January 2010 Archives
The entire U.S. economy produced $14 trillion in goods and services in 2009.
So, the $150 billion banks plan to hand out as bonuses is more than 1% of U.S. GDP! That’s bonuses, not including salaries or benefits! More than a penny of everything you spent last year is being handed out as bonuses for bankers.
Meanwhile, our fifty state governments are facing their greatest financial crisis ever, and some states could declare bankruptcy. The combined 50-state budget deficit for 2010 is estimated at $180 billion.
How can we allow the industry that created the Great Recession to profit so richly while ordinary Americans lose their jobs, small businesses fail because they can’t borrow (and ordinary Americans can’t spend), and states and towns lay off teachers by the tens of thousands?
Posted by James on Jan 26, 2010
[A]n exclusive analysis created for Raw Story by the [nonprofit, nonpartisan] Center for Responsive Politics shows that President Obama received a staggering $20,175,303 from the healthcare industry during the 2008 election cycle, nearly three times the amount of his presidential rival John McCain.
$20 million helped Obama buy the White House. The same Obama who said in 2003:
I happen to be a proponent of a single payer universal health care program…I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its Gross National Product on health care cannot provide basic health insurance to everybody.
$20 million bought insurance companies, drug companies and hospitals hundreds of billions — perhaps over a trillion dollars — in future profits… out of ordinary Americans' (and our employers') pockets. That’s an amazing rate of return.
Buying influence in Washington, DC must be one of the best business moves a big business can make. Too bad individuals and small businesses can’t afford the table stakes.
Posted by James on Jan 13, 2010
Roger Lowenstein’s article “Walk Away From Your Mortgage!” nails the hypocrisy of bankers — including Mortgage Bankers Association president John Courson and former Goldman CEO & Treasury Secretary Henry “Hank” Paulson — and the banking industry’s man in the Oval Office — Barack Obama — lecturing homeowners not to walk away from homes worth less than their remaining mortgages:
Businesses — in particular Wall Street banks — make such calculations routinely. Morgan Stanley recently decided to stop making payments on five San Francisco office buildings. A Morgan Stanley fund purchased the buildings at the height of the boom, and their value has plunged. Nobody has said Morgan Stanley is immoral — perhaps because no one assumed it was moral to begin with. But the average American, as if sprung from some Franklinesque mythology, is supposed to honor his debts, or so says the mortgage industry as well as government officials….
[D]efault (supposedly) debases the character of the borrower. Once, perhaps, when bankers held onto mortgages for 30 years, they occupied a moral high ground. These days, lenders typically unload mortgages within days (or minutes). And not just in mortgage finance, but in virtually every realm of our transaction-obsessed society, the message is that enduring relationships count for less than the value put on assets for sale.
Think of private-equity firms that close a factory — essentially deciding that the company is worth more dead than alive. Or the New York Yankees and their World Series M.V.P. Hideki Matsui, who parted company as soon as the cheering stopped. Or money-losing hedge-fund managers: rather than try to earn back their investors’ lost capital, they start new funds so they can rake in fresh incentives. Sam Zell, a billionaire, let the Tribune Company, which he had previously acquired, file for bankruptcy. Indeed, the owners of any company that defaults on bonds and chooses to let the company fail rather than invest more capital in it are practicing “strategic default.” Banks signal their complicity with this ethos when they send new credit cards to people who failed to stay current on old ones.
Mortgage holders do sign a promissory note, which is a promise to pay. But the contract explicitly details the penalty for nonpayment — surrender of the property. The borrower isn’t escaping the consequences; he is suffering them.
Posted by James on Jan 07, 2010
It’s not clear whether the 34+ companies attacked by Chinese hackers were attacked by the “automated espionage system based in China” that Canadian researchers found. Regardless, it’s clear Chinese hacking is pretty sophisticated:
Google’s description of the attacks closely matches a vast surveillance system called Ghostnet that was reported in March by a group of Canadian researchers based at the Munk Center for International Studies at the University of Toronto. They found that an automated espionage system based in China was using targeted e-mail messages to compromise thousands of computers in hundreds of governmental organizations. In each case, after the computers were controlled by the attackers, they were able to scan for documents that were then stolen and transferred to a digital storage facility in China.
Posted by James on Jan 14, 2010
How gullible must America’s bankers think we are to say these things with straight faces?
Jamie Dimon of JPMorgan Chase declared that a financial crisis is something that “happens every five to seven years. We shouldn’t be surprised.” In short, stuff happens, and that’s just part of life….
Goldman Sachs’s Lloyd Blankfein… compared the financial crisis to a hurricane nobody could have predicted.
Obviously, megabank CEOs know their banks took huge risks, lost and received tens of trillions in taxpayer bailouts… tens of billions of which they immediately turned around and handed to their employees. Now they’re pretending the economy crashed down on them, rather than the other way around.
My 3-year-old wouldn’t try that bald-faced a lie!
Posted by James on Jan 15, 2010
“Right, as the world goes, is only in question between equals in power, while the strong do what they can and the weak suffer what they must.” — Thucydides
I thought of this quotation while reading about another Swiss private banker, Rudolf M. Elmer, who has come forward to reveal how Swiss banks have long helped wealthy clients avoid paying taxes:
Mr. Elmer, who ran the Caribbean operations of the Swiss bank Julius Baer for eight years… continues to disclose the inner workings of Julius Baer — one of many Swiss institutions that investigators say help clients evade billions of dollars in taxes by routing money through offshore havens in the Caribbean and Switzerland.
“It is a global problem, and I am only the messenger who provides the bad news, or even better, the truth,” Mr. Elmer, 54, wrote in a recent e-mail message. “Offshore tax evasion is the biggest theft among societies and neighbor states in this world.”
Mr. Elmer contends that his documents detail the undisclosed role of American investment management companies in funneling American, European and South American clients who wished to avoid taxes to Julius Baer; the backdating of documents to establish trusts and foundations used to evade taxes; and the funneling of trades for hedge funds and private equity firms from high-tax jurisdictions through Baer entities in the Cayman Islands.
Posted by James on Jan 19, 2010
Because President Obama requested and received from Congress an economic stimulus insufficient to America’s needs (as I argued a year ago on this blog), ordinary Americans continue losing their jobs and homes. So Obama and his (supposedly) brilliant economic/financial advisors must now — having seen their mistake — be preparing another stimulus request, right?
Insanely, they’re now proposing the opposite! President Obama is now declaring a three-year spending freeze (i.e., spending cut, after inflation) during the Great Recession on most everything except
welfare for military contractors “defense” spending and security theater “homeland” security:
Any sane economist will tell you government spending is necessary to pull an economy suffering from insufficient demand out of the ditch. Instead, Obama’s embracing Hoover’s failed strategy of cutting government spending. Didn’t work then; won’t work now.
This comes on the heels of President Obama’s hot air about getting tough on banks — something he has quite intentionally failed to do so far, even while giving banks everything they could have wanted… and far more.
The only good thing to come out of Hooverism was FDR. But no true progressive/liberal can win the presidency in 2012, given the overwhelming financing and publicity advantages corporations and the corporate media provide right-wing and “centrist” candidates. Instead, the poor will most likely bear the brunt of Obama’s budget freeze because the poor lobby (if they have one) isn’t quite as powerful in D.C. as the telecom lobby or the bank lobby or the pharmaceutical lobby.
Posted by James on Jan 26, 2010
Bob Herbert says good bye to the people’s historian:
I had lunch with Howard Zinn just a few weeks ago, and I’ve seldom had more fun while talking about so many matters that were unreservedly unpleasant: the sorry state of government and politics in the U.S., the tragic futility of our escalation in Afghanistan, the plight of working people in an economy rigged to benefit the rich and powerful…
I always wondered why Howard Zinn was considered a radical. (He called himself a radical.) He was an unbelievably decent man who felt obliged to challenge injustice and unfairness wherever he found it. What was so radical about believing that workers should get a fair shake on the job, that corporations have too much power over our lives and much too much influence with the government, that wars are so murderously destructive that alternatives to warfare should be found, that blacks and other racial and ethnic minorities should have the same rights as whites, that the interests of powerful political leaders and corporate elites are not the same as those of ordinary people who are struggling from week to week to make ends meet?
Mr. Zinn was often taken to task for peeling back the rosy veneer of much of American history to reveal sordid realities that had remained hidden for too long. When writing about Andrew Jackson in his most famous book, “A People’s History of the United States,” published in 1980, Mr. Zinn said: “If you look through high school textbooks and elementary school textbooks in American history, you will find Jackson the frontiersman, soldier, democrat, man of the people — not Jackson the slaveholder, land speculator, executioner of dissident soldiers, exterminator of Indians.”
…That he was considered radical says way more about this society than it does about him.
Posted by James on Jan 30, 2010
Even a Bloomberg columnist is outraged:
[W]hen unelected and unaccountable agencies pick banking winners while trying to end-run Congress, even as taxpayers are forced to lend, spend and guarantee about $8 trillion to prop up the financial system, our collective blood should boil.
The rest of David Reilly’s article focuses on the puny (relative to trillions of dollars the Fed has shoveled to banks) $30 billion the New York Fed spent to pay 100 cents on the dollar to AIG’s counterparties — even though those contracts would have been worth pennies on the dollar if public money hadn’t paid off bankrupt AIG’s
gambling trading debts — and the muscle the New York Fed successfully applied to the SEC and even AIG itself to force them not to disclose the 100% payoffs and which banks (including Goldman Sachs) received them.
If it seems the Federal Reserve Bank of New York worked to help banks, rather than Americans, and to keep its actions totally secret, that’s because it’s true:
[T]he New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests…
As Representative Marcy Kaptur told Geithner at the hearing: “A lot of people think that the president of the New York Fed works for the U.S. government. But in fact you work for the private banks that elected you.” And yet the New York Fed played an integral role in the government’s bailout of banks, often receiving surprisingly free rein to act as it saw fit…
New York Fed staff and outside lawyers from Davis Polk & Wardell edited AIG communications to investors and intervened with the Securities and Exchange Commission to shield details about the buyout transactions, according to a report by Issa.
That the New York Fed, a quasi-governmental body, was able to push around the SEC, an executive-branch agency, deserves a congressional hearing all by itself.
Later, when it became clear information would be disclosed, New York Fed legal group staffer James Bergin e-mailed colleagues saying: “I have to think this train is probably going to leave the station soon and we need to focus our efforts on explaining the story as best we can. There were too many people involved in the deals — too many counterparties, too many lawyers and advisors, too many people from AIG — to keep a determined Congress from the information.”
Posted by James on Jan 30, 2010
A book review of “Reading in the Brain” (authored by French cognitive scientist Stanislas Dehaene) gives a very good illustration of our brains' partial plasticity:
[Dehaene] argues that the primate brain has evolved to treat symmetrical shapes, like the letter pairs p and q, or b and d, as if they were the same. This explains why children, and dyslexics, have so much trouble distinguishing these letters. It also explains our extraordinary ability to “mirror-read” and “mirror-write.” Many children spontaneously reverse not just single letters but whole paragraphs of text.
But if reading is so tightly constrained by innate brain structure, we’d expect that we would simply never use letters like b and d at all. Instead, Dehaene shows how the reading brain has developed a new ability to discriminate these symmetries, even at the neural level. A developing brain that is exposed to symmetrical letters with different meanings will rewire and overcome its natural symmetry-blindness.
I highly recommend to anyone interested in brain plasticity The Brain That Changes Itself, which shows how the longstanding neurological theory of “localization” and fixed brain structures has been overturned — or, at least, highly qualified — by fascinating research proving that our brains evolve and restructure themselves continually, in response to everything we do and see and hear.
Plasticity enables cultural evolution, which gives us real hope that we can make our world a better place, as the book review suggests:
We are born with a highly structured brain. But those brains are also transformed by our experiences, especially our early experiences. More than any other animal, we humans constantly reshape our environment. We also have an exceptionally long childhood and especially plastic young brains. Each new generation of children grows up in the new environment its parents have created, and each generation of brains becomes wired in a different way. The human mind can change radically in just a few generations.
Posted by James on Jan 04, 2010
Days after reports of widespread Chinese hacking into dozens of Silicon Valley tech firms — most notably Google — The New York Times reports widespread hacking of Chinese dissidents' email accounts:
Both inside China and overseas, the number of people stepping forward to report accounts of hacking, both suspected and successful, continued to rise. Zeng Jinyan, the wife of the imprisoned rights defender Hu Jia, said on her blog that shadow copies of recent e-mails she had sent had automatically been sent to an address she did not recognize.
Teng Biao, a civil rights lawyer, discovered the same thing. In an interview, he said copies had been sent to a Gmail address just two characters different from his own.
Tenzin Seldon, a Tibetan activist and a student at Stanford University in California, said Google had examined her laptop and confirmed that hackers had gained access to her Gmail account.
And in Washington, Nury A. Turkel, a lawyer who advocates for China’s Uighur minority, said he was certain someone had hacked into his Gmail account because text he had used in a message ended up in the body of an e-mail message that he said was harboring a virus.
Among those who say they were victimized was Gregory Fayer, a lawyer who represents a California software maker suing the Chinese government over claims of piracy. He said more than a dozen employees at the firm had received e-mail messages Monday purporting to come from their managing partner.
Investigators, he said, later determined the messages were so-called Trojan horse attacks intended to breach computers and allow the infiltrators to remotely remove files. “We have no idea who is sending these, but they’re very sophisticated,” said Mr. Fayer, whose client, Cybersitter, filed a $2.2 billion suit last week. “People feel violated.”
Large-scale state-sponsored hacking — for political purposes, no less — is seriously damaging China’s reputation. Does anyone in China’s government know anything about “soft power” (power arising from moral, intellectual and cultural persuasion)? It seems they recognize only “hard power” (authority, threat, force, compulsion and punishment). A global superpower — which China aspires to become — that ignores soft power will encounter severe pushback, both domestically and internationally. But hard power is all China’s monopolistic, one-party system knows. China’s government has, predictably, taken a hard-line stand against Google’s appeal for less censorship and an end to state-sponsored hacking:
[State Council information director Wang Chen] urged Internet companies to increase scrutiny of news or information that might threaten national stability and stressed the importance of “guiding” online public opinion.
Web sites in China are required to employ people who monitor and delete objectionable content; tens of thousands of others are paid to “guide” bulletin board Web exchanges in the government’s favor.
Posted by James on Jan 14, 2010
The Financial Times reports “China scientists lead world in research growth”:
Jonathan Adams, research evaluation director at Thomson Reuters, said China’s “awe-inspiring” growth had put it in second place to the US – and if it continues on its trajectory it will be the largest producer of scientific knowledge by 2020…
China far outperformed every other nation, with a 64-fold increase in peer-reviewed scientific papers since 1981, with particular strength in chemistry and materials science.
“China is out on its own, far ahead of the pack,” said James Wilsdon, science policy director at the Royal Society in London…
Although its quality remains mixed, Chinese research has also become more collaborative, with almost 9 per cent of papers originating in China having at least one US-based co-author…
Although the statistics measure papers in peer-reviewed journals that pass a threshold of respectability, “the quality [in China] is still rather mixed,” says Jonathan Adams, research evaluation director at Thomson Reuters. But it is improving, he adds: “They have some pretty good incentives to produce higher quality research in future.”
Posted by James on Jan 26, 2010
As if to prove my argument that the Chinese government knows only “hard power” and is tone deaf to “soft power,” we learn today that a Chinese civil rights lawyer “went missing” while in Chinese government custody:
Nearly a year after he was seized by the authorities, the only news of one of China’s most tenacious civil rights lawyers has been that he “went missing” after his detention, friends and relatives said Friday.
They say they have not seen or heard from the lawyer, Gao Zhisheng, a Nobel Peace Prize nominee, since he was taken from his home in February.
…the Beijing Public Security Bureau requested that questions be faxed, then declined to comment…
Human rights advocates say the disappearance of Mr. Gao is particularly worrisome, given the mistreatment he said he had endured during a previous incarceration. In a letter he published after his release several years ago, he said he had confessed to sedition charges only after more than a month of torture that included jabs with an electric baton and the piercing of his genitals with toothpicks. At the time, he said, his torturers told him he would be killed if he spoke publicly about his treatment in detention.
Posted by James on Jan 16, 2010
Some people use (legal) drugs to improve their health. Some use (illegal) drugs to induce an artificial psychological high.
Wise people get even greater health and psychological benefits — at no cost — by exercising regularly.
Today’s Wall Street Journal has a wonderful article describing regular exercise’s many health benefits:
- 50% reduction in sick days taken
- Effective prevention/treatment for many cases of depression
- 40% reduction in Alzheimer’s risk
- 25% reduction in chance of getting breast cancer
- 50% reduction in recurrent breast cancer risk
- 60% reduction in colon cancer risk
- 27% reduction in stroke risk
- 40% reduction in high blood pressure incidence
- “Regular exercise has been shown to combat the ongoing damage done to cells, tissues and organs that underlies many chronic conditions… [and] reduce bad cholesterol, and cut the incidence of Type 2 diabetes”
- “Physical activity has an anti-aging effect at the cellular level, suggesting exercise could prevent aging of the cardiovascular system”
- “During exercise, two types of immune cells circulate more freely in the blood, neutralizing pathogens. Although the immune system returns to normal within three hours, the effect of the exercise is cumulative, adding up over time to reduce illness rates, he says. He compares the process to ‘a cleaner who comes in for an hour a day, so by the end of a month, your house looks much better.’”
You need not run a marathon to benefit. In fact, exercising too hard and too long can hurt — rather than help — your immune system. The sweet spot for maximal health benefit is moderate exercise of 30+ minutes at least four days a week.
So why are you sitting there reading this? Stand up and go for a walk or a jog! And then do it again four or five times a week, please.
Posted by James on Jan 05, 2010
Since agreeing to Chinese government censorship requests in 2006, Google has become increasingly frustrated with government-imposed censorship. And, recently, Google became enraged by a “highly sophisticated and targeted attack” on its computers, almost certainly launched by the Chinese government itself because the apparent target was the private Gmail accounts of Chinese dissidents and the attacks originated from government computers in China:
“Two independent, anonymous iDefense sources in the defence contracting and intelligence consulting community confirmed that both the source IPs and drop server of the attack correspond to a single foreign entity consisting either of agents of the Chinese state or proxies thereof,” said an iDefense statement.
In the wake of Google’s remarkable threat to withdraw from China, many informative articles on Chinese government interference with business are being published. These articles make clear that more foreign businesses are on the verge of revolt. It’s remarkable so many companies are so angry, given how large and important China’s economy has become and how quickly it’s expanding. But that’s proof of how infurating Chinese government (a.k.a. Chinese Communist Party) interference with the “free” market has become:
“A less welcoming attitude is alienating big business, which has been the greatest natural ally of the Communist party in the past,” said one western official who works closely with foreign companies in China.
“Previously, when politicians in the west wanted to criticise China for its human rights abuses or other issues, multinationals would quietly lobby governments not to make a big fuss. But that appears to be changing.”
…In its latest position paper, released late last year, the EU Chamber observed that “operating conditions in the Chinese market have become increasingly challenging”. It noted that the most pressing concerns for European businesses included rising Chinese protectionism, lack of market access, lack of legal and political transparency and lax protection of intellectual property rights.
Beijing’s rejection last year of Coca-Cola’s bid for a Chinese juice-maker on anti-monopoly grounds and a “buy China” policy for government procurement were seen as examples of rising protectionism.
And in August multinationals were shocked by the arrest of Rio Tinto executives during sensitive iron ore price negotiations – a move that was widely perceived as a warning to foreign businesses operating in the country….
European delegates… [summarized] a 300-page report on the various problems facing European businesses operating in China but when they came to the end of their presentation, Mr Wang’s response was dismissive: “Whatever you tell me doesn’t really make a difference; you’re going to invest in China anyway.”
“Foreign Companies Resent China’s Rules ”:
China has long restricted the sale of foreign movies, books, songs and other media, and it continues to do so while appealing a World Trade Organization ruling in August that these policies violate China’s legally binding commitments to the international free trade system. More recently, China has sought to strengthen its domestic encryption industry — for which the government has easy access to all the decryption codes — while withholding the government certification that foreign-owned encryption companies in China need to sell their products to many users…
When China joined the W.T.O. in November 2001, it promised to negotiate as quickly as possible to join the W.T.O.’s side agreement requiring free trade in procurement. But it has never actually done so, leaving the Chinese government free to use its enormous buying power to steer contracts to Chinese-owned companies.
The National Development and Reform Commission, country’s top economic planning agency, ordered national, provincial and local government agencies on June 4 to buy only Chinese-made products as part of the country’s nearly $600 billion economic stimulus program; imports were only allowed when no suitable Chinese products were available.
China has also restricted exports of a long list of minerals for which it mines much of the world’s supply, like zinc for making galvanized steel and so-called rare earth elements for manufacturing hybrid gasoline-electric cars.
Those restrictions, from steep export tariffs to tonnage quotas and even export bans, have made it cheaper for many manufacturers to locate their factories in China so as to make sure they have a plentiful supply of raw materials free from export taxes.
“Google’s Threat Echoed Everywhere, Except China ”:
Google said the attacks took place last week and were directed at about 34 companies or entities, most of them in Silicon Valley in California, according to people with knowledge of Google’s investigation. The attackers may have penetrated elaborate computer security systems and obtained crucial corporate data and software source codes…
Adobe Systems, announced that it, too, had endured a cyberattack….
In the past year, Google has been increasingly constricted by the Chinese government. In June, after briefly blocking access nationwide to its main search engine and other services like Gmail, the government forced the company to disable a function that lets the search engine suggest terms. At the time, the government said it was simply seeking to remove pornographic material from the search engine results.
Some Google executives suggested then that the campaign was a concerted effort to stain the company’s image. Since its entry into China, the company has steadily lost market share to Baidu.
Nicholas Kristof offers an excellent guess about Google’s motivation:
I think that Google truly was nervous about the damage to its principles and credibility from its China policy, but it may also be that Google thinks that if it shows backbone and principles, it will be rewarded internationally in other ways. Image matters. And a company with an improved image does better recruiting staff and retaining them, and this move certainly makes Google stand out from other technology companies that have been largely caving to China. I’m glad Google is demonstrating that businesses can have a China policy more sophisticated than just a kowtow.
Sadly, Google’s stance remains the exception to the rule. China’s government has seen little to refute its apparent belief that it’s too important for businesses to ignore. China will continue exploiting its monopoly power — arising from its size — for domestic political and economic gain unless and until more businesses prove willing to vote with their feet.
Posted by James on Jan 13, 2010
I’ve long been horrified by the apparently bleak prospects for a sustainable Earth. Even without climate change, humanity (and the planet we’re so rapidly despoiling) is hitting up harder against resource constraints as our population continues to rise, our planet’s endowment of natural resources (fish, oil, fresh water, trees, etc.) get used up, and our ability to extract resources to satisfy our our “needs” (i.e., appetite for “stuff”) expands with our technology and economic growth.
We’ve known for decades that global climate change threatens to exacerbate all our resource constraints (and empower the insects and viruses eager to feast on billions of delicious humans… Do we taste like chicken?). Yet, thanks to our species' greed and myopia, humanity’s response to this potentially cataclysmic threat has been pathetically slow.
In recent years, almost every piece of global climate change news has been bad. The crisis appears to be getting worse faster than even the most pessimistic Cassandras feared just a few years ago.
One exception is new thinking and new data calling into question the previous conclusion that global climate change has been increasing hurricane intensity. That research finding is now in doubt.
But today I read a piece (admittedly in The Daily Mail, so perhaps it’s just corporate talking points) that, if true, suggests not all the warming we’ve observed in recent decades is man-made and that the Earth’s natural cycles are beginning to cool the planet and will continue for the next two or three decades:
According to the US National Snow and Ice Data Centre in Colorado, Arctic summer sea ice has increased by 409,000 square miles, or 26 per cent, since 2007…
Prof [Mojib] Latif, who leads a research team at the renowned Leibniz Institute at Germany’s Kiel University, has developed new methods for measuring ocean temperatures 3,000ft beneath the surface, where the cooling and warming cycles start.
He and his colleagues predicted the new cooling trend in a paper published in 2008 and warned of it again at an IPCC conference in Geneva last September.
Last night he told The Mail on Sunday: ‘A significant share of the warming we saw from 1980 to 2000 and at earlier periods in the 20th Century was due to these cycles – perhaps as much as 50 per cent.
‘They have now gone into reverse, so winters like this one will become much more likely. Summers will also probably be cooler, and all this may well last two decades or longer.
‘The extreme retreats that we have seen in glaciers and sea ice will come to a halt. For the time being, global warming has paused, and there may well be some cooling.’
Not even the experts pushing this natural weather cycles story say global climate change is untrue. The expert above seems to think it accounts for at least half of the warming we’ve experienced in recent decades.
I’m no climatologist, so I can’t judge this research on its merits, but I hope to heck it’s true.
On the other hand, although this would provide decades of welcome weather, I fear the following recipe for disaster:
- Natural global cooling discredits the concept of man-made global warming in the minds of non-scientists
- After 25 years of cooling, humanity has pumped incredible quantities of greenhouse gases into the atmosphere, has done little to limit population or resource over-exploitation, and is more addicted to fossil fuels than ever before
- A natural global warming period kicks in
- The combination of natural warming and the long-hidden impacts of man-made warming ratchet up temperatures far faster than humans and the Earth can cope with
- Rapid warming plus 25 more years of weakening our planet’s environmental immune system combine to produce billions of deaths and perhaps even a planet uninhabitable by people
Hopefully, this news is true and humanity will use our grace period to better understand our planet’s climate and finally act to moderate our impact on it. Our poor understanding of Earth’s climate means humanity is flying blind as our behavior continues to pump astonishing quantitites of carbon, methane and other gases into the atmosphere. How much more can Mother Earth tolerate? No one seems to know.
Posted by James on Jan 11, 2010
Over the past decade, I’ve seldom
opened the newspaper visited Google News to discover happy news.
Today was a rare exception.
“My” U.S. Senator Chris Dodd — whom I’ve said should retire or be retired for his central role in the late-‘90’s elimination of banking regulations, which led directly to the Great Recession and tens of trillions in bank bailouts, and for authoring and sponsoring the HAVA law that foisted hackable, unauditable electronic voting machines on states — won’t seek re-election.
The Senate will remain full of Fox News Republicans and “centrist” (meaning “corporate-loving, citizen-despising”) Democrats, so this news doesn’t make me jump for joy and sing “Happy Days Are Here Again,” but I’m glad every time another of those responsible for America’s horrible decade won’t be around to screw up the 2010s.
Posted by James on Jan 06, 2010
In 2008, Argentina seized $29 billion of its citizens' private retirement funds. Why? Because, as MoneyWeek explained, “the country has more public debt than when it defaulted seven years ago. That’s why the private pension accounts are being seized; the government needs the money.”
The government apparently cashed out the private investments and used the cash, giving citizens IOUs (with the fancy name of “government securities”). Even if the government ever pays back its debt, that debt is rapidly losing value because Argentina suffered the world’s third-highest inflation rate in 2009.
To sum up: The government grabbed private pensions, sold them off, spent the cash, and replaced the accounts with IOUs which are rapidly becoming worthless because the government is printing so much currency that the currency is rapidly losing value.
I explain all this because some believe the U.S. government might be planning the same thing since U.S. government debt is exploding and traditional lenders — most notably, China — are balking at buying more:
The [government plan] involves rolling people’s 401(k) savings into directed distribution plans unless they specifically elect not to participate… Congress reformed the 401(k) system three years ago. The idea back then was the exact opposite of the current proposal… [T]hat the concept of reforming the 401(k) system has shifted 180 degrees in just three years, from moving people into high-yield, riskier investments to moving people into low-yield, relatively safer investments, should be all the reason you need to become suspicious.
When the 401(k) system was being reformed in the spring of 2007 the stock market had been on a four year bull market. Stocks were getting very expensive and overpriced. Wall Street insiders, which were holding these stocks needed someone to sell them to before the stock market began declining just six months later.
In this environment, Congress “magically” decided that 401(k) holders needed to buy more stocks, and Wall Street obliged. The 401(k) holders would have been much better off if they had instead been in money market funds, like they wanted to be, but that’s not what the reformers in Congress decided. What happened instead was Wall Street insiders unloaded much of their overpriced stocks on 401(k) sheeple before the market crashed.
Today’s market is very different. Interest rates are at historic lows, thus bond prices are at historic highs. The government is flooding the market with record treasury issuance and mortgage-backed security yields are only being kept down by massive intervention by the Federal Reserve. Interest rates have nowhere to go but up, which means that bond prices have nowhere to go but down.
Now Congress wants to reform the 401(k) system again, this time getting people to invest in fixed-income financial products, and Wall Street is sure to oblige again. Even Secretary Iwry’s proposal admits that these lifetime income products are “inflexible and expensive” with annuity fees averaging around 6% annually, as opposed to the 3% annual fees from a 401(k).
If this comes to pass in America, it would be even more disgusting than in Argentina. At least in Argentina the motive was to prop up government finances and prevent the chaos of government default. In America, the prime motive would be private greed. Banks would make a killing selling overvalued bonds to these new government-administered retirement accounts before government cranked up the printing presses and inflation kicked in, slashing the real value of government debt and government-administered accounts. If this comes to pass, the government and banks would have, in effect, stolen part of each 401(k).
I’d like to believe this could never happen here, but it fits two Washington SOPs: 1) Screw the ignorant: The plan being floated would allow the well-informed to opt out; and, 2) Banks matter; ordinary people don’t: Megabanks have recently received tens of trillions of dollars while the nearly 300 million ordinary Americans received nothing but massive future tax hikes to pay for those bailouts.
Posted by James on Jan 12, 2010
Bob Herbert summarizes some depressing statistics in a new study by the Brookings Institution’s Metropolitan Policy Program:
From 2000 to 2008, the number of poor people in the U.S. grew by 5.2 million, reaching nearly 40 million. That represented an increase of 15.4 percent in the poor population, which was more than twice the increase in the population as a whole during that period.
The study does not include data from 2009, when so many millions of families were just hammered by the recession. So the reality is worse than the Brookings figures would indicate…
“Suburbs gained more than 2.5 million poor individuals, accounting for almost half of the total increase in the nation’s poor population since 2000.”
Posted by James on Jan 24, 2010
If we can’t trust the World Health Organisation (WHO), does ANY organization (or organisation) remain uncorrupted by corporate greed?!?!?!
Wolfgang Wodarg, head of health at the Council of Europe, claims major firms organised a “campaign of panic” to put pressure on the World Health Organisation to declare a pandemic.
He believes it is “one of the greatest medicine scandals of the century” — and has called for an inquiry…
Dr Wodarg said: “It’s just a normal kind of flu. It does not cause a tenth of deaths caused by the classic seasonal flu.
“The great campaign of panic we have seen provided a golden opportunity for representatives from labs who knew they would hit the jackpot in the case of a pandemic being declared.
“We want to clarify everything that brought about this massive operation of disinformation. We want to know who made decisions, on the basis of what evidence, and precisely how the influence of the pharmaceutical industry came to bear on the decision-making.”
He added: “A group of people in the WHO is associated very closely with the pharmaceutical industry.”
Posted by James on Jan 12, 2010
healthcare health insurance reform bill does so little to restrain healthcare costs or help ordinary people and so much to put money in the pockets of health insurance companies that I’ve wondered why Republicans bother opposing it.
Lawrence O'Donnell’s excellent analysis explains why: Republican leaders are only pretending to oppose it. They want it to pass so they can then “fight” it:
[Republican leader] Mitch McConnell… entered a unanimous consent agreement with [Democratic leader] Harry Reid about how to proceed on the health care bill. McConnell knew that agreement was going to make it impossible for Republicans to amend the bill and would put it on a fast track toward passage.
McConnell accepted an agreement brilliantly designed by Reid that required 60 votes to pass an amendment. McConnell did that without anyone noticing anything odd after a year of saturation coverage of the importance of 60 votes in the Senate. Everyone outside the Senate now thinks it takes 60 votes to do anything. Not amendments. Amendments pass by a simple majority, 51 votes. Amendments are usually debated for a couple of minutes or hours or days, then voted on. Once in a while, a 60-vote cloture motion is needed to end debate on an amendment. What McConnell agreed to was an implicit cloture motion in every vote on every amendment, thereby completely surrendering the minority’s real power. In all my years in the Senate, I never saw a leader make such a mistake. If it was a mistake.
There are no real filibusters in the Senate anymore. The way you “filibuster” a bill that you want to kill is offer an endless stream of reasonable sounding amendments that have to be debated and voted on. It’s easy to come up with one amendment per page of legislation. That’s why the Republicans offered hundreds of amendments during the Senate committees' debates on the bill. When the majority leader brings up a two thousand page bill, the minority would normally come up with at least five hundred amendments that could drag out the debate for several months. That’s what the Republicans did in 1994 when they killed the Clinton health care reform bill on the Senate floor. No filibuster, no forcing the Democrats to clear 60-vote procedural hurdles, no forcing a reading to the bill, just an endless stream of reasonable sounding amendments — so reasonable that some of them passed with votes of 100 to 0. And the Democrats, seeing this could go on forever, surrendered. Fifty-seven Democrats were defeated by forty-three determined Republicans.
This time, Republicans tried to look obstructionist. To the media, the Tea Partiers, and Sarah Palin, it sure looked like Republicans were pulling out all the stops — forcing a reading of the bill, forcing a frail elderly senator to vote in the middle of the night. But the Republicans only offered four substantive amendments along with five hopeless motions to send the bill back to the Finance Committee. One Republican amendment actually got 51 votes, but didn’t pass because McConnell’s 60-vote agreement with Reid sabotaged it. A Democratic amendment on re-importation of prescription drugs got more than 50 votes but did not pass. It would have shot a hole through Harry Reid’s bill, as would other Democratic amendments that got more than 50 votes and failed. McConnell’s unanimous consent agreement with Reid made Reid’s bill impenetrable on the floor.
Posted by James on Jan 19, 2010
Even Fox News displayed great compassion during the week after Hurricane Katrina — when the U.S. government couldn’t be bothered to bring water, blankets, food, medicine, port-a-potties, or generators to the poorest residents trapped in New Orleans because they lacked cars (but somehow managed to block — with armed soldiers — the few locations where people tried to walk out of the flooded city). So I thought that if there were one thing all Americans could agree on it’s that George W. “Heck-of-a-Job, Brownie” Bush failed New Orleans.
But New Orleans' richest residents cheered Bush!:
[W]hile New Orleans' population is two-thirds black, the fans inside the Superdome [for the Saints' NFC Championship Game] on Sunday were nearly all white.
“Economics,” said James Hutchinson, executive director of Family Advocacy and Services, based in the Ninth Ward of New Orleans. “It hurts. There are thousands and thousands of loyal African-American fans who couldn’t realistically aspire to attend. The bottom line is you’re talking anywhere between $300 to $1,000 for a ticket. Given the disparities, the lack of equitable economic opportunities, that’s not going to happen.
“New Orleans developed along a plantation’s and farmer’s economy,” Hutchinson said. “There’s a lack of meaningful participation in many mainstream private businesses. Money is closely held, passed along through inheritance. Even before Katrina, it was a tale of two cities – one of the nicest cities if you have money. One of the worst if you don’t.”
…Roger Goodell, the NFL commissioner, declare[d] on Sunday, “There’s magic here,” talking about the Superdome. The desperate masses that flocked there during Katrina were not present in the building to watch the NFC title game. Their experience certainly was never magical.
If you needed further proof of this divide, then it came during a pregame introduction of former President Bush. Once pilloried for his approach to the Katrina catastrophe in 2005, Bush was heartily cheered at the Superdome – which tells you all you need to know about the crowd’s demographics.
Posted by James on Jan 26, 2010
Paul Krugman writes:
Back in July, Mr. Bernanke spoke out against a key reform proposal: the creation of a new consumer financial protection agency. He urged Congress to maintain the current situation, in which protection of consumers from unfair financial practices is the Fed’s responsibility.
But here’s the thing: During the run-up to the crisis, as financial abuses proliferated, the Fed did nothing. In particular, it ignored warnings about subprime lending. So it was striking that in his testimony Mr. Bernanke didn’t acknowledge that failure, didn’t explain why it happened, and gave no reason to believe that the Fed would behave differently in the future. His message boiled down to “We know what we’re doing — trust us.”
As I said, the Fed has returned to a dangerous complacency.
And then there’s unemployment. The economy may not have collapsed, but it’s in terrible shape, with job-seekers outnumbering job openings six to one. Nor does Mr. Bernanke expect any quick improvement: last month, while predicting that unemployment will fall, he conceded that the rate of decline will be “slower than we would like.” So what does he propose doing to create jobs?
Nothing. …[H]e’s acting as if it’s Mission Accomplished now that the big banks have been rescued.
Posted by James on Jan 25, 2010
In a democracy, it’s one person, one vote. (Of course, millions of voters are fooled into voting against their interests and for corporate interests by ads bought by candidates supported by corporations. But let’s keep this story simple.)
In a free market, it’s no income, no “vote.” People without income are invisible to the free market. In fact, the poor are worse than invisible to clothing retailer H&M:
In the bitter cold on Monday night, a man and woman picked apart a pyramid of clear trash bags, the discards of the HM clothing store that reigns in blazing plate-glass glory on 34th Street, just east of Sixth Avenue in Manhattan.
At the back entrance on 35th Street, awaiting trash haulers, were bags of garments that appear to have never been worn. And to make sure that they never would be worn or sold, someone had slashed most of them with box cutters or razors, a familiar sight outside H & M’s back door. The man and woman were there to salvage what had not been destroyed….
On Dec. 7, during an early cold snap, [Cynthia Magnus] said, she saw about 20 bags filled with H & M clothing that had been cut up.
“Gloves with the fingers cut off,” Ms. Magnus said, reciting the inventory of ruined items. “Warm socks. Cute patent leather Mary Jane school shoes, maybe for fourth graders, with the instep cut up with a scissor. Men’s jackets, slashed across the body and the arms. The puffy fiber fill was coming out in big white cotton balls.” The jackets were tagged $59, $79 and $129….
Directly around the corner from H & M is a big collection point for New York Cares, which conducts an annual coat drive.
What economic “logic” drives firms — plural because a Wal-Mart also destroyed unsold clothes the same way — to destroy brand new clothes rather than let the poor keep warm through this horribly cold winter?
If you destroy clothing, you’ve lost only what you paid wholesale (pennies on the retail dollar). If you give it away, you’re also potentially losing a customer (who’s to say who winds up wearing it?) and cheapening your brand (what fashion brand wants homeless people wearing its clothes?).
Of course, having a New York Times article depict your retail chain as heartless capitalist pigs can’t be great for business either.
Posted by James on Jan 07, 2010
I’m moved by this depressingly somber story chronicling the impact of The Great Recession on residents (and former residents) of Cape Coral, Florida:
Each [of Cape Coral’s 64,571 single-family homes] touched by foreclosure over the last three years is marked red, as if the city were stricken with a rash: 18,575 red dots pockmark the map.
As she gathers the artifacts of lives gone wrong and deposits them into Dumpsters, she wonders what happened. “People can just up and leave, and it seems like they leave their whole lives behind,” she says. “Army medals. Photo albums. Framed photos of children. Cribs. Toys. I don’t know if they don’t have anywhere to go or anywhere to put this stuff. But you’d think that pictures of your kids you’d take.”
“One elementary school principal noticed parents going into schools with kids in the morning and sitting down in the cafeteria with them,” Mr. Browder said. “Then they noticed parents eating breakfast off kids’ plates. And then they noticed parents taking scraps home.”
When [Allen Olofson-Ring] gets new listings, he visits the properties to see whether they are occupied. To get inside, he uses the tools that fill the trunk of his Nissan Altima: a power drill, specialty keys, flathead screwdrivers. “It can get wild,” he says. “We’re about to break in the house — no, rephrase that — gain entry, and some guy comes out half-naked and says, ‘What you doing in my house, boy?’”… “I get numb to it, I guess, because I’ve done so many,” he says. “It’s a little surreal. You feel bad. It gnaws at you. At the same time, what are you going to do? Life goes on.”
The house is mostly empty, owing to impromptu yard sales [Kevin Jarrett] conducts to keep food on the table. The piano, the sofa, the coffee table, the dining room table and chairs: all gone. His living and dining rooms are devoid, save for one piece of art he cannot bear to surrender: a statuette of Don Quixote. “You know, dream the impossible dream,” he says. “It’s just one of those little remnants to keep dreaming, because if you don’t dream, you don’t get anything.” His wife left in July 2008, he says, taking their daughter back to Illinois. (“Not having the finances to sustain the lifestyle you had is very trying on a relationship,” he says.)
If you can bear it, The New York Times offers a second heartbreaking story, “Living on Nothing but Food Stamps”:
About six million Americans receiving food stamps report they have no other income… unemployed and receiving no cash aid — no welfare, no unemployment insurance, and no pensions, child support or disability pay… About one in 50 Americans now lives in a household with a reported income that consists of nothing but a food-stamp card… The numbers have nearly tripled in Nevada over the past two years, doubled in Florida and New York, and grown nearly 90 percent in Minnesota and Utah.
Posted by James on Jan 04, 2010
Even if you’re not a dinoflagellate fan, you’ll probably enjoy this article on this fascinating, bizzare, important class of microorganism.
Posted by James on Jan 06, 2010
I always argued Mother Teresa — one of the world’s great “altruists” — was, like us all, a selfish woman because she would have felt miserable doing anything other than ministering to the poor and sick. (Though she acted “selfishly,” in the broadest sense of the word, Mother Teresa nevertheless lived an incredibly noble, admirable life.)
So I loved this quotation — “The most selfish thing you can do is to help other people” — by SmileTrain.org founder Brian Mullaney, who “was a successful advertising executive, driving a Porsche and taking dates to the Four Seasons, when he felt something was missing and began volunteering for good causes. He ended up leaving the business world to help kids smile again — and all that makes him smile, too.”
In the same excellent article on happiness, Nicholas Kristof comments, “while charity has a mixed record helping others, it has an almost perfect record of helping ourselves,” a secret formula for happiness I hope will remain a secret no longer.
Bankers whose greed cost ordinary people trillions of dollars and ran the world economy into the ground should beware the corollary: Acting like a selfish pig with an unquenchable thirst for money — no matter how many people’s lives one ruins — makes one less happy. (Of course, this applies only to those of us possessing consciences. I suspect more than a few executives running our megabanks — and the politicians who bailed them out — are amoral sociopaths.)
Posted by James on Jan 17, 2010
It’s horrible enough Timothy Geithner, as New York Federal Reserve Chairman, gave A.I.G. tens of billions of taxpayer dollars to help pay off bankrupt A.I.G.’s creditors'
gambling credit default swap winnings at 100 cents on the dollar.
But now we learn that Geithner fought even A.I.G. itself to prevent A.I.G. from disclosing that it was paying off the credit default swaps at 100 cents on the dollar.
Geithner’s actions prove he knew the bankrupt A.I.G. shouldn’t be using Fed money to pay off private debts at 100% of face value. But instead of cutting a deal with creditors (read: his banking buddies) to take even a modest haircut and appease the public, Geithner strong-armed A.I.G. into keeping the payments secret!
Posted by James on Jan 07, 2010
The Washington Post reports:
There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well.
Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 — and the number is sure to have declined further during a difficult 2009…
And the net worth of American households — the value of their houses, retirement funds and other assets minus debts — has also declined when adjusted for inflation, compared with sharp gains in every previous decade since data were initially collected in the 1950s.
Posted by James on Jan 07, 2010
According to technology security guru Bruce Schneier, writing on CNN.com:
Google made headlines when it went public with the fact that Chinese hackers had penetrated some of its services, such as Gmail, in a politically motivated attempt at intelligence gathering. The news here isn’t that Chinese hackers engage in these activities or that their attempts are technically sophisticated — we knew that already — it’s that the U.S. government inadvertently aided the hackers.
In order to comply with government search warrants on user data, Google created a backdoor access system into Gmail accounts. This feature is what the Chinese hackers exploited to gain access….
China’s hackers subverted the access system Google put in place to comply with U.S. intercept orders. Why does anyone think criminals won’t be able to use the same system to steal bank account and credit card information, use it to launch other attacks or turn it into a massive spam-sending network? Why does anyone think that only authorized law enforcement can mine collected Internet data or eavesdrop on phone and IM conversations?
These risks are not merely theoretical. After September 11, the NSA built a surveillance infrastructure to eavesdrop on telephone calls and e-mails within the U.S. Although procedural rules stated that only non-Americans and international phone calls were to be listened to, actual practice didn’t match those rules. NSA analysts collected more data than they were authorized to and used the system to spy on wives, girlfriends and notables such as President Clinton.
But that’s not the most serious misuse of a telecommunications surveillance infrastructure. In Greece, between June 2004 and March 2005, someone wiretapped more than 100 cell phones belonging to members of the Greek government: the prime minister and the ministers of defense, foreign affairs and justice.
Posted by James on Jan 26, 2010
Strength training appears to have an astonishing ability to improve brain function:
Older women [aged 65 to 75] who did an hour or two of strength training exercises each week had improved cognitive function a year later, scoring higher on tests of the brain processes responsible for planning and executing tasks…
A year later, the women who [had been randomly assigned to] strength training had improved their performance on tests of so-called executive function by 10.9 percent to 12.6 percent, while those assigned to balance and toning exercises experienced a slight deterioration — 0.5 percent. The improvements in the strength training group included an enhanced ability to make decisions, resolve conflicts and focus on subjects without being distracted.
Posted by James on Jan 31, 2010
Economist James K. Galbraith wrote “The Predator State” in 2006. It explains how our government “works”:
[P]redation has become the dominant feature — a system wherein the rich have come to feast on decaying systems built for the middle class. The predatory class is not the whole of the wealthy; it may be opposed by many others of similar wealth. But it is the defining feature, the leading force. And its agents are in full control of the government under which we live.
Our rulers deliver favors to their clients. These range from Native American casino operators, to Appalachian coal companies, to Saipan sweatshop operators, to the would-be oil field operators of Iraq. They include the misanthropes who led the campaign to abolish the estate tax; Charles Schwab, who suggested the dividend tax cut of 2003; the “Benedict Arnold” companies who move their taxable income offshore; and the financial institutions behind last year’s bankruptcy bill. Everywhere you look, public decisions yield gains to specific private entities.
For in a predatory regime, nothing is done for public reasons. Indeed, the men in charge do not recognize that “public purposes” exist. They have friends, and enemies, and as for the rest—we’re the prey. Hurricane Katrina illustrated this perfectly, as Halliburton scooped up contracts and Bush hamstrung Kathleen Blanco, the Democratic governor of Louisiana. The population of New Orleans was, at best, an afterthought…
But if the government is a predator, then it will fail: not merely politically, but in every substantial way. Government will not cope with global warming, or Hurricane Katrina, or Iraq—not because it is incompetent but because it is willfully indifferent to the problem of competence.
Posted by James on Jan 12, 2010
Check out these cool photos of China’s soon-to-launch train that will average 217 mph between Wuhan and Guangzhou. These major cities — 663 miles apart — will soon be linked by a 165-minute train ride.
I applaud China’s focus on building cities and high-speed trains, even as I “rail” against their city-clogging and environment-destroying love affair with cars and obscene government spending on new roads.
As an American, I arguably have no standing to criticize China for its cars and roads, but few Americans can realistically survive without cars because we were born into a society already addicted to cars. China had an incredible opportunity to see and avoid the horrible consequences of America’s cars-and-suburbs culture. It could have emulated New York City but is becoming more like Los Angeles.
I can understand how pre-traffic-jam, pre-oil-shock, pre-global-climate-change Americans idealized their sexy new car culture. But — weather aside — Manhattan is a more desirable place to live than L.A., in part because of the convenience of not having to drive two hours to get somewhere. And I see how our cars-and-suburbs culture feeds inexorably on itself, with traffic jams leading to new road construction and new roads encouraging suburban housing and car purchases. Once a country begins driving down that road, it can’t do a “U-turn.”
With the benefit of “hindsight,” China could and should have chosen a wiser path. I wrote a paper in grad school over a decade ago arguing this exact point. The theoretical strength of China’s strong, centralized, one-party government is its ability to make decisions in the long-term public interest, rather than short-term private interest, which is what fuels the relentless cars-and-suburbs frenzy.
So, while I love what China’s doing with trains, I wish it were doing much, much more. And it breaks my heart to see China mindlessly adopting America’s car culture because it will severely accelerate global climate change (and leave its citizens less happy than if China had instead pursued the Manhattan ideal rather than L.A.’s dystopia).
Posted by James on Jan 04, 2010