Start a Vegetable Garden

SUBHEAD: Sixteen reasons to live simply by starting a vegetable garden.

By Staff on 7 January 2011 in Before It's News -
(http://beforeitsnews.com/story/344/709/16_reasons_to_live_simply_by_starting_a_vegetable_garden.html)

Image above: Cooperative gardening. From original article.

Gardening is an integral part of simple living and a growing number of Americans are getting down in the dirt. According to aNational Gardening Association survey, food gardening was the only category of lawn and garden activity that saw a significant increase in household participation and spending in 2009. Food gardening participation increased by 14% while the total spent increased by 21% over 2008 levels. The Association defines food gardening as including vegetable gardening, fruit trees, growing berries, and herb gardening.

But if you’ve never really grown anything edible, you may be wondering why, exactly, so many people think gardening is so important.

Let’s see…

1. Gardening can save money. As long as you avoid the mindless, consumerist gardening gizmos and contraptions that fill the pages of gardening catalogs ($400 rainbarrels? Are you kidding me?), growing your own vegetables will save you money. Keep it simple sweetie, aim to use the energies and resources that are flowing through your property for free and you will come out ahead.

2. Gardening beats inflation. Even if you buy seedlings and seeds every year, growing some percentage of your own food will beat the inflationary spiral of food prices that’s sure to hit as peak oil begins to be felt. (Our entire industrial food system is based on oil; supplies are leveling out and will soon begin to decline.)

3. Gardening gets you back in touch with nature. When you’re outside, digging in the dirt or transplanting your seedlings, you become much more aware of the life that surrounds you. Birds sing, bees buzz, earthworms work the earth. Turns out humans aren’t the center of the universe after all.

4. A garden is beautiful and beauty fills you up, especially if the rest of your day has drained you.

5. Gardening is relaxing. It’s really, really hard to garden frantically. By definition, you must slow down and work with nature’s rhythms.

6. Gardening gives you free, gentle exercise: bending, twisting, dragging, lifting, digging, walking, pushing, and pulling. It’s hard to hurt yourself in a garden because the work generally isn’t all that repetitive and doesn’t pound your joints.

7. Home grown food tastes sublime. Think you don’t like Brussels sprouts? Then you’ve never had home grown ones. Vegetables from the industrial food system taste like they’re from another planet compared to the sweet, mild, tender veggies you grow yourself. There’s simply no comparison.

8. There’s no need for toxins: pesticides, herbicides, chemical fertilizers unless you feel you must. Most home gardeners choose to go organic but even if you do resort to some chemical solution, you know exactly what was applied, how much was applied, and when. You’re in control.

9. Homegrown food is safer. The basic practices of home gardening do not subject the food to unsafe bacterial contamination and questionable handling although canning must be done carefully according to modern scientific knowledge; freezing is even easier. Again, though – you’re in control.

10. Increased food security in the age of peak oil. By most accounts, peak oil is here. Even the U.S. military admits it. When you really stop to think about the amount of fossil fuels used in the growing (tractor fuel, irrigation, and fertilizers), processing and transport of food, you can start to get pretty nervous about how peak oil may drastically affect food supplies in the future. Home growing goes a long way toward alleviating that fear.

11. Home grown food has a miniscule carbon footprint compared to industrial food, much of which is said to travel 1500 – 2500 miles from farm to fork. Think of the fossil fuels involved! How much longer can this go on?

12. Home grown food is fresher. Period. How can it not be, when it travels just a few feet from your garden to you plate?

13. Homegrown food is healthier. Industrially farmed food is grown on depleted, chemically fertilized fields with extremely low organic content. It stands to reason that the nutritional quality of such foods will be depleted as well.

14. You’ll have much more variety available if you grow your veggies yourself. Industrial seed stocks consist of a very few hybrid varieties and many of them have now been genetically modified. If you bypass this system and buy your seed from sources focused on maintaining genetic diversity and heirloom varieties, you will be amazed at the dozens of choices you have.

15. A garden keeps waste out of landfills. Home grown food has no need for expensive one-off plastic and paper packaging that will inevitably end up in the trash.

16. Growing your own deprives the industrial food system of a bit of its lifeblood: your money. As Jules Dervaes says, “In our society growing food yourself has become the most radical of acts. It is truly the only effective protest, one that can-and will-overturn the corporate powers that be. By the process of directly working in harmony with nature, we do the one thing most essential to change the world-we change ourselves.” (Jules Dervaes and his family grow up to 6,000 lbs. of food each year on the tenth of an acre that surrounds their home in Pasadena, California. Check out Path to Freedom Urban Homestead to learn more.)

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Debtris - Graphic Game of IOU

SUBHEAD: Video depicts proportions of various elements of our spending and obligations.


Video above: "Debtris U.S." creates by InformationIsBeautiful.com From (http://www.youtube.com/watch?v=K7Pahd2X-eE).

Posted by staff on 3 January 2011 on Huffington Post -
(http://www.huffingtonpost.com/2011/01/03/debtris-animation-capture_n_803884.html)

The Sunday talk shows this week sparked fresh anxiety over the U.S. debt puzzle this week, with Austan Goolsbee, the chairman of the White House's Council of Economic Advisers pushing back hard against GOP refusal to raise the debt ceiling.

If the debt ceiling isn't extended this spring, the U.S. government could be effectively shut down, as it defaults on its obligations, a possibility that Austan Goolsbee, the chairman of the Council of Economic Advisers, calls "the first default in history caused purely by insanity."

In an interview on ABC's This Week Goolsbee hit the "game" rhetoric hard. "This is not a game... I don't see why anybody's talking about playing chicken with the debt ceiling... There would be no reason for us to default other than that would be some kind of game. We shouldn't even be discussing that."

The animators at Information Is Beautiful, however, have turned U.S. debt into a game of Tetris. Viewed below in relation to the cost of the credit crisis, the global cost of obesity related illness and total African debt to the West, our current debt problems don't seem too severe.

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Gutless Corporate Media

SUBHEAD: The Fourth Estate is now inhabited with fearful pundits and supplicants working for Big Business.

By Ray McGovern on 14 October 2010 for AntiWar.com -
(http://original.antiwar.com/mcgovern/2010/10/13/leakers-beware-the-corporate-media)

[Editor's note: Even satire of corporatism requires ad revenue. Be warned this clip may be preceded with a message from the sponsor.]


Video above: New live poll allows pundits to pander to viewers in real time. From (http://www.theonion.com/video/new-live-poll-allows-pundits-to-pander-to-viewers,14350/).

The following is a Code-Orange Advisory to patriotic truth-tellers, sometimes called whistleblowers or leakers: It is anachronistically naïve to expect the New York Times or other organs of today’s Fawning Corporate Media (FCM) to publish classified material like the Pentagon Papers without their first clearing it with the government.

What brings this issue to the fore is the powerful, Academy Award-finalist documentary, "The Most Dangerous Man in America," which paints a profile in courage by (1) Daniel Ellsberg, who risked serving life in prison by copying classified material exposing the lies behind the Vietnam War, and (2) the New York Times, which dared to publish reams of Ellsberg’s material in June 1971.

It’s a gripping, suspenseful story — even for those of us with some gray in our hair who remember the Times of those times as well as how the drama played out. It is also an unusual story for today, inasmuch as it depicts a victory of inspiring courage over disheartening treachery. We see a brave devotion to the Constitution and democratic values not only by Ellsberg and the Times but by the U.S. Supreme Court, too.

If there is a downside to the documentary’s appearance now, it would be the temptation that government insiders might feel to reach the naïve conclusion that the Times of today is the same Times that risked the wrath of a vindictive Richard Nixon to help end a bloody war while also winning a landmark Supreme Court decision that fortified the protections of the First Amendment.

O Tempora, O Mores!

Sadly, those times – and that Times – are over. Potential whistleblowers disregard this new reality at their own peril.

The good news is that, with the demise of the Fourth Estate, there is now a Fifth Estate offering unprecedented opportunity to those who feel a need — and have the courage — to get the truth out quickly and confidentially.

The Web site WikiLeaks offers one such avenue, but there are myriad other ways to exploit the Web — to use the censorship-immune (so far, at least) ether — to expose information the world needs to know.

And so, note well, patriotic truth-tellers: if you have access to documents that, let’s say, show planning for another unnecessary war or that expose the self-defeating nature of wars already under way, and if you have the courage of a Dan Ellsberg, don’t bother the folks at the New York Times with it.

They are likely to regard it as a nuisance that will require them to devise some twisted excuse for why they must sit on the story. Worse still, as recent examples suggest, they are likely to go to the White House for guidance — whether they really need to or not.

Their behavior in the years since their finest hour in publishing the Pentagon Papers has made it abundantly clear that they are convinced that they – and their friends in high places – know best what’s good for the country.

They have become well accustomed to suppressing explosive information that they decide the rest of us don’t really need to know — little things like illegal wiretapping by President George W. Bush.

Ellsberg and the Times

Daniel Ellsberg visited New York last month to mark the TV debut of "The Most Dangerous Man in America" — the title of the documentary derived from the epithet thrown at him by then-national security adviser Henry Kissinger following release of the Pentagon Papers.

For the first time in the 39 years since the Pentagon Papers’ publication, the New York Times decided to invite Dan into the inner sanctum.

On Sept. 13, the Times used its large, posh auditorium at the TimesCenter to host an affair honoring Dan, the film, and, of course, the Times.

Featured was a discussion moderated by Times’ Managing Editor, Jill Abramson, with panelists Ellsberg, Max Frankel (Times’ Washington Bureau Chief when Ellsberg delivered the documents, later the paper’s Executive Editor, and now retired), and Adam Liptak, the Times’ reporter on the Supreme Court. (Dan succeeded in getting several friends, including me, invited.)

The tone, understandably, was self-congratulatory, and, to her credit, with some notable exceptions Abramson generally avoided shutting off real discussion of sensitive issues. But I almost jumped out of my seat when she gratuitously mentioned that, after 9/11:

"The Times and other publications were the recipients of requests from the Bush White House to occasionally withhold publication of stories that involved secrets and national security issues. Probably the most famous one involved our publication of the story about the NSA’s eavesdropping program."

Aaaaaaaaaaaaarrrrrrrrrrggggggggghhhhhhhh, said I to myself. That’s the affair in which the Times’ own reporter, James Risen, a couple of months before the general election of 2004, unearthed hard evidence that the Bush/Cheney administration was in flagrant violation of the Foreign Intelligence Surveillance Act (FISA) of 1978.

It was the same kind of crime/impeachable offence for which the House Judiciary Committee voted an article of impeachment against Richard Nixon in 1974.

But the Times didn’t make sure that this important fact was shared with American voters before they headed off to the polls in November 2004. Instead, the Times brass acquiesced to White House protests that publication wouldn’t be good for the country.

So, the Times sat on the story for more than a year, until December 2005 when Risen’s book, which included this disclosure, was in galleys and the Times faced the potential embarrassment of being scooped on its own story by its own reporter, no less.

If Risen’s book had appeared before the Times ran the story, there were sure to be pointed questions about whether the Times had become a mere propaganda arm of the U.S. government, especially on the heels of theTimes’ misreporting about Iraq’s non-existent nuclear weapons program in 2002.

On hearing the Times’ managing editor gloss over the real history of Risen’s scoop, I thought of Harry Truman’s aphorism: Does she "think we were born yesterday?" If Jill Abramson perhaps thought Dan Ellsberg would be awed by the opulent surroundings so as to be slow on the uptake, she was dead wrong.

Just as I was about to disrupt the dignified proceedings, Dan took the mike and replied:

"By the way, as the only non-Times person up here, I shouldn’t refrain from saying, I’ve been very publicly very critical of the Times’ decision to withhold the NSA wiretap story — not only for a whole year, but, very critically, past the election of 2004. I think it quite possible that the revelation that the President had, for three years, been blatantly violating the law…"

Abramson cut Ellsberg off at this point. She then added:

"The thing is when the government says — you know, by publishing a story you’re harming the national security, you’re helping the terrorists. I mean there are still people today who argue that the NSA program was the crown jewel, the most valuable anti-terrorism program that the Bush administration had going, and that it was terribly wrong of the Times to … publish.

"In the end, we did go ahead. But I’m saying these are not cavalier decisions."

Plain-speaking Max Frankel, no doubt in deference to the current Times management, let a few minutes go by before offering a pithy comment — out of his "old Times" experience — on the "heavy burden" of secrecy:

"The heavy burden you have to hear in your inner ear in this business perfectly decent people saying, ‘Who elected you to decide what’s in the national interest?’"

Scotty Reston

That, of course, is what the Times’ highly respected elder statesman, the late James Reston — also one-time Washington Bureau Chief and then executive editor — would have said.

At times he, too, found it in the national interest to work closely with government officials to address their legitimate concerns. Although Reston broke many stories as a reporter, he recognized there could be times when discretion was required. He knew about the U-2 flights over the U.S.S.R., but refrained from writing about them until one of the plans went down in 1960.

On the other hand, Reston viewed issues of government abuse of power – like whether or not to publish the Pentagon Papers (and, he surely would have included the illegal wiretapping story in this category) – not at all complicated.

According to his Times colleague Anthony Lewis, James Reston said at one meeting, "If the Times did not publish the Pentagon Papers, he would publish them in the Vineyard Gazette," the Martha’s Vineyard weekly that he owned.

While the Bush administration and many in the U.S. news media are fond of saying that "9/11 changed everything," the truth is that the New York Times and the Washington Post had changed before 9/11. This came through very clearly at a National Press Club affair on June 5, 2001, marking the 30th anniversary of the publication of the Pentagon Papers.

It was like old-home week, in more ways than one. My former responsibilities as a CIA analyst writing about Soviet policy toward Vietnam got me invited. Many old hands were there, including Hedrick Smith of the Times, and its gutsy former general counsel James Goodale, as well as Don Oberdorfer and William Glendon from the Post.

The nostalgia was thick and the stories almost uniformly of the patting-our-backs kind. (See the excellent account of the anniversary proceedings in Inside the Pentagon Papers, edited by John Prados and Margaret Pratt Porter.)

Goodale had made it clear that he saw no legal impediment to publishing the Pentagon Papers and that he would quit the Times if they did not publish Ellsberg’s documents. The same was true of other major U.S. newspapers. Old-pro Vietnam reporter for the Washington Post, Chalmers Roberts, who was approaching retirement, was quoted as telling Post management:

"If you withhold this [the Ellsberg papers], I’m not retiring; I’m quitting. And I’m going to tell the whole world why."

Skunk at the Picnic

The scene was effusive and edifying — that is, until a woman in the back posed the $64 question about the state of the news media in 2001: "Gentlemen," she asked, "suppose someone were to give to your former newspapers today documents equivalent to the Pentagon Papers. Would the Times and Post publish them?"

There was a very prolonged, awkward silence, after which the panelists went down the line, starting with Rick Smith, who expressed some serious doubt that they would. By the time they got down to the panelist on the end, the answer was pretty much, "No way would our papers publish that kind of ‘leak’ today."

I looked on in some awe. There it was, right before me. The new Times and the new Post. Perhaps what struck me most was that, even though there must have been some residual inclination to paint their former employers in a favorable light, none of that came through. Indeed, none of that, apparently, seemed necessary.

There was not the slightest tinge of regret or even embarrassment in the answers. The attitude was (to me painfully) clear: That’s just the way it is today.

And it was more than three months before 9/11.

Back at the TimesCenter

The New York Times/Ellsberg affair on Sept. 13 was supposed to run for two hours, but moderator Abramson closed it off after a little more than a half hour. Still, to her credit, she did honor an earlier promise to carve out some time for questions.

Veteran investigative journalist Robert Parry’s article of two days before, "NYT Pushes Confrontation With Iran," was fresh in my mind.

Observing that the Times was slipping into the same kind of hysteria as it did before the 2003 attack on Iraq, Parry pointed to the Times lead editorial of Sept. 9, which concluded with this judgment:

"Tehran, predictably, insists it is not building a [nuclear] weapon. Its refusal to halt enrichment and cooperate with the I.A.E.A. [International Atomic Energy Agency] makes that ever more impossible to believe."

Parry’s piece, and the many uncertainties attending the long-delayed update of the U.S. intelligence estimate on Iran’s nuclear program, brought me to the microphone:

"My question … has to do with Iran’s nuclear program. The facts are that 16 intelligence agencies of this government decided unanimously, with high confidence, in November 2007, that Iran stopped working on the nuclear weapons part of its nuclear program in the fall of 2003.

"We have a new intelligence director. Let’s say he comes in and says, ‘We’re going to change that estimate. We’re going to fix it around the policy. We’re going to change the final draft already agreed to [the draft of the updated estimate due this year] and we’re going to say that Iran presents a major danger and it’s imminent.’

"Now, what should an analyst who participated in this very honest process, as happened in November of 2007 —

[NYT managing editor Jill Abramson interrupts with an "Okay."]

"What should he do? Should he go to the New York Times? Or should he go to WikiLeaks? If he goes to the New York Times there is going to be considerable delay, maybe 14 months delay."

Got to give them credit: very quick, these New York Times people. Abramson ducked the question by turning to Ellsberg: "What should an analyst do? And since you were an analyst, why don’t you take a cut at it," she asked Dan.

Oh well. I guess it’s clear enough. Once again, you truth-tellers out there, don’t waste your truth on the New York Times. Sadly, that time has passed.

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Six Predictions for 2011

SUBHEAD: How will the economy affect average Americans this year? No so kindly.

Ryan McCarthy & Amy Lee on 3 January 2011 in HuffPo -
(http://www.huffingtonpost.com/2011/01/03/economic-predictions-2011_n_803413.html?page=1)


Image above: Harvey Lesser, 58, about to pass his possessions laid in the snow after he is evicted from his home. From (http://www.theblackurbantimes.com/2009/12/first-jobless-now-homeless-times.html).

We all remember the worst of 2010: high unemployment, an ongoing foreclosure crisis and megabanks, whose legally dubious practices in foreclosing on millions of homes, managed to spread public anger and financial uncertainty.

To figure out just how the economy would shape our lives in 2011, we asked 6 economists and analysts to cut to the chase and give us their predictions. Instead of the focusing on the market, or the latest intrigue in corporate America we decided to ask our experts a simple question: how will the average American be affected by the economy in the 12 months?

The answers varied, but the majority of our experts did not forecast a dramatic improvement in the labor market or, for that matter, in the housing market. What does 2011 hold in store? Check out the predictions below:

Mark Zandi, Chief Economist, Moody's Analytics:

"The average American will feel measurably better about their financial situation by this time next year. Hiring will improve as 2011 progresses and unemployment will fall. By this time next year, unemployment will be below 9%.

Behind this optimism is that U.S. businesses, particularly large and mid-sized companies, are very profitable and their balance sheets are strong. It is no longer a question of whether businesses can hire and invest more strongly, but are they willing. With the nightmare of the Great Recession fading and the policy uncertainty created by the epic policy decisions of the past year abating, businesses will become more willing.

Stock prices will continue to march higher, reflecting prospects for continued strong corporate earnings growth. The gains won't be as large as the past two years, as investors are already expecting a lot from the U.S. economy in 2011.

The economy will also receive a sizable boost from the recent tax cut deal. Lower payroll taxes, more emergency unemployment insurance benefits, and investment incentives for businesses will ensure that the current recovery evolves into a self-sustaining expansion next year.

The principal threat to economy in 2011 is the ongoing foreclosure crisis. With close to 4 million homeowners in foreclosure or seriously delinquent and headed to foreclosure, the share of home sales that are distressed - foreclosure and short - will rise. This ensures more house price declines, particularly early in 2011. As long as house prices are weakening, the economy is at risk; the home is still the most important [asset] most households own and banks will remain reluctant to extend credit until prices stabilize.

Another major economic headwind that will blow hard next year is the ongoing budget shortfalls at state and local governments. There will be more job and program cuts and tax increases as they work to fill their budget holes that will remain sizable given the end to any further financial help from the federal government. Fears of widespread municipal bond defaults are overdone, but state and local governments will remain a sizable drag on the economy."

Dean Baker, co-director of the Center for Economic and Policy Research:

"I expect little improvement in the labor market, with unemployment at best drifting down slightly. Wages will at best keep pace with inflation.

House prices will fall sharply, ending the year about 15 percent below their peaks in 2010. Economists will be surprised. This will mean more people underwater and probably some increase in the rate of foreclosure as the government remains too much under the control of the bankers to do anything meaningful.

There will be further cutbacks in education and all other services provided by state and local governments.

The weak labor market and falling house prices will further worsen the financial situation of near retirees. However this will do nothing to slow the drive to cut Social Security and Medicare. This crusade is being driven by a quest to redistribute income from the middle class to the wealthy and is not affected by economic reality."


Glen Hubbard, Dean and Russell L. Carson Professor of Finance and Economics, Columbia Business School:

"Timid public policy toward joblessness will be a growing factor in the buildup to the 2012 race.

We will see a municipal finance crisis in the U.S., arising on its own or fueled in part by rising spreads in borrowing costs coming from sovereign Euro woes.

We will see strong fiscal policy consideration of two ideas previously thought untouchable - (a) cutting the corporate income tax rate, and (b) slowing the rate of Social Security benefit growth for upper-income households. The former will be cast as pro-jobs; the latter will be cast as showing seriousness about the nation's long-term budget problems.

Backlash against the Federal Reserve will grow. From the left, the charge will be "too cozy with big finance." From the right, the charge will be "mission creep and too cavalier about future inflation.""

Douglas Elliot, Fellow, Economic Studies, Initiative on Business and Public Policy, Brookings Institution:

"There's a great deal of uncertainty, but the likeliest outcome is that the economy will grow at a decent clip in 2011, although nothing like the sharp recovery we've had from some past recessions. This would bring a modest decline in unemployment, but may not be enough to prevent housing prices from falling a bit further before bottoming out. For its part, the financial sector should make substantially more progress in working its way out of past problems, building on improvements in 2010.

In sum, 2011 is likely to be a year of noticeable progress as we continue to work through the after-effects of the terrible recession, but many problems will remain, including quite high levels of unemployment. The good news is that 2012 may be substantially better still, including the possibility of a serious decline in unemployment.

The financial regulatory reforms will have major effects over time, but little will be evident to the average person in 2011 - the real impact will be over time."

Chris Whalen, Cofounder and Managing Director, Institutional Risk Analytics:

In a recent letter to clients, Whalen describes three bearish scenarios that could wreak havoc on the U.S. economy.

1. "For the next year, the housing, construction and related sector we expect to see deflation driven by lower home prices," Whalen wrote in his letter to clients. Next year, his firm predicts predicts, home prices could fall another 10 percent nationally - and that, Whalen writes, may be too conservative. Pulling down prices further will be a wave of bank-owned properties yet to hit the market.

2. According to Whalen, there will be mounting national and international problems created by concerns about sovereign debt. In the U.S. "the GOP leadership has made it clear in public and we have confirmed privately that the Republicans are perfectly willing to see a major state or group of states flirt with or actually even default," he wrote. The fiscal crisis, he adds, will be used as an opportunity to "gut the pension funds and public sector unions that are the foundation of the Democratic party."

3. A decrease in funding to states and municipalities coupled with a souring real estate landscape could spell big trouble for mega-banks, especially Bank of America, Whalen writes.

Large banks could very well ask for the government for more money or face a restructuring, Whalen predicts, if the Obama administration does not address the problem of millions of Americans living in homes that are worth less than their mortgages. Here's Whalen:

A continuation of the current policy of extend and pretend, however, implies an extended economic malaise and the possibility of a "surprise" as and when [Bank of America] or one of the other large securitization banks (1) reveals additional negative data to a systemically bullish marketplace and/or (2) is subject to an event in the courts that pushes the institution into a restructuring.

Edward Harrison, Founder, CreditWritedowns.com:

"I am feeling a lot more optimistic about the real economy in the US. If you look at the traditional measures of business cycles, all of them are looking pretty good right now: real GDP, real income, employment, industrial production, and wholesale-retail sales. My guess is that real GDP will tick up in the 2-3% range over the first half of the year. The question is the second half. And that's where some of the problems looming underneath come into play.

Housing is clearly double-dipping right now. This has a direct impact on employment because it traps people in homes that are underwater and therefore decreases job prospects as potential jobs in different cities become impossible. The housing double dip also affects how Americans deal with their finances because the psychological effect goes to greater precautionary savings and debt reduction and lower spending. After the stock market drops after 1999 and 2007, Americans learned that the market is not always moving in their favor. These events were painful for those close to retirement age. After 1999, we saw Americans react by moving into residential property as an investment. However, after the collapse in home prices, Americans are more dependent than ever on the 401(k) for saving for retirement. With both stock market and housing market seen as unstable, precautionary savings is bound to increase. A housing double dip only reinforces this dynamic.

Financial regulatory reform has not been groundbreaking in any way. During the crisis, insolvent smaller institutions have failed en masse. Meanwhile the largest institutions have been protected from their own mistakes via bailouts and other hidden subsidies. Nothing in the Dodd-Frank Act changes this. The Dodd-Frank Act is to this crisis what Sarbanes-Oxley was to the last crisis. Dodd-Frank creates more regulations but doesn't address the systemic issues like 'too big to fail.'

The last big American issue is state and municipal funding. My view is that defaults are likely, but the timing and magnitude of the defaults is unclear. The prediction by Meredith Whitney for defaults on hundreds of billions of principal of municipal bond seems impossibly high -especially in a multi-year recovery. Likely we will see service cuts and revenue hikes via taxes and school tution before we see default. These remedies have not been taken by all of the states with the biggest problems. And certainly, cuts and tax hikes are doable in a recovering economy where they may not be in a recession. So it's not clear to me that the muni problem is a 2011 problem yet.

So, on the whole, I am positive. We still have a lot of problems: mortgage fraud, foreclosures, elevated unemployment, house price declines, state and municipal finances, and most importantly high household sector debt loads. The US is not out of the woods and faces the additional contagion risk from Europe. But for the next six months, things should be on an uptrend."

Mark Blyth, fellow at the Watson Institute for International Studies and professor at Brown University:

"Impeding the recovery is all but guaranteed. The foreclosure mess will get worse and bank revenue will go down as costs go up further straining their balance sheets and limiting lending. On the consumer side, savings will stay up as consumers pay down debts, so consumption expenditures, 70 percent of the economy, will remain weak. [Political] gridlock will limit any public sector offsets.

As for major threats, those are the impending debt ceiling vote (don't think that the Tea Party folks now in Congress will not burn down the village to save it) and the future of the Eurozone, which, if it blows up, will depress global demand considerably.

Unemployment will stay high. The most often reported figure from the BLS, is an understatement. The real figure [which includes people who have given up looking for work or are underemployed] is best estimated by their U6 series, which currently sits at 17 percent. Interestingly, after decades of Euro-bashing and cheering for the Great American Jobs Machine (lots of jobs at crappy pay), it now seems that, according to Martin Baily from the McKinsey Global Institute, the rate at which Europe successfully created new jobs in the last decade above population growth was greater than that of the United States. From 1995 to 2008, the EU-15 created 23.9 million additional jobs, while the United States created 20.5 million. So, given faster population growth in the U.S., we need to grow even faster to stand still with the terrible real unemployment that we have.

[Banks will behave] badly. If I am right that their business model is in decline, then having defeated almost all meaningful reform attempts you can expect the same practices that caused the crisis - generating risk, under-insuring, and playing with leverage - to continue. And as revenues shrink and costs go up more risks will be generated to cover these lost areas of revenue until they get into trouble again. They win no matter what happens in the real economy. 'Too big to fail' is, and continues to be, an extortion racket."
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Record Food Prices

SUBHEAD: World food prices jump to record on sugar and oilseed costs.

By Rudy Reutenberg on 5 January 2011 for Bloomberg News -
(http://www.bloomberg.com/news/2011-01-05/global-food-prices-climb-to-record-on-cereal-sugar-costs-un-agency-says.html)


Image above: Oilseeds.

World food prices rose to a record in December on higher sugar, grain and oilseed costs, the United Nations said, exceeding levels reached in 2008 that sparked deadly riots from Haiti to Egypt.

An index of 55 food commodities tracked by the Food and Agriculture Organization gained for a sixth month to 214.7 points, above the previous all-time high of 213.5 in June 2008, the Rome-based UN agency said in a monthly report. The gauges for sugar and meat prices advanced to records.

Sugar climbed for a third year in a row in 2010, and corn jumped the most in four years in Chicago. Food prices may rise more unless the world grain crop increases “significantly” in 2011, the FAO said Nov. 17. At least 13 people died last year in Mozambique in protests against plans to lift bread prices.

“There is still, unfortunately, the potential for grain prices to strengthen on the back of a lot of uncertainty,” Abdolreza Abbassian, senior economist at the FAO, said by phone from Rome today. “If anything goes wrong with the South American crop, there is plenty of room for them to increase.”

White, or refined, sugar traded at $752.70 a metric ton at 11:53 a.m. on NYSE Liffe in London, compared with $383.70 at the end of June 2008. Corn, which added 52 percent last year on the Chicago Board of Trade, was at $6.01 a bushel, down from $7.57 in June 2008. Soybeans were at $13.6325 a bushel, against $15.74 at the close of June 2008.

Demand From China

The cost of food climbed 25 percent from a year earlier in December, based on the FAO figures, after Chinese demand strengthened and Russia’s worst drought in a half-century devastated grain crops. The agency’s food-price indicator rose from 206 points in November.

Last month’s year-on-year rise compares with the 43 percent jump in food costs in June 2008. Record fuel prices, weather- related crop problems, increasing demand from the growing Indian and Chinese middle classes, and the push to grow corn for ethanol fuel all contributed to the crisis that year.

“In 2008 we had rapid increases in petroleum prices, fertilizer prices and other inputs,” Abbassian said. “So far, those increases have been rather constrained. It doesn’t really reduce the fear about what could be in store in the coming weeks or months.”

New York-traded crude was last at $88.44 a barrel, compared with $140 at the end of June 2008. Bulk urea pellets, used in fertilizer as a source of nitrogen, were at $320 a ton in the last week of December, against $460 in June 2008.

9.1 Billion People

Global food production will have to rise 70 percent by 2050 as the world population expands to 9.1 billion people from about 6.8 billion people in 2010, the FAO has said.

In response to the 2008 crisis, countries from India and Egypt to Vietnam and Indonesia banned exports of rice, a staple for half the world. Skyrocketing food prices sparked protests and riots in almost three dozen poor nations including Haiti, Somalia, Burkina Faso and Cameroon.

Sugar and oilseeds have a disproportionate effect on the FAO’s food index because it’s based on trade values for commodities, Abbassian said. The price of staples including rice is lower than in 2008, he said. Rough rice last traded at $13.90 per 100 pounds in Chicago, compared with $20.21 at the end of June 2008.

“If you want to see the index as a barometer of food crisis, I’m not so sure this is the right thing to do,” Abbassian said. “In the previous episode, really the main driver in food commodities was cereals. This time around, look at sugar and oilseeds.”

Grain Inventories

Compared with 2007-2008, many poor countries had “good or above-average” cereal harvests last year, the economist said. Production problems took place in grain-exporting countries, and “supply at hand should be adequate,” he said.

The FAO’s gauge for sugar prices reached 398.4 points last month, increasing from 373.4 in November. The meat-price index rose to 142.2 points from 141.5.

The agency’s cereal-price index jumped to 237.6 points in December, the highest level since August 2008, from 223.3 the previous month. The indicator for cooking oils advanced to 263 points, the highest since July 2008, from 243.3. The index for dairy prices rose to 208.4 points from 207.8.

Global grain output will have to rise at least 2 percent this year to meet demand in 2011-2012 and avoid further depletion of stocks, the UN agency has said.

The basis for the FAO index is 2002-04. The gauge includes commodity quotations that the agency considers representative for international food prices.

“The real uncertainty and problem is the 2011-2012 market,” Abbassian said. “We are at a very high level. If it’s further up than this, then you really begin to be concerned.”

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The Tarpaper Shack Principle

SUBHEAD: Its only useful if you can build it from readily available materials, and put it to work, while living in the an old fashioned tarpaper shack.

By John Michael Greer on 5 January 2011 for ArchDruid Report -
(http://thearchdruidreport.blogspot.com/2011/01/tarpaper-shack-principle.html)


Image above: A tarpaper shack during winter in Nova Scotia, Canada. From (http://www.flickr.com/photos/rwkphotos/3056811809).

Was it just me, or were last Friday’s New Year celebrations a bit short on enthusiasm? The chance to give the smoking wreckage of 2010 a decent burial might have inspired some cheer, except that 2011 seems unlikely to bring anything better. With the price of oil lurching around the $90-something a barrel range, a so-called economic recovery that has been almost entirely confined to press releases, and the electorate slowly waking up to the fact that the only change they can believe in that’s coming from the Obama administration is the kind Rudy Vallee sang about in “Brother, Can You Spare A Dime?” – well, let’s just say that none of this adds up to optimism for the year ahead.

Thus the New Year’s Eve blog post from Chuck Burr at Southern Oregon Permaculture was timely. At a time when plenty of people are still insisting that the whole world can adopt a middle-class lifestyle powered by renewable energy resources, Burr cited hard numbers from a representative case study – his own solar-powered home – to show why high-tech renewables are at most a way station partway down the Long Descent.

His argument will be familiar to readers of this blog: the photovoltaic system that powers his home won’t generate enough electricity in its lifetime to both account for the power that goes into making and maintaining it, and provide enough electricity to maintain a modern lifestyle for its end user. Burr went on to suggest, reasonably enough, that using high-tech renewables is still a good idea for now, since it will help cushion the future in which green plants may well turn out to be the most efficient source of primary energy around.

He’s likely right, but there are challenges in the way of even so modest a project. The obvious issue – the fact that the very large number of people closing in on their 99th and last week of unemployment benefits, and the even larger number caught in the stagflationary vise of dwindling wages and soaring bills, aren’t going to be in any position to buy and install expensive photovoltaic systems – is symptomatic of a far more profound and pervasive difficulty.

That difficulty, interestingly enough, was sketched out well in advance in the pages of The Limits to Growth, still the best – and thus, inevitably, the most reviled – map of the future toward which the industrial world is hurtling, eyes closed and pedal to the metal. It’s always fascinated me that in a society that claims to make most of its decisions on the basis of economics, so few people grasped the essentially economic argument at the core of the Limits to Growth analysis.

That study did not claim, as so many people still insist it claimed, that the resources on which industrial society depends are going to up and run out one of these days. It proposed, rather, that the real costs of extracting resources and dealing with the consequences of environmental pollution, both of which are driven by economic growth, necessarily increase faster than the rate of economic growth itself, and sooner or later will force industrial civilization to its knees.

Perhaps the most visible signpost along the way to that destination is the point at which a society can no longer provide for its future and pay its current expenses out of existing resources. You know that point has arrived when a society begins neglecting its infrastructure, slashing basic services, discarding those economic sectors that cost too much to maintain, and abandoning those people who lack the political clout to make good a claim on slices of the dwindling pie. Readers here in America who don’t find this description oddly familiar are encouraged to take a good hard look out the nearest window.

The consequences of that logic pose an immense challenge to the more optimistic proposals for dodging the resource crunch at the end of the age of cheap petroleum – the nuclear power plants, high-speed rail networks, immense solar installations in assorted desert countries, and the rest of it. All these would require huge inputs of real wealth – not currency, which can be manufactured at will by central banks, but energy, materials, knowledge, and labor – real wealth – which are a good deal harder to conjure up out of twinkle dust.

The Limits to Growth model suggests that underneath the smoke and mirrors of the financial economy lies the awkward fact of a shortfall in real wealth, caused by the need to divert a growing fraction of real wealth to meet the direct and indirect costs of extracting resources, on the one hand, and coping with the impacts of environmental pollution on the other. If that’s what’s going on – and I think a good case could be made for that thesis – then trying to scrape together enough real wealth to cover the cost of these projects simply piles another burden onto an already overloaded economic structure, and if pursued with enough misplaced enthusiasm, could conceivably become the trigger that brings the whole thing crashing down.

Now of course there’s another way to go about preparing for a future of scarce expensive energy, and it’s one of the key strategies of the "green wizardry" I’ve been discussing here over the last six months or so. The central concept of that strategy might as well be called the Tarpaper Shack Principle: you don’t actually have a resilient energy technology unless you can build it from readily available materials, and put it to work for some useful purpose, while living in the kind of tarpaper shack the last Great Depression made famous.

You may well end up living in something like that, you know; a great many people did the last time the industrial economy came unglued, and we are arguably in a much worse position today than in 1930, so looking up some renewable energy technologies that could have been made and used in a 1930s Hooverville may be more than a thought exercise just now.


Image above: Example of a cardboard and foil solar box cooker. From (http://solarcooking.wikia.com/wiki/%22Minimum%22_Solar_Box_Cooker).

Finding such technologies may seem like a tall order. It isn’t; there are scores of proven, mature technologies that can be tacked together from scrap, powered by renewable energy sources that cost little or nothing, and contribute mightily to getting the basic tasks of living done more easily, safely, and cheaply. The fireless cooker, the topic of last week’s post here, is one of them, and so is the technology I’d like to introduce this week, the solar box cooker.

It’s hard to think of anything as cheap that accomplishes as much. You can make one out of cardboard, glue, used newspaper, aluminum foil, and a piece of discarded window glass. Placed in direct sunlight, it will easily get up to oven temperatures and cook your meals for free. It can also be used to purify tainted water, sterilize bandages, or do anything else that 300° to 400° F of even heat will do for you.

The solar box cooker also has the not inconsiderable advantage of teaching three of the basic rules of working with solar energy in a way most people grasp intuitively at once.

Rule #1 is the greenhouse effect: energy from sunlight that passes through glass and is absorbed by something inside the glass tends to get trapped there, because glass is transparent to visible light but opaque to the infrared wavelengths that radiate out from warm objects.

Rule #2 is the thermal mass effect: some materials absorb heat better than others, and if you put something with a high capacity for heat absorption in the presence of a heat source – say, a pot of beef stew in direct sunlight – it will soak up heat that can then be put to work.

Rule #3 is the insulation effect: some materials resist the flow of heat better than others, and if you surround your thermal mass with a bunch of insulation, the heat absorbed by the thermal mass will stick around longer and do more work. (Keep these three rules in mind and most of what we’ll be covering in the months just ahead will be a lot easier to follow.)

There are several standard designs of solar box cooker. The simplest looks exactly like what the term suggests, a square or rectangular box – or, more precisely, a box within a box, with insulation between them to form a heat barrier – with a pane of glass on top. A hinged lid covers the glass when the box cooker isn’t in use; it has tinfoil on the underside, so that when you’re ready to use the box, the lid can be propped up at an angle to reflect more sunlight into the box. Yes, you can make one out of cardboard and newspaper in about an hour, and yes, you can then set it out in the sun and cook your dinner with it.

The more complex designs put the glass pane at an angle, to increase the amount of sunlight that gets in, and have more reflecting surfaces for the same reason; the fanciest look like metal flowers or props from 1970s science fiction movies, and you don’t want to make them out of cardboard because they can get hot enough inside to set the cardboard on fire. I’ve seen some very impressive solar box cookers on the fancy end of things, with mirrors that would do justice to a telescope and elegant arrangements to track the sun; they arguably go well beyond anything you’d be able to put together while living in a tarpaper shack, but there’s always the possibility that you might get lucky while combing through the ruins of an abandoned suburban housing development.

Two other developments off the same basic approach are also worth mentioning. The first was invented by one of the patron saints of green wizardry, the redoubtable 19th-century French solar energy pioneer Augustin Mouchot. Tasked by the French government with coming up with solar technologies for the French colony in Algeria – which has a surplus of sun and, at least in Mouchot’s time, a shortage of most other energy sources – Mouchot invented, among other things, a solar cooker for units of the French Foreign Legion stationed there.

The device was simplicity itself – a cone of metal, reflective on the inside; a cylindrical steel cooking chamber that went up the centerline of the cone; and a tripod stand. Mouchot’s solar cooker was collapsible, weighed less than forty pounds, and cooked a pot roast to a nice medium rare in under half an hour. It remained standard issue for French troops in North Africa for decades; I have no idea if any examples survive, but it’s 19th century technology, and an enterprising metalworker ought to be able to knock one together fairly easily – even in a tarpaper shack.

The other device I have in mind comes from the other end of the solar cooking spectrum, but it’s as elegant as the Mouchot cooker and even more portable. The Umbroiler was invented by American solar pioneer George Löf and marketed for a while in the 1960s and 1970s. It’s exactly what the name suggests: a sturdy umbrella frame with silver metallized cloth in place of the usual fabric, a grill in place of the handle, and a tripod on what’s normally the top of an umbrella and is the underside of the Umbroiler. It folds up like any other umbrella, but when you open it and point it toward the sun, you can cook anything from fried eggs to hot coffee on the grill. The original version was too expensive to be commercially viable, due mostly to the high cost of metallized fabric back in the 1960s; these days, that has changed, and since any patents have long since expired, a revival of the Umbroiler could make somebody with a sewing machine and some metalworking skills a very functional small business.

By now, I suspect, some of my more skeptical readers will doubtless be jumping up and down, eager to point out that solar cookers aren’t viable everywhere, and only work when the sun’s shining. This is of course true, but it’s also beside the point. Nothing in the appropriate technology toolkit is suited to every context – that’s one of the implications of that word "appropriate," after all – and nothing ever again in human history will provide our species with the kind of instant, context-free torrent of energy we now get from fossil fuels.

Once those are gone, the entire approach to technology that’s built on the assumption of abundant, highly concentrated, highly portable energy supplies goes whistling down the wind, and the approaches – in the plural – that will replace it are going to be less convenient, less portable, and less capable of ignoring the rest of the cosmos than what we’re used to.

What that means in practical terms is that the well-equipped kitchen in the tarpaper shack that’s waiting for you a few years down the line will have a solar box cooker, which you can use on sunny days, and a small, efficient stove and fireless cooker, which you can use on cloudy days. It really isn’t that complicated, once you grasp the crucial point that a technology that relies on diffuse renewable energy sources doesn’t work the same way as a technology that relies on concentrated fossil fuels. That’s one of the lessons of the Tarpaper Shack Principle, and it’s also one of the gifts that the solar box cooker in particular has to offer.

Resources

The solar box cooker is one of the few creations of the old appropriate tech movement that hasn’t been allowed to languish in obscurity, largely because of its huge advantages in the Third World. The photocopied pamphlets I got back in the day from Solar Box Cookers Northwest, one of the pioneering organizations in the field, have long since been superseded by websites brimfull of practical information. The best of the lot just now is http://www.solarcooking.org -- click on the link marked "build a solar cooker" and you’ll soon be wallowing in plans I would gladly have given my eye teeth to get hold of thirty years ago.

There are also several very good books on the subject. Beth Halacy and Dan Halacy’s Cooking with the Sun is a little out of date but remains well worth having, not least because of its detailed recipes and cooking instructions. Joseph Radabaugh’s Heaven’s Flame covers many of the newer developments and provides an excellent guide to designing and building your own inexpensive solar cookers. Another durable classic, Ken Butti and John Perlin’s A Golden Thread, covers the early history of solar cooking and has a good illustration of Mouchot’s solar cooker.

See also:
Ea O Ka Aina: The Haybox Factor 12/21/10

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Peak Oil and a Changing Climate

SUBHEAD: In this video scientists, researchers and writers explain what will happen when the world's supply of oil starts to runs out.

By staff on 5 January 2011 in The Nation -
(http://www.thenation.com/article/157434/peak-oil-and-changing-climate)


Image above: The banner ad over the masthead of this article by the Nation. Somebody has to pay the bills around here.

The scientific community has long agreed that our dependence on fossil fuels inflicts massive damage on the environment and our health, while warming the globe in the process. But beyond the damage these fuels cause to us now, what will happen when the world's supply of oil runs out?

Peak Oil is the point at which petroleum production reaches its greatest rate just before going into perpetual decline. In “Peak Oil and a Changing Climate,” a new video series from The Nation and On The Earth productions, radio host Thom Hartmann explains that the world will reach peak oil within the next year if it hasn’t already. As a nation, the United States reached peak oil in 1974, after which it became a net oil importer.

Bill McKibben, Noam Chomsky, Nicole Foss, Richard Heinberg and the other scientists, researchers and writers interviewed throughout “Peak Oil and a Changing Climate” describe the diminishing returns our world can expect as it deals with the consequences of peak oil even as it continues to pretend it doesn’t exist. These experts predict substantially increased transportation costs, decreased industrial production, unemployment, hunger and social chaos as the supplies of the fuels on which we rely dwindle and eventually disappear.

Chomsky urges us to anticipate the official response to peak oil based on how corporations, news organizations and other institutions have responded to global warming: obfuscation, spin and denial. James Howard Kunstler says that we cannot survive peak oil unless we “come up with a consensus about reality that is consistent with the way things really are.” This documentary series hopes to help build that consensus. Click here to watch the introductory video, and check back here for new videos each Wednesday.


Video above: Peak Oil and a Changing Climate: An Introduction. From (http://www.youtube.com/watch?v=UUmwy0VTnqM). This video can also be seen at The Nation (http://www.thenation.com/video/157441/peak-oil-and-changing-climate).

WikiLeaks & the 1st Amendment

SUBHEAD: The bottom line is this: The proposed SHIELD Act, to mute press freedom, is plainly unconstitutional.

Image above: WWI enlistment poster suggesting that going to war was better than reading the paper. From (http://www.phawker.com/2010/12/13/the-awful-truth-about-the-espionage-act-of-1917/). NAOMI WOLF: The Espionage Act was crafted in 1917 — because President Woodrow Wilson wanted a war and, faced with the troublesome First Amendment, wished to criminalize speech critical of his war. In the run-up to World War One, there were many ordinary citizens — educators, journalists, publishers, civil rights leaders, union activists — who were speaking out against US involvement in the war. The Espionage Act was used to round up these citizens by the thousands for the newly minted ‘crime’ of their exercising their First Amendment Rights. A movie producer who showed British cruelty in a film about the Revolutionary War (since the British were our allies in World War I) got a ten-year sentence under the Espionage act in 1917, and the film was seized; poet E.E. Cummings spent three and a half months in a military detention camp under the Espionage Act for the ‘crime’ of saying that he did not hate Germans. Esteemed Judge Learned Hand wrote that the wording of the Espionage Act was so vague that it would threaten the American tradition of freedom itself. Many were held in prison for weeks in brutal conditions without due process; some, in Connecticut — Lieberman’s home state — were severely beaten while they were held in prison. The arrests and beatings were widely publicized and had a profound effect, terrorizing those who would otherwise speak out.

By Geoffrey R. Stone on 4 January 2011 for Huffington Post -

(http://www.huffingtonpost.com/geoffrey-r-stone/wikileaks-and-the-first-a_b_804381.html)

The so-called SHIELD Act, which has been introduced in both Houses of Congress, would amend the Espionage Act of 1917 to make it a crime for any person knowingly and willfully to disseminate, in any manner prejudicial to the safety or interest of the United States," any classified information... concerning the human intelligence activities of the United States or... concerning the identity of a classified source or informant" who is working with the intelligence community of the United States.

Although this Act may well be constitutional as applied to a government employee who unlawfully "leaks" such material to persons who are unauthorized to receive it, it is plainly unconstitutional as applied to other individuals or organizations who might publish or otherwise disseminate the information after it has been leaked. With respect to such other speakers, the Act violates the First Amendment unless, at the very least, it is expressly limited to situations in which the dissemination of the specific classified information at issue poses a clear and present danger of grave harm to the nation.

The clear and present danger standard, in varying forms, has been a central element of our First Amendment jurisprudence ever since Justice Oliver Wendell Holmes first enunciated it in his 1919 opinion in Schenk v. United States. In the 90 years since Schenck, the precise meaning of "clear and present danger" has evolved, but the principle that animates the standard was stated eloquently by Justice Louis D. Brandeis in his brilliant 1927 concurring opinion in Whitney v. California:

Those who won our independence... did not exalt order at the cost of liberty... [They understood that] only an emergency can justify repression. Such must be the rule if authority is to be reconciled with freedom. Such... is the command of the Constitution. It is, therefore, always open to... challenge a law abridging free speech . . . by showing that there was no emergency justifying it.
This principle is especially powerful in the context of government efforts to suppress speech concerning the activities of the government itself, for as James Madison observed, "A popular Government, without popular information, or the means of acquiring it, is but a Prologue to a Farce or a Tragedy; or perhaps both." As Madison warned, if citizens do not know what their own government is doing, then they are hardly in a position to question its judgments or to hold their elected representatives accountable. Government secrecy, although sometimes surely necessary, can also pose a direct threat to the very idea of self-governance.

Nonetheless, the First Amendment does not compel government transparency. It leaves the government extraordinary autonomy to protect its own secrets. It does not accord anyone the right to have the government disclose information about its actions or policies and it cedes to the government considerable authority to restrict the speech of its own employees. What it does not do, however, is leave the government free to suppress the free speech of others when it has failed itself to keep its own secrets. At that point, the First Amendment kicks in with full force, and, as Brandeis explained, only an emergency can justify suppression.

We might think of this like the attorney-client privilege. The client is free to keep matters secret by disclosing them to no one. He is also free to disclose certain matters to his attorney, who is under a legal obligation to respect the confidentiality of her client's disclosures. In this sense, the attorney is like the government employee. If the attorney violates the privilege by revealing the client's confidences to a reporter, the attorney can be punished, but the newspaper cannot constitutionally be punished for disseminating the information.

Now, some may wonder whether it makes sense to give the government so little authority to punish the dissemination of unlawfully leaked information. But there are very good reasons for insisting on a showing of clear and present danger before the government can punish speech in this context.

First, the mere fact that the dissemination of such information might, in the words of the proposed SHIELD Act, "in any manner prejudice the interests of the United States," does not in any way mean that that harm outweighs the benefit of publication. In many circumstances, such information may be extremely valuable to public understanding.

Second, a case-by-case balancing of harm against benefit would be unwieldy, unpredictable, and impracticable. Clear rules are essential in the realm of free speech, and that is one reason why we grant the government so much authority to restrict the speech of its own employees.

Third, the reasons why government officials want secrecy are many and varied. They range from the truly compelling to the patently illegitimate. Human nature being what it is, public officials who want secrecy for questionable reasons are often tempted to "justify" their demand for secrecy by putting forth exaggerated, and even disingenuous, justifications. The clear and present danger standard requires the government to clear a high bar to restrict speech, in part to avoid squabbles about the "real" government interest.

Fourth, as we have learned from our own history, there are great pressures that lead both government officials and the public to overstate the potential harm of publication in times of national anxiety. A strict clear and present danger standard serves as a barrier to protect us against this danger.

And finally, a central principle of the First Amendment is that the suppression of public speech must be the government's last rather than its first resort in addressing a potential problem. If there are other means by which government can prevent or reduce the danger, it must exhaust those other means before it can suppress the freedom of speech.

In the secrecy situation, the most obvious way for government to prevent the danger is by ensuring that information that must be kept secret is not leaked in the first place. Indeed, the Supreme Court made this very point quite clearly in its 2001 decision in Bartnicki v. Vopper, in which the Court held that when an individual receives information "from a source who has obtained it unlawfully," that individual may not be punished for publicly disseminating the information "absent a need of the highest order."

The Court explained that if "the sanctions that presently attach to [the underlying criminal act] do not provide sufficient deterrence," then "perhaps those sanctions should be made more severe," but "it would be quite remarkable to hold" that an individual can constitutionally can be punished merely for disseminating information because the government failed to "deter conduct by a non-law-abiding third party."

This may seem a disorderly situation, but the Court has come to a sound solution. If we grant the government too much power to punish those who disseminate information, then we risk too great a sacrifice of public deliberation; if we grant the government too little power to control confidentiality "at the source," then we risk too great a sacrifice of secrecy.

The solution is thus to reconcile the irreconcilable values of secrecy and accountability by guaranteeing both a strong authority of the government to prohibit leaks and an expansive right of others to disseminate information to the public.

The bottom line is this: The proposed SHIELD Act is plainly unconstitutional. At the very least, it must limit its prohibition to those circumstances in which the individual who publicly disseminates classified information knew that the dissemination would create a clear and present danger of grave harm to our nation or its people.

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Revenge of the Real Economy

SUBHEAD:The markets are completely distorted, both by purchaser preference and risk - but also blatant manipulation.

By Steve Ludlum on 3 January 2011 in Economic Undertow -
(http://economic-undertow.blogspot.com/2011/01/revenge-of-real-economy.html)


Image above: Detail of "The Tornado Man" by Mark Bryan, 2004. From (http://www.artofmarkbryan.com/the%20tornado%20man.html).

Happy New Year everyone!

There is a lot of talk about inflation since energy costs have risen dramatically since early last summer, taking along prices for food and other goods. Whatever is for sale includes petroleum either in the manufacture, processing, packaging and transport. Basically all goods are forms of petroleum, all services require petroleum to enable them.

Rising prices of goods in and of themselves are not indicative of inflation which is a change in the value relationship between money and the business that money leverages. Valuable business means less valuable money: when money is given a 'negative' value by trade in the markets that is inflation. Business lends into existence what funds it needs to insure success. More money in circulation and more credit means a greater money supply and an equivalent decline in unit purchasing power. It also means an equivalent increase in debt. Both of these are benign which is what Fed Chairman Bernanke acknowledges when he proclaims his desire for a 'modest' 2% rate of inflation.

Only business expansion creates more credit/money in this way along with the benign inflation. Attempting to add more funds into bank reserves cannot increase business activity, neither can pitching horseshoes. Only the possibility of returns on time, skill and hard work can increase business activity. Because or in spite of Bernanke's efforts, the returns on increased reserves and added debt have vanished. High input prices make fuel- using enterprises unacceptably risky. This being so, what remains is finance and other Ponzi forms of outright gambling/speculation.

Finance as a consequence has found itself in grave difficulty. Finance cannot create value so it is an absolute dependency upon the real economy which is relied upon to produce useful, valuable goods and services. The productive economy fell alongside finance. Ironically, finance was rescued. What story can this tell other than to acknowledge that the real economy cannot produce any more and saving it is useless.

Too bad the Establishment cannot imagine a 'Plan B' economy that isn't machine/fuel dependent.

Sovereign bailouts of finance allocate resources away from the returns from work in exactly the same manner as do increasing fuel prices. The analog is government- sponsored 'War on Work' very much like the failed but destructive Wars on Drugs and Terror.

At some point debt increases to a point where it cannot be serviced by business cash flow. Debt then must either be repaid or liquidated. This process is integral to the business cycle. Instead of restructuring, the Establishment has been making an all-out effort to hold-harmless lenders while refusing to allow credit from being wiped out.

It is doing this by replacing questionable private credit with the public version. Doing so does two things. One is to degrade sovereign credit is the one becomes the proxy of the other. Swapping bad private loans for 'better' public versions strip mines the sovereigns' creditworthiness which effects their ability to borrow cheaply.

Not only is the endeavor futile, the effort cannot create the desired (hyper)inflation: credit destruction is irresistible. Even when the sovereign can keep up with credit destruction for a short period it commits itself to doing so endlessly. At some point the sovereign runs out of resources, its creditworthiness is dissolved. Debt becomes too great for the 'virtual cash flow' or monetization efforts of the central banks to service adequately. The failed Establishment becomes irrelevant and useless. Debt destruction commences as before until debts fall to a level that is serviceable by the new (and far lower) cash flows of those businesses which remain. The cycle of money/credit expansion begins again.

Inflation is not to be confused with hyperinflation, which is the purposeful expansion of the supply of money and credit into circulation by banking authorities. This effect is taking place right now in China where the authorities are bent on stealing what value remains to the country's bank depositors and working classes.

In both inflation (and the hyper version) price increases are accompanied by an increase in demand or in wages and worker earnings. Analysts in the US suggest many important goods such as food, medical care, education, staples and fuel are becoming more costly. They ignore declining wages and house prices. Wages enable workers to pay the high prices. Without wage increases or employment it is hard to see how any company raising prices will be able to stay in business.

This was the end of the real estate bubble; pundits said, "there are more people all the time and they aren't making any more land!"

"They aren't making any more people with money!" This has been the shortage since oil prices went barometric in 2004: nobody is making any more people with money. People cannot earn, they cannot find a place where such earning is possible It costs too much to pay workers and also pay for more expensive inputs at the same time. This is the point the 'high prices' people miss. High prices of primary goods are not inflationary. The allocation effect of the high prices is highly deflationary.

High prices force choices between one good at the expense of another. A company will buy fuel to transport imports from China rather than paying higher wages to local workers. Consequently, local demand erodes. Exporting jobs also exports customers. At some point the funds available to purchase goods vanishes and all the businesses fail. This is the dynamic of the early 1930's. Even low prices are to the unemployed and impoverished unaffordably high. High real prices -- either for goods or labor -- are simply a form of business suicide.

Right now petro prices are going bananas! How long before the rising prices gut the real economy? Will this effect the finance economy at all?


Image above: The weekly Brent Crude chart by TFC Charts. From (http://tfc-charts.w2d.com/chart/BC/W).

Notice that the open interest currently is much less than during the 2008- 09 period of the Great Oil Price Spike. The institutional long index speculators are so far out of the oil markets. It is likely that China and other large customers are buying crude on the spot markets and avoiding futures altogether. The futures markets follow the spot markets since those 'paper' markets must discount risk.

The same thing is taking place in the precious metals markets. A premium is paid to take the good rather than wait so the future price is discounted as a consequence. This is self-reinforcing. Demand for either physical crude or metals is intense. At the same time it is very hard to obtain physical by purchasing the forward contracts and standing for delivery.

Rising prices create an incentive to hoard. Commodities are held off markets which creates uncertainty. The markets are becoming untrustworthy as a consequence. This in turn puts more purchasers into the spot markets driving the price higher. This is the reverse of what happened in the fall of '07 and the spring of '08 where funds were piling into futures contracts some eight years out. Longs are biting the bullet and paying the spot premium knowing that the 'cheaper' futures contracts provide less of a guarantee of obtaining delivery.

How the exchanges expect to deal with this situation is hard to say but at some point they will suspend delivery altogether. The markets are completely distorted, both by purchaser preference and risk - but also blatant manipulation. Only incompetents insist that the markets reflect a top- line improvement in the real economy.

The prices of commodities will rocket upward along with prices for stocks and many currencies. This is all part of the Planet Bernanke strategy to devalue the dollar and make the US economy 'competitive' in a more or less traditional, Keynesian sort of way. I acknowledge Mr Bernanke's brilliance but his efforts are self- defeating.

Americans are saturated with debt. Customers are unwilling or unable to borrow any more. Only the government is borrowing while standing in the place of private borrowers. Since the government cannot create wealth or value, it can only recycle funds that already exist and shift them from one place or custody to another. Fiscal policy is a shell game. It only works if people suspend disbelief. Traders are cynically doing so on this day but for how much longer?

Being debt saturated means large 'spending' produces diminished or negative returns. Trillion$ have been borrowed and spent to what end? To support + 16% unemployment and a piddling 2% increase in US GDP. Pumping in more trillion$ will likely to have even less effect.

As for creating hyperinflation in the US, this is practically impossible. The idea is to repay lenders with funds that are worth much less than the original amount borrowed.

Most US debt is of short duration or indexed to inflation. Short duration debt must be refinanced repeatedly as it matures. In the face of inflation lenders command higher yields which defeats the hyperinflation tactic. Indexing of yields has the same effect: the loan has a mechanism that adjusts the rate of interest to reflect higher inflation. In debt markets with short durations or 'interest indexes' there is no shortcut to keeping yields from adjusting themselves to protect lenders' capital.

At some point the rising yields become too expensive for the borrower to support: debt deflation follows.

Currency devaluation cannot work when Americans consume more fuel per capita than all the other countries' citizens. Any dollar gains in output resulting from currency devaluation are more than canceled out by increases in the fuel price 'tax' paid to oil companies and OPEC. Instead of increasing competitiveness, the price rise puts the oil-soaked US economy in a bear trap.

$95 crude is a real problem hitman for an economy that is structured around $20 crude. To pay the fuel bill other goods and services are stiffed. Since 2004 this stiffing process has wreaked havoc on the US and Eurozone economies, this ruin has trickled up toward finance. Since 2004 the $30 fuel-dependent cohort has been eliminated as prices have risen, as prices rise further the businesses that can afford moderately high crude prices are pushed to the edge of the cost abyss.

Fuel price rises are squeezing a balloon: clench on one end and the balloon expands elsewhere. High fuel prices make servicing municipalities more expensive. Unlike private companies, states, counties and 'metro areas' cannot ship fire-fighting or police jobs to low-wage countries like Vietnam. High wages, high benefits and leaping fuel/goods' costs are becoming ruinous to the municipalities. Just as these were to US businesses before China bailed them out and took all those unaffordable US manufacturing jobs.

Meanwhile, the urge to buy and drive more cars becomes the epitaph for our expiring gestalt. Our policy makers do not have the inner resources to confront the failure of our personal transportation 'choices'. This looks to be a fatal error as auto and other industrial uses of petroleum drive prices higher, bankrupt more individuals and businesses and make a general oil-driven economic crash more likely.

Somehow high oil prices and high energy company profits are painted in the business media as an unadulterated good thing: says Bloomberg:

Stocks Rally, Treasuries Tumble on Economic Outlook

Stephen Kirkland and Nikolaj Gammeltoft

Stocks rallied, sending the Standard & Poor’s 500 Index to its best gain in a month, and oil rose as growth in U.S. and European manufacturing bolstered speculation the economic recovery will strengthen. Treasuries slid.

The S&P 500 increased 1.4 percent to 1,274.62 at 11:22 a.m. in New York and the Stoxx Europe 600 Index gained 0.7 percent for its largest advance since Dec. 21. Oil rose to a 27-month high, copper reached a record near $4.50 a pound and silver topped $31 an ounce. The 10-year Treasury note fell, sending the yield seven basis points higher. Markets in London, Shanghai, Tokyo and Sydney were closed for holidays.

All 10 industry groups in the S&P 500 advanced today after U.S. manufacturing expanded at the fastest pace in seven months in December, while data later this week is forecast to indicate growth in services and employment. European manufacturing expanded more than initially estimated in December, London-based Markit Economics said.

“It’s a happy start for the market to the new year,” said Tom Mangan, who helps oversee $2.4 billion as a money manager at James Investment Research Inc. in Xenia, Ohio. “The stronger manufacturing numbers complete the pattern from the end of last year with strong economic data, reflecting greater confidence in the economy.

Obviously the finance economy is doing just fine, to hell with the real economy. So far, the Federal Reserve has been successful inflating assets with moral hazard and the dollar carry trade. How long can this game be kept up?

The money managers must know that higher oil prices will soon effect demand. This is basic business, 101.

Meanwhile, squeezing the balloon causes distortion in the housing markets which are beginning to resume their long decline.

Real estate during the bubble years was bizarre in many ways. As 'homebuilders' excreted millions more ugly boxes at ever higher prices the demand became insatiable. Were houses 'Giffen goods'? These are items that are more sought after even as the prices rise, defying the laws of supply and demand. How about precious metals, now?

Is crude oil a Giffen good? At what price level do the high-priced versions become ordinary good? Seems that a lot of what is taking place in the greater world orbits around opportunity costs and time factors, both of which are fuel/machine doppelgangers. The outcome is a crisis of valuation: what is anything worth if there isn't enough fuel to run things?

Conventional analysis obscures the real picture. There are few words about the energy/infrastructure imbalances that 'back' our currencies/debt loads and stands as collateral for everything including our 'money'. Our consumption infrastructure which includes housing, shopping, transport and support and 'moderne' agriculture is unprofitable with higher priced fuels. No profits = no economy.

Inputs are too pricey to allow profits. This is our crisis in seven words.

We cling to the fuels and jettison everything else: jobs, benefits, senior care, police and other civic services, rational government, and much of our national character. This process is taking place in other countries as well ...

What is 'preserved' is the cartoon version of modernity with 'just in time' convenience at a cost that strip mines everything else.

It would be nice to see this aspect of our 'policy' appear in the public discussion along side banker care and debt remediation. In fact, economic circumstances will deteriorate until stringent energy conservation becomes the center of the public policy.

It's that or conservation will be imposed by events - which is what is taking place right now. We must start taking steps to ready ourselves for the new world that is coming for us whether we are prepared for it or not.

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Stone Age Sailors on Crete

SUBHEAD: Discovery of Cretan tools points to sea travel 130,000 years ago.

By AP Staff on 3 January 2011 for Huffington Post -
(http://www.huffingtonpost.com/2011/01/03/cretan-tools-130000-years-sea-travel_n_803626.html)


Image above: The oldest, largest, and most elaborate prehistoric vessel known found in a pit at the foot of the pyramid at Cheops, Egypt. From (http://indigenousboats.blogspot.com/search/label/Egypt).

Archaeologists on the island of Crete have discovered what may be evidence of one of the world's first sea voyages by human ancestors, the Greek Culture Ministry said Monday. A ministry statement said experts from Greece and the U.S. have found rough axes and other tools thought to be between 130,000 and 700,000 years old close to shelters on the island's south coast.

Crete has been separated from the mainland for about five million years, so whoever made the tools must have traveled there by sea (a distance of at least 40 miles). That would upset the current view that human ancestors migrated to Europe from Africa by land alone.

"The results of the survey not only provide evidence of sea voyages in the Mediterranean tens of thousands of years earlier than we were aware of so far, but also change our understanding of early hominids' cognitive abilities," the ministry statement said.

The previous earliest evidence of open-sea travel in Greece dates back 11,000 years (worldwide, about 60,000 years – although considerably earlier dates have been proposed).

The tools were found during a survey of caves and rock shelters near the village of Plakias by archaeologists from the American School of Classical Studies at Athens and the Culture Ministry.

Such rough stone implements are associated with Heidelberg Man and Homo Erectus, extinct precursors of the modern human race, which evolved from Africa about 200,000 years ago.

"Up to now we had no proof of Early Stone Age presence on Crete," said senior ministry archaeologist Maria Vlazaki, who was not involved in the survey. She said it was unclear where the hominids had sailed from, or whether the settlements were permanent.

"They may have come from Africa or from the east," she said. "Future study should help."

The team of archaeologists has applied for permission to conduct a more thorough excavation of the area, which Greek authorities are expected to approve later this year.

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Mediterranean Monk Seal Secret

SUBHEAD: Biologists find endangered seals secret Greek island.

By Stephen Messenger on 3 January 2011 for TreeHugger -
(http://www.treehugger.com/files/2011/01/biologists-find-endangered-seals-secret-island-getaway.php)


Image above: Mediterranean monk seals. From original article.

It's never been easy being an endangered species -- particularly nowadays, what with all the people encroaching upon their native hangouts or clamoring for a rare peek at them. But despite all that, one group of highly endangered monk seals has managed to find some much needed solace on the beaches a remote island in Greece, far from the prying eyes of lookers-on. Biologists, however, have recently uncovered the seals' secret refuge -- though mum's the word on where exactly they're hiding.

While some seals are quite cavalier when it comes to hanging out where humans live, Mediterranean monk seals are understandably shy. As one of the most endangered marine species on the planet, only about 600 individuals are thought to still be in existence -- and they're doing their best to remain undisturbed.

Biologists say that human activity has deterred most of the endangered monk seals from their natural behavior of resting on beaches around the Mediterranean, driving them to settle difficult to access coastal caves where they can raise their young in peace. But, a recently discovered colony of seals on one particular Greek island has researchers optimistic that some sense of normality may exist yet for the threatened species.

Though for any animal lover who might relish a peek at the endangered animals in their secret refuge, biologists are disappointingly tight-lipped as to where it can be found. "It is human disturbance that has caused the species to retreat to inaccessible caves," said Alexandros Karamanlidis, who studies Monk seals. "So this place is incredibly important - the seals feel so secure that they go out on to open beaches."

It seems, however, that a possible salvation for the species may lie on this undisclosed island. Scientists say that breeding success has declined for the monk seals since they've been forced away from their natural breeding grounds into spots where their offspring are more likely to perish due to violent weather.

Just a little peace and quite, it seems, goes a long way when it comes to raising a family of seal pups. A report from the BBC explains:

The number of seal pups born annually in the newly discovered colony on this tiny island is amongst the highest recorded anywhere in the Mediterranean Sea.

The team has placed cameras on the island to study the seals remotely.

The area's popularity with tourists has gradually driven the animals away from other beaches, and the scientists hope to stop the same thing happening on this island.

Like most places in the world, the seals' island hideaway is threatened by the same pleasure-seeking humans habits that drove so many other member of the endangered species away from their usual habitat -- but biologists are working so that the same thing won't happen to this particular seal beach-goers. "The seals only survive in Greece because we have these isolated islands that people do not have access to," said Dr Karamanlidis. "So we're trying to make this a place where [the animals] feel secure."

In other words, their lips are sealed.

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