Big And Small Business - The Muscular Widget-Sellers

Imagine, if you will, a group of widget-makers and widget merchants in a particular country. Let's say that some of these widget-makers are actually large firms that employ over a thousand people, whereas some of them are very small outfits run by a husband and wife and a couple of children. Let's also say that most people in the widget business in your country believe that it is imperative to grow as large as possible, and to capture as much market share as possible. Those who believe thus might also believe that it is acceptable to use any means available to achieve growth and to wipe out competition.

Now let's say that the making of widgets requires great physical strength for the purpose of assembling heavy parts that are hard to handle. Let's also say that some of the biggest names in the widget business are outsourcing their production to countries whose labor costs are extremely low, in order to boost production per dollar spent and to increase company profits. The only problem is that the workers in these countries are not very strong, since they only get a dollar a day and often go hungry. Thus some widgets sold in your country begin to fail prematurely, causing widget users to stub their toes and smash their thumbs.

Now stubbed toes and smashed thumbs hurt (and make their sufferers mad), so these victims start complaining to the government. But the biggest names in the widget business have bought off most of the legislators and officials in the government, so when public pressure forces these officials to do something about the problem of widgets that break, they naturally don't attack the source of the problem. Instead, they draft a law which states that "in view of the danger to citizens from breaking widgets (and more importantly, in view of the danger to the widget business from the perception of danger posed by defective widgets), our Government will now require all businesses engaged in widget-making to demonstrate that the personnel in their firms have the necessary physical strength to make widgets. We do therefore establish a Widget Physical Fitness Administrator with full authority to test each widget firm's physical fitness."

The Administrator then issues a decree that each firm collectively or each sole proprietor must do a thousand push-ups every time they ship a certain number of widgets (say, a thousand push-ups for every hundred widgets). Moreover, each batch of a thousand push-ups must be completed within five minutes. For the personnel of Circle D Widgets and General Widgets, this is easy, since there are at least five hundred project managers, deputy vice presidents, marketing directors, project engineers, and lawyers at each firm. As soon as the Administrator visits their firm, they all drop down and knock out one push-up each. But the proprietors of Little Widget On A Hill have a much harder time, since this firm is comprised of a middle-aged hobbyist (who goes to the gym religiously every day), her couch-potato husband (who handles the paperwork), a couple of grade-school grandkids (whom the hobbyist takes along when she goes to the gym), and a ten-year-old calico cat. How long do you think Little Widget On A Hill will be able to stay in business?

Knee-Capping The Peasants - Three Examples

I have written on several occasions that we are all increasingly dependent on the global system known as the “official” economy, and that this official system is now breaking. I have also repeatedly mentioned that the masters of this present global system are waging an active war against anyone who tries to create a safety net of alternative systems. One of their means is the use of governments to pass laws that make various acts of self-sufficiency illegal, or that impose a penalty on people who use alternatives to the official system. Here are three beautifully evil examples:

Oregon State House Bill 3008. Are you an Oregonian who recently chose to save money by bicycle commuting instead of driving? Four members of the Oregon legislature want to take that money away from you. They are Republican Representative Wayne Krieger, Republican Representative Sal Esquivel, Republican Representative Bill Garrard and Democratic Representative Michael Scaufler. They have introduced House Bill 3008 (http://www.leg.state.or.us/cgi-bin/searchMeas.pl), a measure that, if passed, would require all bicycles ridden in Oregon to be registered by their owners via a $54 biannual fee. Failure to register would result in a traffic fine of up to $90. This is the same amount charged for registering cars!

Ostensibly, the bill is designed to raise funds for improvement and expansion of bikeways and bike paths, but in actuality, the bill may be yet another attempt to discourage people from using bikes as transport, and to force them back into cars. One of the bill's sponsors, Rep. Wayne Krieger, had opposed the Oregon Vulnerable Roadway Users bill in 2007. He has also stated his belief that bikes don't belong on the road. (Source: http://bikeportland.org/2009/03/06/mandatory-bike-registration-bill-introduced-in-salem/) The other thing is that only two thirds of the registration funds collected would go toward bikeway/bike path projects. The remaining third would be kept by the registering agency (who could be a private contractor hired by the State).

Is this the way to protect the budgets of struggling families, or to combat global warming? Is this how to address impending energy shortages? And what about the many, many homeless people one sees on bikes nowadays, people for whom a bicycle is a vital piece of equipment? Is the state going to try to shake them down, or will they try to confiscate their bikes? House Bill 3008 is just plain stupid.

The U.S. Consumer Product Safety Improvement Act of 2008. This is the law which is causing consternation among thrift shop owners, small home-based makers of childrens clothes and toys, and sellers of children's books. This law, sponsored by Democratic Congressman Bobby Rush and signed into law by Republican President George W. Bush, requires that any toys, apparel or other “children's products” (products made for children 12 years old or younger) must be subjected to third-party testing for lead and phthalates before being sold. Enforcement of this law was intended to apply even to items made before the law was passed. Moreover, the law was intended for any product consisting of a completed assembly of various parts – even if those parts did not contain lead or phthalates themselves.

These requirements mean the effectual destruction of thrift shops and garage sales, as well as other sellers of used children's books, toys and clothing. Moreover, they mean testing for things that clearly could not possibly contain lead, such as rag dolls made from cloth, cotton stuffing and thread. And the third-party testing requirements threaten the very existence of small-scale, home or cottage-based industries and sellers, since they can't afford the third-party testing fees. (See http://www.roanoke.com/news/roanoke/wb/197224, http://www.amadirectlink.com/news/story.asp?id=629, http://www.middletownjournal.com/hp/content/oh/story/news/local/2009/02/18/hjn021809leadlibraries.html, http://www.ldnews.com/ci_11810629?source=most_viewed, and http://www.khnl.com/Global/story.asp?S=9799062&nav=menu55_2)

But the requirements of this law are good for Wal-Mart, Target, Costco, and the really big children's product manufacturers, who are the only ones with enough cash flow to afford compliance with this law – yet whose products, made outside the United States in countries with lax regulations, were responsible for causing the very problems that this law is supposed to fix. Were you trying to become self-sufficient by starting a home-based children's craft business? Has this law just wiped you out? You could always try to get a job at Wal-Mart or McDonald's. How effective are laws to protect chickens when they are written by foxes? Look, there goes a ten-year-old right now, chewing on his bicycle chain! Was that kid's bicycle subjected to third-party testing before it was sold??!

Food Safety Modernization Act of 2009. This bill, also known as House Resolution 875, was introduced into the U.S. House of Representatives by Democratic Representative Rosa DeLauro and 39 co-sponsors, all Democrats. This bill has many bloggers upset because of the perceived threat the bill poses to our ability to be self-sufficient in providing our own food without having to rely on the present global system of industrial food production. The fuss over the bill made me curious, so I downloaded a copy of it (you can get yours here: http://www.govtrack.us/congress/billtext.xpd?bill=h111-875) and read the whole thing this afternoon.

This bill is our government's response to recent food safety scandals such as melamine residues in baby formula and pet food shipped to the U.S., as well as outbreaks of samonella in peanut butter, eggs, meat, poultry, pet food and vegetables. The introductory paragraphs of the bill make it clear that the bill's purpose goes beyond merely protecting consumer health: “Congress finds that the safety of the food supply of the United States is vital to...public confidence in the food supply and to the success of the food sector of the Nation's economy...” and “...loss of public confidence in food safety [is] damaging to consumers and the food industry, and place[s] a burden on interstate commerce and international trade...” (emphasis added). In other words, one of the primary purposes of this bill is to repair the damage to the global food industry due to loss of consumer confidence on account of recent food safety scandals.

The bill proposes to set up a far-reaching bureaucracy responsible for enforcing uniform standards for all “food establishments,” as defined by the bill. “Food establishments” are defined as facilities that slaughter animals, that process raw seafood or other raw animal products, that process cooked, pasteurized, or otherwise ready-to-eat animal products or that processes raw, ready-to-eat fresh produce, or any establishment that process all other categories of food products not described in the aforementioned definitions. The bill also has requirements for “food production facilities,” defined as farms, ranches, orchards, vineyards, or feedlots.

For “food establishments,” the bill sets up requirements for mandatory inspections, quality control processes, testing and documentation of records. It also requires all “food establishments” to register with the Federal government. For “food production facilities” such as farms, the bill requires the operators to follow the National Animal Identification System, as well as “minimum standards” related to “growing, harvesting, sorting, and storage operations” for “fertilizer use, nutrients, hygiene, packaging, temperature controls, animal encroachment and water...”

The concern over the safety of our nation's food supply is commendable. Some of the provisions of this bill seem to address that concern in a reasonable manner, including testing requirements for food imported to the United States. However, as I read this bill, I got the impression that too many of its provisions are poorly defined, and could lead to draconian, hugely invasive government interference in small, family-owned farms, driving them out of business. The requirement to follow the National Animal Identification System is a sure-fire small farm killer, written expressly to drive small meat farmers out of business due to the huge cost of compliance. This bill seems to be yet another attempt at knee-capping the peasants.

One thing about the peasants: Since I am a peasant who wants to escape from reliance on our breaking system, I care a great deal about the attempts by the corporate masters of our present system to force me into continued dependence on their system. In fact, I get mad. There seems to be a shortage of anger about these things nowadays. When that anger is expressed, it's usually in the form of calls to “write your congressman!” Should chickens appeal to foxes for protection? But if chickens figure out a way to make predatory behavior hard on foxes, they're apt to get more satisfying results. Write your congressman if you like, but don't stop there.

Therefore I'll just inform you that H.R. 875 sponsor Representative DeLauro is married to Stanley Greenberg, principal of Greenberg Quinlan Rosner Research, a political campaign company (http://www.sourcewatch.org/index.php?title=Greenberg_Quinlan_Rosner). Among his company's recent clients is Monsanto, a large-scale manufacturer of pesticides and other farm “inputs,” as well as genetically-modified seeds. As a huge agribusiness player, Monsanto is a company that would have a great deal to gain from driving small farms out of business, and has actively campaigned against organic agriculture. (Source: http://www.sourcewatch.org/index.php?title=Monsanto)

Monsanto also makes products such as Roundup Herbicides and Fielder's Choice Seeds, and is a partner with the Scotts Miracle-Gro company in distributing lawn care products. You can find their products in any Home Depot or Lowe's or Tru-Value hardware store. Or then again, maybe you can't. At least I can't anymore. My anger toward Scotts and Monsanto has induced a selective blindness in my eyes – I can't see their products anymore, no matter what store I visit. Oh, well. I guess I can't buy what I can't see. As I find out more about other corporate sponsors of this sort of foolishness, I may stop seeing their products also.

Oh, and if you want to find out more about the National Animal Identification System, read this: http://www.dcexaminer.com/opinion/columns/TimothyCarney/Livestock-tracing-bill-could-be-end-of-family-farms-ranches--41197442.html. I guess I won't ever again be eating at McDonald's either.

Repairing Neighborhoods - Rototilling Versus Sheet-Mulching

(A confession: I am not entirely satisfied with the piece I am writing this week, since some of the things I suggest here may require government intervention, and I think the government on all levels is probably not the wisest or most reliable partner in doing good at present. If anyone has any suggestions for how some of the suggestions in this post could be implemented without government help, feel free to share them.)

There are two concepts of neighborhood resilience nowadays, arising from two almost mutually exclusive views of our present and future economic, ecological and energy prospects. One concept defines resilience as the ability of a neighborhood to retain its property values and desirability as a real estate market amidst changing economic conditions in the larger world. An example of this concept is seen in a paper, “Foreclosure and Neighborhood Resiliency”(www.nw.org/network/training/upcoming/documents/foreclosure_paperFinal_Draft1_2_.pdf.), written by Michael Schubert of Community Development Strategies, a real estate development consulting firm. Another example of the same concept is an article, “The Bronx is Up” (www.manhattan-institute.org/email/crd_newsletter02-09.html), published in the February 2009 newsletter of the Manhattan Institute's Center for Rethinking Development.

According to the view of these articles, a resilient neighborhood is able to attract a high percentage of qualified owner-occupant buyers, and is able to quickly recover from foreclosures that happen in its midst, due to the general desirability of its housing and the attractiveness of other features, such as schools, restaurants, retail centers such as shopping malls, and other amenities. Such a neighborhood also makes a strong contribution to a city's tax base, and is an integral player in the official global economy.

Strategies for maintaining high property values include neighborhood associations and neighborhood involvement to maintain housing according to certain standards of appearance which have historically been associated with an image of prosperity, including things like well-kept lawns, ornamental shrubs, “acceptable” styling and color of housing exterior finish, and the absence of things considered to be “unsightly,” such as clotheslines. When foreclosures begin to happen in such neighborhoods, “resilience strategies” are suggested which include such things as neighbors maintaining adjacent abandoned properties and the aggressive marketing of the neighborhood and its vacant houses to new, highly qualified owner-occupant homebuyers. (Mr. Schubert's paper seems to imply that counseling families in trouble is less important than aggressive “recycling” of foreclosed or vacant properties to new, well-qualified buyers.)

But from time to time, even the best neighborhoods “fail” – the number of vacancies and foreclosures continues to increase, houses fall into disrepair, and property values and tax revenues decline. For those who view neighborhood resilience as the ability of a place to retain high property values, the proper approach to a failed neighborhood is redevelopment – either the expensive renovation of existing housing stock, or the demolition of existing stock to make way for new construction, which often consists of upscale condo's, townhomes, high-rises, or other high-density housing, along with nearby, conveniently-located new shopping and retail hubs, restaurants, health clubs and other “value-enhancing” amenities. The goal of this new construction is to restore the property values and tax revenues of a place to high levels.

It's easy to see why high property values are so important to many people nowadays, since for the last several years the American economy has been driven by an expanding bubble of debt backed by the use of real estate as collateral. This use of real estate required a corresponding real estate bubble, with housing prices that seemingly appreciated forever. Both bubbles are now collapsing, due to the discovery that America as a whole can no longer pay its debts, and that many Americans can no longer pay even the interest on their debts, let alone interest and principal. Our inability to pay is due to the collapse of our resource base (Peak Oil, peak minerals, water shortages, “peak everything”), as well as the fact that we no longer make enough material things of value in this country to finance our debts.

This means that the foreclosures that ravaged almost all neighborhoods in America are starting to ravage even the most upscale neighborhoods. Every day on the way to work I still pass by the same “Bank Owned” house I first saw two months ago in Lake Oswego. Lake Oswego, of all places! Another ritzy house near where I work has been vacant for nearly a year. There are also news reports of “rich” people in upscale neighborhoods who are now relying on pawnshops for emergency loans. In short, almost everyone is hurting and property values are collapsing. And there is almost no likelihood that anyone will be able to reinflate property values to their bubble heights ever again. There will soon be a lot of “failed” neighborhoods.

We therefore need a different concept of neighborhood resilience. Let's define resilience as the ability of the people of a neighborhood to take care of themselves and meet their needs without fear of displacement, in spite of stresses such as disasters or adverse economic conditions. According to that definition, most neighborhoods in America are not resilient. (In fact, not many middle-class or working-class households are resilient either.) The residents of most neighborhoods rely on a steady stream of income from the official economy in order to stay where they are (because they have to pay rent or a mortgage), and to buy their daily necessities. The threats to income posed by the present collapse are threatening the livelihood of these people.

Since the expense of housing is usually the biggest expense incurred by the people in a neighborhood, one way to increase neighborhood resilience is to reduce the cost of housing for families in a neighborhood. To this end, there are various governmental and non-profit groups working in the U.S. to provide affordable housing to low-income buyers, usually by building new, low-cost housing units for these buyers. I'd like to suggest a somewhat different approach, however, one which I touched on in my post, “A Safety Net Of Alternative Systems – Places To Live.”

There are three steps to this approach. First, there are now many abandoned houses in the U.S. Many of these houses are located in long-term “failed” neighborhoods in cities like Detroit, Cincinnati, Chicago and other cities listed in a recent Forbes Magazine “America's Emptiest Cities” article. The beginning of establishing resilient neighborhoods would consist of re-inhabiting these houses, since most of them are very cheap. Non-profit groups such as Habitat for Humanity could partner with city governments to buy these houses and repair them to a basic level, then sell (or give) them at a low price to low-income families.

Secondly, the non-profit groups could conduct “self-sufficiency” education programs for the new residents of these reclaimed properties. The goal of these education programs would be to teach residents how to be self-sufficient as individual households and how to set up local, low-energy economies heavily reliant on home-based industries, as well as systems of governance that met neighborhood needs. Such education might be patterned after the free classes offered during the neighborhood Portland Fix-It Fairs hosted by the city of Portland, Oregon's Bureau of Planning and Sustainability. Third, the city governments could grant extremely reduced property tax rates to neighborhoods that achieved a certain level of self-sufficiency.

There are also neighborhoods which until recently had been strong, yet are now starting to fail due to the collapsing economy. Foreclosures are starting to multiply in these places. For these neighborhoods there is a solution as well. First, city governments should “persuade” banks to forfeit to the city any bank-owned properties which remain abandoned or uninhabited for longer than a certain set time, such as nine months to one year. Such “persuasion” could be accomplished by continually raising taxes on these properties to cover such expenses as extra policing required to prevent vandalism, City resources required for upkeep of abandoned properties, and so forth. Once the city government owned these properties, it could donate them to non-profit groups with the goal of basic refurbishment of these properties in order to house low-income families. Large bank-owned properties such as McMansions could be turned into multi-tenant properties. The new residents would again be encouraged to enroll in neighborhood self-sufficiency education programs. Such an approach to foreclosure would also educate the banks to the realization that there's no longer a mathematical chance that they will ever get the payment they demanded, on the terms they once hoped for, for the properties they have repossessed, and it might make them far more willing to work with homebuyers who are now in trouble, though not yet in foreclosure. This would reduce the number of people being thrown out onto the street.

Trying to fix failing neighborhoods through redevelopment in order to “stimulate” the present official economy is like trying to start a garden by spraying and rototilling an existing grassy field. Much of the existing, beneficial life of the soil is killed in the process, and what's left usually needs lots of chemical additives in order to provide the fertility needed to grow useful crops. But building neighborhood resilience by making existing resources more affordable and educating residents in self-sufficiency is like starting a garden through the sheet-mulching method – where existing grass and weeds are turned into compost that enriches the soil and the existing life in the soil, so that the soil becomes naturally more fertile. We no longer have the resources to rototill our way to economic health. It's time instead for some sheet-mulching.

Our Least Resilient Neighborhoods

(Warning: This post is long.) Non-minority, middle- to upper-middle class families are the media's frequent focus nowadays when discussing struggling neighborhoods, households and families in the context of our present economic crisis and the challenge posed by Peak Oil. This is seen in recent news articles such as the New York Times piece titled, “You Try To Live on 500K in This Town”; the CNN stories titled, “Bad Economy? Do What You Love,” and “From Beverly Hills To Shoveling Manure On A Farm”; the Colorado Springs Gazette piece titled, “Youth Hockey Surviving Economic Crunch”; and the CBS Evening News story titled, “One Family's Recession – How A Single Family's Life Is Shifting Amid A Slumping Economy.”

These stories and others like them have common elements: namely, how affluent, usually blond, educated suburbanite and high-class urbanite families are coping, financially, psychologically and interpersonally with being forced by present circumstances to give up some of the more optional parts of their lives. Some stories chronicle the mental and emotional processes some of these individuals go through in discovering that things formerly considered to be “necessities” are, in fact, optional. And these stories are all uniformly told in warm, sensitive, empathetic tones by the American mainstream media.

But there is another, less-noticed segment of the American population that is getting absolutely slammed by the present economic collapse. Even before the collapse, their lives were lived precariously exposed above an unforgiving economic landscape lacking any safety net. Many of these people are people of color. Most of them would dearly love to trade their present lives for the supposed struggle of “trying” to live in a place like New York City for “only” $500K a year. The stories of most of these people are not covered by the mainstream media. These are the citizens of our least resilient neighborhoods, who lack the capital needed to recover from even the smallest crisis. I'd like to begin in some small way to tell their story now. My story has paralleled their story at significant times in my life. I will speak from the point of view of the black American community, since I am black, although the processes which have existed for a long time in the black community are now working everywhere.

While Men Slept...

The American civil rights struggle of the 1950's and 1960's was a landmark time that yielded important victories for black people struggling against murderous racism. Those victories included the Brown vs. Board of Education Supreme Court ruling that ended school segregation; the Civil Rights Acts of 1957, 1960 and 1964; the Voting Rights Act of 1965; and the first appearances of black men and women in intelligent roles in TV and film. Great legislative and judicial strides were made at the Federal level to render both de jure and de facto segregation illegal, and these were followed by affirmative action programs to redress the evils caused by the old segregationist laws and social arrangements.

During the 1970's, however, some voices began to make premature declarations that “We've made great strides! Surely America has risen above its ugly past. The civil rights struggle is over!” And in the 1980's, certain individuals and groups began stating that affirmative action was no longer needed, having accomplished its purpose. Some of these people even initiated lawsuits designed to end affirmative action in higher education and hiring for government jobs. Such declarations of a successful end to the civil rights struggle served to dull the awareness of the nation and to put everyone – black people included – to sleep. But the truth is that affirmative action had not gone nearly far enough in rectifying the inequalities between the American black community and the rest of American society.

The secret dismantling

By 1970, many of the gains made by black America were already beginning to be dismantled. Some elements of that dismantling were deliberate, but others were simply a consequence of the general re-ordering of American society due to changing economic conditions.

To understand the re-ordering, remember that the 1960's were the period of the last great expansion of industrial/manufacturing activity in the United States. This resulted in increased demand for skilled manufacturing employees and an increased number of openings for highly-paid manufacturing jobs. This increase in demand occurred at the same time as the strongest and most visible pushes were being made by those in the civil rights movement for equal access to jobs. Black workers were concentrated most heavily in those cities whose manufacturing base was expanding and where the demand for skilled manufacturing workers was greatest. And skilled, highly-paid manufacturing jobs were a key rung on the ladder of advancing material well-being, since such jobs could be used to pay for things like home ownership and college education.

However, the 1970's saw the reversal of manufacturing in the United States, the outsourcing of manufacturing overseas, and the beginning of the transformation of the American economy into a “service” economy. This coincided with the peak and resulting decline in American oil production and was partly caused by that peak. While this transformation devastated many communities, especially cities that depended on local industry, it was especially hard on the black community, since so many black workers had begun to rely on skilled, highly-paid manufacturing jobs as a means of climbing the ladder of advancement, and now this rung was being taken out from under them.

There was also the dismantling of enforcement of equal opportunity legislation and judicial rulings. The United States Equal Opportunity Employment Commission was created via the 1964 Civil Rights Act championed by Presidents Kennedy and Johnson and passed by Congress. As originally created, the EEOC was a rather toothless body incapable of any real enforcement. But surprisingly, it was President Nixon who proposed giving the EEOC the power to file discrimination suits against companies on behalf of citizens. This power was granted by Congress in the early 1970's. And President Carter further amplified the power and scope of the EEOC.

But President Reagan sought to dismantle the EEOC, changing it from being an activist champion of equal employment to being merely a rubber-stamp approver of a status quo enacted by the private sector. Reagan packed the EEOC with appointees who believed that government was the problem in modern society and not the solution to problems. He also slashed more than 10 percent from the EEOC budget during his first years. This dismantling of minority protection was continued under President Bush (the Elder) from 1989 to 1992, as noted in a Chicago Sun-Times article from 1992 which documented Senate hearings in which plaintiffs described the poor performance of the EEOC under the chairmanship of Bush appointee Evan Kemp (who was a champion of the disabled, by the way).

Although funding increased modestly under President Clinton, the Clinton-appointed EEOC chair channeled a large proportion of discrimination claims to binding arbitration instead of more aggressive action, and encouraged a large number of plaintiffs to settle with their employers instead of investigating their complaints. And the administration of President Bush (the Younger) resulted in a loss of 20 percent of EEOC staff from 2000 to 2006, constant calls by President Bush to cut the EEOC budget, and a swelling of the EEOC's case backlog to over 40,000 in 2007. In 2008, when Congress approved an appropriations bill that would have increased the EEOC budget by $50 million more than the President's request, Bush threatened to veto it.

This dismantling of protections and the assertion that such protections were not needed also extended to housing, where studies performed in the 1980's showed clearly that housing discrimination still existed. A Washington Post article from 1993 described the “collapse” in HUD enforcement of anti-bias policies at the national and regional levels. This set the stage for the present sub-prime crisis as experienced by the minority community.

Present Threats To The Minority Community

There are three main threats menacing the minority community at present. The first is the economic victimization which exists because of the dismantling of government protections. That victimization is via predatory lending practices leading to foreclosures and loss of home ownership in minority neighborhoods, as well as ongoing job discrimination. In 2005 and 2006, over 50 percent of all loans made to black Americans, and over 40 percent to Latinos were subprime, as opposed to only 19 percent of white borrowers. Illinois Attorney General Lisa Madigan recently stated on National Public Radio that a black American earning more than $100,000 was more likely than a white person who earned less than $35,000 to be put into a high cost, subprime loan.

These loans carried “exploding” adjustable rates and high prepayment penalties which made them impossible to refinance. These loans were also made by brokers who received kickbacks from lenders for selling subprime loans. And they were often made with the expectation that the lender would sooner or later be able to make money through repossession and resale of a borrower's house. In other words, these loans were designed to fail. The most damnable aspect of these loans was that many of these loans were not marketed to people wanting to buy McMansions, but were marketed as a way for first-time borrowers with existing mortgages to save money on monthly payments through refinancing or as a means to finance home improvements.

Now these loans have begun to bear their poisonous fruit, people are being thrown out of their homes, and these homes sit vacant or are vandalized, or are targeted for demolition to make way for “redevelopment” and “gentrification” to provide new opportunities for builders, lenders and realtors to make money.

The second threat to the minority community comes from the war on drugs and the disproportionate incarceration that has resulted from it. The war on drugs as originally conceived by President Nixon was a genuine attempt to halt the spread of drug use in the United States, and it relied on treatment as its first weapon. But that war took on a different character under President Reagan, who made mandatory sentencing one of his weapons of choice, and who signed a drug enforcement bill with provisions deliberately written to favor harsher sentencing of minorities. This was done deviously, by such things as imposing more lenient sentencing guidelines for the use of powdered cocaine (preferred by white users) versus crack cocaine (preferred by black users). As a result of this bias (perpetuated through the Clinton and Bush presidencies), in 2006 black Americans made up an estimated 15 percent of drug users, but accounted for 37 percent of those arrested on drug charges, 59 percent of those convicted, and 74 percent of all drug offenders sentenced to prison. Even now in places like Portland, Oregon, black men are more likely than white or Hispanic men to be stopped, arrested, jailed and sentenced to prison for the same offense.

But there is also evidence that the Federal government took an active role in promoting drug use in the black community, in part to fund covert operations to overthrow governments hostile to American business interests. This evidence was first presented by journalists on behalf of the Christic Institute in 1986, and was corroborated in an investigation by Senator John Kerry in 1988, as well as by journalist Gary Webb in 1996 reports in the San Jose Mercury News. Further corroboration comes from a 1998 report published by CIA Inspector General Frederick Hitz, as well as the writings of Catherine Austin-Fitts, who also wrote of the efforts of the Clinton Administration to suppress this evidence.

The third threat to minority communities comes from gangs and gang culture. Undoubtedly there is a home-grown element to this culture, as evidenced in the “Soul Patrol” I encountered in my younger days. This “Soul Patrol” consists of belligerent young black men who attack any black person whom they consider to be acting too “white”. “Acting white” is defined as speaking intelligently, working hard, trying to educate oneself, or showing an interest in anything other than hanging out, chasing women, or “getting over” on the system. Later I discovered that other ethnic groups have their own version of the “Soul Patrol.” This “Soul Patrol” mentality directly reinforces the present gang culture. But the times now facing us will demand that all of us function as productive and useful members of society, regardless of ethnic background. Those who refuse, who choose instead to be homeboys keepin' it real, may find themselves facing a backlash from the productive citizens of our society.

Yet I have to wonder sometimes if the present reinforcement of gang culture is coming entirely from within the minority community. Just as the drug problem in the minority community is being sustained by forces outside that community, I suspect that the same thing may be true of gang culture. I think especially of the popularization and promotion of gangsta, hip-hop and other “urban” culture in the mainstream media, which continues to reinforce a dysfunctional stereotype of “cool” blackness that sells, yet has nothing to do with reality. But researching and developing that hypothesis is a subject for another day.

Fostering Resilience

One measure of neighborhood resilience is “the Solari Index,” a simple metric devised by Catherine Austin-Fitts to describe how safe, healthy and liveable a neighborhood is. Ms. Fitts also points out in her writings that extremely powerful and rich interests have made a great deal of money from the business of breaking neighborhoods. Minority neighborhods have been the historical targets of choice for breakage, though the appetite of the rich and powerful has expanded to the point where they are breaking any neighborhood whose breakage might yield a profit.

Building resilient neighborhoods therefore consists of devising effective defenses against breakage, repairing the culture of the neighborhoods and fostering neighborhood self-sufficiency. I will explore these elements in further posts, God willing.

Links To Sources:

Concerning How The Affluent Are “Coping” with Recession

• “You Try To Live on 500K in This Town,”New York Times , (www.nytimes.com/2009/02/08/fashion/08halfmill.html?_r=1)

• “Bad Economy? Do What You Love,” CNN, (www.cnn.com/2009/LIVING/02/24/economy.career/index.html)

• “From Beverly Hills To Shoveling Manure On A Farm,” CNN, (www.cnn.com/2009/LIVING/02/26/economy.survivor.farm/index.html?iref=mpstoryview)

• “Youth Hockey Surviving Economic Crunch,” Colorado Springs Gazette, (www.gazette.com/sports/hockey_47994___article.html/dues_year.html),

• “One Family's Recession – How A Single Family's Life Is Shifting Amid A Slumping Economy,” CBS Evening News, (www.cbsnews.com/stories/2008/01/11/eveningnews/main3703133.shtml?source=RSSattr=Business_3703133)

Concerning Black Economic Progress, Home Ownership, Predatory Lending and “Steering”

• “Black Homeowner News,” www.blackhomeownernews.com/index.html

• “Black Families' Economic Progress Slowed,” www.boston.com/news/nation/washington/articles/2007/11/13/black_economic_progress_slowed/

• “Home Loans Discriminate, Study Shows,” New York Times, 13 May 1998 (from the Clinton years; take note!), http://query.nytimes.com/gst/fullpage.html?res=9802EEDC1430F930A25756C0A96E958260&fta=y

• “Good, Bad of Black Homeownership Discussed,” NTIC blog, http://nticnews.blogspot.com/2005/08/good-bad-of-black-homeownership.html

• A Turbulent Voyage: Readings In African American Studies, Third Edition, Floyd W. Hayes, et. al., Rowman & Littlefield Publishers Inc., 2000 (http://books.google.com/books?id=Wu0qQdMCdvIC&pg=PA480&lpg=PA480&dq=black+employment+manufacturing+1970%27s&source=bl&ots=GUu0cnRdc8&sig=7Nx2FseYSZAhn7GrItJDX-qXD9g#PPP1,M1)

• “Black Job Loss Deja-Vu,” Betsy Leondar-Wright, Black Commentator, http://www.blackcommentator.com/95/95_black_jobs.html

• “Where Did The Water Come In?”, Katrina Vanden Heuvel, The Nation, 20 February 2008, http://www.thenation.com/blogs/edcut/287768

Concerning U.S. Federal Government Civil Rights Protection

• “Richard Nixon,” Wikipedia, http://en.wikipedia.org/wiki/Richard_nixon. (Nixon may be one of America's most misunderstood and misrepresented presidents, although some of this was of his own doing.)

• “A Letter From J. Clay Smith,” United States Equal Employment Opportunity Commission, http://www.eeoc.gov/abouteeoc/35th/voices/smith.html

• The United States Since 1980, Dean Baker, Cambridge University Press, 2007 (www.cambridge.org/catalogue/catalogue.asp?isbn=0521860172 and http://books.google.com/books?id=Ofb-1KeZJ1IC&pg=PA75&lpg=PA75&dq=eeoc+%22president+reagan%22+budget&source=bl&ots=4J0HNVmENO&sig=gEB-rsPFgZH4osCL75HYHgtvXpA)

• “Jobs Discrimination Agency Lightening Its Load,” New York Times, 22 February 1999, http://query.nytimes.com/gst/fullpage.html?res=9905E3DF133DF931A15751C0A96F958260&sec=&spon=&pagewanted=all

Concerning Drugs, Gangs and the Solari Index

• “The War On Drugs' War On Minorities,” Los Angeles Times, 24 March 2007, http://www.latimes.com/news/opinion/commentary/la-oe-huffington24mar24,1,4064763.story

• “The War On Drugs,” Wikipedia, http://en.wikipedia.org/wiki/War_on_Drugs#Possible_U.S._government_involvement_in_cocaine_trafficking

• “Narcodollars For Beginners – Part 3, Drugs as Currency,” Catherine Austin-Fitts et. al., http://www.drugwar.com/fittsnarco3.shtm

• “Solari And The Rise Of The Rule Of Law,” Catherine Austin-Fitts, http://solari.com/articles/SolariRiseRuleLaw.htm

Neighborhood Resiliency - An Introduction

You tell me there's an angel in your tree.

Did he say he'd come to call on me?

'Cause things are getting desperate in our home,

living in the parish of the restless folk I've known.

“Burn Down The Mission,” lyrics by Bernie Taupin

As I have become more aware of Peak Oil, resource depletion and environmental destruction, I have also become more aware of the probable effects these crises will have on the communities in which we live. While the biggest part of those effects is economic, there are and will be many other effects. The result of all these effects is likely to be hugely negative unless a neighborhood has existing neighbor-initiated, community-based systems, relationships and connections which are resilient in the face of stress. “A neighborhood's resiliency depends on the stability of its initial equilibrium state. A neighborhood that possesses a large stock of social and physical capital is not easily dislodged from its beneficial equilibrium, but if dislodged by adverse shocks, its reservoir of capital enables it to return to its initial equilibrium.” – Margot Breton, “Neighborhood Resiliency,” Journal of Community Practice, June 2001.

The problem is that many (perhaps most) of the neighborhoods, communities and cities in America are now very fragile. They do not possess large stocks of social and physical capital; instead, no one knows his or her neighbors and almost everyone is dangerously in debt. The present economic crisis is unraveling a great many of the people in these neighborhoods, and the government on all levels is doing very little to fix this.

When I think of neighborhood resiliency, I do not look to the government to provide answers or help, although sometimes I am pleasantly (even delightedly!) surprised by some of the things my particular city is doing. Yet I have decided not to waste my breath/writing paper/Internet time trying to tell Washington my idea of a policy solution. I don't think even now that they're really interested in helping us. Instead, I believe that building up resilient neighborhoods is up to the neighbors who live in them. We will have to be the fix for the problems we face.

Nor have I decided to abandon cities and neighborhoods altogether in favor of holing up on a spread of several wilderness acres with a stash of five tons of baked beans and 5,000 rounds of ammunition. Some may elect to do this, but it's very clear that we can't have 300 million Americans all trying to do this, and it seems to me to be a rather short-sighted and selfish approach to our present times. Instead, I see myself as being somewhat like Billy Joel in the 1970's, who was living in Los Angeles and heard that New York City was going bankrupt, as well as hearing the smug sneers of Angelinos gloating over New York's potential demise. The sneers made him so angry that he said, in effect, “Hey! I'm a New Yorker! If that city's going down, I'm going down with it; we stand together!” As a result, he returned to New York, and wrote, “Say Goodbye to Hollywood.”

I live in a city. Yes, the city has problems and challenges, and the stress of our present emergencies may very well make those problems worse. But I'm getting a little tired of people (even though these people are very smart and far-sighted) who only have time to talk about the likely negative effects of Peak Oil and economic collapse, who have no solutions other than to “bug out and head for the hills,” nor any predictions other than rapidly spreading crime and chaos, who seem to relish the potential onset of “Mad Max – the 3D, Real-Life Version.”

For me, it seems a nobler challenge and a fight worth fighting to try to improve the place where I live, trying to make it a decent place in which decency is honored. (“So why didn't you stay in Southern California?” some may ask. Sometimes I wonder if I should have – but when I left I was trying to pick my battles wisely, and I had a mortgage on which I still had 25 years of payments to go.) So here I am, kicking off an on-again, off-again series of posts on building a resilient neighborhood. I'll be writing about some of the efforts I will undertake here in my own neighborhood. One thing: I have decided I'm going to have a bunch of my neighbors over for coffee some time in the next three weeks. So I have to get the house ready for company. And now that I've said it over the Internet, I guess I have to go through with it.

But I will also write more analytical posts dealing with building neighborhood resiliency, starting with an exploration of the factors which have contributed to making our neighborhoods brittle. This applies particularly to minority neighborhoods, though the factors are now present in almost all American neighborhoods. I will focus especially on the role governments and big businesses have had in undermining neighborhood stability. An understanding of how things got to be so broken and messed up is crucial if we're going to have any chance of fixing things.

One last thing: Both Jeff Vail (http://jeffvail.net/) and John Robb (http://globalguerrillas.typepad.com/) have written about resilient communities in the context of adapting to Peak Oil. You may want to check out their articles. I will take a slightly different approach in my analysis, however.

The Timing Of The Next Oil Price Spike

The world and its official global economy have reached the end of a crucial phase. The beginning of that phase was in 2005, when the world's growth economy first began to encounter the reality of constrained global oil supplies. In May 2005, the world's oil producers produced slightly over 74 million barrels of crude per day (or 85 million, if one counts natural gas liquids, “oil” from tar sands, biofuels, and other non-conventional sources). This was an all-time production record which was not exceeded for at least 2 ½ years, if one believes the production numbers of the International Energy Agency (IEA) and the United States Energy Information Administration (EIA). Some believe that the production numbers for 2008 were inflated, and that the May 2005 record is indeed an all-time record that has never been exceeded.

What is clear, however, is that global oil production stayed in a relatively flat band right around 85 million barrels per day from May 2005 until September 2008. Those who study Peak Oil have called this period the time of the “bumpy plateau,” where oil suppliers struggle to find enough new fields and start enough new projects to offset production declines in existing fields. We know we are past Peak and that the suppliers have lost the struggle when total daily world production begins to fall in spite of the best efforts of oil suppliers. At that point, the world has fallen off the bumpy plateau and is now on the downside of Hubbert's Peak. One of the signals that we are past Peak is an inexorable rise in the price of oil and petroleum products.

The 2007-2008 price spike may therefore have been such a signal. Oil climbed from around $65 per barrel to over $147 per barrel in a little over nine months. There were also spot shortages of petroleum products in various places, though this was not widely reported by the American media. Those who study Peak Oil devised a few theories to describe what they thought would happen as a result of the price spike due to Peak Oil. The consensus of many was that a sufficiently severe spike would derail the global economy, causing a recession and collapsing economic activity. This would also cause the price of oil to fluctuate wildly for a time before resuming its inexorable upward climb.

All these things have happened. The oil price spike of 2008 caused not just a global recession, but the beginnings of a depression potentially so severe that it may just end the official global economy. The price of oil has also crashed – from $147 per barrel to around $40 per barrel today. Of course, the fall in price is not due to finding new supplies (no one has found any large new, cheaply extracted supplies), but is due, rather, to falling economic activity. It now appears that the world has no more new supplies of cheap, easily-gotten oil.

So what happens next? Some analysts have stated that the price of oil will remain low until the world attempts an economic recovery. At that point, perhaps a few years into the future, global demand will run up against shrinking supply and there will be another price spike, followed by the return of a global recession or depression. But a report released in January of this year presents a different view – namely, that the coming price spike won't wait for an economic recovery, but that it will begin this year.

The report, titled, “Oil Prices: Another Spike Ahead,” was written by Jeff Rubin and Peter Buchanan, and is in the 23 January edition of StrategEcon, a publication of CIBC World Markets. (You can find it here: http://research.cibcwm.com/res/Eco/ArEcoMI.html. Click on the report titled, “Reflation.”) The report analyzes the effect of collapsed oil prices on new oil production projects, most of which require prices of well over $60 per barrel to be economical. Because the actual price of oil is so much lower than what is needed for oil producers to make money, many planned oil projects have been cancelled. The result is the removal of well over a million barrels per day of new production, and a decline in total world production from 85.8 million barrels per day in 2008 to 84.8 million barrels per day in 2010. The IEA has also stated that due to depletion of existing oilfields, the petroleum industry will have to spend well over half a trillion dollars each year just to meet future demand. This money is not likely to be spent in our present economic climate.

The CIBC report therefore predicts a supply shortfall of at least two million barrels per day by 2010, and a price spike that will begin in 2009 – indeed, within the next several months. By the end of 2010, the global price of oil will likely be back over $100 per barrel again. This will hinder, and may possibly derail, any attempt at a global economic recovery.

It appears, then, that we have fallen off the bumpy plateau. Or at least we don't have much longer to wait before we know for sure. All the words written on this blog and others concerning alternative systems and living lightly on the earth were not in vain. If anyone hasn't yet taken those words to heart, hopefully it's not too late.

Small-Scale Manufacturing - The Japanese Example, And A Few Last Comments

The issues now being faced by the members of our modern society are so serious that a proper discussion of these issues must include a healthy discussion of practical answers to practical problems. Mere theorizing or philosophizing won't do – although it certainly is entertaining sometimes. The search for practical examples has led me to study case histories of the use of small-scale manufacturing in various countries. Japan is one such country, and it was the subject of a report titled, The Japanese Experience In Technology, authored by Takeshi Hayashi of the United Nations University, and published in 1990. (The entire report can be found here: http://www.unu.edu/unupress/unupbooks/uu36je/uu36je00.htm#Contents.)

The Japanese Experience report shares a motivation and point of view typical of many reports written over the years on appropriate technology and small-scale industry deployment in the developing world. That point of view is the study of appropriate technology and small-scale industry in helping Third World nations achieve a higher level of “development,” i.e., similarity to modern First World society. In other words, the goal of such studies is to help devise strategies for “modernizing” these nations. Thus the citizens of these nations are judged according to how receptive they are to complex First World technology, how adaptible their indigenous small-scale technologies are to First World economic goals, and the ability of small-scale manufacturers in these countries to participate in and compete in a modern, interconnected, global economy. This First World bias is also seen in the way these studies judge indigenous small-scale enterprise according to the First World criterion of “efficiency” – maximum production with maximum profits and minimum cost per unit of production.

It is all but certain that we in the First World are facing a future of economic contraction, of simplification, of a return to a lower standard of living, due to economic collapse, resource shortages and environmental degradation. The studies mentioned above regarding small-scale industry might not therefore seem obviously useful in showing members of an advanced society the strategies and paths for preparing for the future we now face. Yet by reading between the lines and looking at the data in some unexpected ways, we can learn much.

First, the good news: According to the Japanese Experience report, small-scale industries assumed an increasingly prominent role in Japanese gross domestic product after the oil shocks of the 1970's. These oil shocks, along with increasing competition between producers, drove a number of large-scale factories out of business, and “...transformed the mass production system into a system producing high-quality goods in small quantities to meet market needs and to diversify risks.” Secondly, Japanese small-scale factories (with 20 or fewer workers) accounted for 87.3 percent of all Japanese factories in 1980. They employed 20.1 percent of all workers and contributed 12.6 percent of the total national output. Factories with fewer than 100 workers made up 98 percent of all Japanese factories, and employed 58 percent of all workers.

Small-scale industries in Japan also rapidly adopted modern urban industrial technology, aiding their competitiveness in international markets. Workers who mastered key components of an industrial process employed by a large manufacturer were in many cases able to go into business for themselves as subcontractors to their former employers, providing the materials or semi-finished goods produced by the process component they mastered. As the technical understanding of these workers increased and they were able to afford more complex technology, so the range of parts and base components that they could offer to larger manufacturers also increased.

In short, Japan had a long tradition of traditional, small-scale craft industry, which became the small-scale industrial foundation of Japan's 20^th Century modernization. Japanese small-scale manufacturing has been proven to be a most fitting means of providing desired goods to customers without overproduction and waste – a very important characteristic in an era like the one we are now facing, an era of scarce resources and high costs. Moreover, Japan retained its small-scale manufacturing tradition and culture until 1990 at the very least.

But now for the not-so-good news. Japan's culture of small-scale manufacturing has not been immune to the effects of globalism. The removal of trade barriers and the global spread of neoliberal economics has meant the outsourcing and shrinkage of Japan's manufacturing base. In much the same way that cities like Detroit are typical of American deindustrialization, Japanese cities that were manufacturing powerhouses are now shrinking, as noted in a paper titled, “City Shrinkage Issues In Japan” by Yasuyuki Fujii. (Source: http://www.mizuho-ir.co.jp/english/knowledge/shrinkage0405.html) And according to the 2009 online edition of the CIA World Factbook, only 27.9 percent of Japan's labor force works in industry at present.

Japan is thus losing a key component of self-sufficiency. As with other First World nations, the largest sector of the labor force is now the service sector. As the global economy continues to collapse, the value of the “service industry” will diminish in a very obvious way, and the demand for necessary, useful, “made-at-home” physical goods will rebound. Hopefully, the Japanese will have retained enough knowledge of their small-scale craft-industry tradition to revive that tradition when it becomes needed again.

And now for a few last comments on small-scale manufacturing and appropriate technology. I think it's fairly obvious to most people by now that the First World is facing a drastic change of lifestyle due to economic shrinkage and resource depletion. It's also becoming obvious to many that we can't “fix” the global economy so that it starts growing again, nor can we invent some technological fix that will enable us to enjoy lifestyles of continually increasing consumption. Small-scale industry and appropriate technology should be viewed as aids in adapting gracefully to a poorer future, and not as a means of escaping that future.

But there has been a great deal of talk in the blogosphere lately concerning the miniaturization of complex industrial processes. In an earlier post I mentioned the Fab@Home wiki (http://fabathome.org/), a site dedicated to development of desktop-sized computer-aided manufacturing devices (“fabs”) that can “print” 3-dimensional objects. These devices can be built from scratch for as little as $300, and there are those who say that such devices can be set up to reproduce themselves – even down to the level of reproducing the computer circuitry (CPU) that guides the workings of a fab. Alternatively, there are those (like this source: http://future.wikia.com/wiki/Desktop_Semiconductor_Foundry) who predict the development of desktop-sized semiconductor foundries as early as 2010. This is important, because of the major role that microelectronics plays in everyday life in our society. Those who talk of these things speak excitedly of how such devices will allow communities in First World cities to become resilient and self-reliant once again by manufacturing their own goods, and how this will aid us in our quest for an ever-rising standard of living, even as we face issues like declining resources.

I have a different view. I see an upcoming limit to human advancement in microelectronics, a limit dictated by declining energy supplies. For while it is true that final fabrication of highly complex, miniature integrated circuits can be shrunk to a process that fits on a desktop, it is also true that producing the blank silicon wafers that are the feedstock of such a fabrication still requires enormous amounts of energy. Silicon is derived from sand, which is silicon dioxide. The silicon and oxygen atoms in silicon dioxide are held together by very energetic bonds which require a lot of energy to break if one wants to obtain pure silicon. The first step therefore is to melt sand by heating to a temperature of over 3000 degrees F in the presence of carbon. Then the resulting silicon is refined further. Among the processes for this second-stage refining is the Siemens process, which requires heating silicon to a temperature of 2102 degrees F, although newer processes have been invented which run at lower temperature. Still, the refining of electronics-grade silicon is very energy-intensive.

If ready availability of complex microelectronic devices is an indicator of a society's level of technological advancement, I see a time in which our advancement will go into reverse. For as fossil-fuel availability declines, so will the energy available for manufacture of energy-intensive products such as ultrapure silicon. This means a decline of availability of devices that are controlled by complex microelectronics, such as...desktop fabs. Either such devices will become increasingly unavailable to the general public as time passes, or they will become rapidly more expensive, or both. A time may come in which only a select few have access to the latest and greatest computerized manufacturing technology. Those of us without access to the most advanced microelectronics will be forced to rely on our wits and our skills to make things of value.

But this is just my “two cents.” If any readers have alternative insights or arguments, feel free to comment.