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October 11 marked the end of World Orphan Week. With 133 million orphans in the world today, most in Africa, Asia and Latin America, and 15 million of them orphaned due to HIV/AIDS (according to SOS Children) we have a moral responsibility to ensure the basic needs orphans around the World. These needs include health, education and welfare. Addressing poverty issues in the various regions particularly populated with high levels of orphaned or abandoned children is being done by various organizations which all need our help.

There are numerous such organizations of which I have chosen to focus on a few. One particular one that is prominent for both addressing needs and informing the public with it's regularly updated website is SOS Children's Villages, www.soschildren.org . They regularly update their website with informative on conditions and events concerning orphans and current situations and events that may effect the wellbeing of children in need. Their website is essential for receiving the latest information as related to this issue. Another organization that I have been following for a few years now is the Christina Noble Children's Foundation based in Vietnam. Christina Noble, an Irish woman who relocated to Vietnam to set up an orphanage in 1989. Her story and the story of the Christina Noble Children's Foundation can be discovered in her excellent book, "Nobody's Child", a must read. She has orphanages established in Vietnam and Mongolia. Her website is www.cncf.org . Another orphanage organization based primarily in India is the Raina Foundation. I know a bit less about them but they have an informative website at www.rainafoundation.com . Unwanted girls in India are in particularly heart breaking situations because of some of the cultural attitudes of some Indians.

Another important organization is Oxfam International. While orphans are not their primary focus their focus on poverty issues directly impacts those most in need that frequently turns out to be orphans. Oxfam says "we believe we can end poverty and injustice as part of a Global movement for change". They combat poverty, hunger, disease and illiteracy. Oxfam is certainly one of the best of the International organizations. Their website is www.oxfam.org . Let me know of organizations you think are particularly good at addressing the issue and needs of orphans.

The Financial Tsunami: Sub-Prime Mortgage Debt is but the Tip of the Iceberg

Part 1: Deutsche Bank’s painful lesson

Even experienced banker friends tell me that they think the worst of the US banking troubles are over and that things are slowly getting back to normal. What is lacking in their rosy optimism is the realization of the scale of the ongoing deterioration in credit markets globally, centered in the American asset-backed securities market, and especially in the market for CDO’s—Collateralized Debt Obligations and CMO’s—Collateralized Mortgage Obligations. By now every serious reader has heard the term “It’s a crisis in Sub-Prime US home mortgage debt.” What almost no one I know understands is that the Sub-Prime problem is but the tip of a colossal iceberg that is in a slow meltdown. I offer one recent example to illustrate my point that the “Financial Tsunami” is only beginning.

Deutsche Bank got a hard shock a few days ago when a judge in the state of Ohio in the USA made a ruling that the bank had no legal right to foreclose on 14 homes whose owners had failed to keep current in their monthly mortgage payments. Now this might sound like small beer for Deutsche Bank, one of the world’s largest banks with over €1.1 trillion (Billionen) in assets worldwide. As Hilmar Kopper used to say, “peanuts.” It’s not at all peanuts, however, for the Anglo-Saxon banking world and its European allies like Deutsche Bank, BNP Paribas, Barclays Bank, HSBC or others. Why?

A US Federal Judge, C.A. Boyko in Federal District Court in Cleveland Ohio ruled to dismiss a claim by Deutsche Bank National Trust Company. DB’s US subsidiary was seeking to take possession of 14 homes from Cleveland residents living in them, in order to claim the assets.

Here comes the hair in the soup. The Judge asked DB to show documents proving legal title to the 14 homes. DB could not. All DB attorneys could show was a document showing only an “intent to convey the rights in the mortgages.” They could not produce the actual mortgage, the heart of Western property rights since the Magna Charta of not longer.

Again why could Deutsche Bank not show the 14 mortgages on the 14 homes? Because they live in the exotic new world of “global securitization”, where banks like DB or Citigroup buy tens of thousands of mortgages from small local lending banks, “bundle” them into Jumbo new securities which then are rated by Moody’s or Standard & Poors or Fitch, and sell them as bonds to pension funds or other banks or private investors who naively believed they were buying bonds rated AAA, the highest, and never realized that their “bundle” of say 1,000 different home mortgages, contained maybe 20% or 200 mortgages rated “sub-prime,” i.e. of dubious credit quality.

Indeed the profits being earned in the past seven years by the world’s largest financial players from Goldman Sachs to Morgan Stanley to HSBC, Chase, and yes, Deutsche Bank, were so staggering, few bothered to open the risk models used by the professionals who bundled the mortgages. Certainly not the Big Three rating companies who had a criminal conflict of interest in giving top debt ratings. That changed abruptly last August and since then the major banks have issued one after another report of disastrous “sub-prime” losses.

A new unexpected factor

The Ohio ruling that dismissed DB’s claim to foreclose and take back the 14 homes for non-payment, is far more than bad luck for the bank of Josef Ackermann. It is an earth-shaking precedent for all banks holding what they had thought were collateral in form of real estate property.

How this? Because of the complex structure of asset-backed securities and the widely dispersed ownership of mortgage securities (not actual mortgages but the securities based on same) no one is yet able to identify who precisely holds the physical mortgage document. Oops! A tiny legal detail our Wall Street Rocket Scientist derivatives experts ignored when they were bundling and issuing hundreds of billions of dollars worth of CMO’s in the past six or seven years. As of January 2007 some $6.5 trillion of securitized mortgage debt was outstanding in the United States. That’s a lot by any measure!

In the Ohio case Deutsche Bank is acting as “Trustee” for “securitization pools” or groups of disparate investors who may reside anywhere. But the Trustee never got the legal document known as the mortgage. Judge Boyko ordered DB to prove they were the owners of the mortgages or notes and they could not. DB could only argue that the banks had foreclosed on such cases for years without challenge. The Judge then declared that the banks “seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test,” the Judge concluded, “their weak legal arguments compel the court to stop them at the gate.” Deutsche Bank has refused comment.

What next?

As news of this legal precedent spreads across the USA like a California brushfire, hundreds of thousands of struggling homeowners who took the bait in times of historically low interest rates to buy a home with often, no money paid down, and the first 2 years with extremely low interest rate in what are known as “interest only” Adjustable Rate Mortgages (ARMs), now face exploding mortgage monthly payments at just the point the US economy is sinking into severe recession. (I regret the plethora of abbreviations used here but it is the fault of Wall Street bankers not this author).

The peak period of the US real estate bubble which began in about 2002 when Alan Greenspan began the most aggressive series of rate cuts in Federal Reserve history was 2005-2006. Greenspan’s intent, as he admitted at the time, was to replace the Dot.com internet stock bubble with a real estate home investment and lending bubble. He argued that was the only way to keep the US economy from deep recession. In retrospect a recession in 2002 would have been far milder and less damaging than what we now face.

Of course, Greenspan has since safely retired, written his memoirs and handed the control (and blame) of the mess over to a young ex-Princeton professor, Ben Bernanke. As a Princeton graduate, I can say I would never trust monetary policy for the world’s most powerful central bank in the hands of a Princeton economics professor. Keep them in their ivy-covered towers.

Now the last phase of every speculative bubble is the one where the animal juices get the most excited. This has been the case with every major speculative bubble since the Holland Tulip speculation of the 1630’s to the South Sea Bubble of 1720 to the 1929 Wall Street crash. It was true as well with the US 2002-2007 Real Estate bubble. In the last two years of the boom in selling real estate loans, banks were convinced they could resell the mortgage loans to a Wall Street financial house who would bundle it with thousands of good better and worse quality mortgage loans and resell them as Collateralized Mortgage Obligation bonds. In the flush of greed, banks became increasingly reckless of the credit worthiness of the prospective home owners. In many cases they did not even bother to check if the person was employed. Who cares? It will be resold and securitized and the risk of mortgage default was historically low.

That was in 2005. The most Sub-prime mortgages written with Adjustable Rate Mortgage contracts were written between 2005-2006, the last and most furious phase of the US bubble. Now a whole new wave of mortgage defaults is about to explode onto the scene beginning January 2008. Between December 2007 and July 1, 2008 more than $690 Billion in mortgages will face an interest rate jump according to the contract terms of the ARMs written two years before. That means market interest rates for those mortgages will explode monthly payments just as recession drives incomes down. Hundreds of thousands of homeowners will be forced to do the last resort of any homeowner: stop monthly mortgage payments.

Here is where the Ohio court decision guarantees that the next phase of the US mortgage crisis will assume Tsunami dimension. If the Ohio Deutsche Bank precedent holds in the appeal to the Supreme Court, millions of homes will be in default but the banks prevented from seizing them as collateral assets to resell. Robert Shiller of Yale, the controversial and often correct author of the book, Irrational Exuberance, predicting the 2001-2 Dot.com stock crash, estimates US housing prices could fall as much as 50% in some areas given how home prices have diverged relative to rents.

The $690 billion worth of “interest only” ARMs due for interest rate hike between now and July 2008 are by and large not Sub-prime but a little higher quality, but only just. There are a total of $1.4 trillion in “interest only” ARMs according to the US research firm, First American Loan Performance. A recent study calculates that, as these ARMs face staggering higher interest costs in the next 9 months, more than $325 billion of the loans will default leaving 1 million property owners in technical mortgage default. But if banks are unable to reclaim the homes as assets to offset the non-performing mortgages, the US banking system and a chunk of the global banking system faces a financial gridlock that will make events to date truly “peanuts” by comparison. We will discuss the global geo-political implications of this in our next report, The Financial Tsunami: Part 2.

F. William Engdahl is the author of A Century of War: Anglo-American Oil Politics and the New World Order. He is a Research Associate of the Centre for Research on Globalization (CRG). His most recent book, which has just been released by Global Research is Seeds of Destruction, The Hidden Agenda of Genetic Manipulation.

Slavoj Žižek: Don’t Just Do Something, Talk

One of the most striking things about the reaction to the current financial meltdown is that, as one of the participants put it: ‘No one really knows what to do.’ The reason is that expectations are part of the game: how the market reacts to a particular intervention depends not only on how much bankers and traders trust the interventions, but even more on how much they think others will trust them. Keynes compared the stock market to a competition in which the participants have to pick several pretty girls from a hundred photographs: ‘It is not a case of choosing those which, to the best of one’s judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligence to anticipating what average opinion expects the average opinion to be.‘ We are forced to make choices without having the knowledge that would enable us to make them; or, as John Gray has put it: ‘We are forced to live as if we were free.’

Joseph Stiglitz recently wrote that, although there is a growing consensus among economists that any bailout based on Henry Paulson’s plan won’t work, ‘it is impossible for politicians to do nothing in such a crisis. So we may have to pray that an agreement crafted with the toxic mix of special interests, misguided economics and right-wing ideologies that produced the crisis can somehow produce a rescue plan that works – or whose failure doesn’t do too much damage.’ He’s right: since markets are effectively based on beliefs (even beliefs about other people’s beliefs), how the markets react to the bailout depends not only on its real consequences, but on the belief of the markets in the plan’s efficiency. The bailout may work even if it is economically wrong.

There is a close similarity between the speeches George W. Bush has given since the crisis began and his addresses to the American people after 9/11. Both times, he evoked the threat to the American way of life and the necessity of fast and decisive action to cope with the danger. Both times, he called for the partial suspension of American values (guarantees of individual freedom, market capitalism) in order to save the same values.

Faced with a disaster over which we have no real influence, people will often say, stupidly, ‘Don’t just talk, do something!’ Perhaps, lately, we have been doing too much. Maybe it is time to step back, think and say the right thing. True, we often talk about doing something instead of actually doing it – but sometimes we do things in order to avoid talking and thinking about them. Like quickly throwing $700 billion at a problem instead of reflecting on how it came about.

On 23 September, the Republican senator Jim Bunning called the US Treasury’s plan for the biggest financial bailout since the Great Depression ‘un-American’:

Someone must take those losses. We can either let the people who made bad decisions bear the consequences of their actions, or we can spread that pain to others. And that is exactly what the Secretary proposes to do: take Wall Street’s pain and spread it to the taxpayers . . . This massive bailout is not the solution, it is financial socialism, and it is un-American.

Bunning was the first publicly to give the reasoning behind the GOP revolt against the bailout plan, which climaxed in its rejection on 29 September. The resistance was formulated in terms of ‘class warfare’, Wall Street against Main Street: why should we help those responsible (‘Wall Street’) and let ordinary borrowers (on ‘Main Street’) pay the price for it? Is this not a clear case of what economists call ‘moral hazard’? This is the risk that someone will behave immorally because insurance, the law or some other agency protects them against any loss that his behaviour might cause: if I am insured against fire, for example, I might take fewer fire precautions (or even burn down my premises if they are losing me money). The same goes for big banks, which are protected against big losses yet able to retain their profits.

That the criticism of the bailout plan came from conservative Republicans as well as the left should make us think. What left and right share in this case is their contempt for big speculators and corporate managers who profit from risky decisions but are protected from failures by ‘golden parachutes’. In this respect, the Enron scandal of January 2002 can be interpreted as an ironic commentary on the notion of a risk society. Thousands of employees who lost their jobs and savings were certainly exposed to risk, and had little choice in the matter. However, the top managers, who knew about the risk and also had the opportunity to intervene in the situation, minimised their exposure by cashing in their stocks and options before the bankruptcy. So while it is true that we live in a society that demands risky choices, it is one in which the powerful do the choosing, while others do the risking.

If the bailout plan really is a ‘socialist’ measure, it is a very peculiar one: a ‘socialist’ measure whose aim is to help not the poor but the rich, not those who borrow but those who lend. ‘Socialism’ is OK, it seems, when it serves to save capitalism. But what if ‘moral hazard’ is inscribed in the fundamental structure of capitalism? The problem is that there is no way to separate the welfare of Main Street from that of Wall Street. Their relationship is non-transitive: what is good for Wall Street isn’t necessarily good for Main Street, but Main Street can’t thrive if Wall Street isn’t doing well – and this asymmetry gives an a priori advantage to Wall Street.

The standard ‘trickle-down’ argument against redistribution (through progressive taxation etc) is that instead of making the poor richer, it makes the rich poorer. However, this apparently anti-interventionist attitude actually contains an argument for the current state intervention: although we all want the poor to get better, it is counter-productive to help them directly, since they are not the dynamic and productive element; the only intervention needed is to help the rich get richer, and then the profits will automatically spread down to the poor. Throw enough money at Wall Street, and it will eventually trickle down to Main Street. If you want people to have money to build, don’t give it to them directly, help those who are lending it to them. This is the only way to create genuine prosperity – otherwise, the state is merely distributing money to the needy at the expense of those who create wealth.

It is all too easy to dismiss this line of reasoning as a hypocritical defence of the rich. The problem is that as long as we are stuck with capitalism, there is a truth in it: the collapse of Wall Street really will hit ordinary workers. That is why the Democrats who supported the bailout were not being inconsistent with their leftist leanings. They would fairly be called inconsistent only if we accept the premise of Republican populists that capitalism and the free market economy are a popular, working-class affair, while state interventions are an upper-class strategy to exploit hard-working ordinary people.

There is nothing new in strong state interventions into the banking system and the economy in general. The meltdown itself is the result of such an intervention: when, in 2001, the dotcom bubble burst, it was decided to make it easier to get credit in order to redirect growth into housing. Indeed, political decisions are responsible for the texture of international economic relations in general. A couple of years ago, a CNN report on Mali described the reality of the international ‘free market’. The two pillars of the Mali economy are cotton in the south and cattle in the north, and both are in trouble because of the way that Western powers violate the same rules that they impose so brutally on Third World nations. Mali produces cotton of the highest quality, but the US government spends more money to support its cotton farmers than the entire state budget of Mali, so it is small wonder that Mali can’t compete. In the north, the European Union is the culprit: the EU subsidises every single cow to the tune of five hundred euros a year. The Mali minister for the economy said: we don’t need your help or advice or lectures on the beneficial effects of abolishing excessive state regulations; just, please, stick to your own rules about the free market and our troubles will be over. Where are the Republican defenders of the free market here? Nowhere, because the collapse of Mali is the consequence of what it means for the US to put ‘our country first’.

What all this indicates is that the market is never neutral: its operations are always regulated by political decisions. The real dilemma is not ‘state intervention or not?’ but ‘what kind of state intervention?’ And this is true politics: the struggle to define the conditions that govern our lives. The debate about the bailout deals with decisions about the fundamental features of our social and economic life, even mobilising the ghost of class struggle. As with many truly political issues, this one is non-partisan. There is no ‘objective’ expert position that should simply be applied: one has to take a political decision.

On 24 September, John McCain suspended his campaign and went to Washington, proclaiming that it was time to put aside party differences. Was this gesture really a sign of his readiness to end partisan politics in order to deal with the real problems that concern us all? Definitely not: it was a ‘Mr McCain goes to Washington’ moment. Politics is precisely the struggle to define the ‘neutral’ terrain, which is why McCain’s proposal to reach across party lines was pure political posturing, a partisan politics in the guise of non-partisanship, a desperate attempt to impose his position as universal-apolitical. What is even worse than ‘partisan politics’ is a partisan politics that tries to mask itself as non-partisan: by imposing itself as the voice of the Whole, such a politics reduces its opponents by making them agents of particular interests.

This is why Obama was right to reject McCain’s call to postpone the first presidential debate and to point out that the meltdown makes a political debate about how the two candidates would handle the crisis all the more urgent. In the 1992 election, Clinton won with the motto ‘It’s the economy, stupid!’ The Democrats need to get a new message across: ‘It’s the POLITICAL economy, stupid!’ The US doesn’t need less politics, it needs more.

Slavoj Žižek: Resistance Is Surrender

One of the clearest lessons of the last few decades is that capitalism is indestructible. Marx compared it to a vampire, and one of the salient points of comparison now appears to be that vampires always rise up again after being stabbed to death. Even Mao’s attempt, in the Cultural Revolution, to wipe out the traces of capitalism, ended up in its triumphant return.

Today’s Left reacts in a wide variety of ways to the hegemony of global capitalism and its political supplement, liberal democracy. It might, for example, accept the hegemony, but continue to fight for reform within its rules (this is Third Way social democracy).

Or, it accepts that the hegemony is here to stay, but should nonetheless be resisted from its ‘interstices’.

Or, it accepts the futility of all struggle, since the hegemony is so all-encompassing that nothing can really be done except wait for an outburst of ‘divine violence’ – a revolutionary version of Heidegger’s ‘only God can save us.’

Or, it recognises the temporary futility of the struggle. In today’s triumph of global capitalism, the argument goes, true resistance is not possible, so all we can do till the revolutionary spirit of the global working class is renewed is defend what remains of the welfare state, confronting those in power with demands we know they cannot fulfil, and otherwise withdraw into cultural studies, where one can quietly pursue the work of criticism.

Or, it emphasises the fact that the problem is a more fundamental one, that global capitalism is ultimately an effect of the underlying principles of technology or ‘instrumental reason’.

Or, it posits that one can undermine global capitalism and state power, not by directly attacking them, but by refocusing the field of struggle on everyday practices, where one can ‘build a new world’; in this way, the foundations of the power of capital and the state will be gradually undermined, and, at some point, the state will collapse (the exemplar of this approach is the Zapatista movement).

Or, it takes the ‘postmodern’ route, shifting the accent from anti-capitalist struggle to the multiple forms of politico-ideological struggle for hegemony, emphasising the importance of discursive re-articulation.

Or, it wagers that one can repeat at the postmodern level the classical Marxist gesture of enacting the ‘determinate negation’ of capitalism: with today’s rise of ‘cognitive work’, the contradiction between social production and capitalist relations has become starker than ever, rendering possible for the first time ‘absolute democracy’ (this would be Hardt and Negri’s position).

These positions are not presented as a way of avoiding some ‘true’ radical Left politics – what they are trying to get around is, indeed, the lack of such a position. This defeat of the Left is not the whole story of the last thirty years, however. There is another, no less surprising, lesson to be learned from the Chinese Communists’ presiding over arguably the most explosive development of capitalism in history, and from the growth of West European Third Way social democracy. It is, in short: we can do it better. In the UK, the Thatcher revolution was, at the time, chaotic and impulsive, marked by unpredictable contingencies. It was Tony Blair who was able to institutionalise it, or, in Hegel’s terms, to raise (what first appeared as) a contingency, a historical accident, into a necessity. Thatcher wasn’t a Thatcherite, she was merely herself; it was Blair (more than Major) who truly gave form to Thatcherism.

The response of some critics on the postmodern Left to this predicament is to call for a new politics of resistance. Those who still insist on fighting state power, let alone seizing it, are accused of remaining stuck within the ‘old paradigm’: the task today, their critics say, is to resist state power by withdrawing from its terrain and creating new spaces outside its control. This is, of course, the obverse of accepting the triumph of capitalism. The politics of resistance is nothing but the moralising supplement to a Third Way Left.

Simon Critchley’s recent book, Infinitely Demanding, is an almost perfect embodiment of this position.[*] For Critchley, the liberal-democratic state is here to stay. Attempts to abolish the state failed miserably; consequently, the new politics has to be located at a distance from it: anti-war movements, ecological organisations, groups protesting against racist or sexist abuses, and other forms of local self-organisation. It must be a politics of resistance to the state, of bombarding the state with impossible demands, of denouncing the limitations of state mechanisms. The main argument for conducting the politics of resistance at a distance from the state hinges on the ethical dimension of the ‘infinitely demanding’ call for justice: no state can heed this call, since its ultimate goal is the ‘real-political’ one of ensuring its own reproduction (its economic growth, public safety, etc). ‘Of course,’ Critchley writes,

history is habitually written by the people with the guns and sticks and one cannot expect to defeat them with mocking satire and feather dusters. Yet, as the history of ultra-leftist active nihilism eloquently shows, one is lost the moment one picks up the guns and sticks. Anarchic political resistance should not seek to mimic and mirror the archic violent sovereignty it opposes.

So what should, say, the US Democrats do? Stop competing for state power and withdraw to the interstices of the state, leaving state power to the Republicans and start a campaign of anarchic resistance to it? And what would Critchley do if he were facing an adversary like Hitler? Surely in such a case one should ‘mimic and mirror the archic violent sovereignty’ one opposes? Shouldn’t the Left draw a distinction between the circumstances in which one would resort to violence in confronting the state, and those in which all one can and should do is use ‘mocking satire and feather dusters’? The ambiguity of Critchley’s position resides in a strange non sequitur: if the state is here to stay, if it is impossible to abolish it (or capitalism), why retreat from it? Why not act with(in) the state? Why not accept the basic premise of the Third Way? Why limit oneself to a politics which, as Critchley puts it, ‘calls the state into question and calls the established order to account, not in order to do away with the state, desirable though that might well be in some utopian sense, but in order to better it or attenuate its malicious effect’?

These words simply demonstrate that today’s liberal-democratic state and the dream of an ‘infinitely demanding’ anarchic politics exist in a relationship of mutual parasitism: anarchic agents do the ethical thinking, and the state does the work of running and regulating society. Critchley’s anarchic ethico-political agent acts like a superego, comfortably bombarding the state with demands; and the more the state tries to satisfy these demands, the more guilty it is seen to be. In compliance with this logic, the anarchic agents focus their protest not on open dictatorships, but on the hypocrisy of liberal democracies, who are accused of betraying their own professed principles.

The big demonstrations in London and Washington against the US attack on Iraq a few years ago offer an exemplary case of this strange symbiotic relationship between power and resistance. Their paradoxical outcome was that both sides were satisfied. The protesters saved their beautiful souls: they made it clear that they don’t agree with the government’s policy on Iraq. Those in power calmly accepted it, even profited from it: not only did the protests in no way prevent the already-made decision to attack Iraq; they also served to legitimise it. Thus George Bush’s reaction to mass demonstrations protesting his visit to London, in effect: ‘You see, this is what we are fighting for, so that what people are doing here – protesting against their government policy – will be possible also in Iraq!’

It is striking that the course on which Hugo Chávez has embarked since 2006 is the exact opposite of the one chosen by the postmodern Left: far from resisting state power, he grabbed it (first by an attempted coup, then democratically), ruthlessly using the Venezuelan state apparatuses to promote his goals. Furthermore, he is militarising the barrios, and organising the training of armed units there. And, the ultimate scare: now that he is feeling the economic effects of capital’s ‘resistance’ to his rule (temporary shortages of some goods in the state-subsidised supermarkets), he has announced plans to consolidate the 24 parties that support him into a single party. Even some of his allies are sceptical about this move: will it come at the expense of the popular movements that have given the Venezuelan revolution its élan? However, this choice, though risky, should be fully endorsed: the task is to make the new party function not as a typical state socialist (or Peronist) party, but as a vehicle for the mobilisation of new forms of politics (like the grass roots slum committees). What should we say to someone like Chávez? ‘No, do not grab state power, just withdraw, leave the state and the current situation in place’? Chávez is often dismissed as a clown – but wouldn’t such a withdrawal just reduce him to a version of Subcomandante Marcos, whom many Mexican leftists now refer to as ‘Subcomediante Marcos’? Today, it is the great capitalists – Bill Gates, corporate polluters, fox hunters – who ‘resist’ the state.

The lesson here is that the truly subversive thing is not to insist on ‘infinite’ demands we know those in power cannot fulfil. Since they know that we know it, such an ‘infinitely demanding’ attitude presents no problem for those in power: ‘So wonderful that, with your critical demands, you remind us what kind of world we would all like to live in. Unfortunately, we live in the real world, where we have to make do with what is possible.’ The thing to do is, on the contrary, to bombard those in power with strategically well-selected, precise, finite demands, which can’t be met with the same excuse.

Pentagon Wants $450 Billion Increase Over Next Five Years

Pentagon officials have prepared a new estimate for defense spending that is $450 billion more over the next five years than previously announced figures.

The new estimate, which the Pentagon plans to release shortly before President Bush leaves office, would serve as a marker for the new president and is meant to place pressure on him to either drastically increase the size of the defense budget or defend any reluctance to do so, according to several former senior budget officials who are close to the discussions.

Experts note that releasing such documents in the twilight of an administration is a well-worn tactic, and that incoming presidents often disregard such guidance in order to pursue their own priorities.

And with the nation’s economy caught up in a global financial meltdown, it remains unclear whether either Sen. John McCain , R-Ariz., Sen. Barack Obama , D-Ill., or a Democratic Congress would support such large increases for defense next year.

“This is a political document,” said one former senior budget official, who spoke on the condition of anonymity. “It sets up the new administration immediately to have to make a decision of how to deal with the perception that they are either cutting defense or adding to it.”

Dov Zakheim, the Pentagon’s top budget official from 2001 to 2004, who is not involved in the current discussions, agreed.

“The thinking behind it is pretty straightforward,” Zakheim said. “They are setting a baseline for a new administration that then will have to defend cutting it.”

The fiscal 2010 portion of the estimate includes a $57 billion increase, out of which $30 billion would go for a vaguely defined contingency fund and $14 billion would go for replacing or fixing existing equipment, called reset, and modernization, the former officials said.

They added that those items reflect the Pentagon’s attempt to anticipate the end of huge supplemental war allotments that have hidden the costs of resetting and modernizing the nation’s war-torn force. Both presidential candidates have pledged to scale back supplemental war spending.

The Pentagon comptroller’s office refused repeated requests for comment on the figures outlined by the former officials stating that it was premature to discuss future budgets because they were still being worked on.
Earlier Budgets Insufficient

The new budget numbers reflect the Defense Department’s acknowledgement that the coming bow wave of ever-rising procurement costs, combined with the nonstop growth of defense entitlement spending, will render its already record- high budgets grossly insufficient in the years ahead.

But the numbers also seem to condradict the National Defense Strategy released recently by Defense Secretary Robert M. Gates , which called for tough tradeoffs in spending in an environment of limited resources.

“We cannot do everything, or function equally well across the spectrum of conflict. Ultimately we must make choices,” Gates wrote.

The new estimate, which has not been publicly released, would raise the fiscal 2010 budget number announced by the administration this year from $527 billion to $584 billion, not counting operations costs for the ongoing wars.

Money to prosecute the ongoing wars is not included in the new estimate, meaning the military would still need significant supplemental appropriations in addition to the increased budget request.

Supplemental appropriations have been used to fund procurement and personnel costs that are predictable and therefore should be placed into the regular budget, said Admiral Michael Mullen, the chairman of the Joint Chiefs of Staff.

“We’re going to have to figure out how to get off supplementals,” Mullen told a group of Washington reporters Thursday. “My strategic approach is to start to implant those things that are in supplementals that we think we’ve got to have into the baseline budget. We need to start doing that. We’re working our way through the next budget now.”

While reset and modernization funds in the new estimate are relatively non-controversial, the $30 billion contingency fund could face stiff opposition on Capitol Hill. That money, if approved, would be available to rapidly deploy active duty forces overseas in the event of an unexpected crisis.

In 2001 and 2002, lawmakers rejected attempts by Pentagon leaders to secure a contingency fund, from which they could draw money without requesting additional permission from Congress.

“The Congress always saw this from their perspective as a slush fund,” said Zakheim, “Whereas the defense department has said it needed this kind of money because it could never project what exactly would be needed in the event of an emergency.”
Presidential Candidates Differ

The candidates differ on whether or not large increases in overall defense budgets are wise or even doable.

McCain has promised to freeze all discretionary spending except for national security, and is pushing for an additional 150,000 troops above current plans, to be paid for within the base budget.

Obama only supports the current planned increase of 92,000 Army and Marine Corps personnel.

Both candidates have called for a wholesale reform of the Pentagon’s acquisitions system in an effort to control procurement costs, which have ballooned in recent years due to mismanagement.

“The practical fact is that these programs can’t all go into production without a very significant increase in the resources for defense, and I don’t think in light of the current fiscal situation that’s going to be possible,” said former Air Force Secretary Whit Peters, who advises Obama.

Supplemental spending bills, which have funded most of the $859 billion appropriated for the Iraq and Afghanistan and global operations to counter terrorism since 2001, are set to be scaled back no matter which candidate wins in November.

“I see the future of supplementals as dramatically reduced to genuinely unanticipated needs, like fluctuations in the price of fuel, not programmatic costs or known spending needs,” said McCain in written responses to questions submitted by CQ. “It’s a bad way to do business, and I will bring it to an end.”

Peters agreed that large supplemental spending packages would end.

“The supplementals have confused things tremendously,” he said, adding that Obama realizes some of the items in the supplementals will have to be folded back into the base budget.
Reasons For Extra Funds Unclear

Exactly how the Pentagon’s new spending estimate will be communicated to Congress or the incoming administration remains unclear.

In April, the White House Office of Management and Budget sent out guidance to all federal agencies that there would be no full budget drill this fall and no formal fiscal 2010 budget submission.

All agencies were directed to project future budgets based on current costs, which OMB will then compile into a budget database. But since OMB won’t go through a formal scrubbing process for the submissions as it has done in previous years, it will be up to the next president to decide what to do with the numbers.

“The 2010 budget will be submitted by the next president, not the current president,” said OMB spokeswoman Corinne Hirsch. “This administration will certainly be sharing its priorities with the incoming administration in a variety of ways, but that will be outside the formal budget process.”

Hirsch said OMB had not received the defense department’s numbers yet, although an OMB memo had said they were due in September.

“What is clear is that these additional funds that the Pentagon wants to include in their budget and their five year plan are way beyond the fiscal guidance that OMB gave the department of defense earlier this year,” one former official explained.

Moreover, the new numbers are not aligned with any long-term strategic or budgetary rationale that might allow OMB or Congress to judge their wisdom or their impact on the nation’s worsening economic situation, the official said.

“The idea that the Pentagon Comptroller’s office wanted these additional funds has been fairly well known,” the former official said. “But there is little out there to give anybody the understanding of why.”

Finanskrisen er reaganismens endeligt af Francis Fukuyama

Reagans og Thatchers version af kapitalismen er brudt sammen. Troen på, at skattelettelser er selvfinansierende og finansmarkedet selvregulerende, er død. Resultatet er en krise, der rækker langt ud over, hvem der vinder præsidentvalget i næste måned, skriver Francis Fukuyama, der i sin tid skrev liberalisme-biblen 'Historiens afslutning'

Amerikas velrenommerede investeringsbanker går konkurs. Over en billion dollars i aktiemarkedsværdier forsvinder på et enkelt døgn. De amerikanske skatteydere får udskrevet en regning på 700 milliarder dollars. Dimensionerne af 2008-krakket på Wall Street kunne næppe være mere overvældende. Nu spørger mange amerikanere, hvorfor de må betale så svimlende summer for at hindre økonomien i at bryde sammen. Kun få er imidlertid begyndt at diskutere de mere uhåndgribelige, men for USA potentielt langt større omkostninger - nemlig hvor stor skade den finansielle nedsmeltning har gjort på Amerika som varemærke.

Ideer hører til Amerikas vigtigste eksportartikler. Og lige siden Ronald Reagan blev valgt til præsident, er der især to fundamentalt amerikanske idéer, som har domineret den globale tænkning. Den første var en bestemt opfattelse af kapitalismen, ifølge hvilken lave skatter, svag regulering og en slanket statsmagt ville være drivkræfter for økonomisk vækst. Reaganismen brød og vendte en århundrede lang tendens i retning af stadig stærkere og stedse mere omfattende statsmagt. Deregulering blev tidens slagord - ikke blot i USA men i hele verden.

Den anden store idé var ideen om Amerika som en global forkæmper for udbredelse af det liberale demokrati, som blev anset for at være den bedste vej til en mere velstående og åben international orden. USA's magt og indflydelse hvilede ikke kun på militær supermagtsstyrke og dollars, men på det faktum, at de fleste mennesker følte sig tiltrukket af den amerikanske form for selvforvaltning og ønskede at omforme deres samfund i samme retning - en faktor, som politologen Joseph Nye betegner som 'blød magt'.
Et afgørende valg

Det kan være svært at se i øjnene, hvor slemt disse signatur-træk ved Amerikas særlige varemærke nu er bragt i miskredit. Mellem 2002 og 2007, mens verden endnu nød godt af en enestående periode med vækst, var det ingen sag at ignorere de europæiske socialister og latinamerikanske populister, når de stemplede den amerikanske økonomiske model som 'cowboy-kapitalisme'. Men nu er lokomotivet for denne vækst - den amerikanske økonomi - kørt af sporet og truer med at trække resten af verden med sig. Og hvad værre er: Synderen er ingen anden end den amerikanske model selv. Under mantraet 'mindre stat' afstod Washington fra at foretage den adækvate regulering af Amerikas finansielle sektor og gjorde det dermed muligt for denne at forvolde enorm skade på resten af samfundet.

Allerede før krakket var demokratiet kompromitteret. Da Saddam viste sig ikke at besidde masseødelæggelsesvåben, forsøgte Bush-regeringen at retfærdiggøre sin Irak-krig ved at knytte den til en bredere dagsorden om at 'udbrede frihed'. Pludselig var fremme af demokrati det vigtigste våben i krigen mod terror. Men for mange mennesker verden over lød USA's retorik om demokrati snarere som et påskud for at udbrede USA's herredømme.

Det afgørende valg, Amerika nu står over for, rækker langt ud over, hvilken økonomisk hjælpepakke, der vil virke bedst, eller hvem der vinder præsidentvalget. Det amerikanske varemærke sættes nu på en hård prøve på et tidspunkt, hvor andre modeller - det være sig den kinesiske eller den russiske - opleves som stadigt mere attraktive. Genoprettelsen af vort gode navn og genoplivelsen af vores varemærkes dragende magt er på mange måder en lige så stor udfordring som at stabilisere den finansielle sektor. Barack Obama og John McCain kommer med hver deres potentiale til at løfte til opgaven. Men uanset hvem af dem, der vinder, vil der forestå en årelang kamp op ad bakke. Og vi kan ikke tage fat på denne kamp, før vi klart har indset, hvad der gik galt, hvilke aspekter af den amerikanske model, der er bevaringsværdige, hvilke der skal forbedres, og hvilke der skal kasseres helt.
Reaganismens impuls

Mange kommentatorer har bemærket, at nedsmeltningen på Wall Street markerer afslutningen på Reagan-æraen. Det er utvivlsomt en korrekt konstatering - også selv hvis det skulle lykkes at få McCain valgt til præsident i november. Store ideer kommer til verden inden for rammerne af særlige historiske epoker. Og kun de færreste store ideer overlever, når konteksten ændrer sig dramatisk, hvilket er grunden til, at de politiske paradigmer er tilbøjelige til at skifte fra venstre til højre og tilbage igen i cykliske forløb, der kan strække sig over generationer.

Reaganismen - eller dens britiske variant, thatcherismen - var den nødvendige impuls for sin tid. Siden Franklin Roosevelts New Deal i 1930'erne havde statsmagten kun vokset sig større i nationer verden over. 1970'ernes store velfærdsstater og økonomier var ved at blive kvalt af bureaukrati. De fungerede håbløst. Dengang var telefoner dyre og vanskelige at anskaffe, flyrejser var en luksus for de rige, og de fleste mennesker satte deres opsparing ind på bankkonti med lave, regulerede rentesatser. Gavmilde velfærdsprogrammer, der skulle støtte eneforsørgere, gjorde det lidet attraktivt for fattige familier at arbejde og forblive gift, og mange familier gik i opløsning. Reagans og Thatchers revolutioner gjorde det lettere at ansætte og fyre arbejdere, hvad der ganske vist gav voldsomt smertelige gnidninger, efterhånden som traditionelle industrier måtte indskrænke eller lukke ned. Men de lagde også grunden til næsten tre årtier med vækst og fremkomsten af helt nye sektorer som informations-og biotek-branchen.

Sin internationale platform fik Reagan-revolutionen med det såkaldte Washington Consensus, ifølge hvilket Washington - og de institutioner, der står under dets indflydelse som Den Internationale Valutafond og Verdensbanken - skulle anspore udviklingslandene til at åbne deres økonomier. Men skønt Washington Consensus rutinemæssigt bliver hånligt forkastet af populister som Venezuelas Hugo Chávez, formåede denne politik i nogen grad at lette de smertelige følger af den latinamerikanske gældskrise i begyndelsen af 1980'erne, da hyperinflation plagede lande som Argentina og Brasilien. Lignende markedsvenlige politikker er også en del af forklaringen på, at Kina og Indien har udviklet sig til de økonomiske kraftcentre, de er i dag.

Hvis nogen skulle savne yderligere belæg, behøver de blot kaste et blik på verdens mest ekstreme eksempler på statsstyrede, centraldirigerede økonomier - nemlig dem, man havde opbygget i det tidligere Sovjetunionen og de øvrige kommunistiske stater. I 1970'erne var disse i næsten alle henseender sakket agterud for deres kapitalistiske rivaler. Deres totale sammenbrud efter Berlinmurens fald leverede beviset på, at sådanne velfærdsstater på steroider var en historisk blindgyde.

Som så mange andre samfundsforandrende bevægelser kørte Reagan-revolutionen af sporet, fordi den for mange tilhængere blev til en uangribelig ideologi frem for en pragmatisk reaktion på velfærdsstatens excesser. To principper var hævet over enhver tvivl: Skattelettelser blev regnet for selvfinansierende, og de finansielle markeder blev regnet for selvregulerende.
Globaliseringen skjulte fejlene

Før 1980'erne var konservative regeringer skattepolitisk tilbageholdende, forstået på den måde, at de var uvillige til at bruge flere penge, end skatterne indbragte. Men med Reaganomics vandt den tanke, at stort set alle skattelettelser ville stimulere vækst, så regeringen i sidste ende ville få større indtægter. Men faktisk var den traditionelle opfattelse den korrekte: Sænker man skatterne uden at beskære udgifterne, bliver resultatet underskud. Reagans skattenedsættelser i 1980'erne skabte da også et stort underskud, mens Clinton skattestigninger i 1990'erne frembragte et overskud. Bushs skattelettelser i begyndelsen af det 21. århundrede medførte et endnu større underskud. Den omstændighed, at den amerikanske økonomi voksede lige så hurtigt i Clinton-årene som under Reagan, formåede af en eller anden grund ikke at ryste den faste konservative tro på skattelettelser som den sikre vej til vækst.

Mere væsentligt var det, at globaliseringen i årtier skjulte fejlene i det neoliberale ræsonnement. I udlandet var man tilsyneladende uendeligt villige til at beholde de amerikanske dollars, som gjorde det muligt for USA's regering at køre med underskud og samtidig fastholde en høj vækst - noget, intet udviklingsland ville kunne slippe afsted med. Og derfor skal vicepræsident Dick Cheney allerede fra begyndelsen have beroliget præsident Bush med, at læren af 1980'erne var, at "underskud spiller ingen rolle".

Den anden trosartikel fra Reagan-æraen - den om finansiel deregulering - blev drevet frem som gældende politik af en uhellig alliance mellem sande troende og Wall Street-virksomheder og blev i 1990'erne sågar også accepteret af demokraterne som sandhedens evangelium. Dens fortalere hævdede, at gamle faste reguleringslove som Glas-Steagall-loven fra depressionstiden (som satte skel mellem banker og investeringsbanker) stod i vejen for innovation og undergravede konkurrenceevnen i Amerikas finansielle institutioner. Det var helt rigtigt set. Der var bare det ved det, at dereguleringen fremkaldte en strøm af nye innovative produkter som f.eks. de investeringspakker med subprime-lån, som udgør kernen i den nuværende krise. Nogle republikanere har stadig ikke forstået sammenhængen, hvilket fremgår af deres alternative forslag til en hjælpepakke, som involverer endnu større skattelettelser for hedgefonde.

Problemet er, at Wall Street fungerer meget anderledes end f.eks. Silicon Valley, hvor en svag regulering er så abs0lut er formålstjenlig. Finansielle institutioner bygger på tillid, som kun kan trives, hvis statsmagten sikrer deres gennemsigtighed og sætter grænser for de chancer, som de kan tage med andre folks penge. Sektoren adskiller sig også derved, at et sammenbrud i et pengeinstitut ikke blot skader aktionærer og ansatte, men tillige en mængde uskyldige udenforstående (som i økonomernes lidenskabsløse fagsprog betegnes som 'negative eksternaliteter').
10 års advarsler

Der har i det seneste årti været klare tegn på, at Reagan-revolutionen var slået ind på et farligt vildspor. Et tidligt varsel var Asiens finanskrise i 1997-98. Efter amerikansk rådgivning og pres havde lande som Thailand og Sydkorea i begyndelsen af 1990'erne liberaliseret deres kapitalmarkeder. En masse 'varme penge' begyndte strømme til disse økonomier, hvorved de skabte en spekulativ boble og derpå skyndte sig at trække sig tilbage igen, da de første tegn på problemer meldte sig. Lyder det som noget, vi kender? Derimod kunne lande som Kina og Malaysia, som ikke fulgte de amerikanske råd, men holdt deres finansielle markeder lukkede eller strengt regulerede, konstatere, at deres position var langt mindre sårbar.

Et andet advarselssignal var det strukturelle underskud, som Amerika begyndte at ophobe. Kina og en række andre lande begyndte efter 1997 at opkøbe amerikanske dollar som led i en bevidst strategi for at undervurdere deres valuta, holde hjulene i gang på deres fabrikker og beskytte sig mod finansielle chok. Efter 11. september passede dette Amerika fint, for det betød, at vi kunne sænke skatterne, finansiere en forbrugsfest, betale for to dyre krige og køre videre med et budgetunderskud på samme tid. De kolossale og stigende handelsunderskud, som dette resulterede i - 700 milliarder dollar om året i 2007 - var åbenlyst uholdbare, og det stod klart, at før eller senere ville man i udlandet beslutte sig for, at Amerika nok alligevel ikke var så godt et sted at anbringe sine penge. Den faldende amerikanske dollar indikerer, at vi nu har nået dette punkt. Det turde nu være indlysende, at underskud - i modsætning til hvad Cheney hævdede - i høj grad spiller en rolle.

Selv på hjemmefronten var dereguleringernes bagside åbenlys, længe før sammenbruddet på Wall Street. I Californien kom elpriserne helt ud af kontrol i 2000-2001 på grund af dereguleringen på det statslige marked for energi, som skruppelløse selskaber som Enron forstod at spille på til egen fordel. Enron selv og en lang række andre virksomheder gik i 2004 konkurs efter fusk med regnskaberne. Og i USA steg uligheden i det forgangne årti, fordi gevinsterne fra den økonomiske vækst i uforholdsmæssig grad kom til rigere og bedre uddannede amerikanere til gode, hvorimod indkomsterne for arbejderklassen stagnerede. Til sidst kom så også den forkludrede besættelse af Irak og den lige så forkludrede reaktion på orkanen Katrina, der eksponerede den offentlige sektors svaghed oppefra og ned - et resultat af årtiers underfinansiering og den lave prestige, som offentligt ansatte måtte lide under fra Reagans tid og frem.
Skelsættende

Alt dette kunne unægtelig tyde på, at Reagans æra burde have været afsluttet for et godt stykke tid siden. Men det gjorde den ikke, dels fordi Det Demokratiske Parti ikke forstod at stille med overbevisende kandidater og argumenter, men også på grund af et særligt aspekt ved Amerika, der stiller vort land meget anderledes end Europa. I de europæiske lande stemmer de mindre veluddannede borgere af arbejderklassebaggrund konsekvent på socialistiske, kommunistiske og andre venstreorienterede partier, ud fra den forventning at dermed er deres økonomiske interesser bedst tjent. Men i USA kan de tilsvarende samfundslag svinge enten til venstre eller højre. De bakkede op om Roosevelts stordemokratiske koalition under New Deal - en koalition, som holdt helt frem til Lyndon Johnsons Great Society-velfærdspolitik i 1960'erne. Men de begyndte at stemme republikansk under Nixon og Reagan, gik over til Clinton i 1990'erne og vendte så atter tilbage til den republikanske fold under George W. Bush. Når så mange fra disse lag stemmer republikansk, skyldes det, at kulturelle spørgsmål som religion, patriotisme, familieværdier og retten til at eje skydevåben kan overtrumfe de økonomiske temaer.

Denne gruppe vælgere kommer til at afgøre valget i november, ikke mindst på grund af deres talstærke tilstedeværelse i en håndfuld svingstater som Ohio og Pennsylvania. Vil de svinge i retning af den noget reserverede Harvard-uddannede Obama, hvis politiske dagsorden i højere grad afspejler deres økonomiske interesser? Eller vil de holde sig til mennesker, de bedre kan identificere sig med som John McCain og Sarah Palin? Der skulle i sin tid den økonomisk krise af enorme dimensioner fra 1929 til 1931 til for at bringe en demokratisk regering til magten. Meningsmålingerne i begyndelsen af oktober 2008 kunne tyde på, at vi har nået til lignende skelsættende punkt.
Demokrati som brand

Den anden afgørende komponent i det amerikanske varemærke er demokratiet og De Forenede Staters erklærede vilje at støtte andre demokratier i verden. Denne idealistiske ledetråd i USA's udenrigspolitik har været konstant igennem forrige århundrede, fra Woodrow Wilson's Folkeforbund over Roosevelts Four Freedoms til Reagans opfordring til Mikhail Gorbatjov om at "nedrive denne mur".

At fremme demokratiets udbredelse - gennem diplomati, støtte til grupper i civilsamfundet, frie medier og lignende, har aldrig været kontroversielt. Men nu er problemet, at da Bush-regeringen brugte 'demokratiet' til at retfærdiggøre Irak-krigen, blev dette af mange opfattet som et kodeord for militær intervention og regimeskift - det kaos, der udløstes i Irak, gjorde ikke ligefrem demokratiets sag en tjeneste. Navnlig Mellemøsten er et minefelt for enhver amerikansk regering, i og med at USA støtter ikkedemokratiske allierede som Saudi-Arabien, men afviser samarbejde med grupper som Hamas og Hizbollah, der kom til magten gennem valg eller bygger deres indflydelse på stor folkelig tilslutning. Vi har ikke megen troværdighed i USA, når vi forfægter en 'frihed-dagsorden'.

Den amerikanske model er også blevet alvorligt plettet af Bush-administrationens brug af tortur. Efter 11. september viste amerikanerne sig i foruroligende grad at være rede til at ofre den forfatningsmæssige beskyttelse af hensyn til sikkerheden. Og siden har Guantánamo Bay og de hætteklædter fanger fra Abu Ghraib i mange ikke-amerikaneres øjne erstattet Frihedsgudinden som symbol på Amerika.
Tabte positioner

Uanset hvem der vinder præsidentvalget om tre uger, vil skiftet til et nyt paradigme i amerikansk og international politik allerede være sat i gang. Demokraterne vil sandsynligvis kunne øge deres flertal i Parlamentet og Senatet. En enorm populistisk vrede er under opsejling, efterhånden som Wall Streets nedsmeltning forplanter sig til Main Street. Allerede nu er der en voksende enighed om behovet for at re-regulere store dele af økonomien.

Globalt vil USA ikke længere kunne nyde godt af den dominerende position, som det har indtaget indtil nu, hvilket understreges af Ruslands invasion af Georgien. Amerikas evne til at forme den globale økonomi gennem handelsaftaler, IMF og Verdensbanken vil også blive mindsket. Det samme vil vore finansielle ressourcer. Og i mange dele af verden vil amerikanske rådgivning, ideer og tilmed bistand være mindre velkommen end nu.

Hvilken kandidat vil under disse omstændigheder være i den bedste position til at give Amerikas et nyt og bedre ry?

Barack Obama er åbenlyst mindst belastet af den førte politik og den nylige fortid, og hans forsonlige og bredt appellerende stil forsøger at bevæge sig ud over dagens politiske fronter. I hjertet synes han snarere at være pragmatiker end ideolog. Men hans evne til at skabe konsensus vil blive sat på en hård prøve, når han skal træffe svære valg for bringe ikke kun republikanere, men også oprørske demokrater ind i folden.

John McCain har på sin side ført sig frem i de seneste uger som en moderne Teddy Roosevelt, tordnet imod Wall Street og forlangt at få udleveret chefen for New Yorks Børs, Chris Coxs hoved på et fad. Han kan meget vel være den eneste republikaner, der - under megen skrigen og sparken - vil kunne bringe sit parti ind i en post-Reagan æra. Men man får let det indtryk, at han i sit hoved ikke helt har besluttet sig for, hvilken slags republikaner han helst vil være, eller hvilke principper der skal definere det nye Amerika.
Ud af spændetrøjen

Amerikansk indflydelse kan og vil blive genoprettet. Da verden som helhed må forventes at blive ramt af et økonomisk tilbageslag, forekommer det ikke indlysende, at den kinesiske eller russiske model vil klare sig mærkbart bedre end den amerikanske version. USA er tidligere kommet sig efter de alvorlige tilbageslag i 1930'erne og 1970'erne, takket være vort systems tilpasningsdygtighed og modstandskraften i vor befolkning.

Ikke desto mindre vil endnu et comeback forudsætte, at vi har evnen til at gennemføre grundlæggende ændringer. For det første må vi bryde fri af Reagan-æraens spændetrøje i forhold til skatter og regulering. Nok vækker skattenedsættelser behag, men de stimulerer ikke nødvendigvis væksten eller betaler for sig selv. I lyset af vor finanspolitiske situation er det helt nødvendigt, at nogen ærligt og redeligt fortæller amerikanerne, at de fremover selv kommer til at betale mere for at få vort samfund på ret køl igen. Flere dereguleringer eller flere myndighedssvigt i forhold til at følge med markeder, der udvikler sig hastigt, kan blive utrolig kostbare, som vi har set. Hele den amerikanske offentlige sektor er underfinansieret, afprofessionaliseret og demoraliseret. Der er brug for at genopbygge den og indgive den en ny følelse af stolthed. Der findes visse opgaver, som kun statsmagten kan varetage at løse.

Når vi gennemfører disse ændringer, vil der naturligvis være en vis risiko for, at den statslige indblanding bliver for stor. Finansielle institutioner har brug for et stærkt tilsyn, men det står ikke klart, at dette også skulle gælde andre sektorer af økonomien. Frihandel er fortsat en stærk drivkraft for økonomisk vækst og vil forblive et instrument for USA's diplomati. Vi bør give bedre bistand til, at arbejdstagere kan tilpasse sig de skiftende globale vilkår frem for at forsvare deres nuværende job. Nok fører skattelettelser ikke automatisk til større velstand, men det gør en uhæmmet vækst i de offentlige udgifter heller ikke. Omkostningerne ved hjælpepakkerne og den langsigtede svage dollar betyder, at inflation vil være en alvorlig trussel i fremtiden. En uansvarlig finanspolitik kan nemt forværre problemerne.

Og selv om færre ikke-amerikanere formentlig vil ønske at lytte til vore råd, vil mange stadig kunne drage fordele af at efterligne visse aspekter af Reagan-modellen. Dette gælder dog helt sikkert ikke i forhold til deregulering af finansmarkederne. Men i det kontinentale Europa får arbejdstagere stadig tilbudt lange ferier, korte arbejdsuger, jobgarantier og en lang række andre fordele, som svækker deres produktivitet og ikke er økonomisk bæredygtige.
En vanskelig ny virkelighed

Det lidet opbyggelige svar på Wall Street-krisen må være, at den største forandring, vi må gennemføre, er af politisk art. Reagan-revolutionen brød de liberales og demokraternes 50 år lange dominans i amerikansk politik og åbnede op for nye tilgange til tidens problemer. Men som årene er gået, er det, som engang var banebrydende nye tanker, degenereret til stivnede dogmer. Den politiske debats kvalitet er blevet forringet af en polariserende diskurs, hvor ensidige politikere ikke blot drager deres modstanderes ideer i tvivl, men også deres motiver. Alt dette gør det sværere for os at tilpasse USA til den nye og vanskelige virkelighed, vi står overfor. Så den ultimative duelighedsprøve for den amerikanske model vil være dens evne til at genopfinde sig selv forfra. God branding er, for nu at citere en præsidentkandidat, ikke et spørgsmål om at smøre læbestift på en gris. Det handler om at have det rigtige produkt at sælge i første instans. Dette er en opgave, som Amerikas demokrati nu har fået skåret ud i pap.

Francis Fukuyama er professor i international politisk økonomi på John Hopkins School of Advanced International Studies.

This Just In: Greed Is Not Good by David Michael Green

by David Michael Green

So, um, prolly you've heard by now that we're having this little problem with the economy, eh?

Yeah, as a matter of fact, it's starting to look like more than just a little problem. It's starting to look like 1932 again. And, who knows beyond that? What is there to say that 1932 is the baseline? Just because the Great Depression is the worst scenario we've yet to experience, that sure doesn't mean that it is the worst we could experience. With astonishing amounts of governmental and personal debt sloshing around the world in a hugely globalized economy, who's to say that we aren't now headed for the Even Greater Depression?

Oh, and, let's also not forget that even that isn't necessarily the end of it. Last time the global economy imploded this bad, it got one helluva lot worse before it got better. The only thing that could ever have made the 1930s look good was the 1940s. There's no reason to necessarily believe that that part can't happen again as well. If we're stupid enough to repeat the mistakes of the Gilded Age, surely belligerent, nationalist, chauvinist Americans (and Chinese, and Frenchmen, and Russians) are also stupid enough to launch another world war or two in order to chase down scarce resources like oil or gold. Or food. Or water.

Leaving aside for the moment any threats of world war, the only good news I see in our current economic crisis s that at least we're eighty years down the road from when Franklin Roosevelt broke the psychological barrier previously preventing brainwashed Americans from owning a government that actually helped them, as opposed to allowing themselves to be owned by a government of oligarchs who were helping themselves. This time, if people are hungry because there's no money, and cold because heating oil costs so much, and weathered because they've been tossed out of their homes, and frightened because they've got no job and no healthcare coverage - if we arrive at that state, watch what's left of the psychological barriers crumble like George Bush's job approval ratings or John McCain's lofty principles about running a high-minded campaign. Watch desperate Americans embrace socialism as if they were the lost children of Chairman Mao waking up from a long nightmare of capitalist errancy.

What we're witnessing now is the complete and utter repudiation of Reaganism-Bushism, of course, but it runs even deeper than that. Not just the hyper-kleptocratic version of the American economic system is being left in shreds, but even its more moderate baseline version - the Eisenhower model of nice, gray-suited capitalism - is now also on the chopping block. Even that form of capitalism - quaintly tame by today's standards of astonishing rapaciousness - was never sustainable, and part of what we've been seeing this last decade is all the ruses by which we had greedily squeezed out more than our fair share of the pie now angrily biting back. The wars, the environmental rape, the exploitation of nice little brown people all around the world (and, after all, isn't that why Jesus made them?), the borrowing against our children's future, the tax avoidance free-riding, the credit card economy, the exporting of jobs to explode profits, the gluttony of 300 pound Americans and their SUVs and the giant screens on which they watch ‘reality TV' (a nice euphemism for humiliating degradation) - these are all screaming out to us simultaneously today, in an excruciating cacophonous harmony from Hell, that THIS MUST END NOW.

And, boy, did we ever have it coming. I just want to go on record and say to any historians from the 26th century who might be reading this: "Yes, it does say ‘American' on my birth certificate, but I want you to know I wasn't part of this! I did my best and kept shouting out about our national stupidities. And I always voted for the Green Party!"

Yeah, it's true, I'm afraid. We're going down in history as the stupidist and the shortest-lived of empires (even the Belgians did better than this, plus, they make great beer). And well we should be so considered, too. Do they have Darwin Awards for countries, like they do for individuals, who find uniquely imbecilic (though highly entertaining) ways to remove their DNA from the collective gene pool (you know, like getting really stoned and then playing your electric guitar in the swimming pool)? They should! And who could possibly trump America, we who gluttonously slurp up oil in order to live like global pigs, sending the proceeds to fund terrorists with ideologies from the 13th century and weapons from the 21st to attack us? We who chant "Drill, baby, drill!" when the giant planet-wrecking asteroid of global warming is headed right for us. (Even the real dinosaurs come off looking better than our human imitations of them, since they at least had the excuse of actually having pea-sized brains to explain why they behaved as though they had pea-sized brains.) We whose government's insatiable spending sprees on high priority items, like wars that diminish our national security and corporate welfare for oil companies or giant agri-corporations, we fund by allowing China, our rising rival for global power, to own our debt, and therefore to own us.

And what's that old line about the first time being tragedy and the second folly? The most astonishing thing about the economic nightmare we're now entering is how little we learned from having already gone through this before. We're not even talking about ancient or foreign history here, people. You don't have to force Americans to go watch some History Channel documentary on Charlemagne to figure this one out. It wasn't that long ago that we went through exactly the same process, ourselves, right here in gool ol' ‘Muricah. Christ, there are people still alive today who experienced it first hand. You'd think, having found out in the 1930s precisely what happens when you let monstrously greedy people who have their hands on the levers of the global economy go on unregulated bacchanals of decadent self-aggrandizement, that we'd want to avoid that sort of thing in the future, eh? Perhaps we'd even vow "Never again", just like we did after the Holocaust. (But then, given the mass murderous Soviet and Chinese purges which came after Auschwitz and Treblinka, along with the genocides of Cambodia, Rwanda and now Darfur (not to mention Vietnam or Iraq), maybe that wouldn't be such a great promise to make...)

And even if the American people couldn't make the connection between present circumstances and past analogues, am I the only knucklehead who finds the whole deregulation mania something of an odd idea just at a conceptual level? How is it that the same people who always jump up and down in passionate support of tough crime laws, loads of jails and busy state killing machines, don't seem to apply the same logic to nice, white-collar crimes? I mean, if you need a law to deter people from committing murder, why don't you need regulations to prevent them from committing greed? And, wouldn't it make a lot of sense to have these laws, especially in places where the capacity exists for such tremendous harm to be done? A murder takes a life and wrecks a couple of families. That's horrible, and should be prevented wherever possible, and punished where not. But would it be too much to ask that we also have laws and punishments and regulations to help prevent white-collar crimes that can wreck an entire global economic system, bringing wholesale grief to hundreds of millions of people, and no doubt producing boatloads of deaths in their wake, all in the name of satiating the greed of already fantastically wealthy people? Indeed, we have the first of these victims on the scoreboard already. This week a Los Angeles man who lost all his money in the stock market shot his wife, three sons and his mother-in-law before then killing himself. Get ready for more of the same, and most of them won't be suicides, I can tell you. They'll be homicides. Murder by greed.

And even if America's so-called justice system can't bring itself to punish Wall Street thieves for serial homicide in this case, would it be too much to ask for a little government regulation to prevent a handful of kleptocrats from crashing an entire global economic order and spreading death, destruction and misery across the planet, just so that they could milk the last remaining pennies from the golden goose, its bloodied carcass lying twisted and prostrate across the trading room floor, nothing but lead spilling out of its slashed belly? Ah, but that would not be capitalism, eh, Mr. Graham? That would be fettering innovation, right, Mr. Greenspan? That would limit Holy Growth, no, Mr. McCain? And we can't have that.

I don't really understand the perverse psychology of people like these Wall Street masters of the universe, whose desire for additional wealth seems incapable of being satiated. Personally, I don't think I'd know what to do even with the mere pittance of a million bucks, so it's really hard for me to figure it out when I see them feeling so hyper-compelled in pursuit of throwing tens of millions more on top of their existing piles of hundreds of millions. I mean, you can only sail on one yacht at a time, right? You can only live in one mansion at a time, right? You can only sleep with one gorgeous call girl at a time, right? Oh, um, okay - well, never mind that last part. But you catch my drift here, no?

In truth, when I look around this fine country that calls itself my home, I have to conclude that it's actually me who is the anomaly. I'm not sure what genetic quirk or what massive failure of the educational machine produced a freak like me, but - apart from not wanting to go into debt, and from owning a handful of very modest toys like a computer or guitar - I really don't give a shit about money. Go figure, eh? You know, my car, bought used, is ten years old. I think. I don't really remember for sure what model year it is, though I'm pretty sure I could tell you how many cylinders it has if I stopped to ponder the question long enough. This strange absence of an unending greed for Money! and Things! seems to leave me way out in the bizarro fringe outcast category within what passes for a culture for those 300 million inhabitants in the middle of the North American continent. Just ‘cause I don't constantly seek cash, or measure myself by the size of my wallet, I'm like six standard deviations from the norm in the disaster affectionately known as America.

And just how disastrous is our national disaster? Leave it to Sarah "The Embarrassment" Palin to answer best. She illustrated the other night in her ‘debate' with Joe Biden how deep the country has sunk these last decades into the miasma of a culture of petty selfishness, and an ethos of pathetic greed. She reminded us that in Middle America, where she and "Todd" (hey, you scary monster, I am not on a first-name basis with your First Dude husband, and I don't ever want to be) purport to live, paying taxes is not patriotic. Biden's response should have been to ask whether all the Americans who've paid all the billions in tax increases in every war America has ever fought prior to this one were unpatriotic, or just suckers. He should have asked who she expected would pay for the body armor to protect her son in Iraq (as if they're gonna let that kid anywhere near any real danger), for our roads, our schools, our post offices, our Army and Navy, our Social Security benefits or our police officers. For that matter, he might also have asked who would pay for Air Force One, who would pay for the tens of millions of public campaign funds now being spent by the McCain-Palin campaign, or who would pay for the army of bank regulators we'll need to clean up the economic mess her ideological soul-mates have left us.

Still, I can't help thinking that millions of Americans sat at home watching this, enthusiastically nodding their head in support of her lunacy. Let's face it, after a generation or two of Reaganism-Bushism permeating the culture, no politician can even talk about raising taxes in America anymore without risking career suicide. It has become the new third rail of American politics. And that says so much about us. Because, not only do we want all the benefits of government, but polling data clearly shows that we actually even want the government to do a lot more than it is already doing. And yet, at the same time, selfish, narcissistic Americans have been well trained now by pandering right-wing politicians to expect it all for free. Cutting taxes without simultaneously cutting expenditures (let alone while massively increasing expenditures) is one of the single most recklessly irresponsible acts a government can undertake. Since the only solution to the deficits that must ensue from this simple math is to borrow the difference, the polity in question is simply taking its desire to live large and handing it off in the form of a problem for someone else to deal with, on top of their own problems. Plus interest on the loans, of course. And who is that someone? Faraway foreigners? Some despised underclass? The millions we've incarcerated as criminals, perhaps? Not at all. The crime runs even deeper than that. It's our own children who are getting the bill.

Which is precisely what we've been doing. I saw Californian voters, when I lived there, launch the modern taxpayer revolt movement by passing the infamous Proposition 13, which took a meat-cleaver to property taxes in the state. Never mind that the effect would be the same on California's schools, which are largely funded by property taxes. They went from being the best in the country to nowadays hanging around with Mississippi, down at the bottom of the list. But who fucking cares, anyhow? People got their bloody tax cuts, and they got to buy that nice, shiny new car they wanted with the money. So what about the kids?

And so it has gone these last decades, tax cut after tax cut in America, which really means tax transfer after tax transfer. And now we have a ten trillion dollar debt we are passing along. So that means that the next generation will have to pay enough in taxes to run the government then, plus the share that the current generation didn't really feel like paying to run the government today, plus interest on that borrowed amount. What does that mean, up close and personal? If, right this very moment, we somehow stopped adding to that pile more debt and more interest every day, and just handed out the bill for what is currently owed, it would average out to $67,000 for each and every taxpayer.

I know what you're thinking. That sucks, eh? Well, at least the good news is what you got for it. For instance, a really expensive war in Iraq that diminished American national security. And the chance for really, really rich people to become really, really, really rich people through humongous tax breaks. How about a GOP pork-barrel spending spree - including the Bridge to Nowhere - of unprecedented size in American history? Huge oil and agricultural company subsidies? A giant prescription drug bill which provided corporate socialism for drug and insurance companies? A chance for George W. Bush to frolic in the White House for eight years? I'm sure every American, working some job they're not particularly fond of, won't really mind the extra hours they have to work to pay for all this. Especially since, if you make, say, 15 bucks per hour, that would only translate to 4,467 hours you'd be working to finance your share of this past years' pig-out. Based on a forty-hour work week, that's roughly two-and-a-quarter years worth of your life. When you look at it that way, it doesn't seem so bad, does it? And, again, that's just if we stop deficit spending now, and stop accruing interest now. In fact, we're actually deficit spending about another $400 billion per year, every year, which just gets added to the pile (and lots more, as well, if John McCain is able to slash taxes on the wealthy even further). Moreover - maybe it's just my pessimism kicking in here, but - I don't think the Chinese or our other creditors are going to be much inclined to waive the interest accruals due to them for financing our decadent little party. So, in fact, the above accounting of our national and personal liabilities are actually rather, ahem, conservative. In every way imaginable.

But, of course, America's problem is way deeper than one kleptocratic president or even a generational binge coupled with a three decade long vacation from responsibility, not to mention rationality. We have established a pervasive culture of greed, and that's one angry chicken that has now come home to roost. What's worse, we've lost the capacity as a society to even imagine an alternative ethos to guide us, though the looming economic tsunami may be just the thing - and likely the only thing - big enough to get us thinking once again.

This massive poverty of imagination is what is killing us now, undermining us at the most fundamental levels of societal identity. To grasp the magnitude of our problem, consider how we socialize our citizens and how our culture sets the priority structure of their values and aspirations. Sure, some Americans think it is noble and wonderful to pursue careers which serve the public interest, but most are taught, and simply accept, that one should aspire to making boatloads of money, and that the measure of one's achievement is the size of their bank account and the number of toys parked in the driveways of their McMansions. I am constantly astonished by the quantity of Americans whose expressed goal in life is simply to make lots of money, which I find especially bizarre since they don't seem to have any particular use in mind for all this cash. What this phenomenon has long suggested to me is a country full of sheep so unoriginal in their thinking that they can't even figure out what to aspire to on their own, and a society so bankrupt in its morality that it feeds them the goal of wanton greed to fill that yawning void.

All that's bad enough, but, besides the current economic meltdown and a society populated by moral midgets, there are also other repercussions to this ethical failure and this poverty of imagination. Chief among these is the false choice we are always presented between governance in the public interest, on the one hand, and prosperity, on the other. This bogus diversionary tactic forms the central argument of the economic predators who've been bleeding the country of its wealth (and, in fact, prosperity), as to why we can't have regulation. You know, all that Washington red tape (you can't profit off of pollution, you can't exploit children as factory workers, you have to pay a minimum wage - horrible restrictions like that) will keep innovators from innovating and entrepreneurs from, uh, entrepreneuriating.

And, you know what? They're actually more or less right. They're right if, that is, you accept as a predicate would-be innovators and would-be entrepreneurs who are only motivated by an ethos of personal greed, which has been duly pounded into them through the socialization processes of a society that lost its mind and its moral bearing decades ago. Sure, okay. Under those conditions it's probably true that most people will only work for themselves, and will only be motivated by self-interest. But what if we taught these people something different, right from the get-go when they were toddlers, and reinforced those different values throughout their adult lives? What if we taught the members of this society to value the community's welfare as much as their own? What if we taught them that massive personal wealth was not only not the highest achievement to aspire to, but actually a sort of crass and tacky goal, only to be found amongst the most juvenile and selfish in the society? What if we strongly imprinted the idea among our people that improving the welfare of the country (or, gulp, the world) is an important life aspiration, and that those who do so are considered among our most admired countrymen, rather than those who have acquired the money to purchase bitchin' toys and trophy wives? Is it not possible that our citizens would innovate, and that they would be every bit as motivated as they are today by greed? Maybe even more so?

And, therefore, could we not transcend this false choice of good governance versus prosperity? (Not to mention the fact that whatever prosperity we've experienced of late is not going to the society, anyhow. In the last three decades, while GDP has grown at a handsome clip, the middle class - and, of course, we've long ago now abandoned even talking about those below middle class status, let alone fighting a war on poverty - has not even stood its ground, but rather has actually lost overall purchasing power. That, of course, leaves only one mathematical explanation for what has happened. You guessed it. All that growth in national wealth has gone to the already richest Americans.)

You know, I'm not a subscriber to the prescriptions of communism for constructing the best system of political economy, much as that might come as a shock to any conservative reader of this piece. And I think it's fair to say that the world's experiments in communism to date - to the extent they weren't actually just experiments in totalitarian brownshirtism - failed in large part because they possessed just the opposite flaw as that described above. They attempted to build economic systems on the equally false notion that selfishness can be completely erased from human psychology as a motivating force. It can't. And any system dependant on that proposition for its success will have none. But, by the same token, a system that is built on the premise that people are only motivated by selfish greed, and therefore can only produce prosperity by letting every actor pursue their own self-interest, unfettered by any societal concerns, is an equally disastrous notion.

And such a society is equally bound for the ash heap of history, just as was the Soviet Union or Maoist China.

In fact, I ‘m pretty sure that's just exactly what the cosmos is screaming in our ears, at about 150 decibels worth of volume, right at the moment. The only question is whether we are so deaf we can no longer hear the warning call, even when it's broadcast over a galactic PA system.

But just in case, here it is. Newsflash for America! This just in! Sorry to burst your little bubble, people, but it turns out, after all, that...
Greed is not good.

David Michael Green is a professor of political science at Hofstra University in New York.

What is the relationship between capitalism and the ecological crisis?

What is the relationship between capitalism and the ecological crisis?

Environmental damage has reached alarming proportions. Almost daily there are new upwardly revised estimates of the severity of global warming, ozone destruction, topsoil loss, oxygen depletion from the clearing of rain forests, acid rain, toxic wastes and pesticide residues in food and water, the accelerating extinction rate of natural species, etc., etc. Some scientists now believe that there may be as little as 35 years to act before vital ecosystems are irreparably damaged and massive human die-offs begin [Donella M. Meadows, Dennis L. Meadows, and Jorgen Randers, Beyond the Limits: Confronting Global Collapse, Envisioning a Sustainable Future, Chelsea Green Publishing Company, 1992]. Or, as Kirkpatrick Sale puts it, "the planet is on the road to, perhaps on the verge of, global ecocide" ["Bioregionalism -- A Sense of Place," The Nation 12: 336-339].

Many anarchists see the ecological crisis as rooted in the psychology of domination, which emerged with the rise of patriarchy, slavery, and the first primitive states during the Late Neolithic. Murray Bookchin, one of the pioneers of eco-anarchism (see section E), points out that "[t]he hierarchies, classes, propertied forms, and statist institutions that emerged with social domination were carried over conceptually into humanity's relationship with nature. Nature too became increasingly regarded as a mere resource, an object, a raw material to be exploited as ruthlessly as slaves on a latifundium." [Toward an Ecological Society p. 41]. In his view, without uprooting the psychology of domination, all attempts to stave off ecological catastrophe are likely to be mere palliatives and so doomed to failure.

Bookchin argues that "the conflict between humanity and nature is an extension of the conflict between human and human. Unless the ecology movement encompasses the problem of domination in all its aspects, it will contribute nothing toward eliminating the root causes of the ecological crisis of our time. If the ecology movement stops at mere reformism in pollution and conservation control - at mere 'environmentalism' - without dealing radically with the need for an expanded concept of revolution, it will merely serve as a safety value for the existing system of natural and human exploitation." [Ibid., p. 43]

Since capitalism is the vehicle through which the psychology of domination finds its most ecologically destructive outlet, most eco-anarchists give the highest priority to dismantling capitalism. "Literally, the system in its endless devouring of nature will reduce the entire biosphere to the fragile simplicity of our desert and arctic biomes. We will be reversing the process of organic evolution which has differentiated flora and fauna into increasingly complex forms and relationships, thereby creating a simpler and less stable world of life. The consequences of this appalling regression are predictable enough in the long run -- the biosphere will become so fragile that it will eventually collapse from the standpoint human survival needs and remove the organic preconditions for human life. That this will eventuate from a society based on production for the sake of production is . . .merely a matter of time, although when it will occur is impossible to predict." [Ibid., p. 68]

It's important to stress that capitalism must be eliminated because it cannot reform itself so as to become "environment friendly," contrary to the claims of so-called "green" capitalists. This is because "[c]apitalism not only validates precapitalist notions of the domination of nature, . . . it turns the plunder of nature into society's law of life. To quibble with this kind of system about its values, to try to frighten it with visions about the consequences of growth is to quarrel with its very metabolism. One might more easily persuade a green plant to desist from photosynthesis than to ask the bourgeois economy to desist from capital accumulation." [Ibid., p. 66]

Thus capitalism causes ecological destruction because it is based upon domination (of human over human and so humanity over nature) and continual, endless growth (for without growth, capitalism would die).

D.4.1 Why must capitalist firms "grow or die?"

Industrial production has increased fifty fold since 1950. Obviously such expansion in a finite environment cannot go on indefinitely without disastrous consequences. Yet, as the quotation above suggests, it is impossible in principle for capitalism to kick its addiction to growth. It is important to understand why.

Capitalism is based on production for profit. In order to stay profitable, a firm must be able to produce goods and services cheaply enough to compete with other firms in the same industry. If one firm increases its productivity (as all firms must try to do), it will be able to produce more cheaply, thus undercutting its competition and capturing more market share, until eventually it forces less profitable firms into bankruptcy. Moreover, as companies with higher productivity/profitability expand, they often realise economies of scale (e.g. getting bulk rates on larger quantities of raw materials), thus giving them even more of a competitive advantage over less productive/profitable enterprises. Hence, constantly increasing productivity is essential for survival.

There are two ways to increase productivity, either by increasing the exploitation of workers (e.g. longer hours and/or more intense work for the same amount of pay) or by introducing new technologies that reduce the amount of labour necessary to produce the same product or service. Due to the struggle of workers to prevent increases in the level of their exploitation, new technologies are the main way that productivity is increased under capitalism (though of course capitalists are always looking for ways to increase the exploitation of workers on a given technology by other means as well).

But new technologies are expensive, which means that in order to pay for continuous upgrades, a firm must continually sell more of what it produces, and so must keep expanding its capital (machinery, floor space, workers, etc.). Indeed, to stay in the same place under capitalism is to tempt crisis - thus a firm must always strive for more profits and thus must always expand and invest. In other words, in order to survive, a firm must constantly expand and upgrade its capital and production levels so it can sell enough to keep expanding and upgrading its capital -- i.e. "grow or die," or "production for the sake of production."

Thus it is impossible in principle for capitalism to solve the ecological crisis, because "grow or die" is inherent in its nature:

"To speak of 'limits to growth' under a capitalistic market economy is as meaningless as to speak of limits of warfare under a warrior society. The moral pieties, that are voiced today by many well-meaning environmentalists, are as naive as the moral pieties of multinationals are manipulative. Capitalism can no more be 'persuaded' to limit growth than a human being can be 'persuaded' to stop breathing. Attempts to 'green' capitalism, to make it 'ecological', are doomed by the very nature of the system as a system of endless growth." [Murray Bookchin, Remaking Society, pp. 93-94]

As long as capitalism exists, it will necessarily continue its "endless devouring of nature," until it removes the "organic preconditions for human life." For this reason there can be no compromise with capitalism: We must destroy it before it destroys us. And time is running out.

Capitalists, of course, do not accept this conclusion. Most simply ignore the evidence or view the situation through rose-coloured spectacles, maintaining that ecological problems are not as serious as they seem or that science will find a way to solve them before it's too late. Right libertarians tend to take this approach, but they also argue that a genuinely free market capitalism would provide solutions to the ecological crisis. In section E we will show why these arguments are unsound and why libertarian socialism is our best hope for preventing ecological catastrophe.

Nature loss 'dwarfs bank crisis'

Nature loss 'dwarfs bank crisis'

The global economy is losing more money from the disappearance of forests than through the current banking crisis, according to an EU-commissioned study.

It puts the annual cost of forest loss at between $2 trillion and $5 trillion.

The figure comes from adding the value of the various services that forests perform, such as providing clean water and absorbing carbon dioxide.

The study, headed by a Deutsche Bank economist, parallels the Stern Review into the economics of climate change.

It has been discussed during many sessions here at the World Conservation Congress.

Some conservationists see it as a new way of persuading policymakers to fund nature protection rather than allowing the decline in ecosystems and species, highlighted in the release on Monday of the Red List of Threatened Species, to continue.

Capital losses

Speaking to BBC News on the fringes of the congress, study leader Pavan Sukhdev emphasised that the cost of natural decline dwarfs losses on the financial markets.

"It's not only greater but it's also continuous, it's been happening every year, year after year," he told BBC News.

Teeb will... show the risks we run by not valuing [nature] adequately."
Andrew Mitchell
Global Canopy Programme

"So whereas Wall Street by various calculations has to date lost, within the financial sector, $1-$1.5 trillion, the reality is that at today's rate we are losing natural capital at least between $2-$5 trillion every year."

The review that Mr Sukhdev leads, The Economics of Ecosystems and Biodiversity (Teeb), was initiated by Germany under its recent EU presidency, with the European Commission providing funding.

The first phase concluded in May when the team released its finding that forest decline could be costing about 7% of global GDP. The second phase will expand the scope to other natural systems.

Stern message

Key to understanding his conclusions is that as forests decline, nature stops providing services which it used to provide essentially for free.

So the human economy either has to provide them instead, perhaps through building reservoirs, building facilities to sequester carbon dioxide, or farming foods that were once naturally available.

Or we have to do without them; either way, there is a financial cost.

The Teeb calculations show that the cost falls disproportionately on the poor, because a greater part of their livelihood depends directly on the forest, especially in tropical regions.

The greatest cost to western nations would initially come through losing a natural absorber of the most important greenhouse gas.

Just as the Stern Review brought the economics of climate change into the political arena and helped politicians see the consequences of their policy choices, many in the conservation community believe the Teeb review will lay open the economic consequences of halting or not halting the slide in biodiversity.

"The numbers in the Stern Review enabled politicians to wake up to reality," said Andrew Mitchell, director of the Global Canopy Programme, an organisation concerned with directing financial resources into forest preservation.

"Teeb will do the same for the value of nature, and show the risks we run by not valuing it adequately."

A number of nations, businesses and global organisations are beginning to direct funds into forest conservation, and there are signs of a trade in natural ecosystems developing, analogous to the carbon trade, although it is clearly very early days.

Some have ethical concerns over the valuing of nature purely in terms of the services it provides humanity; but the counter-argument is that decades of trying to halt biodiversity decline by arguing for the intrinsic worth of nature have not worked, so something different must be tried.

Whether Mr Sukhdev's arguments will find political traction in an era of financial constraint is an open question, even though many of the governments that would presumably be called on to fund forest protection are the ones directly or indirectly paying for the review.

But, he said, governments and businesses are getting the point.

"Times have changed. Almost three years ago, even two years ago, their eyes would glaze over.

"Today, when I say this, they listen. In fact I get questions asked - so how do you calculate this, how can we monetize it, what can we do about it, why don't you speak with so and so politician or such and such business."

The aim is to complete the Teeb review by the middle of 2010, the date by which governments are committed under the Convention of Biological Diversity to have begun slowing the rate of biodiversity loss.

Richard.Black-INTERNET@bbc.co.uk

http://news.bbc.co.uk/go/pr/fr/-/2/hi/science/nature/7662565.stm

BBC News: The layman's finance crisis glossary

"The current financial crisis has thrown terminology from the business pages onto the front page of newspapers, with jargon now abounding everywhere from the watercooler to the back of a taxi.

Here is a guide to many of the business terms currently cropping up regularly, as well as some of the more exotic words coined to describe some of the social effects of the credit crunch."

The layman's finance crisis glossary