Sanskrit Pop Music

These sisters are really good.

Why the US has really gone broke

by Chalmers Johnson, February 2008

These are excerpts from the full article.

There are three broad aspects to the US debt crisis:

First, in the current fiscal year (2008) we are spending insane amounts of money on “defence” projects that bear no relation to the national security of the US. We are also keeping the income tax burdens on the richest segment of the population at strikingly low levels.

Second, we continue to believe that we can compensate for the accelerating erosion of our base and our loss of jobs to foreign countries through massive military expenditures — “military Keynesianism”. By that, I mean the mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.

Third, in our devotion to militarism (despite our limited resources), we are failing to invest in our social infrastructure and other requirements for the long-term health of the US. These are what economists call opportunity costs, things not done because we spent our money on something else. Our public education system has deteriorated alarmingly. We have failed to provide health care to all our citizens and neglected our responsibilities as the world’s number one polluter. Most important, we have lost our competitiveness as a manufacturer for civilian needs, an infinitely more efficient use of scarce resources than arms manufacturing.

Fiscal disaster

It is virtually impossible to overstate the profligacy of what our government spends on the military. The Department of Defense’s planned expenditures for the fiscal year 2008 are larger than all other nations’ military budgets combined.

The US has become the largest single seller of arms and munitions to other nations on Earth. Leaving out President Bush’s two on-going wars, defence spending has doubled since the mid-1990s. The defence budget for fiscal 2008 is the largest since the second world war.

Military Keynesianism

Such expenditures are not only morally obscene, they are fiscally unsustainable. Many neo-conservatives and poorly informed patriotic Americans believe that, even though our defence budget is huge, we can afford it because we are the richest country on Earth. That statement is no longer true.

The world’s richest political entity, according to the CIA’s World Factbook, is the European Union. The EU’s 2006 GDP was estimated to be slightly larger than that of the US. Moreover, China’s 2006 GDP was only slightly smaller than that of the US, and Japan was the world’s fourth richest nation.

Current Account

A more telling comparison that reveals just how much worse we’re doing can be found among the current accounts of various nations. The current account measures the net trade surplus or deficit of a country plus cross-border payments of interest, royalties, dividends, capital gains, foreign aid, and other income. In order for Japan to manufacture anything, it must import all required raw materials.

Even after this incredible expense is met, it still has an $88bn per year trade surplus with the US and enjoys the world’s second highest current account balance (China is number one). The US is number 163 — last on the list, worse than countries such as Australia and the UK that also have large trade deficits. Its 2006 current account deficit was $811.5bn; second worst was Spain at $106.4bn. This is unsustainable.

Debt

It’s not just that our tastes for foreign goods, including imported oil, vastly exceed our ability to pay for them. We are financing them through massive borrowing. On 7 November 2007, the US Treasury announced that the national debt had breached _$9 trillion for the first time. This was just five weeks after Congress raised the “debt ceiling” to $9.815 trillion. If you begin in 1789, at the moment the constitution became the supreme law of the land, the debt accumulated by the federal government did not top $1 trillion until 1981. When George Bush became president in January 2001, it stood at approximately $5.7 trillion. Since then, it has increased by 45%. This huge debt can be largely explained by our defence expenditures.

The top spenders

The world’s top 10 military spenders and the approximate amounts each currently budgets for its military establishment are:

This is military Keynesianism — the determination to maintain a permanent war economy and to treat military output as an ordinary economic product, even though it makes no contribution to either production or consumption.

Australians who live on slumdog millionaires’ row – and love it

MARK and Cathy Delaney don’t need to see the hit movie Slumdog Millionaire. The Brisbane couple experience slum life in India every day.

For 13 years they have lived in the shanty towns of the Indian capital, New Delhi, raising their children and sharing their lives with the locals. Their two sons, Tom, 12, and Oscar, 7, were born in India and have lived most of their lives in slums.

The family home, in a neighbourhood called Janta Mazdoor Colony, is about the size of a typical Australian bedroom. They have no running water, no TV, no fridge and no washing machine. Two mattresses, used to sleep on at night, double as a “lounge” during the day. Meals are eaten sitting on the floor and they share with neighbours a squat toilet in a small bathroom.

But the Delaneys are not complaining. For them, living in a slum has been deeply enriching.

“It baffles us that more people in Australia who say they are sick of their lives don’t do something like we have,” says Cathy Delaney, who holds a masters’ degree in pure mathematics.

“The longer we have stayed here the more we can see the positive effect it has had on us as people. I feel much freer of money and possessions – these things don’t define my life.”

Mark Delaney, a 42-year old lawyer, says more than a decade in Delhi’s squatter settlements has been a “radical detox” from consumer society.

“For the first couple of years I thought, ‘We’ll do this for a while and then we’ll go back to Australia, get a deposit and build a house’, and so on, but I’ve let go of all that now,” he said.

Mark works part-time for a Delhi-based medical organisation but the family’s main focus is on their slum. They are strongly motivated by their Christian faith, believing that life is more about caring for others than comfort and success.

“Our main purpose is simply to experience what life is like here, to live with and learn from the poor and contribute something positive to people’s lives,” says Mark.

The Delaneys moved into their current neighbourhood on the eastern outskirts of Delhi in 2003. About 60,000 people are packed into the illegal settlement which is less than half a square kilometre. It is one of an estimated 1500 squatter settlements scattered across Delhi that house at least 3 million people.

The settlement started 30 years ago as a cluster of makeshift humpies in an open field but as time went by, people gradually upgraded. Flimsy walls were replaced with bricks, slab roofs were added in place of black plastic. Even so, open drains still run along the slum’s maze of narrow alley ways and empty into a putrid canal not far from the Delaneys’ front door.

Properties are bought and sold in the slum and there are even informal titles exchanged to prove ownership. Although these documents would not hold up in court they give those purchasing a slum hut a sense of security. A three-level slum house in the area recently changed hands for 190,000 rupees (about $6000).

The Delaneys pay 1800 rupees ($56) a month in rent, although many small rooms in the slum are half that. Each day the family witnesses some of the vulnerability and powerlessness of the characters portrayed in the film.

Witnessing this has nurtured a strong sense of social justice in the boys.

“I have realised that the most important thing is to help other people,” says Tom.

“But I have also realised that I have limits.”

There is hot debate in the household about how simply they should live.

“Cathy is a bit harder line than me,” says Mark

“Sometimes she says ‘let’s move down a bit’ but I’m usually a bit resistant. Most people think we are pretty stupid already.”

Once Tom asked how much income his neighbours had to live on and insisted their family do the same.

So for the experience, they cut their monthly budget from 10,000 rupees ($310) to 5000 rupees.

“First we ran out of cornflakes and then we ran out of jam. Our diet got much simpler,” says Cathy. “It was a hard experience but a really good one. It gave us so much more respect for the people who live here.”

Mark has been pleasantly surprised by how much their boys have benefited from the experience of living in a poor neighbourhood. Oscar is in year 2 at a local school and Tom has recently switched to home schooling.

When the boys were asked if they wanted to move back to Australia later this year or stay in the slum, they chose to stay.

“I used to think that, with the kids, we would just endure living here for a while and then go,” said Mark.

“But now I’m thinking this is a good thing for them and I want to stay not for my sake, but for the sake of my kids.”

Things that most families take for granted bring the Delaneys great satisfaction.

Such as electricity. The power goes off in the neighbourhood several hours each day.

To help the family cope, Cathy got a small solar panel worth about $100 for her 40th birthday that powers a lamp during the blackouts.

A striking feature of the Delaneys’ lifestyle is their small environmental footprint. They use very little electricity, create only a small amount of waste and rely exclusively on public transport.

The Emperor Has No Clothes

A sculpture by Brancusi entitled “Portrait de Mme. LR”, which is part of the Yves Saint Laurent, Pierre Berge art collection, is presented Saturday Feb. 21, 2009 at the Grand Palais in Paris. The sculpture set sales records Monday night when a collector bought it for US$36,792,835.

Bear Market Comparisons, 1929-2009

Old skydiver’s wisdom: it ain’t how far you fall that kills you – it’s the ground.

The Folly of Neo-Advaita

Advaita Vedanta is the branch of Hinduism that recognises that everything is consciousness. It is an extremely high and abstract philosophy. It describes the experience of the highest state of consciousness – Brahman consciousness.

There are a lot of teachers out there who claim to be teaching Advaita. Most of them are sincere, have had some kind of awakening and want to share their experience. Unfortunately, they do not know their own limitations nor really understand the vastness of Advaita. I call such teachers Neo-Advaitins.

I have met many of these teachers who have had a remarkable transformation in their lives that has freed them from the boundaries of their minds. They experience profound peace and freedom 24/7. Some of them even enjoy a very deep sense of unconditional love, but this is a lot less common.

All the great mystical traditions say that the principle cause of suffering is identification with the mind. Addiction to the mind is like addiction to alcohol. It is as if Neo-Advaitins say to their students, “Your suffering is due to drinking, so don’t drink.” What true but useless advice!!!

Dealing with the mind is easy when you are enlightened. But for the unenlightened the mind is like a Hydra. Neo-Advaitins seem to forget this which makes them bad teachers.

To them, the problem is the mind which they feel should be addressed directly. Thus they either actively discourage preliminary practices like yoga postures, breathing techniques, mantra or they pay them lip service.

What they don’t understand is that going “cold turkey” is unsuitable for the vast majority of people. They do not understand the obstacles that get in the way of self-realisation or how to deal with them. They would serve their students better by embracing the long-established traditions and acknowledging their own limitations.

Gran Turino with Clint Eastwood

HIGHLY RECOMMEND

Walt Kowalski is a widower who holds onto his prejudices despite the changes in his Michigan neighborhood and the world around him. Kowalski is a grumpy, tough-minded, unhappy an old man, who can’t get along with either his kids or his neighbors, a Korean War veteran whose prize possession is a 1972 Gran Torino he keeps in mint condition. When his neighbor Thao, a young Hmong teenager under pressure from his gang member cousin, tries to steal his Gran Torino, Kowalski sets out to reform the youth.

Soros sees no bottom for world financial “collapse”

NEW YORK (Reuters) – Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis.

Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union.

He said the bankruptcy of Lehman Brothers in September marked a turning point in the functioning of the market system.

“We witnessed the collapse of the financial system,” Soros said at a Columbia University dinner. “It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom.”

His comments echoed those made earlier at the same conference by Paul Volcker, a former Federal Reserve chairman who is now a top adviser to President Barack Obama.

Volcker said industrial production around the world was declining even more rapidly than in the United States, which is itself under severe strain.

“I don’t remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world,” Volcker said.

Sean Hannity’s Ridiculous War Against Socialism

By Bob Cesca.

When I watched the video of Sean Hannity’s Tuesday night show, I was half expecting him to leap out of his chair, grab his producer by the lapels and scream something about a goblin on the wing of the airplane — all puffy and bloodshot, hair mussed, tie undone, spittle and sweat flying all around.

There was Sean Hannity on television: breathlessly announcing the red dawn of “socialism you can believe in.” “The New America.” He called the recovery bill, “a liberal hijacking of the American way of life.” Uh-huh. Hijacking. Terrorists rather than goblins on the wing. I get it. And even though we just wrapped up eight years of the largest government expansion in our country’s history, Hannity derided the recovery bill as “the largest government expansion in our country’s history.”

But, unbelievably, that wasn’t the most ludicrous part of the show. The frantic announcement was preceded by a newsreel-style montage featuring video of the various congressional floor debates about the bill, footage of Boehner throwing down the bill and, naturally, President Obama signing the bill. All backed with the frighteningly pulse-pounding choir chants of the apocalyptic anthem “O Fortuna.”

There’s no gray area in what he was suggesting. Socialism is here, said Hannity, and it’s really scary. The choir music said so.

Hannity is once again joined in this crusade by very serious pundits like Rush Limbaugh, Steve Doocy, Alex Castellanos, Joe Scarborough, Laura Ingraham and Glenn Beck who, at one point, claimed that President Obama is both a socialist and a fascist — a feat that calls to mind an old George Carlin joke about how it’s physically impossible to “put your seat-back forward.”

The message is clear. The voices on the far-right are unanimous.

Therefore, I’m calling upon Sean Hannity to use his prime time television program as a platform to rally Republican politicians, cable news hacks and citizens alike to refuse delivery of not just recovery bill spending, but all so-called “socialist” government programs. Send it all back. End American socialism now! All of it.

Refuse to send your kids to socialized public schools and universities; refuse to use socialized roads and highways; refuse to call upon socialized police and fire departments; shut down the socialized air traffic control; refuse to visit socialized national parks; tell grandma that her Social Security and Medicare will have to be sent back to the government; demand the immediate dismantling of our socialized American military. Sarah Palin and her supporters in Alaska should refuse all forms of “redistributed wealth” by sending back their checks from the socialized oil program there.

Continued here.

Decade at Bernie’s

From NY Times. By PAUL KRUGMAN

By now everyone knows the sad tale of Bernard Madoff’s duped investors. They looked at their statements and thought they were rich. But then, one day, they discovered to their horror that their supposed wealth was a figment of someone else’s imagination.

Unfortunately, that’s a pretty good metaphor for what happened to America as a whole in the first decade of the 21st century.

Last week the Federal Reserve released the results of the latest Survey of Consumer Finances, a triennial report on the assets and liabilities of American households. The bottom line is that there has been basically no wealth creation at all since the turn of the millennium: the net worth of the average American household, adjusted for inflation, is lower now than it was in 2001.

At one level this should come as no surprise. For most of the last decade America was a nation of borrowers and spenders, not savers. The personal savings rate dropped from 9 percent in the 1980s to 5 percent in the 1990s, to just 0.6 percent from 2005 to 2007, and household debt grew much faster than personal income. Why should we have expected our net worth to go up?

Yet until very recently Americans believed they were getting richer, because they received statements saying that their houses and stock portfolios were appreciating in value faster than their debts were increasing. And if the belief of many Americans that they could count on capital gains forever sounds naïve, it’s worth remembering just how many influential voices — notably in right-leaning publications like The Wall Street Journal, Forbes and National Review — promoted that belief, and ridiculed those who worried about low savings and high levels of debt.

Then reality struck, and it turned out that the worriers had been right all along. The surge in asset values had been an illusion — but the surge in debt had been all too real.

So now we’re in trouble — deeper trouble, I think, than most people realize even now. And I’m not just talking about the dwindling band of forecasters who still insist that the economy will snap back any day now.

For this is a broad-based mess. Everyone talks about the problems of the banks, which are indeed in even worse shape than the rest of the system. But the banks aren’t the only players with too much debt and too few assets; the same description applies to the private sector as a whole.

And as the great American economist Irving Fisher pointed out in the 1930s, the things people and companies do when they realize they have too much debt tend to be self-defeating when everyone tries to do them at the same time. Attempts to sell assets and pay off debt deepen the plunge in asset prices, further reducing net worth. Attempts to save more translate into a collapse of consumer demand, deepening the economic slump.

Are policy makers ready to do what it takes to break this vicious circle? In principle, yes. Government officials understand the issue: we need to “contain what is a very damaging and potentially deflationary spiral,” says Lawrence Summers, a top Obama economic adviser.

In practice, however, the policies currently on offer don’t look adequate to the challenge. The fiscal stimulus plan, while it will certainly help, probably won’t do more than mitigate the economic side effects of debt deflation. And the much-awaited announcement of the bank rescue plan left everyone confused rather than reassured.

There’s hope that the bank rescue will eventually turn into something stronger. It has been interesting to watch the idea of temporary bank nationalization move from the fringe to mainstream acceptance, with even Republicans like Senator Lindsey Graham conceding that it may be necessary. But even if we eventually do what’s needed on the bank front, that will solve only part of the problem.

If you want to see what it really takes to boot the economy out of a debt trap, look at the large public works program, otherwise known as World War II, that ended the Great Depression. The war didn’t just lead to full employment. It also led to rapidly rising incomes and substantial inflation, all with virtually no borrowing by the private sector. By 1945 the government’s debt had soared, but the ratio of private-sector debt to G.D.P. was only half what it had been in 1940. And this low level of private debt helped set the stage for the great postwar boom.

Since nothing like that is on the table, or seems likely to get on the table any time soon, it will take years for families and firms to work off the debt they ran up so blithely. The odds are that the legacy of our time of illusion — our decade at Bernie’s — will be a long, painful slump.