Notes of an Oppositional Intellectual

On Becoming Terrorists

2013-05-04T05:25:00.000-04:00

I've been stunned since hearing about the FBI adding Assata Shakur to the FBI's most wanted terrorist list, and I have taken a beat before writing about it. I am probably not alone in feeling like this is watershed moment. Or maybe it's not. Regardless, it is extremely illuminative. I'm not going to rehash the excellent comments and critique of others here: see for example Angela Davis' remarks on Democracy Now and Joseph Lowndes' blog in the Huffington Post. I am particularly drawn to the connections these scholars are making between the labeling of leftist activists, revolutionaries, and organizations as "terrorists" alongside the dismantling of civil rights (such as the right to a trial) in cases of "terrorism."

I think this announcement about Assata Shakur is part of a project that will ultimately lead to rendering the terms/positions/figures "leftist" and "terrorist" as synonymous. As Davis argues on Democracy Now, the state is making this move to terrorize all activists fighting for structural societal change and to intimidate others away from becoming such activists.

But I want to make another connection as well, about the ways in which we can read this move alongside the defunding and destruction of leftist intellectual hubs - i.e. universities, and, in particular, humanities and social science programs (especially programs like History of Consciousness at UC Santa Cruz) that are not coincidentally where the preponderance of students and scholars of color can be found - as part of a project to limit student access to education about subjugated knowledges/histories, to limit the production of radical intellectual thought through the lack of resources available to grad students and non-academic/non-tenure stream intellectuals, and to ultimately brand all leftist/radical academics who (for now, at least for some, due to things such as tenure, are somewhat protected and legitimized) as terrorists, proto-terrorists, or terrorist allies.

Think about all of us with our PhDs in the humanities, now and several years down the line, who have or will have little to no access to protected speech, job security, and - perhaps mostly importantly in terms of waging ideological wars - legitimacy and status. Now, I am not talking about status in the sense of boosting our little or already overly-inflated egos, but the very real kinds of political capital, work/financial security, and cultural power that still, at least to some extent, gives the few remaining tenured/tenure-track professors some sort of leverage and legitimacy in sites such mass media. And alternative media. The two links I give in the first paragraph of this post could be considered routine examples.

Those of us outside the university, outside the tenure-stream, as well as those of us on the "inside" who are now and will increasingly be subjected threats to the security that those positions supposedly provide, need to remember - even though it is difficult to do so in the throes of un/underemployment, dismal prospects, excessive work (and/or the possibility of being abandoned back in to that illustrious precarious pool) - that what is happening in universities today is not just about our roles as academic laborers. In fact, if anything, the dismantling of tenure and programs has had the effect of elevating and focusing our identifications as laborers under capitalism rather than as intellectuals invested more broadly in a public/communal "good." And thus, many of us find ourselves in the precarious position of un/underemployed perennial debtors peddling unwanted educational wares whom the state will have little difficulty labeling as deadbeats, wingnuts, troublemakers, and, yes, terrorists.

And there will be nowhere in the world for us to escape. This, for me, is the "message" I am getting from the FBI and State of New Jersey's addition of Assata Shakur to the terrorist list and the doubling of the bounty on her head to $2 million, which, as Shakur's lawyer observes, gives carte-blanche to everyone in the world to track her down and abduct or murder her.

Sustainable Living and the Abandonment of the Dollar: Food

2011-10-27T04:09:00.007-04:00

After air and water, the third most basic necessity for living is food. In today’s service economy in the US, alienation from land and the growing of food is common. Only a small percentage of the population grows any of their own food, with the supermajority relying on purchasing food with dollars at stores, where most of the food (processed and fresh) has been shipped over 1,000 miles before arriving on the shelves.

This is far from a sustainable method of living. Such large-scale distribution of food uses up a lot of oil, both in terms of the gasoline required for trucking and the plastics used in most processed/packaged foods.

In addition, this system has several serious flaws. The “just-in-time” method of inventory management used by most stores means large scale disruptions of the food supply to one’s local area is possible should any disaster occur, as Hurricane Katrina in New Orleans and the recent earthquakes and tsunami in Japan have demonstrated. And, longer term, rising oil prices (and the likelihood of continued increase in prices over the long term as the days of cheap fuel are probably over for good, absent highly short-term gluts of supply) mean inflation in the cost of food in the current distribution system is a given even before factoring in Ben Bernanke’s inflationary monetary policies.

And I haven’t begun to calculate the ancillary costs of damage to the environment in general and arable land in particular from centralized distribution practices of moving mass-produced food across long distances. Shortages of food due to droughts, the ongoing loss of arable land, and new crop diseases thanks to genetic modification of crops certainly won’t help to keep food prices low.

In other words, the cost of the current food production and distribution system will at some point become prohibitive, assuming the unsustainable practices of big agribusiness even produce enough food over the long term for the current distribution system to function.

TOWARDS SUSTAINABILITY

Given the above scenario, as well as my goal of abandoning the dollar, I decided that there is no better time than the present to look for and/or start building alternative systems of sustainable food production and distribution. I also look at taking steps toward sustainable living as an effective anti-poverty measure, as food, after housing, tends to be one of the most costly budgetary items in household finances in the US.

Taking on the project of sustainable living has certainly involved a making a number of significant changes in how I live my life, but perhaps not quite as many as one might think. I grew up in the suburbs of Los Angeles, and since then have lived entirely in big cities. A lot of writing about sustainable living focuses on farm life. But I have no desire to simply follow the plans of others. I love cities and have no desire to give them up, and I do not believe that I have to buy a farm and move out to a rural location to live a sustainable life. Instead, I try to focus on what I have to work with and seek creative solutions when faced with a problem of urban dwelling. Everyone has different needs, circumstances, resources, etc. I am working with what I have got.

So, while for some moving to a more rural location might be what works for them, I moved from one big city to another, on the same continent, but from west to east, and to another country. One big part of my goal to abandon the dollar was leaving the US, but that is certainly not a necessity, nor does simply moving to another country with a different currency solve the problem. Every currency in the world is tied in some way to the dollar. So when I speak of abandoning the dollar, I don’t just mean US dollars, I mean all currencies.

Living in a large city and having to pay rent on a flat, I am not yet able to fully abandon the dollar. I think of it as a process. But one of the easiest changes I can make in my life, I have found, is to makes changes regarding how I produce and acquire the food that I eat. Thus far, my partner and I have taken the following steps:

* Get involved in a nearby community garden

* Start growing food in the backyard

* Bartering food with friends and neighbors who also grow their own food
* Avoid purchasing packaged food as much as possible

* When purchasing food, buy local

I want to talk in detail about each of these options, but this post is already getting long, so I will address them in new posts in the near future.

But for now, suffice it to say that when fruits and vegetables don’t have to travel thousands of miles before we can buy it at the store, they are very fresh, taste better, provide greater nutritional value, and also last longer before going bad (leading to less waste). Such approaches are also helping us to foster local economies and provide us with significantly better quality of food.

In addition, these simple steps allow us reduce our dependency on the dollar, all the while keeping us well fed on a significantly smaller budget than we had while living unsustainably in the US. When we do go to the store, local, organic foods are largely priced less than conventional foods shipped from far away, and buying bulk goods (stored in jars we bring from home) reduces dollar costs and use of plastic as well. Of course, eating food from the backyard or community garden costs very little in dollar terms, with only minor increases in labor.

All of this has also enormously reduced our trash output. With less packaged food due to gardening and bulk purchases, we have noticed a significant reduction in both our trash and recycling. I'd love to get to the point where we produce zero trash and recycling, either reusing or composting (which can go right bank into the gardens) all of our waste, but this is a process and we aren't there yet.

Just a few years ago I never would have even considered spending a significant amount of time thinking about or putting into practice steps towards sustainable living. This is one bonus in our lives that has come from the decline of the US economy. My partner and I never considered trying to do without the dollar before, and felt trapped in almost manic, fearful, career-focused lives. Our first step was determining that we actually didn't want to live our lives around work; we wanted work to supplement our lives.

By focusing on meeting our basic needs rather than an endless black hole of consumerism and wealth accumulation, we began radically changing the way we live day to day. My partner has even changed "careers" and now works in local, organic food distribution, which has obviously become one of our greater interests. Until we can abandon the dollar all together, at least we are working to support local economies and food networks. As well, after rent and other basic necessities, we are looking for every opportunity to convert dollars in to goods that help us toward living a renewable and sustainable lifestyle. For example, rather than saving toward a new iPad (which I know I would love), I prefer instead to save for solar panels.

Sustainable living doesn't have to require moving to the countryside, nor does it have to involve some sort of anti-technology fantasy of living like long-dead ancestors. It is about living within our means with the resources in our immediate vicinity: finanancially, energy efficiently, in a way that helps rather than hurts those around us, and without endless damage to the earth itself. Sustainable living literally feeds us, the 99% percent, and, in our eschewing of the dollar as we meet our basic needs, we starve the rich of the very same dollars they endlessly desire to accumulate from our former patterns of consumption.

Abandon the Dollar Through Sustainable Living

2011-10-19T22:02:00.013-04:00

In my last piece, I argued that the most effective way to counter globalization and the dominance of the ultra-rich/banking elite over western politics and economic policies is to abandon the dollar. Today I want to talk about how I am working towards this goal in my own life.

I start with the premise that most of the people in the US and the so-called "developed" world - where "developed" refers not to industrialized-turned-service economies, but rather to imperial regions that use wealth and power to foster unconstrained consumption of goods and resources - live an almost entirely unsustainable lifestyle that has enormous hidden costs, of which said people are largely unaware. The emergence of modern colonialism and imperialism that began over 500 years ago set the stage for the contemporary abuse of global labor and resources that is necessary to sustain a "normal" way of life in the "developed world."

One of the legacies of colonialism that still persists today is the former colonizers' exploitation of the labor and resources of the former colonies, which often depends on racist exploitation of the white/colonizer of people of color/colonized, and that continues to hide the true cost of the electricity, oil/gas, food production, and consumer goods necessary for so-called "first world" lifestyles. By "true cost," I refer to both the reduced dollar costs of goods that stems from the exploitation of cheap labor and the transfer of resources in certain parts of the world (former colonies) to others (the former colonizers, who command the resources with less than adequate compensation, or with outright harm, to the locals), as well as the cost to the earth itself, such as global warming, toxic waste, disappearing non-renewable resources. I also describe it as the cost to younger and future generations of the entire world who will suffer (are suffering?) from the consequences of the rabid consumerism of the "developed" parts of the globe over the previous decades.

THE UNSUSTAINABILITY OF MODERN USAGE OF NATURAL RESOURCES

Reflecting back on my childhood, I have come to the inevitable conclusion that I was born and raised in a place in the world that should never have existed, and that this place is emblematic of the structural problems and failures of the entire so-called "developed" world. Where was I raised? The suburbs of Los Angeles.

As a high school athlete, almost every day I ran down the wide, grassy median of a large boulevard (4 lanes in each direction) where long ago the old cable car rails, the original public transportation option of the greater Los Angeles area, had long ago been torn up at the behest of the US auto companies, essentially forcing car ownership on the large population. By ripping up the extensive cable car lines decades ago and encouraging car use, Los Angeles has a tremendous dependency on cheap oil and suffers from toxic environmental conditions because of the cars (like smog), despite more recent initiatives to increase public transportation options, such as the metro subway.

In essence, Los Angeles is like most of the US where urban sprawl has become the norm and lower population density of suburbs combined with poor public transportation options leaves much of the region highly dependent on cars and thus on gasoline. But that is not the only way that the region consumes oil. Most fertilizers used by the big agribusinesses are produced from oil, as are plastics in cars and other consumer items. In other words, Los Angelinos, along with most of the "developed" world, cannot function and nor can its people live without oil. Cheap oil.

But oil is a finite natural resource, even thought it has yet to be priced as one, especially in the US which both subsidizes the production of oil and fights seemingly endless wars to establish control over what is left of the world's oil supply, in order to ensure the very cheap availablity of oil in the US. And yes, I do mean to say that, even with the recent large increase in the price of gasoline, oil still sells at a vastly reduced price to its true value in terms of the amount of the resources that remains, as well as the actual increasing costs of production as most of the easily acquired, high quality oil that was originally in the ground is now virtually non-existent. In other words, oil is and has always been priced based on short-term supply and demand, and not on the very high, long-term demand and its very low, long-term ability to be supplied. We can currently see some of this price distortion in the market prices of "Brent crude," which supplies most of the world and today trades at $108, and "West Texas Intermediate," which mostly supplies the US and today trades at $86, a $22 per barrel difference.

Now, on the internet there are endless numbers of articles on "Peak Oil" - the idea that the pinnacle of discovery of new oil reserves has passed and that levels of oil production have already peaked and are now on the decline - and I have no desire to repeat them (or the debates about whether peak oil theories are correct). The bottom line is that no matter how much oil currently exists, we have been using it up rapidly and at some point there will either be none left, or what is left will be so expensive as to render its use untenable for most of the vast and common consumption of today.

Whether or not this occurs in my lifetime (very possible), or in the next hundred years, this day is coming sometime in the not so distant future.

The way most of the people in the US and other "developed" economies live is utterly unsustainable and far from renewable. From consumer goods to electricity supplies to food production to cars to (in many places) water supplies, most of us are living way beyond our means, both economically and sustainably.

SUSTAINABLE LIVING AND THE ABANDONMENT OF THE DOLLAR

I have focused on oil thus far because it is so essential to modern life. But it is certainly not the only resource we are squandering, it is just the most obvious. It is also an easy resource to use as an example to illustrate the way the dollar is central to unsustainable living practices and the ways the ultra-rich/oligarchs maintain global power by control of the dollar.

The US dollar is also sometimes referred to as the "petrol dollar" because of its convertability into oil. As the world reserve currency, the dollar is the medium of exchange through which essential commodities like oil are traded. In other words, what has traditionally been the case is that if a country wished to purchase oil in the global marketplace, that country needed to do so with dollars. This ties virtually every currency in the world into the dollar and assures the dominance of the dollar over most other currencies.

As long as dollars are required to purchase essential goods and services, much of the world is virtually held hostage by the dollar. The pursuit of life becomes the pursuit of the dollar. Now, challenges to the dominance of the dollar are happening globally in many ways (such as Russia and China making a deal do to all trade in their respective currencies). But if a new currency, like the Chinese yuan, simply replaces the dollar as the world reserve currency, the system won't really change, it will just have slightly new masters (or, really, many of the same masters who will be sure to position themselves in the "right" way during a transition to a new currency regime).

It is through the dollar and the oil that it buys that we consume virtually everything in our lives. Oil powers cars, buses, planes, and everything else with motors. It is used in the form of plastic in a lot of what we buy. It provides fertilizers to agribusinesses that grow most of the food supply and, without which, a large percent of the world's food would disappear. It also fuels the transportation of most food and goods over vast distances nationally and internationally, as very little of the food on the shelves of most grocery stores contain locally produced products, with fresh and packaged foods alike often travelling thousands of miles before we pick them up at the grocery.

Thus it became obvious to me that the first step in abandoning the dollar is reducing and then eliminating my dependence on oil and its byproducts, and that living my life with the consumption of only sustainable and renewable food, goods, services and resources is necessary to achieving my goal.

WHERE TO START?

The most obvious initial move to make to reduce my dependency on oil is to give up any idea I may have of owning a car again (I haven't owned one for almost six years now). Cars, in their current form, are just outright unsustainable products. If one day the solar car, or some other entirely renewable-powered automobile, becomes a reality, I may reconsider. But for now, cars are out and walking and bicycles are in. Buses are also a great harm-reduction tool for transportation.

I have also started by trying to learn everything I can about where the the goods and services that I need to live come from. I am beginning with the basic necessities: food, water, electricity, gas, and transportation.

It is important to emphasize though that there is no simple or fast way to go about this. I have only really just begun.

But as I argued in my previous post, if I am hoping to truly change the system in which I live, mere protesting will not be enough. I have to completely change the way I live, and work to make it possible and simpler for others to change the way they live as well.

The crony, corrupt capitalism of the contemporary US thrives on unsustainabilty. Through planned obsolescence, cheaply made products, and perhaps especially genetically modified crops, capitalism depends on unsustainabilty and the necessity of replacements to operate. Food crops should be one of our best and most easily sustainable/renewable resources. So many foods contain the very seeds that should be able to produce the next crop, and the one after, etc, etc. But companies like Monsanto, which now provide the seeds for much of the world's food, have specifically modified the seeds to produce foods whose seeds cannot be used for planting the next season's crops.

Like Monsanto, every capitalist corporation doesn't want to sell to us just once. They want to sell to us for a lifetime, and they don't care what finite resources they consume, or the ecosystems they disrupt, in the near term to sell as much as much of their products as possible.

By abandoning the dollar and living sustainably, we can disrupt the capitalist system by removing our dependency on the dollar to purchase all our necessities, as well as our dependency on the goods and services the capitalist system produces from non-renewable resources. Living sustainably could even help us leave the system altogether.

Want to Truly Occupy Wall Street? Abandon the Dollar

2011-10-18T03:17:00.009-04:00

Everybody is talking about the #OccupyWallStreet protests. I couldn't be happier that people are finally talking about and understanding that the US, as well as Canada and the Eurozone, have been taken over by a small group of oligarchs/plutocrats (the ultra-rich 1%) who are institutionally represented by the giant "too big to fail" banks, multi-national corporations and media conglomerates, all the branches of government and the not-so-public central banks (that are largely owned - literally - by the big private banks), such as the ECB and the Fed. It is a great time to move beyond the myth of the middle class and recognize that, today, we are the 99% fighting against the top .1%-1% who control most of the capital and power.

The protests are certainly a great way to express outrage and demand a change to the corrupt status quo, and they are more likely to grow in size than to go gentle into that good night. But what else can we do? It hardly makes sense, for example, to spend the day, evening, week, or months protesting and then go home and resume participation in a rigged, globalist system by keeping our money in the top five US banks that control over 70% of US deposits, working long hours - if we are lucky enough to have a job with real unemployment hovering around 23% - to earn paper (fiat) dollars that the oligarchs are intent on debasing in value. And for what? All so we can pay rent/mortgage and purchase essentials in an unstable and unreliable marketplace mostly dominated by the large multinational corporations that have spent the last 30 years exporting jobs overseas.

So, what can we do? The answer is as simple as it is difficult to execute. We don't need to only fight and protest to end globalization and the complicitly corrupt political and economic spheres in which we live.

We can leave the global enterprise. Drop out of the system.

The ultimate answer to globalization is radical localism.

RADICAL LOCALISM AND THE ABANDONMENT THE US DOLLAR (AND OTHER FIAT CURRENCIES)

Radical localism begins first and foremost with the goal of abandoning the US dollar, and/or whatever paper government currency dominates the region that you live in.

The US dollar, as the world reserve currency, is the primary means through which the oligarchs assert and maintain their power. I was indoctrinated from birth that money makes the world go round, and that access to money is a requirement to live. This has been largely the case throughout the US, as the previous hundred years or so, and especially the last three or four decades, has seen the US move from having a significant agrarian economy to a more non-productive service economy, led by political and economic policies that have largely destroyed small and family farming.

As far I knew when I was growing up, food came from the grocery store and was purchased with dollars. My father and mother went to work every day to earn dollars. I quickly learned when I went to college that I needed dollars to pay tuition, rent, utilities, restaurants and grocery stores. Dollars, for most of us, are the medium of exchange through which we acquire almost everything we need or want. And thus, finding ways to make, earn, and/or acquire dollars became a necessity for the very act of living.

And I still do rely on dollars to a certain extent, even though my goal is to abandon them altogether. It is not easy to do without them, by desire or necessity, when almost all the networks, markets, exchanges, and systems require them as a condition of their functioning. This is the social, political, and economic trap most of us find ourselves in.

WHAT WILL IT TAKE TO MAKE THE DOLLAR OBSOLETE?

What will it take to make a life without the dollar but still be a part of my local community? I can talk about gardening, bartering, credit unions, solar power, collecting rainwater, bicycles, etc. All of them are important and contribute to my goal. But nothing will really change as long as almost all of us are still dependent on the dollar.

The fact is that I can't do it on my own. I have to do it as a part of a community, or at least with other consenting adults who live nearby. Even with a strong, organized movement it won't be easy.

Radical localism encourages building local networks and communities to create new methods and mediums of exchange and collaboration. It won't do any good for me to decide on my own to abandon the dollar if payment is demanded only in dollars for everything I can't provide for myself and my family.

I need other people, movements, numbers, and not only to have an easy and workable alternative to a monetary economy. There are people and institutions - the oligarchs, corporations, banks, and governments - who want to see anything happen but a wholesale abandonment of the system. They want profits, control of our capital, and taxes. They would so much rather we just protest. They are experts at ignoring protests, no matter how disruptive they are. And if they can't ignore them, they'll agree to get rid of some figureheads, as what happened with Mubarak in Egypt, and spend their time orchestrating replacements who will continue to maintain enough of the status quo to satisfy the oligarchs.

CLOSING BANK ACCOUNTS AND ENGINEERING INVOLUNTARY CUSTOMERS

One recent protest that is gaining momentum is a mass closure and withdrawal of funds from accounts at the major banks. This is certainly significant and worth doing as there is no sense in supporting them. But I question whether or not the banks and the government didn't already expect and plan for this. Bank of America and the other banks, for example, who recently instituted a $5 monthly ATM fee, were certainly not oblivious to the fact that they may lose a lot of clients when they added the fee (even if the banks hoped to avoid huge losses by instituting the fees at the same time).

I suspect they have planned all along to replace these voluntary clients with involuntary customers. How does the government force people to become customers of the big banks? By giving the banks sweetheart, exclusive contracts to distribute government benefits through debit cards backed by mandatory, individual accounts.

Lose your job (or have a baby or a disability)? If you want unemployment in California, the state government no longer sends you a check. They have Bank of America send you a debit card. Poor and hungry, like 45 million others in the federal food stamp program? Congratulations, in more than half the US states you are now a customer of JP Morgan Chase. To add insult to injury, JP Morgan is helping to continue to ensure record unemployment by exporting all of the labor for this new program overseas.

The big banks are not going anywhere, no matter how many customers they lose, when they have gained 10s of millions of customers just this year through these contracts. These government programs make sure that those most vulnerable in the economic system remain entirely dependent on it, and on the dollar. And I am not talking about the kind of dollar that consists of green ink on special paper. I am talking about digital dollars, the dollars in a bank account that exist solely as a number called "balance" on the computer screen. Dollars that the government and banks control access to. Both the government and banks can keep a record of exactly what recipients purchase with those digital dollars, creating numerous privacy issues, as well as conditioning millions to no longer think of paper bills as dollars, but electronic/digital/virtual dollars as dollars.

TWO VISIONS OF A CASHLESS SOCIETY

What I have presented here are essentially two contrary visions of a cashless society: one in which the government institutes and maintains a society in which the large banks are the gatekeepers of a cashless society built on credit and debit cards, and another in which the 99% collectively abandon the monetary system altogether.

My goal to leave the dollar behind will not happen overnight. But I/we can start now on establishing new networks and communities that operate outside, and alongside, the current monetary system. As these networks grow, hopefully they can fulfill more and more of our essential needs until we no longer have any reason to use the dollar at all.

This would be a true revolution.

Ben Bernanke's Deflation Hysteria Is Our Nightmare

2011-10-02T03:23:00.012-04:00

Ben Bernanke, the head of the mostly non-governmental agency known as the Federal Reserve, worries a lot about deflation. He says things like this constantly:

"If inflation falls too low or inflation expectations fall too low, that would be something we have to respond to because we do not want deflation."
- Reuters

In other words, if the prices of goods and services aren't increasing much, or they start to decrease, Bernanke says he would have to act. What would he do? He would act to create inflation, lest the dreaded D-word (deflation) take over.

But is deflation really a bad thing? Turns out it depends very much on your perspective. It's really not great for the rich, who see their stocks and other investments decline. But there are actually quite a few positives for almost everyone except the filthy rich.

Deflation occurs in an economy when prices for almost every thing continue to fall over a long period of time. If you listen to Bernanke, deflation seems to be the worst thing that could ever happen, and he makes it clear he will do anything to avoid it. Anything, including destroying the value of the US dollar and wiping out the entire middle class in the process.

So, what is deflation and why is it so important to avoid, even at such high costs as wiping out the savings of millions? Well, deflation can cause some pretty hefty damage to some groups of people. Right now in the US, perhaps the biggest area of the economy that is facing long-term deflation is home prices. This has been a disaster for homeowners, as well as for the banks that made loans to the homeowners. (It has also caused catastrophic damage to many kinds of financial institutions, from JP Morgan to AIG, that were in the business of creating leveraged derivatives - most of which, it turns out, were fraudulent investments - based on these home loans the banks made, putting the entire US economy at risk, but that is a whole other story.)

However, while the housing market can collapse in a truly deflationary economy, so too usually do the prices of a whole host of other goods and services. For example, rents, food, beverages, transportation, clothing... just about anything that is essential for daily living. This means that daily living expenses go down for most of the population. So when we look at the effects of deflation overall, what really becomes clear is that deflation actually isn't bad for everyone. It may be bad in some ways for homeownvers, it is really bad for people who are invested in the stock market and who own a lot of property. But for the majority who own little to no property and who don't have a lot of financial assets (I'm talking about people who aren't very rich), it turns out a deflationary economy can actually be quite beneficial.

Bernanke and other "noted economists" frequently invoke Japan as a model of the disastrous consequences of deflation. But a recent article on ZeroHedge explains the benefits of deflation quite well:

In 1996, seven years after the Japanese bubble burst, I arrived in Tokyo for the first time and saw a shockingly expensive country... Item after item. Plain white T-shirts made in Japan, $30. Rent for a dingy 200 sq. ft. apartment in a lousy area, $1,500 a month (plus 3 months key money, plus 2 months deposit, plus 1 month rent up front, for a total upfront payment of $9,000). Public transportation, food, fuel, hotels (except love hotels), coffee, you name it. Everything was shockingly expensive...
Now the $53 bottle of Chianti costs $8, and a Chinese-made T-shirt cost $5. Rents have come down, and new apartments are bigger and nicer. Food is cheaper, and so are meals at restaurants. Unemployment is under 5%. Wages have come down too, but not much. Infrastructure has improved. Subway and train lines have been added, extended, or four-tracked, and rush-hour trains are less crowded. Trees have been planted. Tokyo is cleaner and greener. Savers and bond investors haven't gotten ripped off by inflation.
-Wolf Richter

Inflation in 1980s, due to a roaring stock market and bubbles in almost every aspect of the Japanese economy, made life in Japan extraordinarily expensive, especially on those who lacked jobs that gave regular and substantial wage increases to keep up with exploding prices. When deflation arrived, however, salaries did decrease some, but the drop of prices of goods and services more than made up the difference. In addition, without inflation eating away at the value of cash savings, every day people were actually able to save and see their savings grow, which is important for everyone but in particular for the elderly who tend to depend on savings for their retirement.

Inflation, on the other hand, tends to see the value of wages and savings shrink as the prices of essential goods and services rise. If last year a tomato cost $1, but this year one tomato costs $2, that $100 dollars you saved isn't going to buy as much as last year. Inflation, even so-call "mild inflation," disproportionally hits everyone who spends a large amount their paycheck on rent/mortgage, food, clothing, transportation, etc. This group is comprised of 95-99% of the people of the US: the middle class, working poor, unemployed. People of all races but especially people of color who currently have as much as four times the uneployment rate of their white counterparts. Families with single or dual heads-of-households who struggle more and more every year to make ends meet.

This is no accident. The "mild" inflation of the last three decades has has destroyed the purchasing power of the wages of more than 90% of the population. If you feel like your salary doesn't stretch as far as it used to, that is probably because you are living in a world where, essentially, you have a 1969 salary and 2011 prices for everything at the mall and grocery store (this is what economists refer to as "real wages": the value of your wages in terms of how much they can buy rather than the actual dollar amount, which may increase). You are also not alone. Today more than 1/6 of the US population (over 45 million people) are on food stamps.

So, when Bernanke and other officials talk about the need to fight deflation at all cost, and the necessity of engineering inflation, whose interests are they really trying to protect? It sure isn't yours or mine.

When a Chimpanzee Is Not Just a Chimpanzee

2009-02-19T18:38:00.001-05:00

Protests and outrage abound today in response to the New York Post’s publication of Sean Delonas’ cartoon featuring two policemen shooting a chimpanzee.

In response, New York Post editor-in-chief Col Allan denied the cartoon was racially charged and suggests that critiques of the piece are outlandish by associating protests with the “publicity opportunist,” Al Sharpton:

The cartoon is a clear parody of a current news event, to wit the shooting of a violent chimpanzee in Connecticut. It broadly mocks Washington’s efforts to revive the economy. Again, Al Sharpton reveals himself as nothing more than a publicity opportunist.

Allan’s defense of the cartoon, however, is specious at best, instead mostly reflecting the same racism and ignorance as Delonas’ drawing. By invoking Al Sharpton, the radical and presumably non-credible African-American civil rights figure, as the face of protestations against the cartoon, Allan rather blatantly suggests that anyone who thinks a chimpanzee is more than a chimpanzee is a lunatic.

But, in reality, Delonas’ cartoon represents at least two iconic, racially charged scenes:

* the depiction of African-Americans as ape-like, and
* images of white policemen beating/shooting/lynching African-American men

A Short History of the Representation of African-American’s as Apes

In the late 1800s and early 1900s, cartoons and other imagery depicting African-Americans (as well as Irish and Italian immigrants) with ape-like characteristics became commonplace.

The root of the emergence of these images seems to be a direct response (and refiguring of a dominant, racist paradigm) to Charles Darwin’s theory of evolution in On the Origin of Species (1859) and other scientific theories of monogenism (the idea that races—balck, white, and others— have a common, rather than distinct, ancestral origins are thus part of the same race).

The image to the right lampoons, and thus reflects, popular white racial anxieties about apes as ancestors to human beings by joking that the ape would be embarrassed to have Darwin for a descendant.

Challenged by strong scientific evidence to the contrary, racist ideologies that presumed the superiority of whites over blacks and other on the basis of a literal differentiation of races (i.e., that blacks were not actually a part of the human race) gave way to new, evolutionary-friendly paradigms that place whites at the top rung of an evolutionary ladder.

As the cartoon to the right depicts, this new paradigm envisions white, heterosexual men as the pinnacle, exemplary figure of the human, with women, homosexuals, and other races such as blacks and the Irish positioned as less developed and thus closer to the ape origins of the species. In the early 1900s in particular, alongside the development of the theory of eugenics by Darwin’s cousin, Francis Galton, such images of African-Americans with ape-like features were common.

Allan, the Post editor, seems to suggest that in 2009 a chimpanzee is just a chimpanzee and that, even if there is a legacy of representing African-Americans as monkeys, he and Delonas were unaware of it and shouldn’t be held responsible for it.

I believe, however, that such arguments are disingenuous if not outright lies. This racist imagery is an indelible part of the US cultural consciousness and historical legacy. It doesn’t matter whether or not Delonas was directly thinking about the history of the representation of African-Americans as apes when he drew the cartoon. We as viewers and citizens can only see his drawing in this cultural context.

And, given that we have a newly elected black president who was the leading proponent of the stimulus bill, reading Delonas’ cartoon as a racist depiction of the violent slaughter Barack Obama is anything but outlandish.

Crash: On the Likelihood of Outlier Events

2009-01-05T19:42:00.001-05:00

A fascinating article on "Risk Management" in The New York Times has got me thinking.

The article traces the origins of a standard risk management models in the financial sector, known as Value-at-Risk (VaR), and why they failed to predict possibilities that caused the current economic crisis, such as bank under-capitalization and massive derivative losses due to sales of "insurance" on mortgage-backed securities (also known as credit-default swaps).

Would you fly on an airline that had a 99% track record of the flight arriving safely? What if only 1% of their flights crashed? The airline would be out of business. After all, 1% is just one out of a hundred, which, in the grand scheme of things, is not that rare at all, especially when there are millions of potential opportunities to hit that 1%.

So, what is an acceptable risk when we book a seat on an US carrier? Apparently it is somewhere around .000223% (or roughly 2 out of one million).

What seems apparent is that psychology has everything to do with how we perceive risk. As the author of the Times article sums it up: "People tend not to be able to anticipate a future they have never personally experienced."

People who live on the Gulf coast have experienced a lot of hurricanes. So, mostly, they likely feel like they know how to handle them. Until an outlier like Katrina arrives.

Millions use bridges or rely on levees every day to live in and move about their home region without much thought to their failure, despite decades of warnings about aging US infrastructure from the Army Corps of Engineers, until the Minnesota bridge collapsed and the New Orleans levees broke.

To a traveler who only takes two flights each year, a .000223% chance of crashing seems very likely to not occur, although every time the flight hits turbulence that traveler is probably thinking about the possibility of crashing. Even more so, the airline employees who schedule hundreds of thousands (or even millions) of flights each year know that an accident is a virtual inevitability-- though even they weren't fully prepared for an outlier like 9/11/2001.

Any mother who is told there is 1% chance her unborn child will have a serious genetic disease probably thinks that is way too much risk. A doctor who sees thousands of patients a year knows she will eventually have a patient who suffers from the rare disorder and is going to take a 1% risk seriously.

But apparently a 1% or so chance of a series of events that at some time in the future could cause serious economic carnage was routinely ignored as the financial industry made billions for years, assuming that housing prices only move one way: up. Granted, there would have been a high price for any corporate officer who warned of the possibility of huge losses in credit-default swaps, a concept hedge fund manager Jeremy Grantham labels "career risk":

It’s what I call the Goldman Sachs Effect: Goldman increased its leverage and its profit margins shot into the stratosphere. Eager to keep up, other banks, with less talent and energy than Goldman, copied them with ultimately disastrous consequences. And woe betide the CEO who missed the game and looked like an old fuddy-duddy. The Board would simply kick him out, in the name of protecting the stockholders’ future profits.

Everybody else was doing it. And the VaR models continually affirmed little risk. In fact, significantly less risk than most other assets. Since, as the Times article lays out, most of the models only measured very short term risk and the long term models usually only drew on data from the previous two years, the more housing prices rose, the less likely the risk seemed that they would fall. In the end, the VaR models proved fairly useless in predicting the systemic collapse that occurred before it was too late.

Thus one insurance company, which is in the business that mastered the actuary table, managed to sell over $400 billion worth of un-hedged credit-default swaps (plus g-d knows what else) and has cost the US taxpayer over $150 billion. So far.

Let's not mention all the other financial institutions that have to date cost over $300 billion. Or the fact that none of the financial sectors' shareholders, employees, and managers will have to pay back the billions they pocketed over the past five years.

A Note on My Methodological Approach to Blogging

2009-01-04T04:39:00.002-05:00

Having only recently begun this blog, I feel compelled to discuss my reasons for founding and writing in it. After all, with millions of blogs, news sources, and other sites available to readers (at least while net neutrality still exists), I am probably not alone in wondering what original content I have to offer.

More...
In considering this question, I looked at blogs I admire, such as FiveThirtyEight, and what I saw were clear and consistent methodological approaches to the topics they cover. FiveThirtyEight applies the skills of sports statistician fanatic Nate Silver to election polling/vote counting and other political topics. As such, what both blogs have in common is that the writers have particular skills and knowledge that they can combine with readily available information to produce unique and valuable perspectives on timely issues.

So the question then becomes, what particular skills and knowledge do I have to offer? This is a question I have been spending some time considering as I ponder new directions in my life. But no matter what, I want to bring to bear the skills and knowledge I have obtained from my academic training to whatever I choose to do.

I earned a PhD in the humanities from one of the top programs in the US. The value of humanities training tends to be widely underrated and undervalued, often due to its lack of reliance on quantitative analysis and empiricism (the traits most highly valued of the sciences and, to a lesser degree, the social sciences). But, of course, what the humanities do offer are methodologies for studying qualitative data and intangibles such as "media," "culture," and "texts."

Perhaps the most important, fundamental value I have internalized from my academic training is to never rely on what others have to say about a given "thing" (i.e., a film, a book, a speech). If I am interested in a topic, I want to go to the source (or "primary text") to find out details that others may not find to be significant as well as to learn more about the original context.

An obsession with primary texts. From Shakespeare to Darwin to Freud to Milton Friedman (and modern macro-economic policy). That is what I have to offer.

I can't promise to get everything or even get everything right, but hopefully it will be interesting and useful to someone.