This is a beautiful machine with a wonderful technological process. It is spell binding. It is a kind of art, an art of invention and technology that delights with its beauty:
I believe that one reason why the late 19th century and early 20th century was so full of beautiful inventions was that the culture celebrated inventions and the glory of science. I sure wish culture would take a turn back to those days. We need a kickstart to a better tomorrow.
Wednesday, April 27, 2011
McDonald's Shows Its "Values"
Sadly. McDonald's is more concerned about repressing facts and maintaining a synthetic "image" than in letting truth be told. They fired an employee for releasing a video of a savage beating in a McDonald's restaurant. Obviously McDonald's policy is: pretend that their restaurants are a haven from the real world with McFood as a synthetic substitute for reality.
Here is a bit from an article by Maureen Dowd in the NY Times. I've bolded the key bit:
The good news from Maryland is that this story helps announce "open season" on beatings:
Here is a bit from an article by Maureen Dowd in the NY Times. I've bolded the key bit:
April is the cruelest month for Chrissy Lee Polis.Baltimore is the scene of multiple crimes:
The 22-year-old stopped by the Rosedale, Md., McDonald’s, just east of Baltimore, last week.
Two patrons, an 18-year-old woman named Teonna Monae Brown and a 14-year-old girl, seemed to come out of nowhere and began ferally assaulting Polis.
The savage pair may have been disturbed at the prospect that Polis was transgender. “They said, ‘That’s a dude. That’s a dude. And she’s in the female bathroom,’ ” Polis told The Baltimore Sun.
The attackers spit on her, threw her on the floor, kicked her in the face and back, punched her in the nose, ripped her earrings out of her earlobes, dragged her by her hair across the restaurant and only stopped when she began to have an epileptic seizure and an older woman in a white track suit intervened.
A McDonald’s employee, who captured it all on his cellphone, was fired after his video went viral on YouTube.
- Sexual bigots savagely attack a transgendered woman because they didn't personally approve of this "lifestyle". (I'm waiting for people with perms and hair colouring to be beaten to a pulp by the Puritans who think this kind of cosmetic alteration insults God. In the good old days this got you into the stocks and I'm sure some are ready to put the offenders on faggots and set them afire so that the smoke of the offering can loft up to the heavens and please a most jealous God.)
- The good people of Baltimore who "witnessed" the assault acted more like Romans at the Coliseum watching a gladiatorial fight or Christians being fed to the lions. I'm surprised that the news report didn't identify whether the onlookers offered a thumbs up or thumbs down for the vicious beating.
- McDonald's management tops the list of infamy by deciding that fiction is more real at McDonalds that truth. If you dare show something inside their restaurant that undermines the corporate "image" you get fired. Truth be damned. It is the burnished image that counts.
The suspects have been charged with assault and the Baltimore County state’s attorney office is determining whether it classifies as a hate crime.I wonder what qualifies as a "hate" crime in this county if this beating doesn't. I can only guess that Baltimore county officials are "hard at work" trying to figure out what "policy position" they should take. On the one hand you have bigots beating somebody to a bloody pulp. But on the other hand, I guess there are just so many transgendered beatings in this county that it is hard to decide if this one is "special" and should be treated as a hate crime, or is just one of any number of run-of-the-mill beat the gays, beat the transgendered, beat the mentally retarded, beat the blacks, beat the foreigner, beat the homeless crimes that go on in that blighted part of the world. It must be tough to pick out "hate" crimes when you have so many to choose from. Right?
The good news from Maryland is that this story helps announce "open season" on beatings:
A week before the attack, Maryland’s Senate shelved a measure extending anti-discrimination protections to people who openly change their gender identity even though, as The Sun editorialized, “It would have sent a powerful signal that transgender people are not fair game for bigots.”Wonderful. The legislators in Maryland have decided that it is discrimination if you beat up the handicapped and mentally retarded or the homeless, but it isn't a crime if you beat up the transgendered. I guess that since Michael Vick is out of the dog fighting business, maybe the more "progressive" elements of the Baltimore business community figure they can attract tourists to watch the transgendered beatings. Maybe move these from McDonald's to a bigger arena, sell tickets, and put Baltimore on the map as a tourist "destination" for non-hate crime beatings. I can see that the legislators are going to be busy trying to figure out that since transgendered beatings don't qualify as a "hate" crime, what else can they add to the mix to make for a more exciting offering to attract tourists. Maybe beatings for midgets or fly in Finns from Europe that can be put into a ring and beaten to a pulp to excite the tourists. The possibilities are endless!
Labels:
conformity,
crime,
culture,
Dowd,
sex,
United States,
violence
Monday, April 25, 2011
Excellent Article on Paul Krugman
The New York Magazine has an excellent article about Paul Krugman written by Benjamin Wallace-Wells that starts:
I view Krugman as the modern equivalent of those old Israelite prophets. His message is unpopular, but it is the voice of Truth and Justice. Sadly the people would rather chase after their false gods of Money and political Ideology. Nobody expects the Hand of God to come crashing down to punish the stiff-necked people, but I'm pretty sure that the current path of US politics will lead to a crack-up and crash in the society. The best days of America are behind her because she is unwilling to face up to the terrible path the country is on. That is a "Hand" of something which will sweep across the country and bring the high and proud down to punish them for their stiff-neck refusal to hear the plea for justice and greater social equity.
This bit from the article is very poignant:
The political divide in the US is the most bitter since the divide prior to the American Civil War. When I hear Republicans say that they will refuse to increase the debt limit unless Obama agrees to the cuts they demand, this strikes me as the same absolutist stands that the Southerners took on the issue of extending slavery into the new territories. The lack of real compromise (and a path into the future) is what brought about that great war and all that bloodshed.
If you are looking not only for clues into Barack Obama’s character but for a definition of what his presidency will mean to the country, then the speech on fiscal policy that he delivered at George Washington University the Wednesday before last is the most significant one he has ever given. It is, in its own way, an astonishing document, alive with the themes that undergirded his Philadelphia speech on race and his Nobel Prize acceptance, on the tragic enmeshment of American limitations and American strength. Obama was responding mostly to the Republican budget plan, and he understood exactly what its author, Representative Paul Ryan, had in his sights: “This vision,” Obama said, “is less about reducing the deficit than it is about changing the basic social compact in America.”Go read the whole article.
And yet, having defined the fight so starkly, Obama delivered a plea for compromise. He ended a stirring defense of the welfare state by explaining his plans to gut it. Then he said that even this proposed $2 trillion cut in government spending was only a starting point for negotiation: “I don’t expect the details in any final agreement to look exactly like the approach I laid out today,” he said. “This is a democracy; that’s not how things work.” There were notes of deference, and passivity: If Obama believed that his vision of society was at stake, why place it so squarely on the partisan bargaining table—or why not at least begin with a stronger gambit? This was, at any rate, the point of view of one particular strain of liberal reaction, whose position was summed up with poignant resignation by New York Times columnist Paul Krugman. “I could live with this as an end result,” he wrote. “If this becomes the left pole, and the center is halfway between this and Ryan, then no.”
For the first two years of the Obama administration, Krugman has been building, in his columns and on his blog, not just a critique of this presidency but something grander and more expansively detailed, something closer to an alternate architecture for what Obamaism might be. The project has remade Krugman’s public image, as if he had spent years becoming a chemically isolate form of himself—first a moderate, then an anti-Bush partisan, and now the leading exponent of a kind of liberal purism against which the compromises of the White House might be judged. Krugman’s counterfactual Obama would have provided far more stimulus money and would have nationalized Citigroup and Bank of America. He would have written off Republicans and worked only with Democrats to fashion a health-care reform bill that included a so-called public option. The president of Krugman’s dreams would have made his singular long-term goal the preservation of the welfare state and the middle-class society it was designed to create.
This purism is not a role Krugman is altogether comfortable with, but it is one he has sought: His blog is titled The Conscience of a Liberal. He uses it as a kind of workroom for his column, and it is now, according to Technorati, the most popular single-author blog online—a more statistically rigorous counterpart to Rachel Maddow’s show and the Huffington Post. The comment section has become a repository for a certain form of liberal anguish, and a community unto itself: “His campaign promised a better, more equitable America. Those who believed him feel betrayed,” wrote one commenter in regard to a recent column titled “The President Is Missing.”And another: “Come on, Professor Krugman, will you lead the people out?”
I view Krugman as the modern equivalent of those old Israelite prophets. His message is unpopular, but it is the voice of Truth and Justice. Sadly the people would rather chase after their false gods of Money and political Ideology. Nobody expects the Hand of God to come crashing down to punish the stiff-necked people, but I'm pretty sure that the current path of US politics will lead to a crack-up and crash in the society. The best days of America are behind her because she is unwilling to face up to the terrible path the country is on. That is a "Hand" of something which will sweep across the country and bring the high and proud down to punish them for their stiff-neck refusal to hear the plea for justice and greater social equity.
This bit from the article is very poignant:
You could see something else in the data, too. From 1979 to 2004, the income of the richest one percent of Americans grew by 176 percent, that of the richest one fifth of the country by 69 percent, and that of everyone else by less than 25 percent. Working through the numbers, Krugman came to believe that “only a fraction” of the change was compelled by global forces, which had been the standard explanation. The rest, he concluded, was political.What worries me is that the greed of the wealthy and powerful will cause a class war to break out as the last ditch attempt of the dispossessed to get a fair shake in the society. Don't expect this to break out during the Great Recession. No. It will come when the economy rebounds, when people once again feel a chance for a better life, but see it being snatched from them -- yet again -- by the wealthy and powerful. This kind of rising up of the downtrodden occurs when there is hope but those at the bottom see their chances being taken away from them.
It was Krugman’s Princeton colleague Larry Bartels who made the critical connection, in research Krugman devoured and still cites. Perhaps the most important influence on income inequality, Bartels argued, was something economists had not emphasized: whether a Democrat or a Republican was in the White House. Since World War II, Bartels found, wealthy families in the 95th percentile in income had seen identical income growth under both parties. But for families in the 20th percentile, the difference was astonishing: Under Democratic presidents, their income grew at six times the rate it did under Republican ones. There was, for Krugman, a kind of radicalization implied in this.
The political divide in the US is the most bitter since the divide prior to the American Civil War. When I hear Republicans say that they will refuse to increase the debt limit unless Obama agrees to the cuts they demand, this strikes me as the same absolutist stands that the Southerners took on the issue of extending slavery into the new territories. The lack of real compromise (and a path into the future) is what brought about that great war and all that bloodshed.
Labels:
economics,
Keynes,
Obama,
Paul Krugman,
Robert Reich,
the Left,
United States
Jolly Green Giant?
Here is a bit from a Washington Post article by Bjorn Lomborg that questions the myth that China is the leading actor in a "green future" for planet earth:
I liked Bjorn Lomborg's original stance on "global warming". He was a pragmatist calling for a rational trade off between the expenses of a "precautionary principle" and the very real benefits of money spent on more pressing issues for humanity. He questioned the real costs of warming. He didn't waste much time arguing about the "settled science" of global warming. He should have been the consensus winner, but he wasn't. Lately he has drifted more into the hysterial global warming camp. From Wikipedia:
The above article by Lomborg is good because it underlines that you can't take things at face value. You have to nose around and look beyond the headlines, look past the screaming fanatics on left and right, you need to use your own intelligence to understand the world and come up with your own strategy. If everybody independently does this, then we will have the diversity of viewpoints and the undertaking of a multitude of different strategies which will give us the necessary depth of options and alternatives needed to deal with whatever the future throws at us.
Real danger comes when people get on a bandwagen. To use a tired example: look at Germany under Hitler, an advanced country with culture and education marched off a cliff under the guidance of a fanatic. Nobody has truth by the tail. Only if everybody finds their own bit of truth and contributes it to the collective whole do we have a real chance of having the tools to deal with what will be thrown at us. Strength in number, strength in diversity in depth, strength through democracy and individual choice.
China was responsible for half of the world’s production of solar panels in 2010, but only 1 percent was installed there. Just as China produces everything from trinkets to supertankers, it is exporting green technology — which makes it a giant of manufacturing, not of environmental friendliness.Go read the whole article.
In wind power, China both produces and consumes. In 2009, it put up about a third of the world’s new wind turbines. But much of this has been for show. A 2008 Citigroup analysis found that about one-third of China’s wind power assets were not in use. Many turbines are not connected to the transmission grid. Chinese power companies built wind turbines that they didn’t use as the cheapest way of satisfying — on paper — government requirements to boost renewable energy capacity.
Consider the bigger picture: 87 percent of the energy produced in China comes from fossil fuels, the vast majority of it from coal, the International Energy Agency found in 2010.
I liked Bjorn Lomborg's original stance on "global warming". He was a pragmatist calling for a rational trade off between the expenses of a "precautionary principle" and the very real benefits of money spent on more pressing issues for humanity. He questioned the real costs of warming. He didn't waste much time arguing about the "settled science" of global warming. He should have been the consensus winner, but he wasn't. Lately he has drifted more into the hysterial global warming camp. From Wikipedia:
In August 2010, Lomborg appeared to reverse his position on global warming in an interview with the Guardian. He revealed that he endorses the use of a carbon tax to fight climate change in his latest book.I think he has lost his way and given into the seductions of being on the "winning" side. The science isn't settled and as I shiver through a La NiƱa year on the Pacific West Coast I can assure you things are colder here and no "global warming" is in evidence. I remember in the early 1980s when I bought my first house going out to the dykes wondering if they would hold as earth grew warmer and the rising sea level from global warming would overtop them. The extremist were telling me that by 2000 at the latest my house would be subject to flooding as high tides overtopped the dykes. Well, the dykes were never raised and global sea levels are up a couple of centimeters instead of the metre promised by the diehard crazies.
The above article by Lomborg is good because it underlines that you can't take things at face value. You have to nose around and look beyond the headlines, look past the screaming fanatics on left and right, you need to use your own intelligence to understand the world and come up with your own strategy. If everybody independently does this, then we will have the diversity of viewpoints and the undertaking of a multitude of different strategies which will give us the necessary depth of options and alternatives needed to deal with whatever the future throws at us.
Real danger comes when people get on a bandwagen. To use a tired example: look at Germany under Hitler, an advanced country with culture and education marched off a cliff under the guidance of a fanatic. Nobody has truth by the tail. Only if everybody finds their own bit of truth and contributes it to the collective whole do we have a real chance of having the tools to deal with what will be thrown at us. Strength in number, strength in diversity in depth, strength through democracy and individual choice.
Oil's Future
Here are some bits from a WSJ interview with the CEO of Chevron:
I got a chuckle out of my father who during the 1970s "oil shortage" told me that when he was a kid in the 1920s the schools taught him that America would "soon run out of oil". It will. But not in my lifetime and probably not during the 21st century. Definitely by the early 22nd century oil will be mostly gone, but there will still be lots of coal and lots of methane clathrate waiting to be "produced" and used as an energy source. The CEO of Chevron said there was 2.5 trillion of known oil reserves. I think he is undercounting. Canada alone has over 1 trillion barrels of oil sands. The far north of Canada has not been explored and the Russians are getting very nationalistic and aggressive in the Arctic ocean because there will probably be several trillion barrels of oil there waiting to be produced.
Since I think the "dangers" of global warming are based on bad models that over-estimate the greenhouse effect of CO2 and under-estimate the other feedback loops in dynamic weather, I'm not as concerned as most with the exploitation of all this oil. But it if does prove to be a problem, within a decade a crash program could shift 80% of energy over to nuclear reactors with all personal transportation shifted to electricity and not fossil fuel (saving the fossil fuel for long haul transportation).
I'm a pessimistic optimist. I think technology holds lots of promise. But I'm realistic enough to know that humans will mostly try to dodge the tough choices as long and hard as possible and create all kinds of crises before the every "solve" the energy crisis or get on top of "global warming". It is like democracy. Democracy is well understood to be the worst possible form of government, except that all the other choices are in fact far worse. Humanity will muddle through. That's my pessimistic optimism speaking.
The Chevron CEO is a rare breed these days: an unapologetic oil man. For decades—going back to Jimmy Carter—politicians have been peddling an America free of fossil fuels. Mr. Obama has taken that to an unprecedented level, closing off more acreage to drilling, pouring money into green energy, pushing new oil company taxes, instituting anticarbon regulations. America is going backward on affordable energy, even as oil hits $110 a barrel.There is more material in the WSJ article. Go read the whole thing.
Enter the tall, bespectacled Mr. Watson, who a little more than a year ago stepped into the shoes of longtime CEO David O'Reilly. An economist by training, soft-spoken by nature, the 53-year-old Mr. Watson is hardly some swaggering wildcatter. Yet in a year of speeches, he has emerged as one of the industry's foremost energy realists. No "Beyond Petroleum" (BP) for him. On energy, he says, America "has a lot to learn."
Starting with the argument—so popular among greens and Democrats—that we are running out of oil. "Peak oil"—the theory that global oil production will soon hit maximum levels and begin to decline—is a favorite among this crowd, and it is one basis for their call for more biofuels and solar power. Mr. Watson doesn't dismiss the idea but explains why it remains largely irrelevant.
In theory, he says, "we've been running out of oil and gas for a long time," yet technology creates new opportunities. Mr. Watson cites a Chevron field long in decline down the road in Bakersfield—to the point that for every 100 barrels of oil "in place," the company was extracting only 10 or 20. But thanks to a new technology called steam flooding, Chevron is now getting 70 to 80 barrels. "Price creates incentive, and energy will be developed if there's demand for it at the price you can develop it," Mr. Watson says. In that sense, "oil and gas are plentiful."
Don't believe it? Over the past 30 years, even as "peak oil" was a trendy theme, the world's proven reserves of oil and natural gas increased 130%, to 2.5 trillion barrels.
Or consider America's latest energy innovation: hydrofracking for abundant and cheap natural gas. This advance, says Mr. Watson, took even the industry "by surprise"—as evidenced by the many U.S. ports to import liquid natural gas that are now "sitting idle." Chevron last year paid $3.2 billion to buy natural-gas producer Atlas Energy as its foray into this new market.
Mr. Watson has little time for the Beltway fiction that America will soon be able to do without, or nearly without, fossil fuels. Yes, "we need all forms of energy." But the world consumes 250 million barrels of energy equivalent today, only a "tiny fraction of which" is wind and solar—and even those "are not affordable at scale," he says.
As for biofuels, "we would need to consume land the size of states" to hit the country's current ethanol targets. Chevron is investigating biofuels, but Mr. Watson says the "economics aren't there" yet. Unlike many CEOs, Mr. Watson insists on products that can prosper without federal subsidies, which he believes are costly and lacking in transparency when "consumer pockets are tight, government pockets are tight."
Bottom line: "We're going to need oil and gas and coal for a long time if America wants to keep the lights on."
...
But what about the BP Gulf spill? Mr. Watson blames the "cultural aspects and behavioral aspects" of the particular drilling rig that exploded. He roundly disagrees with the finding of Mr. Obama's spill commission that the "root causes" of the spill were "systemic" to the industry.
"There is no evidence to support that. I don't know how that conclusion was reached. I know the industry has drilled 14,000 deep water wells without having this sort of problem." As for the moratorium, "I can understand taking a pause. I can't understand shutting down a whole industry for a better part of a year."
Chevron has three deep water rigs in the Gulf, so the ban cost it millions of dollars in idle rigs and lost jobs. For the country, says Mr. Watson, it means "less oil." Offshore drilling takes years of lead time. Mr. Watson cites Chevron's Gulf "Tahiti" project, which started producing about 18 months ago. It has taken "the better part of a decade to do the seismic work, drill the exploratory wells, evaluate those wells, drill other development wells, to delineate it, to build the facilities and to place the oil wells online," he explains.
The endless moratorium has already meant that "if you go out to the middle of the decade, there are already 200,000 to 300,000 barrels a day of oil that aren't going to be produced that year. . . . That won't be retrieved." And the lost production number is getting larger, since the new Bureau of Ocean and Energy Management is still dallying on permits—and those primarily for backlogged projects, not new leases.
Democrats are now arguing, as Mr. Obama did in his speech, that the oil industry already "holds tens of millions of acres of leases where it's not producing a drop." Some are advocating "use it or lose it," calling for the government to strip oil companies of their leases if they don't immediately start producing.
Mr. Watson explains why this is bogus. Only one-third of Chevron's offshore leases are classified as "producing" oil and gas today. The other two-thirds either are "unsuccessful" (they don't hold viable oil or gas) or "are in varying stages of development—seismic work, drilling wells, constructing facilities." Mr. Watson says companies would be crazy to sit on productive lands, since leases require costly bonus payments and annual rental payments to the government.
If Washington institutes Mr. Obama's "use it or lose it" policy, Mr. Watson says, it will mean less U.S. oil production. And how does this help Mr. Obama with his goal of reducing imported oil?
As for soaring oil prices, Mr. Watson blames growing demand, tighter supply, Mideast uncertainty and inflation. He doesn't predict future price trends, though during a recent analyst call he warned that the drilling moratorium would only make them higher. Lost production in the Gulf is "going to represent a sizable chunk of the spare capacity that the industry expects to see. And that will impact prices, and that will retard economic growth."
The economy is also why Mr. Watson won't pay the usual energy CEO lip service to new carbon regulations. The cap-and-trade bill the House passed in 2009 was "poorly conceived and it collapsed under its own weight for good reason," he notes.
The EPA move to regulate carbon is no better: "It's not why the Clean Air Act was put in place, and it doesn't seem to be the right way to attack concerns about greenhouse gas emissions," he says. The EPA is "placing huge new regulatory burdens on industries that are import sensitive." The regulations will place burdens on refineries, putting "their competitiveness at risk, and ultimately we'll produce less gasoline here and end up importing it from refineries that are less energy efficient overseas."
I got a chuckle out of my father who during the 1970s "oil shortage" told me that when he was a kid in the 1920s the schools taught him that America would "soon run out of oil". It will. But not in my lifetime and probably not during the 21st century. Definitely by the early 22nd century oil will be mostly gone, but there will still be lots of coal and lots of methane clathrate waiting to be "produced" and used as an energy source. The CEO of Chevron said there was 2.5 trillion of known oil reserves. I think he is undercounting. Canada alone has over 1 trillion barrels of oil sands. The far north of Canada has not been explored and the Russians are getting very nationalistic and aggressive in the Arctic ocean because there will probably be several trillion barrels of oil there waiting to be produced.
Since I think the "dangers" of global warming are based on bad models that over-estimate the greenhouse effect of CO2 and under-estimate the other feedback loops in dynamic weather, I'm not as concerned as most with the exploitation of all this oil. But it if does prove to be a problem, within a decade a crash program could shift 80% of energy over to nuclear reactors with all personal transportation shifted to electricity and not fossil fuel (saving the fossil fuel for long haul transportation).
I'm a pessimistic optimist. I think technology holds lots of promise. But I'm realistic enough to know that humans will mostly try to dodge the tough choices as long and hard as possible and create all kinds of crises before the every "solve" the energy crisis or get on top of "global warming". It is like democracy. Democracy is well understood to be the worst possible form of government, except that all the other choices are in fact far worse. Humanity will muddle through. That's my pessimistic optimism speaking.
Labels:
contrarian,
democracy,
energy crisis,
global warming,
limits to growth,
Obama,
oil,
optimism,
technology,
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United States
Sunday, April 24, 2011
Inequalities in Income, Health, and Opportunity
Here is Ed Broadbent, a famous leftist Canadian politician, introducing a talk by Richard Wilkinson given in Canada on income inequality:

I like the bits where he explains that life expectancy isn't correlated well with the average income of a country. But it is well correlated with relative income (social status, social position). This underlines that a society works only if everybody feels like they "belong" and a valued reasonably well compared to others.
I like the quip: "If Americans want to live the American dream, they should move to Denmark or Finland." Those are societies where greater equality means that the offspring of the poor have a better chance to improve their income, status, health, etc. Those societies have greater social mobility.
I like the bits where he explains that life expectancy isn't correlated well with the average income of a country. But it is well correlated with relative income (social status, social position). This underlines that a society works only if everybody feels like they "belong" and a valued reasonably well compared to others.
I like the quip: "If Americans want to live the American dream, they should move to Denmark or Finland." Those are societies where greater equality means that the offspring of the poor have a better chance to improve their income, status, health, etc. Those societies have greater social mobility.
The Debt & Deficit Story
Here's a nice post by Dean Baker setting the record straight in the midst of all the hysteria about the US's debt and deficit:
The reality is that if the US government didn't sustain a deficit right now, the Great Recession would be the Great Depression II. But nobody in the debate is willing to admit to that. Instead, they scare up the bogeyman to ensure that deep-pocketed interest groups come out of this mess with their pockets full while most Americans have their pockets picked, yet again, by those with the politician's ears.
Here is a post by the economist Mark Thoma that lays bare the truth about corrupted politics:
Steven Pearlstein did his part for the Wall Street crusade to get people to surrender their Social Security and Medicare. He warned readers that if we don't follow the Wall Street deficit reduction agenda, the dollar could enter a free fall.I would say that this is one of the silliest things the paper has ever published, but this is the Washington Post that we are talking about.To get the embedded links, go read the original post.
Anyhow, let's put on our thinking caps and try to envisions what Pearlstein's scare story would look like. Currently, the euro is equal to around 1.45 dollars, there are approximately 6.5 yuan to a dollar and around 80 yen. Suppose we don't follow the Wall Streeters wishes. Will the dollar fall to 3 to a euro, will it only be worth 3.5 yuan and 40 yen?
Does anyone think this story is plausible? We supposedly have been begging China to raise the value of its currency by 20 percent, is China's leadership suddenly going to sit back and let the yuan rise by 100 percent? What happens to China's export market in this story? The same is case for our other trading partners. Europe will lose its export market in the U.S. and suddenly U.S. made goods would be hyper-competitive in its domestic market. Japan, Canada and everyone else would face the same situation.
These countries will not allow their economies to be destroyed by the loss of the U.S. export market and a surge of imports from the United States. They will undoubtedly take steps to stop and reverse any free fall of the dollar, if we did begin to see it.
In other words Pearlstein and the others are peddling total nonsense when they try to push this scare story. The bottom line is that they want to cut benefits to the middle class. They don't have a good story to sell a policy that will be harmful to large segments of the population, especially when the Peter Petersons of the world are making out like bandits. So they make stuff up.
As every economist knows the story of our deficit in the short-term is the downturn created by the collapse of the housing bubble. The deficit is propping up the economy following the loss of $1.2 trillion in private sector demand.
The deficit story in the long-term is health care. Our health care system is out of control. Fixing health care would end the deficit problem, but this would reduce the income of the insurance industry, the pharmaceutical industy and other powerful interest groups. So, the Washington Post would rather just see people go without health care. Hey, someone's got to pay.
The reality is that if the US government didn't sustain a deficit right now, the Great Recession would be the Great Depression II. But nobody in the debate is willing to admit to that. Instead, they scare up the bogeyman to ensure that deep-pocketed interest groups come out of this mess with their pockets full while most Americans have their pockets picked, yet again, by those with the politician's ears.
Here is a post by the economist Mark Thoma that lays bare the truth about corrupted politics:
Jon Faust of Johns Hopkins Center for Financial Economics:Go read the original post to get the embedded links.Reject Greenspan’s Bleak Vision, by Jon Faust: Alan Greenspan recently argued in the FT that the Dodd Frank Act fails to meet the test of our times. In defense of this view, Greenspan paints a disturbing view of the modern world as a financial dystopia in which humans are at the mercy of a financial machine they have built but can no longer hope to manage. Greenspan argues,Greenspan is yesterday's news, and the substance of what he says won't have much impact on policy. But what he is arguing is notable because it represents a common point of view that Dodd-Frank will do little except reduce economic growth and, to the extent possible, it should be reversed.The problem is that regulators, and for that matter everyone else, can never get more than a glimpse at the internal workings of the simplest of modern financial systems. ... With notably rare exceptions (2008, for example), the global “invisible hand” has created relatively stable exchange rates, interest rates, prices, and wage rates.... Greenspan’s bleak vision, like Orwell’s before him, may prove correct. My view is that the financial crisis was not a sad by-product of modernity but rather a new episode in a very old story: systems that allow risk taking and innovation are inherently subject to periodic crises. We can surely avoid another crisis by outlawing all risk taking. The alternative is to strive provide a stable backdrop in which productive risk taking can flourish. The history of progress financial progress has, arguably, been one of generally increasing stability -- in economies where development has been allowed to occur -- supported by an evolving system of market and political institutions, laws and regulations.
Greenspan is right that the Dodd Frank Act, like every hasty response to upheaval, is grossly imperfect. The Patriot Act comes to mind. The Federal Reserve Act of 1913 was itself a crisis response and was substantially modified over more than 20 years before reaching the form we recognize today.
We should continue the job of reform and not surrender to Greenspan’s dystopian vision.
And the financial industry is taking advantage of this. While our attention is diverted to other matters, e.g. protecting social insurance from the latest onslaught from the right, the financial industry is quietly -- and in many cases successfully -- pushing to ease the restrictions in Dodd-Frank (you can track changes to Dodd-Frank here). Too many people still believe that anything that's good for the bottom line in the financial sector is good for America despite recent evidence to the contrary.
I don't think we'll ever be able to completely prevent crises, but we can reduce the damage that a crisis can do, and we can make crises rarer than they've been recently. However, that requires doing things that the financial industry does not like. With both parties dependent upon financial industry money to fund their reelection campaigns, and with so much of this under the public's radar, it's not at all clear that Congress will take the steps that need to be taken, or even hold the line on the regulations that are already in place.
Labels:
corruption,
deficit/debt,
fear,
financial crisis,
greed,
politics,
the Rich,
the Right,
United States
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