Pakistanis Fear the U.S., Too

NYTimes | A redrawn map of South Asia has been making the rounds among Pakistani elites. It shows their country truncated, reduced to an elongated sliver of land with the big bulk of India to the east, and an enlarged Afghanistan to the west.

That the map was first circulated as a theoretical exercise in some American neoconservative circles matters little here. It has fueled a belief among Pakistanis, including members of the armed forces, that what the United States really wants is the breakup of Pakistan, the only Muslim country with nuclear arms.

“One of the biggest fears of the Pakistani military planners is the collaboration between India and Afghanistan to destroy Pakistan,” said a senior Pakistani government official involved in strategic planning, who insisted on anonymity as per diplomatic custom. “Some people feel the United States is colluding in this.”

That notion may strike Americans as strange coming from an ally of 50 years. But as the incoming Obama administration tries to coax greater cooperation from Pakistan in the fight against militancy, it can hardly be ignored.

This is a country where years of weak governance have left ample room for conspiracy theories of every kind. But like much such thinking anywhere, what is said frequently reveals the tender spots of a nation’s psyche. Educated Pakistanis sometimes say that they are paranoid, but add that they believe they have good reason.

Pakistan, a 61-year-old country marbled by ethnic fault lines, is a collection of just four provinces, which often seem to have little in common. Virtually every one of its borders, drawn almost arbitrarily in the last gasps of the British Empire, is disputed with its neighbors, not least Pakistan’s bitter and much larger rival, India.

These facts and the insecurities that flow from them inform many of Pakistan’s disagreements with the United States, including differences over the need to rein in militancy in the form of Al Qaeda and the Taliban.

Flux in the BRIC

NYTimes | “Russia’s elites, including President Medvedev, look on China’s rising diplomatic and economic successes in Latin America and in Africa with envy,” said Stephen Kotkin, the director of Russia studies at Princeton University. “They also perceive an opportunity, much exaggerated, to send the U.S. a message in its supposed backyard.”

But Mr. Medvedev faces a hard sell in the region. In Cuba there are lingering suspicions over Russian intentions, as the Cuban economy collapsed when the Soviets withdrew in the 1990s, as well as a reluctance to alienate an incoming Obama administration that might push to end the trade embargo.

Brazil, Latin America’s largest country, which also places a high priority on relations with an Obama administration, wants to engage Russia not as a source of weapons or military assistance, but as an equal partner.

“We are not interested in buying defense products off the shelf,” said Roberto Mangabeira Unger, Brazil’s minister of strategic affairs and the architect of a new military strategy set to be officially unveiled in December.

“Unlike other South American countries we don’t go around buying things, and we are not interested in some kind of balance-of-power politics to contain the United States,” said Mr. Mangabeira Unger, a former Harvard law professor who taught Mr. Obama when he was at Harvard Law School. “We have friendly relations with the United States, and with the incoming administration intend to make them even more friendly.”

By contrast in Venezuela, itself battered by falling oil prices, Mr. Medvedev can expect a warm welcome. President Hugo Chávez has long sought closer ties, traveling to Russia seven times and forging deals to buy more than $4 billion in arms. Until recently, however, Russia showed little interest in expanding ties with Venezuela beyond weapons sales and a handful of energy deals.

The Pakistan Test

NYTimes | While there are no easy solutions for the interlinked catastrophes unfolding in Pakistan and Afghanistan, there are several useful steps that we in the West can take to reduce the risk of the region turning into the next Somalia.

First, we should slow the financial flow to Pakistan’s government and military. If the government wants to stop the Talibanization of Pakistan, its greatest need isn’t money but the political will to stop sheltering Taliban leaders in the city of Quetta.

Second, we should cut tariffs on Pakistani agricultural and manufactured products to boost the economy and provide jobs. We should also support China on its planned export-processing zone to create manufacturing jobs in Pakistan.

Third, we should push much harder for a peace deal in Kashmir — including far more pressure on India — because Kashmir grievances empower Pakistani militants.

Fourth, let’s focus on education. One reason the country is such a mess today is that half of all Pakistanis are illiterate.

Pennyland - Echoes of the Great Depression

Up from the comments, a poignant movie by Frank Thomas inspired by "Pennyland" a song written by his brother, Eddie Thomas featuring Depression Era photographs from the Library of Congress and audio excerpts from Franklin D. Roosevelt's 1933 inaugural address. Thanks for stopping by Frank.

World's Biggest Loser.....,

Shape of Things to Come?

John Maynard Keynes had the answer to the crisis we’re now facing; but it was blocked and then forgotten. Poor old Lord Keynes. The world’s press has spent the past week blackening his name. Not intentionally: most of the dunderheads reporting the G20 summit which took place over the weekend really do believe that he proposed and founded the International Monetary Fund. It’s one of those stories that passes unchecked from one journalist to another.

The truth is more interesting. At the Bretton Woods conference in 1944, John Maynard Keynes put forward a much better idea. After it was thrown out, Geoffrey Crowther - then the editor of the Economist magazine - warned that “Lord Keynes was right … the world will bitterly regret the fact that his arguments were rejected.”(1) But the world does not regret it, for almost everyone - the Economist included - has forgotten what he proposed.

He proposed a global bank, which he called the International Clearing Union. The bank would issue its own currency - the bancor - which was exchangeable with national currencies at fixed rates of exchange. The bancor would become the unit of account between nations, which means it would be used to measure a country’s trade deficit or trade surplus.

By George Monbiot. Published in the Guardian 18th November 2008

The Real Great Depression

Comes now my man RC spitting lost historical knowledge from the Chronicle of Higher Education. You should read the article in full. The depression of 1929 is the wrong model for the current economic crisis;

the current economic woes look a lot like what my 96-year-old grandmother still calls "the real Great Depression." She pinched pennies in the 1930s, but she says that times were not nearly so bad as the depression her grandparents went through. That crash came in 1873 and lasted more than four years. It looks much more like our current crisis.

The problems had emerged around 1870, starting in Europe. In the Austro-Hungarian Empire, formed in 1867, in the states unified by Prussia into the German empire, and in France, the emperors supported a flowering of new lending institutions that issued mortgages for municipal and residential construction, especially in the capitals of Vienna, Berlin, and Paris. Mortgages were easier to obtain than before, and a building boom commenced. Land values seemed to climb and climb; borrowers ravenously assumed more and more credit, using unbuilt or half-built houses as collateral. The most marvelous spots for sightseers in the three cities today are the magisterial buildings erected in the so-called founder period.

If there are lessons from 1873, they are different from those of 1929. Most important, when banks fall on Wall Street, they stop all the traffic on Main Street — for a very long time. The protracted reconstruction of banks in the United States and Europe created widespread unemployment. Unions (previously illegal in much of the world) flourished but were then destroyed by corporate institutions that learned to operate on the edge of the law. In Europe, politicians found their scapegoats in Jews, on the fringes of the economy. (Americans, on the other hand, mostly blamed themselves; many began to embrace what would later be called fundamentalist religion.)

The post-panic winners, even after the bailout, might be those firms — financial and otherwise — that have substantial cash reserves. A widespread consolidation of industries may be on the horizon, along with a nationalistic response of high tariff barriers, a decline in international trade, and scapegoating of immigrant competitors for scarce jobs. The failure in July of the World Trade Organization talks begun in Doha seven years ago suggests a new wave of protectionism may be on the way.

Every day you learn something new is a good day indeed.

Tom Terrific

Culture Change | Tom Friedman has convinced a vast swath of otherwise intelligent and well-educated Americans that he's a visionary. I propose this is so because he channels the thought patterns and emotional currents at the core of American conventional wisdom: economic growth and unrestrained technological progress are the natural state of the world -- with the stipulation that America must, naturally, lead the way. Friedman's greatest skill is catchy -- and often oddly phrased -- simplifications promoting our collective identity as the Exceptional Nation. Recently he, as we say in another context about petroleum, reached peak Friedman.

Before getting to that I note that Friedman's modus operandi is to tirelessly see “opportunity” in crisis. He ridicules those who see threats as lacking insight, entrepreneurial spirit, and innovative thinking. To do this, Friedman operates much like the fifties cartoon character Tom Terrific, who possesses a magical thinking cap that transports him out of any jam in which he finds himself. For example, Friedman is waiting for an entrepreneur in a garage to invent the next energy platform -- who cares about finite fossil fuels when the next Steve Jobs is all we really need? In fact, he recently suggested that Jobs -- because he’s invented the iPod -- could rescue the Big-Three automakers. It's that simple; take it from Tom Terrific.

Much to Friedman's displeasure, however, financial, economic, and ecological realities (the latter of which he appears to be totally unaware) are undermining his belief that nature can be dominated by human ingenuity. These intertwined crises will, I suspect, elicit all manner of Tom Terrific articles from Friedman in the coming months; this will indicate, for an undetermined time, the undulating plateau of peak Friedman.

America the Illiterate

TruthDig | In our post-literate world, because ideas are inaccessible, there is a need for constant stimulus. News, political debate, theater, art and books are judged not on the power of their ideas but on their ability to entertain. Cultural products that force us to examine ourselves and our society are condemned as elitist and impenetrable. Hannah Arendt warned that the marketization of culture leads to its degradation, that this marketization creates a new celebrity class of intellectuals who, although well read and informed themselves, see their role in society as persuading the masses that “Hamlet” can be as entertaining as “The Lion King” and perhaps as educational. “Culture,” she wrote, “is being destroyed in order to yield entertainment.”

“There are many great authors of the past who have survived centuries of oblivion and neglect,” Arendt wrote, “but it is still an open question whether they will be able to survive an entertaining version of what they have to say.”

The change from a print-based to an image-based society has transformed our nation. Huge segments of our population, especially those who live in the embrace of the Christian right and the consumer culture, are completely unmoored from reality. They lack the capacity to search for truth and cope rationally with our mounting social and economic ills. They seek clarity, entertainment and order. They are willing to use force to impose this clarity on others, especially those who do not speak as they speak and think as they think. All the traditional tools of democracies, including dispassionate scientific and historical truth, facts, news and rational debate, are useless instruments in a world that lacks the capacity to use them.

As we descend into a devastating economic crisis, one that Barack Obama cannot halt, there will be tens of millions of Americans who will be ruthlessly thrust aside. As their houses are foreclosed, as their jobs are lost, as they are forced to declare bankruptcy and watch their communities collapse, they will retreat even further into irrational fantasy. They will be led toward glittering and self-destructive illusions by our modern Pied Pipers—our corporate advertisers, our charlatan preachers, our television news celebrities, our self-help gurus, our entertainment industry and our political demagogues—who will offer increasingly absurd forms of escapism.

Question of the Week - No. 1

Who do you know and what do you know (institutions, systems, companies, things) that will thrive during the pending period of national and global Greatest Economic Depression?

everything after that is really just conversation, but in the interest of engaging repartee,

please state who or what you know of that you believe will not only survive, but thrive during the pending Greatest Economic Depression?

Hat tip to Mahndisa for making me think about water efficiency, free markets, fremen warriors , and alternative currency systems.

Hat tip to Ed Dunn for writing at length about what's around that signpost up ahead, what you need to be thinking about and doing to get ready for it, and keeping it all extra trill, practical, and very humorous.

Moore’s Curse and the Great Energy Delusion

The American | Our transition away from fossil fuels will take decades—if it happens at all. During the early 1970s we were told by the promoters of nuclear energy that by the year 2000 America’s coal-based electricity generation plants would be relics of the past and that all electricity would come from nuclear fission. What’s more, we were told that the first generation fission reactors would by then be on their way out, replaced by super-efficient breeder reactors that would produce more fuel than they were initially charged with.

During the early 1980s some aficionados of small-scale, distributed, “soft” (today’s “green”) energies saw America of the first decade of the 21st century drawing 30 percent to 50 percent of its energy use from renewables (solar,wind, biofuels). For the past three decades we have been told how natural gas will become the most important source of modern energy: widely cited forecasts of the early 1980s had the world deriving half of its energy from natural gas by 2000. And a decade ago the promoters of fuel cell cars were telling us that such vehicles would by now be on the road in large numbers, well on their way to displacing ancient and inefficient internal combustion engines.

These are the realities of 2008: coal-fired power plants produce half of all U.S. electricity, nuclear stations 20 percent, and there is not a single commercial breeder reactor operating anywhere in the world; in 2007 the United States derives about 1.7 percent of its energy from new renewable conversions (corn-based ethanol, wind, photovoltaic solar, geothermal); natural gas supplies about 24 percent of the world’s commercial energy—less than half the share predicted in the early 1980s and still less than coal with nearly 29 percent; and there are no fuel-cell cars.

This list of contrasts could be greatly extended, but the point is made: all of these forecasts and anticipations failed miserably because their authors and promoters ignored one of the most important realities ruling the behavior of complex energy systems—the inherently slow pace of energy transitions.

Chinese Automakers May Buy GM and Chrysler

Truth About Cars | Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China’s 21st Century Business Herald reports today. [A National Enquirer the paper is not. It is one of China's leading business newspapers, with a daily readership over three million.] The paper cites a senior official of China’s Ministry of Industry and Information Technology– the state regulator of China’s auto industry– who dropped the hint that “the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.” These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the go-ahead to invest abroad. And why would they do that?

A take-over of a large overseas auto maker would fit perfectly into China’s plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he’s in deep trouble.

At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China’s more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world’s markets with accepted brands, and proven technology.

21st Century Business Herald, obviously with input from higher-up, writes that Chinese industry must change and upgrade. China wants their factories to change from low-value-added manufacturing to technically innovative and financially-sound high-value-add industries. Says the paper: “It would be much easier now for strong Chinese automakers to go global by acquiring some assets of their U.S. counterparts in times of crisis.”

Let Detroit Go Bankrupt

NYTimes | IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.

The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.

In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.

A Sea of Unwanted Imports

NYTimes | LONG BEACH, Calif. — Gleaming new Mercedes cars roll one by one out of a huge container ship here and onto a pier. Ordinarily the cars would be loaded on trucks within hours, destined for dealerships around the country. But these are not ordinary times.

For now, the port itself is the destination. Unwelcome by dealers and buyers, thousands of cars worth tens of millions of dollars are being warehoused on increasingly crowded port property.

And for the first time, Mercedes-Benz, Toyota, and Nissan have each asked to lease space from the port for these orphan vehicles. They are turning dozens of acres of the nation’s second-largest container port into a parking lot, creating a vivid picture of a paralyzed auto business and an economy in peril.

“This is one way to look at the economy,” Art Wong, a spokesman for the port, said of the cars. “And it scares you to death.”

Indian Warship Shells Pirates

MOGADISHU (AFP) - An Indian warship opened fire at a Somali pirate "mother ship", the navy said Wednesday, as bandits demanded a ransom for a Saudi super-tanker seized in the most daring sea raid yet.

The Indian frigate INS Tabar, one of dozens of warships from several countries protecting shipping lanes in the Gulf of Aden, attacked the pirate ship late Tuesday after coming under fire, navy spokesman Nirad Sinha said.

The incident came as shipping groups reported a new surge in hijackings off Somalia and the International Maritime Bureau said pirates based in the lawless African nation were now "out of control".

"The INS Tabar closed in on the mother vessel and asked her to stop for investigation," the New Delhi navy spokesman said.

"But on repeated calls, the vessel's threatening response was that she would blow up the naval warship" if it approached," he added.

"The vessel... subsequently fired on the INS Tabar, and the warship retaliated in self defence," he said. "Explosions were heard, possibly due to exploding ammunition that was stored on the vessel."

Pirates had been on the upper deck of the vessel with automatic weapons and rocket-propelled grenade launchers, he said.

The piracy crisis has grown since the capture of Saudi super-tanker the Sirius Star on Saturday. The huge vessel was carrying a full load of two million barrels of oil worth an estimated 100 million dollars.

Prophesy of economic collapse 'coming true'

NewScientist | In 1972, the seminal book Limits to Growth by a group called the Club of Rome claimed that exponential growth would eventually lead to economic and environmental collapse.

The group used computer models that assessed the interaction of rising populations, pollution, industrial production, resource consumption and food production.

Most economists rubbished the book and its recommendations have been ignored by governments, although a growing band of experts today continues to argue that we need to reshape our economy to become more sustainable.

Now Graham Turner at theCommonwealth Scientific and Industrial Research Organisation (CSIRO) in Australia has compared the book's predictions with data from the intervening years.

Changes in industrial production, food production and pollution are all in line with the book's predictions of collapse in the 21st century, says Turner. According to the book, the path we have taken will cause decreasing resource availability and an escalating cost of extraction that triggers a slowdown of industry, which eventually results in economic collapse some time after 2020.

"For the first 30 years of the model, the world has been tracking along an unsustainable trajectory," he says.

According to Herman Daly of the University of Maryland, Turner's results show that we "must get off the growth path of business as usual, and move to a steady state economy," stopping population growth, resource depletion, and pollution.

Yet Turner reckons his report [pdf format] shows that a sustainable economy is attainable. "We wouldn't have to go back to the caves," he says.

The Failed G-20 Summit

CounterPunch | As expected, the G-20 Economic Summit in Washington turned out to be a total bust. None of the problems which have pushed the global economy to the brink of disaster were resolved and none of the main players who gamed the system with their toxic securities was held accountable. Instead, the visiting dignitaries settled on a toothless "Statement on Financial Markets" which accomplished absolutely nothing. The one noteworthy clause in the entire document is a two paragraph indictment of the United States as the perpetrator of the financial crisis. At least they got that right.

The world doesn't need a new Breton Woods or a new world order; it needs a competing vision of global finance. One that will put an end to dollar tyranny, superpower politics and "beggar thy neighbor" economic policies. A system that strengthens national sovereignty, cooperation, and international law. That's what the G 20 should have been talking about, instead of wasting their time trying to prop up a system that's rotten to the core.

Bankers Shake Down Congress and the G-20

CounterPunch | Here’s the problem that faced global finance ministers this weekend: The U.S. payments deficit has been pumping excess dollars into foreign economies, whose recipients have turned them over to their central banks. These central banks have saved their currencies from rising (and thus losing foreign markets by making their exports more expensive) by buying Treasury bonds so as to support the dollar’s exchange rate by recycling their dollar inflows back to the United States – enough to finance most of our federal budget deficit, and indeed much of Fannie Mae’s mortgage lending as well.

Mr. Bush for his part would like to shape the global financial system so that foreign economies continue giving the United States a free lunch. U.S. officials control the International Monetary Fund and World Bank and use these institutions to impose neoliberal privatization policies on foreign countries, thereby destroying the post-Soviet economies, Australia and New Zealand since the 1990s, just as they destroyed Third World economies from the 1960s through the ’80s. That’s why, until last month, the IMF had lost its clients and was almost universally shunned. French President Nicolas Sarkozy led foreign calls for a “new Bretton Woods,” by which he meant not just an upgrading of U.S. dollar hegemony but a different world order – more regulated with a fairer quid pro quo. And as the Financial Times reported: “Spain’s governing Socialist party summed up the heady mood in some parts of Europe in an internal document, seen by El Mundo, that identified the summit as a moment of historic change. ‘The origins of this crisis lie in neoliberal and neoconservative ideology,’ it said.”

Mr. Paulson and other U.S. officials have long been promising foreign finance ministers that Fannie Mae and Freddie Mac securities are as good as U.S. Treasury bonds while yielding higher interest. The resulting investment in these two mortgage-packaging agencies was a major factor in their $200 billion bailout. Letting their securities go under would have ended Dollar Hegemony for good. So getting foreign acquiescence in financing future U.S. balance-of-payments deficit is inextricably bound up with how to resolve the U.S. financial and real estate bubble.

Ron Paul on the G-20 Summit

The dollar system is coming to an end. The summit was about internationalization of the Central Bank and replacement of the dollar standard. No new system was devised and the dollar is under very serious assault. Meanwhile, the world economy will get much, much worse. Political danger, economic danger, and runaway inflation are just around that signpost up ahead.

The Crisis Has Hardly Begun

CounterPunch | Wow! The entire country is steamed up over the Republicans bailing out a bunch of financial crooks who have paid themselves fortunes in bonuses for destroying America’s pensions. Why do Democrats want to protect Republicans from further ignominy by not giving them the opportunity to vote down a bailout for workers? Quick, someone enroll the Democratic Party in Politics 101.

GM’s divisions in Canada and Germany are asking those governments for help. It will be something if Canada and Germany come through for the American automaker and the American government doesn’t.

Conservative talking heads are saying GM is a “failed business model” unworthy of a $25 billion bailout. These are the same talking heads who favored pouring $700 billion into a failed financial model.

The head of the FDIC is trying to get $25 billion--a measly 3.5 percent of the $700 billion for the banksters--with which to refinance the mortgages of 2 million of the banksters’ victims, and Bush’s Secretary of the Treasury Paulson says no. Why aren’t the Democrats all over this, too?

Apparently, the Democrats still think they are the minority party or else their aim is to supplant the Republicans as the party of the rich.

Any bailout has its downsides. But if America loses its auto industry, it will lose the suppliers as well and will cease to have a manufacturing sector. For years no-think economists have been writing off America’s manufacturing jobs, while deluding themselves and the public with propaganda about a New Economy based on finance.

A country that doesn’t make anything doesn’t need a financial sector as there is nothing to finance.

Rebooting Davos Man?

The Economist | The global system “needs a fundamental reboot”. That was the clearest conclusion from the 700 or so Davos Men and Women gathered in Dubai between November 7th and 9th by the World Economic Forum (WEF) to discuss how to lead the world out of its current crisis. This computing analogy immediately inspired a series of pointed jokes: “Before you reboot, make sure the operating system works”; “First, make sure the power is switched on”, and (to the loudest laughter) “Let’s hope we don’t end up with another version of Windows.” Indeed.

Compared with the partying and skiing that accompanies the talking at Davos, this gathering was serious and sober, literally (alcohol not being served, out of respect for the city-state’s Muslim government, which played host to the conference). “I had people patrolling the beach,” on guard against dignitaries sunbathing, “and I couldn’t find anyone,” said the WEF’s founder, Klaus Schwab, probably in jest.
Reuters

Everyone agreed that the global crisis, of which the financial system’s meltdown is currently the public face (though fuel and food are also important parts), is the most severe in at least a generation, and could certainly get much worse before it gets better. A deep recession is regarded as inevitable. “Could finance be a model for other areas in the sense that no one saw the actual crisis coming?” asked one speaker. “How long before the world is hit by a pandemic?” asked another.

Opinions were somewhat divided about who has the authority to solve the crisis. “This is the same elite that caused the problem, not the group to find the solution”, observed one brave speaker. “There is no leader in the world who can pull this together,” said another. A third speaker rallied the majority, however, by asking, “If not us, who?”

Already, a new lexicon is emerging for the rebooting phase. This is a “leadership moment”. Global co-ordinated action is needed. The unthinkable must be thought. Business as usual is no longer an option. What is needed is “restorative innovation.” Solutions should be the result of multi-stakeholder engagement, with everyone having a seat at the table. Risks must be better measured, and better managed. Solutions should be transformational, and sustainable. “Silos” are bad. Thinking holistically, connectedly, outside of our silos, is essential.

Clearing Out Managerial Dead Wood...,

NYTimes | The failure of one or more of Detroit’s Big Three automakers would put a huge initial dent in American manufacturing, but in time foreign car companies would pick up the slack by stepping up production in their plants here, many industry experts and economists say.

Whether Washington should let that play out — risking hundreds of thousands of jobs — is a central question Congress will weigh this week as it hears testimony from Detroit leaders who are pushing for immediate federal intervention, before the next administration takes over in January.

“Barack Obama has made it clear he understands the importance of the industry. The question is, do we get that far?” Ron Gettelfinger, head of the United Auto Workers, said in an interview Friday, raising the prospect of a General Motors bankruptcy. “At this juncture, we are in a crisis that could have a major negative impact on this country.”

But many industry experts say the big foreign makers are established enough to take control of the industry and its vast supplier network more quickly than is widely understood.

“You would have an auto industry in the United States more like that of Mexico and Canada: foreign-owned,” said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich., which describes itself as a nonprofit organization that has “strong relationships with industry, government agencies, universities, research institutes, labor organizations” and other groups with an interest in the auto business.

Obamismo

Newsweek | The use and abuse of Obama as a metaphor for dramatic racial and social change is suddenly so widespread, it may become a verb. Conservative Party Leader David Cameron and Labour Prime Minister Gordon Brown have bickered about their ability to Obama the U.K., with Cameron embracing the slogan of change and Brown espousing liberalism. In France, President Nicolas Sarkozy openly compares himself—the right-wing son of an aristocratic Hungarian immigrant—to the American son of a Kenyan father.

"God save us from Obamismo, that new religion that has flooded our earthly temples with such exaltation that it threatens to become a cosmic plague," wrote columnist Pilar Rahola in the Barcelona daily La Vanguardia, deriding Obama, ironically, as "a kind of messiah." Israeli columnist Sever Plocker dubbed him "Mr. Universe": the man who is all things to all people, and to whom the whole world is looking for leadership.

Yet amid the euphoria and the excess, it is increasingly clear that Obama is, in fact, the unique product of a unique moment in America's history, a figure almost impossible to replicate or even emulate in any other country. In the United States itself, it took both the worst crisis and perhaps the best-organized campaign in a century to break the color barrier, and generations may pass before American voters choose another black man, or a Latino or Asian or Jew, to be president.

Oppositional Culture.....,

NYTimes | The trouble is far more fundamental than that. The G.O.P. ran out of steam and ideas well before George W. Bush took office and Tom DeLay ran amok, and it is now more representative of 20th-century South Africa during apartheid than 21st-century America. The proof is in the vanilla pudding. When David Letterman said that the 10 G.O.P. presidential candidates at an early debate looked like “guys waiting to tee off at a restricted country club,” he was the first to correctly call the election.

On Nov. 4, that’s roughly the sole constituency that remained loyal to the party — minus its wealthiest slice, a previously solid G.O.P. stronghold that turned blue this year (in a whopping swing of 34 percentage points). The Republicans lost every region of the country by double digits except the South, which they won by less than double digits (9 points). They took the South only because McCain, who ran roughly even with Obama among whites in every other region, won Southern whites by 38 percentage points.

Those occasional counties that tilted more Republican in 2008 tended to be not only the least diverse, but also the most rural, least educated and slowest-growing in population. McCain-Palin did score a landslide among white evangelical Christians, though even in that demographic Obama shaved the G.O.P. margin by seven percentage points from 2004.

The Republicans did this to themselves, yet a convenient amnesia can be found in conservatives’ post-Election Day soul searching. There’s endless hand-wringing about Bush and McCain blunders and Abramoff-Stevens corruption, but there’s barely any mention of the nasty cultural brawls that defined the G.O.P. campaign narrative this year as the party clung bitterly once more to its 40-year-old “Southern strategy.”

'Spending . . . Is How We Fill Our Time'

Washington Post | In "Going Broke: Why Americans Can't Hold On to Their Money," psychologist Stuart Vyse analyzes the economic mess we're in, and what it is about our brains' inner workings that puts us there.

-- Monica Hesse

So, how did we get in this housing crisis/perilous tailspin situation? Psychologically speaking?

Basically it comes down to a simple sense of overconfidence about the future, which is inherent in our nature. . . . Especially in the realm of mortgages. You have a big company offering you an enormous amount of money, and they say, "You qualify." There's a psychological process where, if [that happens], you think, well, they must think I'm good for it.

Why don't we Just. Stop. Spending?

Because we live in a country where it's patriotic to spend, where our economy depends on spending. . . . It's a habit, it's what we do for entertainment, it's how we fill our time.

Why is this coming to a head now? Is human nature different than it used to be?

The marketplace has invaded our lives in quite a different way than it did 30 years ago. In that earlier period, when you were home, you were out of the marketplace. Today, I could buy a car without getting out of this chair or off this phone. When a purchase comes to mind, you must struggle with the fact that you could have it right away.

You'd think all that choice would make consumers happy.

In fact, we live in a world where there are too many choices. When the dazzling must-have item appears, be it an iPod or an iPhone, if you have a credit card in your pocket, then you're churning inside with whether or not you should pull out the card and walk out with the item. That creates the stress of, Can I justify this? Will this be okay? Will the future work out if I do this? In many cases, the person who has no credit card, no ability to buy at all, is freer.

Shipping: Holed beneath the waterline

UK Independent | Hold on to your hat: the Baltic Dry Index was down at 826 points yesterday, (actually 841 - this article's a week old - the trend is what matters) a shattering drop from its high of 11,793 in May.

The index, which tracks the price of shipping bulk cargo, might not sound like a reason to choke on your cornflakes. But it is an unparalleled, if subtle, barometer of the global trade in economic building blocks like iron ore, coal and grain – and it is telling a worrying tale.

Put simply, the cost of shipping has dropped through the floor. Sending a tonne of iron ore from Brazil to China in early June would have set you back more than $100 (£62) per tonne, or around $15m per voyage. But freight rates have now dropped to only slightly over $10 per tonne, or just $1.5m for the 70-90 day journey.

As if that wasn't dramatic enough, the drop in daily charter rates is even sharper. At the peak of the market, a 170,000-tonne Capesize bulk carrier was hired out at the eye-watering daily rate of $234,000. At the beginning of this week, it was $5,611 – a fall of nearly 98 per cent.

Peter Kerr-Dineen, chairman of Howe Robinson shipbrokers, said: "The scale of change in rate is utterly staggering – the market has come down from super-boom territory to pretty close to bust, effectively in two months."

Contracting demand for imports inrecession-wary economies across the world is a factor, as are steadily falling commodity prices and the mechanics of supply and demand in the shipping industry itself. But the real trouble is less obvious, largely unprecedented, and potentially devastating.

The wheels of international shipping are greased with "letters of credit"issued to buyers of bulk cargo by their banks. These guarantee the value of the shipment once it is in transit but before it is delivered. The problem is that the credit crunch, with the resulting liquidity problems in the international banking sector, is taking its toll on the availability of these entirelyroutine instruments. "We have the hugely worrying and unprecedented development where there are perfectly creditworthy shippers and receivers unable to open perfectly standardletters of credit," Mr Kerr-Dineen said.

Cargos are sitting on docksidesbecause the finance is not available to ship them, with the gravest implications for the future. "This is a nuclear bomb in the freight market, and in world trade," Mr Kerr-Dineen said. "Liquidity has to return because if there isinsufficient money to provide standard finance, world trade will be sharply cut back and economic growth willimplode."

IMF Agrees to $7.6 Billion Loan to Pakistan

Washington Post | Pakistan reached an agreement in principle with the International Monetary Fund on a $7.6 billion loan package aimed at preventing the nation from defaulting on foreign debt and restoring investor confidence.

The loan "will be used for the balance of payments and to build our foreign reserves," Shaukat Tarin, the de facto finance minister, said Saturday at a televised news conference in Karachi.

Pakistan, a center in the war on terrorism, has been forced to seek IMF assistance after its foreign-exchange reserves shrank 75 percent in the past year, to $3.5 billion last week, the equivalent of one month's imports, and a group of donor nations declined to provide funds. Hungary, Iceland and Ukraine also have negotiated IMF packages in recent weeks as the global economic crisis has radiated beyond the financial sector.

"The IMF didn't give us any conditions different from our economic stabilization program," Tarin said. "The IMF counseled us to increase the key interest rate to curb inflation."

Killing them Softly.....,

Washington Times | A West Virginia man whose son survived the battlefields of Iraq only to die in his sleep at home is crusading to find other military families whose loved ones also have died after taking drugs prescribed for post-traumatic stress disorder (PTSD).

Stan White's son Andrew, who was found dead in bed at the family's Cross Lanes, W.Va., home on Feb. 12, 2007, is one among a cluster of young veterans in the state who have died in their sleep with little explanation. Now Mr. White wants the federal government to monitor the drugs it prescribes to some 375,000 soldiers who have been diagnosed with mental trauma.

Shirley White of Cross Lanes, Andrew's mother, says she and her husband want an investigation into the medications prescribed to their son and other veterans who died.

So far, he has identified nine veterans across the country - including four in West Virginia - who have died in their sleep after taking antidepressant and antipsychotic medications.

Mr. White has met with members of Congress and asked for Capitol Hill hearings to investigate the deaths. His research prompted a Department of Veterans Affairs (VA) investigation into Andrew's and one other death, which were found to have been caused by "combined drug intoxication." But the investigation could not determine whether the prescribed medications were at fault.

The End of the Experts?

NYTimesSE | The sudden outbreak of peace in Iraq has made me realize, among other things, one incontestable fact: I have no business holding a pen, at least with intent to write. I know, you’re thinking I’m going too far. I haven’t always been wrong about everything. I recently made some sense on global warming and what we needed to do about it, for instance.

But to have been so completely and fundamentally wrong about so huge a disaster as what we have done to Iraq — and ourselves — is outrageous enough to prove that people like me have no business posing as wise men, and, more importantly, that The New York Times has no business continuing to provide me with a national platform.

In any case, I have made a decision: as of today, I will no longer write in this or any other newspaper. I will immediately desist from writing any more books about how it’s time for everyone to climb on board the globalization high-speed monorail to the future. I will keep my opinions to myself. (My wife suggested that I try not to even form opinions, but I think she might have another agenda.)

Baffled? I don’t blame you. So I’ll cite some facts to support my decision — a practice, I must admit, I have too seldom followed.

Let’s start with the invasion itself. I was pretty much all for it. Mind you, I was not one of the pundits, reporters, or public figures who said that Saddam Hussein was a threat to the United States. I knew better — but I said it didn’t matter!

Back in February of 2003, I wrote in this space: “Saddam does not threaten us today. He can be deterred. Taking him out is a war of choice — but it’s a legitimate choice.” In other words, we should invade a sovereign state and replace its government in order to remake the world more to our liking.

Now the simple fact is, an unprovoked attack on a sovereign state is a war crime, even when linked to grand ideas of the future of mankind. In fact, that’s exactly what Hitler did, for exactly the same reasons. The Nuremburg War Crimes Tribunal called it the “the supreme international crime, differing only from other war crimes in that it contains within itself the accumulated evil of the whole.”

What was I thinking? And more importantly, why didn’t anyone stop me?

The G20 Summit - Global Governance Reform?

A major global crisis, unfortunately, is now upon us. We believe that the G20 summit, which Mr. Bush has now convened, is the right forum for forging a cooperative approach to the crisis and for building a stronger, more inclusive international financial and economic architecture, and beyond to addressing other global challenges such as energy and climate change, security and terrorism, poverty and health. This crisis and the G20 summit on November 15 provide a historic opportunity for the next president of the United States to chart a new course for global cooperation, overcoming the transatlantic and Western biases of recent years, integrating Asia and other emerging economies into the global leadership forum, thereby creating a more effective and legitimate global steering mechanism.

The G20 Summit: Could the Financial Crisis Push Global Governance Reform?

Should the U.S. Let GM Fail?

NYTimes | Momentum is building in Washington for a rescue package for the auto industry to head off a possible bankruptcy filing by General Motors, which is rapidly running low on cash.

But not everyone agrees that a Chapter 11 filing by G.M. would be the disaster that many fear. Some experts note that while bankruptcy would be painful, it may be preferable to a government bailout that may only delay, at considerable cost, the wrenching but necessary steps G.M. needs to take to become a stronger, leaner company. David Brooks says we should let the market process work, let GM file for bankruptcy, and then see what restructured auto company rises from the ashes. GM, Ford, and Chrysler are reaping the rewards of bad management, stupid product decisions, and giving away too much to unions.

Democrats in Congress are pushing for a bailout, but this will simply confirm and support the accusations of Republicans - that the Congressional majority represents a new generation of "tax and spend" liberals - while only deferring the inevitable crash of the Big Three U.S. auto companies, and wasting taxpayers' money.

Would Japan let its auto industries fall into ruin? Would Germany? Only in America do you have partisans arguing that letting this happen is good economic policy. Should a modern nation let its productive economic or industrial base collapse on principle?

World Energy Outlook 2008

This report, and economics more generally, completely lacks the understanding that those numbers are not only quite unproven but irrelevant and useless by themselves, for the important number is not “how many barrels are in the ground” but “how many of those barrels will be gained at a significant energy profit for society.” In effect, the notional figure of 106 mbpd gives the impression that oils net benefit to society will continue and even grow into the future.

Neoclassical economics and economists have reigned supreme despite their dismal track record of late, as evidenced by governments turning to the same economists who got us into the credit crisis situation to get us out. It used to work better: economies expanded simultaneously with an expansion of economic departments and economic theory. It looked like the theories worked, although since more and more oil was being pumped out of the ground perhaps any theory could 'seemingly' work. Capitalism may be a giant Ponzi scheme once fueled by ever more investors and ever more oil at its base, but this has ceased, most likely forever.

The economic theories became ever more analytically elegant as they got further and further from reality. Our most prestigious economics departments not only did not teach very much about oil or grain or other sources of real wealth but increasingly not even about money. Rather their focus was far too often complex econometric models using rather stupid starting assumptions. Acceptance of graduate students was increasingly taken based on their math skills rather than their ability to understand real commodity paths. Wall Street followed the lead of our major economists. As we have seen in other disciplines, such as ecology, there has been massive conflation of mathematical and analytical rigor with scientific rigor.

Full Monty at the Oil Drum.

America will be the First Undeveloped Country

The Political Problem

Many groups are working on the problem of sustainability. I'm an engineer so I look at sustainability as an engineering problem. First, it would NOT look like Brundtland's meaningless, "feel good" definition. Ultimately, sustainability would require limits on human mobility, reproduction, and consumption.

For many years, thousands of members on my email lists have investigated all, or almost all, disciplines and historical examples of sustainability that others have suggested. With a couple of irrelevant exceptions (e.g., a religious sect that died out) not one example of an intentionally-sustainable (engineer's definition) society could be found.

The central problem that planet Earth faces today is NOT a problem of "running out of energy," or "overfishing," or "the wrong kind of farming," or "the depletion of aquifers," or "too much CO2 in the atmosphere," or [fill in the blanks]...

The problem that threatens to exterminate most higher forms of life on Earth — and soon — is the problem of "human behavior." Therefore, if one is searching for "solutions," one must look closely at what one sees in the mirror every morning. That's the central problem on planet Earth. It lives with all of us. WE ARE THE PROBLEM.

The problem of sustainability can be neatly divided into two sub-problems: 1) An engineering problem. 2) A political problem. [1]

The engineering problem

Even though the engineering problem is gigantic, its solution is fairly straightforward. We need so much of this type of food here, this much of that type of vaccine there, water can't be pumped from an aquifer any faster than that, wastes can't be discharged any faster than this, fishing can't exceed… And so on. Moreover, the problem must be approached globally due to the way our ecosystems are interconnected. Although the problem is immense, I think we could do it.

The political problem

A solution to the political problem of sustainability does not presently exist. Moreover, if we can't solve the politics of sustainability, then nothing else matters. That's Liebig's limiter: politics. To emphasize the point: if we can't solve the political problem, then more efficient PV panels, wind turbines, etc., won't help — and may make the die-off even worse.

Politics is where "evolutionary psychology" (EP) comes in. If a solution to the politics of sustainability can be found, it will be found by those who study human behavior via the scientific method. [2]

EP is a true science based on Neo-Darwinism, [3] which is the name of the modern theory of evolution, and it is the only scientific theory which explains how we became human.

EP attempts to explain mental and psychological traits — such as memory, perception or language — as adaptations, that is, as the functional products of natural selection or sexual selection. Adaptationist thinking about physiological mechanisms, such as the heart, lungs, and immune system, is common in evolutionary biology. Evolutionary psychology applies the same thinking to psychology. [4]

EP argues that our brains come from the factory with hundreds of built-in programs structured to solve prehistoric environmental problems. Throughout life, especially before age ~ 25, these built-in programs are updated by interaction with a person's environment and respond to stimuli from the environment, or from other parts of the body itself, to produce our behavior. In theory, human behavior can be explained by reflex-like brain algorithms.

EP aims to understand how and why our brains make the decisions that they do. EP is a true science unlike the "politics-in-disguise" disciplines of economics and sociology. [5] Therefore, EP represents the possibility of finding a humane solution for our present crisis while economics and sociology represent dead ends (literally.)

To reiterate: WE ARE THE PROBLEM. More energy, less fishing, less CO2, etc., won't solve the problem. Two methods exist to change human behavior: 1) Force. 2) Persuasion.

I think that finding a humane solution for our present crisis is incredibly important. That's why I have dedicated the last fifteen-or-so years of my life to it. The alternative is horrible. No solution yet, but perhaps tomorrow...

References

[1] Politics: social relations involving authority or power. More at http://www.warsocialism.com/p1.html

[2] http://www.ehbonline.org/

[3] http://en.wikipedia.org/wiki/NeoDarwinism

[4] http://en.wikipedia.org/wiki/Evolutionary_psychology

[5] http://www.warsocialism.com/economic.htm

Orlov -- Five Stages of Collapse Updated

Energy Bulletin | In January of 2008, I published an article on "The Five Stages of Collapse," in which I defined the five stages, and then bravely stated that we are in the midst of a financial collapse. And ten months later it doesn't seem that I went too far out on a limb this time. If the US government has to lend banks over 200 billion dollars a day just to keep the whole system from imploding, then the term "crisis" probably doesn't do justice to the situation. To keep this game going, the US government has to be able to sell the debt it is taking on, and what do you think the chances are that the world at large will be snapping up trillions of dollars of new debt, knowing that it is being used to prop up a shrinking economy? And if the debt can't be sold, then it has to be monetized, by printing money. And that will trigger hyperinflation. So, let's not quibble, and let us call what's happening what it looks like: "financial collapse".

So here are the five stages as I defined them almost a year ago. The little check-mark next to "financial collapse" is there to remind us that we are not here to quibble or equivocate, because Stage 1 is pretty far along. Stages 2 and 3 - commercial and political collapse, are driven by financial collapse, and will overlap each other. Right now, it is unclear which one is farther along. On the one hand, there are signs that global shipping is grinding to a halt, and that big box retailers are in for a very bad time, with many stores likely to close following a disastrous Christmas season. On the other hand, states are already experiencing massive budget shortfalls, laying off state workers, cutting back on programs, and are starting to beg the federal government for bail-out money.

Even though the various stages of collapse drive each other in a variety of ways, I think that it makes sense to keep them apart conceptually. This is because their effects on our daily life are quite different. Whatever constructive ways we may find of dodging these effects are also going to be different. Lastly, some stages of collapse seem unavoidable, while others may be avoided if we put up enough of a fight.

Onward Christian Soldiers

Don't miss Preznit Bush's cameo at ~4.5 minute mark. German with subtitles. American Missionaries and Generals in the American Military are working together in order to convert Helpless Muslims in Iraq to Christianity. Many of these Missionaries which are Supported by the Bush Administration are from Evangelical Christian Groups Such as Southern Baptist Convention, World Help and other Evangelical Christian Organizations. They go into Iraq as aid workers in Disguise or as American Private Contractors working in Iraq. Many of these people have been given support and Protection from American Generals in Iraq by providing them Housings in Americans Bases in Iraq to work from. When ever the American Military goes into a Village or a Town in search and destroy Mission these missionaries follow them and hand out Pamphlets promoting Christianity and also Also Anti-islamic material to the helpless Muslims in Iraq. Many of them follow the American Military as well in their rutine Night raids where the American Soldiers Kills or detains Muslim males from the families, Iraq is a traditional Society and most of the Support a family recieves is from the Male, and once there is no Male gaurdian for the Family the family does not have a chance for survival. Many Muslim Women and families are being taken advantagae of by these American christians, since they provide them with food and Shelter or Money in Exchange for the Bible and Christianity

Inclusion...,

Black Commentator | The present-day contentious debate between black and queer communities, concerning what constitutes a legitimate civil rights issue and which group owns the right to use the term, is both fueled and ignored by systemic efforts by our government that deliberately pit both groups against each other rather than upholding the 13th and 14th Amendments to the U.S. Constitution that afford each of these marginal groups their inalienable rights.

While it is true that the white LGBTQ community needs to work on its racism, white privilege, and single-issue platform that thwart all efforts for coalition building with both straight and queer communities of color, the African-American community needs to work on its homophobia.

The blame of the passing of Proposition 8 should not be placed on the shoulders of blacks, Latinos or even religion, but rather the blame should rightly be placed on the shoulders of our government. To have framed our civil rights as a ballot question for a popular vote was both wrong-hearted and wrong-headed. If my enslaved ancestors had waited for their slaveholders to free them, predicated on a ballot vote we all wouldn’t be living in the America we know today.

What Is It To You?

Whistling Past the Graveyard...,

NYTimes | The Treasury Department on Wednesday officially abandoned the original strategy behind its $700 billion effort to rescue the financial system, as administration officials acknowledged that banks and financial institutions were as unwilling as ever to lend to consumers.

But with a little more than two months left before President Bush leaves office, Treasury Secretary Henry M. Paulson Jr. is hoping to put in place a major new lending program that would be run by the Federal Reserve and aimed at unlocking the frozen consumer credit market.

Washington Post |

In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.

Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.

Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

"It's a mess," said Eric M. Thorson, the Treasury Department's inspector general, who has been working to oversee the bailout program until the newly created position of special inspector general is filled. "I don't think anyone understands right now how we're going to do proper oversight of this thing."

No defined direction, no oversight or accountability, and in the midst of a transition looking to maintain collegiality and bipartisanship by not holding the suspect accountable for their misdeeds. Your institutions of federal and fiduciary governance are just whistling past the graveyard. Remember people, you.are.on.your.own.....,