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What Is The ACTUAL Risk for Pacific Coast Residents from Fukushima Radiation? Washington’s Blog

What Is The ACTUAL Risk for Pacific Coast Residents from Fukushima Radiation? Washington’s Blog

“[The Odds of] Longer Term Chronic Effects, Cancer Or Genetic Effects … Cannot Be Said To Be Zero”

It is very difficult to obtain accurate information on the dangers from Fukushima radiation to residents of the West Coast of North America and Hawaii.

On the one hand, there is fear-mongering and “we’re all going to die” type hysteria.

On the one hand, there is a tendency for governments to cover up the truth to avoid panic and deflect blame for bad policy. Japan is poised to pass a bill which would outlaw most reporting on Fukushima.   And the U.S. government is not even monitoring radiation levels in the waters off the U.S. coast.  As the Cape Cod Times reports:

With the first plume of water carrying radionuclides from Fukushima due to hit the U.S. West Coast any day now, [the senior scientist at the Woods Hole Oceanographic Institution, Ken Buesseler’s]  latest project is to convince the federal government to monitor radiation levels in the sea water.

“We don’t have a U.S. agency responsible for radiation in the ocean,” Buesseler said. “It’s really bizarre.”

***

He spent this past week in Washington, D.C., meeting with representatives of the Nuclear Regulatory Commission and the Department of Energy, asking them to come up with some sort of plan to keep tabs on levels of radionuclides in the ocean.

Buesseler also talked with U.S. Sen. Edward Markey, D-Mass., who agreed the federal government has a role in making sure the oceans are healthy and safe.

But Markey said in an email that an increased federal role is not likely [because of budget cuts].

Indeed, Dr. Buesseler points out the circular reasoning which the government is using (at 10:00):

I completely agree that no radiation has been seen in the regards that we’re not really testing for it [laughter] in any organized way … We have very few data; it’s not really being organized. The government says we don’t really need to do that because we’re predicting very low levels. On the other hand, you could argue I’d very much like to see study on our side of the ocean just to confirm these values and build some confidence with the public that’s been concerned about this. They’re right to be concerned — as scientists we’re telling them they shouldn’t be, but it’d be nice to have a few more data points to fill that gap … I’ve been told that there’s very little testing going on.

People are certainly concerned.  As the Wall Street Journal notes:

Water containing radioactive materials has been leaking from storage tanks and drains at the plant into groundwater and the nearby ocean, raising concerns across the world that currents might spread radioactivity to faraway places.

But people don’t know where to get accurate information on the risks involved.

This essay provides reliable information on what is really going on … based upon the known science.   It’s divided into 3 sections:

I.     Is Low-Level Radiation Dangerous … Or Harmless?

II.   How Much Radiation Will We Be Exposed To?

III. How Can We Protect Ourselves from Radiation?

I. Is Low-Level Radiation Dangerous … Or Harmless?

You may have heard different claims about whether low-level radiation is dangerous … or harmless.

Fox News reports:

Doug Dasher, who [teaches] radioecology at the University of Alaska Fairbanks, said it remains possible that there will be minor effects for people on the U.S. West Coast, despite the low test results.

“No acute effects resulting in mortality or damage to organs … would be expected,” he told FoxNews.com. But he added that more subtle effects might occur.

“Longer term chronic effects, cancer or genetic effects… odds are statistically low, if the concentrations in the models remain within the projections, [but] cannot be said to be zero.”

What is Dasher saying?  That even low levels of radiation from Fukushima can increase the risk of cancer and other diseases.

A major 2012 scientific study proves that low-level radiation can cause huge health problems. Science Daily reports:

Even the very lowest levels of radiation are harmful to life, scientists have concluded in the Cambridge Philosophical Society’s journal Biological Reviews. Reporting the results of a wide-ranging analysis of 46 peer-reviewed studies published over the past 40 years, researchers from the University of South Carolina and the University of Paris-Sud found that variation in low-level, natural background radiation was found to have small, but highly statistically significant, negative effects on DNA as well as several measures of health.

The review is a meta-analysis of studies of locations around the globe …. “Pooling across multiple studies, in multiple areas, and in a rigorous statistical manner provides a tool to really get at these questions about low-level radiation.”

Mousseau and co-author Anders Møller of the University of Paris-Sud combed the scientific literature, examining more than 5,000 papers involving natural background radiation that were narrowed to 46 for quantitative comparison. The selected studies all examined both a control group and a more highly irradiated population and quantified the size of the radiation levels for each. Each paper also reported test statistics that allowed direct comparison between the studies.

The organisms studied included plants and animals, but had a large preponderance of human subjects. Each study examined one or more possible effects of radiation, such as DNA damage measured in the lab, prevalence of a disease such as Down’s Syndrome, or the sex ratio produced in offspring. For each effect, a statistical algorithm was used to generate a single value, the effect size, which could be compared across all the studies.

The scientists reported significant negative effects in a range of categories, including immunology, physiology, mutation and disease occurrence. The frequency of negative effects was beyond that of random chance.

***

“When you do the meta-analysis, you do see significant negative effects.”

“It also provides evidence that there is no threshold below which there are no effects of radiation,” he added. “A theory that has been batted around a lot over the last couple of decades is the idea that is there a threshold of exposure below which there are no negative consequences. These data provide fairly strong evidence that there is no threshold — radiation effects are measurable as far down as you can go, given the statistical power you have at hand.”

Mousseau hopes their results, which are consistent with the “linear-no-threshold” model for radiation effects, will better inform the debate about exposure risks. “With the levels of contamination that we have seen as a result of nuclear power plants, especially in the past, and even as a result of Chernobyl and Fukushima and related accidents, there’s an attempt in the industry to downplay the doses that the populations are getting, because maybe it’s only one or two times beyond what is thought to be the natural background level,” he said. “But they’re assuming the natural background levels are fine.”

“And the truth is, if we see effects at these low levels, then we have to be thinking differently about how we develop regulations for exposures, and especially intentional exposures to populations, like the emissions from nuclear power plants, medical procedures, and even some x-ray machines at airports.”

Physicians for Social Responsibility notes:

According to the National Academy of Sciences, there are no safe doses of radiation. Decades of research show clearly that any dose of radiation increases an individual’s risk for the development of cancer.

“There is no safe level of radionuclide exposure, whether from food, water or other sources. Period,” said Jeff Patterson, DO, immediate past president of Physicians for Social Responsibility. “Exposure to radionuclides, such as iodine-131 and cesium-137, increases the incidence of cancer. For this reason, every effort must be taken to minimize the radionuclide content in food and water.”

“Consuming food containing radionuclides is particularly dangerous. If an individual ingests or inhales a radioactive particle, it continues to irradiate the body as long as it remains radioactive and stays in the body,”said Alan H. Lockwood, MD, a member of the Board of Physicians for Social Responsibility.

***

Radiation can be concentrated many times in the food chain and any consumption adds to the cumulative risk of cancer and other diseases.

John LaForge writes:

The National Council on Radiation Protection says, “… every increment of radiation exposure produces an incremen­tal increase in the risk of cancer.”The Environmental Protection Agency says, “… any exposure to radiation poses some risk, i.e. there is no level below which we can say an exposure poses no risk.” The Department of Energy says about “low levels of radiation” that “… the major effect is a very slight increase in cancer risk.” The Nuclear Regulatory Commission says, “any amount of radiation may pose some risk for causing cancer … any increase in dose, no matter how small, results in an incremental increase in risk.” The National Academy of Sciences, in its “Biological Effects of Ionizing Radiation VII,” says, “… it is unlikely that a threshold exists for the induction of cancers ….”

Japan Times reports:

Protracted exposure to low-level radiation is associated with a significant increase in the risk of leukemia, according to a long-term study published Thursday in a U.S. research journal.

The study released in the monthly Environmental Health Perspectives was based on a20-year survey of around 110,000 workers who engaged in cleanup work related to the Chernobyl nuclear plant disaster in 1986.

Scientists from the University of California, San Francisco, the U.S. National Cancer Institute and the National Research Center for Radiation Medicinein Ukraine were among those who participated in the research.

Indeed, the overwhelming consensus among radiation experts is that repeated exposure to low doses of radiation can cause cancer, genetic mutationsheart disease, stroke and other serious illness (and seethis.) If a government agency says anything else, it’s likely for political reasons.

The top U.S. government radiation experts – like Karl Morgan, John Goffman and Arthur Tamplin – and scientific luminaries such as Ernest Sternglass and Alice Stewart, concluded that low level radiation can cause serious health effects.

A military briefing written by the U.S. Army for commanders in Iraq states:

Hazards from low level radiation are long-term, not acute effects… Every exposure increases risk of cancer.

(Military briefings for commanders often contain less propaganda than literature aimed at civilians, as the commanders have to know the basic facts to be able to assess risk to their soldiers.)

The briefing states that doses are cumulative, citing the following military studies and reports:

  • ACE Directive 80-63, ACE Policy for Defensive Measures against Low Level Radiological Hazards during Military Operations, 2 AUG 96
  • AR 11-9, The Army Radiation Program, 28 MAY 99
  • FM 4-02.283, Treatment of Nuclear and Radiological Casualties, 20 DEC 01
  • JP 3-11, Joint Doctrine for Operations in NBC Environments, 11 JUL 00
  • NATO STANAG 2473, Command Guidance on Low Level Radiation Exposure in Military Operations, 3 MAY 00
  • USACHPPM TG 244, The NBC Battle Book, AUG 02

Many studies have shown that repeated exposures to low levels of ionizing radiation from CT scans and x-rays can cause cancer. See thisthisthisthisthisthisthisthisthis and this.

Research from the University of Iowa concluded:

Cumulative radon exposure is a significant risk factor for lung cancer in women.

And see these studies on the health effects cumulative doses of radioactive cesium.

As the European Committee on Radiation Risk notes:

Cumulative impacts of chronic irradiation in low doses are … important for the comprehension, assessment and prognosis of the late effects of irradiation on human beings ….

And see this.

The New York Times’ Matthew Wald reported in May:

The Bulletin of the Atomic Scientists[’] May-June issue carries seven articles and an editorial on the subject of low-dose radiation, a problem that has thus far defied scientific consensus but has assumed renewed importance since the meltdown of the Fukushima Daiichi reactors in Japan in March 2011.

***

This month a guest editor, Jan Beyea [who received a PhD in nuclear physics from Columbia and has served on a number of committees at the National Research Council of the National Academies of Science] and worked on epidemiological studies at Three Mile Island, takes a hard look at the power industry.

The bulletin’s Web site is generally subscription-only, but this issue can be read at no charge.

Dr. Beyea challenges a concept adopted by American safety regulators about small doses of radiation. The prevailing theory is that the relationship between dose and effect is linear – that is, that if a big dose is bad for you, half that dose is half that bad, and a quarter of that dose is one-quarter as bad, and a millionth of that dose is one-millionth as bad, with no level being harmless.

The idea is known as the “linear no-threshold hypothesis,’’ and while most scientists say there is no way to measure its validity at the lower end, applying it constitutes a conservative approach to public safety.

Some radiation professionals disagree, arguing that there is no reason to protect against supposed effects that cannot be measured. But Dr. Beyea contends that small doses could actually be disproportionately worse.

Radiation experts have formed a consensus that if a given dose of radiation delivered over a short period poses a given hazard, that hazard will be smaller if the dose is spread out. To use an imprecise analogy, if swallowing an entire bottle of aspirin at one sitting could kill you, consuming it over a few days might merely make you sick.

In radiation studies, this is called a dose rate effectiveness factor. Generally, a spread-out dose is judged to be half as harmful as a dose given all at once.

***

Dr. Beyea, however, proposes that doses spread out over time might be more dangerous than doses given all at once. [Background] He suggests two reasons: first, some effects may result from genetic damage that manifests itself only after several generations of cells have been exposed, and, second, a “bystander effect,” in which a cell absorbs radiation and seems unhurt but communicates damage to a neighboring cell, which can lead to cancer.

One problem in the radiation field is that little of the data on hand addresses the problem of protracted exposure. Most of the health data used to estimate the health effects of radiation exposure comes from survivors of the Hiroshima and Nagasaki bombings of 1945. That was mostly a one-time exposure.

Scientists who say that this data leads to the underestimation of radiation risks cite another problem: it does not include some people who died from radiation exposure immediately after the bombings. The notion here is that the people studied in ensuing decades to learn about the dose effect may have been stronger and healthier, which could have played a role in their survival.

Still, the idea that the bomb survivor data is biased, or that stretched-out doses are more dangerous than instant ones, is a minority position among radiation scientists.

Dr. Beyea writes:

Three recent epidemiologic studies suggest that the risk from protracted exposure is no lower, and in fact may be higher, than from single exposures.

***

Conventional wisdom was upset in 2005, when an international study, which focused on a large population of exposed nuclear workers, presented results that shocked the radiation protection community—and foreshadowed a sequence of research results over the following years.

***

It all started when epidemiologist Elaine Cardis and 46 colleagues surveyed some 400,000 nuclear workers from 15 countries in North America, Europe, and Asia—workers who had experienced chronic exposures, with doses measured on radiation badges (Cardis et al., 2005).

***

This study revealed a higher incidence for protracted exposure than found in the atomic-bomb data, representing a dramatic contradiction to expectations based on expert opinion.

***

A second major occupational study appeared a few years later, delivering another blow to the theory that protracted doses were not so bad. This 2009 report looked at 175,000 radiation workers in the United Kingdom ….

After the UK update was published, scientists combined results from 12 post-2002 occupational studies, including the two mentioned above, concluding that protracted radiation was 20 percent more effective in increasing cancer rates than acute exposures (Jacob et al., 2009). The study’s authors saw this result as a challenge to the cancer-risk values currently assumed for occupational radiation exposures. That is, they wrote that the radiation risk values used for workers should be increased over the atomic-bomb-derived values, not lowered by a factor of two or more.

***

In 2007, one study—the first of its size—looked at low-dose radiation risk in a large, chronically exposed civilian population; among the epidemiological community, this data set is known as the “Techa River cohort.” From 1949 to 1956 in the Soviet Union, while the Mayak weapons complex dumped some 76 million cubic meters of radioactive waste water into the river, approximately 30,000 of the off-site population—from some 40 villages along the river—were exposed to chronic releases of radiation; residual contamination on riverbanks still produced doses for years after 1956.

***

Here was a study of citizens exposed to radiation much like that which would be experienced following a reactor accident. About 17,000 members of the cohort have been studied in an international effort (Krestinina et al., 2007), largely funded by the US Energy Department; and to many in the department, this study was meant to definitively prove that protracted exposures were low in risk. The results were unexpected. The slope of the LNT fit turned out to be higher than predicted by the atomic-bomb data, providing additional evidence that protracted exposure does not reduce risk.

***

Click here to read the rest.

George Osborne distances himself from Boris Johnson’s IQ comments | Politics | theguardian.com

George Osborne distances himself from Boris Johnson’s IQ comments | Politics | theguardian.com.

George Osborne on The Andrew Marr show

George Osborne on The Andrew Marr show Photograph: BBC

The chancellor, George Osborne, has distanced himself from Boris Johnson‘s suggestion that some people cannot do well in life because of their low IQ, but agreed with the idea that economic equality is impossible.

Osborne is the first senior Conservative to reject the controversial remarks made last week by the London mayor, who said it was futile to try to end inequality when “16% of our species have an IQ below 85 while about 2% have an IQ above 130”.

The chancellor dismissed the language of Johnson, a fellow rival to succeed David Cameron as Tory leader, but suggested there was an element of truth to what he was saying about inequality.

Speaking on the BBC’s Andrew Marr Show, he said: “I wouldn’t have put it like that and I don’t agree with everything he said. Where I think there is increasingly common agreement about across the political spectrum is that you can’t achieve equality of outcome but you should be able to achieve equality of opportunity. You should give everyone wherever they come from the best chance and actually education is the absolute key to this.”

Ed Balls, the shadow chancellor, told the same programme that Johnson’s remarks were not uncommon in Westminster.

“That idea that greed is good and the poor are poor because they are stupid is pretty outdated set of views and there’s rather too much of those attitudes around in politics,” he said.

Johnson’s highly provocative comments were made during a speech in memory of Margaret Thatcher last week, in which he appeared to mock the 16% “of our species” with an IQ below 85 as he called for more to be done to help the 2% of the population who have an IQ above 130.

“Whatever you may think of the value of IQ tests it is surely relevant to a conversation about equality that as many as 16% of our species have an IQ below 85 while about 2% …” he said as he departed from the text of his speech to ask whether anyone in his City audience had a low IQ. To muted laughter he asked: “Over 16% anyone? Put up your hands.” He then resumed his speech to talk about the 2% who have an IQ above 130.

Johnson then told the Centre for Policy Studies thinktank, which helped lay the basis for Thatcherism in the 1970s: “The harder you shake the pack the easier it will be for some cornflakes to get to the top.”

Johnson moved to associate himself with what were seen as the excesses of 1980s Thatcherism as he said: “I stress – I don’t believe that economic equality is possible; indeed some measure of inequality is essential for the spirit of envy and keeping up with the Joneses that is, like greed, a valuable spur to economic activity.”

The deputy Prime Minister Nick Clegg said that Johnson’s comment revealed an “unpleasant, careless elitism”.

 

Thai protests escalate amid violence – Asia-Pacific – Al Jazeera English

Thai protests escalate amid violence – Asia-Pacific – Al Jazeera English.

Tension continues to rise in Thailand’s capital, Bangkok, after the dispersal of red-shirted government supporters following deadly clashes with opposition demonstrators.

Riot police fired tear-gas at protesters trying to force their way into the office compound of the prime minister, Yingluck Shinawatra, and Bangkok’s police headquarters on Sunday.

Reporters saw anti-government protesters trying to destroy concrete barriers outside Government House. Police fired tear gas and water cannons to push them back. Separately, police drove back another crowd of protesters at the Bangkok police headquarters.

About 150 nervous-looking government supporters remained at Rajamangala Stadium in northeastern Bangkok early on Sunday morning, waiting for transport, Al Jazeera Online’s Robert Kennedy reported.

An estimated 50,000 Red Shirts had converged on the site the night before.

Government officials have confirmed that four people died and 58 others sustained injuries in Saturday’s violence.

Leader of anti-government protests calls for escalation

 

The government supporters had been ordered to leave the stadium by Red Shirt leader Thida Thavornseth, who said it remained too dangerous after a night of violence between the rival groups.

The stadium was littered with plastic bags, and water and beer bottles, amid the heavy stench of rotting garbage and urine.

“Our leaders told us to go home because they were too worried that people would be killed or injured,” said 56-year-old Aree Sawangjai, who travelled from the neighbouring province of Samut Sakorn to support the government amid the protests.

Outside the stadium, students from Ramkhamhaeng University opposed to the Red Shirts and the government blocked off roads to the area.

Lorries carrying medical workers were parked nearby on alert.

Across the city, anti-government protesters stormed a police sports complex on Sunday morning, amid plumes of tear gas, as Yingluck was swept away to safety by security forces.

She was now in a secure location which will remain undisclosed, an aide told Reuters news agency.

Siege of ministries

Al Jazeera’s Wayne Hay, reporting from Bangkok on Sunday, said the dispersal of the Red Shirts may embolden the yellow-shirted opposition protesters.

“The anti-government group plan to take over 10 government facilities, and say today is the day that the government will fall,” he said.

The protesters have been occupying several government ministries for the past week.

On Sunday morning, they took control of broadcaster Thai PBS, according to reports.

At the Royal Thai Police headquarters, several thousand protesters were blowing whistles and screaming at riot police behind a razor-wire barricade, Al Jazeera Online’s Kennedy said.

“About 20 police officers who cordoned off Rama 1 Road were challenged by some 100 angry demonstrators. ‘Go away slaves. Go away,’ they shouted. Officers retreated across the street, satisfying the crowd, though taunts and jeers continued,” he said.

The demonstrators are seeking to topple Yingluck’s government, which they believe serves the interests of her brother Thaksin Shinawatra, who was toppled as prime minister by a 2006 military coup after being accused of corruption and abuse of power.

Yingluck’s administration had been attempting to push through an amnesty bill, which many here believe would facilitate Thaksin’s return to power.

 

Over 100,000 defy protest ban in Ukraine – Europe – Al Jazeera English

Over 100,000 defy protest ban in Ukraine – Europe – Al Jazeera English.

The opposition rally is by far the biggest seen in the Ukrainian capital since the Orange Revolution nine years ago [AP]
More than 100,000 demonstrators have chased away police to rally in the centre of Ukraine’s capital, defying a government ban on protests in Independence Square, in the biggest show of anger over the president’s refusal to sign an agreement with the European Union.

Chants of “revolution” resounded across a sea of EU and Ukrainian flags on the square, where the government had prohibited rallies starting on Sunday.

A group of protesters used a tractor to try to break through police lines near the office of President Viktor Yanukovich, eyewitnesses said.

People use a tractor while trying to break through police lines near the president’s office [Reuters]

The approach to the entrance to the presidential administration building was blocked by a line of buses as well as several metal barriers.

Opposition leader Vitaly Klitschko, addressing the protesters, called on Yanukovich and his government to resign, saying they had “stolen” Ukraine’s dream of European integration.

‘They stole the dream’

“The government and the president should resign,” said the heavyweight boxing champion turned opposition politician.

“They stole the dream. If this government does not want to fulfill the will of the people, then there will be no such government, there will be no such president. There will be a new government and a new president,” he said to cheering crowds.

We are furious. The leaders must resign. We want Europe and freedom.

Mykola Sapronov, protester

 

The opposition rally, by far the biggest seen in the Ukrainian capital since the Orange Revolution nine years ago,  came a day after a police crackdown on protesters which inflamed demonstrators further after Yanukovich’s U-turn on Europe.

In a bid to defuse tensions ahead of the rally, Yanukovich issued a statement saying he would do everything in his power to speed up Ukraine’s moves toward the European Union.

In a sea of blue and gold, the colours of both the EU and Ukrainian flags, protesters flooded the streets of central Kiev, angered by Yanukovich’s decision last month to forego signing a landmark EU deal in favour of closer ties with Kiev’s former Soviet master, Russia.

“We are furious,” said Mykola Sapronov, a 62-year-old retired businessman. “The leaders must resign. We want Europe and freedom.”

‘We will respond’

The crowds then moved on to Independence Square, the site of the pro-EU rally that police violently broke up on Saturday.

The interior minister warned that police would respond to any disorder and said Ukraine had no place among the ranks of countries like Libya or Tunisia, where popular uprisings overthrew old guard leadership.

“If there are any calls to disorder, we will respond,” Interfax reported Interior Minister Vitaly Zakharchenko as saying.

But riot police, who had sealed off part of Independence Square following Saturday’s crackdown, withdrew as the marchers approached the square.

Sunday’s rally also marked the anniversary of a 1991 referendum that ushered in Ukraine’s independence from the then-crumbling Soviet Union.

 

Krugman’s Adventures in Fairyland – William L. Anderson – Mises Daily

Krugman’s Adventures in Fairyland – William L. Anderson – Mises Daily.

After studying and teaching Keynesian economics for 30 years, I conclude that the “sophisticated” Keynes­ians really do believe in magic and fairy dust. Lots of fairy dust. It may seem odd that this Aus­trian economist refers to fairies, but I got the term from Paul Krugman.

According to Krugman, too many people place false hopes in what he calls the “Confidence Fairy,” a creature created as a retort to economist Robert Higgs’s concept of “regime uncertainty.” Higgs coined that expression in a 1997 paper on the Great Depression in which he claimed that uncertainty caused by the policies of Franklin Roosevelt’s New Deal was a major factor in the Great Depression being so very, very long.

Nonsense, writes Krugman. Investors are not waiting for governments to “get their financial houses in order” and protect private property. Instead, he claims, investors are waiting for governments to spend in order to create enough “aggregate demand” in the economy to bring about new investments and, one hopes, full employment.

According to Higgs, the “humor columnist for the New York Times, Paul Krugman, has recently taken to defending his vulgar Keynesianism against its critics by accusing them of making arguments that rely on the existence of a ‘confidence fairy.’ By this mockery,” Higgs says, “Krugman seeks to dismiss the critics as unscientific blockheads, in contrast to his own supreme status as a Nobel Prize-winning economic scientist.”

It seems, however, that Krugman and the Keynesians have manufactured some fairies of their own: the Debt Fairy and the Inflation Fairy. These two creatures may not carry bags of fairy dust, but they might as well, given that their “tools” of using government debt and printing money to “revitalize” the economy have the same scientific credibility.

Let us first examine the Debt Fairy. According to the Keynesians, the U.S. economy (as well as the economies of Europe and Japan) languishes in a “liquidity trap.” This is a condition in which interest rates are near-zero and people hoard money instead of spending it. Lowering interest rates obviously won’t spur more business borrowing, so it is up to the government to take advantage of the low rates and borrow (and borrow).

If governments issue enough debt, argue Debt Fairy True Believers, the econ­omy will gain “traction” as government spending, through the power of pixie dust, fuels a recovery. Governments spend, businesses magically gain confidence, and then they spend and invest. (At this point, we are apparently supposed to just overlook the fact that the Keynesians are saying that we need the Debt Fairy to resurrect the Keynesian version of the Confidence Fairy.)

The Inflation Fairy also plays an important role, according to Keynesians, for if bona fide inflation can take hold in the econ­omy and people watch their money lose value, then they will spend more of their savings. In turn, this destruction of savings will, through the power of Keynesian sorcery, revive the econ­omy. Thus inflation undermines what Keynesians call the “Para­dox of Thrift,” a theory that says if a lot of people withhold some present consumption in order to save for future con­sumption, the economy quickly will implode and ultimately will slip into a Liquidity Trap in which no one will spend anything.

These fairies can work their magic if (and only if) one condition exists: factors of production are homogeneous, which means that government spending will enable all lines of production simultaneously. The actual record of the boom-and-bust cycle, however, tells a different story. It seems that the Debt and Inflation Fairies enable booms along certain lines of production (such as housing during the past decade), but as everyone knows, the fairy dust lost its magical powers and the booms collapsed into recessions.

Austrians such as Mises and Rothbard have well under­stood what Keynesians do not: the structures of produc­tion within an economy are heterogeneous and can be distorted by government intervention through inflation and massive borrowing. Far from being creatures that can “save” an economy, the Debt Fairy and the Inflation Fairy are the architects of economic disaster.

Despite Keynesian protestations that the U.S. and European governments are engaged in “austerity,” the twin fairies are active on both continents. The fairy dust they are sprinkling on the economy, however, is more akin to sprinkling ricin on humans. In the end, the good fairies turn into witches.

 

» The Money Changers Serenade: A New Plot Hatches Alex Jones’ Infowars: There’s a war on for your mind!

» The Money Changers Serenade: A New Plot Hatches Alex Jones’ Infowars: There’s a war on for your mind!.

Paul Craig Roberts
Infowars.com
December 1, 2013

Former Treasury Secretary Timothy Geithner, a protege of Treasury Secretaries Rubin and Summers, has received his reward for continuing the Rubin-Summers-Paulson policy of supporting the “banks too big to fail” at the expense of the economy and American people. For his service to the handful of gigantic banks, whose existence attests to the fact that the Anti-Trust Act is a dead-letter law, Geithner has been appointed president and managing director of the private equity firm, Warburg Pincus and is on his way to his fortune.

A Warburg in-law financed Woodrow Wilson’s presidential campaign. Part of the reward was Wilson’s appointment of Paul Warburg to the first Federal Reserve Board. The symbiotic relationship between presidents and bankers has continued ever since. The same small clique continues to wield financial power.

Geithner’s career is illustrative. In the 1980s, Geithner worked for Kissinger Associates. In the mid to late 1990s, Geithner served as a deputy assistant Treasury secretary. Under Rubin and Summers he moved up to undersecretary of the Treasury.

From the Treasury he went to the Council on Foreign Relations and from there to the International Monetary Fund (IMF). From there he was appointed president of the Federal Reserve Bank of New York, where he worked to make banks more profitable by allowing higher ratios of debt to capital, thus contributing to the financial crisis.

Geithner arranged the sale of the failed Wall Street firm of Bear Stearns, helped with the taxpayer bailout of AIG, and rejected saving Lehman Brothers from bankruptcy in order to create the crisis atmosphere needed to more fully subordinate US economic policy to the needs of the few large banks.

Rubin, a 26-year veteran of Goldman Sachs, was rewarded by Citibank for his service to the banks while Treasury Secretary with a $50 million compensation package in 2008 and $126,000,000 between 1999 and 2009.

When a person becomes a Treasury official it is made clear that the choice is between serving the banks and becoming rich or trying to serve the public and becoming poor. Few make the latter choice.

As MIchael Hudson has informed us, the goal of the financial sector has always been to convert all income, from corporate profits to government tax revenues, to the service of debt. From the bankers standpoint, the more debt the richer the bankers. Rubin, Summers, Paulson, Geithner, and now banker Treasury Secretary Jack Lew faithfully serve this goal.

The Federal Reserve describes its policy of Quantitative Easing — the creation of new money with which the Fed purchases Treasury debt and mortgage backed securities — as a low interest rate policy in order to stimulate employment and economic growth. Economists and the financial media have parroted this cover story.

In contrast, I have exposed QE as a scheme for pumping profits into the banks and boosting their balance sheets. The real purpose of QE is to drive up the prices of the debt-related derivatives on the banks’ books, thus keeping the banks with solvent balance sheets.

Writing in the Wall Street Journal (“Confessions of a Quantitative Easer,” November 11, 2013), Andrew Huszar confirms my explanation to be the correct one. Huszar is the Federal Reserve official who implemented the policy of QE. He resigned when he realized that the real purposes of QE was to drive up the prices of the banks’ holdings of debt instruments, to provide the banks with trillions of dollars at zero cost with which to lend and speculate, and to provide the banks with “fat commissions from brokering most of the Fed’s QE transactions.” (See: http://www.paulcraigroberts.org )

This vast con game remains unrecognized by Congress and the public. At the IMF Research Conference on November 8, 2013, former Treasury Secretary Larry Summers presented a plan to expand the con game.

Summers says that it is not enough merely to give the banks interest free money. More should be done for the banks. Instead of being paid interest on their bank deposits, people should be penalized for keeping their money in banks instead of spending it.

To sell this new rip-off scheme, Summers has conjured up an explanation based on the crude and discredited Keynesianism of the 1940s that explained the Great Depression as a problem caused by too much savings. Instead of spending their money, people hoarded it, thus causing aggregate demand and employment to fall.

Summers says that today the problem of too much saving has reappeared. The centerpiece of his argument is “the natural interest rate,” defined as the interest rate at which full employment is established by the equality of saving with investment. If people save more than investors invest, the saved money will not find its way back into the economy, and output and employment will fall.

Summers notes that despite a zero real rate of interest, there is still substantial unemployment. In other words, not even a zero rate of interest can reduce saving to the level of investment, thus frustrating a full employment recovery. Summers concludes that the natural rate of interest has become negative and is stuck below zero.

How to fix this? The way to fix it, Summers says, is to charge people for saving money. To avoid the charges, people would spend the money, thus reducing savings to the level of investment and restoring full employment.

Summers acknowledges that the problem with his solution is that people would take their money out of banks and hoard it in cash holdings. In other words, the cash form of money provides consumers with a freedom to save that holds down consumption and prevents full employment.

Summers has a fix for this: eliminate the freedom by imposing a cashless society where the only money is electronic. As electronic money cannot be hoarded except in bank deposits, penalties can be imposed that force unproductive savings into consumption.

Summers’ scheme, of course, is a harebrained one. With governments running huge deficits, who would purchase bonds at negative interest rates? How would pension and retirement funds operate? Would they also be subject to an annual percentage confiscation?

We know that the response of consumers to the long term decline in real median family income, to the loss of jobs from labor arbitrage across national borders (jobs offshoring), to rising homelessness, to cuts in the social safety net, to the transformation of their full time jobs to part time jobs (employers’ response to Obamacare), has been to reduce their savings rate. Indeed, few have any savings at all. The US personal saving rate is currently 2 percentage points, about 30%, below the long term average. Retired people, unable to earn any interest on their savings from the Fed’s zero interest rate policy, are being forced to draw down their savings in order to pay their bills.

Moreover, it is unclear whether the savings rate is an accurate measure or merely a residual of other calculations. With so many people having to draw down their savings, I wouldn’t be surprised if an accurate measure showed the personal savings rate to be negative.

But for Summers the plight of the consumer is not the problem. The problem is the profits of the banks. Summers has the solution, and the establishment, including Paul Krugman, is applauding it. Once the economy officially turns down again, watch out.

This column first appeared as a Trend Alert, Trends Research Institute

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

 

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