Success is the national religion, and almost everyone is a believer. Americans love winners. But that’s just the problem. These guys on Wall Street are not winning – they’re cheating. And as much as we love the self-made success story, we hate the cheater that much more.

Whole article here: “Wall Street Isn’t Winning – It’s Cheating“

See also my other post from today:

Oh, yes, just one more bit of trivia, completely unsubstantiated since I’m too lazy right now to go back and look it up. According to some recent poll, what percentage of Americans answered that they thought they would one day be in the top one percent? The answer was, I believe, forty percent.

American innumeracy and lack of historical insight are right up there with American optimism. I hope the American sense of fair play still exists, but sometimes I wonder.

Cassandra

Here are my favorite paragraphs:

Why have salary, bonus, etc. gone up so much for this group? Lots of economists have been asking this question, and CBO runs through some of the possibilities, without really settling on an answer [emphasis added]. Three of the possibilities suggested by the report:

1. Companies have grown larger and more complex. So a single executive can have a bigger impact on profits. Therefore, it’s rational for companies to pay executives a lot more.

2. A shift toward paying execs with stock options means that the value of their pay packages can shoot way up when the stock market rises.

3. “Weaknesses in corporate governance have enabled corporate executives to overpay themselves.” In other words, it’s not rational for companies to pay executives so much.

“Without really settling on an answer”?! Had I not recently read William Domhoff’s Who Rules America and John Bogle’s Battle for the Soul of Capitalism, it might have taken me a nanosecond to figure out the best answer.

Unfortunately, having read those two books and several others, I felt almost grateful that the Congressional Budget Office at least threw out the that third possibility.

I will refrain from sarcastic mutterings and simply move on to read the whole report from the Congressional Budget Office. It’s here: Trends in the Distribution of Household Income between 1979 and 2007

Once again I’ll most likely dream of sharpened pitchforks.

Cassandra

My only complaint with America’s still pretty much intact freedom of speech is that truth is not required. Spinning, twisting, and outright lying are protected except in a few specific circumstances. In other words, “news” doesn’t have to be accurate. In fact, it doesn’t have to be news at all. It might be a press release from some company.

Considering the dangers, all I can say is this:

Blessed be the fact checkers.

Cassandra

Cassandra

For now, here’s the link to what I’ve written so far for the contest:

Four years ago I was talking to a group of super quants, mostly PhDs in mathematics, about finance and the environment. I used the growth rate of the global economy back then – 4.5% for two years, back to back – and I argued that it was the growth rate to which we now aspired. To point to the ludicrous unsustainability of this compound growth I suggested that we imagine the Ancient Egyptians (an example I had offered in my July 2008 Letter) whose gods, pharaohs, language, and general culture lasted for well over 3,000 years. Starting with only a cubic meter of physical possessions (to make calculations easy), I asked how much physical wealth they would have had 3,000 years later at 4.5% compounded growth. Now, these were trained mathematicians, so I teased them: “Come on, make a guess. Internalize the general idea. You know it’s a very big number.” And the answers came back: “Miles deep around the planet,” “No, it’s much bigger than that, from here to the moon.” Big quantities to be sure, but no one came close. In fact, not one of these potential experts came within one billionth of 1% of the actual number, which is approximately 1057, a number so vast that it could not be squeezed into a billion of our Solar Systems. Go on, check it. If trained mathematicians get it so wrong, how can an ordinary specimen of Homo Sapiens have a clue? Well, he doesn’t. So, I then went on. “Let’s try 1% compound growth in either their wealth or their population,” (for comparison, 1% since Malthus’ time is less than the population growth in England). In 3,000 years the original population of Egypt – let’s say 3 million – would have been multiplied 9 trillion times! There would be nowhere to park the people, let alone the wealth. Even at a lowly 0.1% compound growth, their population or wealth would have multiplied by 20 times, or about 10 times more than actually happened. And this 0.1% rate is probably the highest compound growth that could be maintained for a few thousand years, and even that rate would sometimes break the system. The bottom line really, though, is that no compound growth can be sustainable. Yet, how far this reality is from the way we live today, with our unrealistic levels of expectations and, above all, the optimistic outcomes that are simply assumed by our leaders.

Incidentally, Grantham, along with Warren Buffett, says, “Tax the Rich!” Don’t know how rich Grantham is, but he’s rich enough to have given several million to a university, and his GMO partnership is managing over $106 billion dollars. The entry level investment for his clients is several million dollars, so GMO isn’t a name that’s all that well known among the peasants.

In any event, Grantham’s newsletters are available on the GMO.com website.

Back to the fossil-fuel based yellow irrigation tubing.

Cassandra

How ignorant are Americans of government programs? Take a look at this chart and take a guess:

The source of this appears here: http://government.arts.cornell.edu/assets/faculty/docs/mettler/submergedstat_mettler.pdf

Depressing, eh?

Cassandra

In case you haven’t noticed, the world is on the verge of a horrific global food crisis. At some point, this crisis will affect you and your family. It may not be today, and it may not be tomorrow, but it is going to happen.

Crazy weather and horrifying natural disasters have played havoc with agricultural production in many areas of the globe over the past couple of years. Meanwhile, the price of oil has begun to skyrocket. The entire global economy is predicated on the ability to use massive amounts of inexpensive oil to cheaply produce food and other goods and transport them over vast distances. Without cheap oil, the whole game changes.

Topsoil is being depleted at a staggering rate and key aquifers all over the world are being drained at an alarming pace. Global food prices are already at an all-time high and they continue to move up aggressively. So what is going to happen to our world when hundreds of millions more people cannot afford to feed themselves?

Most Americans are so accustomed to supermarkets that are absolutely packed to the gills with massive amounts of really inexpensive food that they cannot even imagine that life could be any other way. Unfortunately, that era is ending.

There are all kinds of indications that we are now entering a time when there will not be nearly enough food for everyone in the world. As competition for food supplies increases, food prices are going to go up. In fact, at some point they are going to go way up.

Let’s look at some of the key reasons why an increasing number of people believe that a massive food crisis is on the horizon.

The following are 20 signs that a horrific global food crisis is coming….

1. According to the World Bank, 44 million people around the globe have been pushed into extreme poverty since last June because of rising food prices.

2. The world is losing topsoil at an astounding rate. In fact, according to Lester Brown, “one third of the world’s cropland is losing topsoil faster than new soil is forming through natural processes”.

3. Due to U.S. ethanol subsidies, almost a third of all corn grown in the United States is now used for fuel. This is putting a lot of stress on the price of corn.

4. Due to a lack of water, some countries in the Middle East find themselves forced to almost totally rely on other nations for basic food staples. For example, it is being projected that there will be no more wheat production in Saudi Arabia by the year 2012.

5. Water tables all over the globe are being depleted at an alarming rate due to “overpumping”. According to the World Bank, there are 130 million people in China and 175 million people in India that are being fed with grain with water that is being pumped out of aquifers faster than it can be replaced. So what happens once all of that water is gone?

6. In the United States, the systematic depletion of the Ogallala Aquifer could eventually turn “America’s Breadbasket” back into the “Dust Bowl”.

6. Diseases such as UG99 wheat rust are wiping out increasingly large segments of the world food supply.

7.. The tsunami and subsequent nuclear crisis in Japan have rendered vast agricultural areas in that nation unusable. In fact, there are many that believe that eventually a significant portion of northern Japan will be considered to be uninhabitable. Not only that, many are now convinced that the Japanese economy, the third largest economy in the world, is likely to totally collapse as a result of all this.

9. The price of oil may be the biggest factor on this list. The way that we produce our food is very heavily dependent on oil. The way that we transport our food is very heavily dependent on oil. When you have skyrocketing oil prices, our entire food production system becomes much more expensive. If the price of oil continues to stay high, we are going to see much higher food prices and some forms of food production will no longer make economic sense at all.

10. At some point the world could experience a very serious fertilizer shortage. According to scientists with the Global Phosphorus Research Initiative, the world is not going to have enough phosphorous to meet agricultural demand in just 30 to 40 years.

11. Food inflation is already devastating many economies around the globe. For example, India is dealing with an annual food inflation rate of 18 percent.

12. According to the United Nations, the global price of food reached a new all-time high in February.

13. According to the World Bank, the global price of food has risen 36% over the past 12 months.

14. The commodity price of wheat has approximately doubled since last summer.

15. The commodity price of corn has also about doubled since last summer.

16. The commodity price of soybeans is up about 50% since last June.

17. The commodity price of orange juice has doubled since 2009.

18. There are about 3 billion people around the globe that live on the equivalent of 2 dollars a day or less and the world was already on the verge of economic disaster before this year even began.

19. 2011 has already been one of the craziest years since World War 2. Revolutions have swept across the Middle East, the United States has gotten involved in the civil war in Libya, Europe is on the verge of a financial meltdown and the U.S. dollar is dying. None of this is good news for global food production.

20. There have been persistent rumors of shortages at some of the biggest suppliers of emergency food in the United States. The following is an excerpt from a recent “special alert” posted on Raiders News Network….

Look around you. Read the headlines. See the largest factories of food, potassium iodide, and other emergency product manufacturers literally closing their online stores and putting up signs like those on Mountain House’s Official Website and Thyrosafe’s Factory Webpage that explain, due to overwhelming demand, they are shutting down sales for the time being and hope to reopen someday.

So what does all of this mean? It means that time is short. For years, many “doom and gloomers” have been yelling and screaming that a food crisis is coming. Well, up to this point there hasn’t been much to get alarmed about. Food prices have started to rise, but the truth is that our stores are still packed to the rafters will gigantic amounts of relatively cheap food. However, you would have to be an idiot not to see the warning signs. Just look at what happened in Japan after March 11th. Store shelves were cleared out almost instantly.

It isn’t going to happen today, and it probably isn’t going to happen tomorrow, but at some point a major league food crisis is going to strike. So what are you and your family going to do then? You might want to start thinking about that.

Indeed.

I haven’t mentioned it here, but Cuba, a country many point to as the model of sustainability, is in the midst of a major drought. Here’s an overview: “Rainy Season Off to a Poor Start” The springs rains haven’t come. Water is being trucked into cities and rationed. Livestock is starving.

Have a nice day.

Cassandra

It ain’t so. Some students are simply resistant to change. In teaching, I avoid expressing my opinions as much as possible and just try to teach people to change their minds when evidence piles up to indicate they are wrong. Over the years, I discovered how difficult this can be. In every class, I’ve found students, both self-described liberals and conservatives, who simply didn’t want to think, didn’t want to weigh evidence, didn’t want to change.

That said, more of those change-resistant students called themselves conservative. As the last presidential election showed, Liberals use “change” as a positive word in campaigns. Conservatives are more likely to talk about “tradition” and “fundamental values”–by which they often mean established values. For many, adherence to tradition of some sort is a central element of their conservatism. Religion. Class. Whatever. They are comfortable with the status quo and simply don’t want to change. It upsets them. They often fear it. They want to be reassured that they are already correct.

I say Question Authority. Question Everything. Even this.

Cassandra

Water, water, every where,
And all the boards did shrink;
Water, water, every where,
Nor any drop to drink.

Maybe it’s time to retune this to reflect the erratic weather:

No rain, no rain, rain so fair,
And all the crops do bate;
Water, water, every where,
We cannot irrigate.

Farmers ought to know what I mean, even if “bate” isn’t in their vocabularies. These are times of drought and flood. Worldwide.

I wrote about the changing growing seasons back in “The Bottom Line Heats up on Climate Change” posted in November 2010. I suspect the Arbor Day map referenced in that post is already out of date. For example, I planted my peas in late March this year. Just a few years back, other gardeners scoffed when I planted them in early April, for northern Colorado gardeners had “always” waited until mid-April, even early May to plant.

Not any more.

Of course, that’s not really the central problem. My peas came up just fine, but all my crops suffered serious damage from a hail storm a couple of weeks back. So far, everything’s bounced back, but plants can only endure so much bad weather, and it sure looks like the natural water supply is swinging wildly.

Here in Colorado, much of the eastern plains are in serious drought while the mountain snowpack is twice normal. That meant those of us lucky enough to have irrigation rights got free irrigation water quite early as water was dumped from reservoirs in an attempt to prepare for the intense runoff as the warming days rapidly melt that mountain snow. Flooding is almost inevitable in Colorado this year.

And it ain’t just Colorado that’s worried by floods and droughts. Unfortunately, bad weather’s becoming the norm. Worldwide.

Don’t believe me? Read this from the June 5 2011, New York Times: “A Warming Planet Struggles to Feed Itself” (I posted a reprint so people can avoid the NYT’s new viewing policy, but feel free to click over to the original if you think there’s been any tinkering with the article.)

Now, back to the garden. We had free runoff water yesterday and the weedin’s gonna be easy.

Cassandrea