1624. How to Shrink the Economy without Crashing It: A Ten-Point Plan

By Richard Heinberg, Post Carbon Institute, November 4, 2014

The human economy is currently too big to be sustainable. We know this because Global Footprint Network, which methodically tracks the relevant data, informs us that humanity is now using 1.5 Earths’ worth of resources.

We can temporarily use resources faster than Earth regenerates them only by borrowing from the future productivity of the planet, leaving less for our descendants. But we cannot do this for long. One way or another, the economy (and here we are talking mostly about the economies of industrial nations) must shrink until it subsists on what Earth can provide long-term.

Saying “one way or another” implies that this process can occur either advertently or inadvertently: that is, if we do not shrink the economy deliberately, it will contract of its own accord after reaching non-negotiable limits. As I explained in my book The End of Growth, there are reasons to think that such limits are already starting to bite. Indeed, most industrial economies are either slowing or finding it difficult to grow at rates customary during the second half of the last century. Modern economies have been constructed to require growth, so that shrinkage causes defaults and layoffs; mere lack of growth is perceived as a serious problem requiring immediate application of economic stimulus. If nothing is done deliberately to reverse growth or pre-adapt to inevitable economic stagnation and contraction, the likely result will be an episodic, protracted, and chaotic process of collapse continuing for many decades or perhaps centuries, with innumerable human and non-human casualties. This may in fact be the most likely path forward.

Is it possible, at least in principle, to manage the process of economic contraction so as to avert chaotic collapse? Such a course of action would face daunting obstacles. Business, labor, and government all want more growth in order to expand tax revenues, create more jobs, and provide returns on investments. There is no significant constituency within society advocating a deliberate, policy-led process of degrowth, while there are powerful interests seeking to maintain growth and to deny evidence that expansion is no longer feasible.

Nevertheless, managed contraction would almost certainly yield better outcomes than chaotic collapse—for everyone, elites included. If there is a theoretical pathway to a significantly smaller economy that does not pass through the harrowing wasteland of conflict, decay, and dissolution, we should try to identify it. The following modest ten-point plan is an attempt to do so.

1. Energy: cap, reduce, and ration it. Energy is what makes the economy go, and expanded energy consumption is what makes it grow. Climate scientists advocate capping and reducing carbon emissions to prevent planetary disaster, and cutting carbon emissions inevitably entails reducing energy from fossil fuels. However, if we aim to shrink the size of the economy, we should restrain not just fossil energy, but all energy consumption. The fairest way to do that would probably be with tradable energy quotas.

2. Make it renewable. As we reduce overall energy production and consumption, we must rapidly reduce the proportion of our energy coming from fossil sources while increasing the proportion from renewable sources in order to avert catastrophic climate change—which, if allowed to run its current course, will itself result in chaotic economic collapse. However, this is a complicated process. It will not be possible merely to unplug coal power plants, plug in solar panels, and continue with business as usual: we have built our immense modern industrial infrastructure of cities, suburbs, highways, airports, and factories to take advantage of the unique qualities and characteristics of fossil fuels. Thus, as we transition to alternative energy sources, the ways we use energy will have to adapt, often in profound ways. For example, our food system—which is currently overwhelmingly dependent on fossil fuels for transport, fertilizers, pesticides, and herbicides—will have to become far more localized. In the best instance, it would transition to an ecological, perennial-based agriculture designed for the long haul.

3. Restore the commons. As Karl Polanyi pointed out in the 1940s, it was the commodification of land, labor, and money that drove the “great transformation” leading to the market economy we know today. Without continued economic growth, the market economy probably can’t function long. This suggests we should run the transformational process in reverse by decommodifying land, labor, and money. Decommodification effectively translates to a reduction in the use of money to mediate human interactions. We could decommodify labor by helping people establish professions and vocations, as opposed to seeking jobs (“slavery on the installment plan”), and by promoting worker ownership of companies. As economist Henry George said over a century ago, land—which people do not create by their labor—should be owned by the community, not by individuals or corporations; and access to land should be granted on the basis of need and the willingness to use it in the community’s interest.

4. Get rid of debt. Decommodifying money means letting it revert to its function as an inert medium of exchange and store of value, and reducing or eliminating the expectation that money should reproduce more of itself. This ultimately means doing away with interest and the trading or manipulation of currencies. Make investing a community-mediated process of directing capital toward projects that are of unquestioned collective benefit. The first step: cancel existing debt. Then ban derivatives, and tax and tightly regulate the buying and selling of financial instruments of all kinds.

5. Rethink money. Virtually all of today’s national currencies are loaned into existence (usually by banks). Debt-based monetary systems assume both the growing need for debt, and the near-universal ability to repay it, with interest—relatively safe assumptions when economies are stable and expanding. But debt-based money probably won’t work in an economy that is steadily contracting: as the amount of outstanding debt ebbs in tandem with rising numbers of defaults, so does the money supply, leading to a deflationary collapse. In recent years the panic to prevent such a collapse has led central banks in the US, Japan, China, and the UK to inject trillions of dollars, yen, yuan, and pounds into their respective national economies. Such extreme measures cannot be maintained indefinitely, nor reverted to repeatedly. When debt-based currencies do fail, alternatives will be needed. Nations and communities should pre-adapt by developing an ecosystem of currencies serving complementary functions, as advocated by alternative monetary theorists such as Thomas Greco and Michael Linton.

6. Promote equity. In a shrinking economy, extreme inequality is a social time bomb whose explosion often takes the form of rebellion and revolt. Reducing economic inequality requires two simultaneous lines of action: First, reduce the surplus of those who have the most by taxing wealth and instituting a maximum income rate. Second, improve the lot of those who have least by making it easier for people to get by with minimal use of money (prevent evictions; subsidize food and make it easier for people to grow their own). This effort can be helped through the widespread cultural glorification of the virtue of material modesty (the reverse of most current advertising messages).

7. Reduce population. If the economy shrinks but population continues to expand, there will be a smaller pie to divide among more people. On the other hand, economic contraction will entail much less hardship if population ceases growing and starts to decline. Population growth leads to overcrowding and hyper-competition anyway. How to achieve population decline without violating basic human rights? Enact non-coercive policies to promote small families and non-reproduction; wherever possible, employ social incentives rather than monetary ones.

8. Re-localize. One of the difficulties in the transition to renewable energy is that liquid fuels are hard to substitute. Oil drives nearly all transportation currently, and it is highly unlikely that alternative fuels will enable anything like current levels of mobility (electric airliners and cargo ships are non-starters; massive production of biofuels is a mere fantasy). That means communities will be obtaining fewer provisions from far-off places. Of course trade will continue in some form: even hunter-gatherers trade. Re-localization will merely reverse the recent globalizing trade trend until most necessities are once again produced close by, so that we—like our ancestors only a century ago—are once again acquainted with the people who make our shoes and grow our food.

9. Re-ruralize. Urbanization was the dominant demographic trend of the 20th century, but it cannot be sustained. Indeed, without cheap transport and abundant energy, megacities will become increasingly dysfunctional. Meanwhile, we’ll need lots more farmers. Solution: dedicate more societal resources to towns and villages, make land available to young farmers, and work to revitalize rural culture.

10. Promote the pursuit of social and inner sources of happiness. Consumerism was a solution to the problem of overproduction; it entailed engineering the human psyche to become more individualistic and to demand ever more material stimulation. Beyond a certain point this doesn’t make us happier (in fact, just the opposite), and it can’t go on much longer. When people’s ability to afford consumer products wanes, as does the economy’s ability to produce and deliver those products, people must be encouraged to enjoy more traditional and innately satisfying rewards—including philosophical contemplation and the appreciation of nature. Music, dance, art, oratory, poetry, participatory sports, and theater can all be produced locally and featured at seasonal festivals: fun for the whole family!

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More recommendations could certainly be fielded, but ten is a nice round number.
Surely many readers will wonder: Isn’t this just running “progress” in reverse, and isn’t doing so antithetical to our core value as a society? Yes, during the past few centuries we have become hooked on the idea of progress, and we have come to define progress almost entirely in terms of technological innovation and economic growth—two trends that are approaching dead ends. If we wish to avoid the cognitive pain of having to relinquish our deep-seated infatuation with progress, we could redefine that word in social or ecological terms. Similarly, many people who judge that society is far too wedded to the pursuit of economic growth to be persuaded to give it up advocate redefining “growth” in terms of increasing human happiness and societal sustainability. Such efforts at redefinition have some limited usefulness. Certainly the act of collective self-limitation involved in deliberately shrinking the economy would denote a new level of species maturity that would likely be reflected throughout our culture. Socially and spiritually, this would be a step forward—and is hence perhaps describable as progress or growth. But it is hard to monopolize the redefinition of terms like “progress” or “growth”: there are already powerful interests hard at work tying new meanings of the latter to inventive interpretations of manicured and manipulated GDP, employment, and stock market data.

It might be more honest to refer to the program outlined above as a simple reversion to sanity. It is also our best chance for preserving the best of civilization’s scientific, cultural, and technological achievements over the last few centuries—achievements that could be lost altogether if society collapses in a way similar to past civilizations.

The recommendations above imply the ability and willingness of elites to turn the ship around. But both their ability and willingness to do this are questionable. Our current political system seems designed to prevent collective self-limitation, and also to resist serious attempts at reform. The plainest gauge of the likelihood of the implementation of my ten-point plan is a simple thought exercise: name a single prominent politician, financier, or industrialist who would propose or advocate even a small portion of it.
Still, there’s a deep irony here. While there’s no support for degrowth among elites, many if not most of the elements of the above plan have a very large real or potential constituency among the populace in general. How many people would prefer life in a small, stable community to existence in an overcrowded, hyper-competitive megacity; a profession to a job; debt-free life to the chains of onerous financial obligations? Maybe by articulating the plan and its objectives, and exploring the implications in more detail, we can help this constituency coalesce and grow.

(A talk given at a Teach-in on Techno-Utopianism and the Fate of the Earth, http://www.brownpapertickets.com/event/821939 organized by International Forum on Globalization, October 26, 2014, at The Great Hall at The Cooper Union, New York City)

1623. Families Under Rubbles: Israeli Attack on Inhabited Homes in Gaza Strip

By Amnesty International, 2014

Left, Palestinian men burying members of a family who were killed in an Israeli airstrike in Gaza this summer. Right, Israeli residents took cover from a rocket attack by Palestinian militants. A 50-day war was fought before a cease-fire was reached in August. Photos: Sergey Ponomarev for The New York Times; Gil Cohen Magen/Agence France-Presse — Getty Images

The following is the "Introduction" to the fifty page Amnesty International report on human right violations in the Israeli war against the Palestinian population in Gaza Strip. The full report can be found here.  This is the third war people of Gaza Strip have faced in 6 years. KN

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Introduction
Israeli air strikes during Israel’s recent military operation in the Gaza Strip, Operation Protective Edge, targeted inhabited multistorey family homes. Whole families, including many women and children, were killed or injured by these targeted strikes and, in addition, there was extensive destruction of civilian property.

These attacks were carried out in the context of a 50-day conflict, from 8 July until 26 August, in which the scale of destruction, damage, death and injury to Palestinian civilians, homes and infrastructure was appalling. According to figures released by the United Nations, some 1,523 civilians, including 519 children, are among more than 2,192 Palestinians who died during the operation. By the time of the ceasefire on 26 August there were approximately 110,000 internally displaced persons living in emergency shelter and with host families. The UN estimated that about 18,000 housing units were destroyed or rendered uninhabitable, leaving approximately 108,000 people homeless. A further 37,650 housing units were damaged.

At the same time, Hamas and other Palestinian armed groups fired thousands of indiscriminate rockets and mortar rounds into civilian areas of Israel, killing six civilians, including one child.3 Dozens of other Israelis, including at least six children, were directly injured by rockets or shrapnel. A total of 66 soldiers were killed in the fighting.

Amnesty International has documented and is continuing to document serious violations of international humanitarian law, including unlawful killings and injuries to civilians and destruction of civilian property, both by Israel and by Hamas and Palestinian armed groups.
In this report Amnesty International examines targeted Israeli attacks carried out on inhabited civilian homes in the light of Israel’s obligations under international humanitarian law, specifically the rules on the conduct of hostilities. It does so by focusing on eight cases, in which targeted Israeli attacks resulted in the deaths of at least 111 people, of whom at least 104 were civilians, including entire families, and destroyed civilian homes. The cases were chosen for a variety of reasons, including the availability of witnesses, the clarity of the evidence and the number of civilians killed. They include two cases in which there were particularly high civilian casualties (at least 33 civilians killed in the bombing of the al-Dali building and 25 in the destruction of the Abu Jame’ family home).

In all the cases documented in this report, there was a failure to take necessary precautions to avoid excessive harm to civilians and civilian property, as required by international humanitarian law. In all cases, no prior warning was given to the civilian residents to allow them to escape.

In four of the cases (the attacks on the Abu Jame’ family home, the al-Dali building, the al- Bakri family home and the Abu Dahrouj family home), in which a total of at least 66 civilians were killed, Amnesty International has been able to identify a named individual who was an apparent member of an armed group. However, even if a fighter or a military objective was indeed present (or thought to have been present), the loss of civilian lives, injury to civilians

Israeli attacks on inhabited homes and damage to civilian objects appear disproportionate, that is, out of proportion to the likely military advantage of carrying out the attack, or otherwise indiscriminate. However, due to lack of information from the Israeli authorities, Amnesty International cannot be certain in any of these attacks what was being targeted. In cases where there is no military objective, an attack could violate the international humanitarian law prohibition of direct attacks on civilian objects and on civilians. Attacks directed at civilian objects or at civilians, or disproportionate and indiscriminate attacks that kill or injure civilians are war crimes. The fact that, in these eight cases which caused the deaths of at least 104 civilians, Israel has made no statement about who or what was being targeted, or even acknowledged that it carried out these particular attacks and the loss of civilian lives that they caused, is deeply worrying.

These attacks fit into a broader pattern. In addition to the cases detailed in this report, Amnesty International has documented more than 12 other targeted attacks that caused the deaths of civilians, including children, and destroyed all or part of inhabited home. Most appear to have been aerial attacks conducted by manned aircraft. Looking more widely at Israeli attacks of different kinds, including attacks during heavy fighting in areas such as al- Shuja’iyeh and Khuza’a, the Israeli human rights organization B’Tselem listed 72 homes destroyed in the Gaza Strip in whole or in part with families inside them up until 11 August 2014. This destruction killed 547 people, of whom 125 were women under the age of 60, 250 were minors, and 29 were people over the age of 60.

In all the cases described in this report and other similar ones during the conflict, the onus is on Israel to provide information concerning the attacks and their intended targets. Israel must also explain what precautions were taken to spare civilians in attacks that targeted military objectives but resulted in civilian deaths and injuries and destruction of civilian homes. The cases documented in this report, as well as other credible allegations of serious violations of international humanitarian law, must be promptly, independently and impartially investigated, in accordance with international law and standards and, wherever there is sufficient admissible evidence, alleged perpetrators, be they military or civilian officials, must be brought to justice in proceedings that fully respect international fair trial standards. Civilian victims and their families should receive full reparation. In addition, it is important that, following investigations, the Israeli military should learn the lessons of this and previous conflicts and change its military doctrine and tactics for fighting in densely populated areas such as Gaza so as to ensure strict compliance with international humanitarian law, in particular the principles of distinction, proportionality and precaution.

METHODOLOGY
Amnesty International has been unable to send a delegation of researchers to visit the Gaza Strip since the beginning of the conflict. The Israeli authorities have refused, up to the time of writing this report, to allow it and other international human rights monitors to enter the Gaza Strip through the Erez crossing with Israel, despite the organization’s repeated requests since the beginning of the conflict to do so. The Egyptian authorities have also not granted Amnesty International permission to enter the Gaza Strip through the Rafah crossing with Egypt, again despite the organization’s repeated requests to do so.

Amnesty International has consequently had to carry out research remotely, supported by two fieldworkers based in Gaza who were contracted to work with the organization for periods of several weeks. They travelled extensively within the Strip, visiting every site described in this briefing more than once, as soon as possible after the damage took place, interviewing victims and eyewitnesses of every case recorded and taking photos and videos of the sites. The organization consulted on the interpretation of photos and videos with military experts. It extensively reviewed relevant statements by the Israeli military and other official bodies, but they provide no indication as to whether any of the attacks in this report were directed at a particular military target. Amnesty International has therefore made considerable efforts to assess the military purpose, if any, of each attack. Amnesty International also studied relevant documentation produced by UN agencies, Palestinian, Israeli and other non- governmental organizations, local officials, media, and others who monitored the conflict, and consulted with them as needed.

Despite these efforts, the lack of access for Amnesty International’s researchers, as well as military and medical experts who would have accompanied them, has clearly hindered the work of Amnesty International, as it has hindered the work of other human rights organizations that have wished to document violations of international law in the Gaza Strip. 

Medical evidence and evidence of weapons used, both in damaged buildings and elsewhere, help monitors to assess how, with what and why something was targeted, but they disappear quickly. Suffering from a great shortage of living space, residents of the Gaza Strip started almost immediately after the conflict, as after other recent conflicts, to clear up the rubble and use what can be salvaged to rebuild their homes. Fragments of munitions which would have shown what weapons were used have been carried off from the rubble of destroyed homes by civil defence workers, souvenir hunters and others.

Governments who wish to hide their violations of human rights from the outside world have frequently banned Amnesty International from accessing the places in which they have been committed. Although Amnesty International researchers have consistently been able to access Israel and the occupied West Bank, they have not been allowed by the Israeli government to enter the Gaza Strip through the Erez crossing since June 2012. The UN Fact- Finding Mission on the Gaza Conflict, which was set up by the UN Human Rights Council and reported in 2009 on violations of international law by all sides during Israel’s Operation Cast Lead in the Gaza Strip criticized this policy stating: “The Mission is of the view that the presence of international human rights monitors would have been of great assistance in not only investigating and reporting but also in the publicizing of events on the ground.”6 It added: “The presence of international human rights monitors is likely to have a deterrent effect, dissuading parties to a conflict from engaging in violations of international law.”

Amnesty International sent its findings to the Israeli authorities on 8 October 2014, requesting any relevant information that could be provided on each of the cases in this report. It sent a memorandum to the three Israeli mechanisms investigating aspects of Operation Protective Edge – the State Comptroller, the army’s General Staff Mechanism for Fact-Finding Assessments, and the Knesset Foreign Affairs and Defense Committee – as well as to the army’s Chief of General Staff, the Prime Minister and the Ministers of Defense, Justice and Foreign Affairs. It asked for explanations of why each of these attacks was carried out; who or what was being targeted; what means of attack were selected; what precautions were taken to minimize the risk of harm to civilians and civilian objects; and whether any investigation had taken place or was ongoing. It had not received a response before this report was finalized, but any response received will be reflected in future publications.

1622. U.S. Oil Prices Fall Below $80 a Barrel

By Clifford Kraus, The New York Times, November 2, 2014 

Recent prices at the pump in
Chattanooga, Tennessee, Photo:
John Rawlston, NYT, via AP

HOUSTON — The benchmark American oil price fell below the symbolic $80-a-barrel threshold on Monday, swooning to two-year lows, after Saudi Arabia aimed to shore up its dwindling exports to the United States by cutting its selling price for the American market.

The Saudi move and the deepening fall in oil prices are both symptoms of the oil-drilling boom in the United States, which has lifted production by more than 70 percent over the last six years and reduced the nation’s imports from OPEC producers to roughly half of what they once were.

The lower oil prices are bringing relief to consumers at the pump in time for the holiday shopping season. The national average price for regular gasoline has fallen below $3 a gallon for the first time in four years, and experts say it could easily drop 25 cents more over the next month.

A sustained drop in oil prices could also eventually affect investments in domestic drilling. Most analysts do not think the rise in domestic oil production — an increase totaling more than a million barrels a day over the last year alone — will be interrupted anytime soon unless the American benchmark drops to $70 a barrel and stays there for several months. Then less efficient or highly indebted smaller producers would probably have to slow drilling in at least some fields.

1621. Richest 1% of People Own Nearly Half of Global Wealth

By Jill Treanor, The Guardian, October 14, 2014

The richest 1% of the world’s population are getting wealthier, owning more than 48% of global wealth, according to a report published on Tuesday which warned growing inequality could be a trigger for recession.

According to the Credit Suisse global wealth report, a person needs just $3,650 – including the value of equity in their home – to be among the wealthiest half of world citizens. However, more than $77,000 is required to be a member of the top 10% of global wealth holders, and $798,000 to belong to the top 1%.

“Taken together, the bottom half of the global population own less than 1% of total wealth. In sharp contrast, the richest decile hold 87% of the world’s wealth, and the top percentile alone account for 48.2% of global assets,” said the annual report, now in its fifth year.

The report, which calculates that total global wealth has grown to a new record – $263tn, more than twice the $117tn calculated for 2000 – found that the UK was the only country in the G7 to have recorded rising inequality in the 21st century.

Its findings were seized upon by anti-poverty campaigners Oxfam which published research at the start of the year showing that the richest 85 people across the globe share a combined wealth of £1tn, as much as the poorest 3.5 billion of the world’s population.

“These figures give more evidence that inequality is extreme and growing, and that economic recovery following the financial crisis has been skewed in favour of the wealthiest. In poor countries, rising inequality means the difference between children getting the chance to go to school and sick people getting life saving medicines,” said Oxfam’s head of inequality Emma Seery.

“In the UK, successive governments have failed to get to grips with rising inequality. This report shows that those least able to afford it have paid the price of the financial crisis whilst more wealth has flooded into the coffers of the very richest.”
The $20.1tn rise in global wealth over the past year is the largest recorded since 2007. The total has risen every year since 2008 and is now 20% above its pre-crisis peak, the report said.

Wealth in the US in the past year had grown by as much as the $12.3tn the country lost in the financial crisis.

The Credit Suisse analysts pointed to the debate that has been sparked by work such as that by Thomas Piketty into long-term trends towards inequality. It pointed out that while inequality had increased in many countries outside the G7, within the group of most developed economies it was only in the UK that inequality had risen since the turn of the century.

“Only one of them, the UK, recorded rising inequality over the entire period 2000–2014 and only three show an increase after 2007 – France, Italy and the UK,” the report says.
Of the UK, it says: “Nowadays the pattern of wealth distribution in the UK is very typical for a developed economy. Almost 60% of the population has wealth exceeding $100,000 and there are two million US dollar millionaires”.

Other calculations by the Credit Suisse team “hint at raising global wealth inequality in recent years” and show that overall wealth in the US has grown at a faster pace than incomes. The authors warned it was a trend that could point to recession.

“For more than a century, the wealth income ratio has typically fallen in a narrow interval between 4 and 5. However, the ratio briefly rose above 6 in 1999 during the dotcom bubble and broke that barrier again during 2005–2007. It dropped sharply into the “normal band” following the financial crisis, but the decline has since been reversed, and the ratio is now at a recent record high level of 6.5, matched previously only during the great Depression. This is a worrying signal given that abnormally high wealth income ratios have always signaled recession in the past,” the report said.

China now has more people in the top 10% of global wealth holders than any other country except for the US and Japan, having moved into third place in the rankings by overtaking France, Germany, Italy and the United Kingdom.

1620. Cuba Is a Medical Power

By Elio Delgado Legòn, Havana Times, October 21, 2014

An army of Cuban doctors

The news reached me from the city of Moron, in Cuba’s province of Ciego de Avila. The title got me thinking immediately. The piece was about a 13-year-old teenager who, while enjoying carnival festivities at an amusement park in the town of Cacahual fell from a height of about 8 meters, hit the pavement and suffered a serious head trauma.
The kid was taken, unconscious, to the Roberto Rodriguez Hospital in Moron, where they diagnosed him with a severe cranioencephalic trauma, a traumatic bursting of the cranial vault, a diffuse, grade 4 axonal lesion, a traumatic subarachnoid hemorrhage and a severe pulmonary contusion.

A complex, 4-hour-long surgical procedure (known as a decompressive cranioectomy) was performed in the emergency room.

According to the doctor’s statement, 50 percent of the upper skull was removed and the cranial cavity expanded so that the swollen brain had room to expand and did not suffer the dangerous effects of intracranial hypertension, common in these cases.

A system for monitoring his intracranial pressure continuously was set up to follow the behavior of this variable and others, such as his cerebral perfusion and the cranium’s hemodynamics.

The patient made favorable progress, and a computerized axial tomography showed that his neurological structures were in perfect state, so he was discharged.

The boy’s mother said she didn’t know how to thank the doctors, nurses and auxiliary personnel for their efforts and the loving dedication they showed them at the hospital.
The case of the 13-year-old boy saved at the hospital in Moron is but one example of the many lives saved by Cuba’s public health system, not only in Cuba, but in more than 60 countries around the world as well.

That said, the US blockade on Cuba prevents the island from obtaining numerous pieces of medical equipment, medications and reagants that would help save the lives of more children and adults.

It is incomprehensible for me that a country should deny another the possibility of acquiring medical supplies used to save lives, especially those of children. They are inhumane measures that can only be conceived by sick minds moved by fascist hatred.
Cuba, however, continues to make huge efforts to save lives and, thanks to the care and love that its well-trained doctors offer the people, feats like the one described at the beginning of this post are accomplished.

David Nabarro, Special Envoy of the UN Secretary General, recently visited Havana to discuss the issue of Ebola and declared: “When deployment is complete (…) you will have sent 255 frontline workers to West Africa. This is more than those sent by Doctors Without Borders and the International Federation of the Red Cross, it is more than what the United States or the United Kingdom have sent, more than China sent (…)”

After reading a message from UN Secretary General Ban Ki-moon, Nabarro said that the sending of thousands of specialists to more than 39 countries in Africa and other nations in recent years demonstrates Cuba’s solidarity in the sphere of health. I would add: it also demonstrates that Cuba is, without a doubt, a medical superpower.

1619. Conservationists Debating Crisis of Nature While Avoiding the Role Played by Capitalism

By Emma Marris and Greg Aplet, The New York Times, October 31, 2014

Mountain top mining

A SCHISM has recently divided those who love nature.

“New conservationists” have been shaking up the field, proposing new approaches that break old taboos — moving species to new ranges in advance of climate change, intervening in designated wilderness areas, using nonnative species as functional stand-ins for those that have become extinct, and embracing novel ecosystems that spring up in humanized landscapes.

Some “old conservationists” have reacted angrily to this, preferring to keep the focus on protecting wilderness and performing classical restoration that keeps ecosystems as they were hundreds of years ago. Editorials, essays and books have been lobbed back and forth, feathers have been ruffled and conservation groups and government officials have felt pressure from both sides.

The truth is, despite the disagreements, both groups love nature and want to protect it. These seemingly competing alternatives are really complementary parts of the smartest strategy: We should try everything.

Conservation used to seem pretty straightforward: set aside tracts of nature and they will take care of themselves. It is not so simple anymore. Nature left unmanaged is changing in surprising ways because of the great and accelerating human influences of what is being called the Anthropocene — the new epoch of climate change, species movements and global-scale land-use change. Today, keeping nature functioning the way it did before the Industrial Revolution requires increasingly hard and expensive work.

At Yellowstone National Park, for example, nonnative trout are fished out of lakes; nonnative plants are ripped up; bison are culled to preset numbers. In California, salmon fry are trucked down to the ocean when drought dries up streams. In Maryland and Virginia, baby oysters are raised in hatcheries, then released into the Chesapeake Bay.

At the same time, we have begun tinkering with nature to help it cope. In North Carolina, blight-resistant genes from Asian trees are bred into American chestnuts so that the mighty trees, devastated by human-introduced disease, might again dot Eastern forests. In the Indian Ocean, tortoises from the Seychelles are introduced to other islands to play the role of extinct tortoises there, eating fruit and dispersing seeds. In Canada, foresters replant harvested areas with seedlings from areas farther south or lower in altitude, betting that they will better survive a warmer climate.

In other cases, what seemed obviously helpful has turned out to hurt. A gallfly introduced to control spotted knapweed in the West ended up nourishing deer mice, which flourished and began gorging themselves on the seeds of the native plants the knapweed was threatening. In California, restoration projects to pull out nonnative spartina grass on beaches were called into question when the endangered clapper rail was found to nest there. Controlling nature can be risky.

So what should we do? Should we continue to invest in keeping ecosystems in historical configurations? Should we attempt to engineer landscapes to be resilient to tomorrow’s conditions? Or should we just let nature adapt on its own?

We should do all three. In the face of great uncertainty, the sensible thing to do is hedge our bets and allocate large swaths of landscape to all three approaches: restoration, innovation and hands-off observation.

In the United States, the large landholdings of the federal government should be managed this way. We can classically restore in culturally resonant places like national parks, preserving the beloved landscapes and dynamics that sustained those ecosystems over thousands of years. Where we innovate, ideally in landscapes already significantly altered, we can focus our scientific talents and technology on species conservation, preserving the fantastic diversity of life.

And where we keep our hands off, perhaps in areas already set aside as wilderness, we can preserve nature wild and untrammeled. Unmanaged places like wilderness areas will most likely take on new and unexpected aspects as the climate changes. Familiar species will disappear and new species will move in. But we can learn as nature adapts to these challenges without our meddling.

No one approach will save everything. Ceasing all management will put many threatened species at risk for extinction. Restoring ecosystems to historical baselines may prevent them from adapting to change and lead to collapse. And innovation means creating untested systems that may also fail. Mistakes are inevitable. But at each site, we should fully commit to a single strategy. Otherwise, we risk a haphazard stew of approaches that don’t meet any goal.

The vast majority of conservationists are neither old nor new. They don’t even self-identify as conservationists. But if you would rather that bulldozers not raze the woods, desert or beach you love, then you are a conservationist. If you would rather that the tiger or bog turtle not go extinct, then you are a conservationist. And, if you like the idea that some places should be truly wild and free, then you are a conservationist.

No matter which reason motivates you most, working together and using a diversity of approaches is far better than inaction or squabbling. With hard work, political support and lots of money, we can have the cherished landscapes, the most endangered species, and the comfort of knowing there is still wild nature left. We just can’t expect to have them all in the same place.

Emma Marris is the author of “Rambunctious Garden: Saving Nature in a Post-Wild World.” Greg Aplet is the senior science director at the Wilderness Society.

1618. How the Housing Crisis Originated and Why Another Crisis Is in the Making: The Mainstream Views

By Eduardo Porter, The New York Times, October 28, 2014

Is it time to temper the American dream of homeownership?

If you want to curb the power of Wall Street and reduce the risk that the financial system will bring the rest of the economy tumbling down again, there may be no other choice.

Consider what happened last week, when regulators pretty much threw in the towel on new rules requiring mortgage bankers to keep on their books a minimum share of all but the safest loans.

The idea was perfectly reasonable — a way to keep bankers’ “skin in the game” to encourage prudence. In the end, however, officials decided that just about all mortgages were supersafe. No need for banks to keep a chunk.

“The loophole has eaten the rule,” Barney Frank, the former chairman of the House Financial Services Committee and co-author of the Dodd-Frank financial overhaul, told my fellow columnist Floyd Norris last week. “There is no residential mortgage risk retention.”

Phillip L. Swagel, an economist at the University of Maryland who was an assistant secretary of the Treasury under George W. Bush, called the decision simply “perplexing.”

The reason for the about-face, though, is not exclusively, or even mainly, the formidable power of the Wall Street lobby. The ability of the financial industry to fend off attempts to hem it in also relies on an argument that is difficult for outsiders to refute: We cannot live without it.

Unable to determine the risk that finance imposes on the broader economy, voters — and the politicians they put in office — have a strong incentive to give the industry a pass.

“What is the cost of a crisis I don’t prevent against what is the cost to tame finance?” asked Alan M. Taylor, an economist at the University of California, Davis. “We’ve only been thinking about this for a short time.”

Mortgage lenders dodged the proposed rule by joining homebuilders and advocates of low-income homeownership to convince hundreds of lawmakers that defining supersafe mortgages as those with significant down payments would curtail mortgage lending to the struggling middle class and poor.

That argument, while only partly related to the notion of requiring lenders to have skin in the game, pretty much stopped a central tenet of financial reform.

The breakneck growth of our modern banking system closely tracks the rise of the long-term home mortgage. A recent study by Professor Taylor, Òscar Jordà of the Federal Reserve Bank of San Francisco and Moritz Schularick of the University of Bonn found that mortgage lending across the industrialized world rose from the equivalent of 20 percent of annual economic activity at the start of the 20th century to about 69 percent in 2010.

In 1928, mortgages accounted for 39 percent of American banks’ lending to nonfinancial private companies. By 2007, on the eve of the financial crisis, the share was 68 percent.

“The changing nature of financial intermediation has shifted the locus of crisis risk towards mortgage lending booms,” the authors wrote. Financial reform that gives mortgages a pass is not going to cut it.

Most Americans have an interest in being able to obtain a reasonably priced mortgage. But there is a fundamental tension between Wall Street’s interests and those of the rest of us.

Financial institutions will naturally prefer to take more risks. After all, for them risk-taking has historically carried a lot of upside and, with taxpayer funds as the ultimate backstop, only a limited downside. Ordinary people have a very different experience.

“Financial deregulation is similar to relaxing rules on nuclear power plants,” argue Anton Korinek of Johns Hopkins University and Jonathan Kreamer of the University of Maryland in a working paper for the Bank for International Settlements. It makes it easier and more profitable for the utilities, their shareholders and executives. It might also help ordinary Americans get cheaper electricity. “However, it comes at a heightened risk of nuclear meltdowns that impose massive negative externalities on the rest of society.”

Tightening mortgage rules would no doubt make it more difficult to buy and sell homes. It would lead to more renters and fewer homeowners.

That might be worth it, though. Germany is doing fine with a homeownership rate of 45 percent, compared with about 65 percent in the United States, which is actually down from a peak of near 70 percent in 2004.

The Explosion of Mortgage Finance

Mortgage lending has led the growth of the financial system since World War II, according to a new study of 17 industrialized nations, including the United States and most of Western Europe.

Sheila C. Bair, who ran the Federal Deposit Insurance Corporation throughout the buildup of the mortgage bubble and its implosion, argues that a policy of pushing mortgages for every American family is hardly ideal.

“There is this religion about homeownership being the primary path to wealth accumulation — notwithstanding the bad experience we’ve had with it,” she said.

Indeed, in an uncertain economy with so little job security, it makes less sense for policy to encourage workers to lock themselves into mortgages. Even when homeownership is the right call, “I don’t think low-income people should be in private-label subprime mortgages,” she added. That is what the Federal Housing Administration is for.

Yet this is a Rubicon that our elected officials are afraid to cross. “On the margin, regulation does increase the cost of credit in the good times,” Ms. Bair said. “Regulators are battling a political system that wants to let the good times roll.”

Still, many experts say Washington is at least moving in the right direction. “Regulations are putting the system in much better shape than it was,” said Douglas J. Elliott, a former banker at J. P. Morgan who is now at the Brookings Institution in Washington.

This is not merely a self-serving, American view. Across the Atlantic, John Vickers, a professor at Oxford and the former head of Britain’s Independent Commission on Banking, agrees. “I wish there had been greater steps,” he said. “But major steps have been made toward a less fragile system.”

Is this enough to close the gap between Wall Street’s unbridled appetite for risk and the broader public interest?

Recent research suggests the growth of credit increases the odds of a financial crisis. Researchers have also found little evidence that more finance brings faster growth to industrialized nations.

The problem is, as long as we can’t precisely measure the cost of financial excess, we will be prone to believe that the financial industry is simply too fragile to be meddled with.

And with growth disappointing in just about every developed country, many people may be willing, even eager, to roll the dice again.

Despite all the new efforts at regulation, Ariell Reshef of the University of Virginia noted, “there’s maybe a slowdown in the growth of finance, but not a reversal.”

In a study published last year, Professor Reshef and Thomas Philippon of New York University concluded, “If finding more growth opportunities becomes ever harder with development, then a larger financial output and a larger share of income may be needed to sustain growth.”

Professor Vickers cited another paradox. “Ironically, the macroeconomic damage done by the crisis shows how important a well-functioning banking sector is,” he said.

The question is whether our banking sector is well functioning.

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By Peter J. Wallison, The New York Times, October 30, 2014

WASHINGTON — SEVEN years after the housing bubble burst, federal regulators backed away this month from the tougher mortgage-underwriting standards that the Dodd-Frank Act of 2010 had directed them to develop. New standards were supposed to raise the quality of the “prime” mortgages that get packaged and sold to investors; instead, they will have the opposite effect.

Responding to the law, federal regulators proposed tough new standards in 2011, but after bipartisan outcries from Congress and fierce lobbying by interested parties, including community activists, the Obama administration and the real estate and banking industries — all eager to increase home sales — the standards have been watered down. The regulators had wanted a down payment of 20 percent, a good credit record and a maximum debt-to-income ratio of 36 percent. But under pressure, they dropped the down payment and good-credit requirements and agreed to a debt-to-income limit as high as 43 percent.

The regulators believe that lower underwriting standards promote homeownership and make mortgages and homes more affordable. The facts, however, show that the opposite is true.

In the late ’80s and early ’90s, down payments were 10 to 20 percent. The homeownership rate was 64 percent — about where it is now — and nearly 90 percent of housing markets were considered affordable (that is, home prices were no more than three times family income). By 2011 only 50 percent were considered affordable, and by 2014, just 36 percent — even though down payments as low as 5 percent are now common.

How could this be? Consider this: If the required down payment for a mortgage is 10 percent, a potential home buyer with $10,000 can purchase a $100,000 home. But if the down payment is dropped to 5 percent, the same buyer can purchase a $200,000 home. The buyer is taking more risk by borrowing more, but can afford to bid more.

In other words, low underwriting standards — especially low down payments — drive housing prices up, making them less affordable for low- and moderate-income buyers, while also inducing would-be homeowners to take more risk.

That’s why homes were more affordable before the 1990s than they are today. Back then, when traditional standards for “prime” mortgages prevailed, homes were smaller; they had fewer bathrooms, and the kitchens were not appointed by Martha Stewart. A family could buy and live in a “starter home” for several years before selling it and using the accumulated equity to buy a bigger or better appointed home.

In a competitive housing market not subsidized by lax standards, home builders would similarly adjust by reducing the size and amenities of new homes to meet the financial resources of home buyers entering the market. Home prices would stabilize and not rise faster than incomes. Low- and moderate-income families and millennials might have to wait to save for a first home, but they would be able to afford it.

If the government got out of the way, would sound underwriting standards come back? History suggests yes. Although Fannie Mae and Freddie Mac were government-backed, they were shareholder-owned, profit-making firms. They adopted strong underwriting standards to avoid the credit risk of subprime and other high-risk mortgages. But after Congress enacted affordable-housing goals, administered by the Department of Housing and Urban Development, in 1992, underwriting standards declined.

Republicans generally favor eliminating the government’s role in housing finance, while Democrats worry that without government support, mortgages would be too expensive for low- and moderate-income families. Although it runs counter to the current Washington view, good underwriting standards can satisfy the objectives of both parties.

It’s clear that today’s policies create winners and losers. The winners include real estate agents and home builders, who want to increase borrowing and sell ever-larger and more expensive homes. The losers, as we saw in the financial crisis, are borrowers of modest means who are lured into financing arrangements they can’t afford. When the result is foreclosure and eviction, one of the central goals of homeownership — building equity — is undone.

After the financial crisis, Representative Barney Frank — the Massachusetts Democrat who led the House Financial Services Committee during the crisis, and a champion of credit programs for low-income buyers — admitted, “It was a great mistake to push lower-income people into housing they couldn’t afford and couldn’t really handle once they had it.” Policy makers who support homeownership would be wise to consider who is hurt and who is helped when we abandon traditional underwriting standards.

Peter J. Wallison, a senior fellow at the American Enterprise Institute, is the author of the forthcoming book “Hidden in Plain Sight: What Really Caused the World’s Worst Financial Crisis and Why It Could Happen Again.”