They all used at some point the word "bomb" during their presidential election.
Monday, April 28, 2008
The 5th symphony: bomb bomb bomb
They all used at some point the word "bomb" during their presidential election.
Thursday, April 24, 2008
Will we go bankrupt before we attack Iran?
Author: Steven Rix
Holy molly, gung-ho Hillary Clinton declared her allegiance to Israel if Iran was not complying with the messianic vision of a perfect world in the Middle-East, and if ever she is elected the new iron-lady may mark her words against Iran. In the meantime while all these idiotic politicians are yanking each other and behaving like high-school bullies, it is once again the Americans that are paying the price of this irresistible political circus. We went to war in Iraq to seize the oil of Saddam Hussein (we’ve got to be honest towards Americans) but Iraq never recovered from the war, and it will take a long time before Iraqi refineries can reach full capacities. As a result, worldwide oil prices skyrocketed, reaching a hundred dollars a barrel, and worldwide capacities can’t even sustain anymore the ascension of developing countries such as China or India. Americans will have to drive less and to pay more for the black gold. But it’s not over, as if a little oil shock was not enough, the government decided a new energy policy and now we can drive our car with 10% ethanol and 90% gasoline. As a result, since we are trying to cut down on oil energy to minimize the oil crash, we opened the door to a brand new crisis, never seen before in the US until the 30s and WWII, it’s a crisis in food supply. At 1st sight, it would seem that this problem cannot be taken care of like that immediately, because production’s tools reached full productivity, so we can’t produce more than we are already producing.And it’s not just a little temporary crisis, I’ve been watching food prices the last 12 months, and we’ve been entering a hyperinflation mode. I always thought food shortage would only happen in the 3rd world countries or the Soviet Union before the 90s; unfortunately it is happening in front of our very own eyes and it is happening in the “country of freedom”. Here is an example: yesterday I was doing my shopping at Wal-mart, and I could not find oil, pasta, rice, on the shelves. It’s all gone. Needless to say that if ever you find the right product you want, my food budget has been doubling the last 12 months. Has anyone lately seen the cheer amount of inflation we are facing in this country? The dozen of eggs costs around $3 this year while I used to pay around 99 cents previously the same year. It’s 300% inflation over the last 12 months. Worse, the price of the gallon is not cheap either. I remember paying around 75 cents a gallon right after September 11th and now they are telling us on TV to get over it because it’s going to reach anytime soon $4 per gallon. So what’s going on in this country, and who is going to take care of the problem instead of fueling our head with political garbage that nobody cares? In the meantime it’s not really alarming, no need to blow the whistle, but if the situation keeps happening over the few next months, with an oil barrel price going up, then we are headed full throttle towards bankruptcies for the middle and lower class.Philosophical contemplation: the global population rose tremendously since the XXth century and they were expected to raise steadily according to the UN studies. Unfortunately I think that global predictions got it all wrong for numerous factors. Number one, the population has been growing because there is oil. If you remove the oil, the population will decline, and it will decline because of the food supply. Without oil, there is no more plastic objects, there is no more driving, then there is no more work, then there is no more consumption, then there is no more food production, then there is pure and simple anarchy. You see everything that we discovered technologically since the last 10,000 years has been interconnected directly and it does shape our daily environment. Oil production is at the source of everything in our daily live, even the pesticides are produced with oil, or part of the electricity, and even our juicy steaks with buttered corn that we eat in our plates need the big gas guzzlers Ford tractors to process it first. If ever there is an oil shortage with a food crisis in this country, and hopefully it won’t happen, we are going to be entering the survival mode. The survival mode is to go where the food is located, and it’s usually at the countryside in a farm. People in the cities will be the 1st ones struck by starvation, whereas people at the countryside will manage to grow whatever they need, if ever they are not attacked by other people that are starving to death of course. So we’ve been warned and we need to be prepared because once we’ll be restarting the world from scratch, we’ll have to work with 2 horses and a plow, and this day might come sooner than expected.
Holy molly, gung-ho Hillary Clinton declared her allegiance to Israel if Iran was not complying with the messianic vision of a perfect world in the Middle-East, and if ever she is elected the new iron-lady may mark her words against Iran. In the meantime while all these idiotic politicians are yanking each other and behaving like high-school bullies, it is once again the Americans that are paying the price of this irresistible political circus. We went to war in Iraq to seize the oil of Saddam Hussein (we’ve got to be honest towards Americans) but Iraq never recovered from the war, and it will take a long time before Iraqi refineries can reach full capacities. As a result, worldwide oil prices skyrocketed, reaching a hundred dollars a barrel, and worldwide capacities can’t even sustain anymore the ascension of developing countries such as China or India. Americans will have to drive less and to pay more for the black gold. But it’s not over, as if a little oil shock was not enough, the government decided a new energy policy and now we can drive our car with 10% ethanol and 90% gasoline. As a result, since we are trying to cut down on oil energy to minimize the oil crash, we opened the door to a brand new crisis, never seen before in the US until the 30s and WWII, it’s a crisis in food supply. At 1st sight, it would seem that this problem cannot be taken care of like that immediately, because production’s tools reached full productivity, so we can’t produce more than we are already producing.And it’s not just a little temporary crisis, I’ve been watching food prices the last 12 months, and we’ve been entering a hyperinflation mode. I always thought food shortage would only happen in the 3rd world countries or the Soviet Union before the 90s; unfortunately it is happening in front of our very own eyes and it is happening in the “country of freedom”. Here is an example: yesterday I was doing my shopping at Wal-mart, and I could not find oil, pasta, rice, on the shelves. It’s all gone. Needless to say that if ever you find the right product you want, my food budget has been doubling the last 12 months. Has anyone lately seen the cheer amount of inflation we are facing in this country? The dozen of eggs costs around $3 this year while I used to pay around 99 cents previously the same year. It’s 300% inflation over the last 12 months. Worse, the price of the gallon is not cheap either. I remember paying around 75 cents a gallon right after September 11th and now they are telling us on TV to get over it because it’s going to reach anytime soon $4 per gallon. So what’s going on in this country, and who is going to take care of the problem instead of fueling our head with political garbage that nobody cares? In the meantime it’s not really alarming, no need to blow the whistle, but if the situation keeps happening over the few next months, with an oil barrel price going up, then we are headed full throttle towards bankruptcies for the middle and lower class.Philosophical contemplation: the global population rose tremendously since the XXth century and they were expected to raise steadily according to the UN studies. Unfortunately I think that global predictions got it all wrong for numerous factors. Number one, the population has been growing because there is oil. If you remove the oil, the population will decline, and it will decline because of the food supply. Without oil, there is no more plastic objects, there is no more driving, then there is no more work, then there is no more consumption, then there is no more food production, then there is pure and simple anarchy. You see everything that we discovered technologically since the last 10,000 years has been interconnected directly and it does shape our daily environment. Oil production is at the source of everything in our daily live, even the pesticides are produced with oil, or part of the electricity, and even our juicy steaks with buttered corn that we eat in our plates need the big gas guzzlers Ford tractors to process it first. If ever there is an oil shortage with a food crisis in this country, and hopefully it won’t happen, we are going to be entering the survival mode. The survival mode is to go where the food is located, and it’s usually at the countryside in a farm. People in the cities will be the 1st ones struck by starvation, whereas people at the countryside will manage to grow whatever they need, if ever they are not attacked by other people that are starving to death of course. So we’ve been warned and we need to be prepared because once we’ll be restarting the world from scratch, we’ll have to work with 2 horses and a plow, and this day might come sooner than expected.
Maoism and Taoism
Here are a few notes I had written previously on a blog, kind of messy in style because it was a conversation. I firmly believe that Maoism, despite its ideology, was built on Taoism.
Nepal is one of the poorest countries in the world, and relies exclusively on tourism and drug trafficking (morphine, heroine and pink nepalese hash). If you look at the geographical situation of Nepal, they don't have much political choices bewteen India beyond the Utter Pradesh mountains and China and the Himalayas.It's been only a few years since the nepalese women have a social statu, before this period, they were treated as dogs (taoism is the problem this time) and they are still the prey of sex trafficking with India.Also take into consideration that Taoism is well implanted in Nepal so they can't really change their social status from one day to the next. In the dark ages in China and Nepal, people had to work for the benefit of their community, and once they were in the pigeon hole digging for irrigation, it was over for them.
At the deepest level of our being – in our spiritual essence - we are of course neither man nor woman. Yet here we are, on planet Earth, in this culture or that, traveling through our lifetime with a male or female body.According to Taoist Cosmology, the first movement into manifestation happens via Yang Qi and Yin Qi – the primordial masculine and feminine energies. At this level, then, there is equality between the masculine and the feminine. They are understood to simply be two sides of the same coin: one could not exist without the other...
I don't think Taoism recognizes that men and women are equal. If you read Mantak Chia, it does explain why the ying and the yang are different in a sexual relationship.That said, Taoism (how to balance the body and the mental in relation with the planet) is a philosophy of peace, and I also believe that Taoism, while edicting a moral conduct, was a huge problem for the progress of technologies. If you've seen the documentary called "connexions" from James Burke (it's a 30 years old documentary) China's Taoists had done so much with nothing, compared to Europe. Chinese had already the steel, the black powder and many other technologies that Europeans never discovered. Then later during the XXIth/XXIIth century, through global exchanges, once the Europeans got their dirty hands on black powder through the arabic trade, Europe started to rise because they had been able to develop weapons: they found out that black powder would be useful for weapons (gun powder), and once they got the technologies of steel, they first started to use it for BELLS in the cathedrals, and with the shape of the bells, they realized they could build cannons as well.Also with taoism it was harder for any individuals to rise from the masses, and perhaps, that might explain that maoism was easier to impose on Chinese (I'm not quite sure because I need more elements to be categorical).Here is something extraordinnary that was going to shape our life for ever: the classes appeared in Europe only in the XIIIth century during the medieval ice-age. Back then, all the people were sleeping together in the same room, there was not that much differences, and then during the short medieval ice-age, since people were living more and more inside, they found a way to warm their castles with only 1 furnace. In the medieval times, the price of a furnace was very expensive and it could not heat up all the rooms they wanted, so somebody came up with the idea to build a conduct in every room from one furnace only and it was since this day that the lower and middle class never came up that close to the upper class. Incredible what technologies can do.
Politiques: I don't see any ties between Taoism or Maoism, that matter for this post.
Like I said I'm not 100% sure, it's not a link for sure, but a logical anthropological evolution inside the chinese society, it's like maoism was the extension of taoism in respect with chinese culture and their way of thinking. There are some particularities in the chinese society that remains very different from the western world, and one of them was the civil obedience and absence of indidivualism that you can find both in taoism and maoism, even if one is a religion and the other one is an ideology. These were just typical signs of the chinese society until the XXth century. Why do you think China opened its arms to capitalism and still remains very rigid in Human Rights? Because Chinese are the only people in the world to respect the tradition and the memory of their dead, to preserve their cultural heritage. By bringing up stories of their family that happened 1,000 years ago, they also brought up the vision on how China should remain. They know where they are coming and they know where they are going. We, Westerners can't even remember shite if we go down 3 or 4 generations, and we tend to evolve in different directions (success, decadence or whatever).
(...)
Gosh I just read some parts of Mao Tse Tung's book "guerilla warfare" and I can tell you one thing Renegade, his doctrine is fully inspired by Taoism. It's like he reconstructed Maoism with the tools of Taoism - which is normal for me because he does fit the chinese mindset - and also because the Chinese mind is very "obsessed" with opposites in their philosophy to explain life in general. In his book guerilla warfare he does describe that inside the principles of weakness in a war we can find also strengths. That is definitevely a concept of Taoism when he talks about his doctrine. Example: the guerillas are weaks because of their numbers, but because of their numbers they can move rapidly and secretly into more vulnerable areas. If Maoism is not inspired by Taoism then I think I'll have to throw myself through a building.Here is another example that will strike your 3rd eye:In every apparent disadvantage, some advantage is to be found. The converse is equally true: In each apparent advantage lie the seeds of disadvantage. The Yin is not wholly Yin, nor the Yang wholly Yang. It is only the wisegeneral, said the ancient Chinese military philosopher Sun Tzu, who is able to recognize dlis fact and to turn it to good account. Guerrilla tactical doctrine may be summarized in four Chinese characters pronounced “Sheng Tung, Chi Hsi,” which mean “Uproar [in the] East; Strike [in the] West.” Here we find expressed the all-important principles of distraction on the one hand and concentration on the other; to fix the enemy’s attention and to strike where and when he least anticipates the blow. Guerrillas are masters of the arts of simulation and dissimulation; they create pretenses and simultaneously disguise or conceal their true semblance.Everytime you find the interpolarity of ying and yang inside Maoism as well. So like I said before, and i stand corrected, Maoism by extension has been built on Taoism dialectic, and it's a normal - I would say - anthropological evolution.Now at least, you can understand why Maoism is appealing in Nepal. It does fit their mindset 100%.
Politiques: Mao's Marxist sounding writing was ghost written, to make him sound like he had something to say about Marxist theory. Read Halliday's scorching bio of Mao.
I will at a later time. Right now I'm reading "das Ende der Geschischte" (the end of history in german version) from Francis Fukuyama, and I'm struggling with many words coz I don't speak this language anymore. In his book "guerilla warfare" Mao did set the foundations of his ideology against the West and particularly the United States and his work and especially the book "guerilla warfare" influenced and still influences lots of third world countries. Mao did not really invent anything, he just connected the dots with taoism and Tsen Zhu to justify his doctrine, and gave a model different from the one of the Soviet Union. After Algeria's independence, Jacques Verges (a french guy) was asked what type of political model could go to Algeria and he had proposed the maoist model.On another note, Mao's books are on a watchlist by the US authorities, which is nonesense in my opinion, because we are trying to educate ourselves in an academic point of view. It means if you go to the library and check for Mao's book then you may recieve the visit of the agents of the homeland security.Check this out:What do you get when you try to check out Mao Tse-Tung's infamous "The Little Red Book" from the library?A visit from Homeland Security agents.At least that's what happened to a senior at the University of Massachusetts Dartmouth, according to the Standard-Times newspaper of New Bedford, Mass.The college student was visited by federal agents two months ago, after he requested a copy of Mao's tome on communism. Two history professors at UMass Dartmouth, Brian Glyn Williams and Robert Pontbriand, said the student told them he requested the book through the college library's interlibrary loan program. The student, who was completing a research paper on Communism for Pontbriand's class on fascism and totalitarianism, filled out a form for the request, leaving his name, address, phone number and Social Security number.http://www.questia.com/library/history/mao-tse-tung.jsp
Nepal is one of the poorest countries in the world, and relies exclusively on tourism and drug trafficking (morphine, heroine and pink nepalese hash). If you look at the geographical situation of Nepal, they don't have much political choices bewteen India beyond the Utter Pradesh mountains and China and the Himalayas.It's been only a few years since the nepalese women have a social statu, before this period, they were treated as dogs (taoism is the problem this time) and they are still the prey of sex trafficking with India.Also take into consideration that Taoism is well implanted in Nepal so they can't really change their social status from one day to the next. In the dark ages in China and Nepal, people had to work for the benefit of their community, and once they were in the pigeon hole digging for irrigation, it was over for them.
At the deepest level of our being – in our spiritual essence - we are of course neither man nor woman. Yet here we are, on planet Earth, in this culture or that, traveling through our lifetime with a male or female body.According to Taoist Cosmology, the first movement into manifestation happens via Yang Qi and Yin Qi – the primordial masculine and feminine energies. At this level, then, there is equality between the masculine and the feminine. They are understood to simply be two sides of the same coin: one could not exist without the other...
I don't think Taoism recognizes that men and women are equal. If you read Mantak Chia, it does explain why the ying and the yang are different in a sexual relationship.That said, Taoism (how to balance the body and the mental in relation with the planet) is a philosophy of peace, and I also believe that Taoism, while edicting a moral conduct, was a huge problem for the progress of technologies. If you've seen the documentary called "connexions" from James Burke (it's a 30 years old documentary) China's Taoists had done so much with nothing, compared to Europe. Chinese had already the steel, the black powder and many other technologies that Europeans never discovered. Then later during the XXIth/XXIIth century, through global exchanges, once the Europeans got their dirty hands on black powder through the arabic trade, Europe started to rise because they had been able to develop weapons: they found out that black powder would be useful for weapons (gun powder), and once they got the technologies of steel, they first started to use it for BELLS in the cathedrals, and with the shape of the bells, they realized they could build cannons as well.Also with taoism it was harder for any individuals to rise from the masses, and perhaps, that might explain that maoism was easier to impose on Chinese (I'm not quite sure because I need more elements to be categorical).Here is something extraordinnary that was going to shape our life for ever: the classes appeared in Europe only in the XIIIth century during the medieval ice-age. Back then, all the people were sleeping together in the same room, there was not that much differences, and then during the short medieval ice-age, since people were living more and more inside, they found a way to warm their castles with only 1 furnace. In the medieval times, the price of a furnace was very expensive and it could not heat up all the rooms they wanted, so somebody came up with the idea to build a conduct in every room from one furnace only and it was since this day that the lower and middle class never came up that close to the upper class. Incredible what technologies can do.
Politiques: I don't see any ties between Taoism or Maoism, that matter for this post.
Like I said I'm not 100% sure, it's not a link for sure, but a logical anthropological evolution inside the chinese society, it's like maoism was the extension of taoism in respect with chinese culture and their way of thinking. There are some particularities in the chinese society that remains very different from the western world, and one of them was the civil obedience and absence of indidivualism that you can find both in taoism and maoism, even if one is a religion and the other one is an ideology. These were just typical signs of the chinese society until the XXth century. Why do you think China opened its arms to capitalism and still remains very rigid in Human Rights? Because Chinese are the only people in the world to respect the tradition and the memory of their dead, to preserve their cultural heritage. By bringing up stories of their family that happened 1,000 years ago, they also brought up the vision on how China should remain. They know where they are coming and they know where they are going. We, Westerners can't even remember shite if we go down 3 or 4 generations, and we tend to evolve in different directions (success, decadence or whatever).
(...)
Gosh I just read some parts of Mao Tse Tung's book "guerilla warfare" and I can tell you one thing Renegade, his doctrine is fully inspired by Taoism. It's like he reconstructed Maoism with the tools of Taoism - which is normal for me because he does fit the chinese mindset - and also because the Chinese mind is very "obsessed" with opposites in their philosophy to explain life in general. In his book guerilla warfare he does describe that inside the principles of weakness in a war we can find also strengths. That is definitevely a concept of Taoism when he talks about his doctrine. Example: the guerillas are weaks because of their numbers, but because of their numbers they can move rapidly and secretly into more vulnerable areas. If Maoism is not inspired by Taoism then I think I'll have to throw myself through a building.Here is another example that will strike your 3rd eye:In every apparent disadvantage, some advantage is to be found. The converse is equally true: In each apparent advantage lie the seeds of disadvantage. The Yin is not wholly Yin, nor the Yang wholly Yang. It is only the wisegeneral, said the ancient Chinese military philosopher Sun Tzu, who is able to recognize dlis fact and to turn it to good account. Guerrilla tactical doctrine may be summarized in four Chinese characters pronounced “Sheng Tung, Chi Hsi,” which mean “Uproar [in the] East; Strike [in the] West.” Here we find expressed the all-important principles of distraction on the one hand and concentration on the other; to fix the enemy’s attention and to strike where and when he least anticipates the blow. Guerrillas are masters of the arts of simulation and dissimulation; they create pretenses and simultaneously disguise or conceal their true semblance.Everytime you find the interpolarity of ying and yang inside Maoism as well. So like I said before, and i stand corrected, Maoism by extension has been built on Taoism dialectic, and it's a normal - I would say - anthropological evolution.Now at least, you can understand why Maoism is appealing in Nepal. It does fit their mindset 100%.
Politiques: Mao's Marxist sounding writing was ghost written, to make him sound like he had something to say about Marxist theory. Read Halliday's scorching bio of Mao.
I will at a later time. Right now I'm reading "das Ende der Geschischte" (the end of history in german version) from Francis Fukuyama, and I'm struggling with many words coz I don't speak this language anymore. In his book "guerilla warfare" Mao did set the foundations of his ideology against the West and particularly the United States and his work and especially the book "guerilla warfare" influenced and still influences lots of third world countries. Mao did not really invent anything, he just connected the dots with taoism and Tsen Zhu to justify his doctrine, and gave a model different from the one of the Soviet Union. After Algeria's independence, Jacques Verges (a french guy) was asked what type of political model could go to Algeria and he had proposed the maoist model.On another note, Mao's books are on a watchlist by the US authorities, which is nonesense in my opinion, because we are trying to educate ourselves in an academic point of view. It means if you go to the library and check for Mao's book then you may recieve the visit of the agents of the homeland security.Check this out:What do you get when you try to check out Mao Tse-Tung's infamous "The Little Red Book" from the library?A visit from Homeland Security agents.At least that's what happened to a senior at the University of Massachusetts Dartmouth, according to the Standard-Times newspaper of New Bedford, Mass.The college student was visited by federal agents two months ago, after he requested a copy of Mao's tome on communism. Two history professors at UMass Dartmouth, Brian Glyn Williams and Robert Pontbriand, said the student told them he requested the book through the college library's interlibrary loan program. The student, who was completing a research paper on Communism for Pontbriand's class on fascism and totalitarianism, filled out a form for the request, leaving his name, address, phone number and Social Security number.http://www.questia.com/library/history/mao-tse-tung.jsp
Chávez Emphasizes Global Context of Venezuelan Food Shortages
In an international press conference Tuesday, Venezuelan President Hugo Chávez expressed concern for a potential world food crisis and criticized the diversion of food supplies for biofuel, while Venezuela and other Global South countries struggle with food shortages.
“The important thing is that this theme be explained to the people, that governments be alerted; many might not realize it with the sea of things that occur daily,” Chávez advised.
Since 2004, global cereal production has remained constant at around 1.6 billion tons, while the demand for cereals has escalated to almost 1.7 billion tons, according to research by a group of Spanish agricultural companies published at agroinformacion.com.
Consistent with this trend, Chávez highlighted a 400% increase in the consumption capacity of Venezuela’s poorest population as a result of government social spending, citing recent non-government polls.
The burgeoning middle classes of China and India have also boosted demand for food. They also consume more oil than ever, which is part of the reason petroleum exporting countries cannot increase supply even as oil prices top $110 per barrel, according to the Venezuelan Oil Minister Rafael Ramírez.
The food supply is also weakened by bad harvests in Australia and Ukraine, and the encroachment of farmland by urban and industrial development, especially in China.
Under these conditions, the world is amidst its sharpest food price inflation since the early 1990s. For instance, since 2006, global rice prices have risen 60%, corn prices 149%, and wheat prices 257%, according to the Toronto Star.
A 40% leap in global food prices in 2007 and 41% increase in cereal prices over the past six months has left the U.N. with a $505 million budget shortfall this month and produced what it calls a “crisis” for three dozen Global South nations, including Venezuela.
Similarly, the U.S. Agency for International Development (USAID) announced in early March that it will reduce emergency food aid this year because price inflation has carved a $200 million hole in next year’s budget that USAID officials say the Bush administration does not plan to repair.
“The United Nations Food and Agriculture Organization (FAO) is soliciting $500 million to alleviate the food crisis,” Chávez said Tuesday, referring to the U.N.’s urgent request for donations this week in order to prevent a cutback in emergency food aid to 73 million people worldwide, “while the United States spends $500 million per day in Iraq.”
According to Josette Sheeran, executive director of the United Nations World Food Program, which depends on USAID for 40% of its food contributions, "this is really the first emergency we've faced without a drought, war, natural disaster."
In Venezuela, rice has been missing from shelves for months since Chilean distributors, who import from Europe, have not delivered in over 200 days, according to the Venezuelan daily El Nacional, and milk and pasta prices have doubled despite government price controls.
The Venezuelan opposition continues to blame Chávez for food shortages and says the lifting of price controls and measures to facilitate imports have been insufficient.
Meanwhile the national government subsidized food markets called Mercal were expanded last month with a new program called PDVAL that is run by the state oil company PDVSA and distributes essential food items at regulated prices.
In a controversial measure recently, PDVAL stores were prohibited from selling non-essential food items listed for PDVAL, which currently include milk, sugar, rice, oil, black beans, chicken, and beef. This was partially a response to widespread complaints that Mercal markets had been requiring people to buy food in packages that included non-essential food items such as brand name canned ham in order to clear inventories of non-essential food products.
Other countries are also battling food shortages in the wake of worldwide price inflation. In Mexico, which imports over 60% of the wheat it consumes, angry demonstrations arose after many Mexican bakeries were priced out of business last year. Moreover, Afghanistan solicited $77 million in emergency food aid recently, and the Phillipines was unable to obtain its rice quota in March following a 40% rise in the price of rice since January, agroinformacion.com reports.
President Chávez further emphasized in the press conference Tuesday that the movement toward the production of biofuels as alternatives to fossil fuels, a policy peddled internationally by the U.S., is a prime cause of price inflation that will eventually lead to a “famine that produces desperation for millions of people.”
Peter Brabeck, the CEO of Nestle, which Chávez threatened to nationalize in February on suspicion that the company was hoarding food in order to destabilize the country, echoed Chávez’s point of view. Brabeck predicted that there is not enough water or farmland to replace the proposed 20% of world fossil fuels with biofuels, and if this goal is pursued, “there will be nothing to eat,” and it will be “morally unacceptable and irresponsible.”
A throng of international business journals confirm that biofuels have spurred food price inflation, but they welcome the trend as the driver for a new “golden age” of agriculture.
Chávez commented Tuesday that he will discuss the biofuel issue with Brazilian President Luis Ignacio Lula da Silva in their meeting on bilateral energy cooperation this week. Last year, Brazil expanded its production of food for biofuels and last month Virgin Atlantic revealed it will seek Brazilian palm oil to use as biofuel for its newest line of hybrid jets.
An overarching factor in all of this is that major food exporting countries, including China, Kazakhstan, Ukraine, Russia, and Argentina, have instituted export restrictions to help satisfy domestic demand.
Increases in export tariffs by the administration of President Cristina Fernández de Kirchner were met with a management-led strike by Argentine food producers that reached its 13th day Wednesday.
The strike has raised concerns about the flow of Argentine food exports to Venezuela. In a series of economic accords signed by the two countries in early March, Venezuela was to send cheap oil to help fill Argentina`s energy gap as the southern winter approaches in exchange for much-needed food imports.
“The important thing is that this theme be explained to the people, that governments be alerted; many might not realize it with the sea of things that occur daily,” Chávez advised.
Since 2004, global cereal production has remained constant at around 1.6 billion tons, while the demand for cereals has escalated to almost 1.7 billion tons, according to research by a group of Spanish agricultural companies published at agroinformacion.com.
Consistent with this trend, Chávez highlighted a 400% increase in the consumption capacity of Venezuela’s poorest population as a result of government social spending, citing recent non-government polls.
The burgeoning middle classes of China and India have also boosted demand for food. They also consume more oil than ever, which is part of the reason petroleum exporting countries cannot increase supply even as oil prices top $110 per barrel, according to the Venezuelan Oil Minister Rafael Ramírez.
The food supply is also weakened by bad harvests in Australia and Ukraine, and the encroachment of farmland by urban and industrial development, especially in China.
Under these conditions, the world is amidst its sharpest food price inflation since the early 1990s. For instance, since 2006, global rice prices have risen 60%, corn prices 149%, and wheat prices 257%, according to the Toronto Star.
A 40% leap in global food prices in 2007 and 41% increase in cereal prices over the past six months has left the U.N. with a $505 million budget shortfall this month and produced what it calls a “crisis” for three dozen Global South nations, including Venezuela.
Similarly, the U.S. Agency for International Development (USAID) announced in early March that it will reduce emergency food aid this year because price inflation has carved a $200 million hole in next year’s budget that USAID officials say the Bush administration does not plan to repair.
“The United Nations Food and Agriculture Organization (FAO) is soliciting $500 million to alleviate the food crisis,” Chávez said Tuesday, referring to the U.N.’s urgent request for donations this week in order to prevent a cutback in emergency food aid to 73 million people worldwide, “while the United States spends $500 million per day in Iraq.”
According to Josette Sheeran, executive director of the United Nations World Food Program, which depends on USAID for 40% of its food contributions, "this is really the first emergency we've faced without a drought, war, natural disaster."
In Venezuela, rice has been missing from shelves for months since Chilean distributors, who import from Europe, have not delivered in over 200 days, according to the Venezuelan daily El Nacional, and milk and pasta prices have doubled despite government price controls.
The Venezuelan opposition continues to blame Chávez for food shortages and says the lifting of price controls and measures to facilitate imports have been insufficient.
Meanwhile the national government subsidized food markets called Mercal were expanded last month with a new program called PDVAL that is run by the state oil company PDVSA and distributes essential food items at regulated prices.
In a controversial measure recently, PDVAL stores were prohibited from selling non-essential food items listed for PDVAL, which currently include milk, sugar, rice, oil, black beans, chicken, and beef. This was partially a response to widespread complaints that Mercal markets had been requiring people to buy food in packages that included non-essential food items such as brand name canned ham in order to clear inventories of non-essential food products.
Other countries are also battling food shortages in the wake of worldwide price inflation. In Mexico, which imports over 60% of the wheat it consumes, angry demonstrations arose after many Mexican bakeries were priced out of business last year. Moreover, Afghanistan solicited $77 million in emergency food aid recently, and the Phillipines was unable to obtain its rice quota in March following a 40% rise in the price of rice since January, agroinformacion.com reports.
President Chávez further emphasized in the press conference Tuesday that the movement toward the production of biofuels as alternatives to fossil fuels, a policy peddled internationally by the U.S., is a prime cause of price inflation that will eventually lead to a “famine that produces desperation for millions of people.”
Peter Brabeck, the CEO of Nestle, which Chávez threatened to nationalize in February on suspicion that the company was hoarding food in order to destabilize the country, echoed Chávez’s point of view. Brabeck predicted that there is not enough water or farmland to replace the proposed 20% of world fossil fuels with biofuels, and if this goal is pursued, “there will be nothing to eat,” and it will be “morally unacceptable and irresponsible.”
A throng of international business journals confirm that biofuels have spurred food price inflation, but they welcome the trend as the driver for a new “golden age” of agriculture.
Chávez commented Tuesday that he will discuss the biofuel issue with Brazilian President Luis Ignacio Lula da Silva in their meeting on bilateral energy cooperation this week. Last year, Brazil expanded its production of food for biofuels and last month Virgin Atlantic revealed it will seek Brazilian palm oil to use as biofuel for its newest line of hybrid jets.
An overarching factor in all of this is that major food exporting countries, including China, Kazakhstan, Ukraine, Russia, and Argentina, have instituted export restrictions to help satisfy domestic demand.
Increases in export tariffs by the administration of President Cristina Fernández de Kirchner were met with a management-led strike by Argentine food producers that reached its 13th day Wednesday.
The strike has raised concerns about the flow of Argentine food exports to Venezuela. In a series of economic accords signed by the two countries in early March, Venezuela was to send cheap oil to help fill Argentina`s energy gap as the southern winter approaches in exchange for much-needed food imports.
Sunday, April 20, 2008
Funny missile test
PS: they are not french people, like the post suggests it is, they are kebekers from Canada, but I guess people don't know the difference with a military uniform and the accents (May God shave France). The video is funny though
Saturday, April 19, 2008
As losses mount, US banks cut thousands of jobs
By David Walsh19 April 2008
Banking and other financial firms in the US continue to report enormous financial losses, inevitably accompanied by mass layoffs. While present and former executives of these companies are well insulated from the disaster over which they have presided, tens of thousands of their employees are not so fortunate.
A number of major US banks reported first-quarter earnings this week, and more will do so next week.
On April 17, investment bank and the world’s largest brokerage Merrill Lynch announced a loss of $1.96 billion in the first three months of 2008, a turnaround of more than $4 billion from the same period a year ago (when it made a profit of $2.11 billion).
Merrill Lynch announced it was eliminating another 2,900 jobs, bringing the total of its proposed job losses for 2008 to 4,000.
The following day, banking giant Citigroup reported a $5.1 billion loss in the first quarter, a change in fortune of $10 billion from the first three months of 2007 (when its profits amounted to $5 billion). Forbes.com remarked that the earnings “were even more dreadful than the miserable results investors had expected.”
Citigroup has said it will lay off some 9,000 employees in the next 12 months. This comes on top of 4,000 cuts announced in January.
This is unlikely to be the end of the firm’s layoffs. Vikram Pandit, Citi’s chief executive, indicated Thursday that the bank would be seeking to slash costs by as much as 20 percent. The comment, noted the Financial Times, had the effect of “deepening fears that Wall Street and the City of London are about to be hit by tens of thousands of additional job losses.”
The business paper suggested that analysts are anticipating the elimination of some 25,000 jobs “in the next few months” at Citigroup.
The bank is not out of the woods yet. Moody’s Investors Service warned that because of “Citigroup’s complexity, its significant exposure to the global capital markets, and current illiquidity and volatility of some of those markets, additional marks in its investment bank cannot be ruled out.”
JPMorgan Chase announced April 16 that its earnings had been cut in half in 2008’s first quarter due to problems with mortgages and other bad loans. JPMorgan’s recent purchase of bankrupt Bear Stearns will undoubtedly lead to slashing the latter’s workforce of 14,000. The Wall Street Journal reported April 12 that the “emergency takeover” is expected to cost at least half of the jobs at Bear Stearns.
Other large US banking firms, such as Washington Mutual (a $1.14 billion loss and 3,000 layoffs), Wachovia (a $393 million loss and hundreds of layoffs) and Wells Fargo (a decline of 11 percent in profits), have also reported grim first quarter earnings. Bank of America is not expected to have anything good to report next week.
There is no end in sight to the financial and employment bloodletting. Financial firms globally have taken some $200 billion in write-downs (reductions in the book value of assets because they are overvalued compared to their market value) since the middle of 2007. Citigroup alone has now taken write-downs totaling nearly $39 billion since the crisis began; JPMorgan has taken about $10 billion.
After the announcement of Merrill Lynch’s most recent earnings, John Thain, its new chairman and chief executive, called the first three months of 2008 “as difficult a quarter as I’ve seen in my 30 years on Wall Street.” Merrill Lynch executives indicated that March was “a significantly more difficult month” than January or February.
In an interview with the New York Times April 17, Thain sounded “a more negative note than some of his Wall Street colleagues, saying he did not think the downturn was near its bottom.”
Thain told the Times that thus far “the slowdown has been finance-driven. ... What we haven’t seen yet is the impact on the consumer of falling house prices, rising energy prices, higher food prices and higher unemployment.”
Floyd Norris, the Times’ chief financial correspondent, writes April 18 that “Since the big banks first realized last fall that their capital situations were perilous, more than $100 billion has been poured into them. Without all that cash, the system would be in horrid shape, and there would be a lot more blood on the Street.”
Norris takes note that bank chief executives “now profess to see light at the end of the tunnel, and they may be right. ... The trouble with such assurances is that the bosses of Wall Street have been repeatedly blindsided by newly discovered risks that their firms—and others—had taken.”
Norris ends on a pessimistic note: “With credit hard to come by, the real economy may be in for rough times, creating more loan losses. Wall Street may not need to beg for any more capital, but it is a good bet that its layoffs are only starting. There is not much need for the people who put together securitizations when there is virtually no market for such deals.”
The estimates on potential job losses in the banking and wider financial arena vary, but they are all substantial.
On April 1 financial research firm Celent LLC issued a report suggesting that some 200,000 of the US commercial banking industry’s 2 million jobs could be lost over the next 12 to 18 months. That would be an unprecedented number. But Octavio Marenzi, the head of New York-based Celent’s financial consultancy unit, argued that the economic situation was without precedent.
“The banking industry over the past 40 years has never seen a downturn in its revenue growth,” Marenzi told the Associated Press. “In 2008, it looks like it will decrease for the first time in living memory. They’re going to have to respond with severe cost cutting. It’s not an environment they’re entirely used to.”
In addition, global securities firms have announced 20,000 job cuts, 6,000 of them in New York.
Financial companies in total have slashed at least 70,000 positions in the US and Europe. Data provider Experian estimates the final number by the end of 2008 could be 240,000.
A recent headline in BusinessWeek asked, “How Deep Will Wall Street Cut?” It reported that Wall Street has announced plans to slash 34,000 positions over the past nine months, but noted that the number of layoffs might not be as great as in recent recessions due to the fact that “after the dot-com debacle,” only 74 percent of the jobs that had been lost were filled.
Precisely because “There is not a lot of fat to cut,” as one economist puts it, the upcoming job slashing will be more damaging. “What’s worrisome,” writes BusinessWeek, “is that companies may have to cut into the meat of their operations.” Many positions have been eliminated permanently with improvements in technology, “helping to keep a lid on costs and head counts in recent years. Since those ranks remain relatively thin, firms now may have to whack analysts, traders, and dealmakers. That’s not good for the island of Manhattan, where many of these high-paid employees work; banks and brokerages account for 35 percent of the city’s wages.”
While workers in the industry suffer the consequences of the economic slump, their employers face no such prospect. Apparently whether their firms prosper or not, or even go under, banking executives have organized things so they will be paid fabulous amounts.
Citigroup’s Charles Prince and Merrill Lynch’s Stanley O’Neal, who stood at the helm of their companies as they lost billions on risky investments in mortgage-backed securities, made off with $68 million and $161 million, respectively, when they resigned or were forced out. Former Bear Stearns chairman James Cayne dumped his entire stake in the failed bank for a mere $61 million in late March, a fraction of what his stake in the company had once been worth. We needn’t worry too much about Mr. Cayne. He made $38.31 million in 2006 in total compensation and $155.26 million over five years. There are no indications that he plans to give any of it back.
BusinessWeek last November took note of some of the fantastic “exit packages” that CEOs have organized for themselves. Richard Fuld Jr., for example, CEO of Lehman Brothers, “has nothing to worry about—his exit package is valued at $299 million, putting him close to the record for any such package.” Bank of America’s chairman and CEO, Kenneth D. Lewis, stands to walk away with $120 million, down from an estimated value of $136 million at the end of 2006.
While much of the country is suffering from some combination of job losses, gas and food prices, disappearing benefits and pensions, soaring medical costs and declining house prices, the super-rich are doing quite nicely. The BBC headlined a recent piece “Manhattan property defies gravity,” and pointed out that property prices in New York’s wealthiest borough had soared 41 percent over the course of the past year.
On average a Manhattan home costs $1.6 million, an increase from $1.1 million a year ago. Prices in primarily working class Queens and Staten Island dropped by 5 percent and in the Bronx by 1 percent. In Brooklyn, which has seen its share of ‘gentrification’ and housing speculation, prices rose by 3 percent.
The Real Estate Board’s Steven Spinola commented, “Manhattan’s luxury market for high-end properties continues to remain untouched by the slowing economy.” In fact, Spinola suggested that several luxury developments had just become available to meet the “pent-up demand.”
For the working population, the situation continues to deteriorate rapidly. Mass layoffs have been announced in recent days, in addition to those at Merrill Lynch and Citigroup, at AT&T (5,000 jobs), Volvo Trucks (1,100), Asahi Glass (900 in the US and Canada), Harley-Davison (730), Lehman Brothers (600), Siemens Energy and Automation (477), AMD (420), Valley Health System (396), Newark Morning Ledger (367), Skybus Airlines (365), Greenville Hospital in Jersey City, New Jersey (356), Aramark Sports and Entertainments (303), Baja Marine Corp (283), Dutch Housing (250) and Summit Production Systems (200), among other firms.
Meanwhile, paychecks of those who have a job are getting smaller as hours and overtime decline. The New York Times reported April 18 that “the reduction of wages and working hours ... has become a primary cause of distress, pushing many more Americans into a downward spiral.”
From March 2007 to March this year, the average workweek fell slightly from 33.9 hours to 33.8, with the slippage greater in manufacturing. Nearly 5 million workers were working part-time at the end of March “because their companies had cut hours in the face of slack business.” That number had jumped 400,000 since November.
Average income declined in March, after accounting for rising prices, the sixth consecutive month “that pay failed to keep pace with inflation.” While the increase in average hourly earnings from February to September 2007 barely kept pace with inflation, that is no longer the case. From November through March 2008, as employers began to reduce their operations, “wage growth fell below the pace of inflation, meaning that paychecks were effectively shrinking.”
See Also:In midst of recession, multi-billion-dollar paydays for US hedge fund managers[17 April 2008]A faltering economy hasn’t slowed American CEOs’ pursuit of wealth[16 April 2008]Shades of 1929: the global implications of the US banking collapse[16 April 2008]
Banking and other financial firms in the US continue to report enormous financial losses, inevitably accompanied by mass layoffs. While present and former executives of these companies are well insulated from the disaster over which they have presided, tens of thousands of their employees are not so fortunate.
A number of major US banks reported first-quarter earnings this week, and more will do so next week.
On April 17, investment bank and the world’s largest brokerage Merrill Lynch announced a loss of $1.96 billion in the first three months of 2008, a turnaround of more than $4 billion from the same period a year ago (when it made a profit of $2.11 billion).
Merrill Lynch announced it was eliminating another 2,900 jobs, bringing the total of its proposed job losses for 2008 to 4,000.
The following day, banking giant Citigroup reported a $5.1 billion loss in the first quarter, a change in fortune of $10 billion from the first three months of 2007 (when its profits amounted to $5 billion). Forbes.com remarked that the earnings “were even more dreadful than the miserable results investors had expected.”
Citigroup has said it will lay off some 9,000 employees in the next 12 months. This comes on top of 4,000 cuts announced in January.
This is unlikely to be the end of the firm’s layoffs. Vikram Pandit, Citi’s chief executive, indicated Thursday that the bank would be seeking to slash costs by as much as 20 percent. The comment, noted the Financial Times, had the effect of “deepening fears that Wall Street and the City of London are about to be hit by tens of thousands of additional job losses.”
The business paper suggested that analysts are anticipating the elimination of some 25,000 jobs “in the next few months” at Citigroup.
The bank is not out of the woods yet. Moody’s Investors Service warned that because of “Citigroup’s complexity, its significant exposure to the global capital markets, and current illiquidity and volatility of some of those markets, additional marks in its investment bank cannot be ruled out.”
JPMorgan Chase announced April 16 that its earnings had been cut in half in 2008’s first quarter due to problems with mortgages and other bad loans. JPMorgan’s recent purchase of bankrupt Bear Stearns will undoubtedly lead to slashing the latter’s workforce of 14,000. The Wall Street Journal reported April 12 that the “emergency takeover” is expected to cost at least half of the jobs at Bear Stearns.
Other large US banking firms, such as Washington Mutual (a $1.14 billion loss and 3,000 layoffs), Wachovia (a $393 million loss and hundreds of layoffs) and Wells Fargo (a decline of 11 percent in profits), have also reported grim first quarter earnings. Bank of America is not expected to have anything good to report next week.
There is no end in sight to the financial and employment bloodletting. Financial firms globally have taken some $200 billion in write-downs (reductions in the book value of assets because they are overvalued compared to their market value) since the middle of 2007. Citigroup alone has now taken write-downs totaling nearly $39 billion since the crisis began; JPMorgan has taken about $10 billion.
After the announcement of Merrill Lynch’s most recent earnings, John Thain, its new chairman and chief executive, called the first three months of 2008 “as difficult a quarter as I’ve seen in my 30 years on Wall Street.” Merrill Lynch executives indicated that March was “a significantly more difficult month” than January or February.
In an interview with the New York Times April 17, Thain sounded “a more negative note than some of his Wall Street colleagues, saying he did not think the downturn was near its bottom.”
Thain told the Times that thus far “the slowdown has been finance-driven. ... What we haven’t seen yet is the impact on the consumer of falling house prices, rising energy prices, higher food prices and higher unemployment.”
Floyd Norris, the Times’ chief financial correspondent, writes April 18 that “Since the big banks first realized last fall that their capital situations were perilous, more than $100 billion has been poured into them. Without all that cash, the system would be in horrid shape, and there would be a lot more blood on the Street.”
Norris takes note that bank chief executives “now profess to see light at the end of the tunnel, and they may be right. ... The trouble with such assurances is that the bosses of Wall Street have been repeatedly blindsided by newly discovered risks that their firms—and others—had taken.”
Norris ends on a pessimistic note: “With credit hard to come by, the real economy may be in for rough times, creating more loan losses. Wall Street may not need to beg for any more capital, but it is a good bet that its layoffs are only starting. There is not much need for the people who put together securitizations when there is virtually no market for such deals.”
The estimates on potential job losses in the banking and wider financial arena vary, but they are all substantial.
On April 1 financial research firm Celent LLC issued a report suggesting that some 200,000 of the US commercial banking industry’s 2 million jobs could be lost over the next 12 to 18 months. That would be an unprecedented number. But Octavio Marenzi, the head of New York-based Celent’s financial consultancy unit, argued that the economic situation was without precedent.
“The banking industry over the past 40 years has never seen a downturn in its revenue growth,” Marenzi told the Associated Press. “In 2008, it looks like it will decrease for the first time in living memory. They’re going to have to respond with severe cost cutting. It’s not an environment they’re entirely used to.”
In addition, global securities firms have announced 20,000 job cuts, 6,000 of them in New York.
Financial companies in total have slashed at least 70,000 positions in the US and Europe. Data provider Experian estimates the final number by the end of 2008 could be 240,000.
A recent headline in BusinessWeek asked, “How Deep Will Wall Street Cut?” It reported that Wall Street has announced plans to slash 34,000 positions over the past nine months, but noted that the number of layoffs might not be as great as in recent recessions due to the fact that “after the dot-com debacle,” only 74 percent of the jobs that had been lost were filled.
Precisely because “There is not a lot of fat to cut,” as one economist puts it, the upcoming job slashing will be more damaging. “What’s worrisome,” writes BusinessWeek, “is that companies may have to cut into the meat of their operations.” Many positions have been eliminated permanently with improvements in technology, “helping to keep a lid on costs and head counts in recent years. Since those ranks remain relatively thin, firms now may have to whack analysts, traders, and dealmakers. That’s not good for the island of Manhattan, where many of these high-paid employees work; banks and brokerages account for 35 percent of the city’s wages.”
While workers in the industry suffer the consequences of the economic slump, their employers face no such prospect. Apparently whether their firms prosper or not, or even go under, banking executives have organized things so they will be paid fabulous amounts.
Citigroup’s Charles Prince and Merrill Lynch’s Stanley O’Neal, who stood at the helm of their companies as they lost billions on risky investments in mortgage-backed securities, made off with $68 million and $161 million, respectively, when they resigned or were forced out. Former Bear Stearns chairman James Cayne dumped his entire stake in the failed bank for a mere $61 million in late March, a fraction of what his stake in the company had once been worth. We needn’t worry too much about Mr. Cayne. He made $38.31 million in 2006 in total compensation and $155.26 million over five years. There are no indications that he plans to give any of it back.
BusinessWeek last November took note of some of the fantastic “exit packages” that CEOs have organized for themselves. Richard Fuld Jr., for example, CEO of Lehman Brothers, “has nothing to worry about—his exit package is valued at $299 million, putting him close to the record for any such package.” Bank of America’s chairman and CEO, Kenneth D. Lewis, stands to walk away with $120 million, down from an estimated value of $136 million at the end of 2006.
While much of the country is suffering from some combination of job losses, gas and food prices, disappearing benefits and pensions, soaring medical costs and declining house prices, the super-rich are doing quite nicely. The BBC headlined a recent piece “Manhattan property defies gravity,” and pointed out that property prices in New York’s wealthiest borough had soared 41 percent over the course of the past year.
On average a Manhattan home costs $1.6 million, an increase from $1.1 million a year ago. Prices in primarily working class Queens and Staten Island dropped by 5 percent and in the Bronx by 1 percent. In Brooklyn, which has seen its share of ‘gentrification’ and housing speculation, prices rose by 3 percent.
The Real Estate Board’s Steven Spinola commented, “Manhattan’s luxury market for high-end properties continues to remain untouched by the slowing economy.” In fact, Spinola suggested that several luxury developments had just become available to meet the “pent-up demand.”
For the working population, the situation continues to deteriorate rapidly. Mass layoffs have been announced in recent days, in addition to those at Merrill Lynch and Citigroup, at AT&T (5,000 jobs), Volvo Trucks (1,100), Asahi Glass (900 in the US and Canada), Harley-Davison (730), Lehman Brothers (600), Siemens Energy and Automation (477), AMD (420), Valley Health System (396), Newark Morning Ledger (367), Skybus Airlines (365), Greenville Hospital in Jersey City, New Jersey (356), Aramark Sports and Entertainments (303), Baja Marine Corp (283), Dutch Housing (250) and Summit Production Systems (200), among other firms.
Meanwhile, paychecks of those who have a job are getting smaller as hours and overtime decline. The New York Times reported April 18 that “the reduction of wages and working hours ... has become a primary cause of distress, pushing many more Americans into a downward spiral.”
From March 2007 to March this year, the average workweek fell slightly from 33.9 hours to 33.8, with the slippage greater in manufacturing. Nearly 5 million workers were working part-time at the end of March “because their companies had cut hours in the face of slack business.” That number had jumped 400,000 since November.
Average income declined in March, after accounting for rising prices, the sixth consecutive month “that pay failed to keep pace with inflation.” While the increase in average hourly earnings from February to September 2007 barely kept pace with inflation, that is no longer the case. From November through March 2008, as employers began to reduce their operations, “wage growth fell below the pace of inflation, meaning that paychecks were effectively shrinking.”
See Also:In midst of recession, multi-billion-dollar paydays for US hedge fund managers[17 April 2008]A faltering economy hasn’t slowed American CEOs’ pursuit of wealth[16 April 2008]Shades of 1929: the global implications of the US banking collapse[16 April 2008]
Changing Cuba: Monster buses vanish from Havana streets
By WILL WEISSERT, Associated Press Writer
HAVANA - First comes the stink of diesel, then a metallic roar, and finally a tower of black smoke that tells you the "camello" — the camel — has reached your stop.
These hulking 18-wheeled beasts, iron mutants made of two Soviet-era buses welded together on a flatbed and pulled by a separate cab, have long been Havana's public transport nightmare — bumpy, hot and jammed with up to 400 passengers at a time.
But their gradual disappearance is a telling sign of change in the twilight of the Fidel Castro age. The last "camello" is expected to go out of service in Havana on Sunday night.
The camello, so named for its humped front and rear sections, is being eclipsed by thousands of new city buses from China as the government under Castro's brother, Raul, resuscitates a public transportation system on the brink of collapse.
Route M-6, running from the capital's southern outskirts uptown to the University of Havana, is the city's last remaining camello route, and municipal authorities say they have been told to pull all camellos off it this weekend.
"I think we should build a monument to the camello," said retiree Salvador Carrera, a camello passenger. "It has been an extraordinary thing."
The capital aside, camellos are far from extinct. The government has an island-wide fleet of more than 1,000, and those from Havana could be used to augment bus service elsewhere, transportation employees say.
Like those ubiquitous Detroit cars that predate the U.S. embargo, the camello is a definer of Cuba on wheels, but without the fun of a San Francisco cable car ride or the clean efficiency of the Washington, D.C. Metro.
What it lacks in glamor, it makes up for in sheer mass that dwarfs its Chinese successors.
"We can carry up to 400 people. The bus cannot," lamented conductor Estela Doira. "I'm happy, also sad, because the camello handles a lot more than the bus."
At the start of a camello run one morning last week, it took just over five minutes for 75 passengers to swarm up the steep steps and through the narrow doors at the rear. Doira hung out of a window to make sure no one got stuck. The doors, thin metal with sharp edges, shut with a metallic crack that sounded sharp enough to sever limbs.
The fortunate got one of the 58 plastic seats, while the rest had to stand. Each alighting passenger paid Doira 20 centavos, less than an American penny.
Camellos have no shock absorbers, and every pothole sends a violent jolt through one's feet. At each stop more passengers crowd in — people carrying infants, backpacks, gardening tools and beer bottles stuffed with black market honey. Baby-faced soldiers squeeze in beside college students in hot-pink sunglasses and elderly men looking thin enough to be crushed in the crowd.
It's hard to work one's way on or off, and the driver in his cab can't hear people screaming, "The door! Open the door!"
"Move it, companeros! Move to the front!" they yell.
With no air conditioning, the tropical heat quickly becomes unbearable, and the stench sets in — fresh sweat and body odor, mixed with exhaust and rotting food. Those seated stick their heads out of the windows.
"Only in Cuba. In other countries people wouldn't put up with so much," whispered retiree Mari Gonzalez, who was fortunate enough to snag a seat.
Cubans joke that camellos are racier than a Saturday night at the movies — full of sex and crime, pickpockets and gropers. Overheard conversations between passengers feed the onboard rumor mill: Fidel Castro is dead. No, wait, he's healthy again; he spent last weekend at the beach. The peso will strengthen against the dollar. Or maybe will be replaced with a new currency.
The camello was born in response to fuel shortages in the early 1990s, when the Soviet Union collapsed and Cuba lost its annual $6 billion in subsidies. The economy has since recovered thanks to heavy borrowing from China and nearly 100,000 barrels of oil a day from Venezuela.
Cuba is spending $2 billion to upgrade public transportation and has imported 3,000 modern buses just for the capital. The Yutongs are less sturdy than the camellos and crews are repaving streets to spare them wear and tear.
Fares are double the camello's but offer far more seats and a dramatically smoother ride. Riders can climb on and off easily, ensuring faster trips.
Carmen Lopez, waiting for a Chinese bus to whisk her to her janitor's job, said she's glad to be rid of the camellos but doesn't believe she's seen the last of them.
"When the new buses break down," she said, "they will bring the camellos back again."
HAVANA - First comes the stink of diesel, then a metallic roar, and finally a tower of black smoke that tells you the "camello" — the camel — has reached your stop.
These hulking 18-wheeled beasts, iron mutants made of two Soviet-era buses welded together on a flatbed and pulled by a separate cab, have long been Havana's public transport nightmare — bumpy, hot and jammed with up to 400 passengers at a time.
But their gradual disappearance is a telling sign of change in the twilight of the Fidel Castro age. The last "camello" is expected to go out of service in Havana on Sunday night.
The camello, so named for its humped front and rear sections, is being eclipsed by thousands of new city buses from China as the government under Castro's brother, Raul, resuscitates a public transportation system on the brink of collapse.
Route M-6, running from the capital's southern outskirts uptown to the University of Havana, is the city's last remaining camello route, and municipal authorities say they have been told to pull all camellos off it this weekend.
"I think we should build a monument to the camello," said retiree Salvador Carrera, a camello passenger. "It has been an extraordinary thing."
The capital aside, camellos are far from extinct. The government has an island-wide fleet of more than 1,000, and those from Havana could be used to augment bus service elsewhere, transportation employees say.
Like those ubiquitous Detroit cars that predate the U.S. embargo, the camello is a definer of Cuba on wheels, but without the fun of a San Francisco cable car ride or the clean efficiency of the Washington, D.C. Metro.
What it lacks in glamor, it makes up for in sheer mass that dwarfs its Chinese successors.
"We can carry up to 400 people. The bus cannot," lamented conductor Estela Doira. "I'm happy, also sad, because the camello handles a lot more than the bus."
At the start of a camello run one morning last week, it took just over five minutes for 75 passengers to swarm up the steep steps and through the narrow doors at the rear. Doira hung out of a window to make sure no one got stuck. The doors, thin metal with sharp edges, shut with a metallic crack that sounded sharp enough to sever limbs.
The fortunate got one of the 58 plastic seats, while the rest had to stand. Each alighting passenger paid Doira 20 centavos, less than an American penny.
Camellos have no shock absorbers, and every pothole sends a violent jolt through one's feet. At each stop more passengers crowd in — people carrying infants, backpacks, gardening tools and beer bottles stuffed with black market honey. Baby-faced soldiers squeeze in beside college students in hot-pink sunglasses and elderly men looking thin enough to be crushed in the crowd.
It's hard to work one's way on or off, and the driver in his cab can't hear people screaming, "The door! Open the door!"
"Move it, companeros! Move to the front!" they yell.
With no air conditioning, the tropical heat quickly becomes unbearable, and the stench sets in — fresh sweat and body odor, mixed with exhaust and rotting food. Those seated stick their heads out of the windows.
"Only in Cuba. In other countries people wouldn't put up with so much," whispered retiree Mari Gonzalez, who was fortunate enough to snag a seat.
Cubans joke that camellos are racier than a Saturday night at the movies — full of sex and crime, pickpockets and gropers. Overheard conversations between passengers feed the onboard rumor mill: Fidel Castro is dead. No, wait, he's healthy again; he spent last weekend at the beach. The peso will strengthen against the dollar. Or maybe will be replaced with a new currency.
The camello was born in response to fuel shortages in the early 1990s, when the Soviet Union collapsed and Cuba lost its annual $6 billion in subsidies. The economy has since recovered thanks to heavy borrowing from China and nearly 100,000 barrels of oil a day from Venezuela.
Cuba is spending $2 billion to upgrade public transportation and has imported 3,000 modern buses just for the capital. The Yutongs are less sturdy than the camellos and crews are repaving streets to spare them wear and tear.
Fares are double the camello's but offer far more seats and a dramatically smoother ride. Riders can climb on and off easily, ensuring faster trips.
Carmen Lopez, waiting for a Chinese bus to whisk her to her janitor's job, said she's glad to be rid of the camellos but doesn't believe she's seen the last of them.
"When the new buses break down," she said, "they will bring the camellos back again."
Friday, April 18, 2008
Wednesday, April 16, 2008
The rise of the new energy world order
The rise of the new energy world orderBy Michael T Klare Oil at US$110 a barrel. Gasoline at $3.35 (or more) per gallon. Diesel fuel at $4 per gallon. Independent truckers forced off the road. Home heating oil rising to unconscionable price levels. Jet fuel so expensive that three low-cost airlines stopped flying in the past few weeks. This is just a taste of the latest energy news, signaling a profound change in how all of us, in this country and around the world, are going to live - trends that, so far as anyone can predict, will only become more pronounced as energy supplies dwindle and the global struggle over their allocation intensifies. Energy of all sorts was once hugely abundant, making possible the worldwide economic expansion of the past six decades. This expansion benefited the United States above all - along with its "First World" allies in Europe and the Pacific. Recently, however, a select group of former "Third World" countries - China and India in particular - have sought to participate in this energy bonanza by industrializing their economies and selling a wide range of goods to international markets. This, in turn, has led to an unprecedented spurt in global energy consumption - a 47% rise in the past 20 years alone, according to the US Department of Energy (DoE). An increase of this sort would not be a matter of deep anxiety if the world's primary energy suppliers were capable of producing the needed additional fuels. Instead, we face a frightening reality: a marked slowdown in the expansion of global energy supplies just as demand rises precipitously. These supplies are not exactly disappearing - though that will occur sooner or later - but they are not growing fast enough to satisfy soaring global demand. The combination of rising demand, the emergence of powerful new energy consumers, and the contraction of the global energy supply is demolishing the energy-abundant world we are familiar with and creating in its place a new world order. Think of it as rising powers/shrinking planet. This new world order will be characterized by fierce international competition for dwindling stocks of oil, natural gas, coal and uranium, as well as by a tidal shift in power and wealth from energy-deficit states like China, Japan and the United States to energy-surplus states like Russia, Saudi Arabia and Venezuela. In the process, the lives of everyone will be affected in one way or another - with poor and middle-class consumers in the energy-deficit states experiencing the harshest effects. That's most of us and our children, in case you hadn't quite taken it in. Here, in a nutshell, are five key forces in this new world order which will change our planet:
Intense competition between older and newer economic powers for available supplies of energy. Until very recently, the mature industrial powers of Europe, Asia and North America consumed the lion's share of energy and left the dregs for the developing world. As recently as 1990, the members of the Organization of Economic Cooperation and Development (OECD), the club of the world's richest nations, consumed approximately 57% of world energy; the Soviet Union/Warsaw Pact bloc, 14%; and only 29% was left to the developing world. But that ratio is changing: with strong economic growth in the developing countries, a greater proportion of the world's energy is being consumed by them. By 2010, the developing world's share of energy use is expected to reach 40% and, if current trends persist, 47% by 2030. China plays a critical role in all this. The Chinese alone are projected to consume 17% of world energy by 2015, and 20% by 2025 - by which time, if trend lines continue, it will have overtaken the United States as the world's leading energy consumer. India, which, in 2004, accounted for 3.4% of world energy use, is projected to reach 4.4% by 2025, while consumption in other rapidly industrializing nations like Brazil, Indonesia, Malaysia, Thailand and Turkey is expected to grow as well. These rising economic dynamos will have to compete with the mature economic powers for access to remaining untapped reserves of exportable energy - in many cases, bought up long ago by the private energy firms of the mature powers like Exxon Mobil, Chevron, BP, Total of France and Royal Dutch Shell. Of necessity, the new contenders have developed a potent strategy for competing with the Western "majors": they've created state-owned companies of their own and fashioned strategic alliances with the national oil companies that now control oil and gas reserves in many of the major energy-producing nations. China's Sinopec, for example, has established a strategic alliance with Saudi Aramco, the nationalized giant once owned by Chevron and Exxon Mobil, to explore for natural gas in Saudi Arabia and market Saudi crude oil in China. Likewise, the China National Petroleum Corporation (CNPC) will collaborate with Gazprom, the massive state-controlled Russian natural gas monopoly, to build pipelines and deliver Russian gas to China. Several of these state-owned firms, including CNPC and India's Oil and Natural Gas Corporation, are now set to collaborate with Petroleos de Venezuela SA in developing the extra-heavy crude of the Orinoco belt once controlled by Chevron. In this new stage of energy competition, the advantages long enjoyed by Western energy majors has been eroded by vigorous, state-backed upstarts from the developing world.
The insufficiency of primary energy supplies. The capacity of the global energy industry to satisfy demand is shrinking. By all accounts, the global supply of oil will expand for perhaps another half decade before reaching a peak and beginning to decline, while supplies of natural gas, coal and uranium will probably grow for another decade or two before peaking and commencing their own inevitable declines. In the meantime, global supplies of these existing fuels will prove incapable of reaching the elevated levels demanded. Take oil. The US DoE claims that world oil demand, expected to reach 117.6 million barrels per day in 2030, will be matched by a supply that - miracle of miracles - will hit exactly 117.7 million barrels (including petroleum liquids derived from allied substances like natural gas and Canadian tar sands) at the same time. Most energy professionals, however, consider this estimate highly unrealistic. "One hundred million barrels is now in my view an optimistic case," the chief executive officer of Total, Christophe de Margerie, typically told a London oil conference in October 2007. "It is not my view; it is the industry view, or the view of those who like to speak clearly, honestly, and [are] not just trying to please people." Similarly, the authors of the Medium-Term Oil Market Report, published in July 2007 by the International Energy Agency, an affiliate of the Organization for Economic Cooperation and Development, concluded that world oil output might hit 96 million barrels per day by 2012, but was unlikely to go much beyond that as a dearth of new discoveries made future growth impossible. Daily business-page headlines point to a vortex of clashing trends: worldwide demand will continue to grow as hundred of millions of newly-affluent Chinese and Indian consumers line up to purchase their first automobile (some selling for as little as $2,500); key older "elephant" oil fields like Ghawar in Saudi Arabia and Canterell in Mexico are already in decline or expected to be so soon; and the rate of new oil-field discoveries plunges year after year. So expect global energy shortages and high prices to be a constant source of hardship.
The painfully slow development of energy alternatives. It has long been evident to policymakers that new sources of energy are desperately needed to compensate for the eventual disappearance of existing fuels as well as to slow the buildup of climate-changing "greenhouse gases" in the atmosphere. In fact, wind and solar power have gained significant footholds in some parts of the world. A number of other innovative energy solutions have already been developed and even tested out in university and corporate laboratories. But these alternatives, which now contribute only a tiny percentage of the world's net fuel supply, are simply not being developed fast enough to avert the multifaceted global energy catastrophe that lies ahead. According to the DoE, renewable fuels, including wind, solar and hydropower (along with "traditional" fuels like firewood and dung), supplied but 7.4% of global energy in 2004; biofuels added another 0.3%. Meanwhile, fossil fuels - oil, coal and natural gas - supplied 86% of world energy, nuclear power another 6%. Based on current rates of development and investment, the DoE offers the following dismal projection: In 2030, fossil fuels will still account for exactly the same share of world energy as in 2004. The expected increase in renewables and biofuels is so slight - a mere 8.1% - as to be virtually meaningless. In global warming terms, the implications are nothing short of catastrophic: Rising reliance on coal (especially in China, India and the United States) means that global emissions of carbon dioxide are projected to rise by 59% over the next quarter-century, from 26.9 billion metric tons to 42.9 billion tons. The meaning of this is simple. If these figures hold, there is no hope of averting the worst effects of climate change. When it comes to global energy supplies, the implications are nearly as dire. To meet soaring energy demand, we would need a massive influx of alternative fuels, which would mean equally massive investment - in the trillions of dollars - to ensure that the newest possibilities move rapidly from laboratory to full-scale commercial production; but that, sad to say, is not in the cards. Instead, the major energy firms (backed by lavish US government subsidies and tax breaks) are putting their mega-windfall profits from rising energy prices into vastly expensive (and environmentally questionable) schemes to extract oil and gas from Alaska and the Arctic, or to drill in the deep and difficult waters of the Gulf of Mexico and the Atlantic Ocean. The result? A few more barrels of oil or cubic feet of natural gas at exorbitant prices (with accompanying ecological damage), while non-petroleum alternatives limp along pitifully.
A steady migration of power and wealth from energy-deficit to energy-surplus nations: There are few countries - perhaps a dozen altogether - with enough oil, gas, coal and uranium (or some combination thereof) to meet their own energy needs and provide significant surpluses for export. Not surprisingly, such states will be able to extract increasingly beneficial terms from the much wider pool of energy-deficit nations dependent on them for vital supplies of energy. These terms, primarily of a financial nature, will result in growing mountains of petrodollars being accumulated by the leading oil producers, but will also include political and military concessions. In the case of oil and natural gas, the major energy-surplus states can be counted on two hands. Ten oil-rich states possess 82.2% of the world's proven reserves. In order of importance, they are: Saudi Arabia, Iran, Iraq, Kuwait, the United Arab Emirates, Venezuela, Russia, Libya, Kazakhstan and Nigeria. The possession of natural gas is even more concentrated. Three countries - Russia, Iran and Qatar - harbor an astonishing 55.8% of the world supply. All of these countries are in an enviable position to cash in on the dramatic rise in global energy prices and to extract from potential customers whatever political concessions they deem important. The transfer of wealth alone is already mind-boggling. The oil-exporting countries collected an estimated $970 billion from the importing countries in 2006, and the take for 2007, when finally calculated, is expected to be far higher. A substantial fraction of these dollars, yen and euros have been deposited in sovereign wealth funds (SWFs), giant investment accounts owned by the oil states and deployed for the acquisition of valuable assets around the world. In recent months, the Persian Gulf SWFs have been taking advantage of the financial crisis in the United States to purchase large stakes in strategic sectors of its economy. In November 2007, for example, the Abu Dhabi Investment Authority (ADIA) acquired a $7.5 billion stake in Citigroup, America's largest bank holding company; in January, Citigroup sold an even larger share, worth $12.5 billion, to the Kuwait Investment Authority (KIA) and several other Middle Eastern investors, including Prince Walid bin Talal of Saudi Arabia. The managers of ADIA and KIA insist that they do not intend to use their newly-acquired stakes in Citigroup and other US banks and corporations to influence US economic or foreign policy, but it is hard to imagine that a financial shift of this magnitude, which can only gain momentum in the decades ahead, will not translate into some form of political leverage. In the case of Russia, which has risen from the ashes of the Soviet Union as the world's first energy superpower, it already has. Russia is now the world's leading supplier of natural gas, the second largest supplier of oil and a major producer of coal and uranium. Though many of these assets were briefly privatized during the reign of Boris Yeltsin, President Vladimir Putin has brought most of them back under state control - in some cases by exceedingly questionable legal means. He then used these assets in campaigns to bribe or coerce former Soviet republics on Russia's periphery reliant on it for the bulk of their oil and gas supplies. European Union countries have sometimes expressed dismay at Putin's tactics, but they, too, are dependent on Russian energy supplies, and so have learned to mute their protests to accommodate growing Russian power in Eurasia. Consider Russia a model for the new energy world order.
A growing risk of conflict. Throughout history, major shifts in power have normally been accompanied by violence - in some cases, protracted violent upheavals. Either states at the pinnacle of power have struggled to prevent the loss of their privileged status, or challengers have fought to topple those at the top of the heap. Will that happen now? Will energy-deficit states launch campaigns to wrest the oil and gas reserves of surplus states from their control - the George W Bush administration's war in Iraq might already be thought of as one such attempt or to eliminate competitors among their deficit-state rivals? The high costs and risks of modern warfare are well known and there is a widespread perception that energy problems can best be solved through economic means, not military ones. Nevertheless, the major powers are employing military means in their efforts to gain advantage in the global struggle for energy, and no one should be deluded on the subject. These endeavors could easily enough lead to unintended escalation and conflict. One conspicuous use of military means in the pursuit of energy is obviously the regular transfer of arms and military-support services by the major energy-importing states to their principal suppliers. Both the United States and China, for example, have stepped up their deliveries of arms and equipment to oil-producing states like Angola, Nigeria and Sudan in Africa and, in the Caspian Sea basin, Azerbaijan, Kazakhstan and Kyrgyzstan. The United States has placed particular emphasis on suppressing the armed insurgency in the vital Niger Delta region of Nigeria, where most of the country's oil is produced; Beijing has emphasized arms aid to Sudan, where Chinese-led oil operations are threatened by insurgencies in both the South and Darfur. Russia is also using arms transfers as an instrument in its efforts to gain influence in the major oil- and gas-producing regions of the Caspian Sea basin and the Persian Gulf. Its urge is not to procure energy for its own use, but to dominate the flow of energy to others. In particular, Moscow seeks a monopoly on the transportation of Central Asian gas to Europe via Gazprom's vast pipeline network; it also wants to tap into Iran's mammoth gas fields, further cementing Russia's control over the trade in natural gas. The danger, of course, is that such endeavors, multiplied over time, will provoke regional arms races, exacerbate regional tensions and increase the danger of great-power involvement in any local conflicts that erupt. History has all too many examples of such miscalculations leading to wars that spiral out of control. Think of the years leading up to World War I. In fact, Central Asia and the Caspian today, with their multiple ethnic disorders and great-power rivalries, bear more than a glancing resemblance to the Balkans in the years leading up to 1914. What this adds up to is simple and sobering: the end of the world as you've known it. In the new, energy-centric world we have all now entered, the price of oil will dominate our lives and power will reside in the hands of those who control its global distribution. In this new world order, energy will govern our lives in new ways and on a daily basis. It will determine when, and for what purposes, we use our cars; how high (or low) we turn our thermostats; when, where, or even if, we travel; increasingly, what foods we eat (given that the price of producing and distributing many meats and vegetables is profoundly affected by the cost of oil or the allure of growing corn for ethanol); for some of us, where to live; for others, what businesses we engage in; for all of us, when and under what circumstances we go to war or avoid foreign entanglements that could end in war. This leads to a final observation: the most pressing decision facing the next president and Congress may be how best to accelerate the transition from a fossil-fuel-based energy system to a system based on climate-friendly energy alternatives. Michael T Klare is a professor of peace and world security studies at Hampshire College and the author of Resource Wars and Blood and Oil. Consider this essay a preview of his newest book, Rising Powers, Shrinking Planet: The New Geopolitics of Energy, which has just been published by Metropolitan Books. (Copyright 2008 Michael T Klare.)
Intense competition between older and newer economic powers for available supplies of energy. Until very recently, the mature industrial powers of Europe, Asia and North America consumed the lion's share of energy and left the dregs for the developing world. As recently as 1990, the members of the Organization of Economic Cooperation and Development (OECD), the club of the world's richest nations, consumed approximately 57% of world energy; the Soviet Union/Warsaw Pact bloc, 14%; and only 29% was left to the developing world. But that ratio is changing: with strong economic growth in the developing countries, a greater proportion of the world's energy is being consumed by them. By 2010, the developing world's share of energy use is expected to reach 40% and, if current trends persist, 47% by 2030. China plays a critical role in all this. The Chinese alone are projected to consume 17% of world energy by 2015, and 20% by 2025 - by which time, if trend lines continue, it will have overtaken the United States as the world's leading energy consumer. India, which, in 2004, accounted for 3.4% of world energy use, is projected to reach 4.4% by 2025, while consumption in other rapidly industrializing nations like Brazil, Indonesia, Malaysia, Thailand and Turkey is expected to grow as well. These rising economic dynamos will have to compete with the mature economic powers for access to remaining untapped reserves of exportable energy - in many cases, bought up long ago by the private energy firms of the mature powers like Exxon Mobil, Chevron, BP, Total of France and Royal Dutch Shell. Of necessity, the new contenders have developed a potent strategy for competing with the Western "majors": they've created state-owned companies of their own and fashioned strategic alliances with the national oil companies that now control oil and gas reserves in many of the major energy-producing nations. China's Sinopec, for example, has established a strategic alliance with Saudi Aramco, the nationalized giant once owned by Chevron and Exxon Mobil, to explore for natural gas in Saudi Arabia and market Saudi crude oil in China. Likewise, the China National Petroleum Corporation (CNPC) will collaborate with Gazprom, the massive state-controlled Russian natural gas monopoly, to build pipelines and deliver Russian gas to China. Several of these state-owned firms, including CNPC and India's Oil and Natural Gas Corporation, are now set to collaborate with Petroleos de Venezuela SA in developing the extra-heavy crude of the Orinoco belt once controlled by Chevron. In this new stage of energy competition, the advantages long enjoyed by Western energy majors has been eroded by vigorous, state-backed upstarts from the developing world.
The insufficiency of primary energy supplies. The capacity of the global energy industry to satisfy demand is shrinking. By all accounts, the global supply of oil will expand for perhaps another half decade before reaching a peak and beginning to decline, while supplies of natural gas, coal and uranium will probably grow for another decade or two before peaking and commencing their own inevitable declines. In the meantime, global supplies of these existing fuels will prove incapable of reaching the elevated levels demanded. Take oil. The US DoE claims that world oil demand, expected to reach 117.6 million barrels per day in 2030, will be matched by a supply that - miracle of miracles - will hit exactly 117.7 million barrels (including petroleum liquids derived from allied substances like natural gas and Canadian tar sands) at the same time. Most energy professionals, however, consider this estimate highly unrealistic. "One hundred million barrels is now in my view an optimistic case," the chief executive officer of Total, Christophe de Margerie, typically told a London oil conference in October 2007. "It is not my view; it is the industry view, or the view of those who like to speak clearly, honestly, and [are] not just trying to please people." Similarly, the authors of the Medium-Term Oil Market Report, published in July 2007 by the International Energy Agency, an affiliate of the Organization for Economic Cooperation and Development, concluded that world oil output might hit 96 million barrels per day by 2012, but was unlikely to go much beyond that as a dearth of new discoveries made future growth impossible. Daily business-page headlines point to a vortex of clashing trends: worldwide demand will continue to grow as hundred of millions of newly-affluent Chinese and Indian consumers line up to purchase their first automobile (some selling for as little as $2,500); key older "elephant" oil fields like Ghawar in Saudi Arabia and Canterell in Mexico are already in decline or expected to be so soon; and the rate of new oil-field discoveries plunges year after year. So expect global energy shortages and high prices to be a constant source of hardship.
The painfully slow development of energy alternatives. It has long been evident to policymakers that new sources of energy are desperately needed to compensate for the eventual disappearance of existing fuels as well as to slow the buildup of climate-changing "greenhouse gases" in the atmosphere. In fact, wind and solar power have gained significant footholds in some parts of the world. A number of other innovative energy solutions have already been developed and even tested out in university and corporate laboratories. But these alternatives, which now contribute only a tiny percentage of the world's net fuel supply, are simply not being developed fast enough to avert the multifaceted global energy catastrophe that lies ahead. According to the DoE, renewable fuels, including wind, solar and hydropower (along with "traditional" fuels like firewood and dung), supplied but 7.4% of global energy in 2004; biofuels added another 0.3%. Meanwhile, fossil fuels - oil, coal and natural gas - supplied 86% of world energy, nuclear power another 6%. Based on current rates of development and investment, the DoE offers the following dismal projection: In 2030, fossil fuels will still account for exactly the same share of world energy as in 2004. The expected increase in renewables and biofuels is so slight - a mere 8.1% - as to be virtually meaningless. In global warming terms, the implications are nothing short of catastrophic: Rising reliance on coal (especially in China, India and the United States) means that global emissions of carbon dioxide are projected to rise by 59% over the next quarter-century, from 26.9 billion metric tons to 42.9 billion tons. The meaning of this is simple. If these figures hold, there is no hope of averting the worst effects of climate change. When it comes to global energy supplies, the implications are nearly as dire. To meet soaring energy demand, we would need a massive influx of alternative fuels, which would mean equally massive investment - in the trillions of dollars - to ensure that the newest possibilities move rapidly from laboratory to full-scale commercial production; but that, sad to say, is not in the cards. Instead, the major energy firms (backed by lavish US government subsidies and tax breaks) are putting their mega-windfall profits from rising energy prices into vastly expensive (and environmentally questionable) schemes to extract oil and gas from Alaska and the Arctic, or to drill in the deep and difficult waters of the Gulf of Mexico and the Atlantic Ocean. The result? A few more barrels of oil or cubic feet of natural gas at exorbitant prices (with accompanying ecological damage), while non-petroleum alternatives limp along pitifully.
A steady migration of power and wealth from energy-deficit to energy-surplus nations: There are few countries - perhaps a dozen altogether - with enough oil, gas, coal and uranium (or some combination thereof) to meet their own energy needs and provide significant surpluses for export. Not surprisingly, such states will be able to extract increasingly beneficial terms from the much wider pool of energy-deficit nations dependent on them for vital supplies of energy. These terms, primarily of a financial nature, will result in growing mountains of petrodollars being accumulated by the leading oil producers, but will also include political and military concessions. In the case of oil and natural gas, the major energy-surplus states can be counted on two hands. Ten oil-rich states possess 82.2% of the world's proven reserves. In order of importance, they are: Saudi Arabia, Iran, Iraq, Kuwait, the United Arab Emirates, Venezuela, Russia, Libya, Kazakhstan and Nigeria. The possession of natural gas is even more concentrated. Three countries - Russia, Iran and Qatar - harbor an astonishing 55.8% of the world supply. All of these countries are in an enviable position to cash in on the dramatic rise in global energy prices and to extract from potential customers whatever political concessions they deem important. The transfer of wealth alone is already mind-boggling. The oil-exporting countries collected an estimated $970 billion from the importing countries in 2006, and the take for 2007, when finally calculated, is expected to be far higher. A substantial fraction of these dollars, yen and euros have been deposited in sovereign wealth funds (SWFs), giant investment accounts owned by the oil states and deployed for the acquisition of valuable assets around the world. In recent months, the Persian Gulf SWFs have been taking advantage of the financial crisis in the United States to purchase large stakes in strategic sectors of its economy. In November 2007, for example, the Abu Dhabi Investment Authority (ADIA) acquired a $7.5 billion stake in Citigroup, America's largest bank holding company; in January, Citigroup sold an even larger share, worth $12.5 billion, to the Kuwait Investment Authority (KIA) and several other Middle Eastern investors, including Prince Walid bin Talal of Saudi Arabia. The managers of ADIA and KIA insist that they do not intend to use their newly-acquired stakes in Citigroup and other US banks and corporations to influence US economic or foreign policy, but it is hard to imagine that a financial shift of this magnitude, which can only gain momentum in the decades ahead, will not translate into some form of political leverage. In the case of Russia, which has risen from the ashes of the Soviet Union as the world's first energy superpower, it already has. Russia is now the world's leading supplier of natural gas, the second largest supplier of oil and a major producer of coal and uranium. Though many of these assets were briefly privatized during the reign of Boris Yeltsin, President Vladimir Putin has brought most of them back under state control - in some cases by exceedingly questionable legal means. He then used these assets in campaigns to bribe or coerce former Soviet republics on Russia's periphery reliant on it for the bulk of their oil and gas supplies. European Union countries have sometimes expressed dismay at Putin's tactics, but they, too, are dependent on Russian energy supplies, and so have learned to mute their protests to accommodate growing Russian power in Eurasia. Consider Russia a model for the new energy world order.
A growing risk of conflict. Throughout history, major shifts in power have normally been accompanied by violence - in some cases, protracted violent upheavals. Either states at the pinnacle of power have struggled to prevent the loss of their privileged status, or challengers have fought to topple those at the top of the heap. Will that happen now? Will energy-deficit states launch campaigns to wrest the oil and gas reserves of surplus states from their control - the George W Bush administration's war in Iraq might already be thought of as one such attempt or to eliminate competitors among their deficit-state rivals? The high costs and risks of modern warfare are well known and there is a widespread perception that energy problems can best be solved through economic means, not military ones. Nevertheless, the major powers are employing military means in their efforts to gain advantage in the global struggle for energy, and no one should be deluded on the subject. These endeavors could easily enough lead to unintended escalation and conflict. One conspicuous use of military means in the pursuit of energy is obviously the regular transfer of arms and military-support services by the major energy-importing states to their principal suppliers. Both the United States and China, for example, have stepped up their deliveries of arms and equipment to oil-producing states like Angola, Nigeria and Sudan in Africa and, in the Caspian Sea basin, Azerbaijan, Kazakhstan and Kyrgyzstan. The United States has placed particular emphasis on suppressing the armed insurgency in the vital Niger Delta region of Nigeria, where most of the country's oil is produced; Beijing has emphasized arms aid to Sudan, where Chinese-led oil operations are threatened by insurgencies in both the South and Darfur. Russia is also using arms transfers as an instrument in its efforts to gain influence in the major oil- and gas-producing regions of the Caspian Sea basin and the Persian Gulf. Its urge is not to procure energy for its own use, but to dominate the flow of energy to others. In particular, Moscow seeks a monopoly on the transportation of Central Asian gas to Europe via Gazprom's vast pipeline network; it also wants to tap into Iran's mammoth gas fields, further cementing Russia's control over the trade in natural gas. The danger, of course, is that such endeavors, multiplied over time, will provoke regional arms races, exacerbate regional tensions and increase the danger of great-power involvement in any local conflicts that erupt. History has all too many examples of such miscalculations leading to wars that spiral out of control. Think of the years leading up to World War I. In fact, Central Asia and the Caspian today, with their multiple ethnic disorders and great-power rivalries, bear more than a glancing resemblance to the Balkans in the years leading up to 1914. What this adds up to is simple and sobering: the end of the world as you've known it. In the new, energy-centric world we have all now entered, the price of oil will dominate our lives and power will reside in the hands of those who control its global distribution. In this new world order, energy will govern our lives in new ways and on a daily basis. It will determine when, and for what purposes, we use our cars; how high (or low) we turn our thermostats; when, where, or even if, we travel; increasingly, what foods we eat (given that the price of producing and distributing many meats and vegetables is profoundly affected by the cost of oil or the allure of growing corn for ethanol); for some of us, where to live; for others, what businesses we engage in; for all of us, when and under what circumstances we go to war or avoid foreign entanglements that could end in war. This leads to a final observation: the most pressing decision facing the next president and Congress may be how best to accelerate the transition from a fossil-fuel-based energy system to a system based on climate-friendly energy alternatives. Michael T Klare is a professor of peace and world security studies at Hampshire College and the author of Resource Wars and Blood and Oil. Consider this essay a preview of his newest book, Rising Powers, Shrinking Planet: The New Geopolitics of Energy, which has just been published by Metropolitan Books. (Copyright 2008 Michael T Klare.)
Sarko et le timbre
Sarko élu veut un timbre à son effigie.Il demande qu'on lui fasse un timbre d'excellente qualité.Les timbres sont créés, imprimés et distribués.
« Il n'y a rien d'anormal avec la qualité des timbres ou de la colle.
Le problème vient du fait que les gens ne crachent pas du bon coté ! »
« Il n'y a rien d'anormal avec la qualité des timbres ou de la colle.
Le problème vient du fait que les gens ne crachent pas du bon coté ! »
Monday, April 14, 2008
The rise and fall of American empire
The American empire is in danger and needs rescuing. That is the consensus among strategists, columnists and book authors in the United States and in the West. How is it that the United States, which ascended as an empire and pre-eminent global power after the collapse of the Berlin Wall in 1989 and the shattering of the Soviet Union in 1991, is losing the respect of its European allies and gaining the resentment of many countries, including those of the Middle East?
During the Cold War, the United States never fought the Soviet Union -- it would have been a deadly war. Instead, the US conducted a policy of deterrence with its adversary: both were engaged in an ideological contest, or "chess game", as Zbigniew Brzezinski, president Carter's former national security adviser, likes to call it. To the United States, the Soviet Union was a godless and authoritarian country that should burn in hell. The Soviet Union considered the US a capitalist class dictatorship that was exploiting the working people. Christian principles dominated American culture from its early beginning. President Ronald Reagan polarised that religious distinction when he described the Soviet Union as the "Evil Empire".
Some writers argue that the United States acted as an empire from the first. But the notion of empire as an ideological slogan was most actively promoted by the American neo-conservatives who adopted Ronald Reagan's ideology about Armageddon and good defeating evil. With a prophetic cast of mind, the neo- cons' ethos was (and remains) that America has a mission to spread its democracy and culture everywhere, particularly in the Arab world (where the oil is), and by force or coup if necessary. In the name of freedom and democracy America has used military force against many countries, most of them small and weak, committing atrocities, killing unarmed civilians, including women and children, and destroying their homes, as happened in Hiroshima and Nagasaki, in Korea, in the saturation bombing of North Vietnamese cities, in Afghanistan, and in Iraq.
Ironically, American presidents did nothing to prevent Hitler from crashing into Poland and the Soviet Union's bloody invasion of Hungary, or to stop the genocide in Rwanda and the ethnic cleansing of Muslim Albanians in Kosovo (Bill Clinton's persuasion of NATO to interfere was much too late, as historian and writer Michael Ignatieff observed in his lengthy article, "Why we are in Iraq, Liberia and Afghanistan," published in The New York Times Magazine, 7 September 2003). The United States became the policeman of the world, but not a good one. Strategists and writers, some conservatives among them, now declare that those actions and lack of were not done in the interest of the United States, or according to the rule of law. Worse was to follow. The slogan of "democracy and freedom" shaped the neo-conservatives' agenda, most evangelical Christians, with a few being Jews, and described by some as more loyal to Israel than to America -- obvious from their resistance to the creation of a Palestinian state.
The religious education of President George W Bush as an evangelical Christian drove his rigid and unlettered mind to believe that his decisions originated from divine revelation. Comparing himself to Reagan, Bush II plagiarised him by scorning North Korea, Iraq and Iran as the "Axis of Evil", associating an allegedly unfaithful and godless communist country with two of the largest Muslim countries in the Middle East, a region he and the neo-cons, and likely most of the American people and its policymakers, knew little about. It was the neo-cons' belief, which Bush II adopted, though he pretended otherwise, that Islam was America's number one enemy. Peter Gottschalk and Gabriel Greenberg say in their 2008 book Islamophobia: Making Muslim Countries the Enemy, that Bush II "suggested that Islam was replacing communism as the ideology of perennial conflict in America's foreign affairs and of a perpetual fear in domestic life".
Since, Islam in the minds of many Americans became synonymous with violent Muslim men and oppressed Muslim women, the security of Middle East oil, vital to the continuing welfare of America and the West, caught in the crossfire. Enmity towards Islam, many Western writers agree, goes back to the Crusades and became part of the Christian European heritage. The OPEC oil embargo during the 1973 War between Egypt and Israel, that increased the price of oil to unprecedented levels, shocked American industry and America's lifestyle, culture and freedom, all which became dependent on cheap oil. The ground already laid was simply reseeded, culminating in what in recent years we have witnessed.
Five years ago, exactly on 19 March 2003, Bush II fulfilled his promise to the neo-cons by pre-emptively invading Iraq without provocation or any imminent attack by Saddam Hussein. A few weeks after the invasion by air and ground forces, the American army entered Baghdad meeting no apparent resistance by the Iraqi army, as reported at the time. That army did not surrender, but rather disappeared; from soldier to general ranks, all went back to their homes. After it was proven that claims by the Bush administration of Iraq's possession of weapons of mass destruction and links existing between Saddam and Al-Qaeda were false, Bush II changed tone and claimed that he invaded Iraq to liberate it from Saddam and to establish democracy there and in the Middle East. The fact is that oil and the security of Israel, and not weapons of mass destruction or liberating Iraq, were the real reasons for which Bush II and his neo-con backers invaded Iraq.
Unfortunately for Bush, the war in Iraq has not been a cakewalk, as he and his neo-con backers had led the American people to believe it would be. In April 2003, after Baghdad was secured, chaos spread in the capital and looters stole the treasures and most valuable ancient artefacts of Iraq's national museum while American soldiers nearby closed their eyes or looked the other way. American mismanagement of the war has caused a civil war between Sunnis and Shias in Iraq, allowed the plundering of Iraqi treasures and the destruction of Iraqi property, provoked Iraqi insurgents, and favoured American companies in oil deals and reconstruction. The war is still going on in Afghanistan after resurgence by the Taliban who operate out of Pakistan, America's authoritarian ally. In Iraq and Afghanistan, civilians have been killed by American troops, human rights violated by the American occupying armies, and Afghanis, Iraqis and other Arabs, detained indefinitely at Abu Ghraib and Guantanamo Bay prisons, tortured, abused and denied due process of law (see 'The echoes of justice', Al-Ahram Weekly, 17-23 February 2005). After 11 September 2001, there were calls in the United States to detain Arab Americans in concentration camps as happened with Japanese Americans during World War II.
Many writers now consider the war in Iraq part of the programme of "fundamental capitalism" applied and polarised by Ronald Reagan and George W Bush: supply side economic policies of cutting taxes, mostly for the rich and big corporations, and freeing the financial market from regulatory requirements, causing the rich to become richer and the poor to become poorer, and causing the crash of the stock market in 1987 and 2001 along with economic crises in America and the industrialised world. America, in reality, is dependent on foreign debt to finance itself. Robert Kuttner, a newspaper columnist and commentator, in his 2007 book The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity, explains the above situation. Kuttner notes that the devaluation of the dollar, which reached a humiliating low during the Bush II administration until now, and the deterioration of moral values in the economic sphere are causing havoc. The war in Iraq, Kuttner says, resulted in the destruction of democracy and the rule of law. Although there are several factors that caused the deterioration of US status in the world, most analysts agree that the war on Iraq was the straw that broke the camel's back.
Frances Fukuyama argued in his widely read book The End of History and the Last Man that the disintegration of the Soviet Union marked the end of all ideological evolution and that the reshaping of governments along the lines of Western democracy (he meant American democracy) was inevitable. Democratic capitalism had prevailed, he declared, the world ready to embrace its destiny. Fukuyama was among the devoted neo-cons who called upon President Bill Clinton to invade Iraq and complete the job Bush I left undone, but Clinton declined and continued his policy of containment of Iraq. After 11 September, Fukuyama vehemently supported Bush II's invasion of Iraq. When it appeared later that the invasion was staged on false pretences and that the American occupation of Iraq was mismanaged, Fukuyama, in his 2007 book America at Crossroads, disavowed the neo-con current and called for a return to realism in American foreign policy.
Many leading strategists and columnists who were opponents of the invasion of Iraq consider that the war, along with the state of the economy, Bush II's controversial social policy and refusal to respect America's international obligations, has tarnished America's status as a global power, brought European resentment down upon the United States, and destabilised the Middle East now dominated by a wave of anti-Americanism. Although many American presidents contributed to the deterioration of America's status, many call Bush II's presidency the most disastrous in America's history. Bush II will be leaving the White House by year's end after breaking his promises to the American people and blundering to historic proportions. It is a fact that the country is fighting three wars: one in Iraq, the second against the resurgent Taliban in Afghanistan, and the third in the economy. The war on Iraq has depleted the US budget, divided America like no other war and with no prospective end, and alienated old friends while creating new enemies. Bush II has thus abdicated his responsibilities.
Now, in order to restore America's status, most writers in the US are calling for peace negotiations as the only alternative to war. Brzezinski in his latest book of 2007, A Second Chance: Three Presidents and the Crisis of American Power, blames the last three presidents, Bush I, Bill Clinton and in particular Bush II, for the squandering of America's global power either by making wrong decisions or by declining to act when necessary. He proposes a change of approach in America's foreign relations with Europe, Russia, China, India (the last two are emerging as new superpowers) and Latin America. He urges the next president to negotiate with Iran on its nuclear experiments and to press the Israelis to conclude a peace treaty with the Palestinians to end their conflict, which he considers the biggest reason for anti-American resentment in the Middle East. The author, along with others, considers that Bush II's invasion of Iraq and mismanagement of the occupation has escalated the fall of the empire, become a cemetery for the neo-conservative movement, and ended the US bid for hegemony. British historian Niall Ferguson, in his 2004 article in Foreign Affairs entitled "A world without power", says a world without hegemony may be preferable to US primacy.
This is the line that some conservative Republicans and many Democrats are now promoting. Patrick Buchanan, a leading Christian conservative Republican who opposed the first Gulf War and the invasion of Iraq in 2003 believes that the present war in Iraq, the nuclear standoff with Iran and the status of the American economy show that it is not in the interests of the United States to reform the world. In his latest 2007 book, Day of Reckoning: How Hubris, Ideology and Greed are Tearing America Apart, he advocates a return to the policies of deterrence and containment. He portentously insists that the United States should disengage from international military commitments such as NATO, and from trade agreements; abandon its commitments to Taiwan and South Korea, and withdraw from Iraq. He further suggests negotiating with Iran instead of threatening it. But he does not exclude the use of military force against terrorists who act in groups. America, however, should go to war only if there is an imminent danger or actual attack against it. Buchanan is against unprovoked pre-emptive wars. That is why he, after 11 September, endorsed attacking Al-Qaeda and the Taliban that harboured it in Afghanistan and opposed the invasion of Iraq because Saddam did not attack the US. Not in generations, Buchanan among others believes, has conservatism been in as much trouble as it is now.
Along the same lines, Madeline Albright, Clinton's former secretary of state, writes in her 2008 book, A Memo to the Next President, that diplomacy is the best means to solve world problems. She advocates the need for a new foreign policy based on negotiations, as well as cooperation with and respect for the sovereignty of all states.
The real challenge now is how the next president plans to clean up the mess left by Bush II. It will not be easy. Most important, the US should deal with the world not as an empire or a blackmailer, through foreign aid and military superiority, but as a superpower that respects its obligations and cooperates with other prospective superpowers and the rest of the world. America is paying the price of its wilful amnesia. The notion of empire became a matter of history. Ancient and old empires disappeared when decadence prevailed, and this is what America is facing now. The real danger is whether the neo-conservatives will succeed in taking over the country again. If that happens, then the demolition of the Berlin Wall would have been a waste.
* The writer is an international lawyer.
During the Cold War, the United States never fought the Soviet Union -- it would have been a deadly war. Instead, the US conducted a policy of deterrence with its adversary: both were engaged in an ideological contest, or "chess game", as Zbigniew Brzezinski, president Carter's former national security adviser, likes to call it. To the United States, the Soviet Union was a godless and authoritarian country that should burn in hell. The Soviet Union considered the US a capitalist class dictatorship that was exploiting the working people. Christian principles dominated American culture from its early beginning. President Ronald Reagan polarised that religious distinction when he described the Soviet Union as the "Evil Empire".
Some writers argue that the United States acted as an empire from the first. But the notion of empire as an ideological slogan was most actively promoted by the American neo-conservatives who adopted Ronald Reagan's ideology about Armageddon and good defeating evil. With a prophetic cast of mind, the neo- cons' ethos was (and remains) that America has a mission to spread its democracy and culture everywhere, particularly in the Arab world (where the oil is), and by force or coup if necessary. In the name of freedom and democracy America has used military force against many countries, most of them small and weak, committing atrocities, killing unarmed civilians, including women and children, and destroying their homes, as happened in Hiroshima and Nagasaki, in Korea, in the saturation bombing of North Vietnamese cities, in Afghanistan, and in Iraq.
Ironically, American presidents did nothing to prevent Hitler from crashing into Poland and the Soviet Union's bloody invasion of Hungary, or to stop the genocide in Rwanda and the ethnic cleansing of Muslim Albanians in Kosovo (Bill Clinton's persuasion of NATO to interfere was much too late, as historian and writer Michael Ignatieff observed in his lengthy article, "Why we are in Iraq, Liberia and Afghanistan," published in The New York Times Magazine, 7 September 2003). The United States became the policeman of the world, but not a good one. Strategists and writers, some conservatives among them, now declare that those actions and lack of were not done in the interest of the United States, or according to the rule of law. Worse was to follow. The slogan of "democracy and freedom" shaped the neo-conservatives' agenda, most evangelical Christians, with a few being Jews, and described by some as more loyal to Israel than to America -- obvious from their resistance to the creation of a Palestinian state.
The religious education of President George W Bush as an evangelical Christian drove his rigid and unlettered mind to believe that his decisions originated from divine revelation. Comparing himself to Reagan, Bush II plagiarised him by scorning North Korea, Iraq and Iran as the "Axis of Evil", associating an allegedly unfaithful and godless communist country with two of the largest Muslim countries in the Middle East, a region he and the neo-cons, and likely most of the American people and its policymakers, knew little about. It was the neo-cons' belief, which Bush II adopted, though he pretended otherwise, that Islam was America's number one enemy. Peter Gottschalk and Gabriel Greenberg say in their 2008 book Islamophobia: Making Muslim Countries the Enemy, that Bush II "suggested that Islam was replacing communism as the ideology of perennial conflict in America's foreign affairs and of a perpetual fear in domestic life".
Since, Islam in the minds of many Americans became synonymous with violent Muslim men and oppressed Muslim women, the security of Middle East oil, vital to the continuing welfare of America and the West, caught in the crossfire. Enmity towards Islam, many Western writers agree, goes back to the Crusades and became part of the Christian European heritage. The OPEC oil embargo during the 1973 War between Egypt and Israel, that increased the price of oil to unprecedented levels, shocked American industry and America's lifestyle, culture and freedom, all which became dependent on cheap oil. The ground already laid was simply reseeded, culminating in what in recent years we have witnessed.
Five years ago, exactly on 19 March 2003, Bush II fulfilled his promise to the neo-cons by pre-emptively invading Iraq without provocation or any imminent attack by Saddam Hussein. A few weeks after the invasion by air and ground forces, the American army entered Baghdad meeting no apparent resistance by the Iraqi army, as reported at the time. That army did not surrender, but rather disappeared; from soldier to general ranks, all went back to their homes. After it was proven that claims by the Bush administration of Iraq's possession of weapons of mass destruction and links existing between Saddam and Al-Qaeda were false, Bush II changed tone and claimed that he invaded Iraq to liberate it from Saddam and to establish democracy there and in the Middle East. The fact is that oil and the security of Israel, and not weapons of mass destruction or liberating Iraq, were the real reasons for which Bush II and his neo-con backers invaded Iraq.
Unfortunately for Bush, the war in Iraq has not been a cakewalk, as he and his neo-con backers had led the American people to believe it would be. In April 2003, after Baghdad was secured, chaos spread in the capital and looters stole the treasures and most valuable ancient artefacts of Iraq's national museum while American soldiers nearby closed their eyes or looked the other way. American mismanagement of the war has caused a civil war between Sunnis and Shias in Iraq, allowed the plundering of Iraqi treasures and the destruction of Iraqi property, provoked Iraqi insurgents, and favoured American companies in oil deals and reconstruction. The war is still going on in Afghanistan after resurgence by the Taliban who operate out of Pakistan, America's authoritarian ally. In Iraq and Afghanistan, civilians have been killed by American troops, human rights violated by the American occupying armies, and Afghanis, Iraqis and other Arabs, detained indefinitely at Abu Ghraib and Guantanamo Bay prisons, tortured, abused and denied due process of law (see 'The echoes of justice', Al-Ahram Weekly, 17-23 February 2005). After 11 September 2001, there were calls in the United States to detain Arab Americans in concentration camps as happened with Japanese Americans during World War II.
Many writers now consider the war in Iraq part of the programme of "fundamental capitalism" applied and polarised by Ronald Reagan and George W Bush: supply side economic policies of cutting taxes, mostly for the rich and big corporations, and freeing the financial market from regulatory requirements, causing the rich to become richer and the poor to become poorer, and causing the crash of the stock market in 1987 and 2001 along with economic crises in America and the industrialised world. America, in reality, is dependent on foreign debt to finance itself. Robert Kuttner, a newspaper columnist and commentator, in his 2007 book The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity, explains the above situation. Kuttner notes that the devaluation of the dollar, which reached a humiliating low during the Bush II administration until now, and the deterioration of moral values in the economic sphere are causing havoc. The war in Iraq, Kuttner says, resulted in the destruction of democracy and the rule of law. Although there are several factors that caused the deterioration of US status in the world, most analysts agree that the war on Iraq was the straw that broke the camel's back.
Frances Fukuyama argued in his widely read book The End of History and the Last Man that the disintegration of the Soviet Union marked the end of all ideological evolution and that the reshaping of governments along the lines of Western democracy (he meant American democracy) was inevitable. Democratic capitalism had prevailed, he declared, the world ready to embrace its destiny. Fukuyama was among the devoted neo-cons who called upon President Bill Clinton to invade Iraq and complete the job Bush I left undone, but Clinton declined and continued his policy of containment of Iraq. After 11 September, Fukuyama vehemently supported Bush II's invasion of Iraq. When it appeared later that the invasion was staged on false pretences and that the American occupation of Iraq was mismanaged, Fukuyama, in his 2007 book America at Crossroads, disavowed the neo-con current and called for a return to realism in American foreign policy.
Many leading strategists and columnists who were opponents of the invasion of Iraq consider that the war, along with the state of the economy, Bush II's controversial social policy and refusal to respect America's international obligations, has tarnished America's status as a global power, brought European resentment down upon the United States, and destabilised the Middle East now dominated by a wave of anti-Americanism. Although many American presidents contributed to the deterioration of America's status, many call Bush II's presidency the most disastrous in America's history. Bush II will be leaving the White House by year's end after breaking his promises to the American people and blundering to historic proportions. It is a fact that the country is fighting three wars: one in Iraq, the second against the resurgent Taliban in Afghanistan, and the third in the economy. The war on Iraq has depleted the US budget, divided America like no other war and with no prospective end, and alienated old friends while creating new enemies. Bush II has thus abdicated his responsibilities.
Now, in order to restore America's status, most writers in the US are calling for peace negotiations as the only alternative to war. Brzezinski in his latest book of 2007, A Second Chance: Three Presidents and the Crisis of American Power, blames the last three presidents, Bush I, Bill Clinton and in particular Bush II, for the squandering of America's global power either by making wrong decisions or by declining to act when necessary. He proposes a change of approach in America's foreign relations with Europe, Russia, China, India (the last two are emerging as new superpowers) and Latin America. He urges the next president to negotiate with Iran on its nuclear experiments and to press the Israelis to conclude a peace treaty with the Palestinians to end their conflict, which he considers the biggest reason for anti-American resentment in the Middle East. The author, along with others, considers that Bush II's invasion of Iraq and mismanagement of the occupation has escalated the fall of the empire, become a cemetery for the neo-conservative movement, and ended the US bid for hegemony. British historian Niall Ferguson, in his 2004 article in Foreign Affairs entitled "A world without power", says a world without hegemony may be preferable to US primacy.
This is the line that some conservative Republicans and many Democrats are now promoting. Patrick Buchanan, a leading Christian conservative Republican who opposed the first Gulf War and the invasion of Iraq in 2003 believes that the present war in Iraq, the nuclear standoff with Iran and the status of the American economy show that it is not in the interests of the United States to reform the world. In his latest 2007 book, Day of Reckoning: How Hubris, Ideology and Greed are Tearing America Apart, he advocates a return to the policies of deterrence and containment. He portentously insists that the United States should disengage from international military commitments such as NATO, and from trade agreements; abandon its commitments to Taiwan and South Korea, and withdraw from Iraq. He further suggests negotiating with Iran instead of threatening it. But he does not exclude the use of military force against terrorists who act in groups. America, however, should go to war only if there is an imminent danger or actual attack against it. Buchanan is against unprovoked pre-emptive wars. That is why he, after 11 September, endorsed attacking Al-Qaeda and the Taliban that harboured it in Afghanistan and opposed the invasion of Iraq because Saddam did not attack the US. Not in generations, Buchanan among others believes, has conservatism been in as much trouble as it is now.
Along the same lines, Madeline Albright, Clinton's former secretary of state, writes in her 2008 book, A Memo to the Next President, that diplomacy is the best means to solve world problems. She advocates the need for a new foreign policy based on negotiations, as well as cooperation with and respect for the sovereignty of all states.
The real challenge now is how the next president plans to clean up the mess left by Bush II. It will not be easy. Most important, the US should deal with the world not as an empire or a blackmailer, through foreign aid and military superiority, but as a superpower that respects its obligations and cooperates with other prospective superpowers and the rest of the world. America is paying the price of its wilful amnesia. The notion of empire became a matter of history. Ancient and old empires disappeared when decadence prevailed, and this is what America is facing now. The real danger is whether the neo-conservatives will succeed in taking over the country again. If that happens, then the demolition of the Berlin Wall would have been a waste.
* The writer is an international lawyer.
Thursday, April 10, 2008
Water Pipelines Across the US Are Breaking; Repair Costs Put at Nearly $300 Billion
COLLEEN LONGAP News
Apr 08, 2008 14:31 EST
Two hours north of New York City, a mile-long stream and a marsh the size of a football field have mysteriously formed along a country road. They are such a marvel that people come from miles around to drink the crystal-clear water, believing it is bubbling up from a hidden natural spring.
The truth is far less romantic: The water is coming from a cracked 70-year-old tunnel hundreds of feet below ground, scientists say.
The tunnel is leaking up to 36 million gallons a day as it carries drinking water from a reservoir to the big city. It is a powerful warning sign of a larger problem around the country: The infrastructure that delivers water to the nation's cities is badly aging and in need of repairs.
The Environmental Protection Agency says utilities will need to invest more than $277 billion over the next two decades on repairs and improvements to drinking water systems. Water industry engineers put the figure drastically higher, at about $480 billion.
Water utilities, largely managed by city governments, have never faced improvements of this magnitude before. And customers will have to bear the majority of the cost through rate increases, according to the American Water Works Association, an industry group.
Engineers say this is a crucial era for the nation's water systems, especially in older cities like New York, where some pipes and tunnels were built in the 1800s and are now nearing the end of their life expectancies.
"Our generation hasn't experienced anything like this. We weren't around when the infrastructure was being built," said Greg Kail, spokesman for the water industry group. "We didn't pay for the pipes to be put in the ground, but we sure benefited from the improvements to public health that came from it."
He said the situation has not reached crisis stage, but without a serious investment, "it can become a crisis. Each year the problem is put on the back burner, the price tag is going to go up."
Catastrophic problems can arise when infrastructure fails. An 84-year-old steam pipe erupted beneath a New York street last year, creating a mammoth geyser that rained mud and debris down on the city.
In Chicago, an 80-year-old cast-iron water main broke earlier this year, spilling thousands of gallons and opening up a 25-foot hole in the street.
In Denver, up to 4 million gallons of water gushed from a ruptured 30-year-old pipeline in February, gouging a sinkhole across three lanes of Interstate 25. The lanes were shut down for nearly two weeks.
Cleveland has spent hundreds of millions of dollars on infrastructure in the past 20 years but still must repair daily breaks. Last month, a break in a 2 1/2-foot-diameter water main turned a downtown square into a watery crater and knocked out other utilities.
The amount of wasted water from these breaches is staggering.
The 36 million gallons a day that leak from the 85-mile Delaware Aqueduct in New York state amounts to more than 1 billion gallons a month. That may be a drop in the bucket compared to the hundreds of billions of water consumed in New York City every year, but the daily leak in the tunnel would meet the daily demands of drought-ravaged Raleigh, N.C.
Residents in Wawarsing, about 100 miles from New York City, blame tunnel leaks for the constant flooding in their yards and basements. Department of Environmental Protection engineers are trying to determine whether the aqueduct is really responsible for the soggy mess along Route 209 that has gotten considerably worse over the last 10 years.
David Sickles said the water just bubbles up from the cracks in the concrete in his basement — even when it doesn't rain.
"It's like there is too much water in the ground already," Sickles said, showing off the water line on the concrete wall of his basement. "There's no place for this to go."
Nearly every house has a black discharge hose running from the basement through the yard, gushing water into already-soggy patches of grass.
The land around Laura Smith's house turns into a lake when the snow melts, and her driveway is so muddy your feet sink when you walk to her front door.
Utilites currently spend about $10.4 billion annually on large-scale repairs and improvements on drinking water infrastructure, a figure that has been relatively flat during the past two decades, the EPA said.
Cities have a hard time convincing residents that they should spend money on something they never see, buried hundreds of feet underground. And often, public officials pawn the responsibility off on the next person elected, Kail said.
Repairs tend to be long and costly, especially since many systems were built nearly a century ago, deep underground, where buildings and major roads now stand.
Even monitoring pipes for vulnerabilities can be expensive and tricky, since it's not possible to shut down a city's water supply to test for leaks. If New York were to do that to the Delaware Aqueduct, for example, the 13 1/2-foot-diameter tunnel might crumble under the crushing weight of the land without the water to support the duct.
The Department of Environmental Protection monitors leaks by sending water through the tunnel and measuring how much comes out at the end. The department also sends robots that swim through the tunnels and collect data on their condition.
The amount of water being lost is inconsequential, given that reservoirs are so full, said Environmental Commissioner Emily Lloyd. But she said it is important to fix the leaks now because there is no way to tell how the system might deteriorate in the next 30 years.
New York has spent decades digging a new $6 billion tunnel that will create an alternative source of water delivery and allow for easier inspection and repair of the other tunnels. It is expected to be completed by 2020.
Around the country, water rates are going up to help pay for the repairs, estimated at anywhere between $550 and $7,000 per household during the next three decades.
Augusta, Ga., raised rates 11 percent from 2001 through 2007 for a $300 million program to improve the deteriorating water system. Cleveland gradually increased rates by about 6 percent for more than 15 years to fund a $750 million project to address aging and inefficient pipes. Springfield, Mass., doubled rates for its 250,000 customers. Philadelphia, Kenosha, Wis., Portsmouth, Va., and other cities have followed suit.
Many engineers and water utilities say water bills around the country are too low. In New York City, where a studio apartment can rent for more than $3,000 a month, the cost of water and sewage is about $60 for an entire single-family home.
"We are the only utility where the raw material is free, but the infrastructure is the most expensive," said Nick DeBenedictis, chief executive of Aqua America, a water company that serves 3 million people in 13 states. "We have to dig up streets in order to do it, but once we make investments it's good for years."
Apr 08, 2008 14:31 EST
Two hours north of New York City, a mile-long stream and a marsh the size of a football field have mysteriously formed along a country road. They are such a marvel that people come from miles around to drink the crystal-clear water, believing it is bubbling up from a hidden natural spring.
The truth is far less romantic: The water is coming from a cracked 70-year-old tunnel hundreds of feet below ground, scientists say.
The tunnel is leaking up to 36 million gallons a day as it carries drinking water from a reservoir to the big city. It is a powerful warning sign of a larger problem around the country: The infrastructure that delivers water to the nation's cities is badly aging and in need of repairs.
The Environmental Protection Agency says utilities will need to invest more than $277 billion over the next two decades on repairs and improvements to drinking water systems. Water industry engineers put the figure drastically higher, at about $480 billion.
Water utilities, largely managed by city governments, have never faced improvements of this magnitude before. And customers will have to bear the majority of the cost through rate increases, according to the American Water Works Association, an industry group.
Engineers say this is a crucial era for the nation's water systems, especially in older cities like New York, where some pipes and tunnels were built in the 1800s and are now nearing the end of their life expectancies.
"Our generation hasn't experienced anything like this. We weren't around when the infrastructure was being built," said Greg Kail, spokesman for the water industry group. "We didn't pay for the pipes to be put in the ground, but we sure benefited from the improvements to public health that came from it."
He said the situation has not reached crisis stage, but without a serious investment, "it can become a crisis. Each year the problem is put on the back burner, the price tag is going to go up."
Catastrophic problems can arise when infrastructure fails. An 84-year-old steam pipe erupted beneath a New York street last year, creating a mammoth geyser that rained mud and debris down on the city.
In Chicago, an 80-year-old cast-iron water main broke earlier this year, spilling thousands of gallons and opening up a 25-foot hole in the street.
In Denver, up to 4 million gallons of water gushed from a ruptured 30-year-old pipeline in February, gouging a sinkhole across three lanes of Interstate 25. The lanes were shut down for nearly two weeks.
Cleveland has spent hundreds of millions of dollars on infrastructure in the past 20 years but still must repair daily breaks. Last month, a break in a 2 1/2-foot-diameter water main turned a downtown square into a watery crater and knocked out other utilities.
The amount of wasted water from these breaches is staggering.
The 36 million gallons a day that leak from the 85-mile Delaware Aqueduct in New York state amounts to more than 1 billion gallons a month. That may be a drop in the bucket compared to the hundreds of billions of water consumed in New York City every year, but the daily leak in the tunnel would meet the daily demands of drought-ravaged Raleigh, N.C.
Residents in Wawarsing, about 100 miles from New York City, blame tunnel leaks for the constant flooding in their yards and basements. Department of Environmental Protection engineers are trying to determine whether the aqueduct is really responsible for the soggy mess along Route 209 that has gotten considerably worse over the last 10 years.
David Sickles said the water just bubbles up from the cracks in the concrete in his basement — even when it doesn't rain.
"It's like there is too much water in the ground already," Sickles said, showing off the water line on the concrete wall of his basement. "There's no place for this to go."
Nearly every house has a black discharge hose running from the basement through the yard, gushing water into already-soggy patches of grass.
The land around Laura Smith's house turns into a lake when the snow melts, and her driveway is so muddy your feet sink when you walk to her front door.
Utilites currently spend about $10.4 billion annually on large-scale repairs and improvements on drinking water infrastructure, a figure that has been relatively flat during the past two decades, the EPA said.
Cities have a hard time convincing residents that they should spend money on something they never see, buried hundreds of feet underground. And often, public officials pawn the responsibility off on the next person elected, Kail said.
Repairs tend to be long and costly, especially since many systems were built nearly a century ago, deep underground, where buildings and major roads now stand.
Even monitoring pipes for vulnerabilities can be expensive and tricky, since it's not possible to shut down a city's water supply to test for leaks. If New York were to do that to the Delaware Aqueduct, for example, the 13 1/2-foot-diameter tunnel might crumble under the crushing weight of the land without the water to support the duct.
The Department of Environmental Protection monitors leaks by sending water through the tunnel and measuring how much comes out at the end. The department also sends robots that swim through the tunnels and collect data on their condition.
The amount of water being lost is inconsequential, given that reservoirs are so full, said Environmental Commissioner Emily Lloyd. But she said it is important to fix the leaks now because there is no way to tell how the system might deteriorate in the next 30 years.
New York has spent decades digging a new $6 billion tunnel that will create an alternative source of water delivery and allow for easier inspection and repair of the other tunnels. It is expected to be completed by 2020.
Around the country, water rates are going up to help pay for the repairs, estimated at anywhere between $550 and $7,000 per household during the next three decades.
Augusta, Ga., raised rates 11 percent from 2001 through 2007 for a $300 million program to improve the deteriorating water system. Cleveland gradually increased rates by about 6 percent for more than 15 years to fund a $750 million project to address aging and inefficient pipes. Springfield, Mass., doubled rates for its 250,000 customers. Philadelphia, Kenosha, Wis., Portsmouth, Va., and other cities have followed suit.
Many engineers and water utilities say water bills around the country are too low. In New York City, where a studio apartment can rent for more than $3,000 a month, the cost of water and sewage is about $60 for an entire single-family home.
"We are the only utility where the raw material is free, but the infrastructure is the most expensive," said Nick DeBenedictis, chief executive of Aqua America, a water company that serves 3 million people in 13 states. "We have to dig up streets in order to do it, but once we make investments it's good for years."
Tuesday, April 08, 2008
This is The Time to Smash The Ghetto Wall at Rafah, Again
Comment by Tony Sayegh
In retrospect, it is becoming obvious that Hamas made a mistake by agreeing to "negotiations" with the Pharaoh's regime about supposedly reopening the Rafah crossing between Gaza and Egypt. That regime, beholden to USrael, never intended to re-open that crossing. The instructions of the princess of darkness Rice were clear: let the Palestinians in Gaza starve in preparation for Israeli tanks to sweep the Strip to finish off Hamas and to reinstall her toy, Mahmoud Abbas.The Pharaoh was buying time to build a more durable concrete ghetto wall and to get USraeli permission to increase the number of Egyptian troops to seal the ghetto from the Egyptian side. The Pharaoh's regime was also concerned about reaction of the Egyptian street in sympathy with the Palestinian jail breakers. The regime is hugely unpopular inside of Egypt and the last thing it needed was a mass Palestinian uprising busting out of the Gaza ghetto.The Pharaoh's trick worked and Hamas was suckered in. Hamas even worked with the Pharaoh's goons to re-close the Rafah crossing and to prevent the Palestinians from attempting to cross to Egypt. After more than two months of meaningless "negotiations" with the regime about ending the siege and reopening the crossing, the Hamas team has returned from Cairo empty handed. After many false promises of imminent re-opening and other "positive" spin, Hamas is now forced to admit that the "negotiations" were a farce and a trick. The situation inside Gaza now is even worse than it was in late January when the wall fell. More people are dying due to lack of medicine, fuel and food and the supplies have dwindled to virtually nothing.With the Egyptian uprising against the Pharaoh of the past couple of days spreading, this is the time to correct the mistake made earlier by Hamas. This time hundreds of thousands of Palestinians should storm the ghetto wall and this time keep the border open. There will be gun fire from the Egyptian side and some Palestinian legs will get broken as the Pharaoh's foreign minister Abu Alghait threatened. However, the Palestinians are dying a slow agonizing death as is. More than 125 patients alone have died since they could not get needed medical treatment.Such Palestinian uprising against the Pharaoh will strengthen the case of the Egyptians striking and protesting against the regime. The same regime is starving the Egyptian poor and the Palestinians in Gaza. Such simultaneous Egyptian and Palestinian uprisings will reinforce each other and highlight the degree that the Pharaoh is beholden to USrael's objectives and policies and against his people and the Palestinian people.The Palestinians lost their fear a long time ago and now the Egyptians are losing their fear of their brutal regime. It is important to escalate the confrontation with it and to keep it going. News of the strike of workers in Egypt's largest factory is very encouraging. Reporters speak of running battles between the demonstrators and the Egyptian "security" goons. The protesters are using guerrilla tactics by moving from one street to another and are taking the initiative.The Pharaoh's regime is very worried and it should be. It could be living its last days and these are usually the bloodiest. As I wrote at the time of the Palestinian smashing of the ghetto wall in late January, this reminds me of the last days of the Shah of Iran.Hamas and the Palestinians should join forces with the Egyptians in the streets and do their part by tearing down the wall at Rafah and this time keeping the border open. The Pharaoh has got to go. There is no hope for the Egyptians and the Palestinians as long as he is in power.As the Egyptians say: KEFAYAH!
In retrospect, it is becoming obvious that Hamas made a mistake by agreeing to "negotiations" with the Pharaoh's regime about supposedly reopening the Rafah crossing between Gaza and Egypt. That regime, beholden to USrael, never intended to re-open that crossing. The instructions of the princess of darkness Rice were clear: let the Palestinians in Gaza starve in preparation for Israeli tanks to sweep the Strip to finish off Hamas and to reinstall her toy, Mahmoud Abbas.The Pharaoh was buying time to build a more durable concrete ghetto wall and to get USraeli permission to increase the number of Egyptian troops to seal the ghetto from the Egyptian side. The Pharaoh's regime was also concerned about reaction of the Egyptian street in sympathy with the Palestinian jail breakers. The regime is hugely unpopular inside of Egypt and the last thing it needed was a mass Palestinian uprising busting out of the Gaza ghetto.The Pharaoh's trick worked and Hamas was suckered in. Hamas even worked with the Pharaoh's goons to re-close the Rafah crossing and to prevent the Palestinians from attempting to cross to Egypt. After more than two months of meaningless "negotiations" with the regime about ending the siege and reopening the crossing, the Hamas team has returned from Cairo empty handed. After many false promises of imminent re-opening and other "positive" spin, Hamas is now forced to admit that the "negotiations" were a farce and a trick. The situation inside Gaza now is even worse than it was in late January when the wall fell. More people are dying due to lack of medicine, fuel and food and the supplies have dwindled to virtually nothing.With the Egyptian uprising against the Pharaoh of the past couple of days spreading, this is the time to correct the mistake made earlier by Hamas. This time hundreds of thousands of Palestinians should storm the ghetto wall and this time keep the border open. There will be gun fire from the Egyptian side and some Palestinian legs will get broken as the Pharaoh's foreign minister Abu Alghait threatened. However, the Palestinians are dying a slow agonizing death as is. More than 125 patients alone have died since they could not get needed medical treatment.Such Palestinian uprising against the Pharaoh will strengthen the case of the Egyptians striking and protesting against the regime. The same regime is starving the Egyptian poor and the Palestinians in Gaza. Such simultaneous Egyptian and Palestinian uprisings will reinforce each other and highlight the degree that the Pharaoh is beholden to USrael's objectives and policies and against his people and the Palestinian people.The Palestinians lost their fear a long time ago and now the Egyptians are losing their fear of their brutal regime. It is important to escalate the confrontation with it and to keep it going. News of the strike of workers in Egypt's largest factory is very encouraging. Reporters speak of running battles between the demonstrators and the Egyptian "security" goons. The protesters are using guerrilla tactics by moving from one street to another and are taking the initiative.The Pharaoh's regime is very worried and it should be. It could be living its last days and these are usually the bloodiest. As I wrote at the time of the Palestinian smashing of the ghetto wall in late January, this reminds me of the last days of the Shah of Iran.Hamas and the Palestinians should join forces with the Egyptians in the streets and do their part by tearing down the wall at Rafah and this time keeping the border open. The Pharaoh has got to go. There is no hope for the Egyptians and the Palestinians as long as he is in power.As the Egyptians say: KEFAYAH!
Monday, April 07, 2008
The Three Trillion Dollar War
When the United States invaded Iraq in March 2003, Americans were told Iraqi oil would cover the costs of the war and rebuilding. Defense Secretary Donald Rumsfeld scoffed at estimates of $100 billion.
Nobel Prize-winning economist Joseph Stiglitz of Columbia University and Harvard University professor Linda Bilmes raised a stir in 2006 by estimating the real cost of the war to be $1 trillion. That estimate has been tripled and the title of their new book is "The Three Trillion Dollar War."
Write Stiglitz and Bilmes a question now. They will answer questions for McClatchy readers between April 1 and April 15.
Most Recently Answered QuestionsQuestions 1 - 15 of 33 (Page 1 of 2)
Q: Considering that this Economic Blood Fest was instigated from the Halls & Think Tanks of Ivy League Academia, besides Profit for the authors what is the point of this Intellectual Monday morning quarterbacking? It sure as Hell doesn't matter to all the Dead nor is it going to bring the Instigators to Justice.
Submitted by Clarke Davis from Santa Rosa,Ca. A: We have to make a decision about when and how to leave, and this kind of analysis--which should have been done before we went to war--is essential if we are to make an intelligent decision. We continue to underfund our veterans, and it is important for Americans to know this. It is a national disgrace. Finally, while we may not be able to prevent these kinds of errors in the future, we can reduce the likelihood of their occuring. It is important to understand where we went wrong. We need to learn from our mistakes.
Answered 04/07/08 11:55:57 by Joseph Stiglitz
Q: Where do we go from here?
Submitted by Bob from Portsmouth Va A: In our book, we talk about a framework for exiting. Everyone (or almost everyone) believes we should leave, at some time. The question is only when. We try to put forward a way of thinking about that. If we leave now, there may be chaos, or things might actually get better. (Most Iraqis think things will get better.) If we leave in four years time, theremay be chaos, or things might get better. The questions we need to ask are: If there is chaos, how much less chaos will there be in four years time? If things are better when we leave, how much better will they be in four years time than now? But in either case, is the difference worth the extra money that we will have to spend between now and then--at current rates of expenditure, $12 billion a month up front, perhaps $25 billion in total, is it worth the extra $1.2 trillion or so? If not, we should withdraw as soon as possible. We should remember: staying the course is going to cost more money. The armed forces are stretched. To maintain an effective fighting force, and keep the same number of troops in Iraq, will require monthly spending that is greater than the amounts we are now spending.
Answered 04/07/08 11:53:21 by Joseph Stiglitz
Q: Many National Guardsmen sent to Iraq left behind jobs either left vacant or filled by temporary substitutes who are probably less capable than the missing Guardsmen. Is it possible to estimate the economic cost of the withdrawal of the Guardsman from the civilian labor force?
Submitted by Craig Busse from Califon, NJ A: A standard approach taken by economists is the following: the wage (or more broadly, the total employer's compensatin, which includes benefits, including employer social security contributions) represents the value of their economic contribution (in economics jargon,it measures the value of their marginal product). If a job is left vacant, then this full compensation measures the loss in national output. In our study, we noted this loss, but did not include this number, mainly because we could not get accurate numbers. It is another reason we believe our estimates are conservative.
Answered 04/07/08 11:47:08 by Joseph Stiglitz
Q: How many years will it take for the US to pay down the cost of the war?
Submitted by Mark from Boston, MA A: (See answer to similar question earlier) We will be passing on this debt to the next generation. At this point, there is no foreseeable date at which we will even begin to repay the debt.
Answered 04/06/08 10:23:50 by Joseph Stiglitz
Q: How many 'contractors' are in Iraq and how many have been killed so far?
Submitted by Maddie from Baltimore, MD A: On the first question, see the answer to the previous question. More than a thousand contractors have already been killed. This provides a hint of the important role that contractors have been playing. This is the first war that we have gone so far in privatization. We explain the book why privatization makes no sense--it not only costs more, but can undermine the accomplishment of our mission. Contractors focus on minimzing costs; they do not focus on our broader goals. In the beginning of the war, for instance, it was improtant to win the hearts and minds of the Iraqi's. With 60% unemployment, we had to create jobs. The Contractors brought in Nepalese and other workers because they were cheaper. Unemplloyed young men--with guns--is an explosive mixture, and it exploded.
Answered 04/06/08 10:22:44 by Joseph Stiglitz
Q: How many 'contractors' are in Iraq and how many have been killed so far? Also, how much would it have cost if the contractors were replaced with US military personnel?
Submitted by Maddie from Baltimore, MD A: This is another example of how the US government is trying to keep information away from the American people. There is no complete accoutning of the number of contractors in Iraq. (A full accounting would, of course, have to include contractors in, say, Kuwait servicing trooops in Iraq.And one should probably include those in the U.S. who are helping to administer the contractors in Iraq) There are at least 100,000, probably considerably more, perhaps numbers almost equivalent to the numbers of troops. We estimate that using a contractor roughly doubles the cost.
Answered 04/06/08 10:19:08 by Joseph Stiglitz
Q: Can anyone tell us what is actually happening to the Iraqi oil money.
Submitted by Gary from Tallahassee A: The Iraqi oil money is, I believe, going to the Iraqi government. Some of it is going to maintain what little security they have. It is not going to repay the U.S. Little of it is going to rebuild the country, where infrastructure remains devastated. Electricity and water are still not back to pre-war levels--with devastating consequences for the people.
Answered 04/06/08 10:15:30 by Joseph Stiglitz
Q: If the importance of oil flowing into the industrial nations is worth the cost of a Three trillion dollar "WAR" investment, the benefit must exceed the investment. In dollar value to an average american, what is the amount gained to each of our citizens. Eliminateing politics and right or wrong arguments, was value achieved for the citizens in the short term, or long term. This is a terrible question when first asked, but I must ask it. Status quo of oil use and consumption is to be tested and changed as supplies dwindle, but the investment dollars of "WAR" in the region has made Oil availablity within reach. This is the reason for the Investment, as callous as it sounds, but has it been a profitable investment for the average american.
Submitted by Randall F. Silkey Sr from Victoria, Texas A: The relationship between the war and oil is one of the issues we discuss in our book. Some have argued we went to war to ensure a supply of oil. If that was its objective, it failed: it was an investment with a negative return. We could have increased the supply of oil far more easily simply by expanding (and improving) the oil-for-food program in Iraq. Since the war, the price of oil has increased from $25 a barrel to $100 a barrel. Futures markets had expected the price to remain aroudn $25 a barrel for the forseeable future. they foresaw increases in demand from china and elsewhere; but they anticipated increases in supply, mainly from low cost providers in the middle east. the war changed that equation. Even if the war had gone well, in the 21st century, the winner of the war does not get the "spoils" of owning the consequered coutry's resources. It would have been Iraqi oil; and their citizens would have demanded that they get the full value of their oil. Iraqi exports are just now returning to the pre-war level.
Answered 04/06/08 10:13:04 by Joseph Stiglitz
Q: What effect will the financial turbulence have on the phenomenon of wealth concentration? Will the fat-cat Optimates absorb a disproportionate share of the unwinding, or will they manage to dodge the damage? If the latter, whom should the popluares rise up and slay?
Submitted by Patrick from Fountain Hills, AZ A: Almost everyone, from the top to the bottom, will be affected by the turbulence. The people at the bottom will be particularly hurt--millions of Americans will lose their homes, and with it their life savings. In dollar terms, their losses will be smaller--they have very little wealth compared to those at the top. But in percentage terms, they will lose the most. The government has been bailing out those at the top. To be sure, shareholders in Bear Stearns lost a lot. But they still walked away with more than a billion dollars. And the governmemtn has been left holding considerable risk--without receiving any "insurance premium" in return. Now the Fed has extended its "lender of last resort" facility to investment banks--again without charging them a thing, and without even regulating them adequately. (There is talk of regulating them more in the future, but so far, it is mostly talk.) It is amazing to me that the Bush Administration continues to worry about "moral hazard" in doing something about poor people about to lose their homes, and yet almost ignores moral hazard when it comes to bailing out those at the top. Part of the problem lies in the so-called independent Fed. The Fed has reflected the views of the financial markets. The Fed Governor said, not to worry; if there is a bubble, and it breaks, we can manage it. There was a party, and their friends were enjoying it. He was obviously wrong about their ability to mjanage it. What he didn't say was--if it breaks, taxpayer money would be at risk. It was a heads we win, tails you lose gamble.
Answered 04/06/08 10:08:21 by Joseph Stiglitz
Q: Everyone knows about the Halliburton no bid contracts and how the price of oil per barrel has been escalated by the war in Iraq. Have you estimated the cost to taxpayers for all the "no-bid" costs of the war, not just Haliburton; and how much more Americans have paid for the war in post-invasion gasoline prices?
Submitted by Marc Walls from Oklahoma City, OK A: We have not estimated how much extra Americans have had to pay because of the sole-sourcing no bid contracts, but it clearly has been substantial. These excessive expenditures are, of course, on top of the fact that even with competitive bidding, contractors are expensive--far more expensive for performing the same task than the government (military), with all of its alleged inefficiency. We estimate that hiring a contractor roughly doubles the cost. One of the aspects of "dishonest" accoutning that we report in the book is, on different accounts, the governmetn pays the death and disability insurance--but even though the premia are high, exlcusioins in the insurance policy for deaths and disability due to hostile action mean that the government picks up the tab for the benefits. Even with competitive bidding, some of the contracts are cost plus. So the contractors just pass on any costs to the government. there is no incentive for efficiency--on the contrary, the more they spend, the more they make. Yet, in spite of these perverse incentives (hardly the market incentives that the Bush administration talks about), the numbmer of auditors overseeing these contracts has been reduced. In short, we know that the use of contractors has cost American citizens plenty; it will take a while--probably a careful audit in the next Administratoin--to find out how much. In our book, we do estimate how much the war has cost America in additoinal spending on oil. Oil prices have increased from around $25 a barrel to more than $100 a barrel; these increases in oil prices get translated, of course, into higher gasoline prices. If only $5 of that increase is attributed to the war, then the annual cost to America is $25 billion. Obviously, if more realistic numbers are used, the costs increase proportinately. (If a third of the increase is attributedf to the war, then the annual cost is $125 billion) But the costs to American consumers are even higher. We only look at the extra spending for imported oil. American oil companies have been doing well--at the expense of American consumers.
Answered 04/06/08 09:59:44 by Joseph Stiglitz
Q: If a Democrat is elected and they begin pulling troops out of Iraq, and we finally have only minimal forces deployed there, how long do you estimate it will take us to recover from the costs of the war? How long will it take to pay off the money we borrowed for it?
Submitted by Sue Britton from Casper, WY A: To be frank, I am very pessimistic. The problem is that even before the war we had a deficit--in part caused by tax cuts for upper income Americans that we could not afford. We had developed what economists call a structural deficit--even if the economy were to reach full employment, there would still be a deficit. But now, our economy is going into recession. In addition to the structural deficit, we have a cyclical deficit. Our deficit this year is likely to be an all time record. Making matters worse, we also have an infrastructure deficit, and other problems--most notably in our health care system. All of this costs money. The war has created a huge unfunded entitlement--paying disability compensation and health care costs for our returning veterans. Even if we were to leave tomorrow, we would have bills to pay for decades to come. Eight years of President Bush will have increased our national debt by $3 trillion dollars. If interest rates return to their more normal level of, say, 5%, paying interest on this additoinal debt will cost $150 billion a year. In short, even if we repeal the tax cuts for upper income Americans, I see no prospect of our paying off the money we borrowed for it in the foreseeable future. More likely, these are debts we will pass on to future generations.
Answered 04/06/08 09:49:23 by Joseph Stiglitz
Q: It is my understanding that most, if not all, of the appropriations for funding the Iraq War have been "off book"; i.e., they weren't included in the normal DoD budget. Can you provide a comparison for what has been expended through special appropriations and what has been expended through the normal budgetary process?
Submitted by Bo Alawine from Ocean Springs, MS A: As you say, almost all of the spending has been through emergency appropriations, not subject to the kind of intense scrutiny that ordinary appropriates must undergo. There are two further problems. DoD accounts do not allow us to tell precisely how much of their ordinary expenditures are going towards the war. And their ordinary expenditures have themselves not passed the auditors' scrutiny. there are billions of dollars of spending this is unaccounted for. We know that defense expenditures--beyond the iraq and afghanistan wars--has gone up more than a half trillion dollars cumulatively in the last five years. We know that at least some of this increasaed spending is war related. In our book we estimate that a quarter of it is. We have to pay more, for instance, to recruit soldiers. We have to replace more equipment. Almost surely, our number represents an underestimate.
Answered 04/06/08 09:42:58 by Joseph Stiglitz
Q: We know that military spending in the late 1930's and 1940's helped bring the nation out of the great depression. Why hasn't the current tremendous spending on Iraq had an equivalent effect on our economy? It seems like there's no war-spending bump at all.
Submitted by Thomas Owen from Crescent City A: Unlike WWI, the Iraq was has had a net negative effect on the economy. This is for several reasons. First, the money that we spend every month goes largely to operational costs (fuel, laundry, cooking, transportation, repairs ) much of which is performed by sub-contractors from the Phillipines, Nepal and other countries. So in effect, the dollars spent do not have any positive return for the US economy. Second, because we have borrowed all the money to fight the war, largely from abroad, we have added to the deficit and to the national debt, which means we have to pay more interest and adds a burden onto the economy. Third, the war has contributed to the increase in oil prices, which of course take money out of the hands of consumers, and lower business margins, and transfer it to the oil producers.
Answered 04/04/08 12:59:08 by Linda Bilmes
Q: who should get the blame for this?
Submitted by jim franck from gleneden beach or A: There are three major mistakes that have been made. First, the decision to invade Iraq in the first place. The Administration bears the responsibility for that decision. Second is the way we have chosen to pay for the war -- entirely by borrowing the money in "emergency" supplemental approproiations, that permit little oversight, and choosing not to pay by cutting spending, raising taxes, selling war bonds, etc. For this, we are probably all to blame -- the Congress and the Administration has done it together, and we the public have not spoken out sufficiently strongly in protest. Third, there is the manner in which the war has been waged, including the strain on our troops, the use of involuntary extensions such as "stop-loss", the appalling treatment of many of our returning veterans, the failure to provide adequate body armor and MRAP vehicles for troops, the over-reliance on contractors, National Guards and reservists, the scanty Congressional oversight on how the war is being waged. There is plenty of blame to go around for this....
Answered 04/04/08 12:54:18 by Linda Bilmes
Q: How does the United States eventually pay off the debt, and at the same time maintain world leadership with a reasonable standare of living in the future?
Submitted by Dick Golob from Sunnyside, Wa 98944 A: This is a good question. Recently we have not been paying off our debt --simply borrowing more to pay off the interest. This is the equivalent of taking out a second credit card to pay off the minimum payment on the first one, and so forth. People feel that they have enjoyed a "tax cut" in recent years, but really we have just taken out a loan that we've been spending. Personally I believe that if our leaders had levelled with the public at the outset -- and explained that we had a choice of a "tax cut" paid for by borrowing money from China or a lower deficit and no "tax cut" -- I think the outcome would have been different. At this juncture, we will be forced to eventually raise taxes, fees, cut spending, restructure the defense budget and reduce entitlement benefits. Our children will bear much of the burden.
Answered 04/04/08 12:47:31 by Linda Bilmes
Nobel Prize-winning economist Joseph Stiglitz of Columbia University and Harvard University professor Linda Bilmes raised a stir in 2006 by estimating the real cost of the war to be $1 trillion. That estimate has been tripled and the title of their new book is "The Three Trillion Dollar War."
Write Stiglitz and Bilmes a question now. They will answer questions for McClatchy readers between April 1 and April 15.
Most Recently Answered QuestionsQuestions 1 - 15 of 33 (Page 1 of 2)
Q: Considering that this Economic Blood Fest was instigated from the Halls & Think Tanks of Ivy League Academia, besides Profit for the authors what is the point of this Intellectual Monday morning quarterbacking? It sure as Hell doesn't matter to all the Dead nor is it going to bring the Instigators to Justice.
Submitted by Clarke Davis from Santa Rosa,Ca. A: We have to make a decision about when and how to leave, and this kind of analysis--which should have been done before we went to war--is essential if we are to make an intelligent decision. We continue to underfund our veterans, and it is important for Americans to know this. It is a national disgrace. Finally, while we may not be able to prevent these kinds of errors in the future, we can reduce the likelihood of their occuring. It is important to understand where we went wrong. We need to learn from our mistakes.
Answered 04/07/08 11:55:57 by Joseph Stiglitz
Q: Where do we go from here?
Submitted by Bob from Portsmouth Va A: In our book, we talk about a framework for exiting. Everyone (or almost everyone) believes we should leave, at some time. The question is only when. We try to put forward a way of thinking about that. If we leave now, there may be chaos, or things might actually get better. (Most Iraqis think things will get better.) If we leave in four years time, theremay be chaos, or things might get better. The questions we need to ask are: If there is chaos, how much less chaos will there be in four years time? If things are better when we leave, how much better will they be in four years time than now? But in either case, is the difference worth the extra money that we will have to spend between now and then--at current rates of expenditure, $12 billion a month up front, perhaps $25 billion in total, is it worth the extra $1.2 trillion or so? If not, we should withdraw as soon as possible. We should remember: staying the course is going to cost more money. The armed forces are stretched. To maintain an effective fighting force, and keep the same number of troops in Iraq, will require monthly spending that is greater than the amounts we are now spending.
Answered 04/07/08 11:53:21 by Joseph Stiglitz
Q: Many National Guardsmen sent to Iraq left behind jobs either left vacant or filled by temporary substitutes who are probably less capable than the missing Guardsmen. Is it possible to estimate the economic cost of the withdrawal of the Guardsman from the civilian labor force?
Submitted by Craig Busse from Califon, NJ A: A standard approach taken by economists is the following: the wage (or more broadly, the total employer's compensatin, which includes benefits, including employer social security contributions) represents the value of their economic contribution (in economics jargon,it measures the value of their marginal product). If a job is left vacant, then this full compensation measures the loss in national output. In our study, we noted this loss, but did not include this number, mainly because we could not get accurate numbers. It is another reason we believe our estimates are conservative.
Answered 04/07/08 11:47:08 by Joseph Stiglitz
Q: How many years will it take for the US to pay down the cost of the war?
Submitted by Mark from Boston, MA A: (See answer to similar question earlier) We will be passing on this debt to the next generation. At this point, there is no foreseeable date at which we will even begin to repay the debt.
Answered 04/06/08 10:23:50 by Joseph Stiglitz
Q: How many 'contractors' are in Iraq and how many have been killed so far?
Submitted by Maddie from Baltimore, MD A: On the first question, see the answer to the previous question. More than a thousand contractors have already been killed. This provides a hint of the important role that contractors have been playing. This is the first war that we have gone so far in privatization. We explain the book why privatization makes no sense--it not only costs more, but can undermine the accomplishment of our mission. Contractors focus on minimzing costs; they do not focus on our broader goals. In the beginning of the war, for instance, it was improtant to win the hearts and minds of the Iraqi's. With 60% unemployment, we had to create jobs. The Contractors brought in Nepalese and other workers because they were cheaper. Unemplloyed young men--with guns--is an explosive mixture, and it exploded.
Answered 04/06/08 10:22:44 by Joseph Stiglitz
Q: How many 'contractors' are in Iraq and how many have been killed so far? Also, how much would it have cost if the contractors were replaced with US military personnel?
Submitted by Maddie from Baltimore, MD A: This is another example of how the US government is trying to keep information away from the American people. There is no complete accoutning of the number of contractors in Iraq. (A full accounting would, of course, have to include contractors in, say, Kuwait servicing trooops in Iraq.And one should probably include those in the U.S. who are helping to administer the contractors in Iraq) There are at least 100,000, probably considerably more, perhaps numbers almost equivalent to the numbers of troops. We estimate that using a contractor roughly doubles the cost.
Answered 04/06/08 10:19:08 by Joseph Stiglitz
Q: Can anyone tell us what is actually happening to the Iraqi oil money.
Submitted by Gary from Tallahassee A: The Iraqi oil money is, I believe, going to the Iraqi government. Some of it is going to maintain what little security they have. It is not going to repay the U.S. Little of it is going to rebuild the country, where infrastructure remains devastated. Electricity and water are still not back to pre-war levels--with devastating consequences for the people.
Answered 04/06/08 10:15:30 by Joseph Stiglitz
Q: If the importance of oil flowing into the industrial nations is worth the cost of a Three trillion dollar "WAR" investment, the benefit must exceed the investment. In dollar value to an average american, what is the amount gained to each of our citizens. Eliminateing politics and right or wrong arguments, was value achieved for the citizens in the short term, or long term. This is a terrible question when first asked, but I must ask it. Status quo of oil use and consumption is to be tested and changed as supplies dwindle, but the investment dollars of "WAR" in the region has made Oil availablity within reach. This is the reason for the Investment, as callous as it sounds, but has it been a profitable investment for the average american.
Submitted by Randall F. Silkey Sr from Victoria, Texas A: The relationship between the war and oil is one of the issues we discuss in our book. Some have argued we went to war to ensure a supply of oil. If that was its objective, it failed: it was an investment with a negative return. We could have increased the supply of oil far more easily simply by expanding (and improving) the oil-for-food program in Iraq. Since the war, the price of oil has increased from $25 a barrel to $100 a barrel. Futures markets had expected the price to remain aroudn $25 a barrel for the forseeable future. they foresaw increases in demand from china and elsewhere; but they anticipated increases in supply, mainly from low cost providers in the middle east. the war changed that equation. Even if the war had gone well, in the 21st century, the winner of the war does not get the "spoils" of owning the consequered coutry's resources. It would have been Iraqi oil; and their citizens would have demanded that they get the full value of their oil. Iraqi exports are just now returning to the pre-war level.
Answered 04/06/08 10:13:04 by Joseph Stiglitz
Q: What effect will the financial turbulence have on the phenomenon of wealth concentration? Will the fat-cat Optimates absorb a disproportionate share of the unwinding, or will they manage to dodge the damage? If the latter, whom should the popluares rise up and slay?
Submitted by Patrick from Fountain Hills, AZ A: Almost everyone, from the top to the bottom, will be affected by the turbulence. The people at the bottom will be particularly hurt--millions of Americans will lose their homes, and with it their life savings. In dollar terms, their losses will be smaller--they have very little wealth compared to those at the top. But in percentage terms, they will lose the most. The government has been bailing out those at the top. To be sure, shareholders in Bear Stearns lost a lot. But they still walked away with more than a billion dollars. And the governmemtn has been left holding considerable risk--without receiving any "insurance premium" in return. Now the Fed has extended its "lender of last resort" facility to investment banks--again without charging them a thing, and without even regulating them adequately. (There is talk of regulating them more in the future, but so far, it is mostly talk.) It is amazing to me that the Bush Administration continues to worry about "moral hazard" in doing something about poor people about to lose their homes, and yet almost ignores moral hazard when it comes to bailing out those at the top. Part of the problem lies in the so-called independent Fed. The Fed has reflected the views of the financial markets. The Fed Governor said, not to worry; if there is a bubble, and it breaks, we can manage it. There was a party, and their friends were enjoying it. He was obviously wrong about their ability to mjanage it. What he didn't say was--if it breaks, taxpayer money would be at risk. It was a heads we win, tails you lose gamble.
Answered 04/06/08 10:08:21 by Joseph Stiglitz
Q: Everyone knows about the Halliburton no bid contracts and how the price of oil per barrel has been escalated by the war in Iraq. Have you estimated the cost to taxpayers for all the "no-bid" costs of the war, not just Haliburton; and how much more Americans have paid for the war in post-invasion gasoline prices?
Submitted by Marc Walls from Oklahoma City, OK A: We have not estimated how much extra Americans have had to pay because of the sole-sourcing no bid contracts, but it clearly has been substantial. These excessive expenditures are, of course, on top of the fact that even with competitive bidding, contractors are expensive--far more expensive for performing the same task than the government (military), with all of its alleged inefficiency. We estimate that hiring a contractor roughly doubles the cost. One of the aspects of "dishonest" accoutning that we report in the book is, on different accounts, the governmetn pays the death and disability insurance--but even though the premia are high, exlcusioins in the insurance policy for deaths and disability due to hostile action mean that the government picks up the tab for the benefits. Even with competitive bidding, some of the contracts are cost plus. So the contractors just pass on any costs to the government. there is no incentive for efficiency--on the contrary, the more they spend, the more they make. Yet, in spite of these perverse incentives (hardly the market incentives that the Bush administration talks about), the numbmer of auditors overseeing these contracts has been reduced. In short, we know that the use of contractors has cost American citizens plenty; it will take a while--probably a careful audit in the next Administratoin--to find out how much. In our book, we do estimate how much the war has cost America in additoinal spending on oil. Oil prices have increased from around $25 a barrel to more than $100 a barrel; these increases in oil prices get translated, of course, into higher gasoline prices. If only $5 of that increase is attributed to the war, then the annual cost to America is $25 billion. Obviously, if more realistic numbers are used, the costs increase proportinately. (If a third of the increase is attributedf to the war, then the annual cost is $125 billion) But the costs to American consumers are even higher. We only look at the extra spending for imported oil. American oil companies have been doing well--at the expense of American consumers.
Answered 04/06/08 09:59:44 by Joseph Stiglitz
Q: If a Democrat is elected and they begin pulling troops out of Iraq, and we finally have only minimal forces deployed there, how long do you estimate it will take us to recover from the costs of the war? How long will it take to pay off the money we borrowed for it?
Submitted by Sue Britton from Casper, WY A: To be frank, I am very pessimistic. The problem is that even before the war we had a deficit--in part caused by tax cuts for upper income Americans that we could not afford. We had developed what economists call a structural deficit--even if the economy were to reach full employment, there would still be a deficit. But now, our economy is going into recession. In addition to the structural deficit, we have a cyclical deficit. Our deficit this year is likely to be an all time record. Making matters worse, we also have an infrastructure deficit, and other problems--most notably in our health care system. All of this costs money. The war has created a huge unfunded entitlement--paying disability compensation and health care costs for our returning veterans. Even if we were to leave tomorrow, we would have bills to pay for decades to come. Eight years of President Bush will have increased our national debt by $3 trillion dollars. If interest rates return to their more normal level of, say, 5%, paying interest on this additoinal debt will cost $150 billion a year. In short, even if we repeal the tax cuts for upper income Americans, I see no prospect of our paying off the money we borrowed for it in the foreseeable future. More likely, these are debts we will pass on to future generations.
Answered 04/06/08 09:49:23 by Joseph Stiglitz
Q: It is my understanding that most, if not all, of the appropriations for funding the Iraq War have been "off book"; i.e., they weren't included in the normal DoD budget. Can you provide a comparison for what has been expended through special appropriations and what has been expended through the normal budgetary process?
Submitted by Bo Alawine from Ocean Springs, MS A: As you say, almost all of the spending has been through emergency appropriations, not subject to the kind of intense scrutiny that ordinary appropriates must undergo. There are two further problems. DoD accounts do not allow us to tell precisely how much of their ordinary expenditures are going towards the war. And their ordinary expenditures have themselves not passed the auditors' scrutiny. there are billions of dollars of spending this is unaccounted for. We know that defense expenditures--beyond the iraq and afghanistan wars--has gone up more than a half trillion dollars cumulatively in the last five years. We know that at least some of this increasaed spending is war related. In our book we estimate that a quarter of it is. We have to pay more, for instance, to recruit soldiers. We have to replace more equipment. Almost surely, our number represents an underestimate.
Answered 04/06/08 09:42:58 by Joseph Stiglitz
Q: We know that military spending in the late 1930's and 1940's helped bring the nation out of the great depression. Why hasn't the current tremendous spending on Iraq had an equivalent effect on our economy? It seems like there's no war-spending bump at all.
Submitted by Thomas Owen from Crescent City A: Unlike WWI, the Iraq was has had a net negative effect on the economy. This is for several reasons. First, the money that we spend every month goes largely to operational costs (fuel, laundry, cooking, transportation, repairs ) much of which is performed by sub-contractors from the Phillipines, Nepal and other countries. So in effect, the dollars spent do not have any positive return for the US economy. Second, because we have borrowed all the money to fight the war, largely from abroad, we have added to the deficit and to the national debt, which means we have to pay more interest and adds a burden onto the economy. Third, the war has contributed to the increase in oil prices, which of course take money out of the hands of consumers, and lower business margins, and transfer it to the oil producers.
Answered 04/04/08 12:59:08 by Linda Bilmes
Q: who should get the blame for this?
Submitted by jim franck from gleneden beach or A: There are three major mistakes that have been made. First, the decision to invade Iraq in the first place. The Administration bears the responsibility for that decision. Second is the way we have chosen to pay for the war -- entirely by borrowing the money in "emergency" supplemental approproiations, that permit little oversight, and choosing not to pay by cutting spending, raising taxes, selling war bonds, etc. For this, we are probably all to blame -- the Congress and the Administration has done it together, and we the public have not spoken out sufficiently strongly in protest. Third, there is the manner in which the war has been waged, including the strain on our troops, the use of involuntary extensions such as "stop-loss", the appalling treatment of many of our returning veterans, the failure to provide adequate body armor and MRAP vehicles for troops, the over-reliance on contractors, National Guards and reservists, the scanty Congressional oversight on how the war is being waged. There is plenty of blame to go around for this....
Answered 04/04/08 12:54:18 by Linda Bilmes
Q: How does the United States eventually pay off the debt, and at the same time maintain world leadership with a reasonable standare of living in the future?
Submitted by Dick Golob from Sunnyside, Wa 98944 A: This is a good question. Recently we have not been paying off our debt --simply borrowing more to pay off the interest. This is the equivalent of taking out a second credit card to pay off the minimum payment on the first one, and so forth. People feel that they have enjoyed a "tax cut" in recent years, but really we have just taken out a loan that we've been spending. Personally I believe that if our leaders had levelled with the public at the outset -- and explained that we had a choice of a "tax cut" paid for by borrowing money from China or a lower deficit and no "tax cut" -- I think the outcome would have been different. At this juncture, we will be forced to eventually raise taxes, fees, cut spending, restructure the defense budget and reduce entitlement benefits. Our children will bear much of the burden.
Answered 04/04/08 12:47:31 by Linda Bilmes
Sunday, April 06, 2008
81% in Poll Say Nation Is Headed on Wrong Track
Americans are more dissatisfied with the country’s direction than at any time since the New York Times/CBS News poll began asking about the subject in the early 1990s, according to the latest poll.
In the poll, 81 percent of respondents said they believed “things have pretty seriously gotten off on the wrong track,” up from 69 percent a year ago and 35 percent in early 2002.
Although the public mood has been darkening since the early days of the war in Iraq, it has taken a new turn for the worse in the last few months, as the economy has seemed to slip into recession. There is now nearly a national consensus that the country faces significant problems.
A majority of nearly every demographic and political group — Democrats and Republicans, men and women, residents of cities and rural areas, college graduates and those who finished only high school — say the United States is headed in the wrong direction. Seventy-eight percent of respondents said the country was worse off than five years ago; just 4 percent said it was better off.
The dissatisfaction is especially striking because public opinion usually hits its low point only in the months and years after an economic downturn, not at the beginning of one. Today, however, Americans report being deeply worried about the country even though many say their own personal finances are still in fairly good shape.
Only 21 percent of respondents said the overall economy was in good condition, the lowest such number since late 1992, when the recession that began in the summer of 1990 had already been over for more than a year. In the latest poll, two in three people said they believed the economy was in recession today.
The unhappiness presents clear risks for Republicans in this year’s elections, given the continued unpopularity of President Bush. Twenty-eight percent of respondents said they approved of the job he was doing, a number that has barely changed since last summer. But Democrats, who have controlled the House and Senate since last year, also face the risk that unhappy voters will punish Congressional incumbents.
Mr. Bush and leaders of both parties on Capitol Hill have moved in recent weeks to react to the economic slowdown, first by passing a stimulus bill that will send checks of up to $1,200 to many couples this spring. They are now negotiating over proposals to overhaul financial regulations, blunt the effects of a likely wave of home foreclosures and otherwise respond to the real estate slump and related crisis on Wall Street.
The poll found that Americans blame government officials for the crisis more than banks or home buyers and other borrowers. Forty percent of respondents said regulators were mostly to blame, while 28 percent named lenders and 14 percent named borrowers.
In assessing possible responses to the mortgage crisis, Americans displayed a populist streak, favoring help for individuals but not for financial institutions. A clear majority said they did not want the government to lend a hand to banks, even if the measures would help limit the depth of a recession.
“What I learned from economics is that the market is not always going to be a happy place,” Sandi Heller, who works at the University of Colorado and is also studying for a master’s degree in business there, said in a follow-up interview. If the government steps in to help out, said Ms. Heller, 43, it could encourage banks to take more foolish risks.
“There are a million and one better ways for the government to spend that money,” she said.
Respondents were considerably more open to government help for home owners at risk of foreclosure. Fifty-three percent said they believed the government should help those whose interest rates were rising, while 41 percent said they opposed such a move.
The nationwide telephone survey of 1,368 adults was conducted from March 28 to April 2. The margin of sampling error was plus or minus 3 percentage points.
When the presidential campaign began last year, the war in Iraq and terrorism easily topped Americans’ list of concerns. Almost 30 percent of people in a December poll said that one of those issues was the country’s most pressing problem. About half as many named the economy or jobs.
But the issues have switched places in just a few months’ time. In the latest poll, 17 percent named terrorism or the war, while 37 percent named the economy or the job market. When looking at the current state of their own finances, Americans remain relatively sanguine. More than 70 percent said their financial situation was fairly good or very good, a number that has dropped only modestly since 2006.
Yet many say they are merely managing to stay in place, rather than get ahead. This view is consistent with the income statistics of the past five years, which suggest that median household income has still not returned to the inflation-adjusted peak it hit in 1999. Since the Census Bureau began keeping records in the 1960s, there has never been an extended economic expansion that ended without setting a new record for household income.
Economists cite a variety of factors for the sluggish income growth, including technology and globalization, and it clearly seems to have made Americans anxious about the future. Fewer than half of parents — 46 percent — said they expected their children to enjoy a better standard of living than they themselves do, down from 56 percent in 2005.
Respondents were more pessimistic when asked in general terms about the next generation, with only a third saying it would live better than people do today. (Polls usually find people more upbeat about their personal situation than about the state of society, but the gap is now larger than usual.)
Charles Parrish, a 56-year-old retired fireman in Evans, Ga., who now works a maintenance job for the local school system, said he was worried the country was not preparing children for the high-technology economy of the future. Instead, the government passed a stimulus package that simply sends checks to taxpayers and worsens the deficit in the process.
“Who’s going to pay back the money?” Mr. Parrish, an independent, said. “We are. They are giving me money, except I’m going to have to pay interest on it.”
Democrats have asserted recently that the lack of wage growth has made people more open to government intervention in the economy than in the past, and the poll found mixed results on this score.
Fifty-eight percent of respondents said they would support raising taxes on households making more than $250,000 to pay for tax cuts or government programs for people making less than that amount. Only 38 percent called it a bad idea. Both Senator Hillary Rodham Clinton and Senator Barack Obama, the Democratic presidential candidates, have made proposals along these lines.
More broadly, 43 percent of those surveyed said they would prefer a larger government that provided more services, which is tied for the highest such number since The Times and CBS News began asking the question in 1991. But an identical 43 percent said they wanted a smaller government that provided fewer services.
And although both Mrs. Clinton and Mr. Obama have blamed trade with other countries for some of the economy’s problems, Americans say they continue to favor trade — if not quite as strongly as in the past. Fifty-eight percent called it good for the economy; 32 percent called it bad, up from 17 percent in 1996.
At the same time, 68 percent said they favored trade restrictions to protect domestic industries, instead of allowing unrestrained trade. In early 1996, 55 percent favored such restrictions.
Dalia Sussman and Marina Stefan contributed reporting.
In the poll, 81 percent of respondents said they believed “things have pretty seriously gotten off on the wrong track,” up from 69 percent a year ago and 35 percent in early 2002.
Although the public mood has been darkening since the early days of the war in Iraq, it has taken a new turn for the worse in the last few months, as the economy has seemed to slip into recession. There is now nearly a national consensus that the country faces significant problems.
A majority of nearly every demographic and political group — Democrats and Republicans, men and women, residents of cities and rural areas, college graduates and those who finished only high school — say the United States is headed in the wrong direction. Seventy-eight percent of respondents said the country was worse off than five years ago; just 4 percent said it was better off.
The dissatisfaction is especially striking because public opinion usually hits its low point only in the months and years after an economic downturn, not at the beginning of one. Today, however, Americans report being deeply worried about the country even though many say their own personal finances are still in fairly good shape.
Only 21 percent of respondents said the overall economy was in good condition, the lowest such number since late 1992, when the recession that began in the summer of 1990 had already been over for more than a year. In the latest poll, two in three people said they believed the economy was in recession today.
The unhappiness presents clear risks for Republicans in this year’s elections, given the continued unpopularity of President Bush. Twenty-eight percent of respondents said they approved of the job he was doing, a number that has barely changed since last summer. But Democrats, who have controlled the House and Senate since last year, also face the risk that unhappy voters will punish Congressional incumbents.
Mr. Bush and leaders of both parties on Capitol Hill have moved in recent weeks to react to the economic slowdown, first by passing a stimulus bill that will send checks of up to $1,200 to many couples this spring. They are now negotiating over proposals to overhaul financial regulations, blunt the effects of a likely wave of home foreclosures and otherwise respond to the real estate slump and related crisis on Wall Street.
The poll found that Americans blame government officials for the crisis more than banks or home buyers and other borrowers. Forty percent of respondents said regulators were mostly to blame, while 28 percent named lenders and 14 percent named borrowers.
In assessing possible responses to the mortgage crisis, Americans displayed a populist streak, favoring help for individuals but not for financial institutions. A clear majority said they did not want the government to lend a hand to banks, even if the measures would help limit the depth of a recession.
“What I learned from economics is that the market is not always going to be a happy place,” Sandi Heller, who works at the University of Colorado and is also studying for a master’s degree in business there, said in a follow-up interview. If the government steps in to help out, said Ms. Heller, 43, it could encourage banks to take more foolish risks.
“There are a million and one better ways for the government to spend that money,” she said.
Respondents were considerably more open to government help for home owners at risk of foreclosure. Fifty-three percent said they believed the government should help those whose interest rates were rising, while 41 percent said they opposed such a move.
The nationwide telephone survey of 1,368 adults was conducted from March 28 to April 2. The margin of sampling error was plus or minus 3 percentage points.
When the presidential campaign began last year, the war in Iraq and terrorism easily topped Americans’ list of concerns. Almost 30 percent of people in a December poll said that one of those issues was the country’s most pressing problem. About half as many named the economy or jobs.
But the issues have switched places in just a few months’ time. In the latest poll, 17 percent named terrorism or the war, while 37 percent named the economy or the job market. When looking at the current state of their own finances, Americans remain relatively sanguine. More than 70 percent said their financial situation was fairly good or very good, a number that has dropped only modestly since 2006.
Yet many say they are merely managing to stay in place, rather than get ahead. This view is consistent with the income statistics of the past five years, which suggest that median household income has still not returned to the inflation-adjusted peak it hit in 1999. Since the Census Bureau began keeping records in the 1960s, there has never been an extended economic expansion that ended without setting a new record for household income.
Economists cite a variety of factors for the sluggish income growth, including technology and globalization, and it clearly seems to have made Americans anxious about the future. Fewer than half of parents — 46 percent — said they expected their children to enjoy a better standard of living than they themselves do, down from 56 percent in 2005.
Respondents were more pessimistic when asked in general terms about the next generation, with only a third saying it would live better than people do today. (Polls usually find people more upbeat about their personal situation than about the state of society, but the gap is now larger than usual.)
Charles Parrish, a 56-year-old retired fireman in Evans, Ga., who now works a maintenance job for the local school system, said he was worried the country was not preparing children for the high-technology economy of the future. Instead, the government passed a stimulus package that simply sends checks to taxpayers and worsens the deficit in the process.
“Who’s going to pay back the money?” Mr. Parrish, an independent, said. “We are. They are giving me money, except I’m going to have to pay interest on it.”
Democrats have asserted recently that the lack of wage growth has made people more open to government intervention in the economy than in the past, and the poll found mixed results on this score.
Fifty-eight percent of respondents said they would support raising taxes on households making more than $250,000 to pay for tax cuts or government programs for people making less than that amount. Only 38 percent called it a bad idea. Both Senator Hillary Rodham Clinton and Senator Barack Obama, the Democratic presidential candidates, have made proposals along these lines.
More broadly, 43 percent of those surveyed said they would prefer a larger government that provided more services, which is tied for the highest such number since The Times and CBS News began asking the question in 1991. But an identical 43 percent said they wanted a smaller government that provided fewer services.
And although both Mrs. Clinton and Mr. Obama have blamed trade with other countries for some of the economy’s problems, Americans say they continue to favor trade — if not quite as strongly as in the past. Fifty-eight percent called it good for the economy; 32 percent called it bad, up from 17 percent in 1996.
At the same time, 68 percent said they favored trade restrictions to protect domestic industries, instead of allowing unrestrained trade. In early 1996, 55 percent favored such restrictions.
Dalia Sussman and Marina Stefan contributed reporting.
Thursday, April 03, 2008
Slap Ya Mama!
The best seasoning sauce from the whole US that comes from Louisiana. In Houston people eat their crawfish (the national plate from the bayou city) with this sauce, and the the name was rather "funny" for not mentioning it.
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