Mr. Kim Becomes a Statistic

Mr. Kim runs my favorite lunch spot, Café Haru, a modest Sushi and Teriyaki restaurant near my office in Lynnwood, WA. I have been eating lunch there for over 8 years. The food has always been good. The place is clean. And even though Mr. Kim’s English is not the best, he always made me feel welcome and appreciated. And he and his wife served the best Nabi Yaki Udon in the world (that’s noodle soup with seafood, chicken and vegetables for the unlucky few who have never tried the nabi).

Lately business has been slowing down at the cafe. Several large office buildings near by have closed or laid off large numbers of workers. But I kept hoping Mr. Kim could hang on until this “recession” ended. Just like I keep hoping that my company will hang on until this “economic downturn” has corrected. Just like millions of Americans are hoping and praying for a couple more pay checks during this “slowdown”.

Mr. Kim just informed me today that Friday is his last day. The rent is due and he can’t pay it. The Café is closing down. He came out from behind the counter and hugged me and my friend Mike. He asked us to convey his thanks to our wives. And he wished us well. We wish Mr. Kim and his family well and hope they find some way to make it in this “tough economic climate.”

Mr. Kim became a statistic today. He and his small business will show up as debits and credits in a number of ledger books and quarterly statements. He is one of the nearly half a million people also suddenly out of work this week in our country. His retail space will get tallied up as under utilized. His mortgage will go into forclosure. But none of those numbers really tell the tale. None of the statistics paint the human picture and the upset and upheaval these good natured, hard working people will have to endure because of this “recession”. I don't feel the loss of Mr. Kim and his restaurant in my checkbook, I feel it in my heart.

I’m sure every one out there has a Mr. Kim or two or twenty in their lives right now. Things are pretty unsettled in the economic world right now. And it is hard to feel every unemployment number personally, but every time the news talks about down sizing, or jobless claims, or whatever the Wall Street Journal approved terminology is, behind those sanitized business terms and statistics there are real people getting their lives turned upside down.

So I wish a hardy Good Luck and pray a mighty prayer for all the Mr. Kims out there and for all of us. And I say that this is exactly why we need Single Payer Healthcare in this country. This is exactly why we need bankruptcy reforms. And this is why we need better regulations on Corporations who are willing to ignore human measures of happiness and wellness as long as their “economic” measures indicate a short-term profit in the next quarter. This is why we need to reclaim our society and map out what falls within the commons of our society and keep the profit motive and the profit margin out of those areas of our lives. If we do not, we will continue to give over our lives and our communities to Corporations who only see us as resources at best and expenses at worst. And we will continue to lose good members of our communities, people like the Kims.

Good Luck Mr. Kim. Good Luck to all of us. I think we are going to need it, because the statistics seem to indicate that we are all in for a bumpy ride. Thanks for the great soup, Mr. Kim! Many thanks!

When All You See is Fog

From Life.inc by Douglas Rushkoff :
There are two economies--the real economy of groceries, day care, and paychecks, and the speculative economy of assets, commodities, and derivatives. What forecasters refer to as "the economy" today isn't the real one; it's almost entirely virtual. It's a speculative marketplace that has very little to do with getting real things to the people who need them, and much more to do with providing ways for passive investors to increase their capital. This economy of markets--first created to give the rising merchant class in the late Middle Ages a way to invest their winnings--is not based on work or even the injection of capital into new enterprises. It's based instead on "making markets" in things that are scarce--or, more accurately, things that can be made scarce, like land, food, coal, oil, and even money itself.
Because there's so much excess capital to invest, speculators make markets in pretty much anything that real people actually use, or can be made to use through lobbying and advertising. The problem is that when coal or corn isn't just fuel or food but also an asset class, the laws of supply and demand cease to be the principal forces determining their price.
When there's a lot of money and few places to invest it, anything considered a speculative asset becomes overpriced. And then real people can't afford the stuff they need. The oil spike of 2008, which contributed to the fall of ill- prepared American car companies, has ultimately been attributed not to the laws of supply and demand, but to the price manipulations of hedge- fund speculators. Real jobs were lost to movements in a purely speculative marketplace.
This is the reality of speculation in an economy defined by scarcity. Pollution is good, not bad, because it turns water from a plentiful resource into a scarce asset class. When sixty- eight million acres of corporate- leased U.S. oil fields are left untapped and filled tankers are parked offshore, energy futures stay high. Airlines that bet correctly on these oil futures stay in business; those that focus on service or safety, instead, end up acquisition targets at best--and pension calamities at worst. Such is the logic of the speculative economy.
As more assets fall under the control of the futures markets, speculators gain more influence over both government policy and public opinion. Between 2000 and 2007, trading in commodities markets in the United States more than sextupled. During that same period, the staff of the Commodity Futures Trading Commission overseeing those trades was cut more than 20 percent, with no corresponding increase in technological efficiency. Meanwhile, speculators have only gotten better at exploiting structural loopholes to engage in commodities trades beyond the sight of the few remaining regulators. Over-the- counter trading on the International Commodities Exchange in London is virtually untraceable, while massive and highly leveraged trades from one hedge fund to another are impossible to track until one or the other goes belly- up--and pleads to be bailed out with some form of taxpayer dollars. Government is essentially powerless to identify those who are manipulating commodities futures at consumers' expense, and even more powerless to prosecute them under current law even if they could. People, meanwhile, come to believe that oil or corn is more scarce than it is (or needs to be), and that they're in competition with the Chinese or the neighbors for what's left.
The speculative economy is related to the real economy, but more as a parasite than as a positive force. It is detached from the real needs of people, and even detached from the real commerce that goes on between humans. It is a form of meta- commerce, like a Las Vegas casino betting on the outcome of a political election. Only in this case, the bets change the costs of the real things people depend on.
As wealth is sucked out of real economies and shifted into the speculative economy, people's behavior and activities can't help but become more market- based and less social. We begin to act more in accordance with John Nash's selfish and calculating competitors, confirming and reinforcing our dog- eat- dog behaviors. The problem is, because it's actually against our nature to behave this way, we're not too good at it. We end up struggling against one another while getting fleeced by more skilled and structurally favored competition from distant and abstracted banks and corporations. Worse, we begin to feel as though any activity not in some way tied to the corporate sphere is not really happening.

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Collage by Jay Larsen

Permanent War Economy

Every year, every one of our Congressmen and Senators should be forced to distribute a pie chart displaying how much of the current budget is going to the Pentagon for "defence".
Every year it has been more than 50%.
I don't think most Americans know that half their tax money goes to war spending. That it always has. And that it always will.
I for one, have some different priorities, and I am sure you do too. If I spent half our family budget on guns and ammo, I would quickly be divorced. Yet we stay married to our Military Industrial Complex as if this kind of spending is okay. Not only is it a waste of resources, it is immoral.

Released on a Friday 1999

CONGRESS PASSES WIDE-RANGING BILL EASING BANK LAWS

By STEPHEN LABATON
Published: Friday, November 5, 1999
http://www.nytimes.com/1999/11/05/business/congress-passes-wide-ranging-bill-easing-bank-laws.html?sec=&spon=&pagewanted=1&emc=eta1
Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses. The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. It would become one of the most significant achievements this year by the White House and the Republicans leading the 106th Congress.

Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses.

The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. It would become one of the most significant achievements this year by the White House and the Republicans leading the 106th Congress.

''Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,'' Treasury Secretary Lawrence H. Summers said. ''This historic legislation will better enable American companies to compete in the new economy.''

The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation's financial system. The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression.

Today's action followed a rich Congressional debate about the history of finance in America in this century, the causes of the banking crisis of the 1930's, the globalization of banking and the future of the nation's economy.

Administration officials and many Republicans and Democrats said the measure would save consumers billions of dollars and was necessary to keep up with trends in both domestic and international banking. Some institutions, like Citigroup, already have banking, insurance and securities arms but could have been forced to divest their insurance underwriting under existing law. Many foreign banks already enjoy the ability to enter the securities and insurance industries.

''The world changes, and we have to change with it,'' said Senator Phil Gramm of Texas, who wrote the law that will bear his name along with the two other main Republican sponsors, Representative Jim Leach of Iowa and Representative Thomas J. Bliley Jr. of Virginia. ''We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.''

In the House debate, Mr. Leach said, ''This is a historic day. The landscape for delivery of financial services will now surely shift.''

But consumer groups and civil rights advocates criticized the legislation for being a sop to the nation's biggest financial institutions. They say that it fails to protect the privacy interests of consumers and community lending standards for the disadvantaged and that it will create more problems than it solves.

The opponents of the measure gloomily predicted that by unshackling banks and enabling them to move more freely into new kinds of financial activities, the new law could lead to an economic crisis down the road when the marketplace is no longer growing briskly.

''I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010,'' said Senator Byron L. Dorgan, Democrat of North Dakota. ''I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.''

Senator Paul Wellstone, Democrat of Minnesota, said that Congress had ''seemed determined to unlearn the lessons from our past mistakes.''

Today’s News Metaphor for the Economy

Tanning bed bursts into flames; man escapes
LAKE WYLIE, S.C. -- A man escaped from a tanning bed as it burst into flames, sparking a fire that evacuated a Lake Wylie shopping center and damaged several stores Monday, authorities said.
No one, including the man in the bed, was hurt. But several stores in the Bethel Commons strip mall off S.C. 274 and S.C. 49 suffered smoke damage that will likely keep them closed most of the week, said Bethel Fire Chief Don Love.
Authorities are investigating what ignited the bed at Ultratan.
The man who escaped declined to give his name but said he was working on his tan when he heard a popping noise, then saw a flame at the corner of the tanning bed near his foot. He threw open the lid and jumped out, he said.

From: http://www.newsobserver.com/front/story/1436088.html

Who is to Blame?

Who is to blame?

When things go badly and when we get hurt we want someone to blame.
This economy thing (I know, what economy?) is really starting to hurt everybody (or at least to really scare everybody). So we want to blame somebody. I want to blame somebody. So who do we blame? Wall Street, Banks, Fat Cats, who?

Wall Street? Well they have been greedy bastards, and they have made tons of money collecting fees as the market went up and down. So we can criticize Wall Street for being greedy bastards. But that has been Wall Street’s job description, at least during my life time. Wall Street is set up as a capitalist playing field and they have been playing the game.

Banks? Traditionally banks make money slowly and conservatively by collecting more money than they loan out. Recently they got the rules changed and gave into pressure to make fast money. They should have known better, but they have been playing by the new rules.

Yeah, the fat cats on Wall Street and in the Banks are greedy capitalist bastards who should be watched very, very carefully. But the guys who set the rules and enforce the rules are just as much to blame and maybe more to blame. Greedy people are out there. It is the rules and the umpires that are supposed to keep the players as close to honest as possible.

Over the last several decades the people in charge of the rules have bent over backwards to change rules the players don’t like. That is called deregulation. And they have looked the other way and refused to enforce the few rules that are still officially on the books. That is called dereliction of duty. You can’t have a safe or clean game if the umpires are dirty or just not there. And the umpires have been predominately Republican appointees during my lifetime. So they are to blame, probably more so than the Wall Street players and Banking manipulators and the Real Estate speculators. They should be taken to task. They should be held responsible. And the last thing we ought to do is hire another batch of the same people who have done such a miserable job and let the system get so out of control so that they can keep this cycle of dishonesty going.

But that doesn’t mean you and I are off the hook. We had responsibilities too. We were supposed to be informed and active citizens. We were supposed to monitor the actions of our representatives and make sure that they were enforcing the rules and protecting the country and its citizens. So I think we get some of the blame here too. We hired (or at least rubber stamped) these people. We have not clearly articulated our goals, desires, and standards for participation in our economy and our society. We have not told the politicians NO. They have not told the corporate capitalists NO. And now we all get to pay the price.

So let’s take a deep breath. Admit that it took years to get things into this state. And get ready to spend years getting out of this mess. I need to live on what I make. You need to live on what you make. And we need representatives that will make government, Wall Street, the Banks, and businesses large and small live within their means. We need rules that are fair. Rules that will keep greed in check. Rules that will protect the most valuable assets and aspirations of this nation. The “Free Market” is a failure, a twentieth century concept that never worked as advertised, a social experiment of huge scope and frighteningly huge consequence that produced a very few winners and made most of us and our natural environment losers. So how about an organized and regulated market where everyone knows the rules and knows they will be penalized for breaking those rules instead? What if we quit voting against our own self interests? What if we admitted how undemocratic corporate structures are? What if we enacted rules that held people and the environment to be more valuable than capital? What if…?