Pirate Finance

So it turns out that the Somali pirate industry has developed its own financial sector, improving the allocation of resources and pooling risk. It is possible for a wider cross-section of Somali society to share in the gains-from-seizure enjoyed by this industry, while successful buccapreneurs are rewarded with more access to capital.

The story is told in this piece from the Financial Post. It points out that pirate activity takes place in a region that is effectively autonomous, politically and economically; in fact, there is no other way to make a living in the pirate zone except to hold boats for ransom, especially with the loss of traditional fishing grounds. This means that piracy has had to absorb a broader demographic than just 20 year-old male desperados.

Pirate enterprises are listed on the local stock exchange, and shares trade among investors of modest means. The article doesn’t go into the analytical side of share prices, unfortunately. 72 pirate enterprises are listed, most of them start-ups. (Just as competitive incentives can lead to over-fishing, they can lead to over-piracy.)

The article concludes on this heart-warming note:

Piracy investor Sahra Ibrahim, a 22-year-old divorcee, was lined up with others waiting for her cut of a ransom pay-out after one of the gangs freed a Spanish tuna fishing vessel.

"I am waiting for my share after I contributed a rocket-propelled grenade for the operation," she said, adding that she got the weapon from her ex-husband in alimony.

"I am really happy and lucky. I have made $75,000 in only 38 days since I joined the 'company'."

Newsflash: AFL-CIO Calls for 35-hour Workweek

SHORTER WORKDAY — SHORTER WORKWEEK
RESOLUTION NO. 160

The time has come for wide-scale reduction in hours of work so that more people may be employed.

Even after recovery of production levels from the 1958 recession, there is persistent unemployment of 5 percent or more of the labor force. It shows no sign of receding from this intolerably high level. And a carrying forward of past trends indicates so-called normal unemployment will mount steadily until major steps are taken specifically to correct it.

Advancing technology is reducing the need for industrial manpower. More goods and services can be provided with fewer workers. From 1953 to mid-1959, total manufacturing output increased by 16 percent, but the number of production and maintenance workers was reduced by 10 percent.

Moreover, technological change and the accompanying increasing productivity are gaining momentum with the stepups in industrial research, uses of automation and new types of more efficient equipment, industrial applications of atomic energy, raw materials improvement, and other scientific advances.

Unless some of the benefits of the accelerating rate of technical advance are taken in the form of shortening of time at work, rather than in reduction of number of employees, unemployment will mount steadily. The technological progress is making shorter hours not only possible but essential.

In the past, progress reductions in standard worktime to the 10-hour day, the 6-day week, the 8-hour day and the 5-day week were each sharply resisted by industrial leaders as unthinkable changes which would prove disastrous for the moral fiber of workers and the economic and social well-being of the Nation.

Today, with few exceptions, there is a more realistic attitude, a general recognition that the present 8-hour day and 40-hour week are standards which should and will be reduced as part of general national progress. The only questions are: When? To what new standards?

We believe the appropriate and necessary time to start is now. The current combination of relatively high-level economic activity plus a great slack in the labor force presents the economic situation in which we can introduce, absorb, and immediately benefit from a general shortening of work hours.

Shorter hours are effective in staving off unemployment only if they are put into effect before unemployment pressures mount uncontrollably. If we delay we may get shorter hours, not as a constructive preventive measure but in an undesirable work-sharing, cut-wage form forced on us as a product of overwhelming unemployment. The soundest time to proceed is immediately, to meet the clear and present danger while we still have the flexibility afforded by a period of comparatively healthy economic activity.

Some may argue that a reduction in hours may not be the most efficient way to combat unemployment. Whether or not it is the plain fact is that other ways which may theoretically be more efficient are not doing the job.

We do not contend that shorter hours alone are the cure-all for all employment problems. We will continue to press with all the vigor at our command for the other public and private economic actions needed to generate sufficient steady economic expansion and growth in employment opportunities to maintain full employment.

But without a reduction in hours as a key element in an anti-unemployment program, the other measures we can realistically expect to be taken are not adequate to the task of controlling unemployment in an economy with as high a rate of technological advance as ours.

Shorter hours are of course extremely valuable for non-economic reasons as well. Socially and morally it is desirable that part of our progress be taken in reduction of the hours each worker is required to labor. A shorter workweek would enable greater opportunity and incentive for broadened social and cultural pursuits and development of bettered family life.

For many of the Nation's workers, increasing travel time to and from work as a result of congestion of cities and dispersal of industry has eaten into off-work time. Shorter hours of work would remedy such loss of personal time.

American labor is not wedded to any fixed form of hours reduction. Different affiliated unions may concentrate on different variations, either reductions in hours per day, days per week, per year, or per working life.

Additional paid vacations and holidays should continue to be negotiated but unless the amount of such paid time off now common is expanded, such improvements would provide only a very slight reduction in average hours worked per week over the year.

The more substantial reductions in hours needed are most readily available through reductions in the standard workweek. Such reductions are being sought and have already been achieved in bargaining by a growing number of unions. Experience accumulated with standard workweeks shorter than 40 hours have well demonstrated the practicability and desirability of shorter workweek schedules.

Collective bargaining alone, however, will not achieve adequate hours reductions as rapidly and widely as needed by the economy, for it is proceeding on an industry-by-industry and company-by-company basis.

Legislative action is required to meet the overall problem. Legislative action can provide hours reduction on the wide scale needed to achieve maximum beneficial results.

The existing 40-hour workweek standard of the Fair Labor Standards Act, first established 20 years ago, should be amended to provide for a standard 7-hour day, 35-hour week.

Even apart from the immediate need to counteract growing unemployment, this is a step required for reasonable forward progress. The changes in our economy in the past 20 years, the upturn in industrial technical advance, and the growth of the labor force combine to enable us both to establish a 35-hour standard workweek and to produce all the goods and services our Nation consumes.

The value of hours reduction is not an isolated phenomenon restricted to the United States. Workers in other lands will also gain from reductions in time they must spend at work.

The adoption of a strong international instrument in the form of a convention on hours standards will be before the International Labor Organization at its next annual conference. Most foreign workers still work longer hours than customary in the United States, but we are happy that wide progress is being made in hours reduction. As in the United States, the movement to shorter hours in other parts of the world is well warranted by the needs of workers and by advancing mechanization and technology: Now, therefore, be it

Resolved, That shorter hours of work must be attained as a vital means of maintaining Jobs, promoting the consumption of goods and converting technical progress into desirable increased employment rather than Into increased unemployment. Our economy should and can support concurrently both shorter hours and production of additional goods and services.

We call upon Congress to take as rapidly as possible the steps needed to amend the Fair Labor Standards Act to provide for a 7-hour day and a 35-hour week.

The AFL-CIO also urges its affiliated unions to press in collective bargaining for reduction in hours of work with no reduction in take-home pay.

We urge the International Labor Organization to adopt an international convention to aid in the needed spreading of improvement in hours standards around the world.

Community Jobs Forum

Thank you so much for signing up to hold a community jobs forum in your area. Just like the Jobs and Economic Growth Forum hosted by the President at the White House, these events are opportunities to gather ideas for continuing to grow the economy and putting Americans back to work. Hearing from working Americans and communities across the country means understanding what’s really happening on the ground, what’s working, and what’s not.

From what you have heard about the President’s Jobs Forum, what seems relevant to your community?:

That the whole affair seems glib, perfunctory, amateurish and superficial (if that's not too redundant). Fifty years ago, the Senate Special Committee on Unemployment Problems, chaired by Senator Eugene McCarthy, held hearings in 25 communities in addition to Washington D.C. over the course of four months

What parts of your local economy are working or thriving? What businesses and sectors are expanding and hiring?:

Well the bankers are doing just fine. And the military-industrial complex. The insurance industry and the big pharmaceuticals manufacturers. Not to mention the unofficial drug dealers. Oh yes, and the stock market is up, up, up.

What parts of your local economy are not working or thriving? What businesses and sectors have been hit the hardest? What are people struggling with the most?:

Youth, who have an unemployment rate of 18% and a U6 underemployment rate of around 30%.

What are the opportunities for growth in your community? What businesses and sectors seem poised to rebound? What do you see as the "jobs of the future"?:

Toxic waste removal. Cancer treatment. Greenhouse gas emissions. Species extinctions. With the polar ice caps melting there will no doubt be jobs in the future for people to build and operate dikes and drainage pumps around coastal cities. Swimming instructors?

What are the obstacles to job creation in your community? What could make local businesses more likely to start hiring?:

Stupidity. Leon Keyserling's NSC-68 brainchild. Supply-side voodoo economics. Larry Summers. More of the same.

What other issues and ideas should the President consider?:

Read this: Submission to the White House Task Force on Middle Class Working Families.

Describe your event:

A blog post.

PS: Your answers to the above questions are welcome in the comments. I will summarize the suggestions and submit them to the White House site.

Kurzarbeit or Trojan Horse?

Jacob Funk Kirkegaard for the Peterson Institute for International Economics raises an interesting objection to emulating European Kurzarbeit programs. Considering the Peter G. Peterson connection, Kirkegaard's recommended short term remedy might set off a few alarm bells among the "don't touch Social Security, it's not broken" crowd (but see also Bartik and Bishop at the EPI):

What conclusions should the Obama administration draw from Europe’s success with work-sharing measures?

With the US unemployment rate at 10.2 percent, it may be too late to expand "work sharing programs" from the current 17 state-level programs. Government-supported "work sharing programs" similar to those in core Europe work to preserve existing employment rather than to create new jobs. Hence such programs disproportionately benefit skilled workers, whom companies will prefer to "hoard," as they are more likely to find employment elsewhere if laid off. This type of insider-outsider dynamic has been very prevalent in Europe during the crisis, where increases in unemployment despite work sharing programs have been heavily concentrated among people on temporary work contracts. Additional protection for "insiders" is clearly not what the US labor market needs at the moment.

Instead, in the short term, Congress should implement a temporary holiday for Social Security and Medicare payroll taxes for new hires. This could provide an urgently needed, powerful broad-based and immediately implementable job creation stimulus for the US labor market.

Growthmanship: The Rock and the Hard Place

President Obama:

Now, if we can't grow our economy, then it is going to be that much harder for us to reduce the deficit. The single most important thing we could do right now for deficit reduction is to spark strong economic growth, which means that people who've got jobs are paying taxes and businesses that are making profits have taxes -- are paying taxes. That's the most important thing we can do.

Yes, what Obama says is correct, as far as it goes. Let us not forget, though, that the "9-point-something trillion- dollar" debt (not "deficit") got racked up on the premise that this year's deficit would stimulate sufficient economic growth to enable "siphoning off" enough of the growth dividend in tax revenues to repay the deficit. The siphoning off phrase comes from NSC-68. We're living in the perpetual growth Utopia conceived by Leon Keyserling: debt requires growth, growth requires deficits, deficits accumulate debt, debt requires growth... The only thing "siphoned off" in this vicious circle is the option of taking a portion of productivity gains as increased leisure.

As Eugene McCarthy and Bill McGaughey pointed out in their 1989 book, Nonfinancial Economics: The Case for Shorter Hours of Work,

"The main reason that leisure is in disrepute among Treasury Department officials is that they can't tax it. A proposal such as the shorter workweek, which would redistribute the burden of work and its income more evenly, would reduce the tax collector's take from a given volume of economic activity. Therefore it cannot be."

Few people recall that the "voodoo" of supply-side economics was supposed to be that it would induce (or compel?) people to WORK MORE HOURS. This was clearly stated by Paul Craig Roberts, Reagan's Assistant Secretary of the Treasury for economic policy in a Wall Street Journal oped published on March 19, 1981.

"For the supply-side policy to work, taxpayers don't have to respond to lower marginal tax rates by giving up vacations, going on a double shift and saving all their income. When you have a work force of more than 100 million people, small individual responses result in a large aggregate effect. If the average number of hours worked per week rises from 35 to 35.5, GNP rises by $24 billion."

Well, folks, supply-side economics "worked" in the sense that it ratcheted up the working hours. It didn't work in the sense of generating a revenue dividend large enough to pay for the lower marginal rates. Oh, well. C'est la vie, eh?

Given the 'choice' between the guns-and-butter swindle of Keyserling and NSC-68 and the Reagonomics supply-side swindle, I'd opt for none of the above. There IS an alternative. But it requires valuing people more over money and time over tax revenues. So it won't happen. Or it will only happen over the dead bodies of most economists. "In any highly developed discipline," McCarthy and McGaughey wrote,

"there is a tendency to become so specialized and refined that its respected practitioners appear to lose common sense. If medieval philosophers counted the number of angels that could dance on the head of a pin, some contemporary economists deal in equally strange and fictitious concepts. To many of them, it would seem, money is reality, while leisure is an empty spot in time devoid of wealth-producing activities. Although U.S. economists in the postwar period have paid much attention to the techniques of financial manipulation by which governments might keep the economy on a prosperous course, they have paid far too little attention to the way people actually work and live. That approach has produced its own set of problems, more than a few of which appear now to be coming home to roost."

LONG-TERM PROBLEM OF FULL EMPLOYMENT: the third phase

"As the third phase comes into sight; the problem stressed by Sir H. Henderson begins to be pressing. It becomes necessary to encourage wise consumption and discourage saving,-and to absorb some part of the unwanted surplus by increased leisure, more holidays (which are a wonderfully good way of getting rid of money) and shorter hours."

THE LONG-TERM PROBLEM OF FULL EMPLOYMENT

J.M. Keynes (May 1943):

1. It seems to be agreed today that the maintenance of a satisfactory level of employment depends on keeping total expenditure (consumption plus investment) at the optimum figure, namely that which generates a volume of incomes corresponding to what is earned by all sections of the community when employment is at the desired level.

2. At any given level and distribution of incomes the social habits and opportunities of the community, influenced (as it may be) by the form and weight of taxation and other deliberate policies and propaganda, lead them to spend a certain proportion of these incomes and to save the balance.

3. The problem of maintaining full employment is, therefore, the problem of ensuring that the scale of investment should be equal to the savings which may be expected to emerge under the above various influences when employment, and therefore incomes, are at the desired level. Let us call this the indicated level of savings.

4. After the war there are likely to ensure [sic] three phases-
(i) when the inducement to invest is likely to lead, if unchecked, to a volume of investment greater than the indicated level of savings in the absence of rationing and other controls;
(ii) when the urgently necessary investment is no longer greater than the indicated level of savings in conditions of freedom, but it still capable of being adjusted to the indicated level by deliberately encouraging or expediting less urgent, but nevertheless useful, investment;
(iii) when investment demand is so far saturated that it cannot be brought up to the indicated level of savings without embarking upon wasteful and unnecessary enterprises.

5. It is impossible to predict with any pretence to accuracy what the indicated level of savings after the war is likely to be in the absence of rationing. We have no experience of a community such as ours in the conditions assumed, with incomes and employment steadily at or near the optimum level over a period and with the distribution of incomes such as it is likely to be after the war. It is, however, safe to say that in the earliest years investment urgently necessary will be in excess of the indicated level of savings. To be a little more precise the former (at the present level of prices) is likely to exceed £m1000 in these years and the indicated level of savings to fall short of this.

6. In the first phase, therefore, equilibrium will have to be brought about by limiting on the one hand the volume of investment by suitable controls, and on the other hand the volume of consumption by rationing and the like. Otherwise a tendency to inflation will set in. It will probably be desirable to allow consumption priority over investment except to the extent that the latter is exceptionally urgent, and, therefore, to ease off rationing and other restrictions on consumption before easing off controls and licences for investment. It will be a ticklish business to maintain the two sets of controls at precisely the right tension and will require a sensitive touch and the method of trial and error operating through small changes.

7. Perhaps this first phase might last five years,-but it is anybody's guess. Sooner or later it should be possible to abandon both types of control entirely (apart from controls on foreign lending). We then enter the second phase, which is the main point of emphasis in the paper of the Economic Section. If two-thirds or three-quarters of total investment is carried out or can be influenced by public or semi-public bodies, a long-term programme of a stable character should be capable of reducing the potential range of fluctuation to much narrower limits than formerly, when a smaller volume of investment was under public control and when even this part tended to follow, rather than correct, fluctuations of investment in the strictly private sector of the economy. Moreover the proportion of investment represented by the balance of trade, which is not easily brought under short-term control, may be smaller than before. The main task should be to prevent large fluctuations by a stable long-term programme. If this is successful it should not be too difficult to offset small fluctuations by expediting or retarding some items in this long-term programme.

8. I do not believe that it is useful to try to predict the scale of this long-term programme. It will depend on the social habits and propensities of a community with a distribution of taxed income significantly different from any of which we have experience, on the nature of the tax system and on the practices and conventions of business. But perhaps one can say that it is unlikely to be less than 7 per cent or more than 20 per cent of the net national income, except under new influences, deliberate or accidental, which are not yet in sight.

9. It is still more difficult to predict the length of the second, than of the first, phase. But one might expect it to last another five or ten years and to pass insensibly into the third phase.

10. As the third phase comes into sight; the problem stressed by Sir H. Henderson begins to be pressing. It becomes necessary to encourage wise consumption and discourage saving,-and to absorb some part of the unwanted surplus by increased leisure, more holidays (which are a wonderfully good way of getting rid of money) and shorter hours.

11. Various means will be open to us with the onset of this golden age. The object will be slowly to change social practices and habits so as to reduce the indicated level of saving. Eventually depreciation funds should be almost sufficient to provide all the gross investment that is required.

12. Emphasis should be placed primarily on measures to maintain a steady level of employment and thus to prevent fluctuations. If a large fluctuation is allowed to occur, it will be difficult to find adequate offsetting measures of sufficiently quick action. This can only be done through flexible methods by means of trial and error on the basis of experience, which has still to be gained. If the authorities know quite clearly what they are trying to do and are given sufficient powers, reasonable success in the performance of the task should not be too difficult.

13. I doubt if much is to be hoped from proposals to offset unforeseen short-period fluctuations in investment by stimulating short-period changes in consumption. But I see very great attractions and practical advantage in Mr Meade's proposal for varying social security contributions according to the state of employment.

14. The second and third phases are still academic. Is it necessary at the present time for Ministers to go beyond the first phase in preparing administrative measures? The main problems of the first phase appear to be covered by various memoranda already in course of preparation. insofar as it is useful to look ahead, I agree with Sir H. Henderson that we should be aiming at a steady long-period trend towards a reduction in the scale of net investment and an increase in the scale of consumption (or, alternatively, of leisure) but the saturation of investment is far from being in sight to-day The immediate task is the establishment and the adjustment of a double system of control and of sensitive, flexible means for gradually relaxing these controls in the light of day-by-day experience

I would conclude by two quotations from Sir H. Henderson's paper, which seem to me to embody much wisdom.

"Opponents of Socialism are on strong ground when they argue that the State would be unlikely in practice to run complicated industries more efficiency than they are run at present. Socialists are on strong ground when they argue that reliance on supply and demand, and the forces of market competition, as the mainspring of our economic system, produces most unsatisfactory results. Might we not conceivably find a modus vivendi for the next decade or so in an arrangement under which the State would fill the vacant post of entrepreneur-in-chief, while not interfering with the ownership or management of particular businesses, or rather only doing so on the merits of the case and not at the behests of dogma?

"We are more likely to succeed in maintaining employment if we do not make this our sole, or even our first, aim. Perhaps employment, like happiness, will come most readily when it is not sought for its own sake. The real problem is to use our productive powers to secure the greatest human welfare. Let us start then with the human welfare, and consider what is most needed to increase it. The needs will change from tune to time, they may shift, for example, from capital goods to consumers' goods and to services. Let us think in terms of organising and directing our productive resources, so as to meet these changing needs, and we shall be less likely to waste them."

Why I am a Sadist

Come along, my friend, come along
Get aboard and ride this train
Nothing on this train to lose
Everything to gain

One lesson I have learned over the past 15 years is that those with "nothing to lose and everything to gain" are the last people in the world who will board this train. In 1967 or 68 I saw the film of the Peter Weiss play, Marat/Sade. A while later I found that a nearby library had an LP recording of the performance and I listened to it over and over, taking to heart the Marquis de Sade's speech to Marat as Charlotte Corday was trying to gain entry to his apartment:

SADE: that's how it is Marat
That's how they see your Revolution
They have toothache
and need their teeth pulled
Their soup's burnt
They shout for better soup
A woman finds her husband too short she wants a taller one
A man's shoes pinch
he sees his neighbor's shoes fit comfortably
A poet runs out of poetry
and desperately gropes for new concepts
For hours an angler casts his line
Why aren't the fish biting
And so they join the revolution
thinking the revolution will give them everything
a fish
a new pair of shoes
a poem
a new husband
a new wife
So they storm all the citadels
and there they are
and everything is just the same
the soup burnt
verses botched
a worn and stinking partner in bed
and all that heroism
which drove us down to the sewers
well we can talk about it to our grandchildrem
if we have any grandchildren

More Dean

On The Arena at POLITICO:

"In November, voters are going to be thinking about jobs. If the unemployment rate is over 10.0 percent, as is widely projected, there is little doubt that they will blame the Democrats. This means that he must start generating jobs quickly. Fortunately, we know how to do this. If the United States were to go the route of work sharing, using flexible employment credits to provide an incentive to employers to reduce work hours while leaving pay unchanged, then we can quickly get back to more levels of employment.

"The basic logic is very simple. If everyone works 5 percent fewer hours, then we need 5 percent more workers. That would translate into 7 million additional jobs in an economy with 140 million workers. We don't have to speculate as to whether this policy can work. We already know that it can. Germany has suffered a sharper drop in output than the United States, yet its unemployment rate is 7.6 percent, the same as it was before the downturn. In the United States we are experiencing the recession with 15 million people unemployed, in Germany they are experiencing the recession in the form of shorter workweeks and longer vacations.

"President Obama can also do something to make the (honest) deficit hawks happy. He can impose a tax on financial speculation. The sort of short-term trading that helped get us into these mess. A modest tax on this speculation can easily raise more than $1 trillion over the next decade, while helping to make the financial markets more stable.

"Resetting towards an agenda that creates jobs quickly and kicks Wall Street speculators in the face will make President Obama and the Democrats very popular next November."

A prelude to collapse is more unpaid work

Some economic thinkers believe that a greater level of unpaid work is an 'economic necessity' in our current time of crisis.

The long evolution to disorder that we now find ourselves in has incorporated the emergence of a grossly distorted system of currency exchange rates and a trading system where the essence of 'trade' has come to mean international cross-border transactions within the same corporations or network of corporations. Non-trade in essence.

Peter Dorman points out in his article 'The Financial Crisis Through the Lens of Global Imbalances' that "a substantial portion of the world’s capital stock is obsolete" now because its tied up with the dead-end dynamics of global imbalances and that exporters also possess capacity in many industries which far exceeds domestic demand. Peter goes on to say that the US failed to invest in capacity to reduce its dependence on the key non-renewable fossil fuel - oil.

William Catton long foresaw this crisis and describes it in his article entitled 'The Unrecognised Preview'

Both Peter Dorman and William Catton say that new institutions and policies are (or were) needed to accommodate more sustainable growth strategies. Catton pointed out that by the 1970s mankind had taken over for human use about one eighth of the annual total net production of organic matter by contemporary photosynthesis in all the vegetation on all the earth's land. That much was being used by man and his domestic animals.* It would require taking over more than the other seven-eighths to provide from organic sources the vast quantities of energy we were deriving from fossil fuels to run our mechanized civilization, even if economic growth and human increase were halted by the year 2000.

Catton concludes that we have been a long time in ecological overshoot. His predictions are frightening.

I hope Catton is wrong but whether he is correct or not in his pronouncements is irrelevant to the nature of the steps that I see are now needed to at least reduce destructive outcomes.

Vast new sustainable infrastructure whose design is guided by the principle of 'biogeochemical circularity' described by Catton is needed urgently. Systems of production need to move away from drawdown of non-renewable resources.

Such an immense transformation can't happen when many millions of people are unavailable to participate. Work, whether it occurs in a capitalist or ecologically sustainable paradigm, needs to be rewarded if it is to proceed apace. Whilst our production paradigms are now obsolete, the concept of paid work isn't.

* Odum 1971 (listed among references for Ch. 6), p. 55.

Dean Baker Press Release

Statement on President Obama's Job Summit

For Immediate Release: December 2, 2009
Contact: Alan Barber, (202) 293-5380 x 115

Washington, D.C.- Center for Economic and Policy Research Co-Director Dean Baker issued the following statement on President Obama's upcoming jobs summit:

It is encouraging to see the Obama administration return its focus to job creation. The stimulus bill passed last February was an important factor in stopping the steepest economic downturn since the Great Depression. The latest report from the Congressional Budget Office indicates that the ARRA of 2009 may have been responsible for creating as many as 1.6 million jobs, lowering the unemployment rate by as much as a full percentage point.

Nonetheless, the downturn has been markedly worse than was predicted last winter. The unemployment rate is at an unacceptably high level and is now projected to remain high long into the future, remaining in double digits for most of 2010, and not falling below 7.0 percent until late 2012. President Obama has rightly decided that this baseline is unacceptable.

There are four steps that can be taken to reduce the unemployment rate quickly:

1. Flexible employment credits to allow employers to shorten work hours instead of laying off workers: Each month, employers are laying off close to 2 million workers. If the government gave employers tax credits to shorten work time while leaving pay unchanged, it could reduce these layoffs. If the number of layoffs fell by just 10 percent, this would have the same effect on employment as adding 200,000 jobs a month or 2.5 million a year. Germany has used this mechanism to keep its unemployment rate from rising, even though it has experienced a steeper recession than the United States.

2. Support for education, health care and other vital state and local government services: Under budget pressure, state and local governments across the country are cutting these services and laying off workers. Aid from the federal government can allow these workers to keep their jobs and services to continue to be provided.

3. Direct job creation: There are parts of the country where the unemployment rate now exceeds 25 percent, with youth unemployment well above 40 percent. To prevent a generation of young people from being locked out of the job market, it is important to have public service jobs that can employ people immediately.

4. Right to rent for homeowners facing foreclosure: If homeowners facing foreclosure had the right to remain in their homes as tenants paying the market rent for a substantial period (5-10 years), it would provide substantial housing security to millions of families while stemming the nation's rising number of foreclosures. This policy could also provide an economic boost since it would free up money for millions of homeowners who are now struggling with mortgage debts that they cannot pay. This would in turn lead to a boost in consumption that would increase demand in the economy.

These steps would go far in reducing layoffs, fostering job growth and giving relief to the millions of Americans suffering as a result of the economic crisis.

Doggerel for Escalation.

A song for the war season. One critic, who wishes to remain anonymous, says that "This is great art, certainly, and of political import..."

"I Am Changing My Name To Lyndon"

[To the tune of “I’m changing my name to Chrysler” by Tom Paxton.]

[With many deep apologies to Tom Paxton. Some wide swaths of lyrics were stolen outright from him. Plagiarism, of course, is a crucial part of what Pete Seeger has called the "folk process."]

Oh, the price of gold is rising out of sight,
And GDP is in sorry shape tonight.
What charisma used to get us
Now won't get a head of lettuce.
No, my political future isn't bright.
But amidst the clouds I spot a shining ray,
I begin to glimpse a new and better way.
I’m finally getting traction,
Worked it down to the last fraction,
And it’s going into action here today:

Chorus:
I am changing my name to Lyndon,
In my White House down in Washington D.C.
I will tell that War-hawk salon,
That “what we did to Saigon
Would be perfectly acceptable to me.”
I am changing my name to Lyndon,
I am toeing the Wise Men’s Party Line.
When we blow a billion grand there,
And troops rush in without a pray’r,
Yes sir, they’ll be mine.

When the voters come screaming for my head,
Asking “why not health and welfare instead?”
They may try to yell and holler,
Since we wasted their last dollar.
As endless streams of Afghans turned up dead.
I’ll be glad to tell my troops what to do.
It’s a matter of a thousand lives or two.
It’s not mere colonization;
It’ll spread our civilization,
Makes me wish my terms number’d more than two.

Chorus.

Since the first amphibian crawled out of the slime,
We've been struggling in an unrelenting climb.
We were hardly up and walking
Before money started talking,
And contribut’d to campaigns all the time.
It's been that way a century or three;
Now it seems there is something new to me.
If you're a imperial Titanic
And your failure is gigantic,
The Pentagon will hang you on a tree.

Chorus.

Listening to the Past

In 1959 Senator Eugene McCarthy was chair of the Special Senate Committee on Unemployment, which held hearings outside of Washington and invited widespread testimony. "Although this committee considered the proposal to reduce work hours, it was not recommended because the committee members felt that other remedies ought to be tried first."

Thirty years later, McCarthy co-wrote a book with Bill McGaughey called Nonfinancial Economics: The Case for Shorter Hours of Work pointing out that the other, conventional remedies that were actually pursued had failed to arrest the steady upward creep of unemployment.

There was a note of pessimism to McCarthy and McGaughey's book in that they recognized that:

The main reason that leisure is in disrepute among Treasury Department officials is that they can't tax it. A proposal such as the shorter workweek, which would redistribute the burden of work and its income more evenly, would reduce the tax collector's take from a given volume of economic activity. Therefore, it cannot be.

When that simple truth is acknowledged, the whole debate about "jobs" takes on a different perspective. Or, as Larry Summers so eloquently put it, "It may be desirable to have a given amount of work shared among more people. But that's not as desirable as expanding the total amount of work." Jobs? We don't have to show you any stinkin' jobs!

The first pandemic since 1968 - a timeline for 2009

2009 – November 29th. The virus is mutating. No need to worry….at least for now, says WHO.

2009 – November 29th. More than 1,000 deaths in the past week.

2009 – November 28th. Swine flu vaccination is vital (The Guardian)

2009 – November 25th. China expert warns of swine flu virus mutation. “China must be alert to any mutation or changes in the behavior of the H1N1 swine flu virus because the far deadlier H5N1 bird flu virus is endemic in the country…”



2009 – November 20th. The swine flu virus activity may have peaked in the U.S. and some European countries, while other countries report sharp increases.

2009 – November 17th. Novavax, Inc., announced it will begin studies in Mexico on a new vaccine against H1N1. Initially, about 1,000 people will participate.

2009 – November 12th. Headlines state CDC officials calculate over 4,000 deaths (as opposed to about 1,200 currently reported) are due to H1N1 flu.

2009 – October 25th. Obama declares a national pandemic emergency in the US

2009 – September 17th. The new H1N1 virus was also detected recently in turkeys in Chile, proving that it has the capacity to jump to birds, another potential source for reassortment. + “the CDC recently launched experiments in the agency’s labs [University of Maryland] in which they infected ferrets with both the new H1N1 virus and the highly lethal H5N1 avian flu virus to see if they might “reassort” to create a new hybrid…. Other experiments conducted so far suggest the new H1N1 virus isn’t terribly prone to doomsday changes. Viruses can change through either mutation of genetic material, or by reassorting with another flu virus. The new virus is lacking certain characteristics that would allow it to mutate to become more virulent, said Nancy Cox, chief of the CDC’s influenza division…[BUT] “Influenza is really unpredictable,” Cox said

2009 – July 30th. Military to Deploy on U.S. Soil to "Assist" with Pandemic Outbreak

2009 – June 23rd. Experts were concerned about how the flu was developing in Australia and South America, said Joerg Hacker, head of the Robert Koch Institute for infectious diseases. "It's possible the virus has mutated…. According to WHO’s latest figures, more than 230 people have been killed by the flu worldwide from 52,000 confirmed cases, mostly in the United States and Mexico.

2009 – June 11th. WHO declares the global flu outbreak a pandemic and given the highest possible alert level. This was the first pandemic on this level since 1968. WHO declares swine flu pandemic – “WHO chief Dr Margaret Chan said the move did not mean the virus was causing more severe illness or more deaths.” The last pandemic was in 1968 when a million people were killed… There is concern that the virus might mutate in the southern hemisphere over its winter and become more virulent, but there's no sign of that yet.

2009 – May 5th. Why the flu may turn deadly

2009 – May 1st. What scientists know about swine flu

2009 – April 29th. WHO raised the worldwide pandemic alert level to Phase 5 – pandemic imminent.

2009 – April 27th. Swine flu outbreak threatens pandemic. “In April both the WHO and the United States Centers for Disease Control and Prevention (CDC) expressed serious concerns about this novel strain, because it apparently transmits from human to human, has had a relatively high mortality rate in Mexico, and because it has the potential to become a flu pandemic……The new strain is derived in part from human influenzavirus A (subtype H1N1), and in part from two strains of swine influenza as well as an avian influenza.”

2009 – April 17th. The first cases of the pandemic flu in the U.S. were reported in Southern California.

2009 – early in the year. Baxter pharmaceuticals is reported to have sent out a mix of two different live viruses in a flu vaccine.

2009 – February 19th. Novartis Pharmaceuticals of Basel, Switzerland worked with scientists at the U.S. Army Institute of Pathology ­ Ft. Detrick, Maryland, to create a "novel" strain of weaponized "influenza" virus by means of "reverse engineering" the deadly 1918 killer strain ­ ...Novartis applied for just such a patent on Nov. 4, 2005, and the U.S. Patent Office accepted this application and granted US 20090047353A1 for a "Split Influenza Vaccine with Adjuvants" on February 19, 2009.

Adam Smith on Too Big to Fail

"To restrain private people, it may be said, from receiving in payment the promissory notes of a banker for any sum, whether great or small, when they themselves are willing to receive them; or, to restrain a banker from issuing such notes, when all his neighbours are willing to accept of them, is a manifest violation of that natural liberty, which it is the proper business of law not to infringe, but to support. Such regulations may, no doubt, be considered as in some respects a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments; of the most free, as well as of the most despotical. The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty, exactly of the same kind with the regulations of the banking trade which are here proposed."

TheMilitary-Industrial Complex from an Ecological Perspective

I found this wonderful article tonight. 20th Century history where humans inhabit the landscape as "detritovores":

"...When General Eisenhower, as retiring president, warned the American people to beware of unwarranted influence wielded by the military-industrial complex, it was presumably political and economic influence that he had in mind.

But the military-industrial complex was a vast conglomeration of occupational niches. As such, it wielded an altogether different (and even more insidious) kind of influence. The military-industrial complex helped perpetuate the illusion that we still had a carrying capacity surplus; it made it profitable for the living generation to extract and use up natural resources that might otherwise have been left for posterity. It absorbed for a while most of the excess labor force displaced by technological progress from older occupational niches that had been less dependent on drawing down reservoirs of exhaustible resources. It thus helped us believe that the Age of Exuberance could go on.

Nor was General Eisenhower alone in missing the ecological significance and over-emphasizing the political elements in the trends of' his time. His young, articulate, and sophisticated Bostonian successor launched a new administration with an inaugural address whose inspirational quality lay partly in its eloquent resolution of American ambivalence. If we wanted to maintain full employment, we dreaded achieving it by means of an arms race. Subtly, and with the gloss of' high idealism, John F. Kennedy reassured the nationwide television audience on that crisp, brilliant January day in 1961 that the temporary occupational niches of the military-industrial complex could be long-lasting and could be made more honorable than horrible. There was to be a "new Alliance for Progress," and we were to hope for emancipation from the "uncertain balance of terror that stays the hand of' mankind's final war." But the conflict-bred niches would last, for "the trumpet summons us again . . . to bear the burden of a long twilight struggle year in and year out . . . against the common enemies of man: tyranny, poverty, disease and war itself." Under both parties, the military-industrial complex enabled us to be preoccupied with matters that helped us ignore resource limits. It helped thereby to obscure the fact that population was expanding to fill niches that could not be permanent because they were founded upon drawing down prehistoric savings, exhaustible fossil energy stocks.

The human family, even if it were soon to stop growing, had committed itself to living beyond its means. Homo sapiens, as we saw in Chapter 9, was capable of transforming himself into new "quasi-species." By the Industrial Revolution humans had turned themselves into "detritovores," dependent on ravenous consumption of long-since accumulated organic remains, especially petroleum...."[1]

Industrialization: Prelude to Collapse
by William Catton
(Excerpt from Overshoot: The Ecological Basis of Revolutionary Change)
http://dieoff.org/page15.htm