Coming To A Clothing Store Near You

(Editorial cartoon by Joel Pett / Lexington Herald-Leader (April 26, 2013) and featured at McClatchy DC.  Click on image to enlarge.)

This is what unrestricted globalization leads to:

The death toll in Bangladesh rose to more than 300 people Friday following the collapse this week of a building that housed five apparel factories, officials said, as protests by workers at other garment plants intensified.

Bangladesh police fired tear gas and rubber bullets as hundreds of stick-wielding workers in the Dhaka area stopped highway traffic, smashed vehicles and vandalized garment factories that refused to close during a declared day of mourning. Traffic was clogged for hours as demonstrators, some waving black flags, called for the arrest and punishment of the owner of Rana Plaza, which collapsed Wednesday morning just outside Dhaka, the capital. ...

Human Rights Watch said the government hasn’t made factory oversight a priority. In June 2012, the labor ministry’s inspection department had 18 inspectors to police an estimated 100,000 factories in Dhaka district. The garment industry has approximately 4,500 factories, employs around 4.2 million workers and accounts for a whopping 80% of the country’s $24 billion in exports.

In Washington, U.S. State Department spokesman Patrick Ventrell said Thursday that this week's accident underscores the urgent need for the Bangladesh government, factory owners, buyers and workers to find ways [to] improve working conditions.   [Emphasis added]

300 bodies, and they haven't finished looking.  The total of dead and injured will continue to climb.  And, according to the article, no one will be prosecuted.  The owner of this factory has, you see, good connections with the government.

And the clothing they made is sold abroad.  Probably to companies like KMart, JC Penney, maybe even Nordstrom and Macy's.  We'll be buying the clothing these people died making.

Think about that when you pick up that sweater and say, "It's to die for!"

It's the capitalist way.

A Few Pennies Worth

(Editorial cartoon by Kevin Siers (11/30/12) published by the Charlotte Observer and featured by McClatchy DC.  Click on image to enlarge and then return.)


AP has published a terrific analysis of the garment industry and how it works globally to get the cheapest labor possible, regardless of the conditions under which the workers labor, all to save a few pennies and to make a few bucks.  The entire article is worth the read, but I'm still going to quote a significant portion of it.

In the charred bones of the Tazreen Fashions Ltd. factory, the labels and logos—sewn and printed in scarlet and royal blue—beckon from the ashes. Even in ruins, there's no missing that these T-shirts and jeans were intended for U.S. stores and shopping carts, designed as bargains too good to pass up, or stocking stuffers just in time for the holidays and in just the right size.

But a week after the blaze outside Bangladesh's capital killed 112 workers, a glaring question remains unanswered: How, exactly, did brands worth fortunes end up in such a place? And what does the odyssey that brings them to market across thousands of miles say about the everyday economics most consumers take for granted? ...

That complexity means there are secrets behind every label that moved through Tazreen, sewn in by workers earning the equivalent of 27 cents an hour, 6 days a week, packed between rows of sewing machines stacked on floor after floor of a building with exits locked or blocked.

Such conditions were also common in the U.S. until a fire achingly similar to the one in Bangladesh killed 149 workers at New York's infamous Triangle shirtwaist factory 101 years ago. But today, the globalized economy allows retailers and consumers in First World countries to turn to Vietnamese or Honduran or Bangladeshi workers to do those jobs, a role largely overlooked until a system that runs with formidable efficiency is upended by tragedy.

"You have to remember that there is a problem which we face in a globalized economy, which is that if one country enacts really strict safety guidelines that raise the cost of manufacturing, buyers have the option to take their business elsewhere and, thus far, have demonstrated a tendency to do so," said Josh Green, CEO of Panjiva Inc., an online data platform used by international marketers and producers.

The supply chain's flexibility makes it particularly well suited for the clothing trade's repeating cycle of design, order, production, shipment and sale. Apparel companies begin laying plans for new lines of clothing a year before they arrive on store shelves. But creativity quickly gives way to number-crunching, as executives set sales targets and try to figure out which producers can deliver within their required profit margins, Rangarajan said. ...

But the pressures at work in Bangladesh, which has climbed to second place behind China among the world's largest exporters of apparel, continue because it is part of a global production economy with interchangeable components. Making clothes requires relatively low-skilled labor and equipment that is easily relocated or replicated, making it "uniquely susceptible to geography hopping," Green says.

That gives big buyers of clothing significant leverage. When a major retailer buys a garment, roughly 50 to 60 percent of the costs are for raw materials, 15 to 25 percent is for labor, and the rest is split between transportation, overhead and expenses like import duties, Rangajaran said. But except for the labor, the other costs are largely beyond buyers' control.

"Continually chasing low-cost labor is one of the big levers you have to pull," he said.

The result is a production system that has rapidly bypassed long-ago ways of doing business, when most clothing companies owned the factories where their goods were made and the workers were on their own payrolls. Now, a company like Wal-Mart or Sean John does not have to own a single factory, and the plants they rely on can change from year to year. The shifting creates the new challenge of keeping tabs on conditions where the work is being done.    [Emphasis added]

This is what unrestrained capitalism looks like, and it's all done on a global scale.  There is no human face to it, only bodies locked into buildings forced to work long days for pennies.  And the Wal-Marts, the Targets, even the Disneys are tied into it.  Some of them try to hide behind the shield of  "supply chain managers, independent suppliers or in-country agents" so that when one of these "embarrassing" incidents occur they can feign ignorance of the conditions and fire one shield only to hire another.  

Jobs have been exported from this country to China, Bangladesh, and other countries to increase the profit margins.  The sad part is that it is working.  People flocked to Wal-Mart and Target just a few days after this horrible fire and bought the very products those workers slaved to make because they were cheap, not realizing just what this system has done to those workers but what it has done to workers in this country.  Our own wages are now depressed (at least for those lucky enough to have a job, or two part-time jobs) and dropping with the threat of moving more jobs off-shore.

And our owners, those who control those global corporations and industries, are sitting back and enjoying every minute of it.

Where Have All The Dollars Gone?

While California leads the pack in suffering from the contracted economy, our increased production abroad has given impetus to businesses and governments outside the U.S. where the dollar increasingly migrates. Taxes paid abroad were a greater proportion of their layout for reporting U.S. business than taxes paid at home.

This makes ever more ridiculous the right wing's continuing complaint about the U.S. tax rate's being prohibitive, a complaint that ignores actual payments - which take advantage of multitudes of 'tax breaks' - that total far less than individuals' tax payments. While our infrastructure deteriorates, our business community blithely throws its dollars at economies and infrastructure outside the U.S. This is supposed to be sound policy for increasing profits. The fact that it ignores the source of those profits has escaped our brilliant business conceptualizers until now.

American multinationals have long tapped foreign markets to take advantage of lower labor costs, looser regulations, and simpler tax structures that can make doing business overseas more cost-efficient than in the U.S. But it's not just jobs migrating abroad -- it's now tax dollars too, a senior index analyst at Standard & Poor's says. [S&P, like BusinessWeek, is owned by The McGraw-Hill Companies.)

Last year marked the first time that American companies contributed more to the tax pools of foreign governments than they did domestically, according to analyst Howard Silverblatt's annual S&P 500 Global Sales report, released July 14. The study was based on income taxes paid and reported to the U.S. government by just over half the companies on the S&P 500. Companies are not obligated to provide such detailed breakdowns of foreign sales. In 2008 foreign income tax payouts accounted for more than 55 percent of their total income tax expenditures, up from 45 percent in 2007 -- an $11.5 billion increase. Federal income tax payouts declined 29 percent, or almost $44 billion, over the same period.

This trend has been occurring for some time. Over the past four years, U.S. companies have increasingly paid a higher percentage of their total income taxes to foreign governments, which accounted for 45 percent in 2007, up from 39 percent in 2005. But Silverblatt's findings represent another data point among many showing that the U.S. was hit harder than many foreign countries in 2008 as the global financial crisis picked up steam. While the U.S. economy contracted, emerging economies grew to take market share.

The attitude the business community has taken toward our own economy, that economy they depend on for sales, is enriching economies abroad while impoverishing the very consumers the businesses count on.

It's been noted by an increasing community of observers I communicate with on the internet, that our businesses that send their salaries abroad are cutting off their own sales objectives. The goose that laid the golden eggs - for sales in the U.S. - is the discretionary income. That's the amount we have to spend on non-essentials. That spending is where the deepest cuts occur in times when jobs and salaries disappear. Where is the genius in some Business School formulating a new lesson in how to keep sales by directing salaries and jobs to those consumers you sell to?

That scream you hear from domestic businesses is the echo of that death call of their source of golden eggs - it's a lesson business executives never seem to learn.

Emerging economies are a hopeful sign, but for the most part their governments harness resources to keep their own economies growing. Our right wing ideological tilt over the past maladministration did the opposite. As a result, we are in deep financial trouble. Shouldn't that lesson be obvious?

By directing their development efforts abroad, U.S. businesses are eating themselves. Those CEOs depending on cutting costs by paying salaries in third world economies are now selling into that salary level. They should themselves be getting accustomed to those third world salaries, as its their choice.

MayDay In Trade

Watching the BBC reminds me of the old onus attached to 'being in trade' that we encountered in literature that dated back to the early days of British studies by U.S. kids. I love hearing that 'trade' is involved in the concept of business, the exchange of commodities rather than accumulating mere symbols of stuff and of work.

In agricultural realms, that concept is beginning to be more relevant than our present day money manipulation. The basics of sustenance may be growing in importance as the 'financial' business shows that we've lost values, and lost the relationship between work and living.

CAADP is an African-owned and growth-oriented agricultural development framework that has been endorsed by African heads of state as the engine through which Africa's agricultural development will be driven. With the majority of African governments spending on average less than 5% of total national budgets on agriculture, one of CAADP's key objectives is to increase this to 10%, with the target of raising agricultural productivity by at least 6% per annum. Achieving Africa's agricultural growth requires massive investments from the global community and the on-going global financial crisis poses a threat to Africa's efforts.

Over the past generation, agriculture and farmers have been sidelined in international policy circles. During this time, agriculture's share of total aid has dropped from 17% to 3% of total spend. As a result, productivity is low. While total aid to sub-Saharan Africa remained stable during the 1990s, the proportion allocated to agriculture declined year on year. Aid to agriculture in the Southern Africa Development Community (SADC) member states declined as a proportion of total aid from 20% in the early 1980s to 8% by 2000. If poverty in Africa is to be reduced, aid to agriculture must be increased substantially and made to work more effectively.

The G8 agriculture ministers, who met for the first time last weekend to discuss the world food emergency, have done well to recognise the role agriculture plays in the success of a broader development agenda.
(snip)
The time is right to bring about much needed policy reform to address the stubborn and widespread problems that have crippled African agriculture and rural economies.

Implementation of programmes under CAADP is critical for reducing hunger and achieving the global priorities expressed in the Millennium Development Goals.

The ignorance we've arrived at from long progression away from basics like the value of work and sustenance is betrayed in our failures in the third world. It's come home as we see the neighboring countries of our world leave us behind in their social conscience, and in the development of their economies for participation by everyone. The age of the conquistador is ending badly for us, unless we can find our way back to values we've lost, it would seem.

Watching the worldwide rejection of our financial industry's failure to value humanity on this Mayday, I am hoping for a new rebirth of basic economy that allows us to live, not abuse.

Sending Messages in Bottles

Here on the high seas, hearing about closing borders is a little encouraging. What if I'm condemned to stay here in the Med for a few months whilst the flu gets 'contained'? Okay, the potential isn't scary for me. But does anyone volunteer to take on my cats for a bit?

Of course, my N. TX. hometown isn't right next to Mexico, which has the worst of it, but we have a lot of through traffic from that country. Perhaps I could apply for asylum. I will send in my posts in a bottle overboard, then.

From W.H.O. assistant Director General Fukuda, a longterm plan appears to be the best we can do at this point in the spread of swine flu.

"In other words, at this time we think we have taken a step in that direction, but a pandemic is not considered inevitable."

He said the virus had become too widespread to make containment a feasible option, and said countries must focus on trying to put measures in place to protect the population.

He also stressed that the experts did not recommend closing borders or restricting travel. "With the virus being widespread... closing borders or restricting travel really has very little effects in stopping the movement of this virus," he said.

The first batches of a swine flu vaccine could be ready between four to six months, but it will take several more months to produce large quantities of it, Mr Fukuda said.

Health experts say the virus comes from the same strain that causes seasonal outbreaks in humans. But they say this newly-detected version contains genetic material from versions of flu which usually affect pigs and birds.
(snip)
Dr Richard Besser, acting director of the US Centers of Disease Control and Prevention (CDC), has warned that a new US travel advisory is being prepared suggesting "non-essential travel to Mexico be avoided".

This is pretty terrible for a tourist industry already afflicted with gang warfare, which prompted warnings not to visit Mexico during spring break. With economic meltdown all around us, the potential for real suffering in Mexico is pretty disheartening.

Don't you wonder why we aren't hearing more about helping sustain their economy in the face of these blows to industries of all sorts? I susect that our officialdom is not so concerned with the prospect of hunger in Mexico as with the prospect of blowback if they start addressing that coming problem while our media is concentrated on tracking down the perpetrators of the health crisis. I just watched BBC reporters in the small town where the first victim was located, and their questions did not include what damage to the family has been suffered by their loved one's sickness and death.

As for my concern, I'll be volunteering to help out by staying here on the ship. Just think! I can help keep swine flu from spreading, and conquer the disease by staying away from any source of infection... okay, yes, with shipmates going ashore all over the tourist areas here we probably have already had contact and just don't know it yet. Today, in Malta, I will probably touch something that's been touched by a recent visitor to Mexico, New York, even San Antonio.

We're going to need to use that hand sanitizer a lot more. We also are going to need to think about what we can do to assist those suffering from the effects of crippled industries.

Panikdemik

You may be wondering what effect it's having on people who just flew in from all the corners of the earth to take a cruise, to find out that going home they're going to encounter a new airport dilemma. We are out here in an idyll and on the way home will be questioned about flu-like symptoms, all the while we're encountering some kind of exposure in these ports like, Rome today, Pompeii tomorrow, and on to Malta, some islands, then back to Barcelona. All the while, an epidemic has struck back at home in Texas and neighboring Mexico with its constant contacts with my world there. Yes, I will inquire about getting a flu shot, today when the medical center opens at 4 p.m. shipboard time - about 3 a.m. in Texas.

Museums, libraries, theatres, schools and universities were shut in Mexico City yesterday after the spread of a hitherto unidentified strain of flu, which has so far killed as many as 60 people and raised fears of a pandemic.

Authorities acted to try to control the spread of swine flu, which the World Health Organisation said had killed up to 60. Around 800 people have the "influenza-like" symptoms, the WHO said.

Mexico's government said at least 20 were confirmed to have died of the illness, and it may have been responsible for 40 further deaths. There have also been seven reported cases of the same virus in the United States: five in southern California and two in Texas. All those patients have recovered.

"This is a new virus," health minister José Ángel Córdova said in an interview with MVS radio. "We have taken these measures because this is a virus that has the potential to become a pandemic."

The minister said most of those infected were in the Mexico City metropolitan area, which has a population of 20 million, although three other Mexican states have also been affected to a lesser degree.

He said the authorities were considering extending their precautions to include shutting workplaces as well as schools, but for the moment urged employers to be tolerant of absences.

While he believed the situation was "very worrying", he also thought the epidemic was controllable.

The impact of the preventive measures on city life was felt immediately as the population woke up to news of the epidemic, announced in a late-night statement.

Radio and TV stations repeated official advice to stay away from crowded places "unless urgently necessary", and to seek medical help at the first sign of the very high fevers and acute respiratory symptoms associated with the illness.

At the city's biggest airport, airlines began requiring passengers checking in for national and international flights to fill out forms to help decide who could be at risk of carrying the virus. Anybody deemed to be a risk was reportedly being asked not to fly.

The passing of flu from swine to human is a new development, I heard today via BBC news. While I'm pretty far away from the point of its outbreak, there's no way of avoiding contact with it. As I mentioned before, in airports and in the ports we're visiting, we're meeting germs - oops, sorry, carriers - from everywhere, and will no doubt run into the usual unforseeable possible threat of diseases of all sorts. It's been a bit sobering to know that a pandemic we've always heard about has arrived.

The world has contracted for us all to just about one big contact point. No, it's not flat, it's a pinhead.

Good luck, and have you had your shots?

Business Model: Epic Fail

Now that AIG has convinced the current powers they need more money so that they can pay their astute executives hefty bonuses in order to keep them so that they can make more wise decisions, I expect that General Motors will be next in line.

Admittedly, there are differences between these two global corporations. GM actually makes a product, albeit badly, whereas AIG just produced paper in their failed units. Still, their executive philosophies seem to be about as astute. Make the employees accept less pay and fewer benefits, and/or lay them off, but reward the executives handsomely.

General Motors has just as global a reach as did AIG, which mean their failures did as well. Just what this means was nicely encapsulated in a column in Germany's Die Welt. The article is based on information provided by an "anonymous insider" of Opel, one of those companies that GM sucked up in Europe. Right from the start of the relationship, GM's executives played capitalistic hardball American style and literally sucked the respected European auto maker dry.

You know what? I get really mad at how General Motors hollowed us out, plundered us, sucked us dry. How they fed us their bullshit just to get their hands on our patents. Bullshit is the only word for it. One day, a bunch of GM people arrived here from Detroit and said, “OK, we want all your inventions, all your patents and all your know-how and we want it all right now, and in a generous quid-pro-quo, we’re going to give you GM bonds.”

Now our patents belong to General Motors and for every car Opel builds we have to pay them a fee. Need I mention that Opel never received a single cent for its patents from General Motors? The same goes for Opel’s engineering plans. Dimensions, tolerances, materials, the entire range of blueprints. That’s more important than patents because they cost a fortune to develop. GM took them all for free and now they use them for their other brand names and in countless models all over the world.

Not an auspicious beginning, but, wait, it gets worse. GM's bean counters also inserted themselves into the quality control aspect, much to the horror of the German engineers at Opel. The results were devastating.

Opel currently has an eight percent market share – not good enough. For years, GM forced Opel to make the wrong models. But worst of all, poor quality control took us down. It was a horror story. We were ashamed. Terrible. One day, more people from GM came to visit and they showed us what they understood about quality control. We pointed out the rusty longitudinal frame members on the Astra. They replied, “So what? It runs, doesn’t it?” German management could only clench their fists in private. Brand new Astras with rusty frame members, all for lack of a few cents worth of rust-proofing! Complete idiocy. We shouldn’t have swallowed that. None of us should have. But try starting a revolution against the highest corporate bosses. Nobody does that, and we didn’t either.

And complicating matters further, GM's American executives didn't have a clue as to the European auto market and the healthy niche Opel had carved out for itself. Then those same executives screamed when market share went down and did what capitalist barons do, they laid the workers off.

I spent a lot of time in the United States and I know pretty well how GM is organized. I have a great deal of respect for their technicians and engineers, but GM’s management isn’t worth discussing. Those are the people who plundered Opel and forced their model policies on us along with their concepts of quality and what a European bestseller should look like. But did we at Opel also make mistakes?

We certainly did. We failed to stage a palace revolution in 2004 when 9,000 workers had to be laid off. That’s when we should have said, “If Opel has to sacrifice 9,000 people because General Motors drove us into a ditch, we’re not going to stand for it. From here on, nobody dictates to us what the European market needs or doesn’t need. From here on, we’ll decide that.” That’s what we should have said back then.

Don't feel bad, anonymous insider. Thousands of American auto workers and buyers should have done the same damned thing, and we didn't. At least in this country we still have a chance to do something about it, at least theoretically.

We do if we can get our government's attention, but that is beginning to look unlikely because the current administration is obviously unwilling to look at the underlying faults in the system. The bottom line has to be more forward-looking than the next quarter's profit and dividend, especially during both an ecological crisis and an economic crisis.

We might just have to take to the streets. I just hope that after 233 years we remember how.

Had Enough?

The meeting of the American-Pacific Economic Conference in Peru yesterday was not pushed into action by the financial crisis. Waiting for the next administration in the U.S. became the order of the day.

Worldwide action to stop the continuing disaster shows sound fundamentals, at last. The IMF, and World Bank, will be reformed because with other economic policy theaters they have acted to divert funds intended to shore up weaker countries into over-arching financial industries rather than fight poverty and hunger. The results are more than disgrace, they are fatal to the financial community as well. Proof has been irrevocably supplied, that robbing the poor to give to the rich makes everyone poorer. Starvation has trickled up, rather than wealth trickling down.

This at last is wisdom free from political posturing. A statement by Canada's PM Harper and Mexico's President Calderon indicates that the group refuses to be pushed into action that would carry out the continuing maladministration's failed economic ideology.

...Prime Minister Stephen Harper of Canada and President Felipe Calderón of Mexico blamed the United States for starting the crisis and called for better banking regulations.

"Our closest neighbor and largest trading partner is the epicenter of the financial earthquake and global slowdown," Harper said in a speech to business leaders.

Calderon said structural problems in the global economy were allowed to fester before spiraling out of control.

"This wasn't caused by developing countries," he said.

APEC members said they strongly supported recommendations made last week in Washington by the Group of 20 nations. Nine of APEC's members belong to the Group of 20.

The Group of 20 agreed to strive for a deal on key farm and manufactured goods trade issues in the Doha round by the end of the year. It also pushed for government spending or tax incentives to spur economies and tougher oversight of the financial industry.

Pascal Lamy, the World Trade Organization's director general, will chair a meeting of senior trade officials in Geneva on Sunday to assess the chances of reaching a deal.

But even if progress were made in Geneva on nagging disputes, Bush is a lame-duck president and Obama's stamp would be needed on any final pact.

Like all financial reporters, this writer prefers to coddle the criminals' whose misappropriation of funds has brought on the disaster we are muddling through until they are out of office. Lame duck status is not the main reason the APEC ministers refuse to self-destruct further by carrying out failed directives. The occupied White House's blind insistence on throwing the world's money into the financial sector having failed is the reason for putting off action until the adults are control.

*************************************************************

At The Sideshow, Avedon has a collection of reality-based posts titled All That Glitters that detail the crimes that have brought disaster to the entire world's economic status.

Not Your Everyday House

Last day of building here in Casablanca, and I have the old song about 'There's a pink one and a green one and a blue one and a yellow one, and they're all built of ticky-tacky and they're all just the same' running through my mind. It's about the contrast of the materialism that typified our culture at the time and the kind of spirit that is going into the building here, I suppose, that started me off on that one.

Anyone want to try building a little house? I honestly think I could manage it, after the last two weeks of work. Okay, I grow things and make gardens, but this is something all of us can do with enough determination, some basic tools, and bodies enough to do the work.

The Housing for Humanity project sadly reminds me of the genius of Jimmy Carter, beginning to conserve energy and spread good will to the rest of the planet. As Professor Wombat have remarked several times, we wouldn't be in the position of dependency and combat in the Middle East that we find ourselves in if only that foresight had been left along by succeeding cynical administrations with interests in growing petroleum fuel industry. Enlisting well-inclined everyday citizens like me and the Kid for homeraising like our old frontiers gives a start to fellow humans, without all the onus or the 'moral hazards ' of that credit that the right wing has promoted to our great losses.

Home ownership is a precious goal, but the way it has been promoted to create wealth for the lender instead of honoring the individual has brought about what may be the greatest financial fiasco of all times. Selling shaky credit as a part of the process of home buying that made sense, the occupied White House has pimped a twisted concept that would give even cleanliness and order a bad name. Imagine if the directions from high positions had been genteel and public spirited in character, like the Carter administration. We could have been heading toward a world of prosperity, instead of the low places we've reached. The Bacchanlia is ending like most debauches, with destruction the result and losses that a lot of struggle will be needed to regain.

The resources squandered in the past 8 years quite probably would have been able to end world hunger. We certainly could have diminished, rather than increased, poverty and homelessness.

Working on the slow building process feels good, and contributes what we can, for those of us on this build. It is daily a reminder of the price of right wing recklessness, that takes away rather than gives. Needless to say, almost the entire crew here is eagerly looking forward to the election. We'll be going back next week to start working on an end to a regime of destruction.

Respect for the human race is a goal that seems a long way off, but we've had a participation in this project that reminds us that good leadership matters. We can start building again toward what the U.S. should be, and ought to be.

There's a pink one, and a green one and a blue one and a yellow one. In a very good way.

Narcotics Content

No, I still haven't gotten over staying at a Drury Motel and being refused access to cabdrollery because of its "drug and narcotics content". To be sure, I may have mentioned some few times that the drug war is losing, since for all the money the country has spent, there is no decline in use and sales of drugs. I may have mentioned that we lost support in Afghanistan by wiping out the crops that were supposed to support Afghan families, not processed for their own kids' use. Maybe I should tell you, though, that I'm not going to promote the use of drugs, and consider the legal ones much overused.

There has been a proposal that needs serious consideration, though, that Afghan farmers be allowed to grow poppies as they are already doing, but as a legal crop. The knee-jerk refusal of our government to take such a logical path is not a sign of purity, but of pure stupidity. One workable version of this proposal was posted yesterday at Informed Comment.

Globalization influences the relative profitability of different activities. In the US, globalization reduced profitability of steel production and increased it for software. In corrupt states, profitability soars in the production of goods and services that are internationally illegal: drugs, sex trafficking, contraband weapons or cigarettes, or counterfeit goods. . . .

Once organized crime and its supporters become the largest employers in the country, they play the same role that a more conventional business plays in other countries. They try to influence the political process. Moreover, they need to control the political arena - election of presidents and parliaments - even more tightly than "normal" business people because their very existence depends on having a government willing to tolerate violation of international rules as the country's main activity.

The government structure that emerges is "endogenous": It reflects domestic social and economic structure, which in turn is the outcome of greater international trade and economic incentives, much like other countries, except that the governance structure is, almost inevitably, more corrupt. The recent World Bank and International Monetary Fund's insistence on reforming governance in these countries is bound to fail because the cause is misdiagnosed.
(snip)
A different approach is necessary: legalize the currently illegal activities like prostitution and drug use and modify the often draconian US and European immigration laws that stimulate human trafficking. If prostitution and drugs indeed became like haircuts and candies, their production would obey the same rules: Countries that export beauty services and confectionary products are not notably more corrupt than others. Some of the current entrepreneurs would remain in these activities, others would move to others. In either case, there would be a general "normalization" akin to what was observed after prohibition on alcohol sales was lifted in the US. Thousands of "bootleggers" became normal producers of alcohol, alcohol-linked criminality decreased, and only a minority of those with preference for high risk and crime moved to other illegal activities. . . .

Good sense is rejected by the worst administration ever because it has to court a base that cannot get beyond the concept of prohibition. The crime wave that was caused by the original prohibition doesn't convince the right wing. This time, they're sure they will get control by some magical mind meld that will turn everyone into a model citizen who is exactly like them. That is to say, when the right wing envisions a perfect world, lemonade is the beverage of choice, gays are reformed by proper churching, Sunday morning resounds with church bells of a conforming tone, and the demon that lives in them dominates you and me too.

Until such hell on earth comes, there will be differences, and working with them works but mindless opposition doesn't. A purification of other countries, like Afghanistan, turns the citizens of other parts of the world against us. Imposing our idea of order, as we have seen in our occupation of Iraq, only shows us for the insensitive barbarians that we have become under right wing leadership.

We can begin making ourselves part of the real world soon, when the occupied White House is regained. The damage the U.S. wingnuts have wreaked will begin to be replaced by reasonable, reality-based policies when the hirees of the right (Justice Department practices in that matter were detailed in Diane's post earlier) have been winnowed out. That can't come too soon.

Oil/Slime Partnership

When Hunt Oil Co., headed by a longtime friend of the occupied White House, worked a deal with the Kurdistan government, no obstacles were raised. That Kurdistan government considers itself independent from the central Iraqi government, and has given out contracts to oil firms to develop oilfields there.

Now our government is claiming that au contraire, it was insisting on all consideration being given to central government in Baghdad, and the U.S. always intended to keep oil money in the hands of its minions in the Green Zone.

Speaking with a forked tongue hasn't been so prevalent since the U.S. government took away their lands from the native tribes.

A congressional committee exploring whether the Bush administration has pushed Iraq oil contracts to U.S. companies released documents Wednesday showing that Hunt Oil Co. officials and U.S. diplomats talked several times before the company signed an exploration deal in Iraq last September.

The documents show that U.S. officials expressed no objections to what the Dallas-based company was doing, despite their later criticism that the exploration deal could undermine Iraqi unity.

Included in the documents were two letters from company chief executive officer Ray Hunt to the President's Foreign Intelligence Advisory Board last year outlining his company's pursuit of an oil deal in the Kurdish region of northern Iraq.

After the Sept. 8 deal was announced, State Department officials criticized the company for signing a contract with a regional government before the Iraqi Parliament had passed a national law covering participation of foreign companies in Iraq's oil industry. President Bush, a friend of Mr. Hunt, said he "knew nothing about the deal."

The documents released Wednesday show that Hunt managers met last year with U.S. diplomats in Erbil, Iraq, on June 12 and June 15 to outline the company's interest, and were told that the U.S. government had no policy "for nor against" contracts with the Kurdish Regional Government.
(snip)
Iraq has more oil reserves than any country but Saudi Arabia and Iran, and much of the country's oil potential has not been explored. Oil fields discovered in the Kurdish region of northern Iraq under the dictatorship of Saddam Hussein were capped and seeded with land mines to prevent Kurds from gaining economic benefit.

Iraq still hasn't passed a law outlining the role of foreign companies in its oil sector, but Hunt Oil has pressed ahead with plans to do seismic surveys and other site work in an area straddling Sunni and Kurdish areas in northern Iraq.

This week, the Iraqi Oil Ministry invited 35 companies from around the world to bid on long-term service contracts to boost production by 1.5 million barrels a day from six of Iraq's largest oil fields.

Although the worst administration ever has kept from revealing just what voices formed its energy policy, or lack thereof, it is obvious that those voices were antithetical to this country's interest. Our total reliance on oil has been promoted by those 'energy' mavens, and has seriously undermined our economy.

Previous administrations, such as President Carter's, tried to guide the country into better economic postures with respect to oil usage, but the right wing persistently headed away from that safe position.

Bill Clinton did try to raise vehicle fuel-efficiency standards and impose an energy tax in the '90s, but Congress stopped him. Despite all that happened before and since, the Bush administration has barely lifted a pinky to prepare the U.S. economy for the inevitable surges.

And that's why Americans don't have money, and Europeans do.

Any power contracting with the oil companies that have disserved the U.S., the country where they began, should be wary. The nationalization of companies by several countries has been necessary to regain the wealth they have had stolen by abuse of their resources. It will remain a problem governments have to deal with in an honest effort to serve their own citizens.

Government acting against the interests of its electorate is usually a risk taken only after opponents, and public concerns, have been overthrown. The viewpoint many I have talked with online is - that that has taken place here. Hopefully not. But the war criminals are determinedly removing all doubt that they consider themselves above law, here and abroad.

Lies and rejection of public interests have characterized the occupied White House.

201 days.

Happy Independence Day Eve.

Search and Find

Okay I put in a Google search on Cost of Living. What turned up is interesting.

With the US economy bordering on recession and European economies struggling to maintain their pace of growth amidst record oil prices and rising global inflation, more Westerners are heading for Saudi Arabia and the Middle East in search of jobs and a cheaper cost of living.

“My family and I have been living and working in Riyadh and Jeddah for the past seven years,” said Diana, a nurse from Hawaii who works at a government hospital. “Despite local complaints about the high cost of rent and food in the region, it is still better living here in terms of housing and utilities rates, and food and fuel costs. In the US, many people have lost their jobs due to numerous company layoffs,” she added.

According to a recent Bloomberg survey, the US unemployment rate climbed to 5.2 percent in April from 5.1 percent the previous month.

The survey also showed that the rate of economic growth has also slowed to its lowest level since 2001 in the past six months. Currently, the economic situation of the basic consumer is worsening as home foreclosures surge, gas prices approach $4 a gallon and food prices mount.

As a result, US Federal Reserve Chairman Ben Bernanke conceded for the first time that a recession is possible, while deciding to cut interest rates yet again by a quarter point increasing the rate to 2 percent.

As I really plan not to stay in this country if the GoPervs manage to return to power, this interests me. I have another country in mind, but the advertisement of other countries for expats is not that surprising. Our future has been sold out.

Next?

Supercapitalism

I read an interesting op-ed piece published by The Shanghai Daily yesterday. The column was part review of Robert Reich's book "Supercapitalism" and part essay on American capitalism since World War II from a Chinese perspective. The criticism was, for the most part, right on the mark on both subjects.

"SUPERCAPITALISM: The Transformation of Business, Democracy, and Everyday Life" is essentially a glorification of the success of US capitalism.

Incidentally it also seeks to explore how the democratic capitalism has developed into a supercapitalism where corporations and market forces effectively neutralize input from American middle class, the bulwark of American democracy.

"The last several decades have involved a shift of power away from us in our capacities as citizens and toward us as consumers and investors," says author Robert B. Reich. ...

Reich explains that the development of US capitalism between the end of World War II and the mid-1970s depended on the balance achieved among three pillars: corporations, labor and government.

But unlike the self-contained and self-sufficient agrarian society, capitalism is never a closed system.

Classic Chinese scholar Qian Mu, in characterizing US capitalism, said Western capitalism centers on two dominant urges: the urge to make others poor; and the urge to kill others.

The first urge is self-evident given capitalists' natural voracity, for wealth is always a relative concept and enriching oneself must always come at the expense of others.

The second urge stems from the fact that, in Qian's words, "the first purpose of the greenback is to fabricate atomic weapons." Of course, today a host of other more lethal forms of weapons are being developed.

While I can't agree with Mr. Qian's second part, he does have a point with the first. Even when corporations, labor, and government are in balance (which rarely happens), the primary beneficiaries of that balance are the corporations, not the middle and lower class workers. When either labor or government, and especially when both, are factored out of the three part balance, corporations continue merrily on as the workers are marginalized even further. We are seeing that in the US at the present time.

And the columnist makes a solid point when he notes that Mr. Reich overlooks an important source for the success of corporations, most of whom are multinational or at the very least are international in the scope of their business dealings (e.g., Wal-Mart).

Reich fails to see, or finds it inconvenient to admit, that this has all been made possible by globalization.

Under the facade of co-prosperity, US supercapitalists can secure energy and goods from other countries cheaply, without having to shoulder the burden of pollution.

And therein lies the rub with corporate entities. For all the rights granted them by the US government, they really are not "persons," and moral considerations do not enter into the equation beyond the lip-service required for public relations purposes. The only thing important to corporations is making money, as quickly and as efficiently as possible.

But Reich does perceive this from a domestic point of view when he observes that companies whose only standard for success is the market have been known to pump pollution into the air and water, sex and violence into the media, and money into politics.

Even for this uncomfortable fact the author shifts the blame to consumers: if consumers did not buy, no one would sell; thus, the enemy is not the corporations, but their customers.

The author does not seem to realize the kind of control modern corporations can exercise over the consumers. ...

If Reich pursued this further, he might discover that decisions become much easier when the grab for money becomes the ruling passion, and moral deliberations have never been a disabling factor in the success of capitalism.

I haven't read Mr. Reich's book, but I think I will after this review. If this man, for whom I have had respect since he came onto the scene in the Clinton administration, has in fact written a paean to "Supercapitalism," I may have to adjust my attitude.