And This, Kids, Is Why We Can't Have Nice Things

It's not just that governments don't tax enough. It's that they don't tax big incomes and big wealth nearly enough. Economist and professor Richard Wolff argues that modern global capitalism is theft on a massive scale.

In modern capitalism, governments routinely borrow money. They do this to finance budget deficits that occur when governments raise less in taxes than they spend. Governments also borrow to invest in long-term projects of economic development. The swindling occurs when the lenders and borrowers—usually private financiers and career politicians—negotiate loans that serve their own particular interests at the expense of the taxpayers who eventually cover the costs of repaying the government’s loans plus interest on them. 

If governments raised enough taxes to cover their desired levels of spending, they would not need to borrow. Taxes imposed on the wealthiest corporations and individuals would be the most equitable strategy. The corporate wealthy protest, of course, threatening that if taxed, they might reduce their contributions to the economy (investing less, etc.). Most government politicians sympathize with those protests. Many come from the ranks of the wealthiest corporations and individuals (or aspire to join them). They share similar ideologies and depend on campaign donations from them. Compliant politicians typically exaggerate the negative aspects of taxing corporations and the rich. They rarely compare them to the negative effects of the alternatives: taxing middle and lower income people more or cutting government spending.

I can't quite explain it but I just keep coming back to a finance minister, a really rich guy, working for a trust fund boss, who blithely consigns the public to a future of "job churn." What was his name?

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Deficit finance—the polite veneer for this swindle—deepens inequality in the United States and everywhere else it is practiced. It redistributes wealth from the mass of people (taxpayers) to the richest who “save” by means of lower taxes and then “invest” those “savings” in government loans. In transferring money from the many to a few, deficit finance operates like a lottery.

Keep these thoughts in mind when the major impacts of climate change arrive and we can no longer afford to ignore them. By then we'll be playing a deep game of "catch up" and the costs we have so successfully fended off will be far greater. That's when you'll see the PPP scam, the public-private-partnership game at full bore.

I know, I know - the photo identifies Wolff as a Marxist economist. Well, unless you've had your head buried in the turnip patch, you should know that a good bit of what Marx wrote and we angrily denounced for decades, is coming to pass.  Even prominent, mainstream economists such as Nouriel Roubini admit as much.

Do You Think We're Not in the Grip of Nihilists?

In his book, "Collapse, How Societies Choose to Fail or Succeed," anthropologist Jared Diamond explores how societies past have repeatedly made absolutely rational, short-term choices that carried nihilistic consequences in the longer term. Societies have done things for their short-term benefit knowing full well that they would devastate future generations. Failure is often a choice.

We are one of those societies.

Among the crises we're facing - runaway climate change, overpopulation, rapid exhaustion of the planet's finite resources - is the Mother of them all, Earth's sixth mass extinction.

Now you might think that the prospect of mass extinction, in which complex life forms such as humans and other mammals are directly in the crosshairs, would trigger an appropriate response from our corporate and political leadership. If you did think that, you would be wrong.

Maybe you’ve read King Lear and remember this famous line: “‘Tis the time’s plague when madmen lead the blind.” The words were written more than 400 years ago as a comment on the deadly consequences of greed, delusion and political folly, but they could serve just as well as a Republican party slogan today. They’re a fitting description of the Republican party’s delusional campaign to deny the environmental crises that threaten our planet and our civilization. 

For decades now, Republican politicians and their patrons in the fossil fuel industry have used thinktanks, front groups and public relations operatives to promote faulty science and perpetuate the myth that the climate crisis is a hoax. This campaign of climate deception, which is elegantly documented in books like Merchants of Doubt, has exacted a huge toll on the planet and its people – it has sabotaged domestic and international efforts to combat greenhouse gas pollution and exacerbated a crisis that is acidifying oceans, melting polar ice caps, supercharging storms and making the Earth less hospitable to human and animal life. We have a name for the purveyors of this deceitful campaign: we call them “climate deniers”.

At least in the US the Republicans are open about it. They openly ridicule the prospect of mass extinction in Congress. Ain't gonna happen, that's an end of it, move on. Here in Canada we're more discrete. We prefer not to mention it at all, not after we've just grossly overpaid for a crazy pipeline with an election looming. Best if we just ignore it and hope no one notices.

Climate Change - Turns a Calamity into Catastrophe

Even the most affluent nation on Earth can't escape the knock-on effects of climate change. The Pentagon thinks of it as a "force multiplier." It magnifies difficulties, makes them more protracted and sometimes leaves irreparable damage in its wake.

That's what the United States is now facing from the devastation of Puerto Rico by Hurricane Maria, the mass depopulation of the territory.  From The Washington Post.


During the decade before Maria, economic decline and depopulation, a slower-moving catastrophe, had been taking a staggering toll: The number of residents had plunged by 11 percent, the economy had shrunk by 15 percent, and the government had become unable to pay its bills.

It already ranked among the worst cycles of economic decline and depopulation in postwar American history, and projections indicated that the island’s slide could continue for years.

Then came Maria.

Now, even as officials in Washington and Puerto Rico undertake the recovery, residents are expected to leave en masse, fueling more economic decline and potentially accelerating a vicious cycle.

“We are watching a real live demographic and population collapse on a monumental scale,” according to Lyman Stone, an independent migration researcher and economist at the Agriculture Department. The hurricane hit “might just be the kick in the pants Puerto Rico needs to really fall off this demographic cliff into total epochal-level demographic disaster.”

Whatever happens with Puerto Rico, moreover, will have far-reaching effects, because while the disaster is felt most keenly on the island, the accelerated exodus is already being felt on the mainland.

Cities popular with Puerto Ricans, such as Orlando, Hartford, Conn., and Springfield Mass., are bracing for more students, many of whom come from families living below the poverty level.

Politicians, meanwhile, are weighing the potentially significant electoral consequences of a wave of migrants expected to lean Democratic — especially in Florida. The swing state already boasts half a million Puerto Rican-born residents, and more are expected in Maria’s aftermath.

Indeed, at a news conference last week, Puerto Rico Gov. Ricardo Rosselló warned that without significant help, “millions” could leave for the U.S. mainland.

“You’re not going to get hundreds of thousands of Puerto Ricans moving to the States — you’re going to get millions,” Rosselló said. “You’re going to get millions, creating a devastating demographic shift for us here in Puerto Rico.”

Puerto Rico Treasury Secretary Raúl Maldonado has warned, meanwhile, that without more aid, the government could suffer a shutdown by the end of the month.
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“Even before Maria, you had what looked like a death spiral going on,” said Gregory Makoff, a bond researcher who worked on the Treasury Department’s Puerto Rico team and now is a senior fellow at the Center for International Governance Innovation. “Now it’s no longer theoretical. In a week’s time, they’ve lost another huge chunk of the population.”

For years before the economic slide, companies such as Merck, Johnson & Johnson and PepsiCo had collectively saved $2 billion or more annually under a key tax break that gave U.S. companies an incentive to set up operations on the island.

But in 2006, the tax break was eliminated, taking away a key incentive for companies to operate there. It was one of many factors blamed for the island’s decline.

Among the others: The island’s electrical power system is outdated and saddles islanders with bills roughly double what they are on the mainland; an exodus of doctors has opened holes in the health-care system; and the economy’s most critical sector, manufacturing, has been shrinking even more rapidly than the rest of the economy, affected not just by the lost tax break but also by global competition.

Only about 40 percent of people in Puerto Rico are employed or seeking work. By contrast, the U.S. figure for what economists call “labor force participation” is about 63 percent.

Finally, the government’s inability to pay off more than $70 billion in debt has provoked a congressionally mandated oversight board and a new fiscal plan that calls for efforts to raise taxes and significant cuts to the government. Even with optimistic assumptions, that plan predicted continuing shrinkage of the economy.
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Like many on the island, Sergio M. Marxuach, policy director for the Center for a New Economy, a San Juan-based think tank, said a massive federal investment is necessary.

“We’re going to need some significant government intervention — essentially a big rescue package, not only to rebuild the economy but get it growing,” he said. “People are saying, ‘I don’t want my children to grow up in a place where the economy is going to be devastated for the next 10 years.’ If enough people think that way, it’s going to be a self-reinforcing downward spiral.”

Even those who evince optimism acknowledge that more difficult times lie ahead.

“We will move forward better than we were before,” said Joaquín Fernández Quintero, the president of Telemedik, a telehealth company that employs about 400 people.

But he said that about 10 percent of the employees in his Mayaguez office will move to the States in the coming weeks, several of them “high-level” employees. And he’s not sure when they will be coming back.

“People are getting frustrated and depressed,” Fernández Quintero said. “A lot of small and medium companies will be closing because they cannot maintain their operations. It will be a complicated process.”

Trump's dilemma - long promised tax cuts and Republican credibility or a massive bailout to salvage what remains of Puerto Rico. Then there's the threat the migrants pose to Republican incumbents in next year's mid-term elections when they may be able to swing critical Congressional seats to the Democrats. That could alter the balance of power, especially with the current, bitterly divided Republican caucus.

Trump may treat the Puerto Ricans like Mexicans only they can travel freely within the United States and they can vote.

By the time those internally displaced citizens go to the polls, the losses and the death toll will be known. At the moment it's expected to top 450.

The official count is now 48 deaths. But the news site Vox thought that number seemed off.

"We knew from reports on the ground, and investigative journalists who've also been looking into this, that this was very likely way too low of a number,” said Eliza Barclay, an editor at Vox.

So they dug into the numbers, cross-checking with news reports, and found that the number of casualties resulting from the hurricane was probably much closer to 450.

Justin's Folly - Selling Death Wagons to a Despotic Regime Going Broke

You remember the Saudi death wagon controversy when the Trudeau regime gave the go ahead to the sale of 15-billion dollars worth of armoured fighting vehicles to Saudi Arabia.

Well, what if those death wagons fall into the hands of the very people we've been over there fighting, radical Sunni Islamists? Justie would have a little egg on his face then, wouldn't he?

For two years now reports have been coming out about the Saudi's fiscal woes. Some say the monarchy is teetering on the edge of bankrutpcy, a function of profligate spending and low, low, low world oil prices. It's the old story - too much going out, not enough coming in. Even the IMF has predicted that the Saudi regime could be bankrupt within five years.

The Saudi royal family, the House of Saud, for whom the country is named, have managed to hold onto power thanks to what had been mountains of cash. Academics suggest that a fiscal crisis could mean the end of the monarchy and trigger anarchy and violence possibly exacerbated by Russia and Iran.


The consolidation of the Shia Belt and the destabilization of Saudi Arabia will have one of two outcomes for the Islamic State of Iraq and Syria (ISIS). In the first, it will be inevitably destroyed by the Syrian army, who will be bolstered by an increase in Russian and Iranian forces in the theater. With U.S. and Western attention being drawn towards a destabilized Saudi Arabia, the Russian Federation as well as Iran will be able to increase military operations within Syria, increasing the likelihood that Assad will remain in power and both ISIS and the Free Syrian Army will be crushed.

The second scenario would be the rise of radical Salafism in a destabilized Saudi Arabia. With Wahhabism being one of the most popular forms of Sunni Islam in Saudi Arabia, it would seem only logical as this would be the immediate threat in the Kingdom. ISIS would undoubtedly take advantage of the destabilization of Saudi Arabia in the same manner as in Syria, Iraq, and Libya. As radical Salafism is the widely practiced form of Sunni Islam in both al-Qaeda and ISIS, it would only be a matter of time before the two powers took a more active role in the country.

Iraq and Syria have taught us what it means when al-Qaeda and ISIS take a "more active role" in a country. We can imagine what form that might take in a country where they're basically the home team.

An Affliction of the Mind or Why We Can't Handle Climate Change

We're just too set in our ways to have any real hope of tackling the basket of looming existential challenges facing mankind and, for that matter, pretty much all life on Earth.

Forget everything else. Forget overpopulation, over-consumption of essential resources, terrorism and nuclear proliferation, forget everything except climate change. The thing is, if we can't respond effectively to climate change we don't have a snowball's chance in hell of resolving the others. As a global civilization, we're going down.

Which leads me to Andrew Simm's essay in The Guardian in which he explores the self-defeating process of using conventional thinking in response to the climate change dilemma.

The problem with ...scenarios that emerge in the mainstream, is the intellectual editing that occurs before they even begin. Most share two overwhelming, linked characteristics that strictly limit any subsequent room for manoeuvre. Firstly the demand for energy itself is seen as something innate, unchallengeable and unmanageable. It must be met, and the only question is how.

Secondly, the assumption remains that the principles and practices of the economic model that has dominated for the last 30 years will remain for at least the next 30 years. There is no sign yet of the ferocious challenge to neoliberal orthodoxy happening at the margins of economics shaping mainstream visions of our possible futures. The merest glance at the history of changing ideas suggests this is short-sighted.

There are reasons why we need to get a move on with tackling energy demand. Extreme weather events abound. Record flooding in North Carolina in the United States follows record flooding in Louisiana earlier in the year. While no individual event can be described a direct cause and effect relationship, increasingly heavy rainfall and flood events are consistent with climate models for a warming world.

...What sort of scenarios should we be looking at then? We can learn from the impoverished Brexit debate that was marred by binary choices cloaked in wilful misinformation. For the whole population to fully understand our options, and the choices and challenges embedded in them, we should be thinking as openly and broadly as possible. We can look at how far techno-fixes will get us, and at the maximum speed and scale of change that market mechanisms and the pricing of carbon are likely to deliver. In both, the different impacts on rich and poor need assessing.

But we should go further to assess the pros and cons of radical scenarios for changing how we live and work.

Rarely considered but important variables come from new economics, including the shorter working week, the share economy, shifts in corporate ownership and governance, and intelligent but deliberate measures for economic localisation. Compare these to the “stumble on”, or business as usual scenario, in which we give up control of our future to a permanently destabilised climate change, but also assess seriously the consequences of the argument for planned so-called “de-growth” of the economy.

At the height of the 2008 financial crisis, the UK government promised to “go beyond the conventional thinking” to put things right. It never did, but with the climate crisis there is no choice. Conventional thinking is off-course and contradictory.

Without a balanced, comparative assessment of strategies to align energy use and industry with inescapable climate action, we won’t be able to choose the best possible future.

Now, assuming that climate change became an imperative at least 20 years ago, look at how each of our governments, Conservative and Liberal, over that period approached this problem. A good place to start, perhaps, is to look at where Canadian government has come today. Today they're talking about some token carbon price that may or may not take effect in 2018. I think Simms could have been describing the Trudeau regime when he wrote, "Conventional thinking is off-course and contradictory." Yet that is where we are and, so long as our petro-pols on both sides of the aisle pack the House of Commons, that's where we're going to remain.

This is Canada where our environment minister proclaims she is "as much an economic minister as I am an environment minister." Dame Cathy doesn't even grasp the inherent conflict in that. It's as though she's the minister for tobacco production and the minister of health in some blended portfolio. She's oblivious to Canada's urgent need for a full time and powerful environment minister ready and able to go toe to toe with reluctant premiers and with her cabinet colleagues who are entrusted with economic matters whether that be trade, resources or foreign affairs. We're a petro-state, Cathy, and we can't get by with a part-time environment minister who folds at every scowl of some provincial tyro. Maybe that's why Trudeau singled her out for that portfolio. Maybe he wanted a reliable milquetoast. If so, he chose wisely.

21st Century Assyrians

Overpopulation + Drought = Collapse.  Just ask any Assyrian.  Of course they've been gone since the 7th century so that's not very practical.

Historians have long wondered how the Assyrians, the military powerhouse of their region, were taken down by Babylonian forces at Nineveh in 612.   New research shows the Assyrians were already down and on their way out.  The Babylonians just finished the job.

Experts from UC San Diego and Koc University, Istanbul, have discovered that overpopulation and sustained drought caused the empire to collapse, leading the neighbours to move in.

Analysis of the area's weather patterns from paleoclimatic records found that this drought was part of a long period of drought that lasted for several years.

Adam Schneider, from the University of California, said: "As far as we know, ours is the first study to put forward the hypothesis that climate change - specifically drought - helped to destroy the Assyrian Empire."

At the same time, the Assyrian Empire was suffering from overpopulation. Society had grown unsustainably large during the reign of King Sennacherib and the Empire was "fatally weakened".

Within five years, Assyria was ravaged by civil wars. "We're not saying that the Assyrians suddenly starved to death or were forced to wander off into the desert en masse, abandoning their cities," Schneider said. "Rather, we're saying that drought and overpopulation affected the economy and destabilised the political system to a point where the empire couldn't withstand unrest and the onslaught of other peoples."

The researchers said the collapse of the Assyrian Empire is comparable with the current political situation in the Syria and northern Iraq. They also draw parallels with cities like San Diego and Los Angeles, where areas grow too large for their environments.

"The Assyrians can be 'excused' to some extent for focusing on short-term economic or political goals which increased their risk of being negatively impacted by climate change, given their technological capacity and their level of scientific understanding about how the natural world works," the authors wrote.

"We, however, have no such excuses, and we also possess the additional benefit of hindsight, which allows us to piece together from the past what can go wrong if we choose not to enact policies that promote longer-term sustainability."

When Overshoot Meets Inequality

Tuesday marked Earth Overshoot Day, 2014.  August 19th was the day by which humankind had consumed an entire year's production of renewable resources. Overall that means we're using resources more than 1.5 times the rate at which the Earth can replace them.  EOD is a moving target that, unfortunately, keeps moving in the wrong direction.

Overshoot Day got me thinking of a study that came out in March that found abrupt societal collapse was and will be triggered by two factors - overconsumption and inequality.  The researchers concluded that today's global civilization is in the throes of these very forces.

Among the findings, an egalitarian society that limits consumption to less than the natural carrying capacity of its environment can achieve an equilibrium.  Failure to live within our environment's limitations (see Overshoot above) inevitably leads to collapse.  Likewise, inequality, if not held in check, grows exponentially, also leading to collapse.  The rapid rise in inequality over the past three decades suggests we're also in the end-game phase envisioned in this research.

And so the question is, now that we've got the data and this research, what are we going to do about it?  Steady State or Full Earth economics specifically addresses what we need to restore our society to a state of equilibrium but we're saddled with a political class (in Canada, all three major parties) that are absolutely obsessed with perpetual, exponential growth.  There are two locomotives racing toward each other headlong on the same track.  One is being driven by our political class. The other is being driven by reality.  How do you think this ends?  Abruptly?


     
     
Source:LiveScience