China is considering to lift the one-child-per-family policy in order to prevent their economy from slumping. Similar to the U.S. focus on consumption for economic stimulus, society is increasingly serving the economy instead of the economy serving society. Read more.
Socialism And Capitalism in One Community
A small village in Oaxaca, Mexico, is making joint decisions on how to manage and distribute the fruits of their village enterprise: growing and selling pine trees. Their forests had formerly been farmed by a state-owned enterprise to the point of extinction. Since the villagers took over the forest, their little enterprise has grown sustainably to the point, where it employs 300 people. In addition, decisions are made communally by the general assembly of 390 towns people. In line with the common system of ejidos, the land is owned communally, and villagers must volunteer their time in the forest and its various enterprises. Read more.
Categories: Public Goods and the Envirnoment |
No Comments »
Finally: a Step in the Right (Economic) Direction
The current administration in tandem with the Federal Reserve finally started addressing the underlying structural issues of the current economic crisis.
The Fed
The Fed’s decision to buy $600 billion of outstanding treasury bills, also euhpemistically called “quantitative easing,” is nothing more than a decision to print $600 billion of new dollars and pay off outstanding government debt. While this increase of the amount of money in circulation will have a questionable impact on interest rates (the Fed’s hope is that they will fall), it will definitely lower the value of the dollar compared to other major currencies, especially the British Pound and the Euro. This means that exports will be more affordable for our foreign trading partners, and, hopefully, they will increase. But only if we produce what the world wants to buy. One result will be a decrease in our foreign trade deficit. However, in the end this is not a sustainable way to fix our trade deficit, but only a band aid until the rest of the world catches on to us.
The Administration
A more effective and substantial change of direction and focus is signaled by President Obama’s upcoming Asia trip, which is intended to drum up more export business for the country. This is a more sustainable way of digging our way out of the current crisis than encouraging the already financially strapped U.S. consumers to spend more, if they need the stuff or not. In the end, for world trade to work in the long run, imports and exports need to be roughly balanced. Otherwise, a country will become insolvent as has been the case in Greece, Mexico, and during the Asia crisis.
Read the article by President Obama.
Categories: Economy |
No Comments »
Water, Nuclear Energy, and the Sun
Laura Rauch/Associated Press
Today’s news are interestingly connected: in the California desert, construction has begun on a solar thermal plant to power three million homes, while the desert state Dubai, which is part of the United Arab Emirates, is running out of oil based energy and is planning to complement its energy production with nuclear power plants. In addition, those exorbitant amounts of energy used for the desalination of Dubai’s drinking water have raised the salination level in the Persian Gulf from 32,000 parts per million thirty years ago to 47,000 parts per million today, a 46 percent increase.
Of course, the philosophical question to be asked at this point is to which extent do “we” have the right to complain about Dubai’s strive to catch up with the rich developed countries in the rest of the world? Solution to this Keeping-up-with-the-Joneses race are still very elusive. Unfortunately, our earth gets depleted and destroyed in the meantime.
Categories: Public Goods and the Envirnoment |
2 Comments »
A True Tragedy of the Commons in Syria
Julien Goldstein for The New York Times
With 2 million people displaced and wheat and barley fields parched, Syria is the newest example of what happens, when natural resources are overused. In spite of year long and expensive irrigation debates, Syrias water tables are dropping, wells are becoming salty, and formerly lush farmland is turning into desert.
Categories: Metaphysics |
No Comments »
Education for Profit – an Oxymoron?
It seems like a no-brainer to ask colleges that their students should be able to pay off their school loans from the fruits of their education. This is what the Department of Education’s “Gainful Employment” rule proposes. As can be expected, the main opposition comes from for-profit colleges, whose main focus is not educating our young generation in a meaningful way, i.e. to be able to make a living from their education, but to turn a profit for their shareholder. This basic tenet is rooted in corporate law, which puts shareholder return ahead of social and environmental responsibilities.
Just look at a statement by the pharmaceutical giant: Pfizer Announces Priorities to Drive Improved Performance, Position Company for Future Success and Enhance Total Shareholder Return. No word of improving peoples’ lives.
Categories: Public Goods and the Envirnoment |
No Comments »
Tea Party Got it Right This Time
This time, the criticism of the Fed comes from an unexpected direction: the Tea Party. Peter Schiff, a Republican senate candidate from Connecticut, calls for “swallowing the bitter medicine, ” i.e. finally start paying off our debt instead of treating the current crisis by printing more money and keeping the interest rates irresponsibly low. The Fed, as the enabler, is compared to a drug dealer by feeding us more of the same medicine that made us sick in the first place. Read more.
Categories: Economy, The Fed |
2 Comments »
Movie Time – Not Only for the Watching
Roxy, Langdon, N.D. (N.Y.Times photo)
In the world of on-line movies and Internet video rentals, I began feeling like a dying breed in my longing for outings to the local movie theaters with my Sweetie, which we usually turn into a romantic date night with dinner before and an after-movie discussion over hot chocolate in one of our town’s many late-night coffee shops.
How delighted was I to read about the revival trend of local movie theaters from Maine to New Mexico. To buck the wave of theater closures due to lack of a viable audience, communities took the matter into their own hands. This new breed of old theaters is run by volunteers, who use the venerable venues not only to facilitate old fashion movie evenings, but all sorts of community events that range from sports bar substitute to farming symposiums.
But probably the most important underlying function of these newly transformed institutions is their role in bringing community together. In stark contrast to the individual home entertainment center “patron,” people come to these movie nights not only to watch a movie, but more importantly to hang out together, to catch up on the newest gossip, to create and live community.
Bellaria Lobby, Wien
Similar developments have been seen on the eastern side of the Atlantic. The Bellaria, a venerable Viennese movie house, was subject to a documentary (which I saw, of all places, at a German movie festival in Buenos Aires). Beside portraying the cinema’s revered history and original decor, the more exciting part of the movie were the detailed portrays of some of the patrons. We meet them in the lobby, where movie goers arrive and mingle long before the actual screening, and at their kitchen table learning about the loyal Bellaria community of old-timers. For many of them, this movie house has been an important pillar of their community life, probably comparable to their local corner grocer or the mailman, who has time for a short update on neighborhood news while sorting through his bag.
Here’s to many more old movie theater revivals!
Categories: Society and Culture |
1 Comment »
Consumption for the Sake of Consumption?
After September 11, the Bush administration’s main appeal to the American public was to go out and shop. In the U.S., where consumer spending constitutes 70% of all economic activity, the solution to the current (and former) economic crisis is seen in increased consumer spending.
As a way out of the current economic crisis, Germany’s trading partners want the country to go on a shopping spree.
No thought is given to the question, nor is it anywhere distantly discussed if we really need more stuff or if we can afford to buy more stuff we don’t need? Shouldn’t we rather focus on rethinking our whole attitude towards economics and “the market?” Shouldn’t economics serve the people and not vice versa, as we are seeing it these days all over the world?
As Tony Judt in his new book “Ill Fares of the Land” aptly describes, we “know what things cost but have no idea what they are worth.” It seems like we have forgotten to ask for the purpose of our acquisitions? How do they make our life better? Are we trading new credit card debt for some short lived conspicuous consumption (as in “shopping therapy”), or does a purchase satisfy a real need in our lives?
Germany seems to be a lone warrior in resisting the American calls to increased consumer spending for reasons that may lie in its increasingly older population or simply in a deeply ingrained fiscal conservatism originating from the disastrous economic consequences of two lost world wars. But there are increasing signs that the rest of the world follows suit. Retail sales are not picking up as expected (or “suggested?”) by the official economic forecasters. There is no self-fulfilling prophecy in consumer spending these days. People finally start realizing that it is more profitable to consume a little less and save big on interest payments for those things we didn’t have the money to buy in the first place.
Categories: Economy, Life in the Slow Lane, Society and Culture |
No Comments »
The Bills are Coming Due – on Both Sides of the Atlantic
David G. Klein
While only a few weeks ago President Obama and his Treasury Secretary, Mr. Geitner, chided their European counterparts not to focus too much on cutting back public finances for the sake of healing the economy, yesterday the Group of 20, including the U.S. agreed on a final resolution to do just that: to halve their deficits by 2013.
What has changed? An Op-Ed piece by economics professor Tyler Cowen addressed the issue head-on. “The bills are coming due,” and everyone from Main Street to Wall Street to Washington and Brussels begins to realize this stark but unavoidable truth. The world economy, where old debt was continuously re-financed with new debt, started resembling a big Ponzi scheme. And the U.S. tried to keep it alive until just a few weeks ago by encouraging other countries to try spending their way out of the crisis, i.e. printing more money to pay off old debt.
The strongest resistance came from Europe, originating with Germany’s Angela Merkel and Great Britain’s David Cameron, and officially announced by the European Central Bank’s Claude Trichet, where the overall tenet has been growing that “sustainable growth is not possible without healthy public finances.”
Since the whole world with the exception of China, Canada, and Germany has overly leveraged economies, we will be in for a long and painful ride towards economic health. Just compare the world economy to a household that has been continuously borrowing to pay off old debt. Once the bills come due, there must be a long period of belt-tightening austerity. And in the end, a new-found attitude towards consumption could mean that the boom times of the 60-s and 70-s might not resurface for many years.
Categories: On Debt |
No Comments »