Archive for September, 2008
Wall St versus the planet
Wednesday, September 24th, 2008Wall St versus the planet
The collapse of the investment banks and the destruction of ecosystems. An intertwined tale. Greg Gerritt 9/24/08
The Collapse of the investment banks and the corporations that insured them against their own greed is a startling turn of events. The masters of the universe, the wealthiest crew on the planet, ran out of productive things to do, started creating new ways to manufacture money out of froth, whipped the froth into a frenzy, made billions, and had no idea what to do except ask for big hand outs from the government when the froth collapsed.
The answer of the bought politicians is to give buckets, no boatloads, of money to the same people who created the big mess that threatens the lives and livelihoods of people all over the world, and ask them to do it again, only this time to be a bit more careful in the name of keeping everyone employed.
People are reacting to the Bush agenda bailout in nuanced ways, mostly denouncing the specifics, which are horrible, but generally stating that a bailout of Wall St is the right approach, if only done this way or that. Critics on the left are denouncing it saying if the tax payers are buying all this stuff, they ought to get the rights associated with community ownership in saying how it will be run, and while the critics on the left are correct, if we own it, it ought to be run in ways that are open to the community’s input and benefit the community, but the analysis still lands short of what is needed to actually resolve the problem.
What most observers seem to be missing is the idea that the fundamentals of the economy have changed over the years, primarily the situation in the realms of natural resources and ecology on planet earth. The reality is that in an economy based on ever faster growth it is becoming harder and harder to make fortunes in the on the ground economy. Too many ecosystems are disappearing and collapsing, too many natural sinks are full, minerals are becoming harder and harder to recover, and ever greater quantities of almost anything are becoming very difficult to find.
We all know about peak oil, the idea that from now until forever it will be harder and harder to bring more barrels of oil out of the ground on a daily basis, and that a civilization built on cheap energy is in serious peril. No one is starting new oil companies, though there is money being invested in new drilling equipment in the ever more desperate efforts to drill ever more difficult oil fields for ever diminishing pools of oil. Have we considered the role of forests in our economy, from paper, to lumber, to furniture, to fire wood, to a place of recreation, to a source of food? That forest products still under gird civilization, that deforestation is one of the primary causes of the collapse of economies through time? Have they looked at what is going on in the forests? How they disappear before our eyes, even in a place like New England in which forests return easily and had partly done so from previous deforestation? The only cut and run forests left in the world, the forests that in the past would have provided the raw materials to fuel the economic recoveries from Wall St insanity, are the two hardest forests to work, tropical rainforests and the far north. Then consider the massive amount of ever more expensive oil it takes to exploit these forests, and the greenhouse gas emissions that come from deforestation, and consider whether any natural resources will be able to help Wall St end this latest speculative mismanagement monster.
You can not start the next Great Northern Paper, it would be a joke. Fisheries all over the planet are overfished and collapsing. In agriculture, think Monsanto and patented seeds, an attempt to make a fortune by cornering markets rather than develop global agriculture. Manipulation ballooned because all the farmland is already in production, and much of it is already severely depleted and eroded. Using genetic engineering, patented seeds and no longer allowing farmers to save their own for next year’s planting, bait and switch and watch Indian farmers commit suicide appears to be the business model these days. Then think about higher prices for food as the ethanol craze gets hotter. The airline industry is going broke, funny how that happened right about the time of peak oil. Are we actually seeing the demise /transmogrification of the automobile industry? It appears to be rapidly going bust in the US. One might say this is because there is more money to be made in the mental gymnastics economy and that corporations in other countries do not have to pay for retirees health care costs, but an idea that needs to be discussed much more is that there are physical limits that we are running up against on Earth and it will be harder and harder to make money in the production of things or in shipping them.
If those seeking great fortunes can no longer rely on actual production to make money they seem to resort to the financialization of the economy, the use of innovative trickery to manipulate investments, to funnel more resources to them and their friends. More and more money has flowed into the financial sectors of the economy, aided and abetted by politicians at every turn handing over big subsidies for local jobs in the industry. What the “smartest guys in the room“ came up with this time for their aggrandizement was vastly inflated housing prices, partly because their friends in government helped create the policy of building no housing people could actually afford. This was then followed by selling unaffordable houses to people who had few other housing options, and then turning debts by people who could not afford the payments after the interest rates jumped on their bait and switch mortgage into investments for speculators. It was based on pretending the housing boom would last forever and therefore this was a very safe way to invest money. It is the economy of turning everything into an investment because the buddies of the rich in government will always say we can not afford to let the wealthy, the powerful, the providers of campaign funds, and the investment that drives our ever MORE fail. Just the little guy is allowed to fail.
The apologists for the the failed economic model will point out Microsoft, Dell, Google as the future of the economy, but you can not eat a google or software. But how about Windmills, solar panels, and geothermal electricity as clean and essentially boundless and a place to see major investment and fortunes? Or pharmaceuticals, plastics, communications and nanotechnology?
Yes, we shall have some Green Jobs building windmills, some jobs in modern manufacturing that seeks to dematerialize manufactured products, but ultimately unless we actually stop the shenanigans and start to really try to live within our means on Earth, the collapsing ecosystems will push those seeking fortunes into ever wilder and stranger financial instruments to make more money and hold on to their power, triggering financial collapses faster and faster followed by more funny money bailouts that we pay for so they can prop up the economy of more a little longer. Are we hoping for some miracle like a second planet to exploit? Yes, we can eat the planet faster for a little longer. Buckminster Fuller thought we might figure out how to make that transition, turning into a truly sustainable economy as we drained the last of the fossil fuels. But he also knew it would take sharing and an end to war as well as the end of the fossil fuel economy, and he figured it was a close race between a thriving sustainability and the demise of modern industrial civilization. Can we make that transition if we continue to let speculators steal us blind and then get bailed out by the government on the taxpayers dime? Can the banks continue to rob the people without spending ever more money on war, both to steal resources and to prevent outbreaks of people power when people get tired of the robber barons?
Today, no one can prove that the ever more creative financialization of the economy is driven by ecosystem collapse, that the collapse is constraining investments in actually meeting the needs of the 6.7 billion of us that inhabit the planet, but the trend seems pretty obvious when you think about it, so maybe we ought to talk about this a bit more before we bail out Wall St with $700 billion that could heal ecosystems, generate clean energy, feed people, and before we feed the war machine to defend what Wall St seeks to impose on us.
There is a big hole in my argument. Currently capital flows fastest to short term investments, quick buck schemes. One can not say that one can not make a fortune in the wood cutting business, there are still people getting sweetheart deals with tin horn dictators, and war criminal presidents and making money cutting wood despite the collapse of forest and forest ecosystems around the world and the moving of their residents to shanty towns. It is likely that over the short term people will expand some resource based businesses, the planetary resource base still exists, it is still large compared to the demand, even if it is shrinking, depleting, dieing. But it is still a diminished investment possibility. Yes, one can found the next mental gymnastics giant, a google or microsoft, but for the most part fortunes are made in the financial industry, the phony manipulation of money, and the rules the politicians write are designed to help that speculation rather than rein ii in. I can not prove that the financialization is currently driven by resource depletion. I am not sure if the right things are measured to prove it, and ferreting out the human motives behind any particular investment is impossible. But we can clearly see the sinks fill up, the forest, fish, soil and oil disappear and the smaller and smaller percentage of the economy based on actual production of tangible goods. We can not yet prove the ever more highflying gymnastics of the financial sector is related to running into the limits of the earth, but it is what we see, it seems the most logical explanation for what is going on, and it gives us fair warning of what lies ahead unless we return our economy to a sound environmental footing.
Rural economy drafts for McKinney 08
Tuesday, September 9th, 2008Some short essays. I am drafting material for the McKinney Green Party campaign for the presidency that I send along for editing and vetting by the campaign. These are ones I did in response to a questionnaire sent to the campaign by an Illinois farming magazine.
1. What steps could the administration take to help economically revitalize
rural America?
The prosperity of rural America is primarily related to the health of the
ecosystems these communities depend upon. Communities dependent upon
logging require healthy forests to supply wood to cut. Farmers need
abundant water and healthy soils. Those who fish require clean water and
healthy fish stocks. Begin with the health of the ecosystems, the health of
the resource base. I have consistently supported healthy forests and the
preventing of over exploitation of the National Forests so that short term
profit is not given priority over long term prosperity. I have supported
legislation to keep Black Farmers and small farmers on the land and
supported organic agriculture.
Betting rural prosperity on corporations, forest and agribusiness, has been
relatively unsuccessful. The short term gains for the corporations have
turned into long term depressions in rural communities, with forest
depletion and soil erosion preceding the migrations out of the community.
Betting on the fossil fuel energy sector and mining have brought similar
boom bust cycles and struggles to our communities, and left polluted and
degraded landscapes. Leaving the oil in the soil and stopping the blowing
up of mountain tops to get coal is the proper approach.
The economy of rural places will be better only when the resource base is
healthy. The place to begin is stopping global warming and creating a
carbon fuel free future. At this point the weather and water supplies for
agriculture are severely threatened by over use and global warming. We can
not afford anything other than the near complete abandonment of fossil
fuels, and even biofuels should be limited in their use. But wind and sun
we have, and it allows the land to continue to provide other resources as
well. Not only be the place of harvest, but also be the place of
manufacture of wind mills, as shipping costs will be an ever greater factor.
The future of farming is organic, smaller scale, and much more oriented
towards building soil and providing truly healthy products . This will
employ more people per acre, revitalizing rural populations and community
centers. Better utilization of grasslands, focusing more clearly on
improving the carry capacity of the land, rather than continuing to degrade
it by overgrazing, will improve quality for consumers and the quality of
life for those raising critters.
Recent work on how abundant fish were in the past and how much food was
available in the oceans teaches us how degraded and depauperite fishing is
today. Over fishing continues down the food chain and towards ever smaller
fish, whereas if we just gave the fish a chance to rebuild their populations
for a few years the overall catch could go up in the long term, and the
ecosystems would be more productive.
The first place everyone else starts this discussion is with the internet,
how distance is much less important. Yes the internet is important,
communications with people around the world helps everyone, and the exchange
of knowledge can make a major difference in people’s lives but it will still
take healthy ecosystems as well as creative people to bring prosperity to
America’s rural communities.
2. How would you structure an energy strategy for the United States, and why is such a strategy important? Is there a role for biofuels?
The carbon dioxide content of the atmosphere is 380 parts per million,
whereas 250 years ago it was approximately 280 parts per million. The
physics is pretty clear. More carbon dioxide and other greenhouse gases
like methane in the atmosphere, the more heat will be trapped in the lower
atmosphere. Climate is already spinning out of control, just ask the people
who live near the Gulf of Mexico. We must dramatically change the way we
produce, distribute, and use energy.
Leave the oil in the soil and below the sea and stop blowing the tops off of
mountains for the coal. There must be a 90% reduction of fossil fuel usage
in the next few years so that we can start to bring carbon dioxide levels in
the atmosphere down below 325 parts per million.
Solar, wind, tidal, geothermal and a variety of other renewable and carbon
free fuel sources are the future. Transportation will be diminished. We
are already seeing that as millions of Americans are priced out of air
travel and commuting to jobs in cars becomes an incredible burden. We must
restructure our communities to diminish the need to travel and ship goods,
producing much more of what we need locally, while developing clean mass
transit and freight systems for what we do need to move.
Biofuels are an iffy proposition. There may be some appropriate
technologies, possibly some of the new algae based systems or the harvesting
of wild grasses, but we can not allow ourselves to get on the treadmill to
carbon neutrality that biofuels may allow us to do, as we have to burn less
fuel than the atmosphere can absorb each year so that the CO2 levels can
gradually drop, CO2 naturally slowly degrading in the atmosphere over a few
hundred years.
3. How do you see the importance of bilateral and multilateral trade for
U.S. producers and other sectors, and how can we achieve greater export
potential?
In congress I consistently supported trade agreements that benefited
communities, workers, people on the margins of the economy, and ecosystems.
I did not support the corporate trade deals like CAFTA, NAFTA, and the WTO
as as these deals benefit are the wealthiest sectors of the economy.
The idea of ever greater exports also needs to be reexamined. Given a
climate impaired planet with a gasoline driven export system, it is quite
possible the export sectors of the economy will undergo massive changes.
Turning into something sustainable that produces things of value that either
are used locally, or can be sent around the world electronically.
Relocalization will be much more a key to prosperity for our communities
than will exports.
4. How would your administration balance environmental and domestic
economic concerns?
Nearly all of our domestic economic ills are visited upon us due to
mismanagement of resources and the over reliance on financial creativity to
prop it up an ever expanding economy. The ecology is the economy. Healing
ecosystems, growing forests, repairing damaged soils, cleaning rivers,
allowing fish stocks to rebuild, and completely decarbonizing our economy
and communities will lead to greater prosperity.
When actual costs are factored in, when corporations are not allowed to
transfer the costs of their misdeeds to the community (read taxpayers) a
Green economy will provide a good standard of living in healthy communities.
Continuing to allow short term wealth to dominate this practice and making
protecting the health of ecosystems and communities nearly impossible have
lead us to a time when the rich continuously ask for special treatment and
grant it to themselves, and then call it a struggle between prosperity and
and the environment. There is no separation. A healthy economy relies upon
a healthy ecosystem and the law should reflect that.
Mass Transit Letter to the Editor
Wednesday, September 3rd, 2008RIPTA is the RI Public Transit Authority which runs all the buses in the state. It just announced massive cutbacks in service.
9/3/08
RIPTA is between a rock and a hard place. At the time when we most need mass transit, and the public is more ready to use it than it has been since the automobile came to dominate our communities, the dependence of RIPTA upon the gasoline tax is becoming its undoing. Lets be very clear. As long as we fund mass transit with the gasoline tax we shall never be able to properly fund mass transit in the age of peak oil and global warming, and we sure as heck will never be able to fund our transition to a wind, tide, and solar electric powered transit system.
Thankfully members of our community are convening people to see if we can come up with an alternative to funding RIPTA via the gas tax, to see how we can speed up the development of a Green Economy in Rhode Island, and to see if we can imagine our cities without gasoline. If we are to return carbon dioxide levels in the atmosphere to those necessary to maintain a temperate climate in Rhode Island (Dr James Hansen of NASA says that is 325 parts per million as compared to today’s 380 parts per million) we must rapidly decarbonize our community. Green Party presidential candidate Cynthia McKinney sums it up pretty well when she says “Keep the oil in the soil”. Rhode Island must transform its transportation system to one that runs without oil, and is paid for without oil, and doing so will be the economic boon that those who gave us the gas tax paying for transit keep wishing they could create.
Greg gerritt
37 6th St
providence RI 02906
401-331-0529
gerritt@mindspring.com
Www.riprosperityproject.org
Greg Gerritt is actively participating in the McKinney/Clemente 08 Green Party presidential campaign