America After the Quiet Coup

March 11, 2010 by · Leave a Comment 

By Edward L. Palmer, Robert N. Rhodes and Alice J. Palmer

“There has been a quiet coup in the US in which a financial oligarchy has gained hegemony over the government structure.” That seizure of power has resulted in devastation for Black America, where “48% of the children of middle class Black Americans border on poverty.” Among the general public, “70% of last year’s college graduates in the US did not receive job offers.”

“A financial oligarchy has gained hegemony over the government structure.”

America is on a path toward a savage capitalism that is already decimating the middle class and working people and swelling the ranks of the poor. Adam Smith never intended this.

The U.S. government has spent more than one trillion dollars of taxpayer money to resuscitate the financial services economy and restore the status quo while unemployment has grown by millions since January 2009, and all without developing the real economy: production, sustainable development, infrastructure, and social networks.

Unlike Germany, for example, where, faced with a similar economic downturn, Chancellor Angela Merkel, a conservative, chose to increase public spending on production, infrastructure and human capital. Or, as in Sweden, which took measures to reverse unemployment and the contracting gross domestic product by isolating bad debts, stabilizing their currency, and allowing some banks to fail.

Or, for that matter, the win-win strategy the Chinese favor, which pursues their national economic interests without seeming to threaten the national interests of other countries.

Americans should ask themselves the fundamental questions that Bob Herbert is asking over and over in his New York Times columns: How do you put together a consumer economy that works when the consumers are out of work, and when poverty, particularly among Black Americans, is alarmingly high.

“At least 30% of America’s children are poor; tent cities are now housing displaced and desperate families.”

The statistics about Main Street are distressing. At least 30% of America’s children are poor; tent cities are now housing displaced and desperate families. According to a recent Harper’s magazine monthly index, 70% of last year’s college graduates in the US did not receive job offers. Some 16% of the daughters and sons of White Americans are not as financially stable as their parents. Most disturbing is that 48% of the children of middle class Black Americans border on poverty as they earn little more than $23,000 a year. Their parents, whose incomes average $55,000, came of age in the 1960’s.

For decades, from the late 1940’s through the end of the 1980’s, Black men expected to find work in the plants that dominated industrial centers such as Detroit, Chicago, and Pittsburgh. Steady work, no matter how initially back-breaking and low-level, afforded Black families adequate incomes to purchase homes and send their children to college from which a solid, often politically active, Black middle class emerged.

There is a “silent Black depression” in the United States, according to a 2008 report issued by the Institute of Policy Studies, in which 29.4% of Black households have zero or negative net worth as of 2004 compared with 15% of Whites; and Black males aged 16-19 have a 32.8% unemployment rate. People of color, in general, are more likely to be poor in the United States; yet, poverty is rarely discussed as an element of the country’s economic crisis.

“29.4% of Black households have zero or negative net worth.”

To gauge the consequences to America’s eroding consumer and family income economies we must look beyond spurious US unemployment and employment figures that do not adequately tell us how many new jobs are part time and how many workers are discouraged or under-utilized. Most European countries count the number of adults who are employed, which is a more realistic measure of consumer and family-economic well-being.

What does happen to a dream deferred? Job loss can also mean pension loss – a loss of family sustainability – which could cause a social crisis for decades to come, warns the Organization for Economic Co-operation and Development in its yearly report. During the vaunted 1990’s, employers, looking for savings to their companies, encouraged working Americans to choose market-driven defined contribution pension packages that hinted at easy-living wealth at retirement instead of the traditional defined benefit pensions that assured steady retirement incomes. In 2008, private pension funds lost more than 25% in returns; so thousands of retirees cannot make ends meet, and thousands of younger workers must start anew to build their nest eggs.

Yet corporate chief executives and their circle earn an almost unbelievable 400 times what the average employee earns; and, as we have seen recently, garner enormous bonuses in spite of failing companies.

If we say in this country that we believe in family values, then we should value the family with adequate and equitable work, education, pensions and health care policies that matter to their well-being.

The US is not just experiencing an economic crisis, this is a crisis of our social being; and there are no quick fixes. Simon Johnson, a former Chief Economist for the International Monetary Fund, pointed out that there has been a quiet coup in the US in which a financial oligarchy has gained hegemony over the government structure.

“In 2008, private pension funds lost more than 25% in returns.”

During the 19th century through c1929, it was common to experience economic panics roughly every 20 years, e.g., in 1819, 1837, and 1873. Since World War II, we have not had feast or famine years. Why? Perhaps because Keynesian principles were in practice that fostered the judicious use of government interventions to fine tune the economy to avoid crises that imperiled people and businesses alike.

At the start of the 1980’s, the size of the financial service sector, i.e., traditional banks, was 4% of gross domestic product; and the number of financial corporations on the stock exchange was 0%. It was against the law for the financial service sector to be listed on the stock exchange. The Glass-Steagall Banking Act of 1933, passed after the Great Depression, which prevented banks from underwriting stocks and bonds for companies, was annulled in practice during the 1980’s, and the practice became law in 1999. The financial sector, especially banks, became one-stop centers for selling insurance, questionable mortgages and other risky undertakings to an uninformed public.

What is the significance of this change? A recent Bank of International Settlement report from Switzerland shows that world GDP (the real economy of the world’s people) is about a tenth the size of the financial services sector alone, and the gap continues to widen.

Many respected economists are alarmed by such economic indicators, the direction the US is taking, and the toll on people’s standard of living. Joseph Stieglitz calls the present-day economy ersatz capitalism; Paul Krugman calls it crony capitalism. John Monks, Secretary General of the European Confederation of Trade Unions, calls the economy casino capitalism. By any name, ponzi schemes are proliferating.

“World GDP (the real economy of the world’s people) is about a tenth the size of the financial services sector alone.”

Of course America’s financial sector should be kept viable; but in the long run, its salvation depends upon the ability of Americans to participate in and benefit from the economy. Real capital uses money to buy raw materials and machinery, hire workers, and produce products that can be sold for more than the cost of their production. Moreover, investment in research and development should be ongoing as new technologies and new ideas lead to innovations and new productivity. Real capital does not hollow out the lives of the average American.

It is in the interest of the United States, its people, and its place in the world to promote a sustainable development model, which is comprised of a labor policy, deliverable industrial and infrastructural advancement strategies, and social policies that ensure human well-being in health, education, and the post-work and sunset years. Since these policies and practices are not self-generating, it is necessary for common-sense minded people to undertake decisive, principled, actions to forge the path to our well-being.

Edward L. Palmer is Senior Research Associate, retired, Institute of Government and Public Affairs, University of Illinois, palmeredward@ymail.com; Robert N. Rhodes is Political Science Professor, retired, University of Ohio; Alice J. Palmer, PhD, is a former Illinois State Senator and current Associate Research Professor, University of Illinois aapalmur@yahoo.com.

12-11

Chalk

December 24, 2009 by · Leave a Comment 

adil-tufail

Soft, fine-grained, easily pulverized, white-to-grayish variety of limestone, composed of the shells of minute marine organisms. The purest varieties contain up to 99% calcium carbonate in the form of the mineral calcite. Extensive deposits occur in western Europe south of Sweden and in England, notably in the chalk cliffs of Dover along the English Channel. Other extensive deposits occur in the U.S. from South Dakota to Texas and eastward to Alabama. Chalk is used for making lime and portland cement and as a soil additive. Finely ground and purified chalk is known as whiting and is used as a filler, extender, or pigment in a wide variety of materials, including ceramics, putty, cosmetics, crayons, plastics, rubber, paper, paints, and linoleum. The chalk commonly used in classrooms is a manufactured substance rather than natural chalk.

Chalk used in school classrooms comes in slender sticks approximately .35 of an inch (nine millimeters) in diameter and 3.15 inches (80 millimeters) long. Lessons are often presented to entire classes on chalk-boards (or blackboards, as they were originally called) using sticks of chalk because this method has proven cheap and easy.

As found in nature, chalk has been used for drawing since prehistoric times, when, according to archaeologists, it helped to create some of the earliest cave drawings. Later, artists of different countries and styles used chalk mainly for sketches, and some such drawings, protected with shellac or a similar substance, have survived. Chalk was first formed into sticks for the convenience of artists. The method was to grind natural chalk to a fine powder, then add water, clay as a binder, and various dry colors. The resultant putty was then rolled into cylinders and dried. Although impurities produce natural chalk in many colors, when artists made their own chalk they usually added pigments to render these colors more vivid. Carbon, for example, was used to enhance black, and ferric oxide (Fe2O3) created a more vivid red.

11-53

Swiss Politician Apologizes For Calling For Ban On Muslim And Jewish Cemeteries

December 10, 2009 by · Leave a Comment 

By Rachel Slajda

A Swiss politician has apologized today for calling for a ban on Jewish and Muslim cemeteries two days after the country voted to outlaw minarets on mosques.

“I am sorry. I didn’t mean it like that,” said Christopher Darbellay, president of the Christian Democratic People’s Party of Switzerland, a centrist party and the smallest member of the government coalition.

“It was about the principle that we all belong to the same Swiss society,” he added.

In his call for the ban, Darbellay said, “I don’t imagine that in this country, every religion or sect can have a separate cemetery in every town. It wouldn’t be manageable to make these exceptions. … Principle requires that one does not distinguish on the basis of origin or religion.”

Darbellay has also called for a ban on burkas or veils worn by some Muslim women.

Switzerland made international headlines Sunday when residents voted to add a line to their constitution banning the construction of minarets, or prayer towers, on mosques. The initiative, backed by the right-wing Swiss People’s Party, passed by more than 57 percent of voters.

“The minute you have minarets in Europe it means Islam will have taken over,” said one SPP politician.

The Swiss have a long history of trying to keep their culture free from the influence of both Muslim and Jewish immigrants.

In 1893, Switzerland banned the practice of shechitah, the kosher way of slaughtering animals, citing cruelty because the animals are not stunned first. Although the government opposed the measure, a group called the Anti-Semite Committee gathered more than 83,000 signatures to bring it to a referendum.

Even now, Jews and Muslims must import their kosher and halal meat from neighboring countries. In recent years, some groups have gone farther, trying to ban even its import. In 2003, for example, the Swiss Animal Protection group began a campaign to ban its import, but failed.

Six other European countries join Switzerland in banning the practice: Sweden, Norway, Finland, Latvia, Estonia and Lithuania. The European Union recognized such slaughter earlier this year and declared kosher and halal meat can be sold in every country, but did not go so far as to legalize the slaughtering practice throughout the EU.

Much of the xenophobia in Switzerland seems rooted in the belief that immigrants will not assimilliate into Swiss culture. In 2006, the citizenship application of a Turkish woman and religious teacher was rejected because she didn’t want to integrate into society.

Muslims are one of the fastest-growing groups in Europe, sparking culture clashes throughout the continent. In France, for example, President Nicolas Sarkozy wants to ban the burka on the grounds that such veils oppress women.

11-51

Iraqi Boy Solves 300-year Old Math Puzzle

June 4, 2009 by · Leave a Comment 

Bernoulli_Jacob
Jacob Bernouilli

STOCKHOLM (AFP) – A 16-year-old Iraqi immigrant living in Sweden has cracked a math puzzle that has stumped experts for more than 300 years, Swedish media reported on Thursday.

In just four months, Mohamed Altoumaimi has found a formula to explain and simplify the so-called Bernoulli numbers, a sequence of calculations named after the 17th century Swiss mathematician Jacob Bernoulli, the Dagens Nyheter daily said.

Altoumaimi, who came to Sweden six years ago, said teachers at his high school in Falun, central Sweden were not convinced about his work at first.

“When I first showed it to my teachers, none of them thought the formula I had written down really worked,” Altoumaimi told the Falu Kuriren newspaper.

He then got in touch with professors at Uppsala University, one of Sweden’s top institutions, to ask them to check his work.

After going through his notebooks, the professors found his work was indeed correct and offered him a place in Uppsala.

But for now, Altoumaimi is focusing on his school studies and plans to take summer classes in advanced mathematics and physics this year.

“I wanted to be a researcher in physics or mathematics; I really like those subjects. But I have to improve in English and social sciences,” he told the Falu Kuriren.

11-24