Robert Kuttner, author of the New York Times Bestseller, Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency, appeared on ABC News’s Sunday roundtable program, This Week with George Stephanopolous, to discuss the economic downturn, the best route back to solvency, and the possibility of a new New Deal. Also on the panel are David Brooks, George Will, and Arianna Huffington.
Archive for November, 2008
This isn’t your grandfather’s socialism.
Yes, as we saw in the presidential election, the word “socialism” has become a slur: code for “anti-American.” But let’s get this straight. Woody Tasch (author of Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered) and the “holistic investors” like him aren’t trying to turn the US into Sweden, in his words. Instead, they’re “working hard to reintroduce social and environmental relationships into investing decisions and to say that they are essential to long term economic health.”
In other words, there are other things more important than money (although no one is claiming money isn’t important). But equally as important is your relationship to your community, to your food, to the planet.
Woody explains the radical concept of “slow money” in this interview on the SlowFoodUSA blog:
Q: In the book you say “Slow Food gives us a way to engage that is proactive, even celebratory.” What does celebratory investing look like?
Tasch: Let’s just say that when that answer is clear to the world then…it will be a beautiful thing! It’s funny you should ask that because I just shared a day dream with a bunch of investors in Vermont, that at the end of a Slow Money investors conference we would all be dancing together in the aisles like attendees were at the end of Terra Madre.
Right now there is no such thing as celebratory investing; there’s no such thing as investors sharing the joy of building something together and celebrating community like Amish people building a barn. May of us are, in fact, building a new, restorative economy, one bit at a time but we don’t know how to celebrate the process. No, celebratory investing is still a ways off in the distance.
Q: You discuss the economic terms “internal” and “external accounting,” with external accounting being that which takes into account “multiple stakeholders and qualitative distinctions.” Do you think that now, after the collapse of our financial system that investors are finally ready/willing to look at external accounting?
Tasch: The whole question of externalities, it is both aspirational and pragmatic, meaning there are a whole bunch of people right now who have been working on statistically relevant, defensible metrics that can add social and environmental metrics to financial metrics. I consider this very important incremental change, but it’s only incremental because where were trying to get to is an economy where investors are close enough to that which they are investing in that they can make qualitative judgments about it. If you were living down the street, in enough proximity to that which you were investing in, or even just knew enough about that which you were investing in, if you knew the managers of the business personally and trusted their values completely, you wouldn’t need to rely solely on quantitative metrics.
Where we need to head is away from bigger and bigger and more and more complicated enterprises, to an economy that celebrates—there’s that word again—enterprises that are smaller, less centralized, more comprehensible. We need to return to a world where people make qualitative judgments and aren’t afraid to.
Q: The word socialism comes up more than once in the book. As witnessed during the recent presidential election, “socialist” is a slur these days. What’s your take on it? Is socialist a bad word for an investor? Can capitalism and socialism be bosom buddies?
Tasch: You know, the phrase “social investing” is already widely used. It’s not called “socialist investing” and there’s a reason. We are reasserting the value of relationships between people and the environment as equal to economic transactions.
In this video from Bioneers by the Bay 2008, organic farmer Eliot Coleman (author of The Four Season Harvest: Organic Vegetables from Your Garden All Year Long and The New Organic Grower: A Master’s Manual of Tools and Techniques for the Home and Market Gardener) gives a presentation entitled “The Farm That Won’t Wear Out.” In it, he discusses the millennia-old practice of crop rotation, organic versus authentic farming, the magic of compost, and his unlikely friendship with a lifelong Monsanto chemical salesman.
Coleman emphasizes “paying attention to the free inputs of the natural world”—which doesn’t exactly lend itself to a product-based retail business, much to the chagrin of the Monsanto salesman.
One day I did read a book about small farming and there was a line in there that impressed me more than anything I had ever read. It said that in a teaspoonful of fertile soil there are over a million live organisms. And as an adventurer you usually try and explore places where no one has gone before, and I thought, “My gosh. Of all the exciting places to explore, think of that. There are a million live organisms in each teaspoon of fertile soil? This could get interesting.”
When Prince William Sound was opened up to oil tankers, Exxon promised not one drop of oil would be spilled in Alaskan waters. In 1989, the Exxon Valdez spilled 11 million gallons of oil into the sound (though some estimates put the figure much higher).
After the incident, an Exxon Corp. spokesman told the people of Cordova, “We will make you whole again.” For the next 20 years, Exxon’s army of lawyers fought tooth and nail to reduce the original punitive damages awarded by the court from $5 billion to $507 million.
When a neglected British Petroleum oil pipeline spilled 250,000 gallons of oil onto Alaska’s north slope, the company got off “got off by agreeing to one misdemeanor count and paying a total of $20 million in fines and restitution. The EPA had calculated the appropriate fine levels — depending on economic assumptions — at $58 million all the way up to $672 million.”
In a statement submitted by Public Employees for Environmental Responsibility, retired [Environmental Protection Agency] agent Scott West said:
“Never … have I had a significant environmental criminal case shut down by the political arm of Justice, nor have I had a case declined by the Department of Justice before I had been fully able to investigate the case. This is unprecedented in my experience.”
And now Alaska Gov. Sarah Palin has failed to oppose the interests of big oil, essentially selling out the fishermen whose interests she once promised to defend.
On Tuesday, the Bureau of Land Management quietly opened 1 million acres of land in the Bristol Bay region to petroleum and mineral exploration.
How did things come to such a pass?
Dr. Riki Ott—marine biologist, salmon fisherma’am, and author of Not One Drop: Betrayal and Courage in the Wake of the Exxon Valdez Oil Spill—believes corporations have been given far too much power and influence over our government. She recently started a movement which is quickly gaining traction: the 28th Amendment to the US Constitution—the separation of corporation and state. The amendment would strip corporations of their personhood and put the power back in the hands of the American people.
While running for governor in 2006, Palin cited her roots in a fishing family and appeared to oppose the Pebble Mine, a giant open pit gold-and-copper project proposed in the headwaters country of the Kvichak and Nushagak rivers.
In office, she promptly joined with the mining and petroleum industries to oppose Proposition 4, a clean-water measure on Alaska’s ballot. “We’re going to make sure that mines operate only safely, soundly,” Palin opined. (Prop. 4 was buried beneath industry money.)
Such claims ring familiar.
Prince William Sound fishermen began raising safety questions in the mid-1970s when the Trans-Alaska Pipeline turned Valdez into an oil port.
“The fears about damage from oil spills are like the fears of Henny Penny when she ran to tell the king that the sky was falling,” snorted the Anchorage Times, long (but no longer) the voice of Alaska boomers.
Yogi Berra put it best: It’s déjà vu all over again. As it drills wells in the Chukchi Sea, Shell Oil is delivering the same sheen of assurance to Arctic villages and native subsistence hunters.
“As a company, we could never afford an oil spill in the Arctic. We just can’t afford to have that happen,” Marvin Odum, president of Shell Oil Co., said in an Anchorage speech this month.
Can we believe in enforcement and oversight, when the feds let BP off with a wrist slap?
From Glenn Greenwald’s “Unclaimed Territory” at Salon.com:
A federal district judge, Richard Leon, today ordered the Bush administration “forthwith” to release five Algerian detainees who have been held in Guantanamo without charges since January, 2002 — almost seven full years. The decision was based on the court’s finding that there was no credible evidence that the 5 detainees intended to take up arms against the U.S.
Even if President Obama closes the prison at Guantánamo, as he has repeatedly promised to do, it will still be far too late for those prisoners who were unjustly held without trial—without even having been formally charged with any crime. The question now is, can the US repair its damaged reputation?
The torture program was an assault on the prohibition against torture and war crimes—But it was also and importantly an assault on law itself. Or as Scott Horton said in a recent Harpers article said: the administration waged war against the law itself. If laws can be broken with impunity today, they can and will be broken with impunity tomorrow. [Emphasis added.] Not just laws against torture and war crimes, but any and all laws; any and all limits on government.
Insuring that this never happens again and limiting government does just that: it limits. This is why criminal investigation and prosecution is necessary.
Sadly some anonymous Obama team members and Democrats in congress are reluctant to take this step. Some claim it is looking backwards. It is not. Investigations and prosecutions are our insurance that limits on government will be adhered to in the future.
Investigation and prosecution send the warning to the future: Don’t commit those acts again. You will be prosecuted.
Will there be prosecutions? It’s doubtful. But it’s clear something must be done to ensure this never happens again.
Here is a gut-wrenching account of what these detainees have endured (h/t Ondelette). The Bosnian Prosecutor who investigated their initial detention back in 2001 (which was effectuated at the behest of the U.S.) concluded they ought to be released, but the Bosnian Government succumbed to the pressure of the Bush administration and turned them over to the U.S. as they were being released (“hooded, shackled, and packed into waiting cars while their horrified families watched”), after which they were shipped to Guantanamo.
One of the detainees ordered released today had a wife who was pregnant at the time he was shipped to Guantanamo, who then gave birth to a daughter, now 6, whom he has never met. Another of the Bosnian-Algerians had an infant daughter at the time he was put in Guantanamo who died last year of congenital heart disease at the age of 6. Another of them “suffered months of facial paralysis from a brutal beating inflicted by Guantanamo camp soldiers.” And then there’s this, about one of the other detainees, Saber Lahmer:
When we last saw Saber in November, he was in his sixth month of solitary confinement. Since August, he has seen us, his legal team, twice and a psychiatrist on three brief occasions. For a few minutes each day, he sees the camp guards who bring his meals. He has had no other human contact. The glaring lights in his cell are on 24 hours a day, seven days a week. When we left the cell, we could hear Saber shouting — brief, truncated cries. We could not understand what he was saying.
According to Human Rights Watch, that detainee — “a university-educated father of two who once taught at the Islamic Cultural Center in Bosnia” — “continues to be housed 22 hours a day in a single cell, with nothing to occupy his time other than his Koran” and “now reports that he is going blind in his left eye, a result that he attributes to being housed in cells with fluorescent lights on 24 hours a day.”
We haven’t just imprisoned people with no evidence in cages for years. We’ve kept them encaged under often brutal and extreme conditions, many in unbroken solitary confinement for years. Today, a federal court ruled that for 5 of these men, there is no credible evidence that they did anything wrong, and if most of our political class — which supported the Military Commissions Act– had its way, they wouldn’t have even had this hearing at all.
As we saw in Naomi Wolf’s End of America: Letter of Warning to a Young Patriot, governments seeking to close down an open society tend to follow an established blueprint: the “ten steps.” Step Nine is to cast dissent as “treason,” which includes jailing those who refuse to fight unjust and illegal wars.
Robin Long was locked up and sentenced to fifteen months in a naval brig in California for refusing to participate in the invasion of Iraq. His letter to President-elect Barack Obama requesting clemency is partially reprinted here.
Dear President-elect Obama,
My name is Robin Long. I am currently serving a 15-month sentence at a Naval brig in California. I am locked up for refusing to participate in the invasion of the sovereign nation of Iraq, a military action I felt was wrong and an action condemned by most of the international community.
It was illegal and immoral.
My sentence also includes dishonorable discharge. I was no doubt made an example, because not only did I refuse to deploy by going AWOL but I spoke out. I spoke out about the atrocities that are going on over there and also the extensive web of lies the Bush administration told us and Congress, to go over there. I did all of this very openly while AWOL in Canada, where I was making a life for myself.
When I joined the Army in 2003 I felt honored to be serving my country. I was behind the President. I thought it was an honorable venture to be in Iraq. I was convinced by the lies of the Bush administration just like Congress and a majority of Americans. But just because I joined the Army doesn’t mean I abdicated my ability to evolve intellectually and morally. When I realized the war in Iraq was a mistake, I saw refusing to fight as my only option. My conscience was screaming at me not to participate.
I feel, like many others, that a government that punishes its citizens for taking a moral stand for humanity and against injustices will lose the faith of its people. The war in Iraq was a Bush administration mistake and my punishment is a product of that mistake and failed policy. Please see that I am being punished for my ideals and morals and for standing up to a giant so my voice could be heard. People can’t be afraid to stand up and say “This is wrong, we need change.”
You may say I signed a contract. I’d like to quote from a letter that Thomas Jefferson wrote to George Washington in April of 1793 on his thoughts of contracts and the French Treaties. And I quote “When performance, for instance, becomes impossible, non-performance is not immoral. So if performance becomes self destructive for the party, the law of self preservation overrules the laws of obligations to others. For the reality of these principals I appeal to the true fountains of evidence, the heart and head of every rational honest man.”
For me to continue to participate in my military contract would have been self-destructive to me at my deepest levels of self. It goes against everything I believe in, my ideals and morals. In the case of the invasion of Iraq, international law was broken, as well as violating our own Constitution. Article VI of the Constitution states that any treaty the US is signatory shall be the supreme law of the land. The invasion broke the rules set out for declaring war in the Geneva Convention. And according to the Nuremburg Principles laid out at the Nuremburg Tribunals, I had a higher international duty supported by our Constitution to refuse service in Iraq.
To see for yourself what “conditions on the ground” are really like, take a look at:
In the U.S.-led invasion of Iraq, official truth died months before the bombing of Baghdad began. Unembedded bears witness to the enduring power of independent journalism. In their unflinching look at war-ravaged Iraq, four freelance photojournalists show that life there is brutal yet poignant; that compassion co-exists with anger, hatred and fear. By gaining the confidence of Iraqi civilians and insurgents, these photojournalists have brought back images of life in wartime, from beauty parlors and joyful wedding scenes to the carnage of civilian casualties, the heartbroken faces of grieving parents, and the glassy-eyed shock of parentless children.
Naomi Wolf, author of The End of America: Letter of Warning to a Young Patriot and Give Me Liberty: A Handbook for American Revolutionaries, is one of the authors profiled in Joseph Sottile’s new movie, The Warning. Sottile interviews Robert F. Kennedy, Jr., Naomi Wolf, Chris Hedges, Naomi Klein, and Joe Conason to “[trace] the dangerous path America has [taken] toward a new, un-democratic form of government,” and examine “some startling similarities to authoritarian regimes of the past. Five authors, during extensive interviews, expose the political and economic forces behind this transformation of American democracy.”
Join Joseph Sottile and the moderators at FireDogLake tonight to participate in a live forum discussion. The Book Salon lounge opens at 8:00 PM Eastern.
Something unprecedented has happened in America:
- Illegal surveillance and suppression of dissent
- Controlled mass media and unchecked corporate power
- Fraudulent elections and a Unitary Executive that sanctions torture
Robert Kuttner, co-founder of The American Prospect and author of Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency, is concerned that nearly every one of Obama’s picks for his economic team come from the same centrist club: the protégés of former Treasury Secretary and current Citigroup executive Robert Rubin.
As progressives, we can view President-Elect Obama’s emerging economic team in one of two ways. Either he has disappointed us by picking a group of Clinton retreads–the very people who brought us the deregulation that produced the financial collapse; the fiscal conservatives who in the 1990s put budget balance ahead of rebuilding public institutions. Or we can conclude that he has very shrewdly named a team of technically competent centrists so that he can govern as a progressive in pragmatist’s clothing–as he moves the political center to the left.Which will it be? Certainly, Obama’s press notices are phenomenal, and Republicans have almost been more enthusiastic than Democrats. When Arianna Huffington and I debated George Will and David Brooks on George Stephanopulos’s This Week Sunday morning, the conservatives were, if anything, more approving of Obama’s picks than we were.
On another channel, Republican guru Ed Rollins could be heard exulting about the Obama cabinet. I even had the out-of-body experience of debating Pat Buchanan on Hardball, to find that he thought Hillary Clinton was a terrific choice for Secretary of State. Obama now has the highest approval ratings on record for any president-elect, and he has the entire Republican pundit class in a swoon.
The honeymoon can’t last, of course, for Obama soon has to make very tough choices: whether to spend massive amounts of federal money to head off a depression; whether to embrace large-scale deficit spending as a temporary stimulus and then to go on to rebuild public investment so that we can have the 21st century infrastructure, energy, and human services that we need; whether to get serious about financial regulation so that the economy is never again brought down by excessive speculation. Whether to rescue the auto industry by imposing very tough conditions in exchange for public aid.
To do all of this right, he may need to nationalize a bank or two rather than just throwing public money at Wall Street, Paulson fashion. The requested aid to the auto companies exceeds the total value of their common stock. We need a plan for a conversion to energy-efficient cars, with a majority of public members on company boards in exchange for the public subsidy; this in turn violates norms of “free trade” by committing the sin of industrial policy. And we need direct government refinancing of distressed mortgages rather than aid to bondholders and banks.
Will Obama do any of this? He has reality on his side. He will have to think and move radically in order to save the economy. By January 20 we will be tottering on the edge of a depression. The entire conservative paradigm is now disgraced. Republicans may support a large initial stimulus package, for their districts are suffering along with Democrats. But they will want it be mostly in the form of tax cuts rather than public investment; and they are likely to oppose much of the rest of Obama’s program. The bolder it is, the more rightwing opposition Obama will invite. By January, the lkikes of George Will and David Brooks will be aghast (I hope).
Obama may describe himself as a pragmatist who transcends ideology and bridges differences. But there is no denying the plain fact that only progressive remedies, of large scale public spending and stringent government regulation, will fix what’s broken.
Which brings me back to Obama’s economic team. Leaks suggest that it will include Tim Geithner as Treasury Secretary; Lawrence Summers as a senior White House adviser, perhaps head of the National Economic Council; Peter Orszag as director of OMB; and Jason Furman, Austan Goolsbee and Jack Lew in other senior economic positions. All are relative centrists. And with the exception of Goolbee, the one thing that all have in common is that every one is a protégé of former Treasury Secretary and current Citigroup executive Robert Rubin. Even Hillary Clinton, as president, might have found a fresher group.
What kind of magic does this man Rubin have? He was one of the key Democratic architects of the extreme financial deregulation that brought the economy to this pass. At Citi, he was one of the grand strategists of the speculation in securitized loans and off-balance-sheet gimmicks that has brought Citi to the edge of bankruptcy. Yet he continues to fall upwards. Surely Barack Obama must have noticed that Rubin is a false prophet. So why is his entire senior economic group a Team of Rubinistas?
Two of our favorite sustainability writers, Simran Sethi (co-author of Ethical Markets) and Van Jones (author of The Green Collar Economy [HarperOne, 2008]), had a lively onstage discussion at Bioneers by the Bay 2008. The two discussed the false opposition of economic growth vs. environmental stewardship (We can’t have both? Of course we can!), growing the renewable energy industry, and how to rescue the US economy.
Van Jones: This breakdown is horrible. Awful. Frightening. And inevitable. And inevitable. Because we got sold a bill of goods in this country. For the past thirty years, we tried to run our economy based on consumption, not production; based on debt, not smart savings and thrift, like our grandparents; and based on environmental and ecological destruction, not ecological restoration. Well, that is, by definition, not sustainable. You cannot build an economy up on credit cards. That’s what we have been trying to do. So US consumption became the center of the world economy, not US production. Now we have this horrible breakdown. But it represents a possibility of a breakthrough, back to an economy that makes sense. We’ve got to stop borrowing from overseas and start building again here at home. We’ve got to stop relying on credit from overseas and start relying on our creativity here at home. That is the pathway to a sustainable future.
Investing your money into a mutual fund is like putting your money in a black hole—or turning it into the black smoke belching out of a Chinese factory. There’s no connection between you, your money, or real goods. And this kind of investing contributes to an unsustainable, irresponsible system.
What if you took that money and invested it 20 miles away from your home, in a farm growing natural food sustainably—food that you, your family, and your community can enjoy? What if you slowed your money down?
Woody Tasch, chairman of the nonprofit Investors’ Circle and author of Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered, recently sat down to talk with Jean Weiss of MSN Green about sustainable, triple-bottom-line investing: people, planet, and profit.
You need only look as far as your latest 401k statement to grasp the profoundly personal implications of the sub-prime mortgage collapse. Yet you may not have linked this crisis to your local food system. For Woody Tasch, founder of the slow money movement and author of the book Inquiries Into the Nature of Slow Money (Chelsea Green, November 2008), the relationship between capital and soil is clear. Tasch is the chairman of Investor’s Circle, a network of investors that meets this week in Boston to fund startups that focus on sustainable business practices. In Slow Money, Tasch suggests a financial paradigm shift that mirrors the tenets of the slow food movement: valuing local food systems over global, industrialized food systems. We caught up with Tasch this week to talk about why slow money may be a long-term solution to sustainable finance.
MSN.com Green: This is a big concept for those new to the idea of scaling back our investment expectations. How would you describe what slow money means?
Tasch: It means we have to find ways to steer meaningful quantities of investment capital and sustainable capital to build local food systems. Essentially, to prioritize places over markets. There is such a thing as money that is too fast, companies that are too big, intermediation that is too complex. Slow money enables the financial and cultural transformation toward rebuilding social and environmental relationships that industrialization has destroyed.
MSN.com Green: Why would this be a leap for most investors?
Tasch: Most food companies have limited growth potential. And investors are trained to focus exclusively on markets and sectors, rather than on places. Slow money poses the question: What would the world be like if everyone invested 50 percent of their assets within 50 miles of where they live?
MSN.com Green: How do you see the link between food, soil and capital?
Tasch: This connection can be a beautiful wake up call. Soil is tangible, it’s very grounding, and yet it also has a bit of mystery to it. Nutrients connect from the soil up to the food. There’s a certain epicurean, artisan, heirloom aspect of food. There is an element of pleasure, of conviviality. If you understand how important food is, you realize our environmental concerns are not just about parts per million of carbon in the atmosphere. It’s also about soil fertility. Since World War II, we have been rapidly mining our soil in order to produce cheap industrialized food. In the long term, this type of investment leads to fiscal and environmental collapse.