The climate change and its impact on democracy

A good opinion piece. On one end, the developed countries keep screaming that world keeps getting hotter & hotter, & the weather patterns keep getting drastic, which in turn, is throwing everything else out of whack; people's lives & their livelihoods are in severe danger. On the other hand, these same developed countries, while asking developing countries to not use fossil fuels, are using fossil fuels themselves, & have built an economic system, which is globalized, so it affects everyone around the world, & that economic system measures a country's development based on exploitation of earth's limited resources, esp. fossil fuels.

Companies of these developed countries get in contract with developing countries, where they exploit (dig up) these fossil fuels, without any regard to the climate change, due to them being cheaply available, & then export these products around the world & make a handsome profit. All the while, the developing countries, might be showing a good GDP & a positive Current Account figure, but they are also suffering due to those fossil fuels being used abundantly & adversely affecting the climate around the world. Their public is far susceptible to fighting each other for limited amount of healthy food, clean water, & clean air, & in absence of these items, these developing countries are also bear the responsibility of adverse health conditions of their public, due to unavailability of basic necessities of life.

As the author correctly suggests, the world economic system needs to separate itself from this usage & exploitation of fossil fuels. Countries should be measuring exports & current accounts based on export of solar & wind-generated energy, instead of oil & coal, & this change needs to happen now, because we have already crossed the red line, & in some places, weather patterns have drastically changed. Remember, today, it's them; tomorrow, it'll be us, fighting for healthy & clean food, clean water, & clean air.

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https://www.aljazeera.com/indepth/opinion/2016/04/climate-change-impact-democracy-160403093028956.html

Climate change intensifies conflicts and creates mass migrations. Tens of millions of people are displaced owing to climate change, according to the United Nations. Severe droughts and heatwaves in Syria and the Middle East at large preceded the war, leaving people without jobs, food or hope - and migrating for their lives.
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Climate change is a result of the Bretton Woods institutions and their deliberate policy to globalise the world economy based on extensive exports of natural resources from poor nations. This means petroleum, coal and gas, minerals, metals, forest products and meat.

Since their creation in 1945, the World Bank, the International Monetary Fund, and the World Trade Organization have been based on hyper-exploitation of natural resources that they encouraged and even coerced from poor nations.

Low prices of natural resources have contributed a several fold increase in the wealth gap between the poor and the rich nations since World War II. This was the most successful period of industrialisation the world ever saw. It was based on extensive overconsumption of natural resources, and the direct result is climate change.
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Almost a decade ago, the UN warned that "indigenous people are among the first to face the direct consequences of climate change owning their dependence upon, and close relationship with the environment and its resources." ...

Water is now one of the scarcest resources globally, according to the UN. The story is the same around the entire developing world.

What to do?

We need to replace the Bretton Woods system. They were the first global financial institutions the world ever saw. They fulfilled their mission and now they are dragging the world into an environmental disaster.

New global financial institutions are needed to get things right. We need to limit the exploitation of the planet's atmosphere, its bodies of water and its biodiversity. These are basic needs for human survival: we need clean water, clean air and food without which we cannot survive. All this is possible and must be done.

The limits on resource use can be flexible over time with the creation of equitable and efficient global markets for the global commons.

Limits on the use of water, air and biodiversity is what humanity needs to survive. This parallels the limits on emission of CO2 nation by nation, which was achieved by the Kyoto Protocol in 1997 and its carbon market that became international law in 2005.
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The recent Paris Agreement - which has no emission limits and no teeth - must be improved. The establishment of a new system that respects our planets' vital resources for life will change the global capitalistic system - as they value the global commons, clean air, clean water and biodiversity. These have no economic value today, but it can be and should be done.

We need to decouple economic progress from fossil fuels if we are to survive as a species. The International Energy Agency recently reported that this is already starting. A detailed footprint and the attendant economic policies must redress economic growth to be harmonious with the world's resources and with the survival of humankind.

Graciela Chichilnisky is a professor of economics and of statistics at Columbia University and the Director of the Columbia Consortium for Risk Management.

The losing game of publicly financed sports venues

Another great article on how taxes taken from hard-working public are used for something from which most of the general public will never get any meaningful benefit, & it reduces the money a municipal / provincial / state / federal government has to put it towards a better cause. Governments of all levels in the Western world are crying for more money & are putting in more austerity measures to cut expenditures & increasing taxes.

All the while, these same governments are spending the few money they have on things that are completely useless. These monies could be used for building more affordable housing for homeless & hence, reduce homelessness, or improving infrastructure (water pipelines, public transit, roads, cheaper & sustainable energy), which can also create jobs, which in turn, creates more tax revenue for the government, or simply providing or increasing funding for any number of social causes & NGOs.

But nooooo. The taxes from hard-working public, who itself, is trying to scrimp & save every nickel & dime by buying unorganic, cheap & unhealthy food, for instance, are being used to built expensive stadiums, which ultimately benefit the wealthy owners of sports franchises. They themselves pay much less in taxes but take full benefit of other people's taxes.

But then again, as the article asks that are governments merely stupid to bend to the demands of these wealthy individuals & then answers right away that sports subsidies are a political winner. So who is to blame here? Government or the public. The same public who will give their hard-earned money to a wealthy individual & wealthy players, & gets a paltry return for its own investment. Ironically, while the owners & players are swimming in cash & laughing how they have duped the public, the public is also not only cheering "their team" (who will leave the city as soon as it bleeds the city dry) but also buying expensive merchandise with their own money & still giving their taxes. I blame the public who claims to have open eyes & ears & have common sense, but then take such a stupid step.

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http://www.theglobeandmail.com/report-on-business/the-losing-game-of-publicly-financed-sports-venues/article25563294/

The people of Quebec City & Edmonton are falling prey to one of the oldest con games – the notion that spending public money on pro sports venues is a sound investment.

Facts don’t seem to matter in this game. And your city could be fleeced next.

Stacks of independent research over many decades have shown that building a stadium or luring a new franchise does little for a city’s economy. They typically don’t generate significant new tax dollars, jobs or growth. In most cases, the money would be more wisely spent on badly needed public infrastructure, such as roads, transit or schools.

And yet, governments serially ignore the evidence & continue to shower subsidies on team owners & their media partners.

In Quebec City & Edmonton, governments are currently sinking hundreds of millions of dollars into new arenas. In Quebec City’s case, the aim is to attract an NHL franchise. The rationale in Edmonton is to keep its team, the Oilers, from leaving.

Gobs of taxpayer cash will similarly be needed if Montreal Mayor Denis Coderre gets his wish of bringing professional baseball back to the city. The price tag for buying a franchise & building a new baseball stadium – presumably, a domed one – will top $1-billion. And it won’t happen unless taxpayers pick up a big chunk of the tab.

So why are governments so gullible?

The simple answer is that sport subsidies are a political winner.

They’re sold as investments in the economy. But it’s really about civic pride, the thrill of the game & cheering for the home team.

Montrealers, for example, overwhelmingly support the idea of bringing baseball back to their city more than decade after the Expos left for Washington, D.C., according to a recent Abacus Data poll. Nearly 90% of 500 residents surveyed expressed varying levels of support, ranging from lukewarm to strong. Just 12% are against it. Roughly 8 out of 10 respondents said Major League Baseball would be good for the economy & generate more taxes for the city.

The reality is quite the opposite, according to numerous independent economic studies conducted over several decades in North America.

“The weight of economic evidence … shows that taxpayers spend a lot of money and ultimately don’t get much back,” according to a 2001 study, “Should Cities Pay for Sports Facilities?” for the Federal Reserve Bank of St. Louis. “And when this paltry return is compared with other potential uses of the funds, the investment, almost always, seems unwise.”

The subsidies rarely stop once the venues are up & running. Billions of dollars a year in hidden subsidies flow to existing sport venues, according to a 2012 book by Judith Grant Long, now an associate professor of sports management at the University of Michigan. In her book, Public-Private Partnerships for Major League Sports Facilities, Ms. Grant Long found that taxpayers are subsidizing 78%of the average professional sports facility in Canada & the US.

Earlier this year, US President Barack Obama moved in his budget to close down one financial vehicle that has encouraged subsidies by barring the use of tax-exempt bonds to finance professional sports facilities. In Canada, governments often fund the projects directly from their own coffers, tapping into lower government borrowing costs.

The real story, however, may be that the main beneficiaries of government largesse are team owners.

Quebec City’s $400-million Centre Vidéotron was built with a combination of municipal & provincial government money. It's ... a lure for an eventual NHL franchise sought by Videotron owner Quebecor Inc., controlled by Parti Québécois Leader Pierre Karl Péladeau.

The cost of Edmonton’s $480-million Rogers Place arena, due to open in time for the 2016-17 NHL season, is being split between the city & wealthy team owner Daryl Katz, who had earlier threatened to move the Oilers to Seattle.

Mr. Katz, who also owns the Rexall pharmacy chain, is now poised to cash in with a massive mixed-used residential, office & entertainment development he’s planning for the surrounding area, dubbed “The Ice District.” The $2-billion project will include 1,000 residential units, 1.3 million square feet of office space in skyscrapers that will rank among the tallest buildings in Western Canada, a luxury hotel & a public plaza with an outdoor skating rink, casino, restaurants & stores.

The private development wouldn’t make much sense without the subsidized Rogers Place as its anchor. And businesses elsewhere will lose as customers inevitably migrate to the new entertainment area, making the deal a wash on the city’s tax ledger.

This losing scenario will play out in your city too unless someone stands up and says, enough.

This endless quest for growth will see Greece self-destruct

Although, this article is focused on Greece & its financial & economic woes, I really liked the author's view on how there is an "inherent contradiction of capitalism". I, myself, don't have a problem with capitalism, but the modern capitalism in itself does have a problem of continuously trying to make profits (which are essentially, surpluses -- gross revenue less costs = profits), which are not being re-invested in the economy but are being filtered up to few wealthiest individuals. Profit then stops there & more profits have to made for the other 99% to survive. Of course, since, the other 99% are making minimum wage or barely scraping by in life, the economy will eventually grind to a halt. Paragraphs 6 & 7, in the opinion piece below, very succinctly summarize this.

Think of it like a machine (for example, your car engine). If you keep driving your car for longer & longer distances & keep trying to extract as many kilometers (or miles) you can extract out of it before you need to service your car, or try to slowly reduce your frequency of regular car maintenance, you will eventually destroy your car engine & its related machinery, because your car's machinery is working harder for fewer servicing. It's the same case for human labour.

Anyway, so then the government is faced with only 2 choices (kind of being stuck between rock & a hard place) that it either try to juice up the "dead" economy through stimulus (like US did) or try to save billions through harsh austerity programs like Southern European nations did or are still doing. These two solutions are interlinked & become sort of a catch-22 problem. Government's primary source of revenue is taxes, but it can't really tax the public which in itself is not earning enough to survive. So tax revenue falls off the cliff. If tax revenue is insufficient for the government to institute stimulus programs, then it's only option is to bring more money from outside; either print more or borrow more. Either of these options will reduce the value of the national currency (assuming it's not part of a regional monetary bloc), & the price of everything essential in the marketplace for the public will rise, which will cause the general public to save more, instead of spend, which is required to revive the dead economy. Hence, we are back at the start of the problem, where the economy is still dead, & neither austerity nor stimulus is working to their full potential.

However, while the government is either cutting social spending or reducing the value of the currency, few individuals in its country are still becoming wealthier by the minute. That's why, the recession didn't hit the hardest all those wealthy 1-percenters. Heck, in their own little world, they didn't even feel it. Their wealth actually grew multiple folds during the recent recession.

Problem is that this inherent problem of modern capitalism & the social inequality it causes is only going to grow until there's chaos & anarchy on the national & global levels. There's no way to resolve this problem since the governments are now controlled by those same wealthy individuals who love this "inherent contradiction of capitalism," since it makes them wealthier & wealthier, & frankly, why would they care if a few millions of the general public suffers because of inequality. Prepare yourself for much more pain & suffering if you are one of those 99%.
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http://www.theguardian.com/sustainable-business/2015/jul/07/this-endless-quest-for-growth-will-see-greece-self-destruct

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For many following the crisis for ... months, it has become clear that it is not just about Greek debt. Beneath the cultural tensions & ugly stereotypes, an ideological war is taking place. This battle is happening because the current economic system has only 2 answers to debt crises, recessions & slow economic growth: stimulus & austerity.

Stimulus is about the government pumping money into the economy to encourage consumer spending, which will theoretically lead to economic growth. In recent times, stimulus efforts have taken the form of the government spending money on infrastructure & other socially beneficial projects (think the New Deal) & quantitative easing. Austerity is a set of measures that aim to cut government spending & shrink the public sector to make the economy less dependent on it, which in theory should make room for & encourage a burgeoning free market (ie neo-liberalism).

The argument against government-led stimulus asks how the economy can grow if the government has to keep expanding its debt &/or money supply in order to start new projects & stimulate the economy. Surely the stimulation it provides will never compensate for growing levels of debt? Anti-austerity advocates, on the other hand, ask how the economy can grow if people make less money & taxes are higher – people will save, not spend, & economic growth is based on consumer spending.

The issue of austerity versus stimulus is often framed as the entire debate – if you don’t support one, you must support the other, because there are no alternatives. This is the same binary debate that has been going on for more than 100 years between the state versus the market. Yet, these dichotomies distract people from thinking about what’s really important – the goal of these policies, which is to grow the economy.

No analysis I’ve read thus far has questioned the damaging role that the endless quest for economic growth plays. Neither austerity nor government stimulus will ever be able to address the debt crises & recessions of the twenty-first century because what we’re dealing with here is an inherent contradiction of capitalism.

This contradiction comes from the surplus of the system (profit) being taken out of the real economy (the economy of physical goods and services) and put into the financial sector to generate more wealth for people who are already wealthy. This requires the economy to continually grow to compensate for the extraction of profit, which is essentially the extraction of the economy’s surplus.

However, this extraction of profit is the same mechanism at the root of soaring levels of inequality. A recent Oxfam report estimates that, by 2016, the richest 1% of the world’s population will own more than the other 99%. If the average person is making relatively less every year, or struggling just to maintain the same financial state, they can’t afford to buy ever more products & services, so the economy can’t grow as it did when we had more financial equality. Thus capitalism has always carried the seed of its own demise.

We are seeing this self-destruction in Greece. The ... Syriza government wants to go back to the negotiating table & create a new bailout agreement that will cut the debt to a more manageable size & reform the public sector in ways that won’t affect the most vulnerable. This would still be austerity, albeit a much milder version than that of the past 5 years. ...

If an agreement can’t be reached, Greece might well go back to the drachma. However, the government has no clear plan for this & an unplanned exit from the euro would be painful, with the poorest hit the hardest.

In all of these scenarios, the government’s goal would still be to re-start economic growth, even at the cost of creating more inequality. None of these options gets to the roots of capitalism’s inherent contradiction. There’s no way to grow ourselves out of this crisis; not for Greece, not for the rest of the world. What we are witnessing is the beginning of the collapse of capitalism.

So what is a sustainable path forward for Greece? If the Greek government could see that it won’t be able to re-start growth, and that GDP growth is a means to an end, not an end in itself, there are steps it could take to start paving a new path to prosperity for its people.

In addition to the basics – restructuring the Greek debt, deep reforms in the public sector to make it more transparent & accountable, & the strengthening of the solidarity economy – I suggest the following:
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2.The government should nationalise the banks & encourage people to start credit unions. This will re-align the banking sector with the needs of citizens & make the banks more resilient. Credit unions would empower people to take financial matters into their own hands.

3.Greece should keep for-profit interests from buying up its common wealth. This could be done via land trusts, not-for-profits & amending the constitution to make it unconstitutional for the government to sell off the commons.

4.The Greek government should start using a wellbeing or happiness index to measure success, as Bhutan does. In this age of inequality, working class people & the unemployed can easily slip through the cracks of GDP growth.

5.Businesses & the government should shorten the working week & encourage job-sharing, so more people can have part-time employment. This would counter the current problem of some having no work while others work 50 hours a week.

6.Finally, the government should create legislation & encourage not-for-profit enterprise in every sector to prevent the extraction of profits from the real economy & encourage social entrepreneurs & innovators to start up their own not-for-profits. These enterprises would help alleviate the humanitarian crisis in Greece, create a more stable economy & keep the financial surplus in the real economy. By building an economy around social purpose, Greece could usher in the post-capitalist era, rather than fall victim to the unavoidable collapse of capitalism we are witnessing.


Jennifer Hinton is the co-author of How on Earth: Flourishing in a Not-for-Profit World by 2050, which will be published in October 2015.

"Global Perspectives 2015" by Paresh Nath

"Global Perspectives 2015" - Paresh Nath, India

In Mumbai, the wealthy elite's willingness to show off has reached new extremes

A great opinion piece. Although, its focus is Mumbai & the rising social inequality there, this rising social inequality is visible in almost every metropolitan city, from Los Angeles to New York to Rio de Janeiro to Lagos to Johannesburg to Dubai to London to Moscow to Beijing to Kuala Lumpur to Sydney.

Politicians & governments are only interested in how much money they can stuff in their "pockets" (i.e. bank accounts) from companies, industries, & lobbyists. They will sprinkle some money on a few projects in the development, & even then those projects need to be highly visible for elections & public.

Western countries have already gone through this large & increasing divide between the 99% & 1% of the country (remember Occupy Movements around the world about 5 years ago?) but talks of recession ending & new economic growths have only helped fuel the divide now. Western governments didn't bring any new legislation to resolve this divide. All of the countries, both developed & fast developing ones, are turning back to the medieval times.

According to a report from New York's Coalition for the Homeless, 60,000 people are sleeping in city shelters every night – almost double the amount since 2004. Let that sink in for a minute. Homeless people in NYC have DOUBLED in the past 10 years ... & there's no end to it.

Recession didn't even dent the increasing wealth of the business & political elites. While their wealth increased several folds between 2007 & 2014, the middle class is not only getting wiped out from society, the poor are barely hanging on to life.

This is all happening, & will definitely keep happening, in the so-called seemingly equal, fair, developed countries of the West. So what & how can one expect something better from developing countries like China, India, Brazil, South Africa, Turkey, Russia, Vietnam, Pakistan etc.?

BUT, what rich are not seeing, by getting blinded by their fast rising tower of wealth, that you can only push the poor down to a limit. The numbers of poor are fast increasing in the urban cities all over the world. Those human beings will try to fight back for their survival when the survival of them & their families is severely threatened.

This will become the scene from the French Revolution, except it won't be happening only France, but all over the world. Are governments & politicians ready for this Revolution? Can the rich business & political elite handle the onslaught of poor on them?
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http://www.theguardian.com/cities/2014/nov/28/mumbai-wealthy-elite-extremes-bollywood-parties-super-rich

In Christmas 2007, I found a nightclub in London selling the most expensive cocktail in the world. I was reporting a piece on the gulf between the super-rich & the rest of society ­– and here was a liquid metaphor.

Hand the barman at Movida £35,000 & he would mix up a shot of Louis XII cognac, some Cristal Rose, a few flakes of edible gold leaf & at the bottom of the glass a diamond ring. During both mixing & drinking two security guards would keep watch.

Running around Mumbai for the past few days has sometimes felt like travelling back in time to that credit-crunch Christmas. Not because I think a banking crash is just around the corner, but because of the size of that gulf between those right at the top of this city & everyone else.

On Thursday afternoon, an events organiser for Mumbai’s wealthiest told me stories of children’s birthday parties in which a Bollywood celebrity was hired at huge expense to sing & dance ­– for a group of eight-year-olds. Of crores of rupees (hundreds of thousands of pounds) being spent on wedding dancers alone. She herself would rank among the city’s elite. For her two-year-old’s birthday, a swimming trip & family lunch was planned & yet friends would ask, “Aren’t you doing anything to celebrate?”

As India’s commercial capital, Mumbai has long been home to some of the richest people on the subcontinent. But in all my travels back & forth to India, I’ve noticed across big cities over the past decade or so a much greater willingness by the wealthy to show off. In Mumbai, that has reached extremes. On our first day here, the cabbie showed us Nariman Point, the Hanging Gardens, the Taj & the Gateway of India – then drove us over to Antilia, reportedly the most expensive home in the world. Owned by Mukesh Ambani, it is worth an estimated $1bn, is 27-storeys high & has 3 helipads.

However extreme, Antilia is hardly anomalous. A half hour away from where I am writing this, a new residential estate is up for sale, offering seaview flats alongside access to private jets & yachts. The black & gold billboards read: For Kings. For Queens. For Royalty.

The bit of this that really reminds me of London before The Fall is the way those enjoying this lifestyle assume that everyone else is getting a bit of it, too. I am thinking here of the property developer who is now in New York for 5 days’ shopping ­– his second trip there in 2 months. Just before he left, he told me that he regularly took 10 holidays a year – but then went on to talk about how his cook had also been to South Africa. Except, it turned out, his servant had gone there for work.

In the 90s, as the second great wave of globalisation got under way, policymakers thought they knew who the winners & losers would be. On the debit side were the blue-collar & manufacturing-workers of the west, whose jobs were going to move east. But that was all worth it, we were assured, as long as people in developing countries got richer. But what a visit to Mumbai shows you is the vast inequality in how those riches have been spread around. You see it in the physical infrastructure: all those new flyovers sprouting up around the city to enable the chauffeur driven classes to get about more easily, even while the commuter trains are still bursting; the crowded, chaotic public hospitals that get by while gleaming new private hospitals open up.

Unlike in Britain or America, the middle classes in urban India are still far better off than they were 10-15 years ago. But in Mumbai, you see how they also struggle to pay for their English-medium schools & non-government doctors. I am thinking here of a family I met last night who were adamant that that they were middle class & yet were also open about how much they were struggling to afford even the basics for their children.

At the end of our chat, the party planner began angsting out loud about what kind of society Mumbai was becoming. “At the top, we’re creating a generation of brats. If they have iPads & birthday extravaganzas now, what will they demand when they’re teens? And at the bottom, can you imagine how much resentment they must be carrying?”

"US Economic Growth" by Jimmy Margulies

"US Economic Growth" - Jimmy Margulies, NY, US