ANS -- The 6 Economic Facts of Life in America That Allow the Rich to Run off with Our Wealth

Here's another good article about the economic inequality in the US and how it is the result of lies and the rich stealing from the middle class.  It's good.  It's clear.  It needed proofreading. 
At the end he says, "...if we master the basic economic facts of life, we won't get conned." 
Find it here: http://www.alternet.org/economy/6-economic-facts-life-america-allow-rich-run-our-wealth?paging=off  
--Kim


  Economy  
AlterNet / By Les Leopold
  Comments

The 6 Economic Facts of Life in America That Allow the Rich to Run off with Our Wealth

Do you ever wonder why it takes the average family 47 years to make as much as a hedge fund honcho makes in one hour?
December 5, 2012  |  
 


Photo Credit: Shutterstock.com
 
 
 
 

Do you ever wonder why it takes the average family 47 years to make as much as a hedge fund honcho makes in one HOUR?

Does it bother you that in 2010, after the crash, the top 25 hedge fund chiefs made as much as 685,000 teachers who educate 13 million children?

Are you worried that cutting government debt means raising your social security eligibility age and cost of living adjustment, so that you have to work longer and receive lower retirement benefits?

Have no fear. The super-rich are spending hundreds of millions of dollars to sell you their economic fabrications. Why so much inequality? They say because the rich have the most important skills and you don't. Why so much unemployment? They say it's because our skimpy unemployment insurance keeps people from looking for work. Why so much government debt? They say it's because you have too many "entitlements." Why the Wall Street crash? They blame poor people for buying homes they couldn't afford.

In short, the super-rich want us to believe that any effort to tax them a bit more or control Wall Street will only kill more jobs and harm our economic well-being. And most of all they don't want us to know the six economics facts of life that explain how the super-rich are running away with our nation's wealth.

1. The super-rich are stealing our fair share of productivity. The U.S. economy is enormously productive. Since 1947, the amount of goods and services we produce per hour of labor has risen by nearly 300 percent. That's because as a nation, we blend together a potent mix of effort, skills, technology and organizational capacities. Our enormous productivity is why we are the richest nation on earth.

Yet, why don't we feel that rich? Why are we told we must tighten our belts?

Until the mid-1970s, the more productivity increased, the higher the real wages of the average working person (after taking out the impact of inflation). As a result, our standard of living doubled in 25 years. But, as you can see from the chart below, after the mid-1970s, productivity (the red line) continued to boom, but the average wage stalled.


Click to enlarge.

It wasn't an accident, or market forces, or an act of God. It was a result of human polices designed by and for the rich. Tax cuts for the rich, financial deregulation, support for moving jobs overseas and union-busting combined to give the super-rich more and more of our economy's productivity gains. In 1970, the top 100 average corporate executive earned $45 for every $1 earned by the average worker. By 2006 it had jumped to a whopping $1,723 to $1. That's the very definition of greed run wild.


Click to enlarge.

Think about this: If the average wage had continued to rise along with productivity as it did after WWII, your real wage today (after inflation) would be twice as high!

We've been had.

2. Americans really want a wealth distribution more like Sweden's. Here's a nightmare fact of life the super-rich don't want you to know. Two researchers recently tried to find out just how much economic inequality Americans were comfortable with. Michael Norton of Harvard Business School and Dan Ariely of Duke University conducted a nationwide poll with more than 5,000 respondents to see how Americans saw our current level of equality, and what level they wanted to see. (" Building a Better America – One Wealth Quintile at a Time")

The results were startling. First, virtually all Americans greatly underestimated the degree of inequality in our economy today. They had no idea how extreme the U.S. wealth distribution really is -- which goes to show you what a good job the super-rich have done in mis-educating us.

Second, when asked to construct an ideal distribution of income, 92 percent of Americans preferred radically more equality – on a par with the social democratic state of Sweden! What's more, it didn't matter whether the respondent was a Republican or Democrat, rich or poor, black or white, male or female. Everyone wanted more economic fairness.

Imagine that! Americans, even Republicans who voted for Romney and Ryan, would rather live with the Scandinavian distribution of wealth. Little wonder that the super-rich and their minions do all they can to belittle so-called "Euro-socialism." They don't want us to know that maybe we are hard-wired for fairness instead of the staggering inequality that helps no one but the super-elites.

3. Everything we hear about government debt is wrong. Right now, the biggest target of public mis-education is the government debt debate. And the biggest spender on the mis-education of the American public is billionaire Pete Peterson (who personally has added to the government's debt by dodging hundreds of million in taxes through the 15 percent "carried interest" loophole that blessed his private equity fund). Having no sense of shame, he and other super-elites want to convince us that government spending and debt will ruin us all. Unfortunately, very little of what they claim is true:

• China owns our all our debt? Wrong! There's a chilling ad put out by a Peterson front group that features a Chinese lecturer in the year 2030 addressing (with English subtitles) a packed audience of Chinese students about the rise and decline of the U.S. The confident, smirking teacher describes how the U.S. abandoned its principles as it "tried to spend and tax its way out of a great recession" and then crumbled beneath its "crushing debt." He then provides the kicker: "Of course we owned most of their debt...ha ha ha, and now they work for us," he says to the raucous laughter of the students. The ad is a complete Peterson lie. China owns only 8 percent of our debt. Most of our debt is actually owned by our own quasi governmental agencies like the Federal Reserve and Social Security.
  
  
• Social Security, Medicare and Medicaid are bankrupting the country? Wrong! The current deficits are the result of two unfunded wars, the Bush tax cuts for the super-rich and the Wall Street crash of the economy that killed 8 million jobs, and led directly to the ensuing bailouts, lost tax revenues and increases in unemployment insurance payments.
  
  
• We will become like Greece if we don't balance our budget? Wrong! Greece can't print money to pay back its debt because it no longer has its own currency (and neither does Mississippi). The United States does. Also, our economy is more than 50 times larger that Greece's. The chances of the US ending up in a Greek debt crisis are about the same as finding a Martian in your bathtub.
  
  
• We have to solve the "debt crisis" right now or the economy will crash? Wrong! We have an unemployment crisis, not a debt crisis. Interest rates are at all-time lows because the world wants to park its money here in dollars. In fact, this is the time to borrow more to put our people back to work by rebuilding our crumbling, fossil fuel-dependent infrastructure and educating our children. If our people go back to work, the economy grows, unemployment costs go down, tax revenues rise, and the debt ratio shrinks without paying back one penny of it.

Why so many lies? Because financial elites like Peterson don't want to pay their fair share of taxes. They don't believe in funding a safety net for all Americans. They don't want to the government to help put Americans back to work. Instead, they want an economy by and for the elites.

4. We are under-taxed, not over-taxed. The super-rich want us to believe that taxes are too high and that those taxes are harming job creation and economic growth. It's a fabrication. First of all, taxes for most Americans have declined, according to a recent New York Times analysis:

..... most Americans in 2010 paid far less in total taxes ­ federal, state and local ­ than they would have paid 30 years ago. According to an analysis by The New York Times, the combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980.

Second, we have much lower tax rates than our chief European competitors. For example, Germany, an economic powerhouse, has an average tax rate of 40.6 percent while the U.S. rate is only 26.9 percent. Germany uses that money to rebuild its infrastructure, invest in education and find creative ways to nearly eliminate unemployment.

Third, the super-rich use a sleight of hand to make middle-class taxpayers believe that lower-income people are moochers. Like Mitt Romney, they are found of saying that 47 percent of Americans don't pay income taxes and that the rich pay most of those taxes. But income taxes are but a small portion of the tax bite on lower-income people who pay through payroll tax deductions, sales taxes and property taxes.

Finally, because our taxes are declining, it means that our public services are decaying as well. This creates a downward spiral the super-rich want to encourage: the more services decline, the less we want to pay in taxes, the more services decline. If you're really wealthy you don't care about public services since your life is entombed in private services -- private schools, private airports, private planes, private gated villas and so on.

5. Government jobs are just as good as private sector jobs. Another major con job concerns the attack on public employees. The greedy rich are trying to pit public and private sector workers against each other in large part because public employees still seem to have benefits the rest of us have lost (and they have unions and vote mostly Democratic). Corporate greed demands that we snuff out those benefits so workers won't demand them in the private sector. To further denigrate government, elites want us to believe that a private sector job is somehow more righteous that a public one -- that public employment is sort of like being on the dole because government workers are immune to the rough and tumble of competitive pressures that drives the private sector.

It's another hoax.

The truth is that some jobs are better done by government on behalf of the public. We learned almost 200 years ago that it didn't make sense to have competing fire and police departments. We also learned that if we wanted the average person to go to school, we needed public school systems, and not just private ones. Most countries (but not ours) have learned that much of the healthcare system runs better when it's publicly financed and controlled -- that for-profit hospitals and clinics do not provide the best care. In short, every modern economy is a combination of private and public sector jobs that are valuable to our society.

6. Wall Street needs to be shrunk (until we can drown it in a bathtub). The function of finance is simple: moving our savings into productive investments. By doing so, money supposedly moves to where it will do the most good for our economy. This function is considered so simple that most economics textbooks ignore Wall Street entirely.

However, when Wall Street is left to its own devices, it tends to create vast casinos that dramatically increase financial profits at the expense of the real economy. Worse still, as the speculative casinos grow and grow, the economy as a whole is endangered. Wall Street's grew rapidly just before the great crash of 1929 and just before the Great Recession of 2008-'09. It was stock manipulation during the 1920s and it was the housing casino over the last two decades. But in both cases it happened because Wall Street was deregulated and got too damn big. As the chart below shows, Wall Street is gobbling up more and more of our country's profits.


Click to enlarge.

We learned after 1929 that economic stability required severe financial regulation. We sat on Wall Street for nearly 50 years and it worked beautifully, especially between WWII and the 1970s. There were virtually no financial crashes anywhere in the world. But once we deregulated finance again, all hell broke loose as the world suffered through more than 150 smaller financial crashes. Finance grew and grew until it took down the entire U.S. economy. Along the way, Wall Street offered the easiest path to great riches for the few.

The simplest solution is the one hated by the super-rich: a small sales tax on each and every financial transaction involving stocks, bonds and every kind of derivative. By taxing the casino, we shrink its size and make it less dangerous to the rest of the economy. We also create new revenues for our economy, nearly all of it coming from the top fraction of the top 1 percent. No wonder they don't want us to know that.

Is Knowledge Power?

It's not enough for the greedy rich to buy politicians. They also need to buy our minds. That's why they pay for all this misleading economic education. But if we master the basic economic facts of life, we won't get conned. And we will have a much better chance at building a more just and healthy economy.

----------------------------------------------------------------------------------------
Les Leopold is the executive director of the Labor Institute and Public Health Institute in New York, and author of The Looting of America: How Wall Street's Game of Fantasy Finance Destroyed Our Jobs, Pensions, and Prosperity­and What We Can Do About It (Chelsea Green, 2009).

ANS -- Robert F. Kennedy Jr: Fox News Has Divided Country In A Way Not Seen Since Civil War

Here's a very short article that's an interview with Robert Kennedy, Jr.  There are videos available at the site. 
The topic is the right wing media and how it's hurting America.
Find it here:  http://www.huffingtonpost.com/2012/12/07/robert-f-kennedy-jr-fox-news_n_2261043.html#postComment  
--Kim

Robert F. Kennedy Jr: Fox News Has Divided Country In A Way Not Seen Since Civil War

The Huffington Post  |  By John Stephens Posted: 12/07/2012 11:55 pm EST  |  Updated: 12/08/2012 10:18 am EST
 


 

Robert F. Kennedy Jr told HuffPost Live host Josh Zepps in an interview Friday that he believes conservative media outlets such as Fox News are damaging the country.

Asked how he thought things have changed in the political landscape, Kennedy pointed to "big money" and "the right wing control of the American media, starting with Fox News" as hurtful to collaboration between differing political interests.

"Twenty-two percent of Americans say their primary news source is Fox News," Kennedy told HuffPost Live. "It's divided our country in a way that we haven't been divided probably since the Civil War, and its empowered large corporations to get certain kinds of politicians and ideologues who are in the United State Congress elected -- the Tea Party ideologues who control the Republican Party."

Kennedy, who is the nephew of John F. Kennedy and Ted Kennedy and attorney specializing in environmental law, also spoke about the hydraulic fracturing -- or fracking -- and the health risks and associated costs the practice represents for the country.

Watch Kennedy's comments on fracking in New York state below, and watch the full segment on HuffPost Live.

ANS -- The Hidden Link Between Medieval Land Parceling and Modern American Psychology

As I read this, the link is between land parceling and transportation systems.  An interesting theory.
Find it here:  http://www.wired.com/opinion/2012/11/how-a-quirk-of-medieval-farm-shapes-led-to-the-american-psychology-today/
--Kim

The Hidden Link Between Medieval Land Parceling and Modern American Psychology

• By Tim De Chant
• 11.30.12
• 3:00 PM

image: Google Maps satellite via Tim De Chant

The flight from Boston to Chicago isn't the most scenic, but if you're lucky enough to snag a window seat – no mean feat these days – study the patchwork landscape with a discerning eye. About 40 minutes into the flight, you'll notice something a bit peculiar (at least for North America): Instead of the usual tableau of square or rectangular farmsteads, you'll see ribbons of agronomy.

These ribbon layouts are a ghost of geography: a relic from when France parceled land in Canada back in the 1600s. What's most intriguing to me, though, is how ribbon farms – or rather the lack thereof in much of the United States – shaped attitudes toward modern transportation, and continue to shape our psychology as a nation today.

Because with ribbon farms, the expectation is that transportation is king.

Tim De Chant

Tim De Chant is the senior digital editor at NOVA and the author of Per Square Mile, a blog about density.



By starting with the transportation network and then building out from there, ribbon farms come with certain efficiencies. Part of their elegance is how easy it is to transport goods from them. Within a ribbon farm, moving around is a bit more difficult – the farthest part is much farther away from the house and barn than the most distant part of a square farm. But between farms and markets, ribbon farms are superior. Roads running past ribbon farms can serve more addresses over the same distance; neighbors are a short walk away; cities and crossroads closer than you'd expect.

The transportation-centric layout of ribbon farms in North America traces its roots back to medieval times. When France was trying to stabilize its colonial foothold in the New World back in the 17^th century, Cardinal Richelieu (an adviser to the king and powerhouse in French politics) hatched a plan. To encourage more intensive settlement, he parceled the land similarly to the way it was divided in France: in long, thin strips oriented perpendicularly to a transportation route – which in Nouvelle France was primarily the St. Lawrence River.

Much of arable North America, however, was not allocated in ribbon farms. The Public Land Survey System carved up large portions of the United States into one square mile sections, each of which were subdivided to create farms and aggregated to form townships. Canada adopted a similar system, the Dominion Land Survey, for its prairie states.

So when the U.S. started with square farms, the process and the results were the exact opposite from ribbon farms: We plotted the farms first and then pondered the logistics. It's therefore no surprise that Americans feel transportation should come to us instead of the other way around. We pick a place to live and then figure out how to get where we need to go. If no way exists, we build it: roads, arterials, highways, interstates … and so on.
We pick a place to live and then figure out how to get where we need to go. If no way exists, we build it…. It's the American way.

And it's this quirk of geography – the shape of a typical American farm – that I believe influenced the development of the entire nation.

Here's how: Roads snaked out to farms where they were needed, which is to say nearly everywhere. Farmsteads, and later suburban houses, were more or less evenly distributed across the landscape rather than concentrated alongside existing roadsides. In regions dominated by ribbon farms, transportation was clearly the foundation. But in much of the rest of North America, parcels were delineated first; transportation routes followed.

The fact that the farm, not the transportation, came first is important. It was a geographic case of the tail wagging the dog.

Flexible and distributed transportation networks are really the only solution compatible with this way of thinking. Trains, which rely on a strong central network, never had a chance. We were destined for the automobile all the way back in 1787, when we first decided to carve up the countryside into tidy squares.

Town, section, range. Pick your plot, worry about the details later. It's the American way, and it's driven the psychology of an entire nation.

Editor's Note: An earlier, unedited version of this article ("Town, section, range, and the transportation psychology of a nation") appeared on the author's blog.

ANS -- On the Filibuster

Here are excerpts from a pair of emails I got. I included their URL
so you can check it out if you want to, but I do not necessarily
endorse them (or un-endorse them either). I just thought the history
on the Filibuster was interesting. If you are in Washington DC this
week, you might want to go to the hearings mentioned below.
--Kim


The People Lobby page on Facebook:
http://www.facebook.com/peoplelobby

Stop The Filibuster action page:
http://www.peaceteam.net/action/pnum1104.php


...

But what's most interesting about today's alert is we have done some
intensive research on how the filibuster came into accidental
existence in the history of the Senate, and can report the all
accurate facts to you now.

Many are under the mistaken belief that our founding fathers intended
for a minority to be able to filibuster anything, some kind of extra
protection for the minority. Nothing could be further from the truth.
The original Senate rules provided for a procedure of "calling the
question" which was a way for a simple majority to call for end of
debate. The Continental Congress had this embodied in Rule 10, which
derived from British parliamentary practice.

It should also be noted that the rights of the minority, with respect
to the less populated states, was already protected by the Great
Compromise of 1787, which provided each state with the same number of
senators, regardless of population.

But in those days, our founding fathers were gentlemen, and would
never have used a procedural rule for brazenly dilatory purposes or
just to obstruct. The rule providing for calling the question was
used so few times in the early days that in 1806 Aaron Burr proposed
just dropping it, and so it was dropped by simple majority vote.

It was not until at least 30 years later in 1837 (some say 1841),
that some perverse senators got the idea that they could exploit the
lack of a rule to allow cutting off debate to literally talk forever,
as a means of holding the Senate hostage to an ultimatum of the
minority. And even at that there were relatively few filibusters.
Only 33 in the 57 years from 1840 to 1917. And that is when the
situation became critical.

There was a filibuster of 23 days against a bill to arm American
merchant ships to be able to protect themselves in the aftermath of
the sinking of the Lusitania by a German U-Boat. And that crisis led
to the enactment of the first cloture rule (unfortunately by way of
supermajority), at best a PARTIAL restoration of what had been lost
by the careless discontinuation of the original "calling the
question" procedure by simple majority vote.

So in fact, and again contrary to much misconception, there has never
been a Senate rule "authorizing" a filibuster. There have only been
repeated attempts to reign in the obstructionist abuse as it became
more and more outrageous and frequent over the years.

We are once again at such a point, where the Republican party has so
little left of gentlemen in them, that they are determined to
filibuster literally everything, a new tyranny of the minority. And
once again the majority in the Senate can in fact act to change the
rules to address this new level of sheer legislative spite, if only
we empower them with the political will of our action page
submissions.

Please stay tuned, because in the next alert we will trace subsequent
filibuster reform efforts in the 20th century, with more valuable
insights into how this all really happened, and exactly what we must
now do to fix our modern broken Congress, which would... bring
tears to the eyes of our founding fathers.
-------------------

This is the second installment of our mini-series on how the
filibuster broke our government. Today we focus on why the filibuster
is so contrary to the Constitution. Submissions on the action just
sailed past 17,000. Please spread the word as widely as possible.

Stop The Filibuster action page:
http://www.peaceteam.net/action/pnum1104.php
...
In configuring the institution of the Senate, our Constitution
specifies that a bill that "passes" the Senate (and of course the
House of Representatives as well) is then "presented" to the President
for signature (Article 1, Section 7). That our founding fathers meant
by "passage" a simple majority is not even a debatable point for
multiple reasons.

This is clear, in the first instance, from contemporary usage of the
word "pass", meaning by simple majority, as the general rule of all
other parliamentary bodies, and in dictionary definitions, at the
time.

Second, at the birth of the Constitution this was expressly debated,
and the idea of a requiring a supermajority to conduct ordinary
congressional business was rejected. For example, George Mason of
Virginia and others objected to the provision of "a simple majority
of a quorum of the House or Senate to pass legislation that would
bind the entire country." Both but Alexander Hamilton and James
Madison responded to these objections in The Federalist No. 22
(Hamilton), No. 58 (Madison) and No. 75 (Hamilton), by arguing that
this would subject the general business of government to a "junta" of
the minority, and their views prevailed.

Third, the Constitution does specify a number of exceptions for the
most severe matters, for example, impeachment in the Senate, the
override of presidential vetos, etc., that would require some kind of
supermajority. By itemizing these exceptions, this reinforces the
argument that only a simple majority should be required in cases not
so specified.

Fourth, there is a provision for the Vice-President to cast a vote to
break any tie vote in the Senate (Constitution, Article 1, Section
3). This could only have meaning if votes were to be taken by simple
majority, for otherwise there could be no tie.

This same section of the Constitution also provides that each Senator
should have one vote. But under the current tyranny of the minority
imposed by the Republican party, where EVERY point not unilaterally
surrendered to them is filibustered, there can be no vote at all
without at least 60 votes (out of 100) to permit consideration. This
means that each affirmative vote has been reduced in practice to
83.3% of a vote. It's as if handcuffs had been placed on the
Constitution.

Common Cause filed a lawsuit earlier this year in federal district
court in Washington, asking the court to intervene in this matter,
and to declare the filibuster unconstitutional for all the reasons
above, and a hearing on the opposing motion to dismiss will be heard
the beginning of next week on Monday, Dec. 10th. We have carefully
reviewed the briefs on both sides, and believe that while Common
Cause has a compelling case on the merits, it may be not be easy to
get a federal judge to intervene in Senate procedural matters.

Still it would be interesting to follow this case, and so if you are
in the Washington, DC, area, and would be interested in attending the
hearing as a member of the public, to take notes and report back to
the rest of us how the hearing went, please speak up and volunteer.
In fact, the more the merrier.

In the meantime, we must operate on the assumption that the positive
change we must have can only result from sufficient political
pressure, so it is critical to keep building the action page
submissions and participation on this page into a meaningful
political force. We cannot depend on the courts to save us. We the
People must be prepared to shoulder the burden of fixing this all by
ourselves.

ANS -- Fear and the Three-Day Food Supply

This article appears to be about food supply, but it's really about how to think in levels. 
Find it here:  http://www.patternliteracy.com/419-fear-and-the-three-day-food-supply-3  
--Kim

Fear and the Three-Day Food Supply

 Print PDF

One of the scary factoids in circulation these days is the revelation that grocery stores hold only a three- or four-day supply of food. People wield this statistic to argue that our food system is appallingly insecure and in grave danger of failure. We're only a few days from starvation, goes the frightening story, and we're liable one day to find our supermarket shelves empty and the populace in panic.

To accept this forecast uncritically, though, means ignoring how complex systems work. We can scare ourselves by selectively focusing on a small piece of a larger picture and behaving as if that tiny bit were the whole story. It's a natural tendency: Any organism interested in surviving needs to focus on what's going wrong much more than what's going right. But in this case, believing the tale of empty shelves may distract us from more urgent problems.

Storing large amounts of grains and other foods in cities is an ancient strategy, and it hasn't protected against famine. Many European cities and walled towns kept grain supplies designed to carry them through hard times, yet, according to historian Fernand Braudel, famine remained a regular visitor. Continent-wide, famines that killed 10% or more of the population struck Europe 13 times in the 16th century, 11 times in the 17th, and 16 times in the 18th century. Local famines were far more common, yet most towns had large granaries. With a little thought, we can see why storing food in public granaries isn't an effective strategy. How much food would a city of 50,000 need to store to get through months of utter crop failure? The math is brutal: the town would be almost knee deep in grain. And, more urgently, during a food panic, how many pounds of grain being handed to you by the state would make you calm down? Five? Ten? That's only a couple of day's supply for a small family. During a food panic, I suspect the government would need to hand out 20 to 50 pounds of grain per family every few days to calm a frightened populace. And during a panic, even the largest food storages are emptied quickly. The enemy here is fear, not the food system. In my book, anyone shouting "Run to the stores and buy as much food as you can!" deserves a special place in hell.

Storing more than a few days supply of food within a city makes little sense for a number of reasons. It requires dedicated storage buildings in cities­where space is most expensive. We'd need security forces to protect the food, a bureaucracy to run the logistics, and all that food must be cycled in and out for freshness. Plus, imagine a half million or more hungry people all converging on central granaries expecting to be fed. The logistical problems are enormous: think FEMA or TSA, and you can see why it's the wrong level to operate at. A much more sensible place for emergency food storage is at the household level. If you are worried about food shortages, get your own stash and store as much as makes you comfortable. In designing a solution to a problem, it's critical to intervene at the proper level, and here, the household is a far more effective level than the state.

Another reason for not instituting centralized food warehouses is that food systems are based much more on flow than they are on storage, and they usually have been. Claiming that our strategy for food delivery is precarious is not thinking in terms of dynamic whole systems, in which flows are far greater than storage­though both are important. Imagine someone panicking because they suddenly realized that their yard's soil only contains enough water for four days of plant growth. That may be true, but we know also that water is constantly flowing in­storage is only one bit of the picture. Moisture is being pulled upward through the soil, rain is likely before long, plus we have the water line from the street, household graywater, and all the other ways that the tiny bit of water on that land is being renewed continuously. Yes, it's possible that all the water delivery systems could break down simultaneously, just as the whole food system could, but that entails large-scale network failures­the utterly perfect storm­that would likely send signals well in advance and affect much more than water or food.

If we don't look at flows, and don't think in terms of whole systems, we can make ourselves very scared about the complex systems surrounding us. I call this tendency "drawing the box too small." If we draw a boundary at, say, the city limits of Chicago and measure how much food is available within it, we can get frightened at how little there is: a few days supply. But that's not really Chicago's whole food supply, is it? If we enlarge the boundary to, say, what can be delivered to the city within an hour's drive, suddenly that food supply contains all the farms and gardens, warehouses, cold-storage units, processing plants, feedlots, ships anchored in Lake Michigan full of grain, distribution centers, rail depots, and other sources of food within a 50-mile radius. That's a lot more than a four-day supply. Then, enlarge the box to a day's drive and the food supply will last for weeks. And if we increase the box to include the entire nation or continent­which is still only a part of our food system­we now have an essentially infinite supply of food, renewed every growing season, since the US is still a net food producer.

What makes think that something as unnatural as city limits is the boundary of a city's food supply? And what kind of catastrophe would limit a city to the food within it? Obviously, a local disaster such as a hurricane or earthquake could do this, but it also could destroy any food grown or stored there, or start a panic that depletes even the largest supply. (Or takes martial law to protect it and draconian rules to distribute it. I'd rather store my own.) Even Hurricane Katrina didn't prevent food from reaching New Orleans before many people went hungry. Perhaps a rupture of the transportation system would do it. But what would cause this? Rapid destruction of large parts of the highway or rail system is unlikely except in war or national strike (and striking workers and their families need to eat, too). These networks are highly distributed and redundant: There are many routes to any city. A major and sudden fuel shortage might do it, but I suspect that we'd quickly see rationing and redistribution of fuel away from many non-food uses, since governments know that hungry people start revolts. And actual transportation of food only uses 4% of the total energy in the food system (Weber and Matthews, Env. Sci. Technology, 2008, 42: 3508), so a fuel shortage would have less effect on moving food into cities, and more on the production and processing of food, which is a slower process that would unwind over weeks and months, not days.

There's a lot wrong with our food system, but its "just in time" nature is not one of the flaws. We need to ask why the idea of four days of food on grocery shelves scares us, and why it makes us believe we have a precarious food system. Cities have always drawn from the surrounding countryside for their food. Why is it hard to trust that the current food system will continue to deliver food into cities? I suspect that part of our fear is that the size and number of components of the food systems is so vast that we can't easily grasp how it works or believe that something that complex can continue to function long. It's like worrying that your circulatory system­with its billions of red blood cells, pulsing lung tissue, ornately branching veins and arteries, and complicated gas exchange network­will fail and you won't be able to get oxygen into your blood. It makes me dizzy just to think about it. Fortunately, complex adaptive systems such as our bodies and our food supply continue to function without our conscious control; they are highly networked and on many levels.

The long-term storage for our food supply is on the land, widely distributed, where it belongs. The food system has many tiers, and the "food stored in cities" level is a minor component. The system encompasses many levels of intermediate food storage components such as farms, cooperative grain-storage towers, processing plants, warehouses, shipping in transit, and distribution centers, each holding or supplying a significant percentage of our food supply and operating over a timeframe of weeks and months. It is a system in which flow makes up more of the capacity than storage. With a perishable good such as food, that's as it should be. Having more than a few day's supply of food stored at the end of the chain, in cities, would be a misallocation of resources away from the sources that generate the food and direct its constant stream toward the user. It's smart for residents to store emergency food in their home, in whatever quantity makes them feel safe. But an expensive revamping of our food system to build collective infrastructure for urban food storage makes little sense when flow is the key element of any food system.

Our food system has many flaws. We need more locally grown food. The current system is far too dependent on fossil fuels, is concentrated in too few seed varieties and a handful of corporations, is subsidized toward unhealthy and unwise products, and wastes prodigious quantities of water and nutrients. But an absence of giant state-run granaries is not one of its failings. In a complex system, flows are at least as important as storages, and is the appropriate place to focus. A secure food system stems far more from the flow of food and the existence of many levels of nearby and faraway storages than from the amount of food on grocery shelves. To claim that our just-in-time system is precarious is drawing the box far too small, and ignores the flow-based nature of the complex, constantly readjusting systems that we depend on.

Tagged as: Food Supply

ANS -- Redistributing Wealth­Upwards

This is a very short article about how the 1% moves money toward themselves and away from the rest of us, and don't really even see how rigged the finance world is. 
Find it here:  http://www.patternliteracy.com/655-redistributing-wealth-upwards  
--Kim

Redistributing Wealth­Upwards

 Print PDF

Whenever I feel like raising my blood pressure a few points, I read The Wall Street Journal editorial page. And the June 2-3, 2012 issue didn't disappoint me. In an article called "Robin Hoods Don't Smash Windows," John Agresto, the former president of St. John's College in Santa Fe, makes the familiar arguments against the redistribution of wealth: Anyone who wants it believes "that others must give when they demand, that others are means, not ends." He says that implementing wealth redistribution usually requires force and violence. And he's right about all of this, just not in the way he means.

Mr. Agresto is locked in a small-picture nearsightedness here, and, unsurprisingly, it works to his benefit. He can't see that corporate capitalism inherently causes redistribution of wealth upwards, from poor to rich. That is the definition, after all, of capital: accumulation of wealth and control of resources. Contrary to Agresto's assumptions, concentration of wealth is not a law of nature or a reward for virtuous living. It is a deliberate result of policy. This wealth extraction has allowed a tiny group to seize control of the global commons, and they are selling it back at a price ruinous to everyone, including the planet.

Mr. Agresto, like many in power, fears a fairer distribution of wealth because it would disrupt a system that is working for them. They can't see the many mechanisms explicitly designed to pull wealth from the pockets of the many and divert it toward the few. These methods are invisible background to him. If he sees them at all, they are the way things are meant to be. To change them, he says, would cause chaos and reward the undeserving. This is the ancient excuse of the elite: We are on top because we deserve to be, it is the natural order of things for us to be here, and if others want what we have taken from them, they are morally weak, jealous, greedy, and lazy. The upper class ignores the many processes, laws, and customs that, at threat of violence and imprisonment, keep wealth flowing disproportionately toward them. It is not, as he says, the left that sees other humans as merely means. It is the very rich, who use the entire populace as a means to more wealth.

Do you need examples of wealth extraction in action? One of the most widespread is the mortgage loan. Americans have been sold the notion that home ownership is a means to independence, when, rigged as the system is, it's just the opposite: a road to dependence on your employer and eternal debt. Banks have fixed mortgage payments so that a borrower pays mostly interest in the first years of a loan, minimizing borrower equity. That's wealth extraction. In a $200,000, 30-year mortgage at 5%, the total ratio of interest to principal is roughly 0.9 to 1. But in the first 5 years of that loan you'll pay interest at 3 to 1 over principal, $48,076 compared to $16,341. And 25 years later, for the rare souls who stay in one house that long, those proportions are reversed. The bankers get theirs first, and only after decades do you get any real equity. A fair mortgage would keep interest and principal at the same ratio over the life of the loan. Here we have a game rigged by the powerful, and with 48 million mortgages in the US, it siphons about a trillion dollars each year­money that could be invested in equity for everyone­away from the many toward the few. Since the average house is sold after 7 years, resetting the payment schedule, most borrowers never get much equity at all. This is a conscious design to redistribute wealth upward, and it is maintained by force. Try making a more equitable interest payment, and see how long it is before the police come to throw you out of your house. Redistribution of wealth by force already exists, just not in the way the rich want us to think of it.

The home mortgage is only one of countless methods by which the rich use their power to move wealth toward them. Corporate and wealth-favoring tax breaks, high taxes on earnings versus low taxes on capital gains, redistribution of your taxes to corporate officers via government contracts and subsidies, expensive lobbyists who write the laws, exorbitant credit card interest, pre-payment penalties, executive salaries thousands of times greater than those of workers­these are all legal gimmicks to help the rich pull money out of the pockets of the rest of us. It is a system designed for the rich to direct resource flows toward them, not because they merit it, but simply because they control it.

So please, when you hear someone complain about the dangers of redistribution of wealth, remind them that we already have it. We redistribute wealth upwards. And indeed, it is dangerous.

­June 16, 2012

ANS -- The Trans-Pacific Partnership: What "Free Trade" Actually Means

The blurb on Truthout said, "Andrew Gavin Marshall, Occupy.com: While the rhetoric of "free markets" tends to be all about reducing state interference in the economy, in actuality state interference increases - but only for the benefit of large corporations and banks." That pretty much says it.  He explains it very clearly in the article.  You should read it, even if "economics" gives you the heeby-jeebies. 
Notice that Occupy has taken it upon themselves to educate themselves about what is really going on in the world of money and finance.
Find it here:   http://truth-out.org/news/item/13082-the-trans-pacific-partnership-what-free-trade-actually-means   
--Kim

The Trans-Pacific Partnership: What "Free Trade" Actually Means

Saturday, 01 December 2012 09:51 By Andrew Gavin Marshall, Occupy.com | News Analysis


(Photo: Dayna Bateman / Flickr)To discuss "free trade agreements" or the "free market," we must first identify the theoretical versus the functional definitions of these terms – because theoretical definitions look at what those terms should mean, whereas functional definitions look at what the terms mean actually.

The theoretical definition of a "free market" is one in which every individual actor in the realm of exchange exists in a state of equality of opportunity; where all compete with one another to produce the best products at the cheapest prices for consumers, thus the most innovative and efficient producers succeed while others fail, unregulated - and unhelped - by the state. Within "free markets," what we call "free trade agreements" are meant to reduce barriers such as tariffs, subsidies and regulations so that market "competitors" can freely move products and goods across borders and compete in an ever-expanding global "free market."

The functional, or technical, definition of a "free market" is one in which the state regulates the market – the realm of economic exchange and activity – for the benefit of large transnational corporations and banks.

Barriers to profits, such as environmental, labor, safety and financial regulations, are dismantled. Meanwhile, subsidies and legal rights and protections are granted to major corporations, undermining competition and supporting monopolization. So while the rhetoric of "free markets" tends to be all about reducing state interference in the economy, in actuality state interference increases - but only for the benefit of large corporations and banks.

At the same time, state "interference" decreases in sectors that benefit the actual population, such as welfare, social services, pensions, healthcare, education, labor protections and so on. In the actual "free market," these protections are dismantled, subjecting populations to "market discipline" quite unlike the large corporations and banks that receive direct protection against "market discipline." The most obvious example of this is the post-2008 bank bailouts.

In a theoretical "free market," all the banks that gambled badly would have failed and collapsed. But with the functional "free market" we have today, the banks went to the state and got bailed out with trillions of dollars of taxpayer money.

The same dichotomy exists for the term "free trade agreement," which in theory is the opposite of "protectionism," where states intervene in the market by establishing tariffs, regulations, subsidies and protections for various imports and exports, thus undermining the "free market."

The technical definition, however, is one in which protectionism is rampant, with enormous subsidies and protective barriers, and very often includes thousands of pages of regulations and provisions. But because all of this is done to protect corporate and financial interests, it is called "free trade." It is "protectionism" if the barriers, regulations and protections benefit the nation or population and prevent transnational corporations and banks from having unhindered access to the "market"?

Likewise, is it "free trade" if the barriers, regulations, and protections benefit corporations and banks at the expense of the nation and population? In actuality, so-called "free trade" is a drain on the economy, creates enormous national debts, undermines labor, creates poverty and exploitation, wastes natural resources and devastates the environment. However, it is very profitable for banks and corporations, so is endlessly repeated as something "good" and "necessary."

In theory, "free trade" would enhance competition because it would allow all parties to compete on an even playing field internationally, thus companies would have to find ways to lower their costs of production while increasing their product standards, ultimately decreasing the final price to consumers. In this theoretical form of "free trade," the best and cheapest product, the company that made it, and the consumer and society as a whole would all benefit.

The reality is the exact opposite: the production cycle is broken up (this is commonly called "offshoring"), which increases the use of transportation, resources and the overall cost of production, making the final product more expensive to consumers. Case in point is the North American Free Trade Agreement (NAFTA), where competition between corporations is undermined while access to resources and markets is enhanced, subsidized and protected.

Corporate cooperation with each other and the state is enhanced while the poor, working and middle classes of Canada, the United States and Mexico are put in direct competition with each other. Corporations in Canada and the U.S. close their factories and move them to Mexico where labor is cheaper, increasing unemployment and poverty, destroying unions and labor protections, and forcing down wages while costs and corporate profits increase.

The role of the state is to regulate these markets and agreements for the benefit of the corporations and banks, and to force the populations to compete with each other in a race to the bottom: market monopolization for the elite, and market discipline for the population.

The break-up of the production cycle, especially from the late 1980s onward, has redefined what "trade" actually is. Typically, we think of trade as a system where countries export and import products or goods. With the era of "free trade," the production cycle was no longer confined within national borders, and was broken up between several countries.

The result was that a large percentage of what we call "trade" is actually one corporation moving parts or goods to a subsidiary or another corporation in a different country, to continue the production cycle until it returns to the home country as a finished product for consumption.

This is referred to as "intra-industry trade" (transporting parts or goods between corporations) or "intra-firm trade" (transporting parts or goods between a corporation and its subsidiaries). When the parts move across borders, often several times before the final product is created, customs agents at borders register the cumulative value of those products as a "traded" good, and these numbers are then used to determine the "actual contribution" of that good to the economy.

For example, a product which has parts manufactured in Canada, assembled in Mexico, and sold in the United States, would have to cross borders several times before it becomes a final product. Each time the parts cross a border, the total value of those parts at that time of transport gets registered as an import/export, instead of differentiating between the value added at each part of the production cycle. Thus, the statistics of exports and imports become heavily skewed and inflated since they do not account for "value-added." While the production cycle is broken up over several countries, the determination of "value" is not broken up to fit the actual trading system as it exists.

For a hypothetical comparison to reveal how absurd this process is, imagine a country that attempts to measure the total education of its population by including in its statistics the degrees and credentials of all the tourists who entered the country for short periods of time. The recorded education level of the country's population would be enormously inflated, since the educated tourists entering the nation would not be staying and contributing their education to the benefit of the society. Something similar happens when parts move across borders several times before they become a finished product, yet have their total value registered each time they cross a border.

According to a report from a Canadian think tank, the Conference Board of Canada, if countries were to apply a "value-added" measurement of trade instead of using inflated numbers applied to the cumulative value of a good, the actual contribution of trade to a country would rapidly diminish. In conventional measurements, trade accounts for 35% of Canada's economy, but with the value-added measurement, it drops to 24%. These manipulations are important because they serve as a basis for claiming that countries like Canada are "trade dependent" nations, which justify implementing more "free trade" agreements.

When a country imports more than it exports, it builds up a large amount of debt called a trade deficit. When a country exports more than it imports, it establishes a trade surplus. However, because the process of determining the value of imports and exports is enormously inflated and misleading, countries are saddled with inflated and inaccurate debts. They are then pressured into reducing those debts through austerity measures, which punish those countries' populations into poverty.

Apple is a great example of this process, often hailed as one of the great corporate success stories, being enormously profitable and therefore "good for the economy." As the Asian Development Bank Institute in Tokyo reported in 2010, while Apple is a U.S.-based company, the iPhone is itself considered to be a Chinese export to the U.S. The iPhone is produced in many different pieces and parts through several Asian and European countries, which are then transported to China where they are assembled and shipped to the United States and elsewhere.

The estimated value of the Chinese laborers in assembling the iPhone was 3.6% (or $6.50) of the total value of the finished product, estimated at $178.96 in 2009. Yet, the wholesale cost of the shipped iPhone is credited to China as an export. China was merely the last stop in the production cycle, but China records the total value of the finished product as an export, while the United States records it as an import. Thus, the researchers at the Asian Development Bank Institute concluded that "even high-tech products invented by U.S. companies will not increase U.S. exports."

Pascal Lamy, director-general of the World Trade Organization (WTO), commented, "What we call 'Made in China' is indeed assembled in China, but what makes up the commercial value of the product comes from the numerous countries... The concept of country of origin for manufactured goods has gradually become obsolete."

If trade statistics were adjusted to reflect the actual value contributed to a given product by a country, the U.S. trade deficit with China (which in 2010 stood at $226.88 billion) would likely be cut in half. In 2009, the iPhone left the United States with a $1.9 billion trade deficit with China, but if the value-added approach to determining trade statistics were applied, the United States would have a $48 million trade surplus with China (in relation to the iPhone alone).

With the production cycle broken up and scattered around the globe, this adds enormous costs to transportation of equipment, machinery, goods and products between these nations, which in turn requires enormous quantities of oil and fuel to facilitate this transport system, and thus produces unnecessary amounts of pollution. Because of the high costs of transportation, fuel, and assembly, the value of the end product goes up, making it far more costly than if it were simply produced in one or two countries.

With countries determining their exports and imports based on inflated and inaccurate statistics, populations are saddled with enormous debts and thus the financial cost of breaking up the production cycle lands on the shoulders of the population, who were already subjected to increased competition between labor forces, reduced environmental and social protections, dismantled subsidies and regulations, increased personal debt and poverty.

So if "free trade agreements" are bad for people, bad for labor – at home and abroad – and bad for the environment and the nation as a whole, why are they pursued?

The answer is simple: they create enormous profits for banks and corporations, whose losses are subsidized by the state. In an actual "free market," breaking up the production cycle would be far too costly to be a rational choice for a corporation, but because the state takes on the cost of doing so (largely through its trade deficit), the process continues.

When it comes to agreements like the Trans-Pacific Partnership, it is not difficult to see what the results will be: increased subsidies, protections and regulations for the benefit of large corporations and banks (notably the 600 corporations involved in secretly drafting the agreement over recent years) and decreased protections, subsidies and regulations that benefit the population, environment and society as a whole.

The TPP advances corporate monopolistic protections through intellectual property rights; undermines labor protections, putting the working class of 11 different nations in direct competition with one another; dismantles environmental protections and financial regulations; and expands corporate rights and privileges to allow undemocratic corporate institutions to challenge national laws through an unaccountable international tribunal of corporate lawyers who are given powers to overturn national laws or demand immense compensation from any nations that hinder those corporations' "potential profits," thus further increasing the heavy cost of "free trade."

The Occupy movement and other activists have a strong mandate to oppose the TPP and all related "free trade agreements." Popular opinion is swinging against "free trade" as people seem instinctively to recognize – even without all the details – that such agreements undermine labor, increase debt and benefit only the rich.

But while public opinion may oppose the TPP in principle, the bigger problem is that "the public" does not know the TPP even exists. This is a challenge that the Occupy movement can step up to: promoting an educational campaign that crosses borders, organizing international protests and actions against the TPP, and establishing a "free market" of resistance based upon the "free trade" of information.

As corporate rights expand and democratic rights decrease, so must people demand an end to the TPP. Organized resistance, information and action have stopped "free trade agreements" in the past, and they can – and must – do so in the future. The coming corporate tyranny of the Trans-Pacific Partnership can only be defeated through a democratic movement of Transnational People Power.

Our already frail and dying democratic institutions lack the capacity to take up the challenge, so the challenge now rests with the people alone.
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


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.

Andrew Gavin Marshall

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People's Book Project. He also hosts a weekly podcast show, Empire, Power and People on BoilingFrogsPost.com.

Related Stories

Tracing the Great Recession to a Memo 40 Years Ago
By Stephen Holden, The New York Times News Service | Review
Trans-Pacific Partnership Agreement: Drone Strikes on People With AIDS?
By Robert Naiman, Truthout | News Analysis
Trans-Pacific Partnership Met With a Week of Protest as Negotiations Conclude
By Staff, It's Our Economy | Press Release

ANS -- How to Stop Psychopath CEOs from Looting and Destroying Their Own Companies

Here is a really interesting article with a possible solution to the accumulation of psychopaths in high positions in financial firms.  I have included the rather civilized comments because they include other ideas, and objections to the article's ideas. 
Find it here:  http://www.alternet.org/corporate-accountability-and-workplace/how-stop-psychopath-ceos-looting-and-destroying-their-own?paging=off
--Kim




Corporate Accountability and WorkPlace  
The Tyee / By Mitchell Anderson
  34 COMMENTS

How to Stop Psychopath CEOs from Looting and Destroying Their Own Companies

There are ways to weed them out.
November 26, 2012  |  
 

Have bankers gone psycho? It seems hardly a week passes without another example of corporate fraud, rogue traders, rate fixing, and money laundering. Five years after the 2007 economic meltdown that wiped out $14 trillion of U.S. household wealth, the world's financiers seem to be behaving badly as ever and don't care who knows it. Perhaps expecting normal human behavior from many of these individuals is unrealistic because they are not normal -- they are psychopaths.

Corporate corruption linked to personal psychopathy presents both a problem and an opportunity. Rather than further futile efforts at regulation, solving the creditability crisis of global financial institutions may instead involve psychological screening to exclude certain individuals from occupying positions of trust they are medically unqualified for. And if so, cleansing of the capitalist Star Chamber will not be lead by government, but by the private insurance industry -- guided by the invisible hand of Adam Smith.

Let's start with the fascinating and frightening subject of psychopathy. This condition is neither insanity nor a treatable mental illness. It is instead linked to physical abnormalities in the amygdala region of the brain and is perhaps best described by experts as "emotional deafness." While psychopaths can often convincingly feign normal human reactions in order to manipulate others, inside they feel nothing but shark-like self-interest.

This ancient scourge has likely plagued humankind since the dawn of time, undermining our ability to trust each other and build cohesive societies. While sometimes glamourized by Hollywood as a super power, psychopathy shows little evidence of evolutionary advantage even though the condition has a strong genetic signature. After 100,000 years of human history, only one percent of the general population exhibits this affliction -- indicating that it is more parasitic than powerful.

A threat that can be screened

Only recently have scientists developed reliable screening methods to reveal people with this emotional disability, and such tests have been widely adopted in the criminal justice system. And while our jails are filled with people exhibiting this frightening trait, Dr. Robert Hare, a leading researcher in the field warns, "not all psychopaths are in prison. Some are in the boardroom."

Some researchers have directly linked the global financial crisis of 2007 to a growing prevalence of psychopaths in senior management of the financial sector. Dr. Clive Boddy believes that increasingly fluid corporate career paths have helped psychopaths conceal their disruptive workplace behavior and ascend to previously unattainable levels of authority. Boddy points out psychopaths are primarily attracted to money, status and power -- currently found in unparalleled abundance in the global banking sector. As if to prove the point, many of the world's money traders self identify as the "masters of the universe."

What little research has been done in field indicates that individuals with psychopathic traits are five times more common in senior management than the general population. And while psychopaths are tireless self-promoters, they are in fact poor performers and toxic managers. A study by Dr. Paul Babiak of 203 senior managers found those with psychopathic scores on screening tests scored lower on leadership, team building, performance and effective management. They are also 25 times more likely to engage in workplace bullying than normal humans.

How psychopaths get in

In spite of evidence to the contrary, employers often misjudge psychopaths as having strong characters that are "cool under fire." Babiak's study concluded, "our finding that some companies viewed psychopathic executives as having leadership potential, despite having negative performance reviews and low ratings on leadership and management by subordinates, is evidence of the ability of these individuals to manipulate decision makers. Their excellent communication and convincing lying skills, which together would have made them attractive hiring candidates in the first place, apparently continued to serve them well in furthering their careers."

Most importantly, besides being lousy leaders prone to risky or criminal behavior psychopaths fundamentally lack the ability to act in the interests of anyone but themselves. So how can they credibly act on behalf of their clients? Why do we tolerate a disproportionate number of people with this pathology being in charge of large aspects of global financial systems?

The banking sector has done little to address this issue, and may actively be making it worse. According to a first hand account by Brian Basham of The Independent, a banking colleague once confided to him, "At one major investment bank for which I worked, we used psychometric testing to recruit social psychopaths because their characteristics exactly suited them to senior corporate finance roles."

An accumulation of psychopaths in upper management would go a long way to explain the rash of reckless behavior and corporate fraud in the last decade. It also indicates that efforts by regulators to impose normal morality and lawfulness on the financial sector will continue to be futile.

Likewise, the legal tools available to shareholders or internal HR departments are also largely useless. Refusing to hire someone on the basis of psychopathic screening would be considered "prohibited discrimination" since it is unlawful to presume in advance that someone will commit a crime. Few companies would dare to internally screen senior managers for psychopathy, especially if there is no legal recourse to fire them.

A risk insurers can't afford

Which brings us to the insurance industry. Every company requires a variety of underwriting policies including, for directors and officers, liability insurance or fidelity coverage. Insurers are rightly fixated on risk management since they (and their shareholders) are on the hook when executives they underwrite go the way of Gordon Gekko.

Senior managers of financial companies have what is called "fiduciary duty" -- a legal obligation to act in the best interests of their clients and investors rather than themselves. Here's the rub: psychopaths simply cannot do that. They are medically impaired from acting in good faith on behalf of others.

Why isn't the insurance industry already insisting on psychopathic screening of senior managers for the companies they are covering? The rationale would be straightforward: psychopathy is a leading indicator of illegal or reckless behavior. Psychopaths should be excluded from positions that legally require fiduciary responsibility in the same way that blind people are not allowed to be airline pilots.

Insurance companies taking the lead on weeding out corporate psychopaths would also avoid a number of thorny legal issues that would face shareholders, employers or regulators seeking the same goal.

Any psychopaths identified through insurance pre-screening would not be denied employment, they would simply be deemed uninsurable. The result would be the same -- these dangerous individuals would need to find another, less influential line of work. But since insurance policies are simple legal contracts between two parties, there would be no recourse for psychopaths to launch costly legal challenges against employers based on wrongful dismissal.

Free capitalism to function rationally

This solution would also negate the need for government intervention -- a nightmarish scenario by anyone's yardstick. No right-thinking person would support regulation based on aberrant brain chemistry. That said, if psychopaths were weeded out of critically important roles in the global banking sector, governments and taxpayers would be a primary beneficiary. Public institutions the world-over have been mopping up the mess made by reckless bankers since 2007, and beyond. These massive bailouts have crippled the real economy and inflicted untold economic hardship on those that actually create wealth, not merely accumulate it.

Rather than regulation, insurance screening would be guided by free market capitalism. Insurers have a strong self-interest to limit risk, and a clear legal obligation to act in the interests of their investors. Shareholders of insurance companies should be demanding answers as to why the companies they are investing in are not using the most up-to-date science to limit exposure to costly risk.

A 2012 study by the Association of Certified Fraud Examiners found that companies lose fully five per cent of revenues to employee fraud each year, totaling $400 billion in the U.S. and $3.5 trillion worldwide. Scams perpetrated by executives or owners were three times more costly than those by managers, and nine times more than employees. Fraud in the banking and financial sector was more common than any other industry surveyed.

These rates are also rising. A survey of 500 Certified Fraud Examiners found that between 2008 and 2009, workplace fraud incidents increased by 55 per cent, and losses by 49 per cent. Almost 90 per cent of these experts felt that fraud levels would continue to rise in the future.

There will of course be inertia within the insurance industry to address this issue, especially amongst early adopters who do not want to be put at a competitive disadvantage. Yet until psychopathic screening becomes the industry standard we will continue to build our global financial house on sand -- an obvious risk to the world at large and insurers in particular.

They say there's no free lunch in this world. Yet a small number of abnormal individuals feigning free market ideals have racked up a towering tab that future generations will struggle to pay off for decades to come. This is both unacceptable and unsustainable. We have the tools to start excluding people incapable of behaving responsibly from some of the most powerful positions in the world.

We need to stop ignoring this problem and start solving it. The world will be a far better place for it.
--------------------------------------------

Mitchell Anderson is a frequent contributor to The Tyee.


----------------------------------------------

Showing 1-30 of 35 comments

•   Londoner99
  The corporate toxicity of the psychopathic and their use of the corporate system as a hunting ground is not a new realization, I've been talking about this to whomever will listen for years. However, let's not make these individuals the Lee Harvey Oswald type-patsy in the crimes that continue to be committed. The so-called "free market" was a ploy to enable a certain group of oligarchs (psychopaths  also, if you will) to diminish the ability of nation states to be self-supporting and self sufficient within their own borders and according to their own points of reference. A particular use of money flow in this "free market" structure has made life worse, not better for millions. The private ownership of industry for profit (definition of capitalism) has also been hijacked due to the fact that that same private ownership has not been shared but centralised in the hands of a very small group of global power-possessors. Individual psychopaths are very easily managed (i am a psychologist by trade) however what needs to be examined and exposed is the fact that the prevailing corporate culture is one of psychopathy. The 'elephant in the room' is the fact that non-psychopaths are expected to work for psychopathic institutions and pretend to themselves everything is "fine" - that awful word. We subsequently have a population possessed of increasing emotional and cognitive dissonance and no-one wants to talk about it. I will be happy to elaborate on this topic if anyone is interested.
  
  
•   lindahardesty
  Don't elaborate here, but give us a link to your website like: http://lindahblog.blogspot.com...
  
  
•   Londoner99
  site is www.senseandaim.com - where an overview of a detailed new model for the workplace can be found
  
  
•   jimmmmmy
  There is a great article on "truthout "today supporting your opinion in very clear detail.
  
  
•   foreclosure_defender
  Many studies have shown that perfectly normal executives develop psychopathic tendencies when installed in a position of great power and wealth.  Bankers weren't born bad; they evolved.
  
  
•   kyushuphil
  No, they didn't just "evolve," they went to biz & law schools.
  
  
•   Jack Lohman
  Correct, but remember this: the BANKERS fund the political campaigns and thus get away with stealing. This nation's #1 problem is political corruption. We MUST stop the flow of cash to politicians if we expect to stop the stealing (which incidentally, is your politician's favorite pastime too).
  
  
•   kyushuphil
  Mitchell Anderson just might be convincing me of the need for standardized testing.
  Only, as in the country of the world's best education system, Finland, where standardized testing isn't allowed at all to infect the schools, maybe "higher" ed in America ought to use psychopathic testing to guard against the types who posed with Mitt in that Bain Capital photo -- all of them raising high their gods, dollar bills -- one even sporting it in his grinning mouth.
  I wonder why the editors didn't grace this Mitchell Anderson piece with that photo?
  
  
  
•   lindahardesty
  You are proposing to used standardized testing/psychological screening to limit individuals' career choices?? Based on crimes you expect them to commit? That is not a solution to the problem of "successful" psychopaths. It is a violation of civil and human rights. It also won't tag successful psychopaths who get wind of it, and will tar some unlucky non-psychopaths.
  In the banking world, regulations with enforcement would help. The Glass–Steagall Act was working till it was repealed.
  The broader phenomenon of psychopaths getting ahead, is a sticky problem. I wonder if we are all about to lose any semblance of privacy, in this new world of infinite online information? Maybe we should just repeal all libel and slander laws, and crowd-source the tracking of psychopaths through society.
  
  
•   Doug Pederson, Digital Video evangelist
  libel and slander doesn't exist when it's the truth.
  
  
  • in reply to lindahardesty
•   warrior_woman
  " legal tools available to shareholders or internal HR departments are also largely useless. Refusing to hire someone on the basis of psychopathic screening would be considered "prohibited discrimination" since it is unlawful to presume in advance that someone will commit a crime"
  The same laws that govern HR depts would also govern insurance testing. This is not the correct solution. Another solution would need to be found but in the interim, restoring Glass Steagall & anti-trust laws would go a long way.
  
  
•   CL1797
  The reason they do what they do is the benefits far outweigh the risks. Especially in this 1890s redux of monopolies and Plutarchies. Remove the benefits, increase the risks and curb te behavior. So, yeah reinstating Glass-Steagall would be a start but much broader rules and limitations must be place on corporations and especially the financial corporations since the possible damage tey can wreak is so much greater than our ability to recover from it.
  Edited addendum: If we can somehow make the risks and penalties for bad behavior greater than the perceived rewards there would be no need to screen for psychopathy--the very nature if the psychopath would prevent the damaging behavior as the personal risk would preclude (in the psychopath's mind) that behavior. Therefore, no abridged rights or added costs for screening. Simple and proven solution.
  
  
  • in reply to warrior_woman
•   PrMaine
  Corporations are people - or so they say.
  So what do we think of a person who buys another person, takes away everything that other person has and just allows that other person to die?  It seems like serious criminal behavior to me.
  
  
•   CL1797
  As the bumper sticker says--I'll believe corporations are people when Texas executes one.
  
  
  • in reply to PrMaine
  • 1 Like
•   prinzowhales
  How to stop them is remarkably easy...Ladies and gentlemen!...I present to you the new Chairman of the SEC!....
  
  http://www.cbc.ca/news/canada/...
  ...We will, of course, remove the petty restriction regarding duct tape...
  
  
•   jimmmmmy
  Max Keiser predicts Jamie Dimon will be given that post. Now there is the psychopaths poster boy.
  
  
  • in reply to prinzowhales
•   avidamerican
  Pass legislation immediately to force these companies to fund the Pension Funds for 75 years, like they did to the Postal System.  Don't allow them to file bankruptcy as long as they have millions to pay their CEOs.  If they can afford all those millions to CEOs, they are not bankrupt.
  
  
•   howarddoughty
  John F. Kennedy was wrong. The greatest threat to America is not "mental illness." Mental illness is the consequence of American and (post)modern capitalism in general.
  No avalanche of warm and fuzzy CEO's is going to make for a just and humane society.
  Psychopathy is not an aberration afflicting some government, business and social "leaders"; it is a precondition for the desire for leadership.
  Lord Acton said "power corrupts." That, I think, is nonsense. The fact is that only the inherently corrupt, the psychopaths, yearn for power.
  Narcissism, monomania, an absence of conscience, etc., are part of every CEO's job description. It may be that, on rare occasions, mentally healthy, decent and caring people stumble into positions of power ... but they are few and most fail. It is the system, not the people entrusted with running it that is ultimately at fault.
  
  
•   J_S_Graham
  "How to Stop Psychopath CEOs from Looting and Destroying Their Own Companies"...is this a trick question? The answer is fairly simple, kill them...kill them all and their political lackeys. Judging from history, the inherently insane and evil Those Who Would Be Kings need this sort of occasional reminder that they're human just like the rest of us. Otherwise, they tend to do things like enslaving people, causing famine and other environmental devastation on unprecedented levels, and instigating genocide. Based on what's going on in the world today, I'd say we've reached that point. It's time to clean house.
  
  
•   mwildfire
  This piece has two large flaws, though at least it does usefully broadcast the problem. First, it assumes that a simple test will reliably identify psychopaths. Presumably the author is talking about Hare's checklist--but asking an intelligent psychopath twenty questions and assigning points on the answers is of little use considering one of the universal traits among psychopaths is a propensity for, and skill with, lying. The Babiak/Hare study with the 203 managers got around this by interviewing the bosses, colleagues, and underlings of all these managers, not relying solely on their own word The other possible test is a brain scan--it's been shown that psychopaths lack the normal response to emotionally disturbing pictures. But here too I wonder if this test is entirely reliable, if some psychopaths might not be able to fake the reactions with practice. Secondly, the piece talks about banksters as a serious problem, along with the obvious imprisoned criminals, and averts its eyes from noticing the OTHER major place psychopaths tend to end up--that is, the intelligent ones born into upper middle or upper class families: Congressional seats and the Oval Office. The actions of the sociopaths in these realms is just as destructive, and fully intertwined, with the actions of the ones leading financial and other corporations. The author states that no right-thinking person would endorse a policy response, presumably because right-thinking people understand that only the holy Free Market can solve problems. I, however, am a left-thinking person and IF there were a reliable test for sociopathy I would be in favor of a law mandating that all candidates for public office must undergo the screening--very publicly--as a condition of candiodacy.
  
  
•   yahoo-TV3M7CYNPK4IMQEQIA2XZXDYL4
  NO test can test the underlying cause and that includes brain scans which only detect structural changes ASSOCIATED with "psychopaths" (which is an arbitrary categorization with no established physiological basis).
  If you want to know how much that is worth look at the history of "lie detectors": always throughout their whole long history grossly exaggerating any supposed benefit: at the best only very slightly better than pure chance, competely worthless for any system that places any value at all on avoiding harming the innocent (which at present certainly does not include the USA).
  The only way to go in anything remotely resembling a democracy is to focus on behavior and not test results. Almost every test includes a subcategory of "unintended targets" for those with positive results. One example is the MMPI (Minnesota Multiphasic Personality Inventory). Once subject got a result 3 standard deviations (SDs) above the norm in psychopathology which turned out to be very much of a false alarm - because he also got 3 SDs BELOW the norm for lying (I forget what the term was) which is supposed to be very closely associated with psychopathology. The explantion turned out to be that he grew up an a very pathological culture and was highly intellegent (top percentile in ALL categories) and for him thinking something that disagreed with the accepted ideas of his group was entirely normal (and, in the situation, remarkably healthy) yet that led to answers that created high scores in "psychopathology" (which in that test pretty much equated with being comfortable with disagreeing with the overwhelming majority).
  Tests are useful only if you have no concern whatsoever about the severe damage that may result to innocent people who are inappropriately included in the "wrong" category. That is something that is absolutely inevitable with any test that is not based on entirely objective and direct verification of the direct underlying cause (i.e.: no association need apply!) of the thing you are testing for. Anyone who maintains that the test he/she is promoting has no such problem is flat out lying. (and I include in "lying" those who really don't know nor care. If you don't know and claim to, that is lying whether or not what you say may be coincidentally true or not.)
  We absolutely do need to keep this kind of behavior out of positions of power. But testing for underlying qualities is not the way to do it. That's going back to the ear of "trial by fire" superstition: just grab the stone from the bottom of the pot of boiling water and if you are not harmed, then you are innocent. Same thing with ALL such tests: what they really do is to obscure the fact that what's really happening is that you are giving the tester the power to have their OPINION considered to be truth with no question alllowed but you are obscuring that ugly reality with the facade of a "test. Trial by fire, polygraphs, psychological testing ... all just ways of misrepresenting opinion to be proven fact. All extremely damaging because they make defense of the innocent far more difficult or impossible.
  We should not trade one abomination for another.
  OFTEN the "exceptions" are the most valuable people of all (as in those willing to responsibly challenge even the overwhelming majority when what they are doing is morally wrong.)
  DUE PROCESS is the answer (that is so notably absent in the USA today).
  
  
  
  • in reply to mwildfire
•   Robyn Ryan, Retired Air Force Major Ph.D., American Studies, UH-Manoa 2004 Married to Blue Max, blues guitarist. 2 Bull Terriers Member, Krewe of Pirates
  Stop rewarding psychopaths. Hierarchical management with an unorganized, powerless  labor force always leads to abuse. The great experiment of America was that of using government as a shield against corporate rapine, including those wearing crowns. Remember, early American colonies were corporate entities with charters and production goals.
  The Founding Fathers feared corporations, and tried to limit their influence.
  The Civil War was about the right of the individual citizen to be free of economic models that debased human rights. Including slaves.
  The economic model of labor unable to capitalize on their assets leads right back to tyranny of economics. Think Wal-Mart.
  The New Deal, SS, medicare and food stamps are designed to give citizens a means of resisting corporate pressure to undervalue labor to survive and Obamacare removes the threat of death as a consequence of defying employers.
  The younger generation gets it. 
  
  
•   CL1797
  Perhaps why the German model of corporations is gaining strength and proving effective--run along a more cooperative and horizontal model utiizing input from ALL STAKEholders and not just upper management and STOCKholders.
  
  
  • in reply to Robyn Ryan
•   Todd Miller
  Good comments except.  Not true that people develop these traits on the job.  Second, employment screening is widespread already so those who argue its a violation of rights & I agree your rights are already totally being violated in this regard.  Third, tests can catch psychopaths.  How come?  Psychologists can detect faking good & bad & no sociopaths can't figure out how they do that.  Still, the way to screen them out is through the behavior in childhood and in the workplace.  Screening CEOs is what is lacking because they tend to surround themselves with like-minded individuals so you end with organizations filled with them.
  Also, you need treatment for people who are fooled by these people.  It's a world rocking experience.  Most people have no idea, although there victims do.  Therefore, listening to victims is the easiest way to catch them.
  
  
•   Perry Logan
  Would it be blasphemy to say that both Barack Obama and Mitt Romney fill the bill for psychopathic personality? His admirers are forever talking about "no-drama Obama." That's his psychopathic cool.
  
  Alex Jones and the Secret Code
  (Edited by author 1 hour ago)
  
  
•   jimmmmmy
  Add Clinton to that list and I would agree. Bush juniors low IQ  excludes him from this list, as would Reagans senility. Johnson, Nixon, and Bush senior cetainly qualify also. Off point I guess the Susan Rice corruption scandal that is being studiously ignored by this site has added some great fuel to your pyre of dislike for the Obama regime.
  
  
  • in reply to Perry Logan
•   jaydeezee
  Again, the obvious answer is licensure.  Healthcare professionals, accountants, lawyers, teachers, some engineers and even hair dressers require licensure.  A licenced executive is easy to get rid of.  They burn too much money and they find something else to do.  Also, a specialty exam becomes part of licensure.  This means you must know something about the business you want to manage.  Physicians and pharmacists have specialty tickets. Won't stop them all, but it'll stop a lot in their tracks.
  
  
•   OldUncleDave
   Psychopathy is advantageous in a capitalist system.  Corporations are the perfect psychopaths and the perfect capitalists. They cannot feel, and they are immortal.
  
  
•   CL38
  Psychopathy is NOT advantageous in ANY system of government, unless you want psychopaths to dominate the world.
  
  
  • in reply to OldUncleDave
•   kimc
   So, you are saying the system is evil?  (I agree with that.  We need to complete the democratic revolution we started in 1776 and make business democratic rather than hierarchical.  Worker-owned, democratically-run cooperatives is the way of the future.)
  
  
  • in reply to OldUncleDave

Add New Comment

owing 31-36 of 35 comments

•   jimmmmmy
  Good article an interesting take on the problems we face today. I'm surprized it got published by a neo-liberal site like the Tyee that is run by former neo-con Socred government pols, many of whom have all the qualities the writer of  this article describes, and certainly helped put us into the current depression. Note that the author is careful in not naming any of these psychopaths.
  
  
•   CL38
  Another area that's important to examine for the same psychopath mentality is in politics and on our newly militarized police forces across the country. 
  Over 30 years, we've seen the extreme authoritarian right exhibit very similar characteristics, all of which have impacted societal attitudes, government functioning and our political system in very destructive ways.  As a result, our country's center and policies have shifted so far to the right that we engage in false wars (Iraq), drone strikes, unwarranted citizen surveillance, denying citizens free speech and protest rights, authorizing unending detention and arrest of any citizen "suspected" of terrorist activities or affiliations--all without due process. Gains for women and blacks are attacked by the same politicians, while all-white-male-authoritarian rule is enforced.
  These changes in the US are not accidental. They were planned and implemented by right wing think tanks and their funding organizations, starting in the late 70's. For more in-depth information, read Republican, John Dean's book, "Conservatives without Compassion".
  This article offers the opportunity for open discussion and further study.  Corporate structure and ideology are based on a military hierarchical mentality, which in and of itself, is a problem in corporations, politics and society. We need to incorporate more evolved ways of structuring and managing the workplace government, etc.
  (Edited by author 22 minutes ago)
  
  
•   Kay Allen
  A 2012 study by the Association of Certified Fraud Examiners found that companies lose fully five per cent of revenues to employee fraud each year, totaling $400 billion in the U.S. and $3.5 trillion worldwide. Scams perpetrated by executives or owners were three times more costly than those by managers, and nine times more than employees. Fraud in the banking and financial sector was more common than any other industry surveyed. "
  I'd like a look at religious organizations' books. Remember all of those pederast priests?
  
  
  • in reply to CL38
•   Joe Brewer
  I have been thinking about this very problem and have sketched a framework for how we deal with it in How Can the 99% Deal with 70 Million Psychopaths?  Would love to discuss this with you.
  
  
•   willymack, A seventy three year old retired sailor and professional driver.
  It's gratifying to see an author share my opinion that Assholes-in-Charge of corporations are psychotic, since this has been my opinion for years. I can't lay claim to a degree from a university or a PHD in psychology, just some brief but intense training in the subject at Navy schools and at a hospital in Honolulu. I guess I can claim my knowledge of the subject is a bit better than the average Joe's. It's interesting to note that the psychopaths got to where they are because they were regarded by those who hired them as "decisive" and "leaders" as opposed to the twisted, manipulative scoundrels they actually are. If any of these screeners were educated as I was (and that's not that much), they'd be able to see the pathology in their prospective employees, and would reject them out of hand. As with so many of our problems, education is not only the key, but the answer as well, and our people seem to be allergic to education, despite their university degrees and fancy titles.
  
  
•   kimc
   Here is a fascinating (and fairly short) article on what would happen if psychopaths did dominate the world.  The article is by Brad Hicks. http://bradhicks.livejournal.c...