We can’t say this

We could get in trouble for this. Not in New York City, where this editorial is being written, because legitimate comment is protected under the First Amendment. But our editorials, along with many other stories and columns in the Forward, also appear every Sunday in the English edition of the Haaretz newspaper in Israel. And now, with a new anti-boycott law approved by the Knesset and due to take effect in less than 90 days, the boundaries of free speech and legitimate expression have grown unpredictably and suffocatingly tight.

See the Jewish Daily Forward editorial.

Speaking truth to power

Here is a letter Helaine Meisler wrote to the Woodstock Times (Woodstock, NY):

During Hitler’s rise to power, as small group of Germans, the White Rose, published and distributed pamphlets. Their goal was to create resistance to Hitler among German citizens. They insisted that the German people wake up and take a stand against injustice. Their motto was “We Shall Not Be Silent.”

Fast forward to the present day.

A number of us just returned from participating, either as passengers or as members of the land support team, in Freedom Flotilla II–Stay Human. We are a group that organized the U.S. Boat to Gaza, The Audacity of Hope. Our goals were to educate and motivate–to shed light upon the realities on the ground for the people of Gaza.

There is something dreadfully wrong when 1.5 million people are held captive in a small piece of land, when 45 percent of those people are unemployed, when 80 percent of them are aid-dependent, and when children suffer from malnutrition. There is something wrong when people cannot enter or leave this area at will to attend school, to sell products, to receive health care, and to visit family and friends. This is the reality on the ground in Gaza due to Israel’s illegal blockade and to Occupation Cast Lead, 2008-2009, in which the IDF killed over 1400 Palestinians and destroyed the infrastructure of the Gazan society, including hospitals, water treatment plants, schools, and over ten thousand homes. Israel, the largest recipient of U.S. aid, did this with our tax dollars and our support.

Having grown up in a Zionist home, I was taught about the horrors of the oppression of the Jewish people. I firmly believed in “Never Again.” Yes, this meant Never Again to anyone. Thus began my days as an activist.

The U.S. Boat was part of an international flotilla to help break the illegal blockade of Gaza. Its cargo, thousands of letters, To Gaza with Love, offered support to the people of Gaza–to let them know that they are not alone. Our goal, to educate people about the situation in Gaza, was accomplished through tremendous media coverage. Our work now continues through giving report-backs, writing articles, speaking at conferences, hosting living-room discussions, protesting, marching…

The bottom line remains the same as it was during World War II. We Shall Not Be Silent.

Helaine Meisler
Shady, NY

Weapons of mass exploitation

by Ravi Batra in Truthout

About eight years ago, there was frenzied and furious talk about WMDs, or weapons of mass destruction. Both the frenzy and the fury came from President George W. Bush and his administration, prior to the US invasion of Iraq in March 2003 and soon thereafter. The president’s poll ratings had soared in the aftermath of the quick American victory in Afghanistan, which was the base from which al-Qaeda had launched 9/11. In order to keep his poll numbers up, the president and his officials were in a hurry to invade Iraq and remove Saddam Hussein from power. There was a frenzy of claims that Saddam possessed WMDs including chemical arms and nuclear weapons. But when none were found, the officials were furious that Saddam, so to speak, had deceived them. They were also furious at their critics who wondered aloud if the entire WMD claim was actually a fabrication.

The Iraq invasion turned out to be a colossal mistake in terms of lost lives and heavy expenditures that sharply raised the federal budget deficit. However, few realize that the Bush administration made a far bigger mistake in using what may be called Weapons of Mass Exploitation or WMEs, which have all but decimated the US economy and continue to do so.

A WME is a short-term financial palliative that makes the rich richer but postpones economic troubles, while seeming to cure the problems of unemployment and dwindling family incomes. It tends to create debt in the economy, but most economists call it fiscal policy or monetary policy. Once the term “policy” is used, everybody shuts up and accepts the claims of WMEs’ beneficence, believing that a genius must have devised it. However, all it does is to generate more debt in the economy, and let the problems pile up, only to return with greater force in the future. Most nations have deployed it in the past 30 years, but various American administrations have been exceptionally adept in its use.

Let us see how a WME only postpones economic ills and also enriches the rich. I am sure you’ve all heard of supply and demand, even if you never took a course in economics. Supply and demand are like the two wings of an airplane; both have to be equally strong and weighty, or else the plane will crash.

What is the main source of supply? Productivity. What is the main source of demand? Wages. If you become more productive – through education or the use of better technology – you produce or supply more goods. If your wages rise, then you consume or demand more goods. For the economy to stay healthy, supply must be equal to demand, or:

Supply = Demand

Please don’t be alarmed by the use of a simple equation, because it will highlight the role of debt in a visual way and make it easily understandable. If supply is not equal to demand, then, like the airplane with unequal wings, the economy will crash some day. Here, supply refers to the value of goods produced in the entire economy, and demand means total spending or the value of goods consumed in the nation.

It so happens that, because of investment and new technology, productivity and, hence, supply rise year after year. This means that wages and, hence, demand must also rise year after, and in the same proportion. Otherwise, there is an imbalance, and unexpected problems arise. If wages trail productivity growth, supply exceeds demand, leading to overproduction. Businesses are unable to sell all that they produce and layoffs follow. Hence, the only cause of unemployment in an advanced economy is the rise in the gap between what you produce and what your employer pays you.

However, joblessness creates problems not only for the unemployed but also for elected officials, because the unemployed have the right to vote. Politicians seek to face a happy electorate and be re-elected. They don’t like unemployment anymore than you or I, which means they have to create ways to raise national spending to the level of supply. They face two choices: either to follow policies to raise your salary proportionately to the level of your productivity – which is only fair and ethical – or to adopt measures to lure you into larger debt, so that you spend more not out of a pay raise, but from increased borrowing.

Luring the public into debt in order to get re-elected, I believe, is crass corruption. It is also corruption because the politician, ever in need of campaign donations, wouldn’t dream of offending business interests that are all for low wages. With wages trailing productivity since 1981, elected officials have been following what is known as monetary policy, which tempts people into larger debts. This eliminates unemployment as spending rises to the level of supply, because now,

Supply = Demand + New Consumer Debt

With monetary policy, the Federal Reserve prints more money to bring down the rate of interest, and lower interest rates induce people to increase their borrowing or their debt. However, the wage-productivity gap has been rising so fast that the government also had to raise its own spending and debt constantly, so that total spending matched rising supply. In this case:

Supply = Demand + New Consumer Debt + New Government Debt

Raising government debt to postpone the problem of unemployment is called “fiscal policy.” Now you see why our nation is awash in debt at both the consumer and the government level. Elected officials have frequently used debt-creation policies to get re-elected, while creating the impression that they are doing American workers a favor by preserving their jobs. Are they doing you a favor? Absolutely not. Instead, they are simply enriching the rich. Let us see how.

First, job creation occurs through the cooperative action of both producers and consumers. Producers only create supply and, indeed, hire workers, but if their goods remain unsold, they lose money and workers are laid off. Second, joblessness occurs only if your boss doesn’t pay you enough to match your productivity. If you work hard and still get fired, then it is the employer’s fault, not yours. You are doing your job of being productive on the one hand and creating demand out of your salary on the other. If your demand falls or does not rise enough, then it is because your boss has not given you a raise or has cut your wages. At the macro level, insufficient national demand only means that workers have produced so much for their companies that supply exceeds demand, so that some people have to be laid off. Where then is your fault in this entire process? It is your employer’s greed that generates joblessness, not you.

Once the government has generated enough new debt to increase spending to the level of supply, the unemployed are called back to work, usually at lower wages. But the debt increase is large enough to eliminate overproduction even at puny wages. As overproduction vanishes, profits jump. You can see this clearly from the above equation. If your wages and, hence, your demand are constant, then the entire increase in debt goes into the pockets of suppliers. Without this debt growth, employers would have suffered losses due to overproduction; but with the creation of new debt, all their goods are sold, and profits soar, while your salary is either constant or grows very little; it may even fall, if you were laid off and had to find a new job. Thus, if the budget deficit is $1trillion, then corporate profits plus executive bonuses jump by $1 trillion. If the deficit is $2 trillion, then businessmen’s incomes rocket by the same amount.

This is exactly what has occurred during the Great Recession that started at the end of 2007. Millions of people were fired because the likes of General Motors, IBM, Microsoft and Goldman Sachs could not sell all they had produced. Then President Bush sharply raised the budget deficit, and the Federal Reserve printed tons of new money to bail out failing businesses. As a result, the economy stabilized in 2009 and began to grow in 2010. However, real wages fell, while profits sky-rocketed. Why? Because, the entire increase in government debt went into the coffers of producers. This is how Goldman Sachs alone could give bonuses of over $20 billion to its executives in 2009, while millions were still being laid off. Consumer debt actually fell, but the government debt rose so much that executives received hefty extra compensation.

Eliminating the Budget Deficit

It should be clear by now that our so-called monetary and fiscal policies are enriching the rich while not doing much for the jobless. What should we do? For the solution, let us take a look at the American economy in the 1950s and the 1960s, the golden decades of high growth and growing prosperity for all. GDP growth averaged over 4 percent as compared to less than 3 percent since 1981, while real wages went up to match rising productivity. The top bracket income tax rate at the time averaged above 80 percent, and corporations paid 25 percent of the total tax revenue or about 5 percent of GDP. The middle class paid low taxes, and there was practically no budget deficit.

Why was GDP growth so high back then? The answer lies in high taxation of wealthy individuals and corporations. Thus, for the 1950s and the 1960s:

Supply = Demand + Near Zero New Debt

Since real wages grew as fast as productivity, new debt was practically zero. People met their needs mostly out of their rising salaries. Demand rose in a natural way to match increasing supply. It may be noted that supply comes primarily from the rich, but demand comes primarily from the poor and the middle class. Since taxes were low on low-income groups, consumer demand grew as fast as salaries; but from 1981 on, thanks to President Reagan and his advisers such as Alan Greenspan, the tax burden was transferred from the rich to everyone else. Income tax rates sank for wealthy individuals and corporations, while most, if not all, other federal taxes jumped. The self-employed small business person, for instance, saw a rise of 66 percent in their tax rate. Taxes also rose on gasoline and tires. The crippling tax burden on lower incomes naturally reduced the growth in demand, so GDP growth (growth in supply or output) fell sharply below that in the 1950s and the 1960s. Even the oil-shocked 1970s produced higher growth of 3.3 percent.

All this suggests that we should move toward the tax structure of the 1950s and 1960s. Today, the top-bracket income tax rate is 35 percent. Suppose we were to raise this rate to 45 percent for annual incomes above $250,000, and to 70 percent for incomes above one million, then the income tax yield would rise from $1 trillion to $1.5 trillion, or by $500 billion. Thus, any dollar earned above $250,000 will be taxed at the rate of 45 percent; similarly, any earned above a million will face a rate of 70 percent, so that average tax rates will be well below the top rates, which will still be below those in the 1960s. For corporations, we could go back to the old rate of 45 percent tax on corporate profits, while eliminating loopholes. We would then collect about 5 percent of GDP or some $750 billion, which would bring in extra revenue of $600 billion. Thus, higher taxes on affluent families and businesses will raise our revenue annually by $1.1 trillion. Slashing defense spending and oil and agricultural subsidies would reduce government spending. This way we can almost eliminate our budget deficit, which is currently running at an annual rate of $1.2 trillion.

Eliminating the Trade Deficit

Eliminating the budget deficit would quickly revive our comatose economy. The first benefit would be felt in the fall of our trade deficit, especially that with China, which has become our foremost lender. America would no longer have to borrow money from anyone, and China would not be able to use its surplus dollars to buy more US government bonds. Such a move would cause a major appreciation in the value of the Chinese yuan, which, in turn, would reduce, possibly eliminate, our trade shortfall with China. Our manufacturing would revive and thousands of new jobs would be created, raising the tax revenue further.

The next step would be to reduce the tax burden on lower incomes by cutting the self-employment tax to 12 percent from the current 15 percent; we could also eliminate the Social Security tax on the minimum wage. Our increased tax revenue would pay for these cuts, which would further raise consumer demand and, hence, GDP growth. Note that the trade deficit is also a WME, because it tends to lower wages, while stuffing the wallets of the CEOs of multinational corporations. Just look at the fat pay checks of such CEOs in the aftermath of our trade with China.

Another WME that our government has systematically used to reduce our living standard is outsourcing; we can impose a stiff tax on this practice and raise even more revenue. This would also enable us to trim the tax burden of low-income groups.

In short, the American economy can be easily fixed if our government would stop using its vast arsenal of WMEs against us. I believe that, in just 12 to 18 months, we can bring the nation back to an unemployment rate of 6 percent, which is close to full employment.

Global warming: What’s really happening

Check out this article:

Since there has been a lot of debate here at 13.7 (and everywhere) about global warming, and what is or isn’t factual or good science, I thought it would be a good idea to bring out some of the basic science behind what we know and what we don’t know about this important issue. Of course, this is not intended as an official document or as a thorough analysis, but as a primer for those who are interested in facts.

  1. The Earth is a finite system, which receives most of its energy from the Sun. A small amount of heating also comes from radioactive decay and release from the interior.
  2. The Sun emits radiation mostly in the visible spectrum, peaking at about 500 nm, closely corresponding to yellow light. Some of the radiation is reflected back into space, and some is absorbed and then reemitted back into space as lower-energy infrared radiation. Warming occurs when a larger fraction of the absorbed radiation is trapped near the surface. Think of your car, parked under the sun. With windows closed it gets much hotter inside.
  3. The trapping of heat is caused mainly by what are called greenhouse gases: water vapor, carbon dioxide, methane, and ozone are the main ones. Without these gases in the atmosphere, the average temperature would be approximately 59 ºF lower.
  4. During the past 100 years, the average global temperature has increased by 1 degree Fahrenheit. Global sea levels have risen 4 to 8 inches.
  5. These numbers are not disputed. What is disputed is the cause behind the increase: natural vs. anthropogenic (i.e., caused by human activity).
    There have been many periods of naturally-occurring warming in Earth’s past history. Evidence going back hundreds of thousands of years has been uncovered with, e.g., the Vostok ice core samples from Antartica. (Petit, J.R. et al, Nature 399 (1999): 429–436). The findings show that global warming is directly correlated with an increase in carbon dioxide (CO2) and methane in the atmosphere. The peak temperatures corresponded to the highest accumulation of CO2 at about 280 parts per million by volume (ppmv).
  6. This number should be contrasted with the readings of CO2 during the past 50 years, which shows a steady linear increase—after averaging for seasonal fluctuations (with amplitude of 20 ppmv)—from 310 ppmv (1958) to 385ppmv (2008)— and thus well above the peaks during previous heating periods in Earth’s history for the past 400 thousand years. This increase in the concentration of greenhouse gases is directly related to an increase in population and industrialization linked to fossil fuel consumption.
  7. There have been small regional temperature fluctuations in recent history, known as Medieval Warm Period (about AD 950-1250) and the Little Ice Age that affected the North Atlantic region. The variation in temperature, measured from botany data and temperature records in England, was of about 0.2 degrees (up and then down), although global data indicates an overall cooling during the period. (See, e.g., Michael Mann et al, Nature 460 (2009): 880-3.)
  8. The Sun has a natural cycle where its irradiance oscillates periodically every 11 years. As the Sun irradiates more, the Earth receives more radiation and it could conceivably get warmer. However, there is no obvious periodic warming of Earth in sync with the solar cycle. Recent research on this issue leads to contradictory results due to the different action of greenhouse gases at different heights in the atmosphere, some even concluding that there could be cooling associated with a solar maximum. Also, even though the past decade has been warmer than average, the Sun has remained at a relatively low activity level, being actually late in climbing to its max.
  9. Models attempting to quantify the increase in global temperature for the next 100 years are extremely complex, being sensitive to different assumptions about the coupling of heat flow between oceanic currents and the atmosphere, projected greenhouse gases outputs, deforestation rate and other factors. Hence, results vary broadly, predicting an increase between 2 and 5 degrees Celsius. No model predicts a decrease in global temperature. Even taking the lowest predicted value, the consequences would be devastating, especially to coastal communities.

Our accelerated growth has fed from fossil fuels for about 200 years. It’s time we embrace different energy sources that have a more sustainable relationship with the environment. We must change our ways, from parasitic to symbiotic.

Also please read Scientists speak on climate change: Science and independence:

To politicize [climate research], to persecute and scrutinize individual scientists as if they were corrupt politicians, is not only misguided but useless. Not all scientists are virtuous (and not all doctors, lawyers, bankers, or teachers either), but the whole point of the scientific process is to free itself from such personal flaws: sooner or later, fraudulent or wrong data is uncovered and the path toward certitude is restored. Errors may persist for a while, but not for a very long while.

So, we must wonder what’s behind all these attempts to denigrate scientists working on climate change. One of us here at 13.7, Ursula Goodenough, asked in May what motivates climate change deniers.

I can’t say I know, and there probably are many answers, but one is surely ignorance of how science works. Another is manipulation by politicians, talk-show hosts with clear political agendas and the oil industry. Another must be a culture that feeds on the humiliation of the other for its own self-gratification.