"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Posts Tagged ‘Global Economic Collapse’

Is Every Day Black Friday? How Climate Inaction And Hypermaterialism Betray Our Children

In Uncategorized on December 9, 2013 at 5:32 pm

https://i2.wp.com/i.dailymail.co.uk/i/pix/2013/11/29/article-2515454-19B6C6B500000578-856_1024x615_large.jpg

Oldspeak: “In the wake of the latest hyperconsumption fueled “holiday” complete with shootings, pepper spraying and beatings, it is useful to consider the implications of the continuation of our ecocidal, unsustainable carbon-intensive civilization.  Every day really is black friday. We’re constantly and relentlessly exhorted to consume more and more and more. Consumption is Citizenship.  Consumption is Love.  Consumption is Happiness. Consumption is Freedom. Consumption is Safety. Consumption is Security. Consumption is Expression. Consumption is Creativity. Consumption is Well-Being.  Consumption is Connection with Others. it is the most widely practiced way in which we are encouraged to participate in society. This is the ethos that animates it.  All our structures of power depend on rapacious consumption. And this is seen as normal. We are committed to status quo business as usual.  There are no real efforts to de-grow economies, reduce wasteful consumption, live within our planets’ means and intelligently manage her remaining and rapidly depleting natural resources.   This can only continue for so long.  Infinite growth is impossible on a finite planet. At some point, this global ponzi scheme will collapse, only this time the planet will collapse with it .”  -OSJ

We cannot stop catastrophic climate change — in the long term and possibly even the medium-term — without a pretty dramatic change to our overconsumption-based economic system. We have already overshot the Earth’s biocapacity — and the overshoot gets worse every yearWe created a way of raising standards of living that we can’t possibly pass on to our children. We have been getting rich by depleting all our natural stocks — water, hydrocarbons, forests, rivers, fish and arable land — and not by generating renewable flows. You can get this burst of wealth that we have created from this rapacious behavior. But it has to collapse, unless adults stand up and say, ‘This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate …’ Real wealth is something you can pass on in a way that others can enjoy”. –Joe Romm

By Joe Romm @ Climate Progress:

Black Friday has become an orgiastic celebration of hyper-materialism.

Black Friday is a sort of reverse “Hunger Games,” an annual ritualized competition, but one built around overabundance, rather than scarcity. It is perhaps the inevitable outcome of a country whose citizens are commonly referred to as “consumers.”

So what better time to think about how the global economic system is a Ponzi scheme, an utterly unsustainable system that effectively takes wealth from our children and future generations — wealth in the form of ground water, arable land, fisheries, a livable climate — to prop up our carbon-intensive lifestyles.

We cannot stop catastrophic climate change — in the long term and possibly even the medium-term — without a pretty dramatic change to our overconsumption-based economic system. We have already overshot the Earth’s biocapacity — and the overshoot gets worse every year.

footprint-biocapacity-e1355415565855
“A quarter of the energy we use is just in our crap,” physicist Saul Griffith explains in his detailed discussion of our carbon footprint. You can watch the MacArthur genius award winner soberly dissect his formerly unsustainable lifestyle here and here.

Or listen to the MSNBC interview of “Reverend Billy Talen of the Church of Stop Shopping.” Seriously (sort of). Or you can read the Onion’s black humor, “Chinese Factory Worker Can’t Believe The Shit He Makes For Americans.”

Children1-300x225The tragic irony is that much of this holiday shopping is supposedly for our kids — and yet this overconsumption is a core part of our climate inaction, which, as president Obama has said, is a betrayal of our children!

Now it’s true, as I’ve said, that if we ever get really serious about avoiding catastrophic climate change, we could dramatically cut national and global emissions for decades under the auspices of our basic economic system. You could use a high and rising price for CO2 plus smart regulations to encourage efficiency at a state and national level.

Also, the end to hyper-consumerism is not something amenable to legislation. I’ve argued that it is most likely to come when we are desperate — when the reality that we are destroying a livable climate is so painful that we give it up voluntarily, albeit reluctantly, like a smoker diagnosed with early-stage emphysema. Bill Clinton didn’t become vegan until after he experienced serious heart trouble — twice.

Climate science is clear that inaction is suicidal (see here). That’s why “virtually all” climatologists “are now convinced that global warming is a clear and present danger to civilization,” as Lonnie Thompson has put it.

A recent must-read New York Times opinion piece by an Iraqi war veteran, “Learning How to Die in the Anthropocene,” explains that a quantum shift in mindset is inevitable:

The human psyche naturally rebels against the idea of its end. Likewise, civilizations have throughout history marched blindly toward disaster, because humans are wired to believe that tomorrow will be much like today — it is unnatural for us to think that this way of life, this present moment, this order of things is not stable and permanent. Across the world today, our actions testify to our belief that we can go on like this forever, burning oil, poisoning the seas, killing off other species, pumping carbon into the air, ignoring the ominous silence of our coal mine canaries in favor of the unending robotic tweets of our new digital imaginarium. Yet the reality of global climate change is going to keep intruding on our fantasies of perpetual growth, permanent innovation and endless energy, just as the reality of mortality shocks our casual faith in permanence.

The biggest problem climate change poses isn’t how the Department of Defense should plan for resource wars, or how we should put up sea walls to protect Alphabet City, or when we should evacuate Hoboken. It won’t be addressed by buying a Prius, signing a treaty, or turning off the air-conditioning. The biggest problem we face is a philosophical one: understanding that this civilization is already dead. The sooner we confront this problem, and the sooner we realize there’s nothing we can do to save ourselves, the sooner we can get down to the hard work of adapting, with mortal humility, to our new reality.

The choice is a clear one. We can continue acting as if tomorrow will be just like yesterday, growing less and less prepared for each new disaster as it comes, and more and more desperately invested in a life we can’t sustain. Or we can learn to see each day as the death of what came before, freeing ourselves to deal with whatever problems the present offers without attachment or fear.

In the words of British poet Matthew Arnold, we are: “Wandering between two worlds, one dead / The other powerless to be born.”

On the subject of our global Ponzi scheme, New York Times columnist Tom Friedman interviewed me for a column back in 2009:

“We created a way of raising standards of living that we can’t possibly pass on to our children,” said Joe Romm, a physicist and climate expert who writes the indispensable blog climateprogress.org. We have been getting rich by depleting all our natural stocks — water, hydrocarbons, forests, rivers, fish and arable land — and not by generating renewable flows.

“You can get this burst of wealth that we have created from this rapacious behavior,” added Romm. “But it has to collapse, unless adults stand up and say, ‘This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate …’ Real wealth is something you can pass on in a way that others can enjoy.”

The adults, in short, are not standing up. Sadly, most haven’t even taken the time to understand that they should.

And so every generation that comes after the Baby Boomers is poised to experience the dramatic changes in lifestyle that inevitably follow the collapse of any Ponzi scheme.

Regular readers are familiar with this metaphor of a global Ponzi scheme. But it bears repeating on Black Friday since it is not just a metaphor, but a central organizing narrative of how to think about the fix we have put ourselves in. As an aside, since some shopping is unavoidable, remember that Black Friday is 50 times more carbon-intensive than Cyber Monday.

What exactly is a Ponzi scheme? Wikipedia (had a good entry:

A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from profit. The term “Ponzi scheme” is used primarily in the United States, while other English-speaking countries do not distinguish colloquially between this scheme and pyramid schemes.

The Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The perpetuation of the high returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors in order to keep the scheme going.

In our case, investors (i.e. current generations) are paying themselves (i.e. you and me) by taking the nonrenewable resources and livable climate from future generations. To perpetuate the high returns the rich countries in particular have been achieving in recent decades, we have been taking an ever greater fraction of nonrenewable energy resources (especially hydrocarbons) and natural capital (fresh water, arable land, forests, fisheries), and, the most important nonrenewable natural capital of all — a livable climate.

See also a new study “The Monetary Cost of the Non-Use of Renewable Energies,” which finds that “every day we delay substituting renewables for fossil fuels,” every day “fossil raw materials are consumed as one-time energy creates a future usage loss of between 8.8 and 9.3 billion US Dollars.” Oil and coal are essentially too valuable to burn even ignoring the cost of their climate-destroying emissions.

The system is destined to collapse because the earnings, if any, are less than the payments.

See, for instance “Shocking World Bank Climate Report: ‘A 4°C [7°F] World Can, And Must, Be Avoided’ To Avert ‘Devastating’ Impacts”).

Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities.

Yes, well, the authorities (i.e. world leaders, opinion makers, the cognoscenti) haven’t been doing much interrupting over the past two to three decades since, unlike a typical Ponzi scheme, they are heavily invested in the scheme and addicted to the returns!

Knowingly entering a Ponzi scheme, even at the last round of the scheme, can be rational in the economic sense if a government will likely bail out those participating in the Ponzi scheme.

But Friedman quotes Glenn Prickett, senior vice president at Conservation International, explaining, “Mother Nature doesn’t do bailouts.”

We aren’t all Madoffs in the sense of people who have knowingly created a fraudulent Ponzi scheme for humanity. But given all of the warnings from scientists and international governments and independent energy organizations over the past quarter-century (see for instance IEA’s Bombshell Warning: We’re Headed Toward 11°F Global Warming and “Delaying Action Is a False Economy”) — it has gotten harder and harder for any of us to pretend that we are innocent victims, that we aren’t just hoping we can maintain our own personal wealth and well-being for a few more decades before the day of reckoning. Après nous le déluge.

In short, humanity has made Madoff look like a penny-ante criminal.

By enriching the authorities, as noted, we encouraged those with the most power to solve the problem to do nothing. Heck, the only way in which the global economy hasn’t become a Ponzi scheme is that everything being done is perfectly legal!

By most enriching those who did the most plundering, we enabled them to fund lobbying and disinformation campaigns to convince substantial fractions of the public and media that there is no Ponzi scheme — that global warming is “too complicated for the public to understand” and nothing to worry about.

And by “paying ourselves” with the wealth from future generations — indeed, from the next 50 generations and next 100 billion people to walk the earth (see NOAA stunner: Climate change “largely irreversible for 1000 years,” with permanent Dust Bowls in Southwest and around the globe) — we cleverly took advantage of victims not yet born, those not able to even know they were being robbed.

Madoff is reviled as a monster for targeting charities. We are targeting our own children and grandchildren and on and on. What does that make us?.

 

 

U.N. Weather Agency: “We need to act now… time is not on our side.”- Atmospheric Greenhouse Gas Concentrations At Record High. Again.

In Uncategorized on November 12, 2013 at 1:18 pm

By absorbing much of the added heat trapped by atmospheric greenhouse gases, the oceans are delaying some of the impacts of climate change. Photo: WMO/Olga Khoroshunova

Oldspeak: “Heat-trapping gases from human activities have upset the natural balance of our atmosphere and are a major contribution to climate change… Our climate is changing, our weather is more extreme, ice sheets and glaciers are melting and sea levels are rising.  We need to act now, otherwise we will jeopardise the future of our children, grandchildren and many future generations. Time is not on our side.-WMO Secretary-General Michel Jarraud.

“Translation: “We’re fucked. But our children and grandchildren are exponentially more fucked. ” No one in positions of power anywhere in the 1st world “advanced” nations  is interested in acting now. They’re interested in “extend and pretend”. “Delay and Pray.” They meet at ineffectual climate conferences to negotiate  incremental decades long rates of change, not the radical, revolutionary change necessary right now. There is no implementable global response to the existential threats that our current carbon-nuclear based systems are creating.  There’s no profit in it. The profit is in tar sands. Methane (a.k.a. “Natural”) gas. Coal.  Efforts are underway to expand their extraction and exploitation in previously inaccessible areas of the planet.  These systems require our destruction for its continued sustenance. We are hurtling headlong toward global ecological collapse.  So, enjoy what tolerable time we have left on this dying world, as in short order, life on earth will be come fully intolerable.  Expect the worst, because it’s coming. Sandy & Haiyan are just a primer. Our infinite growth based civilization incontrovertibly assure our destruction.” -OSJ

 

By U.N. News Center:

The amount of greenhouse gases in the atmosphere reached a record high in 2012, continuing an upward trend which is driving climate change and which will shape the future of the planet for hundreds and thousands of years, according to the United Nations World Meteorological Organization (WMO).

The agency’s annual Greenhouse Gas Bulletin shows that between 1990 and 2012, there was a 32 per cent increase in radiative forcing – the warming effect on the climate – because of carbon dioxide (CO2) and other heat-trapping long-lived gases such as methane and nitrous oxide.

Carbon dioxide, mainly from fossil fuel-related emissions, accounted for 80 per cent of this increase, WMO stated in a news release. The atmospheric increase of CO2 from 2011 to 2012 was higher than its average growth rate over the past 10 years.

What is happening in the atmosphere, said the Geneva-based WMO, is “one part of a much wider picture.” Only about half of the CO2 emitted by human activities remains in the atmosphere, with the rest being absorbed in the biosphere and in the oceans.

The latest findings “highlight yet again how heat-trapping gases from human activities have upset the natural balance of our atmosphere and are a major contribution to climate change,” said WMO Secretary-General Michel Jarraud.

He recalled that the UN-backed Intergovernmental Panel on Climate Change (IPCC) stressed in its recent Fifth Assessment Report that atmospheric concentrations of carbon dioxide, methane, and nitrous oxide have increased to levels unprecedented in at least the last 800,000 years.

“As a result of this, our climate is changing, our weather is more extreme, ice sheets and glaciers are melting and sea levels are rising,” said Mr. Jarraud.

He underscored that limiting climate change will require large and sustained reductions of greenhouse gas emissions. “We need to act now, otherwise we will jeopardize the future of our children, grandchildren and many future generations,” said Mr. Jarraud. “Time is not on our side,” he added.

The Greenhouse Gas Bulletin reports on atmospheric concentrations – and not emissions – of greenhouse gases. Emissions represent what goes into the atmosphere, the agency pointed out. Concentrations represent what remains in the atmosphere after the complex system of interactions between the atmosphere, biosphere and the oceans.

At the same time, the Emissions Gap Report 2013, involving 44 scientific groups coordinated by the UN Environment Programme (UNEP), urges wide-ranging global action to close the emissions gap.

If the international community fails to take action, the report warned, the chances of remaining on the least-cost path to keeping global temperature rise below 2 degrees Celsius this century will quickly diminish and open the door to a range of challenges.

Under the UN Framework Convention on Climate Change (UNFCCC), governments have agreed to limit the global temperature rise to 2 degrees Celsius to avoid the worst impacts of climate change.

The report, which was released yesterday as leaders prepare to meet for the upcoming UN Climate Change Conference in Warsaw, finds that although pathways exist that could reach the 2-degree Celsius target with higher emissions, not narrowing the gap will exacerbate mitigation challenges after 2020.

This will mean much higher rates of global emission reductions in the medium term; greater lock-in of carbon-intensive infrastructure; greater dependence on often unproven technologies in the medium term; greater costs of mitigation in the medium and long term; and greater risks of failing to meet the 2-degree Celsius target.

“As the report highlights, delayed actions mean a higher rate of climate change in the near term and likely more near-term climate impacts, as well as the continued use of carbon-intensive and energy-intensive infrastructure,” said UNEP Executive Director Achim Steiner.

“This ‘lock-in’ would slow down the introduction of climate-friendly technologies and narrow the developmental choices that would place the global community on the path to a sustainable, green future.

“However,” he added, “the stepping stone of the 2020 target can still be achieved by strengthening current pledges and by further action, including scaling up international cooperation initiatives in areas such as energy efficiency, fossil fuel subsidy reform and renewable energy.”

 

 

The Struggle To Save Our Planet Heats Up

In Uncategorized on April 25, 2013 at 1:46 pm

Adapting to Climate ChangeOldspeak: “To get to the root of the issue, it becomes necessary to analyze the whole economic system of production and exchange of goods and services—that is, capitalism. Only by doing this can we hope to formulate an effective strategy to combat climate change and thereby recognize that ecological and social justice are inseparably connected to each other, via an organized, grassroots and global challenge to the capitalist social order…

One doesn’t need to be an anti-capitalist to take part in this struggle, but one does need to recognize that unless the pendulum of social power swings back toward the working people in the U.S. and around the world, and that limits and regulations are placed on the activities of corporate power, we have no hope of saving our world. This struggle is not really about technology or which renewable energy models should be deployed or whether this or that politician or this corporation or that CEO is more or less evil than the other. It’s not about things or people at all—it’s about relationships. It’s about democracy, which is itself about social power, and the relationships it presumes.

The power of the oceans, the power of scientific rationality, the power of the tides and hurricane-force winds are self-evidently not enough to persuade capitalists to act. The only force strong enough to do that is the organized force of the people. We must take the place of gravity to pull the pendulum of contending class forces—wrenched rightward by 30 years of neoliberalism—back toward our side.” –Chris Williams.

YES! The root of the issue is capitalism. We have to stop nibbling around the edges. We have to recognize that capitalism in its current globalized and unrestrained form is fundamentally at odds with Democracy, human and natural rights. We have to have an honest critical discussion about global capital and how it’s destroying our planet. We must reassert our sacred commitment, as our ancestors did for millennia, to be custodians of our earth mother, not her rapists. We must recognize that infinite growth is impossible on a finite planet. The global capitalist enterprise is collapsing and blowing up all around us, one need only look to texas and Bangladesh and the explosion in unemployment and poverty, the collapse of ecosystems, to see what’s happening.  We cannot keep dumping wasteful trillions into failing, obsolete, toxic, fossil and nuclear fuel based infrastructure that is destroying and poisoning our planet. We have to fundamentally rethink how we organize our civilization and economy. The systems we have are not working.

By Chris Williams @ Z Magazine:

Capitalism stands as a death sentinel over planetary life. Recent reports from institutions, such as the World Bank, detail how, as a result of human activity, we are on track for a 4° Celsius increase in average global temperatures. Should this come to pass, the Earth would be hotter than at any time in the last 30 million years; an absolutely devastating prognosis that will wipe out countless species as ecosystems destabilize and climate becomes a vortex of erratic, wild weather events.

Despite this Americans, suffered through an election campaign in which climate change literally wasn’t mentioned—at least until the final weeks, when a hurricane forced the presidential candidates to acknowledge it.

Even as the World Bank published its report—with the conclusion that avoiding a 4° temperature increase was “vital for the health and welfare of communities around the world”—bank officials were nevertheless still handing out loans to construct more than two dozen coal-fired power plants to the tune of $5 billion.

In direct contrast to politicians and the media, fully 80 percent of Americans believe that climate change will be a serious problem for the United States unless the government does something about it—with 57 percent saying the government should do a “great deal” or “quite a bit.”

Even for the 1 in 3 Americans who say they are wary of science and distrust scientists, 61 percent now agree that temperatures have risen over the last 100 years. Commenting on the new poll, Stanford University social psychologist and pollster Jon Crosskick wrote, “They don’t believe what the scientists say, they believe what the thermometers say…. Events are helping these people see what scientists thought they had been seeing all along.”

This background of overwhelming public concern helped situate the national demonstration in Washington, DC on February 17, against the building of the Keystone XL tar sands pipeline from Canada to Texas. If built, the pipeline will carry 800,000 barrels a day of highly-polluting tar sands oil, effectively dealing a death blow to hopes of preventing rampant climate change. The demonstration added significance as activists attempted to draw a line in the sand and pose the first big litmus test for the second term of Barack Obama.

Given that an overwhelming majority of Americans, and even most people hostile to climate science, are in favor of action, why is it that the overwhelming majority of politicians—who presumably are subject to the same weather as the rest of us—can’t seem to see the need? Why aren’t our elected representatives proposing serious measures to prevent it from getting worse?

How one answers this question is not one of semantics. Rather, it is of decisive importance because it determines how one should fight and with whom one should forge alliances. Unfortunately, it is a question that Bill McKibben, cofounder of 350.org and a key organizer of the February 17 demonstration, has struggled with, but not conclusively resolved. His confusion is evidenced by the title of an article he wrote in January: “Our Protest Must Short-Circuit the Fossil Fuel Interests Blocking Barack Obama”—implying that Obama would do something if he could.

The momentum generated from this demonstration may serve as the launching pad for a sustained campaign that begins to stitch together the myriad forces fighting locally around the country, transforming previously isolated or single-issue initiatives and groups into a broad united front for climate justice that draws in other forces, such as unions.

This was the position of Big Green groups like the Sierra Club. Even as it pledged for the first time to take part in civil disobedience, its executive director, Michael Brune, declared that the new strategy was part of “a larger plan to support the president in realizing his vision and make sure his ambition meets the scale of the challenge.”

The first thing Obama and his new Secretary of State John Kerry could do is say no to the construction of the Keystone XL pipeline. That would be inordinately easy, as Obama has the final say and doesn’t require Congress’ support to shut it down. After 53 senators from both parties signed a letter urging him to green-light the pipeline, Obama is running out of ways to further delay his decision.

In spite of the rhetoric of his inaugural address, the pivotal question remains: Is Barack Obama—or any Democratic leader, for that matter—really on our side? Is it just a question of persuading a reluctant friend, hamstrung by a right-wing, dysfunctional Congress and stymied by powerful corporate interests, to act by demonstrating outside his house to let him know we’re there for him? Or should we be surrounding his house, knowing full well that he won’t give in to our demands without a social movement that acts independently of his wishes and control.

To understand the reasons for Obama’s “lack of desire” to address climate change—a microcosm of the larger inability of global leaders and institutions to do likewise amid two decades of futile climate negotiations—it’s necessary to go beneath the surface appearance of things; to examine the structure and ideology of the system of capitalism.

Systemic Causes

When their financial system was threatened by the crisis that began in 2008, political leaders didn’t sit around for 20 years arguing that they had to wait until all the facts were in and attempting to reach consensus on a solution. No, in a heartbeat, they threw trillions of dollars at the banks.

But when a far larger crisis, one that threatens the basic stability of the planetary biosphere, unfurls as a result of the same policies of reckless growth, waste and warfare, they spend their time trashing scientists and ignoring the unraveling weather outside their windows. Therefore, to get to the root of the issue, it becomes necessary to analyze the whole economic system of production and exchange of goods and services—that is, capitalism. Only by doing this can we hope to formulate an effective strategy to combat climate change and thereby recognize that ecological and social justice are inseparably connected to each other, via an organized, grassroots and global challenge to the capitalist social order.

One doesn’t need to be an anti-capitalist to take part in this struggle, but one does need to recognize that unless the pendulum of social power swings back toward the working people in the U.S. and around the world, and that limits and regulations are placed on the activities of corporate power, we have no hope of saving our world. This struggle is not really about technology or which renewable energy models should be deployed or whether this or that politician or this corporation or that CEO is more or less evil than the other. It’s not about things or people at all—it’s about relationships. It’s about democracy, which is itself about social power, and the relationships it presumes.

The power of the oceans, the power of scientific rationality, the power of the tides and hurricane-force winds are self-evidently not enough to persuade capitalists to act. The only force strong enough to do that is the organized force of the people. We must take the place of gravity to pull the pendulum of contending class forces—wrenched rightward by 30 years of neoliberalism—back toward our side.

Ultimately, as a socialist, I would argue that we need to live in a world where there are no classes with diametrically opposed interests, in perpetual conflict over social and political power. Only in such a socially just and ecologically sustainable world will there be any long-term hope for humanity to live in peace with itself, other species, and the planet on which we depend. The stepping-stones of the revolutionary road are the acts of struggle needed to create it.

In contrast to his inaugural speech, Obama’s first press conference after re-election gave a more accurate insight into the priorities of his second term. Unlike four out of five Americans who want the government to do something to address climate change, Obama made it clear that this wouldn’t be a priority for his administration: “Understandably, I think the American people right now have been so focused and will continue to be focused on our economy and jobs and growth that, you know, if the message is somehow we’re going to ignore jobs and growth simply to address climate change, I don’t think anybody’s going to go for that. I won’t go for that.”

With two mentions of the need for “growth” in a single sentence, Obama faithfully echoed the declaration of the Earth Summit, Rio+20, held in June 2012, where the representatives of 190 countries, while dismally avoiding any commitment to new targets or limits on greenhouse gas emissions, did commit—16 times in all—to “sustained growth,” a phrase taken to be synonymous, rather than in fundamental conflict, with another term: “sustainability.”

The obligation to promote growth underlines why the root of the climate problem is systemic. If capitalism is not growing, it is in crisis. Growth must occur continuously and in all sectors. If the sector in question is highly profitable, it will grow even faster, regardless of any social considerations.

Like, for example, the fossil-fuel sector. Oil production, rather than declining, as is desperately needed to stop climate change, is predicted to increase from the current 93 million barrels per day to 110 million by 2020—with some of the biggest increases worldwide occurring in the U.S. The Holy Grail of all administrations since Richard Nixon —energy independence—is being made possible by the policies of the Obama administration, as the New York Times reported in a special feature: “National oil production, which declined steadily to 4.95 million barrels a day in 2008 from 9.6 million in 1970, has risen over the last four years to nearly 5.7 million barrels a day. The Energy Department projects that daily output could reach nearly 7 million barrels by 2020. Some experts think it could eventually hit 10 million barrels—which would put the United States in the same league as Saudi Arabia.”

As the climate blogger and former Clinton administration official Joseph Romm put it, Obama is “basically pushing a moderate Republican agenda. It’s just that there aren’t any moderate Republicans left, much as we don’t have any ‘below average temperature’ years any more.”

Again, if we examine the roots of the issue, we find that the pathetic response of an administration purporting to be concerned with environmental questions has much less to do with individual personnel than with the dynamics of capitalism.

In 1992, when George H.W. Bush flew to Rio for the first Earth Summit, all things seemed possible. The “evil empire”—as Ronald Reagan liked to call the tyrannical dictatorships of the USSR and Eastern Europe, which operated falsely in the name of socialism—had collapsed under the weight of its own economic, social, and ecological contradictions. Politicians in the West were euphoric. They had seen off what they perceived to be an existential threat to their system.

In today’s world of enforced austerity, it’s difficult to recapture the sense of optimism that pervaded Western ruling class circles in the early 1990s. The atmosphere of triumphalism was so great even Republican presidents like Bush could make promises about protecting the environment. A few years later, when the 1997 Kyoto Protocol was written, Western governments were still willing to pledge that they would do the heavy lifting with regard to reducing emissions, while developing countries would be free from such limits.

Hence, the seeming “lack of will” at Rio+20 last year can be much better explained by the onset of a huge structural crisis of capitalism, rather than the “lack of vision” of individual politicians.

Instead of optimism about acting on climate change, the real optimism these days among capitalists is about the profits they can make from the oil and gas bonanza. Oil giant and planet-wrecker par excellence BP is predicting that by 2030, the entire Western Hemisphere will be energy independent, due to the expansion of new techniques for oil and gas exploration, such as fracking in shale deposits and horizontal and deep-water drilling. Fossil fuels are expected to remain at 81 percent of the energy mix in an energy economy that will be 39 percent larger than today.

Naturally, oil executives such as Scott D. Sheffield, chief executive of Texas-based Pioneer Natural Resources—headquartered in an area of the world that received only two inches of rain for the whole of 2011 and spent most of the year with large parts of the state on fire—are nevertheless overjoyed: “To not be concerned with where our oil is going to come from is probably the biggest home run for the country in a hundred years… It sort of reminds me of the industrial revolution in coal, which allowed us to have some of the cheapest energy in the world and drove our economy in the late 1800s and 1900s.”

Depending on who you are, the outlook for natural gas is even rosier. The International Energy Agency recently released a report that asked in its title “Are We Entering a Golden Age of Gas?” The answer was a resounding “yes,” due to the North American shale gas boom and a “strong post-crisis recovery.”

The other side to this “golden age,” as the report makes clear, is that future economic expansion based on natural gas “alone will not put the world on a carbon emissions path consistent with an average global temperature rise of no more than 2° Celsius,” but on a “trajectory consistent with stabilizing the concentration of greenhouse gases in the atmosphere at around 650 parts per million CO2 equivalent, suggesting a long-term temperature rise of over 3.5°  Celsius.”

Insane Logic

In the insane capitalist “logic” of the 21st century, short-term profit-taking must be maximized at all costs. In a little-reported phenomenon, the energy companies have figured out that they can find oil in shale deposits previously considered marginal in the same way that they “frack” for natural gas. With the price of oil over $80 a barrel, it’s profitable to seek oil in this way, regardless of the environmental cost.

Hence, not only is there a natural gas boom in the U.S., but there’s also an enormous, though much less publicized, oil boom. In fact, the oil boom from previously untapped shale deposits is so large that its effects can be seen from space. The Bakken Field in North Dakota, all 15,000 square miles of it, is one of the largest contiguous oil fields in the world, with output doubling every 18 months. In Texas, production from the Eagle Field increased 30-fold between 2010 and 2012. The reason that the remote and sparsely populated Bakken Field rivals Chicago in light pollution, making it visible to orbiting satellites, is because the natural gas that comes up with the oil, rather than being collected and sold, is set on fire in a process called “flaring.” This senseless act of vandalism and waste is the result of the fact that companies are in a rush to make money from oil that they can’t be bothered to develop the infrastructure necessary to cope with associated natural gas.

As Stanford University academic Adam Brandt, who analyzes greenhouse gas emissions from fossil fuels, explains: “Companies are in a race with their competitors to develop the resource, which means there is little incentive to delay production to reduce flaring.” In Texas, the natural gas flared in 2012 could have provided electricity to 400,000 homes.

So while one set of capitalists is fracking for natural gas on the East Coast—thanks to political leaders like Governor Andrew Cuomo in New York, who appears to be ready to open up the state to fracking—in other parts of the country, a different set of capitalists is setting fire to the exact same gas because it’s a nuisance that slows down production of the different fossil fuel they’re after.

Nothing could exemplify the utter waste and anarchic insanity of capitalism than this fact. One of the government regulatory bodies supposedly in charge of overseeing the oil corporations, North Dakota’s Industrial Commission, gave their logic for refusing to take action against this senselessness: “If we restricted oil production to reduce flaring, we would reduce the cash flow from oil wells fivefold…. As well as cutting waste, we are mandated to increase production, which we would not be doing.”

As for the third and dirtiest arm of the triumvirate of fossil fuels, the world is predicted to be burning 1.2 billion tons more coal per year in 2017. Coal has actually declined in use in the U.S. due to companies switching electricity production to cheaper natural gas, which has reduced U.S. carbon emissions.

One might think this is a good thing. However, capitalism is a global system, so any coal not sold here finds a market overseas. The Chinese population is literally choking to death on grotesque amounts of air pollution in cities such as Beijing. And who’s to blame? The U.S. government says China is building too many coal plants, but increasing amounts of the coal in Asia is coming from mines in the U.S. According to a report in ClimateWire: “Although Chinese coal is largely sourced from domestic mines, EIA figures show that U.S. coal shipments to China have dramatically risen in recent years, punctuated by a 107 percent jump from 2011 to 2012. Chinese imports of U.S. coal surged from 4 million tons in 2011 to 8.3 million tons last year.”

This brings us to the international dimension—and the economic and military competition between countries that makes it impossible for effective international agreements on climate change and emissions reduction to be negotiated. If Barack Obama really wanted to do something about reducing energy consumption in America—and killing a lot fewer people around the world—he could start with a massive reduction in military spending. The U.S. military is the single biggest user of energy in the United States, with the Department of Defense responsible for 80 percent of government energy requirements. Just the cost of the war in Iraq would have paid, from now until 2030, for all the investment in renewable energies necessary to stay below 2° Celsius of warming.

These examples illustrate two things. First, we are in a do-or-die battle with the economic system because capitalism is in fundamental conflict with the biosphere. And second, only a committed alliance of social and ecological justice activists that is clear about the nature of the enemy and prepared to confront the political and economic architects of the crisis stands a hope of winning.

This is why fighting the XL pipeline is about much more than stopping a single pipeline or the first test of Obama’s second term. It’s about building a movement for social and ecological justice and making it clear that we are going to organize to prevent any more infrastructure being built that will drive us over the ecological cliff.

As energy analyst Chris Nelder has put it, we face a choice between keeping the old fossil-fuel based infrastructure that is burning up the planet, and adding to it at an annual cost of $1.6 trillion just to keep it running—or transitioning, at much lower economic, let alone environmental, cost, to a new energy paradigm. His figures and argument are worthy of a lengthy quote: “Instead of incremental spending on an effectively dead transportation regime, we should be thinking about one that can survive the challenges ahead, and deliver more economic benefits than costs. We should be setting an ambitious target, like replacing all commercial passenger air flights with high speed rail for trips under 1,000 miles, replacing 90 percent of our city street traffic with light rail, and moving all long-haul freight traffic to rail. Even if the cost of all that rail infrastructure were in the range of $3 trillion, it would be a fantastic investment.

“Against $6 trillion (minimum) in sunk costs and $1.6 trillion per year in maintenance, the $1.2 trillion per year, plus building the high speed rail network at a generous estimate of $1 trillion, looks very reasonable.

“Put another way: Would you rather spend another $32 trillion over the next 20 years just to maintain a outmoded, unscaleable, aged, unhealthy system, plus another $2.8 trillion in lost productivity due to delays and gridlock, only to wind up out of gas? Or would you rather spend $25 trillion to repair our infrastructure, transition transportation to rail, transition the power grid to renewables, upgrade the entire grid, and solve the carbon problem, to have free fuel forever.”

Of course, whether we travel that road or not—and whether we leave a world to our descendants as beautiful as the one we were born into—will depend on our own independent, organized self-activity to wrench control away from a ruling elite that is quite happy to continue making money from a system that must be overturned.

Chris Williams is an environmental activist, professor of physics and chemistry at Pace University, and the author of Ecology and Socialism.

How Resource Scarcity & Climate Change Could Produce Global Explosion

In Uncategorized on April 23, 2013 at 5:48 pm

Dark waterOldspeak:”In March, for the first time, Director of National Intelligence James R. Clapper listed “competition and scarcity involving natural resources” as a national security threat on a par with global terrorism, cyberwar, and nuclear proliferation.

“Many countries important to the United States are vulnerable to natural resource shocks that degrade economic development, frustrate attempts to democratize, raise the risk of regime-threatening instability, and aggravate regional tensions,” he wrote in his prepared statement for the Senate Select Committee on Intelligence.  “Extreme weather events (floods, droughts, heat waves) will increasingly disrupt food and energy markets, exacerbating state weakness, forcing human migrations, and triggering riots, civil disobedience, and vandalism.”

There was a new phrase embedded in his comments: “resource shocks.” It catches something of the world we’re barreling toward, and the language is striking for an intelligence community that, like the government it serves, has largely played down or ignored the dangers of climate change. For the first time, senior government analysts may be coming to appreciate what energy experts, resource analysts, and scientists have long been warning about: the unbridled consumption of the world’s natural resources, combined with the advent of extreme climate change, could produce a global explosion of human chaos and conflict.  We are now heading directly into a resource-shock world.” –Michael T. Klare

Whelp. You know when the Director of National Intelligence says there’s a problem on par with global terrorism, you know shit is real. Unfortunately the trillions of dollars wasted on fighting the “Global War on Terror”, have not been similarly allocated to the global war on our planet. There’s no terrorism on a dead planet.  O_0 These are the over arching problems of our times.   Resource scarcity and climate change.  We are poisoning, wasting and running out of the only things that matter: water, arable land, and air. The resulting scarcity and deteriorating condition of our environment are THE global security problems that are driving, war, terrorism, unrest, inequality,  failing governments, famine, poverty, etc, etc, etc, ad nauseum. Unbridled consumption and destruction of natural, sometimes toxic and non-renewable resources continues unabated. The “resource shock” world is fast approaching, and we are wholly unprepared. The 1% has the resources, armies & governments to protect its interests. Our survival and that of the planet is secondary. If recent events in the wake of bank riots, food riots, government protests, tsunamis, hurricanes, and earthquakes are any indication, people, you’re on your own. Your protests will be brutally and violently suppressed. Your money is taken. Your food is used for fuel.  Your rivers, oceans and lands are used for waste dumps and left as dead zones where life cannot be supported.  Your governments are used as giant ATMs. Countless unknown species are going extinct. Countless unknown amounts of radiation, chemicals and pollutants are being constantly pumped into the biosphere.  How long before the people rise up en masse to demand sustainable and healthy change?” Ignorance is never far from repression” – Henry A. Giroux

By Michael T. Klare @ Tomdispatch:

Brace yourself. You may not be able to tell yet, but according to global experts and the U.S. intelligence community, the earth is already shifting under you.  Whether you know it or not, you’re on a new planet, a resource-shock world of a sort humanity has never before experienced.

Two nightmare scenarios — a global scarcity of vital resources and the onset of extreme climate change — are already beginning to converge and in the coming decades are likely to produce a tidal wave of unrest, rebellion, competition, and conflict.  Just what this tsunami of disaster will look like may, as yet, be hard to discern, but experts warn of “water wars” over contested river systems, global food riots sparked by soaring prices for life’s basics, mass migrations of climate refugees (with resulting anti-migrant violence), and the breakdown of social order or the collapse of states.  At first, such mayhem is likely to arise largely in Africa, Central Asia, and other areas of the underdeveloped South, but in time all regions of the planet will be affected.

To appreciate the power of this encroaching catastrophe, it’s necessary to examine each of the forces that are combining to produce this future cataclysm.

Resource Shortages and Resource Wars

Start with one simple given: the prospect of future scarcities of vital natural resources, including energy, water, land, food, and critical minerals.  This in itself would guarantee social unrest, geopolitical friction, and war.

It is important to note that absolute scarcity doesn’t have to be on the horizon in any given resource category for this scenario to kick in.  A lack of adequate supplies to meet the needs of a growing, ever more urbanized and industrialized global population is enough.  Given the wave of extinctions that scientists are recording, some resources — particular species of fish, animals, and trees, for example — will become less abundant in the decades to come, and may even disappear altogether.  But key materials for modern civilization like oil, uranium, and copper will simply prove harder and more costly to acquire, leading to supply bottlenecks and periodic shortages.

Oil — the single most important commodity in the international economy — provides an apt example.  Although global oil supplies may actually grow in the coming decades, many experts doubt that they can be expanded sufficiently to meet the needs of a rising global middle class that is, for instance, expected to buy millions of new cars in the near future.  In its 2011 World Energy Outlook, the International Energy Agency claimed that an anticipated global oil demand of 104 million barrels per day in 2035 will be satisfied.  This, the report suggested, would be thanks in large part to additional supplies of “unconventional oil” (Canadian tar sands, shale oil, and so on), as well as 55 million barrels of new oil from fields “yet to be found” and “yet to be developed.”

However, many analysts scoff at this optimistic assessment, arguing that rising production costs (for energy that will be ever more difficult and costly to extract), environmental opposition, warfare, corruption, and other impediments will make it extremely difficult to achieve increases of this magnitude.  In other words, even if production manages for a time to top the 2010 level of 87 million barrels per day, the goal of 104 million barrels will never be reached and the world’s major consumers will face virtual, if not absolute, scarcity.

Water provides another potent example.  On an annual basis, the supply of drinking water provided by natural precipitation remains more or less constant: about 40,000 cubic kilometers.  But much of this precipitation lands on Greenland, Antarctica, Siberia, and inner Amazonia where there are very few people, so the supply available to major concentrations of humanity is often surprisingly limited.  In many regions with high population levels, water supplies are already relatively sparse.  This is especially true of North Africa, Central Asia, and the Middle East, where the demand for water continues to grow as a result of rising populations, urbanization, and the emergence of new water-intensive industries.  The result, even when the supply remains constant, is an environment of increasing scarcity.

Wherever you look, the picture is roughly the same: supplies of critical resources may be rising or falling, but rarely do they appear to be outpacing demand, producing a sense of widespread and systemic scarcity.  However generated, a perception of scarcity — or imminent scarcity — regularly leads to anxiety, resentment, hostility, and contentiousness.  This pattern is very well understood, and has been evident throughout human history.

In his book Constant Battles, for example, Steven LeBlanc, director of collections for Harvard’s Peabody Museum of Archaeology and Ethnology, notes that many ancient civilizations experienced higher levels of warfare when faced with resource shortages brought about by population growth, crop failures, or persistent drought. Jared Diamond, author of the bestseller Collapse, has detected a similar pattern in Mayan civilization and the Anasazi culture of New Mexico’s Chaco Canyon.  More recently, concern over adequate food for the home population was a significant factor in Japan’s invasion of Manchuria in 1931 and Germany’s invasions of Poland in 1939 and the Soviet Union in 1941, according to Lizzie Collingham, author of The Taste of War.

Although the global supply of most basic commodities has grown enormously since the end of World War II, analysts see the persistence of resource-related conflict in areas where materials remain scarce or there is anxiety about the future reliability of supplies.  Many experts believe, for example, that the fighting in Darfur and other war-ravaged areas of North Africa has been driven, at least in part, by competition among desert tribes for access to scarce water supplies, exacerbated in some cases by rising population levels.

“In Darfur,” says a 2009 report from the U.N. Environment Programme on the role of natural resources in the conflict, “recurrent drought, increasing demographic pressures, and political marginalization are among the forces that have pushed the region into a spiral of lawlessness and violence that has led to 300,000 deaths and the displacement of more than two million people since 2003.”

Anxiety over future supplies is often also a factor in conflicts that break out over access to oil or control of contested undersea reserves of oil and natural gas.  In 1979, for instance, when the Islamic revolution in Iran overthrew the Shah and the Soviets invaded Afghanistan, Washington began to fear that someday it might be denied access to Persian Gulf oil.  At that point, President Jimmy Carter promptly announced what came to be called the Carter Doctrine.  In his 1980 State of the Union Address, Carter affirmed that any move to impede the flow of oil from the Gulf would be viewed as a threat to America’s “vital interests” and would be repelled by “any means necessary, including military force.”

In 1990, this principle was invoked by President George H.W. Bush to justify intervention in the first Persian Gulf War, just as his son would use it, in part, to justify the 2003 invasion of Iraq.  Today, it remains the basis for U.S. plans to employ force to stop the Iranians from closing the Strait of Hormuz, the strategic waterway connecting the Persian Gulf to the Indian Ocean through which about 35% of the world’s seaborne oil commerce  passes.

Recently, a set of resource conflicts have been rising toward the boiling point between China and its neighbors in Southeast Asia when it comes to control of offshore oil and gas reserves in the South China Sea.  Although the resulting naval clashes have yet to result in a loss of life, a strong possibility of military escalation exists.  A similar situation has also arisen in the East China Sea, where China and Japan are jousting for control over similarly valuable undersea reserves.  Meanwhile, in the South Atlantic Ocean, Argentina and Britain are once again squabbling over the Falkland Islands (called Las Malvinas by the Argentinians) because oil has been discovered in surrounding waters.

By all accounts, resource-driven potential conflicts like these will only multiply in the years ahead as demand rises, supplies dwindle, and more of what remains will be found in disputed areas.  In a 2012 study titled Resources Futures, the respected British think-tank Chatham House expressed particular concern about possible resource wars over water, especially in areas like the Nile and Jordan River basins where several groups or countries must share the same river for the majority of their water supplies and few possess the wherewithal to develop alternatives.  “Against this backdrop of tight supplies and competition, issues related to water rights, prices, and pollution are becoming contentious,” the report noted.  “In areas with limited capacity to govern shared resources, balance competing demands, and mobilize new investments, tensions over water may erupt into more open confrontations.”

Heading for a Resource-Shock World

Tensions like these would be destined to grow by themselves because in so many areas supplies of key resources will not be able to keep up with demand.  As it happens, though, they are not “by themselves.”  On this planet, a second major force has entered the equation in a significant way.  With the growing reality of climate change, everything becomes a lot more terrifying.

Normally, when we consider the impact of climate change, we think primarily about the environment — the melting Arctic ice cap or Greenland ice shield, rising global sea levels, intensifying storms, expanding deserts, and endangered or disappearing species like the polar bear.  But a growing number of experts are coming to realize that the most potent effects of climate change will be experienced by humans directly through the impairment or wholesale destruction of habitats upon which we rely for food production, industrial activities, or simply to live.  Essentially, climate change will wreak its havoc on us by constraining our access to the basics of life: vital resources that include food, water, land, and energy.  This will be devastating to human life, even as it significantly increases the danger of resource conflicts of all sorts erupting.

We already know enough about the future effects of climate change to predict the following with reasonable confidence:

* Rising sea levels will in the next half-century erase many coastal areas, destroying large cities, critical infrastructure (including roads, railroads, ports, airports, pipelines, refineries, and power plants), and prime agricultural land.

* Diminished rainfall and prolonged droughts will turn once-verdant croplands into dust bowls, reducing food output and turning millions into “climate refugees.”

* More severe storms and intense heat waves will kill crops, trigger forest fires, cause floods, and destroy critical infrastructure.

No one can predict how much food, land, water, and energy will be lost as a result of this onslaught (and other climate-change effects that are harder to predict or even possibly imagine), but the cumulative effect will undoubtedly be staggering.  In Resources Futures, Chatham House offers a particularly dire warning when it comes to the threat of diminished precipitation to rain-fed agriculture.  “By 2020,” the report says, “yields from rain-fed agriculture could be reduced by up to 50%” in some areas.  The highest rates of loss are expected to be in Africa, where reliance on rain-fed farming is greatest, but agriculture in China, India, Pakistan, and Central Asia is also likely to be severely affected.

Heat waves, droughts, and other effects of climate change will also reduce the flow of many vital rivers, diminishing water supplies for irrigation, hydro-electricity power facilities, and nuclear reactors (which need massive amounts of water for cooling purposes).  The melting of glaciers, especially in the Andes in Latin America and the Himalayas in South Asia, will also rob communities and cities of crucial water supplies.  An expected increase in the frequency of hurricanes and typhoons will pose a growing threat to offshore oil rigs, coastal refineries, transmission lines, and other components of the global energy system.

The melting of the Arctic ice cap will open that region to oil and gas exploration, but an increase in iceberg activity will make all efforts to exploit that region’s energy supplies perilous and exceedingly costly.  Longer growing seasons in the north, especially Siberia and Canada’s northern provinces, might compensate to some degree for the desiccation of croplands in more southerly latitudes.  However, moving the global agricultural system (and the world’s farmers) northward from abandoned farmlands in the United States, Mexico, Brazil, India, China, Argentina, and Australia would be a daunting prospect.

It is safe to assume that climate change, especially when combined with growing supply shortages, will result in a significant reduction in the planet’s vital resources, augmenting the kinds of pressures that have historically led to conflict, even under better circumstances.  In this way, according to the Chatham House report, climate change is best understood as a “threat multiplier… a key factor exacerbating existing resource vulnerability” in states already prone to such disorders.

Like other experts on the subject, Chatham House’s analysts claim, for example, that climate change will reduce crop output in many areas, sending global food prices soaring and triggering unrest among those already pushed to the limit under existing conditions.  “Increased frequency and severity of extreme weather events, such as droughts, heat waves, and floods, will also result in much larger and frequent local harvest shocks around the world… These shocks will affect global food prices whenever key centers of agricultural production area are hit — further amplifying global food price volatility.”  This, in turn, will increase the likelihood of civil unrest.

When, for instance, a brutal heat wave decimated Russia’s wheat crop during the summer of 2010, the global price of wheat (and so of that staple of life, bread) began an inexorable upward climb, reaching particularly high levels in North Africa and the Middle East.  With local governments unwilling or unable to help desperate populations, anger over impossible-to-afford food merged with resentment toward autocratic regimes to trigger the massive popular outburst we know as the Arab Spring.

Many such explosions are likely in the future, Chatham House suggests, if current trends continue as climate change and resource scarcity meld into a single reality in our world.  A single provocative question from that group should haunt us all: “Are we on the cusp of a new world order dominated by struggles over access to affordable resources?”

For the U.S. intelligence community, which appears to have been influenced by the report, the response was blunt.  In March, for the first time, Director of National Intelligence James R. Clapper listed “competition and scarcity involving natural resources” as a national security threat on a par with global terrorism, cyberwar, and nuclear proliferation.

“Many countries important to the United States are vulnerable to natural resource shocks that degrade economic development, frustrate attempts to democratize, raise the risk of regime-threatening instability, and aggravate regional tensions,” he wrote in his prepared statement for the Senate Select Committee on Intelligence.  “Extreme weather events (floods, droughts, heat waves) will increasingly disrupt food and energy markets, exacerbating state weakness, forcing human migrations, and triggering riots, civil disobedience, and vandalism.”

There was a new phrase embedded in his comments: “resource shocks.” It catches something of the world we’re barreling toward, and the language is striking for an intelligence community that, like the government it serves, has largely played down or ignored the dangers of climate change. For the first time, senior government analysts may be coming to appreciate what energy experts, resource analysts, and scientists have long been warning about: the unbridled consumption of the world’s natural resources, combined with the advent of extreme climate change, could produce a global explosion of human chaos and conflict.  We are now heading directly into a resource-shock world.

Michael Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular and the author, most recently, of The Race for What’s Left, just published in paperback by Picador.  A documentary movie based on his book Blood and Oil can be previewed and ordered at http://www.bloodandoilmovie.com. You can follow Klare on Facebook by clicking here.

Betray Your Bank Before Your Bank Betrays You

In Uncategorized on April 1, 2013 at 3:06 pm

Oldspeak: “It seems a lot of customers were oblivious to the banks’ deteriorating health, or were confident they would be cared for by somebody else.” -Jonathan WeilHmmm… Sounds familiar. With U.S. megabanks engaging in the same rampant illegality, fraud, & reckless bad bets that triggered the last global economic collapse and holding more derivatives (the same toxic synthetic derivatives that crashed the global economic system last time) than that the entire global GDP, it’s not a matter of if your bank will betray you, but when. Yet, most, are oblivious.  Since the 2008, the United States economy has been like a ticking time bomb with the unregulated activities of the banks the fuse that is slowly burning. The U.S. banking system is basically insolvent.  The U.S. treasury is printing billions upon billions in increasingly devalued funny money while the Fed (a privately owned bank controlled by U.S. megabanks) is buying billions in toxic assets and securities from the insolvent megabanks to keep them in business and give the appearance of solvency. The accrued power of these giant criminal enterprises is threatening the globe again. The theft of depositors money in Cyprus is the tip of the iceberg. This will be replicated in other countries, including the U.S. and U.K.   Don’t remain oblivious to your banks deteriorating health. You would be wise to move your money to a locally oriented bank or credit union. Before it is confiscated to enrich well-appointed thieves.

Move Your Money Project

By Johnathan Weil @ Bloomberg News:

What’s a Slovenian with several hundred thousand euros in the bank supposed to do? Spread it out among at least a few different banks, that’s what. Or move the money out of the country, while it’s still possible.

Imagine what must be on the minds of any savvy depositors still left at Nova Kreditna Banka Maribor d.d., now 79 percent- owned by Slovenia’s government. It was one of only four lenders in October that failed the European Banking Authority’s latest capital-adequacy test, a ritual best known for how lax its standards are. One that flunked was Bank of Cyprus Pcl, where uninsured depositors face 40 percent losses as part of the country’s bailout terms. Another was Cyprus Popular Bank Pcl, also known as Laiki Bank, where uninsured deposits will fare far worse and the bank is being shut.

Cypriot banks’ customers were complacent after uninsured deposits went unscathed in Ireland, Greece, Spain and Portugal, the first euro-area countries to seek international rescues. Slovenians won’t have that excuse should their country be next.

The former Yugoslav republic needs about 3 billion euros ($3.8 billion) of funding this year, while its struggling banks need 1 billion euros of fresh capital, the International Monetary Fund said last week. Slovenia’s central bank this week urged the country’s new government to quickly carry out a plan to recapitalize ailing lenders. It’s a familiar pattern.

Oblivious Customers

The Central Bank of Cyprus warned months ago that the country’s banks needed an infusion of 10 billion euros — which is more than half the size of the nation’s economy — largely because of heavy losses on Greek sovereign debt held by Laiki and Bank of Cyprus. It seems a lot of customers were oblivious to the banks’ deteriorating health, or were confident they would be cared for by somebody else. The country is getting a 10 billion-euro bailout, nine months after it first asked for aid, except none of the money will go to the banks.

Suddenly it should be dawning on a lot of Europeans that deposit-guarantee limits matter. In Slovenia, the maximum is 100,000 euros per depositor, the same as in Cyprus. (Deposit- insurance programs vary among the 17 countries that use the euro.) For a few days last week, it looked as if customers at Laiki and Bank of Cyprus would lose even some of their insured deposits, which would have been a sacrilege.

That plan was scrapped, but could resurface elsewhere for all we know should some genius at the German Finance Ministry insist upon it. The one constant among bailouts of euro-area countries is that there is no rhyme or reason, much less fairness, in the way many details get worked out.

Cypriots may bemoan the inequities of their rough treatment, as might a bunch of wealthy Russians who mistook the island for a reliable financial center and failed to yank their money when they could. For the rest of Europe, the implications should be obvious. Anyone who leaves uninsured deposits in a euro-area bank is on notice that their money can and will be taken from them, if that is what’s demanded by the troika of the IMF, the European Commission and the European Central Bank.

Uninsured deposits aren’t riskless. Nor should they be. Still, it’s unclear why the euro area’s central planners sought to create a precedent that encourages capital flight from weak countries. This could lead to more instability, not less.

So far, there have been no signs of a mass exodus in countries such as Italy or Spain. But deposit migrations can happen slowly, with lots of time passing before they appear in official statistics. Or maybe little will change and most bank customers will go on believing “it can’t happen here,” until one day it does.

Restoring Normalcy

Much good might come from restoring some semblance of normalcy to the hierarchy of creditors in banking. Even better would be to see Germany try it for a change with its own zombie lenders, such as Commerzbank AG (CBK), which is still partly government-owned after its bailout in 2009.

The way it’s supposed to work at failing banks is that shareholders get wiped out first. Next the losses go up the ladder from junior debt holders to senior bondholders, and then all the way to uninsured depositors, if need be. Taxpayers and insured depositors shouldn’t have to absorb others’ losses or put money at risk to spare them. Troubled banks should have to fend for themselves.

This was the approach imposed on Cyprus. In ordinary circumstances, it would be considered fair. The best argument for why it wasn’t is that Cyprus had been lulled into believing it would be treated just as well as Europe’s other bailout recipients. The entire country got hooked on moral hazard.

Now Cyprus may be the template for the future, regardless of European governments’ recent statements to the contrary. If a bankrupt euro-area country can’t afford to recapitalize its own insolvent banks, it will have to “bail in” their owners and creditors first as a condition of receiving outside aid. Or at least that’s what Dutch Finance Minister Jeroen Dijsselbloem said this week in an outburst of candor, before later retracting the statement after it triggered declines in European markets.

Wealthy depositors in Spain, Italy, Greece and elsewhere should assume he was speaking the truth the first time and take measures to protect their money, rather than trusting governments to do it for them.

(Jonathan Weil is a Bloomberg View columnist. The opinions expressed are his own.)

To contact the writer of this article: Jonathan Weil in New York at jweil6@bloomberg.net

To contact the editor responsible for this article: James Greiff at jgreiff@bloomberg.net

Cyprus As Canary – It Can Happen Here: The Bank Currency Confiscation Scheme for US & UK Depositors

In Uncategorized on March 30, 2013 at 7:57 pm

https://i2.wp.com/media.npr.org/assets/img/2013/03/28/cyprusbank282way_wide-8b44df5e0364c2692b832eafdc77152c95ea425d-s6-c10.jpgOldspeak: “While U.S. Corporate media has been focused on Gay marriage and “gun control”, events in Cyprus are giving us a preview of things to come in the rest of Europe and the U.S. Things to come that according to “A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland” What we’re witnessing is the planned demolition of sovereign governments to finance the greed-fueled, reckless and illegal behavior of the international banking cartel. We’ve now reached point in this global economic looting scheme where tax financed bank bailouts are no longer sufficient. Now the hard-earned life savings of bank depositors will be appropriated without their consent. Inequality is at never before seen levels, conditions on Wall Street are basically the same and in many ways worse than they were prior to the last global economic collapse. 2 mega banks, JP Morgan Chase & Bank of America hold more in notional derivatives; 79 TRILLION and 75 TRILLION respectively, than the amount of the ENTIRE GLOBAL GDP of 70 Trillion. Let that sink in. It’s not a matter of if the next collape happens, but when. It’s already begun. Nameless Russian billionaires have been rendered broke, as a result of events in Cyprus. They won’t be the last. Eventually the confiscations will trickle down to people like you and me. Your politicians have already laid the groundwork for banks to legally use your money to bail themselves out. This sort of madness depends on the complacency and indifference of the public to get passed. In this age of Austerity sadly complacency and indifference are abundant. “Propaganda always wins  if you let allow it.”-Leni Riefenstahl . How much longer will we allow it?

By Ellen Brown @ Washingtons’ Blog:

Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.  

New Zealand has a similar directive, discussed in my last article here, indicating that this isn’t just an emergency measure for troubled Eurozone countries. New Zealand’s Voxy reported on March 19th:

The National Government [is] pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts . . . .

Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.

Can They Do That?

Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.”  The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.

The 15-page FDIC-BOE document is called “Resolving Globally Active, Systemically Important, Financial Institutions.”  It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state:

An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.

No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. The FDIC is an insurance company funded by premiums paid by private banks.  The directive is called a “resolution process,” defined elsewhere as a plan that “would be triggered in the event of the failure of an insurer . . . .” The only  mention of “insured deposits” is in connection with existing UK legislation, which the FDIC-BOE directive goes on to say is inadequate, implying that it needs to be modified or overridden.

An Imminent Risk

If our IOUs are converted to bank stock, they will no longer be subject to insurance protection but will be “at risk” and vulnerable to being wiped out, just as the Lehman Brothers shareholders were in 2008.  That this dire scenario could actually materialize was underscored by Yves Smith in a March 19th post titled When You Weren’t Looking, Democrat Bank Stooges Launch Bills to Permit Bailouts, Deregulate Derivatives.  She writes:

In the US, depositors have actually been put in a worse position than Cyprus deposit-holders, at least if they are at the big banks that play in the derivatives casino. The regulators have turned a blind eye as banks use their depositaries to fund derivatives exposures. And as bad as that is, the depositors, unlike their Cypriot confreres, aren’t even senior creditors. Remember Lehman? When the investment bank failed, unsecured creditors (and remember, depositors are unsecured creditors) got eight cents on the dollar. One big reason was that derivatives counterparties require collateral for any exposures, meaning they are secured creditors. The 2005 bankruptcy reforms made derivatives counterparties senior to unsecured lenders.

One might wonder why the posting of collateral by a derivative counterparty, at some percentage of full exposure, makes the creditor “secured,” while the depositor who puts up 100 cents on the dollar is “unsecured.” But moving on – Smith writes:

Lehman had only two itty bitty banking subsidiaries, and to my knowledge, was not gathering retail deposits. But as readers may recall, Bank of America moved most of its derivatives from its Merrill Lynch operation [to] its depositary in late 2011.

Its “depositary” is the arm of the bank that takes deposits; and at B of A, that means lots and lots of deposits. The deposits are now subject to being wiped out by a major derivatives loss. How bad could that be? Smith quotes Bloomberg:

. . . Bank of America’s holding company . . . held almost $75 trillion of derivatives at the end of June . . . .

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

$75 trillion and $79 trillion in derivatives! These two mega-banks alone hold more in notional derivatives each than the entire global GDP (at $70 trillion). The “notional value” of derivatives is not the same as cash at risk, but according to a cross-post on Smith’s site:

By at least one estimate, in 2010 there was a total of $12 trillion in cash tied up (at risk) in derivatives . . . .

$12 trillion is close to the US GDP.  Smith goes on:

. . . Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. . . . Lehman failed over a weekend after JP Morgan grabbed collateral.

But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors.

Perhaps, but Congress has already been burned and is liable to balk a second time. Section 716 of the Dodd-Frank Act specifically prohibits public support for speculative derivatives activities. And in the Eurozone, while the European Stability Mechanism committed Eurozone countries to bail out failed banks, they are apparently having second thoughts there as well. On March 25th, Dutch Finance Minister Jeroen Dijsselbloem, who played a leading role in imposing the deposit confiscation plan on Cyprus, told reporters that it would be the template for any future bank bailouts, and that “the aim is for the ESM never to have to be used.”

That explains the need for the FDIC-BOE resolution. If the anticipated enabling legislation is passed, the FDIC will no longer need to protect depositor funds; it can just confiscate them.

Worse Than a Tax

An FDIC confiscation of deposits to recapitalize the banks is far different from a simple tax on taxpayers to pay government expenses. The government’s debt is at least arguably the people’s debt, since the government is there to provide services for the people. But when the banks get into trouble with their derivative schemes, they are not serving depositors, who are not getting a cut of the profits. Taking depositor funds is simply theft.

What should be done is to raise FDIC insurance premiums and make the banks pay to keep their depositors whole, but premiums are already high; and the FDIC, like other government regulatory agencies, is subject to regulatory capture.  Deposit insurance has failed, and so has the private banking system that has depended on it for the trust that makes banking work.

The Cyprus haircut on depositors was called a “wealth tax” and was written off by commentators as “deserved,” because much of the money in Cypriot accounts belongs to foreign oligarchs, tax dodgers and money launderers. But if that template is applied in the US, it will be a tax on the poor and middle class. Wealthy Americans don’t keep most of their money in bank accounts.  They keep it in the stock market, in real estate, in over-the-counter derivatives, in gold and silver, and so forth.

Are you safe, then, if your money is in gold and silver? Apparently not – if it’s stored in a safety deposit box in the bank.  Homeland Security has reportedly told banks that it has authority to seize the contents of safety deposit boxes without a warrant when it’s a matter of “national security,” which a major bank crisis no doubt will be.

The Swedish Alternative: Nationalize the Banks

Another alternative was considered but rejected by President Obama in 2009: nationalize mega-banks that fail. In a February 2009 article titled “Are Uninsured Bank Depositors in Danger?“, Felix Salmon discussed a newsletter by Asia-based investment strategist Christopher Wood, in which Wood wrote:

It is . . . amazing that Obama does not understand the political appeal of the nationalization option. . . . [D]espite this latest setback nationalization of the banks is coming sooner or later because the realities of the situation will demand it. The result will be shareholders wiped out and bondholders forced to take debt-for-equity swaps, if not hopefully depositors.

On whether depositors could indeed be forced to become equity holders, Salmon commented:

It’s worth remembering that depositors are unsecured creditors of any bank; usually, indeed, they’re by far the largest class of unsecured creditors.

President Obama acknowledged that bank nationalization had worked in Sweden, and that the course pursued by the US Fed had not worked in Japan, which wound up instead in a “lost decade.”  But Obama opted for the Japanese approach because, according to Ed Harrison, “Americans will not tolerate nationalization.”

But that was four years ago. When Americans realize that the alternative is to have their ready cash transformed into “bank stock” of questionable marketability, moving failed mega-banks into the public sector may start to have more appeal.

Comment by Washington’s Blog:  The big banks have already been “nationalized” in the sense that they are state-sponsored institutions .  In fact, the big banks went totally bust in 2008, and are now completely subsidized by the government.

Americans may not like the idea of nationalization, but they are even more  disgusted by crony capitalism … which is what we have now.

Moreover, as we pointed out in 2009:

Many argue that it would be wrong for the government to break up the banks, because we would have to take over the banks in order to break them up.

That may be true. But government regulators in the U.S., Sweden and other countries which have broken up insolvent banks say that the government only has to take over banks for around 6 months before breaking them up.

In contrast, the Bush and Obama administrations’ actions mean that the government is becoming the majority shareholder in the financial giants more or less permanently. That is – truly – socialism.

Breaking them up and selling off the parts to the highest bidder efficiently and in an orderly fashion would get us back to a semblance of free market capitalism much quicker.

Lords of Disorder: Billions For Wall Street, Sacrifice For Everyone Else

In Uncategorized on March 7, 2013 at 5:38 pm

Lloyd C. Blankfein.Oldspeak:”“This bank is anti-fragile, we actually benefit from downturns.”-Jamie Dimon of JPMorgan ChaseThe term “antifragile” was coined by maverick financier & analyst Nassim Taleb, whose book of the same name is subtitled “Things That Gain From Disorder.” That’s a good description of JPMorgan Chase and the nation’s other megabanks… These institutions are designed to prey off economic misery. They suppress genuine market forces in order to thrive, and they couldn’t do it without our ongoing help. The Treasury Department and the Federal Reserve are making it happen.” –Richard Eskow. One look no further than how Mr. Dimon and his sociopathic corporation  profits off the misery of the poverty stricken by administering food stamp benefits to see his demented thought in practice. “A catastrophe for you and I usually presents an opportunity for the Titans of capital. And the grievous economic crisis affecting so many American families is no exception — big business has found a number of ways to profit, directly, from Main Street’s economic pain. Like vultures descending on a rotting corpse, they’ve come up with a variety of innovative methods to pull the last scraps of meat off the bones of America’s middle-class” –Joshua Holland. It’s very clear if one chooses to look. The corprocratic controllers of our political class and economic systems, profit from disorder, downturns, and catastrophes. Money is being redirected  from the people and real economy via austerity programs to prop up and sustain these failed, morally and spiritually bankrupt enterprises.  Knowing this, how logical is it to conclude that obviously deleterious political and economic policies that have us hurtling toward economic and ecological catastrophe will be changed to benefit the people? Not very. The problem is systemic. The systems around which we organize our societies must be fundamentally changed. All the nibbling around the edges that passes for sound policy is largely illusory.If we hope to survive as civilization we can no longer allow merchants of death and disorder who dominate the Military-Financial-Political Industrial Complex to reign as Lords of Disorder.”

By Richard Eskow @ The Campaign For Americas Future:

The President’s “sequester” offer slashes non-defense spending by $830 billion over the next ten years. That happens to be the precise amount we’re implicitly giving Wall Street’s biggest banks over the same time period.

We’re collecting nothing from the big banks in return for our generosity.  Instead we’re demanding sacrifice from the elderly, the disabled, the poor, the young, the middle class – pretty much everybody, in fact, who isn’t “too big to fail.”

That’s injustice on a medieval scale, served up with a medieval caste-privilege flavor. The only difference is that nowadays injustices are presented with spreadsheets and PowerPoints, rather than with scrolls and trumpets and kingly proclamations.

And remember: The White House represents the liberal side of these negotiations.

The Grandees

The $83 billion ‘subsidy’ for America’s ten biggest banks first appeared in an editorial from Bloomberg News – which, as the creation of New York’s billionaire mayor Michael Bloomberg, is hardly a lefty outfit.  That editorial drew upon sound economic analyses to estimate the value of the US government’s implicit promise to bail these banks out.

Then it showed that, without that advantage, these banks would not be making a profit at all.

That means that all of those banks’ CEOs, men (they’re all men) who preen and strut before the cameras and lecture Washington on its profligacy, would not only have lost their jobs and fortunes in 2008 because of their incompetence – they would probably lose their jobs again today.

Tell that to Jamie Dimon of JPMorgan Chase, or Lloyd Blankfein of Goldman Sachs, both of whom have told us it’s imperative that we cut social programs for the elderly and disabled to “save our economy.” The elderly and disabled have paid for those programs – just as they paid to rescue Jamie Dimon and Lloyd Blankfein, and just as they implicitly continue to pay for that rescue today.

Dimon, Blankfein and their peers are like the grandees of imperial Spain and Portugal. They’ve been given great wealth and great power over others, not through native ability but by the largesse of the Throne.

Lords of Disorder

Just yesterday, in a rare burst of candor, Dimon said this to investors on a quarterly earnings call: “This bank is anti-fragile, we actually benefit from downturns.”

It’s true, of course. Other corporations – in fact, everybody else – has to survive or fail in real-world conditions. But Dimon and his peers are wrapped in a protective force field which was created by the people, of the people, and for … well, for Dimon and his peers.

The term “antifragile” was coined by maverick financier and analyst Nassim Taleb, whose book of the same name is subtitled “Things That Gain From Disorder.” That’s a good description of JPMorgan Chase and the nation’s other megabanks.

Arbitraging Failure

Dimon’s comment was another way of saying that his bank, and everything it represents, is The Shock Doctrine made manifest. The nation’s megabanks are arbitraging their own failures, and the economic crises that flow from those failures.

These institutions are designed to prey off economic misery. They suppress genuine market forces in order to thrive, and they couldn’t do it without our ongoing help. The Treasury Department and the Federal Reserve are making it happen.

We who have made these banks “antifragile” have crowned their leaders our Lords of Disorder.

Once Dimon told reporters that he explained to his seven-year-old daughter what a financial crisis is – “something that happens … every five to seven years,” which “we need to do a better job” managing.

Thanks to fat political contributions, Dimon manages them well. So do his peers. Misery is the business model. And by Dimon’s reckoning another shock’s coming any day now.

Money For Nothing

Bloomberg’s use of the word ‘subsidy’ in this instance can be slightly misleading. Public institutions don’t issue $83 billion in checks to Wall Street’s biggest banks every year. But they didn’t let them fail as they should have – through an orderly liquidation – after they created the crisis of 2008 through fraud and chicanery. Instead it allowed them to prosper from it, creating that $83 billion implicit guarantee.

As we detailed in 2011, the TARP program didn’t “make money,” either. Banks received a free and easy trillion-plus dollars from our public institution, on terms that amounted to a gift worth tens of billions, and possibly hundreds of billions.

That gift prevented them from failing. In private enterprise, this kind of rescue is only given in return for part ownership or other financial concessions. But our government asked for nothing of the kind.

Unpaid Debts

Breaking up the big banks would have protected the public from more harm at their hands. That didn’t happen.

Government institutions could have imposed a financial transaction tax, whose revenue could be used to repair the harm the banks caused while at the same time discouraging runaway gambling.  They still could.

They could have imposed fees on the largest banks to offset the $83 billion per year advantage we’ve given them. They still could.

But they haven’t. This one-sided giveaway is the equivalent of an $83 billion gift for Wall Street each and every year.

Cut and Paste

$83 billion per year: Our current budget debate is framed in ten-year cycles, which means that’s $830 billion in Sequester Speak.  You’d think our deficit-obsessed capital would be trying to collect that very reasonable amount from Wall Street. Instead the White House is proposing $130 billion in Social Security cuts, $400 in Medicare reductions, $200 billion in “non-health mandatory savings,” and $100 billion in non-defense discretionary cuts.

That adds up to exactly $830 billion.

No doubt there is genuine waste that could be cut. But $830 billion, or some portion of it, could be used to grow our economy and brings tens of millions of Americans out of the ongoing recession that is their daily reality, even as the Lords of Disorder continue to prosper. It could be used for educating our young people and helping them find work, for reducing the escalating number of people in poverty, for addressing our crumbling infrastructure, for giving people decent jobs.

It’s going to Wall Street instead.

Trillion-Dollar Tribute

The right word for that is tribute. As in, “a payment by one ruler or nation to another in acknowledgment of submission …” or “an excessive tax, rental, or tariff imposed by a government, sovereign, lord, or landlord … an exorbitant charge levied by a person or group having the power of coercion.” (Courtesy Merriam-Webster)

In this case the tribute is made possible, not by military occupation, but by the hijacking of our political process by the corrupting force of corporate contributions.

The fruits of that victory are rich: Bank profits are at near-record highs. Most of the country is still struggling to dig out from the wreckage they created but, as Demos’ Policy Shop puts it, “for the banks it’s 2006 all over again.”

On Bended Knee

“Millions for defense,” they said in John Adams’ day, “but not one cent for tribute.”

Today we’re paying for both. That doesn’t leave much for the elderly, the disabled, the impoverished, the children, or anybody else who doesn’t “benefit from disorder.” Nobody’s fighting for them in this budget battle.

That leaves the public with a clear choice: Demand solutions that are more just and democratic – or submit willingly to the Lords of Disorder.

Overdose: The Next Financial Crisis

In Uncategorized on December 20, 2012 at 6:09 pm

Oldspeak: ““Ultimately there is going to be a price all around the world to be paid for this and the longer it continues the bigger that price is going to be.” – Peter P. Schiff, President Euro Pacific CapitalWhen the world’s financial bubble blew, the solution was to lower interest rates and pump trillions of dollars into the sick banking system. “The solution is the problem, that’s why we had a problem in the first place”. For Economics Nobel laureate Vernon Smith, the Catch 22 is self-evident. But interest rates have been at rock bottom for years, and governments are running out of fuel to feed the economy. “The governments can save the banks, but who can save the governments?” Forecasts predict all countries’ debt will reach 100% of GDP by next year. Greece and Iceland have already crumbled, who will be next?” The bailout bubble will inevitably pop. It is many times larger than any other financial bubble yet seen and it is global. Corporations world wide are being bailed out by governments, but as we’ve seen in Greece, Iceland, Spain, Italy, Portugal, governments themselves are collapsing under weight of the bailouts. Now governments need bailouts, ceding control to technocrats who go about the business of privatizing public assets, cutting social services and increasing taxes to facilitate extraction of the government and nations resources. Conditions are very much similar to those that existed in 2008 before the last collapse.   When it pops this will be the mother of all bubbles.  Interest rates are at or near zero across much of the world. There is no more rate lowering to be done to make possible more “stimulus packages”. It will be very interesting to see how thing proceed past that point.  My guess is not well.

Overdose: The Next Financial Crisis

https://www.youtube.com/watch?feature=player_embedded&v=4ECi6WJpbzE