129F) 54C, a new record for all of Asia. Moscow had never hit 100F (38C) before; lately it's been a rare day when the mercury settles lower.

Now scientists have confirmed what's been pretty obvious: the entire world has just come through the warmest six months, the warmest year, and the warmest decade on record. Following the hottest June ever, AccuWeather.com yesterday said July was the second hottest July recorded – and the warmest ever for land temperatures alone.

Just in case those feel like abstractions, here's what they mean in practice: because warmer air holds more water vapour than cold, deluge increases. Hence, Pakistan has seen the worst flooding in its history. Because heat cuts grain yields, Russia has stopped exporting grain, spiking prices. Greenland? Guess what – heat melts ice.

In fact, the only thing that defies common sense this brutal summer is how little political reaction there's been. The UN process continues its post-Copenhagen wander – even many NGOs continue out of sheer habit to support old targets, like limiting the level of CO2 to 450 parts per million (ppm) and a 2C increase in temperature. Why? If the current 390 ppm melts the Arctic, who would aim for 450? In Washington, meanwhile, the Congress and White House have decided there's no need for any kind of urgency: they let the tepid and tame climate bill die without even scheduling a vote. more

German Climatologist on Criticism of IPCC

'We Received a Kick in the Pants'

German physicist Hans Joachim Schellnhuber is one of Angela Merkel's advisers on climate change. In an interview with SPIEGEL, he discusses extreme weather events, global warming's winners and losers, and the effects of the crisis of confidence in climate research.

SPIEGEL: Mr. Schellnhuber, Russia is burning and floods have inundated Pakistan. Are such extreme weather phenomena increasing because of gradual climate change?

Hans Joachim Schellnhuber: Such events certainly do correspond to what we expect from a warmer world. We have seen record average global temperatures for more than a year now, and that increases the likelihood of regional heat waves like the one in western Russia at the moment. Besides, our climate models show that the South Asian monsoon is becoming more temperamental as a result of anthropogenic changes to the environment.

SPIEGEL: There have also been forest fires and floods in the past. Isn't it too easy to automatically link natural disasters to climate change?

Schellnhuber: Of course it would be wrong, from a scientific perspective, to establish this relationship indiscriminately. But it would be just as unscientific to stop searching for such relationships, merely because the public's interest in climate change has temporarily diminished.

SPIEGEL: In Russia, in particular, fire prevention has failed. The forest service was abolished, and fire departments in many places are in terrible condition. Do these major fires show that extreme weather situations don't necessarily lead to catastrophes, but that poor crisis management is really to blame?

Schellnhuber: That's undoubtedly correct. In most cases, it's social mismanagement that creates the conditions for social catastrophes. Often one can get away with having inadequate precautionary measures, provided the weather plays along. But extreme weather relentlessly exposes human mistakes and our crimes against nature. The German state of Brandenburg (editor's note: where the Potsdam Institute for Climate Impact Research is based) offers an example of the right way to do things. Even though there are more forest fires here than in the past, due to global warming, the surface area burned by the fires has decreased substantially, thanks to improved monitoring with smoke detectors. more

In Germany, even the conservatives are committed to doing something substantial about climate change.  That most emphatically includes Frau Merkel

Return of the 'Climate Chancellor'

Merkel Tries to Regain Upper Hand in Energy Debate

By Katharina Peters

Before the financial crisis, Angela Merkel liked to present herself as the "climate chancellor," pushing for CO2 cuts and posing with glaciers. Now, with nuclear energy dominating the energy debate in Germany, Merkel has sought to turn back the clock.

The sky hung low and gray over Krempin, a small town in the state of Mecklenburg-Vorpommern -- not exactly ideal weather for a photo op. Nevertheless, Chancellor Angela Merkel posed gamely for the cameras as someone handed her a sunflower. At least the wind was blowing -- she was here, after all, to visit a wind park.

Then the sky cleared, and the sun even started shining. Merkel's photo-op was saved.

Krempin was the first stop on Merkel's four-day "energy tour" of Germany. The chancellor wanted to find out for herself "where we are strong and what still needs to be done," in the words of her government spokesman. The tour, which will take in wind farms, hydroelectric facilities and nuclear power plants, is being sold as something of an educational field trip. more

An interesting take on China's economy

There are many reports that China has become the second largest economy in the world.  If you count the goods that pass over its borders or the sheer size of the industrial output, this might in fact be the case.

But, there remains a very large question as to whether this means much to the history of industrial development.  The big actors have always built their industrial infrastructure with all the pieces in place.  That's how England, USA, Germany, France, Sweden, etc. did it.  And this is most especially true of Japan which institutionalized industrial self-sufficiency and made it the centerpiece of their national industrial planning--especially after WW II.  In fact, the easiest way to understand Japan is that they would never import anything they thought they could build themselves.  BTW, Korea has been following their playbook to the letter.

By contrast, China offered its massive work force at below-bargain prices to attract runaway industry.  Critics of this approach often call it "screwdriver industrialization."  How this works is you import sophisticated parts (like computer chips) and assemble them into more complex items (like an iPad.)

The problem is that because you didn't go through the stages of figuring out how to make the computer chips in the first place--what kind of schools? what precision tooling? how do you figure out production? etc.--you wind up with giant holes in your partially industrialized economy.  If all this sounds complex just think of it this way--lots of very nice things are assembled in China these days but she has no indigenous industry that can build a Lexus.  Stuff made in China still sports foreign brands.  There is no Chinese Hyundai or Sony or Nikon.

Now maybe this screwdriver-to-the-world approach will ultimately prove the right path.  You capture runaway assembly and learn backward to the parts of the industrial infrastructure you missed.  We will see.  I'll believe China has passed Japan industrially when some product, invented in China, by a Chinese company becomes must-have around the world.

China's economy as No. 2: How it's playing in Japan

Some Japanese hope the news that China's economy has bumped Japan's as the world's second largest will serve as a wake-up call. Most Japanese knew this day was inevitable.

By Gavin Blair, Correspondent / August 17, 2010

Tokyo

China finally overtook Japan and became the world’s second-biggest economy, according to data released this week in Tokyo, which showed minimal GDP growth in the land of the rising sun, while its huge neighbor continued its blistering rise.

While some observers say the change in the economic world order is “purely symbolic,” others say it should act as a wake-up call to both countries – Japan to get its economic house in order, China to become more politically responsible.

And although some Japanese may gaze across the East China Sea with a touch of envy at the growing economic might of the new kid on the block, most knew that this day was inevitable for a country with more than 10 times the population of their homeland’s 127 million.

“China’s domestic expansion is very positive for Japan’s economy,” says Takashi Shiono, an economist at Credit Suisse in Tokyo. “While some Japanese people might feel kind of envious, this is a huge opportunity for Japanese companies.”

It is a view echoed by Dr. Martin Schulz, senior economist at Tokyo’s Fujitsu Research Institute: “The faster China grows, the better it is for Japan.” more

China still a developing country: French economist 

English.news.cn 2010-08-17 11:53:41

PARIS, Aug. 16 (Xinhua) -- China is still a developing country with its per capita income ranking behind although the country has replaced Japan to become the world's "No. 2 economy," a French economist has said.

The economic model of China "is still mainly based on subcontracting, providing labor-intensive segments for re-exportation," Diana Hochraich was quoted by French newspaper La Tribune as saying on Monday.

"Actually, China continues to import 70 percent of what it exports and it is mainly the foreign companies that export sophisticated products from China," said Hochraich, an expert on the Asian economy who has worked with the Ministry of Economy for many years.

"China remains dependent on industrialized countries, both for value-added inputs and for market for its products," she added.

According to Hochraich, China is still far from catching up with the United States and Japan in terms of innovation. "Innovation is the result of cultural sedimentation through generations." more

The New Deal was an amazing human accomplishment

Folks SHOULD know the history of this turbulent time.

Frances Perkins: The Force Behind Social Security 

Thursday, 08/12/2010 - 12:00 pm by Bryce Covert

We may not have our social safety net if it weren’t for her tireless work.

Social Security is, rightly, thought of as one of the major accomplishments of FDR’s presidency. But he wasn’t alone in the fight, and the whole project may have failed if not for the passion of Frances Perkins, his Secretary of Labor. Indeed, Perkins sometimes had to fight against FDR’s whims to secure a package that would ensure a better future for American citizens.

Perkins was born to working-class parents who were very supportive of her education, sending her to Mount Holyoke College for undergraduate studies. Later in her life, what was likely bipolar disorder left her husband, economist Paul C. Wilson, unable to continue his career and act as breadwinner. This may have propelled Perkins into pursuing her own career, to which she devoted all of her energy.

Perkins witnessed the Triangle Shirtwaist Factory Fire of 1911 first-hand, and it galvanized her crusade to protect American workers. After studying economics and sociology at Columbia and Wharton, she worked at settlement houses and then as a factory inspector for New York State. She later became Commissioner of Labor for the State of New York under Governor Franklin D. Roosevelt, who would go on to invite her to be his Secretary of Labor as president. Before taking the position, she brought a laundry list of ideas to FDR as collateral for her acceptance. He accepted them, and she went on to hold the position for 12 years. FDR would eventually name her to 18 separate committees. She worked for reforms in favor of workers and to combat the Great Depression. But her crowning achievement may very well have been the Social Security Act.

During the Great Depression, 6.5 million people were sixty-five or over and few had money set aside for old age — and those who had set money aside saw it disappear in the economic crash. Only about 300,000 had public pensions, 150,000 had pensions from private employers or unions, and 700,000 had federal relief. The rest were on their own. more

Acceptance of Nomination for Second Term

Franklin D. Roosevelt 

June 27, 1936

Democratic Convention, Philadelphia, Pa.

Senator Robinson, Members of the Democratic Convention, my friends:

Here, and in every community throughout the land, we are met at a time of great moment to the future of the Nation. It is an occasion to be dedicated to the simple and sincere expression of an attitude toward problems, the determination of which will profoundly affect America.

I come not only as a leader of a party, not only as a candidate for high office, but as one upon whom many critical hours have imposed and still impose a grave responsibility.

For the sympathy, help and confidence with which Americans have sustained me in my task I am grateful. For their loyalty I salute the members of our great party, in and out of political life in every part of the Union. I salute those of other parties, especially those in the Congress of the United States who on so many occasions have put partisanship aside. I thank the Governors of the several States, their Legislatures, their State and local officials who participated unselfishly and regardless of party in our efforts to achieve recovery and destroy abuses. Above all I thank the millions of Americans who have borne disaster bravely and have dared to smile through the storm.

America will not forget these recent years, will not forget that the rescue was not a mere party task. It was the concern of all of us. In our strength we rose together, rallied our energies together, applied the old rules of common sense, and together survived.

In those days we feared fear. That was why we fought fear. And today, my friends, we have won against the most dangerous of our foes. We have conquered fear.

But I cannot, with candor, tell you that all is well with the world. Clouds of suspicion, tides of ill-will and intolerance gather darkly in many places. In our own land we enjoy indeed a fullness of life greater than that of most Nations. But the rush of modern civilization itself has raised for us new difficulties, new problems which must be solved if we are to preserve to the United States the political and economic freedom for which Washington and Jefferson planned and fought.

Philadelphia is a good city in which to write American history. This is fitting ground on which to reaffirm the faith of our fathers; to pledge ourselves to restore to the people a wider freedom; to give to 1936 as the founders gave to 1776—an American way of life.

That very word freedom, in itself and of necessity, suggests freedom from some restraining power. In 1776 we sought freedom from the tyranny of a political autocracy—from the eighteenth century royalists who held special privileges from the crown. It was to perpetuate their privilege that they governed without the consent of the governed; that they denied the right of free assembly and free speech; that they restricted the worship of God; that they put the average man’s property and the average man’s life in pawn to the mercenaries of dynastic power; that they regimented the people.

And so it was to win freedom from the tyranny of political autocracy that the American Revolution was fought. That victory gave the business of governing into the hands of the average man, who won the right with his neighbors to make and order his own destiny through his own Government. Political tyranny was wiped out at Philadelphia on July 4, 1776.

Since that struggle, however, man’s inventive genius released new forces in our land which reordered the lives of our people.. The age of machinery, of railroads; of steam and electricity; the telegraph and the radio; mass production, mass distribution—all of these combined to bring forward a new civilization and with it a new problem for those who sought to remain free.

Austerity is SUCH a bad idea

These catastrophes were as predictable as the dawn.

Entering a Death Spiral?

Tensions Rise in Greece as Austerity Measures Backfire

By Corinna Jessen in Athens

The austerity measures that were supposed to fix Greece's problems are dragging down the country's economy. Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70 percent in some places. Frustrated workers are threatening to strike back.

The feast of the Assumption of Mary on Aug. 15 is the high point of summer in the Greek Orthodox world. Here in one of the country's many churches, believers pray to the Virgin for mercy, with many of them falling to their knees.

The newspaper Ta Nea has recommended that the Greek government adopt the very same approach -- the country's leaders have to hope that Mary comes up with a miracle to save Greece from a serious crisis, the paper writes. Without divine intervention, the newspaper suggested, it will be a difficult autumn for the Mediterranean state.

This dire prognosis comes even despite Athens' massive efforts to sort out the country's finances. The government's draconian austerity measures have managed to reduce the country's budget deficit by an almost unbelievable 39.7 percent, after previous governments had squandered tax money and falsified statistics for years. The measures have reduced government spending by a total of 10 percent, 4.5 percent more than the EU and International Monetary Fund (IMF) had required. more

Boy Did The Banks Screw Ireland Up

Joe Weisenthal | Aug. 16, 2010, 1:00 PM  

Irish Bank Shares Getting Hammered, As European Selloff Gathers Steam

Ireland is set to test the market tomorrow, offering 1.5 billion euros worth of four- and ten- year bonds.

In the meantime, the country's banks are getting hammered, and its spreads over German bunds are hitting brand new highs.

It's worth talking more what the heck happened to Ireland, especially since it's been the most aggressively responsible (austere) with regard to its public finances.

P O Neill at A Fistful Of Euros has a great post about about the stultifying effect a zombie banking sector can have on an economy.

The opening paragraph is worth the price of admission:

"A farmer goes into an embattled tractor dealer and reaches an understanding on the purchase of an expensive tractor. The farmer then goes to his local bank manager to get financing to purchase the tractor; as agriculture is not doing too badly despite the recession, there is some hope. But the bank has an unexpected response: we can’t give you a loan to buy that tractor, but we can finance one very like it — that we recently reposessed. So banks are in the farm machinery business, at the expense of actual farm machinery businesses." more

 

Finland #1?

In this week's issue of Newsweek, the newsmagazine that until very recently was part of the Washington Post empire, there is a cover story ranking the nations of the world.  Finland is listed as #1.

These things are usually pretty silly but Newsweek outdoes itself when it attempts to explain why the Nordic nations typically do so well in these comparisons (Sweden is listed as #3, Norway #6, Denmark #10.)  It is full of absurd psychobabble about why cold and dark and depressing places should produce such stunning outcomes.

Since I have lived in both Finland and Sweden, I think my observations about these countries are at least as sound as Newsweek's so I'll attempt to improve on theirs.

1) The Nordic countries are Lutheran.  Since virtually no one in Scandinavia actually goes to church, this may seem an odd observation but I believe it valid for the following reasons.

restored organ in the Frauenkirche of Dresden
the original was dedicated by J.S. Bach 
click on picture to see a large version

• The opening sentence of the Protestant Reformation in 1517 was Luther's famous line "Out of a love for the truth..."  As a Lutheran, you don't pursue the truth because your God will condemn you if you don't, you pursue it because it provides you with, as Richard Feynman said, the great pleasure of finding things out.  Of course, besides finding accurate descriptions of how the world actually works, folks who love honesty also demand honest governments and business dealings.
• The preferred art form of Lutherans is music.  Luther himself was a composer but the big Lutheran composer was J. S. Bach.  He benefitted from such cultural manifestations as pipe organs--easily the most technologically difficult device of the 17th and 18th centuries.  People who can build pipe organs can build other very difficult things.  Not surprisingly, the countries that first built pipe organs are without exception, technologically very advanced.  In addition, Lutheran music was supposed to sung by everyone which widely spread the supposed benefits of learning to sing difficult music.
• Lutherans are supposed to be literate.  Again--every Lutheran must read--not just the rich and noble.  In fact, in the 19th century, a Finnish bishop decreed that no one could marry until they had proven their literacy to a Lutheran clergyman.  (Now THERE is a way to spread universal literacy!) The Finns I know are astonishingly well read.

2) The Nordics love to travel and learn whatever they can from outsiders.  Nothing holds USA back more than the notion that "we're #1" because it assumes we have nothing to learn from others.  NOwhere in Scandinavia can you find this attitude even though they often CAN claim to be #1 at something.

3) The harsh environment over time has weeded out the less clever and creative. Besides making for extremely handsome people, this process has produced some of the most technologically advanced people on earth.  How else does one explain how tiny Finland has come to own virtually all the paper-making companies in Europe and North America?  Or other equally illuminating examples.

There are other quite valid reasons for the persistent success of the Nordic nations. These are just my favorites.

There is NO alternative to renewable energy

The only questions are: What form will it take?  And will we make our economics conform to this reality?

Let's get one thing perfectly clear.  Humans require energy to live.  There is no greater truth.  It is also clear that we have run out of cheap ways to get oil--the ultimate energy source EVAH!

There ARE technical solutions for the replacement of an oil-powered society with one run on renewables.  The BIG problem is getting the folks who control the money to agree to pay for such a conversion.

But hasn't this always been the case?  The Producers can revolutionize the way the world works in a generation.  The Leisure Classes are lucky if they can come up to the standards of their grandparents.  Compare the long decline from Lincoln to W. Bush with a Producer achievement like the recent gigantic increases in computer power and you get the idea that historically, the Predator side of a society will always be a drag on any possible solution.

IEA: ‘Cheap oil is over’ as demand approaches new record

by Matthew Wild

The International Energy Agency (IEA) is forecasting world oil demand will set a new record next year when is smashes through 2008’s pre-recession high – and warning that the “era of cheap oil is over.”

According to the IEA’s latest Oil Market Report, published August 11, global demand will reach 86.6 million barrels per day in 2010, and then 87.9 million barrels per day in 2011, assuming a continuing global economic recovery. This means demand is set to pass the all-time high of 86.9 million barrels per day established in 2008 before the global economic downturn.

The figure has been given significance by those that say oil peaked midway through 2008. Peak oil refers to the time of maximum production – the high point of the oil output bell chart, after which, as geologist M King Hubbert showed, output will diminish even though much oil remains to be extracted. If oil did peak at 86.9 million barrels per day, then demand would be expected to overtake supply early in 2011. (Personally, I don’t believe oil has peaked – but this will soon be put to the test.)

Another significant figure bandied around relates to oil’s mid-2008 price spike: it traded at $147 a barrel in July of that year. People that believe oil peaked will tell you this was a simple matter of supply and demand, while Opec has all along blamed speculators for pushing the prices up. Another factor, as reported at the time by Reuters, was the then tension between Israel, the US and Iran, including Iranian missile tests and rumoured Israeli air force drills in Iranian airspace that “left the oil markets worried about a potential supply disruption.” more

Embodied energy: An alternative approach to understanding urban energy use

by David Fridley

Everyone knows that it takes energy to produce anything. The energy used in mining, transport, processing, manufacturing, delivery, and disposal is “embodied” in every product we consume, from food to diapers to televisions and insurance policies. Our traditional way of looking at energy, however, highlights only current consumption, traditionally disaggregated into agricultural, industrial, transportation, commercial, and residential sectors. As a result, the energy embodied in the food we eat, for example, is reported as energy consumption across all these sectors, making it difficult to assess the full energy impact of our consumption choices. Looking at urban energy consumption from this traditional framework diminishes the role of people in driving urban energy consumption.

Because cities are the source of the majority of energy consumption in many industrial and high population countries, much research is underway to promote development of “Low Carbon Cities,” a concept that to date has primarily focused on ways to reduce the impacts of current energy consumption in transportation and buildings. This is especially true in China, where urbanization has yet to reach 50% and the government is projecting the urbanization of an additional 350 million people—greater than the population of the United States—over the next 15 years. All of these new urban residents will need accommodation, schooling, health care, appliances, energy supply, transportation, food, clothing, water, sewerage, and other services, and the potential energy impact is enormous.

A typical Chinese urban resident consumes 3 times as much commercial energy as a rural resident (in total energy terms, rural residents consume more, but the majority is inefficiently combusted biomass, which is often ignored in energy reporting). Consequently, the Chinese government is looking to require cities to develop low-carbon action plans to respond to growing urban energy needs. For the most part, these low-carbon action plans focus on ways to reduce the growth of current energy consumption and to supplant some portion of it with non-fossil energy sources. more

The Birth of a U.S. Wind Power Manufacturing Industry

By Herman K Trabish, greentechmedia.com  

August 15, 2010 | 

As the U.S. wind industry’s installed capacity went from 6.7 megawatts to 35,000 megawatts between 2004 and 2009, its manufacturing sector expanded from a few dozen facilities to more than 240. By 2009, over 60 percent of wind’s U.S. capacity was sourced domestically.

This is a growing ecosystem supporting U.S. middle-class labor as well as capacity to generate emissions-free electricity. “For wind turbines, which have large components like towers, nacelles and blades,” according an American Wind Energy Association, or AWEA, spokesperson, “transportation is a big part of the cost.”

In fact, according to the recent report Harnessing the Potential of Open Trade … in the Wind Energy Industry from the World Resources Institute, off-shoring wind industry manufacturing to places where labor is cheap has no significant cost benefit over domestic manufacturing because of transport costs. The U.S. wind manufacturing base can, therefore, be expected to grow as long as the industry does.

The wind industry’s parts could be great for the U.S. economy as a whole — and especially the U.S. job market

California-based Clipper Windpower, for instance, opened a manufacturing facility in 2006, captured 1 percent of the turbine market in 2007, moved up to 6 percent in 2008 and, in 2009, exported its first turbines, to Mexico.

According to the just-released 2009 Wind Market Report from Lawrence Berkeley National Laboratory, a contemporary wind turbine averages about two megawatts in capacity, or enough power for almost 500 U.S. homes. According to Winds of Change; A Manufacturing Blueprint for the Wind Industry (.pdf) from AWEA, the Blue-Green Alliance and the United Steelworkers, the average turbine weighs 200 to 400 short tons, 90 percent of that in steel and most of the rest in fiberglass, copper, concrete, aluminum and adhesives. It has about 8,000 components, many already manufactured domestically in smaller versions for aerospace, defense, energy and mining.

The five U.S. turbine manufacturers in operation in 2005 grew to 15 in 2009. Nine of 2009’s top 10 original equipment manufacturers — Acciona, Clipper, GE, Gamesa, Mitsubishi, Nordex, Siemens, Suzlon, Vestas — have current or announced U.S. facilities for towers, blade manufacturing, or nacelle assembly. more

And let's hear it for a Producer with a Plan!

The Power of One: Tracy Hall Brings Renewable Energy to Northwest Indiana

July 22, 2010 

By Andrea Buffa

Apollo News Service 

Tracy Hall of Munster, Indiana has been an electrician for 30 years. He is among the thousands of construction trades workers hit by the current recession, who have seen unemployment in the trades rise to almost 25 percent nationally. But Hall hasn’t had time to sit around getting depressed about the state of the economy. Instead, he’s spent the time when work has been scarce developing a new expertise. As the only union worker in Indiana who is certified as a solar photovoltaic installer by the North American Board of Certified Energy Practitioners, and a LEED Accredited Professional by the U.S. Green Building Council, he has become one of Northwest Indiana’s most knowledgeable renewable energy technicians.

“Tracy has single-handedly become one of the experts in the region on renewable energy—and not just the pros and cons of renewable energy, but the installation specifics and the technical aspects of how you build and install solar systems and wind mills,” said Howard Fink, the town administrator of Merrillville, Indiana, where Hall installed solar panels on the town hall building.

Hall’s story shows the positive impact that one determined individual can have on the adoption of clean energy practices by his workplace and local community. He convinced his labor union, Local 697 of the International Brotherhood of Electrical Workers (IBEW), to offer a journey-level class in solar photovoltaics and then set about obtaining the skills he would need in order to be able to teach the class. Hall attended workshops offered by the Illinois Solar Energy Association, studied LEED green building standards at Wilbur Wright College in Chicago, participated in online courses offered by Solar Energy International and graduated from solar installation classes at the Midwest Renewable Energy Association. He also went to an IBEW training-the-trainer course on photovoltaics so that he would be prepared not only to do installations but also to teach about them. more

And then there is the real possibility that widespread use of renewables can also repair the economy.

Renewable Energy: The Power of Positive Feedback Loops
Monday, 08/16/2010 - 2:01 pm
by Jon Rynn

When you design a national wind/solar/geothermal energy system, the benefits of each part are increased and reverberate through the economy, creating a virtuous cycle.

When the Roosevelt Administration designed the Tennessee Valley Authority (TVA), it was designed as a set of mutually self-reinforcing parts, as a holistic system – including electrification, flood control, soil conservation, fertilizer production, and plenty of good, long-term jobs. The same concept of mutual gain applies to renewable energy – at a regional, and even national level, an economy running on solar, wind and geothermal energy would constitute a system, creating more than the sum of its parts.

By building dams, the TVA both controlled floods and provided electricity. By teaching farmers about soil erosion and good soil conservation practices, rains stopped turning into the floods that occur when soil is poorly maintained. By controlling floods, agriculture became more dependable, and it became possible to set up industries such as fertilizer manufacture, whose output was then used to strengthen the farming economy. With a strong farming system, the commercial sector expanded, using the electricity provided by the dams – which were made more reliable because there was less flooding. These relationships are examples of positive feedback loops, that is, by increasing something (like electricity) you increase something else (like manufacturing) that then loops back to increase the first set of factors (in this case, by enriching the region).

In just the same way, by designing a national wind, solar, and geothermal system, the benefits of each individual piece of equipment are increased, and those benefits reverberate within the wider economy, looping back to support the renewable system. One of the common criticisms of renewable energy is that it is intermittent – that is, the wind doesn’t always blow, and at night the sun doesn’t shine. However, asProfessor Mark Jacobson of Stanford University has been arguing, since the wind is always blowing someplace in the continental United States, if you design a regional or even national system that places wind turbines in areas with different wind patterns, the output of power becomes reliable. In fact, an interconnected system could provide at least 33% of a wind system as baseload power, that is, you would be confident that at least one third of your power needs were provided for by wind, a function now filled by coal, natural gas, and nuclear energy. more