Saturday, January 10, 2015

Authoritarianism, Class Warfare and the Advance of Neoliberal Austerity Policies

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Right-wing calls for austerity suggest more than a market-driven desire to punish the poor, working class and middle class by distributing wealth upwards to the 1%. They also point to a politics of disposability in which the social provisions, public spheres and institutions that nourish democratic values and social relations are being dismantled, including public and higher education. Neoliberal austerity policies embody an ideology that produces both zones of abandonment and forms of social and civil death while also infusing society with a culture of increasing hardship. It also makes clear that the weapons of class warfare do not reside only in oppressive modes of state terrorism such as the militarization of the police, but also in policies that inflict misery, immiseration and suffering on the vast majority of the population.
Capitalism has learned to create host organisms and in the current historical conjuncture one of those organisms is young people, who are forced to live under the burden of crushing debt. (1) Moreover in the midst of a widening inequality in wealth, income and power, workers, single mothers, youth, immigrants and poor people of color are being plunged into either low-paying jobs or a future without decent employment. (2) For the sick and elderly, it means choosing between food and medicine. Austerity now drives an exchange relationship in which the only value that matters is exchange value and for students that means paying increased tuition that generates profits for credit companies while allowing the state to lower taxes on the rich and mega corporations. (3)

Both neoliberal-driven governments and authoritarian societies share one important factor: They care more about consolidating power in the hands of the political, corporate and financial elite than they do about investing in the future of young people and expanding the benefits of the social contract and common good.

Under this regime of widening inequality that imposes enormous constraints on the choices that people can make, austerity measures function as a set of hyper-punitive policies and practices that produce massive amounts of suffering, rob people of their dignity and then humiliate them by suggesting that they bear sole responsibility for their plight. This is more than the scandal of a perverted form of neoliberal rationality; it is the precondition for an emerging authoritarian state with its proliferating extremist ideologies and its growing militarization and criminalization of all aspects of everyday life and social behavior. (4) Richard D. Wolff has argued that "Austerity is yet another extreme burden imposed on the global economy by the capitalist crisis (in addition to the millions suffering unemployment, reduced global trade, etc.)." (5) He is certainly right, but it is more than a burden imposed on the 99%; it is the latest stage of market warfare, class consolidation and a ruthless grab for power waged on the part of the neoliberal, global, financial elite who are both heartless and indifferent to the mad violence and unchecked misery they impose on much of humanity.
According to Zygmunt Bauman, casino "capitalism proceeds through creative destruction. What is created is capitalism in a 'new and improved' form - and what is destroyed is the self-sustaining capacity, livelihood and dignity of its innumerable and multiplied 'host organisms' into which all of us are drawn/seduced one way or another."(6) Creative destruction armed with the death-dealing power of ruthless austerity measures benefits the financial elite while at the same time destroying the social state and setting the foundation for the punishing state, which now becomes the default institution for those pushed out of the so-called promise of democracy. (7) Both neoliberal-driven governments and authoritarian societies share one important factor: They care more about consolidating power in the hands of the political, corporate and financial elite than they do about investing in the future of young people and expanding the benefits of the social contract and common good.
The stories that now dominate the European and North American landscape are not about economic reform; instead, they embody what stands for common sense among market and religious fundamentalists in a number of mainstream political parties: shock-and-awe austerity measures; tax cuts that serve the rich and powerful, and destroy government programs that help the disadvantaged, elderly and sick; attacks on women's reproductive rights; attempts to suppress voter ID laws and rig electoral college votes; full-fledged assaults on the environment; the militarization of everyday life; the destruction of public education, if not critical thought itself; and an ongoing attack on unions, social provisions, and the expansion of Medicaid and meaningful health care reform. These stories are endlessly repeated by the neoliberal and neoconservative walking dead who roam the planet sucking the blood and life out of everyone and everything they touch - from the millions killed in foreign wars to the millions at home forced into underemployment, foreclosure, poverty or prison. (8)

The passion for public values has given way to the ruthless quest for profits and the elevation of self-interests over the common good.

Right-wing appeals to austerity provide the rationale for slash-and-burn policies intended to deprive government-financed social and educational programs of the funds needed to enable them to work, if not survive. This is particularly obvious in the United States, though it is even worse in countries such as Portugal, Ireland and Greece. Along with health care, public transportation, Medicare, food stamp programs for low-income children, and a host of other social protections, public goods and social provisions are being defunded or slashed as part of a larger scheme to dismantle and privatize all public services, goods and spheres. The passion for public values has given way to the ruthless quest for profits and the elevation of self-interests over the common good. The educational goal of expanding the capacity for critical thought and the outer limits of the imagination has given way to the instrumental desert of a mind-deadening audit culture. We cannot forget that the deficit arguments and austerity policies advocated in its name are a form of class warfare designed largely for the state to be able to redirect revenue in support of the commanding institutions of the corporate-military-industrial complex and away from funding higher education, health care, a jobs program, a social wage, workers' pensions and other crucial public services. Of course, the larger goal is to maintain the ongoing consolidation of class power in the hands of the 1%.
I also want to argue that austerity measures serve another purpose conducive to the interests of the financial elite. Such measures also produce ideologies, policies and practices that depoliticize large portions of the population, particularly those who are unemployed, cast out, homeless, tied to low-paying jobs, experiencing devastating poverty, suffering under the weight of strangulating debt and struggling just to survive. For example, in Greece, where austerity policies have aggressively been put into place, belt-tightening measures have left millions in misery while leaving the resources and lifestyles of the rich untouched. The unemployment rate in Greece hovers around 27 percent. "Suicides have shot up. Cars sit abandoned in the streets. People sift garbage looking for food [and] about 900,000 of the more than 1.3 million who are out of work have not had a paycheck in more than two years, experts say." (9) Similar problems face the rest of Europe as well as the United States.
Politically paralyzed under the ideological fog of a hyper-individualism that insists that all problems are the responsibility of the very individuals who are victimized by larger systemic and structural forces, it is difficult for individuals to embrace any understanding of the common good or social contract, or recognize that the private troubles that plague their lives are connected to larger social issues, and that nothing will change without the necessity of engaging in collective action with others to dismantle the neoliberal system of violence and cruelty.

Austerity measures not only individualize the social; they also produce massive disparities in wealth, income and power that impose immense constraints on people's well-being, freedom and choices, while serving to undermine any faith in government, politics and democracy itself.

Austerity measures not only individualize the social; they also produce massive disparities in wealth, income and power that impose immense constraints on people's well-being, freedom and choices, while serving to undermine any faith in government, politics and democracy itself. The distrust of public values and egalitarian approaches to governance coupled with a wariness, if not a disdain for group solidarities and compassion for the other, nourish and promote a dislike of community engagement, social trust and democratic public spheres. Austerity produces a world without safety nets or the social and political formations that embrace democratic forms of solidarity. Clinging "fiercely to neoliberal ideals of untrammeled individualism and self-reliance," many young people not only embrace therapeutic models of selfhood but develop a deep distrust, if not resentment, of any notion of the social and shun obligations to others. (10)
Austerity measures purposely accentuate the shark cage relations emphasized by the economic Darwinism of neoliberalism and in doing so emphasize a world of competitive hyper-individualism in which asking for help or receiving it is viewed as a pathology. The notion that one should only rely on one's self-interest and sense of resilience functions largely to privatize social problems and depoliticize those who buy into such a logic. The danger here is that the sense of atomization and powerlessness that neoliberalism produces also makes people prone to extremist politics. That is, the distrust of the social contract, government, democratic values and class-based solidarities also nourishes the conditions that give birth to extremist groups who demonize immigrants, push a strident nationalism and appeal to calls for racial purity as a way of addressing the misery many people are experiencing, all the while deflecting attention away from the poisonous violence produced by neoliberalism and ways in which it can be confronted and challenged through a host of democratic approaches that reject austerity as a tool of reform. (11)
By eroding the middle class and punishing working and poor people of color, it becomes difficult for radical movements to emerge, and consequently politics gets emptied of any hope for a democratic future. In the midst of a culture of survival and the normalization of violence, thoughtlessness prevails as time becomes a deprivation focused largely on the need to simply stay alive. Under such circumstances, time becomes a burden, making it difficult for individuals to think critically, grapple with complex problems and resist neoliberal notions of citizenship, which define citizens largely as consumers. As critical thought withers and citizenship turns into a pathology, democracy is reduced to matters of self-interest and falls prey not only to a depoliticizing cynicism, but also a call for anti-democratic alternatives such as the demand for "illiberal democracy," which is taking place in Hungary and "is characterized by extreme nationalism, free-market capitalism designed to promote the interests of the state, government control of the media and concentrated power in the executive branch of the government." (12)
The turn to authoritarian capitalism is on the rise and can be found in "Russia's Vladimir Putin, Recep Tayyip Erdogan of Turkey, and Chinese President Xi Jinping." (13) The principles of authoritarian capitalism are also on full display in the austerity policies pushed without apology by Republican Party extremists and their Democratic Party cohorts in the United States. Channelling Ayn Rand, right-wing politicians such as Paul Ryan, Ted Cruz and Marco Rubio argue for the most extreme austerity policies under the guise that moral weakness and greediness are the debased characteristics of those citizens struggling for financial support and social provisions in the age of austerity. (14) In this discourse, it is not surprising that austerity measures find their ideological legitimation in the notion that self-interest is the foundational element of agency and that selfishness is the highest civic virtue. Rand's insistence that "there is no such thing as society" when coupled with an aggressive assault on all things public and social does more than disparage democracy; it becomes a blueprint for the rise of fascism. Even liberals such as Paul Krugman are sounding the alarm in the midst of rising inequality and the emergence of totalitarian ideologies that make the circumstances ripe for the appeal and rise of totalitarian ideologies that gave birth to the horrors of fascism and Nazism in Europe in the 1930s. (15)

Austerity measures within the current configurations of power represent the undercurrent of a new form of authoritarianism.

Austerity measures within the current configurations of power represent the undercurrent of a new form of authoritarianism - one that refuses political concessions and has no allegiances except to power and capital. There is no hope in trying to reform neoliberal capitalism, because it is broken and cannot be simply reformed. Nor is there any hope in believing that the Democratic Party can be used to fix the system given that the rich liberal elite fund it. As Bill Blunden reminded me in a personal correspondence, "the Democratic Party is the graveyard of social movements who quack like progressives but answer to billionaires." John Stauber gets it right in arguing that the financialization of US society is, among other things, a money machine for the Democratic Party and that the latter's notion of reform is dead on arrival. Any notion that the rich elite, the 1% are going to fund "radical, democratic, social and economic change" is as disingenuous as it delusional.(16) Neoliberal capitalism is a pathology, and it needs to be replaced by a form of radical democracy that refuses to equate capitalism with democracy. These may be dark times, but the drumbeat of resistance is growing among workers, the poor, people of color, young people, artists, educators and others. The key is to form social movements and political parties that have a comprehensive view of politics and struggle, one imbued with the spirit of collective resistance and the promise of a radical democracy. The cycle of brutality, suffering and cruelty appears overwhelming in light of the normalization of the intolerable violence produced by the politics of austerity and neoliberalism. The realms of imagination that would lead to a new vocabulary of struggle, politics and hope appear in short supply. Yet, even as time is running out, the struggle has to be waged. What has been produced by humans, however inhuman and powerful, can be undone. History is open and not sutured as the apostles of casino capitalism would have us believe.
The stakes in this battle are high because the struggle is not simply against austerity measures but the institutions and economic order that produce them. One place to begin in such a struggle is with a new sense of politics driven by a notion of educated hope. Hope turns radical when it exposes the violence of neoliberalism - acts of state and corporate aggression against democracy, humanity and ecological stability itself. Hope has to make the workings of power visible and then it has to offer thoughtful critiques of this machinery of death. But hope must do more than critique, dismantle and expose the ideologies, values, institutions and social relations that are pushing so many countries today into authoritarianism, austerity, violence and war.
Hope can energize and mobilize groups, neighborhoods, communities, campuses and networks of people to articulate and advance insurgent discourses in the movement toward developing higher education as part of a broader insurrectional democracy. Hope is an important political and subjective register that can not only enable people to think beyond the neoliberal austerity machine - the chronic and intergenerational injustices deeply structured into all levels of society - but also to advance forms of egalitarian community that celebrate the voice, well-being, inherent dignity and participation of each person as an integral thread in the ever-evolving fabric of a living, radical democracy. Hope only matters when it turns outward, confronts the obstacles in its path and provides points of identification that people find meaningful in order to become critical agents capable of engaging in transformative collective action.
The financialization of neoliberal societies thrives on a cruel, hyper-individualistic, survival-of-the-fittest ethic. This is the ethic of barbarians, the thoughtless and cruel financial elite. While fear and state violence may be one of their weapons, the politics of austerity is truly one of their strongest forms of control because it imposes a poverty of mind and body that produces not just a crisis of agency but its death. It is time to take social change seriously by imagining a future beyond the austerity policies and power relations that define the misery and violence of a neoliberal social order. It is also time for human beings to discover something about the potential of their own sense of individual and social agency, one that inspires, energizes, educates and challenges with the full force of social movements against those undemocratic forces that make a mockery of social, economic and political justice. As Pierre Bourdieu once argued, the time is right for the collective production of realist utopias, and with that time comes the need to act with passion, courage and conviction.
1. Zygmunt Bauman, "Capitalism has learned to create host organisms," The Guardian, (October 18, 2011). Online: On matters of disposability, see Zygmunt Bauman, Wasted Lives, (London: Polity Press, 2004).
2. One of the best commentaries on inequality in the midst of a slew of high profile books on the subject can be find in Michael Yates, "The Great Inequality," Monthly Review, (March 1, 2012)
3. Suzanne Mettler, Degrees of Inequality: How the Politics of Higher Education Sabotaged the American Dream (New York: Basic Books, 2014).
4. See, for instance, Henry A. Giroux, The Violence of Organized Forgetting (San Francisco: City Lights Books, 2014).
5. Richard D. Wolff, "Austerity: Why and for Whom?," In These Times, (July 15, 2010)
6. Ibid., Bauman, "Capitalism has learned to create host organisms."
7. The most famous proponent of creative destruction is Joseph A. Schumpeter, Capitalism, Socialism, and Democracy: Third Edition (New York: Harper, 2008); See also, Kenneth J. Saltman, Capitalizing on Disaster: Taking and Breaking Public Schools(Boulder: Paradigm Publishers, 2007) and Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism (New York: Picador, 2008).
8. See for example what is happening in Greece, the epic center of austerity measures. C.J. Polychroniou, "The Greek 'Success Story' of a Crushing Economy and a Failed State," Truthout (January 9, 2014). Online:
9. Suzanne Daley, "Greek Patience with Austerity Nears its Limit," The New York Times (December 29, 2014). Online:
10. Jennifer M. Silva, Coming Up Short: Working-Class Adulthood In An Age of Uncertainty, (Oxford Press, New York, NY, 2013), p. 25.
11. C.J. Polychroniou, "The Resurgence of Authoritarianism in Economically Beleaguered Greece: The Shaping of a Proto-Fascist State," Truthout (November 26, 2013). Online:
12. Thomas J. Scott, "Democracy and Its Discontents," Truthout (January 1, 2015). Online:
13. Ibid. Suzanne Daley, "Greek Patience with Austerity Nears its Limit."
14. Anita Biressi and Heather Nunn, "Selfishness in austerity times," Soundings, Issue 56, Spring 2014. pp. 56.
15. Paul Krugman, "Twin Peaks Planet," The New York Times (January 1, 2015). Online:
16. John Stauber, "The Progressive Movement is a PR Front for Rich Democratics," CounterPunch (March 15-17, 2013). Online:

Gentrification of downtown Detroit producing huge profits for the rich

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“I would bet you that of the 100 people who moved out of here, 95 of them are happier today. You can’t even wrap your imagination around what this place once looked like—it was beyond a dump.” So wagered Todd Sachse, referring in a recent Detroit Free Press interview to the working class senior citizens he evicted en masse from the Griswold Building in downtown Detroit in March 2014 to make way for “The Albert” luxury apartments.
These comments reveal the callous indifference not only of Sachse but an entire layer of wealthy developers and investors who are kicking out low-income and poor residents and buying properties for next to nothing. The wave of gentrification sweeping downtown Detroit area is part of the bankruptcy restructuring of the former Motor City. For workers, the process has meant savage pension and health care cuts, evictions, foreclosures and skyrocketing rents. For the rich, tax credits, land giveaways and huge profits have been the order of the day.
The Griswold Building, erected in 1929, was designed by Albert Kahn, the famed “Architect of Detroit.” For the past several decades, it was home to retired and disabled workers on fixed incomes whose rent was subsidized by the government under Section 8 of the Housing Act of 1937.
Sachse’s remarks suggest that the tenants were chiefly responsible for the miserable conditions that existed in the building. In reality, in the years leading up to the evictions, the previous owners did little or nothing to maintain the building, allowing it to deteriorate while increasing their own personal fortunes at taxpayer expense.
Whatever minor improvements took place, including addressing horrific problems like a major bed bug infestation, were only the product of the persistence of the tenants who demanded action from the landlords. Far from being crushed and demoralized, the tenants, many of whom included former auto workers and others industrial workers involved in Detroit’s past social struggles, fought to maintain a dignified place to live and had to fight tooth and nail against the indifference of landowners and federal and local housing agencies. Facing eviction, the tenants organized and issued an appeal to the working class of Detroit to defend their right to decent, low-cost housing (see: Griswold tenants speak out on threatened eviction”).
Damage to several floors from a fire in 2012 had still not been repaired by the time of the eviction more than a year later. Rather than holding those responsible to account, the Detroit City Council awarded Sachse a Commercial Rehabilitation Exemption Certificate upon his purchase of the dilapidated building, allowing the wealthy real estate developer to avoid paying taxes on the property for up to 10 years.
As for the suggestion that the evictees are happier today, in fact at least three of them have since died, including Vanessa Hicks (February 1953-November 2014). Vanessa was one of the most outspoken opponents of the mass eviction. In July 2013, in its third-floor community room whose spacious balcony overlooks Capitol Park, the tenants held a meeting to oppose the eviction. At the time, Vanessa told the World Socialist Web Site, “In this building we’re like a family. If you break up Griswold it’s like breaking up ‘The Griswolds.’” She voted to draft an “open letter to Detroit area citizens,” which asserted that “high-quality housing is a social right that must be guaranteed to all.” (See: Detroit seniors appeal for support to fight evictions)
“I believe Vanessa would be alive today if we were still living there,” said Debra Miller, who was also evicted. “She only knew a few people where she moved to, and they weren’t aware of her diabetes condition and certainly didn’t help her in taking care of things. Some of the oldest tenants had been in Griswold for over 20 years. Our building was an entire neighborhood and each floor was like its own block. We looked out for each other.
“They did us wrong, like they are doing all working people wrong. Dan Gilbert, Todd Sachse and all the politicians are working together against the ordinary people. What really infuriates me is that no one is made accountable for what is happening. The rich are getting much richer and we are losing everything,” Debra said.
Karen, a former teacher, who was also forced out of the building, said she is now paying $550 of her $850 monthly income on rent, and looking for something better. Other evicted tenants moved to other Section 8 housing in the city only to find their new apartments infested with bed bugs, after having just struggled to get them removed from Griswold.
Debra, a member of the Detroit Workers Action Committee initiated by the Socialist Equality Party last year, spoke on what is in store for other workers living in Section 8 buildings in the downtown area. “When you look at what is now happening downtown with the increase in rents and all the money pouring in, what was done to us will happen to others living in Section 8 buildings as well.
“We were fighters at Griswold. We voiced our opinions and fought to get improvements. They decided to get rid of that opposition by cutting off the head and making us move.”
Most Section 8 apartments rent for about $1.25 per square foot, and with the US Department of Housing and Urban Development (HUD) subsidizing the tenants, many paid as low as $150 per month for an 800-square-foot apartment. Three months after the evictions, the Griswold building reopened as The Albert and became the first building in the city to boast $2-per-square-foot rents. Four other Section 8 high-rise buildings are within a few blocks.
Today, after $8 million in renovations at the building, rents at The Albert—with its 24-hour concierge service, fitness center, and pet grooming room—have been eclipsed by the newly renovated David Whitney Building on Grand Circus Park, whose 108 units rent for slightly more than $2 per square foot ($2,500 for a two-bedroom) and are fully booked.
Tenants at 1217 Griswold, an artist loft apartment building near the Griswold/Albert, were evicted in a similar fashion around the same time. Their building was purchased by Bedrock, the firm belonging to real estate and mortgage tycoon Dan Gilbert (net worth $4.1 billion) who owns 60 buildings in “greater downtown.” If rents at that building likewise reach $2 per square foot, it will represent a nearly tenfold increase in the value of the property.
For years, thousands of employees at Gilbert’s Quicken Loans and other major companies located downtown were given cash incentives to move downtown, a policy that also contributed the area-wide rent hikes. Now, many of these employees are unable to afford the new rates.
The WSWS asked Debra what lessons she learned from this experience. She replied, “Working people need to come together and take control. We need to run things. The rich are trying to destroy our spirit and our souls and the only way we can prevent this from happening is to become educated and learn to think for ourselves. The issue is not protesting to the existing system but of changing it as a whole.”

Oil Falls Below 50 As Global Financial Markets Begin To Unravel

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On Monday, the price of oil fell below $50 for the first time since April 2009, and the Dow dropped 331 points.  Meanwhile, the stock market declines over in Europe were even larger on a percentage basis, and the euro sank to a fresh nine year low on concerns that the anti-austerity Syriza party will be victorious in the upcoming election in Greece.  These are precisely the kinds of things that we would expect to see happen if a global financial crash was coming in 2015.  Just prior to the financial crisis of 2008, the price of oil collapsed, prices for industrial commodities got crushed and the U.S. dollar soared relative to other currencies.  All of those things are happening again.  And yet somehow many analysts are still convinced that things will be different this time.  And I agree that things will indeed be “different” this time.  When this crisis fully erupts, it will make 2008 look like a Sunday picnic.
Another thing that usually happens when financial markets begin to unravel is that they get really choppy.  There are big ups and big downs, and that is exactly what we have witnessed since October.
So don’t expect the markets just to go in one direction.  In fact, it would not be a surprise if the Dow went up by 300 or 400 points tomorrow.  During the initial stages of a financial crash, there are always certain days when the markets absolutely soar.
For example, did you know that the three largest single day stock market advances in history were right in the middle of the financial crash of 2008?  Here are the dates and the amount the Dow rose each of those days…
October 13th, 2008: +936 points
October 28th, 2008: +889 points
November 13th, 2008: +552 points
Just looking at those three days, you would assume that the fall of 2008 was the greatest time ever for stocks.  But instead, it was the worst financial crash that we have seen since the days of the Great Depression.
So don’t get fooled by the volatility.  Choppy markets are almost always a sign of big trouble ahead.  Calm waters usually mean that the markets are going up.
In order to avoid a major financial crisis in the near future, we desperately need the price of oil to rebound in a substantial way.
Unfortunately, it does not look like that is going to happen any time soon.  There is just way too much oil being produced right now.  The following is an excerpt from a recent CNBC article
The Morgan Stanley strategists say there are new reports of unsold West and North African cargoes, with much of the oil moving into storage. They also note that new supply has entered the global market with additional exports coming from Russia and Iraq, which is reportedly seeing production rising to new highs.
Since June, the price of oil has plummeted close to 55 percent.  If the price of oil stays where it is right now, we are going to see large numbers of small producers go out of business, the U.S. economy will lose millions of jobs, billions of dollars of junk bonds will go bad and trillions of dollars of derivatives will be in jeopardy.
And the lower the price of oil goes, the worse our problems are going to get.  That is why it is so alarming that some analysts are now predicting that the price of oil could hit $40 later this month
Some traders appeared certain that U.S. crude will hit the $40 region later in the week if weekly oil inventory numbers for the United States on Wednesday show another supply build.
‘We’re headed for a four-handle,’ said Tariq Zahir, managing member at Tyche Capital Advisors in Laurel Hollow in New York. ‘Maybe not today, but I’m sure when you get the inventory numbers that come out this week, we definitely will.’
Open interest for $40-$50 strike puts in U.S. crude have risen several fold since the start of December, while $20-$30 puts for June 2015 have traded, said Stephen Schork, editor of Pennsylvania-based The Schork Report.
The only way that the price of oil has a chance to move back up significantly is if global production slows down.  But instead, production just continues to increase in the short-term thanks to projects that were already in the works.  As a result, analysts from Morgan Stanley say that the oil glut is only going to intensify
Morgan Stanley analysts said new production will continue to ramp up at a number of fields in Brazil, West Africa, Canada and in the U.S. Gulf of Mexico as well as U.S. shale production. Also, the potential framework agreement with Iran could mean more Iranian oil on the market.
Yes, lower oil prices mean that we get to pay less for gasoline when we fill up our vehicles.
But as I have written about previously, anyone that believes that lower oil prices are good for the U.S. economy or for the global economy as a whole is crazy.  And these sentiments were echoed recently by Jeff Gundlach
Oil is incredibly important right now. If oil falls to around $40 a barrel then I think the yield on ten year treasury note is going to 1%. I hope it does not go to $40 because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be – to put it bluntly – terrifying.
If the price of oil does not recover, we are going to see massive financial problems all over the planet and the geopolitical stress that this will create will be unbelievable.
To expand on this point, I want to share an excerpt from a recent Zero Hedge article.  As you can see, a rapid rise or fall in the price of oil almost always correlates with a major global crisis of some sort…
Large and rapid rises and falls in the price of crude oil have correlated oddly strongly with major geopolitical and economic crisis across the globe. Whether driven by problems for oil exporters or oil importers, the ‘difference this time’ is that, thanks to central bank largesse, money flows faster than ever and everything is more tightly coupled with that flow.
Oil Crisis Chart - Zero Hedge
So is the 45% YoY drop in oil prices about to ’cause’ contagion risk concerns for the world?
And without a doubt, we are overdue for another stock market crisis.
Between December 31st, 1996 and March 24th, 2000 the S&P 500 rose 106 percent.
Then the dotcom bubble burst and it fell by 49 percent.
Between October 9th, 2002 and October 9th, 2007 the S&P 500 rose 101 percent.
But then that bubble burst and it fell by 57 percent.
Between March 9th, 2009 and December 31st, 2014 the S&P 500 rose an astounding 204 percent.
When this bubble bursts, how far will it fall this time?

Kochs and Walmart Clan Wage Dirty War to Stop You From Putting Solar Panels on Your Home

Solar panels are popping up everywhere, and it's upsetting to corporate power system

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A new rooftop solar system is installed every three minutes in the U.S., up from one every 80 minutes just eight short years ago. If this pace continues to accelerate or even just holds steady, it will not be long before solar panels become visible, if not ubiquitous, in many neighborhoods nationwide.
That prospect is enough to upset the Koch brothers, the heirs of the Walmart fortune and the utility industry, all which are trying to stamp out the rooftop solar movement or at least make a tidy profit penalizing the people who use it. With the help of powerful lobbyists and PACs like the American Legislative Exchange Council (ALEC), American Enterprise Institute and Americans for Prosperity, they are set to do battle in statehouses across the nation in 2015.
ALEC, which receives much of its funding from the utility industry and fossil-fuel investors like the Kochs, has long been an opponent of renewable energyand the Obama administration’s effort to reduce carbon emissions. It's working with conservative activists and corporate interests to fight homeowners who are installing solar panels on their roofs. Calling people who install rooftop solar panel “freeriders,” another word for freeloaders, the pro-corporate group is actively promoting legislation in states to charge fees, even exorbitant ones, for rooftop solar installations.
Behind the lobbyists are the megarich Walton family. The majority owners of the Walmart retail chain also own several energy interests, including a 30% stake in First Solar, which makes the parts for huge commerical installations of solar panels that operate like power plants. A recent report by the Institute for Local Self-Reliance shows that the Waltons are giving lobbyist organizations millions to attack renewable energy laws at the state level. Their prime targets are the homeowners and businesses that opt for solar panels to provide their own electricity.
“Rooftop solar in the U.S. is growing exponentially and more and more Americans have access to affordable solar power that cuts their energy bills and builds a more sustainable energy future," says Erich Pica, president of Friends of the Earth. "Yet, the Waltons’ money is instead limiting average Americans’ ability to go solar and control their own energy future,” 
Tag-teaming with the Koch brothers and some of the nation’s largest utilities, the Waltons are not being shy in browbeating state lawmakers and agencies to roll back or throw out their renewable energy policies. Over the past few years, they’ve bankrolled campaigns against residential solar in Arizona, Kansas, North Carolina, South Carolina, Ohio, Oklahoma and Washington. Results in these states have been mixed, so far. 
In Arizona, First Solar, with help from the PACs, was successful in securing fees on rooftop solar installations for the state’s energy utilities. Initially, the utilities asked for a $100-a-month surcharge, which would have utterly destroyed any economic incentive to opt for home-generated power. But with some pushback, a compromise was reached, and the new fees for putting solar panels on a home now come to about $5 a month. As relatively small as it is, the new fee seems to have scared off would-be solar adopters in the Grand Canyon state. The thought of the “tax” increasing in coming years may have homeowners thinking twice about installing panels; rooftop installations in Arizona have dropped 40% since the compromise was reached.
While not going directly after homeowners with solar rooftops, ALEC wassimilarly successful in Ohio, making it the first state to hold back on new mandates for renewable energy generation. This had ALEC’s John Eick doing his happy dance. "[Ohio] may have laid the groundwork for other states to move in this direction in the coming year," said ALEC’s legislative analyst.
Ohio’s 2008 standards had mandated that utilities sell an increasing amount of power generated by renewable or alternative fuels over time until it comprised a quarter of the state’s electricity output 10 years from now. It also mandated a sharp reduction in power consumption. Those requirements are now frozen for at least two years while a state legislative commission considers altering them.
Utilities Versus 'Youtilities'
Why are conservative luminaries, corporate lobbyists, and the power companies pushing so hard against the little guy trying to save a few bucks while helping the planet? Because even though solar energy still only accounts for 0.23 percent of the nation’s electricity today, rooftop solar is a real threat to the very existence of utilities in the near future.  
For utilities, the most immediate cause for concern is net metering policies in many states, which allow homeowners and businesses to sell back any excess electricity they create with their solar panels. The surplus electricity goes back into the power grid and is sold to other consumers at low rates, often lower than what the utilities charge for electricity themselves. John Eick told the Guardian that ALEC is worried about how individual homeowners are being compensated for feeding electricity back into the system. He said ALEC wants to reduce the rate homeowners are paid for direct power generation and perhaps even penalize homeowners for selling electricity back to the grid.
While power fed back to the grid from homeowners and businesses isn’t much of a threat to utilities currently, it will be in the near future as solar installations become more popular and affordable. Homegrown solar power, says the utility industry, may soon lay waste to the status quo. The industry’s Edison Institute released a report in 2013 in which it voiced this warning:
“[T]here is a perception that customers will always need to remain on the grid. While we would expect customers to remain on the grid until a fully viable and economic distributed non-variable resource is available, one can imagine a day when battery storage technology or micro turbines could allow customers to be electric grid independent. To put this in perspective, who would have believed 10 years ago that traditional wire telephone customers could economically ‘cut the cord?’”
The Edison Institute further predicts that as more homes with rooftop solar panels are connected to the grid, the price to provide electricity to traditional ratepayers will rise, and will drive even more homeowners to rooftop. At that point “it may be too late to repair the utility business model.”
That time seems to be coming sooner than later. The prices of solar installations keep dropping and the technology behind home solar energy storage is rapidly progressing. Solar City, one of the largest rooftop solar leasing companies, is already marketing advanced battery backup systems to help owners of its solar panels store more surplus energy in the home, and they are doing so with one leader in battery technology, electric-car manufacturer Tesla Motors. (High-tech entrepreneur Elon Musk heads both companies.) And they are not alone; Solar City is being joined by several other technology upstarts in the sales of newer and longer-lasting battery backup systems.
It may only be a few short years, energy analysts say, before these battery backups evolve into systems that allow homeowners to untie themselves from the grid for good. But for now, they are nothing much more than relatively expensive (roughly between $2,000-$10,000) failsafes for infrequent power outages.
Right now, the utilities are more concerned about the grid-tied net-metering arrangements, since they’re starting to serve as virtual batteries for electric consumers. Rooftop solar panel installations on net-metering systems often produce excess power during the day and feed it back into the grid. When the home needs to tap into energy at night and on overcast days, the consumer often isn’t charged for the energy they use until they’ve spent all the credits they generated by selling energy through their panels.
So, utilities do not so much fear consumers leaving the grid, as they do the grid increasingly becoming a network over which they have little control. Rather than being a top-down supply chain of electricity from power plants, it becomes a web of sharing between consumers and commercial energy producers across North America. Electricity will be not a commodity, but a shared resource as consumers barter energy credits with the utilities and one another.
If everyone becomes an energy producer, it challenges and can even break the utility monopolies, transforming the system entirely. Home and business owners, as a network, will compete in an open market rising from the ashes of barren cartels. These corporations, still powerful today, foresee this doomsday scenario (for them) if they can’t rig the system to work solely for them.  
This is why the Walton Family Trust, heavily vested in a future of immense solar arrays, with thousands of solar panels that amount to a power plant, instead of modest rooftop panels, are channeling their self-interest through corporate lobbyists. First Solar is a $6 billion corporation and the Waltons could lose their collective shirts if solar arrays turn out to be a bad investment.
The drift toward residential rooftop solar has been called a “revolution” by the Institute for Local Self-Reliance. “The Waltons claim to have a deep commitment to sustainability, but their support for anti-solar initiatives tells a different story,” says Stacy Mitchell, a senior researcher at ILSR. “The Waltons are investing in efforts that both undercut clean energy and prevent average Americans from benefiting economically from solar power.”
In short, the Waltons have a product on the market, and they want to stop their potential customers from producing this product themselves. In essence, they’re calling for a tax on individuals who harvest their own energy. If the Waltons tried to tax backyard vegetable plots because they sell tomatoes at Walmart, people would start to get the idea of what's at stake here.
Is the Electric Company Too Big to Fail?
In the 16 states where electricity markets are deregulated, the utility industry looks quite different; that, is if you can figure it out. Gone is the monolithic power company that owned the powerplants and the web that brought energy to homes and businesses. While an electric utility is still a regulated monopoly that provides power to the region through its infrastructure, consumers can often purchase electricity from a variety of providers, or the utility may act as the consumer’s agent, buying energy from the market to resell. As murky as this may make the utility picture for consumers, it doesn’t change the basic fact that the ultimate goal of any electric utility to get as much energy through its network as possible. As long as those meters keeping spinning through the kilowatt hours, it’s easy money.
But what happens if those meters grind to a halt, or even run in reverse. Worse yet, what if electrical customers are now providing all the electricity they need during the daytime, when demand is at a peak and prices are high. How does the electric company make up for this? And what of the expensive solar arrays, nuclear power plants, coal- and natural gas-powered plants that might become idle? What happens to them when they’re no longer in critical demand during peak usage times, especially in the summer months when air conditioners may run throughout the day?
It’s hard to comprehend what happens in a world where electricity consumers are increasingly self-reliant. Is the future of the electric utilities to merely become sentinels of the grid? And what of power plants? Are they destined to become backup systems for dark hours and cloudy days? And what about the electric ratepayers who haven’t switched over to alternative energies such as solar or wind; do their rates skyrocket when it costs more per capita to service the grid and sell power? Will this eventually drive those ratepayers to renewable energy as well, the final sling taking down the electric Goliath? It’s hard to predict, but both alternative energy advocates and corporatists say it will be a game-changer within a few short years.
The ISLR is optimistic about a transforming market for consumers. “It’s moving the U.S. from a system in which electricity generation is controlled by a small number of investor-owned utilities and toward a future in which households produce energy and reap the financial benefits,” says its recent report.
No matter how you slice it, rooftop solar power creates uncertainty for the prototypical utility, mass energy provider and the corporations that build and provide resources to these facilities. And uncertainty is something corporations and their investors do not like.
So, if you’re the CEO of a large energy utility owner like Duke Energy, or you’re the Kochs, the Waltons or any other person or institution heavily vested in energy, you’ve got millions, if not billions, of reasons to circumvent and gut the competition. And because your chief rival is not another corporation, but millions of individual homeowners and businesses, you can’t buy them out directly, so you buy out their government representatives. In this era of Citizens United, nothing is stopping you from dispatching swarms of lobbyists to butter up or even threaten politicians to do your bidding. In 2015, this is the American way.