The Neo-Yeltsin Administration?

CounterPunch | Reality had to raise its ugly head. Barack Obama was elected with overwhelming approval to inaugurate an era of change. And at his November 25 press conference, he said that his decisive victory gave him a mandate to change the direction in which America is moving. But his recent economic and foreign policy appointments make it clear that when he chose “change” as his campaign slogan, he was NOT referring to the financial, insurance and real estate (FIRE) sectors, nor to foreign policy. These are where the vested interests concentrate their wealth and power. And change already has been accelerating here. Unfortunately, its direction has been for the top 1% of America’s population to raise their share of in the returns to wealth from 37% ten years ago to 57% five years ago and an estimated nearly 70% today.

The change that Mr. Obama is talking about is largely marginal to this wealth, not touching its economic substance – or its direction. No doubt he will bring about a welcome change in race relations, environmental regulations, and a more civil rule of law. And he probably will give wage earners an income-tax break (thereby enabling them to keep on paying their bank debts, incidentally). As for the rich, they prefer not to earn income in the first place. Taxes need to be paid on income, so they take their returns in the form of capital gains. And simply avoiding losses is the order of the day in the present meltdown.

Where losses cannot be avoided, the government will bail out the rich on their financial investments, but not wage earners on their debts. On that Friday night last October when Mr. Obama and Mr. McCain held their final debate, Mr. Obama was fully on board with the bailouts. And this week’s appointment of the “Yeltsin” team who sponsored Russia’s privatization giveaways in the mid-1990s – Larry Summers and his protégés from the Clinton’s notorious Robert Rubin regime – shows that he knows his place when it comes to the proper relationship between a political candidate and his major backers. It is to protect the vested interests first of all, while focusing voters’ attention on policies whose main appeal is their ability to distract attention from the fact that no real change is being made at the economic core and its power relationships.

a frenzy over free food

Denver Post | Want one more palpable sign of a desperate economy?

An estimated 40,000 people came to a Weld County farm Saturday to collect free potatoes, carrots and leeks.

Cars snaked around cornfields and parallel parked along Colorado 66 and 119 early in the morning to get free food from the Miller family, who farm 600 acres outside of Platteville, about 37 miles north of Denver.

As this prolonged Indian summer continued, the Millers had decided to give away produce because so much was left over at the end of their annual fall festival. Any day now, a few deep freezes would kill it off.

They expected between 5,000 and 10,000 people spread out over a couple of days. Instead, they found themselves on Saturday morning inundated with cars and people with sacks and wagons and barrels ready to harvest whatever was available.

The Millers canceled the second day of the giveaway originally planned for today because, as Chris Miller put it, "the pickins' are very slim now."

At one point, 30 acres of family farmland had become a parking lot. Their crowd estimate of 40,000 plus was based on the number of cars. Sheriff's officials said they "wouldn't be surprised" if that count was accurate.

Traffic was backed up almost to Interstate 25, and police ticketed people who had illegally abandoned their cars in the frenzy.

"Overwhelmed is putting it mildly," Miller said. "People obviously need food."

China and the Congo Wars

Global Research | The Democratic Republic of the Congo contains more than half the world’s cobalt. It holds one-third of its diamonds, and, extremely significantly, fully three-quarters of the world resources of columbite-tantalite or "coltan" -- a primary component of computer microchips and printed circuit boards, essential for mobile telephones, laptops and other modern electronic devices.

America Minerals Fields, Inc., a company heavily involved in promoting the 1996 accession to power of Laurent Kabila, was, at the time of its involvement in the Congo’s civil war, headquartered in Hope, Arkansas. Major stockholders included long-time associates of former President Clinton going back to his days as Governor of Arkansas. Several months before the downfall of Zaire’s French-backed dictator, Mobutu, Laurent Desire Kabila based in Goma, Eastern Zaire had renegotiated the mining contracts with several US and British mining companies including American Mineral Fields. Mobutu’s corrupt rule was brought to a bloody end with the help of the US-directed International Monetary Fund.

Just weeks after President George W. Bush signed the Order creating a new US military command dedicated to Africa, AFRICOM, events on the mineral-rich continent have erupted which suggest a major agenda of the incoming Obama Presidency will be for the son of a black Kenyan to focus US resources, military and other, on dealing with the Republic of Congo, the oil-rich Gulf of Guinea, the oil-rich Darfur region of southern Sudan and increasingly the Somali ‘pirate threat’ to sea lanes in the Red Sea and Indian Ocean. The legitimate question is whether it is mere coincidence that Africa appears just at this time to become a new geopolitical ‘hot spot’ or whether it has a direct link to the formal creation of AFRICOM.

What is striking is the timing. No sooner had AFRICOM become operational than major new crises broke out in both the Indian Ocean-Gulf of Aden regarding spectacular incidents of alleged Somali piracy, as well as eruption of bloody new wars in Kivu Province in the Republic of Congo. The common thread connecting both is their importance, as with Darfur in southern Sudan, for China’s future strategic raw materials flow.

Africa: A war on terror's hidden front

Chicago Tribune | U.S. Army Staff Sgt. Cynthia Ramirez roared through it in an unmarked Land Cruiser, projecting the awesome might of the U.S. military into a wasteland little seen, much less penetrated, by outsiders. The landscape was like a slap—an eye-stinging waste of salt pans and glass-blue mountains that was still inhabited by Muslim warrior-nomads, the Afar, tough customers who long ago had swapped their traditional spears for Kalashnikovs.

Behind Ramirez, in an expanding cone of dust, bucked three more Toyotas, an Army truck loaded with corrugated metal sheeting, and 14 armed, sweating American soldiers and sailors. Their improbable objective: reroof a school at a fly-speck nomad camp called Lahossa.

The bad guys were potential Islamic extremists. But anywhere, at this jaded stage in the global war on terror, was literally and metaphorically off the map: a remote African laboratory for the long anti-terror struggles of the future.

As the Bush administration draws to a close and prepares to hand the job of ending the conflicts in Iraq and Afghanistan to President-elect Barack Obama, few Americans may realize that another major U.S. military campaign is taking shape elsewhere on the globe—this time in the most obscure, lawless reaches of Africa.

The Pentagon recently unveiled AFRICOM, its historic new military command devoted exclusively to Africa—a sprawling continent of 1 billion people, roughly half of whom are Muslim, that has long been overlooked by Washington's strategic planners.

Disposable Youth in a Suspect Society

Truthout | President-elect Obama raised the issue of what kind of country young people would inherit if they lived to see the next century. The question provides an opening for taking the Obama administration seriously with regard to its commitment to young people. Young people need access to decent schools with more teachers; they need universal health care; they need food, decent housing, job training programs, and guaranteed employment. In other words, we need social movements that take seriously the challenge of dismantling the punishing state and reviving the social state so as to be able to provide young people not with incarceration and contempt, but with dignity and those economic, political, and social conditions that ensure they have a decent future. Surely, this is an issue that the Obama administration should be pushed to recognize and address. Dietrich Bonhoeffer, the great Protestant theologian, believed that the ultimate test of morality resided in what a society did for its children. If we take this standard seriously, American society has deeply failed its children and its commitment to democracy. The politics and culture of neoliberalism rest on the denial both of youth as a marker of the future and of the social responsibility entailed by an acceptance of this principle. In other words, the current crisis of American democracy can be measured in part by the fact that too many young people are poor, lack decent housing and health care, and attend decrepit schools filled with overworked and underpaid teachers. These youth, by all standards, deserve more in a country that historically prided itself on its level of democracy, liberty, and alleged equality for all citizens. We live in a historic moment of both crisis and possibility, one that presents educators, parents, artists, and others with the opportunity to take up the challenge of re-imagining civic engagement and social transformation, but these activities only have a chance of succeeding if we also defend and create those social, economic, and cultural conditions that enable the current generation of young people to nurture thoughtfulness, critical agency, compassion, and democracy itself.

Energy efficiency is the low-hanging fruit of the clean-energy revolution

McKinsey | The first step in the clean-energy revolution is to dramatically improve energy efficiency. Through a variety of measures ranging from better building efficiency and low-energy lighting to more fuel-efficient vehicles, we have the potential to cut world energy-demand growth by more than 64 million barrels of oil a day—equivalent to one and a half times current annual U.S. energy consumption.

Best of all, improvements in energy efficiency more than pay for themselves. We estimate that dramatically increasing energy efficiency would require annual investments of $170 billion over the next 13 years. But these investments would generate a return of well over $900 billion annually by 2020 through lower energy costs.

Just as one can measure labor productivity—the amount of output created per hour worked—one can measure the “carbon productivity” of an economy as the amount of output produced per metric ton of carbon dioxide and other equivalent greenhouse gases emitted into the atmosphere. If we are to meet the twin goals of reviving the economy and tackling climate change, then we need to dramatically boost the world's carbon productivity.

Today, carbon productivity is at $740 of gross domestic product (GDP) per metric ton of emissions. But if we are to continue to reduce poverty in the developing world, maintain growth in the developed world, and accommodate three billion more people on the planet by 2050, then world GDP will need to grow by at least 3 percent per year. Likewise, to avoid the potential nightmares of global warming, such as mass migrations from flooded cities and starvation due to drought, the scientific consensus is we need to cut carbon emissions by at least 50 percent from 1990 levels by 2050. Combining these targets means carbon productivity must reach $7,300 by 2050—a tenfold increase over today.

To make this more personal, the average citizen of a developed country emits 27 to 63 kilograms of carbon equivalents per day depending on where he or she lives. In order to minimize climate damage, that number needs to come down to less than 6 kilograms per day. To live on such a budget at today's levels of carbon productivity, one would be forced to choose between a taking 40-kilometer car ride, using air conditioning for the day, purchasing two new T-shirts (without driving to the shop), or eating two meals that included meat. In short, without a major boost in carbon productivity, stabilizing the climate would require a painful change in lifestyles in the developed world and the loss of hope for greater prosperity in the developing world.

A tenfold increase in carbon productivity sounds daunting, but it is a type of challenge that humankind has met before. U.S. labor productivity increased tenfold over a 125-year period from 1830 to 1955. We now need a clean-energy revolution on the same scale as the Industrial Revolution. But we probably have less than 40 years before emissions lead to irreversible damage. The clean-energy revolution has to happen three times faster than the Industrial Revolution did.

Decline and Breakup of U.S.

RIA Novosti | - A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.

Professor Igor Panarin said in an interview with the respected daily Izvestia published on Monday: "The dollar is not secured by anything. The country's foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse."

The paper said Panarin's dire predictions for the U.S. economy, initially made at an international conference in Australia 10 years ago at a time when the economy appeared strong, have been given more credence by this year's events.

When asked when the U.S. economy would collapse, Panarin said: "It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world's financial regulator."

When asked who would replace the U.S. in regulating world markets, he said: "Two countries could assume this role: China, with its vast reserves, and Russia, which could play the role of a regulator in Eurasia."

Asked why he expected the U.S. to break up into separate parts, he said: "A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work miracles. But by spring, it will be clear that there are no miracles."

He also cited the "vulnerable political setup", "lack of unified national laws", and "divisions among the elite, which have become clear in these crisis conditions."

He predicted that the U.S. will break up into six parts - the Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong.

He even suggested that "we could claim Alaska - it was only granted on lease, after all."

Is Obama's Energy Plan Enough?

Time | With the possible exception of Barack Obama's puppy-anticipating daughters, no one is more eagerly awaiting the incoming Administration than the leaders of the renewable-energy industries. President-elect Obama campaigned on the promise to spend $150 billion over the next 10 years to support alternative energy, like wind and solar, as well as the green jobs that the sector has the potential to create. At California Gov. Arnold Schwarzenegger's climate summit on Nov. 18, Obama, in taped remarks, reaffirmed that he would hold fast to those campaign promises, starting with mandatory caps on greenhouse gas emissions. "This is a crucial step forward," says Linda Church Ciocci, the executive director of the National Hydropower Association.

The problem is, it won't be enough. As ambitious as Obama's campaign promises were — at least compared to his predecessor's — the future state of global energy will demand government policies with a much longer reach, according to alternative-energy leaders. The International Energy Agency's (IEA) annual World Energy Outlook, released Nov. 12, projects that global energy demand will increase by 45% between 2006 and 2030 — and that $26 trillion in power-supply investments will be necessary simply to meet those needs. Barring radical changes in our energy policy — beyond what Obama has pledged — greenhouse gas emissions will rise 45% by 2030, and extreme global warming would be virtually unavoidable.

uh, quoting the IEA as authoritative in any manner, form, or fashion qualifies this entire article as a puff piece. Overall, it smacks of a special interest in search of a pre-emptive bailout, er, ah, I mean subsidy. This is NOT where the U.S. should invest its scant remaining capital to yield maximum return on energy investment.

Climate Change and British Politics

The Economist | Britain decides that climate change is too important to leave to the politicians. “GIVE me chastity and continence, but not yet,” Saint Augustine besought God more than a millennium ago. Those worried by global warming but unwilling to change their behaviour take a similar approach. Evidence of the damage that economic activity does to the planet is mounting, but given the cheapness and convenience of fossil fuels, the temptation to avoid tackling climate change for just another year (and another and another) is hard to resist. This is even truer as economic woes mount.

Britain’s government thinks it has a solution, and it is one that so far no other country has adopted. The approach is rather like that of a desperate dieter padlocking his pantry. If all goes according to plan, a climate-change bill will be passed next week that takes the power to set carbon-reduction goals away from politicians and enshrines them in law. A climate-change committee will recommend five-year carbon budgets for different parts of the economy, such as power generation, transport and manufacturing, with the ultimate goal of cutting emissions by 80% from their 1990 levels by the time 2050 rolls around.

Modelled partly on the Bank of England’s Monetary-Policy Committee, which was set up in 1997 to take interest-rate decisions out of the hands of ministers, the new Committee on Climate Change (now headed by Lord Turner, the head of Britain’s financial regulator and before that the author of important pension reforms) will publish on December 1st the first three carbon budgets, covering the period until 2022. Other countries may have more eye-catching ambitions than Britain (Sweden, for instance, aspires to phase out fossil-fuel use entirely), but nowhere else will the pledges have the force of law. Foreign governments and green groups are watching the British experiment with interest.

Is Natural Gas Drilling Endangering US Water Supplies?

Propublica | In July, a hydrologist dropped a plastic sampling pipe 300 feet down a water well in rural Sublette County, Wyo., and pulled up a load of brown oily water with a foul smell. Tests showed it contained benzene, a chemical believed to cause aplastic anemia and leukemia, in a concentration 1,500 times the level safe for people.

The results sent shockwaves through the energy industry and state and federal regulatory agencies.

Sublette County is the home of one of the nation's largest natural gas fields, and many of its 6,000 wells have undergone a process pioneered by Halliburton called hydraulic fracturing, which shoots vast amounts of water, sand and chemicals several miles underground to break apart rock and release the gas. The process has been considered safe since a 2004 study (PDF) by the Environmental Protection Agency found that it posed no risk to drinking water. After that study, Congress even exempted hydraulic fracturing from the Safe Drinking Water Act. Today fracturing is used in nine out of 10 natural gas wells in the United States.

Over the last few years, however, a series of contamination incidents have raised questions about that EPA study and ignited a debate over whether the chemicals used in hydraulic fracturing may threaten the nation's increasingly precious drinking water supply.

If Only Life Would Imitate Art.....,

What would happen if companies stopped hiding problems from customers and government stopped hiding problems from citizens? What if customers and citizens were tapped to become resources for problem solving?

"EVE Online tries the World of Democracycraft experiment

"A recent insider-meddling scandal inside the space-merchant game EVE Online prompted the creation of a democratically elected player council called the Council of Stellar Management (CSM). This newly constituted democratic institution is charged with helping the game developers balance out fun with fairness. I've often wondered whether democratic player-groups can vote for more fun, even when "fun" includes making the game harder and more frustrating at times. .. "

Sadly, open source design is still regarded by power-holders with fear and contempt, but these goings-on in virtual nerd world compel one to wonder How much decision making can be democratized? The comment thread spawned by this post on American illiteracy got me thinking about this topic.

U.S. car companies lobbied the government to give large vehicles tax advantages for business use. The car companies "engineered" (or would that be gerrymandered?) the demand for SUVs that has proven to be their undoing. Would car buying consumers have voted for such lobbying?

Competitive advantage would depend on transparency, accountability, and accurate information rather than propaganda. If these virtual world methods were adopted by one successful business, how long before the public would move to have them applied to functions of government?

Decision Neuroscience

This will not be the first time you've heard this from me, I've variously addressed it hereabouts under the rubrics neuroeconomics or dopamine hegemony - but this morning my very good friend Arnach hit me up back channel with a morsel supportive of the theory that global human governance boils down to the science of stimulating and controlling dopaminergy in the individual brain.

From the Stanford Storybank we have This is Your Brain on Bargains.

Scientific inspiration can derive from the most mundane experience. Archimedes was said to have figured out how to compute volume in his bathtub. When Uzma Khan had her eureka moment, she was sprawled on her couch, just back from a shopping mall where she had gone to avoid working on her dissertation.

Khan—then at Yale, now an assistant professor of marketing at the Graduate School of Business—knew all about the supposed levers of consumer behavior: supply, demand, advertising, discounting. Traditionally, business theorists described consumer behavior as being based on rational decisions about value and price. But as Khan looked at the shopping bags strewn around her apartment she realized that the conventional wisdom was, well, bankrupt. She was sure that her buying decisions had much less to do with price than they did her frayed nerves. She had gone shopping to feel better. Once home, the thrill was gone. “I looked at all that stuff, all those bags, and I thought, 'I don't need this stuff. I'm going to take most of it back. What was I thinking?'”

Khan's professional focus today is answering that question—what are we thinking when we go shopping? She is one of a growing number of researchers at Stanford and elsewhere working on consumer mysteries: Why are our needs and wants so disconnected? Why do people dig themselves into debt from foolish spending? Why do our brains perceive expensive products as superior? And what are the biological bases for the pleasures that shopping or even the anticipation of shopping can unleash?

So simple, elegant, and obvious. Selective governance via the natural tendency of the brain's neuronal circuits to Do What They Do..., what could be easier, more powerful, and more durable than that? The basic fact is that humans are routinely exploited by those with the wherewithal to "engineer" values in the outside world and a little knowledge of the workings of the "inside" world.

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.