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Monthly Archives: September 2016

GM INTEGRITY OF PURPOSE?

 

GM is in the business of assuming financial risk.

Their employees are not.

 

By transferring the risk of lifetime pensions from GM to their employees they are abrogating their commitment to provide guaranteed lifetime pensions for their employees lifetime commitment to GM.

 

By replacing Defined Benefit pension plans (Lifetime benefits) with Defined Contribution pension plans (capital at 65) they are transferring the financial risk of undefined lifetime pension benefits to their employees.

 

Their employees do not have the resources to handle this risk.

 

If Globalization is too competitive for GM without resorting to this shift then they should quit.

 

09 24 2016

Dan Zwicker

Toronto

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THOUGHT LEADERSHIP MATTERS

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        ………when we are ‘RAISING THE BAR’ slightly OUT OF REACH

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An example in economics

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JOSEPH STIGLITZ

https://en.wikipedia.org/wiki/Joseph_Stiglitz?wprov=sfla1

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A PERSONAL NOTE:

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Thought leadership matters in economics, finance, politics agriculture, science (pure and applied), law, mathematics, sports,
entertainment, business
and family culture, everyday responsibilities  ++++++

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IN EVERYTHING
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The core personal essential besides natural intelligence is

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THE INTELLIGENT APPLICATION OF SELF DISCIPLINE

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That is why the professions of Medicine, Law and  Accounting (and others) are referred to as disciplines.
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We are in an economic era where the global competition is no longer for excellence in making ‘things’…….

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……..it’s about the ‘brutally competitive’ application of brainpower.
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  By ‘RAISING THE BAR’ slightly OUT OF REACH we are surviving.

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GDP is one collective measure

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Dan Zwicker

Toronto 

 

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STEPHEN HAWKING

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BRAINPOWER MATTERS
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https://en.wikipedia.org/wiki/Stephen_Hawking

EMPATHY

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IN SHORT SUPPLY?

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https://en.wikipedia.org/wiki/Empathy

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About me

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Gender

MALE

Industry

Financial Services

Occupation

Consultant

Location

Toronto, Ontario, Canada

 Dan Zwicker

Introduction

Beyond Risk is about people and their views on money….borne of over 30 years of front line experience and engagement in the arena of exponential corporate growth through financial practice building under ‘fire’ in a lifetime passion……the assuring of the financial value of our time…..to allow for the completion of our personal and business financial objectives. It is about character, integrity, people and their often complex and conflicting attitudes towards money…..its accumulation…..its preservation and its utility. It is about the leadership of high performance professionals who are committed to managing the capital risk and the lifetime financial well being of their families, business associates and clients. It is about coaching ‘Olympian’ class high performance empowerment. Above all it is about ethical choice in every facet of decision making and execution. It is remarkable that of all the basic life skill related subjects that we include in our children’s early curriculum financial literacy is not one of them…….given that we live in a money economy. It is said that we each have a “Money Personality”. Nothing could be more accurate and more life defining.

Interests

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‘RAISING THE BAR’ – GROWTH THROUGH EMPOWERMENT / HIGH PERFORMANCE COACHING / RIGOROUS EXECUTION DISCIPLINE

Favorite Movies

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ACTION….INTRIGUE

Favorite Music

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Contemporary…classical

Favorite Books

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Autobiographies

 People are almost completely ignoring a looming crisis for oil

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Will Martin

Business Insider

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Reuters/Stefano Rellandini

In the current climate, the vast majority of worry in the oil markets surrounds the huge imbalance in supply and demand in the industry. This is understandable, given that the enormous glut of oil in the markets has pushed prices down from more than $100 around two years ago, to less than $50 right now.

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However, in a major new research note, HSBC argues that soon we won’t be worrying about there being too much supply and not enough demand, but rather, things will be the other way round soon enough, and that is going to cause huge problems.

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In the report from HSBC staff Kim Fustier, Gordon Gray, Christoffer Gundersen, and Thomas Himboldt argue that given the finite nature of the physical amount of oil in the world, people should really be paying more attention to falling supply in the future, rather than oversupply right now.

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Here is the extract from Fustier et al (emphasis ours):

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“Given the backdrop of the past two years’ severe oversupply in the global oil market, it’s not surprising that few are discussing the possibility of a future supply squeeze. Indeed, most of the current debate on the long-term outlook for oil seems focused on risks to demand from progress on both the policy and technology fronts.

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“Meanwhile, we expect the past two years’ severe crude price weakness to result in a return to balance in the global oil market in 2017. At that stage, we expect global effective spare capacity to fall to as little as 1% of demand. Supply disruptions have had only limited impact on price in 2015-16 due to the global oversupply, but the market will be much more susceptible to interruptions post-2017. In addition, given the almost unprecedented fall in industry investment since 2014, we expect the focus to return to the availability of adequate supply.

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HSBC’s note is more than 50 pages of detailed, thoughtful research on the state of the markets and how the dwindling availability of oil, along with jumping demand over the coming decades will change the world.

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But included within the report is a helpful, ten-point summary of the key arguments the bank makes, and what is going on right now. We have summarised the arguments below:

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  1. Oil’s oversupply problem, which has caused most of the trouble in the markets in recent years will end by 2017, and the market will return to balance.

  2. .Spare capacity will have shrunk substantially by then “to just 1% of global supply/demand.” This HSBC argues, will make the market more susceptible to disruptions like those seen in Nigeria and Canada in 2016.
  3. Oil demand is still growing by ~1mbd every year, and no central scenarios that we recently assessed see oil demand peaking before 2040.”

  4. 81% of the production of liquid oil is already in decline.

  5. HSBC sees between 3 and 4.5 million barrels per day of supply disappearing once peak oil production is reached. “In our view a sensible range for average decline rate on post-peak production is 5-7%, equivalent to around 3-4.5mbd of lost production every year.”

  6. Based on a simple calculation, HSBC estimates that by 2040, the world will need to find around 40 million barrels of oil per day to keep up with growing demand from emerging economies. That is equivalent to over 4 times the current crude oil output of Saudi Arabia.

  7. “Small oilfields typically decline twice as fast as large fields, and the global supply mix relies increasingly on small fields: the typical new oilfield size has fallen from 500-1,000mb 40 years ago to only 75mb this decade.” — This will exacerbate the problem of declining oil fields, and the lack of supply.

  8. The amount of new oil discoveries being made is pretty small. HSBC notes that in 2015 the discovery rate for new wells was just 5%, a record low. The discoveries made are also fairly small in size.

  9. There is potential for growth in US shale oil, but it currently represents less than 5% of global supply, meaning that it will not be able, single-handedly at least, to address the tumbling global supply HSBC expects.

  10. “Step-change improvements in production and drilling efficiency in response to the downturn have masked underlying decline rates at many companies, but the degree to which they can continue to do so is becoming much more limited.” Essentially HSBC argues that companies aren’t improving their efficiency at a quick enough rate, meaning that supply declines will hit them even harder.

Vancouver home sales down 26 percent after foreign ownership tax

TORONTO (Reuters) – Home sales in the Vancouver region’s heated housing market fell 26 percent in August on a year-to-year basis after the province introduced a tax on foreign home ownership, the Real Estate Board of Greater Vancouver (REBGV) said on Friday.

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In a statement, the board said August sales totaled 2,489, down from 3,362 in the same month last year. That decrease followed a 19 percent year-to-year decline for sales in July.

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British Columbia introduced a 15 percent tax on foreign real estate buyers in Vancouver in late July, a measure geared at increasing housing affordability.

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A benchmark of home prices in the Vancouver area jumped 32 percent over one year to hit C$917,800 ($705,967) in June. Foreign buyers have taken the brunt of the blame for the runaway market, though factors like low interest rates also play a role.

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The home price benchmark gained slightly to C$933,100 in August, a 4.9 percent increase over the last three months, according to the board

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“The record-breaking sales we saw earlier this year were replaced by more historically normal activity throughout July and August,” REBGV President Dan Morrison said in the statement.

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“The new foreign buyer tax appears to have added to this trend by reducing foreign buyer activity and causing some uncertainty amongst local home buyers and sellers.”

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(Reporting by Ethan Lou in Toronto;

Editing by Dan Grebler and Meredith Mazzilli)

 

 

Causes of Compulsive Eating Disorder

 

While eating disorders don’t necessarily have a precise cause, there is almost always a huge psychological and emotional component to them. Because compulsive overeaters have a relationship with food in which they spend time thinking about it and desiring it, Compulsive Eating Disorder is different from Binge Eating Disorder. Compulsive overeaters use food as a way to fill an emotional void, or to cope with stress and other problems without having to actually “deal” with them. To compulsive overeaters, food is similar to a drug because it helps ease their mind. Unfortunately, it can spiral out of control very quickly.

How schools and parents can start teaching kids about today’s most taboo topic — money

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Garry Marr

Financial Post

September 2, 2016

 

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http://business.financialpost.com/personal-finance/young-money/how-schools-and-parents-can-start-teaching-kids-about-todays-most-taboo-topic-money

The Next American Revolution

Has Already Begun:

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An Interview With Gar Alperovitz

08 June 2013

By Gar Smith,

The Berkeley Daily Planet

Interview

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Gar Alperovitz, currently a Professor of Political Economy at the University of Maryland, has been writing books about wealth, democracy and national security for 48 years. In addition to serving in several government posts (including Special Assistant in the US State Department), Alperovitz is a founding principal of The Democracy Collaborative and a boardmember at the New Economics Institute.

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What Then Must We Do? (his latest book and his twelfth since 1965) is a breezy, conversational read filled with somber forecasts, hopeful alternative economic strategies and lots of surprising facts and stats (Some examples: If the nation’s personal wealth were divided evenly, a family of four would receive $200,000 a year. The hourly US minimum wage, adjusted for inflation, is now $2 less than it was in 1968. The US is such a large country “You can tuck Germany into Montana!”)

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What Then Must We Do? (the title is borrowed from Tolstoy) explores a challenging premise:

“The coming painful decades may be the prehistory of the next American revolution – and an evolutionary process that transforms the American system, making it both morally meaningful and ecologically sustainable.”

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Daniel Ellsberg calls this book possibly “the most important movement-building book of the new century” and Juliet Schor, author of True Wealth, hails it as “the most compelling account yet of how we can move beyond the piecemeal, project–by–project transformation of our political economy to truly systemic change.”

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Alperovitz recently took time from his busy schedule to discuss the arguments in his new book and explore the ramifications of social and economic change in an era of pending systemic collapse.

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Gar S:

You point out that 400 plutocrats in the US now own more wealth than 180 million other Americans. A scale of inequality that ranks as “medieval.” Shortly before his assassination, Dr. King noted America’s problems could not be solved without “undergoing a radical redistribution of economic power.”

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Gar A:

The concentration of wealth in this country is astonishing. 400 individuals—you could seat them all on a single airplane—own as much wealth as 60 percent of the rest of the country taken together. I was describing this distribution as “medieval” until a medieval historian set me straight: wealth was far more evenly distributed in the Middle Ages. When you ask where power lies in our system, you are asking who owns the productive assets. And that’s the top 1 percent—in fact, the top 1 percent of the 1 percent. It is a feudalistic structure of extreme power. It is anathema to a democracy to have that kind of concentration of wealth. More and more people are beginning to realize the extent and reach of corporate power and the power of those who own the corporations. The Koch brothers get a lot of publicity, but it’s a much wider phenomenon.

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You mentioned Martin Luther King, citing some of the quotes I included in the book. This year marks the fiftieth anniversary of his legendary “I Have a Dream” speech at the Lincoln Memorial, and we will be doubtless be hearing a lot about that and Dr. King’s leadership on racial equality and civil rights. I worked with him on neighborhood ownership questions we were looking at in the Senate at the time; and then again, a few years later, when he came out against the Vietnam War. He was also questioning the distribution of wealth, citing the “triple evils” of racism, economic exploitation and militarism. At the end, right before he was assassinated, he even began to talk about changing the economic power structure, even occasionally, using the words “democratic socialism.” In this era of difficulty we would do well to remember Dr. King as a visionary who was beginning to step out beyond the cramped consensus to ask far deeper questions about the nature of America and the possibilities for a different future for this country. That is our challenge today.

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Gar S:

You argue that it was not politics but circumstance (the Great Depression, followed by WW II) that precipitated the New Deal’s progressive change and the country’s post-war economic prosperity. I was surprised by your assessment that an economic collapse on the scale of the Great Depression is no longer likely. Could you explain?

Gar A:

Despite the systemic problems a crisis collapse of the scope and scale of the Great Depression is not likely. Here are a few reasons. First, the size of ongoing government spending stabilizing the economy is much, much larger than it was at the time of the Great Depression. Government spending—the floor under the private economy, if you like—was at 11 percent in 1929, now it is roughly 30 to 35 percent of the economy (depending on the year, and whether we are in recession.) The economy may decline rapidly, but the floor is three times higher than it was during the 1930s. Second, today we have built-in economic “stabilizers”—spending that kicks in to help offset the decline when recessions begin to get underway: unemployment insurance, food stamps, and so on. Then there is the sea change in politics. The American public now holds political leaders responsible for making sure the economy works—or at least does not totally fail. There is a heavy political price for any politician who fails to deal with truly massive economic pain. Perhaps most importantly, when push comes to shove, major corporate leaders also support action to counteract truly major economic contractions. You saw it in 2008 and 2009 when business leaders demanded action—including the stimulus plan.

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So massive and sustained economic collapse of the kind that opened the way for extremely unusual and far-reaching policy change in the Great Depression and New Deal era, though not impossible, is no longer likely. This is not to say great recessions, ongoing economic pain, and high unemployment may not occur for long periods of time. Indeed, that is what we face at present.

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Gar S:

The new word for economic performance is no longer “growth” but “stagnation.” One percent of the country controls so much wealth but—unlike the middle class and working poor—the rich don’t spend a significant part of their wealth.

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Gar A:

This prospect of stagnation—or “punctuated stagnation,” as I write (there may be small intermittent upticks; plus oil and other commodity price explosions)—is very important to grasp. I believe (along with many observers) that we are entering an era of deepening stagnation and political stalemate. One problem is lack of demand in Keynesian terms, but I think it’s far deeper than that. We are returning to a pattern of stagnation that was common before the Depression collapse, on the one hand, and the extremely unusual conditions that prevailed during the postwar economic boom, on the other.

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A short form of the argument would be this: in the first quarter of the twentieth century, up to World War I, there was decay, decline, and indeed major recession and almost depression. We don’t know what would have happened; World War I intervened, bailing out the economy. Same story with the Great Depression: World War II, not the New Deal, solved the economic problem in the second quarter of the century. In the third quarter of the century the post-war economic boom—brought about partly by savings built up during the war, partly by military spending in the Korean War, Vietnam War, and the big military budgets of the Cold War, and partly because US competitors (Germany, Japan, and many others) had been significantly destroyed—was an extremely unusual boom moment—the greatest sustained boom in our history. But thereafter the pattern of economic difficulty resumed in the final quarter of the century. Even though military budgets are high today in absolute terms, they are comparatively small as a share of GDP. And I think nuclear weapons now preclude an industrial-scale global war like World War I or World War II. We can have small horrible wars, but they don’t function economically in the way that larger wars did previously.

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Now these difficulties could be resolved if you had sufficient political power to mount a traditional Keynesian solution. But what is significant—and this is the heart of the matter—is that such a solution is no longer available, politically, for a number of reasons. I could go into a lot of them, but the principal one is the decline of organized labor. Labor union membership, the muscle behind progressive politics, was at its peak of around 35 percent just after the war, but is now down to the 11 percent range (and the 6 percent range in the private sector). Liberal reform now lacks an institutional basis. So that’s a picture of decay, and there doesn’t seem to be an easy way out.

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Gar S:

You argue that “evolutionary reconstruction” does not flow from reform or revolution but rather “from building institutions, workplaces and cultures concerned with democratizing wealth.” How significant are cooperative enterprises in today’s economy. Could you describe the current state of America’s cooperative economy?

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Gar A:

Given that the economy is unlikely to truly collapse and provoke explosive change—for all the reasons I have indicated—and given that a “reform” solution like the New Deal is extremely difficult in the absence of a strong institutional power base for liberalism (e.g. labor unions), we face an extremely unusual political situation. I believe we are entering an extended period, a multi-decade period, in which the dominant reality is likely to be one of erratic growth, stagnation, periodic inflation, substantial political stalemate and decay.

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In such a context, the prospects for near-term change are obviously not great—especially when such change is conceived in traditional terms. On the other hand, for precisely such reasons, there is likely to be an intensified process of much deeper probing, much more serious political analysis, and much more fundamental institutional exploration and development. In fact, this is already well underway. Beneath the surface level of politics-as-usual, continuing political stalemate and the exhaustion of existing approaches have begun to open up some very interesting strategic possibilities. These are best understood as neither “reforms” (policies to modify and control, but not transcend, current corporate-dominated institutions) nor “revolution” (the overthrowing of current institutions), but rather a longer-term process of “evolutionary reconstruction”—that is, institutional transformation that unfolds over time.

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Like reform, evolutionary reconstruction involves step-by-step nonviolent change. But like revolution, evolutionary reconstruction changes the basic institutions of ownership of the economy, so that the broad public (rather than “the one percent”) increasingly comes to own more and more of the nation’s productive assets. As the old system decays, an evolutionary reconstruction would see the foundations of a new system gradually rising and replacing failing elements of the old.

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Though the press doesn’t much cover this, such processes are already observable in many parts of the current American system. Some numbers: There are now ten thousand worker-owned companies of one kind or another in the country. And they are expanding over time, and they’re becoming more democratic rather than less. There are 130 million people who are members of one or another form of cooperative. A quarter of American electricity is produced by either municipal ownership or cooperatives. Twenty-five percent of American electricity is, in other words, “socialized.” There are neighborhood corporations, land trusts, and other municipal and state strategies. One can observe such a dynamic developing in the central neighborhoods of some of the nation’s larger cities, places that have consistently suffered high levels of unemployment and poverty. In such neighborhoods, democratizing development has gone forward, paradoxically, precisely because traditional policies have been politically impossible.

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All this has been building in scale and sophistication to the point that growing numbers of people now talk about a “New Economy.” It doesn’t yet compare to the giants of Wall Street and the corporate economy, of course. But it is growing to the point where challenges are also becoming possible. Move Your Money campaigns have seen billions transferred out of Wall Street banks into credit unions and local and community banks. If you add up the credit unions they are the equivalent of one of the largest US banks, knocking Goldman Sachs out of the top five.

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I see this era as something akin to the decades before the New Deal, the time when experimentation and development in the state and local “laboratories of democracy” laid down the principles and programs that became the basis for much larger national policies when the right political moment occurred.

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Gar S:

You clearly show that regulating Wall Street doesn’t work and breaking up large banks is unlikely to last. The conservative Chicago School of Economics, you point out, had a solution: essentially any business “too big to regulate”” should be nationalized. “Take them over; turn them into public utilities.” Could large banks really be taken over and transformed?

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Gar A:

The old conservative economists were right: Regulation doesn’t work; they capture the regulators. Anti-trust doesn’t work; if you break them up, they re-group. Look at Standard Oil. Look at AT&T and the telephone companies. In fact, the major banks are even bigger now than they were in 2008 when they were deemed “too big to fail.” They imperil the entire economy. So ultimately the only answer, logically, is to take them over at some point. Milton Friedman’s revered teacher, H.C. Simons, the founder of the conservative Chicago School of economics, was one of the first to point out this logic. He argued that this was necessary because it was the only way to preserve a genuinely free economy.

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Can it be done? We just did it in one form: In response to the financial crisis the federal government essentially nationalized General Motors and A.I.G. and was in a position to do the same with Chrysler and several major banks because of the huge injections of public capital that were required to save them from bankruptcy. At one point, Obama frankly told the bankers that he was the only one standing between them and the pitchforks. What happens when the next financial crisis occurs (as most observers on left, right and center think inevitable)? Or the one after that?

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There are also already alternative models at hand. Most people don’t realize this, but the federal government currently runs 140 different government banks. They aren’t always called banks, although sometimes they are, like the Export-Import Bank and the National Cooperative Bank. But sometimes they take the form of small business loans programs or agricultural programs. Then there is the Bank of North Dakota, a public bank that has been there for ninety years. It’s a state-owned bank, very popular with small business but also labor. Twenty states have introduced legislation to create public banks of their own. States have huge tax flows, which could capitalize such banks. Once you start to look more carefully, beneath the surface of media attention, it may be that far more is possible much earlier and much faster than many now imagine.

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Gar S:

If you don’t like corporate capitalism or state socialism, what’s left? Shouldn’t a fundamental goal be to prevent accumulations of great wealth. Once great wealth or power is attained, there is a tendency to fear the majority and seek to protect one’s fortune at all costs.

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Gar A:

That is a fair question, and most people don’t face it squarely: “If you don’t like corporate capitalism, where the corporations dominate the political system, and you don’t like state socialism, where the state dominates the system by virtue of its ownership, what do you want?” I think the developments reported on in the book point towards something very American, something that might be called “a community sustaining system”—one in which national structures and regional structures and local structures are all oriented to producing healthy local community economies, and thereby healthy and ecologically sustainable democratic communities.

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We are at a very remarkable moment in American history: Even as we face massive economic, social and environmental challenges, more and more people are beginning to see that politics as usual doesn’t work, that the problems are fundamental to the system itself. These issues are on the table for the first time in many decades. So there needs to be an answer at some point, in terms of system design, to the question of what a system looks like that isn’t corporate capitalism and isn’t state socialism but begins with community and how we build it.

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The truly central question is who gets to own the nation’s wealth? Because it’s not only an economic question, it determines politics in large part. The corporate capitalist system lodges such power in the corporations and tiny elites. An alternative system must begin at the bottom and democratize ownership from the bottom up—all the way from small co-ops and neighborhood corporations on up through city and state institutions and even, when necessary, regionally and nationally.

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I think we can see the outlines of such a model already emerging in developments in the New Economy. It might be called a “Pluralist Commonwealth.” Plural forms of common wealth ownership. Worker ownership, co-ops, municipal utilities, neighborhood land trusts, state ownership of certain national firms. Plural forms. It’s not very sexy language, but it attempts to get to the idea that you must change ownership of wealth in many different ways in order to achieve democratic results and achieve cultural changes that allow us a democratic solution to the systemic problem. The key thing is that just below the surface of media attention a great deal is going on—many, many new developments that move in the direction of democratic ownership, starting at the very grass roots level, and moving up.

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All of this ultimately also puts “the system question” on the table. We need a serious and wide-ranging debate around a broader menu of institutional possibilities for America’s future than the stale choices commonly discussed on both left and right.

 

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

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Gar Smith

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Gar Smith is editor emeritus of Earth Island Journal, a Project Censored award-winning investigative journalist, and co-founder of Environmentalists Against War. He has covered revolutions in Central America and has engaged in environmental campaigns on three continents. He lives a low-impact, solar-assisted lifestyle in Berkeley, California. Smith is also the author of Nuclear Roulette: The Truth About the Most Dangerous Energy Source on Earth (Chelsea Green Publishing, 2012)