Climate Change and The Five Pillars Of The Third Industrial Revolution(Rifkin)

The fourth UN Climate Report was an urgent reminder that the chemistry of the planet is changing.The news is not good and our scientists tell us to expect at least a three degree Celsius rise in the Earth by the end of the century.A mere 1.5 to 3.5 degrees,according to scientists,could lead to a mass extinction of plant and animal life in less than 100 years.The models indicate an extinction rate of 20% on the low end and more than 70% on the high end.The loss of trees in stressed ecosystems worries scientists.Twenty-five percent of the planet's land surface is forested and serves as the habitat for many of the remaining species of life.A sudden loss of trees would bring havoc on animal life.Every increase in temperature of one degree Celsius leads to a seven percent increase in the moisture-holding capacity of the atmosphere.A 2005 study published in the journal Science states that the number of 4 and 5 category storms has doubled since 1970's.Scientists are particularly worried about the Arctic.For the first time in 125,000 years,open waters stretched around the Arctic.If the permafrost coat melts,it could trigger a potentially catastrophic release of carbon dioxide into the atmosphere and lead to a dramatic rise in the Earth's temperature.The rising temperatures on Earth is already beginning to melt the permafrost at an alarming rate.A significant loss of ice cover,according to the U. of Alaska in Fairbanks,could release vast amounts of carbon dioxide and methane.If this happens,there is nothing our species could do to prevent a wholesale destruction of our ecosystems and catastrophic extinction of life on our planet.

The US government's own chief climatologist James Hansen,head of NASA Goddard Institute for Space Studies,suggested our carbon emissions are at 385 parts per million and quickly rising.His group has determined that for the past 650,000 years(ice core samples)the Earth hasn't exceeded 300 parts per million.He states that humanity needs to reduce it's current level to 350 ppm and lower if we are going to preserve a planet similar to that on which civilization developed.The Third Revolution,with renewable energy as its centerpiece,is the only pathway to rectify this current,dangerous problem for humanity.

The Third Industrial Revolution has five pillars that function in relationship to one another:(1) Shifting to renewable energy (2) transforming the building stock of every continent into micro-power plants to collect renewable energy on site (3) deploying hydrogen and other storage technologies in every building and throughout the infrastructure to store intermittent energies(4)using Internet technology to transform the power grid of every continent into energy-sharing intergrid that acts just like the Internet(sell to grid and share electricity with their continental neighbors;and (5) transitioning the transport fleet to electric plug-in and fuel cell vehicles that can buy and sell electricity on a smart ,continental,interactive power grid.

More from The Third Industrial Revolution soon.

Third Industrial Revolution:How America Must Follow

Jeremy Rifkin(Third Industrial Revolution) caught my attention a week ago when he was talking on MSNBC about world population and contrasting it with the consumption of meat in developed countries.He stated that the West continues to eat a diet rich in meat when 14% of the world goes to bed hungry every night.I believe he also said that 30% of agrarian production goes to the diet of animals the developed countries consume as world population  continues to increase(7 billion today).As someone who hasn't eaten meat for forty years in protest over this same issue,I was attracted to his perspective and wanted to read his current book on transforming energy through lateral power(cooperation between countries,people).I know if the West sacrificed some of their dietary standards and restricted their intake,the 14% of the world who go to bed hungry would have a chance to survive this unequal,undemocratic condition.

The first chapter of the book demonstrates the lack of interest America seems to have about cooperating with other countries to solve the energy crises oil is creating at the end of its reign.The International Energy Agency(IEA) stated in 2010 that global peak oil production(70 million barrels/day) was reached in 2006.The peak for the U.S. was in 1970.To keep production at 70 million barrels/day would cost the world a staggering investment of $8 trillion over the next twenty-five years because of the difficulty to capture the remaining oil,develop new fields and continue with existing ones.At the same time,China(14.2) and India(9.6) are expanding their economies at rates that will increase competition for oil and raise prices substantially.The world is consuming three and half times the amount of oil for every one we find.With the increases in Chinese/Indian output per head,they would approach 70% of U.S. output by 2030.One must remember China is three times bigger than the U.S. and larger than the U.S, and Western Europe together.

Every commercial activity in the global economy is dependent on oil and other fossil fuel energy.Petrochemical fertilizers/pesticides,construction materials,pharmaceutical production,clothing with petrochemical fibers,transportation,heat and lights.When the price of oil increases,basic food costs can cause riots in countries who rely on grains to fed their hunger(cereal grains(tortilla) in Mexico to rice in Asia).40% of the world live on $2 a day and even a small increase can cause widespread peril.In 2008 when oil hit $147/barrel($24 in 2001),soybeans/barley doubled in price while rice tripled.For the middle class in developed countries in 2008,basic items shot up,gas/electric soared,the price of construction materials,pharmaceutical products and packaging materials increased greatly.In the spring of 2008,purchasing power began to plummet around the world.By July 2008,the global economy shut down around the world and this earthquake signaled the beginning of the end of the fossil fuel era. The collapse of the financial market sixty days later was the aftershock.Rifkin also believes each new effort to regain the economic momentum of the past decade will stall out at around $150/barrel.This wild gyration between regrowth and collapse is the endgame.

Jeremy Rifkin believes Internet technology and renewable energy are merging to create a powerful"Third Industrial Revolution".It is happening in Europe today as countries cooperate to enter the new era.He asks us to imagine hundreds of millions of people producing their own green energy in their homes,offices and factories and sharing it with each other in an" energy internet".

More from this book soon.

Where's The Sanity,What Happenened To The Hippie Generation?

I feel like I'm going insane sometime when I think about what was lost when my generation(b.1950)cut their hair,put on jacket and tie and sneaked their way into the hearts and minds of the capitalists who had the goal of increased return on investment tattooed to their chest in place of their heart.Were they playing a game during college by presenting themselves as something different than their parents who they thought of as lame and irrelevant in the "Times Are Changing "sixties.Well,the times didn't change for the vast majority of my generation.They actually made things worse and developed a selfishness never dreamed of by our parents.The parents in my community were primarily union workers for the city.They were cops,firemen,transit workers,sanitation employees and occasional small business owners.They came home from WWII and wanted to raise their families and provide a better education for their kids like any other generation.They weren't materialistic and understood that their unions were important because it provided protection from unemployment and low wages.They were content with less but they also wanted our economic system to be fair for all citizens.They lived through the great depression and realized the managers of capital have no mercy or patience for workers but only wanted their investments to remain as profitable as the year before at the least.

My generation talked the talk but couldn't walk the walk. As soon as they graduated,they started to toe the line in the halls of capital and stopped dreaming of a society that really could be different and equitable.As I look around today,we still have the same economic and social problems we had in 1971.Our poverty levels have remained the same(maybe increased) and 71% of our citizens, with families, earn under $50,000 a year.Our economic situation is worse as union percentages have fallen from 33% to under 10%. Citizens fight over increased taxes,not because their against public unions,because they don't earn enough money from the "rate of return" capitalists to pay them anymore.The public union members are earning what they private employees should, but don't ,because the managers of capital only care about that return rate instead of the health of their employees.My generation,who were educated in the late sixties and early seventies,rose up the ladder in the halls of capital.They received the benefits of all the decisions against the workers and became the consuming promoters for the next generation to follow.They brought the darkness we have today where companies look to the East(instead of our own municipalities) for investment and fortunes.They still listen to the music greats of the sixties who now charge hundreds of dollars to see their concerts and somehow believe they are part of some cultural change in our society.They are part of the 35% in this country who only want their investment portfolio to grow regardless of its damage to the American worker.

Peaking On LSD

I named this recent painting of mine"Peaking On LSD".I've distorted little squares because sometimes I feel very distorted listening to the garbage from political representatives who bang on my head as I change the TV dial from comedy to comedy.I've stopped reading the papers,watching MSNBC or purchasing economic books to find some sanity in an insane world.I'm reading the "Tropic of Cancer" by Henry Miller(1930) and find it filled with numerous insights that are timeless.It is a wonderful commentary on modern life and relates to every inch of our own time.Miller is talking to us throughout the book about everyday occurrences that come our way as we think(and think) about our relationships and purpose.He has a Buddhist perspective of being in the present with an acceptance of all forms of life.He is both non-judgemental and discerning as he peaks into the avenues of his life in Paris.He talks frankly about sex and his desires as if he is letting his ID loose for a parade down the pathways of male/female relationships.His book was banned until 1960 in America for being too pornographic but his thoughts and ideas are the real focus of his writings.I will write more in the next post about the book because his ideas are important in today's complicated scene that is made so through greed, misinformation and a spiritless condition.

When Will I Ever Be Represented In Congress?

I stopped writing my blog last month because I needed a break after a year.As you see from my archive,I have written posts on numerous subjects that came from my political/economic readings.I have stopped recently and started to read fiction and resume my hobbies in full. I'm going to the gym and my main interest is my new grandchildren(twins) that were born in June.

Presently,I have a hard time reading or watching anything political.The last good ideas I heard came from Robert Reich and his book"Aftershock".Reich does appear on TV from time to time but he isn't allowed to present his specific ideas but responds to general economic conditions(read my archive post on his full ideas).Bernie Sanders appears on TV programs and I agree with his viewpoints and admire him but he doesn't go far enough to the left for my taste buds.He is repetitive and doesn't bring a full set of ideas that will reshape our failed economy that has brought increased income inequality and a sour taste called hopelessness.I don't have anyone really representing my viewpoints and unfortunately don't see any light at the end of the tunnel.

So I'm dropping out again and will watch the river flow or dance with angels down at the Dutch.I'm currently reading "The Lonely Polygamist" by Brady Udall and maybe polygamy is the answer but one can get lonely with all the kids and wives.They say it's lonely at the top... so maybe endlessly taxing the rich will be good for their spiritual life as they descend the ladder of economic royalty.Maybe the very,very rich should be polygamists and support thousands of wives and children.The poverty rate would fall...Wall Street would be confident about aggregate demand and savings would turn to investment, so the American dream would shine again in the deep caves of the recession.

Talking heads just talk in circles, the way administrators in education have meetings to decide the time and place of additional meetings.Everyone is so serious today about everything...maybe we had it right when we smoked pot everyday and just played basketball in the projects.I'd rather laugh again,at myself and anyone who takes themselves too serious.We should have the Army kick the shit out of any company that internationalizes their workforce to increase their stock prices for selfish college boys and girls who have turn their backs on their fellow citizens in need.Maybe we should stop fucking with each other and think about the country as one entity not individual sanctuaries with toys made in Asia.

So I'm going to stick my head in the sand and hope it's different when I reappear.Today,I'd rather watch "Family Guy" than the Presidential debates that have  economic/cultural ideas from the 1920's .Eat healthy, exercise and go to lunch at a cheap restaurant..that's all we have left.

David Harvey: The Crisis Today: Marxism 2009

Tripping Over The Wealthy In The Hamptons

I'm reading "The Myth Of The Rational Market" by Justin Fox.It is a history of risk,reward and delusion on Wall Street.It is a story of free-market capitalism's war with itself.Fox brings the reader a history of the perils and possibilities of risk from the formative years of Wall Street through the Great Depression to the financial calamities of today.It is a tale featuring professors who battled fiercely over ideas and played  major roles on the world stage.This intellectual warfare exists today and is guiding decisions for the rich and the poor in America.The disenfranchised poor are only  hapless bench warmers in this game that has built the houses in the Hamptons and lavish apartments in NYC.Riding around the Hamptons,one can see firsthand where the statistics for income inequality is generated.The Hamptons,wealthy NYC neighborhoods remind me of "The Tale Of Two Cities" I recently watched on TMC.As I rode around Montauk, East Hampton, Shelter Island and Southampton,it is obvious what the savings from long-term capital gains and dividend taxes can render.Numerous economic professors,with an assortment of theories, have tried to tame the marketplace through the use of mathematical formulas that reduce risk.It is a world unknown to most of the American population.International fiance has complicated the risks for American investors as we can see today in the financing of the debt of European countries under financial pressure since the Great Recession of 2008.The volatility of stocks,uncertainty in the markets, eventually will bring hardship for the poor and lower-middle class in our society.They can only wait and pray that their jobs remain secure in an ever changing economic paradigm.

I did visit a wonderful low-income housing developer in East Hampton that is providing a very valuable model for the wealthy communities on Long Island.He is a childhood friend who has been working in East Hampton for twenty-three years improving the lives of thousands of individuals that need low cost,subsidized housing in the community.He has developed,with grants from state and federal agencies,two communities for adults and one for families who live and work in the community.A fourth is in the development stages and will eventually help more young families survive in a high priced housing community.Many service workers have to travel long distances to work in these wealthy neighborhoods because of the lack of affordable housing.This travel time not only reduces paychecks but is adding to the traffic congestion in these communities.

As one looks around our society,it is obvious our academia has been asleep at the wheel when it comes to promoting rational discourse in eradicating American economic injustice and creating an admired model for the world where equality is pervasive and valued.Many socialists today feel there should be a limit on income earnings in a given year.I believe they set that limit at one million a year for a family.A million a year would buy a wonderful house or even a few glorious houses.I stayed in a Hampton community where many service workers live and that township was more than I and the majority of Americans would be fully satisfied to live in.The one million limit would spread the wealth and create the aggregate demand for the products America consumers want and need.As of today,our wealth isn't being invested but saved in stocks,bonds,treasury notes and securities.The wealthy don't consume like the bottom 80% because they have everything and more than they need.It isn't Un-American to think of a cap on income.For many,many years,our tax structure took 70% of the wealth away from high earners in taxes.They hid and evaded the system,but the laws were in place to create a more just society.The country had the greatest prosperity from 1947-1974 when the tax rates prevailed and union membership was at its highest.Lets start this renewal process before it's too late and bring economic democracy to our shores and to those around the world.

Rick Wolff on the Economic Crisis and Socialist Strategy (3)

U.S Debt,Unfortunate Policy Decisions Made By Ruling 10% Income Earners

If the U.S. continued on the track the Clinton Administration had us on, the country would have had a surplus of $2.3 trillion today.It would have been a windmill for money coming into our accounts to support all the wonderful technology that has been developed around the world.Unfortunately, we elected George Bush in 2000,9/11 occurred and our economy went into a great recession due to many factors(mostly due to our antiquated,lassie fair,top 10% income earning elitist capitalist system).

Out of the box,Bush(and majority Republicans) repayed his financial backers with a three trillion dollar tax cut that began our stroll down the avenue of debt.Most of the money went to citizens who didn't need it and had been increasing their wealth for the past thirty years by underpaying their employees and taking away their benefits.This increased the income inequality even more and transported us back to the roaring twenties when this disparity was the greatest.No mention of the 13% who live in poverty and the 20% who live a few bucks above it.Next, the Bush Administration increased the debt by three hundred billion with an unfunded drug benefits program for seniors.This was done for the support of the pharmaceutical industry,not the general population,who wanted to monopolize the drug purchases and stop the seniors from acquiring their needed drugs from Canada and other countries who would provide the service at a cheaper rate.Nationalization of heath care would bring lower costs to citizens and the government and project and protect democracy(top 10% don't want equality here,best facilities and doctors only for them).

The same administration provided two hundred billion(TARP) to help the financial community for speculating(their formulas failed)on debt securities(built on commercial,residential housing) that collapsed and started to lower stocks and disrupt the banking system.Again,most Americans didn't have direct interest in the financial community(vast majority of securities held by top 10% income earners) but are paying for the college boys/girls mistakes in their free market,holy(always right) capitalistic system.

9/11 brought our country $1.4 trillion in debit for the Afghanistan and Iraq Wars.This spending was unnecessary and could have been avoided if we were patient  and denounced retribution(an eye for an eye leaves the world blind).Our domestic spending on homeland security was enough to counteract the small  fundamentalist groups and our recent history proves this point. Our violent,militaristic culture provided the push for President Bush's Administration, with traditional hawks and conservative pseudo-academics, to seek a revenge that dismantled two countries and have lost over two hundred thousand lives in the role of nation building.

The Great Recession lost considerable revenue and $1.7 trillion was borrowed for domestic and general defense spending during the last years of the Bush Administration(we actually spend 52% of our annual budget on defense,more than all nations combined,including interest on previous spending and veterans benefits that grow every year due to the horrible injuries).Additional mandatory policies($400 billion) was spent and borrowed under Bush due to a lack of revenue.The total for Bush's policies amounted to $7 trillion from 2001-2008.

President Obama's Administration presented a $800 billion Recovery Act(1/3 tax decreases) to stimulate the economy that was primarily caused by a loss in aggregate demand due to unemployment and fear of future layoffs by the majority of the population.The new classical economists,sanctified by the Republicans,saw no need for government interference and wanted monetary policy to bring us back to equilibrium and job creation.Many new Keynesians wanted the stimulus to be bigger with the possibility of an increase in aggregate demand.The people with the money to start investments sat on their money afraid to risk it because the majority on Americans were inhibited to purchase on credit anymore(used credit because salaries were so low). After running up $7 trillion in debt,the Republicans stopped President Obama from spending more to help the economy and the 90% of Americans that lived in fear of future cuts in employment(stock market prices increased when unemployment rose in their companies).Obama also added $250 billion on the 2010 middle class tax cut to again stimulate demand.Finally,Obama had a one-time emergency costs and investments(small business Bill,HIRE Act,education investments and Census) at $400 billion.The Obama Administration's total debt increase was $1.4 trillion.The Bush Administration spent and accumulated debt at five times the amount of the Obama Administration.Obama's policies have also tried to undue the economic problems the financial community and Bush Administration created.$4.3 trillion in debit has accumulated since 2008 with all of it coming from government financing($700 billion) and lost revenue from lower taxes and a depressed economy($3.6 trillion) which is really a continuation of the Bush policies.All this has happened as the Republicans,and the Americans that elected them, clammer for no new revenues.The Great Recession, which was caused primarily by the 10% who have the majority of the money,has left the 90% of citizens fearful and hopeless in a culture that ignores the founding principles of democracy(Common good for all).Economic inequality is a silent dagger that is twisting more today than at any time in our recent history.It's time to take to the streets and disrupt the lives of those who shelter and gate themselves from the majority who want only democracy and security in the workplace.

The Present State Of Economics(Skidelsky)

The present state of economics is one of rational expectations.The New Classical economists developed the rational expectations hypothesis to demonstrate the uselessness and even harm of governmental interference with market process.Old classical economists believed that ,if wages and prices were completely flexible, there could be no persistent unemployment.They accepted the ignorance about future events and could justify government intervention to provide employment. The new classical economist(beloved by conservatives) abolishes this assumption because they state that wages and prices will adjust instantaneously to new conditions because the conditions will have been anticipated and incorporated in the prices which people charge and expect to pay for services.According to the new classical economists,Greenspan's "underpricing of risk worldwide" is impossible. Moreover,because people are always at their preferred position,government efforts to improve their position will be ineffective.Unwanted unemployment is banished and is a voluntary choice of leisure(tell that to the unofficial 20% that are unemployed today).Government should get out of the business of second-guessing private preferences.

The rational expectations hypothesis was built on a sophisticated intellectual structure whose starting point is the existence and precise knowledge of future events.This is derived from all the information available about both past and present circumstances and that it implies economic actors will not make the systematic mistakes in predicting the future.This rules out the possibility of large crises(Great Recession) except as a result of surprises(bad formulas that didn't take into account of harmful debt to asset ratios or inflated assets).

The REH economists follows a model of economy that behaves in a predictable way.The model assures that the universe exhibits stability over time and that the future can be inferred from the past and the present.The important policy implication of this belief is not just that stimulus policies will fail to stimulate,but they would lead to inferior outcomes.New Keynesian's accept REH but also admit the existence of "frictions"(lack of new investment) which impede almost instantaneous adjustments to new conditions. This allows allows them to advocate government interventions to improve outcomes.The crucial assumption of REH is not perfect competition,but perfect information. Had the Soviets been able to concentrate information as markets do now,there would have been no technical reason why its choices should not have been perfectly rational in a way postulated by REH. A single Platonic guardian would make no mistakes.

New Keynesian economists believe that the outcome at any future date is a statistical shadow of past and present market prices.Some believe a financial system which transforms investment into speculation will eventually be followed by a collapse.At times when the markets are faced with significant changes(Black Swans),economic models cease to work.Typically,these are times when herd behavior is most obvious.New Keynesian's understand the snares of statistics(bell curve)and human behavior as factors to monitor.

The policy regime which followed the Reagan-Thatcher revolution reflected to a large extent the ideas of the New Classical economists.Consumer price stability became the main,and often only,goal of macroeconomics policy and monetary policy was considered sufficient by itself to ensure stability.Concern with credit, banking,asset price,and financial stability was downgraded.Efficient market theory also lay behind the extensive deregulation of the last twenty years:repeal of the Glass-Steagall Act,the acceptance of bank self-assessment of risks,the failure to regulate the market for derivatives(all positions the Republicans and many Democrats still support).

More from "Keynes-Return of the Master" by Robert Skidelsky coming in the future.

2008 Great Recession:What Went Wrong (Skidelsky)

The most popular explanation,according to Skidelsky in "Keynes", was the failure of banks to manage the new risks posed by financial innovation.Greenspan stated that the cause of the crises was underpricing of risk worldwide and the technical failure of risk management models. Particular attention was paid to the role of American subprime mortgage market as the originator of the so-called toxic assets which came to dominate bank balance sheets.A global inverted pyramid of securities also fell in value. Household and bank debt was built on a narrow range of underlying assets-American house prices.When they started to fall,the debt balloon started to deflate.Many of the loans had been made to sub-prime mortgage borrowers with poor prospects of repayment.Securities based on sub-prime debt entered the balance sheets all around the world.When house prices started to fall,securities also fell in value.Fearing insolvency,with their investments impaired by an unknown amount,the banks stopped lending to each other and to their customers.This caused the credit crunch.With collapsing confidence,stock markets plunged,banks began to fail and the economy started to slide.This brought about generalized conditions of slump throughout the world,which deepened throughout 2009.

Skidelsky states that American house prices rose 124% between 1997 and 2006,while the Standard & Poor's 500 index fell by 8%.Half of the US growth in 2005 was house-related.Home ownership increased from 64% to 69% between 1994 and 2005.The average price of an American home was three times the average wage for a long time in its history.By 2006, the ratio was 4.6% and rising.Two reasons were behind the boom.First,the Clinton administration encouraged government backed institutions like Fannie Mae to expand their lending activities.Second,private mortgage lenders,having exhausted the middle-class demand for mortgages,started to lend to people with no income,no job or no assets.Borrowers were enticed by teaser rates:very low,almost zero,introductory interest rates on adjustable-rate mortgage which went up sharply after a year or two.By 2006,more than a fifth of all new mortgages($600 million worth) were sub-prime.Mortgage equity withdrawals to buy consumer durables and second homes shot up from $20 billion in the early nineties to $700 billion by the mid-2000s.Monetary authorities had turned their populations into highly leveraged speculators in a fixed asset.In 2005-6,two blows hit he housing market:a rise in the cost of borrowing and a downturn in house prices.Between 2004 and 2006, the Fed,seeking to dampen inflation and return short -term interest rates to a more normal level,raised the federal fund rate from 1% to 5.25% and kept it their until 2007.US house prices fell 33% before flattening out.16% of sub-prime mortgages with adjustable rates had defaulted.These losses demolished the investment firms risk models based on mathematical formulas.The US credit-rating agency,Moody's,had also incorrectly awarded triple-A ratings to billions of dollars' worth of financial instruments because of a coding error in their model.

Many different entities were blamed for the Great Recession.Bankers,Credit-Rating Agencies,Hedge Funds,Central Bankers,Regulators and Governments were all blamed for the disaster.Skidelsky,interesting enough,blames the economics profession.The practices of bankers,regulators and governments can be traced back to the ideas of economists and philosophers.The crises is a not failures of character or competence,but a failure of ideas.Keynes stated that "the ideas of economists and political philosophers,both when they are right and when they are wrong,are more powerful than is commonly supposed.Indeed the world is ruled by little else".Skidelsky explores the present state of economics and I will bring you his thoughts in the next post.

Keynes:The Return Of The Master (Skidelsky)

The introduction of this book discusses the explanation of the Great Recession of 2008 as a macro- level problem instead of a micro-level one.There are two main macro-economic theories of what went wrong,pointing to very different conclusions for policy and the book tries to help us decide between them.The first is derived from the quantity theory of money,the second from Keynesian theory of aggregate spending.

The first,or monetarist,theory attributes the collapse to instability in the supply of money.The central banks of the world,led by the Fed, made money and credit too easy in the years leading to the crash resulting in an asset-price inflation built on debt that also spilled over into a consumer boom (Maybe our jobs didn't pay us enough to support the American middle class lifestyle..as a teacher,I lost 15% of my purchasing income due to small raises and higher inflation in the previous ten years).A collapse was bound to happen when credit tightened.The collapse of the real estate boom(residential and commercial) hit the banks which over-lent to this market and spread to the banks via securitization(banks knew the government would come to the rescue for their gambling).The pile of bank losses led to a credit freeze(collapse in the money supply) which spread the recession to the whole economy.

The Keynesian theory attributes the crises to the instability of investment.The macroeconomy falters when saving runs ahead of investment(what the companies are doing now by hoarding cash and not investing).The crises can be traced to the fall in demand for new investment following the collapse of the dot.com bubble in 2001.(continues today and is the main reason unemployment is so high).Greenspan's cheap money policy and the Bush deficits(lower taxes,two wars,costly health bills for Medicare) were insufficient to revive private sector investment demand.What they did is create a highly-leveraged asset(banks had very high asset to debt ratios and the lower/middle class used credit cards,money from home refinancing to keep their heads above water due to low pay and increased inflation)) and consumption boom.Too few new assets were being created(was it all in high paying securities?) and the private sector became progressively over-indebted.The collapse of the real estate boom disclosed the extent of the over-indebtedness(so goes the unemployed who had no decision making in the process).The de-leveraging of household,banks,and companies brought about the collapse in aggregate demand which caused the great recession(see my post on Robert Reich's proposals to create,stimulate aggregate demand).

These two theories have different causes that brought the great recession to our doors.According to the first,the crises was caused in a mistake in policy(Fed's inability to cut off asset inflation).The second can be attributed to the failure of the Treasury to offset the failure of private investment by sufficiently expanding public investment(That's an irrational thought with Republicans in power 2000-2008)The monetarists(Classical theory) believe recovery will come when the central bank expands the money supply(doing that now).The Keynesian's believe government action is needed to increase aggregate demand and that the increase in the quantity of money is a consequence,not a cause, of the recovery of business activity(companies are still sitting on their money(savings) and delaying investment because they understand the demand isn't strong enough to expand supply..thus high unemployment).

The two theories imply different approaches to the problem of global imbalances(China and East Asia(surpluses) and the USA and much of the developed world(deficits)).The global imbalances,according to the monetarists,play no part in the genesis of the crises.The Fed had complete control over its own monetary policy.The monetarists sees the US deficit as a consequence of US overspending.Keynesian's believe Chinese over-saving had a deflationary impact on the US and developed world.One key difference dominates the gulf between the two theories.The monetarists view the market economy as relatively stable(all the math formulas didn't save the securitization of debt collapse) in the absence of monetary shocks while the Keynesian's view it as unstable in the absence of government policies to steady aggregate spending.This is because one key component of aggregate spending-investment-is governed by uncertain expectations(as we have today).The monetarist view is in the ascendant today but the recent crises confirms the validity of Keynesian spending thesis according to Skidelsky.

More to come from this book soon.

Comhaltas: ComhaltasLive #310 (Full Programme)

Comhaltas: ComhaltasLive #310 (Full Programme)

John Fullerton - Financial Speculation Tax News Conference

The Carried Interest Loophole Explainer

More From "Bomb Power" Garry Wills

Congress under the Constitution has the sole right to establish federal court systems.It sets up district and appeals courts,and also courts martial.It establishes the number of justices on the Supreme Court.Yet President Bush,on his sole authority,set up a third entity that recognized none of the legitimate court systems and defied the Geneva Conventions on the treatment of war prisoners.The Bush system had no justification in constitutional or international law.The Bush people were as concerned with creating an unchecked and omnicompetent executive as with hunting for terrorists.The tight little circle around Cheney and Addington wanted to keep the Office of Legal Counsel memos from any who might oppose them including National Security Advisor Condoleezza Rice and Secretary of State Colin Powell.

Jack Goldsmith inherited the leadership role in the Office of Legal Counsel when Jay Bybee and John Yoo left the Justice Department.He was a conservative young lawyer,supporter of President Bush and a member of the Federalist Society.He was a friend of John Yoo who wrote numerous OLC memorandums used by the Bush administration to defy the constitution and international law for their own purposes.Unfortunately for the administration,Goldsmith was a good legal thinker and thought the memos by Yoo were legally flawed and had no foundation in prior OLC opinion or in any other source of law.The memos implied that many other federal laws that limit interrogation--anti-assault laws,the 1996 War Crimes Act,and the Uniform Code of Military Justice are also unconstitutional.What struck Goldsmith was the unnecessary exclusion of all parties but the executive--Congress,the courts,the American populace,allied governments--at a time when they were all anxious to cooperate with the efforts against al Qaeda.Cheney said the Constitution was irrelevant to executive power.Goldsmith concluded he had to reverse the legal opinion of his own office by canceling Yoo's torture memo.Goldsmith's decision to stand up to the White House had come at a price.There was no chance that he would ever be made a federal appeals court judge,something Jay Bybee got for toeing the line.Goldsmith,Alberto Mora,James Comey and Patrick Philbin all had their careers subverted for not cooperating with the Bush team.It was a reign where dissent was not merely discouraged,but punished.

The Bush circle also fought the McCain anti-torture bill during this time.Cheney tried to have Bill Frist block the legislation by withdrawing the budget bill.McCain responded by lining up two dozen retired generals(including Powell) to say that observing the Geneva Convention was necessary to ensure proper treatment of our own military personnel.The bill passed the Senate by 90 votes to 9,including 46 of 55 Republicans.Cheney had still not given up.He urged that the bill exempt CIA agents to allow them to torture.Eventually,the House passed the bill and it became the law.But then,as so often happened with Bush,the law was undone with a signing statement.Appended to McCain's law came a statement that the executive branch(Commander in Chief)will assist in achieving the shared objective of the Congress and the President of protecting the American people from further terrorist attacks.This signing really cancelled the law and the administration continued it's monarchy and the torture policies of the Yoo memo for the remaining days of the Bush Presidency.

American Monarch:More From Wills In "Bomb Power"

The framers of the Constitution were determined not to have a monarch like the king they rebelled against.The President's private monopoly over nuclear weaponry is evidence enough that the framers would be appalled by the transition since WWII.The attempt by Congress to push back with the War Powers Resolution,CIA oversight,and the FISA court did nothing to check Presidents defying the WPR in Lebanon,Grenada,Panama,Libya,Haiti,Kosovo,Bosnia and elsewhere.

Vice President Cheney and right hand man David Addington were devout advocates of presidential power for years before the 2000 election.As a member of  Congress,he labored to squash opposition to President Reagan's attack on Libya in 1986.He and Addington wrote a minority report opposing any condemnation of the Iran-Contra operation of Oliver North.Cheney advised James Baker to end the War Powers Resolution.Addington said he would strangle the FISC(US Foreign Intelligence Surveillance Court).The two men backed neoconservatives recommendations for the overthrow of Saddam Hussein during the Clinton administration.They brought Douglas Feith,Paul Wolfowitz into the Bush administration who were backed by William Kristol,Richard Perle,Norman Podhoretz,Midge Decter and Gertrude Himmelfarb.On the campaign trail Bush II sounded some old themes of Republican semi-isolationism.September 2001 changed that perspective and Addington and Cheney influenced him greatly to ignore Congress and the rest of the world.

Creating new intelligence procedures after 9/11,Cheney's office and Rumsfield's Dept. of Defense circumvented information past the CIA and NSA apparatus from Ahmed Chalabi and Richard Perle.This provided the false information about mobile bioweaponry labs and centrifuge tubes that let the administration call a halt to Hans Blix's UN inspection of Iraq for nuclear weapons.

Just as important for the panicky reaction to terror as this false information were the faulty justifications for military tribunals,suspended habeas corpus,extraordinary rendition,secret prisons around the world,warrantless surveillance of citizens at home,abrogation of Geneva Conventions,unilateral dispensation from treaties,and enhanched interrogation methods of waterboarding.The Justice Department on"orders" from the White House claimed the legal right to all these and other actions.The point of origin for these claims came from the little known but powerful Office of Legal Counsel in the Justice Dept. John Yoo would become the producer of numerous documents that protected the Bush administration and endorsed the monarchy it created.Yoo would make the President more powerful than the monarch we renounced in 1776.

More from Wills soon.

The Care And Keeping Of The Atomic Bombs(Wills"Bomb Power")

According to Wills in "Bomb Power",the care and keeping of the bomb began a whole series of security measures that made it impossible to put the nation back on a truly peacetime basis.The immense cost of the nuclear establishment,social costs as well as financial ones,would be in the maintenance of the vast security system around it and even more for its delivery systems.From Strategic Air command,to tactical missiles to nuclear submarines,to ICBMs and finally plans for missile stations in space(Reagan) with each system cocooned with secrecy and expense.

After WWII,arrangements multiplied a thousand times as the strategic Air Command set up bases in foreign countries(including dictatorships) for the servicing of its nuclear-cargo planes.A steady supply of oil had to be secured to keep our air empire running(thus our concern about the middle east).The arsenal was expanded for tactical nuclear forces with additional bases.With ICBMs,observation and guidance satellites had to be launched and kept in space.All this apparatus was directly descended from General Grove's(head of Manhattan Project) private air force,the first nuclear delivery system.

Foreign governments that granted us territory and protection were supported,even if they were not very good at recognizing the rights of their citizens.Being the champion of the free world meant maintaining nuclear superiority,not actually advancing freedom in the countries that cooperate with us.Our anxiety over nations going communist was a large part prompted by fear that this would shrink the area for such bases.This meant spying on other countries,propping up those that gave us what we needed and undermine those that did not.

The Atomic Energy Act of 1946 created a system that made atomic weapons a separate part of the nation's arsenal,with the President the sole authority over their use.In case of nuclear attack,the President would not have the time to consult Congress or instruct the public.The President's alert meant our permanent submission to his/her authority.The power over the atom is outside the constitutional order of succession under the twenty-fifth Amendment,and outside the military chain of command.The Constitution severely limits the Presidents function as Commander in Chief.He/she is the Commander in Chief of the army and navy and state militias when called into the actual service of the U.S.(director of military operations).The Constitution gave Congress the power to call up the militias to execute the laws of the union,suppress insurrection,repel invasions,provide for organizing the army and disciplining the militias.General Washington's appointment as Commander in Chief was done so by the Continental Congress.Washington flaunted no military symbols as President due to the importance of civilian rule in our Republic.Modern Presidents(since Reagan)have taken to being saluted though salutes are supposed to be only to military superiors recognized by their rank in uniform.

The passing of authority over the bomb does not follow public order(vice president,speaker of the house,etc.)It is entrusted to a secret few trained to handle the assignment.This system is another descendant of General Grove's authority.

When a real attack against NY and the Pentagon occurred on 9/11,Mr. Cheney assumed the powers of the presidency even though George Bush was still alive.Cheney ordered jet fighters to shoot down the last airliner terrorists had seized.The President was informed after Cheney gave the instructions,Cheney would in later days make the most extreme claims of executive authority without oversight or check of any kind.He defended his own actions.The concentration of emergency authority in the executive branch(WH) makes many officials say they can speak for the President.Those in the modern executive office(Commander in Chief)often act without letting Congress or the people know.These surrogates can be Republicans like Oliver North illegally funding guerrilla fighters in Nicaragua or Democrats like RFK plotting to assassination of Fidel Castro.They have the means of acting this way because of the vast and secret apparatus of the National Security State,which was set up in the era of Bomb Power and the newly empowered Commander in Chief.The elaborately constructed set of institutions enforces the ides that anything executive agencies do is justified in the name of national security.The Bomb instilled a structure of fear.

More from "Bomb Power" soon.

Our Bloody Valentine: Iraq, Afghanistan, Pakistan

The Manhattan Project,Secrecy And J.Robert Oppenheimer



J.Robert Oppenheimer


The "Manhattan Project",according to Wills in "Bomb Power",was a miracle within the larger miracle of wartime productivity.It was a triumph of secrecy,of vast tax moneys unaccounted for,of research compelled,of resources commandeered,of human tasks assigned and huge sites built or expanded.The director of the scientific work was J.Robert Oppenheimer.He persuaded General Groves,military leader of the project,that scientists had to explore problems together,criticize one another's work and develop one another's insights to be successful.Oppenheimer was able to recruit superstars of physics,including famous men driven from Europe by repression.This immigrant talent and American scientists worked together as a team to bring solutions to the project.Groves had a team of security men spying on the scientists even in their isolated community and resented the use of foreign languages his security team could not understand and report on.

The average age of the scientists was twenty-four.Theoretical physicists(atomic particle physics) tend to do their best work when they are very young.Some scientists refused to join the mysterious program they were sounded out for.The military authorities debated what to do with people who knew what was going on at Los Alamos but either refused to join in or left the confines.Groves wanted to draft them to Los Alamos or send them to some distant military outpost to be watched until the end of the war.One of the security officers,Boris Pash,wanted to take them out to sea for questioning(Russian style) and not return with them if needed.Pash was also convinced that Oppenheimer was a Communist.Groves knew he could not succeed without Oppenheimer's essential contributions as leader of the scientific team but he put Pash in the compound to spy continually on Oppenheimer.

It surprised many that Grove put Oppenheimer in charge of the physicists.Edward Teller thought Hans Bethe should have been put in charge(a German was politically insensitive).Oppenheimer's Berkeley colleague Ernest O Lawrence might have been a more obvious choice but Groves didn't want him away from his vital work on the cyclotron he was perfecting for creating the high-energy beam needed to bombard atoms and split them.

When the Bomb was successfully exploded on July 16,1945, in a test code-named Trinity,it proved more powerful than the scientists had expected.President Truman would call the Bomb"the greatest thing in history" and his revelation of it to the nation"the happiest announcement I ever made".The military-industrial complex,with a poisonous admixture of government and secrecy,had scored a triumph that would show the way to many government activities.It offered a model for dealing with the Russians,Germans,Communists and Nazis.The secrecy that had enveloped Los Alamos would quietly cross the entire American landscape in the years to come.

More from "Bomb Power" in the near future.

Bomb Power,Fatal Miracle"Manhattan Project"

In the first chapter of "Bomb Power" by Garry Wills,he writes about the conversion from a peacetime economy to a war economy during WWII.Automobile companies,shipyards,corporate and university laboratories turned their attention to military inventions and technology.All of the conversion was fueled by a massive(stimulus) injection of government money and the imposition of government regulation and rationing.Businessmen who had resented and resisted government activism in the peaceful days of the New Deal were forced at first,and glad afterwards,to accept federal intervention on a scale never before dreamed of in America.They accepted the new rules gladly since they prospered greatly under them.The GDP doubled during the war and real wages rose dramatically.The U.S. was producing an astonishing fifty percent of the world's goods and services at war's end.

The war revealed the "dirty little secret" of American capitalism,according to Wills.The myth of capitalism is that the free market is the most efficient economic system.It was proven that governmental sponsored and regulated production is far more efficient.In wartime,the government can compel the collection of raw material,channel research,subsidize new production methods without taking time for them to prove profitable,redistribute labor pools,eliminate distracting competition by the incompetent.During wartime,governmental interference with business competition is always adopted.When it is important to get things done,and done fast,the government must be relied on(maybe we should do this today for energy,agriculture and housing))War is always good for the economy for those who win wars and avoids destruction of assets(we should increase revenues today through tax credits(stimulus)  for the majority and taxes for the wealthy minority and have a new,larger stimulus that rebuilds America and increases jobs and more importantly wages).

The "Manhattan Project" was part of the stimulus program for WWII.After President Roosevelt secretly authorized the effort to produce a bomb,it was his decision,and that of his advisers,that the project must not be trusted to civilian management.One of the main reasons for putting the operation under military discipline was to hide the funding($2 billion).Brigadier General Leslie Richard Groves was put in charge of the project.Groves wanted Congress to know nothing about the Bomb until it was not only completed but used on the enemy(start of executive power not supported by the constitution).Groves was supported by Henry Stimson(Sec. of War),George Marshall(Chief of Staff)),Vannevar Bush(Chairman of the National Defense Research Comm) and Brehon Somervell(Army Chief of Supply).President Truman didn't know of the bomb until twelve days in office when Roosevelt died.The degree of silence was astonishing given the size of the operation.It is true that some British scientists and Russian spies became aware of the project but no one knew of it's destructive power until Hiroshima.

Groves built up three industrial sites.Hanford in Washington State collected,extracted and purified plutonium.Oak Ridge in Tennessee for enrichment of uranium and Los Alamos in New Mexico for the construction of the Bomb.Another site in Alamogordo,N.M tested delivery planes while the Tinian Islands was developed as a staging site to launch attacks on Japan.Hanaford alone employed 132,000 people,Oak Ridge had 200 buildings on 825 acres while Los Alamos had 3,500 scientists,soldiers,construction workers,staff,and families living inside a triple ring of fences.

More from "Bomb Power" soon.

U.S Marines,Water Balloons And Tug Of War Games

I just had the best day at school all year.We had an "advisor" day where the students meet with me and then participate in various games against each "advisor " group.I have a number of Marines in my class. They are signed up for many years and will participate and "protect" us in the countries our civilian authority(executive branch)tells them to.I told all of them today to be very careful and I want them to return alive so they could continue their lives here in beautiful America.They looked at me strangely, as if not considering the danger at all( have they been brainwashed by our culture).I didn't tell them today that I think every American engagement since WWII was unnecessary and that the previous executive branch decisions have been wrong and costly(human life and percentage of the federal budget).That the National Security State has drained our country's resources and we have the highest child poverty rate in the developed world.I told them to win the tug of war today(we did win).It was a great day today above all because it was free and unscripted.At the end of the day,I was soaked in water from students pouring water over my head( I was successful on all my targets also).Students were in chaos,throwing water balloons around at teachers and fellow students( a catapult was made to throw balloons long distances).We all talked and laughed about getting even and ran around free and pure just the way Sarah Palin likes it.America at its finest, with hot dogs at the end of the day.Parents and local boards of education would have had a fit but they don't understand educational psychology the way I do(have a masters in it and I'm a thirty seven year expert).We all enjoyed ourselves because censorship was locked up for the day.We censor kids too much during the day,week and year.They don't have any power in the ""modern classroom".Teachers are censored by the principals and principals are censored by the superintendents.It's the same in most jobs in America.I wrote about this in a previous post on "work councils" in Germany where  working relationships between workers and management is different.The modern classroom prepares the students to follow orders and don't make waves(we produce great marines)We should be teaching democracy in the classroom and in the workplace.As you know, we have lost it in politics to the rich and famous.The relationships teachers develop with students come from mutual respect and the easiest way to develop this to share in the decisions of the classroom.Equal power breeds ownership of one's environment that all humans desire and need.

'Bomb Power" Equals Executive Power(Garry Wills)

The introduction to Gary Wills"Bomb Power" posits that the "Bomb" altered our subsequent history down to its deepest constitutional roots."Commander in Chief",after the creation of the fission bombs,took on a new and unconstitutional meaning.It redefined the government as a National Security State,with an apparatus of secrecy and executive control.The "Bomb" made only one part of the government the supreme power and all must defer to it,for the good of the nation.

It all grew out of the Manhattan Project,secretly funded,and was a model for the covert activities and overt authority of the government we now experience.Congress was kept in the dark,Harry Truman(Vice President) was also never told until he became President.The National Security State,according to Wills,articulated itself in various intelligence agencies,the CIA,NSA,the programs of classification and clearance,the new doctrines of executive power or presidential signing statements that nullified laws passed by Congress.State secrets multiplied beyond the power to clear them for release or for the courts to demand their production.

In the past,wartime had led to suspensions of various parts of the constitution(loyalists in the revolution,Lincoln cancelled habes corpus in the Civil War,Japanese-Americans in WWII).After the "Bomb" was built,for the first time in our history,the President was given sole and unconstrained authority over all possible uses of the Bomb.The President has the sole authority to launch nation-destroying weapons,he has license to use every other power at his disposal that might safeguard that supreme necessity.

Vice-President Cheney used these facts to justify the policies of the Bush administration on a whole range of issues(warrant less surveillance,indefinite detention of suspects,kidnappings across the world and enhanced interrogation).He was right to say that the logic for all these things is the President's solitary control of the Bomb.Executive power has been,since WWII,Bomb power.

More from Will's"Bomb Power" shortly.

Blaming The Victim:1971 Book by William Ryan,Still Pertinent Today

William Ryan wrote the book"Blaming The Victim" in 1971 but some of his observations are pervading conservative thought today.Many conservatives today use this perspective to support a dying capitalist system(71% of families,combined income, make under $50,000) that has not only turned its back on the lower class but has justified their rationalizations with their poisoned faux pas psychology.They don't look at the external statistics on economic inequality,crime rates,medical uninsured,dilapidated schools,expensive food, housing and a host of social problems that affect class mobility.Class mobility is basically the same for each economic level.Do we victimize the middle class for not making it into the upper class?
The generic process of Blaming the Victim,according to Ryan, is applied to almost every American problem. The miserable health care of the poor is explained away on the grounds that the victim has poor motivation and lacks health information. The problems of slum housing are traced to the characteristics of tenants who are labeled as "Southern rural migrants" not yet "acculturated" to life in the big city. The "multi-problem" poor, it is claimed, suffer the psychological effects of impoverishment, the "culture of poverty," and the deviant value system of the lower classes; consequently, though unwittingly, they cause their own troubles. From such a viewpoint, the obvious fact that poverty is primarily an absence of money is easily overlooked or set aside.
I have been listening to the victim blamers and pondering their thought processes for a number of years. That process is often very subtle. Victim blaming is cloaked in kindness and concern, and bears all the trappings and statistical furbelows of scientism; it is obscured by a perfumed haze of humanitarianism. In observing the process of Blaming the Victim, one tends to be confused and disoriented because those who practice this art display a deep concern for the victims that is quite genuine. In this way, the new ideology is very different from the open prejudice and reactionary tactics of the old days. Its adherents include sympathetic social scientists with social consciences in good working order, and liberal politicians with a genuine commitment to reform. They are very careful to dissociate themselves from vulgar Calvinism or crude racism; they indignantly condemn any notions of innate wickedness or genetic defect. "The Negro is not born inferior," they shout apoplectically. "Force of circumstance," they explain in reasonable tones, "has made him inferior." And they dismiss with self-righteous contempt any claims that the poor man in America is plainly unworthy or shiftless or enamored of idleness. No, they say, he is "caught in the cycle of poverty." He is trained to be poor by his culture and his family life, endowed by his environment (perhaps by his ignorant mother's outdated style of toilet training) with those unfortunately unpleasant characteristics that make him ineligible for a passport into the affluent society".

According to Ryan, are the poor really all that different from the middle class? Take a common type of study, showing that ninety-one percent of the upper class, compared to only sixty-eight percent of the poor, prefer college education for their children. What does that tell us about the difference in values between classes?

First, if almost seventy percent of the poor want their children to go to college, it doesn't make much sense to say that the poor, as a group, do not value education. Only a minority of them—somewhat less than one-third— fail to express a wish that their children attend college. A smaller minority—one in ten—of the middle class give similar responses. One might well wonder why this small group of the better-off citizens of our achieving society reject higher education. They have the money; many of them have the direct experience of education; and most of them are aware of the monetary value of a college degree. I would suggest that the thirty percent of the poor who are unwilling to express a wish that their children go to college are easier to understand. They know the barriers—financial, social, and for black parents, racial—that make it very difficult for the children of the poor to get a college education. That seven out of ten of them nevertheless persist in a desire to see their children in a cap and gown is, in a very real sense, remarkable. Most important, if we are concerned with cultural or subcultural differences, it seems highly illogical to emphasize the values of a small minority of one group and then to attribute these values to the whole group. I simply cannot accept the evidence. If seventy percent of a group values education, then it is completely illogical to say that the group as a whole does not value education.



Ryan continues,"we return, finally, to where we began: the concept of Deferred Need Gratification. The simple idea that lower class folk have, as a character trait, a built-in deficiency in ability to delay need gratification has been explored, analyzed and more or less blown apart by Miller, Riessman, and Seagull. They point out that the supposed commitment of the middle classes to the virtues of thrift and hard work, to the practices of planning and saving for every painfully-chosen expenditure is, at this point in time, at best a surviving myth reflecting past conditions of dubious prevalence. The middle classes of today are clearly consumption-minded and debt-addicted. So the comparison group against which the poor are judged exists largely as a theoretical category with a theoretical behavior pattern. They go on to raise critical questions, similar to those I have raised earlier in this chapter. For example, on the question of what one would do with a two thousand dollar windfall, there was a difference between class groups of only five percent—about seventy percent of the middle class said they would save most of it, compared with about sixty-five percent of the lower class. On the basis of this small difference (which was statistically, but not practically, significant), the researchers, you will remember, had concluded that working-class people had less ability to defer need gratification. This conclusion may reflect elegant research methodology, but it fails the test of common sense..".

I bring you Ryan's statements to support the lower class and their struggle to overcome economic injustice.Ryan wrote the book forty years ago but remains prevalent today.Many of the conservative arguments remain today as our economy has declined and the lower class array of problems have increased.The once powerful middle class is losing numerous members annually and are joining the victims that they tried to separate from in the past.It is ironic that the same conservative middle class of Reagan will join their brothers and sisters of the lower class as new victims to be disregarded by the professional upper class.

John Lennon and David Peel

More Proposals From "Aftershock" by Robert Reich(2011)

Other proposals by Robert Reich include a reemployment system rather than an employment system.It is a system that speeds and smooths the way for those who become unemployed to find new jobs.One piece of the reemployment system would be wage insurance.Any job loser who takes a new job that pays less than his/her former job would be eligible for 90% of the difference,for up to two years.Hopefully,after two years,many workers would have acquired enough on-the-job training to render wages nearly as high as their former ones.Wage insurance would speed the movement of laid-off workers into new jobs and save the costs of unemployment benefits and would also generate added revenues as reemployment workers began paying income taxes.

For workers who need additional skills,income support of 90% of the former wages would be provided up to a year while a worker is engaged in full-time training or education programs.Total costs for the reemployment system would be around $3 billion a year which is above the $2.35 billion that the federal government now spends.However,costs would drop as the skills of the labor force improved and the rate of long-term unemployment declined.

Any remaining shortfall in revenues would be made up by a severance tax on profitable corporations that lay off their workers.Companies would be less inclined toward layoffs if they had to pay these costs(this is done in Germany).What is needed,according to Reich,is a one-time severance tax on any layoff equal to 75% of the full cost of the laid-off workers yearly salary for all workers under the median wage,50% for all workers above it,and up to 200% of the median.Such a tax would not only give employers more incentive to keep workers on,but would also help pay for the wage insurance and skill upgrades of the reemployment system.

Reich believes tuition should be free at all public colleges and universities,and borrowers of federal loans should be required to pay a fixed percentage(10%) of their taxable earnings for the first ten years of full time work into a fund that finances public colleges and universities.After that,graduates would have no further obligations.This way,graduates who pursue low income occupations(social work,teachers,legal services) would be subsidized by graduates who pursue high-income occupations including business,finance and corporate law.

More to come in the near future.

"Aftershock" By Robert Reich,The Economic Proposals

Robert Reich has grounded his argument in "Aftershock" for a just society in morality.It is simply unfair for a handful of Americans to take home such a large share of total income when so many others are struggling to make ends meet and survive where the "common good" has been supplanted by "self interest".His proposals are important steps to remedy our current economic problems.He claims the proposals will produce a budget surplus and bring back "the bargain"that lifted the U.S. into prosperity from 1947-1975.

The first proposal is a reverse income tax.Reich wants to expand the Earned Income Tax Credit to all Americans earning under $50,000.In 2009,EITC was the nation's largest anti-poverty program.Over 24 million households received wage supplements.Under his plan,workers earning $20,000 or less would receive a wage supplement of $15,000.This supplement would decline incrementally up the income scale to $10,000 for $30,000 earners to $5,000 for $40,000 earners.The tax rate for workers with incomes between $50,000-$90,000(capital gains included) would be 10 percent of earnings.Taxes for incomes between $90,000 and $160,000 would be 20 percent,whatever the income source.The annual cost would be $633 billion.The cost of the tax cuts for the middle-income families would be billions more.These lost revenues would be replaced by a carbon tax and higher taxes on the top 5 percent of incomes.

A carbon tax(coal,oil and gas) would be based on how many tons of carbon dioxide such fuels contain.The tax would be collected at the mine or port of entry for each fossil fuel and would gradually rise over time in order to push energy companies and users to spew less carbon into the atmosphere.Initially set at $35 per metric ton of carbon dioxide,such a tax would raise $210 billion in its first year alone.$115 per ton would yield about $600 billion per year.The public would indirectly pay this tax as prices of goods increase do to how much carbon was used in their production.Gas would go up $1 and an increase of .06/kilowatt hour to the price of electricity.

Higher marginal tax rates would increase on the wealthy to 55 percent for wage earners over$410,000(top1%).Those earning over $260,000 will pay 50 percent and finally earners over $160,000(top 5%) will pay 40 percent.These taxes,Reich's proposals,added to the modest amounts contributed by taxpayers who earned between $50,000 and $160,000,would raise $600 billion and more than our current tax system per year.Added to the $210 billion generated by the carbon tax,the total new revenues would be $810 billion initially and would increase as carbon tax revenues increased.

Under his proposals,income from capital gains would be treated no differently from wages and salaries.These tax rates are not out of line with most of our history over the century.From 1936 to 1980,the top marginal tax rate was 70% or more.During the three decades spanning 1951 to 1980,when the top rate was between 70% and 92%,average annual growth in the American economy was 3.7%.Between 1983 and 2008,when the top rate ranged between 35% and 39%,average growth was just 3%.(supply siders are wrong)

Reich's proposals are initiated to increase spending by the lower and middle class(who spend a much higher percentage of income than the rich) which would help move the economy to full capacity and sustained growth(something we don't have today).Consequently,companies would enjoy higher profits and the stock market would rise.The rich  would pay higher taxes and receive a somewhat smaller share of the economy's overall gains but those gains would be much larger than they would be otherwise.Hence,richer Americans are very likely to come out ahead as they did in the Great Prosperity(1947-1975).

More from "Aftershock" soon.

Marriner Eccles:Architect Of The Great Prosperity 1947-1975

The first chapter of Robert Reich's new book"Aftershock" is titled "Eccles Insight".Marriner Eccles was a Mormon tycoon from Utah who was a director of a railroad,hotel and insurance companies;head of a bank holding company controlling twenty-six banks;and president of lumber,milk,sugar,and construction companies spanning the Rockies to the Sierra Nevada.In the crash of 1929,his businesses were sufficiently diverse and his banks adequately capitalized that he stayed afloat financially.Most economists,leaders of business and Wall St.sought to reassure the country that the market would correct itself automatically and that the governments only responsibility was to balance the budget(sound familiar).Eccles wondered why anyone would invest when the economy was so severely disabled.Investments,according to Eccles,would only take place in a climate of high prosperity,when the purchasing power of the masses increases their demands for a higher standard of living.

Eccles made his national debut before the Senate Finance Committee in Feb 1933,just a few weeks before FDR was sworn in as president.Anticipating what British economist John Maynard Keynes would counsel three years later,Eccles told the senators that the government had to go deeper in debt in order to offset the lack of spending by consumers and businesses(we didn't do enough in 2008).He advised the senators on ways to get more money into the hands of the beleaguered middle class.Eccles connected the dots between how people responded to economic downturn and how his customers reacted to the deep crisis he currently viewed.His proposal included relief for the unemployed,government spending on public works,government refinancing of mortgages,a federal minimum wage,federally supported old-age pensions and higher income taxes and inheritance taxes on the wealthy in order to control capital accumulations and avoid excessive speculation(need most today..conservatives reject all these ideas).Eccles warned that these recommendations should be implemented immediately to restore the economy.

In the first hundred days of FDR's presidency,Eccles proposals were ignored and the president followed the advice of a hodge-podge of ideas cooked up by Wall St. to  keep the economy afloat but nothing else. By mid-December 1933,Roosevelt's Treasury secretary,Henry Morgenthau,asked Eccles to write a report on monetary policy.Morgenthau invited Eccles a few weeks later to join the administration to help alleviate the economic crisis.Eventually,the 1934 budget contained many of Eccles ideas violating FDR's previous promise to balance the budget.According to Eccles,the president swallowed the violation with considerable difficulty.

Eccles knew Wall St. wanted a tight money supply/high interest rates but Main St.of America(real economy) needed a loose money supply and low rates(Wall St.bankers continued this practice in 2008).For the next fourteen years,as governor of the Federal Reserve Board,Eccles continued his vigilance for the welfare of average people and help steer the economy through the remainder of the Depression and WWII.He would also become one of the architects of the Great Prosperity that the nation and much of the world enjoyed after the war.Unfortunately,the likes of Marriner Eccles haven't materialized for the grandchildren of such an insightful businessman.

The Pendulum:Robert Reich and "Aftershock"

The introductory chapter in Robert Reich's new book"Aftershock"(2010,2011) begins with the hope that the economic future will swing back to prosperity for all as it did from 1947-1975.He believes concentration of income and wealth at the top continues to be the crux of America's economic predicament.The economy,according to Reich,will not be strong again until we address this problem.Reactionay politics and social upheaval will be our new pathway if we don't rearrange the amount of money the lower and middle class earns.Reich clams that a pendulum signifies a nation "in it together" or one where the individual goes it alone.We are in the later swing and have been since 1975 when wages began to stagnate for most of America and high income earners increased their assets to enormous heights.

The future is uncertain to Reich and he believes the so-called recovery from the great recession to be anemic for some time.Joblessness will remain for a large percentage of Americans or wages will drop.Either combination slows down the recovery because consumers will not be able to spend enough to keep the recovery going.The lack of sufficient customers will diminish investments that fuel a sustained period of growth.Countries like China will not buy enough American exports to make up for the shortfall because they are concerned with their own unemployment problems.They need to fuel their own economies.The U.S. government will not be able to run deficits large or long enough or keep cheap money sufficient for a long length of time to fill in the purchasing gap.

From 2001-2007,the American economy was running on drained savings,borrowed money through re-financing and credit cards.Families were working more than any nation on earth to make a decent salary but those hours and benefits were at the limit.The underlying problem emerged in the 1980's when the middle class started to be hit with global competition and labor-replacing technologies.Rather than strengthening the safety nets,empowering labor unions,improving education and job training,the nation turned in the opposite direction.Political leaders started to reflect the prevailing faith in the all-knowing free market.They embraced deregulation and privatization,attacked unions,cut taxes on the wealthy and shredded the safety net.The result for most Americans were stagnant wages,increased job security and a steadily widening inequality.

High individual and government debt,claims Reich, is a symptom instead of the cause of our current financial crises.Politicians have escalated the debt problem because they believe in short term fixes instead of tackling  the fundamental problem of wealth redistribution to increase purchasing power to the majority of our population(they spend more of their income).The rich,through political contributions,control the agenda in Congress to keep the disproportional affluence consistent and maintained.

More to come from"Aftershock" in the near future.

Reuters: 21 Journalists Slaughtered in Philippines Massacre

John Boehner:Like Governor Chrisie,Their Policies Violate Basic Catholic Teachings

John Boehner and Chris Christie are Catholics in the world of American politics.They were taught to value the poor first and provide for their needs with action. In every religious lesson, they were instructed by representatives of the religion to be concerned with the hopelessness and desperation of the lower class and give compassion, love,and material resources to meet their needs.Christ was an enthusiastic leader who demonstrated his love for the poor by living, helping and praying for them in their communities with their numerable hardships and anxieties.

More than seventy-five Catholic professors from Catholic University,Xavier,Dayton,Fordham,Marquette, Notre Dame and Santa Clara have signed a letter expressing concerns about budget cuts in programs that aid the poor. The letter writers criticize Mr. Boehner’s support for a budget that cut financing for Medicare, Medicaid and the Women, Infants and Children nutrition program, while granting tax cuts to the wealthy and corporations. They call such policies “anti-life,” a particularly biting reference because the phrase is usually applied to politicians and others who support the right to abortion.The letter to Mr. Boehner stated that the Republican-supported budget he shepherded through the House will hurt the poor, the elderly and the vulnerable, and that he therefore has failed to uphold basic Catholic moral teachings.


 The professors wrote that his voting record is at variance from one of the church’s most ancient moral teachings. The letter also stated “From the apostles to the present, the magisterium of the church has insisted that those in power are morally obliged to preference the needs of the poor. Your record in support of legislation to address the desperate needs of the poor is among the worst in Congress. This fundamental concern should have great urgency for Catholic policy makers. Yet, even now, you work in opposition to it.”

I have been making similar observations about the Republican platform for some time.The vast majority of their members are affiliated with churches and religious organizations that have the poor as the focus of individual and community action to fulfill the requirements of the given religion....aid the poor.The Republicans claim they want to help the poor but don't want the government to use revenues to accomplish the task.They believe that donations from the populace will be enough to eradicate the income inequality in America.They also believe the marketplace(without government interference) will provide the needed jobs and earnings to alleviate poverty.This is a malfunctioned approach that increases hopelessness because they continue to ignore the statistics presented by the government they represent.They would rather represent the citizens(upper income) that fund their campaigns rather than the poor who need assistance at every turn.The Republican platform has turned it's back on the religions they participate in.They might give donations at their local churches but these educated souls are misleading the public and undermining the values of the churches they belong to.The Catholic professors should be admired and respected for their insistence that Christie and Boehner follow the basic values of the religion they follow and cherish.

 

Why Socialism?

Why Socialism?

Next Technology:PV Panels to Solar Concentrators

The next technology Chris Goodall writes about in his book"Ten Technologies To Save The Planet" is solar energy. Goodall lists three main ways to capture the sun's energy.The first is to put long tubes containing liquids in direct sunlight that when heated,with a heat exchange,can be used to heat water for showers and washing clothes.The second way is to use photovoltaic cells in panels to turn the photons of light directly into electricity.The third uses solar concentrators which use mirrors to focus large amounts of sunlight onto a small ares,heating fluids and using their energy to drive a turbine or a Stirling engine to generate electricity.

The first of these approaches has been used for centuries.The author's house has forty glass tubes about six feet long on the roof.Inside each tube is a thin,flat foil of copper.This foil is heated by the sun and transfers the energy to a liquid in a thin pipe running in the center of the tube.This liquid is pumped into a heat exchange that transfers the energy to the hot water tank.It captures perhaps 70% of the light energy falling into the glass tubes and no other solar technologies are anywhere near as efficient than this process.

The second approach produces electricity by means of photovoltaic cells which is still expensive compared to fossil fuel generation.The photovoltaic panels are 20% efficient in generating electrical energy.Most solar panels manufactured today are made from expensive slabs of pure silicon.The silicon is derived from a very abundant substance,common sand,but the process of refining it is complex and energy intensive.By 2009,according to Goodall,the panels across the globe could produce about 15 gigawatts of electricity.Solar electricity is growing rapidly(30-40% a year) but today's global output is only equivalent to a couple of very large coal-fired power stations or a small cluster of nuclear plants.

The largest U.S solar panel manufacturer is First Solar.It expects to achieve grid parity by 2012(cost to produce electricity).First Solar will be supplying several gigawatts of PV panels each year by building huge farms of panels in sunny areas.South-facing mountain slopes are ideal(good solar radiation but they are also relatively cool).First Solar uses a semiconductor called cadmium telluride,from which it makes thin inexpensive panels but only moderately efficient at capturing the sun's energy.

Nanosolar,a company funded by Google,are using CIGS(copper,indium,gallium,diselenide)as a semiconductor.It is revolutionary technology that "prints"the semiconductor material onto a flexible metallic backing layer.It could be wrapped around the exterior of millions of buildings across the world.It is using nanotechnology to precisely arrange the atoms on the printed semiconductor surface.

New solar concentrators are being developed by Covalent Solar,a company that has spun out of MIT.Their new devices increase the power obtained from solar cells by a factor of over 40 without needing to track the sun.MIT's version of this device consists of a piece of transparent glass or plastic plate with a thin film of dye molecules deposited on the face and inorganic solar cells attached to the edges. Light is absorbed by the dye coating and reemitted into the glass or plastic for collection by the solar cells.Their version of this device consists of a piece of transparent glass or plastic plate with a thin film of dye molecules deposited on the face and inorganic solar cells attached to the edges. Light is absorbed by the dye coating and reemitted into the glass or plastic for collection by the solar cells. 

George Carlin: The Illusion Of Choice

John Lennon,Nixon and Bin Laden:Radicalism In Different Forms

I just watched the film John Lennon vs The USA(2006) and it brought back many memories of that time period(1971-76) and the influence both Nixon and Lennon had on me and America's cultural toils.Both Lennon and Nixon were radicals,both with very different perspectives on what is important for the survival of the planet and the health of the United States.During this time period,the Viet Nam War was symbolic of the growing polarity among Americans from how we engage in violence to protect our national security to integrated sexual relationships.Nixon demonstrated a total disregard for the laws of our nation when he orchastated the deportation of Lennon because he was a threat to his 1972 election. His self interest directives was as authoritarian as the communists that he loathed and feared.His form of radicalism underminded democracy just as FOX news does today dispersing misinformation throughout the land in every corner of America.Conservative Nixon tried to silence liberal Lennon by manipulating the FBI and the Immigration Dept. because he was against the American right of free speech and assembly.Lennon was a positive symbol for many young people because of his stand on free speech and his desire to see political issues rectified through non-violence.He was loved because he rejected his celebrity and became one of us as best he could considering his great renown.He became friends with David Peel who was a street performer that I saw many times play during lunchtime on Wall St. I believe John played with him in the streets of NYC many times.Lennon loved America because it was so diverse and full of hope for a better world.Unfortunately,America has a dark side,full of violence and elitism,that quickly enveloped John when he spoke out against the war and Nixon's ominous conservative crowd.

As we listen to all the rhetoric concerning the life and death of Osama bin Laden,I start to wonder where he went wrong on his own quest to change the materialistic culture of Saudi Arabia that was influenced by the consumerism of the west.He was on to something positive when he attacked his peer culture that turned its back on Islam and copied the negative attributes of the west.Lennon,as best he could, was part of the American counter culture that dispised the excesses of materialism.Some radicals within the counter culture were violent and used that avenue to stop the funding and support of the war.Osama grew bitter when his own family disregarded his viewpoints that could have pushed him into the distructive force he became.His rebuke of non-violent demonstration was our misfortune on 9/11 and continues to this day in the Islamic learning centers who manipulate the young to use violent force against questionable enemies.Radicalism can have important relevance in the improvement of any society but it has to be non-violent and democratic.It has to protect the rights of all citizens and remain open to debate in a civilized,exposed environment.Nixon and bin Laden failed to give options to the majority and refused to dialogue with opposing viewpoints because they were afraid of their own shortcomings.As Lennon was afraid of American violence when Nixon was trying to deport him,I am concerned about international terrorism but also our internal propaganda machine that tries to control and distort information for the  benefit of the privileged who control the livelihood of the many.I hope the future will bring a new radicalism that will redistribute wealth to the many who have waited too long in the burning sun.