We are what we eat! A sobering assessment of the food industry this Friday, the 13th!

This saying, which has been around for some time, reminds us that the foods we eat break down into elements that our bodies absorb. What we eat literally becomes part of us, and not just us humans but our dogs and cats as well.  That’s why I haven’t differentiated between us humans and our pets in this Post.

Let’s start off with our pets.

On the 28th December, just a couple of weeks ago, I wrote an article about the possible harm to dogs from Jerky treats coming in to the USA from China.  Kenneth Bryant of TriPom Chews added a comment that included a link to a news story about 353 dogs possibly being made sick.  Since then he and I have been in email correspondence including Ken passing the web address of Susan Thixton’s website Truth about Pet Food.  If you have a pet, go to this website!

I’m sure Susan wouldn’t mind me giving you a flavour (pardon the pun!) of what she has on this important website.  Try this.

Is there Chicken in Chicken Pet Foods?

One of the newest trends of pet food marketing is a tag line something like ‘Chicken is the first ingredient’.  Sounds good doesn’t it?  Chicken, first or second on the ingredient list surely means this pet food contains lots of quality meat doesn’t it?  No wonder this ‘chicken’ pet food is a little more expensive – it contains more meat.  Right?  Maybe not.

Just because petsumers think meat when the ingredient ‘chicken’ is listed on a label, doesn’t mean the pet food actually contains chicken meat.  Pet food can have a very different definition of ‘chicken’.  Thanks to very broad Association of American Feed Control Officials (AAFCO) ingredient definitions, the ingredient ‘chicken’ listed on a pet food label could be nothing more than skin, bone, cartilage, and maybe a few tiny fragments of meat.

Here is the AAFCO definition of poultry (quoting the 2011 AAFCO Official Publication): “Poultry is the clean combination of flesh and skin with or without accompanying bone, derived from the parts or whole carcasses of poultry or a combination thereof, exclusive of feathers, heads, feet and entrails.  It shall be suitable for use in animal food.  If it bears a name descriptive of its kind, it must correspond thereto.”

Problems with this pet food ingredient definition…
#1  This ingredient (which includes all types of poultry including chicken) can be “a combination thereof” of any part of poultry.  This means that a pet food, proudly claiming Chicken as the #1 ingredient, can include ONLY chicken bones and/or skin (left over from the human food industry).

#2  “It shall be suitable for use in animal food” means that animals rejected for use in human food for reasons including (but not limited to) disease and drug residues are approved for use in pet food.  This we can thank the FDA for.  Federal Food Safety Laws should make it illegal for pet food to include whole or parts of diseased or rejected animals, but FDA Compliance Policies tell pet food it is acceptable to use diseased and drugged animals in pet food [My emboldening, PH.] (“it shall be suitable for use in animal food”).

Chicken Meal/Poultry Meal is very similarly defined – except ‘meal’ implies moisture removed.  However the very same end result can apply – the meal can consist of little more than skin and bones — no meat.

Other pet food meat ingredient definitions are a bit more descriptive, however all meat pet food ingredient definitions include the “it shall be suitable for use in animal food” disclaimer.  Thus any pet food meat ingredient – thanks to FDA Compliance Policies and AAFCO ingredient definitions – can be the same quality as human meats or can be sourced from diseased, rejected animals.  But, regulations do NOT provide petsumers with a means to determine which is which.

Read the rest of this article on Susan’s website.  Even better subscribe to her newsletters.

I could go on and on but will close this section by saying ‘thanks’ to Ken of TriPom for providing this awareness of what we all may be feeding our beloved cats and dogs.

So, humans next!

Just a few days ago there was an article on The Atlantic magazine website about The Very Real Danger of Genetically Modified Foods.  It’s a detailed article that, nonetheless, needs to be read by the widest possible audience.  Here are some extracts,

Chinese researchers have found small pieces of ribonucleic acid (RNA) in the blood and organs of humans who eat rice. The Nanjing University-based team showed that this genetic material will bind to proteins in human liver cells and influence the uptake of cholesterol from the blood.

The type of RNA in question is called microRNA, due to its small size. MicroRNAs have been studied extensively since their discovery ten years ago, and have been linked to human diseases including cancer, Alzheimer’s, and diabetes. The Chinese research provides the first example of ingested plant microRNA surviving digestion and influencing human cell function.

Should the research survive scientific scrutiny, it could prove a game changer in many fields. It would mean that we’re eating not just vitamins, protein, and fuel, but information as well.

Later on the article says,

Monsanto’s claim that human toxicology tests are unwarranted is based on the doctrine of “substantial equivalence.” This term is used around the world as the basis of regulations designed to facilitate the rapid commercialization of genetically engineered foods, by sparing them from extensive safety testing.

According to substantial equivalence, comparisons between GM and non-GM crops need only investigate the end products of DNA translation: the pizza, as it were. “There is no need to test the safety of DNA introduced into GM crops. DNA (and resulting RNA) is present in almost all foods,” Monsanto’s website reads. “DNA is non-toxic and the presence of DNA, in and of itself, presents no hazard.”

The Chinese RNA study threatens to blast a major hole in that claim. It means that DNA can code for microRNA, which can, in fact, be hazardous.

And the closing two paragraphs,

The OECD’s 34 member nations could be described as largely rich, white, developed, and sympathetic to big business. The group’s current mission is to spread economic development to the rest of the world. And while that mission has yet to be accomplished, OECD has helped Monsanto spread substantial equivalence to the rest of the world, selling a lot of GM seed along the way.

The news that we’re ingesting information as well as physical material should force the biotech industry to confront the possibility that new DNA can have dangerous implications far beyond the products it codes for. Can we count on the biotech industry to accept the notion that more testing is necessary? Not if such action is perceived as a threat to the bottom line.

Please read the whole article as my extracts do not give justice to the importance of these findings.

Finally, let me turn to a recent item on the BBC website about the decline of brain function from as soon as age 45!  (I’m 67!)  The item starts,

The brain’s ability to function can start to deteriorate as early as 45, suggests a study in the British Medical Journal.

University College London researchers found a 3.6% decline in mental reasoning in women and men aged 45-49.

What caught my eye were these concluding paragraphs,

Dr Simon Ridley, head of research at Alzheimer’s Research UK, said he wanted to see similar studies carried out in a wider population sample.

He added: “Previous research suggests that our health in mid-life affects our risk of dementia as we age, and these findings give us all an extra reason to stick to our New Year’s resolutions.

“Although we don’t yet have a sure-fire way to prevent dementia, we do know that simple lifestyle changes – such as eating a healthy diet, not smoking, and keeping blood pressure and cholesterol in check – can all reduce the risk of dementia.”

Professor Lindsey Davies, president of the Faculty of Public Health, said that people should not wait until their bodies and minds broke down before taking action.

“We need only look at the problems that childhood obesity rates will cause if they are not addressed to see how important it is that we take ‘cradle to grave’ approach to public health.”

Let me repeat this sentence, “we do know that simple lifestyle changes – such as eating a healthy diet, not smoking, and keeping blood pressure and cholesterol in check – can all reduce the risk of dementia.”

Understanding what food is healthy for us and our animals ought to be straightforward.  But it’s not, when one understands the terrible lack of integrity in the industries that make our food!

An update to my piece last year!

Last Friday, the 30th December, I published an hour-long video interview, introduced thus,

Toxic botulism in animals linked to RoundUp

Dr Mercola recently interviewed Dr Don Huber, whose letter to the USDA warning that Monsanto’s RoundUp, a broad-spectrum “herbicide” that has been linked with spontaneous abortion in animals, continues to be ignored by food and environmental safety authorities. In this important hour-long discussion, Huber, a plant pathologist for over 50 years, explains how RoundUp is destroying our healthy soils by killing needed microorganisms.

For those of you who watched that interview, you may like to watch the first few minutes of a documentary made by Journeyman Pictures that shows how right can overcome might!

Percy Schmeiser has his own website here and from there you can go to a section where Percy speaks about his experiences.

Funny old world!

Be warned, one of my more reflective muses!

Tomorrow is the last day of the year 2011.

For reasons that I am not clear about, there is a mood of pessimism about my person.  Whether it is the scale of global issues that I see ahead that drags me down, whether the year of an American Presidential election will remind me of the loss of reason that afflicts so many modern democracies, whether the messages in Kunstler’s book The Long Emergency still resonate in my mind well, who knows?

But when one does look at the broader picture of modern society, there is much that troubles.

So forgive me if I provide a couple of examples of these troubles.  I do so on the grounds of communication – the more that understand the risks ahead of us, the more likely we, as in the peoples of this planet, will say to our leaders, “Enough of this!  For the sake of my children, my grandchildren and all of humanity we have to change our priorities, and soon!”

Here’s my first example.

The US National Resources Defense Council recently published an item about severe weather including an interactive Extreme Weather Map, introduced thus,

Climate change increases the risk of record-breaking extreme weather events that threaten communities across the country. In 2011, there were at least 2,941 monthly weather records broken by extreme events that struck communities in the US.

That was backed up by an article on the Onearth website that opened,

By many measures, 2011 was the most extreme weather year for the United States since reliable record-keeping began in the 19th century — and the costs have been enormous. According to the National Oceanic and Atmospheric Administration, 2011 set a record for the most billion-dollar disasters in a single year. There were 12, breaking the old record of nine set in 2009. The aggregate damage from these 12 events totals at least $52 billion, NOAA found.

And that just for the USA.  But will climate change be the Number One political issue in 2012?  And if not in 2012, when will it be?

Let me move on to my second example, very different from the one above but, in a sense, just as scary.  This is an interview that was in a recent article on the Food Freedom website ( brilliant website, by the way).  Dr. Joseph Mercola, the leading natural health practitioner, interviews Dr. Don M. Huber, one of the senior scientists in the U.S about the area of science that relates to genetically modified organisms (GMO). Here’s an extract from the article on Food Freedom,

Toxic botulism in animals linked to RoundUp

Dr Mercola recently interviewed Dr Don Huber, whose letter to the USDA warning that Monsanto’s RoundUp, a broad-spectrum “herbicide” that has been linked with spontaneous abortion in animals, continues to be ignored by food and environmental safety authorities. In this important hour-long discussion, Huber, a plant pathologist for over 50 years, explains how RoundUp is destroying our healthy soils by killing needed microorganisms.

Not only did his team discover a new soil pathogen, but he reports that animals are coming down with over 40 new diseases, like toxic botulism. Huber explains that before the widespread use of herbicides, pesticides and genetically modified food and feed, natural probiota would have kept Clostridium botulinum in check

The video, below, of the interview is included in the article.  Please don’t be put off by the length, the material covered is riveting and critical to our general knowledge about the threats to our society.

So that’s enough from me for one day!  On Monday, I shall include another video relating to the RoundUp issue that reveals, both directly and metaphorically, how the only solution to pessimism is to embrace the need to make change happen.  Be inspired by this poem by Sam Keen, included in the latest Sabbath Moment from Terry Hershey,

I Want to Surrender

God, I want to surrender
to the rhythm of music and sea,
to the seasons of ebb and flow,
to the tidal surge of love.

I am tired of being hard,
tight, controlled,
tensed against tenderness,
afraid of softness.
I am tired of directing my world,
making, doing, shaping.

Tension is ecstasy in chains.
The muscles are tightened to prevent trembling.
Nerves strain to prevent trust,
hope, relaxation….

Surrender is a risk no sane man may take.
Sanity never surrendered
is a burden no man may carry.

God give me madness
that does not destroy
wisdom,
responsibility,
love.

Sam Keen

The concluding extract from James Kunstler’s powerful book.

Last Friday, I published the first part of the extract that so powerfully articulated the madness of present global policies (especially US policies) with regard to oil.  Let me continue.

The first part finished thus, “Yet, I was not soothed by these thoughts, nor by the free eats, and even the liquor failed to lift me up because I couldn’t shake the recognition that in the short term we are in pretty serious trouble, too.”

There is near unanimity among the scientific community that global warming is happening.  There is also a definite consensus emerging that the term “climate change” may be more accurate than “global warming” to describe what we are in for.  The mean temperature of the planet is going up.  The trend is unmistakable.  Average global land temperature was 46.90 degrees Fahrenheit [Ed. 8.278 °C.] when modern measurements began and had reached 49.20 degrees F [Ed. 9.556 °C.] in 2003.  The rate of change has also increased steadily.  The total increase of 2.30 degrees might seem trivial, but has tremendous implications.  And the rise in temperature happens to correlate exactly with the upward scale of fossil fuel use since the mid-nineteenth century.

It may not matter anymore whether global warming is or is not a by-product of human activity, or if it just represents the dynamic disequilibrium of what we call “nature.”  But it happens to coincide with our imminent descent down the slippery slope of oil and gas depletion, so that all the potential discontinuities of that epochal circumstance will be amplified, ramified, reinforced, and torqued by climate change.  If global warming is a result of human activity, fossil fuel-based industrialism in particular, then it seems to me the prospects are poor that the human race will be able to do anything about it, because the journey down the oil depletion arc will be much more disorderly than the journey up was.  The disruptions and hardships of decelerating industrialism will destabilize governments and societies to the degree that concerted international action – such as the Kyoto protocols or anything like it – will never be carried out.  In the chaotic world of diminishing and contested energy resources, there will simply be a mad scramble to use up whatever fossil fuels people can manage to lay their hands on.  The very idea idea that we possess any control over the process seems to me further evidence of the delusion gripping our late-industrial culture – the fatuous certainty that technology will save us from the diminishing returns of technology.

So for the purposes of this book, the relevant question concerning global warming and climate change is not whether human beings caused  it or whether we will come up with some snazzy means to arrest it, but simply what the effects are likely to be and what they signify about the way we will live later on this century.

This extract from the book was published in 2005, although there is an Afterword included that was published in 2009.  So to bring things more up to date, here’s a video of James Kunstler speaking about peak oil just about a year ago.

In this fourth video in the series “Peak Oil and a Changing Climate” from The Nation magazine and On The Earth Productions, James Howard Kunstler discusses how finance and energy are running neck and neck to fuel the end of advanced industrial civilization.

For more videos in the series, visit The Nation.

Plus for those that are interested in the data of global land-surface temperatures, here’s a two-minute video showing the temperature change over the last 200 years.

For more information about this study visit http://berkeleyearth.org. Berkeley Earth video representation of the land surface temperature anomaly, 1800 to the present. The map of the world shows the temperature anomaly by location over time. The chart at the bottom, shows the global land-surface temperature anomaly. The Berkeley Earth analysis shows 0.911 degrees Centigrade of land warming (+/- 0.042 C) since the 1950s.

A reflection on the huge changes facing our global society.

I am reading James Howard Kunstler’s book The Long Emergency.  On the front cover there is a quote from a review in The Independent newspaper, “If you give a damn, you should read this book.”  On the back cover, the quote, “Stark and frightening.  Read it soon.” – Daily Camera.  The quotes are spot on!

Rather than give my own opinion at this stage (I should finish the book first!), let me quote from the opening of Chapter Five, Nature Bites Back.

I was a at a four-day conference called Pop Tech in the seaside village of Camden, Maine, at the peak of the fall foliage season in October 2003, having a pretty good time at the talks, and enjoyiong a series of extravagant dinners – one featuring a free oyster raw bar and gratis Grey Goose vodka – not to mention all the lobsters, steaks, and other products of our bountiful cheap-oil economy.  Then, on Saturday afternoon, a scientist from the University of Washington, Peter D. Ward, got up in the old-time opera house where the conference was held and did a presentation about the life and death of the planet Earth,  Using a series of vivid artist’s renderings delivered on PowerPoint, Ward showed us how, hundreds of millions of years hence, all land animals would become extinct, the green forests and grasslands would broil away, the oceans would evaporate, and eventually our beloved planet would be reduced to a pathetic ball of inert lifeless lint – prefatory to being subsumed in the expanded red giant heat cloud of our baking sun.  Few members of the audience had any appetite for the spread of cookies and munchables laid out for the break that followed.  Personally, I was so depressed that I felt like gargling with razor blades.

The human spirit is remarkably resilient, though.  A few hours later, the horror of it all was forgotten and the conference-goers reported to the next supper buffet with the appetites recharged, happy to scarf more lobster and beef medallions and guzzle more liquor, while chatting up new friends about their various hopes and dreams for the continuing story of civilized life here on good old planet Earth, which, it was assumed, had quite a ways to go before any of us needed to worry about its fate, if ever.

Wasn’t it John Maynard Keynes who famously remarked to a group of fellow economists dithering about the long-term this and the long-term that: “Gentlemen, in the long term we’re all dead.”  Our brains are really not equipped to process events on a geological scale – at least in reference to how we choose to live, or what we choose to do in the here-and-now.  Five hundred millions years is a long time, but how about the mad rush of events in just the past 2,000 years starring the human race?  Rather action-packed, wouldn’t you say?  Everything from the Roman Empire to the Twin Towers, with a cast of billions – emperors, slaves, saviors, popes, kings, queens, navies, rabbles, conquest , murder, famine, art, science, revolution, comedy, tragedy, genocide, and Michael Jackson.  Enough going on in a mere 2,000 years to divert anyone’s attention from the ultimate fate of the earth, you would think.  Just reflecting on the events of the twentieth century alone could take your breath away, so why get bent out of shape about the ultimate fate of the earth?  Yet, I was not soothed by these thoughts, nor by the free eats, and even the liquor failed to lift me up because I couldn’t shake the recognition that in the short term we are in pretty serious trouble, too.

OK, that’s enough for today – I’ll continue this important extract on Monday.  Let me close by inviting you to watch James Kunstler in interview.

A remarkably simple explanation, courtesy of a Greek Hotel, about financial bailouts!

Last week-end I was indebted to Neil Kelly for supplying a more humorous look at life for Learning from Dogs.  This week-end I turn to friend, Bob D., a corporate airliner Captain out in the Middle East.  Here is Bob’s contribution for today. (Editor’s note: at the time of posting this, 1 euro = 1.3405 US dollars, ergo €100 = $134 – read on, this will make sense.)

No connection with the hotel in the story!

For those interested in world events….

How the Greek bailout package works.

It is a slow day in a damp little Greek town. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.

On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.

The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers’ Co-op takes the €100 note and runs to pay his drinks bill at the pub. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.

The hotel proprietor then places the €100 note back on the counter so the rich traveler will not suspect anything. At that moment the traveler comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism.

And that, Ladies and Gentlemen, is how the bailout package works.

The story that could run for an awfully long time!

I rather revealed my newness as a US resident by posting my review of David Kauders’ book The Greatest Crash over 2 days last week,  one of them being Thanksgiving Day.  Despite that 1,895 people viewed my review which was entitled The end of an era.

A week has now passed since that review.  I was curious to see what sorts of headlines had been making the news in the last 7 days.  It’s just a random trawl through those items that have captured my attention.

Let’s start with the Financial Times, November 27th,

The eurozone really has only days to avoid collapse

By Wolfgang Münchau

In virtually all the debates about the eurozone I have been engaged in, someone usually makes the point that it is only when things get bad enough, the politicians finally act – eurobond, debt monetisation, quantitative easing, whatever. I am not so sure. The argument ignores the problem of acute collective action.

Last week, the crisis reached a new qualitative stage. With the spectacular flop of the German bond auction and the alarming rise in short-term rates in Spain and Italy, the government bond market across the eurozone has ceased to function.

Wolfgang concludes his article thus,

Italy’s disastrous bond auction on Friday tells us time is running out. The eurozone has 10 days at most.

Then my print copy of The Economist that arrived on the 26th had this lurid cover page,

Unless Germany and the ECB move quickly, the single currency’s collapse is looming

The leader article contains this paragraph,

Past financial crises show that this downward spiral can be arrested only by bold policies to regain market confidence. But Europe’s policymakers seem unable or unwilling to be bold enough. The much-ballyhooed leveraging of the euro-zone rescue fund agreed on in October is going nowhere. Euro-zone leaders have become adept at talking up grand long-term plans to safeguard their currency—more intrusive fiscal supervision, new treaties to advance political integration. But they offer almost no ideas for containing today’s conflagration.

and a few paragraphs later, this,

This cannot go on for much longer. Without a dramatic change of heart by the ECB and by European leaders, the single currency could break up within weeks. Any number of events, from the failure of a big bank to the collapse of a government to more dud bond auctions, could cause its demise. In the last week of January, Italy must refinance more than €30 billion ($40 billion) of bonds. If the markets balk, and the ECB refuses to blink, the world’s third-biggest sovereign borrower could be pushed into default.

Then on Sunday, 27th, MISH’s Trend Analysis blogsite reveals,

ICAP Plc, the world’s largest inter-dealer broker (one that carries out transactions for financial institutions rather than private individuals), is now Testing Trades In Greek Drachma Against Dollar, Euro

ICAP Plc is preparing its electronic trading platforms for Greece’s potential exit from the euro and a return to the drachma, senior executives at the inter-dealer broker said Sunday.

ICAP is the latest firm to disclose such preparations, joining the growing ranks of banks, governments and other key players in the global financial system whose officials are worried enough about the stability of the common currency to be making contingency plans for a possible break-up.

Then Bloomberg published an article by Peter Boone and Simon Johnson, the latter of Baseline Scenario fame, that opened as follows,

Investors sent Europe’s politicians a painful message last week whenGermany had a seriously disappointing government bond auction. It was unable to sell more than a third of the benchmark 10-year bonds it had sought to auction off on Nov. 23, and interest rates on 30-year German debt rose from 2.61 percent to 2.83 percent. The message? Germany is no longer a safe haven.

and concluded,

Ultimately, an integrated currency area may remain in Europe, albeit with fewer countries and more fiscal centralization. The Germans will force the weaker countries out of the euro area or, more likely, Germany and some others will leave the euro to form their own currency. The euro zone could be expanded again later, but only after much deeper political, economic and fiscal integration.

Tragedy awaits. European politicians are likely to stall until markets force a chaotic end upon them. Let’s hope they are planning quietly to keep disorder from turning into chaos.

Finally, on the 29th the BBC News website carried details of the Autumn Statement made by British Chancellor, George Osborne, to Parliament.

Osborne confirms pay and jobs pain as growth slows

Chancellor George Osborne has said public sector pay rises will be capped at 1% for two years, as he lowered growth forecasts for the UK economy.

The number of public sector jobs set to be lost by 2017 has also been revised up from 400,000 to 710,000.

Borrowing and unemployment are set to be higher than forecast and spending cuts to carry on to 2017, he admitted.

Just look at that figure of public sector job losses – 710,000!

Well that’s more than enough from me but it does surely endorse the opening views that David Kauders expounded in his book, as carried in my review, and reproduced here,

Starting with the first sentence, David sets out the core problem;

This book argues that it is impossible to expand the financial system much further.

expanding this a few paragraphs later,

This is the financial system limit: lack of new borrowing plus excessive weight of debt obligations from past borrowing combine to slow economies down. This is the barrier whichever way policy makers turn. It is like the lid on a boiling kettle. Enough steam can lift it for a while but it always snaps back into place. The financial system limit is a roadblock preventing growth.

A few pages later in this opening chapter ‘The roadblock preventing growth‘ this limit is explained thus,

Policy contradictions also show us that the financial system has reached a roadblock. The glaring conflict between bailout and austerity is at the core. Each bailout or stimulus requires creation of more credit, leading to false financial speculation, and for a short while markets recover their poise. The threat of inflation returns. Later, bad debts rise, the markets tumble again and a new crisis emerges. Austerity, the alternative policy, cuts spending thereby cutting the immediate level of economic activity and bringing economic decline more quickly than the stimulus alternative. Whichever way they turn, the authorities are damned.

You can understand why I called this Post a ‘footnote’ not an endnote.

A review of David Kauder’s recently published book, The Greatest Crash.

Details of the availability of the book are included at the end of the review.

Extracts from the book included are with grateful thanks to Sparkling Books.

Part One of this review was published yesterday which needs to be read before Part Two.

——————-

Chapter 5 continues by examining the over-bearing consequences of excessive public spending, excessive Government regulations, substitute taxation, weakness of Treasury forecasts, and so on. While these are UK issues, there is no doubt that similar restraints of free enterprise exist in many other western nations.

In Chapter 6, ‘Group Think‘, David looks at the strange ways in which we form opinions.  It’s a topic that has been discussed and written about widely but the point behind this chapter is that people have in great part lost the ability to discern truth from fiction, with terrible implications when it comes to understanding how individuals are affected by government and bureaucratic institutions.

The chapter closes;

One of the remarkable points that I have found in writing this book is that many of the detailed errors, incorrect policies et al, have already been amply documented by others. But we never learn. The delegated society, the strength of lobby groups and vulnerability of our political system to pressure, the sheer volume of noise in the media and on the Internet, the immediacy of the demands of daily life, all combine to make our collective memory rather short.

Amen to that!

Chapter 7, ‘Academic differences of opinion‘, was surprisingly short at just 6 1/2 pages. One would have thought the subject worthy of a much longer review especially as David was exploring the fundamental differences between Keynesian and Ricardian economic theories and opportunities for alternative theories. Must say that that I laughed out loud (David’s book is a little short on humour!) at the sentence on p.127 that ran, “One correspondent writing to the Financial Times proposed that economics should be declared a failing discipline, economists as not fit for purpose, and a physicist put in charge of sorting their theories out.“

Chapter 8, ‘The dark side of capital markets‘, is the penultimate chapter and quite a technical one at that. But David manages to trip through esoteric aspects, well esoteric to the lay reader, in a manner that keeps one involved.   Here’s an example from early on in the chapter.

Capital markets follow a long cycle beyond the experience of most practitioners, detectable only by understanding history and then applying this understanding to contemporary conditions.

It didn’t mean much to me. Then the next sentence;

The principles are identical for any market where prices depend on the supply of credit: equities, bonds, property and commodities are all markets where the prices must relate to the availability of credit.

That, at least, was understood but still the penny hadn’t dropped. Then came;

Bond prices prosper when credit is lacking while the other three prosper when credit is abundant.

That then made sense to me but still only at some academic level. David then followed those sentences with these two paragraphs;

The whole market cycle consists of bull market followed by bear market, as surely as night follows day. The bull market in assets is driven by an increasing supply of credit and economic expansion, since more credit leads to higher prices. The bear market in assets is driven by less credit and economic contraction; there is no purchasing power to keep asset prices high. Only fixed interest bonds are contra-cyclical, declining in price as credit expands and rising in price as credit sinks.

There are two useful theories for analysing the whole market cycle: conversion flow and Dow theory.

So in half-a-page of text, the book effectively educated me and then showed the relevance of that learning to the world I was living in. Cleverly done!

Chapter 9, ‘The attitude change‘, is, without doubt, a clincher of a close to this fascinating book. The sentiments conveyed in this chapter are so unexpected that, forgive me, it would be wrong to explicitly refer to them.  Buy the book!

Let me just say that the last chapter fully endorsed me calling this review The End of an Era.

Overall conclusions

This is an important book from a writer who has both the academic and professional experience to enable him to form the views that he expresses. Only time will tell if the whole scenario that is envisaged by Mr. Kauders will play out as he expects. My personal view is that it will.

For individuals and business alike, reading The Greatest Crash will inform you in a manner that I would argue is critical when one notes the precarious and potentially unstable period we are living through. The decisions readers make after reading the book are beyond the remit of this review and, of course, David Kauders, but, at least, read the book!

Prof. Myddelton in the book’s introduction wrote, “But one of the things we need now is new thinking on the fundamentals.” Perhaps not new thinking on fundamentals, as the Prof. puts it, but a reinstatement of core fundamental values.

I am not alone from sensing that the world, especially the western world, is transitioning from an era of greed and materialism, seeing a world of unlimited resources, to a different societal relationship with planet Earth, the only planet we have. A transition across all layers of society towards the values of truth, integrity and compassion; values whose day has come.

The Greatest Crash reinforces immensely my notion that this truly is the end of an era.

——————

Want to buy The Greatest Crash?  The ebook was published in October worldwide, the  paperback published in the UK on the 1st November UK, the hardcover being released any day now in the UK.  For North America both the paperback and hardcover versions are being published on 1st February, 2012.

Full details from the Sparkling Books webpage here.

Copyright © 2011 Paul Handover

A review of David Kauder’s recently published book, The Greatest Crash.

Details of the availability of the book are included at the end of both parts of my review, part two is published tomorrow.

Extracts from the book included are with grateful thanks to Sparkling Books.

Personal introduction.

Back in the late 90s, when I was living in England, I attempted to bolster my self-employed income by investing and trading in equities. It was a frustrating game, game being the right word! One day I was lamenting this to a close friend and he gave me the name of David Kauders at Kauders Portfolio Management and suggested I might like to contact him.

I followed my friend’s recommendation and met with David. What he outlined at that meeting all those years ago was mind-blowing, no other way of putting it. Essentially, David predicted a financial and economic crisis of huge proportions. He convinced me of the likelihood of that crisis and in November 2001 I became a fee-paying client. As the world now knows that prediction came to fruition. My anticipated residency in the USA meant continuing to be a client was not possible, and I ceased being a client of Kauders Portfolio Management in June 2010.

Thus not only am I deeply indebted to my friend for referring me to David but also unable to write this review from an unprejudiced point of view.

The Greatest Crash

The book, released in paperback in England in October 2011, published by Sparkling Books, is subtitled ‘How contradictory policies are sinking the global economy‘. Frankly, that subtitle doesn’t do much for me. A clearer message that comes from the book is this: the economic world has reached a ‘systems limit’. Indeed, the term systems limit is used widely throughout the book.

In his introduction to the book, Professor D. R. Myddelton, Chairman of the Institute of Economic Affairs, writes,

Adam Smith said ‘There’s a deal of ruin in a nation’, and it would be a mistake to despair. But one of the things we need now is new thinking on the fundamentals. That is what David Kauders provides in his book ‘The Greatest Crash’.

Without doubt, David achieves that.

Starting with the first sentence, David sets out the core problem;

This book argues that it is impossible to expand the financial system much further.

expanding this a few paragraphs later,

This is the financial system limit: lack of new borrowing plus excessive weight of debt obligations from past borrowing combine to slow economies down. This is the barrier whichever way policy makers turn. It is like the lid on a boiling kettle. Enough steam can lift it for a while but it always snaps back into place. The financial system limit is a roadblock preventing growth.

A few pages later in this opening chapter ‘The roadblock preventing growth‘ this limit is explained thus,

Policy contradictions also show us that the financial system has reached a roadblock. The glaring conflict between bailout and austerity is at the core. Each bailout or stimulus requires creation of more credit, leading to false financial speculation, and for a short while markets recover their poise. The threat of inflation returns. Later, bad debts rise, the markets tumble again and a new crisis emerges. Austerity, the alternative policy, cuts spending thereby cutting the immediate level of economic activity and bringing economic decline more quickly than the stimulus alternative. Whichever way they turn, the authorities are damned.

In the next chapter, ‘Evolution by trial and error‘, David writes about economic cycles and reminds his readers that the long economic cycle is often “beyond the practical experiences of our working lifetimes“.  Then later suggesting that because we have seen the greatest period of inflation ever since the end of World War Two, ergo “the unwelcome lesson from history is that the greatest deflation should follow.“

In Chapter 4, ‘An Era of Wishful Thinking‘, the spotlight is put on the horrific policy errors that have been made for decades, try these three examples (there is a longer list in the book),

• Policy makers believed that debt could expand indefinitely, at no cost.
• Nobody realised that interest rate rises would make existing borrowing unaffordable and cause a wave of defaults.
• The world was swamped with so many detailed requirements and standards that nobody could understand how they all fitted together. It was assumed that ‘transparency’, i.e. extensive detail, would solve the inability to comprehend how the parts made the whole.

Part Two of the review, continuing with Chapter 5 is tomorrow.

Want to buy The Greatest Crash?  The ebook was published in October worldwide, the  paperback published in the UK on the 1st November UK, the hardcover being released any day now in the UK.  For North America both the paperback and hardcover versions are being published on 1st February, 2012.

Full details from the Sparkling Books webpage here.

Copyright © 2011 Paul Handover

The strange affairs of humans.

A quick piece of web research turned up a quote by the famous physicist, Richard P. Feynman, as follows,

“In physics the truth is rarely perfectly clear, and that is certainly universally the case

in human affairs.“

I thought the quote an apt introduction to an article written by Bill McKibben of 350 org fame, recently published on Tom Engelhardt’s TomDispatch blog.  As always, a vote of thanks to Tom for giving me permission to reproduce his pieces.

The topic is the Keystone XL pipeline, recently sidelined by Pres. Obama and now generating some interesting musings about the political strategy that may be at play here.  I have written previously about this pipeline and a quick search from the home page of Learning from Dogs using the search terms ‘keystone pipeline’ will find these articles.

Do read the full article from Bill McKibben.  Despite it’s length it’s full of thought-provoking ideas.  As Tom Engelhardt says in the closing sentences of his introduction, “Mark my words on this one: sooner or later, Americans are going to wake up to climate change, just as they have this year on the issue of inequality, and when they do, watch out.  There will be political hell to pay.Tom”

With no more ado, to the TomDispatch article,

Tomgram: Bill McKibben, Puncturing the Pipeline

Posted by Bill McKibben at 8:07am, November 15, 2011.

What’s the biggest story of the last several weeks?  Rick Perry’s moment of silence, all 53 seconds’worth?  The Penn State riots after revered coach JoePa went down in a child sex abuse scandal? The Kardashian wedding/divorce?  The European debt crisis that could throw the world economy into a tailspin?  The Cain sexual harassment charges?  The trial of Michael Jackson’s doctor?

The answer should be none of the above, even though as a group they’ve dominated the October/November headlines.  In fact, the piece of the week, month, and arguably year should have been one that slipped by so quietly, so off front-pages nationwide and out of news leads everywhere that you undoubtedly didn’t even notice.  And yet it’s the story that could turn your lifeand that of your children and grandchildren inside out and upside down.

On the face of it, it wasn’t anything to shout about — just more stats in a world drowning in numbers.  These happen to have been put out by the U.S. Department of Energy and they reflected, as an Associated Press headline put it, the “biggest jump ever seen in global warming gases.”  In other words, in 2010, humanity (with a special bow to China, the United States, and onrushing India) managed to pump more carbon dioxide into the atmosphere than at any time since the industrial revolution began — 564 million more tons than in 2009, which represents an increase of 6%.

According to AP’s Seth Borenstein, that’s “higher than the worst case scenario outlined by climate experts just four years ago.” He’s talking about the Intergovernmental Panel on Climate Change, or IPCC, which is, if anything, considered “conservative” in its projections of future catastrophe by many climate scientists.  Put another way, we’re talking more greenhouse gases than have entered the Earth’s atmosphere in tens of millions of years.

Consider as well the prediction offered by Fatih Birol, chief economist at the International Energy Agency: without an effective international agreement to staunch greenhouse gases within five years, the door will close on preventing a potentially disastrous rise in the planet’s temperature.  You’re talking, that is, about the kind of freaky weather that will make October’s bizarre snowstorm in the Northeast look like a walk in the park.  (That storm had all the signs of a climate-change-induced bit of extreme weather: New York City hadn’t recorded an October snowfall like it since the Civil War and it managed to hit the region in a period of ongoing warmth when the trees hadn’t yet had the decency to lose their leaves, producing a chaos of downed electrical wires.)  And don’t get me started on what this would mean in terms of future planetary hot spells or sea-level rise.

Honestly, if we were sane, if the media had its head in the right place, this would have been screaming headlines.  It would have put Rick Perry and Herman Cain and the Kardashians andItaly and Greece and Michael Jackson’s doctor in the shade.

The only good news — and because it unsettled the politics of the 2012 election, it did garner a few headlines – was that the movement Bill McKibben and 350.org spearheaded to turn back the tar-sands pipeline from Hades (or its earthly global-warming equivalent, which is Alberta, Canada) gained traction in our Occupy Wall Street moment.  Think of it as a harbinger.  Mark my words on this one: sooner or later, Americans are going to wake up to climate change, just as they have this year on the issue of inequality, and when they do, watch out.  There will be political hell to pay.Tom

Obama’s Positive Flip and Romney’s Negative Flop
Is Global Warming an Election Issue After All? 
By Bill McKibben

Conventional wisdom has it that the next election will be fought exclusively on the topic of jobs. But President Obama’s announcement last week that he would postpone a decision on the Keystone XL pipeline until after the 2012 election, which may effectively kill the project, makes it clear that other issues will weigh in — and that, oddly enough, one of them might even be climate change.

Transcanada Pipeline, the company that was going to build the 1,700-mile pipeline from the tar-sands fields of Alberta, Canada, through a sensitive Midwestern aquifer to the Gulf of Mexico, certainly agreed.  After all, they’d already mowed the strip and prepositioned hundreds of millions of dollars worth of pipe, just waiting for the permit they thought they’d bought with millions in lobbying gifts and other maneuvers. Happily, activists across the country weren’t smart enough to know they’d been beaten, and so they staged the largest civil disobedience actionin 35 years, not to mention ringing the White House with people, invading Obama campaign offices, and generally proving that they were willing to fight.

No permanent victory was won. Indeed, just yesterday Transcanada agreed to reroute the pipeline in Nebraska in an effort to speed up the review, though that appears not to change the schedule.  Still, we’re waiting for the White House to clarify that they will continue to fully take climate change into account in their evaluation.  But even that won’t be final.  Obama could just wait for an election victory and then approve the pipeline — as any Republican victor certainly would.  Chances are, nonetheless, that the process has now gotten so messy that Transcanada’s pipeline will die of its own weight, in turn starving the tar-sands oil industry and giving a boost to the global environment.  Of course, killing the pipeline will hardly solve the problem of global warming (though heavily exploiting those tar sands would, in NASA scientist James Hansen’s words, mean “game over for the climate.”)

In this line of work, where victories of any kind are few and far between, this was a real win.  It began with indigenous activists, spread to Nebraska ranchers, and eventually turned into the biggest environmental flashpoint in many years.  And it owed no small debt to the Occupy Wall Street protesters shamefully evicted from Zuccotti Park last night, who helped everyone understand the power of corporate money in our daily lives.  That these forces prevailed shocked most pundits precisely because it’s common wisdom that they’re not the sort of voters who count, certainly not in a year of economic trouble.

In fact, the biggest reason the realists had no doubts the pipeline would get its permit, via a State Department review and a presidential thumbs-up of that border-crossing pipeline, was because of the well-known political potency of the jobs argument in bad economic times. Despite endless lazy reporting on the theme of jobs versus the environment, there were actually no net jobs to be had from the pipeline. It was always a weak argument, since the whole point of a pipeline is that, once it’s built, no one needs to work there.  In addition, as the one study not paid for by Transcanada made clear, the project would kill as many jobs as it would create.

The Washington Post’s Juliet Eilperin and Steven Mufson finally demonstrated this late in the game with a fine report taking apart Transcanada’s job estimates. (The 20,000 jobs endlessly taken for granted assumed, among other stretches, that modern dance troupes would move to Nebraska, where part of the pipeline would be built, to entertain pipeline workers.)  Still, the jobs trope remained, and you can be sure that the Chamber of Commerce will run 1,000 ads during the 2012 presidential campaign trying to hammer it home. And you can be sure the White House knew that, which was why it was such a tough call for them — and why the pressure of a movement among people whose support matters to them made a difference.

Let’s assume the obvious then: that one part of their recent calculations that led to the postponement decision might just be the suspicion that they will actually win votes thanks to the global-warming question in the next election.

For one thing, global warming denial has seen its apogee. The concerted effort by the fossil-fuel industry to underwrite scientific revision met its match last month when a team headed by Berkeley skeptic and prominent physicist Richard Muller-- with funding from the Koch Brothers, of all people – actually found that, what do you know, all the other teams of climate-change scientists were, um, right. The planet was indeed warming just as fast as they, and the insurance companies, and the melting ice had been insisting.

Still, scientific studies only reach a certain audience.  Weird weather is a far more powerful messenger. It’s been hard to miss the record flooding along the Mississippi and Missouri Rivers, and across the Northeast; the record drought andfires across the Southwest; the record multi-billion dollar weather disasters across the country this year; the record pretty-much everything-you-don’t-want across the nation. Obama certainly noticed.  He’s responsible for finding the cash every time some other state submerges.

As a result, after years of decline, the number of Americans who understand that the planet is indeed warming and that we’re to blame appears to be on the rise again. And ironically enough, one reason may be the spectacle of all the tea-partying GOP candidates for the presidency being forced to swear fealty to the notion that global warming is a hoax. Normal people find this odd: it’s one thing to promise Grover Norquist that you’ll never ever raise taxes; it’s another to promise that you’ll defeat chemistry and physics with the mighty power of the market.

Along these lines, Mitt Romney made an important unforced error last month. Earlier in the primaries, he and Jon Huntsman had been alone in the Republican field in being open to the idea that global warming might actually be real. Neither wanted to do anything about it, of course, but that stance itself was enough to mark them as realists.  It was also a sign that Romney was thinking ahead to the election itself, and didn’t want to be pinned against this particular wall.

In late October, however, he evidently felt he had no choice but to pin himself to exactly that wall and so stated conclusively: “My view is that we don’t know what’s causing climate change on this planet.” In other words, he not only flip-flopped to the side of climate denial, but did so less than six months after he had said no less definitively: “I don’t speak for the scientific community, of course, but I believe the world’s getting warmer… And number two, I believe that humans contribute to that.”  Note as well that he did so, while all the evidence, even some recently funded by the deniers, pointed the other way.

If he becomes the Republican presidential candidate as expected, this may be the most powerful weathervane ad the White House will have in its arsenal.  Even for people who don’t care about climate change, it makes him look like the spinally challenged fellow he seems to be. But it’s an ad that couldn’t be run if the president had okayed that pipeline.

Now that Obama has at least temporarily blocked Keystone XL, now that his team has promised to consider climate change as a factor in any final decision on the pipeline’s eventual fate, he can campaign on the issue. And in many ways, it may prove a surprise winner.

After all, only people who would never vote for him anyway deny global warming.  It’s a redoubt for talk-show rightists. College kids, on the other hand, consistently rank it among the most important issues. And college kids, as Gerald Seib pointedout in the Wall Street Journal last week, are a key constituency for the president, who is expected to need something close to the two-thirds margin he won on campus in 2008 to win again in 2012.

Sure, those kids care about student loans, which threaten to take them under, and jobs, which are increasingly hard to come by, but the nature of young people is also to care about the world.  In addition, independent voters, suburban moms — these are the kinds of people who worry about the environment.  Count on it: they’ll be key targets for Obama’s presidential campaign.

Given the economy, that campaign will have to make Mitt Romney look like something other than a middle-of-the-road businessman.  If he’s a centrist, he probably wins. If he’s a flip-flopper with kooky tendencies, they’ve got a shot. And the kookiest thing he’s done yet is to deny climate science.

If I’m right, expect the White House to approve strong greenhouse gas regulations in the months ahead, and then talk explicitly about the threat of a warming world. In some ways it will still be a stretch.  To put the matter politely, they’ve been far from perfect on the issue: the president didn’t bother to waste any of his vaunted “political capital” on a climate bill, and he’s opened huge swaths of territory to coal mining and offshore drilling.

But blocking the pipeline finally gave him some credibility here — and it gave a lot more of the same to citizens’ movements to change our world. Since a lot of folks suspect that the only way forward economically has something to do with a clean energy future, I’m guessing that the pipeline decision won’t be the only surprise. I bet Barack Obama talks on occasion about global warming next year, and I bet it helps him.

But don’t count on that, or on Keystone XL disappearing, and go home.  If the pipeline story (so far) has one lesson, it’s this: you can’t expect anything to change if you don’t go out and change it yourself.

Bill McKibben is a founder of 350.org, a TomDispatch regular, and Schumann Distinguished Scholar at Middlebury College. His most recent book is Eaarth: Making a Life on a Tough New Planet.

Copyright 2011 Bill McKibben