CHART OF THE DAY: Here's How To Cut The Trade Deficit In Half Right Now
Joe Weisenthal | Dec. 10, 2010, 9:51 AM
It's simple. All you have to do is eliminate oil imports from the trade deficit.
As this chart from Calculated Risk shows, based on today's data, eliminating our net petroleum imports would reduce the trade deficit from around $40 billion to closer to $20 billion.
Crudely annualizing this difference to $240 billion would represent a 1.7% boost to GDP of around $14 trillion.
This is what the fossil fuel oligopoly costs America in terms of trade deficit. It has plenty of other costs as well, including, of course, the imminent collapse of civilization due to global warming, and the immediate health and environmental costs, $51 billion a year just for premature deaths in Appalachia, for example.
But the trade deficit is a particularly "hard" measure of economic cost incured by this energy sector oligopoly. If oil weren't an oligopoly, if it were a part of a government-owned energy sector that therefore had no economic (or should we anti-economic) bias toward its existing holdings and investments as opposed to the optimal well-being of society as a whole, then the economic impediments to a swift transition to a more rational, cost-effective alternative would be far, far smaller. And that political impediments would be even smaller still.
This is but one example of how socialism--state ownership of the basic means of production--would significantly outperform our existing economic system, which calls itself "capitalism", but is arguably much better described as oligopoly capitalism. Freed from the competitive pressures of the "free market", whose ideology is used to justify it, any oligopoly will tend to soak up far more than it's fair share of income and profits--and with them the power to grab even larger and larger shares. But some oligopolies are much more powerful and dangerous than others, and the fossil fuel oligopoly is among the very worst there is.
I wanted to write about this two weeks ago,when it broke. But it's not like it's any less true two weeks later. AP has the lowdown on just what a miserable failure the war on drugs has been, and it starts like this:
AP IMPACT: After 40 years, $1 trillion, US War on Drugs has failed to meet any of its goals
MARTHA MENDOZA
Associated Press Writer 9:02 PM PDT, May 13, 2010
MEXICO CITY (AP) - After 40 years, the United States' war on drugs has cost $1 trillion and hundreds of thousands of lives, and for what? Drug use is rampant and violence even more brutal and widespread.
Even U.S. drug czar Gil Kerlikowske concedes the strategy hasn't worked.
"In the grand scheme, it has not been successful," Kerlikowske told The Associated Press. "Forty years later, the concern about drugs and drug problems is, if anything, magnified, intensified."
This week President Obama promised to "reduce drug use and the great damage it causes" with a new national policy that he said treats drug use more as a public health issue and focuses on prevention and treatment.
Nevertheless, his administration has increased spending on interdiction and law enforcement to record levels both in dollars and in percentage terms; this year, they account for $10 billion of his $15.5 billion drug-control budget.
Kerlikowske, who coordinates all federal anti-drug policies, says it will take time for the spending to match the rhetoric.
"Nothing happens overnight," he said. "We've never worked the drug problem holistically. We'll arrest the drug dealer, but we leave the addiction."
The war on drugs started with Nixon, they note:
In 1970, hippies were smoking pot and dropping acid. Soldiers were coming home from Vietnam hooked on heroin. Embattled President Richard M. Nixon seized on a new war he thought he could win.
"This nation faces a major crisis in terms of the increasing use of drugs, particularly among our young people," Nixon said as he signed the Comprehensive Drug Abuse Prevention and Control Act. The following year, he said: "Public enemy No. 1 in the United States is drug abuse. In order to fight and defeat this enemy, it is necessary to wage a new, all-out offensive."
His first drug-fighting budget was $100 million. Now it's $15.1 billion, 31 times Nixon's amount even when adjusted for inflation.
But most significantly, AP went digging in the weeds to see where drug war money was spent, and found that we spent lots of money of stuff that just didn't work:
[Note]:The majority of this diary is a substantially expanded version of my EarthDay feature for Random Lengths News, including material I wasn't able to include in that story, as well as passages that come directly from it.
Prelude
I've long argued that liberalism is the true conservatism, that liberal inventions like religious tolerance and the right to free speech have stabilized and preserved the continuity of society in the increasingly dynamic modern era in ways that traditional ethnocentric conservatism could never possibly have managed. In my diary yesterday, "The lousy history of laissez-faire--American recession edition", I offered another example, showing how the percentage of time spent in recessions was more than cut in half by the advent of the New Deal.
But one result of this stabilizing effect of liberalism is that--one way or another--it inevitably serves to empower the darker side of conservatism. Liberal advances are made, in part, because conservatism proves inadequate to deal with crises, thus opening the way for the acceptance of ideas advocated by liberals, radicals and progressives. These are never perfectly realized, of course. They are always imperfect, always compromised. But they are real and substantial, nonetheless. And they accomplish things that conservatives could not even conceive of. Once the crises are dealt with, conservatism reasserts itself, rewriting history to reassert itself as the natural and normal philosophy of all that is right and good.
This is the larger pattern of history in which we must view my previous diary, "The Democratic Party & the dying empire of oil--further elaborations on Stirling Newberry's thesis". The failures of the Democratic establishment I discussed there were typical of how imperfect progress leaves problems unsolved that grow enormous over time. In this diary, I want to focus on just how enormous those problems are. I will only be focusing on one dimension--that of the true economic cost of our petroleum politics and the larger pattern it is part of, a pattern that takes nature for granted, treating its bounty as a free good, rather than as a treasure of natural capital to be carefully stewarded for the ages.
Ecosystem Boundaries--Framing Thoughts On Nature's Cost
One of the top scientific discoveries last year was that of significant quantities of water on the Moon-a discovery that could make the eventual establishment of a base there far more feasible. "On the moon, ice is worth more than gold," explained physicist and bestselling author Michio Kaku. "To put a pound of payload on the moon costs between $50,000 and $100,000." This figure draws attention to a seldom-considered fact: the natural world is incredibly valuable, and if humans had to replace it ourselves, the costs would be unimaginable. Fortunately, we don't have to do that. But we do face a scaled-down version of that problem. Because nature doesn't have a price tag on it, we treat it as a free good, wantonly destroying its capacity to provide valuable services to us.
Indeed, a paper published in Nature, the premier science journal, last September, "A safe operating space for humanity", identified nine key planetary biosystem boundaries we must stay within in order to avoid catastrophic environmental change. Climate change was one of three boundaries we have already crossed, but the other two-biodiversity and the nitrogen cycle-are much farther into the danger zone. The planetary boundaries approach "provides the ultimate guardrails that can help societies to take action politically, economically," explained Swedish environmental historian Sverker Sörlin. But it doesn't provide a foundation for coherently taking that action. Fortunately, another, much more massive scientific study does--The Economics of Ecosystems and Biodiversity (TEEB). More on TEEB below--much more. But first, to help provide an essential contextual framework, a bit more on the ecosystem boundary paper, from Science Daily ("Scientists Outline 'Safe Operating Space' For Humanity"), starting with this illustration:
On March 4, Houston District Judge Kevin Fine granted a pretrial motion in a capital case and declared the death penalty in Texas unconstitutional. Judge Fine said the state's law violates a defendant's right to due process because of the risk of executing an innocent person. The judge based his ruling on studies around the country and in Texas that indicated, "it can only be concluded that innocent people have been executed....Are you willing to have your brother, your father, your mother be the sacrificial lamb, to be the innocent person executed so that we can have a death penalty so that we can execute those who are deserving of the death penalty?" Green's defense attorneys were pleased with the judge's decision, although they believe the ruling will be appealed and probably reversed. Sandra Guerra Thompson, professor at the University of Houston Law Center, said trial judges sometimes issue rulings that are unlikely to stand up on appeal to start a dialogue in the judicial branch. While Texas has consistently led the nation in annual executions, the state has followed a nationwide trend with a decline in new death sentences in 2009.
Christian Hate Group Kill Mary Magdalene 'Repent Amarillo' Terrorizes Texas Town, Harassing Gays, Liberals, And Other 'Sinners'
An evangelical Christian hate group called "Repent Amarillo" is reportedly terrorizing the town of Amarillo, Texas. Repent fashions itself as a sort of militia and targets a wide range of community members they deem offensive to their theology: gays, liberal Christians, Muslims, environmentalists, breast cancer events that do not highlight abortion, Halloween, "spring break events," and pornography shops. On its website, Repent has posted a "Warfare Map" of its enemies in town.
Calling Repent an "American Taliban," blogger Charles Johnson notes that the group's moniker "Army of God" is a rough translation of "Hezbollah." Led by a man named David Grisham, a security guard at a nuclear-bomb facility called Pantex, Repent first gained media attention in Texas following a campaign to boycott Houston for electing a gay mayor. The group, which is associated with Raven Ministries, collaborates with other Christian groups as well as forced pregnancy advocacy associations like "Bound 4 Life."
According to a new exposé by the Texas Observer, Repent set out earlier this year to destroy a discreet club of swingers they discovered in town. On New Years eve, the harassment began, with Repent members, almost exclusively young men, showing up in military fatigues and bullhorns, blaring Christian music at the swingers' club building. The swingers, made up of "regulars" of middle aged, working class couples, were then stalked at every following visit to the club. Repent not only took video of each member, but obtained the swingers' license plates and dug through their trash, informing neighbors and coworkers of what was once private.
I was always annoyed by those who talked about Obama as a transformational leader. One reason was that I was keenly aware of some basic transformations we badly need to make in order to have a livable future for all--none of which he seemed to really have a handle on. This diary is about one huge example of this.
By now, everyone knows about global warming. Many also know that it's not "just" an environmental problem--if left unchecked it will have ruinous economic consequences as well. But that's not the only global environmental problem we face that also involves enormous economic costs that most people are unaware of.
Thursday before last, the UK Guardian ran a story about a forthcoming UN report on the environmental costs of doing business the old-fashioned way, "World's top firms cause $2.2tn [trillion] of environmental damage, report estimates". The story's subhead read: "Report for the UN into the activities of the world's 3,000 biggest companies estimates one-third of profits would be lost if firms were forced to pay for use, loss and damage of environment." And the story itself began thus:
The cost of pollution and other damage to the natural environment caused by the world's biggest companies would wipe out more than one-third of their profits if they were held financially accountable, a major unpublished study for the United Nations has found.
The report comes amid growing concern that no one is made to pay for most of the use, loss and damage of the environment, which is reaching crisis proportions in the form of pollution and the rapid loss of freshwater, fisheries and fertile soils.
Later this year, another huge UN study - dubbed the "Stern for nature" after the influential report on the economics of climate change by Sir Nicholas Stern - will attempt to put a price on such global environmental damage, and suggest ways to prevent it. The report, led by economist Pavan Sukhdev, is likely to argue for abolition of billions of dollars of subsidies to harmful industries like agriculture, energy and transport, tougher regulations and more taxes on companies that cause the damage.
The report is the final stage of an ongoing process that's been under way for several years, as you can see at the UN's webpage for the project:
This is another in a series of stories I've written for Random Lenghts News about local environmental justice issues that have parallels elsewhere around the country. At this point, there has been a very clear divergence between Long Beach, attempting to avoid confrontation with the trucking industry, and thus increasingly selling out to them, and Los Angeles, which has, after many years of pressure, decided to stand up.
Ports Part Paths On Clean Truck Plans
Long Beach Caves To Trucking Industry,
LA Seeks Change In Federal Law
By Paul Rosenberg, Senior Editor
When the ports of Los Angeles (POLA) and Long Beach (POLB) announced their joint Clean Air Action Plan (CAAP) three years ago this month, they pledged to work closely together to clean up the air at both ports, with strong messages of support from the mayors of both cities. Los Angeles Mayor Antonio Villaraigosa struck an optimistic note, focusing on economic growth, while Long Beach Mayor Bob Foster struck a tougher tone, saying, "The costs of these [environmental] impacts are already in the system, but the wrong people are paying them,"
But when they finally got around to approving programs to deal trucks-following months of consultations with stakeholder groups-the two port plans diverged sharply, despite rhetoric to the contrary...and it was the LA plan that most aggressively sought to clean up the air, and shift the costs to where they belonged by requiring port truckers to be employees of truck companies that would bear the costs, while POLB did not.
One reason for the difference was the threat of lawsuits from the American Trucking Association (ATA), but ATA sued Long Beach anyway, along with POLA. Now the ports have diverged even more dramatically. On October 19, Long Beach caught everyone by surprise-especially community members and groups involved in crafting the initial plan-by settling the lawsuit out of court. Those involved as stakeholders were outraged by POLB's secret backroom settlement, and lack of accountability to those it loudly pledged to protect. "The Port of Long Beach violated the public trust and sold out the citizens of Long Beach by approving a worthless settlement agreement with the American Trucking Association in their lawsuit against the Los Angeles ports' clean trucks programs," said David Pettit, a senior attorney of the Natural Resources Defense Council (NRDC). who had worked with both ports on the lawsuit.
The story in this diary picks up on two aspects of my diary yesterday, "Renormalizing The Wal-Mart World". First, it's snapshot of one of the low-wage spinoffs from the world that Wal-Mart has helped shape. And second, it's directly about one of the three themes discussed within the diary, "Part 3: Dignity-The Ultimate Cost Of Low Prices". Republished from the current edition of Random Lengths News.
The Long Haul: Organizing Port Truckers
By Paul Rosenberg, Senior Editor
"I will die tomorrow if today we can form a union. I will be a happy man," said Oscar Ruiz, Teamster organizer for the ports of LA and Long Beach. It's spoken with all the intensity of a man who has lived the life of hardship of those he is struggling to organize.
Ruiz has a life story common to many port truckers. "I'm an immigrant born in Guatemala. I came to this country when I was around 12 years old," he said. "I went to junior high school and high school." It was more education than some port drivers, but not uncommon.
"I learned to drive a truck from my brother. He was a port driver. I became a port driver when I was 18."
That was 1986. Six years after the 1980 Motor Carrier Act changed port trucking forever. The act was supposed to be a progressive piece of legislation, as explained in a recent report from Demos (a progressive public policy research and advocacy organization) titled "Port Trucking Down The Low Road: A Sad Story of Deregulation," by David Bensman of Rutgers University.
"The Motor Carrier Act of 1980 was hailed by liberals and the business community alike as a triumph of policy reform," Bensman wrote. "Senator Kennedy and Ralph Nader led the reformers who charged that trucking regulation meant high rates for consumers, and monopoly profits for businesses. Large shippers lobbied Congress for an end to the rate setting and route planning which limited competition and drove up the cost of freight transport. Civil Rights organizations organizations argued that deregulation would lower barriers that impeded African Americans from gaining a just share of decent trucking jobs." Yet, Bensman wrote, "Despite these high hopes, deregulation has wrecked the drayage industry."
Ruiz came to work in that wreckage, and stayed there 14 years, through four wildcat strikes, working for dozens of different companies, always looking for one that would treat him with dignity and respect. "I never found it," Ruiz said. Blackballed for his activism, he found a union job offport, but always tried to get assignments that let him pass through the port vicinity, and stay in touch with things. Three years ago, he became a port organizer.
Monday, on Democracy Now!, Amy interviewed Tim DeChristopher, the University of Utah student who "disrupted" a last-minute fire-sale auction of wilderness land held by Bureau of Land Management the previous Friday. She also wrote her weekly column about DeChristopher and what he did.
He didn't pour sugar into a bulldozer's gas tank. He didn't spike a tree or set a billboard on fire. But wielding only a bidder's paddle, a University of Utah student just as surely monkey-wrenched a federal oil- and gas-lease sale Friday, ensuring that thousands of acres near two southern Utah national parks won't be opened to drilling anytime soon.
Tim DeChristopher, 27, faces possible federal charges after winning bids totaling about $1.8 million on more than 10 lease parcels that he admits he has neither the intention nor the money to buy -- and he's not sorry.
"I decided I could be much more effective by an act of civil disobedience," he said during an impromptu streetside news conference during an afternoon blizzard. "There comes a time to take a stand."
The Sugar House resident -- questioned and released after disrupting a U.S. Bureau of Land Management lease auction of 149,000 acres of public land in scenic southern and eastern Utah -- said he came to the BLM's state office in Salt Lake City to join about 200 other activists in a peaceful protest outside the building Friday morning. But then he registered with the BLM as representing himself and went to the auction room.
All sorts of people and groups were up in arms over the sale, thrown together with customary Bush Administration disregard for, you know, rules, regulations, environmental laws and the like. But DeChristopher's action was the only thing that actually stopped any of the sales from going through.
One reason the 2008 election is vitally important can be summed up in two words: Global warming. Another reason can also be summed up in two words: Supreme Court. I hope to write about global warming as well this weekend, but this diary is about Supreme Court.
Both, however, have the same underlying theme: while winning the 2008 is vitally important, it is necessary, but not sufficient. Indeed, neither global warming nor the Supreme Court should be the real focus of our attention, as they are but the most prominent outer manifestations of larger systemic struggles.
What is really needed is a much more sweeping and fundamental reshaping of our collective thinking--and that can only come about through a reshaping of our public institutions.
I now want to turn my attention to global warming, by way of revisitng a recent, diary from Joe Brewer, of the Rockridge Institute, Why We Are Losing the Global Warming Battle. In it, Joe argues:
Right now, things don't look very promising. It isn't just that we've reached the tipping point, as James Hansen suggests. (warning - large PDF file) It isn't just that the first-ever climate bill is about to arrive DOA on the Senate floor--maybe not such a bad thing since Lieberman-Warner is built on the wrong ideas. The real problem is in the way we think about the problem and, therefore, the solutions.
There are two problems with "the way we think"-the actual lack of a well-developed framework of ideas, and the lack of an institutional framework for propagating the ideas we do have. These are, ever and always, the two sides of what Marxist philosopher Antonio Gramsci described as a "culture war" or "war of position"-a struggle to control the institutions that shape our culture, including not just the ideas we think, but the ideas we can think. In this case, I would argue that the later-the institutional framework- is much more of a problem than the framework ideas itself is.
For example, Joe goes on to say:
Consider this sampling of Big Ideas conservatives have pushed into public discourse:
* Nature is a resource to be exploited.
* Wealth is measured simply by money.
* The economy and environment are distinct and inevitably in conflict with one another.
* Polluting is a right, so companies should be compensated for the cost of clean-up.
* Markets are natural and naturally good.
* Government is distinct from markets and intrudes upon them.
These ideas are at the heart of the climate debate.
It is not hard to think of ideas counter to those. What is hard is to envision powerful organizations engaged in systematically refuting them with a vigour equal to that of conservatives pushing them.
Just as religious extremists like John Hagee accuse mainstream Christians (Catholic Church, anyone?) of not being "real Christians," so, too, "market fundamentalists" hurl accusations of "socialism" and "communism" at anyone who doesn't toe the line with their theological view of markets as supernatural miracles.
This battle of pseudo-ideas has long been raging around the primary local story that I've been writing about for the past 5 years--the pollution at the ports of Los Angeles (POLA) and Long Beach POLB), but it took a particularly sharp turn in recent weeks. POOLB adopted a "Clean Trucks Plan" to supposedly clean up the air, that excluded an important part of the original plan, which had been mercilessly attacked by the highly-polluting goods movement industry. This was a provision to make the so-called "independent owner-operators" into paid employees. (So-called, because the vast majority are in no way independent, but are more like sweatshop workers, who are also often similarly misclassified, despite working only for a single firm.)
POLB argued that the employment issue had nothing to do with cleaning up the air--but they had conducted no study to support this claim. Indeed, there was testimony to the contrary at the hastily-called meeting where they approved the CTP. They were simply mouthing the claims of industry shills and market fundamentalists.
The shell-shocked LA Times joined the corporate chorus, as it opined against "an unholy alliance between environmentalists and organized labor," saying:
Pollution, death and economic stagnation. These catastrophes are being brought to you by the Natural Resources Defense Council and the International Brotherhood of Teamsters.
Growth at the economically vital ports of Los Angeles and Long Beach has been slowed for years as environmental concerns stalled expansion projects. Two years ago, it seemed the ports were close to a deal that would both allow expansion to proceed and reduce the diesel emissions from ships, trucks and trains that kill an estimated 1,200 Southern Californians a year. Yet now, thanks to a dispute that has nothing to do with pollution and everything to do with an unholy alliance between environmentalists and organized labor, the deal is in danger of unraveling.
Everything about those two paragraphs is wrong. Virtually the only slowdown there's been in throughput at the two ports has been due to the economy, as the growth in throughput over the past 20 years continues to be far in excess of projections. But it was industry opposition--up to and including the threat of interminable lawsuits--that has delayed implementation, and lead to POLB hurriedly passing a plan that no one had ever studied.
In sharp contast, a comprehensive study of the original plan was just released by Beacon Economics, a relatively new consulting firm whose principals are quite bullish, but realistic about the value of markets. My story about their report, from the current issue of Random Lengths News appears on the flip, illustrating the significant gap between market realism and market fundamentalism.
Two weekends ago I wrote a couple of diaries about the free market as a failed policy and failed idea, as well as Naomi Klein's new book, The Shock Doctrine. My point was not simply to attack the notion of the free market, but to point out the necessity of doing so as part of a larger struggle for political realignment. Such a struggle requires more than discrediting old ideas, however. It requires replacing them--either with new ideas, with the rehabilitation of old ideas, or with some combination of the two.
At my day job, I write a lot about the Port of Los Angeles and its impact on the surrounding communities. It's an excellent example for what I'm talking about. The port facilitates the massive importation of consumer goods into the US, which not only involves significant exploitation of workers and the environment abroad, it also takes a terrible toll on the local communities surrounding the ports (Los Angeles and Long Beach) and the regions inland that are heavily impacted by port-related traffic. Indeed, more people in California die from the pollution generated by goods movement than die from homicides each year. These aren't industrial accidents I'm talking about. They are simply the "normal" cost of doing business. Except, of course, the businesses involved do not pay the costs of doing business. The public does.
The story on the jump is one I wrote for Random Lengths News that ended up getting supplanted by another. But it's well suited as an example of a phenomena that is all-pervasive in todays global economy, and it points to how we can start reframing that economy in terms that show what's really going on, and who's really paying the costs of someone else's fabulous wealth.
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