Published: Sunday 30 December 2012
As Washington tries to hash out a deal, we've taken a step back to break down the numbers behind our deficit.

President Obama will meet with congressional leaders today in another attempt to avert the fiscal cliff — the automatic tax increases and spending cuts set to take effect Jan. 1 unless Congress can strike a deal. The cuts and tax hikes, which total more than $500 billion, are so large and so sudden that many economists fear they would plunge the country back into recession.

As Washington tries to hash out a deal, we've taken a step back to break down the numbers behind our deficit — how it grew so big, why it is actually shrinking and whether a deal can bring it under control.

Published: Tuesday 11 December 2012
One can easily get the impression that the US Senate lets no good deed (or idea) go unpunished.


December 4, 2012.  Mark this date on your calendar.  The somber day the U.S. Senate voted down the Convention on Rights of Persons with Disabilities, a treaty designed to extend the same rights disabled Americans already have to the rest of the world.  The treaty fell five votes short of the two-thirds majority required for ratification because the extremists who now control the House Republican caucus hate the United Nations.

The headline in the Yakima Herald said it all: “Senate vote a profile in cowardice”.   If that's how it looks to folks in Yakima, imagine how it looks to people in Yakutsk (that's right, Putin's Russia ratified the treaty in September).  Or to the 114 nations that have ratified this treaty, including the United Kingdom, France, Germany, and the European Union.

Who cares how it looks to the outside world?  That's frequently the first question the anti-UN  globophobics ask of "bleeding-heart liberals" dumb enough to believe it matters what the rest of the world think of us.  The fact that the UN is made in America (rare these days), that it's located in New York City (within spitting distance of Wall Street), and that the US has a veto in the Security Council (one of 5 Permanent Members thusly privileged) is irrelevant.

With an original roster of 51 member-states, the UN today is a place where ambassadors representing 192 nations of the world meet and talk.  Irrelevant.

It's specialized agencies do all kinds of good in the world in quiet ways (think ...

Published: Saturday 1 December 2012
“If there is disagreement among scientists, based not on opinion but on hard evidence, it will be found in the peer-reviewed literature.”


Polls show that many members of the public believe that scientists substantially disagree about human-caused global warming. The gold standard of science is the peer-reviewed literature. If there is disagreement among scientists, based not on opinion but on hard evidence, it will be found in the peer-reviewed literature.

I searched the Web of Science for peer-reviewed scientific articles published between 1 January 1991 and 9 November 2012 that have the keyword phrases "global warming" or "global climate change." The search produced 13,950 articles. See methodology.

I read whatever combination of titles, abstracts, and entire articles was necessary to identify articles that "reject" human-caused global warming. To be classified as rejecting, an article had to clearly and explicitly state that the theory of global warming is false or, as happened in a few cases, that some other process better explains the observed warming. Articles that merely claimed to have found some discrepancy, some minor flaw, some reason for doubt, I did not classify as rejecting global warming. Articles about methods, paleoclimatology, mitigation, adaptation, and effects at least implicitly accept human-caused global warming and were usually obvious from the title alone. John Cook and Dana Nuccitelli also reviewed and assigned some of these articles; John provided invaluable technical expertise.

This work follows that of Oreskes (Science, 2005) who searched for articles published between 1993 and 2003 with the keyword phrase “global climate change.” She found 928, read the abstracts of each and classified them. ...

Published: Tuesday 20 November 2012
The United States is a leader in the technological development of killer robots, while several other countries, including China, Germany, Israel, South Korea, Russia, and the United Kingdom have also been involved.

The predator drone – an unmanned aerial vehicle (UAV) – is one of the relatively new lethal weapons used by the United States for targeted killings of suspected terrorists, particularly in Pakistan, Afghanistan, Yemen and Somalia.

And since it is unmanned and remotely controlled, the drone does not risk the lives of U.S. soldiers.

But the weapon has increasingly come under fire because of the collateral damage in the spillover killings of innocent civilians, including women and children.

On Monday, a report jointly published by Human Rights Watch (HRW) and Harvard Law School’s International Human Rights Clinic (IHRC) has warned of an even more deadly weapon: killer robots.

Described as fully autonomous, these weapons will have the capability to select and fire on targets without human intervention in future wars.


Published: Tuesday 13 November 2012
“Austerity opponents say the strike isn’t intended to grind down Europe’s already weakened economy, but to send a clear message to governments and the Troika that austerity cuts aren’t working to solve the debt crisis, but instead are worsening the problem.”

Austerity has spawned general strikes in individual countries across the troubled European Union. But this week may see something to add to the union’s tensions: a coordinated, multi-national mega-strike. Organized labor plans a general strike against the E.U.’s austerity policies, borderless and spanning the south of the continent. With more than 25 million people out of work, Europe’s biggest unions have vowed to lead marches and demonstrations on Nov. 14 that unite opposition parties, activist movements like Spain’s M15 and a growing sea of unemployed to challenge their national governments, banking leaders, the IMF and EU policymakers to abandon austerity cuts ahead of a high-stakes budgetmeeting in Brussels later this month.

What makes Wednesday’s strike even more threatening to Europe’s managerial elite is the strong support it is receiving from traditional labor groups that rarely send their members into the streets—foremost, among them, the European Trade Union Confederation, representing 85 labor organizations from 36 countries, and totaling some 60 million members. “We have never seen an international strike with unions across borders fighting for the same thing—it’s not just Spain, not just Portugal, it’s many countries demanding that we change our structure,” says Alberto Garzón, a Spanish congressman with the United Left party which holds 7% of seats in the Spanish Congress. “It’s important to understand this is a new form of protest.”

The strike is expected to cause near or total shutdowns of the ...

Published: Tuesday 13 November 2012
The corporate state, faced with rebellion from within and without, does not know how to define or control this rising power, from the Arab Spring to the street protests in Greece and Spain to the Occupy movement.


The presidential election exposed the liberal class as a corpse. It fights for nothing. It stands for nothing. It is a useless appendage to the corporate state. It exists not to make possible incremental or piecemeal reform, as it originally did in a functional capitalist democracy; instead it has devolved into an instrument of personal vanity, burnishing the hollow morality of its adherents. Liberals, by voting for Barack Obama, betrayed the core values they use to define themselves—the rule of law, the safeguarding of civil liberties, the protection of unions, the preservation of social welfare programs, environmental accords, financial regulation, a defiance of unjust war and torture, and the abolition of drone wars. The liberal class clung desperately during the long nightmare of this political campaign to one or two issues, such as protecting a woman’s right to choose and gender equality, to justify its complicity in a monstrous evil. This moral fragmentation—using an isolated act of justice to define one’s self while ignoring the vast corporate assault on the nation and the ecosystem along with the pre-emptive violence of the imperial state—is moral and political capitulation. It fails to confront the evil we have become. 

“The American Dream has run out of gas,” wrote the novelist J.G. Ballard. “The car has stopped. It no longer supplies the world with its images, its dreams, its fantasies. No more. It’s over. It supplies the world with its nightmares now. …”

Liberals have assured us that after the election they will build a movement to ...

Published: Thursday 18 October 2012
Published: Friday 12 October 2012
“The selection surprised many as it comes at a time when much of Europe is facing an economic crisis that threatens the EU’s future. Just this past week, thousands of Greeks protested in Athens against a visit by German Chancellor Angela Merkel who has pushed Greece, Spain and Ireland to enact deep austerity measures.”


The European Union was awarded the Nobel Peace Prize earlier today for its historic role in uniting the continent. Committee chair Thorbjoern Jagland praised the EU for transforming Europe "from a continent of wars to a continent of peace." The selection surprised many as it comes at a time when much of Europe is facing an economic crisis that threatens the EU’s future. Just this past week, thousands of Greeks protested in Athens against a visit by German Chancellor Angela Merkel who has pushed Greece, Spain and Ireland to enact deep austerity measures. For more, we go to London to speak with Tariq Ali, political commentator, historian, activist and editor of the New Left Review. "My initial response was to burst out laughing. Because this Nobel Peace Prize committee, basically run by clapped out former politicians in Norway, never fails to amuse and disappoint,” Ali says. “To give the prize to the European community, at a time, effectively, when economically, it is promoting unemployment, creating real class divides in virtually every country in Europe, where it has led to enormous violence on the streets of Greece, because of the policies being pushed by the EU ... it is a complete and utter joke."

Published: Friday 28 September 2012
“The citizenry isn’t being asked to weigh in on this projected re-run of nuclear politics and all that it implies.”


Nuclear weapons have been U.S. society’s plumb line for seven decades. Even when other issues capture our attention and the atomic threat fades in and out of public consciousness, nuclear arms and their sprawling reach — physical, political, cultural, economic, psychological — endure. They are always somewhere in the picture, even if we happen to be looking elsewhere.

It’s this constant but unseen presence that makes a story like one theWashington Post ran recently so jolting, if also so utterly predictable. “The B61 bomb: A case study in cost and needs” sets out the Pentagon’s plans to refurbish the 500 or so B61s in its arsenal. But more importantly it goes on to detail how the U.S. government plans to overhaul the nation’s vast nuclear weapons complex over the next decade, with a minimum price tag of $352 billion. If history is any gauge, it is likely to cost much more.

This news, so far as I can tell, hasn’t nudged its way into the speeches of the presidential candidates. The citizenry isn’t being asked to weigh in on this projected re-run of nuclear politics and all that it implies. While this would be a perfect time to have a reasoned and spirited debate about these plans, this hasn’t been scheduled. Assessing what being a nuclear state for nearly seventy years has meant, mulling on its consequences for us now, and envisioning what it might mean going forward — none of this is in the works. Instead we are put on notice, fleetingly, by the Washington Post.

Democracy is purportedly on display on many fronts, but rarely on the nuclear one. Since the bombing of Hiroshima in 1945, nuclearism has shaped our culture and society in ...

Published: Thursday 13 September 2012
What America Knows How to Do Best


It’s pop-quiz time when it comes to the American way of war: three questions, torn from the latest news, just for you.  Here’s the first of them, and good luck!

Two weeks ago, 200 U.S. Marines began armed operations in…?:

a) Afghanistan

b) Pakistan

c) Iran

d) Somalia

e) Yemen

f) Central Africa


Published: Wednesday 12 September 2012
Published: Tuesday 21 August 2012
The union people found that “know-it-all” middle class people can actually listen, and the activists found that “rigid hierarchical” working class people sometimes work with a different set of responsibilities.


The hardest job I ever had in a half century of social change work was coordinating a multi-class coalition. It didn’t simplify things that it was also cross-racial. Nor that it was composed of people who had substantially different politics.

I led the Pennsylvania Jobs With Peace Campaign for seven years, in the 1980s, when Ronald Reagan’s White House was trying its best to undo the progress made in the 1960s and ’70s. Our chapter was part of a national campaign pressing to take money out of the military and use it for human needs. Our local chapter also pushed for decentralized people’s planning for economic conversion of military industries.

An advantage I had was that our campaign included a collective of the Movement for a New Society (MNS), a radical network that was already figuring out how social class influences the way activists do and don’t work together for change.

Sociologist Betsy Leondar-Wright has listed major social movements in the U.S. and identified their class composition. (See her website,, and her book Class Matters: Cross-Class Alliance Building for Middle-Class Activists.) She asked how successful they were in achieving their goals. Betsy found that the movements most likely to succeed were those that crossed class lines. The ones who achieved less were single-class, like blue collar trade union campaigns, or middle ...

Published: Wednesday 1 August 2012
Published: Friday 27 July 2012
“One of the causes for the optimism stems from the results [announced late last year] that found that when infected patients begin taking antiretroviral medicines when their immune systems were relatively healthy rather than after the disease has advanced, they are 96 percent less likely to transmit the virus.”

NAM: It appears as though for the first time scientists are focusing their attention on finding a cure for HIV, a cure that would relieve patients from having to take the expensive antiretroviral therapy all their lives to keep the virus at bay. Is there more optimism at this conference than there has been at previous international meets?


Horberg: Yes, we are reinvigorated now, especially because we have a road map now of how to make it happen. There’s more energy now.


One of the causes for the optimism stems from the results [announced late last year] that found that when infected patients begin taking antiretroviral medicines when their immune systems were relatively healthy rather than after the disease has advanced, they are 96 percent less likely to transmit the virus. Researchers concluded that antiretroviral drugs can therefore not only treat HIV but also prevent its transmission.


NAM: The story of Timothy Brown, known to the medical world as the “Berlin Patient,” has given scientists a reason to be even more optimistic. [In treating him for his leukemia with two bone marrow transplants in 2007, doctors in Germany unintentionally also cured him of HIV by replacing his HIV-susceptible immune system with one that could ward off the disease. He has been HIV-free since.]


Horberg: A bone marrow transplant worked for Brown, but it’s not for all because it carries a high risk of death and toxicity. More importantly, it was an event that occurred in one person only and that's not enough of a scientific experience to be a recommended therapy.


NAM: At Kaiser Permanente you have a vibrant HIV-AIDS treatment program that reportedly has had good clinical outcomes. You say you have been able to successfully reduce ...

Published: Friday 20 July 2012
“I expected that many men of that younger generation would also have strong reactions, given how many of them are trying to figure out how to be with their children, support their wives’ careers, and pursue their own plans.”


When I wrote the cover article of the July/August issue of The Atlantic, entitled “Why Women Still Can’t Have It All,” I expected a hostile reaction from many American career women of my generation and older, and positive reactions from women aged roughly 25-35. I expected that many men of that younger generation would also have strong reactions, given how many of them are trying to figure out how to be with their children, support their wives’ careers, and pursue their own plans.


I also expected to hear from business representatives about whether my proposed solutions – greater workplace flexibility, ending the culture of face-time and “time machismo,” and allowing parents who have been out of the workforce or working part-time to compete equally for top jobs once they re-enter – were feasible or utopian.


What I did not expect was the speed and scale of the reaction – almost a million readers within a week and far too many written responses and TV, radio, and blog debates for me to follow – and its global scope. I have conducted interviews with journalists in Britain, Germany, Norway, India, Australia, Japan, the Netherlands, and Brazil; and articles about the piece have been published in France, Ireland, Italy, Bolivia, Jamaica, Vietnam, Israel, Lebanon, Canada, and many other countries.


Reactions differ across countries, of course. Indeed, in many ways, the article is a litmus test of where individual countries are in their own evolution toward full equality for men and women. India and Britain, for example, have had strong women prime ministers in Indira Gandhi and Margaret Thatcher, but now must grapple with the ...

Published: Thursday 19 July 2012
“Without a government that’s focused on more and better jobs, we’re left with global corporations that don’t give a damn.”


President Obama is slamming Mitt Romney for heading companies that were “pioneers in outsourcing U.S. jobs,” while Romney is accusing Obama of being “the real outsourcer-in-chief.”

These are the dog days of summer and the silly season of presidential campaigns. But can we get real, please?

The American economy has moved way beyond outsourcing abroad or even “in-sourcing.” Most big companies headquartered in America don’t send jobs overseas and don’t bring jobs here from abroad.

That’s because most are no longer really “American” companies. They’ve become global networks that design, make, buy, and sell things wherever around the world it’s most profitable for them to do so.

As an Apple executive told ...

Published: Wednesday 18 July 2012
“Developing countries, once they enter rapid-growth mode, generate growth from capital deepening via investment, in a sense making up for past underinvestment.”

The global economy is experiencing a major growth challenge. Many advanced countries are attempting to revive sustainable growth in the face of a decelerating global economy. But the challenges across countries are not the same. In particular, the tradable and non-tradable parts of a range of economies differ in important ways.


In the non-tradable sector (60-70% of the economy in advanced countries), the main growth inhibitors are weak demand, as in the United States following the financial crisis, and structural and competitive impediments to productivity, as in Japan. In the tradable sector, growth depends on a country’s productivity relative to incomes and competitiveness. At the global level, there can also be a shortage of aggregate demand on the tradable side.

Follow Project Syndicate on Facebook or Twitter. For more from Michael Spence click here.

The Nobel laureate economist Robert Solow has shown that growth comes from three sources: the working population, capital investment, and technological progress. A growing young population helps to maintain fiscal balance and ensure intergenerational equity, but it does not by itself increase incomes. On the other hand, economic growth below the sum of growth in the working population and the labor-saving part of technological change fuels unemployment.


Developing countries, once they enter rapid-growth mode, generate growth from capital deepening via investment, in a sense making up for past underinvestment. And it is possible for advanced countries to fall behind by under-investing, particularly in the public sector, relying instead on less ...

Published: Monday 16 July 2012
The growing number of patients arriving at Ramstein from Africa pulls back a curtain on a significant transformation in twenty-first-century U.S. military strategy.

The first thing I saw last month when I walked into the belly of the dark grey C-17 Air Force cargo plane was a void -- something missing. A missing left arm, to be exact, severed at the shoulder, temporarily patched and held together.  Thick, pale flesh, flecked with bright red at the edges. It looked like meat sliced open. The face and what remained of the rest of the man were obscured by blankets, an American flag quilt, and a jumble of tubes and tape, wires, drip bags, and medical monitors.

That man and two other critically wounded soldiers -- one with two stumps where legs had been, the other missing a leg below the thigh -- were intubated, unconscious, and lying on stretchers hooked to the walls of the plane that had just landed at Ramstein Air Base in Germany. A tattoo on the soldier’s remaining arm read, “DEATH BEFORE DISHONOR.”

I asked a member of the Air Force medical team about the casualties they see like these. Many, as with this flight, were coming from Afghanistan, he told me. “A lot from the Horn of Africa,” he added. “You don’t really hear about that in the media.”

“Where in Africa?” I asked.  He said he didn’t know exactly, but generally from the Horn, often with critical injuries. “A lot out of Djibouti,” he added, referring to Camp Lemonnier, the main U.S. military base in Africa, but from “elsewhere” in the region, too.

Since the “Black Hawk Down” deaths in Somalia almost 20 years ago, we’ve heard little, if anything, about American military casualties in Africa (other than a strange report last week about three special operations commandos killed, along with three women identified by U.S. military sources as “Moroccan prostitutes,” in a mysterious

Published: Thursday 28 June 2012
“In an era of globalization, there are no innocent bystanders.”

In September 1998, during the depths of the Asian financial crisis, Alan Greenspan, the United States Federal Reserve’s chairman at the time, had a simple message: the US is not an oasis of prosperity in an otherwise struggling world. Greenspan’s point is even closer to the mark today than it was back then.

Yes, the US economy has been on a weak recovery trajectory over the past three years. But at least it’s a recovery, claim many – and therefore a source of ongoing resilience in an otherwise struggling developed world. Unlike the Great Recession of 2008-2009, today there is widespread hope that America has the capacity to stay the course and provide a backstop for the rest of the world in the midst of the euro crisis.

Think again. Since the first quarter of 2009, when the US economy was bottoming out after its worst postwar recession, exports have accounted for fully 41% of the subsequent rebound. That’s right: with the American consumer on ice in the aftermath of the biggest consumption binge in history, the US economy has drawn its sustenance disproportionately from foreign markets. With those markets now in trouble, the US could be quick to follow.

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Published: Monday 25 June 2012
Even if a fatal calamity can be avoided, the division between creditor and debtor countries will be reinforced, and the “periphery” countries will have no chance to regain competitiveness, because the playing field is tilted against them.


At their meeting in Rome last Thursday, the leaders of the eurozone’s four largest economies agreed on steps towards a banking union and a modest stimulus package to complement the European Union’s new “fiscal compact.” Those steps are not enough. German Chancellor Angela Merkel resisted all proposals to provide relief to Spain and Italy from the excessive risk premiums that both countries are now confronting. As a result, the EU’s upcoming summit could turn into a fiasco, which may well prove lethal, because it would leave the rest of the eurozone without a strong enough financial firewall to protect it from the possibility of a Greek exit.


Even if a fatal calamity can be avoided, the division between creditor and debtor countries will be reinforced, and the “periphery” countries will have no chance to regain competitiveness, because the playing field is tilted against them. This may serve Germany’s narrow self-interest, but it will create a very different Europe from the open society that fired people’s imagination and propelled European integration for decades. It will make Germany the center of an empire and permanently subordinate the “periphery.” That is not what Merkel or the overwhelming majority of Germans stand for.

Follow Project Syndicate on Facebook or Twitter. For more from George Soros, click here.

Merkel argues that it is against the rules to use the European Central Bank to solve eurozone countries’ fiscal problems – and she is right. ECB President Mario Draghi has said much the same. Indeed, the upcoming ...

Published: Wednesday 13 June 2012
“A what if scenario if the problems in Europe go from bad to worse.”

Consider the following scenario. After a victory by the left-wing Syriza party, Greece’s new government announces that it wants to renegotiate the terms of its agreement with the International Monetary Fund and the European Union. German Chancellor Angela Merkel sticks to her guns and says that Greece must abide by the existing conditions.

Fearing that a financial collapse is imminent, Greek depositors rush for the exit. This time, the European Central Bank refuses to come to the rescue and Greek banks are starved of cash. The Greek government institutes capital controls and is ultimately forced to issue drachmas in order to supply domestic liquidity.

With Greece out of the eurozone, all eyes turn to Spain. Germany and others are at first adamant that they will do whatever it takes to prevent a similar bank run there. The Spanish government announces additional fiscal cuts and structural reforms. Bolstered by funds from the European Stability Mechanism, Spain remains financially afloat for several months.

"Follow Project Syndicate on Facebook or Twitter. For more from Dani Rodrikclick here."

But the Spanish economy continues to deteriorate and unemployment heads towards 30%.  Violent protests against Prime Minister Mariano Rajoy’s austerity measures lead him to call for a referendum. His government fails to get the necessary support from voters and resigns, throwing the country into full-blown political chaos. Merkel cuts off further support for Spain, saying that hard-working ...

Published: Wednesday 13 June 2012
“Suppose that we have two economies at the same level of per capita income, both growing at the rate of 2.0 percent a year. Let’s call them Germany and the United States.”

Okay folks, today we are going to learn why the national debt tells us nothing about the burdens or benefits that we are bequeathing to future generations. This will require a few minutes of clear thinking, so for the moment put out of your head whatever nonsense you just heard from a politician or economic commentator about the debt or deficit.

Suppose that we have two economies at the same level of per capita income, both growing at the rate of 2.0 percent a year. Let’s call them Germany and the United States. For simplicity we will say that both have zero growth in the labor force so that the growth is all due to productivity growth, meaning that each worker is producing 2.0 percent more for every hour that she works.

After 10 years, both economies will be roughly 20 percent richer. Now suppose that Germany reaches 2022 with zero public debt. It managed to run surpluses and still maintain healthy growth. By contrast, the United States had to run budget deficits to keep its economy moving. By 2022 its ratio of debt to GDP is 200 percent. That’s not quite up there with Japan, but substantially larger than anything the United States will see anytime soon under almost any circumstances.

The next question is which country is richer? If you answered Germany, then you get an op-ed column in the Washington Post and an “F” in economics. You were just told that the countries started with economies of the same size and that they grew at the same rate, how could Germany be richer?

If your inner deficit hawk is screaming that the people in the United States will have to pay interest on this massive debt, whereas the people in Germany will have no comparable burden, then remember the interest on the debt is also paid out to people in the United States. This is a distributional question, not a question about the wealth of the country as a whole.

It’s true that we can have foreign ownership of ...

Published: Friday 8 June 2012
“Last year, in response to the disaster at the Fukushima Daiichi Nuclear Power Plant, Chancellor Angela Merkel announced a plan to close down all 17 of Germany’s nuclear reactors and replace them with renewable energy, mostly solar and wind power.”


Germany, the world’s most aggressive adopter of renewable energy, is taking a bold leap toward a future free from nuclear energy. In March, the German government announced a program to invest 200 billion euros, or approximately $270 billion, in renewables. That’s 8 percent of the country’s GDP, according to the DIW Economic Institute in Berlin.

Last year, in response to the disaster at the Fukushima Daiichi Nuclear Power Plant, Chancellor Angela Merkel announced a plan to close down all 17 of Germany’s nuclear reactors and replace them with renewable energy, mostly solar and wind power. 

Germany has already closed eight nuclear reactors, and the rest will be shut down by 2022. For now, natural gas is filling the void left by nuclear power, which formerly produced 20 percent of the country’s electricity. Under Merkel’s plan, 80 percent of Germany’s energy will come from renewables by 2050, according to the German Advisory Council on the Environment. Studies by the council show that 100 percent renewable power is a realistic goal for Germany. 

In contrast, the United States has been much less ambitious. The president’s “New Energy for America” plan aims to supply the country with 25 percent renewable energy by 2025.

Eighty percent of German residents want to see their country abandon nuclear power, but some Germans have also opposed new energy projects in their backyards. The website for “Wind Power Opponents,”, lists more than 70 protest campaigns, most of which are regional, grassroots groups organized to stop specific projects.

Germany’s renewables plan will be expensive, but so was the Fukushima meltdown—it did $50 billion in damage to Japan’s economy by some estimates. Dealing with the effects of climate change won’t be cheap either. Even German nuclear power companies are investing in the ...

Published: Friday 1 June 2012
“Even if these measures were to reduce the cumulative public debt, a recession would increase the debt as a proportion of gross domestic product – making a bad situation worse.”

What if Europe and the US converged on a set of economic policies that brought out the worst in both – European fiscal austerity combined with a declining share of total income going to workers? Given political realities on both sides of the Atlantic, it is entirely possible.

So far, the US has avoided the kind of budget cuts that have pushed much of Europe into recession. Growth on this side of the pond is expected to be around 2.4 per cent this year. And jobs are recovering, albeit painfully slowly.

But a tough bout of fiscal austerity could be coming in six months. The non-partisan Congressional Budget Office warned last week that if the Bush tax cuts expire on schedule at the start of 2013, just as $100bn of budget cuts automatically take effect under the deal to raise the debt ceiling that Democrats and Republicans agreed to last August, the US will fall into recession in the first half of next year.

Even if these measures were to reduce the cumulative public debt, a recession would increase the debt as a proportion of gross domestic product – making a bad situation worse. That is the austerity trap much of Europe now finds itself in.

Meanwhile, real wages in the US continue to fall. A new “World Outlook” released by the International Monetary Fund last Friday showed that in the three years since the depths of the downturn in 2009, total national income has rebounded in most of Europe and in the US. But the share of national income going to workers has fallen sharply in the US, while rising in Europe as a whole.

The trend is even more striking measured from the start of the recession. It used to be that when a downturn began, profits fell faster than workers’ income because companies were reluctant to lay off employees and couldn’t easily cut wages given union contracts or the threat of unionization.

That is still the case in Europe, courtesy of stronger unions and labor-market ...

Published: Sunday 27 May 2012
“The United States spends more on our military than do China, Russia, Britain, France, Japan, and Germany put together.”

We can best honor those who have given their lives for this nation in combat by making sure our military might is proportional to what America needs.

The United States spends more on our military than do China, Russia, Britain, France, Japan, and Germany put together. 

With the withdrawal of troops from Afghanistan, the cost of fighting wars is projected to drop – but the “base” defense budget (the annual cost of paying troops and buying planes, ships, and tanks – not including the costs of actually fighting wars) is scheduled to rise. The base budget is already about 25 percent higher than it was a decade ago, adjusted for inflation. 

One big reason: It’s almost impossible to terminate large defense contracts. Defense contractors have cultivated sponsors on Capitol Hill and located their plants and facilities in politically important congressional districts. Lockheed Martin, Raytheon, and others have made spending on national defense into America’s biggest jobs program. 

So we keep spending billions on Cold War weapons systems like nuclear attack submarines, aircraft carriers, and manned combat fighters that pump up the bottom lines of defense contractors but have nothing to do with 21st-century combat. 

For example, the Pentagon says it wants to buy fewer F-35 joint strike fighter planes than had been planned – the single-engine fighter has been plagued by cost overruns and technical glitches – but the contractors and their friends on Capitol Hill promise a fight. 

The absence of a budget deal on Capitol Hill is supposed to trigger an automatic across-the-board ten-year cut in the defense budget of nearly $500 billion, starting January.


But Republicans have vowed to restore the cuts. The House Republican budget cuts everything else — yet brings defense spending back up. Mitt ...

Published: Thursday 24 May 2012
We can’t do much to stop the massive too-big-to-fail banks, they’ve got the power, especially at the federal level. But we can quietly set up an alternative model, and that’s what is happening on various local fronts.


According to both the Mayan and Hindu calendars, 2012 (or something very close) marks the transition from an age of darkness, violence and greed to one of enlightenment, justice, and peace.  It’s hard to see that change just yet in the events relayed in the major media, but a shift does seem to be happening behind the scenes; and this is particularly true in the once-boring world of banking.

In the dark age of Kali Yuga, money rules; and it is through banks that the moneyed interests have gotten their power.  Banking in an age of greed is fraught with usury, fraud, and gaming the system for private ends.  But there is another way to do banking, the neighborly approach of George Bailey in the classic movie “It’s a Wonderful Life.”  Rather than feeding off the community, banking can feed the community and local economy.

Today the massive too-big-to-fail banks are hardly doing George Bailey-style loans at all.  They are not interested in community lending.  They are doing their own proprietary trading—trading for their own accounts—which generally means speculating against local interests.  They engage in high-frequency program trading that creams profits off the top of stock market ...

Published: Sunday 13 May 2012
“In the not so distant future, sunlight, the very source of life for phytoplankton, will likely begin to kill them because of the ocean’s increasing acidity, researchers from China and Germany have learned.”

Without major reductions in the use of fossil fuels, sunlight is to kill an unknown number of ocean phytoplankton, the planet's most important organism, a new study reports this week.

Not only are phytoplanktons, also known as marine algae, a vital component in the ocean's food chain, they generate at least half of the oxygen we breathe. 

In the not so distant future, sunlight, the very source of life for phytoplankton, will likely begin to kill them because of the ocean's increasing acidity, researchers from China and Germany have learned. 

"There's a synergistic effect between increased ocean acidity and natural light," says Ulf Riebesell of the Helmholtz Centre for Ocean Research in Kiel, Germany. 

Riebesell added that it was also possible "phytoplankton could adapt". 

Researchers were surprised to discover that diatoms, one of the most important and abundant types of phytoplankton, fared very badly during shipboard experiments conducted by co-author Kunshan Gao, from the State Key Laboratory of Marine Environmental Science at Xiamen University, Xiamen China. 

Previous experiments in labs like Riebesell's found that diatoms actually did better in high-acid seawater, unlike most other shell- forming plankton. Burning fossil fuels has made the oceans about 30 percent more acidic researchers discovered less than 10 years ago. Oceans absorb one third of the carbon dioxide (CO2) emitted from using fossil fuels. 

The good news is this has slowed the rate of global warming. The bad news is oceans are now more acidic and it will get worse as more CO2 is emitted. This is basic, well-understood ocean chemistry. 

Gao and his team made several trips into the South China Sea taking samples from surface waters where phytoplankton are found. While still on the research vessel, those samples were made as ...

Published: Sunday 8 April 2012
“On average, 25 percent of European’s youth labor force is unemployed and yet another 25 percent only has a precarious, low paid job, even though most of unemployed young people possess high educational qualifications, including university diplomas.”

According to official figures, the unemployment rate affecting people under 25 years of age has reached 50 percent in Spain, 48 percent in Greece, 35 percent in Portugal, and 31 percent in Italy. Youth unemployment is also high in Ireland (30 percent), France (23 per cent), and Britain (22 percent). 

On average, 25 percent of European's youth labor force is unemployed and yet another 25 percent only has a precarious, low paid job, even though most of unemployed young people possess high educational qualifications, including university diplomas. 

In all these countries affected by high sovereign debt and economic recession, conservative governments have imposed drastic cuts in public spending, reduced social welfare programs and pensions and increased taxes, especially those paid by consumers, among other austerity measures. 

These programs have deepened economic slumps and fiscal difficulties across Europe. 

As the Organization for Economic Cooperation and Development (OECD) announced on Mar. 29 in its more recent economic assessment for the G7, the seven most industrialized countries of the world, "Our forecast for the first half of 2012 points to robust growth in the United States and Canada, but much weaker activity in Europe, where the outlook remains fragile." 

"We may have stepped back from the edge of the cliff," the OECD’s chief economist Pier Carlo Padoan cautioned, "but there’s still no room for complacency." 

Padoan also warned that the Eurozone’s three largest economies - Germany, France, and Italy – might have shrunk by an average of 0.4 percent during the first quarter of the year. 

The German economy already suffered a slowdown of 0.2 percent during the last quarter of 2011. Given the OECD ...

Published: Friday 30 March 2012
“Western Europe in the 1980’s and Japan in the 1990’s – cast a long and dark shadow on future economic performance.”

Four times in the past century, a large chunk of the industrial world has fallen into deep and long depressions characterized by persistent high unemployment: the United States in the 1930’s, industrialized Western Europe in the 1930’s, Western Europe again in the 1980’s, and Japan in the 1990’s. Two of these downturns – Western Europe in the 1980’s and Japan in the 1990’s – cast a long and dark shadow on future economic performance. In both cases, if either Europe or Japan returned – or, indeed, ever returns – to something like the pre-downturn trend of economic growth, it took (or will take) decades. In a third case, Europe at the end of the 1930’s, we do not know what would have happened had Europe not become a battlefield following Nazi Germany’s invasion of Poland.

In only one instance was the long-run growth trend left undisturbed: US production and employment after World War II were not significantly affected by the macroeconomic impact of the Great Depression. Of course, in the absence of mobilization for WWII, it is possible and even likely that the Great Depression would have cast a shadow on post-1940 US economic growth. That is certainly how things looked, with high levels of structural unemployment and a below-trend capital stock, at the end of the 1930’s, before mobilization and the European and Pacific wars began in earnest.

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In the US, we can already see signs that the downturn that started in 2008 is casting its shadow on the future. Reputable forecasters – both private and public – have been revising down their ...

Published: Wednesday 29 February 2012
“It’s about $170 billion worth of loans to keep Greece from defaulting on its debts.”

As Greece continues to try and arrest its economic decline, Germany OK'd another $170 billion worth of bailout funds to keep the government operating, to prevent the country from going bankrupt and to keep Greece in the eurozone.

On Monday the German Parliament approved the latest round of bailout funds for Greece.

It’s about $170 billion worth of loans to keep Greece from defaulting on its debts. Germany’s expected to come up with most of the cash.

Until now, German politicians have presented a pretty united front when it came to keeping Greece in the eurozone. That’s despite the fact that many Germans are fed up with giving the Greeks any more money.

But on Monday, the German tabloid Bild had this headline message for German politicians: “STOP!”

“Don’t go down this crazy path any longer," the tabloid wrote.

Meanwhile, other German papers recently carried a full page ad taken out by Greek businessmen that said, “Give Greece a Chance.”

Chancellor Angela Merkel expressed her support for the bailout Monday morning ahead of the parliamentary debate on the next tranche of German bailout money.

“I know there are people asking whether Greece was a bottomless pit, a hopeless case, whether it would be better for all if Greece went back to the Drachma, whether — to sum it up — the eurozone wouldn’t be better off without Greece than with Greece,” she said. “These questions are valid. After weighing up all pros and cons I, however, come to the conclusion that the opportunities lying within this new package outweigh its risks.”

For two years now, Merkel and her party faithful have stuck to the idea that the eurozone is better off with Greece in it. But cracks are now showing.

This past weekend, Merkel’s own Interior Minister suggested that Greece’s chances of recovery might be better outside ...

Published: Sunday 26 February 2012
“Filmmakers and novelists have long been fascinated by the way the optimistic, sunlit, pre-1914 Europe of emperors in plumed helmets and hussars on parade so quickly turned into a mass slaughterhouse on an unprecedented scale.”

Well in advance of the 2014 centennial of the beginning of “the war to end all wars,” the First World War is suddenly everywhere in our lives. Stephen Spielberg’s War Horse opened on 2,376 movie screens and has collected six Oscar nominations, while the hugely successful play it’s based on is still packing in the crowds in New York and a second production is being readied to tour the country.

In addition, the must-watch TV soap opera of the last two months, Downton Abbey, has just concluded its season on an unexpected kiss.  In seven episodes, its upstairs-downstairs world of forbidden love and dynastic troubles took American viewers from mid-war, 1916, beyond the Armistice, with the venerable Abbey itself turned into a convalescent hospital for wounded troops. Other dramas about the 1914-1918 war are on the way, among them an HBO-BBC miniseries based on Ford Madox Ford’s Parade’s End quartet of novels, and a TV adaptation of Sebastian Faulks’s novel Birdsong from an NBC-backed production company.

In truth, there’s nothing new in this.  Filmmakers and novelists have long been fascinated by the way the optimistic, sunlit, pre-1914 Europe of emperors in plumed helmets and hussars on parade so quickly turned into a mass slaughterhouse on an unprecedented scale. And there are good reasons to look at the First World War carefully and closely.

After ...

Published: Monday 30 January 2012
“An excessive cut in public spending in the current circumstances can lead to a contraction in growth, which is already happening: the International Monetary Fund now projects that the eurozone will shrink by 0.5% in 2012.”

It is now increasingly clear that what started in late 2008 is no ordinary economic slump. Almost four years after the beginning of the crisis, developed economies have not managed a sustainable recovery, and even the better-off countries reveal signs of weakness. Faced with the certainty of a double-dip recession, Europe’s difficulties are daunting.

Not only is Europe running the risk of lasting economic damage; high long-term unemployment and popular discontent threaten to weaken permanently the cohesiveness of its social fabric. And, politically, there is a real danger that citizens will stop trusting institutions, both national and European, and be tempted by populist appeals, as in the past.

Europe must avoid this scenario at all costs. Economic growth must be the priority, for only growth will put people back to work and repay Europe’s debts.


Published: Sunday 15 January 2012
Short- and medium-term economic policies should aim at stimulating the economy, rather than throttling it with austerity measures.

Bolstered by Germany’s strong economy, Berlin has become the unofficial capital of the battered European monetary union.

However the German government’s proposals to solve the sovereign debt crisis, by imposing severe austerity programs to reduce state deficits and rejecting the distribution of Eurobonds, are coming up against increasing opposition across most of the 17 countries that comprise the Eurozone.

On Jan 9, French president Nicolas Sarkozy was in Berlin to meet German chancellor Angela Merkel and discuss fresh new solutions to the European sovereign debt crisis.

On Jan 11, Italian Prime Minister Mario Monti, in office since November, visited the German capital for the very same purpose but made no secret of his wish to modify the austerity program, which successive governments have hurled at the crisis with little to no success.

In an interview with the German daily newspaper Die Welt, Monti said that his government has imposed "severe burdens" upon the Italian citizenry by following Berlin’s austerity model, but so far "the European Union has made no concession towards Italy, by way of lower interest rates" for the country’s state bonds.

"If Italian citizens do not see (the immediate) fruits of their austerity efforts, there will be protests against the EU, against Germany, and against the European Central Bank," Monti warned. "There are already signs of these protests."

Although almost all 17 members of the Eurozone currently suffer from sovereign debt, financial markets sanction each of them differently by imposing different interest rates for new state debt bonds.

For instance, Germany, which has a sovereign debt of some 2.1 trillion Euros, pays extremely low interest rates for new debt bonds. Earlier in January, the interest rates for new German debt bonds were negative, meaning that investors were willing to pay Germany for taking out ...

Published: Wednesday 28 December 2011
“For the troubled economies to revive, the recent agreements on austerity must be supplemented by significant debt haircuts.”

Europe’s sovereign-debt crisis has rumbled on for so long that some people are beginning to take it for granted that eurozone leaders can continue to stumble from one non-solution to the next without risk of cataclysm. But if any troubled southern European economy fails to roll over its debt in the coming months, the resulting contagion will spread quickly from the eurozone throughout the global financial system, with consequences far more grave than what followed Lehman Brothers’ collapse in September 2008.

Despite the new agreement reached at the European Union’s summit in December, strengthening financial markets’ confidence in the eurozone remains an elusive goal. In the aftermath of the summit, the euro’s exchange rate sank to its lowest level of the year (around $1.30), while yields on Italian five-year bonds hit a new high (almost 6.5%). In France, Socialist presidential candidate François Hollande flatly declared that the latest agreement “is not the right answer,” ...

Published: Tuesday 20 December 2011
The focus on currencies as a cause of the West’s economic woes, while not entirely misplaced, has been excessive.

If one looks at the trade patterns of the global economy’s two biggest players, two facts leap out. One is that, while the United States runs a trade deficit with almost everyone, including Canada, Mexico, China, Germany, France, Japan, South Korea, and Taiwan, not to mention the oil-exporting countries, the largest deficit is with China. If trade data were re-calculated to reflect the country of origin of various components of value-added, the general picture would not change, but the relative magnitudes would: higher US deficits with Germany, South Korea, Taiwan, and Japan, and a dramatically lower deficit with China.

The second fact is that Japan, South Korea, and Taiwan – all relatively high-income economies – have a large trade surplus with China. Germany has relatively balanced trade with China, even recording a modest bilateral surplus in the post-crisis period.

The US has a persistent overall trade deficit that fluctuates in the range of 3-6% of GDP. But, while the total reflects bilateral deficits with just about everyone, the US Congress is obsessed with China, and appears convinced that the primary cause of the problem lies in Chinese manipulation of the renminbi’s exchange rate.

One problem with this view is that it cannot account for the stark differences between the US and Japan, Germany, and South Korea. Moreover, the real (inflation-adjusted) value of the renminbi is now rising quickly, owing to inflation differentials and Chinese wage growth, particularly in the country’s export sectors. That will shift the Chinese economy’s structure and trade patterns quite dramatically over time. The final-assembly links of global-value added chains will leave China for countries at earlier stages of economic development, such as Bangladesh, where incomes are lower (though without producing much change in the balance with the US).

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Published: Monday 12 December 2011
“At two critical moments in the past, a British ‘no’ had a decisive impact on European monetary developments.”

At the just-concluded European Union summit, British Prime Minister David Cameron vented decades of accumulated resentment stemming from his country’s relationship with Europe. Europeans were appalled at how the last-minute injection of finicky points about bank regulation could stymie what was supposed to be a breakthrough agreement on the regulation of EU countries’ budgets. Cameron’s supporters in Britain cheered and portrayed him as a new Winston Churchill, standing up to the threat of a vicious continental tyrant.

The United Kingdom’s view of Europe has always been both emotional and ambiguous. A Conservative government wanted to join the European Economic Community in the early 1960’s, but was rejected by French President Charles de Gaulle. The General mocked the British ambition with a rendition of Edith Piaf’s song about an English aristocrat left out on the street, “Ne pleurez pas, Milord.” In the end, Britain came in from the cold, but British leaders always felt that they were not quite welcome in the European fold.

At two critical moments in the past, a British “no” had a decisive impact on European monetary developments. In 1978, German Chancellor Helmut Schmidt and French President Valéry Giscard d’Estaing proposed an exchange-rate arrangement – the European Monetary System (EMS) – to restore stable exchange rates in Europe. Initially, the Germans and the French negotiated trilaterally, with the UK, in meetings that were slow, cumbersome, and unproductive.

In fact, the talks were sabotaged by British Prime Minister James Callaghan, who started conferring with US President Jimmy Carter about the challenge that the European plan posed to the United States, and how the Anglo-Saxons could respond to the continental threat. As he put it, according to the transcript of one of the phone calls, “with the strength of the German economy, it could be ...

Published: Monday 12 December 2011
Private sources explicitly include carbon markets as governments from the rich countries frequently cited the financial crisis has tied their purse strings.

The world is increasingly committed to dangerous levels of global warming with yet another failure by nations of the world to agree to needed reductions in carbon emissions here in Durban. However, as the 17th Conference of Parties ended early Sunday morning, members did agree to talk about a new global treaty to reduce emissions.

After two weeks and an additional 29 hours of intense and even bitter negotiations, the 193 nations participating in the United Nations climate talks agreed to a complex and technical set of documents called the "Durban Platform." These include the continuation of the Kyoto Protocol, a formal structure for a Green Climate Fund, new market mechanisms, and more. 

The biggest development reached at dawn Sunday is an agreement to negotiate a new global treaty to reduce emissions by 2015. While this may look like simply agreeing to more meetings, it is the first time all nations have agreed to be governed by a new global emission reduction treaty under the U.N. Framework Convention on Climate Change (UNFCCC).

Currently the promised emission reductions by industrialized countries and those of China, Brazil, South Africa, India and others under the 2009 Copenhagen Accord guarantee a world that is at least 3.5 degrees Celsius warmer on average according to climate science. It will be double that over large parts of ...

Published: Tuesday 6 December 2011
“Sweden, the United Kingdom, and Germany are the top countries to fight climate change, but experts said they could not award any country with the top three rankings, as no nation was doing enough to prevent climate change.”

Sweden, the United Kingdom and Germany are the top countries to fight climate change, according to the 2012 Climate Change Performance Index, whose results were published at the United Nations climate change summit today.

Sweden, the country with the lowest emission levels of 50,600 tons of CO2 emissions, according to the latest data from the United States Energy Information Administration (EIA), and good emission trends worldwide, was ranked 4th. 

Experts said they could not award any country with the top three rankings, as no nation was doing enough to prevent climate change. 

The three lowest-ranking countries are Saudi Arabia, Kazakhstan and Iran. The index is compiled each year by environmental lobby organization Germanwatch and the Climate Action Network (CAN), which evaluate and compare the climate protection performance of the 58 countries worldwide which are together responsible for more than 90 percent of global energy-related CO2-emissions

"This year’s results signify that although globally emissions are still growing, none of the big emitters make the real shifts that are needed," said CAN Europe director Wendel Trio. "None of them is considered as doing enough." 

Sweden’s climate policy was not ambitious enough, while the UK, ranked 5th, had recently shown worrying signs. It had failed to tighten up its carbon budgets, while Germany’s emission levels remained too high for a placement higher than rank 6. 

"The average grades for the national and international policies are weak," said Germanwatch researcher Jan Burck, one of the authors of the ...

Published: Monday 5 December 2011
“Letting the ECB off the hook in this manner would simply validate for Europe as a whole the same moral hazard feared by German and other leaders who oppose ECB intervention.”

A short-lived rumor recently suggested that the International Monetary Fund was putting together a €600 billion ($803 billion) package for Italy to buy its new government about 18 months to implement the necessary adjustment program. Except for the magnitude of the package, this sounds no different from a standard IMF adjustment program – the kind that we are accustomed to seeing (and criticizing) in the developing world. But there is one crucial difference: Italy is part of a select club that does not need outside rescue funds.

So far, programs for the eurozone periphery have been spearheaded and largely financed by European governments, with the IMF contributing financially, but mainly acting as an external consultant – the third party that tells the client the nasty bits while everyone else in the room stares at their shoes.

By contrast, the attempt to crowd multilateral resources into Europe was made explicit by eurozone finance ministers’ call in November for IMF resources to be boosted – preferably through ...

Published: Saturday 3 December 2011
“Crisis is often invoked as the midwife of revolutionary change, and here are Greece, Italy, Spain and even France at various levels of crisis, with political orthodoxy and the normal order of things increasingly discredited.”

It looks as though the eurozone may be in a decisive meltdown, which is just fine in my book. The sooner we get back to francs, lire, punts, drachmas and the rest of the old sovereign currencies, the better.

It used to be as much a part of going to France to change money and be handed a bundle of notes featuring the devious Cardinal Richelieu as choking on Gauloise smoke. Instead, those francs are now replaced by the characterless but somehow always expensive euros.

The argument against the eurozone is that hard-faced Euro-bankers — their killer instincts honed at Goldman Sachs, Wall Street's School of the Americas — have the power to act as the bully-boys of international capital and impose austerity regimes from Dublin to Athens, scalping the poor to bail out the rich.

Now the end of the eurozone does not mean the end of the European Union. They're different. There are 17 nations in the former, 27 in the latter. Britain, for example, has never been in the eurozone, which is why the currency exchange in London will, in return for your worthless dollars, hand you bank notes with the Queen's portrait on them.

At the moment, the European Union has virtually no tax collecting powers. Its annual haul is about 1 percent of the EUs gross domestic product. By comparison, the U.S. government collects about 20 to 24 percent of GDP.

Throughout the entire Eurocrisis, there has been a basso profundo chorus from the Eurocrats that what's needed is a lot more centralizing. In the words of Wolfgang Munchau at the Financial Times on Nov. 28, the EU needs "a fiscal union": "This would involve a partial loss of national sovereignty, and the creation of a credible institutional framework to deal with fiscal policy, and hopefully wider economic policy issues as well."

I've read many editorial paragraphs with this same bullying timbre — that what the whole European enterprise needs is an ...

Published: Saturday 12 November 2011
“Just as healthy domestic economies are the best guarantor of an open world economy, healthy domestic policies are the best guarantor of a stable international order.”

As if the economic ramifications of a full-blown Greek default were not terrifying enough, the political consequences could be far worse. A chaotic eurozone breakup would cause irreparable damage to the European integration project, the central pillar of Europe’s political stability since World War II. It would destabilize not only the highly-indebted European periphery, but also core countries like France and Germany, which have been the architects of that project.

The nightmare scenario would also be a 1930’s-style victory for political extremism. Fascism, Nazism, and communism were children of a backlash against globalization that had been building since the end of the nineteenth century, feeding on the anxieties of groups that felt disenfranchised and threatened by expanding market forces and cosmopolitan elites.

Free trade and the gold standard had required downplaying domestic priorities such as social reform, nation-building, and cultural reassertion. Economic crisis and the failure of international cooperation undermined not only globalization, but also the ...

Published: Thursday 10 November 2011
“Culture explains why Germany, dismembered in a vast and horrendous population exchange, and the eastern sector of it mismanaged for years afterward by knuckleheaded communists, is now Europe’s preeminent economic power.”

Last month, the Financial Times announced on Page One that Volkswagen “will become the world’s biggest carmaker this year . . . [and] replace Toyota in the industry’s top spot.” This was bad news for other automakers, I suppose, but it was definitely bad news for the Arab Spring, not to mention those commendably idealistic Americans who would like to sell democracy, as well as jeans, to an indifferent world. Every VW barrels right through American presumptions.

I was a delightful 4-year-old when World War II ended in 1945. Even though I was not much of a newspaper reader back then, I would still like to believe that if anyone had told me that in my lifetime Germany and Japan would rule the auto world, I would have screamed for my mother. I was clearly in the presence of a crazy person.

Picture this: Atomic bombs had leveled Hiroshima and Nagasaki. Tokyo had been incinerated. Japan had lost about 3 million combatants and civilians. Its infrastructure was gone. Germany was in a similarly miserable shape — more than 4 million military and civilian deaths. It, too, had been utterly destroyed. What was left, factories and such, was being dismantled, Lego-style, and shipped to the Soviet Union. So, too, were scientists.

The destruction of Germany and Japan was absolute. Tranches of young men, the traditional human building blocks of a nation, were gone. Resting in so many military cemeteries are ...

Published: Thursday 27 October 2011
“The Catholic Church has for many years raised objections to the patterns of globalization, concentration of wealth and economic equality that have encouraged the massive redistribution of wealth upward that has made the rich richer, the poor poorer and the middle class more vulnerable than at any time in generations.”


The Catholic Church has for many years raised objections to the patterns of globalization, concentration of wealth and economic equality that have encouraged the massive redistribution of wealth upward that has made the rich richer, the poor poorer and the middle class more vulnerable than at any time in generations.

And, now, as the Occupy Wall Street movement raises the issue of economic inequality, the church is stepping up with a proposal to begin to address the extreme injustice of a system that taxes working people for necessities but allows speculators to avoid even the most basic responsibilities.

On the eve of the G-20 leaders, the Pontifical Council for Justice and Peace has endorsed a series of reforms to the global economic financial and monetary systems that features as its centerpiece the development of a financial transactions tax.

From the note on financial reform from the Pontifical Council:

Specific attention should be paid to the reform of the international monetary system and, in particular, the commitment to create ...

Published: Wednesday 26 October 2011
“Since May, Chilean students have been staging protests demanding that the government make education free to all.”

At first glance, the synchronized protests that took place in more than 900 cities around the globe on Oct. 15 seemed to indicate that Occupy Wall Street had achieved a kind of worldwide resonance.

But the truth is more complex. Many of the protests elsewhere grew out of movements that pre-date Occupy Wall Street and out of frustrations that, though similar in some ways, are also specific to their countries.

Here’s a look at the origins, demands and affects of five of these global protests, as well as the criticism they’ve faced.

In Chile, Students Protesting for Free Education Occupy Schools

The Santiago protest in solidarity with Occupy Wall Street took place during a week of ongoing national demonstrations. Since May, Chilean students have been staging protests demanding that the government make education free to all.

Secondary school students have occupied their schools, sleeping on the floor and holding their own classes. Last week, protesting students  READ FULL POST 6 COMMENTS

Published: Sunday 23 October 2011
“There are three possible responses to this state of affairs. The first relies on intervention by the central bank in the event of a threat to the sovereign-debt market.”

Since the summer, the continuing installments of the Greek crisis have concealed a worrying process of fragmentation in the eurozone. Indeed, there are several grim indicators of this development.

First, the spread between banks’ borrowing rate and the zero-risk rate has been climbing since July. Financial institutions with liquidity increasingly prefer to deposit their cash with the European Central Bank, which has had to resume its lending to banks. The same thing occurred in the 2007-2008 crisis, though the shift is less acute this time, and is confined to the eurozone. In London and New York, the interbank market is still working; nevertheless, there is reason for concern.

Second, cross-border banks are charging higher interest rates to firms in southern Europe than they are to comparable firms in northern Europe, which is worsening the situation for crisis-hit economies. This fragments Europe’s supposedly unified market. And, instead of combating this trend, northern European regulators are amplifying it by limiting financial institutions’ exposure to southern European banks.


Published: Tuesday 18 October 2011
“One of the demands voiced by protesters in the Occupy Wall Street movement is for a ‘public option’ in banking.”


Publicly-owned banks were instrumental in funding Germany’s “economic miracle” after the devastation of World War II. Although the German public banks have been targeted in the last decade for takedown by their private competitors, the model remains a viable alternative to the private profiteering being protested on Wall Street today.

One of the demands voiced by protesters in the Occupy Wall Street movement is for a “public option” in banking. What that means was explained by Dr. Michael Hudson, Professor of Economics at the University of Missouri in Kansas City, in an interview by Paul Jay of the Real News Network on October 6:

[T]he demand isn’t simply to make a public bank but is to treat the banks generally as a public utility, just as you treat electric companies as a public utility. . . . Just as there was pressure for a public option in health care, there should be a public option in banking. There should be a government bank that offers credit card rates without punitive 30% interest rates, without penalties, without raising the rate if you don’t pay your electric bill. This is how America got strong in the 19th and early 20th century, by essentially having public infrastructure, just like you’d have roads and bridges. . . ...

Published: Wednesday 31 August 2011
“U.S. policymakers now grappling with the question of America’s role in the world ought to look to the past as well as the future.”

In 1933, Franklin D. Roosevelt named an obscure history professor, William E. Dodd, as ambassador to Germany. Dodd was a principled but prosaic man, whose gift to popular history was not his academic writings but the scandalous behavior of his attractive daughter. In Berlin, she slept with the enemy — neither for God nor country but for the sheer fun of it.

It took the older Dodd just a brief time and Martha Dodd, his 25-year-old daughter, much longer to figure out that they were dealing not with the sort of country club anti-Semites they knew back in the States but with killers intent on wiping out a whole people. “We sort of don’t like the Jews anyway,” Martha told a friend. Lucky for her she was in the right country.

The story of the Dodd family’s time in Germany is grippingly told by Erik Larson in his “In the Garden of the Beasts.” His is a novelistic approach to a rigorously nonfiction account of what the unfolding Nazi regime looked like to a dowdy historian and his family. The Dodds were plopped into one of history’s great maelstroms, with Hitler consolidating power swiftly and events moving fast but incrementally so. No one announced the Holocaust. It began the random day a Nazi goon knocked a Jew off the sidewalk.

Dodd’s tenure in Berlin was marked by repeated entreaties to his bosses back at the State Department to allow him to make one sort of protest or another. Invariably, this was denied. The State Department back then was a redoubt of snooty anti-Semites who thought, within reason of course, that Hitler had a point about the Jews. State also recognized that Washington had little leverage and, anyway, what Hitler was doing to his Jews and others was his own damned business. America had no vital national interest at stake.

I emphasize those words because they have great currency at the moment. I heard them used last week by Jon Huntsman, who explained to journalists ...

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