Book Review, Murdoch’s world: The Last of the Old Media (via The Moderate Voice)Murdoch’s world: The Last of the Old Media Empires’ by David Folkenflik gives us a look at Rupert Murdoch from the time his father died to the middle of 2013. Rupert Murdoch was 21 when his father died and he inherited a small regional Newspaper…
The fact that millions of jobs have been moved offshore is the reason why the most expansionary monetary and fiscal policies in US history have had no success in reducing the unemployment rate. In post-World War II 20th century recessions, laid-off workers were called back to work as expansionary monetary and fiscal policies stimulated consumer demand. However, 21st century unemployment is different. The jobs have been moved abroad and no longer exist. Therefore, workers cannot be called back to factories and to professional service jobs that have been moved abroad.The economies of the United States and Western Europe are in decline because they now produce little that can be exported and most of what we consume is imported. An economy that doesn't turn raw materials into something more valuable is not sustainable.
Economists have failed to recognize the threat that jobs offshoring poses to economies and to economic theory itself, because economists confuse offshoring with free trade, which they believe is mutually beneficial. I will show that offshoring is the antithesis of free trade and that the doctrine of free trade itself is found to be incorrect by the latest work in trade theory. Indeed, as we reach toward a new economics, cherished assumptions and comforting theoretical conclusions will be shown to be erroneous.
This book is organized into three sections. The first section explains successes and failures of economic theory and the erosion of the efficacy of economic policy by globalism. Globalism and financial concentration have destroyed the justifications of market capitalism. Corporations that have become “too big to fail” are sustained by public subsidies, thus destroying capitalism’s claim to be an efficient allocator of resources. Profits no longer are a measure of social welfare when they are obtained by creating unemployment and declining living standards in the home country.There is not a lot in the book but Dr Roberts puts it all together in a concise if shrill way. He explains what could be done to turn it around but then says it won't be because Wall Street and the large financial institutions have captured the government - we have essentially become an Oligarchy. Much of his discussion of the financial system comes from Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History by Matt Taibbi.
The second section documents how jobs offshoring or globalism and financial deregulation wrecked the US economy, producing high rates of unemployment, poverty and a distribution of income and wealth extremely skewed toward a tiny minority at the top. These severe problems cannot be corrected within a system of globalism.
The third section addresses the European debt crisis and how it is being used both to subvert national sovereignty and to protect bankers from losses by imposing austerity and bailout costs on citizens of the member countries of the European Union.
Economists do a poor job of adjusting economic theory to developments brought by the passage of time. Just as capital theory originated prior to the income tax and free-trade theory originated at a period in history when capital was internationally immobile and tradable goods were based on climate and knowledge differences, economists’ neglect of the ecosystem as a finite, entropic, non-growing and materially closed system dates from an earlier “empty world.” In an empty world, man-made capital is scarce and nature’s capital is plentiful. In an empty world, the fish catch is limited by the number of fishing boats, not by the remaining fish population, and petroleum energy is limited by drilling capability, not by geological deposits. Empty-world economics focuses on the sustainability of man-made capital, not on natural capital. Natural capital is treated as a free good. Using it up is not treated as a cost but as an increase in output. Economic theory is based on “empty-world” economics. But, in fact, today the world is full.
In a “full world,” the fish catch is limited by the remaining population of fish, not by the number of fishing boats, which are man-made capital in excess supply. Oil energy is limited by geological deposits, not by the drilling and pumping capacity of man-made capital. In national income accounting, the use of man-made capital is depreciated, but the use of nature’s capital has no cost other than extraction cost. Therefore, the using up of natural capital always results in economic growth.
When Rand was five or so, she recalled, her mother came into the children's playroom and found the floor littered with toys. She announced to Rand and Rand's two-and-a-half-year-old sister, Natasha, that they would have to choose some of their toys to put away and some to keep and play with now; in a year, she told them, they could trade the toys they had kept for those they had put away. Natasha held on to the toys she liked best, but Rand, imagining the pleasure she would get from having her favorite toys returned to her later, handed over her best-loved playthings, including a painted mechanical wind-up chicken she could describe vividly fifty years later. When the time came to make the swap and Rand asked for her toys back, her mother looked amused, Rand recalled. Anna explained that she had given everything to an orphanage, on the premise that if her daughters had really wanted their toys they wouldn't have relinquished them in the first place. This may have been Rand's first encounter with injustice masquerading as what she would later acidly call "altruism." Her understanding of how power can be acquired by a pretense of loving kindness would grow only more acute with time.
Perhaps it's little wonder, then, that from the age of four or five onward, Rand developed a keen sense that anything she liked had to be hers, not her mothers, the family's, or society's, an attitude that readers of her 1943 novel The Fountainhead will recognize in the perverse and complicated character of Dominique Francon. As a corollary, she claimed not to care about being approved of or accepted by her family and peers. Since she generally wasn't accepted, the proud, intelligent child appears to have learned early to make a virtue of necessity. In her twenties and thirties, she would construct a universe of moral principles built largely on the scaffolding of some of these defensive childhood virtues.
"I have found a flaw" in free market theory, Greenspan said under intense questioning by Representative Henry Waxman, the Democratic chairman of the Government Oversight Committee of the House of Representatives. "I don't know how significant or permanent it is," Greenspan added. "But I have been very distressed by that fact."
Pressed by Waxman, Greenspan conceded a more serious flaw in his own philosophy that unfettered free markets sit at the root of a superior economy.
"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms," Greenspan said.
Waxman pushed the former Fed chief, who left office in 2006, to clarify his explanation.
"In other words, you found that your view of the world, your ideology, was not right, it was not working," Waxman said.
"Absolutely, precisely," Greenspan replied. "You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well."
Do you like a good crime novel – a corporate crime novel? If so The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America--And Spawned a Global Crisis by Michael W. Hudson is for you. Unfortunately it's not a fictional novel but the history of the mortgage crisis that may yet bring down the US and world economy. At the downtown L.A. branch, some of Glover's coworkers had a flair for creative documentation. They used scissors, tape, Wite-Out and a photocopier to fabricate W-2s, the tax forms that indicate how much a wage earner makes each year. It was easy: Paste the name of a low-earning borrower onto a W-2 belonging to a higher-earning borrower and, like magic, a bad loan prospect suddenly looked much better. Workers in the branch equipped the office's break room with all the tools they needed to manufacture and manipulate official documents. They dubbed it the "Art Department."There was lots of money to be made so neither the investment banks that were packaging the loans or the investors buying them questioned the loans themselves. But the continued growth depended on a continued influx of new loans and rising home values – it was in effect a Ponzi scheme. When the housing bubble deflated in 2007 the Ponzi scheme collapsed.
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What if a customer insisted he wanted a fixed-rate loan, but you could make more money by selling him an adjustable-rate one? No problem. Many Ameriquest salespeople learned to position a few fixed-rate loan documents at the top of the stack of paperwork to be signed by the borrower. They buried the real documents—the ones indicating the loan had an adjustable rate that would rocket upward in two or three years—near the bottom of the pile. Then, after the borrower had flipped from signature line to signature line, scribbling his consent across the entire stack, and gone home, it was easy enough to peel the fixed-rate documents off the top and throw them in the trash.
Tainter makes this observation; substantial increased costs occurred late, shortly before collapse and were incurred by a population already weakened by a pattern of declining marginal returns. It was not a challenge that caused the collapse but a system that had been unproductively complex was unable to respond.
Tainter says that the only solution for over complexity is simplification but complex systems are unable to voluntarily simplify. Collapse is nothing more than involuntary simplification.
When the tipping point comes, Americans will be compelled to live very differently than they do today. One leading American social critic, James Howard Kunstler, sees serious political and cultural turmoil up ahead as the way of life Americans have built over the last 60 years begins to break down. With decreasing access to cheap oil, Kunstler sees the fundamentals of industrial agriculture, manufacturing and retail trade changing significantly.
"The whole Archer Daniels Midland model of turning oil into corn into Taco Bell that whole complex, that system, is really going to be over," says Kuntsler. "We're going to be forced to grow more of our food locally and return to a kind of agriculture that really hasn't been practiced here in a long time. A lot of the land that has only had value as suburban development in the past 30 or 40 years is going to have to be reassigned."
Likewise, Kunstler foresees "the demise of Wal-Mart style, big box, national chains." Companies whose profit margins depend on "merchandise made by factories 12,000 miles away" simply won't function in a world of $100-plus barrels of oil. "We're going to have to seriously reorganize our whole system of retail trade and economy."
I was born into a class, in a time, to a people, in a place where someone else's sons and daughters served in the armed forces. While I wasn't a politician's boy or a spurner of old money like in the fables, a child of two lawyers still qualified as a Fortunate Son in most parts of the world. I was raised in that curious subculture of Americana enslaved to emo music, new friend requests on Facebook, and lots and lots of Internet porn-part of the generation that the "An Army of One" slogan supposedly appealed to, due to our obsession with all things self. I didn't come from the breadbasket of rural America or the urban ghettos like most of my men, and I didn't seek out the military for glory or for country. I came from the West Coast suburbs, modern white collar contentment at its most gnarled and escapist, and happened to read too many damn books about soldiers.
Just another day in the Suck. Just another day of counterinsurgency tedium, solving a nonconventional, nation-building, political problem with a conventional military used to nation destroying that sometimes forgot it was trying to be nonconventional. Just another day of our dismount teams walking with me between creeping Strykers, winding through the back alleys and alley backs of Saba al-Bor. Just another day of talking to the locals and listening to their multitude of gripes, bitches, and complaints. Just another day of "mistah, mistah, gimme-"
"Please, sir, I want some more."
A great deal of what is traditionally denoted in historical studies as Persian, Iranian, and even Indian history involves the cities and principalities of what is now Afghanistan. Composed of tribes that were even at the time recognized as ethnically and culturally distinct, such ancient cities as Kandahar, Bamiyan, Mazar, Herat, Kabul, Bagram, and Baikh played a leading role in the evolving history of the region and the civilized world. Over the millennia, rulers from these cities swept far outside their territories to conquer and for long intervals rule over kingdoms stretching from China to the Caspian Sea. At times Afghan dynasties controlled the fate of Indian and Persian empires, while no less a figure than Zoroaster (Zarathustra) is said to have gained renown as a priest-scholar in the northern Bactrian city of Baikh, now located in Afghanistan, not far from Mazar-e Sharif.
But the ancient apocalyptic religious teachings accredited to Zoroaster take on even more meaning when placed against a backdrop of today s holy war. For what may seem to our modern secular society a hopelessly anachronistic throwback to the past is in fact seen by its mystical holy warrior participants in Washington and elsewhere as the final act in an ancient historical drama.
Dreyfuss writes, "In the Nouvel Observateur interview, Brzezinski admitted that his intention all along was to provoke a Soviet invasion of Afghanistan-even though, after the Soviet action occurred, U.S. officials expressed shock and surprise. 'We didn't push the Russians to intervene, but we knowingly increased the probability that they would,' said Brzezinski." "'Now,' he told President Carter in 1979, 'we can give the USSR its Vietnam war.'"
President Obama will face the toughest foreign policy decisions of any president since Franklin Roosevelt. But among the toughest of those tough decisions will be how to handle the ongoing battle for Afghanistan.
Lest he fall prey to the popular misconceptions and the self-fulfilling delusions of Washington s current Beltway wisdom, he should be well advised that today's Afghanistan is more a creation of Washington, Islamabad and London than it is of Kabul. He should also be advised that achieving anything resembling a real victory will require much more than just additional troops or taking the battle into Taliban- and Al Qaeda-controlled areas of neighboring Pakistan. It will require rethinking some basic assumptions about both Afghanistan, and Pakistan and America's goals in
the region.
