Copenhagen

The Climate summit in Copenhagen is almost over. The result is sadly not unexpected. When it comes to taking effective measures nobody is willing to step forward. Talk about leadership or absence thereof. Change we can believe in? The Romans had it right when they said nil novi sub sole. There is (never) anything new under the sun.

Copenhagen is just the most recent example of human stupidity. Here we have a chance to use reason to avoid a potential disaster in the very near future, yet nobody wants to take the first step. We would rather spend time arguing as to whether climate change is real (it is), whether we caused it (we did, but it doesn't really matter as long as we try to stop it), and other inane hoopla.

Naysayers are quick to point out how much it is going to cost us, or why we should do anything at all until we are absolutely certain that bad things will happen. How is that for reasonable?

The Economist makes several good points: 1. climate change may not necessarily lead to the disasters that we envision, but if there is even at slight chance that it might, we ought to act and act now. 2. the cost of acting now is minimal, at best a 1-2% drop in GDP. 3. Rescuing the financial system from collapse, cost 5% of GDP, yet nobody was too upset about that.

It is clear that the cost is not the problem. The problem is that some individuals and businesses, some very powerful individuals and businesses would see their profits shrink. Overall that would be offset by other businesses growing, but that does nothing to comfort these very powerful individuals. Even though they would probably manage to step in and take over those growing businesses, that part is uncertain and even that little uncertainty is enough for them to boycott all efforts.

Greed, laziness and stupidity are the only roadblocks. Greed on the part of those making profits from the carbon economy, laziness on the part of a subset of general the public, who are too busy to properly inform themselves about the dangers, and stupidity on part of the majority, who will just swallow whole whatever it is the consumerist media feed them.

greed

Leave it to the Wall Street Journal to find some morons with credentials who will sing the praises of greed, excessive bonuses, and unlimited pay. Or bemoan the country for "railing against the rich."

I have stated before that I don't have a problem with people pocketing ridiculous amounts of money -there is no way to stop them in any case, so why worry?- but I do have a serious problem when these individuals try to justify their bounty. Not only are these guys greedy, they also display hugely inflated egos and profoundly anti-social behavior. This is borderline psychopathic at best.

Arguments in favor of excessive compensation are totally bogus. Nobody in their right mind can claim that their efforts, insights, wit, or genius is worth three orders of magnitude in extra pay. Those who believe such things need to have their minds checked out. Face it, all these guys have going for them is that they happened to be in the right place at the right time. It may have taken them some maneuvering skill to get there,  but that is a far cry from the outrageous assertions they make.

Furthermore, recent events have shown that financial geniuses paying themselves millions not only do not create anything of value, they cause nothing but trouble. As one economics professor explained: they sell manure. Their great "contribution" to humanity was that they managed to temporarily convince everyone that it was rose-water.

At the very best financial wizards lubricate an unsustainable economy of waste and destruction. More often they just cause pain and hardship for everyone without producing anything of value in return.

There is a good reason why all religions think of greed as a sin. Greed is bad for humans. Not just for the greedy ones, it is bad for all of us. It lowers our chances of success as a species and it impacts our ability to survive.

Greed is like drug use gone wild. Some amount of selfishness is good and beneficial, much like an occasional glass of wine. But excessive consumption and addiction quickly becomes a threat not just to the well-being of the individual who engages in it, but also to those around them.

It is not just bad form for a prominent paper such as the Wall Street Journal to commend greed, it is reprehensible. Much like advocating addiction, or other destructive behaviors. Even they should know better.

american-style capitalism

It is often said that the American economic system is the best in the world. Then again, it is often said US healthcare is the best in the world too. And American cars, American TV, etc. Waving the flag is big business.

Every once in a while though, there are some hard data that tell a different story. Take Wall Street bankers and their $18 billion bonuses for 2008. Aren't bonuses supposed to reward good performance? Aren't bonuses there to "align" the executives with the interests of the business and its shareholders? Isn't this country supposed to be a meritocracy, where good work is rewarded? Wasn't America founded on hard work?

The sad truth is more than obvious. Those who are close to the honey pot get extra servings. Whether they work hard or not, whether they do what they are supposed to do or not, whether they perform as required or not. The pot is theirs and even when others have to go empty handed, the guardians of the honey pot reward themselves richly.

We can only draw one conclusion: American-style capitalism is about nothing but greed. Those who display it, get away with murder.

Kudos to Obama for speaking out and calling it shameful. Unfortunately it is worse than shameful. It is criminal. Criminal negligence that deserves more than harsh words. No amount of cosmetic surgery is going to fix this problem. What we need is some deep cuts to remove the rot. Where is the public outrage?

whitewashing greed

In "Anatomy of Gullibility: Why we keep falling for financial scams," Stephen Greenspan, an emeritus professor of educational psychology, tries to explain why he too fell for Mr. Madoff's Ponzi scheme. The piece is in today's WSJ. 

Dr. Greenspan, who calls himself well-educated (he says:" I'm a college professor"), and "relatively intelligent," and "an expert on gullibility and financial scams to boot," portrays himself as a "victim." He needs two pages and several photographs to come to terms with himself.

Like all pseudo-scientists Dr. Greenspan has an elaborate "multi-dimensional" theory to explain where he and countless others went wrong. He says:"based on my academic work in psychology, I propose a multi-dimensional theory that would explain why so many people behave in a manner that exposes them to severe and predictable risks."

If that doesn't get you for gullibility, you surely deserve to be in the company of the good doctor.

If there is one thing worse than being greedy it is surely trying to justify your greed. Professor Greenspan invokes anything and everything, from being Jewish (like Mr. Madoff), to visiting Boca Raton (where the golf courses are), to being sophisticated and not easily deceived, so as to avoid having to admit plain greed. I am surprised he does not invoke the fact that he shares a last name with our friend Allen, one of the engineers of the bubbleconomics.

In the end, all professor Greenspan can come up with is a double indirection to absolve himself. He quotes his sister, who -he is careful to point out- fell for it more than he did, as saying: " I suppose it was greed on some level." On some level? Duh? 

Surely it wasn't as simple as greed, but it had something to do with the four dimensions of Situation, Cognition, Personality, and Emotion? How about I am some greedy Jewish (situation) idiot (personality), faced with a too-good-to-be-true opportunity (cognition) to get insanely rich (emotion)?

Or, I am not greedy, I am an innocent victim, trying to protect what is rightfully mine so I can survive in my old age. Weep, weep.

thanksgiving

It is that time of year again. Time for the harvest festival of plenty. Only this time around there isn't as much plenty as there once was. Although the dramatic reduction everyone talks about is rather minor. Numbers like a 0.5% contraction in GDP or a 2% drop in spending may worry economists and politicians but it is not the end of the world (yet). I am afraid we will have to be prepared for a lot more if we want to create a sustainable environment.

There is some good news. Holiday travel will be less than last year. Probably by some minuscule number, but a small percentage here is huge in absolute carbon terms. Unfortunately gas prices cratered right before the holiday. The drug pushers at Exxon-Mobil, Chevron, and Conoco-Phillips probably realized that it was now or never. Better make sure the "stuff" is cheap when a big consumption blob is expected.

Furthermore, many predict that retail sales will be dismal. Likely another reduction by a percentage point or two, but all little bits help. The less we consume, the less we damage the environment. The end-of-year shopping season is a hugely wasteful activity. It is a time when people buy useless trinkets that they give to family and friends, who are then left with having to throw these items in the trash when nobody watches. But it doesn't stop there. The useless trinkets are packaged in tons of paper and accompanied by well-wishing cards, ribbons, and other solid waste. 

If you want to be an environmentalist this holiday season, give nothing and ask for nothing except hugs and kisses. Don't replace your TV, turn it off instead. Don't buy the latest PDA or cellphone gadget, and vow to keep your car for a couple more years. Forget the bargains. Much, much better bargains are on the way if the depression keeps unfolding the way it currently is.

The sad news is that holiday activity supports people's lifestyle. Many in the country are employed directly or indirectly by consumer retail. Our economy depends on it for almost 3/4's of its value. A huge knickknack-to-trash churning machine it is and we need to turn if off. That means that there will be plenty of pain to go around.

This thanksgiving, let's give thanks for the things that really matter. Friends, family, and the reduction of wasteful consumption.

wall street platitudes

Here is some news for those of you who have been asleep the last two weeks: "Government investments in financial institutions could crimp executive pay on Wall Street, at least for a while,...." so far so good, but now get this, "and hinder firms' ability to attract and retain top talent."

We have gotten so used to this little add-on that most of you probably read right past it. It is the ubiquitous capitalist mantra, we need to pay people more to attract and retain top talent. It is considered so self-evident that nobody even pauses and wonders about it. The events of the past eight years however tell a distinctly different story.

For a long time Wall Street has been paying exorbitant amounts of money to its executives. Certainly over the past eight years, we have seen executive compensation skyrocket. Ergo, we can expect that Wall Street did this to attract and retain top talent. And given how much time has passed we can only assume that they were indeed led by top talent.

Would someone explain to me how this top talent, so amply rewarded, was able to mess up the world's financial system so quickly and so thoroughly?

It is obvious these guys were good at something. One has to be very good to make such a profound mess of things in such a short time.

The correlation between very high pay and talent is rather poor. Very high pay is mostly correlated with greed and ego, two rather undesirable characteristics, that have very little to do with talent. I can assure you that overpaid individuals are never as good as those paid a fair wage. Just as ultimate power ultimately corrupts, so ultimate greed clouds judgement and impairs performance. 

Executives drunk with compensation, perks, and other rewards, behave no better than addicts looking for an even higher high. Eventually they OD. All of Wall Street OD'd and now we are paying the price for it. 

Whatever top talent these executives may have had to get them there, their present situation is not conducive to productivity or performance, even at a marginal level. Much as Mr. Paulson would like to see it the other way, the data cannot be ignored.

housing crisis

Recent events, among them the take-over of Fannie Mae and Freddie Mac, clearly show that the housing crisis isn't over yet. As a matter of fact, I predict it will get (much) worse before it gets better. That is because many mortgages still have to reset to their "real" rates, while housing prices keep on dropping. The drop is likely to accelerate into a free fall soon as banks become increasingly aggressive dumping properties that they want off their books.

Many people, including many prime borrowers cannot -and could not ever- afford- their real mortgage rate. Many had no doubt hoped to "flip" the property or refinance before the reset happened. That is now all but impossible to do. To make matters worse, ever larger numbers are effectively "going underwater" with their mortgage balance higher than their home value. For those who do and who don't have a lot of equity in the house, the best strategy then becomes to walk away from it.

Large swats of homes in foreclosure or empty pose a real threat to local communities. Not only do the abandoned swimming pools breed mosquitos, and the unkept lawns breed weeds, there is also the increasing temptation of crime. Easy targets can tempt even upright citizens who would never dream of stealing things.

All these events leave the government with another massive burden that will need to be passed on to tax payers. But it doesn't end there. Lots of foreigners and foreign governments are invested in entities such as Freddie and Fanny, and when a take-over happens and their equity gets wiped out, they become very cautious and very aversive towards more US lending and investment. Given how much national debt we have and how much we keep piling on with our little diversions in Iraq and Afghanistan, that could mean more trouble to come. If foreigners stopped buying debt we would have to raise interest rates to make it more attractive. That would mean even more foreclosures. Not to mention the damper it puts on business.

Meanwhile jobs are disappearing fast too. With an economy that depends on consumer spending, and no growth in consumer spending, jobs will continue to disappear. Small businesses will go under. Not just in the housing sector, which is already badly damaged, but throughout retail, the cornerstone of our economy. 

Bring in a few additional temporary setbacks, such a no California budget for 67+ days, and more businesses will bite the dust for lack of credit. More people who can no longer afford their mortgage. The only "happy" place we have left is exports. But a US downturn is likely to spread around the globe and that means our one remaining happy place is also under fire.

Don't forget the underlying trend, a population that is aging fast, in need of more medical help, and largely uninsured. Do you see a perfect storm brewing? 

what can you do?

I checked out a few sites dealing with peak oil, climate change, and the like and read their recommendations and instructions. I have to admit that most of it is quite unrealistic, silly, and downright irresponsible. Lots of people appear to have grabbed on to climate change as the latest fashion to further their apocalyptic visions or recommend their organic, zen-inspired life-style. I did not consult with the Rambo-style survivalists as I think they are so far off the right track that it is a pure waste of time.

However, even in the camp of "canned veggies" reason appears to be failing and emotions have taken over. Things are driven to an extreme with a fair amount of bogus beliefs thrown in. Many want to ditch modern society and turn back the clock. They are advocating and teaching a return to the land that rejects most if not all advances humanity made in the last 200 years. They see all these accomplishments as a sign of failure. 

I want to make clear that my view is entirely different. In my view we are not failing, we are too successful. We are too good at what we are doing. What got us into trouble is the fact that we are so good at exploiting our habitat that we are outgrowing it at a breakneck speed. 

That has happened many times before on a local scale. It is always followed by an inevitable correction which I described as a type of "middle ages," i.e. a period of prolonged (centuries) strongly reduced standard of living. This cyclical nature of human history is ignored in most texts. There we read a linear history of ever improving conditions, a triumph of man without any setbacks whatsoever.

If we distort history this way, we are bound to repeat it. The problem is that this time around excesses are on a planetary scale. That brings with it immense risks and for the first time I think the survival of the species is at stake. We may be at a point where we could destroy our habitat beyond repair. Those who fail to see it are deluding themselves just as badly as those who preach an abandonment of modern life.

Lest my recent posts may have given you the wrong impression, let me assure you that I do not think there is reason to believe we face an immediate threat. I strongly believe we can keep going like this for quite a while longer. What I fear however, is that soon (say in 40-50 years) we will be crossing an invisible threshold. A point of no return. If we do all bets are off.

As for now, we are probably in a deep and possibly long lasting (5-10 yr) depression but I suspect the worst case scenario is a "Japan-1990's" replay with at best, some sluggish growth here and there. My view on this matter is entirely mainstream although it lines up with the more pessimistic of forecasters. I do not think this depression will continue into major disaster. As I said yesterday I think a strong recovery is likely and there will likely be new periods of irrational exuberance. Although I do not like it personally, I do believe a deep recession would be beneficial in the long run by postponing major trouble and giving us some extra time. Time is of the essence now.

And that brings me to what you can do to help. It is quite simple really. No need to go to extremes. As a matter of fact, what you need to do is to remove the extremes you are engaged in now. That eight cylinder car, that 4,000 sq ft home, that two hour commute, you name it. The best thing anyone can do is to adopt a sensible life-style. Hardly anyone in America today lives a sensible life-style. An economy that depends for 70% or more on consumer spending is not sensible or sustainable.

A Suburban is not sensible. Not even when it sports a sticker that reads, Keep Tahoe Blue.

Don't eat too much, insert plenty of exercise, and stop buying things you don't need. Don't drive unless you have to and don't come up with excuses that justify all the driving you do. If you spend more than one hour a day in your car, you are driving too much. If you drive every day of the week you are driving too much.

If you feel the need to light up your neighborhood, or have three TV's running plus the radio, think again. If you need more than 50 gallons of water per person per day, think again. If you need power tools to do things around the house, think again. If you are too lazy to push your lawn mower, think again. While you are at it, think about that lawn. Better remove it.

Before you buy fruit in winter, think again. Don't buy bottled water or coffee to go. Don't throw out perfectly fine items and forget about fashion altogether. Don't work long hours just so you can buy more useless stuff that ends up in the garbage. Instead of quality time, spend some real time with your family and friends. Don't travel to see exotic places. Ride your bike instead.

Enjoy the simple things in life. Isn't it ironic that most people these days only start appreciating the simple things in life once they get hit by a deadly disease? Doesn't that tell you something? When push comes to shove, we all know what really matters. Why is it so hard then to be sensible while being healthy? Wake up America !

money and happiness

Often people wonder if money can buy happiness. Most people I think would say yes, although some may qualify their answer a bit. Yes is definitely the answer a consumer society favors. Furthermore, consumer societies work hard to instill this "value" into their citizens. The more time these citizens spend pursuing money and wealth, the more the overall economy and hence the collective power grows. And societies are often ruled by those with an unhealthy appetite for power. 

Unfortunately, we all know that the answer to money and happiness is not as simple as that. There are very many rich but distinctly unhappy people. And the happiest nation on earth is not the richest, although it is clearly a first world country -the current winner is Denmark, but Norway, Switzerland, and others have also won the title in recent memory.

Which brings us to a minority of "hard core" people who will tell you they firmly believe that money does not buy happiness. That is of course easy to say when one lives in a wealthy country where all basic needs are taken care of. One only needs to imagine transporting these happy people to some of the more destitute areas on the planet to see that their beliefs are problematic. A few would merely need to be transported out of their protected neighborhoods to make the same point.

In comes the "yes, but" view. A qualified view that claims a certain amount of wealth or money is needed to take care of basic needs. Any money beyond that does not correlate with happiness these folks would argue. That begs the question, what is a basic need? Are cellphones and cars basic needs? Or is it just limited to food and shelter? If so, does food include restaurant meals and does shelter mean a 4,000 sq ft home? 

It occurred to me that the answer is rather simple. "Can money buy happiness?" is an ill-posed question. Money and happiness have some relationship but it is not a linear or even a smoothly evolving one. It isn't even a fixed one that holds across all societies and time periods. And it certainly is not a causal relationship. "Can money buy happiness" is simply the wrong question to ask. There is no good answer for it. Sometimes it does and sometimes it doesn't.

Psychological studies have show that two factors are key to happiness. One is the perception of being in control of one's life and destiny. The more people feel in control, the happier they tend to be. Events beyond anyone's control, so-called "acts of god" definitely play a role in happiness. If fate hits it can put a pronounced damper on one's enthusiasm.

Surveys in Money magazine consistently find that biologists are among the happiest professions, even though their compensation is low, and few biologists are rich. However, as anyone who is familiar with the current situation in academic biology will tell you, biologists are in charge of their careers. They can run their labs like despots if they like. They answer to nobody -within reason of course. They don't have to collaborate unless they desire to do so. They are free to pursue their interests. In short, unlike many other scientists or the majority of employed workers, biologists have nearly absolute control of their little kingdom. And that makes for happy people.

The second factor is perceived success within a peer group. Humans compare their success with that of their peers. That is why we always want to keep up with the Joneses, or do better than the neighbors. We judge our success based on what we perceive in others. But not just any others. We can be quite picky when it comes to selecting peers. And we can also be quite selective when it comes to measures of success. So your neighbor may outdo you in having a fancier car, or a bigger house, but you feel you have better behaved children. Or children that do better in school. Or a better looking partner. Or a nicer yard. Or you may beat the neighbor in a race.

Success and control over one's destiny are closely related. They are but aspects of a single core value. A value that judges how well you are doing compared to others. These are universal correlates of happiness and they have nothing to do with money or wealth per se. Although, in a first world society, there can be some correlation.

As would be expected there is a spread around a mean for these values. A few people grow very obsessed with power and the size of their peer group. They want power over everything. A similarly small group care very little for power and are happy to bob around on the current and ignore most others. Some have a very small and select peer group, while others try to outdo everyone they bump into in one way or another. Some have many interests and can find many ways to achieve success, while others are dead-set and focused on one item, eg. money, partners, cars, etc.

And as is often the case in biology, the ones in the middle are doing best. They are the happiest of all.

gas guzzling culture

The NYTimes has a long article on the American Energy Policy, or lack thereof. The title is: "American Energy Policy, Asleep at the Spigot." Apart from highlighting the obvious -i.e. that we have no policy other than to burn more- the article contains some memorable quotes. Take this for example, from Newt Gingrich: " Our culture favors driving long distances in powerful vehicles and the car as a social expression." 

The word culture is especially well chosen in this context. Powerful vehicles? Social expression? Wouldn't it be better to say oversized, overweight, and overstuffed living rooms on wheels?

Newt also thinks we are not like the Japanese or Europeans. That despite the fact that most Americans -or at least those in control- have a European or Asian ancestry. I.e. we are not "natives" to this continent, no matter what anyone says. Our ancestors may have come here because they were poor, underprivileged, or prosecuted in Europe and Asia, but we certainly cannot claim that European or Asian thinking is foreign to us. Maybe some of us have a chip on our shoulder and feel like we need to show the old country how much better off we are. 

The question is are we? And if we are, how much longer will it last. Here is a quote from Pete Domenici in the same article:"We've got to fix it or our standard of living will change within a decade." What we have to fix is our addiction to cheap oil, and "powerful vehicles."

Decades of advertising have warped the American mind. Decades of commercials telling us that we needed big cars, big houses, and big everything to be happy. That greed is not just acceptable but desirable. That shopping is our patriotic duty. That being wasteful is unavoidable and necessary in modern life. That it is an expression of freedom. That it shows we are better than those Europeans and Asians. 

Our standard of living is higher. What that means is that we spend more money. We buy more and consume more. We are not the American citizen, we are the "American consumer." We consume more, ergo we are happier, right?

Research shows otherwise. Europeans are happier than we are, despite $9 gas. Despite living in smaller homes, and driving smaller cars, and taking public transportation, and riding their bikes. Despite their "socialist" systems, and despite having "inferior medical care" and all that other baloney that the advertisers want to make us believe.

Unfortunately, it seems the European middle class is doing better than the American middle class. Granted they have less discretionary income and fewer "toys" than we do. But then again, they are not over their ears in debt. They don't need to work two jobs to make ends meet. They get five weeks of vacation a year. They take long holidays. Their kids get free education. They get free medical care. Their retirement is taken care off. They are not as overweight and not nearly as stressed as we are. Their jobs cannot disappear overnight and cities don't turn into ghost towns over there.

How about those protesters in Paris? And the German strikers? Is that what we see on TV?  TV, our source of information. Our window to the world. Brought to you by Coca-Cola and Exxon-Mobil.

Stay with us. Don't touch that dial, America ! We'll be back after this.

the 100 year flood

I read somewhere that the MidWest is experiencing its fourth 100 year flood in 35 years. Clearly something is amiss here. Maybe someone misplaced the zero? Already a debate has started whether or not global warming is to blame. Remember Katrina? We are at it once again.

I want to sidestep the global warming issue because it is likely to lead to unproductive debates. Instead of pointing fingers, let's take a look at the facts. Nothing but the facts, ma'am. If four hundred year floods occur in less than forty years then we are really dealing with 10 year floods. And if every 10 year flood is as devastating as this one, we aren't going to do so well in the long run. It is not just a matter of poor statistics we are talking about. It is something that wrecks the livelihood of many good people.

Once again the problem is that people are trying to live in areas where they should not live or do things there that they should not do. I am not saying we should refrain from changing our environment, but there needs to be a limit somewhere. Humans like all animals try to modify their environment, and doing so is a good thing to do. I am absolutely positively in favor of making life better. And if there is some collateral damage, well so be it.

Changing the environment makes it so we can enlarge our niche and it protects us from danger and makes it so we can live more comfortably. But that also imposes a good limit. A cost/benefit limit. Clearly floods like these every ten years or so do not make us comfortable. They do not make it safer for us to live there. We are asking too much.

Every time you ask this much you should also ask yourself, why? And here the why is obvious. It is called greed. We live in the plains because it allows us to grow cheap food that we can transport easily via the river to far away places. But location is not enough. These plains, while enormously productive would not be so without cheap oil. Once again, cheap oil is allowing us to do things we better not do.

The floods are but one symptom. They inundate the land that we grow food on and make it so our yields drop. But in "normal" years the runoff from pesticides and fertilizers make it so the Gulf of Mexico is becoming a wasteland where food (here fish) is disappearing quickly. It appears this situation is one of extremely high cost, with very little benefit. Unless you think high fructose corn syrup is a benefit. The only benefit we can see is dollars flowing into the pockets of some very rich farmers. That is called greed. For the time being the profit is quite literally underwater. 

But fear not, those farmers will go to Congress and you and I, the taxpayers of America will bail them out. Whether we like it or not. And that is wrong.

living it up

According to a KTVU, Bay Area Channel 2, report Oakland Mayor Ron Dellums is living it up at tax payers' expense. KTVU is apparently upset about the sorry state of Oakland, where Dellums was recently elected mayor. So their special reports team went to dig into the public records and found that Ron Dellums, a long time politician and former congressman is greatly outspending his predecessor, Jerry Brown.

I have to admit that the news coming from Oakland is not good. Crime is up, streets are full of potholes, and the schools are performing badly although they appear to have improved somewhat. It is however unclear how much of that is related to Dellums. Most problems were there well before Dellums was elected mayor. Some would argue he was elected to fix these very problems. If that it true, then it certainly remains a campaign promise. However, what really rubs people the wrong way is the Mayor's plan to cut back on city services to save money. Not that he has that many alternatives given the sorry state of the California budgets.

Dellums is well known for his left-leaning policies, and wikipedia calls him the first openly socialist Congressman since World War II. There is no doubt that many are strongly opposed to Dellums and would welcome any criticism of the man as long as it is negative. Given his political orientation, it is obvious where that criticism would come from. Note that KTVU felt it necessary recently to make clear to its viewers that while it is affiliated with FOX, FOX News has little or nothing to do with the contents of its reporting. Now there is a coincidence if I ever saw one.

To be honest, I am not all that upset about another politician getting free rides. They all do. One might say it is probably the main reason why they went into politics. Perks and power. That is what politics is all about. Never mind the advertising tag line of "public service." Remember, the ministry of love?

What is truly interesting about the whole episode is the warped idea people have of happiness and success. An idea that affects Dellums and other politicians as much as it does most of us. It is the consumer society's idea of happiness and achievement.

It appears Mayor Dellums enjoys fancy hotels, flowers, eating in expensive restaurants and being driven around, be it locally by his personal chauffeur, or in the nation's capital using expensive limo services. These, my friends are put forth as the true measures of what we should all strive for and aspire to. That is why it is supposed to irk us that this particular politician is getting all these perks undeservingly so, and at our expense -or at least the expense of the citizens of Oakland. Furthermore, being a left-leaning politician, this is an indicator of his deceitfulness and untrustworthiness. As if right-leaning politicians are entitled to live it up.

It is sad that people equate dining at expensive restaurants, sleeping in luxury hotels, and first-class airline travel with happiness and achievement. These are ostentatious acts designed to impress others. Their only biological benefit is in attracting mates and generating more offspring. Unfortunately, that is often not possible. So what remains is a ritual shell with all the costs of sexual display, but none of the advantages.

These "perks" do not enhance personal well-being. They are more likely to make you sick. Many people sitting in expensive restaurants wish they could have a hamburger and a beer at home. If only they could shed their expensive costumes and untie their restrictive ties. They would feel happier if they did not have to travel and meet strangers. If they could just shed the yoke of consumerism and enjoy life instead.

corporate social responsibility

To conduct business, humans have invented virtual entities known as "corporations." The word corporation derives from the Latin corpus or body. These entities are in effect legal bodies or to put it more poetically, imaginary people. They have certain legal rights and obligations. They have legal responsibilities. They can own items and make a profit. They can be sued if they misbehave. And they are responsible to their owners, known as shareholders.

In short, we have created legal persons. The brains of those legal persons are entrusted to a group of people known as the officers of the company, led by the Chief Executive Officer or CEO. To provide some oversight the company also has a board of directors. All of this is to make sure that the corporation behaves properly and that nobody cheats or steals from it, or uses it in any fraudulent manner or to conduct a crime.

In general, corporations are led by honest, hard-working people, who are well respected in their communities. These people are driven by a variety of motivations and making a profit is surely one of them. But many also desire to make a difference in their communities or the world. Yet, however well-adjusted these people are, the law is asking them to behave in a distinctly anti-social, and some have said psychopathic manner.

Just to make things clear, a psychopath is a person has no conscience. They lack of remorse or guilt and are immoral and antisocial. They have no regard for the well-being of others and only think of themselves. They do not feel empathy for their fellow man. Often they are charming, cunning and manipulative. So how does this relate to a corporation?

Corporations have to act with the sole purpose of making money for their shareholders. If that means laying off people, taking away their benefits, or unsettling entire communities so be it. If it means destroying the environment, ditto. Corporations can only think about profit and all else has to submit to this prime motive. Even if the officers and directors disagree or find such behavior distasteful, they are bound by fiduciary duty to uphold it.

A corporation has to act as an antisocial, immoral, egotistical person. Investors can sue a corporation and its officers if it deviates from this premise for whatever reason. Even if that deviation is done for social or humanitarian reasons. The corporation has a ruthless profit motive and if it has to harm people to get there, so be it. As long as no crime is committed, we expect corporations to behave in whatever manner ensures maximal profit.

It is quite surprising that smart and well-meaning humans have come up with such a legal structure. I have discussed this topic before on March 22 and suggested that shareholders revolt and demand a legal structure that is more in line with normal human behavior. If we create artificial people, should they not behave like normal people do? No society tolerates psychopaths in their middle and no society should tolerate psychopathic behavior from virtual people either.

The posting provoked quite a few comments stating how it was impractical or impossible to legalize moral behavior. Clearly that is not the case, and ordinary humans are held to such standards and promptly punished if they don't act this way.

So why treat our virtual people any differently?

It turns out others have thought along the same lines, and a movement has started to form around a new entity called the B corporation. It was started by a successful Stanford graduate, called Coen Gilbert, according to the San Francisco Chronicle. A B corporation can have values that go beyond profit. Right now, B corporations are more the exception than the rule. The story listed 23 B corporations based in the Bay Area. It is a start.

However, B corporations have no special tax status. It is also unclear how much legal protection they would enjoy if shareholders sued them for leaving profits on the table. The situation is quite complex. Some states have laws allowing companies to consider the interest of constituencies other than shareholders, but California is not one of these. However, a bill has been introduced in California by Assemblyman Mark Leno (D-SF) to do just that.

Don't hold your breath. I am sure there are many powerful opponents here. Furthermore, many sensible ideas never make it in the real world. This one however, should be welcomed by all. It is correcting a mistake we made earlier. That much is just plain common sense.

naive

To any big oil industry trader or executive, the current calls for alternative energy seem overly naive. To propose that we tackle our current energy needs with solar or wind power must sound as credulous as young children offering their parents advice on how to solve key problems.

For once though the real naiveness is not in thinking that we can do without oil. Because surely for as long as we persist in our current way of living we cannot and we never will. The naiveness is in thinking that we can keep going the way we are going. That we can keep building houses in the desert and then use energy to keep them from becoming ovens. That we can all drive oversized SUVs wherever and whenever we please. That we can fly around the planet. That we can all lie in front of our flat screen TVs munching chips. That we can all have a lawn. That we can all drink bottled water that has been shipped half way around the globe. That we all need fresh fruit and vegetables in the middle of winter. That the party will never end.

However, not all is lost. Because, however good you think this party feels, it really is not. People are far from happy. There is more depression, more mental illness, and more chronic disease now than at any time in human history. More people are overweight and suffer from diabetes and high blood pressure than at any time in history. These modern ills are so prevalent and so serious that some have argued that all the gains we made against infectious diseases are nullified by the losses we suffer to diabetes, obesity, high blood pressure and the like. I.e. it is not obvious that we are better off than our ancestors several centuries ago. It may appear that way, but then again we may be overly naive.

Our party is not satisfying in any real sense. It is driven by constant activity, constant buying, and other obsessive-compulsive behaviors that make people forget their unhappiness and that some would say, are symptoms of a deep underlying unhappiness. Humans are not well suited to a sedentary life-style. They are not adapted to eating sugar and sweets all day long. Even though we are curious and like to see new things, we do not travel as well as we would like. We suffer from jet lag, travelers diarrhea and other ills. Traveling spreads infectious diseases and will play a major role in the coming and all but inevitable pandemic.

So, you wonder, why do we do all this stuff if it does not really satisfy us? One key reason is the constant barrage of advertising targeting our most basic needs and instincts. We are constantly told that we are inadequate unless we drink coke, budweiser, or unless we buy dove soap, or apply degree deodorant. We need to brush, floss, and gargle listerine. We are told we need to travel and visit faraway places. We are urged to buy larger and heavier cars. We are frightened into swallowing vitamins and supplements, and drink calcium fortified orange juice. We are bombarded with thousands of ads by the time we turn ten.

This flood of advertising is so overwhelming and so difficult to get away from that it is constantly driving our day. Americans watch more commercials than any other people in the world, and they spend more time shopping than any other people. All that shopping amounts to very little as research has shown that we discard or thrash over 90% of what we buy within six months. Nothing has any lasting value in this system of constant and senseless turnover. We have become huge churning machines, taking in goods and energy, and spitting out waste and pollution.

It is indeed very naive to think that we can keep going like this forever. That it is our patriotic duty to consume. The fact that nobody objects to such a depiction of patriotism shows how deeply affected we are by advertising and how warped our sense of the world has become. How can destruction of our land and wasting our resources be called patriotic? It is time to wake up America. Wake up before it is too late.

the stimulus check is in the mail

The government wants us to do our patriotic duty and spend money to "save the economy." That is why we will all find money in our bank accounts, or for those of us who don't trust the electronic networks, checks in our mailboxes. I take it the poor and uneducated fall primarily in the latter category. That must be why many retailers are offering to turn rebate checks into a gift cards.

These "caring" retailers will also add 10% to that check for any person who does so. Imagine that, you get $300 from the government and those nice people at Wal Mart will give you an extra $30 to spend. Why not add another gimmick to this already gimmicky scheme? Before you spend your stimulus money, better think again.

Retailers can generously add 10% to all those checks because most people leave a fair amount of cash "un-cashed" on their gift cards. There are tons of used gift cards out there with $4-10 left on them. The tendency is so common and so widespread that gift cards have become a favorite tool for retailers to "tax" consumers. Not only do they lock you in -you will now spend all that money at Wal Mart and nowhere else- they will also get the leftovers free of charge.

California law makers have recently stepped in and a new law in the state forces retailers to cash out small amounts of leftover cash on gift cards. That little leftover does nothing to stimulate the economy but it adds directly to the bottom line. Big corporations love to play these tricks on unsuspecting consumers.

There are other reasons for holding on to the money. One is that the economy is in dire straits and a little bit of money like that is unlikely to make a big difference. When people are falling behind on their mortgage payments, a one time $300 check is unlikely to save their home. Especially when that house is now worth $100K+ less than the outstanding mortgage balance.

Before you know it you may be out of a job, out of a house, and bankrupt to boot. Add to that rising food and energy prices and maybe you would do better trying to save your rebate for a rainy day. Not that we will get many more of these once global warming kicks in.

Let's not forget the bigger picture though. What this economy needs is a major overhaul. An overhaul that won't be possible without a major contraction. We simply have to give up on our unsustainable life-style and go back to the basics. That does not mean give up on modern comforts or technologies as some would have us believe. But it does mean we should stop consuming for the sake of consumption.

We need to stop churning through stuff. And that will take some doing. Not in the least because so many people got so rich making us do so. These guys are not about to give up without a fight. They are not about to roll over and smile. So it is time for us to fight back. Fight back by ending this senseless consumption that is treating our valuable resources as if they are cheap and unlimited. The time of endless supplies is over. We can see the end in most cases. Granted it is often more than 50 to 100 years away, but even that should be scary enough for us to sit down and think again.

One hundred years is not that much time. Furthermore, serious hardship is likely to start much sooner as resources become more scarce and prices will skyrocket. Sure there will be speculation and false alarms, and it would not surprise me to see two or three episodes where prices drop dramatically and everyone laughs at another doomsday scenario gone bust. Sooner or later though reality will kick in and there won't be any more excuses. Better get ready before it is too late.

carbon credits and reader comments

The reader comments -in today's Wall Street Journal- on a recent article about carbon credits are quite instructive. Here are some interesting responses. One reader points out that the high European tax on gasoline is in fact a tax on carbon emissions. He claims a $1 per gallon gas tax is equivalent to a $100 per ton carbon tax. So far so good. I am in favor of higher gas prices and experience shows that higher prices do reduce consumption and are very beneficial in the battle against global warming.

But now the reader claims that since Europe charges anywhere from $2-3 tax per gallon, but consumption nonetheless went up by 26% from 1990 to 2004, that is proof that of a failed policy. The raise is irrelevant of course. What we really need to know is how much consumption would have gone up without the extra tax. And to get an idea of whether this works or not, just take a look at gas consumption per capita in Europe versus the US. Clearly Europeans use a lot less. Now you will probably say, distances are shorter in Europe, but that is a meaningless argument. Distances are what people make them to be. If Americans think it is acceptable to live 50 miles from work and commute that far by car everyday, then low gas prices surely have something to do with it.

I am sure you will find another argument to counter this, such as high home prices or something like it. But remember that high housing prices are also an artifact. They are high because the government subsidizes housing by letting people deduct their mortgage interest. Furthermore, Americans can buy homes with a little as 5% down. In Europe, even 20% is rare to find and most mortgages require at least 40-50%. Secondly, with abundant cheap energy, builders prefer to build huge houses so they can charge more. Suburbia is a totally subsidized and artificial living arrangement. It cannot persist without abundant cheap energy and water. Nobody could afford to live in Palm Desert without extensive support. Even Sacramento would be a wasteland with cheap gas and plenty of dam building.

On to another instructive comment. One reader says, Who would be ignorant enough to sign onto something that China and India don't participate in? Fair enough and many readers make similar observations. These basically say that we should not foot the bill for others, or that we should not use our hard-earned dollars to help others. There is a strong sense in all these that the readers are not prepared to cooperate with others -even others who have an inferior standard of living- to save our habitat. We would rather die rich than share.

And finally, the most telling of all. It reads, It's not that we are in love with petroleum; not that we are wasteful and "dislike" nature. It's that we do not want the federal government giving away our tax money and global competitiveness.

This one puts it all together in one nice package. And let's take it at face value. Let's assume the reader does not think he is in love with petroleum. Let's assume he does not dislike nature and that he truly believes he is not wasteful. Then, more than any other comment this one illustrates the profound ignorance of our citizenry. Our maybe the spectacular success of our Madison Avenue brain washing.

Let's set the following test. Maybe the reader can stop using petroleum for a week. Both directly -as in driving, heating and cooling- and indirectly -as in using only local food grown without fertilizers, pesticides, and artificially pumped in water. Food shipped in by bicycle. Let him do this and then tell us with a straight face that he is not in love with petroleum. Because the truth is, he has no clue how deeply addicted and dependent he, and all of us really are. Without petroleum, most of us would starve.

As for being wasteful. Let's take a look at his electricity, gas, and water bills. Let's see how many gallons of water he needs to get through the day. Let's check how many kWh of electricity, and how many therms of gas. Let's multiply that by the current world population and see how big the shortfall is. Not wasteful, give me a break.

It is comments like these that often make me wonder if there is any hope left for humanity.

blue man show

If you've been following the news lately you surely witnessed the latest blue man show. No, this one is not on a Las Vegas stage, but it is just as unreal. Light blue clad Chinese "security" people forming a protective cocoon around the Olympic Torch. Despite the baby blue outfit these "pros" are not to be messed with. Some popular websites labeled them "thugs," and other highly descriptive but rather unsympathetic terms were used. Maybe the Chinese government is trying to show the world how it handles dissidents? After Tibet, who is next ?

This latest fiasco shows once again what the "Olympic spirit" is all about. Now that the epic cold war struggle is over, the torch has -quite literally- been passed to China. And the Chinese are trying to show the world how important they really are. One can only hope that people take notice. With all the undue attention given to al-Qaeda and other Islamist organizations, it is easy to forget where the real threat lies. And this one won't be as easy to deal with. China is the one nation that can mobilize millions and it won shy away from a few thousand casualties here and there.

Politicians would do well to forget about phony wars, that generally achieve nothing other than wasting inordinate amounts of money. Phony wars like the war on drugs, the war on cancer, the war on terror, etc. These are nothing but bottomless pits for spending. And all have a negative return on investment. Neither drugs, nor cancer, nor terrorists will ever go away. Furthermore, these are not important threats in the overall scheme of things.

We should pay attention to what really matters. In our world of limited resources, China is adding "another France" every year to its unquenchable thirst for energy. Growth of such magnitude will not come to rest easily. Sooner or later something will have to give. And since all wars are about resources, this is a war in the making. So rather than spend money to beef up another dictatorship in return for some cheap trinkets, we should rein in those greedy "investors" and have them focus on our own economy.

Unfortunately that economy is turning more into a giant fluff ball with every passing day. Every time we ship a real job abroad to save a few pennies, we replace it with another fluff ball position. While that position may pay better over the short run, and economists can happily check the added value box, it won't be so good once the big bubble bursts. Like those McMansions in the desert, we won't have much use for another life-style coach when trouble strikes. Given how close to the edge we are living that trouble cannot be too far off either.

iraq and the big picture

Whether you are for or against the war in Iraq, remember one thing. The war is and was all about oil. Everyone knew it all along but nobody wanted to come forward and say so. Those who tried were quickly silenced. Often by flag-waving, patriotic slogans, and ingenious and long-winded arguments about freedom, democracy, and what have you. Or maybe they were touched by cruelties such as "gassing his own people."

The Iraq war has been wrapped and boxed in more layers than an Egyptian mummy. Instead of cotton and cedar though, we are talking layers of political and ideological obfuscation. If nothing else, it shows how good we humans are at rationalizing our behaviors and how willing we are to listen to and even believing other people's rationalizations. Experts have analyzed and probed into the President's mindset and utterances, only to discover drives and motivations that wouldn't fool a four year old.

The war in Iraq is a logical and inevitable consequence of our over-indulgent life-style and addiction to oil. And that life-style goes across the aisle. Nobody with the tiniest bit of self respect can argue they are against the war and drive an SUV every day. What they can say is that they are against how the war was conducted. Or that they are disappointed in the tactics we had to resort to. They can be embarrassed that we had to use torture or open up concentration camps to get our way. They can be shocked at what little was achieved. And maybe that is what this is all about. We are all against the way the war in Iraq was run.

The conservatives may feel we should have gone in with more fire power. More shock and awe fireworks. However, they probably remember the Vietnam debacle and the strong aversion we all have towards casualties. In this age of high-tech we want clean wars without casualties. American casualties that is. Because for all our political correctness, the others don't count, and that is exactly why we don't count them. Wars are messy, anyone can tell you, and as long as we keep the mess away from us, things should be OK.

The liberals may feel there was too much overt damage. Too many shocking images unfit for prime time TV. Too much loss of life. They may think should be able to get our oil without blood and gore, and without all that macho testosterone posturing. Let's just be smart about it and find some way to run off with it. That is what those anti-war stickers on the big Volvo cross-over are all about. But hurry, we have to drive the kid to soccer practice and then get in the car to go to the gym. And let's not forget our weekend trip to the mall.

Perhaps we should have a little People magazine quiz to find out if we are really against the war. It could have questions like, how many cars do you own? How many boats, motorcycles, jetskis, snowmobiles, lawn-mowers, and other gas guzzling devices? How big is your house? How high is your monthly electricity bill? How much gas and oil do you use for heating? How much water do you waste each and every day? How big is your lawn? And how many frequent flyer miles do you have? How much beef do you eat? And how much do you weigh?

If you scored above 5, and who doesn't, you are a true dyed-in-the-wool supporter of the war in Iraq. So quit the charade and sing out loud with Borat, "we support your war of terror."

ownership and fiduciary duty

The Wall Street mantra is very simple. A company is in business to make money for its owners. These owners are the shareholders, and often include people like you and me. The key assumption is that the shareholders are only interested in making money, to the exclusion of everything else. More about that later.

The mantra means management has to set aside all their personal judgement, emotions, feelings, and common sense and act like ruthless profit seekers. If they have to go against people's interests and cause damage so be it. It is their fiduciary duty. That is a nice word for saying they are bound to act against anything and everything that stands in the way of profits.

Such behavior has been dubbed psychopathic by at least one psychologist. He points out that although management may consist of reasonable people who display normal human traits, such as empathy and altruism, all these have to be put aside in pursuit of making money. Such antisocial behavior without remorse is exactly what psychopaths do. And all this is to done in the name of the shareholders, who are -as I pointed out- people like you and me. People who are, on the whole, normal people with feelings, sympathy and empathy. But let's deal with another point first.

If businesses have to act like psychopaths, and apparently they do, then they cannot be good corporate citizens. Despite all the PR and goodwill they try to buy, they are in essence deceiving us. Oil companies do not want to save the environment or act responsibly like their ads say, they want to stuff their pockets. Pharmaceutical companies do not want to cure illnesses or end suffering, they want to increase their margins. They have to. Their employees and managers may feel differently, but it is their fiduciary duty to act like cold psychopathic monsters and put profits first.

No person, who is immune to the suffering and plight of others can be called a good citizen. And anyone who blatantly disregards the well-being of others in the pursuit of a single-minded dream -in this case greed-can not be a member of society. And companies, true to their manager's fiduciary duty do such things. They uproot towns, they disenfranchise workers, and they destroy the environment in pursuit of money. That means their advertising is a lie. Management has a fiduciary duty to lie when they put out ads saying the company does anything but maximize profits.

So why do we tolerate such behavior and such lies ?

And why, if we are the true owners can we not agree on a different mission ? We own these corporations, in part directly through the shares we buy and indirectly through the money in our pension funds. Money that ultimately belongs to us but that is temporarily administered by professional money managers. Managers who are in a real sense our employees as we employ them to take care of our money.

Why can we not force companies to forgo profits and be good corporate citizens ? Why can we not have a balanced set of goals that includes taking care of families, taking care of the environment, and not just pursue money for the sake of money ?

But what about the original owners you say ? They were in it to make money. Assuming they are not psychopaths, I would argue, they too should have a balanced view. Furthermore, even if they were psychopaths, they get what they bargain for. When they accept new owners by selling shares in a public offering they are in effect giving away part of their company. If entrepreneurs do not want others meddling with their company they should refrain from selling stock to the public.

One could also argue that these social matters are already taken care of. That so-called socially responsible investment funds are the solution to this problem. However, that is clearly not so. These funds chose to invest in companies that are vetted for socially responsible behavior. What I propose is that we, as a society set rules on how we want companies to behave. And that all companies who want our money be forced to behave that way. Not that we go out and find some companies who happen to behave properly -and apparently in violation of their "duty" then- and give them funding instead.

You may argue that this is not feasible. But the reality is quite to the contrary. We do have a government to do this. And if that government is really by the people and for the people -and not the other way around- then this should not be a problem. We vote on how we want thing to be, including companies. We own them after all.

Then managers would no longer be in a bind and be forced to behave against their better judgement. They could take into account other values and they could truly represent what society wants for the greater good. How is that for a change ?

bailout

If you look around you can see what happens when greed festers. Consumption without restraint maybe fun for a while, but inevitably the time comes to pay the piper. In a free market economy that means a prolonged recession or even a depression. Recessions are much like storms. Most of them are easy to weather, but every once in a while you hit the perfect storm. One that leaves a trail of casualties behind. There is a high likelihood that we hit another perfect storm. Some have argued we are in a situation similar to that of the early 1930's.

The remedy for such situations is called government bailouts. This is the part the less regulation-less government crowd does not want to talk about. These guys hate the government. They like to be left alone so they can fully indulge in their endless greed. They don't want anyone to spoil the party with planning and regulation. Planning and regulation prevent them from getting scandalously rich. But when the bubble burst, they are the first to call for government help. Suddenly, the evil government turns to a saving angel. When trouble hits, the tax payer is the one footing the bill. And the really rich have already made sure they will not be the ones paying taxes.

In many ways the financial system is mimicking the real world. There are many analogies between financial systems and natural evolution. And there is something we can learn from observing this credit crisis. Absence of restraint and regulations leads to fantastic growth but also to premature death. While the bubble grows, nobody can convinced that the party will end. But it is obvious things cannot keep going the way they are. Yet the skeptics are dismissed as out of touch, old-fashioned, luddites, and what have you. And then the bubble bursts.

Unfortunately, once this happens on a global scale, there will be nobody to bail us out. So go ahead and waste resources. Drive gas-guzzling cars, fly all over, turn up the heater and the air conditioner, build those 5,000 sq foot mansions. Live it all up. Just remember, when the party ends, and it will, there will be nobody to turn to. Evolution has a nice way of dealing with such excess. It is called extinction. And it is as much part of the natural world as the creation of new species.