Sunday, January 18, 2015

Lucky US! In 60 Years Neoliberal Capitalism Puts Planet On Last Legs (Mankind, Anyway)  Why Is the Financial Industry So Afraid of this Man?  (He Soooo Scary!)



Humanity's rapacious growth and accelerated energy needs over the last generation — particularly fed by an economic system that demands increasing levels of consumption and inputs of natural resources — are fast driving planetary systems towards their breaking point, according to a new pair of related studies.
The conclusion that the world's dominant economic model — a globalized form of neoliberal capitalism, largely based on international trade and fueled by extracting and consuming natural resources — is the driving force behind planetary destruction will not come as a shock, but the model's detailed description of how this has worked since the middle of the 20th century makes a more substantial case than many previous attempts. (Photo: NASA)
Humanity's rapacious growth and accelerated energy needs over the last generation—particularly fed by an economic system that demands increasing levels of consumption and inputs of natural resources — are fast driving planetary systems towards their breaking point, according to a new pair of related studies.

"It is difficult to overestimate the scale and speed of change. In a single lifetime humanity has become a geological force at the planetary-scale." — Prof. Will Steffen

Prepared by researchers at the Stockholm Resilience Centre, the first study looks specifically at how "four of nine planetary boundaries have now been crossed as a result of human activity." Published in the journal "Nature" on Thursday, the 18 researchers involved with compiling evidence for the report—titled 'Planetary Boundaries 2.0' — found that when it comes to climate change, species extinction and biodiversity loss, deforestation and other land-system changes, and altered biogeochemical cycles (such as changes to how key organic compounds like phosphorus and nitrogen are operating in the environment), the degradation that has already take place is driving the Earth System, as a whole, into a new state of imbalance.

"Transgressing a boundary increases the risk that human activities could inadvertently drive the Earth System into a much less hospitable state, damaging efforts to reduce poverty and leading to a deterioration of human well-being in many parts of the world, including wealthy countries," said Professor Will Steffen, a researcher at the Centre and the Australian National University, Canberra, who was lead author for both studies.

In addition to the four boundaries that have already been crossed, the study looked five other ways in which the planetary systems are under assault by human activity. They include: stratospheric ozone depletion; ocean acidification; freshwater use; atmospheric aerosol loading (microscopic particles in the atmosphere that affect climate and living organisms); and the introduction of novel entities into ecosystems (e.g. organic pollutants, radioactive materials, nanomaterials, and micro-plastics).

"I don't think we've broken the planet but we are creating a much more difficult world," Sarah Cornell, another report author, told "Reuters."

In this interview with "Wired" last year, Johan Rockström, executive director of the Stockholm Resilience Centre, described the idea about planetary boundaries in details:

Related to the findings of the first study, the second report examines what it calls the "Great Acceleration" and is an assessment of the speed and influence that specific factors have had in damaging the planetary systems described in Planetary Boundaries 2.0. Using a series of indicators, the study compares the relationship, over time, between 12 'socio-economic factors' — including economic growth (GDP); population; foreign direct investment; energy consumption; and water use — on one side with 12 'Earth system trends' — like the carbon cycle; the nitrogen cycle and biodiversity — on the other.

Using what it calls a "planetary dashboard," the research charts the spread and speed of human activity from the start of the industrial revolution in 1750 to 2010, and the subsequent changes in the Earth System – e.g. greenhouse gas levels, ocean acidification, deforestation and biodiversity deterioration. The analysis found that increased human activity — and "predominantly the global economic system" — has unseated all other factors as  the primary driver of change in the Earth System, which the report describes as "the sum of our planet's interacting physical, chemical, biological and human processes." The most striking, i.e. "accelerated," changes to that system have occurred in the last sixty years.

"It’s clear the economic system is driving us towards an unsustainable future and people of my daughter’s generation will find it increasingly hard to survive. History has shown that civilisations have risen, stuck to their core values and then collapsed because they didn’t change. That’s where we are today." —Prof. Will Steffen"It is difficult to overestimate the scale and speed of change. In a single lifetime humanity has become a geological force at the planetary-scale," said Steffen, who also led the Acceleration study.

The conclusion that the world's dominant economic model—a globalized form of neoliberal capitalism, largely based on international trade and fueled by extracting and consuming natural resources—is the driving force behind planetary destruction will not come as a shock, but the model's detailed description of how this has worked since the middle of the 20th century makes a more substantial case than many previous attempts.

"When we first aggregated these datasets, we expected to see major changes but what surprised us was the timing. Almost all graphs show the same pattern. The most dramatic shifts have occurred since 1950. We can say that around 1950 was the start of the Great Acceleration," says Steffen. "After 1950 we can see that major Earth System changes became directly linked to changes largely related to the global economic system. This is a new phenomenon and indicates that humanity has a new responsibility at a global level for the planet."

The paper makes a point to acknowledge that consumption patterns and the rise of what has become known as the Anthropocene Era does not fall equally on the human population and its examination of the economic system which is underpinning planetary destruction is one rife with inequality, in which certain populations consume at vastly higher levels than others.

According to the report, "The new study also concludes that the bulk of economic activity, and so too, for now, the lion's share of consumption, remain largely within the OECD countries, which in 2010 accounted for about 74% of global GDP but only 18% of the global population. This points to the profound scale of global inequality, which distorts the distribution of the benefits of the Great Acceleration and confounds international efforts, for example climate agreements, to deal with its impacts on the Earth System."

A worrying trend, notes the paper, is how a growing global middle class—exemplified by those in the BRICS nations of Brazil, Russia, India, China, and South Africa—is an increasing threat to the planet as the consumer mindset established in the OECD nations, particularly the U.S., spreads.

In an Interview with the "Guardian", Steffen spoke clearly about the overall impacts of the two new studies as he sounded the alarm over humanity's trajectory. "People say the world is robust and that’s true, there will be life on Earth, but the Earth won’t be robust for us," he said. "Some people say we can adapt due to technology, but that’s a belief system, it’s not based on fact. There is no convincing evidence that a large mammal, with a core body temperature of 37C, will be able to evolve that quickly. Insects can, but humans can’t and that’s a problem."

"It’s clear the economic system is driving us towards an unsustainable future and people of my daughter’s generation will find it increasingly hard to survive. History has shown that civilisations have risen, stuck to their core values and then collapsed because they didn’t change. That’s where we are today."

What increasing amounts of strong evidence shows, he said, is that that there "tipping points" that the human race should simply not "want to cross."


Joe Stiglitz is a bad man?

Well, among the re-regulators perhaps.

But, they all (in the final truthful analysis) are advocates of the system that is awaiting a final call.

And we are awaiting that.


Sunday, Jan 11, 2015

Why Is the Financial Industry So Afraid of this Man?

Joseph Stiglitz has won a Nobel Prize for economics. So why has he apparently been blacklisted by regulators?



Why is the financial industry so afraid of this man?
(Click to enlarge picture.)

Lloyd Blankfein, Joseph Stiglitz, Jamie Dimon (Credit: Reuters/Natalie Behring/Ana Martinez/Keith Bedford)

If the government were creating a new panel to advise on financial regulation, it would make sense to include a Nobel Laureate considered one of the most influential living economists. Yet Joseph Stiglitz has been barred from such a panel, telling Bloomberg he was out because “they may not have felt comfortable with somebody who was not in one way or another owned by the industry.”
The fight to keep Stiglitz off the panel is indicative of a much deeper problem — how the financial industry manipulates the regulatory system. The financial industry does not want Stiglitz on the panel for a simple reason:   he has committed the crime of advocating for a modest financial transaction tax.
Stiglitz argues that while financial markets normally serve the important function of capital intermediation, some forms of trading, like high-frequency trading, make markets less stable and amount to making money by moving money around. To reduce the incentives for such trading while raising revenue, he has put forward the possibility of a tax on some forms of short-term trading. Such a proposal has gained traction within academia and is already being implemented in Europe. (And it actually used to exist in various forms in the United States.)

Instead of preeminent financial reform experts like Stiglitz, many key regulatory and advisory positions are taken by those who loosen the leash on the financial industry. A perfect example is the recent nomination of Antonio Weiss to be the treasury undersecretary for domestic finance. Weiss has merger and acquisition experience, but as Simon Johnson notes, no domestic regulatory experience — illustrating in dramatic terms the revolving door between Wall Street and government. Research by Sophie Shive and Margaret Forster finds that this practice is pervasive and increasing. They write that, “the number of ex-regulators employed at financial firms increases by more than 55 percent” from 2001 to 2013. A 2010 CBS analysis finds more than four dozen former Goldman Sachs employees had high-level positions in government. This revolving door is part of what led us to the last financial crisis.
The influence of finance over policy goes deeper than simply revolving-door politics. Nicholas Carnes tells Salon that, “when members with finance backgrounds vote on roll calls, they seem to vote against labor more often than other members.” He finds that for every 100 bills related to labor issues, members of Congress who used to work in finance vote against workers on 3.5 more bills than their colleagues (a statistically significant difference).
The rise of finance over politics has had important political consequences:  Christopher Witko writes, “financial deregulation was one policy translating the political power of these actors into economic outcomes.” This political power was facilitated by the rise of money in politics, although research by Nomi Prins suggests that cozy relationships between powerful financiers and politicians have existed for decades.
A perfect example of this influence is the recent CRominbus bill (so named because it was both a continuing resolution and omnibus spending bill, making it a massive and high-stakes piece of legislation), which contained extensive deregulation measures. The original version of one of the bill’s key provisions was actually written by the finance industry. (Seventy-five of its 85 lines came from a Citibank proposal.) Lo and behold:  The average member voting in favor of the bill received $322,00 from the FIRE (finance, insurance and real estate) industries, while the average member voting against the bill received only $162,000 from those industries.
FIRE companies have dramatically increased their spending on lobbying in recent years, from $609,523,625 inflation-adjusted in the 2000 cycle to $996,406,725 in the 2012 cycle. Even IMF researchers linked lobbying to the rise of subprime mortgages and the opaque securitization schemes that left the financial crisis on a precipice. These attacks haven’t abated:  Last week a new bill was introduced to further water down Dodd-Frank and other key financial regulations.
Domestic financial regulators need to include advocates for financial sector regulation like Professor Stiglitz. There is some bright news, like the recent appointment of a fomer community banker to the Federal Reserve. But this is only a first step:  Congress should listen to Stiglitz and pass some form of a financial transactions tax.
A pilot project could take place in New York by simply lifting the 100% reimbursement rate on a tax already on the books. In Congress, Representatives Harkin and DeFazio have already proposed a bill that would have generated $350 billion between January 2013 and 2021. But changes to the industry won’t happen until the government pursues stricter lobbying regulations and appoints strong financial sector regulators.
Lenore Palladino is vice president of policy & outreach at Demos.
Sean McElwee is a research assistant at Demos. His writing may be viewed at seanamcelwee.com. Follow him on Twitter at @seanmcelwee.



Comments:

Kevin Schmidt

"Domestic financial regulators need to include advocates for financial sector regulation like Professor Stiglitz."

Which is exactly why they don't include advocates like Stiglitz. Then they would actually be regulators. We can't have that on Wall Street now can we? How will they continue to steal the wealth of the working class with guys like him around to spoil all of their fun?

Comments:

Trying to make the point that the bad guys are afraid of Stiglitz is the same magical thinking as believing that Stiglitz and some gang of regulators is going to stop this. Vote for them, and watch nothing happen.
Also, presenting big numbers flowing from Wall Street to politicians and saying we have to stop this ignores that you have nothing in the toolbox with which to do it. A bribe takes two parties and this is pretending that only one side of the transaction is bad. You can destroy the banks and the politicians will be there expecting money from someone.
They will not let you destroy them because they need the banks and this is the best deal available to them. They make sure the banks get the money in the first place and the banks give them back a cut. The banks are too big to fail because the government will fail with them, not because people will lose jobs and the economy will tank.

Stiglitz and his fellow Keynesians are their best friends, they built this system. Now they only need them to convince the public to keep voting and endorsing it. That part is working too, and the public will ask for more until it collapses. The job for the economists will then be to keep people thinking that the banks and corporations did it all and that the government will lead them out of the crisis and take care of them.

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