...What's worse is that the higher in society one goes, the more dilute the consequences of failure tend to become, until we rise up to those exalted places whose existence is safeguarded by the magic incantation "too big to fail." This incantation is quite effective: many people are hypnotized by it. It prevents them from seeing something quite obvious: when serial failures are continually rescued, this allows them to bloat up until they are too large for the rescuers to deal with, at which point they become too big to not fail. When any one of them can no longer be rescued, the result is a cascaded failure that overwhelms the rest, and failure becomes crippling. Past that point, nobody gets to try much of anything ever again: society has checkmated itself.

....

Emergencies come and go, and people get used to the fact that the beaches are black and sometimes catch fire and burn for weeks, or that there is a ravine running through the center of town where the riverfront used to be, or that electricity is only on for a couple of hours a day. Dogs and children turn feral, but nobody remembers when that started happening, so everyone assumes that that's the way it's always been. Nor does anyone remember when it became fashionable to tattoo corporate logos on one's scalp, or to proudly display one's naked buttocks in public. An expatriate who leaves and later comes back might think that this now is a completely different country, but those who stay would be at pains to detect the difference because for them changes were too slow to rise above the threshold of perception.

....

The population can dwindle quite rapidly, but this too is often imperceptible. Large swaths of the landscape become depopulated, but that is not noticed by anyone because nobody goes there any more. When births exceed deaths, population increases exponentially. When deaths exceed births, population declines exponentially. There are always some maternities, and there are always some funerals; the change in the ratio of the two is not something that can be directly perceived. Societal extinction doesn't make any noise when it finally happens. Survivors simply move on. Non-survivors might as well have not existed, and the more gullible survivors come to believe the extravagant ruins they left behind to have been the work of extraterrestrials.

...

How does a society go about checkmating itself? There is no shortage of real-world examples, but real life is complicated, so here is a simple allegory. Let's suppose that there is a tribe called the Merkanoids, which remains quite ordinary for most of its history, but which at some point undergoes a strange cultural mutation. An accidental synergy between atmospheric electricity and chemicals in the water produces a strange effect on their minds that causes them to decamp from the towns and villages wherein they had hitherto happily dwelt, and take up residence in little huts scattered throughout the surrounding pasture, fields and woods. They then proceed to move around and switch huts a lot, until few of them know or trust their neighbors. This makes them feel rather unsafe, and the way the Merkanoids decide to make themselves feel safer is by burying land mines about their property and posting signs that read "No trespassing! Land mines!"

This makes them feel a whole lot safer while in fact making them much less so: the social predators among them become reasonably good at avoiding land mines, while the rest of the population generally does not, producing a large subclass of people whose legs have been blown off. These, being relatively immobile and defenseless, present an even more desirable target to the social predators, and naturally compensate by acquiring more and bigger land mines. This cycle repeats a few times, until two-legged people become the minority. Since people who are missing a lower limb or two are somewhat less productive than two-legged ones, in due course the Merkanoid economy can no longer produce the surplus necessary to invest in anything beyond more land mines (which they now find it cheaper to import from China on credit than to manufacture themselves).

...

Checkmate

This article pretty much sums up the insanity of our war machine which has usurped our economy:

Call the Politburo, We're in Trouble ‎

....

Boundless military ambitions 
The attacks of September 11, 2001, that "Pearl Harbor of the 21st century", clinched the deal. In the space the Soviet Union had deserted, which had been occupied by minor outlaw states like North Korea for years, there was a new shape-shifting enemy, al-Qaeda (aka Islamic extremism, aka the new "totalitarianism"), which could be just as big as you wanted to make it. Suddenly, we were in what the Bush administration instantly dubbed "the global war on terror" (GWOT, one of the worst acronyms ever invented) - and this time there would be nothing "cold" about it. 

Bush administration officials promptly suggested that they were prepared to use a newly agile American military to "drain the swamp" of global terrorism. ("While we'll try to find every snake in the swamp, the essence of the strategy is draining the swamp," insisted deputy secretary of defense Paul Wolfowitz two weeks after 9/11.) They were prepared, they made clear, to undertake those draining operations against Islamic "terrorist networks" in no less than 60 countries around the planet. 

Their military ambitions, in other words, knew no bounds; nor, it seemed, did the money and resources which began to flow into the Pentagon, the weapons industries, the country's increasingly militarized intelligence services, mercenary companies like Blackwater and KBR that grew fat on a privatizing administration's war plans and the multi-billion-dollar no-bid contracts it was eager to proffer, the new Department of Homeland Security, and a ramped-up, ever more powerful national security state. 

As the Pentagon expanded, taking on ever newer roles, the numbers would prove staggering. By the end of the Bush years, Washington was doling out almost twice what the next nine nations combined were spending on their militaries, while total US military expenditures came to just under half the world's total. Similarly, by 2008, the US controlled almost 70% of the global arms market. It also had 11 aircraft carrier battle groups capable of patrolling the world's seas and oceans at a time when no power that could faintly be considered a possible future enemy had more than one. 

By then, private contractors had built for the Pentagon almost 300 military bases in Iraq, ranging from tiny combat outposts to massive "American towns" holding tens of thousands of troops and private contractors, with multiple bus lines, PXs, fast-food "boardwalks", massage parlors, water treatment and power plants, barracks and airfields. They were in the process of doing the same in Afghanistan and, to a lesser extent, in the Persian Gulf region generally. 

This, too, represented a massive investment in what looked like a permanent occupation of the oil heartlands of the planet. As right-wing pundit Max Boot put it after a recent flying tour of America's global garrisons, the US possesses military bases that add up to "a virtual American empire of Wal-Mart-style PXs, fast-food restaurants, golf courses and gyms". 

Depending on just what you counted, there were anywhere from 700 to perhaps 1,200 or more US bases, micro to macro, acknowledged and unacknowledged, around the globe. Meanwhile, the Pentagon was pouring money into the wildest blue-skies thinking at its advanced research arm, the Defense Advanced Research Projects Agency (DARPA), whose budget grew by 50%. 

Through DARPA, well-funded scientists experimented with various ways to fight science-fiction-style wars in the near and distant future (at a moment when no one was ready to put significant government money into blue-skies thinking about, for instance, how to improve the education of young Americans). The Pentagon was also pioneering a new form of air power, drone warfare, in which "we" wouldn't be within thousands of miles of the battlefield, and the battlefield would no longer necessarily be in a country with which we were at war. 

It was also embroiled in two disastrous, potentially trillion-dollar wars (and various global skirmishes) - and all this at top dollar at a time when next to no money was being invested in, among other things, the bridges, tunnels, waterworks and the like that made up an aging American infrastructure. Except when it came to victory, the military stood ever taller, while its many missions expanded exponentially, even as the domestic economy was spinning out of control, budget deficits were increasing rapidly, the governmental bureaucracy was growing ever more sclerotic, and indebtedness to other nations was rising by leaps and bounds. 

In other words, in a far wealthier country, another set of leaders, having watched the Soviet Union implode, decisively embarked on the Soviet path to disaster. 

Military profligacy 
In the autumn of 2008, the abyss opened under the US economy, which the Bush administration had been blissfully ignoring, and millions of people fell into it. Giant institutions wobbled or crashed; extended unemployment wouldn't go away; foreclosures happened on a mind-boggling scale; infrastructure began to buckle; state budgets were caught in a death grip; teachers' jobs, another kind of infrastructure, went down the tubes in startling numbers; and the federal deficit soared.

A new president also entered the Oval Office, someone (many voters believed) intent on winding up (or at least down) Bush's wars and the delusions of military omnipotence and technological omniscience that went with them. If George W Bush had pushed this country to the edge of disaster, at least his military policies, as many of his critics saw it, were as extreme and anomalous as the cult of executive power his top officials fostered. 

But here was the strange thing. In the midst of the great recession, under a new president with assumedly far fewer illusions about American omnipotence and power, war policy continued to expand in just about every way. The Pentagon budget rose by Bushian increments in fiscal year 2010; and while the Iraq War reached a kind of dismal stasis, the new president doubled down in Afghanistan on entering office - and then doubled down again before the end of 2009. There, he "surged" in multiple ways. At best, the US was only drawing down one war, in Iraq, to feed the flames of another. 

As in the Soviet Union before its collapse, the exaltation and feeding of the military at the expense of the rest of society and the economy had by now become the new normal; so much so that hardly a serious word could be said - lest you not "support our troops" - when it came to ending the American way of war or downsizing the global mission or ponying up the funds demanded of the US Congress to pursue war preparations and war-making. 

Even when, after years of astronomical growth, Gates began to talk about cost-cutting at the Pentagon, it was in the service of the reallocation of ever-more money to war-fighting. Here was how the New York Times summed up what reduction actually meant for America's ultimate super-sized institution in tough times: "Current budget plans project growth of only 1 percent in the Pentagon budget, after inflation, over the next five years." Only 1% growth - at a time when state budgets, for instance, are being slashed to the bone. Like the Soviet military, the Pentagon, in other words, is planning to remain obese whatever else goes down. 

Meanwhile, the "anti-war" president has been overseeing the expansion of the new normal on many fronts, including the expanding size of the army itself. In fact, when it comes to the "war on terror" - even with the name now in disuse - the profligacy can still take your breath away. 

Consider, for instance, the $2.2 billion Host Nation Trucking contract the Pentagon uses to pay protection money to Afghan security companies which, in turn, slip some part of those payments to the Taliban to let American supplies travel safely on Afghan roads. Or if you don't want to think about how Americans tax dollars support the Taliban, consider the $683,000 the Pentagon spent, according to the Washington Post, to "renovate a cafe that sells ice cream and Starbucks coffee" at its base/prison in Guantanamo Bay, Cuba. 

Or the $773,000 used there "to remodel a cinder-block building to house a KFC/Taco Bell restaurant", or the $7.3 million spent on baseball and football fields, or the $60,000 batting cage, or a promised $20,000 soccer cage, all part of the approximately US$2 billion that have gone into the American base and prison complex that Obama promised to, but can't, close. 

Or what about the US Embassy in Baghdad, that 104-acre (42 hectares), almost three-quarters-of-a-billion-dollar, 21-building homage to the American-mall-as-fortified-citadel? It costs more than $1.5 billion a year to run, and bears about as much relationship to an "embassy" as McDonald's does to a neighborhood hamburger joint. According to a recent audit, millions of dollars in "federal property" assigned to what is essentially a vast command center for the region, including 159 of the embassy's 1,168 vehicles, are missing or unaccounted for. 

And as long as we're talking about expansion in distant lands, how about the Pentagon's most recent construction plans in Central Asia, part of a prospective "mini-building boom" there. They are to include an anti-terrorism training center to be constructed for a bargain basement $5.5 million in ... no, not Toledo or Akron or El Paso, but the combustible city of Osh in southern Kyrgyzstan. And that's just one of several projects there and in neighboring Tajikistan that are reportedly to be funded out of the US Central Command's "counter-narcotics fund" (and ultimately out of American taxpayers' pockets). 

Or consider a particularly striking example of military expansion under Obama, superbly reported by the Washington Post's Karen DeYoung and Greg Jaffe in a piece headlined, "US 'secret war' expands globally as Special Operations forces take larger role." As a story, it sank without a trace in a country evidently unfazed by the idea of having its forces garrisoned and potentially readying to fight everywhere on the planet.

Here's how the piece began:

Beneath its commitment to soft-spoken diplomacy and beyond the combat zones of Afghanistan and Iraq, the Obama administration has significantly expanded a largely secret US war against al-Qaeda and other radical groups, according to senior military and administration officials. Special Operations forces have grown both in number and budget, and are deployed in 75 countries, compared with about 60 at the beginning of last year.

Now, without opening an atlas, just try to name any 75 countries on this planet - more than one-third, that is, of the states belonging to the United Nations. And yet US special operatives are now engaging in war, or preparing for war, or training others to do so, or covertly collecting intelligence in that many countries across Asia, Africa, the Middle East, and Latin America. Fifteen more than in the Bush era. 

Whatever it is or isn't called, this remains Bush's "war on terror" on an expansionist trajectory. DeYoung and Jaffe quote an unnamed "senior military official" saying that the Obama administration has allowed "things that the previous administration did not", and report that Special Operations commanders are now "a far more regular presence at the White House" than in the Bush years. 

Not surprisingly, those Special Operations forces have themselves expanded in the first year-and-a-half of the Obama presidency and, for fiscal year 2011, with 13,000 of them already deployed abroad, the administration has requested a 5.7% hike in their budget to $6.3 billion. 

Once upon a time, Special Operations forces got their name because they were small and "special". Now they are in essence being transformed into a covert military within the military and, as befits their growing size, reports Noah Shachtman of the Wired's Danger Room, the army Special Forces alone are slated to get a new $100 million "headquarters" in northern Afghanistan. It will cover about 17 acres and will include a "communications building, Tactical Operations Center, training facility, medical aid station, Vehicle Maintenance Facility ... dining facility, laundry facility, and a kennel to support working dogs ... Supporting facilities include roads, power production system and electrical distribution, water well, non-potable water production, water storage, water distribution, sanitary sewer collection system, communication manhole/duct system, curbs, walkways, drainage and parking." 

This headquarters, adds Shachtman, will take a year to build, "at which point, the US is allegedly supposed to begin drawing down its forces in Afghanistan. Allegedly." And mind you, the Special Operations troops are but one expanding part of the US military. 

Creeping gigantism 
The first year-and-a-half of the Obama administration has seen a continuation of what could be considered the monumental socialist-realist era of American war-making (including a decision to construct another huge, Baghdad-style "embassy" in Islamabad, Pakistan). This sort of creeping gigantism, with all its assorted cost overruns and private perks, would undoubtedly have seemed familiar to the Soviets. Certainly no less familiar will be the near decade the US military has spent, increasingly disastrously, in the Afghan graveyard. 

Drunk on war as Washington may be, the US is still not the Soviet Union in 1991 - not yet. But it's not the triumphant "sole superpower" anymore either. Its global power is visibly waning, its ability to win wars distinctly in question, its economic viability open to doubt. It has been transformed from a can-do into a can't-do nation, a fact only highlighted by the ongoing BP catastrophe and "rescue" in the Gulf of Mexico. Its airports are less shiny and more Third World-like every year. 

Unlike France or China, it has not a mile of high-speed rail. And when it comes to the future, especially the creation and support of innovative industries in alternative energy, it's chasing the pack. It is increasingly a low-end service economy, losing good jobs that will never return. 

And if its armies come home in defeat ... watch out. 

In 1991, the Soviet Union suddenly evaporated. The Cold War was over. Like many wars, it seemed to have an obvious winner and an obvious loser. Nearly 20 years later, as the US heads down the Soviet road to disaster - even if the world can't imagine what a bankrupt America might mean - it's far clearer that, in the titanic struggle of the two superpowers that we came to call the Cold War, there were actually two losers, and that, when the "second superpower" left the scene, the first was already heading for the exits, just ever so slowly and in a state of self-intoxicated self-congratulation. 

Nearly every decision in Washington since then, including Obama's to expand both the Afghan War and the "war on terror", has only made what, in 1991, was one possible path seem like fate itself. 

Call up the politburo in Washington. We're in trouble.

http://www.thedailyshow.com/watch/tue-june-15-2010/respect-my-authoritah

There are times when I must admit that to belong to the great group of uninformed people, or perhaps uncaring people, or unthinking people, would be a much easier way to get through life. The developed countries of the world have the wealth to create systems of distraction for the populace, systems generally called the media ranging from the old standard television through to the modern mind-trivia pursuits of Twitter and Facebook, controlled by the corporations that require a non-critical unthinking participation in the diversions that are there to keep the populace amused, distracted, entertained, pseudo-informed, patriotically biased, and generally blasé about the world around them. This cocoon of media hype provides a few glimpses of various man made and natural disasters around the world to provide conversational talking points, but seldom if ever with any context or depth of research, and always isolated one from another as if each incident exists entirely in its own sphere to be ‘ooh’ed and ’ahh’ed at and then forgotten in the daily drive to be the richest sexiest best-looking most consumptive pawn on the block.

Somehow I cannot do that, and it leaves me ‘dazed and confused’ when the mass of information that is available reveals quite transparently that all the major disaster news items are related and that the sum total of them all is that on our current course, we are all facing dramatic and perhaps traumatic changes to our lifestyles. Today’s news items that leave me dazed and confused run the full spectrum of scary items: Euro devaluation; massive oil pools in Gulf of Mexico heading towards Gulf Stream; Arctic long term ice rotting away; 145th Canadian and 1000th U.S. soldier killed in Afghanistan; Israel continues occupying Palestine.

Economics

The global economy appears to be nothing more than a giant Ponzi scheme that will fall apart as soon as a critical person, institute, or mass of investors stops believing they can reap more profits from it. Finance capitalism displays its fault lines all across Europe as the EU in conjunction with the IMF and World Bank - the Washington consensus - bailed out Greece. This imposes on Greece an austerity program that has long proven that it does more to impoverish the middle and lower classes offering more regressive taxation accompanied by a decline in social services and social benefits ranging from medical services, through education to pensions and income assistance.

The bailouts in Greece and the resulting market chaos from a frightened financial sector will take its toll, as usual with the masses absorbing most of the losses in the form of higher taxes and degraded services, public and private. With one big thump, neo-liberalism and its finance capitalism has arrived in Greece, soon perhaps to be followed by Spain, Portugal, Italy and who know what others to join Latvia, Estonia, and Iceland as failing Euro-states.

For all the rhetoric spewed out by global economists, it only goes to strengthen my long held belief that economists are essentially useless and the “science” of economics is an oxymoron as it is based on invented formulas from imagined markets. It also strengthens my fear that sometime soon, combined with all the other elements in the economic news concerning banks and mortgages and employment stats, something catastrophic will happen to make everyone’s savings and earnings next to worthless.

Oiling the Military

And then when it costs an estimated one million dollars a day to maintain one U.S. soldier in the Middle East, it only emphasizes how the military is very much involved with our current global economy, in more ways than one. Along with the cost of the war - in the hundreds of billions of dollars, leading into the trillions - are the costs to the occupied countries from a wide range of parameters including civilian infrastructure (housing, water, electricity, schools, and hospitals), chemical poisons (from various ordinances including depleted uranium and white phosphorous), internal refugees, and the destruction of local economies, increasing the chances of graft, oppression, and criminal activities.

Which still omits the purpose behind the wars in the first place, supposedly based on a global war on terror, and the spreading of democracy and freedom throughout the Middle East…while the reality of the wars is the opportunistic events of 9/11 enabling an excuse to become a global military hegemon trying to capture the oil, gas, and mineral wealth of the region at the same time containing the rising power of China and the re-assertiveness of Russia.

Of course the part of the military news reported this week is the 145th Canadian soldier and the 1000th U.S. soldier to die in Afghanistan, most of them from IEDs buried at roadside or in car bombs, as with this incident in Kabul. Broadly suggested on the patriotic front is that we must all support our troops, something I find hard to do when Canadian troops are not much more than allies for the U.S.’s intent on military control of the world. Seldom is mention given to the thousands, hundreds of thousands, of the local populations killed directly from military action or indirectly from its many collateral consequences. An indigenous person who fights against foreign occupation immediately becomes a terrorist, yet the real terror being spread comes from the reported imminent assault by U.S./NATO forces against Kandahar, even though similar actions in the much less populated villages of Marjah has been an understated failure.

Another tie in militarily is of course Iran and Israel. With Israel thumbing their collective noses at the U.S. administration, unthreatened by U.S. military strength as it has its own finely tuned military - supported in a large part through U.S. ‘aid’ and supplies of high tech military equipment - the U.S./Israel/Iran triangle creates the fearful situation of another impending military action, perhaps leading into the use of nuclear weapons depending on the fierceness or not of Iranian resistance. That scenario is currently tempered by the news report of Brazil’s Lula reaching a limited agreement with Iran and Turkey on the transportation and servicing of enriched uranium, but it waits to be seen how the U.S. and Israel argue their way around this diplomatic action that bypasses their efforts at control.

And then on into Pakistan, ‘Obama’s war’ of choice, undeclared, fought through covert operations within the population and within the government agencies, while a large clear majority of the citizens see the U.S. as the biggest threat to the country. It is also fought through high tech warriors at computers well away from the actual situations, relying on nothing more than their own gut level despisal of the indigenous populations. The Pakistan situation goes to show that the main U.S. response to its declining global economic role, its reliance on oil for the vast majority of its economic demands, its only true method of resolving any situation it does not like, is to send in the military. Who’s next? Iran? Venezuela? Korea? As the U.S. empire becomes even more aggressive militarily, I can only think again, we’re all facing something quite dramatic and traumatic!

More oil

Totally unrelated to all this military and economic garbage, at least as presented by the media, are the two news items this week that supposedly have an impact on the environment. Which they do, but their impact and significance go far beyond the reporting of the actual information as narrowly presented in the news and most commentaries.

The biggest news is that of the BP oil spill in the Gulf of Mexico. It has had no real impact on the economy, other than the regional economy of tourism and fisheries along the Gulf Coast, but no earth shaking effect on the dollar or the overall economy, perhaps more significant if it reaches the Gulf Stream and on into the Atlantic…. Yet it is all too representative of the overall economy. The necessity for oil in our high energy, easy energy economy, the disdain for environmental safeguards, placing profits above the environment we live in, the ignoring of information concerning the drilling operations such as the partial failure of a rubberized protective pressure gasket signals that the corporate world, the supra-national corporations that have effectively superseded governments in many areas, could care less about anything but their own profits.

Our easy energy economy relies on oil and its derivative products. Everything we do, everything we have, is all related to the easy energy provided by oil, a resource that is at or very near its peak, with not a slow rundown on a bell curve at the end, but a roller coaster style drop off as extraction becomes more difficult for a variety of reasons. Our agriculture runs on oil, from the fertilizers, pesticides, insecticides through to its transportation thousands of miles away to the homes of those that can afford the luxury of thousand mile meals. Our health structures, medicines, tourism, our whole civic structure based on the automobile, the world of plastics, the energy needed to make and use all the consumptive demands of our society rely on oil.

All that consumption is expressed in the other news item concerning the Arctic ice cover. The climate change deniers will not go away, but there is irrefutable evidence that the climate is changing. That evidence comes in part from the Arctic ice, now with only twenty per cent of it remaining as long term multi-year ice, the rest is new annual ice. The surprise comes from the awareness that although the winter ice appeared to have regained its cover - as it had - the multi-year ice had diminished greatly and what was left was a conglomeration of rotten ice and new ice. More evidence comes from the indigenous people, the Inuit, who have lived there for millennia and now are unable to read the ice and weather patterns as they change rapidly from their long ancestral observations. The culture changes with it as new names for new phenomena of weather and flora and fauna are being introduced.

All that oil, coal, and natural gas, our natural heritage from millions of years ago when the climate created an enormous energy bounty harvested naturally from the sun, we have squandered on an easy fast paced uncaring life in the short term for a decidedly undetermined, uncertain, and freaky future. The developed countries bounty comes from the easy energy domination of oil and the corporate structures controlling global wealth and global finances. Our changing climate with its wider range of variability is very much still an unknown…but what is known is that the ice cover, which was forecast to be gone in a century or so from the Arctic ocean, is now possibly going to disappear completely (except for winter ice cover) within a decade or so.

There in the Arctic is the confluence of our oily greed, our uncaring effluent affluence, our military solutions to world problems. When I look at the responses to natural and man made disasters around the world I shudder to think what would be the consequence of another major military action that could result in the use of nuclear weapons. I shudder to think what the climate might throw at us as it continues along its unpredictable responses to the carbon energy we are pumping back into the atmosphere. The economy, which in the news is generally front and center, becomes a matter of worthlessness when faced with what could be large and sudden changes in the status of global energy and weather systems.

Solutions….

I sometimes wonder if there are any realistic solutions given human nature, its short term perspectives, its vanity, and its supposed intelligence that somehow always seems to create some form of blowback for its actions. There are solutions, ones that would still create dramatic change but hopefully soften the trauma for everyone. The changes need to be significant and not just the cosmetic panaceas that cover - and conceal - the symptoms but do little for the actual underlying problem of living in a militarized consumptive finance-oriented society

In no particular order, as they are all complementary actions, there are several ideas that need to be put into action, hopefully through a rapid evolution of common sense intelligence toward the planet and its inhabitants, as revolutionary ideas while founded on good ideas and great plans, often create a deterioration into violence that nullifies the intent of the actions in the first place.

Israel/Palestine/Iran and the rest of the Middle East

Israel/Palestine are the symbolic focus of the militarized activity in the Middle East and South Asia. The tie in between the Israeli and U.S. military in all its components (industry, politics, technology, finance) demonstrates the perversity of human nature in relation to a falsely created ‘other’. The ‘other’ for the Israelis occupying Palestinian lands are the Palestinian ‘terrorists’ conveniently supported by the U.S. designation of any thought or action against their occupying forces as being terroristic. The solution to any problem for both countries has proven to be some kind of military violence, neither truly wishing to negotiate, with its implications of equal bargaining rights and acknowledgement of legitimate grievances on the part of the occupied and subjugated peoples.

This part of the solution is simple but I do not see it happening. The occupiers need to go home. The brief spate of democracy that went awry - with Hezbollah gaining recognition in Lebanon, Hamas defeating Fatah in Palestine, the Shia’s gaining power in Iraq with a challenge to U.S. occupation, and Egypt cracking down violently on its renewed opposition to autocratic rule - challenged the very theoretical philosophical rhetoric of democracy and freedom that these countries pretend to uphold. This part of the solution should happen, but it won’t, as the other imperial factors of resources and finances are slowly nibbling away at the security and wealth of the ‘homeland’. The empire will not go away peacefully.

Corporations

Another solution not likely to happen due to the power structures involved and the political and military tie ins is that of controlling the corporations. The supranational corporations - many larger than governments, most having entitlements to sue, threaten, lobby and challenge national governments that even the local citizens do not have, all provided by agreements that were decided upon in thoroughly non-democratic fashion - need to be shut down. Perhaps not totally disbanded, but they need to have their political and legal powers greatly curtailed if not abolished.

Corporations are set up for one purpose - to create wealth for the owners and avoid legal responsibility for anything else while doing so. The big corporations need to be brought under national civilian control, meaning essentially under national law based on human rights, social rights, and environmental responsibility. Responsibilities for the environment, workers conditions and rights, product recycling should all be implemented at both the global and national level. The cost of doing business should include the real costs on the environment and the people that work and live in that environment. Failing that, they should simply be disbanded - nationalized and broken apart.

There would be of course much screeching and crying about the loss of wealth and the loss of employment and the crashing of the global GDP and all the other economic ills that our current finance capitalism and debt burdened financing are creating anyway. With the environment threatened and in return giving humanity a literal unexpected blowback, with the economy teetering on the edge of chaos, the main solution will come from taking away the power of the corporations over the legitimate concerns of a country’s citizens.

Many of these corporations rely on the ‘hidden fist’ of the military for their survival, both for capturing and harnessing resources and markets, but also as part and parcel of the militarily financed corporations that create so much havoc globally. To think they will go peacefully away when their very foundation is threatened by the shrinking energy resources of the world is illusory. Citizens and duly elected governments need to stand up for their integrity and get rid of the power of the corporations that truly rule our lives.

Think skeptically, act positively - live locally, think globally

The foundations of a soft-landing for the restructuring of our relationship with the environment and the decreasing ease of carbon based energy resources needs to start with information and education. With human intelligence and craftiness much could be done to alleviate any hard landings from environmental change, economic collapse, and the loss of easy energy. I have to question whether any government, whether any group really has the power to do this as the inertia within a society based on fast fuel and ease of transportation and manufacturing energy will be hard to transform.

The elites in society will wish to remain the elites and hoard as much wealth and power they can retain as events change around them. Very few people will be accepting of giving up their privileges, very few will be accepting of giving up their easy entertainment and comfortable thoughtless manners that lead us closer and closer to an ultimate need to change and restructure. Change is certain. The environment will dictate that to us very soon, denial or not. The loss of carbon energy will dictate that to us very soon, denial or not.

I expect the news not to change much. What I can hope for is that as many citizens as are able will read and inform themselves about all the global concerns by comparing and contrasting the words with the actions of the current powers, corporate, political, and military. They truly create a dissonant sound, confusing, obfuscating, lying and concealing. Read, be informed, think skeoyically, act positively (act actively - be an activist, let your voice be heard), live locally while thinking globally. In the meantime, I remain, still, dazed at the possible significance of it all for my future and current and future generations of my family, confused by the apparent inability of others to see that action and not complacence is needed to make real progress towards a successful future.

Jim Miles: Dazed And Confused ‎

"The definition of a terrorist is somebody who's stopping America from taking their natural resources"

Is it no longer uncouth for our corporatocracy to openly promote war to the American public as a resource grab?

...Reading this week's New York Times headline - "U.S. Identifies Vast Riches of Minerals in Afghanistan" - many probably wondered how this information was being presented as "news" in 2010. After all, humanity has long been aware of the country's vast natural resources. As Mother Jones magazine's James Ridgeway said after recalling past public accounts of the ore deposits, "This 'discovery' in fact is ancient history tracing back to the times of Marco Polo."

The intrigue in the Times dispatch, then, is not Afghanistan's "huge veins of iron, copper, cobalt, gold and critical industrial metals" that the paper quotes Pentagon officials gushing about - it is the gushing itself. Indeed, the real question is: What would prompt the government to portray well-known geology as some sort of blockbuster revelation?

The Atlantic's Marc Ambinder proffers a convincing answer. Noting the military's coordinated quotes in the Times piece, he writes that the Pentagon is probably trying to bolster Americans' support for the flagging Afghanistan campaign by "publicizing or re-publicizing valid but already public information about the region's potential wealth."

This assertion, mind you, is not coming from some antiwar ideologue in a "No War for Oil!" t-shirt. On the contrary, Ambinder is a quintessential buttoned-down establishmentarian far more interested in covering political process than in pushing a pet cause - which means his charge (later echoed by other Washington journalists) is a particularly powerful one. And if he's correct, we may be witnessing the final spasm of a radical shift.

Remember, the idea that the U.S. invades countries to pilfer natural resources was once written off as an inflammatory insult and/or an unsubstantiated conspiracy theory, irrespective of corroborating facts (like, say, pre-9/11 Pentagon plans to divvy up Iraqi petroleum, State Department proposals to privatize Iraq's oil fields and top government officials insisting Saddam Hussein's overthrow was "essential" to protect oil supplies). The assumption, of course, was that the public opposes resource conflicts and that therefore labeling wars as such is nothing but disreputable slander designed only to harm a political opponent.

This manufactured construct, though, began eroding as soon as George W. Bush started turning the "war for oil" aspersion into a proud clarion call.

In 2005, the Associated Press reported that the president "answered growing antiwar protests with a fresh reason for U.S. troops to continue fighting in Iraq: protection of the country's vast oil fields." During a press conference a year later, Bush three times pitched petroleum as a rationale for war, criticizing "extreme elements" who "want to control oil resources," insisting that "we can't tolerate a new terrorist state in the heart of the Middle East with large oil reserves" and warning that we must stop insurgents from gaining "the capacity to use oil as an economic weapon."

Now, under President Obama, we get leaked Pentagon memos cheerily promising that Afghanistan will become "the Saudi Arabia of lithium" and generals touting the minerals' "stunning potential" - the implication being that America is morally obligated to exploit such potential through armed occupation.

The theater of battle is different but the paradigm is the same: Whereas it was previously considered uncouth for anyone to even suggest that economic hegemony might motivate U.S. military action, our leaders are now boldly selling wars as commendable instruments of such profit-focused imperialism.

Importantly, this revised message relies on the new assumption that the public now sees resource conflicts not as detestable - but as worthy and even admirable. And should that assumption prove true, it would mean that this latest exercise in martial propaganda represents more than mere marketing innovation. It would signal a disturbing change in what the population thinks is - and is not - a just reason for war.

  War for resources now Pentagon's clarion call ‎

Yes,

    Very good video VF. Nothing has changed. The problem is that the vast majority don't see the "big picture" as Tall stated. Using debt as a tool to apply political and economic leverage via the IMF and World Bank has been very effective for the "First World" elite. My father was in the military and spent some time in the Philippines in the 70's and 80's, witnessing the wholesale destruction of their rainforests. He said it made him sick to watch it. He wondered about the "western way of life" being exported to them, but did not realize it was being shoved down their throat.

Excellent article over at the oil drum which backs up everything Ruppert states in the previously posted video. Most importantly, it takes into account the wages of the vast majority which are not rising in sync with the increased cost of oil extraction.

The Oil Drum | What happens when energy resources deplete?

...

I think the ongoing economic collapse is driven by declining energy supply at the world level: We passed the world peak of conventional crude oil in 2005. Considering the primacy of oil to the industrial economy and therefore to our way of living, it’s no surprise the industrial economy is unraveling. Fortunately, it’s taking disaster capitalism with it, albeit far too slowly to suit me.

...

If you think individual conservation efforts scale up to society, consider an incomplete but still stunning overview of the statistics on energy use. For example, the energy in a million barrels of crude oil — the amount gushing in the Gulf of Mexico every ten days or so — will supply your house with power for the next 81,000 years or so but will keep cars on U.S. highways for about four hours. So, at some level we’re all BP (those of you cheering for the industrial economy have company from J.P. Morgan Chase on the BP issue — the spill and cleanup apparently will enhance GDP, at least in the short run). More pragmatically, though, we each bear about as much responsibility for BP’s incompetence and recklessness as we bear for causing planetary ice to melt, the financial success of Wal-Mart, and the microfauna in belly of the nearest polar bear. As much as the media and politicians would like you to feel responsible and guilty, you should feel neither.

I regularly promote the idea of hastening economic collapse. If you’re not on board with that idea, but you still see the huge neon signs pointing us in that direction, perhaps you can be convinced to pursue a modicum of self reliance.

The notion of self reliance, long discarded in a nation where we enslave others to do our drudgery, is about to make a profound comeback. When the new Dark Age gets under way, people who are willing to do useful things with their hands and minds will be welcome additions in any community. The contemporary idea of American-style independence is, in Orwellian fashion, the exact opposite of independence. To secure our food, water, and body temperature, we have become wholly dependent on a large-scale system (the industrial economy). This is the diametric opposite of self reliance, and it’s long past time to focus on self reliance within the context of the interdependence of people in communities. We need each other, but we do not need the industrial economy.

...

Empires don’t break up, they break down. And American Empire is obviously breaking down, with abundant evidence to be found in the striking absence of any appeal to the common good from governments at any level. There has been no semblance of morality emanating from the fascists running the corporations, and therefore the country, since at least 1980. I don’t expect a vast outpouring of empathy and compassion any time soon. Faux compassion, of course. But the real deal? I hardly think so.

Although some insist a slow descent is likely, I have yet to understand how that can possibly work. Feel free to fill me in. Do we dim the lights one percent annually so that, in one hundred years, the electricity goes out without our noticing? Do we reduce our extraction of finite materials a few percent each year, even as the human population grows by more than 200,000 people daily, until we simply, peacefully, stop using everything needed to maintain the industrial economy? Do we slowly, painlessly, with no suffering at all, reduce the human population to a viable number? What is that number? A billion? Fewer?

All these outcomes seem quite unlikely to me. I think we’re so committed to unlimited, exponential growth on a finite planet that we’ll do whatever it takes to delude ourselves into believing that impossibility. If that means we have to destroy everybody and everything so we can have ice cream and cookies every night, that’s exactly what we’ll do. We’re an industrialized world of overfed clowns and we think others are laughing with us instead of at us. In short, I need somebody to show me another way. I’m eager to learn how we can prevent unimaginable suffering and catastrophic die-off on a finite planet. Sans miracles, of course.

Looking back, and relying on a plethora of economic metrics, it’s evident we’ve experienced a lost decade. So we can trace the economic decay to 2000 or so. It’s easy enough to can go back further, tracing the imperial decline to 1979 with the Carter doctrine. Or 1956 with the Interstate Highway System. Or the late 1940s with the federal government’s promotion of suburbia. Or 1789 with the unrelenting thirst for empire at all costs exhibited by the founding fathers. With respect to any of these temporal benchmarks, the decay clearly has accelerated in recent years and months.

From the day I predicted the new Dark Age would begin by the end of 2012, the criticism has been continuous. Most critics, citing no evidence and no understanding of peak oil and its economic consequences, claim we’ll surely adjust and adapt and generally demonstrate our big-brained brilliance with a long descent into peace, prosperity, and infinite good times. Adding balance in a mainstream media kind of way, the occasional critic optimistically — without recognizing the optimism — claims the Dark Age will begin well before 2012. We should be so lucky.

The agenda revisited – Guy McPherson's blog

Peak Energy - Peak Economy

What is Happening?

When you cut into an artery and can't stop the bleeding, you know what happens don't you? The victim dies.

These are dark days for the Ecos. Plagued by a chronic and progressive disease (CO₂ poisoning), she is now been wounded grievously. On the one hand one might look at the seemingly tiny wound to the Earth in the Gulf of Mexico and think that it is so small relative to the vastness of the oceans that surely this one small gusher (I refuse to use the word 'spill' since in English this has a very different meaning than the phenomenon we are witnessing) can't spell the death of the Ecos. In a sense I would agree it isn't the complete death of the planet. But it could be the death of the Ecos as we have known it, just as is likely the case with global warming. We humans are responsible for the demise of species and ecologies. It is impossible to tell how far this destruction will go before the Ecos establishes a new stability.

This is, of course, a completely anthropocentric point of view. The Ecos has undergone so many cycles of die-off and rebirth over its lifetime that this is probably just a replay of an ancient pattern. We don't like it because it affects us. Life, in its totality, probably doesn't care what we like or dislike.

As if the wound wasn't bad enough, now there are speculations of erosion of the casing and bore hole with the possibility of a collapse of the integrity of the sea floor around it. In the worst-case scenario we could see thirty years of oil gushing from the Gulf depths. The damage to the Ecos and humanity that this would cause is beyond the pale.

Obama put a six-month moratorium on deep water drilling. But now the oil folks are protesting and a Federal judge has put a block on that moratorium. The reason given by the plaintiff; the world is desperate for more oil and deep water may be the only additional sources we can find. What does that tell us? About ourselves?

What is About to Happen?

The monetary cost of extracting oil is about to skyrocket. The oil gusher in the Gulf is going to cost far more than the $20 billion that Obama got from BP. Cue the insurance companies. Just the cost of insurance for drilling is going to get a whole lot more expensive. These are real costs that have to eventually be accounted for in the cost of extraction in general. Then there will be the increased cost to society for developing and maintaining a regulatory system for the purpose of preventing these kinds of accidents. Those too are real costs even if they don't show up in the cost accounting of oil companies directly. Actually what will show up in their accounting will be the higher costs of prevention from new technology and especially redundancy needed to make drilling in deep water safer. In plain terms, the total cost of extraction is going up. That means the impact on energy return on energy invested (EROI) is going to be huge. The EROI of offshore oil is already quite low, around 15:1 according to Charles Hall and Jessica Lambert. It will decline much further still with these additional costs associated with deep water drilling. And that, in turn, means that the net energy we get will decline further and faster still (see: Economic Dynamics and the Real Danger).

Couple this fact with the fact that global oil extraction is already in decline (we have passed the peak according to people I truly believe know what they are talking about!) and we have a truly dangerous situation developing.

Rembrandt at The Oil Drum: Europe has posted this chart from the report showing pretty clearly that crude oil production has peaked.

The only thing that is keeping global liquids production more or less on a plateau is growing production of unconventional oil – heavy and extra heavy oil, oil shale, oil sands, natural gas liquids, lease condensates, gas-to-liquids, coal-to-liquids, and biofuels.

You've seen a version of the below graph several times before. This is from my computer model of the systems dynamics of energy flows from finite sources such as fossil fuels. I've marked this version with labels, A, B, and C to discuss what kinds of things are happening at each of these 'inflection' points. These are the points in the dynamic history of energy flow when things change.

Point A is what we call the 'knee' of an exponential growth. This is the point at which the slope of the tangent to the curve (from calculus) is exactly one. Prior to that point the slope had been less than one. Afterward it is greater than one. And it grows greater as the system growth accelerates at an accelerating pace. This is the period William Catton called the "Age of Exuberance" (Overshoot).

Along with the rise of energy flow during this period (roughly the late 1700's to about 1960, to put it into historical perspective), world population expanded exponentially as well (see the graph in the Wikipedia article). Some authors have felt that the two growth phenomena are linked causally. An overly simplistic version would have world population expanding because of the growing abundance of fossil fuel energy. But, while they are correlated phenomena, we have to be careful not to infer any form of one-way causality here. The fact is that the expansion of fossil fuel extraction was driven by demand, the combination of increasing numbers of people and their individual increasing demand for more energy. The latter was made possible because so many very clever people kept inventing new ways to consume high power energy to save people time and effort. Since people are highly motivated to save time and effort, both as individuals and in profit-making firms, they clamored for more machines to do their work and do it faster.

With the increasing ease (and safety) afforded by using machines to do our work for us life became more supportive of procreation! Infant mortality went down. Nutrition improved (at least in terms of calories). And old people lived longer with improved life extending medical procedures and medicines.

As long as EROI for oil (especially) remained relatively high (costs in the above graph staying relatively low), the energy extraction firms were highly motivated to produce more product, even though they were drawing down a fixed, finite resource in doing so. The growth of population, consumption per capita, and the supply of fossil fuel-based energy were mutually reinforcing through the human psyche and the money-measured economy. The exponential rise is explained by this form of circular causality or positive feedback loops. During the age of exuberance there seemed to be nothing but growth in sight.

Point B, however, represents a very subtle, unnoticed shift. All the while that positive feedbacks were driving growth higher and higher a number of socioeconomic and physical facts were at work to strengthen the negative feedback loops. Namely the combined effects of increasing complexity and depletion of resources both contributed to increasing energy costs for extracting gross energy (the raw fossil fuels). Since no one bothered to measure net energy (gross minus costs) in addition to net profit in monetary terms, no one detected the shift back to a tangent slope of less than one. Over the history of the age of exuberance economists had decided that the money system had no more relationship to physical reality and it was free to be whatever it could be. And people had decided they cared about money more than understanding physical reality.

Still physical reality would not be denied. Something was different and started to be felt in the developed economies of the world. Everything was costing more as time went on. This is because energy, not money, is the real currency of the economy. It is required for all economic activity and, thanks to the Second Law of Thermodynamics, once energy is used doing work it is gone and more must be added to do any kind of value added work. In other words, energy use (and loss) accumulates in supply chains. Monetary costs do too, but not quite in the way that energy does, since money circulates (and recirculates) whereas energy goes on a one-way trip through the economy. Thus money had already been decoupled from its real purpose, which was to inform us how much energy (work) we could command.

Over the whole history of economic growth we had gotten into the habit of borrowing money to finance new activities. At first this was borrowing from savings — previously earned income that was surplused. Initially these surpluses were our best form of insurance against future troubles. But with energy flow increasing and troubles largely mitigated by technology we slowly changed our attitude about keeping this money (representing work) aside for a rainy day. We started using it to finance current projects that would/should pay back larger profits in the future, thus allowing us to pay back the loan with interest plus still make a profit from the value of the work we would accomplish in that future time.

Then things changed. Energy flow started to decelerate. It was subtle and totally off the radar screen, so to speak. But less energy flow means less work can be accomplished. The rate of creation of assets began to decline ever so slightly. Along with this phenomenon came a condition for people in the OECD countries. They had grown used to using lots of energy for anything they wanted to do. They had been increasing the material wealth aspect of their standard of living. They had been demanding, and getting, increasing monetary incomes to pay for their high-energy lifestyles (Americans, on top of getting used to all the material goods became profligate wasters of energy). So costs for manufacturers and some service providers were going up due to wage inflation, but also because the accumulation of energy costs were starting to hurt. This was made explicit during the 1970s OPEC oil embargo, but quickly forgotten when the political emergency passed. But as fossil fuel extraction costs continued to climb, slowly but surely as the resources became harder and harder to find and get to, the pressure on energy price rises could not be denied.

The brilliant capitalists responded with two very rational but completely misguided responses. The first was to seek lower labor costs by moving production and some services off-shore from the major energy consuming labor force in the OECD countries. Globalization was ramped up to new levels as corporations sought labor pools that required lower wages since their lifestyles consumed far less energy. Corporations could substitute cheaply priced bunker fuel for expensive living OECD labor. Related to this was the tendency to look the other way as immigrants, some legal, seeking employment flooded into OECD countries. They too were willing to labor for less pay since they had lower consumption habits.

The second response was to keep up appearances through the use of creative financial products. Essentially it started with churning real estate to create the illusion of appreciating prices. Make loans to people who probably didn't have a hope of doing more and better work in the future and they would never earn the income necessary to service their mortgages. But it didn't matter. First you bundle the bad debts into a package and dice it up so that you give the appearance of spreading and hedging risk, thus creating a marketable piece of paper. You create wealth with a magic wand, when all else fails. Not only did this magic give an opportunity to bankers and Wall Street boys to make great commissions, it gave the politicians cover. When you added all the 'dollars' created by these transactions into the GDP it made it look like growth of the economy was on track. Of course, all the while the purchasing power of the middle and lower class was evaporating. Even two wage earners per family didn't do the trick of keeping up with the Joneses. Real wealth was already in contraction by the 1970s and what wealth was being produced was being increasingly absorbed by the top one percent of the population (in the US anyway).

After point B in the graph (~1970) things started to degrade at an increasing rate. The cost of energy, which represents the true cost to society to have an industrial system, rose inexorably. The curve of cost in the graph looks kind of linear, but in fact it is also exponential, just at a very slow rate of acceleration. In reality it probably took a sharp upturn after the advent of ocean drilling which required much more expensive equipment (platforms) and infrastructure (oil ports and ships).

Meanwhile the growth of population had gained considerable momentum, even as the live birth rate dropped in OECD countries; more mouths to feed on oil and natural gas powered agriculture. Developing countries were being subsidized by the OECD breadbaskets of the world and to many who lived there it must have seemed like the promise of development was finally turning their way. Birth rates in these countries continued to be high while death rates declined due to the support from OECD benefactors.

Now we are either approaching or already past point C. Peak oil may not be the same as the peak of total energy flow, but it is probably pretty close. The reason is that oil is the most usable of all the fuels we use. It takes a lot of diesel fuel, for example, to remove mountain tops and dig the coal seams as well as transport the coal to the power plants. So oil plays a role as a king pin energy source. When it reaches the peak of extraction rate, the costs of extraction of other fossil fuels will surely start to climb meaning that total net energy will decline.

One of the semi-surprising results of my physical model is the revelation that the peak of net energy precedes that of gross energy by some number of years, perhaps ~30. This makes sense on first principles and if we are near or approaching the peak of gross energy extraction then we have likely already passed the peak of net energy — the energy we absolutely need to maintain our civilization.

As disruptive and painful as the deceleration of energy flow has been and the various dislocations it has been causing for the last thirty to fifty years, imagine how bad it will be when there is zero growth of net energy flow. In point of fact, I assert that what we are witnessing now is the coming undone of the social, political, and economic fabric of our civilization as the energy truth of it has hit full force. Most of the population still has no clue as to what is causing all of the turmoil, on a global basis, and the seemingly endless string of calamities and incompetencies and ineffectivenesses that have become a hallmark of our time (If we could put a man on the moon, why can't we fix ...?). Just one decade into the 21^st century we are keenly aware that things are just not right and dimly aware that it might not get better anytime soon. More people today feel on the brink of catastrophe without actually understanding why. Yet the reason is so simple. We broke into the energy bank beneath our feet and spent the funds on as much junk as good investments and we did it at all possible breakneck speed. And now we are bankrupt.

What Happens After That?

Unless somebody comes up with an as yet unanticipated source of energy, a real source that doesn't violate the First or Second Laws, a source that provides the level of power that fossil fuels have done, there is only one possible conclusion. Oh, and if you think that the solution is in technology or so-called alternative (e.g. solar, wind, nuclear, etc.) you should read this. We have to face up to the hard fact that fossil fuels provided something quite extraordinary that enabled us to invent wonderful machines and consumables that simply hastened the drawdown of those fossil fuels. And now we are about to reach the point where it takes too much energy to extract the next unit of fossil fuel energy. And we simply cannot support the kind of life we have had with that power.

As the graph shows it is all downhill from point C. We have come fully to the end of the age of exuberance and the only remaining question is: How gracefully will we ride the decline?

There are, doubtless, some things we could do if we were wise enough to get started right now, that might ease the pain and suffering somewhat. There is a huge amount of wastage currently in the system that, if cut out, would extend and soften the slope of the downhill side of the curve. Even though alternatives are not currently a long-term solution (since they cannot produce enough excess power to replicate themselves before the end of their life cycles), taking a lot of the energy we currently spend on war and highway repairs might better serve by being invested in some combination of alternatives that will help keep the wheels coming off entirely while we are speeding along at breakneck pace.

But as readers know, I am very cynical about our capacity for wisdom. Ergo, the bottleneck approaches. The best bet for humanity is to prepare for the worst and invest in the kind of people we would hope could make it through the bottleneck. People who might seed some future species of humanity that would not make the same mistakes we have. Not just because they will not have the energy bank, but because in all matters they will be inherently far wiser than we have been. To put it, ironically, in somewhat faith-based terms, I believe that is our salvation.

http://questioneverything.typepad.com/question_everything/2010/06/peak-energy-peak-economy.html

http://casafoodshed.org/archives/category/peak-oil/

24 June 2010, 1:30 pm

WikiLeaks Founder Drops ‘Mass Spying’ Hint

By Andrew Fowler / ABC — WikiLeaks co-founder Julian Assange has given his strongest indication yet about the next big leak from his whistleblower organisation.

There has been rampant speculation about WikiLeaks’ next revelation following its recent release of a top secret military video showing an attack in Baghdad which killed more than a dozen people, including two employees of the Reuters news agency. Continue reading ‘WikiLeaks Founder Drops ‘Mass Spying’ Hint’ »

Wikileaks Editor Interview on Censorship

!

WarAgainstAllWars

From Thom Hartman's blog:

This So-Called "Banking Reform" Bill

"Nearly two years after the American financial system teetered on the edge of a great Republican depression, Congressional lawmakers have come to an agreement early Friday morning to reconcile competing versions of the the bill in the biggest overhaul of financial regulations since the last Republican Great Depression. Big banks won big in this, as they can continue investing a significant amount of equity in hedge funds. The banks lost when it comes to speculative trades with their capital, although there are some loopholes that may turn into truck routes. The bottom line seems that, much like the so-called health insurance reform, there are a few really good bones in here thrown to consumers but the power, wealth, and monopoly of the big banks that, as Senator Byron Dorgan said of the US Senate, "They own this place," continue to own the Senate as well as you and me. There are no efforts whatsoever in the bill to do the single most important thing necessary to return competition to banking and prevent another economic collapse - that being breaking up the too-big-to-fail banking institutions and require banks to just be banks instead of bank/casino hybrids. Just like the so-called "health insurance reform" will actually give more power and money to the dozen or so monopoly US for-profit health insurance blood sucking leeches...er...corporations and their CEOs, this so-called "banking reform" bill will give more power and money to the half-dozen largest and monopolistic US banks and keep the billion-dollar bonus paydays coming to their CEOs and senior executives and traders."

This So-Called "Banking Reform" Bill | Thom Hartmann

06/25/2010

Financial Reform — We Get F**ked Again

It's always a good day when we can put a thorny issue to rest. As the nation slept, Senate & House leaders "negotiated" all night long to patch together the final Financial "Reform" bill. The official verdict has now been handed down: we got fucked again.

That's not a surprise, of course, it's just what we expected. Over the last 3 decades, Big Finance took over large parts of the economy by bribing key players to set up the rules so that They Win and You Lose. This led to a blow-up of the financial system after the Housing Bubble collapsed in 2006. There's nothing new in financial systems blowing up—historically, crooked schemes set up to bamboozle investors have blown up time & time again.

Having relaxed the rules to allow unlimited financial speculation & scheming, the Congress was presented with the exceedingly difficult task of "fixing" the monster they had created. This task is exceedingly difficult because it involves appearing to fix the system while doing nothing of the sort. But we should never underestimate the cleverness of men like Barney Frank and Chris Dodd when confronted with daunting challenges.

The Huffington Post's Shahien Nasiripour was apparently up all night recording the farce. You can find his excellent summary of the proceedings at Financial Reform Bill Passes: Banks Keep Derivatives Units, Volcker Rules Softened; House-Senate Conference Passes Financial Reform Bill After Marathon Session. (I think Shahien was a little tired when he wrote that headline.) Here are some choice tidbits to convey the flavor of what went on—

The so-called Volcker Rules originally banned banks from using their own taxpayer-backed cash to speculate in the financial markets. The federal government stands behind bank deposits, and banks have access to cheap funds from the Federal Reserve. Volcker argued that banks shouldn't use that subsidy to speculate...

As for the measure's proposed ban on banks trading with their own money, also known as proprietary trading, the agreed-upon provision calls for federal financial regulators to study the measure, then issue rules implementing it based on the results of that study. It could be anything from an outright ban to a barely-there limit.

The bill calls for a two-year study of the provision banning proprietary trading by the banks. Most news sources are reporting that the bill does indeed ban proprietary trading by the banks. Maybe it will and maybe it won't. Who knows what the "ban" will look like two years from now after the regulators have studied it? Let's hope they're not too busy watching porn on the internet...

This next bit, about Blanche Lincoln's (D, Ark) proposed reform, does not require comment, it speaks for itself—

Lincoln's provision, under fierce assault by the Treasury Department, the Obama administration, and a group of Wall Street-friendly Democrats called the New Democrat Coalition, also was softened.

Lincoln's proposal would have compelled the nation's megabanks to move their swaps-dealing units, which deal and trade in a type of financial derivative product, into a separately-capitalized institution within the larger bank holding company...

Though Lincoln's measure had the support of three regional Federal Reserve Bank presidents -- James Bullard of St. Louis, Richard Fisher of Dallas, and Thomas Hoenig of Kansas City -- representing the Fed and bankers in the broad middle of the country from Kentucky to Colorado, they ultimately were outmatched. The Fed's Board of Governors, led by the nation's central banker, Ben Bernanke; Federal Deposit Insurance Corporation Chairman Sheila Bair; Treasury Secretary Timothy Geithner; and the nation's largest banks were united in their opposition.

Two minutes before midnight, Collin Peterson, a Minnesota Democrat, announced that a deal over Lincoln's divisive measure had been reached.

"There's been some work done by the administration and some of the senators on a potential compromise, I guess you could call it," said Peterson, chairman of the House Agriculture Committee, in a reference to the Obama administration.

Rather than banks being forced to spin off their swaps desks, they'd be allowed to keep those units dealing with "the biggest part of all these derivatives," Peterson said. The rest would be pushed out to an affiliate.

The negotiations were not public.

I'm sure they weren't! Former SEC chairman Arthur Levitt had this to say about the reform package—

No matter the results of these final points, the bill is a huge failure and a major missed opportunity, according to former SEC chairman Arthur Levitt. “The bill, already weakened by deal-making as it emerged from the Senate, has been bled dry of nearly every meaningful protection of investors,” he writes in a WSJ op-ed.

I can't top that. In the video below, Tech Ticker's Henry Blodget and Aaron Task don't just come right out and say the Empire is in Decline. But you know that's what they're thinking.

Go here for video:

http://www.declineoftheempire.com/2010/06/financial-reform-we-get-fked-again.html