Month: April 1999

Eat The Economy

State of the Economy

With the rest of the world sliding into an economic depression, the U.S. economy keeps barreling along as if nothing’s wrong. Why, when other nations are struggling with bank failures, high unemployment, devalued currencies, depressed commodity prices, and soaring consumer prices, is our economy doing fine? Here are some reasons:

Low commodity prices. Most U.S. companies don’t produce or extract commodities anymore (i.e., oil, minerals, ores, food products, etc.)–and the ones that do can get special tax waivers or subsidies from the U.S. government to keep them in business when prices go down. Most U.S. companies benefit when commodity prices drop, because they have to purchase raw materials to refine or manufacture their products. Last year, the Asian collapse led to less demand for basic commodities (especially oil) in Asia. That meant a surplus of these items on the world market, which drove commodity prices down to historic lows. And February’s currency slide in Brazil caused a panic in the coffee and sugar markets; as the Brazilian real became less valuable, there were fears that Brazil would try to sell a lot of its coffee and sugar at lower prices on the world market in order to get more hard currency to pay off its skyrocketing national debt. U.S. importers are perfectly happy to pay less for basic goods, because it means they can make more money on the finished products they sell. Food importers thrive, especially since very little of their price savings will be passed on to the consumer. On the other hand, low oil and gas prices have meant average folks here in the U.S. can spend less money on heating bills and at the gas pump and more money at the shopping mall.

Low interest rates. Because the bottom 90% of Americans make an average salary of only $34,000 per year, most Americans have to borrow money to buy the things they want: cars, houses, new clothes, vacations, etc. The U.S. government and the banking industry have made this easier in two ways: 1) through a series of laws liberalizing the banking industry and credit (which has expanded the number of people who qualify for loans and credit cards and increased the number and type of loans that banks can offer), and 2) by keeping interest rates extremely low. This is what fuels the Federal Reserve’s (and Wall Street’s) obsessive fear of high interest rates. If interest rates go up, credit becomes tight–which means no one can afford to borrow money to spend. This could send consumer spending into a tailspin, U.S. companies would suffer from lagging sales, workers would be laid off, and a recession would ensue. So it’s very important to keep interest rates low enough that middle and upper-middle class Americans feel like they’re getting a good deal when they buy a new car, refinance their mortgages, go shopping at the mall, or take out a home equity loan. Right now, inflation is at its lowest rate since 1950, and interest rates are lower than they’ve been for several decades.

Easy credit. Not only can Americans get cheap loans, but they can go deeper into hock in more ways than they used to. And credit is finally percolating down to the poorest of us, too (although the poor can’t get the extremely low interest rates that middle and upper-middle class Americans can). Yet credit is enough of a novelty for poor folks and their need is such that they are beginning to borrow quite a bit. It’s also difficult to say no to credit cards or high-interest mortgages that hook you in with short-term low credit that automatically becomes high-interest after only a few months …. or one late payment (whichever comes first). While many of the people borrowing money to spend right now can easily afford it, many can’t.

High corporate spending. Yes, companies can go into debt to make purchases, too. One of the main ways they do this is by issuing corporate bonds. After the collapse of the Russian ruble last year, many U.S. investors took their money out of foreign bonds and risky U.S. stocks and went in search of safer investments. Much of that money flowed into the domestic bond markets, and a big chunk of it went into corporate bonds. Combined with a fall in prices for computers and electronics because of lower-priced Asian imports, this infusion of cash has allowed corporate America to buy more technology for the workplace; capital expenditures, which were flat in 1997, soared by 21% last year. Companies have also been able to hire more workers, even from among the ranks of the “chronically unemployed,” adding more people to the pool of consumers who can buy products. Official unemployment is at a very low 4.6%. With more workers and more cash, U.S. companies have also expanded production.

All of these factors are keeping our economy going right now, but there are several clouds on the horizon. For one thing, many companies are laying out a lot of cash to buy computers, phones, copiers, fax machines, software, etc. that are Year 2000 compliant, rather than wasting the time to try and fix what they have, or risk a potential liability problem if something fails eight months from now. Once this issue disappears, the market for electronics will shrink to a more reasonable level (and high-tech businesses will feel the pinch).

Interest rates simply can’t remain this low forever. Collecting interest is how banks, financial companies, and risk-averse investors make money; eventually, banks and finance companies will work out a way to bring consumer interest rates up.

In a world where the U.S. is the consumer of last resort, Americans may be able to soak up a lot of the world’s surplus goods–at least in the short term. But the world (and the U.S. in particular) can hardly afford to continue expanding production forever. Americans are already becoming tapped out in what they can afford to spend. Last year, the U.S. had a negative savings rate for the first time since 1933–meaning Americans spent more than they saved. This is not a minor blip on the radar screen, it’s the continuation of a long trend of Americans saving less and less each year. At some point, either a very large number of us will go bankrupt all at once (over 1 million Americans declared personal bankruptcy in 1997, and a larger number in 1998), or–more likely–most Americans will drastically cut back in their spending to pay off their debts–the very thing that the Federal Reserve, Wall Street, and corporate America fear the most.

So, while I hate to sound like I’m predicting the next big crash, I have to say that, although things are “looking good” now, the underpinnings are very weak. With a shrinking government safety net, the few poor folks who’ve found decent-paying jobs and the many middle class folks who are heavily in debt will be the ones to suffer most if a recession hits.

Sinking Ship

This year’s state legislative session–which was due to end on Sunday, but will undoubtedly go into mandatory overtime–has been an astonishingly unproductive one. Last year at the polls, Democrats overthrew the Republican control of the Senate and managed to install enough newcomers in the House to provide an even split of 49 Dems to 49 Repubs. But the Dems haven’t made hay from this upset, as the lack of decent legislation this year has shown.

The main problem lies in the House, where the tie between parties has produced two co-speakers of the House and two co-chairmen for every House committee. Instead of working from the start to line up sympathetic moderate Republicans to break the tie, the Dems have been happy to sit tight and play party politics…and watch most of their bills get buried in committee.

Our democratic Governor Gary Locke hasn’t been any help, either. Instead of actively working to find more money for teacher salaries, push the legislature to spend up to the I-601 limit, or press for strengthening access to health care coverage, he’s given in to business and industry concerns on each issue (when he hasn’t simply acted–or refused to act–on something merely out of a sense that he needs to cover his ass for his upcoming re-election).

On teacher salaries, Locke threw out a pitiful proposal of a two percent raise that quickly went down in flames. The Democratic-controlled Senate has come miles closer to teachers’ demands, but should be able to meet them entirely if they weren’t so damn scared of spending the money they already have. (It’s call staying within budget, and there’s nothing wrong with that; you could even make a moral argument that the government is obliged to spend what resources it has to serve its poorest constituents and not sit on an idle pot of money, as Republicans and I-601 supporters want.)

But what irks me the most is that, in the face of the death of the state’s Basic Health Plan, Locke and the legislature are turning away from options to save the plan.

The Basic Health Plan (BHP) was part of a legislative health reform package passed in 1993 in response to grassroots organizing around a national single-payer plan. Activists and legislators crafted a surprisingly good package of benefits at a reasonable price. The legislation also required private health insurers to offer a comparable package to the individual market. But as a half-measure subject to the whims of skyrocketing health care costs, the scissors of a Republican-controlled legislature that gutted it in 1995, and the active dislike of business owners and private insurers, it was doomed to failure.

Going into this legislative session, the BHP needed an enormous cash infusion just to support its current benefit levels. Late last year, the plan was forced to raise its premiums as much as 60-100% for its non-subsidized participants. According to the Seattle Times (4/25/99, pg B1), only about 7,500 people remain in the unsubsidized BHP plan today–half the number covered by the plan in November.

Horribly, during this legislative session, the Dems and Gov. Locke have ignored the needs of the BHP and allowed the insurance industry to dictate terms of the debate. Now, we’re seeing an odious bill that could gut the reform act of 1993 even further to appease private insurers by increasing the wait time for pre-existing conditions to nine months from three (to cut off pregnant women who need maternity benefits), and give an open mandate to insurance companies to raise rates on their individual plans whenever they want (currently the state’s insurance commissioner reviews rate increases and either approves or denies them). Insurers would be able to turn down high-risk individuals for the first time. In response, the state would be forced to revive its high-risk pool for people turned away by private insurers, thereby socializing the highest-cost group needing medical coverage, while privatizing profitable groups.

This is moving the whole health care coverage issue entirely in the opposite direction from where it should be going. The state should call the bluff of private insurers and fiscal conservatives both: dare to spend more money on the BHP, lower rates for participants in the state plan instead of increasing them, let private insurers leave Washington state (we can do without them), and most importantly do something to limit health care costs in the state. Looking northward to Canada can give us a few ideas on how to accomplish that last task.

Fortunately, this very bad bill will probably die from a deadlock in the House. Hopefully this week’s special legislative session will be focused on hammering out the state’s two-year operating budget, the transportation budget, and a construction budget. Let’s hope there’s no time left for legislators to sink the final nails in the coffin of the BHP.

The American Way

Alongside the propaganda printed in the daily newspapers on the war in Kosovo, I’ve been reading a book that, curiously, provides an analogy to the Kosovo conflict. Entitled “The Spirit Catches You and You Fall Down” (author: Anne Fadiman), the book is about one Hmong refugee family’s experiences in the U.S., but it also tells the story of how Hmong refugees came to the U.S., and why it’s been difficult for them to adapt to living here.

The saga begins back in the early 1960s with the secret U.S. war in Laos, conducted alongside the U.S. war in Vietnam. The Hmong hillpeople were a distinct ethnic group in Laos; they were chosen by the CIA in the 1960s to be trained to fight the communist Pathet Lao. Living in an area near the border with Vietnam, the Hmong were forced to make a choice: support the Pathet Lao or the U.S.-backed government in Vientiane (the capital city of Laos). About one-quarter of the Hmong population chose to support the Pathet Lao; the rest either tried to stay neutral (which quickly became impossible) or became the U.S. military’s soldiers on the ground.

Meanwhile U.S. military planes pursued a highly secret and active bombing campaign in Laos, which was in many ways very similar to the current NATO bombing of Kosovo and Serbia. U.S. planes flew at high altitudes to avoid anti-aircraft fire, dropped ordinance that was supposed to target only Pathet Lao forces (but often destroyed neutral or friendly Hmong villages), and dropped anti-personnel cluster bombs, many of which still remain unexploded today–a nasty surprise for repatriated Hmong in Laos. The main difference is that the U.S. military readily used napalm and defoliants to destroy jungle in Laos and Vietnam. But with the rapid escalation of the Kosovo bombing campaign–already NATO is considering the use of helicopter gunships and ground troops–can such scorched-earth policies be far behind?

In describing the effects of the secret U.S. war in Laos, it’s worth quoting Fadiman at length:

“In northern Laos, ninety percent of the villages were affected by the war–that is to say, the inhabitants suffered casualties or were displaced, or both. Entire villages fled en masse after their houses were burned and their headmen beaten or killed during nighttime raids by the Pathet Lao or North Vietnamese. Some villages decamped to avoid incidental bombing by American or Royal Lao aircraft. (In 1971, a Hmong leader in Long Pot, a village thirty miles northwest of Long Tieng [the main U.S.-supported Hmong military base in the region–ed.], was asked which he feared most, attacks by the enemy Pathet Lao or bombs dropped by his own allies. “The bombs!” he replied. “The bombs!”) Some were evacuated by Air America, on the theory that in areas where the Pathet Lao were inevitably advancing, the communists’ military gains would be diminished if they captured only land and not people. Some villages simply collapsed because all the able-bodied men were dead or fighting, and the remaining women, children, and elderly men were unable to work enough fields to feed themselves. By 1970, forced to adapt their migratory habits to wartime [the Hmong originally migrated from China to Laos in the early 1800s to avoid cultural repression–ed.], more than a third of the Hmong in Laos had become refugees within their own country. Yang Dao, a Hmong scholar and government adviser, wrote at the time:

…In the space of only a few years the southwest part of the Plain of Jars, once a lush green forest where tigers roamed, has been “urbanized” under the pressure of a continuing exodus that has no relationship whatsoever to the normal sort of economic development linked to industrialization. Today more than 200,000 people live in settlements and military bases ranging from 500 to 30,000 inhabitants, confined to a mountainous strip only 50 to 90 kilometers in area. The rest of the province is total desolation.

In the same chapter, Fadiman quotes Jonas Vangay, a Hmong community leader living in Merced, California, who speaks five languages (Hmong, Lao, Thai, French, and English):

“My parents used to travel barefoot and on horse,” he said. “We lived in a rural and mountainous area where we never saw a car or a bus. Suddenly, in 1960, everything went upside down. The French wars hadn’t really influenced us so much. Less than twenty percent of the Hmong were involved in the battle of Dien Bien Phu. But with the U.S. war, it was ninety percent. You couldn’t stay in your village. You moved around and around and around. Four years later, when I went to Vientiane, what struck me is that you cannot see a lot of Hmong with their black clothing anymore. All are wearing khaki and green soldier clothing. And where we had lived, before the war it was all covered with forests. After the bombardments … il n’ya a plus de forets, il n’ya en a plus, il n’y en a plus, il n’y a rien du tout” … (“There are no more forests, there are no more, there are no more, there is nothing at all.”)

The parallels are too strong to miss. While Kosovo Albanians are more westernized than the Hmong were, they nevertheless are a mostly agrarian people living in a mountainous region. The KLA, who were widely viewed by moderate Kosovars as a group of extremists, are now the ground soldiers for NATO’s air war, and Kosovo refugees are joining the KLA in large numbers. As soon as the bombs began to drop, whole Kosovo villages were uprooted and burned by Serbian militias, while other Kosovars fled the bombing (although the U.S. media calls this “Serbian propaganda” and somehow forgets to interview any refugees on this subject). Many thousands of Kosovar Albanians have fled in anticipation of attack–which happens in any war, especially when anti-personnel cluster bombs are dropped haphazardly over a populated region. It’s clear that the U.S. government and NATO could have looked back to Laos, to Vietnam, or to the carpet bombing of Cambodia to see the likely outcome of a bombing war in the Baltics. The fact is that they didn’t do that–or, more likely, they just didn’t care about the inevitable humanitarian disaster that would–and has–followed.

The Kosovar Albanians resemble the Hmong in another very important way that’s been overlooked by U.S. media accounts of the refugee exodus from Kosovo. The Hmong were fighting in Laos to preserve their cultural integrity; that’s what they based their decisions to either join the Pathet Lao (who they believed would force them to assimilate) or fight for the U.S. (whose political rhetoric is laden with notions of “freedom of religion and expression.”) The same is true in Kosovo. The conflict centers around the struggle of a strong-willed people to remain culturally intact. Until the NATO bombing campaign, the majority of Kosovar Albanians had been engaged in a protracted, nonviolent campaign to win cultural and political rights within Yugoslavia. It was a task that could take decades, but it was pragmatic and obtainable. Now that dream is dead. The only two options left are to either flee or to fight for the KLA vision of an independent Kosovo odiously “ethnically cleansed” of its minority Serbian population. Is it any wonder that so many have chosen to flee?

To see what lies ahead for the Kosovar Albanians, we need only read a little more from Fadiman’s book on the current status of the Hmong:

“Seventeen years later, Foua and Nao Kao use American appliances, but they still speak only Hmong, celebrate only Hmong holidays, practice only the Hmong religion, cook only Hmong dishes, sing only Hmong songs, play only Hmong musical instruments, tell only Hmong stories, and know far more about current political events in Laos and Thailand than about those in the United States. When I met them, during their eighth year in this country, only one American adult, Jeanine Hilt [their social worker–ed.], had ever been invited to their home as a guest. It would be hard to imagine anything further from the vaunted American ideal of assimilation, in which immigrants are expected to submerge their cultural differences in order to embrace a shared national identity … The Hmong came to the United States for the same reason they had left China in the nineteenth century: because they were trying to resist assimilation … the Hmong are what sociologists call ‘involuntary migrants.'”

Like the Hmong, the Kosovar Albanians are being scattered around the globe: some will emigrate to the U.S., some will go to France, Australia, England, and elsewhere. But they will resist the melting pot–just as the Hmong have for over twenty-five years. Those Kosovars that stay in the neighboring republics of Macedonia and Montenegro or in Albania will become like the Palestinians, another people struggling to maintain their cultural identity and connection to their land. And so the war will continue–not for a year, not for two years or three, but for decades. That, unfortunately, is a common result of the American Way of diplomacy.

The above quotes were from “The Spirit Catches You and You Fall Down: A Hmong Child, Her American Doctors, and the Collision of Two Cultures” by Anne Fadiman, which won a National Book Critics Circle Award. The edition I used is: Farrar, Straus and Giroux, New York, 1997, ninth printing. The quotes were from pages 134-6 and 182-3.

ETS! Farmer’s Almanac

Cats vs. Dogs

It’s no secret that some people prefer cats to dogs, while other people wouldn’t let a cat near them for a second. My friends have asked me where I stand on the cats vs. dogs issue. Here’s my answer:

On the farm we had both dogs and cats. The cows were the ultimate rulers of our kingdom, but the dogs and cats got along just fine. And we humans didn’t do too bad, either (although we had to do most of the work–which means, I guess, that we were the peasants).

Anyway, just like you’d find among any group of people, we had smart dogs and dumb dogs, and smart cats and dumb cats.

Our smart dog was Howdy. Too bad he had such a dumb name, but that’s the fault of his previous owner, an army guy newly stationed overseas. We didn’t have the heart to go and change Howdy’s name, since he already responded to it, whether or not we said it with a drawl. Howdy was a cross between an Australian Shepherd and a Border Collie. He was a sheep-herding dog and, like most smart dogs, he needed to have a job to do.

Unfortunately, we didn’t have any really dumb sheep for a smart dog to chase around and keep in line. We couldn’t allow Howdy to chase the cows–at least not too much–because the more the cows get upset, the worse it is for their milk production. So poor Howdy stayed tethered to a long chain most of the time. We did find him a good, centrally located spot where he could constantly tell us what to do. Dad often took him out to the far field to chase the cows into the barn in the mornings, too. And whenever the bull got loose and headed for the neighbor’s manicured lawn, well, Howdy suddenly had the most important job on the farm: bring that bull back at all costs! But in most ways Howdy didn’t fare as well on the farm as two of our other dogs: Rex and Snoopy.

Okay, those are dumb names, too. But lovable dogs seem to need dumb names. The two go hand-in-hand. Rex, for example, was a lean and gangly Dalmatian, and dumb as a post. He had a habit of running around with his pointy tail stuck straight up in the air. On a farm with electric fences, that’s just not very bright. Any other dog scrambling under a fence would put his head, ears and tail down. Not Rex. Furthermore, he never learned. When he yelped, we could hear him clear across the valley.

We were all of one mind about Rex: big heart, but tiny brains. Snoopy, on the other hand, was a puzzle. He was a small, fat Dalmatian that belonged to my older sister, Didi, who petted and played with him. Snoopy followed her around everywhere. My Dad, who never liked dogs all that much (till Howdy came along later), insisted that Snoopy was the dumbest dog he’d ever seen. But I don’t think so, and the very incident my Dad cites as Snoopy’s worst transgression is clear evidence of his sheer brilliance:

One evening Dad got mad and was going to give Didi a spanking for something she’d said or done. (People of my parents’ generation believed that spanking was a child-rearing technique akin to attending Mass on Easter Sunday; we kids, of course, disagreed.) Threatened with a belt-whipping, Didi ran outside in a futile attempt to avoid punishment. My Dad followed on her heels, yelling at her to “come back, you little jerk!” Snoopy, hearing the racket, decided to intervene: he jumped straight up from a prone position and sunk his teeth into Dad’s arm. Now, some people would say that’s a really dumb thing to do: to bite the guy who feeds you. But I say that it’s pretty smart; old Snoopy knew who his main advocate was in the family, and it wasn’t Dad. At least Snoopy had priorities: Didi over Dad. Rex, on the other hand, couldn’t even figure out where his own tail was.

Mom didn’t like the dogs. She was more of a cat person. A dairy farm is a great place for cats, because there’s always something for them to eat: field mice, grain rats, pigeons, cow’s milk, you name it. We also bought dry cat food for the really dumb ones to eat. We had more than a few of those, mostly because of in-breeding. Our coven of cats was ruled by a brother and sister pair from the same litter–named Simon & Garfunkel (it was the ’60s, okay?)–who had their share of idiot kittens before we had them spayed and castrated. But at least one of their offspring turned out smart: Cal (short for “Calico”–for her beautiful orange, red, black, and white-splotched coat). Cal taught a lot of the stray cats to hunt.

We were a home for itinerant cats. City people and suburbanites were always driving out to the country to dump their unwanted cats near our farm. Some of these cats would die from starvation, some from predation, some from disease (city people can sure be lazy about vaccinations!). Some cats would stay and others would move on in search of a warm house, not satisfied with the life of a barn cat. Cal, however, was never lonely with new friends constantly arriving.

One of the strays that stayed was Noko Marie, a tiny, fat, grey tortoise shell kitten whom we named after a B. Cliban cartoon character (it was the ’70s, okay?). She had a squealy meow and was tougher than she looked–quick to claw you if you tried to pet her. We soon found out, however, why she was so fat: she promptly gave birth to five of her own kittens, and her hair fell out. After we caught her and had her spayed, she soon grew her hair back, weaned her babies, and learned to hunt with Cal. Together they lived in lesbian kitty paradise on the farm.

Now, Dad wasn’t much of a cat person. He thought house pets were a useless extravagance. But there was one stray cat that got under his skin–a cat so decidedly macho and full of brawny attitude that he couldn’t resist him. We named Holstein Kitty for his black and white coat, but we might as well have called him Terminator. Nobody could pet Holstein Kitty, or he’d take a chunk out of their hand–as the milk truck driver soon found out. But you could kind of nudge Holstein with the toe of your boot and he wouldn’t mind. His main joy in life, to my father’s delight, was the pursuit of pigeons. Holstein, Cal, and Noko had a cooperative system for hunting them: Holstein would climb high into the rafters of the barn to reach the pigeons’ nests, then knock the baby birds out, while Cal and Noko Marie pounced on them when they hit the ground.

Holstein Kitty exhibited other psychotic tendencies, too. His main form of entertainment (aside from sleeping in the sun) was to stare down cars. I think he had a strange notion that cars were really big dogs (because they kind of bark like dogs). Since Holstein had never met a dog he couldn’t rip to shreds, cars were easy pickings. Often we’d be seated around the kitchen table having lunch and suddenly hear furious honking; Holstein Kitty would be standing in the middle of the street with his back up, glaring into the front grill of the neighbor’s car. (To be fair, we didn’t have many cars going down our street on any given day, and since pavement retains heat, Holstein Kitty would naturally want to take his sunbath on the road.) But Holstein always got his way. No car ever made him budge–they always had to back up and go around him.

So the truth about cats and dogs is this: dogs are not meaner or “worse” than cats, because cats (fluffy and cute as they are) can be plenty mean. At the same time, humans have to recognize that by nature, neither cats nor dogs are suited to living in the city. That doesn’t necessarily mean that they’re meant to live in the country either: some can do it, most can’t. Our house pets simply adapt to situations as best they can. We’ve bred them to live with us. The best this kind of life can offer them is a mix of comfort and boredom in an urban home or a short, dangerous, but sometimes satisfying (although all too often nasty) life in the country as semi-wild creatures. It’s our responsibility to do what we can to make the lives of dogs and cats meaningful, because the fact that we shaped them for our own convenience has disconnected them from nature. For that reason I can’t hate either cats or dogs as a species: I love them both. And I love the dumb ones as much as the smart ones.

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