Thursday, January 19, 2012
Thursday, December 22, 2011
I think Im Turning Japanese
How We Can Avoid Becoming Like Japan David M. Smick — December 2011 PrintPDFThese days, it is said, the industrialized world economy is like a beauty pageant for the unattractive in which the victor will be the contestant deemed the least ugly. And so, as disappointingly as the U.S. economy has performed over the past four years, America could still end up a winner. That helps explain why U.S. Treasury bonds continue to be the safe haven for the world’s capital. But is being the “least ugly” good enough for a country experiencing rising social disruption stemming from high unemployment and declining personal income?
Twice a year, the world’s central bankers, finance ministers, and bankers gather for meetings of the IMF and the World Bank. In the evenings, policymakers and the masters of the universe hobnob over cocktails and canapés at various hotel receptions. During the latest such gathering in late September, I conducted an informal poll. In any cocktail conversation with a central bank or finance ministry official, I would utter this statement: “So the Eurozone and the United States are both becoming Japan.” To my surprise, virtually no one disagreed. That would not have been the case six months earlier.
“Becoming Japan” would mean that the economic situation in Europe and the United States would come to resemble Japan’s two lost decades of dismal economic performance since the early 1990s. The weight of crushing public debt and a traumatized banking system led to the creation of a zombie economy. Because of the government’s massive spending programs on infrastructure, which barely kept the economy from collapsing, the debt eventually ballooned to twice the economy’s size. The Japanese people fell victim to an economic slow-bleed condition.
Like Japan, both the Eurozone and the United States have accumulated massive public debt as a result of bailouts, fiscal stimulus, underperforming economies, and declining tax receipts. Like Japan, both have powerful banking sectors with balance sheets still holding toxic assets at unrealistically high valuations. And like Japan, both are beginning to resemble economies that have lost their daring.
Today Eurozone policymakers are in the fight of their lives trying to save their monetary union. Their banks are loaded with questionable Greek, Portuguese, Irish, Spanish, Italian, and French sovereign debt. One minute, policymakers achieve a “historic breakthrough” in solving the problem. Stock markets soar. The next minute, markets collapse. And why? Because of the simple math. The Eurozone economic-crisis managers have $380 billion in hand to resolve a $7.2 trillion problem. The total sovereign debt and external bank debt of the five most troubled Eurozone countries (Greece, Ireland, Italy, Portugal, and Spain) is $7.2 trillion. Yet the Eurozone’s new rescue bailout fund has only $620 billion in cash, and a third of that is already committed to previous bailouts. Policymakers are holding a BB gun in the face of a charging bull elephant.
If, as expected, the German taxpayer backstops the rescue operation, the spending—including government guarantees—will be enormous. Germany’s debt-to-GDP ratio could exceed 200 or even 240 percent (compared with 80 percent today), according to some experts. That’s higher than Japan’s debt-to-GDP ratio. Doing nothing would be a huge risk, to be sure. But a colossal expansion in the Eurozone’s core country public debt risks a downgrade by the international credit-rating agencies. Eurozone interest rates would rise. Eurozone banks would come under further duress. Lending and economic growth would decline, dealing a severe blow to an already fragile economic system. In short, for a while at least, the Eurozone could risk an extended period of mediocre economic performance.
This would be a horrible outcome for the rest of the world, including the United States. Today, as a result of bailouts, fiscal stimulus plans, and low growth, the world’s public and private debt has already reached an incredible 300 percent of GDP. Since January 2008, global growth has averaged only 1.2 percent, so tax receipts have plummeted. Analysts say not to worry, this is a necessary period of public and private deleveraging, and once it’s over, growth will resume.
If only things were that simple. Since January 2008, the world’s public and private debt has actually increased by 17 percent. This figure will swell once the full bill for the Eurozone bailout comes due. As a result, the entire world is at risk of undergoing a brutal revaluation of asset prices that will instantly make it a poorer place. Central banks across the globe will resort to various artifices to pretend it isn’t happening. Financial markets will simply respond by taking down the stock prices of the banking sector, risking a credit crunch.
Japan and the Eurozone both have debts twice the size of their economies, with zombie banking systems and increasingly pessimistic societies. Can the United States avoid joining this ignominious club? After all, America’s public debt is now approaching 100 percent of GDP. How do we keep ourselves from becoming Japan?
_____________
American economists are facing a crisis of confidence. The $860-billion Obama stimulus, which was intended to raise levels of demand dramatically, failed miserably to live up to its expectations. Conservative economists have little reason to be smug about this failure, as the policies many of them championed during George W. Bush’s administration didn’t work very well either. If you toss out the effects of home-equity loans, refinancings, and other byproducts of the bubble, the economy grew by less than 2 percent during Bush’s tenure. Over the last decade, productivity growth, higher than 2.5 percent, was greater than the productivity growth of the 1970s, 1980s, and even the 1990s. Yet for the first time since the Great Depression, this productivity performance failed to produce new jobs. Economic theory said it wouldn’t happen that way, and yet it did.
Today, Washington is full of tax-reform schemes, ideas for small-business stimulus, proposals to bend the cost curve of entitlements, and ideas for smart infrastructure investment financed by new infrastructure banks. The Federal Reserve is toying with deploying a third round of monetary stimulus. Yet before policymakers act, they need to answer these questions: Why, after unprecedented amounts of fiscal and monetary stimulus, did the economy fail to perform? Is there something more fundamental at work holding back investors and consumers? Is the world experiencing a long-term period of overcapacity? Are U.S. workers not being hired because the negative effects of America’s mediocre public educational system have finally arrived?
The good news is that Washington policymakers are for once engaging in the kind of self-reflection their Japanese counterparts never managed. In one form or another, everyone agrees that virtually all the net new American jobs created in recent decades have come from small, young, start-up firms. There appears to be a begrudging realization that America is facing a start-ups crisis, with business start-ups having dropped by 27 percent from 2006 to 2009. New policies are needed.
There also seems to be a consensus that the U.S. jobs crisis is the direct result of the difficulties firms face in initiating initial public offerings (IPOs). Because the regulatory barriers have increased, the proportion of IPOs (those worth less than $50 million) over the past decade has plunged. That is a critical development because 9 out of 10 jobs created by venture-backed firms take place after the firms go public. So without improving the financial conditions for an explosion in IPOs, America’s jobless nightmare is likely to continue.
Another truth has been unearthed by the troubles of the last four years: Consumers are influenced far more by the prices of their homes than by the values of their stock portfolios or retirement funds. A year ago, when the Federal Reserve flooded the economy with money, the implicit goal was to create a stock market rally as a means of encouraging what economists call a “wealth effect.” It did. Today Republican presidential candidates criticize Chairman Ben Bernanke for having politicized the Fed by advancing this policy, which is nonsense; when traditional economic tools aren’t working, people like Bernanke have no choice but to experiment. But the huge boom in consumption never happened. That’s because for most people, the negative perception of the future value of their homes trumps all other factors.
America has never undergone a vigorous recovery without real estate leading the way. And that seems unlikely any time soon. Yale’s Robert Shiller, the nation’s expert on the matter, predicts U.S. home values will continue to drop. Recently, Republican candidate Mitt Romney spoke an uncomfortable truth—that for the U.S. economy to recover, the housing market must “clear.” This process will be grueling, but if the U.S. economy is to rebound, consumers need to feel in their bones that housing prices across the board have reached a bottom.
This idea was in common discussion in 2008 when the financial meltdown first occurred. And yet the policy to combat the crisis went in a different direction. If things go badly, when the history of this post-crisis period is written, the summary could well be as follows: After the U.S. bubble burst (and the European sovereign-debt bubble burst), elites marshaled their political power. They cajoled their governments and central banks to produce generous bailouts, subsidies, guarantees, fiscal stimuli, and monetary injections to try to prop up the assets on the balance sheets of big banks at value levels that were unsustainable. Such efforts were like trying to keep the tide from dropping. Eventually all the monetary and fiscal policy tricks either failed or, at best, kept the economy barely afloat.
That is why the big banks are at the center of today’s populist dramas. During the Clinton administration, James Carville offered the clever line that if he believed in reincarnation, he’d like to come back as the powerful bond market. He should have asked to come back as a Wall Street or European banker. That’s because we’ve learned that no matter how foolish your mistakes are, your government and central bank stand ready to help, no matter the cost to the rest of society in the form of unintended consequences. True, in the midst of a financial crisis in a democratic society, policymakers may have no choice but to “do something.” But these unintended consequences have been destabilizing.
The issue is not whether the big banks should have been bailed out. They had to be. The question is how they were bailed out. The original case for the TARP bailout in the fall of 2008 was to use $700 billion in funding to remove the toxic assets connected to bum real-estate loans from bank balance sheets. Putting the taxpayers at such risk would have no doubt necessitated a change in bank management and a restructuring of the too-big-to-fail Wall Street banking industry. But the idea made some sense. It was to avoid the 1990s Japanese mistake of leaving the toxic assets on the books, which led to two decades of diminished lending.
Yet in implementing the bailout, Washington blinked. Wall Street convinced the New York Fed’s Timothy Geithner and the man Geithner would succeed as treasury secretary, Henry Paulson, that removing their toxic asset–backed securities was too difficult, legally and technically. So TARP instead was used to support bank stock prices. The too-big-to-fail banks survived. And thrived.
Meanwhile, the Fed slashed short-term interest rates to near zero percent. This too provided a cash cow to the big banks. (They borrowed from the Fed’s Discount Window for next to nothing and bought much higher-yielding government-agency paper for lucrative profits, with no need to add to their reserves, which would be the case, say, if they issued a jumbo loan to the private sector.) But the unintended consequence was nightmarish. Average folk dependent on money market fund returns and retirees with fixed-income investments needed to supplement Social Security took a financial chop to the neck. Their returns dropped in some cases to below 1 percent.
And so this period may be remembered for having allowed the greatest transfer of middle-class and elderly wealth to elite financial interests in the history of mankind. And to make matters worse, this losing effort to prop up big-bank asset values has contributed to mind-boggling global debt-to-GDP ratios. We may be saving our banks, but we are losing our economy.
And even so, despite all that, despite being catered to by governments, global banking looks dismal. The Eurozone banks are hanging by a thread. The Chinese state-run banks are hiding a mountain of toxic debt that can never be repaid. The timid Japanese banking dinosaurs can barely get out of their own way.
Since the Second World War, the U.S. economy has benefitted from a many-tiered financial system that was the envy of the world precisely because of its ability to assess risk and target entrepreneurial initiative. As a result of the financial system’s ability to locate and finance innovation, the American economy became a turbocharged job-creating machine. This financial model has broken down.
Today, when policymakers talk about fixing the American economy, they mention reforming the corporate tax code, fixing bridges, eliminating harmful regulations, adjusting Social Security COLAs, and improving the educational system—all important goals. But the first order of business is to fix the financial system. The U.S. economy is unlikely to recover fully until the banking system is restructured. Banks need to be lean and agile, with skin in the game and a taste for prudent financial risk in America’s innovative future. They can’t be the electric company. And yet that is what America’s 20 largest financial institutions, now under a spate of regulations and dependent on political largesse and friendships, are becoming.
It is here, however, that the Republican Party, which seems to be arguing for an across-the-board “big bang” approach to regulatory reform, is playing a politically risky game. When Republicans talk of rolling back the Obama financial regulations, they need to distinguish between the Wall Street insiders and the hundreds of overregulated, middle-sized regional banks and thousands of small banks that are vital to job creation. These suffocated, overregulated smaller institutions are desperate for financial oxygen. Washington needs to change how the big Wall Street banks operate.
The GOP needs also to push more strenuously for a growth agenda that is not only domestic, but global. Given the connected nature of the world financial system, there ultimately are no winners in the “least ugly” beauty pageant, not even the United States. That’s because turmoil elsewhere will inevitably lead to massive capital flows into U.S. dollar assets for safety. Such a development would drive down long-term U.S. interest rates, dramatically narrowing the gap between short- and long-term rates (what economists call a flattening of the yield curve). This would kill bank profitability and lending, perhaps even forcing some regional banks out of business. When Japan’s long-term interest rate dropped to below 1 percent, bank lending screeched to a halt. Today U.S. long-term rates are hovering around 2 percent. Adding to this U.S. vulnerability, China and other emerging market economies continue to produce regardless of demand, contributing to worldwide overcapacity. A global growth agenda and new foreign exchange rules are therefore essential.
So can the U.S. economy avoid even a moderate version of the “Japan disease”? The answer ultimately depends on the degree to which Washington has the courage and will to adopt solutions that simultaneously reduce debt and increase economic growth. Accomplishing these twin goals will not be easy. The European bureaucrats demanded the Greeks reduce their debt without offering reforms to encourage growth. As a result of these austerity policies, Greece’s debt-to-GDP ratio, 120 percent before the crisis, jumped to 170 percent.
U.S. policymakers cannot make that mistake. This is no time for timidity, as the Japanese demonstrated early on in their crisis when they underestimated the threat. Solutions need to be bold. Success will depend on whether the banking system can be rebooted and a floor in housing prices found, on whether the cost curve of American entitlement spending can be bent downward, and on whether the financial resources can be unleashed to create a series of revolutions in American innovation. Ultimately, success will depend not on whether we can establish ourselves as the “least ugly” in the global beauty pageant, but on whether the traditional American hunger for risk-taking—what David Brooks has called a desire to “salivate for the future again”—can be reignited.
Twice a year, the world’s central bankers, finance ministers, and bankers gather for meetings of the IMF and the World Bank. In the evenings, policymakers and the masters of the universe hobnob over cocktails and canapés at various hotel receptions. During the latest such gathering in late September, I conducted an informal poll. In any cocktail conversation with a central bank or finance ministry official, I would utter this statement: “So the Eurozone and the United States are both becoming Japan.” To my surprise, virtually no one disagreed. That would not have been the case six months earlier.
“Becoming Japan” would mean that the economic situation in Europe and the United States would come to resemble Japan’s two lost decades of dismal economic performance since the early 1990s. The weight of crushing public debt and a traumatized banking system led to the creation of a zombie economy. Because of the government’s massive spending programs on infrastructure, which barely kept the economy from collapsing, the debt eventually ballooned to twice the economy’s size. The Japanese people fell victim to an economic slow-bleed condition.
Like Japan, both the Eurozone and the United States have accumulated massive public debt as a result of bailouts, fiscal stimulus, underperforming economies, and declining tax receipts. Like Japan, both have powerful banking sectors with balance sheets still holding toxic assets at unrealistically high valuations. And like Japan, both are beginning to resemble economies that have lost their daring.
Today Eurozone policymakers are in the fight of their lives trying to save their monetary union. Their banks are loaded with questionable Greek, Portuguese, Irish, Spanish, Italian, and French sovereign debt. One minute, policymakers achieve a “historic breakthrough” in solving the problem. Stock markets soar. The next minute, markets collapse. And why? Because of the simple math. The Eurozone economic-crisis managers have $380 billion in hand to resolve a $7.2 trillion problem. The total sovereign debt and external bank debt of the five most troubled Eurozone countries (Greece, Ireland, Italy, Portugal, and Spain) is $7.2 trillion. Yet the Eurozone’s new rescue bailout fund has only $620 billion in cash, and a third of that is already committed to previous bailouts. Policymakers are holding a BB gun in the face of a charging bull elephant.
If, as expected, the German taxpayer backstops the rescue operation, the spending—including government guarantees—will be enormous. Germany’s debt-to-GDP ratio could exceed 200 or even 240 percent (compared with 80 percent today), according to some experts. That’s higher than Japan’s debt-to-GDP ratio. Doing nothing would be a huge risk, to be sure. But a colossal expansion in the Eurozone’s core country public debt risks a downgrade by the international credit-rating agencies. Eurozone interest rates would rise. Eurozone banks would come under further duress. Lending and economic growth would decline, dealing a severe blow to an already fragile economic system. In short, for a while at least, the Eurozone could risk an extended period of mediocre economic performance.
This would be a horrible outcome for the rest of the world, including the United States. Today, as a result of bailouts, fiscal stimulus plans, and low growth, the world’s public and private debt has already reached an incredible 300 percent of GDP. Since January 2008, global growth has averaged only 1.2 percent, so tax receipts have plummeted. Analysts say not to worry, this is a necessary period of public and private deleveraging, and once it’s over, growth will resume.
If only things were that simple. Since January 2008, the world’s public and private debt has actually increased by 17 percent. This figure will swell once the full bill for the Eurozone bailout comes due. As a result, the entire world is at risk of undergoing a brutal revaluation of asset prices that will instantly make it a poorer place. Central banks across the globe will resort to various artifices to pretend it isn’t happening. Financial markets will simply respond by taking down the stock prices of the banking sector, risking a credit crunch.
Japan and the Eurozone both have debts twice the size of their economies, with zombie banking systems and increasingly pessimistic societies. Can the United States avoid joining this ignominious club? After all, America’s public debt is now approaching 100 percent of GDP. How do we keep ourselves from becoming Japan?
_____________
American economists are facing a crisis of confidence. The $860-billion Obama stimulus, which was intended to raise levels of demand dramatically, failed miserably to live up to its expectations. Conservative economists have little reason to be smug about this failure, as the policies many of them championed during George W. Bush’s administration didn’t work very well either. If you toss out the effects of home-equity loans, refinancings, and other byproducts of the bubble, the economy grew by less than 2 percent during Bush’s tenure. Over the last decade, productivity growth, higher than 2.5 percent, was greater than the productivity growth of the 1970s, 1980s, and even the 1990s. Yet for the first time since the Great Depression, this productivity performance failed to produce new jobs. Economic theory said it wouldn’t happen that way, and yet it did.
Today, Washington is full of tax-reform schemes, ideas for small-business stimulus, proposals to bend the cost curve of entitlements, and ideas for smart infrastructure investment financed by new infrastructure banks. The Federal Reserve is toying with deploying a third round of monetary stimulus. Yet before policymakers act, they need to answer these questions: Why, after unprecedented amounts of fiscal and monetary stimulus, did the economy fail to perform? Is there something more fundamental at work holding back investors and consumers? Is the world experiencing a long-term period of overcapacity? Are U.S. workers not being hired because the negative effects of America’s mediocre public educational system have finally arrived?
The good news is that Washington policymakers are for once engaging in the kind of self-reflection their Japanese counterparts never managed. In one form or another, everyone agrees that virtually all the net new American jobs created in recent decades have come from small, young, start-up firms. There appears to be a begrudging realization that America is facing a start-ups crisis, with business start-ups having dropped by 27 percent from 2006 to 2009. New policies are needed.
There also seems to be a consensus that the U.S. jobs crisis is the direct result of the difficulties firms face in initiating initial public offerings (IPOs). Because the regulatory barriers have increased, the proportion of IPOs (those worth less than $50 million) over the past decade has plunged. That is a critical development because 9 out of 10 jobs created by venture-backed firms take place after the firms go public. So without improving the financial conditions for an explosion in IPOs, America’s jobless nightmare is likely to continue.
Another truth has been unearthed by the troubles of the last four years: Consumers are influenced far more by the prices of their homes than by the values of their stock portfolios or retirement funds. A year ago, when the Federal Reserve flooded the economy with money, the implicit goal was to create a stock market rally as a means of encouraging what economists call a “wealth effect.” It did. Today Republican presidential candidates criticize Chairman Ben Bernanke for having politicized the Fed by advancing this policy, which is nonsense; when traditional economic tools aren’t working, people like Bernanke have no choice but to experiment. But the huge boom in consumption never happened. That’s because for most people, the negative perception of the future value of their homes trumps all other factors.
America has never undergone a vigorous recovery without real estate leading the way. And that seems unlikely any time soon. Yale’s Robert Shiller, the nation’s expert on the matter, predicts U.S. home values will continue to drop. Recently, Republican candidate Mitt Romney spoke an uncomfortable truth—that for the U.S. economy to recover, the housing market must “clear.” This process will be grueling, but if the U.S. economy is to rebound, consumers need to feel in their bones that housing prices across the board have reached a bottom.
This idea was in common discussion in 2008 when the financial meltdown first occurred. And yet the policy to combat the crisis went in a different direction. If things go badly, when the history of this post-crisis period is written, the summary could well be as follows: After the U.S. bubble burst (and the European sovereign-debt bubble burst), elites marshaled their political power. They cajoled their governments and central banks to produce generous bailouts, subsidies, guarantees, fiscal stimuli, and monetary injections to try to prop up the assets on the balance sheets of big banks at value levels that were unsustainable. Such efforts were like trying to keep the tide from dropping. Eventually all the monetary and fiscal policy tricks either failed or, at best, kept the economy barely afloat.
That is why the big banks are at the center of today’s populist dramas. During the Clinton administration, James Carville offered the clever line that if he believed in reincarnation, he’d like to come back as the powerful bond market. He should have asked to come back as a Wall Street or European banker. That’s because we’ve learned that no matter how foolish your mistakes are, your government and central bank stand ready to help, no matter the cost to the rest of society in the form of unintended consequences. True, in the midst of a financial crisis in a democratic society, policymakers may have no choice but to “do something.” But these unintended consequences have been destabilizing.
The issue is not whether the big banks should have been bailed out. They had to be. The question is how they were bailed out. The original case for the TARP bailout in the fall of 2008 was to use $700 billion in funding to remove the toxic assets connected to bum real-estate loans from bank balance sheets. Putting the taxpayers at such risk would have no doubt necessitated a change in bank management and a restructuring of the too-big-to-fail Wall Street banking industry. But the idea made some sense. It was to avoid the 1990s Japanese mistake of leaving the toxic assets on the books, which led to two decades of diminished lending.
Yet in implementing the bailout, Washington blinked. Wall Street convinced the New York Fed’s Timothy Geithner and the man Geithner would succeed as treasury secretary, Henry Paulson, that removing their toxic asset–backed securities was too difficult, legally and technically. So TARP instead was used to support bank stock prices. The too-big-to-fail banks survived. And thrived.
Meanwhile, the Fed slashed short-term interest rates to near zero percent. This too provided a cash cow to the big banks. (They borrowed from the Fed’s Discount Window for next to nothing and bought much higher-yielding government-agency paper for lucrative profits, with no need to add to their reserves, which would be the case, say, if they issued a jumbo loan to the private sector.) But the unintended consequence was nightmarish. Average folk dependent on money market fund returns and retirees with fixed-income investments needed to supplement Social Security took a financial chop to the neck. Their returns dropped in some cases to below 1 percent.
And so this period may be remembered for having allowed the greatest transfer of middle-class and elderly wealth to elite financial interests in the history of mankind. And to make matters worse, this losing effort to prop up big-bank asset values has contributed to mind-boggling global debt-to-GDP ratios. We may be saving our banks, but we are losing our economy.
And even so, despite all that, despite being catered to by governments, global banking looks dismal. The Eurozone banks are hanging by a thread. The Chinese state-run banks are hiding a mountain of toxic debt that can never be repaid. The timid Japanese banking dinosaurs can barely get out of their own way.
Since the Second World War, the U.S. economy has benefitted from a many-tiered financial system that was the envy of the world precisely because of its ability to assess risk and target entrepreneurial initiative. As a result of the financial system’s ability to locate and finance innovation, the American economy became a turbocharged job-creating machine. This financial model has broken down.
Today, when policymakers talk about fixing the American economy, they mention reforming the corporate tax code, fixing bridges, eliminating harmful regulations, adjusting Social Security COLAs, and improving the educational system—all important goals. But the first order of business is to fix the financial system. The U.S. economy is unlikely to recover fully until the banking system is restructured. Banks need to be lean and agile, with skin in the game and a taste for prudent financial risk in America’s innovative future. They can’t be the electric company. And yet that is what America’s 20 largest financial institutions, now under a spate of regulations and dependent on political largesse and friendships, are becoming.
It is here, however, that the Republican Party, which seems to be arguing for an across-the-board “big bang” approach to regulatory reform, is playing a politically risky game. When Republicans talk of rolling back the Obama financial regulations, they need to distinguish between the Wall Street insiders and the hundreds of overregulated, middle-sized regional banks and thousands of small banks that are vital to job creation. These suffocated, overregulated smaller institutions are desperate for financial oxygen. Washington needs to change how the big Wall Street banks operate.
The GOP needs also to push more strenuously for a growth agenda that is not only domestic, but global. Given the connected nature of the world financial system, there ultimately are no winners in the “least ugly” beauty pageant, not even the United States. That’s because turmoil elsewhere will inevitably lead to massive capital flows into U.S. dollar assets for safety. Such a development would drive down long-term U.S. interest rates, dramatically narrowing the gap between short- and long-term rates (what economists call a flattening of the yield curve). This would kill bank profitability and lending, perhaps even forcing some regional banks out of business. When Japan’s long-term interest rate dropped to below 1 percent, bank lending screeched to a halt. Today U.S. long-term rates are hovering around 2 percent. Adding to this U.S. vulnerability, China and other emerging market economies continue to produce regardless of demand, contributing to worldwide overcapacity. A global growth agenda and new foreign exchange rules are therefore essential.
So can the U.S. economy avoid even a moderate version of the “Japan disease”? The answer ultimately depends on the degree to which Washington has the courage and will to adopt solutions that simultaneously reduce debt and increase economic growth. Accomplishing these twin goals will not be easy. The European bureaucrats demanded the Greeks reduce their debt without offering reforms to encourage growth. As a result of these austerity policies, Greece’s debt-to-GDP ratio, 120 percent before the crisis, jumped to 170 percent.
U.S. policymakers cannot make that mistake. This is no time for timidity, as the Japanese demonstrated early on in their crisis when they underestimated the threat. Solutions need to be bold. Success will depend on whether the banking system can be rebooted and a floor in housing prices found, on whether the cost curve of American entitlement spending can be bent downward, and on whether the financial resources can be unleashed to create a series of revolutions in American innovation. Ultimately, success will depend not on whether we can establish ourselves as the “least ugly” in the global beauty pageant, but on whether the traditional American hunger for risk-taking—what David Brooks has called a desire to “salivate for the future again”—can be reignited.
Tuesday, November 15, 2011
More hilarity drom the forum of Occupy Atlanta:
Unfortunatley many goals people imagine are not possible and won’t be. This is because we are humans and history shows this type of idealistic, “collective, one body that agrees to disagree for the better of all people” society will not happen. And I venture to say it shouldn’t happen. That needs divine rule not rule by a majority of people, even good hearted people. SOmewhere in the mix of things people’s flaws always muddy the intention of such societies. That said, the mix of good intentions but semi selfish ones are what worries me about occupy. Alot of people I know do not agree with the movement because right now its standing for nothing but ideas of some whole new world with new rules. I think its nice (because I’m an idealist) however, it is not realistic. We need to make real aims to remind America and the world of good ethics and hard work. Be willing to role up are sleeves and work past things that are unfair in this world because the world is unfair period. However by becoming a type of moral concious, we should remind America that we can have a survival of the most fit attitdue in bussiness balanced by an obligation to work together and ensure that we are all fit. It takes many goals to reach a vision. Some goals are being met and when they are we need to work on clear, workable replacements for some of those. For instacne if Bank of America has let go of its fees in part because of the movemnet, we should create something acceptable in its place because Bank of America is still losing money and people will still get hurt by other fees, requirements, or even losing a safe place for the investments they work on. I’m just saying to be taken seriously people who do not agree with Occupy need REALISTIC answers not a place just to OOCUPY MORE QUESTIONS and uncertainties. Thanks Peace
the Birdman replies:
An emergency plan if everything falls apart or an alternative that would be what the 1% fear more than anything else: “Either give a representative government that isn’t bought and paid for by corporations or there will be no centralized government and the workers will take over the corporations!”
I believe that our problems with the economy and the power of corporations are based on a structure that began when we started using money in exchange for goods. Money became the basis by which we measure value and we have developed a science for analyzing the value of every effort by assigning a dollar everything we can conceive.
What we perceive as crimes by large corporations is seen as just good business sense when looked at it “objectively” on the spreadsheet. Government can fine a corporation and this can be figured into the analysis. “Can we still come out with a profit after paying the fine?” Corporations feel like they have a moral obligation to their stockholders. Our puritan work ethic makes us feel morally obligated to do what we were hired to do.
I hope that, at the very least, this movement will force the government to break up corporations that have become wealthier and more powerful than any government, and create financial incentives that will make responsible decisions by corporations cost effective.
Ideally, I would like for the system to change so completely that we no longer see money as the measure of all value. The only way for this to work is for money to have no value and this change could be brought about by a mass effort to stop making all payments to corporations, but to keep working while developing new ways and systems to distribute our goods and services to others freely.
“Are you suggesting we go back to a barter system, Birdman?”
No, I envision an anarcho-syndicalist system, similar to what the occupiers are doing. No one is worrying about trading services and achieving some sort of equity. People are working and helping each other. I pray to God that we do something like this if the stock market completely crashes and the corporations go belly up and most of the people are out of work. We should keep working and GIVE the services away, NOT TRADE. In a crisis we must feed anyone who is hungry, take in anyone who needs shelter and treat anyone who needs medical help. Why can’t we do this before we are in a crisis? Because, everything is OWNED by someone who is trying to get the highest possible price for their goods and services. This was efficient and is still certainly more efficient than bartering, but haven’t we evolved enough that we can just do our work and help others every way we can and have faith that we will be helped by others? Probably not…but may we please work towards something like this?
I will sign all the petitions. I agree with ever idea and every demand on everyone’s “laundry list,” but money does cause people do things for its sake alone. It abstracts value and takes it away from the real good that it is supposed to represent. Wars are fought for mere numbers on a ledger. These numbers become meaningless just as soon as we say so.
“Are you suggesting that we start a communist revolution? Communism seems to have failed in the USSR. People seemed to not be free and had so few choices of goods and services.”
This could be seen as a pure form of communism: a form we have never seen in recorded history. The USSR really isn’t a good example of this since it was a socialist country with a very centralized bureaucracy. The lack of choice was mostly because of a bureaucratic elite that decided what would be the most efficient ways to meet everyone’s needs. I believe, like some other posters here, that we should not have a central authority. There could be people whose roles are to find services for others, suggest different types of products, etc. based on informed analyses of trends in technological development, social demographics, lifestyles, etc. However, they would not have any authority to enforce their ideas. Adam Smith’s “invisible hand” of capitalism would be alive and well; healthier, in fact, than it is now with corporations being so large that they control what is available for us to buy and what the prices will be. The big difference with capitalism is that we would take money out of the equation. We would only be concerned with determining people’s needs and finding the best means to meet those needs. These decisions would be made collectively by those making the products or providing the services, not by a central government. Each corporation would continue to exist, but be controlled by those who work in them, not by an administrative elite. I see no reason why there would be less choice of goods and services. It seems to me there would be more because more people would be working, creating, inventing…
I am not proposing a total lawless anarchy. We will need the protection of police, military, etc. but these must serve the people’s needs, determined by a true democracy: something we have never really seen either. All laws would go from local consensus to a national consensus. It is possible that our present nation is too large and would need to become separate autonomous regions, however, continued associations with wider regions could help provide us with more goods and services, greater security and general harmony with the rest f the world. Obviously all of this would work best if it happened globally.
Again, this could be either an emergency plan if everything falls apart or an alternative that would be what the 1% fear more than anything else. “Either give a representative government that isn’t bought and paid for by corporations or there will be no centralized government and the workers will take over the corporations!
the Birdman replies:
An emergency plan if everything falls apart or an alternative that would be what the 1% fear more than anything else: “Either give a representative government that isn’t bought and paid for by corporations or there will be no centralized government and the workers will take over the corporations!”
I believe that our problems with the economy and the power of corporations are based on a structure that began when we started using money in exchange for goods. Money became the basis by which we measure value and we have developed a science for analyzing the value of every effort by assigning a dollar everything we can conceive.
What we perceive as crimes by large corporations is seen as just good business sense when looked at it “objectively” on the spreadsheet. Government can fine a corporation and this can be figured into the analysis. “Can we still come out with a profit after paying the fine?” Corporations feel like they have a moral obligation to their stockholders. Our puritan work ethic makes us feel morally obligated to do what we were hired to do.
I hope that, at the very least, this movement will force the government to break up corporations that have become wealthier and more powerful than any government, and create financial incentives that will make responsible decisions by corporations cost effective.
Ideally, I would like for the system to change so completely that we no longer see money as the measure of all value. The only way for this to work is for money to have no value and this change could be brought about by a mass effort to stop making all payments to corporations, but to keep working while developing new ways and systems to distribute our goods and services to others freely.
“Are you suggesting we go back to a barter system, Birdman?”
No, I envision an anarcho-syndicalist system, similar to what the occupiers are doing. No one is worrying about trading services and achieving some sort of equity. People are working and helping each other. I pray to God that we do something like this if the stock market completely crashes and the corporations go belly up and most of the people are out of work. We should keep working and GIVE the services away, NOT TRADE. In a crisis we must feed anyone who is hungry, take in anyone who needs shelter and treat anyone who needs medical help. Why can’t we do this before we are in a crisis? Because, everything is OWNED by someone who is trying to get the highest possible price for their goods and services. This was efficient and is still certainly more efficient than bartering, but haven’t we evolved enough that we can just do our work and help others every way we can and have faith that we will be helped by others? Probably not…but may we please work towards something like this?
I will sign all the petitions. I agree with ever idea and every demand on everyone’s “laundry list,” but money does cause people do things for its sake alone. It abstracts value and takes it away from the real good that it is supposed to represent. Wars are fought for mere numbers on a ledger. These numbers become meaningless just as soon as we say so.
“Are you suggesting that we start a communist revolution? Communism seems to have failed in the USSR. People seemed to not be free and had so few choices of goods and services.”
This could be seen as a pure form of communism: a form we have never seen in recorded history. The USSR really isn’t a good example of this since it was a socialist country with a very centralized bureaucracy. The lack of choice was mostly because of a bureaucratic elite that decided what would be the most efficient ways to meet everyone’s needs. I believe, like some other posters here, that we should not have a central authority. There could be people whose roles are to find services for others, suggest different types of products, etc. based on informed analyses of trends in technological development, social demographics, lifestyles, etc. However, they would not have any authority to enforce their ideas. Adam Smith’s “invisible hand” of capitalism would be alive and well; healthier, in fact, than it is now with corporations being so large that they control what is available for us to buy and what the prices will be. The big difference with capitalism is that we would take money out of the equation. We would only be concerned with determining people’s needs and finding the best means to meet those needs. These decisions would be made collectively by those making the products or providing the services, not by a central government. Each corporation would continue to exist, but be controlled by those who work in them, not by an administrative elite. I see no reason why there would be less choice of goods and services. It seems to me there would be more because more people would be working, creating, inventing…
I am not proposing a total lawless anarchy. We will need the protection of police, military, etc. but these must serve the people’s needs, determined by a true democracy: something we have never really seen either. All laws would go from local consensus to a national consensus. It is possible that our present nation is too large and would need to become separate autonomous regions, however, continued associations with wider regions could help provide us with more goods and services, greater security and general harmony with the rest f the world. Obviously all of this would work best if it happened globally.
Again, this could be either an emergency plan if everything falls apart or an alternative that would be what the 1% fear more than anything else. “Either give a representative government that isn’t bought and paid for by corporations or there will be no centralized government and the workers will take over the corporations!
Tuesday, October 25, 2011
Occutards!
http://www.youtube.com/watch?v=mgGqNGtaBg8&feature=mfu_in_order&list=UL
http://www.wsws.org/articles/2011/oct2011/atla-o25.shtml
http://www.ajc.com/news/atlanta/occupy-atlanta-rainbow-push-1209058.html
http://www.peacecouncil.net/pnl/03/723/PermittingProtest.htm
Just a few links to keep up!
http://www.wsws.org/articles/2011/oct2011/atla-o25.shtml
http://www.ajc.com/news/atlanta/occupy-atlanta-rainbow-push-1209058.html
http://www.peacecouncil.net/pnl/03/723/PermittingProtest.htm
Just a few links to keep up!
Friday, October 21, 2011
Occupy Consensus
Kind of like a story my old boss Mike Rose told me about consensus meetings at the old WRFG in the 80's, this earnest lefty with cred has a succint point for Occuppy Whatever:
h/t http://cannonfire.blogspot.com/
Did I ever tell you youngsters how I started the Green party in Los Angeles?
Okay, not really. But I kinda sorta maybe arguably played a very small role.
This story goes back to that awful period between college and my first decent job. I was out on my own, poor and miserable. We're talking 1981 or thereabouts.
The Los Angeles Times published its very first profile of Petra Kelly, one of the founders of the German Green Party. I fell in love; she was the warrior-saint of my dreams. Shortly thereafter, the LAT published a right-wing editorial which tried to imply -- without offering any evidence -- that the Green movement was somehow connected to Nazism. An obvious smear. If they were going to such absurd lengths to besmirch Petra, she just had to be cool.
(The LAT could be pretty rank in those days. Of course, as many now forget, pretty much every major news outlet acted like Fox News during the Reagan era.)
I kept a clip of the original Petra piece on my refrigerator. I also ran off a copy for a college friend whom I will call Colin -- who, at the time, flirted with left-wing politics. (He later turned neo-con and ran a ghastly, short-lived right-wing blog endorsed by Mickey Kaus. The 1981 Colin was a different animal.) I've mentioned him before, in the tale of the beauteous seed of Tuco.
(If you want to know what campus activism was like back then, read the first chapter of David Brock's Blinded By the Right. Same godawful shit, different UC campus. I don't blame Brock for his temporary rightward shift, because I know what he went through.)
I gave Colin that clipping about the Glorious Petra: "You want to see someone who gets things done? Someone who isn't all talk-talk-talk?"
He may have noticed the subtle hint of neener neener in my words. Colin's usual idea of political action was to spend the night slurping up caffeine while talking philosophy.
He and I parted company soon afterward. The guy was insufferable. (So was I, but in different ways.) The final straw came when he castigated me for buying a used car and contributing to the destruction of our environment. Of course, I had taken the bus for years, while he never considered getting rid of the recent-model Mustang which his rich mommy had bought for him.
It was time for new friends and a fresh start -- a tactic which worked out very nicely. In fact, I repeated that tactic every seven years or so until I decided that people, in general, suck.
I later learned that passing that fateful newsclip to Colin had unexpected results. The example of Petra Kelly prompted him to get off his philosophy-spewing butt and start an L.A. version of the Green party.
Now, I wasn't an eyewitness to the events that followed, and the story which eventually reached me at fourth- or fifth-hand may be very wrong in many details. But the gist comes to this: Colin and some fellow not-terribly-active "activists" in Santa Monica held a series of actual meetings devoted to getting a Southern California party off the ground.
Of course, there could be no one leader. Of course, the group had to reach consensus on everything. These were lefties, after all. Their precious widdle egos would be injured if everyone did not agree on every point. That meant a lot of arguing, which Colin quite enjoyed. The guy really should have been a lawyer.
But there was no arguing with the invasion of hard-core Stalinists who decided to take over the meeting.
Instead of telling the loopy fans of Uncle Joe "Go away; we want nothing to do with you," the proto-Greens first tried to include them in that all-important consensus. Didn't work. Finally, the non-Stalinist proto-Greens went off to form an alternative Green party, which they called the Green Alternative.
The initial meeting of the Alternative was a scene right out of Life of Brian: "This calls for IMMEDIATE discussion."
Discuss they did. Brave and fearless discussion went on throughout the night, throughout the next day, throughout the next night. Lots of coffee, lots of arguing. This was mandatory because the important thing was to flatter everyone's egos by establishing that all-important consensus.
Also, it was important to avoid leadership at all costs. Leaders had cooties. So they had to reach consensus at a leaderless meeting, which was not easy.
After all of that hyper-caffeinated argumentation, the proto-Greens finally came up with one (1) platform point which, they all agreed, must have a prominent place in their Green Manifesto, a document destined to turn the course of human history. Their declaration came to these six words:
"We must destroy capitalism through poetry."
When that sentence finally reached my ears, it triggered a belly laugh that lasted about a week. Although I never strayed far from my basic New Deal-ish beliefs, the sheer Porky-Pig-in-Wackyland surreality of those six words almost turned me into a Reaganite. Right then and there.
Soon thereafter, Colin skulked away from political involvement (following my earlier example). Some folks came along who started a real, or real-ish, Green party in Los Angeles. I presume that their heads had a somewhat shallower anal encasement.
The point of my story should be obvious.
The young people involved with today's OWS protests have to understand that, beyond a point, consensus does not work. History proves this. Alas, too many lefties keep attempting the search for consensus because, in their theoretical model, the trick should work. In this, they are like libertarians and communists, who keep insisting that their political ideas have never been disproved by real-world events because their systems have never been tried, not really really tried.
In fact, they really really have been tried, and they really really failed.
Consensus, like communism, does not work. Y'know what works? Democracy. Take a vote. If you're on the losing side, just suck it up and wait until the next vote: Maybe you'll convince your opponents to see reason. Or maybe you were wrong all along. Fuck your precious widdle ego.
The other point is, of course, that the OWS movement should not fear leaders, as long as they are always considered replaceable, and as long as they are kept on tethers with a reasonable degree of slack. If a leader shows signs of egomania -- so what? A little bit of egomania is inevitable, even healthy. If it becomes overbearing, slap his or her face until the trance of solipsism wears off.
Leadership is inevitable. One should not worship leaders, of course, and it is always a mistake to place the entire burden on one person's shoulders. A single individual may be discredited or smeared. Over time, everyone does something foolish or disreputable.
Still, who can deny that the struggle for black freedom in America benefited from the leadership examples offered by Frederick Douglass, Martin Luther King and Malcolm X? Where would the Burmese freedom movement be without Aung San Soo Kyi?
That kind of talent must exist in the world of Occupy Wall Street. Why allow the envious and the small to suppress such large voices?
I began this essay by talking about Petra Kelly. The woman was a natural leader -- and she was undone by petty, spiteful individuals in her movement who distrusted the very idea of leadership.
Petra Kelly's friends are bitter about the way the party treated her. 'In the beginning,' said Eva Quistorp, a Green Party MEP, 'we gave everything to the party, we gave three years of our lives unpaid. Now the party is full of salaried bureaucrats who have never given the way we have. And when she needed a job, those bureaucrats would not find her one.'
The question of her mysterious death is a post for another time. Those who accept the standard "suicide pact" story believe that she was depressed by the way the movement mistreated her.
That said, let's not be too impatient. What is meant to happen will happen. Leaders are a bit like stray dogs: It is not necessary to go searching for such a creature, because the right one will bound into your life when needed.
Wednesday, October 5, 2011
stimulus funds go to solar garbage mountain
A closed landfill isn’t likely to be top of mind when it comes to solar energy initiatives.
But the Hickory Ridge landfill, which stopped accepting garbage three years ago, is getting a $5 million investment that will transform the 48-acre DeKalb County site into a solar energy farm expected to generate enough electricity to power 224 homes.
The project, announced Tuesday in a ribbon cutting ceremony, creates what state officials call one of Georgia’s largest solar projects and puts the Peach State at the forefront of green technology.
The electricty generated would be sold to utility companies such as Georgia Power Co.
Visible from planes flying overhead in and out of Hartsfield-Jackson International Airport, the project is the world’s largest landfill solar energy cap, officials said.
“I’m confident this will be the standard not only for Georgia, but also for the nation,” Lt. Gov. Casey Cagle said.
The landfill, which is operated by Republic Services Inc., in the DeKalb County hamlet of Conley, began winding down waste collection in 2008, said Tony Walker, a Republic engineering manager.
The landfill was at capacity, so rather than let it stand as a closed facility, the company sought ways to reuse the site in some way.
The result: A partnership with Carlisle Energy Services, developer of a flexible, solar cover that stretches 45 acres. It includes roughly 7,000 solar panels that alone are 10 acres.
The green, tarp-like material is similar to what’s used in roof building materials and is designed to withstand temperature extremes, Walker said.
It has an expected lifetime of 25 years.
With the landfill closed to new deposits of garbage, Republic Services is required by law to monitor the facility for 30 years.
Walker said the solar tarp-like membrane will cut those maintenance costs because it will keep rainwater out, gases that form from the decomposing wastes in and produces energy that could be used to power some onsite operations.
Though the project cost about $5 million, about $2 million of that came through the Georgia Environmental Finance Authority, via federal stimulus funds.
GEFA, which funds energy projects throughout the state and maintains Georgia-owned fuel storage tanks, received $82.5 million in federal stimulus money through the American Recovery and Reinvestment Act.
“It’s exciting to see the concepts of conservation and effective resource management be put into action by this project,” said Mark Williams, commissioner of the Georgia Department of Natural Resources.
He said he hoped the project would serve as an example to “the rest of the nation of what Georgia is doing to be good stewards of our natural resources.”
Solar projects have been key topics of discussion since the collapse of Solyndra Corp. a start-up solar energy panel manufacturer that was highly touted as an example of President Barack Obama’s renewable energy program.
But the company, which received $528 million in federal loan guarantees, is now in bankruptcy court.
Georgia officials were quick to note there are major differences between the two projects.
For, one, Republic Services, which was founded in 1989, ranks 296 on the Fortune 500 list of biggest U.S. companies and has assets of $19.4 billion.
“We did our research, we looked at the financials, looked at how strong the companies were and the value of the project to determine that this would be a great project for stimulus funds,” Kevin Clark GEFA’s executive director, told East Atlanta Patch.
GEMA only paid for its portion of the work as the project progressed and only when it met department satisfaction, he said.
Another key difference is the money given was a grant, not a loan guarantee, Clark said.
Still, the department saw little risk in funding the project.
“This, to us, was not a risky proposition at all” Clark said. “There was very little risk of anything going south or defaulting, given the nature of the two companies.”
If this works out, great. But something tells me there will an 'unintended consequence' in the works. If the tarp catches fire, look out Conley Georgia and SE ATL!
Thursday, September 22, 2011
Tragedy Troy
Well, the State of Georgia just put a scumbag down. Personally, I think this was a mistake. Not because I think Troy Davis was 'innocent', but because I have changed my mind on the Death Penalty. Brian Nichols was on video killing people in the Fulton County Courthouse and he got life in prison. Troy Davis should have got the same.
So between the Amnesty Hippies and the "Fire Up Sparky" crowd, lets take a look at the actual case:
Problems for the prosecution:
1) A big problem for the prosecution was the fact that evidence from a search of Davis's mother's home was thrown out as the police were unable to prove that they acted with probable cause (no warrant). This evidence involved a pair of shorts found in a dryer in the home, as well as anything else.
2) Some have claimed that there was "no" physical evidence. This is not the case.Shell casings recovered at the scene matched the casings recovered from a previous shooting earlier in the evening to which Davis was present for.
3) Proving motive. During testimony at trial a family neighbor Jeffrey Sapp testified that Davis had confessed to the shooting to him. Kevin McQueen a fellow inmate Testified that he had also confessed to him. Stating that he had shot MacPhail for fear of the officer connecting him to the shooting earlier in the evening
4) Additionally based on crime scene reconstruction and testimony at trial, Officer MacPhail upon coming to the aid of Larry Young ran past Sylvester Cole, One could conclude that Davis the only one of those two with a motive to shoot MacPhail. Some of wondered if Coles shot MacPhail? However, the question remains why would he have done that?
5) Sylvester Coles himself was a problem for prosecutors. He admitted at trial that he too owned a .38 caliber, but had given it to another man earlier in the evening. That is a big, big problem for the prosecutors case. Where is the gun?
If one were to argue there is questionable evidence that Davis is guilty, there is even less that Coles is.
Problems with Davis's defense:
The issues with Davis's defense were plenty.
1) Davis's trial for killing the officer was clumped in together with being charged with shooting Cooper and the beating of Larry Young. His defense atty should have objected, as the other alleged crimes would taint the jury against Davis effectively making it look like 1 crime. .
2) Davis fingered for being at the scene of two shootings/three crimes on the same night. The shell casings from both shootings matched. They came from the same .38 caliber. Common denominator: Troy Davis.
3) Davis was also at the scene of the beating of Larry Young, the homeless man in the parking lot the night of MacPhail's death and the person he was trying to assist.
4) Taking off for Atlanta the same night as the shootings. So it is just a coincidence that he flees to Atlanta the same night of the two shootings. Atlanta is a 4 hour ride from Cloverdale (where Davis is from) some 248 miles. If you didn't do anything or weren't involved at all where are you going?
5) The fact that the cop was shot twice implies intent to kill. This isn't a case of a gun mistakenly going off in a struggle. This goes back to the prosecution's argument for motive. Whoever shot MacPhail wanted to be sure he was dead. These things matter to a jury.
6) For the Davis defense and this applies mostly to the appeal process. How reliable are the reenactments of the previous prosecution witnesses? Were they lying then, now or have memories simply faded.
7) How much does their change of testimony reflect the pending execution and how much of it reflects them actually telling the truth "this time". An 80% reenactment rate is rather incredulous. Either there was some massive conspiracy involving cops, neighbors, friends and inmates to convict him or memories are really bad.
8) Some argue that some witnesses were intimidated my police, as some witnesses later stated. However, what about the neighbor Jeffrey Sapp or Kevin McQueen? Why would they lie about a confession? What about the other 20% who stuck by their testimony.
The Verdict:
This focus on this case by people and the media is about the death penalty and that alone. I see signs that say "Free Troy Davis". Even if his execution was commuted he would not be set free.
Even at trial, if the jury had come back without a conviction they would have said "not guilty", not "innocent".
Given the preponderance of albeit circumstantial evidence, I suspect he is guilty.
I suspect that upon realizing Davis would be executed people recanted testimony not because they had lied before, but to keep him from being executed.
Would I commute the execution? Probably, since there are some unknowns. Davis made a choice to shoot MacPhail the second time, which is what seals it for me. However, it just isn't as air tight as I might like for death penalty case, but I do think he is guilty of the crime just the same.
That being said, Troy Davis is not innocent.
Source(s):
http://en.wikipedia.org/wiki/Troy_Davis_case#Shootings_and_arrest
http://legalcases.info/troydavis/
http://news.yahoo.com/blogs/lookout/troy-davis-executed-parole-board-denies-clemency-131916604.html
http://www.ajc.com/metro/content/opinion/stories/2008/10/21/lawtoned_1021.html?cxntlid=inform_sr
Edited 2 days ago Report Abuse
Wednesday, September 14, 2011
'Fair Taxation'
Here is a novel idea on 'fair taxation'...First all taxes have to be repealed and replaced by a single fee on transactions in US dollars.
My rate is .49%, so a dollar is tax-free. A penny on a two. Two on five, nickel on ten, dime on twenty, quarter on fifty, Kennedy half on a Bennie.
For every single time that some amount, counted in USD that trades hands (excluding CASH) has a fee that goes to support the monetary system.
If it was the worst idea in the world and the economy tanked by 50%, it would still bring in $10 Trillion in revenue.
Imagine ten of them. Our GNP is only $15 Trillion. No magic at all.
Except in breaking the spell of the way it has always been and everyone thought or were taught.
That's enough to send every citizen a check for $1200 a month.
Fund government at all levels at current budgets.
And still run trillions in surplus that would pay the debt off in a decade.
The mystification comes when people understand millions versus billions versus trillions versus quadrillions, which is what we have to use to count all the money changing hands in USD every year.
But most of it is the big players. Those who use the monetary infrastructure at the greatest scale, pay the most tax. Totally voluntary in that if you don't want to pay the tax, don't make the purchase.
Once the national debt is paid, we could cut the rate by half.
I keep the challenge open for anyone to prove my math wrong on this.
It is the only fair tax, because it doesn't discriminate against any class of transaction, nor does it give special treatment to any particular activity or purchase or investment. If you think it's what you want to do is use USDollars to transact some business, that costs half a percent fee to fund the system (and the government, too, incidentally).
You are paying into the income fund, which kicks out a base income for every man woman and child for the sole reason that they are beautiful human beings that are alive and among us on this planet.
Everyone gets a base wage no matter how worthless and lazy and self-destructive they may be. People who were only working to freaking pay for a place to stay while they worked on their masterpieces no longer are taking that job from someone who really wants one.
We do away with the minimum wage, and instead install a regime that simply pays poverty off. Cheaper than fighting crime, hunger, disease, urban decay and the whole nine.
And to make it fair, everyone gets it.
What would people do? You think some of them might go spend that money into the economy for things they want and need? Does that seem like a good stimulus package? Do you think that would help unemployment?
It is this sort of setup that scares the powers that be to their core. Because now wages are going to have to rise in a lot of cases because half the underpaid workforce just quit to just live on their check.
The rest are much happier, because they are no longer really all that afraid of losing their job. If they do, they at least know they'll have their citizen's dividend coming in every month. And lots of places are hiring in this environment.
The only inflation that I have found to be virtuous is the inflation that occurs when wages are rising.
Maybe they wouldn't rise. When the sum total of taxes that it costs to employ someone is .49%, then wages have room in current budgets to rise, or like the fair tax is talking about, giving the employer the discretion as to how to allocate that massive tax cut.
The industries hit the hardest by this alternative taxation method is those who move the most money.
But here's the sneaky thing. When I go buy a loaf of bread and pay my penny tax, just like sales tax, it was never the grocery store's money to begin with. They end up spending that penny when they make a deposit. When they pay the bakery who baked the bread, they have to pay that penny to that company. Maybe the bakery accepts an electronic transfer to the bank it uses that is in Oklahoma. The bank transfers that money, consolidated with other pennies paid in bread transactions to the baker's bank on an interbank transfer network.
This is where taxes are collected. There are very few of these networks, and they move a ton of money. One of those entities, incidentally, is the federal reserve, because they still have the check clearing framework. This is where the pennies are siphoned off to the treasury, to pay our dividend.
And it is the data from those networks that I use to make my calculations. The Bank of International Settlements publishes some very rough estimates of the volumes and values of transactions that occur over various digital networks.
The DTCC processes most securities, like stocks and bonds and foreign exchange transactions, over a quadrillion dollars worth a year. Their current fee for this service is like .0015% per transaction. Now it would be the never unpaid .49% plus their fee, with the treasury receiving the .49%.
Large interbank transfers are on the fed, or SWIFT. Very few entities handle nearly all the money at some point in time. Other entities could register an account with the treasury and set up a business running a payment network of some sort that used USD.
The volumes of dollars that these primary fat money pipes do every day is astounding. If Congress directed those entities to collect a .49% fee on every transaction, they could repeal all the other taxes and have more money in the treasury than they could possibly imagine.
We keep the federal reserve, but remove its power as the national debt enabler. Implement a 100% reserve requirement for all new lending. Those who want to earn a return on their money may invest in their bank's lending program. The current hegemony of pushing reserves up the pyramid is done. The reserves are held by the lending bank. They may no longer lend money they do not have (creating it out of thin air like they do now). The Fed no longer sets interest rates, because your local bank can do that.
The states could piggyback the same system and eliminate all their own taxes, pulling any funding that would normally come from the federal level before the fee hits the national treasury.
I have no idea whether I get anywhere with all this, because it seems a bit too good to be true. I can't say what all the various things the economy might do once the distortions of the current tax regime are no longer relevant.
There are a lot of transactions that are currently untaxed. Those are mainly in the financial sector. I couldn't think of a better bunch of bastards to dump a tiny little tax on than those folks. They would scream bloody murder and pull out all the stops on the propaganda channels and politicians they own. But they are sorely outnumbered, and after all, it's the fairest tax ever devised, only in recent times technologically possible, and nullifying the control-freak, social engineering weapon of tyranny that taxation has become.
Thursday, August 25, 2011
another HBO Doc in the Box
http://www.crainsnewyork.com/article/20100909/REAL_ESTATE/100909881
Once again HBO Documentary Films has created another suspect tear-jerker, 'No Contract No Cookies', which, if you have HBO is in the 'on demand' section. I encourage everyone to watch it.
The film chronicles the year long strike and culmination of the Stella D'oro Cookie Company. Here is How HBO describes the 'synopsis':
http://www.hbo.com/documentaries/no-contract-no-cookies-the-stella-doro-strike/index.html#/documentaries/no-contract-no-cookies-the-stella-doro-strike/synopsis.html
And here is the accompanying whine bar retort from our Tin Foil Friends at Huffpo:
"The new HBO documentary, No Contract No Cookies: The Stella D'Oro Strike, premiering on HBO2 tonight at 8pm, tells the story of a beloved Bronx bakery, founded by Italian immigrants in 1932, that now lies shuttered, like so many factories all over America. The saga of how the company went from a thriving family-owned enterprise to a gutted equity fund acquisition is a success story only if you're rooting for our modern day robber barons. For the dwindling middle class and the unwashed masses, it's an American tragedy that's being repeated all over the country.
No Contract No Cookies puts a poignant face -- or 138 faces, to be precise -- on the massacre of manufacturing jobs that CEOs routinely commit in the name of prosperity. At the Stella D'Oro factory, folks from 22 different countries worked convivially alongside New York natives and gained a foothold in the American middle class, only to be kicked off the ladder when Brynwood Partners, a private equity fund, bought the company. In 2008, when the workers' contract expired, Brynwood demanded a 30% pay cut."
Ahh, yes. The storyline defines itself: picture the nameless, faceless, evil corporate overlord raider known as Brynwood Partners, or as I will refer to them BP.
The bakery was founded in 1932 and the immigrant family that owned the factory sold it to Kraft Foods in 2002( CHA CHING!) . After 4 years, Kraft food sells it to BP. BP operates it from 2006-until fall 2008 ( when the econimy went in the sh*tter ) and goes and tells the Union bosses in the Bronx "hey, we need to cut costs. Were taking it in the pants. Help us out here. Were paying 18$-22$ an hour for unskilled labor with 9 weeks paid leave! Lets back that down for 5 years until we get out of this slump. Is that reasonable?'
The Union Bosses say 'Say What? Your talking going from 18$ and hour to 13-14$? And less paid leave?! Hells to the No. Why dont you show me your books so we can see how much a 'jam' you are in ,and then we will talk'.
Show me your books, please. Where have I heard that one before?
So at this point, the strike in on. Now your the Union Boss: your job is to look out for the laborers. I get it.
And I also see BP's dilemna. They were already not showing 'good enough profits' and with the strike they werent making any more. The scabs could not produce what the Union Laborers could do. So now the brand and the bottom line is starting to feel it. And c'mon. 9 weeks paid vacation and 23-24$ an hour? Its UNSKILLED LABOR that can be performed by those without a significant grasp of the English language, as per it's founder. I know, it's the Bronx, but that is an incredibly sweet deal!! Right? What to do?
Well, the way HBO and the director Jon Alpert look at it: BP is out to 'screw' the laborers. And they do this with heartfelt imagery, of the immgrant founder to the 130 odd non native born workers. The Greek mechanic that dines with the Vietnamese machinist ponders his life here and curses the picket crossers.
And the music swells, the juxtapositioning of stills and people tearfully leaving thier job for good should be a harbinger for industry in the Northeast. After a long, long strike the laborers agree to the 'deal'. BUt in that time, the company's worth and projected profit had taken a nose dive. So, BP sells out to King Cracker: Lance Corporation from good ol' North Cackalacky.
Lance then decides to repay the striking workers by shuttering the damn thing, sending up trucks to get thier equipment out of there, loading up and moving to Ashland Ohio, where there is no Union.
Now, since the doc has come out the Union won a decision against BP that it had 'negotiated in bad faith' and will probably get a couple million dollar settlement. Thats going to mean alot of Union Atnny fee's and Union recompense so in the end the workers that went on strike will get paid what they would have made had they not gone on strike for a year or so. But the 'job' is long gone. The factory that had been an integral part of the Bronx is now empty, and a nice new facility in Ohio is employing slightly less. And still putting out those Swiss Fudge cookies that the Orthodox Jews up there die for, they arent made with butter or milk.
The interesting thing to me is how the documentary filmmaker declines to show the ugly side of the Union that helped bring on the factories demise. It really is glaringly obvious to the naked eye. No follow up on the 'new non union' employees in Ashland Ohio, only focusing on the mostly immigrant class that ends up losing thier 'bread and butter', so to say. To be sure BP is not guilt free here, but they are made to look quite Darth Vader-ish.
Watch the doc and read the signs:
'Boro Jobs Before Profits'?! For real?
'My Job is my Right'? Your WHAT?!
'Taxpayers and Workers OWN Stella D'oro'. Okay stop right there.
How would you deal with these idiots? I would do exactly what they did. Close up and move to where the employees arent that 'special'.
How how did it all work out?
So what has happened to the people in the documentary?
Some found other work, and some are on the dole. In an interview the director said about 35% of the workers were still employed. The rest retired, or went on assistance.
Lance is now making the cookies, just not in the Bronx anymore. As long as they turn a profit, they will be around for years to come.
The Union bosses still got paid thier high salary, and the lawyers made thie hours, the original owner made $$ and sold it, BP broke even and sold it, and Lance Crackers now runs it.
The only losers here were obvious to see.
Sunday, August 14, 2011
this parade of fools
Pawlenty: Puh-lenty of crap. Out of the race.
Herman Cain: his answer to the Iran problem proved he is only capable as a cabinet
level position. If he honestly thinks we can defeat the shieks and militants by energy independance, he is mistaken. Time is against us. We do not have the infrastructure nor the political will to pull it off. Sorry, Cain your not Able.
Huntsman: who-man? Do we really need another holy underwear crusader in the mix? Good grief. We need to run screaming from the religious crazies like they were on fire.
Bachmann: which brings us to her. Her husband's 'wide stance' and her Palin-esque non mastery of simple history and facts will bury her. If this is the best the Tea Party (tm) can come up with, give it back to the British!
Newt Gingrinch : Newt? Not. A Prayer. Need I go on?
Rick Santorum: You know, he's not that bad fiscally, but he is another bible thumper. His views on same sex marriage dont jive with me. I'm just not that concerned about the 'state of marriage', and even if I was, I doubt I would want this guy as it's Representative. So, that leaves......
Rick Perry: Honestly, I dont know much about him. My first impression is he is Bush-like, even though there is no love lost between them.If I have to choose a Texan then I guess I go for...
Ron Paul. Well, I'be been one of those 'Paul-tards' a 'Ron-Bot' and I admit I have bias. He EASILY wontthe debate and came in 2nd in the straw poll. Best of the litter.
Dishonorable mention: Trump and Palin. Enough already!
Honorable Mention: Gary Johnson. He is getting 'Ron Paul Screwed' this time. He should be heard, but it is his time in the barrel.
That's my 2 cents.
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