So Damn Much Money
Robert G. Kaiser
2009
This is the story of Gerald S. J. Cassidy and the
lobbying
"empire" he build during the last 4 decades. Cassidy's formative years
left him insecure enough to propel his drive to power in the form, due
to fortunate circumstances, of a Washington mover and shaker. After
graduating from law school in Florida, he teamed up with colleges to
help migrants and the hungry and was introduced to government
involvement after the documentary Hunger in America (CBS; May
22, 1968). He met up with Kenneth Schlossberg and they teamed up to
work on issues such as food stamps and school lunches under Senator
George McGovern. They became close. Schlossberg was the congenial
partner while Cassidy did the organizing and administration. While
McGovern was campaigning for President they looked for other work and
gravitated to Washington where they set up shop. Through a connection
the firm was approached to find a way for the federal Government to pay
for a new nutritional research center at Tufts University. Working with
Thomas "Tip" O'Neill, they managed to get what amounted to the 1st
"earmark" for the school. Other learning centers saw this as an answer
to their expansion plans too and a lucrative business was born.
There was a lot of study involved, finding ways to insert provisions in
bills that would reward paying clients who paid retainers to the
partners. By 1977, a few congressmen were raising eyebrows but like
water rising against a house, ways were found for the expenditures to
seep into authorization. And as the process grew, it became evermore
dependent on evermore larger sums of money. More money meant a better
chance to get elected or reelected. More money meant that the firm grew
in size and importance. Along the way the differences in moral tone and
temperament caused the 2 to split and the firm became Cassidy and
Associates. Other big names were hired including Jody Powell who set up
a polling/public relations adjunct (Powell Tate). Eventually, to back
his retirement plan and make more millions, Cassidy sold out to a
conglomerate and delegated every day management to Gregg Hartley. But
the firm was whipsawed, first by the conversion of the congress to the
Republicans under Gingrich and then back to the Democrats in 2006. This
meant hiring those connected to one side then the other. Competitors
grew and supplanted Cassidy as the number one lobby firm in D.C..
Little of this is of general interest and may be skipped. The final
chapter delineates where we have arrived: a congress saturated with
incompetence and corruption as members try to win at all costs and then
"retire" to the private lobby sector to make the big bucks. Witness
Trent Lott.
Kaiser contends that a popular uprising can force congress to make
ameliorative changes such as increasing the ban on former members
lobbying to 2 years, mandating network TV time for candidates, publicly
funding campaigns etc.. Looking ahead to the horizon, however, no
serious sign of reform can be seen, a glaring omission in Obama's
campaign for change.
If you aren't that interested in the evolution of legislative decay in
Washington there are other more incisive books out there although the
final chapter of this book casts a glaring light. We are a long way
from being on the right track.
April 26, 2009
JBM
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Web of Debt
Ellen Hodgson Brown
2008 (revised)
Whenever you see the word "shocking" on the cover of
any book,
you know that it is marketing hype. This work is the rarest of
exceptions.
The basic premise is this: when the federal government incurs yearly
deficits it borrows the difference in revenues and expenditures from
the Federal Reserve, the representative of major U.S. banks. The money
that the banks lend doesn't come from stored reserves, it is simply a
bookkeeping entry. In other words it is created out of nothing!
In return, taxpayers agree to pay back the principle and interest and
given the huge sums, the interest doesn't have to be all that high in
order to reap massive bank profits. Since the government controls the
printing presses (Brown asserts that 97% of the money supply is just
entry logs) it could, Constitutionally, create that money out of thin
air and save all those interest charges which we soon won't be able to
repay anyway. Not only that, but the federal government could issue
enough paper to buy back all that debt, retire the bonds and regulate
how much of the newly created cash could be lent out in order to head
off inflation. JM Keynes asserted that as long as supply keeps up with
demand, prices would be stable, and we have plenty of underutilized
supply (10% unemployment and empty factory space) with plenty of
projects to catch up on, let alone starting up renewable energy
projects etc..
Indeed, government issued money was how the founding fathers started
paying for the Revolution and "Greenbacks" were issued during the
Lincoln administration to pay for prosecution of the war against the
South. But he was assassinated and the British, gold backed, banking
system took over again and in 1913 Federal reserve legislation codified
our subservience.
As America took over the world economy we pushed for globalization and
flexible exchange rates which allowed speculators to short sell
developing nation's currencies in order to pick up their assets at
deflated prices. Then the IMF has come in to bail out countries that
had to borrow and it has imposed straight jacket policies which have
killed off and impoverished untold poor through tightened aid programs.
Still wonder why they hate us?
Besides that, a basic point is that the money supply shrinks as
interest is paid back to banks and without newly issued credit
deflation and recessions (or depressions) result so more risky lending
is required to keep the juggling act going. Bubbles are created to
extend the borrowing based on vacuum tangible assets. The derivative
market has gone wild and threatens to precipitate the biggest collapse
in history if the behind the scenes federal maneuvering is unable to
plug the leaks. Haven't heard of the Plunge Protection Team yet?
Perhaps the biggest takeaway (though not mentioned by the author) is
that this solution is never mentioned in the media, even if just to
dispel perhaps the only way out of our economic dissolution. The
banking industry has that much control over our minds.
If something seems to be too good to be true it usually is. If so,
let's find out why. If not, and Brown goes to great lengths to address
objections, only Republican, and conservative Democratic congressmen
stand in the way of turning this country around. READ THE BOOK! It just
might be the most important one written this decade, if not longer.
November 9, 2009
JBM
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The Shadow Factory
James Bamford
2008
The Return of Depression Economics
Paul Krugman
2009
This work, describing the current world recession, is a
follow up
to the Book Krugman wrote 10 years ago when he described the Asian
economic slide but nothing in the current edition is dated. Indeed,
Krugman argues that the circumstances are quite similar to the Great
Depression too (et. al.)--the shriveling of demand attached to market
uncertainty; in the cases of the last few decades, global market
uncertainty.
The real variant in the present deleveraging is the shadow banking
industry which has gone unregulated during the last 4 presidential
administrations. New forms of business, such as hedge funds industry
loan operations (think GMAC etc.) and investment banking ventures have
thought up all kinds of complex, creative ways to package investments
and disguise risk. Coupled with over the top exposure in order to
squeeze out maximum immediate profits on the deals, and systemic
intertwining around the globe, the financial world went belly up after
the U.S. housing bubble started leaking hot air. Krugman presents the
details in an easy to read, 191 page exposition.
That doesn't mean that things like assaults on currencies, long and
short betting, interest rate fluctuations and money supply
entanglements are easy to understand. When officials do something right
to combat a problem, adverse consequences frequently happen elsewhere.
But the takeaway here is that investors, often "too big to fail", are
running around loose in the world and creating or exacerbating economic
problems in various nations. If you pose systemic risk, you need to be
regulated.
Krugman clarifies the problem posed to macroeconomic managers and
governmental officials. He calls it the trilemma. They want monetary
policy discretion to fight recessions and inflation. They want stable
exchange rates to thwart uncertainty and facilitate beneficial business
transactions. They also want to leave international businesses free to
do business as they see fit. Problem is that, at best, countries can
get only 2 of the 3. So they fudge and jump around between floating
exchange rates, they give up on monetary policy and or impose capital
controls. Krugman writes about the consequences of each.
As with Japan in the '90s, the U.S. faces what Krugman calls a
"liquidity trap". This has to do with getting people (including those
with real or imagined declining resources) to spend more in order to
absorb production over capacity and put people back to work. Massive
government spending might work, and as Krugman argues, a bit of
expected inflation might also help. If money put aside is expected to
be worth less in the future, many would spend it right away on
commodities which would gain relative value.
There are lots of economic insights in this book for the lay reader to
absorb from this Pulitzer prize winning economist. Add it to your books
to read pile.
May 18, 2009
JBM
Liberty and Tyranny
Mark R. Levin
2009
Levin's Conservative "opinions and conclusions of
fundamental
truths" start right off being justified by "God-given natural rights".
Secular, natural law =s the adoption of tyranny. Government is
portrayed as antithetical to the liberties of the individual who is
imbued with a soul and conscience, which flow from those rights. Not
surprisingly, this self serving pronouncement offers no evidence, let
alone proof, of such a God, the natural rights this being bestows, nor
of a soul. And certainly the concept of a conscience in all men is
debatable. It is okay for religion to foster restraint of liberty, just
not collective secular will. After this, there is no credible
foundation for what follows.
Levin rails against the "statist", anyone who believes that government
should play a large role in determining the civil, in civilized
society. According to his conclusions, American has been going down
hill since FDR's New Deal. /On page 15, Levin accuses the statist of
defending the status quo while the Conservative seeks to improve
society, just the reverse of traditional, common understandings of the
two poles. But all along he argues that the statist is always trying to
accumulate more power through government programs and agencies
(diminishing liberty) while the Conservative resists. The current
health care reform debate illustrates. All the "isms" (e.g. socialism)
are tyrannical. Academic statists promote "Utopia" which turns out to
be misery. Apparently Levin is unaware of the misery produced by the
every man for himself philosophy. The rights of life and liberty
conform to Conservative ideals but not security and prosperity.
However, absent the right of physical security, the right to life is in
jeopardy.
The judiciary is bad, and federalism, i.e., states rights are better
than the federal government. In the free market chapter, Levin
considers it a "vital bulwark against statism". Here he assails
attempts at economic justice and equality through the progressive
income tax. CEOs climbing from 40-1 floor worker compensation decades
ago to 400-1 now is apparently justified. Private sector competition is
the be all and end all but anti-trust enforcement is never mentioned.
That would be government intrusion. Levin lauds America's
infrastructure but apparently it is, or will be, bestowed by God for he
doesn't want government taking people's hard earned money to fix pot
holes or invest in NIH R&D or build coast guard cutters. One
wonders how many Americans, with those extra dollars which didn't go to
taxes, donated to increase teacher's salaries etc. etc.?
The propaganda goes on to Levin's final "Manifesto": eliminate all but
sales taxes, forget the environment, curtail judicial power, sunset all
federal agencies each year and eliminate government unions, eliminate
tenure and the federal department of education, end chain migration and
multiculturalism, diminish entitlements such as Medicare and fight off
national health insurance, reject Kyoto and World Court involvement
among other treaties which don't directly benefit us, support faith and
certainly unhamper free speech, threatened by campaign finance laws and
equal time provisions. Let those with command of the media (the rich)
reign.
No surprise here, author and talk show host Levin wants uninterrupted
ability to keep Conservatives poisoning American minds. In fact he
wants the right to get more active in this regard. If people read this
kind of plutocratic propaganda, is it any wonder that this country is
going down the drain?
September 1, 2009
JBM
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Garbage Land
Elizabeth Royte
2005
and
Good Genes Gone Bad
Pete Myers
The American Prospect
April 2006
Ms. Royte sorts through her Brooklyn N.Y. garbage,
weighs it,
categorizes it and then set out to find its ultimate disposition, and
the stops it makes along the way. She makes the rounds with her "san"
men, tours the various way stations where waste is accumulated,
consolidated and shipped, visits various recycling plants and trudges
around NY's sewer system and drives out to landfills, including the one
in Pennsylvania where her personal garbage is destined to end up. She
talks to various managers of the public and private entities involved
as well as concerned citizens doing what they can to reduce our toxic
effluent.
Almost everything she learns is disheartening if not depressing. It is
prohibitively expensive and complicated to fully recycle the humongous
amount America's municipal solid waste (MSW) (worse than other
countries), but that category amounts to only 2% of all waste Americans
turn out. The rest comes from the waste (industrial, mining and
agricultural) involved in making the products we eventually throw out!
Electronic trash is one of the fastest growing along with virtually
impossible to safely decompose plastics (for example: "...the
production of plastics emits the toxins trichloroethane, acetone,
methylene chloride, methyl ethyl ketone, styrene, toluene, and
...trichloroethane,...sulfur oxides, nitrous oxides, methanol, ethylene
oxide, and volatile organic compounds.". Glass isn't effectively
recycled. Sewage sludge, shipped out to farmlands, is laden with heavy
metals and/or other toxics which are taken up in plants, animals and
us. Burning our garbage spreads a film of toxics on our land and water
and contributes to respiratory diseases.
All of this is eventually going to catch up with us with those closest
to the downstream getting hurt first and worst. The minute poisons will
(arguably already are) produce diseases and genetic abnormalities which
will be hard to decipher and harder to overcome. At the end of the book
Royte walks a polluted beach off Brooklyn's shore and realizes that
beach cleanup campaigns just shift responsibility. In the end producers
must be responsible for the disposal of their products and Americans
need to buy less.
Two faults to find: Aside from a sojourn to San Francisco, this is all
about NYC's problem. What about the rest of the country? More
importantly, there are no maps nor photos to help the reader visualize
and thereby impress. The tale is very personal but some readers will
probably find that beneficial.
The Myers 4 page article ties in nicely as it discusses the gene
hijacking that can take place at almost imperceptible levels when we
are exposed to chemicals. The fetus is particularly vulnerable.
Weakened genes allow for future diseases. Myers cites the Bisphenol A
in our systems which is linked to low sperm count and cancers and
degenerative diseases. This is another of the coming legacies from our
generation. One should always keep this understanding in mind.
1/May/2006
JBM
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The World Around Us
Alan Weisman
2007
Buy the premise, buy the bit. What would happen to
earth if
humans suddenly disappeared? How would nature recover? What species
would benefit most and which would be most imperiled? Would another
species evolve with intelligence enough to replace mankind?
Weisman starts off describing what would most likely happen to NYC
under such circumstances. His conclusion is that eventually the
buildings would collapse due to water and freezing damage along with
plant growth, not to mention earth quakes. Same for other cities.
Long ago, before we ruled the earth there was a lot of very big game
roaming around on land and in the sea. As carnivores ate up plant
eating species the latter, in some cases, reproduced faster and the
numbers remained plentiful. However, we would be leaving some nasty
stuff behind in the form of poisons and radioactive toxins which
surviving plants and animals would have to adjust to. There is some
hope in that some species are surviving around Chernobyl despite high
levels of nuclear decay in the region. But, we don't know if mutations
will be passed down to succeeding generations making them unable to
survive.
Weisman takes us on a tour around the world to the no man's land, sea
side city of Varosha, on the island of Crete. Unoccupied for decades
because of contentions between Greece and Turkey, it provides a glimpse
of what reversion to nature would be like. The author notes that
Istanbul apartments would come tumbling down in a moderate earth quake
because of poor quality concrete. It seems that some stone construction
would last longest in our absence. Houston chemical plants and storage
tanks would break down annihilating land and sea life for some distance
until microbes mutated and began eating up the effluent. The Panama
canal would eventually collapse due to dam overtopping because of silt
build up. This would happen everywhere and rivers would run wild again.
There are also descriptions of current circumstances. The Korean DMZ
has reverted to nature and hopes are that it will be a preserve once
the two sides demilitarize. New England forests are returning because
farming has moved west. Perhaps most troubling are the 6 or so plastic
garbage dumps swirling in our oceans, on the surface and below. As
these plastic containers break down into nurdles, or tiny bits, they
are ingested by sea small creatures which become food for bigger ones,
concentrating the toxins. This could portend a marine collapse long
before humans disappear. And no one is paying attention to this
outrage. How many species have to become extinct before humans can't be
sustained?
Weisman discusses the Mayan collapse (he could have touched on Easter
island too) when too many people overcrowd livable space and we are
projected to add another 3 billion by mid century--that's a new million
babies every 4 minutes! However, if you want immortality, create a work
in bronze or ceramics as they will not break down while just about
everything else will. And eventually the sun will explode turning earth
in to a cinder anyway so be happy while we can.
November 24, 2007
JBM
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The book title's play on words actually refers to
former high
ranking military personnel who have been hired by the 3 cable news
networks (CNN, Fox, MSNBC) to sound bite analyze the latest incoming
reports about our conflicts in the middle east. Allard recounts his
experiences from writing up his thoughts about the Somalia debacle
while still a Colonel in our army to going on combat patrols in Bosnia
to getting on PBS after retirement to getting paid to do weekend
in-studio and other "floater" assignments tied to the latest eye
catching video in MSNBC's Secaucus N.J. headquarters. At this point the
narrative settles down to more detail (including his on-air contract
with MSNBC) until nearer the end of the 152 page book.
Over his 9 years as an MSNBC analyst, Allard frequently worked with
Lester Holt who has become NBC's weekend anchor. The be all and end all
is ratings: bring the viewer, who sits in the "electric coliseum"
immediate, compelling, entertaining and important news all the time
before the channel is changed. Segments could not afford detail or
depth even when it would put events in better perspective. The "why"
and "how" are given no time. Bookers assembled "warheads" and reporters
for the media interview on a grab what you can basis.
In the book, Allard lauds Captain Jason Amerine for his work in
defeating the Taliban government in Afghanistan, compared Donald
Rumsfeld's corporate mentality to Robert McNamara during the Viet Nam
war, and touches on various military leaders trying to quell the Iraqi
insurgency.
The most important part of the book are Allard's observations about
what our military has become, particularly in the GW Bush era. He
describes "Yossi's gap", the growing separation between the military
and the general public since the end of the draft. While the increasing
need for training and competence in a wider array of circumstances
makes draftees less suitable, an all volunteer army is losing
connection with the people it is supposedly serving. As recruits
increasingly come from working class, rural young people rather than
the coastal, urban and semi-urban better off, an English historian's
words become more true: "The nation that will insist upon drawing a
broad line of demarcation between the fighting man and the thinking man
is liable to find its fighting done by fools and its thinking by
cowards.". Allard addresses
our advances in technology and
tactics; how geospacial intelligence gives us look down capability and
with FUSION NET rapid response to catch the insurgents before they meld
back into the civilian population. And we are finally adapting to
insurgent warfare by decentralizing and integrating with the civilians.
But with our strength comes arrogance and underestimation of our
enemies--2 deficiencies which are counteractive. The Bush
administrative was profoundly guilty of believing in what they wished
for in Iraq and we are now stuck in a middle east tar baby which is
draining away our cohesive strength.
If you are staying on top of events, this is probably a book you can
pass up. If not, it is short.
July 27, 2007
JBM
The Ascent of Money
Niall Ferguson
2008
In deciding weather or not to pick up this book for an
evaluation
of the current financial crisis, keep in mind that it was finished last
May and although Ferguson us up to date to that point, a lot has
happened since. In fact economic structural changes, world wide, are
happening so fast that almost any book on the subject becomes quickly
outdated. One has to keep current through newspapers, monthly magazines
and TV programming.
That said, there is useful knowledge to be gained from learning about
historical precedents. One revealed insight is how often financial
circumstances have led to military conflict and the rise and fall of
societies. For instance, from page 25, the Crusades were about more
than religious conflict, Europe needed precious metal for their
coinage. We know about the Spanish conquest of America's southern
hemisphere and the specie inflation that indirectly brought down the
home country. The Spanish lost the will to make when all they had to do
was buy. And given the rule of supply and demand, the more they flooded
the market with silver, the less worth it commanded.
The author describes historical bubbles and bursts, the birth of
banking and its development (think the Medici family and later the
central banks of NW Europe). Various coinage exchanges were replaced by
paper transactions making trading so much easier. Growth took off when
banks could lend beyond their reserves, trusting that there would be no
bank run. [Of course lending institutions can overextend causing
distrust in the system and a collapse, a situation that we have now.
The only reason that we haven't had bank runs in the last year is the
faith that the government will stand by our deposits.] Attention is
given to John Law, who developed the French economic system during the
rule of Louis XIV. In the end, his "innovations" brought down the
regime to penury, one reason America was able to make the Louisiana
purchase after Law's Mississippi stock bubble burst.
Ferguson skips to the run up to the Great Depression which leads to
WWII, Bretton Woods and our modern American system, now merged with
globalized finance. The narrative kind of trails off into subjects
rather than keeping tight to chronology. But nuggets of illumination
can be found. A social transfer comparison between Japan and GB (and
America) led to the rise of Milton Friedman's "hands off" doctrine
which was sold to U.S. citizens by Ronald Reagan. Was the Chilean
experiment worth while? Should almost every function be privatized and
left to market control? It seems that that answer is in.
Near the end, Ferguson goes into some of the newly devised market
instruments (SIVs, CDOs etc.) and describes some of the inner workings
of world financial relationships. It is doubtful that the unschooled,
which presumably the author is trying to reach, will be able to
comprehend these interactions. "Chimerica", held together by mutual
dependency, is now under threat, what with our diminished consumer
spending. World implications? Stay tuned.
February 28, 2009
JBM
God and Gold
Walter Russell Mead
2008
Some have wondered why some nations and societies
have evolved
to modernity why others lag behind and seem to be mired in second or
third rate status.
Empires have come and gone. In the modern world, today's world, it has
been and is an Anglo-Saxon world. First it was Great Britain which
expanded its influence since 1600, not only over the larger, richer
European countries but around the world. The sun never set on all of
its colonies. But 2 world wars (and its diminutive size) took it down,
to be replaced by one of its former colonies--America. Both countries
had something in common, access to the sea and navigable ports. The
maritime combination and control has made use of trade, strangulation
and attack to become more dominate than any other empire and to
introduce globalization to the world.
While counting ourselves as superior, inadequate thought is given to
the advantages we have had over our rivals. Mead adds up the peculiar
circumstances which led to Great Britain's success: religious
competition vying for popular support rather than one religion
stultifying innovation in the name of tradition, lack of threatening
neighbors on its borders necessitating standing armies draining
governmental coffers or threatening permanent junta control, immigrant
infusions, expansive banking and credit systems, and a Calvinistic
belief that the successful were God's chosen ones. Mead calls GB
Goldilocks for getting just the right balance.
He posits 3 legs of the societal stool: tradition, religious and
rational. Neither can stand alone but all take precedence at one time
or another. Each is necessary but none sufficient. GB and America have
prospered and become dominate because they have had a better balance.
Later in the book, Mead relies on Rinehold Neibuhr to provide meaning
for the American "crusade" to change values around the world. He cites
the original sin of self absorption and advocates for putting ourselves
in our advisories shoes. We can't force our "better way of life" on the
unwilling. Resentment is understandable. At the end of the book the
question is raised about "the end of history", when we all come
together--and the point of it all beyond the West's consumerism--but
nothing concrete is offered in the way of meaning.
Mead goes too deeply into religious permutations in the last 500 years
and unless one is plunging deeply into this kind of historical text
this book is too complicated here and way too long. And the reader is
likely to labor through the prose from start to finish.
Ultimately, this book fails to enlighten most readers about the factors
which determine cultural success or failure in a clear way that will
enlighten before it discourages.
May 13, 2008
JBM
Myths, Lies and Downright Stupidity
John Stossel
2006
First off, well known, (currently from ABC's 20/20)
Stossel's book is a 284 page easy read. It is broken down into 12
chapters and a conclusion in which he cites a "myth" (some turn out to
be true) and the reality, as he finds it. The reader can start and stop
at almost any page without losing context or train of thought.
Subjects include the media, sex, business, government, schools,
consumers, lawsuits, experts, religion, health, parenting and
happiness, and finally, his self description; not a conservative, as
many think, but a libertarian, since he believes the right and left
have become so corrupted.
Some of his contentions include: DDT is OK in moderation, there is
plenty of oil, no garbage space problem, the world isn't over
populated, our schools are safe, price gouging is OK, the minimum wage
is wrong, outsourcing is OK, we should have a free market in body
parts, schools have plenty of money, generics are as good as brand
names, stock "experts" aren't better than monkeys, marrying cousins is
OK, no global warming, bebunking astrology, closeup TV watching isn't
harmful and you can swim after eating, talking about sex with teens
doesn't lead to more activity and religious affiliation correlates with
more happiness.
Many of the realities he describes do not lend themselves to scientific
verification. Measurement is imprecise. Sometimes Stossel resorts to
anecdotal examples to make his case--an obvious weakness. But he is
willing to admit former mistakes. His having gone over to the
Conservative side fosters suspicion but he is quite critical of the
right, as well as the left--which he says doesn't want to discuss and
debate his points.
Readers are quite likely to come away with some new views about common
concerns. For example: he finds that control over one's life increases
happiness. As we seem to be losing understanding and control over our
lives, despite acquiring more "things", we may be becoming more
unhappy.
There is no depth in this book, which will make it attractive to those
with short attention spans, limited reading time and/or poor
concentration. And you can watch Stossel almost every week on TV!
21/February/2007
JBM
The Predator State
James K. Galbraith
2008
"How Conservatives Abandoned the Free market and Why
Liberals
Should Too" is the sub title of this book and a jumping off place in
which to describe the author's contentions. Like a growing consensus of
economists, Galbraith rips away at market fundamentalism which has
pervaded economic thought since Reagan promoted the salubrious myths of
monetarism, supply-side economics (including tax cuts and
deregulation), balanced budgets and free trade when he became
president. It was always foolish to believe that all the actors would
act rationally, especially since some did not have adequate information
in which to make optimal economic decisions. But there is so much more
to this 207 page book; enough provocative insights to require
rereading, perhaps more than once.
For instance: the son of
economist John Kenneth Galbraith (the liberal pillar who battled Milton
Freidman for decades before both died) believes that the monetarism
(money supply) approach to economic headway is not what drives the
economy, it is interest rates.
This Galbraith believes that a certain amount of planning (a
prescription consigned to the trash heap with the fall of the USSR) is
necessary because market arrangements do not take into account the
unhealthy shift of wealth and income upward and neglects the longer
term future because future generations don't count in current
transactions. A perfectly running market economy provides nothing for
those left out. Anything gained by society would have to be counted as
market inefficiency. But to sell the philosophy, Conservatives have to
tout a public benefit.
He contends that free trade and illegal immigration have had little to
do with our loss of manufacturing jobs. Tax incentives do not encourage
savings (p.34). Setting higher wages forces companies to become more
innovative and efficient, macroeconomically, it doesn't cost jobs.
Under VP Cheney, the federal government has come to resemble the
mismanaged business firm. Traits include deception, market manipulation
and outright fraud. Galbraith believes that the dot.com bubble spawned
a top management class that believed in excessive compensation and that
that group of managers has become detached from the business good they
were supposed to do. Instead of private innovation and business
building they have glomed on to public policy to gain advantage.
Finally, America isn't like other countries or households, it doesn't
have to abide by balanced budgets, they will be balanced world wide as
long as foreigners want hold dollars for safety reasons. As a
consequence, we must
run trade deficits. But in order to preserve stability we must continue
to lead the world in innovation, sound and uncorrupted policies,
prosperity and optimism.
This is an eye opening book. For many it will be difficult to fully
comprehend. Responsible citizens will nevertheless try.
December 28, 2008
JBM
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Hot, Flat and Crowded
Thomas L. Friedman
2008
Where to start? Perhaps with this; it is probably the
most
important book written this decade if not this century. Or; if you are
going to read any book in the coming year, check this one out first.
Or; if you think you are a properly informed citizen, you will know
what this book is all about.
What's it about? The Climate-Energy Era we are dipping into at the
start of the 21st century. So far, under President GW Bush, America has
basically ignored the growing energy-climate problem which will
confront future generations if it doesn't bite us hard very soon.
Friedman globe trots around the world, as he did for The World Is
Flat (2005), to give us a broad perspective of the coming
unprecedented challenge for this country and the rest of the world.
The problems stemming from the current growing power demand are
1-draining finite natural resources, 2-sending vast wealth to
petro-dictators who are dangerous and debilitating (the inverse
correlation between the higher price of oil and the decline of
democracy and freedom is explained), 3-warming the planet with too much
CO2, 4-creating energy poverty regions and 5-killing off species of
plants and animals. It is not only the surging tide of the growing
human population that is careening us toward disaster but the growing
percentage of people striving for and attaining middle class status (1b
now and 2b more to come shortly), with all the use and discard that we
take for granted here. Flat has met crowded all around the world after
decades of developing nation prosperity. If you read between the lines
by the end of chapter 7 you will know that IT IS OVER for us.
But Friedman soldiers on. In Part III he describes what we could do to
manage what we can't alter and alter what we can manage. He surveys
what people and businesses are doing to green us up and the potential
for even astounding innovations to carry us forward (e.g. he describes
a "smart" life using Smart Black Boxes). But he then takes a turn to
reality. Feedback loops are jacking up the CO2 problem. The Saudi's
will keep the price of oil down (even while developing new fields (as
reported on 60 Minutes)
to deter investment in renewables and then raise it again when the
pressure is off. Friedman is adamant that our political leaders will
have to establish "price points" to stabilize markets so long run
private sector investments will be made, and these policies will hurt.
And we know that politicians always want to avoid being responsible for
pain. In any case, alternatives won't be brought up to scale any time
soon. Imperative conservation enactments will only go part of the way.
Friedman then moves on to China and investigates their under publicized
efforts to green up. Chinese leaders are aware of the choking
atmosphere and the advantage of getting out front of clean, renewable
innovation and export. But they face massive numbers to convert and
instilling their priorities down the political chain.
Then it's back to America one last time to discuss developing the
leadership capable of putting us in the forefront of the energy
revolution. He is cautiously hopeful and in a recent TV interview
(Charlie Rose) anticipates extremely interesting and eventful years
ahead for the Obama administration and how the petro dictators will
fare with decreased oil demand, now due to the global recession.
There is so much discussed and involved in these 412 pages that much of
this book will have to be read more than once.
December 13, 2008
JBM
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