Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

Saturday, July 7, 2012

On listening to those campaign speeches

I am certainly not an economist, and often don't understand the discussions on the financial sector that I hear on the various news programs I listen to. But this is something I do know: nothing grows forever. This is a fundamental law. Something is "born" -- whether it be a planet, a biological species, an individual tree, or animal...or a nation, a national policy. It grows, sometimes slowly (like over eons), sometimes quite quickly, it matures, and eventually growth slows, eventually what begins to take place is the opposite of growth: signs of aging, illness, erosion, deterioration of one sort or another, depending on what the thing is. And, eventually, there's death, the end of the whatever. If it's not a complete death -- as in the case of most nations in the world -- it's the death of whatever is the current culture within that nation, so that what then begins to grow is a different version of that nation.

And this is what happens to absolutely everything. And yet, everybody is yelling: we need more growth, we've got to come up with ways to get the economy growing again. Building and buying more cars, more houses, more clothes, more electronic gadgets...an economy based on more and more (in other words, growth) of absolutely everything simply cannot continue forever. The planet, staggering under the weight of billions of people, more and more of whom are insisting on the same kind of economic growth that the industrialized countries have long taken for granted and insist must continue unfettered for them...well, the planet will simply buckle.

And yes, I do realize that plenty of other people have pointed this out before, beginning with 1972's The Limits to Growth, by Donella H. Meadows et al, continuing through the same group's updates of their original work, published in 1992 and 2004. A 2010 study entitled "A Comparison of the Limits of Growth with Thirty Years of Reality" concluded: "The analysis shows that 30 years of historical data compares favorably with key features… [of the Limits to Growth's] ‘standard run’ scenario, which results in collapse of the global system midway through the 21st Century."* So they've said it, these environmental and social scientists, based on their computer simulations and mathematical calculations, and I'm saying it, based on observation and common sense. But is anybody listening?

I honestly think President Obama, in his early pushing of alternative forms of energy, was acknowledging the limits to the growth of oil consumption as the backbone of our energy policy. But now he's singing the same song as everyone else, because that's what people want to hear, and this is an election year: we gotta grow, grow, grow...and quickly!  No time for research and development, no time to gradually get new kinds of industries, that would be aimed at more sustanable forms of energy, up and running.

And yes, I also know that this is what much of the "green" movement is all about, that there is a "sustainable growth" movement, both here and in Europe. But it's painfully small and lacking in power, compared with the hysterical push for unfettered growth.

So what do you supposed a collapse of the global system will look like?

*Turner, Graham. A Comparison of the Limits of Growth with Thirty Years of Reality. CSIRO Working Paper Series, (2010). Available at: http://www.csiro.au/files/files/plje.pdf

Sunday, June 12, 2011

How do we make this more fair, and why should we?

Yes, I'm back, to talk about fairness. The concept of. I was lying in bed resting my eyes after squirting them with fake tears (my latest physical malady is excessively dry eyes which has me "abrading" the cornea just by opening my eyelids in the morning), and I got to thinking about the recent complaint of my friend who was diagnosed with a form of leukemia last fall about how unfair it was that here she had this fatal disease and there weren't some compensating joys in her life (at that particular moment) to offset this very negative fact. Of course, as we all know (as, indeed, Pat knows) life is not fair. In fact, it is so unfair that I can't help wondering how humans ever came up with the concept of fairness in the first place.

Fatalists don't expect fairness from life or the world in general. What will be will be. In countries where life has been extremely hard for most of the people for many generations, fatalism runs deep. This was even more so the case in the past. But even in such places, and times, there tends to be a strong tradition of revenge for wrongs committed against one by ones fellow man. You kill a member of my family, I kill a member of yours. This to them is justice, and what is justice, but fairness?

Citizens of the industrialized nations in general, and America in particular, expect to be able to change the world to suit them -- because they've seen it happen -- so fatalism has less of a hold. And in these places the idea that there should be fairness in human exchange is very strong. Even as people acknowledge that the happenings of the world -- natural catastrophes, the myriad illness that can befall humans, wars, economic crashes -- can fall upon people in an apparently random and indifferent fashion, they insist that to the extent that we have control over things there should be fairness.

I think about the two major political parties here in the U.S. Since presumably we all share this sense that things should be fair, it seems like the definition of what's fair is the issue. For Republicans what's fair is both individuals and corporate entities being able to keep most of the money they earn -- in other words, to be as free as possible from onerous taxation. Likewise from even more onerous regulation, since that fetters the freedom to run their lives or their businesses as they see fit, a concept that is even more sacrosanct to Republicans than that of fairness.

Whereas for the typical Democrat what's fair is that 1) everyone should contribute to the common weal, because we are all in this together, and that 2) everyone should contribute according to what they have. You make less money, you pay lower taxes; you make a huge amount of money, you pay higher taxes. And as for regulation: history has shown that people (and even more than individual people, businesses) will often not do what they should do unless forced to by law, because usually doing what they should do involves a reduction in profit, e.g., shorter work days for employees, a minimum wage, having to make the workplace safe. The Democrat tends to think that being able to do whatever you damn well please -- to hell with the environment, or those who are less advantaged, through no fault of their own -- is not the fairest way for society to be run. And yes, I know, I sound biased, and of course I am.

Interestingly, right now Americans of both persuasions, Republican and Democrat, are feeling very angry indeed because of the unfairness of so many rich corporations paying no federal income tax at all, while we lowly common folk struggle to pay our taxes. On top of the fact that a number of the large corporations that contributed to the economic downturn, that has cost so many people their jobs and their savings, have been making huge profits over the past year, and their people are getting the same kind of big bonuses as before. Uh, uh, we're all thinking; this is not fair.

Where did we get this idea?

Thursday, December 3, 2009

If you give a man a fish...

At this time of giving, I'm enclosing part of an electronic newsletter I receive from the organization Working Villages International, a non-profit group dedicated to "teaching a man how to fish," i.e., helping people in undeveloped parts of the world to become more self-reliant, by helping them establish sustainable local "industry." They have accomplished amazing things in one part of a very dangerous place (Congo), giving the people there practical goals, the means for reaching them, and hope. A truly worthy cause. The link to their web site is in my list of Interesting Links. You don't have to give; just reading about what they're trying to do, and have thus far accom-plished, is fascinating.

"2009 has marked substantial growth for Working Villages Inter-national, both in terms of outreach and in terms of program develop-ment at our Ruzizi Valley Project in the Democratic Republic of Congo. We feel very fortunate as we look back over the past year.

The year started off with a bang, as we were able to fulfill the generosity of numerous donors and put our new rice huller into full production. The rice huller can process over 160 tons of rice a month, which enabled us to process not only our own rice, but also the rice of several thousand small farmers in the surrounding area. This had a dramatic effect, as the farmers were now being paid significantly more for their rice. Since farmers are now guaranteed a good value, more people are growing rice.

The importance of increased rice production became clear this year when a white fly infestation came through central Africa and destroyed the cassava crop, an important staple of the local diet. In the past, such blights have caused widespread starvation, but our rice program meant that local farmers produced enough rice to prevent famine in our area. Our Project Manager, Fiston Malago, is now growing various resistant strains of cassava. In the meantime, our program has ensured that the people of the Ruzizi Valley have a stable source of food.

Our agricultural production has exploded this year, from about 50,000 pounds of rice per month in January to about 100,000 pounds of rice per month in August. In August we also harvested 220,000 pounds of corn, and large amounts of seasonal produce such as cabbage, beans, melon, squash, eggplant, cucumber, lemons, tomatoes, lettuce, and onions. Our staff has stayed at about 600 people since 2008, but our crop production has greatly increased. We are producing more than twice as much food as last year because the labor originally used for infrastructure improvements, such as clearing fields and digging irrigation, is now focused on crop production. The massive food surplus and our large staff have both acted as stabilizing forces in the region, as there is now a consistent source of both food and work.

One of the most exciting projects of 2009 came as a byproduct of our rice production. The small husk around each grain of rice is inedible, and difficult to compost or burn. We were able to obtain a design for a rice hull stove which would burn the hulls by creating an intense updraft. During our summer trip to the Ruzizi Project, WVI's black-smiths expertly built a rice hull stove, and everyone cheered as the previously incombustible rice hulls burst into flame and boiled a pot of water. This stove will have a dramatic effect on our reforestation efforts in the valley, by reducing the need for firewood in cookfires. By the time we left, Hortense and Toiye, two of the ladies in the kitchen, were already making delicious meals with the new stove.

The July trip to Congo was a success on many fronts. Alex was able to oversee the ox training, and the animals had their first session in a yoke. Our staff teamsters, Toiye and Live, were calm and masterful with the animals, and it was clear by the time we left that the oxen could be plowing as soon as we can obtain suitable equipment. This was exciting progress, as animal traction will be an important component in the next stage of village development. Toiye has been with WVI since we first started working in the Ruzizi Valley, and she is now not only an amazing cook but also an amazing teamster!

As we head into 2010, Working Villages has never been so strong. Thanks to the generosity of donors all over the world, in September we were able to raise enough money to buy a truck for the Ruzizi Project. This will allow our staff to transport significantly more grains and agricultural produce, eliminating crop waste and providing more food for the region. 2009 also marked an important milestone for us, as the first year that our agricultural surpluses provided enough money to pay all the monthly wages for our agricultural workers. This is a very important step forward, as it allows us to redirect our funding to the next phase of development: buildings and infra-structure construction.

This summer we completed several beautiful model houses, made of brick, tile and thatch. The houses have been a big success, and there is a big demand in the valley for more building. But there is a challenge which is currently keeping us from increasing our rate of construction: with gasoline at $12 per gallon, the cost of transporting materials from outside vendors quickly mounts up.

Our next goal, therefore, is to raise money to build kilns for brick, mortar and lime. With the cost of transportation eliminated, the kilns will enable us to produce beautiful and long-lasting buildings using local clay, sand, and lime for less than $1000 apiece. The construction of houses, barns and infrastructure will serve two purposes: not only will it provide badly needed buildings, but it will also create jobs and skilled job training in an area that has been ravaged by war. Job creation is fundamental to building more stability in the region, and we look forward to 2010 as a time when we will take some very important steps in building our village of peace.

If you would like to help us in this next step, we appreciate contri-butions of any size. You can make a secure online donation, or, if you would like to make a seasonal Gift of Peace donation in honor of a friend, you can download our Gift of Peace form. Thank you so much for your support over the past year, and have a wonderful holiday season!"

Saturday, March 21, 2009

Greed

I can't help but be somewhat amused by all the brouhaha over the bonuses that were paid out to the people at AIG. Everyone is so outraged by the unmitigated greed.

The reason that this amuses me is that it is so damned hypocritical. Of course those mavens of the financial industry are greedy. That is the favorite American pastime, being greedy. Get more, get bigger. Bigger houses, more expensive cars and watches (I personally have always choked on the idea of spending several thousand dollars on a watch, when a $25 Timex will keep perfectly good time for years), have a television in every room, have every electronic gadget known to man. And until the current economic crisis, those who successfully practiced this kind of greed were admired, envied, celebrated, rather than vilified. To be rich is this country's idea of the highest good. Not being talented, intelligent, honorable, courageous – though all of these are given lip-service to, and may indeed be admired by some – but being rich. That is this country's idea of "successful."

The outrage we've seen expressed this past week by members of Congress, and by the President, have made me think of Claude Rains' famous line in what is perhaps my all-time favorite movie, Casablanca – "I am shocked, shocked to find that gambling is going on here." As the croupier from the next room hands him his winnings. Pul-lease. Those people on Wall Street, in the big banks and insurance companies, should all of a sudden turn into noble, self-sacrificing paragons? That isn't how they got where they are. The businesses they are in have never rewarded nobility, self-sacrifice. As Jack Welch, former CEO of General Electric said in a recent interview on public television, "These people didn't choose to cure cancer. They didn't choose to do public service work. They chose to make money."

But then, this is exactly why we need laws that hold such people in check, just as we need laws to hold potential murderers, rapists and thieves in check. They are not going to hold themselves in check. I so often think (and I mean this quite literally) about the end of the nineteenth century/beginning of the twentieth, when the robber barons and others of their ilk were also getting filthy rich, at the expense of the little guy, and the country as a whole. Finally people like Theodore Roosevelt started saying, o.k., enough is enough, and Congress started passing things like the Antitrust Act (which seems to be have been pretty much ignored for the last twenty years or so.) We are there once again; history does, after all, have a tendency to repeat itself. I suspect there will always be people who will do what-ever they can get away with, so the rest of us just have to put rules in place that keep them from getting away with too damn much.

But, it seems to me, we also have to stop admiring these "respectable" scoundrels; and that is a cultural turn-around that I really wonder if we as a country are capable of.

Thursday, February 26, 2009

Growth

On my recent trip to Texas, when I was making the five-hour drive from San Antonio to the Dallas area, I was appalled by how much development there now is along the I-35 corridor, the main connector between these two metropolitan areas. There is very little unadul-terated land to be seen anymore. San Antonio now bleeds into New Braunfels which bleeds into San Marcos which bleeds into Austin which is indiscernible from its bedroom communities of Round Rock and Georgetown to the north. Urban sprawl in spades. There was a tiny stretch around the tiny town of Jarrell where you could see open loping land, with the occasional tree, a scattering of cows, that is the basic landscape of central Texas; but then you hit Belton/Temple/ Waco. There used to be countryside between those three small cities, but not anymore. Land can again be seen around the small town of West, which boasts a large Czech community. As an aside, I stopped there once at the much-touted Czech Stop and Bakery, right off of I-35, to try some of the much-touted koloches, which are firm, chewy pastries with some kind of filling – poppy seed or prune paste, apricot jelly, sausage, cream cheese – in the middle. I had the cream cheese and found it "all right," but not really as satisfying as a good cheese danish.

So small town West, and surrounding farmland, are still the same, but so much else...

I realize this kind of development is everywhere, that land that was once fields/hills/woods has disappeared beneath giant shopping malls/discount outlets/chain motels/fast-food restaurants/cookie-cutter housing "estates," and Auto World (auto sales/gas stations/ parts houses/tire distributors, etc.) I'm not talking something new, something that lots of other people haven't already commented on. But here's my point: this god-awful consumer sprawl represents the very "growth" that they keep telling us we need to return to, from the retrenching of the current economic crisis. We need more of this? I don't think so. It made me think of the 1972 book, "The Limits of Growth," which talked about the exponential growth of five variables: world population, industrial production, food production, pollution, and resource depletion. In 2008 somebody named Graham Turner from Australia published a paper comparing the reality of the past 30+ years with the predictions made in the original book, and found that "changes in industrial production, food production and pollution are all in line with the book's predictions of economic collapse in the 21st century."*

So here we are, collapsing. We've been churning out too much stuff, too many unnecessary gadgets, too many absurdly large houses to be lived in by a couple with one or maybe two kids (and now they can't pay the mortgage), too many Office Depot/Home Depot/Wal-Mart/Best Buy clones. This growth, which is supposedly essential to our economy, to the world economy – and the rest of the world has recently been jumping on the consumer bandwagon with us – has been eating up the land, and other of the planet's resources, destroying the ozone layer, wiping out species, increasing commute time and aggravation, which increases stress, making everyplace look like everyplace else, and in short, not impressing me one bit. I'm thinking, there's gotta be a better way. We've already tried the drop-out, get-back-to-the-land hippie alternative – and some people are still living that way – but it really doesn't seem like the solution for a whole planet. So what is? Let's hear it from the Wise Men (and Women). I'm not a big fan of my native Texas, but one thing it always had going for it was land. I don't want it all to disappear beneath concrete and Target stores.

*Graham Turner (2008). "A Comparison of `The Limits to Growth` with Thirty Years of Reality". Commonwealth Scientific and Industrial Research Organisation (CSIRO).

Wednesday, December 31, 2008

The Gambler

One of my staff at the library and her husband play bingo several times a week. And frequently, but not always, win, sometimes quite impressive pots ($200, $375, once $500). As much as I need money, I sincerely wish I had enough of the gambler’s spirit to play. But it’s that not always winning that defeats me. It costs $18-$20 to play. It would kill my soul to plunk down $18 and have nothing to show for it at the end of the evening. I am of course familiar with all the cliches – “Nothing ventured, nothing gained;” “You’ve got to spend money to make money,” etc. – but I can’t seem to overcome my feeling that I can’t afford to lose.

I am not known as a timid person; indeed, among some of my friends I am considered the soul of adventurousness. Admittedly, if your only exposure to me has been this blog of Notes, I may not be striking you as all that adventurous. After all, the main reason I didn’t go to the Maine Lobster Festival was I didn’t want to go alone – how adventurous is that? But traditionally I have not hesitated to take off for parts unknown, alone and underfunded, either for a pleasure trip, extended writing holiday, or even complete relocation. But I never really considered any of those “adventures” a gamble, since I felt assured of a payoff. In the case of a pleasure trip: the pleasure of travel! Experiencing new places; people and, yes, experiences, has provided my life with its greatest satisfactions. The several writing holidays I’ve taken have included the opportunity to write without all the mundane cares and responsibilities of “real life,’ on top of the pleasure of travel. And relocation was nearly always made with the assumption of a life change for the better.

But true gambling acknowledges, accepts, the possibility of loss, as well as gain. I suppose it could be argued that compulsive gamblers, who keep playing even as they keep losing, are not acknowledging this possibility, but my guess is they acknowledge it, but are sure their luck is about to change.

This compulsive non-gambler is perhaps too much the pessimist, too convinced that it is possible to play and play, and lose and lose.

Those of us who have invested in the stock market, either directly, or through pension and 401(k) plans, have been gambling, but we didn’t have to think of it as such. For one thing, if a company like Valic is handling your investments, you don’t know about all the gambling going on. Out of sight, out of mind. And for many of us, up to maybe a year ago the gambling was paying off; some of us may have been sitting pretty, or at least comfortably. But now the risk that goes with every gamble, at however far a remove, has reared its ugly head, and oh, gee, look what’s happened. I have friends whose savings have disappeared, who thought their retirement years were more or less secure, and who are now wondering when – or if! – they can afford to retire. All of a sudden Al Gore with his 2% interest savings account seems less a figure worthy of ridicule. All of a sudden the gamblers, and folks like me, who haven’t had a pension or 401(k) plan for some time to have wrecked, are in similarly leaky boats.

I guess the only comfort I can offer myself is that I have not gambled, and lost. But of course, neither have I gambled, and won...not even at bingo. If you lack an ounce of the gambler’s spirit, you may be stuck in this world with just getting by.

Monday, November 3, 2008

As a substitute for the next war

What I can’t figure out is why we keep having wars. Usually after a war we end up helping the defeated country, e.g., Japan, Germany, after the Second World War, Iraq even as I type. It’s only a matter of time before American tourists are visiting the place, e.g., Vietnam. So why don’t we just skip the war, and go directly to help mode? Afghanistan would be a good place to start. Instead of pulling all those soldiers out of Iraq and sending them to Afghanistan – which is what Senator Obama is proposing to do at once, Senator McCain proposes to do as soon as the war in Iraq is “won” (definition still to be determined) – instead of this out of the frying pan into the fire strategy, why not pour economic advisors into the country? Preferably economic advisors who can speak the language (and why isn’t there a push in this country for students to learn Arabic, Farsi, Korean, the languages of those areas that are proving most problematic for the U.S.?), economic advisors who could help develop the local economy. In Afghanistan, for example, there’s the problem of so many farmers growing poppies for the drug trade which the bad guys use to finance their nefarious deeds. What could they grow instead? In Columbia, Ecuador and Peru it’s the coca growers, feeding the cocaine trade. What could we help them grow instead?

As the current world-wide financial crisis is serving to illustrate, everything comes down to economics (well, actually, everything really comes down to biochemistry, but let’s talk a notch or two above that). As much as I hate to admit it, being so uninterested in business as I am, healthy trade really does make the world go round. We need to be helping the poverty-stricken areas of the world develop the means to join the rest of us in (healthy, not damaging) trade. With an improved standard of living they would have more to lose, and when you have something to lose you are less inclined to kiss it all good-by by blowing yourself and various innocent bystanders up.

While I don’t question for a moment that there are, indeed, evil people out there, some of the fanatical Muslim persuasion, most people, whatever their religion, whatever their country, want to live in peace and safety with their families. They want to be able to support those families, take care of them, make sure that everyone has enough to eat, decent housing, access to good health care when they get sick. If we directed our attention to helping them achieve those goals, without trying to convert them (after all, how do you feel when a Jehovah’s Witness comes knocking at your door?), without our usual swaggering assumption that we’re the greatest nation in the world and of course everyone must want to be like us, or should want to be like us...if, in short, our foreign policy more closely resembled the work of private aid organizations that don’t have a hidden agenda, that just want to help those in this world who are struggling with extreme poverty, I suspect it would go a long way in that winning-the-hearts-and-minds campaign they’ve been waging lately in Iraq.