He recently proposed a plan that would cut the budget deficit dramatically by 2020, through draconian cuts in taxes and spending. Normally, one would hope that the stupidity filter would have limited the exposure of this idea, by now an ancient, but persistent Republican solution. I believe this Republican retread is now in the Old Testament. But, the Washington Post made a big deal of Ryan’s  plan and reported that the Congressional Budget Office (CBO) indicated that indeed, the budget deficit would be cut in half by 2020 if government adhered to his ingenious prescription. But, in one of Paul Krugman’s best op-ed pieces in some time, he points out that the CBO only calculated the budget savings based on the decrease in government spending and did not figure in the lost Federal revenues from the tax cuts. Oops! Obligingly, the nonpartisan Tax Policy Center took up the issue and made the appropriate calculations, indicating that the tax losses from Ryan’s plan would be $ 4 trillion over the next decade, so adding the two figures  together–tax cuts and cuts in government programs– gives a deficit of $ 1.3 trillion or about the same as the estimate for the current fiscal plan of the Obama administration. Ryan achieves his miracle by cutting taxes on the richest 1%, while increasing taxes on everybody else. Then too there are unspecified cuts, most of which will come later by dismantling Medicare. As Krugman points out, this is the same plan that Newt Gingrich, another genius Republican, suggested in 1995, as the Republicans assumed command and control of Congress. You will want to read Krugman’s article, as my summary here doesn’t do justice to his wit, sarcasm and simple arithmetic.

RFM

A gripping story, describing three generations within a family (the Nicholson family in Grafton, Mass) who experienced three different transitions in our economy, including the post-WW II, post-Vietnam and today’s recession, was published a few weeks ago in the New York Times. For the millennial generation of 18-29, the unemployment rate, officially at 14 percent, approaches the level  for that group during the Great Depression. But, now add to that the 23 percent that have stopped looking for work, based on Bureau of Labor statistics, and you come up with a whopping unemployment rate of 37 percent, the highest it has been in more than three decades and within the range of the 1930s. For young adults seeking work today, this is their Great Depression. Adult unemployment in the Great Depression reached about 20% of the work force (though numbers for this period are not as accurate as today’s; some numbers that are higher for unemployment during the depression did not include classifying workers in emergency work, like the temporary work created by Federal jobs programs, etc as being employed).

Among the millennial generation, a college education helps, but the unemployment rate among college-educated young adults is currently at 5.5%, or nearly double what it was on the eve of the Great Recession in 2007. That is the highest level by two percentage points, since the bureau began keeping records in 1994 for those with at least four years of college. A college degree is no longer an insurance policy against prolonged unemployment. We have hollowed out our economy and exported many would be good paying jobs. So far there are no signs that things are getting better for any group of workers in our economy, quite independent of their level of education. Indeed, recent economic forecasts suggest that our economy will contract before it expands, as stimulus money runs dry and nothing is available to pick up the slack.  Europe’s decision to introduce an anti-Keynesian fix to their problems, beginning with Greece, is compounding the issues we face in reaching for a more global and balanced economic recovery. So what happened?

A major fault line in our economic recovery strategy was the insufficient level of the stimulus package we engineered to soften the blow of the collapse. If we had invested somewhere between two and three times what we did invest as our stimulus package, we surely would have been seeing more light at the end of the tunnel by now (too much of the stimulus package was in the form of tax breaks, which are often not used or used late). Very likely, we would have started seeing new job growth through a stronger nurturing of the new economy we will require,  as new businesses could have been generated based on the richest resource we have–our scientific and technological skill level, which now lies fallow because of poor investment decisions and too much money spent on propping up banks and corrupt financial institutions. This unfortunate outcome, the lack of a sufficient Keynesian response to our financial collapse, has left us with rich bankers and unemployed young people. Is that an even sensible trade? Where will our economy come from that we need in order to generate good-paying jobs that can fill the void and the reduce the vast unemployment debt we have accumulated as the biggest obstacle for our future? Right now we seem to be content to let the bankers get away with it and allow our young people to suffer. They are paying the real cost of this economic disaster.

The youngest member of the Nicholson family, caught in exactly this circumstance, remains optimistic about his future, a very different outlook compared to those who went through the Great Depression in the 1930s. Let’s hope we can right our ship in sufficient time to reward his optimism and start generating the new economy by investing in the one area where we stand a chance of regaining leadership–the art and science of saving our planet and learning to live within the limitations of  finite planetary resources. Are we that stupid? Have we been out-Foxed? Is corporate power too much for us to resist and prevent us from reshaping our economic foundations? I don’t think so, but these numbers for the unemployment among young people must become more broadly known and right now the traditional media that we rely on for news refuses to get down and dirty in the places we need in order to flush out and reveal the truly suffering class, our youth, who are currently spared from despair by their innate optimism. How much longer can that last? It would be better for all of us if it didn’t last much beyond tomorrow because it is fixable.

As a companion to the worst recession since the Great Depression, we have a political and financial system that got embedded in the army and acquired the art of generating financial bubbles. Those same people that gave us our bubbles, including the dot com and the sub-prime mortgage fiasco, have given us a solution by a massive transfer of wealth that has yet to be recognized as such. Scott Nicholson’s good paying job went into buying a Goldman Sachs executive a new house and a new boat and a twenty five year lease on an expensive boat slip in Long Island.

According to Lou Dubose, editor of The Washington Spectator (highly recommended), here is what the banking industry visited on our economy: $14 trillion in lost household wealth; 8 million jobs gone, not yet returned or even on the horizon (thus the need for brand new ones); 200 community banks closed and more than $14 trillion in bailouts accompanied by a staggering increase in deficit spending needed to keep the economy out of a depression (it just wasn’t enough to give us a good jump start). The credit default swaps that swamped our economy were created by speculators that didn’t actually own the stock in question. What they made was a bet about whether one stock might default and another investor gave them  credit default swap insurance against that happening. Neither investor actually invested in the company per se. By the time credit default-swap trading destroyed the economy, 90 percent of the traders were speculators and many of them were banks. Furthermore, it was the Wall Street bond lawyers who wrote the “Commodities Future Modernization Act” that Phil Gramm held up as the wave for our new future in 2000. With the final regulatory constraints out of the way, over the counter derivatives went from $100 trillion in 2000 to $600 trillion when the economy collapsed in 2008–that was 10 times the GDP of the entire world! Graham was Wall Street’s operative in the Senate, but the bill had strong support from Clinton’s Treasury Secretary (Larry Summers–now in charge of Obama’s National Economic Council). Not surprisingly that bill also had the strong endorsement of Alan Greenspan. The same people who engineered our financial meltdown are now engineering our recovery. Any wonder why we are not seeing anything close to a recovery? Is there any doubt why the recovery that was engineered for us to enjoy is not enjoyable at all? Obama hired the wrong team. We need a new one. For starters, I would recommend Joseph Stiglitz.

RFM

RFM

Climatologists used to think that changes in the weather would only take place over hundreds if not thousands of years, because the atmosphere was perceived to be a large, gigantic carbon sink. But that has all changed and the contemporary view favors the potential for dramatic changes in climate that can take place  over decades or even in less time.  The delicate balance that we have taken for granted throughout the centuries of human history, has been significantly altered by our behavior, which has cumulatively started to change our environment, beginning with the industrial revolution. But those early, seemingly innocuous beginnings, are projected to reach peak levels of greenhouse gases during this century and eventually these new levels are projected to have a far more dramatic impact on our weather, even compared to the trends we have witnessed over the last few decades. Climatologists are confident that dramatic changes will begin to accelerate as the planet continues to warm and carbon dioxide levels continue to rise.   One must keep in mind that if our planet Earth had no means of losing heat from the Sun, but only absorbing it, like a perfect black body, the Earth would eventually, perhaps over millions of years or longer, become as hot as the Sun. In contrast however the Earth without an atmosphere loses sufficient heat through infrared radiation that, if that were the only thermal factor operating, would leave our planet at temperatures well below freezing. It is the atmosphere that keeps absorbing and reflecting infrared radiation that is responsible for keeping our planet warm and, atmospheric carbon dioxide, though a small constituent of our atmosphere, has always played a major role in regulating our global climate.  Thus, the mean planetary temperature is created through the process of losing some heat through the atmosphere, while retaining some through heat capture and reflection; this dual process has served as the delicate balance by which we have faded into and out of warming and cooling cycles, including several ice-ages in our long geological history. While the causes of these past temperature fluctuations are still a matter of investigation and debate, scientists are in strong agreement that the carbon dioxide problem we face will dramatically change our weather, especially if we do nothing to control our carbon emissions.

The only way we can project our climate future is through computer models and base those models as rigorously as we can on data that we acquire through geological and other scientific disciplines. Today’s computer models are fairly sophisticated and have been gaining in precision and predictability as computer capabilities and measurement constraints have been slowly added to the modeling strategy. There is no other way. We are building these “General Circulation Models” and improving on them to make better predictions about our planetary future.  Initially, models and early studies tried to focus on why the Earth went through the dramatic temperature fluctuations that included several ice-age periods. Was this a normal cycling of the atmosphere and if so, why and how did our  weather change so drastically? But as the measurements and models got more sophisticated, climatologists, in collaboration with many other branches of science, including the biological and oceanic sciences, began to focus on a new problem, one that was increasingly created by man. This problem turned out to be not just an issue of greenhouse gases warming the Earth and the oceans, but also rising sea water levels that, in the near future, could threaten coastal cities and generate other, more dangerous possibilities created by alterations in the ocean currents that provide significant warm weather to Europe for example. In the latter case, models have demonstrated that that the Atlantic current that warms Europe, in which warm water travels north on the surface, as cold Arctic water travels in the opposite direction at deeper levels, could disappear in a relative heartbeat if the salinity of Arctic water goes down, as it might if significant melting in the region occurred. In an age of global warming, it seems counter-intuitive that Europe could get much colder, especially in the winter. But, not everyone is opposed to global climate change. Many Russians for example feel they would welcome a few degrees added to their winter. Then too excessive carbon dioxide can help support additional plant growth, but even this effect can turn negative if accompanied by excessive plant decay.

It was in 1938  that Stewart Callendar, standing in front of the Royal Meteorological Society in London,  first suggested that the planet was gradually warming and that the principal culprit was humans burning fossil fuels and adding tons of carbon dioxide to the atmosphere. Few other scientists accepted Callendar’s idea at the time, simply because it seemed irrational that the atmosphere was so delicate and limited that it couldn’t absorb the results of burning fossil fuels without a blip on the radar screen. Was planet Earth really that small? Earlier work by British scientist John Tyndall had determined that the main gases in the atmosphere, including nitrogen and oxygen, are transparent to infrared radiation, but “coal gas” was opaque to infrared rays, caused mostly by its high carbon dioxide content. In this way, atmospheric carbon dioxide became known as a “greenhouse gas.”

No teaching tool is quite like history for learning about the sea changes that shape politics and attitudes and the evolution of ideas, both scientific and otherwise. An excellent book that traces the history of global climate change is Spencer R. Weart’s “The Discovery of Global Warming“ Harvard Press, 2008. Weart has also created a site where a hypertext presentation and a summary of global climate change history and facts can be sorted out as a kind of short cut for reading the book.

From my perspective, the salient features of this story begin with the realization that scientists studying the global climate in the late 1970s had started to converge on the idea that Callendar was right: we faced a serious problem in the future with man-made greenhouse gases, the most important of which was carbon dioxide. But scientists alone cannot force changes in public policy and without some divine interference, scientists generally have a hard time getting attention to their concerns, unless there is a major catastrophe that requires their input for understanding (we can see the public beginning to turn to scientists for explanations as an aid in understanding the impact of the on-going BP Gulf oil spill).

In 1979, the influential National Academy of Sciences issued a report that gave increased visibility to the global warming concept by suggesting that doubling atmospheric carbon dioxide would bring an increase in global temperature of 1.5-4.5 degrees Centigrade (2.7-8.1 degrees Fahrenheit), an alarming increase that could raise serious concerns about the safety of our planetary future. Unfortunately, in the U.S., just as scientific studies of the global climate were gaining momentum, the election of Ronald Reagan brought about a backlash and helped generate the Republican skepticism on global warming that is still with us (or them) today. About the time that Reagan was elected President, Greenland ice core studies revealed that drastic temperature changes had taken place in our history within the span of a century, suggesting that our climate is not an ultrastable, unmodifiable system at all, but may have a tendency to favor rapid shifts in average global temperature, depending on multiple kinds of feedback systems, not all of which were then identified (and still aren’t). Other alarming studies showed that carbon dioxide was not the only greenhouse gas we had to worry about, as methane and other trace gases might also make a significant contribution, and had to be included in the models to avoid their predictive failure. Antarctic ice cores also revealed that changes in atmospheric carbon dioxide levels went up and down together through past ice ages, which led scientists to conclude that our global atmosphere is highly dynamic and very modifiable–sort of like some  synapses in our brains.

1988 was an important year in the history of global climate study. It was an unusually hot year for the United States.  I remember that summer very well, as it was the year we moved from St. Louis to Minneapolis during heat spells that were uncharacteristic for the region and caused many well-established, older trees to die out. That was also the year in which U.N.’s Intergovernmental Panel on Climate Change (IPCC) was assembled, which, for the first time, formed a union between scientists and government representatives, whose function was to integrate scientific knowledge and help formulate public policy development to reduce greenhouse gases. The IPCC is the committee that shared the 2007 Nobel Peace Prize with Al Gore. The first report of the IPCC was made in 1990, in which the committee concluded that the planet had been warming in the recent past and future warming seemed likely. By 1995, the second report issued by the IPCC warned that serious warming would be likely in the coming century. Given that it was organized under the auspices of the United Nations, it is axiomatic that the Republican Party would be opposed to any information coming out of that committee. Fortunately, Al Gore formed an important relationship with the committee and helped to amplify their concerns with his popular documentary “An Inconvenient Truth.”

The hottest year on record, that of  1998, was associated with a “Super El Nino” which caused weather disasters and unrelenting heat. By the end of the 20th century, sophisticated computer models had been able to simulate global ice age climate changes and gain substantial credibility for their future climate projections. The third IPCC report in 2001 indicated that future global warming would bring the hottest period of the planet since the last ice age and may be attended with “severe surprises.” By then, the entire scientific community had agreed that greenhouse gases would likely be a serious problem and that the global reach of human societies needed to get busy to correct the excessive use of fossil fuels. A serious response was required of the major industrialized countries, but the U.S. has balked from entering into serious agreements, such as the Kyoto protocol.  This was followed by numerous observations on collapsing ice sheets in Antarctica and Greenland that might cause sea levels to rise faster with far less predictably than previously thought. In many ways, it was beginning to look like we were facing a climate emergency.

The fourth IPCC report was issued in 2007 and argued that the cost of reducing emissions from fossil fuels would be offset by the benefits and savings of doing nothing to curb the further accumulation of greenhouse gases. In that year the level of carbon dioxide in the atmosphere reached 382 ppm and the mean global temperature for a five year average was 14.5 degrees Centigrade (58 degrees Fahrenheit), the warmest in hundreds, perhaps thousands of years. Some have argued that we are in a relative cooling period since 1998 because of reduced sunspot activity, but it’s unclear whether such activity  unambiguously affects our climate: if it does, then we are in for a sudden increase in global heating when sunspot activity resumes.

Global Climate Parameters vs IPCC projections

The main problem with the IPCC reports is that they take the arguments and data from scientists and water them down, for more palatable public consumption, hoping the issue appears less alarmist by making the issue less stressful, which in turn makes the issue seem less significant. Some scientists who serve on the IPCC have published papers challenging the overly conservative nature of the IPCC reports; the political arm of the IPCC gets the last word on the tone of the warnings and the details of the projections. One such objection to the IPCC reports was published by Rahmstorf et al, in Science, 2007 (volume 316, p 709–available to the public without a subscription to Science). The graph on the left was taken from the Rahmstorf et al paper (published on line); in the top section, the monthly carbon dioxide data measured from Mauna Loa Hawaii (blue) is compared to the IPCC projection (dashed line; note that the yearly levels of carbon dioxide fluctuate because of the annual change in vegetation and hence carbon dioxide absorption, largely in the northern hemisphere). The middle portion shows annual global mean land and ocean surface temperatures combined from two different sources (red and blue) together with their trends. The bottom panel shows the most discrepancy in the sea-level measurements based on tide gauges (annual, red) and from satellite altimeter (blue) data. When compared to the dashed line and gray range representing IPCC projections, it is primarily the sea-levels that show the greatest discrepancies between measurements and projections. That in short is the main worry.

At the present time, most of the expansion of the oceans has been attributed to thermal expansion, since the ocean is warmer, with an added dash of mountain glacier melting. To date, melting ice from the Arctic, Antarctic and Greenland ice masses have added little to sea-level changes, but that picture could change dramatically in the coming decades. It is the sea-level discrepancy between measurements and the more conservative IPCC projections that stimulated Rahmstorf et al to publish a brief note in Science that brought more attention and focus on the politics of global climate projections within a body that is supposedly dedicated to a more complete and objective analysis.

We are now at a point in our understanding of the threat to global climate change, imposed by burning fossil fuels, that more science is not required. Yes, we will continue to refine our models, but by being forewarned, we should be forearmed and, as a global society, we should be sufficiently knowledgeable to act with a little long-term planning, as if we are facing a global emergency. We must recognize that our small blue planet, its oceans AND ITS CLIMATE are linked inseparably at the hip and that all three are being degraded by human activities. Ocean levels will rise and threaten coastal cities. The decrease in ocean salinity and pH could wipe out coral reefs, change the food chain in ways we cannot possibly comprehend and alter ocean currents which can dramatically change our weather.  Water resources will become more scarce in some regions and more abundant in others. If one removes natural vegetation, it will have an impact on the regional weather. Remove the trees in a region and you will have less rain; remove the plants and expose the soil and you invite desertification in some areas through more moisture evaporation imposed by the elevated temperatures. Additional moisture in the air will bring more floods and storms, but not in all regions. Some regions of the world may simply become unlivable, especially those where the climate is already dry and hot.  The Southwest region of the United States faces additional constraints on water and annual rainfall and regions of Africa are likely to become increasingly dry and more inhospitable. The global society in which we live, now numbering about 6 billion people are far more than the planet can tolerate if each society aspires to be like the us, as we continue to go about our business with an unlimited appetite for fossil fuels and forest depletion.   If anything, the rate of ice melting from the polar ice caps has been underestimated and modelers are madly revising their computer simulations to account for more dramatic events, such as entire ice shelves dropping into the ocean. It is probably asking too much for a model to accurately tell us where and when giant fluctuations in ocean levels are likely to originate.

I think that Obama’s nation-wide address this past week was about right, despite its downplay in the press. We need to interpret the catastrophic Gulf oil spill to 1) recognize that giant oil companies are completely indifferent to the environment and are acting solely through a profit motive (no surprise here and let’s give Obama credit for establishing the $20 billion BP compensation fund and the elimination of the annual BP dividend to stockholders–this was using the bully pulpit with great aplomb and a sensible outcome) and 2) if we had started on a more conservative use of fossil fuels, with an objective of reducing levels of carbon dioxide emissions just ten years ago, when GW Bush came into office, at a time when the need felt more acute, we would not need the oil that is gushing out of a giant hole a mile beneath the surface of the Gulf.  So, if we start immediately on the same quest, the next ocean oil gusher, whether in the Gulf of Mexico or the Arctic seas, will never occur, because that oil will not be required. Surely, with the Gulf oil spill, we are witnessing a source of oil that might be better left under the ocean floor. We should work towards the end of leaving some oil in the ground.

As Obama has pleaded with us to change our orientation about the use of fossil fuels, its an open question whether we will view this catastrophic Gulf oil spill to finally act and reduce our dependency on fossil fuels. There are several things we could do to give ourselves a dramatic boost in reducing our fossil fuel habit. Energy conservation and the development of fossil fuel alternatives is currently at a very primitive stage of development and needs dramatic new funding to alter its present course. One thing we must do is learn how to tax oil usage, eliminate subsidies to oil companies and come up with accurate accounts of what the true cost of oil is today, when you consider that a good part of our military is devoted to protecting our sources of oil, and in the process our military uses huge quantities of oil to run our ships and planes.  So, Mr. Obama, help us arrive at a figure for the cost of gasoline at the pump, computed by adding up the cost of subsidies, correction for the cheap bargain-basement oil leases, add the cost of military protection of the sea lanes and our occupation of Iraq and Afghanistan and the then give us the future cost of gasoline, imposed by the expense of relocating major coastal cities to higher ground as a result of sea changes that are at present unknowable, but certainly on the way. Add to that the cost of this single Gulf oil spill and then try to calculate the financial impact it has had on the entire Gulf economy and the availability of Gulf seafood for the entire nation.  I don’t myself have this number at the moment, but it should not be difficult to estimate with ballpark numbers and would have been a powerful additive to Obama’s national speech on energy, especially if approached honestly and with full and complete disclosure.  We should all be concerned about this number and have a national discussion on what it means and how it should be used to motivate changes in our future.

The barn door has closed on avoiding global climate warming–it’s here today. But, there is still time to alter the slope or the rate of these changes and that should be a matter of concern for all of humanity, rich and poor,  but most critically, it should deeply concern the citizens of the United States of America, as we are the biggest offender and historically the most insensitive nation in facing what should be a moral imperative. If we do not act with intelligence and dedication to this task, we can be certain that the rest of the world will go along with our own indifference on the subject. Never before has a single issue of global significance rested so squarely on the shoulders of the worst offender in the history of humanity. We are not only in a position to act, but we need to change our habits and consumption of fossil fuel so that we discourage the rest of the world from trying to emulate our fossil fuel gluttony. The globe cannot afford to have China grow up to look just as modern and fuel-consuming as the United States, but that is just where we are headed. Beijing adds 1000 cars a day to an already heavily congested street and highway layout. In 2030, not so far away, China will need and use the equivalent of Europe’s entire energy consumption. They will achieve this by investing $3.7trillion in energy over the next twenty-five years. The Global energy supply has never looked as small as it does today. Should the condition of global “peak” oil confront us, as it has in several countries, including the United States, then expansion of the kind that China is planning will be virtually impossible.

RFM

Today the Justice Department has initiated a criminal investigation against BP, but one has to wonder whether this isn’t more of a defensive operation than an offensive plan  of action. Is this legal investigation really based on something that can be criminally prosecuted, or is this, as BP contends, an industrial “accident?” Meanwhile, the gushing of oil into the Gulf could go on all summer. BP’s  intention was to cap the current well and move the drilling rig so that new sites could be drilled, some of which were intended to begin far deeper than the current problematic drilling site. I just watched the Jim Lehrer News Hour on PBS and noticed that a reporter went to a shoreline region in Prince William Sound, where the Exxon Valdez oil spill occurred. While the surface looked as if it was clean, the reporter dug down into the rocky shoreline and came up with oil-drenched rocks that smelled like “roofing tar.” Once it comes, it never goes away unless perhaps you think more in terms of geological time.

RFM

The New York Times also has a multimedia site that is worth checking out; among other sources of information,  it has a history of major oil spills beginning with the oil well leak in 1969 off the coast of Santa Barbara. In that instance, prisoners were used as a major source of labor for the cleanup which employed tons of straw. But, how desperate are we for oil such that some wells in the gulf have been granted permits to drill beginning at more than 9,000 feet below the surface? Is this oil-drilling chutzpa or are we pursuing true needs? Oil companies fear that if they don’t feed the never ending growth of the expanding  global thirst for oil, consumers will turn to alternative fuels and sources of energy, dropping the price of oil and making these more risky oil adventures less cost-effective. But is that really true? How desperate are we for oil and how scarce are the sources, if we are now drilling at such deep sites, without having a more foolproof method for handling accidents.  This is an issue, in which the biggest oil-consuming country on the planet, namely us, can have a huge impact on our economy, the environment and the need for ever increasing oil supplies by adopting more sensible restraints on oil usage: the new federal standards for improved fuel economy will help, but other measures are needed to meet the demands in front of us for global climate change. The Copenhagen agreement seems too little too late, even though it’s better than nothing.
So far bp has been reluctant to have scientists make more definitive calculations of the magnitude of the oil spill, because this measurement will have a direct impact on the financial liability of the company.  A government report on the spill magnitude, compiled by several different agencies,  is due out this week. In the meantime bp is sticking to 5,000 barrels a day, but other estimates, based on seeing the films of the oil leak, go as high as 70,000 barrels/day. Bp refers to these higher estimates as alarmist!

RFM

Peak Oil Production and Imports in U.S.

When Obama announced the release of new sites along the U.S. coastline that will be opened for oil exploration, it seemed like another slap against his own supporters, those environmentalists who are opposed to any new drilling. Obama’s point was that establishing additional sources of domestic oil will further reduce our dependence on foreign oil, a problem now recognized within the military as Middle East oil and our policies in the region continue to place a bright red bulls-eye on the homeland soil of America. The environmentalists believe that we should accelerate the development of alternative, renewable energy resources and that we have been too timid and reluctant to invest in these innovative energy alternatives, precisely because the giant oil companies control our energy policies.  While it is true that our high energy demands are still met largely by oil, gas and coal-burning power plants, Obama’s decision on new oil exploration had less to do with the Middle East and a lot more to do with China.

Author Michael Klare, writing in TomDispatch (whose most recent book is “Rising Powers Shrinking Planet“)  has pointed out that during the last two years of the recession, America’s oil demand dropped by 9%, from 20.7 million barrels per day in 2007 to 18.8 million in 2009. In contrast, China’s oil consumption has gown in this same period, from 7.6 to 8.5 million barrels per day. And while projections for oil demand in the U.S. continue to be flat during the rest of 2010 and well into 2011, China’s will continue to grow during the Great Recession. The advantage that China has over the U.S. in securing  new oil fields is that the government of China is willing to provide financial backing for new developments that, in the near future, will make China one of the giant competitors to Western oil interests. Of course you could argue, as I believe we should, that our extensive, worldwide  military deployment is rationalized in part to protect Western oil supplies, and if you added those costs to the price we pay for oil, it wouldn’t seem like such a cheap form of  energy. But, as opposed to our oil companies which are subsidized in many ways by our government,  Chinese oil companies are state-owned and in tough times, that’s probably an advantage, as it serves and controls a national energy imperative and can thus look much further down the road than an American oil company that thinks in terms of five years or less.  As the accompanying graph shows, our domestic production for oil reached the “peak oil” condition in the early 1970s and most accounts dismiss the possibility that we could ever be self-sufficient in oil again. So what solution do we really have for solving the oil shortages that may lie in our future? Well, we have to import more, right?

Two developments are of relevance for any attempts we have planned for expanding our future oil imports, though they hardly summarize the entire picture of the competition we are facing for oil with Chinese oil expansionism: whereas you might have expected our military intervention in Iraq to give us an edge for developing Iraq’s huge oil reserves, in October 2009, the Chinese National Petroleum Company (CNPC) led a consortium, including BP, to develop the Rumaila oil field in Iraq, keeping in mind that Iraq has perhaps the third largest oil reserves on the planet. If that developmental arrangement goes well, China could become the dominant player for access to the lions share of Iraq’s oil reserves. You might ask what went wrong with the neocons invasion plans, since oil was supposed to be such a big part of the motivation for going to war?

The second development that has taken place has been the new emerging relationship between Saudi Arabia and China. Until 9/11, the interdependence between Saudi Arabia and the U.S. has always been that of a  comfortable love affair, in which the Saudis were the major supplier of U.S. Middle East oil. But 9/11 changed that, since we learned that most of the terrorists who attacked the U.S. were from Saudi Arabia and we have been critical of the manner in which they fund radical Islamic schools or Madrassahs, fed by the primary Islamic religion of the country–Wahhabism. For the Saudis, a shift in customer preferences towards China has become a comfortable two-way street, acceptable to both parties. Saudi Arabia recently announced that it sold more oil to China last year than to the United States, as if to announce the end of the long period of oil romance. “We believe this is a long-term transition,” said Khalid A. al-Falih, president and chief executive of Saudi Aramco, the state-owned oil giant. “Demographic and economic trends are making it clear — the writing is on the wall. China is the growth market for petroleum” (From Micahel Klare’s article in TomDispatch).

China has been acquiring foreign energy assets in Angola, Iran, Kazakhstan, Nigeria, Sudan and Venezuela. It is not just oil assets, but also metal mining operations for iron, copper and other resources essential for expansion of manufacturing.  So far, the collective Western Oil companies have more oil resources than those of the Chinese. But China has deep pockets and they have clearly decided to strike out for increased oil access at a time when the demands from the West are in a state of abeyance. China’s big stimulus package helped the country bounce back from the Great Recession and they are now aggressively seeking to insure an oil rich future for their expansion of manufacturing and national wealth.

Once our own recession is in the rear view mirror, perhaps after several years, and we wake up to take another look at the world around us, we will see that China has become the new epicenter of increased oil demand and the great rising customer for oil expansionism well into the future. That is one reason why Obama announced his intentions to expand domestic oil production in the United States, even though it is primarily for political purposes rather than a transition in oil policies.  Although the magnitude of the oil that might result from expansion through the new oil leases is unknown, at best, projections are that we might gain 5 to 10 years of additional oil at our current level of consumption. So, Obama’s commitment to energy independence and the rising influence of China in gaining access to oil resources which are in competition with the needs of the United States, places us on a collision course with China for one of the most critical resources we need to make our economy work. The second reason for Obama’s willingness to open more sites for oil exploration has to do with cooperation he is hoping to get from Republican Senators for his new energy policy, one that will include a cap and trade arrangement to begin the long slow retreat from the size of our current carbon footprint. Somehow, Obama needs to find a policy solution such that the country will see the trivial nature of the tea baggers, whose ideology is currently an obstacle for serious policy momentum on global climate change and resource conservation. However, oil conservation in the future will surely be spelled D-U-E  T-O   C-H-I-N-A! And, maybe that’s the kind of threatening stimulus that will spring us into action, just as long as our choice to resolve the conflict is not a military one. But, as the saying goes, if you have a set of tools, you are probably going to use them for any problem that seems soluble by the toolbox in your hand. The eight years of the Bush administration accomplished one major change in the perception of America among other countries: for the oil-rich, oil suppliers of the world, they view China as having eclipsed the U.S. for oil futures, and it’s better to deal with someone climbing up the ladder than someone going down.
RFM

RFM

This bill sailed through the house, but got blocked in the Senate where all good things come to an end. But the clever tactic of including it in the reconciliation process (part of the savings from the new student loan bill will help pay for the new healthcare insurance bill) dropped it into the can-do box under the radar screen.

Student loans began with the Federal Family Education Loan Program, created in 1965. Under Clinton, the Department of Education began its own direct loan program and most schools would sign up for one vs the other (bank vs Fed), not both. At that time, the Federal Government would set the rates and terms. Once at 20% of all student loans, as our economy went south, the percentage of direct Federal loans has grown, now at about 35% and soon to be 100% of all new student loans. Banks can still give loans, but they will not be secured by the Federal Government and will presumably be prohibitive in cost–so be wary!

Loan repayment schedules have been improved. The new bill will limit payments to 10 percent of discretionary income and forgive balances after 20 years. But these changes only apply to loans taken out by new borrowers on or after July 1, 2014. They are not retroactive.

Public-service workers on the income-based repayment plan can have their remaining balances forgiven after 10 years. That’s the same as the old law.

Now the major challenge in front of us, is to make a new economy that provides jobs for college graduates and doesn’t reduce them to competing for the same jobs that high school graduates get in line for. So far there is too much of that going around, especially for an “advanced” “civilized” “modern” society. That is the mother of all assignments for the weekend. How to build a better economy. Here is my first suggestion: any business that is going to be sold by its owners or downsized by a Private Equity firm, is given first opportunity for purchase to the employees, who with government help to secure loans, can assume ownership and try to run the business as a profitable enterprise. Remember that one problem we have is what I call the “Microsoft Problem.” That is too many corporations trying to emulate Microsoft’s unseemly profit margins and as a result, workers pay has stagnated and they did not financially gain as their company productivity went up: savings from that source went into CEO pay and company profit margins to elevate the value of the stock. The golden parachute appeared and the gold watch went in the toilet.   Worker ownership should be less concerned about profits and more concerned about jobs and products. And, we know where the creativity for the place is typically found–yes in the workers. Remember the high financiers of today’s corporate world, understand a leveraged buyout, but don’t know how to make things. Making things is the key to an industrialized society with equitable wealth distribution. Everybody has a skill. We need to get all those Chrisitan militia people back to work as well. They are getting a little scary out in the hinterland.

RFM

A shortcut for understanding American foreign policy is to understand our long relationship and intertwined history with Haiti. If you do nothing more than understand that single relationship, you will understand the dominant theme of American foreign policy. To achieve objective knowledge of our history with Haiti, you must, not surprisingly,  expunge the information you generally get through the mainstream media because that’s the short-term view: history through the eyes of a Polaroid camera. For starters, you might begin by reading Mark Danner’s op-ed piece in the New York Times this past week “To Heal Haiti, Look to History, Not Nature.” As Mark explains, in the early part of the nineteenth century, there were two countries in the Western hemisphere that had been liberated from colonization. One was America of course and the other was Haiti. But before Haiti freed itself in a manner reminiscent of our own revolution, but far more gutsy, it was under grueling French rule as a slave colony growing sugar cane. At that time it was known as Santo Domingo and it was one of the richest colonies on the planet. Indeed, much of French wealth of that era was floated on the profits from sugar derived from the slave labor. Slaves  were worked so hard under the French, that many died without having children, so slaves were continuously brought in from Africa. Under legendary revolutionary  leadership, the African slaves launched a revolt in 1791 and defeated Napoleonic France, murdering their French masters or driving them from the land and repelling several attempted invasions. As Danner aptly put it, “when Dessalines [Haitian revolutionary slave hero] created the Haitian flag by tearing the white middle from the French tricolor, he achieved what even Spartacus could not: he had led to triumph the only successful slave revolt in history.”

So given the similarities of history, and the zeal for revolution inspired by the Haitian revolt, you might have expected that the new America would enthusiastically recognize the new state of Haiti, as a brother in the brave new world of unshackeling the  roots of colonialism. But, while that kind of alliance might seem natural to the ordinary citizens of America, at least today, we went in just the opposite direction in forming a bond with our fellow revolutionaries in Haiti. The new American government feared that knowledge of a slave revolt in Santo Domingo would embolden American slaves towards insurrection in America. Because of that, the United States refused to recognize Haiti for nearly 60 years, until Abraham Lincoln did so in 1862, after freeing the American slaves.  Not only did America refuse to recognize the new free state of Haiti, but we hit the new country with an onerous trade embargo and supported a claim made by the French that Haiti should pay reparations to France for their lost income from slave labor. These suffocating extortion-extracted payments from Haiti  started in 1825, in exchange for recognition from the French; they did not stop until after WW II. Democratically elected Haitian President Aristide, who demanded repayment from France when he was elected President, did the math: he calculated that with sensible interest rates, France owes Haiti about $ 21 billion in illegally obtained reparations. While France has scoffed at the idea of repayments, legal scholars consider that Haiti has a strong legal case to make in international courts, as the reparations paid by Haiti amounted to extortion. The French basically said to Haiti–pay us or we will invade your country and subjugate your people again.

Once the French were out of Haiti, the Americans took over. In 1915, the United States Marines invaded Haiti to enforce continued payment of debt to France. Americans occupied Haiti until 1934, after which we installed dictatorships, notably that of Francois Duvalier in 1957, who established a repressive, murderous regime which was handed to his son, Jean-Claude who was overthrown in 1986. The struggle to generate a democracy in Haiti has been continuously thwarted by American efforts at manipulating loans,  loan conditions and trade policies that have served to paralyze the country and stunt its development. What we want from Haiti is a continued impoverished state so that American businesses like Walt Disney, will have access to a nearby source of cheap labor. What we don’t want to see in Haiti is an example of former slaves becoming our equals, living in a thriving, independent, populist democracy. Indeed we don’t want that in any Western hemisphere country and we only tolerate it in Canada because we lost the war of 1812.   About 40% of Haiti’s current heavy debt (about $1.134 billion in 2004) is owed to international financial communities, largely overseen by the United States: it was acquired during the brutal  Duvalier dictatorships. Very little of that money actually went to the government, but served instead to enrich the coiffures of the ruling elite. More recently, through arrangements insisted upon by our government,  international loans don’t go directly to the elected government of Haiti, but are given first to non-government agencies (NGOs). Paul Farmer, a physician who has spent 25 years serving in Haiti,  has testified that less than 1% of the money given to NGOs in Haiti actually reaches the Haitian government and its people. This of course is explicable on the basis of Naomi Klein’s arguments about the “shock doctrine” and we have seen similar behavior in the recovery from Katrina in New Orleans, where NGOs absorbed much of the reconstruction money with very little accountability. Privatization of government functions is part of the mechanism of disaster capitalism. The costs go up, corporations get rich and the target of concern gets next to nothing. And, let’s be clear about one thing: when you begin a policy like that, you cannot reverse it. Like the bowling ball you released that heads down the lane, once launched, it cannot be recalled. Our entire government is like that–it’s on automatic pilot. This is nothing more than Folly Compounding which I have addressed at length in other articles.

A good book on the subject of Haiti is “Getting Haiti Right This Time“ by Noam Chomsky, Paul Farmer and Amy Goodman. This short book is centered around the Bush II administration’s removal of Democratically elected President Jean-Bertrand Aristide, with initial background material by Noam Chomsky and Paul Farmer on the history of Haiti and the more recent manipulations of the country by our foreign policy apparatus, including our international loan policies that can truly suffocate a country. The rest of the book is primarily based on Amy Goodman’s interviews on Democracy Now, during the upheaval in Haiti that led to Aristide’s forced removal to the Central African Republic in 2004.  This is a short read, but gives a lot of insight into how American foreign policy has nothing to do with whether a country is democratic or not because, in the case of Haiti, as it is throughout South America, we have done everything we can to destroy populist democracy, including, in the case of Haiti, the kidnapping of Aristide and his removal as president by GW Bush. Our CIA has trained and had on its payroll many of the terrorists that have worked to destabilize democracy in Haiti. Declassified records have established that the CIA and other government agencies helped to create, fund and train a paramilitary group known as FRAPH, which rose to prominence in 1991, after a military coup ousted Aristide for the first time (Clinton helped to restore Aristide to his presidency in 1994, but seemed unaware that elements in his own government had generated his removal and would attempt to do so again). The FRAPH group killed thousands of Haitians during the revolt in 1991 and helped to unravel Aristide’s presidency again in 2004.

The tragedy of Haiti and its deep impoverishment is an American achievement, designed to cripple a democracy so that American business interests can continue to enjoy a cheap source of labor. Haiti was made in America!  The ruling elites in Haiti own the press, so that little objective news ever reaches the general population. Polls that reveal the popularity of Aristide are never published in the major local news media. Haiti has had a rich history that we should admire and support: there is genius in what they did and what they are trying to do now. They threw off a brutal form of slavery, lived through and threw out dictators and have tried to establish a populist, democratically elected government. The Obama administration could change the course of history by bringing Aristide back, supporting him financially and, under his leadership, help the country recover, while at the same time, building a strong democratic state. It should seem to all of us that we and the French owe that much to Haiti. Ironically, while we are unlikely to ever build a democracy in Iraq or Afghanistan, Haiti would welcome and thrive with a populist democratic government that provided the basics of education, healthcare and all the things we no longer provide for many Americans here at home. Come to think of it, by reconstructing Haiti, we could learn how to reconstruct America! Both countries need to press the “restart button.” Haiti’s problem is that the island nation is in the wrong hemisphere. Do we just have to tear up the Monroe Doctrine?

RFM