Playwright Alena Smith, describing the faded fortunes of American playwrights, notices that the impact of the Internet extends far beyond the print media:
This is what happens to “old media,” after all — new media rise up and displace them. We are clearly in the midst of such a conflict right now, as the internet has seized control of the global cultural economy, upending established industries and eroding formerly paramount institutions from book publishers to the music industry to print newspapers and magazines to now, finally, even the mighty television networks. Rough times lie ahead for the television industry, and these challenges will inevitably impact its writers.;
Side note: We’ve joined this revolution by dropping our cable service several years ago (saving ourselves over $100/mo). Now we do all of our “television” viewing online, Internet only.
As internet pioneer turned techo-skeptic Jaron Lanier starkly puts it in his 2010 screed You Are Not a Gadget, “Once file sharing shrinks Hollywood as it is now shrinking the music companies, the option of selling a script for enough money to make a living will be gone.” Lanier’s warning may seem hyperbolic, but unrestricted file sharing is surely what undermined the music industry, and it’s what’s hurting the world of journalism, too. In a sense, the internet caused the unbundling of both the music album and the print newspaper — and in doing so, severely damaged both industries. The trouble comes down to simple economics of supply and demand in the digital age. When infinite copies of a work of art can be made and distributed globally in an instant, supply is limitless, and the value of an individual copy gets pushed down to zero. But of course, the original cost of creating a work of art in the first place, for the creator, does not change a bit. Writers still need to eat, pay rent, and feed their families. They just can’t necessarily rely on profits from their actual work to compensate them for that endeavor. This is how a profession gets demonetized. This is how a job — a living — gets reduced to a hobby.
Notice too Smith’s perspective on net neutrality:
The platform where nearly all of culture now takes place is, in fact, owned and controlled by a handful of incredibly powerful, borderline-monopolistic corporations. And these are the companies, like Amazon, now getting into “the scripted game.” We’ve already seen the types of problems that can arise under this new arrangement — for example, in the recent conflict between Amazon and the publishing company Hachette. In an era where Amazon is responsible for 65 percent of all online book sales, and 41 percent of book sales, period, their thuggish negotiation tactics can be potentially calamitous for a publishing company, and devastating for individual writers. If this is how Amazon treats the writers of books, how well can we expect them, as producers or distributors, to treat the writers of TV shows? Similar questions can be asked about any of the powerful new platform owners — in particular, the telecom companies that actually control the physical cables and routers through which all our media now travels. The fight for net neutrality is the fight to stop the internet from becoming a place where giant telecom companies are able to dictate terms to every creator who wishes to distribute content through their pipes. And screenwriters’ livelihoods depend on it.
Read the full article here: “You Can’t Make a Living: Digital Media, the End of TV’s Golden Age, and the Death Scene of the American Playwright“
By Dean Baker
The big news item in Washington last week was Attorney General Eric Holder decision to resign. Undoubtedly there are positives to Holder’s tenure as attorney general, but one really big minus is his decision not to prosecute any of the Wall Street crew whose actions helped to prop up the housing bubble. As a result of this failure, the main culprits walked away incredibly wealthy even as most of the country has yet to recover from the damage they caused.
Just to be clear, it is not against the law to be foolish and undoubtedly many of the Wall Streeters were foolish. They likely believed that house prices would just keep rising forever. But the fact that they were foolish doesn’t mean that they didn’t also break the law. It’s likely that most of the Enron felons believed in Enron’s business model. After all, they held millions of dollars of Enron stock. But they still did break the law to make the company appear profitable when it wasn’t.
In the case of the banks, there are specific actions that were committed that violated the law. Mortgage issuers like Countrywide and Ameriquest knowingly issued mortgages based on false information. They then sold these mortgages to investment banks like Citigroup and Goldman Sachs who packaged them into mortgage backed securities. These banks knew that many of the mortgages being put into the pools for these securities did not meet their standards, but passed them along anyhow. And, the bond-rating agencies rated these securities as investment grade, giving many the highest possible ratings, even though they knew their quality did not warrant such ratings.
All three of these actions – knowingly issuing mortgages based on false information, deliberately packaging fraudulent mortgages into mortgage backed securities, and deliberately inflating the ratings for mortgage backed securities – are serious crimes that potentially involve lengthy prison sentences. Holder opted not to pursue criminal cases against the individuals involved.
In the last couple of years Holder did bring civil cases against these banks that led to multibillion settlements. These settlements won big headlines that gave the appearance of being tough on the banks.
If we look at the issue more closely the rationale for these settlements gets pretty shaky. When Bank of America or J.P. Morgan has to pay out several billion dollars in penalties in 2013 or 2014, the people being hit most immediately are current shareholders and to a lesser extent top management. Since stock turns over frequently, the overlap between the group of people who hold these banks’ stock today and the people who benefited from the profits racked up in the bubble years will be limited. This means for the most part the fines are hitting people who did not profit from the wrong doing.
The same story holds for the top executives. Insofar as these are different people from those in charge in the bubble years (this is mostly the case), they can rightly tell their boards that they should not be held responsible for the wrongdoing of their predecessors. As a result, boards are likely to compensate top management if they fail to hit bonus targets due to the fines. This just means more of a hit to current shareholders. So the people who profited from criminal acts get to keep their money, while Holder can boast about nailing people who had nothing to do with the crime.
Had Holder treated this as a normal criminal matter he would have looked to build cases from the bottom up. This means finding specific examples of mortgage agents issuing obviously fraudulent mortgages, cases where these mortgages got bundled into securities at investment banks, and then marked as investment grade by the rating agencies.
The people involved would then be pressed to say whether they are either buffoons or crooks. Most probably would not pass as the former. The next question is why they decided to break the law. When you get people to admit that they were acting on instructions from their bosses, you then ask the bosses whether they want to spend many years in jail or would prefer to explain why they thought it was a good idea to commit fraud. (This is the pattern the Justice Department is pursuing in going after illegal campaign contributions to Washington Mayor Vincent Gray.)
We can never know this pattern of prosecution would have nailed big fish like Goldman’s Lloyd Blankfein or Citigroup’s Robert Rubin. We do know that Holder never even tried. As a result the Wall Streeters who profited most from illegal acts in the bubble years got to keep their haul. This is the message that bankers will take away going forward. This virtually guarantees ongoing corruption in finance.
Dean Baker is the author of The End of Loser Liberalism: Making Markets Progressive, Taking Economics Seriously, False Profits: Recovering from the Bubble Economy, Plunder and Blunder: The Rise and Fall of the Bubble Economy, The United States Since 1980, The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer, Social Security: The Phony Crisis (with Mark Weisbrot), and The Benefits of Full Employment (with Jared Bernstein). He was the editor of Getting Prices Right: The Debate Over the Consumer Price Index, which was a winner of a Choice Book Award as one of the outstanding academic books of the year. He appears frequently on TV and radio programs, including CNN, CBS News, PBS NewsHour, and National Public Radio. His blog, Beat the Press, features commentary on economic reporting. He received his B.A. from Swarthmore College and his Ph.D. in economics from the University of Michigan.
Reprinted from the New Economic Perspectives blog at the University of Missouri-Kansas City
Editor’s Note: William K. Black, author of “The Best Way to Rob a Bank is to Own One,” is Associate Professor of Law and Economics at the University of Missouri-Kansas City, where — according to James Galbraith — “the best economics is now being done.”
In the latest example of the New York Times’ reporters’ inability to read Paul Krugman, we have an article claiming that the “Growing Imbalance Between Germany and France Strains Their Relationship.” The article begins with Merkel’s major myth accepted as if it were unquestionable reality.
“It was a clear illustration of the dysfunction of the French-German partnership, the axis that for decades kept Europe on a united and dynamic track.
In Berlin this month, Chancellor Angela Merkel, riding high after nine years in power, delivered a strident defense in Parliament of austerity, which she has been pushing on Europe ever since a debt crisis broke out in 2009.”
No, not true on multiple grounds. First, the so-called “debt crisis” was a symptom rather than a cause. The reader will note that the year 2008, when the Great Recession became terrifying, has somehow been removed from the narrative because it would expose the misapprehension in Merkel’s myth. Prior to 2008, only Greece had debt levels given its abandonment of a sovereign currency that posed a material risk. The EU nations had unusually low budgetary deficits leading into the Great Recession. Indeed, that along with the extremely low budgetary deficits of the Clinton administration (the budget went into surplus near the end of his term) is likely one of the triggers for the Great Recession.
The Great Recession caused sharp increases in deficits – as we have long known will happen as part of the “automatic stabilizers.” This is normal and speeds recovery. The eurozone and the U.S. began to come out of the Great Recession in 2009. The U.S. recovery accelerated with the addition of stimulus. In the eurozone, however, the abandonment of sovereign currencies and adoption of the euro exposed the periphery to recurrent attacks by the “bond vigilantes.” The ECB could have stopped these attacks at any time, but it was very late intervening – largely because of German resistance. Instead, Merkel used the leverage provided by the bond vigilantes and the refusal of the ECB to act to end their attacks to force increasing austerity upon the eurozone and demands for severe cuts in workers’ wages in the periphery.
Merkel’s actions in forcing austerity and efforts to force sharp drops in workers’ wages in the periphery were not required to stop any “debt crisis.” The ECB had the ability to end the bond vigilantes’ attacks and reestablish the ability of the periphery to borrow at low cost, as it demonstrated. Merkel’s austerity demands and demands that (largely) left governments in the periphery slash workers’ wages promptly threw the entire Eurozone back into a second Great Recession – and much of the periphery into a Second Great Depression. It had the desired purpose of discrediting the governing parties of the left, particularly in Spain, Portugal, and Greece; that gave in to Merkel’s mandates that they adopt masochistic macroeconomic policies.
It is also false that Merkel began demanding that eurozone inflict austerity only in 2009. Merkel wanted to inflict austerity and her war on the workers and the parties they primarily supported long before 2009. What changed in 2009 was that the ECB, the Great Recession, and the bond vigilantes gave her the leverage to successfully extort the members of the eurozone who opposed austerity and her war on workers and the parties of the left.
But it is what is left out of the quoted passage above that is most amazing. The fact that Merkel’s orders that the eurozone leaders bleed their economies through austerity and the war on workers’ wages led to a gratuitous Second Great Recession in the eurozone – and Great Depression levels of unemployment in much of the periphery disappears. The fact that inflicting austerity and wage cuts in response to a Great Recession is economically illiterate and cruel disappears. The fact that the overall eurozone – six years after the financial crisis of 2008 and eight years after the financial bubbles popped in 2006 – has stagnated and caused tens of trillions of dollars in lost GDP and well over 10 million lost jobs is treated by the NYT article as if it were unrelated to Merkel’s infliction of austerity.
“But the French economy has grown stagnant, with unemployment stubbornly stuck near 11 percent and an unpopular government pledging to cut tens of billions in taxes on business, which many French fear will unravel their prized welfare state.”
No, the eurozone economy “has grown stagnant” and produced a Second Great Depression in much of the periphery. If France had a sovereign currency or if the EU were to make the euro and into a true sovereign currency France could simultaneously “cut tens of billions in taxes on business” while preserving the social safety net and speeding the recovery. The same is true of the rest of the eurozone – including Germany where Merkel’s policies have made the wealthy far wealthier and deepened the economic crisis in other eurozone nations by cutting German worker’s wages. The NYT article is disingenuous about both aspects of the German economy, noting only that “the German economy has shown signs of slowing down.” German growth was actually negative in the last quarter and the treatment of its workers weakens the German and overall eurozone recovery.
It continues to be obvious that it is a condition of employment for NYT reporters covering the eurozone’s economic policies that they never read Paul Krugman (or most any other American economist). Consider this claim in the article:
“[Prime Minister Manuel Valls] and Mr. Hollande have alienated many members of the Socialist Party by taking a more centrist approach to economic policy, stoking suspicions that the government is favoring business at the expense of the welfare state.”
I will take this part very slow. By my count Krugman has written at least six columns in the NYT explaining that there actually is a powerful consensus among economists. The “centrist approach” is that austerity in response to a Great Recession is self-destructive. We have known this for at least 75 years. Modern Republicans, when they hold the presidency, always respond to a recession with a stimulus package. Valls and Hollande are moving away from a “centrist approach to economic policy.” They are doing so despite observing first-hand the self-destructive nature of austerity (and proclaiming that it is self-destructive). They do so despite the demonstrated success of stimulus in responding to the financial crisis. They do so despite the fact that the results of the faux left parties adopting these economically illiterate neo-liberal economic policies is the destruction of the parties that betray their principles and the workers. Valls and Hollande are spectacularly unpopular in France because of these betrayals. It is clear why Valls and Hollande wish to avoid reading Krugman’s critique of their betrayals, but theNYT reporters have no excuse.
The reporters do not simply ignore the insanity of austerity and the plight of the eurozone’s workers – they assert that it is obvious that Merkel is correct and that the French reluctance to slash workers’ wages is obviously economically illiterate.
“Just over a decade ago, as Ms. Merkel is fond of noting, Germany was Europe’s sick economy. It recovered partly because of changes to labor laws and social welfare. Mr. Hollande now faces a similar task in an era of low or no growth.”
No. These two sentences propound multiple Merkel myths and assume (1) that France’s (and the rest of the eurozone’s) problems are the same as Germany’s issues “just over a decade ago,” (2) that Germany “recovered” due to slashing workers’ wages and social programs, and (3) that the German “solutions” would work for the eurozone as a whole.
Germany’s “reforms,” which included increasing financial deregulation, have proven disastrous. German banks finished third in the regulatory “race to the bottom” (“behind” Wall Street and the worst of the worst – the City of London). The officers that controlled Deutsche Bank and various state-owned German banks were among the leading causes of the financial crisis. German workers had lost ground even before the financial crisis and have lost even more ground since the crisis began. Inequality has also become increasingly more extreme in Germany.
The current problem in the eurozone is a critical shortage of demand exacerbated by the insanity of austerity and Merkel’s war on workers’ wages. The word “demand” and the concept, the centerpiece of the macroeconomics of recession, never appear in the article. An individual nation in which the wealthy have the political power to lower workers’ wages can increase its exports and employ more of its citizens. This obviously does not prove that the workers were overpaid. Merkel and the NYT ignore the “fallacy of composition,” which is particularly embarrassing because they are neo-mercantilists pushing the universal goal of being a net exporter. As Adam Smith emphasized, we can’t all be net exporters. A strategy that can work (for the elites) of one nation cannot logically be assumed to work for large numbers of nations.
The last thing a society should want in a recession is rapidly falling wages and prices that can create deflation (another word expunged from the NYT article because it would refute their ode to Merkel, austerity, and her war on the worker). If France were to slash workers’ wages to try to take exports from Ireland while Ireland slashed workers’ wages to try to take exports from Spain, which did the same to take exports from Italy the result would be deflation, a massive increase in inequality, the political destruction of any (allegedly) progressive political party that joined in the war on the worker, and a “race to Bangladesh” dynamic.
Germany’s “success” in being a very large net exporter makes it far more difficult – not easier – for any other eurozone nation to copy its export strategy successfully. As a group, the strategy cannot work for the eurozone. The strategy has, of course, not simply “not succeeded.” It has failed catastrophically. Merkel’s eurozone policies have caused trillions of dollars in extra losses in productivity, the gratuitous loss of over 10 million jobs, increased inequality, and the loss through emigration of many of the best educated young citizens of the periphery.
Hollande does not face “a similar task” to Merkel. He faces different problems and Merkel’s “solutions” are the chief causes of France’s economic stagnation rather than the answers to France’s problems.
I repeat my twin suggestions to the NYT reporters that cover the eurozone’s economy. The paper’s management should host a seminar in which Krugman educates his colleagues. Alternatively, come to UMKC and we’ll provide that seminar without charge. None of us can afford the cost of the reporters’ continuing willful ignorance of economics and their indifference to the victims of austerity and Merkel’s war on workers.
Here are some tough words about the Obama presidency from Cornell West, who argues persuasively that the fetish for the middle ground in politics often makes for poor leadership.
In the interview Thomas Frank asks West, “What on earth ails the man? Why can’t he fight the Republicans? Why does he need to seek a grand bargain?”
“I think Obama, his modus operandi going all the way back to when he was head of the [Harvard] Law Review, first editor of the Law Review and didn’t have a piece in the Law Review. He was chosen because he always occupied the middle ground. He doesn’t realize that a great leader, a statesperson, doesn’t just occupy middle ground. They occupy higher ground or the moral ground or even sometimes the holy ground. But the middle ground is not the place to go if you’re going to show courage and vision. And I think that’s his modus operandi. He always moves to the middle ground. It turned out that historically, this was not a moment for a middle-ground politician. We needed a high-ground statesperson and it’s clear now he’s not the one.”
West also says:
“He posed as a progressive and turned out to be counterfeit. We ended up with a Wall Street presidency, a drone presidency, a national security presidency. The torturers go free. The Wall Street executives go free. The war crimes in the Middle East, especially now in Gaza, the war criminals go free. And yet, you know, he acted as if he was both a progressive and as if he was concerned about the issues of serious injustice and inequality and it turned out that he’s just another neoliberal centrist with a smile and with a nice rhetorical flair. And that’s a very sad moment in the history of the nation because we are—we’re an empire in decline. Our culture is in increasing decay. Our school systems are in deep trouble. Our political system is dysfunctional. Our leaders are more and more bought off with legalized bribery and normalized corruption in Congress and too much of our civil life. You would think that we needed somebody—a Lincoln-like figure who could revive some democratic spirit and democratic possibility.”
Read the full interview here:
Cornel West: “He posed as a progressive and turned out to be counterfeit. We ended up with a Wall Street presidency, a drone presidency”
By Steve Frisch
I have been thinking a lot about our regional climate change skeptics in the Sierra Nevada and their impact on public policy. Occasionally I do my share of getting into debates and doing a little warming myself though I know it simply empowers their position at times.
I do however have a couple of observations about how they make their case and the consequences.
Rarely do they get into the actual scientifically peer reviewed papers and make their case based on the efficacy of the science itself.
The case I hear is that any science wholly or even partially funded by the government or private foundations done by agencies, academic institutions, professional groups, or individual scientists is inherently flawed due to their source of funding. Then I hear that any science using past data funded by any of these groups is inherently flawed due to confirmation bias. Next I hear that the peer review process itself is inherently flawed due to dependence on government funding. Then I hear that when the aggregate data and multiple proof points indicate a significant change occurring we should be giving more weight to the outlier data proving the opposite, as though the very small percentage of those valid peer reviewed reports should be given some weight that contrary data is not due. Finally I hear that if there is some evidence that anthropogenic climate change is occurring the cost of doing something about it is prohibitive.
It is as though climate skeptics do not wish to even understand or acknowledge the peer review process and the critical role it plays in vetting data and its analysis.
I guess this would not be an issue if the consequences of being wrong were not so high.
The impact of a changing climate on California’s water supply alone is measured in the tens of billions of dollars in economic impact annually. Worse, because we live in a state where the vast majority of people do believe climate change is a real threat, and our state has adopted policies to adapt to and mitigate the impacts of climate change through laws like AB 32 and SB 375, the low carbon fuels standard and the renewable portfolio standard, much of our state is rushing ahead with adaptation and mitigation strategies, strategies funded through a combination of our state general fund budget, surcharges on electricity, and revenue derived from the Cap and Trade program. Those revenues are being used to adapt our infrastructure, like water delivery systems, roads, bridges transportation networks, and wastewater treatment. Those revenues can also be directed at solving the seemingly insurmountable problem in the Sierra Nevada of long-term forest management and wildfire management, establishing a link between forests, mountains, watershed management, and water supply that is the number one commodity export of the Sierra Nevada and the source of much of our states wealth.
The problem we face is that distribution of revenue is controlled by a political process; our state budget voted on by legislators annually. In a political process funds don’t get distributed to regions and legislative districts where the elected representatives don’t acknowledge a problem is occurring and actively obstruct solving the problem in other areas of the state. Consequently the Sierra Nevada and its climate related issues do not receive their fair share of state funding which is being paid for by all of the taxpayer of the state, even us rural residents.
The stakes are very high indeed; by 2020 more than $5 billion per year will be distributed to adapt to climate change in California. Where will that money go? Who will benefit from the public works, construction, community improvement and middle class jobs related to implementation?
We are allowing the voice of a small minority of climate skeptics and their ability to influence our local politics by being the ‘loudest voice in the room’ to deny our region the funding we deserve, relegating our local communities and economies to a permanent backwater and underprivileged status.
The Onion may be parodying this phenomenon, but our communities are living it, we are watching as billions of dollars a year are collected from our residents and going to urban districts where the populous is more amenable to climate adaption and mitigation strategies. If I were a rural legislator I might listen to the skeptics, but I would not deny my regions the fruits of their taxes, surcharges and fees.
At some point pragmatism has to take over.
I only wish I knew where that point was so I could push to reach it.
Steve Frisch is President of the Sierra Business Council and one of its founding members. He is a dedicated project manager with over 20 years experience managing people in a highly competitive environment. Steve manages SBC’s program staff and programmatic development. He also manages sustainable business and building projects to encourage the adoption of socially responsible business and development practices.
Prior to joining the Sierra Business Council, Steve owned and operated a small business in Truckee, California and was president of the Truckee Downtown Merchants Association. Steve has served on the Nevada County Welfare Reform Commission, the Town of Truckee redevelopment agency formation committee and as an advisor to the California Resources Agency’s California Legacy Project.
Why is that only the worst of Nevada County — in this case another right-wing gun nut — makes the national news?
Esteemed journalist and historian Rick Perlstein, writing in Salon, found occasion to notice this Nevada County event (while gently chiding the New York Times for failing to cover it):
Here is a truth so fundamental that it should be self-evident: When legitimately constituted state authority stands down in the face of armed threats, the very foundation of the republic is in danger. And yet that is exactly what happened at Cliven Bundy’s Nevada ranch this spring: An alleged criminal defeated the cops, because the forces of lawlessness came at them with guns — then Bureau of Land Management officials further surrendered by removing the government markings from their vehicles to prevent violence against them.
What should be judged a watershed in American history instead became a story about one man’s racist rants. Even as two more Nevada lunatics, inspired by their stint at Cliven Bundy’s ranch, allegedly ambushed and mowed down two police officers and killed a bystander after crying, “This is the start of a revolution.” And now, an antigovernment conspiracy theorist named Douglas Cole recently shot at two police officers in Nevada County, California (though you may not have heard about that, because the New York Times hasn’t found the news yet fit to print).
Ah, but here’s some Nevada County news that the New York Times did find “fit to print.” But wait, it’s also bad news!
Nevada County ranks 58th of 58 in diversity in California.
Students, in 2006 15,446 White 13,496 87% Black 142 1% Hispanic 1,336 9% Asian 240 2% Native American 232 2%
Some might consider Nevada County’s connection to the founding of the Tea Party Patriots good news. But there’s hardly a consensus about that.
I look forward to the day when we get into the national news for integrating our local economic and environmental interests, for our understanding of the economic importance of restoring local watersheds, for our leadership in bridging the urban/rural divide. and for our creative reconciliation of liberal and conservative values.
The fact that this all sounds very idealistic and touchy-feely is an indication of how far we have to go in making it a reality.
But why else should we be here, if not to work for that?
FORWARDING TO FULL PAGE FORMAT …
Reprinted with permission from Tomdispatch.com
Of all the preposterous, irresponsible headlines that have appeared on the front page of the New York Times in recent years, few have exceeded the inanity of this one from early March: “U.S. Hopes Boom in Natural Gas Can Curb Putin.” The article by normally reliable reporters Coral Davenport and Steven Erlanger suggested that, by sending our surplus natural gas to Europe and Ukraine in the form of liquefied natural gas (LNG), the United States could help reduce the region’s heavy reliance on Russian gas and thereby stiffen its resistance to Vladimir Putin’s aggressive behavior.
Forget that the United States currently lacks a capacity to export LNG to Europe, and will not be able to do so on a significant scale until the 2020s. Forget that Ukraine lacks any LNG receiving facilities and is unlikely to acquire any, as its only coastline is on the Black Sea, in areas dominated by Russian speakers with loyalties to Moscow. Forget as well that any future U.S. exports will be funneled into the international marketplace, and so will favor sales to Asia where gas prices are 50% higher than in Europe. Just focus on the article’s central reportorial flaw: it fails to identify a single reason why future American LNG exports (which could wind up anywhere) would have any influence whatsoever on the Russian president’s behavior.
The only way to understand the strangeness of this is to assume that the editors of the Times, like senior politicians in both parties, have become so intoxicated by the idea of an American surge in oil and gas production that they have lost their senses.
As domestic output of oil and gas has increased in recent years — largely through the use of fracking to exploit hitherto impenetrable shale deposits — many policymakers have concluded that the United States is better positioned to throw its weight around in the world. “Increasing U.S. energy supplies,” said then-presidential security adviser Tom Donilon in April 2013, “affords us a stronger hand in pursuing and implementing our international security goals.” Leaders in Congress on both sides of the aisle have voiced similar views.
The impression one gets from all this balderdash is that increased oil and gas output — like an extra dose of testosterone — will somehow bolster the will and confidence of American officials when confronting their foreign counterparts. One former White House official cited by Davenport and Erlanger caught the mood of the moment perfectly: “We’re engaging from a different position [with respect to Russia] because we’re a much larger energy producer.”
It should be obvious to anyone who has followed recent events in the Crimea and Ukraine that increased U.S. oil and gas output have provided White House officials with no particular advantage in their efforts to counter Putin’s aggressive moves — and that the prospect of future U.S. gas exports to Europe is unlikely to alter his strategic calculations. It seems, however, that senior U.S. officials beguiled by the mesmerizing image of a future “Saudi America” have simply lost touch with reality.
For anyone familiar with addictive behavior, this sort of delusional thinking would be a sign of an advanced stage of fossil fuel addiction. As the ability to distinguish fantasy from reality evaporates, the addict persists in the belief that relief for all problems lies just ahead — when, in fact, the very opposite is true.
The analogy is hardly new, of course, especially when it comes to America’s reliance on imported petroleum. “America is addicted to oil,” President George W. Bush typically declared in his 2006 State of the Union address (and he was hardly the first president to do so). Such statements have often been accompanied in the media by cartoons of Uncle Sam as a junkie, desperately injecting his next petroleum “fix.” But few analysts have carried the analogy further, exploring the ways our growing dependence on oil has generated increasingly erratic and self-destructive behavior. Yet it is becoming evident that the world’s addiction to fossil fuels has reached a point at which we should expect the judgment of senior leaders to become impaired, as seems to be happening.
The most persuasive evidence that fossil fuel addiction has reached a critical stage may be found in official U.S. data on carbon dioxide emissions. The world is now emitting one and a half times as much CO2 as it did in 1988, when James Hansen, then director of the NASA Goddard Institute for Space Studies, warned Congress that the planet was getting warmer as a result of the “greenhouse effect,” and that human activity — largely in the form of carbon emissions from the consumption of fossil fuels — was almost certainly the cause.
If a reasonable concern over the fate of the planet were stronger than our reliance on fossil fuels, we would expect to see, if not a reduction in carbon emissions, then a decline at least in the rate of increase of emissions over time. Instead, the U.S. Energy Information Administration (EIA) predicts that global emissions will continue to rise at a torrid pace over the next quarter century, reaching 45.5 billion metric tons in 2040 — more than double the amount recorded in 1998 and enough, in the view of most scientists, to turn our planet into a living hell. Though seldom recognized as such, this is the definition of addiction-induced self-destruction, writ large.
For many of us, the addiction to petroleum is embedded in our everyday lives in ways over which we exercise limited control. Because of the systematic dismantling and defunding of public transportation (along with the colossal subsidization of highways), for instance, we have become highly reliant on oil-powered vehicles, and it is very hard for most of us living outside big cities to envision a practical alternative to driving. More and more people are admittedly trying to kick this habit at an individual level by acquiring hybrid or all-electric cars, by using public transit where available, or by bicycling, but that remains a drop in the bucket. It will take a colossal future effort to reconstruct our transportation system along climate-friendly lines.
For what might be thought of as the Big Energy equivalent of the 1%, the addiction to fossils fuels is derived from the thrill of riches and power — something that is far more difficult to resist or deconstruct. Oil is the world’s most lucrative commodity on the planet, and a source of great wealth and influence for ruling groups in the countries that produce it, notably Iran, Iraq, Kuwait, Nigeria, Russia, Saudi Arabia, Venezuela, the United Arab Emirates, and the United States. The leaders of these “petro-states” may not always benefit personally from the accumulation of oil revenues, but they certainly recognize that their capacity to govern, or even remain in power, rests on their responsiveness to entrenched energy interests and their skill in deploying the nation’s energy resources for political and strategic advantage. This is just as true for Barack Obama, who has championed the energy industry’s drive to increase domestic oil and gas output, as it is for Vladimir Putin, who has sought toboost Russia’s international clout through increased fossil fuel exports.
Top officials in these countries know better than most of us that severe climate change is coming our way, and that only a sharp reduction in carbon emissions can prevent its most destructive effects. But government and corporate officials are so wedded to fossil fuel profits — or to the political advantages that derive from controlling oil’s flow — that they are quite incapable of overcoming their craving for ever greater levels of production. As a result, while President Obama speaks often enough of his desire to increase the nation’s reliance on renewable energy, he has embraced an “all of the above” energy plan that is underwriting a boom in oil and gas output. The same is true for virtually every other major government figure. Obeisance is routinely paid to the need for increased green technology, but a priority continues to be placed on increases in oil, gas, and coal production. Even in 2040, according to EIA predictions, these fuels may still be supplying four-fifths of the world’s total energy supply.
This bias in favor of fossil fuels over other forms of energy — despite all we know about climate change — can only be viewed as a kind of carbon delirium. You can find evidence of this pathology worldwide and in myriad ways, but here are three unmistakable examples of our advanced stage of addiction.
1. The Obama administration’s decision to allow BP to resume oil drilling in the Gulf of Mexico.
After energy giant BP (formerly British Petroleum) pleaded guilty to criminal negligence in the April 2010 Deepwater Horizon disaster, which resulted in the death of 11 people and a colossal oil spill, the Environmental Protection Agency (EPA) suspended the company’s right to acquire new drilling leases in the Gulf of Mexico. The ban was widely viewed as a major setback for the company, which had long sought to dominate production in the Gulf’s deep waters. To regain access to the Gulf, BP sued the EPA and brought other pressures to bear on the Obama administration. Finally, on March 13th, after months of lobbying and negotiations, the agency announced that BP would be allowed to resume bidding for new leases, as long as it adhered to a list of supposedly tight restrictions
BP officials viewed the announcement as an enormous victory, allowing the company to resume a frenetic search for new oil deposits in the Gulf’s deep waters. “Today’s agreement will allow America’s largest investor to compete again for federal contracts and leases,” said BP America Chairman and President John Mingé. Observers in the oil industry predict that the company will now acquire many additional leases in the Gulf, adding to its already substantial presence there. “With this agreement, it’s realistic to expect that the Gulf of Mexico can be a key asset for BP’s operations not only for this decade but potentially for decades to come,” commented Stephen Simko, an oil specialist at Morningstar investment analysts. (Six days after the EPA announced its decision, BP bid $42 million to acquire 24 new leases in the Gulf.)
So BP’s interest is clear enough, but what is the national interest in all this? Yes, President Obama can claim that increased drilling might add a few hundred thousand barrels per day to domestic oil output, plus a few thousand new jobs. But can he really assure our children or grandchildren that, in allowing increased drilling in the Gulf, he is doing all he can to reduce the threat of climate change as he promised to do in his most recent State of the Union address? If he truly sought a simple and straightforward way to renew that pledge, this would have been a good place to start: plenty of people remember the damage inflicted by the Deepwater Horizon disaster and the indifference BP’s top officials displayed toward many of its victims, so choosing to maintain the ban on its access to new drilling leases on environmental and climate grounds would certainly have attracted public support. The fact that Obama chose not to do so suggests instead a further surrender to the power of oil and gas interests — and to the effects of carbon delirium.
2. The Republican drive to promote construction of the Keystone XL pipeline as a response to the Ukrainian crisis
If Obama administration dreams about pressuring Putin by exporting LNG to Europe fail to pass the credibility test, a related drive by key Republicans to secure approval for the Keystone XL tar-sands pipeline defies any notion of sanity. Keystone, as you may recall, is intended to carry carbon-dense, highly corrosive diluted bitumen from the Athabasca tar sands of Alberta, Canada, to refineries on the Gulf Coast. Its construction has been held up by concerns that it will pose a threat to water supplies along its route and help increase global carbon dioxide emissions.
Because Keystone crosses an international boundary, its construction must receive approval not just from the State Department, but from the president himself. The Republicans and their conservative backers have long favored the pipeline as a repudiation of what they view as excessive governmental deference to environmental concerns. Now, in the midst of the Ukraine crisis, they are suddenly depicting pipeline approval as a signal of U.S. determination to resist Putin’s aggressive moves in the Crimea and Ukraine.
“Putin is playing for the long haul, cleverly exploiting every opening he sees. So must we,” wrote former Secretary of State Condoleezza Rice in a recentWashington Post op-ed. “Authorizing the Keystone XL pipeline and championing natural gas exports would signal that we intend to do precisely that.”
Does anyone truly believe that Vladimir Putin will be influenced by a White House announcement that it will allow construction of the Keystone XL pipeline? Putin’s government is already facing significant economic sanctions and other punitive moves, yet none of this has swayed him from pursuing what he appears to believe are Russia’s core interests. Why, then, would the possibility that the U.S. might acquire more of its oil from Canada and less from Mexico, Nigeria, Venezuela, and other foreign suppliers even register on his consciousness?
In addition, to suggest that approving Keystone XL would somehow stiffen Obama’s resolve, inspiring him to adopt tougher measures against Moscow, is to engage in what psychologists call “magical thinking.” Were Keystone to transport any other substance than oil, the claim that its construction would somehow affect presidential decision-making or events on Russia’s borders would be laughable. So great is our reverence for petroleum, however, that we allow ourselves to believe in such miracles. This, too, is carbon delirium.
3. The Case of the Missing $20 Billion
Finally, consider the missing $20 billion in oil revenues from the Nigerian treasury. In Nigeria, where the average income is less than $2.00 per day and many millions live in extreme poverty, the disappearance of that much money is a cause for extreme concern. If used for the public good, that $20 billion might have provided basic education and health care for millions, helped alleviate the AIDS epidemic, and jump-started development in poor rural areas. But in all likelihood, much of that money has already found its way into the overseas bank accounts of well-connected Nigerian officials.
Its disappearance was first revealed in February when the governor of the Central Bank of Nigeria, Lamido Sanusi, told a parliamentary investigating committee that the Nigerian National Petroleum Corporation (NNPC) had failed to transfer the proceeds from oil sales to the national treasury as required by law. Nigeria is Africa’s leading oil producer and the proceeds from its petroleum output not claimed by the NNPC’s foreign partners are supposed to wind up in the state’s coffers. With oil prices hovering at around $100 per barrel, Nigeria should theoretically be accumulating tens of billions of dollars per year from export sales. Sanusi was immediately fired by President Goodluck Jonathan for conveying the news that the NNPC has been reporting suspiciously low oil revenues to the central bank, depriving the state of vital income and threatening the stability of the nation’s currency. The only plausible explanation, he suggested, is that the company’s officials are skimming off the difference. “A substantial amount of money has gone,” he told the New York Times. “I wasn’t just talking about numbers. I showed it was a scam.”
While the magnitude of the scam may be eye-catching, its existence is hardly surprising. Ever since Nigeria began producing oil some 60 years ago, a small coterie of business and government oligarchs has controlled the allocation of petroleum revenues, using them to buy political patronage and secure their own private fortunes. The NNPC has been an especially fertile site for corruption, as its operations are largely immune from public inspection and the opportunities for swindles are mammoth. Sanusi is only one of a series of well-intentioned civil servants who have attempted to plumb the depths of the thievery. A 2012 report by former anti-corruption chief Nuhu Ribadu reported the disappearance of a hardly less staggering $29 billion from the NNPC between 2001 and 2011.
Here, then, is another, equally egregious form of carbon delirium: addiction to illicit oil wealth so profound as to place the solvency and well-being of 175 million people at risk. President Jonathan has now promised to investigate Sanusi’s charges, but it is unlikely that any significant portion of the missing $20 billion will ever make it into Nigeria’s treasury.
These examples of carbon delirium indicate just how deeply entrenched it is in global culture. In the U.S., addiction to carbon is present at all levels of society, but the higher one rises in corporate and government circles, the more advanced the process.
Slowing the pace of climate change will only be possible once this affliction is identified, addressed, and neutralized. Overcoming individual addiction to narcotic substances is never an easy task; resisting our addiction to carbon will prove no easier. However, the sooner we recast the climate issue as a public health problem, akin to drug addiction, the sooner we will be able to fashion effective strategies for averting its worst effects. This means, for example, providing programs and incentives for those of us who seek to reduce our reliance on petroleum, and imposing penalties on those who resist such a transition or actively promote addiction to fossil fuels.
Divesting from fossil fuel stocks is certainly one way to go cold turkey. It involves sacrificing expectations of future rewards from the possession of such stocks, while depriving the fossil fuel companies of our investment funds and, by extension, our consent for their activities.
But a more far-ranging kind of carbon detoxification must come in time. As with all addictions, the first and most crucial step is to acknowledge that our addiction to fossil fuels has reached such an advanced stage as to pose a direct danger to all humanity. If we are to have any hope of averting the worst effects of climate change, we must fashion a 12-step program for universal carbon renunciation and impose penalties on those who aid and abet our continuing addiction.
Michael T. Klare, a TomDispatch regular, is a professor of peace and world security studies at Hampshire College and the author, most recently, of The Race for What’s Left. A documentary movie version of his book Blood and Oilis available from the Media Education Foundation.
Follow TomDispatch on Twitter and join us on Facebook and Tumblr. Check out the newest Dispatch Book, Ann Jones’s They Were Soldiers: How the Wounded Return From America’s Wars — The Untold Story.
Copyright 2014 Michael T. Klare
By Bruce Herring
Much ado lately in local press and other spheres concerning the future of Grass Valley. Citizens, elected officials, print journalists, bloggers, and other characters have bandied about a variety of notions. At issue: What is, what has, and what will really revitalize Grass Valley? It has been suggested the new Dorsey interchange is the true “silver bullet.” It has been suggested a new “Lifestyle Mall” at the interchange is the key to our future, complete with a big or at least a medium box. “It’s what the people want.”
Not long ago the buzz was the re-opening of the Idaho-Maryland Mine. Before that it was Loma Rica, other annexations, the shopping malls, and heck even the freeway itself. Brilliant idea that freeway, and convenient. Of course great swaths of private and commercial property were condemned, Nevada City lost the old gazebo, and Wolf Creek sentenced to run underground through tunnels and culverts for much of its downtown reach. A bit further back are the mines themselves, the mills, Lake Olympia, the Narrow Gauge Railroad, and …
Except for a portion of the original Loma Rica plan, these ideas and “improvements” – while visionary to varying degrees – are all based on quite conventional nineteenth or twentieth century thought. All have brought, or will bring some gain. All have tradeoffs. Everything does.
Several recent comments aim to push the conversation toward a 21st century framework. One suggests we are leaving history out of the equation. Others call for a comprehensive outlook instead of the usual piece-meal strategy. Steve Frisch of the Sierra Business Council goes one step further to suggest folks today “Want to live, work, shop and be entertained in the place they live; they want to walk and ride bikes; they want access to trails and open space; they want affordable starter housing for working people because young people can’t afford the single family residential American dream anymore; people crave authenticity and a sense of place.”
Two things. One, the City of Grass Valley has secured a grant to pursue a Comprehensive Economic Development Plan. I am told by high level city staffers that a multi-year series of public meetings will commence sometime later this year to do just that. Fabulous.
Two. Yes, a comprehensive outlook with a broad perspective is indeed a welcome idea. But the discourse must also include the age-old concept of the Commons. To be sure Grass Valley and Western Nevada County need to continue moving forward economically. But as Mr. Frisch suggests, we should do so authentically and with a renewed sense of “place.”
The common thread through Grass Valley is Wolf Creek. Like most “commons” it has been virtually invisible, neglected, used, and abused since the get-go in the 1850s. Commons in general are taken for granted and not valued in the complex accounting of GDP and “economic growth.” And yet in their wisdom the Grass Valley City Council unanimously approved a Conceptual Plan for a Wolf Creek Parkway in 2006. A Wolf Creek Trail is mentioned in city documents as early as 1999 and is included in the Downtown Strategic Plan.
Little or nothing has happened in the last eight years to move the concept forward. The time to do so is now. The Wolf Creek Parkway can and should stand as the centerpiece of any Comprehensive Economic Development Plan. Yes for the creek’s sake, but more importantly for OURS. We need a healthy visible accessible creek to revitalize ourselves. A place to walk, a place to bike, a place to just sit by moving water will provide a profound sense of place and connection to the natural world. It will help each of us feel good about our town. Citizens and visitors alike will benefit from the shared values derived from Wolf Creek, the “Real Gold in Grass Valley.”
Urban river and creek restoration has boosted property values and economic vitality in San Luis Obispo, Napa, Santa Rosa, and Tempe, AZ. Plans are underway for a major rehabilitation of the Los Angeles River. Freeway interchanges, bridges, and places to shop locally are indeed essential to our vitality, as would be high speed internet access. But the Wolf Creek Parkway will make a statement and put Grass Valley “on the map.” The Parkway epitomizes a bold move into 21st Century thinking.
Let the conversation continue. For additional information please visit the website of the Wolf Creek Community Alliance.
Bruce Herring is a former whitewater rafting guide for O.A.R.S., running in the 70s and 80s on the Stanislaus, Tuolumne, Merced, American, Rogue, San Juan, Tatshenshini, and Grand Canyon. He spent ten years teaching and as Principal of Bitney Springs High School in Grass Valley, stepping aside in 2013. He currently serves as the Managing Director for A&B Associates, and volunteers for the Wolf Creek Community Alliance. See his blog at “Steward’s Log.”