Trusting Free Markets

 This is a companion piece to the Prescience essay published on 9/4.  Just some thoughts on the nature of markets as they impact the middle class rather than on a larger scale.




The recent revelation that the middle class has lost significant ground since 2007 added to the current economic trough the world finds itself in is demoralizing and reveals a staggering truth. That truth is that the American people have been fed a pablum that enforces the notion that capitalistic markets will always work the best for the most people. No one who wants to hold office dares to take on that fantasy because of the ridicule that would be heaped on that person by the powers who hold the strings.

Right now, as you are reading this, the world is experiencing an economic downturn that is global in its expansiveness. Even China, that state driven engine, is faltering. Germany is growing at about a 2% rate which is impressive in these times. Every one is holding their collective breaths to see what Greece is going to do and if they will remain with the Euro. Greece, for crying out loud!!! The fear is that fear itself will rear its ugly head and scare investors into sitting on their money, as if they haven't been doing that already. The only money moving is money belonging to huge hedge funds that are trying to not lose money on their holdings. Everyone is looking about to try to see where global growth is going to come from. Since we have led the entire world in a chase for ever increasing markets to drive growth the world is now competing with us for markets. What happened?

After WWII the United States was the only nation with a manufacturing base left intact. The Germans had bombed Britain and we had firebombed the industrial centers of Germany into ashes that would require half a century to rise from. We had defeated Germany and Japan by way of being able to manufacture more materiel than they could destroy. Now we turned that industrial base to resupplying the world. That worked without a hitch until the 1980s when the rest of the world began to catch back up. It was also a time when the domestic markets began to become saturated and growth began to slow. What were we to do? Why, our corporations began to go global and their markets were increasingly overseas but now they had to compete with the cheap labor in the foreign markets. How on earth would we ever be able to maintain our corporate profits if we had to pay a living wage with benefits when they did not? Solution? NAFTA.

Don't get me wrong. NAFTA has been great for corporations, not so much for the middle class. The idea was that we needed foreign governments to give us free access to their markets and in return we would give them access to ours. Good deal, right? Well, what this meant was that now we could buy cheap foreign made goods which was all wonderful until the jobs that we used to have making those things left our shores and went elsewhere. Great for corporations, not so much for those losing their jobs.

Still, free enterprise, right? So, now what could we sell the world that they can't make for themselves cheaper? That's where we dropped the ball. Now, free enterprise says that those displaced workers could now follow those jobs and sell their services there. Problem is they were in a foreign country and wages weren't quite as good. Not to mention benefits. Tough luck. Right here is where our government could have stepped in with a plan to retrain our workers for the industries of the future but, wait! We did not have those industries of the future. Still, the middle class was OK as long as it had access to cheap money, increasing equity and could keep on consuming. That way of business was propped up by Wall Street which was making more money than the law allowed, literally, by financing that consumption. But then the music stopped and, like an old record player, it just groans along out of tune.

What about those free markets? Why didn't they protect us since they are always right? Markets are right in a brutal sort of way if left to their own devices. Problem is that when we do that people suffer, lose their jobs, health benefits and finally their equity. The problem with free markets is that they do not work very good when it comes to maintaining a healthy middle class unless there are regulations in place to keep those with the power from taking unfair advantage of those in the middle class and we did not regulate very well at all. As a matter of fact, we regulated very little and now we have what we have. Can we fix it? I really don't know if we have the political will to restore the middle class. We can go back to what we have always done by increasing markets globally and we will continue to get what we have.

I hope this is evident. What we really need to do is regulate markets to keep them from becoming predatory. We need to develop an economic model that does not rely on ever increasing markets and is more sustainable instead. We need to use government to encourage research and development in emerging industries so that we can continue to manufacture and sell something that the rest of the world can't make cheaply. We can use government to encourage the reeducation and retraining of the domestic work force so we can compete in an ever more competitive world.

The bickering over ideology and the partisanship in our government has to stop or we will become irrelevant. What we need to rebuild most of all is our middle class. It should be clear that it is no benefit to have free markets if we have no one to sell to.

Corporate Dominance of Food

Are big American agribusinesses too dominant? - Inside Story Americas - Al Jazeera English

 http://aje.me/MDMe1s


As we endure one of the largest droughts on record there is some discussion about the impact of the giant agribusinesses on food supplies.  The giants are recipients of most of the farm funding from Washington with very little getting to the family farm.  We have lost diversity and the ability to weather a bad crop.

Neil Young Comes Clean - NYTimes.com

Neil Young Comes Clean - NYTimes.com

If you are a fan of Neil Young you will love this story about the iconoclastic rocker.  I'm pretty sure he is an enigma to himself and perhaps that is as it should be.  Maybe we become too acquainted with who we are and neglect who we might be.  Nuff said.  Here's Neil.

Former Minnesota Gov. Tim Pawlenty to head bank lobbying group - latimes.com

Former Minnesota Gov. Tim Pawlenty to head bank lobbying group - latimes.com

Just in case you ever wondered whose pockets the GOP is in?

How one voter's heart beats

Janet Gary: How one voter's heart beats | GazetteNET

a pretty good read to cause some thinking on health care reform.  If you want to keep it, vote.

Islam v. Tolerance

 

 This is a direct lift from an AP report.  I think it deserves some attention and should encourage us to consider the mindset of people in the Islamic world.  Not so that we can agree with them but so we can begin to understand their motivations.

Bob

 

 

 

 

 

 

Islam vs tolerance debated in Prophet film's wake

By HAMZA HENDAWI – 1 hour ago 

CAIRO (AP) — Behind the anger over a film mocking the Prophet Muhammad, public protest is giving way to measured debate over free speech in the new Muslim world.
But while many crave more openness, few if any will go so far as to say that includes the right to blaspheme.
Angry shouts of "No, no to America!" and "No to Israel!" have been balanced by voices condemning the weeklong violence that has targeted U.S. and other Western embassies and left more than 30 dead in seven countries, including Ambassador Chris Stevens and three other Americans at the U.S. Consulate in Benghazi, Libya.
"Muslims should know that Islamic extremist groups bear some responsibility for the uproar taking place now, and for the collision of the world cultures," said Sheik Hameed Marouf, a Sunni cleric in Baghdad.
"The moderate people and clerics in the Islamic world should do their best to isolate and stop such groups that do not represent the true moderate values of our religion."
Religious extremists — whether Muslim, Jewish or Christian — "will lead only to more killings and more blasphemous acts," he said.
Anger is still palpable over the anti-Islam video made in California, as well as French political cartoons that denigrate Muhammad, but most of the Arab world has not seen protests for much of this week.
The streets around the U.S. Embassy in Cairo, where clashes raged for days, were relatively quiet Thursday. Egyptian security forces patrolling the area casually leaned their rifles against the same compound walls that were scaled by angry protesters just last week.
The easing of the violence reflects the balance that Egypt and other Islamic nations are trying to find as they work to nourish democracy in societies where blasphemy is a crime.
"There is no doubt that most Muslims take offense at anyone mocking the prophet," said Mustafa Alani, an analyst at the Geneva-based Gulf Research Center. "The great divide is over the response. The vast majority of Muslims understand that the world is now interconnected and all kinds of material — good or offensive — pours in."
"What we see now is a rage against both the film and, indirectly, the interconnected world," he said.
The violent backlash stretched from Indonesia to Morocco, but nowhere did Muslims take to the streets en masse to protest the film.
In Cairo, there were never more than 2,000 demonstrators outside the U.S. Embassy at any point during four days of protests. And most were believed to be ultraconservative Islamists, known as Salafis, although U.S. officials say the crowd shifted over time and eventually was galvanized by gangs of rowdy teenagers. Salafis are seeking the creation of an Islamic state founded on a strict interpretation of Shariah law.
"The whole thing, our reaction, was way, way over the top," said Ali Abdel-Halim, a 22-year-old business graduate from Cairo, who did not participate in the clashes but said he visited the area around the embassy to watch them.
"I think the film is meant to provoke us as Muslims," he said. "My personal view is that we should have ignored it. It received much more attention than it deserves. Really, it was not worth people dying for."
Over the last decade, dictators have been toppled in four Mideast countries — Iraq, Egypt, Tunisia and Libya — and a fifth is threatened in Syria. With that has come a widespread embrace of assembly and religious freedoms that had been held in check by authoritative regimes for decades.
Khalil al-Anani, an expert on Islamist movements, predicted it will take a generation or more for Mideast nations to fully develop a working democracy that respects individual rights and Muslim values.
"The Arab world is on the edge of choosing between joining the modern world and political development, or to remain as in the last few centuries," he said. "There shouldn't be a trade-off. But it's an enormous challenge, and it will take time."
Iraq was the first Mideast country to embrace democracy after the 2003 U.S.-led invasion that toppled Saddam Hussein, but it is arguably more unstable than ever.
"The Muslims are taught to die for God, not to live for God, so I think that the chances of moderation are limited in our Islamic world," Baghdad businessman Hassan Rahim said Thursday. "The West should accept the fact that Muslims might tolerate a specific level of criticism on Islam, but not mockery or blasphemy."
In Egypt, al-Anani said, the government should encourage progressive thinking by pumping more funding into religious schools that offer a range of interpretations of Islamic texts — and not just conservative views. Salafi influences rose in Egypt over the last decade, in part because of the schools and growth of satellite TV, which conservative clerics use to promote extremist views and, often, hate speech against Christians and Jews.
The anti-Islam video, like Danish cartoons mocking Muhammad several years back, is believed by some to be part of a conspiracy against Muslims to provoke them into acts of violence. But even the voices of moderation on the issue are in agreement with the militants that the film, the latest French cartoons demeaning Muhammad and the Danish caricatures before them cannot be tolerated as freedom of speech.
At the al-Azhar mosque in Cairo, which is considered to be the primary seat of Sunni Muslim learning and a traditional voice of moderation, Grand Imam Ahmed al-Tayeb is calling for an international law that ensures respect for religions and criminalizes blasphemy.
Judicial authorities in Egypt, meanwhile, have said they would try those behind the film in absentia before a criminal court.
The approach to religion is dividing Egypt, creating a fault line between Islamists and secularists as well as between various shades of Islamists. That Salafis spearheaded the protests is evidence of that schism. The Muslim Brotherhood, from which Islamist President Mohammed Morsi hails, has stayed away from the protests, only condemning the film and calling for peaceful demonstrations.
Morsi's government also stepped up its policing of the riots after President Barack Obama called Egypt neither an ally nor an enemy, but "a new government that's trying to find its way." Washington began airing ads in Pakistan this week condemning the video in an olive branch to the Muslim world.
In Gaza City, Shukri Abu Fadel, a 42-year-old teacher, proudly said he joined protesters who were demonstrating peacefully — a basic tenet of democracy.
"We sent our protest message in a civilized and modern way, and it should be known that this movie has unified Muslims and Christians in the Middle East, and has unified all strong believers in God all over the world," Fadel said as he left a mosque.
Associated Press Writers Sameer N. Yacoub in Baghdad, Rebecca Santana in Islamabad, Brian Murphy in Dubai, and Ibrahim Barzak in Gaza City contributed to this report.

Copyright © 2012 The Associated Press. All rights reserved.

The Rich and the Rest of Us in the United States | The Economic Populist

percentages of income for the groupings

The Rich and the Rest of Us in the United States | The Economic Populist

color chart for the groupings

If you are into graphs then this may be your cup of tea.  If you have seen your buying power reduced over the past 15 years this may help you understand.  If you have been kicked to the curb in the past 10 years this is what happened.

Bang The Drum Slowly

The ongoing saga of the efforts of Iran to become a nuclear power and Israel's insistence that they not be allowed to do so has created quite a tiff among various interest groups. Of course, Iran claims they have no desire to possess nuclear weapons but only desire to master nuclear energy for peaceful purposes. Most people justifiably think that Iran is fibbing but no one really knows. Their religious leaders have been quite vocal in their insistence that the possession of such weapons is sinful and beyond the propriety of the Islamic state. On the other hand Israel has possessed nuclear weapons for a long time. They assiduously deny it but everyone seems to know that are blowing smoke. It is also common knowledge that they gained that ability through espionage on the nation who is their biggest supporter, the United States of America. To me it is unseemly that a nation that owes its very existence to support from the United States should act in such a covert manner and that it should use a little more discretion when dabbling in areas that concern our national security.

However, the United States maintains that the security of the Israeli nation is a matter for which there can be no doubt of our commitment. We have pledged to protect Israel from all enemies no matter what. President John Adams who was our second President and ambassador to France and Great Britain made the stunning judgment that nations do not act according to doctrine or belief but simply in their own best interests. While nations may seem to act on principle when the chips are down they will act according to selfish interests. And, in all likelihood, that is the way it should be. In light of that assumption we must accept that Israel is acting in its own best interests with the security of the United States a distant second on the list. You can rest assured that the United States will do the same thing and that is as it should be.

The Jewish nation enjoys a unique place in our international relations largely due to the large numbers of citizens of that heritage. The relationship of Americans to the Jewish people has not always been so amiable. In the not so distant past the predominantly Christian population of the United States held that the Jews were to be just as despised as the African-Americans and it was through that shared sense of persecution that the Jewish people were among the first to demand an end to the persecution of the African-Americans. It seems a bit strange now that the Christians in the Bible Belt are now the biggest supporters of the Jewish nation although the feelings about the African-Americans have not evolved quite as much. But it is the Evangelical Christians who are so supportive of Israel largely due to the admonition of the Bible in the book of The Revelation to not take sides against Israel under threat of dire retribution. That sub-set of Christianity is also notably supportive of right wing political causes and social issues.

Consequently, the President and other leaders are under enormous pressure to unequivocally support the demands of Israel and allay its fears concerning its neighbors. There are those who are beating the drums of war to eliminate the threat of Iran achieving nuclear status and thereby achieving the wherewithal to destroy Israel. In the Arab world there are many who see this as hypocritical of the United States since we do nothing about Israel's nuclear capability which is a hard argument to refute. Now, even as sanctions are crippling Iran's economy the Israeli Prime Minister, Benjamin Netanyahu, is asserting that we must hold Iran to deadlines for ceasing its nuclear ambition or he fears the option to act will pass.

That may well happen but exactly what has the United States to fear from such developments? Certainly the Iranians do not possess the ability to deliver nuclear weapons to the United States in an attack but the fear is that Iran will allow such weapons to fall into the hands of terrorist entities who will attempt to do so. Again, that may be but we can take a lesson from the examples of North Korea and Pakistan who both possess nuclear weapons with Pakistan being the worst nuclear proliferator in the world. Also, the United States and the Soviet Union faced off against one another for almost fifty years in a nuclear standoff each one being assured that their own nation would surely suffer such a devastating retaliation so as to make a first strike unacceptable. Probably this is what would happen between the Israelis and the Iranians but there is always the chance of a wild card. That is just the nature of the world we live in today. It would be nice if the world would forgo nuclear weapons entirely but that is not likely to happen. So, we have to ask ourselves whether or not we want to risk plunging the Middle East and possibly the entire world into another shooting war over this threat to an ally or do we want to just try to get along on an even footing?

There are plenty of good reasons to claim Israel as an ally. Reasons that support our own national security issues but we should ask ourselves whether or not we want any other country dictating our foreign policy. The fact of the matter is that if this were France, Great Britain or Japan we would have told them to reign it in. Of course, we must understand that there are some in Israel who view this as an existential problem but there are many who do not and who want their country to pursue a foreign policy based on cooperation rather than confrontation. A wise choice for our country also.

My take is that the United States does not need to become involved in another shooting war in the Middle East. Talking is better than killing.

Reason or Rage

Rushdie Decries 'Mindset Of The Fanatic' That Sparks Anti-American Protests : The Two-Way : NPR

I wonder why it is that we see fanaticism on the rise in many parts of the world today including in our own country.  Perhaps we don't attack embassies but we have people who would like to.  Maybe we don't throw rocks but then we have guns.  What is the answer to dealing with fanaticism?  Is it the voice of reason which is often drowned out in the uproar?  Can the ballot box be the tempering influence or are we removing the temperance of it through the onslaught of negative political advertising that warns us to take sides, quickly, before it is too late.  Can we quell the fanaticism of some in the Islamic world by using military might to silence them or should we play the long game and try to be helpful?  These are things that we should be talking about rather than who has the biggest stick.

Latest Updates on Rage Over Anti-Islam Film - NYTimes.com

Latest Updates on Rage Over Anti-Islam Film - NYTimes.com

Looks like everyone has gone off half cocked about this thing.  I the United States we are more accommodating of blatantly false statements and charges but in some places it is serious business.  We accept those things as a part of free speech but most parts of the world do not enjoy that liberty and do not understand it.

However, it is certainly abhorrent that anyone would make up a fictitious account of the life of Mohammed just to stir up trouble.  While we may protect the right of one to make such a film it does not relieve that person or persons of the ethical responsibility and part of the blame for the attacks on our outposts. It is even more reprehensible to find that the actors were duped and that sound was dubbed in over the original performances.

Winds of fortune sweep West Texas - Houston Chronicle

Winds of fortune sweep West Texas - Houston Chronicle  

This should be proof positive of the viability of alternative energy sources.  Wind turbines on an oil producing area owned by one of the world's largest oil producers.  Get with it.

Hard to believe that Jeff sneaked into the chase by the skin of his teeth.  Way to go, 24.

Are Markets Prescient?

Are Markets Prescient

So, do we really expect a 13 or 14 year old person to peer into the future and decide what kind of job may be available in 10 years when he or she finishes school? With reliance on markets to create jobs as a result of demand that is exactly what we are doing. I can tell you that at that age my future was not on my mind nearly so much as cars and girls, in that order. If I had chosen cars then I could have ended up as one of the many thousands of people who lost their jobs there but if I had chosen girls, well, at that age that would not have been too wise either.

What about one of those people who came out of high school and went to work right away for some big company like General Motors or big steel? When they get 25 years in and are starting to see the light at the end of the tunnel the global markets change and they are left hanging with skills that are no longer required and 45 or 50 years old. In this job market being that age, with those skills, a mortgage and two kids in college the prospects are not good. Should that person have been prescient enough to foresee that the automotive and steel production markets were going to change drastically and spurned those high paying jobs for something envisioned to take place in the future?

Even here, in Somerset-Pulaski County we have an aircraft mechanic's vocational training application that, when a student is graduated, still cannot find work here and must move to some other area in order to practice his or her vocation. Is the proper decision here to not attend the aircraft mechanic's school and if that is the case then why do we have it?

When those people hit the unemployment line what should our response be to them. Even if you do not believe that we owe our fellow citizens some kind of assistance it has to be recognized that if those people don't find some gainful employment they will be a drag on the economy and we will have been deprived of what they can contribute to the community.

Here in Eastern Kentucky as well as the rest of the country we have so shortage of parents who have done an abysmal job of rearing their children and training them to achieve the highest level of excellence that they are capable of. These former children become dropouts, are much more likely to be overtaken by drug addiction and to end up in prison where they become a dead weight on our society. How do we deal with such people. It seems evident that locking them up has not worked and won't work and only results in a huge prison population that is such a growth industry that private enterprise wants in on it.

If we do not respond to these people in a collective sense then surely the nation will not prosper and the weight of providing basic services to them will drag us down. Even now, as we have so many unemployed and underemployed, we find the weight to be quite heavy. Unless we are willing to allow those people to suffer and die then we are forced to the conclusion that we must be proactive.

Some of our leaders want to abolish the Department of Education as if to say, “let the markets decide what kind of labor force we need. It is of no interest to us nationally whether or not our citizens have prospects for gainful employment.” It seems clear to me that government is the only entity that has the capability and resources to identify areas in which to prepare workers for the future. What do we do with the displaced worker whose job has been either shipped overseas or no longer exists. Rather than allow that person to remain a drag on society shouldn’t we be able to offer some kind of retraining and hope for the future? If so then not only do we need retraining but we also need for private enterprise to be able to offer that person a job.

In the cases of those who have missed the boat or have been devastated by drug addictions should we allow them to stagger along on the fringes of society all the while depriving us of the benefits of their labor and the taxes they would pay? I think not. We can help these people recover but for what purpose? They have no ability to even seek a job much less find a decent one and become a good citizen. It was never intended that the various Social Welfare benefits would be an unending trip to the trough. It was always intended that dependence would be a temporary stop on the way to self-sustainability. People are quick to point to those who depend on government largess as lazy, shiftless and wouldn't work in a pie factory. The truth is that many of them are just exactly like that but far more would be exhilarated to be able to work and regain the pride of self that comes from that. The point is that the other side of the welfare coin is back to work and for that to happen there must be jobs. For these people to get back to work they may need extensive assistance from a social worker to be able to enter the work force however, it is the social worker who is among the first to get a pink slip when budgets get tight.

The role of government in the future must be to act in concert with business to anticipate jobs before they happen and act proactively to have people and jobs ready to fill the gap when it opens. For instance, It has become evident to all that for the United States to employ its people there have to be products that we can sell. What we are good at is innovation and technology but we don't have the mathematicians and engineers available to seize the opportunity. We lack the political will to act proactively to encourage students to prepare for these fields while we wait for markets to demand them. What our markets have created are scads of business majors to fill jobs on Wall Street. If we wait for demand to fuel our job preparation then we will be perpetually ten years behind the curve. If we are behind the curve then someone else will not be and will seize the opportunity.

So, I encourage you to rethink the idea of the infallibility of the markets. It is true that our markets have fueled the rise of our nation but not without problems such as the current economic doldrums we find ourselves in and many others. Our goal must be to regulate markets in order to achieve goals but not so much as to stifle them beyond usefulness. It is only through the regulation of markets by government that we are able to sustain a viable and vibrant middle class and it is that middle class that has proven to be the engine of our greatness.

That is my take on the prophetic powers of the free market. A concerned citizen needs to think about these things in order to make an intelligent choice based on something other than jingoistic phrases.

Clinton Seeks Chinese Accord on South China Sea - ABC News

Clinton Seeks Chinese Accord on South China Sea - ABC News

China may not be too amenable to this since they are attempting to establish hegemony over this near lying body of water and Southeast Asia in general.  It is a potential hot spot for two major powers that could result in acrimony.