What a disappointment from AG Martha Coakley!
Oh, sure! Dirty Coal-Fired plants are so much cheaper!
Somerset, MA: Pauline vs. Dirty Coal
This is your Ash - your Coal Ash in Massachusetts.
BRAYTON POINT 190,000,000 POUNDS
SOMERSET 60,100,000 POUNDS
SALEM HARBOR 140,800,00 POUNDS
WEST SPRINGFIELD 40,000,000 POUNDS
MOUNT TOM 75,200,000 POUNDS
Is this what the AG is supporting?
One single accident, one single Coal Ash spill at one of these sites, similar to what occurred in Harriman, TN, will destroy a community.
~ 50% of our electric energy in the US comes from Dirty Coal Energy.
It is extremely cheap because they don't have to pay the environmental costs from coal ash spills or mountaintop removal.
+ 500 Mountains have been leveled for coal removal.
For the AG to arrive at this preposterous statement makes one wonder how uninformed she is and how selective in her cost assessment.
And Fracking? Yet another environmentally toxic solution that has destroyed drinking water and environments.
This is about sustainability. Our current path is totally unsustainable.
Green alert on Coakley
BY: Bruce Mohl
Attorney General Martha Coakley insists she is as green as ever, but environmental activists aren’t so sure after her recent testimony on the state’s three-year-old Green Communities Act.
Coakley warned lawmakers on Beacon Hill that the cost of implementing the law over the next four years will be $4 billion, resulting in a 7 percent increase in electricity rates at a time when the state’s economy is struggling to emerge from recession. “We need to fully consider these costs and work to reduce them,” she said in her prepared remarks.
The attorney general’s stark presentation set off alarm bells in the state’s environmental community. “She seemed to be taking aim at our green energy policies across the board,” said Sue Reid, director of the Conservation Law Foundation Massachusetts. Reid says she is arranging a meeting with Coakley to discuss her position.
Jeremy McDiarmid, Massachusetts director of Environment Northeast, said Coakley’s presentation emphasized the cost of the state’s green policies and largely ignored the benefits. “We need to be looking at both the costs and the benefits on an equal footing,” McDiarmid said. “We need a balance.”
Mark Sylvia, commissioner of the state’s Division of Energy Resources, disputed Coakley’s numbers. He predicted electricity rates will rise 2 to 3 percent over the next three years and consumers who take advantage of the state’s energy efficiency programs to reduce their consumption may actually see their electric bills drop. “It’s a great story,” he said of the Green Communities Act.
The attorney general says she remains a big supporter of the Green Communities Act, but she believes parts of the law need to be overhauled. She pulled her cost estimates from a chart buried in a strongly positive Patrick administration report on electricity market reforms. The chart indicates the cost of the state’s electricity initiatives will be roughly $1 billion a year for each of the next four years.
Coakley didn’t mention in her remarks that the same chart also estimated the benefits of electricity market reforms -- in the form of energy efficiency, renewable energy development, and energy innovation -- will hover around $2.5 billion a year. Coakley left that information out of her speech because those benefits accrue over a long time while the costs will be felt immediately.
“Going green, in the short run, is going to cost us,” Coakley said after a bill-signing this week.
To reduce those costs, Coakley is calling for increased competition and transparency, more cost efficiency, and fewer sweetheart incentives for utility companies. She said long-term renewable energy contracts should be bid competitively, an apparent dig at National Grid’s deal to buy Cape Wind power. She criticized financial incentives given to utilities to meet energy efficiency goals and to sign long-term renewable power contracts.
“We are also concerned with policies that favor more costly technologies and would like to see technology-neutral policies that ensure that the least expensive alternatives are implemented first,” she said.
Her comments on technology-neutral policies mimicked those of the Massachusetts Competitive Partnership, a group of the state’s top business executives. The group says Massachusetts can reach its green emission goals and save $10 billion by adopting a technology-neutral approach with renewable energy.
Under current law, many renewable power generators are subsidized by ratepayers. They are issued one renewable energy certificate, or REC, for each kilowatt hour of electricity they produce. They then sell their RECs to power sellers, who buy them in order to prove that they are meeting the state’s renewable portfolio standard, which currently requires that 10 percent of the electricity they sell come from renewables by 2015.
Under current law, power from wind, solar, small hydro, and biomass projects can be used to meet the renewable portfolio standard. The Massachusetts Competitive Partnership would like to add energy efficiency and big hydro to the mix, but exclude them from the REC subsidy program. In essence, the business officials would let utilities meet their renewable energy targets using energy efficiency projects and large-scale hydro power imports from Canada, which are substantially cheaper than wind and solar. “We think you should go to the lowest-cost alternative,” said Dan O’Connell, CEO of the partnership.
Sylvia, the DOER commissioner, doesn’t think the partnership’s plan would work. He indicated he would keep the existing regulatory system in place to support wind and solar power development while separately encouraging energy efficiency and the importation of large-scale hydro power from Canada.
The green debate is on.
Tuesday, December 13, 2011
Durban: Progress from the bottom up, not the top down
What a disappointment!
In Glare of Climate Talks, Taking On Too Great a Task
A coal-fired power plant in Changchun, China. Many environmental officials say all countries should be bound by the same rules.
By JOHN M. BRODER
DURBAN, South Africa — For 17 years, officials from nearly 200 countries have gathered under the auspices of the United Nations to try to deal with one of the most vexing questions of our era — how to slow the heating of the planet.
Every year they leave a trail of disillusion and discontent, particularly among the poorest nations and those most vulnerable to rising seas and spreading deserts. Every year they fail to significantly advance their own stated goal of keeping the average global temperature from rising more than 2 degrees Celsius, or about 3.6 degrees Fahrenheit, above preindustrial levels.
That was the case again this year. The event, the 17th conference of the United Nations Framework Convention on Climate Change, wrapped up early Sunday morning with modest accomplishments: the promise to work toward a new global treaty in coming years and the establishment of a new climate fund.
The decision to move toward a new treaty — and toward replacing the 20-year-old system that requires only industrialized nations to cut emissions — was hard-won, after 72 hours of continuous wrangling. But for now it remains merely a pledge, and all details remain to be negotiated.
Negotiators also left for another day the precise sources of the money for the fund and how and by who it would be disbursed. Called the Green Climate Fund, it would help mobilize a promised $100 billion a year in public and private funds by 2020 to assist developing nations in adapting to climate change and converting to clean energy sources.
There is no denying the dedication and stamina of the environment ministers and diplomats who conduct these talks. But maybe the task is too tall. The issues on the table are far broader than atmospheric carbon levels or forestry practices or how to devise a fund to compensate those most affected by global warming.
What really is at play here are politics on the broadest scale, the relations among Europe, the United States, Canada, Japan and three rapidly rising economic powers, China, India and Brazil. Those relations, in turn, are driven by each country’s domestic politics and the strains the global financial crisis has put on all of them. And the question of “climate equity” — the obligations of rich nations to help poor countries cope with a problem they had no part in creating — is more than an “environmental” issue.
Effectively addressing climate change will require over the coming decades a fundamental remaking of energy production, transportation and agriculture around the world — the sinews of modern life. It is simply too big a job for those who have gathered for these talks under the 1992 United Nations treaty that began this grinding process.
“There is a fundamental disconnect in having environment ministers negotiating geopolitics and macroeconomics,” said Nick Robins, an energy and climate change analyst at HSBC, the London-based global bank. Mr. Robins noted that the 20-year-old framework convention and the 1997 Kyoto Protocol that amended it enshrined the two-tiered system in which so-called developed and developing countries are treated differently. China still is classified as a developing country and is thus exempt from any emissions limits, but it has a vastly larger economy than it had in 1992 and recently surpassed the United States as the world’s largest emitter of greenhouse gases.
“They are working from a 20th-century agreement,” Mr. Robins said.
The United States is determined to sweep away those distinctions and work toward a system where all countries are bound by the same rules. The conference here in Durban kept the tiered system alive for another few years, but it is fading. And by the time the next phase of the Kyoto Protocol expires in 2020, a good many leaders hope that it will be gone for good.
Todd D. Stern, the chief American climate negotiator, revealed his qualms about the inability of the United Nations climate bureaucracy to deal with the broad political and financial questions posed by climate change. “We want to see a green fund that is going to draw in a lot of capital from countries all over the world, including the United States,” he said at a briefing. “And although I love climate negotiators and spend much of my time with them, they are not necessarily the most qualified people to run a multibillion-dollar fund.”
So who is qualified to tackle these tasks? Two years ago, more than 100 heads of state and leaders of governments, including President Obama, joined the United Nations climate conference in Copenhagen hoping to write a new, legally binding treaty covering all parties. That assignment proved too much even for the leaders, and the meeting collapsed in acrimony and finger-pointing. Few top leaders have shown up at the two subsequent meetings, in Cancún, Mexico, in 2010, and in Durban this year. The agenda has narrowed and expectations have shrunk, yet the ship sails grimly on.
Others think that real progress will not emerge from any global forum but from action at the ground level, by entities unencumbered by the United Nations climate process.
Mary D. Nichols, chairwoman of the California Air Resources Board, which arguably has done more to reduce carbon pollution in the United States than any other body, was in Durban as an observer. Ms. Nichols said that given the inability of the international bureaucracy or the United States Congress to move decisively on global warming, the job would increasingly fall to the states and local governments.
“Instead of waiting for them to negotiate some grand bargain, we have to keep working on the ground,” she said. “Progress is going to come from the bottom up, not the top down.”
In Glare of Climate Talks, Taking On Too Great a Task
A coal-fired power plant in Changchun, China. Many environmental officials say all countries should be bound by the same rules.
By JOHN M. BRODER
DURBAN, South Africa — For 17 years, officials from nearly 200 countries have gathered under the auspices of the United Nations to try to deal with one of the most vexing questions of our era — how to slow the heating of the planet.
Every year they leave a trail of disillusion and discontent, particularly among the poorest nations and those most vulnerable to rising seas and spreading deserts. Every year they fail to significantly advance their own stated goal of keeping the average global temperature from rising more than 2 degrees Celsius, or about 3.6 degrees Fahrenheit, above preindustrial levels.
That was the case again this year. The event, the 17th conference of the United Nations Framework Convention on Climate Change, wrapped up early Sunday morning with modest accomplishments: the promise to work toward a new global treaty in coming years and the establishment of a new climate fund.
The decision to move toward a new treaty — and toward replacing the 20-year-old system that requires only industrialized nations to cut emissions — was hard-won, after 72 hours of continuous wrangling. But for now it remains merely a pledge, and all details remain to be negotiated.
Negotiators also left for another day the precise sources of the money for the fund and how and by who it would be disbursed. Called the Green Climate Fund, it would help mobilize a promised $100 billion a year in public and private funds by 2020 to assist developing nations in adapting to climate change and converting to clean energy sources.
There is no denying the dedication and stamina of the environment ministers and diplomats who conduct these talks. But maybe the task is too tall. The issues on the table are far broader than atmospheric carbon levels or forestry practices or how to devise a fund to compensate those most affected by global warming.
What really is at play here are politics on the broadest scale, the relations among Europe, the United States, Canada, Japan and three rapidly rising economic powers, China, India and Brazil. Those relations, in turn, are driven by each country’s domestic politics and the strains the global financial crisis has put on all of them. And the question of “climate equity” — the obligations of rich nations to help poor countries cope with a problem they had no part in creating — is more than an “environmental” issue.
Effectively addressing climate change will require over the coming decades a fundamental remaking of energy production, transportation and agriculture around the world — the sinews of modern life. It is simply too big a job for those who have gathered for these talks under the 1992 United Nations treaty that began this grinding process.
“There is a fundamental disconnect in having environment ministers negotiating geopolitics and macroeconomics,” said Nick Robins, an energy and climate change analyst at HSBC, the London-based global bank. Mr. Robins noted that the 20-year-old framework convention and the 1997 Kyoto Protocol that amended it enshrined the two-tiered system in which so-called developed and developing countries are treated differently. China still is classified as a developing country and is thus exempt from any emissions limits, but it has a vastly larger economy than it had in 1992 and recently surpassed the United States as the world’s largest emitter of greenhouse gases.
“They are working from a 20th-century agreement,” Mr. Robins said.
The United States is determined to sweep away those distinctions and work toward a system where all countries are bound by the same rules. The conference here in Durban kept the tiered system alive for another few years, but it is fading. And by the time the next phase of the Kyoto Protocol expires in 2020, a good many leaders hope that it will be gone for good.
Todd D. Stern, the chief American climate negotiator, revealed his qualms about the inability of the United Nations climate bureaucracy to deal with the broad political and financial questions posed by climate change. “We want to see a green fund that is going to draw in a lot of capital from countries all over the world, including the United States,” he said at a briefing. “And although I love climate negotiators and spend much of my time with them, they are not necessarily the most qualified people to run a multibillion-dollar fund.”
So who is qualified to tackle these tasks? Two years ago, more than 100 heads of state and leaders of governments, including President Obama, joined the United Nations climate conference in Copenhagen hoping to write a new, legally binding treaty covering all parties. That assignment proved too much even for the leaders, and the meeting collapsed in acrimony and finger-pointing. Few top leaders have shown up at the two subsequent meetings, in Cancún, Mexico, in 2010, and in Durban this year. The agenda has narrowed and expectations have shrunk, yet the ship sails grimly on.
Others think that real progress will not emerge from any global forum but from action at the ground level, by entities unencumbered by the United Nations climate process.
Mary D. Nichols, chairwoman of the California Air Resources Board, which arguably has done more to reduce carbon pollution in the United States than any other body, was in Durban as an observer. Ms. Nichols said that given the inability of the international bureaucracy or the United States Congress to move decisively on global warming, the job would increasingly fall to the states and local governments.
“Instead of waiting for them to negotiate some grand bargain, we have to keep working on the ground,” she said. “Progress is going to come from the bottom up, not the top down.”
Friday, December 9, 2011
Bailout Total: $29.616 Trillion Dollars
Worth reading if you want to know why you're poor and bankers aren't:
Bailout Total: $29.616 Trillion Dollars
By Barry Ritzholz, The Big Picture Blog
09 December 11
There is a fascinating new study coming out of the Levy Economics Institute [1] of Bard College. Its titled “$29,000,000,000,000: A Detailed Look at the Fed’s Bail-out by Funding Facility and Recipient” by James Felkerson. The study looks at the lending, guarantees, facilities and spending of the Federal Reserve.
The researchers took all of the individual transactions across all facilities created to deal with the crisis, to figure out how much the Fed committed as a response to the crisis. This includes direct lending, asset purchases and all other assistance. (It does not include indirect costs such as rising price of goods due to inflation, weak dollar, etc.)
The net total? As of November 10, 2011, it was $29,616.4 billion dollars - (or 29 and a half trillion, if you prefer that nomenclature). Three facilities—CBLS, PDCF, and TAF— are responsible for the lion’s share - 71.1% of all Federal Reserve assistance ($22,826.8 billion).
One comment about some of the folks pushing back against this massive total: Yes, there is a big difference between a $100 lent for 3 days, and a $100 lent overnight rolled over 2 more times. And there is an enormous difference when temporary overnight lending lasts for three years.
Overnight lending, by its definition, is temporary, short term, lower risk, modest impact. It exists to allow slightly over-extended banks to meet their reserve requirements. But rolling overnight lending repeatedly for 3 years is none of those things. And it makes a mockery of these same reserve requirements, and the protective purposes they are supposed to serve.
The amount of overnight lending reflects how broken our financial system really is. A well capitalized, moderately leverage system does not require this massive liquidity from a central bank - interbank lending should be sufficient. What the data reveals is that the financial sector remains dangerously under-capitalized and overleveraged.
To pretend these were merely minor overnight loans, rolled over once or twice, is foolish, dangerous nonsense.
Cumulative facility totals, in billions
Source: Federal Reserve
Facility Total Percent of total
Term Auction Facility $3,818.41 12.89%
Central Bank Liquidity Swaps 10,057.4(1.96) 33.96
Single Tranche Open Market Operation 855 2.89
Terms Securities Lending Facility and Term Options Program 2,005.7 6.77
Bear Stearns Bridge Loan 12.9 0.04
Maiden Lane I 28.82(12.98) 0.10
Primary Dealer Credit Facility 8,950.99 30.22
Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility 217.45 0.73
Commercial Paper Funding Facility 737.07 2.49
Term Asset-Backed Securities Loan Facility 71.09(.794) 0.24
Agency Mortgage-Backed Security Purchase Program 1,850.14(849.26) 6.25
AIG Revolving Credit Facility 140.316 0.47
AIG Securities Borrowing Facility 802.316 2.71
Maiden Lane II 19.5(9.33) 0.07
Maiden Lane III 24.3(18.15) 0.08
AIA/ ALICO 25 0.08
Totals $29,616.4 100.0%
>
Source:
BERNANKE’S OBFUSCATION CONTINUES: THE FED’S $29 TRILLION BAIL-OUT OF WALL STREET [2]
L. Randall Wray
Economonitor, December 9th, 2011
http://www.economonitor.com/lrwray/2011/12/09/bernanke’s-obfuscation-continues-the-fed’s-29-trillion-bail-out-of-wall-street/
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2011/12/bailout-total-29-616-trillion-dollars/
URLs in this post: [1] Levy Economics Institute: http://www.levyinstitute.org/
[2] BERNANKE’S OBFUSCATION CONTINUES: THE FED’S $29 TRILLION BAIL-OUT OF WALL STREET: http://www.economonitor.com/lrwray/2011/12/09/bernanke’s-obfuscation-continues-the-fed’s-29-trillion-bail-out-of-wall-street/
Bailout Total: $29.616 Trillion Dollars
By Barry Ritzholz, The Big Picture Blog
09 December 11
There is a fascinating new study coming out of the Levy Economics Institute [1] of Bard College. Its titled “$29,000,000,000,000: A Detailed Look at the Fed’s Bail-out by Funding Facility and Recipient” by James Felkerson. The study looks at the lending, guarantees, facilities and spending of the Federal Reserve.
The researchers took all of the individual transactions across all facilities created to deal with the crisis, to figure out how much the Fed committed as a response to the crisis. This includes direct lending, asset purchases and all other assistance. (It does not include indirect costs such as rising price of goods due to inflation, weak dollar, etc.)
The net total? As of November 10, 2011, it was $29,616.4 billion dollars - (or 29 and a half trillion, if you prefer that nomenclature). Three facilities—CBLS, PDCF, and TAF— are responsible for the lion’s share - 71.1% of all Federal Reserve assistance ($22,826.8 billion).
One comment about some of the folks pushing back against this massive total: Yes, there is a big difference between a $100 lent for 3 days, and a $100 lent overnight rolled over 2 more times. And there is an enormous difference when temporary overnight lending lasts for three years.
Overnight lending, by its definition, is temporary, short term, lower risk, modest impact. It exists to allow slightly over-extended banks to meet their reserve requirements. But rolling overnight lending repeatedly for 3 years is none of those things. And it makes a mockery of these same reserve requirements, and the protective purposes they are supposed to serve.
The amount of overnight lending reflects how broken our financial system really is. A well capitalized, moderately leverage system does not require this massive liquidity from a central bank - interbank lending should be sufficient. What the data reveals is that the financial sector remains dangerously under-capitalized and overleveraged.
To pretend these were merely minor overnight loans, rolled over once or twice, is foolish, dangerous nonsense.
Cumulative facility totals, in billions
Source: Federal Reserve
Facility Total Percent of total
Term Auction Facility $3,818.41 12.89%
Central Bank Liquidity Swaps 10,057.4(1.96) 33.96
Single Tranche Open Market Operation 855 2.89
Terms Securities Lending Facility and Term Options Program 2,005.7 6.77
Bear Stearns Bridge Loan 12.9 0.04
Maiden Lane I 28.82(12.98) 0.10
Primary Dealer Credit Facility 8,950.99 30.22
Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility 217.45 0.73
Commercial Paper Funding Facility 737.07 2.49
Term Asset-Backed Securities Loan Facility 71.09(.794) 0.24
Agency Mortgage-Backed Security Purchase Program 1,850.14(849.26) 6.25
AIG Revolving Credit Facility 140.316 0.47
AIG Securities Borrowing Facility 802.316 2.71
Maiden Lane II 19.5(9.33) 0.07
Maiden Lane III 24.3(18.15) 0.08
AIA/ ALICO 25 0.08
Totals $29,616.4 100.0%
>
Source:
BERNANKE’S OBFUSCATION CONTINUES: THE FED’S $29 TRILLION BAIL-OUT OF WALL STREET [2]
L. Randall Wray
Economonitor, December 9th, 2011
http://www.economonitor.com/lrwray/2011/12/09/bernanke’s-obfuscation-continues-the-fed’s-29-trillion-bail-out-of-wall-street/
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2011/12/bailout-total-29-616-trillion-dollars/
URLs in this post: [1] Levy Economics Institute: http://www.levyinstitute.org/
[2] BERNANKE’S OBFUSCATION CONTINUES: THE FED’S $29 TRILLION BAIL-OUT OF WALL STREET: http://www.economonitor.com/lrwray/2011/12/09/bernanke’s-obfuscation-continues-the-fed’s-29-trillion-bail-out-of-wall-street/
Tinker Bell Pinochet and the Fairy Tale Miracle of Chile
In 2008, the article below was posted on this site and is no longer archived.
It represents an excerpt from a Greg Palast book that was well worth reading.
It made sense then and foretold the future - failed economic policy.
This is where we're going.
Tinker Bell Pinochet and the Fairy Tale Miracle of Chile
The London Observer
Sunday, November 22, 1998
SAO PAULO - Cinderella's Fairy Godmother, Tinker Bell and Senator Augusto Pinochet have much in common.
All three performed magical good deeds. In the case of Pinochet, he is universally credited with the Miracle of Chile, the wildly successful experiment in free markets, privatisation, de-regulation and union-free economic expansion whose laissez-faire seeds have spread from Santiago to Surrey, from Valparaiso to Virginia.
But Cinderella's pumpkin did not really turn into a coach. The Miracle of Chile, too, is just another fairy tale. The claim that General Pinochet begot an economic powerhouse is one of those utterances, like "Labour's ethical foreign policy," whose truth rests entirely on its repetition.
Chile can claim some economic success. But that is the work of Salvador Allende - who saved his nation, miraculously, a decade after his death.
In 1973, the year the General seized the government, Chile's unemployment rate was 4.3%. In 1983, after ten years of free-market modernisation, unemployment reached 22%. Real wages declined by 40% under military rule.
In 1970, 20% of Chile's population lived in poverty. By 1990, the year "President" Pinochet left office, the number of destitute had doubled to 40%. Quite a miracle.
Pinochet did not destroy Chile's economy all alone. It took nine years of hard work by the most brilliant minds in world academia, a gaggle of Milton Friedman's trainees, the Chicago Boys. Under the spell of their theories, the General abolished the minimum wage, outlawed trade union bargaining rights, privatised the pension system, abolished all taxes on wealth and on business profits, slashed public employment, privatised 212 state industries and 66 banks and ran a fiscal surplus.
Freed of the dead hand of bureaucracy, taxes and union rules, the country took a giant leap forward ... into bankruptcy and depression. After nine years of economics Chicago style, Chile's industry keeled over and died. In 1982 and 1983, GDP dropped 19%. The free-market experiment was kaput, the test tubes shattered. Blood and glass littered the laboratory floor. Yet, with remarkable chutzpa, the mad scientists of Chicago declared success. In the US, President Ronald Reagan's State Department issued a report concluding, "Chile is a casebook study in sound economic management." Milton Friedman himself coined the phrase, "The Miracle of Chile." Friedman's sidekick, economist Art Laffer, preened that Pinochet's Chile was, "a showcase of what supply-side economics can do."
It certainly was. More exactly, Chile was a showcase of de-regulation gone berserk.
The Chicago Boys persuaded the junta that removing restrictions on the nation's banks would free them to attract foreign capital to fund industrial expansion.
Pinochet sold off the state banks - at a 40% discount from book value - and they quickly fell into the hands of two conglomerate empires controlled by speculators Javier Vial and Manuel Cruzat. From their captive banks, Vial and Cruzat siphoned cash to buy up manufacturers - then leveraged these assets with loans from foreign investors panting to get their piece of the state giveaways.
The bank's reserves filled with hollow securities from connected enterprises. Pinochet let the good times roll for the speculators. He was persuaded, as Tony Blair said this month in another context, "Governments should not hinder the logic of the market."
By 1982, the pyramid finance game was up. The Vial and Cruzat "Grupos" defaulted. Industry shut down, private pensions were worthless, the currency swooned. Riots and strikes by a population too hungry and desperate to fear bullets forced Pinochet to reverse course. He booted his beloved Chicago experimentalists. Reluctantly, the General restored the minimum wage and unions' collective bargaining rights. Pinochet, who had previously decimated government ranks, authorized a program to create 500,000 jobs. The equivalent in Britain would be a government program for 4 million workers.
In other words, Chile was pulled from depression by dull old Keynesian remedies, all Franklin Roosevelt, zero Margaret Thatcher. (The junta even instituted what remains today as South America's only law restricting the flow of foreigncapital.)
New Deal tactics rescued Chile from the Panic of 1983, but the nation's long-term recovery and growth since then is the result of - cover the
children's ears - a large dose of socialism.
To save the nation's pension system, Pinochet nationalized banks and industry on a scale unimagined by Communist Allende. The General expropriated at will, offering little or no compensation. While most of these businesses were eventually re-privatised, the state retained ownership of one industry: copper.
For nearly a century, copper has meant Chile and Chile copper. University of Montana metals expert Dr. Janet Finn notes, "Its absurd to describe a nation as a miracle of free enterprise when the engine of the economy remains in government hands." (And not just any government hands. A Pinochet law, still in force, gives the military 10% of state copper revenues.)
Copper has provided 30% to 70% of the nation's export earnings. This is the hard currency which has built today's Chile, the proceeds from the mines seized from Anaconda and Kennecott in 1973 - Allende's posthumous gift to his nation.
Agribusiness is the second locomotive of Chile's economic growth. This also is a legacy of the Allende years. According to Professor Arturo Vasquez of Georgetown University, Washington DC, Allende's land reform, the break-up of feudal estates (which Pinochet could not fully reverse), created a new class of productive tiller-owners, along with corporate and cooperative operators, who now bring in a stream of export earnings to rival copper. "In order to have an economic miracle," says Dr. Vasquez, "maybe you need a socialist government first to commit agrarian reform."
So there we have it. Keynes and Marx, not Friedman, saved Chile.
But the myth of the free-market Miracle persists because it serves a quasi-religious function. Within the faith of the Reaganauts and Thatcherites, Chile provides the necessary genesis fable, the ersatz Eden from which laissez-faire dogma sprang successful and shining.
Half a globe away from Chile, an alternative economic experiment was succeeding quietly and bloodlessly. The southern Indian state of Kerala is the laboratory for the humane development theories of Amartya Sen, this year's winner of the Nobel Prize in Economics. Committed to income re-distribution and universal social services, Kerala built an economy on intensive public education. As the world's most literate state, it earns its hard currency from the export of technical assistance to Gulf nations. If you've heard little or nothing of Sen and Kerala, maybe it is because they pose an annoying challenge to the neoliberal consensus.
This week, the international finance Gang of Four - the World Bank, the IMF, the Inter-American Development Bank and the International Bank for Settlements - offered a $41.5 billion line of credit to Brazil. But before the agencies hand the drowning nation a life preserver, they demand Brazil commit to swallow the economic medicine that nearly killed Chile. You know the list: fire-sale privatisations, flexible labor markets (i.e. union demolition) and deficit reduction through savage cuts in government services and social security.
Here in Sao Paulo, the public is assured these cruel measures will ultimately benefit the average Brazilian. What looks like financial colonialism is sold as the cure-all tested in Chile with miraculous results.
But that miracle was in fact a hoax, a fraud, a fairy tale in which everyone did not live happily ever after.
Gregory Palast writes the award-winning column, "Iside Corporate America" fortnightly in Britain's Sunday newsaper, The Observer, part of the Guardian Media Group, where this first appeared. For comments or request to reprint, contact: www.gregorypalast.com
http://www.igc.org/trac/feature/humanrts/history/palast2.html
It represents an excerpt from a Greg Palast book that was well worth reading.
It made sense then and foretold the future - failed economic policy.
This is where we're going.
Tinker Bell Pinochet and the Fairy Tale Miracle of Chile
The London Observer
Sunday, November 22, 1998
SAO PAULO - Cinderella's Fairy Godmother, Tinker Bell and Senator Augusto Pinochet have much in common.
All three performed magical good deeds. In the case of Pinochet, he is universally credited with the Miracle of Chile, the wildly successful experiment in free markets, privatisation, de-regulation and union-free economic expansion whose laissez-faire seeds have spread from Santiago to Surrey, from Valparaiso to Virginia.
But Cinderella's pumpkin did not really turn into a coach. The Miracle of Chile, too, is just another fairy tale. The claim that General Pinochet begot an economic powerhouse is one of those utterances, like "Labour's ethical foreign policy," whose truth rests entirely on its repetition.
Chile can claim some economic success. But that is the work of Salvador Allende - who saved his nation, miraculously, a decade after his death.
In 1973, the year the General seized the government, Chile's unemployment rate was 4.3%. In 1983, after ten years of free-market modernisation, unemployment reached 22%. Real wages declined by 40% under military rule.
In 1970, 20% of Chile's population lived in poverty. By 1990, the year "President" Pinochet left office, the number of destitute had doubled to 40%. Quite a miracle.
Pinochet did not destroy Chile's economy all alone. It took nine years of hard work by the most brilliant minds in world academia, a gaggle of Milton Friedman's trainees, the Chicago Boys. Under the spell of their theories, the General abolished the minimum wage, outlawed trade union bargaining rights, privatised the pension system, abolished all taxes on wealth and on business profits, slashed public employment, privatised 212 state industries and 66 banks and ran a fiscal surplus.
Freed of the dead hand of bureaucracy, taxes and union rules, the country took a giant leap forward ... into bankruptcy and depression. After nine years of economics Chicago style, Chile's industry keeled over and died. In 1982 and 1983, GDP dropped 19%. The free-market experiment was kaput, the test tubes shattered. Blood and glass littered the laboratory floor. Yet, with remarkable chutzpa, the mad scientists of Chicago declared success. In the US, President Ronald Reagan's State Department issued a report concluding, "Chile is a casebook study in sound economic management." Milton Friedman himself coined the phrase, "The Miracle of Chile." Friedman's sidekick, economist Art Laffer, preened that Pinochet's Chile was, "a showcase of what supply-side economics can do."
It certainly was. More exactly, Chile was a showcase of de-regulation gone berserk.
The Chicago Boys persuaded the junta that removing restrictions on the nation's banks would free them to attract foreign capital to fund industrial expansion.
Pinochet sold off the state banks - at a 40% discount from book value - and they quickly fell into the hands of two conglomerate empires controlled by speculators Javier Vial and Manuel Cruzat. From their captive banks, Vial and Cruzat siphoned cash to buy up manufacturers - then leveraged these assets with loans from foreign investors panting to get their piece of the state giveaways.
The bank's reserves filled with hollow securities from connected enterprises. Pinochet let the good times roll for the speculators. He was persuaded, as Tony Blair said this month in another context, "Governments should not hinder the logic of the market."
By 1982, the pyramid finance game was up. The Vial and Cruzat "Grupos" defaulted. Industry shut down, private pensions were worthless, the currency swooned. Riots and strikes by a population too hungry and desperate to fear bullets forced Pinochet to reverse course. He booted his beloved Chicago experimentalists. Reluctantly, the General restored the minimum wage and unions' collective bargaining rights. Pinochet, who had previously decimated government ranks, authorized a program to create 500,000 jobs. The equivalent in Britain would be a government program for 4 million workers.
In other words, Chile was pulled from depression by dull old Keynesian remedies, all Franklin Roosevelt, zero Margaret Thatcher. (The junta even instituted what remains today as South America's only law restricting the flow of foreigncapital.)
New Deal tactics rescued Chile from the Panic of 1983, but the nation's long-term recovery and growth since then is the result of - cover the
children's ears - a large dose of socialism.
To save the nation's pension system, Pinochet nationalized banks and industry on a scale unimagined by Communist Allende. The General expropriated at will, offering little or no compensation. While most of these businesses were eventually re-privatised, the state retained ownership of one industry: copper.
For nearly a century, copper has meant Chile and Chile copper. University of Montana metals expert Dr. Janet Finn notes, "Its absurd to describe a nation as a miracle of free enterprise when the engine of the economy remains in government hands." (And not just any government hands. A Pinochet law, still in force, gives the military 10% of state copper revenues.)
Copper has provided 30% to 70% of the nation's export earnings. This is the hard currency which has built today's Chile, the proceeds from the mines seized from Anaconda and Kennecott in 1973 - Allende's posthumous gift to his nation.
Agribusiness is the second locomotive of Chile's economic growth. This also is a legacy of the Allende years. According to Professor Arturo Vasquez of Georgetown University, Washington DC, Allende's land reform, the break-up of feudal estates (which Pinochet could not fully reverse), created a new class of productive tiller-owners, along with corporate and cooperative operators, who now bring in a stream of export earnings to rival copper. "In order to have an economic miracle," says Dr. Vasquez, "maybe you need a socialist government first to commit agrarian reform."
So there we have it. Keynes and Marx, not Friedman, saved Chile.
But the myth of the free-market Miracle persists because it serves a quasi-religious function. Within the faith of the Reaganauts and Thatcherites, Chile provides the necessary genesis fable, the ersatz Eden from which laissez-faire dogma sprang successful and shining.
Half a globe away from Chile, an alternative economic experiment was succeeding quietly and bloodlessly. The southern Indian state of Kerala is the laboratory for the humane development theories of Amartya Sen, this year's winner of the Nobel Prize in Economics. Committed to income re-distribution and universal social services, Kerala built an economy on intensive public education. As the world's most literate state, it earns its hard currency from the export of technical assistance to Gulf nations. If you've heard little or nothing of Sen and Kerala, maybe it is because they pose an annoying challenge to the neoliberal consensus.
This week, the international finance Gang of Four - the World Bank, the IMF, the Inter-American Development Bank and the International Bank for Settlements - offered a $41.5 billion line of credit to Brazil. But before the agencies hand the drowning nation a life preserver, they demand Brazil commit to swallow the economic medicine that nearly killed Chile. You know the list: fire-sale privatisations, flexible labor markets (i.e. union demolition) and deficit reduction through savage cuts in government services and social security.
Here in Sao Paulo, the public is assured these cruel measures will ultimately benefit the average Brazilian. What looks like financial colonialism is sold as the cure-all tested in Chile with miraculous results.
But that miracle was in fact a hoax, a fraud, a fairy tale in which everyone did not live happily ever after.
Gregory Palast writes the award-winning column, "Iside Corporate America" fortnightly in Britain's Sunday newsaper, The Observer, part of the Guardian Media Group, where this first appeared. For comments or request to reprint, contact: www.gregorypalast.com
http://www.igc.org/trac/feature/humanrts/history/palast2.html
Sunday, December 4, 2011
Saturday, December 3, 2011
Paul Craig Roberts: We have a republican party that is a Gestapo party
There is a bill in the Senate that is attempting to keep torture alive as an interrogation technique. The National Defense Authorization Act is being debated in Congress and if passed, American citizens could be detained without a court hearing anywhere in the world. President Obama stated he will veto the bill if it should pass. Is Senate Bill 1867 threatening the US constitution? Paul Craig Roberts, former Reagan administration official and columnist, gives us his take on the proposed bill.
And Massachusetts Senator Scott Brown supported this.
Friday, December 2, 2011
Global Efforts
Discovered on facebook, BirdLife offers information about efforts around the globe, like the one below --
From: Save our Seabirds (SOS) Festival 2011
This year, BirdLife South Africa’s Save Our Seabirds Festival tackled the issues of overfishing, pollution and habitat loss.
The Proudly South African band, Freshlyground, delivered a flashmob style performance at the V&A Waterfront in support of Birdlife South Africa and the Save Our Seabirds Festival.
From: Save our Seabirds (SOS) Festival 2011
This year, BirdLife South Africa’s Save Our Seabirds Festival tackled the issues of overfishing, pollution and habitat loss.
The Proudly South African band, Freshlyground, delivered a flashmob style performance at the V&A Waterfront in support of Birdlife South Africa and the Save Our Seabirds Festival.
Subscribe to:
Posts (Atom)
