Wednesday, May 16, 2018

Alexander Hamilton versus Shareholder Value - HAWB December 1790

How America Was Built: Alexander Hamilton versus Shareholder Value - HAWB December 1790

This past month I made a concerted effort to read the major reports to Congress submitted by First Secretary of the Treasury Alexander Hamilton. These reports are the foundation documents of the USA economy. And no, the USA economy was not based on the ideas of British imperial economist Adam Smith, whose ideas Hamilton flatly rejected in his reports.

The Second Report on the Further Provision Necessary for Establishing Public Credit was submitted to Congress on December 13th, 1790, and is often referred as The Report on a National Bank. In one section, where Hamilton explains the best structure for a central bank, he propounds a system of proportional shareholder representation in which no one "person, copartnership, or body politic" was allowed more than 30 votes, no matter how many shares they owned. Since this was a Founding Father prescribing a system of corporate ownership that was entirely at odds with the business management ideas of shareholder value, profit maximization, private equity, etc., etc., that have predominated for around the past half century, I was amazed when I began checking various biographies of Hamilton and found that none had pointed to this important fact.

Hamilton's plan of shareholder voting, if it had been extended beyond the central bank to other corporations, would have hampered, if not entirely crippled, the corporate raiders who destroyed tens of thousands of USA industrial facilities--beginning in the 1960s "go-go" years of mergers and acquisitions; the 1970s through 1990s "leveraged buyout" pirates like Michael Milkin and Kohlberg Kravis and Roberts; and contemporary "private equity" scammers like Peter G. Peterson's and Stephen A. Schwarzman's Blackstone Group; David Rubenstein's and Caspar Weinberger's Carlyle Group; Leon Black's Apollo Global Management; and Mitt Romeny's Bain Capital.

Hamilton agreed that larger shareholders should have a larger vote, but he clearly saw the danger that "a few principal Stockholders" could seize control of "the power and benefits of the Bank." Hamilton knew that to preserve the new experiment in republican self-government, any such  dangerous concentration of economic power would have to be guarded against . Hamilton wrote:

�A vote for each share renders a combination, between a few principal Stockholders, to monopolise the power and benefits of the Bank too easy. An equal vote to each Stockholder, however great or small his interest in the institution, allows not that degree of weight to large stockholders, which it is reasonable they should have, and which perhaps their security and that of the bank require. A prudent mean is to be preferred.�
But how to maintain the economic equality required to maintain republican government? Clearly, under a system of "one share, one vote," large concentrations of wealth could easily procure control of the bank. Accordingly,  Hamilton proposed that no shareholder should have more than thirty votes:
�XI. The number of votes, to which each Stockholder shall be entitled, shall be according to the number of shares he shall hold in the proportions following, that is to say, for one share and not more than two shares one vote; for every two shares, above two and not exceeding ten, one vote; for every four shares above ten and not exceeding thirty, one vote; for every six shares above thirty and not exceeding sixty, one vote; for every eight shares above sixty and not exceeding one hundred, one vote; and for every ten shares above one hundred, one vote; but no person, copartnership, or body politic, shall be entitled to a greater number than thirty votes.�
This is what Hamilton's scheme of shareholder representation looks like:

# of shares     # of votes
        1                       1
        2                       1
        3                       2
        4                       2
        5                       3
        6                       3
        7                       4
        8                       4
        9                       5
      10                       5
      11                       5
      12                       5
      13                       5
      14                       6
      15                       6
      16                       6
      17                       6
      18                       7
             .   .   .   .   .
      22                       8
             .   .   .   .   .
      26                       9
             .   .   .   .   .
      30                       10
             .   .   .   .   .
      36                       11
             .   .   .   .   .
      42                       12
             .   .   .   .   .
      48                       13
             .   .   .   .   .
      54                       14
             .   .   .   .   .
      60                       15
             .   .   .   .   .
      68                       16
             .   .   .   .   .
      76                       17
             .   .   .   .   .
      84                       18
             .   .   .   .   .
     92                       19
             .   .   .   .   .
   100                       20
             .   .   .   .   .
   110                       21
             .   .   .   .   .
   120                       22
             .   .   .   .   .
   130                       23
             .   .   .   .   .
   140                       24
             .   .   .   .   .
   150                       25
             .   .   .   .   .
   160                       26
             .   .   .   .   .
   170                       27
             .   .   .   .   .
   180                       28
             .   .   .   .   .
   190                       29
             .   .   .   .   .
   200                       30
             .   .   .   .   .
   300                       30
             .   .   .   .   .
 1,000                      30
             .   .   .   .   .
10,000                     30
             .   .   .   .   .
100,000                   30
             .   .   .   .   .
1 million                 30

Hamilton�s scheme of shareholder representation, had it been applied to all corporate ownership, not just a national bank, or banks in general, would have prevented the corporate raiders of the past half century who deindustrialized the USA, broke unions, looted pension funds, closed factories and relocated them overseas. This financial malfeasance has destroyed the USA working class--which now suffers declining life expectancy--and is now robbing the middle class of a better future It is not just fair, but vitally important, to infer that Hamilton was strongly opposed to anything like the "financial engineering" and "private equity" of today. And he certainly would have rejected Milton Friedman's, Michael C. Jensen's and William H. Meckling's ideas of maximizing profit and shareholder value.

Note also that Hamilton's scheme is clearly unfavorable to increasing concentrations of economic wealth. Holding 12 shares gives the holder only one half the number of votes. Holding 36 shares gives only one third. Holding over 100 shares gives only one fifth. Holding 1,000 shares gives the holder only 30 votes, or a mere 3/100 the number of votes. Holding 10,000 shares or one million shares, and the holder still gets only 30 votes. The more vampire-wealth held, the less weight each share of vampire-wealth is allowed. Here we see Hamilton carefully balancing the republican need for economic equality with the need to avoid alienating owners of wealth, even vampire-wealth.

What does a concentration of wealth look like today? Here is a partial list of companies that have been "acquired" and "reorganized" by just one private equity group, Bain Capital: AMC Theatres, Artisan Entertainment, Aspen Education Group, Brookstone, Burger King, Burlington Coat Factory, Canada Goose, DIC Entertainment, Domino's Pizza, DoubleClick, Dunkin' Donuts, D&M Holdings, Guitar Center, Hospital Corporation of America (HCA), iHeartMedia, Sealy, Sports Authority, Staples, Toys "R" Us, Warner Music Group, Fingerhut, The Weather Channel, and Apple Leisure Group, which includes AMResorts and Apple Vacations. This list is copied directly from the Wikipedia entry on Bain.

If you want to see more such concentrations of wealth, just follow the links for each outfit listed on Wikipedia's list of Largest private equity firms by PE capital raised.

Throughout the reports, Hamilton explicitly wrote that the primary goal was to promote the general welfare and the public interest. In discussing the problem of a bank�s directors, officers or stockholders who may fear that �an extension of capital� to new enterprises may cause �a diminution of profits,� Hamilton wrote that �the interest and accommodation of the public� must be held superior �to the interest, real or imagined, of the Stockholders.� Hamilton expounded on this particular concern a year later, in Section VII of his December 1791 Report to Congress on the Subject of Manufactures, where he wrote

"Experience teaches that men are often so much governed by what they are accustomed to see and practice, that the simplest and most obvious improvements, in the most ordinary occupations, are adopted with hesitation, reluctance, and by slow gradations�.

The apprehension of failing in new attempts is, perhaps, a more serious impediment. There are dispositions apt to be attracted by the mere novelty of an undertaking; but these are not always the best calculated to give it success. To this it is of importance that the confidence of cautious, sagacious capitalists, both citizens and foreigners, should be excited. And to inspire this description of persons with confidence, it is essential that they should be made to see in any project which is new�and for that reason alone, if for no other, precarious�the prospect of such a degree of countenance and support from government, as may be capable of overcoming the obstacles inseparable from first experiments.

Hamilton's discussion of the need for active government measures to counteract the natural inclination to do business "the way we've always done it," is followed in the Second Report on Credit by what can only be considered another broadside against the idea of shareholder value:
�It is true, that unless the [interests of the shareholders] be consulted, there can be no bank (in the sense at least in which institutions of this kind, worthy of confidence, can be established in this Country) but it does not follow, that this is alone to be consulted, or that it even ought to be paramount. Public utility is more truly the object of public Banks, than private profit. And it is the business of Government, to constitute them on such principles, that while the latter [private profit] will result, in a sufficient degree, to afford competent motives to engage in them, the former [public interest] be not made subservient to it.� [Emphasis added.]
Elsewhere, Hamilton wrote that ��such a Bank is not a mere matter of private property, but a political machine of the greatest importance to the State.�

While there obviously must be enough profit in establishing and operating a bank to make it an attractive business enterprise, at the same time Hamilton saw that the maintenance of republican principles of government requires that all concentrations of wealth and economic power be rendered subservient to the general welfare.  To ensure the public interest was always paramount, Hamilton prescribed another safeguard on the proposed bank's power:
V. The capacity of the corporation to hold real and personal estate shall be limited to fifteen millions of Dollars, including the amount of its capital, or original stock. The lands and tenements, which it shall be permitted to hold, shall be only such as shall be requisite for the immediate accommodation of the institution....
In Hamilton's plan, the bank would be allowed to only own such property as it required to actually operate as a bank. It would not be allowed to own other banks and other companies. It would not be allowed to own its own trading portfolio. Imagine how this restriction would have prevented the rise to power of the new robber barons like the late deficit scold Peter Peterson, or 2012 Republican presidential nominee Mitt Romney. It would have prevented Wall Street's domination of the rest of the economy. And, the USA political scene would undoubtedly look much different, and much more beneficent, than it does today.

It should also be noted--given that many doctrinaire leftists and many historically ignorant progressives condemn Hamilton for having designed a capitalist system that favors the rich and the powerful--that the first example in USA history of a corporation stepping far beyond its charter was the Manhattan Company, which was formed in 1799 for the stated purpose of building a fresh water supply system for the southern part of Manhattan Island. This was a ruse: the company quickly became a highly profitable competitor to the Bank of New York, which had been established in June 1784 by a group led by Hamilton. The Manhttan Co. merged with Chase National Bank in 1955 to form the Chase Manhattan Bank, which in turn acquired J.P. Morgan Bank in 2000 to become the current JPMorgan Chase & Co. The animating spirit behind the deceitful Manhattan Company was Aaron Burr, who murdered Hamilton in a contrived duel in 1804.

Another safeguard Hamilton imposed was the mandated rotation of bank directors and officers to prevent the emergence of cabals and old boy networks. �The argument in favour of the principle of rotation is," Hamilton wrote, that it lessens "the danger of combinations among the Directors [intended] to make the institution subservient to party views, or to the accommodation... of any particular set of men..."
�When it is considered, that the Directors of a Bank are not elected by the great body of the community, in which a diversity of views will naturally prevail, at different conjunctures, but by a small and select class of men, among whom it is far more easy to cultivate a steady adherence to the same persons and objects; and that those Directors have it in their power so immediately to conciliate, by obliging the most influential of this class, it is easy to perceive, that without the principle of rotation, changes in that body can rarely happen, but as a concession which they may themselves think it expedient to make to public opinion.�
Finally, in accord with his argument that a bank was much more important as an instrument of public good, than merely as a machine of private profit. Hamilton argued that the government should be able to thoroughly inspect the financial posture and strength of the bank at any time of the government's choosing.
�There is one thing, however, which the Government owes to itself and to the community; at least to all that part of it, who are not Stockholders; which is to reserve to itself a right of ascertaining, as often as may be necessary, the state of the Bank, excluding however all pretension to controul� If the paper of a Bank is to be permitted to insinuate itself into all the revenues and receipts of a country; if it is even to be tolerated as the substitute for gold and silver, in all the transactions of business, it becomes in either view a national concern of the first magnitude. As such the ordinary rules of prudence require, that the Government should possess the means of ascertaining, whenever it thinks fit, that so delicate a trust is executed with fidelity and care. [Emphasis added.]
It may be objected that these restraints on corporate power and safeguards of the public interest were devised by Hamilton only for the central bank he proposed, and not for all corporations. It should therefore be understood that capitalism, at this time, did not really exist. At least, the word as used today did not come into general usage until after the 1850s and the publication of Marx's Capital. More specifically, the corporate form of economic organization did not become widespread until after general acts of incorporation began to be adopted by state legislatures in the 1820s. And, Hamilton's plan for the Bank of the United States was informed by his experience in creating and directing the Bank of New York. More to the point, was the example of the Bank of North America (chartered by the Pennsylvania legislature in 1781), which had been ��all but crippled� during the 1790s because a few powerful borrowers had monopolized its funds,� according to Henry Hansmann & Mariana Pargendler in the January 2014 Yale Law Journal

But the crucial historical consideration is that Hamilton was building a nation and a republican form of government from scratch, with only the historical examples of monarchical, oligarchic, and despotic forms of economic organization as possible guides. From these historical examples the only certain desideratum was that economic concentrations of wealth must be restrained. The history of Great Britain and especially the British East India Company, was a constant reminder of how economic power can arrogate political power to itself, and use political power to further expand its holdings of vampire-wealth.  At the same time, Hamilton realized that  concentrations of wealth must not be so fettered and repressed that the quickening impulse of the profit motive is stifled. Thus the unusual scheme of shareholder representation, which would undoubtedly be anathema to today's captains of pirated industry such as Sheldon Adelson, Eddie Lampert, Robert Mercer, Nelson Peltz, and T. Boone Pickens. All the poison pill provisions of the 1980s and 1990s were unable to stop the looting and asset stripping of USA industrial companies. Imagine how much easier it would have been to protect industry from predatory finance if the most votes a shareholder could ever have was 30, no matter how many shares of a company's stock they amassed.

This again shows that the modern doctrine of shareholder value is directly contrary to the design for republican political economy, and inimical to the continuation of republicanism. The second great tragedy of American history, after slavery, is that capitalism has replaced republicanism. Yet there remains echoes of republican ideals in the body politics: this is why the majority of Americans feel things are going the wrong way, and resent the emergence of a new a new ruling class of corporatist oligarchs.

In great irony is that as economic power becomes increasingly concentrated, the USA is becoming less, not more, capitalistic: According to the 2018 Corporate Longevity Forecast, by Innosight, the average age of USA companies is now half what it was in the 1970s. In 1964, the average age of companies listed on the Standard and Poors 500 stock market index was 33 years. This average age had fallen to 24 years in 2016, and is now projected to fall to just 12 years within the next decade.

And, from another study, in 2013:

 
From Will capex come back? UBS Investment Research, by Andrew Cates, January, 10, 2013, page 3.



Graph is from Ian Hathaway and Robert E. Litan, Declining Business Dynamism in the United States: A Look at States and Metros, The Brookings Institute, May 2014.

USA capitalism has evolved in a direction that would have outraged Alexander Hamilton. Just look at Kohlberg Kravis and Roberts, the leveraged buyout corporate raiders that have poured tens of millions of dollars into the Republican Party and movement conservatism in the past three decades. KKR's $25 billion purchase of RJR Nabisco in 1989 was flagged by at least one Wall Street insider as being far above fair market value; the transaction only made sense when consideration was given to the opportunities provided for laundering of dirty money by RJR Nabisco's high-volume sales of consumer goods. This is a crucial point most Marxists and others on the left miss: USA capitalism in the past half century has fallen under the control of a ruling class that, in outlook, intent, and effect, is basically criminal, not entrepreneurial. This ruling class is not a legacy of Hamilton's program for nation building; it is, rather, a throwback to the slave-trading, opium-peddling ruling merchant class of the British empire, which has never discarded its innate hatred for the idea of republican self-government.

Thursday, May 10, 2018

Checking on climate change predictions


Because I am spending so much time on the subject of climate change these days, I am having trouble understanding the bigger picture at times. Let me explain.

For years I have been astonished by the ability of the charlatans to muddy the waters on what is really pretty simple science. I have claimed that it should be clear to anyone who stayed awake during 7th-grade science class. But as I worked through the problem of illustrating the CO2 molecule a few weeks back, it dawned on me that there are almost aesthetic reasons why CO2 is such a remarkably stable molecule. And the reason I know that is because I stayed awake for the first week of high school chemistry when bonds were described. My 7th-grade claim is bogus�10th grade Chemistry!

So I asked Tony, "Even though Chemistry is taught in almost all high schools, what percentage of the population signed up to take Chemistry and actually understood what a covalent bond is when it was taught?" His guess was less than 10% of the population. Whatever the number, it is probably small and nowhere nearly as large as the percentage of people who cannot really pass judgement on climate change because they lack the scientific background and are forced to trust someone else's credentials. I believe that this is a subject where the facts should speak for themselves�that there is probably nothing in human history that has been more validated in so many ways as climate change. But it probably should be asked, "How confident should one be in just presenting the facts when less than 10% of the population is equipped to process just the facts?"

Which leads to question 2: "If and when the world gets serious about doing something meaningful about climate change, what part of the population will be required to do the heavy lifting?" The truth is, replacing the fire-based infrastructure with something more sophisticated will require mostly highly skilled people. What good does it do to rile up people who are probably not qualified to do anything more than cheer (at best)?


Climate Change 10-Year Check-Up


by ROBERT HUNZIKER, MAY 7, 2018

Ten years ago Kevin J. Surace delivered a fascinating TED talk entitled �Worst Case Climate Change.�

Based upon credits at the end of his speech, data for his talk came from the following sources:

� Fred Pearce, With Speed and Violence: Why Scientists Fear
� Tipping Points in Climate Change (Beacon Press, 2007)
� John D. Cox, Climate Crash Abrupt Climate Change and What It
� Means for Our Future (John Henry Press imprint of the National Academies Press, 2005)
� Reviewed by Dr. Anthony Strawa atmospheric scientists, NASA.

Mr. Surace�s brilliant summation Worst Case Climate Change, as of 2008, was done for purposes: (1) exposure, (2) making the issue controversial, and (3) to make people think about the prospects. He did not intend to suggest the worst case would happen, rather encouraging people to learn more and act accordingly.

Ten years later, how does Surace�s TED talk hold up?

Unfortunately explained herein his �Worst Case� scenario hasn�t missed a beat, and maybe worse than expected. Sorrowfully, head held downward, his thesis holds up!

Still, there�s a hidden trick found within this subject matter. Worst Case Climate Change consists of negative changes not seen in everyday life, other than climate scientists, and therefore it is difficult, if not impossible, for ordinary people to understand the gravity of this situation. After all, who lives in Antarctica or the Arctic or in the ocean? Nobody. Meantime, by the time the brutal aftereffects become evident, it�s already �lights out!�

Surace�s approach to the subject utilized Intergovernmental Panel on Climate Change (IPCC) data for comparison/contrasting purposes. As referenced therein, more or less, the IPCC used a linear or straight-line methodology. However, by way of contrast, in the real world �discontinuities� (non-linear) are common throughout climate history and throughout nature, thus suggesting the IPCC model too conservative in approach and in conclusion.

Carbon Dioxide- CO2

Surace starts his talk with a remarkable statistic that seems simple enough, but it is filled with a powerful haunting message, i.e., CO2 or carbon dioxide in the atmosphere under 300 ppm for 40,000 years. But, all of a sudden, within the geologically short time frame of 200 years, it is �now at 387 ppm,� circa 2008, thus insinuating that the Goldilocks climate� not too hot, not too cold� throughout human history may be a thing of the past.

That fact alone is consummately important and warrants attention beyond the stating of mere numbers because each 1-ppm molecular increase of CO2 has bigger and bigger and bigger impact on global warming, similar to adding individual layers of woolen blankets onto somnolence. Enough blankets added and even an enormous gargantuan perfectly round-faced fading-blue grimacing planet sweats bullets.

Whereas as of May 2, 2018 the Scripps Institution of Oceanography Mauna Loa Observatory/Hawaii reading for atmospheric CO2 registers 408.90 ppm, still climbing higher and higher, year-by-year, thus adding heavier, thicker woolen blankets to an increasingly achromatic Mother Earth. The logical upshot is a hotter and hotter much hotter planet, kinda like a yet-to-be-born baby Venus (864F), where the atmosphere is so thick with CO2 that it can be cut with a knife, which would melt in an instant.

Atlantic Meridional Overturning Circulation

Thereafter, Surace segues into one of the most far-reaching, yet least understood, aspects of climate change/global warming, the North Atlantic Flow, an ocean conveyor belt named Atlantic Meridional Overturning Circulation (AMOC) that keeps Europe warm. Without AMOC grinding away, moving unbelievable tonnage of water throughout the world�s seas, Europe would be ice-covered.

According to Surace�s research, thousands of years ago, within only 10 years, the conveyor belt (AMOC) shut down very quickly. Results: Europe cooled by 5F within a several years and glaciers overwhelmed Northern Europe.

Per his speech, according to NASA, since 1990, North Flow is down 30% and South Flow down 50%. Regrettably, IPCC Models did not mention this climacteric risk factor. Once again, demonstrating inherent weaknesses with IPCC overall methodology.

Here�s what recent up-to-date science, as of 2018, has discovered about the Atlantic Meridional Overturning Circulation (AMOC): �The AMOC is in a very weakened state�the most anemic it has been in the last 1,600 years.� (Source: Andrea Thompson, Slow-Motion Ocean: Atlantic�s Circulation Is Weakest in 1,600 Years, Scientific American, April 11, 2018)

Therein lay the world�s greatest paradox as global warming impacts worldwide temps whilst possibly casting a cold spell over Europe. Which side wins?

Arctic

Headed northward, Surace set sights on the Arctic, showing a graph of actual Arctic melt vs. IPCC models. Whereas IPCC models suggested the Arctic would melt by 2100, NASA satellite data thru 2007 indicated that the North Pole ice melt was falling off a cliff, way below IPCC projections, and could complete �by 2017, or so.�

As of August 17, 2017 U.S. Naval Research Lab measurements of Arctic sea ice over a 30-day period �shows that the multi-year sea ice has now virtually disappeared.� (Source: Storms over Arctic Ocean, Arctic News, August 19, 2017)

Multi-year ice was formed over thousands of years and constitutes, or rather constituted, the infrastructure for the North Pole.

This means the Arctic has lost its infrastructure. It�s gone. Yes, ice still forms during wintertime with no sunlight 24/7, but it is thin and almost meaningless, which can lead to untold horrific consequences of radical climate change throughout the Northern Hemisphere, throwing humanity into a tailspin, a tizzy of despair, social unrest, and starvation. The reasons are multifold and too broad to tackle herein, but the consequences down the road are brutal!

Greenland

Regarding Greenland, the giant ice sheet experiences loss of ice every year, ever since 1980. It is melting, and the especially bad news is the rate of melt is accelerating. As of 2008, cumulative acre-feet loss equals 3-4 billion acre-feet, an amount that would cover the entire US with two feet of ice.

As for an updated (2017) analysis of Greenland ice melt: Previously �Glaciologists were already fully occupied trying to track and forecast the surge in glacial calving. Now, they are striving to understand the complex feedbacks that are speeding up surface melting.� (Source: Eli Kintisch, The Great Greenland Meltdown, Science, February 23, 2017)

The big melt-off is accelerating because of unseasonably warm summers as well as microbes and algae, soot and dust that blow from lower latitudes and darken the ice, collecting on the white, shiny Greenland ice, thus absorbing rather than reflecting solar energy.

Greenland is living up to, in fact beyond, Surace�s expectations from a decade ago. Nightmarishly, the big chunk of ice contains over 20 feet of sea level rise.

Antarctica

Speaking of �living up to expectations,� Antarctica is flat-out losing it, but first Surace�s comments of a decade ago: Larsen B ice shelf in Antarctica is an example of something happening much quicker than we thought. Within days in 2002, the large ice shelf crashed, splintering into the water. The ice shelf was 12,000 yrs old and 650 feet thick, 100 square miles.

The IPCC model suggested Larsen B would last thousands of years, but remarkably, it broke up and crashed in 3 short days. Trouble is: It�s the �cork� holding back land-based glacial ice. That cork is out of the bottle, which will accelerate Antarctica ice flow to the sea. Ouch!

Historically, as recently as 1979 Pine Island Ice Shelf and Thwaites Ice Shelf were status quo for decades, not much change. Then, things suddenly went haywire, changing very rapidly, to wit:

1995- Losing 70M-acre feet/yr
2006- Losing 220M-acre feet/yrly � an astounding annualized rate.

Notice the remarkable pick up in acceleration over 11 years. That�s bad news.

According to Surace, for perspective purposes, Pine Island and Thwaites have been in place millions of years, but are now (2008) melting and thinning at record pace. It they collapse, 6 feet sea level rise. Not only that, NASA spotted a weak underbelly in recent (2007-08) radar images.

Accordingly, in 2008, the British Antarctica Survey estimated: �Thwaites is in danger of imminent collapse.�

No collapse models were found in the IPCC model, as of 2008, only expecting slow melt over time. Unfortunately, behind Thwaites is the West Antarctica Ice Sheet, and if that collapses, sea levels up 18 feet.
IPCC Models, as of 2008, show nothing about this risk to such a vast extent.

Heavens to Betsy! Surace was conservative about Antarctica. July 12, 2017, the Larsen C Ice Shelf crashed, a trillion-ton iceberg, fundamentally changing the landscape of the Antarctic Peninsula. As a result, National Geographic will have to redraw the World Atlas.

The recent tally of ice shelf collapses:

1995- Larsen A Ice Shelf collapses
20o2- Larsen B Ice Shelf splinters and collapses
2017- Larsen C Ice Shelf falls apart

Problem is� the ice shelves, which extend over water, serve as giant buffers, holding back the flow of inland glaciers where the real serious ice flow originates, like a hockey goalie stopping pucks. Hopelessly, it must be late in the game, as Antarctica�s gone Full Monty without its goalie.

Paleoclimate Perspective

For a broader perspective, Surace segues to a discussion of the paleoclimate record, painting a most interesting picture of climate change over millennia:

1) 3M years ago: sea level was 75 feet higher than today with CO2 at 400 ppm and only 3 degrees warmer than 2008. The reason 75 feet higher back then, and not today with similar CO2 levels, it happened gradually, over centuries, not over decades, like today.

2) 20,000 yrs ago- 400 feet lower sea level and CO2 was 200 ppm.

Thereby proving that CO2 levels in the atmosphere directly impact sea levels.

The Amazon

Amazon Rain Patterns are changing as atmospheric warming shifts rain away from the Amazon. As a result, multiple droughts are taking a toll on overall growth. In point of fact, only 3-5 years of severe drought kills most trees.

For point of reference, Amazonian trees store 77B tons of CO2 which equals 20 yrs of manmade CO2. But, when trees die and during forest fires, CO2 is released back into the atmosphere. This is happening today (2008), but not factored into the IPCC model.

Here�s an Amazon update, as referenced in National Geographic: �In the time it takes to read this article, an area of Brazil�s rainforest larger than 200 football fields will have been destroyed. The market forces of globalization are invading the Amazon.�

Especially bad news as �the world�s lungs� take one hit after another. That wunderkind of nature experienced unprecedented back-to-back-to-back severe droughts, 2005, 2010, and 2016, unheard of throughout geologic history. This one fact alone is worthy of ringing the bell at the public square, �all hands on deck.�

Permafrost

Ancient permafrost stores tons and tons of methane in Siberia, but it is already releasing 50M tons per year equivalent to 1B tons of CO2. Sorrowfully, methane release is rapidly accelerating since average temps now run 32F. In fact, the entire Siberian region is on the verge of collapse. According to Surace, here�s the problem: If it all melted or collapsed, it would add 30F to average earth temps, scorching agricultural crops into blackened brittle stems.

IPCC models make no assumptions about this. But, according to Surace, it is already happening.

Here�s guessing that Surace would be shocked, knees folding under, by the current status of Arctic methane. Again, this is a non-populated area, and that�s a good thing, as it�s coming apart at the seams. For example, Russian scientists have already, as of 2018, discovered 7,000 Siberian pingos, mounds containing mucho methane. Vladimir Romanovsky, geophysist at University of Alaska, estimates there could be as many as 100,000 pingos across the Arctic permafrost.

Furthermore, Surace would likely drop to his knees upon hearing another latest: Recent measurements in Alaska show biological sources alone emitting 220M tons of GHG over a two-year time period, which is equivalent to all U.S. commercial emissions per annum. In short, the planet�s ecosystem is now competing with humans in GHG emissions, or in other words, if humans dropped dead, the planet will self-feed greenhouse gases into the atmosphere in an anomalous fashion, meaning not normal, not natural, incipient Runaway Global Warming. That news should take Surace down to his knees and prostrate him onto the ground.

Oceans

According to Surace, the oceans are changing dramatically, but that may be an understatement. For eons, the ocean served as a CO2 sink, but it has probably absorbed all it can. Since 1850 it has absorbed 130B tons of CO2 from humans. Nowadays, according to Surace, it�s more acidic and nearly maxed-out as carbon sink. According to him, over time, the ocean could become a source of CO2, similar to what�s happened on land in Alaska only recently. Once again, the IPCC models forget to calculate this threat.

An update, as of 2018, too much CO2, too much heat, and too much acidification in the oceans would require an additional 100-page article. It�s that bad!

Methane Clathrates at Bottom of Ocean

Surace discussed a paleoclimatic event 55M years ago, clathrates (containing frozen methane over the eons) broke open and ocean temps rose a few degrees, shattering clathrates over the following 10 years, as temps rose 18F very rapidly leading to mass extinction. That happened millions of years ago.

IPCC models do not include mention of clathrates.

As of 2018, Russian scientists in conjunction with Americans have identified massive quantities of methane releasing into the atmosphere in the Arctic, especially around the East Siberian Arctic Shelf where waters are only 50 metres deep.

The world�s foremost authority on the region, Dr. Natalia Shakova, stated: �As we showed in our articles, in the ESAS (East Siberian Arctic Shelf), in some places, subsea permafrost is reaching the thaw point. In other areas it could have reached this point already. And what can happen then? The most important consequence could be in terms of growing methane emissions� a linear trend becomes exponential. This edge between it being linear and becoming exponential is very fine and lies between frozen and thawed states of subsea permafrost. This is what we call the turning point�. Following the logic of our investigation and all the evidence that we accumulated so far, it makes me think that we are very near this point. And in this particular point, each year matters. This is the big difference between being on the linear trend where hundreds and thousands of years matter, and being on the exponential where each year matters.� (Source: Nature Communication Journal, Current Rates and Mechanisms of Subsea Permafrost Degradation in the East Siberian Arctic Shelf, Article No. 15872 June 22, 2017.

When Dr. Shakova mentions �exponential versus linear,� she references an astounding fact, to wit: Thirty (30) linear steps to the water cooler across the room would be equivalent, if 30 exponential steps, to circumnavigation of the planet. That�s exponential. That�s a nightmare scientists like Dr. Shakova live with.

Stern Report for British Government

Finally, Sucrea mentions the Stern Report to the British government, assessing the worst case. Assuming worst-case scenario, here�s their list of outcomes ten years ago:
� Sea rise 15-20 feet in few decades
� Underwater Florida, NYC, Monterey, London, Toky0
� 1B people displaced, sick and/or dead
� Massive water and food shortages
� $20T worldwide damages
� Food and water wars.

Amazingly and fascinatingly, all of the climate events mentioned above occur where people do not live, do not see, and do not sense the danger. But, significantly, they are happening right now. more

Sunday, May 6, 2018

Flat earth believers


Tony sent me this link. He probably thought I needed help getting going. He understands the "value" I put on folks who spread pure nonsense. Actually, the flat earth crowd doesn't even enter my radar because unless they are employed setting airline routes, it hardly matters what folks believe about the shape of the earth.

However, the sort of "thinking" that goes into this quite-common behavior is downright dangerous. And it is sadly not confined to the lunatic fringe. As pointed out below, this sort of thinking is quite common in the social sciences�Michel Foucault claimed that what the author wrote was nearly irrelevant compared to the power relationships that impacted his writing. Pontius Pilate had a French philosopher asking "what is truth?" I went through a period where the ability to quote Foucault was a sign of intellectual seriousness.

Because I had formulated my facts-as-building-blocks approach to epistemology before I had ever heard of Foucault, I pretty much dismissed him as another typical Leisure Class thinker. If you live in a world where being right or wrong is not terribly important, you tend to skip over learning the skills an aero engineer must learn to design something that punches a 550 mph hole in the air and the biggest problems for the passengers are crying babies and bad food. Anyway, Michel, there are many writers who are scrupulously concerned about being absolutely accurate�some even go so far as to provide illustrations.

This is just another way to avoid doing homework.  IF you know the science or other important facts, coming to a conclusion about the accuracy of another's testimony is routine. If you do not have the background to evaluate the information, you must fall back on judging the speakers based on his or her dress, hairdo, necktie, sexual history, political party, etc. Or the power arrangements.

That's the problem with climate science. The folks collecting data on the front lines have no doubts about whether climate change is real. The rest of us must either evaluate the data from second-hand sources with the required scientific (high school chemistry) background or else from random decisions based on sociology, rumor, or slander. In this way, the climate doubters have managed to stalemate an incredibly important public debate even though the facts are overwhelmingly against them.


I watched an entire Flat Earth Convention for my research � here�s what I learnt


Harry T Dyer, May 2, 2018
Lecturer in Education, University of East Anglia

Speakers recently flew in from around (or perhaps, across?) the earth for a three-day event held in Birmingham: the UK�s first ever public Flat Earth Convention. It was well attended, and wasn�t just three days of speeches and YouTube clips (though, granted, there was a lot of this). There was also a lot of team-building, networking, debating, workshops � and scientific experiments.

Yes, flat earthers do seem to place a lot of emphasis and priority on scientific methods and, in particular, on observable facts. The weekend in no small part revolved around discussing and debating science, with lots of time spent running, planning, and reporting on the latest set of flat earth experiments and models. Indeed, as one presenter noted early on, flat earthers try to �look for multiple, verifiable evidence� and advised attendees to �always do your own research and accept you might be wrong�.

While flat earthers seem to trust and support scientific methods, what they don�t trust is scientists, and the established relationships between �power� and �knowledge�. This relationship between power and knowledge has long been theorised by sociologists. By exploring this relationship, we can begin to understand why there is a swelling resurgence of flat earthers.

Power and knowledge

Let me begin by stating quickly that I�m not really interested in discussing if the earth if flat or not (for the record, I�m happily a �globe earther�) � and I�m not seeking to mock or denigrate this community. What�s important here is not necessarily whether they believe the earth is flat or not, but instead what their resurgence and public conventions tell us about science and knowledge in the 21st century.

Multiple competing models were suggested throughout the weekend, including �classic� flat earth, domes, ice walls, diamonds, puddles with multiple worlds inside, and even the earth as the inside of a giant cosmic egg. The level of discussion however often did not revolve around the models on offer, but on broader issues of attitudes towards existing structures of knowledge, and the institutions that supported and presented these models.The cosmic egg theory explained.

Flat earthers are not the first group to be sceptical of existing power structures and their tight grasps on knowledge. This viewpoint is somewhat typified by the work of Michel Foucault, a famous and heavily influential 20th century philosopher who made a career of studying those on the fringes of society to understand what they could tell us about everyday life.

He is well known, amongst many other things, for looking at the close relationship between power and knowledge. He suggested that knowledge is created and used in a way that reinforces the claims to legitimacy of those in power. At the same time, those in power control what is considered to be correct and incorrect knowledge. According to Foucault, there is therefore an intimate and interlinked relationship between power and knowledge.

At the time Foucault was writing on the topic, the control of power and knowledge had moved away from religious institutions, who previously held a very singular hold over knowledge and morality, and was instead beginning to move towards a network of scientific institutions, media monopolies, legal courts, and bureaucratised governments. Foucault argued that these institutions work to maintain their claims to legitimacy by controlling knowledge.

Ahead of the curve?

In the 21st century, we are witnessing another important shift in both power and knowledge due to factors that include the increased public platforms afforded by social media. Knowledge is no longer centrally controlled and � as has been pointed out in the wake of Brexit � the age of the expert may be passing. Now, everybody has the power to create and share content. When Michael Gove, a leading proponent of Brexit, proclaimed: �I think the people of this country have had enough of experts�, it would seem that he, in many ways, meant it.

It is also clear that we�re seeing increased polarisation in society, as we continue to drift away from agreed singular narratives and move into camps around shared interests. Recent PEW research suggests, for example, that 80% of voters who backed Hillary Clinton in the 2016 US presidential election � and 81% of Trump voters � believe the two sides are unable to agree on basic facts.

Despite early claims, from as far back as HG Well�s �world brain� essays in 1936, that a worldwide shared resource of knowledge such as the internet would create peace, harmony and a common interpretation of reality, it appears that quite the opposite has happened. With the increased voice afforded by social media, knowledge has been increasingly decentralised, and competing narratives have emerged.

This was something of a reoccurring theme throughout the weekend, and was especially apparent when four flat earthers debated three physics PhD students. A particular point of contention occurred when one of the physicists pleaded with the audience to avoid trusting YouTube and bloggers. The audience and the panel of flat earthers took exception to this, noting that �now we�ve got the internet and mass communication � we�re not reliant on what the mainstream are telling us in newspapers, we can decide for ourselves�. It was readily apparent that the flat earthers were keen to separate knowledge from scientific institutions.

Flat earthers and populism

At the same time as scientific claims to knowledge and power are being undermined, some power structures are decoupling themselves from scientific knowledge, moving towards a kind of populist politics that are increasingly sceptical of knowledge. This has, in recent years, manifested itself in extreme ways � through such things as public politicians showing support for Pizzagate or Trump�s suggestions that Ted Cruz�s father shot JFK.

But this can also be seen in more subtle and insidious form in the way in which Brexit, for example, was campaigned for in terms of gut feelings and emotions rather than expert statistics and predictions. Science is increasingly facing problems with its ability to communicate ideas publicly, a problem that politicians, and flat earthers, are able to circumvent with moves towards populism.

Again, this theme occurred throughout the weekend. Flat earthers were encouraged to trust �poetry, freedom, passion, vividness, creativity, and yearning� over the more clinical regurgitation of established theories and facts. Attendees were told that �hope changes everything�, and warned against blindly trusting what they were told. This is a narrative echoed by some of the celebrities who have used their power to back flat earth beliefs, such as the musician B.O.B, who tweeted: �Don�t believe what I say, research what I say.�

In many ways, a public meeting of flat earthers is a product and sign of our time; a reflection of our increasing distrust in scientific institutions, and the moves by power-holding institutions towards populism and emotions. In much the same way that Foucault reflected on what social outcasts could reveal about our social systems, there is a lot flat earthers can reveal to us about the current changing relationship between power and knowledge. And judging by the success of this UK event � and the large conventions planned in Canada and America this year � it seems the flat earth is going to be around for a while yet. more

Saturday, May 5, 2018

410 ppm and counting


It's getting hard to keep up.

It required 146 years for the CO2 concentration in the atmosphere to go from 275 ppm to 290 (1750-1896) when Arrhenius first postulated that CO2 would change the climate. Recently, the 400 ppm mark was breached in 2013 and has now passed 410 ppm only five years later. This is truly a scary development. Climate scientists talk about tipping points where melting permafrost and other disasters will trigger runaway climate change. The question now becomes, have we already passed one or more of those tipping points?

We probably won't find out any useful information on this topic from the main media outlets. They are much more interested in the decade-old claims of a fading porn star against a president who wasn't even a politician when it happened. Got to love those folks specializing in trivialities.

CARBON DIOXIDE IN THE ATMOSPHERE HITS RECORD HIGH MONTHLY AVERAGE


ROB MONROE, MAY 2, 2018

April monthly average exceeds 410 parts per million for the first time in recorded history

The average concentration of carbon dioxide in the atmosphere was 410.31 parts per million (ppm) for the month of April, according to the Keeling Curve measurement series made at the Mauna Loa Observatory in Hawaii.

This marks the first time in the history of the Mauna Loa record that a monthly average has exceeded 410 parts per million. This also represents a 30-percent increase in carbon dioxide concentration in the global atmosphere since the Keeling Curve began in 1958. In March, Scripps Institution of Oceanography at the University of California San Diego observed the 60th anniversary of the data series, the first measurements of which were 315 ppm.

The Keeling Curve draws its name from its creator and the shape of its dataset, a seasonally seesawing trend of steadily rising CO2 readings that exceeded 400 ppm in air for the first time in human history in 2013. Prior to the onset of the Industrial Revolution, CO2 levels had fluctuated over the millennia but had never exceeded 300 ppm at any point in the last 800,000 years.

Carbon dioxide is called a greenhouse gas for its ability to trap solar radiation and keep it confined to the atmosphere. It is the most prevalent among all greenhouse gases produced by human activities, attributed to the burning of fossil fuels.

The Scripps CO2 Program is directed by geochemist Ralph Keeling,the son of the late Keeling Curve creator Charles David Keeling

�We keep burning fossil fuels. Carbon dioxide keeps building up in the air,� said Ralph Keeling. �It�s essentially as simple as that.� more

Pakistani city breaks April record with day of 50C heat


Citizens consider fleeing Nawabshah in fear of what summer might bring

Haroon Janjua in Islamabad, 2 May 2018

A Pakistani city has set a global record temperature for the month of April, with the mercury rising to more than 50C on Monday, prompting fears that people might leave to escape even higher temperatures when summer sets in.

The southern city of Nawabshah recorded a high of 50.2C on Monday.

�We are worried that the extreme heat started too early this summer, and are planning to migrate to other cities if the situation remains the same,� one city resident, Ismail Domki, said.

The director general of the Pakistan Meteorological Department, Ghulam Rasool, said: �We have issued forecasts about the extreme heat in Sindh province but were not expecting a world record in the month of April.�

Domki said the official response had been inadequate. �There is no response from the government, at least 24 cases of heatstroke were reported on April 30 and five of them were serious cases with people losing consciousness,� he said, adding that these were just known cases at the government-run hospital.

A report in the Dawn newspaper said the unbearable heat forced people to remain indoors throughout the day. Roads and markets looked deserted and business activities came to a halt. The worst sufferers of heatstroke were labourers and motorcyclists.

Recent summers across the Middle East and south Asia have produced sweltering heat above 50C, melting roads, overwhelming power infrastructure and raising serious questions about the liveability of settlements from Iraq to India.

Last year, Pakistan was ranked among the top 10 most vulnerable countries to climate change. A severe heatwave in the southern port city of Karachi in 2015 left more than 1,200 dead, with more than 40,000 people suffering from heatstroke. more

Thursday, May 3, 2018

Hudson on debt cancellation


Michael Hudson has a new book coming out. It addresses the most fundamental economic question of the age�what to do about the unpayable debt. The reason I am so interested in this subject is that IF the austerity geeks get their way, there will not be the money needed to build the solar future.

Coming from the rural Midwest, I have heard these debates for a long time�even one that Hudson highlights below�his contention the Christianity was about progressive economics. The King James translators had it right when they wrote the Lord's Prayer as "forgive us our debts, as we forgive our debtors." Most Protestants have wimped out and changed this radical notion to "forgive us our trespasses, as we forgive those who trespass against us." Last I heard, the Presbyterians still use the older, more accurate version. Considering the implications, I am not sure that reopening that wound is wise since it is as old as Christianity itself. The religion of slaves become the religion of the Roman Emperor in only 300 years so it is not especially surprising that the interests of the creditor classes would come to dominate�even so far as to rewrite the freaking Lord's Prayer. (Where are the fundamentalists when you need them ;-)

And of course, this is Hudson so he gets it right. I wish he would take up the subject of "odious" debt (and maybe he does in his new book). The way I see it, because we can no longer operate our societies with technologies that produce CO2, all investments in these technologies should be written off as "odious." Actually I don't give a damn what reasoning is used so long as there is a serious global debt restructuring.



Bronze Age Redux: On Debt, Clean Slates and What the Ancients Have to Teach U


MICHAEL HUDSON � HAROLD CROOKS, MAY 1, 2018

One of the most compelling sequences in the Oscar-winning Inside Job, Charles Ferguson�s indictment of Wall Street�s role in the 2008 global financial meltdown, involved not the banker culprits but their supporting cast. These were the Ivy League accomplices. Ferguson mightily skewered these economists for the cover they gave the sub-prime Hamptons dwelling wise guys whose rescue turned out to be a pretext for one of the largest reverse-Robin Hood wealth transfers in history. Though for the foreseeable future they enjoy their tenured posts, control prestigious academic journals and continue to prey on the unformed minds of students, the speculative financial implosion has shaken confidence in the economics academy. And through those cracks (to borrow from Leonard Cohen) shards of light are getting in. Economists once on the academic fringes � in university outposts like the University of Missouri Kansas City and Bard�s Levy Institute � are being looked to not only for understanding how to prevent bankers from setting the economy on fire again, but on how to build a social system that works for the majority.

Among the most brilliant of these heterodox economists is Michael Hudson. Coming to New York City in the 60s to study under a renowned classical music conductor, Michael switched to economics when he became beguiled by an accidental acquaintance with what he saw as the aesthetical flows inter-connecting natural and financial cycles and public debt. His biography contains elements of an epic novel: growing up the son of a jailed Trotskyist labor leader in whose Chicago home he met Rosa Luxembourg�s and Karl Liebknecht�s colleagues; serving as a young balance of payments analyst for David Rockefeller whose Chase Manhattan Bank was calculating how much interest the bank could extract on loans to South American countries; touring America on Vatican-sponsored economics lectures; turning after a riot at a UN Third World debt meeting in Mexico to the study of ancient debt cancellation practices through Harvard�s Babylonian Archeology department; authoring many books about finance from Super Imperialism: The Economic Strategy of American Empire [1972] to J is For Junk Economics: A Guide to Reality in an Age of Deception [2017]; and lately, among many other ventures, commuting from his Queens home to lecture at Peking University in Beijing where he hopes to convince the Chinese to avoid the debt-fuelled economic model off which Western big bankers feast and apply lessons he and his colleagues have learned about the debt relief practices of the ancient civilizations of Mesopotamia.

I talked to Michael about his forthcoming book Forgive Them Their Debts: Lending, Forfeiture and Redemption that comes with an astounding re-reading of the Bible and the true meaning of the life and persecution of Jesus. Based on scholarly breakthroughs in decoding ancient languages, it places a debt cancellation message inherited from Babylonian times at the center of Mosaic law and the Jewish Bible. And when it comes to Jesus, his message is revealed to be a social justice message. Through the lens of this reinterpretation, Jesus was actually an activist advocating for debt cancellation. He died not for the sins of the people but for their debts.

My interview began with a question about the subject of his new book. I knew Michael has a following well beyond the professional classes. Some years ago on exiting the fancy Park Avenue apartment we borrowed to interview him for our film Surviving Progress [co-directed with Mathieu Roy], I was astonished to witness the Puerto Rican door man rush up to shake his hand and thank him for his appearances on progressive cable shows. It made me wonder if his book re-interpreting the Bible was designed to reach a working class audience, possibly even Trump voters. � Harold Crooks.

Michael: Not at all. I originally wrote the book Forgive Them Their Debts: Lending, Forfeiture and Redemption, From Bronze Age Finance to the Jubilee Year as an extension of the archeological and the Assyriology work that I�ve been doing at Harvard University at the Peabody Museum since 1984. I originally called the book Bronze Age Finance, because I wanted to undertake a study of the origin of debt, and how societies dealt with debt that grew so large that it forced populations into debt bondage, and dependency �.

And I wanted to study the background of Clean Slates, debt cancellations, and I found out that they begin in Sumer around 2500 BC. Every new ruler, when they would take the throne, would start his reign by canceling the debts. In Sumer, the word for that was amargi, in Babylonian the word during Hammurabi�s dynasty was andurarum. Then, after translating many of these debt cancellations from Hammurabi�s dynasty, and from neighboring near Eastern countries,I realized that this affected the interpretation of the Bible because the Jubilee year in the Bible, Hebrew deror, is a cognate to Babylonian andurarum, and the Jubilee year was word-for-word exactly the same debt cancellation and freeing of the bond servants and restoration of land that you had occur for 1,000 years in the Near East, and was still occurring in the first millennium BC.

So my aim was not at a religious audience. The initial writing of the book was for economic historians and archeologists and Assyriologists who were part of the group at Harvard that has done the five volumes that I�ve co-edited on the origins of economic practices in the ancient Near East.

Tribes: That said, somewhere in the back of your mind, were you anticipating that what you discovered in antiquity would have application in the present?

Michael: Well, from the very beginning, after working on Wall Street, I realized something that should be mathematically obvious. The debts now today are too large to be paid without bankrupting society and polarizing it,in much the way that has occurred again and again in history. It occurred in Rome, it occurred earlier in Sparta. You have a constant historical movement here. So my focus primarily was to trace the history of debt cancellations.

What I realized is that when Luke 4 reports the first speech of Jesus, when he goes to the temple and gives his first sermon, he unrolls the Scroll of Isaiah, and says he has come to proclaim the Jubilee year �. The word he used, and that Isaiah used, the deror, was this Babylonian, Near Eastern long tradition that was common throughout the whole Near East.

Now most of the Biblical translations miss this point. They were translated in the 17th and 16th century, when people didn�t know cuneiform, so they had no idea what these words meant and what the background of the Jubilee year was. And 50 years ago, there was almost a universal idea that the Jubilee year was something idealistic, utopian, and could never actually be applied in practice. But we know that in Babylonia, Sumer and Near Eastern regions, it was applied in practice. Not only do we have the royal proclamations, we have the lawsuits by debtors saying �This creditor didn�t forgive me the debt,� and the judgments for that. Each member of Hammurabi�s dynasty after him ending up with this great grandson Ammi-Saduqa had more and more detailed anderarum acts, debt cancellations, to close all the loopholes that creditors tried to resort to.

So what Jesus was referring to was a very tangible fight. In his time, this was the fight throughout Greece, it was the fight throughout the whole ancient world � the fight to promote debt cancellation. The Dead Sea Scrolls show this. For instance, Melchizedek 12 is a huge midrash of all of the Biblical citations of the Jubilee year, tying them together. And we now understand that the Dead Sea Scrolls were not a sectarian Essene product, but they were basically the library of the Temple of Jerusalem, that was sent and put in these caves for safekeeping during the civil wars.

So what Jesus was referring to was what was the class war between creditors and debtors that swept throughout the whole period, including Rome itself. This has not been clear to most people who think they�re taking a literal version of the Bible. It�s very funny that the people who call themselves fundamentalist Christians will have dioramas of dinosaurs and human beings all sharing the same landscape, literally. But what they ignore is, if you take the Bible literally, it�s the fight in almost all of the early books of the Old Testament, the Jewish Bible, all about the fight over indebtedness and debt cancellation.

Tribes: That�s extraordinary. Elsewhere you�ve made the point that it is important to understand the Bible was rewritten after the Jews returned from their Babylonian exile. What�s the significance of this in terms of your reading of Old Testament texts?

Michael: I wouldn�t say that the Bible was re-written after the exile, it was really codified and put together after the exile. This has been the normal view of the Bible for the last 60 or 70 years in Biblical scholarship, that realizes when it was put together and under what circumstances. It was put together logically to weave the tradition of debt cancellation into the whole Jewish history. To make it really the history of how the debt crises had disrupted Jewish and Judean/Israelite society for hundreds of years.

Tribes: What are the textual sources that give you confidence in your reading of the Bible?

Michael: The first textual sources are the Laws of Hammurabi, the debt cancellations of the Sumerians, Enmetena, Urukagina � In my book I go epoch by epoch. Sumerian, the neo-Sumerian, Ur III period, the intermediate period, the Babylonian period, right down to the Egyptian Rosetta Stone, which is a similar debt cancellation. There are hundreds of documented official debt cancellations in great detail. These were inscribed publicly on bricks in the temples, or on statues that were put in the temples, or buried in the temple foundations. The central act of a ruler coming to power in the Near East was a debt amnesty. Forgiveness of money or taxes or duties owed to the palace, and debts owed to the palace. And by extension, debts owed to royal collectors, and to creditors in general, most of whom had some relationship to the palace.

Business debts were not forgiven. The debts that were forgiven were personal debts, agrarian debts, and the idea was to liberate the bond-servants so that they could be available to perform the corv�e labor, which was the main kind of taxation in the Bronze Age, and serve in the army. If you were a debtor and you were a bond-servant to a creditor, you wouldn�t be available for corv�e labor. You wouldbe working (for) the creditor, you wouldn�t be available for the army. And you have this very clearly in Sparta in Greece, for instance, by the third century BC. The ranks of the army were depleted because the citizenry had lost its land tenure, and that�s what led kings Aegis and Cleomenes and Nabis to push for a debt cancellation to restore landownership.

So what we find is something that occurs not only in the Biblical lands, but in Greece, Rome, Egypt, the rest of the Near East. It was universal at that time, and there�s been almost no economic history of this. Either in the Bronze Age, or in Classical Antiquity. When I began to write this book in the 1980s, it was generally believed that these debt cancellations were simply utopian statements as I said. There was no idea that they were actually enforced. Theidea seemed radical at the time. But now,after the five volumes that my group has published through Harvard, now these ideas are generally accepted by Assyriologists and archeologists. But they haven�t spread to the public at large yet, because of cognitive dissonance. People can�t believe that the debts actually were canceled. But this is what revolutions were all about in Greece and Rome for hundreds of years.

Tribes: And I�m assuming that there was sufficiently sophisticated knowledge of economics to explain that Clean slates, debt cancellation, Jubilees, were more than a self-serving interest of the nobility or the aristocracy, the monarch to have soldiers to go to war, that there was some larger purpose than merely freeing up peasants so that they could serve in military campaigns, that there was some knowledge that this was necessary for a sustainable economic system.

Michael: Bronze Age rulers in Sumer and Babylonia never explained the reason or logic behind their acts. Later, Egyptians in the first century BC explained to Roman historians what the logic was. But the early Egyptian Pharaohs � nobody would explain. All we have are the records, �Here is the ruling.� There was no abstract economic logic as such, there was no discussion of abstract principles. That only occurred in the first millennium BC, and it�s in the first millennium that Egyptians explained it to the Roman historians � that if you didn�t cancel the debts,you wouldn�t have anyone to fight in the army or perform the corv�e labor that Egypt and other countries depended on to build their basic infrastructure.

The reason there wasn�t an abstract discussion was that there was no Milton Friedman or Margaret Thatcher to advocate a libertarian free-enterprise economy. Their economy was what seemed natural to them, and it never occurred to them to develop economics and an individualistic explanation of things. It simply seemed this is how a fair world works.

Tribes: Did promulgating these Clean Slates that you�re describing occur in relatively primitive societies of their era, or even in more complex ones?

Michael: I don�t like the word primitive. The societies were complex. The palatial economies of Sumer, Babylonia, other Near Eastern regions, Egypt, were by no means primitive. We�re not talking about tribal societies basically, or anthropological type societies, we�re talking about complex urban cultures, and really the origins of Western civilization are to be found not in Greece and Rome, or even in Judah and Israel, but in Sumer and Babylonia, where almost all of the techniques of economic enterprise, the charging of interest, weights and measures, monetary coinage begin.

Tribes: You�ve touched on this, but just so that I have it, whose debts got canceled in antiquity, and by whom were they canceled?

Michael: You begin with by whom they were canceled. Rulers canceled the debts. And it was very easy for them to do that without opposition, because in the beginning most of the debts that were owed to the palace itself � both in fees for services the palace provided, or the temple provided (the temple was part of the palace economy), or for land rent by sharecroppers,or for the provision of water and agricultural services to the land. So most of the debts were owed to the rulers themselves, or to their palace (tax) collectors who gradually became independent creditors by the wealth they made. So they were essentially debts owed to wealthy people who could afford not to collect it.

If the debts had been collected, then the rulers would be undercutting their ability to obtain the labor of debtors � the agrarian debtors �for as I said, corv�e services and for the army. The debts that were canceled were personal, agrarian debts. They were called barley debts. Silver debts, among merchants, were not canceled. Business debts were not canceled. Only debts by subsistence farmers were canceled so that they would not be subjected to bondage to the creditors, and so they would not forfeit their lands to monopolists who wanted to acquire the land and would essentially disenfranchise the population.

Tribes: Okay, so moving forward to the time of the Jesus figure and the New Testament, was debt forgiveness still an important practice under the Romans?

Michael: No. The Romans were the first society not to cancel the debts, and there was civil war over that. A century of civil war from 133 BC, when the Gracchi Brothers were killed for supporting the indebted population, to 29 BC when Augustus was crowned. There was a civil war where the advocates of debt cancellation were put to death. Just as Cleomenes in Sparta, in the late third century, was put to death, and Agis, his predecessor earlier in the third century BC, were put to death for advocating debt cancellation. So there was three centuries of constant civil war over this, and ultimately the creditors won, largely by political assassination of the advocates of debt cancellation, who almost all came from the upper class. They were upper class reformers, they were not lower-class particularly. They were the scholars, just as Jesus was a rabbi.

So there was essentially not only personal assassination of advocates of debtors interests, advocates of pro-debtor laws and debt cancellation, but Sparta as a backer of oligarchy would attack democracies that sought to cancel the debts.

Tribes: You touched on that very effectively, and we used you talking about this time period, (in our documentary film) Surviving Progress. But I�ve seen it suggested that some scholars dispute the fact that debt cancellation could�ve been a reality at the time of Jesus, that the idea of a Jubilee makes no sense, because if debts could be canceled, who would lend money?

Michael: Well that�s the big fallacy. Most debts did not occur from lending money. It�s easier today to figure if you have a debt, you must have borrowed it. But three quarters of the debts in Babylonia, for instance �where we have records because they were on clay, cuneiform records that were baked and have survived �most debts were simply unpaid bills. The debts were unpaid taxes, unpaid debts, unpaid rent, and unpaid obligation for services that had been supplied. There was no initial lending of money, necessarily. Maybe one quarter of the circumstances were that.

So the people who say lenders wouldn�t have lent miss the point that it�s like if somebody at the end of the spring doesn�t have enough money to pay the income tax that�s due. Nobody�s lent them this money, but the tax is due. So it�s an obligation that mounted up in the normal course of life, but they�ve fallen into arrears on it. It�s a payment arrears, not the result of a loan, except in some cases.

Tribes: Fascinating. This leads you to what for many readers of this interview and I assume of your book will come as an astonishing assertion: that Jesus was crucified for his views on debt. Who exactly in your reading of the Christ story are the powerful creditors that were so threatened by Jesus?

Michael: Well, just as the Bible said, they described the Pharisees as having greed and representing what they called the greedy class. And of course the main opponent of Jesus was Hillel. And it was Hillel that devised the Prosbul, which was an addendum to a debt note whereby the borrower would promise not to avail himself of his rights under the Jubilee year. So essentially the debtor would waive the rights under the Jubilee year, so that the creditor could collect even if the Jubilee year were done. And Jesus quite correctly said, �Look, every single book of the Bible from Kings onwards to Isaiah and the books of the prophet, this is the center of Mosaic law.�

And the Bible, the Mosaic law, realized that by the first millennium, the kings not only in Israel and Judea, but in Persia and elsewhere, were basically representing the ruling class, the wealthy class. And the Bible is sort of unique in historical documents for showing that most of the kings were not good kings. The whole Jewish Bible is about bad kings. So Judaism took the debt cancellation out of the hand of kings, where it had been in the Near East, and put in the very center of their religion. In Leviticus 25, again and again the prophets would say, �We�ve freed you from bondage, and if you�re going to maintain Judaism, you have to respect the debt cancellation.� And the Biblical prophets warned, if you don�t cancel the debts, you�re going to be destroyed by Assyria, or by Babylonia. They blamed the capture and destruction of Judea and Israel on the fact that they had veered away from the law of God and did not cancel the debts.

Tribes: Did Jesus have any defenders amongst the elite?

Michael: He must have. I think many of his followers were from the elite. We know that he must have, because there was a whole Melchizedek sect, apparently, there was a whole group we know from the Dead Sea Scrolls that all of these different groups were producing these midrashes, which are collections of the Biblical statements of debt cancellation. It was very widespread as part of the war between debtors and creditors that was occurring throughout the entire region.

Tribes: So this would�ve been, in terms of today�s parlance, this would�ve been the kind of liberal, progressive elite of the era?

Michael: Yes. But a progressive elite that also had grounding in traditional Judaism, saying, �Wait a minute, this is what the center of our Bible is all about.�

Tribes: If Jesus was an activist, as you argue, was he part of a social movement to cancel debts?

Michael: Well, he was obviously trying to create his own social movement. We don�t know if there were other social movements there, and we don�t really know much about the Jubilee year in between the return of the exiles to Judah and the time of Jesus. They didn�t write on clay tablets, they wrote on perishable materials, so we don�t have the family wills, legal records, dowries and all the credit transactions that we have in the ancient Near East, where they wrote on clay.

Tribes: When does the concept of a general debt cancellation disappear historically?

Michael: I guess in about the second or third century AD it was downplayed in the Bible. After Jesus died, you had, first of all, St Paul taking over, and basically Christianity was created by one of the most evil men in history, the anti-Semite Cyril of Alexandria. He gained power by murdering his rivals, the Nestorians, by convening a congress of bishops and killing his enemies. Cyril was really the Stalin figure of Christianity, killing everybody who was an enemy, organizing pogroms against the Jews in Alexandria where he ruled.

It was Cyril that really introduced into Christianity the idea of the Trinity. That�s what the whole fight was about in the third and fourth centuries AD. Was Jesus a human, was he a god? And essentially you had the Isis-Osiris figure from Egypt, put into Christianity. The Christians were still trying to drive the Jews out of Christianity. And Cyril knew the one thing the Jewish population was not going to accept would be the Isis figure and the Mariolatry that the church became. And as soon as the Christian church became the establishment rulership church, the last thing it wanted in the West was debt cancellation.

You had a continuation of the original Christianity in the Greek Orthodox Church, or the Orthodox Church, all the way through Byzantium. And in my book And Forgive Them Their Debts, the last two chapters are on the Byzantine echo of the original debt cancellations, where one ruler after another would cancel the debts. And they gave very explicit reason for it: if we don�t cancel the debts, we�re not going to be able to field an army, we�re not going to be able to collect taxes, because the oligarchy is going to take over. They were very explicit, with references to the Bible, references to the jubilee year. So you had Christianity survive in the Byzantine Empire. But in the West it ended in Margaret Thatcher. And Father Coughlin.

Tribes: He was the �30s figure here in the States.

Michael: Yes: anti-Semite, right-wing, pro-war, anti-labor. So the irony is that you have the people who call themselves fundamentalist Christians being against everything that Jesus was fighting for, and everything that original Christianity was all about.

Tribes: Has any modern society declared a Jubilee without a revolt of the creditor class?

Michael: Yes. There was a wonderful debt cancellation, the major debt cancellation of the modern era in 1947 and �48: the German monetary reform, called the German economic miracle. The Allies canceled all German debts, except for debts owed by employers to their employees for the previous month, and except for minimum bank balances. It was easy for the Allies to cancel the debts, because in Germany most of the debts were owed to people who had been Nazis, and you were canceling the debts owed to the Nazis, who were the creditors at that time. Freeing Germany from debt was the root of its economic miracle. So that is the prime example of a debt cancellation in modern times that worked.

Tribes: Okay, now we�re coming up into the present. One in three Americans are reported to have a debt that�s been turned over to a private collection agency, and the ACLU found cases of court warrants being issued over almost every kind of consumer and medical debt. What forms of debt relief would you propose in the current circumstances?

Michael: Well the guiding principle is that debts that can�t be paid, won�t be. Default rates are rising, many people simply can�t pay their debt, unless they lose their home, unless they lose their job, or in some cases now, unless they lose their freedom and are put into debtor�s prisons down South. As you privatize prisons, they need someone else to put in the prisons besides black people. Debtors are the people who are keeping the privatized prison business going these days.

So basically, you need, every few years, a start-over.

Tribes: Absent a world war or some such catastrophe, what might it take for debt cancellations to be adopted today as economic policy, given the power of Wall Street and the creditor class?

Michael: The first way to achieve this is by simply showing how debt tends to grow at compound interest, that it�s growing and growing, and all of the growth in American GDP, Gross Domestic Product, since 2008 has been to the financial sector to pay for the rising debt overhead. The tragedy was that when President Obama took office, he broke every promise that he�d made. He�d promised to write down the junk mortgage debts to the amount that could be paid. �

Tribes: That�s the subprime-

Michael: Yes. He essentially appointed Wall Street lobbyists to the key positions, as I�ve outlined in my book Killing The Host. The result is that the debts were not written down when they could�ve been. That means that the debts have been growing and growing and growing, and we�re in a chronic crisis, there has been no recovery. We are still in the 2008 debt crisis, and it cannot be resolved until the debts are written down. There�ll just be more and more poverty and more and more economic polarization.

Tribes: We�re very close to the end, Michael. Practically speaking, if for some unbelievably sci-fi circumstances, you found yourself as the President of the United States, in terms of debt cancellation, what would you focus on in terms of leading us back to a kind of sustainable future?

Michael: The issue of debt cannot be segregated from the overall organization of society.

Now, just imagine if instead of banks and their bondholders holding student loans and profiting from it, if the government had made these loans, the government could easily forgive them, because it would be forgiving money owed to itself. But when you privatize not only education, but also student loans, that is what has led to the student loan crisis. It was completely unnecessary. But Joe Biden, as senator for the credit card companies centered in Delaware, pushed it through, saying, �We�ve got to make education a profit center for the banks. Our purpose is not to educate the population, it�s to create a situation where in order to get a job, in order to get a union card, they have to go into a lifetime of debt to the banks that cannot be wiped out by bankruptcy.� That�s the Democratic Party policy. And it�s what�s tearing the country apart.

And it�s unnecessary, it�s Thatcherism. So Obama was really the American Margaret Thatcher in pushing forth this privatization. To do it, he realized you have to put in place a huge prison system, which you also privatize to give himself another constituency, especially in the southern states. I don�t think Americans have realized that it doesn�t have to be this way. There was an alternative, and it was spelled out throughout the 19th century by nearly all the classical economists. The alternative has worked before for thousands of years in history. That�s why I wrote the history of the ancient Near Eastern and Judaic economies.

Tribes: Here�s a question drawn from this morning�s news, I got it right out of the Times. Steve Bannon is quoted as saying the following: �The new politics is not left versus right, it�s globalist versus nationalist.� Comment?

Michael: I think he�s quite right. The globalists are the neoliberals. They want to prevent any government from having the power to check their own oligarchic power. This is the same fight that occurred in Greece and Rome and Babylonia. For the last 5,000 years you�ve had a fight by people who want to be wealthy, breaking free of taxes, breaking free of regulations, and privatizing. They want to privatize what normally would be the public sector. And just as in antiquity, today�s neoliberals use violence. They call themselves free marketers, but they realize that you cannot have neoliberalism unless you�re willing to murder and assassinate everyone who promotes an alternative. That�s why the first thing that the Chicago Boys did in Chile, after the murder of President Allende.

Tribes: That�s Milton Friedman?

Michael: Yes. Friedman�s gang closed every university economics department, except for the Catholic University that used the Chicago textbooks. That was followed by a decade of political assassination throughout Latin America, leading to the oligarchy in Brazil that has just put its presidential candidate Lula in jail. So you�re having the neoliberals use violence essentially to privatize, to turn the whole world economy into Margaret Thatcher�s England. A privatized set of monopolies by an elite class, essentially reducing the population at large to something very close to neo-feudalism.

Tribes: When I read the Steve Bannon quote to you, you immediately said he�s right, but I assume you wouldn�t go so far as his program to, in his words, �deconstruct the administrative state;� you wouldn�t be on board with that?

Michael: No. You asked what is the fight about? The fight is whether the state will be taken over, essentially to be an extension of Wall Street if you do not have government planning. Every economy is planned. Ever since the Neolithic (era), you�ve had to have (a form of) planning. If you don�t have a public authority doing the planning, then the financial authority becomes the planners. So globalism is in the financial interest �Wall Street and the City of London, doing the planning, not governments. They will do the planning in their own interest. So neoliberalism is the fight of finance to subdue society at large,and to make the bankers and creditors today in the position that the landlords were under feudalism.

Tribes: John Maynard Keynes famously quipped about policy makers being slaves to defunct economic theories. If orthodox economics is bankrupt, and our politics are slaves to defunct economic theories, where are we too look today for schools of economic thought with more to offer?

Michael: I think classical economic thought, from Adam Smith culminating in Marx, thelast great political economist in the classical British/French tradition, discussed all the problems we have. The fight between finance capital and industrial capital is discussed in Volume 3 of Marx�s Capital. People imagine that we�re in industrial capitalism, but we�re really not. Industrial corporations have been taken over and financialized, run for financial gains, not for profit.

So the problem is now not simply the exploitation of wage labor. It�s that the financial system tries to operate without labor at all. It tries to depopulate instead of build up the population. It tends to impoverish the population instead of making money on a growing internal market. So an understanding of the distinction between what the 19th century classical economists hoped would be industrial capitalism and the tragedy of the finance capitalism that�s emerged since World War I, if people are aware of that, essentially that�s the best guide to the future.

That�s what I described in my book Killing The Host, and I�ve tried to provide a basic vocabulary in J Is For Junk Economics. If you have a vocabulary that can pierce through the euphemisms that you get in the mass media for economics, a vocabulary itself will organize your thoughts into a logical way of coping. So in addition to my book And Forgive Them Their Debts, these other two books are what I have to say about how to structure an economy.

Tribes: So it comes down to empowering people with a vocabulary that pierces what?

Michael: That pierces the fog of the euphemism of the mass media discourse that make it appear as if when GDP goes up, everybody is getting rich. When all the growth in GDP is only for the 1%, only for the financial sector, and the 99% are more and more impoverished.

Tribes: So one illustration of what you�re talking about in terms of the difference between finance and industrial capitalism would be explained by how such a huge proportion of available capital in our society today is going into stock buy-backs, for instance?

Michael: 92% of corporate revenue in the last five years has gone either into stock buy-backs or higher dividend payouts. That means only 8% has gone into new investment to expand production or employ more labor. So the financial business plan is one of asset stripping and shrinkage, not growth.

Nobody in the 19th century imagined that industrial capitalism would evolve along these self-destructive lines. They all believed that the most technologically efficient system would win out in a kind of Darwinian or Spencerian struggle of the fittest. But instead, you�ve had a covert, parasitic financial counter-revolution. The rentier class �land rent, monopoly rent, and high finance � have fought back and created a fallacious vocabulary whose objective is to deceive the population into thinking that giving more money to the wealthy 1% will trickle down to the 99%, instead of seeing this 1% income as extractive, not productive.

Tribes: I�ve been reading a lot recently about the dissolution of the nation-state in the face of these forces of globalization and financialization. Given that the nation-state is associated with the most prosperous and egalitarian periods in modern history, in terms of income and wealth distribution et cetera, et cetera, � under what circumstances do you imagine that finance capital can be overthrown?

Michael: It can only be overthrown democratically. It can�t be overthrown by force, because finance capital in control of the state has a monopoly on force. It can only be achieved, probably in one country after another, by having policies and essentially an understanding of what a viable economic constitution would be. And to realize that politics is basically economics. And that the alternative to government and the nation-state is Wall Street and the financial interest in the City of England and Frankfurt. The question is, who do you want to run the economy? The 1% and the financial sector, or the 99% through politics? The fight has to be in the political sphere, because there�s no other sphere that the financial interests cannot crush you on.

Tribes: Good. Okay, thanks, Michael.

Michael: Thank you. more

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