Assault for a Battery

Dependence on “foreign oil” has been a political hot button for years, even though oil doesn’t carry a passport, and petroleum is a generally fungible product that is priced based on global factors, hardly within the control of any one country. Picture a Texas oil billionaire offering his commodity to his fellow Americans for far less than the global rate out of a notion of patriotic zeal. Yeah, since that’s not happening, it might be more useful to imagine all of the world’s oil being pumped into a vast blended global bathtub, from which all oil is purchased. Increased demand anywhere in the world pushes the global price upwards. This bathtub metaphor is possible because oil reserves are so dispersed, from Texas to Brazil, from Canada to the Middle East, from Russia to the North Sea.

But there is another commodity is that not so widely dispersed, one whose qualities of relative compact efficiency will, unless or until we find an alternative solution soon, create some new “commodity dictators” because supplies are so concentrated in one particular region. As the need to store electricity rises – from solar panels on a roof to hybrid and direct electrical cars – it is clear that those who control lithium have power to abuse. But before we explore some serious issues in connection with this increasingly precious metal, it is worthwhile looking at the other common batteries available and why lithium ion batteries are such an improvement.

Nickel metal-hydride (NiMH) and nickel-cadmium rechargeable batteries have been around for a long time. Most of the batteries you buy at the store for your portable electronics fall into this category. Since cadmium is pretty toxic, that type of battery is not particularly good for the environment, and most battery providers no longer use that metal in their products. Lead-acid batteries (the kind most folks have in their cars) are way too large and heavy for most larger storage issues. NiMH batteries are cheap, and for one-off uses like powering a flashlight, they work well. When they are used in bulk, as in a hybrid car, they are sensitive to over-charging (but a computer can control that), can develop battery “memory” that reduces their storage power much more rapidly than their lithium ion counterparts and simply are larger and weigh more (a huge disadvantage in cars). In short, lithium ion is just that much better.

But unlike oil reserves, which are spread all over the earth, so far, the production of lithium is concentrated in a very small area. Back in December of 2006, a researcher at Meridian International Researcher, William Tahil, wrote a paper (The Trouble with Lithium), raising an alarm: “There simply isn’t enough cheap lithium to go around, he argued, and 80% of the world’s accessible reserves are located in the so-called ‘Lithium Triangle’ of the Chilean, Argentine, and Bolivian Andes (pictured above). ‘If the world was to exchange oil for Li-ion based battery propulsion,’ Tahil wrote, ‘South America would become the new Middle East. Bolivia would become far more of a focus of world attention than Saudi Arabia ever was.’ Even then, we would run out of lithium long before we’d finished electrifying our cars.” FastCompany.com, June 30^th.

Is this an extreme and unlikely scenario? After all, Chile and Argentina are fairly open societies and really have no material barriers to trade, whether with the U.S. or otherwise. True enough, except that the bulk of the lithium sits in the Bolivian Andes, and “Bolivia’s president Evo Morales [pictured above] is no friend of the U.S., however; he pals around with Venezuela’s Hugo Chavez and Iranian president Mahmoud Ahmadinejad. He once expelled the U.S. ambassador and likes to end speeches with the rallying cry, ‘Death to the Yankees!’” FastCompany.com.

There are some alternative sources (China, Afghanistan and Kazakhstan) that may grow more important in time… and may explain our lingering efforts in Afghanistan a bit more: “Afghanistan may also be rich in lithium if reports of a trillion dollars in mineral wealth are accurate. But America’s relationship with president Hamid Karzai is complicated, to say the least… [And] Kazakhstan is a virtual autocracy ruled for 20 years by the opposition-less President Nursultan Nazarbayev.” FastCompany. Hmmm… doesn’t look particularly warm and fuzzy for the United States, and since China hangs on to its precious mineral resources and the other two central Asian countries noted are hardly models of stability, the coming years could prove particularly politically (and militarily?) interesting. Maybe science will reduce our dependence on foreign lithium.

I’m Peter Dekom, and I agree with that philosopher/SNL character, Rosanna Rosanna-Danna... "It's always something... If it's not one thing, it's another."

Two-ition

As public education in the United States is facing the greatest crisis in decades – recession-driven underfunding that is cutting teachers, programs, and repair budgets – the private school alternative is drifting farther and farther away from “possible” for most Americans. As job loss remains high, I know of many families who have had to inform their children that they are going to have to leave their chi chi world of private school for the often less-desirable public alternative. In some cases even in better schools in major urban venues, once well-heeled high school (er… prep school) students are learning new words, like “pocket check,” in which a tough guy (often with gang affiliation) relieves the nascent student of the cash in that “new” kid’s pocket.

But if there were money in the former-preppy’ pocket, since he/she probably were forced back to a public school system, there’s probably not too much cash to remove. With too many public districts in a severe downward spiral, private school is still out of reach for most, and despite the recession, their tuition is still rising well beyond the inflation rate. In the last decade, the average cost of a private primary or secondary education has exploded by a whopping 79%. “Right now, the cost of a private school education averages out to $21,695 per year, [a] princely sum is roughly 44% of the annual income of the average American household.” DailyFinance.com, June 22^nd. Even if a family could afford the rate, add in more than one child, and the double or triple, etc. cost makes college look cheap.

The extreme example is the country’s priciest: Riverdale Country School in New York, with a $40,450 annual cost, higher than seven of the Ivy League’s tuition rates, blows even Harvard’s $33,696 off the map. It’s a great school with wonderful facilities and an excellent reputation, but hey! The larger, more expensive cities in the United States, places like Washington, D.C., San Francisco, Los Angeles and New York, have rates well above the national average. “Riverdale may lead the pack in the tuition game, but it's only slightly ahead of the competition. Across the country, many top schools charge more than $30,000 per year. In New York, the median cost of tuition for senior year at a private school is $35,475. Even the Blue Man Group, famous for its playful shows, is dead serious when it comes to charging parents: A year of kindergarten at the Blue School founded by its members costs a whopping $29,820.” DailyFinance.com

Why the accelerating costs? It may be nothing more than a case of supply and demand as so many public schools no longer provide the required academic background needed for the highly competitive race to college. While charter schools are public school surrogates, the prep schools and academies still offer solid educational values for ambitious parents who know that the track to college starts early. For many, not getting onto the private school path – where admission standards are rising fast – early in the game generally means that a lateral transfer to a private prep school later in life becomes almost impossible. Students who began “private” earlier have already filled the virtually all the available slots, and many of those seeking transfer are often simply kids who are relocating to a new city… who have already begun their schooling in the private school system. How many of us know of parents of two and three-year-olds sweating bullets that their child is not getting into the right private school, sitting on waiting lists years before the first pre-school or kindergarten class?

I’m Peter Dekom, and that we have to struggle to find a place to educate our children, that so many don’t even have the slightest ability to make the sacrifice to place their kids in good schools, is one of the greatest modern betrayals of our American values.

Space Cadets Out on a Junk-It

There’s still lots of space in outer space, but if you happen to be cruising by Earth, you might bump into a couple of things in the old hood. Oh, the stuff we launched in the 1950s has long since burned up in a fiery descent through the atmosphere, but there are tons of space junk (in addition to the crappy television shows being beamed down from geosynchronous orbit) floating around up there. Most of the articles circling earth will eventually succumb to the Earth’s gravity and will get pulled through our atmosphere, many literally vaporizing by the time the debris hits the surface. But not all.

“A new battery of studies followed as NASA, NORAD and others attempted to better understand exactly what the environment [around Earth] was like. Every one of these studies adjusted the number of pieces of debris in this critical mass zone upward. In 1981,… it was placed at 5,000 objects, but a new battery of detectors in the Ground-based Electro-Optical Deep Space Surveillance system quickly found new objects within its resolution. By the late 1990s it was thought tha t the majority of 28,000 launched objects had already decayed and about 8,500 remained in orbit. By 2005 this had been adjusted upward to 13,000 objects, and a 2006 study raised this to 19,000 as a result of an ASAT test and a satellite collision. In 2011, NASA said 22,000 different objects were being tracked….

“The first major space debris collision was on 10 February 2009... The deactivated 950 kilograms (2,100 lb) Kosmos 2251 and an operational 560 kilograms (1,200 lb) Iridium 33 collided 500 miles (800 km) over northern Siberia. The relative speed of impact was about 11.7 kilometers per second (7.3 mi/s), or approximately 42,120 kilometers per hour (26,170 mph). Both satellites were destroyed and the collision scattered considerable debris, which poses an elevated risk to spacecraft. The collision created a debris cloud, although accurate estimates of the number of pieces of debris is not yet available.” Wikipedia. Small pits on manned orbiters suggest that space debris is everywhere (there are actually an estimated 500,000 “things” floating up there from the size of a marble on up), and for the larger chunks, the shields built into the relevant vehicles aren’t strong enough; the satellites have move to avoid contact.

NASA is acutely aware of the risks that falling space junk poses for all of us, constantly tracking the decay of space objects making the turn, predicting places of impact and preparing for the damage. Their Website tells us more: “Spacecraft that reenter from either orbital decay or controlled entry usually break up at altitudes between 84-72 km due to aerodynamic forces causing the allowable structural loads to be exceeded. The nominal breakup altitude for spacecraft is considered to be 78 km. Large, sturdy, and dense satellites generally break up at lower altitudes. Solar arrays frequently break off the spacecraft parent body around 90-95 km because of the aerodynamic forces causing the allowable bending moment to be exceeded at the array/spacecraft attach point.

“After spacecraft (or parent body) breakup, individual components, or fragments, will continue to lose altitude and receive aeroheating until they either demise or survive to impact the Earth. Spacecraft components that are made of low melting-point materials (e.g., aluminum) will generally demise at higher altitudes than objects that are made of materials with higher melting points (e.g., titanium, stainless steel, beryllium, carbon-carbon). If an object is contained inside of a housing, the housing must demise before the internal object receives significant heating. Many objects have a very high melt temperature such that they do not demise, but some can be so light (e.g., tungsten shims) that they impact with a very low velocity. As a result, the kinetic energy at impact is sometimes under 15 J [light impact], a threshold below which th e probability of human casualty is very low.” Weeeeeeee! 15 J, eh, well, I’m not scared!

The Agency is also working with creating new materials for satellites to make them more likely to burn up on their return to the planet and to create smaller footprints to minimize risk to operating space vehicles: “Orbital debris protection involves conducting hyper-velocity impact measurements to assess the risk presented by orbital debris to operating spacecraft and developing new materials and new designs to provide better protection from the environment with less weight penalty. The data from this work provides the link between the environment defined by the models and the risk presented by that environment to operating spacecraft and provides recommendations on design and operations procedures to reduce the risk as required.”

On June 28^th, Mission Control called The International Space Station around 7:30 EDT and ordered the six astronauts (two Americans, three Russians and one Japanese) “into their Soyuz capsules… Controllers wanted to keep them safe from a piece of orbiting debris. The unidentified object was predicted to pass within 800 or so feet… Even a small piece of junk can do big damage. The astronauts could have undocked in their two Soyuz capsules and returned to Earth, in case of a serious collision.” Washington Post, June 26^th. They got the all-clear about a half hour later. It all happened at 29,000 miles per hour… and the object cleared by 1,100 feet. I’m thinking a movie here… we could call it Crash. Oh, Paul Haggis already did that one… the grounded kind?

I’m Peter Dekom, and if we accumulated that much junk in about 60 years, what’s it gonna look like in 2100?!

Enveloping the Push

In the past decade or so, lawyers and accountants have faced a new pressure from clients: “don’t just tell us what the statutes, regulations and cases mean, tell us how to circumvent the law for our individual benefit. Oh, and please don’t give us that ‘it’s bad for the nation crap if the interpretation you want gets implemented.’” Bottom line: the most highly paid legal practitioners and CPAs make those big bucks by finding and expanding loopholes. Every time a statute passes that attempts to regulate business – to the extent the lobbyists have failed to stop it or curtail it in the first place – while those same lobbyists are trying to reverse the earlier failure, a body of legal and accounting experts sets in to find a reason for courts to throw the law out or at least twist the application of that law to minimize any negative impacts on their corporate clients.

Mark Everson, former IRS Commissioner (2003-2007), wrote this in an Op-Ed for the June 18^th New York Times: “It will take decades to fully untangle the causes of the 2008 financial crisis, but as our economy fitfully heals, it would be prudent to ask whether lawyers and accountants offer the same protection against corporate misconduct that they once did... Three or four decades ago, investors and regulators could rely on these professionals to provide a check on corporate risk-taking. But over time, attorneys and auditors came to see their practices not as independent firms that strengthen the integrity of capitalism, but as businesses measured chiefly by the earnings of their partners…

“Lawyers and accountants who were once the proud pillars of our financial system have become the happy architects of its circumvention. Nowhere is this more the case than in the world of tax law. Companies (and wealthy individuals) pay handsomely for tax professionals not just to find the lines, but to push them ever outward.” General Electric, for example, has one of the most effective tax departments in the nation, when it comes to pushing the walls to benefit GE often at the expense of the underlying intention of the relevant statutory or regulatory provisions being contested. Big Wall Street law firms often generate $1000+ an hour billing rates for the same efforts towards circumvention.

Everson suggests that we open up to public scrutiny conversations and communications between lawyers and their corporate clients – literally narrowing the attorney-client privilege – when it comes to such forced interpretations, and eliminate compensation to in-house lawyers and financial executives which generates stock incentives and bonuses for favorable results in pushing the statutory interpretation envelope. Neither recommendation appears to have even the remotest chance of being implemented; both practices are so ingrained in our system that it is beyond doubtful that any legislature in the land would be successful in this effort.

There may be a secondary tact – finding resonance in the Sarbanes-Oxley Act (“SOX” – a federal law that applied more stringent obligations on corporate officers of public companies and their legal and accounting representatives) – of possible ethical restrictions combined with legal teeth. Under SOX, a lawyer/auditor representing a client who sees a serious legal violation is required to pursue getting that matter corrected within the client’s executive hierarchy, but failing that, must resign and inform the Securities and Exchange Commission that the resignation was motivated by a failed attempt to correct a SOX issue. While the lawyer/auditor doesn’t have to report the details (a concession to accountant/ attorney-client privilege), such a filing with the SEC would undoubtedly trigger a governmental investigation , looking for violations. Thus, where a lawyer or CPA were engaged to circumvent legislative intent, a comparable limitation and ethical proscription could at least moderate the effort to drill for loopholes.

In the end, this ability of rich individuals and corporations to engage accounting and legal experts to circumvent legislative intent is just further evidence of a system that clearly favors wealthy special interests at the expense of ordinary citizens. Every dollar of failed tax collection of necessity puts additional pressure on the remaining taxpayers who don’t have such resources and exacerbates our federal deficit. A highly polarized nation where special interests have created such a disparity over average citizenry literally fosters a political structure that begins to smack of unsustainability in the longer term. In short, the aggregation of such legal and accounting efforts creates two tiers of laws – one for the rich and another for everyone else – that truly undermines the ability of the United States to survive as an intact political nation.

I’m Peter Dekom, and it’s time for all of us to pull together for what’s best for the United States of America.

Honey, I Shrunk the Kids!

I taught marketing at the University of California, Berkeley (Haas School of Business) over three years. As I walked from parking lot or lunch spot to the business school (fortunately, heavily privately endowed), I often passed engineering, science and social science buildings. Berkeley is and may be (?) one of America’s leading universities, and with a presence near the Silicon Valley, has had a material impact on the quality of the engineering and innovation for which the Valley is so famous. But I watched as year by year, those neighboring structures showed their age, wear and tear, with no maintenance in sight. I was told that the massive dollars needed for “deferred maintenance” and technology upgrades just weren’t forthcoming by a stingy legislature seeking to balance a bloated California budget, filled with very high fringe benefit, retirement and medical costs negotiated by state workers.

But that was before the recession. Lawmakers, dealing with the same entitlements and collapsed revenues, began to cut the University of California system to the bone. In one strange turn of events, as the legislature’s cuts forced the closure of Berkeley’s varsity baseball program – the Bears were competitive! – arch rival Stanford University came to the rescue with a $9 million bailout of Berkeley’s team, a level of support that will keep that baseball rivalry around for years.

But the latest budget cuts are deep (among the deepest in the entire state), will have long term effects for the state which had one of the finest state university systems in the United States and may cause irreversible damage to local industry’s that literally grew and thrived because of the excellent research in their midst. The impact on job growth is horrific. “The state’s two systems [Universities of California and California State Universities] were each cut by $650 million, and they each could lose $100 million more if the state’s optimistic revenue expectations do not materialize. For both systems, the $650 million is roughly a 20 percent cut of operating money from the stat e… This fall, for the first time, the University of California will take in more money from student tuition than from state finances.” New York Times, July 8^th. Among states imposing budget cuts to their state colleges and universities, California is one of the most extreme.

Tuition increases, averaging 20% this year and 26% at the UC system last year, as well as cuts to scholarships have pushed many super-qualified students from middle income families (there are still scholarships for lower income family students) out the door and saddled others with debt that probably cannot be earned out in the impaired job market. But what’s worse, the essential values that these university systems have supported spectacularly for decades are being decimated: “Programs all over the state are being shuttered, star professors are leaving for colleges in other states, faculty positions are being left unfilled and class sizes are continuing to grow. While the state’s spending on the system is down to a level not seen since the late-1990s, the campuses enroll tens of thousands more students… Schools, meanwhile, are stepping up their efforts to recruit students from other states, using their higher tuition payments to help fill the coffers at the expense of California applicants.” NY Times.

And where more immediate jobs could be created in technical schools, the fed is cutting back aid in that space rather dramatically: “The administration has proposed a 20 percent reduction in its fiscal 2012 budget for career and technical education, to a little more than $1 billion, even as it seeks to increase overall education funding by 11 percent. The only real alternative to public schools for career training is profit-making colleges and trade schools, many of which have been harshly criticized for sending students deeply into debt without improving their job prospects… In European countries like Germany, Denmark and Switzerland, vocational programs have long been viable choices for a significant portion of teenagers. Yet in the United States, technical courses have often been viewed as the ugly stepchildren of education, backwaters for underachieving or difficult students.” New York Times, July 9^th. Unfortunately, states are following the federal lead in these cutbacks.

We are acutely aware of the massive investment being made in places like India and China in education, most particularly at the university level. They are even recruiting professors out of U.S. universities, even as many private American institutions of higher learning (including the Ivies) open branches of their universities in Asia and the Middle East. As we speak about deficit ceiling and even reduction, I wonder where Americans are going to have sufficient education and skills in the future to generate enough revenues to pay down that deficit.

I’m Peter Dekom, and if we think the damage imposed on us by the global economy is bad, what we are doing to ourselves is unforgivable.

Belly Up to the Bar

Technological capacities and socio-economic forces have been the defining vectors of history. Systemic change explains the rise and fall of nations even more than the historical figures who serve as the agents of that change. Could Western Europe have colonized the less-sophisticated indigenous peoples of the Americas without, as UCLA Professor Jared Diamond might say, “Guns, Germs and Steel”? But even on a constantly eroding basis, the micro changes in our social structures have an aggregating effect that can alter the entire value proposition of a powerful nation. I’d like to write about one small segment of that change, the need for legal representation in the United States, and how that reflects the bigger picture.

There was a time when parents would explode with pride as their son or daughter completed a juris doctor, a coveted law degree, and then passed the bar examination to practice in a particular state. Today, saddled with six figures of student loans and increasingly unable to find a job within the legal industry, a whole pile of JDs are moving back with mom. The statistics tell it all. National Association for Legal Career Professionals released a survey (of over 41 thousand 2010 law grads taken nine months after graduation) on June 1^st that noted the worst legal job market since 1996. With an unemployment rate of 12.4%, above the national average, a lot of grads could only find jobs outside of their chosen field (“Want whipped cream with that latte?”):

– Just 50.9 percent of employed graduates obtained a job in private practice, down five percentage points from 2009, 15 percent are in business, 11.5 percent are in other government, 9.3 percent are a judicial clerk, 6.7 percent are in public interest 3.7 percent went into academia and 1.3 percent are in the military.

– 68.4 percent of graduates said they took a job that required they pass the bar while 10.7 percent said a juris doctor was preferred.

– Median starting pay dropped by nearly 13 percent for all jobs and by 20 percent for law firm positions.

The bigger question is whether these changes are simply the result of the recession – in which case employment patterns will return to the higher rates if the recovery ever reaches its promised goal – or the product of underlying systemic changes in global supply and demand. While undoubtedly the recession serves at least as an accelerant and reduces the pool of clients able to afford legal services, there are strong indications that the actual demand for traditional legal services will not return to past practices. Writing for the July 1^st ABA Journal, William D. Henderson, Rache l M. Zahorsky explain: “The golden era is gone, but this is not because the law itself is becoming less relevant. Rather, the sea change reflects an urgent need for better and cheaper legal services that can keep pace with the demands of a rapidly globalizing world. The Great Recession—a catalyst for change—provided an opportunity to re-examine some long-standing assumptions about lawyers and the clients they serve.”

Henderson and Zahorsky explain that from the perspective of complex government regulation and trans-border corporation activity, the need for attorneys has never been greater, but since most firms generate work at the individual consumer (vs. coprorate) level, their generalized practices have not changed even as demand for such services has ebbed, in part from new Internet self-help alternatives and in part because the cost of representation is decreasingly affordable to most people. With law school tuitions soaring above the inflation rate over the past several decades, probably driven by both demand and the economics of the highest rungs of the profession, lawyers’ rates have moved up proportionately. Unfortunately, consumer income has not kept with such increases.

Looking at the numbers, it is clear that the systemic changes had already begun before the recession: “According to payroll data collected by the U.S. Census Bureau, the multidecade surge in law firm employment hit a plateau in 2004. Between 1998 and 2004, total law firm employment grew by more than 16 percent, or 169,000. Yet between March 2004 and March 2008, several months before the Wall Street meltdown that initiated an unprecedented wave of law firm layoffs, the nation’s law firm sector had already shed nearly 20,000 jobs… By overgeneralizing how well the big firms were doing, we failed to notice a slow but fundamental economic shift affecting the majority of lawyers, who are solo practitioners or in small-to-medium-size law firms…

“According to Fred Ury, a former president of the Connecticut Bar Association and a trial lawyer based in Fairfield, Conn., those mainstream lawyers had been feeling the pain for a while…‘The biggest problem,’ says Ury, ‘is that ordinary citizens cannot afford to hire a lawyer. The bread and butter of small firm practices are criminal defense work, wills and trusts, leases, closings and divorces. Yet in Connecticut, 80 to 85 percent of divorces have a self-represented party because most families can’t afford to hire one lawyer, let alone two. Nearly 90 percent of criminal cases are self-represented or by a public defender because families can’t scrape together a retainer.’… Ury, who has practiced in a small firm for nearly 35 years, predicts the problem of unmet legal needs, if not solved by lawyers, ‘will be solved by technology.’” Henderson and Zahorsky.

You can multiply this story across hundreds of job sectors across the United States. You can argue that American labor is just too expensive by global labor standards, but eventually, there is an overriding pressure – the actual value proposition behind inflation where currencies normalize labor costs over time – for salary structures to find an equalizing balance over time. Take for example the specter of cheap Chinese labor perpetually decimating America’s competitive advantage. The June 27^th Time Magazine (Business Section) reminds us that Chinese labor costs have been rising an average of 12% per year from 2000 to 2009 (and continue to rise at a rate much higher than anywhere in the West) and that by 2015, the “productivity corrected” Chinese wage will have risen to 69% of the U.S. average wage rate.

Our labor market, no matter how insulated and isolated we believe or want it to be, is completely driven by global factors beyond our control as well as by technological and socio-economic changes that are simply part of the human experience. Those who fight change the hardest will inevitably wind up on the bottom of the pile of obsolescence, where the corpses of the ill-prepared always wind up. To embrace change is to opt for the road of maximization. It’s just so hard to put into practice.

I’m Peter Dekom, and change is always difficult to process, particularly for those who are older with decades invested in now obsolete skill-sets.

When the Benefits Run Out

Dark clouds are gathering as Congressional leaders meet with the President to consider raising the debt ceiling in exchange for the implementation of a list of austerity measures that will take billions of dollars out of the economy. On July 10^th, the President indicated an unwillingness to sign a short-term extension demanding an all-encompassing bill instead. If the leaders fail to agree on such concessions, and the United States defaults on its bond obligations as a result, the effective higher interest rate required by the international markets for U.S. debt will increase dramatically, necessitating even more taxes or a higher deficit. The International Monetary Fund’s new head, Christine Lagarde, said in a July 9^th interview that there would be “real nasty consequences” stemming from a U.S. default, and noted, “If you draw out the entire scenario of default, yes, of course, you have all of that — interest hikes, stock markets taking a huge hit and real nasty consequences, not just for the United States, but for the entire global economy, because the U.S. is such a big player and matters so much for other countries.”

The Tea Party goal that seems to prevent a compromise from happening – avoiding tax rate increase – is a particularly strange argument as the basis of stimulating more jobs. Keeping taxes low for the upper classes may seem like a good idea, but these well-heeled Americans didn’t get that way by randomly employing new workers because they have lower tax rates. Without some sign that consumers are actually ready to spend real money to buy the increased output that results from having more workers, reality dictates that employers have no rational basis to increase their workforce. With the government withdrawing in significant part as the “replacement consumer,” if anything, employers may have to implement greater job cutbacks, as recent employment numbers suggest.

But those clouds are darkening still as jobless benefits expire across the land: “Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics. In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government… By the end of this year, however, many of those dollars are going to disappear, with the expiration of extended benefits intended to help people cope with the lingering effects of the recession. Moody’s Analytics estimates $37 billion will be drained from the nation’s pocketbooks this year.” New York Times, July 10, 2011.

There is no doubt but that an uncontrolled deficit will continue to assert inflationary pressures, an economic reality that can only get worse as India and China increase the level of their own consumption, pushing oil and food prices ever higher. Clearly, that deficit must be managed more adroitly, but when people advocate “wrong policies” and severe austerity as a job-creator, the illogic of that choice is inescapable: “Unless hiring picks up sharply to compensate, economists fear that the lost income will further crimp consumer spending and act as a drag on a recovery that is still quite fragile. Among the other supports that are slipping away are federal aid to the states, the Federal Reserve’s program to pump money into the economy and the payroll tax cut, scheduled to expire at the end of the year.

“‘If we don’t get more job growth and gains in wages and salaries, then consumers just aren’t going to have the firepower to spend, and the economy is going to weaken,’ said Mark Zandi, chief economist of Moody’s Analytics, a macroeconomic consulting firm… Job growth has remained elusive. There are 4.6 unemployed workers for every opening, according to the Labor Department, and [July 8^th’s] unemployment report showed that employers added an anemic 18,000 jobs in June.” NY Times. One must clearly differentiate between budgetary expenditures that constitute revenue-generating values – like infrastructure and education – and those that are pure expenses – such as agricultural subsidies and fighting unwinnable wars. America is at a crossroads, and we app ear to be on the precipice of a very bad decision.

I’m Peter Dekom wondering whatever happened to common sense.

Saudi Duty

The less-than-subtle undercurrents in the recent shifting political power struggles have profoundly complicated consideration for America and her allies. While rebels in Libya may sing America’s praises, the sentiments against the U.S. seem to be on the rise. Egypt’s generals have gone so far as to question whether or not they really want U.S. aid, sensing too many strings and negative reactions from the people. Presses for democratic reform don’t always tilt in our favor; we have a pretty nasty reputation of having supported tyrants simply because they agree to tow our global policy lines, notwithstanding torture and repressive tactics against their own. America’s seemingly blind allegiance to Israel – not exactly a correct perception – also has moved popular sentiments against the United States. The “Arab Spring,” the era o f social and political change we have witnessed in the last few months, is one of the most significant global movements of the 21^st century.

Notwithstanding our track record, the Obama administration appears to be favoring democratic reform – whether it entails regime change such as we witnessed in Egypt and are seeing in Libya or simply acceptance of internal reform within existing governments such as in Bahrain. Skepticism abounds, because we have been on the wrong side for so long in the eyes of vast hordes of rebellious citizens in search of a new day. The next theater of change – the Kingdom of Jordan – sets a particularly clear example of the dichotomy of American politics.

Ultra-conservative Saudi Arabia, itself a Kingdom in which its rulers remain with an iron grip on every aspect of Saudi life, is pressuring neighboring Jordan’s West-leaning, King Abdullah II, to maintain his royal prerogatives and resist calls for him to cede power in the name of democratic reform: “Saudi Arabia is urging the Hashemite kingdom to stick to the kind of autocratic traditions that have kept the House of Saud secure for centuries, and Riyadh [the Saudi capital] has been piling up gifts at Abdullah's door to sell its point of view… The Saudis last month offered Jordan a coveted opportunity to join a wealthy regional bloc called the Gulf Cooperation Council, a move that would give the impoverished kingdom new investment, jobs and security ties. To sweeten the pot, the Saudis wrote a check for $400 million in aid to Amman two weeks ago, their first assistance in years.” Los Angeles Times, June 19^th.

But the Saudi efforts are the exact opposite of U.S. pressure, urging Abdullah to accept constitutional limitations on his authority and accept the introduction of true and meaningful democratic reform within his government. Local Jordanian demonstrations in favor of reform suggest that there is a rising groundswell of resistance to a continued royal autocracy, and if this increases in the near term, we could be watching open rebellion and perhaps a military repression – as is occurring in Syria – if the monarchy is to retain control. The Saudis believe that if Jordan’s King succumbs to pressure, they will be next.

The United States and Saudi Arabia have been among the staunchest allies in the region. Siding with the U.S. in our Iraqi and Afghanistan anti-terrorism efforts, and clearly hemming in a very hostile Iran on its northern border, the Saudis have protected the most productive oil fields on earth, keeping skyrocketing prices from escalating much farther by lobbying OPEC to increase supplies. But in Jordan, our interests could not be more at odds: “The quiet contest for Jordan is one sign of the rivalry that has erupted across the Middle East this year between Saudi Arabia and the United States, longtime allies that have been put on a collision course by the popular uprisings that have swept the region… ‘We do have a lot of friction there,’ said a U.S. official who spoke on condition of anonymity because of the sensitivity of the issue. ‘The 'Arab Spring' has injected tension into the relationship.’

“The Obama administration has generally supported the protests, and urged the region's governments to share more power. But when President Obama demanded reform from Arab regimes in a major speech last month, he carefully avoided any mention of Saudi Arabia, an absolute monarchy that brooks little or no dissent… Riyadh, which believes the U.S. is turning its back on loyal allies, is trying to step out of America's shadow. It is embracing a foreign policy that often diverges from Washington's — and sometimes seeks to undermine it… The Saudis ‘are upset, they are frustrated, they are angry,’ said a former senior U.S. official, who spoke on condition of anonymity because of the Saudis' traditional reticence. ‘They don't know exactly what to do.’... A senior State Department official insisted that on security and energy issues, the alliance remains ‘rock solid.’”

We continue to supply military hardware to the Saudis and are equally caught between two worlds. But the world is changing, and the United States must grapple with its past mistakes as well as maintain relationships that maximize our own national security. It is awkward, will entail a period of adjustment, but the Saudis see this as a struggle for their very survival. We must find that elusive middle ground.

I’m Peter Dekom, and the Middle East remains among the most complex and vexing areas for political change involving Israel’s survival balanced against oil supplies that literally determine our economic future.

Passionate Partisanship, Compromise & Failed Government

Nobody likes to talk about it, every passionate constituent thinks their political ideology is sacrosanct and so many with such un-veeringly committed views believe that their minority will is so correct that it must be imposed on everyone else regardless of the consequences… but… democracies cannot sustain without a willingness by elected officials to compromise. When enough such minority candidates are elected to stymie that ability to compromise at an operational level vaporizes, simply put, government fails.

In Minnesota, a state that not too long ago had a professional wrestler as governor, the Tea Party Republicans have refused to close a $5 billion budget gap in a disagreement with the Governor over increasing taxes for those with higher incomes. The issue hardly impacts the overwhelming majority of state residents and is clearly a position that only supports the special interests who financed the campaigns of so many of the obstinate legislators refusing to budge. Republicans and Democrats have bickered for a very long time, but they have always found enough middle ground to continue government. In the last ten years, there have only been six such shut downs (yes, including Minnesota) over such budgetary impasses… even then only for a short time. But the Minnesota Republican legislature and the Democrat Governor are locked in a stalemate.< o:p>

Minnesota Republicans have lost control of their own party. While the Republicans have majority control of both houses of their legislature, the Tea Party agenda, clearly representing a minority of elected legislators, has been able to control the party agenda. To generate sufficient party clout within their own ranks, Republicans have begrudgingly succumbed to Tea Party pressures to stand fast, even when every political instinct in their bodies screams for compromise. Publicly, they appear firm and unified. Privately, they fear public retaliation at the 2012 elections for failing to figure it out.

State funding in Minnesota ran out on June 30^th. This is a description of life in Minnesota on July 1^st after government shut down: “State parks were barricaded, and campers, Boy Scout troops and everyone else were sent on their way. [Folks with reservations found them canceled.] Heading into a holiday weekend in a state that savors its summers outdoors, licenses for fishing, hunting, trapping, boats and ATVs were unavailable for purchase. And all around the State Capitol — the place where all the troubles began — the streets were eerily empty and official buildings locked, plastered with hand-taped signs that offered a gentle explanation: ‘This building is closed until further notice due to the current state government service interruption.’” New York Times, July 1^st. There is no sign that either side is moving; no new negotiations were set for the holiday weekend.

But the above stalemate is the kitty in the room, a shadow of the bigger war taking place in the U.S. House of Representatives, where a minority Tea Party movement has taken control of the Republican majority in that Congressional body. The issue of raising the deficit cap, cutting programs well below levels tolerable by either the Democratic majority Senate or the President without raising taxes, threatens to shut down the federal government, place the U.S. in default on many of its debt obligations and destroy America’s credit rating (making us pay so much more interest for even our existing deficit obligations in the global marketplace). Meanwhile, in anticipation of some form of federal austerity measures – assuming a compromise can be reached – unemployment continues to rise. The Dept. of Labor announced the June numbers, up a tenth of a percent from May, to 9.2%. More evidence of the double dip.

Privately, seemingly unified Republicans are terrified that their actions may give Democrats wiggle room on the economic issues they cannot solve, allow them to blame Republicans for the failure and lead to Obama’s reelection. As we watch Republicans vie for the presidency more than a full year before the nominating convention (and they’ve been at it for quite a while already), it is clear that this schism in party ideology may well be their Achilles heel. The Tea Party is unyielding, uncompromising, and defiant. And while many in the electorate admire such committed behavior, contrasted to the slippery roles that politicians usually adopt, there is also a nagging feeling that these folks may be best suited for talk radio and not for running a government that cannot work without compromise. More and more, people are asking: Has the art of compromised died in the United States? Has the ability to govern died with it? At least Congress canceled their Fourth of July recess to work on the problem even though they really didn’t accomplish anything.

I’m Peter Dekom, and it is quite disturbing to watch the United States cripple itself in this most highly competitive time in the worldwide marketplace.

Making the Status Quo Look Like Change

They called it the “Arab Spring,” a series of uprisings and protests that toppled dictators and unpopular incumbents, generated criminal prosecutions of those once in power, loosened constitutional reform in nations where monarchs ruled without check and in more than one case began protracted civil wars. In more than one case, Syria being the most prominent, brutal repression (Syrian tanks, turned on civilians, are pictured above), strict censorship and thousands of casualties, unmeasurable because of closed borders and a recalcitrant leadership, imposed continuation of the same-old/same-old.

Even in nations outside the Middle East, dictators were shaking in fear, sharpening their knives and looking for conspiracy to crush: “The authorities are engaged in the harshest crackdown [in Belasrus] of [President Aleksandr] Lukashenko’s 17 years in power. In response, Internet social networks have been promoting a new form of nonviolent protest, encouraging people to clap their hands in unison rather than shout slogans or hold signs… ‘We must strongly and consistently oppose the unconscionable scenario of the ‘colored revolutions,’ which are written as a blueprint in the capitals of other countries,’ Mr. Lukashenko said, alluding to the uprisings that led to pro-Western governments in Ukraine and Georgia.” New York Times, July 3^rd.

In the Middle East, there has been less than one might have expected from the wave of insurrection that swept the region. For example, in Tunisia, “The social problems that prompted the current unrest also continue to poison the transition process. Endemic unemployment and low levels of education could undermine Tunisia’s democratic transition. The school system, which has long hurt Tunisia’s competitiveness by favoring quantity over quality, desperately needs in-depth reforms. Meanwhile, more than 1.2 million Tunisians, over 11 percent of the country’s population, live in poverty. (The interim government’s estimates have placed the figure as high as 24 percent.)… [T]he flawed and lumbering legal system has not satisfied a population yearning for genuine justice. So far not a single dollar transferred out of the country by the [ousted Presidential] Ben Ali family has found its way back to the state’s coffers, not a single police officer implicated in the murders of almost 300 protesters has been convicted and not a single member of the ruling clan that fled the country has been extradited to Tunisia — including Mr. Ben Ali [who fled to Saudi Arabia].” New York Times, July 15^th.

Some incumbent governments have adopted a slightly conciliatory policy to maintain control. On July 1^st, for example, Moroccans voted in a new constitution aimed at curbing the power of its 47-year-old King Mohamed VI, who supported the measure and is considered a modern prelate. But the measures were not exactly earth-shaking: “The king proposed a series of constitutional reforms that, while stopping well short of the opposition’s demand for a genuine democracy, would shift power to an elected parliament. After elections, the monarch would be obligated to choose a head of government from the parliament’s largest party, and that leader would in turn select ministers and other senior officials. Parliament itself would be given more powers, and the judiciary would become independent. Constitutional language pronouncing the king ‘sacred’ would be softened.” Washington Post, June 20^th. Note that the king picks the prime minister from among the delegates of the victorious party. As monarchies in Jordan and Bahrain consider alternative means to control nascent democratic movements, Morocco’s experiment looms large, even as Saudi Arabia pushes hard in the opposite direction.

But in the poster child for reform, Egypt, the landscape was beginning to reflect less a transfer of power to the people and more a willingness by the power elite – personified by the military – to allow sacrificial lambs from the Mubarak administration (including the former president himself) to stand trial for their failed brutality in order for the old guard to maintain control. The people, sensing this betrayal, have begun to assert their power… again: “Chaos erupted in Cairo’s Tahrir Square on [the evening of July 3^rd], as a dispute between protesters and tea vendors set off clashes among groups of young men armed with rocks, clubs and knives, and a tent city occupied by protesters was burned to the ground… The clashes appeared to pit civilian against civilian, a departure from violence that flared in the square [on June 28^th] between protesters and the police, and pointed to lingering tensions in Egypt as the country negotiates a political transition under a provisional military government that has come under increasing criticism from the protesters.” NY Times.

To make matters worse, even the number of scapegoats the military is willing to sacrifice appears to be dwindling: “An Egyptian criminal court on [July 5^th] acquitted three former government ministers of corruption while convicting a fourth in absentia, verdicts most likely to further inflame public anger over the pace of efforts to hold former officials accountable for killing more than 800 people during the country’s 18-day revolution… The acquittals were seen as especially provocative because they followed by one day a separate Cairo court decision to release on bail seven police officers charged with killing 17 protesters and wounding 350 in the city of Suez during the revolution. That decision set off a riot at the courthouse and led protesters to block a major highway for hours.” NY Times, July 5^th .

The military has gone so far as to push for a new constitution that would literally ratify its obvious existing and continuing power: “[The draft constitution] will spell out the armed forces’ role in the civilian government, potentially shielding the defense budget from public or parliamentary scrutiny and protecting the military’s vast economic interests. Proposals under consideration would give the military a broad mandate to intercede in Egyptian politics to protect national unity or the secular character of the state.” New York Times July 16^th. Without giving up any real power, the military coalition offered to reshuffle the cabinet, a token gesture at best: “It is unlikely that [such] changes meant much more to the tens of thousands of demonstrators who had filled Tahrir Square since July 8 to demand more sweeping changes from the Egyptian revolution, most notably the criminal prosecution of the country’s former leaders.” New York Times, July 18^th.

Specifically, look at how Egyptian police leaders were punished for their responsibility in killing protestors: “The Interior Ministry said 18 police generals and 9 other senior officers were forced into early retirement because they were accused of killing protesters during the 18-day uprising. For the same reason, 54 lower-ranking officers were shifted to jobs where they would no longer interact with civilians, officials said.” New York Times, July 13^th. Hundreds of other senior police officials were retired as well. Hey, boys, enjoy those retirement benefits! True systemic change requires more than t he toppling of a replaceable dictator and a few of his cronies. The real power in charge has not changed.

With the exception of Libya, where American military intervention has at least given rebel forces a ray of hope in toppling the Kaddafi regime and where the U.S. has recognized the new regime as the legitimate government, these Middle Eastern democratic movements – even as they are supported by our government – are anything but pro-American forces. The U.S. is still seen as the country that supplied brutal monarchs and dictators with the military hardware to effect continuous control. But if you look closely at the reform movements in most of these countries – particularly at the reaction from the power elites – you may detect that there is less in the way of change flowing down the river of near-term history than may be depicted in the press. A whole lot less.

I’m Peter Dekom, and what’s trying and even executing a few former dictators if you can maintain your quality of life and virtual control over the economy?