Tag Archives: Capitalism

For the Elite, The Ability to Buy Government Institutions is the Mark of a Free Country

01 Saturday Sep 2012

Posted by in Capitalism, Climate Change, Corporate State, Ecological Overshoot, Environmental Degradation, Inequality, Wall Street Fraud

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Democracy Now had an interesting little run-in with David Koch at the RNC that the corporate-laden media tried to sweep under the rug. With all the dittoheads in the audience chanting “USA! USA! USA!” as the Romneybot of the billionaires mouthed his platitudes, it was refreshing to see an actual journalist at work:


 
While oil and gas giant David Koch was protected from questioning by his ‘survivaball’ of humans that sprang upright around him, Amy Goodman was able to direct the same question to Edward Cox who answered in the following manner:

AMY GOODMAN: Are you concerned about, especially young people, looking at what’s happening in the country, where a handful of multi-millionaires and billionaires are so disproportionately determining the democratic process?

EDWARD COX: That’s a statement that isn’t true. This country is governed by the people. That’s what it’s always been based on.

RNC SECURITY 1: Will you keep this moving? One deep.

AMY GOODMAN: Yeah, I will. I will.

RNC SECURITY 1: OK, thank you.

AMY GOODMAN: OK, one deep, I got you. Mr. Cox answered a question. Why can’t—why can’t Mr. Koch answer a question? I only have one question.

KOCH HANDLER 2: He’s not going to answer. Get out of here.

If you really want to know how David Koch would have answered Amy’s question, a similar inquiry was put to him by Politicker “about the controversial level of influence major contributors have on American elections.” Here was his answer:

We have a free society and people are free to do what they want, you know, as long as they don’t hurt others and they obey the law,” Mr. Koch said. “So, I believe in free speech and if people want to spend money in politics or something else, it’s their right, nothing wrong with that. So, I endorse that.

So you see, as far as the elite are concerned, we live in a free society in which there should be no constraints on the corrupting influence that wealth has on government institutions and public policy. For them, freedom includes the ability to buy the instruments of government so that the interests of the elite may be best served rather than the common good of the citizenry who failed to rise to the ranks of the 0.001% in the game of capitalism. As Noam Chomsky explains in “Plutonomy and the Precariat: On the History of the U.S. Economy in Decline“:

For the general population, the 99% in the imagery of the Occupy movement, it’s been pretty harsh — and it could get worse. This could be a period of irreversible decline. For the 1% and even less — the .1% — it’s just fine. They are richer than ever, more powerful than ever, controlling the political system, disregarding the public. And if it can continue, as far as they’re concerned, sure, why not?

 
Going back to Chomsky’s article, the interests of the elite do not include facing up to the reality of climate change because it’s a direct threat to their power and the wealth they have hoarded. Capitalism must be defended at all costs, even if that means denying that this system is causing our own extinction:

…Practically every country in the world is taking at least halting steps towards trying to do something about it. The United States is also taking steps, mainly to accelerate the threat. It is the only major country that is not only not doing something constructive to protect the environment, it’s not even climbing on the train. In some ways, it’s pulling it backwards.

And this is connected to a huge propaganda system, proudly and openly declared by the business world, to try to convince people that climate change is just a liberal hoax. “Why pay attention to these scientists?”

We’re really regressing back to the dark ages. It’s not a joke. And if that’s happening in the most powerful, richest country in history, then this catastrophe isn’t going to be averted — and in a generation or two, everything else we’re talking about won’t matter…

In the minds of the elite, if they can’t keep a stranglehold on the world, then they’ll be damned if anyone else is going to be allowed to live on a habitable planet.


Free Market Blinders and the Coercion of Industrial-Corporate Capitalism

30 Thursday Aug 2012

Posted by in Capitalism, Consumerism, Corporate State, Environmental Degradation, Inequality, Wall Street Fraud

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I think many of us intuitively understand that free market ideologues have a narrow path to walk in order to keep afloat their construct of a world that is best run by the omnipotent and omniscient capitalist market system. Perhaps the idea that our globalized capitalist economy knows best is as damaging to society as the teachings of a fanatical cult urging all its members to drink from the poisoned chalice. Certainly the needs of the global capitalist economic system, currently propped up by money printing, supersedes all other considerations, including compassion for our fellow man and the well-being of the environment which is the forgotten lynchpin of the economy, not to mention the crucial factor in determining whether or not humankind continues to survive on this planet.

In the realm of the worker and the capitalist elite(the ones who own the means of production), the exploitation of humans on such a large-scale amounts to a society of wage-slave toiling zombies:

The distinguishing feature of a capitalist society is the commodification of human labour—and it is this that differentiated early modern England from any other nation. England was not the first country to develop long-distance trade or to plunder other parts of the world; throughout the fifteenth, sixteenth and seventeenth centuries, countries like Portugal, Spain and Holland exceeded England in these regards. What set English society of the time apart from its European rivals, however, was that it alone established an extensive labour market, the key to capitalist development. […]

On the labour market, every economic transaction touches directly on essential qualities of human life—material, social and moral. In exchange for wages, those who sell their labour power surrender to the capitalist ultimate control over the work to be done, its conditions, pace and organization. Rather than treating our creative energies as a unique source of personal identity, “the owners of the conditions of production treat living labour-power as a thing” (Marx, Capital, v. 1, trans. Fowkes, 1976, p. 989). The result is a profound personal alienation, a hollowing out of the meaning of life. This is why the poor, as we shall see, have historically resisted being driven into the labour markets as their only means of survival.

Reflecting on this relationship, Karl Marx described work under capitalism as alienated labour: Relinquishing control over her labour, the worker suffers an estrangement from an essential part of her humanity. As Marx (Wage Labour and Capital, Progress Publishers, 1952, p. 20) put it in one succinct passage:

“But the exercise of labour power, labour, is the worker’s own life-activity, the manifestation of his own life. And this life-activity he sells to another person in order to secure the necessary means of subsistence. Thus, his life-activity is for him only a means to enable him to exist. He works in order to live. He does not even reckon labour as part of his life, it is rather a sacrifice of his life. […]”

For the worker, in other words, work is a means to life, but not life itself. Real life begins after work, during “free time”. The familiar expression, “Thank God It’s Friday”, is a depressing acknowledgement that work for the majority is oppressive, alienating, boring and dehumanizing. Of course, things look very different from the vantage point of the capitalist.

Since the worker alienates control of her labour to the employer, the capitalist is in a position to exploit that labour—to force the labourer to perform an amount of work that exceeds the value of the wages paid. Indeed, this is the whole point of the transaction for the capitalist: to make a profit on the purchase of labour by getting workers to produce more value than what they are paid. And this difference between labour’s output and the wages paid—called surplus value—is the secret to the massive inequalities of capitalism: enormous amounts of the wealth produced by workers accumulate in the hands of the owning class.

And our economic system labels everyone the cold and dehumanizing term of “consumers”. Your behavior is methodically studied and cataloged so that the system can exploit your consumerist tendencies:

When you accept the label of ‘consumer’, you accept that you have become a financial object, willing to be manipulated by whatever marketing tricks abound. Consumer choice would be far better entitled ‘Conchoice’, a term describing the true level of choice that individuals are provided with, should they find themselves within the consumer culture.

Here is an email from Darbikrash, entitled ‘Buy or Die’, which illustrates the mind-numbing, invasive nature of corporations and the consumer culture:

…As there are too many goods chasing too few consumers (with any money left) the end game is to invent markets, to cajole and hoodwink people into believing they need something that they really don’t, and then to create products to port into this fabrication, rotating through product ideas at high speed to “see what sticks”.

What is really laughable is the degree of planning, co-ordination and control that exists in a typical retail outlet, say for example, Bed, Bath and Beyond. Every square inch of that jumbled, packed to the rafters collection of junk and useless assorted trinkets is planned. The product lineout is planned seasonally, and rotated to reflect the calendar quadrant. Each product, each one, is placed at the precise height, shelf location, and aisle location to optimize traffic and elicit the best response to a shoppers’ buy signals. The orientation of the aisles, the sequence to which high demand products are placed to maximize traffic to get to that product is profound. They know with statistical certainty which direction you will turn your shopping cart when you enter the store and when you reach the end of a given aisle.

They run full scale mock-ups or “focus groups” to optimize traffic patterns to increase the sales volume of the highest margin items. Shelf placement is determined by the highest margin. Products with lower margins are back charged to the manufacturers with “slotting fees”, bribes in effect to obtain higher shelf placement in a more lucrative aisle.

The store locations and real estate acquisition decisions are made with greater precision than a military invasion of a foreign country, and in many ways it is just that. They know to 6 significant digits the average household income within a 40 mile radius of each store location. They know how many times you leave the house to buy a product, and how far you are willing to drive to get it. They know if you’re male or female, married or single, and they know the preference curves of your demographic. They know how close to the entrance you will want to park before you drive off in disgust, and they know what type of music to play over the loudspeaker to increase your propensity to buy. They know how many visits you’ll make (on average) per calendar quarter, and the average amount of money you’ll spend at each visit, to incredible accuracy.

But just try and pass a law that restricts a multi-national from acting as a sovereign state. Just try to pass something that will put consumer protections in place. Imagine the uproar if there was an initiative to place healthy food in the front of a store and unhealthy food in the back, for example. There would be riots in the streets, with calls of Communist and Police state tactics shouted from every corner.

Who runs this country?

A Few Apocalyptic Headlines and a Moment of Clarity With a Glass of Wine

28 Tuesday Aug 2012

Posted by in Capitalism, Climate Change, Ecological Overshoot, Environmental Degradation, Pollution

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Apocalyptic headlines seem to be daily occurrences now. Here’s just a few headlines that grabbed my attention over the last week(click on them to go to the original article):

Form the article:

Why do we care?,’’ Abdalati, an ice scientist, asked. ‘‘This ice has been an important factor in determining the climate and weather conditions under which modern civilization has evolved.’’

Scientists sometimes call the Arctic the world’s refrigerator and this is like leaving the fridge door open, Scambos said.

‘‘This is kind of a knob on global weather,’’ Wagner said. ‘‘We don’t know the impact yet of fiddling with it.

When people in my house leave the fridge door open, I get pissed and close it. The electric bill goes up due to an overworked fridge trying to cool the food. The Earth, unfortunately, has no ability to shut the door that the human species has permanently torn off its hinges, irreparably destroying the thermostat. On the other hand, the Earth doesn’t really care that we have doomed ourselves to extinction.

Back in 2009, a Lieutenant Vasquez of the U.S. Navy made the following comments which sum up how industrial civilization is perpetuating its own demise:

“It makes me uneasy anyway to think that we’re going to let a trend caused by global warming – the melting of the ice – allow us to explore and exploit more fossil fuels, which led to the warming in the first place.

“That seems wrong-headed to me, but nevertheless it’s likely to happen and there’s already a debate about exactly who’s got the rights to the minerals and the oil that’s there under the Arctic continental shelf, and how to go about exploiting it.

“It’s unfortunate, from a broader view, understanding the science of what the future holds, but I think it’s inevitable because oil and gas are going to be extremely valuable in the coming century as supplies dwindle.”

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From the article:

Tree-ring chronologies from long-term climate records show the western U.S. drought is already the most severe of the past 800 years. It will exceed the 1930s-era Dust Bowl with more consecutive dry years.

Less rainfall is expected in the U.S. West in each of the next 80 years than the annual average level during the drought of 2000 through 2004, the op-ed continues. Schwalm (an earth scientist), Williams (a geographer) and Schaefer (a National Snow and Ice Data Center scientist) analyzed that extreme drought in a new study in the journal Nature Geoscience.

Climatologists say we will experience reduced agricultural productivity, scarcer water resources and carbon sequestration (plants turning carbon into oxygen). The climatologists previously reported in a scientific journal that drought already has halved the amount of carbon dioxide they normally photosynthesize.

OK, that’s enough to scare any of us who studied biology out of our wits. But there’s more.

Major river basins show flow reductions of 5 to 50 percent. Western crop yields are down by 13 percent, with many local cases of crop failure….

Right now we are living in the glory days known as the “wet years”. Our descendants, if there are any, will look back in anger at their forefather’s myopic and self-destructive worship of economic growth and profit at the altar of an economic system they proclaimed to be the greatest the world has ever seen – capitalism. As has been said by a few wise people, “We can either save ourselves, or we can save capitalism.”

The above article is in reference to a detailed scientific report covered in the NT Times.

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From the article:

…Climate change is projected to increase the frequency, intensity, and duration of droughts, with impacts on many sectors, in particular food, water, health and energy,” WMO secretary general Michel Jarraud said. “We need to move away from a piecemeal, crisis-driven approach and develop integrated risk-based national drought policies.”

Mannava V K Sivakumar, director of WMO’s climate prediction and adaptation branch, says only Australia has a national policy toward drought and the advantage of a policy – rather than a disaster management, which some countries have – is that national action is required no matter who is in political power.

Australia’s government says its 2004 policy is no longer sufficient to deal with climate change, however, and over the past two years it has tried a pilot programme in western parts of the country aimed at shifting from a crisis-oriented approach to risk management.

Sivakumar said the agency is also encouraging more continuing support especially for “the poorest of the poor”, small farmers whose daily wages determine whether they and their families will eat on any given day.

If you’ve been paying attention, our system of transnational capitalism and globalization has ushered in a global land grab which I blogged about here. From where I’m sitting, there appears to be no concern for what’s really sustainable or socially just, but what the monied interests can steal from the weakest and most impoverished living on our planet.

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The spread of exotic diseases is a well-known effect of climate change, which is playing out before our very eyes in real-time today.

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From the article:

Leading water scientists have issued one of the sternest warnings yet about global food supplies, saying that the world’s population may have to switch almost completely to a vegetarian diet over the next 40 years to avoid catastrophic shortages.

Humans derive about 20% of their protein from animal-based products now, but this may need to drop to just 5% to feed the extra 2 billion people expected to be alive by 2050, according to research by some of the world’s leading water scientists.

“There will not be enough water available on current croplands to produce food for the expected 9 billion population in 2050 if we follow current trends and changes towards diets common in western nations,” the report by Malik Falkenmark and colleagues at the Stockholm International Water Institute (SIWI) said….

…”Nine hundred million people already go hungry and 2 billion people are malnourished in spite of the fact that per capita food production continues to increase,” they said. “With 70% of all available water being in agriculture, growing more food to feed an additional 2 billion people by 2050 will place greater pressure on available water and land.

As George Dvorsky points out: “…it’s not enough for the researchers to suggest that switching to a non-meat based diet is the solution. Agriculture in general takes a tremendous toll on the environment and is a major contributor to the ongoing depletion of water reserves. It’s estimated, for example, that in the US, withdrawn surface water and groundwater use for crop irrigation exceeds that for livestock by about a ratio of 60:1. The issue, therefore, would seem to be one about the production of potable water and the development of more sustainable agricultural techniques…”
But I really don’t think we’ll be able to pack in a few more billion people on this planet at our current rate of destruction. Cannibalism might be how some get their allowance of meat in the future.

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from the article:

Life in the world’s oceans faces far greater change and risk of large-scale extinctions than at any previous time in human history, a team of the world’s leading marine scientists has warned.

The researchers from Australia, the US, Canada, Germany, Panama, Norway and the UK have compared events which drove massive extinctions of sea life in the past with what is observed to be taking place in the seas and oceans globally today.

Three of the five largest extinctions of the past 500 million years were associated with global warming and acidification of the oceans – trends which also apply today, the scientists say in a new article in the journal Trends in Ecology and Evolution.

Other extinctions were driven by loss of oxygen from seawaters, pollution, habitat loss and pressure from human hunting and fishing – or a combination of these factors….

…“It is very useful to look back in time – because if you forget your history, you’re liable to repeat it.”…

…“We need to understand that the oceans aren’t just a big dumping ground for human waste, contaminants and CO2 – a place we can afford to ignore or overexploit. They are closely linked to our own survival, wellbeing and prosperity as well as that of life on Earth in general.

“Even though we cannot easily see what is going on underwater, we need to recognise that the influence of 7 billion humans is now so great it governs the fate of life in the oceans. And we need to start taking responsibility for that.”…

…we need to stop releasing the CO2 that drives these massive extinction events, curb the polluted and nutrient-rich runoff from the land that is causing ocean ‘dead zones’, manage our fisheries more sustainably, and protect their habitat better….

I recall a quote from Philippe Cousteau Jr., the grandson of world-renowned environmentalist Jacques Cousteau:

“I could cut my leg off, I could cut my arm off, I could gouge my eye out, I’d still probably survive, but not very well, and that’s what we’re doing to the ocean.

“It’s the life support system of this planet. We’ve been dumping in it, we’ve been polluting it, we’ve been destroying it for decades, and we’re essentially maiming ourselves… It’s not a question of whether the oceans can take anymore. The ocean can’t take any more. They couldn’t take any more fifty years ago. 

”The question is, ‘when are we going to stop?”

Yes, that is the question of the ages. And the answer is that we won’t stop until our economic system collapses.

 

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…And the above article near my own stomping grounds. You know things are going haywire when flood insurance is needed for a suburban neighborhood located in the desert.


King Romney’s Dream for America: Slave Labor in Barb-Wired Factories & a Double Down on Fossil Fuels

26 Sunday Aug 2012

Posted by in Capitalism, Corporate State, Environmental Degradation, Inequality, Peak Oil, Wall Street Fraud

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On the Labor front….

I came across the above video yesterday evening. It’s a recording of Mitt Romney recounting his days at Bain Capital when he was off-shoring U.S. manufacturing to slave labor camps in China. From the video I’m assuming that America’s gift to the world, as Romney refers to it, is neoliberal capitalism and the privilege that economic system brings to the masses who can enjoy working for pennies per hour in a sweatshop factory complete with dormitories holding “12 girls per room”, all of which is enclosed by barb-wired fencing. And as Romney relates, the fences are to keep the hoards of people out who are dying to fill a position in the factory as soon as someone falls over. For Romney and the typical vulture capitalist, this is a wet dream: endless numbers of cheap laborers ready to fill assembly-line positions which are unencumbered by unions, safety regulations, and basic rights for workers. In such factories humans are reduced to cattle in order to extract the maximum profit. A Foxconn executive expressed the general sentiment of corporate capitalists when he referred to his workers as “animals” earlier this year. Despite recent reports by the Fair Labor Association (FLA) on the heels of an eye-opening report on labor conditions, the reality on the ground, as Romney can attest to from his days at Bain, is the same as it ever was:

As reported here, China Labour Watch is claiming that bribery is undermining the audit system. China Labour Watch founder Li Qiang has not minced his words: “Although the working hours at Foxconn have been reduced to less than 60 hours per week, the intensity of the hourly work has been increased. According to our follow-up investigation, the workers have to complete the workload of 66 hours before within 60 hours now per week. As a result, the workers get lower wages but have to work much harder and they are not satisfied with the current situation. The harsh working conditions are by no means isolated to just Foxconn but exist throughout Apple’s supply chain. However, that report only focused on Foxconn factories. It is Apple’s entire supply chain system that should be responsible for the squeezing of workers.”

On the Energy Front:

King Romney is going to double down on fossil fuels in America, further dismantling regulations and awarding more tax breaks for Big Oil:

Romney unveiled his energy plan, which makes no mention of climate change and focuses on reaching energy independence by 2020 through increased extraction and use of oil, gas and coal, accompanied by reduced regulation for these industries.

The plan underlines the fact that the Republican Party and the oil, gas and coal industries, long in agreement on policy and ideology, have grown closer than ever before. Romney, whose top energy adviser is the wealthiest oilman in the country, is on pace to raise more money from these industries than either George W. Bush or Sen. John McCain (R-Ariz.) did when he ran for president. The industries are also pumping millions into the new unlimited money vehicles, super PACs and dark money nonprofits, that are spending tens of millions of dollars per month to influence the election…

…A central part of the plan is taking the power to permit and license new onshore drilling on federal lands out of the hands of the federal government and putting it into the hands of the states. That means that states like Alaska or North Dakota, which is enjoying a massive oil boom under the current regulatory regime, would be able to allow drilling on federal lands with no oversight from Washington.

North Dakota stands out, in particular, as it is where Romney’s top energy adviser, oil billionaire Harold Hamm, is making his fortune. Hamm, whose stump speech is only three words, “Beat Barack Obama,” has given $985,000 to Restore Our Future and raised money for the Romney campaign. He would profit greatly from this change in policy as his company, Continental Resources, would be freed to drill beyond the Bakken fields in North Dakota using techniques including hydraulic fracking and horizontal drilling….

…Among many other policies supporting the industry, Romney calls for a repeal of regulations limiting the amount of mercury, a hazardous pollutant, that can be emitted from coal and oil power plants…

Overlooking the catastrophic externality of climate change, notice that Romney is heralding America’s energy independence through his plan of ‘Drill, Baby, Drill’ of fossil fuels. If you look at the following graph, you’ll see that there is no amount of drilling we could do within America to achieve fossil fuel energy independence:

As you can see, America hit peak oil around 1970 at 9.637 mbpd (million barrels per day), as predicted by Hubbert, and then in 1993 America’s domestic oil production was surpassed by consumption, a point from which we have never recovered. Even with the recent drastic drop in consumption due to an anemic economy, we are still importing around 10 to 11 MBPD while domestic production is somewhere between 7 to 8 MBPD. Domestic production would have to double from the current rate or total consumption, which sits currently at roughly 18 to 19 MBPD, would have to be halved while allowing for the requisite economic growth that we worship. That’s not going to happen. As Loren Steffy explains, “U.S. oil production gains are like water pumps on the Titanic“:

…The much-ballyhooed increase in U.S. production simply isn’t enough to have a meaningful effect on global oil prices, which doubled from 2005 to 2011. That ultimately is the biggest factor in setting prices for retail gasoline.

U.S. production gains look impressive, but much of it offsets declines earlier in the decade because of major hurricanes that disrupted offshore and Gulf Coast facilities. Domestic production was 7.5 million barrels a day in 2010, according to the Energy Information Administration, and that number probably increased to about 7.7 million barrels last year, estimates Jeffrey Brown, an independent petroleum geologist in Fort Worth who writes frequently on oil issues.

In 2004, before the spate of hurricanes, production was 7.2 million barrels. That means domestic production hasn’t increased more than about 500,000 barrels a day despite the fracking binge and other efforts to encourage drilling. During the same period, net exports for all countries in North America — including Canada, Mexico and Venezuela, some of our biggest suppliers — fell by 1.4 million barrels, or 23 percent, according to Brown’s analysis.

Brown compares the situation to water flowing into the Titanic after it hit the iceberg.

“Let’s assume that water is pouring into the ship 10 times faster than than water is being pumped out,” he said. “The water being pumped out is analogous to the slow increase in U.S. crude oil production. The water flowing in is analogous to declining annual net exports. Guess which metric most people seem to be focused on?”

That doesn’t even account for China, India and other rapidly developing countries, whose oil imports are rising sharply, increasing the competition for oil with countries like the U.S.

“So, while slowly increasing U.S. crude oil production is very important, the dominant trend we are seeing is that developed oil importing countries like the U.S. are being gradually priced out of the global market for exported oil,” Brown said…

King Romney, nevertheless, will use the rallying call of his energy plan to increase domestic oil production, with its attached gifts of even more environmentally destructive deregulation and kleptocratic giveaways to Big Oil from the taxpayer, as a reason for voters to put him into the White House. But as pointed out at Fair.org, this is all a smokescreen manipulating public perception:

In a New York Times story (8/24/12) about Mitt Romney’s energy proposals, reporters Eric Lipton and Clifford Krauss make this observation:

With gasoline prices again approaching $4 a gallon, Mr. Romney, the presumptive Republican nominee, is also trying to merge energy and economic policy in a way that will make voters see increased energy production as a pocketbook issue.

Note that Lipton and Krauss don’t say that increased U.S. energy production will actually affect the $4-a-gallon price of gas and hence the voters’ pocketbooks; that would be inaccurate, since oil is a global commodity and it’s impossible for the U.S. to increase its production enough to change it substantially. In fact, with the formulation “in a way that will make voters see,” the Times  reporters suggest that they are well aware that increased oil drilling will not actually alter gas prices–that this is a matter of changing public perceptions, not economic realities.

But then, Lipton and Krass don’t do anything in their piece to let the reader know that the implied connection between increased drilling and lower gas prices is fraudulent…

The doublespeak used by politicians of all stripes to bend reality is the same as it ever was.

The System Has Reached Entropy

24 Friday Aug 2012

Posted by in Capitalism, Climate Change, Consumerism, Corporate State, Empire, Environmental Degradation, Inequality, Military Industrial Complex, Peak Oil, Pollution, Wall Street Fraud

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King Romney: Stuck in Cognitive Dissonance

12 Sunday Aug 2012

Posted by in Climate Change, Peak Oil

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I did not waste my time reading King Romney’s 2010 book No Apology; The Case for American Greatness, but someone who did sacrifice some eyesight to it has some interesting observations which I’ll comment on. Romney may be the only Presidential candidate to explicitly acknowledge in writing the fact of peak oil:

Many analysts predict that the world’s production of oil will peak in the next ten to twenty years, but oil expert Matt Simmons, author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, presents a compelling case that Middle Eastern oil production may have already reached its peak.  Simmons bases his contention on his investigation into the highly secretive matter of the level of reserves in the Saudi oil fields. But whether the peak is already past or will be reached within a few years, world oil supply will decline at some point, and no one predicts a corresponding decline in demand. If we want America to remain strong and wish to ensure that future generations have secure and prosperous lives, we must consider our current energy policies in the light of how these policies will affect our grandchildren. (pg 233)

Romney also acknowledges climate change, but then enunciates the contradiction the vast majority of the population cling to, which is the notion that we can limit GHG within our fossil-fuel based industrial civilization while maintaining economic growth and business as usual. This fantasy will never be, even if we were able to magically enlarge the planet and its resource base in order to accommodate more growth. So in the end, Romney is not a true Peak Oiler. His “energy policies” ultimately involve the ubiquitous growth imperative:

“It’s impossible not to take a look at our current energy policies without considering the question of climate change.  I believe that climate change is occurring – the reduction in the size of global ice caps is hard to ignore.  I also believe that human activity is a contributing factor.” (pg 227)

Romney hedges this statement in the next paragraph by saying he is “uncertain how much of the warming is attributable to man and how much is attributable to factors out of our control.” Three pages later, Mitt concludes his discussion of climate change saying that “Internationally, we should work to limit the increase in emissions in global green house gases, but in doing so, we shouldn’t put ourselves in a disadvantageous economic position that penalizes American jobs and economic growth.”  (pg 330)

Isn’t it amazing that a person who may be the next President (even though it is just a PR position for the corporatocracy) can talk about the reality of peak oil while still mouthing the imperatives of economic growth? How long will this cognitive dissonance hold out? I give it no more than a decade, at the most, if our financial system manages to be kept propped up for that long. For to finally come to grips with the finiteness of the earth and its resources and the illusoriness of the economic growth dictate is to admit that the “American way of life” never was “non-negotiable.”

Iran and Its Threat to the U.S. Dollar Hegemony

10 Friday Aug 2012

Posted by in Capitalism, Corporate State, Empire, Military Industrial Complex, Peak Oil

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In a recent article by Christopher Doran, author of Making the World Safe for Capitalism: How Iraq Threatened the US Economic Empire and had to be Destroyed, the underlying reasons for America’s bellicosity toward Iran are revealed. Threatening the status of the dollar as the world’s reserve currency seems to have resulted in a death sentence for a few countries, most recently Iraq and Libya:

…By accepting and encouraging countries to pay for its oil in currencies other than the U.S. dollar, Iran has deliberately taken the same action that, I argue in Making the World Safe for Capitalism, led directly to the U.S. invasion of Iraq. In September 2000, Saddam Hussein announced that Iraq would no longer accept the “currency of its enemy”, the U.S. dollar, and from that time onwards any country that wanted to purchase oil from Iraq would have to do so in euros. I further argue that the motivation for the United States’ invasion of Iraq was to eliminate the threats a post-U.N. sanctions Iraq posed to the key underpinnings of American economic hegemony, and to install a pro-U.S. client state and permanent American military presence in the region. The book examines how a post-U.N. sanctions Iraq either directly threatened the ongoing success of American economic power, or provided enormous opportunities to extend it.

All the same considerations are in play with Iran, starting with Iran’s direct threat to the dollar as the dominant global reserve currency. But that is just one aspect of the much larger issue: that Iran openly defies U.S. neoliberal hegemony. Like Iraq pre-invasion, Iran is not a member of the WTO, has not had any dealings with the IMF since 1984, and does not have any debt with it or the World Bank. Like Iraq before it, and evidenced by China’s oil development contracts, the U.S. and its oil companies are cut out of any future oil development in Iran. Like a post-sanctions Iraq, Iran has the potential to be the dominant power in the region and to provide development assistance on a vastly different model to that imposed by the WTO, World Bank and IMF, against which so much of the Middle East is rebelling….

The article details how the BRIC countries and many other nations are circumventing the U.S. sanctions with Iran and using gold as well as other commodities to buy Iranian oil. The sanctions have pretty much been rendered worthless because so many countries are defying what was designed to isolate and starve Iran into submission.

He explains how the Petrodollar System works:

In a nutshell, any country that wants to purchase oil from an oil producing country has to do so in U.S. dollars. This is a long standing agreement within all oil exporting nations, aka OPEC, the Organization of Petroleum Exporting Countries. The UK for example, cannot simply buy oil from Saudi Arabia by exchanging British pounds. Instead, the UK must exchange its pounds for U.S. dollars. The major exception at present is, of course, Iran.

This means that every country in the world that imports oil—which is the vast majority of the world’s nations—has to have immense quantities of dollars in reserve. These dollars of course are not hidden under the proverbial national mattress. They are invested. And because they are U.S. dollars, they are invested in U.S. Treasury bills and other interest bearing securities that can be easily converted to purchase dollar-priced commodities like oil. This is what has allowed the U.S. to run up trillions of dollars of debt: the rest of the world simply buys up that debt in the form of U.S. interest bearing securities.

The flip-side of this are the countries that produce and export oil, in particular Saudi Arabia and the other Arab producers. The only way the system can possibly work is if oil producers refuse to accept anything other than U.S. dollars as payment for their oil. This they have done since the Nixon Administration’s manipulation of the OPEC oil crisis in the mid-1970’s, which succeeded in getting Saudi Arabia, traditionally the world’s dominant producer, to agree to accept only dollars for oil. The Saudis used their influence to get the rest of OPEC to agree as well. In return, the U.S. offered to militarily defend not so much Saudi Arabia, but the horrifically repressive monarchy that ruled it.[11]

But there was a kicker: Nixon and his Secretary of State Henry Kissinger also got the Saudis to agree to invest their mega oil profits in the U.S. economy. In addition to buying interest bearing U.S. government securities, the Saudis also invested in New York banks. Because the OPEC oil embargo had quadrupled global oil prices, the Saudis and other Arab producers suddenly had a great deal of money to invest. The money parked in those New York banks then became available to be loaned to the rest of the world, which faced major financial crises due to—yes, you guessed it—the sudden quadrupling of oil prices. By the year 2000 and Iraq’s dramatic switch to selling Iraq’s oil in euros, Saudi Arabia had recycled as much as $1 trillion, primarily in the United States. Kuwait and the United Arab Emirates recycled $200–300 billion.[12]

And because those loans were in U.S. dollars, they had to be paid back in U.S. dollars. When U.S. interest rates skyrocketed to 21 percent in the early 1980’s, interest on the loans also skyrocketed. This in turn precipitated a third world debt crisis, which was mercilessly exploited by Wall Street and the U.S. In this case, the exploitation came in the form of requiring countries to “structurally adjust” their economies along neoliberal lines in return for World Bank and IMF bailout loans. By 2009, the total debt owed on these bailouts and other loans was an astounding $3.7 trillion. In 2008, they paid over $602 billion servicing these debts to rich countries, primarily the United States.[13] From 1980 to 2004, they paid an estimated $4.6 trillion.[14]

The history of how this came about is fascinating, and I discuss it in detail in Making the World Safe for Capitalism. The short version is that from the 1944 Bretton Woods agreement which set up the International Monetary Fund and the precursors to the World Bank and World Trade Organisation, the dollar was accepted as the international currency for all trade. Crucially though, the dollar was backed up by gold, which was fixed at $35 an ounce. This meant the U.S. had to have enough gold on hand to back up any and all dollars it printed.

Faced with escalating costs from the Vietnam War, in the early 1970s Nixon abandoned the gold standard and replaced it with the petrodollar system described above. Almost simultaneously, he abolished the IMF’s international capital constraints on American domestic banks, which in turn allowed Saudi Arabia and other Arab producers to recycle their petrodollars in New York banks.

The petrodollar system, and U.S. ability to manipulate the dollar as the global reserve currency and hence global debt, has been the bedrock of American economic power...

…But as the article explains, since the financial crisis of 2008, the status of the dollar as the reserve currency of the world has been thrown into question and challenged by even formerly staunch U.S. allies. As the lifeblood of a country’s economy, i.e. oil, becomes increasingly hard to come by, the demands of an old ‘friend’, named Uncle Sam, will likely fall on deaf ears, especially when he’s now seen by the rest of the world as a drunken, pickpocketing buffoon swinging at shadows.

The Amorality of Science and the Rise of Transnational Capitalism

09 Thursday Aug 2012

Posted by in Capitalism, Corporate State, Inequality

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Continuing on my last post’s theme of technology and man’s insatiable quest for more lethal weapons, Chris Hedges wrote an article this week in remembrance of the 60th anniversary of the Hiroshima and Nagasaki bombings. He reminds us that science and technology are amoral, advancing of their own accord, and that they have become the new religion, heralding solutions to all that ails modern man. Geoengineering, anyone?

The atomic blasts, ignited in large part to send a message to the Soviet Union, were a reminder that science is morally neutral. Science and technology serve the ambitions of humankind. And few in the sciences look beyond the narrow tasks handed to them by corporations or government. They employ their dark arts, often blind to the consequences, to cement into place systems of security and surveillance, as well as systems of environmental destruction, that will result in collective enslavement and mass extermination. As we veer toward environmental collapse we will have to pit ourselves against many of these experts, scientists and technicians whose loyalty is to institutions that profit from exploitation and death…

It was science, industry and technology that made possible the 20th century’s industrial killing. These forces magnified innate human barbarity. They served the immoral. And there are numerous scientists who continue to work in labs across the country on weapons systems that have the capacity to exterminate millions of human beings. Is this a “rational” enterprise? Is it moral? Does it advance the human species? Does it protect life?

For many of us, science has supplanted religion. We harbor a naive faith in the godlike power of science. Since scientific knowledge is cumulative, albeit morally neutral, it gives the illusion that human history and human progress also are cumulative. Science is for us what totems and spells were for our premodern ancestors. It is magical thinking. It feeds our hubris and sense of divine empowerment. And trusting in its fearsome power will mean our extinction…

Now on to the second point – Transnational Capitalism. This is an excellent article written by a former hedge fund manager that gives an overall, system-wide summation of the capitalist system controlling the world. It’s well worth the read and helps to flesh out what I have alluded to in other posts – the emergence of an elite capitalist class that has no allegiance to any country and shares more in common with its global members than with the fellow countrymen and the nation-state from whence they originated. Some excerpts:

This federation of convenience by the global elite is a lingering problem for the lower economic classes in America. The U.S.-based CEO of one of the world’s largest hedge funds told Chrystia Freeland that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade.” Notice the CEO’s reference to “not such a bad trade” as representative of free market lingo, i.e., “trade.” Everything is measured in trade terms, like statistics, if you look in the mirror, you’ll see the reflection of a commodity.

This viewpoint is typical of how the global ruling class thinks, and proof positive of it is reflected in today’s politics in America. The right wing embodies this same viewpoint by striving to strip the federal government of public welfare services, privatizing governmental assets, and undercutting benefits to society at large, especially via manipulation of the federal tax code. This same occurrence is happening in real time right now in Greece, Spain, and Portugal as the cadre of elite technocrats out of Brussels, de facto capital of the EU, dictate nation-state policies to those three forlorn countries. The world’s elites love hard times/recessions because of the set up. It makes it easier for them to strip away government largess via austerity programs that they force upon governments, and it allows for undercutting the wages of average citizens as well as dismantling of governmental regulations. This, in turn, prompts protestors to congregate in the streets of capital cities, but over time, the capitalist class waits them out, temporarily residing in one of their homes elsewhere, away from danger, and with time on their side, the capitalists win.

Upon reading Chrystia Freeland’s article in Atlantic Magazine, one comes away with the impression the elite capitalists look down with disdain upon the masses of people, expressing a contempt for those in society who do not have the personal merit to rise to the occasion of wealth and power. Meritocracy is their biblical source, not equality and fraternity. These are hackneyed terms from ‘America of old’ and no longer applicable in the new technologically enhanced world, which itself is the major source of many of the new self-made wealthy.

This global ruling class controls the levers of an emergent trans-national state apparatus of global decision-making and orders emanate from the IMF, World Bank, the EU, and the WTO. The ruling bloc of this world order consists of chieftains of global corporations and financial conglomerates, major players in the dominant political parties of the world, media conglomerates, and technocratic elites….

…

According to William Robinson: Transnational capital has been able to break free of nation-state constraints to shift the correlation of class and social forces worldwide sharply in its favour and to undercut the strength of popular and working class movements around the world. One new structural dimension of 21st century global capitalism is a dramatic expansion of the global superfluous population or that portion marginalized and locked out of productive participation … constituting some one-third of humanity. The need to assure the social control of this mass of humanity living in slums gives a powerful impetus to neo-fascist projects and facilitates the transition from social welfare to social control, otherwise known as police states. Over time, this system becomes ever more violent and the ability of economic power to determine electoral outcomes opens the door for 21st century fascism to emerge without a rupture in electoral cycles and/or a constitutional change.

The door for 21st century fascism has more than opened. It has been blown off the hinges…

Just as science is amoral, so is capitalism which treats everything living and inanimate as a commodity ripe for exploitation. Welcome to a world ruled by the new globe-trotting, predatory elite who will profit from what remains of the planet’s depleting resources and exhausted ecosystems while paying no heed to the plight of the masses or future generations.

“Earth provides enough to satisfy every man’s needs, but not every man’s greed.”
~ Mahatma Gandhi

Agent Orange

07 Tuesday Aug 2012

Posted by in Capitalism, Consumerism

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mozilo

Dateline 1981, Orange County, CA and what was to become ground zero for global mortgage fraud, perpetrated by the likes of Angelo Mozilla, nicknamed by the media Agent Orange for his decadent fake (and very nearly orange) tan of the criminal overclass, we begin with the nascent dawn of Reagan’s “Morning in America” on the cusp of the soon to break Savings and Loan Crisis.

The scene was a 2 ½ hour drive to a nondescript 3 bedroom tract home in Huntington Beach, about a mile or two from the ocean. It was the parent’s home of a fellow college student who was taking advantage of their parent’s vacation to host a party, replete with backyard keg and the requisite single light bulb lamp nearby to prevent spills.

With all the irony of the two working parent hierarchy of the times, the homeowners were so busy with their jobs that neither had time to go to the beach, the dreary patina of tract home living had quietly subsumed the idealism of living near the beach.

This was not lost on the college aged son, who upon learning that the house would be vacant, promptly released word of the party. We arrived to the house after the considerable drive, and found amplifiers and a drum set already assembled in the living room, with microphone stand at the ready. After mingling aimlessly for an hour or two amongst the preppy college students with Izod shirt logos and sweaters with arms carefully folded around their necks, the cacophony of Bob Seger and the “Silver Bullet Band” began to grate on our nerves.

There is only so much you can take, but we knew something they did not-there was to be a special guest.

Indeed, after another stultifying hour, a beat up van pulled up out front, and three guys wearing surfer shorts and tee shirts came inside and plugged in their guitars. They played but three songs, and this was one of them:

Afterwards, they abruptly left. In the vacuum left behind, there was a palatable unease, sweaters were nervously adjusted, no one really said anything. Someone put the Bob Seger album back on, which thankfully was put out of its misery with the elliptical trajectory of an angry beer bottle.

Forward to 2008, high rise office towers with names like “Dieco”, “Countrywide”, and “Indy Mac” prominently displayed, which housed platoons of tens of thousands of mortgage workers who filled these towers every day. Their “products” were mortgages and refi’s, doling out money to whoever had a pulse and a desire to own a piece of the American dream, then securitizing these phony loans to sell off to pension funds and other unsuspecting investors.
The well publicized financing arm of the mortgage crisis gets all the attention, but behind the scenes we have something much more interesting occurring. To illustrate, we again go to the epicenter of all that went wrong in the mortgage cum real estate biz, Orange County, CA.

To enable the construction of vast numbers of new homes that will serve as the collateralization of these new dollars to be leant, we need institutional infrastructure designed to encourage inventor participation and insure equity growth. In other words, we need giveaways.
With infrastructure too big a charter for small independent developers and investors, a new entity emerged, that of the Master Planned Community. Usually dominated by large regional landowners with significant political connections already in place, they began in earnest to create circumstances favorable to large scale tract development, a process that was prototyped with the first large scale master planned community in the ‘70’s (Irvine, CA), and then rapidly ported to other states and counties.

In California, Prop 13 limits the amount of YOY property tax that can be assessed. But to grow and develop hundreds of thousands of new homes, this requires infrastructure, such as schools, utilities and roads. In the first major attempt to privatize large swaths of the public domain, a bond mechanism legislation called “Mello-Roos” was enacted, enabling developers to externalize all of the infrastructure costs onto the homeowners in the form of a tax supplement, which is not governed by Prop 13. It is very nearly impossible to buy new construction in CA without falling under this forced bond payment. It is often very near 100% of the standard (mandatory) State property tax. The bonds are nominally for 20 years, but most homeowners will tell you they never go away, constantly renewed with no redress for residents.

This privatization sets in motion the walling off of entire communities, and in so doing, of course some type of privatized governance must be constructed and imposed on the new homeowners so as to “protect their investment”. This is done in the form of an H.O.A, or homeowners association, who govern and regulate the homeowners under a privatized army of volunteers, enforcing a Byzantine set of rules and regulations. They do so by collecting the H.O.A dues, which can range up to $800-900/month in some communities, paid monthly by each homeowner, and it should be noted that failure to pay will result in forfeiture of your property.

The bylaws and regulations that are administered by the H.O.A are published in a lengthy document (usually several hundred pages) listing all the infractions that can result in a penalty being assessed. They govern what color you can paint your house, what contractor you must use for painting your house, how neat your yard must be (mandatory landscaping) strict architectural rules (no changes allowed) and incredibly, how long your garage door may remain open during the day, how long your trash cans may remain on the street after pickup, and strict “lifestyle” provisions.
If you violate any one of the hundreds of regulations, you will be assessed a fine, and if you fail to pay the fine, you will forfeit your property. To enforce this, a group of volunteers usually “walks” the neighborhood, clipboards in hand, to note any and all infractions that can result in fines being assessed.

Hell hath no fury like a HOA privatized government volunteer with clipboard in hand and hard hat jauntily worn, the stern gaze of compliance ready to stare down errant homeowners foolhardy enough to think their carbon copy “Plan B” faux Mediterranean air conditioned nightmare is their castle. The lender has collateralized 30 years of any and all possible equity appreciation in the form of a mortgage, the HOA has established a privatized, regulation filled “government” that under the guise of mutual contractual consent has put in place rules and regulations that no public government on earth would get away with, sublimely forfeiting many constitutional protections (such as due process), including specifically forfeiting the ability to file homestead claims on your own property (protection for the primary residence from creditors in the event of a personal bankruptcy), the authoritarian noose of end stage capitalism begins to tighten the slipnot of compliance around the necks of the middle class homeowners, who almost universally wave their tiny flags and shout liberty, down with government, and up with free markets, blissfully unaware just how far down the river they have been sold.

Home ownership was originally advocated at the national level in the late ‘40’s just after WWII as a means to give the middle class a “stake” in their future, but mostly to discourage civil unrest under the principle that property ownership was an impediment to middle class organization of anti-establishment activities.

My, look how far we’ve come.