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Saturday, July 2, 2005
 Regarding Enron: The Smartest Guys in the Room

Topic: Commentary
I saw the documovie Enron: The Smartest Guys in the Room at a local theater last night. Overall the film was very good, and I highly recommend seeing it. The film does a good job at examining the corporation itself, as well as illuminating the wider impact that the company had on the nation, including it’s contribution to the California energy crisis and it’s contributions to energy deregulation policy. The documentary also examined the close personal ties between the Bush family and Enron executives.

Most of all, though, the film showed just how many different institutions were really involved in the rise and fall of Enron, and how this corporation was able to profoundly mislead Wall Street and hundreds of major financial institutions to the tune of billions of dollars, and how the ability of Enron to do this exposed major shortcoming of our entire economic system.

While the film was very good overall, it still failed to make a few significant fundamental points.

There was a lot of criticism of Enron’s practices from an ethical or moral standpoint, however the film actually failed to give a full economic denunciation of some of Enron’s practices. In addition, even the critics of Enron continued to use the terms “earned money” and “made money” when discussing the incomes of Enron executives.

This really makes clear how deeply rooted misunderstanding of economics is in our society.

The very problem with Enron is exactly the fact that its executives were not earning or making money, what they were doing was acquiring money that they had not earned.

That is, fundamentally, the issue. If they had actually “made” the money then there wouldn’t be a problem; the problem was that they were transferring money to themselves that they had in fact not earned.

Despite the fundamental importance of this point, even the biggest critics of the Enron executives still said things like “these men were making millions of dollars, while the company was swimming in debt”, or things of that nature. No, they weren’t “making” millions, they were “taking” millions.

The film also failed to appropriately explain how Enron profited from the California energy crisis. There was a moral criticism of Enron’s role in contributing to the California energy crisis for profit, but what they failed to explain was the fundamental economic principles that Enron was violating in order to generate profits.

One way that Enron got money from the California energy crisis was that they induced blackouts by shutting down power plants in order to drive up the price of energy. This isn’t creating value, this is actually destroying value. What Enron did was profit from value destruction, a fundamental violation of the principles of economics.

As an “energy trader”, what Enron basically did was they bought energy at a low price when there was plenty of energy “on the market”, and then they created an energy shortage, at which time they sold energy at a higher price.

Enron wasn’t actually creating value in this process; they were destroying value by contributing to the crisis. All economic systems, from capitalism to communism, are predicated on the assumption that compensation is related in some way to value creation. Getting paid to make things worse, of course, is no way to develop a successful system.

Enron employees and executives actually legitimized their practices to themselves because of their fundamentalist “free-market” ideology. From the very beginning Enron’s business model was based on market manipulation and the use of fuzzy accounting to push numbers around on paper and “make money” without actually creating value. The California crisis was just the most extreme manifestation of their market practices.

Jeff Skilling was shown during several interviews stating that ideas and risk create value. This shows just how little he actually understands economics, and to what extent he and Ken Lay were able to manipulate their way to millions of dollars because, fundamentally, the leaders of all of our major financial instructions from Wall Street to banks have bought into these same beliefs. It is important to note that Key Lay has a PhD. in economics.

Risk does not create value. Sometimes it is necessary to take risks in order to develop new ways to create value, but risk itself does not create value.

On the whole, though, as was said, Enron: The Smartest Guys in the Room, is a very worthwhile production that illuminates the story of one of the most aggressively right-wing corporate institutions of our time.

The most revealing aspect of watching this film in the theater, however, was the fact that it was only showing in one theater in the tri-county major metropolitan area, and there was only one other couple in the theater at the time. Some friends of mine had seen it the week before, the first week it played here, and they said that they were the only ones in the theater at the time.

While this is a documentary that should be playing on prime time television, the reality is that only a handful of people will ever watch it. The story of Enron and the other corporate scandals is a complicated one. This film at least puts the story into popular format, but when no one is interested in learning about the problem, even when it is presented in popular format, is there really any hope of solving the problems?


Posted by rationalrevolution.net at 3:51 PM EDT | Post Comment | View Comments (1) | Permalink
 Live 8

Topic: Semi-random Thoughts
Live 8 = Millionaires jumping around on stage saying that we can end poverty by throwing big parties.


Posted by rationalrevolution.net at 3:35 PM EDT | Post Comment | Permalink
Wednesday, June 29, 2005
 Fly the Iraqi Flag on 4th of July

Topic: Semi-random Thoughts
As we celebrate our own independence this year, I believe that it is especially important that we also honor and show support for the independence of the people of Iraq. The people of Iraq are facing difficult times, and are in fact still fighting for their independence. The Iraqi people need to know that we, the American people, are behind them, and support their independence.

This 4th of July should be a day to put aside political differences for the good of the Iraqi people. Regardless of your stance on the war, its a time to show he Iraqi people that they are in our hearts and minds, and that we the American people are hoping for the best for them, and have a genuine desire to help them gain freedom, independence, and stability.

So please, when you go to 4th of July celebrations this weekend, support our brothers and sisters in Iraq in a show of international solidarity by flying the flag of the people that we are currently engaged with.

Iraqi Flag


Buy Discount Iraqi Flags


Note that a new Iraqi flag was proposed, but the design was ultimately rejected. The old Iraqi flag is still the official flag of Iraq, and may remain so.


Posted by rationalrevolution.net at 7:21 AM EDT | Post Comment | Permalink
Updated: Wednesday, June 29, 2005 7:25 AM EDT
Saturday, June 25, 2005
 The Corporate State Grows Stronger

Topic: Commentary
Supreme Court backs municipal land grabs


Cities, Homeowners Clash Over Land Rights

The recent Supreme Court ruling, to allow the use of eminent domain to transfer property to private institutions, is the inevitable result of the capitalistic corporatism of the United States. This is "Trickle Down Theory" taken to its logical conclusion.

The Trickle Down theory of the Reagan administration, which we are all still currently living under, states that by giving more to the rich, the lives of everyone will get better.

Likewise, the Supreme Court ruling to allow government to confiscate private property to transfer it to other private entities if they feel that the other entities can make "better use" of the property, is based on the same principle.

In the ruling justice Stevens wrote:
"The city has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including -- but by no means limited to -- new jobs and increased tax revenue,"

The theme is familiar, steal from the poor and give to the rich, in the end, the theory goes, the poor will really be better off.

The entire ruling is based on the idea that if one private entity can make "more economic use" of a piece of property than another, then its okay to transfer the property to the entity that can make better use of it.

This introduces profit motive into the use of eminent domain. Traditionally eminent domain has been used to acquire property for the building of purely public things such as public schools or roads, etc. In this case there is no direct profit motive in the use of eminent domain, although there are known cases of abusing this form of usage to improve the value of land owned by certain individuals or to build infrastructure to support certain wealthy businessmen who want a road to certain locations to transport resources and the like. One of the most famous uses of eminent domain was actually by the government of Texas that used eminent domain to acquire the land used to build the Texas Rangers stadium, which was backed business partners of George W. Bush, who was part owner of the Texas Rangers baseball team.

In recent years, however, eminent domain has been being used by large corporations, such as Wal-Mart, Target, and Home Depot, to acquire land in cities to build their giant retail outlets.

Economies of scale essentially dictate that any large business is going to be able to generate more revenue, create more job, and pay more taxes, than any small business or residential usage.

This means that if the test of "public good" is simply that one private entity can generate more revenue than another, all property rights become subject to economies of scale. Larger entities will always be able to make more economic use of property than smaller independent entities.

What this ruling has really done, however, is just shine a light on a practice that was already in use. Cities were already taking property from individuals in order to hand it over to corporations.

This is the critical issue that has been a theme among my articles on this website. The issue is not "private property" vs "public property", the issue is really that there are inherent conflicts of interest between private property owners. This is where so many defenders of simply "private wealth" have failed to see the big picture. Government is a tool of the wealthy to protect and advance the interests of the wealthy.

As private wealth and power become concentrated, not only do they gain influence, but the interests of wealthy property owners are in conflict with lesser property owners.

When the means of production becomes concentrated in the hand of a few, of course those few are going to hold the power of the economy in their hands, and that power now extends into the power over property ownership itself.

This is definitely the next logical step in the development of the American Corporatism.


Posted by rationalrevolution.net at 7:33 PM EDT | Post Comment | Permalink
Updated: Saturday, June 25, 2005 7:40 PM EDT
 Using Liberation As a Justification for War

Topic: Semi-random Thoughts
I believe that war for liberation can be justified, the problem is that if you go to war for liberation, then it has to be because the public is behind the cause of liberation.

This is the problem with the war in Iraq. The war in Iraq never had majority public support as a war of liberation, it had American public support as a war of fear, anger, hate, and aggression. Of the Americans who did support the war in Iraq, the majority of them did so for nationalistic reasons, for reasons such as belief that we were threatened by Iraq, because people wanted to see tanks roll under the Red White and Blue, or simply out of a tribal hatred for "others".

The same was the case of the Vietnam War. The Vietnam War was ultimately justified as a war to liberate the people of Vietnam, though it was always also understood as a war against Communism as well. The leaders called it a war of "help", but the public supported it out of hate and fear.

The reality is that the American people never supported either war on the basis of liberation. This country never had majority support for a war to overthrow Saddam for the purpose of making the lives of Iraqis better, and now that that is the one and only justification for the war, the nationalistic militants, who had supported the war initially, are no longer interested.

A war for liberation can only work if the public supports the liberation movement and feels solidarity with the people being liberated. A big problem for the Vietnam and Iraq wars psychologically for the American people, is that the supporters of the war were never really supporters of the people who were supposedly being liberated.

We didn't go into the war with a national sense of purpose to help the Iraqis, and so, that is the reason that support for the war is fading. The majority of the supporters of the Iraq war supported it out of a sense of nationalism and out the view that America had something to gain from the action. Now that the war is turning into a financial drain, without an clear benefit to America in the short term, these people no longer support the war.

Did the president stand up and ask the American public "Are you willing to sacrifice to help make the lives of Iraqis better?"

No, he did not.

The biggest mistake that the Bush administration made, was in trying to sell the Iraq war to the American people on the principles of fear and nationalism, because all just wars have to end in reconstruction and unity. The president has pulled a bait and switch on his own supporters, and that, more than anything, is what is coming back to bite him now.

If a nation is going to engage in a war of liberation, then it has to be clear from the start what the war is about, and the public has to be fully committed to liberation and helping the other country. There have been wars of liberation throughout history, but the people backed those wars out of solidarity, not out of hate or fear or nationalism. The challenge that Bush has now is in trying to take a war of nationalism and turn it into an act of solidarity.

Its inevitable that "conservative" support for this war is going to fade, because the war is no longer seen as a war to protect America or a war to "kill the evil doers". Now, its a war to protect Iraqi citizens and, quite frankly, I don't think the majority of Americans really care about that.


Posted by rationalrevolution.net at 6:12 PM EDT | Post Comment | View Comments (1) | Permalink
Friday, June 24, 2005
 Now is the time to support Iraq, but support is waning

Topic: Commentary
Poll: USA is losing patience on Iraq

Recent polls show that support for an America presence in Iraq is dropping, and more and more American's don't feel that the war was worth it. The result is increased calls to pull American troops out of Iraq.

Though I have been opposed to this war all along, mostly because the Bush administration was being dishonest and manipulative in its campaign of deception to sell the war, the fact now is that American troops are there and the US has devastated the countr. We now have an obligation to see this through and clean things up.

There is a well-known saying that you have to break a few eggs to make an omelet. Well, basically, at this point, we have gone into Iraq and broken a bunch of eggs. We should at least try to make the omelet and not just leave raw egg splattered all over the ground.

I don't agree with President Bush on much, but I do agree with his recent statement that we need to see this project through to the end in order for the sacrifices of the 1,700 dead Americans and the tens of thousands of dead Iraqis to be worth it.

The fact that 6 in 10 people now support full withdrawal from Iraq means that many of the people who supported the war initially must now be in support of removing troops.

I remember the run-up to war very clearly, and I remember all the cheerleaders who were gung-ho to send American troops into harms way. The taste for blood was big in early 2003, but no surprise, now even the warmongers and right-wingers want to pull out and leave.

We created the mess, now it's our responsibility to clean it up. We will probably need to invest another $500 billion into Iraq to make it a fair deal for killing all those people and destroying their country. Probably many more Americans will have to die as well.

This is why people like myself opposed the war in the first place, and called for more details from the President on both the justification for war and a plan for reconstruction. There were many people in 2002 and early 2003 plainly stating that there was no evidence that the regime of Saddam Hussein posed an immediate threat, and that the intelligence didn't support the idea that Iraq was an immediate threat.

We did have time to explore better options, we did have time to make better plans, we did have time to let Hans Blix finish his job, we did have time to build a better coalition, but no, instead the Bush administration, and his loyal supporters in the public, rallied behind the calls to war.

The fact is that some people supported the war only because they liked the idea of bombing the Middle Eastern people and they thought that it was cool to see American weaponry in action.

I remember it well. I remember having conversations at work, in the gym, and even on the internet, with people whose attitude was: “bomb them back to the stone ages!”, “turn Iraq into a parking lot and let Exxon take it over!”, or simply “nuke'em!”.

There were also the cases of watching CNN or FOX coverage of battlefield action and bombing and hearing the remarks of people saying “Hell yeah!”, “badass!”, or possibly, “holy fuck we just blew the shit out of those bastards!”

Ahh yes, but where is the excitement now? Now it's a steady stream of American body bags getting shipped home from deaths by roadside bombs. Not too exciting anymore, so now some of the warmongers want to pack up the troops and come home.

Now that the focus has shifted to security and reconstruction people no longer think war is fun. Too bad, we are in it for the long haul now.

It was cool watching the "Shock and Awe" on CNN two years ago, but it's not so "cool" anymore is it? Nah, now its a "quagmire", and now people realize that it's not a video game, it's real American boys and girls dying every day in a dirty stinking desert, and now it doesn't seem like such a good idea anymore.

Is anyone currently in doubt that we could have made better progress at a lower cost without going to war?

Ironically, even based on what the architects of the war have said, “just” liberating the Iraqi people isn't worth going to war over. This is what Paul Wolfowitz said in a May 2003 interview with Vanity Fair:
The truth is that for reasons that have a lot to do with the U.S. government bureaucracy we settled on the one issue that everyone could agree on which was weapons of mass destruction as the core reason, but… there have always been three fundamental concerns. One is weapons of mass destruction, the second is support for terrorism, the third is the criminal treatment of the Iraqi people. Actually I guess you could say there's a fourth overriding one, which is the connection between the first two[.]

The third one by itself, as I think I said earlier, is a reason to help the Iraqis but it's not a reason to put American kids' lives at risk, certainly not on the scale we did it. That second issue about links to terrorism is the one about which there's the most disagreement within the bureaucracy, even though I think everyone agrees that we killed 100 or so of an al Qaeda group in northern Iraq in this recent go-around, that we've arrested that al Qaeda guy in Baghdad who was connected to this guy Zarqawi whom Powell spoke about in his UN presentation.

So, even according to one of the primary drivers of the Iraq War, liberating the Iraqi people isn't worth American lives, yet that is really all that this war can be about now.

Now, the worst part is over. Now, tens of thousands have already been killed, and the bulk of the damage has been done.

Why throw away $200+ billion spent and the lives of thousands to let a country get taken over by terrorists, the terrorists that "WE" invited there.

This is "our" mess, so we are going to have to stay in to clean it up.

Maybe, just MAYBE, if the American people would actually EMBRACE the Iraqi people and form a real bond, and do some real help, and take the Iraqis into our hearts and minds, and try to actually help them (which, in reality, I do think that Bush is trying to do right now) we could actually win a real friend and partner in the Middle East, help a new country establish democracy, and make progress against terrorism and make the world a better place.

What this entire endeavor in Iraq has lacked, is a real embrace of the Iraqi people by Americans and the world. Not to parrot the Bush administration, but now really is not the time to pull out or leave the Iraqi's hanging out to dry. Real and genuine deep solidarity is needed between the people of America and Iraq. We need real displays of support for the Iraqi people.

This war was entered into for selfish reasons, of that there is no doubt. Americans backed the war because of what they felt were American interests, we didn't enter into this war to help a foreign country, but that is where we are today. The only thing we can salvage from this is helping a foreign country, so let's do it.
Bumper Sticker

At the very least Americans could take off the obnoxious American Flag bumper stickers from their car and put on joint Iraqi and American flag stickers. I see everyone with ribbons on their cars supporting various causes from the Troops, to America, to AIDS, to this or that. I have yet to see ONE single ribbon supporting the people of Iraq.

If Americans are so gung-ho to spread freedom and democracy around the world, then where is the sense of international brotherhood? Where is the feeling that existed after World War II, of a bond with the nations that we liberated?

I haven't met anyone, not even the biggest supporters of the war, who talks fondly about the Iraqis or who expresses hope for them. Regardless of whatever else Bush is doing or has done, pretty much of all of which I disagree with, at least he is expressing moral support for the Iraqi people, but the sad thing is, he's pretty much the only one in the country doing it.

I think that the time is now to get behind this effort, to support the American troops, and to support the military effort on the ground in Iraq and most of all, to really, and truly support the Iraqi people. I think that troop strength should actually be increased in Iraq right now, not reduced. It's going to take a sacrifice, indeed it will. Perhaps some might even view that sacrifice as atonement for American ills of the past.

This situation is not like Vietnam, in that the Vietnamese people did not want or need Americas in Vietnam. The Vietnamese war was a war of the Vietnamese people for independence from colonial French rule. They had a leader and a government that was widely supported by the people, they just wanted us out. They faced no foreign or terrorist threat. In Iraq, however, there is support for American help in containing the violence and establishing security, and if we leave, they do face a threat of violence from people who want to overturn the elected government and who will kill civilians. We do have an obligation to face down this threat and help to rebuild Iraq.

Bush isn't going to be in office forever, nor will Republicans and the architects of the war remain in power. However, we can form a deep and lasting bond with the Iraqi people that will live beyond this administration.


Posted by rationalrevolution.net at 8:05 AM EDT | Post Comment | View Comments (2) | Permalink
Updated: Saturday, June 25, 2005 5:42 PM EDT
Wednesday, June 22, 2005
 Undermining Our Own Future in Education

Topic: Semi-random Thoughts
Bill would allow 'intelligent design' in Pennsylvania schools

We face a very strange irony in the United States today. For the past 20 years Republican law makers and economists have promoted the idea of outsourcing most of what America has traditionally done, such as manufacturing and mining, etc, in favor of developing a high technology based economy. The idea was that we would let the developing countries take on all the more mundane tasks of production and America would lead the world in new technologies and scientific advances.

There is one critical problem with this concept: Americans as a whole have never embraced science. How can America be the world leader in technology and science when America is actually behind the developing world in accepting scientific principles and is increasingly moving in the opposite direction of science both culturally and legally?

Just recently we learned that South Korea had made the most advanced breakthroughs in embryonic stem cell research, yet this form of research is actually illegal in America. The future of technology is biotechnology, yet America today has some of the most restrictive laws against biotechnology research. The future of technology is biotechnology, yet American's have some of the most out dated and backward notions of biology of any major country on Earth, and we are currently moving backward in public understanding of the biosciences with schools around the country attempting to block the teaching of evolution or promote the teaching of completely unfounded and religiously based concepts like 'intelligent design'.

Basically, we have put all our economic eggs in the high tech basket, yet the American public doesn't even want to get near the basket!

In essence, our 'economic planners', and yes America does have economic planners, have forged ahead on a road for which there is little public support or understanding, and as the economic plan for a high tech American future goes ahead, the American public is dragging the education system back towards the 18th century.

The percentage of college students seeking science and engineering degrees in America is going down, and of those that are, half of them are foreign students. As someone in the technology industry myself, I know that the majority of people I work with are first or second-generation foreigners, most of which speak English as a second language. My co-workers, at more than one company, have included people from Asia, South America, Eastern Europe and India.

The idea that the future of the American economy lies in science and high tech is so absurd when compared against the cultural reality of a nation that fundamentally rejects science. Face it, Americans are the least scientifically minded of all the G8 nations, and are even less scientifically minded than the populations of countries like China and India, which are still (at least for the time being) third world countries.

Depending on the poll, and how the questions are phrased, only about 10% to 30% of American accept the theory of evolution, and between 40% and 60% believe that 'God created life on Earth as we know it in present form'.

So here we are, with economists and industry leaders forging off into the brave new economy of high tech and science, only to realize that when they turn around to look, the American public is not behind them. Yeah, Americans like to consume high tech gadgets, but when it comes to truly learning and understanding the fundamentals of science, and the implications of what those fundamentals means, nah, Americans don't want that.

So, over the next 10 to 20 years, if the trends continue, we can certainly kiss our place among the leaders of technology and science goodbye, and with it, the last vestiges of our economy. The irony is that conservatives may actually get what they want: We may return to a farming nation, since by that time the populations of China and India will be so affluent and so large that they will need to import much more food than they do now, and America is still a leader in farming. I guess we are safe with farming, since there is no way to outsource land.

The high tech economy really was a good idea. It's too bad that America is still too busy battling 18th century demons to actually embrace it.


Posted by rationalrevolution.net at 6:49 AM EDT | Post Comment | Permalink
Updated: Saturday, July 2, 2005 9:03 AM EDT
Thursday, June 9, 2005
 Regarding Richest Are Leaving Even the Rich Far Behind

Topic: Commentary
A recent article by David Cay Johnston, Richest are Leaving Even the Rich Far Behind, echoes the sentiment of my 2003 article, In Depth Analysis of American Income and Taxation. Johnston brings more weight to the subject of growing income inequality in America with fresh statistics and the fact that his article is published in the New York Times.

Some of the important facts that Johnston notes include:
"The average income for the top 0.1 percent was $3 million in 2002, the latest year for which averages are available. That number is two and a half times the $1.2 million, adjusted for inflation, that group reported in 1980. No other income group rose nearly as fast.

The share of the nation's income earned by those in this uppermost category has more than doubled since 1980, to 7.4 percent in 2002. The share of income earned by the rest of the top 10 percent rose far less, and the share earned by the bottom 90 percent fell."

".Under the Bush tax cuts, the 400 taxpayers with the highest incomes - a minimum of $87 million in 2000, the last year for which the government will release such data - now pay income, Medicare and Social Security taxes amounting to virtually the same percentage of their incomes as people making $50,000 to $75,000.

.Those earning more than $10 million a year now pay a lesser share of their income in these taxes than those making $100,000 to $200,000.

.The alternative minimum tax, created 36 years ago to make sure the very richest paid taxes, takes back a growing share of the tax cuts over time from the majority of families earning $75,000 to $1 million - thousands and even tens of thousands of dollars annually. Far fewer of the very wealthiest will be affected by this tax.

The analysis examined only income reported on tax returns. The Treasury Department says that the very wealthiest find ways, legal and illegal, to shelter a lot of income from taxes. So the gap between the very richest and everyone else is almost certainly much larger."

"From 1950 to 1970, for example, for every additional dollar earned by the bottom 90 percent, those in the top 0.01 percent earned an additional $162, according to the Times analysis. From 1990 to 2002, for every extra dollar earned by those in the bottom 90 percent, each taxpayer at the top brought in an extra $18,000."

"One reason the merely rich will fare much less well than the very richest is the alternative minimum tax. This tax, the successor to one enacted in 1969 to make sure the wealthiest Americans could not use legal loopholes to live tax-free, has never been adjusted for inflation. As a result, it stings Americans whose incomes have crept above $75,000.

The Times analysis shows that by 2010 the tax will affect more than four-fifths of the people making $100,000 to $500,000 and will take away from them nearly one-half to more than two-thirds of the recent tax cuts. For example, the group making $200,000 to $500,000 a year will lose 70 percent of their tax cut to the alternative minimum tax in 2010, an average of $9,177 for those affected.

But because of the way it is devised, the tax affects far fewer of the very richest: about a third of the taxpayers reporting more than $1 million in income. One big reason is that dividends and investment gains, which go mostly to the richest, are not subject to the tax."

While the article is certainly on the right track, the only problem that I have with it is the use of the term "earn" throughout the piece. In fact, Johnston isn't really discussing earnings, but merely receipts. We don't actually know what anyone "earns" in our economy, all that we do know is what they receive.

This isn't a trivial point, it's actually a major one that I have made before in the blog entry The Linguistics of Economic Deception.

Fortunately I wrote Mr. Johnston and was able to convince him of my point, so perhaps we will see more in the way of accurate economic discussion in the future, and Mr. Johnston is certainly an appropriate person to contribute to that effort.

The reality is that the super rich are receiving much, much, more value than they create each year, and this situation is rapidly escalating. With the rise of huge multi-national companies value created by workers from all over the world is being siphoned into the bank accounts of the hyper-rich in a runaway snowball effect, and the hyper-rich use their incomes to buy ownership of more and more capital in a self-feeding system that is concentrating huge portions of the value created by workers into the hands of a few. All the while, we keep engaging the fallacy of saying that our incomes actually represent earnings, when in fact, they represent nothing of the sort.

Earn is a subjective and loaded term. To say that everyone's income is earned, is preposterous at face value. People come into money in an infinite number of ways, many of which have nothing to do with earning it. The only thing you know when you know someone's yearly income is how much they have received, you know nothing at all about how much value they actually created over the year. The use of the word "earned" is just an attempt to provide an immediate justification for all incomes, both high and low, but the fact is that this simply isn't the case.

Earn is a subjective term, but receive is an objective term, and it's the only term that can honestly be used when discussing incomes.


Posted by rationalrevolution.net at 12:54 AM EDT | Post Comment | View Comments (1) | Permalink
Updated: Thursday, June 9, 2005 7:47 PM EDT
Wednesday, June 8, 2005
 It's not African Aid, it's reparations

Topic: Commentary
As anyone paying attention to the news knows, the leaders of industrialized countries are meeting and discussing the topic of "foreign aid" and "debt relief" to Africa.

We can never have an accurate discussion of the economic situation in Africa until Western societies openly acknowledge and own up to the massive exploitation that they have historically imposed on Africa. Indeed, literally trillions of dollars worth of wealth has been stolen from Africa by Western nations, mostly the Europeans, but America as well to a lesser degree.

All of Africa, of course, was colonized by the Europeans during the 18th and 19th century. During this time vast amounts of wealth were shipped out of the continent wholesale, without any compensation to the inhabitants whatsoever. This wealth is a significant part of the base of the wealth of today's industrialized nations. Without it these nations would all be poorer today. To call the action of "giving money" to Africa "aid" is a complete misnomer, in fact this is really an act of paying back to the continent what it is rightfully owed.

Africans should be charging interest to the Western Nations on the value of the wealth taken from the continent without compensation, indeed it is the West that is in debt to Africa in reality, not the other way around.

If we want to get some idea of the amount of wealth taken from Africa, and the debt that the West has to this continent, then we can first look to the value of the African slaves themselves. African slaves were used throughout the Americas, in the Caribbean, South America and North America, to produce literally trillions of dollars worth of wealth, 100% of which went into the coffers of established Western Society, and formed the base of the entire economic revolution of the West during the 17th through the 19th century. Let's get just a small taste of the size of this "value".

Statements from American slave holders give some idea of the value of the human capital that was taken from Africa:

The Declaration of Secession of Georgia states:
But they know the value of parchment rights in treacherous hands, and therefore they refuse to commit their own to the rulers whom the North offers us. Why? Because by their declared principles and policy they have outlawed $3,000,000,000 of our property in the common territories of the Union; put it under the ban of the Republic in the States where it exists and out of the protection of Federal law everywhere...

The Declaration of Secession of Mississippi states:
We must either submit to degradation, and to the loss of property worth four billions of money, or we must secede from the Union framed by our fathers, to secure this as well as every other species of property.

These two cases alone report an amount of $7 billion in 1860 dollars. Adjusted for inflation this would amount hundreds of billions of dollars, and this is just the tip of the iceberg. That doesn't count the "value" of any of the slaves held in the rest of the states, in the Caribbean, or in South America. It also doesn't even begin to count the material wealth taken from Africa, and continuing to be taken from Africa, in the form of gold, diamonds, timber, wildlife, minerals and more.

A real accounting of the degree to which Western economies have benefited from the exploitation of Africa has still never been done to my knowledge, but surely by any accounting literally trillions of dollars worth of resources have been taken from Africa without compensation.

Therefore, to act as though Western nations are being asked to simply "give" Africa something for nothing, i.e. charity, is a far cry from the truth.

Now let's discuss the topic of debt relief for African nations. Anyone with any knowledge of how the economic world really work would know that it is completely legitimate to erase 100% of African debt without any strings attached.

Here is how the majority of the African countries have gotten into debt:

Western companies found valuable resources in Africa that they wanted to acquire and bring to market for as little money as possible. Due to the under developed infrastructure of Africa, bringing these resources to market would actually be quite expensive because, left to the "free market" the company would have to build the infrastructure itself or raise private money to do so in order to extract the resources and bring them to the West.

So, companies and partners would lobby Western nations and talk to local chieftains. They would get support for a revolution or put some old half-prince into power in the country through the use of Western government aid. Once in power with the help of Western aid, the ruler, usually a warlord, was then advised by Western advisors to take our massive loans from governments, or from various private lenders at extremely high interests rates, in order to "build up the nation's infrastructure."

Well, the money was used to contract Western companies to design and implement the infrastructure. The infrastructure was built purely with the interest of extracting the resources as quickly as possible, often with a short term perspective, so the construction would be low quality, and the infrastructure would have little economic benefit to the country as it wouldn't be designed to really help the people.

The "investment in infrastructure" typically involved building a railroad from a port to a mineral mine or a timber forest, with no other use than to extract materials as directly as possible and get them on a ship bound for America or Europe.

In the end, the land was privatized and the African Natives were kicked off the land, the material wealth was taken out of the country with virtually no compensation, and the infrastructure served no valuable long term purpose and had no impact on helping to really develop the country. In reality it was all just a system to subsidize the actions of private corporations.

In the end, most of these high risk loans were transfered to the IMF or World Bank, who have acted as debt servicers.

Who pays the price? The African people, who had zero say in the process, had nothing to do with the debt, and got no benefit from it at all. In many of the cases this is exactly what has happened in Africa. A large number of the loans have been taken out by dictators over the past 50 years, almost all of which were operating in the interests of the Western powers.

This is really an entire paperwork scam run on an enormous international level, with the cooperation of governments and corporations, and now we act like we are doing the Africans favors by "forgiving their debt."

The reality is that this was never legitimate debt in the first place.

Where did all the money go? Into the hands of private investors and corporations that abused the system and manipulated warlords and villains into putting billions of dollars of debt onto the books of their nation at the expense of their own people.

Indeed corruption and incompetence has plagued Africa for the past 50 years, but much of this has been facilitated by the Western powers who have intentionally aided corrupt leaders to power precisely so that they could bribe them and use these schemes to load up the African books with billions of dollars of debt that serves as yet another means of international corporate welfare.

BBC: Africa 2005


Posted by rationalrevolution.net at 12:30 AM EDT | Post Comment | Permalink
Updated: Wednesday, June 8, 2005 7:37 AM EDT
Sunday, June 5, 2005
 The banality of American reporting: Wisdom from the past

Topic: Semi-random Thoughts
There are, first of all, two kinds of authors: those who write for the subject’s sake, and those who write for writing’s sake. The first kind have had thoughts or experiences which seem to them worth communicating, while the second kind need money and consequently write for money. They think in order to write, and they may be recognised by their spinning out their thoughts to the greatest possible length, and also by the way they work out their thoughts, which are half-true, perverse, forced, and vacillating; then also by their love of evasion, so that they may seem what they are not; and this is why their writing is lacking in definiteness and clearness.

Consequently, it is soon recognised that they write for the sake of filling up the paper, and this is the case sometimes with the best authors; for example, in parts of Lessing’s Dramaturgie, and even in many of Jean Paul’s romances. As soon as this is perceived the book should be thrown away, for time is precious. As a matter of fact, the author is cheating the reader as soon as he writes for the sake of filling up paper; because his pretext for writing is that he has something to impart. Writing for money and preservation of copyright are, at bottom, the ruin of literature. It is only the man who writes absolutely for the sake of the subject that writes anything worth writing. What an inestimable advantage it would be, if, in every branch of literature, there existed only a few but excellent books! This can never come to pass so long as money is to be made by writing. It seems as if money lay under a curse, for every author deteriorates directly he writes in any way for the sake of money. The best works of great men all come from the time when they had to write either for nothing or for very little pay. This is confirmed by the Spanish proverb: honra y provecho no caben en un saco (Honour and money are not to be found in the same purse). The deplorable condition of the literature of to-day, both in Germany and other countries, is due to the fact that books are written for the sake of earning money. Every one who is in want of money sits down and writes a book, and the public is stupid enough to buy it. The secondary effect of this is the ruin of language.

A great number of bad authors eke out their existence entirely by the foolishness of the public, which only will read what has just been printed. I refer to journalists, who have been appropriately so-called. In other words, it would be "day labourer."
-Arthur Schopenhauer, 1851; On Authorship and Style

Indeed, this is a truth that stands the test of time.

Certainly it is true that the corporate run media today has no interest in challenging the status quo of which it is a part, but the incredibly embarrassing nature of today's popular news media and book publishing is perhaps best explained by this 150 year old observation from Schopenhauer, one of Germany's greatest philosophers.


Posted by rationalrevolution.net at 10:42 PM EDT | Post Comment | View Comments (2) | Permalink

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