Relevant and even prescient commentary on news, politics and the economy.

Changing fresh water patterns


Changing fresh water patterns

Some of the developing world’s largest rivers are drying up because of climate change, threatening water supplies in some of the most populous places on Earth, say scientists.

Researchers from the US-based National Center for Atmospheric Research (NCAR) analysed data combined with computer models to assess flow in 925 rivers — nearly three quarters of the world’s running water supply — between 1948 and 2004.

A third of these had registered a change in flow and most of them — including the Niger in West Africa, the Ganges in South Asia and the Yellow River in China — were dryer.

“Reduced run-off is increasing the pressure on freshwater resources in much of the world, especially with more demand for water as population increases. Freshwater being a vital resource, the downward trends are a great concern,” said Aiguo Dai, a scientist at NCAR and lead author of the research.

Rivers are losing water for a variety of possible reasons, say the researchers, including the installation of dams and the use of water for agriculture. But in many cases the decrease in flow is because of climate change, which is altering rainfall patterns and increasing evaporation because of higher temperatures.

“The prospects generally are for rainfalls, when they occur, to be heavier and with greater risk of flooding and with longer dryer spells in between, so water management becomes much more difficult,” Kevin Trenberth, head of the Climate Analysis Section at NCAR, told the UK’s The Guardian newspaper.

Flow has increased in some developing world rivers. The Brahmaputra in India and China’s Yangtze River are stable or have higher flows than in the past but this might not last long, say the scientists, as the Himalayan glaciers that feed them are disappearing.

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Misunderstandings about Tax

by Linda Beale, A cross-post from ataxingmatter

Misunderstandings about Tax

Today I was skimming the Washington Post, a newspaper that I don’t read as regularly as the Wall Street Journal or the New York Times, but find especially useful in providing insight into both Beltway thinking and beyond-the-Beltway thinking. I read a random mix of politics, economics, and national news. Today, with Specter’s recent defection from the GOP fresh on my mind, I thought it would be interesting to read the Akers story , Smerconish, Nakedly Defending Specter, Wash. Post, Apr. 30, 2009, about the radio world’s response to Smerconish, a moderate Republican radio host who has defended Specter and criticized the radical right wing takeover of the GOP.

What I found of particular interest was a commenter, who proclaimed what he termed the key ideas of the Republican party (a litany of being in favor of life instead of death, strong defense, and the other slogans of the party that hide often contradictory leanings–after all, a key element of war and the death penalty, both of which have been “favored” in various ways by Republicans, is death). Included in his list was “fair taxation with representation.” After various responders pointed out a number of both internally contradictory statements in the list and inconsistencies between this list and the actual policies pursued by Republicans in high office from Reagan to Bush II, the commenter (calling himself “No-bama”) explained further. It’s the explanation that is most worrisome, for two reasons: because the tone is one of (usually belligerent) assertion of opinion as fact, as in “faith-based initiatives are proven to reduce government”; and because it demonstrates the way that misleading or false statements, repeated over and over, come to be considered factual, as in “cutting taxes has ALWAYS INCREASED tax revenues – look it up.”

I’m not sure how one would reach a definitive determination of the role of faith-based initiatives in expanding or decreasing the size of government. However, I do know that the concept required creation of a bureaucratic infrastructure, including a director of the Office of Faith-Based Initiatives and funding to support that office. The duties of the Office are to make it more likely that religious groups will get government funding for their projects. All of that facially suggests an expansion of government, not a diminution, as government’s scope broadens to include encouraging religious organization’s projects and their involvement in government grantgetting. The assertion, stated as a clear fact, appears likely to be clearly wrong. Needless to say, the same goes for the statement, asserted by the commenter this time in bold caps to show just how obviously true the commenter considers the statement, that cutting taxes increases revenues.

Until we stop just repeating what we hear as though it were factual, we can’t expect to hunker down and do the tough work of figuring out how to create a better health care system, make fundamental changes in the way that financial institutions work, so that they quit draining the economy into their own pockets, or revamp the tax laws so that they incorporate progressive principles that impose appropriate burdens on those who have the greatest incomes because of the enormous benefits of the system operating on their behalf. Congress, in spite of permitting trillions of dollars to go to the aid of Big Banks and their shareholders and creditors (often other big banks, as in the case of AIG’s credit default swaps), still hasn’t found it possible to pass a simple law to permit ordinary Americans to have their mortgage loans modified in bankrutpcy or to prevent the Big Credit Card Banks from continuing to charge usurious rates for credit to the least able borrowers, along with exorbitant fees for effortless services and changing rates on amounts already borrowed. A large portion of the stimulus bill was wasted in useless tax cuts, including the AMT patch for upper middle class America and more business breaks for favored industries. This has to change. How to accomplish it, however, is not easy to surmise, when people still think that Arthur Laffer’s napkin diagram is an established theory of tax law.
by Linda Beale

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Define Rich, part II: Rat Race and the American Dream

by Divorced one like Bush

There were some good responses to the first posting that I agreed with. They were, could we say, jumping the gun as to how I want to proceed, however. So, with this post I want to continue with looking at phrases/concepts/thoughts that are a part of, or were a part of any discussion regarding “rich”.

Have you missed the phrase: Rat Race?
Wonder why we ask: Is the American Dream dead?
Could it be that in an economy where “rich” is not or will not be defined, the race is won and the dream obtained? After all, we’re all rich now! Sodahead specifically asked the question.

We have polls regarding the Dream. From the group: Change to Win, the 2006 American Dream Survey:

A majority of American workers feel both the country (63%) and the national economy (63%) have gotten off on the wrong track. Just 26% of workers say the country is headed in the right direction, while 28% say the national economy is headed in the right direction.

The most widespread serious worries of American workers today include the prospect of not being able to afford health care when they need it (a serious concern for 77%), not having enough money for retirement (77%), losing their health care benefits (72%), not being able to keep up with bills (69%), and having their standard of living slip further and further (68%).

When asked the open ended question of what the American Dream means to the them, respondents say it means having a good job and being able to make a comfortable living (37%) while notably, almost no one mentions being wealthy or affluent (1%).

From New American 2004 survey report:

More than 4 in 5 Americans (85%) say that our society’s priorities are out of whack.
Nearly all Americans (93%) agree — more than half agree strongly (52%) — that Americans are too focused on working and making money and not enough on family and community.
More than 4 in 5 Americans (83%) agree that they wish they had more of what really matters in life.
Less than 3 in 10 say that having a bigger house or apartment (29%) or nicer things (16%) would make them much more satisfied.

In this survey is a chart of phrases asked to be rated in how well it describes the American Dream and importance for society on a 10 point scale. They report the percentage that rated each phrase at 8 or higher. The following are significant for this discussion:
“To consume or buy what we want”. Only 55% said it described the Dream and 49% said it was important.
“Achieving an affluent or wealthy life style”. Only 49% said it described the Dream and 44 % said it was important.
These are low numbers compared to the other phrases.

Thus, between these two surveys, the idea of getting rich so that you can consume as you please is not a big part of the Dream. In fact this survey found:

Over the past 5 years, nearly half of Americans (49%) say that they have voluntarily made changes in their life which resulted in making less money.
What kinds of changes have Americans who are downshifting made? One in three Americans (33%) say they have ”quit working outside the home” and more than 1 in 4 say they have either changed to a lower paying job (28%) or reduced their work hours (26%).

That brings us to the phrase: Rat Race.

A rat race is a term used for an endless, self-defeating or pointless pursuit…The rat race is a term often used to describe work, particularly excessive work; in general terms, if one works too much, one is in the rat race.

Now, consider that there were 38.8 million hits for “is the American Dream Dead” but only 3.98 million hits for “rat race”. “Houston, we have a problem.” People know what the American Dream is and they know we ain’t livin’ it, BUT, they have no idea what they have been living.

In that 3.98 million hits, only 1 MSM article came up early regarding “rat race” and how to get out of it. Early was page 2, second listing. Contrast that with the dead American Dream search having the first 3 hits being MSM articles.

This is how the article from MSN Money Staff, 7/20/07 begins:

Looking to get off the paycheck-to-paycheck treadmill or to drop out of the rat race altogether? Here’s what you’ll need: a solid plan for how you’ll spend your time and a way to either earn dramatically more or spend much, much less.

This is not an impossible dream. In 2004, 7.5 million U.S. households had $1 million in assets, not including their homes. The number of people worth $5 million has quadrupled in the past 10 years and numbers nearly 1 million.

So, the way to get out of the race is to win the race? Obviously they have not read what Americans believe the American Dream is. Or, could this article be getting at just how expensive it is to have the American Dream? Or, are they supporting the impression from the surveys that the chances of getting the Dream are slim and less so for the next generation? After all, what is 7.5 million households compared to a projected 110 million by 2010?

If we can not conceptualize (though we used to) what it is we are doing while having a feeling that we don’t like what ever it is we are doing because it is not part of the American Dream, then how can we define rich? However, if you are rich, and you make money from money, could there be any better environment than to have the masses unable to recognize their dilemma? Talk about putting your capital to work! Just as there is a campaign to not define rich, there has been a campaign to make the American Dream synonymous with the goal of making money. For instance, the purpose of business was not always defined as making money, however that is the pat answer returned today. (I’m going to write about this too some day.)

Just read that MSN article again. Nothing in there gives the reader permission to simply down size, to get off the rat race. No, you have to make sure you have enough money. They even suggest doubt about your being able to be happy with less. And, in the end you may already be rich. There closing sentence:

On the other hand, you may not be as poor as you think. Check out GlobalRichList to get a different take on how you compare with others.

The goal is to make money we are told. You know, the rhetoric about the lazy people, those wanting more of the American Dream than they are willing to work hard enough for? You don’t want to be like them! Yet, the pursuit of this goal is the incarnation of the concept “Rat Race”.

We have had our ideas about our purpose in and of life reduced to the concept of “rat race”, while having the concept removed from our daily lexicon so that we can’t even voice what we are experiencing. Our American dream has been reduced to “an endless, self-defeating or pointless pursuit” while we have been losing the words to voice the experience. Did you know, that the reason we can not remember our very early years is because as infants, we do not have use of language and thus can not form memories. You need words and their understanding in order to structure and reason your life out.

Defining “rich” is part of understanding the American Dream. The Dream is a life style within the framing of equality of power. The American Dream is the goal. The goal has always had a dollar amount tied to it. Because the Dream cost money, it is vulnerable to manipulation by those of unequal power: the rich.

To be continued.

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May Day MayDay

What do you mean “we’re broke”?

The first encouraging sign in a long time from the Fed and the Treasury is in the link above. After it became common knowledge that the “stress tests” were only going to be window dressing, the question on everyone’s mind became only “How much more is it going to cost the American taxpayer to keep subsidizing the guys who got us into this?” (Brad DeLong’s mileage varies, though I note that Mark Thoma may be coming around, after his initial assumption that his money would be Used for Good and the System would be Fixed—a venial sin at the most.)

The fact that Geithner/Summers and PBandit/Lewis are “haggling over the price” means there is still some reality reaching over the seawall that is the Obama Treasury Department.

Speculation below the fold

Or maybe this is the reality going deeper. Wells Fargo, which got Suckered by Charlotte with WalkAllOverYa? Or a Major Regional, say, SunTrust?

The last time I raised the spectre of SunTrust, Sammy questioned me and someone named Jessica suggested (in no uncertain terms: “SunTrust is one of the leading banks in the industry and is in NO NEED of bail out money. The FDIC Corp has trusted in SunTrust enough to reach out and ask for some help bailing out the smaller banks that are on the FDIC Watch List.”) that I must be mistaken.

At the time (29 Oct 2008), SunTrust had received $3.5 Billion, “more than BoNY/Mellon. More than BB&T or Fifth Third or Zions Bancorp.” They took another $1.4 Billion at year-end, so they’re up to $4.9 Billion, more that $1 Billion more than Capital One, which is one of the banks that is always spoken of as being endangered.

It doesn’t appear to have helped. SunTrust has been downgraded twice by S&P this year.

As for that help they’ve been giving the FDIC? Dr. Black notes that an 11th bank in Georgia has gone under since March of last year. No other state—not even California—is in double-digits yet.

So I won’t be surprised if SunTrust needs “additional capital.”

Another possible contender from the regionals? PNC Financial Services, which came out of nowhere to borrow $7.6 Billion at the end of last year. And, unlike SunTrust, there haven’t been any bank failures in the Greater Pittsburgh area (which surprises me more than it probably does Rusty).*

Going back to what Hank Paulson said, “these things are never over until you have a couple of institutions go that surprise everyone.” No bank on the Endangered Species list so far has been a Surprise in that sense; the delay of the “stress test” announcement until next Thursday, May 7th, may well mean that we will see one of those surprises getting capital.

It doesn’t make it good, right, or sensible, but it does at least hint at the possibility that things might, eventually, start getting better.

*In fact, today’s in upstate New Jersey is the first on the East Coast since at least January of 2008.

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International Workers’ Day


May 1st, International Workers’ Day, commemorates the historic struggle of working people throughout the world, and is recognized in many countries (66?) but not the United States, Canada, and (*******). This despite the fact that the holiday began in the 1880s in the United States, with the fight for an eight-hour work day.

Update: My apologies to South Africa and Nelson Mandela, who instituted celebration of the day in 1994…hat tip reader Kevin.

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