Monthly Archives: July 2011

Tim DeChristopher, your travails are a gift to us all.

You will not find a more eloquent, courageous and principled moral statement anywhere.  This statement is on a moral par with Martin Luther King’s letter from the Birmingham jail, and he goes to prison for all of us.  Coming on the heels of my post regarding Peak Oil, I am compelled to post this statement, made by Tim DeChristopher to his sentencing federal judge.  It is the measure of moral action that each of us should be prepared to undertake, and to accept, as the cost of taking right action.  Here, in his own words:  http://www.peacefuluprising.org/tims-official-statement-at-his-sentencing-hearing-20110726#comment-36345

What is a dollar?

Ya gotta love Ron Paul.  Well, maybe not love him, but I at least admire his tenacity and perseverance.  And also his point:

On Tuesday, Kansas City Fed President Thomas Hoenig testified before the House Financial Services domestic monetary affairs committee, which Paul chairs.  (I’m drawing this information from here:  http://blogs.reuters.com/macroscope/2011/07/27/the-meaning-of-a-dollar/)  Paul, as was the case when Bernanke testified two weeks ago, is really wanting someone at the Fed to explain to him why the U.S. Dollar is “money.”  (See the testimony of Bernanke in response to Paul’s questioning here:  http://www.youtube.com/watch?v=2NJnL10vZ1Y)

Dictionary.com defines money thusly:

mon·ey

http://sp.dictionary.com/dictstatic/d/g/speaker.swf [muhn-ee]  Show IPAnoun, plural mon·eys, mon·ies, adjective

–noun

1.  any circulating medium of exchange, including coins, paper money,  and demand deposits.
3.  gold, silver, or other metal in pieces of convenient formstamped by public authority and issued as a medium of exchange and measure of value.
Apparently, Hoenig had studied the dictionary definition of “money” prior to his testimony, which would have been wise, since he no doubt knew that Paul would question him, and had a template of the questioning from the Bernanke testimony.  Hoenig’s own response to Paul’s question, “What is a dollar and who says it’s money?”:  “Money is a medium of exchange, a means of payment and a store of value and the dollar fits that description.” Good job, Hoenig.  You can read a dictionary. That’s good to know.
But really, who doesn’t know what Paul is driving at?  Certainly the Fed Chair and Hoenig pretend not to.  But I cannot believe that the people put in charge of our central banking and monetary system don’t know precisely what Representative Paul is asking.  Surely we’ve recruited brighter people than that.  Right?
The truth is that they do not want to answer the question, because anyone watching C-Span is going to understand that the Fed’s policies are reprehensible, insane, and devastating to Americans.
Through QE I and QE II, the Fed has engaged in a policy of printing trillions of greenbacks, which they and the Treasury promptly handed over to the largest banks.  Their rationale was that by pouring this money into the economy (called increasing “liquidity”), the banks would be able to lend money at cheap rates of interest to individuals and entrepreneurs, who through their renewed vigorous activities, would stimulate the economy.  Except there were two problems with that.  The first is that consumers entered the financial meltdown in 2008 in hock up to their necks, and they weren’t inclined to go further in debt.  Especially while their homes and businesses were being forced into bankruptcy and foreclosed upon.  The second is that the banks simply did not lend the money.  Hiding behind the hideous excesses they themselves created, the banks pronounced that they would only lend to sterling creditors, and have basically shut down lending entirely.  So all that cash that was handed to them wasn’t “trickled down” to the citizenry.  But it also didn’t just sit static in their accounts, waiting for willing and sterling lenders to show up.
Where did it go?  Into commodities.  Oil, food, basic and precious metals.  (Yes, gold and silver…)  The increasing conversation about “emerging markets” refers, to a large extent, to just that.  That money is going to buy land, ranches, farms, cattle, mining interests, factories producing real and useful products, on and on and on … in those emerging markets, what used to be referred to as the “Third World.”  It is not being invested here.  Let me put this more bluntly.  Our government printed money, which they then handed to the richest 1% of our society, who then took this free “money” and are busy putting it to good use … elsewhere.
Now, from the perspective of the indigenous peoples of those emerging markets, they see a flood of foreign capital into their countries.  Yes, it is creating jobs for them.  Lots of them.  But the investors are not themselves indigenous.  It is, to borrow an American refrain, “foreign money.”  And the benefits are not distributed equitably, just as it wasn’t here.  Yes, a bunch of poor and middle class of those countries are seeing increasing wages and increasing job opportunities, but the profits are being siphoned off into offshore accounts in the Caymans and Seychelles.  Or used to buy up even more land and capital assets, more mines, more cattle.  And because available land is becoming scarcer, it is becoming more expensive.  I spoke with a lady today who had just returned from Peru.  She informed me that in the past few years, her property there had tripled in value.  Because of that, she was able, upon her return to the United States, to pay cash for a new house.
That’s a great deal for the 1%.  But let’s remember where the money came from.  One common refrain in these days is that the money was “created out of thin air.”  But that is not quite true.  The “money” was indeed printed, and that money printed did not come from production.  It was, truly and simply, printed.  Dollars.  And that, my friends, results in inexorable inflation.  When production remains static, but the money supply increases, each dollar printed is worth less.  Each dollar buys less production.  Prices rise on everything.  Wheat, gasoline and tractors all cost more.  Which means that bread costs more, plain and simple.  Thus, inflation caused by the Fed’s easy “money” policies really constitutes a tax on each and every American.  But unlike those in the emerging markets, our wages are not increasing.  In fact, they’re decreasing as measured against inflation, and they have been decreasing like this for forty years.
See, it did not use to be like this.  Prior to 1933, our dollar was pegged to gold.  FDR ended that, and then in 1971, Nixon severed the dollar from the silver standard.  Those metals operated as money (not “money”) reserves because they were produced in known quantities, held in known quantities, and so long as the dollar was understood to be worth 1/35th of an ounce of gold, you knew what that piece of paper in your hand was worth.  If an ounce of gold did not come into the treasury, then 35 greenbacks could not flow out of it.  But now the dollar means whatever the Fed and the markets decide it means.  In concrete terms, it means … nothing.
Note that Hoenig defined the dollar as a “store of value,” and not a “measure” of value.  A measure of value would imply that the “money” would maintain its worth relative to something else of value.  A “store” of value just refers to something that may or may not maintain its value relative to other things of value.  Like gold.  Or bread.
During Bernanke’s testimony, Paul asked him why, if gold is not money, the Fed holds reserves of gold.  Bernanke struggled mightily with that one, and eventually answered, “Tradition.”  Paul jumped on him, and asked him why they did not keep diamonds, instead.  Bernanke could not, or would not, distinguish between gold and diamonds.  But the distinction is easy.  One ounce of gold, of a known level of purity (.999 fine), is worth the same as one ounce of .999 fine gold anywhere else in the world.  Diamonds, however, vary in worth radically.  Two diamonds of exactly one carat each will not be worth the same amount, due to variations in cut, clarity, brightness, color, etc.  For that reason, diamonds cannot be used as money!
So Representative Paul’s question is this:  If the Fed can vary the value of a dollar by simply printing more, why is that money?  It bears no relation to production, it bears no relation to stable and known supplies of any precious metal, it simply is worth whatever the Fed and the markets decide it should be worth.  And what the hell kind of “medium of exchange” is that?
A friend asked tonight what she should do with some cash she has on hand.  Should she put it in her 401k?  Hell no.  I advised her to buy food.  That is the one thing I am rock-solid certain that will not decline in value anytime soon, no matter what the Fed’s policies are.  Unlike the dollar, it won’t devalue while she’s holding it.  Unlike the dollar, she can eat it.  Unlike the dollar, it is worth something real.

Peak Oil

This is a topic that has come up tangentially in a few comment boards and blogs I’ve looked at over the past week. It also came up in a discussion I had a couple weeks ago. The amazing thing about “Peak Oil” is that it so easy to see and understand in every day conversation, if someone bothers to think about it. Unlike economics and politics, which seem so complex and subjective, obscure, and prone to, literally, violent positions. But oil is just oil. It comes out of the ground, and we use some every day, and way off into the future sometime, everyone understands there won’t be anymore. But few people think about it beyond that.

Try this, though: The next time you’re having a political discussion with someone, throw “Peak Oil” into the conversation. Just throw it in there and see what happens. You’ll know when to do it. It will be at that moment when you just want to say, “Yeah, but it doesn’t really matter because…” There, that is your spot. Throw it in there: “Peak Oil.” It stops everything. Which is interesting, because the topic is really about imagining stopping everything.

It is one thing to imagine something like that, and quite another to experience it. The disconnect comes because people don’t want to imagine it. It is uncomfortable. In fact, that is one of the things that disappointed me about the article that motivated this post  (http://english.aljazeera.net/indepth/features/2011/07/201172081613634207.html); I wanted more juicy imaginings about particular difficulties that could be foreseen. There is little of that there, but hints of it. So, let’s imagine it now.

Let’s start with setting up our premises.

PREMISES:
1. Supply: Oil reserves are declining, and the extraction of oil is becoming more difficult and more costly. There is a wealth of data that supports this premise, and I can dig that up if you want me to.

2. Demand: Oil demand is generally seen as increasing, although this is not necessarily so. As was stated in the Al Jazeera article, “Meanwhile, world demand for crude oil grew at nearly two per cent each year between 1994 and 2006. In 2007, global demand peaked at 85.6 million bpd, but decreased in 2008 and 2009 by a total of 1.8 per cent, reportedly due to rising fuel costs.” Demand, at some level, will be determined by the costs to supply the oil, and the ability of consumers to afford it. I actually see demand continuing to fall, even as prices rise, or rather, because the prices are rising.

3. Scarcity & Price: It is axiomatic that as these supply and demand factors continue along their inevitable trajectories, the price of oil will rise. The question people often ask is, “How much?” In fact, there is no ceiling. Because they’re not making anymore, and because we will continue to use oil so long as the return exceeds the cost, it is conceivable that one gallon of gasoline in the future could be virtually priceless. You might scoff at that, but let me ask you this: How much would you pay for one gallon of gasoline if you knew it was necessary to save your life and the lives of your children and partner? Would you trade all of your material possessions for a chance at life? If that point seems a little extreme, it is only because we haven’t finished imagining.

4. Applications: So what do we use our oil for? Well, it turns out, nearly everything, in some measure.

Consumer Products: The computer you are reading this on is constructed in large part using synthetic materials produced as various long-chain polymers, which are of course developed most easily from oil. Anything plastic has a high likelihood of having originated as oil. Nylon, polyethylene, polyester. So, to lay out a sketchy, wholly incomplete list of things made with oil: ropes, fertilizers, plastic baggies, cars, computers, dishes, Vaseline, clothes, upholstery, carpet, signs, windows, remote control devices, vinyl fencing, telephones, certain perfumes and cosmetics, and maybe just one or two toys.

Power & Communications: What about the electronic signals that result in a readable media? Both the electricity, and the communications that permit you to read something I wrote from anywhere in the world, are highly dependent on oil. So your cell phone and even landline communications are implicated here, as well. Even beyond the ungodly cost of putting communications satellites into orbit, all of those cell towers, switching stations and equipment runs on … electricity. The United States produces 71.4% of its electricity from fossil fuels, which of course includes coal and natural gas, two commodities that are similarly finite. http://www.nationmaster.com/graph/ene_ele_pro_by_sou_fos_fue-electricity-production-source-fossil-fuel Electricity production depends not only on the fuels used to wind the magnetos, but also the infrastructure itself, the equipment needed to extract the energy from the oil and to transform it into alternating current. And so even if we miraculously develop an abundant alternative energy source, we cannot use it without an enormous investment in infrastructure.

Transportation: Cars. For that matter, consider a Dodge Ram 2500, with a 6.7L Cummins diesel, 4×4 of course. Lots of us have those up in this country, and they’re damned useful. But it runs on oil. Even the cars that are being developed to run on electricity, still depend upon oil, as discussed above. And what happens when gas hits … what? $10 per gallon? Never happen? Before the international releases of strategic oil reserves last month drove down prices, Germans were paying over $8.50 per gallon. In April, some gas stations in the U.S. were charging over $5/gal. But gasoline will become even more dear than that. Try $50 per gallon. When? It may be a few years, perhaps not until 2020, unless we have another Black Swan event crop up. (Those damn Black Swans seem to be multiplying lately.) But other experts are not so sure, and some project that acceleration to occur by 2014 or 2015. And once that price accelerates, it will not be coming back down.

By the end of this decade, be prepared to pay $100 per gallon of gas, if you can get it all. So, what are you doing with that Dodge Ram now? Well, you’re not selling it. No one else wants it either, or they have their own already. A bicycle will be worth more than that truck, not just in real terms, but in monetary terms, as well.

But the question of how you are going to get around is a personal one. Transportation is a huge issue beyond our personal movements. It’s not like we didn’t get around the world before we started using oil to power motors. But we did it with sails, and hooves, and feet. But beyond moving people, we are moving food, tools, materials, energy itself, anything of a tangible nature that needs to be moved from one place to another. And as we know, the cost to transport is always marked into the cost of the product at its destination. So if you want to move grain from Ukraine (which isn’t happening right now due to drought) to Australia, you haul it from the granaries by train to the port, where you load it onto a tanker, which then transports it to its destination. But what is the cost of that transportation if oil is priced at $500/barrel, as opposed to $100/barrel. The cost is prohibitive, and there are no local markets that cannot beat any price the Ukrainians want to offer … even free. But what if there is no local market?

Production:  Transportation doesn’t even scratch the surface.  Well, yes it does.  But there’s more.  That grain produced in Ukraine was grown using petroleum-based fertilizers.  It was planted, tended and harvested using mechanized equipment that runs on oil.  The tractors, trains, trucks and ships themselves were produced by industrial processes that depend on oil.  The mining, transportation and refining of the metals used to produce vehicles and equipment depends on oil.  The fish you see in the supermarkets were either caught by vessels powered by oil, or were farmed using processes that depend on oil.  The beef, pork and chicken you buy at the supermarket and grill in your backyard wouldn’t be there without feeding that livestock with grains and other materials that had to be also grown and transported.  Even water for drinking is cleaned and transported using oil.  Our human waste is cleaned using electricity, meaning that by extrapolation, in the United States, 71.4% of that too relies upon fossil fuels.  Timber is harvested using oil.  Nails and screws and saws and drills and drywall and shingles and siding and stoves and refrigerators and nearly everything involved in constructing a home, commercial building or factory is subsidized by the profligate use of this compact, stable, transportable, and heretofore cheap source of energy.  And get this:  Even the development of alternative energy sources depends on oil.  As an example, ethanol from corn is subject to the same energy constraints as that grain out of Ukraine.  Energy development requires the investment of energy, and right now, the only real game in town is oil.  Your job depends on oil.

5.  Wages:  It is no secret that for the past 40+ years, real wages have declined as measured against inflation (the cost of goods and services).  You have to be careful about what data you review.  For instance, the United States Department of Labor will tell you that real wages have actually increased slightly, but they factor in the cost of benefits such as healthcare, and attribute that as an increase in income for the worker.  In doing so, they throw out the fact that those healthcare costs have themselves increased exponentially.  The bottom line is that while oil climbs in price, our ability to pay for it does not increase.  Moreover, as oil prices increase, the ability of employers to continue to employ people in a productive capacity is reduced.  In other words, as external costs of production (materials, shipping, taxes, regulation, etc.) increase, employers are forced to reduce capital costs in other areas if they wish to continue selling their product.  The easiest place to do that is wages.  They either lay people off and increase the productivity of each individual worker, or they reduce, or at least do not increase, wages.  Also, because governments are subject to the same market forces, and they find their own ability to maintain their operations at current levels reduced, the reaction is rarely to cut back on their own operations.  Instead, they either shift costs to the citizens, reduce services provided, or tax.  (This is a whole other conversation.)  No matter how they go about it, the direct impact is felt by the individual citizens or their employers, further depressing real wages and job creation.

6.  Costs & Returns:  Everything we purchase, make, sell, trade or gift involves a cost-benefit analysis at some level.  Take, for an example, a fishing trip.  If I want to go salmon fishing for the weekend, I need to pay up front for a number of things:  fuel to drive to the river; food (which I would need to have anyway, but which inevitably involves unusual luxury items); state costs (licenses, tags, etc.); and equipment and materials devoted to that endeavor (poles, fishing line, hooks, roe, weights, etc.).  If I am fantastically successful, I will bring home six Chinooks, at a cost of perhaps $5/lb.  More likely, I’ll bring home one or two, with my cost per pound at $15-$20.  Maybe I’ll bring home nothing, which is usually the case for me, which means I risked $300 and realized no tangible return whatsoever.  Now, if I want to eat salmon, that is a different calculation entirely.  I would never run into Fred Meyers and plunk down $300 on a wheel for a chance of getting 0-6 whole salmon.  What’s the difference?  In the former situation, I was buying not the fish, but the time, the experience, the connections with my buddies.  In the latter, I am buying a product.  In fact, I would rarely pay $15/lb. for fish when I can eat just fine on farm-raised tilapia at $2.59/lb., but if I really want to eat salmon, I have lowered my risks, stabilized my costs and defined my returns by heading to the grocery store.  But what if gas prices rise to $10/gallon?  The salmon at the store now costs $40/lb., and a trip to the river becomes prohibitively expensive.  And so I’m definitely staying home and eating tilapia … or burgers.

The point of this example is to demonstrate that people are willing to risk capital so long as the potential returns can be justified.  But as prices rise, the investment rises, even while the potential realized benefit remains the same or declines.  At a certain point, the investment is not sufficiently incentivized to justify it, and the consumer turns away.  It becomes a losing proposition to eat salmon, and so I just don’t.  This is not welcome news to the commercial fishermen, the grocery store, the shipping industry, or the local bait shop.

7.  Location:  Where you are factors substantially into how you will be affected by a critical shortage of what Charles Hughes Smith (www.oftwominds.com) calls the FEW resources — Food, Energy and Water.  As shipping costs increase, the transport of products cannot be sustained.  First, the products become expensive, then prohibitively expensive, and finally there is no rationale for shipping product from point A to point B at all.  If the product cannot be produced locally and shipped economically, it won’t be available at any price.

What this means to me will be different for you.  Here, where I live, we have hydroelectric power and geothermal springs, energy sources that do not depend on petroleum at all.  We also have water, stored in our mountains throughout the winter, and poured into our aquifers, lakes and rivers during the Spring melt.  Sometimes we have more, and sometimes less.  There is substantial forage for livestock and cropland than can be irrigated by gravity-flow diversions.  We are truly blessed here.  Now contrast that with Phoenix, a city of 1.5 million souls.  There is no imaginable way to sustain that population in terms of water alone if its transport is not economically accomplished through cheap oil.  And the same things can be said of nearly every major urban area in the world.  Some places, such as Mexico City or New York, numbering in the several of millions, are wholly dependent on lengthy supply lines for their FEW resources, the very resources necessary to survive.

In simple terms, the longer you have to transport something, the scarcer and more expensive it will be, and with the collapse of affordable oil, that means that many places will no longer have access to sufficient resources at all.

8.  Ramifications:  If supplies are dwindling and becoming more expensive to produce, and demand remains at or near the current levels, then the scarcity and price equation cannot be avoided.  And if everything we make, and most things we do, depend on that particular energy source, then it follows that those products and services will also increase in cost.

As the cost-benefit factor plays into the scarcity-price equation, it becomes increasingly clear that I can afford less and less, and I therefore must make prioritized choices as to where I will apply the capital available to me.  It is up to me to ensure that I maximize my own personal returns on the sparse capital available to me.  I have to do that to survive.  I am not alone, and because of that, my own decisions are echoed and amplified by the millions other people engaging in their own analyses and decision-making.  My personal choice, because it is rational, is repeated, magnified, and applied globallyby millions of others.  And the results are stark.

Eventually, it makes no sense to fish commercially for salmon.  No one is buying it, and it costs a hell of a lot to produce.  So that goes away.  Meanwhile, receipts from fishing licenses and tags fall precipitously, until the Department of Fish and Game is wondering why the hell they are maintaining and operating these expensive fish hatcheries.  Plus, the hydroelectric power that made the hatcheries necessary in the first place have become critical to the supply of non-petroleum based energy.  Fish mitigation efforts are costly, and increase the costs of the hydroelectric energy, as well.  By now, people are more concerned about getting food into their homes, and less about maintaining a fishery they no longer have the ability to enjoy.  And ocean-run Chinook go extinct.  The commercial fishery collapses.  Shipping is reduced as product is no longer shipped in from Seattle.  The stores’ shelves no longer feature salmon.

We can apply this calculus to everything.

When you actually do take the time to consider the implications of peak oil on our present civilization, you can see that the civilization, globally, has been grounded, built and expanded upon this cheap energy source.  Our world cannot be sustained otherwise.  If oil had never entered the equation, or if we had exercised the wisdom to recognize its finiteness, we would not have the population that we do, nor the cities, the infrastructure, nor widely available food, energy and water.  We have built our civilization on this energy source that is going away soon, and when it does, our civilization cannot be sustained as it is.

People will die.  A lot of them.  Billions.  There is no way to cast that fact other than as the greatest tragedy in human history, caused by our instinctual need to exploit any resource until it no longer sustains, and then moving on to the next one.  But there is no “next one” in the wings right now.

My children, and likely I, will live to see the end of personal oil-driven vehicles, of golf courses and subdivisions, of abundant food and energy and water.  We will live to witness the extermination of billions of people through starvation, thirst, disease and war.  We will have the opportunity to start over, and to ensure that our people going forward act in sustainable ways.  As a civilization, it is likely, albeit not guaranteed, that we will retain much of the knowledge we carry into this calamity.  And learn a lot more.  The Earth will appreciate a break from our relentless exploitation.  And we can all learn to live more simply, closer together, and more harmoniously.  We’ll see, I guess.

The Crap People Write

I’m sorry, but if you have a contract to write for a major media source, you are going to open yourself up for criticism if what you produce is complete pap, crap, pulp, and MSM bullshit. So, here is an article I came across on AlterNet, along with the associated commentary, much of which is mine. (This is why I don’t have time to write this blog.) By way of explanation, AlterNet is a progressive media site, tightly tied with the Democratic party. Their leanings are unduly ideological, and I therefore do not frequent the site much. But I get their e-mails, and when a headline piques my interest, I may just jump in, as I did here. Please read the comments, as the article itself is lame.

Here it is: http://www.alternet.org/newsandviews/article/638168/what_to_do_if_social_security_checks_are_stopped?page=entire

New rules put clamp on chatty Fed officials

[Sorry folks, I wasn’t able to link to this article for some reason. I’ll work on that.]

“The Federal Reserve, in a push to control the often wayward communications of its top officials, issued detailed rules on Tuesday dictating what they can and cannot do.”

“The move is part of a broader effort at making the Fed appear less detached from public concerns following criticism during the financial crisis that policymakers were too kind to Wall Street at the expense of Main Street.”

This is complete double-speak. This move isn’t to make the Fed “appear less detached from public concerns.” It is to make the Fed MORE detached from public concerns! This is not about transparency, which is what we need the most right now. It is about obfuscation, pure and simple. Let them speak! Let us decide!

This is bad. That was so ineptly done, that it boggles the imagination. I’m going to have finish this tomorrow.

http://www.reuters.com/article/2011/07/13/us-usa-fed-communications-idUSTRE76B5JX20110713

Musings on Mother Earth and Kindness

I had an interesting interaction yesterday, and it really impacted me at a radical and fundamental level.  As I took a smoke break at the office (yes, I still smoke), I looked over toward the front of the building and spied someone lying in the grass.  The person appeared to be sleeping.  I assumed it was one of the tenants of the building catching a nap, or maybe one of their clients, biding time before an appointment.  An hour or so later, I saw the person was still there, and started watching.  After a few minutes, the person stood, and I could see it was a young male, I would estimate in his early twenties.  He was dressed only in his underwear.  The young man stretched and walked over to a nearby vinyl fence separating the business parking lot from the neighboring property.  He then grabbed the top of the fence, and banged his head on it a few times, pulled the top of the fence to-and-fro, banged his head a couple more times.  He then stood with his belly against the fence, and urinated on it.

My observations quickly led to a reassessment of the napper, and I can’t say it was positive.  His affect appeared agitated, perhaps drug-induced.  He returned to his spot in the grass (right behind my car), and sat down.  At this point, I decided to observe him more closely.  I returned inside the building and went to the front, where I could observe him through a window.  After a very short time, the young man picked up his few belongings — some clothes and a plastic bag containing some apparently light items — and began walking back along the side of the building, toward the side door from where I had originally observed him.  I followed from inside the building.

The young man walked along the east side of the building.  My office is located on the northeastern corner, so I went there and watched as he walked around that corner, and behind the building.  (My building is fenced on three sides.)  I continued following, as he traversed to the west side, where he put his clothes on, shorts and a t-shirt.  He then returned to the east side of the building, where he laid down directly underneath my office window.  My desk and chair are directly in front of this window.  The window has blinds, which were turned downward but not shut.  He lay down on his stomach and cradled his head in his arms.

I was concerned at this time.  I strongly considered calling police to have him removed from the site, as he clearly did not belong there.  I weighed the action in my head as I watched him lie beneath my window.  He could tell he was being watched, as he sat up a couple times and looked around, each time laying back down.  And I contemplated.  I wondered if perhaps he was homeless — a very distinct possibility in these times.  Nonetheless, it was nearing the end of the workday, and I was not desirous of him continuing to be right outside my window as I left my office.  Should I call police?  Should I ignore him?

And then, as I watched his feet dawdle, in their flip-flops, a thought occurred to me.  What if that was my son?  What if one of my sons were to find himself in that very place, with someone like me secretly staring from behind blinds?  I wondered what had brought him there, and whether he was hungry.  Tears welled up into my eyes, and I instantly knew my course of action.  I had an apple in the refrigerator from a lunch I had not quite finished a week or so past.  I had a water bottle I had earlier emptied that day.  I went to the kitchen and retrieved the apple, and filled the bottle with tap water, and I went outside.

I exited from a door near where he was laying, and he instantly stood up.  He positioned himself in the middle of the side lawn as I approached.  And I asked him, “Are you hungry?”  He looked at me for a second and said, “What?”  I repeated, “Are you hungry?” and added, “Do you want this apple?”  His breath went out of him, and it was clear he had been holding it.  He smiled, and took the apple from me.  I then handed him the water.

The young man seemed to feel a need to explain himself, and began a fragmented story about police and the “psych ward.”  But that wasn’t why I was there any longer.  I looked at him and said, “That is all I have.  This apple and water.”  He looked at me and said, “Wow.  I didn’t expect that,” and his eyes watered up.  I nodded to him and turned to go back inside.  He called to me, “Thank you,” and I told him he was welcome.  I never saw him again after that.

Speaking only to what I experienced, because I cannot presume to speak for him, I had turned my fear into compassion, my protectiveness into caring, my anxiety to kindness, and that apple and water did far more for me yesterday than it would have if I had ingested them.

I came home that night, and watched the waxing moon, nearly full, floating among stars and flirting with the clouds, at peace, and feeling whole.

Namaste

Stone Lodge

HAVE YOU EVER STUCK YOUR FINGER DOWN YOUR THROAT?

Have you ever felt so incredibly ill, that you finally just stick your finger down your throat? Our global economy is beyond that point.

Today, ADP (a private business and payroll services firm) released a highly anticipated National Employment Report. It was highly anticipated because the markets expected to see signs of substantial job growth for the month of June. The markets did not get what they had hoped for. Job growth for the month of June came in at a net level of 18,000 nationally. That is 57,000 private sector jobs, offset by the loss of 39,000 government jobs nationally.

To understand what that really means, you need to know a couple more facts. First, new job entrants average between 125,000 and 150,000 monthly. Those are kids and others (like moms returning to the job market from taking care of the kiddos) who are able and willing to work, and want jobs. So that 125,000 (say) people are competing for 18,000 new jobs. It doesn’t quite stretch. But here is the second thing you need to know: That job-creation number has nothing to do with private sector job losses. In June, 449,000 people lost their jobs. They don’t say much about that number in the MSM (Mainstream Media). But I will, and I will include that number because it gives us a better picture as to where we really are. Which is, there were 556,000 more people looking for work in June 2011 who can’t find work than there was in May 2011.

I saw one “analyst” for Reuters who suggested this might be a “whiff of recession.” That “analyst” was interviewing a “currency strategist” for his article. Ludicrous. But what really piqued my interest was the statement issued by House Majority Leader John Boehner, after release of the report. I found that statement through a piece written by Reuters blogger Felix Salmon, who wrote:

It’s incredibly difficult to work out what is the most depressing part of today’s truly gruesome jobs report. The shrinking number of people in the labor force? The rise in U-6, broad underemployment, to 16.2%? The sharp spike in the newly unemployed? The downward revisions to April and May? The downtick in total hours worked? Maybe it’s the way that people leaving government jobs, for whatever reason, are finding it impossible to find new jobs in the private sector.

For me, it’s none of these things — it’s not, in fact, anything inside the report at all. Instead, it’s the reaction to the report from John Boehner:

“The American people are still asking the question: where are the jobs? Today’s report is more evidence that the misguided ‘stimulus’ spending binge, excessive regulations, and an overwhelming national debt continue to hold back private-sector job creation in our country. Legislation that raises taxes on small business job creators, fails to cut spending by a larger amount than a debt limit hike, or fails to restrain future spending will only make things worse – and won’t pass the House. Republicans are focused on jobs, and are ready to stop Washington from spending money it doesn’t have and make serious changes to the way we spend taxpayer dollars. We hope our Democratic counterparts will join us and seize this opportunity to do something big for our economy and our future, and help get Americans back to work.”

(For the rest of Salmon’s piece and the commentary, click this link: http://blogs.reuters.com/felix-salmon/2011/07/08/does-john-boehner-know-what-paychecks-are-made-of/)

Boehner isn’t ignorant, he is owned. As is every other legislative representative in Washington and in the states, the POTUS, and the federal judiciary. Their power and their position depends upon balancing between two competing constituencies: the neo-liberal capitalist elites (read “Keynsians”), and the dependent segment of the population that depends on government largesse. Managing the latter is fairly simple, or has been historically. It is getting more difficult. The former constituency is not managed, but rather does the managing. It is those elites from whom Boehner and Obama get their marching orders.

The elites have manipulated the government to their benefit since they were re-set by the First Great Depression. The regulations, the judicial holdings, the legislation, all are constructed so as to create an economy in which the “wealth” of the nation flows one way; into the pockets of those elites. Sure, there is a kickback in the form of entitlements to keep the dependents from raising a ruckus, but that is just a cost of doing business.

The middle class — the productive segment of the population — is where the real “wealth” comes from. The problem we face now stems from the fact that the elites have over-exploited that source of “wealth.” The reason “wealth” is highlighted here is because it is distinct from “production.” See, ideally, no economy should “spend” more than is produced — ever. But when you conceptualize real production as the abstraction “wealth,” then you can justify using various economic tricks and subterfuges to “create” wealth that is divorced from a true underpinning in production and real assets.

Thus, they could take 100 risky mortgages and package them into a securitized debt instrument. (Risky mortgages are more “profitable” because they carry a higher interest rate, and the risk of default gets thrown out.) But they’re not stupid, so the new instrument is insured against default (a credit default swap). JP Morgan thus pays AIG a premium, and AIG, based upon its reputation alone (and no adequate reserves) promises to reimburse the insured party if the asset goes south (which they did in ’08). Now they have an insured instrument that Moody’s will rate AAA, and it can be resold (and resold) at a premium to any number of other market players.

Because this scheme is so profitable, it becomes desirable to enable large numbers of the populace to borrow easily, and so the elites worked to ensure easy credit policies and lax regulation at the point of attack, through their control of government. That easy money (actually debt) created a huge (and unsupported) demand for housing, and we all know what happens when demand outstrips supply: prices rise. Thus, the real collateral (housing) was inflated across the board, which served only to further fuel this machine.

The problem now is that this scheme was never sustainable, and in its collapse, we find vast quantities of illusory “wealth” floating around in the system, and no one wants to be under roof when it collapses. The Fed’s (which is really the club for the really really wealthy elites) response is to create additional liquidity in the markets. (There is an entire discussion here on how that liquidity has been re-directed into commodities; another day.) TARP I and II, and QE I and II, were all about ensuring that there was coverage for the losses that AIG, et al, could never actually insure. Those funds went straight into the capital accounts of the banks and hedge funds that had been betting on these bogus instruments.

And who pays for that coverage? We do. It is our “money,” fresh off the presses. Or rather, our “national debt.” And none of the “wealth” thus created went to build an automobile, television, road or tractor.

So now we have a colossal debt, busted consumers, and no jobs. And the propaganda in the MSM and the gaming in Washington that supports the system will continue until the merry-go-round stops, because they really have no other options, unless JP Morgan wants to give back all of the wealth it helped create. Yah, right.  Boehner is just doing what he’s told.

We won’t have to stick our finger down our collective throat. Better run to the bathroom right now. This is all coming down. Or back up, however you want to look at it.

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