Ted Auch

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Dropping knowledge bombs

Disparity Rises

There is alot of talk right now about Tea Party Revolution and Socialism via the Obama administration. However, the thing that these people that are not seeing is that most of what is happening is being inflicted on them via both parties in concert with the banks, health care industry, and the Military Industrial Complex (MIC). I used to be very skeptical of the socialist ideologues and remain skeptical of those that invest all their emotional and intellectual capital in one school of thought or religion for that matter. Such philosophies remove the individual’s personal responsibility. They also allow themselves to be easily manipulated through advertising. The fact is that when you look at two long-term sets of data - income disparity and the MIC - you see the true problem AND to those that blame Obama as a fascist or whatever I say a trend does not 9 months or 1 adminstration make. This guy is clearly overwhelmed but based on the data I will present he is facing an inertia whose depth and scope is quite daunting.

As you can see from the figure to the right when plotting the returns on 10 of the largest military industrial contractors it is clear that they are rapidly overtaking this country’s production sector.

mib-vs-dow

What we are seeing is that those firms with a long-term presence on the Dow Jones Industrial Average (DJIA) have done quite well for themselves from the 94,171% increase in share price of General Dynamics since it’s initial offering in January of 1977. The MIC giants Boeing and United Technologies have since their share prices increase by 21,788 and 18,633%, respectively. Interestingly two new players in the MIC industry KBR a spin-off of Dick Cheney’s Halliburton and DynCorp a leading competitor of Blackwater (now called Xe Services LLC) have declined by 105 and 119% since their arrival on the DJIA in 2006. In summary the MIB has on averaged gained 15,448% relative to the 823% increase on the DJIA.

mib-vs-dow_ratio

So, while the economy suffers and jobs are lost at the rate of 250-750,000 per month in the last 2.5 years the MIB is operating at a profit ratio of 15:1 relative to the DJIA. This type of ratio would usually raise red flags, but since these companies are True Patriots their profligacy is viewed as an inevitable result of the War on Terror and the Spread of Democracy. I wonder if these companies are also Too Big To Fail?

The other contention is that Obama is a looking to redistribute wealth at the expense of most Americans. Hand in hand with this argument is the idea that all citizens have access to the American Dream. Well if you look at data from the Census Bureau you will see that redistribution is absolutely happening but it is occurring in the opposite direction. Two correlated trends are quite evident from the data:

1. Every year the Upper 5% of this country increases it’s average income by $2,049, while the income of the lower 2 Quartiles increases by $93-164. This seems unfair yet the common concern amongst those that are benefiting the least is accruing enough wealth to realign themselves with those that benefit the most form the Efficient Capitalist Market. However, those that benefit the most are doing their darndest to insure that they and only they benefit from this increasing disparity.

income-disparity-actual

They are doing this by promoting war in the hopes of keeping this country divided and invoking patriotism as a means to encourage those with nothing to fight for those with everything.

2. The data also demonstrates that the share of this country’s income allocated to the Top 5 Percent has risen from 43% in 1965 to 50% in 2008. If this trend continues this sector of society will account for 60% of this country’s wealth by 2050.

income-disparity-actual1

The SPADE Defense Index

So I just finished an amazing book by Naomi Klein called “The Shock Doctrine”, which basically chronicles the dark side of capitalism via the actions and thinking of folks like Milton Friedman, Friedrich Hayek, Eugene Fama, and Jeffrey Sachs. Anyway the book is revealing and pokes lots of holes in the Efficient Market hypothesis of Fama and Adam Smith’s “Invisible Hand”. Ms. Klein mentions in passing the SPADE Defense Index, which according to www.amex.com

“…is a modified market capitalization weighted index, comprised of publicly traded companies that seeks to measure the performance of securities in the defense, homeland security, and space marketplace.”

For those that deny the existence of the Military Industrial Complex (MIC) described by Dwight D. Eisenhower as he left the oval office I think I can prove empirically that the SPADE Index demonstrates the naivete of such a view (See Figure).

spade-defense-index

Between the end of 1997 and September 10th 2001 the SPADE rose by 107%, but between 9-11 and 9-14-2009 it more than doubled (205%). Overall the SPADE has grown by 233% since it’s origination in December of 1997. So whats so important about these data? Well looking at the Dow Jones Industrial Average (DJIA), S & P 500, and NASDAQ we see that they grew by 103%, 99%, and 90% respectively between December of 1997 and 9-11. These trends are well alligned with what I described for the SPADE during the same time period. Heres the rub these indices only grew by 111%, 103%, and 142%. It is understandable that the NASDAQ would outpace the DJIA and S & P 500 as it was operating from a lower base. We are seeing that this country is relying more on the financial services and war profiteering industry 2 nefarious and wealth concentrating sectors of our economy. I must wonder where the outrage is? We have been conditioned to believe that all of us can have a big piece of the pie when infact the folks that pull the strings of these industries would in no way allow such an event to occur. It would be called wealth redistribution and we know what the neoconservatives and evangelical right-wingers think about such a prospect. The SPADE provides concrete evidence that we are moving towards a society that embraces Frederick the Great’s belief that “Diplomacy without war, is like music without instruments.” For those that think that Bush, Cheney, Rumsfield, et al’s fingerprints have been removed from the dialectic I call your attention to the Supreme Court and the SPADE’s trajectory.

The Conflict Within

“Even as Islamist terrorism grabs the headlines, more familiar varieties cling stubbornly to existence. It would be a brave man willing to bet where the next attack will come from.”

This is a quote from an article titled “The Airline Bombers: Bang to Rights” in the September 12th-18th 2009 edition of The Economist (http://www.economist.com/world/britain/displaystory.cfm?story_id=14424960). However, given a recent and very disturbing story emanating from from a town called Big Creek in Clay County, KY this quote could easily be superimposed on the current moral and political divide in this country (http://www.nytimes.com/2009/09/25/us/25brfs-CENSUSWORKER_BRF.html?_r=1&scp=1&sq=kentucky%20census&st=cse; http://blogs.newamericamedia.org/nam-round-table/1777/locals-parse-death-of-kentucky-census-worker). Bill Sparkman a Boy Scout leader and substitute teacher was found dead, naked, and gagged in the Daniel Boone National Forest, with a rope hung around his head and looped over a tree. The coroners believe that Mr. Sparkman was dead prior to being hung as his feet were in contact with the ground. One of the more disturbing aspects of this story is that Mr. Sparkman a part-time census field worker was found with the word “FED” written across his chest with red ink. Folks at New America Media noted that a blogger named “Hill Jill” an appalachian resident was defending her region on the Daily Kos:

“This does not strike me as a “native” crime. A native might shoot you, I won’t argue there-but they would not do the whole elaborate staged crime scene.”

This is something I would whole-heartedly agree with and having worked in Northeastern Kentucky and much of Western West Virginia I know that there are plenty of folks in this region that are pissed that they are immediately conflated with the folks in Deliverance. Yet, there is a problem here and unfortunately The Times has not deemed it worthy of sending someone to the region relying instead on AP reports. Yet, apparently the Roman Polanski story is worthy of round-the-clock editorials and in-depth coverage. Why is this so scary? Well because we need to know how many people are in this country and census workers in no way reflect the Big Brother image promulgated in this country since Orwell’s “Nineteen Eighty-Four”. I must wonder why the coward that killed Mr. Sparkman didn’t revolt against the Bush administration’s constant probing of our phones, emails, and if they had their way our bedrooms? Why did the coward who killed Mr. Sparkman not revolt when the 2000 election was literally stolen from the people of this country by Antonin Scalia et al.? Why did the coward who killed Mr. Sparkman not revolt when his or her taxes were used to bail out a bunch of criminals on Wall Street?

I think the reason he or she didn’t revolt is because this country has transformed from the United States of America into nothing more than a bunch of “tribes with flags”, which ironically was coined by Tahsin Bashir to describe the 22 Arab states of the Middle East and Africa (http://www.economist.com/specialreports/displaystory.cfm?story_id=14027698). I think if we were to lift up all the rocks surrounding the crime scene in Big Creek we would be mightily disturbed by what we find. But here in this country the truth more often than not doesn’t set you free, rather it gets you jailed, fired, or relegated to the marginal fringe. It is a shame because what happened in Clay County, KY last week is a symptom of a great sickness that appears to be spreading. It will be easier to address this issue now rather then later. This will require us to engage in thoughtful inter-state dialogue with the politicians and lobbyists locked out, because all they seem to want to stoke rather than quash divisiveness.

The lack of attention this story has received in favor of more titillating and irrelevant events is a shame but in no way surprising. Accountability is something we need to demand of our politicians and current-event purveyors alike.

Peak GDP

It seems that we may be hitting the point the Romans and many others inevitably approached and violently surpasses. It is the point at which our cumulative GDP growth has flattened out while population growth continues to grow albeit at a mild rate.

To the right you see a graph of the ratio of Cumulative Annual US GDP to Population Growth from 1930 to 2008.

gdp-to-population3

This ratio did not become positive until 1940 on the eve of WW II and spiked at the war’s conclusion in 1944-45. At this point this ratio began a steady decline to a low of 4.52 in 1963. While it experienced a bump between the 60s and late 90s it has remained relatively flat between 1950 and 2008 deviating very little from it’s ~60 yr average of 5.43.

Another way of looking at this “Economic Ceiling” is from an agricultural perspective. I have plotted the Yield to Nitrogen (N) Applied ratio for Corn here in the US from 1943-2007. On the Primary Y- and X-Axis the relationship for the raw data is shown, while the Secondary Y- and X-Axis depicts the relationship on a log scale. We see two things here: 1) the shape of the relationship is dependent on how the data is presented and 2) the raw data demonstrates quite conclusively that we have reached a similar asymptote to that described above for our economy relative to population growth. This is a disturbing trend given our over reliance on corn here in the US. GMOs and fertilizer technology will only be able to do so much in fighting this apparent biological inertia. The rest of the quagmire will require a new paradigm if it is to be fixed. That should include a gradual transition to a more diverse produce and dry goods food economy in keeping the the proselytizing of Michael Pollan. However, alot of this will involve tough medicine, which should start with decreasing national obesity from it’s current rate of 33% to 15% or what it was in 1980. This may sound quixotic but really it is a necessity and weening ourselves off our addiction to High Fructose Corn Syrup would probably put a 5-7% dent in our national obesity on it’s own.

corn-vs-nitrogen

It is high time we start to seriously discuss the idea that Eugene Fama’s “Efficient Market Hypothesis”, Adam Smith’s “Invisible Hand”, and Milton Friedman’s “Shock Doctrine” are a thing of the past designed solely to benefit the top 0.1-0.5% of the G20, G8, or OECD. We must turn our attention to what I will call an Asymptotic Economic Hypothesis or the Steady State Economy (http://www.steadystate.org/) acknowledging the ubiquitous influence of Keynes’s “Animal Spirits” and the fact that nothing grows forever.

economic-growthIt would be absolutely acceptable if we didn’t shift towards an economy with strict ceiling and floor constraints BUT if we do our children will be very mad at us!

Peak Oil Fact or Fallacy!

Michael Lynch makes some compelling points in his recent piece on ‘Peak Oil’ in the NYT (http://www.nytimes.com/2009/08/25/opinion/25lynch.html?ref=todayspaper), but he calls on one very important fallacy commonly invoked by the Big Oil:  Rate-Of-Discovery Is Not A Concern!

He states that “easy oil” is gone is “vague and irrelevant”. If you replaced the word oil with coal a majority of geologists would agree with the contention that “easy coal” is indeed gone. If it isn’t than why are we resorting to horrific, both from a health and ecological perspective, techniques such as mountain-top-removal and strip mining of thousand of Appalachian and Northern Plains hectares? The answer is that the industry is desperate and the same curse will strike Exxon, Conoco, etc. Recent advocacy for hydraulic fracturing of the Marcellus Shale is a prime indicator of such desperation and presents similar concerns for human health and our fisheries here in the Northeast.

The fuzzy logic Mr. Lynch refers to is actually his estimate that their are 2 trillion barrels of “recoverable” oil. According to who? BP and the EIA estimated 1.26 and 1.32 trillion barrels, respectively. This amounts to anywhere from 30 to 43 years of oil depending on whether we do what we did in 2008 curbing consumption by 1.1 billion barrels or we reach the commonly held projection of 43.1 billion barrels by 2030. I think it is time for another Malaise Speech. Obama….Obama….!

Another Reason I Am Not A Democrat!

The amazingly phony nature of the tribute to Ted Kennedy in the media and New England writ large. If you or I had been in his position we would be in jail for Chappaquiddick. I wonder how Mary Jo Kopechne’s family feels about the ‘Lion of the Senate? I can only guess their opinion of the man is diametrically opposed to that presented by the talking heads on network television and unfortunately my beloved NPR.

Also his family’s opposition to Cape Wind is indicative of the phony liberalism of the New England I love so much? We proselytize on our Green Soap Box, but as soon as we are asked to do more than talk and actually do we hide behind our NIMBY bullshit! Kennedy and his kind are the neoliberals Naomi Klein so effectively and efficiently exposed.

The Reason I Am Not A Democrat!

Quite simply it is the nasty and bullying nature of the Democrat establishment in New York. The party bosses are doing all they can to line the path for Kirsten Gillibrand the default junior Democratic senator form NY who took the spot vacated by Hillary Clinton on January 19th, 2009 (http://www.nytimes.com/2009/07/31/nyregion/31nyc.html?ref=todayspaper).

It seems as though we are throwing coals in the fire that doesn’t want to confuse folks with the facts but rather distract them with bluster, pandering rhetoric, fiction, and more often than not outright fiction.

This is an amazing example of how we in this country have come to view political power as a game and not a responsibility. I have nothing against Ms. Gillibrand other than her apparent Blue Dog predilections. She is I assume loyal to her constituents in upstate New York. However, the likes of Chuck Schumer are determined to hold her hand in 2010. Do we really want someone representing us (ie New York in this case) that can’t fend for themselves in a primary battle? We have a similar predicament here in Vermont where Patrick Leahy are 6-term (soon to be 7) has essentially been unopposed throughout his tenure, with the exception being the yeomen effort of Fred Tuttle (http://www.newenglandfilm.com/news/archives/98october/fredtuttle.htm; http://www.vtonly.com/loresep8.htm).

These are just 2 examples of the inability of the Democratic Party to set aside it’s collective ego and acknowledge it’s broader identity. Until they do this folks like myself and skeptics writ large will align with folks like Ralph Nader, Bernie Sanders, and Russ Feingold. You can say voting for the former is a wasted vote….and I could just as easily invoke the same when noting the supposed neoliberal capitulation to the Democrats.

Do you really want to starve the beast?

I for one do not? Does that make me an advocate of Big Brother type big government advocate? Nope. I don’t want government to be looking in our bedrooms or bookshelves or email or tapping our phones. Rather I want them to do with our precious tax dollars what they should be doing…..fixing stuff, supporting those in need, and fueling innovation. You may ask what does it mean to starve the beast? (bartlett_starve-the-beast)

Well “starving the beast” is a term originally coined in a WSJ article by Paul Blustein (http://www.wordspy.com/words/starvethebeast.asp) and adamantly preached by the neoconservative wunderkind. This theory reduces taxes on the upper 2% via reduced capital gains, estate, and income taxes, primarily by allowing the elite to declare income as capital gains, which reduces taxable income from 34-38% to 15%. A classic example of this is Warren Buffet noting his personal assistant coughs up a greater percentage of her annual income in taxes than he does, because most of his income is declared as capital gains.

The starve the beast argument foments outright hatred of government by conflating taxes with socialism and the near and dear gun rights of this nations many cowboys. Of course this plays to the underlying fears of an already petrified nation. The last thing this country needs is another thing to be afraid of as we now have climate change, Iran, the Taliban, North Korea, China, Russia, lawyers, unemployment, diabetes, etc. Yet, given all this neocons feel the best remedy is adding to rather than ameliorating these fears. What a bunch of great folks? They must be true patriots.

However, I ask of those interested in an anorexic beast: Do you drive a car or better yet do you like smooth drivable roads? You do? Of course you do we all enjoy our asphalt alleys winding their way through urban centers and rural outposts alike. Well there is a price associated with that privilege and it is a privilege when compared to developed and undeveloped nations alike. Congress has been forced to bailout the fund that pays for the various interstate transportation projects this country takes on every year. Don’t worry its just $7 billion which pales in comparison to things like defense spending (http://www.nytimes.com/2009/07/31/us/31brfs-TRANSPORTATI_BRF.html?ref=todayspaper).

Starving the beast is a convenient and short-term method of consolidating wealth, is completely counter intuitive, and a theory that we should hope is entering the twilight of its relevance.

Let Them Drink Vodka and Eat Sushi

In reading the latest global census data one thing popped in my head: Is it possible that per capita global CO2 footprints may decline in the coming year(s)?

The answer is essentially yes and we have countries like Japan and Russia to thank. For example, Russia’s population of 140.7 million is projected to decline by 0.49% annually and when considering The Reds 10.5 tons of CO2 per capita per year it turns out Russian per capita emissions could potentially decline by 7.28 Million Metric Tons in the next year.

Additionally, Japan is expected to lose 0.10% of it’s 127.3 million people (http://www.nytimes.com/2009/07/18/business/economy/18charts.html?ref=todayspaper), which when combined with their per capita footprint of 9.8 tons of CO2 per year we see a potential net decline of 1.25 MMT annually. Furthermore, the eastern european/former Soviet Union states will experience an average net population decline of 0.68% annually resulting in a decline of 790 thousand tons of CO2 from this region in the next year. Russia’s near-abroad neighbor will lessen it’s footprint by 2.57 MMT in the next year given it’s annual population decline of 0.80%

Is this fact? Of course not but it is quite probable, because Russians and Japanese, two significant contributors to atmospheric CO2, are getting older fast and in the case of the latter incapable of staying away from their beloved national spirit. Conversely, our footprint here in the US will increase by 55.83 MMT, Canada and Mexico 5.31 each,  Argentina 1.60, Brazil, 4.24, Venezuela 2.60,  France and the UK 1.65-1.90. Interestingly BBC (Big Bad China) will increase by 32.12 MMT. However, the overwhelming good news is that our global per capita Co2 emissions will increase marginally (+0.023%) in the next year, a trend indeed deserving of attention but not plaudits. The estimates above for China may actually be conservative given that they have gone from producing 1 coal fired power plant a day to 1 per week, which itself is a 14.3% change in energy strategy. Couple this with the fact that China had originally planned to have only 5,000 megawatts (MW) of wind online by the end of next year, but now project 30,000 MW, which essentially replaces the need for forty-eight 625 MW coal plants. This 30,000 figure is 118% of the current US wind power generating fleet (25,400 MW) (reliability_factsheet1).

The cumulative affects of the aforementioned population declines will be a decrease of 12.25 MMT in Russia, Japan, and the Eastern European block. This is equivalent to 48.3% and 21.2% of Canadian and Australian emissions, respectively, or put another way would cancel the annual emissions from the state of Vermont and our nation’s capital combined. Not bad but again just a start. Now get out there and buy some vodka to wash down your nightly serving of sushi! The planet thanks you and your children will thank you as well!

One and the Same

Take a guess what this quote was referencing:

“It is a threat to the foundations of our free society when government officials, acting in the midst of a crisis, use dire predictions of imminent disaster to justify their encroachment on our individual liberty and the rule of law,” said Darrell Issa (R) Congressman from San Diego, CA.

No it isn’t Iraq, it isn’t Afghanistan, or WMD or anything related to killing lots of folks for no reason.

Give up? This is congressman Issa lambasting Hank Paulson last week (http://www.commondreams.org/headline/2009/07/16-10) as he appeared before a committee investigating the nefarious actions underlying the mega bailout of Merrill Lynch by Bank of America…..and BofA by the US Government………and the US Government by us the taxpayer.

I find it hard to lend any credibility to the congressman’s concern given that such a quote could easily be attributed to Dennis Kucinich or Russ Feingold during the lead-up to and subsequent complete disaster that was/is the Iraq and Afghanistan Wars. Does he not see that it is his party (primarily but not completely!) that gave way to this kinda hubris on the part of regulators, bankers, Defense Secretaries, Vice Presidents, and Presidents?

This is nothing new and I find it amazing that San Diego is dumb enough to vote for a guy who is just now realizing what he so eloquently stated last week. Jesus I mean these words are the very same words we could use when describing the motives for Iraq, torture, warrantless wiretapping, mass ousters of states Attorneys Generals, WMD, etc etc. Come on we are asked to pretend like we were born yesterday and it is quite insulting.

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