As If Obsolete Infrastructure And Thinking Weren't Bad Enough - There's Political Corruption As Well

responsiblestatecraft  |  This week U.S. government officials and defense industry personnel are walking the halls of the UAE’s International Defense Exhibition and Conference (IDEX) to promote some of the latest U.S. defense technology to the UAE and other Middle East buyers. The officials, however, will largely ignore one increasingly risky aspect of the deals defense companies will put on the table.

Typically referred to as “offsets,” these secretive “sweeteners” or investments masks corruption risks that could harm U.S. security interests and help keep millions in a constant state of poverty and conflict around the world. This U.S. approach also seriously undermines the Biden administration’s efforts to encourage U.S. companies and foreign governments to fight corruption and protect democracies.

Big Business

This year’s IDEX will be sure to result in many major arms sales agreements.. The EXPO comes at a time when defense spending is rising globally in response to growing threats and new conflicts. The UAE remains among the top arms buyers in the world. In 2019, the UAE Armed Forces signed 33 deals worth $2.8 billion with international companies at IDEX.

The United States continues to dominate arms sales to the UAE, but it faces competition from major players like China and European countries, as well as the growing defense production capabilities of countries like Turkey and Israel. Defense companies often rely on offsets to make their proposed arms sales more attractive to foreign buyers. Offset packages are essentially the selling company’s promises to invest in the buyer country’s defense industry (direct offsets) or broader economy (indirect offsets).

U.S. defense companies regularly agree to offset packages worth billions of dollars each year. In 2019, U.S. defense contractors reported entering into 31 new offset agreements with 12 countries valued at $8.2 billion, according to the U.S. Department of Commerce. The value of these agreements often equaled more than half the total value of the arms deal. Some of the common types of U.S. company indirect offsets include agreements to purchase items from the procuring country, subcontract with their businesses, transfer desirable technologies, or provide credit assistance.

At the 2019 IDEX, the UAE announced a new offset policy for their arms purchases, which requires defense companies to include offsets for contracts at $10 million or more. Unlike some previous policies, this one focuses more on offsets to areas outside the defense sector (indirect offsets), including infrastructure, food and water security, and other strategic sectors. The policy encourages defense companies to use cash payments to satisfy offset requirements. The UAE has made it policy not to release any information publicly about its offsets agreements.

Facilitating Corruption

The use of offsets is controversial. In 2007, the European Commission directed European countries to put significant restrictions on companies using offsets as they viewed them as anti-competitive, and pushed member states to outlaw the use of indirect offsets. A common concern is that offsets transfer substantial resources, often to authoritarian governments, with very little transparency and even less accountability. Offsets, especially cash payments, can also serve as bribe money to help win a contract, avoid paying fees/penalties, or serve other corrupt purposes.

The Commerce Department has for years warned U.S. companies about investing in sovereign wealth funds in Persian Gulf countries and beyond out of concern that these funds could easily serve as vehicles for bribes. These funds can also be used to support foreign lobbying of the U.S. government. In 2016 and 2017, The Intercept reported that U.S. companies offset cash payments to the UAE’s sovereign wealth fund, Tawazun Holding, resulting in some $20 million reaching the DC-based Middle East Institute, which has promoted expanding sales of U.S. arms to Gulf countries.

The UAE’s refocus on indirect offsets, after a decade of focus on direct offsets, elevates the risks for U.S. companies indirectly supporting strategic sectors of the UAE economy that fuel conflict in Africa and facilitate money laundering. In 2009, an Italian defense company agreed to a joint production project to build a gold and silver refining plant in the UAE as part of its offset deal. Gold trade experts have raised concerns about the central role the UAE is playing in allowing gold acquired illicitly by African armed groups to be refined and resold to European and U.S. markets, masking and reinforcing conflict dynamics and death in Central and Eastern Africa.

U.S. and European defense companies have also invested in the UAE’s real estate markets through offsets. This strategic sector, however, has reportedly been a major source of money laundering for foreign public officials and U.S. sanctioned individuals. Think-tank reports on this sector have described how foreign public officials have invested millions in UAE’s luxury homes with money stolen from national budgets, leaving their own citizens in a perpetual state of poverty. International arms traffickers, such as AQ Kahn and Viktor Bout, have also used the UAE as a base of operations to ship weapons to U.S. adversaries.

America's Cold-War Military Industrial Complex CANNOT Be Modernized (REDUX 2/15/23)

wired  |  “Let's imagine we’re going to build a better war-fighting system,” Schmidt says, outlining what would amount to an enormous overhaul of the most powerful military operation on earth. “We would just create a tech company.” He goes on to sketch out a vision of the internet of things with a deadly twist. “It would build a large number of inexpensive devices that were highly mobile, that were attritable, and those devices—or drones—would have sensors or weapons, and they would be networked together.”

The problem with today’s Pentagon is hardly money, talent, or determination, in Schmidt’s opinion. He describes the US military as “great human beings inside a bad system”—one that evolved to serve a previous era dominated by large, slow, expensive projects like aircraft carriers and a bureaucratic system that prevents people from moving too quickly. Independent studies and congressional hearings have found that it can take years for the DOD to select and buy software, which may be outdated by the time it is installed. Schmidt says this is a huge problem for the US, because computerization, software, and networking are poised to revolutionize warfare.

Ukraine’s response to Russia’s invasion, Schmidt believes, offers pointers for how the Pentagon might improve. The Ukrainian military has managed to resist a much larger power in part by moving quickly and adapting technology from the private sector—hacking commercial drones into weapons, repurposing defunct battlefield connectivity systems, 3D printing spare parts, and developing useful new software for tasks like military payroll management in months, not years.

Schmidt offers another thought experiment to illustrate the bind he’s trying to get the US military out of. “Imagine you and I decide to solve the Ukrainian problem, and the DOD gives us $100 million, and we have a six-month contest,” he says. “And after six months somebody actually comes up with some new device or new tool or new method that lets the Ukrainians win.” Problem solved? Not so fast. “Everything I just said is illegal,” Schmidt says, because of procurement rules that forbid the Pentagon from handing out money without going through careful but overly lengthy review processes.

The Pentagon’s tech problem is most pressing, Schmidt says, when it comes to AI. “Every once in a while, a new weapon, a new technology comes along that changes things,” he says. “Einstein wrote a letter to Roosevelt in the 1930s saying that there is this new technology—nuclear weapons—that could change war, which it clearly did. I would argue that [AI-powered] autonomy and decentralized, distributed systems are that powerful.”

With Schmidt’s help, a similar view has taken root inside the DOD over the past decade, where leaders believe AI will revolutionize military hardware, intelligence gathering, and backend software. In the early 2010s the Pentagon began assessing technology that could help it maintain an edge over an ascendant Chinese military. The Defense Science Board, the agency’s top technical advisory body, concluded that AI-powered autonomy would shape the future of military competition and conflict.

But AI technology is mostly being invented in the private sector. The best tools that could prove critical to the military, such as algorithms capable of identifying enemy hardware or specific individuals in video, or that can learn superhuman strategies, are built at companies like Google, Amazon, and Apple or inside startups.

“The big challenge that the US military faces going forward is how to rapidly adapt commercial technologies for military use faster than competitors,” says Paul Scharre, a vice president at the Center for a New American Security, a think tank, and the author of Four Battlegrounds: Power in the Age of Artificial Intelligence, a forthcoming book about AI and geopolitics. Scharre notes in his book that the Pentagon’s share of global R&D spending has declined from 36 percent in 1960 to 4 percent today.

“We're trying to build a 21st century military with 20th century bureaucracy.”

Paul Scharre, Center for a New American Security

The US DOD primarily works with the private sector through large defense contractors specialized in building expensive hardware over years, not nimble software development. Pentagon contracts with large tech companies, including Amazon, Apple, and Microsoft, have become more common but have sometimes been controversial. Google’s work analyzing drone footage using AI under an initiative called Project Maven caused staff to protest, and the company let the contract lapse. Google has since increased its defense work, under rules that place certain projects—such as weapons systems—off limits.

Scharre says it is valuable to have people like Schmidt, with serious private sector clout, looking to bridge the gap.

 

 

 

U.S. And NATO Running Out Of Weapons - And - Lack The Industrial Capacity To Make What's Needed

asiatimes |    The long and short of it is that, while the US and NATO can fight a short conflict, neither can support a long war because there’s insufficient equipment in the now-depleted inventory and the timelines to build replacement hardware are long.

Despite a history of having done so before, starting in 1939, there is little chance that the US today can put in place a surge capacity, or that it any longer knows how to do so if it is even feasible.

Based on those circumstances alone – and there are additional, compelling reasons – the US and NATO should be thinking about how to end the war in Ukraine rather than sticking with the declared policy of trying to bleed Russia.

Let’s start by looking back at a time when the United States did know how to plan for surge weapons-building capacity.

WW2 precedent

In 1939 the Roosevelt administration, with Congressional support, passed the Protective Mobilization Act.  Ultimately this would lead to the creation of a War Production Board, the Office of Production Management and the marshaling of US industry to fight the Nazis and Japanese

In 1941 the President declared an unlimited national emergency, giving the administration the power to shift industrial production to military requirements. Between 1940 and 1945, the US supplied almost two-thirds of all war supplies to the allies (including the USSR and China) and for US forces – producing some 297,000 aircraft, 193,000 artillery pieces (all types) and 86,000 tanks (light, medium and heavy).

Russia faced an altogether more difficult challenge because after Nazi Germany attacked the USSR in June 1941 much of Russia’s defense industrial infrastructure was threatened.  Russia evacuated 1,500 factories either to the Ural Mountains or to Soviet Central Asia.  Even Lenin’s body was moved from Moscow to Tyumen, 2,500 km from Moscow.

Notably, Stalin Tank Factory 183 would be moved from Kharkiv, now a contested city in the Ukraine war, to the Urals, rebranded as Uralvagonzavod and situated in Nizhny Tagil. The facility had been a railroad car maker, so it was suitable for tank manufacturing. The tank factory relocation was managed by Isaac Zaltzman. 

At that factory the Soviets produced a massive number of tanks (light, medium and heavy), most notably the T-34, the world’s most successful tank design (based on the Christie tank chassis from the United States). Altogether the Soviets produced almost 78,000 tanks and self-propelled guns mounted on tank chassis.

This is now 

It is noteworthy that today Russia as well as the US and America’s NATO partners all face supply problems as the war in Ukraine grinds on. While the US and Europe maintain a significant commercial industrial base, needed to supply key components for defense equipment, Russia lacks an in-depth civilian manufacturing infrastructure – especially in advanced electronics, sensors and electro-optics. 

The US and Europe face a risk because they are increasingly dependent on high-tech supplies from Asia. Today there are severe supply bottlenecks, shortages and risk dependencies. Even China, which has a huge commercial manufacturing infrastructure, faces difficulties in obtaining the most sophisticated integrated circuits, manufactured only in Taiwan by Taiwan Semiconductor (TSMC).

Procurement of defense goods in the US and Europe is episodic, not continuous. Funds are allocated to purchase a certain quantity of defense equipment. When the contract is completed and there are no immediate follow-on purchases, production lines are shut down and second- and third-tier component suppliers also stop production – or they shift to work on other projects (and in some cases go out of business). 

This means that if a new order comes in later, the supplier network and the production lines will have to be started almost from scratch. In addition to the loss of infrastructure for certain types of weapons, there is the related loss of skilled factory workers and engineers.

 

What Is Systemically Important Critical Infrastructure?

lawfareblog |  The Colonial Pipeline attack was the most recent reminder of a steadily encroaching wave of cyber threats affecting the nation’s critical infrastructure. Although the ransomware attack was considered to be “relatively unsophisticated” in nature, it was powerful enough to shut down America’s largest refined products pipeline for several days. It took Colonial six days to get the Cybersecurity and Infrastructure Security Agency (CISA) any notifications that could then be disseminated to other at-risk industry entities—and even then, acting CISA Director Brandon Wales remarked that he did not think Colonial would have reached out to CISA had the FBI not facilitated the interaction. Much of the discussion around the Colonial Pipeline ransomware attack has obscured a key point: The U.S. government does not have a reliable method to identify, support and secure the most “critical of critical” infrastructure.

The U.S. government is not completely aware of what is critical—as in which companies’ disruption could have devastating or cascading consequences for the economy, national security, or public health and safety. Since its inception, the term “critical infrastructure” has grown so large that it has lost any meaningful specificity. Ranking Member of the House Homeland Security Committee, Rep. John Katko, reaffirmed this evaluation in a recent press release noting that because the United States has diluted what qualifies as critical infrastructure, “the federal government has visibility into a shockingly small sliver of significant cyber incidents across the country.” Underlying this dilution is the fact that no sufficiently granular and legally enforceable designation for “critical infrastructure” exists—consequently, there is no bound that keeps the concept from expanding into obscurity. Previous bills that have attempted to confer benefits or burdens on “critical infrastructure” have been vague and have not provided any clarity on what qualifies as such.

Furthermore, a risk-based approach to national security requires that the U.S. must prioritize its resources in areas where it can have the greatest impact to prevent the worst consequences. The U.S. government’s most capable adversaries, including Russia and China, are constantly looking for opportunities to scale their cyber operations and focus on targets that would have the greatest destructive impact. These past cyberattacks have illustrated that the nation’s adversaries have adopted a clear strategy that targets the “critical of critical” nodes that underlie U.S. national security. Therefore, the United States should respond in kind and reshape its approach to identifying and protecting them. The Cyberspace Solarium Commission’s 2020 report addresses just that.

The commission recommended that the United States codify into law the concept of “systemically important critical infrastructure” (SICI). These entities, responsible for the most important critical systems and assets in the U.S., would be granted special assistance from the federal government as well as assuming increased responsibility for additional security and information security requirements that are vital to their unique status and importance. This proposal answers the increasing need for the identification, partnership, and protection of the most “critical of critical” infrastructure.

What The Whole-And-Entire F**k Is Going On Here?

spiegel  |  The capital of the Democratic Republic of Congo is being overrun by a dangerous new drug called bombé, made from deposits the catalytic converters of automobiles. In a country facing many problems, it helps people forget. 

The videos appeared suddenly, circulating via WhatsApp and on social networks. And what they depicted quickly got a name: The zombies of Kinshasa. The images showed people completely motionless, or moving only slowly – and investigators quickly figured out what it was: a new drug by the name of bombé.

"It is an epidemic,” a leading investigative official told DER SPIEGEL. And the crisis has also captured the attention of the government of the Democratic Republic of the Congo. President Felix Thisekedi held a special cabinet meeting to discuss the new drug earlier this year. He is eager to demonstrate that he is doing all he can.

But the rapid spread of bombé is also symptomatic of a sick country, and of a megacity that has become downright inhospitable for many inhabitants. Statistics regularly show Kinshasa to be one of the least habitable cities in the world, just ahead of Damascus and Baghdad.

In one of the city’s most disreputable neighborhoods, Selembao, four young men are sitting in a concealed courtyard. A pane of glass is lying in front of them with brown powder on it. Next to the powder, they crumble white tablets to dust and then mix both substances. "The tablets need to be mixed in; they stimulate the appetite. If we didn’t include them, we wouldn’t eat anything for two days,” the youths explain.

The youths then form the powder into three short, thin lines with a razor blade, similar to how lines of cocaine are prepared. Most of it is snorted, with the glass pane being passed around the circle. The rest is crumbled into cigarettes and smoked. After taking it, the youths first become euphoric, but then they begin to move more and more slowly.

The four young men know what the powder supposedly contains: deposits and substances from catalytic converters, all of which has been scraped out of old cars and then processed into a drug. "We aren’t worried about it,” they say. Ultimately, they claim, they have nothing to lose. "Bombé helps us forget everything. In the West, they have bank accounts, I have nothing. With bombé everything is easier.” One of the users says it’s like a veil lying over you. And this for only a dollar per trip.

You don’t get much else for that amount in Kinshasa. A meal in a mid-range restaurant can easily cost 30 US dollars, while rents in the better neighborhoods approach those in Munich and Frankfurt. Kinshasa is among the most expensive cities in the world, at least for foreign workers. There are many super-rich residents, who drive through the wide streets of the business district in giant SUVs.

At the same time, though, the economy is in shambles, the country’s raw materials wealth reaches only a small elite and there is barely a middle class. A large part of the estimated 15 million inhabitants of this metropolis has no fixed job and no regular income, a number that has only grown throughout the coronavirus pandemic.

P2P Meth - Making Psychotics And Killing Off Clients Like Hotcakes...,

theatlantic |  Thus, as P2P meth spread nationwide, an unprecedented event took place in American drug use: Opioid addicts began to shift, en masse, to meth. Meth overdoses have risen rapidly in recent years, but they are much less common than opioid ODs—you don’t typically overdose and die on meth; you decay. By 2019, in the course of my reporting, I was routinely coming into contact with people in Kentucky, Ohio, Indiana, Tennessee, and West Virginia who were using Suboxone to control their opiate cravings from long-standing addiction to pain pills and heroin, while using methamphetamine to get high. Massive supplies of cheap P2P meth had created demand for a stimulant out of a market for a depressant. In the process, traffickers forged a new population of mentally ill Americans.

Over the past year and a half, I’ve talked with meth addicts, counselors, and cops around the country. The people I spoke with told me stories nearly identical to Eric Barrera’s: P2P-meth use was quickly causing steep deterioration in mental health. The symptoms were always similar: violent paranoia, hallucinations, conspiracy theories, isolation, massive memory loss, jumbled speech. Methamphetamine is a neurotoxin—it damages the brain no matter how it is derived. But P2P meth seems to create a higher order of cerebral catastrophe. “I don’t know that I would even call it meth anymore,” Ken Vick, the director of a drug-treatment center in Kansas City, Missouri, told me. Schizophrenia and bipolar disorder are afflictions that begin in the young. Now people in their 30s and 40s with no prior history of mental illness seemed to be going mad.

Portland, Oregon, began seeing the flood of meth around 2013. By January 2020, the city had to close its downtown sobering station. The station had opened in 1985 as a place for alcoholics to sober up for six to eight hours, but it was unequipped to handle people addicted to P2P meth. “The degree of mental-health disturbance; the wave of psychosis; the profound, profound disorganization [is something] I’ve never seen before,” Rachel Solotaroff, the CEO of Central City Concern, the social-service nonprofit that ran the station, told me. Solotaroff was among the first people I spoke with. She sounded overwhelmed. “If they’re not raging and agitated, they can be completely noncommunicative. Treating addiction [relies] on your ability to have a connection with someone. But I’ve never experienced something like this—where there’s no way in to that person.”

From the April 2015 issue: The irrationality of Alcoholics Anonymous

On Skid Row in Los Angeles, crack had been the drug of choice for decades. Dislodging it took some time. But by 2014 the new meth was everywhere. When that happened, “it seemed that people were losing their minds faster,” a Los Angeles Police Department beat officer named Deon Joseph told me. Joseph had worked Skid Row for 22 years. “They’d be okay when they were just using crack,” Joseph said. “Then in 2014, with meth, all of a sudden they became mentally ill. They deteriorated into mental illness faster than I ever saw with crack cocaine.”

Susan Partovi has been a physician for homeless people in Los Angeles since 2003. She noticed increasing mental illness—schizophrenia, bipolar disorder—at her clinics around the city starting in about 2012. She was soon astonished by “how many severely mentally ill people were out there,” Partovi told me. “Now almost everyone we see when we do homeless outreach on the streets is on meth. Meth may now be causing long-term psychosis, similar to schizophrenia, that lasts even after they’re not using anymore.”

I called James Mahoney, a neuropsychologist at West Virginia University who had studied the effects of ephedrine meth on the brain in the early 2000s at UCLA. The psychosis he saw then was bad, he said, but it frequently appeared to be the result of extended sleep deprivation. In 2016, Mahoney took a job as a drug researcher and specialist in WVU’s addiction clinic. Less than a year later, the P2P crystal meth from Mexico started showing up. Mahoney was inundated with meth patients who came in ranting, conversing with phantoms. “I can’t even compare it to what I was seeing at UCLA,” he told me. “Now we’re seeing it instantaneously, within hours, in people who just used: psychotic symptoms, hallucinations, delusions.”

In community after community, I heard stories like this. Southwest Virginia hadn’t seen much meth for almost a decade when suddenly, in about 2017, “we started to see people go into the state mental-hospital system who were just grossly psychotic,” Eric Greene, then a drug counselor in the area, told me. “Since then, it’s caused a crisis in our state mental-health hospitals. It’s difficult for the truly mentally ill to get care because the facilities are full of people who are on meth.”

 

Nike Thrives On the Empty Stomachs and Other Hardships of Young Women Worldwide...,

counterpunch |  Nike changes its brand more often than Madonna and more profitably. In the company’s latest transformation, Nike has risked–make that sought–the ire of Donald Trump and his drones by making Colin Kaepernick the face of its latest campaign under the inspiring slogan: “Believe in something. Even if it means sacrificing everything.” 

Kaepernick’s brief presence in an otherwise sentimental ad triggered a tweet from Trump and a boycott by the Deplorables, who took to burning their overpriced footwear. It was precisely the response Nike wanted and sales of Nike products have surged over the last week. With social justice icon Kaepernick fronting the brand, no one will be thinking about Nike’s wretched labor practices inside its sweatshops in Honduras, Indonesia and Vietnam. 

This is a proven formula for the company. When Nike was under intense public scrutiny in the 1990s, it recruited civil rights legend Andrew Young to whitewash the company’s record. The image changed, but the cruel conditions didn’t. 

Now, with the company rocked by sexual harassment charges against some of its top executives, Nike’s betting that Kaepernick will refrain from speaking out against the dismal practices of his employer. Michael Jordan, Tiger Woods and LeBron James have all remained mute about the savage treatment of the workers who make the shoes and apparel that are sold under their image. So as a reminder who Nike really is under the patina of its pitchmen, we’re running this excerpt from my book Born Under a Bad Sky.–J

Nature Bats Last: Bacterium "Figures Out" How to Eat Plastic

theguardian |  Scientists have created a mutant enzyme that breaks down plastic drinks bottles – by accident. The breakthrough could help solve the global plastic pollution crisis by enabling for the first time the full recycling of bottles.

The new research was spurred by the discovery in 2016 of the first bacterium that had naturally evolved to eat plastic, at a waste dump in Japan. Scientists have now revealed the detailed structure of the crucial enzyme produced by the bug.

The international team then tweaked the enzyme to see how it had evolved, but tests showed they had inadvertently made the molecule even better at breaking down the PET (polyethylene terephthalate) plastic used for soft drink bottles. “What actually turned out was we improved the enzyme, which was a bit of a shock,” said Prof John McGeehan, at the University of Portsmouth, UK, who led the research. “It’s great and a real finding.”

The mutant enzyme takes a few days to start breaking down the plastic – far faster than the centuries it takes in the oceans. But the researchers are optimistic this can be speeded up even further and become a viable large-scale process.

“What we are hoping to do is use this enzyme to turn this plastic back into its original components, so we can literally recycle it back to plastic,” said McGeehan. “It means we won’t need to dig up any more oil and, fundamentally, it should reduce the amount of plastic in the environment.”

About 1m plastic bottles are sold each minute around the globe and, with just 14% recycled, many end up in the oceans where they have polluted even the remotest parts, harming marine life and potentially people who eat seafood. “It is incredibly resistant to degradation. Some of those images are horrific,” said McGeehan. “It is one of these wonder materials that has been made a little bit too well.”

However, currently even those bottles that are recycled can only be turned into opaque fibres for clothing or carpets. The new enzyme indicates a way to recycle clear plastic bottles back into clear plastic bottles, which could slash the need to produce new plastic.

“You are always up against the fact that oil is cheap, so virgin PET is cheap,” said McGeehan. “It is so easy for manufacturers to generate more of that stuff, rather than even try to recycle. But I believe there is a public driver here: perception is changing so much that companies are starting to look at how they can properly recycle these.”

America's Unpeakable Filth Not-Seeism...,

theweek  |  There are industries and careers with access to vulnerable children, which criminologists tell us attract predators like water rolling downhill. The Catholic Church runs schools and orphanages. Hollywood churns through countless child actors and would-be actors, most often away from home, whose parents must navigate a highly strange and sophisticated environment.

There is the problem of an illustrious institution that aspires to moral leadership in a culture war context. Sympathizers don't want to think the unthinkable about "the good guys." Insiders don't want to give ammunition to the "the other side." Bishops wrapped themselves in moralistic rhetoric to brush off allegations of moral turpitude; Weinstein thought he could distract from his alleged depredations by picking a fight with the NRA.

Most of all, there are the dynamics around power, money, and glory. They enable the abuse even as they prompt the coverup, since the institution and its prestige must be protected. Those around the perpetrators become accomplices, actively or passively. The system becomes self-sustaining. The more abuse, the more coverup. The more coverup, the more abuse. Everyone looks the other way because everyone looks the other way. No one will speak up because no one will speak up. Bit by bit, isolated incidents that might happen in any context metastasize into a monstrous system that feeds on itself. The guilt of a few becomes the guilt of all, as the system is sustained by its own rottenness.

If the Catholic Church, which is at least nominally committed to a grand moral vision, could fall prey to these dynamics, why should we believe that Hollywood, which at the end of the day is a for-profit industry, should be any different? Don't get me wrong: I'm absolutely sure that plenty of people in Hollywood believe in art and not profit, and sincerely hold their industry's professed humanistic values. But that's the point: The systemic dynamics are bigger than that. Even staunch anti-Catholics will concede that plenty of priests are upstanding people. We won't understand those systemic dynamics if we don't grapple with the fact that the same institution that produced Mother Teresa could produce what later churchmen called "the filth."

None of what I'm saying can be presented in a court of law. I have no smoking gun, no bombshell revelation. But nor am I hallucinating. That all the signs are there is not speculation. It is fact. We know for a fact that there are serious allegations, and that allegations about other forms of sex abuse in the same context not only turned out to be true, but much worse than we imagined. We know for a fact that some of these allegations get suspiciously ignored, and we know there is the motive and the capability for coverups. Go back to the old saw about criminal investigations: means, motive, opportunity. Check, check, check.

Children's lives are at stake. When will we as a society start seriously asking questions?

50 Years of Change Atop the Fortune 500

slantmarketing |  If you’re curious about the story of modern humanity, you’ll find few things more fascinating than the shapeshifting ways of our markets and industries, over many years and decades. These shifts reflect our whole society, our inspiration, our impulses, and our shortcomings. These shifts are us, as we make history, step by step, dollar by dollar, in good ways and in bad.

Half of Americans Account for 3% of Healthcare Costs

WaPo |  “The key takeaway message really is most people are in good health; they don’t spend a lot of money, and yet it’s important to have them be part of our insurance system. If they’re left out of the system, we’re not going to have the funds to take care of people who are very sick,” said Marc Berk, a health policy researcher and contributing editor of Health Affairs who led the analysis.

But Tom Miller, a resident fellow at the American Enterprise Institute, disagreed. He said that the study is based on quick and incomplete snapshots of health and argued that it is yet another way to divert from the health-care discussion we should be having: about how to rein in spending. Using this data to argue about where to get premium dollars from — from the pockets of the well or the sick — simply allows the system to grow ever bigger and prop up an even-more-expensive medical system.

“We all get diverted by hoping we can hide the bill under someone else’s pillow,” Miller said. “I think that’s the political argument you hear — these low spenders, we’re scared to death they might catch on to the fact they’re getting taken to the cleaners” by being forced to buy expensive health insurance they don’t need.

According to House Speaker Paul Ryan earlier this month, the inequality in spending and sickness is the “fatal conceit of Obamacare.” Ryan used a graph that showed that chronically ill people are a narrow slice of the population, but a big driver of spending.

“The whole idea of Obamacare is the people … who are healthy pay for the people who are sick; it’s not working and that’s why it’s in a death spiral,” Ryan said.

As critics have pointed out, this was part of how the Affordable Care Act was designed, and it is how insurance traditionally works. The auto insurance of people who don’t get into car crashes helps foot the bill for those who do. The premiums from homeowners who never file a claim help underwrite the insurance payouts for those whose houses burn down. It’s the same for health, and a major challenge in the exchanges, where people buy individual plans with government subsidies, has been getting enough healthy people to sign up to keep the premiums reasonable for everyone. Fist tap Dale.

How the Government Ruined Healthcare

antimedia |  Government’s meddling in the healthcare business has been disastrous from the get-go.

Since 1910, when Republican William Taft gave in to the American Medical Association’s lobbying efforts, most administrations have passed new healthcare regulations. With each new law or set of new regulations, restrictions on the healthcare market went further, until at some point in the 1980s, people began to notice the cost of healthcare had skyrocketed.

This is not an accident. It’s by design.

As regulators allowed special interests to help design policy, everything from medical education to drugs became dominated by virtual monopolies that wouldn’t have otherwise existed if not for government’s notion that intervening in people’s lives is part of their job.

But how did costs go up, and why didn’t this happen overnight?

It wasn’t until 1972 that President Richard Nixon restricted the supply of hospitals by requiring institutions to provide a certificate-of-need.

Just a couple years later, in 1974, the president also strengthened unions for hospital workers by boosting pension protections, which raise the cost for both those who run hospitals and taxpayers in cases of institutions that rely on government subsidies. This move also helped force doctors who once owned and ran their own hospitals to merge into provider monopolies. These, in turn, are often only able to keep their doors open with the help of government subsidies.

This artificial restriction on healthcare access had yet another harsh consequence: overworked doctors.

But they weren’t the first to feel the consequences hit home. As the number of hospitals and clinics became further restricted and the healthcare industry became obsessed with simple compliance, patients were the first to feel abandoned.

Weaponizing Interdependence - .45 Using Cathedral's Shunning Tactics in Trade War?

WaPo  |  “Three of the airlines that have been targeted for these measures — Emirates, Etihad Airways and Qatar Airways — have long been accused by their U.S. competitors of receiving massive effective subsidies from their governments,” wrote political scientists Henry Farrell and Abraham Newman. “These airlines have been quietly worried for months that President Trump was going to retaliate. This may be the retaliation.”

Farrell and Newman suggested Tuesday’s order is an example of the Trump administration “weaponizing interdependence” — using its leverage in a world where American airports are key “nodes” in global air travel to weaken competitors. My colleague Max Bearak detailed how this could be a part of Trump’s wider protectionist agenda. In February, President Trump met with executives of U.S. airlines and pledged that he would help them compete against foreign carriers that receive subsidies from their home governments.

“A lot of that competition is subsidized by governments, big league,” said Trump at that meeting. “I’ve heard that complaint from different people in this room. Probably about one hour after I got elected, I was inundated with calls from your industry and many other industries, because it’s a very unfair situation.”

Online Advertisers Coalesce in Response to Ad Blockers

reuters |  A broad coalition of advertising trade groups, ad buyers and sellers from Western Europe and the United States have urged the industry to stop using annoying online marketing formats that have fuelled the rapid rise of ad-blockers.

The types of ads the coalition has identified as falling below standard include pop-up advertisements, auto-play video ads with sound, flashing animated ads and full-screen ads that mask underlying content from readers or viewers.

The explosion of ad-blocking tools has launched a prolonged debate within the advertising industry over whether to rein in abusive ad practices or simply freeze out consumers who use ad blocker and still expect access to premium content.

The Coalition for Better Ads said on Wednesday it was publishing the voluntary standards after a study in which more than 25,000 web surfers and mobile phone users rated ads.

They identified six types of desktop web ads and 12 types of mobile ads as falling beneath a threshold of consumer acceptability and called on advertisers to avoid them.

Matti Littunen, research analyst at Enders Analysis focusing on digital media, said the ad formats identified by the coalition "have already been discouraged for years by these bodies and yet are still commonplace."

Forget ________Care: Medicine Itself is Badly in Need of Fixing

freakonomics |  We tend to think of medicine as a science, but for most of human history it has been scientific-ish at best. In the first episode of a three-part series, we look at the grotesque mistakes produced by centuries of trial-and-error, and ask whether the new era of evidence-based medicine is the solution.

freakonomics |  How do so many ineffective and even dangerous drugs make it to market? One reason is that clinical trials are often run on “dream patients” who aren’t representative of a larger population. On the other hand, sometimes the only thing worse than being excluded from a drug trial is being included.

freakonomics |  By some estimates, medical error is the third-leading cause of death in the U.S. How can that be? And what’s to be done? Our third and final episode in this series offers some encouraging answers.

Should Robots Pay Taxes?

guardian |  It may sound strange, but a number of prominent people have been asking this question lately. As fears about the impact of automation grow, calls for a “robot tax” are gaining momentum. Earlier this month, the European parliament considered one for the EU. Benoît Hamon, the French Socialist party presidential candidate who is often described as his country’s Bernie Sanders, has put a robot tax in his platform. Even Bill Gates recently endorsed the idea.

The proposals vary, but they share a common premise. As machines and algorithms get smarter, they’ll replace a widening share of the workforce. A robot tax could raise revenue to retrain those displaced workers, or supply them with a basic income.

The good news is that the robot apocalypse hasn’t arrived just yet. Despite a steady stream of alarming headlines about clever computers gobbling up our jobs, the economic data suggests that automation isn’t happening on a large scale. The bad news is that if it does, it will produce a level of inequality that will make present-day America look like an egalitarian utopia by comparison. 

The real threat posed by robots isn’t that they will become evil and kill us all, which is what keeps Elon Musk up at night – it’s that they will amplify economic disparities to such an extreme that life will become, quite literally, unlivable for the vast majority. A robot tax may or may not be a useful policy tool for averting this scenario. But it’s a good starting point for an important conversation. Mass automation presents a serious political problem – one that demands a serious political solution.

Globalist Plantation Economy - Why No Walmart in Russia?

washingtonsblog |  One of the themes I’ve been addressing since 2008 is the neocolonial-plantation structure of the U.S. economy. The old models of colonial exploitation that optimized plantations worked by cheap imported labor (or situated in peripheral nations with plenty of cheap labor) have, beneath the surface, been adapted to advanced capitalist democracies.

The adaptations have been so successful that not only do we not even recognize the Plantation structure–we love our servitude within it.

As noted yesterday, the current mode of production optimizes the commoditization of everything: computer chips, fish and chips, labor, expertise, everything.

This commoditization optimizes the Plantation Model of integrated production, global supply chains and distribution to global marketplaces, a hierarchical management focused on maximizing profits to send back to the owners, a ruthless focus on lowering costs via labor arbitrage (commoditize the work so it can be performed anywhere labor is cheaper/more desperate) and a fanatical desire to eliminate competition or fix prices via cartels to ensure high profits.

Global capital has optimized the Plantation Model in the form of global corporations. Wal-Mart is the quintessential example. Like a classic agricultural plantation, Wal-Mart enters a region with a diverse, employment-rich ecology of small businesses and supply chains of local and regional manufacturers and distributors, and it bulldozes the entire “forest” of businesses, suppliers and distributors with the irresistible blade of integrated global supply chains and “lower prices, always.”

 

Wal-Mart replaces the localized economy with a low-pay, highly efficient plantation economy in which the townpeople’s only choice is to work for Wal-Mart or scrape out a living feeding the Wal-Mart workers, doing their laundry, etc.–exactly as on a classic plantation.

On a classic plantation, the wages are low and the “company store” offers easy credit, binding the workers to the corporation not just for wages but for credit.

Those few who manage to save up enough capital to start small service businesses– laundry, cafes, etc.–must do so in the shadow of the Company, which can always drive them out of business should they speak against their corporate overlords.

A once-diverse landscape is reduced to a monoculture wasteland dependent on subsidies, either implicit or explicit. Wal-Mart’s low wages leave many of its workers’ families on state aid or food stamps to survive, and so it prospers on the backs of taxpayers who subsidize its low wages.

give industrial and agricultural ecosystems fossil fuels and they become unsustainably productive

NYTimes |  What, then, caused this Great Enrichment?

Not exploitation of the poor, not investment, not existing institutions, but a mere idea, which the philosopher and economist Adam Smith called “the liberal plan of equality, liberty and justice.” In a word, it was liberalism, in the free-market European sense. Give masses of ordinary people equality before the law and equality of social dignity, and leave them alone, and it turns out that they become extraordinarily creative and energetic.

The liberal idea was spawned by some happy accidents in northwestern Europe from 1517 to 1789 — namely, the four R’s: the Reformation, the Dutch Revolt, the revolutions of England and France, and the proliferation of reading. The four R’s liberated ordinary people, among them the venturing bourgeoisie. The Bourgeois Deal is, briefly, this: In the first act, let me try this or that improvement. I’ll keep the profit, thank you very much, though in the second act those pesky competitors will erode it by entering and disrupting (as Uber has done to the taxi industry). By the third act, after my betterments have spread, they will make you rich.

And they did.

You may object that ideas are a dime a dozen and that to make them fruitful we must start with adequate physical and human capital and good institutions. It’s a popular idea at the World Bank, but a mistaken one. True, we eventually need capital and institutions to embody the ideas, such as a marble building with central heating and cooling to house the Supreme Court. But the intermediate and dependent causes like capital and institutions have not been the root cause.

The root cause of enrichment was and is the liberal idea, spawning the university, the railway, the high-rise, the internet and, most important, our liberties. What original accumulation of capital inflamed the minds of William Lloyd Garrison and Sojourner Truth? What institutions, except the recent liberal ones of university education and uncensored book publishing, caused feminism or the antiwar movement? Since Karl Marx, we have made a habit of seeking material causes for human progress. But the modern world came from treating more and more people with respect.

Ideas are not all sweet, of course. Fascism, racism, eugenics and nationalism are ideas with alarming recent popularity. But sweet practical ideas for profitable technologies and institutions, and the liberal idea that allowed ordinary people for the first time to have a go, caused the Great Enrichment. We need to inspirit masses of people, not the elite, who are plenty inspirited already. Equality before the law and equality of social dignity are still the root of economic, as well as spiritual, flourishing — whatever tyrants may think to the contrary.

when bartenders and short-order cooks can't support the shopping malls we provided for them...,

dailyimpact |  It’s a picture that’s worth a thousand choruses of “Don’t Worry, Be Happy.” Here in the Seventh Straight Successful Year of the Recovery from the Great Recession, tucked into a corner of the Arizona Desert, is a line of parked Union Pacific locomotives. It was discovered on Google Earth, so it is, as they say, visible from space. There are 292 of them, baking in the sun like so many dinosaur skeletons, in a line stretching almost five miles. They, and the people who used to run them, are now “excess capacity” for one of the country’s largest freight haulers. In this, the Seventh Straight Successful Year of the Great Recovery.

No one should be surprised. But even when you know that trade — the buying and selling of stuff — has been slowing down all over the world for years, it is startling to see such stark, graphic evidence that we are all in deep trouble.

billingsgazette | GILLETTE — Burlington Northern Santa Fe Railroad officials say they are keeping about 150 locomotives and rail engines stored near Gillette because of decreased demand.

BNSF spokesman Matt Jones said the rail engines and two sets of box cars remain at the railroad's yard in the Donkey Creek area because of a downturn in rail shipping.

The problems can be attributed to the decline in the coal sector. The passage of the federal Clean Power Plan has pushed power plants away from coal and toward natural gas.

The impact can be seen in the Powder River Basin, as nearby coal companies Alpha Natural Resources and Arch Coal have filed for bankruptcy.

Jones said the declining demand for transportation has hit several sectors, not just coal.

inforum |  FARGO - An economic downturn involving a variety of commodities across various parts of the United States has resulted in BNSF Railway parking about 45 of its train locomotives at the railroad’s train yard just off 12th Avenue North west of the North Dakota State University campus.

“Customers’ volumes across a broad spectrum of commodities have come down somewhat from their prior estimates,” said Amy McBeth, a spokeswoman for BNSF. “As a result, we are strategically storing locomotives in some yard locations across our network.”

McBeth said the locomotives will remain stored until traffic volumes warrant returning them to service.

Quarterly profits for Forth Worth-based BNSF, which is owned by Berkshire Hathaway, fell 25 percent in the first quarter of 2016.

The railroad has been cutting staff in the wake of a changing economic environment that includes low energy prices, the strong dollar and other factors, McBeth said.

“Nationwide, while petroleum products volumes are down, coal is down, too, as are a number of other commodities,” she added.

 

newsok |  BNSF Railway has parked dozens of its locomotives at a storage yard north of downtown Oklahoma City over the past several weeks as slowing traffic demand has left the units idle.

The engines parked along the east side of Interstate 235 north of NW 23 are from BNSF trains throughout the country, company spokesman Joe Sloan said.

"We have a reduced amount of freight traffic now, and that storage point was available," he said.

Sloan said there is no timeline as to when the locomotives are expected back on the rails.

the steady collapse of the steel economy

aljazeera |  Steel is found everywhere from bridges to sinks, but the global steel industry is going through the worst downturn in 50 years.

An unbalanced supply and demand equation has left even China, the world's largest producer and consumer of steel, calling for global cooperation to try and tackle the industry's problems.

But while China is calling for cooperation, many blame China's steel mills for flooding the market with cheap supply.

Over in the UK, Tata Steel, an Indian company, put its entire business up for sale, blaming cheap Chinese imports for its decision.

The UK boasts the world's oldest steel industry and Port Talbot in south Wales is home to Britain's largest steel plant.

With the UK steel industry on the verge of collapse, we see how tens of thousands of jobs are at risk with the imminent closure, or at least significant downsizing, of the Port Talbot steelworks, which has already been on the decline for decades. 

Although many blame the cheap steel making its way from China, others are also say the UK government has not offered the steel industry enough protection to help it stay competitive.

Steelmakers in China are also suffering. When China outlined its latest five year plan it said that job cuts in the steel sector were likely.

In China, we see how job losses in the steel industry have become more commonplace. With the economy growing at its slowest pace in 25 years and steel mills producing at overcapacity with the lack of demand for raw materials, China has been exporting steel at low prices. Economists say, however, this is only a short-term solution and companies will need to restructure to be efficient.