Category: Politics

Greece, or grease?

The agony of watching a country (and a planet) slip.

Readers will be aware that I very rarely stroll through the tangled pastures of international politics and finance.  The only reason that I do so today is on the back of a very impressive letter published in the German newspaper  Handelsblatt.  That was brought to my attention by my subscription to Mike Shedlock’s (Mish) Blog Mish’s Global Economic Trend Analysis.  You will see that I muse at two levels about where we are today.

Earlier, I had read in last Saturday’s, The Economist a leader on Greece’s debt crisis, entitled Trichet the intransigent.   That started thus,

The European Central Bank’s refusal to consider a restructuring of Greek debt could wreck the euro zone
May 12th 2011 | from the print edition

IF THE stakes were not so high, Europeans’ incompetence in the euro-zone debt crisis would be comic.

and concluded thus,

It is time for the Germans and the IMF to call the ECB’s bluff. Together they should demand, and instigate, a restructuring of Greek debt. Germany should push other European governments to cough up money to support Greek banks and, if necessary, to make whole the ECB. The fund, which knows how to restructure debt, must ensure the process is run in a competent manner. The ECB will then be faced with a choice: go along with an orderly restructuring, or trigger a much greater mess by in effect forcing Greece out of the euro zone. Surely Mr Trichet does not want that to be his legacy.

So with that as background, the letter to Georgios Papandreou, Prime Minister of Greece written by Gabor Steingart is powerful and hard hitting.  Here it is in full.

Mr. Prime Minister,

Dear Mr. Papandreou,

With the greatest respect, the Western world is monitoring your efforts to master your country’s debt crisis. No other democratic country has ever managed anything like that in peacetime. You are shrinking the state apparatus; you are fighting corruption; you are teaching your fellow countrymen how to become honest tax-payers.

You are a modern hero. You are attempting the impossible. As the son of a persecuted and ostracized politician who was chased by the military junta you grew up close to danger. When the officers were looking for your father who was hiding in the attic, they threatened you by putting an unlocked pistol to your forehead and challenged you to betray your father. You denied your father’s presence until he, worried about his son’s life, left his hiding place.Later you fled with him to America where you spent your adolescence. You are alarger-than-life-character.

Preceding governments almost ruined your country. Debts amounting to 340 billion Euros are burdening the Greek state,equaling 155 times the profit of the 60 largest companies of your country and 1.5 times the amount of debts the Maastricht Treaty allows. A year ago, this newspaper, Germany’s biggest Business Daily, appealed to the public to buy Greek government bonds in order to give to the country what Greece needs just as urgently as money: confidence. We also wanted to assist in breaking through the negative spiral of growing doubt and increasing interest rates. Everyone who granted you guarantees and loans wanted it, the European Union, the International Monetary Fund, the heads of state and government.

But since then, the spiral has picked up in speed instead of slowing down. In May 2010 the interest rate at which your country was given money on a ten year basis was at eight per cent. Today, it is at 16 per cent. And in all probability, it will be going up further. The bitter truth to which you and all parties who wanted to help Greece have to admit is that the help doesn’t help. Your country is getting deeper and deeper into the mess. Debts are growing, the gross national product will decrease by at least three per cent in 2011. But it would have to grow by three per cent instead if you were to lower your debt to the allowedlimit until 2040. This is becoming more and more unrealistic. You can’t starve and build up your muscles at the same time.

The truth that Greece has to cut back and save has turned into an untruth. The right thing has turned into the wrong thing. You already cut pensions, lowered the salaries of civil servants by 30 per cent and raised the prices of gas by almost 50 per cent. You can’t restore the health of your country by saving. And the European Union can’t restore your country’s health by again and again injecting new loans.

Soon, the day will come when the tortured body will surrender. The Greek construction industry already shrank by 70 per cent. Sales of car dealers sank by half. A daily export volume of 50 million Euros Greece is achieving  far too little.  Soon the day will come which investors fear in their nightmares. Then the word “insolvency” will be on everyone’s lips.

But it is also the day when a new truth will be born: Don’t save but invest, they will tell you – so that the Greek economy will grow again. Do not service debt with debt, you then will be recommended, but spread out the debt service, cut it and maybe even completely suspend it for a while. It will be a day of impositions, especially for those who lendmoney to you and your people. Financial markets will grind to a halt in horror – and then they will turn to embrace the future. Because Argentina in 2001, Mexico at the beginning of the eighties and Germany after World War II taught us that there is a life after death – at least, in the case of highly indebted states.

Mr. Papandreou, so far, you attempted the impossible. Now you should do the possible. Just as you deceived the officers as a boy and denied to know where your father was hiding you now must repudiate the pride of the Greeks – in order to save your country. Come to meet the new uncomfortable truth before it knocks at your door. It’s already on its way.

Respectfully yours,

Gabor Steingart

The author is an award winning Journalist, the former White House Correspondent of “Der Spiegel” and now Handelsblatt’s  Editor-in-Chief.  His book “The war for wealth. The true story of globalization or while the flat world is broken” was  published in the US, GB, China and several other countries by McGraw Hill, New York, in 2008.

You may contact him at

steingart@handelsblatt.com


Powerful, as I said.

In a sense, in a very real sense, this illustration of the end game of our love affair with debt is symptomatic of the end game in terms of mankind’s love affair with, well with mankind.  The following was written by an inmate of Oklahoma Prison in 1998.

At the root of my humanity lies a potentially insatiable self-centredness.  Given its way, it can become unquenchable. Nothing, not even the richest of imagination, will put out its fire.

This ‘what’s in it for me’ mindset is at the root of all my problems and is where my fears live.  From those fears come anger, greed, intolerance, and a host of other shortcomings.

It is no accident that all religions point to the forgetting of self, because all religions know salvation lies in self-forgetting.

As we head relentlessly towards a level of 400 parts per million (PPM) of carbon dioxide in the atmosphere, 50 PPM above the highest safe limit determined by climate scientists, the time for mankind to move on from the debt-laden, over-leveraged, disconnected life from Planet Earth, is now.

That’s now!

eaarth, the book.

The latest edition of Bill McKibben’s book.

I’m about a third of the way through McKibben’s book eaarth.  To say that it is disturbing is an understatement.  I’ll tell you why.

eaarth

Most people when they think about it have, at the very least, feelings of guilt or denial in terms of what humans are doing to the planet’s environment that humans require for survival.  Many of us know in our hearts that it is probably not good news but maybe really thinking about it can be put off for a little longer!

It’s almost as though we know that those aches and pains are a sign of something potentially dangerous to our health but, hey ho, I’ll put off seeing the doctor for a little bit longer.

Then the day comes when one goes to the doctor and he confirms your worst fears; what you really knew deep in your heart.

Thus it is with the planet.  Most of us know that we have been treating the planet as an inexhaustible resource for the sole benefit of mankind and to hell with the future.  The you read a book such as eaarth from Bill McKibben and realise the extreme folly of denial, self-delusion, and the rest.  Here’s the preface of the book,

PREFACE

I’m writing these words on a gorgeous spring afternoon, perched on the bank of a brook high along the spine of the Green Mountains, a mile or so from my home in the Vermont mountain town of Ripton. The creek burbles along, the picture of a placid mountain stream, but a few feet away there’s a scene of real violence a deep gash through the woods where a flood last summer ripped away many cubic feet of tree and rock and soil and drove it downstream through the center of the village. Before the afternoon was out, the only paved road into town had been demolished by the rushing water, a string of bridges lay in ruins, and the governor was trying to reach the area by helicopter.

Twenty years ago, in 1989, I wrote the first book for a general audience about global warming, which in those days we called the “greenhouse effect.” That book, The End of Nature, was mainly a philosophical argument. It was too early to see the practical effects of climate change but not too early to feel them; in the most widely excerpted passage of the book, I described walking down a different river, near my then-home sixty miles away, in New York’s Adirondack Mountains. Merely knowing that we’d begun to alter the climate meant that the water fl owing in that creek had a different, lesser meaning. “Instead of a world where rain had an independent and mysterious existence, the rain had become a subset of human activity,” I wrote. “The rain bore a brand; it was a steer, not a deer.”

Now, that sadness has turned into a sharper-edged fear. Walking along this river today, you don’t need to imagine a damned thing the evidence of destruction is all too obvious. Much more quickly than we would have guessed in the late 1980s, global warming has dramatically altered, among many other things, hydrological cycles. One of the key facts of the twenty- first century turns out to be that warm air holds more water vapor than cold: in arid areas this means increased evaporation and hence drought. And once that water is in the atmosphere, it will come down, which in moist areas like Vermont means increased deluge and flood. Total rainfall across our continent is up 7 percent,1 and that huge change is accelerating. Worse, more and more of it comes in downpours.2 Not gentle rain but damaging gully washers: across the planet, flood damage is increasing by 5 percent a year.3 Data show dramatic increases 20 percent or more in the most extreme weather events across the eastern United States, the kind of storms that drop many inches of rain in a single day.4Vermont saw three flood emergencies in the 1960s, two in the 1970s, three in the 1980s and ten in the 1990s and ten so far in the first decade of the new century.

In our Vermont town, in the summer of 2008, we had what may have been the two largest rainstorms in our history about six weeks apart. The second and worse storm, on the morning of August 6, dropped at least six inches of rain in three hours up on the steep slopes of the mountains. Those forests are mostly intact, with only light logging to disturb them but that was far too much water for the woods to absorb. One of my neighbors, Amy Sheldon, is a river researcher, and she was walking through the mountains with me one recent day, imagining the floods on that August morning. “You would have seen streams changing violently like that,” she said, snapping her fingers. “A matter of minutes.” A year later the signs persisted: streambeds gouged down to bedrock, culverts obliterated, groves of trees laid to jackstraws.

Our town of barely more than five hundred people has been coping with the damage ever since. We passed a $400,000 bond to pay for our share of the damage to town roads and culverts. (The total cost was in the millions, most of it paid by the state and federal governments.) Now we’re paying more to line the creek with a seven-hundred-foot-long wall of huge boulders riprap, it’s called where it passes through the center of town, a scheme that may save a few houses for a few years, but which will speed up the water and cause even more erosion downstream. There’s a complicated equation for how wide a stream will be, given its grade and geology; Sheldon showed it to me as we reclined on rocks by the riverbank. It mathematically defines streams as we have known them, sets an upper limit to their size. You could use it to plan for the future, so you could know where to build and where to let well enough alone. But none of that planning works if it suddenly rains harder and faster than it has ever rained before, and that’s exactly what’s now happening. It’s raining harder and evaporating faster; seas are rising and ice is melting, melting far more quickly than we once expected. The first point of this book is simple: global warming is no longer a philosophical threat, no longer a future threat, no longer a threat at all. It’s our reality. We’ve changed the planet, changed it in large and fundamental ways. And these changes are far, far more evident in the toughest parts of the globe, where climate change is already wrecking thousands of lives daily. In July 2009, Oxfam released an epic report, “Suffering the Science,” which concluded that even if we now adapted “the smartest possible curbs” on carbon emissions, “the prospects are very bleak for hundreds of millions of people, most of them among the world’s poorest.”5

And so this book will be, by necessity, less philosophical than its predecessor. We need now to understand the world we’ve created, and consider urgently how to live in it. We can’t simply keep stacking boulders against the change that’s coming on every front; we’ll need to figure out what parts of our lives and our ideologies we must abandon so that we can protect the core of our societies and civilizations. There’s nothing airy or speculative about this conversation; it’s got to be uncomfortable, staccato, direct.

Which doesn’t mean that the change we must make or the world on the other side will be without its comforts or beauties. Reality always comes with beauty, sometimes more than fantasy, and the end of this book will suggest where those beauties lie. But hope has to be real. It can’t be a hope that the scientists will turn out to be wrong, or that President Barack Obama can somehow fix everything. Obama can help but precisely to the degree he’s willing to embrace reality, to understand that we live on the world we live on, not the one we might wish for. Maturity is not the opposite of hope; it’s what makes hope possible.

The need for that kind of maturity became painfully clear in the last days of 2009, as I was doing the final revisions for this book. Many people had invested great hope that the Copenhagen conference would mark a turning point in the climate change debate. If it did, it was a turning point for the worse, with the richest and most powerful countries making it abundantly clear that they weren’t going to take strong steps to address the crisis before us. They looked the poorest and most vulnerable nations straight in the eye, and then they looked away and concluded a face- saving accord with no targets or timetables. To see hope dashed is never pleasant. In the early morning hours after President Obama jetted back to Washington, a group of young protesters gathered at the metro station outside the conference hall in Copenhagen.It’s our future you decide, they chanted.

My only real fear is that the reality described in this book, and increasingly evident in the world around us, will be for some an excuse to give up. We need just the opposite increased engagement. Some of that engagement will be local: building the kind of communities and economies that can withstand what’s coming. And some of it must be global: we must step up the fight to keep climate change from getting even more powerfully out of control, and to try to protect those people most at risk, who are almost always those who have done the least to cause the problem. I’ve spent much of the last two de cades in that fight, most recently helping lead 350.org, a huge grassroots global effort to force dramatic action. It’s true that we’ve lost that fight, insofar as our goal was to preserve the world we were born into. That’s not the world we live on any longer, and there’s no use pretending otherwise.

But damage is always relative. So far we’ve increased global temperatures about a degree, and it’s caused the massive change chronicled in chapter 1. That’s not going to go away. But if we don’t stop pouring more carbon into the atmosphere, the temperature will simply keep rising, right past the point where any kind of adaptation will prove impossible. I have dedicated this book to my closest colleagues in this battle, my crew at 350.org, with the pledge that we’ll keep battling. We have no other choice.

Blood and Oil

Continuing the thoughts of Michael Klare.

(My apologies, this is a difficult week for me as I prepare for a course that starts on the 11th May.  So posts may be a little thinner than usual.)

Yesterday, I wrote about an article by Michael Klare on the theme of the avenging planet.  While researching for that piece, I came across a film that Klare has produced called Blood and Oil.  It seemed worth mentioning it on Learning from Dogs.

Here’s the synopsis,

The notion that oil motivates America’s military engagements in the Middle East has long been dismissed as nonsense or mere conspiracy theory. Blood and Oil, a new documentary based on the critically-acclaimed work of Nation magazine defense correspondent Michael T. Klare, challenges this conventional wisdom to correct the historical record. The film unearths declassified documents and highlights forgotten passages in prominent presidential doctrines to show how concerns about oil have been at the core of American foreign policy for more than 60 years – rendering our contemporary energy and military policies virtually indistinguishable. In the end, Blood and Oil calls for a radical re-thinking of US energy policy, warning that unless we change direction, we stand to be drawn into one oil war after another as the global hunt for diminishing world petroleum supplies accelerates.

Here’s a trailer for the film.

Chernobly, Fukushima and change.

From out of darkness has to come the dawn

One side effect of the earthquake and tsunami that hit Northern Japan on the 11th March causing an explosion at the Fukushima nuclear power station is that the anniversary of the Chernobyl disaster is much more a news item than I suspect it might have been.

The nuclear accident at Chernobyl in Russia occurred on the 26th April, 1986, twenty-five years ago today.  One major difference between the two disasters was, of course, how they were reported.

Here’s a small extract from a fuller article in The Financial Times published on the 19th April written by Tony Barber who was in Russia those 25 years ago.

Twenty-five years after the explosion at the Ukrainian facility, I vividly recall every detail of those terrible days of April 1986. I was a 26-year-old foreign correspondent working in Moscow for Reuters news agency. On Friday, April 25, I flew to Kiev to spend a couple of days with Rhona, an ebullient Scottish friend who was teaching at the city’s university under a British Council programme. I was the only western journalist in Kiev that weekend.

While we caroused the night away, extraordinary events were unfolding 130km to the north. Technicians were conducting experiments that involved the disabling of automatic shutdown mechanisms at the plant’s fourth reactor. After a tremendous power surge, the reactor blew up at 1.23am on Saturday, April 26.

Except for high-ranking Communist party officials, the KGB and a number of scientists, doctors and fire-fighters, no one in the Soviet Union, let alone the wider world, knew anything about this. Soviet habits of secrecy and deception kept millions of people in the dark even as radiation spread across Ukraine, Belarus, Russia and beyond.

Certainly the disaster in Japan was widely broadcast across the world without any delays or restraints.  But the thrust of this Post today is to point out what, in the end, will have to be understood by the majority of the world’s peoples and their representatives in power.  That is that our dependence, our love affair, with cheap carbon-based energy has to come to an end, and soon.

On the 26th March, The Economist published a briefing on nuclear power entitled, When the steam clears.  As with so many of this newspaper’s essays, it was very well written [I am a subscriber to The Economist; have been for years.]  Here’s a taste of the article,

When last year a volcano closed the skies over Europe and a blown-out oil-rig turned the Gulf of Mexico black, there was no widespread enthusiasm for giving up oil or air travel. But nuclear power is much less fundamental to the workings of the world than petrol or aeroplanes. Nuclear reactors generate only 14% of the world’s electricity, and with a median age of about 27 years (see chart) and a typical design life of 40 a lot are nearing retirement. Although the world is eager to fly and thirsts for oil, it has had little appetite for new nuclear power for the past quarter of a century.

And towards the end of the article, this,

Distressing though it is, the crisis at Fukushima Dai-ichi is not in itself a reason for the world to change energy policy. The public-health effects seem likely, in the long run, to be small. Coal, with its emissions of sulphur, mercury and soot, will continue to kill far more people per kilowatt hour than nuclear does. But as an opportunity to reflect it may be welcome.  [my italics]

Power of hope

We need a continued growing awareness of the craziness of using coal and oil as primary sources of energy, and from that awareness a growing political pressure for change.  Change that recognises that mankind’s present energy strategies of continuing to pump carbon-based gases into the atmosphere are insane; pure and simple.

We need more of these examples:

Science Daily

University of Minnesota researchers are a key step closer to making renewable petroleum fuels using bacteria, sunlight and carbon dioxide.

Scientific American magazine

As the world continues to grapple with energy-related pollution and poverty, can innovation help?

The clock is ticking, as I wrote here a few days ago.

Earth Policy Release

Finding the right solutions for the 21st century and the next generation.

Just before presenting the release from the Earth Policy Institute that came out on the 20th, here’s a reminder about watching the film, Plan B, that I wrote about on the 4th April.  It’s a very good film from an excellent and creditable source.  You can watch it for FREE from PBS, BUT ONLY UNTIL THE END OF APRIL!

Here’s the link – Plan B, the film

Now to the release published in full on Learning from Dogs.

Earth Policy Release
World on the Edge
Book Byte
April 19, 2011

“LET NO MAN SAY IT CANNOT BE DONE”

www.earth-policy.org/book_bytes/2011/wotech13_ss5

By Lester R. Brown

We need an economy for the twenty-first century, one that is in sync with the earth and its natural support systems, not one that is destroying them. The fossil fuel-based, automobile-centered, throwaway economy that evolved in western industrial societies is no longer a viable model—not for the countries that shaped it or for those that are emulating them. In short, we need to build a new economy, one powered with carbon-free sources of energy—wind, solar, and geothermal—one that has a diversified transport system and that reuses and recycles everything. We can change course and move onto a path of sustainable progress, but it will take a massive mobilization—at wartime speed.

Whenever I begin to feel overwhelmed by the scale and urgency of the changes we need to make, I reread the economic history of U.S. involvement in World War II because it is such an inspiring study in rapid mobilization. Initially, the United States resisted involvement in the war and responded only after it was directly attacked at Pearl Harbor. But respond it did. After an all-out commitment, the U.S. engagement helped turn the tide of war, leading the Allied Forces to victory within three-and-a-half years.

In his State of the Union address on January 6, 1942, one month after the bombing of Pearl Harbor, President Franklin D. Roosevelt announced the country’s arms production goals. The United States, he said, was planning to produce 45,000 tanks, 60,000 planes, and several thousand ships. He added, “Let no man say it cannot be done.”

No one had ever seen such huge arms production numbers. Public skepticism abounded. But Roosevelt and his colleagues realized that the world’s largest concentration of industrial power was in the U.S. automobile industry. Even during the Depression, the United States was producing 3 million or more cars a year.

After his State of the Union address, Roosevelt met with auto industry leaders, indicating that the country would rely heavily on them to reach these arms production goals. Initially they expected to continue making cars and simply add on the production of armaments. What they did not yet know was that the sale of new cars would soon be banned. From early February 1942 through the end of 1944, nearly three years, essentially no cars were produced in the United States.

In addition to a ban on the sale of new cars, residential and highway construction was halted, and driving for pleasure was banned. Suddenly people were recycling and planting victory gardens. Strategic goods—including tires, gasoline, fuel oil, and sugar—were rationed beginning in 1942. Yet 1942 witnessed the greatest expansion of industrial output in the nation’s history—all for military use. Wartime aircraft needs were enormous. They included not only fighters, bombers, and reconnaissance planes, but also the troop and cargo transports needed to fight a war on distant fronts. From the beginning of 1942 through 1944, the United States far exceeded the initial goal of 60,000 planes, turning out a staggering 229,600 aircraft, a fleet so vast it is hard even today to visualize it. Equally impressive, by the end of the war more than 5,000 ships were added to the 1,000 or so that made up the American Merchant Fleet in 1939.

In her book No Ordinary Time, Doris Kearns Goodwin describes how various firms converted. A sparkplug factory switched to the production of machine guns. A manufacturer of stoves produced lifeboats. A merry-go-round factory made gun mounts; a toy company turned out compasses; a corset manufacturer produced grenade belts; and a pinball machine plant made armor-piercing shells.

In retrospect, the speed of this conversion from a peacetime to a wartime economy is stunning. The harnessing of U.S. industrial power tipped the scales decisively toward the Allied Forces, reversing the tide of war. Germany and Japan, already fully extended, could not counter this effort. British Prime Minister Winston Churchill often quoted his foreign secretary, Sir Edward Grey: “The United States is like a giant boiler. Once the fire is lighted under it, there is no limit to the power it can generate.”

The point is that it did not take decades to restructure the U.S. industrial economy. It did not take years. It was done in a matter of months. If we could restructure the U.S. industrial economy in months, then we can restructure the world energy economy during this decade.

With numerous U.S. automobile assembly lines currently idled, it would be a relatively simple matter to retool some of them to produce wind turbines, as the Ford Motor Company did in World War II with B-24 bombers, helping the world to quickly harness its vast wind energy resources. This would help the world see that the economy can be restructured quickly, profitably, and in a way that enhances global security.

The world now has the technologies and financial resources to stabilize climate, eradicate poverty, stabilize population, restore the economy’s natural support systems, and, above all, restore hope. The United States, the wealthiest society that has ever existed, has the resources and leadership to lead this effort.

One of the questions I hear most frequently is, What can I do? People often expect me to suggest lifestyle changes, such as recycling newspapers or changing light bulbs. These are essential, but they are not nearly enough. Restructuring the global economy means becoming politically active, working for the needed changes, as the grassroots campaign against coal-fired power plants is doing. Saving civilization is not a spectator sport.

Inform yourself. Read about the issues. Share the Earth Policy Institute’s publications with friends. Pick an issue that’s meaningful to you, such as tax restructuring to create an honest market, phasing out coal-fired power plants, or developing a world class-recycling system in your community. Or join a group that is working to provide family planning services to the 215 million women who want to plan their families but lack the means to do so. You might want to organize a small group of like-minded individuals to work on an issue that is of mutual concern. You can begin by talking with others to help select an issue to work on.

Once your group is informed and has a clearly defined goal, ask to meet with your elected representatives on the city council or the state or national legislature. Write or e-mail your elected representatives about the need to restructure taxes and eliminate fossil fuel subsidies. Remind them that leaving environmental costs off the books may offer a sense of prosperity in the short run, but it leads to collapse in the long run.

During World War II, the military draft asked millions of young men to risk the ultimate sacrifice. But we are called on only to be politically active and to make lifestyle changes. During World War II, President Roosevelt frequently asked Americans to adjust their lifestyles and Americans responded, working together for a common goal. What contributions can we each make today, in time, money, or reduced consumption, to help save civilization?

The choice is ours—yours and mine. We can stay with business as usual and preside over an economy that continues to destroy its natural support systems until it destroys itself, or we can be the generation that changes direction, moving the world onto a path of sustained progress. The choice will be made by our generation, but it will affect life on earth for all generations to come.

Adapted from Chapter 13, “Saving Civilization,” in Lester R. Brown, World on the Edge: How to Prevent Environmental and Economic Collapse (New York: W.W. Norton & Company, 2011), available online at www.earth-policy.org/books/wote

Additional data and information sources at www.earth-policy.org

The day after April 1st!

When it all gets real close and personal.

I have been a great fan of the BBC’s business editor, Robert Peston, and read his Blog as often as I can.  Recently, the focus has been on Ireland.

A few days ago, before the announcement by the Irish premier and finance minister as to their vision for the future of Ireland’s banks, Robert penned a post that started as follows:

The unbelievable truth about Ireland and its banks
Ireland’s central bank and new government will confirm on Thursday that the hole in the country’s banks is even wider, deeper and darker than seemed to be the case last November, when those bust banks forced the country to go with a begging bowl to the eurozone’s rescue funds and the International Monetary Fund (IMF) for 67.5bn euros (£59bn) of rescue loans.

That article then led me to Paul Mason, BBC Newsnight’s economics editor, who also writes a Blog.  He wrote on the 30th March,

A short summary of the Euro snafu that’s about to happen:

1) Tomorrow Ireland publishes the results of bank stress tests. It has to find – or the EU has to find – another E18-25bn to shore up its failing banks.

etc., etc.

Again, while the article is interesting, the whole point of this Post was one comment made to that Paul Mason piece.  Here it is,

At 00:47am on 31st Mar 2011, tawse57 wrote:

I am bored with all these posts about the economy now. Can we go back to cheese and crackers and the mysterious case of Paul Mason’s mobo contacts?

I was just talking with a 35 year old young man who is married and has a young child.

His wife, quite rightly, does not wish to move away from the place where she was born and brought up – Cornwall.

But he tells me that, despite almost saving £100,000 by putting in every hour they could in working and saving, that they stand no chance of ever owning their own home.

He says the house that he rents have asking prices of about £450,000 despite most of them just sitting on the market for years because no one, no one local anyhow, can afford them. What does sell goes to rich Londoners.

He is destined to pay out most of his wages in private landlord rents. He can’t get into a Council house or a Housing Association property because they either no longer exist or the waiting lists are measured in decades.

He is not prepared to have such a millstone of stress, worry and financial drain around his neck. It would kill him. I don’t blame him.

His story is one of hundreds of thousands, perhaps millions, of people in the UK today.

I mention this as the bank stress tests are directly connected with the massive credit bubble, much of it a housing bubble of liar loans, that brought the global economy to its knees, bankrupted banks and still threatens to bankrupt nations.

All of us on here know this. We are an enlightened bunch.

But I think it is worth remembering that the affects of the global credit binge are still directly affecting so many in this country.

The UK is almost alone in the World in not yet seeing a massive housing crash. The Government and the Bank of England have gone out of their way stop it happening in order to protect the banks who so stupidly, but also so greedily, loaned so many liar loans on bricks and mortar not in other countries but here in the UK.

Those UK banks that keep threatening to leave our shores are up to their eyeballs in global liar loans. You name a country in trouble and you can bet your bottom dollar, which might be the only thing most of us have left soon, that British banks are at the heart of it all.

It is long overdue that this giant house of cards came crashing down. It is long over-due that, as a Society, we cut out the cancer of dirty banks and dirty bankers from our lives and from these shores.

They are leeches on the souls of Men. Gosh, I am getting poetic in my anger. It must be that teaspoon of Jack Daniels I put in my midnight cocoa.

So what if the banks fail their stress tests today, next week or next year. It won’t make a squat of difference to that couple in Cornwall. It won’t make a squat of difference to most of us.

The worst thing that can happen is, as Alistair Darling so panicked, that the ATM machines run empty. Well, what would happen then? Would the sky fall in? Would us polite British all sit at home and do nothing.

Or would we take our cue from the Egyptians, the Tunisians and all the rest?

Perhaps what this country needs most of all is for another even bigger banking crisis? If it happens I think I would feel safer being one of the masses instead of one of the banking elite.

I do hope the banks fail the stress tests. I do hope it brings about another crisis. I do hope that, this time, the People say enough is enough and that this rotting cancer within Humanity is lanced with a fiery lancie thingy.

I could murder a bit of cheese on a nice cracker now.

Whoever you are tawse57, I like your style.  Very powerful words.

“It is error alone which needs the support of government.  Truth can stand by itself.”

~Thomas Jefferson (third President of the United States from 1801 to 1809)

Inside job

The shocking documentary film about the global financial crisis.

I’m sure many have already see the film Inside Job but we only watched it a few nights ago.  Here’s the trailer.

The film is also available to watch on Top Documentary Films and is summarised on that website thus:

As he did with the occupation of Iraq in No End in Sight, Charles Ferguson shines a light on the global financial crisis in Inside Job.

Accompanied by narration from Matt Damon, Ferguson begins and ends in Iceland, a flourishing country that gave American-style banking a try – and paid the price.

Then he looks at the spectacular rise and cataclysmic fall of deregulation in the United States. Unlike Alex Gibney’s fiscal films,Enron: The Smartest Guys in the Room and Casino Jack, Ferguson builds his narrative around dozens of players, interviewing authors, bank managers, government ministers, and even a psychotherapist, who speaks to a culture that encourages Gordon Gekko-like behavior, but the number of those who declined to comment, like Alan Greenspan, is even larger.

Though the director isn’t as combative as Michael Moore, he asks tough questions and elicits squirms from several participants, notably former Treasury secretary David McCormick and Columbia dean Glenn Hubbard, George W. Bush’s economic adviser.

Their reactions are understandable, since the borders between Wall Street, Washington, and the Ivy League dissolved years ago; it’s hard to know who to trust when conflicts of interest run rampant.

If Ferguson takes Reagan and Bush to task for tax cuts that benefit the wealthy, he criticizes Clinton for encouraging derivatives and Obama for failing to deliver on the promise of reform. And in the category of unlikely heroes: former governor Eliot Spitzer, who fought against fraud as New York’s attorney general (he’s the subject of Gibney’s documentary Client 9).

Sony have available on their website a useful study guide.  It appears to be written with students in mind but there is much valuable background information there for all.  The guide, in pdf, may be seen here.

It would all have been worthwhile, if that’s the correct term, if we had seen effective regulatory responses from strong governments but, as the film points out, the millions of people on the receiving end of harsh, downward adjustment of personal wealth are still waiting.

Meanwhile, Europe continues to bleed, American housing is still trending downwards and the real effect of the Japanese earthquake is far from clear.

We are living in interesting times!

“Oh my ears and whiskers, how late it’s getting”

The quote that forms the title of this article is from Alice in Wonderland and is spoken by the Rabbit.

It's getting late!

At first, that quote seems quite mundane. However, most find ‘Alice’ quotes are rich in truisms and life’s great philosophies.  How about this?

Alice: “It would be so nice if something made sense for a change.”

So what drew me to these two illustrations from Lewis Carroll’s magical pen?  Just this sample of a few days of stuff coming into my email box!

1. Our environment.

From a recent piece on the BBC website.

Ice loss from Antarctica and Greenland has accelerated over the last 20 years, research shows, and will soon become the biggest driver of sea level rise.

From satellite data and climate models, scientists calculate that the two polar ice sheets are losing enough ice to raise sea levels by 1.3mm each year.

Overall, sea levels are rising by about 3mm (0.12 inches) per year.

2. Running on Oil

A recent email in my in-box from John Maudlin was all about Japan and oil.  But there were some stark messages about our use of oil across the planet.  Try this:

There are multiple sources for many of the metals Japan imports, so that if supplies stop flowing from one place it can get them from other places. The geography of oil is more limited. In order to access the amount of oil Japan needs, the only place to get it is the Persian Gulf. There are other places to get some of what Japan needs, but it cannot do without the Persian Gulf for its oil.

This past week, we saw that this was a potentially vulnerable source. The unrest that swept the western littoral of the Arabian Peninsula and the ongoing tension between the Saudis and Iranians, as well as the tension between Iran and the United States, raised the possibility of disruptions. The geography of the Persian Gulf is extraordinary. It is a narrow body of water opening into a narrow channel through the Strait of Hormuz. Any diminution of the flow from any source in the region, let alone the complete closure of the Strait of Hormuz, would have profound implications for the global economy. [My italics.]

3. Energy rethink

From Rob Dietz of CASSE, Centre for the Advancement of the Steady State Economy.

As if we really required more prompting, the unfolding nuclear accidents in Japan are confirming what we must do.  When a disaster strikes, the most urgent response is to help those who are suffering, prevent further calamities, and clean up the messes—it’s a time to get busy.  But the next critical step is to figure out what we might do differently—it’s a time to take a step back and contemplate how we got where we are and where we might go from here.  With each passing day, it is becoming increasingly clear that we need to rethink where and how we get our energy supplies.

And later in this article:

A New York Times article provides an astonishing description of what happened at the Fukushima nuclear power plant where the backup generators failed to cool the overheating reactor:

The central problem arises from a series of failures that began after the tsunami. It easily overcame the sea walls surrounding the Fukushima plant. It swamped the diesel generators, which were placed in a low-lying area, apparently because of misplaced confidence that the sea walls would protect them.

The key phrase in that description is “misplaced confidence.”  Misplaced confidence sums up how we got to this point in history when it comes to selecting sources of energy to power our ever-expanding economy.  Regardless of what smooth-talking P.R. professionals say, a nuclear power facility has been the site of a serious accident about every 10 years: witness Three Mile Island in the U.S. in 1979, Chernobyl in Ukraine in 1986, Tokaimura in Japan in 1999, and now Fukushima in 2011.  “Safe nuclear power” is an offensive oxymoron.

Misplaced confidence also describes our failure to take big strides on phasing out fossil fuels.  We have misplaced confidence that we’ll find a technological solution to climate destabilization, that the market will take care of the problem, and that Mother Nature will continue to warehouse the emissions from our economy with no consequences.

Maybe millions of us should be adopting the same query as Alice; “It would be so nice if something made sense for a change.”  Because continuing as we are without understanding the urgent need to make ‘sense’, to take heed, of the living, conscious planet that is our only home is utter nonsense!

Back to Mr Rabbit, “Oh my ears and whiskers, how late it’s getting!”

Yes, Mr Rabbit, how late it’s getting!

Total, utter madness, Pt 1.

The way we are most likely treating Planet Earth is almost beyond comprehension.

I have mentioned before the Earth Policy Institute and Lester Brown’s latest book, World on the Edge.  Details of the book are here.

At the time of writing this Post (10am US Mountain Time on the 4th Feb.) I have read through to the end of Chapter 5 of the book and will have it completed soon.  It’s opening my eyes hugely!

I have decided over the next week or so to summarise each chapter, hoping that this encourages many readers of Learning from Dogs to reflect, go to the EPI website, buy the book or think about making a difference in any way that you can.

Chapter One, On the Edge, sets the background:

  • Summer of 2010 sees record-high temperates in Moscow, Russia’s grain harvest shrank by 40 million tons (40%) to 60 million tons.
  • Record high temperatures in south-central Pakistan were recorded. Snow and glaciers in the Himalayas melted fast, 20 million Pakistanis were affected by the resultant flooding, 2,000 died, 6 million acres of crops damaged.
  • A 2002 study by Mathis Wackernagel concluded that, “humanity’s collective demands first surpassed the earth’s regenerative capacity around 1980.  By 1999, global demand’s on the earth’s natural systems exceeded sustainable yields by 20 percent.  Ongoing calculations show it at 50 percent in 2007.  Stated otherwise, it would take 1.5 Earths to sustain our current consumption.” [my emphasis]
  • “No previous civilisation has survived the ongoing destruction of its natural supports.  Nor will ours.”

Let’s turn to NOAA.  A few salient points from there State of the Climate – Global Review for 2010.

  • For 2010, the combined global land and ocean surface temperature tied with 2005 as the warmest such period on record, at 0.62°C (1.12°F) above the 20th century average of 13.9°C (57.0°F). 1998 is the third warmest year-to-date on record, at 0.60°C (1.08°F) above the 20th century average.
  • The 2010 Northern Hemisphere combined global land and ocean surface temperature was the warmest year on record, at 0.73°C (1.31°F) above the 20th century average. The 2010 Southern Hemisphere combined global land and ocean surface temperature was the sixth warmest year on record, at 0.51°C (0.92°F) above the 20th century average.
  • The global land surface temperature for 2010 tied with 2005 as the second warmest on record, at 0.96°C (1.73°F) above the 20th century average. The warmest such period on record occurred in 2007, at 0.99°C (1.78°F) above the 20th century average.

 

Russian forest fires.

 

 

From the UK Guardian newspaper.

2010 is becoming the year of the heatwave, with record temperatures set in 17 countries.

Record highs have occurred in Russia, Belarus and Ukraine – the three nations at the centre of the eastern European heatwave which has lasted for more than three weeks – but also African, Middle Eastern and Latin American countries.

Temperatures in Moscow, which have been consistently 20C above normal, today fell to 31C (86F), and President Dmitry Medvedev cancelled a state of emergency in three out of seven Russian regions affected by forest fires.

Thousand of hectares of forest burned in the fires, killing 54 people and leaving thousands homeless. For days, Moscow was shrouded in smog, and environmentalists raised fears that the blaze could release radioactive particles from areas contaminated in the 1986 Chernobyl disaster.

Wildfires have also swept through northern Portugal, killing two firefighters and destroying 18,000 hectares (44,500 acres) of forests and bushland since late July. Some 600 firefighters were today struggling to contain 29 separate fires.

But the extreme heat experienced in Europe would barely have registered in Iraq, Saudi Arabia, Niger, Pakistan and Sudan, all of which have recorded temperatures of more than 47C (115F) since June. The number of record highs is itself a record – the previous record was for 14 new high temperatures in 2007.

The freak weather conditions, which have devastated crops and wildlife, are believed to have killed thousands of elderly people, especially in Russia and northern India. The 2003 European heatwave killed about 15,000 people.

Be worried, be concerned but don’t panic – you and I, all of us, have the collective power to sort this all out.  More about this soon.

Group human insanity

“In individuals, insanity is rare; but in groups, parties, nations, and epochs it is the rule.” Friedrich Nietzsche

I was minded to select this quote because an item in the UK Independent newspaper brought to light a new book from Lester R Brown, founder and President of Earth Policy Institute, called World on the Edge.  Here’s what The Independent wrote (selected extracts by me, the full article is here ):

Like many environmentalists, Lester Brown is worried.

In his new book “World on the Edge,” released this week, Brown says mankind has pushed civilization to the brink of collapse by bleeding aquifers dry and overplowing land to feed an ever-growing population, while overloading the atmosphere with carbon dioxide.

If we continue to sap Earth’s natural resources, “civilizational collapse is no longer a matter of whether but when,” Brown, the founder of Worldwatch and the Earth Policy Institute, which both seek to create a sustainable society, told AFP.

“We’ve got to get our act together quickly. We don’t have generations or even decades – we’re one poor harvest away from chaos,” he said.

Global warming is also impacting the global supply of grain, which Brown calls the foundation of the world food economy.

Every one-degree-Celsius rise above the normal temperature results in a 10 percent fall in grain yields, something that was painfully visible in Russia last year, where a seven-week heatwave killed tens of thousands and caused the grain harvest to shrink by 40 percent.

Food prices soared in Russia as a result of the poor harvest, and Russia – which is one of the top wheat exporters in the world – cut off grain exports.

Different grains are staple foods in most of the world, and foods like meat and dairy products are “grain-intensive.”

It takes seven pounds (3.2 kilograms) of grain fed to a cow to produce a pound of beef, and around four pounds (1.8 kilograms) of grain to produce a pound of cheese, Brown told AFP.

In “World on the Edge”, Brown paints a grim picture of how a failed harvest could spark a grain shortage that would send food prices sky-rocketing, cause hunger to spread, governments to collapse and states to fail.

Regular readers of Learning from Dogs will understand, because I bang on about it, how the behaviour of dogs over thousands and thousands of years gives us so many metaphors that we can use to rethink how we live, before it’s too late.

(Of course, it’s not just dogs, there are many ‘higher order’ pack animals such as horses, lions and dolphins. to name but a few, that instinctively live in harmony with their surroundings and also we shouldn’t forget some of the earlier human inhabitants of this planet; Eskimos, native North American Indians, Australian Aborigines, that lived similarly in balance with their environment.)

Anyway, back to the theme of this article.

Read a little about Lester, his biography is here.  It starts:

Lester Brown

The Washington Post called Lester Brown “one of the world’s most influential thinkers.” The Telegraph of Calcutta refers to him as “the guru of the environmental movement.” In 1986, the Library of Congress requested his personal papers noting that his writings “have already strongly affected thinking about problems of world population and resources.”

Brown started his career as a farmer, growing tomatoes in southern New Jersey with his younger brother during high school and college. Shortly after earning a degree in agricultural science from Rutgers University in 1955, he spent six months living in rural India where he became intimately familiar with the food/population issue. In 1959 Brown joined the U.S. Department of Agriculture’s Foreign Agricultural Service as an international agricultural analyst.

Brown earned masters degrees in agricultural economics from the University of Maryland and in public administration from Harvard. In 1964, he became an adviser to Secretary of Agriculture Orville Freeman on foreign agricultural policy. In 1966, the Secretary appointed him Administrator of the department’s International Agricultural Development Service. In early 1969, he left government to help establish the Overseas Development Council.

As I said, that was just the start; read the full biography here.

Having recently signed up to the EPI mailing list, this morning an email arrived talking further about Lester Brown’s latest book, World on the Edge.  Here’s what was in that email.

World on the Edge: Quick Facts

JANUARY 25, 2011

We are facing issues of near-overwhelming complexity and unprecedented urgency. Can we think systemically and fashion policies accordingly? Can we change direction before we go over the edge? Here are a few of the many facts from the book to consider:

  • In Sana’a, the capital of Yemen—home to 2 million people—water tables are falling fast. Tap water is available only once every 4 days; in Taiz, a smaller city to the south, it is once every 20 days.
  • The indirect costs of gasoline, including climate change, treatment of respiratory illnesses, and military protection, add up to $12 per gallon. Adding this to the U.S. average of $3 per gallon brings the true market price closer to $15 per gallon.
  • Between 2007 and 2010, U.S. coal use dropped 8 percent. During the same period,300 new wind farms came online, adding 21,000 megawatts of U.S. wind-generating capacity.

“We can get rid of hunger, illiteracy, disease, and poverty, and we can restore the earth’s soils, forests, and fisheries. We can build a global community where the basic needs of all people are satisfied—a world that will allow us to think of ourselves as civilized.” –Lester R. Brown

World on the Edge: How to Prevent Environmental and Economic Collapse is available online at www.earth-policy.org.

In a very real sense it’s a book we should all be reading and if so minded you can buy it directly from the EPI here.  But there is a health warning, so to speak.  That is that each and every one of us has to take a stand to protect the world we live on, to preserve it for our children’s children, and to start the long haul towards sustainability.

Think about one small thing you can do this week to make a positive difference, and do it!

“By the inch it’s a cinch, by the yard it’s hard!”