One Good Cut

When you first learn about how our money is controlled, created and loaned you might very well not believe it. In fact, it is both so simple and so outrageous that often people think it is a lie. The reality is that our privately owned, corporate banking institutions have the power to create money out of thin air, then charge you for it. There is no real effective oversight either. Another lesser known fact is that the Federal Reserve, which set interest rates for banks and oversees banking in general, is not a entirely government agency. It is mostly controlled by the very private, corporate banks that it oversees.

All of this information just shows how distorted our banking systems and how reprehensible the actions of these banks are that led to a massive taxpayer bailout. They still show record profits and give out million dollar bonuses. These are just people who manage our money, not doctors or nurses or teachers – people who give real benefit to our society. Instead, because of the economic collapse caused by our bankers we have to lay off doctors, nursers, police officers and teachers while banks pull in still greater profits. Do they really provide such a useful service to our society that they should make millions while our basic social services are cut?

The creation of our money should be entirely in the hands of our publicly represented government, where we can see and control it! Banks provide a very basic service to our society, but when it comes down to it they shouldn’t run the world or have the power to ruin it.

One Good Cut is a great little film put together by Positive Money that outlines this issue and how we can repair it. Check it out:

Check out more on the One Good Cut website and take action!

Enough Is Enough

Enough Is Enough
Ideas for a Sustainable Economy

This year we saw the first Steady State Economy Conference held in Leeds, UK and hosted by the Center for the Advancement of the Steady State Economy (CASSE) and Economic Justice for All. While the reports from conference goers afterward were good, for those of us that couldn’t attend there was hope for something tangible to come out of it. Luckily for us, that happened to be one of the goals of the event.

Today is the release of a seminal paper, Enough Is Enough: Ideas for a Sustainable Economy in a World of Finite Resources, a 130 page report that not only addresses why we need an alternative to growth, but outlines policies to achieve such an alternative: a steady state economy.

Part One of the report covers the problems with growth, and the concept of enough. It open’s with a great quote from Tim Jackson, author of Prosperity Without Growth, and keynote speaker at the conference:

“Here is a point in time where our institutions are wrong. Our economics is not fit for purpose. The outcomes of this economic system are perverse. But this is not an anthem of despair. It’s not a place where we should give up hope. It’s not an impossibility theorem. The impossibility lives in believing we have a set of principles that works for us. Once we let go of that assumption anything is possible.”

Part Two of the report contains the real guts of the report, outlining the most complete collection of policy ideas, tools and reforms in one place. This section has the most weight to it and will make the biggest splash, but Part Three helps to combine these policies with the reality present in Part One: how to get the economy functioning and transitioning to a steady state economy.

The problems are real, the studies numerous, and the evidence richly points to the need for an alternative to growth. A steady state economy represents the best of many solutions: providing a sustainable scale to the economy, as well as providing more prosperity for everyone. This report states the facts, outlines the way out of our economy of “more” and into an economy of “enough.”

Check out the Enough Is Enough page, download the report pdf or the report summary, and watch the many videos also available from the conference.

2010 Washington State Voter’s Guide

This November offers up some serious measures and elections, as well as seriously confusing measures and initiatives. I’ve outlined why I’m voting for some and not others, as well as my picks for the state elections. Democracy in action: research and vote!

I don’t usually use this blog as a direct political outlet, but after opening up my mail-in ballet for the Washington State November Election I was inspired to write something. This election is important – not only because it represents a serious threat to progressive action on a national level (don’t vote in republicans!) but also here in Washington there are some important initiatives and elections. You can’t just read the ballet and understand the implications of these measures – especially since many of them include multiple changes to law, overlap in odd ways and are all the source of much campaigning by corporate interests.

I did a little research, as all members of a democracy should – be educated and involved. There are numerous sites out there, but you should at least look at your state voter’s guide to read about the measures before you vote. In the past I have used the local free newspaper, The Stranger, and the county/state guides to help me come to a decision. This year I did a little more research on these complicated measures, although I’ll admit I came to similar conclusions as The Stranger on most of them, it was of my own decision making skills.

Continue reading “2010 Washington State Voter’s Guide”

Taxing The Bads

Taxation is an interesting facet of our society. Economists view taxes as a disincentive in a free market, and rightly so. Taxes increase the price of a product or service, making it less desirable. Yet, when you think about what we tax in this country, it’s mostly things we desire more of – income, profits, sales, et cetera. This odd behavior should be questioned, even more so today when every budget (state, city, federal) seems to be facing seriously tenuous times.

I took the train down to Oregon this last weekend to see my sister graduate from college. While there I stayed with Rob Dietz, Executive Director of CASSE and a good friend of mine. He handed me a very modest looking magazine called Sockeye. I am sure I will be drawing material from this one issue for some time (check it out, amazing articles). For now I want to talk about tax shifting, as mentioned in the article by Alan Durning and Amy Chan, “Making Prices Tell The Truth: Shifting Taxes from Bads to Goods.” (pdf)

The Imbalance of the Free Market

Taxes have the power of acting as a means of balancing what are called “market inefficiencies,” things in the free market system that generate negative externalities. These are unwanted side effects that are not taken into account in a product, service or activity. A great example of this is any fossil fuel, let’s take Coal for instance.

Let’s imagine a coal power plant starts leeching mercury into a watershed and a city water planet down river takes it in (coal accounts for most of the mercury in our waterways). The coal power plant is not paying to filter this mercury out, nor is it paying for all the damage that could occur from the toxin leeching into the ecosystems. Because the producer does not pay for the negative externalities it is left out of the decision to pursue coal power.

If these externalities were eliminated by charging or compensating for them, then they could be factored into the decision making process. This is especially important as all too often these become costs placed upon the society instead of the producer (e.g. the city water plant in the above example has to filter out the mercury from its water source). If these prices were added into coal’s price they would eventually make coal production to costly to be worthwhile.

One of the best ways to internalize these negatives into our free market is to increase their expense with taxes to help offset costs like oil spill clean ups, health care or water treatment.

Continue reading “Taxing The Bads”

Ethical Banking Systems

Banks should protect our money, not fleece us for their profit

Our money is loaned into existence and then must be paid back, plus interest. This interest can only come by earning (taking) money from other loans in the system, thereby installing inherit competition and scarcity in our society. Could you imagine a society in which we didn’t have to compete for a scarce amount of funds? How could this alter our communities or the way we treat each other?

An ethical banking system is one that upholds the value of the people who use it. Instead of a institution that values only profit, an ethical bank would value the people that support it. This really shouldn’t be too crazy of an idea, but our banks today do everything in their power to leverage greater profits. The recent economic crash being a prime example. We should support and create banks that support our societal and economic well being, not their CEO bonus checks.

The Reason We Need It

It seems like second nature to me that systems we create as a society should function with the ethics we value, but there is obvious room for improvement. When a lot of our organizations and industries started the room for growth seemed limitless, so it was much easier to gain advantage in the market and grow without sacrificing ethics. Like many things in this era, we’ve run out of that room and the only way to make a higher market share this year and next year is to start finding ethically gray (or black areas) for expansion (e.g. derivatives).

Paper exchanging for paper is now 20 times greater than exchanges of paper for real commodities. This distortion of value from real wealth to phantom wealth encourages a financially dependent system, driving up debt and down real value. Eventually those claims on wealth will be exchanged for actual wealth – even if there are no longer enough. An ethical banking system supports a more realistic approach to real wealth and the money that represents it – as well as environmental concerns with investment and social justice.

An Ethical Banking System is one that encourages stable and equal amounts of material wealth. If you haven’t clued into it yet, our current banking organizations do not function in an ethical way. Our banking system encourages debt, competition, scarcity, and unequal distributions of wealth. What if we created a bank in line with our values? One that supported the people, community, and real wealth?

Continue reading “Ethical Banking Systems”

The Steady State Economy Conference 2010

Next month in the town of Leeds, UK, the first Steady State Economy Conference will be presented entitled “The Steady State Economy: Working Towards an Alternative to Economic Growth.” The conference is organized by the Center for the Advancement of the Steady State Economy and Economic Justice for All. The two collaborating organizations have brought together some great minds including Peter Victor, Andrew Simms, Dan O’Neill, and Tim Jackson.

The conference keynote speakers will present the need for a steady state economy in the UK, and other developed nations, as well as how the UK might move towards a steady state economy. Workshops will take it a step further and “explore specific policy proposals for achieving a steady state economy.”

It is an exciting step in the process towards a sustainable economy! Rob Dietz, CASSE’s Executive Director, and Dan O’Neill, at the University of Leeds, have been working hard with David Adshead, Lorna Arblaster, Claire Bastin, and Nigel Jones of Economic Justice for All to create a great conference.

It’s being hosted on Saturday, June 19th and for a small registration fee of £30.00 (£50.00 if you register after May 30th). For all those who are in the area of Leeds or might want to make the trip, be sure to take advantage of the opportunity. Unfortunately, I won’t be able to make this conference, so I will be looking to others for news of the event!

Go online and register now!

Capitalism, Socialism and Communism

Okay, I am tired of these terms being used improperly. The last two are thrown around by politicos like they’re handing out free candy. Usually socialism is used by someone (we all know who) to label something they want to attack without using an actual argument or facts to support their opinion (also called bullshit).

Let’s quickly review the actual definitions of these three types of systems:

Capitalism: An economic system that allows private ownership of production. That’s it, that’s all capitalism actually entails – not low taxes, or private health care, or small government. Capitalism is simply a system that does not have government control of production (the government doesn’t own the factories, the companies – well, outside of car companies now – or the processes to produce products. Period). Capitalism refers to a type of economy, not a necessarily a type of government (“Social democracies” in Europe are still capitalistic countries, as the government does not control production).

Socialism: An economic system that advocates either public or direct worker ownership and administration of production and allocation of resources. Socialism removes production and wage labor as commodities, maximizing the “use value” instead of the “exchange value” – that is to say, real wealth versus phantom wealth. In a socialist economy the worker owns the production means and rights to resources.

Communism: An economic and social structure that advocates complete public ownership of production and allocation of resources. Communism is by far the most intertwined with political control of classes, wages, and policies to eliminate poverty or wealth gaps. Communism is considered more of a political expansion of the economic system of socialism and has been in the past portrayed as an attempt to create a Marxism utopia through government (ironic, as true Marxism would have no government).

Each of these systems has political ramifications in any society that institutes it. However, capitalism and socialism in-and-of themselves are economic systems. More importantly, none of these systems require economic growth. You can easily have privately owned production (flourishing production) without a continual expansion of the entire economy. Each of them are human creations. Economic growth is a human creation!

Any human system will be flawed, but hopefully we learn from our mistakes and get closer and closer to perfecting it. Perhaps this is humanity’s own Zeno paradox. While communism doesn’t work for us and socialism has its flaws, why should we assume that rampant capitalism is the answer? We should question the flaws in our system and work to correct them. A non-growth economy can be communist, socialist, capitalist, or anything else we want it to be – the economy is our creation.

Points of Progress

I’m going to start a new serious in this blog, “Points Of Progress,” a once-monthly report of things happening in our world, policies, articles, and practices in-line with the steady state economy, that are worth some time to read about –  the good news, the promising results. This stems from the many articles I have been scoping through on google reader (a great RSS feed tool, for those of you interested in getting updates via rss).

Through the 50-100 posts I receive daily, I manage to pick out a handful of good ones and post on twitter (follow me), but some of these deserve some recognition on this blog. This monthly report is for the exciting things happening I just don’t have time to post about in-depth. Here are some cool things happening in the world:

Maryland’s New Alternative Metric: The GPI

Herman Daly‘s home state has just instituted their version of the Genuine Progress Indicator. This alternative to the grossly inadequate GDP takes into account 26 factors, from incorporating the costs of crime to the costs of ozone depletion. The state is using the GPI as a tool to education the public and policymakers on the balance between costs and benefits of decisions regarding resource use.

As Governor O’Malley said, “The GPI will help us ensure that our economic growth will not come at the cost of our natural resources, and that they both support our progress toward a sustainable future and a better qualify of life for all Maryland families.”

21 Hours: Work Less, Live More

Part of the many policies of a steady state economy, adjusting the work hours for increases in efficiency is a policy that could revolutionize our society. Not only does this policy fight unemployment head-on by making more work available, it frees up time in our weeks to do something really important – live.

The new economics foundation’s new report, 21 Hours: Why a shorter working week can help us all to flourish in the 21st century outlines how the average time worked in Britian, 21 hours, should  be the new standard. As nef explains, “A ‘normal’ working week of 21 hours could help to address a range of urgent, interlinked problems: The average overwork, unemployment, over-consumption, high carbon emissions, low well-being, entrenched inequalities, and the lack of time to live sustainably, to care for each other, and simply to enjoy life.”

The IMF Rethinks Macroeconomics

The International Monetary Fund (IMF) has not only recently acknowledged that macroeconomic policy may have “exacerbated the recent financial crisis,” but also has begun to rethink those policies.

Olivier Blanchard, the IMF’s chief economist, published a paper, “Rethinking Macroeconomic Policy” (pdf), stating that better economic policies might include increased government involvement, higher inflation, and help for the poor. The IMF’s typical policy of telling governments that less intervention and low inflation were powerless to prevent the “Great Recession.” Great news for those of us hoping for changes in the IMF and World Bank.