Tag Archive for Economics

Water, Energy, Money, Blood

April 23, 2012 Economics, Energy, Politics, Values, Wealth No comments

Bless me my conscience; it has been seven months since my last post. In that time, we have witnessed the Republican presidential primary process deliver Mitt Romney—as clear an example of the top 1% as you can get.

We need to think about his success and the success of the 1% in general in a different way than Romney would like, or can even get his mind around. In the conservative worldview, which most of us accept without question, Romney is a winner. He played the game of wealth creation well, and is exactly what we all want to be like: rich (not stiff and awkward). Who doesn’t want to be rich?

In this prevailing worldview the accumulation of vast wealth is what all individuals seek. Along the way jobs will be created, investments will be made, and society will benefit. And this is true to a degree. But jobs are only a once-in-while by-product of wealth accumulation; many times the loss of jobs creates wealth for owners.

The unbounded creation of wealth for the top 1% is also sequestering resources that the rest of us need to be healthy. Imagine if one rich farmer had hundreds or thousands of times more water than the other farmers and there was a drought. This farmer sold the water, but if you couldn’t pay, oh well. I hope you don’t starve.

One person controlling all the precious water is a big problem. What would happen? Would the other farmers attack the rich farmer? Would they be justified in doing so? Would the government back the majority of desperate people and send troops to free the water, or be bought off by the rich farmer and send troops to keep the thirsty, starving mob at bay?

In this metaphor, water equals money. But both actually equal energy. No water, no energy for the growth of a crop. No money, no energy for the growth of the economy. By playing the game of individual wealth creation, which we all do, the winner’s jackpot is now detrimental to everyone else. The irrigation system of the economy is dry, not because there isn’t enough money, but because the flow is being restricted and tightly controlled. Money is flowing not to dehydrated everyday people but into the endless reservoirs of the 1%.

Never mind that people are dying or becoming homeless because they can’t pay their medical bills. In the system we’ve bought into Romney wins and we all lose. It’s perfectly fair that he get as much as he can. Concern for the losers is not part of the equation. But since money is the energy needed for growth, look for higher costs in blood when that energy is not forthcoming.

The Government is Not a Business

June 27, 2011 Economics, Media, Politics, Republicans, Values, Wealth No comments

Have we forgotten whose policies caused the plunge?

In the graphic above, lifted from ABC’s “This Week” with Christiane Amanpour, the yellow line shows how much deeper the current recession is than all previous recessions, at least since 1980. So because the economy is not healing fast enough, we should turn its management back to the people whose policies caused the crash in the first place? Look doctor, my loved one isn’t getting better as fast as I would like. So I think I’m going to go back to the doctor who administered the poison. You know, because whatever you’re trying to do isn’t working. Maybe that other doctor will be good this time.

This reasoning seems to be treated as perfectly logical in the lame stream media. That’s right, I’m using Sarah Palin’s phrase, but for the complete opposite reason. The lame stream media seems to accept the Republican spin that reducing the deficit is the most important step we can take to create jobs. Why? It’s clearly bullshit. Yes we need to cut the deficit, but to even pretend that this will somehow revive the economy is ludicrous. Cutting is cutting. You can’t cut programs without cutting jobs.

What does a CEO do when he needs to get the company back on solid footing? He cuts jobs. He lays people off. He reduces spending to improve the bottom line and get profits back up. Fine. This restoration of the company’s fiscal health doesn’t create jobs, it costs jobs.

The policies the Republicans are trying to put through are not about jobs. They are about deficit reduction, which is essentially restoring the country to a fiscal balance. They seem to view government as a big corporation that is not in good fiscal health and themselves as CEOs who will cut spending and restore the company to the black. They clearly care more about fiscal responsibility, i.e. profits, than they do about the well-being people. This is about the ideology, or rather mythology, of personal freedom. When people are free from government regulations and programs that take money from the worthy workers and wealthy job-creators and give it to the undeserving lazy poor then everything will be in balance and a growing economy will be magically restored.

Not only is this ideology totally wrong, with no possible way of creating growth, it will exacerbate the destabilizing disparity of more money going to fewer and fewer super rich overlords. This is fascism and it’s where Republican policies have been and will continue taking us.

At this moment in time, as the Republicans petulantly refuse to consider any discussion of closing loopholes on their large corporate puppet masters, it seems as if many of these zealots truly believe in the righteousness of their cause and are willing to crash the global economy in the name of fiscal balance. This is shear madness. And yet the “free press” pretends that it’s a legitimate approach. How can one not be pessimistic when clear stupidity passes for a valid economic option and when people are so deluded and mislead that they will seriously consider returning the patient to the care of the poisoner?

Corporate Interests Do Not Equal Societal Good

May 1, 2011 Politics, Values, Wealth No comments

This video from the Network of Spiritual Progressives explains clearly why our political system is leading us to a society of haves and have nots–where there are fewer richer haves and more poorer have nots. Look, we all want to be rich and/or famous, but this doesn’t need to happen without a little more balance and attention to what’s ultimately in everyone’s interest. 

Dynamic Equilibrium vs. More More More

July 26, 2010 Economics, Energy, Politics, Values No comments

In high school I learned that living systems, if they are healthy, achieve a state of dynamic equilibrium. That is they are in balance. There are a lot of processes going on but they act on each other to stay in balance. A simple example is any local ecosystem prior to man’s arrival. There may be too much rain or too many of one kind of species for a while, but the overall ecosystem comes back into balance over time. Without humans, the whole earth would be in a kind of dynamic equilibrium.

Clearly humans have thrown the natural balance of the planet out of whack. We’re using a huge amount of energy and creating a huge amount of waste product. Without a change, the energy required to keep human progress going will run out. More people chasing a better life will need more and more energy—more coal, more oil, more water, more food. More energy for more machines and more energy for more humans.

More energy use means more waste by product—carbon dioxide, methane, toxic chemicals, trash. And this waste is what’s threatening to throw the planet into a new state of dynamic equilibrium that will be extremely detrimental to humans and other life on the planet. Balance will be restored but at the cost of many lives and much hardship. But you probably know this already. The question is can we change?

To change the way we act requires a change in beliefs and values. Right now most people on the planet are operating with a core set of beliefs that is not aligned with our best interests or the true nature of the universe. We believe that the pursuit of happiness equals the pursuit of stuff, of wealth. We think the more stuff we have the happier we’ll be. Our economic systems are set up to encourage this, to promote “wealth creation.”

But it turns out, according to Jeremy Rifkin in The Empathetic Civilization, that “once people have achieved a minimum level of well-being that allows them to adequately survive and prosper, additional accumulations of wealth do not increase their happiness but, rather make them less happy…” [p 497].

The idea that we must accumulate all that we can, that life is a competition, is ingrained in all of us. “I’ve earned this stuff, it’s mine, and the government doesn’t have any right to take it and share it with others who didn’t work for it.” That’s the way the prevailing value system shakes out if you’re a “conservative.” But unless we refocus on creating a dynamic planetary equilibrium for all, rather than wealth creation for a few, we face disaster for all.

The End Is Near

July 2, 2010 Economics, Energy, Evolution, Politics, Values No comments

If you’re awake and paying attention you may have noticed that things aren’t going so well right now. The oil spill in the gulf is a harbinger of more difficult challenges ahead as we have to go to greater depths, literally and figuratively, to find the oil that powers our world. That’s because the end of easy cheap oil is here. That’s bad news for the economic reality of the life we’ve become accustomed to. Because to work properly, the dynamics of our current economy depend on constant growth fueled by cheap oil. So the end of life as we know it is near. And the change that is bearing down on us is not pretty.

Of course it’s not like the economic system we have has been working all that well anyway. The middle class is going backward and the millennials are really going backward in terms of prosperity. The world economy had to stop growing sometime. Constant growth—in the stock market, in home prices, in ever more affordable energy—has never been possible. But it’s only now, when it’s ending that we realize we shouldn’t have expected an ever-rising arrow of economic well-being.

The idea that most of our kids will have a better life than we did has already ended. With cheap energy ending, global warming coming and a world economic system increasingly unable to sustain itself at the current level, life as we’ve come to know it is definitely ending.

The question is how bad will it be when it ends? You see, many great civilizations, such as Rome and the Egyptians, collapsed not because of conquerors, but primarily because they grew too large for the energy resources available. Their agricultural land went fallow and in the case of Rome at least, the dark ages ensued. (This is laid out in the great 2009 book The Empathetic Civilization by Jeremy Rifkin.) Right before the industrial revolution Europe was entering an energy crisis because the wood they used for virtually all housing and energy was almost gone. Fortunately rail and mining technology arrived just in time for a transition to coal without a real nasty economic collapse.

Will we be so fortunate? Or will we only transition to new forms of cleaner, sustainable energy after life as we know it ends? Right now the power lies in the hands of those who control the oil and the industries that rely on it. Unless we all rise up and recognize it’s already ending and work together to make a transition many of the humans on this planet are definitely going feel extreme stress. I don’t want civilization as I’ve known it to end. But unless we radically change course, the end truly is near. It’s too bad that many in power have let self-interest be a blanket they pull up over their heads to keep from having to acknowledge how near the end is.

No Free Market

July 29, 2009 Politics One comment

I have a niece who is a junior at college. She’s very bright and articulate and politically engaged. However, she seems to be a libertarian. So I sent her The Shock Doctrine, by Naomi Klein to start a discussion with her. That was in April. Here’s the follow up email.

I have been delinquent in engaging in the discussion I intended to start with you about politics via The Shock Doctrine. I understand that you became disillusioned with it after a while and decided it wasn’t worth the time. No matter. The point is that the last time we spoke, you seemed to have some libertarian-like ideas that gave me the impression you believed in free market capitalism. I wanted to engage you on this point because there is no such thing as free market capitalism, unless you mean that those with the capital are free to call the shots and everyone else should believe in the myth that they too can become rich and keep their mouths shut.

The Shock Doctrine shows that many of the dictators in the recent past, such as Pinochet, who used torture and murder to maintain power, was secretly backed by the free-market capitalists of the University of Chicago and the IMF. This capitalism, in essence, delivered state assets and the country’s natural resources into private hands at the point of a gun. Free market capitalism equaled brutal dictatorship. The brutality—the shock—was a necessary accompaniment because without it, in a democratic system, the populace would never have allowed such pillaging of the common national resources.

The official story in the US media was that we were of course against this brutality, as most human beings are. However, when you dig down, as the author did, you find that all of the financial institutions of the capitalist world—IMF, banks, and others—were supporting the brutality for economic gain.

The point being that free market capitalism is not free, not virtuous, and not in the best interests of most humans in most countries. Capitalism that is properly managed by governments elected by the will of the people, as we have in this country, is superior to free market capitalism because it brings other important values into the equation.

When capitalism is not regulated aggressively enough, it runs amuck. That’s why we’re in the economic mess we’re in now. And yet, we remain committed to a system where less than a year after they were allowed to drive the economy of the world into the ground, the capitalist demigods of Wall Street are once again reaping bonuses that total more that what most people make in ten years.

I suggest that this money has nothing to do with the value these demigods delivered to society. Which is OK. Neither do the salaries paid to sports stars or entertainers. It is natural to want to be a demigod. But we should not be confused that the type of capitalism being practiced in this country, and indeed since kings and noble people controlled all wealth, is the best way to organize societies concerned with things like social justice and ending human suffering. There needs to be a careful nurturing of the instinct that allows people to transform themselves into demigods along with the authority to keep these demigods from controlling the system solely for their own benefit. For that is the natural course of free market capitalism.