Sara Robinson - Capitalism Has Failed: 5 Bold Ways to Build a New World

As our political system sputters, a wave of innovative thinking and bold experimentation is quietly sweeping away outmoded economic models. In New Economic Visions, a special five-part AlterNet series edited by economics editor Lynn Parramore in partnership with political economist Gar Alperovitz of the Democracy Collaborative, creative thinkers come together to explore the exciting ideas and projects that are shaping the philosophical and political vision of the movement that could take our economy back.

The problem, in a nutshell, is this: The old economic model has utterly failed us. It has destroyed our communities, our democracy, our economic security, and the planet we live on. The old industrial-age systems -- state communism, fascism, free-market capitalism -- have all let us down hard, and growing numbers of us understand that going back there isn't an option.

But we also know that transitioning to some kind of a new economy -- and, probably, a new governing model to match -- will be a civilization-wrenching process. We're having to reverse deep and ancient assumptions about how we allocate goods, labor, money, and power on a rapidly shrinking, endangered, complex, and ever more populated planet. We are bolding taking the global economy -- and all 7 billion souls who depend on it -- where no economy has ever gone before.

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http://www.alternet.org/story/155456/capitalism_has_failed%3A_5_bold_ways_to_build_a_new_world

Yemen on Brink of Hunger Catastrophe Aid Agencies Warn

Yemen is on the brink of a catastrophic food crisis, seven aid agencies said on (23 May 2012) with 10 million people – 44 percent of the population – without enough food to eat. The aid agencies warned that malnutrition rates recorded by the UN in some parts of the country were alarming, with one in three children severely malnourished.

Ministers from the UK, Saudi Arabia and other countries are set to meet at the Friends of Yemen conference in Riyadh today. The agencies - CARE, International Medical Corps, Islamic Relief, Merlin, Mercy Corps, Oxfam and Save the Children – called on those attending the meeting to scale up efforts to tackle the crisis. The UN humanitarian appeal for the country is just 43 percent funded – a $262 million shortfall.  

Penny Lawrence, Oxfam’s International Director, who is visiting Yemen, said:

“Yemeni families are at the brink and have exhausted their ways of coping with this crisis. A quarter of the population has fallen into debt trying to feed their families. Mothers are taking their children out of school to beg on the streets to get money to survive. Donors are focused on politics and security, but failure to respond adequately to the humanitarian needs now will put more lives at risk, further entrench poverty and could undermine political transition in the country.”

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http://www.oxfam.org/en/pressroom/pressrelease/2012-05-23/yemen-brink-hunger-catastrophe

Eurobonds: The Issue That Could Shatter Europe

Would you pool your debt with a bunch of debt addicts that have no intention of reducing their wild spending habits?  Of course you wouldn't.  But that is exactly what Germany is being asked to do.  Increasingly, "eurobonds" are being touted as the best long-term solution to the financial crisis in Europe.  These eurobonds would represent jointly issued debt by all 17 members of the eurozone.  This debt would also be guaranteed by all 17 members of the eurozone.  This would allow all countries in the eurozone to enjoy the same credit rating that Germany does, and borrowing costs for nations such as Greece, Portugal, Italy and Spain would plummet.  But borrowing costs for Germany would rise substantially.  In fact, it is being estimated that Germany could be facing an extra 50 billion euros a year in interest expenses.  So over ten years that would come to about 500 billion euros.  Needless to say, Germany is not thrilled about this idea.  But new French President Francois Hollande is pushing eurobonds very hard, and he has the support of the OECD, the IMF and many top Italian politicians.  In the end, this could be the key to the future of the eurozone.  If the Germans give in and decide that they are willing to deeply subsidize their profligate neighbors indefinitely, then the euro could potentially be saved.  If not, then this issue could end up shattering Europe.

It is easy to try to portray the Germans as the "bad guys" in all this, but try to step into their shoes for a minute.

If you had some relatives that were spending wildly and that had already run up $100,000 in credit card debt, would you be a co-signer on their next credit card application?

Of course not.

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http://theeconomiccollapseblog.com/archives/eurobonds-the-issue-that-could-shatter-europe

Stefan Steinberg - Sharp Divisions On Eve Of EU Summit

European leaders meet on Wednesday to discuss the deepening European crisis. On the eve of the summit, the Organization for Economic Cooperation and Development (OECD) issued a report that confirms the intensification of recessionary trends.

The OECD Economic Report released Tuesday warns that the “fragile, extremely uneven” international recovery “could be derailed by the crisis in the euro area.”

The OECD has downgraded its prognosis for growth in its 34 member states from an annual rate of 1.8 percent in 2011 to 1.6 percent in 2012. The report makes clear that the chief culprit in dragging down world growth is Europe. “The crisis in the euro zone remains the single biggest downside risk facing the global outlook,” said OECD chief economist Pier Carlo Padoan on Tuesday.

In what amounts to an indictment of the austerity policies imposed by the “troika”—the European Union, the European Central Bank and the International Monetary Fund—the report highlights the risk of a renewed banking crisis across the continent. It states: “Adjustments in the euro area are now taking place in an environment of slow or negative growth and deleveraging, prompting risks of a vicious circle involving high and rising sovereign indebtedness, weak banking systems, excessive fiscal consolidation and lower growth.”

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http://www.wsws.org/articles/2012/may2012/euro-m23.shtml

Marshall Auerback - Today Germany Is the Big Loser, Not Greece

Given the German electorate’s long standing aversion to “fiscal profligacy” and soft currency economics (said to lead inexorably to Weimar style hyperinflation), one wonders why on earth Germany actually acceded to a “big and broad” European Monetary Union which included countries such as Greece, Portugal, Spain and Italy.  Clearly, this can be better understood by viewing the country through the prism of the Three Germanys, which we’ve discussed before:Germany 1 is the Germany of the Bundesbank: the segment of the country which to this day retains huge phobias about the recurrence of Weimar-style inflation, and an almost theological belief in sound money and a corresponding hatred of inflation. It is the Germany of “sound finances” and “monetary discipline”. In many respects, these Germans are Austrian School style economists to the core. In their heart of hearts, many would probably love to be back on an international gold standard system.

Germany 2 is the internationalist wing of the country, led by Helmut Kohl. Kohl and his successors are probably the foremost exponents of the idea that Europe can rid itself of the “German problem” once and for all if Germany firmly binds itself to a “United States of Europe” and continues to construct institutions that broadly move the EU in this direction. It is questionable whether this vision has survived significantly beyond the tenure of Helmut Kohl himself.

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http://neweconomicperspectives.org/2012/05/today-germany-is-the-big-loser-not-greece.html

Harry Papachristou and Giles Elgood - Social Nightmare Foretold if Greece Heads for Euro Exit

In Athens, the homeless are on the streets in growing numbers, soup kitchens feed twice as many people as a year ago, and the poor are diving into garbage bins in search of scrap they can sell.

Greece is close to breaking point as it struggles with austerity targets set by creditors, but this is just a foretaste of the nightmare of unrest, hunger and even anarchy that could engulf the debt-crippled nation if it is forced out of the euro.

If the exact economic impact of such a move is hard to nail down - newly issued drachmas devalued by up to 70 percent, runaway inflation, a banking meltdown, a collapse in trade - the implications for ordinary Greeks crushed by the debt crisis are even harder to predict.

Without international bailout cash, salaries and pensions would go unpaid and violence, political extremism and uncontrolled emigration could quickly follow.

After voting inconclusively for parties that opposed foreign-imposed austerity, including the neo-Nazi Golden Dawn, Greeks head to the polls again in a month's time. This election is being portrayed internationally as a referendum on the single currency, even if Greeks do not yet see it that way.

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http://globalresearch.ca/index.php?context=va&aid=30953

Gar Alperovitz - The Rise of the New Economy Movement

As our political system sputters, a wave of innovative thinking and bold experimentation is quietly sweeping away outmoded economic models. In 'New Economic Visions', a special five-part AlterNet series edited by Economics Editor Lynn Parramore in partnership with political economist Gar Alperovitz of the Democracy Collaborative, creative thinkers come together to explore the exciting ideas and projects that are shaping the philosophical and political vision of the movement that could take our economy back.

Just beneath the surface of traditional media attention, something vital has been gathering force and is about to explode into public consciousness. The “New Economy Movement” is a far-ranging coming together of organizations, projects, activists, theorists and ordinary citizens committed to rebuilding the American political-economic system from the ground up. 

The broad goal is democratized ownership of the economy for the “99 percent” in an ecologically sustainable and participatory community-building fashion. The name of the game is practical work in the here and now—and a hands-on process that is also informed by big picture theory and in-depth knowledge. 

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http://www.alternet.org/story/155452/the_rise_of_the_new_economy_movement

Graham Harvey - The New Day Age

One of Britain's leading agricultural scientists fears we may be entering a new dark age. Professor Maurice Moloney – director of Rothamsted Research – is worried by green activist threats to trash a trial plot of GM wheat at the Hertfordshire research site. "We face the destruction of a technology that could not just help wheat production in Britain," he says, "but could boost crop yields elsewhere in the world."

Down here in Candleford we take a rather different view. We think that if there’s a new dark age being ushered in, it's because of the decisions made by Prof Moloney and the BBSRC – the funding body that appointed him. Rothamsted's chief responsibility is to conduct research aimed at improving our food security. Britain already has a secure food production system – it’s called the mixed farm. It's capable of producing large amounts of healthy food through biological processes. And it has an inbuilt resilience to climate change by virtue of its biological diversity.

A World Bank-funded study by more than 400 scientists around the world concluded that diverse farming systems like UK mixed farming were the most secure and effective way to feed the world, now and in the future (IAASTD, 2008). You might think –as we do – that a leading research station concerned with food security would concentrate its energies on understanding and refining this established model. But under Professor Moloney, the scientists seem content to gamble our food security on an unproven and potentially unstable technology.

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http://grahamsquest.co.uk/the-new-dark-age/

Ambrose Evans-Pritchard - World edges closer to deflationary slump as money contracts in China

Narrow M1 data for April is the weakest since modern records began. Real M1 deposits – a leading indicator of economic growth six months or so ahead – have contracted since November.

They are shrinking faster that at any time during the 2008-2009 crisis, and faster than in Spain right now, according to Simon Ward at Henderson Global Investors.

If China were a normal country, it would be hurtling into a brick wall. A "hard-landing" later this year would already be baked into the pie.

Whether this hybrid system of market Leninism – with banks run by Party bosses – conforms to Western monetary theory is a hotly contested point. The issue will be settled one way or the other soon.

What seems clear is that China's economy did not bottom out as expected in the first quarter. It is flirting with real trouble. Yao Wei from Societe Generale says a blizzard of awful data "screams out for easing".

Read More:

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9263196/World-edges-closer-to-deflationary-slump-as-money-contracts-in-China.html

Paul Buchheit - Five Facts That Put America to Shame

"Give me your tired, your poor, your huddled masses...I lift my lamp beside the golden door!" These words, from poet Emma Lazarus, were inscribed on the Statue of Liberty over 100 years ago. Today the golden door has a lock on it, paid for with record profits from the health care, education, and financial industries

1. We're near the bottom of the developed world in children's health and safety

According to a 2007 UNICEF report, the U.S. ranked last among 21 OECD nations in an assessment of child health and safety. The assessment measured infant mortality, immunization, and death from accidents and injuries.

A related 2009 OECD study generally agreed, placing the U.S. 24th out of 30 OECD countries for children's health and safety. It also showed the devastating effects of inequality in our country. Despite having the second-highest average income for children among the 30 OECD countries, the U.S. ranked 27th out of 30 for child poverty (percentage of children living in households that are below 50% of the median income).

2. We've betrayed the young people who were advised to stay in school

Over 40% of recent college graduates are living with their parents, dealing with government loans that average $27,200. The unemployment rate for young people is about 50%. More than 350,000 Americans with advanced degrees applied for food stamps in 2010.

As Washington lobbyists endeavor to kill a proposed bill to reduce the interest rates on student debt, federal loans remain readily available, and so colleges go right on increasing their tuition.

Meanwhile, corporations hold $2 trillion in cash while looking for investments and employees in foreign countries, and American students are forced to accept menial positions. Yet delusions persist about our new generation of would-be workers. Conservatives are all bubbly about today's young entrepreneurs creating their own jobs -- jobs that "don't yet exist."

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http://www.commondreams.org/view/2012/05/14-0