Wednesday, January 23, 2008

The Economic Pyramid


The impending recession continues to expose structural defects in the global economy.
The fundamental problem is that far too many people are simply left out.
In order to include them, global rates of consumption must be in balance with the productivity of the biosphere. We cannot provide a reasonable standard of living for nine or ten billion people (which is the likely peak in world population if present trends continue) if that standard of living requires rates of consumption similar to those imposed by the structures of our civilization. In other words we have to change the way we live, to create a viable example that the rest of the world can emulate.
We have, in the past, regarded ourselves as the “Shining City on the Hill” that all the peoples of the world aspire to re-create for themselves. Had we been successful in having the rest of the world copy the way we behave, then our high consuming lifestyle would have perhaps destroyed the ability of this planet to support life. Even with the minimal participation in economic activity now enjoyed by one fifth of the world’s population, habitat destruction and pollution result in two hundred species becoming extinct every single day. The world cannot remain the way it is.
The economic pyramid (you have seen it on the back of the dollar bill, yes?)
We live in a global economy where the economic pyramid is wildly out of kilter.
While optimists use the image of a ladder, distribution of economic benefits are more usefully envisioned as a pyramid. When this pyramid is in balance, wealth is generated at the very bottom, and moves up the pyramid. Because there is virtually no trickle down of wealth, unless the inputs are made at the bottom, the lower layers simply atrophy and drop off the pyramid.
People, on the other hand, fall down the pyramid more readily than they climb up.
Also, when resources are inserted at a higher level then they circulate all the faster, having a shorter distance to travel.
Economic activity circulates faster at the top.
Over the last few decades more and more resources have been injected into higher layers, where they circulate very fast, giving the illusion of wealth creation, and more and more people fall out of the bottom, and wind up in homeless shelters, or in barrios, shanty towns and other informal constructions, with no health care, and no prospect of improving their situation.
The pyramid no longer looks like the one on the dollar. Right now the pyramid has an enormously wide, and very flat base rising very gradually until it suddenly curves upwards coming to a tower, with almost sheer sides and a pinnacle in the way far distance. More like a thumbtack than a pyramid. If this particular pyramid is to avoid falling over, is it essential to inject resources at the base, and to do this by way of a structural (i.e. permanent) change.
Microcredit is a very good tool to achieve this result on a global scale. IN the picture above microcredit is represented by the pool underneath the pyramid. People fall out of the economic activity represented by the pyramid, and into the broader wider microcredit economy.
In the United States there are many other options, partly because so many people here do have access to real resources which can be invested in a way that promotes real change. And also because the condition of the very poorest is desperate in widely varying ways from the poverty which more uniformly afflicts the rural poor in less industrialized countries.

Today’s News Wednesday, January 23, 2008

The Center for Public Integrity today released a report, and a publicly accessible database of 935 false statements issued by eight senior officials of the Bush administration in the lead up to the Iraq war. The study claims that this was “part of an orchestrated campaign” on the part of the Bush administration.

The White House claims in its defense that their position on Iraq, WMD’s and Al Quaida, were based on the consensus of intelligence agencies all over the world. But at the time, George Bush repeatedly cited British sources for his wild and extravagant claims, and yet there was so much controversy in British Intelligence that two ministers (Claire Short and Robin Cook) resigned and one intelligence analyst (Dr. David Kelly) was executed, with the government and virtually all news sources claiming an improbable suicide.

In Australia, a senior intelligence analyst resigned and spoke out frequently about the distortions that were been imposed on the public mind through an orchestrated government and media campaign in support of a war that could not be justified.

And yet the war happened, and all of these lies and distortions go virtually unmentioned in the current election campaign. Hundreds of billions of dollars in profitable war related contracts continue to provide a feast for cronies of Bush and Cheney. And thousands of people in Iraq live in mortal jeopardy.

Also today, thousands of hungry people escaped from the Israeli prison camp most of us know as the Gaza strip. The people blew a hole in the wall (built by Israel) and poured across the border into Egypt. These people have been subjected to a vicious campaign of oppression and deprivation in retaliation for them having elected a government which does not meet with the approval of Washington and Tel Aviv.

Also today Vice President Dick Cheney made a presentation to the Heritage Foundation on the subject of FISA legislation. He based the rationale for this legislation on an entirely fabricated reality in which Al Queda terrorists, (who had attacked America on September 11, 2001), were plotting equally dastardly acts with equal likelihood of success, were it not for the fearless work of dedicated American patriots torturing suspects and monitoring all communications in the United States with the active participation of telephone and communications companies. There was no Q & A broadcast on Cspan – just the raw propaganda. Most sinister and duplicitous President of Vice ever.

Meanwhile back in the Congress the Democrats are promoting Schip as a stimulus measure. It would inject resources into the hands of poor people, allowing them to free –up funds currently dedicated to health care, but the Republicans are resisting because they want whatever changes they make to be temporary (and they want the goodies for their rich friends, as usual).

The impending recession continues to expose structural defects in the global economy.

The fundamental problem is that far too many people are simply left out. In order to include them, global rates of consumption must be in balance with the productivity of the biosphere. We cannot provide a reasonable standard of living for nine or ten billion people (which is the likely peak in world population if present trends continue) if that standard of living requires rates of consumption similar to those imposed by the structures of our civilization. In other words we have to change the way we live, to create a viable example that the rest of the world can emulate.

We have, in the past, regarded ourselves as the “Shining City on the Hill” that all the peoples of the world aspire to re-create for themselves. Had we been successful in having the rest of the world copy the way we behave, then our high consuming lifestyle would have almost destroyed the ability of this planet to support life.


Even with the minimal participation in economic activity now enjoyed by one fifth of the world’s population, habitat destruction and pollution result in two hundred species becoming extinct every single day.

The world cannot remain the way it is.

Thursday, January 17, 2008

A Stimulus Package

Well. Fed Chairman Mr. Bernanke, was on Capitol Hill this morning, discussing the options for a “stimulus package.” It seems everyone is already agreed that $100 billion is shortly going to come streaming off the printing presses, all that remains is to divvy up the spoils. Tax cuts, tax rebates, food stamp increase, and extended unemployment insurance coverage are all on the table.

Mr. Bernanke seems nervous, and stresses the need for speed. This is $100 billion to boost consumption. Obviously the best place to put it is in the hands of people who will spend it immediately. Generally speaking the poorer the recipient, the faster the stimulation flows into the system. But I would say that.

If it works, then perhaps Mr. Bernanke will consider a more permanent “stimulus” in the form of universal health care and a sharp increase in the minimum wage.

Instead of diverting hundreds of billions of dollars into unnecessary wars of choice, and hundreds of millions into incarcerating the poor, a more enlightened administration might consider an extensive program of infrastructure re-design to accommodate our new healthy lifestyles. More walking, more bicycles, more local production and consumption, significantly less use of fossil fuels.

The redesign of the suburbs to encompass more viable communities with work, food, water and power all locally available. The construction of efficient rail and canal transportation. And some decent schools. There is an almost unending list. Many of these projects have been waiting for years for funding to be available, everything else is already in place.

If this situation leads to a rethink of the whole stimulus game, then we might restore something meaningful to the term “civilization”.

Saturday, January 12, 2008

Yunus on Tour

Microcredit pioneer Dr. Yunus is traveling around the United States.

Tour dates.

He is promoting his new book which I hope to review later. In this audio Dr Yunus describes his work.

Microcredit, for which Yunus won the Nobel Peace Prize in 2006, is a brilliant achievement, and one for which Yunus has already attained an enduring legacy.

If present growth rates are maintained, this development will have a very significant effect, altering the whole story of humanity. Whether this, in itself will be sufficient to realign our species with the global biosphere upon which all life depends, remains to be seen. But if we do make it to a point of population stasis, and then commence an orderly and voluntary decline in numbers, microcredit will have been one of the main innovations that made that possible. It is hard to conceive of a future in which Yunus’s achievement will not be revered by hundreds of millions, and with good reason. The eradication of poverty remains within reach, and many of us will live long enough to see it happen.

Audacious and Excellent. Strongly recommended.

Tuesday, January 8, 2008

Bipartisanship

After decades of strong arming the Democratic party, going back at least as far as President Reagan in 1980, some Republicans, looking at a the potential of a severe reversal, are now calling for a bi-partisan cabinet, or a government of national unity.

With fewer and fewer people aligning themselves with either party, and the extent of the Republican betrayal of the American worker now becoming apparent to all This can only be seen as a last gasp attempt by the right wing to hold the country to the far right course that has served them so well for decades.

We already have two parties who slavishly follow a corporate agenda at the expense of the common people. Under the guise of “free trade” millions of good union manufacturing jobs have been transferred overseas. Both parties, taking much of their income from defense and pharmaceutical industries, have defended and extended the war machine, and fiercely defend the massive profits taken from the most expensive health care system in the world.

For decades, both parties have exploited the “Cold War” to unite the country in the face of an imaginary enemy. Now that the evil empire has been dismantled, both parties cling to the boogeyman bin Laden, and the myth of international terrorism in the hope of scaring people silly enough to support their massive theft and exploitation, and oppression of much of the rest of the world.

The fact is that more people die in traffic accidents in one day, than succumb to terrorist attacks in a year. More people die every year falling down stairs than as a result of terrorist attacks. SO terrorism is clearly not a big enough problem for people to check their common sense at the door. And there remains the problem of 911. What actually happened that day? No thinking person can continue to believe the official government conspiracy theory. There has still been no explanation for the total destruction of a 42 story building that day. It seems that there is no fabrication that will fit this event into the tale of 19 knife-wielding supermen, which has already been stretched beyond the fantastic in the story told by the bi-partisan 911 Commission.

The problems now faced by the Republicans and the Democrats, is that it is too easy for people to access alternative views to those expressed on the corporate media. The propaganda matrix is crumbling at the edges. The extent of environmental damage is too great to hide from all but the completely brain dead. The real crisis we face has nothing to do with Muslim extremists.