Change of Climate in the U.S.

Sunita Narain

Climate change has a surprising new follower: the U.S. president. The U.S. government has been the biggest bugbear in climate change negotiations. Since discussions began on this issue in the early 1990s, the United States has stymied all efforts for an effective and fair deal. It has blocked action by arguing that countries like China and India must first do more. Worse, successive governments have even denied that the threat from a changing climate is real, let alone urgent. President Barack Obama, who came to power in the first term with the promise of change in dealing with climate change, was noticeably coy about the issue in the recent years.

But in May this year, the U.S. government released its National Climate Assessment, which puts together carefully peer reviewed scientific information on the impacts in the United States. It makes clear that even the United States is not immune to the dangers of climate change. In fact, many trends are visible and the country is already hurting.

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Big Food, Big Pharma, Big Tobacco, Big Finance, and Little Marijuana

Sasha Breger Bush, Guest Blogger

Passed in 2012, Colorado’s Amendment 64 legalized the growing and selling of marijuana on a recreational basis. With medical marijuana, recreational marijuana has helped lift the people of Denver out of the Great Recession by inspiring leagues of new small businesses, creating new jobs, boosting commercial real estate values, and increasing state and local tax revenues. It turns out that the local marijuana market is fairly recession-proof and is actually bolstering local resilience to global crisis.

As I’ve watched this novelty unfold over the past couple of years (with considerable delight, to be frank) and witnessed first hand the important benefits for our local economy, I’ve grown increasingly concerned about the possibility of legalization on the federal level. While state level legalization has—for all of its still considerable problems—motivated economic recovery and helped working and middle class folks earn more income, get better jobs and enjoy more robust public services, federal legalization risks these benefits leaking out of local economies into the pockets of Big Business.

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High Risks, Few Rewards for Mexico with Monsanto's Maize

Timothy A. Wise

Triple Crisis contributor Timothy A. Wise’s analysis of genetically modified maize and the risks to Mexico, the world’s cradle of maize cultivation, continues. His previous posts on the topic can be read here and here.

I had come to Mexico to investigate the ongoing controversy over the proposed introduction of genetically modified (GM) maize into the birthplace of this important global food crop. The issue was hot, because last October a Mexican judge had issued an injunction halting all experimental and commercial planting of GM maize, a process that was well underway in six northern states. The ruling cited the need for precaution to ensure that Mexico’s rich diversity of maize varieties were protected from inadvertent “gene flow” from GM maize.

As I began to investigate this most controversial of biotech initiatives, the question that most puzzled me was: why anyone in Mexico thinks the country needs anything that transgenic maize has to offer?

Monsanto, of course, had an answer to that question. I met with a group of company officials in their high-rise offices in Mexico City’s transnational business district of Santa Fe. They offered their “Vision 2020,” in which transgenic maize is key to feeding the world. In Mexico, they argued, it would help double Mexican maize production, reduce persistent rural poverty among the country’s small-scale maize farmers, restore the country’s self-sufficiency in its key food staple and reduce the negative environmental impacts of maize farming. They even used the term “food sovereignty” to describe their goal for Mexico. This was more than a vision; this was a hallucination.

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High Risks, Few Rewards for Mexico with Monsanto’s Maize

Timothy A. Wise

Triple Crisis contributor Timothy A. Wise’s analysis of genetically modified maize and the risks to Mexico, the world’s cradle of maize cultivation, continues. His previous posts on the topic can be read here and here.

I had come to Mexico to investigate the ongoing controversy over the proposed introduction of genetically modified (GM) maize into the birthplace of this important global food crop. The issue was hot, because last October a Mexican judge had issued an injunction halting all experimental and commercial planting of GM maize, a process that was well underway in six northern states. The ruling cited the need for precaution to ensure that Mexico’s rich diversity of maize varieties were protected from inadvertent “gene flow” from GM maize.

As I began to investigate this most controversial of biotech initiatives, the question that most puzzled me was: why anyone in Mexico thinks the country needs anything that transgenic maize has to offer?

Monsanto, of course, had an answer to that question. I met with a group of company officials in their high-rise offices in Mexico City’s transnational business district of Santa Fe. They offered their “Vision 2020,” in which transgenic maize is key to feeding the world. In Mexico, they argued, it would help double Mexican maize production, reduce persistent rural poverty among the country’s small-scale maize farmers, restore the country’s self-sufficiency in its key food staple and reduce the negative environmental impacts of maize farming. They even used the term “food sovereignty” to describe their goal for Mexico. This was more than a vision; this was a hallucination.

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United Progressive Alliance-2 and Welfare Schemes

C.P. Chandrasekhar and Jayati Ghosh

A perception has been gaining ground that the United Progressive Alliance (UPA) coalition suffered politically because of its commitment to welfare schemes and “handouts” to the poor rather than economic growth. The murmurs began during the election campaign—fed by the BJP’s strident denunciation—and have gained ground especially since the UPA’s and Congress Party’s comprehensive electoral defeat nationally.

The argument goes something like this: The past five years of UPA-2 were years of “policy paralysis” in which economic growth slowed down because projects were stalled by environmental and other hurdles and slow clearances; and no new “reforms” were undertaken such as deregulating whatever little is left of formal employment in the organised sector. Instead the government frittered away time and resources on “populist” schemes that were corrupt and wasteful, which the country cannot afford, and which anyway the people do not really want. This argument, in various forms, is being repeated so often that once again people assume that it must be true.

In fact it is wrong on practically all counts. To begin with, while the elections do indeed reveal the extent of public dissatisfaction with the UPA, only one-fifth of the electorate actually voted for the BJP, and many of them did so because of effective communal polarization in the Hindi heartland. The slower growth of the second UPA tenure was related not only to effects of the global economic crisis but equally the result of the mess in the infrastructure sector, with massively leveraged investments not bearing sufficient fruit for private sector interest to be retained and a looming crisis of bad debt especially for power and aviation loans of public sector banks.

Most of all, the argument that UPA-2 wasted the country’s resources on “populist” schemes is both conceptually flawed and empirically unjustified. It is analytically misconceived because it does not recognize the crucial role played by social spending on countercyclical consumption stabilizing, as well as on ensuring domestic demand and positive multiplier effects on economic activity, or the impact on future productivity because of a better fed and healthier population.

But it is also empirically wrong: UPA-2 did not really spend on these important schemes. In fact, it can be forcibly argued that the Congress and its allies would have been much better off if the government had actually put its money where its mouth was. As it happens, the UPA parties barely trumpeted any of these measures in their electoral campaigns, whether because of a lack of conviction in them or because of the guilty feeling that they had not lived up to their own promises.

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Flashboys and "Investor" Outrage

Doug Orr, Guest Blogger

In his article “The Big Casino,” in the latest issue of Dollars & Sense magazine, economist Doug Orr notes the recent attention—thanks largely to Michael Lewis’ celebrated book Flash Boys: A Wall Street Revolt—to high-speed stock trading. Lewis tells a story in which the problem goes no deeper than the rigging of the stock-market game to favor some players over others. (It is a measure of the superficiality of Lewis’ analysis that the solution on offer, and the objective of the story’s heroes, is to set up a different kind of casino!) “The problem with the stock market is not just that the casino game has been rigged to favor some gamblers,” Orr argues. “More fundamentally, the problem is the existence of the casino in the first place.”

Gamblers at a blackjack table know they will occasionally lose. But if they see a player who can take his bets off the table if he is losing and can take part of every pot as well, they will be very upset. This is why Michael Lewis’ book Flash Boys: A Wall Street Revolt, which describes how high-frequency traders are able to “frontrun” the market, has raised such a furor in the business press. Gamblers like playing the game, but not if the game is rigged. When they finally find out how it is rigged they will protest loudly.

On April 3, in reaction to the revelations in Flash Boys, brokerage-firm founder Charles R. “Chuck” Schwab issued a statement calling high-speed trading a “growing cancer” that threatens to destroy faith in the fairness of the markets. Schwab pointed out that while the total number of trades stayed relatively flat from 2007 to 2013, the number of trade inquires rose from 50,000 per second to 300,000 per second! He called this “an explosion of head-fake ephemeral orders” designed to “skim pennies off the public markets by the billions.” He claimed that “high-frequency trading isn’t providing more efficient, liquid markets,” but rather it is “picking the pockets of legitimate market participants.” He pointed out that some high-frequency traders claim to be profitable on over 99% of their trading days, a statistical impossibility unless the game is rigged.

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Flashboys and “Investor” Outrage

Doug Orr, Guest Blogger

In his article “The Big Casino,” in the latest issue of Dollars & Sense magazine, economist Doug Orr notes the recent attention—thanks largely to Michael Lewis’ celebrated book Flash Boys: A Wall Street Revolt—to high-speed stock trading. Lewis tells a story in which the problem goes no deeper than the rigging of the stock-market game to favor some players over others. (It is a measure of the superficiality of Lewis’ analysis that the solution on offer, and the objective of the story’s heroes, is to set up a different kind of casino!) “The problem with the stock market is not just that the casino game has been rigged to favor some gamblers,” Orr argues. “More fundamentally, the problem is the existence of the casino in the first place.”

Gamblers at a blackjack table know they will occasionally lose. But if they see a player who can take his bets off the table if he is losing and can take part of every pot as well, they will be very upset. This is why Michael Lewis’ book Flash Boys: A Wall Street Revolt, which describes how high-frequency traders are able to “frontrun” the market, has raised such a furor in the business press. Gamblers like playing the game, but not if the game is rigged. When they finally find out how it is rigged they will protest loudly.

On April 3, in reaction to the revelations in Flash Boys, brokerage-firm founder Charles R. “Chuck” Schwab issued a statement calling high-speed trading a “growing cancer” that threatens to destroy faith in the fairness of the markets. Schwab pointed out that while the total number of trades stayed relatively flat from 2007 to 2013, the number of trade inquires rose from 50,000 per second to 300,000 per second! He called this “an explosion of head-fake ephemeral orders” designed to “skim pennies off the public markets by the billions.” He claimed that “high-frequency trading isn’t providing more efficient, liquid markets,” but rather it is “picking the pockets of legitimate market participants.” He pointed out that some high-frequency traders claim to be profitable on over 99% of their trading days, a statistical impossibility unless the game is rigged.

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Global Food Security Needs States to Ally with Family Farmers

Sylvia Kay, Guest Blogger

Sylvia Kay is a researcher at Transnational Institute (TNI). She works on a wide range of issues including land grabbing, water, and agricultural investment.

South Africa’s most famous cleric, Desmond Tutu, in his inimitable style, once said, “If an elephant has its foot on the tail of a mouse, and you say that you are neutral, the mouse will not appreciate your neutrality.” His blunt speaking has particular relevance to important negotiations taking place in Rome this week at the United Nations Committee on World Food Security, which will define principles for “responsible agricultural investment” (known as RAI) in the context of an ongoing food crisis and an unprecedented wave of land grabbing.

When it comes to agriculture and food, the elephant is agribusiness. Just three companies control 50% of the commercial seed market; only four companies control 75% of the global trade in grains and soya. Their argument is that the state’s role should be that of a neutral broker, encouraging primarily private investment in agriculture. They are willing to accept guidelines for “responsible investment,” but within a model that sees ever increasing levels of foreign direct investment and the deepening and further integration of national agricultural sectors into global commodity chains and markets. Theirs is essentially a business-as-usual approach which seeks to retrofit the RAI principles to existing agribusiness initiatives.

While such principles will boost the profits of some corporations, the evidence shows that it will not deliver on the CFS mandate to realise the right to adequate food for all. One in eight people in the world are currently undernourished—and this has worsened in recent years. In fact, reliance on global markets led to global food prices in 2007 rising to levels in real terms not witnessed since 1846. This has not only added between 130 to 150 million people to those living in extreme poverty, it has also fueled an unprecedented wave of land grabbing across the global South by governments seeking security from food riots and corporations seeking profits from perceived scarcity.

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Trans-Pacific Partnership: Another Trade Liberalization Scam

John Weeks, Guest Blogger

The gathering pressure for Congress to “fast track” the Trans-Pacific Partnership (TPP) demonstrates yet again that trade liberalization is one of the few aspects of economic policy about which there is agreement across the mainstream of the political spectrum, in both the United States and Europe. Almost all conservative commentators endorse it with gusto, for centrists it is an article of faith, and even many progressives accept it implicitly by their criticism of industrial country protection.

The neoliberal ideologues sell it by bestowing the label “free trade,” which is allegedly reached by repeated measures of “trade liberalization.” No matter that the TPP has little to do with trade and everything to do with setting loose capital on a global scale. Well tested and demonstrably disastrous in the North American Free Trade Association, this liberating of capital includes 1) global extension of corporate patents under the moniker “intellectual property rights,” 2) shifting enforcement of those patents from national governments and courts to ad hoc international tribunals, and 3) prohibiting as “protectionist” measures protecting labor rights and the environment.

This is not “freer” trade, but re-regulation of trade to entrench corporate profit making. However, if you call it freer trade, you can sell it to the public. In order to discredit this corporate sales pitch, I have to drive a stake through the heart of the Free Trade dogma that is the ideological justification for neoliberal globalization.

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Mexico and Monsanto: Taking precaution in the face of genetic contamination

Timothy A. Wise

Regular Triple Crisis contributor Timothy A. Wise leads the Globalization and Sustainable Development Program at the Global Development and Environment Institute (GDAE), Tufts University. This is the second installment in his series on Mexico, genetically modified organisms, and genetic contamination of native maize. See his earlier post on the subject here.

To listen to the current debates over the controversial requests by Monsanto and other biotech giants to grow genetically modified (GM) maize in Mexico, you’d think the danger to the country’s rich biodiversity in maize was hypothetical. It is anything but.

Studies have found the presence of transgenes in native maize in nearly half of Mexico’s states. A study of maize diversity within the confines of Mexico’s sprawling capital city revealed transgenic maize in 70 percent of the samples from the area of Xochimilco and 49 percent of those from Tlalpan.

Mexico is the “center of origin” where maize was first domesticated from its wild ancestor, teocinte. The country is arguably the last place you’d want to risk the possibility that its wide array of native seeds might be undermined by what indigenous people have called “genetic pollution” from GM maize.

Last October, a judge issued an injunction putting a halt to all experimental and commercial planting until it can be proven that native maize varieties are not threatened by “gene flow” from GM maize. The precautionary measure comes more than a decade too late.

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