December 30, 2011

Weekend Economists Ring in the Old, Wring Out the New: Dec. 30, 2011 to Jan. 2, 2012

Another New Year already....I'm still waiting for the last one, which must either be on back order, or held hostage in some 3rd world nation. Maybe even here! We qualify as a third world nation nowadays, a Banana Republic, without the bananas. Is that store still in business? I haven't been to a mall in ages, having fallen out of the demographic which malls choose to serve. Or more likely, the malls have changed demographics because people my age know better than to buy crap.

Yes, I'm still in Bah, Humbug! mode. Perhaps the soggy, foggy, bone-chilling weather out here has something to do with it. Well, when the Big Depression sets in, music can take us away to a better time and place. So we are saluting Judy Collins, that Irish Nightingale, because singing is better than wine for what ails you, or at least, goes well with it.

The woman is so photogenic, it's hard to pick just one photo. Google Judy Collins Image and see what I mean.

This one looks rather recent.

And as for picking one tune--impossible! So let's start with one best suited for a New Year celebration:

And I suppose, as a form of medicine, we will have to interleave some economic news and opinion...post what you got!

December 29, 2011

To Build Community, an Economy of Gifts By Charles Eisenstein

http://www.nationofchange.org/build-community-economy-gifts-1325082127

...community is nearly impossible in a highly monetized society like our own. That is because community is woven from gifts, which is ultimately why poor people often have stronger communities than rich people. If you are financially independent, then you really don't depend on your neighbors—or indeed on any specific person—for anything. You can just pay someone to do it, or pay someone else to do it...In former times, people depended for all of life's necessities and pleasures on people they knew personally. If you alienated the local blacksmith, brewer, or doctor, there was no replacement. Your quality of life would be much lower. If you alienated your neighbors then you might not have help if you sprained your ankle during harvest season, or if your barn burnt down. Community was not an add-on to life, it was a way of life. Today, with only slight exaggeration, we could say we don't need anyone. I don't need the farmer who grew my food—I can pay someone else to do it. I don't need the mechanic who fixed my car. I don't need the trucker who brought my shoes to the store. I don't need any of the people who produced any of the things I use. I need someone to do their jobs, but not the unique individual people. They are replaceable and, by the same token, so am I.

That is one reason for the universally recognized superficiality of most social gatherings. How authentic can it be, when the unconscious knowledge, "I don't need you," lurks under the surface? When we get together to consume—food, drink, or entertainment—do we really draw on the gifts of anyone present? Anyone can consume. Intimacy comes from co-creation, not co-consumption, as anyone in a band can tell you, and it is different from liking or disliking someone. But in a monetized society, our creativity happens in specialized domains, for money. To forge community then, we must do more than simply get people together. While that is a start, soon we get tired of just talking, and we want to do something, to create something. It is a very tepid community indeed, when the only need being met is the need to air opinions and feel that we are right, that we get it, and isn't it too bad that other people don't ... hey, I know! Let's collect each others' email addresses and start a listserv!

Community is woven from gifts. Unlike today's market system, whose built-in scarcity compels competition in which more for me is less for you, in a gift economy the opposite holds. Because people in gift culture pass on their surplus rather than accumulating it, your good fortune is my good fortune: more for you is more for me. Wealth circulates, gravitating toward the greatest need. In a gift community, people know that their gifts will eventually come back to them, albeit often in a new form. Such a community might be called a "circle of the gift." Fortunately, the monetization of life has reached its peak in our time, and is beginning a long and permanent receding (of which economic "recession" is an aspect). Both out of desire and necessity, we are poised at a critical moment of opportunity to reclaim gift culture, and therefore to build true community. The reclamation is part of a larger shift of human consciousness, a larger reunion with nature, earth, each other, and lost parts of ourselves. Our alienation from gift culture is an aberration and our independence an illusion. We are not actually independent or "financially secure" – we are just as dependent as before, only on strangers and impersonal institutions, and, as we are likely to soon discover, these institutions are quite fragile.

Given the circular nature of gift flow, I was excited to learn that one of the most promising social inventions that I've come across for building community is called the Gift Circle. Developed by Alpha Lo, co-author of The Open Collaboration Encyclopedia, and his friends in Marin County, California, it exemplifies the dynamics of gift systems and illuminates the broad ramifications that gift economies portend for our economy, psychology, and civilization. The ideal number of participants in a gift circle is 10-20. Everyone sits in a circle, and takes turns saying one or two needs they have. In the last circle I facilitated, some of the needs shared were: "a ride to the airport next week," "someone to help remove a fence," "used lumber to build a garden," "a ladder to clean my gutter," "a bike," and "office furniture for a community center." As each person shares, others in the circle can break in to offer to meet the stated need, or with suggestions of how to meet it. When everyone has had their turn, we go around the circle again, each person stating something he or she would like to give. Some examples last week were "Graphic design skills," "the use of my power tools," "contacts in local government to get things done," and "a bike," but it could be anything: time, skills, material things; the gift of something outright, or the gift of the use of something (borrowing). Again, as each person shares, anyone can speak up and say, "I'd like that," or "I know someone who could use one of those." During both these rounds, it is useful to have someone write everything down and send the notes out the next day to everyone via email, or on a web page, blog, etc. Otherwise it is quite easy to forget who needs and offers what. Also, I suggest writing down, on the spot, the name and phone number of someone who wants to give or receive something to/from you. It is essential to follow up, or the gift circle will end up feeding cynicism rather than community. Finally, the circle can do a third round in which people express gratitude for the things they received since the last meeting. This round is extremely important because in community, the witnessing of others' generosity inspires generosity in those who witness it. It confirms that this group is giving to each other, that gifts are recognized, and that my own gifts will be recognized, appreciated, and reciprocated as well.

It is just that simple: needs, gifts, and gratitude. But the effects can be profound.


READ ON FOR THE POLITICAL AND ECONOMIC CONSEQUENCES...

December 28, 2011

A Run On The Global Banking System—How Close Are We? MUST READ

http://www.informationclearinghouse.info/article30085.htm

My own sense is, this is the first tremor of the earthquake that’s coming to the global financial system. And how the central banks and financial regulators treated the “Systemically Important Financial Institutions” that had exposure to MF Global—to the detriment of the ordinary, blameless customer who got royally ripped off in its bankruptcy—is both the template of how the next financial crisis will be handled, and an accelerator that will make the next crisis happen that much sooner.

So first off, what happened with MF Global?

Simple: It went bankrupt—because it made bad bets on European sovereign debt, by way of leveraging positions 100-to-1. Yeah, I know: Stupid. Anyway, they went bankrupt—which in and of itself is no big deal. It’s not as if it’s the first time in history that a brokerage firm has gone bust. But to me, the big deal in this case was the way the bankruptcy was handled.

Now there are several extremely serious aspects to the MF Global case: Specifically, how their customers were shut out of their brokerage accounts for over a week following the bankruptcy, which made it impossible for those customers to sell out of their positions, and thus caused them to lose serious money; and of course how MF Global was more adept than Mandrake the Magician at making money disappear—about $1 billion, in fact, which still hasn’t turned up. These are quite serious issues which merit prolonged discussion, investigation, prosecution, and ultimately jailtime.

But for now, I want to discuss one narrow aspect of the MF Global bankruptcy: How authorities (mis)handled the bankruptcy—either willfully or out of incompetence—which allowed customer’s money to be stolen so as to make JPMorgan whole...

December 27, 2011

The Jig Is Up, or at least, Revealed: Keiser Report: Möbius Strip of Fraud

Keiser explains it all---Lehman, JPMorgan, Bernie Madoff, etc. and ties it all up with a bow.

December 27, 2011

CIA won't disclose involvement in crackdowns on #OWS --- THIS WOMAN WANTS TO BLOW IT OPEN

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December 27, 2011

CONTRAST TO GREECE: Iceland is our modern Utopia

....To forget that the world is not a Greek tragedy in which the wheel of fate or of capital turns without regard to human reason is to deny reality. It is obvious that the wheel is moved by human beings. All that we can imagine being possible is as real as what the markets tell us is the reality. A sense of possibilities and the human imagination itself, recovered in Iceland, teach us that they are as true and real as the gargantuan necessity of capitalism. We just have to heed this call to discover the trap that is trying to make us believe in that necessity. There is no alternative, they declare. Perhaps some of those announcing sacrifices to us have bothered to check their map of the world?

Iceland has shown that our cartography contains more than they are telling us. That it is possible to dominate – and therein lies the principle of freedom – that ‘necessity’. Iceland, however, is not a model. It is one of the possibilities for doing things differently. The intent of the crowds in Iceland to build the future with their decisions and their imagination shows us the reality of an alternative. Because the possibility of doing things differently as proclaimed by the crowd is as real as the need to carry on doing things the same way that is demanded by capital. In Iceland they have decided not to let the shape of tomorrow be dictated by the tragic wheel of necessity. Will the rest of us continue permitting what is real to be defined by capital? Will we continue to surrender the future, the realm of the possible, and our imaginations to the banks, the corporations and governments that claim to be doing everything that can possibly be done?

MORE AT LINK http://www.presseurop.eu/en/content/article/1319821-iceland-our-modern-utopia

December 24, 2011

Weekend Economists Merry Little Christmas December 23-26, 2011

Well, what could we possibly feature this weekend?

What else? Our artistry will comprise carols and the Grand Masters' nativity of hope scenes. Our topic will be bringing Enlightenment (get it) to the world, and the change of the seasons.



I myself approach this season in every possible way except "religious". I sing in a Baptist choir, where the theme was that Xmas was nice, and the star was bright, but the whole point is the Cross (capital C) and Easter. A case of brutal torture and inhumane death--just the sort of thing to celebrate in a war-mongering culture!

Well, as a mother and a pagan at heart, I truly think birth is the whole point. The one true miracle, available to most people, and each birth is a promise, a potential, a gift. To a family, a nation, the world.

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That's MY story, and I'm sticking to it.

December 23, 2011

The 99% Declaration

(RECALL THAT ICELAND GENERATED A NEW CONSTITUTION FOR ITSELF ONLINE WITH 100% OF THE POPULATION ABLE TO CONTRIBUTE TO THE FORMATION...

SEE ALSO (MORE APPALLED COMMENTARY)
http://www.guardian.co.uk/world/2011/jun/09/iceland-crowdsourcing-constitution-facebook )

THE PLAN

1. Elect one man and one woman from each of the 435 congressional districts in March 2012 plus six delegates from Washington,D.C., Puerto Rico and the U.S. Territories. Voting will be online, possibly telephone and at local polling places.

2. Between March 2012 and July 2012, these delegates will draft a list of grievances. Candidates running in the primaries and general election will be called upon to state their positions on the issues being debated by the 876 delegates.

3. During the week of July 4, 2012, the 876 delegates will meet in Philadelphia at a National General Assembly to ratify and sign a final petition for a redress of grievances and solutions and plan a potential new independent party to run in the 2014 mid-term election.

4. The ratified petition for a redress of grievances shall be served upon all three branches of government and all candidates running for federal political office in 2012.

5. The National General Assembly will then wait a reasonable period of time for the 113th Congress, President and Supreme Court to act upon and redress the grievances listed in the petition. Political candidates in the 2012 election will be asked whether they support the petition.

6. If the grievances are not redressed and solutions implemented within a reasonable time, the National General Assembly will reconvene electronically or in person and organize a new independent political party to run for all of the 435 House seats and 33 Senate seats in 2014.


http://www.the99declaration.org/

MUCH MORE AT WEBSITE

December 22, 2011

YOU HAVE GOT TO SEE THIS: THE SHOCKING TRUTH OF THE PENDING EU COLLAPSE!

http://www.youtube.com/watch?feature=player_embedded&v=EPcWHBPYOSU

Po, you may be in business sooner than you think. They are literally crazy. This REEKS of GS.

December 20, 2011

Income inequality in the Roman Empire

http://persquaremile.com/2011/12/16/income-inequality-in-the-roman-empire/

Over the last 30 years, wealth in the United States has been steadily concentrating in the upper economic echelons. Whereas the top 1 percent used to control a little over 30 percent of the wealth, they now control 40 percent. It’s a trend that was for decades brushed under the rug but is now on the tops of minds and at the tips of tongues...Since too much inequality can foment revolt and instability, the CIA regularly updates statistics on income distribution for countries around the world, including the U.S. Between 1997 and 2007, inequality in the U.S. grew by almost 10 percent, making it more unequal than Russia, infamous for its powerful oligarchs.

The U.S. is not faring well historically, either. Even the Roman Empire, a society built on conquest and slave labor, had a more equitable income distribution...To determine the size of the Roman economy and the distribution of income, historians Walter Schiedel and Steven Friesen pored over papyri ledgers, previous scholarly estimates, imperial edicts, and Biblical passages. Their target was the state of the economy when the empire was at its population zenith, around 150 C.E. Schiedel and Friesen estimate that the top 1 percent of Roman society controlled 16 percent of the wealth, less than half of what America’s top 1 percent control. To arrive at that number, they broke down Roman society into its established and implicit classes. Deriving income for the majority of plebeians required estimating the amount of wheat they might have consumed. From there, they could backtrack to daily wages based on wheat costs (most plebs did not have much, if any, discretionary income). Next they estimated the incomes of the “respectable” and “middling” sectors by multiplying the wages of the bottom class by a coefficient derived from a review of the literature. The few “respectable” and “middling” Romans enjoyed comfortable, but not lavish, lifestyles. Above the plebs were perched the elite Roman orders. These well-defined classes played important roles in politics and commerce. The ruling patricians sat at the top, though their numbers were likely too few to consider. Below them were the senators. Their numbers are well known—there were 600 in 150 C.E.—but estimating their wealth was difficult. Like most politicians today, they were wealthy—to become a senator, a man had to be worth at least 1 million sesterces (a Roman coin, abbreviated HS). In reality, most possessed even greater fortunes. Schiedel and Friesen estimate the average senator was worth over HS5 million and drew annual incomes of more than HS300,000...After the senators came the equestrians. Originally the Roman army’s cavalry, they evolved into a commercial class after senators were banned from business deals in 218 B.C. An equestrian’s holdings were worth on average about HS600,000, and he earned an average of HS40,000 per year. The decuriones, or city councilmen, occupied the step below the equestrians. They earning about HS9,000 per year and held assets of around HS150,000. Other miscellaneous wealthy people drew incomes and held fortunes of about the same amount as the decuriones.

In total, Schiedel and Friesen figure the elite orders and other wealthy made up about 1.5 percent of the 70 million inhabitants the empire claimed at its peak. Together, they controlled around 20 percent of the wealth. These numbers paint a picture of two Romes, one of respectable, if not fabulous, wealth and the other of meager wages, enough to survive day-to-day but not enough to prosper. The wealthy were also largely concentrated in the cities. It’s not unlike the U.S. today. Indeed, based on a widely used measure of income inequality, the Gini coefficient, imperial Rome was slightly more equal than the U.S...The CIA, World Bank, and other institutions track the Gini coefficients of modern nations. It’s a unitless number, which can make it somewhat tricky to understand. I find visualizing it helps. Take a look at the following graph.

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Gini coefficient of inequality

To calculate the Gini coefficient, you divide the orange area (A) by the sum of the orange and blue areas (A + B). The more unequal the income distribution, the larger the orange area. The Gini coefficient scales from 0 to 1, where 0 means each portion of the population gathers an equal amount of income and 1 means a single person collects everything. Schiedel and Friesen calculated a Gini coefficient of 0.42–0.44 for Rome. By comparison, the Gini coefficient in the U.S. in 2007 was 0.45....Schiedel and Friesen aren’t passing judgement on the ancient Romans, nor are they on modern day Americans. Theirs is an academic study, one used to further scholarship on one of the great ancient civilizations. But buried at the end, they make a point that’s difficult to parse, yet provocative. They point out that the majority of extant Roman ruins resulted from the economic activities of the top 10 percent. “Yet the disproportionate visibility of this ‘fortunate decile’ must not let us forget the vast but—to us—inconspicuous majority that failed even to begin to share in the moderate amount of economic growth associated with large-scale formation in the ancient Mediterranean and its hinterlands.” In other words, what we see as the glory of Rome is really just the rubble of the rich, built on the backs of poor farmers and laborers, traces of whom have all but vanished. It’s as though Rome’s 99 percent never existed. Which makes me wonder, what will future civilizations think of us?

Source:

Scheidel, W., & Friesen, S. (2010). The Size of the Economy and the Distribution of Income in the Roman Empire Journal of Roman Studies, 99 DOI: 10.3815/007543509789745223