Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Class Warfare Page 20 of 36

Humans to Go Extinct in Three, Two—

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On June 23, 2015

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So, a very conservative study on the rate of species going extinct has come up with the following:

Extinction Chart v06

One hundred and fourteen times faster than the normal background rate.

“If it is allowed to continue, life would take many millions of years to recover, and our species itself would likely disappear early on,” lead author Gerardo Ceballos of the Universidad Autonoma de Mexico said…

Cheerful.

This is the point where a sane species would be in a controlled panic.

Which brings us to Laudato Si. The obvious issue with Luadato Si is Pope Francis sticking to current church doctrine against birth control. It is incontrovertible that every person has a carrying load for the planet.

But Francis makes a great number of good points, starting with the fact that we are vastly wasteful. It is not that we have necessarily surpassed the Earth’s carrying capacity in theory (only in fact). Half the food in America, for example, is wasted. Suburbs are vastly wasteful. Lawns are idiocy. Most of our buildings use far more energy than they need to. Improved agricultural methods can produce up to ten times as much produce on the same amount of land, for less water. Urban indoor agriculture using LEDs is showing great promise. Centralized manufacturing, which requires concentrated power which cannot yet be provided by renewables could be decentralized even with out current tech, and within fifteen years or so we could radically decentralize it.

And so on.  There are more good ideas than one could possibly list. These ideas would allow us to support our current population on much less land and allow the environment to renew itself. We could massively reduce carbon output at the same time, stop overfishing the seas, and everyone would still be fed, have a place to live, and so on. Yes, most suburbs would be a thing of the past, but the question of “suburbs” vs. “human survival” shouldn’t be a hard one.

All of this would probably not be enough.

Yeah, sorry.

We’ve left it too late. The issue is the carbon and other hothouse gases already in the environment. They are so high that we will see release of methane from the arctic, both land and sea. This has already begun. It will continue. Even entirely stopping carbon tomorrow (which is impossible) likely wouldn’t be enough. Cutting carbon by half would definitely not be enough.

We needed to be acting back in the 1980s when climate change science first became overwhelmingly likely to be true.

We didn’t. An alien species studying our extinction, should it come to that, will only be able to conclude we did it to ourselves.

What I’m seeing is that we are on the wrong side of a self-reinforcing cycle.

We’re going to need geo-engineering. It’s messy and we’ll probably screw it up, but we don’t have much choice left.

Because there is a chance that even doing everything right, we’ll still go extinct (especially if we bork the oxygen cycle, a non-zero possibility), we need to be crashing biospheres. We’ve never made biospheres work before; we cannot create artificial environments cut off from the world which work. We need to.

That understanding will be very useful in any scenario–from cleanup of major, but not catastrophic, environmental damage, to triage on a crashing ecosystem, to saving a breeding population in a world which no longer supports humans.

A sane humanity, who self-governed in ways that made sense, and which was concerned with the welfare of their children, would have headed off most of this. A not-completely-insane humanity who had failed to take action before would now be making this the highest world priority.

We are doing neither.

Instead, our best and brightest are figuring out the best possible ways to serve ads, creating the most impressive mass-surveillance system the world has ever seen, and playing leveraged financial games which are resulting in austerity for much of the world. Destroying the human resources which we should be using to save ourselves (and so many other species, who have done nothing to “deserve” their extinction).

One can argue, and many will, that this is entirely the fault of our rulers. Maybe, maybe not, but it won’t matter when we’re all dead, and I’m not seeing widespread revolts because of mismanagement. And hey, if worse comes to worst, and enclaves are set up to save a small breeding population, remember, it’s the “leaders” who did most of the damage who will get into them.

You won’t. Your children won’t. You live or die with saving the Earth.

Probably you die.

But, then, most people probably figure they’ll die before the environmental collapse gets them. If they’re at least middle-aged, they’ll probably win that bet.

Their kids won’t. Too bad for them. Loved them enough to do everything except save their lives from a completely predictable threat.

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No One Who Hasn’t Sold Their Soul Can Afford a Home in London

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On June 3, 2015

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And that’s why London is losing its soul and becoming an uninteresting place to live:

London housing price to earnings ratio

London housing price to earnings ratio

From 2.6 to 9.1.

This is a government choice. It is related to allowing the financial sector to take over London’s economy, with fake profits driving out real profits. It is related to the withdrawal from social housing. It is related to a decision to allow foreigners to buy real-estate they don’t live in most of the year. It is related to tax policy. It is related to the deliberate priming of the mortgage and housing markets by the central bank.

London is where the jobs are in England, but you can’t afford a home there if you’re an ordinary person and not attached to one of the various money hoses.

This same dynamic is playing itself out in world-cities worldwide: from Vancouver and Toronto in Canada, to New York, to Paris, to San Francisco, and so on. There are too many rich people, too many poor people, and too much pump priming from the central monetary authorities. If you live in the “rich sub-economy,” which can just mean being a retainer, you’re golden. If you don’t, you’re forced out.

There aren’t that many cities the global rich actually want to live in, play in, have vacation homes in, or retire to. There also aren’t that many financial centers in the world. Those cities that are both (like New York and London) are becoming impossible to afford the fastest, but so are all the “world cities.”

The irony of this is that huge real-estate prices drive up rents for businesses, and the interesting businesses (like book stores and one off retail outlets) are driven out of business. The artists, intellectuals, rebels, and so on that made places like New York, San Francisco, and London interesting are also driven out. The rich, being largely uninteresting and useless at anything but sucking from money-tits, make cities boring and sterile; they destroy much of what attracted them to a city in the first place.

What is left are expensive restaurants and overpriced chain fashion outlets: soulless and boring.

The rich, in numbers, are locusts, destroying what they think they value.

 

Fourteen Points on the World Economy as the US GDP Drops .7 Percent

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On May 29, 2015

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So, while it generally takes two quarters for a recession to be so-called, it may be that the recession is here.

Let us recap the non-recessionary period:

  • The percentage of people employed in the US never recovered;
  • More than the total amount of growth went to the top four percent or so, with most of that going to the top one percent and most of that going to the top .1 percent;
  • The stock market had a huge bull market, even though the economy wasn’t working for anyone but the top few;
  • Outside America, the “south” of Europe never recovered in any meaningful way, and most European nations generally did badly for most of their citizens;
  • Various resource nations did well for a time, but their success was based on demand from developed nations or, more commonly, from China;
  • Chinese demand collapsed some time ago;
  • China has been printing more money than either Japan or the US; much more;
  • Japan’s “unconventional monetary policy” has been a roaring failure–if its intention was to get the Japanese economy going again;
  • The collapse in oil prices last year helped the US briefly, but because the rest of the world has rolled off a cliff and because those gains couldn’t go widespread, it was only briefly (this is as I predicted at the time);
  • Canada’s economy was hurt badly by the oil price crash, and because the mixed economy has been critically injured, there is very little else to hold up the economy;
  • Both Britain (or London…almost the same thing) and Canada have huge housing bubbles, and those bubbles, with the addition of financial games, are all that holds those economies together at this point;
  • Britain never actually recovered either, for the majority of its citizens–just a large enough minority to elect Cameron;
  • Australia has tied itself massively to resource extraction on the back of Chinese demand. There is no meaningful Australian economy whose fate is not tied to China.
  • India’s development is hollow neo-liberalism, and has seen an actual decrease in per capita calories. It is consumptive and limited to a few key areas.

Let me put this another way: The developed world is in depression. It has been in depression since 2007. It never left depression. Within that depression, there is still a business cycle: There are expansions, and recessions, and so on. Better times and worse times.

While cheap solar is a big deal, it is not yet deployed sufficiently to break the “widespread demand will crash the economy through oil price increases” problem, and this is exacerbated the by the deadlock rich elites have on most of the world’s politics and economic policies, since it is not in their interest to solve problems, but only to become more rich.  Not that solving problems is something they mind, if it makes them richer and keeps everyone else poor.

The world still has very few problems we couldn’t solve if we acted on them in a productive way (though some, like climate change and the great die-off, are beyond the point of no return for catastrophic damage), but that’s largely irrelevant while public policy remains in the hands of oligarchs. There is some reason for hope, as left-wing parties rise in Europe, but those green shoots are still nothing but green shoots.

I suggest that my readers who are able to make money do so now, you may soon find that you can’t. This is especially important if your employment is precarious.  Take care of yourselves, and take care of each other, unless you are lucky enough to live in the few rich, social democratic states left, you cannot expect much aid from your governments.

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Obama Tries to Make His Bones Again with the Trans-Pacific Partnership

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On April 24, 2015

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Apparently Obama is angry at progressives for attacking the Trans-Pacific Partnership. 

“What I am averse to is a bunch of ad hominem attacks and misinformation that stirs up the base but ultimately doesn’t serve them well. And I’m going to be pushing back very hard if I keep hearing that stuff,” Obama told a small group of reporters on the call.

Of all the criticisms, “The one that gets on my nerves the most is the notion that this is a secret deal,” he said. “Every single one of the critics saying this is a secret deal, or sent out e-mails to their fundraising base that they’re working to stop a secret deal, could walk over and see the text of the agreement.”

No: Every critic doesn’t have access. Only a partial version of the deal is available to the public, and only because it was leaked.  The very idea that these deals should be done in secret is fundamentally anti-democratic. They do it because they know people would object if they knew what was in them.

The Electronic Frontier Foundation has a good summary of what’s wrong, in terms of copyright enforcement. 

In short, countries would have to abandon any efforts to learn from the mistakes of the US and its experience with the DMCA over the last 12 years, and adopt many of the most controversial aspects of US copyright law in their entirety. At the same time, the US IP chapter does not export the limitations and exceptions in the US copyright regime like fair use, which have enabled freedom of expression and technological innovation to flourish in the US. It includes only a placeholder for exceptions and limitations. This raises serious concerns about other countries’ sovereignty and the ability of national governments to set laws and policies to meet their domestic priorities.

Go read the rest if you want to be sick to your stomach.

The bill also includes takings tribunals, in which firms would be able to sue governments for violating the terms of the deal. (In the past, such tribunals have been used successfully to sue for such things as banning additives which cause cancer, since the lost sales are a loss for the company involved.)

Obama made his bones by completing the Wall Street bailout. Now, before he finishes his term, he wants to give the people who can make him filthy rich after he’s no longer President a big, fat, slobbery kiss that will make them billions. This may well be, to him, the most important thing he’s done in his entire presidency:

In a meeting with reporters in the US Capitol, Senator Sherrod Brown of Ohio said his caucus has been “talked to, approached, lobbied, and maybe cajoled by more cabinet members on this issue than any [other] issue since Barack Obama has been president. And that’s just sad.”

Brown continued: “I wish they had put the same effort into the minimum wage. I wish they had put the same effort into Medicare at [age] fifty-five. I wish they had put the same effort into some consumer strengthening on Dodd-Frank.”

Like all Presidents, even George W Bush, Obama has done both good and evil. But the TPP, from what we know, is almost entirely bad and no one should trust a deal like this that is largely secret.

As usual, the TPP is about constraining Democracy, not just internally, but by locking countries in to laws which they then can’t change without abrogating the trade deal.

I covered this in “Free Trade is Elites Betraying Their Own Population“.  You should read it.

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The Three Types of People Who Wind Up Rich and How They Destroy the Wealth of Others

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On April 22, 2015

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Models of economics which don’t handle power are marginal at best. They serve only to describe what happens in situations where no one has enough power to set the rules or where there is a central authority which acts to keep any other actor from having enough power to set the rules.

The Standard Model of Power in Markets

Assume that people want two things: They want stuff and they want security. That is to say, they want to know they can keep what they have.

People who become rich usually fall into one of three categories:

1) People who lucked out by being in the right place at the right time (many people who became rich in the internet bubble, for instance, just happened to be working at the right place at the right time);

2)People who are obsessed with something that other people value highly. Like many musicians in the era of mass-produced music before the rise of the internet. Or like J.K. Rowling. These people are also lucky, in the sense that the products of their obsessions are highly marketable at the time of  output;

3) People who are obsessed with making money. They think of little else and have devoted their life to it.

In all three cases, once you’re rich, the needs that drove you there don’t go away. Wealth effects people, but it rarely changes either the obsessive need that drove them, nor the human need for security.

The second group is the least dangerous because their primary motivation was never money and their obsession drives them away from thinking too much about money.

The first group, those who got lucky, are the rank and file of the “I’ve got mine, screw you. Jack” brigade. This includes people far beyond those who became truly rich, like those who worked at startups by luck or those who won the genetic jackpot and inherited; it also includes those who won the generational jackpot: the GI Generation, for example, or older Boomers.

The GIs may have been born during the Great Depression, but they spent their prime working years during the greatest general wage increase of the last few centuries. They bought houses when they were cheap, then they benefited from the massive appreciation of housing values from a multi-generational period in which house prices increased faster than wages, capped by an actual housing bubble for those who lived long enough.

In generational terms, they were born on second (though not third). They had the GI Bill, great jobs, great job security, great pensions, great health care, and so on.

They lucked out. It’s not that they didn’t work hard for what they got, but the same amount of work in a different time or place wouldn’t have reaped the same rewards.

People like this become conservative. The GIs start off as the footsoldiers of post-war liberalism, but they wind up Reagan Democrats. They have theirs and they vote for politicians and policies which make sure that what they have is secure. The net result of those policies has been to pull the ladder up after them–to make their children and grandchildren less prosperous.

If you got lucky, then preservation of capital is the first rule. People who got lucky are against high taxes, because they can’t expect to make more money.  They are especially against high taxation of unearned income, because their advantage is unearned income–their houses, stock portfolios, bonds, and so on. Their money makes money.

These are their interests. Most people act on their interests as filtered through their beliefs.

Thus, we come to group . The people who made a ton of money and who did so because that was their goal; they were always obsessed with money. This group also includes those people who came into a lot of power because they were obsessed with power, though the dynamic is a bit different.

These people still have the need for security. The best security is the legal protection of no one else being able to join your business. Some businesses have this quality innately. For instance, suppose you are the cable or phone provider to an area. You have the phone lines, you have the cable; it’s unlikely anyone else can drive those lines.

But the government, in the 90s, forced phone providers to lease their phone lines to internet providers (dial up, for ancients). So even having a physical monopoly isn’t security if the government acts against you.

High speed internet, over phone or cable, is not something those companies in the US (or Canada) are forced to allow other companies to sell.

The first concern for someone who is wealthy is getting protection from whoever is politically powerful. Government, if you wish, though it can be warlords or Kings or the local tribe, depending on the culture. They need sanction to keep what they have.

This is especially true of businesses which aren’t natural monopolies: selling weapons to the government, for obvious reasons, or; selling music, which could be copied by anyone (say hello to copyright laws); being a lawyer and not wanting too many other people to act as lawyers (say hello to bar exams and law schools); selling genetically modified food of which people are scared (make GMO labeling illegal). Creating money out of thin air, which is what banks, brokers and so on do, might be considered the ultimate monopoly. They sure don’t want Joe Blow to be able to say “I have one hundred thousand dollars, and if Goldman Sachs (in the 00’s) can create money through leverage at 41/1, I can too.”

Creating and lending money is a valuable perogative, one worth defending.

And what if everything goes wrong? What if, despite all your money, and all the defenses you’ve bought, you lose everything anyway?

Be clear: This is what happened in 2007 and 2008. If you take into account counterparty risk and you mark assets to market (value them at what they could be sold for), every bank and major brokerage in the United States, and probably all of those in Europe, was bankrupt.

Bankrupt. Even the ones who made the right bets, like Goldman Sachs: because if all their counterparties go under, so do they.

This sort of risk, the kind that is backed up by the full credit of the United States, requires owning government. It requires knowing the central bank is yours and will act to save you.

The first thing a capitalist does when he or she gets rich enough, is buy the system.

They do this for three reasons: 1) to secure their current privileges; 2) to provide a backstop in case of disaster; 3) to create new opportunities.

The consequence of these actions is to drive up prices and keep out competition. It is explicitly to reduce competition, because competition is a danger. The fewer entities controlling more of a market, or controlling politicians, the more money is made and the more secure the current (and future) fortune is.

What this does is destroy the future.  To those who are currently in power, the future cannot be allowed to happen until they control it: until they are the ones who will make a profit from it.This doesn’t mean all distruptive change is impossible. There are, even today, many factions amongst the rich: Wall Street, Oil, Silicon Valley, etc.. They have interests in common, and cooperate around those interests, but they are competing to see who will control the future.

This doesn’t mean all disruptive change is impossible. There are, even today, many factions amongst the rich: Wall Street, Oil, Silicon Valley, etc.. They have interests in common, and cooperate around those interests, but they are competing to see who will control the future. Largely, they agree on the basics–things like continually extending copyrights, for example, or free movement of capital, or making regulations so that government can’t enact laws which would make their business go away. They agree about low taxes on capital and low wages (Apple and other Silicon Valley companies conspired to keep engineer wages low by not bidding against each other). They agree about unions not being too powerful.

Anywhere Capital has consensus, if they have been able to buy the system, it is virtually impossible to do anything against their consensus.

Gays have rights because it’s not important to most rich and powerful people that they don’t; and it is important to some of them (say, Tim Cook) that they do.

Effective wages have stagnated or dropped for over 40 years now because it is important to most rich and powerful people that they do; your wages are their costs.

Unions have lost massive power because rich and powerful people find that in their interest–even those in industries without unions want them kept weak so they will never have unions.

Concentrated wealth quickly turns into concentrated power and concentrated wealth will always be inimical to widespread prosperity. Wealth is power when it is concentrated. Wealth that is not disproportionate is not power. If it is not power, it cannot protect wealth.

If you allow any group, especially any small group, to obtain disproportionate wealth, they will always use it to protect their wealth.

Part II will discuss how the drive for further wealth leads to the vast impoverishment of everyone outside the wealthy and a small retainer class. Part III will discuss how moderate concentration of wealth can lead to general progress for everyone.

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Austerity in the EU—in Rap

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On April 21, 2015

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The entire video is worth watching, but if you want to skip to the meat, go to 3:37. This is one of the most accurate portrayals of Lagarde (in charge of the IMF) and Merkel I’ve seen. Better than most written analysis.

Also, funny.

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Learned Hopelessness About Using Government for Good

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On April 16, 2015

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Seems that some of my commenters think that using government for good would be hard to do. Going with the theory that every comment indicates some number of readers who believe the same, let’s explore this notion in further depth. This kind of doubt is more important than it seems, because it speaks to the weird, modern idea that governments are powerless to control how money is spent by individuals or corporations, when, in fact, it’s dead easy.

The tax system is also set up to catch stuff like this. No income declared from your property? Hmmm… do you have family members living there for free? Go inspect.

You can also supplement this with things like checking meters, checking mail delivery, and checking IR maps to see if the heat or air conditioning is on. (All this before we even get to the government’s real surveillance abilities). I guarantee the salaries of the people doing the inspections will be far exceeded by the fines and the money earned from auctions of seized properties.

This sort of thing is not only dirt easy, actually enforcing it is profitable for government, just as auditing corporations and rich people is VERY profitable. So every time your government reduces auditors your tax service you should ask why.

No, as usual, this is an easily solved problem that people refuse to solve either because of learned helplessness or because it is profitable for them (and politicians) for the problem to remain unsolved.

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The Solution to Ghost Apartments Is Obvious and Predictably Overlooked

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On April 14, 2015

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So, one of the reasons we have resurgent housing bubbles in world cities like New York, London, Hong Kong, and Toronto is because of foreigners who buy apartments and then leave them empty. Newsweek has a good article on ghost apartments, but I want to focus on this because it’s symptomatic of why we can’t fix almost anything:

In Singapore and Hong Kong, officials tried to slow the spread of absentee-owned luxury housing by limiting mortgages.

….

To encourage owners to occupy their units or sell, New York state legislation has been drafted to impose a progressive tax on vacant luxury apartments worth $5 million or more. The proposed levy would start at one-half of 1 percent and rise to 4 percent on values above $20 million.

People who can afford luxury apartments can afford that fee. Make it simple: Put in a residency requirement. Someone must live in the apartment six months a year. If they don’t, the tax rate is 50% of the ostensible value of the apartment. If that doesn’t work (and it might not, given how rich they are), well, then just make it illegal to own apartments that aren’t used and have the government seize the apartment and use it for social housing, or sell it. And if the next owner doesn’t use it, seize it again.

Lest you think this isn’t a serious problem, understand this: Every unused apartment raises the rent of every other apartment in the city and increases the cost of every other condo in the city. This is supply that is artificially off the market. Because people don’t live in these apartments, local businesses don’t have as many customers. Meanwhile, the high prices of luxury apartments for which there is no actual local demand drives up real-estate prices, which drives up taxation. Everyone pays more in taxes, rent, or mortgages to subsidize foreigners who aren’t even using the condos.

The same is true for houses.

Rich people who want to visit world cities can suck it up and pay for a hotel. There are plenty of hotels that cost thousands of dollars a day (tens of thousands aren’t uncommon, but ordinary people will never even see these listed), which are suitable for their “needs.”

The are many problems like this which are easy enough to fix by either extremely punitive taxation and fines or by just forbidding these destructive actions.

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