Archive for the ‘monetary policy’ Category
A sombre reflection on the killing abilities of man.
I was in two minds as to whether to post this today for it is certainly a grim reminder of the less desirable aspects of our species.
In the end, I decided to so do because it needs to be shared and if it changes the mindset of just one person it will have been worthwhile. I was originally seen by me on the EarthSky blogsite.
Want to see Earth’s super predator? Look in the mirror.
Our efficient killing technologies have given rise to the human super predator. Our impacts are as extreme as our behavior, says study.
Extreme human predatory behavior is responsible for widespread wildlife extinctions, shrinking fish sizes and disruptions to global food chains, according to research published in the August 21 edition of the journal Science these are extreme outcomes that non-human predators seldom impose, according to the article.
Lead researcher Chris Darimont is a professor of geography at the University of Victoria. Darimont said:
Our wickedly efficient killing technology, global economic systems and resource management that prioritize short-term benefits to humanity have given rise to the human super predator. Our impacts are as extreme as our behavior and the planet bears the burden of our predatory dominance.
The team’s global analysis indicates that humans typically exploit adult fish populations at 14 times the rate than do marine predators. Humans also hunt and kill large land carnivores such as bears, wolves and lions at nine times the rate that these predatory animals kill each other in the wild.
Researchers noted that in some cases, dwindling species of predatory land carnivores are more aggressively hunted for trophies, due to the premium placed on rare prey.
The result of human activity on wildlife populations is far greater than natural predation. Research suggests that socio-political factors can explain why humans repeatedly overexploit. Technology explains how: Humans use advanced killing tools, cheap fossil fuel, and professional harvesters – like high-volume commercial fishing fleets – to overcome the defensive adaptations of prey.
Humanity also departs fundamentally from predation in nature by targeting adult quarry.Co-author Tom Reimchen is a biology professor at University of Victoria. He said:
Whereas predators primarily target the juveniles or ‘reproductive interest’ of populations, humans draw down the ‘reproductive capital’ by exploiting adult prey.
During four decades of fieldwork on Haida Gwaii, an archipelago on the northern coast of British Columbia, Reimchen looked at how human predators differ from other predators in nature. Reimchen’s predator-prey research revealed that predatory fish and diving birds overwhelmingly killed juvenile forms of freshwater fish. Collectively, 22 predator species took no more than five per cent of the adult fish each year. Nearby, Reimchen observed a stark contrast: fisheries exclusively targeted adult salmon, taking 50 per cent or more of the runs.
The authors conclude with an urgent call to reconsider the concept of “sustainable exploitation” in wildlife and fisheries management. A truly sustainable model, they argue, would mean cultivating cultural, economic and institutional change that places limits on human activities to more closely follow the behavior of natural predators. Darimont said:
We should be protecting our wildlife and marine assets as an investor would in a stock portfolio.
Bottom line: According to research published in the August 21, 2015 edition of Science, extreme human predatory behavior is responsible for widespread wildlife extinctions, shrinking fish sizes and disruptions to global food chains.
Chris Darimont really put his finger on the spot in my opinion when he was quoted,”We should be protecting our wildlife and marine assets as an investor would in a stock portfolio.”
Going to close today’s post by repeating what is presented on the Welcome page of Learning from Dogs, namely:
As man’s companion, protector and helper, history suggests that dogs were critically important in man achieving success as a hunter-gatherer. Dogs ‘teaching’ man to be so successful a hunter enabled evolution, some 20,000 years later, to farming, thence the long journey to modern man. But in the last, say 100 years, that farming spirit has become corrupted to the point where we see the planet’s plant and mineral resources as infinite. Mankind is close to the edge of extinction, literally and spiritually.
Dogs know better, much better! Time again for man to learn from dogs!
My argument rests!
Reflections on last Thursday’s post.
Last Thursday, I published a post under the title of Oil, money, banks, guns and blood. It was such a departure from my normal style of blog post that I anticipated that it would slide by without any comment. Wrong! It had the highest readership of the week and attracted some powerful and insightful replies. So much so that I expressed the desire to reflect on those replies before responding. Thus, today’s post is my response to your comments and feelings.
First, Hariod Brawn of the blogsite Contentedness responded, in part:
Now, where are we? Val’s words are a good place to begin: “Nothing is what is seems, or will ever be the same again.” Nobody knows for sure, but piecing together fragments of world events, my instinct (fwiw) tells me that we are in the incipient stages of the collapse of the 20th.c. paradigm. Neoliberalism has failed; further than that, Capitalism has failed – we have no free markets where it counts; they’re all rigged. Politics has failed too, having been bought out by the corporates. [There are over 30,000 lobbyists in Washington alone] All that Western Governments have to offer is a doomed re-run of failed practices (same with Japan actually). Worse still, they have gone down on their knees and begged the financial sector to create a fix. The private banks have been given access to vast sums of QE cash at virtually zero interest in order to continue rigging markets (via their agents) all to their benefit whilst also creating huge market distortions in asset bubbles. Has the wealth they created trickled down? Has it hell. Whilst all this is going on, and as the film so clearly demonstrates, the Middle East looks like fulfilling its promise of the last century as being the flashpoint for warfare on a vast scale. And of course, if by some miracle we escape financial collapse, and world peace is not threatened by warfare, then the environment is going down the pan because – guess what? – our politicians have failed us once again. I have said enough on this.
Hariod then went on to recommend the films of Chris Hedges that will be featured on Learning from Dogs at a future date.
Then Val Boyco, her blogsite being Find Your Middle Ground, wrote a response before viewing the film:
Without being informed yet … my thinking is that the world we live in is so complex, stressful and fast that we can’t absorb everything that happens. We simplify and label, in order to make sense. We chop and segment in order to understand, but we miss the full story and many have lost the ability to grasp the bigger picture…. or are too fearful of going against the expectations of others and becoming one of “them” instead of one of “us”.
Then reinforced by her comment after watching the film:
I just watched the movie Paul. It is powerful and very disturbing. As you say, it undermines what we believe is real. It also reveals the complexity – misunderstanding – manipulation – corruption – opium, oil and the struggle for power – naivety – chaos.
In the dualistic fairy tale world of good vs evil it has created a nightmare of errors.
Nothing is what is seems.
Or will ever be the same again.
There was a comment from Patrice Ayme:
Giant American global corporations, the 200 largest ones, do 100 billion dollars of tax evasion through Luxembourg alone. Each year. Many are media companies. Wonder why stories make no sense?
Juncker directed that. Now he is head of the European Commission, and insist Greece shall pay every single penny.
As it happened, my dad was among a European group of geologists working for the Afghan government, who discovered Afghanistan’s riches… In the 1970s. All hell broke loose shortly thereafter.
I write about these sorts of things, day in, day out. But most people prefer the opium of feel-good…
Patrice then went further in offering a post over on his own blog that carried the specific title of Great Bitter Lake. Let me quote a little from that:
“Bitter Lake” is about the conspiracy between American plutocracy and Saudi plutocracy. Plutocrat Roosevelt was freshly flown from Yalta, to the Great Bitter Lake, on the Suez Canal. The idea was to steal the Maghreb, and the Middle East from the French and the British, by making a theocratic alliance.
At Yalta, Roosevelt had given half of Europe to his Comrade Stalin. (Plutocrats of the world naturally unite!)
Never mind that Poland had fought the Nazis courageously the Nazis, at a time when the USA was militarily and diplomatically collaborating… with the Nazis (or maybe, precisely, the Poles had to be punished!) Roosevelt had to be strict: the French had successfully escaped from the military occupation (AMGOT) he had set-up for them.
The movie “Bitter Lake” exposes (some) of the American plutocracy led conspiracies which led to the devastation, among other things, of Afghanistan, and other constituencies, thanks to the Wahhabist Islam it unleashed on the world.
Readers of this site will be familiar with the general ambiance.
One caveat: all what is in the documentary and makes American plutocrats (Roosevelt) and their servants (Reagan) look bad, is correct. However the real situation, the real badness is way worse. (For example the secret, official USA intervention in Afghanistan was under Carter, on July 3, 1979. However the real even more secret intervention, through the Pakistani ISI was even earlier and even more vicious.
So what is my response?
It is this:
In 1887, Oscar Wilde said, referring to the differences between the British and the Americans: “We have really everything in common with America nowadays, except, of course, language.”
By way of example there is a saying back in my old country that when something is “… going to the dogs”, it means an irreversible decline in standards; the phrase usually aimed at an organisation or even a country.
Many, especially those of my age, might nod sagely and reflect that something ‘is going to the dogs‘ in terms of the wider Western world.
Let me be specific. There are destructive and dysfunctional issues in modern societies that I would list as: Selfishness; Power & Corruption; Short-termism; Materialism; Population growth; Greed, inequality and poverty. It’s not an exhaustive list!
Now many would argue the ‘whys’ and ‘wherefores’ about what precisely is wrong with Western societies in this 21st century but far fewer would argue with the underlying premise; that something is fundamentally wrong with today’s world.
Indeed, one of the things that is impossible to miss is the body language, the look on a face, the shrug of a shoulder, when one casually remarks that these are interesting times! From strangers and friends alike.
There is no question that what mankind has ‘enjoyed’ these last fifty years or so cannot be continued for very much longer. That the era since the 1960s of growth, materialism and consumption is running one very basic and fundamental resource dry. You know the one I am referring to: Planet Earth.
My hope is that the widely-felt feelings that something is fundamentally wrong with today, are the feelings man has always experienced, since time immemorial, when mankind has passed through the threshold between two eras.
My hope is that the new era, one that we quite possibly may now just be entering, a new era of sustainable living on this planet, of social and political changes to replace extreme levels of inequality, of stronger communities of like-minded persons, will be obvious to all, but especially obvious to our next generation, within the next ten years; possibly fewer than ten years.
One thing is for sure. The sharing of ideas and feelings as is the style of modern blogging is critical to the forming of the opinions that precede the changes that so many now see as unstoppable.
The history of power, control, those who wield it, and where it has taken us all.
There is a real pain in me as I start into today’s post. A pain that comes from agonising over whether or not to write in this vein. A pain that has its roots in me being forced to accept that global politics, money and power-plays are much worse than I ever wanted to believe.
What, you must be asking, has got me plunging so far into this dark place? When just twenty-four hours ago I was writing of peace, calm and deep meditation?
Simply a film!
A film that was uploaded by the BBC a few days ago exclusively on to their BBC iPlayer platform.
The film is called Bitter Lake and here’s the trailer.
The full film is 2 hours, 20 minutes long. (But note that the film is age-restricted for obvious reasons.)
I can’t encourage you to watch it. For if you do, the world may never seem the same to you.
But Jeannie and I did watch it and think it should be shared widely. And, yes, it has changed the world for us.
Here’s how it is described by Adam Curtis and the BBC.
Published on Jan 26, 2015
Shown exclusively on the BBC iPlayer service in the UK
This upload is for those outside of the UK
Politicians used to have the confidence to tell us stories that made sense of the chaos of world events.
But now there are no big stories and politicians react randomly to every new crisis – leaving us bewildered and disorientated.
And journalism – that used to tell a grand, unfurling narrative – now also just relays disjointed and often wildly contradictory fragments of information.
Events come and go like waves of a fever. We – and the journalists – live in a state of continual delirium, constantly waiting for the next news event to loom out of the fog – and then disappear again, unexplained.
And the formats – in news and documentaries – have become so rigid and repetitive that the audiences never really look at them.
In the face of this people retreat from journalism and politics. They turn away into their own worlds, and the stories they and their friends tell each other.
I think this is wrong, sad, and bad for democracy – because it means the politicians become more and more unaccountable.
I have made a film that tries to respond to this in two ways.
It tells a big story about why the stories we are told today have stopped making sense.
But it is also an experiment in a new way of reporting the world. To do this I’ve used techniques that you wouldn’t normally associate with TV journalism. My aim is to make something more emotional and involving – so it reconnects and feels more real.
BBC iPlayer has given me the opportunity to do this – because it isn’t restrained by the rigid formats and schedules of network television. It’s a place you can go to experiment and try out new ideas.
It is also liberating – both because things can be any length, and also because it allows the audience to watch the films in different ways.
The film is called Bitter Lake. It is a bit of an epic – it’s two hours twenty minutes long.
It tells a big historical narrative that interweaves America, Britain, Russia and Saudi Arabia. It shows how politicians in the west lost confidence – and began to simplify the stories they told. It explains why this happened – because they increasingly gave their power away to other forces, above all global finance.
But there is one other country at the center of the film.
This is because Afghanistan is the place that has repeatedly confronted politicians, as their power declines, with the terrible truth – that they cannot understand what is going on any longer. Let alone control it.
The film shows in detail how all the foreigners who went to Afghanistan created an almost totally fictional version of the country in their minds.
They couldn’t see the complex reality that was in front of them – because the stories they had been told about the world had become so simplified that they lacked the perceptual apparatus to see reality any longer.
And this blindness led to a terrible disaster – support for a blatantly undemocratic government, wholesale financial corruption and thousands of needless deaths.
A horrific scandal that we, in our disconnected bubble here in Britain, seem hardly aware of. And even if we are – it is dismissed as being just too complex to understand.
But it is important to try and understand what happened. And the way to do that is to try and tell a new kind of story. One that doesn’t deny the complexity and reduce it to a meaningless fable of good battling evil – but instead really tries to makes sense of it.
I have got hold of the unedited rushes of almost everything the BBC has ever shot in Afghanistan. It is thousands of hours – some of it is very dull, but large parts of it are extraordinary. Shots that record amazing moments, but also others that are touching, funny and sometimes very odd.
These complicated, fragmentary and emotional images evoke the chaos of real experience. And out of them I have tried to build a different and more emotional way of depicting what really happened in Afghanistan.
A counterpoint to the thin, narrow and increasingly destructive stories told by those in power today.
And I must include this comment from the relevant page on BBC Blogs:
Quite simply one of the best films I’ve ever watched. The theme and content made so many connections linking events of the last 40 years. It’s perhaps time to reflect on power ,control and those who wield it . The official narrative is not our narrative , we have a choice to decide what we believe . Time to reflect and make that choice.
Thanks for such an informing film.
Here is the film.
George Monbiot perfectly spells it out.
Regular readers of this place will know that it is a rare couple of weeks without a republication of a George Monbiot essay. His voice seems so often to be a ray of common-sense shining into a dark cave of present-day madness. None more obvious than this essay that was published last Monday under the title of There Is An Alternative.
It’s a huge honour to be able to share this with you, dear readers.
There Is An Alternative
December 8, 2014
The great political question of our age is what to do about corporate power. It’s time we answered it.
By George Monbiot, published in the Guardian 8th December 2014
Does this sometimes feel like a country under enemy occupation? Do you wonder why the demands of so much of the electorate seldom translate into policy? Why the Labour Party, like other former parties of the left, seems incapable of offering effective opposition to market fundamentalism, let alone proposing coherent alternatives? Do you wonder why those who want a kind and decent and just world, in which both human beings and other living creatures are protected, so often appear to find themselves confronting the entire political establishment?
If so, you have already encountered corporate power. It is the corrupting influence that prevents parties from connecting with the public, distorts spending and tax decisions and limits the scope of democracy. It helps to explain the otherwise inexplicable: the creeping privatisation of health and education, hated by almost all voters; the private finance initiative, which has left public services with unpayable debts(1,2); the replacement of the civil service with companies distinguished only by their incompetence(3); the failure to re-regulate the banks and to collect tax; the war on the natural world; the scrapping of the safeguards that protect us from exploitation; above all the severe limitation of political choice in a nation crying out for alternatives.
There are many ways in which it operates, but perhaps the most obvious is through our unreformed political funding system, which permits big business and multimillionaires effectively to buy political parties. Once a party is obliged to them, it needs little reminder of where its interests lie. Fear and favour rule.
And if they fail? Well, there are other means. Before the last election, a radical firebrand said this about the lobbying industry(4): “It is the next big scandal waiting to happen … an issue that exposes the far-too-cosy relationship between politics, government, business and money. … secret corporate lobbying, like the expenses scandal, goes to the heart of why people are so fed up with politics.” That, of course, was David Cameron, and he’s since ensured that the scandal continues. His lobbying act restricts the activities of charities and trade unions, but imposes no meaningful restraint on corporations(5).
Ministers and civil servants know that if they keep faith with corporations while in office they will be assured of lucrative directorships in retirement. Dave Hartnett, who, as head of the government’s tax collection agency HMRC, oversaw some highly controversial deals with companies like Vodafone and Goldman Sachs(6,7), apparently excusing them from much of the tax they seemed to owe, now works for Deloitte, which advises companies like Vodafone on their tax affairs(8). As head of HMRC he met one Deloitte partner 48 times(9).
Corporations have also been empowered by the globalisation of decision-making. As powers but not representation shift to the global level, multinational business and its lobbyists fill the political gap. When everything has been globalised except our consent, we are vulnerable to decisions made outside the democratic sphere.
The key political question of our age, by which you can judge the intent of all political parties, is what to do about corporate power. This is the question, perennially neglected within both politics and the media, that this week’s series of articles will attempt to address. I think there are some obvious first steps.
A sound political funding system would be based on membership fees. Each party would be able to charge the same fixed fee for annual membership (perhaps £30 or £50). It would receive matching funding from the state as a multiple of its membership receipts. No other sources of income would be permitted. As well as getting the dirty money out of politics, this would force political parties to reconnect with the people, to raise their membership. It will cost less than the money wasted on corporate welfare every day.
All lobbying should be transparent. Any meeting between those who are paid to influence opinion (this could include political commentators like myself) and ministers, advisers or civil servants in government should be recorded, and the transcript made publicly available. The corporate lobby groups that pose as thinktanks should be obliged to reveal who funds them before appearing on the broadcast media(10,11), and if the identity of one of their funders is relevant to the issue they are discussing, it should be mentioned on air.
Any company supplying public services would be subject to freedom of information laws (there would be an exception for matters deemed commercially confidential by the information commissioner). Gagging contracts would be made illegal, in the private as well as the public sector (with the same exemption for commercial confidentiality). Ministers and top officials should be forbidden from taking jobs in the sectors they were charged with regulating.
But we should also think of digging deeper. Is it not time we reviewed the remarkable gift we have granted to companies in the form of limited liability? It socialises the risks which would otherwise be carried by a company’s owners and directors, exempting them from the costs of the debts they incur or the disasters they cause, and encouraging them to engage in the kind of reckless behaviour that caused the financial crisis. Should the wealthy authors of the crisis, like Fred Goodwin or Matt Ridley, not have incurred a financial penalty of their own?
We should look at how we might democratise the undemocratic institutions of global governance, as I outlined in my book The Age of Consent(12). This could involve the dismantling of the World Bank and the IMF, which are governed without a semblance of democracy, and cause more crises than they solve, and their replacement with a body rather like the international clearing union designed by John Maynard Keynes in the 1940s, whose purpose was to prevent excessive trade surpluses and deficits from forming, and therefore international debt from accumulating.
Instead of treaties brokered in opaque meetings between diplomats and transnational capital (of the kind now working towards a Transatlantic Trade and Investment partnership), which threaten democracy, the sovereignty of parliaments and the principle of equality before the law, we should demand a set of global fair trade rules, to which multinational companies would be subject, losing their licence to trade if they break them. Above all perhaps, we need a directly elected world parliament, whose purpose would be to hold other global bodies to account. In other words, instead of only responding to an agenda set by corporations, we must propose an agenda of our own.
This is not only about politicians, it is also about us. Corporate power has shut down our imagination, persuading us that there is no alternative to market fundamentalism, and that “market” is a reasonable description of a state-endorsed corporate oligarchy. We have been persuaded that we have power only as consumers, that citizenship is an anachronism, that changing the world is either impossible or best effected by buying a different brand of biscuits.
Corporate power now lives within us. Confronting it means shaking off the manacles it has imposed on our minds.
Another reposting of a Monbiot essay.
I’m preparing this post on Sunday; i.e. three days ago. Reason is that my sister, Elizabeth, and friend, Merle, are arriving on Monday afternoon (as in two days ago) bringing us up to three guests in the house. My mother leaves on tomorrow morning and then Elizabeth and Merle depart on Friday morning. So for all the right reasons, Learning from Dogs is taking a backstage. Hence me doing as much as I can ahead of time.
In Monday’s post, The tracks we leave, towards the end I wrote, “The utter madness of mankind’s group blindness is beyond comprehension.” Many know that there is something very badly wrong with the way politics is operating today. Yet, at the same time, many intuitively know the political changes that mankind has to see if there is to be any chance of a sustainable future for mankind on this planet.
Thus George Monbiot’s essay published on the 29th July makes encouraging reading in the context of the growing confidence of the UK Green Party. It is republished here with the kind permission of George Monbiot.
July 29, 2014
The justifications for extreme inequality have collapsed. But only the Green Party is prepared to take the obvious step
By George Monbiot, published in the Guardian 30th July 2014
When inequality reaches extreme and destructive levels, most governments seek not to confront it but to accommodate it. Wherever wealth is absurdly concentrated, new laws arise to protect it.
In Britain, for example, successive governments have privatised any public asset which excites corporate greed. They have cut taxes on capital and high incomes. They have legalised new forms of tax avoidance (1). They have delivered exotic gifts like subsidised shotgun licences and the doubling of state support for grouse moors (2). And they have dug a legal moat around the charmed circle, criminalising, for example, the squatting of empty buildings (3) and most forms of peaceful protest (4). However grotesque inequality becomes, however closely the accumulation of inordinate wealth resembles legalised theft, political norms shift to defend it.
None of this should surprise you. The richer the elite becomes, and the more it has to lose, the greater the effort it makes to capture public discourse and the political system. It scarcely bothers to disguise its wholesale purchase of political parties, by means of an utterly corrupt and corrupting funding system (5,6). You can feel its grip not only on policy but also on the choice of parliamentary candidates and appointments to the cabinet. The very rich want people like themselves in power, which is why we have a government of millionaires (7).
But that describes only one corner of their influence. They fund lobby groups, thinktanks and economists to devise ever more elaborate justifications for their seizure of the nation’s wealth (8). These justifications are then amplified by the newspapers and broadcasters owned by the same elite.
Among the many good points Thomas Piketty makes in Capital in the 21st Century – his world-changing but surprisingly mild book – is that extreme inequality can be sustained politically only through an “apparatus of justification.” (9) If voters can be persuaded that insane levels of inequality are sane, reasonable and even necessary, then the concentration of income can keep growing. If they can’t, then either states are forced to act, or revolutions happen.
For the notion that inequalities must be justified sits at the heart of democracy. It is possible to accept that some can have much more than others if one of two conditions are met: either that they reached this position through the exercise of their unique and remarkable talent; or that this inequality is good for everyone. So the network of think tanks, economists and tame journalists must make these justifications plausible.
It’s a tough job. If wages reflect merit, why do they seem so arbitrary? Are the richest executives 50 or 100 times better at their jobs than their predecessors were in 1980? Are they 20 times more skilled and educated than the people immediately below them, even though they went to the same business schools? Are US executives several times as creative and dynamic as those in Germany? If so, why are their results so unremarkable?
It is, of course, all rubbish. What we see is not meritocracy at work at all, but a wealth grab by a nepotistic executive class which sets its own salaries, tests credulity with its ridiculous demands and discovers that credulity is an amenable customer. They must marvel at how they get away with it.
Moreover, as education and even (in the age of the intern) work becomes more expensive, the opportunities to enter the grabbers’ class diminish. The nations which pay the highest top salaries, such as the US and Britain, are also among the least socially mobile (10). Here, you inherit not only wealth but opportunity.
Aha, they say, but extreme wealth is good for all of us. All will be uplifted by their god’s invisible hand. Their creed is based on the Kuznet’s curve, the graph which appears to show that inequality automatically declines as capitalism advances, spreading wealth from the elite to the rest.
When Piketty took the trouble to update the curve, which was first proposed in 1955, he discovered that the redistribution it documented was an artefact of the peculiar circumstances of its time. Since then the concentration of wealth has reasserted itself with a vengeance (11). The reduction in inequality by 1955 was not an automatic and inherent feature of capitalism, but the result of two world wars, a great depression and the fierce response of governments to these disruptions.
For example, the top federal income tax rate in the US rose from 25% in 1932 to 94% in 1944. The average top rate throughout the years 1932 to 1980 was 81%. In the 1940s, the British government imposed a top income tax of 98% (12). The invisible hand? Hahaha. As these taxes were slashed by Reagan and Thatcher and the rest, inequality boomed once more, and is exploding today. This is why the neoliberals hate Piketty with such passion and poison: he has destroyed with data the two great arguments with which the apparatus of justification seeks to excuse the inexcusable.
So here we have a perfect opportunity for progressive parties: the moral and ideological collapse of the system of thought to which they were previously in thrall. What do they do? Avoid the opportunity like diphtheria. Cowed by the infrastructure of purchased argument, Labour fiddles and dithers (13).
But there is another party, which seems to have discovered the fire and passion that moved Labour so long ago: the Greens. Last week they revealed that their manifesto for the general election will propose a living wage, the renationalisation of the railways, a maximum pay ratio (no executive should receive more than 10 times the salary of the lowest paid worker), and, at the heart of their reforms, a wealth tax of the kind Piketty recommends (14).
Yes, it raises plenty of questions, but none of them are unanswerable, especially if this is seen as one step towards the ideal position: a global wealth tax, that treats capital equally, wherever it might lodge. Rough as this proposal is, it will start to challenge the political consensus and draw people who thought they had nowhere to turn. Expect the billionaires’ boot boys to start screaming, once they absorb the implications. And take their boos and jeers as confirmation that it’s onto something. You wanted a progressive alternative? You’ve got it.
3. Clause 144, Legal Aid, Sentencing and Punishment of Offenders Act 2012.
9. Thomas Piketty, 2014. Capital in the Twenty-First Century. Harvard University Press.
10. Thomas Piketty, as above.
11. Thomas Piketty, as above.
12. Thomas Piketty, as above.
Want to know some more about the UK Green Party? Their website is here.
Yes, I find them annoying too!
When you are a WordPress user, as is Learning from Dogs, you can pay $30 a year to stop advertisements from appearing on one’s blogsite.
This is how WordPress explain their policy on advertising:
We sometimes display advertisements on your blog to help pay the bills. This keeps free features free! We only run them in limited places, and we do not show ads to logged-in readers, which means only a very small percentage of your page views will actually contain ads. To eliminate ads on your blog entirely, you can purchase the No-Ads Upgrade for a single blog (per year).
I choose not to pay that upgrade, despite the ads being annoying; of that I have no doubt.
For this reason.
WordPress pay an amount of their advertising income to the owner of the blog. Thus twenty-four hours ago, WordPress sent me an email:
Just thought you’d like to know WordPress.com sent you $106.23 USD.
I’m not sure but I think that covers the last twelve months.
That $106 will be divided into two with $53 staying with Jean and me and $53 going to our nearest humane society; Rogue Valley Humane Society.
Just wanted to let you know.
How the foreclosure crisis was a boon for the super wealthy.
For some time now, must be quite a few years, I have subscribed to Yves Smith’s Naked Capitalism blog. I do so for a number of reasons.
Thus it was that a few days ago I read with a mixture of anger and disgust an article about the consequences of the foreclosure crisis on the wealthy. Within a few hours of me requesting by email permission to republish that article on Learning from Dogs came the reply from Yves granting such permission.
Try not to get too angry!
SUNDAY, OCTOBER 6, 2013
This is Naked Capitalism fundraising week. 53 donors [now well over 400, Ed.] have already invested in our efforts to shed light on the dark and seamy corners of finance. Join us and participate via our Tip Jar or another credit card portal, WePay in the right column, or read about why we’re doing this fundraiser and other ways to donate, such as by check, as well as our current goal, on our kickoff post.
It’s a welcome departure to see Adam Davidson’s weekly column in the New York Times, which usually puts a happy face on how the 1% are winning the class war in America, have a guest writer look at the other side of the story.
Catherine Rampell has a short but compelling piece on how the foreclosure crisis was wealth transfer from lower and middle income families to the rich. Her points are simple: the typical person who lost their home wasn’t a greedhead who bought too much house or refied to buy flat panel TVs and go on cruises (if you hang out with mortgage types, you’ll get a big dose of profligate consumer urban legend). The people who were like that (and there were some) for the most part were in subprime loans that reset in 2007 and 2008 and were in the early wave of foreclosures. The people who’ve lost their homes in later foreclosures were overwhelmingly people who had the bad fortune to buy late in the housing bubble (so when the bust hit, they had negative equity and couldn’t use lower rates to refi into cheaper payments) and took economic hits as a direct result of the crisis (hours cuts and job losses; other people who were hurt were in the more typical “shit happens” categories, like suffering medical problems, with their situation made much worse by their inability to sell or refinance their home).
Rampell’s contribution is to look at the phenomenon of investors, both big and small, and how they’ve bought properties at foreclosure and then flipped them. Separately, Josh Rosner recently released the astonishing statistic: that sales of owner-occupied properties showed only a 1% gain in the last 12 months. The gains that have been driving the indexes were all in investor owned properties. Some flipped to other investors. In hot markets, local investors have been doing “mini-bulks,” acquiring small portfolios to sell to private equity investors, some without renovating them, others with modest fix-ups. Others sold them to homebuyers.
Rampell uses the example of a couple who believed that renting was throwing away their money, and had the bad luck to buy a moderately-priced fixer-upper in early 2007. Each wage earner saw their income drop and unable to get a loan modification, they lost their home. Their $309,000 Seattle home went to an investor for $155,000 in the summer of 2011. That investor just sold it to a homeowner for $290,000, not far below what the hapless couple paid for it. But the new buyer paid all cash.
Rampell tells us:
Of the 87,062 foreclosures in the last five years that were bought by corporate investors and have been flipped, about a quarter were sold for at least $100,000 more than what the investor originally paid, according to [an online real estate listings site] Redfin (Although it’s impossible to know how much investors spent on upgrades or renovations.)….
The boom-bust-flip phenomenon is just one of the most obvious ways that research suggests the financial crisis has benefited the upper class while brutalizing the middle class. Rents have risen at twice the pace of the overall cost-of-living index, partly because middle-class families can’t get the credit they need to buy. That means “landlords can raise rents with impunity,” says Glenn Kelman, chief executive of Redfin. And according to a report by David Autor, the M.I.T. economist, job losses during and after the recession were concentrated in midskilled and midwage jobs, like white-collar sales, office and administrative jobs; and blue-collar production, craft, repair and operative jobs. Employment for higher-skilled workers, on the other hand, has grown substantially.
There is a second way foreclosures have served as a wealth transfer to the capitalist classes. Foreclosures don’t necessarily result in evictions. Banks often leave properties in a “zombie” state, starting foreclosures but not completing them, leaving the owner who thought he was foreclosed on still on the hook for property taxes. Another variant which is much less damaging is to leave the homeowner in place. I recently met an investor who is acquiring homes in Atlanta. The day after he buys a house, he goes to introduce himself to the former homeowner to see if he can work out a deal to keep them in place as tenant. In the overwhelming majority of cases, he can. “They were paying $1100 on their mortgage and the bank wouldn’t give them a mod. I’ll let them rent for $700, which is way above what they’d have gotten if they wrote the principal down to the price at which I bought the house. And I tell the tenants I’d be happy to sell the home to them.” We didn’t discuss details, but it sounded as if he’d be willing to structure rent to own deals (where part of the rent would go to a down payment on the house).
He was clear that his business depended on what he saw as value destroying behavior by banks. He described how he’d recently bought a home and when he went for his usual visit to the house, a well-dressed black man met him and invited him in, saying he’d be out in 30 days and assumed it wasn’t a problem. The new owner saw the house was in impeccable shape. He chatted with the owner a bit and found out he was a bodybuilder with a high-end training business. He asked the homeowner: “You look like you take good care of yourself and the house. You’d been paying on time. What happened?”
The trainer told him that he’d bought the house at the peak of the cycle for $160,000. The house was clearly now worth way less. He tried to get the bank to modify it to a principal balance of $100,000. The bank wouldn’t consider it. “So I bought a house which is comparable to this one for $50,000 and gave this one up.”
In this case, the homeowner had enough cash to arbitrage himself. The investor told me he’d bought the foreclosed home for $40,000. Had the bank cut a deal for $100,000 (and who knows, the homeowner might have accepted a higher number), it would have come out way ahead. But that also assumes that the bank owned the mortgage. It’s pretty much a given that the bank was a servicer, and as we’ve seen again and again, servicers don’t have the incentives or the infrastructure to do mods. So investor in the mortgages lose, homeowners lose. The winners are the banks as inefficient looters (the money they skim off the servicing is chump change relative to the damage done by negligent and predatory servicing) and the investors who profit by picking up the pieces. This is isn’t a well-functioning economic system, it’s rentier capitalism. And it’s looking more and more like a doomsday machine for what remains of the middle class.
Can’t add anything polite to this! Except, to say it’s a very long way from integrity!