The American Bear

› There is no Santa Claus and Bill Clinton was not an economic savior | Dean Baker

The truth is often painful but nonetheless it is important that we live in the real world. Just as little kids have to come to grips with the fact that there is no Santa Claus, it is necessary for millions of liberals, including many who think of themselves as highly knowledgeable about economic matters, to realize that President Clinton’s policies sent the economy seriously off course.

In Washington it is common to tout the budget surpluses of the Clinton years as some momentous achievement, as though the point of economic policy is to run budget surpluses. Of course the point of economic policy is to produce an economy that improves the lives of the people in a sustainable way. Clinton badly flunked this test. 

The Clinton economy was driven by a stock bubble. This is not a debatable point. The ratio of market-wide stock prices to corporate earnings was well over 30 to 1 at the peak of the bubble in 2000. This is more than twice the historic average.

This run-up in stock prices drove the economy in two ways. First, since any good huckster could make millions selling shares in dot.whatever, we had many hucksters starting nutball businesses that never had a prayer of making a profit. This is not much of a long-run economic strategy, but in the short-term it led to an increase in investment.

The other way that the bubble drove the economy is through the wealth effect on consumption. The run-up in stock prices generated roughly $10 trillion in bubble wealth. The wealth effect from stock is usually estimated to be 3-4 cents on the dollar. This would mean that the bubble generated between $300 billion to $400 billion annually in additional consumption. This would have been 3-4 percent of GDP at the time ($480 billion to $560 billion annually in today’s economy). This is born out in the Commerce Department’s data, which show that the saving rate fell from close to 7 percent at the start of the 1990s to around 2.0 percent at the peak of the bubble in 2000.

This was the economy that President Clinton handed to President Bush in January of 2001. It was an economy that was being carried by an unsustainable bubble that in fact already was in the process of deflating at the time Bush took office. The S&P 500 was more than 10 percent below its 2000 peak, and the NASDAQ was down by more than 40 percent on the day that Bush took office. This pretty much guaranteed the recession that began in March of 2001 just as the collapse of the housing bubble placed President Obama in the middle of terrible recession in January of 2009.

The 2001 recession was the main reason that the surplus vanished in the 2002 fiscal year. Directing tax cuts to the wealthy was a foolish policy response to the downturn, but it was reasonable to turn to fiscal stimulus after the collapse of the stock bubble just as it was reasonable for President Obama to turn to fiscal stimulus after the collapse of the housing bubble. The Bush tax cuts did provide a boost to the economy; although they would have provided a larger boost if this money had been directed at moderate and middle-income people or devoted to long-term investments such as education and infrastructure. [continue]

› 10 reasons why we won't stop climate change

climateadaptation:

List by Tom Giesen, an adjunct professor at University of Oregon. I edited it down some, for the entire post, visit here. I’ll add that, generally, I personally cannot see how we’re going stop the climate from changing. Too many people in the world are starting to want - and get - TVs, laptops, cars, and a single family home. Who are we to deny them?

1. Delayed consequences. Warming is a current phenomenon, but most of the damage is in the future, like a time-delayed bomb – we emit now and suffer the consequences later. Because it is a future event, neither citizens nor politicians feel sufficient urgency. 

2. Belief in the necessity of growth! The sanctity of growth in the economy and in population is the real American religion. What all cities/communities want is more economic and population growth. But growth is now impossible without cheap and abundant fossil fuels, and they are finite and becoming prohibitively expensive – causing recessions.

3. Energy cornucopia! The “booms” in oil and gas are mostly just Wall Street bubbles like the real estate and internet bubbles of recent years. Conventional (cheap) fossil fuels are declining resources, and fracked, deep water, oil sands and arctic sources are prohibitively expensive. But no matter – the press is still full of empty chatter about the US out-producing Saudi Arabia and being energy independent.

4. Individualism. Devotees of individualism dislike cooperative processes, preferring go-it-alone methods. Cutting emissions requires a globally cooperative effort, and such cooperative projects might feel to individualists like unacceptable collectivism, and hence resisted. 

5. Anti-intellectualism. Many in America have not moved beyond medieval science. Rationality does not often apply in scientific issues with political overtones, or with personal preferences, and hence global warming, the end of cheap oil, and other issues are falsely labeled as scientific frauds by opponents of science.

6. American exceptionalism. We imagine we are different from other nations, and many Americans accept that we are not subject to the same rules as other nations.

7. Failure of international cooperation. It is nearly universally believed that the solution to the problem of warming lies in global treaties involving all nations and dealing with emissions reductions and related equity/financial issues. It’s now 25 years since James Hansen warned Congress, and we have done nothing. Nothing.

8. Difficulties of monitoring and assuring compliance. How do you closely monitor emissions of a gas which quickly diffuses globally in the atmosphere? How do you closely monitor all production and use of fossil fuels? How do you monitor and control land use change (deforestation) before the deed is done? Etc.

9. Greed. Greed permeates political life: worldwide, governments’ subsidies to fossil fuel producers now total $100,000,000,000 a year, and subsidies to consumers are $675,000,000,000. The subsidies are like crack cocaine – the addiction is extremely difficult to treat.

10. Disinformation. The fossil fuel industry lavishly funds global warming deniers and skeptics – the “lavish” funding is chump change in view of current profits.

If we follow the path we are on, the path of no cutting back on emissions, and in fact the path of continued increases in the rate of increase of emissions, our civilization will very possibly collapse.

Via Juan Cole

› On the Coming Surveillance State

Google is presently working on context-based advertising that will use environmental sensors in your cell phone, laptop, etc., to deliver “targeted ads tailored to fit with what you’re seeing and hearing in the real world.” However, long before Google set their sights on context advertising, facial and iris recognition machines were being employed, ostensibly to detect criminals, streamline security checkpoints processes, and facilitate everyday activities. For example, in preparing to introduce such technology in the United States, the American biometrics firm Global Rainmakers Inc. (GRI) turned the city of Leon, Mexico into a virtual police state by installing iris scanners, which can scan the irises of 30-50 people per minute, throughout the city.

Police departments around the country have begun using the Mobile Offender Recognition and Information System, or MORIS, a physical iPhone add-on that allows police officers patrolling the streets to scan the irises and faces of suspected criminals and match them against government databases. In fact, by 2014, the FBI plans to launch a nationwide database of iris scans for use by law enforcement agencies in their efforts to track criminals.

Corporations, as well, are beginning to implement eye-tracking technology in their tablets, smartphones, and computers and the technology is likely to hit a mass market at least by 2015. It will allow companies to track which words and phrases the user tends to re-read, hover on, or avoid, which can give insight into what she is thinking. This will allow advertisers to expand on the information they glean from tracking users’ clicks, searches, and online purchases, expanding into the realm of trying to guess what a user is thinking based upon their eye movements, and advertising accordingly. This information will come in handy for police agencies as well, some of which are working on developing predictive analysis of “blink rates, pupil dilation, and deception.”

In ideal conditions, facial-recognition software is accurate 99.7 percent of the time. We are right around the corner from billboards capable of identifying passersby, and IBM has already been working on creating real world advertisements that react to people based upon RFID chips embedded in licenses and credit cards. [read more]

› Half measures and the limits of legitimacy in American politics | Mark Levine

[You’ve] no doubt come across the famous Bush administration quote, since attributed to Karl Rove, making light of what “we” - he and other masters of the universe - derisively referred to as the “reality-based community”. Rove defined this community (mostly composed of supposedly left-wing journalists, academics, scientists and activists) as being composed of people who “believe that solutions emerge from your judicious study of discernible reality… That’s not the way the world really works anymore. We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality - judiciously, as you will - we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors… and you, all of you, will be left to just study what we do”.

Rove’s remarks, as the allusion to empire indicates, were made in reference to the foreign wars and occupations launched by the Bush administration. But in fact, they perfectly capture the way domestic policy was administered under Bush as well, a dynamic that has sadly continued well into the Obama administration where, despite early promises to base policy more on science and the public interest ideology and corporate greed continue to dominate most every aspect of his administration’s governance.

There are several reasons behind this dynamic. The first has to do with the immense power industries such as the chemical, petroleum, agribusiness and tobacco industries, have had for more than a century to shape public opinion and knowledge in a manner that directly contradicts science. As David Michaels showed in his 2008 book Doubt is Their Product, about the power of the tobacco industry to sew confusion over the extent of the danger posed by cigarettes to the health of smokers, when immensely wealthy and political powerful corporations have unlimited funds to discredit mainstream scientific consensus it produces a level of cognitive dissonance among the public.

When faced with such contradictions, the majority will more often than not turn against, or at least ignore, science rather than turning against the corporations trying to fool them, at least for a while. Corporations are selling them products which, at least in the short term, make them feel good or make their lives easier, while scientists are invariably demanding that people make exceedingly difficult changes to most every facet of their lives (what they eat, smoke, drink, drive, wear, use in their homes) or face personal and collective disaster. Until disaster is staring them in the face, most people would rather ignore reality and continue with negative [++]

› Beyond the Politics of the Big Lie: The Education Deficit and the New Authoritarianism | Henry Giroux

The American public is suffering from an education deficit. By this I mean it exhibits a growing inability to think critically, question authority, be reflective, weigh evidence, discriminate between reasoned arguments and opinions, listen across differences and engage the mutually informing relationship between private problems and broader public issues. This growing political and cultural illiteracy is not merely a problem of the individual, one that points to simple ignorance. It is a collective and social problem that goes to the heart of the increasing attack on democratic public spheres and supportive public institutions that promote analytical capacities, thoughtful exchange and a willingness to view knowledge as a resource for informed modes of individual and social agency. One of the major consequences of the current education deficit and the pervasive culture of illiteracy that sustains it is what I call the ideology of the big lie - which propagates the myth that the free-market system is the only mechanism to ensure human freedom and safeguard democracy.

The education deficit, along with declining levels of civic literacy, is also part of the American public’s collective refusal to know - a focused resistance on the part of many members of society to deal with knowledge that challenges common sense, or to think reflectively about facts and truths that are unsettling in terms of how they disturb some of our most cherished beliefs, especially those that denounce the sins of big government, legitimize existing levels of economic insecurity, social inequality and reduced or minimal government intervention in the field of welfare legislation. The decline of civility and civic literacy in American society is a political dilemma, the social production of which is traceable to a broader constellation of forces deeply rooted in the shifting nature of education and the varied cultural apparatuses that produce it, extending from the new digital technologies and online journals to the mainstream media of newspapers, magazines and television. Politics is now held hostage to what the late Raymond Williams called the “force of permanent education,” a kind of public pedagogy spread through a plethora of teaching machines that are shaping how our most powerful ideas are formed. For Williams, the concept of “permanent education” was a central political insight:

What it valuably stresses is the educational force of our whole social and cultural experience. It is therefore concerned, not only with continuing education, of a formal or informal kind, but with what the whole environment, its institutions and relationships, actively and profoundly teaches…. [Permanent education also refers to] the field in which our ideas of the world, of ourselves and of our possibilities, are most widely and often most powerfully formed and disseminated. To work for the recovery of control in this field is then, under any pressures, a priority. For who can doubt, looking at television or newspapers, or reading the women’s magazines, that here, centrally, is teaching and teaching financed and distributed in a much larger way than is formal education. [++]

› Ponzi's End | James Howard Kunstler

Way up here in the heartland, far from the craft beer parlors, Facebook stock bucket shops, and gender obsessions of the mythical Urban Edge People, the detritus of your country is up for sale. The lawns are strewn with the plastic effluvia of lives lived through humankind’s weirdest moment: Pee Wee Herman action figures, creeping tot tables, failed kitchen appliances that created more labor than they were designed to save, extruded plastic this-and-that, unidentifiable knick-knacks of forgotten sitcoms, Jimmy Carter Halloween masks, trikes brittle and faded from ultraviolet exposure, artworks conceived in a Zoloft fog, pre-owned cat litter boxes, someone’s deceased mother’s lawn fanny, the complete works of Jacqueline Susann, a savings bank in the shape of an outhouse….

The puzzling part is that every lawn sale contains exactly the same array of useless and pathetic objects. Is this how a Ponzi culture meets its end: the terminal swap-meet beyond which no horrifying object meets any mystifying desire for acquisition? If this is where consumer culture crawled off to die, then what possible zeitgeist awaits a people left so hopelessly de-cultured on aspiration’s lowest ladder-rung? [more]

› Messing With Our Minds: The Ever Finer Line Between News and Advertising | Kingsley Dennis (2)

Today’s media, which includes the dominant presence of advertising, extensively uses the notion of “attractors” and “attractor patterns” to target audience consciousness. This type of symbol manipulation is often referred to in the business as neuromarketing. Mainstream media corporations are using the huge growth in global communications to further shape their science of targeting human consciousness. In the case of neuromarketing, many advertisers first audience-test their commercials using brain-scanning techniques in order to know which part of a person’s brain is being activated by the specific strong attractors. For example, it has been discovered that specific attractors can bypass the logical part of the brain and impact the emotional part. In such cases as the film industry, the advertisers place an award symbol (such as an Oscar or Golden Globe) which has proven to be an effective “strong attractor” which influences the emotional part of the brain. The philosophy here is to adjust the level of consciousness of an advertisement in relation to the measurable level of consciousness of the consumer. Advertisers are aware that a person’s consciousness passes on messages indirectly to the body in the form of galvanic skin response, pupil response, electrical nerve response, etcetera, and so every element of the screen promotion must elucidate the correct conscious reception. In order to achieve this correct set of attractor patterns, all elements of the advertising package are deliberately worked on: the music, the visuals, the script, the voice. Interesting, symbolic strong attractors that have the most impact to persuade the audience include visuals such as smiley faces and cute animals (dogs wagging their tails and kittens purring). In terms of voiced attractors, they include words such as “honesty,” “integrity,” “freedom,” “hope and change,” “friendship,” etcetera. From here, it is clear how politicians use a great deal of these attractor patterns in their speeches and promotional material.