Saturday, April 26, 2014

April 26 2014: “One astonishing aspect of the structural changes reshaping America is how fiercely we work to avoid seeing them.” FABIUSMAXIMUS.COM

To get the man’s soul and give nothing in return -– that is what really gladdens Satan’s heart.”

C. S. Lewis, The Screwtape Letters (1942)


Buffalo JillsCLASS WARFARE IS VERY REAL, QUITE BRUTAL—AND THE ULTRA RICH ARE WINNING HANDS DOWN—AND WRECKING AMERICA. The thought provoking blog, FABIUS MAXIMUS (written by several people including some friends of mine), has just come out with a disturbing piece on how the low pay squeeze works in practice—how the ultra rich are either exploiting those who work for them and/or actively degrading their earning power (a particularly worrying and prevalent practice).

In effect, capital is beating labor to a pulp because:

  • A CORRUPT BUSINESS MODEL. The current American Business Model is largely bereft of any kind of moral code. This has nothing to do with religion. It has to do with right and wrong, of how we choose to treat each other, of decency. As matters stand—and it wasn’t always so—U.S.  corporate culture is fixated on maximizing shareholder value because that optimizes CEO/Senior executive pay which is normally tied to share options (which are taxed at a lower rate). In short, CEOs have every incentive to boost their share prices—regardless of the costs to employees, suppliers, the community, the longer term welfare of the corporation itself (for instance, by cutting back on research and development), and the National Interest (corporate and U.S. interests are increasingly diverging). This is a structural problem of epic proportions—which is also deeply adversarial—with most employees being regarded as being disposable. In effect, they are treated—not as people—but as commodities. I suspect this kind of behavior is already having profoundly negative effects in terms of morale, productivity, and international competiveness—together with a growing disillusionment with the corporate workplace—but that management is compensating by squeezing even more and ignoring the evidence. Nonetheless, treating people badly sooner or later tends to rebound on you. Right now, given that power lies overwhelmingly with management, it looks like being later—but later may come sooner than we think.
  • EMASCULATED UNIONS. Union power (the one force, other than legislation, which could keep corporations in check) has been largely broken (almost completely in the private sector) and it has been much hammered in the public sector too as a consequence of the extensive layoffs that took place during and after the Great Recession. This is not an accident. The Right Wing know perfectly well that if they want to represent the interests of the ultra rich—which is blatantly the case—unions have to be destroyed. 
  • UNCHECKED CORPORATIONS. Corporate power is largely unchecked, and corporations have learned to game the system—particularly by lobbying for endless tax breaks and other financial advantages which favor them. There was a time when corporations contributed about a third of the tax take. Now, they pay 10-12 percent—and many major corporations pay no tax at all. In addition, they have learned how to extract a truly vast amount of corporate welfare on a federal, state, and local level—even though they are no longer the job creation force that they were.
  • BIASED LEGAL SYSTEM. The legal system—up to, and including, the Supreme Court—largely favors the ultra rich and the corporations they control. And to make the situation even more ridiculous, corporations gain enormously from the legal fiction that they are people. They are clearly nothing of the sort.
  • NEAR NON EXISTENT WORKER RIGHTS. Worker rights are entirely inadequate—especially compared to Europe. This means that the individual is largely helpless when faced with corporate power.
  • ULTRA RICH DOMINATE GOVERNMENT. The ultra rich and corporations either control all branches of government—or have enough power to keep it from being effective.
  • ULTRA RICH AND THEIR CORPORATIONS OWN THE MEDIA. One of the reasons why the ultra rich have been able to rig the system to favor them so egregiously is that the media—who should be monitoring and deploring the actions of the ultra rich—are largely owned by corporations that the ultra rich control. And where there is coverage, it is neutralized with the argument that there are two sides to every issue, and that both should be given. On top of that, the number of journalists has been drastically reduced through wholesale layoffs, and investigative journalism largely eliminated. That means that the ultra rich can operate freely without fear of consequences—which is exactly what the do. This appalling situation is topped up think tanks and other institutions which spin the news to give the appearance of credibility to the plundering and distortion of the U.S. economy. This propaganda is highly effective and manifestly works. It also includes an endless stream of distraction which give the illusion of comprehensive news coverage—but not the substance. In effect, we are being manipulated at every level
  • APATHETIC AMERICA. The American people—who have the latent power to change the situation—seem incapable of action, would appear to be in deep denial, and/or are frozen in fatalism. One could argue that they are largely ignorant because the the ultra rich have a lock on the media, but still I would have thought that enough information has got out to give a critical mass of the population an incentive to fight back. Apparently not. What is of particular concern is that all this has been going on since the early Seventies—for about 40 years—so the damage to American society is deep and may soon be fatal.

Well, the above list is mine. Now let me now quote from the FB summary (they start every piece with a summary which is an idea worth thinking about). The opening line is stunning—and accurate:

One astonishing aspect of the structural changes reshaping America is how fiercely we work to avoid seeing them. Such as the transformation of employment. Breaking unions was the first and essential step. Now comes the larger changes: shifting jobs from full time with benefits and job security into temporary, insecure, part-time, no-benefits — at lower wages.

The FB piece continues by giving example of corporate exploitation covering:

  • Cheerleaders
  • Interns
  • Entry level positions for lawyers

One could easily add:

  • Regional airline pilots
  • Adjunct professors.
  • Journalists and writers in general
  • Teachers

EGREGIOUS CORPORATE BEHAVIOR IS WIDESPREAD. In fact, the pattern is near universal and it adds up to the elimination of a fair wage—whenever possible—in favor of a relatively small number of senior corporate executives and their shareholders. As for the rest of us, we are being squeezed in every conceivable way to the point where not only are costs going up, but our earnings are in decline.

RIGGED SYSTEM. Right Wing propaganda tries to argue that the ultra rich deserve what they get because they have worked for it. In some cases, that is true—and few of us grudge those who make a genuine contribution being exceptionally well rewarded. However, even in those cases, the system is rigged to favor the wealthy in more ways than even someone like me—who has studied the U.S. economy for over a decade—can grasp adequately. It adds up to a systemic corruption of the democratic process—and has turned the constitution into a mechanism of wealth extraction from the many to the few.

HOW LONG CAN THIS CONTINUE. How long will this predatory situation continue?

Until Americans wake up and decide to act—or demand gets so depressed that the ultra rich decide treating their employees somewhat better might make financial sense.

It’s a thoroughly depressing situation which we ignore at our peril—yet we are ignoring it anyway.


Thumbs upFASCINATING BLOG: THE UNZE REVIEW –A Collection of Interesting, Important, and Controversial Perspectives Largely Excluded from the American Mainstream Media


 

 

 

Friday, April 25, 2014

April 25 2014: THE ANSWERS ARE OUT THERE—IF YOU ARE PREPARED TO LOOK. TAKE HOUSING FOR INSTANCE. MAYBE WE SHOULD JUST PRINT THEM! (Yes, the house illustrated below was 3D printed at a cost of under $5,000)


Small home constructed from 3D-printed building blocks (Image: Winsun New Materials)

THINKING, WRITING & CREATIVITY. Fundamentally, this blog is about thinking, writing and creativity—with a dose of social comment thrown in (which I plan to split out into its own home fairly soon)—and, I hope, some humor. Where would life be without a profound appreciation of the ridiculous!

But an underlying theme which I come back to again and again—because I think it is so important—is that the answers are out there (if we are prepared to look). Currently, we don’t seem to be doing much looking. Fatalism seems to have struck this Great Can-Do Nation.

Why—because it’s the antithesis of what America should be all about?

  • IGNORANCE.
  • DISTRACTION.
  • FEAR.
  • HELPLESSNESS.
  • INERTIA.

Bluntly, we needn’t be in this mess—and we wouldn’t be if our system of government was working in our best interests. Demonstrably, it is not..

I HOLD THESE TRUTHS TO BE SELF EVIDENT. I didn’t always believe that. Though I have always been intellectually curious (and skeptical of “what most people think”), nonetheless, I accepted many circumstances as being pretty much inevitable—the poor are always with us etc.--even though my instincts told me otherwise. However, I am now somewhat ashamed of such intellectual inertia—because  since I started researching the U.S. economy in a fairly organized way ten years ago, I have been struck by the following facts (which to me are self-evident—and which are supported by a substantial body of data).

  • SEVERE STRUCTURAL PROBLEMS. Although we talk in terms of talk in terms of wanting a healthy economy, growth, and getting back to normal after a recession— a veritable circus of clichés—we tend to ignore the fact that the American Way of Life is marred by severe structural problems—and a large number of them at that.

In fact, the term “structural problem” is almost never used in the context of the economy. A structural problem—in the sense I mean it—refers to something built into the system (the structure) which virtually guarantees the most serious problems ahead.

Much as a house will eventually collapse if its structure is flawed, so will an economy. However, a house collapse tends to be dramatic and fast—whereas an economic collapse can take place almost unnoticed. Economic collapse can be an insidious process. You just get a little poorer every day but you don’t really notice it because you are borrowing a little more—and the official line is that the economy is growing. Well, it may be—BUT that growth is going to the ultra rich while you are getting squeezed. Do you want some examples of structural problems? Let me list a few:

    • FINANCIALIZATION.
    • THE COST OF THIRD LEVEL EDUCATION.
    • UNCHECKED CORPORATE POWER
    • CORPORATE SHORT TERMISM
  • WE’RE IN DECLINE. Whether we know and accept it or not, as far as most of us are concerned, the U.S. is in decline—and becoming more and more unaffordable for a significant percentage of the population. The adequately paid Middle Class job is vanishing. The Middle Class itself is shrinking (fast).
  • WE DON’T HAVE TO BE. Virtually none of the structural problems which I have identified are that difficult to resolve—given political will..
  • THE ULTRA RICH LIKE THINGS THE WAY THEY ARE. The ultra rich, who effectively control this county, have no interest in dealing with such structural issues because the status quo makes them ever richer.
  • ULTRA RICH PROPAGANDA WORKS. The ultra rich keep popular indignation in check by spending some of their money on buying Congress and the legal system—and on an unceasing campaign of highly effective propaganda. They regard such expenditure as just a cost of doing business—and in relation to the payback which comes from hijacking a complete country, it’s a small cost.
  • U.S. NO LONGER A DEMOCRACY. The U.S. is currently not a functioning representative democracy any more—or any kind of democracy. We have the trappings, but not the substance.That may seem like a somewhat provocative statement--not to mention shocking—but that is no longer just my opinion. It is now backed up by some formidable research.

 

NOW LET ME TELL YOU HOW TO 3D PRINT A HOUSE—COURTESY OF GIZMAG.COM

Small home constructed from 3D-printed building blocks (Image: Winsun New Materials)Thumbs upTEN HOUSES 3D PRINTED IN LESS THAN 24 HOURS. This small home may look plain, but it represents a significant achievement in rapid construction. A Chinese company has demonstrated the capabilities of its giant 3D printer by rapidly constructing 10 houses in less than 24 hours. Built from predominantly recycled materials, these homes cost less than US$5,000 and could be rolled out en masse to ease housing crises in developing countries.

MAINLY RECYCLED MATERIALS. Outside the major urban centers, there’s still a vast need for quick, cheap housing, and Suzhou-based construction materials firm Winsun has stepped forward with a very impressive demonstration of rapid construction by using 3D printing techniques to build 10 small houses in 24 hours using predominantly recycled materials.

CENTRAL PRODUCTION OF INSULATED PANELS. Rather than printing the homes in one go, Winsun’s 3D printer creates building blocks by layering up a cement/glass mix in structural patterns (watch the process here). The diagonally reinforced print pattern leaves plenty of air gaps to act as insulation. These blocks are printed in a central factory and rapidly assembled on site.


Thursday, April 24, 2014

April 24 2014: MY MUCH LOVED SISTER LUCY—A EYE FOR THE VISUALLY INTERESTING; AND THE TALENT AND THE DISCIPLINE TO CAPTURE IT

“The brave ones shot bullets; the crazy ones shot film.”

Joseph Longo

Founder International Combat Camera Association


The above is located in Camden, London, England—and the photo was taken by my much loved sister, Lucy—the sanest member of the family and the youngest.

THE ELDEST OF 12. Given that I am the eldest (there used to be twelve of us; but, sadly, four have died ahead of their time) I am vaguely disturbed by the implications of that qualification (which implies that I am probably the least sane)—but I expect I’ll get over it. The goods news is that if I am insane, I’m not aware of that fact, though I will fess up to being (mildly) eccentric. But then what creative type isn’t? Almost by definition, creativity renders oneself an outcast.

We are, I will admit—a restless breed. We question the status qo. We can’t help it. It’s part of our nature.

Lucy Ayettey Lyons's photo.

THE SUCCESSFUL MOTHER OF FIVE. Lucy definitely has an eye for a  good picture—and, under different circumstances, might have chosen photography as a career—but instead has focused on being a very successful mother of five children (no easy task given the distractions and temptations of London).

I considered becoming a professional photographer myself, at one stage, but words won out. So why don’t I do both?

Because writing takes all my time and effort—and is entirely fulfilling just by itself.

HUGO FITZDUANE. Nonetheless, when I see a particularly evocative shot, I cannot help but recall the excitement, pleasure, and dangers that accompanied my various professional forays with a camera—and it is why I made the protagonist of most of my books, Hugo Fitzduane, a soldier turned combat photographer—who becomes involved in counter-terrorism by  accident, and then finds he can never get free.

Actions have consequences, terrorists have long memories—and the means, methods, and motivations to kill. And they do so because they can.

For the rest of his life—no matter what he does—he will be a target. Or he will seize the initiative—and kill.


Thumbs upTO MY FRIENDS—TOO MANY TO NAME—BUT YOU KNOW WHO YOU ARE. YOU ENRICH MY LIFE


Wednesday, April 23, 2014

April 24 2014: THAT SENSE OF NERVOUS ANTICIPATION. TERRIFIED—LET LOVING IT

"Wealth - any income that is at least one hundred dollars more a year than the income of one's wife's sister's husband."

H.L. Mencken


NATIONAL LIVING TREASURE. Barry Ritholtz’s blog is such a pleasure that I really should give him credit each time I lift a quote that he has used. But, of course the real credit belongs to H.L. Mencken—so  I think I’ll leave things the way they are. I first heard about Mencken  from the late BBC broadcaster, Alistair Cook—he of LETTER FROM AMERICA fame—who quoted from him constantly (to my great entertainment). Wit enriches life

A USEFUL STATE. Barry, after all, has the advantage of still being alive—a useful state if you want to write. His blog—THE BIG PICTURE—is consistently of a high standard. Some of his financial analysis (more the stuff written by guest bloggers) can be quite heavy going; but, personally, he has a marvelous wit, and writes with great clarity—helpful  given the arcane world of finance. His blog also includes —virtually daily—a  selection of reading material which rarely fails to produce some fresh insight.

I have put him in my mental ‘National Living Treasure’ box. He comes across as a  decent man—and not a typical Wall Street money-at-any-price type. The man has empathy and compassion—attributes we should probably value a great deal more than we do.

MY ZEN PERIOD—WHICH CONTINUES. Over four years ago, I decided I wouldn’t lose my temper for a year—and stuck to it—and now it has become a habit. Saves a great deal of energy. Amuses the hell out of me. Today, I can’t get my printer to work so I’m tempted to try a little rage—but I’m far from sure my computer would be cowed into cooperation. I’m actually getting better at fixing the damn things—somewhat to my amazement—because I come from a background which was impressively lacking in practicality. My much loved grandmother, for instance, never learned to drive and used horses on her farm (which she bought for her grandchildren to enjoy, not because she wanted to farm). She liked the way the horses looked—they were massive beasts, one black and the other white—and it allowed her to employ more people. Not  a misprint. She was a high minded, socially concerned, compassionate woman—and I miss her every hour I breathe.

CHARISMATIC MANIAC. As for my mother, I don’t think she ever learned to drive either, because she was lethal behind the wheel, and the worst driver I have ever known. In fact, she once plowed through a bus queue in nearby Donnybrook (yes it really exists) though I don’t think anyone was actually killed. How she got insurance, I’ll never know, but Ireland was laid back in those days, and people were tolerant of each others’ eccentricities—at least in her social circle—though I think she pushed the envelope beyond scientific possibility. But, to be fair, she didn’t make a habit of mowing down bus queues, as such—she was quite catholic in the trail of destruction she left in her wake. She took out a sh0p front during another incident. But she was also charismatic, forceful, connected, and could be charming, so she got away with stuff that would have had anyone else locked up—or put in a padded cell. And I guess it didn’t hurt that her brother-in-law, Michael O’Reilly, was a senior policeman—a chief superintendent (roughly the equivalent of a chief of police).

SEX—AND A GREAT DEAL MORE SEX—AND, SUDDENLY, WE WERE 12. The only thing my grandmother was trained to do was be a lady—and to speak excellent French, thanks to her French governess. My mother endured the same fate—until she rebelled in her mid teens and was allowed to go to boarding school. She then fled to London and joined the WAAF—the Women’s Auxilary Air Force—not because she wanted to fight for King and Country, but because there was a war on—and then meant men in profusion. Sure the city was being bombed, and civilians were being killed in serious quantities, but mother needed men as desperately as a drowning man (or woman) needs air. And I was the result. Eleven more were to follow at a time when women of her social standing slept around—if they slept around (and of course they did)—discretely;and did not have large families. Four or five, if you were gentry, was tops.  A dozen was for the peasantry—even though mother did it with some style. We alternated boy/girl, boy/girl the whole way through. As someone said about the Japanese, we made for a neat crowd.

THE MERIT OF MISERY. Though I didn’t have a happy childhood—or even close—I now realize that I was exceedingly fortunate to have as bizarre an upbringing as I did. It was tailor made to turn me into a writer partly because I became used to the unusual and the unorthodox—and just couldn’t settle for the ordinary. Also, practically everyone we knew was creative in some way or other—and creativity is inspiring and infectious. My grandmother, for instance, was a superb poet. My mother was an author and painter.

DAMNED IF I KNOW WHY I’M HAPPY—BUT THERE IT IS. I’m hovering somewhere between pensive and whimsical today. Part of it is because I’m tired—I stayed up through the night a couple of days ago—both to work and to watch RIVERDANCE and PINK FLOYD (separate stories—special memories) and part of it is because I’m exceedingly happy, though I don’t know why. I have rarely had a tougher year—or been more challenged—and yet somehow things feel right.

I have also embarked on a couple of parallel adventures—and I’m terrified. Then again, there is terror and terror. Terror when people are trying to kill you is in a different league—especially when it looks as if they might succeed.

TERRIFIED. That is always how the best adventures start. Terrified or not, you continue—because that is just what you do.

To think, to have, to hold, to lust, to love, to risk—and to write. I love it so.

 

Tuesday, April 22, 2014

April 23 2014: WE AUTHORS GET UP TO STRANGE THINGS

"Does the number of warships we have, and are building, really put America at risk, when the U.S. battle fleet is larger than the next 13 navies combined — 11 of which are our partners and allies?

Is it a dire threat that by 2020, the United States will have only 20 times more advanced stealth fighters than China?

These are the kinds of questions Eisenhower asked as commander-in-chief. They are the kinds of questions I believe he would ask today."

ROBERT GATES, SECRETARY OF DEFENSE


Artist's concept of a ship equipped with a railgun turret (Image: US Navy)SUPERGUNS AND THINGS. Back in the Nineties, when I had an involvement with a Livermore team (we are talking nuclear scientists here) who wanted to shoot stuff into space with a hydrogen powered supergun, our main competitor—apart from traditional rockets (which have a tendency to blow up when you least want them to—along with that satellite that took five years and $700 million to build)—was seen as being an electromagnetic railgun. However, somehow the railgun seemed to be more promise than product—and it had more than its fair share of teething problems. We said rude things about it because it was the competition. Scientists are supposed to be fact driven—and they are in many ways—but they can be as partisan on as the next person when it comes to their pet projects. That said, I was pretty sure that its day would come. It was already clear that the principles worked—so it was just a matter of working out the details. You do that by throwing money at the problem—and taking a long, long time to come up with answers. They call that development—and the golden rule is: never use your own money. After all, what else is the U.S. taxpayer for. Played right, on the back of such a development, you can put not just your children—but your grandchildren through college—and retire in comfort. Scientific development in this Great Nation—if the MICC (Military Industrial Congressional Complex thinks there is a buck or two in it for them—is a wonderful thing.

THE RAILGUN’S DAY SEEM TO BE COMING. Well, a quarter of a century or so later, the railgun looks like appearing—courtesy of the U.S. Navy. In fact, they plan to test one on a Speahead class joint high speed vessel (JHSV) 1n 2016 for a sea trial. Military stuff only seems to become real to such types after it is given an acronym. JHSV sounds so much cooler than ‘ship,’ for instance.

KINETIC KILLING POWER. A railgun works by accelerating the projectile by way of electromagnetic force—take my word for it—and can fire shells at speeds of Mach 7.5 (5,700 mph/9,200km/h) and it has a range of 126 miles or 203 km. That means it can destroy an enemy ship way before it can get close enough to fire conventional guns at you—not that it would in this missile age—and  it also means you can offer fire support to ground troops at much longer range than is possible with traditional canon. The projectile doesn’t have to contain explosives. Its kinetic energy, at such speeds, is sufficient to destroy virtually any target.

Railgun combat scenario (Image: US Navy)The prototype develops 32 megajoules—which I know you understand—of muzzle energy, and fires at the rate of 10 rounds per minute. Downstream, I expect they will increase that rate of fire—but 10 is a good round number to start with, and easy to remember.

SHIP-KILLING MISSILES. Could such a weapons be used against the hypersonic antiship missiles the Chinese are developing—arguably the greatest threat the U.S. Navy faces today—nuclear weapons apart? Well, the Navy haven’t whispered in my ear, but it seems likely. After all, if something is coming at you at hypersonic speed, it would seem a good idea to have something equally fast (or faster) to shoot it down with. Lasers? Possibly—but a laser has to burn through to get a kill (which takes a little time—albeit only a microsecond) whereas a kinetic kill is instant. Both it and the target just get vaporized. No wounded or corpses to bury. Environmentally friendly, you might say.

Apart from range, what makes the electromagnetic railgun particularly attractive to the Navy is that it is cheap by the standards of such a world.  Rockets are wonderful things; but hideously complex and moody—and they can cost millions of dollars each, whereas a railgun—per shot—is only a few thousand. As for the cost of a railgun to buy outright—well, it’s a little pricey—but think how much money you’ll save when you start breaking things and killing people.

But what about the development cost?

We call that ‘the sunk cost’—our little joke in the Navy—and it’s bad form to talk about it.

A MATTER OF PERSPECTIVE. Is this progress I hear you ask? Well, I guess it depends on whether you are the shooter—or the target.


April 22 2014: FOR FUN—AND THE HELL OF IT—LET ME SPECULATE ABOUT THE U.S. ECONOMY (But first, if you are somewhere high, close your windows)

2008 was to the American economy what 9/11 was to national security. Yet while 9/11 prompted the U.S. government to tear up half the Constitution in the name of public safety, after 2008, authorities went in the other direction.

Matt Taibbi


GUYS WITH BALLS MADE OF CRYSTAL. I steer clear of economic forecasting both because I don’t think you can forecast with decimal point accuracy with any consistency—though through sheer luck you will be right every so often—on the stopped clock principle—and because it’s not my area of interest. Also, though I believe in planning (what an Israeli general once memorably called “A common basis for change”) I am far from sure of the point of issuing a stream of unreliable forecasts—except to keep economists busy and politicians something to talk about.

MY BIAS IS MORE TOWARDS DETECTIVE WORK (Well, what else can you expect from a thriller writer!) What fascinates me are:

  • HUNTING. Tracking down policies that work.
  • IDENTIFYING. Identifying structural problems that stop the economy working.
  • SOLVING. Finding solutions to those structural problems.
  • PERSUADING. Implementing both policies that work and structural solutions. In practice, since last I checked I wasn’t either president or in any similar position of power, that tends to mean making the case through writing or public speaking. To what purpose? To make the world a better place—and for the sheer intellectual satisfaction of it all. What can I say! It beats golf or chess, as far as I am concerned, and you can devote just so much time to sex at my age (though I’m open to persuasion).

AN ECONOMIST’S BEST FRIEND—CONFUSION. Economists get around the forecasting issue by making constant revisions to the point where the average person is so confused that they can’t remember who said what and when—and the media seem to go on reporting forecasts regardless of the track record of the pundit in question. Name recognition counts for a great deal more than accuracy.

Curiously, the media seem to devote remarkably little effort to tracking down policies that work—which is rather sad. But the media these days are more about process than investigation. Filling the time—as far as many are concerned—seem to be regarded as a great deal more important than finding answers. Mind you, it’s hard to blame the media. Their ranks have been thinned drastically over the last decade—with investigative journalism being cut back to near the point of elimination—and investigation is innately risky. Trust me on that latter point. I have first hand experience of the price one pays for uncovering unpalatable truths.

But enough of the media. Now, I’m not going to forecast—but more to raise some issues which make me think that this current relative optimism about the economy—best personified by the stock market—is  misplaced.

  • STRUCTURAL PROBLEMS. Most haven’t even been identified publicly—and virtually none are being addressed.
  • DEMAND. Business cannot squeeze worker earnings indefinitely and expect sales and profits to rise inexorably.
  • EARNING POWER DOWN—COSTS UP. Strip out the top quintile, and the earning power of most Americans continues to decline. Meanwhile, a wide range of prices is increasing.
  • LABOR RELATIONS. U.S. labor relations suck—and nothing is being done to improve them. This gives our competitors a decided advantage—which we ignore at our peril.
  • CORPORATE EARNINGS. These do not bear close investigation in many cases—and corporate share buybacks (which constitute insider trading and should be illegal) are further distorting the picture. IBM is a case in point.
  • PRODUCTIVITY. There is a difference between statistical productivity improvements and real increases in productivity. Our statistics have long painted a rosier picture than was justified.
  • RESEARCH AND DEVELOPMENT. Government has long made a much greater contribution in this are than is generally admitted. One consequence of the Republicans obsession with austerity is that government investment in R&D has been cut back. Couple this with corporate short-termism, cash hoarding, and refusal to invest, and the longer term consequences are likely to be negative.
  • TECHNOLOGY. I’m very upbeat on technology despite the serious underinvestment. However, we have to face the fact that many technological breakthroughs also lead to job elimination—and we still don’t have adequate policies to deal with this.
  • INFRASTRUCTURE. It continues to crumble and we continue to do almost nothing about it.
  • THE FINANCIAL SECTOR. This has been substantially re-built thanks to virtually interest-free money from the Federal Reserve. However, not only is that not necessarily a good thing in itself, but it hasn’t resulted in the kind of investment in the real economy which we need. Worse than that, the financial sector’s recent involvement in the housing market shows every sign of driving house price up beyond the affordability level of many Americans. In short, the Fed’s policies may be good for the financial sector but they are decidedly harmful in other ways. Beyond that, we are not addressing the fundamental issue of financialization. Here, there is increasing evidence that too much financialization drags the economy as a whole down.
  • HEALTHCARE. This continues to cost more and more while most Americans earn less and less. It also delivers inferior results. This is just not a sustainable situation.
  • CORPORATE BEHAVIOR. CEO pay continues to rocket, worker pay continues to be squeezed, cash continues to be hoarded at the expense of investment, and the stock market continues to be manipulated through share-backs and dubious figures.

The above is just a quick look at our situation, but I just don’t see how we can climb back to a healthy normal economy in the context of the above—and there is much I haven’t touched on such as student loan debt and the excessive amounts we spend on National Security.

But, now I had better stop before I drive you to drink, drugs—or to jump out of the window. Actually, statistically, you are probably already on drugs—legal or otherwise (the U.S. is the most drugged nation in the world)—and, speaking as an Irishman, I find it only natural that you drink. So all I can say is—stay away from windows!


Monday, April 21, 2014

April 21 2014: THE COLLAPSE. WE ARE NO LONGER A DEMOCRACY. OUR CONSTITUTION HAS BEEN HIJACKED. WHO SAYS? I DO—AND A PRINCETON RESEARCH TEAM BACKED UP BY A WHOLE LOT OF ALL TOO CONVINCING DATA

[House Minority Leader] Nancy Pelosi was on Jon Stewart a few weeks ago, and he asked, "Well, don't you need to make sure that the laws are working?"

And she said, "No, that's not my responsibility, my responsibility is just to pass the laws."

So where does oversight come in? Given Congress’s ever increasing tendency to block and micromanage, it’s hard to blame the executive alone for government ineffectiveness. We have a structural problem here. In fact, we have structural problems just about everywhere.


The Rule of NobodyGovernments come in all shapes and sizes—and operate at different levels (federal, state and local). Some are reasonably honest and highly effective. Others are corrupt and incompetent. A third group are moderately corrupt, but work well. Whatever be the situation, whether we like it or not—I find it hard to overstress that point—we need government. It is—or should be—no more than us cooperating for the common good. In practice—because we have a tendency to be singularly misinformed—and to elect the mediocre—the results have a tendency to disappoint profoundly.

The trick is to make government work for us. Currently, we don’t seem to be able to. Could we? Given that government works extraordinarily well in some countries, the answer has to be in the affirmative—but not without changing the system. The structure we have is corrupt,

There are some who believe that the private sector is always the better alternative. For much of the economy, it clearly is (I have no desire to see the government selling hamburgers) but given that the financial part of the private sector was that the principal cause of the Great Recession—and that scarcely a day goes by without a major corporation being found guilty of malfeasance—I take issue with that opinion as an absolute. There are some areas where government performance is consistently superior—healthcare being the obvious one. http://victororeillyIn fact, at a certain level, it is hard to tell the differences between government and corporate cultures (and bureaucracies)—except that we have even less chance of checking e.corporate power in the U.S. today. It is now literally out of control—because it funds much of our political system. The results speak for themselves.

Philip K. Howard has just written a new book, THE RULE OF NOBODY, on one of the reasons why American democracy is so dysfunctional. Let me quote briefly from a Huffington post article.

HUFF POST: One of the phrases that struck me in the book is that "American Democracy is basically run by dead people." What do you mean by that?

PKH: The important decisions made by our government have been preset in legal concrete by statutes and regulations written in past generations and not altered for decades.

HUFF POST: You spend much of the book criticizing regulation. What are some examples of regulations being harmful?

PKH: What I criticize is not the idea of regulation. I think that government oversight is vital in a crowded society to make sure that nursing homes and day care centers are adequate, [along with] other important regulatory goals.

What I criticize is this idea of micro-regulation, where you impose literally thousands of rules onto things like nursing homes. What happens is that they are counterproductive, because the people in the nursing homes spend their time complying with the rules instead of making life nice for the residents. There's a fair body of evidence that it is counterproductive, and other countries that have moved over to a more general principles-based type of regulation where you go for goals to have a nursing home that respects the dignity of the residents and offers a home-like setting.

Those forms of regulation produce dramatically better nursing homes than this kind of micro-regulation strategy that we have adopted in the United States.

The United States is like an obsessive-compulsive. The Constitution was 10 pages long, the Volcker rule is 950 pages. Words can't create fairness. It's goals and principles and people applying them that creates fairness and adequacy. We've tried to create a form of automatic government that isn't working.

HUFF POST: You say "No one in Washington is asking what the right thing to do is." What do you mean by that, specifically?

PKH: I think Washington has become its own bubble, its own culture, separated by the Beltway from the rest of the country. It's mutated into a perpetual tug of war, where political leaders get up in the morning not trying to do anything constructive but just make the other side look bad.

The other people in Washington, lawyers, lobbyists and journalists, play their role in dealing with this perpetual tug of war, and nothing much happens. It's this paralytic political structure without any significant connection to the real needs of the country. I think it's a profoundly sick and dysfunctional political culture much worse today than it was even 30 years ago.

I don't think the problem is so much bad leadership or even polarized politics. I think those are symptoms of a structural powerlessness, where the combination of the accretion of law, the influence of special interest money, has made it so hard to change a law or to change directions that people have really given up.

HUFF POST: Lastly, do you see any signs of hope?

PKH: The hope is not within Washington or within the political system ... It's in kind of a swamp. I think the hope is in the American people. If you look at the surveys and polls, the American people are almost universally disgusted with the way the system of government works. If you poll on specific issues, you'll get surprising responses on things like global warming or the need to make justice more reliable or other issues which the parties are deeply divided on but which the public seems to be more than willing to accept a change in direction.

The opportunity is to mobilize the public behind big change in a way that allows our country to meet the challenges of this new century, and I think the public is going to get there a lot sooner than Washington is.

In essence, Howard believes that only a major—and highly visible—crisis  will force change. I tend to agree with him, but you would have to wonder how significant such a crisis would have to be to initiate the kind of mass movement which could force change—particularly given the power of the status quo. They control the bulk of the nation’s wealth, the political system, virtually all our major corporations, much of academia, the media, key portions of the internet, the armed services (by way of the political system), the legal system up to and including the Supreme Court—and the most sophisticated surveillance and law enforcement system the world has ever seen.

To force the kind of fundamental overhaul that the U.S. clearly needs will be a task that even Hercules might decline.

It is also worthwhile noting that we have just been through a major crisis—the Great Recession—which wreaked economic havoc on this country—but which has resulted in almost no change except to make the malefactors even wealthier at the expense of the average American (and the too-big-to-fail banks are now even larger).

In point of fact, we are going through another major crisis at present, but it is so all encompassing, and the consequences are going to be so horrendous, that most of us don’t want to recognize it, let alone think ) about it. It’s called THE LONG (AND NOT SO SLOW) COLLAPSE OF THE AMERICAN WAY OF LIFE (FOR MOST AMERICANS).

It really needs a catchier title to catch on. END OF DAYS has already been used. Given the massive transfer of wealth from average Americans to the ultra-rich over the last third of a century, THE GREAT HEIST would seem appropriate. Still, let’s keep it simple. We’ll settle for THE COLLAPSE.

Starring?

Why you, of course. This is even better than 3-D. It’s real life (doubtless patented already).

Rubbish, I hear you say. Things will be back to normal real sooner now.

I hope you are right. But just consider.

  • GOVERNMENT PARALYIS. We have a government that has been  rendered largely incapable of doing much that is clearly necessary—and where Congress is largely financed and controlled by corporations which are, in turn, controlled by by the ultra-rich (who constitute about 0.1 percent of the population). The U.S. may have the trappings of democracy—but, in practice, it is nothing of the sort. That is not just my opinion. A recent scientific study by Princeton researchers Martin Gilens and Benjamin I. Page confirms just that. Currently, it is a plutocracy run by the ultra-rich for their own benefit. Though the ultra-rich cannot always control a situation—in the sense of determining that the outcome will be precisely what they want--they can always influence it (because they have money which—in turn—buys access) and they can almost always block—or delay for extended periods of time, normally through the Republican party. This has now moved so far to the right, it is now quite blatantly—and unashamedly—the political tool of the ultra-rich (a sad state for a once great party). Since the status quo suits the ultra-rich, they favor gridlock, and are largely the cause of it.
  • THE DEMONIZATION OF GOVERNMENT. The ultra-rich and the Republicans have also worked hard to demonize government over the last 30 plus years—with considerable success. I don’t pretend for a moment that government is flawless (or anywhere close—but then neither are corporations) but the effect of such sustained propaganda has been to undercut government’s credibility and effectiveness—and thus its ability to do the job it is there to do. For instance, though there are laws against monopolies, they are largely not enforced. Similarly, though the Great Recession was largely caused by financial institutions—and involved substantial illegal behavior—there have been virtually no criminal prosecutions (a truly extraordinary situation). We really do have a law for the rich and a law for the poor—and it does not speak well of us that we tolerate it. But, if the Princeton study is to be believed, what the American public as a whole wants is largely irrelevant. They found "the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy." Put another way, our opinion does not count. That is not the way democracy is supposed to work—even U.S. style representative democracy.
  • GOVERNMENT REFUSAL TO PLAN. We refuse to plan—largely for ideological reasons—despite the fact that virtually all our more successful competitors plan (because, demonstrably, it works). It helps to know where you are going if you want to work out how to get there. Successful planning doesn’t mean the government does everything—or micromanages. It merely sets common goals for the country as a whole. Mind you, if your are indifferent to the fate of the population as a whole—as seems to be the case where many of the ultra-rich are concerned—then it makes sense to limit your planning to your own interests. But, it is shabby behavior at best—albeit all too common.
  • WEALTH & POWER IN THE HANDS OF THE ULTRA RICH. Virtually all the wealth and power in the county is in the hands of the ultra-rich who (subject to some exceptions) are utterly opposed to reform—and who largely control our political system.
  • RIGGED ECONOMIC SYSTEM. We have an economic system which is rigged to favor the ultra-rich in innumerable ways.
  • RIGGED & COMPLEX TAX SYSTEM. We have a tax system which is excessively complicated and grossly unfair—and blatantly written to favor the ultra-rich.
  • ECONOMY EXCESSIVELY FINANCIALIZED. The U.S. economy is heavily financialized with all its associated costs. Such costs include everything from egregious bank charges to health insurance to high prices resulting from speculation. The common denominator is that financialization does not add real value. It is primarily a series of ways to extract resources from the real economy. Economists call this ‘rent seeking,’ and it acts as a de facto tax on economic activity—and serves to distort it negatively. Ironically, and sadly, financialization does not work to the benefit of either employment or small business. In fact, as financialization has increased, our economic health has decreased.
  • ECONOMY EXCESSIVELY DEBT BASED. We have an economy which is structured to be massively debt based at all levels—with all  its associated disadvantages and pressures. This high level of debt is compounded by the financial institutions charging high interest rates despite being able to obtain capital at minimal interest (thanks to the Federal Reserve).
  • MINIMAL SAVING IN CONTRAST TO COMPETITION. We save minimally compared to our competitors. Low savings make us less resilient and less productive. For instance, over the last three decades, Germany, France, Austria and Belgium have maintained household savings rates of between 10 and 13 percent—while the U.S. rate has varied from about 5 percent to zero. Given the current sustained downward pressure on pay, the prognosis for U.S. savings is not good. That puts us at a competitive disadvantage.
  • U.S. NATIONAL INTERESTS DIVERGING FROM CORPORATE INTERESTS. The interests of major U.S. corporations—many of whom now trade globally—are becoming increasingly divorced from the national interest. Consequences include massive exporting of jobs, cash being hoarded abroad, and expertise being given to potential competitors to gain short-term advantage. Above all, many major corporations today seem to lack any sense of either moral or social responsibility.
  • CORPORATE CULTURE DEEPLY FLAWED. Manifestations of this include greed, short termism, lack of concern for employees, indifference to local communities, over-charging, indifference to product quality, poor customer service, excessive senior executive pay, and lack of either social responsibility or a moral compass.
  • CORPORATE POWER VIRTUALLY UNCHECKED. Corporate power is now excessive, but is neither checked nor balanced by either government or unions—and the Supreme Courts seem to favor it actively. This is socially disastrous.
  • CORPORATE HEALTH SYSTEM. U.S. healthcare is largely based upon private insurance companies, drug companies, hospitals, doctors, and medical staff. The results have been disastrous in both healthcare and financial terms. Overall, we enjoy poorer health than the populations of other developed nations, but pay between 50 and 100 percent more for it. This is one area where the track record is that the government does a better job than the private sector. Over-paying to the extent Americans do means that other important needs relating to the quality of our lives are neglected.
  •  CORPORATIONS TENDENCY TOWARDS MONOPOLY. Competition is fundamental to a healthy free market. The U.S. is far from a free market. Instead, sector after sector is dominated by an increasingly small number of corporations financed by a small number of financial institutions. The consequences of such a lack of competition are extensive and include market manipulation, overcharging, poor service, and underinvestment.
  • CORPORATION USE OF LEGAL SYSTEM TO RESTRAIN TRADE. Contrary to corporate propaganda, the U.S. is not a fully free market—or even close. Instead not only is it oligopolistic, but corporations have learned to game the legal system to minimize or eliminate competition. Such behavior is extensive. The best current example concerns Tesla which wants to sell directly to consumers, but is prevented from doing so in many states because it is legally mandated that independent car dealerships must be used.
  • CORPORATIONS UNDERINVESTING & CASH HOARDING. Major U.S. corporations are underinvesting massively—neglecting everything from plant and equipment to research and development to employee training. Instead they are engaged in share buybacks, cash hoarding, and tax avoidance. 
  • CORPORATIONS PAYING LESS & LESS TAX. Where tax is concerned, corporations are contributing less and less—while receiving ever more grants and subsidies.
  • MAJOR YOUTH UNEMPLOYMENT. We have massive youth unemployment—and no strategy for eliminating it.
  • MAJOR LONG-TERM UNEMPLOYMENT. We have massive long-term unemploymentand largely ignore the problem.
  • AUTOMATION THREAT TO JOBS. Ever increasing automation is likely to decrease job creation.—but we have no plan for how to cushion the impact.
  • EARNING POWER DECREASING. The well-paid middle class job is vanishing, and is being replaced by low wage jobs, In fact, the earning power of most Americans has been virtually static for a third of a century—and is now in decline.
  • COSTS ARE INCREASING. Housing, healthcare, education, food, gas and numerous other costs are steadily increasing—though scarcely showing up in our official statistics. Clearly, the juxtaposition of low pay, declining household income, and increasing costs is unsustainable—and cannot work to the benefit of the economy as a whole.
  • VANISHING PENSIONS. The defined pension is vanishing fast.
  • SOCIAL SECURITY UNDER ATTACK. Social Security is under attack.
  • MASSIVE STUDENT DEBT. The young are crushed by massive student debt. It’s about $1.2 trillion as matters stand—and going nowhere but up. Meanwhile, youth unemployment is worryingly high—and those fortunate enough to be employed are increasingly finding the pay is low.
  • UNAFFORDABLE COLLEGE & UNIVERSITY. Third level education is becoming unaffordable. Its cost has increased much faster than inflation—particularly where the private sector is concerned. There, academic institutions are increasingly becoming corporate in their behavior with the earning power of a few being massively increased while tenure is reduced—and adjunct professors being paid minimally.
  • INFERIOR EDUCATION. 12K education is largely inferior to that of our competitors—and we are not gaining ground. This, in turn, is leading to the creation of a massive poorly educated underclass—which we seem quite content to tolerate. Such a situation is socially divisive, deprives society of human potential, and turns what should be a primary asset into a massive cost to society. 
  • HOUSING BECOMING UNAFFORDABLE. The cost of housing—whether bought or rented—largely thanks to financial institutions investing in private dwellings—is becoming increasingly unaffordable.
  • CARS BECOMING UNAFFORDABLE. Automobiles are becoming increasingly unaffordable.
  • MASSIVE POLLUTION. Both our environment and our food chain are massively polluted. The health consequences—insofar as we know them—are severe.
  • SUBSTANDARD FOOD. We have an industrial agricultural system which relies on increasingly expensive fertilizers and GM seeds—and which produces nutritionally sub-standard food. There is increasing evidence that GM foodstuffs may have negative health implications. There are other severe weaknesses in our food chain including Big Food’s excessive use of salt, sugar, and fats. In addition, there is increasing evidence that processed food, in itself, is unhealthy—and that we should be eating fresh food as much as possible.
  • POLLUTED WATER SUPPLIES. We have serious problems with both the quality and availability of water. Even where it is available, it is contaminated with meds and toxic chemicals (which, mostly, we don’t test for). Further, our current water treatment facilities cannot eliminate such contaminants even when we know they are there.
  • LIVE SICKER & DIE YOUNGER. We live sicker and die sooner than the populations of other developed nations—by several years. Chronic conditions are now common—and Canadians, for instance, live several years longer than Americans.
  • UNDERINVESTMENT IN INFRASTRUCTURE. Our infrastructure has been neglected for decades and is crumbling. It will cost trillions of dollars to bring up to standard.
  • MINIMAL PUBLIC TRANSPORT. We largely lack effective public transport. This places a steadily increasing cost burden on most Americans (at a time when earning power is in decline), massively increases pollution and congestion, and increases our trade deficit.
  • INADEQUATE SOCIAL SAFETY NET. Our social safety net is entirely inadequate—and non-existent in some situations. 
  • BAD LABOR RELATIONS & MINIMAL WORKER RIGHTS. We have the worst labor relations in the developed world—and worker rights are minimal to non-existent. Management’s attitude towards workers is mostly adversarial and arbitrary. The European concept of working with unions—codetermination—is neither understood nor practiced.
  • DECLINING PRODUCTIVITY. U.S. productivity is in decline. Though it has grown by an average of 2.5% a year since 1945, it has averaged only 1.1% since 2011 (and even then the statistics are suspect).
  • BAD NUMBERS LEADING TO BAD DECISIONS. We have serious problems with our statistical base in general—which leads to bad decision-making. For instance our official inflation statistics don’t correspond with what most of us actually experience.
  • AN UNJUST AND EXPENSIVE PRISON SYSTEM. We incarcerate far too many people for too long for too little reason at vast financial and social cost—while largely failing to imprison corporate criminals. Our system of justice is manifestly unjust.
  • EXCESSIVE MILITARY EXPENDITURE. We spend way too much on National Security. The total is in excess of $1 trillion if all the items which should be in the National Security Budget are factored in,
  • CLIMATE CHANGE. We have climate change to deal with—and are largely ignoring it. 
  • STRESS. U.S. stress levels—as measured by the PERCEIVED STRESS SCALE are at unprecedented heights. The primary reason for this seems to be economic and the lack of a support system enhances this. High stress has decidedly negative side effects and, in particular, undermines your immune system. It is almost certainly part of the reason why our longevity is significantly lower than that of other developed countries—and why so many of us suffer from a chronic condition.
  • CURRENT AMERICAN BUSINESS MODEL WORKS AGAINST INTERESTS OF MOST. We have created and operate a greed and short-term based economic system—the ABM (American Business Model) which results in insecurity, stress, misery, worry, poverty and homelessness on an unprecedented scale by the standards of the rest of the developed world—and which makes too many of those enmeshed in it a cost to society rather than contributors. This makes no economic sense, isn’t delivering what the American people needs, and is morally wrong. It is also the primary reason why the U.S. is in decline in both relative and absolute terms. The ultra-rich—who are primarily responsible for this situation—will be largely unaffected. They are insulated from the lives of most Americans and have the resources to live and do where and what they want.

But every society has problems!

Very true—but what most Americans don’t seem to understand is that there are now many countries which have significantly fewer problems than we do—and where the quality of life is superior. This raises a fundamental point: What is the purpose of this decision to band together to constitute which we call “a country?” It has to be for the advantage of all. “We the people” means ALL of us—not 0.1 percent.

Currently it clearly does not.

Go look. The evidence and the answers are out there.