On

Uncertainties

US banks set aside a record $37.1bn to cover losses on real estate loans and other credits during the first quarter in a sign of the growing economic pain being caused by the global credit crisis, regulators said on Thursday.

Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation, said it was likely loan-loss provisions and bank failures would rise in coming quarters as the fallout from market turmoil hits the real economy.

“While we may be past the worst of the turmoil in financial markets, we’re still in the early stages of the traditional credit crisis you typically see during an economic downturn,” she said, adding: “What we really need to focus on is the uncertainty surrounding the economy . . . and again it is all about housing.”

Ms Bair spoke as the FDIC released its quarterly banking profile, which showed loan-loss provisions in the first quarter were more than four times higher than last year’s level. That was the main reason bank earnings fell 46 per cent to $19.3bn from the first quarter in 2007 for the commercial banks and savings institutions where the FDIC insures customer deposits.

Following restatements by banks, the FDIC revised the industry’s net income for the fourth quarter of last year from $5.8bn to $646m – the lowest since the end of 1990.

Meanwhile, the FDIC said the number of “problem” banks rose in the first quarter from 76 to 90, with combined assets of $26.3bn. Three US banks have failed this year, compared with three for the whole of last year and none in 2005 and 2006.

Ms Bair said she expected more bank failures but emphasised that the number of problem institutions remained well below the record levels of the savings and loan crisis of the 1980s and 1990s – when one in 10 banks were in that category.

However, she said one worrying trend was the declining “coverage ratio”, which compares bank reserves with the level of loans that are 90 days past due. This ratio fell for the eighth consecutive quarter, to 89 cents in reserves for every $1 of noncurrent loans, the lowest level since the first quarter of 1993.

“This is the kind of thing that gives regulators heartburn,” said Ms Bair. “We also want them to beef up their capital cushions beyond regulatory minimums given uncertainty about the housing markets and the economy . . . It’s only prudent to be building up capital at a time like this.”

In a sign that some US banks may have underestimated the cost of the housing slump, KeyCorp this week doubled its forecast for loan losses – its second revision in as many months – sending its share price tumbling by more than 10 per cent. During the property boom, KeyCorp expanded in fast-growing regions such as southern California and Florida, where problem loans are now growing.

Trinary

Relocalization Automatique

The rising price of oil is making international trade of heavy cargo prohibitively expensive, and acting as an incentive for importers to find products such as steel closer to home, new research by CIBC World Markets shows.

For heavy products, rising shipping costs are eroding the low-wage advantage of China over North America, say chief economist Jeff Rubin and senior economist Benjamin Tal.

If oil prices continue to rise, the soaring cost of global transport will act like a major tariff barrier and lead to a substantial slow down in international trade, they argue.

“Globalization is reversible,” they state.

High fuel costs are expected to have a dramatic impact on trade patterns, as businesses look for supplies closer to home.

Oil passed $133 (U.S.) a barrel on Monday, and Mr. Rubin forecasts the price will average $106 this year, $130 next year, $150 in 2010 and $225 by 2012.

These days, the cost of oil is the equivalent of imposing a tariff rate of about nine per cent on goods coming into the United States. At $150 a barrel, transport costs act like a tariff of 11 per cent. And at $200, all the trade liberalization efforts of the past 30 years are reversed, Mr. Rubin said.

Oil prices now account for about half of total freight costs, and for the past three years, for every $1 increase in world oil, there has been a corresponding one per cent increase in transport costs.

“Unless that container is chock full of diamonds, its shipping costs have suddenly inflated the cost of whatever is inside,” Mr. Rubin said. “And those inflated costs get passed onto the Consumer Price Index when you buy that good at your local retailer. As oil prices keep rising, pretty soon those transport costs start cancelling out the East Asian wage advantage.”

Persistently high oil prices will also cause many commuters to consider moving to the city, reversing the allure of the suburbs, he said. And it could also force a change in eating habits, as foreign food becomes too expensive to ship.

“It means forget about that 50-mile commute from Cooksville to Toronto, and also forget about that avocado salad in January.”

More fundamentally, the soaring oil price will prompt a major rethinking of how production is organized, Mr. Rubin argues, and could even lead to a revival of North American manufacturing.

Already, U.S. imports of Chinese steel are declining dramatically, while domestic production is rising at rates not seen for years, they say.

China's steel exports to the United States are falling at a 20-per-cent annual pace, while U.S. domestic production has risen by 10 per cent in the past year. That makes sense, the economists say, because Chinese steel producers need to import iron ore from the likes of Australia and Brazil, then turn it into steel and then pay huge and rising freight costs to send the hot-rolled steel to the United States.

Regional trade looks much cheaper in comparison, they say.

As oil prices continue to climb, shipments of furniture, footwear and machinery and equipment are likely to meet the same fate, the economists say.

“In a world of triple-digit oil prices, distance costs money,” they say in a paper released Tuesday. “And while trade liberalization and technology may have flattened the world, rising transport prices will once again make it rounder.”

At first glance, such developments may seem to favour a renaissance of the moribund steel mills and boarded up furniture plants of Canada. But high oil prices won't eliminate importers' search for cheap labour. Instead, they're eyeing Mexico.

“Instead of finding cheap labour half-way around the world, the key will be to find the cheapest labour force within reasonable shipping distance to your market,” CIBC says.

“In that type of world, look for Mexico's maquiladora plants to get another chance at bat when it comes to supplying the North American market. In a world where oil will soon cost over $200 per barrel, Mexico's proximity to the rest of North America gives its costs a huge advantage.”

While high oil prices will require major reorganization of global supply chains, the bigger danger comes in the form of inflationary pressure, Mr. Rubin warns.

“If you're a steel buyer, your costs are going up regardless of whether you are sourcing it from China or Pittsburgh,” he says, saying the same dynamic applies to Hamilton.

Soon, the United Steelworkers of America will want a piece of that higher price, and wages that have been kept flat for years because of labour competition from Asia will begin to rise.

He doesn't necessarily see a return to the double-digit inflation of the early 1980s, but figures the central banks in the United States and eventually Canada will have to begin raising rates dramatically in order to confront inflation running at around 3.5 or 4 per cent annual pace. Canada's target is two per cent a year.

Upsidedn

Energy Crash Survivalists

A few years ago, Kathleen Breault was just another suburban grandma, driving countless hours every week, stopping for lunch at McDonald's, buying clothes at the mall, watching TV in the evenings.

That was before Breault heard an author talk about the bleak future of the world's oil supply. Now, she's preparing for the world as we know it to disappear.

Breault cut her driving time in half. She switched to a diet of locally grown foods near her upstate New York home and lost 70 pounds. She sliced up her credit cards, banished her television and swore off plane travel. She began relying on a wood-burning stove.

"I was panic-stricken," the 50-year-old recalled, her voice shaking. "Devastated. Depressed. Afraid. Vulnerable. Weak. Alone. Just terrible."

Convinced the planet's oil supply is dwindling and the world's economies are heading for a crash, some people around the country are moving onto homesteads, learning to live off their land, conserving fuel and, in some cases, stocking up on guns they expect to use to defend themselves and their supplies from desperate crowds of people who didn't prepare.

The exact number of people taking such steps is impossible to determine, but anecdotal evidence suggests that the movement has been gaining momentum in the last few years.

These energy survivalists are not leading some sort of green revolution meant to save the planet. Many of them believe it is too late for that, seeing signs in soaring fuel and food prices and a faltering U.S. economy, and are largely focused on saving themselves.

Some are doing it quietly, giving few details of their preparations — afraid that revealing such information as the location of their supplies will endanger themselves and their loved ones. They envision a future in which the nation's cities will be filled with hungry, desperate refugees forced to go looking for food, shelter and water.

"There's going to be things that happen when people can't get things that they need for themselves and their families," said Lynn-Marie, who believes cities could see a rise in violence as early as 2012.

Lynn-Marie asked to be identified by her first name to protect her homestead in rural western Idaho. Many of these survivalists declined to speak to The Associated Press for similar reasons.

These survivalists believe in "peak oil," the idea that world oil production is set to hit a high point and then decline. Scientists who support idea say the amount of oil produced in the world each year has already or will soon begin a downward slide, even amid increased demand. But many scientists say such a scenario will be avoided as other sources of energy come in to fill the void.

On the PeakOil.com Web site, where upward of 800 people gathered on recent evenings, believers engage in a debate about what kind of world awaits.

Some members argue there will be no financial crash, but a slow slide into harder times. Some believe the federal government will respond to the loss of energy security with a clampdown on personal freedoms. Others simply don't trust that the government can maintain basic services in the face of an energy crisis.

The powers that be, they've determined, will be largely powerless to stop what is to come.

Determined to guard themselves from potentially harsh times ahead, Lynn-Marie and her husband have already planted an orchard of about 40 trees and built a greenhouse on their 7 1/2 acres. They have built their own irrigation system. They've begun to raise chickens and pigs, and they've learned to slaughter them.

The couple have gotten rid of their TV and instead have been reading dusty old books published in their grandparents' era, books that explain the simpler lifestyle they are trying to revive. Lynn-Marie has been teaching herself how to make soap. Her husband, concerned about one day being unable to get medications, has been training to become an herbalist.

By 2012, they expect to power their property with solar panels, and produce their own meat, milk and vegetables. When things start to fall apart, they expect their children and grandchildren will come back home and help them work the land. She envisions a day when the family may have to decide whether to turn needy people away from their door.

"People will be unprepared," she said. "And we can imagine marauding hordes."

So can Peter Laskowski. Living in a woodsy area outside of Montpelier, Vt., the 57-year-old retiree has become the local constable and a deputy sheriff for his county, as well as an emergency medical technician.

"I decided there was nothing like getting the training myself to deal with insurrections, if that's a possibility," said the former executive recruiter.

Laskowski is taking steps similar to environmentalists: conserving fuel, consuming less, studying global warming, and relying on local produce and craftsmen. Laskowski is powering his home with solar panels and is raising fish, geese, ducks and sheep. He has planted apple and pear trees and is growing lettuce, spinach and corn.

Whenever possible, he uses his bicycle to get into town.

"I remember the oil crisis in '73; I remember waiting in line for gas," Laskowski said. "If there is a disruption in the oil supply it will be very quickly elevated into a disaster."

Breault said she hopes to someday band together with her neighbors to form a self-sufficient community. Women will always be having babies, she notes, and she imagines her skills as a midwife will always be in demand.

For now, she is readying for the more immediate work ahead: There's a root cellar to dig, fruit trees and vegetable plots to plant. She has put a bicycle on layaway, and soon she'll be able to bike to visit her grandkids even if there is no oil at the pump.

Whatever the shape of things yet to come, she said, she's done what she can to prepare.

Lazy

Draft?

In an exchange sure to send ripples of anxiety through the all-volunteer military, the Senate's senior defense spending member asked Defense Secretary Robert Gates and Joint Chiefs Chairman Adm. Mike Mullen if it is time to "consider reinstituting the draft."

Sen. Daniel Inouye (D-Hawaii), chairman of the Senate Appropriations defense subcommittee, asked Gates and Mullen the question he said no one wants to ask: "Is the cost of maintaining an all-volunteer force becoming unsustainable and, secondly, do we need to consider reinstituting the draft."

Inouye cited the ever-increasing pay and benefits paid to active and reserve service members, noting that it now costs an estimated $126,000 per service member.

Gates and Mullen both said they thought the current volunteer force was the finest the U.S. has ever fielded. Gates said he "personally" believes that "it is worth the cost."

Mullen was not quite as sanguine.

"A future that argues for, or results in, continuous escalation of those costs does not bode well for a military of this size," he said, adding it the rising costs will eventually force the US to shrink the military, spend less on new weapons or to "curtail operations." The question of pay and benefits for the U.S. military "is the top issue we need to come to terms with," Mullen said.

This marks the first time a senior member of Congress has seriously discussed reinstituting the draft in almost two years. Rep. Charlie Rangel (D-NY), chairman of the powerful House Ways and Means Committee, called for reinstituting the draft in November 2006.

Tuesday's discussion occurred during debate over the pending $70 billion emergency supplemental spending bill. Senate Majority Leader Sen. Harry Reid (D-Nev.) said Tuesday that the bill was unlikely to move before Labor Day, requiring a one month extension of war spending.

In related news, Gates was asked by Republican Sen. Thad Cochran of Mississippi during the appropriations hearing what would happen if the 2009 defense spending bill were not passed, requiring what is known as continuing resolution to provide the Defense Department with money.

Gates, clearly prepared for the question, said the department would face enormous losses should Congress rely on a resolution, losing nearly $8.7 billion dollars for increasing the size of the Army and Marine Corps, and see $246 million for the new Africa Command vanish along with $1.8 billion for base closure and realignment. A continuing resolution effectively funds a department at the levels it received the year before.

Source - Military.com

Home?

Manufacturing A Food Crisis

When tens of thousands of people staged demonstrations in Mexico last year to protest a 60 percent increase in the price of tortillas, many analysts pointed to biofuel as the culprit. Because of US government subsidies, American farmers were devoting more and more acreage to corn for ethanol than for food, which sparked a steep rise in corn prices. The diversion of corn from tortillas to biofuel was certainly one cause of skyrocketing prices, though speculation on biofuel demand by transnational middlemen may have played a bigger role. However, an intriguing question escaped many observers: how on earth did Mexicans, who live in the land where corn was domesticated, become dependent on US imports in the first place?

The Mexican food crisis cannot be fully understood without taking into account the fact that in the years preceding the tortilla crisis, the homeland of corn had been converted to a corn-importing economy by “free market” policies promoted by the International Monetary Fund (IMF), the World Bank and Washington. The process began with the early 1980s debt crisis. One of the two largest developing-country debtors, Mexico was forced to beg for money from the Bank and IMF to service its debt to international commercial banks. The quid pro quo for a multibillion-dollar bailout was what a member of the World Bank executive board described as “unprecedented thoroughgoing interventionism” designed to eliminate high tariffs, state regulations and government support institutions, which neoliberal doctrine identified as barriers to economic efficiency.

Interest payments rose from 19 percent of total government expenditures in 1982 to 57 percent in 1988, while capital expenditures dropped from an already low 19.3 percent to 4.4 percent. The contraction of government spending translated into the dismantling of state credit, government-subsidized agricultural inputs, price supports, state marketing boards and extension services. Unilateral liberalization of agricultural trade pushed by the IMF and World Bank also contributed to the destabilization of peasant producers.

This blow to peasant agriculture was followed by an even larger one in 1994, when the North American Free Trade Agreement went into effect. Although NAFTA had a fifteen-year phaseout of tariff protection for agricultural products, including corn, highly subsidized US corn quickly flooded in, reducing prices by half and plunging the corn sector into chronic crisis. Largely as a result of this agreement, Mexico’s status as a net food importer has now been firmly established.

With the shutting down of the state marketing agency for corn, distribution of US corn imports and Mexican grain has come to be monopolized by a few transnational traders, like US-owned Cargill and partly US-owned Maseca, operating on both sides of the border. This has given them tremendous power to speculate on trade trends, so that movements in biofuel demand can be manipulated and magnified many times over. At the same time, monopoly control of domestic trade has ensured that a rise in international corn prices does not translate into significantly higher prices paid to small producers.

It has become increasingly difficult for Mexican corn farmers to avoid the fate of many of their fellow corn cultivators and other smallholders in sectors such as rice, beef, poultry and pork, who have gone under because of the advantages conferred by NAFTA on subsidized US producers. According to a 2003 Carnegie Endowment report, imports of US agricultural products threw at least 1.3 million farmers out of work — many of whom have since found their way to the United States.

Prospects are not good, since the Mexican government continues to be controlled by neoliberals who are systematically dismantling the peasant support system, a key legacy of the Mexican Revolution. As Food First executive director Eric Holt-Giménez sees it, “It will take time and effort to recover smallholder capacity, and there does not appear to be any political will for this — to say nothing of the fact that NAFTA would have to be renegotiated.”

Creating a Rice Crisis in the Philippines

That the global food crisis stems mainly from free-market restructuring of agriculture is clearer in the case of rice. Unlike corn, less than 10 percent of world rice production is traded. Moreover, there has been no diversion of rice from food consumption to biofuels. Yet this year alone, prices nearly tripled, from $380 a ton in January to more than $1,000 in April. Undoubtedly the inflation stems partly from speculation by wholesaler cartels at a time of tightening supplies. However, as with Mexico and corn, the big puzzle is why a number of formerly self-sufficient rice-consuming countries have become severely dependent on imports.

The Philippines provides a grim example of how neoliberal economic restructuring transforms a country from a net food exporter to a net food importer. The Philippines is the world’s largest importer of rice. Manila’s desperate effort to secure supplies at any price has become front-page news, and pictures of soldiers providing security for rice distribution in poor communities have become emblematic of the global crisis.

The broad contours of the Philippines story are similar to those of Mexico. Dictator Ferdinand Marcos was guilty of many crimes and misdeeds, including failure to follow through on land reform, but one thing he cannot be accused of is starving the agricultural sector. To head off peasant discontent, the regime provided farmers with subsidized fertilizer and seeds, launched credit plans and built rural infrastructure. When Marcos fled the country in 1986, there were 900,000 metric tons of rice in government warehouses.

Paradoxically, the next few years under the new democratic dispensation saw the gutting of government investment capacity. As in Mexico the World Bank and IMF, working on behalf of international creditors, pressured the Corazon Aquino administration to make repayment of the $26 billion foreign debt a priority. Aquino acquiesced, though she was warned by the country’s top economists that the “search for a recovery program that is consistent with a debt repayment schedule determined by our creditors is a futile one.” Between 1986 and 1993 8 percent to 10 percent of GDP left the Philippines yearly in debt-service payments — roughly the same proportion as in Mexico. Interest payments as a percentage of expenditures rose from 7 percent in 1980 to 28 percent in 1994; capital expenditures plunged from 26 percent to 16 percent. In short, debt servicing became the national budgetary priority.

Spending on agriculture fell by more than half. The World Bank and its local acolytes were not worried, however, since one purpose of the belt-tightening was to get the private sector to energize the countryside. But agricultural capacity quickly eroded. Irrigation stagnated, and by the end of the 1990s only 17 percent of the Philippines’ road network was paved, compared with 82 percent in Thailand and 75 percent in Malaysia. Crop yields were generally anemic, with the average rice yield way below those in China, Vietnam and Thailand, where governments actively promoted rural production. The post-Marcos agrarian reform program shriveled, deprived of funding for support services, which had been the key to successful reforms in Taiwan and South Korea. As in Mexico Filipino peasants were confronted with full-scale retreat of the state as provider of comprehensive support — a role they had come to depend on.

And the cutback in agricultural programs was followed by trade liberalization, with the Philippines’ 1995 entry into the World Trade Organization having the same effect as Mexico’s joining NAFTA. WTO membership required the Philippines to eliminate quotas on all agricultural imports except rice and allow a certain amount of each commodity to enter at low tariff rates. While the country was allowed to maintain a quota on rice imports, it nevertheless had to admit the equivalent of 1 to 4 percent of domestic consumption over the next ten years. In fact, because of gravely weakened production resulting from lack of state support, the government imported much more than that to make up for shortfalls. The massive imports depressed the price of rice, discouraging farmers and keeping growth in production at a rate far below that of the country’s two top suppliers, Thailand and Vietnam.

The consequences of the Philippines’ joining the WTO barreled through the rest of its agriculture like a super-typhoon. Swamped by cheap corn imports — much of it subsidized US grain — farmers reduced land devoted to corn from 3.1 million hectares in 1993 to 2.5 million in 2000. Massive importation of chicken parts nearly killed that industry, while surges in imports destabilized the poultry, hog and vegetable industries.

During the 1994 campaign to ratify WTO membership, government economists, coached by their World Bank handlers, promised that losses in corn and other traditional crops would be more than compensated for by the new export industry of “high-value-added” crops like cut flowers, asparagus and broccoli. Little of this materialized. Nor did many of the 500,000 agricultural jobs that were supposed to be created yearly by the magic of the market; instead, agricultural employment dropped from 11.2 million in 1994 to 10.8 million in 2001.

The one-two punch of IMF-imposed adjustment and WTO-imposed trade liberalization swiftly transformed a largely self-sufficient agricultural economy into an import-dependent one as it steadily marginalized farmers. It was a wrenching process, the pain of which was captured by a Filipino government negotiator during a WTO session in Geneva. “Our small producers,” he said, “are being slaughtered by the gross unfairness of the international trading environment.”

The Great Transformation

The experience of Mexico and the Philippines was paralleled in one country after another subjected to the ministrations of the IMF and the WTO. A study of fourteen countries by the UN’s Food and Agricultural Organization found that the levels of food imports in 1995-98 exceeded those in 1990-94. This was not surprising, since one of the main goals of the WTO’s Agreement on Agriculture was to open up markets in developing countries so they could absorb surplus production in the North. As then-US Agriculture Secretary John Block put it in 1986, “The idea that developing countries should feed themselves is an anachronism from a bygone era. They could better ensure their food security by relying on US agricultural products, which are available in most cases at lower cost.”

What Block did not say was that the lower cost of US products stemmed from subsidies, which became more massive with each passing year despite the fact that the WTO was supposed to phase them out. From $367 billion in 1995, the total amount of agricultural subsidies provided by developed-country governments rose to $388 billion in 2004. Since the late 1990s subsidies have accounted for 40 percent of the value of agricultural production in the European Union and 25 percent in the United States.

The apostles of the free market and the defenders of dumping may seem to be at different ends of the spectrum, but the policies they advocate are bringing about the same result: a globalized capitalist industrial agriculture. Developing countries are being integrated into a system where export-oriented production of meat and grain is dominated by large industrial farms like those run by the Thai multinational CP and where technology is continually upgraded by advances in genetic engineering from firms like Monsanto. And the elimination of tariff and nontariff barriers is facilitating a global agricultural supermarket of elite and middle-class consumers serviced by grain-trading corporations like Cargill and Archer Daniels Midland and transnational food retailers like the British-owned Tesco and the French-owned Carrefour.

There is little room for the hundreds of millions of rural and urban poor in this integrated global market. They are confined to giant suburban favelas, where they contend with food prices that are often much higher than the supermarket prices, or to rural reservations, where they are trapped in marginal agricultural activities and increasingly vulnerable to hunger. Indeed, within the same country, famine in the marginalized sector sometimes coexists with prosperity in the globalized sector.

This is not simply the erosion of national food self-sufficiency or food security but what Africanist Deborah Bryceson of Oxford calls “de-peasantization” — the phasing out of a mode of production to make the countryside a more congenial site for intensive capital accumulation. This transformation is a traumatic one for hundreds of millions of people, since peasant production is not simply an economic activity. It is an ancient way of life, a culture, which is one reason displaced or marginalized peasants in India have taken to committing suicide. In the state of Andhra Pradesh, farmer suicides rose from 233 in 1998 to 2,600 in 2002; in Maharashtra, suicides more than tripled, from 1,083 in 1995 to 3,926 in 2005. One estimate is that some 150,000 Indian farmers have taken their lives. Collapse of prices from trade liberalization and loss of control over seeds to biotech firms is part of a comprehensive problem, says global justice activist Vandana Shiva: “Under globalization, the farmer is losing her/his social, cultural, economic identity as a producer. A farmer is now a ‘consumer’ of costly seeds and costly chemicals sold by powerful global corporations through powerful landlords and money lenders locally.”

African Agriculture: From Compliance to Defiance

De-peasantization is at an advanced state in Latin America and Asia. And if the World Bank has its way, Africa will travel in the same direction. As Bryceson and her colleagues correctly point out in a recent article, the World Development Report for 2008, which touches extensively on agriculture in Africa, is practically a blueprint for the transformation of the continent’s peasant-based agriculture into large-scale commercial farming. However, as in many other places today, the Bank’s wards are moving from sullen resentment to outright defiance.

At the time of decolonization, in the 1960s, Africa was actually a net food exporter. Today the continent imports 25 percent of its food; almost every country is a net importer. Hunger and famine have become recurrent phenomena, with the past three years alone seeing food emergencies break out in the Horn of Africa, the Sahel, and Southern and Central Africa.

Agriculture in Africa is in deep crisis, and the causes range from wars to bad governance, lack of agricultural technology and the spread of HIV/AIDS. However, as in Mexico and the Philippines, an important part of the explanation is the phasing out of government controls and support mechanisms under the IMF and World Bank structural adjustment programs imposed as the price for assistance in servicing external debt.

Structural adjustment brought about declining investment, increased unemployment, reduced social spending, reduced consumption and low output. Lifting price controls on fertilizers while simultaneously cutting back on agricultural credit systems simply led to reduced fertilizer use, lower yields and lower investment. Moreover, reality refused to conform to the doctrinal expectation that withdrawal of the state would pave the way for the market to dynamize agriculture. Instead, the private sector, which correctly saw reduced state expenditures as creating more risk, failed to step into the breach. In country after country, the departure of the state “crowded out” rather than “crowded in” private investment. Where private traders did replace the state, noted an Oxfam report, “they have sometimes done so on highly unfavorable terms for poor farmers,” leaving “farmers more food insecure, and governments reliant on unpredictable international aid flows.” The usually pro-private sector Economist agreed, admitting that “many of the private firms brought in to replace state researchers turned out to be rent-seeking monopolists.”

The support that African governments were allowed to muster was channeled by the World Bank toward export agriculture to generate foreign exchange, which states needed to service debt. But, as in Ethiopia during the 1980s famine, this led to the dedication of good land to export crops, with food crops forced into less suitable soil, thus exacerbating food insecurity. Moreover, the World Bank’s encouragement of several economies to focus on the same export crops often led to overproduction, triggering price collapses in international markets. For instance, the very success of Ghana’s expansion of cocoa production triggered a 48 percent drop in the international price between 1986 and 1989. In 2002-03 a collapse in coffee prices contributed to another food emergency in Ethiopia.

As in Mexico and the Philippines, structural adjustment in Africa was not simply about underinvestment but state divestment. But there was one major difference. In Africa the World Bank and IMF micromanaged, making decisions on how fast subsidies should be phased out, how many civil servants had to be fired and even, as in the case of Malawi, how much of the country’s grain reserve should be sold and to whom.

Compounding the negative impact of adjustment were unfair EU and US trade practices. Liberalization allowed subsidized EU beef to drive many West African and South African cattle raisers to ruin. With their subsidies legitimized by the WTO, US growers offloaded cotton on world markets at 20 percent to 55 percent of production cost, thereby bankrupting West and Central African farmers.

According to Oxfam, the number of sub-Saharan Africans living on less than a dollar a day almost doubled, to 313 million, between 1981 and 2001 — 46 percent of the whole continent. The role of structural adjustment in creating poverty was hard to deny. As the World Bank’s chief economist for Africa admitted, “We did not think that the human costs of these programs could be so great, and the economic gains would be so slow in coming.”

In 1999 the government of Malawi initiated a program to give each smallholder family a starter pack of free fertilizers and seeds. The result was a national surplus of corn. What came after is a story that should be enshrined as a classic case study of one of the greatest blunders of neoliberal economics. The World Bank and other aid donors forced the scaling down and eventual scrapping of the program, arguing that the subsidy distorted trade. Without the free packs, output plummeted. In the meantime, the IMF insisted that the government sell off a large portion of its grain reserves to enable the food reserve agency to settle its commercial debts. The government complied. When the food crisis turned into a famine in 2001-02, there were hardly any reserves left. About 1,500 people perished. The IMF was unrepentant; in fact, it suspended its disbursements on an adjustment program on the grounds that “the parastatal sector will continue to pose risks to the successful implementation of the 2002/03 budget. Government interventions in the food and other agricultural markets… [are] crowding out more productive spending.”

By the time an even worse food crisis developed in 2005, the government had had enough of World Bank/IMF stupidity. A new president reintroduced the fertilizer subsidy, enabling 2 million households to buy it at a third of the retail price and seeds at a discount. The result: bumper harvests for two years, a million-ton maize surplus and the country transformed into a supplier of corn to Southern Africa.

Malawi’s defiance of the World Bank would probably have been an act of heroic but futile resistance a decade ago. The environment is different today, since structural adjustment has been discredited throughout Africa. Even some donor governments and NGOs that used to subscribe to it have distanced themselves from the Bank. Perhaps the motivation is to prevent their influence in the continent from being further eroded by association with a failed approach and unpopular institutions when Chinese aid is emerging as an alternative to World Bank, IMF and Western government aid programs.

Food Sovereignty: An Alternative Paradigm?

It is not only defiance from governments like Malawi and dissent from their erstwhile allies that are undermining the IMF and the World Bank. Peasant organizations around the world have become increasingly militant in their resistance to the globalization of industrial agriculture. Indeed, it is because of pressure from farmers’ groups that the governments of the South have refused to grant wider access to their agricultural markets and demanded a massive slashing of US and EU agricultural subsidies, which brought the WTO’s Doha Round of negotiations to a standstill.

Farmers’ groups have networked internationally; one of the most dynamic to emerge is Via Campesina (Peasant’s Path). Via not only seeks to get “WTO out of agriculture” and opposes the paradigm of a globalized capitalist industrial agriculture; it also proposes an alternative — food sovereignty. Food sovereignty means, first of all, the right of a country to determine its production and consumption of food and the exemption of agriculture from global trade regimes like that of the WTO. It also means consolidation of a smallholder-centered agriculture via protection of the domestic market from low-priced imports; remunerative prices for farmers and fisherfolk; abolition of all direct and indirect export subsidies; and the phasing out of domestic subsidies that promote unsustainable agriculture. Via’s platform also calls for an end to the Trade Related Intellectual Property Rights regime, or TRIPs, which allows corporations to patent plant seeds; opposes agro-technology based on genetic engineering; and demands land reform. In contrast to an integrated global monoculture, Via offers the vision of an international agricultural economy composed of diverse national agricultural economies trading with one another but focused primarily on domestic production.

Once regarded as relics of the pre-industrial era, peasants are now leading the opposition to a capitalist industrial agriculture that would consign them to the dustbin of history. They have become what Karl Marx described as a politically conscious “class for itself,” contradicting his predictions about their demise. With the global food crisis, they are moving to center stage — and they have allies and supporters. For as peasants refuse to go gently into that good night and fight de-peasantization, developments in the twenty-first century are revealing the panacea of globalized capitalist industrial agriculture to be a nightmare. With environmental crises multiplying, the social dysfunctions of urban-industrial life piling up and industrialized agriculture creating greater food insecurity, the farmers’ movement increasingly has relevance not only to peasants but to everyone threatened by the catastrophic consequences of global capital’s vision for organizing production, community and life itself.

Source - Walden Bello, countercurrents.org

Wanderlust

Babylosers

The kids learning to swim at the pool near Via Casilina, in a working-class suburb of Rome, could not ask for better qualified instructors. One is a literature graduate with a masters in communications from Brussels, while another, Antonio di Martino, is an aerospace engineer.

Di Martino, 30, still has to finish his degree, but with a one-year-old baby and another child on the way, and afternoons and evenings working at the pool to bring in €1,100 (£870) a month, something had to give.

'Some of the pressure to graduate also slipped away when I saw one friend get his degree and then only earn €500 a month at an Italian space firm and another get €800 a month at the European Space Agency,' said Di Martino, bouncing his son on his knee as his partner, Mattia, rushes out the door to her teaching job, which pays €1,200 a month. 'My parents bought me my flat, making me one of the lucky ones since prices are crazy and I would never get a mortgage,' he said. 'I spent two years of savings on doing up the bathroom and now I worry about my son. One problem, one unforeseen expense and things get serious.'

He said price checking in supermarkets was the norm - 'something my mother never did'. And the family thinks hard before travelling. 'With petrol and tolls, even a trip to my parents in southern Italy now costs €100.'

Di Martino is part of a new phenomenon sweeping Europe. As he spoke, Africa Garcia Arias, 32, was nearing the end of a 45-hour week in a busy Madrid hospital. Six months pregnant, Arias will scale back her working week in the coming month. But, though she is exhausted, this is hardly much relief. Her salary of €1,600 will drop to €1,000 a month.

On Friday night, Lorenzo, 35, was on a train heading to work a nightshift for a major American sales website's Berlin branch. He trained as a historian and a photographer. 'The pay is just about OK - €2,700 a month for a 40-hour week - but it is hardly the job I dreamed of doing,' he said.

And in Paris, Nathalie, 24, was sitting in a friend's tiny rented flat in the rundown 20th arrondissement, the poorest district of the city, having finished another month of unpaid 'work experience' for a major publishing company. Tomorrow she will be at the second home of her parents in Brittany to sit in the sun in the garden, read and swim. 'I look at how they live, and how they lived when they were my age or a few years older, and I realise that I will never have any of that,' she said. 'I am not sure whether to be angry, sad or simply resigned.'

With inflation soaring, property prices sky high, wages relatively static, labour markets gridlocked and sluggish or slowing economies, Nathalie, Lorenzo, Arias and Di Martino are among tens of millions of Europeans raised to expect that their degrees and diplomas will assure them a relatively high quality of life who are now realising that the world has changed. The disappointment is a shock with big political, social, cultural, even demographic consequences.

'I am angry. I know a lot of people who are in the same situation and our qualifications are not being rewarded,' said Arias. For Nathalie, the weekend in her parents' seaside home will leave 'a bitter taste in my mouth'.

Freelance architect Emilio Tinoco Vertiz, 32, earns just €1,000 a month. 'Who needs architects when no one wants to build houses?' he said. In Spain people such as Emilio are known from their pay as the 'mileuristas' (thousand euro-ers). In France they are the 'babylosers' - a term coined by sociologist Louis Chauvel to contrast them with 'babyboomers'. According to Chauvel, 41, a sociologist at the National Foundation for Political Science, for the first time in recent history a generation of French citizens aged between 20 and 40 can expect a lower standard of living than the one before. 'Mileuristas or babylosers: it's the same story,' he said. 'They have an average of three years more education than their parents, a worse job and a lower standard of living.'

In 1973, only 6 per cent of recent university leavers in France were unemployed; now the rate is 25 to 30 per cent; salaries have stagnated for 20 years while property prices have doubled or trebled, though the overall proportion of French people living in poverty has not changed. Whereas in the 1960s the poor were mainly the old, now they are the young; in 1970, salaries for 50-year-olds were only 15 per cent higher than those for workers of 30; the gap now is 40 per cent.

'Some talk of a war between the generations, but that's a little simplistic. It is more that the system means that the haves are keeping what they have and no one is helping the have-nots,' said Chauvel. 'The big determinant in France now of success is not your educational level but the wealth of your parents, if they can support you during your twenties as you fight your way into a closed employment market.'

French economists speak of 'insiders and outsiders'. The insiders are those who already have a job and are well-defended by the battery of French laws protecting the workforce and the unions. The outsiders are those without work which, naturally, include newcomers on the job market. Chauvel says the problem is particularly bad in Latin countries where parents are expected to support their children much longer.

In Spain, even during the boom years when growth outstripped the rest of the European Union, the 'mileuristas' found themselves unable to afford their own homes. But now with the Spanish economy crashing, prospects are grim. In the first three months of 2008, Spanish unemployment hit 9.6 per cent, the highest for three years and second only to Slovakia in the 27-nation EU.

Once one of Europe's success stories, Spain's Socialist government has been forced to cut its 2008 growth estimate to 2.3 per cent from 3.1 per cent. Josep Comajuncosa, a macro-economics specialist at the Esade business school in Barcelona, said the downturn may help the 'mileuristas' buy homes but it will not solve their basic problem. 'What is needed is a model of growth based on greater productivity and new industries primarily service-based such as IT, financial services and new technology which can raise salaries,' he said.

In an effort to save Spain from the worst effects of the downturn, the government has announced an ambitious public works programme, including a massive social housing plan that could help many to finally buy property. Such policies are likely to become common.

In Germany, according to a report published by consultancy McKinsey, those earning between 70 and 150 per cent of the average income - the standard definition of the middle class - will make up less than half the population by 2020, against 54 per cent today.

Only eight years ago, 62 per cent of Germans were in the middle-class bracket, according to a second study. Key markers of middle-class status - such as overseas holidays - are disappearing or becoming blurred. 'I haven't been away for two years,' said Aurel Thurn, 38, who works for an art gallery in Berlin and has top-level qualifications, 10 years' experience and speaks four languages fluently. 'I have enough money for my rent, my telephone and food. But that's it.'

Many feel that Germany's middle class has not benefited from the nation's recent economic recovery. The result has been political pressure, with trade union activism and a wave of industrial action aimed at securing higher wages and enhanced benefits as well as lower taxes for average earners and higher taxes on the rich. Germany's political parties have reacted by boosting public spending and are considering wide tax cuts.

'There is a political swing towards what were once considered the ideas of the political left such as minimum wages, benefits and so on,' said Holgar Schaefer, labour economist at the Cologne Institute of Economics. 'It is a tendency that is only likely to become more obvious in coming years.'

The same thing is happening elsewhere. In France, there has been a mass mobilisation of teachers and pupils against plans to slash staffing levels. 'It is completely unprecedented,' said author and journalist Ariane Chemin.

'There is a potentially explosive combination of political disillusion with a fascination for politics. Young people are both deeply cynical and deeply politicised. They are at the school gates calling teachers who work "scabs". We haven't seen anything like it for years.'

But it may be that, instead of the demise of the European class, we are merely witnessing its evolution. Daniel Gros, of the Centre for European Policy Studies in Brussels, said the middle classes across Europe were 'splintering'. 'The homogeneous middle class that you once had based on industry and a protected government sector is disappearing,' he said.

The political and social consequences are already visible. The success of Nicolas Sarkozy is one, according to Gros. 'The old massive blocs of Gaullist right and Socialist left based on clear understandings of what it is to be working class and socialist have broken down,' he said. 'Sarkozy's appeal cut across those classic divisions.'

Analysts also point out that the 'hardship' of the middle classes is relative - according to the European Commission, there are an estimated 16 million people in the EU at risk of poverty. 'The decline in standards of living for young middle class people is pretty moderate when compared with the very dramatic situation of their counterparts in totally marginalised communities such as the poor French suburbs,' said Professor Ian Begg of the London School of Economics.

'And it is an extremely varied picture. New service sector jobs can be low grade and badly paid - such as night shifts for an IT company - or very lucrative. Collectively, Europe is richer than it has ever been. Average income has been going up pretty well without a blip since 1945 and whatever the disparities some of that has filtered down to pretty much everybody.'

Begg pointed out that, with economic and social changes, a certain amount of 'blurring' was inevitable. 'There is a trend towards a certain classlessness and some win and some lose. Jobs that were previously passports to stable middle-class incomes and wealth no longer are. And those who lose out most tend to shout loudest.'

Source - UK Guardian

Kool

Preventive Care / Human Sacrifice?

Thanks to Merck’s aggressive advertising campaign for Gardasil -- the one that features young girls chanting “I want to be one less” -- mothers and daughters across the United States are lining up to be vaccinated.

Yet, once you know the facts about this vaccine and HPV, the virus it supposedly prevents, it becomes very clear just how useless -- and dangerous -- this vaccine really is.

Getting the Facts About HPV

There are more than 100 types of human papillomaviruses (HPVs). Of them, only 10-30 can cause cervical cancer. The rest can lead to skin infections that cause genital warts or common warts on your hands and feet.

These are very common viruses, and an estimated 25 million Americans have HPV infections. However, this is NOT cause for alarm because, as even the Centers for Disease Control and Prevention states: “In 90% of cases, your body’s immune system clears the HPV infection naturally within two years.”

This is true whether the infection is the type that can cause warts or cancer.

Meanwhile, Merck’s Gardasil vaccine contains just four types of HPV. If you contract one of the 96+ types that aren’t included, you’re out of luck. And, if you’ve already been exposed to one of the four types of virus in the vaccine, it doesn’t work against those either.

Some Scary Facts About Gardasil

The long-term effects of using this vaccine on young girls is unknown, and in the short-term, many girls have already begun to suffer. Common side effects include:

Pain, swelling, itching and redness at the injection site
Fever
Nausea
Dizziness
Vomiting
Fainting

Severe allergic reactions, including difficulty breathing, have also been reported, as has:

Swollen glands
Guillain-Barre syndrome
Headaches
Joint pain
Aching muscles
Unusual tiredness and weakness

As of last October, 3,461 complaints about Gardasil had been filed with the FDA's Vaccine Adverse Event Report System, and 11 women died after exposure to the vaccine.

Meanwhile, aside from being injected with four types of HPV proteins, girls and women who receive this vaccine should know what else is in the shot:

1. Aluminum adjuvants, which have been linked to neurological damage including multiple sclerosis, Alzheimer’s disease, and Parkinson’s disease.

2. Polysorbate 80, which has been linked to infertility in mice.

3. Sodium borate, a main ingredient in roach killer.

Be “One Less” To Get Gardasil

I think this would be a more appropriate message to send out to young women. There is absolutely no reason to risk the serious side effects of this vaccine to prevent an infection that goes away on its own 90 percent of the time. And there’s no guarantee that you’ll be protected anyway, since you can still get HPV once you’ve had the vaccine. It’s really a no-win situation for those who receive it.

Of course, you can radically reduce your risk of getting HPV in the first place if you follow safe-sex practices, or wait to have sex until you’re in a committed relationship. Then, keep your immune system in tip-top shape, and it will be more than able to shake any HPV virus that comes its way.

Source - Dr. Mercola

Middle

Nutz

A nut may be defined as a one-seeded fruit with a hard pericarp (ripened ovary wall). Many a weight conscious person would advise you against including nuts in the diet. That is actually turning out to be a myth rather than diet fact ! You take great care in controlling and selecting the diet so as not to put on the flab. You take lot of whole grains as well as fruits and vegetables and avoid foods high in sugar and fats. That includes nuts also. The fact is that, if you cut off nuts from your diet then you may not be eating healthy as you think. Nuts have suffered a bad reputation due to their high fat and calorie content especially for weight watchers. But results of recent research claim that there are many health benefits of nuts and there are many reasons for you to include nuts in your diet. And one of them is the very fact that caused people to avoid them in the first place!

Nutrition Information of Nuts

Beneficial Fat

Nuts are known for their high fat content. The nuts have also been branded as high cholesterol food item and often do not go well with those watching their heart ! In fact, nuts are plant products and are low in saturated fats and contain no cholesterol. Nuts contain mostly “good” unsaturated fat namely, mono or polyunsaturated fat (mainly plant-based, with zero cholesterol) and not saturated fat (mainly from animal sources). The unsaturated “Good” fat is believed to act favorably for heart health. Research has shown that reducing saturated fat and increasing unsaturated fat can lower LDL “Bad” cholesterol levels. Ninety percent of the fats in nuts are the monounsaturated and polyunsaturated type.

Almonds and walnuts are rich sources of omega-3 fatty acids. Some research suggests that one type of polyunsaturated fat, called omega-3 fatty acids may play a role in the prevention of chronic diseases like cancer, arthritis and heart disease.

Protein

Nuts contain an abundance of protein and are extremely rich in amino acid arginine (amino acids are the building blocks of protein). This is also being linked to good heart health. Arginine widens and relaxes the blood vessels and this may serve to reduce the risk of blood clots that can lead to heart attacks.

Vitamin E

The role of vitamin E as a powerful antioxidant is not disputed. Almonds, pecans and walnuts are rich in vitamin E, which is an antioxidant that is essential for the normal development of cells. Research has also found that vitamin E may also play a role in strengthening the immune system as our bodies go through the ageing process.

Nutritional Benefits of Specific Nuts

Almonds: This is regarded as the most nutritious of all nuts, containing about 18 percent protein. Almonds have been used medicinally to remedy the nervous and digestive systems. Besides being a rich source of protein, almonds contain the phytonutrient phytosterol that may help reduce the risk of cancer. Almonds also contain 8 percent of the daily value of calcium, which is the amount in about one-third of a cup of milk.

Walnuts: Walnuts are rich in Omega 3 fatty acids and both of these types of nuts contain folate, which is a B vitamin that protects against birth defects and may also protect against cancer and heart disease.

Peanuts: They are actually a legume along with dry beans, peas and lentils. Aside from containing a high amount of folate, they are also an excellent source of niacin.

Pecans: They are an excellent source of oleic acid, a monounsaturated fat. Monounsaturated fats such as oleic acids, (also found in olive oil), have a protective effect on the blood, lower total blood cholesterol and preserve “good” cholesterol that helps fight against heart disease.

Pistachios: They contain significant amounts of omega 3 fatty acid, linoleic acid, magnesium, copper and potassium, and a high level of beta-sitoserol, which is one of the several plant sterols implicated in lowering cholesterol.

One of the most favored ways of including nuts in the diet is to sprinkle your favorite crushed nuts in your breakfast cereal or snacks

-Mix finely chopped nuts with an equal amount of seasoned breadcrumbs to coat your baked or boiled vegetables
-Add nuts to your salads.
-Mix some nuts into your pasta dishes. Try adding walnuts or even use peanut butter as a sauce.
-Add nuts in your vegetable dishes.
-Make a nutty milkshake or smoothie. Blend a handful of almonds or any nut of your choice together with the ingredients and you’ll get a delicious, nutty dessert.

Additional Health Benefits of Nuts

-In 2003, the US Food and Drug Administration (FDA) approved the package label, which claims that eating 1.5 ounces per day of most nuts, as part of a diet low in saturated fat and cholesterol, may reduce the risk of heart disease.

-Research has found that as long as you control total calories, eating a handful of nuts daily may help prevent weight gain and possibly promote weight loss. This is because, the fat, protein and fiber in nuts promote a feeling of fullness, therefore, making you eat less.

-In the Journal of the American Medical Association, it is stated that based on a study, women who ate five or more 1 ounce servings of nuts/peanuts per week reduced their risk of Type 2 diabetes by almost 30 percent compared to those who rarely or never ate nuts.

Source - Gurumaa

The Chase

Mideast Hunger

For years, food policy in the Middle East and North Africa was very simple: hydrocarbon exports paid for carbohydrate imports.

Rising agricultural commodities prices and a large population increase mean that the traditional policy is now untenable even if crude oil trades at about $120 a barrel, forcing countries in the region, including Saudi Arabia, to reconsider how it feeds its population.

“The region has woken up to the new food market reality,” says Abdolreza Abbassian, an expert at the Food and Agriculture Organisation in Rome.

The FAO estimates the region’s cereals import bill will hit $22.6bn this year (£11.4bn, €14.5bn), a 40 per cent increase on 2007. Since 2000, it has jumped almost 170 per cent. The rising bill is the latest signal of the looming food crisis hanging over the Middle East and north Africa, the region of the world most dependent on imports of food staples.

Jonathan Calland, of Tilda, India’s largest ex­porter of basmati rice, says: “Security of food supplies is for the first time since the 1970s back on the agenda in the Middle East.”

In the past few months, food riots have hit Egypt, the United Arab Emirates and Yemen as prices jumped almost 60 per cent in a year. A general strike, demanding action on rising prices, has been called in Lebanon on Wednesday. The discomfort over food price hikes is aggravated by a huge dependence on the international food market. Middle East and north African countries buy almost a quarter of all the cereals traded globally.

Abah Ofon, agricultural com­modities analyst at Stan­dard Chartered in Dubai, says: “The region is in a very precarious position.”

Two countries in the re­gion, Morocco and Jordan, have an even more acute problem because not only are they facing higher food prices rises, they are also net importers of fuel.

The dependence on im­ports is a consequence of the meagre agricultural supply – a result of paltry land and water resources – and booming demand – the upshot of fast rising populations and strong economic growth courtesy of high oil prices.

Despite the challenge, policymakers have taken a short-term view of the crisis and are pursuing quick-fix solutions, such as raising salaries, as in Egypt, to increase affordability or imposing price controls as adopted by the UAE. Nevertheless, four long-term trends are emerging: food subsidies, seen only a couple years ago in retreat, are on the rise, strategic stocks are been considered, the countries are trying to diversify their imports and there is renewed efforts for agriculture self-sufficiency.

Akhter Ahmed, at the International Food Policy Research Institute, a Washington-based think-tank, says that in the current environment of rising food prices, “politically it is very difficult to make any substantial change in the subsidies policy” even though, he argues, most result in wastage of public funds.

Alarmed by the potential for social unrest, Egypt will spend an estimated $2.4bn this year on bread subsidies, up from $820m last year.

Price controls, mostly eliminated during the 1990s’ economic liberalisation, are back. The UAE, for example, has imposed them through agreements with big supermarkets, such as the French retailer Carrefour, to maintain food costs at last year’s level.

Governments have also returned to the idea of building strategic food stocks, which were common in the 1980s. Sultan al-Mansouri, UAE economy minister, said strategic inventories are a “formula to control prices once they are out of control”. In Oman, the government has announced the purchase of 200,000 tonnes of rice, enough for two years.

Diplomats say the region’s policymakers have realised that relying entirely on the global market without a cushion is a flawed idea.

At the same time, governments are also looking to diversify imports through bilateral government-to-government trade agreements such as that recently reached between Libya and Ukraine. They are also trying to increase local agricultural production, particularly in north Africa, but also in Iran and Syria, but with limited success.

However, more long-term policies are necessary, particularly to battle the impact of climate change in the region, experts said. In a context where food price shocks are already a big concern, changes in temperature and precipitation will only add to the stress on agricultural resources.

Saudi Arabia’s plan to halt wheat production by 2016 because of concerns about the kingdom’s scarce water resources is the starkest sign of the troubles the region faces. “The big challenge for the region is water,” says Mr Abbassian.

Source - Financial Times

Health

Don't Take Drugs

There's one medical statistic doctors don't much talk about despite its importance. It's called number needed to treat, or NNT. It’s a measure developed in the past 20 years, and it’s one of the best-kept statistical secrets in medicine.

The idea of NNT is simple enough. Most clinical trials look at how much better people do on a particular medicine. NNT answers the question: How many people have to take a particular drug to avoid one incidence of a medical issue (such as a heart attack, or recurrence of cancer)? For example, if a drug had an NNT of 50 for heart attacks, then 50 people have to take the drug in order to prevent one heart attack.

That doesn’t sound like a lot, so pharmaceutical companies tend to keep the number quiet and focus on broader, U.S. population-based statistics. But that could be changed if you ask for the NNT up front the next time you're handed a prescription.

When the NNT statistic was first developed in 1988, it was intended to help you make a decision about whether or not to take a drug. After all, having it put in simple terms such as “Out of every 50 people who take this drug, perhaps one heart attack will be prevented, and the other 49 people will receive no benefit,” puts things into perspective … a perspective that the drug companies do not want you to see.

One of the most blatant examples of how drug companies have hidden NNT for their own self-serving purposes lies with cholesterol drugs. These drugs, which can cause side effects like liver damage, muscle weakness, cognitive impairment and many, many others, are touted as miracle pills that can slash your risk of a heart attack by more than one-third.

Well, BusinessWeek actually did a story on this very topic earlier this year, and they found the REAL numbers right on Pfizer’s own newspaper ad for the cholesterol-lowering drug Lipitor.

Upon first glance, the ad boasts that Lipitor reduces heart attacks by 36 percent. But there is an asterisk. And when you follow the asterisk, you find the following in much smaller type:

"That means in a large clinical study, 3% of patients taking a sugar pill or placebo had a heart attack compared to 2% of patients taking Lipitor."

What this means is that for every 100 people who took the drug over 3.3 years, three people on placebos, and two people on Lipitor, had heart attacks. That means that taking Lipitor resulted in just one fewer heart attack per 100 people.

The NNT, in this case, is 100. 100 people have to take Lipitor for more than three years to prevent one heart attack. And the other 99 people, well, they’ve just dished out hundreds of dollars and increased their risk of a laundry list of side effects for nothing.

Not to mention that this study was funded by the industry, which means their results may already be skewed, and the actual benefit may be even LESS than what they found.

Many Drugs are “Worse Than a Lottery Ticket”

According to Dr. Nortin M. Hadler, professor of medicine at the University of North Carolina at Chapel Hill, in Business Week:

"Anything over an NNT of 50 is worse than a lottery ticket; there may be no winners."

Well, the NNT for some cholesterol-lowering drugs has been figured at 250 and up, even after taking them for five years!

"What if you put 250 people in a room and told them they would each pay $1,000 a year for a drug they would have to take every day, that many would get diarrhea and muscle pain, and that 249 would have no benefit? And that they could do just as well by exercising? How many would take that?" Dr. Jerome R. Hoffman, professor of clinical medicine at the University of California at Los Angeles, asked Business Week.

The answer, of course, is few to none. And that is exactly why you have probably never heard of NNT before.

The Moral of the Story: Don’t Trust the Drug Companies

They have many tricks up their sleeves other than NNT, and they are masters at twisting the results of their studies to appear in a positive light.

So anytime you hear about how great a drug is, be very suspicious. You wouldn’t simply buy a car without finding out the real bottom line, right? So don’t blindly accept the numbers that the drug companies peddle either.

One thing you can do is ask your doctor or pharmacist to tell you the NNT for any prescription you’re considering. Even better is to assume that most drugs offer little benefit, and only take them as an absolute last option.

You have the power to take control of your health and thrive without the need for drugs. The drug companies want you to believe otherwise, but now you too know better.

Source - Dr. Mercola

Silhouette

The Gospel Of Consumption

PRIVATE CARS WERE RELATIVELY SCARCE in 1919 and horse-drawn conveyances were still common. In residential districts, electric streetlights had not yet replaced many of the old gaslights. And within the home, electricity remained largely a luxury item for the wealthy.

Just ten years later things looked very different. Cars dominated the streets and most urban homes had electric lights, electric flat irons, and vacuum cleaners. In upper-middle-class houses, washing machines, refrigerators, toasters, curling irons, percolators, heating pads, and popcorn poppers were becoming commonplace. And although the first commercial radio station didn’t begin broadcasting until 1920, the American public, with an adult population of about 122 million people, bought 4,438,000 radios in the year 1929 alone.

But despite the apparent tidal wave of new consumer goods and what appeared to be a healthy appetite for their consumption among the well-to-do, industrialists were worried. They feared that the frugal habits maintained by most American families would be difficult to break. Perhaps even more threatening was the fact that the industrial capacity for turning out goods seemed to be increasing at a pace greater than people’s sense that they needed them.

It was this latter concern that led Charles Kettering, director of General Motors Research, to write a 1929 magazine article called “Keep the Consumer Dissatisfied.” He wasn’t suggesting that manufacturers produce shoddy products. Along with many of his corporate cohorts, he was defining a strategic shift for American industry—from fulfilling basic human needs to creating new ones.

In a 1927 interview with the magazine Nation’s Business, Secretary of Labor James J. Davis provided some numbers to illustrate a problem that the New York Times called “need saturation.” Davis noted that “the textile mills of this country can produce all the cloth needed in six months’ operation each year” and that 14 percent of the American shoe factories could produce a year’s supply of footwear. The magazine went on to suggest, “It may be that the world’s needs ultimately will be produced by three days’ work a week.”

Business leaders were less than enthusiastic about the prospect of a society no longer centered on the production of goods. For them, the new “labor-saving” machinery presented not a vision of liberation but a threat to their position at the center of power. John E. Edgerton, president of the National Association of Manufacturers, typified their response when he declared: “I am for everything that will make work happier but against everything that will further subordinate its importance. The emphasis should be put on work—more work and better work.” “Nothing,” he claimed, “breeds radicalism more than unhappiness unless it is leisure.”

By the late 1920s, America’s business and political elite had found a way to defuse the dual threat of stagnating economic growth and a radicalized working class in what one industrial consultant called “the gospel of consumption”—the notion that people could be convinced that however much they have, it isn’t enough. President Herbert Hoover’s 1929 Committee on Recent Economic Changes observed in glowing terms the results: “By advertising and other promotional devices . . . a measurable pull on production has been created which releases capital otherwise tied up.” They celebrated the conceptual breakthrough: “Economically we have a boundless field before us; that there are new wants which will make way endlessly for newer wants, as fast as they are satisfied.”

Today “work and more work” is the accepted way of doing things. If anything, improvements to the labor-saving machinery since the 1920s have intensified the trend. Machines can save labor, but only if they go idle when we possess enough of what they can produce. In other words, the machinery offers us an opportunity to work less, an opportunity that as a society we have chosen not to take. Instead, we have allowed the owners of those machines to define their purpose: not reduction of labor, but “higher productivity”—and with it the imperative to consume virtually everything that the machinery can possibly produce.

FROM THE EARLIEST DAYS of the Age of Consumerism there were critics. One of the most influential was Arthur Dahlberg, whose 1932 book Jobs, Machines, and Capitalism was well known to policymakers and elected officials in Washington. Dahlberg declared that “failure to shorten the length of the working day . . . is the primary cause of our rationing of opportunity, our excess industrial plant, our enormous wastes of competition, our high pressure advertising, [and] our economic imperialism.” Since much of what industry produced was no longer aimed at satisfying human physical needs, a four-hour workday, he claimed, was necessary to prevent society from becoming disastrously materialistic. “By not shortening the working day when all the wood is in,” he suggested, the profit motive becomes “both the creator and satisfier of spiritual needs.” For when the profit motive can turn nowhere else, “it wraps our soap in pretty boxes and tries to convince us that that is solace to our souls.”

There was, for a time, a visionary alternative. In 1930 Kellogg Company, the world’s leading producer of ready-to-eat cereal, announced that all of its nearly fifteen hundred workers would move from an eight-hour to a six-hour workday. Company president Lewis Brown and owner W. K. Kellogg noted that if the company ran “four six-hour shifts . . . instead of three eight-hour shifts, this will give work and paychecks to the heads of three hundred more families in Battle Creek.”

This was welcome news to workers at a time when the country was rapidly descending into the Great Depression. But as Benjamin Hunnicutt explains in his book Kellogg’s Six-Hour Day, Brown and Kellogg wanted to do more than save jobs. They hoped to show that the “free exchange of goods, services, and labor in the free market would not have to mean mindless consumerism or eternal exploitation of people and natural resources.” Instead “workers would be liberated by increasingly higher wages and shorter hours for the final freedom promised by the Declaration of Independence—the pursuit of happiness.”

To be sure, Kellogg did not intend to stop making a profit. But the company leaders argued that men and women would work more efficiently on shorter shifts, and with more people employed, the overall purchasing power of the community would increase, thus allowing for more purchases of goods, including cereals.

A shorter workday did entail a cut in overall pay for workers. But Kellogg raised the hourly rate to partially offset the loss and provided for production bonuses to encourage people to work hard. The company eliminated time off for lunch, assuming that workers would rather work their shorter shift and leave as soon as possible. In a “personal letter” to employees, Brown pointed to the “mental income” of “the enjoyment of the surroundings of your home, the place you work, your neighbors, the other pleasures you have [that are] harder to translate into dollars and cents.” Greater leisure, he hoped, would lead to “higher standards in school and civic . . . life” that would benefit the company by allowing it to “draw its workers from a community where good homes predominate.”

It was an attractive vision, and it worked. Not only did Kellogg prosper, but journalists from magazines such as Forbes and BusinessWeek reported that the great majority of company employees embraced the shorter workday. One reporter described “a lot of gardening and community beautification, athletics and hobbies . . . libraries well patronized and the mental background of these fortunate workers . . . becoming richer.”

A U.S. Department of Labor survey taken at the time, as well as interviews Hunnicutt conducted with former workers, confirm this picture. The government interviewers noted that “little dissatisfaction with lower earnings resulting from the decrease in hours was expressed, although in the majority of cases very real decreases had resulted.” One man spoke of “more time at home with the family.” Another remembered: “I could go home and have time to work in my garden.” A woman noted that the six-hour shift allowed her husband to “be with 4 boys at ages it was important.”

Those extra hours away from work also enabled some people to accomplish things that they might never have been able to do otherwise. Hunnicutt describes how at the end of her interview an eighty-year-old woman began talking about ping-pong. “We’d get together. We had a ping-pong table and all my relatives would come for dinner and things and we’d all play ping-pong by the hour.” Eventually she went on to win the state championship.

Many women used the extra time for housework. But even then, they often chose work that drew in the entire family, such as canning. One recalled how canning food at home became “a family project” that “we all enjoyed,” including her sons, who “opened up to talk freely.” As Hunnicutt puts it, canning became the “medium for something more important than preserving food. Stories, jokes, teasing, quarreling, practical instruction, songs, griefs, and problems were shared. The modern discipline of alienated work was left behind for an older . . . more convivial kind of working together.”

This was the stuff of a human ecology in which thousands of small, almost invisible, interactions between family members, friends, and neighbors create an intricate structure that supports social life in much the same way as topsoil supports our biological existence. When we allow either one to become impoverished, whether out of greed or intemperance, we put our long-term survival at risk.

Our modern predicament is a case in point. By 2005 per capita household spending (in inflation-adjusted dollars) was twelve times what it had been in 1929, while per capita spending for durable goods—the big stuff such as cars and appliances—was thirty-two times higher. Meanwhile, by 2000 the average married couple with children was working almost five hundred hours a year more than in 1979. And according to reports by the Federal Reserve Bank in 2004 and 2005, over 40 percent of American families spend more than they earn. The average household carries $18,654 in debt, not including home-mortgage debt, and the ratio of household debt to income is at record levels, having roughly doubled over the last two decades. We are quite literally working ourselves into a frenzy just so we can consume all that our machines can produce.

Yet we could work and spend a lot less and still live quite comfortably. By 1991 the amount of goods and services produced for each hour of labor was double what it had been in 1948. By 2006 that figure had risen another 30 percent. In other words, if as a society we made a collective decision to get by on the amount we produced and consumed seventeen years ago, we could cut back from the standard forty-hour week to 5.3 hours per day—or 2.7 hours if we were willing to return to the 1948 level. We were already the richest country on the planet in 1948 and most of the world has not yet caught up to where we were then.

Rather than realizing the enriched social life that Kellogg’s vision offered us, we have impoverished our human communities with a form of materialism that leaves us in relative isolation from family, friends, and neighbors. We simply don’t have time for them. Unlike our great-grandparents who passed the time, we spend it. An outside observer might conclude that we are in the grip of some strange curse, like a modern-day King Midas whose touch turns everything into a product built around a microchip.

Of course not everybody has been able to take part in the buying spree on equal terms. Millions of Americans work long hours at poverty wages while many others can find no work at all. However, as advertisers well know, poverty does not render one immune to the gospel of consumption.

Meanwhile, the influence of the gospel has spread far beyond the land of its origin. Most of the clothes, video players, furniture, toys, and other goods Americans buy today are made in distant countries, often by underpaid people working in sweatshop conditions. The raw material for many of those products comes from clearcutting or strip mining or other disastrous means of extraction. Here at home, business activity is centered on designing those products, financing their manufacture, marketing them—and counting the profits.

KELLOG’S VISION, DESPITE ITS POPULARITY with his employees, had little support among his fellow business leaders. But Dahlberg’s book had a major influence on Senator (and future Supreme Court justice) Hugo Black who, in 1933, introduced legislation requiring a thirty-hour workweek. Although Roosevelt at first appeared to support Black’s bill, he soon sided with the majority of businessmen who opposed it. Instead, Roosevelt went on to launch a series of policy initiatives that led to the forty-hour standard that we more or less observe today.

By the time the Black bill came before Congress, the prophets of the gospel of consumption had been developing their tactics and techniques for at least a decade. However, as the Great Depression deepened, the public mood was uncertain, at best, about the proper role of the large corporation. Labor unions were gaining in both public support and legal legitimacy, and the Roosevelt administration, under its New Deal program, was implementing government regulation of industry on an unprecedented scale. Many corporate leaders saw the New Deal as a serious threat. James A. Emery, general counsel for the National Association of Manufacturers (NAM), issued a “call to arms” against the “shackles of irrational regulation” and the “back-breaking burdens of taxation,” characterizing the New Deal doctrines as “alien invaders of our national thought.”

In response, the industrial elite represented by NAM, including General Motors, the big steel companies, General Foods, DuPont, and others, decided to create their own propaganda. An internal NAM memo called for “re-selling all of the individual Joe Doakes on the advantages and benefits he enjoys under a competitive economy.” NAM launched a massive public relations campaign it called the “American Way.” As the minutes of a NAM meeting described it, the purpose of the campaign was to link “free enterprise in the public consciousness with free speech, free press and free religion as integral parts of democracy.”

Consumption was not only the linchpin of the campaign; it was also recast in political terms. A campaign booklet put out by the J. Walter Thompson advertising agency told readers that under “private capitalism, the Consumer, the Citizen is boss,” and “he doesn’t have to wait for election day to vote or for the Court to convene before handing down his verdict. The consumer ‘votes’ each time he buys one article and rejects another.”

According to Edward Bernays, one of the founders of the field of public relations and a principal architect of the American Way, the choices available in the polling booth are akin to those at the department store; both should consist of a limited set of offerings that are carefully determined by what Bernays called an “invisible government” of public-relations experts and advertisers working on behalf of business leaders. Bernays claimed that in a “democratic society” we are and should be “governed, our minds . . . molded, our tastes formed, our ideas suggested, largely by men we have never heard of.”

NAM formed a national network of groups to ensure that the booklet from J. Walter Thompson and similar material appeared in libraries and school curricula across the country. The campaign also placed favorable articles in newspapers (often citing “independent” scholars who were paid secretly) and created popular magazines and film shorts directed to children and adults with such titles as “Building Better Americans,” “The Business of America’s People Is Selling,” and “America Marching On.”

Perhaps the biggest public relations success for the American Way campaign was the 1939 New York World’s Fair. The fair’s director of public relations called it “the greatest public relations program in industrial history,” one that would battle what he called the “New Deal propaganda.” The fair’s motto was “Building the World of Tomorrow,” and it was indeed a forum in which American corporations literally modeled the future they were determined to create. The most famous of the exhibits was General Motors’ 35,000-square-foot Futurama, where visitors toured Democracity, a metropolis of multilane highways that took its citizens from their countryside homes to their jobs in the skyscraper-packed central city.

For all of its intensity and spectacle, the campaign for the American Way did not create immediate, widespread, enthusiastic support for American corporations or the corporate vision of the future. But it did lay the ideological groundwork for changes that came after the Second World War, changes that established what is still commonly called our post-war society.

The war had put people back to work in numbers that the New Deal had never approached, and there was considerable fear that unemployment would return when the war ended. Kellogg workers had been working forty-eight-hour weeks during the war and the majority of them were ready to return to a six-hour day and thirty-hour week. Most of them were able to do so, for a while. But W. K. Kellogg and Lewis Brown had turned the company over to new managers in 1937.

The new managers saw only costs and no benefits to the six-hour day, and almost immediately after the end of the war they began a campaign to undermine shorter hours. Management offered workers a tempting set of financial incentives if they would accept an eight-hour day. Yet in a vote taken in 1946, 77 percent of the men and 87 percent of the women wanted to return to a thirty-hour week rather than a forty-hour one. In making that choice, they also chose a fairly dramatic drop in earnings from artificially high wartime levels.

The company responded with a strategy of attrition, offering special deals on a department-by-department basis where eight hours had pockets of support, typically among highly skilled male workers. In the culture of a post-war, post-Depression U.S., that strategy was largely successful. But not everyone went along. Within Kellogg there was a substantial, albeit slowly dwindling group of people Hunnicutt calls the “mavericks,” who resisted longer work hours. They clustered in a few departments that had managed to preserve the six-hour day until the company eliminated it once and for all in 1985.

The mavericks rejected the claims made by the company, the union, and many of their co-workers that the extra money they could earn on an eight-hour shift was worth it. Despite the enormous difference in societal wealth between the 1930s and the 1980s, the language the mavericks used to explain their preference for a six-hour workday was almost identical to that used by Kellogg workers fifty years earlier. One woman, worried about the long hours worked by her son, said, “He has no time to live, to visit and spend time with his family, and to do the other things he really loves to do.”

Several people commented on the link between longer work hours and consumerism. One man said, “I was getting along real good, so there was no use in me working any more time than I had to.” He added, “Everybody thought they were going to get rich when they got that eight-hour deal and it really didn’t make a big difference. . . . Some went out and bought automobiles right quick and they didn’t gain much on that because the car took the extra money they had.”

The mavericks, well aware that longer work hours meant fewer jobs, called those who wanted eight-hour shifts plus overtime “work hogs.” “Kellogg’s was laying off people,” one woman commented, “while some of the men were working really fantastic amounts of overtime—that’s just not fair.” Another quoted the historian Arnold Toynbee, who said, “We will either share the work, or take care of people who don’t have work.”

PEOPLE IN THE DEPRESSION-WRACKED 1930s, with what seems to us today to be a very low level of material goods, readily chose fewer work hours for the same reasons as some of their children and grandchildren did in the 1980s: to have more time for themselves and their families. We could, as a society, make a similar choice today.

But we cannot do it as individuals. The mavericks at Kellogg held out against company and social pressure for years, but in the end the marketplace didn’t offer them a choice to work less and consume less. The reason is simple: that choice is at odds with the foundations of the marketplace itself—at least as it is currently constructed. The men and women who masterminded the creation of the consumerist society understood that theirs was a political undertaking, and it will take a powerful political movement to change course today.

Bernays’s version of a “democratic society,” in which political decisions are marketed to consumers, has many modern proponents. Consider a comment by Andrew Card, George W. Bush’s former chief of staff. When asked why the administration waited several months before making its case for war against Iraq, Card replied, “You don’t roll out a new product in August.” And in 2004, one of the leading legal theorists in the United States, federal judge Richard Posner, declared that “representative democracy . . . involves a division between rulers and ruled,” with the former being “a governing class,” and the rest of us exercising a form of “consumer sovereignty” in the political sphere with “the power not to buy a particular product, a power to choose though not to create.”
Sometimes an even more blatant antidemocratic stance appears in the working papers of elite think tanks. One such example is the prominent Harvard political scientist Samuel Huntington’s 1975 contribution to a Trilateral Commission report on “The Crisis of Democracy.” Huntington warns against an “excess of democracy,” declaring that “a democratic political system usually requires some measure of apathy and noninvolvement on the part of some individuals and groups.” Huntington notes that “marginal social groups, as in the case of the blacks, are now becoming full participants in the political system” and thus present the “danger of overloading the political system” and undermining its authority.

According to this elite view, the people are too unstable and ignorant for self-rule. “Commoners,” who are viewed as factors of production at work and as consumers at home, must adhere to their proper roles in order to maintain social stability. Posner, for example, disparaged a proposal for a national day of deliberation as “a small but not trivial reduction in the amount of productive work.” Thus he appears to be an ideological descendant of the business leader who warned that relaxing the imperative for “more work and better work” breeds “radicalism.”

As far back as 1835, Boston workingmen striking for shorter hours declared that they needed time away from work to be good citizens: “We have rights, and we have duties to perform as American citizens and members of society.” As those workers well understood, any meaningful democracy requires citizens who are empowered to create and re-create their government, rather than a mass of marginalized voters who merely choose from what is offered by an “invisible” government. Citizenship requires a commitment of time and attention, a commitment people cannot make if they are lost to themselves in an ever-accelerating cycle of work and consumption.

We can break that cycle by turning off our machines when they have created enough of what we need. Doing so will give us an opportunity to re-create the kind of healthy communities that were beginning to emerge with Kellogg’s six-hour day, communities in which human welfare is the overriding concern rather than subservience to machines and those who own them. We can create a society where people have time to play together as well as work together, time to act politically in their common interests, and time even to argue over what those common interests might be. That fertile mix of human relationships is necessary for healthy human societies, which in turn are necessary for sustaining a healthy planet.

If we want to save the Earth, we must also save ourselves from ourselves. We can start by sharing the work and the wealth. We may just find that there is plenty of both to go around.

Source - Orion Magazine