Deregulation of utilities leads down to darkness.

Deregulation is a huge goal of neoliberals. Freeing corporations from oversight was always a neoliberal goal during the neoliberal ideological period which started after WWII and continues today. Neoliberalism has advanced gradually since then. Richard A. Posner in 1999, wrote about four industries where deregulation happened in “The Effects of Regulation on Competition: the Experience of the United States.” At first, after deregulation, it seemed that business was improved because profits seemed to grow. According to Posner, we have seen the deregulation of 4 industries including banking, transportation, communication, and energy. After deregulation, PG&E made huge payouts to executives and to stock holders and they neglected to maintain the utility itself. And this pattern can be seen in all of the industries affected by deregulation. Privatize gains and push the inevitable costs and consequences of failure onto the public; that’s the goal of these policies.
Not maintaining the PG&E utility is not predicted by neoliberal theory under the “Efficient Market Hypothesis,” which imagines that a CEO would do the opposite–that he or she would protect the company’s resources instead of converting them to capital that is soon spent. By way of contrast, the “Principle Agent Problem” says that CEOs can and do choose to maximize their own financial rewards instead of putting financial resources back into keeping a company healthy.
In PG&E there has been less utility maintenance, or utility improvement. Fires have happened because there has been an absence of landscape maintenance at the power lines. PG&E’s solution hasn’t been the costly one of returning to proper maintenance or improving the landscape and power lines but instead PG&E cut people’s power. California, a technology rich state, the state that once got American innovations before any other state did, has surprised everyone with its many darkened homes and people living without power for days at a time. And California’s electricity costs more than it used to. Californians have paid huge increases in the price of electricity and yet they are living under blackouts. Fires are consuming their homes.
Where did the money go and can Californians get it back? Can they get the utility’s reliability that they once enjoyed in the current policy environment of deregulation? I think that they can’t. They are experiencing a system-wide problem because of deregulation.
Even though PG&E has been fined and has declared bankruptcy, PG&E’s goal isn’t protecting or improving the public resource. Instead, PG&E’s resources have been frittered away. Why should Californians pay even more now? Because the neoliberal plan is to privatize gains and make the public pay for losses. If you don’t like this way of running the country, then you should understand that as long as neoliberalism continues, it will often go exactly this way. The partnership between government and industry is corrupt and empowers the most powerful while giving the costs to the least powerful people who are being robbed. The deregulation of industries that matter a great deal to everyone leaves most Americans in the cold and in the dark.
If you care about these issues, the issues of harm that confront all of us, buy a copy of Political Catsup with Economy Fries, for sale now at Amazon.com.

Stingy information disappoints.

Several years ago, I heard that in the Age of Information after the birth of the internet, information would be segregated out of ordinary circulation. Information would be traded among the powerful and important people and the less powerful people would be out in the cold ignorant shadows. I laughed. Surely that would never happen in the United States where people can use libraries or the internet to learn whatever they want to know about almost any topic.
Because of the Trump Presidency, everyone now has heard of “fake news.” And the nation seems divided about all kinds of political information that is traded in a gossipy way without people ever having a sense of truth about the stories and without meaningful resolution of what these political stories say about us. People are told partisan stories and they are expected to choose either the version on the left or the version on the right. What if neither version is true? What if the divisiveness that people see in our politics is the entire point of these political stories?
A confused public doesn’t really know what our government is supposed to be doing anymore. Congress is trying to impeach the President again, a la Nixon, but what Congress isn’t doing is honestly trying to improve anything. We are supposed to believe that Congress is legitimately distracted when they are too busy to get anything done but the great undoing. The Congressional political trajectory has been destructive enough to cause the ominous loss of our middle class, and Congress still hasn’t reformed its policies. Doing more of the same banking deregulation, tolerance for monopolies, privatizing government and privatizing military, trading foreign influence, fiscal and monetary malfeasance and malinvestment isn’t helping anyone in the long run because it destroys more than it can ever build. Neoliberalism has short circuited our Country’s ability to solve its own problems. Gradually our political and economic problems are undermining still more of what the middle class once had and once could do.  Congress’s bad policy package is making what was once easy to accomplish, now impossible.
If you want to learn more about the changing political ideologies in the U.S. over its political history, buy a copy of Political Catsup with Economy Fries available at Amazon.com.

Weapons of mass financial destruction indeed.

Back during the Great Recession, Warren Buffet said that derivatives are weapons of mass financial destruction. And yet they remain with us. When I did research to learn why derivatives can be so destructive to our economy the answer was mind blowing.

It turns out that a derivative is a lot like an insurance policy but with two main differences. Whereas an insurance instrument can be purchased to hedge against a financial loss and never a financial gain, a derivative can be used to hedge against either a financial gain or a financial loss. Also an insurance instrument requires that the person who is insuring against a loss must own the asset but a derivative can be purchased by someone who doesn’t own an asset about which the bet is being made. This betting without owning causes destruction. Why? Because it means that unlimited bets can be made about a change in value of an asset without the pesky need to invest capital in ownership. Not owning but still betting can multiply the consequences of a given outcome far beyond the owners of a given asset. Instead of only owners losing a bet, many other people who bet wrong lose and must pay. If they can’t pay, they go bankrupt and their bankruptcy can cause imbalances in market liquidity which is what caused the giant crashes that affected the global financial markets during the Great Recession.

At the time of the Great Recession when there was a shortage of liquidity caused by a lot of losing derivative bets, the Federal Reserve along with the U.S. Treasury decided that printing more money would salvage the economy. Supposedly, governments that don’t prohibit their own money printing can print unlimited amounts of money in order to stimulate their economy. Why is it bad to print unlimited amounts of money? Because it causes inflation as the value of the money decreases. When the Great Recession happened, economists seemed to focus on preventing a deflation and people in the Federal Reserve foolishly believed that causing inflation would be beneficial. Although inflation according to our government is supposedly very low, inflation in an ordinary education, ordinary everyday medicines, everyday groceries, an ordinary house, or an ordinary car are extremely high and those items are quite expensive when you compare their price today to their price ten years ago. To prevent a deflation, the Treasury printed more money. But money has to represent something real to retain its value. Trading money as though it’s a commodity in derivative bets across the foreign exchanges has harmed our economy’s ability to set reasonable prices in people’s ordinary lives. Here’s an example.

What is your house worth? The cost of a house was once based on a real market of buyers and sellers who usually had a job that paid their bills within a comfortable range of what they could afford and what they wanted. Their job and income was secure enough that they could invest in a house and live in it. Why should a house cost double or triple now compared to what it cost ten years ago? Especially when you realize that real wages haven’t increased, shouldn’t a house cost about the same? Is the land worth more? Does it do more now than it did? Has construction material doubled or tripled in price? Do construction companies pay their employees double or triple the wages that they used to pay ten years ago? No. When mortgage interest rates fell banks couldn’t make enough money off of interest to make a profit on their loan under conditions of ordinary risk. That is what made it necessary to double or triple the price of a house. The increase in cost is for giving the bank a profit in an atmosphere of low interest fees and higher risk of a loan default. These same low interest rates allowed the U.S. government to take on enormous debt in order to circulate more money to prevent a deflation. Another way to look at house price increases in our current economy has to do with value. A house offers a stable use value that risk does not have. As risk continues to offer less return, the use value of a house goes up because investors want to trade their value losing capital for a house with a stable use value.

Is this working? Well…fast forward to the present and ask yourself how are investors doing today? It seems they feel insecure. I keep hearing about how the Stock Market has become the cause of an “everything bubble.” I hear the President asking the Federal Reserve to lower interest rates supposedly to provide cheap loans to investors and keep our economy thriving. The Federal Reserve is trying to tread water and not drown by being slow to increase or decrease interest rates. Meanwhile the velocity of money continues it’s slow global circulation because so much money has been printed and yet little wealth is being created with that money. Money is gradually losing its ability to resemble something that you can trade for something else of real value. Money going into derivative bets or other risky investments looks shakier every day. Since the Great Recession, ordinary people have experienced extremely slow growth in their own everyday economy. They also have high costs and insecure employment because of mergers and acquisitions that constantly change business ownership and destroy jobs. Money has to represent something that has real value and trading money in derivatives combined with low interest rates has generated economic insecurity. Meanwhile, derivatives remain part of our economy creating havoc and ultimately costing everyone hugely. If you want to understand these issues more fully, and other issues involving the connection between politics, economics and opportunity, buy a copy of Political Catsup with Economy Fries at Amazon.com.

Where’s the fun?

It seems that the predictions I read back in the nineties might be coming true. I read then that sociologists were predicting domestic terrorism. It’s what we see now in public places where people congregate when there’s someone who starts shooting. What trends did sociologists see then that caused them to predict domestic terrorism?

Was their prediction based on the U.S. having a shrinking economy in terms of the opportunities available to most Americans? Was it based on high inflation being experienced by most consumers for cars, houses, medical insurance, and education? Was it based on fewer good paying jobs with an ever smaller middle class or on falling real wages? Was it based on the use of psychoactive drugs in young and old people as a strategy to control depression or mood? What about our society changed to cause this phenomenon of domestic terrorism?

I remember that I didn’t believe that the prediction would come true back then, because I believed that our society was more stable than that. And it was. I remember that I didn’t believe in a growth of “tribalism,” which was the reason given back then for a growth of domestic terrorism. Even when you swap out “tribalism” for “identity politics” that to me, just isn’t enough to cause someone to go on a shooting spree.

Another thing that made me wonder about our society was the closure of “Toys R Us.” I seldom had a need for their products because I’ve never had a child. Occasionally I would go to “Toys R Us” to buy a shower gift or a birthday gift for a friend’s or relative’s child. I remember the isles were full of stuff but mostly empty of shoppers. So much fun has disappeared from American life that the vanishing of “Toys R Us” felt like a metaphor for all the fun that I noticed has been missing in most people’s lives. An investor has decided to reopen a few “Toys R Us” stores and to shrink their size.  But still, their market has clearly gotten smaller than it once was.

Today, people are making hard choices because they have fewer economic resources. Fewer vacations. Fewer nights of going out to a restaurant. Fewer new anything. Probably fewer long lasting relationships and definitely fewer weddings and fewer children. And when we go to shopping centers or the movies, it seems there’s a lot of reruns. Without invention, there’s less fun.

Engineers test metals or other materials for the force required to break them. Something about our society is exerting enough force to break our people. How much stress is needed to break a human heart or to cause a person to go crazy? Maybe it’s our politics or our economy.

As neoliberalism has advanced, there’s been less choice. And markets have shrunk. Job markets are smaller so fewer people can plug into the economy by using their training and talents. We see a less stable society. The solution can’t be more consumerism. What do we need instead of a new car or new kitchen granite countertops or a European vacation or a Master’s degree or Doctorate?

At this point I can say that we don’t need more government interference with the now broken economy. The government’s interference in economic matters and its ambition to rule over global politics and markets has been too large a goal to realize. Our politicians should give up on those outlandish ambitions. They have littered our America with broken lives. We also don’t need more gun control. We do need fewer monopolies and less political cronyism. It’s good that Obamacare has failed and it’s failure shows us that our politicians should stop trying to control people’s medical choices. We had economic stability before deregulation and we can regain economic stability. We should change our course politically and economically. We don’t need to pretend that everything is ok when clearly it isn’t.

If you want to get a refresher on U.S. history from the perspective of how our political ideologies have changed and if you want to understand how politics and economics combine affect our opportunities buy a copy of Political Catsup with Economy Fries at Amazon.com.

Better self, better world.

I like reading so that I can learn about our shared world and also my inner world. Right now, one of the books that I’m reading is entitled Writing the Breakout Novel: Insider Advice for Taking Your Fiction to the Next Level, by Donald Maass, published in 2001. I’m reading a few of his books to learn how to write fiction. He’s a published writer and an agent for writers. He seems to understand complexities found in characters and plots and how to connect characters and plots with emotions that reach the reader.
I also like the arts in an all embracing sort of way. When I decided to study in the arts it was hard for me to pick just one kind. Music, literature, fine arts of painting, drawing and sculpture are all wonderful areas to explore. I finally selected drawing and painting, but I also briefly studied guitar and I have written a non-fiction book.
I think that these arts that surround us sometimes point out the way that humanity is moving or tell us all where we might go or where we are right now. I liked art about the wars of the twentieth century when I was a young adult because the work told tragic stories in pictures that we could all understand in our hearts. I liked illustration, like N.C. Wyeth’s work, when I was just a kid, when he captured images of imagination that made everyday life feel full of adventures I longed to experience. I liked ideas in art too–like Minimalism where essential shapes can be investigated in 2-D or 3-D, or Impressionism where light and form can be explored by a painter inside a very short time span (like Monet painting the same church front at the same time of day, every day, until the painting was fininished). I have liked photography where an image was framed by the photographer’s camera to emphasize the photographer’s perspective or meaning to an audience of viewers.
Since the turn of the century, I’ve been wondering which art form is revealing our society’s destiny in the twenty-first century. Intuition in art can sometimes lead the way. I can’t find it in visual arts, but I found a hint the other day in Donald Maass’s book listed above.
I was reading Chapter Seven: Contemporary Plot Techniques. Donald Maass said that there has been a “progressive narrowing of point of view.” This already is interesting because I can confirm that to be true. I’ve been reading books from school libraries, public libraries and books that I’ve purchased all my life and I’ve noticed that the way that stories are told has changed. Maass says that there’s been a change from stories being told by the “author’s voice” to stories being told by “omniscient narration” to stories told by “objective narration” to “first- and third-person narration” to “close third-person point of view.” Maass links this evolution to the public’s “search for authentic experience.” People aren’t looking for a journalistic report or an objective viewpoint. In our twenty-first century stories, it is the character’s direct experience only that convinces us to partake in the story’s unfolding.
He goes on to say that plots are driven by two kinds of changes–transformational changes to the character and to the character’s world. He says this is true for every genre.  And I can say that I have observed that too. What Maass is saying about writing good novels is important not just as a practical guide to writing good fiction. It also points out that people are hungry for transformational change. The kind of book that appeals to the public nowadays is about transforming ourselves and our society. And it isn’t a choice of only one kind of change but rather of both kinds. Transformational change at the individual and social level is what people hunger for today. While it is true that character evolution has always been important to stories, this new emphasis may indicate something more than only character development.
When I have studied politics, I have noticed that the power of the individual was emphasized during classical liberalism, the power of social welfare was emphasized during modern liberalism and the power of the organization has been emphasized during neoliberalism. In the political past, ideologies didn’t seek to empower individuals, society and organizations at once. To be sure, ideological changes affect individuals, society, and organizations but what about the power structures that make it all happen?  Our current change towards a new politic may be one that empowers both individuals and society at once and it may be more all-embracing. I hope that the new politic will satisfy people by empowering them to do something good.
If you want to learn more about political ideologies over the history of the United States, buy a copy of Political Catsup with Economy Fries at Amazon.com.

Hoping for more.

There’s a lot to hope for.
If you ask an anthropologist what causes human conflict she will probably say that the culprit is usually a limited essential resource. In our age of technologies a limited needed resource is energy. In an age of Peak Oil, when growing amounts of money are needed for oil discovery, extraction and refining and in a climate of increasing demand, we face increasing economic and political strife.
It’s been quiet on the energy front for a while but I noticed in 2015 there were some new fusion patents and more money has been going into more fusion research ever since then. There are two kinds of fusion: low energy nuclear reaction fusion (LENR) and torus produced fusion with hot plasma. LENR has an interesting side effect: room temperature superconducting. That can potentially revolutionize computer technology and energy technology. LENR also provides an avenue to recycle hot radioactive wastes left over from the twentieth century’s race to obtain the bomb and nuclear power. Researchers in torus hot fusion continue to scale down the plasma chamber in an effort to control the materials consequences of manipulating plasma. I’m hoping that fusion energy will help our economy gain a new prosperity as we continue living after Peak Oil.
Peak oil has had economic consequences because we see economic side effects from its rising costs. Oil and its products pervade our economy from pesticides to paints to fertilizers to heating homes and businesses to driving cars to making plastics and rubbers. Large sums have been loaned to shale oil companies in an effort to get more oil and there’s a cost for those loans which can really cut into a shale company’s profits in the unstable price environment of petroleum products. Political strife across the globe has many causes in the old oil economy. A new fusion economy could initiate new opportunities.
Fusion power would be a new technology that would create a new kind of energy marketplace. Some people would specialize in disseminating it. And fusion production would be cheaper than oil production. Saving money on energy would make food and travel and even heating and cooling buildings cheaper. Fusion doesn’t require a refinery system the way that processing oil does and that would save money. Fusion energy would reduce pollution. New jobs would come out of a new fusion economy. And it looks like there’s a less limited supply of what’s required for fusion energy production.
It may well be that every bad thing that’s come out of financialization has happened in part out of the need to maneuver within an environment of economic challenges caused by Peak Oil. If that’s true, then it would make sense that fusion energy could bring about a renewal of solvency in banking and in government and more political accord because of reduced strife for shrinking economic resources. This could help stabilize our fractious nation.That could encourage new economic successes in many areas, stimulating employment and helping people to live better lives. If more economic resources were available, a breakthrough in health, for example, in medical technologies like those for restorative medicine might get a boost. Many knock-on effects could happen in a new energy economy. People might live more peaceful and productive lives.
No doubt, a transition from a Peak Oil economy to a fusion energy economy would change today’s opportunities to different ones. But it seems that there would be more opportunities overall and that would matter to most people all around the world. Fusion energy might provide everyone with a new opportunity to grow.
If you want to learn about how we got to where we are in politics and if you want to understand better how economics and politics are connected, buy a copy of Political Catsup with Economy Fries, available at Amazon.com.