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Rachel's Democracy & Health News #882

THE WORLD IS NEW, PART 2

[Rachel's introduction: We are all struggling to understand a world that has changed almost completely in the last 50 years. What have been the most important changes?]

By Peter Montague

Here we continue describing the new world that has evolved during the past 50 years.

In the past 50 years, corporations have grown almost unimaginably influential. Originally invented as a way for entrepreneurs to raise capital from strangers, publicly-traded corporations have proven to be extraordinarily successful and they have grown steadily, year by year. In many cases, growing bigger has become their main purpose.

In the past 50 years -- between 1955 and 2004 -- large corporations came to thoroughly dominate the U.S. economy. In 1955, sales of the Fortune 500 corporations accounted for 1/3 of gross domestic product (GDP). By 2004, sales of the Fortune 500 amounted to 2/3rds of GDP, a major consolidation of wealth and power. [1, pg. 22]

Peter Barnes -- co-founder of the Working Assets Long Distance phone company -- describes some additional changes that have occurred during the past 50 years. In his must-read new book, Capitalism 3.0; A Guide to Reclaiming the Commons, Barnes points out that, 50 years ago capitalism entered a new phase. Up to that time, people had wanted more goods than the economy could supply. After 1950, there was essentially no limit to what corporations could produce. Their new problem was finding buyers.

Others have remarked on this shift as well. In 1967 in The New Industrial State, John Kenneth Galbraith observed that large corporations require stability and so they must control both supply and demand. To control demand, they manufacture wants. In 1950, everyone's basic physical needs could be met, so to promote growth, corporations had to learn to manufacture desire. Physical wants are limited but, properly stimulated, desires can become infinite.

You might ask, given that the economy can now satisfy everyone's physical needs, providing the basics of a good life, why do we need to manufacture desire to stimulate growth? Because growth is what provides return on investment.

The amount of money available for profitable investment expands exponentially year after year. Therefore, it is essential to keep demand (desire) growing apace -- to create new opportunities for investors to earn a decent rate of return year after year. The U.S. spent $263 billion on advertising in 2004, largely to stimulate desire. Despite this, production continues to outpace effective demand.

In his book, The Return of Depression Economics (1999), Princeton economist Paul Krugman pointed out that inadequate demand (the flip side of overproduction) is now a worldwide problem. He wrote, "What does it mean to say that depression economics has returned? Essentially it means that for the first time in two generations [50 years], failures on the demand side of the economy -- insufficient private spending to make use of available productive capacity -- have become the clear and present limitation on prosperity for a large part of the world." (pg. 155) Overcapacity is chronic.

In the U.S., there have been two major responses to declining opportunities for a decent return on investment. One solution has been to invent new ways of manipulating money. As Peter Barnes points out, today "the world is awash with capital, most of it devoted to speculation."

If we take Barne's word "speculation" to mean, loosely, the manipulation of money itself for profit, then speculators have indeed grown more important in the U.S. economy in the last 50 years. Corporate profits of the financial industry in the U.S. in 1959 were 15% of total corporate profits; by 2004 the financial industry's profits represented 36% of total U.S. corporate profits. In round numbers, manipulating money now accounts for 40% of all corporate profits.

The second major response to limited investment opportunities has been "globalization" -- creation of a new set of rules that essentially erase national borders, so that materials and capital are now free to flow to wherever costs are lowest. Now if investors see an opportunity to gain a decent return by, say, manufacturing toothpicks by cutting down Indonesian rain forests, they are free to move their money there instantaneously to take advantage of the opportunity. Within the U.S., this has worked out well for investors but it has not been quite so beneficial for the working class or the middle class. As an editorial writer for the New York Times pointed out in 2002, "Globalization has been good for the United States, but even in this country, the gains go disproportionately to the wealthy and to big business." Globalization has been one of the factors that has consolidated wealth in fewer and fewer hands in recent years.[2]

Globalization also helps explain another important feature of the new world -- the expanding U.S. military. As New York Times columnist Thomas Friedman pointed out in 1998 in an article about the global spread of electronic inventions, "The hidden hand of the global market would never work without the hidden fist. And the hidden fist that keeps the world safe for Silicon Valley's technologies to flourish is called the United States Army, Air Force, Navy and Marine Corps..." The current U.S. military budget of $450 billion -- equal to the military budgets of all other nations combined -- is another aspect of the need to keep growth going, to create opportunities for investors.

As a result of these trends in the past 50 years, 5% of the U.S. population now owns more private wealth than the other 95%.

Naturally, this 5% has gained outsized power to go with its outsized wealth. No one begrudges the fortunate their fortunes (almost all of us think it is better to be rich than not rich), but democracy assumes that everyone has approximately equal standing. Our system of governance is legitimized by the premise, one person, one vote, not one dollar, one vote. Since money talks -- or, in the case of the top 5%, money screams -- we can no longer say we have even the pretense of a democracy. Instead, we have a plutocracy -- rule by wealth -- and one wholly devoted to economic growth.

As economist Herman Daly observed not long ago, we now have a "religious commitment to growth as the central organizing principle of society. Even as growth becomes uneconomic we think we must continue with it because it is the central myth, the social glue that holds our society together."

So even though economic growth is shredding the biosphere, causing more harm than good (which is what Daly means when he says growth has become "uneconomic"), it is heresy to try to imagine a different way of being on the planet.

This is a uniquely modern puzzle -- we have a deep religious commitment to an idea that was once true, but is now false, and which is destroying the future.

[To be continued but not next week.]

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[1] Peter Barnes, Capitalism 3.0; A Guide to Reclaiming the Commons (San Francisco: Berrett-Koehler, 2006) pg. 22.

[2] There is nothing wrong with international trade, and it can bring substantial benefits. As the New York Times points out, "China, Chile and other nations show that under the right conditions, globalization can lift the poor out of misery. Hundreds of millions of poor people will never be helped by globalization, but hundreds of millions more could be benefiting now, if the rules had not been rigged to help the rich and follow abstract orthodoxies. Globalization can begin to work for the vast majority of the world's population only if it ceases to be viewed as an end in itself, and instead is treated as a tool in service of development: a way to provide food, health, housing and education to the wretched of the earth."

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From: Rachel's Precaution Reporter #65
November 22, 2006


SAN FRANCISCO'S RIGHT TO PROTECT ITS CHILDREN IS CHALLENGED AGAIN

[Rachel's introduction: In case you missed this hugely important story in Rachel's Precaution Reporter last week: Chemical corporations have sued San Francisco again -- this time in federal court -- claiming the city had no right to pass a law protecting children from poisonous chemicals in toys. This is the first major legal challenge to the precautionary approach.]

By Peter Montague

The American Chemistry Council (ACC) -- formerly known as the Chemical Manufacturers Association -- on November 16 filed a second lawsuit against the City of San Francisco, aiming to prevent the City from protecting children from toxic chemicals in toys.

San Francisco passed a law in June prohibiting the sale of toys containing six toxic chemicals called phthalates (tha-lates) and another toxicant called bisphenol-A. In October, the ACC and other corporations sued the city in California state court, claiming that state law preempted the city's right to protect children by controlling toxics in toys.

The second lawsuit was filed in federal court and it claims that federal law preempts the city's right to protect its children from toxic chemicals in toys. Specifically, the ACC's complaint says the Federal Hazardous Substances Act, plus decisions by the Consumer Product Safety Commission, make it illegal for municipalities to pass laws to regulate toxic materials in toys.

This is a definite trend -- corporations trying to prevent local governments from passing laws to protect citizens against hazards and dangers created by corporations. In many instances the federal Congress is passing laws that prevent local governments from passing laws to curb corporate abuses. It's called "federal preemption."

We can draw three conclusions from this second lawsuit:

1. This is a major attack on the precautionary principle. The American Chemistry Council has hired a fancy law firm to pursue this case. Clearly the ACC is putting a lot of money behind its effort to stop San Francisco from taking a precautionary approach to protecting children.

2. This lawsuit is a sign of just how powerful and bold corporations have become that they would sue San Francisco, asserting that corporations have the right to expose children to known poisons and there's nothing local governments or individual citizens can do about it. They are thumbing their noses at the Moms of the world and at everyone else who may try to protect children from chemical trespass.

3. There is one benefit from a lawsuit like this: It allows us to see clearly that the system we call "regulation" was set up not to protect citizens from harm, but to protect corporations from citizens who try to curb corporate power. The regulatory system doesn't regulate polluters -- it regulates citizens, by strictly limiting how they are allowed to respond to corporate abuse.

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From: Associated Press
November 21, 2006

GLOBAL WARMING SAID KILLING SOME SPECIES

[Rachel's introduction: A review of 866 scientific studies finds evidence that global warming is speeding up the extinction of species.]

By Seth Borenstein

Washington -- Animal and plant species have begun dying off or changing sooner than predicted because of global warming, a review of hundreds of research studies contends.

These fast-moving adaptations come as a surprise even to biologists and ecologists because they are occurring so rapidly.

At least 70 species of frogs, mostly mountain-dwellers that had nowhere to go to escape the creeping heat, have gone extinct because of climate change, the analysis says. It also reports that between 100 and 200 other cold-dependent animal species, such as penguins and polar bears are in deep trouble.

"We are finally seeing species going extinct," said University of Texas biologist Camille Parmesan, author of the study. "Now we've got the evidence. It's here. It's real. This is not just biologists' intuition. It's what's happening."

Her review of 866 scientific studies is summed up in the journal Annual Review of Ecology, Evolution and Systematics.

Parmesan reports seeing trends of animal populations moving northward if they can, of species adapting slightly because of climate change, of plants blooming earlier, and of an increase in pests and parasites.

Parmesan and others have been predicting such changes for years, but even she was surprised to find evidence that it's already happening; she figured it would be another decade away.

Just five years ago biologists, though not complacent, figured the harmful biological effects of global warming were much farther down the road, said Douglas Futuyma, professor of ecology and evolution at the State University of New York in Stony Brook.

"I feel as though we are staring crisis in the face," Futuyma said. "It's not just down the road somewhere. It is just hurtling toward us. Anyone who is 10 years old right now is going to be facing a very different and frightening world by the time that they are 50 or 60."

While over the past several years studies have shown problems with certain species, animal populations or geographic areas, Parmesan's is the first comprehensive analysis showing the big picture of global- warming induced changes, said Chris Thomas, a professor of conservation biology at the University of York in England.

While it's impossible to prove conclusively that the changes are the result of global warming, the evidence is so strong and other supportable explanations are lacking, Thomas said, so it is "statistically virtually impossible that these are just chance observations."

The most noticeable changes in plants and animals have to do with earlier springs, Parmesan said. The best example can be seen in earlier cherry blossoms and grape harvests and in 65 British bird species that in general are laying their first eggs nearly nine days earlier than 35 years ago.

Parmesan said she worries most about the cold-adapted species, such as emperor penguins that have dropped from 300 breeding pairs to just nine in the western Antarctic Peninsula, or polar bears, which are dropping in numbers and weight in the Arctic.

The cold-dependent species on mountaintops have nowhere to go, which is why two-thirds of a certain grouping of frog species have already gone extinct, Parmesan said.

Populations of animals that adapt better to warmth or can move and live farther north are adapting better than other populations in the same species, Parmesan said.

"We are seeing a lot of evolution now," Parmesan said. However, no new gene mutations have shown themselves, not surprising because that could take millions of years, she said.

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From: The Oregonian
November 16, 2006

SAVE THE ENVIRONMENT AND MAKE JOBS FOR THE POOR

[Rachel's introduction: Van Jones is redefining environmentalism. He sees environmental solutions as job-creating opportunities for the poor]

By Darren Freeman

When Van Jones thinks about building an environmentally sustainable economy, he pictures lots of new jobs -- workers installing renewable- energy infrastructure, growing organic food or running mass transit systems.

And Jones, who has spent the past 10 years working on criminal justice reform, wants at-risk urban youths to get those jobs. He's calling on environmentalists and human rights activists to join in a national drive to save the environment and improve the lives of the working poor.

Jones, 38, is working with politicians, business leaders, educators and community activists to develop such cooperation in Oakland, Calif., where he founded the Ella Baker Center for Human Rights in 1996 to tackle criminal justice issues.

He spoke recently in Portland during a visit organized by the Oregon Natural Step Network, which promotes environmentally sustainable business practices. The following was edited for brevity and clarity.

Q What is the message you bring to Portland?

A We need to expand and transform our definition of environmentalism. ... Rather than talking about environmental solutions as business opportunities for the rich or consumer choices for the affluent, we should be talking about them as job-creating, wealth-creating, health- enhancing opportunities for poor people.

For example, one solution for global warming is renewable energy. Not only could it save polar bears in the Arctic Circle, it could create jobs for urban youths who are putting up solar panels. It could also offer wealth-building opportunities for middle-class, working-class people who could invest in those companies.

Q Why aren't environmentalists and social justice activists already working together?

A We live in a society that has a lot of social walls. When things are divided like that, it is harder to combine the wisdom.

What I'm trying to do is to point out that we might have different issues or problems on the surface, but the solution to all our problems is one thing: It is a green economy with shared prosperity as a key value....

The only reason we haven't done it is we don't know each other, we speak different languages, have different slang and different jargon, and we're afraid of each other.

Q How would such a partnership work?

A In Oakland, we are building... a green enterprise zone to bring eco- friendly businesses and industries to Oakland, to urban America.

We are working with community colleges and labor unions and prison re- entry organizations to create a green job corps, where urban youths and workers will be taught to install solar panels, do organic gardening or retrofit buildings so they don't leak energy.

With our green enterprise zone and green job corps, we will align... business and economic development with work-force training and development.

Q How does this project connect with the social justice issues you have worked on in Oakland

The safest communities are not the communities with the most police and prisons. The safest communities have the best education and jobs for young people.

The same kids that we are throwing in the garbage can of failed schools and prisons could be the kids who are putting up the solar panels, inventing the new clean-burning diesel fuel or selling organic produce. They are so creative and energetic, but nobody has given them a grand call or a high mission.

Frankly, nobody has given the country a grand call or high mission. There is a hole in the heart and soul of America right now. People want to be brought together and do something great and noble again. And building a green economy with shared prosperity as a key value is something everybody in the country could feel good about.

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From: Los Angeles Times
November 22, 2006

MORE CITIES REJECT COAL-FIRED POWER

[Rachel's introduction: In a bold move, five major cities in southern California have refused to renew electric power contracts with a coal- fired plant. They are betting alternative sources of power will be available when their present contract runs out in 2027.]

By Janet Wilson

In an abrupt about-face, Burbank and several other Southern California cities are joining with the Los Angeles Department of Water and Power in abandoning plans to renew long-term contracts for coal-fired electricity from a Utah power plant.

In forsaking their largest power source, the cities will be gambling on the availability of adequate alternative energy from cleaner sources by 2027, after their current contracts with the Utah facility expire.

"It's a huge change," Burbank Mayor Todd Campbell cheerfully admitted. Campbell and the City Council had voted unanimously last month to extend their contract with the Intermountain Power Agency in Delta, Utah, to 2044, seeking to beat the clock on a landmark greenhouse-gas state law that takes effect Jan. 1 prohibiting such contract renewals.

The change could put Southern California in the forefront nationally of the commercial use of alternative energy in coming years, including wind and solar power. It could also put the region ahead in the capture and burial of carbon dioxide, the greenhouse gas believed to be most responsible for global warming.

Six of the Southland's largest cities depend on Intermountain for half to two-thirds of their electricity. Researching and building infrastructure to replace it will be a costly, risky business, utility managers warned.

"It's a very challenging undertaking. All of these technologies are still in their infancy," said Phyllis Currie, general manager of Pasadena Water & Power. Pasadena is one of the cities joining in the decision. "We're still looking at the fact that right now, the Intermountain plant is 65% of our energy."

DWP President David Nahai, who already had said the city would not renew its contract with Intermountain, said, "We're very pleased that our fellow cities have decided not to renew their contracts either. Many of them had initially decided to do so, and then I think really showed a lot of courage and grace in reconsidering their decision."

Pasadena, Burbank, Glendale, Riverside and Anaheim representatives all told Intermountain's General Manager Reed Searle on Monday at the utility's quarterly meeting that they would not be renewing their contracts for cheap, coal-fired power.

"That is correct. I think everybody has decided basically not to renew at this time," Searle said Tuesday, noting with exasperation that the agency had drawn up the renewal contracts "at the request of the Californians" and that he had gone to the Utah Legislature to obtain special permission to do so.

The cities acted in the face of mounting pressure from local constituents, environmentalists and politicians, including Sen. Dianne Feinstein and state Sen. Don Perata (D-Oakland), author of the greenhouse-gas legislation, which includes a ban on power from sources that generate more such gases than in-state natural gas plants. Feinstein wrote a letter to an umbrella group for the cities last week saying she was "shocked and dismayed by Burbank's decision" after the council had voted to renew its contract with Intermountain.

Staff members of several utilities met in Sacramento on Monday with Perata's and other legislators' staff to explain what was at stake for the cities and ratepayers.

"We basically wanted to explain how important Intermountain Power is to California cities.... It's a serious issue when you tell us to walk away from it," said Currie, who like others noted that the cities had been paying billions in long-term costs for construction of the coal plants but would lose the right to much cheaper power after those costs were paid off in 2027 and their contracts expired.

Traditional coal-fired plants are the cheapest, most reliable source of power but emit tons of carbon dioxide skyward along with other harmful air pollutants. Annual CO2 emissions at the Intermountain plants total more than 16 million tons, according to an analysis by the conservation group Environmental Defense.

V. John White of the Center for Energy Efficiency and Renewable Technology, which is part of an environmental consortium trying to replace coal-fired power across the West, said Intermountain is "not used to the light of day. They're used to having a cocktail with a city official and renewing a deal" with no public discussion. He said the change of heart by Southern California officials occurred because "there was a public outcry, and it forced yes or no votes on global warming."

He said the next challenge would be to thoughtfully consider all available alternatives, from wind farms in the Tehachapi Mountains north of Los Angeles to desert solar power.

Intermountain's Searle said the Utah agency worked for three years on the renewals and now was looking at ways to modernize its plants to bring them into compliance with California's greenhouse-gas legislation, including burning biomass -- which includes fast-growing trees and plants as well as waste products -- instead of coal, or possible burial of carbon dioxide. He warned that such measures "will be costly" to consumers.

Biomass conversion would cost about $300 million, he said, and carbon capture and sequestration technologies would cost billions. But Searle said the Utah plants were uniquely situated over a large salt dome that could be ideal as an underground storage site for the gas. The agency also extended its renewal offer for any sort of power from the plants until 2023. The previous deadline was next May. California utility officials hope that state legislators will allow them to renew the contracts if greenhouse gases are reduced.

"We can't just blanket 100 miles of the desert with solar panels. And besides, solar doesn't work at night," said David Wright, general manager of Riverside Public Utilities. He and Burbank officials said they were most interested in integrated gasification combined cycle power, which creates cleaner gas and steam power from coal and could allow CO2 to be separated and buried.

The DWP's Nahai said the fact that the current contracts don't expire until 2027 leaves ample time.

"None of us are going to impose an economic upheaval on society, so of course the issue of cost is tremendously important," Nahai said. "But the question of benefits is also important... and 21 years is a long time."

But Wright said, "Everybody keeps saying we can replace that power in 20 years. But we don't just replace that power with a decision in 20 years. We have to decide in the next five years where we're going to get that power, and start constructing it."

janet.wilson@latimes.com

Copyright 2006 Los Angeles Times

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Rachel's Democracy & Health News (formerly Rachel's Environment & Health News) highlights the connections between issues that are often considered separately or not at all.

The natural world is deteriorating and human health is declining because those who make the important decisions aren't the ones who bear the brunt. Our purpose is to connect the dots between human health, the destruction of nature, the decline of community, the rise of economic insecurity and inequalities, growing stress among workers and families, and the crippling legacies of patriarchy, intolerance, and racial injustice that allow us to be divided and therefore ruled by the few.

In a democracy, there are no more fundamental questions than, "Who gets to decide?" And, "How DO the few control the many, and what might be done about it?"

Rachel's Democracy and Health News is published as often as necessary to provide readers with up-to-date coverage of the subject.

Editors:
Peter Montague - peter@rachel.org
Tim Montague - tim@rachel.org

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Environmental Research Foundation
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