- Why Political Correctness Fails (When What We Know "For Sure" Is Wrong)
Authored by Gail Tverberg via Our Finite World blog,
Most of us are familiar with the Politically Correct (PC) World View. William Deresiewicz describes the view, which he calls the “religion of success,” as follows:
There is a right way to think and a right way to talk, and also a right set of things to think and talk about. Secularism is taken for granted. Environmentalism is a sacred cause. Issues of identity – principally the holy trinity of race, gender, and sexuality – occupy the center of concern.
There are other beliefs that go with this religion of success:
- Wind and solar will save us.
- Electric cars will make transportation possible indefinitely.
- Our world leaders are all powerful.
- Science has all of the answers.
To me, this story is pretty much equivalent to the article, “Earth Is Flat and Infinite, According to Paid Experts,” by Chris Hume in Funny Times. While the story is popular, it is just plain silly.
In this post, I explain why many popular understandings are just plain wrong. I cover many controversial topics, including environmentalism, peer-reviewed literature, climate change models, and religion. I expect that the analysis will surprise almost everyone.
Myth 1: If there is a problem with the lack of any resource, including oil, it will manifest itself with high prices.
As we reach limits of oil or any finite resource, the problem we encounter is an allocation problem.
Figure 1. Two views of future economic growth. Created by author.
As long as the quantity of resources we can extract from the ground keeps rising faster than population, there is no problem with limits. The tiny wedge that each person might get from these growing resources represents more of that resource, on average. Citizens can reasonably expect that future pension promises will be paid from the growing resources. They can also expect that, in the future, the shares of stock and the bonds that they own can be redeemed for actual goods and services.
If the quantity of resources starts to shrink, the problem we have is almost a “musical chairs” type of problem.
Figure 2. Circle of chairs arranged for game of musical chairs. Source
In each round of a musical chairs game, one chair is removed from the circle. The players in the game must walk around the outside of the circle. When the music stops, all of the players scramble for the remaining chairs. Someone gets left out.
The players in today’s economic system include
- High paid (or elite) workers
- Low paid (or non-elite) workers
- Businesses
- Governments
- Owners of assets (such as stocks, bonds, land, buildings) who want to sell them and exchange them for today’s goods and services
If there is a shortage of a resource, the standard belief is that prices will rise and either more of the resource will be found, or substitution will take place. Substitution only works in some cases: it is hard to think of a substitute for fresh water. It is often possible to substitute one energy product for another. Overall, however, there is no substitute for energy. If we want to heat a substance to produce a chemical reaction, we need energy. If we want to move an object from place to place, we need energy. If we want to desalinate water to produce more fresh water, this also takes energy.
The world economy is a self-organized networked system. The networked system includes businesses, governments, and workers, plus many types of energy, including human energy. Workers play a double role because they are also consumers. The way goods and services are allocated is determined by “market forces.” In fact, the way these market forces act is determined by the laws of physics. These market forces determine which of the players will get squeezed out if there is not enough to go around.
Non-elite workers play a pivotal role in this system because their number is so large. These people are the chief customers for goods, such as homes, food, clothing, and transportation services. They also play a major role in paying taxes, and in receiving government services.
History says that if there are not enough resources to go around, we can expect increasing wage and wealth disparity. This happens because increased use of technology and more specialization are workarounds for many kinds of problems. As an economy increasingly relies on technology, the owners and managers of the technology start receiving higher wages, leaving less for the workers without special skills. The owners and managers also tend to receive income from other sources, such as interest, dividends, capital gains, and rents.
When there are not enough resources to go around, the temptation is to use technology to replace workers, because this reduces costs. Of course, a robot does not need to buy food or a car. Such an approach tends to push commodity prices down, rather than up. This happens because fewer workers are employed; in total they can afford fewer goods. A similar downward push on commodity prices occurs if wages of non-elite workers stagnate or fall.
If wages of non-elite workers are lower, governments find themselves in increasing difficulty because they cannot collect enough taxes for all of the services that they are asked to provide. History shows that governments often collapse in such situations. Major defaults on debt are another likely outcome (Figure 3). Pension holders are another category of recipients who are likely to be “left out” when the game of musical chairs stops.
Figure 3 – Created by Author.
The laws of physics strongly suggest that if we are reaching limits of this type, the economy will collapse. We know that this happened to many early economies. More recently, we have witnessed partial collapses, such as the Depression of the 1930s. The Depression occurred when the price of food dropped because mechanization eliminated a significant share of human hand-labor. While this change reduced the price of food, it also had an adverse impact on the buying-power of those whose jobs were eliminated.
The collapse of the Soviet Union is another example of a partial collapse. This collapse occurred as a follow-on to the low oil prices of the 1980s. The Soviet Union was an oil exporter that was affected by low oil prices. It could continue to produce for a while, but eventually (1991) financial problems caught up with it, and the central government collapsed.
Figure 4. Oil consumption, production, and inflation-adjusted price, all from BP Statistical Review of World Energy, 2015.
Low prices are often a sign of lack of affordability. Today’s oil, coal, and natural gas prices tend to be too low for today’s producers. Low energy prices are deceptive because their initial impact on the economy seems to be favorable. The catch is that after a time, the shortfall in funds for reinvestment catches up, and production collapses. The resulting collapse of the economy may look like a financial collapse or a governmental collapse.
Oil prices have been low since late 2014. We do not know how long low prices can continue before collapse. The length of time since oil prices have collapsed is now three years; we should be concerned.
Myth 2. (Related to Myth 1) If we wait long enough, renewables will become affordable.
The fact that wage disparity grows as we approach limits means that prices can’t be expected to rise as we approach limits. Instead, prices tend to fall as an increasing number of would-be buyers are frozen out of the market. If in fact energy prices could rise much higher, there would be huge amounts of oil, coal and gas that could be extracted.
Figure 5. IEA Figure 1.4 from its World Energy Outlook 2015, showing how much oil can be produced at various price levels, according to IEA models.
There seems to be a maximum affordable price for any commodity. This maximum affordable price depends to a significant extent on the wages of non-elite workers. If the wages of non-elite workers fall (for example, because of mechanization or globalization), the maximum affordable price may even fall.
Myth 3. (Related to Myths 1 and 2) A glut of oil indicates that oil limits are far away.
A glut of oil means that too many people around the world are being “frozen out” of buying goods and services that depend on oil, because of low wages or a lack of job. It is a physics problem, related to ice being formed when the temperature is too cold. We know that this kind of thing regularly happens in collapses and partial collapses. During the Depression of the 1930s, food was being destroyed for lack of buyers. It is not an indication that limits are far away; it is an indication that limits are close at hand. The system can no longer balance itself correctly.
Myth 4: Wind and solar can save us.
The amount of energy (other than direct food intake) that humans require is vastly higher than most people suppose. Other animals and plants can live on the food that they eat or the energy that they produce using sunlight and water. Humans deviated from this simple pattern long ago–over 1 million years ago.
Unfortunately, our bodies are now adapted to the use of supplemental energy in addition to food. The use of fire allowed humans to develop differently than other primates. Using fire to cook some of our food helped in many ways. It freed up time that would otherwise be spent chewing, providing time that could be used for tool making and other crafts. It allowed teeth, jaws and digestive systems to be smaller. The reduced energy needed for maintaining the digestive system allowed the brain to become bigger. It allowed humans to live in parts of the world where they are not physically adapted to living.
In fact, back at the time of hunter-gatherers, humans already seemed to need three times as much energy total as a correspondingly sized primate, if we count burned biomass in addition to direct food energy.
Figure 6 – Created by author.
“Watts per Capita” is a measure of the rate at which energy is consumed. Even back in hunter-gatherer days, humans behaved differently than similar-sized primates would be expected to behave. Without considering supplemental energy, an animal-like human is like an always-on 100-watt bulb. With the use of supplemental energy from burned biomass and other sources, even in hunter-gatherer times, the energy used was equivalent to that of an always-on 300-watt bulb.
How does the amount of energy produced by today’s wind turbines and solar panels compare to the energy used by hunter-gatherers? Let’s compare today’s wind and solar output to the 200 watts of supplemental energy needed to maintain our human existence back in hunter-gatherer times (difference between 300 watts per hour and 100 watts per hour). This assumes that if we were to go back to hunting and gathering, we could somehow collect food for everyone, to cover the first 100 watts per hour. All we would need to do is provide enough supplemental energy for cooking, heating, and other very basic needs, so we would not have to deforest the land.
Conveniently, BP gives the production of wind and solar in “terawatt hours.” If we take today’s world population of 7.5 billion, and multiply it by 24 hours a day, 365.25 days per year, and 200 watts, we come to needed energy of 13,149 terawatt hours per year. In 2016, the output of wind was 959.5 terawatt hours; the output of solar was 333.1 terawatt hours, or a total of 1,293 terawatt hours. Comparing the actual provided energy (1,293 tWh) to the required energy of 13,149 tWh, today’s wind and solar would provide only 9.8% of the supplemental energy needed to maintain a hunter-gatherer level of existence for today’s population.
Of course, this is without considering how we would continue to create wind and solar electricity as hunter-gatherers, and how we would distribute such electricity. Needless to say, we would be nowhere near reproducing an agricultural level of existence for any large number of people, using only wind and solar. Even adding water power, the amount comes to only 40.4% of the added energy required for existence as hunter gatherers for today’s population.
Many people believe that wind and solar are ramping up rapidly. Starting from a base of zero, the annual percentage increases do appear to be large. But relative to the end point required to maintain any reasonable level of population, we are very far away. A recent lecture by Energy Professor Vaclav Smil is titled, “The Energy Revolution? More Like a Crawl.”
Myth 5. Evaluation methods such as “Energy Returned on Energy Invested” (EROI) and “Life Cycle Analyses (LCA)” indicate that wind and solar should be acceptable solutions.
These approaches are concerned about how the energy used in creating a given device compares to the output of the device. The problem with these analyses is that, while we can measure “energy out” fairly well, we have a hard time determining total “energy in.” A large share of energy use comes from indirect sources, such as roads that are shared by many different users.
A particular problem occurs with intermittent resources, such as wind and solar. The EROI analyses available for wind and solar are based on analyses of these devices as stand-alone units (perhaps powering a desalination plant, on an intermittent basis). On this basis, they appear to be reasonably good choices as transition devices away from fossil fuels.
EROI analyses don’t handle the situation well when there is a need to add expensive infrastructure to compensate for the intermittency of wind and solar. This situation tends to happen when electricity is added to the grid in more than small quantities. One workaround for intermittency is adding batteries; another is overbuilding the intermittent devices, and using only the portion of intermittent electricity that comes at the time of day and time of year when it is needed. Another approach involves paying fossil fuel providers for maintaining extra capacity (needed both for rapid ramping and for the times of year when intermittent resources are inadequate).
Any of these workarounds is expensive and becomes more expensive, the larger the percentage of intermittent electricity that is added. Euan Mearns recently estimated that for a particular offshore wind farm, the cost would be six times as high, if battery backup sufficient to even out wind fluctuations in a single month were added. If the goal were to even out longer term fluctuations, the cost would no doubt be higher. It is difficult to model what workarounds would be needed for a truly 100% renewable system. The cost would no doubt be astronomical.
When an analysis such as EROI is prepared, there is a tendency to leave out any cost that varies with the application, because such a cost is difficult to estimate. My background is in actuarial work. In such a setting, the emphasis is always on completeness because after the fact, it will become very clear if the analyst left out any important insurance-related cost. In EROI and similar analyses, there is much less of a tieback to the real world, so an omission may never be noticed. In theory, EROIs are for multiple purposes, including ones where intermittency is not a problem. The EROI modeler is not expected to consider all cases.
Another way of viewing the issue is as a “quality” issue. EROI theory generally treats all types of energy as equivalent (including coal, oil, natural gas, intermittent electricity, and grid-quality electricity). From this perspective, there is no need to correct for differences in types of energy output. Thus, it makes perfect sense to publish EROI and LCA analyses that seem to indicate that wind and solar are great solutions, without any explanation regarding the likely high real-world cost associated with using them on the electric grid.
Myth 6. Peer reviewed articles give correct findings.
The real story is that peer reviewed articles need to be reviewed carefully by those who use them. There is a very significant chance that errors may have crept in. This can happen because of misinterpretation of prior peer reviewed articles, or because prior peer reviewed articles were based on “thinking of the day,” which was not quite correct, given what has been learned since the article was written. Or, as indicated by the example in Myth 5, the results of peer reviewed articles may be confusing to those who read them, in part because they are not written for any particular audience.
The way university research is divided up, researchers usually have a high level of specialized knowledge about one particular subject area. The real world situation with the world economy, as I mentioned in my discussion of Myth 1, is that the economy is a self-organized networked system. Everything affects everything else. The researcher, with his narrow background, doesn’t understand these interconnections. For example, energy researchers don’t generally understand economic feedback loops, so they tend to leave them out. Peer reviewers, who are looking for errors within the paper itself, are likely to miss important feedback loops as well.
To make matters worse, the publication process tends to favor results that suggest that there is no energy problem ahead. This bias can come through the peer review process. One author explained to me that he left out a certain point from a paper because he expected that some of his peer reviewers would come from the Green Community; he didn’t want to say anything that might offend such a reviewer.
This bias can also come directly from the publisher of academic books and articles. The publisher is in the business of selling books and journal articles; it does not want to upset potential buyers of its products. One publisher made it clear to me that its organization did not want any mention of problems that seem to be without a solution. The reader should be left with the impression that while there may be issues ahead, solutions are likely to be found.
In my opinion, any published research needs to be looked at very carefully. It is very difficult for an author to move much beyond the general level of understanding of his audience and of likely reviewers. There are financial incentives for authors to produce PC reports, and for publishers to publish them. In many cases, articles from blogs may be better resources than academic articles because blog authors are under less pressure to write PC reports.
Myth 7. Climate models give a good estimate of what we can expect in the future.
There is no doubt that climate is changing. But is all of the hysteria about climate change really the correct story?
Our economy, and in fact the Earth and all of its ecosystems, are self-organized networked systems. We are reaching limits in many areas at once, including energy, fresh water, the number of fish that can be extracted each year from oceans, and metal ore extraction. Physical limits are likely to lead to financial problems, as indicated in Figure 3. The climate change modelers have chosen to leave all of these issues out of their models, instead assuming that the economy can continue to grow as usual until 2100. Leaving out these other issues clearly can be expected to overstate the impact of climate change.
The International Energy Agency is very influential with respect to which energy issues are considered. Between 1998 and 2000, it did a major flip-flop in the importance of energy limits. The IEA’s 1998 World Energy Outlook devotes many pages to discussing the possibility of inadequate oil supplies in the future. In fact, near the beginning, the report says,
Our analysis of the current evidence suggests that world oil production from conventional sources could peak during the period 2010 to 2020.
The same report also mentions Climate Change considerations, but devotes many fewer pages to these concerns. The Kyoto Conference had taken place in 1997, and the topic was becoming more widely discussed.
In 1999, the IEA did not publish World Energy Outlook. When the IEA published the World Energy Outlook for 2000, the report suddenly focused only on Climate Change, with no mention of Peak Oil. The USGS World Petroleum Assessment 2000 had recently been published. It could be used to justify at least somewhat higher future oil production.
I will be the first to admit that the “Peak Oil” story is not really right. It is a halfway story, based on a partial understanding of the role physics plays in energy limits. Oil supply does not “run out.” Peak Oilers also did not understand that physics governs how markets work–whether prices rise or fall, or oscillate. If there is not enough to go around, some of the would-be buyers will be frozen out. But Climate Change, as our sole problem, or even as our major problem, is not the right story, either. It is another halfway story.
One point that both Peak Oilers and the IEA missed is that the world economy doesn’t really have the ability to cut back on the use of fossil fuels significantly, without the world economy collapsing. Thus, the IEA’s recommendations regarding moving away from fossil fuels cannot work. (Shifting energy use among countries is fairly easy, however, making individual country CO2 reductions appear more beneficial than they really are.) The IEA would be better off talking about non-fuel changes that might reduce CO2, such as eating vegetarian food, eliminating flooded rice paddies, and having smaller families. Of course, these are not really issues that the International Energy Association is concerned about.
The unfortunate truth is that on any difficult, interdisciplinary subject, we really don’t have a way of making a leap from lack of knowledge of a subject, to full knowledge of a subject, without a number of separate, partially wrong, steps. The IPCC climate studies and EROI analyses both fall in this category, as do Peak Oil reports.
The progress I have made on figuring out the energy limits story would not have been possible without the work of many other people, including those doing work on studying Peak Oil and those studying EROI. I have also received a lot of “tips” from readers of OurFiniteWorld.com regarding additional topics I should investigate. Even with all of this help, I am sure that my version of the truth is not quite right. We all keep learning as we go along.
There may indeed be details of this particular climate model that are not correct, although this is out of my area of expertise. For example, the historical temperatures used by researchers seem to need a lot of adjustment to be usable. Some people argue that the historical record has been adjusted to make the historical record fit the particular model used.
There is also the issue of truing up the indications to where we are now. I mentioned the problem earlier of EROI indications not having any real world tie; climate model indications are not quite as bad, but they also seem not to be well tied to what is actually happening.
Myth 8. We don’t need religion; our leaders are all knowing and all powerful.
We are fighting a battle against the laws of physics. Expecting our leaders to win in the battle against the laws of physics is expecting a huge amount. Some of the actions of our leaders seem extraordinarily stupid. For example, if falling interest rates have postponed peak oil, then proposing to raise interest rates, when we have not fixed the underlying oil depletion problem, seems very ill-advised.
Everything I have seen indicates that there is a literal Higher Power governing our world economy. It is the Laws of Physics that govern the world economy. The Laws of Physics affect the world economy in many ways. The economy is a dissipative structure. Energy inputs allow the economy to remain in an “out of equilibrium state” (that is, in a growing state), for a very long period.
Eventually the ability of any economy to grow must come to an end. The problem is that it requires increasing amounts of energy to fight the growing “entropy” (higher energy cost of extraction, need for growing debt, and rising pollution levels) of the system. The economy must come to an end, just as the lives of individual plants and animals (which are also dissipative structures) must come to an end.
People throughout the ages have been in awe of how this system that provides growth works. We get energy from the sun. This solar energy helps grow our food. It allows the physical growth of humans. It allows the growth of ecosystems and of economies. Humans, ecosystems, and economies seem permanent, but eventually they all must collapse. In physics terms, they are all dissipative structures.
Humans have been in awe of the self-organizing property permitted by flows of energy for as long as humans have had the ability to think abstract thoughts. These flows allow a newly created whole to be greater than the sum of their parts. For example, babies start from a small beginning and mature into adults. Musical notes go together to form recognizable melodies. Physical movements go together to form dances. Awe for this phenomenon seems to be one of the origins of religion.
Another reason for religions is a need for hierarchical structure within an economy. We know that animal groups very often have “pecking orders.” Adding a god provides a convenient way of adding a “top level” to the pecking order. Of course, if leaders can convince members of the group that they are all knowing and that science can provide all of the answers, then the top level provided by religion is not needed.
A third reason for religions is to help align the thoughts of members in a particular way. Most of us are aware of the power of magnetized materials.
Figure 7. Source.
To some extent, the same power exists when the belief systems of groups of people can be aligned in the same direction. For example, teachers find it much easier to teach large groups of students, if parents have emphasized the importance of school and the need for respect for teachers. A military leader can attack another country, if soldiers follow orders. A group of generally uncivilized people can learn the benefit of working with others, if proper instruction is given.
What has been astounding to me, as I have looked into the situation, is that the scientific evidence seems to point in the direction of a literal Higher Power governing our Universe. It is not clear whether this higher power is the Laws of Physics, or whether it is some outside “God” that created the Laws of Physics.
In the past, many researchers assumed that the Universe was a closed energy system, irreversibly headed toward a cold, dark end. Recent research indicates that the Universe is ever-expanding, and in fact, seems to be expanding at an accelerating rate. While individual dissipative structures are constantly encountering more and more entropy, the universe as a whole is perhaps expanding rapidly enough to “outrun” growing entropy. Thus, it can behave as an always-open system. This always-open energy system allows many types of objects to self-organize and grow, at least for a time. These objects behave as dissipative structures, each having a beginning and an end.
We really don’t know whether the Universe had a beginning. Some research suggests that it did not. Others believe it began with a Big Bang.
Within the Universe, the earth seems extremely unusual. In fact, it is not clear that there is any other planet that has exactly the right conditions for complex life. A recent American Scientist article discusses this issue. The book Rare Earth: Why Complex Life Is Uncommon in the Universe points out the huge number of coincidences that were necessary for complex life to form and flourish.
Within the Earth, and perhaps within the Universe as a whole, human economies are the most energy-dense form of structure found.
Figure 8. Image similar to ones shown in Eric Chaisson’s 2001 book, Cosmic Evolution: The Rise of Complexity in Nature.
Thus, in some sense, we humans and our economies may, in some sense, represent the current upper bound on development in the Universe.
We humans live on Earth. It is easy for us to think that our primary purpose in life is to care for and protect the Earth. Unfortunately, with our need for supplemental energy, this is not possible. Even at an early date, our need for resources exceeded what was sustainable. Joshua (in Joshua 17:14-18 relating to the period around 1400 BCE) instructs the tribes of Joseph to clear the trees from the hill country to have enough land for his tribe. This practice was clearly unsustainable; it would lead to erosion of the soil on hilltops. Even at that early date, high population and the need for resources to provide for this high population was conflicting with earth’s sustainability.
If our God is either the Laws of Physics, or some force giving rise to the Laws of Physics, then our God is really the God of the Universe. The limitations of the current Earth are no problem. God (or the Laws of Physics) could create a new Earth, or 1 million new Earths, if He chose to. Thus, from God’s point of view, it is not clear that there is any point to today’s environmentalism. There is a need not to poison ourselves, but “saving the earth” for other species after humans, or for a new set of humans who somehow will use much less energy, doesn’t make much sense. Humans can’t use much less energy; even if we could, our energy use would always be on an upward slope, headed to precisely where we are now.
There are many things that we can’t know for certain. Does this God want/expect us to worship him? Does this God plan an afterlife for some or all of the humans on Earth today? Obviously, if God (or the Laws of Physics) could create the Earth, God could also create other structures as well–possibly a “Heaven.” It is not clear to me that any one of today’s religions has a monopoly on insights regarding what is expected. A person might argue that we need not worry about religion at all, except for the fellowship it provides and the insights it offers regarding how early people coped with their difficulties.
Myth 9. The texts of religious groups around the world are literally true.
The texts of religious groups are true in the same sense that peer reviewed scientific literature is true. They represent, more or less, the best thinking of the day on a particular subject. This certainly does not mean that they are literally true.
We need to read religious texts in the context that they were written. In the earliest days, religious texts represented stories that people passed down from one generation to the next. These stories represented insights that these early people had gained. No one at that time was too concerned about authorship. If a story says, “God said,” it could also mean, “We think that this is something that God might have said.”
Literary styles were very different, back in an era before people pretended to have scientific knowledge. People created stories illustrating some aspect of a particular phenomenon. These stories were not supposed to fully describe what happened. This is why Genesis features two different creation stories.
The Bible makes liberal use of hyperbole and exaggeration. It is hard for people who are not familiar with the original language to understand how stories were intended to be interpreted. Is the concept of Hell added, primarily to provide a contrast to Heaven? In the Old Testament, the number of words in the ancient Hebrew language is much smaller than in today’s languages. This, by itself, makes direct translation difficult.
The earliest religious stories explained how God was perceived at that time. As people became more settled, their views changed. People were getting more “civilized.” Population densities were rising. The best beliefs in an early period may not have had relevance for a later period. This is why most religions have had reformers. Sometimes new writings are added. At other times, the way the writings are interpreted changes. This is why there seems to be a bizarre progression of stories from the Old Testament to the New Testament; new stories needed to be added to supplement and replace old ways of thinking.
Some of the things that early people discovered have not been understood by environmentalists. Genesis 1:28 says,
God blessed them and said to them, “Be fruitful and increase in number; fill the earth and subdue it. Rule over the fish in the sea and the birds in the sky and over every living creature that moves on the ground.”
The early people had figured out that humans were indeed different from other animals and plants. Their use of supplemental energy gave them power over other creatures. Their numbers could (and indeed, did) increase. Early authors were documenting how the world really worked. We later humans have been too blind to see the real situation. It is more pleasant for us to think that somehow we are just like other animals, except perhaps smarter and more in control. With our greater knowledge, we could somehow have avoided an increase in our numbers, if we had only planned better. The laws of physics say this cannot happen; our higher energy use dictates who will win the battle for resources.
The early religious stories were not too different from Peak Oil and Climate Change. They were sort of right. They gave partial insight. They were the best the authors could do at the time.
The ancient religious documents could not tell the whole story at once. New groups would gradually add more insights to the developing story, providing a better understanding of what was truly important for people living in a later period.
Conclusion
In practice, people need a religion or a religion-substitute. People need a basic set of beliefs with which to order their lives.
Our leaders today have proposed the Religion of Success, with its belief in Science, and the power of today’s leaders, as the new religion. This religion has appeal, because it denies the limits we are up against. Life will continue, as if we lived on a flat earth with unlimited resources. This story is pleasant, but unfortunately not true.
Donald Trump, with his version of conservatism, presents another religion. This religion seems to be focused on justifying the allocation of wealth away from the poor, toward the rich, through tax breaks for corporations and the wealthy. This is part of the process of “freezing out” the poor people of the world, when there are not enough resources to go around.
It is hard for me to support Trumpism, even though I recognize that in the animal world, the expected outcome when there are not enough resources to go around is “survival of the best-adapted.” If our concern is leaving energy resources in the ground for future generations, transferring buying power from the poor to the rich is a way of collapsing the economy quickly, while considerable resources remain in the ground. The fact that wealthy people are favored ensures that at least some people will survive.
China and Japan both have what are close to state religions, created by their leaders. School children learn stories regarding what is important, based on what state leaders tell them. In Japan, school children visit religious sites, and learn the proper religious observances. They also learn rules about what is expected of them–always be polite; respect those in charge; don’t eat food on the street; never leave any food wrappers on the ground. In many ways, these religions are probably not too different from today’s Religion of Success.
I personally am not in favor of religions that originate from political groups. I would prefer the “old fashioned” religions based on ancient documents from one or another of the world’s religions. We are clearly facing a difficult time ahead. Perhaps early people had insights regarding how to deal with troubled times. Admittedly, we don’t know for certain that heaven can be in our future. But when things look bleak, it is helpful to see the possibility of a reasonable outcome.
Furthermore, religious groups offer the possibility of finding a group of like-minded individuals to make friends with. We need all of the support we can get as we go through troubled times.
- Venezuelan Women Forced To Turn To Prostitution To Afford Food
Authored by Mac Slavo via SHTFplan.com,
All twelve women who work at the “Show Malilo Night Club” brothel in Arauca, Colombia are from Venezuela. As Venezuela’s socialist economic crisis continues, many Venezuelan women have turned to the sex trade in neighboring Colombia to eat and provide for their families.
“We’ve got lots of teachers, some doctors, many professional women and one petroleum engineer,” brothel owner Gabriel Sánchez said of the women who sell their bodies for $25 an hour. “All of them showed up with their degrees in hand.”
Sanchez who is 60 years-old, started the brothel in Arauca, Colombia after he lost his job in a car repair shop in Venezuela thanks to the government’s socialist policies.
Sánchez and others in the sex industry say Venezuelans dominate the trade now because they’re willing to work for less pay.
“I would say 99 percent of the prostitutes in this town are Venezuelan,” he said.
Amid food shortages, hyperinflation, rampant poverty driven by socialism, and U.S. sanctions, waves of economic refugees have fled the country. Those with the means to do so have gone to places like Miami, Santiago, and Panama. But those who are less fortunate, have had to sink low to simply eat.
A recent study suggested as many as 350,000 Venezuelans had entered Colombia in the last six years. With jobs scarce in the country though, many young (and some not so young) women are turning to the world’s oldest profession to make ends meet. According to the Miami Herald, prostituting for money to buy basic necessities has become commonplace for Venezuelan women.
“If you had told me four years ago that I would be here, doing this, I wouldn’t have believed you,” said Dayana, who asked that her last name not be used.
“But we’ve gone from crisis to crisis to crisis, and now look where we are.”
Dayana is a 30-year-old mother of four who found herself struggling to feed her family in Caracas. Seven months ago, she came to Colombia looking for work. Without an employment permit, she found herself working as a prostitute in the capital, Bogotá. Dayana said she used to be the manager of a food-processing plant on the outskirts of Caracas, but that job disappeared after the government seized the factory and “looted it,” she said.
With inflation running in excess of 700 percent and the bolivar currency in free fall, finding food and medicine in Venezuela has become a frustrating, time-consuming task. Dayana said she often would spend four to six hours waiting in line hoping to buy a bag of flour. Other times she was forced to buy food on the black market at exorbitant rates. Hunger in Venezuela is rampant. –The Miami Herald
Many in Venezuela didn’t prepare for the certain economic failure and food shortages that inevitably result from socialism. As The Prepper’s Blueprint says “If we have learned one thing studying the history of disasters, it is this: those who are prepared have a better chance at survival than those who are not. A crisis rarely stops with a triggering event. The aftermath can spiral, having the capacity to cripple our normal ways of life.” And Venezuela is in the midst of such a crisis. This is made evident by the seeking of prostitution jobs by previously successful and professional women.
Dayana claims she can make between $50-$100 per night by selling herself for 20 minutes at a time.
“Prostitution obviously isn’t a good job,” she said.
“But I’m thankful for it because it’s allowing me to buy food and support my family.”
There seems to be no end in sight for Venezuela’s economic pain either. And President Nicolás Maduro has been digging in and avoiding the economic reforms that economists say are necessary.
- Nomi Prins: The White House As Donald Trump's New Casino
Authored by Nomi Prins via TomDispatch.com,
During the 2016 election campaign, Donald Trump repeatedly emphasized that our country was run terribly and needed a businessman at its helm. Upon winning the White House, he insisted that the problem had been solved, adding, “In theory, I could run my business perfectly and then run the country perfectly. There's never been a case like this.”
Sure enough, while Hillary Clinton spent her time excoriating her opponent for not releasing his tax returns, Americans ultimately embraced the candidate who had proudly and openly dodged their exposure. And why not? It’s in the American ethos to disdain “the man” — especially the taxman. In an election turned reality TV show, who could resist watching a larger-than-life conman who had taken money from the government?
Now, give him credit. As president, The Donald has done just what he promised the American people he would do: run the country like he ran his businesses. At one point, he even displayed confusion about distinguishing between them when he said of the United States: “We’re a very powerful company — country.”
Of course, as Hillary Clinton rarely bothered to point out, he ran many of them using excess debt, deception, and distraction, while a number of the ones he guided personally (as opposed to just licensing them the use of his name) — including his five Atlantic City casinos, his airline, and a mortgage company — he ran into the ground and then ditched. He escaped relatively unscathed financially, while his investors and countless workers and small businesses to whom he owed money were left holding the bag. We may never fully know what lurks deep within those tax returns of his, but we already know that they were “creative” in nature. As he likes to put it, not paying taxes “makes me smart.”
To complete the analogy Trump made during the election campaign, he’s running the country on the very same instincts he used with those businesses and undoubtedly with just the same sense of self-protectiveness. Take the corporate tax policy he advocates that’s being promoted by his bank-raider turned Treasury secretary, Steve Mnuchin. It’s focused on lowering the tax rate for multinational corporations from 35% to 15%, further aiding the profitability of companies that already routinely squirrel away profits and hide losses in the crevices of tax havens far removed from public disclosure.
We, as citizens, already bear the brunt of 89% of U.S. tax revenues today. If adopted, the new tax structure would simply throw yet more of the government’s bill in our laps. Against this backdrop, the math of middle-class tax relief doesn’t work out — not unless you were to cut $4.3 trillion from the overall budget for just the kinds of items non-billionaires count on like Medicaid, education, housing assistance, and job training.
Or put another way, Trump’s West Wing is now advocating the very policy he railed against in the election campaign when he was still championing the everyday man. By promoting tax reform for mega-corporations and the moguls who run them, he’s neglecting the “forgotten” white working class that sent him to the Oval Office to “drain the swamp.”
Since entering the White House, he’s also begun to isolate our country from the global economy, essentially pushing other nations to engage in more trade with each other, not the United States. Whether physically shoving aside the leader of Montenegro, engaging in tweet-storms with the President of Mexico over his “big, fat, beautiful wall,” or hanging up on the prime minister of Australia, Trump has seemingly forgotten that diplomacy and trade matter to the actual American economy. His version of “America First” has taken aim at immigrants, multinational trade agreements, regulations, and the U.N. Calvin Coolidge acted in a somewhat similar (if far less flamboyant) manner and you remember where that led: to the devastating crash of 1929 and the Great Depression of the 1930s.
What’s In a Shell?
As a new report by Public Citizen makes clear, the glimpses we’ve gotten of inner Trumpworld from the president’s limited financial disclosures indicate that his business dealings, by design, couldn’t be more complex, shadowy, or filled with corporate subterfuge. He excels, among other things, at using shell companies to hide the Trump Organization’s profits (and losses) in the corporate labyrinth that makes up his empire. And even though the supposedly blind trust run by his sons is designed to shield him from that imperial entity's decision-making, it still potentially allows him maneuver room to increase his own fortune and glean profits along the way.
So, what’s in such a shell? The answer: another shell, a company that usually has no employees, no offices, and no traceable capital. Think of such entities as financial gargoyles. They offer no real benefits to the economy, create no jobs, and do nothing to make America great again. However, they have the potential to do a great deal for the bottom lines of Donald Trump and his offspring.
Think of the corporate shell game he’s been engaged in as his oyster. After all, anonymous buyers now make up the majority of those gobbling up pieces of his empire. Two years prior to his presidential victory, only 4% of the companies affiliated with people buying his properties were limited-liability, or LLC corporations, which are secretive in nature. Following his victory, that number jumped to 70%.
What that means in plain English is that there’s simply no way of knowing who most of those investing in Trump properties actually are, what countries they come from, how they made their fortunes, or whether there might be any conflicts between their buy-ins to Trumpworld and the national interest of this country.
Trump Lawsuits Meet Pennsylvania Avenue
Secret as so many of his dealings may be, there’s a very public aspect to them that Donald Trump has brought directly into the White House: his pattern of being sued. He’s already been sued 134 times in federal court since he assumed the presidency. (Barack Obama had 26 suits against him and George W. Bush seven at the same moment in their presidencies.)
In other words, one of the nation’s most litigious billionaires is in the process of becoming its most litigious president. A pre-election analysis in USA Today found that Trump and his businesses had been “involved in at least 3,500 legal actions in federal and state courts” over the previous three decades. That volume of lawsuits was unprecedented for a presidential candidate, let alone a president.
It’s fair to say that the public will, in one fashion or another, bear some of the expenses from such lawsuits, as it will, of course, from a lengthening list of ongoing federal investigations, including those into Trump’s business dealings with wealthy Russian businessmen and their various affiliates. According to Public Citizen, Trump formed at least 49 new business entities since announcing his candidacy (including some that were created after he was sworn in as CEO-in-chief). Of those 49, about half were related to projects in foreign countries, including Argentina, India, Saudi Arabia, and Indonesia. Since entering the Oval Office, Trump has met with leaders from each of those countries. And while it’s hardly atypical of a President to meet with foreign leaders, in this case there can be little doubt that national policy overlaps with private interests big time.
As Public Citizen concluded, “Although just prior to being inaugurated as president, Trump announced plans to ‘separate’ himself from his business empire, he still maintains ownership in his corporations and merely reshuffled his businesses into holding companies that are held by a trust that is controlled by Trump himself.” It added that he now has an ongoing stake of some sort in more than 500 businesses. Three-quarters of them are legally registered in Delaware, the largest tax-shelter state in the country. So expect plenty more trouble and suits and investigations to come.
The Era of Golf-plomacy
Trump has always had a knack for promoting his own properties. Now, however, he gets to do it on our dime. Indeed, we taxpayers fork over a million dollars or more every time the president simply takes a trip to visit his Mar-a-Lago private club in Florida, his National Golf Club in Bedminster, New Jersey, or any of his other properties. During his first 241 days in office, he spent 79 days visiting his properties.
Meanwhile, a near-army of his well-connected friends and wannabe friends have been sharpening their golf games at Trump locales. At least 50 executives of companies that bagged sweetheart government contracts, as well as 21 lobbyists and trade group officials, are members of Trump golf courses in Florida, New Jersey, and Virginia. As the president’s son Eric Trump told The New York Times, “I think our brand is the hottest it has ever been.”
They’re not just paying for golf, of course; they’re paying for access. About two-thirds of them “happened” to be golfing during one of those 58 days when Trump, too, was present. It doesn’t take an investigative reporter to show that whatever happens on a Trump golf course undoubtedly does not stay there. And keep in mind that the upkeep of the Trump entourage that travels from D.C. to those clubs with him is at least partially funded by us taxpayers, too.
Trump may tilt isolationist when it comes to countries that don’t put money into his clubs and hotel suites, but the nations that do tend to be in big with him. To take one example, Saudi Arabia, the first stop on his first foreign tour, recently disclosed that it had spent $270,000 for lodgings and food at the new Trump International Hotel just down Pennsylvania Avenue from the White House. Trump’s lawyers have pledged to donate any money foreign governments pay that hotel to the Treasury Department. Yet, so far at least, Treasury’s website has no such line item and the money promised for 2017 has now been pushed into 2018. Keep something else in mind: the Trump family forecast that it would lose about $2 million on that hotel in 2017. So far, it has made nearly a cool $2 million profit there instead.
While gaining unprecedented international coverage for his family-owned, for-profit business locales, Trump has created an ethical boundary problem previously unknown in the history of American governments. After all, we, the people, functionally pay taxes to his business empire to host foreign dignitaries, to feed them and provide appropriate security. In this context, the president has made a point of having official state visits at his properties, which ensures that we taxpayers get hit for expenses when, say, Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe stay at Mar-a-Lago. Though the president swore he would cover Abe’s stay, there’s no evidence that it was more than a “fake claim.”
Meanwhile, the Trump brand rolls on abroad. Though his election campaign took up the banner of isolationism, the Trump Organization didn’t. Not for a second. On January 11th, days before placing his hand on the Bible to “defend the Constitution,” Trump proudly noted that he “was offered $2 billion to do a deal in Dubai with a very, very, very amazing man, a great, great developer from the Middle East… And I turned it down. I didn't have to turn it down because, as you know, I have a no-conflict situation because I'm president… But I don’t want to take advantage of something.”
He also promised that he wouldn’t compromise his office by working privately with foreign entities. His business empire, however, made no such promises. And despite his claims, Dubai has turned out to be ripe for a deal. This August, the Trump Organization announced a new venture there (via Twitter of course): Trump Estates Park Residences. It is to be “a collection of luxury villas with exclusive access to” the already thriving Trump International Golf Course in Dubai, a Trump-branded (though not Trump-owned) part of an ongoing partnership with the Dubai-based real-estate firm DAMAC. Its president, Hussain Sajwani, is well known for his close relationship with the Trump family. Units in the swanky abode are expected to start at about $800,000 each.
Meanwhile, DAMAC gave a $32 million contract to the Middle Eastern subsidiary of the China State Construction Engineering Corporation to build part of Trump World Golf Club, also in Dubai. That’s the same China that Trump regularly chides for not working with us properly. The course is scheduled to open in 2018.
So buckle your seatbelts. U.S. foreign policy and the Trump Organization’s business ventures will remain in a unique and complex relationship with each other in the coming years as the president and his children take the people who elected him for a global ride.
His Real Inner Circle
President Trump has made it abundantly clear that sworn loyalty is the route to staying in his favor. Unwavering dedication to the administration, but also to the Trump Organization, and above all to him is the definition of job security in Washington in 2017. Take the latest addition to his communications team, Hope Hicks, who has rocketed into her new career by making devotion to the Trump brand, including defense of daughter Ivanka, a central facet of her professional life. The 28-year-old Hicks has now been anointed the new White House communications director.
But she doesn’t have as much job security as one other group: The Donald’s personal legal team. For make no mistake, Trump’s financial dealings lie at the heart of his presidency, raising conflicts of a sort not seen at least since Warren Harding was president in the 1920s, if ever. And yet, even though they should be secure through at least 2020 and possibly beyond, one little slip about Russia in the wrong D.C. restaurant could see any one of them ushered out the door.
In 2011, the Supreme Court’s Citizens United decision rendered corporations people. It erased crucial campaign finance and lobbying restrictions, and elevated billionaires to the top ranks of the American political game. It was a stunning moment — until now. Donald Trump’s presidency is doing something even more remarkable. The billionaire who became our president has already left Citizens United in a ditch. He’s created not just a political campaign but a White House in which it’s no longer possible to imagine barriers between lobbying efforts, government decisions, and personal interest, or for that matter profits and policy.
In November, after the election, Trump announced that “the law's totally on my side, the president can't have a conflict of interest.” Recently, however, the Sunlight Foundation, a non-profit dedicated to government transparency, revealed 530 active Trumpian conflicts of interest and that’s after only eight months in office.
Theoretically, we still live in a republic, but the question is: Who exactly represents whom in Washington? By now, I think we can take a reasonable guess. When the inevitable conflicts arise and Donald Trump must choose between business and country, between himself and the American people, who do you think will get the pink slip? Who will be paying for the intermeshing of the two? Who, like the investors in his bankrupt casinos, will be left holding the bag? At this point, we’re all in the Washington casino and it sure as hell isn’t going to be Donald Trump who takes the financial hit. After all, the house always wins.
- The Awkward Moment When The State Department "Celebrates" Saudi Women Being Allowed To Drive
"We're just happy!" State Department spokesperson Heather Naurt said with a huge grin on her face.
The AP journalist immediately rains on her parade, "Would you still say they [Saudi Arabia] need to do… a lot more with women's rights?"
"I think we're just happy today…" she said, this time with a frown, trying to hold back her angry scowl.
Well that was awkward: the State Department's celebration party was over fast. It's like those embarrassing moments when parents catch themselves excessively gushing with praise over a horribly ill-behaved and out of control child that actually manages to sit still for a brief moment, or happens to do one minuscule task correctly.
.@statedeptspox on Saudi Arabia allowing women to drive: "We're happy…It's a great step in the right direction for that country." pic.twitter.com/AqAWC20J0p
— CSPAN (@cspan) September 26, 2017
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As we reported previously, Saudi Arabia made the unexpected announcement that its longtime ban on women driving in the hardline Islamic kingdom is set to be lifted. The decree comes just days after President Donald Trump slammed the US ally’s human rights record during remarks at the UN. The new policy will reportedly take effect starting on June 24 of next year, after a Saudi commission examines implementation procedures, which includes having to train police on how to interact with women – something unusual in a country where women are not even allowed direct communication with men who are not their family members or guardians.
Cartoon via "Finance twitter"Some activists and pundits are now non-ironically hailing the significance of today's decision as monumental in that Saudi Arabia has the dubious distinction of being "the last country on earth to allow women to drive." Well, this is true enough, yet there is something comical and at the same time deeply tragic in seeing feminists and western pundits alike celebrating the kingdom's "progress". It is not known for sure whether or not Saudi women will be able to drive without their male guardians, though it's not likely given that Saudi state media reported the royal decree as noting that driving will take place "in accordance with Sharia law." According to the New York Times:
The decree said that the majority of the Council of Senior Scholars — the kingdom’s top clerical body, whose members are appointed by the king — had agreed that the government could allow women to drive if done in accordance with Shariah law.
Next they will report that saudi women went to the toilet, making headlines across the globe https://t.co/6BfwJSpbhJ
— Madawi Al-Rasheed (@MadawiDr) September 26, 2017
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As recently as the past few years, women caught driving have been assigned to a special 'terror' court which has issued multiple months long sentences for what were essentially acts of protest. So no one should break out the champagne (also banned in Saudi Arabia) to celebrate the spectacle of fanatical Wahhabi clerics and religious police overseeing a program of "Sharia-compliant" female driving just yet.
And this truly pathetic state of affairs within one of America's closest Middle East allies is perhaps what makes today's State Department press briefing so awkward. Spokesperson Heather Nauert's gleeful and overexuberant reaction to news of the Saudi decree created an awkward moment as AP correspondent Matt Lee tried to remind her that Saudi Arabia is still among the most repressive states in the world when it comes to human rights, and especially women's rights.
Two years ago, we addressed the irony that Saudi Arabia was a leading candidate to lead a UN panel on human rights despite an international uproar at the time about the country's beheading of a teenaged political dissident (Saudi Arabia was eventually chosen to lead the panel). The influential panel helps shape the UN's human-rights policy and reports on violations. Earlier this year, the country was again bizarrely selected to lead the UN Commission on the Status of Women, a powerful committee focused on women's rights.
2 pm: I took the floor @UN to call out Saudi ban on women driving.
9 pm: Saudi Arabia announces end to ban on women driving.
That was fast. pic.twitter.com/E3AhUBFBxf— Hillel Neuer (@HillelNeuer) September 26, 2017
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Is it possible that Trump's calling them out, or perhaps other pressure from UN quarters resulted in the small change in Saudi treatment of women? And we also wonder, what freedoms will the country’s repressive regime acquiesce to next? Will it be suffrage for women (they’re already involved in political life, though they can’t vote)? Or perhaps allowing them to show their faces in public?
- "This Is Not A Time To Buy Anything" – Sam Zell Warns Retail Real Estate Market Is A "Falling Knife"
CNBC’s cheerleading staff had a very difficult time finding the silver lining in retail investing this morning as they relentlessly pressed Sam Zell on the value of commercial real estate. Asked to offer up his thoughts on where retail real estate is headed over the next five years, Zell highlighted the significant excess inventory in the U.S., 4-5x more per capita than Europe, and said investing in the space right now is like catching a “falling knife.”
“Like a falling knife. You start with the fact that the U.S. has 4 or 5 times the amount of square footage per person of retail as anywhere else in the world. So we start with an enourmously large inventory of retail.”
“3 years ago your could buy an 8% mall…you could buy a B-mall and it was probably an 8% cap rate. The same mall, 3 years later, is now selling at 13% and 14%. So you’ve seen enourmous erosion of value.”
“When the knife falls there’s going to be plenty of opportunities for people to step up and say ‘what are alternate uses?'”
Pressed on whether now just might be the time to take a contrarian view on the collapsing retail space, Zell again was unable to satiate the desires for positive news from his eager hosts.
“An area that’s in this much disarray, with so many weak players, is not an area where I would want to deploy capital at this time. And I’m generally a contrarian but I think what we’re dealing with here is very significant.”
Of course, things only went from bad to worse for the CNBC hosts when Zell offered up some positive commentary on Trump’s presidency. Per CNBC:
Corporate America is willing to invest money on a longer-term basis under President Donald Trump than the previous “anti-business administration” of Barack Obama, real estate mogul Sam Zell told CNBC on Tuesday.
“Bluntly, the only way I can square anything is I focus on what gets done, not what’s said,” the billionaire said on “Squawk Box.” “On a measure of what’s gotten done, I believe there’s been very significant change since Trump was elected in November, and change that is positive.”
Zell points to deregulation and promises of tax cuts and massive infrastructure spending as major positives for business.
“Just think that all of a sudden there are no industries that are pinata[s] of the president,” Zell said, referring as an example to what he called Obama’s campaign against fossil fuels.
“I’m more optimistic than I was six months ago. But I’m not ready to party,” Zell told CNBC on Tuesday, adding the current business environment is not one of buy anything and win. Investors need to pick carefully, he added.
Meanwhile, the most shocking part of the interview segments above is that CNBC didn’t encounter any “technical difficulties” as Zell offered up his positive comments on the Trump presidency while taking a shot a Obama.
- Africa's Richest Man: Oil Is Not The Way Forward
Authored by Irina Slav via OilPrice.com,
The richest man in Africa says crude oil prices would do Nigeria a favor if they stay lower for longer.
Last week at the UN General Assembly, Nigerian billionaire Aliko Dangote, whose main business is in cement but also holds interests in agricultural commodities and petrochemicals, said that agriculture – not crude oil – is the way forward for Nigeria, and that Africa “will become the food basket of the world.”
The latest economic data from Dangote’s home country tend to support his view. GDP grew by 0.55 percent in the second quarter of the year, which, although a meager growth rate, was welcomed because it signaled Nigeria’s exit from the recession that it plunged into due to the oil price crash.
The problem with this recovery, according to local economists, is that it was mainly a result of improving international oil prices rather than any actual economic growth at home. The figure, in other words, once again highlighted Nigeria’s reliance on crude oil revenues for its growth prospects.
Yet the country is already taking steps toward diversifying its economy away from the world’s most traded commodity. These steps were, like elsewhere, prompted by the oil price crash, and in Nigeria took the shape of a Zero Oil Agenda. The agenda, approved by President Muhammadu Buhari’s government, aims to wean the country off oil.
Second-quarter export figures suggest that things are moving in the right direction slowly, but hopefully surely. According to the National Bureau of Statistics, Nigerian exports in the second quarter of this year grew by an impressive 73.5 percent on an annual basis. Crude oil accounted for the biggest portion of the exports, at 42.57 percent, with other oil products making up another 21.86 percent.
This leaves less than a third for non-oil exports, but it seems that the government is happy: The head of the Nigerian Export Promotion Council, Olusegun Awolowo, noted that cashew nuts exports alone brought in $40 million (13.5 billion naira) in the second quarter.
The prioritization of agriculture as a greater export revenue stream is in perfect tune with Dangote’s business plans, especially with strong government support for the growth of this stream. The billionaire has $5 billion invested and planned for agricultural projects at home through 2020. Incidentally, he also spent $11 billion on the construction of a 650,000 bpd oil refinery, so it seems that oil does have a place in a diversified portfolio of businesses.
The subject of economic diversification away from oil has grown popular in the last couple of years, for obvious reasons. Yet efforts by major oil producers have shown that it’s easier said than done. Perhaps the biggest challenge to these efforts is the improvement in oil prices – it’s all too easy to slip back into the familiar rut. So, in this sense, Dangote is right: lower oil prices will provide the necessary stimulus to put more effort into diversification.
Nigeria, which was exempted from OPEC’s oil production cut deal, said it is ready to join the pact when its daily output hits 1.8 million barrels. In August, according to OPEC’s secondary sources, this output averaged 1.86 million bpd. Nigerian records put it at 1.74 million bpd. It seems Africa’s second-largest oil producer isn’t willing to relinquish its hold on oil too quickly.
- DirecTV Will Allow Angry Customers To Request NFL Refunds
In the first reported case of corporate blowback involving the ongoing Trump vs NFL feud, the WSJ reports that DirecTV is letting some angry customers cancel subscriptions to its Sunday Ticket package of NFL games and obtain refunds “if they cite players’ national anthem protests as the reason“, according to customer service representatives. While DirecTV’s regular Sunday Ticket policy doesn’t allow refunds once the season is under way, the representatives said they are making exceptions this season, which began in September, in response to the player’s growing protests, either kneeling or linking arms during the national anthem.
DirecTV service representatives contacted by The Wall Street Journal had different understandings of the policy. One said refunds to those concerned about the anthem protests were only offered to subscribers with certain offers or plans. One representative said full refunds were available for those who complained about anthem protests. Another said such people could only get prorated refunds for the remainder of the season.
While other representatives said the policy hadn’t changed and that no refunds were allowed for any reason, DirecTV subscribers contacted by the WSJ showed the satellite broadcaster was offering at least some refunds.
Marc Hoffman, a longtime subscriber to Sunday Ticket, which gives sports fans the ability to watch every Sunday game, said in an interview he was able to cancel his subscription and receive a refund on Monday. The package costs around $280 per season. “I honestly didn’t think I’d get a refund,” Mr. Hoffman said. “I know their guidelines, I just wanted to make a point.”
Chris Baker, who lives in Indiana, told the WSJ that he reluctantly canceled his Sunday Ticket subscription, but not precisely as a response to the protests. “I explained to them I was tired of politics in sports, and it’s not how I want to spend my Sunday, watching all that transpire,” he said he told a DirecTV representative. He said the representative “insinuated there was a high volume of calls calling in to cancel.”
The shift is the latest twist in a controversy that has divided the nation after President Donald Trump blasted players who took a knee during the anthem and said they should be fired. He has called on people to walk out of stadiums when players are kneeling.
To be sure, Trump added to the fire on Tuesday saying that “for people to disrespect that by kneeling during the playing of our national anthem, I think is disgraceful.”
While several teams have issued statements defending the rights of their players to express their opinion – and the NFL also has shown solidarity with them – the stakes are much higher, and go beyond just the political. As the WSJ reports, football draws the biggest TV audiences of American sports and is a vital income source for a host of major media companies. For DirecTV, Sunday Ticket is a major customer draw and one of the NFL’s premier franchises, earning it $1.5 billion a year in licensing revenue.
Aside from DirecTV, the NFL-owned channel RedZone, which provides live action and scoring from every game on Sundays, is also experiencing some cancellations due to the protests.
Chuck Plavk, a veteran who resides in Wisconsin, canceled his subscription to the channel from Charter Communications ’ Spectrum Cable. He said when he called, the customer service representative said, “everybody’s calling about that today.” Unlike Sunday Ticket, which is only available through DirecTV, RedZone is available through a number of cable providers and streaming outlets.
Needless to say, a spike in cancellations risk further damage to both viewership and revenues as the league tries to stem an ongoing decline in ratings. Viewership fell last year and, as Trump pointed out, continues to do so this year.
Network executives and league officials attributed last year’s declines in part to viewing competition from the presidential election, consumer distaste with the pace and quality of games.
And now, based on DirecTV’s announcement, one can add anthem protests to the list.
- Black Congresswoman 'Takes A Knee' On House Floor… Because "Trump's A Racist"
Texas Rep. Sheila Jackson Lee kneeled during a speech on the House floor Monday as a show of support for NFL players who demonstrated this weekend against President Trump.
As The Daily Caller reports, Jackson Lee said during remarks on the House floor…
“There is no basis in the First Amendment that says that you cannot kneel before the national anthem or in front of the flag,”
Jackson Lee, a member of the Congressional Black Caucus, took issue with a speech Trump gave on Friday in which he called on NFL owners to fire players who refused to stand for the national anthem.
Jackson Lee claimed that the “son of a bitch” remark was a racist comment by Trump.
“There is no regulation that says that these young men cannot stand against the dishonoring of their mothers by you calling them ‘fire the son of a b.’ You tell me which of those children’s mothers is a son of a b. That is racism. You cannot deny it. You cannot run for it, and I kneel in honor of them,” Jackson Lee said.
And in case you wondered why she specifically decided to 'take a knee' during her House Floor speech, this is what she said…
"…I kneel because I’m going to stand against racism. I kneel because I will stand with those young men, and I’ll stand with our soldiers. And I’ll stand with America, because I kneel…"
Clear enough?
Jackson Lee was not alone in her disdain as The Hill reports a second House Democrat kneeled on the House floor on Tuesday to show support for NFL players protesting police brutality.
Rep. Mark Pocan (D-Wis.) took a knee behind his podium at the end of a floor speech denouncing President Trump’s attacks on athletes who have been kneeling during the national anthem to draw attention to law enforcement’s treatment of African Americans.
“I think today, taking a knee is becoming a broader sign of patriotism and respect for our country,” Pocan said.
.@Repmarkpocan displays word cloud from President Trump's tweets and kneels at end of his remarks. #TakeAKnee pic.twitter.com/Dnjq7AnxRV
— CSPAN (@cspan) September 26, 2017
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Moments later on the House floor, Rep. Alex Mooney (R-W.Va.) defended Trump for calling on NFL players to stand during the national anthem.
“The president is right to publicly object to this disrespect to our flag and nation,” Mooney said.
“While we can disagree on politics and policies, we should not denigrate our flag in our national anthem.”
San Antonio Spurs coach Gregg Popovich went a little further than most, claiming on ESPN2’s “The Paul Finebaum Show” Monday that “people have to be made to feel uncomfortable,” specifically singling out white people.
“If you read some of the recent literature, you’ll realize there really is no such thing as whiteness, but we kind of made that up. That’s not my original thought, but it’s true,” Popovich said.
He added, “Because you were born white, you have advantages that are systemically, culturally, psychologically there. And they have been built up and cemented for hundreds of years. But many people can’t look at it. It’s too difficult.”
- Connecticut Lawmakers Scramble To Close $3.5 Billion Budget Shortfall As Fiscal Crisis Worsens
Despite a series of credit-rating cuts by all three of the major ratings agencies earlier this year, Connecticut still boasts a higher rating than Illinois and New Jersey. But that could soon change.
Lawmakers are squabbling over how to close a massive deficit expected to stretch to $3.5 billion over the next two years, which has left Connecticut as the only state in the US without a budget for the current fiscal year. And if lawmakers fail to pass a budget by the end of the month, it could trigger further cutbacks and in essential services.
The wealthiest state per capita, Connecticut has struggled to stabilize its deteriorating finances as generous (and underfunded) pension obligations and the departure of wealthy taxpayers like hedge-fund billionaire Paul Tudor Jones, Aetna and GE – two Fortune 500 companies that have decided to relocate their headquarters to New York City and Boston, respectively – have drained the state’s coffers, threatening to trigger a financial chain reaction that could end with the bankruptcy of the state’s historic capital, Hartford.
Initially one of roughly a dozen states that faced last-minute budget battles in June, the state has now gone nearly three months without a budget. It has been operating under an emergency order signed by Gov. Dannel Malloy that includes dramatic cuts in state funding for social services programs. Those cutbacks will expand if the standoff continues for another week, growing to encompass essential funding that Connecticut cities and municipalities rely on to fund public services from education to public safety, according to the New York Times.
The executive order that controls state spending has already frozen millions of dollars in contracts and grants and limited support sent to municipalities. If a new budget is not reached by Oct. 1, many towns and cities are expecting a much smaller fraction of the usual amount from the state – or nothing at all.
This month, city officials in Hartford, which faces a nearly $50 million deficit, sent a letter to the state cautioning that a failure to reach a budget compromise with sufficient aid would make pursuing bankruptcy almost inevitable. The officials, including the mayor, Luke Bronin, noted that further cuts would force them to eliminate, and not simply reduce, essential city services.
And now that Gov. Malloy has said he will reject a Republican sponsored proposal that passed both the Connecticut State Senate and the Assembly, lawmakers are scrambling to head back to the drawing board as their constituents warn of potentially devastating cuts if they’re not able to pass something – anything – that resembles a budget.
To be sure, the Republican proposal also called for dramatic cutbacks to the state’s share of municipal spending, as well as its contribution to the state university system.
“I was surprised when the budget went through,” said Sen. Len Fasano, a Republican leader, even though he helped orchestrated the effort. “I think it takes a lot of courage,” he added, referring to the Democrats who supported the plan.
At the University of Connecticut, which stood to lose at least $200 million over two years, its president, Susan Herbst, wrote a letter to students, faculty and alumni, warning of closing campuses and departments, ending majors and programs, as well as reductions in research, athletics and financial aid.
Mr. Malloy has vowed to veto the legislation, citing “irresponsible changes” to pensions, a lack of sufficient support for Hartford and other cities and cuts to school funding that he saw as excessive and threatening districts that struggled the most.
Some towns would have their entire state contribution cut, forcing them to cut public services to the bare minimum.
In Portland, a town of about 10,000 south of Hartford, officials said that if a budget were not reached by the start of next month, they stand to received just over $10,000 from the state – not the $4.6 million they had expected. “You just can’t do this to communities,” said Susan Bransfield, the first selectwoman.
“They need to leave the partisanship at the door, and put Connecticut first.”
Meanwhile, towns across the state have been unable to pass their budgets without knowing how much money they will receive from the state. Connecticut has seen its population decline over the past three years as Gov. Malloy has passed a series of tax hikes. Regardless of the outcome of this round of state-budget-chicken, Connecticut residents should probably brace for the possibility that taxes could rise further, while government services endure painful cutbacks.
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