Saturday, December 21, 2013

Holy Bananas!!!!

Once a radical...always a radical:
I suppose I was first radicalized about 1965.  In many ways it was simply the next move of a practicing non-conformist, a refugee from the 1950's love affair with television and the blatant denial of all things unpleasant.  And too, by that sad point in history, the optimism; the warm hope of a young soul had been replaced by the stark realization that America will kill the messengers of any such broader ideals:  Kennedy, King...another Kennedy; Gandhi, Jesus...the list is endless, the decision final.  
Then came 1968.  The draft notice, the week of rage that was Chicago.  Rome dismantling the republicanism that was the peoples' senate.  Kill the messenger was back with a vengeance, for the storm troopers of Chicago targeted the media -- the journalists assigned the Constitutional mandate to uphold a free press -- a press that was already under a new, and relentless siege.  From that point on, I could never look at the American flag quite the same.  And while time passed, a grudging conformity returned to my goes on -- those moments, those feelings, never really escaped the shadowy outskirts of my conscience.  In effect, I never surrendered -- instead, burying my soul in the comfort of a deep and enduring cynicism for all things now deemed the truth, or perhaps rooted in the nature of humans.  
In my last posting I stated that, "authors and independent film makers are now the last bastion of America's free and open press."  Perhaps that was a little naïve...a little narrow.  Technology and globalization have now made media suppression a truly planetary-wide pursuit, particularly by those entities that appear to have a lot to hide. And so much easier it would seem.  How else to explain the zealousness of one corporation's efforts to destroy one man and his short film about banana production in Nicaragua.  No, it is not about bananas.  It is about free speech as a threat to multi-national corporations of all stripes.  Perhaps too, this relentless injection of the dilatory beast known as self-serving propaganda. And in the end, the ultimate destruction of choice itself. 
Enter Swedish journalist and film maker, Fredrik Gertten.
His crime:  Exposing the harm being wrought on Nicaraguan farm workers by the use of a banned pesticide.  The who?  Dole Corporation, a multi-national and one of the largest food producers in the world. A controversial film?  Not really.  Just another example of farm workers being poisoned by a bunch of greedy shits in the US.  For corporations like Dole, just another day at the office. So why such a reaction?  The film was scheduled to preview at an LA film festival around 2007.  But even prior to that, Dole began sending letters, e-mails...all very threatening to Gertten and his producers, culminating in a 'cease and desist' order claiming that a fraud was being perpetrated against Dole's sterling image, and accusing the producers of malice, defamation of the company's character (a seeming oxymoron), etc. etc.. They also went after the film festival in a similar tone.
So anyway, we all know that corporations like Dole have more lawyers than Lima beans, so a whole bus load of legal machinations followed: eventually resulting in the film being withdrawn (via intimidation), from the festival, but screened at a private venue elsewhere in LA.  Issue finally resolved?  Hardly. Dole then went ahead and sued Gertten and his production staff anyway, folks who were hardly in a position to financially defend themselves.  Not because they were guilty as implied, but because they could not financially defend such an attack.  They could lose everything, including the roof over their heads.  So, after some deliberation, Gertten and his production company, to the surprise of everyone -- including Dole -- filed a counter-suit.  Then more legal nonsense, foot dragging in the courts...blah, blah.
Then something interesting happened.  The Swedish Parliament, with a little prodding, entered the fray.  Because the real issue wasn't a few dead Nicaraguans -- Dole had made that perfectly clear -- instead, the Swedish MP's viewed the suit as a pervasive attack on free speech, something that Scandinavians take very seriously.  So much so that they held a private screening in Parliament. And the publicity was generating a wide-spread boycott of Dole products throughout Europe. 
Long and short:  Dole withdrew its suit in Sweden with all kinds of caveats, addendum's...obtuse disclaimers, except that wasn't quite enough for Gertten and his people.  The film was still effectively banned in the US.  So, more court time, more delays and frivolous motions that still had to be heard by the courts.  But eventually the case came before a judge in LA -- after viewing the film, ended the charade right there. He found that the film had absolutely nothing in common with Dole's complaints...further, awarded Gertten and his production team $200,000 in damages.  Course, we're not sure where that left the Nicaraguans, other than somewhat grateful to Gertten for not only bringing their plight to the attention of the world, but having the perseverance to fight for his and their truth.   
So, back to this old radical.  Aside from playing with horses all my life, I have also been a writer, author, journalist...born I suppose in the age of the 'new journalism' espoused by the likes of PJ O'Rourke, Hunter Thompson and others...who felt that objectivity in journalism was a little too much to expect if some level of compassion and humanity was to remain in the story.  Made sense to me. However, two incidents occurred in my waning years of working in the print media -- both exemplifying what I would call the death of unbiased reporting in America...maybe even the world.
The first was about 1993.  I was working for a newspaper in California while concurrently pursuing some renewed academic studies.  I was doing a story on Stanford's LifeFlight...the hospital's helicopter transport system for critical or inaccesible cases.  Spent two-weeks flying with some of most incredible and motivated people I had ever met.  I had decided to approach the story in the 'new journalism' approach as there was simply too much emotion in the story to just wrap it in the cloak of who, what, where and how.  Hell, people died, we were constantly at risk flying under all sorts of conditions, both in the air and on the ground; the energy of these great professionals defined in sweat and tears -- not ink on a page. 
The editors tried three times to re-define my story.  See, prior to going to press, I own it, not the newspaper.  They were determined to eliminate the word death from the copy -- like telling a war correspondent to report only the glory of those that prevailed in the conflict.  You see, the advertising department was concerned over the potential reaction to the story by the Stanford University Medical Center -- a major advertising client of the newspaper.  At the third editorial board meeting, the issue was forced.  I refused again; they killed the whole story.  I packed my shit the next day.
The second issue arose around 1990.  I worked for a well-known (and missed), trade journal dedicated to a certain, specialized area in the horse world.  You might say we were the industry 'outliers' and in many ways cherished our niche.  But a story emerged that was (or should have been), of great interest to our readers and the industry as a whole.  Sadly, it was a 'dirty story' where the heroes and villains were hard to define clearly.  We had to go up against a major, foreign multi-national corporation, one that happened to be one of our major advertisers.  That created a moral dilemma for us, that in turn wrapped in a potential for a kind of economic suicide. 
We sat on the story a bit, tried to find a way to take the high road without being murdered along the way.  Like the film maker, Gertten -- when coercion failed, the threats began.  And continued until they went from possible to a done deal.  And in the end...the loyalties to our readers, the industry -- was never reciprocated.  We were just one more publication deemed DOA.  I never wrote in the print media again.
And that is why I say that authors, film makers; some bloggers perhaps -- these folks now represent what is left of journalistic standards and integrity in this country.  News is relegated to the sewers of entertainment, corporations run the government and virtually own the very regulatory agencies once charged to temper the excesses of profit-seeking and greed.  The kind of heroin that big business can never seem to kick.  Education too is under siege -- the dumbing-down of America running at full throttle.  And much to my numbing fear perhaps, is that very soon we may lose "that last angry man."  The one guy that stands between our claim to humanity and the animalistic extinction we just might deserve.  We've been adrift for decades on this vile, dying ocean of blind ambition -- a wandering disease that is no longer welcome on any distant shore.  A despondent shark, awash with the realization that he has finally eaten the last fish on the planet.    
No, it is not just about bananas anymore.     

Friday, December 20, 2013

A Dyslexic Math-Hater Looks at the Economy:

Now I Get It!

Too Bad For Me...and You.
Once I had temporarily moved to Wisconsin, I decided to give up conventional television.  So I bought a Roku box and spent some time catching up on documentaries...things with intelligent content and no Christmas commercials, alligator assassins or Big Pharma's insatiable appetite to sell me drugs with more side-effects than a morning commute in Los Angeles.  Out of this initial experiment I have come to the conclusion that the real free press in this country has been relegated to authors and independent film makers.  That in itself, is a sad -- no, horrific realization for a nation that was once willing to die for the sanctity of a few fundamental truths.
The American Economic Model:
First off, America itself was founded as the world's first capitalistic state.  An experiment really in a full-circle mercantile-based society. I wondered:  "What the hell is really going on in this current, chronic and evidently doomed economic model we have embraced where we have gone to speaking in terms of millions, billions and on to trillions -- which for most Americans is like staring at a 55-gallon drum of moldy Cole-slaw.  Uh, huh...we're trying to understand a $5.00 pork chop while Congress is arguing about the exact definition of bankruptcy. we go.  I suggest you crack a new bottle of Bourbon about now.
I first tried to connect the dots in the relationship between the Federal Reserve and the US Treasury Department and just exactly how these machinations relate to the continuing US deficit, the astronomical American debt and the wandering ghost known as the trade deficit.  Was I sorry I asked?  Yes and no.
Believe it or not, the current mess actually all started in August of 1971, when then US President, Richard Nixon dissolved the gold exchange on American currency and simply floated the dollar on world markets via good faith and air.  Which means that the dollar was now backed by a wink and a smile.  That seemed okay as the dollar still represented the strongest and most accepted currency in the world, and as such was quickly embraced as the standard for judging the value of every other nation's currency.  What followed in the US was a period of extreme inflation, created in many ways by the world-wide manipulation of foreign national currencies in a false parity on the dollar.  So if a Japanese yen is suddenly worth a US dollar, then what does that do to the value of that dollar?  Better yet, what does it do to the cost of a Japanese-made Toyota?  Hmm.  So like today's situation with China...there are suddenly two versions of the Chinese yuan.  One used at home at true value to pay the worker -- the other one floated on world markets as faux true-value currency.  The Jekyll and Hyde of world trade.  So the Chinese worker is paid shit -- the American consumer buying Chinese products then gets to make up the difference in value.  Great plan.
However, let's back up to 1945 to the little berg of Breten Wood, Vermont.  World War II was closing -- the culmination of the world's most massive economic misstep.  Sure, some other junk was involved, but both German and Japanese nationalism and expansionist desires, as well as the rise of Bolshevism, were driven by the horses of resource scarcity, economic inequality and money.  Since America was now the new economic 'Bull o' the Woods,' and most other nations were broke, destroyed or conquered it was decided that world peace was easier to maintain with gold than guns -- establishing both the gold standard and the US dollar as the currency of the realm -- in that all other currencies were based on the value of that dollar.  That is where the $35.00 an ounce thing came from.  Worked kinda okay in the decades that followed as the world enjoyed relative, if unreliable peace, sustained economic growth and something resembling income equality.  Remember that last one, please.  
Now, back to Richard Nixon.  The Breten Wood Conference created what was known as a gold exchange.  In this framework, gold could be lent or exchanged between nations to balance the books, carry-over short-term downfalls...get the Crown Jewels dry-cleaned...whatever.  Except that two things happened in America.  We got into the Vietnam War and the price of Kennedy's desire to check out the moon.  The bills started coming due and the US was suddenly running a deficit.  The thing about these massive piles of gold in the exchange is that the gold never went anywhere.  They didn't unload Fort Knox and send it to the Pentagon to trade corn for bombs.  The gold stayed and other nations just got a check.  Because of the growing US deficit brought about by trying to save the Vietnamese from a worse fate I guess, these checks began to bounce.  That placed a very negative cloud over the assumed confidence the world had held in the US dollar.  Confidence.  Finish that first bottle of Bourbon and write the word confidence on your hand.  It will be really important later.
The more I study the French, the more I realize that this is a nation where Momma didn't raise no dummies.  On top of that, they had a pretty good idea where American intervention in Vietnam was was headed.  So along about 1970, France started an international stampede by simply informing the US Treasury that we'd like the gold...not another check.  Turned out we were a little short on the stuff, so Nixon said, "Hold on boys..."  He then abruptly withdrew the US from the gold exchange, claimed the dollar was sound as ever and ushered in the era of what is known as Fiat Currency.  Dollars backed by...well, nothing.  The real nail in the coffin was that an active gold exchange required discipline...subsequently, under this new Fiat system, discipline went out the window.  What followed was rapid inflation in the US -- a disease that spread around the world;  aggravated to a great extent by these folks:
Economics 101:  Try to understand that currency is NOT money; rather merely a medium of exchange and further, that governments have an inherent (invented) right to declare something as value.
Basically that means if Afghanistan decides to use sheep testicles against the US dollar...better find some sheep. 
The Federal Reserve:
 Yes, this thing is a monster.   Around 2009, Arthur Greenspan, head of the Federal Reserve was called before a Congressional hearing to answer a few nagging questions.  The gist was: "Yo, Arthur! What's goin' on my man?"  Greenspan had, for quite some time been known as the guru of free-market capitalism.  However, in this particular case he managed to confess that "a flaw may exist in my [economic] ideology."  Really?  By then about 40,000,000 home owners across America had regrettably already reached a very similar conclusion.  But the mortgage collapse was a different can of worms altogether. That comes under the banner of America's insatiable desire for a 'free lunch.'  We engage in this orgy of denial about every 10 years or so.  Remember the dot-com thing?  The savings and loan thing?  Yep.
What Does This Monster Eat?
This is what the Federal Reserve does:  it prints money for the US Treasury.  It also plays with interest rates, monitors the flow of capital going into and out of the know, plays God.  Worked pretty good when US currency was backed by a tangible -- gold.  Doesn't work so good when the currency is backed up by little more than good faith...and as I mentioned, suddenly develops a clear lack of discipline, particularly when Congress is running for re-election or a standing president needs a pat on the back or a scape-goat for something as minor as the complete collapse of the American banking system, mostly because we didn't quite figure out how to pay for two drawn-out, murderous wars that failed to have either an exit plan or a defined purpose.  Hello Vietnam!
So now we have amassed a monumental debt.  Forget the trade deficit for a second because that's already in the Gulag of Lost Causes.  The US Treasury tells the Fed that we need more cash.  So much cash that the FED keeps running out ink and paper.  This cash is then converted to Federal Bonds, which are auctioned off in open world markets.  They are back by the US government; aka, the Treasury under the assumption that the "US is too big to fail."  Yes, take a time-out here to swallow your tongue.  The cliché's just get funnier.  So, who's buying?  Who's got any money left?  Oh, the Chinese.  And why do they have money?
Time Out! 
Anyone remember the mid-1960's -- I mean the other 60's where American business concluded that the Japanese could build our junk cheaper than we could.  Following the 1973 oil embargo this really took off because when you export the manufacturing of your widget, you also export the technology.  Ta, da!  The Datsun!  And here we thought the Japanese were dumb just because they lost the big war.  Well, they won the 'car war' by a long stretch and America's memory; better yet, its hindsight, is always a bit myopic. Enter Boeing, GE, Microsoft ad nausea, and now the Chinese manufacture everything that we once did...and probably do it better.  It is estimated that 96% of everything you'll find in a Wal-Mart is Chinese-made.  Including that cheap toilet paper Americans so love to buy.   What we did export during this period was toxic assets, which managed to bankrupt half of Europe and take down at least three governments. And meanwhile our wars of vengeance are now in their 10th year -- twice as long as it took to fight all of World War II.  Price tag:  Ha, remember that 55-gallon drum of moldy is now 1,000,000 barrels and climbing.
Back to why China has so much money...oh, it's our money actually.  Two-thirds of what we buy comes from China, so we pay the mark-up and the disparity created by the yuan/yuan shell game.  American government does nothing because China also buys the vast majority of those US Treasury bonds that go to sustain all this foreign interventionism -- those trillions that make up the United States debt.  And since we sold our technological souls to the Chinese, it would appear completely impossible -- absurd would be a better word, to ever, ever resolve the existing trade deficit.  Except through war.  Lovely thought.  And this brings us to:
Yep, that's Charles Ponzi.  See, what the Federal Reserve and the US Treasury are conducting is really the world's greatest Ponzi Scheme...this of course with the backing of America's multi-national corporations, who pay absolutely no taxes and are already comfortably ensconced with their billions...overseas. 
 See, the nature of a Ponzi Scheme is quite simple:  you pay old investors (at the top) by recruiting lots of investors at the bottom.  Of course, when you run out of investors and/or their capital at the bottom, the scheme collapses and the originators are in Jamaica working on their tan.
However...America's version is a little different. 
 If America uses these funds (the Treasury bonds sold on open markets), to pay off internal debt,
then how do they then pay back the bonds?
Could be the rat in Greenspan's cheese box because this economic scenario is 100% fatal.  Not 50% or 62% or 27% -- 100% percent doomed.  The bond is the Ponzi in the Scheme.  And it is all floated by a little word I shared earlier: confidence.  You see, if you borrow a dollar to pay off a previously borrowed dollar + the accrued interest -- then where are you going to get that second dollar...or second trillion dollars?
If the average American...meaning the 95% occupying the expanding discomfort of this critically wounded economy are a little shell-shocked, what in the hell is the rest of world thinking?  What are the Chinese thinking?  They have a new middle-class of 300,000,000 souls who have discovered that expectations and hope DO exist.  If we collapse, they collapse....and that should be a very sobering thought, particularly in a world that is already tipping from the ravages of climate change, resource depletion and geo-political instability. 
Logically Then, We Have/Had a Trade Deficit 
How does this figure into our very crowded can of worms?  And why do foreign governments (particularly the Chinese), keep buying our rapidly degrading bonds?  Ah...they buy these bonds in order to keep their OWN currency value LOW, thereby remaining attractive for US manufacturers to continue to use their resources and labor, who are paid via this devalued currency...the yuan/yuan thing.  AND...this is further exasperated by the fact that American corporations have off-shored millions of jobs, along with the extended economy these jobs create...and the money and profits stay off-shore, hence we are accumulating debt concurrently with a massive loss of tax revenues. Kind of like the guy who bought pickles for a dollar and sold them for 50 cents.  "I don't make much money, but I sure as hell sell a lot of pickles!"  Yeah, sounds sustainable all right.  
On the horizon?  Quite likely a bout of hyper-inflation following the implosion of our 40-year love affair with Fiat Currency and all it has wrought.  It is the one model that remains predictable over time.  It was the core issue in the conflagration that was World War II.  Revolutions swept Europe, governments fell, communism raised its ugly and unrealistic head.  Not since 1929, has income inequality reached the levels in the US as is seen today.  We are a nation of consumers that can no longer afford to consume.  We have created a rock that can only roll down hill.  My grandparents went through this in post-war Germany.  Then, as now, the solution seemed to lie down the avenues of anarchy and war.  The structural problems were so deep, the despair so high, the confidence so eroded...that simple word once again.  And the dollar is no longer immune to such an assault. But given the rancorous nature of our current leadership...any affirmative action; really even the acknowledgement that such an immense problem exists...seems unlikely as long as all fingers remain pointed elsewhere. We've ridden the brink longer and harder than any ground can support. 
Laugh if you like...but when I was closing out my grandfather's estate in Germany, I found dozens of these stuffed around the windows for insulation.  This is what happens when confidence is lost in a country's currency...that perception of value.
Got to thinking...yeah, bad idea at my age, but after trying to understand, explore -- perhaps locate a sane and logical point of reference to the current (chronic) system we refer to as the 'US economy,' I actually discovered an unexpected bonus that incompetency can sometimes generate.  Yes, hyper-inflation.

But first off, an important point:  Most Americans do not know or understand that the Federal Reserve is NOT a government agency of some kind.  It is a private cartel formed by the nation's most powerful central banks.  As such, it is kind of like having your own private loan shark -- in this case, the US Treasury...aka, your tax dollars at work; or maybe at play.  So when some politician coins a new phrase, like "too big to fail," they aren't far from the truth for a change.  Unrealistic truth perhaps, but then reality hasn't been too popular for decades anyway.
So as I was alluding to the other day, the US economy is currently operated like a giant Ponzi Scheme, with the Federal Reserve simply printing more and more money that the US sells around the world as Treasury bonds, many of which seem to end up in China.  The only reason these fools buy the things can be summed up in one word: confidence. Because today, the dollar is backed up by...I don't know -- polyester farms?

Oh, my point?  Well, when the dollar finally loses face value...inevitable it would seem; inflation follows. As the truth spreads and confidence erodes further, you get hyper-inflation. I had in friend in Brazil (1990's) who owned a restaurant and explained that he had to raise his drink prices on Monday, food on Tuesday -- then drinks again on Wednesday, ad nauseum. And within a year or so this nonsense, Brazil's government collapsed. Kind of a riotous 'no-confidence' vote.  You mess with the price of necessities and people will emerge from their complacent slumber.

I think it is a great way to straighten out this mess.  Hyper-inflation is very egalitarian, non-partisan (after the blame game goes stale) and every single American gets to enjoy the mess equally.  Gas prices might be a bearable annoyance for many, but basic necessities never, ever are.  So, let the games begin.  Think I'll stock up on peanut butter.  Right now, it looks better than gold.  
Now go ahead and finish that second bottle of Bourbon.  You've earned it!