Chasing Investment

Recent volatility in the Chinese stock market has had the effect of dragging down the DOW by about 600 points.  Some say it is a needed adjustment.  Paul Krugman makes an interesting point that it is emblematic of too much money chasing too few investment opportunities.  Now, the Chinese market has its own problems but the effect on other markets could be affected by this.

Fair Warning!!  I am not a financing or investment guru but if that is true then what can we make of it?  It seems that perhaps markets are saturated and, under present circumstances, there is no room for growth.  What would happen if that money that is not creating jobs or new opportunity were to be returned to the middle class?  Let's say, in the form of jobs created by government such as infrastructure improvement or clean energy investment.  Then the problem becomes simply one of how the money is transferred from private hands to public hands for purposes of these tasks.  The solution seems to be obvious.  The money was allowed to accumulate in the upper tier by way of tax breaks and low rates of taxation.  Either create ways to encourage that money to move or tax it back to government treasuries.  No doubt this will create a great hue and cry but what else will do the trick?

Seasons of Change

What would you do to feed your family. What kind of desperate act would you commit if your family was in danger of starving. Would you steal? Would you beg? Would you inflict bodily harm upon someone to take their food?

A couple of weeks back President Obama issued a new set of regulations to govern greenhouse gases and a suitable hue and cry ensued. They go a bit further than the previous regulations but not a lot however the issue was seized upon by people from coal producing states and politicians seeking an opening through which to land a jab at the President's party. Even the President admitted that the proposed standards will not be enough to turn the tide of catastrophe alone. If they do not prompt others to follow suit then humanity faces a tough road indeed. Many scientists say we have already passed the point where solutions were easy and that now we will not be able to escape some hardship from the resultant climate change. But, as he said, we must start somewhere and there is always a chorus of exhortations for the United States to step out into the lead. To be sure, they are usually trying to promote war but this may still prove to be a golden moment.

There is very little scientific disagreement that climate change is occurring and that humans are responsible. We can measure by different means how much carbon dioxide has been in the air for hundreds of thousands of years. We can tell the difference between that produced from natural events and that produced from events caused by humans. The extent of our pain is all that remains to be determined but we can look about us and see some of the pain beginning. Drought in California is creating an impossible habitat in which to grow much of the food that feeds America. Fires in the Northwest are almost insurmountable, fed by the arid landscape and they began well before the usual fire season. Heat indexes around the globe are soaring while the icecaps and glaciers are melting at an increasing rate. Climate change will not only result in heat but also in more extreme weather events. Here in our own area it has been a terrible year to try to grow crops and that will result in higher prices and greater food insecurity. The amount of fresh food we personally preserve annually has taken a drastic hit so we will be making up the difference at the supermarket. By the way, have you noticed the price of many food items? This winter our usual supply from California will be interrupted. Have you noticed that it is almost impossible to buy a good orange?

My parents grew up during the depression. My father in Louisville and my mother in Leslie County. Mom's family were subsistence farmers meaning they grew practically everything they consumed. I have heard many times of how by winter's end they would be eating corn mush and eagerly awaiting the first flush of spring greens in the hills. Dad had it a bit tougher because crops don't grow well on the West end of Louisville. His family did fairly well until the great Ohio River flood of 1927 which wiped them out. There was no social safety net and his family never recovered. He told of picking up coal that had fallen from rail cars to sell and to heat with. Food was scarce.

During the dust bowl years of the 1930s some five million people migrated out of a population of 123 million. If you extrapolate those numbers to the present time that would be 15 million people on the move seeking food and shelter. In the 1930s about 50% of the population lived in urban areas. Now it is 80%. As I said, it is hard to grow crops in concrete and blacktop. According to the USDA 17% of Americans live in households that experience food insecurity. That is 50 million people. Now, imagine what it would be like if a large number of those people left the cities to look for food. It is already happening all over the world. People are moving by the millions to escape poverty, hunger or danger. You can't stop that with all the fences in the world. Nor should you want to.

Climate change will make these factors explode. When the land can no longer produce overwhelming bounties of food then people will go to where the food is. When coastal land disappears at high tide those people will leave and go somewhere. When competition for necessities increases so will the violence used to protect them. We think of our society and civilization as being indestructible but the truth is it is held together by a thread. One that, if broken, will allow the unraveling of the web that supports us in our comfort. Climate change has the potential to do that. Already the Pentagon designates climate change as a major danger to national security because people will go where the food is.

So, can the United States step out to lead the way? Can we show the world that we are ready to tackle the most pressing issue facing us today? Will we permit the politicians to use scare tactics and xenophobia for personal gain? Carly Fiorina said in an interview with Katie Couric that everyone agrees that one country acting alone can do nothing so why should we subject our people to unnecessary hardship. That is certainly a true statement but it is going on ten years now since “An Inconvenient Truth” and we have squandered our best opportunities. I cited the dust bowl, the depression and widespread migration of people as instances of economic hardship resulting from ecological and financial disaster. The coming catastrophe will be greater. At what point can we come to think that another nation's polluting of the atmosphere is an act of war against us warranting action to preserve our way of life?

My Take is this. There are many things that can be done but the arguments against taking those steps are short term economic ones. Powerful entities don't want to become irrelevant but they must either by design or by fate. For the number crunchers: In Kentucky there are about 13,000 coal related jobs. There are over 82,000 automotive related jobs. The King is dead.

MoveON Strikes

Advocacy Group to Withold Millions in Donations From Schumer, Iran Deal Opponents World Haaretz Daily Newspaper Israel News





My Take on this is that Schumer is acting to mollify his base of Jewish support in New York.  I seriously doubt that he will use his considerable influence to try to get fellow Democrats to be swayed to his position.  Polling indicates that American Jews are in favor of the Iran deal by a large margin.  It will be enough for him to let it be known he thinks it is a bad deal.  It may be a less than optimal deal but just about everyone that has a considered opinion says it is the best deal we are going to get.



At the risk of causing a big brouhaha I wonder why Iran achieving nuclear weapons is unthinkable.  Already Israel has nukes.  As does Pakistan which is a far scarier place.  India,  North Korea and maybe General Electric also have nukes.  We live in a world threatened by nuclear annihilation.  We have tens of thousands of warheads just by ourselves and Russia and China also have those kinds of numbers.  If anyone, and I mean anyone, uses one the whole world is likely to blow up.  By far, the greatest risk is India and Pakistan.



People talk about the risk of nukes falling into the hands of terrorists when it is a radical state, Pakistan, whose scientists went about the world purveying technology.



Schumer is doing what he has to do to preserve his political position.  Something less than honorable but that's just the way it is.

todayszaman.com

Today's Zaman, Turkish daily news

As the title of this article indicates, there is a reordering taking place in the central lands of the Middle East, certainly in the ancient lands of Mesopotamia. But the lands of the two rivers have previously gone through many metamorphoses of kingdoms, rulers, geography, religions and cultures -- all of them painful and destructive before emerging into different entities.
It is happening again. Like the previous transmogrifications the current changes will also be painful. But like any “great shaking out” different forms emerge, and one has to hope they will be more acculturated to the region's inhabitants and needs than the previous ones.
The largely US-led wars against Iraq in 1991 and 2003 have showed the fragility of the post-World War I and World War II structures of Iraq and Syria, and perhaps other states, as well as the brutality and misguidedness of superpowers. I want to make it clear that states of the Middle East were no more artificial than scores of other states established after these two wars, and they will probably persist. But the military intervention of the US (and its allies) at a time in which the wars occurred was more than the existing structures could bear.
Since the US was largely responsible for the two wars, it is reasonable to ask what now is the US's position toward not just Iraq and Syria but also toward the Arab countries and towards the three -- Iran, Turkey and Israel -- non-Arab countries of the region?
A starting point of such a discussion is to try and assess why the P5+1 (Britain, France, the US, Russia, China and Germany) thought it necessary to come to an agreement with Iran after years of animosity between them.
It should be clear that the principal reasons for the July 14 agreement were not Iran's nuclear programs. Iran's desire seems that of being able to possess the ability to make and, if necessary, to construct nuclear weapons, if there is to be little change in the P5+1 positions toward countries of the Middle East, especially those surrounding Iran. There was/is the possibility that agreement will be achieved and could continue to serve as a springboard for further geo-strategic and geopolitical change in the region.
Some of the preliminary consequences of the July 14 agreement are already emerging with regard to the US-led “war against terrorism,” especially in Iraq and Syria.
As a result of the July 14 agreement, the P5+1 and the coalition against the Islamic State in Iraq and the Levant (ISIL) will now acquiesce to Iran's active participation in the diplomacy of Middle East countries. Tehran will no longer be a diplomatic hostile outlier. It will be a rivalrous competitor and recognized as such by the US, Europe, Russia, China and, reluctantly, by the states of the Middle East, including the Gulf Arab countries.
Contrary to the alarmist bellicosity of opponents, the agreement promises over the next decade or so to result in more stability in the Middle East.
Other reasons for optimism are that the agreement raises strong possibilities that state boundaries will be preserved. This is its most important contribution. ISIL's challenge to the boundaries of Iraq and Syria raised the possibility that boundaries between Iraq and Syria, between Syria and Turkey and between Turkey and Iraq would be challenged. The coming military defeat of ISIL indicates this will not be the case.
Despite the now nearly five-year-long war against ISIL and the needless political duplicity engaged in by all of the participants, Iran's participation in global diplomacy will bring some coherence to the jockeying for geopolitical power in the Middle East.
It is clear that the US, Europe, Russia and China, all for different reasons, also see such developments in their interest.
There will be losers and winners. Radicals, dissenters, ideologues, nationalists, etc., will be weakened; conservatives, statists, pragmatists, capitalists and globalists will be winners, as will non-Arab states such as Iran, Turkey and Israel. Minority challenges to states and their borders will now be weakened.
The new reordering of the Middle East will keep the Westphalian ordering of states while retaining new configurations within current state boundaries. Transnational nationalist, ethnic and religious challenges will take place but within state boundaries. This is also true for transnational economic cooperation. Movements such as ISIL will be less tolerated. Non-state actors will be challenged, some of them strongly such as Hamas, Hezbollah, Alawites, the Kurdistan Workers' Party (PKK), the Democratic Union Party (PYD), the People's Protection Units (YPG) and Houthis. Indeed, we can see that the latter is already happening.
The “great shakeout” taking place is a state shakeout by conservative states with conservative ideologies. Iran is not an outlier in this company. It is now an accomplice but a rivalrous and competitive one, and that is what provides some hope.
Certainly rivalry and competition are better than the wars, ethnic cleansing, flight, killing, rape, malnutrition and barbarism of the past five years.

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*Robert Olson is a Middle East analyst based in Lexington, Kentucky.

THE POWER UNREALIZED

The Power Unrealized and Unrecognized

It seems almost quaint. One of the first papers that I wrote after I began my college experience had to do with the effect of television on Presidential campaigns. There really wasn't that much data since, if I recall correctly, the year was 1966 or 1967. There had been only 4 or 5 elections during the television age but it was obvious that the medium was going to be a mover for politicos. Fresh in our minds was the image of the cool, collected John Kennedy and the perspiring, nervous Richard Nixon. We had no idea of the colossus it would become.

We ran through the 70s and 80s with little change in technique but the foundation was being laid for the colossus it would become.  By the 90s social science had streamlined the messages into 30 second messages that polling told campaign managers would move the numbers.  As data accumulated the science of messaging became more and more like actuarial science and it could be predicted within a few points what a message in a demographic would do.

It was about this time that our experiment in public financing came to an ignominious end and the floodgates of independent money began to provide enormous amounts of public viewing of political advertising.  It became possible to inundate targeted areas with political advertising through the use of cable and satellite channels that could focus advertising on a very specific area enabling manipulation of the message for maximum influence.

As the new century rolled in money became more and more influential and necessary in order for a candidate to compete with opposition advertising.  No longer was it enough to have a message, a platform to tell the voter what one would do if elected.  That no longer had the power to sway voters the way that targeted advertising or the increasing use of advertising to increase the negatives of the opposition could.  One could be elected without ever explaining what he or she would do if elected.  It was enough to frighten the public about what the opposition would do if elected.  True or not.

 Campaign Donors to date

Norman Braman, in Miami in 2014, is among four donors who contributed a collective $12.5 million to Marco Rubio's "super PAC," Conservative Solutions PAC. Credit Aaron Davidson/Getty Images 

 

The use of Political Action Committees and Public Issue Organizations made it possible to collect huge sums of money to use for messaging and organization.  Corporations and their Trade Groups now spend millions of dollars lobbying Congress for favorable legislation and legislation to allow their campaign contributions to be ever greater. First Congress and then the Supreme Court acquiesced.

Perhaps the greatest impact of all came with the advent of the internet and social messaging sites.  The freedom of access gave anyone with a gripe or an ideology a chance to cast it to a global audience.  Everyone became an "expert" able to comment on any topic as authoritatively as a Harvard lawyer. These avenues of expression opened a floodgate of complaints about the constitutionality of behavior from people with no knowledge of how our political system works or without consideration of how Supreme Court decisions have defined various aspects of the Constitution.

Our last Presidential election in 2012 became the first billion dollar election with many supposedly non-affiliated organizations carrying much of the campaign expenses for advertising. Already fund raising is predicted to dwarf those numbers with many limits having been lifted by the argument that money equals free speech. Never mind that more money equals more free speech with the individual not having enough free speech to be heard. Campaigners claim that the donations to their campaigns will have no influence on them whatsoever but that finds me a bit incredulous. The appearance is that the money is influencing legislation and that campaigners are becoming more and more beholden to those who finance their election. This season is showing that there are large numbers of voters resentful of being denied voice in their government and it is creating a messy political environment. That's OK with me. Democracy is messy when ALL the people have a voice. The problem is the organizations who are paying the price to get to determine the answers.

I no longer know if we have the political will to do what is necessary to return power to the people. Right now we have the opportunity to do what is necessary to reclaim the the prerogative of the people to democratically choose their own direction and the direction of our republic. Social media and what it has revealed to us about the internet has given us the means to allow more people than ever to participate in the governmental process. My misgivings are not with the results of the will of the people but with the powerful interests that want to deny that right. I believe that the collective will of the people will always keep us on the right course and that it is the prostitution of the political process that denies the people the fruits of their existence.

I have never been a great believer in the ability of term limits to change the quality of our government. I believe that the effects of money can corrupt even a first term challenger. The only answer is to return government to the people by prohibiting all campaign contributions and publicly funding elections that are governed by a strict format that will eliminate the outsized power of money.
My Take is that if the people will demand it we can have it.