The People Vs GDP

Gadfly
by Mort Malkin

The People Versus GDP


The economy of a country is supposed to measure the well being of the people. Well being is the sum of many factors: health, standard of living, happiness, work satisfaction, a clean environment, leisure time activities, a community with caring people, strength of civil liberties in society, peace… Love, too, if you’re lucky.

Why isn’t money included? Because nowadays money is an artificial construct. The federal reserve notes we call money don’t promise so many grams of gold or ounces of silver anymore. Not even pounds of small red potatoes. Yet worse is when Wall Street’s investment “banks” create innovative new “products”: collateralized debt obligations, bundles of consumer and commercial paper, credit defaults swaps, and other such Ponzi schemes. You almost certainly need a magnifying glass to read the fine print. What the words mean is another matter. When the best & brightest leading the Treasury Department tell us and our Congressional representatives “You may not understand it – but just trust us,” you know it’s time to ask how many off-shore subsidiaries (P.O. boxes) the bank maintains.

Yet, money is counted as the basis of our economy. The dollars exchanged for goods and services total out to gross domestic product (GDP). The practitioners of the dismal science (economics) tell us that a healthy economy grows at 3% or better each year (in terms of GDP). Today’s economic murkiness is told by Tim Geithner and Lawrence Summers who perpetuate the GDP myth as if it’s a law of the universe. Still, there are a number of things in society that have great value but don’t involve the transfer of money. Here’s a short list: parental child care, planting a garden (not a lawn, which is only a step up from Astroturf), doing a favor for a neighbor, volunteering at the library, membership in the PTA, gathering wild edibles for your dinner table, making yogurt, tree sitting an old growth tree so it won’t be cut but continue to absorb CO2 from the air, home meal preparation, mending clothes, barn raising in a rural community… All have value and contribute toward the wealth of a nation, but are not measured by GDP. Nor does GDP inform you of the distribution of (excuse the expression) money. If a nation is divided into two classes – the few very rich and the many very poor – GDP doesn’t measure the wealth of the people as a whole. Many republics of Central and South America, under instructions from the US and the IMF, used to maintain a two-level economy of wealthy land owners and landless peasants. Military leaders trained at the School of the Americas insured law & order. These nations were fine examples of peace and prosperity (for the corporations that dealt in native resources such as tin, copper, and bananas).

GDP not only leaves out valuable productive activity, it places a premium on economic activity stimulated by “regrettables” such as the Exxon oil spill, the Sichuan earthquake, the prostate cancer epidemic in the US, and the Iraq and Afghanistan wars. Money is spent as a result of each, but society is not richer except for Blackwater (Xe) and Halliburton (KBR).

No accountant would accept a company’s statement of accounts and financial health based in the way a nation boasts about its expanding GDP. GDP just measures cash flow but not how rich a nation is. Let’s compare nations. Nation A has high mountains, great rivers, yearly salmon runs, old tree forests, deep water ports, three feet deep top soil, and a cottage industry making dark chocolate. Nation B boasts tall buildings (concrete canyons) with men and women dressed in suits carrying briefcases who: exchange stock certificates for newly formed companies, bundle IOUs to sell to investors, buy and sell pork bellies in futures markets, and store Treasury Notes that rely on the full faith and credit of the United States. They are addicted to investing on margin just as consumers are addicted to shopping on credit. If the first country does not churn dollars in big box quantities, it will be considered Third World. The second country, that does, would be a member of the G20.

Is a nation rich because it values the size of its army and how many times over it can destroy an enemy by pressing “engage” buttons? Or is it rich in poets, artists, philosophers, astro physicists, and theoretical mathematicians? Does it spend as much time and money on public health and disease prevention as it does on diagnosing and treating illness? In ancient Greek and Roman times, leisure and tranquility were especially valued. Today, we have no time for leisure. We work hard, and we play hard. Tranquility is an endangered quality of being, if not altogether extinct. Can you imagine a Secretary of the Treasury counting tranquility in GDP?

Why is an economy defined as healthy when we buy more stuff (quantity of life) and spend more money on war, crime, disease, and disasters than we did the previous year by 3% or more? You would think that happiness would vary directly with more money and more stuff. But the research surveys say that once you’ve reached a level of income that supplies basic necessities and a moderate degree of comfort, happiness depends on other factors. Even Cindy McCain could be comfortable with fewer than ten houses and outfits that cost less than five figures each.

We need a new economic order – one that values clean air, pure water, wetlands, uncut forests, paid and unpaid work that contributes to the quality of life. Part of the new order in undeveloped countries would include social forestry where mixed tropical forests could provide firewood, fodder, food, rubber, and wood for crafts – all harvested sustainably.

The UN has taken a step with its System of National accounts. But UNSNA does not include housework and gardening, for example. The UN’s Human Development Index adds life expectancy and adult literacy. The best assessment of all has been delineated by the think tank, Redefining Progress. Its Genuine Progress Indicator (GPI) is a ledger of productivity (especially for such goods as bicycles, kayaks, and walking shoes) versus costs such as resource depletion, crime and punishment, air and water pollution, and the loss of wetlands (such as those that once protected New Orleans). We only need to add on the assets side: gathering wild vegetables (wildcrafting) breast feeding, and reading bedtime stories to grandchildren. A few priceless things to add to the bottom line.

The Holy Land -- The No State Solution

Gadfly

by Mort Malkin

The Holy Land – The No State Solution

Hereafter, it will be called the Holy Land, not Palestine, not Israel . The name change is necessary to bring about the only possible solution to the Arab-Israeli conflict – the No State Solution.

Before there were Jews and Muslims, before there was a Yahweh, the Near East was well settled by different peoples. The Sumerians, having migrated from Central Asia, settled in Mesopotamia . Bedouins from the desert were accepted into their midst. Earlier, population centers had developed at Catal Huyuk in central Anatolia ( Turkey ) and at Jericho in the Levant some 9,000 years ago. Different races (by skull type) apparently got along together. On the Mediterranean coast only a little later, cities developed at Byblos , Sidon , and Tyre . Many people and many peoples cultivated crops and herded animals in the Near East . They became craftsmen using materials found in the earth. Trade existed from earliest times in the Neolithic. Obsidian and pottery are but two examples.

In these ancient times, most folks worshipped many gods: Utu (Samas) the sun god, Nanna (Sin) the moon god, Ea the god of sweet water, Enlil the god of air and wind, Ninhursag (Nintu) the goddess of the earth, and scores more. You could call upon Innana the goddess of love, but after Sumerian times, it was a little trickier as she became Istar, who was in charge of both love and war. Perhaps that’s when Nanshe the goddess of morality stepped up to keep some balance among mortals.

Around 1900 BCE, a Semite named Abram, who lived in the city of Ur on the Euphrates , had a vision and made a covenant with a God who said He was in charge of everything. Abe changed his name from Abram to Abraham and set off for Canaan on the Western Sea . Abraham had some major doubt when this new God asked him to sacrifice his #2 son. When the request was rescinded at the last moment, Abraham kept his half of the deal. God, over the following generations performed a few tricks (miracles) to convince the skeptical who still had favorites among the other gods. Soon, or maybe not so soon, monotheism among the Semites became established. There followed a few centuries of wandering around the Near East – once a nomad it’s hard to cleanse your blood of the inclination – before three major branches of monotheism grew: Judaism, Christianity, and Islam. The denominations of each will wait till later.

Today, there is great animosity between Jews and Muslims, especially between Israelis and Arabs. Some pundits say the conflict has always existed and never will be resolved. But, past history tells us otherwise and professional seers say the future isn’t writ is stone. Here’s the story.

At the western end of the Mediterranean, the Moors converted to Islam and established their rule in southern Spain . In Andalusia, the city of Cordoba became the pre-eminent center of intellectual activity: science, medicine, mathematics, literature, and philosophy. Scholars were attracted from the entire world of the time. Jews were tolerated and even served in high posts in government. Some change occurred from one caliphate to the next, but Islamic rule began in the 8^th century and lasted almost 800 years. The great Jewish philosopher-physician-rabbi Maimonides lived under Islamic rule in Spain , Morocco, and Egypt during this time (12^th century).

At the eastern end of the Mediterranean, Jews and Muslims had lived together peaceably in the Levant for centuries. When Pope Urban launched the First Crusade and his forces captured Jerusalem (1099), Jews and Muslims were slaughtered with equal fervor. Fighting over political and economic power makes for strange friends and enemies – strange to us today.

Let us go back further to Sumerian times in Mesopotamia – many Bedouins from the Arabian desert settled in and around the Sumerian city-states of the Fertile Crescent and a few integrated with the urban populations. By 2300 BCE, Sargon, a descendant of these nomadic tribes, took power and embarked on a series of military adventures by which he established the Akkad empire. War became an established way of doing business thereafter. Before Akkad rule, the city-states – Ur , Uruk, Kish , Babylon , Larsa, Eridu, and others – were each ruled by a king. But one city, Nippur , was considered neutral ground. It was a holy city under the protection of the great god Enlil and respected by all. When kings of different cities would send their ministers to Nippur to confer (or confront), they were not allowed to bring warriors with weapons. Agreement was easier without spears and swords for distraction. Archeologists have found many documents in clay (hard copy, then) stamped with seals of several cities in common agreement.

Nippur is a fine model for a no-state solution for Israel and Palestine . Jews and Muslims can start integrating the cities one after another: Jericho, Jerusalem, Gaza, Askalon, and Hebron – all the oldest cities first. They would live side by side and even welcome Christians and Pagans. Integration of the countryside would follow in short order. Arabs and Jews working in the olive groves and raising figs and pomegranates – the deserts would bloom. Muslims and Jews have a common tradition. They both speak of Abraham as their common Patriarch. Their dietary habits are similar to this day. In the Levant , many Israeli Jews speak Arabic and Israeli Arabs all speak Hebrew. We know opposites attract and can expect there to be a few who fall in loveand marry. The Holy Land will be the new land of man & womankind. The Holy Land currency will be written in Arabic, Hebrew, and English. The tradition of Isaiah will attract diplomats, negotiators, and conciliators – enemies elsewhere around the world will become only adversaries, and then it’s just a short thought to collaboration. Jerusalem , in the spirit of Solomon, will be the place for resolving world conflicts peacefully. What work could be more holy?

Shameless

Gadfly
by Mort Malkin

Shameless

To great accord, the great majority of Americans and the active environmental community both praised Michelle Obama’s announcement that she would take a pitchfork to a swath of the White House lawn and turn it into an organic garden. Imagine — food from soil, water, and sun. The air would be a little cleaner for those vegetables absorbing CO2. But, the cheering is not universal. The Mid America CropLife Association (MACA), which is the megaphone for Monsanto, Dow, and DuPont, sent an email to the White House objecting to the First Lady’s demonstration garden. They used phrases such as “conventional agriculture” and “crop protection” in their argument. Conspicuously absent were the words “pesticide” and “chemical.” The Gadfly Revelry and Research gang suggests they change the last word of their organization to “Establishment” so it will have a more appropriate acronym.

Shamelessity is not limited to chemical companies that fool with atoms and molecules, with life itself. The health insurance industry has quietly warned the White House and Congress to take government provided health care off the table of health care reform. Both branches of government have obliged them, never mentioning those seditious words “single payer.” So emboldened, the insurance companies publicly objected to a government program side by side with private plans to offer coverage for 47 million uninsured Americans. The status quo folks say they will be unable to compete with a low-premium government plan. But, that can never be — private enterprise is always more efficient than government (according to private enterprise and Ronald Reagan). Well, the actual numbers say otherwise. Medicare has administrative costs of less than 3% of total funding. Costs beyond medical care typically run 15% to 25% in private plans — after all, they have to pay their CEO, their stockholders, and their marketing people. No contest. Big Pharma has added a voice for free-for-all enterprise so the government will pay them full retail prices. We can’t allow a government plan to negotiate a market price the way the Canadian Health system does. Whatever happened to competition in the land of Capitalism?

Perhaps shameless arrogance is going public because of the examples set by Dick Cheney. When Congress was crafting a Resolution to oppose any further escalation of the Iraq war, (Iraqis call it the American war), Cheney famously said, “That won’t stop us.”

Another time Cheney shot a hunting partner in the face and chest. Poor Harry Whittington, 78 years old, didn’t get out of Cheney’s line of fire quickly enough. Cheney got Whittington to apologize for causing the Vice President’s family such anxiety.

Just last year, Cheney was interviewed by Martha Raddatz who was ready to do any necessary follow-up. She noted that “Two thirds of Americans say [the Iraq war] is not worth fighting.” He responded with a simple, “So?” Raddatz was incredulous, “So?? You don’t care what the American people think?” Right there on Good Morning America.

Cheney, no longer in office, is a private citizen. Why didn’t the Founding Fathers have had an Amendment in the Constitution that allowed him to continue to: fire people, leak the identities of select secret agents, and bomb disloyal foreign nations? Trigger Dick would look after the national interest. When he was Vice President he ran the most secretive office (the OVP) of the Bush Administration — nicknamed the Black Hole. The most sensitive work, however, was done in “an undisclosed, secure location.” Nowadays, he is not so secretive, nor so private a citizen. In informal partnership, he and Karl Rove are appearing as the Katzenjammer Kids on Fox (Fixed) News. He shamelessly defends torture as enhanced interrogation at every turn. Curiously, the man who used to classify everything, Mr. Secrecy himself, has now asked the CIA to declassify a few select pages of documents from his OVP records so he can prove that torture works. It may be a matter of money versus ideology. Dick Cheney is planning to write a book about his recent eight years in the White House and figures that a few declassified documents would be worth a larger advance. He surely can use the money whatwith insurance coverage for quail hunting so high of late.

Congruent with Cheney’s elevation of arrogance to an art form, Henry Paulson was receiving several million per year in salary and stock options. But millions counts as pocket change on Wall Street. When Hank became Secretary of Treasury in 2006, he asked Congress for $700 billion (that’s Billion with a b) in TARP funds with no strings attached. Now, that’s world class chutzpah. Goldman Sachs, his old firm, initially received $10 Billion. Then AIG (Arrogance, Incompetence, Greed) was given $170 billion that it owed to various others — Bank of America, Watchovia, CitiBank, Merrill Lynch, Morgan Stanley, Deutsche Bank, Barclays, UBS, and, oh yes, Goldman Sachs. Goldman Sachs duly received more than anyone else. How could anyone think Paulson was possessed by conflict of interest?

Is Sauvage Capitalism hopeless? Of late a few glimmers of hope have appeared, but you have to have a search engine to spot them. In April, The NY Times published the compensation package of the CEOs of 200 of the largest US companies. At the end of the list is the median income — over $8 million. Hidden away in the middle we see Google’s chief executive at $508,764 and Apple’s at $1, no hidden stock options or deferred income. Could this be the start of an epidemic of spreading the wealth around?

You might expect revolutionary financial ideas from such companies as Apple where technology rules over dollars and from Google whose motto is “Do no evil.” But, US car makers say that health benefits for workers add more than $1000 to the ticket price of a car. Other manufacturers also complain that health benefits for workers and retirees are making their products uncompetitive. No wonder companies are outsourcing US jobs even as they send their hidden profits to the Cayman Islands. Halliburton shamelessly moved their entire company to Dubai. Shameless.

Air Force One Maneuvers

Air Force One Maneuvers
by Mort Malkin

On April 27, New Yorkers saw a four engined Boeing 747 flying low over downtown Manhattan, not a flight pattern they had seen for eight years. The plane was Air Force One. The flight crew, having been cleared by the flight controllers, thought that New Yorkers running from buildings was normal daily activity in the city.

This time the President was not aboard Air Force One. It was a photo-op flight for a picture that the White House could use in some brochure. Of course, the TV networks made a story of the gallons per mile the great plane uses and the total cost of the flight for a PR mission. In a departure from the B-C administration where no one was fired for failure to heed the multiple warnings of the attacks of 9-11 received at the Pentagon and the White House, the Obama team forced Louis Caldera, the Director of The White House Military Office, to resign, with no excuses that he wanted to spend more time with his family.

But the White House was not concerned about a lack of sensitivity for New Yorkers who will never forget two hijacked planes hitting the Twin Towers. Louis Caldera was fired because he was insufficiently computer literate. He should have known that with a photo program he could make a nice composite film of Air Force One passing over the Statue of Liberty. The Big Plane wouldn’t even have to take off.

Promises, Promises ...

Gadfly
by Mort Malkin

Promises, Promises …

Candidate Obama promised hope and change. Hope and change and transparency and accountability. Once he was elected as President and took the oath of office Obama hit the ground at full sprint. He nominated cabinet members and salaried advisors so fast he forgot to ask them if they were squeaky clean in their investments and whether they paid taxes for their household help. The blogosphere became the Gotcha Gang; and the corporate TV networks, eager to be seen as investigative reporters, repeated a few discrepancies. Bill Richardson withdrew after his nomination to be Secretary of Commerce; Sam Dachele declined the portfolio of Health and Human Services; Congress took a deep breath and didn’t ask Dennis Blair about his support of the Indonesian generals in their brutal repression of East Timor and confirmed his appointmentment as Director of National Intelligence. The Senate, still weary, and let Timothy Geithner become Secretary of the Treasury despite his forgetting to pay all his taxes. Lawrence Summers who, as president of Harvard, said women are by nature “worse than men in science and math” became the White House chief financial advisor.

President Obama kept up the pace of the first few days by flying around the country making speeches about how urgent the financial stimulus package was for the economy. But, there was nary a word about redefining Gross National Product to include such unpaid states as: women’s work in raising children, volunteers working in libraries and hospitals, and environmentalists commandeering old growth trees so the giants could sequester more CO2 instead of being cut up into 2x4s.

Within 100 days he ran off to Europe on a tour of the G20 in England and NATO in France. The other World leaders all smiled and said “Charmed, I’m sure” but pledged only a few Euros for an international financial stimulus. The NATO nations agreed to just a few carpenters and electricians, but no soldiers for Afghanistan. The US, being the leader of the Free World in military might, would have to supply soldiers and guns.

So, he came back to North America and visited Mexico. Surely he would have more luck when he asked President Calderon to crack down on drug smugglers. But, that ingrate Calderon, despite US help in getting elected, focussed attenton to the North. He suggested that we do something about the demand for mind altering drugs in the US. Then, impolitely, he asked Obama to have the DEA stem the flow of laundered money and assault weapons from the US into Mexico. Hugo Chavez and Evo Morales must be poisoning the air in Latin America. Don’t they know the Western Hemisphere is a US sphere of influence?

While the President was away on his (failed) charm offensive, the ACLU challenged the government to close down the windowless facility where the NSA intercepted our phone calls & emails. They also brought suit against the (mostly) previous government officials who colluded with the telecom companies in warrantless spying. Obama’s Justice Department argued “state secrets” in asking the judge to dismiss the suit. State secrets? Do they mean to imply national security? Or national interest, or national embarrassment? The scene was like a reverse time warp of Bush-Cheney, the administration of 39 “state secret” invocations. Whatever happened to the Obama transparency that we were promised?

Both administrations, 43 and 44, may have brought forth “state secrets” as legal doctrine, but the inherent weakness of that claim screamed for something more substantial. In their time, the Bush-Cheney (B-C) lawyers paraded out the “Commander in Chief” cannon. When a few Constitutional scholars pointed out that the President is Commander in Chief of the armed forces, not of civilian citizens, the White House seamlessly offered the “Unitary Executive,” a theory that posits that the Executive branch of government is first among three equals. The Obama administration took a scholarly, historical path, citing a thousand year old precedent: the doctrine of “sovereign immunity.” Right there before the court and everybody, “sovereign immunity”? Watch out Barack, if you selectively resurrect Old English law and the sovereign immunity of the king, the ACLU will surely bring up the Magna Carta.

Attorney General Eric Holder tried to calm the people who elected Obama to the Presidency — we voters who believed his campaign promises. So, Holder released the now (in)famous torture memos — the Bush-Cheney legal opinions that permitted ten different types of “enhanced interrogation.” That included techniques such as slamming the detainee’s head into a convenient wall (walling) or holding a water-soaked rag over the prisoner’s nose & mouth for up to 40 seconds at a time and over a 20 minute period (water boarding). The AG didn’t expect such a firestorm in the media. After all, The New York Review of Books had recently published the International Red Cross Report which told the details of the abuses at the Guantanamo prison from 2002 to 2006. It was already public knowledge. Any residual doubt about it being torture was dispelled by Dick Cheney’s appearances on TV news shows in which he said he approved of the “tough, mean, dirty business … of enhanced interrogation.”

In a quiet post script to the released memos, the Attorney General said any CIA agents who interrogated prisoners and relied on the memos of legal opinion to cover their backs (and other body parts) would not be prosecuted. Here are a few snippets of the discussions in the Situation Room: Don’t worry about The Convention Against Torture that Ronald Reagan signed in 1988 and the Senate ratified in 1994. The Geneva Conventions Article 146, as everyone knows, is quaint and out of date. The Nuremberg Tribunal applied to Germany but not to us — we won WWII. OK, so what about the government lawyers who wrote the memos and the high officials (read: Cheney, Rumsfeld, and Bush) who ordered the allowative memos? Will they be given immunity, too? Why are there so many voters who remember lofty campaign promises … like accountability? A contagion of Change must be sweeping America.