Meat computers with cultural programs

SUBHEAD: Millions of us can add up to an irresistible force.

By Paul Chefurka on 28 April 2009 in Approaching the Limits to Growth -  
(http://paulchefurka.ca/CulturalComputer.html)

   
Image above: "Wonder" by Alex Grey http://www.alexgrey.com. From (http://zukiwashere.blogspot.com/2011_06_01_archive.html)

I've been looking for the root cause of the converging crisis of civilization for a while now. It's a rather Quixotic quest that has led me down more than a few rabbit holes. One significant error I committed along the way was to accept an idea popular in evolutionary psychology – that humans are little more than genetically programmed automata. In this worldview the structure of our brain and consequently the behaviour it manifests evolved through natural selection over hundreds of thousands of years. The outcome was a creature that was exquisitely adapted to life on the African veldt. Unfortunately, the qualities that made us so fit in that environment turned out to be maladaptive in the context of modern industrial civilization.

The theory goes on to propose that because so much of our behaviour is hard-wired we can do virtually nothing to alter it. The implication is that we are a tragically flawed species, doomed by our physiology to over-consume, over-compete and over-grow, all in a vain attempt to dominate the world we feel so separate from. Fortunately, a bit more reading convinced me of the major role that our shared cultural narrative plays in determining how we behave. In this view (one that I first encountered in the writing of Daniel Quinn) if we can simply change the story we tell ourselves about ourselves, we can change the way we interact with the world.

This is an attractive idea, because it's a lot easier to change a story than it is to change the structure of our brains. Not only that, there's good evidence we've actually done it a number of times over our history – for example in the shift from hunter-gatherer to agricultural societies, and the relatively sudden cultural transformation from the Middle Ages to the Renaissance.

Unfortunately, accepting this view of human plasticity still left an outstanding problem. Our brain is in fact evolved, so to at least some extent our behaviour patterns are genetically hard-wired. For instance, our hyperbolic discount function (our tendency to react strongly to immediate, visible threats, but to react much less or not at all to distant, abstract threats) is a real phenomenon rooted in our brain structure.

As well, the sense of separation that allows us to view that the world as nothing but a basket of resources for human use is the Faustian price we have paid for the self-awareness that springs from our neocortex. Any search for root causes has to take both these physical and cultural factors into account. Here is an analogy I believe brings these two determinants of human behaviour into perspective. I've become convinced that our predicament has been created by a feedback between our evolved brain and our cultural beliefs.

Our brain with its hyperbolic discount function, unconscious decision-making and the sense of separation seems to me to be necessary but not sufficient to produce the dilemma we find ourselves trapped in. If the human organism is loosely imagined as a "computer", the brain is the hardware and our cultural beliefs are the software – the programming that the hardware expresses in action. Either one without the other is relatively inert, at least on the larger stage. The hardware has an ability to act autonomously of course, but this is a fairly rudimentary capacity, sort of like the BIOS in a PC. The BIOS can't produce Google Earth or a Total Information Awareness database.

You need complex software for that, and this is precisely what "culture" provides. If we want to change the behaviour of a computer, we load a new program. Despite the fact that the underlying hardware and BIOS are unchanged, the output is radically different. So if the analogy is correct, we can indeed change human behaviour, perhaps radically, by downloading a new cultural narrative, a new myth, a new story of who we are. Given that we can't change our hardware, we work with what we can change – the software.

My choice for a new program is the one hinted at by Paul Hawken's book "Blessed Unrest" and embodied in two million or more small, independent, local organizations around the world – a enormous collection of independent, fully distributed, completely resilient, localized cultural programs that maximize the diversity of human response to the crisis. It's the largest social movement the world has ever seen, though it's still largely unrecognized as such. If anything can improve the odds that something noble from the human experiment might survive the coming change, transition or bottleneck, I believe this is it.

Not coincidentally, so does the Pachamama Alliance and their Awakening the Dreamer initiative which I support enthusiastically. The coming changes are likely to shatter many of the guardian institutions whose primary role is to keep us running the same old cultural program of domination, exploitation, hierarchy and coercion (those institutions being our governments, corporations, religions, educational institutions and the globalized media).

When the hold of those institutions weakens, having the seeds of cultural change already widely scattered will maximize the chance that something different will emerge here and there – that some parts of the global human computer will begin to run different programs. And since the future is inherently unknowable, "different" has at least some small chance of being "better", not just the same or worse. There are no guarantees, of course.

We may yet succumb to flaws in our BIOS. But the fact that the program we're running now is so much more than just a genetically-determined BIOS implies that another program may be possible. The way things are now may not be the only possible way humans can live. And in the final analysis, what do we have to lose by trying?

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Food - Not to Worry!

SUBHEAD: Food will shift from being a minor piece of the US economy.
By Toby Hemenway on 26 April 2009 in Ecological Design and Permaculture http://patternliteracy.com/food.html Image above: Empty shelves and food rationing may not be our number one problem. From http://suzieqq.wordpress.com/2008/04/22/food-rationing-hits-the-united-states Is Food the Last Thing to Worry About? Our food system is woefully dependent on petroleum, as writers such as Richard Heinberg (1) and Michael Pollan (2) have eloquently pointed out. Soaring food costs have brought on riots in some countries, and in unstable nations, famine continues to be a regular visitor. Fears of empty grocery shelves have made food security the centerpiece of many a post-Peak Oil plan, and among those watching energy descent, a common refrain is that the best way to guarantee your food supply is to buy a piece of land and grow your own. Yet in the developed world, especially the breadbasket nations such as the US, Canada, and other food-exporting countries, the food network may be one of the last system to fail during energy descent. In developing a wise post-Peak strategy, assessing relative risks is critical. Devoting large amounts of time and resources to events that are less likely leaves us unprepared for more probable difficulties. I don’t want to discourage anyone from growing food—I’m a serious gardener myself and could list dozens of excellent reasons for doing it. But I think there are many reasons not to be focusing primarily on food as the system most likely to fail. This isn’t to say that industrial, oil-based agriculture is invulnerable, let alone sustainable. And we may see temporary shortages of specific foods. But there are many reasons why our fears of a food collapse—particularly when they lead us to a go-it-alone, grow-your-own response—may be distracting us from focusing on more immediate and likely risks. First, two notes of clarification: This article is about net food-exporting nations such as the US, where I live. In the less-developed world, where food growing has been abandoned for export crops that are sold for cash to import commodity food, the food system is far more vulnerable. And by “food collapse” I mean a prolonged inability to produce essential foods, not brief or local shortages of certain items, or high prices while supplies are ample. Volatile commodities markets, weather, and the other gyrations of our uncertain era mean that temporary or local shortages can always occur. Food gets a lot of attention in part because we need it to survive, but also because one solution to a food crisis—growing your own—seems doable. I suspect we focus on food in part because providing it appears much more possible than, say, keeping the financial, health care, or automotive industries running. Why would I argue that food collapse in breadbasket nations is not likely, when today’s farming is so dependent on hydrocarbons? Our food system is complex—much more so than it needs to be—but many of our society’s other structures are far more complex, and thus more vulnerable. Joseph Tainter (3) and others point out that complex systems need increasing energy inputs, and eventually reach a point of diminishing returns, so that the costs of complexity eventually outrun its benefits. When inputs decline, the most complex systems are often the first to fail, since they need vast resources to maintain them. With that in mind, we can ask what is likely to fail first during energy descent. That way, we’ll know what we should direct our energies toward preparing for. Is it any wonder that one of the first complex systems to collapse has been our financial system? The energy and complexity used in Byzantine financial instruments such as collateralized debt obligations and credit default swaps, and in moving trillions of dollars through millions of highly orchestrated transactions each day, is immensely greater than what it takes to grow, process, and ship food. Another system teetering near collapse is health care, and it, too, is a fantastically complicated system needing sophisticated, expensive equipment and years of specialized training for practitioners, all administered by an insurance system of equally staggering complexity. Thus the most complex systems are already collapsing. When viewed through the lens of complexity, the relative robustness of the developed world’s food system, even as finance collapses and health care becomes increasingly unavailable, is less mysterious. It would bolster my argument to show quantitative measurements of these systems’ relative complexity, and for these I’ll point to Howard T. Odum (4) and his concepts of emergy (not energy, but embedded energy) and transformity. Emergy measures the total solar energy used directly and indirectly to make a product or service. Transformity builds on this, and means the emergy of one type required to produce a unit of energy of another type. It describes conversion losses and energy quality. For example, think of a food chain. A million calories of solar energy can make a given quantity of algae. When plankton eat this, it might yield 1000 calories of plankton. These plankton, when eaten, become one calorie of fish. Thus the transformity of that one calorie of fish is one million calories: the amount of sunlight used at the beginning of the food chain divided by the one calorie of fish produced. The plankton, being lower on the food chain, have a lower transformity: 1000 calories, or a million calories of algae divided by 1000 calories of plankton produced. Processes that have higher transformity don’t just need more energy per output. They also contain more energy conversion steps, which bring efficiency losses and places for the system to fail. Also, high-transformity systems usually need more complex technologies than processes of lower transformity. Plankton are simpler than fish. So how complex is our food system? Odum’s work tells us that food transformities in industrial cultures are on the order of 25,000 to 100,000 sej/J (solar emergy joules input per joule gained). This is low compared to nearly all other familiar goods and services. Odum says that the production of paper has a transformity of 215,000 sej/J; electricity, 200,000 sej/J; cement, 750,000,000 sej/J; and complex transactions based on digital technologies, such as investment banking, have transformities in the billions or higher. If complexity, transformity, and stability are related—and I think they are—then activities of great complexity and high transformities, including office jobs, electricity, communications, and nearly all social and economic services, will be disrupted before food production will be. We’re seeing that process unwind today. Training and supplying an investment banker or surgeon is more complex than doing the same for a farmer. As complexity plummets due to energy descent, jobs and products of lower transformity are more likely to remain. But even if the food system isn’t all that complex, you might argue, we have paved over much of our farmland and use oil to make food. Let’s look at the numbers. The US is a net exporter of food, and produces roughly 4000 calories of food per person (5). To stock this larder, the US uses roughly 3 million barrels per day of petroleum, or 15% of our total consumption (6). Thus the US could cut the amount of oil used by the food system in half and still provide a basic 2000-calorie diet. That’s 1.5 million barrels per day or its equivalent, which should be available for some time. This means that neither complexity nor oil are likely to be limiting factors on food production in breadbasket nations until after the failure of other more complex, energy-intensive elements of our lives. Cheap oil has freed us to pour staggering amounts of energy, both human and fossil, into non-essentials, such as the entertainment, recreation, tourism, sports, media, and other fuel-gobbling industries. Inexpensive oil lets much of the developed world endlessly buzz around in inefficient cars and jets. In other words, 85% of our fossil-fuel consumption is used for things other than food, usually wastefully. As oil becomes expensive we will choose to redirect a modest portion of that 85% away from long commutes, non-essential industries, and other symptoms of cheap oil, in order to feed ourselves. It’s likely that as we round Hubbert’s bend we’ll return to putting 30-50% of our energy use toward food production, as has been the case for most of human history (7). This reordering of oil priorities can buy us the time needed to reconfigure our grossly inefficient, hydrocarbon-based food system into something far more localized and sustainable, if we’re smart. Another oft-cited argument for food collapse is that fossil-fuel supplies are unreliable. What if foreign producers cut us off? The US currently produces about 5.2 million barrels of oil per day. Canada and Mexico are the top two petroleum importers for the US, providing about 40% of our imports, or 3.8 million bbl/day (8). Thus 9 million bbl/day are currently available from nearby sources. That’s three times the oil used by our food system, and six times what is needed for a basic diet. Natural gas, used to make nitrogen fertilizers, is a critical agricultural resource that also comes from relatively stable sources. Canada provides 95% of America’s natural-gas imports. The continent’s intertwined economies and the realities of geopolitics make it probable that hydrocarbons will flow long enough for the US to shift to a less oil-intensive agriculture. Obviously, oil output will continue its decline, and there are bound to be periodic crises, but the numbers suggest that starvation in the US is far from a certainty. Food production is truly the oldest profession. We’re good at it, we’ve been doing it for 10,000 years, and it is a relatively simple system to run. It is at the base of a large cultural pyramid, which makes it fundamental, so although disrupting it would be catastrophic, it is also more elementary and thus easier to keep running than all the systems above its level of complexity. There are gardeners in over 71 million American households (9), so there is a sizable knowledge base to help with the transition to more local food production. Almost certainly, food will shift from being a minor piece of the US economy to once again requiring one-third to one-half of our labor and energy. The example of Cuba, which in a few years retooled its agriculture system after a sudden and near-total cutoff of oil, shows that food systems can be modified quickly. How long would it take us to convert the nearest city park, or a soybean field that’s growing feedstocks for newspaper ink and car lacquer, into food production if it were urgent? One season. The recent substitution of ethanol corn for soybeans over vast acreages in a single season shows how quickly farmers can respond to new markets. And as food prices rise, people thrown out of work by energy descent will find jobs growing food, as Sharon Astyk and Aaron Newton have suggested in their book, A Nation of Farmers. As cheap shipping disappears, can we feed ourselves locally? To gauge this, we need to know if there is enough farmland near cities to feed their populations. Researchers at Cornell University found that the basic calories to feed Rochester, New York’s population of 225,000 could be grown on existing cropland within 16.5 miles (26.6 km) of the city limits and would cover 36,000 hectares (90,000 acres) (10). This admittedly simplistic analysis looks only at caloric needs, not overall nutrition. To provide a balanced and diverse diet might require a larger area, so let’s say we’d need twice as much land, or 180,000 acres. That area is still within 25 miles of the city, close enough to easily bring goods to market. This could save much of the fuel used today to transport the infamous 1500-mile salad. Plus, the Cornell analysis assumes wasteful conventional agriculture techniques, not high-intensity ones that use local nutrient sources such as composted waste and animal and human manure, as well as other resource-saving methods that people dependent on local food would readily use. And though the largest cities might be unable to feed themselves locally, but it is likely that for them we will set fuel priorities to ship food from more distant farms. And it is the reordering of fuel priorities that leads us to one of the most powerful reasons that food supplies are less likely to run out than almost any other resource. Politicians understand that hungry people topple governments. We’re deeply imbued with cultural lore reflecting this. Most people know little else about Marie Antoinette other than the apocryphal taunt to starving peasants that ensured her rendezvous with the guillotine, “Let them eat cake.” Trotsky noted that every society is only three meals away from a revolution. History shows that any functional state short of a kleptocracy will allow almost every other service—health care, banking, sanitation, schools, transportation—to languish before it allows its people to go hungry. Preserving the flow of at least 1.5 million barrels of oil per day for food will be a critical priority of the US government. Let me be the first to admit that there’s still some chance of food collapse. Perhaps stupid or corrupt leaders will choose to direct energy resources not toward food but to the military or the rich. Or it’s possible that the link between the financial sector and food, via the futures and commodities markets, may play havoc with food supplies. And it’s certain that adjusting from today’s food consuming 10% of the average family budget to the historical norm of 30% to 50% will be disruptive. Whatever your chosen post-Peak scenario, it’s smart to keep emergency food and water on hand, as much as makes you feel comfortable. But focusing on surviving a food-system collapse reminds me of the story of the fellow searching for his keys under the streetlight. He didn’t lose them there, but that was the only place where the light was bright enough to see. In crisis, we often default to doing what we know even if it’s not the wisest action. We can’t individually fix the economy or health care, yet we certainly can grow some food, and that may be why it is central to many post-Peak plans. And I agree: growing food is simple. It’s an ancient skill that is at the heart of human culture, and even in its industrial manifestation, it is a robust system that is less complex and energy-intensive than most of society’s other activities. That’s why I suspect the food system will last longer than much of the rest of the oil society. Although brief disruptions are certainly possible, in breadbasket nations food is more likely than many other aspects of our culture to make it through the transition. But for a thousand other reasons, plant a garden anyway. References 1. Heinberg, Richard. “What Will We Eat as the Oil Runs Out?” http://www.richardheinberg.com/museletter/188 2. Pollan, Michael. “Farmer in Chief,” New York Times Magazine, October 8, 2008. http://www.nytimes.com/2008/10/12/magazine/12policy-t.html 3. Tainter, Joseph. The Collapse of Complex Societies. 4. Odum, Howard T. A Prosperous Way Down. 5. Putnam, J, J Allshouse, L. S. Kantor. U.S. Per Capita Food Supply Trendshttp://www.ers.usda.gov/publications/FoodReview/DEC2002/frvol25i3a.pdf 6. I’m taking the middle of estimates that vary from 19%, (see Michael Pollan, above), to 10% (see Martin C. Heller and Gregory A. Keoleian; Life Cycle-Based Sustainability Indicators for Assessment of the U.S. Food System. http://css.snre.umich.edu/css_doc/CSS00-04.pdf 7. Braudel, Fernand. The Structures of Everyday Life. 8. Energy Information Administration. Crude Oil and Total Petroleum Imports, Top 15 Countries. http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html 9. National Gardening Association, 2005. Environmental Lawn and Garden Survey. 10. Peters, Christian J., Arthur J. Lembo, and Gary W. Fick, 2005. A Tale of Two Foodsheds: Mapping Local Food Production Capacity Relative to Local Food Requirements. http://crops.confex.com/crops/viewHandout.cgi?uploadid=226

A Day in the Air

SUBHEAD: A group of Swiss plotted every world flight in a twenty-four hour period SOURCE: Jill Brody (eastorchard@verizon.net) By staff on 12 December 2008 for News.Sky.com http://news.sky.com/skynews/Home/World-News/Every-Flight-In-The-World-Scientists-Map-Out-All-Commercial-Flights-Across-Globe-Into-YouTube-Video/Article/200812215177993 A group of budding scientists have traced every flight in the world over a 24-hour period and plotted them onto an impressive video map, The World Flight Map. video above: The map shows paths of yellow dots, each representing a commercial flight during a twenty-four hour period. From www.youtube.com The map shows clusters of yellow dots, each representing an airplane flight. The science buffs from Switzerland collected data on each commercial flight and put it together to make the video map. The finished product shows clusters of yellow specks moving across the globe, giving a fascinating insight into where the majority of air traffic originates. It even shows how the number of flights fluctuates according to the time of day. Although the finished product looks as if it could have taken years of complicated research, number crunching and graphics to develop, it was in fact quite simple. Dr Karl Rege from the Zurich School of Applied Sciences said: "We used a commercial website called FlightStats to gather global flight and schedule information - so there was no need to contact the different airlines." Using that flight info, they used a clever computer system to simulate the path of all flights from start to finish, assuming the flight path would be direct. They then mapped this on a Miller cylindrical projection of the world map, which shows the globe on a rectangular map with quite an accurate representation of the poles. A moving haze was then added to resemble the shifting darkness of night - and the video was born. "After that we drew it, that was it," said Dr Rege. "It was that easy. We are astonished that nobody did it beforehand." So far, the simulation has been viewed almost 68,000 times online and has a five-star rating on YouTube. The group also created similarly nifty videos of air traffic above the United States, which shows a soaring number of flights over the east coast in the morning. Other videos include all FedEx flights over the US and a much simpler-looking video of flights over Europe, which changes angles and shows Britain, France and Germany as the hub of air traffic activity.

It’s All the Same Culture

SUBHEAD: The fall of modern culture and the rise of earth culture.
By Chuck Burr on 20 April 2009 in CultureQuake http://www.culturequake.org/Culturequake/Home/Entries/2009/4/20_Osama_Bin_Lowrider__We_are_All_the_Same_Culture.html Image above: An Asmat tribal member of Papua, New Guinea, where Polynesian culture began. From http://angryindian.blogspot.com/2009_03_01_archive.html Our political discussions and media coverage are far too shallow to be useful. We must go deeper and much further back to understand the world today and learn how to get where we want to go. Almost everyone misunderstands what culture is. Most think it is soda pop, pop stars, blue jeans, language, and TV. Some think it is capitalism, communism, or progressivism. Some see culture as Western culture or Eastern culture. Our Culture The answer is, that we are all Takers. We all belong to the same culture, tea-to-tiler or Taliban, one culture. The Dali Lama or Duncan Donuts cop, one culture. Our Taker culture began 10,000 years ago with the agricultural revolution when they locked up the food, began the population–food race, invented war, started privatizing land, and ended the formerly one universal religion of animism. It was forgotten in just a few generation that there used to be probably 10,000 unique Leaver cultures before our now universal Taker culture—The Great Forgetting. Some suggest that modern progressive exuberance has replaced Christianity as the modern religion or culture. The believe is that “here and now” and a better life for each generation from technology has replaced Christianity's faith in an “unseen unknown afterlife” and will culminate in a technological singularity that will save humanity. They are right to identify exuberance, but today’s exuberance is the same that caused a tribe of agriculturalists between the Euphrates and Tigris rivers to start overtaking their Leaver neighbors in an unending conquest that is now largely complete. The age of Enlightenment, the Renaissance, and Manifest Destiny are past examples of the same exuberance. The ultimate hubris was inventing one god in a human form. Today, all but one or two million Leavers, versus of 6.8 billion Takers, are left alive or are not yet assimilated. It’s Pointless To Discuss Anything Else Peak oil and financial collapse seem important because they immediately affect us and are within our lifetime scale. But, they are just noise along the way of our 10,000 year Taker cultural odyssey. Nothing will change for our children until our culture ends. It will be one rise and fall, migration and conquest, resource war after resource war on and on until our culture is replaced with a resilient diversity of many new cultures. Until then we are just building and operating the Taker prison for our children and ourselves. Only when our culture ends, will the earth be allowed to start healing itself. A change of leadership of the same culture is also a waste of time. Here comes the important part of the essay: discussing anything else today except walking away from our culture is pointless. This has to do with the difference between programs and vision or story. When Columbus invaded Haiti, he brought with him the greatest virus of all, a new cultural story. The story of Leaver cultures before the agricultural revolution was, “Humanity belongs to the earth.” The Taker cultural story is, “The earth belongs to man.” This has been the crux of the creation and perpetuation of our culture for the last 10,000 years. We have had technology since the digging stick; technology has nothing to do with culture. It is how you value humanity in relation to “our relations” or the earth and what you do with the technology that matters. A program is doing more of the same. If the effort in Afghanistan is failing, send more troops. If test score are falling, spend more on a failed educational system. If the banks are failing, send them more money. A program is like a stick in the river of our culture. Programs run contrary to the cultural story. Recycling is a program to combat our consumer economy. Smart grids are a program to combat our excessive use of cheap fossil fuel energy. Green building is a program to combat urban sprawl. Food aid is a program to combat the population–food race. Organic farming is a program to combat industrial totalitarian agriculture. Programs are fruitless efforts to combat the symptoms of our cultural story that the world belongs to man. Until the story is reversed, all programs are a complete waste of time. If new cultures do not replace our Taker culture, there will be no change in course or Great Turning. If you truly want peace, social justice, and Ecotopia, you have to starting living under the remembered story that humanity belongs to the earth. The Problem is Not Humanity Humanity has lived on the earth for three or four million years. For millions of years we lived in harmony or symbiosis with the ecosystem. We had a stable population. A “give it to them as good as you get” it erratic retaliator strategy existed instead of war. Tribalism and animism were the universal human organizational structures and religion. Tribalism is the one and only evolutionarily proven human social organizational system. Tribalism is to humans what herds are for deer, pods are for whales, schools are for fish, and hives are for bees. The problem began 10,000 years ago when our culture was created. You Cannot Invent a New Social Organizational System Here is the rub. You just can’t invent a new social organizational system like a tribe. We have been trying to perfect a new social organizational system called civilization for 10,000 years. But, civilization continues to fail more each year for more people and species. If civilization was going to create world peace and plenty for all it would have done so already. It never can because a story based on one species taking everything it can gets it’s hands on will never work. We even treat members of our own species as poorly as we do all other species we exploit. The Great Remembering The only solution worth discussion is developing new cultures that live by the original story that humanity belongs to the earth. Going green is not enough. Driving a hybrid and having a backyard vegetable garden is not going to get you there. It’s deeper than that. I am beginning to think we are going to have to start depaving, give up our iPods, and start making music for ourselves. I am not sure how far this is going to have to go. But I do know that it has to go back to a level in which our population and method of consumption allows the earth to start rebuilding biodiversity and topsoil. We will have to remember our relationship with the cultivars, how to give support to get support, how to live on local sunlight, and we might even have to remember animism. We have a long way to go. I am starting the journey for my children and myself. Hierarchies have strong defenses for attacks from below. However, they have no defense from abandonment. The point is we have to create new cultures that borrow from what we can from the present that fits within the structure of the past. This is the only way we will make a difference. We have to become the change we want to see, find like-minded friends, and start our own local tribes. We must develop a high enough level of group self-reliance that will allow us to walk away. We need doers, not talkers, not surfers, and not bloggers. We need to be walking toward something better, not away from something we don’t like. Its time to start living your truth. Visit www.culturequake.org to learn more about the book Culturequake: The Fall of Modern Culture and the Rise of Earth Culture and the blog. Notes: Daniel Quinn Ishmael Joanna Macy The shift to a life-sustaining civilization, The Great Turning Ernest Callenbach Ecotopia Marija Gimbutas The Civilization of the Goddess: The World of Old Europe Dan Piraro Bizarro depave.org About Depave

Waste Not, Want Not

SUBHEAD: We need to junk our disposable lifestyle.
By Bill McKibben on 19 April 2009 in Mother Jones http://www.motherjones.com/environment/2009/05/waste-not-want-not Image above: A World War One poster from the Canada Food Board urging canning perishables. Once a year or so, it's my turn to run recycling day for our tiny town. Saturday morning, 9 to 12, a steady stream of people show up to sort out their plastics (No. 1, No. 2, etc.), their corrugated cardboard (flattened, please), their glass (and their returnable glass, which goes to benefit the elementary school), their Styrofoam peanuts, their paper, their cans. It's quite satisfying—everything in its place. But it's also kind of disturbing, this waste stream. For one, a town of 550 sure generates a lot—a trailer load every couple of weeks. Sometimes you have to put a kid into the bin and tell her to jump up and down so the lid can close. More than that, though, so much of it seems utterly unnecessary. Not just waste, but wasteful. Plastic water bottles, one after another—80 million of them get tossed every day. The ones I'm stomping down are being "recycled," but so what? In a country where almost everyone has access to clean drinking water, they define waste to begin with. I mean, you don't have a mug? In fact, once you start thinking about it, the category of "waste" begins to expand, until it includes an alarming percentage of our economy. Let's do some intellectual sorting: There's old-fashioned waste, the dangerous, sooty kind. You're making something useful, but you're not using the latest technology, and so you're spewing: particulates into the air, or maybe sewage into the water. You wish to keep doing it, because it's cheap, and you block any regulation that might interfere with your right to spew. This is the kind of waste that's easy to attack; it's obvious and obnoxious and a lot of it falls under the Clean Air Act and Clean Water Act and so on. There's actually less of this kind of waste than there used to be—that's why we can swim in most of our rivers again. There's waste that comes from everything operating as it should, only too much so. If carbon monoxide (carbon with one oxygen atom) exemplifies pollution of the first type, then carbon dioxide (carbon with two oxygen atoms) typifies the second. Carbon monoxide poisons you in your garage and turns Beijing's air brown, but if you put a catalytic converter on your tailpipe it all but disappears. Carbon dioxide doesn't do anything to you directly—a clean-burning engine used to be defined as one that released only CO2 and water vapor—but in sufficient quantity it melts the ice caps, converts grassland into desert, and turns every coastal city into New Orleans. There's waste that comes from doing something that manifestly doesn't need doing. A hundred million trees are cut every year just to satisfy the junk-mail industry. You can argue about cutting trees for newspapers, or magazines, or Bibles, or symphony scores—but the cascade of stuffporn that arrives daily in our mailboxes? It wastes forests, and also our time. Which, actually, is precious—we each get about 30,000 days, and it makes one a little sick to calculate how many of them have been spent opening credit card offers.
Or think about what we've done with cars. From 1975 to 1985, fuel efficiency for the average new car improved from 14 to 28 miles per gallon. Then we stopped worrying about oil and put all that engineering talent to work on torque. In the mid-1980s, the typical car accelerated from 0 to 60 mph in 14.5 seconds. Today's average (even though vehicles are much heavier) is 9.5 seconds. But it's barely legal to accelerate like that, and it makes you look like an idiot, or a teenager. Then there's the waste that comes with doing something maybe perhaps vaguely useful when you could be doing something actually useful instead. For instance: Congress is being lobbied really, really hard to fork over billions of dollars to the nuclear industry, on the premise that it will fight global warming. There is, of course, that little matter of nuclear waste—but lay that aside (in Nevada or someplace). The greater problem is the wasted opportunity: That money could go to improving efficiency, which can produce the same carbon reductions for about a fifth of the price. Our wasteful habits wouldn't matter much if there were just a few of us—a Neanderthal hunting band could have discarded six plastic water bottles apiece every day with no real effect except someday puzzling anthropologists. But the volumes we manage are something else. Chris Jordan is the photographer laureate of waste—his most recent project, "Running the Numbers," uses exquisite images to show the 106,000 aluminum cans Americans toss every 30 seconds, or the 1 million plastic cups distributed on US airline flights every 6 hours, or the 2 million plastic beverage bottles we run through every 5 minutes, or the 426,000 cell phones we discard every day, or the 1.14 million brown paper supermarket bags we use each hour, or the 60,000 plastic bags we use every 5 seconds, or the 15 million sheets of office paper we use every 5 minutes, or the 170,000 Energizer batteries produced every 15 minutes. The simple amount of stuff it takes—energy especially—to manage this kind of throughput makes it daunting to even think about our waste problem. (Meanwhile, the next time someone tells you that population is at the root of our troubles, remind them that the average American uses more energy between the stroke of midnight on New Year's Eve and dinner on January 2 than the average, say, Tanzanian consumes in a year. Population matters, but it really matters when you multiply it by proximity to Costco.) Would you like me to go on? Americans discard enough aluminum to rebuild our entire commercial air fleet every three months—and aluminum represents less than 1 percent of our solid waste stream. We toss 14 percent of the food we buy at the store. More than 46,000 pieces of plastic debris float on each square mile of ocean. And—oh, forget it. These kinds of numbers get in the way of figuring out how much we really waste. In recent years, for instance, 40 percent of Harvard graduates have gone into finance, consulting, and business. They had just spent four years with the world's greatest library, some of its finest museum collections, an unparalleled assemblage of Nobel-quality scholars, and all they wanted to do was go to lower Manhattan and stare into computer screens. What a waste! And when they got to Wall Street, of course, they figured out extravagant ways to waste the life savings of millions of Americans, which in turn required the waste of taxpayer dollars to bail them out, money that could have been spent on completely useful things: trains to get us where we want to go—say, new national parks. Perhaps the only kind of waste we've gotten good at cutting is the kind we least needed to eliminate: An entire industry of consultants survives on telling companies how to get rid of inefficiencies—which generally means people. And an entire class of politicians survives by railing about government waste, which also ends up meaning programs for people: Health care for poor children, what a boondoggle. Want to talk about government waste? We're going to end up spending north of a trillion dollars on the war in Iraq, which will go down as one of the larger wastes of money—and lives—in our history. But we spend more than half a trillion a year on the military anyway, more than the next 10 nations combined. That almost defines profligacy. We've gotten away with all of this for a long time because we had margin, all kinds of margin. Money, for sure—we were the richest nation on Earth, and when we wanted more we just borrowed it from China. But margin in other ways as well: We landed on a continent with topsoil more than a foot thick across its vast interior, so the fact that we immediately started to waste it with inefficient plowing hardly mattered. We inherited an atmosphere that could buffer our emissions for the first 150 years of the Industrial Revolution. We somehow got away with wasting the talents of black people and women and gay folks. But our margin is gone. We're out of cash, we're out of atmosphere, we're out of luck. The current economic carnage is what happens when you waste—when the CEO of Merrill Lynch thinks he needs a $35,000 commode, when the CEO of Tyco thinks it would be fun to spend a million dollars on his wife's birthday party, complete with an ice sculpture of Michelangelo's David peeing vodka. The melted Arctic ice cap is what you get when everyone in America thinks he requires the kind of vehicle that might make sense for a forest ranger. Getting out of the fix we're in—if it's still possible—requires in part that we relearn some very old lessons. We were once famously thrifty: Yankee frugality, straightening bent nails, saving string. We used to have a holiday, Thrift Week, which began on Ben Franklin's birthday: "Beware of little expenses; a small leak will sink a great ship," said he. We disapproved of frippery, couldn't imagine wasting money on ourselves, made do or did without. It took a mighty effort to make us what we are today—in fact, it took a mighty industry, advertising, which soaks up plenty more of those Harvard grads and represents an almost total waste. In the end, we built an economy that depended on waste, and boundless waste is what it has produced. And the really sad part is, it felt that way, too. Making enough money to build houses with rooms we never used, and cars with engines we had no need of, meant wasting endless hours at work. Which meant that we had, on average, one-third fewer friends than our parents' generation. What waste that! "Getting and spending, we lay waste our powers," wrote Wordsworth. We can't say we weren't warned. The economic mess now transfixing us will mean some kind of change. We can try to hang on to the status quo—living a Wal-Mart life so we can buy cheaply enough to keep the stream of stuff coming. Or we can say uncle. There are all kinds of experiments in postwaste living springing up: Freecycling, and Craigslisting, and dumpster diving, and car sharing (those unoccupied seats in your vehicle—what a waste!), and open sourcing. We're sharing buses, and going to the library in greater numbers. Economists keep hoping we'll figure out a way to revert—that we'll waste a little more, and pull us out of the economic doldrums. But the psychological tide suddenly runs the other way. We may have waited too long—we may have wasted our last good chance. It's possible the planet will keep warming and the economy keep sinking no matter what. But perhaps not—and we seem ready to shoot for something nobler than the hyperconsumerism that's wasted so much of the last few decades. Barack Obama said he would "call out" the nation's mayors if they wasted their stimulus money. That's the mood we're in, and it's about time.

Tangled Banking Web

SUBHEAD: Our government is now complicit in the massive securities fraud perpetrated by the banks.

By John Schettler on 25 April 2009 in The Writing Shop
http://www.writingshop.ws/html/tangled_web.html


Image above: "The Promised Land" by Mark Bryan, 2003. From http://artofmarkbryan.com/promised%20land.html

By now it’s fairly clear what happened the last six months in the great bank bailout bonanza. As the massive securities pyramid began to collapse with Bear Stearns, Lehman, Merrill Lynch, and Morgan Stanley, the fact that huge US banks absorbing some of these companies were actually insolvent drained the blood from the face of then Treasury Secretary Hank Paulson.

All these institutions were massively overleveraged, and hiding their equally massive losses in a dark corner of the wine cellar called “level three.” Securities quickly gained leper status and the market for them died. Paulson and Bernanke ran to congress with threats of imminent collapse, martial law, and calamity on their lips and wrangled $700 billion from the public trust.

They then bullied Bank of America to rescue Merrill Lynch, threatening to remove Lewis as CEO and replace the board when BofA learned of Merrill’s massive losses and began waffling on the deal. The truth about Merrill was covered up, not reported to BofA shareholders, and the shotgun wedding was on.

The banks were all called in and given their free handout—all of them, so the public would not know which ones were truly in dire straits. The failure of WaMu and Wachovia earlier in the year had seen billions sucked out of those banks in just a few weeks time. Paulson and Bernanke wanted to protect insolvent mega banks from a similar run, so they forced everyone at the table to drink the same cool aid. ABC news quoted former Treasury Secretary Paul O’Neill as saying:  
“They all took the money. Stop and think about that. What was the purpose of this policy? To deceive the people so that the public would not know which banks were in danger of failing?”  
 Obviously. Every action taken to date, with a $12.5 trillion price tag, has made the US government more and more complicit in the massive securities fraud and deception perpetrated by the banks themselves.

The bailout was as much a cover-up of the true condition of the banks as anything else. Karl Denninger pulls no punches when he talks about how “this ‘crisis’ went from an ‘unanticipated’ event to the biggest cover-up and looting operation in the history of the world, encompassing both private and government interests. Chris Martenson talks about the tangled web of the financial crisis this month on his blog:  
“The unfortunate conclusion here is that our system and processes are fully ‘captured’ by a tangled web of interests that serve themselves over everything else. Your future, my future, and our future is being systematically ruined by a self-interested group of insiders that can no longer distinguish between their good and the common good.” 
 I would argue further that the common good was never on their radar screen. The banks have never had anything more than their own interests as a concern, and now the US government has become their biggest facilitator and financial backer. Look around the nation.

Visit the empty, abandoned districts of Detroit, Sacramento, Merced, Stockton, Las Vegas, and Phoenix to name but a few. What you will see is the destruction of American neighborhoods, families, livelihoods, and marriages all in the interest of making good on bad derivatives bets made by the Boyz on Wall Street—now with the full backing of the Federal Reserve and Treasury Department, the blessing of congress and yes, Change.gov as well.

This realization, that financial insiders have blatantly seized control of …. everything…. has been circulating on the web the last month in a number of well researched articles. Paul Farrell summed things up for Marketwatch.com when he laid out the script for a suspense drama he called The Goldman Conspiracy:  
“Drama? You bet. Six short months ago Hank led an assault on Congress. …The Hammer assaulted Congress with just a two-and-a-half page memo in hand. Like a crack special-ops warrior, he took down the enemy, demanding $750 billion, absolute control, total secrecy, no accountability and emergency powers to act immediately ... warning that inaction was not an option, that collapse of America's banking system was imminent, would bring down the global monetary system, pushing world's economies into a "Great Depression II."  
 Congress surrendered. Farrell then recounted a list of articles that have appeared in reputable publications, Matthew Malone's article in Portfolio magazine, the conflicts of interest as ex-Goldman employees, heavily invested in AIG, rig the policies to protect their golden eggs.

Then “The Quiet Coup", from Simon Johnson in Atlantic Magazine. He echoed Catherine Austin Fitts of Solari.com who has been writing about the coup staged by the financial institutions for some time. Next was Matt Tabbi’s “the Big Takeover” article for the Rolling Stone.

Yes, all these writers finally see what has been going on behind the curtains for decades. What amazes me about all this is how many educated, well informed economists and financial analysts failed to even see the crisis coming—this while intrepid bloggers were laying out a virtual roadmap for what was to happen years before these events made headlines.

It was clear to me years ago that the US economy was running mostly on fabricated wealth the financial gurus called “equity” that was created by simple speculation in a badly overheated housing market. People were borrowing at an unprecedented rate, and credit and debt were piling up far beyond levels seen in the Great Depression.

A crash was almost certain to follow. All it really took was a look at a single chart noting the enormous run-up of debt, on both a personal and government level, to realize it had to end in a lot of pain. Now the pain is here, though delusion and outright deception continue on the part of banks and major media.

The full magnitude of the crisis continues to be mitigated, explained away, underestimated, obfuscated by watered down statistics. People continually quote the government’s lame U-3 unemployment stat, and use that number to compare it with the unemployment figures of the Great Depression.

You would have to at least use the U-6 number, and then some, to approximate how unemployment was calculated back then, and I have shown in numerous articles how we are now well ahead of Depression era numbers in terms of our current job loss rate, and much worse off in many other metrics.  

Paulson & the Big MAC Attack
No wonder there is an enormous deficit of confidence in the US these days. What can you believe? As more and more information comes to light, we stand aghast at scale of duplicity, fraud, and good old fashioned gangland corruption at every level, from John Thain’s $48,000 carpets to Hank Paulson’s strong arming of Ken Lewis at BofA. In a letter to congressional overseers, Mario Cuomo wrote:  
“Despite the fact that Bank of America had determined Merrill Lynch’s condition was so grave that it justified termination of the deal pursuant to the MAC clause (Materially Adverse Situation,) Bank of America did not publicly disclose Merrill Lynch’s devastation losses or the impact it would have on the merger. Nor did BofA disclose that it had been prepared to invoke the MAC clause and would have done so but for the intervention of the Treasury Department and the Federal Reserve.”  
 Now… remember Thain and Lewis, all smiles, announcing their merger in glowing terms for the TV media? Then came Thain’s exorbitant office décor, the big bonus payouts at Merrill, and the concealment of massive losses from BofA shareholders.

The truth is never broadcast. We always find out the real facts later, usually on the Internet, which has become the bain of all fraudsters. So at every stage of our “crisis” we see the government complicit in deception, cover-ups, and outright flaunting of the law—all to try and prevent a “systemic failure.”

What we are seeing now is an effort to change the psychology around what has happened to fuel the spring rally, the great suckers rally, that was mounted by Wall Street. The message is obvious to anyone with a brain. It says: we broke all the rules and bent any that remained.

We’ve made it abundantly clear that we’ll do anything to protect the interests of the major banks—so come on Boyz, get back in the trading pits! The aim is to restore the securities game to its former glory, and the entire effort to date will be seen in the cold light of history as an enormous waste and misallocation of funds. How can mortgage backed securities ever recover anything close to their original nominal values in this housing market?

Foreclosures slowed due to a moratorium in December and January, but now have resumed with a vengeance. Analysts believe that the banks are already holding 600,000 homes off the market that are in REO status. What happens when they are eventually funneled to the auction blocks as the law requires?

And any look at the spiking delinquency rates in prime mortgages should chill a banker’s blood. They must know, in their dark heart of hearts, that the housing market is dead and will not rise, zombie like, to it’s old glory. A mortgage will not be anything safe to underpin a security for years and years to come. But still the banks and financial policy makers pretend that these securities will be restored to their old values. They are now deemed “legacy assets.”

Yes, a legacy of excess, imprudence, fraud, corruption, and shame. The banks are now being propped up by government money, which flowed to them through undisclosed channels at the Fed and through conduits like AIG. The deception and delusion extends all throughout the system.  

The Bogus Stress Test
The results of the “Stress Test” banks were given was supposedly leaked and published by Hal Turner of the Turner Radio Network. It was fairly grim, though really presented nothing new, at least to me. I have reported as much in numerous articles over the last year. Quite simply, major banks are insolvent.

Here’s Turner’s list:  
1) Of the top nineteen banks in the nation, sixteen are already technically insolvent. 

2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans. 

3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.  

4) Of the top 19 banks in the nation, the top five largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.

5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.

6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital!

7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1 ,800 regional and smaller institutions are at risk of failure despite government bailouts! 
 Edmund Conway reported on the IMF (International Monetary Fund) assessment concerning the world’s banks: “Today the Fund delivered its verdict and it is both clear and terrifying…if banks were to bring forward to today loss provisions for the next two years, before expected earnings, US and European banks in aggregate would have tangible equity close to zero." In other words, the entire global banking system would be bankrupt - kaput - if its institutions immediately wrote off all the toxic assets still sitting in their vaults without any government assistance. And bear in mind this already takes into account the money we have already thrown at the banks. So even after all this has been spent the financial system remains, effectively, insolvent…” Profit From Thin Air

 Profit From Thin Air
In spite of this, the latest news spin is that the banks are now “profitable” and the green shoots of recovery are growing. But read the blogs and you will see that a consensus has already formed that all these reports of bank “profits” are completely contrived, tricks of accounting, rules changes, shuffling debt to previous quarters, sweeping the toxic waste under any doormat they can find. Even the NY Times chimed in with the headline: “Bank Profits Appear Out Of Thin Air!” That should come as no surprise, for the banks already create credit, debt and print money from thin air. Delusion, denial, and blatant fraud, with full government complicity—this is the order of the day. But it no longer passes unnoticed. The Internet ferrets out the truth at light speed these days. Writers and bloggers nail the deception, exposing it for the sham it is, though nothing is really ever done about it. Economics professor William Black pulled no punches in his interview with Barrons when he describes the present situation as “the greatest financial scandal in history - swept under the rug by top government officials of both parties; it’s legally and morally indefensible, and it’s wrecking the country.” Oh, what a tangled web we weave, when first we practice to deceive… David Kellermann, the Chief Financial Officer of Freddie Mac, one of the great landfills of toxic mortgage backed securities, was found dead in his cellar, hanging from a strand of that tangled web. What truth was so devastating that he could no longer bear to live? Deceptive accounting changes and other book juggling tricks were used to make it seem like the large banks are finally starting to turn a profit—all so we’d start to feel better. Here’s the disingenuous language Well Fargo used to explain how they “profited” from simply changing the value of their toxic assets to levels higher than anyone in their right mind would ever pay: “it was due to the early adoption of FAS FSP 157-4, which clarified the use of trading prices in determining fair value for distressed securities in illiquid markets, thus moderating the need to use excessively distressed prices in valuing these securities in illiquid markets as we had done in prior periods.” So they just marked their bad CDOs up closer to their peak housing boom values, though housing will not return to those values for a decade or more. This is duplicitous self-deception, at best, a downright lie if taken at its root. Will investors fall for this nonsense? Citigroup also reported a $1.6 billion profit. Now let’s subtract the $45 billion they got from the public.

My math indicates they actually had a loss of $43.4 billion. And the “profit” itself comes from deferred dividend payments and valuations based on options to buy back debt at a lower price! It’s like saying you have a thousand bucks in your checking account because you simply decided not to pay the$1500 in bills on your desk, hiding them in a drawer until next month.

The truth is, the banks had no profit at all, and still have massive derivatives exposure that makes them technically insolvent.

Ilargi Meijer of the Automatic Earth has it exactly right when he concludes:
“Wall Street banks, who own more of your town, your country and your world as every single day passes, have no problem coming up with numbers that show they are profitable, while in reality they're losing more money every single hour than you can ever hope to make in a lifetime. And you are covering their losses.”  
Tightening Up The Thumbscrews
After taking $45 billion in taxpayer money, how did Citigroup say thanks? By raising interest rates across the board on all its credit card accounts, sticking it to the struggling Average Joes out there and insuring that they will remain in a revolving debt nightmare for years and years to come. The nifty term for these rate hikes is now “re-pricing.”

Robert S. McElvane commented for Huffington Post:
“The Fed effectively lowers the interest rate that banks pay to zero and the banks respond by raising the interest rates they charge to levels that used to be charged only by organized criminals."
Suppose we all go to the banks and tell them the same thing—that we are “re-pricing” the interest they pay us on our savings deposits, upping it to an nice fat figure. (Can you believe that WaMu/Chase is now offering a savings account that pays all of one tenth of one percent in interest?) Let’s arbitrarily bump it to 5%. It’s either that or we want our money—now.

Better yet, suppose millions of Americans simply tell the banks to get lost. They cut up their credit cards and burn the statements when they arrive. This is already happening sporadically, as strapped debtors can no longer pay.

Capital One, the company that was always asking you what was in your wallet, now finally realized most Americans don’t have much there at all. The company has seen its credit card default rate shoot up from 2% to 9.33%. Nearly one in ten cardholders have defaulted!

Accounts have been closed at a break-neck pace, with over eight million cards pulled by the banks—and millions more have had their credit lines decapitated and interest rates hiked, all in an effort to reap as much hay as possible before congress imposes rules changes on the credit card business.

The banks are only likely to stimulate the default rate by their little re-pricing scheme. It will come back to haunt them in the end, for this economic downturn is far from over.

We see the hard numbers that have dogged this crisis for the last six months: housing sales, foreclosures, auto sales, retail sales, manufacturing, unemployment. The numbers from the wasteland just keep getting more and more grim. The Fortune 500 annual report called 2008 the worst year for business and finance in history. Here are the salient points:
  • 2008 was the worst year in the history of the Fortune 500 for America’s largest companies; 
  • Profits fell from $645 billion in profits in 2007, to just $98.9 billion - an 84.7% decline; 
  • Eleven of the top 25 largest corporate losses in history took place last year; 
  • Insurance giant AIG posted a $99.3 billion loss — the biggest corporate loss of all time; 
  • Thirty-eight companies disappeared from the list altogether; 
 Deflating ProspectsBehind these figures, however, one massive force is driving them all—deflation. When debt burdens become as large as they are today, de-leveraging becomes a painful necessity. Bank losses from bad securities are all part of the de-leveraging process. And on Main Street, retail sales in March were down 9.5% because people barely have the money to pay their bills and service their existing debt.

The spending they were doing in the boom time was mostly done on the ever expanding credit the banks were pumping into the system, which was really nothing more than a continual creation of new debt. It’s really quite simple.

As long as the credit flowed, people kept charging. They used the home equity cash to install new granite counter tops, double pane windows, buy new appliances and cars. They used all those convenient balance transfer checks to shift their debt from one credit card account to another. The lovely little “congratulations” letters that came with credit line increases, (and three balance transfer checks), were all part of the game on a personal level for millions of Americans.

The banks would tell you how ‘responsible’ you were, and how you earned this extra credit—along with a strong pitch to go out and use it ASAP. “Use these checks for anything you want!” (Notice the word “need” was not used.)

 So the wanton spending was fueled by the banks, and when they mucked up their own securities schemes, the game they used to try and avoid any liability for their actions, the money dried up. Now the securities game is over. Banks can’t create a CDO to pass on risk to the next fool in the investment world.

Now they have to carry losses on their books—at least on one set of books, the one hidden in the vault. Home equity loans are all but dead and credit card lines are shrinking each month, though interest rates and fees continue to increase. People are squeezed by the awful pressures of debt, and they no longer have any safety outlet—there’s no place to transfer that balance now. It will sit there at 29.99% interest for years and years. Default has become the only escape for many.

Even as beleaguered “homeowners” (which were really only debt owners), simply walk away from their underwater mortgages, people are now just throwing away their credit cards and the monthly bills as well. The reason is simple. When credit contracts as violently as it has in the last 6 months you get a massive deflation. People stop spending, and competition for remaining sales begins to erode prices. The PPI (Producer Price Index) has been falling.

The US consumer price index fell at an annual rate of 0.4% in March, the first time since August 1955 prices have decreased year-over-year—a once in a lifetime event. Like all government issued statistics, however, this one is also twisted to tell a story the powers that be want to hear. The government does not include the cost of housing in its calculation, so when housing costs were skyrocketing, they said inflation was still modest.

Now the inverse is true. As housing prices plummet, they will say deflation is not yet a concern, but they are wrong in both instances. The deflationary pressure of the collapsing housing market is far more severe than the chart above would make it seem.

 On Main Street, retail prices are down 10% on many items, food being the stubborn exception. Rents are following that downward slope as well, albeit more slowly. ‘Landlords’ have this reflexive urge to raise rents on an annual basis, but now they find tenants are saying no, and meaning it. Rather than lose the tenant in an increasingly competitive rental market, landlords are finally being forced to lower rents or offer other incentives. It’s about time! But these price drops are only the symptom of deflation. The contraction of credit itself is the essence of this debilitating force. But aren’t price drops good?

Doesn’t that make your dollar stretch further? The bright side of deflation sees each dollar able to buy more goods and services, and this is generally good except in one circumstance—when you also carry large amounts of debt. As deflation pushes down prices, the dollar buys more—but the awful weight of debt becomes even more crushing. Every dollar of debt owed gets heavier and heavier. No market force ever acts to reduce your debt, which only decreases by being paid off.

And in periods of deflation, you are forced to use stronger dollars to pay off debt for assets that have lost much of their value. (This is why it is wise to sell assets and accumulate cash during a deflationary period—then use the cash to eliminate all debt.) People that bought a home for half a million in 2005 still owe that half million, even though deflation in the housing market has reduced the value of the house to only $250,000. Your asset lost half its value, but the debt remains the same.

As prices shrink, and layoffs create a general lessening of income, the ability to service this massive debt comes under severe strain. Debt is your single greatest enemy in any time of deflation. In an article for the Atlantic, a survivalist was interviewed who talked about his attitude to money and debt. When asked how he might invest the answer was straightforward—the intangible economy of stocks and bonds was an illusion to him:  

“I don’t believe in the intangible economy; I believe in the tangible economy. When I have extra money, I buy tools, food, or land. I like to be able to see what I’m buying. And I really don’t like debt, so I’d rather not have certain things than be in debt to anyone. I just feel better knowing that I don’t owe money, and I feel good knowing that I can take care of myself. That’s the American way, to be able to be self-reliant.” 
Retiring debt is therefore the smartest thing a person could do when facing a deflationary depression such as we have now.

Consider that if you owe a credit card company $5000 at 29.99% interest, and you can retire that debt, you have just saved yourself that 30%, by avoiding interest. There’s no way you could invest $5000 today and earn anything even remotely close to 30%.

Nor can you buy anything today that will appreciate in value by that amount any time soon. Some would argue you could buy gold and get a 30% return, but if you still owe that $5000 to Citibank, that interest you pay on that debt offsets any gains you make with your Krugerrands! Therefore, retire the debt first. If you have debt you have no business buying gold.

Get debt free, then, if you must buy anything, buy tangible things that will contribute directly to your ability to live in the years ahead. The survivalist above is correct: food, fuel, tools, useful land, these things are all assets that will sustain life. Buy assets you will use, not things you hope will appreciate in value like real estate—it won’t appreciate again for the foreseeable future. Forget granite counter tops.

Virtually every nickel so called ‘homeowners’ have spent in upgrading and improving their homes has already evaporated with the massive losses of equity—and housing values may still have another 25% to fall before they reach a bottom, according to many analysts.

While none of this should be interpreted as professional “investment advice,” think of it as simple common sense in times of deflation. Good luck navigating the tangled web of the economy these days.

Mexico flu: Your experiences

SUBHEAD: The Mexican swine flu sparks worldwide fear of pandemic.
First hand reports on 25 April 2009 in BBC News - http://news.bbc.co.uk/2/hi/talking_point/8018428.stm Image above: Bus stop in Mexico City with worried travelers. Readers in Mexico have been emailing the BBC describing the sense of fear gripping the country as a result of a flu virus outbreak, which has so far claimed more than 80 lives. The World Health Organization says the virus has the potential to become a pandemic. Read a selection of BBC readers' comments below. I'm a specialist doctor in respiratory diseases and intensive care at the Mexican National Institute of Health. There is a severe emergency over the swine flu here. More and more patients are being admitted to the intensive care unit. Despite the heroic efforts of all staff (doctors, nurses, specialists, etc) patients continue to inevitably die. The truth is that anti-viral treatments and vaccines are not expected to have any effect, even at high doses. It is a great fear among the staff. The infection risk is very high among the doctors and health staff. There is a sense of chaos in the other hospitals and we do not know what to do. Staff are starting to leave and many are opting to retire or apply for holidays. The truth is that mortality is even higher than what is being reported by the authorities, at least in the hospital where I work it. It is killing three to four patients daily, and it has been going on for more than three weeks. It is a shame and there is great fear here. Increasingly younger patients aged 20 to 30 years are dying before our helpless eyes and there is great sadness among health professionals here. Antonio Chavez, Mexico City I think there is a real lack of information and sadly, preventative action. In the capital of my state, Oaxaca, there is a hospital closed because of a death related to the porcine influenza. In the papers they recognise only two people dead for that cause. Many friends working in hospitals or related fields say that the situation is really bad, they are talking about 19 people dead in Oaxaca, including a doctor and a nurse. They say they got shots but they were told not to talk about the real situation. Our authorities say nothing. Life goes on as usual here. Young people are going to schools and universities. Buses and planes go and come from Mexico City as frequently as before. Even with two people dead locally, last night the local baseball stadium was full, mainly with young people. What's really happening? I know vaccines are good for nothing, and if you take care, maybe you won't die, so, why not acknowledge the real situation? I know that the economic situation is not the best, and it will worsen with panic. But panic comes from a lack of information. Many people travel for pleasure or without any real need. Stopping those unjustified trips can help a lot to ease the situation. We must do something! Alvaro Ricardez, Oaxaca City, Oaxaca, Mexico The truth is that it is very strange, what we are living through here. The streets are empty, we are all staying in our houses. People are only going out to the hospitals, drugstores and to buy food. The great majority have their mouths covered. Concerts, festivals, masses have all been cancelled, the football matches have all been played behind closed doors. On the television and radio, every commercial break contains information on the symptoms, saying that if you have them to go to the doctor at once. Although we have been told to go to work as normal on Monday, I am worried because I am employed at a company where there are many people and believe that it could be highly contagious. They say on the news that the cases that are most critical involve people aged 20 to 50. Nallely T, State of Mexico Right now the situation is quite scary. We've never been living under such circumstances and it's caught us completely off guard. We are a developing country so our health system isn't very effective, plus the fact that our city is overpopulated doesn't help much; the government is doing what they can but I don't think it's enough. So the future isn't looking too bright. Everyone is very frightened, there are few people on the streets and we are all trying to be as safe as possible. But not knowing exactly how the virus works and how it can be killed off creates a horrible uncertainty. I'm being pessimistic but that's how most people I've talked to feel. Mariana, Mexico City I have a sister-in-law from San Luis Potosi state in Mexico and we were told that in San Luis Potosi there have been at least 78 deaths, just in that city alone, not 68 in all of Mexico, as is being reported. Schools have been closed until 6 May in this state and in other areas in Mexico. Also, many public venues are being closed, so this makes it more deadly and dangerous than has been stated. Migdalia Cruz, Phoenix, Arizona, USA It's certainly been very quiet where I'm living in the Historic Centre of Mexico City, whereas normally the centre is almost uncomfortably packed at the weekend. Most people also seem to be wearing the face masks being handed out by the army around the city. There always seems to be a healthy mistrust of the government here, but I wouldn't say I'm sensing a great deal of paranoia or panic. It does seem as though the unprecedented actions being taken by the government to contain the virus don't match with the statistics being provided, however, so there is some doubt as to whether they're just being overly cautious or whether things are a lot worse than what they're telling the public. Randal Sheppard, Mexico City Right now, things are far from under control here. All the museums, zoos, and concert venues have been closed. Masses, football games, sporting activities, cultural activities, have all been cancelled. All schools will be closed until 6 May, from kindergarten to university. We don't know what to think, the truth is that the government isn't telling us the truth. This case is worst than we think, some people take this just like a joke but not me, this is serious! Als it seems clear that this illness doesn't appear to be affecting the whole country, just Mexico City, the State of Mexico and San Luis Potosi. Carla, Mexico City I work as a resident doctor in one of the biggest hospitals in Mexico City and sadly, the situation is far from "under control". As a doctor, I realise that the media does not report the truth. Authorities distributed vaccines among all the medical personnel with no results, because two of my partners who worked in this hospital (interns) were killed by this new virus in less than six days even though they were vaccinated as all of us were. The official number of deaths is 20, nevertheless, the true number of victims are more than 200. I understand that we must avoid to panic, but telling the truth it might be better now to prevent and avoid more deaths.Yeny Gregorio Dávila, Mexico City The situation in Mexico City is really not normal. There is a sense of uncertainty that borders on paranoid behaviour in some cases. At this very moment, Mexican TV is showing how military forces are giving masks to the people in the streets. Moreover the news is sending alarming messages for the audience. Really, the atmosphere in the city is unsettling, a good example: pubs and concerts are being closed or cancelled and people don't haven thorough information. In this city (and country) there is an urgent need for assertive information, no paranoid messages from the government or the Mexican media. Patricio Barrientos and Aranzazu Nuñez, Mexico City

Massive events have been cancelled at the National Auditorium - Mexico City's largest indoor venue with capacity of 10,000 - which has been closed. Two soccer games have been cancelled at the Olympic Stadium. A sold out game with 70,000 expected attendance will be played behind closed doors. Another game at the famous Azteca Stadium that would draw an attendance of 50,000 will also be played behind closed doors. Juan Carlos Leon Calderon, Mexico City It's eerily quiet here in the capital. Lots of people with masks, Facebook communities exchanging gallows humour, everybody waiting to see if schools and universities will stay closed for ten days (as goes the rumour). All masks have been used up, and we are waiting for new supplies. Dr Duncan Wood, Mexico City

We will be sick soon and, well, do the math - 400 can infect at least another two per day. Adriana, Mexico City Yesterday in my office it was a bit surreal walking in to see all in blue masks with deep cleansing of computer equipment and surfaces going on. Let's hope it is contained and does not escalate. The local news is reporting 200 fatalities and reports of flu spreading from areas outside of Mexico City. Given the volume of daily commuter traffic on cramped busses and trains, this may not have to be too virulent to be disastrous in human terms. I wonder what controls there will be on flights in and out. Will Shea, Mexico City

I work for the government as a head of a computer infrastructure operations department. At work we are doing several actions to try not to expose workers. We sent several home. I support the Pumas football team and the very important match with the Guadalajara team will be played behind closed doors. My family and I are going to stay home all weekend. We feel a little scared and confused with the feeling that we are not given being told the truth. Many people think the numbers of dead people is higher than we are being told. Marcos, Mexico City The whole city is affected, I have a very bad feeling about this. Two of my friends at work are sick, they were sick for a couple of days, they went to the hospital and they sent them back to work. The doctor told them it was just a flu until Friday when the alarm was spread, then they were allowed to go home. I work in a call centre and I'm worried because there are no windows in the building so it cannot be ventilated and around 400 people work there.We all have talked to our supervisor but no one has done anything not even sterilise or disinfect the area. We will be sick soon and, well, do the math - 400 can infect at least another two per day. The authorities say there's nothing they can do since it's a private company and I can assure you, the company I work for is not the only one like this in the whole city. Us workers don't have much protection from our government and if we want to keep our jobs we have to go anyway. Adriana, Mexico City My sister got influenza like symptoms two weeks ago. She is fine now, thank god, but similar cases have been showing up since two weeks ago. I work for a bank and we were told to take our laptops because there is a high possibility to work from home. I have gone out to buy some face masks. Ruben Farfan, Mexico City I'm a college student in Mexico City, and I can only say that the information that the media has provided doesn't seem to be enough, we do not now how serious it is because they have failed to mention it. There have been two ways of responding to this event, the ones that have entered themselves into quarantine claiming that the government is hiding something much more serious, and those who take this as a joke saying that everyone is overreacting. To put a cherry on top all kind of crazy rumours are flying around - that they are going to quarantine Mexico City, that a school and some specific branches of offices and jobs are going to be suspended for days to come, and so on. I wish more info was available, for example how to prevent it? Have there been many deaths? Is there a threat of an epidemic? Mari A, Mexico City I didn't hear about the flu epidemic until last night at 2330. Yesterday the streets were almost empty compared to a normal Friday afternoon. The media is bombarding the same information over and over again, but the authorities haven't said anything new yet, only that they have enough vaccines for those with the flu and that we should avoid public spaces. Paulina, Mexico City This is another blow to the tourism industry in Mexico, even though non of the events that is taken place is anywhere near the tourist areas of Cancun, Playa del Carmen or Puerto Vallarta, the news comes across as all of Mexico is affected! After wrong reports of drug related violence, military presence etc. in Cancun, which hurt the industry tremendously, now people think that all of Mexico is affected by a virus that is mostly present in the capital. I guess the problem is that this is a country where the capital carries the same name as the country, thus when people hear news about Mexico, albeit it refers to Mexico City, they assume it is affecting the whole country. Rainer, Cancun

Economy of Green

SUBHEAD: Eco-community design offers lifetime cost savings.

By thepatient89 on 09 April 2009 in Reality Sandwich
http://www.realitysandwich.com/ecocommunity_design_proposal


Image above: "The Bookkeeper" by Norman Rockwell
 

Let's say "Business As Usual" (BAU) real estate economics assumes:
 -- that one does not grow one's food, or any portion thereof; that one therefore travels to a grocery, and pays someone else for food that has been shipped from dozens to thousands of miles away and largely grown thanks to massive fossil fuel inputs and fossil fuel-based infrastructure, processed, and for the most part unnecessarily packaged, labeled and wrapped;

 -- that large power inputs are required to maintain heating and cooling loads for various household functions (not to mention innumerable small electric devices, some irreplaceable, many not);

 -- that one does not make income from selling excess power back to the grid, or into a neighborhood network, or derive carbon credits from providing carbon-negative services;

 -- that, generally speaking, no one works or wants to work where they live; one commutes to an external job-site, using fossil fuels or at best electricity in a public transit system;

-- that one goes out to shop and be entertained and socialize by paying for restaurants and bars and clubs and movies and whatnot;

-- that materials used to construct residences are largely virgin, and transported from distant locations, and that the eventual resident is not involved in the construction process, neither on the design nor construction side;

-- that household water is used only once, in excessively large quantities, to be shipped away from the household;

-- that rainwater is not captured for use and re-use;

 -- that human waste is not recycled into fertilizer and/or electricity (via biogas digester), but instead is shipped using electricity or fossil fuels and treated via costly chemical sewage treatment plants;

 -- that other household trash is shipped off for alleged recycling, rather than being creatively repurposed on site and/or gasified for power and/or synthetic fuel and/or other useful products. 

None of this HAS to be the case. Elements of this model have been superseded in innumerable experiments around the world, to varying degrees in different situations. This proposal is based on the reasoned intuition that a robust "ecovillage design" COULD BE MARKETED AND SOLD ON A PURELY ECONOMIC BASIS, against BAU real estate.

 Let's say "Ecovillage Design" real estate economics assumes: 
-- permaculture principles;

-- biointensive gardening, hydroponics and aquaculture methods;

-- intensive use of bamboo, hemp and other plant fibers grown on-site or nearby for structural support and flooring; -- recycling of used construction materials;

 -- solar heating and cooling systems;

-- passive-solar architecture;

 -- gasification of waste materials;

-- biogas reclamation of sewage and/or treatment via ‘living machines';

 -- all the latest energy storage, microgeneration, smart-grid micro-grid technologies, and "clean-slate" thinking. 
In other words, no appeal to greenness, hippie values, save the planet, do goodiness, etc., strictly that such a community would be a far, far cheaper place to live, and a solid investment opportunity now and even more so every year further down the road of oil depletion.

To the best of my knowledge, this has never been done. What is needed is an economic model, embedded in a spreadsheet, that compiles and compares a range of values from different sources. These numbers would draw broad averages for the typical household expenditures for people of a certain class living in a certain region. The source data sets should be updateable and manipulable to play out various assumptions and alternate scenarios. For all the above processes, we would research the best available cost numbers, and where not available use educated guesses, identified as such.

 Side by Side Comparison would require the following data sets:
 -- outline typical household costs for a BAU lifestyle, to show where people spend money "unnecessarily," from the perspective of an "ideal" ecovillage design

 -- factor typical design/build, marketing and operating costs for various types of housing

-- single, mcmansion, multi-family apartments, loft condos, etc., coming up with some average $/square foot numbers -- pool the best available data on proven energy saving potential of passive solar design, solar water heating and absorption chillers, geothermal, radiant heating, etc.

-- look at land prices in various areas, financing assumptions for projects of a certain scale, market values for different types of housing, etc.

-- look at how much food can realistically be grown in an urban environment with what kinds of energy, water and material inputs and labor

-- examine costs of sewage treatment, rainwater harvesting averages, how many times grey and rainwater can be safely recycled within an ecosystem. 
 Ideally a carbon footprint number would be tied to all these numbers as well.

The Hard Cold Facts. These various data sets would be mapped together in a master model. The result would show the efficiencies in carbon, energy use, and current dollars per person of an intentionally designed sustainable community versus the total costs of a BAU lifestyle and real estate investment. Probably the model would show that a BAU lifestyle is massively more expensive and inefficient, on multiple levels, than a coherently designed, sustainable community lifestyle, EVEN IF the cost to build the physical infrastructure, broken down on a per-resident basis, initially turned out to be more than the cost of an average home or condo or whatever. In other words, the financial and energy and externalized cost savings of designing and living in a "true" sustainable community would be far cheaper than a BAU lifestyle.

And based on those reduced economics, the communities and lifestyle could be sold as such to normal people with no interest per se in green values. Further, the greater efficiencies, reduced energy and carbon footprint, and reduced externalities could all be used to justify real subsidies from governments adopting sustainable policies and values. On top of this, most municipalities have large amounts of land and property than can be given away or leased or sold at any level below market value if the government deems it appropriate.

Being able to site such projects on "Community Redevelopment Agency" type land, at a fraction of the normal cost, could make such communities even more radically cheap. This model could be used to spin out ecovillage designs of many different flavors, adapted to regions and tweaked according to all kinds of preferences and specifics. It could form the basis for an incubator-type organization that would work with many different developers and contractors and groups financing and construction their own urban or rural ecovillages.

 It could also form the basis for an investment fund or community bank or coop that would funnel savings and investment money into spawning such communities. In a future of shrinking net energy and rapid fossil fuel decline, the best and possibly only real investment may be in a community that is maximally energy efficient, low carbon, self-sustaining and EFFECTIVE at delivering a quality lifestyle.

 Just like carbon accounting models, or the eco-footprinting model, it would be updated on a continuing basis as better data became available. As it was refined, the actual financing projections for real projects would become ever more solid and actionable. Essentially this would be an open source model and project, probably developed via a wiki.