Quotable

"We go to zero emissions in this country, and if China doesn't follow us, we're nowhere. We've just ruined our economy, and we're nowhere. We make mistakes here, and we have a real problem. We talk about that we should lead, then people will follow, but that's kind of silly. China's not going to follow us because we're the United States. . . . You say, 'Shut down your plants' -- well, that's going to be a short conversation. They've got $2 trillion invested in their plants and they still aren't feeding all their people. If we were China, we wouldn't shut our plants down either." 

-- J. Wayne Leonard, chairman and CEO of Entergy Corp., one of the largest U.S. energy companies and the No. 2 generator of nuclear power. From here. 

Just smile and wave, boys - cause we are sinking...

The relationship between the relaxing of usury laws (laws that prohibit the charging of unreasonable or relatively high rates of interest) in the United States and the loss of our manufacturing base is explored well in a recent article in Harpers by Thomas Geoghegan. Read and weep.

It may be hard to grasp how the dismantling of usury laws might lead to the loss of our industrial base. But it's true: it led to the loss of our best middle class jobs. Here's a little primer on how it happened. First, thanks to the uncapping of interest rates, we shifted capital into the financial sector, with its relatively high returns. Second, as we shifted capital out of globally competitive manufacturing, we ran bigger trade deficits. Third, as we ran bigger trade deficits, we required bigger inflows of foreign capital. We had 'cheap money' flooding in from China, Saudi Arabia and even the Fourth World. May God forgive us - we even had capital coming in from Honduras. Fourth, the banks got even more money, and they didn't even consider putting it back to manufacturing. They stuffed it into derivatives and other forms of gambling, because that's the kind of thing that got the 'normal' big return; i.e., not 5 percent but 35 percent or even more. Go back to the top and repeat the sequence. It was what scientists call an autocatalytic reaction. It just kept going. All that cheap money would have been a good thing if it had gone into manufacturing. But it didn't. The capital inflows from big trade deficits couldn't go into manufacturing because the returns in banking were just too high. And because this autocatalytic reaction just kept going - as long as there was imbalance between finance and industry - the system could not readjust or stabilize. The bigger the deficit, the bigger the capital inflow; and the bigger the capital inflow, the bigger the financial sector became; and the bigger the financial sector became (relative to manufacturing), the bigger the trade deficit became.

And what did we as a nation gamble and bet on?

I don’t mind futures on the weather, or futures on interest rates, or even futures on the fluctuations of the price of bleacher seats for Cubs games, but I really have trouble with futures on futures, bets on the outcomes of all bets. … By 2007, the ‘notional’ values of all these bets came to $516 trillion – a number that even theoretically is hard to ponder. And that is all the capital that could have gone into real things we could have sold abroad. The money we bet in Chicago is the money we should have been investing in Detroit. And I know they’re lunkheads in Detroit, but the lunkheads ended up running the auto industry because the smart people, the Harvard dropouts and the autodidacts from Texas Tech, decided that the real money wasn’t in starting software companies or running telcos but in derivatives.

Asian psyche

Chinese reactions to the US election...

"I think the main reason Chinese have liked Obama so much is he's a black person and we Chinese have sympathy for the weak side," said Li Bingxin, an official with the China Journalists Association "They have fought so many years for equality. If the black side can win it will be a breakthrough."

One good Chinese friend had asked me days earlier if Mr. Obama would be the first black president and was surprised by the answer. "Wasn't Abraham Lincoln black?" he asked.
Um, no.
"But he did something really good for the black people, right?"

Another friend asked to know more about Mr. Obama. I played her a video clip of a speech and she was shocked when he expressed a litany of economic problems, including people struggling to pay for health care and send their children to school.

"Is this all true?" she asked, and was shocked by my affirmative answer. "We thought everyone in America was rich."

On what we could learn from the Chinese regarding bailouts

Today was yet another great day for bailouts. Firstly, there was yet another bailout of the beleaguered insurance giant AIG, then there was news that the Treasury Department on the sly decided to give American banks a tax windfall of $140 billion and thirdly, there was news of a half a trillion dollar Chinese bailout. OK, now why am I mixing the Chinese bailout with similar measures taking place here? Well, it is indeed interesting to see how these monies are being put to use. To get a quick idea on the differences between the plans hatched by the Treasury as opposed to the Chinese in bailing out, it is instructive to see the details. Or, maybe it is even time to learn from the Chinese.

On what the Chinese would do with their bailout:

At a time when major infrastructure projects are being put off around the world, China said it would spend an estimated $586 billion over the next two years — roughly 7 percent of its gross domestic product each year — to construct new railways, subways and airports and to rebuild communities devastated by an earthquake in the southwest in May.

On the sly tax windfall to US banks:

Late September, the Treasury Department issued a five-sentence notice that attracted almost no public attention. Administration officials had just given American banks a windfall of as much as $140 billion. The change to Section 382 of the tax code came after a two-decade effort by the Republican administration to eliminate or overhaul the law. Section 382 of the tax code was created by Congress in 1986 to end what it considered an abuse of the tax system: companies sheltering their profits from taxation by acquiring shell companies whose only real value was the losses on their books. The firms would then use the acquired company's losses to offset their gains and avoid paying taxes.

On bailing out AIG again and yet again:

The government created an $85 billion emergency credit line in September to keep A.I.G. from toppling and added $38 billion more in early October when it became clear that the original amount was not enough. As part of the new revision announced today, the Federal Reserve said it would reduce that credit line to $60 billion. When the reorganized deal is complete, taxpayers will have invested and lent a total of $150 billion to A.I.G., the most the government has ever directed to a single private enterprise.

So just to get this clear:

• China spends its bailout money on actual projects like infrastructure additions that benefit its citizens and in turn keep the economy humming and productive.
• In the United States, the Treasury decides to award tax write-offs to banks that shelter their profits from taxation by acquiring shell companies whose real value indicates losses on their books, but then manage to offset imaginary losses with actual capital gains to avoid any payment of taxes.

About a man on the move...

I have a little web based widget that tells me the historical importance of each day. This is what it told me today:

Mar 31, 1959: The Dalai Lama, fleeing Chinese repression of an uprising in Tibet, arrived at the Indian border and was granted political asylum.

The timing of this tidbit to the current crackdown of demonstrators in Tibet was jarring. It also makes one think about the fact that The Dalai Lama (almost half a century later) is still in a process of fleeing those same models of repression.

Mandala of Manjuvajra, Painting on cloth, Tibet, 15th Century 19" x 16"

About the painting (From a handout I got from a Sothebys booklet):
The mandala would most probably have been painted as one of a series depicting the cycle of Guhyasamaja, described as the King of Tantras, one of the earliest Buddhist tantras to have emerged from India, and one that is widely practised throughout the various Tibetan religious orders. The lineage depicted in the upper register confirms that the mandala was painted for the Sakya order, and the composition compares closely with paintings commissioned at the Ngor Monastery in the fifteenth century, and known to have been painted by Newar artists, a fifteenth century Tibetan mandala depicting Hevajra Kapaladhara.

The palace surrounded by circles of lotus petals and multi-colored flames set on a brilliant red scrollwork field strewn with auspicious emblems and with lamas and deities within roundels, with Manjushri accompanying Sakya lineage teachers in a gallery above with multi-armed deities and dharmapala in the lower register, the palace set on a dark scrollwork field, with vajra gates in the four directions, and with the six-armed and three-headed saffron-colored Manjuvajra at center seated in union with his four-armed prajna, surrounded by manifestations within the yellow, red, green and white scrollwork quadrants.

The Genoside Olympics

The 2008 Summer Olympic Games to be held later this year in Beijing seems to lurch from one controversy to the other. Recently it was the rumors of doctored air quality tests in and around Beijing that made news. Yesterday, word that Steven Spielberg was quitting as an artistic adviser to the 2008 Olympic Games made the rounds.

While doctoring air quality is reprehensible but fairly commonplace in the face of looming timelines, the reason for Spielberg’s quitting merits more attention. He is quitting because he wants to point out China's poor track record when it comes to aiding and abetting human rights abuses in Darfur. While Darfur registers dim glimmers of recognition in our country swept up by election fever, it is worth remembering that the conflict between the Sudanese government backed Janjaweed and the poorer non-Arab tribes in the south of Sudan has been raging for about 5 years now.

About 2.5 million people have been displaced and about 400,000 people killed as a result of the quasi-ethnic-cleansing systematically put in place with the Sudanese government. With America busy in a mess of its own making in the Middle East, the government of Sudan continues funding one of the largest genocides of modern times. Add to this the recent news from the Chadian capital N’djamena about Sudanese government trying to overthrow the Chadian government ostensibly to cut off supply lines to the Darfur rebels makes the case ever more pressing.

How do the Olympics fit into all this?

Well, the following facts point to the need for people to start calling these games the Genocide Olympics:

- China is Sudan's largest foreign trading investor (China has invested more than $400 million in the Darfur region alone)
- Sudan's biggest oil export destination is China (7 percent of China's imported oil comes from Sudan and China National Petroleum Corp. has a 40 percent share in the international consortium extracting oil in Sudan)
- China is Sudan's largest arms supplier (Chinese-made AK-47's have been the main weapons used to slaughter several hundred thousand people in Darfur)
- China is Sudan's chief diplomatic sponsor (active lobbying on its behalf at the United Nations to water down any and every resolution that seeks to condemn or reign in the Sudanese government).

The Olympics is supposed to be special celebration – one that is supposed to belong to all humanity – warts and all. The games are laced with stories of struggle and triumph over adversity. The Olympics has traditionally been touted as an event that portrays global unity amidst diversity. Using these Games as a backdrop, countries have been known to elevate their status around the world and hitch their wagons to lofty sounding sentiments like unified global vision and similar claptrap. Well, nothing of this sort happens to be behind the spirit of China pandering to Sudan as the facts above illustrate.

In retrospect, the simple fact remains that China has more power than any other nation on the earth (right now) to force the genocide in Darfur to come to a close.

Please start referring to the 2008 Olympics as what it is supposed to be - the Olympic games hosted by a country that directly and indirectly sponsors genoside, in other ways, a Genoside Olympics. Small steps go long ways.

Banksy, 'Ruined Landscape', 19” x 23”, oil and spray paint on canvas, 2007