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Dumping On Our Descendants

Wed, 19 Mar 2008 14:30:00 GMT-5

The Bible says that the sins of the parents will be punished on the children, yea unto the seventh generation. The “sins” we are committing are embodied in the ever-mounting debt that our generation is incurring that will have to be paid off by our kids and their kids and so on and on. The debt is accumulating at an incredible rate.

Official sources inform us that the cost of our war in Iraq comes to $528 billion. There will be a projected $70 billion more for 2009.

Contrast this with the situation when Clinton left office. The budget was almost in balance. Actually, it was in balance if the so-called “off budget” budget was added to the “on budget budget.” The “off budget” budgets are the Social Security Trust Fund and the Postal Department that are independent entities whose surpluses may not be used to defray ordinary expenses.

Our present backbreaking deficits were brought on by two persistent policies of the Bush administration. The first policy was the sharp reduction on taxes from wealthy individuals and corporations. The reasoning of the Bush administration was that by enriching the rich, the beneficiaries would have the money to employ more people and startup or expand existing businesses.

If this “drip down” theory of the way the economy works were valid, the American economy should now be flourishing — which it isn’t. To make matters worse, the Bushies decided to declare war against Iraq, with imulti-billion dollars in additional expenses.

And now the sins of the fathers are about to be visited on their children and children’s generation for who knows how long.

The Wrong And Right Way Out

Mon, 17 Mar 2008 14:35:00 GMT-5

The American economy is in trouble. It is not the first time. In the 1930s, the American economy sank into a depression. As a candidate for president, Franklin D. Roosevelt described the situation with “one third of the nation ill fed, ill clothed, ill-housed.” He took steps to revive the economy by creating jobs. They were jobs that needed doing but were not being done because, at the time, the private sector of the economy did not find them profitable.

For instance:

There were forests that needed attention. They had been wiped out by forest fires or by depletion for civilian purposes like wood and paper. Under the New Deal, Roosevelt created the Civilian Conservation Corps. It was their job to restore the woodlands, serving a double purpose. It met a national need and also created jobs.

As a young college student, I got a job under the National Youth Act. My job was to go from tenement house to tenement house to find out whether they had internal toilet facilities. This led to a federal housing program that provided millions of jobs.

Right now there are all sorts of national needs. Almost daily we hear of still another bridge that collapsed. School buildings are dilapidated and in danger. The medical needs of children lack proper attention. Put bluntly, there are endless needs that go unattended.

Yet, at this very hour, reports The New York Times, (March 16) “the Fed announced a $200 billion lending program for investment banks and a $100 billion credit line for banks and thrifts.”

The Sad Bad Story of Governor Spitzer

Wed, 12 Mar 2008 15:38:00 GMT-5

“I have acted in a way that violates my obligations to my family and that violates my — or any — sense of right and wrong,” Eliot Spitzer said.

The obvious question is just why or how a highly intelligent man like Spitzer worked his way into such a situation.

What follows is my own highly speculative attempt to explain Spitzer’s strange conduct: We begin with the fact that Spitzer is not only a highly intelligent man but also a highly emotional bull of a man. He is devoted to his family, although obviously his wife is not fully able to satisfy his sexual needs.

He might have found himself a girlfriend on the side. But she would have to understand that a marriage was not in the works. How long would a worthwhile woman put up with such a lopsided arrangement?

As a practical-minded man, Spitzer probably decided that a realistic outlet for his emotional needs could be satisfied by a professional prostitute or two who would allow him to vent his libido without any further obligations.

Is there a political future for Spitzer? The old saw says, “To err is human, To forgive is divine.”

The Call of the Cold

Tue, 25 Sep 2007 20:26:00 GMT-5

The latest trend among tourists is the Arctic Circle. Why? The answer may perhaps be found in a quatrain we recall from childhood.

Man’s a fool.
When it’s hot he wants it cool.
When it’s cool he wants it hot
Always wanting what is not.

This strange behavior is not hard to understand. Novelty, as they say, is the “spice of life.”

But this shift of tourist interest in the Arctic Circle is a real reversal of trends that characterized our behavior in the past. Generally, the idea was to get out of the ice and snow of northern winters. “California, here I come,” was a national slogan. Florida was and still is a magnet for northerners from the Atlantic Coast to the northern areas of the Midwest.

But a reversal of the historic trend from traditional climates to the Arctic Circle seemed unlikely. The reason is the much discussed “global warming.” In the past the Arctic Circle was a great big glacier or two. It was impenetrable by humans with the exception of a few incredible explorers. But, now, thanks to global warming, glaciers turn to icebergs and icebergs turn to floating pieces of ice.

But before we call for three cheers for global warming, we had better be warned about the global impact of rising oceans fed by melting glaciers that lift the level of oceans so that one day not so far distant Manhattan Island will be turned into a swimming pool spiked with skyscrapers.

Our Topsy Turvy Times

Tue, 25 Sep 2007 20:09:00 GMT-5

Once upon a time when the sun never set on the British Empire, the crown jewel in the imperial crown was a country called India. There were many agricultural products that the empire derived from India, including opium. When the power loom for weaving textiles made its appearance, the native Indians started up a lively business. To the British Empire this was a direct threat to their textile trade. So the Brits proceeded to destroy the power looms.

The native Indians (not to be confused with the American Indians) turned to knitting textiles by hand. The British imperialists were not deterred. They cut off the thumbs of the native Indians so they could not knit textiles.

Time marches on. British textile corporations are closing down their mills in the United Kingdom to get their work done in India.

What happened?

Four simultaneous technologic revolutions made it possible for British textile manufacturers to get their work done in distant lands where labor is cheap These are revolutions in communications, transportation, materials handling and computerized management. In a matter of seconds, highly skilled technicians in the British home office could see exactly what was happening in their plants in India, They could instantaneously communicate corrections. In short, modern technologies had turned the world into a global village.

But, regrettably, the “village” has no government to check the outrages of the corporations. The answer lies in a sort of global government where the World Trade Organization is obliged to live by the labor standards code developed by the International Labor Organization.

If and when this ever happens perhaps some savvy historian will call it The Tyler Plan.

The Power of a Weak Dollar

Mon, 24 Sep 2007 20:22:00 GMT-5

For many years, Uncle Sam was the big buyer in the world market. In part this was due to a “strong dollar ” A big buck could buy foreign goods inexpensively. It was also due to the outsourcing of production in countries with cheap labor. The finished product found a heavy market in the United States.

But now, it appears, that the American dollar is weak in global trade. The Wall Street Journal reports, “The U.S. dollar has grown weaker against the Euro, the British pound and other currencies.” This month the Euro rose to $1.39 cents.

But, irony of ironies, our weak dollar has its own strength. The weak dollar finds that imports from countries that have a stronger currency have become quite expensive. So, we import less. And vice versa. Buyers in other countries with strong currencies find American products a real bargain. So we sell more. The balance of trade turns in our favor.

Foreign producers have also opened factories in the U.S. Although the wages paid are high, they are not as costly as they seem because the foreign currency is able to lay its hands on U.S. dollars inexpensively.

To paraphrase Gilbert and Sullivan: “ Things are seldom what they seem. A weaker buck may rule supreme.”

Going East by Going West

Mon, 17 Sep 2007 20:05:00 GMT-5

Ever since mankind discovered that the Earth is round, daring souls have attempted to get to the east by going west and vice versa. Columbus was one of them. When in 1492, he sailed the ocean blue, he was looking for a western route to India. There was a lively trade between Europe and India, especially in luxury items like silks and spices. If Columbus could find a western route to India by water, he would have revolutionized the trade between Europe and the East.

When in his bumping into the landmass of the Western hemisphere, he apparently must have thought that he had reached India. Indeed, he called the natives Indians. He did and we still continue to do so.

In the centuries between 1492 and 2007, there have been repeated attempts by daring souls to find a northwest passage to Asia. The chief obstacle has been icebergs and floating chunks of icebergs that have wrecked the crafts of many an adventurous sailor.

But things have been changing, thanks to — of all things — global warming. The icebergs and the chips of floating ice are melting in the rising heat. History was made this summer by Roger Swanson, an Englishman who started out from northern Canada and then into Alaska and — surprise — within spitting distance of Russia.

Yes. The earth is shrinking. And soon, everybody on the face of the Earth will be our next-door neighbor.

Circumcision Invades Africa

Sat, 08 Sep 2007 20:59:00 GMT-5

Circumcision has a long and fascinating history. The latest chapter is being written in Africa. The Wall Street Journal reports “circumcision dramatically reduces the risk of contracting HIV.”

In some areas, such as Kenya, the circumcision rate is a high 80%. While Kenya is an exception, there is good reason to believe that ultimately the practice of circumcision will spread.

In the history of circumcision one of the most intriguing stories involves Moses, the patriarch who led the Jews out of Egyptian slavery. Moses was married to an Ethiopian woman named Ziporah. Moses’ sister Miriam and his brother Aaron were unhappy about the marriage and said so openly.

Moses’ wife gave birth to a son. Naturally, the question of circumcision arose. Moses was not particularly interested. Moses himself had not been circumcised. The reason was his parent’s attempt to save him from an Egyptian edict that Jewish male children were to be exterminated — an early attempt at what we now call genocide. His parents put him in a little floating tub and dropped it in a stream adjoining the pharaoh’s estate. One of pharaoh’s daughters fell in love with the infant and he grew to manhood in the royal palace.

While Moses was not interested in circumcision, his wife was. With a sharp instrument, she circumcised the child and then smeared some blood on Moses’ toes.

Another fascinating story is the tale of Jews at the time that the Greek despot Antiochus Epiphones ruled Israel. Some upper-class Jews converted to the Greek religion. To avoid any misunderstanding they underwent a most painful bit of surgery to restore the foreskin.

Mid-Term Madness

Wed, 05 Sep 2007 20:55:00 GMT-5

In the last national election in 2006, the Democrats captured control of both houses of Congress. Their margin of victory, however, was insufficient to override a presidential veto that requires a two-thirds vote. Which means that the Republican Party really was still in control of legislation.

Despite this, the present Congress did enact a raise in the federal minimum wage. But the GOP extracted a price for its support by attaching a rider to the bill that would provide a tax reduction for small business.

All of which poses the question of whether the Democrats will carry both the presidential and legislative elections in 2008.That may come to pass but the legislative victory of the Democrats in 2006 is not an indicator of a presidential and legislative victory in 2008. Here’s why:

In a mid-term election where the president is not up for election, the party in the White House is likely to lose seats in the legislature. The reason is super-simple although irrational. Millions of voters who favor the party in the White House figure that so long as their president is in power they have no reason to worry. So they don’t bother to vote.

A striking example of how this works occurred in the Roosevelt years in the White House. He was elected in 1932. In 1934 the Democratic delegation, in an exception to the rule, increased its strength in Congress. Voters were still voting against the Republicans and the Great Depression. But by 1938, when things began to settle down and America was returning to normalcy, the party of FDR lost seats in Congress.

All of which means that the Democratic Party can’t assume that the Democratic gain in Congressional seats in 2006 is a guarantee of victory in both Congress and the presidency in 2008. Remember on Election Day every vote counts!

Jatropha to the Rescue

Sat, 25 Aug 2007 20:46:00 GMT-5

In mankind’s struggle to head off the use of fossil fuels, the U.S., as well as other countries, have turned to the use of energy derived from plants. In the U.S., we have turned to ethanol, a corn derivative. Needless to say, the supply lags far behind the demand.

But now there is a new plant that may go a long way toward meeting mankind’s need for non-fossil fuels. Its name is Jatropha. It grows wild in India. It is an ugly plant. About the size of a golf ball, its seeds contain a yellowish liquid that can be converted into biodiesel.

O.P. Singh, a horticulturist for India’s ministry of railways, bubbles over with enthusiasm. The Wall Street Journal quotes him as saying, “This plant will save humanity. I tell you. Someday every house will have Jatropha.”

If and when the miracle happens, it will be another milestone in man’s progress on earth. Of all the creatures on earth, homo sapiens are the only creatures that know how to make tools to enable them to develop civilizations that thrive in the icy Arctic zones and in the deserts of Arabia.

In a wrestling match with a bear, I would put my money on the bear. But when a man is equipped with a tool called a gun he is the sure winner.

The Romans used to refer to man as homo sapiens — the human with a brain.

We do best when we use the brain as, in this instance — when we cultivate jatropha.

Concentration of Ownership Continues

Fri, 24 Aug 2007 18:08:00 GMT-5

In our economy that some call free enterprise and others call capitalism, the concentration of ownership in which fewer and fewer own more and more took a giant step forward in late August when Bank of America Corp. acquired a $2 billion equity stake in Countrywide Financial Corp. The meaning of this move, as reported in The Wall Street Journal, “is to dispel a crisis of confidence among creditors and investors in the nation’s largest home mortgage lender.”

But, there is a deeper meaning behind this move in terms of what is happening in the world of mortgages. As the Journal notes, “The move illustrates how among the current shake out among mortgage lenders, some financial heavyweights — including Bank of America and Wells Fargo & Co. — are gaining a firmer grip on the home mortgage business. Even as smaller rivals with less secure financing and capital bases fall by the wayside or are forced to retrench.”

The concentration of ownership in the home lending business means that a handful of lenders will be in a position to dictate the terms of future mortgages. Once more, our nation will be engulfed in a struggle between those who earn more than they own and those who own more than they earn. Karl Marx called it “the class struggle.”

But how can workers call a strike against a company that gets its work done in a factory on the other side of the globe?

The ILO to the Rescue

Wed, 22 Aug 2007 18:04:00 GMT-5

The world economy is in a dangerous state. In no small measure it is due to the outsourcing of jobs by the leading nations, including the United States. When jobs are outsourced they are moved out of the mother country to lands where cheap, child and even slave labor are available.

What can be done about this? A solution lies in bringing together two international institutions: They are the International Labor Organization and the World Trade Organization. The ILO’s name is misleading. Offhand it can be mistaken as an international organization of unions. But it is not.

The ILO was born as part of the League of Nations, very much at the insistence of our own President Woodrow Wilson who held that there should be an international agency that should protect and promote the conditions of the working people globally. When the League of Nations was replaced by the United Nations, the ILO became part of the U.N.

The way in which the ILO operates is intriguing. Every affiliate country has four representatives, regardless of population. Of the four, two represent their government, one represents the business community and one represents labor. Over the years, the ILO has elaborated a code of conduct covering the right of workers to organize unions, the abolition of slave labor, limits on work hours and on child labor, et al.

The central weakness of the ILO is that it has no power to enforce its proposed policies. What is needed is joint action between the ILO and the WTO because the latter has the power to apply sanctions to any country in violation of the rules of the game.

The ILO will write the rules and the WTO will enforce them.

Our Topsy Turvy Times

Tue, 21 Aug 2007 17:54:00 GMT-5

Time marches on. British textile corporations are closing down their mills in the United Kingdom to get their work done in India.

What happened?

Four simultaneous technical revolutions made it possible for British textile manufacturers to get their work done in distant lands. These are revolutions in communications, transportation, materials handling and computerized management. In a matter of seconds, highly skilled technicians in the British home office could see exactly what was happening in their plants in India. They could instantaneously communicate corrections. In short, modern technologies had turned the world into a global village.

But, regrettably, the “village” has no government to check the outrages of the corporations, The answer lies in a sort of global government where the World Trade Organization is obliged to live by the labor standards code developed by the International Labor Organization.

If and when this ever happens perhaps some savvy historian will call it “The Tyler Plan.”

The Roots of the Housing Crisis

Tue, 21 Aug 2007 17:49:00 GMT-5

Foreclosures of homes are the big pain of the day. Millions of families who once proudly boasted that they had reached a level of earnings that allowed them to buy a house are now squirming as lending institutions threaten foreclosure. What happened?

The good old days came and departed. Families, mainly middle class, who could make ends meet, saw inflation eating away their income. The breadwinners in many families found themselves jobless as American companies closed down their facilities to get their work done in countries where cheap and child labor were available. So, homeowners had to borrow money to keep their heads above water. The lenders, of course, wanted to know how the borrower could guarantee that he or she would be in a position to pay what was required. The borrowers put up their homes as security.

But, alas, the homeowners, squeezed by inflation and economic decline, a combination that economists call “stagflation,” could not meet their mortgage obligations. Foreclosures have become the order of the day.

Meanwhile, the official figures on the state of the economy coming out of the administration report that all is well. The Gross Domestic Product shows growth. But a close examination of the way in which the GDP is determined and was once correct is now outdated and inherently faulty. The formula is GDP = S-I+E, in which S stands for sales, I for imports and E for exports. The great error in this formula that refers to Sales by American companies assumes that the work done to fulfill the order is carried out in the U.S. That was once true. It is no longer true in the age of outsourcing.

One final factor causing inflation: we live in an age dominated by MA — Mergers and Acquisitions. Almost daily come the reports of two corporate giants merging to form a super-giant. The old saying was “competition is the life of trade.” Concentration of corporate ownership in ever fewer hands displaces true competition for monopolies, oligopolies and cartels.

Is there a remedy? Yes. But not so long as the owners of the economy are also the owners of the government.

Farewell Unto Rove

Tue, 14 Aug 2007 19:52:00 GMT-5

There is a guy whose name is Rove
Some say that he’s the guy who drove
The Bush regime to do its deeds
It was Rove who sowed the seeds.
He really proved that he was smart
When he pushed Bush’s campaign cart
For reelection midst a war
For then Bush merely had to scream,
“You don’t change horses in mid stream.”
But then alas all things went wrong
Although our fighting men were strong
“Surge” on “surge” just didn’t work
Insurgents said “You are a jerk.”
“The time has come,” said Rove to Rove,
“When I feel I am on a stove.
“No longer can I take the heat
“I guess it’s time to change my beat
“And find myself a cooler spot
“Where others reign and Bush does not.”

Congress Cutting Special Interest Ties

Sat, 11 Aug 2007 19:56:00 GMT-5

For many years, lobbyists in Washington have had a free hand in the ways they employed to influence Congress. One of the most blatant was conveyed in a tactic called “bundling.” The lobbyist would solicit support for a candidate observing carefully the legal limits on how much an individual contributed. But, the lobbyist bundled the separate gifts and delivered the impressive total to the candidate who indeed felt indebted to the lobbyist for the support. But, in addition, lobbyists treated candidates to meals, to trips, to membership in country clubs, etc.

When in the mid-term election of 2006, the Democrats won a majority of the seats in both House and Senate not much in the way of progressive legislation was expected. President Bush still had the veto power and the Democrats did not have the necessary two-thirds to override the veto.

But on the second day of August, the Senate passed a bill imposing numerous restrictions on the traditional ways in which lobbyists operated. That, in itself, is no surprise because the Democrats do have a majority in the Senate. But what was unexpected was the lopsided nature of the vote. The vote was 83 for and 14 against.

This means that if the President vetoes the bill there are enough votes to override his veto. The White House has lost control over its party’s delegation in the Senate.

Yes — the political pendulum is swinging from right to left in Washington.

Big Push For Preschool Education

Fri, 10 Aug 2007 20:08:00 GMT-5

The United States has been a world pioneer in schooling for the people. It started in colonial days in the Massachusetts Bay Colony. Every child was compelled to attend a school, starting at an early age. The reason was double: First, it was necessary to teach all children that humans were born in sin and that they must learn to overcome this inherent trait. Secondly, the hours spent in school kept the kids off the streets where they would commit untold mischief. The schools were, in effect, parochial.

In the early years of the 19th century a new dimension was added. Thanks to the rise of a labor movement, workers won the right to vote, although they did not own property. They were organized city by city. Philadelphia was the first. Their platforms differed to reflect their different circumstances. But they all called for free, universal public school education. Their reason was double: Education would enable workers to tackle jobs that needed learning. They also felt that education would prepare the children of workers to hold posts of public responsibility.

At first, the education was applied to the elementary grades. Then high school education followed. And then came public colleges and universities.

Since the financing of schools was local, wealthy neighborhoods had better schools than poor neighborhoods. Some states came to the rescue by helping out with financial aid where needed. Then came federal aid to education.

The latest step in the progress of American education is a movement promoting preschool education for 3- and 4-year-olds. Presidential candidate Hillary Clinton proposes to spend $15 billion over five years on universal preschool education.

Yes, the United States still is a nation that wisely values education.

Outwitting Outsourcing

Wed, 08 Aug 2007 20:12:00 GMT-5

At the most recent televised debate among aspirants for the Democratic nomination for president, the subject of “outsourcing” played a prominent role. In goodly part, this may have been due to the fact that the program was sponsored by the AFL-CIO.

Outsourcing is the common practice of multinational corporations, which have, over recent years, shut down plants and fired millions of American workers to get their work done in countries where cheap, child and even slave labor were and are available. Most prominent among such countries are China and India. But there are also countries in Latin America as well.

What can be done to halt this dangerous disease? Some states in our country have laws that deny state contracts to companies that practice outsourcing. It would help if our federal government did the same.

But that would not in itself cure the curse. But do not despair. There is a way to go that will solve the problem not only for the U.S. but for other countries that are plagued by outsourcing as well.

The solution lies in a marriage of two major agents of the international system. They are the World Trade Organization and the International Labor Organization. The WTO spells out a code of conduct that applies to all trade treaties. Countries that violate that code are subject to sanctions. The ILO — an organization established at the behest of our own President Woodrow Wilson — has elaborated a code of conduct to protect the rights and the safety of working people. Unfortunately, the ILO has no means of enforcing its ideas. It is a mouth without teeth.

A marriage of the WTO and the ILO would make the code of labor conduct part of every contract of the WTO.

We live in a global economy. To cure a global economic disease requires global action.

The World’s Richest Man

Mon, 06 Aug 2007 20:17:00 GMT-5

The world’s richest man, according to The Wall Street Journal, is a Mexican son of Lebanese immigrants. His name is Carlos Slim. He is master of the monopoly. No matter what the field in which he operates, he soon makes it his private domain.

He is the modern refinement of an ancient economic tendency described by Adam Smith in his classic “The Wealth of Nations,” written a couple of centuries ago. In it Smith notes that when men of the same trade get together even for fun and merriment, the gathering will end up in a conspiracy against the public welfare and in some contrivance to raise prices.

The first giant step forward in this process was the organization of corporations. Instead of competing against each other, they pooled their capital in a single company called a corporation — marked as Inc., or Ltd.

But it did not end there. The individual corporations organized into trusts. There were the beef trust, the sugar trust, the cotton trust, et al. What they all had in common was to defy the law of supply and demand and set price by decree.

Busting the trusts became a major political purpose of progressive legislators. Perhaps, the most famous piece of trust busting was the break-up of American Telephone and Telegraph. But then came the Baby Bells that seem to have the same monopolistic tendencies as the original.

Although the U.S. is not Mexico, there is a constant trend in the U.S. toward a concentration of ownership, embodied in monopolies, oligopolies and cartels in which corporations divide up the market to ensure that they will not compete with one another.

One final point: Where you have concentration of ownership, it is difficult for newcomers to enter the field. The giant combines can — and do — wipe out a newcomer by cutting prices below the cost of production. Once they get rid of the newcomer, they revert to their original prices.

Manipulating the Market

Mon, 30 Jul 2007 20:22:00 GMT-5

In the closing days of July, the stock market began to sag. No one seems to know why. We are informed that the American economy is in good shape. We are also advised that the global economy is also in good shape. Some theorize that it has to do with bad loans on housing. But, whatever the explanation, the assumption is that the sag in the market is due to certain economic factors.

What all these explanations have in common is the assumption that “the market” is an independent factor. But the truth may well be that the market can be manipulated in a game played by bulls and bears where bulls become bears and vice versa over night.

Here’s how:

A handful of brokerage houses advise their clients that this is the moment to sell. Guided by their brokers they sell. The market begins to sag. The individual investor is grateful that he has such a wise broker. Meanwhile, the media carry the news that there are forces at work depressing the market. More investors sell.

Meanwhile, individual investors are granted stock options that enable them to buy a stock at a low price at some future time when the prices on the stock rise.

Yesterday’s bears now become bulls advising their clients to “buy now!”

In short, what happens on Wall Street may have nothing at all to do with what is happening in the economy because the “market” can be — and is often — manipulated.