Beginning in about 1985 and culminating at the close of 1991 we were witness to the demise of the Union of Soviet Socialist Republics, and the collapse of Authoritarian Communism as an economic and political/military force. It is conceivable that beginning in 2007 with a potential culmination 5 to 6 years later we are witness to a similar fate for the United States of America, and Democratic Free-Market Capitalism as an economic and political/military force. As with Authoritarian Communism, Democratic Free-Market Capitalism (DFMC), has begun to collapse, and once the economic power is sufficiently eroded the political/military power will follow.
The process of nationalization of the financial services sector of our DFMC has begun and it does not seem possible that that this will be a short-lived intervention. As the pendulum of regulation swings rapidly toward government control, and more of the populace experiences some level of distress due to the free-wheeling free-market excesses, there will be increasing demands to push for more controls and regulations. Close on the heals of government intervention and ownership of the financial services piece of the economy will be government ownership of the automotive industry and much of the energy industry especially the non-carbon-based sectors as we necessarily move into alternative energy development. There will be additional steps away from private/corporate control and ownership to government control and ownership. Health care insurance and perhaps the health care industrial complex is obvious, and if the state governments get their way with a federal bailout of their own there will be a natural move toward a stronger federal government and a reduction in the autonomy states now enjoy.
This will obviously cost gazillions of dollars. Those dollars will not come from increased tax revenues nor will they generate from income derived from the massive investments the federal government will be making. Those dollars will come from the printing press. The dollar will be drastically devalued. Loans by other countries to the US will no longer be an attractive investment. The US will probably lose it’s status as the world’s marketplace removing the final reason for other countries to continue to prop up what little value the dollar retains. Our DFMC will have lost all economic power, without which there is no political/military power. When the United States is no longer the consuming engine of the global economy it becomes just another country.
We had plenty of warnings that our DFMC was in trouble and needed fixing. The blow-up of the Tech Stock Bubble was a wake-up call that the “New Economy” had some holes. The Blow-up of Enron, the massive energy giant that had no energy but did have energy derivatives was another warning. Our DFMC has become an economy based on side bets. Now that it is time to pay up, we see that there’s really no money in the pot.
I really hope that Barack Obama is convincingly elected President and that there are no meaningful court challenges to the election results. I follow that hope with another. That Barack Obama immediately begins telling us the truth. The sooner we hear it the sooner we can begin moving on. The sooner we can come to the understanding that Democratic Free-Market Capitalism is in the process of collapse and what’s ultimately left will be as different from what we had as Authoritarian Communism is from it’s replacement; Authoritarian Capitalism. We will remain democratic, we will become somewhat socialistic. We will be less rich, and therefore, less powerful, and I hope much less apt/able to wage war. I would not be surprised to also see a rapid change from Authoritarian Capitalism to, Authoritarian Having-Socialistic-Tendencies; as without it Russia will soon face another economic collapse. When we quit pointing missiles at them from their back yard, and quit trying to isolate them by supporting puppet governments in neighboring countries and inviting them into NATO, we’ll find that when our economic structures are pretty much the same, differences in governmental structure doesn’t really matter that much.
In the absence of economic power and therefore political/military power, we will be less able to support the 60 years old occupation in the Middle East by European Jews. Unfortunately they have weapons of mass destruction (WMD) and are probably willing to use them. Perhaps I’ll have more to say about that ……
Friday, October 31, 2008
Thursday, October 16, 2008
on the "change" that Obama and McCain promise
I really didn’t want to post anything here about politics, especially during the presidential campaign and election, but I have some observations and no other inspiration.
The third and final presidential debate is over. Neither candidate chose to tell the truth. The reason is probably because in their mind and in the minds of their handlers, the one who went with the truth would surely lose the election. It seems they believe Americans can’t handle the truth and are much happier being told fairy tales.
I just wish both of them had the huevos to say “Its bad. We are in a recession that will probably be deep and long. It will be a painful time for many, if not most Americans. It is a global recession and so we will not be alone in our misery. Recovery will be slow. It took a long time to get into this mess, and we will not get out overnight.”
The reactionary right in this country should be very happy with an Obama win. Recovery from this recession will require inflation. It will actually be deflation of the value of the dollar, but the visible effect will be things costing more, dollars buying less and incomes will not increase to offset the loss in buying power. This can be blamed on whoever is president during the next 4 year term, making it very easy to defeat him in the next election. No matter what government programs are dreamed up and set in motion over the next couple of years, it will be very hard for us, four years from now, to answer in the affirmative to the question “are you better off now that four years ago?”
Whoever the republicans nominate four years from now will have a very good chance of winning, and therefore be in a position to take credit for a growing economy that benefits from the recovery efforts of the previous four years.
What a shame it is that when we finally get out from under the “we can’t have a president who isn’t a pasty old white guy”, that the first one to break the mold is faced with a broken economy that will not be fixed before the term is up; thereby, paving the way for a return to pasty old white guy candidates.
I hate to say it but I believe that California will probably lead us into the new economy. That is if it doesn’t burn up completely or shake apart before hand. Out of California comes leadership in solar innovation. Unfortunately everything being produced has been sold in advance to Germany who leads in the application of solar innovation, and they don’t have half the sunshine we have. Also out of California comes the best in non-fossil/bio fuel transportation innovation. There is vision in the country. T. Boone Pickens has vision. Our government has to get behind the innovators. It’s the only way we will build a new economy.
The third and final presidential debate is over. Neither candidate chose to tell the truth. The reason is probably because in their mind and in the minds of their handlers, the one who went with the truth would surely lose the election. It seems they believe Americans can’t handle the truth and are much happier being told fairy tales.
I just wish both of them had the huevos to say “Its bad. We are in a recession that will probably be deep and long. It will be a painful time for many, if not most Americans. It is a global recession and so we will not be alone in our misery. Recovery will be slow. It took a long time to get into this mess, and we will not get out overnight.”
The reactionary right in this country should be very happy with an Obama win. Recovery from this recession will require inflation. It will actually be deflation of the value of the dollar, but the visible effect will be things costing more, dollars buying less and incomes will not increase to offset the loss in buying power. This can be blamed on whoever is president during the next 4 year term, making it very easy to defeat him in the next election. No matter what government programs are dreamed up and set in motion over the next couple of years, it will be very hard for us, four years from now, to answer in the affirmative to the question “are you better off now that four years ago?”
Whoever the republicans nominate four years from now will have a very good chance of winning, and therefore be in a position to take credit for a growing economy that benefits from the recovery efforts of the previous four years.
What a shame it is that when we finally get out from under the “we can’t have a president who isn’t a pasty old white guy”, that the first one to break the mold is faced with a broken economy that will not be fixed before the term is up; thereby, paving the way for a return to pasty old white guy candidates.
I hate to say it but I believe that California will probably lead us into the new economy. That is if it doesn’t burn up completely or shake apart before hand. Out of California comes leadership in solar innovation. Unfortunately everything being produced has been sold in advance to Germany who leads in the application of solar innovation, and they don’t have half the sunshine we have. Also out of California comes the best in non-fossil/bio fuel transportation innovation. There is vision in the country. T. Boone Pickens has vision. Our government has to get behind the innovators. It’s the only way we will build a new economy.
Friday, October 10, 2008
On Ginkgo
From the New York Times - online
October 10, 2008, 11:03 am — Updated: 11:03 am -->
Ginkgo Holds Promise for Stroke Patients
A daily dose of the herbal remedy gingko biloba may help prevent brain damage after stroke, new research suggests.
The findings, published online in the medical journal Stroke, have been shown only in mice, but researchers say the studies support theories that ginkgo biloba may be a useful treatment for stroke patients.
A mouse study suggests ginkgo biloba may be a promising treatment for stroke patients. (Ruth Fremson/The New York Times)
“It’s still a large leap from rodent brains to human brains, but these results strongly suggest that further research into the protective effects of ginkgo is warranted,” said lead researcher Sylvain Doré, an associate professor in the Johns Hopkins department of anesthesiology and critical care medicine, in a press release. “If further work confirms what we’ve seen, we could theoretically recommend a daily regimen of ginkgo to people at high risk of stroke as a preventive measure against brain damage.”
In the series of mouse studies, scientists induced stroke in animals, including some that had previously been given various doses of ginkgo biloba. Normal mice that had been pretreated with the herb had 51 percent less neurological dysfunction than untreated mice, and areas of brain damage were reduced by 48 percent in the ginkgo group.
“Our results suggest that some element or elements in ginkgo actually protect brain cells during stroke,” Dr. Doré said.
About 700,000 people experience a stroke in the United States annually. Nearly nine out of 10 stroke sufferers experience ischemic stroke, which is caused by a blocked artery in the brain. The stroke itself can cause brain damage by depriving brain cells of blood. But toxic oxygen molecules, known as free radicals, also can cause additional damage after the clot is cleared.
Ginkgo biloba, which comes from a Chinese tree with fan-shaped leaves, may work to prevent further brain damage because it increases levels of an enzyme that eliminates free radicals around the stroke site in the brain.
“Ginkgo has long been touted for its positive effects on the brain and is even prescribed in Europe and Asia for memory loss,” Dr. Doré said. “Now we have a possible understanding for how ginkgo actually works to protect neurons from damage.”
Patients should talk to their doctor before taking gingko. One concern is that gingko thins blood, and patients at risk for strokes and seizures are warned against taking it. Ginkgo biloba should be discontinued at least 36 hours before surgery due to the risk of increased bleeding. Patients with bleeding or clotting disorders, or those who use warfarin, insulin and several other drugs, should also not take ginkgo.
To learn more about the risks and benefits of ginkgo, including warnings about its use, go to About Herbs, a Web site created by the Memorial Sloan-Kettering Cancer Center.
October 10, 2008, 11:03 am — Updated: 11:03 am -->
Ginkgo Holds Promise for Stroke Patients
A daily dose of the herbal remedy gingko biloba may help prevent brain damage after stroke, new research suggests.
The findings, published online in the medical journal Stroke, have been shown only in mice, but researchers say the studies support theories that ginkgo biloba may be a useful treatment for stroke patients.
A mouse study suggests ginkgo biloba may be a promising treatment for stroke patients. (Ruth Fremson/The New York Times)
“It’s still a large leap from rodent brains to human brains, but these results strongly suggest that further research into the protective effects of ginkgo is warranted,” said lead researcher Sylvain Doré, an associate professor in the Johns Hopkins department of anesthesiology and critical care medicine, in a press release. “If further work confirms what we’ve seen, we could theoretically recommend a daily regimen of ginkgo to people at high risk of stroke as a preventive measure against brain damage.”
In the series of mouse studies, scientists induced stroke in animals, including some that had previously been given various doses of ginkgo biloba. Normal mice that had been pretreated with the herb had 51 percent less neurological dysfunction than untreated mice, and areas of brain damage were reduced by 48 percent in the ginkgo group.
“Our results suggest that some element or elements in ginkgo actually protect brain cells during stroke,” Dr. Doré said.
About 700,000 people experience a stroke in the United States annually. Nearly nine out of 10 stroke sufferers experience ischemic stroke, which is caused by a blocked artery in the brain. The stroke itself can cause brain damage by depriving brain cells of blood. But toxic oxygen molecules, known as free radicals, also can cause additional damage after the clot is cleared.
Ginkgo biloba, which comes from a Chinese tree with fan-shaped leaves, may work to prevent further brain damage because it increases levels of an enzyme that eliminates free radicals around the stroke site in the brain.
“Ginkgo has long been touted for its positive effects on the brain and is even prescribed in Europe and Asia for memory loss,” Dr. Doré said. “Now we have a possible understanding for how ginkgo actually works to protect neurons from damage.”
Patients should talk to their doctor before taking gingko. One concern is that gingko thins blood, and patients at risk for strokes and seizures are warned against taking it. Ginkgo biloba should be discontinued at least 36 hours before surgery due to the risk of increased bleeding. Patients with bleeding or clotting disorders, or those who use warfarin, insulin and several other drugs, should also not take ginkgo.
To learn more about the risks and benefits of ginkgo, including warnings about its use, go to About Herbs, a Web site created by the Memorial Sloan-Kettering Cancer Center.
Thursday, October 2, 2008
Economic Crisis Bailout or TEOTWAKI
TEOTWAWKI – Revisited
The End Of The World As We Know It was my favorite acronym in the build up to Y2K. TEOTWAKI has been resurrected and applied to the fate of the United States and perhaps the world if congress does not provide king like power to Treasury Secretary Henry M. Paulson to distribute wealth to selected major banks in order to rescue (formerly known as bailout) the citizens of the United States (formerly Wall Street).
To bankers and politicians who insist that the world will come to an end if the US Congress does not approve the proposed US$700 billion bailout package, I wish to say: "It is not the end of the world. It is just the end of you." Sadly, it won't be. America's financier caste will live to fleece another day. Thinking that the proposed $700 billion bailout package is flawed, but it is better to enact it than to do nothing is simply is not true.
The government does not "do nothing" when banks fail. WAMU and Wachovia were forcibly merged or taken over by the regulators without disruption to either depositors or borrowers. When a bank runs into trouble, it is taken over via the FDIC. The trouble is that the banking system is insolvent; that is, it lacks sufficient capital to hold its existing portfolio of assets, let alone to make new loans. Its capital is dissolving as loan losses mount. Elimination of the mark-to-market valuation requirement, for securities where there is no market, will help stem the erosion of capital which may be all that some banks need to survive. If its not, they should be preparing desk space for the FDIC to move into.
If I am insolvent, no one is going to come and bail me out by buying my assets above market value. I’m not going to get 20% or 30% more for my house than what its worth in the market just so I can buy another house and have somewhere to live. I have to live with my bad investment or perhaps just walk away. Why, therefore, are we bailing out the finance industry by buying up the bad assets?
To those who say we have to do this to save “the economy” (read here “jobs”) I say BS. Our jobs are gone and will continue to go because our government provides incentives to corporations who ship the jobs overseas. The jobs will go because US corporations are run without vision. There would be plenty of US automotive jobs if we were leading the world in electric car production and the generation of electricity through alternative means.
Why anyone believes that the Treasury plan will prevent widespread economic misery escapes me. Maybe I’m wrong. It wouldn’t be the first time. The plan may help the shareholders of a few big institutions, and that is about it. To be effective the government would have to buy and hold somewhere around $1.3 Trillion, in suspect assets. That could happen only if we stopped fighting wars and slashed the defense budget by 50% today. As much as I would be very happy supporting a bailout based on those economics, that won’t happen.
Its not TEOTWAKI but it is going to be tough for a while on a lot of people, maybe all of us. Bailout or not; we are going to see high unemployment, shrinking 401k value, uncertainty, and delayed retirement. We will reduce consumption and the economy will slow down. It may be slow for a long time. I see it as an opportunity to address my own excess and perhaps simplify a little … or a lot.
The End Of The World As We Know It was my favorite acronym in the build up to Y2K. TEOTWAKI has been resurrected and applied to the fate of the United States and perhaps the world if congress does not provide king like power to Treasury Secretary Henry M. Paulson to distribute wealth to selected major banks in order to rescue (formerly known as bailout) the citizens of the United States (formerly Wall Street).
To bankers and politicians who insist that the world will come to an end if the US Congress does not approve the proposed US$700 billion bailout package, I wish to say: "It is not the end of the world. It is just the end of you." Sadly, it won't be. America's financier caste will live to fleece another day. Thinking that the proposed $700 billion bailout package is flawed, but it is better to enact it than to do nothing is simply is not true.
The government does not "do nothing" when banks fail. WAMU and Wachovia were forcibly merged or taken over by the regulators without disruption to either depositors or borrowers. When a bank runs into trouble, it is taken over via the FDIC. The trouble is that the banking system is insolvent; that is, it lacks sufficient capital to hold its existing portfolio of assets, let alone to make new loans. Its capital is dissolving as loan losses mount. Elimination of the mark-to-market valuation requirement, for securities where there is no market, will help stem the erosion of capital which may be all that some banks need to survive. If its not, they should be preparing desk space for the FDIC to move into.
If I am insolvent, no one is going to come and bail me out by buying my assets above market value. I’m not going to get 20% or 30% more for my house than what its worth in the market just so I can buy another house and have somewhere to live. I have to live with my bad investment or perhaps just walk away. Why, therefore, are we bailing out the finance industry by buying up the bad assets?
To those who say we have to do this to save “the economy” (read here “jobs”) I say BS. Our jobs are gone and will continue to go because our government provides incentives to corporations who ship the jobs overseas. The jobs will go because US corporations are run without vision. There would be plenty of US automotive jobs if we were leading the world in electric car production and the generation of electricity through alternative means.
Why anyone believes that the Treasury plan will prevent widespread economic misery escapes me. Maybe I’m wrong. It wouldn’t be the first time. The plan may help the shareholders of a few big institutions, and that is about it. To be effective the government would have to buy and hold somewhere around $1.3 Trillion, in suspect assets. That could happen only if we stopped fighting wars and slashed the defense budget by 50% today. As much as I would be very happy supporting a bailout based on those economics, that won’t happen.
Its not TEOTWAKI but it is going to be tough for a while on a lot of people, maybe all of us. Bailout or not; we are going to see high unemployment, shrinking 401k value, uncertainty, and delayed retirement. We will reduce consumption and the economy will slow down. It may be slow for a long time. I see it as an opportunity to address my own excess and perhaps simplify a little … or a lot.
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