Colonization in the 21st Century

A new way is emerging for banksters (the international variety in this case) to use debt as a weapon, even if it's low-class debt they purchased for pennies on the dollar. Portside Moderator, one of my new favorite sources of news and opinion, has this article about Argentina's bold defiance of the vulture capitalists trying to liquidate their country.

How to save the economy

I predicted way back in 2008 that the recession soon to follow what was then just a "credit crisis" would last 15 years. Everybody said I was crazy. Now when I remind them, they just tell me to shut up. I was going to indulge my inner economics genius and post a blog about how and why this would occur, but of course, my inner trailer trash layabout kept me from doing it. And then I got laid off (American) or made redundant (British), and my life became so complex I didn't have the energy to even consider it. In the last couple of weeks, like a dam breaking but in reverse, my life has got a lot simpler. I now know (more or less) what I am going to do and when. So to the blog... But wait! I am not going to do the 15-year recession blog (now only 13 years of it left, of course.) The time for that has passed. The moving finger writes and having writ, moves on. Instead...
I didn't think Paul Krugman could ever become more of a hero to me than he already was. But he has. He has a cunning plan to save the US economy, and of course, it's based a bit more on history than on pure economics. If you have closely studied the 1929 stock market crash and ensuing 10-year depression, you will know that it was more due to an outbreak of war in Europe than to government or Fed policies that America began to be productive again around 1939-40. And you will know that there have been quite a few vague historical echoes in our current fiasco as well. So Krugman's idea is that the government should give up on economy-tittivating, which they are frankly no good at anyway, and fake an alien invasion.

Blogkeeping - my holiday

This is definitely the longest I have gone without blogging. Also the longest I have gone without a holiday. The last time I was abroad was Thanksgiving 2007. The only trip I took in all of 2008 was a one-day trip to Portmeiron, not even staying overnight. I am determined not to let 2009 go by the same way. I just got back Friday evening from a six-day trip to "the North" (where we do what we want!) I have reviewed and journalled the trip in more detail at Deborama's Kitchen, so check it out there.
Part of the reason I didn't travel is that last year everyone in my far-flung family was in a state of flux. My older younger sister and her husband, one at a time, have temporarily abandoned the family homestead in Gulfport and set up house in Kansas. This has left my aged Ps behind in a little duplex bungalow they built mainly for them. So now my younger younger sister, an academic in Hattiesburg and her husband, a realtor, are buying a second home in Hattiesburg and moving the aged Ps there. My daughter has split with her ex-partner, father of grand-daughter Savannah. My son is still with his partner, who graduated last year from her PG Architecture course and got a job in her field - just as the property market crashed. My son's company was sold and he was offered a less attractive job than he had, but of course he's going to take it for the stability. But no benefits, no holiday, and the stability is not real stability, as nothing is these days. Both my kids have two extra sidelines for income: Aimee is a web designer for her main job, and also teaches web design and is a photographer. Carey works for an online game company, and does painting and web design free-lancing. I am so proud that I raised two smart, hard-working, creative and above all resilient kids. And like all parents and grand-parents, I pray things don't get too much worse before they get better.
I have been meaning to do a blog on here called "The Fifteen Year Depression of 2008 - 2023." I would say keep an eye out for it, but it may not happen. (The blog that is; I am pretty sure about the depression.)

Europe and America - together again

This article from the Economist analyses the prospects for renewing the Transatlantic Alliance - before it's too late.

Yet in the longer run the chances of better transatlantic co-operation may be greater than they seem at first sight. The reason is simple. For both Europe and America the long-term outlook is quite bleak. Global acceptance of American leadership has diminished both because of the Iraq war (and Guantánamo) and because of the rise of emerging powers with different ideas about how to order the world, some of which carry a whiff of 19th century great-power rivalries. Today’s Europe has little military clout, and is in demographic and (relative) economic decline.

A lot of articles on the economy and on the new administration coming to the US in January 2009 all take as a given that the power of the US, and indeed of "the west," is definitely on the wane. Some put the high-water mark back as far as 1948, although I would disagree with that. I think 1989 has at least as strong a claim. But there is no argument at all that the eight years of the Bush administration hastened the end for America, and a surprising number of pundits agree with me in pointing to Hurricane Katrina as the smoking gun that proved it to be so.

And so it goes

It's Remembrance Sunday here in Great Britain. A day for looking at the past, and yet all the poppy-bedecked talking heads on Andrew Marr's show were pointing more toward the future, even when they were referring to the theme of Remembrance Sunday; that's how it is when you perch on a cusp of history, on the Great Divide as it were, where the rivers change directions.
Last night, I received another group email from my old DSA comrade Dan F. in St. Paul. I read every word, and it made my blood run a little cold, providing a bracing counterpoint to the overwhelming waves of optimism of the past week. (I must confess, I still leak a few tears of joy and disbelief every time someone says "President-elect Obama" on the TV or radio.) The e-mail had the entire text of this Monthly Review article by Immanuel Wallerstein, "The Depression : A Long-term View". It made me a bit dizzy as well, an effect I last remember for certain that came from reading a dystopian novel by Samuel R Delaney.
Remembrance Sunday is about honouring all the dead of the Great War (World War I to modernists), the dead and wounded of all the other wars in between, the survivors and currently serving Forces men and women, in more or less that order. DH and I observed the occasion by watching last night an excellent film of a Pat Barker novel of the Great War, Regeneration. (Every year, I also give a few pounds the Poppy Appeal and then promptly lose my poppy. It's those stupid straight pins. I have a great suggestion for bringing the past into the present a little better and instead of flogging paper poppies with a straight pin, feature optional sticky-back glossy poppies that you can press onto your coat or shirt without making a hole. Just a thought.)

Sub-prime nation

I have had this great blog post about the economy running around in my head. I have the left view, the right view and correct view (maybe). I have how we got here and where we may be headed and what to do about it. But somehow, with reading this cacophony of voices, I am unable or unwilling to add my own. So all I can do is share.

• Madeleine Bunting of the Guardian has a stunning critique of the "free market" myths, beliefs, and orthodoxies that were in a great part responsible for our current woes.
• John Cochrane, an economist of the Chicago school, is probably a "believer" and he has the traditional conservative case against the (original) US bailout plan (now largely superseded by events - was it really only a week ago?) but also the most succinct and understandable description of what the mortgage crisis is really about.
• Freakonomics has loads of good stuff; I especially liked Save or Splurge? by Daniel Hamermesh, because of the little vignette about his marriage. (DH and I have lost over a third - a third! - of our retirement fund.)
• Recently I joined (under my "work" persona) a website community for IT and banking industry professionals that has an excellent news feed, making me overwhelmed with cluefulness. It's called Finextra and some of the more energetic (than me) members have blogs.
• Back at the Guardian, Gary Younge, a resident USA-expert, links the economic meltdown back to the people and power, and the election, of course.
• Update: stop press! I just found this, which has got everything, with large type titles. No really, go read it right now, it's brilliant.
  

Prominent left-wingers' views of the financial meltdown

What? We still can't say the word "depression"? How about "recession", can we at least call it that? Are we all Keynesians now?
The Guardian has a nice selection of comments and insights into the global financial crisis, coming out on the same day that Lloyd's TSB is in talks to buy out Halifax-BOS (both major UK banks and the result of earlier mega-mergers, but in more optimistic times.) But rather than being the thoughts of pundits and economists, these views are from philosophers, artists, socialists and peace activists.
Is capitalism done for? Is it even in trouble? Most of the thinkers say no. They are not so positive about the chances of the nemesis known as New Labour, however. Many of them bemoan the undeniable fact that the left does not have an inkling of a reform plan. But still, the analyses are mostly quite spot-on.

Ken Livingstone (former mayor of London) : As a system for the distribution and exchange of goods, you can't beat the market. But the mistake a lot of politicians have made is to think that because the market was good at that, it could be good at everything: it could train workers, create infrastructure, protect the environment, regulate itself. Quite obviously, it can't.

Max Keiser (former broker) : This is not a blip. It's extremely significant. We will see a shift in power away from the US, and towards the developing world - to countries such as Brazil and the Gulf states that have commodities to sell, and to China, where the savings ratio is high. We are going to see a new world order. America as a driver of the global economy is finished.

Shelia Rowbotham (professor of gender and labour history) : The Labour party has always been ambiguous about whether it is trying to make capitalism more efficient, or whether it is trying to soften its harshness. Since the 1970s, the left has been much weakened, as neoliberal ideas became totally ascendent. Under Blair, the idea that the Labour party was committed to any redistribution was pushed to the sidelines. I would like to see a new kind of left - a left that would relate to the present predicament.

Late breaking addendum : Nobel prize-winner Joseph E. Stiglitz has an article on CNN about preventing future financial catastrophes (in the US) through prudent regulation.

Whole Foods - how the mighty have fallen

I shouldn't gloat.
Some years ago, I refused absolutely to shop at Whole Foods. It wasn't just the high prices that later led to the nickname of "Whole Paycheck"; it wasn't just the unnecessarily vicious anti-union attitudes of its founder and management. It was these factors combined with the threat it posed to my most beloved of institutions, the new-wave consumer-owned food co-op. Eventually, it came to a point where it wouldn't matter any more. Co-ops had shrunk in number, but those that survived generally gained in strength. A lot of this was down to a tipping point in consumer preference for organic and artisanal foods, especially amongst the economic upper-middle classes. This benefitted both Whole Foods and its major competitor Wild Oats, as well as Fresh & Wild in the UK and food co-ops throughout the US.
In the past year or so, Whole Foods has acquired both Wild Oats and Fresh&Wild. Almost exactly a year ago, Whole Foods, with great fanfare, announced its opening of the first UK outlet, in London, natch, in Kensington, natch. Just in time for the so-called "credit crunch".
Last week, Whole Foods announced that it had lost $18 million in its first year in London. Of course it could have been expecting losses in any case, and on such an expensive piece of real estate, with British shoppers not being in the mood for costly food-shopping experiments, it should have expected the near disastrous results.
In the US, when the overall profit slump triggered a share sell-off the next day, Whole Foods laid most of the blame not on its ill-fated expansion into the UK, but on the costs associated with acquiring Wild Oats. Well, maybe.
Now Whole Foods is pursuing a brilliant strategy (in the US only I presume) of sales, discounts and budget-related customer education, trying to reverse its "Whole Paycheck" image. As I said when they opened the London branch, we'll see.

We want unsound investments and we want them now!

From the Onion : Recession-plagued Nation Demands New Bubble to Invest In. Some likely candidates for the 2008 bubble: undersea mining rights, postmodernism, illegal immigration futures, "widgets" or fairy dust. Anything really, as long as it can create massive, unsustainable debt while triggering a burst of good old recession-busting spending. One of the experts cited in the article, who works for a prominent bubble-based investment firm, reminds us that "the American economy cannot exist on sound investments alone." How very true.

Another similar take on US economic woes

This article, by Paul Krugman in the NYT, is not so in-depth as the WaPo one, but has a similar case to make, particularly:

It wasn’t just Alan Greenspan’s unwillingness to admit that there was anything more than a bit of “froth” in housing markets, or his refusal to do anything about subprime abuses. The fact is that as America’s financial system has grown ever more complex, it has also outgrown the framework of banking regulations that used to protect us — yet instead of an attempt to update that framework, all we got were paeans to the wonders of free markets.

New kind of recession, new rules

As the government here is in minor turmoil over the "Northern Rock crisis" and the company I used to work for (on whose premises I still work as a contractor) just made 500 people around the country redundant, I just happened upon a really brilliant op-ed piece by Harold Meyerson in the Washington Post (or WaPo as most typing-shy bloggers call it). Now this article is over a year old, even though it is more relevant now than when it was written (which we word-infatuated bloggers call "prescient") so you may need to register with WaPo to read it, but you can opt out of getting any of their friendly and well-meaning spam and it is free. But knowing my readership as I do, I decided to revert to my old habit (avoided lately for IP reasons) of long quotes, because I sense that you won't register, and this is just so good:

In a normal recession, the to-do list is clear. Copies of Keynes are dusted off, the Fed lowers interest rates, the president and Congress cut taxes and hike spending. In time, purchasing, production and loans perk up, and Keynes is placed back on the shelf. No larger alterations to the economy are made, because our economy, but for the occasional bump in the road, is fundamentally sound.
This has been the drill in every recession since World War II.
Republicans and Democrats argue over whose taxes should be cut the most and which projects should be funded, but, under public pressure to do something, they usually find some mutually acceptable midpoint and enact a stimulus package. Even in today's hyperpartisan Washington, the odds still favor such a deal.
This time, though, don't expect that to be the end of the story -- because the coming recession will not be normal, and our economy is not fundamentally sound. This time around, the nation will have to craft new versions of some of the reforms that Franklin Roosevelt created to steer the nation out of the Great Depression -- not because anything like a major depression looms but because we face an economy that's been warped by two developments we've not seen since FDR's time.
The first of these is the stagnation of ordinary Americans' incomes, a phenomenon that began back in the 1970s and that American families have offset by having both spouses work and by drawing on the rising value of their homes. With housing values toppling, no more spouses to send into the workplace, and prices of gas, college and health care continuing to rise, consumers are played out. December was the cruelest month that American retailers have seen in many years, and, as Michael Barbaro and Louis Uchitelle reported in Monday's New York Times, delinquency rates on credit cards, auto loans and mortgages have all been rising steeply for the past year.

So, I hope that was good enough to entice you to read the entire article. He goes on to offer real, serious and radical ideas about "what is to be done".

Blogkeeping - catch-up

Wikipedia's image of the day - the Hawthorne Bridge in Portland OR (I've been there!)

I have been in a fog. Too many things competing for my attention. Almost every day at work, except the days when I have been really busy, I see a few things I ought to, want to, blog about and I email myself a link (or two or ten) and then I don't do any blogging in the evening. To be fair, my computer keeps turning itself off. There have been some family issues, and I have been fighting off a cold, probably due to stress caused by all of the above. But still . . . I'll start with the silly, move through the serious, and hopefully something sublime will turn up.

In the Onion, "Entire Family Projects Neuroses Onto Their Innocent Dog" is priceless.

Received in an email (I'm sure it's on the web somewhere):

The entire city council of Ashland, Ore., has decided to enter relationship
counseling. The catalyst was Councilman David Chapman's telling Councilman
Eric Navickas to "shut your f...ing mouth" during last week's meeting,
though Navickas had previously called the city's mayor "a Nazi," and
tensions have generally been running high. Taxpayers will pay $37,000 for
the council's five months of therapy, which "may seem like a lot of money,"
said City Administrator Martha Bennett, "But if the council doesn't function, the city doesn't function."

The Vatican has had a bit of a rethink about the Knights Templars.

I was thrilled to bits that Doris Lessing won the Nobel Prize for Literature, even though, yes, it was a bit overdue.

The Guardian Society section today profiled Edgar Cahn, the founder of "time banking", a sophisticated form of bartering and valuing social contributions as much as commercial ones.

And finally, how about that England rugby team, eh? Watched all the games so far except the first one (I was out). (I guess this is going to be the sublime bit.) In related news, facebook has a new Jonny Wilkinson Appreciation Society site.

Deborama's WWW Number 36 - Freakonomics

Yesterday I almost bought a book called The Undercover Economist. I was thinking to myself, as I saw this book, that I like books like that, but then I realised that I actually liked one book like that, or rather, like that but better. That's a book called Freakonomics. And there is also a blog called Freakonomics by the same authors.
The Undercover Economist is very UK-based and Freakonomics is a bit US-centric. But Freakonomics is still far more globally-conscious. The main thing is that every idea in Freakonomics is fresh and original and thought-provoking, whereas the ideas I encountered in my brief browse of The Undercover Economist were not that new to me and may be thought-provoking to someone with zero familiarity or interest in economics, but not to me. It absolutely did not deliver on the promises of either the title or the gushy blurbs on the back. So maybe I will catch it on the remainder pile or get one via Bookcrossing. Meanwhile, I heartily recommend the Freakonomics blog.

Mrs. Watanabe and the share market crisis

The New York Times has this interesting story about yet another Japanese social phenomenon little-known in the west: stay-at-home wives of affluent Japanese businessmen have been gradually gaining clout in international currency markets and margin trading. Trading exclusively online, with a subculture that includes best-sellers, TV interviews, clubs and blogs, they use their own or sometimes their husband's money as a stake and try (often successfully) to build up independent wealth to shield themselves from divorce or excessive control by their husbands. The current shakeup in international markets has brought chaos to their powerful little market, and professional traders consider them a wild card.

Tragedy of the commons

Wikipedia: The tragedy of the commons is a class of social trap that involves a conflict over resources between individual interests and the common good. The term derives originally from a parable published by William Forster Lloyd in his 1833 book on population. It was then popularized and extended by Garrett Hardin in his 1968 Science essay "The Tragedy of the Commons". However, the theory itself is as old as Aristotle who said: "That which is common to the greatest number has the least care bestowed upon it".

I have been accused by DH, who is very literate, fairly widely-read, and by no means ill-educated (although he is a university dropout, and he tends to zone out whenever a conversation takes a philosophical turn) of elitist language in using the phrase "tragedy of the commons" in my WWW article below. I would appreciate feedback on this, as I thought it was a fairly well-known concept but maybe I really do live in my own little ivory tower as my dear Mum always said. I have edited the article to place the possibly offending phrase in quotes.

Blogkeeping

Check out the new look at Deborama's Kitchen or just the latest post there, on the economics of fine restaurants in small markets (it's more interesting than it sounds.)
I am still laboriously going through my old posts (I've got nearly four years of them) and titling and categorising and deleting dead links. When I finish this, I am changing to a new Blogger template and the archives will (hopefully) re-appear, along with a category index.

The Freakonomics guy is blown away by Barack Obama

If Barack Obama is as good a politician as he is a writer, he will soon be President, says Steven D. Levitt of Freakonomics fame. The many pages of comments hash out the question of whether or not he (Obama) is in fact a good politician, and with the lively participation of conservatives, it's about even.

Muhammad Yunus, Nobel Peace laureate 2006

As Muhammad Yunus, founder of the Grameen Bank, "the most effective anti-poverty organisation in the world" is announced as winner of the 2006 Nobel Peace prize, Middle Tennessee State University is proud to claim him as one of their own. (He was a professor of Economics there.) Back in Tennessee, Yunus's work with the Grameen Bank has always been greatly admired - and influential. Numerous economics students from Tennessee have served internships with Grameen Bank in India, and some southern progressives are considering a programme based on it to help the refugees of Hurrican Katrina.

Murray Bookchin

I forgot to post an obituary link for the wonderful Murray Bookchin, who died four days ago. This seems to be a big year for the passing of venerable old leftists, but Murray was a peach, way ahead of his time and his generation. He was thinking in terms of a red-green coalition and libertarian socialism before there were even the words of a common language to express such ideas. Fortunately, he was also a good wordsmith and so could make them up.

Sweet Victory: Huge Win for Wal-Mart Workers

Get your latest Wal-Mart news here. Wal-Mart and its many transgressions has been a recurrent theme of this blog, another theme that I have been regrettably neglecting in recent months. I will try to do better.