Wordsmith Wars

Depresion and Democracy

2012-02-05T03:12:00.000-01:00

Editor's Note: for some time we have been describing the current economy as in Depression. Dr. Paul Krugman of Princeton University is a Nobel Laureate in macro-economics. This column appeared in the New York Times on December 11, 2011.

By PAUL KRUGMAN

It’s time to start calling the current situation what it is: a depression. True, it’s not a full replay of the Great Depression, but that’s cold comfort. Unemployment in both America and Europe remains disastrously high. Leaders and institutions are increasingly discredited. And democratic values are under siege.

On that last point, I am not being alarmist. On the political as on the

economic front it’s important not to fall into the “not as bad as” trap. High unemployment isn’t O.K. just because it hasn’t hit 1933 levels; ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight.

Let’s talk, in particular, about what’s happening in Europe — not because all is well with America, but because the gravity of European political developments isn’t widely understood.

First of all, the crisis of the euro is killing the European dream. The shared currency, which was supposed to bind nations together, has instead created an atmosphere of bitter acrimony.

Specifically, demands for ever-harsher austerity, with no offsetting effort to foster growth, have done double damage. They have failed as economic policy, worsening unemployment without restoring confidence; a Europe-wide recession now looks likely even if the immediate threat of financial crisis is contained. And they have created immense anger, with many Europeans furious at what is perceived, fairly or unfairly (or actually a bit of both), as a heavy-handed exercise of German power.

Nobody familiar with Europe’s history can look at this resurgence of hostility without feeling a shiver. Yet there may be worse things happening.

Right-wing populists are on the rise from Austria, where the Freedom Party (whose leader used to have neo-Nazi connections) runs neck-and-neck in the polls with established parties, to Finland, where the anti-immigrant True Finns party had a strong electoral showing last April. And these are rich countries whose economies have held up fairly well. Matters look even more ominous in the poorer nations of Central and Eastern Europe.

Last month the European Bank for Reconstruction and Development documented a sharp drop in public support for democracy in the “new E.U.” countries, the nations that joined the European Union after the fall of the Berlin Wall. Not surprisingly, the loss of faith in democracy has been greatest in the countries that suffered the deepest economic slumps.

And in at least one nation, Hungary, democratic institutions are being undermined as we speak.

Taken together, all this amounts to the re-establishment of authoritarian rule, under a paper-thin veneer of democracy, in the heart of Europe. And it’s a sample of what may happen much more widely if this depression continues.

It’s not clear what can be done about Hungary’s authoritarian slide. The U.S. State Department, to its credit, has been very much on the case, but this is essentially a European matter. The European Union missed the chance to head off the power grab at the start — in part because the new Constitution was rammed through while Hungary held the Union’s rotating presidency. It will be much harder to reverse the slide now. Yet Europe’s leaders had better try, or risk losing everything they stand for.

And they also need to rethink their failing economic policies. If they don’t, there will be more backsliding on democracy — and the breakup of the euro may be the least of their worries.

The Problem with Health Car is For-Profit Insurance

2012-01-13T19:29:00.000-01:00

In America, there is much sound and fury about health care but damn little light. Here is an exception from Oregon.

By Samuel Metz and Charlotte Maloney

The Register-Guard (Eugene, Ore.), Jan. 9, 2012

Modern mythology recounts James Carville giving candidate Bill Clinton memorable advice regarding his upcoming presidential campaign: “It’s the economy, stupid.” Those of us wrestling with health care reform might take similar advice: “It’s the financing, stupid.”

Why do politicians such as Sen. Ron Wyden, D-Ore., and Rep. Paul Ryan, R-Wis., obsess with untried models of health care reform? They propose a “premium support option” for Medicare that would also extend to small businesses. Insurance companies are expected to compete with traditional Medicare to provide comprehensive benefits at affordable prices. Beneficiaries unable to afford premiums will receive vouchers of limited sums to support their premiums; hence the name, “premium support.”

This plan presumes that private insurance companies will eagerly compete for market share by offering better benefits at lower prices to our seniors. This simply does not happen.

Our two congressmen may be confusing American insurance companies with those in Europe. European companies are forbidden to discriminate on the basis of health, must offer policies to any applicant, must supply comprehensive benefits in every policy, and cannot cancel a policy for any reason. They compete by offering better benefits at lower costs with better customer service.

In contrast, American insurance companies play by entirely different rules. They compete by refusing policies to sick applicants, shrinking benefits, dropping policy holders as soon as they get sick, and denying or delaying payment to providers. In short, they compete by providing less care to fewer people.

Our last experience with letting private insurance companies compete for seniors (Medicare Advantage) reconfirmed this: Private insurance companies skimmed off the healthiest seniors and provided them with no better benefits than traditional Medicare except they cost the government 15 percent more. Why should we expect private insurance to be more successful than Medicare with the Wyden-Ryan plan?

If we define a “successful” health care system as one that delivers better care to more people for less money than we do, examples abound around the world and within our own country. These systems come in all varieties — complete government control, minimal government control, private providers, group providers, fee-for-service physicians, salaried physicians, managed care, medical homes — you name the variation, and it’s been used successfully. The United States uses all of these, but our health care is in the pits.

The United States lacks the three common elements used in every successful health care system. And these elements are not delivery methods; they are financing methods:

* Everyone is included forever. No exclusion for any reason. No one is dropped or marginalized when they become old, sick, poor or unemployed.

* Little or no cost-sharing. No patient is discouraged from seeking health care. Instead of making a patient decide if they need medical care before seeing a physician, the physician decides after seeing the patient.

* Financing is provided by publicly accountable, transparent, not-for-profit agencies. Although some models permit profits from delivering health care, none allows profits from financing health care.

Successful systems can make almost any delivery method succeed, but only when financing fulfills these elements (unlike the Wyden-Paul proposal, which fails to address any of them). No delivery system has ever succeeded in their absence. Though pundits may obsess endlessly why these requirements are theoretically unnecessary, the reality is stark. Bad financing makes any delivery system fail.

America appears wedded to our traditional (and unsuccessful) private health insurance industry that fragments us into the healthy (who can purchase access to health care) and the sick (who can’t). And the fragmentation is not static. If you were previously healthy but become sick, your insurance company will do its best to exclude you from access on their dollar.

No other nation has provided universal cost-effective health care with this method. We haven’t either. There is no reason to think it will work in the future.

Wyden and Ryan neatly avoid tampering with our lethal dependence on financing health care with private insurance. This continues to place the health of the private insurance industry over the health of the people they serve.

Without a change in health care financing, reform is futile. In all recorded history and throughout the world today, we find no working models of a society providing universal cost-effective health care using our unique American system of private health insurance. It is possible Neanderthals achieved this goal with private insurance but left no written record. Doubtful.

We spin our wheels by focusing on our delivery system. It’s the financing, stupid.

Charlotte Maloney of Eugene is a retired occupational therapist and outgoing treasurer of Health Care for All-Oregon. Samuel Metz, M.D., of Portland (samuelmetz@samuelmetz.com) is a member of the Oregon Single Payer Coalition.

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New Study: U.S. Ranks Last Among High-Income Nations on Preventable Deaths, Lagging Behind as Others Improve More Rapidly

2011-12-01T21:55:00.000-01:00

Editor's Note" According to the Commonwealth Fund, up to 84,000 lives annually could be saved if the U.S. lowered its preventable death rate to that of the top three performing nations.

Bethanne Fox, Senior Associate

The Commonwealth Fund

The United States placed last among 16 high-income, industrialized nations when it comes to deaths that could potentially have been prevented by timely access to effective health care, according to a Commonwealth Fund–supported study that appeared online in the journal Health Policy this week and will be available in print on October 25th as part of the November issue. According to the study, other nations lowered their preventable death rates an average of 31 percent between 1997–98 and 2006–07, while the U.S. rate declined by only 20 percent, from 120 to 96 per 100,000. At the end of the decade, the preventable mortality rate in the U.S. was almost twice that in France, which had the lowest rate—55 per 100,000.

In "Variations in Amenable Mortality—Trends in 16 High Income Nations," Ellen Nolte of RAND Europe and Martin McKee of the London School of Hygiene and Tro

pical Medicine analyzed deaths that occurred before age 75 from causes like treatable cancer, diabetes, childhood infections/respiratory diseases, and complications from surgeries. They found that an average 41 percent drop in death rates from ischemic heart disease was the primary driver of declining preventable deaths, and they estimate that if the U.S. could improve its preventable death rate to match that of the three best-performing countries—France, Australia, and Italy—84,000 fewer people would have died each year by the end of the period studied.

"This study points to substantial opportunity to prevent premature death in the United States. We spend far more than any of the comparison countries—up to twice as much—yet are improving less rapidly," said Commonwealth Fund Senior Vice President Cathy Schoen. "The good news is we know lower death rates are achievable if we enhance access and ensure high-quality care regardless of where you live. Looking forward, reforms under the Affordable Care Act have the potential to reduce the number of preventable deaths in the U.S. We have the potential to join the leaders among high-income countries."

Nolte and McKee noted that while preventable death rates declined in all 16 countries, the rate of decline varied significantly. Ireland, which ranked last with the highest preventable death rate in 1997–98, improved 42 percent by 2006–07. As a result, Ireland narrowed the gap with France, the country with the lowest "amenable mortality," with 55 preventable deaths per 100,000 people. France was followed closely by Australia (57 per 100,000), and Italy (60 per 100,000). The U.S. ranked last, with 96 preventable deaths per 100,000 in 2006–07, down from 120 in 1997–98. The United Kingdom, which like Ireland began the decade with preventable death rates higher than the United States, now has rates that are considerably lower (83 per 100,000), reflecting more rapid improvement.

According to the study's authors, the United States' poor performance and relatively slow improvement compared with other nations may be attributable to "the lack of universal coverage and high costs of care."

"Cross-national comparisons consistently find that people in the U.S. have a harder time getting and paying for the health care they need than people in other countries," said Commonwealth Fund President Karen Davis. "The good news is that Affordable Care Act reforms are targeted at specifically the areas that are responsible for this divide—costs and access to health care."

Winter Descends On The Arab Spring

2011-10-29T19:51:00.000-01:00

Editor's Note: Our Obsession with sound bites may be stranding us on a desert mirage in the Middle East. "Spring" connotes rebirth, innocence and tranquility. But the signature quality of the entire "Arab Spring" is merely "throw da bums out!"
The author is Director of Journalism at Oxford University and a Contributing Editor, The Financial Times:

arab spring | revolution

By John Lloyd
As we are still touched with the euphoria of the Arab Spring, the Arab winter has crept up all but unnoticed, beyond the forecasts of experts and the calculations of governments. It was only this month, after all, when Libya’s civil strife was cut off by the death in a ditch of Muammar Gaddafi: however regrettable the nature of his end, it removes the main focus of a future fight back. It was only this month, after all, when Tunisia held fair and free and peaceful elections, in which a moderate Islamist party came first. It will, after all, be next month when the three rounds of voting for the Egyptian parliamentary elections begin. Why talk of a failure?
Because if there was a revolution in spring – in fact, a series of quite distinct revolts, animated by something of a common spirit – there is now a counterrevolution. Or rather, once more, a series of distinct efforts to push back, or at least control and turn to group advantage, the gains made by the demonstrators. Power is not won simply by revolt: it is won, and secured, by those interested in the exercise of power, prepared to grasp and hold it.
In Egypt, which provided to the international gaze the most stirring movement and the least ambiguous, largely peaceful, victory in the resignation of President Hosni Mubarak, power is still grasped by the organization which has been the deep structure of power for more than half a century: the military. Both its will to rule and its desire to retain privilege appear to be as high as ever: and there are signs that both the Muslim Brotherhood – the only well organized political force – and the regional chiefs are coming to quiet understandings with the military leadership on how the country is to be governed.
Stability – if they can achieve it – would be welcomed by most: the economy and employment have suffered badly, and the promises from the U.S., Saudi Arabia, the World Bank and the IMF of grants, soft loans and debt forgiveness amounting to some $15 billion could stabilize the economy – if a government emerges which both understands how to use the money and how to run the state. But the euphoria of liberation, already dissipated, will not return: that was a moment only.
The strength of the Islamists is growing, and will grow further. The al-Nahda party became the largest in Tunisia’s new parliament, with over 40 per cent of the vote and 90 of the parliament’s 217 seats. It’s in talks with the leftist Congress for the Republic, which came second with 30 seats: but since the first is firmly religious and the second is firmly secular, these are likely to be hard – though, if successful, they will be an early indication of how hard line, or accommodating, 2010’s political Islamism is likely to be.
Unlike Tunisia and Egypt, Libya deposed its dictator in blood – ultimately, his own. And though the rebels have expressed their gratitude to NATO and their desire for freedom to every passing camera, they come to power as a disparate set of armed groups with quite different backgrounds, tribal affiliations and aims. From their ranks is likely to come an administration which must restore a semi-ruined economy and end Gaddafi’s self imposed isolation from and enmity with most of the rest of the Arab world (the reason why, unprecedentedly, the Arab League called on NATO to help depose his regime).
Libya’s National Transitional Council, led by Mustafa Abdul Jalil, faces a task as momentous as deposing the former dictator. The Interim Prime Minister, Ali Tarhouni, has a month to name a caretaker government – which in turn has eight months to schedule elections. The tribal and party differences in a country from which most manifestations of civil society – and thus the habit of social and political compromise – were banned, are wide and deep and likely to be bitter. Already, the Islamists have succeeded in forcing the first interim premier, Mahmoud Jibril, a secular intellectual, to step down. His successor announced that a Gaddafi-era law requiring men to ask a first wife for leave to marry a second would be repealed, saying that “this is not in our Koran: we take the Koran as the first source for our constitution.”
As for Syria, the fighting goes on, with Bashar Assad showing little sign of relenting to pressure, from wherever it may come. Even if he does, and the opposition forces his resignation or defeats his forces, the divisions in a country where independence of organization and thought was little tolerated will make a post-victory settlement a hugely complex and dangerous operation – one reason why western states have done no more than exhort, with no thought of intervention.
In a starkly pessimistic piece in the New York Review of Books, the former Bill Clinton adviser on Arab-Israeli affairs Robert Malley and the Oxford scholar Hussein Agha wrote that “revolutions devour their children. The spoils go to the resolute, the patient, who know what they are pursuing and how to achieve it…the young activists who first rush onto the streets tend to lose out in the skirmishes that follow…the usual condition of a revolutionary is to be tossed aside.”
That is what happening now, in different ways, at different tempos. But a likely common outcome will be some form of stablibya, syrisility: how much more blood must be shed to win that, how repressive that will be, how far it breaks some of the old molds, will be the thing to watch. And to watch as well - how far a fuse has been lit for real democratization, which may burn away, largely underground, before a more extensive liberation… some way down the road.

Vice President: "The Middle Class Hass Been Screwed"

2011-10-08T17:55:00.002-01:00

By A S (Sandy) Prisant

There is no precedent for this. America has never engaged in Class Warfare. We consciously decided NOT to follow the British during the Industrial Revolution--when American Labor unions deliberately decided to be the only nation on earth to celebrate the working man in September, not on Labor Day;
when the Democrats decided not to become the Labor Party.

After all, why divide into classes when there was ubiquitous socio-economic mobility? But suddenly that is gone. Suddenly we have the severe economic inequality of 1910. That's right, 1910. The whole middle class advance, post World War II, has been wiped away in a decade.

The unsurprising result: only 20% of the nation believe there is an upwardly mobile future--for themselves or the country. Americans are beginning to take stock. And take sides.

Before now, references to rich and poor were simply occasional throwaway lines in political bombast. Now they are the crude labels around which society is coalescing and dividing.

If you doubt it, read today's statement from Vice President Biden, to the best of my memory, no one form the White House--certainly not in the depths of the Great Depression--ever made a public statement like this. We are entering uncharted waters.

Vice President Joe Biden expressed empathy for the "Occupy Wall Street" protesters in New York and elsewhere who are pushing for a radical overhaul of U.S. institutions and government, saying the American system has run amok and is no longer fair for the vast majority of Americans.

Asked if he and President Obama stood in solidarity with protesters in lower Manhattan,Biden said it was a "really fair question" and then did not directly answer it.

.
"What is the core of that protest?" Biden asked rhetorically. "The core is the American people do not think the system is fair or on the level."

The vice president noted that the conservative Tea Party wing of the Republican party emerged from anger at President George W. Bush's bailout of the financial system three years ago and many Americans from the opposite side of the political spectrum are feeling that same anger toward the banks

"Look guys the bargain is not on the level anymore in the minds of the vast majority of the American (people) the middle class has been screwed," Biden said.

He cited the public outrage over a recent decision by Bank of America to impose a $5 fee for consumers to use their debit card demonstrates that anger.

Biden said "The American people know... the reason the CEO of the Bank of America" is still in business is because "the guy making $50,000 bucks bailed him out. Bailed him out."

Bank of America is "incredibly tone deaf at a minimum. At a maximum, they are not, they are not, paying their fair share of the bargain here. And middle class people are getting screwed," Biden said

The Depression Reading List

2011-09-28T20:06:00.002-01:00

Editor's Note: Over four years after it started, reality is finally settling in on the nation. A S Prisant.

Reuters “As the U.S. economy slouches toward another recession and confidence in policymakers erodes, investors are coming to grips with the notion that the country may already be several years into a Japan-style lost decade.”

The New York Times “Another 2.6 million people slipped into poverty in the United States last year, the Census Bureau reported Tuesday, and the number of Americans living below the official poverty line, 46.2 million people, was the highest number in the 52 years the bureau has been publishing figures on it.”

CNN “The economy is still struggling. And Americans are in for a long and painful adjustment period.”

My Medical Miracle

2011-08-21T20:46:00.000-01:00

By Dr. Claudia Ricci

Editor's Note: Claudia Ricci is an author and professor of journalism. Her latest novel is the recently published "Seeing Red". Prof. Ricci is a co-founder of "Wordsmith Wars".

I believe a miracle happened to me on August 6, 2003, and it turned my view of medicine, and the whole world, completely upside down.

Maybe you won’t believe me.

It was the second summer I had to face treatment for Hodgkin’s disease, a curable cancer. I felt as healthy as a racehorse that summer. I was jogging and sporting a wild mane of new curls.

Still, the CT scan at my regular check up showed an olive-sized spot in my chest. The oncologist insisted I needed a stem cell transplant, a procedure that brings you near death before it cures you, supposedly.

I demanded a second opinion.

Meanwhile, I took my sister-in-law’s advice and consulted a medical intuitive. Why? Because my sister-in-law told me, simply, “She will blow your mind.”

And blow my mind she did.

August 6, 2003 was a hot day in L.A., where I was visiting my sister. I phoned the medical intuitive at precisely 7 a.m., as instructed. The intuitive – who diagnoses disease from a distance, on total strangers – was in Stowe, Vermont.

She had never met me. She didn’t know my last name. She knew only that I had suffered from cancer.

“Lie down,” she said. “Your limbs will get heavy. After 45 minutes the feeling will go away. Call me back.”
Lying in my sister’s guest room, my arms and legs puddled into cement. An hour later, I phoned the woman back.

“Did your mother have lung cancer?” asked the intuitive, named Karin.

“No.”

“Did she have a serious lung ailment?”

“She had asthma, very bad, as I grew up.”

“So, underlying your cancer is your resentment towards your mother’s illness,” the intuitive said matter-of-factly. My heart raced. I had always had difficulty dealing with my mother being sick.

But Karin wasn’t finished.

“You have one spot of cancer to cure. It’s on your left side, right above your diaphragm, and below your rib cage. You will be cured, but you must deal with your feelings toward your mother.”

My jaw dropped. Only two people in the world knew where that spot was: my doctor and my husband. How could she possibly know?

I was premed, a bio major, at Brown University and later, I worked as a reporter for one of the nation’s leading daily newspapers. I was trained to look at the world rather skeptically. I have always believed in a rational universe that operated according to logical rules that could be tested.

But here was something I couldn’t explain. This woman knew a fundamental and frightening truth about my body, no matter that she was a total stranger and 3,000 miles away.

That day I began to realize there are deep mysteries in the universe. We know what makes cell phones and computers tick, but we are far from grasping the secrets of the human mind. We aren’t even sure what consciousness is, and are just starting to figure out how our thinking influences the body. We are beginning to see that human beings –like the Universe itself – are complex energy systems finely tuned and capable of fantastic powers.

An hour after my intuitive reading, my husband called. The doctor in Boston had phoned: I did not need the stem cell transplant after all; that olive-sized spot was left over from the first treatment. He prescribed more chemo and radiation, and soon I was healed.

But my exploration of a brand new world was just beginning.

How I felt writing this essay:

It took me almost seven years to find the courage to tell this story, as the episode I am writing about here is part of a very, very difficult time in my life.

The oncologist at Sloan Kettering in New York who insisted I needed the stem cell transplant had scared me deeply. It took extraordinary courage for me to defy him, and insist on a second opinion. He told me that no one was more experienced or knowledgeable as he was, and that, basically, I was a goner if I didn't submit to the stem cell treatment. (It turned out that he had a self interest in seeing me be part of his stem cell research.)

Even though I found another equally-experienced doctor in Boston, a more senior doctor who was endlessly reassuring, and who handled my care with great great skill, I will never quite forget that doctor in New York and that terrifying month leading up to August 6th, 2003.

The reading by the intuitive changed my life, and reinforced my desire to take control of my own cancer treatment.

November 7, 2010

Sent an email to The Moth with this message:

“Here's a story for you: on August 6, 2003, a miracle happened to me and it turned my view of medicine, and the whole world, completely upside down.

It was the second summer I had to face treatment for Hodgkin’s disease, a curable cancer. I felt as healthy as a racehorse that summer. I was jogging a couple miles a day and sporting a wild mane of new curls.

But then came the day that my "routine" CT scan showed an olive-sized spot in my chest. The oncologist insisted I needed a stem cell transplant, a procedure that brings you near death before it cures you, supposedly.

I demanded a second opinion. Meanwhile, I took my sister-in-law’s advice and consulted a medical intuitive. Why? Because my sister-in-law had told me, simply, “She will blow your mind.”

And blow my mind she did.

She had never met me. She didn’t know my last name. She knew only that I had suffered from cancer.

And what she said to me on the phone that day, as I lay 3000 miles away, was nothing short of a miracle.

If you want to hear more, I would be happy to share it with The Moth.”

Rick Perry Says Social Security And Medicare Are Unconstitutional

2011-08-13T21:08:00.000-01:00

Our next President...Bullets for Ballots?

By Sandy Prisant

This country may be reaching the breaking point.

Every day the President seems more aloof; less anxious to offer new ideas. Less anxious to lead from the front.

While at the same time, the other side is going bananas. Take Rick Perry. He's declared for President and apparently re-written the

Constitution in less than a week.

It's another Texas Governor hell-bent

on re-casting our nation in

his own image.

Here are some of the things the Governor came out with this week, in between re-loading, as he prepared to announce his campaign for the White House:

Texas should be able to opt out of Social Security
E verything from federal public school programs to clean air laws are unconstitutional
Social Security and Medicare are unconstitutional

An excerpt from one interview:

"The Constitution says that “the Congress shall have Power To lay and collect Taxes… to provide for the… general Welfare of the United States.” But I noticed that when you quoted this section on page 116, you left “general welfare” out and put an ellipsis in its place. Most Americans would say that “general welfare” includes things like Social Security or Medicare—that it gives the government the flexibility to tackle more than just the basic responsibilities laid out explicitly in our founding document. What does “general welfare” mean to you?
[PERRY:] I don’t think our founding fathers when they were putting the term “general welfare” in there were thinking about a federally operated program of pensions nor a federally operated program of health care. What they clearly said was that those were issues that the states need to address. Not the federal government. I stand very clear on that. From my perspective, the states could substantially better operate those programs if that’s what those states decided to do.
"So in your view those things fall outside of general welfare. But what falls inside of it? What did the Founders mean by “general welfare”?
[PERRY:] I don’t know if I’m going to sit here and parse down to what the Founding Fathers thought general welfare meant.
"But you just said what you thought they didn’t mean by general welfare. So isn’t it fair to ask what they did mean? It’s in the Constitution.
[Silence.]

Perry’s reading of the Constitution raises very serious questions about whether he understands the English language. The Constitution gives Congress the power “to lay and collect taxes” and to “provide for the…general welfare of the United States.” No plausible interpretation of the words “general welfare” does not include programs that ensure that all Americans can live their entire lives secure in the understanding that retirement will not force them into poverty and untreated sickness.

Moreover, Perry’s belief that Social Security and Medicare must cease to exist not only puts him well to the right of his fellow Republicans in Congress it also puts him at the rightward fringe of the GOP presidential field.

When House Budget Chair Paul Ryan (R-WI) released the GOP’s plan last spring to slowly eliminate Medicare, it was the most conservative budget proposal anyone had seriously considered in generations.

But neither Ryan nor even Michele Bachmann have gone on record claiming that America’s two most cherished programs for seniors violate the Constitution.

An observer can only conclude that we are being stretched to such extremes by such wildly disparate visions of what this country, its government and a democratic republic should be about, that we are moving toward political instability.

Political instability so severe that it threatens the fabric of the nation.

The Depression: Year 4

2011-08-09T15:39:00.000-01:00

"For all of you out there

who are not currently

employed,

it is very unlikely

your will ever be employed again."

Dr Paul Krugman

Princeton University

Nobel Laureate in Economics

(PBS News Hour, August 8, 2011)

Why Americans Are So Angry

2011-07-31T16:44:00.000-01:00

By Alexander "Sandy" Prisant

Editors Note: The crisis in leadership is now very stark. To understand where America is going on, please see below:

By US Senator Bernie Sanders

July 28, 2011

The rich are getting richer. Their effective tax rate, in recent years, has been reduced to the lowest in modern history. Nurses, teachers and firemen actually pay a higher tax rate than some billionaires. It's no wonder the American people are angry.

Many corporations, including General Electric and Exxon-Mobil, have made billions in profits while using loopholes to avoid paying any federal income taxes. We lose $100 billion every year in federal revenue from companies and individuals who stash their wealth in tax havens off-shore like the Cayman Islands and Bermuda. The sum of all the revenue collected by the Treasury today totals just 14.8% of our gross domestic product, the lowest in about 50 years.

In the midst of this, Republicans in Congress have been fanatically determined to protect the interests of the wealthy and large multinational corporations so that they do not contribute a single penny toward deficit reduction.

If the Republicans have their way, the entire burden of deficit reduction will be placed on the elderly, the sick, children and working families. In the midst of a horrendous recession that is already causing severe pain for average Americans, this approach is morally grotesque. It's also bad economic policy.

President Obama and the Democrats have been extremely weak in opposing these right-wing extremist proposals. Although the United States now has the most unequal distribution of wealth and income of any major industrialized country, Democrats have not succeeded in getting any new revenue from those at the top of the economic ladder to reduce the deficit.

Instead, they've handed the wealthy even more tax breaks. In December, the House and the Senate extended President George W. Bush's tax cuts for the rich and lowered estate tax rates for the wealthiest Americans. In April, to avoid the Republican effort to shut down the government, they allowed $38.5 billion in cuts to vitally important programs for working-class and middle-class Americans.

Now, with the U.S. facing the possibility of the first default in our nation's history, the American people find themselves forced to choose between two congressional deficit-reduction plans. The plan by Senate Majority Leader Harry Reid, which calls for $2.4 trillion in cuts over a 10-year period, includes $900 billion in cuts in areas such as education, health care, nutrition, affordable housing, child care and many other programs desperately needed by working families and the most vulnerable.

The Senate plan appropriately calls for meaningful cuts in military spending and ending the wars in Afghanistan and Iraq. But it does not ask the wealthiest people in this country and the largest corporations to make any sacrifice.

The Reid plan is bad. The constantly shifting plan by House Speaker John Boehner is much worse. His $1.2 trillion plan calls for no cuts in the wars in Afghanistan and Iraq, and it requires a congressional committee to come up with another $1.8 trillion in cuts within six months of passage.

Those cuts would mean drastic reductions in Social Security, Medicare and Medicaid. What's more, Mr. Boehner's plan would reopen the debate over the debt ceiling, which is now paralyzing Congress, just six months from now.

While all of this is going on in Washington, the American people have consistently stated, in poll after poll, that they want wealthy individuals and large corporations to pay their fair share of taxes. They also want bedrock social programs like Social Security, Medicare and Medicaid to be protected. For example, a July 14-17 Washington Post/ABC News poll found that 72% of Americans believe that Americans earning more than $250,000 a year should pay more in taxes.

In other words, Congress is now on a path to do exactly what the American people don't want. Americans want shared sacrifice in deficit reduction. Congress is on track to give them the exact opposite: major cuts in the most important programs that the middle class needs and wants, and no sacrifice from the wealthy and the powerful.

Is it any wonder, therefore, that the American people are so angry with what's going on in Washington? I am too.

Mr. Sanders, an independent senator from Vermont, is a member of the Senate Budget Committee.

Writing That's Alive and Well

2011-07-23T20:49:00.000-01:00

By Sandy Prisant

You may not want to sit down with Claudia Ricci's new novel "Seeing Red" with an e-reader. You may prefer to take hold of this book with your fingers, your hands, your arms. It's that human.

"...life is a flood of ephemeral moments..."

This is a book that makes us wonder where much of our fiction would come from if it were not for those two species:"men" and "women". We easily identify with imperfect characters and their messy lives because they're thinking about the very things we think about, all the time.

Dr. Ricci not only has crafted wonderfully flawed characters, she has brilliantly painted in the scenery around those characters. To the best of my knowledge, the author has not lived in Spain. To my certain knowledge I've lived there for four years. So how can she be creating descriptive landscapes from all across the Spanish countryside that elicit vivid recall in my memory? How does she do that?

There is much to reflect on in "Seeing Red". And several life lessons to consider.

My favorite:

"The memories of him as a little boy have taught her that nothing lasts, that life is a flood of ephemeral moments that fly by."

In "Seeing Red", Claudia Ricci has much to say not just about the human condition, but about human beings. About ourselves.

Depression Factoid #137

2011-07-22T20:40:00.000-01:00

By Sandy Prisant

After four years of job losses, here is this week's news:

Unemployment up in 28 states in June

Washington Post, 22 July--Unemployment rates rose in 28 states and the District in June, the Labor Department announced in a report Friday. The U.S. unemployment rate is now 9.2 percent.
The unemployment rate for the District surpassed the national rate, rising to 10.4 percent. In Maryland, the rate rose to 7 percent; Virginia has a 6 percent unemployment rate.
The report also highlighted that Virginia lost 14,600 jobs in June.
Only eight states saw rates decline in June,

The New Normal: Pessimism Is the Last Taboo

2011-06-27T20:44:00.000-01:00

Editor's Note: While we to distract ourselves with Anthony Weiner or Wimbledon or even upcoming Presidential politics, none of these offer any remedy to what increasingly looks like the "new normal"for America. The facts are cold and hard. And relentless.

Here, Professor Martin Kaplan of the Annenberg School at USC, says what politicians dare not, ticks off the negative underpinnings in Year 4 of this Depression and is hard-pressed to find assets for America on the positive side of the ledger.

By Prof. Martin Kaplan

It gets worse.

If you pay attention to the news, the prospects for the future look grim. The new normal of high unemployment and stagnant wages will likely not turn out to be just a phase. The next generations may indeed do worse than the ones before them. Thanks to the Supreme Court, big money will keep tightening its stranglehold on elections and lawmaking. Financial reform and consumer protection will never survive the onslaught of lobbyists. Reckless bankers will go on making out like bandits, and the public will always be forced to rescue them. The Internet, along with cable and wireless, will be controlled by fewer and more-powerful companies. The world will keep staggering from one economic crisis to another. We will not have the leadership and citizenship we need to kick our dependence on oil. We will not even keep up with the Kardashians.

Add your own items to the list. Whatever global threats scare you -- climate change, the Middle East, loose nukes, pandemics -- and whatever domestic issues haunt you -- failing schools, crumbling infrastructure, rising poverty, obesity -- the odds are that the honesty, discipline, resources and burden-sharing required for a happy ending will not, like Elijah, show up at our door.

Sure, there's some good news around, and there are advances ahead. Gay marriage is legal in New York, and perhaps one day the resistance to it will seem as unfathomable as the opposition to women's suffrage. Technology is growing exponentially, and today's iGizmos will doubtlessly seem like steam engines tomorrow. We will some day actually be gone from Afghanistan. Justices Scalia and Thomas will eventually retire. French fries or salami will turn out to be good for us, at least for a while. Some Wall Street slimeballs will be nailed, some good guys will win elections and some little girl will be rescued from a well.

But it would pretty much take a miracle for our intractable problems to become tractable. Without one, political polarization is not about to give way to kumbaya. Cultural coarsening is not going to reverse course. The middle class will not be resurgent; the gap between rich and poor will not start closing; the plutocrats calling the shots will not cede their power. No warning on its way to us -- no new BP, no next shooting, no future default -- will bring us to our senses about the environment, assault weapons or derivatives for any longer than it takes for the next Casey Anthony or Anthony Weiner comes along.

Politicians, of course, can never say something like this. They're selling progress, greatness, can-do. The only place for pessimism in the public sphere is as a handy foil. "There are those who say that we can't solve our problems, that our best days are behind us, that China is the future. But I say...." It's a surefire applause line. But it's also a straw man. There aren't "those who say" that. Americans hate pessimism. We get discouraged, our hope flags, but predicting defeat is inconceivable. The comeback kids, the triumphant underdogs, the resilient fighters rising to the challenge: that's who we see in the mirror.

We place fatalism beyond the pale. To give up on the possibility of change, to doubt that we're up to the task, is socially aberrant. You may fear that we are doomed to be a nation of big babies: we claim to want leaders who'll face tough choices, but we punish them for actually making them. You may despair that the rationality required to face up to reality will never overcome the fundamentalism, know-nothingism and magic thinking that has a hammerlock on our national psyche. You may believe that big money and big media have become so powerful that our sclerotic democratic institutions are inherently incapable of checking them.

But you can't admit any of that. In public, we never let such darkness prevail. Instead, we work to improve things. We organize, rally, blog, join movements, work phone banks, ring doorbells, write checks, sign petitions.

We are not a tragic nation. If a leader disappoints us, or breaks our hearts, we say it's just a setback, not a sign that the system itself manufactures impotence and capitulation. If a problem festers, we cling to the belief that money, know-how and perhaps some sobering wake-up call are all we need to solve it; we don't dare entertain the notion that there's something in human nature that's causing and protracting it. If social conflict splits us, we diagnose a communication problem, a semantic setback on the road to common ground, a gap that can be bridged by consensus on facts and deliberation on goals; it's just too painful to think that tribal values impervious to rationality and insusceptible to compromise are the ineluctable driver of our divisions.

I wish I could declare my confidence in our ability to solve our problems without sounding like some candidate who just wants my vote. But ironic optimism won't do. I'm desperate for evidence that we're prepared to pay for the services we demand, or to subordinate our desires in order to meet our obligations to one another, or to reform our governance so that special interest money, filibusters and the other Washington diseases didn't sicken the system. I just wish it didn't take drinking the can-do Kool Aid to see the glass as half full.

A New Dawn for the University? Part 2

2011-06-12T15:59:00.000-01:00

Professor Claudia Ricci

Editor's Note: Professor of Journalism Claudia Ricci is a noted educator, novelist and journalist. Her latest novel is "Seeing Red" (http://www.seeingredthenovel.com) She is also a founding partner in the Wordsmith Wars blog. In the past year she has put together a custom academic curriculum at the State University of New York. It addresses a subject very much needed by students and society as we grind through the current Depression. The subject: Happiness.

Below is a piece inspired by this course work:

How I Learned to Eat A Raisin, and How it's Helping Me Learn to Do NO Thing

Not to sound too dramatic or anything, but this is a rather dangerous time of year for me. The middle of May -- when the school year comes to a screeching halt -- is usually a time when life turns into a slick wet deck and I go skating over the edge. I land in a deep dark pool and thrash around in the murky black water feeling like I'm drowning.

Nothing too dramatic about that.

It's been 13 years that I've been working as a college teacher, and for many of those years, after classes ended, I have been so depressed that I haven't known where to turn.

I am not particularly proud of this situation. People who are lucky enough to have jobs these days (and I regularly count my blessings in that regard) are generally lucky enough only to get two weeks off in the summer. Most of these people count the days until summer vacation arrives, and then they savor each of their days off, hour by hour. Most of them would kill to have a long summer vacation.

So what kind of a loser am I that I can't seem to enjoy my extended summer break? Why can't I just kick back and have fun? Why is it that the prospect of four "empty" months makes me so anxious that I often need to turn to one or more prescription drugs?

The answer to that question is complex, but simple too: I have a very very hard time doing nothing. (I can hear people screaming at their screens right about now, HEY LADY JUST GO GET A SUMMER JOB AND STOP WHINING. To all of you who are sitting at a desk at work, screaming at me, ready to smack your computer, I want to apologize and say, yes, I do realize that getting a second job is an option!)

But the issue here really is why can't I just enjoy doing nothing in particular? Why I have such difficulty with summer break is itself a long story, having to do with deep dark childhood neuroses that I won't bore you with here (never fear, though, there is always another post.)

In the past, after my May Nosedive, I've usually managed to cobble something together. I have volunteered for worthy causes, and once I ran a really cool program for a couple dozen kids down in DC. I absolutely loved that job but I haven't been able to get another program up and running here.

Generally, I busy myself with this and that in the summer: gardening and guitar, writing and painting. And of course, preparing for the upcoming fall semester. Through much of these summer weeks, I have struggled to stay ... happy. I have struggled with boredom. I have felt lost and low and hopeless. It's just rotten feeling that way.

OK, so it's that time of year again. But this year is different.

This year, I taught the happiness class and I found myself learning some amazing lessons. I think I learned as much as the students (hopefully) did.

Many of the readings for that class were life-changing. So too was the mindfulness workshop that I took, along with the students, with a wonderful teacher named Lenore Flynn. These experiences have given me enormous insight into something very basic:

how to live, each day, moment by moment, staying present and aware.

For those of you who already know what mindfulness is all about, and how it can really turn your head in a wonderful new direction-- you understand. And for those of you who are skeptical, I want to say that I truly do understand your skepticism. How can something as simple as paying attention to your breathing, and to the mundane minutia of everyday activities, possibly turn you into a very happy camper?

If I hadn't also seen it happen to many of the students, I too might be skeptical. But the fact is, paying very very close attention to the seemingly minor and unimportant matters of life is a rather revolutionary activity.

It is not an exaggeration to say that mindfulness teaches you to SEE and FEEL life and your role in it in a whole new way.

In the first mindfulness class, for example, Lenore led us in a meditation exercise as she frequently did during the workshop. But she also handed to each of us a couple of raisins. It was our challenge to NOT eat those raisins, at least right away. The task we were given was simply to appreciate those wrinkled little dried grapes in a way that we had never done before. Holding them in our hands, we had to stare at all their whitish folds. We had to study very carefully their appearance: their plump, or not so plump shapes, their size, color and fullness. We had to roll them around, feeling the squishy way they felt on our fingertips. We had to inhale the sweet fragrance of those raisins.

In short, it was our job to consider the "raisin-ness" of raisins, the very essence and nature of them. Sitting in the palm of our hand, those raisins were very tempting. But more importantly, they turned into rather profound little teachers, or at least I found that they did for me. Instead of just popping them into our mouths, we had to anticipate the pleasure that those raisins would give us. (Of course there were a few students who hate raisins, but that's another matter.)

When we were finally, after several long and drawn out minutes, allowed to place the raisins in our mouth, we still were not allowed to eat them. Instead, we had to TASTE them. We let them roll around our tongues. We savored the way those little withered grapes felt up against our cheeks. We salivated all over those raisins.

And finally, FINALLY, Lenore gave us the go-ahead and let us eat them.

You bet we tasted those raisins. You bet we enjoyed them more than we'd ever enjoyed a raisin before. I mean how many times has it taken five whole minutes to eat a raisin?

The point is, most of us rarely taste any of our food. We don't eat mindfully. We don't slow down enough to really pay attention to the look of our food. To the texture of it. To the smell of it. We don't think about the fact that many many people worked many many hours to grow that food, and to harvest it. We don't think about what it takes to prepare the meal.

Most of the time, we gobble down our meals faster than it takes for someone to boil a pot of water. I know I do, or at least, I used to.

Now, I have begun to eat more mindfully. I try to remember to say a small prayer before I eat each meal (my husband has joined me in this ritual.) I try to take a few moments to stare at the food in an appreciative way, giving thanks for the fact that I am fortunate enough to have food.

Mindful eating was just one lesson. Mindful walking was another. All 15 of us spent most of one class walking very very slowly back and forth across the classroom, thinking about walking. Paying attention to the micro movements of our leg muscles, our foot muscles. We paid attention to the way we lifted our legs, and how we set our feet down on the floor. We paid attention to the way that the floor supported us.

Mindfulness is all about paying very very close attention: paying attention when you breathe. When you eat, when you see, when you walk, when you talk, whenever you do anything. It involves taking time out to be grateful for every one of our blessings, the things we normally take for granted. Buddhist monk Thich Nhat Hanh says that each morning we wake up without a toothache is a day we should be grateful. How many of us say thanks for things like:

Having a bed to sleep in each night.
Having a roof over our heads.
Having clean water to drink.
Having a brain to think whatever we want to think.
Being able to walk.
Being able to chew and digest food.
Being able to hear birds singing.
Being able to hear lovely music.
Being able to see a gorgeous flower, or a stunning rainbow or a special sunset.

Even the so-called dirty chores of our life are, if we alter our perspective, something we can enjoy doing. Jon Kabat-Zinn, who is responsible for inventing the incredibly effective Mindfulness Based Stress Reduction program at the UMass Medical Center in 1979 in order to help people deal with chronic illness and pain (stress is a big factor in most chronic disease) writes very poignantly about how to clean a stove in a mindful way. Thich Nhat Hanh describes the joy of washing dishes, enjoying the warm soapy water on our hands.

Mindfulness isn't very complicated. It's just hard to do. It's hard to stay present. It's hard to stay grateful. It takes energy and sometimes, it takes work. A lot of work.

And so, this summer I do have a job. I have to learn to do nothing. A few days ago, I started to find myself on the edge of that very slippery deck. I started to see the way I could, without much difficulty, go slipping and sliding off the deck into that deep dark pool.

But now I've got a new set of tools, including a book (I didn't use in class) that Lenore Flynn loaned me. It's called Radical Acceptance, by psychologist Tara Brach.

I highly recommend this book to anyone who has, like me, trouble slowing down and doing NO THING.

Brach describes in great detail the value of what she calls the Sacred Pause. Stopping, whether for a moment to check in with how we are feeling, or for a day, to contemplate life, or for a season, to take a sabbatical -- all of these are profoundly important activities.

Pausing is, after all, an edict of God's: the Sabbath is a day of rest, a day to stop DOING, and celebrate BEING. That's why, in the old days, stores would close on Sundays, so people everywhere could just sit and enjoy a big family meal.

Brach also preaches, as the book's title suggests, radical acceptance, that is, she suggests that we accept everything about ourselves, be it our unattractive noses, our straight (or curly) hair, our hips, our aging bodies, all of our shortcomings. That's not to say that we settle for all of our faults. But we have to start by accepting who we are, and embracing everything about ourselves, all the "shadow" parts of our personalities that we would just as soon tuck into the closet. It isn't until we embrace ourselves fully that we can begin to make the transformations that we need to make.

She isn't the first writer to discuss the shadow self. Carl Jung coined the term many years ago. Many have written about it (Deepak Chopra has a great book, The Shadow Effect, on the topic, one of my students did her class presentation on it.)

Brach's approach to the shadow is wonderful and compelling. She suggests that sll of us want so much to be loved and accepted that we try to bury our dark impulses. We try to "ignore our anger until it becomes knots of tension in our body; cover our fears with endless self-judgement and blame." (54)

"Our shadow," Brach writes, "is rooted in shame, bound by our sense of being basically defective."

The solution? Stop running away from the dark side. Brach tells a wonderful tale to illustrate her point: "A traditional folktale tells the story of a man who becomes so frightened by his own shadow that he tries to run away from it. He believes that if only he could leave it behind, he would then be happy. The man grows increasingly distressed as he sees that no matter how fast he runs, his shadow never once falls behind. Not about to give up, he runs faster and faster until he finally drops dead of exhaustion. If only he had stepped into the shade and sat down to rest, his shadow would have vanished."

It is with some shame that I admit to my shadow: I admit that I have a desire to be incessantly busy, staying so fully (and sometimes frantically) occupied that I cannot stop and sit and do NO THING. I keep busy so that I remain distracted from what my husband calls the "existential dilemmas" posed by life.

A big part of my "job" this summer is to step into the shade, and rest in the shadow. And use the mindfulness techniques to embrace the moment and contemplate why the shadow has had such a fierce grip on my life.

Mostly, I am hoping that I can learn to do NO THING and have that be OK. It's not that I won't do stuff. Of course I will (and I'll inevitably write about it, because I can't help myself.)

It's just that I want it to be acceptable, and sufficient, to do nothing at all, and simply enjoy the many beauties of summer.

The US Economy: Everything You Need to Know

2011-06-05T12:37:00.000-01:00

By Sandy Prisant

Have you noticed that house prices are the lowest in 9 (nine) years? Do you understand that the American worker's earning power has not risen a jot in a couple of decades? Do you know there is no record of any politician in the past 4 years who has offered any specific plan or program that would guarantee creation of one single, new American job?

Are you aware there is at least one Depression each century? And that there are boatloads of economic statistics that demonstrate we are in about the 4th year of what is likely to be a classic 10-year Depression?

If so, you need not waste time following the monthly grind of house prices, jobless claims and GDP numbers, because not very much different or better is going to happen over the next five years.

History teaches us clearly that government cannot by itself pull us of this slump. It also teaches that the private sector only hires when it needs, because of increased demand and new orders--not because of irrelevant changes in the tax base or accounting rules. We need a fresh economic engine to drive us forward. Hitler provided such an engine. Osama did not. The effect: Today one in five Americans are either out of work or can’t find meaningful work right now.

Read Robert L Borosage's analysis of the real issues below and why we need an honest examination. Of ourselves and our future.

This is a classic "small d" democratic moment. The economy is in deep trouble -- immediate and long term. Washington is oblivious, compromised by moneyed interests, knotted by ideological divides. It will take an angry and aroused citizens' movement to demand the debate worthy of a great nation in deep trouble.
The dismal jobs numbers only punctuate the reality of an economy that isn't producing sufficient jobs. The crisis is both immediate and long-term. The so-called recovery hasn't begun to recover the jobs lost in the Great Recession. 25 million people are in need of full time work. Home values continue to fall. 25 percent of 17- to 25-year-old high school graduates not in college are out of work. Much of a generation is at risk.
The immediate is only an expression of more profound problems. The middle class was losing ground before the Great Recession. Good jobs are being shipped abroad. Wages aren't keeping up with the costs of basics. The broad middle class that made America exceptional is disappearing. The American dream seems ever more like a nostalgic memory. The nation continues to run unsustainable trade deficits, and must dig out of a mountain of debt -- both public and private. For the first time, an increasing majority of Americans fear their kids won't fare as well as they have.
We need action to put people to work. But short term fixes aren't enough. Americans are looking for a serious strategy that will get us out of the mess we are in.

The Beltway Bloviating
But inside the beltway, Washington is clueless. It's the only major city in the country where housing prices are going up. A flood of corporate lobby money insures that the tables are full at the high end restaurants. Entrenched corporate interests buy a lot more than lunches with their dough. They block vital reforms on health care, energy, trade, Wall Street. They feed off taxpayers, protecting their subsidies and tax dodges, avoiding taxes, while deficits rise and essential programs like nutrition for infants get cut.
The politicians prefer posturing to bold action, "message" and "spin" to leadership. Republicans even with the majority in the House are focused on obstruction. They vote for more tax cuts for the wealthy and corporations, paid for by ending Medicare and Medicaid, hiking costs for those least able to pay -- seniors, the disabled, the dying. They vow to blow up the economy if they can't get a deal on trillions in domestic spending cuts, accompanied by more tax breaks for the wealthy. They're lining their campaign coffers carrying water for the big banks against even minimal reforms.

The adult Republican presidential candidates like Mitch Romney claim they can get the economy going and create jobs. But they only recycle old and failed nostrums. More tax cuts for corporations who are already sitting on over a trillion in cash waiting for customers. More tax cuts for the wealthiest, who already have the most concentrated income and wealth since the eve of the Great Depression. More corporate trade deals that ship goods jobs abroad, undermine wages at home, and force up to borrow over a billion a day from abroad to balance the deficits. Less regulation when we haven't recovered from the catastrophe caused by the excesses of deregulated Wall Street. They pretend they can balance the budget and put people to work by cutting domestic spending, cutting taxes, increasing spending on the military, and not dismantling basic promises like Medicare and Social Security. They and everyone else knows that is a lie.

The White House offers no clear way out. The president wants to hail the successes of an economy that isn't working for most people. Yes, his policies saved us from free fall -- thanks, but we're worried about what we face, not where we've been. He sensibly calls for "winning the future" -- making investments in areas like education, innovation and infrastructure. But he's locked himself into austerity, focused on cuts, and offering no big vision of how we move forward. He's more sensible than the tea party zealots, but remains unwilling to tell Americans what needs to be done and that fight for it.

The Democrats in the Senate are a babble, too divided to deliver a message. The House Democrats are cowed by the losses in 2010, too worried about being accused of being "big spenders" to lay out a course to get the economy going and put people to work.

And few seem ready to put out a strategy that necessarily will take on the interests that are strangling the dream. A national trade strategy that isn't controlled by multinationals. Affordable health care not catering to private insurance and drug companies. Fair taxes that shut down the tax havens, the dodges, the obscene subsidies that drain our resources. An investment strategy that generates vital public and private investment, not more Wall Street speculation, or CEO incentives for laying off workers and plundering their own companies.

It will take a popular uprising to get Washington even to begin to focus seriously on jobs and the economy. We've seen this before. There was a bipartisan consensus on the Iraq War until a growing movement forced first Democrats and then the Bush White House to face reality. The Washington establishment was drunk on slashing Social Security and Medicare to address deficits, and Republicans embraced gutting Medicare, until popular disapproval expressed both in the polls and in the special election in upstate New York sobered them up a bit. The anger expressed by the Tea Party minority still has Republicans in Washington reeling.
Now we need the people to speak again. This time for the American majority. We aren't buying the old conservative elixirs. The New Dem-Republican lite embrace of half measures and conservative cross dressing isn't acceptable.

Washington has to hear a clear message. We elected you to get this economy going, not gut Medicare. We want to know how you will create jobs. We don't want to be served the old tired babble. We know we can't simply cut our way to prosperity. We know we need a major change in our global strategy. We know we've got to make investments vital to the future -- in education and in innovation. We know this economy needs major reforms. Anyone not willing to challenge the corporate interests that are strangling change isn't serious. We know it is hard to focus on creating jobs when deficits are this high. We know we'll have to sacrifice, but we're not broke -- we don't have to break promises to our kids or our parents. And don't ask the victims of this economy to sacrifice when those making out like bandits are given a pass. We know once the economy is moving, taxes have to go up and spending has to be brought under control. So stop the nonsense of no tax hikes. Tell us what you will cut and why. Don't pretend choices don't have to be made.

So lay it out. How do you put people to work, change our economic strategy so we begin once more to make things in America and create good jobs, not poverty wage jobs? How does that relate to getting our books in order and our priorities straight? Give us a debate worthy of a great nation in deep trouble.
In August, after Washington reaches an inevitable deal on lifting the debt limit after weeks of posturing and bluster, of an idiotic debate focused on what to cut rather than how to get the economy going, legislators will return home for recess. They need to hear from us.

Robert L Borosage is President of the Institute for America's Future.

Needled

2011-05-29T20:40:00.000-01:00

By Prof. Claudia Ricci

Editor's Note: Professor Ricci is a noted novelist, journalist and educator. She has taught and created programs at Georgetown University and the State University of New York. Dr Ricci is a founding collaborator in the Wordsmith Wars blog.

At the worst moments of the chemo, after she throws up into the basin, and forces herself to eat some cherry jello and maybe a few bites of banana, Anna plays the flamenco, drifting perhaps into a soleares, a sweet lament that starts slow and then pulls up tempo. And when the soleares stops working, and no longer transports her, she shifts to a tango or even, a fandango.

And then comes the day that she steps inside the doctor’s office in the black and red satin dress. It rustles as she walks, and the luscious tail of the bata de cola trails behind her. Anna picks up a fistful of ruffles in the train, and enters the examining room. Her nailed shoes, tied at the ankles in ribbons, clatter on the waxed floor. Her black hair is sleek, almost wet looking, pulled tight to her head and knotted at back in a donut. She hugs a black lacy shawl to her shoulders and in her free hand, she is pumping a red flowered fan.

The nurse enters behind her. Oblivious. She opens Anna’s medical file –three inches thick—and asks Anna to step on a scale against the wall.

“Must I?” Anna sneers. The nurse hesitates.

“Must I get the doctor?” the nurse asks.

Anna’s eyes narrow. Still holding the ruffles, she steps on the scale, and the nurse records Anna’s weight.

“Remember to subtract for the dress,” Anna says.

The nurse starts to say something. Stops. She asks Anna to turn around and stand against the wall. Anna sighs, then swivels. As she steps against the wall, she lifts her head with all the dignity of a Castilian queen.

“Five feet ten and one half with those heels,” the nurse says, wrinkling her nose ever so slightly as she eyes the shoes. Then she turns to Anna’s right arm. “Now, how about the veins today? How are they?”

“My veins.” Anna pauses. Sneers. “Are the same as always.”

Thrusting one arm overhead in the manner of the great bailoras, Anna locks herself in the dancer’s stance. She looks as if she could be plucking a ripe Seville orange off a tree. Twisting one wrist, she pulls the imaginary lush globe of fruit tightly to her bosom.

“I am glad you are so limber, Anna.” The nurse crosses her arms. “But would you mind sitting down? This will go a lot faster if you do.”

Anna glares, sits down and arranges the dress around her. Then she thrusts one arm forward, exposing a pale blue vein.

“That one looks like it will work,” the nurse muses, reaching up and snapping one finger against the inside of Anna’s arm.

“Please,” Anna snarls, pulling her arm back. “Please be gentle.”

“I’m sorry,” the nurse says. Her voice softens. “I really am sorry.”

Anna turns away, as if the nurse’s sudden kindness has made it so much worse. “Do you know how many times that my arm has been needled? Do you realize what you do to me every week? And do you realize how important these arms are to my dance?”

The nurse bites her lip. “I’m sorry. I forget sometimes. I know there are days when…when they, when we…have…considerable trouble getting in.”

Anna draws her shawl closer around her shoulders. A single tear dribbles out of one eye. She ignores it and sitting up straighter, she lifts her chin in the manner of the Iberian royals, casting a decidedly unfriendly glance at the nurse. Then she thrusts her arm forward again.

The nurse anchors Anna’s arm on the armrest and prepares the needle. “Here we go,” she whispers. Anna flinches as the needle passes into the crotch of her arm, but the nurse has tight hold of her hand.

At first Anna and her pert red lips turn away, but soon she can’t help herself: she is tipping backward to look, drawn to staring at the syringe, particularly the small butterfly spread of sky blue plastic attached to the needle. Anna brightens. “Ah, you see, my fan has blue butterflies too.” She flicks open her red fan again with her right hand, showing off the intricate design: a red background, swatches of yellow and orange flowers and blue and black butterflies dancing here and there.

The nurse glances at the fan, but is more preoccupied with the needle. She jiggles it. “I think this vein may be blocked.”

Anna blinks. Looks away. As the nurse pokes the needle in further, Anna’s eyes open wider and begin to water. Then she rapidly fans her face. The fan is a hot blooded color, and the blue of the fan’s butterflies is exactly the same blue as the butterfly of the needle, the needle which the nurse is now pushing even deeper into Anna’s skin.

“Oh Dios mio, PLEASE NO!” Anna yelps. Her face is chalky and as sweaty as it is when she dances the farruca.

“I am sorry I am hurting you, Anna, I really am.”

Anna sighs. Keeps fanning. “Yes, I should say so.” Her voice breaks. She fans faster. “How much longer must this go on?” She chews into her lower lip, and her teeth pick up some of the berry-colored lipstick glazing her mouth.

The nurse wiggles the needle ever so slightly. She sighs. Exhales. “It’s just that I have to get a blood return on this one, and I’m not getting it.”

Anna closes her eyes and stops fanning. At moments like these, when it gets particularly difficult, she always resorts to intense mental rehearsal: she goes through the newest alegria in her head. She can count it better than the seguiryas, or even the sevillanas or the malaguena.

She starts counting, but a moment later, is interrupted. The nurse sighs, slides the needle out. “I guess this

one won’t work,” she says. “Sorry.” She applies a tiny circle of a bandaid over the hole left behind in Anna’s

arm.

“I’m going to have to get some back up. See if someone else can help.”

Anna blinks. “Yes, well, and I think I am going to need my prescription now,” she mumbles, her fingers trembling slightly as she reaches into the ruffled bosom of her dress. Inside is a tiny vial of pills. Before the nurse can say anything, Anna has two tiny white pills in her hand and she is popping them under her tongue. “This will help.”

The nurse looks embarrassed. “Look, I am really sorry to put you through this. But I …”

“…But I don’t want to hear it,” Anna says curtly. “I really don’t want to hear it.” She smiles her thinnest, tightest grin. “Just go ahead, please, find someone. Someone who won’t hurt me. And get it over with.” Anna inhales, saying a small prayer that the pills will work their miracles once again.

The nurse leaves and returns almost immediately with another nurse. A young man. Slim and very tall and dark-skinned. He smiles and Anna looks into his eyes and her first thoughts are, he is not at all handsome, but he is very kind. And he would make a suitable partner.

He takes Anna’s hand and for a moment she expects him to kiss it. But he simply rubs his long brown fingers over the surface of her skin. “I hear we are turning you into a pin cushion today,” he says very quietly. The way he says pin: peen. And cushion: cooshun. His accent is…what? Latin? Indian? Iranian? She cannot tell, and well, what does it matter? He grows more handsome by the moment.

He keeps sliding his fingers over the back of her hand. “So how are the veins here?”

Anna closes her eyes, smiles, and gracefully pulls up her hand. Her blood red nails glitter. “My hands…are magnificent,” she whispers, opening her eyes again.

He smiles, bashfully. Anna notices the intense silkiness of his black hair. The giant oily pearls that are his eyes. She sighs. The other nurse, who is standing in the corner of the examining room, arches one eyebrow, then turns and leaves the room, making the door smack shut as she goes.

The young man looks up. Meets Anna’s eyes. Clearing his throat, he takes Anna’s outstretched hand and pulls close to examine it again. “Well, these don’t look as ravaged as the ones in your arm. I see what these treatments have done to torture your poor arm.”

“Ah, and not just my arm,” Anna shoots back. Her voice croaks. The man lifts his eyes and Anna returns the look. In it is an odd combination of fire and ice. Sorrow and fatigue. Fortitude and resignation. Pride and shame and mostly, relief. She watches in silence while he proceeds to wrap a rubber tourniquet around her wrist, making the veins in her hand bulge slightly.

“So, would you mind if I played my CD?” Anna asks, her eyelashes fluttering. Her vision is beginning to swerve. Hard shapes and straight lines are turning to butter.

“Oh, no problem,” the nurse says. “Do you need help?”

“Not a bit,” Anna says. “I have done this all before.” She uses her free hand to reach into a satin bag for a pair of headphones. One-handed, she slips the headphones over her sleek hairdo. By now there are several stray black hairs at her moist brow. Anna switches on the CD player and so, when the needle vanishes into a vein in the back of Anna’s left hand this time, she is listening to a cantaor singing a woeful tale of his lost gypsy.

Anna closes her eyes as a bailora joins in, dancing in the background; there, now, she can hear her feet clacking rapidly on wood. Besides that, there is a set of castanets rattling and a clang of the martinetes, the ironsmiths’ metal hammering against metal. The cantaor’s voice rings up to a prolonged trill just as the young man gets his blood return.

“That will do it,” the young man says, filling a small clear tube with Anna’s ruby blood. “Now we just need to put the radioactive tracer into the vein and we’ll be all set to do your scan.”

Anna looks up from her CD, a docile smile on her lips. Her head feels loose, as if it coming unattached from her shoulders, which are now bare of the shawl. The fan sits closed up in her lap. She blinks, sinking ever deeper into the music.

“Did you know, young man, that duende eases all of our pain?” She whispers this, and her words are slightly slurred. He nods.

“Please,” she says. “Please state your name?” He hesitates.

“Arturo.” He pats her hand once more and starts to pull away. Anna wants to hold his hand there, but her grip comes too slow. He leaves the room, and she goes limp, sinking listlessly into her chair. The pills have taken hold, no doubt, because now she is yawning, and smiling broadly, and dancing on a brightly lit stage that is rising into the air. She laughs. After all this is over she will call her sister, Margarita, and tell her this: that it isn’t hard to dance when you are rising toward heaven, because there you can freely pluck oranges and apples from the Garden of Eden. And because you are on chemo, and because everyone feels sorry for you--even God—He doesn’t care one bit that you are there stealing His fruit. And eating it right there in the Garden.

Anna laughs. When the tall young man returns with a small lead box, the one that contains the radioactive isotope, she reaches out to take his hand. He puts the box down and staring hard into her eyes, he readily accepts her hand – and his role in the dance.

Anna watches him, a placid smile on her lips. And then the music turns fiery, and the moment comes. The stage clears and he steps into the white circle of light. His elbows lifted to each side, and his narrow hips immobile, he tips his head back proudly and begins pounding his heels in perfect unison with the compas, the rhythm of the music. Ah but what a pair of legs Arturo has, thundering now against the floor. Yes, she thinks: he is more talented than any partner I have had before.

Now it is her turn to spin: the young man reaches out one hand to her. Mustering all of her grace and dignity, she lifts herself off the chair and thrusts her torso forward. Her bosom swells fully into the satin fluff and ruffles. Moving slowly at first, she begins swiveling and tapping, all the while holding one armful of ruffles at her hips. The other arm stands overhead. Her movements quicken, and soon her hips are twisting, and her feet hammering like a sewing machine. And there, there are her wrists and fingers, all bent at odd angles, giving her hands the look of branches, branches on an orange tree, a tree from which she always plucks her imaginary fruit.

She pauses, out of breath. The two of them –she and her amazing Arturo. They are holding hands, and now, suddenly, they are bowing. Surely it cannot be over already? Together they occupy the stage light. Staring blissfully into the darkness behind her eyes, she feels her heart pump as quickly as her fan, as the young man whispers “Anna, you were just wonderful.”

“Thank you,” she whispers back. And then she waits, patiently, for all the clapping to stop. And for the needle to be withdrawn and for the curtain, finally, to fall on all of this.

Dancing.

The End

A New Dawn for the University? Part 1

2011-05-24T13:27:00.000-01:00

Editor's Note : When the Egyptians created the first university over 1000 years ago--Al-Azhar in Cairo--it was envisioned as a place for advanced academic instruction, disciplined thought, debate and meditation on the student's relationship to society and the world around him.

Then something went wrong. Everything shifted towards corporate internships and a straight line between a 4-year degree and a 5-6 figure salary. Effectively, your entrance exams became your first job interview.

Today, the increasingly desperate marketing of colleges notwithstanding, we all know the truth. That straight line has been broken. The commercial value of a degree is now dubious. But that may be a good thing.

It may mean that serious Universities can resume a traditional non-career-based role as institutions where we learn about ourselves, our society and how to think more clearly about issues more profound than resumes. This could be a silver lining in a world where there will never again be enough jobs.

The University, at least, may be allowed to get back to its earnest, erudite, creative roots. Back to Cairo in the 10th century.

Case in point: Professor of Journalism Claudia Ricci is a noted educator, novelist and journalist. She is also a founding partner in the Wordsmith Wars blog. In the past year she has put together a custom academic curriculum at the State University of New York. It addresses a subject very much needed by students and society as we grind through the current Depression. The subject: Happiness.

Here's the course prospectus:

ERDG 491Z -- University at Albany, SUNY

Professor Claudia Ricci, Ph.D.

READING & WRITING THE HAPPIER SELF: Spring 2011

Reading and writing transform the way we think, and how we see ourselves in the world. Neurological research now shows that changing the way we think can produce positive physiological changes in the brain. At a time when an epidemic of mental health issues plagues our nation, and threatens to paralyze students in the academy, this class presents a set of cognitive tools and practical skills that will help students refine and enhance their educational goals while examining a broad range of life issues. Beginning with philosophical ideas set forth by Aristotle, the class will rely on texts from psychology, neuroscience, literature and narrative theory, to open up discussions about the patterns of human behavior and thinking that tend to produce lasting fulfillment and deep reward. In keeping with research by psychologist James Pennebaker and others who have demonstrated the value of expressive writing, students will engage in extensive journaling and other self-reflective writing assignments as they seek to define what it means, and what it takes, to find happiness. Part of the work in the classroom will be to help students identify their individual “signature strengths” that can produce what positive psychologist Martin Seligman defines as “authentic happiness and abundant gratification.” In addition to classroom work, a special two-hour laboratory session, with attendant readings and writing exercises, will be required each week; students will work with experts in mindfulness, meditation, yoga, spirituality and stress reduction, and will document how these techniques can help the student better cope with the inherently stressful nature of University life.

In the coming days, Professor will be posting blogs that draw on the techniques and outcomes of her first Happiness curriculum.

Competition: Guess the State!

2011-05-09T18:01:00.000-01:00

By Sandy Prisant

I live in a state that is certainly not timid in its approach to this Depression--and its future. Within the past year alone here are some of the things my fellow citizens have done. From these clues, can you...

"Guess the State!"

As our new Governor, we elected the primary unindicted co-conspirator in the largest Medicare fraud in US history.

We entirely neutered the Democratic party, throwing them out of every single statewide office.

We elected overwhelming GOP majorities to both houses of our legislature, leaving no checks and balances.

Still hewing to 19th century policies that limited most state legislators to very short sessions--on the premise that any politician can only be trusted for so many days a year--our legislature is only allowed to meet for 60 days/annum.

But that did not hinder our representatives and unindicted governor from a breathtaking set of legislation in the term just completed, to help our citizens through this Depression. Among the most notable new state laws:

Reduce unemployment benefits to under 6 months, even though we have one of the worst unemployment rates in the country-- a third higher than the national average.
Total new job creation programs proposed or passed by lawmakers all running on a job -creation platform: Zero.
Specifically use the benefits taken from the unemployed to deliver significant tax cuts to 30,000 corporations.
Proposed elimination of the State Development Agency.
Cut funding to education across the board in a state that tests near the bottom.

Dismantle Medicaid, ignoring the Federal mandate requiring 90% of funds go to patient services, choosing instead to share $1.1 billion in
patient funds as profits with managed care companies. (According to the New York Times.)
Total new jobs created by lawmakers all running on a job-creation platform: Zero.
Reversed thirty (30) years of state environmental legislation
Defied the state constitution by making the state Supreme Court a servant of the legislature--permanently ending checks and balances.
Passed all three priorities of the National Rifle Association.
Assaulted democracy through new restrictions to actually reduce voting days and hours in all elections.

What is this enlightened state, beholdened only to corporations, party pros and gun owners? Send your answer to Wordsmith Wars. And pray for the 95% of my state's citizens whom are not rich.

Competition: Guess the State!

2011-05-09T18:00:00.000-01:00

By Sandy Prisant

I live in a state that is far from timid in its approach to this Depression, the fate of it's citizens, or its future. Within the past year, here are some of the things my neighbors up and down the state have done. From these clues, can you...

"Guess the State!

As our new Governor, we elected the unindicted chief executive in the largest Medicare fraud in US history.

We entirely neutered the Democratic party, throwing them out of every single statewide office.

We elected overwhelming GOP majorities to both houses of our legislature, leaving no checks and balances.

Still hewing to 19th century policies that limited most state legislators to very short sessions--on the premise that any politician can only be trusted for so many days a year--our legislature is only allowed to meet for 60 days/annum.

But that did not hinder our representatives and unindicted governor from a breathtaking set of legislation in the term just completed, to help our citizens through this Depression. Among the most notable new state laws:

Reduce unemployment benefits to under 6 months, even though we have one of the worst unemployment rates in the country-- a third higher than the national average.
Total new job creation programs proposed or passed by lawmakers all running on a job -creation platform: Zero.
Specifically use the benefits taken from the unemployed to deliver significant tax cuts to 30,000 corporations.
Proposed elimination of the State Development Agency.
Cut funding to education across the board in a state that tests near the bottom.
Cut 5,000 jobs in the public sector

Dismantle Medicaid, ignoring the Federal mandate requiring 90% of funds go to patient services, choosing instead to share $1.1 billion in
patient funds as profits with managed care companies. (According to the New York Times.)
Total new jobs created by lawmakers all running on a job-creation platform: Zero.
Reversed thirty (30) years of state environmental legislation
Defied the state constitution by making the state Supreme Court a servant of the legislature--permanently ending checks and balances.
Passed all three priorities of the National Rifle Association.
Assaulted democracy through new restrictions to actually reduce voting days and hours in all elections.

What is this enlightened state, beholden only to corporations, party pros and gun owners? Send your answer to Wordsmith Wars. And pray for the 95% of my state's citizens whom are not rich.

US Shock: Treasury to Exempt Regulation of Forex Derivatives That Caused 2008 Freeze

2011-05-04T19:14:00.001-01:00

By Sandy Prisant

Editor's Note: Over 60% of Americans believe the US is headed in the wrong direction, but they have no sensible idea why. Please read the piece below by Avery Goodman in Seeking Alpha and understand why the end of Osama Bin Laden is not the end of our problems:

Under the requirements of the Dodd-Frank legislation, all FX swaps and forwards are supposed to be reported to a swap data repository or, if there wasn't one, to a regulator like the U.S. Commodities Futures Trading Commission (CFTC). The regulator is supposed to investigate irregular activity. Foreign exchange forwards and swaps represent about $50 trillion in nominal value of a total derivatives market of almost $600 trillion. Unfortunately, Congress gave some leyway to the U.S. Treasury to exempt some derivatives from regulation. If the U.S. Treasury has its way, FX swaps and forwards will not be regulated, and trillions of dollars of interest rate swaps and OTC forward contracts are almost certainly going to be restructured into the form of FX swaps and forward contracts, defeating the purpose of Congress.

Regardless of what the U.S. Treasury claims, FX swaps and forwards are high risk derivatives and were one of the primary reasons currency markets froze after the demise of Lehman Brothers. That freezing, in turn, was part of the cause of the 2008 Financial Crisis. The Federal Reserve established emergency currency exchange swaps with many foreign central banks in the hope of stabilizing the world financial system because of an alleged "shortage" of dollars. We thought that doing it was a mistake. We still feel that way. However, there are other people whose opinions we respect, who think otherwise. They think it was the correct decision.

Correct or not, those emergency lines of "credit" were established because European banks could not find enough dollars to make their payments under these type of derivatives because most of them bet on a declining dollar. The U.S. claims that there is no need to post performance bonds at a clearing house like the CME and Ice exchanges. While the exchanges are certainly not perfect places, and we have critiqued them heavily in the past, they are better than the extreme instability that follows the OTC market for derivatives.

Yet, according to the Treasury, it is too problematic to post performance bonds. Indeed, the Treasury says that no bond is needed to insure performance. But, if no bond is needed, why would a clearing exchange force banks to put up anything more than the most nominal bond, if any at all? After all, isn't it a no-risk FX swap or forwards contract? However, that isn't going to happen, because it isn't true. The exchanges would require substantial performance bonds on these type of derivatives. They are highly risky, and other clearing members prefer not to be bankrupted, or at least "lose their shirts" because of the capricious gambles of other banks.

Performance bonds are just a small part of the story. Even more important is the fact that by exempting FX swaps and forwards, the Treasury defeats the so-called "Lincoln" provision of the Dodd-Frank legislation. Swap dealers are supposed to get " No Federal assistance" including "loans" from Federal Reserve credit facilities, discount windows, emergency lending facilities etc. can be provided to any "swaps entity." If FX swaps and forwards are exempted, financial institutions that write them will have full access to the Federal Reserve (a/k/a big bank slush fund) at the ultimate expense and risk of the taxpayers of America. That is probably what this exemption is all about.

Being able to access Federal Reserve funding will allow swap dealers, such as the biggest banks with the most systemic risk, to engage in high leverage derivative writing. When backstopped by the Federal Reserve, such derivatives allow sophisticated entities to control cash markets that trade the underlying product. Levels of leverage that are typical in OTC and even exchange traded derivatives have been illegal in the cash stock markets since the Crash of 1929. Not in the derivatives markets. A tiny amount of collateral can buy control over a huge swath of the market, especially when the leverage is infinite, as it is when you aren't required to post any bond at all. If you are backed up by the ability to access the Federal Reserve lending windows, then its bombs away! You can do whatever you want, makes tons of money temporarily and, when the gamesmanship finally blows up in your face, you can shift the loss to the American taxpayer, while you retire to a nice island in the Carribean.

Changes to prices created in derivatives enter the cash market by way of arbitrage. Consequently, dealers in derivatives who have access to a large source of backstop money have the power to manipulate the value of all assets, including stocks, bonds, commodities, precious metals and currencies, at least in the short run. The changes in psychology that repeated short term manipulations can induce, will also profoundly affect the long term perception of various assets, unless most market participants become aware of the manipulated nature of the pricing structure.

Most market participants do not understand the interaction of derivatives and cash markets. Most believe, for example, that they can predict future market behavior by carefully crafting elaborate technical charts and graphs using historical pricing data. This could work, in theory. However, in practice, blind adherence to charts results in deep losses because technical analysis in cash markets cannot fully account for the interference from small numbers of market participants, playing in derivatives, who use a very small amount of assets to create large marking-moving price fluctuations in the cash markets. If they can be backstopped by the Federal Reserve, as they will be, with respect to FX swaps and forwards, if they are exempted from Dodd-Frank, there is no end to the mischief they can create with no long term adverse effect on themselves if they screw up.

A case in point is the so-called "Flash Crash." According to the U.S. Securities & Exchange Commission (SEC) report, it was precipitated by heavy buying of short positions at the CME Group's mini-S&P 500 futures on May 6, 2010. In response, the Dow industrial average plunged by 900 points, and a similar plunge in the market as a whole. Just one investment fund wanted to hedge stock positions, and its brokers sold too many Mini-S&P 500 short contracts at one time. The cash market was not aware of what was happening, and responded with panic. Many market participants erroneously concluded that massive selling was happening in the real cash market by persons holding real stock positions, a lot of market makers withdrew in fear of big losses, and everyone began dumping equities. Not mentioned in the official report is the fact that stock prices collapsed until a mysterious "force" began to buy huge numbers of long mini-S&P contracts in sudden and concentrated pulses, without regard to the losses that such buying habits would give to a profit-oriented entity. Cash markets recovered almost immediately as this buying "force" rescued the mini-S&P 500 derivatives market.

There is yet another concern. Exclusion of FX swaps and forwards from transparency and clearing requirements, applied to other derivatives, will cause banks to restructure interest rate and credit swaps as foreign exchange swaps or forwards. A notional amount of about $450 trillion dollars worth of interest rate swaps are now floating around in the world, for one example. If even a fraction of those are converted to exempt FX swaps and forwards, tens or even a hundred trillions or so of non-transparent, inherently unstable derivatives will hit the Street, with no performance bonds to insure compliance. We have written, in the past, critiquing the game of strategically changing performance bonds levels to achieve desired prices in precious metals. However, requiring no performance bond at all, and having no ostensibly "third party" entity to hold them, is an even greater folly.

The potential for instability is enormous. If banks can issue FX swaps and forwards that are not subject to Dodd-Frank, they will be able to hide this activity from shareholders and regulators. Enormous and irresponsible risks are sure to follow. We've already seen this in the past. The legislation was meant to change the sitution. With this new Treasury initiative, change will be torpedoed. Large banks have not been broken up. They are even bigger than before. If they were perceived as "too big to fail" back then, they are certainly too big now. U.S. Treasury action seems guaranteed to insure that private profits will, yet again, be pocketed by bank executives, while private losses are socialized by being shifted to taxpayers and savers in the U.S. dollar denominated investments.

As we noted, earlier, the need for the opening of Federal Reserve swap lines in 2008/2009 was partly the result of FX swaps and forwards which drained U.S. dollars from banks in Europe. The next freeze could involve these same instruments draining foreign currencies from American banks. There is no guarantee that foreigners will be as kind to us as we were with them. The World Financial Crisis of 2008 was not caused by sub-prime mortgages, but by the triggering of derivatives. When the contingency of massive mortgage default occured, credit default swaps were triggered. The hoarding of dollars by banks who needed to pay off on these obligations sapped demand from other areas of the economy. A massive shock to the system that could not be slowly and laboriously healed occured. Non-reportable credit default swaps are a similar threat.

The risk is simply too great to be allowing banks to engage in non-reportable, non-marginable activities, especially when they will be allowed to obtain sponsorship of the Federal Reserve in their speculations. Yet, Mary Miller, Assistant Treasury Secretary for Financial Markets, has tried to explain that this will not be a problem. She says that the CFTC has anti-evasion authority, and that will prevent financial institutions from using exemptions to evade derivatives regulations. That doesn't make sense. As long as the bank employees have decided that whatever they've structured is an exempted "FX swap" or forward, they won't need to report it. How, then, can the CFTC hope to spot evasion? Identifying restructured transactions will be impossible. The agency will never even know that a transaction took place.

Allowing banks to retain the ability to make mistakes that put the entire world financial system into jeopardy is a big mistake. Transparency and accountability that were supposed to enter the world of OTC derivatives, as a result of Dodd-Frank, will be replaced by opacity. Opaque transactions invariably are a recipe for corruption, and behind-the-scenes manipulations. Allowing the U.S. Treasury to exempt deliverable foreign currency swaps and forwards gives us more darkness, when the financial system is in desperate need of light.

From a practical standpoint, once this proposal becomes a regulation, as it probably will, currency market traders will need to deal with the consequences. We may see greater short term dollar stability and/or currency exchange value increases than would otherwise be expected after QE-2 ends if the Treasury encourages the banks and Federal Reserve to enter into the type of FX swap and forward transactions that help dictate that result. This desire to manipulate currency markets may well be why the Treasury support the exemption.

Without that, we will probably see a big increase in currency volatility right away. But, even if the banks do as the Treasury would like, and help stabilize the dollar from collapsing, with such swaps and forwards, the pay back will be heavier volatility in the long run, once the instruments mature. In any case, U.S. regulations tend to affect almost all banks, all over the world, since most are involved, in some way or another, with the American financial system, due to current U.S. economic dominance. Exempting these derivatives means foreign banks, which are not as influenced by U.S. government policy regarding the dollar, to restructure other types of derivatives.

The main result is that the shadow world of derivatives will get yet another "pass" from the need for transparency and regulation. Traders can expect to deal with much greater currency volatility than ever seen before, and regular citizens will need to deal with this too. With this exemption, instead of adding stability as it was intended to, the net effect of Dodd-Frank will be greater instability. Tens or even hundreds of trillions of notional derivatives are going to be restructured to become exempt FX swaps and forwards. These have the potential to profoundly destabilize the cash currency markets in ways that we cannot fully anticipate. A bigger crash than the one in 2008 is ahead and market participants should begin preparing for it. It is no longer a matter of "if" but only of "when."

Safe Nuclear does Exist, and China is Leading the Way with Thorium

2011-03-26T14:30:00.000-01:00

By Sandy Prisant

Editor's Note: Events this month may not just set back Japan by a decade; they could set back the planet by a century. We accept wars, plagues, auto mayhem and gun violence that kills tens of thousands annually, without a blink. The thought of one nuclear worker effected by radiation causes a collective swoon by all civilization. Have we lost our minds? Our sense of reason? We have been bombarded with fear-mongering about Japanese radiation for two weeks--yet only two workers have been treated. Meanwhile no one gives thought to the toll from the earthquake and tsunami--over 10,000 dead and thousands missing..

In short, we seem incapable of even examining rational energy policy--even when Middle East turmoil leaves the entire oil market wildly unstable. If we can't do this now, then when?? For those who can remain calm and rational, the following is another development on a more sensible course for future energy planning. Yet again, as we rush to hide under a rock, China finds answers.

The following analysis is from Ambrose Evans Pritchard in The Telegraph of London on March 26:

"This passed unnoticed –except by a small of band of thorium enthusiasts – but it may mark the passage of strategic leadership in energy policy from an inert and status-quo West to a rising technological power willing to break the mould.

If China’s dash for thorium power succeeds, it will vastly alter the global energy landscape and may avert a calamitous conflict over resources as Asia’s industrial revolutions clash head-on with the West’s entrenched consumption.

China’s Academy of Sciences said it had chosen a “thorium-based molten salt reactor system”. The liquid fuel idea was pioneered by US physicists at Oak Ridge National Lab in the 1960s, but the US has long since dropped the ball. Further evidence of Barack `Obama’s “Sputnik moment”, you could say.

Chinese scientists claim that hazardous waste will be a thousand times less than with uranium. The system is inherently less prone to disaster.

“The reactor has an amazing safety feature,” said Kirk Sorensen, a former NASA engineer at Teledyne Brown and a thorium expert.

“If it begins to overheat, a little plug melts and the salts drain into a pan. There is no need for computers, or the sort of electrical pumps that were crippled by the tsunami. The reactor saves itself,” he said.

“They operate at atmospheric pressure so you don’t have the sort of hydrogen explosions we’ve seen in Japan. One of these reactors would have come through the tsunami just fine. There would have been no radiation release.”

Thorium is a silvery metal named after the Norse god of thunder. The metal has its own “issues” but no thorium reactor could easily spin out of control in the manner of Three Mile Island, Chernobyl, or now Fukushima.

Professor Robert Cywinksi from Huddersfield University said thorium must be bombarded with neutrons to drive the fission process. “There is no chain reaction. Fission dies the moment you switch off the photon beam. There are not enough neutrons for it continue of its own accord,” he said.

Dr Cywinski, who anchors a UK-wide thorium team, said the residual heat left behind in a crisis would be “orders of magnitude less” than in a uranium reactor.

The earth’s crust holds 80 years of uranium at expected usage rates, he said. Thorium is as common as lead. America has buried tons as a by-product of rare earth metals mining. Norway has so much that Oslo is planning a post-oil era where thorium might drive the country’s next great phase of wealth. Even Britain has seams in Wales and in the granite cliffs of Cornwall. Almost all the mineral is usable as fuel, compared to 0.7pc of uranium. There is enough to power civilization for thousands of years.

I write before knowing the outcome of the Fukushima drama, but as yet none of 15,000 deaths are linked to nuclear failure. Indeed, there has never been a verified death from nuclear power in the West in half a century. Perspective is in order.

We cannot avoid the fact that two to three billion extra people now expect – and will obtain – a western lifestyle. China alone plans to produce 100m cars and buses every year by 2020.

The International Atomic Energy Agency said the world currently has 442 nuclear reactors. They generate 372 gigawatts of power, providing 14pc of global electricity. Nuclear output must double over twenty years just to keep pace with the rise of the China and India.

If a string of countries cancel or cut back future reactors, let alone follow Germany’s Angela Merkel in shutting some down, they shift the strain onto gas, oil, and coal. Since the West is also cutting solar subsidies, they can hardly expect the solar industry to plug the gap.

BP’s disaster at Macondo should teach us not to expect too much from oil reserves deep below the oceans, beneath layers of blinding salt. Meanwhile, we rely uneasily on Wahabi repression to crush dissent in the Gulf and keep Arabian crude flowing our way. So where can we turn, unless we revert to coal and give up on the ice caps altogether? That would be courting fate.

US physicists in the late 1940s explored thorium fuel for power. It has a higher neutron yield than uranium, a better fission rating, longer fuel cycles, and does not require the extra cost of isotope separation.

The plans were shelved because thorium does not produce plutonium for bombs. As a happy bonus, it can burn up plutonium and toxic waste from old reactors, reducing radio-toxicity and acting as an eco-cleaner.

Dr Cywinski is developing an accelerator driven sub-critical reactor for thorium, a cutting-edge project worldwide. It needs to £300m of public money for the next phase, and £1.5bn of commercial investment to produce the first working plant. Thereafter, economies of scale kick in fast. The idea is to make pint-size 600MW reactors.

Yet any hope of state support seems to have died with the Coalition budget cuts, and with it hopes that Britain could take a lead in the energy revolution. It is understandable, of course. Funds are scarce. The UK has already put its efforts into the next generation of uranium reactors. Yet critics say vested interests with sunk costs in uranium technology succeeded in chilling enthusiasm.

The same happened a decade ago to a parallel project by Nobel laureate Carlo Rubbia at CERN (European Organization for Nuclear Research). France’s nuclear industry killed proposals for funding from Brussels, though a French group is now working on thorium in Grenoble.

Norway’s Aker Solution has bought Professor Rubbia’s patent. It had hoped to build the first sub-critical reactor in the UK, but seems to be giving up on Britain and locking up a deal to build it in China instead, where minds and wallets are more open.

So the Chinese will soon lead on this thorium technology as well as molten-salts. Good luck to them. They are doing Mankind a favour. We may get through the century without tearing each other apart over scarce energy and wrecking the planet."

Nuclear Power: Hysteria on Steroids

2011-03-13T17:03:00.000-01:00

By Sandy Prisant

(Editor's Note: the Author is a former manager at American Electric Power Co. and has helped build a safe Nuclear Power Plant)

How long must this irrational hysteria about everything nuclear paralyze us and our societies? Whom would have heeded Peter and the Wolf for 65 years, when virtually no threats materialize?

But that doesn't stop perfectly experienced reporters from knee-jerk movement of any discussion about Japan now to to the most extreme, unlikely outcomes--making that the centerpiece of their alleged "news analysis".

Do you or those reporters know the first thing about building nuclear plants to exacting specifications? Do you know that for all the hysteria about Three Mile Island, no one there even broke an ankle? Do you know that almost every flood, tornado or major car pile up kills more than virtually all nuclear plants, ever?

Do you know that Times' articles claiming Japan paid too little attention to future earthquakes before nuclear plant construction are flat out wrong? Do you know that the very first bar for any plant in a developed nation is a reactor design that can withstand an earthquake epicenter smack underneath while a 747 is crashing into the containment structure above?

Do you know that for 40 Years, the Nuclear Regulatory Commission has required this as the minimum safety thresh hold they call MCD--Maximum Credible Disaster?

Do you think Chernobyl in a collapsing nation is any more representative of nuclear safety than the victory of Adolph Hitler in 1933 was of free and fair elections?

Finally, if these plants were unsafe, have you wondered why terrorists haven't crashed a plane into one of them--anywhere in the world? Wouldn't it be much worse than hitting a building, you say?

No it wouldn't, because Al Qaeda knows more than you do about the strength of these vessels and why they're pretty much impregnable.

Do you appreciate that nations like France and Japan have been getting the majority of their
energy from nuclear power with NO accidents for decades, but you never hear about it?

Finally, do you realize that we could have had safe nuclear power with far less foreign oil for the past 40 years, avoiding the War in Iraq; instead we've stuck with coal, directly giving our grandchildren the highest rates of asthma mankind has ever seen?

That is the real effect of the freedom you've been given to be hysterical for two generations.

And You Thought Our Big Problem Is Debt??

2011-02-19T18:35:00.000-01:00

By Sandy Prisant

Here's a look at how the United States compares with other advanced economies.

The Banks: Capitalism's Own Worst Enemy

2011-01-24T18:29:00.000-01:00

By Sandy Prisant

This morning I closed all my bank accounts at J P Morgan Chase. It was where my father opened my very first account when I was 16. I remember Mr. Marty, the branch manager in Great Neck, NY. Nice smile. Nice man.

How things have changed. I had opened additional accounts with the guarantee of no-fee checking for life a few years ago, but this month Chase has swooped in and arrogantly broken that guarantee for all customers. No apologies. No explanations. This hardly caused a ripple, because we all now expect banks to abuse us to an extraordinary degree.

In recent days, Goldman Sachs has announced bonuses of SIXTEEN BILLION TWO HUNDRED MILLION DOLLARS for results in the same year that 1.2 million American families lost their homes . And now we learn that US taxpayers will be picking up tens of millions in legal fees for some of our public bankers at Fannie and Freddie Mae, whom are millionaires in their own right, but with the ethics of bag ladies (New York Times/Jan 24). In the same week, two other financial institutions are petitioning the courts to burn their sub prime loan records.

The questions abound:

What has happened to the re-establishment of banking regulation that was so vital in ending the last Depression? The stripping of Glass-Steiglitz regulation is a primary cause of this Depression. What is Washington waiting for?
We created TARP to keep the banks and the economy liquid. The banks, on their own, decided to take the money, but not pass it on.Single-handedly they have made America illiquid. Can neither the Fed nor the Comptroller of the Currency oblige banks to make sound loans--as has been required in the United Kingdom?
In short, if the Banks were a foreign enemy or terrorist organization, could they do any greater harm, more effectively, to the United States?
And could they do it with greater disdain?

The root of the word "capitalism" is "capital". It is our understanding that in a free enterprise system, capital is the core element in economic development and that it comes through institutions called banks. In this Post-Prosperity Era, banks have decided they are not here to provide capital, but to charge fees for everything imaginable, pay out little or no interest but demand huge credit card fees and interest, while simultaneously repossess our homes. That's their entire business model.

Except for those bank shareholders who receive dividends, there is in fact no "Capitalism" being conducted by these institutions.

Recently people were fascinated to see Goldman "invest" a large sum in Facebook, suggesting that website was worth billions, but Goldman was proving nothing of the sort. In fact the investment bank was simply doing what it does best: (1)Acquiring equity that could be re-sold to existing or new clients at a profit and with commissions and (2) Putting itself in an almost unassailable position to earn hundreds of millions more for handling Facebook's IPO in the next five years.

Any corporation has the right to make a profit. But only banks have as their raison d'etre facilitating not just a nation's profits, but its economic survival through Main Street liquidity.

The banks are quite clearly telling us that is not their role and they want nothing to do with it. In the words of Nobel Laureate in Economics, Joseph Stieglitz: "If bankers win, they walk off with the proceeds, and if they lose, taxpayers pick up the tab."

Which leaves us with the greatest question of all: If banks no longer will provide capital, what is the future of Capitalism? A recent study shows almost half of all Americans believe our nation's best days are behind us. With banks like ours, we can't blame this one on China.

The Future Doesn't Work

2011-01-07T17:39:00.001-01:00

Editor's Note: As we enter Year 4 of this Depression, history reminds us that we are at the nadir of the economic cycle. The budget cutting, the downsizing, the firings--it's all been done. The savings for "a rainy day" will now begin running out for most Americans and small business at an accelerated pace, this year and next--which brings us to ideas for solutions. According to the American voter, we should now try a solution that has already proven it will not work:

The Texas Omen

By PAUL KRUGMAN

January 6, 2011

Wait — Texas? Wasn’t Texas supposed to be thriving even as the rest of America suffered? Didn’t its governor declare, during his re-election campaign, that “we have billions in surplus”? Yes, it was, and yes, he did. But reality has now intruded, in the form of a deficit expected to run as high as $25 billion over the next two years.

And that reality has implications for the nation as a whole. For Texas is where the modern conservative theory of budgeting — the belief that you should never raise taxes under any circumstances, that you can always balance the budget by cutting wasteful spending — has been implemented most completely. If the theory can’t make it there, it can’t make it anywhere.

These are tough times for state governments. Huge deficits loom almost everywhere, from California to New York, from New Jersey to Texas.
How bad is the Texas deficit? Comparing budget crises among states is tricky, for technical reasons. Still, data from the Center on Budget and Policy Priorities suggest that the Texas budget gap is worse than New York’s, about as bad as California’s, but not quite up to New Jersey levels.

The point, however, is that just the other day Texas was being touted as a role model (and still is by commentators who haven’t been keeping up with the news). It was the state the recession supposedly passed by, thanks to its low taxes and business-friendly policies. Its governor boasted that its budget was in good shape thanks to his “tough conservative decisions.”

Oh, and at a time when there’s a full-court press on to demonize public-sector unions as the source of all our woes, Texas is nearly demon-free: less than 20 percent of public-sector workers there are covered by union contracts, compared with almost 75 percent in New York.

So what happened to the “Texas miracle” many people were talking about even a few months ago?

Part of the answer is that reports of a recession-proof state were greatly exaggerated. It’s true that Texas job losses haven’t been as severe as those in the nation as a whole since the recession began in 2007. But Texas has a rapidly growing population — largely, suggests Harvard’s Edward Glaeser, because its liberal land-use and zoning policies have kept housing cheap. There’s nothing wrong with that; but given that rising population, Texas needs to create jobs more rapidly than the rest of the country just to keep up with a growing work force.

And when you look at unemployment, Texas doesn’t seem particularly special: its unemployment rate is below the national average, thanks in part to high oil prices, but it’s about the same as the unemployment rate in New York or Massachusetts.
What about the budget? The truth is that the Texas state government has relied for years on smoke and mirrors to create the illusion of sound finances in the face of a serious “structural” budget deficit — that is, a deficit that persists even when the economy is doing well. When the recession struck, hitting revenue in Texas just as it did everywhere else, that illusion was bound to collapse.

The only thing that let Gov. Rick Perry get away, temporarily, with claims of a surplus was the fact that Texas enacts budgets only once every two years, and the last budget was put in place before the depth of the economic downturn was clear. Now the next budget must be passed — and Texas may have a $25 billion hole to fill. Now what?
Given the complete dominance of conservative ideology in Texas politics, tax increases are out of the question. So it has to be spending cuts.

Yet Mr. Perry wasn’t lying about those “tough conservative decisions”: Texas has indeed taken a hard, you might say brutal, line toward its most vulnerable citizens. Among the states, Texas ranks near the bottom in education spending per pupil, while leading the nation in the percentage of residents without health insurance. It’s hard to imagine what will happen if the state tries to eliminate its huge deficit purely through further cuts.
I don’t know how the mess in Texas will end up being resolved. But the signs don’t look good, either for the state or for the nation.

Right now, triumphant conservatives in Washington are declaring that they can cut taxes and still balance the budget by slashing spending. Yet they haven’t been able to do that even in Texas, which is willing both to impose great pain (by its stinginess on health care) and to shortchange the future (by neglecting education). How are they supposed to pull it off nationally, especially when the incoming Republicans have declared Medicare, Social Security and defense off limits?

People used to say that the future happens first in California, but these days what happens in Texas is probably a better omen. And what we’re seeing right now is a future that doesn’t work.

Outlook 2011: Is the Smart Money Right About China?

2010-12-26T17:42:00.000-01:00

Editor's Note: In multiple media, this editor has defended China's economy and its coming world impact against the sour grapes hurled at it by angry Americans since the current Depression began. The following however is a tour de force that Wordsmith Wars believes demands pause for thought.

Dian L. Chu

M.B.A., C.P.M. and Chartered Economist with a syndicated financial blog frequently published and quoted by media outlets worldwide

China has been ranked as the top growing country among the G20 since 2001, and is expected to retain that title for at least another five years (See Growth Chart). However, the news coming out of China for the past three months has not been good. It is looking more and more that it is not a question of if China is a bubble and going to burst, but when.

Click to enlarge images

The country has major infrastructure issues, troubling population dynamics, poorly aligned employment outcomes, inflation problems, a real estate bubble, an opaque and potentially insolvent banking system (had mark-to-market accounting been applied), geo-political problems with North Korea and Taiwan, and an underperforming stock market in 2010 (see stock comparison chart).

Smart Money Rushing Out

While the hot money is flooding into China, the smart local money is doing everything they can to get their money outside of China, which partly explains why Shanghai SE Composite has underperformed other markets for the past year or so (see Comparison Chart).

The many issues of China could conspire to become the biggest train wreck waiting to happen, and potentially dwarf any little budget problems in Europe by a factor of ten.

Big Trouble In Big China

China has a population related societal structural problem. The nation has tried to utilize the vast manpower to its advantage over the last two decades building a powerhouse manufacturing economy through the availability of low cost workers, which supplied the world with lower cost goods.

Nevertheless, the harsh reality is that the nation's infrastructure, quality jobs, food, and overall resources are too scarce to support such mass population, while achieving the government's goal of a smooth transition to a developed middle class to sustain an internal demand model going forward.

If you think having riots in Greece over the pension retirement age being raised is bad, just wait till riots break out in Beijing and other cities over a 90 cent bowl of noodle soup now costing four dollars due to food shortages, and a runaway inflation problem.

Loose Lending = Non-performing Projects

This is only reinforced by some of the news events taking place over the last three months. Let's start with the raising of banks reserve requirements by the central bank, which is the sixth such increase in 2010.

These measures are meant to curb the excess lending which has fueled much of the overbuilding and real estate speculation occurred over the past two years as China`s central bank initially wanted to avert a recession by artificially creating demand for workers and construction projects to replace lagging demand from the developed economies.

The problem is that too much lending has occurred, and bad lending at that. Because of the cheap available credit, now you have cement companies and manufacturing firms getting bank loans to invest in endeavors such as real estate, which is outside of their core expertise and competency.

Real Estate Misery Loves Company – China & Spain

The result is a bunch of excess inventory and poorly thought-out construction projects which have no means of recouping the initial investment needed to repay the bank loans.

This practice is similar to Spain`s situation now, where they have entire uninhabited building complexes that have yet to be marked to market, and will probably ultimately be demolished. But at least in Spain, even though it was a construction boom, it was engineered by developers in Spain, and not by some manufacturing outfits like those in China.

So, multiply the bad business project factor by ten and you get an understanding of the magnitude of bad loans on the books of Chinese banks. The problem is being further exacerbated by the practice similar to Spain's-- of banks making additional loans to the businesses just so that they can then turnaround and pay back the interest owed on the original loans.

The only way this would work out is if these projects magically develop revenue streams. Unfortunately, in the case of Spain, a 20% unemployment rate, coupled with a still overvalued housing market in which prices still need to come down significantly, would suggest that by the time the Spanish economy recovers enough to support the excess inventory, the abandoned projects are run down and uninhabitable.

A similar scenario could play out in China as well.

True Smart Money Wary of the Write-off Domino

Furthermore, China's practice of overbuilding at the height of real estate valuations makes even haircuts on loan write-offs an untenable practice for banks, and by further throwing good money after bad, the ultimate mark- to-market effect could be catastrophic for Chinese Banks.

This is the main reason all the major Chinese banks have gone to the market in 2010 to raise more capital before investors wise up to the underlying deficits these banks face, as these bad loans eventually would need to be written off the books.

Victor Shih, a Northwestern University professor estimates that Chinese local governments borrowed some 11.4 trillion renminbi at the end of 2009, and that local government financing loans to be roughly one-third of China's 2009 GDP.

Shih reckons the most likely scenario over the next few years is that there would be increases of non-performing loans ratio from local governments. This would require a large scale of recapitalization of the Chinese banking system, which would eat up a large share of China's foreign exchange reserves and possibly slow down growth.

I do believe Beijing is quite capable of a few bailouts and surviving a widespread banking crisis, but this most definitely will not bode well for the financial markets. That's most likely why you see insiders removing capital from direct exposure to the inevitable re-pricing that will happen throughout Chinese markets from real estate to the stock market.

This can be seen at this early stage by the underperformance of the Chinese stock market compared to other global markets. Remember, foreigners cannot invest directly in these markets, so these capital outflows are truly the smart money.

Logistic Gridlock Crimping the Middle Class

Next let's look at the recent news regarding a severe cutback in automobile registrations in Beijing to 240,000 in 2011 from 700,000 registered in 2010 by the municipal government. Other large cities in China are bound to follow. This is most likely related to the reported 9-day traffic jam on the Beijing-Tibet expressway in August, and other extended traffic jams throughout China in 2010.

China is trying to build infrastructure projects after the fact; whereas with proper central planning these should have been established far ahead of the massive transition from a rural, agricultural based populous to that of a modern, large city based business and manufacturing concentration.

Simply put, it is impossible for all the Chinese citizens who want and can afford automobiles to be able to own and utilize this form of transport without a total breakdown in the transportation system. We are seeing the early stages of complete and counterproductive gridlock in the transportation system of China, and it is only going to get worse over the next decade.

No Jobs for College Grads

For all the talk about how China graduates more engineers each year, and other college educated young people who have strong backgrounds in the hard sciences than most developed nations combined, this is actually another sign of problems to come over the next decade in China.

China's wealth and emergence into the second largest business economy hasn't been built around the need for these types of mind and skill set. So literally, you have a large mismatch between the types of available jobs in China, that are supported by the heavy manufacturing and construction intensive focus of the past twenty years, to that of the recently educated pool of graduates who have grown in sizable numbers over the past five years.

The Mind Is A Terrible Thing To Waste

This results in a large human asset class that China is currently wasting, as most of the newly educated workforce is working in jobs which require little or no advanced education at the university level. So you have highly educated university graduates in areas like engineering and accounting working low level service and sales jobs that pay less than many manufacturing jobs.

In short, there are too many highly educated Chinese citizens graduating each year for the number of jobs available needing their skill set because China`s economic model isn`t built around these type of jobs. This type of misaligned employment outcome never ends well; it usually manifests itself in increased civil and social unrest.

8% Inflation in 2011

The next major challenge for China is skyrocketing inflation, which at its root is the fact that there are too many people chasing too few resources. This fundamental flaw in population dynamics underpins many of the problems that China faces going forward.

Recent CPI data for November illustrates the inflation problem in China with a reading of 5.1% from a year ago comparison, this is up from a 4.4% reading for the previous month. Couple this with the latest 4% hike in fuel prices in China because of rising oil prices, you could expect future CPI and PPI reports to reflect even higher rates of inflation.

For now, most of the year over year spike has revolved around higher food prices as energy has mainly been flat for 2010 thanks mostly to government subsidies. Now that energy prices have entered the picture, China will start to experience even more inflation pressures in 2011.

Furthermore, with the undervalued yuan pegged to the dollar, it is only getting worse for China in 2011 due to Fed's QE2 pressures on the dollar. The real inflation rate for Chinese citizens for 2011 will probably approach 8% next year.

An Asian Contagion by China?

This escalating inflation concern is further compounded by Beijing's lack of decisive action to combat the problem by delaying a much needed currency appreciation, and hiking interest rates in a timely fashion. There is no getting around the fact that these two things need to occur as soon as possible.

By the time the Chinese government is forced to implement these tightening tools, the damage to the economy is most likely already done. The longer China delays the inevitable serious tightening measures, the harder the economic crash that will occur in the aftermath of these policy changes. And it is unlikely to end well. The resultant impact will probably take the rest of the Asian economies down with it – an Asian Contagion scenario.

History Repeats Itself

Eventually central planners and finance ministers around the world might start to understand that policies which lead to bubbles being formed in the first place are counterproductive in the long run. But until that lesson is learned, it seems like we are doomed to repeat the same mistakes over and over again.

Right now, there are more and more signs coming out of China that all is not well with its economy, and the likelihood of a more severe downturn in the future is a distinct possibility, unless its policy makers take decisive and prudent actions to minimize the damage of a hard landing

The American Way?

2010-11-23T18:19:00.001-01:00

Ed- American capitalism is working more efficiently than ever. What does that mean for the future of our country?

Corporate Profits Were the Highest on Record Last Quarter

By CATHERINE RAMPELL

Published: November 23, 2010

The nation’s workers may be struggling, but American companies just had their best quarter ever.

American businesses earned profits at an annual rate of $1.66 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or non-inflation-adjusted terms.

Corporate profits have been going gangbusters for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history.

This breakneck pace can be partly attributed to strong productivity growth — which means companies have been able to make more with less — as well as the fact that some of the profits of American companies come from abroad. Economic conditions in the United States may still be sluggish, but many emerging markets like India and China are expanding rapidly.

Tuesday’s Commerce Department report also showed that the nation’s output grew at a slightly faster pace than originally estimated last quarter. Its growth rate, of 2.5 percent a year in inflation-adjusted terms, is higher than the initial estimate of 2 percent. The economy grew at 1.7 percent annual rate in the second quarter.

Still, most economists say the current growth rate is far too slow to recover the considerable ground lost during the recession.

“The economy is not growing fast enough to reduce significantly the unemployment rate or to prevent a slide into deflation,” Paul Dales, a United States economist for Capital Economics, wrote in a note to clients. “This is unlikely to change in 2011 or 2012.”

The increase in output in the third quarter was driven primarily by stronger consumer spending. Wages and salaries also rose in the third quarter, which might help bolster holiday spending in the final months of 2010.

Private inventory investment, nonresidential fixed investment, exports and federal government also contributed to higher output. These sources of growth were partially offset by a rise in imports, which are subtracted from the total output numbers the government calculates, and a decline in housing and other residential fixed investments.

Want Sane Politics? Start Here:

2010-11-05T13:42:00.000-01:00

Editors note: This is how the Mother of Parliaments deals with candidates or campaigns run on lies and half-truths. At a stroke. Can we learn? (reprinted from The Telegraph of London (11/5).

Labour minister barred from Commons for three years

Phil Woolas loses seat after knowingly making false statements about opponent in May's general election.

The Labour MP could be barred from the Commons for three years, with the election contest for his Oldham East and Saddleworth seat set to be re-run.

But Mr Woolas said he would fight the ruling - the first of its kind in 99 years - and was seeking a judicial review.

"The court has decided that an election should be overturned and an MP should lose his seat and be incapable of being elected to the House of Commons for three years because statements which attacked a candidate's 'political conduct' were also attacks on his 'honour' and 'purity'."

The court decided that the Oldham election should be be re-run, and that Mr Woolas should lose his seat and be barred from being elected to the House of Commons for three years.
It is now up to Commons Speaker John Bercow to decide whether to impose the three year ban, initiate a by-election for Oldham East and Saddleworth immediately or wait for further legal proceedings.

The Speaker's office said Mr Bercow would make a statement to the Commons on Monday.
Lord Falconer, the former Lord Chancellor, had earlier conceded that Mr Woolas would be forced out, saying he will not be Labour's candidate in the by-election that must now be held.

He said: "If there is to be a by-election, which it sounds like there is going to be, then Labour will have a new candidate."

Mr Woolas, who won May's general election with a majority of just 103 votes, is the first MP for 99 years to face a successful challenge to his election victory on the basis of publishing false statements about an opponent.

The specially convened election court had heard that the Labour MP stirred up racial tensions in a desperate bid to retain his seat in Oldham East and Saddleworth.

Giving their judgment, Mr Justice Nigel Teare and Mr Justice Griffith Williams said Mr Woolas was guilty of illegal practices under election law.

Mr Woolas was also found to have knowingly made a false statement that Mr Watkins had reneged on a promise to live within the constituency prior to the election.

That suggested Mr Watkins was "untrustworthy".

Soles of War

2010-10-17T16:40:00.000-01:00

by Claudia Ricci

Professor Ricci is an author, professor of journalsim at SUNY/Albany

and a founding principal in "Wordsmith Wars"

Outdoors, in the garden. The light is the color of seawater. There are shadows. There are feathery astilbe tails, swishing like golden wings. There are lilies of every color, cupped to the sky. And there are trees: palm and mango and even, a dwarf apple. Always in a story like this, a tale of evil and temptation, a story of sin and possible redemption, there has to be an apple tree. And of course, an Eve. Only in this case, Eve’s name is Caroline. Cee for short.

Oddly enough, his name is actually. Adam.

“Oh but why?” she asks him. Her eyelashes are as thick and dark as midnight brooms.

“Why do you have to go?”

“Why do you think?” He toys with her earlobe. A teardrop of flesh between his callused fingertips. Then he slides one finger down her neck. Traces her collarbone. Stops right on the point of it. Her collarbone. The rounded nub. It sticks out so far. She’s always been so self-conscious.

“Could you not do that?” She speaks in a low voice.

“Don’t whine.”

She sits up. They are parked on the lush green lawn that occupies one side of the hotel’s garden. She is sitting enveloped in between his legs. His arms wrap hers. His arms in fatigues. Hers in a white T. “I’m not whining,” she says, struggling to ramp her voice up to a new note. It sounds false.

She cocks her head back. Her eyes are giant black olives. “I just can’t believe you are leaving me. Again. When you promised you wouldn’t. When you came back you said you would never ever have to…”

He moves roughly to cover her mouth with his hand. “And so now I do. I have to go, Cee. Please don’t make it hard for me.”

She tries to move his hand away with her own two, but his hand is vised there. She smells his cologne. A fragrance her body owns. She makes a small ragged noise as she pries away at his grip. Finally she bellows loud and sharp and starts kicking her sneakered feet. For a fleeting moment, she thinks: this is what it must feel like, to be one of his enemy prisoners.

One long screech, and then she is free of his embrace. She gets to her feet. Her face is red and blotchy. Her heart is slamming.

“Damn you Adam. Damn you. You didn’t have to do that.” She bolts out of the garden. Walks the curved white stone path that ends up in the slate courtyard of the hotel. The doors slide open and she steps into the frigid air conditioned lobby. The chill feels good on her face, which is burned by his hand. She walks past the desk and the dull-eyed clerk and pushes the elevator button. She is going up.

The door of the elevator opens. As it does, she sees into the mirror inside. He’s standing there behind her. He is more than a full head taller than she is. She hesitates, glares at him. They get into the elevator. She turns away from him. Crosses her arms. The door closes. They are going up.

“Caroline, the simple matter is this. I have to hit the sands in 33 hours exactly. Now are you going to spend this last day being angry at me?”

She blinks. Her image of him now: silty. Covered in the fine white and yellow dusts of the desert. His helmet. His eyes. His nostrils. All encrusted. The terrible terrible desert he has described to her so many times. Her heart pumps a little bit faster. Thinking of him like this makes her eyes watery. All those months she spent. Watching CNN. Waiting for email. Cringing at every early morning or late night phone call.

She can’t live life with him over there. She shouldn’t have to. Again.

Tears balance like waves on the rims of her eyes.

But they don’t fall.

Instead, she hears these words. They form all on their own, as if her lips are a forge of their own.

“I’m going. I’m going too, Adam. I’m going to sign up. Join. If you are going, then, hell, I’m going to. I’m not staying here. I won’t…I just won’t do it, won’t stay behind. Waiting. Waiting. I won’t do it anymore. I can’t. I can’t live that way.”

There is a small ding. The doors open. They both stand there.

“That is the stupidest thing you have ever said.” He mutters that and shuffles out of the elevator.

She sniffles. Starts to trail after him. “Oh what, so you think I can’t do it? You think I can’t be a soldier. What I’m too weak, too scared?”

He doesn’t speak. And then he does. “No, Caroline, you are not too weak. You are not too scared. There are just things you could never do,” he says. He starts down the hall.

“What things? What things? What like marching or something?” She is following him. She is hurrying. She hears herself. She is shrieking.

He stops. He turns to face her. To look down into her eyes. He’s smirking. She stares at him. His squared jaw. His pouty lips. His eyes, which narrow into slits.

“What things can’t I do?” she says again, breathing hard, but more quietly now.

He bends toward her. She can smell garlic on his breath. Garlic from the shrimp they ate at lunch. And she can smell the bottle of white wine they shared.

“You couldn’t hurt somebody Caroline. You would fall apart before you shot somebody in the head. And there comes a time when you have to hurt somebody in war. You have to hurt somebody real bad. As in, pow. Splat. Red blood. Dead.”

His eyes –hazel with a yellow streak--widen. And maybe it’s her imagination, but they seem to shine. They seem to shine in some kind of violent color.

She shrinks away from him. He turns, and all of a sudden she sees him. Falling. Fallen. His face blackened, one cheek crushed into the ground. His teeth smashed. Bits of teeth everywhere. And his right leg. A bloody stump lying a few feet away on the side of the road. The fabric of his pants blood soaked. The humvee he was riding in a moment ago, now tipped upside down, the dull grey metal in shreds. The shattered pieces scattered across the road amid dead body parts and a tangle of brambles and bushes.

She shakes her head. She has to make the image go away. “I would do anything to stop you from going, Adam.” She says that so quietly it cannot be heard. And now she is starting to sob. But he is walking away. “Doesn’t that matter to you Adam? At all? Adam?”

He stops again. Doesn’t turn to face her. Speaks into the empty hotel hallway. His voice thunders in her ear.

“Caroline for chrissakes what has gotten into you? You went through two years with me gone. And you knew there was a chance I’d have to go back. And now here I am half-way there. No, three quarters. For chrissakes. Here I spend a goddamn fortune on two days with you in a five-star hotel just so you can ruin things this way? What the hell are you doing?”

“Adam, I just know,” she says, sucking in her breath. “I just…I know you shouldn’t go. Something…something is going to…”

He is too far down the hallway now to hear her. The thick carpet sucks up the word “happen.” There is no sound from his boots.

She stares into the muted lights on the walls.

He disappears around the corner.

She blinks.

She follows him. Something comes to her now. Another vision of him.

She is thinking something she can’t possibly think.

********

They make love with the television blaring. When they finish, they lie in silence, side by side, changing channels.

“You hungry Cee?” he says after a while.

“I guess. I don’t know. I’ll be fine.” She hugs her knees. She is in a short pale blue silk bathrobe, sitting on the bed, cross legged.

He picks up the phone and orders a bottle of chilled champagne and fresh strawberries and warm chocolate from room service.

After a while, there is a knock on the door. It is about four o’clock. The sun rays are lying across the bed like strips of gold.

The waiter, an older black man dressed in a short red jacket and crisp grey trousers, wheels in the table, covered in a spotless white cloth. The champagne is in a large silver decanter that gleams. The strawberries are piled high in a silver bowl. The chocolate is in a closed bowl astride a small candle.

The waiter offers to open the bottle but Adam declines the offer.

As soon as the waiter leaves, Adam twists off the wire caging at the top of bottle. Then he leans to a chair and pulls out his pocket knife from his fatigues. The blade is a sharp little mirror that catches a narrow wedge of sun and casts it on the wall. He uses the blade to loosen the cork. In a moment the cork shoots up across the bed. Champagne the color of ginger ale slops out of the bottle. He holds the bottle to his lips and slurps in the champagne. Grinning, he offers her the bottle. She refuses.

“Geesh,” he says, wiping the back of his hand across his mouth.

He lays the pocket knife on the table. She eyes the blade. She blinks. She is thinking something she doesn’t want to think.

He is bare-chested. In red plaid boxer shorts. Sitting on the edge of the bed, he pours two glasses of champagne. The white fizz foams up and over the top of the slender glasses. He holds up one glass and hands her the other. She raises her glass but averts her eyes.

“Caroline?”

She looks up at him. She blinks. Her mouth is cottony. Her lips are a grim little line. She raises her glass and the two glasses come together in a dull “clink.”

They dip strawberries into warm chocolate. She eats one and says she’s had enough.

“You know, Cee, lately you are no fun at all.” He dips one after another strawberry into the chocolate goo.

They finish the champagne. He drinks most of the bottle.

They sit in bed, slumped together under the comforter. There is a smudge of chocolate on the sheets.

Soon, she can tell from his occasional snore, and his steady breathing, that he is asleep. She pulls herself from his grasp. She keeps the television on.

She stares at his sleeping face. The soft O in his pouty lips. She picks up one of his hands and kisses the back of his knuckles. He mutters something, but drops back to sleep. She kisses his lips. Her hair falls onto his cheeks.

She makes the sign of the cross and lifts her eyes into the air. “Bless me Father,” she whispers, “for I am about to sin.” Her head drops. “Please, that I may be forgiven.”

She walks to the end of the bed. Pulls up the comforter. Pulls up the sheet.

His feet are bare. The tops of his feet are wired in sparse black hairs. His toenails are square and ragged. Yellowing. They need clipping.

She walks over to the table where the empty champagne bottle lies in the silver decanter. She picks up the pocket knife.

She is not crying or trembling and she can’t figure out why she is not.

She carries the pocket knife to the end of the bed. She sits cross legged on the floor. She reaches up to the bottom of his left foot. She stares at the callused heel a moment, and then, she cuts.

She slashes the knife straight up, from heel to toe, going deep with the knife. Then she switches direction, cuts again, perpendicular this time, so that he has what looks to be a crude red crucifix on the bottom of his foot. Blood spurts out from the cross. His leg jerks back into the covers. Her breath grows rapid as warm crimson streaks the sheets.

She kneels, and bowing over the right foot, she sets quickly to work. Digging. Deep into the other sole.

The End

The Roman Empire Comes to Delaware

2010-09-15T15:16:00.000-01:00

This single Republican may cost Republicans control
of the Senate and Nation

By A S Sandy Prisant

Are we about to prove the adage: if you don't heed history, you're condemned to repeat it?

Those who know Europe appreciate there isn't that much to see today that can't be linked back to the Romans and their stunning Empire. Roman aqueducts still stand, all the way down to the Middle East. Roman roads still criss-cross the continent. Almost all spa baths are the ones Roman discover and developed 3,000 year ago. Some say, only partly tongue-in-cheek, mankind has created little of import since the Romans--except possibly Lipitor for cholesterol.

Tuesday night, the US Republican Party--already the most right-wing of all the world's major right-wing parties, was embarrassed to learn that its followers had nominated in a Delaware primary for US Senator, an amateur so far off the end of the cliff that she, Sarah Palin, and The Tea Party that supported her have now left the Planet Earth.

What is the difference between standard Republicans and this latter lot? Every Republican sentence on policy includes the words "cut" or "repeal". Never an idea. Even a bad one. The Tea Party folks say the very same thing, but add at the end of each sentence: "or I will shoot you."

Christine O'Donnell has no management experience and no political or government experience. At all. For years she's just been running and losing. She is a fiscal conservative whom personally is a fiscal radical with a record of horrendous personal debt. She is a strident believer in truth, morality and no abortions, but it turns out her academic credentials are a thin tissue of lies. Upon hearing of her victory, it was reported that Karl Rove--Bush's ex-Rasputin--had to undergo a Heimlich Maneuver to be saved from choking to death. Rove, who knows much more about such things than us, says O'Donnell can't possibly win in November.

Meanwhile in liberal New York State, one of the first Tea Party candidates for governor won the Republican nomination. The New York Times said: "The result was a potentially destabilizing blow for New York Republicans." The little known man, who seems to struggle with English, is like Silvio Berlusconi, but without the style. In short, a tough guy.

And how is this like the Roman Empire? Historians have shown that every great nation has its day and then begins to slip. Usually this is the moment when more extremist elements come out and society begins to break down into sects--more concerned with internal spats and resisting change than righting the Ship of the Nation. It's human nature: let's do anything to keep our eye off an unpleasant future.

This is precisely what caused Rome's collapse--no direct invasions; no major competitors, simply endless internal sniping, distracting minor wars over the horizon and arguments over angels dancing on the head of a pin. All sense of community was lost, meaning common will and purpose was replaced by endless domestic power grabs. Then, by nobility. Today, by the banks. The result: slow, steady utter collapse of a nation-state.

In the O'Donnell case, It leaves everyone in the middle--44% of whom have someone unemployed in their family--flailing in frustration and irrationally yelling to the heavens: "Don't Confuse Us With Ideas. Just Do Something or We'll Vote for an Anti-Candidate!!"

Does any of this sound like what's happening in a nation near you?

A Second Opinion on U.S. Health Care Reform

2010-07-14T17:20:00.000-01:00

editor: the following is a reply to a "New England Journal of Medicine" commentary. The author, an M.D. and Ph.D., is assistant professor at the Institute for Health and Aging at the University of California, San Francisco.

By Claudia Chaufan MD

In a recent issue in the New England Journal of Medicine, economist Jonathan Gruber praises the Patient Protection and Affordable Health Care Act (PPACA) as a “step in the right direction,” even as he expresses a healthy skepticism about PPACA’s capacity to control escalating health care costs, which he recognizes as “key to the long-term viability of our health care system.” Gruber also argues that there is “shortage of evidence” regarding which approach will meet Americans’ health care needs while controlling costs; therefore there is “no consensus” on what works [1].

Had Gruber looked beyond the U.S. borders, however, he would have found plenty of evidence. For instance, he would have found that U.S. consumption of health care as measured by critical indicators — per capita annual doctor visits, length of stay following heart attacks, or length of stay following normal childbirth – is no greater than the OECD average, and therefore cannot justify the extraordinary level of U.S. spending [2].

He would also have found that U.S. prices for medical care commodities and services are significantly higher than in other nations and constitute a key determinant of U.S. overall spending [3], and that such prices are determined by the exceptionally high administrative overhead caused by the system’s fragmented, public-private financing [4] and by the comparatively limited market power of American patients vis-à-vis their counterparts in countries with national health systems where the government negotiates prices with drug and medical device companies [5]. And he might have concluded that PPACA will do predictably little to change all this.

Moreover, the international literature would have shown the author the extraordinary international consensus around nonprofit financing to cover medically necessary services [5].

But what about the dramatic expansion of coverage promised by PPACA? Is this not a step in the right direction? The problem is that insurance coverage, as desirable as it may be, is not health care, but just a means to that end. And the U.S. system is notorious for providing coverage without care. High co-pays and deductibles are significant obstacles to access. Nor does health insurance offer financial security: nearly 78 percent of personal bankruptcies in 2007 that were linked to medical debt involved persons who were insured at the onset of their illness or injury [6]. PPACA, by allowing the sale of premiums for policies that will cover only 60 percent of health expenses [7], will do predictably little to change this state of affairs.

There is, however, an alternative proposal whose financial and policy soundness are based on decades of international experience and evidence. It would improve and expand Medicare to include all residents in the nation or in one state. That alternative may have to wait until PPACA unravels, as it predictably will [8].

President Obama argued that a model of reform as that implemented by PPACA would allow Americans to build on “what works” [9] – a decades-long experience with employer-sponsored for-profit health insurance. Maybe paradoxically, however, PPACA will unravel as employers realize that it is cheaper to pay a fine than pay for increasingly more expensive and inadequate policies, and employees enter the individual health exchanges implemented by the new law and find them so expensive that they “clamor for a nationalized health care system” [10].

References

1. Gruber, J., The Cost Implications of Health Care Reform. N Engl J Med: p. NEJMp1005117.

2. Peterson, C.L. and R. Burton, U.S. Health Care Spending: Comparison with Other OECD Countries. 2007. Order Code RL34175(September 17): p. http://assets.opencrs.com/rpts/RL34175_20070917.pdf (Accessed November 10 2007).

3. Anderson, G.F., et al., It’s The Prices, Stupid: Why The United States Is So Different >From Other Countries. Health Affairs, 2003. 22(3): p. 89-105.

4. Woolhandler, S., T. Campbell, and D.U. Himmelstein, Costs of Health Care Administration in the United States and in Canada. The New England Journal of Medicine, 2003. 349(August 21): p. 768-75.

5. White, J., Competing solutions: American health care proposals and international experience. 1995, Washington D. C: The Brookings Institution.

6. Himmelstein, D., U. , et al., Medical Bankruptcy in the United States, 2007: Results of a National Study. The American Journal of Medicine, 2009. 122(8): p. 741-746.

7. Dorgan, B., The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act. http://dpc.senate.gov/dpcdoc-sen_health_care_bill.cfm, 2010. Democratic Policy Committee.

8. Angell, M., Is the House Health Care Bill Better than Nothing? Physicians for a National Health Program, 2010: p. http://www.pnhp.org/news/2009/november/is_the_house_health_.php (May 17, 2010).

9. The New York Times, Obama’s Health Care Speech to Congress. 2009: p. http://www.nytimes.com/2009/09/10/us/politics/10obama.text.html?_r=1&pagewanted=print (Date accessed September 12, 2009).

10. Helderman, R., Gingrich in Va.: A Republican Congress could defund health care law. 2010: The Washington Post. p. http://voices.washingtonpost.com/virginiapolitics/2010/05/former_speaker_of_the_house.htm

Finally: People Are Using the "D" Word

2010-07-05T14:56:00.000-01:00

By Sandy Prisant

While there are a few facts about the number of bank failures and percentage of US unemployed that are less grim this time, the greatest difference between the The Great Depression and The Great Recession is the choice of one word.

As we roll through Year 3 of this, house prices are again falling, consumer confidence and stock markets are again dropping. At the current rate of job creation it will take more than 10 years to replace all the jobs we've lost--which is a tactful way of saying we will NOT be able to replace all the jobs we've lost. Ever.

At the moment we are locked in a profound debate about the choice between balanced budgets and throwing lifelines. But the US economy seems to snicker at all this chatter and continues to wend its way down hill.

In the last couple of years we've had a surfeit of wild estimates about this decline lasting 6 months. Or a year. Or a couple of years. We've had "jobless recoveries" before and our gut tells us this isn't one of them. The fact is The Great Depression lasted 10 full years and it took Adolf Hitler to get us out of it.

To date no one has presented any compelling case for our current malaise lasting less than a decade--as Depressions can. But there are some experts detailing what most US sources are unwilling to say.

The following article from Sunday's Telegraph (London) comes from a senior economics analyst:

With the US trapped in depression, this really is starting to feel like 1932

The US workforce shrank by 652,000 in June, one of the sharpest contractions ever. The rate of hourly earnings fell 0.1pc. Wages are flirting with deflation.

People queue for a job fair in New York. The share of the US working-age population with jobs in June fell from 58.7pc to 58.5pc. The ratio was 63pc three years ago. Photo: EPA

By Ambrose Evans-Pritchard

Published: 9:33PM BST 04 Jul 2010

"The economy is still in the gravitational pull of the Great Recession," said Robert Reich, former US labour secretary. "All the booster rockets for getting us beyond it are failing."

"Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year. So what are we doing about it? Less than nothing," he said.

California is tightening faster than Greece. State workers have seen a 14pc fall in earnings this year due to forced furloughs. Governor Arnold Schwarzenegger is cutting pay for 200,000 state workers to the minimum wage of $7.25 an hour to cover his $19bn (£15bn) deficit.

Can Illinois be far behind? The state has a deficit of $12bn and is $5bn in arrears to schools, nursing homes, child care centres, and prisons. "It is getting worse every single day," said state comptroller Daniel Hynes. "We are not paying bills for absolutely essential services. That is obscene."

Roughly a million Americans have dropped out of the jobs market altogether over the past two months. That is the only reason why the headline unemployment rate is not exploding to a post-war high.

Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP.

The share of the US working-age population with jobs in June actually fell from 58.7pc to 58.5pc. This is the real stress indicator. The ratio was 63pc three years ago. Eight million jobs have been lost.

The average time needed to find a job has risen to a record 35.2 weeks. Nothing like this has been seen before in the post-war era. Jeff Weninger, of Harris Private Bank, said this compares with a peak of 21.2 weeks in the Volcker recession of the early 1980s.

"Legions of individuals have been left with stale skills, and little prospect of finding meaningful work, and benefits that are being exhausted. By our math the crop of people who are unemployed but not receiving a check amounts to 9.2m."

Republicans on Capitol Hill are filibustering a bill to extend the dole for up to 1.2m jobless facing an imminent cut-off. Dean Heller from Vermont called them "hobos". This really is starting to feel like 1932.

Washington's fiscal stimulus is draining away. It peaked in the first quarter, yet even then the economy eked out a growth rate of just 2.7pc. This compares with 5.1pc, 9.3pc, 8.1pc and 8.5pc in the four quarters coming off recession in the early 1980s.

The housing market is already crumbling as government props are pulled away. The expiry of homebuyers' tax credit led to a 30pc fall in the number of buyers signing contracts in May. "It is cataclysmic," said David Bloom from HSBC.

Federal tax rises are automatically baked into the pie. The Congressional Budget Office said fiscal policy will swing from a net +2pc of GDP to -2pc by late 2011. The states and counties may have to cut as much as $180bn.

Investors are starting to chew over the awful possibility that America's recovery will stall just as Asia hits the buffers. China's manufacturing index has been falling since January, with a downward lurch in June to 50.4, just above the break-even line of 50. Momentum seems to be flagging everywhere, whether in Australian building permits, Turkish exports, or Japanese industrial output.

On Friday, Jacques Cailloux from RBS put out a "double-dip alert" for Europe. "The risk is rising fast. Absent an effective policy intervention to tackle the debt crisis on the periphery over coming months, the European economy will double dip in 2011," he said.

It is obvious what that policy should be for Europe, America, and Japan. If budgets are to shrink in an orderly fashion over several years – as they must, to avoid sovereign debt spirals – then central banks will have to cushion the blow keeping monetary policy ultra-loose for as long it takes.

The Fed is already eyeing the printing press again. "It's appropriate to think about what we would do under a deflationary scenario," said Dennis Lockhart for the Atlanta Fed. His colleague Kevin Warsh said the pros and cons of purchasing more bonds should be subject to "strict scrutiny", a comment I took as confirmation that the Fed Board is arguing internally about QE2.

Perhaps naively, I still think central banks have the tools to head off disaster. The question is whether they will do so fast enough, or even whether they wish to resist the chorus of 1930s liquidation taking charge of the debate. Last week the Bank for International Settlements called for combined fiscal and monetary tightening, lending its great authority to the forces of debt-deflation and mass unemployment. If even the BIS has lost the plot, God help us

Oil in the Gulf: The 100 Million Gallon Truth

2010-06-11T17:04:00.000-01:00

By Sandy Prisant

The 24-hour news cycle and the explosion of media mean an awful lot of people need to do an awful lot of talking about the Gulf of Mexico Oil Catastrophe and anything periphal to it: the President's image, volume of oil recovered, compensation claims, oyster beds, marshes, barriers, ruined vacations, Federal law, etc.

And BP is really OK with all that because it means a lot of help for them in keeping your eye off the ball. So what should you do?

Don't Listen. There is only one fact that matters and from which all consequences spring:

The consensus of US technical experts from the Government's flow rate panel, the University of Indiana U.S. Geological Survey and Woods Hole Observatory is that "from April 22 when the Deepwater Horizon rig sank until June 3 the well has gushed 1.26 million barrels of oil, or 52.9 million gallons." (Blomberg News)

Since the leak cannot be stopped for at least another 75 days therafter, (until new side wells are completed) the most conservative estimate insures a total spill of 3-3.5 million barrels.

According to the Department of Energy, there are 42 gallons of oil in one barrel. And that means the only fact you need to think about is this: By the end of August BP will have spilled into the Gulf, a minimum of:

130 MILLION GALLONS OF OIL

The Great Word War: 4? 5? 6?

2010-05-31T17:25:00.006-01:00

By Sandy Prisant

Don't look over there. Look over here. It's all going on over here.

Is it a World War Or a Word War? Or a Media Circus? It no longer seems to matter

We seem to be answering one of the great questions in human relations through a real-life experiment, acted out by deadly serious people.

What happens when two sides are locked in a struggle to the death for decades, except one side is unable to kill off its adversary and the other side refuses to? What happens?

Nothing definitive like The Charge of the Light Brigade or the Attack on Pearl Harbor; that's apparent. What we're left with is two sides quibbling over land rights, media rights and most vitally, the Narrative: The story each side tries to endlessly to sell its followers and the rest of the world about the sheer, heart-rending decency of their own position, and only their position.

The explosion of the digital age has trumped the explosion of C4 incendiary devices. In a conflict where one side's poor use of arms makes them look bad and the other side's very efficient use of arms makes them look badder, both sides realized they need another way.

Hamas understood it had to stop looking like The Gang Who Couldn't Shoot Straight. Israel realized it had to stop being accused of "disproportionate force", merely because it could hit targets and the other side couldn't.

And then suddenly both sides realized the heavy lifting could be done in this war by simply turning it over to CNN, SkyNews and the Hindustani World Service.

As sad as each of these incidents are for all of us, they have merely become "starter pistols" for the next round of the Word War between Hamas--which never conducts itself like a state-in-waiting--and Israel.

As the Media War has replaced the shooting kind. It's not at all about reality. Like much of life, Its always about perception and whose narrative is more compelling.

Hamas plays this the only way it can if you've been on the losing side for 50 years--impishly firing off a sling shot when the teacher's not looking--and hoping she overreacts.

Why the Israeli's can't envision and better prepare for just this kind of game , the rather predictable result of all its military success, is a bit of a mystery.

Does the Israeli Defense Force really want to be left with a narrative that says "100-plus misguided civilians, many school girls, left us with no option but to kill a dozen because ONE (1) stole a gun from our well-armed soldier? Oh and someone had a knife, maybe."

Where has the guile of Entebbe gone? Where has the shrewd 1967 downing of Egyptian MiGs without touching a single decoy, gone? How could Israel not have had
a military strategy for this and future media
battles, which is now what these incidents are ALWAYS about? In short, what the hell is going on in the planning bunkers of Jerusalem?

From the Gulf to the Amazon: The Environment & You (Part I)

2010-05-22T23:10:00.006-01:00

by Sandy Prisant

While you read this, I sit here. Waiting for the Oil. The oil that will shred the very thin economic base of my depressed state, like single-ply toilet paper. Worse...it turns out it doesn't even matter if the oil actually gets here. The ill-informed, fickle tourists of our great nation are panicking--and cancelling--already.

Apologies, but I can't resist Pogo's over-used line:"We have met the enemy and he is us."

What does that mean? It means what in God's name are we doing? To ourselves? Our planet? Our self-interest? Once, elf-interest was merely a euphemism for greed. Now it's been elevated to a political doctrine. And it's winning. Hands down.

There is a significant school of political thought which unabashedly argues that the Only
real reason for a nation to exist is the furtherance of its own, superficial self-interests. That's not academic babble. It's Real Politik. Let's see how it's working...

For openers, it explains why the UN is doomed to permanent joke status; why the Copenhagen Environmental Summit was slightly less coherent than Times Square on New Year's Eve; and why--despite knowing (KNOWING) Gulf oil drilling could NOT provide energy independence, we collectively said, "What the Hell; drill baby, drill." (aka The Sarah Palin Doomsday Energy Policy).

Well, the Gulf of Mexico may be gone for our lifetime, but not to worry--cynicism and our past blunders aside, there'll be more environmental challenges in the weeks ahead. Why, just last month the mythic Amazon Jungle was given Hollywood status--the very lungs of the world, just when we're putting most of the oil we don't spill in the sea, up, up in the air. Surely we can get this one right.

Can we? It's been my privilege to visit this colossal wonder and to meet its people and I want you to know this may be tricky. Because as much as we all want to hate BP, it turns out if you're honest and ethical and moral, doing right by the existing environment and native cultures is actually hard work.

For some, eco-culture wars are a no-brainer. Black and White. We outsiders are all BP. Natives are good guys who want to be left alone. It seems obvious. From a distance.

But in real life, the Arara tribe of central Brazil and the Hurarani indians and the Kaiapo Nation, one of the Amazon's most respected, sometimes don't stand still and play to passive stereotype--not when the government wanted to throw up a dam in the name of progress and block the Amazon's Xingu River. None of these guys may have an I Phone, but somehow they were hip enough to learn of the blockbuster "Avatar" and shrewdly got a potential dam-stopper in Producer James Cameron. He is now the natives' white knight.

Setting foot in the Amazon for the first time, Cameron promptly declared to more than 70 indigenous people, some holding spears and bows and arrows:

"The snake kills by squeezing very slowly. This is how the civilized world slowly, slowly pushes into the forest and takes away the world that used to be."

Mr Cameron's equation seems fair enough: Development = BP. No Development = Julie Andrews.

But if you delve a layer down, into this most crucial of eco-systems, you begin to see that the clash of cultures and oil drilling (Texaco started in this jungle in 1993) and Hollywood is way more complicated than Mary Poppins could ever imagine.

In Part II, we'll meet Oscar a true native son of the Amazon and a man of the jungle, like the natives who met Mr Cameron. A tracker by trade, Oscar can spot an endangered 4-inch bird at 300 meters with his bare eye. His village reverently named him "Great Owl".

A dignified young man with straight black hair down his back and a cool, steady gaze, Oscar speaks no English, but sounds just a little bit like an autoworker from Michigan.

"Jobs," Oscar says. "We need more jobs. And more American volunteers building improvements in our villages."

Why is a native speaking this way? Because unlike Hollywood, he knows there will be more change in the Amazon, in the Age of Self-Interest. Even if Big Oil encroaches no further than it has.

The real questions are: can self-interest be tempered? Is there such a thing as change that preserves native culture, traditions, life---the tangibles and intangibles that define the distinct heritage of these already dwindling Amazon tribes?

The real questions are: will the future just be about the money and man's ambition and $5 foot-longs? Remember, this jungle provides more of the world's oxygen than any continent you're now standing on. Will we flatten it? Will we send it the way of the Gulf of Mexico?

The answer: The jury is still out. Stay turned for Part II.

BRAZIL: Where the Flag is Always Greener

2010-03-21T17:14:00.001-01:00

Notes from Rio
By Sandy Prisant

If America has already seen it's best days, then it's likely the next wave will include the BRIC nations. The "B" of course, is for Brazil . We recently visited Rio and here are eight things we learned in six days about a new player on the block.

Economy. Petrobras is the state oil company. It is growing like crazy and finding reserves like crazy. It is not run by sinister, incompetent government lackeys, but sharp oil guys. It is not like 200 Nigerians syphoning off that country's greatest resources. Petrobras is the most important oil company based in the Southern Hemisphere. It already competes with the likes of BP and Shell. And it is the stalking horse for a country pushing out into the world.
Image. Last year, this new Brazilian self-confidence was given a flashy, but pricey reward--Rio was voted the host of the expensive 2016 Summer Olympic Games. The first ever in South America.
Maturity. But this immediately raises questions about whether the new boy on the bock is ready for Primetime. The language of Brazil is Portuguese. That is not the language of South America and it is not the language of more than 90% of the foreign visitors coming to see The Olympics. "Well,'' you might say, "the 2nd language of Brazilians must be Spanish or possibly English?" But for the most part, the 2nd language is either football (soccer) or dancing. Or both. Any strictly English speaker who knows world- class football can hold an almost coherent conversation with a Brazilian Portuguese speaker. He only wants to talk about football anyway--not whether Brazil will get a UN Security Council Seat. But there is still the Olympics problem--Brazilians have historically beeen reticent to adopt other languages--even the Spanish of all their neighbors. It is obliged to import hundreds of thousands of skilled workers who can speak more international languages. So how will several million locals be able to meet the tedious, practical and continuous needs of many Olympic guests, expecting to be well-cared for after such an expensive trip? And if that kind of job can't be done well, what does it say about the nation as a near-term international player?
The stereotype that even some Brazilians dislike, is absolutely valid. Brazil is about football and dancing. We arrived at our hotel before noon, and saw no less than 7 games being played on our TV'---from England, Spain, Germany, Italy--and 3 in Brazil. If you sit in an outdoor restaurant at night, you will eventually see 2 or 3 girls break into impromptu dance to the rhythms of a far-off radio, purely for the girl's honest pleasure.
Politics. One Sunday morning we heard a great roar down in the street, below our window. It was a popular protest against the imminent visit of Iran's President Ahmadinejad. In what seemed unnecessary, but quite purposeful, Brazil's respected President Lula Da Silva rushed to tell the world,"It is a very great honor for the people of Brazil to be visited by the President of Iran." No Brazilian we spoke with felt honord. Maybe this was some big deal in the works with Petrobras? There was no obvious explanation for the "Lion of the South" getting into bed with "The Axis of Evil".
The streets of Rio. This city does not have great sites to visit, per se. Instead, it draws the visitor to half a dozen fine venues from which one can view the lone majestic site--the panoramic sweep of Rio itself.
The people. As a capital in development, Rio sorely lacks a middle class. The "Very, very Haves" jostle in the streets with the "Very, very Have Nots'. The latter, mostly naked from the waist up, are only wearing shorts and cheap flip flops, doing little. The "Haves" are wearing very expensive flip-flops and are variously adorned from the waist up in jewelry that exceeds the annual income of any "have not". As in developing countries elsewhere, one can eat very well--but at New York prices.
The Beaches. We have visited beaches on 6 continents. The famed Ipanema is possibly the most overrated. The sand is coarse and full of garbage. The sea delivers a fierce undertow at the shoreline that quickly flips newcomers. On the 1st day we arrived, we wondered why the hotel had a roof pool, only two blocks from the beach. By the 2nd day, we understood.

So, has Brazil arrived? There is one clear litmus test--the departure fee at the airport. This is the one sweeping generalization that never fails: If a government forces you to pay them in hard currency as a charge for simply leaving--after taking $300 from you to get a visa back at the start--then that country cannot yet be taken seriously.

Bottom Line: when a million learn fluent Spanish, a tenth of that English and when Brazil's economy can make it without airport blackmail, go take a look. The country will get there in the end.

1st in War; 1st in Peace; 37th in Health Care

2010-01-29T17:36:00.007-01:00

Probability of death in males 15-60 in US, Australia and Sweden; 1970-2005

(Compiled by US official data and World Health Organization)

By Sandy Prisant

In the week we apparently have decided to adopt collective amnesia and opt for total denial rather than health care reform, don't walk just yet. Remember that the problems won't be walking away. And remember that left unsolved, they will simply scuttle all the other economic stuff you'd now prefer to think about:

Ranking 37th —

Measuring the Performance of the U.S. Health Care System

Christopher J.L. Murray, M.D., D.Phil., and Julio Frenk, M.D., Ph.D., M.P.H.

New England Journal of Medicine (6/1/10)

Evidence that other countries perform better than the United States in ensuring the health of their populations is a sure prod to the reformist impulse. The World Health Report 2000, Health Systems: Improving Performance, ranked the U.S. health care system 37th in the world1 — a result that has been discussed frequently during the current debate on U.S. health care reform.

The conceptual framework underlying the rankings2 proposed that health systems should be assessed by comparing the extent to which investments in public health and medical care were contributing to critical social objectives: improving health, reducing health disparities, protecting households from impoverishment due to medical expenses, and providing responsive services that respect the dignity of patients. Despite the limitations of the available data, those who compiled the report undertook the task of applying this framework to a quantitative assessment of the performance of 191 national health care systems. These comparisons prompted extensive media coverage and political debate in many countries. In some, such as Mexico, they catalyzed the enactment of far-reaching reforms aimed at achieving universal health coverage. The comparative analysis of performance also triggered intense academic debate, which led to proposals for better performance assessment.

Despite the claim by many in the U.S. health policy community that international comparison is not useful because of the uniqueness of the United States, the rankings have figured prominently in many arenas. It is hard to ignore that in 2006, the United States was number 1 in terms of health care spending per capita but ranked 39th for infant mortality, 43rd for adult female mortality, 42nd for adult male mortality, and 36th for life expectancy.3 These facts have fueled a question now being discussed in academic circles, as well as by government and the public: Why do we spend so much to get so little? Comparisons also reveal that the United States is falling farther behind each year (see graph). In 1974, mortality among boys and men 15 to 60 years of age was nearly the same in Australia and the United States and was one third lower in Sweden. Every year since 1974, the rate of death decreased more in Australia than it did in the United States, and in 2006, Australia’s rate dipped lower than Sweden’s and was 40% lower than the U.S. rate. There are no published studies investigating the combination of policies and programs that might account for the marked progress in Australia. But the comparison makes clear that U.S. performance not only is poor at any given moment but also is improving much more slowly than that of other countries over time. These observations and the reflections they should trigger are made possible only by careful comparative quantification of various facets of health care systems.

Of course, international comparisons are not the only rankings that should inform the debate about reforming the health care system. Within the United States, there are dramatic variations among regions and racial or ethnic groups in the rates of death from preventable causes. While aiming to provide solutions to the problems of incomplete insurance coverage and inefficiency of care delivery, health care reformers have given insufficient attention to the design, funding, and evaluation of interventions that are tailored to local realities and address preventable causes of death. The big picture — the poor and declining performance of the United States, which goes far beyond the challenge of universal insurance — will inevitably get lost if we do not routinely track performance and compare the results both among countries and among states and counties within the United States.

Although many challenges remain, the available methods and data are better now than they were when the World Health Organization’s rankings were determined. As part of its reform efforts, the U.S. government should support and participate in international comparisons while commissioning regular performance assessments at the state and local levels.

Experience has shown that whenever a country embarks on large-scale reform of its health care system, periodic evaluations become a key instrument of stewardship to ensure that initial objectives are being met and that midcourse corrections can be made in a timely and effective manner. To be valid and useful, such evaluations cannot be an afterthought that is introduced once reform is under way. Instead, scientifically designed evaluations must be an integral part of the design of reform. For instance, the recent Mexican reform adopted from the outset an explicit evaluation framework that included a randomized trial to compare communities that were introducing insurance in the first phase of reform with matched communities that were scheduled to adopt the plan later. This external evaluation was coupled with internal monitoring meant to enable policymakers to learn from implementation.

In addition to its technical value, the explicit assessment of reform efforts contributes to transparency and accountability. Such assessments can also boost popular support for reform initiatives that inevitably stir up fears of the unknown. In the polarized political climate surrounding the current U.S. health care reform debate, the prospect of periodic evaluations may help reformers to counter many objections by offering a transparent and timely way of dealing with unintended effects. Built-in evaluations may be the missing ingredient that will allow us to finally reform health care in the United States.

COMEBACK: HOPE IN AMERICA

2010-01-17T17:34:00.000-01:00

By Sandy Prisant

Most of Florida Power & Light rate hike rejected

TALLAHASSEE, Fla. (Associated Press) 15 Jan -- State regulators under pressure from politicians and consumer advocates Wednesday rejected more than 99 percent of Florida Power & Light Co.'s request to raise base rates by $1 billion this year and all of a $247 million proposal for 2011.

-----------------------------------

Yogi Berra was right. It ain't over 'til it's over. Just when Sen. Dodd is jettisoning a US Consumer Protection Agency in finance. Just when the President's "body of work" is resulting in poll numbers that look more like those of the man he replaced. Just when Haiti slips light years further away from hope. Just at this moment--a little light shines at the end of the tunnel, in The Miami Herald article quoted above.

A small group of people and public defenders took on a giant. And won. In real life. In a place where they still can't figure out who won the 2000 election. In a state where a dozen or so local public officials are ousted or arrested for corruption almost every year. This means that a few serious people (albeit with the Governor's implicit support) can still get things done in this age. That's to Florida's credit and a hopeful reminder to the nation.

Having been afforded the opportunity to testify before the Florida Public Service Commission in this matter and then provide line-by-line analysis of Florida Power & Light's combined rate petitions, here are paraphrased excerpts from sworn testimony to the Florida PSC in West Palm Beach, August 2009:

"Commissioners, good evening. My name is Alexander Prisant. I'm a homesteader in Boynton Beach and was previously a manager for the American Electric Power Company, one of the very few utilities in this country a good deal larger than FP&L. Maybe it would be helpful if I gave you a slightly different perspective from what I have been hearing tonight and what is actually happening here.

"Just to quickly cover my credentials, I helped write Congressional testimony for the US House of Representatives that led to the construction of 14 nuclear power plants around Lake Michigan. I was personally responsible for setting up the strategy for the lawsuit against the entire US Environmental Protection Agency and the personal lawsuit against the Director of the EPA in the 1980's. So I am a friend of big power.

"Having said that, I am embarrassed by what is being proposed here and I have been embarrassed by petitioner's presentation. There are a couple of hard truths that need to be talked about. In general, these proposals are outside---and I can only speak for myself personally--but outside of my 30 years of experience, outside of industry norms, and unconscionable without better performance.

"In the several states where American Electric Power operates, I had to make these kinds of presentations to people who demanded proof of performance. The hard fact is that within the industry, at the top level, Florida Power & Light is not considered a leader in best practices.

“The performance of transmission and distribution functions in Florida are not equivalent to many states. I am shocked to hear that in 2009 you folks are still trying to grapple with weather issues. In AEP’s states, we have tornado issues. We had to address those 30-40 years ago. Did Florida not have hurricanes 40 years ago? Instead you want the taxpayers, during a Depression, to take care of them now. No vision at all.

“Next: It is hard for consumers to understand a lot of the technical issues involved; this is a complex industry, but there are red flags that any of us can see. FP&L, in its first bill, offered me insurance at my cost for power surges—which would provide an extra payment to the utility as reward for poor performance, while FP&L avoids all liability.

“What is really scary is that I was offered a similar deal by an electric utility once before—in the Middle East. Does FP&L want to operate to the Middle Eastern standard?

“What specifically is the $1.6 billion in rate hikes over 2 years to be used for? I have heard no specifics tonight. If I walked into a hearing in the state of Indiana, for example, and said: ‘listen guys, I just want to raise my one billion dollar profit up to two billion,’ I’d have been run out with a shotgun.

“As effectively a protected monopoly, with a protected return, FP&L is now asking for a 12.5% ROI. Two things come to mind: First, how many companies of this size in this state have a guaranteed income of 12 or 11 or 10% ROI? I can’t think of any. And I’ve really tried.

“Next, if there is guaranteed rate of return of even half that—I have no background in finance—I guarantee you that within one week I will deliver to this Commission six sovereign wealth funds, three hedge funds and three other major financial groups from around the world that, in this environment, will dive in with both feet for a guaranteed rate of return of 6.25 or 6.125%. Think about it—this is a time when the Chinese and Japanese are having to live with T-bill rates of 2 percent. They would jump at 6%.

If, as FP&L proposes, investors were offered 12% guaranteed, off its customers’ backs, those investors might rightly fear Federal authorities intervening, because there must be something illegal going on.”

Commissioner Edgar: “May I ask you to sum up, please.”

Mr Prisant: “Yes. I will sum up by just saying this: Florida is losing population.

What is going on here?”

How Are We Really Doing? America slides deeper into Depression as Wall Street revels

2010-01-11T16:02:00.024-01:00

December was the worst month for US unemployment since the Great Recession began.

By Ambrose Evans-Pritchard

International Business Editor

The Telegraph, London

History repeating itself? President Obama has been accused by some economists of making the same mistakes policymakers in the US made in the Great Depression, which followed the Wall Street crash of 1929, pictured Photo: AP

The labour force contracted by 661,000. This did not show up in the headline jobless rate because so many Americans dropped out of the system. The broad U6 category of unemployment rose to 17.3pc. That is the one that matters.

Wall Street rallied. Bulls hope that weak jobs data will postpone monetary tightening: a silver lining in every catastrophe, or perhaps a further exhibit of market infantilism.

The home foreclosure guillotine usually drops a year or so after people lose their job, and exhaust their savings. The local sheriff will escort them out of the door, often with some sympathy –– just like the police in 1932, mostly Irish Catholics who tithed 1pc of their pay for soup kitchens.

Realtytrac says defaults and repossessions have been running at over 300,000 a month since February. One million American families lost their homes in the fourth quarter. Moody's Economy.com expects another 2.4m homes to go this year. Taken together, this looks awfully like Steinbeck's Grapes of Wrath.

Judges are finding ways to block evictions. One magistrate in Minnesota halted a case calling the creditor "harsh, repugnant, shocking and repulsive". We are not far from a de facto moratorium in some areas.

This is how it ended between 1932 and 1934, when half the US states declared moratoria or "Farm Holidays". Such flexibility innoculated America's democracy against the appeal of Red Unions and Coughlin Fascists. The home siezures are occurring despite frantic efforts by the Obama administration to delay the process.

This policy is entirely justified given the scale of the social crisis. But it also masks the continued rot in the housing market, allows lenders to hide losses, and stores up an ever larger overhang of unsold properties. It takes heroic naivety to think the US housing market has turned the corner (apologies to Goldman Sachs, as always). The fuse has yet to detonate on the next mortgage bomb, $134bn (£83bn) of "option ARM" contracts due to reset violently upwards this year and next.

US house prices have eked out five months of gains on the Case-Shiller index, but momentum stalled in October in half the cities even before the latest surge of 40 basis points in mortgage rates. Karl Case (of the index) says prices may sink another 15pc. "If the 2008 and 2009 loans go bad, then we're back where we were before – in a nightmare."

David Rosenberg from Gluskin Sheff said it is remarkable how little traction has been achieved by zero rates and the greatest fiscal blitz of all time. The US economy grew at a 2.2pc rate in the third quarter (entirely due to Obama stimulus). This compares to an average of 7.3pc in the first quarter of every recovery since the Second World War.

Fed hawks are playing with fire by talking up about exit strategies, not for the first time. This is what they did in June 2008. We know what happened three months later. For the record, manufacturing capacity use at 67.2pc, and "auto-buying intentions" are the lowest ever.

The Fed's own Monetary Multiplier crashed to an all-time low of 0.809 in mid-December. Commercial paper has shrunk by $280bn ($175bn) in since October. Bank credit has been racing down a hair-raising black run since June. It has dropped from $10.844 trillion to $9.013 trillion since November 25. The MZM money supply is contracting at a 3pc annual rate. Broad M3 money is contracting at over 5pc.

Professor Tim Congdon from International Monetary Research said the Fed is baking deflation into the pie later this year, and perhaps a double-dip recession. Europe is even worse.

This has not stopped an army of commentators is trying to bounce the Fed into early rate rises. They accuse Ben Bernanke of repeating the error of 2004 when the Fed waited too long. Sometimes you just want to scream. In 2004 there was no housing collapse, unemployment was 5.5pc, banks were in rude good health, and the Fed Multiplier was 1.73.

How anybody can see imminent inflation in the dying embers of core PCE, just 0.1pc in November, is beyond me.

Mr Rosenberg is asked by clients why Wall Street does not seem to agree with his grim analysis.

His answer is that this is the same Mr Market that bought stocks in October 1987 when they were 25pc overvalued on Shiller "10-year normalized earnings basis" – exactly as they are today – and bought them at even more overvalued prices in 2007, long after the property crash had begun, Bear Stearns funds had imploded, and credit had its August heart attack. The stock market has become a lagging indicator. Tear up the textbooks

A Fairy Tale to Failure

2009-12-30T14:22:00.000-01:00

By Sandy Prisant

Do you believe in fairy tales? How about “The Emperor’s Suit of Clothes”? You have to decide right now, because just at the moment the whole Washington establishment, is madly spinning a new suit of clothes for the Emperor, in the form of a Health Care fable for the nation.

It feels like 2nd grade. We’re all gathered around as most of Washington---pundits and politicians full of self-congratulations—opens the big storybook and spins the fable.

Just as in Hans Christian Andersen’s story, some of us are dubious about what the Emperor’s minions are telling the people. So Washington has come up with a new twist on Andersen, meant to thwart all possible opposition. It’s the ultimate defense: “It doesn’t matter what’s wrong with this bill; don’t think about all the self-serving riders the insurance industry added,” Washington says, “anything is a good, first baby step.”

Really? Real-world history says things don’t work that way. The well-documented record of legislative bodies (elected and unelected) confirms: nations, including the US, rarely build effective programs in steps, bill by bill. Especially when (unlike Medicare and Social Security) the very architecture of this bill leaves little room for expansion and true reform.

Many individual Acts by the President or Congress have included expansion of policy in planned stages, but usually the main milestones for such expansion are set down in a single document and decision.

Policy ideas that were weak compromises--often sold to the nation as “good first steps”--have not been:

}It took over half a century for the Supreme Court to move from the “Separate But Equal” baby step to real equality through “Brown vs. Board of Education.”

}Drafting the Constitution quickly produced the Bill of Rights, but in general, human rights have not expanded for Americans in the ensuing centuries. And bills like the Patriot Act have actually set them back. For all our proud independence, we still do not have the right to privacy fixed in law. Nor total sexual freedom among consenting adults. HIPAA laws limiting access to medical records seem to now keep them only from the patients themselves.

}It took over a century from the creation of our democratic republic to move from voting by certain classes of men, to voting by certain women. And then another half-century to finally establish voting by everyone.

When the country is really serious about something, it takes clear action: for the most part, wars, financial regulation (Glass-Steagall Act (1933), that Patriot Act, and the abolition of slavery each were enacted in one fell swoop.

So when someone tries to tell you the current Health Bill is “a great first step”—or even “a great baby step we can build on”, think about whether legislative history suggests these are credible claims.

And think about what would happen if we let this step-by-step fantasy play out. Look at the challenges facing such a scenario:

1. First, everyone will say we must be sensible and see how this bill works out. It’s in-built timetable assures we won’t have a new system “up and running” to know what’s not working until at least 2025. That’s four Presidential elections and at least 3 Presidents from now.

2.Last week, National Public Radio reported the results of a cost study on the current draft bill. According to the Henry J. Kaiser Family Foundation, the average employer-provided health insurance policy is currently on track to cost about $31,000 in 2019. The Foundation projects average family income at $50,000. This is not a misprint. Over 60% of income will go to pay health premiums based on the current Congressional drafts.

3. Put aside the 30 million extra premium payers in this bill for a moment. What stakeholder with leverage will stand up for the final 8-12% uninsured in 2025, to meet this President’s pledge of universal coverage?

4. What stakeholder with leverage will stand up for an absolute cap on health spending growth in 2025 when the President promises the failure to control overall costs will destroy our recovery before then?

5. What stakeholder with leverage will get health professionals to make the slightest financial sacrifice to achieve affordability in the system?

6. What stakeholder in 2025 will stand up and say ‘60% health premiums that deny us food and shelter must be cut in half’?

7. Finally, what stakeholder with leverage will ever say: ‘This country is based on competition. American health reform MUST include competition, not within, but independent of existing health insurers’?

Now ask yourself: is it realistic to think any of this scenario could retroactively fix the structural flaws that make it impossible to expand or build the current drafts into an efficient, American-style solution, through baby steps.

Is it ever likely we’ll achieve health reform success in parts? Effective, economic national health systems exist on every inhabited continent. All were created whole-cloth, through single acts that did not cost an arm and a leg. Please remember that in the late 40’s, when Britain was still on rations and on its knees, an affordable, universal health system with cost controls, was set up in a very short time. This is fact, not fable.

Why is America the only nation incapable of looking over a score of long-successful health systems and choosing one that’s already proven and adapt it to best suit us?

Either we do this or we are doomed to a failure we cannot afford. Think not? Eerily, over 170 years ago, Hans Christian Andersen sent a message for our time:

Andersen wrote in his fairy tale: “What a splendid idea," thought the Emperor. "What useful clothes to have. If I had such a suit of clothes I could know at once which of my people is stupid…”

Bottom Line: What’s happening now is a distraction. This is not about Congressional negotiations. With great sadness, we must face these facts. Will the Emperor prevail or will we be as wise as the people at the end of the fairy tale, by seeing the truth...

And starting over.

Footnotes:

"Health Cuts With Little Effect On Care,"The New York Times, December 30,2009 http://www.nytimes.com/2009/12/30/business/economy/30leonhardt.html?partner=rss&emc=rss

1. "Comparing the House and the Senate Health Care Proposals: Public Plan," The New York Times, December 19, 2009 http://www.moveon.org/r?r=85859&id=18398-17397961-OzOYRBx&t=5

"The House Bill and the Senate Bill," The Now! Blog, December 21, 2009 http://www.moveon.org/r?r=85861&id=18398-17397961-OzOYRBx&t=6

"Why We Need a Public Health-Care Plan," The Wall Street Journal, June 24, 2009
http://online.wsj.com/article/SB124580516633344953.html

"Why a public health insurance option is key to saving costs," Economic Policy Institute, June 25, 2009 http://www.moveon.org/r?r=85866&id=18398-17397961-OzOYRBx&t=7

2. "Assessment of Affordability Provisions in the Exchange in House (H.R. 3962) and Senate (H.R. 3590) Health Reform Bills," Health Care for America Now
http://hcfan.3cdn.net/46590729111c307ccc_lom6b3a6r.pdf

"Finishing Reform Right: Fixing affordability before the President signs a health care bill," The Now! Blog, December 22, 2009 http://www.moveon.org/r?r=85867&id=18398-17397961-OzOYRBx&t=8

"Comparing the House and the Senate Health Care Proposals: Individual Mandate," The New York Times, December 19, 2009 http://www.moveon.org/r?r=85860&id=18398-17397961-OzOYRBx&t=9

"The House Bill and the Senate Bill," The Now! Blog, December 21, 2009
http://www.moveon.org/r?r=85861&id=18398-17397961-OzOYRBx&t=10

"Senate health bill is launch pad," Jacob Hacker, December 22, 2009 http://www.po/litico.com/news/stories/1209/30871.html

3. "Comparing the House and the Senate Health Care Proposals: Abortion," The New York Times, December 19, 2009 http://www.moveon.org/r?r=85862&id=18398-17397961-OzOYRBx&t=11

4. "Comparing the House and the Senate Health Care Proposals: Paying for the Proposals," The New York Times, December 19, 2009
http://www.moveon.org/r?r=85863&id=18398-17397961-OzOYRBx&t=125.

"Comparing the House and the Senate Health Care Proposals: Insurance Regulations," The New York Times, December 19, 2009 http://www.moveon.org/r?r=85736&id=18398-17397961-OzOYRBx&t=136.

"H.R. 3962, Affordable Health Care for America Act," Congressional Budget Office, November 20, 2009 http://cbo.gov/doc.cfm?index=10741

"Patient Protection and Affordable Care Act," Congressional Budget Office, November 18, 2009
http://cbo.gov/doc.cfm?index=10731

"REPORT: How the Senate Bill Compares to Other Reform Legislation," Think Progress, November 19, 2009 http://www.moveon.org/r?r=85670&id=18398-17397961-OzOYRBx&t=14

Galapagos #2: Survival Against All Odds

2009-12-21T14:35:00.000-01:00

Photos: Tracy & Sean Haling

By Sandy Prisant

One species that Darwin did not directly study in his time in the Galapagos was our own.

Thankfully, the Ecuadorian government has remedied this omission. It requires every visitor, prior to departure to drop in on a straightforward, historic presentation of mankind and its buffoonery in the unfolding Galapagos saga. Nothing as sinister as reliving Nazi camps at the Holocaust Museum. Here, we just come off as a race of imbeciles.

What Darwin did not envision in his revolutionary, evolutionary theory about the natural order of life, was how hard human kind would work to undermine everything he discovered, even though the first hint of ourselves as the main threat, came with the very first discovery of the Islands.

An expedition led by the 4th Bishop of Panama stumbled upon the Galapagos in 1535. His first report suggested colossal stupidity. Fray Tomas de Berlanga (Bishop from 1530-1537) wrote back to Charles V, Holy Roman Emperor and King of Spain:

“…many sea lions, turtles, iguanas, tortoises; many birds like
those from Spain, but silly that they didn’t know how to
flee and many were caught by hand…”

It’s important to put those comments in context. Darwin’s work had the effect of questioning Divine Creation. Essentially he was challenging theological dogma that pre-dated him by almost two millennia.

It was the great irony of Darwin’s life. He had rejected science by dropping out of medical school at Edinburgh University, to study theology at Cambridge--with the intent of becoming a clergyman in the Church of England. He wound up becoming the scientist who upset the theological apple cart.

Much of the Church’s basic teaching about man’s divine nature, particularly at the time of Fray Tomas De Berlanga, focused on our species and our planet as the center of everything. The argument went that God gave humans special gifts, precisely so that we could dominate all other species. So that we could in turn be at the center of the center—if not gods ourselves, Princes of the Universe, at least.

So by simply observing the finch and finding 13 subspecies, with beaks adapted to different conditions on different islands, Darwin was not just doing a modest study, as part of a 4-year mapping and nature expedition. He was indirectly questioning the very premise underlying much of Church ideology. He was, based partly on just five weeks in the Galapagos and only 19 days on land, questioning the very essence of divine creation.

And what better support could Darwin have had beforehand to make his point, than from the Church itself. In this case, through a pioneering bishop whose own divine creation does not seem to have been dealt from a full deck.

While the Englishman’s work had an unprecedented impact on Western thought, little of that stunning new understanding of life helped to protect the Galapagos. In the centuries after the Bishop’s visit, at least a half-dozen destructive attempts to mercilessly exploit the islands and their peaceful inhabitants all ended in commercial and ecological disaster. From the slaughter of 250,000 (98%) of the giant tortoise population to the slaughter of men in the misguided creation of a first prison colony in the 19th century that failed , to an even more misguided concentration camp in the 20th century. Unsurprisingly that, too, failed after another brutal uprising.

But that wasn’t the half of it. How incompetent has man been as stewards of this global treasure?
Before and after, let us count the ways:

1800’s—Ill-conceived sugar plantations that produced few crops but great environmental damage.

1830’s—Ill-conceived dye production that produced greater environmental damage.

1860’s---The Great Powers (including the US), tried to rape the Islands, smash and
grab the resources and wrest them from Ecuador. (So much for the Monroe Doctrine,
both politically and ecologically.)

1927-28---Norwegians are urged to colonize the Galapagos in the late 20’s. The
Ecuadorian government described their attempts at commerce and settlement as
leading them to become “disillusioned and sick from loneliness”. The majority of these
brave pioneers fled back to Norway in less than a year.

1929---The final attempt at emigration turned paradise into a sordid,
violent Peyton Place, as Europeans brought all their desires and neuroses with them.
It led quickly to adultery among the few families, broken homes, and mysterious
disappearances at the turn of the decade. The blue-footed booby had never seen
the likes of such gross behavior. Photo: Susan Prisant

The Bottom Line: As the government now openly admits in it’s museum presentation:

“close to four centuries of exploitation of the natural riches of the Galapagos did not only cause deterioration in the environment, but also ended with tragic cost in human lives.”

And yet, against all odds, the Galapagos have managed to overcome mankind’s destructive influence. While Hawaii struggles to sustain 5 (five)% of its indigenous species, the Galapagos have managed to hold on to 95% of theirs.

It is not Darwin that should attract you to these islands. It is all those species that attracted him as well. Species which have each figured out how to find a decent, tolerable place within their world.

Leaving only the “divinely created” human race—masters of all they survey—utterly adrift.

The Galapagos Islands: Lessons From the Locals

2009-12-13T17:37:00.000-01:00

All Photos: Sean & Tracy Haling

By Sandy Prisant

Santa Cruz Island, Ecuador—In less than four hours you can escape the empty calories of American politics and arrive in Ecuador—where the jewel in the crown is the Galapagos Islands.

Don’t misunderstand. Ecuadorian politics are full of empty calories, too. (Now, wide-ranging daily blackouts are causing havoc everywhere in the country—the direct result of 20 years’ gross negligence in maintaining/expanding the national electric grid.) After all, this was one of those Banana Republics.

But that electricity havoc is in the regions dominated by man and his ways. In the Galapagos, 550 miles offshore in the Pacific, and the one Federal State largely controlled by wildlife, there is a calm, serene and rational world. The difference is striking. Here, there really is the Law of the Jungle. No pretense. Mother birds abandon their eggs to save themselves. Bluntly, cute things are eating other cute things the whole time. But there is no neuroses about it.

Yes, I know, underneath our suits we’re running the same Jungle-based system, but somehow, it’s not the same. Rather than harmony and effectiveness, our revered free will and political liberties have given us unsolvable Afghanistan, Iraq, Iran, and an inability to engage each other in discussion on profound social issues:

1. Congressional members have government health coverage they shamelessly deny to the very people they were allegedly elected to serve. We’ve been patiently awaiting a real solution since the 1st national health bill was proposed in 1917.

In the Galapagos, no vermillion fly catcher, no sea lion has had anything vital awaiting action since 1917.

2. Years too late, we still don’t know how to kick-start a real legislative discussion on the first timid attempts to control a small fraction of carbon emissions.

In the Galapagos, not a single species needs to burn carbon to function. When its cold, marine iguanas pile up--lying on top of each other to keep warm, for the common good (a concept we’ve relegated exclusively to campaign speeches). When it’s too hot for a pregnant sea turtle to come ashore, they simply hover in the cool Pacific, a few feet out, waiting patiently for the sun to go down and the temperature to drop below 70F naturally, so they can come ashore safely and build their nests.

I’m unaware of other species that need to make unrecyclable waste or burn fossil fuels to survive or flourish. Not even ones like the woodpecker finch here, that use tools. Why is that?

3. And in the “the community of nations”—our specie’s own system—corruption thrives. From corruption we know about in Afghanistan. To corruption we don’t. Ecuador for example. As ire and shame rise with the electricity fiasco, there are a million excuses. One features the international shrug of helplessness, accompanied by the lament, “Ecuador is poor.”

And then one day I met a man who has lived his life in the Galapagos. Just a normal man. But he was adamant.

“Ecuador is NOT poor. Ecuador is rich. In natural resources and corruption.”

Possibly he’s been effected by all the creatures literally around him—none of whom are corrupt; none of whom risk the future of their tribe for personal gain.

We often hear our own failings glossed over with the words, “it’s a messy system, but we’re free.” Well, we’re now reaching the point on a dozen fronts that make “messy” a poor euphemism for melting ice caps and a melting middle class.

The word “free” is losing meaning, too. The unspeakable fact is we’ll never return to 5% unemployment. (And if you can’t work, you can’t eat and that leaves little room for new ideas or creative individual action.)

So here’s the balance sheet: on the one hand we have thousands of species, most having prospered for eons longer than humans have existed, by doing sensible things every day—no frills, or greed or egos.

On the other hand, we have just one race in which a few hundred years ago, some presumed wise leaders gave away all of Manhattan for beads. And less than a decade ago, almost 50% of American voted to get 2% of them a tax cut. Such folly does not occur within species endemic to the Galapagos.

What really makes places like this so rare and appealing to us is that we are in the presence of other sentient beings who act without guile, contempt or hubris in their dealings with others. It’s not only unique to have a giant tortoise and every other species one foot away from you and not hiding. It’s also that they do not, unlike humans, change behavior in any way. Not scaring you or impressing you or wanting a damn thing from you. No contempt. No fraud. No games. In short, none of the falseness that informs initial meetings between most humans. It is this that is the most rare of experiences and actually explains why tourism to these volcanic islands doubled in recent years. And then doubled again.

It is what we crave and cannot find amongst our own kind, anywhere. This difference begins with all other species naturally or through evolution, being able to live in complete harmony within their environmental system; where all is based on rational, efficient instincts that allow the system—their world—to flourish. Every penguin, every finch looks energetic and well-fed. Apparently their system is in balance.

Only we are evolving in exactly the opposite direction, allowing less and less in our lives—and theirs—to thrive. Why is this happening?

In explaining what went wrong with the US economy, former Federal Reserve Chair Alan Greenspan testified that it was shockingly simple: “It never occurred to me that CEO’s and CFO’s would not act in a rational manner and in the best interests of their companies. All Fed policies hinged on that one premise.”

If Mr. Greenspan had spent 5 weeks here as Darwin did, it might have helped.

For sadly, the Federal Reserve could only work on Greenspan’s premise if it were purpose-built for the rational, efficient locals of the Galapagos.

Thank You, Sandra Cisneros

2009-11-04T19:13:00.000-01:00

By Claudia Ricci

It is a Monday in early November. Mid-day. A milky sky is overhead. Sunshine has been missing for days, maybe weeks. The breeze is up, and yellowing leaves are cascading to the streets.

The woman is a writer, but lately, she hasn’t been writing.
She’s been fighting to write. Dying to write. Desperate to write.

But lately, she’s begun to face reality: it just isn’t happening. As her husband gently pointed out the day before, as they toured an art gallery, “you can’t force it.”

Today, she is grading a few papers, and preparing for her class at the university. She opens a book. She begins to read the words of Sandra Cisneros, who has written a new introduction to her classic work, The House on Mango Street.That book is 25 years old this year and in her introduction, Cisneros is telling the story behind the story, how the book – a set of marvelously poetic vignettes – came to be.

The House on Mango Street is much more than a story about a house. It is the tale of a quest. It tells in vivid bursts of language the story of a young Latina woman named Esperanza, whose name translates into “hope.” The book is about Esperanza’s growing up in Chicago, and the painful realities she faces in her neighborhood.

It is also the story of Esperanza’s invention of herself in words. It is about the place of quiet serenity that Esperanza – and Cisneros herself—seeks. It is about a place in a rundown Chicago neighborhood and a place beyond, a space into which she can escape: “a house quiet as snow, a space for myself to go, clean as paper before the poem.”

When the woman reads Cisneros’ words, she is sitting at her kitchen table in her apartment in the heart of Washington, DC. It is quiet, except for the occasional garbage truck backing up, loading: there is the crunch and fracture of recycled glass.

She is calmly eating a salad for lunch. But somehow, the urgency of Cisneros’ words makes her heart beat a little bit faster. This is what she reads:
“She thinks stories are about beauty. Beauty that is there to be admired by anyone, like a herd of clouds grazing overhead. She thinks people who are busy working for a living deserve beautiful little stories, because they don’t have much time and are often tired. She has in mind a book that can be opened at any page and will still make sense to the reader who doesn’t know what came before or comes after.”

The woman thinks about what she has read. She thinks about a book that can give tired and stressed people something that will boost their tired spirits. She thinks about the people she knows who read the Bible. How some of them pick it up and open it at random, and let their eyes fall on some words that give them hope. Comfort. Inspiration.

She thinks about the world around her. The world she sees on CNN, and in the newspapers, and on-line. She thinks about the constant reports about swine flu, about the deaths of soldiers and civilians in Afghanistan and Pakistan. About the bombs in the Middle East.About the tensions in Iran and elsewhere.
She thinks about the problems some of her dearest friends are facing. They would like to be working for a living but they have lost their jobs. They are now in danger of losing their homes. They have no health insurance.
She thinks about the way stories operate. About how important they are to our lives. About how they give us food for thought.Nourishment for our souls.She thinks about how they show us what is good – and what is not so good – about being human. About how they instruct us. And distract us, from the stress and monotony of our lives.

She keeps reading what Cisneros wrote:
“She experiments, creating a text that is as succinct and flexible as poetry, snapping sentences into fragments so that the reader pauses, making each sentence serve her and not the other way around, abandoning quotation marks to streamline the typography and make the page as simple and readable as possible. So that the sentences are pliant as branches and can be read in more ways than one.”

And with that, the woman puts down her fork and stops eating her salad. She goes to the other end of the kitchen table, to her laptop. She has to write. Something.

A story. Yes, a story. She’s not sure what she will write.But she will write a story. As she starts, the sun is suddenly sending bold stripes of light across the wooden floor of the apartment.

She begins typing, and then she thinks to herself, oh yes,I should write a thank you note, before I forget, to Sandra Cisneros.

Writer and Professor Claudia Ricci is on sabbatical teaching at Georgetown University. Her first novel, Dreaming Maples, is available through Amazon.com. She is a founding Contributor to Wordsmith Wars.