Archive

Archive for April, 2014

Ukraine, Russia and China

Why is Putin in Washington’s Crosshairs?

by Mike Whitney

CounterPunch (April 28 2014)

 

Washington wants to weaken Moscow economically by slashing its gas revenues and, thus, eroding its ability to defend itself or its interests. The US does not want an economically-integrated Europe and Asia. The de facto EU-Russian alliance is a direct threat to US global hegemony.

 

US provocations in Ukraine cannot be understood apart from Washington’s “Pivot to Asia”, which is the broader strategic plan to shift attention from the Middle East to Asia. The so called “re-balancing” is actually a blueprint for controlling China’s growth in a way that is compatible with US hegemonic ambitions. There are different schools of thought about how this can be achieved, but loosely speaking they fall into two categories, “dragon slayers” and “panda huggers”. Dragon slayers favor a strategy of containment while panda huggers favor engagement. As yet, the final shape of the policy has not been decided, but it’s clear from hostilities in the South China Sea and the Senkaku Islands, that the plan will depend heavily on military force.

So what does controlling China have to do with the dust up in Ukraine?

Everything. Washington sees Russia as a growing threat to its plans for regional dominance. The problem is, Moscow has only gotten stronger as it has expanded its network of oil and gas pipelines across Central Asia into Europe. That’s why Washington has decided to use Ukraine is a staging ground for an attack on Russia, because a strong Russia that’s economically integrated with Europe is a threat to US hegemony.  Washington wants a weak Russia that won’t challenge US presence in Central Asia or its plan to control vital energy resources.

Currently, Russia provides about thirty percent of Western and Central Europe’s natural gas, sixty percent of which transits Ukraine.  People and businesses in Europe depend on Russian gas to heat their homes and run their machinery. The trading relationship between the EU and Russia is mutually-beneficial strengthening both buyer and seller alike. The US gains nothing from the EU-Russia partnership, which is why Washington wants to block Moscow’s access to critical markets. This form of commercial sabotage is an act of war.

At one time, the representatives of big oil thought they could compete with Moscow by building alternate (pipeline) systems that would meet the EU’s prodigious demand for natural gas. But the plan failed, so Washington has moved on to Plan B; cutting off the flow of gas from Russia to the EU. By interposing itself between the two trading partners, the US hopes to oversee the future distribution of energy supplies and  control economic growth on two continents.

The problem Obama and Company are going to have, is trying to convince people in the EU that their interests are actually being served by paying twice as much to heat their homes in 2015 as they did in 2014, which is the way things are going to shake out if the US plan succeeds. In order to accomplish that feat, the US is making every effort to lure Putin into a confrontation so the media can denounce him as a vicious aggressor and a threat to European security.  Demonizing Putin will provide the necessary justification for stopping the flow of gas from Russia to the EU, which will further weaken the Russian economy while providing new opportunities for Nato to establish forward-operating bases on Russia’s Western perimeter.

It makes no difference to Obama whether people are gouged on gas prices or simply freeze to death in the cold. What matters is the “pivot” to the world’s most promising and prosperous markets of the next century.  What matters is crushing Moscow by slashing gas revenues, thus eroding its ability to defend itself or its interests.  What matters is global hegemony and world domination. That’s what really counts. Everyone knows this. To follow the daily incidents in Ukraine as though they could be separated from the big picture is ridiculous. They’re all part of the same sick strategy.  Here’s a clip from former US national security adviser Zbigniew Brzezinski in Foreign Affairs explaining how – as far as Washington is concerned – it makes no sense to have separate policies for Europe and Asia:

 

With Eurasia now serving as the decisive geopolitical chessboard, it no longer suffices to fashion one policy for Europe and another for Asia. What happens with the distribution of power on the Eurasian landmass will be of decisive importance to America’s global primacy and historical legacy. {1}

 

 

It’s all about the pivot to Asia and the future of the empire. This is why the CIA and the US State Department engineered a coup to oust Ukrainian president Viktor Yonuchovych and replace him with a US-stooge who would do Obama’s bidding.   This is why the imposter prime minister, Arseniy Yatsenyuk, has ordered two “anti-terror” crackdowns on unarmed activists in East Ukraine who oppose the Kiev junta.  This is why the Obama administration has avoided engaging Putin in constructive dialog aimed at finding on a peaceful solution to the present crisis. It’s because Obama wants to draw the Kremlin into a protracted civil war that will weaken Russia, discredit Putin, and shift public opinion to the side of the US and Nato. Why would Washington veer from a policy that clearly achieves what it’s supposed to achieve?  It won’t. Here’s an excerpt from an article on antiwar.com:

 

 

Reports out of Moscow say that President Putin has “shut down” all talks with President Obama, and say they are “not interested” in speaking to the US again under the current environment of threats and hostility.

Putin and Obama had been speaking regularly on the phone about Ukraine in March and early April, but Putin has not directly spoken to him since April 14, and the Kremlin says that they see no need to do any more talking. {2}

 

 

There’s nothing to be gained by talking to Obama. Putin already knows what Obama wants. He wants war. That’s why the State Department and CIA toppled the government. That’s why CIA Director John Brennan appeared in Kiev just one day before coup president Yatsenyuk ordered the first crackdown on pro-Russian protestors in the East. That’s why Vice President Joe Biden appeared in Kiev just hours before Yatsenyuk launched his second crackdown on pro-Russian protestors in the East. That’s why Yatsenyuk has surrounded the eastern city of Slavyansk where he is preparing an attack on pro-Russian activists. It’s because Washington believes that a violent conflagration serves its greater interests. It’s pointless to talk to people like that, which is why Putin has stopped trying.

At present, the Obama administration is pushing for another round of sanctions on Russia, but members in the EU are dragging their feet. According to RT:

 

“At the moment there is no consensus among the EU members on which economic measures against Russia would be acceptable, or even if they are needed at all”, a European diplomatic source told Itar-Tass.

The diplomat, who spoke on the condition of anonymity, said only an open military invasion of Ukraine or irrefutable proof of Russian clandestine military presence in Ukraine would tip EU’s stance toward economic sanctions. So far every piece of evidence that Kiev and Washington made public of alleged involvement of Russian agents in Ukraine was either inconclusive or simply false. {3}

 

Once again, it appears that Washington needs to draw Russian troops into the conflict to achieve its objectives.

On Sunday, RIA Novosti published satellite images showing a large buildup of troops outside the eastern Ukrainian city of Slavyansk. According to a report in Russia Today:

 

160 tanks, 230 APCs and BMDs, and at least 150 artillery and rocket systems, including “Grad” and “Smerch” multiple rocket launchers, have been deployed to the area. A total of 15,000 troops are positioned near Slavyansk, he said …

Russian Defense Minister Sergey Shoigu said the large buildup of Ukraine troops, as well as war games and additional deployments of armed forces to the Nato states in the region have “forced” Russia to respond with military drills of its own … If Kiev choses to escalate the crackdown on the protesters by using heavy arms against them Russia says it reserves the right to use its own military to stop bloodshed. {4}

 

Putin has stated repeatedly that he will respond if ethnic Russians are killed in Ukraine.  That’s the red line. Russian Foreign Minister Sergey Lavrov reiterated the same message in an interview last week with RT‘s Sophie Shevardnadze. The usually soft-spoken Lavrov, condemned  Yatsenyuk’s attack on Ukrainian civilians as “criminal” and warned that “an attack on Russian citizens  is an attack on the Russian Federation”.

The statement was followed by ominous reports of  Russian troop movements near Ukraine’s border indicating that Moscow may be preparing to intervene to stem the violence against civilians. According to Russia’s Itar Tass

 

Defense Minister Sergei Shoigu said, “As of today exercises of battalion tactical groups has begun in the border areas with Ukraine”. Also aviation will conduct flights to simulate the actions near the state border.

 

So there you have it: It looks like Obama’s provocations WILL draw Putin into the fray after all. But will things turn out the way that Obama thinks they will?  Will Putin follow Washington’s script and leave his troops in the east where they’ll be picked off by US-funded paramilitary guerillas and neo-Nazis or does he have something else up his sleeve, like a quick blitz to Kiev to remove the junta government, call for international peacekeepers to quell the violence, and slip back over the border to safety?

Whatever the strategy may be, we won’t have to wait long to see it implemented.   If Yatsenyuk’s army attacks Slavyansk, then Putin’s going to send in the tanks and it’ll be a whole new ballgame.

 References:

{1} http://www.wsws.org/en/articles/2014/04/26/pers-a26.html

{2} http://antiwar.com/

{3} “US failing to push economic sanctions against Russia through EU allies”, RT

{4} “Tanks, APCs, 15,000 troops’: Satellite images show Kiev forces build-up near Slavyansk”, RT

_____

Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press, 2012). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.

http://www.counterpunch.org/2014/04/28/why-is-putin-in-washingtons-crosshairs/

 

 

 

 

Advertisements
Categories: Uncategorized

Everybody Should Read This Explanation …

… of Where Money Really Comes From

by Joe Weisenthal

Business Insider (April 27 2014)

More and more people are calling for a “ban on banking”, but that’s not as crazy as it sounds.

Under a new regime, there would still be entities called “banks”. But they’d have a radically scaled back function. They would primarily serve as places that process payments and hold deposits, but they would be stripped of their most pivotal function, which is creating money.

This is a point that’s presumably missed by most of the population. You look at money and you think it’s something created by the government or the Fed. In fact, money is for the most part created by private banks.

In March, the Bank of England published an excellent, very clear paper titled “Money Creation In The Modern Economy” {1}.

It explains how, contrary to what people might think, a bank doesn’t make loans, by taking the deposits of a client and then lending those deposits out. Instead, the bank creates money out of thin air. If you want to get a mortgage for a house, and the bank deems you to be credit-worthy, it puts the amount of money you need into an account. That money in your account becomes a liability for the bank. And the mortgage it now owns is an asset of the bank.

These two images from the Bank of England report spell out nicely how it works.

The first shows how money is created from a bank’s perspective.

Prior to your taking out the loan, the bank has a certain amount of reserves, and a small amount of currency as assets, and its liabilities are its customer deposits.

After you take out your own, the bank doesn’t dip into its assets to give you money. Instead it creates a brand new asset (the loan it gives you) and a new liability, the brand new money you have as a deposit, which the bank just gave you.

Now here’s the same transaction from the customer’s perspective.

Your assets consist of some deposits and currency prior to the loan. Then after the loan, you have way more deposits than you had more (remember, when you get a loan, it’s not like the bank sends you out with a basket of cash. When you get a loan you have more money in your bank account than you had before). That loan is also a liability, since you have to pay it back.

This might seem basic, except this is where money is created these days, not from some other outside force.

Along with their paper, the Bank of England made a nice video explaining money creation. It’s worth a quick viewing {2}.

And read the full paper {3}.

Links:

{1} http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

{2} http://www.youtube.com/watch?feature=player_embedded&v=CvRAqR2pAgw

{3} http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

http://www.businessinsider.com/where-does-money-come-from-2014-4

Categories: Uncategorized

Ban All the Banks

Here’s the Wild Idea that People are Starting to Take Seriously

by Joe Weisenthal

Business Insider (April 27 2014)

Economists have begun seriously discussing the idea of banning banks. That seems ridiculous and far-fetched, but the idea might not be as crazy as it sounds.

But before we get to the idea, there’s something important that needs to be addressed, which is that people tend to have a gross misconception about what a bank does.

The typical person probably thinks about a bank the way it’s depicted in the movie It’s A Wonderful Life (1946).

In the scene below, George Bailey’s savings and loan is being caught up in a run on the banks. Bailey is forced to explain to the depositors their money isn’t in the vaults because it’s been loaned out. He then points to some people in the crowd who have taken out mortgages from the bank, explaining how that’s where people’s deposits have gone.

But actually that’s not how banks work.

How Do Banks Work?

The reality is that banks don’t make loans out of existing deposits. When a bank gives you a mortgage (or any other loan) it doesn’t go into its vaults to see if there’s cash available that someone else has deposited. Instead, the bank digitally (almost like magic) credits your account with the amount you need to pay for the home.

The Bank of England recently published a fantastic paper titled “Money Creation In The Modern Economy” {1} that explains that banks – rather than serving as an intermediary between depositors and borrowers – are in the business of creating money. Here’s the basic summary of how it works:

Essentially, modern banking represents the outsourcing of money creation from the federal government to the banking system.

Of course, there are limits on how much money banks can create (some of the limits stem from regulation, some stem from monetary policy, and some stem from the market itself). But still, most money creation comes from banks.

The new talk is that banks should be banned from creating money, and that the government would take it over.

Why change the current system?

Ever since the crisis, there’s been on ongoing discussion about how to make the financial system safer.

The recent debate really kicked off when FT columnist Marin Wolf called for stripping banks of their right to create money {2}. His argument was that allowing banks to create money ex-nihilo is what is responsible for destabilizing credit bubbles and busts. People expect that their money is safe, and so when banks make too many risky loans, the government is forced to step in and backstop everything. If the government is going to have to end up backstopping everything as it is, why not have the government be the source of money creation?

Wolf wants banks to just be depository and payment institutions. Just straight up utilities without the ability to create money.

As Amin Mian and Amir Sufi note on their blog House of Debt {3}, the same idea (roughly) was recently advanced by Chicago economist John Cochrane {4}.

That being said, the idea is extremely old.

Mian and Sufi link to a 1939 proposal – spearheaded by the famous economist Irving Fisher – which sought to recreate a more stable banking system in the wake of the Great Depression {5}. That paper spoke extensively about the need to prevent banks from creating money.

From that paper comes a stern warning about how the modern banking system is a “loose screw” in the American banking system, and that banks had too much power to create money.

That paper explained banks would still be able to act as lending intermediaries. For example, deposit accounts such as CDs (where the depositor was limited in how quickly they could get their money back) would be a legitimate source of loanable funds.

In his paper on getting banks out of the creation of money, John Cochrane argues that banks could still be in the business of originating mortgages and loans, but that they could be financed by other authorities. Or there could be lending institutions that are 100% financed by equity and debt (not by deposits) thus insuring that those institutions not need a bailout.

Will this happen?

Probably not.

In his piece on the subject, Martin Wolf says it will probably take another crisis before something like this is discussed {2}:

 

Our financial system is so unstable because the state first allowed it to create almost all the money in the economy and was then forced to insure it when performing that function. This is a giant hole at the heart of our market economies. It could be closed by separating the provision of money, rightly a function of the state, from the provision of finance, a function of the private sector. This will not happen now. But remember the possibility. When the next crisis comes – and it surely will – we need to be ready.

 

There are also some big objections to the idea.

In a blog post titled “Is a Banking Ban the Answer?” {6} Paul Krugman points out one big problem with Wolf”s piece, which is that what might happen is simply more financial activity happening outside the banking system, into the less regulated shadow banking system. Krugman also raises questions of complexity, and whether the problem runs even deeper than financial stability (given that financial stability was restored in fairly short order once the government decided to make that a priority).

What Else?

The IMF did a report in 2012 on the 1939 Chicago Plan, which is useful background reading {7}. Matthew Klein also wrote a great piece for Bloomberg View last year {8} on killing banking as we know it by imposing 100% capital requirements (ending fractional reserve banking).

Again, this isn’t going to happen, but it’s useful when thinking about the nature of money to realize that money creation is something that’s been outsourced to the banks, and that to have the government be the prime creator of money would be radical departure from the current system.

Links:

{1} http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

{2} http://www.ft.com/intl/cms/s/0/7f000b18-ca44-11e3-bb92-00144feabdc0.html#axzz307LB6vKb

{3} http://houseofdebt.org/2014/04/26/100-reserve-banking-the-history.html

{4} http://faculty.chicagobooth.edu/john.cochrane/research/papers/run_free.pdf

{5} http://faculty.chicagobooth.edu/amir.sufi/research/MonetaryReform_1939.pdf

{6} http://krugman.blogs.nytimes.com/2014/04/26/is-a-banking-ban-the-answer/

{7} https://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf

{8} http://www.bloombergview.com/articles/2013-03-27/the-best-way-to-save-banking-is-to-kill-it

http://www.businessinsider.com/banning-banks-2014-4

Categories: Uncategorized

The Biggest Secret About Banking Has Just Gone Mainstream

Banks Create Money Out of Thin Air … Conferring Enormous Windfall Profits At the Expense of the People

by WashingtonsBlog

http://www.washingtonsblog.com (April 28 2014)

We’ve pointed out for 4 1/2 years that banks create money out of thin air.

Specifically, it has now been conclusively proven that loans come first … and then deposits FOLLOW.

This is the most important secret about modern banking … because it debunks one of the biggest myths preventing a strong economy, challenges one of the main pork barrel profit centers for big banks … and opens up incredible opportunities for a prosperous economy.

This odd and counter-intuitive – but crucially important – truth has now gone mainstream …

Specifically, the Financial Times‘ Martin Wolf – one of the world’s most influential mainstream financial writers –  says that, since banks create money out of thin air, they should be stripped of this power, and limited to normal depository functions. Wolf indicates the centrality and importance of the issue with his subtitle:

 

The giant hole at the heart of our market economies needs to be plugged.

 

And Business Insider – the world’s most popular financial news blog – is currently running this as its top two front page stories: http://www.washingtonsblog.com/wp-content/uploads/2014/04/BI-Banks.jpg

If we reclaimed the power to create credit from the too big to fail banks, we would all be much wealthier …

Links:

The original version of this article, at the URL below, contains links to further information not included here,

http://www.washingtonsblog.com/2014/04/truth-banks-goes-mainstream.html

Categories: Uncategorized

Refusing the Call: A Tale Rewritten

by John Michael Greer

The Archdruid Report (April 23 2014)

Druid perspectives on nature, culture, and the future of industrial society

I have been wondering for some time now how to talk about the weirdly autumnal note that sounds so often and so clearly in America these days. Through the babble and clatter, the seven or eight television screens yelling from the walls of every restaurant you pass and all the rest of it, there comes a tone and a mood that reminds me of wind among bare branches and dry leaves crackling underfoot:  as though even the people who insist most loudly that it’s all onward and upward from here don’t believe it any more, and those for whom the old optimism stopped being more than a soothing shibboleth a long time ago are hunching their shoulders, shutting their eyes tight, and hoping that things can still hold together for just a little while longer.

It’s not just that American politicians and pundits are insisting at the top of their lungs that the United States can threaten Russia with natural gas surpluses that don’t exist {1}, though that’s admittedly a very bad sign all by itself. It’s that this orgy of self-congratulatory nonsense appears in the news right next to reports that oil and gas companies are slashing their investments in the fracking technology and shale leases that were supposed to produce those imaginary surpluses, having lost a great deal of money pursuing the shale oil mirage, while Russia and Iran  pursue a trade deal that will make US sanctions against Iran all but irrelevant {2}, and China is quietly making arrangements to conduct its trade with Europe in yuan rather than dollars {3}. Strong nations in control of their own destinies, it’s fair to note, don’t respond to challenges on this scale by plunging their heads quite so enthusiastically into the sands of self-deception.

To shift temporal metaphors a bit, the long day of national delusion that dawned back in 1980, when Ronald Reagan famously and fatuously proclaimed “it’s morning in America”, is drawing on rapidly toward dusk, and most Americans are hopelessly unprepared for the coming of night.  They’re unprepared in practical terms, that is, for an era in which the five per cent of us who live in the United States will no longer dispose of a quarter of the world’s energy supply and a third of its raw materials and industrial products, and in which what currently counts as a normal American lifestyle will soon be no more than a fading memory for the vast majority.  They’re just as unprepared, though,  for the psychological and emotional costs of that shattering transformation – not least because the change isn’t being imposed on them at random by an indifferent universe, but comes as the inevitable consequence of their own collective choices in decades not that long past.

The hard fact that most people in this country are trying not to remember is this:  in the years right after Reagan’s election, a vast number of Americans enthusiastically turned their backs on the promising steps toward sustainability that had been taken in the previous decade, abandoned the ideals they’d been praising to the skies up to that time, and cashed in their grandchildrens’ future so that they didn’t have to give up the extravagance and waste that defined their familiar and comfortable lifestyles. As a direct result, the nonrenewable resources that might have supported the transition to a sustainable future went instead to fuel one last orgy of wretched excess.  Now, though, the party is over, the bill is due, and the consequences of that disastrous decision have become a massive though almost wholly unmentionable factor in our nation’s culture and collective psychology.

A great many of the more disturbing features of contemporary American life, I’m convinced, can’t be understood unless America’s thirty-year vacation from reality is taken into account. A sixth of the US population is currently on antidepressant medications, and since maybe half of Americans can’t afford to get medication at all, the total number of Americans who are clinically depressed is likely a good deal higher than prescription figures suggest. The sort of bizarre delusions that used to count as evidence of serious mental illness – baroque conspiracy theories thickly frosted with shrill claims of persecution, fantasies of imminent mass death as punishment for humanity’s sins, and so on – have become part of the common currency of American folk belief. For that matter, what does our pop culture’s frankly necrophiliac obsession with vampires amount to but an attempt, thinly veiled in the most transparent of symbolism, to insist that it really is okay to victimize future generations for centuries down the line in order to prolong one’s own existence?

Mythic and legends such as this can be remarkably subtle barometers of the collective psyche. The transformation that turned the vampire from just another spooky Eastern European folktale into a massive pop culture presence in industrial North America has quite a bit to say about the unspoken ideas and emotions moving through the crawlspaces of our collective life. In the same way, it’s anything but an accident that the myth of the heroic quest has become so pervasive a presence in the modern industrial world that Joseph Campbell could simply label it “the monomyth”, the basic form of myth as such. In any sense other than a wholly parochial one, of course, he was quite wrong – the wild diversity of the world’s mythic stories can’t be forced into any one narrative pattern – but if we look only at popular culture in the modern industrial world, he’s almost right.

The story of the callow nobody who answers the call to adventure, goes off into the unknown, accomplishes some grand task, and returns transformed, to transform his surroundings in turn, is firmly welded into place in the imagination of our age. You’ll find it at the center of J R R Tolkien’s great works of fantasy, in the most forgettable products of the modern entertainment industry, and everything in between and all around. Yet there’s a curious blind spot in all this: we hear plenty about those who answer the call to adventure, and nothing at all about those who refuse it. Those latter don’t offer much of a plot engine for an adventure story, granted, but such a tale could make for a gripping psychological study – and one that has some uncomfortably familiar features.

With that in mind, with an apology in the direction of Tolkien’s ghost, and with another to those of my readers who aren’t lifelong Tolkien buffs with a head full of Middle-earth trivia – yes, I used to sign school yearbooks in fluent Elvish – I’d like to suggest a brief visit to an alternate Middle-earth:  one in which Frodo Baggins, facing the final crisis of the Third Age and the need to leave behind everything he knew and loved in order to take the Ring to Mount Doom, crumpled instead, with a cry of “I can’t, Gandalf, I just can’t”. Perhaps you’ll join me in a quiet corner of The Green Dragon, the best inn in Bywater, take a mug of ale from the buxom hobbit barmaid, and talk about old Frodo, who lived until recently just up the road and across the bridge in Hobbiton.

You’ve heard about the magic ring he had, the one that he inherited from his uncle Bilbo, the one that Gandalf the wizard wanted him to go off and destroy? That was thirty years ago, and most folk in the Shire have heard rumors about it by now. Yes, it’s quite true; Frodo was supposed to leave the Shire and go off on an adventure, as Bilbo did before him, and couldn’t bring himself to do it. He had plenty of reasons to stay home, to be sure.  He was tolerably well off and quite comfortable, all his friends and connections were here, and the journey would have been difficult and dangerous. Nor was there any certainty of success – quite the contrary, it’s entirely possible that he might have perished somewhere in the wild lands, or been caught by the Dark Lord’s servants, or what have you.

So he refused, and when Gandalf tried to talk to him about it, he threw the old wizard out of Bag End and slammed the round green door in his face. Have you ever seen someone in a fight who knows that he’s in the wrong, and knows that everyone else knows it, and that knowledge just makes him even more angry and stubborn?  That was Frodo just then. Friends of mine watched the whole thing, or as much of it as could be seen from the garden outside, and it was not a pleasant spectacle.

It’s what happened thereafter, though, that bears recalling. I’m quite sure that if Frodo had shown the least sign of leaving the Shire and going on the quest, Sauron would have sent Black Riders after him in a fine hurry, and there’s no telling what else might have come boiling up out of Mordor.  It’s by no means impossible that the Dark Lord might have panicked, and launched a hasty, ill-advised assault on Gondor right away. For all I know, that may have been what Gandalf had in mind, tricking the Dark Lord into overreacting before he’d gathered his full strength, and before Gondor and Rohan had been thoroughly weakened from within.

Still, once Sauron’s spies brought him word that Frodo had refused to embark on the quest, the Dark Lord knew that he had a good deal less to fear, and that he could afford to take his time. Ever since then, there have been plenty of servants of Mordor in and around the Shire, and a Black Rider or two keeping watch nearby, but nothing obvious or direct, nothing that might rouse whatever courage Frodo might have had left or  convince him that he had to flee for his life. Sauron was willing to be patient – patient and cruel. I’m quite sure he knew perfectly well what the rest of Frodo’s life would be like.

So Gandalf went away, and Frodo stayed in Bag End, and for years thereafter it seemed as though the whole business had been no more than a mistake. The news that came up the Greenway from the southern lands was no worse than before; Gondor still stood firm, and though there was said to be some kind of trouble in Rohan, well, that was only to be expected now and then.  Frodo even took to joking about how gullible he’d been to believe all those alarmist claims that Gandalf had made. Sauron was still safely cooped up in Mordor, and all seemed right with Middle-earth.

Of course part of that was simply that Frodo had gotten even wealthier and more comfortable than he’d been before. He patched up his relationship with the Sackville-Bagginses, and he invested a good deal of his money in Sandyman’s mill in Hobbiton, which paid off handsomely. He no longer spent time with many of his younger friends by then, partly because they had their own opinions about what he should have done, and partly because he had business connections with some of the wealthiest hobbits in the Shire, and wanted to build on those. He no longer took long walks around the Shire, as he’d done before, and he gave up visiting elves and dwarves when he stopped speaking to Gandalf.

But of course the rumors and news from the southern lands slowly but surely turned to the worse, as the Dark Lord gathered his power and tightened his grip on the western lands a little at a time. I recall when Rohan fell to Saruman’s goblin armies.  That was a shock for a great many folk, here in the Shire and elsewhere.  Soon thereafter, though, Frodo was claiming that after all, Saruman wasn’t Sauron, and Rohan wasn’t that important, and for all anyone knew, the wizard and the Dark Lord might well end up at each other’s throats and spare the rest of us.

Still, it was around that time that Frodo stopped joking about Gandalf’s warnings, and got angry if anyone mentioned them in his hearing. It was around that same time, too, that he started insisting loudly and often that someone would surely stop Sauron. One day it was the elves:  after all, they had three rings of power, and could surely overwhelm the forces of Mordor if they chose to. Another day, the dwarves would do it, or Saruman, or the men of Gondor, or the Valar in the uttermost West. There were so many alternatives!  His friends very quickly learned to nod and agree with him, for he would lose his temper and start shouting at them if they disagreed or even asked questions.

When Lorien was destroyed, that was another shock. It was after that, as I recall, that Frodo started hinting darkly that the elves didn’t seem to be doing anything with their three rings of power to stop Sauron, and maybe they weren’t as opposed to him as they claimed. He came up with any number of theories about this or that elvish conspiracy. The first troubles were starting to affect the Shire by then, of course, and his investments were beginning to lose money; it was probably inevitable that he would start claiming that the conspiracy was aimed in part against hobbits, against the Shire, or against him in particular – especially the latter. They wanted his ring, of course. That played a larger and larger role in his talk as the years passed.

I don’t recall hearing of any particular change in his thinking when word came that Minas Tirith had been taken by the Dark Lord’s armies, but it wasn’t much later that a great many elves came hurrying along the East Road through the Shire, and a few months after that, word came that Rivendell had fallen. That was not merely a shock, but a blow; Frodo had grown up hearing his uncle’s stories about Rivendell and the elves and half-elves who lived there. There was a time after that news came that some of us briefly wondered if old Frodo might actually find it in himself to do the thing he’d refused to do all those years before.

But of course he did nothing of the kind, not even when the troubles here in the Shire began to bite more and more deeply, when goblins started raiding the borders of the North Farthing and the Buckland had to be abandoned to the Old Forest. No, he started insisting to anyone who would listen that Middle-earth was doomed, that there was no hope left in elves or dying Numenor, that Sauron’s final victory would surely come before – oh, I forget what the date was; it was some year or other not too far from now. He spent hours reading through books of lore, making long lists of reasons why the Dark Lord’s triumph was surely at hand. Why did he do that? Why, for the same reason that drove him to each of his other excuses in turn: to prove to himself that his decision to refuse the quest hadn’t been the terrible mistake he knew perfectly well it had been.

And then, of course, the Ring betrayed him, as it betrayed Gollum and Isildur before him. He came home late at night, after drinking himself half under the table at the Ivy Bush, and discovered that the Ring was nowhere to be found. After searching Bag End in a frantic state, he ran out the door and down the road toward Bywater shouting “My precious! My precious!” He was weeping and running blindly in the night, and when he got to the bridge he stumbled; over he went into the water, and that was the end of him. They found his body in a weir downstream the next morning.

The worst of it is that right up to the end, right up to the hour the Ring left him, he still could have embarked on the quest.  It would have been a different journey, and quite possibly a harder one.  With Rivendell gone, he would have had to go west rather than east, across the Far Downs to Cirdan at the Grey Havens, where you’ll find most of the high-elves who still remain in Middle-earth. From there, with such companions as might have joined him, he would have had to go north and then eastward through Arnor, past the ruins of Annuminas and Lake Evendim, to the dales of the Misty Mountains, and then across by one of the northern passes: a hard and risky journey, but by no means impossible, for with no more need to hinder travel between Rivendell and Lorien, the Dark Lord’s watch on the mountains has grown slack.

Beyond the mountains, the wood-elves still dwell in the northern reaches of Mirkwood, along with refugees from Lorien and the last of the Beornings.  He could have gotten shelter and help there, and boats to travel down the River Running into the heart of Wilderland.  From there his way would have led by foot to the poorly guarded northern borders of Mordor – when has Sauron ever had to face a threat from that quarter?  So you see that it could have been done. It could still be done, if someone were willing to do it. Even though so much of what could have been saved thirty years ago has been lost, even though Minas Tirith, Edoras, Lorien and Rivendell have fallen and the line of the kings of Gondor is no more, it would still be worth doing; there would still be many things that could be saved.

Nor would such a journey have to be made alone. Though Aragorn son of Arathorn was slain in the last defense of Rivendell, there are still Rangers to be found in Cirdan’s realm and the old lands of Arnor; there are elf-warriors who hope to avenge the blood shed at Rivendell, and dwarves from the Blue Mountains who have their own ancient grudges against the Dark Lord. The last free Rohirrim retreated to Minhiriath after Eomer fell at Helm’s Deep, and still war against King Grima, while Gondor west of the river Gilrain clings to a tenuous independence and would rise up against Sauron at need. Would those and the elves of Lindon be enough? No one can say; there are no certainties in this business, except for the one Frodo chose – the certainty that doing nothing will guarantee Sauron’s victory.

And there might even still be a wizard to join such a quest. In fact, there would certainly be one – the very last of them, as far as I know. Gandalf perished when Lorien fell, I am sorry to say, and as for Saruman, the last anyone saw of him, he was screaming in terror as two Ringwraiths dragged him through the door of the Dark Tower; his double-dealing was never likely to bring him to a good end. The chief of the Ringwraiths rules in Isengard now. Still, there was a third in these western lands: fool and bird-tamer, Saruman called him, having never quite managed to notice that knowledge of the ways of nature and the friendship of birds and beasts might have considerable value in the last need of Middle-earth. Radagast is his name; yes, that would be me.

Why am I telling you all this?  Well, you are old Frodo’s youngest cousin, are you not? Very nearly the only one of his relatives with enough of the wild Tookish blood in you to matter, or so I am told. It was just a month ago that you and two of your friends were walking in the woods, and you spoke with quite a bit of anger about how the older generation of hobbits had decided to huddle in their holes until the darkness falls – those were your very words, I believe. How did I know that? Why, a little bird told me – a wren, to be precise, a very clever and helpful little fellow, who runs errands for me from time to time when I visit this part of Middle-earth. If you meant what you said then, there is still hope.

And the Ring? No, it was not lost, or not for long. It slipped from its chain and fell from old Frodo’s pocket as he stumbled home that last night, and a field mouse spotted it. I had briefed all the animals and birds around Hobbiton, of course, and so she knew what to do; she dragged the Ring into thick grass, and when dawn came, caught the attention of a jay, who took it and hid it high up in a tree. I had to trade quite a collection of sparkling things for it! But here it is, in this envelope, waiting for someone to take up the quest that Frodo refused. The choice is yours, my dear hobbit. What will you do?

_____

John Michael Greer is the Grand Archdruid of the Ancient Order of Druids in America {4} and the author of more than thirty books on a wide range of subjects, including peak oil and the future of industrial society. He lives in Cumberland, Maryland, an old red brick mill town in the north central Appalachians, with his wife Sara.

Links:

{1} http://thearchdruidreport.blogspot.com/2014/04/mentats-wanted-will-train.html

{2} http://peakoil.com/publicpolicy/iran-russia-working-to-seal-20-billion-oil-for-goods-deal

{3} http://www.ecns.cn/business/2014/04-01/107537.shtml

{4} http://www.aoda.org/

http://thearchdruidreport.blogspot.jp/2014/04/refusing-call-tale-rewritten.html

Categories: Uncategorized

Trade Legerdemain on Both Sides of the Atlantic

by Pete Dolack

http://systemicdisorder.wordpress.com (April 23 2014)

The Democratic Party has responded to the resistance against ramming through new trade agreements by giving the process a new name. “Fast-track” has been rebranded as “smart-track” and, voila, new packaging is supposed to make us forget the rotten hulk underneath the thin veneer.

Don’t be fooled. The Obama administration and its Senate enablers are nowhere near giving up on its two gigantic trade deals, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Because the stealthy “fast track” route – special rules speeding trade legislation through Congress with little opportunity for debate and no possibility of amendments – is the only way these corporate wish lists can be enacted, a “rebranding” is in order.

The new chair of the US Senate’s Finance Committee, Oregon Democrat Ron Wyden, earlier this month, in a speech given to apparel-industry corporate executives, announced his intention to replace the “fast track” process with a “smart track” process. That is noteworthy because the Finance Committee has responsibility in the Senate for trade legislation. It also noteworthy because Senator Wyden has voted to approve the last five US “free trade” agreements, going back to 2005.

Although the Transatlantic Partnership being negotiated between the United States and the European Union receives less attention than the twelve-nation Trans-Pacific Partnership, neither has much chance of passing without special fast-track authority. Should Congress agree to grant the White House fast-track authority, the Obama administration would negotiate a deal and submit the text for approval to Congress under rules that would prohibit any amendments or changes, allow only a limited time for debate, and require a straight yes or no vote.

None other than the previous US trade representative, Ron Kirk, said the Trans-Pacific Partnership has to be secret because if people knew what was in it, it would never pass. We should take him at his word.

Tell the people what they want to hear

On the surface, Senator Wyden’s speech to the American Apparel & Footwear Association Conference on April 10 sounds conciliatory. He made the standard ritual references, calling for trade agreements that create jobs and “expand … the winners’ circle”. The senator proclaimed:

 

I want to be very clear: only trade agreements that include several ironclad protections based on today’s great challenges can pass through Congress. I am not going to accept or advance anything less.

 

He did not fail to declare that “strong standards and enforcement” on labor and environmental standards “is an imperative”. But we can be forgiven skepticism here because Senator Wyden had this to say on existing labor and environmental standards:

 

People on all sides of the trade debate should more openly acknowledge the progress in these areas and the hard work that went into getting those reforms.

 

Progress? There are no enforceable rules concerning these areas in existing trade agreements such as the North American Free Trade Agreement. Lost jobs, reduced wages, more unemployment, higher food prices and reversals of environmental laws have invariably been the results. Unaccountable, secret tribunals staffed by corporate lawyers have enabled corporations to overturn regulations in all three Nafta countries – and the US government, in its current trade negotiations, wants rules even more weighted in favor of multi-national corporations than exists in Nafta.

If this is what Senator Wyden considers to be “progress”, what possible basis could there be for believing the Trans-Pacific and Transatlantic partnerships will deliver anything other than more corporate-dictated austerity?

The existing version of fast-track legislation – the Bipartisan Congressional Trade Priorities Act of 2014, better known as the Camp-Baucus bill – was effectively dead not long after its January release. It was expected that a new version of fast-track, with a couple of small, cosmetic changes and a cover story that opponents had been heard, would come. Senator Wyden has not disappointed, and it’s coming perhaps quicker than activists expected. This will become a hot potato as the November mid-term elections approach, so the senator was careful in his speech to not provide a timetable:

 

I am going to work with my colleagues and stakeholders on a proposal that accomplishes these goals [of more transparency] and attracts more bipartisan support. As far as I’m concerned, substance is going to drive the timeline.

 

‘Consultation’ only to let people vent

The perception of more transparency and public participation is all that we are likely to see, perhaps on the model of the European Union’s new public-consultation process. The process centers on a web site that EU citizens can use to fill out a questionnaire. The page is complicated to use, and has a ninety-minute time limit, after which any imputed data is wiped out. Write fast! And for good measure, the EU trade commissioner, Karel De Gucht, once again declared, in his last visit to Washington:

 

[W]e are happy to be scrutinized on this: no standard in Europe will be lowered because of this trade deal; not on food, not on the environment, not on social protection, not on data protection. I will make sure that [the Transatlantic Trade and Investment Partnership] does not become a ‘dumping’ agreement.

 

Neither his office, nor that of the US trade representative, Michael Froman, have been kind enough to share with the public when the next Transatlantic negotiating session will be held. There has been no lack of communication with corporate lobbyists, however. A European public-interest group, Corporate Europe Observatory, requested documents from the European Commission (the bureaucratic arm of the EU) to discover with whom EU negotiators are consulting.

It was revealed that of 127 closed meetings concerning the Transatlantic Partnership talks, at least 119 were with large corporations and their lobbyists. The Observatory reports:

 

The list of meetings reveals that … there is a parallel world of a very large number of intimate meetings with big business lobbyists behind closed doors – and these are not disclosed online. These meetings, moreover, were about the EU’s preparations of the trade talks, whereas the official civil society consultation was merely an information session after the talks were launched. The Commission’s rhetoric about transparency and about consulting industry and NGOs on an equal basis is misleading and gives entirely the wrong impression of [the European Commission’s] relations with stakeholders.

 

Three German Green Party members of the European Parliament (Ska Kellar, Rebecca Harms and Sven Giegold) have leaked the EU’s position paper on the Transatlantic Partnership negotiations (Members of the European Parliament are shut out of the negotiations.) Although this leak offers only a glimpse at EU negotiating positions, Europeans have a basis for concern. A rough English translation of the leaked document (available only in German) states:

 

The agreement will provide for the reciprocal liberalization of trade in goods and services and rules on trade-related issues, which it pursues through ambitious goals that go beyond what is available via the existing WTO commitments.

 

Although it also says the agreement will include a “general exception clause” on the basis of articles XX and XXI of the General Agreement on Tariffs and Trade (GATT), which purport to allow exceptions to trade agreements when necessary to safeguard human, animal or plant life or health, such clauses are meaningless. Other agreements have similar clauses, but are consistently superseded by rules such as Article 12.6 of the Trans-Pacific Partnership text that “Each Party shall accord to covered investments treatment in accordance with customary international law”.

‘Customary law’ is what a secret tribunal says it is

Precedents handed down in secret tribunals are what constitute “customary international law”. That the EU negotiators intend to “go beyond” the rules of the World Trade Organization should leave no doubt that “law” as desired by multi-national corporations is what is contemplated. Indeed, the leaked EU text states an intention to:

 

Provide a level playing field for investors in the US and in the EU … The agreement should provide an effective mechanism for the settlement of disputes between investors and the state.

 

That goal should be borne in mind when evaluating the EU’s April 10 announcement that it has refused to include the standard investor-state dispute rules in its proposed trade agreement with Canada, despite Canada’s now dropped insistence that it be included. Inside US Trade reports that:

 

Canada and the EU have agreed to a ‘closed list’ approach toward defining what constitutes a breach of fair and equitable treatment that was proposed by the EU … The closed list that the two parties agreed upon is comprised of: denial of justice in criminal, civil or administrative proceedings; a fundamental breach of due process; manifest arbitrariness; targeted discrimination on manifestly wrongful grounds; and abusive treatment of investors.

 

On the surface, the “closed list” approach to the bases over which a corporation can sue a government appears to have narrowed from the more common approach that places no limits on corporate suits. But, critics say, the list of arbitrable issues remains open-ended and open to corporate abuse. The Canadian public interest group International Institute for Sustainable Development, in a recently updated paper, warns:

 

The definition of investment is defined too broadly, covering any kind of asset, independent of whether or not investments are associated with an existing enterprise in the host state. … [The EU proposal would] make the concept of fair and equitable treatment very open-ended and, as a consequence, highly problematic.

 

The agreed-upon language, by not defining what constitutes an “asset”, would enable corporations unlimited opportunities to sue governments. Any rule or regulation that a corporation says will reduce its profits remains eligible to be overturned under the precedents of “customary international law”. The text of the agreements – and how they are likely to be interpreted – count for vastly more than the happy talk of trade negotiators, whichever side of the Atlantic or Pacific oceans.

European countries with strong regulations on the environment or food safety are at grave risk from the US, and environmental laws everywhere are prime targets. Activist work against these multi-national trade agreements has gained momentum in the past year, but there is much work to be done to stop what constitutes the most destructive corporate power grabs yet. Popular pressure is the only means to stop the Trans-Pacific, Transatlantic and Canada-EU trade deals. The next task will be to reverse existing trade deals that have done so much damage.

http://systemicdisorder.wordpress.com/

Categories: Uncategorized

Income (and Wealth) Inequality Becoming a Political Issue

by Thomas H Greco, Jr

Beyond Money (April 27 2014)

At long last, income inequality is becoming a mainstream political issue, thanks in large part to New York Times columnist Paul Krugman and Thomas Piketty, an obscure professor at the Paris School of Economics.

The English translation of Picketty’s new book Capital in the Twenty-First Century (2013) has become a political bombshell especially since Krugman’s review of it appeared in New York Review of Books. Titled, “Why We’re in a New Gilded Age” {1}, the review highlights Picketty’s research findings and political agenda.

As Krugman describes it,

 

The big idea of Capital in the Twenty-First Century is that we haven’t just gone back to nineteenth-century levels of income inequality, we’re also on a path back to “patrimonial capitalism”, in which the commanding heights of the economy are controlled not by talented individuals but by family dynasties.

 

And in assessing the book, he calls it

 

… a tour de force of economic modeling, an approach that integrates the analysis of economic growth with that of the distribution of income and wealth. This is a book that will change both the way we think about society and the way we do economics.

 

Krugman concludes his review with this statement:

 

Piketty ends Capital in the Twenty-First Century with a call to arms – a call, in particular, for wealth taxes, global if possible, to restrain the growing power of inherited wealth. It’s easy to be cynical about the prospects for anything of the kind. But surely Piketty’s masterly diagnosis of where we are and where we’re heading makes such a thing considerably more likely. So Capital in the Twenty-First Century is an extremely important book on all fronts. Piketty has transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to.

 

Now, Krugman has upped the ante with his April 24 editorial “The Pikkety Panic” {2}, arguing that

 

… what’s really new about Capital in the Twenty-First Century is the way it demolishes that most cherished of conservative myths, the insistence that we’re living in a meritocracy in which great wealth is earned and deserved.

 

Krugman presents evidence to suggest that “conservatives are terrified” and in a panic to try to refute Pikkety’s inevitable conclusions, but failing to find substantive arguments, they have fallen back on name calling. If you can’t refute the facts, then try to discredit the source.

Summing up, Krugman says,

 

Now, the fact that apologists for America’s oligarchs are evidently at a loss for coherent arguments doesn’t mean that they are on the run politically. Money still talks  –  indeed, thanks in part to the Roberts court, it talks louder than ever. Still, ideas matter too, shaping both how we talk about society and, eventually, what we do. And the Piketty panic shows that the right has run out of ideas.

 

If that isn’t enough to make the political pot boil over, another newly published academic study, Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens {3} finds that

 

… economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.

 

Of course, most activists and even ordinary people have known all that, but now that academia has taken notice and begun to present solid scientific evidence, the pressure on politicians to acknowledge these conditions and act on them will build more quickly.

Links:

{1} http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/http:/www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/

{2} http://www.nytimes.com/2014/04/25/opinion/krugman-the-piketty-panic.html?hp&rref=opinion&_r=1

{3} https://www.princeton.edu/~mgilens/Gilens%20homepage%20materials/Gilens%20and%20Page/Gilens%20and%20Page%202014-Testing%20Theories%203-7-14.pdf

http://beyondmoney.net/2014/04/27/income-and-wealth-inequality-becoming-a-political-issue/

Categories: Uncategorized