Monday was the 10th of Muharram in the lunar Islamic calendar, which slides by 10-11 days per Gregorian solar year, which is celebrated by Shi'i Muslims as Ashura, their holiest sectarian day, the anniversary of the martyrdom at the hands of Sunni Muslims commanded by Caliph Yezid of the grandson of the Prophet Muhammed, Hussein, now buried in Karbala, Iraq. Traditionally, devout Shi'a march in the streets flagellating themselves in his memory and honor. This year there was violence in three neighboring countries on this day, Iraq, Iran, and Pakistan, but for different reasons in each case.
In majority Shi'i Iraq celebrating Ashura used to be banned under Sadaam Hussein. After his overthrow it was joyously celebrated and was supported by the new regime. For the first time this year many of those celebrating manifested anti-government slogans and speeches, mostly accusing the al-Maliki government of corruption. The violence erupted when a Sunni radical suicide bombed some marchers, killing six and setting off riots.
Much more publicity has attended to majority Shi'i Iran, where both the government and the opposition support celebrating it, and there were some pro-government groups who celebrated it in the usual fashion, without incident. However, opposition groups used it to criticize the anti-democratic and repressive regime, with this bolstered by demonstrations following the death seven days earlier of the most prominent anti-regime Grand Ayatollah, Hossein Ali Montazeri. The new demonstations included for the first time open criticism of Supreme Jurisprudent, Ali Khamene'i, as well as attacks on Basiji (private militia) outposts, and some security people refusing to fire on the crowds. Ashura is traditionally supposed to be a time of peace and truces, and the government is in total violation of this, along with the latest report that they are holding the bodies of five people killed to avoid demonstrations at their funerals, one of those being the nephew of the main opponent of Ahmadinejad in the June presidential election, Moussavi.
Pakistan is majority Sunni, with about 20% of the population Shi'a. Ashura is often accompanied by riots there whenever Sunnis mock the marching Shi'a. Last year 40 died when a Sunni attacked the Shi'a in the Hongu, which was under strict curfew this year. This year only 30 died in a suicide bomb attack by a radical Sunni in Karachi, the country's largest city, which, big surprise, triggered rioting by Shi'a in that city.
Tuesday, December 29, 2009
Monday, December 28, 2009
550,000 Names
So a member in good standing of the Nigerian economic and political elite contacts the US embassy in Yemen. He says his son has gone off the deep end, fallen in with radical jihadis, and has traveled to Yemen to link up with fellow combatants.
And what does the embassy do? They put the son’s name on a list with 550,000 others—people who have attracted suspicion for any reason and no reason, intellectuals or just ordinary people who have expressed ideas evoking the disapproval of US officials (think of Tariq Ramadan), and untold numbers whose names were flagged purely by profiling.
Of course, a list of 550,000 names is no list at all. You are not going to do expanded searches on all of them in airport security lines, nor run all their luggage past canine noses. No, they will just board the airplane, and you must hope for the best.
And what does the embassy do? They put the son’s name on a list with 550,000 others—people who have attracted suspicion for any reason and no reason, intellectuals or just ordinary people who have expressed ideas evoking the disapproval of US officials (think of Tariq Ramadan), and untold numbers whose names were flagged purely by profiling.
Of course, a list of 550,000 names is no list at all. You are not going to do expanded searches on all of them in airport security lines, nor run all their luggage past canine noses. No, they will just board the airplane, and you must hope for the best.
Welcome to the Third World, Tasmania
The first decade of the New Millenium saw the state of Tasmania, Australia reach third world status. Hundreds of thousands of hectares of native forest, much of it pristine old-growth and rare temperate rainforest, were converted to a vast gigantic monoculture. A single species of tree in neat rows now spans almost the entire north of the state from the West Coast to the East Coast in a land the size of Ireland.[1]
Environment, land-occupancy, planning and zoning laws were changed to facilitate the takeover of family farms by a privileged network of heavily-taxpayer-subsidised agribusiness corporations. Bands of former Australian politicians soon joined the staff of these new 'enterprises' to share in the extraordinary windfall profits that flowed from this stepped-up rape and pillage. Annual reports and meetings included assurances to global investors that there were no serious impediments to profit-taking by way of environmental laws or considerations for conservation.
In a mere decade common and iconic animals such as the Tasmanian devil, the bandicoot [2] the Tasmanian quoll and four species of burrowing crayfish[3] became an endangered species. The wedge-tailed eagle is "under threat from all fronts" [4] while the local platypus were reported to display a "unique sensitivity to developing chronic skin ulcers ... whereas the disease is not seen in mainland platypus" [5]. State and Federal Governments deliberately failed to incorporate scientific evidence into government decision making. [6] Nor did the Government provide adequate protection plans for these animals. [7] The abuse and neglect of our wildlife and flora was further reinforced when the Federal Environment Protection and Biodiversity Conservation Act was amended to accommodate trumped-up government notions of what constituted 'protection'. [8]
After ten years water courses used for irrigation and domestic water supplies began to dry up[9] and became repeatedly contaminated by pesticides [10]. These chemicals have been long banned in other nations because of their toxicity and ease of movement in the environment. So, it was no surprise to read that in this state, where residents are forced to live in what amounts to a giant agribusiness industrial zone, that Tasmanians have significantly 'poorer health outcomes compared to other Australians" [11] . In fact, three out of every four Tasmanians suffer from a chronic health condition which often "renders them unable to hold down a job and sees them struggle with simple daily tasks." [12] Given the sheer scale of environmental and health degradation the Tasmanian Government has clearly found it a much more lucrative proposition to protect themselves over and above their constituency. Epidemiological and public health research outcomes remain long suppressed [13] as are the spray drift models for current 'forestry' aerial spray practices, for instance.[14]
Globally, it is hard to calculate exactly how huge the Tasmanian 'forest' industry's contribution is to global warming. It must be massive, however. Hundreds of giant infernos are now lit with napalm; deliberately and routinely each year across the state as well as over the nation as a whole. Hundred of years of biomass in old growth forests have been put to the match, ancient stumps turned to charcoal and soils baked to a brick red. Now the plantations that have replaced these destroyed forests provide perfect fuel for much bigger wild fires that have begun to rage out of control with the advent of a dryer and hotter climate in South East Australia. [15]
Tasmania's communities are struggling like they never have before. The state's economy is quickly coming to a standstill with the biggest woodchipper, Gunns Ltd, now unable (at least for the time being) to find sufficient buyers for it 'product'. But the story of Tasmania's precipitous decline was foretold by many ordinary people whose clarity of thought was not polluted by heedless self-interest and bad morals. To see now that the dirty invisible hands of unfettered markets have spread their grasp into the first world makes me wonder just how little there must now be left to plunder in third world nations.
After all this, though, I can see that our forests and habitats in Tasmania have been killed - not by an enemy separate from ourselves - but by the aggregate consumption habits of a billion people on earth today. This is h-u-g-e and nothing more nor less than the enigma of people limited irrevocably to thoughts of childhood self-gratification. The state, says Tocqueville has prompted us to "dream of nothing other than being happy."
I want to dream of a future; to dream of downed-wallets and powered-down lives. Maintenance of the huge possibility of continued human life on the planet requires our urgent change, now.
[1] “Tasmania ran up the country’s largest area of new plantation in 2008, with 27% of the total from slightly less than 0.9 of Australia’s land area”. This was all proudly reported by the Bureau of Rural Science in Tasmania’s Examiner newspaper on 23rd April 2009, notwithstanding the announced collapse of MIS giant Timbercorp, also reported on this day.
Comment by Tasmanian resident John Hayward
http://tasmaniantimes.com/index.php?/weblog/comments/mckim/
[2] http://www.dpiw.tas.gov.au/inter.nsf/WebPages/SJON-58K8WK?open
http://www.tct.org.au/1080d.htm#Tasmanian
[3] Tasmania’s Freshwater Burrowing Crayfish (Engaeus sp.)
and the Mainland Yabby: Dispelling myths and informing
Students, Landowners, Fisheries Inspectors, Parks and
Wildlife Officers and Police
BUSHWATCH: 1800 00 5555
The Launceston Environment Centre: (03) 6331 8406
Threatened Species Unit at the Department of Primary
Industries, Water and Environment: (03) 62336556
Inland Fisheries Services: Launceston (03) 63365231
Hobart (03) 6233 4140
[4] *Rare eagles diving toward extinction*
By SIMON BEVILACQUA
14may06
[5] Failures in endangered species management. 10th March 2009
http://tasmaniantimes.com/index.php?/weblog/article/failures-in-endangered-species-management/
[6] The insidious invasion of Bioterror
http://tasmaniantimes.com/index.php/weblog/comments/the-insidious-invasion-of-bioterror/
David Obendorf and Joanne Connolly
[7] Quoll management plan released too late, trust says
http://www.abc.net.au/news/items/200509/1458178.htm?northtas
Monday, 12 September 2005. 11:34 (AEST)Monday, 12 September 2005. 11:34
[8] Protection of the environment was converted in meaning to a mere presumption of law that cannot be rebutted by evidence and must be taken to be the case whatever the evidence to the contrary. See the history of Brown v Forestry Tasmania [The Wielangta Case]
[9] "After about 10 years' growth under intensive plantations, about one-in-eight of the streams that were in the areas that we studied had no flow for a year or more, and overall there was a 50 per cent reduction in stream flow,"
As quoted in: Plantations may do more harm than good, says CSIRO
Last Update: Sunday, January 1, 2006. 9:10am (AEDT)
http://www.abc.net.au/news/newsitems/200601/s1540198.htm
[10] Editorial: Not weak on water, 4th August 2009
www.themercury.com.au/article/2009/08/04/33155_editorial.html
[11] Lara Giddings, MP, Deputy Premier and Minister for Health and Human Services
Thursday, 29 May 2008
State of Public Health Report 2008
http://www.media.tas.gov.au/release.php?id=23855
[12] Plan to fight chronic disease. DAMIEN BROWN
December 07, 2009 09:13am
http://tasmaniantimes.com/index.php?/weblog/article/plan-to-fight-chronic-disease/
The Mercury link: http://www.themercury.com.au/article/2009/12/07/114171_lifestyle.html
[13] Medical researchers angered by Govt suppression
By PM's David Mark
http://www.abc.net.au/news/stories/2008/03/01/2177010.htm?section=justin
[14] The Australian Pesticides and Veterinary Medicines Authority (APVMA) had repeatedly failed to provide the aerial spray drift model outcomes requested by Brenda Rosser (moderator, Tasmanian Clean Water Network) for years now.
[15] The record bushfires of Victoria in February 2009 bear witness to this new and frightening development:
(i)Fire/land tenure map of the Murrindindi fire that burnt through Marysville overlaid onto the latest NASA satellite Infrared Image.25/02/2009 8:46 am
http://www.myenvironment.net.au/index.php/me/resources/bush_fire/research/fire_land_tenure_map_of_the_murrindindi_fire_that_burnt_through_marysville_overlaid_onto_the_latest_nasa_satellite_infrared_image
(ii) Links between bush fire and logging coupes
08/03/2009 1:24 pm
http://www.myenvironment.net.au/index.php/me/resources/bush_fire/research/links_between_bush_fire_and_logging_coupes
“….a logging map created from the DSEs forest explorer interactive maps. It may be more than a coincidence that the fire pattern just happens to follow coups logged over the last 30 years - hence lots of regen/regrowth, thirstier young trees, dryer undergrowth etc etc....
(iii) http://www.hancock.forests.org.au/docs/09feb.htm
Churchill Bushfire/plantation fire Feb 7 2009.
(iv) Feb 15 2009: Strzelecki Ranges/Jeeralang Creek West Branch from Jeeralang West Road. Plantations still smouldering but Hancock leave this unattended.
http://www.hancock.forests.org.au/docs/09feb.htm
Etc
The Danger of Overcapacity
While the US frittered away much of the stimulus on throwing money at banks, the Chinese actually created much more capacity. Business Week used to do a good job of understanding real issues. Here the new Bloomberg magazine notes that the extra capacity poses a risk to the West because China will now have to export more, creating a different sort of imbalance.
Roberts, Dexter. 2009. "China's 'Made in China' Problem: The Downside to Beijing's Huge Stimulus is a Glut of Factories and Output That May Spur Trade Frictions." Business Week (21 December): pp. 20-21.
Roberts, Dexter. 2009. "China's 'Made in China' Problem: The Downside to Beijing's Huge Stimulus is a Glut of Factories and Output That May Spur Trade Frictions." Business Week (21 December): pp. 20-21.
While Beijing's $586 billion stimulus package has helped the mainland navigate the global financial crisis, there's a downside. Fixed asset investment -- money spent on factories, highways, and other big-ticket projects -- soared 40% in the first half and accounted for nearly all of the country's growth.
Saturday, December 26, 2009
A Reply to the Union of Concerned Scientists
I have to begin by saying that I appreciate the very civil tone adopted by Rachel Cleetus and UCS. It almost doesn’t feel like the internet.
Now on to the disagreements.
1. I stand by my claim that the least significant part of any climate bill is what it says it will do in 2020 or 2050. In a few more days, 2020 will still be a decade away. A decade ago Alan Greenspan was getting nervous that federal government would retire its bonds, become a net creditor and start buying up financial assets. OK, he gets credit for one out of three. Seriously, we will change our targets for carbon reduction over the next ten years, probably several times. If Rachel wants to put more stress on immediate action, that would make sense, but 2020? As for a science review process, fine, but it’s naive to think that any such mechanism will generate automatic revisions in such a crucial policy variable as cuts in carbon consumption. It will be political every time.
2. The statement that “tropical forests....are a source of 15% of global emissions” is simply wrong. Climate change is not a carbon emissions problem, it’s a carbon cycle problem. We are better off with more forests than less because they buy us some precious time, but in the end it’s about the extraction and combustion of fossil fuels. This is an important distinction to make because there are powerful financial interests that want to convince us we can get to a stable climate by shelling out money for forests rather than cutting deeply into our fuel consumption. No.
3. At the risk of dragging the tone of this discussion into the gutter, I will say that Rachel is being disingenuous when she writes that support for tropical forests, clean development in low-income countries etc. is “not about offsets”, when clearly it is. The bill she prefers, Kerry-Boxer, is loaded with them. She is right to say that this falls within the current UN framework, but if you think, as I do, that offsets are the wrong way to go, you have a problem with that framework as well. The Copenhagen fiasco tells me the time is right to change it.
4. As I’ve written on several other occasions in this blog, it is delusional for environmental groups to allocate in their imaginations the billions and billions from carbon offsets to all their favorite causes, from energy conservation to R&D to generous support for the victims of climate change around the world. It’s not that we don’t need all those things. There are just two problems: (1) If there are to be such massive auctions, the income they generate will be taken out of the hide of consumers—it will be a mega sales tax. Such taxes are very regressive. It is very bad social justice to advocate a radical shift in public finance from moderately progressive income taxes to radically regressive sales taxes. And, no, Kerry-Boxer will not protect consumers from these price hikes. If they did we would have paralyzing energy shortages, worse than we had in the 1970s when oil prices were capped. (2) But we won’t have these lovely auction revenues to allocate in the first place. No government that has to face democratic elections will enact carbon restrictions that eviscerate the household budgets of its citizens. Despite all the rhetoric it hasn’t happened yet, and it won’t happen, ever. The only way to get the tight carbon caps we need is to give the money back, and to hard wire that promise into the legislation itself. If the commitment isn’t credible, the politicians will always run for cover when the chips are down. There’s no guarantee that rebating carbon revenues will be sufficient, but it’s a sine qua non. If the Europeans, who are much better informed and more supportive of action on carbon mitigation than we are, won’t tax themselves sufficiently for the cause, why do you expect this of Americans?
5. I agree that in a perfect world we would start by investing in energy efficiency and green R&D. I will support any bill that UCS writes that allocates money from the general budget for this purpose. Sign me up. But: (1) if the money comes at the expense of rebating skyrocketing energy costs it will render politically unattainable the overall cap that has to be the centerpiece of our policy, and (2) as a practical matter, the public will not support a big shift in spending toward these programs until after they see their energy costs go way up. I have put my name on every petition for mass transit and similar causes for 40 years and have seen almost every struggle go down to defeat. In a world of cheap gas, people don’t have to invest in alternatives, so they don’t. I’m afraid that, to quote someone who is not supposed to be quoted any more, when it comes to this topic, it is not people’s consciousness that governs their material conditions, but their material conditions that govern their consciousness.
6. To briefly reprise my previous post: one of the mistakes of the Kyoto-Copenhagen framework was to tie together mitigation and adaptation—to hold joint action on minimizing climate change hostage to arrangements to compensate the victims. I’m certainly for compensating the victims—and more—but not if it leads to gridlock. Fortunately, there is a gathering international consensus that the time has come for global financial mechanisms to address global concerns, like massive, extreme poverty, illiteracy, disease—and adaptation to climate change. Every other developed country except this one has joined the Leading Group and is discussing which financing mechanisms to put in place. The first of these, an airline ticket tax that pays for life-saving pharmaceuticals in the poorest countries, has already been implemented by eleven countries. If UCS wants the US to stand up to its international obligations, a good place to start would be getting the US into the Leading Group and supporting the fundamental reform of international finance. Crippling essential action on climate change by threatening to bleed households and then earmarking a fraction for Good Works Far Away is not a wise alternative.
Now on to the disagreements.
1. I stand by my claim that the least significant part of any climate bill is what it says it will do in 2020 or 2050. In a few more days, 2020 will still be a decade away. A decade ago Alan Greenspan was getting nervous that federal government would retire its bonds, become a net creditor and start buying up financial assets. OK, he gets credit for one out of three. Seriously, we will change our targets for carbon reduction over the next ten years, probably several times. If Rachel wants to put more stress on immediate action, that would make sense, but 2020? As for a science review process, fine, but it’s naive to think that any such mechanism will generate automatic revisions in such a crucial policy variable as cuts in carbon consumption. It will be political every time.
2. The statement that “tropical forests....are a source of 15% of global emissions” is simply wrong. Climate change is not a carbon emissions problem, it’s a carbon cycle problem. We are better off with more forests than less because they buy us some precious time, but in the end it’s about the extraction and combustion of fossil fuels. This is an important distinction to make because there are powerful financial interests that want to convince us we can get to a stable climate by shelling out money for forests rather than cutting deeply into our fuel consumption. No.
3. At the risk of dragging the tone of this discussion into the gutter, I will say that Rachel is being disingenuous when she writes that support for tropical forests, clean development in low-income countries etc. is “not about offsets”, when clearly it is. The bill she prefers, Kerry-Boxer, is loaded with them. She is right to say that this falls within the current UN framework, but if you think, as I do, that offsets are the wrong way to go, you have a problem with that framework as well. The Copenhagen fiasco tells me the time is right to change it.
4. As I’ve written on several other occasions in this blog, it is delusional for environmental groups to allocate in their imaginations the billions and billions from carbon offsets to all their favorite causes, from energy conservation to R&D to generous support for the victims of climate change around the world. It’s not that we don’t need all those things. There are just two problems: (1) If there are to be such massive auctions, the income they generate will be taken out of the hide of consumers—it will be a mega sales tax. Such taxes are very regressive. It is very bad social justice to advocate a radical shift in public finance from moderately progressive income taxes to radically regressive sales taxes. And, no, Kerry-Boxer will not protect consumers from these price hikes. If they did we would have paralyzing energy shortages, worse than we had in the 1970s when oil prices were capped. (2) But we won’t have these lovely auction revenues to allocate in the first place. No government that has to face democratic elections will enact carbon restrictions that eviscerate the household budgets of its citizens. Despite all the rhetoric it hasn’t happened yet, and it won’t happen, ever. The only way to get the tight carbon caps we need is to give the money back, and to hard wire that promise into the legislation itself. If the commitment isn’t credible, the politicians will always run for cover when the chips are down. There’s no guarantee that rebating carbon revenues will be sufficient, but it’s a sine qua non. If the Europeans, who are much better informed and more supportive of action on carbon mitigation than we are, won’t tax themselves sufficiently for the cause, why do you expect this of Americans?
5. I agree that in a perfect world we would start by investing in energy efficiency and green R&D. I will support any bill that UCS writes that allocates money from the general budget for this purpose. Sign me up. But: (1) if the money comes at the expense of rebating skyrocketing energy costs it will render politically unattainable the overall cap that has to be the centerpiece of our policy, and (2) as a practical matter, the public will not support a big shift in spending toward these programs until after they see their energy costs go way up. I have put my name on every petition for mass transit and similar causes for 40 years and have seen almost every struggle go down to defeat. In a world of cheap gas, people don’t have to invest in alternatives, so they don’t. I’m afraid that, to quote someone who is not supposed to be quoted any more, when it comes to this topic, it is not people’s consciousness that governs their material conditions, but their material conditions that govern their consciousness.
6. To briefly reprise my previous post: one of the mistakes of the Kyoto-Copenhagen framework was to tie together mitigation and adaptation—to hold joint action on minimizing climate change hostage to arrangements to compensate the victims. I’m certainly for compensating the victims—and more—but not if it leads to gridlock. Fortunately, there is a gathering international consensus that the time has come for global financial mechanisms to address global concerns, like massive, extreme poverty, illiteracy, disease—and adaptation to climate change. Every other developed country except this one has joined the Leading Group and is discussing which financing mechanisms to put in place. The first of these, an airline ticket tax that pays for life-saving pharmaceuticals in the poorest countries, has already been implemented by eleven countries. If UCS wants the US to stand up to its international obligations, a good place to start would be getting the US into the Leading Group and supporting the fundamental reform of international finance. Crippling essential action on climate change by threatening to bleed households and then earmarking a fraction for Good Works Far Away is not a wise alternative.
Wednesday, December 23, 2009
Aughties, Noughties, Or Just Naughties? The Ten Worst Of The Bush Decade
Some say one reason we are seeing so little commentary on the end of the decade is that nobody knows what to call it. Is it the Aughties, the Noughties, or maybe just the Naughties? Some (the crowd over at Marginal Revolution) argues that much went well in places like China and India, where living standards for millions clearly rose. Cannot disagree. However, most think things not so hot (or maybe too hot) here in the US. Yesterday, Juan Cole at http://www.juancole.com gave a list of the Ten Worst Things for the US in the Bush Decade, which I repeat here without further comment, although he provides more.
10) stagnating worker wages and emergence of new monied aristocracy
9) greater health and food insecurity for Americans
8) environment more polluted
7) imperial presidency ensconced
6) Katrina destruction of African-American neighborhoods in New Orleans
5) mishandling of Afghanistan
4) Iraq war
3) $12 trillion Bank Robbery associated with deregulation
2) 9/11 attack, with Bush laughing at CIA warning on 8/6/01
1) stolen 2000 presidential election.
Happy holidays everybody!
10) stagnating worker wages and emergence of new monied aristocracy
9) greater health and food insecurity for Americans
8) environment more polluted
7) imperial presidency ensconced
6) Katrina destruction of African-American neighborhoods in New Orleans
5) mishandling of Afghanistan
4) Iraq war
3) $12 trillion Bank Robbery associated with deregulation
2) 9/11 attack, with Bush laughing at CIA warning on 8/6/01
1) stolen 2000 presidential election.
Happy holidays everybody!
Watching Sausage Being Made - Health Care "Reform"
There is an old saying that there are two things one should not look too closely at: the making of sausages and the passing of laws. In the case of what is left of health care "reform" after all the purging and paying off, which may be passed tomorrow by the Senate, this is the case more than usual. It is not a change of system, but at best an extension of the existing system, even though Obama said he would change it, and many among the Dems in Congress have pushed for more serious systemic change. As it is, I see six different possible systems broadly:
1) pure laissez faire, done in the US in the past, but no longer in place in any high income country, 2) the US system of for-profit private insurance with some state provision (medicare, medicaid), 3) a universal system of non-profit private insurance, what is in place in the Netherlands and Switzerland, 4) a universal coverage system of private-non-profit coverage through employment and a public option for rest, found in Germany and France (whose system has been rated the world's best by the WHO), 5) a single payer public system, with healthcare workers self-employed, Canada an example, and 6) a fully socialized system with healthcare workers state employees as in the UK and the former Soviet Union. I think that Obama was pushing for something like the French system, although keeping our useless for-profit insurance companies, but, well, not only sausage in the making, but pretty smelly sausage coming out the other end...
1) pure laissez faire, done in the US in the past, but no longer in place in any high income country, 2) the US system of for-profit private insurance with some state provision (medicare, medicaid), 3) a universal system of non-profit private insurance, what is in place in the Netherlands and Switzerland, 4) a universal coverage system of private-non-profit coverage through employment and a public option for rest, found in Germany and France (whose system has been rated the world's best by the WHO), 5) a single payer public system, with healthcare workers self-employed, Canada an example, and 6) a fully socialized system with healthcare workers state employees as in the UK and the former Soviet Union. I think that Obama was pushing for something like the French system, although keeping our useless for-profit insurance companies, but, well, not only sausage in the making, but pretty smelly sausage coming out the other end...
Tuesday, December 22, 2009
A Primitive Answer to High Tuition
Given the anti-intellectualism of today, maybe this is the answer for high tuition.
Mill, John Stuart. 1848. Principles of Political Economy with some of their Applications to Social Philosophy, John Robson, ed., Vols. 2 and 3 of The Collected Works of John Stuart Mill (Toronto: University of Toronto Press, 1965- ).
391: "Before the invention of the art of printing, a scholar and a beggar seem to have been terms very nearly synonymous. The different governors of the universities before that time appear to have often granted licences to their scholars to beg."
Mill, John Stuart. 1848. Principles of Political Economy with some of their Applications to Social Philosophy, John Robson, ed., Vols. 2 and 3 of The Collected Works of John Stuart Mill (Toronto: University of Toronto Press, 1965- ).
391: "Before the invention of the art of printing, a scholar and a beggar seem to have been terms very nearly synonymous. The different governors of the universities before that time appear to have often granted licences to their scholars to beg."
Copenhagen: Wall Street Journal vs New York Times
WSJ: "The two-week Copenhagen conference appeared set to end with no agreement at all, until last-minute bargaining among leaders from the U.S., China, Brazil, India and South Africa produced a final statement. A handful of countries, including Sudan, Venezuela and Bolivia, declined to endorse the 11th-hour deal."
NY Times: Andreas Carlgren, the environment minister of Sweden, the country holding the rotating E.U. presidency, said that the summit meeting had been a “great failure” partly because other nations had rejected targets and a timetable for the rest of the world to sign on to binding emissions reductions .... It was obvious that the United States and China didn’t want more than we achieved at Copenhagen,” Mr. Carlgren said at a news conference in Brussels. The obstacles created by those countries were “part of what we regretted,” he said."
NY Times: Andreas Carlgren, the environment minister of Sweden, the country holding the rotating E.U. presidency, said that the summit meeting had been a “great failure” partly because other nations had rejected targets and a timetable for the rest of the world to sign on to binding emissions reductions .... It was obvious that the United States and China didn’t want more than we achieved at Copenhagen,” Mr. Carlgren said at a news conference in Brussels. The obstacles created by those countries were “part of what we regretted,” he said."
Monday, December 21, 2009
Robert J. Gordon is a Buffoon
Gordon: "To engage in this debate in December 2009 requires that we play a fantasy game..."
It is fitting that Professor Gordon admits he is playing a fantasy game. To equate unemployment with vacation is a bizarre and callous fantasy. To equate market income per capita with standard of living is a strange and fantastic category mistake that could only be made by someone for whom "money is reality, while leisure is an empty spot in time devoid of wealth-producing activities."
But Professor Gordon crosses over the line from fantasy into delusion when he invokes the so-called "lump of labor fallacy" to disparage policies that encourage shorter hours of work. The fallacy claim is a weird concoction that many economists fancy to be their "knockout punch" against work time reduction. It consists of the bogus claim that advocates of shorter hours assume there is "a fixed amount of work to be done" regardless of labor costs, work arrangements, demographic trends or consumer demand. Advocates of work time reduction assume no such thing.
Policies to encourage shorter hours do not rely on any such ridiculous assumption. No economist has ever produced a coherent argument or substantive evidence to show that advocates assume a fixed amount of work or that policies rely upon such an assumption. All economists have done is repeat the assertion ad nauseum. Repetition doesn't make it so.
The lump of labor fallacy amounts to little more than schoolyard name-calling. But – and this is a crucial point – it is name calling with a long and very peculiar history that has nothing to do with economic analysis and everything to do with reactionary ideology and polemics. Professor Gordon is sadly unaware that this curious history of the lump-of-labor fallacy claim has been painstakingly documented (see "Why Economists Dislike a Lump of Labor" ).
It is fitting that Professor Gordon admits he is playing a fantasy game. To equate unemployment with vacation is a bizarre and callous fantasy. To equate market income per capita with standard of living is a strange and fantastic category mistake that could only be made by someone for whom "money is reality, while leisure is an empty spot in time devoid of wealth-producing activities."
But Professor Gordon crosses over the line from fantasy into delusion when he invokes the so-called "lump of labor fallacy" to disparage policies that encourage shorter hours of work. The fallacy claim is a weird concoction that many economists fancy to be their "knockout punch" against work time reduction. It consists of the bogus claim that advocates of shorter hours assume there is "a fixed amount of work to be done" regardless of labor costs, work arrangements, demographic trends or consumer demand. Advocates of work time reduction assume no such thing.
Policies to encourage shorter hours do not rely on any such ridiculous assumption. No economist has ever produced a coherent argument or substantive evidence to show that advocates assume a fixed amount of work or that policies rely upon such an assumption. All economists have done is repeat the assertion ad nauseum. Repetition doesn't make it so.
The lump of labor fallacy amounts to little more than schoolyard name-calling. But – and this is a crucial point – it is name calling with a long and very peculiar history that has nothing to do with economic analysis and everything to do with reactionary ideology and polemics. Professor Gordon is sadly unaware that this curious history of the lump-of-labor fallacy claim has been painstakingly documented (see "Why Economists Dislike a Lump of Labor" ).
Bernanke’s Saving’s Glut Hypothesis - Contradiction Number Two.
[Continued from ‘Bernanke’s Saving’s Glut Hypothesis. Contradiction Number One']
In his March 2005 musings [1] on the reasons for a so-called global savings glut Ben Bernanke asserted that the US current account deficit was, by definition, “the excess of U.S. payments to foreigners over payments received in a given period.”
Thus the entire official meaning of ‘current account deficit’ hinges on the US Federal Reserve’s definition of what a ‘foreigner’ is. And what is a ‘foreigner’? Today most world ‘trade’ is dominated by giant transnational corporations (TNCs) who exchange goods, services and money within themselves and/or network with other TNCs. [2] The vast majority of these giant conglomerates are of US in origin. What that effectively means is that the US controls most global ‘trade’[3].
A single US corporation, Walmart is China's fifth-largest export market, ahead of Germany and Britain [5] and “Wal-Mart is responsible for approximately 10 percent of the United States' trade deficit with China.” [6], [7]
In fact, a new international system has emerged since the 2nd world war. It is unipolar and hierarchical. It is empire. "The United States has become the global 'world state' or 'world power' to which there is no challenger. There are now "extremely high levels of economic and financial integration" that "motivate cooperation especially in trade….[The US] "sets its own legal and moral standards admitting to no external sources of authority." [8], [9]
There is incontrovertible evidence that the US has come to its own unique definition of what is ‘foreign’ in its trading accounts with the rest of the world. As explained above, US companies dominate world commercial exchanges and transact with each other across national boundaries. Much of this trade is unrecorded in that the money transactions that do occur are often understated. The strong trend is for these large firms’ accounting statistics to be designed to actually ‘create’ losses in order to avoid taxation.[10]
The establishment of a myriad of shell companies using offshore tax havens often makes it impossible to trace or measure the proceeds of international transactions. Further, up until early in 2008 the US Treasury’s definition of the words ‘foreign and ‘domestic’ was based on where the commercial entity was "created or organised". In May 2008 the definition of 'domestic' was changed. The purpose of this move was to exclude from 'domestic' those entities 'created or organised' outside of the US and who also had 'substantial foreign ownership'. [11] But the dubious definition of 'foreign' remained.
So where are we headed with this creeping loss of meaning. Despite a reigning US President now wearing Democrat robes ‘preferred nomenclature’ remains the order of the day. In Reagan’s time, just as it is at present, nations that are to be rolled back have governments that are called ‘terrorist’. Countries that are to be supported against unwanted insurgencies are still called ‘democratic’. But in things financial we now have a cleverer and more constant application of propaganda. We can see that money and goods that never change hands is now considered ‘trade’.
Richard Nixon's nomination acceptance speech, Miami, August 8th 1968
[1] The Global Saving Glut and the U.S. Current Account Deficit
http://www.federalreserve.gov/boarddocs/speeches/2005/200503102/
[2] It's NOT international trade. Don't be fooled.
Brenda Rosser. Thursday 24th July 2008
http://econospeak.blogspot.com/2008/07/its-not-international-trade-dont-be.html
[3] The term ‘trade’ itself is open to question when a vast quantity of exchanges happen within the same global corporation or network of such companies.
[4] These corporations are: Citigroup, Bank of America, JP Morgan Chase, American International Group. HSBC Holdings is the other, a U.K. bank with approximate assets of $ 1.6 trillion.
From: ‘Finance-Military Complex’
http://democracyandsocialism.com/Articles/FinanceMilitaryComplex.html
[5] The Economic Crisis: A Wal-Mart Economy Dimension. Michael Perelman. Econospeak 18th October 2008
[6] Wal-Mart's 'China Price' By Joshua Holland, AlterNet. Posted November 7, 2005.
http://www.alternet.org/workplace/27829
[7] A board member of the Reserve Bank of Australia - Roger Corbett - is a Member of the Board of Directors of Wal-Mart Stores, Inc as well as Fairfax Media Limited (one of Australia's oligopoly media empires). He is also Deputy Chairman, Non-Executive Director of PrimeAg, a corporation established in December 2007 and that has set its sights on a massive land and water grab in Australia using a lot of investor money from overseas.
[8] 'Towards a Hierarchical International System? THIS Network.Department of Political Science and International Relations, University of Tampere, Finland. Working Papers 1/2005
[9] The trillion-dollar TARP bailout of large US financial corporations in 2008 displayed the readiness of America to abandon the austerity programs and principles it imposed on other countries (nations suffering from large current accounts, trading deficits and insolvent trading institutions just like America) when it suited.
[10] See the large number of online discussions relating to the practice of ‘transfer pricing’ in exchanges within and between TNCs.
[11] CFIUS Review of Foreign Investment: U.S. Treasury Department Proposes New Regulations to Govern National Security Review of Foreign Investment in the United States
Sullivan & Cromwell LLP - May 8, 2008
http://www.sullcrom.com/publications/detail.aspx?pub=444
In his March 2005 musings [1] on the reasons for a so-called global savings glut Ben Bernanke asserted that the US current account deficit was, by definition, “the excess of U.S. payments to foreigners over payments received in a given period.”
Thus the entire official meaning of ‘current account deficit’ hinges on the US Federal Reserve’s definition of what a ‘foreigner’ is. And what is a ‘foreigner’? Today most world ‘trade’ is dominated by giant transnational corporations (TNCs) who exchange goods, services and money within themselves and/or network with other TNCs. [2] The vast majority of these giant conglomerates are of US in origin. What that effectively means is that the US controls most global ‘trade’[3].
It is no coincidence that four out of five of these were from the US. [4]
“According to the Forbes Magazine’s ranking of 2007, the first five largest corporations of all times are not industrial but financial institutions.”
A single US corporation, Walmart is China's fifth-largest export market, ahead of Germany and Britain [5] and “Wal-Mart is responsible for approximately 10 percent of the United States' trade deficit with China.” [6], [7]
In fact, a new international system has emerged since the 2nd world war. It is unipolar and hierarchical. It is empire. "The United States has become the global 'world state' or 'world power' to which there is no challenger. There are now "extremely high levels of economic and financial integration" that "motivate cooperation especially in trade….[The US] "sets its own legal and moral standards admitting to no external sources of authority." [8], [9]
There is incontrovertible evidence that the US has come to its own unique definition of what is ‘foreign’ in its trading accounts with the rest of the world. As explained above, US companies dominate world commercial exchanges and transact with each other across national boundaries. Much of this trade is unrecorded in that the money transactions that do occur are often understated. The strong trend is for these large firms’ accounting statistics to be designed to actually ‘create’ losses in order to avoid taxation.[10]
The establishment of a myriad of shell companies using offshore tax havens often makes it impossible to trace or measure the proceeds of international transactions. Further, up until early in 2008 the US Treasury’s definition of the words ‘foreign and ‘domestic’ was based on where the commercial entity was "created or organised". In May 2008 the definition of 'domestic' was changed. The purpose of this move was to exclude from 'domestic' those entities 'created or organised' outside of the US and who also had 'substantial foreign ownership'. [11] But the dubious definition of 'foreign' remained.
So where are we headed with this creeping loss of meaning. Despite a reigning US President now wearing Democrat robes ‘preferred nomenclature’ remains the order of the day. In Reagan’s time, just as it is at present, nations that are to be rolled back have governments that are called ‘terrorist’. Countries that are to be supported against unwanted insurgencies are still called ‘democratic’. But in things financial we now have a cleverer and more constant application of propaganda. We can see that money and goods that never change hands is now considered ‘trade’.
"Let us begin by committing ourselves to the truth, to see it like it is and to tell it like it is, to find the truth, to speak the truth and live with the truth."
Richard Nixon's nomination acceptance speech, Miami, August 8th 1968
[1] The Global Saving Glut and the U.S. Current Account Deficit
http://www.federalreserve.gov/boarddocs/speeches/2005/200503102/
[2] It's NOT international trade. Don't be fooled.
Brenda Rosser. Thursday 24th July 2008
http://econospeak.blogspot.com/2008/07/its-not-international-trade-dont-be.html
[3] The term ‘trade’ itself is open to question when a vast quantity of exchanges happen within the same global corporation or network of such companies.
[4] These corporations are: Citigroup, Bank of America, JP Morgan Chase, American International Group. HSBC Holdings is the other, a U.K. bank with approximate assets of $ 1.6 trillion.
From: ‘Finance-Military Complex’
http://democracyandsocialism.com/Articles/FinanceMilitaryComplex.html
[5] The Economic Crisis: A Wal-Mart Economy Dimension. Michael Perelman. Econospeak 18th October 2008
[6] Wal-Mart's 'China Price' By Joshua Holland, AlterNet. Posted November 7, 2005.
http://www.alternet.org/workplace/27829
[7] A board member of the Reserve Bank of Australia - Roger Corbett - is a Member of the Board of Directors of Wal-Mart Stores, Inc as well as Fairfax Media Limited (one of Australia's oligopoly media empires). He is also Deputy Chairman, Non-Executive Director of PrimeAg, a corporation established in December 2007 and that has set its sights on a massive land and water grab in Australia using a lot of investor money from overseas.
[8] 'Towards a Hierarchical International System? THIS Network.Department of Political Science and International Relations, University of Tampere, Finland. Working Papers 1/2005
[9] The trillion-dollar TARP bailout of large US financial corporations in 2008 displayed the readiness of America to abandon the austerity programs and principles it imposed on other countries (nations suffering from large current accounts, trading deficits and insolvent trading institutions just like America) when it suited.
[10] See the large number of online discussions relating to the practice of ‘transfer pricing’ in exchanges within and between TNCs.
[11] CFIUS Review of Foreign Investment: U.S. Treasury Department Proposes New Regulations to Govern National Security Review of Foreign Investment in the United States
Sullivan & Cromwell LLP - May 8, 2008
http://www.sullcrom.com/publications/detail.aspx?pub=444
Sunday, December 20, 2009
After Copenhagen
Copenhagen was a disaster, but it was a disaster foretold, the cul-de-sac for a strategy that was flawed from its inception. The only question now is whether climate activists and political leaders will sink another year or two of our precious time into repeating the errors of the past, or whether we can all make a clean break.
There are more flaws with the Kyoto-Copenhagen agenda than I can enumerate, but here are the big ones:
1. There is an inherent conflict between the environmental requirements for greenhouse gas mitigation, as those policies are currently posed, and the constraint of political feasibility in a world of electoral democracies (or even tolerated dictatorships, as in China). We need deep, deep cuts in fossil fuel use. The only way to get there is to raise the price of these fuels far beyond anything the world has ever seen. But democratic polities will punish any politician who acts to impoverish them. This is not about the economic cost of forestalling catastrophic climate change; it is about the distributional impact. When carbon prices skyrocket, those who pay suffer and those who receive flourish. This problem is not addressed by sidestepping the issue with bland, distribution-blind capping commitments. Rather, those commitments are revealed as false when governments refuse, for obvious political reasons, to carry them out.
2. The strategy of buying off developing countries through payment for forest preservation or “clean development” is ultimately incoherent and unmanageable. (a) There is no scientific basis for treating a ton of carbon temporarily “fixed” in a forest the same as a ton sequestered for virtual eternity as fossil fuels left in the ground. It violates elementary understanding of the carbon cycle, and no forest ecologist I know defends the idea. This means that science cannot provide any formulas to resolve political disputes over which forest practices to reward and by how much. (b) And there is no political resolution either, because there are too many types of forests and other sinks, too many practices, over too many countries, with too much money on the line. (c) The notion of offsets to finance clean development is self-contradictory. The economic challenge is to fundamentally change what development means by decarbonizing it. This can only happen if prices rise to prohibitively high levels from the standpoint of current practices. Offsets seek to suppress price increases and delay this transition, so at best all they can hope to achieve is to replicate current best practice in developing countries—although their actual performance is far below even this standard.
The contradictions of Kyoto-Copenhagen were buried under layers of diplomatic verbiage, but they never went away. The closer we got to the point at which we had to devise a real, working agreement, the more intractable they become.
This is not the place to spell out a new strategy in detail, but the flaws of the existing one point the way.
1. Revenue recycling must be built into the fundamental architecture of any GHG mitigation scheme in order to sell it to a democratic electorate. All, or nearly all, of the money people pay in much higher energy prices must be returned to them, and the promise to do this must be credible. It cannot go to oil producers, government coffers, or even the fine projects advocated by environmental groups. No politician will dare to impose such prices if households see the money going out but not coming back in. Some version of a rebate program is imperative. This means, in turn, that carbon caps or taxes cannot be used in a substantial way for payments to the developing world.
2. The goal of mitigation policy must be brutally simple: to phase out, as rapidly as possible, the use of coal, then petroleum, then natural gas. Everything else, although important, is secondary. Yes, we need energy R&D, better agriculture and land use policies, infrastructure investments and the rest, but the central mechanism that ratchets down our climate forcing must apply specifically to fossil fuels. Leave them in the ground. Politically, I believe this prioritizing is coherent; it is only in a world of extraordinarily high fossil fuel prices that we will get the electoral support we need for public spending to shift our development trajectory.
As a practical matter, I recommend separating adaptation from the mitigation framework; it really doesn’t belong, and it shouldn’t be an obstacle to emergency preventive action. Rather, funding for adaptation should be combined with Millennium Development Goals, biodiversity preservation and similar “global public goods” within a new framework of global public finance. The United States should, as a matter of extremely high priority, join in the work of the Leading Group on Innovative Finance for Development, and together we should put into place financial transaction taxes, taxes on international shipments of goods that present negative externalities (like arms and scarce nonrenewable resources), and solidarity levies like the already-existing airline ticket tax. Together, these mechanisms could raise funds of $100B or more. Add expanded debt relief, shutting down tax havens and a few other virtuous actions, and we could have the financing to meet all the most urgent global goals, including adaptation to unavoidable climate change.
So where can this new politics come from? The road from here to there probably passes through the major social and environmental NGO’s, but they are unlikely to change course on their own. There needs to be pressure from below. I hope the failure of Copenhagen spreads the message that time is very short, and politics needs to be focused on solutions. The day has passed for vague mantras like “another world is possible”. The only world we have is in serious danger, and those who understand what is at stake need to be militantly practical.
There are more flaws with the Kyoto-Copenhagen agenda than I can enumerate, but here are the big ones:
1. There is an inherent conflict between the environmental requirements for greenhouse gas mitigation, as those policies are currently posed, and the constraint of political feasibility in a world of electoral democracies (or even tolerated dictatorships, as in China). We need deep, deep cuts in fossil fuel use. The only way to get there is to raise the price of these fuels far beyond anything the world has ever seen. But democratic polities will punish any politician who acts to impoverish them. This is not about the economic cost of forestalling catastrophic climate change; it is about the distributional impact. When carbon prices skyrocket, those who pay suffer and those who receive flourish. This problem is not addressed by sidestepping the issue with bland, distribution-blind capping commitments. Rather, those commitments are revealed as false when governments refuse, for obvious political reasons, to carry them out.
2. The strategy of buying off developing countries through payment for forest preservation or “clean development” is ultimately incoherent and unmanageable. (a) There is no scientific basis for treating a ton of carbon temporarily “fixed” in a forest the same as a ton sequestered for virtual eternity as fossil fuels left in the ground. It violates elementary understanding of the carbon cycle, and no forest ecologist I know defends the idea. This means that science cannot provide any formulas to resolve political disputes over which forest practices to reward and by how much. (b) And there is no political resolution either, because there are too many types of forests and other sinks, too many practices, over too many countries, with too much money on the line. (c) The notion of offsets to finance clean development is self-contradictory. The economic challenge is to fundamentally change what development means by decarbonizing it. This can only happen if prices rise to prohibitively high levels from the standpoint of current practices. Offsets seek to suppress price increases and delay this transition, so at best all they can hope to achieve is to replicate current best practice in developing countries—although their actual performance is far below even this standard.
The contradictions of Kyoto-Copenhagen were buried under layers of diplomatic verbiage, but they never went away. The closer we got to the point at which we had to devise a real, working agreement, the more intractable they become.
This is not the place to spell out a new strategy in detail, but the flaws of the existing one point the way.
1. Revenue recycling must be built into the fundamental architecture of any GHG mitigation scheme in order to sell it to a democratic electorate. All, or nearly all, of the money people pay in much higher energy prices must be returned to them, and the promise to do this must be credible. It cannot go to oil producers, government coffers, or even the fine projects advocated by environmental groups. No politician will dare to impose such prices if households see the money going out but not coming back in. Some version of a rebate program is imperative. This means, in turn, that carbon caps or taxes cannot be used in a substantial way for payments to the developing world.
2. The goal of mitigation policy must be brutally simple: to phase out, as rapidly as possible, the use of coal, then petroleum, then natural gas. Everything else, although important, is secondary. Yes, we need energy R&D, better agriculture and land use policies, infrastructure investments and the rest, but the central mechanism that ratchets down our climate forcing must apply specifically to fossil fuels. Leave them in the ground. Politically, I believe this prioritizing is coherent; it is only in a world of extraordinarily high fossil fuel prices that we will get the electoral support we need for public spending to shift our development trajectory.
As a practical matter, I recommend separating adaptation from the mitigation framework; it really doesn’t belong, and it shouldn’t be an obstacle to emergency preventive action. Rather, funding for adaptation should be combined with Millennium Development Goals, biodiversity preservation and similar “global public goods” within a new framework of global public finance. The United States should, as a matter of extremely high priority, join in the work of the Leading Group on Innovative Finance for Development, and together we should put into place financial transaction taxes, taxes on international shipments of goods that present negative externalities (like arms and scarce nonrenewable resources), and solidarity levies like the already-existing airline ticket tax. Together, these mechanisms could raise funds of $100B or more. Add expanded debt relief, shutting down tax havens and a few other virtuous actions, and we could have the financing to meet all the most urgent global goals, including adaptation to unavoidable climate change.
So where can this new politics come from? The road from here to there probably passes through the major social and environmental NGO’s, but they are unlikely to change course on their own. There needs to be pressure from below. I hope the failure of Copenhagen spreads the message that time is very short, and politics needs to be focused on solutions. The day has passed for vague mantras like “another world is possible”. The only world we have is in serious danger, and those who understand what is at stake need to be militantly practical.
Friday, December 18, 2009
Video of My Colloquium Lecture
I have uploaded a video of my colloquium lecture, which is now at
http://www.archive.org/details/MichaelPerelmanColloquiumTalk
http://www.archive.org/details/MichaelPerelmanColloquiumTalk
Thursday, December 17, 2009
Hillary and Me
Hillary Clinton seemed to make a very generous offer in Copenhagen. She promised the poor nations of the world that if they agreed to a compromised climate change program the US would be willing to contribute to $100 billion program to help them by 2020. Maybe I have this wrong, but I could do one better in the same sort of flim-flam. I would be willing to contribute to a $200 billion program that would help these countries if they would agree to accept a compromised program. I even would be to contribute to $1 trillion program -- of course, neither I nor Hillary have made any commitment as to whether we would put up a nickel or serious money.
Samuelson And The Sons Of Samuelson On The Random Walk
The point I made in an earlier post about Paul Samuelson has become clearer due to debates on other blogs, most notably on Marginal Revolution, with the paper, "Proof that properly anticipated prices fluctuate randomly," Industrial Management Review, 1965, available at http://www.ifa.com/Media/images/PDF%20files/samuelson-Proof.pdf. This famous paper, cited by Krugman recently as presenting one of Samuelson's eight (nine really) most important original ideas, has been widely misinterpreted by his followers, a case of the "sins of the Sons of Samuelson." It has been interpreted as an early example of showing that markets follow random walks, which in turn are examples of market efficiency in conformance with rational expectations. Pretty much of this is either a misinterpretation or just plain outright false.
This latter argument depends on very strong assumptions such as Gaussian distributions of noise. Samuelson's proof is very general, allowing for probability distributions to drift over time (ultimate skewness) as well as to have varying variance (fat tails), and even not to rule out speculative trading by agents. He explicitly states in the conclusions that his theorem does not establish any sort of efficiency outcome to such trading.
Many, including most textbooks (such as Campbell, Lo, and MacKinlay) have simply missed the boat on this, identifying Samuelson with an efficiency result, and then proclaiming him to be wrong because such things as technical trading can make money sometimes. The problem arises from confusing "properly anticipated" with "rational expectations" or at least ratex in a simplistic formulation. Samuelson's result implies that agents are anticipating even the endogenous influence of other traders as well as the usual gaggle of exogenous shocks, and is very general to the form of the probability distribution, thus being perfectly consistent with such outcomes as the peso problem identified in an MIT Ph.D. thesis by Ken Rogoff in 1979. Indeed, Samuelson himself declares his result to be so general as to border on being empirically untestable, and lmost "vacuous," his term. It has been his "sinful sons" who have narrowed it down by making stronger assumptions to claim for it things Samuelson himself never claimed for it (indeed, explicitly denied, such as an implied market efficiency result).
This latter argument depends on very strong assumptions such as Gaussian distributions of noise. Samuelson's proof is very general, allowing for probability distributions to drift over time (ultimate skewness) as well as to have varying variance (fat tails), and even not to rule out speculative trading by agents. He explicitly states in the conclusions that his theorem does not establish any sort of efficiency outcome to such trading.
Many, including most textbooks (such as Campbell, Lo, and MacKinlay) have simply missed the boat on this, identifying Samuelson with an efficiency result, and then proclaiming him to be wrong because such things as technical trading can make money sometimes. The problem arises from confusing "properly anticipated" with "rational expectations" or at least ratex in a simplistic formulation. Samuelson's result implies that agents are anticipating even the endogenous influence of other traders as well as the usual gaggle of exogenous shocks, and is very general to the form of the probability distribution, thus being perfectly consistent with such outcomes as the peso problem identified in an MIT Ph.D. thesis by Ken Rogoff in 1979. Indeed, Samuelson himself declares his result to be so general as to border on being empirically untestable, and lmost "vacuous," his term. It has been his "sinful sons" who have narrowed it down by making stronger assumptions to claim for it things Samuelson himself never claimed for it (indeed, explicitly denied, such as an implied market efficiency result).
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