Where Greece’s Money Actually Goes
This is just an update to a previous post indicating where Greece’s debt comes from… at least in part. And, again, it is not (or not only) lazy Greek tax-evaders that contributes to the country’s debt but the ‘need’ for Greek tax-payers to support Greek and Western banks (through loans/debt) so that they can support French, German, and U.S. arms manufacturers. I mean, how else is Germany, France or the U.S. going to maintain the illusion that they have robust economies? Sadly, Western nations could not survive without the Ponzischem-o-nomics of governments, the financial sector, and arms manufacturing.
See Zero Hedge’s article and the German original at Zeit Online.
peace.
Canada, the PM, Political Parties, and Ideological Assumptions
For some time now, I have been actively trying to challenge my own ideology. After years of studying media, propaganda, politics and the ideology of others, I have to realize that when it comes to ideology, it is also an individual’s own ideology–and the assumptions that follow–that is just as dangerous. As I teach and research in the area of media studies, I have realized the necessity of trying to remain–as much as is possible–ideologically neutral. And it has been tremendously illuminating and liberating (even though, to my friends and colleagues, I am sure it is puzzling if not unsettling as I also tend to be a very vocal individual). But it has led me to entertain the idea that we Canadians should outlaw political parties when it comes to government. In most Western democracies, political parties have become very powerful and have turned ‘government’ into ‘politics;’ little more than a game between a few teams (often only two) who fight for political power. Increasingly, this paralyzes government and allows for unelected organizations (political parties) to take control over political agendas and, to a large extent, government itself.
I am sure that in previous decades, say the 1920s (or pick any decade), political parties made sense. In eras with lower levels of education and access to information, political parties might have been useful sources of research, information, and discussion. Today, they are little more than shorthand… they allow people to pay less attention to issues and problems facing society and to focus on winning, cheering, and often meaningless ideas. Today, the political party is power and concentrates power in unelected hands that often exert tremendous control over elected MPs. Due to their proximity to power, they are often the place where other powerful forces (individuals and corporations and interest groups all along the political spectrum) seek to attach themselves. So, it became increasingly clear to me that we should just elect–as many of us do on a municipal level–worthy individuals who will travel to Ottawa and work on behalf of the entire population to run the country.
So, when I came across a post at CBC’s website attached to a story about the current Canadian election where the incumbent Prime Minister, Steven Harper, argued that without a majority he would not be able to protect Canada with regard to international relations, I thought both about ideology and assumptions.
“U.S. border deal at risk without majority: Harper”
http://www.cbc.ca/news/politics/canadavotes2011/story/2011/04/28/cv-election-harper-ndp-1148.html#socialcomments
CBC News
Posted: Apr 28, 2011 11:40 AM ETAn extremely popular comment by RickAshe [a very thoughtful commentator, see: https://membercentre.cbc.ca/ViewMember.aspx?u=8170984]:
Is the coalition “legal” and does it fit within the Canadian concept of “democracy”?
Yes.
The question of who forms the Canadian “government” at any given time is a question of how the members of parliament organize themselves: it can be a majority, a minority or a coalition.
When Canadians vote in a general election, they do not vote for a Prime Minister, nor do they vote for a government. Instead, Canadians vote for a member of parliament (“MP”) to represent their riding in Ottawa. Each MP gets a “seat” in the House of Commons. In all, 308 MPs are chosen.
The Prime Minister is actually appointed by the Governor General (“GG”). The GG, as the representative of the Queen, who, technically, is Canada’s head of state (in other words, the PM is not the head of state). The Prime Minister then chooses from among the MPs to appoint the members of the Cabinet.
As noted on www.thetyee.ca:
The Constitution Act of 1867 doesn’t even mention the prime minister or political parties. MPs are everything.
How MPs organize themselves is entirely up to them. This is why two MPs are able to currently sit as independents; there could just as easily be 308 of them. Most MPs have organized themselves into groupings known as parties. This simplifies the process of forming government but doesn’t change the constitutional pre-eminence of individual MPs.
There is just one basic requirement: The government must at all times enjoy the confidence of the majority of MPs in the House of Commons.
In other words, the Prime Minister and the Cabinet can only remain as the “government” of Canada for as long as they have the support of a majority of the MPs.
GOOGLE: is it legal in canada to form a coalition and check out Canadian Legal FAQS
My reply:
The implications of this fact about Canadian parliament becoming more well-known are staggering.
In recent history (and not just under the current government) the Prime Minister’s Office and the political parties have concentrated and consolidated political power around them. This is made worse since often majority governments are elected with only a relatively small percentage of the overall electorate.
It is time that Canadian citizens take back power from unelected entities. I am even inclined to say we drop political parties entirely, drop the Governor General (and our Constitutional ties to Britain and its monarchy), make the PM a symbolic head (as the GG is now) and make our MPs… all of them… work as government representatives.
I am heartened by the level of interest and often by the level of discourse that is evident during this election (as well as the opportunity to participate). From a media studies perspective, it is all the product of a well-educated citizenry, who have access to tremendous amounts of information and debate (and not just through ‘social media’), who seem to be highly motivated in a very uncertain era.
Peace
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Economic Warfare: The U.S. vs. Toyota (Japan)
Even though I am not at all knowledgeable about autos or the auto industry, I have been baffled as to why the woes plaguing Toyota have been so prominently featured in media coverage and taken up so stridently by politicians in the U.S. and even in Canada. At first, I thought it might just be a way of distracting public attention away from the economy and increasing public/government debt, especially the role that politicians have played in the whole mess (mostly thought negligence, deficit spending and deregulation). But I also think there are deeper forces at work, and it must surely revolve around the politics of the bailout and how this related to economic competition between countries; that is, economic warfare.
Economic warfare is not as exotic as it might sounds. Even though the Soviet Union is no more, the Cold War has reheated up again and some of the goings-on in countries like the Ukraine and Kyrgyzstan are combinations of geo-politics and economic competition between Russia and the U.S.
Consequently, I am, more and more, convinced that what is going on with Toyota is really a veiled attempt to destroy the number one Japanese automaker, at least in the North American market. With all of the bailouts, North American governments have invested billions of public dollars into a doomed industry. Politicians probably know that and the fear is that the North American auto companies might not, even when backed by billions of tax-payer dollars, be able to compete with the imports. So, the odd over-reaction on the part of U.S. politicians to the Toyota recalls and alleged cover up is probably best seen in this context. In the past, politicians and government regulators have often turned a blind eye toward automakers and recalls. Just think about the whole, sordid history of the SUV and rollovers during the past two decades. Thousands of people died in North America as a result of the design of the SUV and its tendency to roll over (in the sense that a light truck chassis, which was the basis for the SUV, is inherently unstable and not at all suited for normal city or highway driving). (For more on this see: Rollover: The Hidden History of the SUV at PBS Frontline or Keith Bradsher’s book, High and Mighty: SUVs – The World’s Most Dangerous Vehicles and How They Got that Way (2002).) But politicians and regulating agencies in the U.S. bent over backward to protect the auto industry–especially the U.S. automakers–because the SUV was a cash cow for GM, Ford, et al. And, it isn’t like Bush or Obama have heralded in a new era of tough regulation or anything like that.
So, it would appear that there is much more going on with respect to Toyota. With Japan still trying to recover from their ‘lost decade’ and the U.S. economy in shambles–especially since billions of public money was poured in the that giant cash-hole that is the U.S. auto industry–it makes sense that the unusual adversarial stance taken by U.S. politicians toward Toyota might be a veiled attempt to destroy the market share of that company in North America. By extension, that is economic warfare and I am not alone in thinking that way. For more, search for “Toyota Economic Warfare” on your favorite search engine or you can start here:
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Sorrowland, empire, and the Great Contraction
Oh my… I have not been very active on this blog as of late. It’s not for a lack of reading and/or thinking but more because what I have been reading and thinking about lately has been somewhat depressing and not something that one would want to share.
I just came across a most interesting website and wanted to share a very interesting article on another interesting article. The first is located at The Daily Bell: “Buffet’s Partner Says America Is Finished.” The second is the article penned by ‘Buffet’s Partner’: “Basically, It’s Over: A parable about how one nation came to financial ruin.” By Charles Munger (Slate.com). (By the way, I find The Daily Bell to be a very interesting website and plan to include this in my daily web-reading.)
Now, surely the titles of the two articles are using just a little hyperbole in order to grab attention, and I would also add that if the U.S. were indeed to unravel or is finished, it will take a lot of other countries in this globalized world with it (including Canada). In fact, the authors of the first make the interesting point that the U.S., as an empire, would in reality include the U.K. (I would add that it would also include Canada, since we are a major ally and trading partner). But even though the authors of the first article disagree somewhat with Munger (the author of the second), they are in reality only adding more nuance and detail.
Munger’s Slate article is a parable of a country that finds itself in dire economic straights similar to what the U.S. has been going through in the last few decades. Munger warns that the fictional country, if it continues down its fiscal path, would eventually turn into ‘Sorrowland.’ Of course, Munger’s partner, the famous Warren Buffet, penned a similar parable a while back warning of very similar things.
As I mentioned, the authors at the Daily Bell offer a more nuanced and detailed version and two paragraphs particularly caught my eye:
The problem with Munger’s point of view – from OUR point of view – is that is seems to leave out a lot of pertinent history. We would argue that the problems America faces go back a long ways. They have to do in fact with the creation of the Federal Reserve, the graduated income tax, the growth of the federal government, the empowerment of the executive branch, the loss of power of the states (which began after the Civil War) and the rise of America’s mighty military industrial complex which has supported the generation of nearly 1,000 military bases around the world.
America is truly an empire, though one can make the argument it is a bifurcated empire that includes Britain as well. One can also make an argument that an intergenerational power elite has worked patiently to hollow out what once was a republic with an eye toward creating a larger, international structure supported by America’s military might. It is this perspective that we find lacking in Munger’s parable.
Sorrowland/Empire. I would agree that that is what we are seeing struggle at the moment and it is not just the U.S. or the U.K. Most large powerful countries (and not just ‘Western’ countries) are looking like shadows of their formal selves (and not just before this recent financial crisis hit). Most of the powerful counties on the planet have been living off of a financial system that produces little more than monopoly money. Carmen M. Reinhart, Kenneth Rogoff call the current situation, the Great Contraction (I just finished their very interesting book a couple of days ago). But one aspect that I think is missing from all the above analyses is that the 20th century was basically the century of cheap energy (for those countries who controlled it) and that the 21st century will be marked by increasingly scarce and expensive energy. More succinctly, I think that the analyses of all the authors listed above are furthered by something that they don’t acknowledge: peak oil or the end of the era of cheap energy.
The easiest way for me to visualize this is that the early 1970s were a turning point for the U.S. It reached peak production in terms of domestic oil production (the backbone of its economic and military strength for almost a century) while it continued and expanded its efforts in the Cold War and military and economic expansion. It is not surprising that real purchasing power for U.S. citizens has been stagnant over that time but that the rise of the financial industry (think Nixon fully abandoning gold and the Bretton Woods agreements) and the rise of credit both exploded. So, while the petroleum that fueled the U.S. economy and empire began to gradually decline, it was propped up (for a time at least) with monoply money created by the federal reserve (and then multiplied by banks and other financial institutions) and giving it out freely to everyone in the form of credit (cards).
So, it should not be surprising that the ‘house of (credit) cards’ and the ludicrous belief that home values would magically grow forever would come down. It should not be surprising that it is financial firms (frauds and thieves, more accurately) like Goldman Sachs are the only ones making money these days… too bad it’s just monopoly money.
Sorrowland indeed. We will soon realize than Sorrowland is not just a country but the entire globe.
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2010: The year we realized that the modern economy is nothing but a giant Ponzi Scheme
I really need to start posting more uplifting items… but, as usual, I spent my lunch hour reading some of the news and financial sites I frequent and finally had confirmed what I have been suspecting for some time: that the modern economy is nothing more than a giant ponzi scheme. Of course, I am not the first one to come to this realization but even today I am really surprised at the level of negativity by those who would appear to know what is what when it comes to fianances and economics (and, of course, who are willing to discuss it).
It might be that modern economies are nothing more than the creation of a financial elite or cartel (and the politicians who empower them) which would include the U.S. Federal Reserve but it goes well beyond the U.S. and the 20th Century. I suspect that the true underlying cause was petro-wealth (cheap, petroleum-based energy) which was plentiful for most of the 20th Century. The bounty allowed developed nations like the U.S., Japan, Britain, Canada… to build a modern, growth-based economy where much of what was promised to citizens would actually be realized in the future. Promises and expectations blossomed.
Today, we are entering an era that will be characterized by expensive, hard-to-access and hard-to-refine energy. However, the promises and expectations are absolutely dependent upon vast quantities of cheap (20th Century) energy. And so, quite simply, something has to give. Unfortunately, it will most likely be our modern, consumption-based, cheap-energy-dependent, and put-off-until-the future economies.
And what will this mean? In some ways, I am sure it will affect your average citizen and his or her current lifestyle. But here is where I am less doom-and-gloom. While it will no doubt affect you and me (assuming you and I are both ‘average’ citizens of a developed country), I am sure it is going to affect the elites much more than anyone else. It will also affect governments (who are or who represent the elites) who tax away wealth and squander it (think of all the wars fought over the course of the 20th Century) or hand it over to those same elites (think of all the financial bubbles, printing of money, and corporate welfare/bailouts). For them, the Ponzi Scheme will no doubt end soon… and let’s hope it is a rather gradual and peaceful transition.
At any rate, these are some of the lunch-hour (or so) readings that influenced this post:
What Does Japan’s Implosion Mean For the Rest of Us? by John Rubino on January 26, 2010
Bernanke’s Doom Loop by Gary North
Banking on the State, Piergiorgio Alessandri & Andrew G Haldane, Bank of England, November 2009
On the end of the era of cheap energy, see:
Aleklett, Kjell, Mikael Hook, Kristofer Jakobsson, Michael Lardelli, Simon Snowdon, Bengt Soderbergh. “The Peak of the Oil Age: Analyzing the World Oil Production Reference Scenario in World Energy Outlook 2008.” Energy Policy, vol. 38, no. 3 (March, 2010): 1398-1414. http://www.tsl.uu.se/uhdsg/Publications/PeakOilAge.pdf
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