Wednesday, April 16, 2008

Condi's Gotta Go!

Secretary of State Condoleezza Rice chaired repeated White House meetings approving specific torture techniques before they were used -- then lied about it to Congress.

And this is the person many neocons are touting for Veep? Well, I guess it makes sense... she'd be carrying on the lamentable legacy of Cheney, wouldn't she?

Watch the video and add your name to a list asking that Rice resign!



I am sorry to hijack this thread csm, but I wanted to share these items with all. Lately I have been reading stuff which has tried my optimistic nature. The person who came up with "ignorance is bliss" was on to something.

The first item started with an interview on my local NPR station based on the accompanying article in our local rag, The Arizona Republic. The second was from CATO. I apologize in advance for the length of this post, but here we go...

1. End of the world as we know it

You might feel fine, but high oil cost, scarcity mean American Empire is about to come crashing down

Guy R. McPherson
University of Arizona professor
Apr. 6, 2008

Peak oil spells the end of civilization. And, if it's not already too late, perhaps it will prevent the extinction of our species.

M. King Hubbert, a petroleum geologist employed by Shell Oil Co., described peak oil in 1956. Production of crude oil, like the production of many non-renewable resources, follows a bell-shaped curve. The top of the curve is termed "peak oil," or "Hubbert's peak," and it represents the halfway point for production.

The bell-shaped curve applies at all levels, from field to country to planet. After discovery, production ramps up relatively quickly. But when the light, sweet crude on top of the field runs out, increased energy and expense are required to extract the underlying heavy, sour crude. At some point, the energy required to extract a barrel of oil exceeds the energy contained in barrel of oil, so the pumps shut down.

Most of the world's oil pumps are about to shut down.

We have sufficient supply to keep the world running for 30 years or so, at the current level of demand. But that's irrelevant because the days of inexpensive oil are behind us. And the American Empire absolutely demands cheap oil. Never mind the 3,000-mile Caesar salad to which we've become accustomed. Cheap oil forms the basis for the 12,000-mile supply chain underlying the "just-in-time" delivery of plastic toys from China.

There goes next year's iPod.

In 1956, Hubbert predicted the continental United States would peak in 1970. He was correct, and the 1970s gave us a small, temporary taste of the sociopolitical and economic consequences of expensive oil.

We passed the world oil peak in 2005, and we've been easing down the other side by acquiring oil at the point of a gun - actually, guns are the smallest of the many weapons we're using - paying more for oil and destroying one culture after another as the high price of crude oil forces supply disruptions and power outages in Third World countries.

The world peaked at 74.3 million barrels per day in May 2005. The two-year decline to 73.2 million barrels per day produced a doubling of the price of crude. Later this year, we fall off the oil-supply cliff, with global supply plummeting below 70 million barrels/day. Oil at merely $100 per barrel will seem like the good old days.

Within a decade, we'll be staring down the barrel of a crisis: Oil at $400 per barrel brings down the American Empire, the project of globalization and water coming through the taps. Never mind happy motoring through the never-ending suburbs in the Valley of the Sun. In a decade, unemployment will be approaching 100 percent, inflation will be running at 1,000 percent and central heating will be a pipe dream.

In short, this country will be well on its way to the post-industrial Stone Age.

After all, no alternative energy sources scale up to the level of a few million people, much less the 6.5 billion who currently occupy Earth. Oil is necessary to extract and deliver coal and natural gas. Oil is needed to produce solar panels and wind turbines, and to maintain the electrical grid.

Ninety percent of the oil consumed in this country is burned by airplanes, ships, trains and automobiles. You can kiss goodbye groceries at the local big-box grocery store: Our entire system of food production and delivery depends on cheap oil.

If you're alive in a decade, it will be because you've figured out how to forage locally.

The death and suffering will be unimaginable. We have come to depend on cheap oil for the delivery of food, water, shelter and medicine. Most of us are incapable of supplying these four key elements of personal survival, so trouble lies ahead when we are forced to develop means of acquiring them that don't involve a quick trip to Wal-Mart.

On the other hand, the forthcoming cessation of economic growth is truly good news for the world's species and cultures. In addition, the abrupt halt of fossil-fuel consumption may slow the warming of our planetary home, thereby preventing our extinction at our own hand.

Our individual survival, and our common future, depends on our ability to quickly make other arrangements. We can view this as a personal challenge, or we can take the Hemingway out. The choice is ours.

For individuals interested in making other arrangements, it's time to start acquiring myriad requisite skills. It is far too late to save civilization for 300 million Americans, much less the rest of the planet's citizens, but we can take joy in a purpose-filled, intimate life.

It's time to push away from the shore, to let the winds of change catch the sails of our leaky boat.

It's time to trust in ourselves, our neighbors and the Earth that sustains us all.

Painful though it might be, it's time to abandon the cruise ship of empire in exchange for a lifeboat.

Guy R. McPherson is a professor of conservation biology at the University of Arizona.

Now I believe there is a smidge of Chicken Little to this, but it is thought provoking nonetheless. Now for this...

2. The Imperial Fed: Does It Have Enough Power?

by Thomas Humphrey and Richard H. Timberlake Jr.

The Federal Reserve System (the Fed) is the steward of the monetary system. Originally, Congress limited its mission to supplement the operations of the gold standard by lending to needy but solvent banks that were suffering a liquidity problem. In fulfilling this function, it was labeled a Lender of Last Resort (LLR). Through the decades since 1913, however, Congress has endowed it with all the additional powers to do by positive human control what the gold standard did spontaneously on the basis of well-understood rules. It is not only a LLR but also a Monopoly Money Supplier (MMS).

In today's world, the Fed has virtually complete control over the quantity (or stock) of money that appears in the U.S. monetary system. Much of the 'rest of the world' voluntarily uses these Fed dollars in preference to their own or other moneys. Whatever the Fed does as domestic monetary policy, therefore, resounds throughout most of the trading world.

Much of the time the Fed's supreme money-creating power is overshadowed by the fact that when the Federal Open Market Committee (FOMC) buys or sells government securities in the open market, changes in short-term interest rates accompany its policies. However, the interest rate response is an ephemeral artifact of the money-creating process, and does not reflect the Fed's fundamental function—that is, control of the quantity of money. Short-term changes of the Federal Funds target rate have simply become code words for what the FOMC is doing to the stock of money: "Lowering rates" means they are aiming to make more money available, and "raising rates" means they are trying to tighten up the quantity of money.

While the creation of money—the Midas Touch—is awesome, it is not itself productive of real goods and services. The Fed cannot make a ball-point pen, nor scrub anyone's kitchen floor. However, by controlling the quantity of money, it can guarantee stability in the value of the money unit, and thereby allow the multitude of markets that make up the rest of economic society work to their best advantage.

The new Fed policy, headed by Ben Bernanke, is to provide assistance to specific firms, such as Bear Stearns, in the investment banking industry. The argument is that Bear Stearns is the nucleus of a vast network of credit interrelationships that are vital to financial markets, whose failure would bring chaos to the entire financial market system. It is a continuation of the "too big to fail" notion used in the Continental Illinois bail-out two decades ago.

This contention is very much unproven. It surely was not the primary cause of the Great Contraction of 1929-1933. Today, if Bear Stearns were to go into receivership, its creditors, in cooperation with other market players, would recapitalize it, scaling down the value of its assets until they were in equilibrium with other market values. The firm's real resources would still be in place; they simply would be reorganized and revalued.

In the Bear Stearns case, the Fed provided some of its own stock of already monetized Treasury securities to an insolvent and bankrupt firm taking the firm's now-junk bonds in exchange. In so doing, it conducted a rescue operation of an individual private enterprise rather than providing liquidity to markets in general. Thus far, the Fed has simply exchanged securities dollar-for-dollar with Bear Stearns. It has not yet monetized any of the inferior Bear Stearns securities it is holding.

Under the current institutional framework, the Fed constantly buys U.S. government securities at market prices to provide gradual increases in the stock of money. In plain words, it monetizes outstanding government securities—or anything else it buys—simply by paying for them with checks against its assets. Its new assets that cover the checks are the securities (or junk bonds) it has just purchased! By means of such open-market operations, it creates $25-plus billion per year, or about $50 million per week. This revenue is a seigniorage tax that is credited to the U.S. Treasury. Fed checks to pay for the securities are the monetary fetuses that gestate into living dollars of one kind or another.

This continuous provision of dollars to U.S. and world markets, if managed properly, prevents money itself—as Milton Friedman observed--from becoming a part of the problem. Financial and all other markets then self-correct random disequilibria that occur by directing the dollars to where it is most needed. Indeed, such adjustments have been and are taking place constantly and much more quickly than the Fed or any other agency could direct them.

Encouraging, or even allowing, the Fed to monetize private securities to offset a "crisis," opens the door to the most dreadful of possibilities—monetization of the federal government's vast unfunded liabilities that hang over the economy, an ongoing problem that must be treated in just a few years. That is: If the Fed can monetize Bear Stearns securities to prevent a "crisis," what is to prevent it from monetizing the U.S. Treasury's outstanding debt—as it is doing constantly on a small scale anyway–-when Social Security and Medicare costs overwhelm the federal budget? The Fed has always—ALWAYS—been subservient to the Treasury. So when some future Executive with his agreeable Congress must fund burgeoning Social Security payments, and pressures the Fed to keep interest rates "low" so that the Treasury can market new securities to pay Social Security benefits, what will a pliant FOMC reply if it has the precedent of Bear Stearns in 2008? Will it say, "No, Mr. President; we cannot buy any more securities right now. That would cause inflation, and violate our pledge to keep the dollar stable?" Or will the FOMC, many of whose members may have been appointed by the incumbent executive, dutifully increase its purchases of government securities thereby inflating money prices six to nine months later? Virtually no one would understand what was happening in the latter case; few laymen know how the monetary machinery works or that it works with a lag. But everyone, especially congressmen and media people, can see interest rates rising in the here and now. The hyperinflation that would result from such monetization procedures could rival the German Reichsbank inflation of 1923.

Current policy has encouraged the creation and viability of the Fed as a central bank. It is an institution of human design with one exclusive power: It controls the stock of money, and thereby the value of the dollar. It operates outside of any market influences. At the same time, however, markets of all shapes and sizes control the manufacture of goods, services, and capital. These markets work spontaneously under well-understood rules, but without human manipulation, to direct resources into their most economical channels. For the government to upset this stable arrangement by sanctioning its monetary agency to intervene in private securities markets is not only destabilizing, it also provides a dangerous precedent that may lead to all kinds of future monetary catastrophes. If Congress nevertheless thinks that private security markets need bailing out, it must acknowledge that it alone bears ultimate responsibility for putting the taxpayer at risk. Burdening the taxpayer is a fiscal, not a monetary, responsibility, one that this constitutional republic assigns to Congress, not to the Fed.

The federal government is just getting too powerful and producing precedents to such a degree our beloved Constitution cannot keep up. This is why I keep harping about getting back to our basics. It might just be too late.

These are the reasons I find all three candidates wanting. Maybe they feel the electorate is too stupid to understand what this country and even the world is up against(they may be right, too). But it is their responsibility to try to get us to understand. I have posted before that we cannot just up and leave Iraq no matter how utterly flawed the reasoning to go in in the first place. The Dems just go on saying(and in Clinton's case against military experts)we will up and leave. McCain is even worse. Without telling us the truth as to why we went in the first place(it should be of no use to defend the fucker in office now especially when he should be distancing himself from the Destructor in Chief)he wants to blindly keep with the same failed policy.

We need to stay there in some way to insure Iran does not go on an acquisition spree of other's oil assets, but all we hear from him is the same blathering about terrorism and our safety. I am only now hearing from the press the need to engage Iran and the fact a deal will have to be made with Iran over how Iraq will be administered in the future, but it ain't coming from the candidates. All I hear is troop levels and leaving. What I want to hear is truth and sense, but it isn't coming through.

Again, I apologize for the length, but I just had to get this off my chest.

coreydbarbarian said...

bawdy, (in my best slick willy voice)
i feel your pain.

on the oil thing, yeah, we're screwed. we could switch to hydrogen 2morrow, and stretch out the oil supply a few years longer, but that won't happen. they'll wait ten more years minimum.

looking on the bright side (-whistles-),
my bike gets almost 70 mpg. :)

now, i've got a couple videos on the fed 4 ya.
but 1st, i want 2 add my favorite buzzkill. (???)

what ever happened 2 david walker?
this is the last i heard from him (jan, 2008)

david was on 60 minutes in 2007.
here is a 2 minute summary.

now, here's 2 video's on the fed.
da fed, numero uno
da fed, numero duo

and just so you know it's not just us,
here's 4 minutes of george carlin.

coreydbarbarian said...

and you know what else??

i think condi's gotta go, too.


csm said...

Although I think there is quite a bit of Chicken Little in that McPherson piece, the main thesis is undoubtedly true and we (the world) need to move to alternate fuels immediately. A statesman (one of your favorite "needs", Bawdy) running ofr office would make this the centerpoint of his/her platform and pontificate on it daily.

When I see the lack of urgency it makes me glad I have no children...

coreydbarbarian said...
This comment has been removed by the author.
coreydbarbarian said...

try this again.

here is a great article from reason magazine.
so good, i had 2 share.
really long, but extremely insightful.



Sorry it took so long to get back to you. Great links, though it might have the tendency to make me mope more. Even Carlin couldn't lift my spirits.

I also read the article from Reason(a magazine I will try to get into my routine; I have been wanting to check it out for awhile) and it provoked a couple interesting thoughts.

1. I always thought of a group of people's psyche(like a country's)as a pendulum which would swing from one extreme way of thinking to another. This article got me to think there might be two, three or even four pendulums swinging at all times producing crosscurrents. I thought that was kinda interesting.

2. Could it just be coincidence that these "Awakenings" end in a war of some sort? Just a rhetorical question.

Ceroill said...

as to number 2, I doubt it.