FAIR WARNING: IRONY MAY BE IN USE HERE

Image via Wikipedia

Dear You—

There are so many good things about this country that I dislike harping on what is ailing us. Still, drawing attention to society’s deficiencies is one of a writer’s designated roles, so I had better not let the side down. In that spirit (‘reluctant yet principled’ one might say), and that of the arguments made in my book, Titanic Nation: How To Avoid Icebergs: The Case For Fundamental change In The American Way Of Life, let me make the following observations. But first, for those who are challenged by nuance, allow me to give fair warning that irony may be in use here:

·         Household net worth has decreased from its peak of $65.86 trillion in Q2 of 2007 to $54.56 trillion as of Q1 2010 (and it is still dropping like a plugged plover). That is a drop of $11.3 trillion – over 17 percent - and members of the Middle Class are the principal losers. Why not indeed! They – we – have been losing out since the early Seventies so, after such a long period of such injustice being the accepted norm, one might credibly advance the argument that it’s just the American Way. After all, this is a democracy and the system which tolerates such a norm is voted in by ‘We, the People.’

NOMI PRINS (Yes, this really is her)

·         The cost of bailing out the banks – who were the primary cause of the Great Recession - to date has been $14 trillion. Source: Nomi Prins’ book It Takes a Pillage The reason that they get bailed out is because Social Welfare for the Rich and Corporate Interests is part of the American Way too. 

·         Out of that $14 trillion, Wall Street received $12, 194 trillion, and American citizens received $1,823 trillion. Now, one might think that a little unfair, but that’s the whole point! If it was fair, the Right would call it 'Socialism;' and we certainly can’t have that in a nation of rugged individualists. Besides, we'd be damned because, as everyone knows, fairness is un-Christian.

·         Extraordinarily low interest rates resulting from the current policies of the Fed have the effect of subsidizing Wall Street massively, because the banks can borrow at minimal cost and then re-lend at a profit (to the U.S. Government if so inclined), while undermining the return made by the average saver, who cannot borrow at the minimal rates charged by the Fed, but instead can experience the joys of double digit credit card interest rates. In effect, once again they promote a transfer of wealth from the Middle Class to the Rich and Corporate Interests because any other way would be un-American and therefore, by definition, wrong, because everyone knows the American Way is the best way in the world..

·         The country’s trade deficit widened 18.8 percent in June 2010 which is what you’d expect if American business had been outsourcing American jobs for decades in the fine tradition of Free Trade.

·         In order to find money to give to the States to keep teachers working, funding for the Food Stamps program was cut, which just goes to show that American Capitalism is truly unfettered exactly as the Chamber of Commerce wants.

All of this cannot but force the conclusion that we seem to have created a society of truly impressive inequality where the Rich and their Corporate Interests get ever richer and the rest exist solely to be pillaged; and that impression has to be reinforced by the feeling that if our American culture is prepared to tolerate this for any length of time, perhaps our core problem is cultural. Or such is my view. In short, in the time tested spirit of rugged individualism and personal responsibility, we are getting exactly what we deserve; and we seem exactly on track to get a great deal more of it.

I’m left with one puzzling thought: If the American Business Model, based upon unfettered capitalism, Free Trade and all this rugged individualism, is the best in the world, how come so many other economies are doing so much better than we are? And why don't most Americans know this?

Farewell from your puzzled friend.

Victor.

FAIR WARNING: IRONY MAY BE IN USE HERE

Image via Wikipedia

Dear You—

There are so many good things about this country that I dislike harping on what is ailing us. Still, drawing attention to society’s deficiencies is one of a writer’s designated roles, so I had better not let the side down. In that spirit (‘reluctant yet principled’ one might say), and that of the arguments made in my book, Titanic Nation: How To Avoid Icebergs: The Case For Fundamental change In The American Way Of Life, let me make the following observations. For those who are challenged by nuance, let me give fair warning that irony may be in use here:

·         Household net worth has decreased from its peak of $65.86 trillion in Q2 of 2007 to $54.56 trillion as of Q1 2010 (and it is still dropping like a plugged plover). That is a drop of $11.3 trillion – over 17 percent - and members of the Middle Class are the principal losers. Why not indeed! They – we – have been losing out since the early Seventies so, after such a long period of such injustice being the accepted norm, one might credibly advance the argument that it’s just the American Way. After all, this is a democracy and the system which tolerates such a norm is voted in by ‘We, the People.’

·         The cost of bailing out the banks – who were the primary cause of the Great Recession - to date has been $14 trillion. Source: Nomi Prins’ book It Takes a Pillage The reason that they get bailed out is because Social Welfare for the Rich is part of the American Way too.

·         Out of that $14 trillion, Wall Street received $12, 194 trillion, and American citizens received $1,823 trillion. Now, one might think that a little unfair, but that’s the whole point! If it was fair, the Right would call it 'Socialism;' and we certainly can’t have that in a nation of rugged individualists. Besides, we'd be damned because, as everyone knows, fairness is un-Christian.

·         Extraordinarily low interest rates resulting from the current policies of the Fed have the effect of subsidizing Wall Street massively, because the banks can borrow at minimal cost and then re-lend at a profit (to the U.S. Government if so inclined), while undermining the return made by the average saver, who cannot borrow at the minimal rates charged by the Fed, but instead can experience the joys of double digit credit card interest rates. In effect, once again they promote a transfer of wealth from the Middle Class to the Rich and Corporate Interests because any other way would be un-American and therefore, by definition, wrong, because everyone knows the American Way is the best way in the world..

·         The country’s trade deficit widened 18.8 percent in June 2010 which is what you’d expect if American business had been outsourcing American jobs for decades in the fine tradition of Free Trade.

·         In order to find money to give to the States to keep teachers working, funding for the Food Stamps program was cut, which just goes to show that American Capitalism is truly unfettered exactly as the Chamber of Commerce wants.

All of this cannot but force the conclusion that we seem to have created a society of truly impressive inequality where the Rich and their Corporate Interests get ever richer and the rest exist solely to be pillaged; and that impression has to be reinforced by the feeling that if our American culture is prepared to tolerate this for any length of time, perhaps our core problem is cultural. Or such is my view. In short, in the time tested spirit of rugged individualism and personal responsibility, we are getting exactly what we deserve; and we seem exactly on track to get a great deal more of it.

I’m left with one puzzling thought: If the American Business Model, based upon unfettered capitalism, Free Trade and all this rugged individualism, is the best in the world, how come so many other economies are doing so much better than we are? And why don't most Americans know this?

Farewell from your puzzled friend.

Victor.

O’REILLY’S LAW: THE RISE OF CORPORATE POWER IS INVERSELY PROPORTIONAL TO THE AMOUNT OF CORPORATE TAX PAID

Image via Wikipedia

Dear You—


As you will have read in my book Titanic Nation: How To Avoid Icebergs: The Case for Fundamental Change In the American Way Of Life, matters started to go drastically wrong, as far as most Americans were concerned, from roughly 1972. From that period, for a variety of reasons outlined in my book, American business culture abandoned the concept that business should harbor some degree of concern for all the stakeholders (employees, customers, suppliers, the community and the National Interest), and focused entirely on maximizing quarterly shareholder return to the exclusion of all else. 


Well, as you might expect, as U.S. corporate interests squeezed one tax concession after another from a largely bought congress, the corporate contribution to our tax base declined – as is graphically shown in the following chart. Add in the dramatic increase in Social Insurance and the results were predictable. The Rich and Corporate Interests got richer and the position of the Middle Class deteriorated. Other factors contributing to the decline of the Middle Class are covered in my book and include: the suppression of unions; the relative decline of wages; a decrease in pension availability; a squeezing of vacation time; competition from both illegal and legally imported labor; outsourcing; increases in financial charges, professional fees, educational costs and health insurance. 


The impressive thing is how all this was done while keeping the vast majority of Americans from really understanding what was going on. It speaks volumes to the effectiveness of propaganda by the forces who understand it best – business interests. But it's a sad thing because it adds up to a society where a small minority get richer while most lose ground. Is this inevitable because of global competition? The short answer is: "No," and it is easily proven by looking at what is going on elsewhere. However, most Americans are alarmingly ignorant of alternatives to the American Way of Life, and to the fact that there are highly effective free-enterprise alternatives to the American Business Model.

The source of this data is www.deptofnumbers.com and government sources.

U.S. Tax Revenue as a Fraction of GDP by Component.

Farewell for the moment. Write soon. I miss your wit and your company.



Victor.

DO THEY KNOW SOMETHING WE DON’T KNOW?

Image by World Economic Forum via Flickr

Dear You—

It strikes me that we are being remarkable unimaginative when it comes to both reviving the economy and solving our employment problem. I'll return to this theme but just to register the point, here is a piece on Brazil's recent achievements.

Brazil Generated 1.77 Million Jobs Last Year

Earthtimes
August 5, 2010

http://www.earthtimes.org/articles/news/338218,18-million-jobs-2009.html

Brasilia

Brazil generated 1.77 million jobs in 2009, despite the
effects of the international financial crisis that shook
much of the world, Brazilian authorities said Thursday.

"In a crisis year, the country generated 1.77 million
formal jobs. Brazil was the only country in the G20
(Group of 20) that generated that number of jobs,"
Brazilian Labour Minister Carlos Lupi declared.

Lupi said that by the end of this year Brazil will have
achieved the goal of creating 15 million jobs during the
presidency of Luiz Inacio Lula da Silva, who took office
on January 1 2003 and is set to leave on December 31.

Lupi said Lula's government is only 1 million jobs short
of that goal.

"We will reach 15 million with relative ease," he said.

Lupi said public administration was the sector that
created most jobs in 2009. This was partly due to a
change in the law which banned the government from
hiring contractors to carry out tasks.

Civil construction, including the construction of
housing for low- income families and other
infrastructure, played a major role in the 11.37-per-
cent private sector employment expansion last year.

I'd say the above just about speaks for itself, wouldn't you?


Farewell for the moment. Write soon. I miss your wit and your company.

 


Victor.



 

EISENHOWER'S NIGHTMARE: TOO BIG TOO AUDIT; TOO POWERFUL TO OPPOSE.

Image via Wikipedia

Dear You—

Do you know Chuck? Let me give you some background just in case: Chuck Spinney is a former Air force officer and highly respected retired Pentagon analyst who has been telling the truth about the excesses of the MICC (Military Industrial Congressional Complex) for decades. In fact, in the mid-Eighties, he made the front cover of Time magazine in his role of teller of the truth to Power – and survived. He is a remarkable man.

Retired or not – he lives on a sail-boat for much of the year - he continues to comment about defense matters and, in a recent e-mail, said the following.

Today we have a Pentagon that is spending more money (in inflation adjusted dollars) on defense than at any time since WWII, yet it can not pass the relatively simple audits required by the Chief Financial Officer's Act of 1990.  This law was intended to put teeth into the Accountability and Appropriations clauses of the Constitution.  The audits required by the CFO Act are "checks and balances" audits -- they merely describe whether or no any agency of the federal government spends the money Congress appropriated on the items Congress authorized for appropriations -- essentially the line between where the money comes from and where it goes.

This inability would be extraordinary enough in a company of modest size, but the fact that this situation exists here, in one of the most critical departments of the U.S. Government, year after year, is truly mind-boggling. And it is also illegal.

Recall that these people are spending over $1 trillion of our money (either from tax or borrowed) each and every year.

Farewell for the moment. Write soon. I miss your wit and your company.

Victor.

THE CRISIS OF MIDDLE-CLASS AMERICA (WHICH IS MOST OF US)

Image via Wikipedia

Dear You--

The chart shows the Inflation Adjusted Percentage Increase in Mean After -Tax Household Income Between 1979 and 2005. It is only one of many examples that demonstrates that the National Cake is being sliced to favor the few - to this Nation's great disadvantage.

It is my absolute belief that the U.S. is in serious trouble at present, but that the majority of people is still alarmingly unaware of the scale and scope of the problems, and even less well informed as to the possible solutions. I started feeling such concerns, and conducting ongoing research, in 2002, and commenced writing Titanic Nation: How To Avoid Icebergs: The Case for Fundamental Change In The American Way of Life in 2007 so I guess I’m a little disturbed – though I should know better - that the implications of our plight don’t get more coverage in the U.S. media as a whole. However, some foreign observers are certainly aware - as this extract from a lengthy piece in the U.K. Financial Times of July 30 2010 shows. It only covers one sector of concern although that is scarcely minor. The full piece The Crisis of Middle-Class America is worth reading.

“The slow economic strangulation of the Freemans and millions of other middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years. Dubbed“median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. That means most Americans have been treading water for more than a generation. Over the same period the incomes of the top 1 per cent have tripled. In 1973, chief executives were on average paid 26 times the median income. Now the multiple is above 300.

The trend has only been getting stronger. Most economists see the Great Stagnation as a structural problem – meaning it is immune to the business cycle. In the last expansion, which started in January 2002 and ended in December 2007, the median US household income dropped by $2,000 – the first ever instance where most Americans were worse off at the end of a cycle than at the start. Worse is that the long era of stagnating incomes has been accompanied by something profoundly un-American: declining income mobility.” 

Farewell for the moment. Write soon. I miss your wit and your company.


Victor.

THE SECRET OF WRITING IS … WALKING (JUST DON'T SIT ON A SNAKE!

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Dear You—

Today, I was asked by an as yet unpublished author if there is a secret to writing, perhaps some mental trick that can promote the necessary focus. I had to smile to myself. Would that it were that easy! In truth, I’m not sure there is any one key to writing, or even that a whole bunch would be adequate, but if there is one, walking would be a candidate – in my case, at least.

“Walking!” I hear you say in a suitably incredulous tone. “What, in heavens, are you talking about?” Bear with me; and I shall present my case.

As you well know, I’ve never been much of an athlete, but I’ve always loved walking, preferably for a few hours or a day, or longer. Firstly, it’s an immensely satisfying activity at a purely physical level; secondly, there are few better ways to work out a problem, resolve a creative issue, or just gain a new perspective; thirdly, there’s the fact that, when you are walking, you notice details that would be impossible in a car; fourthly, there is that sense of being in tune with nature; and, finally, it is truly amazing what adventures can result from something as seemingly harmless as a simple stroll. Well, maybe stroll isn’t the right word for a twenty mile cross country hike, or a walking tour through Fascist Spain with a diversion to Morocco, but my underlying point is that what starts out as a straightforward walk can lead one into some complicated and dangerous situations – ideal material for a writer if one should be fortunate enough to survive; and writing stems from experience even if significantly reinterpreted. Or such is my view. We can argue about the true nature of creativity some other time.

The craziest walk I ever went on was after a party in Dublin when I decided to walk some 24 miles through the Dublin Mountains in winter on a dare. Since I hadn’t slept, wasn’t adequately clothed, and had brought neither food nor water – and it was snowing – I was damn lucky I didn’t freeze to death (I came close) but it was also one of the most intense and uplifting experiences of my life. That part of the world is stunning under normal circumstances but in the swirling snow, with the ground still not fully covered so showing texture and color, I felt I had been transported into a world of such beauty I knew I could never to describe it. I suspect I was experiencing the onset of hypothermia, and I knew if I sat down I would never get up again, but it was an experience worth risking everything for; and I was young, and there was definitely someone watching over me.

The most dangerous walk I ever went on was in Cyprus just before the Turks invaded. At the time, the Greeks were the aggressors though both sides had official forces and armed bands of irregulars up to no good. Quite why I picked this place and time for a walking holiday is a good question but I was curious and, as you know, liked to spend time with units  so I’d know what I was doing when I started writing. In this case I underestimated just how far things had gone, and that trekking across the countryside at a time when both sides were feeling decidedly territorial was not smart. Suffice to say that I stumbled across a Greek farm where a bunch of unfriendly looking people were hauling up polythene wrapped weapons from a well. Since I was on foot, I surprised them completely and the question then was what we should do. Should I beat a hasty retreat? Should they kill me for having seen too much? I decided a pretense of ignorance was the best policy so strode ahead as if I had seen nothing even though several Sten guns had already been unwrapped and bade them all a cheery good morning without stopping. I can tell you I felt decidedly uncomfortable until I was out of sight because I thought there was a reasonable chance one of the assembled thugs would decide to put one of the weapons to terminal use. Feeling you have a target on your back is not a pleasant feeling. Later I was to experience the same feeling under sniper fire in Northern Ireland. Again I was lucky although a policeman nearby was not so fortunate and was shot dead by a 7.62mm round.

The walk that had the greatest personal consequences for me was the ramble along the cliffs in Wales which resulted in my finding a hanging body in a wood near a castle that had once been owned by William Randolf Hearst. That unpleasant business gave me the inspiration for Games of The Hangman and becoming a Best Selling author – and much else besides. The description in the book is pretty much what actually happened.